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Cameron, Clegg and Miliband reject proposed pay rise for MPs
(about 3 hours later)
David Cameron has rejected a proposal for MPs to receive a pay rise of nearly £8,000 a year, but is stopping short of following Ed Miliband in vowing to turn down the salary increase.
All three party leaders have attacked proposals to increase MPs' pay by up to £8,000 following recommendations from the official body which sets their pay.
Downing Street said the prime minister would tell the Independent Parliamentary Standards Authority, in a formal response to its proposals, that the overall cost of politics should go down and MPs should not receive a pay rise while public sector workers face restraint.
But while Nick Clegg and Ed Miliband have said they will personally reject any such increase, David Cameron has not said whether he will do so, as he is under increasing pressure from Conservative backbenchers who wish to accept the money.
The prime minister's spokesman said: "A rise isn't taking place. There is a proposal from Ipsa on which it is consulting, on which the prime minister will be making [his] views clear as part of that consultation."
It follows a proposal from the Independent Parliamentary Standards Authority (Ipsa) which has recommended a rise in MPs' pay to around £74,000 a year.
Asked about the Ipsa package, which would increase net costs by £500,000 a year, the spokesman said: "We don't agree. The PM doesn't agree that the cost of politics should go up."
The prospect of a pay hike comes as memories of the expenses scandal are still fresh, and at a time when the rest of the country is suffering austerity measures. Public sector workers' pay has been held down to a 1% increase.
Cameron appeared to leave the door open to a pay rise when he said in Islamabad on 30 June that the overall costs of politics should come down but did not address salaries directly. But Downing Street made clear that Cameron now believes MPs' salaries must be kept in line with other public sector salaries.
The proposed change comes despite the independent regulator admitting that there is "no evidence" that the current level of pay has affected the quality of candidates standing for parliament.
The spokesman said: "He certainly doesn't think that MPs' pay should be going up whilst public sector pay is, rightly, being constrained. But there isn't a rise … There will be a widespread view that the cost of politics shouldn't be going up."
Ipsa – the body responsible for setting MPs' pay and perks – proposed a rise in MPs' pay to around £74,000 a year, but offset it with a crackdown on expenses.
The existing final-salary pension scheme is set to be downgraded to a career-average system, clawing back some of the millions of pounds in extra salary.
The prospect of a pay hike comes with memories of expenses abuses still fresh, and at a time when the rest of the country is suffering austerity measures. Public sector workers' pay has been held down to a 1% increase.
Miliband and Nick Clegg said they would personally shun the extra money, but Cameron stopped short of committing himself to doing the same as he comes under pressure from Tory backbenchers who want a pay hike.
An attempt to stop the recommendation could require a change in the law to prevent the authority from pushing the rise through.
The recommended package released for consultation on Thursday suggests:
The recommended package released for consultation on Thursday suggests:
• A salary of £74,000 in 2015, indexed to average earnings in the future. This is a rise of 9.26%.
• A salary of £74,000 in 2015, indexed to average earnings in the future. This is a rise of 9.26%.
• A new pension on a par with those in other parts of the public service.
• A new, reduced pension on a par with those in other parts of the public service.
• Scrapping "resettlement payments" worth tens of thousands of pounds per MP, and introducing more modest, modern redundancy packages.
• Scrapping "resettlement payments" worth tens of thousands of pounds per MP and introducing more modest, modern redundancy packages.
•A tighter regime of business costs and expenses, ending the provision for things such as evening meals.
• A tighter regime of business costs and expenses, ending the provision for things such as evening meals.
Labour's Miliband said: "I don't think MPs should be getting a 10% pay rise when nurses and teachers are facing either pay freezes or very low increases and people in the private sector are facing similar circumstances.
Miliband said MPs should not receive a pay rise when nurses and teachers were facing either pay freezes or very low increases and people in the private sector were facing similar circumstances.
"I'm very clear – I don't think this package of proposals should go ahead in the current economic circumstances."
"I'm very clear – I don't think this package of proposals should go ahead in the current economic circumstances," he said.
Speaking on his weekly LBC radio phone-in, the Liberal Democrats' Clegg said: "I cannot remember a time in modern years where so many millions of people who are getting up every morning, working hard in the public sector to keep our public services going, have been put under such a prolonged period of public sector pay restraint.
Speaking on his weekly LBC radio phone-in, Clegg said: "[People] working hard in the public sector to keep our public services going, have been put under such a prolonged period of public sector pay restraint.
"That is, to put it mildly, about the worst time in which you seek then to advocate that MPs should get a double-digit pay increase."
