MPs and benefit claimants receive substantial payment increases this week to offset the cost-of-living crisis. While Chancellor Rachel Reeves recently dismissed broad measures to address the energy challenges stemming from the war in Iran, lawmakers secure a 5% pay rise that includes a £3,300 cost-of-living adjustment. This applies to both ministers and backbenchers, benefiting senior leaders such as Prime Minister Sir Keir Starmer and the Chancellor herself.
MPs’ Pay Rise Exceeds Inflation and Public Sector Norms
The Independent Parliamentary Standards Authority approved the rise to £98,599, citing increased job complexity and intimidation faced by politicians. Unelected House of Lords members also gain, with their tax-free daily attendance allowance reaching £390. This 5% increase surpasses the current 3% inflation rate and exceeds the 3.3% offered to nurses. Projections indicate MPs’ salaries could hit £110,000 by 2029.
Recent data highlights a widening pay gap: public sector average pay grew 5.9% in the three months to January, compared to 3.3% in the private sector.
Benefits Increase Doubles Inflation Rate
Millions of benefit claimants see payments rise by 6.2%, nearly double inflation. The main Universal Credit rate affects 6.5 million recipients, funded partly by reductions in the health element at a cost of £1.9 billion. State pensions also increase by 4.8% next week under the triple lock mechanism.
Two-Child Benefit Cap Abolished
Labour scraps the two-child benefit cap next week, costing £3.5 billion annually. The policy previously limited means-tested benefits like Universal Credit and child tax credit to the first two children, reducing payments by about £3,455 per additional child for affected families. Official analysis shows the change will deliver thousands of pounds yearly to nearly 200,000 large families, including those where no one works, with the largest potentially gaining over £10,000 extra annually.
Critics Warn of Growing Divide
William Yarwood of the TaxPayers’ Alliance cautions that the UK risks a ‘two-tier society’ where workers bear an unsustainable load. ‘Taxpayers are exhausted from having to repeatedly broaden their shoulders as ministers demand ever more from fewer and fewer people,’ he stated. Yarwood advocates freezing benefits and tying MPs’ pay to GDP per capita.
Restore Britain MP Rupert Lowe, who donates his salary to charities, notes his Great Yarmouth constituents as the ‘only taxpayers’ benefiting from the MP hike. ‘I wouldn’t mind paying MPs more if they delivered the goods – sadly, we all know that is not the case,’ he said. ‘Cut tax, cut the size of the state, cut waste. Brutally.’
Government Defends Measures
Education Secretary Bridget Phillipson describes the cap’s end as relief from an ‘awful’ policy amid cost-of-living pressures. Speaking on Sky News, she highlighted additional supports including energy bill aid, expanded breakfast clubs, childcare, and a minimum wage increase to back families.
