House of Commons Hansard Debates for 3 Nov 1993

Mr. Eric Illsley (Barnsley, Central) : On a point of order, Madam Speaker. During the previous Division, three Clerks were in the Aye Lobby, two recording the vote and one whose presence in the Lobby was not explained. I have raised the matter with the Clerk at the Table and the Clerk of the House, but I have been given no explanation of why the third Clerk should have been present in the Aye Lobby during a Division. The presence of a third Clerk, or anyone who should not have been in that Lobby, giving advice or whatever, tends to negate the value of that Division.

Madam Speaker : Of course the Division is not negated. I will make inquiries to find out precisely what took place.

Column 457

Members' Salaries

11.24 pm

The Lord President of the Council and Leader of the House of Commons (Mr. Tony Newton) : I beg to move

That, in the opinion of this House, the following provision should be made with respect to the salaries of Members of this House-- (1) In respect of service in 1994--

(a) the salary of an ordinary Member shall be at a yearly rate of £31,687 ; and

(b) the salary of a salaried Member shall be at a yearly rate of £23,854.

(2) In respect of service in 1995--

(a) the salary of an ordinary Member shall be at a yearly rate equal to the sum of £32,538 but increased by the relevant percentage for that year ; and

(b) the salary of a salaried Member shall be at a yearly rate equal to the sum of £24,495 but increased by the relevant percentage for that year.

(3) In respect of service in any subsequent year--

(a) the salary of an ordinary Member shall be at a yearly rate equal to the salary of an ordinary Member for the preceding year but increased by the relevant percentage for that subsequent year ; and (

(b) the salary of a salaried Member shall be at a yearly rate equal to the salary of a salaried Member for the preceding year but increased by the relevant percentage for that subsequent year. (4) For the purposes of this Resolution--

(a) an ordinary Member is a Member of this House other than a salaried Member ;

(b) a salaried Member is an Officer of this House or any Member of this House receiving a salary under the Ministerial and other Salaries Act 1975 or a pension under section 26 of the Parliamentary and other Pensions Act 1972 ; and

(c) the relevant percentage for any year ("the relevant year") is the percentage by which, as a result of any pay settlement in the preceding year and any stage taking effect in that year of an earlier pay settlement, the average annual salary (disregarding allowances) on 1st January in the relevant year of the persons covered by the 1992 Pay Agreement for Grades 5 to 7 has increased compared with that average on 1st January in the preceding year.

Madam Speaker : I have to tell the House that all the amendments on the Order Paper may be referred to in the debate, but I have selected only amendment (a) in the name of the hon. Member for Birkenhead (Mr. Field).

Mr. Newton : I understand that it will be convenient to discuss the other two motions on the Order Paper :

That the following provision should be made with respect to the salaries of Members of this House--

(1) In respect of service in 1994--

(a) the salary of an ordinary Member shall be at a yearly rate of £31,687 ; and

(b) the salary of a salaried Member shall be at a yearly rate of £23,854.

(2) In respect of service in 1995--

(a) the salary of an ordinary Member shall be at a yearly rate equal to the sum of £32,538 but increased by the relevant percentage for that year ; and

(b) the salary of a salaried Member shall be at a yearly rate equal to the sum of £24,495 but increased by the relevant percentage for that year.

(3) In respect of service in any subsequent year--

Column 458

(a) an ordinary Member is a Member of this House other than a salaried Member ;

That the draft Ministerial and other Salaries Order 1993, which was laid before this House on 1st November, be approved.

I should first remind the House briefly of the background from our debate just under a year ago, on 25 November 1992, when the House agreed that there should be no pay increase for Members of Parliament in January 1993.

In that debate, I gave two clear undertakings, which were, I think, of importance to Members in coming to their decision at that time. The first was that the Government accepted the case for an automatic linkage with the civil service and would seek to re-establish it once the revised structure of civil service pay had been settled. The second was that the Government did not intend that Members should be permanently disadvantaged by the loss of the 3.9 per cent. awarded to civil servants in August 1992, which Members could in normal circumstances have expected to receive in January 1993.

