MPs to get backdated 10 per cent pay hike to £74,000

The Independent Parliamentary Standards Authority (Ipsa) said the issue of politicians’ salaries could no longer be “ducked” and it is pushing ahead with the increase from £67,060 to £74,000.

However, the watchdog has climbed down on plans to link their pay to UK-wide average earnings in future – a move that could have left MPs £23,000 better off by 2020. Instead they will be restricted to average rises in the public sector.

The prime minister previously branded the substantial boost, backdated to 8 May and tied to cuts in pensions and expenses, as “unacceptable” at a time of austerity.

But last month Downing Street indicated that David Cameron will not seek to block the move – and he will personally accept the money. Politicians elected before 2015, including Mr Cameron, will also see a major boost to their pensions as they are based on final salary.

Read more: MPs' planned pay rise - how public sector pay compares

Bitter divisions

The proposals have caused bitter divisions among MPs, with some decrying the award and others arguing they have been underpaid for decades.

It has also split ministers, with Education Secretary Nicky Morgan breaking declaring she will give the money to charity and International Development Secretary Justine Greening warning that Ipsa is “not working in its current form”.

Labour leadership contenders Andy Burnham, Yvette Cooper and Liz Kendall have all declared they will forego the rise.

Foreign Secretary Philip Hammond is likely to be reminded of comments from 2013 when he indicated he would not accept a pay rise while the rest of the public sector was being restrained.

Michael Gove, now justice secretary, memorably declared around the same time that Ipsa could “stick” their pay rise.

Under pressure, the government formally expressed its opposition to an increase in a letter to the watchdog’s final consultation on the plans last month.