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Mr. David Tredinnick (Bosworth): I am grateful to be called to speak in the debate. I am very proud to represent the new British motor cycle industry: the Triumph plant at Hinckley. I begin by congratulating the management and workers at the Triumph factory on their great achievements over the past few years. I also congratulate Conservative-controlled Hinckley and Bosworth borough council on making it possible for the factory to move to Hinckley and have such great success.
Nothing better illustrates the failure of socialist policies and the success of Conservative policies than the history of Triumph. The House may recall that the now right hon. Member for Chesterfield (Mr. Benn) spent £4.2 million of public money on the Meriden motor cycle co-operative, which tried unsuccessfully to revive the old Triumph firm. From the start, the operation was plagued by inefficiency and union demarcation until its eventual collapse in 1983. It is remarkable that Triumph, like the phoenix, should have risen from the ashes. Garry McDonnell, a fitter at the new Triumph plant, has said:
"We don't need unions . . . I worked at Meriden and what a mess that was. Nobody seemed to know what was going on".
My right hon. Friend the Prime Minister visited the plant, and he found-- his findings are relevant to the motion-- a factory which is ready to expand to a capacity of 30,000 machines a year and which is expected to bring 400 new jobs to the area. However, the Liberal councillors of Hinckley and Bosworth borough council opposed the company's expansion in Hinckley and, as a consequence, I believe that Triumph almost moved its entire works away from the area. I hope that the electorate will remember that in the local elections. Triumph intends to build more than 12,000 vehicles world wide for the 1995 model year. Some 80 per cent. will be exported to 28 markets around the world. The number of employees at the factory has doubled in the past year from 160 to 330. Whereas in 1991 the factory produced only two models, in the three-year period since then, it has produced 10.
I pointed out to my hon. Friend the Minister the problems that the proposed European legislation could create for the factory. From conception to production, Triumph is now capable of creating a new motor cycle machine in 18 months--the fastest development rate in the world. The company has subsidiaries in Germany, France and America, and it has now started exporting to America. Triumph is now planning for an expansion into a second state-of-the-art facility in the immediate future, and on 24 July this year the new Triumph motor cycles raced at Donnington for the first time.
Column 800The proposed multi-directive for motor cycle whole vehicle-type approval would have three serious consequences. My hon. Friend the Minister has addressed some of those consequences, and I shall expand on them a little more.
In its present form, the anti-tampering chapter would destroy the modular manufacturing process--a Lego process devised by Triumph--by disallowing the use of certain interchangeable parts in the engine. The industry has proposed that that chapter be restricted to small motor cycles and mopeds, as my hon. Friend knows. Triumph would like to see support for that proposal.
On the noise issue, Triumph believes that motor cycles of 175 cc or greater that achieve 82 or 80 decibels (A) are sufficiently quiet. Motor cycle noise pollution is an issue that involves not only the original equipment supplied by the manufacturer, but environmental conditions and individual driving styles. Because of that, it is impossible to determine what the effects of further proposed reductions will be.
In Triumph's opinion, after-market replacement silencers are making a large contribution to motor cycle noise problems. In many instances, the manufacturer's silencer is replaced by one that does not provide equivalent noise protection. That area requires greater control. Triumph believes that further research should be conducted before more severe noise level reductions are considered. The company has made a substantial contribution of time and money to research and my hon. Friend the Minister might like to follow that example. Pollution has been mentioned. The majority of motor cycles are small two-stroke vehicles which are used because they consume little fuel and are inexpensive compared with larger machines. Making those vehicles comply with the noise limitations will increase their price by 25 per cent. because additional equipment will be required. That will destroy the market for an inexpensive, low-fuel consuming vehicle.
The British motor cycle industry has been reborn in the form of Triumph, and this is a crucial time for its development because it is the first year during which it will export vehicles to America. Triumph believes that the proposed chapters would seriously damage its hopes for continued growth and success. My hon. Friend the Minister should consider the harm that that would cause not only to manufacturers but to users.