In framing the proposals that I am putting to the House today, I have sought to fulfil those commitments, while at the same time imposing a significant constraint on the pay of Members, in line with the Government's approach to public sector pay. Thus, the realignment of Members' pay will take place over a period of two years, with the settlement for 1995 bringing Members in line with the civil servants with whom they were formerly linked.

The purpose of the motions is to honour the undertakings given, but to do so in a way which not only acknowledges the continued need for restraint. In fact--this is a point to which I shall return--taking the period from the end of 1992 to the beginning of 1995 as a whole, the motions ask Members to accept greater, not less, restraint than has been asked of civil servants and, indeed, others in the public sector.

Before returning to that point, let me outline the provisions of the motions. The first two deal with the pay of Members, including the reduced parliamentary pay of those who also receive a salary under the Ministerial and Other Salaries Act 1975. That latter category covers not only all Ministers but the Leader of the Opposition ; the Opposition Chief Whip ; the Opposition Deupty Chief Whip ; you, Madam Speaker ; my right hon. Friend the Member for Old Bexley and Sidcup (Sir E. Heath) who, as a former Prime Minister, is in receipt of a pension under section 26 of the Parliamentary and Other Pensions Act 1972 ; the Chairman of Ways and Means ; and the two Deputy Speakers.

The motions provide that, in January 1994, the full parliamentary salary should be increased from £30,854 to £31,687, and the reduced parliamentary salary from £23,227 to £23,854, both representing an increase of 2.7 per cent. They further propose that, in January 1995, the full parliamentary salary should be increased to £32,538,

Column 459

and the reduced parliamentary salary to £24,495--in both cases an increase of 2.68 per cent. on the 1994 salary--together with an amount reflecting the pay settlement for civil service grades 5 to 7 in the forthcoming year. Thus, automatic linkage with civil service pay increases would be re-established in January 1995, after a two-year break. The same automatic linkage would then apply in each year thereafter, without the need for further resolution of the House. The third motion concerns the Ministerial and Other Salaries Order which is also before the House. This applies the same percentage increase in salary in 1994 as for Members, except that Ministers in the other place who are not in receipt of a parliamentary salary would receive an increase in salary equivalent in cash terms to the increase experienced by their counterparts in this House. The order relating to Ministers can, under the terms of the Ministerial and Other Salaries Act 1975, deal only with 1994. However, I should make it clear to the House that the Government think that the right course henceforth is for the salaries of Ministers and the others whom I mentioned earlier to be dealt with on exactly the same basis as Members-- that is to say, in effect linked to the percentage increases in the average salaries of civil service grades 5 to 7. Before coming back to what Members will no doubt see as the main issue, I should perhaps explain in a little more detail the reasons for proposing this new form of linkage, the basis of it, and the way in which it is expected to operate.

As I said last year, the need for a new resolution arises from the move to performance-related pay in the civil service, which had the effect of making the previously established linkage--89 per cent. of the national scale maximum for grade 6 civil servants--no longer a reliable one.

That is because, whereas in the past a settlement of a certain percentage for grades 5 to 7 was applied evenly to all points on the salary scale, so that the top, middle and bottom of the scale progressed in the same proportions, under the new arrangements different points of the new pay range can move at different rates. In the current year, for example, the 1.5 per cent. award has been applied so that the bottom of the scale remains static while the maximum payable will increase by 8 per cent. In later years, a quite different pattern could occur. So linkage to a notional point on the range in the new system could produce uplifts markedly higher or lower than the overall award, which, in their effects on Members of Parliament, would be virtually arbitrary.

Some confusion has been caused by the current pay arrangements for grades 5 to 7 still showing the old scale maximum, and some Members have suggested to me that this could continue to be used. However, this point on the scale is being used only as part of the assimilation arrangements in respect of some reserved rights under the old system, will continue only for a short period and is therefore of no value for the permanent purpose which Members of Parliament wish to see restored.

