MPs have signed off on their own substantial pay increase and enhanced expenses, despite the Treasury warning that the move was 'unjustified'. The Chief Secretary to the Treasury attempted to intervene as a powerful Commons committee considered the proposals, but the appeal for restraint was ignored.
Pay Rise Details
The 5 per cent rise, which exceeds that awarded to NHS staff and most public sector workers, took effect in April. This has pushed MPs' salaries to £98,599. The Independent Parliamentary Standards Authority (Ipsa) has also made their expenses more generous. Ipsa is responsible for setting MPs' pay, but its budgets must be approved by the cross-party Speaker's committee.
That approval happened in March, but the committee has only just released a letter from James Murray, who was Rachel Reeves' deputy at the time. Referring to the 5 per cent pay increase, Mr Murray stated: 'This would be significantly higher than ONS wage forecasts across the whole economy (3.2 per cent) and the OBR’s inflation forecast (2.2 per cent) for 2026-27. It would also outpace other public sector workforce pay uplifts for 2026-27, such as the recently announced 3.3 per cent headline pay award for nursing staff. I am not aware of any issues being identified for MPs that would offer a potential justification of this pay award, and HMT would therefore reject this pay award request if it came from a government department.'
Budget Increase
The letter, dated February 27, was scathing about Ipsa's total budget increasing to £316 million in this financial year, up from £293 million in 2025-26. 'This equates to around a 5 per cent real terms uplift, which is higher than most Government departments over the same period,' Mr Murray said. The minister noted that the Treasury had no power over Ipsa but stressed that if a part of Whitehall asked for such an increase, he would demand to know the 'business case for this funding, as well as reassurance that all possible efficiencies and reprioritisation had been taken to minimise the size'.
Future Projections
Ipsa has signalled that MPs' pay will continue to rise, aiming to reach £110,000 by 2029. The Commons watchdog is planning to spend £300 million on politicians' salaries, offices, and business expenses over the next 12 months, compared to £268 million originally estimated for last year, although Ipsa was granted an extra £13 million after costs overran.
Ipsa has pointed to higher take-up of budgets by MPs as driving the extra funding requirements, but it has also made provisions more generous. Under the plans, rubber-stamped by the whole House, staffing budgets are going up 7 per cent, including a 5 per cent pay award. The total staff budget has risen from £103 million in 2019 to a proposed £184 million in the coming year, including £7.7 million for resource to tackle 'backlogs' in work. Each MP office will be able to spend £4,000 on 'health, wellbeing and development'.
Regional Variations
London MPs are getting a 6.3 per cent uplift to cover accommodation, while those representing other parts of the country have been handed 5.2 per cent, boosting costs by £900,000 a year. Greater London MPs are now being allowed to rent properties in Westminster even though they live within commuting distance.
In a memo to the Speaker's Committee, Ipsa said 'most of this estimate comprises routine budget and inflationary increases'. The document added: 'The roles of an MP and their staff have evolved over time. MPs are experiencing unprecedented levels and complexity of constituency casework driven by global and domestic events and economic pressures, requiring greater experience and capability. They are facing rising challenges to safety from abuse and intimidation in person and online, and heightened security brings additional workload and costs.' MPs' security costs are largely met from the House of Commons budgets.
Treasury Concerns
This is not the first time the Treasury has voiced concerns about the mounting costs of MPs' pay and support. Mr Murray told Scipsa at the start of this year that an 8 per cent in-year increase in budgets would not have been permitted at a Government department. He said that in 2026-27 the watchdog needed to 'drive efficiencies, strengthen forecasting and cost control, and manage future pressures within existing settlements, rather than relying on further budget growth'.
Scipsa had previously 'noted' the Chief Secretary's objections but gone ahead. 'We agree with him that Ipsa must continue to drive efficiencies, strengthen forecasting and cost controls, and where possible manage pressures within existing settlements,' the MPs said earlier this year. 'Taking all this into account, we have concluded that the supplementary estimates offered to us meet the test imposed by the Parliamentary Standards Act in their being consistent with the efficient and cost-effective discharge by Ipsa of their functions. We will continue to require Ipsa to produce taut and realistic main estimates in line with HM Treasury's managing public money guidance.'
Ipsa's chair Richard Lloyd said earlier this year: 'Our decisions on MPs' pay and funding this year – and our plan for the rest of this parliament – underlines our commitment to providing adequate funding for democracy in the UK. We believe MPs and their staff should be remunerated appropriately for the work they do, and receive the right level of support and funding to enable them to carry out their parliamentary duties.'