Triumph now has a range of 10 machines based on its modular construction, which is as simple as a system of child's building blocks. It gives the company the ability to develop quickly new models that are in line with the requirements of the market. That principle is threatened with extinction by the anti-tampering chapter. It is in the interests of Britain for this measure to be examined in the most sympathetic light by the Minister. On behalf of all my constituents and those who work at and manage Triumph I hope that he will do so.
Mr. David Chidgey (Eastleigh): I draw the Minister's attention to the fact that many motor cycle users, including members of the Motor Cycle Action Group and others who have been mentioned, have expressed a great deal of anxiety about the implications of these European Union documents. The detail and extent of the proposed
Column 801restrictions could lead one to conclude that the European Commission is seeking to become the designer of motor cycles. It appears from the detail of the proposals that there is a clear strategy to reinforce the policy of limiting the power of motor cycles to 74 kw. That strategy is built on a range of subtle, minor but critical restrictions on engine design. For example, it is proposed that manufacturers should be prohibited from designing motor cycles that are able to accommodate a range of interchangeable parts. That restriction would apply if such interchangeability allowed the power of a particular model to be enhanced by more than 10 per cent. We know that there is no evidence linking motor cycle power to accidents, and that on a number of occasions the European Parliament rejected the proposed power limit. Clearly, this new proposal to restrict interchangeability is designed to support such a power limit through the prevention of the interchangeability of parts. It seems to be a back-door attempt to avoid the opposition of the European Parliament to the imposition of the 74 kw limit, and it should be resisted.
Interchangeability of parts is a key factor for manufacturers who produce a range of motor cycles. Triumph's product range, costs and manufacturing efficiency depend on the modular design concept, and the foundation of that company's success has been the
interchangeability of parts in the modular design process. I am advised that since the new Triumph factory was established about three years ago, sales of motor cycles have been a great success and are predicted to pass 20,000 machines by the end of this year. The combined effect of the type- approval motor cycle proposals could be to eliminate some highly successful models from the company's range. It would reduce the sales volume by more than a third and the consequent loss of revenue could approach £20 million, to which must be added the loss of business to the numerous suppliers and sub-contractors who provide components to the main company. The loss of business and jobs that the proposed restrictions on interchangeability would create, if implemented, is clearly unacceptable. The House would wish to be advised that Ministers have been able to assure the motor cycle industry and users that those concerns have been addressed and resolved.
Mr. Gary Waller (Keighley): I am delighted that the Government have taken a robust line on the proposals in the multidirective from the Commission. I welcome the fact that the European Parliament has reinforced its reputation by acting as a brake on the untrammelled ambitions of the Commission to extend its role and intrude unnecessarily into this area. I am glad that in their approach to motor cycling in recent years the Government have done a great deal to improve safety, especially on training.
Like my hon. Friend the Member for Salisbury (Mr. Key), I pay tribute to the Motor Cycle Action Group, as well as to the British Motorcyclists Federation. I have certainly always found their representatives to be highly responsible and well-informed proponents of their case.
Column 802I should like to deal with the proposals that are objectionable. It is difficult to justify the proposal on tampering, even if it did not hit particularly at British manufacturers. It would certainly prevent riders from even legally upgrading their machines, thus reducing their freedom. It can reasonably be said that freedom is an intrinsic part of motor cycling, and many motor cyclists like to work on their machines and modify them. Sometimes that has regrettable effects, especially when people fit unacceptable silencers, about which I shall speak later. The freedom of motor cycle users to modify their machines should not be unnecessarily attacked in this way--provided the modifications remain always within the law.
Forbidding the interchangeability of parts would certainly affect Triumph in particular, but that approach would also be detrimental to many small United Kingdom manufacturers. This proposal could appropriately be applied to small motor cycles, especially restricted machines such as mopeds, but it is difficult to see how its extension to larger machines could be justified in any way.
There is no scientific evidence that the proposed power limit that the Commission seeks to introduce will increase safety. I am glad that that proposal seems to have been put off, at least until further investigations have been conducted.
I appreciate the perception of many people that motor cycles, as manufactured, can be noisy. Anybody who has attended the demonstrations by the industry will be aware that nearly all noisy machines are those that have been illegally modified by the fitting of after-market, unacceptable exhaust systems. If we enforced the existing law properly, we would eliminate nearly all the nuisance to which people refer. It is notable that in many countries that support these proposals nobody has even begun to seek to enforce the law as it stands.
