House of Commons Hansard Debates for 25 Jun 1990

Police

10.1 pm

Mr. Roy Hattersley (Birmingham, Sparkbrook) : I beg to move, That the Police (Amendment) Regulations 1990 (S.I., 1990, No. 401), dated 1st March 1990, a copy of which was laid before this House on 9th March, be revoked.

Madam Deputy Speaker (Miss Betty Boothroyd) : With this it will be convenient to discuss the next two motions on the Order Paper : That the Police (Scotland) (Amendment) Regulations 1990 (S.I., 1990, No. 469), dated 4th March 1990, a copy of which was laid before this House on 9th March, be revoked.

That the Royal Ulster Constabulary (Amendment No. 2) Regulations 1990 (S.R.(N.I.), 1990, No. 82), dated 26th February 1990, a copy of which was laid before this House on 7th March, be revoked.

Mr. Hattersley : With the agreement of the House, I intend to concentrate almost all of my remarks specifically on our prayer concerning the Police (Amendment) Regulations 1990, as the new regulations affect England and Wales. Others of my right hon. and hon. Friends will, if they catch your eye, Madam Deputy Speaker, refer to the two other sets of regulations covering police arrangements for Scotland and Northern Ireland. In any event, the principle that we are discussing tonight is the same in each of the sets of regulations, and hon. Members who share my view on the way that the principle of this affair has been dealt with will share my view about the unacceptability of each of the three sets of regulations and will wish to vote against them.

I shall deal principally with the position affecting England and Wales, and I shall begin by briefly setting out the background to the sorry story on which the House must pass judgment this afternoon. The story begins with a claim by the Police Federation--I should more properly say, the employee side of the joint negotiating machinery--for an increase in housing allowance. An increase was, in its view, made necessary by the replacement of rates by poll tax, which for most policemen, as is the case with most other members of society, resulted in a substantially higher payment. It is no secret that the Government then advised the employers' side of the joint negotiating machinery--that is, the police committees of England and Wales, meeting together from time to time in London--on how they should respond to the federation's claim.

The Government said that the poll tax was a personal and individual tax and, unlike the rates that it replaced, was not appropriate for reimbursement by employers to employees. The employers--I repeat, basically local authorities, themselves basically short of income--accepted the argument and made a counter-proposal. That was to replace rent allowance with a new housing allowance which would be simply based on a rent calculation containing no element which would compensate what had previously been reimbursement of rates charges. The reimbursement of rates charges was previously part of the rent arrangement and, until then, had been an integral part of the rent allowance.

The employers' proposal would have left most--perhaps all--police officers substantially worse off. Not surprisingly, it was rejected by the Police Federation, which put the claim to arbitration. As is the case with most arbitrations, it was a compromise between two positions. However, it is important to understand that the arbitrators

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accepted what for the sake of this evening's argument, I shall call "the underlying principle of the poll tax"--that it was regarded as a personal tax, not appropriate for reimbursement. I hope that we shall hear nothing more this evening about the police wishing, and demanding that they particularly, individually, and uniquely should have their poll tax reimbursed when nurses and others do not enjoy that privilege.

The arbitration award said specifically that it was the police officer's individual responsibility to pay what the Government insisted was an individual tax. In consequence, the arbitration award fell far short of the Police Federation's initial claim. However, it was based on the equitable principle that the arbitrators set out in paragraph 49 of the award, which stated :

"Except for our treatment of the Community Charge"--

as some people call the poll tax--

"we emphasise that nothing that we have proposed is intended to leave the police officers, as viewed generally, either better or worse off than before".

Many police officers would regard the phrase

"except for the incidence of the poll tax"

as a large exception, but

"except for the incidence of the poll tax",

the arbitrators wished to leave police officers no worse off and no better off than before. To most reasonable people, I am sure that that would sound a reasonable answer.

