In 1996, the independent Senior Salaries Review Body (SSRB) recommended that parliamentary pay, allowances and pensions should be reviewed every three years starting in 2000. In line with this recommendation, my right honourable friend the Prime Minister has written to John Baker, the chairman of the review body, in the following terms:

Terms of the review

“I understand that the Senior Salaries Review Body is ready to undertake the triennial review of parliamentary pay and allowances.

You will be aware of recent statements by the Chancellor of the Exchequer and the Chief Secretary to the Treasury on public sector pay restraint and the underlying rate of inflation. I am sure that the review body will wish to take account of this important context in its deliberations.

I am writing to confirm that the Government would like to see the following areas covered in your report:

(a) the salaries of Members of the House of Commons taking into account the benefits of the parliamentary pension scheme;

(b) the salaries of Ministers and other office holders, including those with additional responsibilities in Parliament, and the operation of severance pay;

(c) aspects of the benefits and funding of the parliamentary contributory pension fund;

(d) an appropriate approach to the annual increase to parliamentary salaries between triennial reviews to replace the current automatic link to the senior civil service given the changing recruitment and retention strategy for senior staff;

(e) the rate of allowances for Members of the House of Commons, including eligibility for the additional costs allowance and the London supplement, and the operation of the resettlement grant in the light of forthcoming age discrimination legislation;

(f) the rate of peers’ expenses allowances; and

(g) the extension to unmarried partners of eligibility to spouses’ travel costs, and to cover travel to devolved assemblies for Scottish, Welsh and Northern Ireland MPs.

I should also be grateful for your recommendations on the adequacy of the current provision of IT equipment for Members both in the House of Commons and in their constituencies.

I look forward to receiving your recommendations next year”.

The review will also take into account the recent appointment of the Lord Speaker.

Consultation with Members of both Houses

Members of both Houses should already have received a letter from John Baker, inviting the submission of written evidence by 8 December 2006, either by e-mail to alan.dawson@dti.gsi.gov.uk, or by post to:

Alan Dawson

Senior Salaries Review Body

The Office of Manpower Economics

6th Floor

Kingsgate House

66-74 Victoria Street

London SW1E 6SW