All the evidence shows that motor cycles contribute only a tiny proportion of vehicle emissions. A figure of 3 per cent. has been quoted. I do not believe that it is necessary to adopt exaggerated means of limiting emissions. I note the view of the British Motorcyclists Federation that the proposed emission limits could not be achieved without the incorporation of catalytic converters. There are clear differences of view between the Department and that organisation on this matter, and I hope that they can be explored further.
In conclusion, the motor cycle is the means of personal powered transport that does the least damage to the environment. As my hon. Friend the Minister pointed out, it certainly takes up very little space.
The motor cycle is the means to jobs--running into seven figures--and enjoyment for many people in Britain . I believe that the multi-directive is wrong to seek in effect to discourage the use of motor cycles by pushing up the price beyond the reach of many people.
Mr. John Fraser (Norwood): As a practising motor cyclist who has ridden motor cycles ranging from a Corgi 50 cc to my current 1,000 cc, I shall say just a few words as a member of the all-party motor cycling group.
Our position on tampering is exactly right. Anti-tampering regulations should apply at the lower end of the range where people are learning and there is a risk
Column 803of accident and death. Provided that problem is dealt with, there is no case whatever for regulations to apply to motor cycles of more than 125 cc. If people want power, they will buy it. There is a huge range available from 125 cc to 1,200 cc bikes. If people want it, they will get it and tampering is irrelevant.
The second issue is noise. I see no point in intensifying regulations on noise. We have to enforce the existing legislation. Noise mostly comes from smaller bikes. Many towns on the Mediterranean sound as if they are occupied from 5 o'clock in the morning to 4 o'clock the following morning by giant bumble bees and wasps as people ride up and down on small motor cycles and mopeds that have been adapted not to achieve as much speed as possible but to create as much noise as possible. We have to concentrate not on intensifying present limits, as most motor bikes do not create noise problems, but on enforcing existing regulations.
In respect of emission and noise control, the Minister should remember, first, that if regulations are applied too intensely they will damage a valuable and growing British industry.
Secondly, perhaps the motor cycle should possess some small advantage against the motor car, if it is not to the detriment of the community generally. Motor cycles occupy very little space, they consume much less fuel and they are much more efficient in terms of their use of the roads. If regulations push up the cost of manufacture and purchase, instead of buying motor cycles people will be shifted into buying cheaper old bangers that are much less environmentally friendly, consume more fuel and take up more road space.
The Minister has to have in mind, first, protecting British industry, and secondly, ensuring that the proper balance is struck between vehicles that take up very little space and are pretty efficient.
Mr. Norris: We have had a good short debate. I know that the hon. Member for Stoke-on-Trent, North (Ms Walley) wishes to give uncritical support to extensions of European powers against those of the European Parliament and I am sure that remark will be noted outside the House.
My hon. Friend the Member for Bosworth (Mr. Tredinnick) made some sensible points on behalf of Triumph and I hope that he will be assured that, to a large extent, he was pushing at a open door because we understand the position of Triumph and we certainly do not want to do anything to frustrate it.
The hon. Member for Eastleigh (Mr. Chidgey) was quite right just to mark the card on the extent to which interchangeability and anti-tampering are related and how interchangeability could be a threat to power output. We fully understand that point and will, of course, ensure that it is taken on board in resisting the Commission's proposal.
I hope that my hon. Friends will forgive me for putting it in this way, but the hon. Member for Norwood (Mr. Fraser) is a well-known motor cyclist and on this occasion he spoke eminent common sense. He was right about anti- tampering and made the point that when one is considering emissions and noise it is sensible to get the issue into proper balance. That is how we have tried to approach the matter--not by insisting on onerous
Column 804regulations that would put motor cycles at a disadvantage to cars, but simply by recognising that, in general, society is seeking less harmful emission levels from all vehicles and less noisy vehicles. Not many hon. Members will disagree with him about the bumble bee effect, which we all understand.