On that basis, the employers--the local authorities--accepted the arbitration award. The employees--the Police Federation--also accepted the award, despite their strong reservations ; they believed that, having asked for arbitration, it was their duty to accept what the arbitrators put to them. I have yet to meet a policeman who regards the award as reasonable, let alone generous, but the employees took the view that, having put the matter to arbitration, they had an obligation in honour to accept what the arbitrators proposed. However, that was not the Government's view. The Government vetoed the arbitration, despite their professed support for the Edmund-Davies pay formula. As we all know, because this has been repeated in the House almost every year since the Edmund-Davies committee reported 12 years ago, Edmund-Davies explicitly stated that arbitration awards should be overturned only when such arbitrary action was justified on the grounds of the "utmost" or "grave" national emergency. Perhaps the Home Secretary will describe the "utmost" national emergency and the "grave" national emergency that justifies him overturning the arbitration award for the first time, or perhaps he will simply admit that he no longer honours and respects the Edmund-Davies proposal.

Mr. James Couchman (Gillingham) : Is the right hon. Gentleman saying that, in the unlikely event of a Labour Government being returned, he, as a potential future Home Secretary, will promise now to honour the Edmund- Davies formula?

Mr. Hattersley : I fully accept that, without qualification. Indeed, I have seen the rather silly letter that the Home Secretary sent to Conservative Back Benchers which deals with exactly that point. I propose to come to that in a moment, but so that the hon. Gentleman should not be over-anxious in quoting the Home Secretary's misquotation of me, let me assure him that we would honour the Edmund-Davies formula. Indeed, we set up the Edmund-Davies committee. The Edmund-Davies pay formula is the result of a Labour initiative. I say a third

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time and I shall say again towards the end of my brief speech that we would certainly honour the Edmund-Davies proposals.

Will the Home Secretary tell us whether he regards the national emergency as so grave that it justifies vetoing the proposal, or is he simply saying that he no longer respects at least that part of the proposal? The veto of the award puts in their proper place all the Conservative platitudes about supporting the police. This is not a policy for cutting crime. Everything that was said about supporting the police was cheap party propaganda, to be abandoned and forgotten when it was convenient. I hope that, as a result of this, at least in future we shall be spared the pretence that the police forces are the property of the Conservative party. That myth was shattered when the Home Secretary visited Scarborough last month.

Mr. Ivan Lawrence (Burton) : What will the right hon. Gentleman do?

Mr. Hattersley : I shall deal with that. One of the flattering things about the hon. and learned Member for Burton (Mr. Lawrence)--I use the word "learned" in inverted commas, as one properly should--is that he always intervenes on the assumption that I am soon to be Home Secretary. It is a wholly proper assumption for him to make, and I propose to respond in exactly those terms.

The scheme which the present Home Secretary proposed in place of arbitration has been twice amended since it was originally announced, and it now has four basic elements. Officers presently receiving rent allowance will receive it, but will have it frozen at present levels. New recruits will receive a new housing allowance based on the old rent allowance, but excluding the rate element ; thus, it will be considerably smaller than it would have been. The smaller allowance for new recruits will be updated annually on the basis of the retail prices index. When the new recruits' allowance catches up with the level paid to officers already receiving allowance this year, those officers will begin to receive an additional increase calculated on the RPI.

What that means in hard terms can easily be described : it is a substantial immediate loss of earnings for this year's recruits. They will earn substantially less than they would have earned had the Home Secretary not vetoed their award. In Norfolk, they will lose £1,674 a year, in Greater Manchester £1,245, in Surrey £1,109 and in Warwickshire £811 a year.

Officers serving this year whose housing and rent allowance is to be frozen will certainly receive no less money next year than now, but their rent allowance may well be frozen for 10 years or more, until the reduced allowance now being paid to new recruits catches up with what they are presently receiving. Serving officers are to face a decline in the real level of their rent allowance, because the money level is to be frozen for 10 years or more.

That is our first reason for praying against the regulations tonight. The principle that arbitration should be upheld is dear to this side of the House, but related to the principle is the practice. All reasonable people will take exception to the proposition that an employer can arbitrarily tell his employees that over the next 10 years they are, in effect, to receive a reduction in the pay which they legitimately expected and which was granted to them according to their terms and conditions of service.

