MPs' Pay Rise 'Preposterous' Says Ed Balls

Shadow Chancellor Ed Balls has called a proposal to boost MPs pay by 11% "out of touch" and "ridiculous" given current economic squeeze.

MPs are to get the inflation-busting rise after the Independent Parliamentary Standards Authority (Ipsa) refused to scale back the increase.

The watchdog will unveil its final proposals next week - including boosting MPs' salaries by £7,600 to £74,000 from 2015.

Shadow chancellor Ed Balls told Sky News: "I think it's preposterous we should be having this discussion and as a shadow chancellor how could I possibly say to Labour MPs, at this time with the economy like this, when people are under real pressure, when there's a cost of living crisis, that they (MPs) should take a pay rise."

Ipsa is expected to try to quell criticism by announcing a tougher-than-expected squeeze on MPs' pensions in a bid to cancel out the £4.6m cost to the taxpayer.

All three main party leaders have condemned the increase at a time of national austerity, with Labour's Ed Miliband and Liberal Democrat Nick Clegg pledging to shun the extra cash.

David Cameron has stopped short of matching that pledge - and is under pressure from some Tory MPs to back the increase.

David Cameron is under pressure to back the pay rise

Mathew Sinclair, chief executive of the TaxPayers' Alliance campaign group, said: "Taxpayers will be furious that the pay rise comes at a time when MPs urge public pay restraint."

Following a consultation on the proposals - first set out in July - Ipsa is set to press ahead however.

And MPs have no way to prevent the rise coming into force after the next General Election - unless they change the law set up in the wake of the expenses scandal to stop them setting their own pay.

Research by Ipsa found two-thirds of MPs believe they are underpaid, and the watchdog's chairman Sir Ian Kennedy said politicians' pay must "catch up" after years of being suppressed.

A Downing Street spokesman said: "We believe that the cost of politics should be going down, not up."

Ed Miliband says he will refuse the extra cash

Commons deputy speaker Lindsay Hoyle - a Labour MP - cautioned against interfering in the system.

"I agree that MPs should not vote on their own pay," he told the Mail on Sunday. "It should be left to an independent body. It's not in the gift of the party leaders."

Ipsa's original report conceded there is no "compelling evidence" that MPs' current salary level is deterring candidates, making people leave Parliament, affecting the diversity of the House, or lowering the standard of ministers.

Among measures already on the table to offset the cost of the wage rise is an end to "resettlement grants" of up to £65,000 for departing MPs.

Under the plans, that would be reduced to two weeks' pay for every year of service if they are under 41, and three weeks if they are older by 2020.

A £15 dinner allowance would be scrapped, claims for tea and biscuits would not be allowed, and taxpayer-funded taxis home only allowed after 11pm.

There would also be a crackdown on claims for running second homes, with costs such as TV licences and contents insurance no longer being met.

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