How does IPSA decide MPs’ pay?
Date published: 1 March 2022
We set MPs’ pay and determine any change to MPs’ salaries. We do this independently of both Parliament and government and it is one of our three main responsibilities.
Prior to our creation, pay was a matter for Parliament alone. The Senior Salaries Review Board and other experts made recommendations to Parliament.
During this time, MPs frequently voted against increasing their own salaries, meaning that their pay was left lagging behind other public sector employees.
We were 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.
Deciding MP pay
We have a legal responsibility to review MPs’ pay in the first year of each new Parliament and, as appropriate, make changes.
We believe MPs play a vital role in our democracy and that this should be reflected in their pay.
It is right that MPs are paid fairly for the responsibility and the unseen work they do in helping their constituents, which has dramatically increased in recent years.
We are committed to supporting a Parliament that reflects society, where people from all walks of life can be an MP.
Our decisions over time
This timeline outlines how the decisions we have made about MPs’ pay were taken.
October: After polling the public, focus groups and citizens’ juries, we launched our first consultation on MPs’ pay. 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.
January: We published our first report on MPs’ pay. No recommendations were made, but we established our framework and principles for further work.
July: We launched our second consultation. This time we outlined a set of proposals for MPs’ pay.
December: We published our first proposal for MPs’ pay. Alongside other elements, and to reflect the fact 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.
May: As we had begun a new Parliamentary term, we were obliged to carry out another consultation. 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.
June: 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 that the proposed increase should go ahead. It was implemented at the end of June 2015 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) provided firm figures.
May: The issue of MPs’ pay arose sooner than expected with the General Election of June 2017, and our statutory duty to review pay was fulfilled in May 2018.
June: The consultation ran until the middle of June 2018 and proposed that there be no change in how MPs’ pay is determined, given that a long-term solution had been decided only two years before.
October: 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, a consultation was launched in October 2020. We were legally required to do this following the general election in 2019.
The consultation suggested that linking MPs’ pay to an external benchmark was still correct but asked which the most appropriate benchmark was to employ. We 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 incorrectly suggested MPs would receive an increase of approximately £3,000.
December: We confirmed that MPs’ pay would remain unchanged for the financial year 2020-21, concluding that the existing method for determining pay would result in an increase inconsistent with the wider economic position and wouldn’t reflect the reality faced by so many constituents due to the coronavirus pandemic.
July: Following our most recent proposal, we launched a consultation and determined that for the next three years we should have some limited discretion to depart from the ONS figure if we judge it the right thing to do. We announced our decision in September.
March: We announced our latest determination of MP’s pay, which will rise to £84,144 from 1 April 2022. This is in line with the decision by IPSA in 2015 to adjust MPs’ pay at the same rate as changes in public sector earnings published by the ONS.
Data-based decision making
MPs’ pay is a contentious topic, but we do a lot of research to enable us to make a decision that provides an appropriate salary for the responsibility and complexity of the role, while also safeguarding public money.
MPs’ salaries and pensions are the only remuneration MPs personally receive from us.
Business costs – such as staffing and office costs – are provided to enable MPs to work from two locations and fully fulfil their parliamentary duties to support and represent their constituents.