MPs don’t decide their own pay, we do
We are responsible for setting MPs’ pay and determining any change to MPs’ salaries.
We do this independently of both Parliament and Government and is one of our three main responsibilities.
Prior to IPSA, MPs’ pay was a matter for Parliament alone.
In the decades leading up to our inception, the Senior Salaries Review Board, and other experts, made recommendations to Parliament. For a variety of reasons, these were rarely approved by MPs. Over time, this left MPs’ pay lagging behind other comparable public sector roles.
IPSA was created by the Parliamentary Standards Act 2009 and given responsibility for MPs’ business costs.
When the Constitutional Reform and Governance Act 2010 was passed, we were given additional responsibility for MPs’ pay and pensions. It gave us the legal responsibility to review MPs’ pay in the first year of each new Parliament and, as appropriate, make a new decision, known as a “determination”.
Our first steps
The requirement to review pay didn’t apply to the Parliament that began in May 2010. Over the following three years we gathered evidence and began an extensive review.
After polling the public, focus groups and citizens’ juries, we launched the first consultation on MPs’ pay in October 2012.
Instead of making firm proposals, we asked questions about all aspects of MPs’ pay. We set out the evidence we had gathered, which included information on how MPs’ pay compared with other professions, other parliamentary bodies in the UK and around the world, and with national average earnings over the past 100 years.
In January 2013, we published our first report on MPs’ pay. No recommendations were made, but we established our framework and principles for further work.
The next stage
We launched our second consultation in July 2013. This time we outlined a set of proposals for MPs’ pay.
In December 2013 we published our first proposal for MPs’ pay.
Alongside other elements, and to reflect the fact that MPs’ pay had fallen behind other comparable roles, the proposal included a one-off increase to MPs' annual salaries from £67,060 to £74,000. The uplift took effect from the new Parliament in May 2015.
Following this, changes in MPs' pay were linked to changes in national average earnings.
The UK’s changing economy
As a new Parliamentary term had begun, we were obliged to carry out another consultation in June 2015.
We explored changes to the UK’s economic circumstances by asking if there was any new and compelling evidence to suggest changing the previous determination to make a one-off increase.
Despite public opposition to the proposed increase, the UK’s economic circumstances had improved over the previous year-and-a-half, and therefore we decided the proposed increase should go ahead.
It was implemented at the end of June and backdated to 8 May 2015.
Significantly, in recognition of public concerns, the method of linking changes to MPs’ pay to changes in national average earnings was amended to reflect changes in public sector average earnings.
At the start of each financial year, we would amend MPs’ pay in line with the annual percentage increase in the three months to the preceding October when compared to the previous year’s October figure. October is the most recent month for which the Office for National Statistics (ONS) provide firm figures.
The issue of MPs’ pay arose sooner than expected with the General Election of May 2017, and our statutory duty to review pay was fulfilled in May 2018.
The consultation ran until the middle of June 2018 and proposed, and later confirmed, there be no change in how MPs’ pay is determined, given that a long-term solution had been decided only two years before.
Once again unexpectedly, the General Election in December 2019 meant we had to review the MPs’ pay determination before December 2020.
The outbreak of COVID-19 meant it was a difficult time to raise the issue of MPs’ pay – particularly considering nationwide pay cuts and job losses. However, as legally required, a consultation was launched in October 2020.
The consultation stated that linking MPs’ pay to an external benchmark was still correct but considered the most appropriate benchmark to employ, and advocated the continued use of the ONS figure for average public sector earnings.
At the time of the consultation, ONS figures stated that average public sector earnings had increased by 4.1%.
While we didn’t confirm MPs would be getting a pay increase, media coverage of the consultation suggested incorrectly that MPs would receive an increase of approximately £3,000.
For the financial year 2020-21, we confirmed that MPs’ pay would remain unchanged. We found that the existing method for determining pay would result in an increase inconsistent with the wider economic position, and which wouldn’t reflect the reality faced by so many constituents due to the coronavirus pandemic.
We will publish our full response to the consultation and pay determination for the current Parliament in the coming months.
MPs’ pay currently stands at £81,932 per annum.