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Mrs. Edwina Currie (Derbyshire, South) : Will the right hon. Gentleman explain to me how I can justify to my Derbyshire constituents that police officers receive £4,800 in rent allowance tax-free, which is over £90 a week, when many of my constituents do not even get that in total salary before tax?

Mr. Hattersley : The hon. Lady may not find the argument particularly attractive, but the way to justify it is to say that she believes in keeping her promises. This is an arrangement between the Government and the police, and until the Government want to negotiate another arrangement, it is dishonourable for them arbitrarily to abandon the existing one. The hon. Lady will find that her constituents are greatly more attracted to the idea of the Government keeping their promises than she believes, and she will find my case proven at the next general election.

Our second objection is that, as a result of the Home Secretary's action, many thousands of police officers will receive less than it was reasonable for them to expect and which was specified for them under the Edmund-Davies formula. When the Home Secretary speaks, he will doubtless say again that no serving officer will be worse off next year, and that is true. But the year after next, and for year after year subsequently, while the new recruits' rent allowance catches up with the level enjoyed by serving officers, those officers' real level of rent allowance will be cut.

Our third objection is the effect that it must have and will have on police morale, to a disastrous extent. There was never a time when a boost to the morale of the police force was more necessary than now. Policemen say openly and frankly that their morale has been damaged by the Government's privatisation of police services--by the use of private security services in areas that the police believe are proper only for them to deal with.

Police morale has been damaged also by a shortage of manpower, the facts of which are constantly obscured. Figures announced in one White Paper are repeated the following year as if they were new. No allowance is ever made for the reduction in police hours that comes from a reduction in overtime-- although that reduction is often made to finance extra recruits. Most important of all, the number of new recruits is never compared with the extra duties now imposed on policemen.

Police officers are now required to perform tasks on the beat and in the station which would have been unthinkable before the Police and Criminal Evidence Act 1984. In the judgment of chief officers and members of the Police Federation, the police are more overstretched today than in 1980. Add to that the fact that, according to all informed predictions, we are about to see an unprecedented rise in crime rates to record levels, and this is clearly a lunatic time to assault police morale, yet that is exactly what the Government are doing. The intriguing question is why they are doing it.

Mr. Tony Marlow (Northampton, North) : Given the history of many Labour local authorities, from which the right hon. Gentleman might quite properly wish to dissociate himself, of doing all they can to undermine their local police services, is he saying that he is setting forth among his other commitments one to increase the size of the police force? If so, by how much does he wish to increase its size, and what will it cost?

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Mr. Hattersley : Of course I am setting forth that commitment. There are vast amounts of money to be saved in the Home Secretary's budget in the area in which it is most profligately spent, in sending to prison men and women who should not be sent there and who could be punished outside prison in ways better for the community and much cheaper for the Exchequer.

The Secretary of State for the Home Department (Mr. David Waddington) rose --

Mr. Hattersley : The Home Secretary is about to intervene--I shall gladly give way--to say that he published a White Paper on punishment by sentencing in the community. When he does that, I shall welcome a sinner come late to repentance, because he is adopting a policy which the Opposition have been advocating for 10 years.

Mr. Waddington : The right hon. Gentleman does not lack cheek. He waits until we publish a White Paper which advises more punishment in the community, and he then gets to his feet and pretends that it is Labour policy, when, throughout the whole time that it was in office, Labour carried out entirely contrary policies. I have never heard such nonsense in all my life.

Mr. Hattersley : With respect, the Home Secretary is a little confused about the facts. As the police know, if he does not, we published a document on that issue three months before he did and--what is more important--we have been advocating that policy for 10 years longer than he has.