What the Government are therefore proposing is a measure that would not link Members to a specific point, but would ensure that Members' pay progressed in line with the average settlement for grades 5 to 7. The linkage

Column 460

would be with the average increase in pay experienced by grades 5 to 7 as a result of their pay settlement, and is the closest equivalent to the old linkage available under the new system. Thus, as part of the return to parity with civil servants in January 1995, and in each January thereafter, Members will receive a pay award worth the same as that received the previous August by grades 5 to 7 under their pay agreement. Members will note from the resolution that they would also receive any element of staging awarded during the year. The cost of the grades 5 to 7 award, expressed as a percentage of the total pay bill, will be issued in a letter to civil service establishment officers soon after the settlement, and the same percentage would be used to uprate Members' pay. In other words, we shall then have a link which covers a broader range of civil service grades, which is durable and which can be used for the foreseeable future.

Mr. Jeff Rooker (Birmingham, Perry Barr) : That being so, will the Leader of the House take a few minutes to explain why there should be a linkage mechanism or formula that applies to Members of this House which is superior to any other pay formula affecting anyone in the public service? As everybody knows, there is one group of workers who have such a specific, dedicated fomula and it was to be overturned--the firefighters. Although that did not happen, there was such a specific formula. Why should the linkage for our salaries be superior to any other linkage operating in the public sector? Could he also say-- [Interruption.] No, I will not ask my other question.

Mr. Newton : I do not fully understand how the hon. Gentleman can make that point when the basic proposition is that, far from being superior to what is proposed for other parts of the public sector, the whole point is to ensure that our salaries are specifically and directly linked to what happens across three grades of the Civil Service on average. That is clear, and cannot be presented as the hon. Gentleman suggested.

Mr. Simon Hughes (Southwark and Bermondsey) : On a point of order, Madam Speaker. I apologise to the Leader of the House for intervening, but can a message be sent to the Reasons Committee to say that they need not hurry as their Lordships have risen for the day ?

Madam Speaker : That is not a point of order for me.

Mr. Newton : I now return, as I said earlier that I would, to what the figures that we are proposing to ask of Members, bearing in mind the crucial fact that, unlike any other group in the public sector, they have had no pay increase whatever since January 1992, and that the proper comparisons are with what has happened elsewhere over a period of not one year but two.

Mr. Jeremy Corbyn (Islington, North) : Before the Leader of the House goes further, what consideration has he given to the widely reported cases of Members, mainly those behind him, who double or treble their salaries through consultancies and directorships, solely on the basis of being a Member of this House ? Is it not time that all Members had one full -time job--that of being a Member of Parliament ? Members should be expected to live on that salary and no other, in the interests of democracy and public decency.

Column 461

Mr. Newton : The subject which the hon. Gentleman raises is touched on in one of the amendments which you, Madam Speaker, said could be discussed during the debate, and the hon. Gentleman will doubtless seek to make a speech if he catches your eye. I do not intend to let my speech be diverted from what I consider are the main issues to the sort of point which he has raised.

Although we do not yet know the precise increase in the retail price index in the period from January 1992 to next January when the 2.7 per cent. increase proposed in the motion would take effect, we know that it is already 4.6 per cent. higher in September than when Members' present pay was set. So it is simply not true to say that the increase exceeds inflation in the relevant period. It is significantly less.

The key points are, first, that Members received no pay increase in 1993, and that their current salary is based on an award made to grade 6 civil servants as long ago as August 1991. Secondly, civil servants have over the same period received two settlements totalling 5.45 per cent.--3.9 per cent. in August 1992 and 1.5 per cent. under pay restraint in August 1993. Thirdly, the 2.7 per cent. now proposed for January 1994 is only half that amount. Indeed, under these proposals Members will not receive the remainder of the increase that civil servants received in 1992 until January 1995. Fourthly, when parity is finally restored in January 1995, Members will have experienced exactly the same overall restraint over the two years 1993 and 1994. They will have reached exactly the same point of increase as civil servants--no more and no less.

