MPs' Pay and Allowances

What are MPs' pay and allowances?

In 2007, the basic salary for Members of Parliament, known as the "Parliamentary Salary", was £60,277.

MPs are also entitled to a number of individual allowances. These include:

A Communications Allowance of £10,000 per annum.

An Additional Cost Allowance of up to £20,902 per annum for those with constituencies outside London, for the cost of maintaining a second home.

A London Supplement Allowance of £1,618 for those with constituencies in London.

Free travel to and from the Houses of Parliament and on Parliamentary business, as well as a Motor Mileage Allowance of up to 20,000 miles per annum at 57.7p per mile, and for mileage above 20,000 miles at 26.6p per mile. Ministers may claim on the same terms if they use their private cars for Ministerial business, but are usually provided with an official car.

A Bicycle Allowance of 20p per mile and a Motorcycle Allowance of 24p per mile in respect of journeys undertaken by bicycle while on Parliamentary duties in the UK.

Free travel for spouses and children aged under 18 for up to 15 journeys per calendar year between Westminster and the MP's registered home or constituency.

Office and Secretarial Allowances of up to £77,534 per annum for London MPs, and £66,458 per annum for non-London MPs (although this can be up to £77,534 in respect of full-time London-based staff), exclusive of pension contributions.

An Incidental Expenses Provision of £19,325 per annum to meet other expenditure which Members may incur wholly necessarily and exclusively in performing their Parliamentary duties.

MPs can also access a General Service Budget for insurance costs, training costs, the costs of accommodating disabilities and unavoidable costs associated with particular constituencies.

Annual increases in MPs' salaries are determined by the average increase in the mid-points of the Senior Civil Service (SCS) pay bands. The calculation of the Parliamentary Salary is reviewed every five years, by the Senior Salaries Review Body (SSRB). Once levels have been proposed by the SSRB they are debated and either agreed or rejected by Parliament.

MPs are entitled to a Final Salary Pension, which is believed to be worth around £30,000 per annum for 20 years of contributions.

Ministers are paid a supplementary salary on top of the Parliamentary Salary. This ranges from £121,437 for the Prime Minister, £72,862 for Cabinet Ministers and the Government Chief Whip, £66,792 for the Leader of the Opposition, £63,486 for the Solicitor General and the Advocate General for Scotland, £37,796 for Ministers of State, the Government Deputy Chief Whip and the Opposition Chief Whip, £28,688 for Parliamentary Under Secretaries of State, and £24,324 for Government Whips and Assistant Whips, and the Opposition Deputy Chief Whip.

The number of paid Ministerial posts is limited by law to 109. Any Ministerial appointments in excess of 109 must be unpaid.

A number of Parliamentary office holders also receive supplementary salaries. The Speaker receives £72,862, the Chairman of Ways and Means £37,796, and the First and Second Deputy Chairs of Ways of Means £33,218.

Ministers and office holders removed from their posts are entitled to severance pay equivalent to three months' salary, provided they are not over 65 and are not appointed to another paid office within three weeks. The Prime Minister, the Lord Chancellor and the Speaker of the House are not so entitled, as they have preferential pension arrangements.

MPs who lose their seat or do not stand for re-election are entitled to a Resettlement Grant, of between 50-100 per cent of salary, depending on age and years of Parliamentary service.

Since late 2003, chairs of Select Committees are entitled to an additional £12,500 on top of their salaries.

Background

Despite a number of attempts throughout the late 18th and 19th Centuries to secure salaries for MPs, it was not until 1911 that this was agreed. An allowance of £400 per annum was granted by a vote of 265 to 173, due largely to pressure from the nascent Labour Party. Then as now, MPs' salaries and allowances are set on by decisions of the House of Commons itself - albeit usually on the basis of recommendations from an independent review body.

Salaries for Ministers were introduced under the Ministers of the Crown Act 1937, and are governed today by the Ministerial and Other Salaries Act 1975, as amended. They are periodically uprated through Orders made under the Act.