Before I deal with my next point, I wish to answer the matter raised by the hon. Member for Northampton, North (Mr. Marlow) about Labour local authorities. There was a time when we were accused of failing to support neighbourhood watch schemes. At present, Labour local authorities are virtually unanimous in their support of neighbourhood watch. I notice the chairman of Crime Concern nodding in his place on the Tory Back Benches. No doubt he will nod again, as he is nodding now, when I say that the problem with neighbourhood watch now--as he has identified--is that the Government are not providing enough money to enable it to be extended and improved. I want to return to the subject of police morale, because all informed predictions suggest that we are about to see an unprecedented rise in the crime rate. It is impossible to imagine a worse moment to strike such a severe blow at poice morale. Once again, I ask why the Government choose to do so at this time.

A reason of sorts was given by the Home Secretary in a letter which he sent to Tory Back Benchers--I am not sure whether he sent it to all Back Benchers or to hand-picked Back Benchers--on 19 June.

Mr. Marlow : He did not send one to me.

Mr. Hattersley : Well, no one would choose the hon. Member. The letter included the following sentence, saying that the Home Secretary

"could not accept a recommendation which would have meant rent allowances continuing to rise at a rate which bore no relationship whatsoever to the actual cost of running a home."

What the Home Secretary did not tell his colleagues, and what the letter did not say, was that the independent

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arbitrators, picked in part by the Home Secretary for their independence and wisdom, had made an exact and specific judgment on whether housing and rents allowance was rising at an unacceptable speed. They said :

"We were given no compelling evidence that the level of rent allowance is out of control. The level is fixed by established criteria and, whilst it is not suggested that these should not, from time to time, be reviewed, those currently in use appear to confirm the logic of previous accepted criteria."

No evidence that the rise was running out of control was given, which is the excuse provided by the Home Secretary, in the hope that a few more supine Back Benchers would go into his Lobby this evening. The Home Secretary knew, as he has always known, how weak his case for vetoing the award is. Indeed, I give him credit, as a blunt, practical man, that, had he been in charge when the award was veteod, it would have gone ahead. The poisoned chalice has been passed to him and, if I may scandalously mix my metaphors, he must defend it as best he can. That is why he made two extraordinary sets of wholly cosmetic adjustments to the original awards.

I shall take one example from each group. The first adjustments were made on 15 March--the day of the police national rally in Preston. It belatedly agreed to the re-evaluation of those rent allowances--about half the total- -which were due for bi-annual review this year, but for which no review was to be allowed. As the meeting was taking place in Preston, the Home Secretary belatedly agreed to a re-evaluation being carried out, but only on the basis of the retail prices index, and not, as is usually the case, on housing costs. Thus, he left many thousands of police officers disadvantaged as compared with other officers.

Last week he made a series of adjustments, which were even more bizarre and wholly cosmetic. One was the announcement that, if one officer was married to another officer and one of them took unpaid maternity leave, the officer who remained at work would no longer receive only half rent allowance but would receive the whole rent allowance. Of course, the officer who remained at work would have qualified for the whole allowance anyway, since the other officer was no longer being paid by the police service, and did not qualify for any rent allowance. The Home Secretary should be driven into-- [Interruption.]

Mr. Waddington : Opposition Members may think that these are funny matters, but all three of them arrived on my desk as a result of representations made by the Police Federation. Surely I am entitled to some credit for listening to their concerns and for trying to do something about them.

Mr. Hattersley : I make no secret of the fact that my party consults the Police Federation. The proposal was described to me at 3 o'clock this afternoon by the Police Federation as absurd. If, however, the Home Secretary wants to apply his fine and clear mind to the logic of promising to pay somebody something to which they are already entitled, we shall be delighted to hear his explanation. No one who considers these matters can doubt that these cosmetic changes reflect the absurdity of the position in which the Home Secretary finds himself. Therefore, I want to suggest to him how he could get himself out of the mess--a mess so obvious, even to him, that the Government have run away from debating the subject for

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the last four months. The prayer should have been debated soon after the regulations were laid. It is a scandal--a legitimate scandal, in terms of the House of Commons' rules, but a scandal nevertheless--that we are debating the regulations months after they came into operation.

