The Government is announcing today a change in the arrangements for Ministerial pay for Ministers in the House of Lords, and associated Lords officeholders.
Salaries to which Ministers are entitled increase each April in line with legislation in the Ministerial and Other Salaries Act 1975. This increase is linked to the average increase in the three Senior Civil Service pay band mid-points.
Notwithstanding, in 2010 under the Coalition Government, Government Ministers’ pay was cut by 5 per cent in cash terms and frozen for the remainder of the parliamentary term. This ‘freeze’ has continued under the subsequent Conservative Government. In practice, all Ministers have been asked to waive the increases, which would otherwise have been applied in recognition of the wider pay restraints that have been in place in the public sector. We are grateful to all those who have honoured this approach in recent years. This represents a reduction in Lords Ministerial salaries by 16.4 per cent in real terms since 2010.
However, as a result, this has resulted in a disparity between the treatment of Lords Ministers and Commons Ministers. Commons Ministers have the MP element of their salary uprated each year by the Independent Parliamentary Standards Authority (IPSA) recommendation, which is set in line with ONS statistics for the yearly increase in average public sector earnings. By contrast, Lords Ministers are only entitled to a Lords Office Holder allowance (if based outside of Greater London) which is not subject to an annual increase and Lords Ministers based inside of Greater London, can only claim a significantly reduced allowance for their duties. By comparison, a Secretary of State in the Commons would receive an overall rise of 1.4 per cent this year to their total salary. There is also a disparity between paid Lords Ministers, and members of the Lords (including unpaid Ministers) who claim allowances.
On her appointment, the Prime Minister made clear that she wanted to retain the waivers for Ministerial pay. After careful consideration, however, she has decided to amend the arrangements for Lords Ministers, to bring it into broad parity with the approach taken in the Commons. From this year, they will no longer be asked to waive the increases which have been applied, but not claimed, since 2015 and instead will be entitled to claim their full entitled salaries. This amounts to an increase of 1.4 per cent this year, and just under 3.3 per cent, after including the entitled increases, since 2015. Again, this broadly reflects the changes in the Commons since 2015
Commons Ministers will continue to receive the same pay arrangements as before, and Ministerial salaries will continue to be kept under review. Updated transparency data for all Ministerial salaries will be published on gov.uk in due course.