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“Pay should not be so low as to deter suitable candidates, or so high as to make pay the primary attraction of the job”.
I hope that we can all agree that that should indeed be the aim, whatever the mechanism. None of us wants people from different walks of life—nowadays, that includes people working in public sector jobs such as the head teacher of a secondary school—to be deterred from becoming a Member of Parliament because of the pay differential. Similarly, the SSRB makes several references to the fact that although there are of course always large numbers of people wanting to become Members of Parliament, pay should not be set at a level at which it attracts people to the job. People should want to do this job for other reasons than simply the pay level.
Michael Jabez Foster (Hastings and Rye) (Lab) rose—
Andrew Mackinlay (Thurrock) (Lab) rose—
Mrs. May: I have been very generous, but I will give way one more time to the hon. Member for Thurrock (Andrew Mackinlay).
Andrew Mackinlay: I am listening carefully to what the right hon. Lady is saying about MPs’ pay. Another part of the background to this is the disproportionately high salaries for Ministers and something that has disfigured this House and will continue to do so—the growing disparity in pay even between Back Benchers, with people on an extra £15,000 a year for chairing Select Committees and Public Bill Committees. How many of us are still on basic pay? That pay difference is very threatening, and it diminishes the number of principled resignations by Ministers. In the longer term, there should be a greater closeness between the salaries of Back Benchers, who do a lot of difficult work, and Ministers. I never thought that I would be guilty of avarice, but I am.
Mrs. May: I would make two comments in response to the hon. Gentleman. First, I support the alternative career structure of Committee Chairmen, because it means that Members of Parliament are able to get on and able to do more than just the job of being an MP without having to curry favour with their Front Benchers to get on to the Front Bench. It is right that the House has that separate career structure. Secondly, as for how many MPs are on the basic pay rate, I can tell him that, with the exception of one or two, members of the shadow Cabinet are certainly on that basic pay rate.
Michael Jabez Foster: Will the right hon. Lady give way?
Mrs. May: No—I said that I would take one more intervention, and I am going to make some more progress.
The SSRB says that House of Commons expenses, or allowances, as they have come to be known over the years—different terminology is used—
Mrs. May: I have told the hon. Gentleman that I am not giving way.
The SSRB says that most of what are known as allowances for MPs
“are in fact mechanisms for the reimbursement of expenditure actually and necessarily incurred by MPs in order to do their jobs.”
I will return to that important statement in a few minutes.
I am going to take my life in my hands and make some comment about the media’s approach to MPs’ pay.
David Maclean: Will my right hon. Friend give way?
Mrs. May: If my right hon. Friend will allow me, I have said that I want to make some progress. I am sure that he will be able to find a suitable opportunity to intervene later on.
Mr. Spellar: On a point of order, Mr. Speaker. Could you, to aid the House, give an indication of how many hon. Members have said that they want to speak and whether that means that we are short of time, which I accept is a constraint on the right hon. Lady in taking interventions?
Mr. Speaker: That is not a matter that I will go into.
Mrs. May: As for the Government's motions, let me first say that I will indeed support the Government’s proposal on pay. Although it does not follow the recommendations of the SSRB, which set out the reasons for its recommendations, I believe that at a time when others in the public sector are having restraint forced on them in terms of their pay, Members should also show restraint and should not use the fact that we can vote on our own pay to vote ourselves a higher increase than the Government propose in line with that restraint. I would urge right hon. and hon. Members to exercise similar restraint and support the Government’s proposal.
Similarly, I will support the proposals on pension arrangements. The SSRB has come forward with an attempt at a solution on the issue of retained benefits, which offers a way out for colleagues whose contribution rate exceeds what is necessary to achieve the pension available given their retained benefits. It is important that that is looked at, albeit that the Government motion asks for that to be done in a cost-neutral way. I think that there is merit in the proposals put forward by the Conservative party’s democracy taskforce, chaired by my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke), to consider different pension arrangements in future, after the next election. We need to be very wary and
aware of the circumstances in which many people in the private sector find themselves in terms of their pension arrangements.
As I said, I welcome the Government’s intention to find another way to set MPs’ pay. However, I would say to the Leader of the House that, although it would not be right to question the independence of Sir John Baker, I question the fact that he is undertaking this review given that, in the past, he has referred to the issue and given some hints as to what he thinks might happen. Surely the task should be done by somebody who comes to the issue with a fresh face and fresh thinking.
The Leader of the House made a number of references to a comparator, and a mechanism if the comparator no longer appears to be valid. It is up to the review to decide what the mechanism for choosing MPs’ pay should be, and it may be that that does not involve a comparator. The Government should give the review the ability to undertake wide-ranging thinking on the issue. On that point, I support the proposal of my right hon. Friend the Member for Penrith and The Border (David Maclean) that the House should undertake a review through the Members Estimate Committee because there will be value in the House having a range of proposals that it can look at when the time comes; it is perfectly valid for the House to already have done some thinking on the matter.