I have no doubt that the Home Secretary thinks that, by playing for time, he has sapped the resolve of some of his Back Benchers who at one time intended to vote against him this evening. As the night wears on, we shall see the sort of metal they are made of. The fact that the Home Secretary has--I repeat--run away from the debate for four months suggests that he at least is beginning to understand the problems that he faces. I hope that he has the grace to welcome some advice about how to get out of them.

First, the right hon. and learned Gentleman should honour the arbitration. That is the basic principle of good industrial relations--certainly for a Government who prefer compromise to consultation and for a Government who understand the special position of the police force, which is unable, quite rightly, to take sterner action in its own interests. Secondly, when the Home Secretary has honoured the arbitration, he should think about the long term. If he agrees, as I do, specifically and explicitly with the arbitrators who say that police pay contains too many anomalies and inconsistencies, he should set out to negotiate--I emphasise, negotiate--a new deal with the Police Federation.

In his letter to Tory Back Benchers, the Home Secretary was kind enough to quote part of my speech to the Police Federation conference. Working from the written text, he correctly quoted the following words :

"The time has come for a general re-examination of the structure of wages within your service."

Then there was a line of dots in the Home Secretary's text. He then quoted me as saying :

"If the structure of police pay is to be changed, it must be changed by negotiation."

That is my view and opinion. However, the Home Secretary then thought it right to put his own gloss on my view and opinion. He said :

"Labour have not bound themselves to honour the Edmund-Davies formula."

Some of the Home Secretary's Back Benchers fell for that sentence. Even on the evidence that the Home Secretary quoted, that is a strange proposition. Since the Labour party is committed to a negotiated settlement, the proposition assumes that the Police Federation would be prepared to negotiate away Edmund-Davies, which is unlikely. Moreover, there was an addition to my speech that the Home Secretary will be pleased to hear when I send him the tape recording of what I said. It was added because I was advised on the morning that I made the speech that

"Some malicious idiot might try to interpret your offer as something different from Edmund-Davies."

I do not know to whom that referred, but I thought it right to insert the words

"Of course, until the negotiations are completed, Edmund-Davies will be honoured."

The truth of the matter is that Edmund-Davies is not being honoured now by the Government. Edmund-Davies is inherently a proposition on wages and conditions, and conditions relate to housing and rent allowance. The arbitrators said in their award that, if the Government interfered with the proposition on housing and rent

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allowance, they would be disturbing the pattern of the Edmund-Davies formula. The Government have certainly done that. I repeat to the Home Secretary that it is bad not only for the individual police officers who will lose over the years but for the country because of the effect that it will have on police morale. Police morale will suffer not only because the officers will lose money but because the arbitrary, unthinking way in which it was done will convince them that the Government are prepared to sacrifice their interests for a comparatively small amount of money. Many hon. Members will stand up for their interests tonight. Some of them will be Conservative Members and the police will be comforted by that, but I believe that they will be more comforted to know that, sooner or later, they will get the pay award that they deserve. 10.30 pm

The Secretary of State for the Home Department (Mr. David Waddington) : The right hon. Member for Birmingham, Sparbrook (Mr. Hattersley) has constructed his case on an entirely false basis, as will become clear to him after the first few minutes of my speech. First, I remind the House that we are debating three separate sets of amending regulations relating to England and Wales, Scotland and Northern Ireland respectively. The arrangements for payment of rent or housing allowance have long been due for an overhaul. Rent allowance was intended to place officers who live in their own homes on a broadly equal footing with those who live in a police house or quarters, but there has long ceased to be a credible relationship between the two.

Much has been made by the right hon. Gentleman of the decision to set aside certain conclusions of the police arbitration tribunal. There were, however, very strong grounds for doing that, as I shall explain-- [Interruption.] If the right hon. Gentleman and other Opposition Members will listen, they will learn something which they obviously do not yet know.

