Austerity is a Foreign Country as far as our MPs are Concerned

It will, perhaps, not come as a shock to the system to learn that our “Honourable Members” are amongst the most despised class of people in Britain today. No surprise then that there are a growing number of people who believe that these “taxeaters” should set an example in this age of austerity by either taking the average industrial wage or, at least, accepting a big cut in their salaries and expenses.

For the record, the current basic annual salary for an MP is a trifling £65,738 per annum, not quite in the same league as the banksters they aspire to, but substantial remuneration by anyone’s standards. In addition these alleged public servants are permitted to claim allowances to cover the costs of running an office and employing staff. Furthermore they are reimbursed for the expenses in maintaining both a constituency residence and a residence in London, together with other “perks”.

Never missing a trick when it comes to pocketing public money, an additional salary is paid for appointments or additional duties – such as the chairing of select committees.

As additional allowances payments vary according to claimant and duties, it is difficult to calculate the annual basic salary of an MP. However an MP with no additional responsibilities, who completes a full 5 year term, will “earn” an effective taxable salary of £77,738 – a figure that includes an “end of term” tax-free severance payment worth a little over £12,000.

The basic salary of an MP was increased to £65,738 as of 1 April 2010. However many MPs, such as the Speaker, senior opposition leaders, opposition chief whip etc, also receive a supplementary salary for their specific responsibilities. From the 1st April 2008 these increments range from £14,039 for Select Committee Chairs to £130,959 for the Prime Minister.

MPs also receive extensive indirect allowances and expenses which are paid to service providers (landlords, gas/electricity suppliers, insurance companies, etc.) normally in respect of second homes or properties rented by the claimant.

The abuse of payments in respect of second home furnishing and provisioning will, of course, be well know to the general public – a practice that the authorities assure us couldn’t happen today – as an “Honourable Member’s” word is, of course, his bond!

They also receive further allowances to cover the costs of travel, centrally purchased stationery, postage, communications and transport (cars, taxis, rail, air etc). With limited travel concessions granted to spouses and, in some cases, civil partners.

MPs pension arrangements have previously been a matter of controversy, not least insomuch as they have been exempt from taxation “pension grabs” unlike most other schemes. 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 have chosen. Members who made contributions of 10% 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 private companies for final-salary schemes, but are not, allegedly, more generous than most public sector pensions – an observation that many would challenge it is felt.

MP’s are also entitled to a Resettlement Grant should they fail to be re-elected at a General Election. The grant is, in effect, a severance pay package.

It is payable to any “Honourable Member” who ceases to be an MP at a General Election. Westminster MPs get the first £30,000 of severance pay 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. As an 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.

If an MP stands down during the course of a Parliament for reason of ill health reasons, an ill health retirement grant is payable. This is 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).

As far as remuneration is concerned being a “Honourable Member” can be very rewarding indeed.

However, as no few have already pointed out, in these days of acute austerity why do the likes of Messrs Cameron and Osborne, both wealthy men in their own right, need to make any call upon the public purse at all? This being particularly so considering their claim that their overriding ambition is that of serving the public? The same can be said of a great many other “Honourable Members” – men and women who claim to serve their communities but cost us, the taxpayer, a pretty penny for so doing. Yet, there are those who defend these creatures, people who maintain that we must pay the appropriate wage to get the “right sort of people”. Clearly they have succeeded, for the House of Commons contains some of the best people money can buy.

Surely, whether it be an age of austerity or not, Parliamentarians should lead by example and take only from the public purse what they require to properly fulfill their duties modestly – becoming a parliamentarian is, after all, a career choice – not a mandatory duty.