"That is, to put it mildly, about the worst time in which you seek then to advocate that MPs should get a pay increase."
Downing Street refused to comment on whether the prime minister would accept the increase, stressing there would be a consultation before the regulator reached a final decision.
Downing Street said the prime minister would tell the authority, in a formal response to its proposals, that the overall cost of politics should go down and MPs should not receive a pay rise while public sector workers face restraint.
Sir Ian Kennedy, the authority's chairman, said the new package represented a fresh start.
The prime minister's spokesman said: "What is in front of us is this Ipsa proposal. The PM's view is that the cost of politics shouldn't go up but should go down."
"The history of MPs' pay and pensions is a catalogue of fixes, fudges and failures to act. The package we put forward today represents the end of the era of MPs' remuneration being settled by MPs themselves.
When told that the authority's proposals could mean that costs would go up by £500,000 a year, the spokesman said: "We don't agree. The PM doesn't agree that the cost of politics should go up."
"For the first time, an independent body will decide what MPs should receive. We will do so in full view, and after consultation with the public," he said.
According to the report, a survey of the public found that most think MPs should be paid between £30,000 and £50,000. The average figure was £49,000. In contrast, MPs think they should be paid £86,251 on average, the report discovered.
The deal proposes a pay increase from the current level of £66,000, to take effect after the general election in 2015. From then on wages will rise annually in line with average UK earnings, a mechanism that the regulator hopes will ensure the situation is resolved in the long term.
The authority will consult on the proposals until mid-October and make a final decision by December. Some MPs hope that the suggested reforms will be heavily watered down following an expected backlash over the next few days.
However, the £15 expenses available for dinner when the house sits beyond 7.30pm will be scrapped, saving hundreds of thousands of pounds a year. There could also be tighter rules on using taxis, and restrictions on claiming running costs for second homes, such as contents insurance.
The proposals will then face a further review in 2015 as part of the authority's statutory duty to re-examine proposals before the general election.
The notorious "golden goodbye" resettlement grants of up to £65,000 that used to be handed to departing MPs will not be brought back. Instead, those defeated at an election could be entitled to redundancy similar to other public sector organisations.
Privately, some MPs claimed the proposals could be stopped if the authority was abolished. Many MPs continue to hold a grudge against the authority for enforcing a hardline expenses regime since the last election.
The proposals will go out for consultation before Ipsa finalises the arrangements in the autumn.
The education secretary, Michael Gove, was one of many politicians who dismissed the proposals. He called the authority a "silly organisation" and suggested that their officials could "stick" the proposed rise.
Kennedy said the package was fair to both taxpayers and MPs. "This package ends the historic peculiarities that have grown up around MPs' pay, and sets MPs' pensions on a sustainable footing for the future.
Some MPs have, in the face of widespread criticism in the media, called for a halt in the way party leaders are conducting the debate over MPs' pay.
"The current pension scheme is unaffordable over the long term. The resettlement grants – which, until Ipsa came in, were worth up to £65,000 and available for all – have had their day. We are recommending a modern, professional approach which also means refining the rules on expenses and business costs to rule out MPs claiming for an evening meal."
Margaret Hodge, the Labour chair of the public accounts committee, said she disagreed with the way that politicians were trying to outdo one another by expressing their willingness to cut their pay packages.
He added: "It is clear from our work talking to the public over the last 18 months that people do not know what their MPs do. Clearly that is damaging for our parliament and has to be addressed. And so we are proposing the introduction of an annual report by MPs.
"I think our leaders shouldn't enter into a Dutch auction. You then end up with people putting themselves forward: 'I'll do it for £20,000, I'll pay you to do it'. You then end up with the rotten boroughs you had in the 19th century," she said.
"The aim is to have as transparent a system as possible. The public will know what MPs get for their costs and expenses, their salaries and pensions, and what they have done.
Andrew Bridgen, the Conservative MP for North West Leicestershire, told BBC Radio 4's World at One that MPs were entitled to receive more.
"I recognise some will just concentrate on the salary rather than the package as a whole, and say it's too high; others that it's too low. There is no easy way forward on this. We have put together a package of reform which we think is fair and which ends the anomalies of the past," he said.
"MPs are paid about the same as a junior school headmistress or headmaster, I've got lots and lots of those in my constituency. There's only one MP," he said.
The consultation runs until 20 October.
The Ipsa chairman, Sir Ian Kennedy, said the pay rise proposal was fair because MPs' pay had fallen back over the years and they needed to be properly rewarded for the job they did. He said the expenses scandal had been the result of too much pay restraint.
