Overview

This bill amends the 2009 Parliamentary Standards Act to reform how Members of Parliament (MPs) are paid. It aims to reduce the overall cost of MPs' allowances and create a single, streamlined "Members' Allowance" system managed by the Independent Parliamentary Standards Authority (IPSA).

Description

The bill mandates IPSA to develop a new "Members' Allowance" scheme replacing existing salary and allowance payments. This scheme will involve a monthly payment to each MP, calculated using a multi-step process outlined in the bill's schedule. The calculation considers the previous year's total cost of MP payments, including salaries, expenses and administration costs, applying adjustments based on inflation (GDP growth, GDP deflator, retail prices index, consumer price index) and regional weighting.

The scheme incorporates several key features:

• Initial Calculation: A six-step process using indices and adjustments to determine the initial allowance.
• Annual Review: IPSA will review the allowance annually, considering various economic indicators.
• Regional Weighting: The allowance will be adjusted based on the distance of an MP's constituency from Westminster.
• Administration Costs: IPSA aims to keep administrative costs to a maximum of 2.5% of total payments.
• Separate Provisions: Staffing and constituency office rental expenses will continue to be paid separately.
• House of Commons Approval: The proposed scheme and any revisions require approval from the House of Commons.

Government Spending

The bill aims to reduce the overall cost of MPs' allowances. The exact financial impact is difficult to determine precisely without the final IPSA calculation, but the bill intends to lower spending compared to the current system. The specific amount of savings is dependent on the final Members' Allowance determined after the initial calculation and subsequent annual reviews.

Groups Affected

The bill primarily affects:

• MPs: Their salaries and allowances will be restructured and potentially reduced.
• IPSA: Increased responsibility for managing the new allowance scheme and its administration.
• House of Commons: They will have oversight of the scheme's approval process.
• Taxpayers: Potentially experience lower government spending on MPs' allowances, depending on the final cost of the new scheme.

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