I want to comment on why the issue of whether MPs vote on their pay has resonated so much with the public, and sadly, it is because many voters no longer trust politicians. They have a jaundiced view of politicians and are consistently given the view by the media that all MPs have their snouts in the trough. That is a disappointing representation on the part of the media because it damages this House, politics and our parliamentary democracy if people feel that they are not able to trust politicians. There are, of course, other ways in which trust in politicians is damaged, such as Governments not delivering on their promises, and other factors, but we should be concerned about the image of MPs portrayed by the media.
Mr. Nigel Evans (Ribble Valley) (Con): My right hon. Friend probably did not hear, but someone on our Back Benches suggested that our pay should perhaps be linked to that of Jeremy Paxman. Does she think that that is a goer?
Mrs. May: I suspect that that would blast through the Government’s pay policy in no uncertain terms. I am tempted to say that it would be better if I did not refer in this House to any sort of support for Jeremy Paxman, given what he has said recently.
The way in which MPs’ pay is reported in the press is an important issue. We consistently see the misreporting of the amounts of money that MPs “earn” in this House by the addition to our basic salaries of the budgets that we have to pay for our staff and in order to run our offices. Indeed, only last week The Daily Telegraph set out a table that included average staff salaries and average expenditure on offices alongside average travel expenses and the average additional costs allowance, under the heading “MPs’ Gravy Train”.
We must find a way to get away from that image, so that people understand the difference between pay that a MP receives, in the way any other employed person receives a salary or wage, and the money necessary for us to do our job for our constituents. The SSRB has proposed a change in terminology. This issue is important, and I support the proposal that the MEC should consider the arrangements for allowances. This matter is one that the MEC should take on board when it considers the SSRB’s specific proposals on allowances.
Michael Jabez Foster: With regard to perception, is not another problem the substantial incomes that some Members—not most—receive from outside the House? She mentioned career development in the House, and that is great, but surely career development outside the House is something different. Should we not have a system where there is a relatively generous allowance from the House, less whatever income is derived from outside?
Mrs. May: I will say only this to the hon. Gentleman: I have always taken the view that my job as a Member of Parliament is a full-time one. I choose to undertake my role in that way in order to give my constituents the attention that I feel I should.
The Leader of the House did not refer to allowances apart from the increase in the staffing allowance, which I also support. However, she made no other reference to the SSRB proposals on allowances. In a sense, it was right that she did not, because the matter is being referred to the MEC, but I wanted to comment on it. I know that it is difficult—we are all different Members with different sorts of constituency, and our experience is different. It is difficult to use the experience of just one Member to look at the issue, but I wonder to what extent the SSRB understands the issues relating to allowances.
It is important for the MEC to consider carefully the implications of the proposals. For example, on the issue of incidental expenses provision and office accommodation, I can see the SSRB’s argument that Members who keep staff in the House effectively get rent-free accommodation, whereas Members who have staff in constituency offices have to pay the rent for those offices. It says that it will attempt to balance that situation out, but it also proposes penalising MPs who have staff on the House estate. That will not create a level playing field. Moreover, the SSRB talks about an average rent probably being about £6,000 a year, and says how it should be possible to use that sum to rent an office of 800 sq ft. I had a very quick look at the website of one estate agent in Maidenhead yesterday and discovered that a 600 sq ft office would cost £12,000 per annum, not £6,000. The MEC has to consider that issue carefully.
Dr. Tony Wright (Cannock Chase) (Lab): I agree with almost all that the right hon. Lady is saying, but there is concern about allowances, some well judged, some ill-judged. If we are saying that there should be an independent procedure for determining salaries, surely there should be some independent element in the consideration of allowances.
Mrs. May: I have some fairly fixed views on allowances and what should happen to them. I would prefer to see the additional costs allowance abolished and made part of salary so that Members could make decisions. There are lots of issues related to that concerning what is taxable and the impact on pensions, but we should make some significant changes to allowances. I want to make two more brief points; I am conscious that a number of hon. Members want to speak in the debate.
Mr. Desmond Swayne (New Forest, West) (Con): That’s right.
Mrs. May: I am grateful to my hon. Friend for that.
The SSRB made a proposal relating to the audit of allowances, which I assume will be part of the MEC’s consideration of such matters. I chair the House of Commons Audit Committee, and the House must consider that issue seriously. I am not sure that the SSRB’s proposal is necessarily the right way forward, but the MEC will need to look at it and consider it carefully. On resettlement grants, the SSRB does not quite understand what is likely to happen if such grants are not suddenly made available to hon. Members who retire, or resign from their seats. Willie Hamilton is the name that comes to mind—the individual who stood for a seat that he was not going to get in order to qualify for a grant. The SSRB has perhaps not quite understood the full implications of what they are proposing.
I support the Government’s proposals on pay restraint, and I encourage other Members to do so. Albeit with concerns about Sir John Baker doing it, I support the concept of a review to find another mechanism for determining MPs’ pay, but there is value in the amendment of my right hon. Friend the Member for Penrith and The Border, suggesting that the House should consider that issue as well. This is an opportunity for us to change the approach taken to how we deal with our pay and the view that the public have of MPs. I hope that all hon. and right hon. Members will grasp that opportunity and, in due course, make changes that enable us to present a better image, with, I hope, the assistance of the media through their accurate reporting on what is done with regard to MPs’ pay and budgets.