In any case I must make it clear that the tribunal is there to enable the two sides of the police negotiating board to arrive at recommendations when negotiations break down. These recommendations are then put to me and my right hon. and learned Friend the Secretary of State for Scotland and my right hon. Friend the Secretary of State for Northern Ireland. But tribunal recommendations are not binding on the Secretaries of State, as is absolutely clear from the Police Negotiating Act 1980. If the right hon. Gentleman would do me the courtesy in future of reading the legislation before he makes his speech, he would know that is the case.

Mr. Hattersley : I am not suggesting for a moment that the Home Secretary behaved illegally. Had he behaved illegally, we should have pursued him in a different fashion. I am suggesting that he behaved wrongly. That is the case that he has to answer rather than some spurious suggestion as to whether he behaved within the law. We took that for granted.

Mr. Waddington : That is the usual waffle we hear from the right hon. Gentleman. The Police Negotiating Act 1980 went through the House long after Edmund-Davies. If he looks carefully at the Police Negotiating Act, he will see that the function of the police arbitration tribunal is to

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try to reconcile the two sides on the police negotiating board, but when eventually a recommendation is made to me, it is for the Secretaries of State to decide whether to accept those

recommendations. That has been so since Edmund-Davies reported, as the right hon. Gentleman must know full well. It is therefore complete balderdash to speak of a breach of an agreement with the police, because no agreement is involved. The award that was made by Edmund-Davies was finally implemented by the Government, and the 1980 Act reaffirmed that eventually it is for the Secretaries of State to decide whether to accept an arbitration decision.

Mr. Tam Dalyell (Linlithgow) : If the Home Secretary is right that it is complete balderdash, will he explain why level-headed members of the police force in Scotland are so angry about what has happened? Why should they be so angry if it is complete balderdash?

Mr. Waddington : I am addressing my remarks to the suggestion by the right hon. Member for Sparkbrook that an arbitration decision by the police arbitration tribunal is binding on the Government.

Mr. Hattersley : In honour, if not in law.

Mr. Waddington : In honour, if not in law ; that is what the right hon. Gentleman says. I do not suggest for a moment that if a person who is receiving a large allowance is told that it will not be increased year after year he will not be unhappy ; of course he will.

Mrs. Margaret Ewing (Moray) : Does the Home Secretary accept that we are talking not merely about new recruits but about existing members of the force being severely affected by the regulations? Does he also agree that because police forces do not resort to industrial action they have always relied on the arbitration service to reach an appropriate deal? Does he feel no moral responsibility to members of the police forces?

Mr. Waddington : If the hon. Lady will let me get on with my speech, she will find that we have made special provisions for existing officers. The original provisions made for them were made more generous as a result of representations by my hon. Friend the Member for Uxbridge (Mr. Shersby) and the Police Federation. We must make our own decisions on these matters, on the merits of the recommendations, regardless of whether they are made after recourse to arbitration.

Every four or five years, police pay and allowances are reviewed by the police negotiating board, and they were so reviewed in 1988. After a reference to the tribunal by the official side and an award subject to further negotiations in the board on a variety of detailed matters, things moved slowly and further recourse to the tribunal seemed likely.

Meanwhile, the then Secretaries of State were worried that any outcome based on the tribunal's award was likely to give rise to problems, and it seemed wrong that the two sides of the police negotiating board should continue to talk without being made aware of those difficulties. Therefore, my right hon. Friend the Member for Witney (Mr. Hurd), who was then Home Secretary, wrote to the independent chairman of the police negotiating board on 23 October last year, pointing out, among other things, the difficulty of a formula that involved reimbursement of

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rates, when they no longer existed, and giving notice to the board that the Secretaries of State could not commit themselves to meeting the recommendations of the board solely because they were supported by an award of the police arbitration tribunal.

Last autumn, my predecessor made it abundantly plain that it would be very difficult to achieve a formula which resulted in rent allowance being paid on the basis that rates, which were no longer payable, should be included in the total which was then divided into rent allowance.

Mr. Barry Sheerman (Huddersfield) : That has nothing to do with it.

