Miliband seeks to stop 11% rise for MPs
Miliband says the idea endangers public confidence in politicians as Ipsa is to recommend an increase to £74,000.
Ed Miliband has called for cross-party talks to stop a pay rise of almost £8,000 for MPs because the idea is endangering public confidence in politicians.
He spoke out amid mounting anxiety in Westminster that the Independent Parliamentary Standards Authority (Ipsa) will this week recommend an 11% increase, to £74,000, after the next general election.
Downing Street immediately rejected the call for talks, saying the issue “does not arise” until after 2015 as there will be a review of Ipsa’s decision in the first year of a new parliament.
However, senior Labour sources accused David Cameron of trying to kick the issue into the long grass and warned that it must be dealt with before then to stop the erosion of public trust in MPs.
“If the package of proposals being set out by Ipsa is as reported it cannot go ahead when people are going through the biggest cost-of-living crisis for a generation,” a spokesman for Miliband said.
“We cannot have an outcome for MPs which does not command public confidence. Therefore we are asking the Conservatives and the Liberal Democrats for a cross-party approach which recognises the current economic circumstances where workers in the public and private sectors are going through such difficult times.”
Downing Street sources said MPs should not be getting a pay rise at a time of public sector pay restraint, when state-employed workers such as teachers, nurses and civil servants are seeing their salaries go up by less than 1% a year.
However, the government has not ruled out accepting Ipsa’s proposal after 2015, when most public sector workers will have suffered five years of below-inflation pay rises. In contrast, Philip Hammond, the defence secretary, has publicly rejected the idea of a big salary increase, saying there would be a cabinet-wide decision to reject higher pay.
Danny Alexander, the Lib Dem chief secretary to the Treasury, also said the proposed increase was “utterly incomprehensible”, while Ed Balls, the shadow chancellor, said he could not see himself telling Labour MPs to accept the money.
However, a number of Tory backbenchers are campaigning for the increase to be accepted, making it difficult for Cameron to dismiss the idea entirely.
On Sunday, Sir Peter Bottomley, a Conservative MP, said his colleagues should accept Ipsa’s ruling. “Each leader will say this is the wrong amount at the wrong time. The fact is, it was the leaders who set up the Ipsa system who are given the responsibility to set the level of pay and people can’t interfere with it,” he said. “The only way MPs could overturn this is to defy their leaders and pass a law saying Ipsa is abolished or it will be ignored. That’s impractical given the public interest in setting up Ipsa in the first place.”
Ipsa was created after the expenses scandal because it was thought it was best for MPs to lose the right to set the level of their own pay and expenses. MPs have no power to block the increase unless they pass legislation tearing up the whole Ipsa framework.
It emerged over the weekend that Ipsa would reject calls for restraint in its final plans to reform MPs’ pay and pensions, to be published on Thursday. It will recommend they should be paid £74,000 a year after the general election, an 11% rise on the current £66,396, or a 9% increase on what their pay would otherwise be in 2015-16 allowing for normal pay rises.
The watchdog first proposed the increase in a consultation in June and said it should be matched by cuts to the value of MPs’ pensions. According to one source familiar with the authority’s thinking, these proposals have been hardened up since the summer, meaning MPs’ pensions will become even less generous. As a result, Ipsa will be able to argue that its proposals would result in no net increase in the cost of MPs’ pay and pensions. The June package would have increased their cost by a total of £500,000 a year.
There would be nothing to stop MPs who receive the rise after 2015 handing it back to the Commons authorities or donating it to charity, and it appears many MPs will go into the general election promising exactly that. Potentially this could also lead to calls for fresh legislation, making MPs’ pay an election issue.
In June all three main party leaders criticised the proposed increase. Miliband and Nick Clegg said they personally would refuse to accept an increase, although Cameron was more guarded.