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Ms Harman: It is within the remit of the Members Estimate Committee to deliberate on any comparator for Members’ pay and any mechanism for setting it in the future. However, to avoid having two identical twin-track reviews and a duplication of effort, and bearing in mind that hon. Members would want to give evidence and outside bodies would be expected to be consulted as part of the process and they would not want to give evidence to two identical parallel inquiries, the most advisable way to proceed would be for the Members Estimate Committee to consider the matter and to present a memorandum to Sir John Baker’s review. The view of the Members Estimate Committee would then be clear to the House and the two systems would be
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working coherently. That is a matter for the Members Estimate Committee, which, as the House will know, is chaired by Mr. Speaker.

Mr. Don Touhig (Islwyn) (Lab/Co-op): I was fairly clear about the timetable until a moment ago when my right hon. and learned Friend said that the report would be completed “as far as possible”. Can we be clear that it will definitely be completed by June and debated and voted upon—not as far as possible, but the whole report?

Ms Harman: The Government’s clear intention is that we should come back to the House with any proposals for change that arise from the Baker review before we rise for the summer. That is the timetable that we have set forth. I know that there is criticism about the time that the Government took to publish the SSRB report and to bring it to the House for debate, so I understand the worry that the timetable might slip. That is one reason why we have made it absolutely clear, by proposing that we abolish the 1996 mechanism, that we are determined to have change and that we have a clear timetable for that change, which will be in the hands of the House and which the House will vote on before it rises for the summer.

David Maclean (Penrith and The Border) (Con) rose—

Ms Harman: I give way to the right hon. Gentleman, who is a member of the Members Estimate Committee.

David Maclean: The right hon. and learned Lady and I have the privilege of serving together on the Members Estimate Committee, which is the House of Commons Commission wearing another hat. I am not convinced by her argument that it would be too time consuming or unnecessary duplication if the Members Estimate Committee was given the authority to carry out a review, admittedly in parallel, but possibly talking to different people and involving different experts in the House from those to whom Sir John may have access. I do not propose that we set ourselves limited terms of reference; we would have the power to range far and wide. The right hon. and learned Lady is right. The Members Estimate Committee could do this in any case. My amendment merely seeks to give it slightly more moral authority and a guarantee that whatever we produce will be debated in the House. If my amendment is passed, we would have the right to bring our review forward for colleagues’ consideration. If not, we could publish many memorandums until we were blue in the face but we would have no automatic right to have them discussed.

Ms Harman: There will be an opportunity for hon. Members to consider Sir John Baker’s proposals and the Government’s response, and any proposals of, or conclusions reached by, the Members Estimate Committee. I just want to be sure that we do not set forth today on a twin-track and duplicated exercise. The Members Estimate Committee will undoubtedly be important in this exercise, because it comprises senior and experienced Members, such as the right hon. Gentleman.

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John Bercow (Buckingham) (Con): And of distinction.

Ms Harman: The Committee is made up of Members of exceptional distinction and is drawn from those on both sides of the House. Of course it makes sense for that Committee to give all the help that it possibly can, based on its wisdom and experience, to the John Baker review, but I do not want to duplicate the Baker review. It is right that we have an independent element in the review as to how we should, for the future, set our pay independently. The Members Estimate Committee will have a big contribution to make to the review and hon. Members will expect it to do so, but I do not ask the House to support the right hon. Gentleman’s amendment because it would result in duplication.

Peter Luff (Mid-Worcestershire) (Con): I am confident that Sir John Baker would like to produce an independent and good report that would inform the House. It may be absolutely perfect, but there is considerable speculation that early drafts of the SSRB report were provided to Downing street and sent back, not once but twice, so there are doubts about the independence of the process. May we have guarantees, please, about the independence of this particular process?

Ms Harman: We expect the process in future to be independent. How we change from the current system of the SSRB to a future system will be a matter for the House to consider when we vote on the matter before the House rises for the summer. The hon. Gentleman makes an important point about independence and he can make proposals on that for the review.

Mr. Chris Mullin (Sunderland, South) (Lab) rose—

Ms Harman: I will make this the last intervention for the time being. Some years ago my hon. Friend proposed that we should have an independent pay-setting system, which was rejected by the Government. Had we accepted his proposal, we might not be in the situation that we are in today. As he had such foresight, I will allow him to intervene now.

Mr. Mullin: My right hon. and learned Friend is very kind. Is it not desirable that, whatever formula the Baker review comes up with, it is comprehensible to the outside world? One reason why we have got into such difficulties in the past is that we have come up with arcane formulae, usually linking us to civil service grades that have eventually been abolished, as a result of which we have found ourselves back in the same old situation. When she talks to Sir John Baker, will she invite him to link our fortunes with those of some of our humbler constituents so that the outside world can understand his recommendations?

Ms Harman: There are two problems with the current linkage. First, it was incomprehensible to the outside world. No hon. Member could easily explain it to their constituents. Secondly, we had no independent mechanism for dealing with a situation in which a comparator became non-viable, and we were linked to a civil service pay structure that changed, so while civil service pay went up, our pay went down, which is obviously unacceptable.