The summary of our approach, which appears to have found favour with the House, is simply that we will be protecting British interests, particularly those of Triumph. That is not only the right thing to do from our domestic standpoint, but also represents a commonsense approach to issues such as power limits. We shall continue to press for what I believe to be a reasonable position on both noise and emissions--one for which there has been general support this evening--with the qualification that we do not want to be over-zealous.
We have taken a commonsense position on anti-tampering that appears to have found favour. On that basis I am happy to commend the motion to the House.
Question put and agreed to.
That this House takes note of European Community Documents Nos. 10904/93, 8037/94 and 8618/94 relating to European Community type-approval of motorcycles; supports the principle of a single market in motorcycles which such a process is designed to achieve; shares the Government's view that amendments must be sought to Document No. 10904/93 if it is not to impact adversely and unnecessarily on motorcyclists and the motorcycle industry; supports the European Parliament's amendments set out in Document No. 8037/94 on the deletion of a motorcycle power limit; but opposes the European Parliament's amendment in that Document seeking a role for it in `comitology'.
That the draft Ministerial and other Salaries Order 1994, which was laid before this House on 21st November, be approved. As you will appreciate, Mr. Deputy Speaker, in a sense, the debate is simply consequential on the debate that we had, in November 1993, on the pay of Members of Parliament. It reflects no new decision, no new policy, but simply what was then announced as the basis on which the pay of Minister and others covered by the order would be settled from January 1995 and each year thereafter.
I went over the background in considerable detail last November, and I shall recall it only briefly today. There are three elements in that background. First, hon. Members, and of course Ministers, had accepted a freeze in their pay in January 1993, when they would normally have expected to receive the same 3.9 per cent. as had been agreed for the relevant civil service grades from August 1992. Secondly, the actual linking mechanism for relating hon. Members' pay to that of civil servants in effect had ceased to be workable because of the move to performance-related pay in the civil service. Thirdly, in asking hon. Members to accept the 1993 freeze, I had undertaken both to re-establish a workable link and to ensure that Members' pay levels would not be reduced permanently by comparison with those civil service links.
Thus a year ago I proposed, and the House agreed by a large majority, a new resolution which did two things. One was, as promised, to re-establish a workable linkage defined as the average pay increase each year for civil service grades 5 to 7. The other was to ask for yet further restraint. That is an important point as, by then under such a link, hon. Members were due both the 3.9 per cent. civil service increase of August 1992 and the 1.5 per cent. civil service increase of August 1993.
The House was asked, and agreed, to take 2.7 per cent. of those combined amounts in January 1994 and to defer the other 2.7 per cent. to January 1995, at which point hon. Members would also receive whatever increase had been agreed for the civil servants from August 1994, which turned out to be 2 per cent.
The resolution passed in November 1993 to establish those arrangements, which is what will lead to the Members' pay increase of 4.7 per cent. in January 1995, could not in itself provide for Ministers pay as well: that has required this order. The primary legislation does not allow it to be dealt with in that way. It requires this order. I said at the time, and I quote from the Official Report , leaving out only a few words for the sake of clarity:
Column 806"I should make it clear to the House that the Government think that the right course henceforth is for the salaries of Ministers . . . to be dealt with on exactly the same basis as Members".- -[ Official Report , 3 November 1993; Vol. 231, c. 459.]
Mr. Archy Kirkwood (Roxburgh and Berwickshire): I wonder whether the Leader of the House has had a chance for mature reflection on whether the "benefits" that the gesture brought have turned out to be worth the hassle.
Mr. Newton: Perhaps the cautious thing for me to say is that I shall continue to reflect on that and that I shall be willing to listen to anything that the hon. Gentleman might wish to observe on the point.
The proposal on linkage between Members and civil servants and between Ministers and Members and, therefore, Ministers and civil servants was neither queried nor opposed. It was, I think, regarded as entirely sensible by the great majority of people present or who thought about it. I am grateful to have that confirmed by the hon. Member for Dewsbury (Mrs. Taylor) and the hon. Member for Birmingham, Perry Barr (Mr. Rooker) from the Opposition Front Bench. As I have already said, the order now before the House simply implements what I said a year ago.