Mr. Waddington : The hon. Gentleman should know--I am sure that he does--that that was the reasoning of the police negotiating board. Despite the letter, the negotiations proceeded on their original basis. Disagreements about the remaining issues were resolved by a further application to the tribunal in November, and as a result of this second major award by the tribunal a police negotiating board agreement was finally delivered to the Secretaries of State on 20 December. On 4 January, the board was informed that the agreement was unacceptable to me and was asked to comment on draft regulations incorporating what we believed to be the right approach.

On 17 January, I met the chairman and secretary of the staff side together with my hon. Friend the Member for Uxbridge and, as a result of representations made, I agreed to make major changes. But there were certain key recommendations of the board which I could not possibly accept. For example, the old allowance was based on the supposed open market rent of a typical police house plus rates, and I could not possibly agree that into the pool out of which the new allowance was to be paid should go an amount to cover rates when they no longer existed ; nor could I accept the recommendation that police officers in police houses should receive the new allowance and pay rent.

The payment of rent would have meant giving the occupants the right to buy, and police houses are badly needed-- [Laughter.] I do not see what is particularly funny about that. It would not have been wise of a Secretary of State to accept a recommendation by the police negotiating board which would have resulted in people in police houses paying rent having the right to buy and therefore the stock of police houses gradually diminishing. [Laughter.]

I assume from the hilarity that the right hon. Member for Sparkbrook agrees that that would have been absurd. If so, where does his argument that one must accept all the decisions of the arbitration tribunal stand? It is as plain as a pikestaff that the right hon. Gentleman recognises that that is one recommendation of the arbitration tribunal that could not possibly have been accepted by any responsible Secretary of State.

Moreover, serious difficulties could have been caused to individual officers in the not unlikely event in some areas that the rent they were charged would exceed the new allowance. Some officers would almost certainly have lost heavily.

The new allowance, still based on what is assessed to be the open market rent of a typical police house now in a particular force area, will have to be revalued from time to time, and the board proposed that it should be increased

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every two years by a combination of two indices. The first was the index of regional house price movements compiled by the Building Societies Association. The second was the housing element of the retail prices index. The logic of basing an index on house prices, which represent a potential capital gain to the house owner, is, to say the least, highly questionable. Such an index would almost certainly lead to steep increases over time and a return to the craziness of the old system from which most people would say we had to escape. It led to completely bizarre increases, which the right hon. Member for Sparkbrook has not faced up to, such as the 57.5 per cent. increase for the Metropolitan police in 1989 and 67.2 per cent. for Warwickshire in 1989--in other words, the increases did not bear the slightest relationship to the true increase in the housing costs of the officers concerned and their absurdity could not possibly be justified on the basis that they were necessary to maintain recruitment.

Ms. Dawn Primarolo (Bristol, South) : Who authorised the increase for the Metropolitan police of 57.5 per cent?

Mr. Waddington : The amount awarded to the Metropolitan police was the amount calculated on the regulations approved by the House. The new allowance will therefore be increased every two years in line with movements in the general index of retail prices, an index which, of course, includes mortgage repayment costs.

There is then an odd thing called the compensatory grant--the repayment by the police authority of tax paid on rent allowance--which is a considerable benefit in itself. Here the tribunal came up with a very strange suggestion. It wanted everyone to lose compensatory grant from now, those in service before 1 April and new recruits alike, but recommended that the money saved as a result should be used to make part of the new rent allowance pensionable. It seemed to us that it would be difficult to devise any fair or logical scheme on those lines, and in any event police pension arrangements are already generous and it is difficult to see any justification for further improvement in them.

Therefore we decided that serving officers should keep the compensatory grant as part of crucial transitional provisions to protect them. In short, those officers receiving rent allowance on 31 March will continue to receive the same level of allowance, including the rates element, despite no rates being payable by them. They will continue to be paid compensatory grant until the new housing allowance, which as I have said is based on the rent of a typical police house in the force area uprated by the RPI, reaches the same level.

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