IPSA Rejects Guido’s GDP-Linked MP Pay Campaign

IPSA has published the findings of their inquiry into how they should decide future MP pay rises; rejecting the Guido-endorsed Taxpayers’ Alliance proposals to link future MP pay rises with changes in GDP per capita. While there were many alternative reform suggestions from the public – such as linking pay boosts to changes in earnings across the whole economy or a fixed multiple of the level of average weekly earnings – the body specifically addressed the GDP proposals:

“had we followed one suggested approach of linking pay to GDP, the outcome for 2020 would have been a freeze or cut in MPs’ salaries, but the outcome for 2021 and 2022 on current forecasts would be a rise of 4.3% and then 5.8% when the same forecasts predict an increase in average earnings of 2.2% and 2.4%. It is not self-evident to us that this would be seen to represent a fair outcome”

Irritatingly, it looks like IPSA deliberately misinterpreted the campaign, which saw 1727 submissions via the TPA website. They claim respondents were pushing for GDP-linked pay rises, rather than GDP per capita rises, which would see significantly smaller changes to pay than claimed (2019’s figures for example saw a per capita rise of 0.8% versus GDP’s 1.4%). IPSA claims they had just under 4,000 responses to the consultation, so it looks like just under half the submissions called for a new system – which IPSA rejected out of hand… 

The TPA’s political director James Roberts tells Guido, “IPSA took the easy way out and ignored the thousands of taxpayers who told them to get a grip on the system.”:

Now politicians can look forward to another barney next year, when they’re inevitably recommended a pay rise that many of them won’t deserve; that most of them don’t even want; based on data that no one agrees with.

“Performance related pay could have changed the game, but IPSA bottled it.” 

The only pleasure Guido got from reading the report was seeing one MP had argued the proposed £3,000 pay rise this year was justified as “MPs had continued working throughout the pandemic”. The bar is on the floor…

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