David Cameron faces a furious backlash after the 10 per cent pay rise for MPs was confirmed today, just one week after Osborne ordered four year public sector wage cap.
The issue of politicians’ salaries could no longer be ‘ducked’ and it is pushing ahead with the increase from £67,060 to £74,000 said the Independent Parliamentary Standards Authority
The Mail Online reports: However, the watchdog has climbed down on plans to link their pay to UK-wide average earnings in future – a move that could have left MPs £23,000 better off by 2020. Instead they will be restricted to average rises in the public sector.
The Prime Minister previously branded the substantial boost, backdated to May 8 and tied to cuts in pensions and expenses, ‘unacceptable’ at a time of austerity.
But last month Downing Street indicated that Mr Cameron will not seek to block the move – and he will personally accept the money. Politicians elected before 2015 – including Mr Cameron – will also see a major boost to their pensions as they are based on final salary.
But speaking to ITV News this evening, Mr Cameron revealed he doesn’t agree with IPSA’s decision on the MP pay rise but says it does present ‘an opportunity to do more in terms of charitable giving’.
Mr Cameron told ITV News: ‘I don’t think it’s the right approach or the right time and we made that clear to IPSA.
‘To be fair to IPSA they are saying this won’t cost taxpayers an extra penny because of reforms made to MPs pensions and the like but it’s their decision and they are independent.
‘I don’t think it’s the right decision but what I’m responsible for is ministers’ pay and I cut it by five per cent when I became Prime Minster.
‘I froze it for the whole of the last Parliament. I’m freezing it for the whole of this Parliament so it will have been cut and then frozen for a decade. That’s the bit I’m responsible for. IPSA is independent’
The proposals have caused bitter divisions among MPs, with some decrying the award and others arguing they have been underpaid for decades.
It has also split ministers, with Education Secretary Nicky Morgan breaking ranks to declare she will give the money to charity and International Development Secretary Justine Greening warning that Ipsa is ‘not working in its current form’.
Labour leadership contenders Andy Burnham, Yvette Cooper and Liz Kendall have all declared they will forego the rise.
Foreign Secretary Philip Hammond is likely to be reminded of comments from 2013 when he indicated he would not accept a pay rise while the rest of the public sector was being restrained.
Michael Gove, now Justice Secretary, memorably declared around the same time that Ipsa could ‘stick’ their pay rise.
Under pressure, the Government formally expressed its opposition to an increase in a letter to the watchdog’s final consultation on the plans last month.
Mr Cameron has also imposed a freeze on the ministerial element of pay – meaning he and Cabinet ministers will only get an effective 5 per cent bump in their total remuneration.
However, blocking a rise finalised by Ipsa would require a change in the law, and with a slim majority it is far from clear that Mr Cameron could carry a vote in the Commons.
The hike was originally unveiled in 2013 to address complaints that MPs’ pay has dropped behind that for other jobs.
Ipsa said last month that the mooted rise would go ahead unless ‘new and compelling evidence’ was submitted.
In its report today, the watchdog said the additional four years of 1 per cent public sector pay restrictions unveiled by Chancellor George Osborne in the Summer Budget represented ‘compelling evidence’.
It said MPs’ salaries would now go up every April in line with average weekly public sector earnings, rather than those for the whole workforce.
OBR forecasts show UK-wide average earnings going up 3.6 per cent in 2016, 3.9 per cent in 2017, 3.9 per cent in 2018, and 4.1 per cent in 2019, and 4.4 per cent in 2020.
On top of the £7,000 bump this year, that would have left MPs receiving nearly £90,000 in 2020 – a rise of £23,000 or 34 per cent over five years.
By contrast public sector earnings are only expected to go up by around 5 per cent over the period.
The measure being used by Ipsa has also fallen into negative territory in the past as a result of job cuts – and the watchdog’s report stated:
‘If these data show that public sector earnings have in fact fallen, then MPs’ pay will be cut too.’
The watchdog’s chairman Sir Ian Kennedy defended the salary increase, pointing to other curbs such as introducing a career average pension and scrapping expenses for evening meals.