However, because the increases received by Members will have lagged significantly behind their civil service comparators during that period, they will have lost permanently--I need to put this uncomfortable fact to the House--some £2,000 each, compared to what they would have received had normal arrangements applied, and compared to what their civil service comparators actually received. Several hon. Members rose--

Mr. Newton : I am bringing my speech to a conclusion, and many hon. Members will wish to contribute to the debate.

We are asking not for less constraint but for more. Our proposals are a fair and balanced compromise between the commitments given to Members last year, the undoubted need for continuing pay restraint, and the desirability of re-establishing a clear and sustainable mechanism for determining Members' pay in the future. I commend them to the House.

11.39 pm

Mrs. Margaret Beckett (Derby, South) : As all hon. Members know, this is an issue for the House as a whole, and one on which there will be a free vote. It is for each hon. Member to make his or her own decision. I shall be as brief as I can, in order to allow those who wish to speak to do so.

As the Leader of the House properly pointed out, last year the Government announced a public-sector pay freeze which was opposed by many Opposition Members--especially because some of the most highly paid public servants were not being affected in the same way. We also

Column 462

expressed concern about the breaking of the existing link with civil service pay, for which the House had voted repeatedly. I welcome--on behalf, I think, of many hon. Members on both sides of the House--the announcement that some form of linkage will be restored. Whatever the problems with the present system, I cannot think that it is not superior to the previous system, under which hon. Members were required to make an inevitably somewhat arbitrary decision every year.

I admit to some nervousness about having to accept that the Government have changed the form of the link in case the result of the previous formula proved unacceptable ; but that is simply to put down a marker for a precedent that might be being set. It would negate the purpose of the link if we all accepted that, every time the result did not suit the Government, they could change the link. In no sense am I arguing for the award of a larger sum than that contained in the settlement ; however, I think it right to touch briefly on what was said by the Leader of the House, and to allude to what are, after all, the facts.

The pay of Members of Parliament has been frozen for two years. It has not increased since the end of 1991 and the beginning of 1992. As the Leader of the House pointed out, over that period inflation had risen by 5.4 per cent. The Government's proposal is for half that inflation rate to be recognised this year, and for the other half to be recognised in January 1995. That is not, as most commentators seem to have suggested, an increase above the rate of inflation ; it is--properly, in the circumstances--below that rate.

Every hon. Member knows that there is never a good time to increase the pay of Members of Parliament by so much as a ha'penny, regardless of the rate of inflation or the circumstances of the rest of the community. Those in the news media, who earn far more than any of us, will be loud in their condemnation ; in fairness, so will many members of the general public who do not earn as much. Most people, however, rightly expect their Members of Parliament to work full time in the interests of their constituents : they expect them to do a proper job, and I believe that most expect them to receive a proper rate of pay.

I am a trade unionist, and I believe in a fair rate for the job. I do not abandon that principle solely for Members of Parliament or other public servants--especially because I am aware that many Members of Parliament on both sides of the House, myself included, are forced to subsidise their office and other costs to maintain any semblance of a fair rate of pay for their staff.

That leads me to another point--one that I always feel should be made in these debates. I believe that a fair rate for the job should be paid irrespective of a person's other circumstances. I have always believed, however, that each hon. Member--free as he is both to speak and, in particular, to vote as he chooses--also has a degree of proper responsibility to his colleagues. For that reason, I have always exercised my freedom to comment on hon. Members' pay awards with some reticence.

When I was first elected, I was a single woman without family responsibilities. Within three months, I was drawing a junior Minister's salary. That made me very conscious, when issues of Members' pay arose, that I was not facing the financial pressures faced by many of my colleagues--particularly sole earners, often with family responsibilities, and those who, unlike me, had had to establish a fresh London base. I was working in London at

Column 463

the time. That has always made me very sensitive to the problems that other hon. Members in less favourable financial circumstances might be facing, and very unwilling to add my voice to the condemnation of those who think that this is a fair rate for the job.