Mr. Dennis Skinner (Bolsover): One of the things that sticks in the gullet of people outside this place is that since last November the Government decided to tell signal workers in the summer of this year that they could not engage in a catching-up process. Yet that is what the Leader of the House wants to do for Ministers. People cannot stomach the idea that signal workers could not engage in a catching-up process to get more than 5.7 per cent. The Government told British Rail not to pay them. To request a catching-up process for Ministers when others were prevented from engaging in the same process is to have double standards.
Mr. Newton: That is not true, for a reason which I shall come to in a few moments. To describe what we are doing as a catching-up process in the sense that the hon. Gentleman means, certainly under the terms on which the original freeze was accepted, is not accurate.
The points that I was about to come to are also the key points in respect of Members' pay. The key points are the same for both Ministers' and Members' pay because they have been tied together. There are four points. The pay settlement for January 1995 is 2 per cent., reflecting what was agreed for civil servants from August 1994. The other 2.7 per cent. is a delayed payment--some of it delayed from as long ago as January 1993, two years ago, as it
were--reflecting earlier civil service settlements.
The next two points are perhaps the key points for the hon. Member for Bolsover (Mr. Skinner). Over the three years involved, the pay of Members of Parliament and Ministers has been restrained to exactly the same extent as that of civil servants, but--I come to the crunch in relation to the hon. Gentleman's point--because their payments have been delayed, in part by up to two years, Members of Parliament and Ministers have lost, permanently, some £2,000 and £4,000 respectively by comparison with their civil service links. That is a permanent loss. It is not something that has been made up. It is money that has gone for good. The rates are going back to what they would have been by comparison with the civil service, but there has been a substantial, actual,
Column 807financial loss along the way. That cannot be described as a catching-up process, as the hon. Member for Bolsover has described it.
Mr. Skinner: For three months in the summer of this year, when the Government were holding back their wages and telling British Rail not to pay them, signal workers said that they had lost wages over a considerable period because they had lost money in comparison to other grades in the railway industry and outside. All they were saying is what the Leader of the House is now saying on behalf of Ministers. Signal workers said, "We want the money because otherwise we will lose it for ever." They have not got it.
Mr. Newton: I have already made it clear that there is a significant difference. If I remember rightly--I have not checked the figure--the basic pay award to the signalmen in the settlement was 2.5 per cent., which is rather more than the settlement for this year for Members of Parliament and Ministers.
Before I conclude, I should of course make it clear that, although I have referred to Ministers' pay for reasons of simplicity, the order covers not only Ministers but the Opposition Leaders in both Houses, three Opposition Whips in the Commons, the Opposition Chief Whip in the Lords and Madam Speaker. Ah, Madam Speaker, you are here. I am glad to point out that there is a pay increase here. The same increase is also paid in the Commons to the Chairman of Ways and Means, and to the Deputy Chairman of Ways and Means, who has just left the Chair, and to the Chairman and the Principal Deputy Chairmen of Committees in the other place.
The arrangements for those in the other place are, however, slightly different, because they do not receive a reduced parliamentary salary as those of us in the Commons do. They will receive an increase equivalent to the aggregate cash increase received by their Commons counterparts.
Madam Speaker, just as I continue to believe that the arrangements for Members' pay agreed last year were sensible and right, so I believe that this proposal to determine Ministers' pay on exactly the same basis is one which the House should endorse.
Mr. Jeff Rooker (Birmingham, Perry Barr): I have no interest to declare in the order and nothing that I say will affect your position, Madam Speaker, because I think you should be paid more. I think you are so popular outside the House that if there were a referendum you would be elected the nation's first president. That is the nature of the stature that you have gained as our Speaker.
I agreed with virtually everything that the Leader of the House said. We have arrived at a barmy position. We are here debating something that was decided a long time ago. When it was decided then, the Government and, I suppose, the House, got bad publicity. We will get it again for doing the same thing. So we have arrived at an inexcusable position. I do not know why we have not amended the main legislation and done something along the lines that we talked about earlier this evening in respect of the corner- cutting of the Deregulation and Contracting Out Act 1994 so that we could get rid of this demeaning debate--not bury it. We have dispensed with such debates for many of the general arrangements for
Column 808Members of Parliament, I do not know. I am surprised that the Leader of the House has not had an opportunity to deal with it.
