MPs are under pressure to shelve their pay rise for another year as their new £84,000 salary is scheduled for the same day thousands will face rocketing bills.
Politicians are in line for a £2,000 hike on April 1 despite Britons facing further squeezes from National Insurance costs, gas bills and council tax.
The Taxpayers’ Alliance criticised the potential increase, with its chief executive saying politicians should be paid in line with the ‘country’s economic performance’.
Rishi Sunak is currently facing a backlash from Tory MPs over plans to hike taxes, with backbench MP Jake Berry warning the Tories will lose Red Wall voters if they ignore the cost of living ‘tsunami’.
MPs – currently paid £81,932 – usually receive a yearly pay rise linked to average public sector pay increases, which would this year result in a 2.7 per cent increase.
However, last year’s pay rise for MPs was suspended due to the Covid pandemic and the Independent Parliamentary Standards Authority – the expenses regulator – last night said ‘a decision on MPs’ pay for 2022-23 will be taken early in 2022’.
On April 1, MPs’ annual pay is set to increase by £2,000 while families across the UK will be facing a 1.25 per cent increase in National Insurance, rising heating bills and more council tax
The Taxpayers’ Alliance told The Sun: ‘Now is not the time for MPs to get a pay rise.’
Its chief executive John O’Connell added: ‘Politicians’ pay should be linked to the country’s economic performance — to show we’re all in it together.’
It comes as damning new figures show UK household income was beginning to flatline before the pandemic and the current cost of living crisis struck.
Data from the ONS released today showed that the median wealth of British families has risen by 20 per cent since the pre-Financial Crisis period to £302,500.
But the figure only rose ‘marginally’ between 2018 and 2020, the latest period for which figures are available, which came as the UK was attempting to extricate itself painfully from the EU.
British families face a 2022 that could see them hit heavily in the pocket. Experts say that tax rises, soaring inflation and high gas prices could leave them hundreds of pounds out of pocket as soon as April.
The ONS data showed an enormous gulf in wealth between the young and old.
The age group with the media highest household income was in families where the head was aged 55 or over and still in work, at £553,400. The ONS noted: ‘The wealth of this group was 25 times higher than those aged 16 to 24 years.’
Median wealth in the South East was £503,400 having risen 43 per cent since 2006, after adjusting for inflation.
Tory MPs have this week been hitting the panic button over the prospect of the eye-watering £12billion NI increase taking effect in April, with the backlash sparking a tense standoff between Jacob Rees-Mogg, who is calling for the rise to be scrapped, and Rishi Sunak in Cabinet.
The Commons leader reportedly said the national insurance contributions (NICs) rise – to fund the NHS and social care – cannot be justified while families face soaring costs.
The Chancellor is defying calls to abandon the 1.25 percentage point bump, which is intended to fund the NHS catch-up after Covid and social care reforms.
Meanwhile, frantic discussions are continuing between government and the energy industry about how to ease the pain of surging gas costs for families. Households could see their bills go up another 50 per cent in the Spring, when the level of the cap is due to be adjusted in line with wholesale prices.
And new figures have suggested that another 1.2million people will be pulled into the 40p tax rate over the next four years, after the threshold was frozen as part of Mr Sunak’s desperate efforts to balance the books after the pandemic.
Tory infighting has intensified with Mr Berry accusing Mr Rees-Mogg of crying ‘crocodile tears’ about the NI increase.
Backbench Tory MP Jake Berry (pictured) has warned Rishi Sunak the Tories will lose Red Wall voters if they ignore the cost of living ‘tsunami’
Mr Berry, who is also chair of the Northern Research Group of backbenchers, told Times Radio ‘you didn’t have to be a genius to see this coming down the line’.
‘Jacob Rees Mogg, when this was proposed, had the ability then, to oppose like I did, this increase in national insurance,’ he said.
‘It’s all very well to turn around with crocodile tears now and say, look what my policies have created.
‘This shouldn’t have happened. In fact, the time to do something about it was when it was proposed. So if Jacob Rees Mogg wants to vote with his feet that’s up to him.
‘It’s a bit late in the day, and I do hope that the government may think again.’
Households are being hit by rising inflation and heating bills, and the energy price cap – which sets the maximum charge for 15million customers on standard variable tariffs – is set to be raised in April.
Tory MPs and business chiefs yesterday echoed Mr Rees-Mogg’s comments and urged the Chancellor to reverse the tax hike.
