News from Labour Matters

Ministers give up pay rise to “set an example”

Ministers have decided not to take any pay rises this year to “set an example for public sector pay restraint”, Gordon Brown said today. His comments follow the Government’s rejection of an official review body’s recommendation calling for all MPs’ pay of £61,181 to be increased by £650 a year for the next three years.

Prior to the announcement, Ministers’ pay would have gone up in line with that announced today for senior civil servants, who will get a 7% increase over the next three years, including a 1.5% rise in the next year. But in a statement following this morning’s Cabinet meeting which agreed the move, Gordon said: “Given the importance of public sector pay restraint at a time of economic uncertainty, ministers will not be accepting any pay rise.”

At the same time, the Leader of the House, Harriet Harman, said that MPs should also forego a recommended pay rise to “set an example at a time of public sector pay restraint”. She also said that, in future, MPs’ salaries should be increased in line with the average of the settlements from a “wide basket” of public sector jobs.

In January, the Prime Minister asked Sir John Baker, the former chairman of the Senior Salaries Review Board (SSRB), to carry out a review aimed at ending the tradition of MPs setting their own salaries. Baker said he received 40 written responses and had 10 phone conversations with MPs, but today recommended that MPs be paid an additional £650 a year for the next three years. This would take their current salary to £64,634 from April 1 2008.

“There was a concern expressed that the quality of parliamentarians was declining and that the inadequate salary made it increasingly difficult to attract ‘mid-career’ professionals to enter politics,” said Baker.

He added: “The suggestion was that there would need to be a significant uplift in parliamentary salaries to remedy this.”

MPs will be given a vote on July 3 asking them to accept either the Government’s or Baker’s recommendations.

Earlier this year, MPs agreed to forgo a 2.65% pay rise recommended by the SSRB, and instead accept a below-inflation 1.95% increase.

In a separate move, a committee of MPs chaired by the Speaker, Michael Martin, is considering giving MPs an additional £23,000 a year to replace the controversial second homes allowance. The members estimate committee is due to report next week and its recommendations will be put to a vote of MPs.

The reviews of MPs’ pay and allowances follow the suspension of Conservative MP Derek Conway for paying his son from parliamentary allowances while he was at university.

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