Mr. Newton: I want to find out whether there is an offer here. It is not that I have legislation in mind, but I should like to know what the position is. If we introduced primary legislation on the matter, would we have the co-operation of the Opposition in putting it through speedily?
Mr. Rooker: We would use our best endeavours to make sensible arrangements for payments to Members of the House, whether they are in Government or on the Back Benches. If the Leader of the House could get Jopling organised well before the House rises for Christmas, we might consider the position. It is not our job to negotiate across the Dispatch Box, but the Leader of the House gets the message.
Matters are made worse for the Government when clearly they plant stories in newspapers, such as that in The Sunday Times of 13 November, which had the headline:
"Cabinet split over move to cut large pay rises for ministers." The only reason why such a headline arrives in a newspaper is that members of the Cabinet have briefed the press. The Government bring it upon themselves. It is not my hon. Friends or anyone else who cause the difficulty. The Sunday Times reported something that made me think, "There is no new decision there." The House debated the issue last November, as the Leader of the House rightly said, but members of the Cabinet had obviously been on the telephone causing trouble for someone.
I have been a Member of Parliament for 20 years as both a Government and an Opposition Back Bencher. So I know that it is difficult to write job descriptions for Ministers. I do not know what they do. My constituents often wonder what they do. They see what you do, Madam Speaker, keeping us in order on a daily basis, but they do not know what Ministers do.
A couple of days ago there was an analysis in The Guardian of the salaries of people doing different jobs. It listed the job and the age of the person doing it. Ministers are usually middle-aged. It listed the salaries. The ministerial salary is between £19,000 and £55,000. The next point concerned what the job entailed. For Ministers, it is obviously doing what Tory central office says or what the Maples memorandum dictates. Qualifications came next on the list. For Ministers, it is either none or an ability to say yes. The next point concerns pay rises. I do not want to go into the background dealt with by the Leader of the House. What he said was correct. I did not notice a single person outside the House during the period when we were on a pay freeze saying, "Look what an example Members of Parliament have set," and calling upon his members or employers to do the same. I see no reason why people should, but that does not behove us to say, "Look what we are doing. Follow our example." We know that will not be done. We must have a more mature and civilised way of settling pay in Britain, not just for Members of Parliament, but for health visitors, home helps, gatekeepers, cleaners and managing directors. We need a more civilised arrangement spread, throughout society, than we have. The pecking order fixed at certain levels years ago should not remain immutable forever.
Column 809The next thing that The Guardian touched on was prospects of poachability. If we have a general election before Christmas, Ministers may be out of office by 22 December, which is the first available working Thursday that can be used if they fail next week. They are all pretty tainted, so I do not give much for their prospects of poachability once they are ex-Ministers.
The final question asked whether employers were worth their pay. For Ministers, I would say on productivity no, on responsibility yes. That is where I draw the distinction. The productivity of Ministers has been pathetic. There are too many of them. They have got rid of much of their responsibility for looking after public money--£46 billion looked after by non-elected quangos. Ministers are no longer responsible for that, they simply pass our letters on to the chief executives of the quangos and we cannot get genuine accountability for the quangos. But, on their ultimate responsibility, the answer must be yes. The Government must have a real problem because they now have to employ part-time dentists as Ministers to make up the numbers.
This is my first day in the House this week, and I make no apology for that. I came here today via my constituency and the remarkable Dudley, West constituency. I have taken some time this week to listen to the good people of Dudley, West. I have talked to them about the business of the House and what has happened in the past 15 years. I have listened to their worries for the future for their families. I told them that, on Thursday, I would be coming to the House for a debate on Ministers' salaries and I asked them what they thought about that.
I offer the Leader of the House a few choice comments from the Tory voters in Dudley, West. They say that Ministers have been in power for too long; they are complacent; they have lost a sense of direction; they have failed to fulfil their promises; they are clumsy at implementing policy; they shoot themselves in the foot. We pay them £19,000 to £55,000 for that. Those are exactly the phrases that John Maples heard from Tory voters, which he published in his memo. They are exactly the kind of things that Tory voters in Dudley, West are saying and something should be done about it.
