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Michael Fabricant (Lichfield): While he is on the subject of IT equipment, will the Leader of the House give way?
Mr. Cook: I shall come to that later, and I shall be happy to give way to the hon. Gentleman then.
The financial equivalent of the new package will total about £80,000 for most Members.
The previous system needed fundamental reform. It was hard to justify a system which led some Members with heavy case loads to rely on volunteers and foreign interns because they could not afford enough permanent staff. It was even harder to justify a system that obliged a number of Members to dig into their own pockets to make up the pay of their staff. Nor can we justify trading on the high motivation of our staff by paying them at a lower rate.
I am well aware that many Members, particularly new Members, face pressing decisions on the recruitment of staff. I have therefore tabled this resolution, and the other resolutions before the House, to have immediate effect. The result is that, from today, Members will be entitled to a pro rata share of the new annual allowances for staff pay.
The resolution puts before the House the new ceilings proposed by the SSRB—an annual ceiling of up to £70,000 for Members with a London constituency, and £60,000 for Members with a constituency anywhere else. The differential is the single issue on which I have received most representations from hon. Members, and I am not in the least surprised that it has attracted an amendment. The Government are not offering any advice to the House in respect of the amendments to the resolution that have been tabled; they are matters for House to resolve.
It is plainly right that the ceiling for London Members should reflect the higher staff costs that they must necessarily pay in the London labour market. However, many Members with constituencies outside London also
employ staff at Westminster. It is a fact of geography that Westminster is in inner London, and all members of staff employed at Westminster will be paid at the same higher London rate, whatever the constituency of their employer. The amendment tabled by my hon. Friend the Member for Ealing, Acton and Shepherd's Bush (Mr. Soley) therefore offers a pro rata increase in the ceiling for Members from outside London who employ staff at Westminster.
Mr. Alan Duncan (Rutland and Melton): Will the Leader of the House comment on the two amendments that I tabled? They have not been selected for debate, but the right hon. Gentleman may be able to satisfy the House on their subject matter.
Mr. Speaker: Order. I hope that the Leader of the House will not comment on amendments that have not been selected.
Mr. Cook: I may be able to help the House—
Mr. Crispin Blunt (Reigate): On a point of order, Mr. Speaker. May I seek your guidance? I understood that, although amendments that have not been selected cannot be pressed to a Division, they can be debated.
Mr. Speaker: If the hon. Gentleman changes his wording and talks about the substance of the matter, that might be better.
Mr. Duncan: Will the Leader of the House give way so that I can ask him to comment on an issue that has arisen in the midst of the debate? The SSRB suggests a ceiling of £60,000, but it would appear that its arithmetic relates to the headline salaries, which when added together already reach that ceiling. National insurance contributions do not appear to be included. Would the right hon. Gentleman therefore consider allowing those contributions to be paid centrally?
Secondly, given that the proposals may involve a number of Members shifting some of their staff and some of the functions of their staff from Westminster to their constituency, it is inevitable that some people may be made redundant. For the sake of our staff—not for us—will the right hon. Gentleman therefore contemplate making statutory redundancy pay provided for centrally?
Mr. Cook: I may not be able to help the hon. Gentleman on his first point, but I can clarify matters. It is important that right hon. and hon. Members should understand what is proposed in the tables of the Senior Salaries Review Body's report. It sets out staff pay rates and makes it quite explicit that the employer's national insurance contribution should also fall to be paid out of the overall ceiling—in other words, the £60,000 for Members outside London and £70,000 for Members inside London must also provide the payment for national insurance contributions by employers. It is important for right hon. and hon. Members to reflect on this point. That 10 per cent. contribution can make quite a significant difference to the final year outturn, as I know to my cost from previous experience.
On the hon. Gentleman's second point, the standard position is quite clear and does not change with the SSRB report, as far as I understand it. If staff are faced with redundancy as a result of their Member losing his or her seat, redundancy payments will be met. If they are made redundant as a result of the Member restructuring the office—for example, moving it from the constituency to Westminster—that cost falls to be met out of the allowances.
I appreciate that, in phasing in the new system, there will be particular cases to consider. That is why we have taken the power, through the Speaker's advisory panel, to make sure that we can be flexible, and that where there are bona fide cases, we can respond to individual difficulties. In addition, I stress that there is a transitional period. Until April 2003, right hon. and hon. Members can continue with the present arrangement before transferring, and that should help to ease some of the transition problems.
I should like to move on from the ceilings to the new arrangements for incidental expenses.
Mr. Tony Lloyd (Manchester, Central): Will my right hon. Friend give way before he moves on?
Mr. Lloyd: I am grateful to my right hon. Friend. It would help the House if he clarified how staff salaries can be protected in the future. We know what is on offer as of today, but can my right hon. Friend assure us that staff salaries will be protected throughout this Parliament and into the future?
Mr. Cook: I am not in a position to give my hon. Friend an assurance if he is referring to future uprating. That lies in the hands of Hay Management Consultants, the SSRB and the authorities. However, it is not our intention to allow Members' staff to suffer. Indeed, my overall impression from the proposals is that the majority of staff will welcome the proposals and package, and will also, in many cases, benefit from the rates of pay set out in the appendix.
If my hon. Friend means by his question to ensure that Members' staff will not face a decrease in pay, I draw his attention to that part of the SSRB report in which the point is made that some Members' staff may have a higher rate of pay at present than allowed for in the appendix. In such circumstances, the SSRB recommended that their pay should be frozen until such time as the pay levels caught up.
As I stressed earlier, this is a radically different system. On balance, it will be better for Members and for their staff. There will be some awkward and difficult cases, which is why it is important that we provide ourselves with some flexibility to respond to individual circumstances.
I was about to turn to the incidental expenses allowance.
Sir Michael Spicer (West Worcestershire): Will the Leader of the House give way?
Mr. Cook: This must be the last time or else we will never finish, and I am conscious that other right hon. and hon. Members wish to speak.
Sir Michael Spicer: If salaries are to be decreased and there is a review clause in the contract, what will happen to the contract?
Mr. Cook: The SSRB report contains a specific proposal that where there is any legal contractual responsibility, the Fees Office should be able to assist with it. However, I stress that I do not envisage the outcome of these changes to be that Members' staff face a decrease in pay. At most, there may be a necessary period of transition in which they wait until the pay scales catch up. For most Members' staff the rates set out will represent an increase, not a decrease.
I must make progress if the House is to debate these motions. The incidental expenses allowance is set by the SSRB at £14,000. "Incidental" possibly does not do justice to the essential items which this budget must cover, including office rent and rates. The figure proposed by the SSRB incorporates an estimate of constituency spending as assessed by Hay Management Consultants. However, many Members, and if I am frank, my own constituency staff, have questioned whether this figure adequately provides for all the items that Members may have to meet in the course of a full and unpredictable financial year.
My hon. Friend the Member for Ealing, Acton and Shepherd's Bush has an amendment to the ceiling on incidental expenses. It is for Members to reach their own judgment on that amendment in the light of their own practical experience of running constituency offices.
One problem of the previous system, which Members will know from practical experience, was that a capital purchase could knock a big hole in that year's allowance. One major gain from the new package is that we will never again have to weigh the necessity of purchasing a new computer against the amount that would be left over for staff pay. The new package responds to frequent representations by Members that we should move to centrally funded and managed procurement of IT equipment. Under the terms of the resolution—
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