MPs’ pay set to increase by 10 per cent to £74,000

MPs are set to receive a £7,000 pay rise as the Government today stepped away from action to prevent the deeply controversial hike.

The pay increase would see MPs’ salary rise to £74,000, which is likely to spark fury as the Government axes £12 billion from welfare and squeezes funding for some public services.

The rise is being brought in by the Independent Parliamentary Standards Authority which was set up after the expenses scandal.

David Cameron strongly opposed the hike before the election, with some critics of IPSA suggesting that legislation should be passed to block the increase.

While Mr Cameron was still firmly against the rise, Downing Street signalled today that it was not set to opt for such a drastic intervention over the new laws, which means the rise will now almost certainly go ahead.

The Prime Minister’s official spokeswoman said: “Throughout this process and the debate the Prime Minister has been clear that he does not agree with the proposed increases. But ultimately it is up to IPSA as an independent body to decide MPs’ pay. The factual situation is that if IPSA decides to press ahead, that pay increase is automatically given to MPs.”

She stressed that the PM was focused on areas which he could control and had already announced a five-year freeze on ministerial pay.

Ipsa is carrying out a review into the salary rise, which will be backdated to May. It is expected to be completed in the summer and the watchdog today asked for any significant new evidence which could sway it away from pushing ahead with the hike.

No 10 made clear that it was not planning to submit fresh evidence having already made its position clear.

The increase is likely to be met with anger, coming at a time of continued austerity and pay restraint in the public sector.