We could call for fewer Ministers to share out the kitty on a more even basis. We could call for more Ministers to contribute from their salaries, as I call on all Members to do, to the give-as-you-earn charity pay-roll scheme operated by the Fees Office. When I checked two years ago, some 55 Members were contributing, and I declare an interest as one of them. When I checked this week, the figure was only 43 out of 651. I am not saying that the other hon. Members are not giving to charity, but we are trying to encourage millions of people in Britain to give to charity through their employer. The legislation making that possible was agreed on a cross-party basis and Members of the House are setting a pathetic example in respect of that.
I do not say that I do not intend to vote myself if there is a vote, although I see no need for one, but I remind Conservative Members, in case any of them are minded to seek to make divisions on the Opposition Benches, that by and large people of my ilk do not spend their time in industry seeking to remove from other people their existing pay. I can remember during my service in the House one occasion when Conservative Members of
Column 810Parliament ganged up and voted to reduce the salary of a Labour Member of Parliament, and they carried the vote. They carried the vote to reduce the salary of Eric Varley by £1,000 in about 1978. Labour Members returned the following day and the matter was redressed. Conservative Members did not waste any time in saying that the salary of a Labour Member of Parliament should be voted down. It is true that he happened to be a member of the Cabinet. He was Secretary of State for Trade and Industry. It was their attempt to have a go at him, and they used the means of reducing a Member's salary to do so. I hope that Conservative Members will never think of doing that again.
Sir Terence Higgins (Worthing): There can be no doubt that this is a sensitive issue, perhaps even more sensitive than that of the pay of Members of Parliament. It is not surprising that that is so because the absolute level of pay in this case seems to many of our constituents, particularly pensioners, to be something of which they could only dream. It follows necessarily that there is never a good moment to increase Ministers' pay. None the less, for reasons that I shall put forward, I believe that it is extremely important that we should do so.
If there is one lesson that we have to learn from recent experience, it is the fact that if Members and Ministers take a pay freeze, it is unlikely to receive a line of publicity in any national paper. The idea that any wage negotiator, trade union or otherwise, will make the slightest difference to their wage claim as a result of that is utterly unrealistic.
However, when the adjustment is made to compensate for the freeze, there will undoubtedly be massive publicity of a kind to which I shall refer in a moment. The effect on pay settlements and on union leaders rushing round saying that they must have a similar increase is great. The whole thing is asymmetrical and the net effect of the freeze and what we are proposing this evening is, if anything, to encourage rather than discourage wage settlements outside. That is the simple point that I want to make. We should resume the link because we must have some way of showing that we wish not to decide our own pay but to relate it to what is happening outside. I want briefly to say a word or two about the increase in ministerial pay in relation to inflation, civil servants, Members of Parliament and the population as a whole. First, with regard to inflation, headlines last week declared, "Pay increases for Members of Parliament well above the rate of inflation." They compared the increase to which my right hon. Friend the Leader of the House referred, part of which is anyway a deferred payment from an earlier period, with the current level of inflation. That is clearly rubbish. It must be compared with the date of the previous increase and, in this case, the date of the pay freeze and allowing for the subsequent staging of the increase. If one does that, far from being well above the level of inflation, it is near enough in line with inflation, but, as my right hon. Friend pointed out, with an important qualification.
That brings me to the question of the pay increase in relation to civil servants and, in particular, those with whom ministerial pay has, in a sense, been compared. If one does that, because of the time lags in the ministerial pay increases compared with those of the civil servants, it is not the case that they have caught up. The reality is,
Column 811as my right hon. Friend said, that Cabinet Ministers have lost £4, 000 in hard cash once and for all. That will never be made up. Therefore, even in that respect the link has not been made. The pay of Ministers has increased even more slowly than that of ordinary Members of Parliament and the differential has been constantly narrowing. In those terms, the Prime Minister's salary has increased less than that of members of the Cabinet, the Financial Secretary and Under- Secretaries of State.
With respect to the Leader of the Opposition, I regret that he followed the example of the former Prime Minister when she was in office, in not taking the whole increase. That is a bad example to follow. I am glad to note that the right hon. Gentleman is prepared to accept the additional pay that he receives as Leader of the Opposition. However, it seems a subtle distinction to take that increase but not the rise that was anyway deferred from a previous decision.