But Mr Sunak stood by the plan, saying: ‘It’s always easy to duck difficult decisions but I don’t think that’s the responsible thing to do.’
Boris Johnson (right) and Rishi Sunak (left) are scrambling to find a way of easing the cost of living crisis
Backbenchers warned the Chancellor the 1.25 per cent national insurance rise coming into force in April would worsen the pressures on family finances
In a round of interviews on Friday morning, business minister Paul Scully insisted the government is looking at ways to ease the pressure
Craig Mackinlay, of the Net Zero Scrutiny Group of Tory MPs, said it was ‘not too late’ for the Chancellor to change his mind.
He added: ‘With the cost-of-living crisis even more acute today on the back of a big increase in energy bills, to further the pressure on households with a national insurance rise will simply add to family and inflationary pressures.’
Tory MP Andrew Bridgen said the Chancellor would come under ‘increasing pressure’ to scrap the NICs rise. He suggested the Tories could suffer at the local election in May if the Government does not act.
Labour, meanwhile, accused the Conservatives of trapping the country in a ‘high tax, low growth cycle’.
Shadow Chief Secretary to the Treasury Pat McFadden said: ‘The Tories’ national insurance rise along with other tax hikes is leaving working people with the biggest tax burden in 70 years.
‘They are trapping us in a high tax, low growth cycle which we must break out of. Ministers could ease the burden right now by cutting VAT on home energy bills.’
Last month, Boris Johnson was urged to act on the energy crisis to avoid a ‘cost of living catastrophe’ as a think tank warned that next year will be the ‘year of the squeeze’, with households facing a hit of at least £1,200.
The Resolution Foundation said that the public would face a choke point in April when the energy price cap is raised to account for eyewatering wholesale gas price increases, and a 1.25 percentage point increase in National Insurance contributions (NICs) comes into effect.
At the same time, inflation is projected to reach 6 per cent in the spring, meaning wages next Christmas could be no higher in real terms than they are today, it forecast.
How the cost of living could increase in the next few months – even before any surge in inflation
The think tank’s new report found that real earnings were flat in the year to October in the UK amid surging inflation levels
The Resolution Foundation has projected, based on Office for Budget Responsibility and Bank of England data, that wages are likely to fall in real terms for most of next year
Both Labour and rightwing Tory free marketeers demanded a reversal of new tax increases and held with energy bills. Shadow work and pensions secretary Jonathan Ashworth has said pensioners are facing the prospect of ‘shivering in the cold’ or ‘going without hot meals’ because of mounting living costs.
The Foundation says says rising gas prices could add at least £600 to family budgets when the energy price cap is reviewed in spring.
On top of this, households face higher taxes from April when National Insurance goes up by 1.25 percentage points to fund the NHS and social care – a rise that will affect middle-income earners more.
Most town halls are also expected to put up council tax by almost 3 per cent in the same month.
The think-tank said the combined impact of these factors would leave the average household at least £1,200 worse off – but warned that even this may be an under-estimate because energy bills could rise by more than expected.
Some experts have warned that surging wholesale gas prices could add as much as £1,000 to household bills.
Some experts have warned that surging wholesale gas prices could add as much as £1,000 to household bills next year
The think thank has forecast a significant rise in energy costs next year, with the price cap due to be reviewed in April
Inflation, which stands at 5.1 per cent now, is expected to peak at 6 per cent in spring, which would be its highest since 1992, with pay packets stagnating as a result.
The report says real wage growth was flat in October, but almost certainly began falling last month, and is unlikely to start growing until the final quarter of 2022.
As a result, real wages are on course to be just 0.1 per cent higher at the end of 2022 than at the start. By the end of 2024, real wages are set to be £740 a year lower than if the UK’s already sluggish pre-pandemic pay growth had continued.
The think-tank said that in April the cap on energy bills is expected to rise by around £500 a year. Coupled with a further £100 to recoup the costs of energy firm failures, this could mean a typical energy bill rising by around £600 a year.
This increase will fall disproportionately on low-income families as they spend far more of their income on energy.
The share of income spent on energy bills among the poorest households is set to rise from 8.5 to 12 per cent – three times as high as the share spent by the richest households.
The report said there was significant variation in energy usage within income deciles – groups created by ranking Britons into ten bands according to earnings – meaning some households faced increases of far more than £600.