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Amendment (c) in the name of the right hon. Member for Penrith and The Border (David Maclean) suggests that the Members Estimate Committee should be asked to bring forward proposals for having salaries determined by an independent body appointed by the House. Clearly, those would be worthy of consideration, and I know that Sir John Baker will be happy to receive submissions from Members. I hope that hon. Members will accept that we should await the outcome of Sir John Baker’s review before deciding on the future comparator and the mechanism for MPs’ pay. I assure the House that the terms of reference for the Baker review are designed to focus on identifying a comparator coupled with a mechanism should that comparator become non-viable. It is not invited to propose structural changes to the parliamentary pension scheme.

David Maclean rose—

Ms Harman: I hope I do not regret this, but I will give way one last time.

David Maclean: I am very grateful to the right hon. and learned Lady, who has been exceptionally courteous.

If we on the Members Estimate Committee can be trusted with the enormous task of sorting out some of the allowances anomalies identified in Sir John Baker’s report, why can we not be given—legally, or with the approval of the House—the official task of coming forward with proposals on pay and linkage? I do not mean a full-scale review. We could use the experts at the House of Commons Library and the Fees Office, and the director of resources, and we could get a lot of input from colleagues. Given that we are trusted to sort out the allowances, why can we not make such proposals?

Ms Harman: Members’ remuneration—our pay—is different from the reimbursement of expenditure. As far as ensuring public confidence in how we go forward is concerned, it is right that the Prime Minister has asked for there to be an independent external review. Of course, the Members Estimate Committee can decide what it does; of course it can decide to consider the issue mentioned by the right hon. Gentleman and propose a memorandum to the Sir John Baker review. It does not need a resolution of the House for that; under the leadership of Mr. Speaker, the Committee can do what it sees fit. However, I urge the House against mandating the Committee to carry out an exactly parallel review to the one that the Government resolution asks to be done independently.

Amendment (f), in the name of the hon. Member for North Devon (Nick Harvey), would have the effect of implementing SSRB recommendations 2 and 3, so that MPs’ pay would be uprated for 2008-09 onwards by the increase in base pay of the senior civil service and MPs would receive a £650 supplement for 2008-09, with the proviso that the award would be staged to ensure that MPs’ pay for 2008-09 increased by only 1.9 per cent.

Amendments (g), in the name of the hon. Member for North Southwark and Bermondsey (Simon Hughes), and (d) in the name of the hon. Member for Christchurch (Mr. Chope), would both leave the current system in place. In the case of amendment (g),
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that would be until such time as a new system had been agreed. I have already outlined the Government’s reasons for not accepting the SSRB’s proposals on Members’ pay. However, we are seeking to rescind the existing arrangements so that we clear the decks and the House can resolve the issues as soon as possible and before the summer recess.

Incidentally, the 1.9 per cent. proposed for 2008-09 in amendment (f) would extend the 1.9 per cent. that we ask the House to accept for April 2007-08 until April 2008-09. That is not what the Government propose for the rest of the public sector. I hope that the hon. Members who have tabled the amendments will withdraw them; if they do not, I ask the House to vote against them.

I turn to amendment (a), on Members’ allowances, in the name of the hon. Member for Cities of London and Westminster (Mr. Field). He has proposed that the Members Estimate Committee look into recommendation 29 of the SSRB report which suggests an immediate increase in the London supplement from £2,812 to £3,500; henceforth, he also proposes that it should be adjusted in line with the public sector average earnings index. I realise that the hon. Gentleman has a long-standing concern over the issue and that he submitted evidence to the SSRB on that point. However, the Government reject the proposal because the London supplement is not, like other allowances, a reimbursement for costs—it is part of taxable income.

I turn to amendment (b) on Members’ allowances, tabled by the hon. Member for North Southwark and Bermondsey. Although we support the intention—namely, that the increases in staffing allowance should take effect from 1 April this year—and although I think I can say that that would already be the broad intention of the Members Estimate Committee, it is difficult to be certain at this point that all the necessary systems would be in place by then. It therefore might be wiser not to specify a date. However, the intention of the amendment is accepted: 1 April for the start of the increase for the salaries of Members’ staff.

I hope that the House will support the Government’s position on this year’s pay. It keeps us within the pay discipline that has applied to others in the public sector. I also hope that the House will agree that we should finally put an end to the inappropriate practice of MPs voting for their own pay.

1.24 pm

Mrs. Theresa May (Maidenhead) (Con): I cannot say that I relish speaking in this debate; like many right hon. and hon. Members—and, it would now seem, the Government—I believe that there has to be a better way to determine the pay of Members of Parliament. However, we are where we are. Whatever the proposals for the future, we must address the proposals brought forward by the Government on the back of the SSRB report.