11.44 pm

Mr. Andrew Rowe (Mid-Kent) : What is the worth of a Member of Parliament is a very difficult question. The salary that we are currently proposing to alter is attached to an arbitrary percentage of the pay of a grade in the civil service which no longer exists. It is the grade that I was on 27 years ago--scarcely the progress of a greedy man.

It is difficult to determine the amount that any one of us should earn, because as the right hon. Member for Derby, South (Mrs. Beckett) has said, some of us have young families, others have children who have left home, while some lucky ones have children who earn a living. It is therefore very difficult for any individual Member to comment on the pay that should be paid to others. How should the public value us? What do they see? They see a number of supposedly grown-up people shuffling through the Lobbies not just once or twice but five or six times in succession, almost entirely careless and ignorant of the detail of what we are voting about. Among our number in the Lobby is almost every senior Minister, no matter how delicate the negotiations in which they are involved, nor how far they may have travelled that day or are about to travel across the world. Many members of the public wonder how well equipped our Ministers can possibly be to take on Jacques Delors, Gerry Adams or Saddam Hussein when they are faced with such a working schedule. This Parliament of ours, of whose history we are so rightly proud, is dying on its feet in many respects. It is true that sometimes we have a moment of glory, or at least of undeniable idiosyncrasy, such as the interminable debates on the Maastricht treaty, which at least covered a number of the matters under debate. Those moments, however, are not typical.

We claim that we are here to control the Executive, but that claim is difficult to sustain when that Executive propose the business, guillotine the business and virtually never lose their business. We claim that we call the Executive to account. As we heard recently, the Public Accounts Committee, with its creature the auditor, does its best to track the path of some small part of public expenditure. To suggest that we here call effectively to account an Executive whose patronage Government or the Opposition Front Bench. Of course they are very reluctant to see trimmed the powers to which they soon hope to aspire.

Much of this complaint is hardly new, but it is given a new urgency by two elements. The first is the creation of the European union and a real seepage of power from this place to Europe. Our mechanisms for monitoring the European Community are grossly inadequate. The House knows it and the public know it. The result is a further

Column 464

erosion of our reputation as a legislature and with it an erosion of our reputation as individual Members of Parliament.

The second new element is that, after 14 years of Conservative government, virtually every other institution in the land has been subjected to scrutiny and reform. We alone seem to be content to watch our effectiveness decline and our power relative to the Executive diminish, without making any coherent attempt to change our ways.

We live in an age when respect for individuals and institutions has almost disappeared. That may not matter very much. A. J. P. Taylor suggested that the respect with which the British people held the people who were in authority varied in inverse proportion to the prosperity of the nation. So it may not matter if we are not held in great respect, but it does matter to this United Kingdom if its legislature spends most of its time on work peripheral to the nation's needs ; and if that legislature leaves but little time for those things that it does especially well.

Before we start seriously considering what we should be paid, we should ask ourselves what on earth we are doing.

11.49 pm

Mr. Alfred Morris (Manchester, Wythenshawe) : I intervene briefly as chairman of the managing trustees of the parliamentary contributory pension fund to report to the House on one effect of last year's decision to freeze parliamentary pay which, regrettably, is not very widely understood.

In the pay debate on 25 November 1992, I pointed out on behalf of the managing trustees that, if a Member of Parliament were to die during the pay freeze, the effect on the incomes of her or his dependants would be lifelong if no way could be found to protect them. This is because the pensions and other benefits payable to widows, widowers and other dependants from the PCPF are based on the parliamentary salary in the deceased Member's last year of service and take no account of any subsequent increase in the salary to compensate for a period of pay freeze.

The untimely death of our much respected former colleague Judith Chaplin turned what was then a hypothetical problem into a very real and urgent one for the managing trustees of the pension fund. Unable to use that fund to help, we had to resort to the House of Commons Members' fund, to which all Members contribute, month by month, to help former colleagues and their dependants at times of urgent and special need.

Mr. John Garrett (Norwich, South) : What was the problem when the fund was so over-funded that the Treasury cut its contribution?

