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9.18 pm
Mr. Alfred Morris (Manchester, Wythenshawe): I rise to address the two amendments standing in my name as chairman of the managing trustees of the parliamentary contributory pension fund. They were tabled also in the names of other managing trustees of the fund from both sides of the House.
It is not generally understood, even by Ministers, that under the Government's new, post-Maxwell pensions legislation, the managing trustees of the parliamentary fund have legal duties and responsibilities in relation to recommendations from the Senior Salaries Review Body--SSRB--where the interests of its members and their dependants are at issue. As those who have read it will have noticed, the SSRB's report demonstrates how inextricably pay and pensions are linked. That link alone eminently justifies the tabling of the amendments in the names of managing trustees of the fund.
It was because of our additional legal duties as managing trustees that we sought counsel's opinion on their effect on our freedom of manoeuvre in relation to the SSRB's recommendations. The advice we received was unequivocal and clear. It was, first, that it is proper for the managing trustees, in considering what is best for Members, to regard recommendations of the review body as a proper guide for their decisions. We were told also that it is not proper for the trustees to have regard to party viewpoints or whether it is the Government's policy not to implement a particular SSRB recommendation.
The House will know that, in the course of the SSRB's recent inquiry, I gave oral evidence on behalf of the managing trustees and made a range of proposals for improving the parliamentary fund. They reflected, in particular, the growing opinion now that more could and should be done to help retired Members, their widows and other dependants.
For pensions, however, the SSRB concluded that our scheme compares well with other public sector schemes and that
As the Leader of the House said in his speech about the parliamentary fund on 17 July last in response to the right hon. Member for Worthing (Sir T. Higgins):
There was no talk then of the civil service being the best comparator for parliamentary pensions or of the repercussive effects of that huge and unnecessary increase in the Member's contribution on other schemes in the public sector. The decision to impose a rate of 9 per cent. was totally unrelated to the financial needs of our fund at the time, but of direct and substantial benefit to the Exchequer. It was a clear case of manipulating a pension fund at the Members' expense: a technique which was later refined and perfected by others and which the present Government, to their credit, have now legislated against.
That is but one reason why it is not for Ministers or anyone else to complain now of Members of Parliament unfairly benefiting at the expense of the Exchequer. As I have shown in previous debates, the Exchequer contribution was seriously and most unfairly out of line with what Members had to pay over many years after 1983. The Exchequer was also the main beneficiary of the managing trustees' investment policy. For far too long, we were, in fact, victims of our own success: the more that policy succeeded, the more disproportionately it helped the Exchequer.
If the managing trustees are disappointed with the SSRB's treatment of our proposals to improve the fund, the SSRB, too, has every justification for being disappointed, indeed deeply disquieted, by the way in which its recommendations have been treated by the Government. In his letter to Sir Michael Perry last February, the Prime Minister asked him and his colleagues on the SSRB
This is not just a disquieting way to treat the SSRB: it is also damaging to the whole future of independent pay reviews and feeds the prejudices of those who deliberately misrepresent the scope and longer-term significance of the report. It also obscures the strong signal sent to the Government by the SSRB that any new link with civil service pay, which the Prime Minister's parliamentary reply of 4 July says he himself wants to forge
It must be said that the only change since the SSRB was commissioned to undertake its inquiry in February and the Government's summary rejection of its report on 4 July is that we are now five months nearer to a general election. It is not a pretty picture, and I entirely agree with those in the media who say that it is high time now for us to be realists and not populists on this issue.
I have respect for any hon. Member who decides not to vote for the recommended pay increase and refuses to accept it. In the case of every increase of parliamentary pay approved by this House over my 32 years here, there have been those who were said to have so decided. But I have to say, as of now, that I understand that there are only two Members on less than full salary. For how long those who refused but now accept the last increase held out, I have no idea. Nor do I know how many will refuse the increase that the independent review body recommends if it is approved by the House. What I am sure they will feel, with me, however, is that it is not for anyone to pressurise Members on how they should vote tonight. While party leaders must state their views, it must ultimately be for individual Members to decide the issue.
"the best comparators are with the public sector".
Inevitably, this disappoints the managing trustees, more especially since it takes no account whatever of the fact that the civil service--it is to the civil service that the SSRB looks for the best pay comparator for Members of Parliament--has a non-contributory pension scheme.
"there is no getting away from the fact--nor do I seek to disguise it--that this is a contributory scheme and that the civil service scheme is not".--[Official Report, 17 July 1995; Vol. 263, c. 1416.]
Nor does the SSRB's treatment of parliamentary pensions take any account of what happened in 1983 when, long before the Maxwell scandal erupted, the then Government decided to raid our fund to offset part of the cost for phasing in a pay award by gratuitously increasing the Member's contribution to a wholly unnecessary 9 per cent. of salary.
"to undertake a comprehensive review of the level and structure of Parliamentary Pay and Allowances and to make recommendations for the future".
Yet on 4 July, some five months later, and within just a week of seeing the SSRB's report, the Prime Minister told this House:
"The Government . . . are clear that the recommended increases for Members' and Ministers' pay are too high and that the motions to give these effect should not be passed".--[Official Report, 4 July 1996; Vol. 280, c. 506.]
That reply treated the SSRB's report as if it was one about an annual pay round increase that had to be compared with others in the current year and particularly with increases being paid in the public sector, whereas in fact what the report provides and what the SSRB was commissioned to undertake--again I quote the Prime Minister's own words--was a comprehensive review of the level and structure of parliamentary pay and allowances with recommendations for the future.
"will only be effective if"
parliamentary
"salaries are set at a correct level".
That warning to Ministers not to repeat the mistakes of their predecessors comes at a time when, by common consent, parliamentary pay is worth no more, in real terms, than it was in 1964. Indeed, the most recent league
table on parliamentary pay shows the UK in the relegation zone, third from the bottom, about which a leader in The Times on 14 November 1995 said:
"In the past 30 years the average real income of Britons has risen by 80 per cent.; that of MPs is still the same as it was in 1964".
In an apparent criticism of successive Ministers, one as sharp as I have ever seen in any review body report, the SSRB pointedly asserts that the increase it now recommends is needed to make up the ground lost by failure to implement the review body's 1983 report. Had the Top Salaries Review Body recommendation of £19,000 per annum been accepted in 1983 and subsequently uprated by the percentage factors which were actually applied each year, it would have produced a parliamentary salary of some £42,300 today, as compared with the current £34,085. That means that a Member who was in the House then and is still here has lost a cumulative total of £75,800 over the years since 1983, due wholly to the failure to implement the independent review body's report of that year. There can be few other people, here or anywhere else, who have sacrificed more in pay restraint than Members of this House. It makes Job, by comparison, seem guilty of irascible impatience.
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