MSPs in line for £6.6K pay hike if Commons rise goes ahead

The pay link means MSPs' basic salaries would rise from £58,097 to £64,750.

The move at Westminster was heavily criticised by party leaders and senior politicians, including First Minister Alex Salmond who is a former MP.

He said: "Pay for MPs and MSPs should not rise beyond the limits of the restraints currently placed on public sector pay. It is ludicrous to suggest that parliamentarians should be given anything beyond these norms, at a time when public sector workers are having to make do with much, much lower pay increases."

Holyrood's corporate body, the SPCB, would have to consider how to deal with the knock-on impact of MP salary increases.

Options could include accepting the raise, altering the percentage link or scrapping the 2002 resolution entirely.

A Scottish Parliament spokeswoman said: "This Ipsa consultation exercise on Westminster MPs' pay will run until October. When Ipsa makes its final recommendations then it will be a matter for the SPCB to consider and consult with all political parties and make a recommendation to the Parliament."

Ipsa's package for MPs would be "offset" by new limits on pensions, so-called golden goodbyes and expenses.

The overall burden on taxpayers would go up by about £500,000 if the deal took effect after the 2015 general election.

English Education Secretary Michael Gove, Labour leader Ed Miliband and Deputy Prime Minister Nick Clegg quickly said they would refuse the extra money.

Tom Harris, Labour MP for Glasgow South, suggested politicians' pay increases should be capped at just 1%.

"If we abolish Ipsa, I will gladly vote to limit MPs' pay to a 1% rise. But will our party leaders offer us that option?" he wrote on Twitter.

The taxpayer would be hit with a £4.6 million bill for the increase which would take effect after the general election in 2015.

However, the Independent Parliamentary Standards Authority (Ipsa) also proposed to offset the costs with curbs to pensions, expenses for dinners, TV licences, taxis, and "golden goodbyes".

It insisted that the overall burden on the taxpayer will only go up by £500,000 when the package comes into force. The regulator is also urging politicians to publish an annual "MoT" explaining the work they have done for the money they receive.

Unions immediately demanded matching 11% increases for their members, while a number of MPs broke cover to condemn Ipsa for opening them to public vitriol.

The existing final salary pension scheme will be downgraded to career average - as happened across the rest of the public sector some years ago.

Benefits will accrue at 1/51 of salary per year, rather than 1/40. But they will have to contribute less - 9.2% of salary instead of 13.75% - and the retirement age will be the same as for the state pension.

Death in service benefits will also be reduced from four and a quarter times salary to twice salary, and widows will be entitled to less.

In total the pension changes will save £2.5 million in the first year, according to Ipsa.

The old pre-2010 "resettlement grants" of up to £65,000 for departing MPs, even if they stood down voluntarily, will not be brought back.

In 2015 there will be interim arrangements of up to £33,000 for those who lose an election, but by 2020 defeated politicians will only be entitled to two weeks' pay for every year of service if they are under 41, and three weeks if they are older - similar to redundancy terms in the rest of the public sector.

The £15 expenses available for dinner when the House sits beyond 7.30pm will be scrapped, and there will be tighter rules on using taxis and hotels.

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

The expenses tweaks will save £178,000 in 2015, Ipsa said.

The proposals will go out for consultation before Ipsa finalises the arrangements in the autumn. Party leaders have signalled alarm at the prospect of a pay rise above the 1% cap imposed on the public sector for 2015-16 - but it would require a change in the law to prevent the regulator pushing it through.

Ipsa chairman Sir Ian Kennedy said the proposals marked the "end of the era of MPs' remuneration being settled by MPs themselves".

"This package ends the historic peculiarities that have grown up around MPs' pay, and sets MPs' pensions on a sustainable footing for the future.

"The current pension scheme is unaffordable over the long term; the resettlement grants - which, until Ipsa came in, were worth up to £65,000 and available for all - have had their day. We are recommending a modern, professional approach which also means refining the rules on expenses and business costs to rule out MPs claiming for an evening meal.

"It is clear from our work talking to the public over the last 18 months that people do not know what their MPs do. Clearly, that is damaging for our Parliament and has to be addressed. And so we are proposing the introduction of an annual report by MPs.

"The aim is to have as transparent a system as possible. The public will know what MPs get for their costs and expenses, their salaries and pensions, and what they have done.

"I recognise some will just concentrate on the salary, rather than the package as a whole, and say it's too high; others that it's too low. There is no easy way forward on this. We have put together a package of reform which we think is fair and which ends the anomalies of the past.

"The recommendations Ipsa is proposing have a net cost of £500,000 a year."

The regulator said the total cost of remuneration and expenses for MPs was now £7 million less in real terms than in 2008-09 - although that was before the expenses scandal that rocked Parliament and sent claims plummeting.

"This means that our solution to the problem of MPs pay and expenses - the problem we were created to fix - is £7 million a year cheaper than the regime we inherited," Sir Ian said.

Tory backbencher Charles Walker said it was a mistake to hand responsibility for setting MPs' pay to Ipsa and he strongly criticised the way the issue had been handled by the party leaders.

"Here we are in another pickle with the pay of Members of Parliament being politicised again by the Prime Minister, the Leader of the Opposition and the Deputy Prime Minister," he told the BBC Radio 4 Today programme.

"If they don't want MPs to receive this pay rise, which clearly they don't, then the only answer is to scrap Ipsa but they would look pretty stupid arguing for that having argued that this was necessary to clean up politics."

He added: "I am fed-up of having my pay and conditions politicised for political gain by the leaders of the three main political parties. I suggest that when you become the leader of a political party or prime minister your pay is reduced to that of a backbench Member of Parliament."

Lib Dem MP Roger Williams said it was right that MPs' pay was set independently, but said the rise being recommended by Ipsa was too high.

"I think MPs are as shocked as the public about this proposal. I think that there is cross-party consensus that it is completely inappropriate to have a rise of this scale," he told the Today programme.

"It comes as a great disappointment to me that in making this recommendation, it may be based on some comparable figures and salaries, but it hasn't taken into account public opinion."