The Independent Parliamentary Standards Authority (Ipsa) faces mass defiance from parliamentarians when it presses ahead with plans to increase their pay to £74,000, it has emerged.
Danny Alexander, the chief secretary to the Treasury, said the proposed increase was "utterly incomprehensible", while Philip Hammond, the defence secretary, said he would expect the cabinet to take a collective stand against the Ipsa ruling. Ed Balls, the shadow chancellor, said he could not see himself telling Labour MPs to accept the money.
They were speaking after it was revealed that Ipsa will reject calls for restraint when it publishes on Thursday its final plans to reform MPs' pay and pensions.
It will recommend that MPs should be paid £74,000 a year after the general election – representing an 11% increase on the £66,396 a year they get now, or a 9% increase on what their pay would otherwise be in 2015-16 allowing for normal pay rises.
Ipsa had proposed the rise in a consultation in June, when it also received near-universal condemnation from parliamentarians who argued that it was unacceptable to push through such an increase at a time when many other workers in the public sector were seeing their pay frozen in real terms.
In June, Ipsa also proposed that the pay increase should be matched by cuts to the value of MPs' pensions. According to one source familiar with the authority's thinking, these proposals have been hardened up since the summer, meaning that MPs' pensions will become even less generous.
As a result, Ipsa will be able to argue that its proposals would result in no net increase to the cost of MPs' pay and pensions. The June package would have increased their cost by £500,000 a year.
But Alexander told the BBC's Andrew Marr Show that increasing MPs' salaries in line with what was being proposed was unacceptable.
"Most people will find it utterly incomprehensible that at a time of pay restraint for the public sector, at a time of further squeezes on government spending, that Ipsa should be recommending [this increase]," said Alexander, who declared that he would refuse to accept the money.
"I think it would be wholly inappropriate for MPs to get such a large pay rise at a time when every other public sector worker sees their pay rises capped at 1%."
Hammond told Radio 5 Live: "So long as I'm the defence secretary presiding over a situation where the troops that serve our country so brilliantly are facing a 1% pay rise, I won't be taking a pay increase."
He said he expected all cabinet ministers to take the same approach.
"I suspect that the prime minister would want cabinet ministers to make a clear, collective statement about what they would do. I suspect there will be a strong mood in the cabinet that we all need to say the same thing."
Balls said he would expect Labour MPs to take the same approach. Ipsa had produced a report "entirely out of any context of the real world", he said.
"How could I possibly say to Labour MPs at this time, with the economy like this, with the economy under real pressure, there's a cost of living crisis, that they should take a pay rise?"
Ipsa was created after the MPs' expenses scandal because it was thought that it was best for MPs to lose the right to set the level of their own pay and expenses. MPs have no power to block the increase unless they pass legislation tearing up the whole Ipsa framework.
There would be nothing to stop MPs who receive the rise after 2015 handing it back to the Commons authorities, or instead donating it to charity, and it now appears that many MPs will go into the general election promising exactly that. Potentially this could also lead to fresh calls for legislation, making MPs' pay an election issue.
In June, all three main party leaders criticised the proposed increase. Ed Milband and Nick Clegg both said that they personally would refuse to accept an increase, although David Cameron was more guarded.
Downing Street said on Sunday that the government believed the cost of politics should be going down.
"The government has submitted its views to Ipsa as part of the body's consultation on MPs' pay. It made it clear that, while Ipsa is an independent body set up by parliament, in future decisions on remuneration it expects Ipsa to take into account the government's wider approach to public service pay and pensions," a spokeswoman said.
"We believe that the cost of politics should be going down, not up."
On Sunday, several MPs used Twitter to say that they, like Alexander, would refuse to accept the proposed rise. They included Andy Burnham, the shadow health secretary, Steve Webb, the Lib Dem pensions minister, Labour MPs John Mann and John Woodcock and the Conservative Andrew Stephenson.
But Sir Peter Bottomley, the Conservative MP, said his colleagues should accept Ipsa's ruling. "Each leader will say this is the wrong amount at the wrong time. The fact is, it was the leaders who set up the Ipsa system who are given the responsibility to set the level of pay and people can't interfere with it," he said.
"The only way MPs could overturn this is to defy their leaders and pass a law saying Ipsa is abolished or it will be ignored. That's impractical given the public interest in setting up Ipsa in the first place."
A source familiar with Ipsa's thinking said that if MPs were unhappy with the increase they only had themselves to blame. For years, when they were in charge of their own pay, they avoided large salary increases, because those were unpopular with the electorate, while allowing themselves to recoup the money they were losing through expenses that became ever more generous and hard to justify.
"MPs, and governments, had decade after decade after decade to deal with this, and they never did. They made a mess of it," said the source. "History tells us that they would do it again if they had the chance."
