The basic annual salary of an MP in the House of Commons was increased to £74,000 as of 31 July 2015. Many MPs (ministers, the Speaker, senior opposition leaders, opposition chief whip, etc.) receive a supplementary salary for their specific responsibilities. As of 1 April 2015 these additional entitlements range from £15,025 for Select Committee Chairs to £74,990 for the Prime Minister. On 24 May 2015 David Cameron announced that he intended to freeze ministerial pay for the next five years. However, on 2 June 2015 the Daily Mail reported that ministerial pay was to increase at the same time as MP's basic pay was increased to £74,000. The Prime Minister's total salary would therefore increase from £142,500 to £149,440. The total salary for Cabinet Ministers would increase from £134,565 to £141,505. The total salary for ministers would increase from £89,740 to £96,375. And the total salary for parliamentary under secretaries would increase from £89,435 to £96,375. Full details of current ministerial pay at all levels have yet to be published on either the UK Parliament website or that of the Independent Parliamentary Standards Authority.
MPs also receive extensive allowances and expenses. These expenses and allowances are listed below, and have included the paying for, buying and furnishing of second homes.Office running costs
Centrally purchased stationery
Central IT costs
MPs are entitled to claim £9,000 a year for postage and stationery (financial year 2015-16). This amount is in addition to any stationery and postage costs which Members may have reimbursed under the Independent Parliamentary Standards Authority's expenses Scheme.
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
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. 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, but they are not significantly more generous than most public-sector pensions.
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).
On leaving the House of Commons, an MP will be entitled to what is essentially severance pay.
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 life outside parliament. 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.
In the UK the first £30,000 of severance pay is tax free. As stated above, 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. For 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.
For the 2010–15 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."
There is also up to £42,000 on offer to pay for winding up staff contracts and office rent. 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.
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.
Members of the House of Lords can opt to receive a £300 per day attendance allowance, plus travel expenses and subsidised restaurant facilities. Peers may also choose to receive a reduced attendance allowance of £150 per day instead.
Before the twentieth century, members of parliament were unpaid as it was assumed they would have another income. The first regular salary was £400 per year, introduced in 1911. Some subsequent salary levels were £1000 in 1946, £3250 in 1964, £11,750 in 1980, and £26,701 in 1990. The increases in MPs' basic salaries since 1996 have been:
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".
In 2010, the payment of MPs' salaries and allowances, and many staff, was moved from the Fees Office, which was effectively self-policing by MPs of their expenses, to a more autonomous body, the Independent Parliamentary Standards Authority. In 2010 the IPSA was also given the responsibility of setting MPs' salary levels. It is accountable to the Speaker's Committee for the IPSA, comprising the Speaker, the Leader of the House, the Chair of the Standards and Privileges Committee and 5 MPs selected by the Speaker, one of whom is the Shadow Leader of the House, and the National Audit Office, another independent Parliamentary body, has some audit authority.