The UK's Senior Salaries Review Body has recommended an above-inflation increase in politicians' pay, which members of parliament vote on this week. All three main party leaders have urged MPs to accept a lower increase in line with inflation.

But the Review Body's overall analysis and recommendations on parliamentary pay, pensions and allowances are fundamentally flawed. It grossly understates the real cost to taxpayers of MPs' pensions, a major part of their total remuneration. The Review Body estimates the cost of MPs' pensions at 22 per cent of salary, even though the FRS17 cost in the latest House of Commons accounts is 38 per cent and the real economic cost is even higher at about 48 per cent. How has the Review Body got this so wrong?