Although the idea that a salary for MPs was remuneration for a "career" in politics was strenuously rejected at the time, the move to paying Members was a critical step in both the democratisation and "professionalisation" of politics. With Parliamentary work being paid, it was no longer necessary to be an individual of independent means to seek elected office.

The wage was reviewed irregularly in its early years, and was in fact reduced in 1931. In 1963, the Lawrence Committee was set up to review payments to MPs and Ministers more regularly. Its first recommendations were accepted by Parliament in 1964, increasing the Parliamentary Salary from £1,500 to £3,250. Pensions for MPs were provided for the first time by the Ministerial Salaries and Members' Pensions Act 1965.

In 1970, the Top Salaries Review Body was charged with examining MP pay, and it reported roughly annually from 1971 to 1992. From 1996, the Senior Salaries Review Board has been responsible, also reporting roughly annually. In 1996, MPs voted - against the Government - to adopt the SSRB's proposals of a 26 per cent pay rise (to around £43,000), and adopted procedures for automatically uprating pay without the need for a separate resolution. That year, moreover, Ministers were permitted to claim the full Parliamentary Salary for the first time, this having been resisted previously on the grounds that Ministerial office impeded a Member's work as an MP.

The latest major review of the system occurred in 2001-2002, when the focus of the SSRB reports on pay and pensions and subsequent parliamentary debate concerned the level of members' pensions and allowances, with the House making significant changes to both. In particular, Office Cost Allowances were abolished and replaced by a fundamentally new system of separate allowances was introduced. More controversially, the terms of MPs' pension arrangements were dramatically improved, providing the option of a 1/40 of salary accrual rate in exchange for higher contributions - which not all MPs have taken up.

Controversial

Although controversial at the time, it is now rarely argued that MPs should not be paid at all, as it is widely accepted that the work of an MP is a full-time job in a way it was not in the 19th Century.

Nonetheless, it remains acceptable for MPs to continue to work in other capacities, and many - albeit a declining number - do. There is some opposition to this permission within and outside Parliament, although it is not a substantial force.

A Register of Interests for MPs exists, which requires all earnings accrued by members other than through their Parliamentary Salaries to be declared.
MPs' allowances have also been a source of controversy. Allegations of abuse are rare, and as such, usually make the headlines when they occur. In late 2003, for example, it was alleged that the then Conservative leader Iain Duncan Smith had unreasonably paid his wife a salary for work as a diary secretary. Mr Duncan Smith was, however, cleared of any wrongdoing in early 2004.

Parliamentary Salary levels themselves are also a source of some controversy, although opposition is rarely sustained or organised and tends to flare up only in response to recommendations of the SSRB and Parliamentary debates thereon. Unions have repeatedly condemned the pay and allowance rises approved for themselves by MPs, which have on occasion been considerably greater than those awarded elsewhere in the public sector.

Although the power of MPs themselves to decide their pay and conditions is a source of grievance in some areas, it should be borne in mind that many MPs have frequently voted against large pay rises, and on occasion the discipline of the Government in Parliament has seen pay rises rejected (eg in 1975).

Nonetheless, the pension settlement agreed in 2002 was particularly controversial, given the difficulties being experienced by many private sector pension funds and the apparent lack of action on the Government's part to remedy it.

Quotes

“When we offer £400 a year as payment of Members of Parliament it is not recognition of the magnitude of the service, it is not remuneration, it is not recompense, it is not even a salary. It is just an allowance, to enable men to come here, men who would render incalculable service to the State, and whom it is an incalculable loss to the state not to have here, but who cannot be here because their means do not allow it.”

David Lloyd George MP, then Chancellor of the Exchequer, August 1911

“The pay of a Member of Parliament should not be so high as to become the primary attraction of the job, nor so low as to deter suitable candidates from standing for election”

Robin Cook MP, then Leader of the House, 2001

"Why should taxpayers pay for people to get on their bikes?"

Boris Johnson MP, 2001