Members’ pay and expenses and ministerial salaries 2017/18

The Independent Parliamentary Standards Authority (IPSA) is responsible for determining and paying Members’ salaries; for preparing and regularly reviewing and revising a scheme under which allowances are paid; and for paying those allowances.

Members’ salaries

From 1 April 2017, the annual salary of a Member of Parliament increased to £76,011. This was the second automatic uprating of Members’ salaries since IPSA was given responsibility for determining Members’ pay.

IPSA reviewed Members’ pay in the 2010 Parliament to put in place a new settlement for the 2015 Parliament. In December 2013, at the end of the review, IPSA published a determination which set the Members’ salary at £74,000, from the beginning of the 2015 Parliament, and provided for MPs’ salaries to be adjusted in line with the rate of annual change in average earnings on 1 April each year, from 2016.

In its statutory review of Members’ pay at the beginning of the 2015 Parliament, IPSA confirmed that Members’ pay would increase to £74,000, after the 2015 General Election, but it determined that subsequent annual increases should be in line with changes in public sector average earnings (not whole economy average earnings).

On 1 March 2018, IPSA announced that the annual salary of a Member of Parliament will increase by 1.8% to £77,379, from 1 April 2018.

Under section 4A of the Parliamentary Standards Act 2009, IPSA is required to undertake a statutory review of Members’ pay following the 2017 general election.

Members’ expenses

Since the 2010 General Election, responsibility for devising a scheme for and paying Members’ expenses has rested with IPSA.

Following a comprehensive review of the Scheme, which began with a consultation between May and October 2016, The Scheme of MPs’ Business Costs and Expenses (Ninth Edition) came into effect on 1 April 2017.

The review identified a number of changes that would be implemented following a general election, which at the time was scheduled for May 2020. The early General Election in June 2017 meant that some changes have been implemented in the course of the 2017/18 financial year. Consequently, IPSA republished the Ninth Edition of its Scheme, in June 2017, setting out only the rules that applied following the General Election.

IPSA’s review led to a change in the fundamental principles of its Scheme “to make them simple and clear, and to express them in a way which provides a framework for rules and behaviours, rather than being rules in themselves”. It distinguished between principles that apply to Members and those that apply to the way in which IPSA administers the Scheme.

IPSA made immediate changes that took effect from the beginning of 2017/18 and signalled that others would be made following the next election (which was expected in 2020). From the beginning of 2017/18 IPSA introduced substantial uplifts in the budgets for Members who rent accommodation in London; for Members with caring responsibilities; and in staffing budgets. IPSA explained that the accommodation budget had fallen significantly in real terms since 2010. It changed support for MPs with caring responsibilities to take account of MPs’ diverse working arrangements and because it did not wish to deter “people from any part of society from seeking to be an MP”. The increase in staffing budgets allowed salary ranges to be brought into line with the wider market.

The original Ninth Edition of the Scheme noted that the following changes would be made after the next general election:

• Employment of connected parties would end, as it was out of step with modern employment practice. IPSA considered that “good practice in recruitment will help to encourage greater diversity among MPs’ staff”;
• A reduction in the budget for associated expenditure for those Members who lived in their own homes, which more closely reflected claims that had been made.
• London Area Living Payment would only be available to Members who represented seats in the London Area to simplify the scheme.

Ministerial salaries

Ministers who are Members of the House of Commons receive a Member’s salary and a ministerial salary. Ministers who are Members of the House of Lords receive a ministerial salary but they cannot claim Lords Attendance Allowance.

On assuming office in May 2010, the Coalition Government announced that ministers’ pay would be cut by 5% and then frozen for the duration of that Parliament. The previous Labour administration had already frozen ministerial salaries through refusing increases in both ministerial and Members’ salaries, so the actual earnings of ministers did not equate to their entitlements.

The Coalition Government made an Order in 2011 to set ministerial salaries in accordance with its May 2010 announcement. However, subsequent increases in Members’ pay led to ministers in the House of Commons waiving part of their ministerial salary to prevent their total remuneration increasing and meant that the salaries drawn by ministers were different to those stated in the legislation.

Following the May 2015 general election, David Cameron announced that he had decided to continue to freeze the pay of ministers in government. Unlike the 2010 Parliament, this freeze applied to the ministerial element of a minster’s total salary. The ministerial element of salary drawn by ministers continues to be below that specified in legislation.