Salaries of Members of the United Kingdom Parliament

The basic annual salary for an MP from 1 April 2013 is £67,060. In addition, MPs are able claim allowances to cover the costs of running an office and employing staff, and maintaining a constituency residence and a residence in London.^[1] Additional salary is paid for appointments or additional duties - such as the chairing of select committees.

Due to additional allowances it is difficult to calculate the annual basic salary of an MP, but for an MP with no additional responsibilities, who stays for a single term of 5 years, the MP's severance package will raise the taxable salary by over £12,000 per annum (see Allowances below) - giving an effective annual salary of £77,738.

Current permitted salary and benefits: Commons

Basic salary

The basic salary of an MP in the House of Commons was increased to £67,060 as of 1 April 2014.^[1] Many MPs (ministers, the Speaker, senior opposition leaders, opposition chief whip, etc.) receive a supplementary salary for their specific responsibilities. As of the 1 April 2014 these increments range from £14,876 for Select Committee Chairs^[2] to £74,990 for the Prime Minister.^[3]

MPs also receive extensive allowances and expenses. Strictly speaking, MPs don't receive these allowances - it is the MPs' staff, landlords, electricity suppliers, insurance companies etc. which receive them. These expenses and allowances are listed below, and have included the paying for, buying and furnishing of second homes^[4]

Office expenses

• Office running costs
• Staffing costs
• Travel: staff
  • Centrally purchased stationery
  • Postage costs
  • Central IT costs
• Communications Allowance

Housing, second home, and travel

MPs receive allowances towards having somewhere to live in London and in their constituency, and travelling between Parliament and their constituency.

• Cost of staying away from main home
• Travel: car
• Travel: rail
• Travel: bike
• Travel: European

Pension arrangements

MPs will normally receive a pension of either 1/40th or 1/50th of their final pensionable salary for each year of pensionable service depending on the contribution rate they will have chosen. Members who made contributions of 13.75% of their salary gain an accrual rate of 1/40th.^[5] According to a 2009 report in the Daily Mail, state contributions for MPs are more than four times higher than the average paid out by companies for final-salary schemes, however they are not significantly more generous than most public sector pensions.^[6]

If an MP stands down during the course of a Parliament for ill health reasons, an ill health retirement grant is payable, calculated in the same way as the Resettlement Grant (as well as an immediate pension based on the service the MP would have accrued if he or she had continued to serve until age 65).^[7]

Resettlement Grant and Winding-up Allowance

On leaving the House of Commons, an MP will be entitled to what is essentially severance pay.

Resettlement Grant

The Resettlement Grant is the name given to the MPs severance pay package. It may be claimed to help former MPs with the costs of adjusting to nonparliamentary life. It is payable to any Member who ceases to be an MP at a General Election. The amount is based on age and length of service, and varies between 50% and 100% of the annual salary payable to a Member of Parliament at the time of the Dissolution.^[8]

In the UK the first £30,000 of severance pay is tax free. The amount retiring MPs, or those who lose their seats receive depends on how old they are and how long they have served in the House. Example. An MP who stays in office for one term (say 5 years) and then leaves office will currently receive tax-free severance pay of 50% of his current salary, or £32,383 at current rates - equivalent to an annual salary increment of over £12,000 at current tax rates and pay scales.^[9]

For the 2010-2015 Parliament, only MPs defeated in their attempt to be re-elected will get one month’s salary for each year served, up to a maximum of six months or over £33,000. From the start of the 2015 Parliament, it will be replaced by a "Loss of Office Payment", at double the statutory redundancy payment. "For the 'average' MP, who leaves office with 11 years' service, this may lead to a payment of around £14,850."^[10]

Winding-up Allowance

There is also up to £42,000 on offer to pay for winding up staff contracts and office rent.^[11] An allowance of up to one third of the annual Office Costs Allowance was paid for the reimbursement of the cost of any work on Parliamentary business undertaken on behalf of a deceased, defeated or retiring Member after the date of cessation of Membership. On 5 July 2001 the House agreed to change the allowance to one third of the sum of the staffing provision and Incidental Expenses Allowance in force at the time of cessation of Membership.^[12]

Summer Recess

• Parliament takes a break of around 45 days for the summer. This is not only for holiday, but so that MPs can spend more time away from parliament in their constituencies to do work there.

History of changes to salary and expenses rules

Prior to the twentieth century, members of parliament were unpaid as it was assumed they would have another income.^[8] The first regular salary was £400 per year, introduced by the Parliament Act of 1911. Some subsequent salary levels were £1000 in 1946, £3250 in 1964, £11,750 in 1980, £26,701 in 1990.^[8] The increase in MPs basic salary since 1996, have been:^[13]

Increase date	Basic salary
Jan 1996	£34,085
Jul 1996	£43,000
Apr 1997	£43,860
Apr 1998	£45,066
Apr 1999	£47,008
Apr 2000	£48,371
Apr 2001	£49,822
Jun 2001	£51,822
Apr 2002	£55,118
Apr 2003	£56,358
Apr 2004	£57,485
Apr 2005	£59,095
Apr 2006	£59,686
Nov 2006	£60,277
Apr 2007	£61,181
Nov 2007	£61,820
Apr 2009	£64,766
Apr 2010	£65,738
Apr 2013	£66,300
Apr 2014	£67,060

From April 2015, the Independent Parliamentary Standards Authority recommends that pay be increased to £74,000 per annum, "indexed to changes in average earnings in the whole economy thereafter".^[14]

See also

• The Green Book (UK Parliament)
• Disclosure of expenses of Members of the United Kingdom Parliament

References