MPs could be in line for a 2.7 per cent pay rise to more than £84,000 next spring as labour shortages and supply chain chaos drives up wages.
Peers could also see their tax-free daily ‘attendance allowance’ increase by the same proportion, to £332.
After the credit crunch, the Independent Parliamentary Standards Authority was created to oversee politicians’ salaries. The watchdog linked raises with changes in the average earnings of the public sector for October.
The Office for National Statistics revealed yesterday that the figure was 2.7 per cent – which would mean a £2,200 rise from £81,932 to £84,144 in April.
The House of Lords is committed to following uprating as used by the Commons. That would see the daily allowance for peers – who do not usually receive a salary – go up from £323 to £332.
MPs are in line for a 2.7 per cent pay rise to more than £84,000 next spring as labour shortages and supply chain chaos drives up wages
Peers could also see their tax-free daily ‘attendance allowance’ increase to £332 if Ipsa sticks to the usual mechanism
Even though the increase is lower than inflation, CPI rates are at an all-time high of 5.1% today. It would likely put significant pressure on public sector workers and police to secure settlements.
There was a lot of controversy last year over the warping effects of the furlough program. This was despite the fact that MPs were on track for an important increase and the economy was being hit hard by the pandemic.
Ipsa canceled its planned hike and said that it will make adjustments to the figure as necessary over the next years.
Yesterday, however, the ONS reported that side effects such as furlough have been largely absorbed by the new growth rates.
Ipsa spokesperson said that the Ipsa will make its decision regarding MPs’ pay for 2022/23 in early 2019.
When making a decision, ‘Ipsa’ will use ONS data along with other pertinent information.
Sources said that the possibility of the watchdog choosing a higher figure than 2.7% was unlikely, and it would have been a brave move.
A House of Lords spokesman said: “The House of Lords has previously agreed that any increases in Members’ allowances will be linked to rises to MPs’ salaries that are agreed independently by Ipsa.
‘Last year MPs’ salaries were frozen as were House of Lords allowances.
‘Until Ipsa puts forward proposals for MPs’ salaries it is not known whether Lords allowances will increase in 2022.
‘It is possible that they will be frozen again if that is what Ipsa propose for MPs.”