First, I want to comment on the Government’s handling of the report; that has been raised in interventions by a number of right hon. and hon. Members, and it informs us about the Government’s attitude to the issue. That is part of the reason why right hon. and hon. Members are concerned about the Government’s unwillingness to give an absolute
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guarantee that decisions on the new mechanism will be taken before the summer recess. The Government sat on the report for a considerable period. Indeed, I almost felt for the Leader of the House when in business questions every week she kept being asked when the report was coming forward. Each week, she tried to find different language—“shortly”, “very shortly” and “imminently”. She was desperately trying to find a way of explaining what was happening.

Then there was a farcical situation; the reason given for not publishing the report for Members— [Interruption.] My hon. Friend the Member for Buckingham (John Bercow) anticipates what I am about to say. We knew that the Leader of the Opposition and the leader of the Liberal Democrats had received copies and believed that certain others had also received some, yet we were told that Members could not have copies because they had not been printed. That announcement was met with howls of derision, and that showed how poor the response had been.

The issue was not only about Government dithering; crucially, while they were sitting on the report and not allowing Members to see it, they were leaking details to the press. The Prime Minister went on the BBC to explain the Government’s position and what he wanted MPs to vote on, yet we had never seen the report. The whole thing was a farce, and it is against that background that a number of interventions have been made on the Leader of the House about expectations about the Government’s intentions for the introduction of the new system.

I support the Government’s desire to introduce a new system; indeed, my right hon. Friend the Leader of the Opposition called for one some time ago. However, we need to be clear that the Government will bring it in before the summer recess—that should be an absolute, rather than the Government’s intention. The Leader of the House determines the business before the House, and it is up to her to say whether that debate will take place before the summer recess.

Simon Hughes (North Southwark and Bermondsey) (LD): The right hon. Lady is right to be critical of the process since the report was handed to the Government six months ago in July; there have been leaks since then. If her party is in future responsible for receiving any reports—

Ms Harman: If it ever is.

Simon Hughes: If her party is in future responsible for receiving any reports from any independent body—on pay, staffing or anything to do with this building—will she undertake that they will be published at the same time as they are received? In that way, they could be simultaneously available to the Government of the day and the public and there could be proper and equal consideration. Such an undertaking would be welcome; we would bank it for an eventual sunny, or rainy, day.

Mrs. May: I refer the hon. Gentleman to the sedentary intervention from the Leader of the House. I hope and expect that in future the system will be such that there
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will be no question of the Government receiving some report and being able to sit on it for a considerable period. In future, I hope that such a process will be independent. That is what we should all strive for in respect of the future determination of MPs’ pay.

Martin Salter: To avoid the right hon. Lady falling foul of her own charge of dithering, will she take this opportunity to make it clear that should she be in the happy position of becoming Leader of the House at some point in the distant future, it would be her intention to honour the independence of the review body and keep her sticky hands off any recommendation that came forward in respect of Members’ pay or allowances?

Mrs. May: I am happy to say to the hon. Gentleman that it is my intention that this House finds a way of determining Members of Parliament’s pay that does not require the current process whereby we all have to vote on our own pay. There should be some way of doing that without the need for debate. I will therefore be supporting the Government’s proposals on the review.

Several hon. Members rose

Mrs. May: I give way to my hon. Friend the Member for Stratford-on-Avon (Mr. Maples).

Mr. Maples: As regards my right hon. Friend’s continuing double act with the hon. Member for Reading, West (Martin Salter), the point is not whether we have an independent mechanism for recommending pay but whether the recommendation is implemented. When we have had recommendations from independent mechanisms in the past, the Government have tended to say, “That’s too much—we’re going to whip our Front Benchers to vote against it”, and that is the end of it. What we want from both sides is an undertaking that if such a mechanism is established—I think that most of us are in favour of that—the Government do not interfere to try to prevent a recommendation from being put into effect.

Mrs. May: My right hon. Friend describes what has happened in the past, notably the Government whipping Front Benchers to vote against proposals. The whole point of the current review is to find a mechanism by which Members of Parliament’s pay can be determined without the requirement for a vote in the House of Commons.

John Bercow rose—

Mrs. May: I will give way one more time.

John Bercow: I am exceptionally grateful to my right hon. Friend, who has been generous in giving way.

I am gravely concerned by my right hon. Friend’s replies to my hon. Friend the Member for Stratford-on-Avon (Mr. Maples) and the hon. Member for Reading, West (Martin Salter). What I want to be clear about is this: does she believe that there should be an automaticity about this process so that when the independent recommendation is made it immediately comes into effect? Surely the Government’s position is that they are in favour of an independent recommendation as long as the proposed figure is low but not if it is high.

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Mrs. May: That is certainly my hon. Friend’s interpretation of the remit that has been given to the review body. I ask him to wait and see what proposals the review puts forward on the mechanism that is to be set up. My aim, and that of the Leader of the House, the Government, my right hon. Friend the Leader of the Opposition, and, I hope, other Members of this House is to find some mechanism that avoids Members of Parliament being asked to vote on their pay and which enables MPs’ pay to be determined separately from the political environment within the House of Commons.

I should like to comment on a couple of the principles that the SSRB report sets out on MPs’ pay, on which I hope that everybody would agree. It says:

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