The squeezing of differentials has seriously affected those further down the scale. It will be increasingly difficult to attract high-quality recruits to ministerial office. The decision of the Leader of the Opposition not to take his increase squeezes the differentials further and provides less headroom. Anyone who has worked in industry, as I have, knows that it is dangerous not to have the headroom to be able to give appropriate increases to people further down the line.
It has been suggested that ministerial pay should be linked with productivity, and a number of my constituents say that the pay of Members of Parliament should relate to inflation. The startling inflation figure of only 7.8 per cent. over the past three years compares with 56 per cent. inflation under three years of Labour Government. The present Government can take credit for that, and might even argue for a reasonable pay increase for reducing inflation to its present level, which is of vital importance to my constituents. In productivity terms, the increase can be justified. Figures that I received from the Library today take a serious and analytical view of certain statistics. There are some minor footnotes and qualifications, but the figures that I want to quote will not seriously mislead the House. I will, as I did in the debate on the pay of Members of Parliament, compare the position since I entered the House 30 years ago, in 1964, with the present.
Allowing for changes in the retail prices index and at 1994 prices, the real income of the Prime Minister has fallen 59 per cent. The income of Cabinet Ministers has fallen 60 per cent. and that of Under-Secretaries of State, 39 per cent. Members of Parliament are, in real terms, just about back where they were when I entered the House.
Throughout the intervening period, the real pay of Members of Parliament and, to a far greater extent, of Ministers has fallen way below the 1964 figure. In the country as a whole, average real incomes have increased nearly 80 per cent. Over a longer period, which is a reasonable way to view the matter, the income of a Cabinet Minister has fallen 60 per cent. while average real incomes have increased 80 per cent. To take the productivity argument, Ministers of whichever party has been in power--although most improvements have taken place under a Conservative Government--could justify an increase in ministerial pay. Differentials have been enormously eroded.
Column 812I am seriously concerned about recruitment to the House and to ministerial office. When I entered the House during the Macmillan period, it was generally recognised that no one could afford to become an Under-Secretary of State at the pay rates then prevailing unless he had a substantial income. That precluded a large number of candidates or reduced new Ministers to utter penury. It is important to attract the right people to the House--and to your own office, Madam Speaker. We shall not do so if we continue to take the attitude to pay that we have in the past, particularly under the previous Prime Minister. I remember negotiations between the Prime Minister, Government representatives and Mr. Du Cann-- then chairman of the 1922 Committee. Time and time again, we have failed to agree a reasonable level of pay.
The question can become mixed up with the issue of outside interests, and I dare say that the hon. Member for Bolsover (Mr. Skinner) will mention that. To question whether or not a person is a full-time Member of Parliament is grossly misleading. It would not be unreasonable to estimate that a full- time job occupies 40 hours per week. Most hon. Members work far in excess of 40 hours.
It is nonsense also that Ministers do not receive their full parliamentary salary. When I served as Financial Secretary, I did not accomplish my constituency work less well or any better than I do now. I slept rather less than I do now, although I do not sleep that much now. We should question the historical justification, which goes back to Domesday, for Ministers not receiving their full parliamentary salary. The whole issue must be examined, perhaps in the context of the Nolan committee. I am not in favour of hon. Members working full time in the sense that they have no outside interests, but we must review our whole pay structure and at some stage take a brave approach.
I understand the point about railwaymen made earlier by the hon. Member for Bolsover, but I suspect that their pay increases have not, in real terms, been vastly different from those of other workers and that their pay has increased substantially. If one takes a reasonable time scale, Ministers and Members of Parliament have made considerable voluntary decisions that have seriously undermined their real pay position in relation to other employees.
It is not a question of supply and demand--arguing that there are dozens of candidates for every general election and that, as supply exceeds demand, pay should be reduced. Any first year economics student could tell us that supply in relation to quality is what matters.
I support the proposals of my right hon. Friend the Lord President of the Council, and I hope that the House will agree to them. I trust that we will give thought also to the long-term strategy that we should adopt with regard to the pay of Members of Parliament. I do not expect to get enthusiastic headlines for my speech, but I have tried to demonstrate the right thing to do.