Mr. Morris : There is no power, as the Leader of the House will confirm, available to the trustees to top up the benefits of dependants in the case of a death of a Member in service.

Mr. Garrett : Change the rules, then.

Mr. Morris : The rules are frequently altered. We have secured, as my hon. Friend will appreciate, a great many improvements in the scheme in recent years, and others are in the pipeline ; but others we have sought have still to be secured.

The Members fund, although it was not introduced for that purpose, was in fact the only possible means of ensuring that a bereaved family would not be made lifelong

Column 465

losers by the pay freeze. What we did, with help from the Members fund, was to base the death in service payment and other benefits on a notional salary equal to that which our late colleague would have been paid if the freeze had not been imposed. We did the same of course, in the case of the late Robert Adley's family.

This could, however, only be a temporary measure to help the bereaved families most affected by the pay freeze and, as I hope to be able to explain in tomorrow's debate on pensions, the trustees of the pension fund have been working on the additional voluntary contribution scheme of which the Lord President is aware, and on which we can comment in more detail in tomorrow's debate. Among other provisions, the new scheme will give Members the opportunity to increase their pension benefits during periods of pay restraint. It will be seen that the trustees have been at the thick end of problems created by the suspension, last year, of the parliamentary pay formula, and I hope that it will be agreed that they have done all that was possible to protect the families of Members who have died in service since the formula was suspended. The problem will be a continuing one until the value of the pay formula agreed by the House is restored, but the AVC scheme should at least limit its seriousness.

The moral of all this is that, when the House takes decisions like that taken last November to freeze parliamentary pay, it should have regard to the effect not only on members but also on widows and other dependants. For them, the consequences might not simply be of passing concern, but financially very hurtful, keenly resented and lifelong. 11.54 pm

Mr. Peter Bottomley (Eltham) : We have heard three really good speeches and I add to that the speech of my hon. Friend the Member for Mid- Kent (Mr. Rowe).

The right hon. Member for Derby, South (Mrs. Beckett), the deputy leader of the Labour party, spoke briefly and with a great deal of common sense. Her speech will have been appreciated by hon. Members on both sides of the House.

My right hon. Friend the Leader of the House spelt out the current position, which is generally well understood by the media. That is one reason why we were not subject to the attacks we have suffered in previous years.

Let me give my view of what we ought to be doing. The House should set a level of pay in one Parliament to come into effect at the beginning of the next Parliament and, once set at an appropriate level, it should be left unchanged from one general election to another.

The level of pay is debatable. My personal view, which is not a matter for debate, as there is not an amendment or a motion to that effect tonight, is that it ought to be set at roughly the same level as a general practitioner in medicine. I am not arguing for it now, but giving my view on what it should be.

I do not believe that the present level of pay is appropriate for those who are waiting to become Ministers in a future Government--for example those Labour Members who have waited 14 years, and who may have to wait another 14 years. It is always awkward to have increases during a Parliament, and to settle the pay increase just after a general election, as used to be the case, causes difficulty to many people.

Column 466

In the interim, it is better that the Government's motions should be approved, but I shall vote for amendment (a) if it is moved, as I do not believe that, just because a level of pay is set, it is compulsory for Members to take it. The situations and circumstances of Members of Parliament vary enormously--mine have. In the years when I was the only Member of Parliament in my family, my circumstances were different from what they are now. It is not easy to say what other people should be putting up with.

What happens between elections is normally a consequence of inflation rather than a general readjustment of the level of pay. That is the argument against regular increases during a Parliament. If the electorate and those who select candidates believe Members of Parliament not worth the general level of pay, in effect they are saying that only the very rich or the very poor should afford to become Members of Parliament.

Most of our constituents like to be represented by people in the middle- income groups, and people with middling levels of achievement or some concern for the welfare of those around them, as well as for their own material well-being, should be able to become Members of Parliament.

It is not the most important issue to our electors or to us, but it is worth resolving. The Government were right to put these general motions to the House.

11.57 pm

Next Section

Home Page