1.49 pm
Tony Lloyd (Manchester, Central) (Lab): Let me begin where the right hon. Member for Maidenhead (Mrs. May) ended, with an exhortation to the media. I have no great hopes of ever winning the battle with the media, but it is nevertheless right and proper to establish a process in which the public have confidence. The public view of how we are paid is not the same as the media’s. Re-engaging with and retaining the confidence of the public matters to every Member of Parliament.
I speak as chair of the parliamentary Labour party. I have no doubt that some colleagues will dissent from what I am about say, but I know that hon. Members of all parties feel that we need to move forward in the spirit of the motion that the Leader of the House has tabled. I congratulate her, because she has put a great deal of effort into listening to the range of views that have been expressed, especially those in the parliamentary Labour party. She has devised a package
that we can support. Obviously, there are matters of emphasis that we need to get right today to ensure that when the matter reverts to the House in the middle of the year, we get everything right for the future.
There appears to be general agreement that it is right and proper for the Members Estimate Committee to consider allowances. It is important to establish the fact in the public mind that allowances are not Members’ pay. Members spend money in the course of their professional lives and reclaim it as expenses, as happens in many other walks of life. The Members Estimate Committee should consider the matter properly, and we should not simply be forced to go on the defensive because external bodies make representations about it. The reference to the Members Estimate Committee is right, with the exception that the Leader of the House made—again, it has general support—that we should increase the number of full-time equivalent staff to 3.5.
Those of us who met members of the police force yesterday, and those of us who represent public sector workers—indeed, all hon. Members—know that MPs racing against the Government’s public sector pay policy would be viewed with concern. Hon. Members in different parties may have different views on the validity of pay policy. However, we, as Members of Parliament who can set our salary today, must recognise that the public have views on public sector pay. We are, in a sense, bound by that. The 1.9 per cent. annual pay increase, leading to the 2.56 per cent. year on year increase, is right and proper and we should accept it.
Anne Main (St. Albans) (Con): Like me, the hon. Gentleman met members of the police yesterday. Many hon. Members are concerned about altering the pay structure, though I support breaking the ability to vote on our pay. The police reached an agreement in arbitration, but then it was changed—and it is that breach of trust that colours many hon. Members’ views today. We are worried that putting one system into abeyance but not replacing it could lead us down a dangerous path.
Tony Lloyd: I shall leave the hon. Lady to discuss police pay on another occasion. On our pay, the public should have confidence in what we do. Members of Parliament should also have confidence in the process, and I want to consider the new mechanism shortly. However, for this year, it is right to keep within the guidelines that the Leader of the House has proposed, which exist for others in the public sector.
Mr. Mark Field (Cities of London and Westminster) (Con): The hon. Gentleman’s comments are rather perverse. We criticise Government actions on the police—a no-strike deal was an integral part of an arbitration process—but we are now almost trying to make two wrongs into a right by ignoring the independent board’s recommendations on our salaries. Surely we should defend the notion of implementing the findings of an independent board properly, rather than simply grandstanding on police pay.
Tony Lloyd:
I do not know who is grandstanding. The hon. Gentleman may be the one who needs to explain to his constituents that there are two wrongs. I presume from that that he would like to push his pay
above the public sector norm. That is for him to discuss with his constituents. I shall simply deal with the specific issue of our pay.
The genuine action is the request to Sir John Baker to institute a review for the long term. The important points have already been established in exchanges in the House. I hope that the Leader of the House will take on board the legitimate concerns that have been expressed about the timetable, and about independence. I know from my conversations with her that she believes those matters to be of the utmost importance.
The timetable matters, because if it were to slip and the process lasted beyond the summer, all hon. Members would be unhappy. That would echo the delays in the publication of the SSRB report, and that is unacceptable. It would be equally unacceptable if there were no adequate timetable for consultation with hon. Members and consideration of Sir John Baker’s recommendations. We need to examine the details and ascertain whether they achieve what we all want.
We must ensure that genuine independence emerges from the process. Independence is a two-way street. Independent recommendations have been mentioned. We are not seeking independent recommendations but an independent mechanism; there is an important distinction between them. We need a mechanism that we believe to be independent and that we respect as being independent of Members of Parliament. It must also be independent of Government. Those of us who have been in the House under Governments of different complexions know that the heavy hand of—I shall not name individual Ministers, so let us say that it is the heavy hand of the Treasury that bears down on us. The mechanism should be independent of Members of Parliament, the Government and the Treasury. That is the prize that we must seek. In the past, I believed that I had voted for that independence—which was then, alas, snatched from us. We must ensure that we now establish genuine independence, which will not be subject to pressure from any side.
Sir Michael Spicer: Has the hon. Gentleman been told when the mechanism will be used? We have not been told that yet.
Tony Lloyd: I am not sure where the ambiguity lies. The Leader of the House made it clear that Sir John Baker will be asked to report specifically on the mechanism, which will begin to have an impact from 2010-11 onwards. I believe that that is the precise timetable—but perhaps I am missing the point. That is my understanding, but others may say that it is defective. My right hon. and learned Friend the Leader of the House is not attempting to dissent from my interpretation.
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