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My colleagues want to be assured that the timetable is robust and includes adequate scope for consultation and consideration of Sir John Baker’s proposals, and that those proposals will establish a robust and independent mechanism. There is a major prize to be gained by all hon. Members, because for the first time, we will be in a position to tell the public that Members of Parliament are not engaged in some ignoble process of fixing their salaries. Our salaries will be determined for us, as happens to people in different walks of life who have no direct control over their pay. Some hon.
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Friends may argue that we should have a negotiating process, and that otherwise we would perhaps be ceding something that we would never cede on behalf of our constituents. However, establishing independence is vital, and we now have a chance to grasp that nettle.

The other point that I want to establish is as follows. There is an element of uncertainty to the process, because we are moving the necessary decision making from our debate today, which normally would have been conclusive, to the debate in June, or thereabouts, on decisions that we cannot yet precisely anticipate, because we cannot anticipate what Sir John Baker will do. There is inevitably an element of risk in that process. There is, however, a fail-safe, because the House has the capacity to reject, either in whole or in part, any recommendations that Sir John Baker comes up with. In that sense, it is better to ask Sir John to review those mechanisms independently, rather than keep the process within the confines of the House. In the end, if part of the process is about generating longer-term public confidence in what we are doing, as well as confidence among Members of Parliament, an element of externality in relation to our own pay will inevitably be necessary.

Richard Ottaway: The hon. Gentleman says that the House may choose to reject Sir John Baker’s recommendations, but if we accept the Government’s proposal to abandon the 1996 resolution, we are left with absolutely nothing. Is that not a good illustration of why we should keep the 1996 resolutions until such time as we can agree on alternative proposals?

Tony Lloyd: No, that is not right, for this reason. I understand the hon. Gentleman’s point: if we get rid of the 1996 mechanism today, there will be nothing in place until we see the report. However, it will be in the gift of the House at that stage to delete all Sir John’s recommendations and substitute the 1996 mechanism—or, indeed, anything else. It would be beyond belief that the House would be left with no mechanism at all for paying Members of Parliament. That decision is in the gift of all hon. Members, in all parts of the House, and I assure Opposition Members that I will want to go for my summer break from this place in the knowledge that there is a pay structure around which my future is secure. The hon. Gentleman’s fears on that point are therefore unfounded.

In conclusion, I am grateful to the Leader of the House for the work that she has done. The package before us has already generated support throughout the House. It is important that we move forward from that. The timetable will inevitably cause concern if there is even a remote suggestion of slippage, so we cannot allow for any. That timetable must allow for proper consultation with hon. Members before we take a vote. That vote must establish, once and for all, a mechanism independent not only of Members of the House, but of the Government and the Treasury. If we can do that, at last we will have done something worthy of the House and of the British people.

2.3 pm

Simon Hughes (North Southwark and Bermondsey) (LD): We might find this debate a bit embarrassing, but it is one that we properly need to have. It is good that it has been entered into in a spirit of openness and
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engagement, among the different points of view throughout the House. This will of course not be the last such debate, by definition. There will be at least one more debate when the Government’s review commission comes back, and that review will not deal with staffing and office issues, which we will come back too. To think that the issue will fall off the agenda is therefore wrong. None the less, it is important now to give a steer in the right direction.

I have never had a big problem with the principle that public sector workers—I have always considered myself to be a public sector worker in this job, paid by the public to do a job for the public—could and should have their wages or salaries assessed and decided by an independent process. However, if one takes that view—I am very comfortable about that—it should be a consistent view across the public sector, not a “take it here and leave it there” view. That is why, when we have referred Members’ pay to the Senior Salaries Review Body in the past, I have always taken the view that we should automatically adopt what it recommends. That is why the question to the Leader of the House and the shadow Leader of the House about whether Governments in future will adopt what is recommended—to which I shall return—is so important.

Colleagues and I have not only taken the view that I have set out, but have in recent months taken the view that when an independent body said that nurses in England should be paid without staging, that should have happened. They are public sector workers of great importance and should not have received a staged pay increase when the recommendation was that the increase should be paid all in one go. Likewise, we took the similarly clear view that when police pay negotiations went to arbitration and were decided, the arbitrated amount should have been implemented.

That is a consistent view, and I am sad that the Government have been inconsistent. Of course I understand the constraints of keeping inflation down and ensuring that the economy does not get out of control; but that will not be significantly impaired if we have mechanisms to take it into account, so that we can come back and recommend certain increases, whether for nurses, the police or Members of Parliament. I would have been happy had the Government said, “Here’s the SSRB—we’re just putting it on the table and asking you to vote on it.” That would have been a perfectly satisfactory outcome.

Mr. Mark Field: I am listening to the hon. Gentleman with great interest, and I must confess that I agree with him very much. Matters related to pay are painful, but equally, do they not go to the heart of what it means to be a sovereign Parliament? If we deny sovereignty in relation to our pay, difficult matter though it is, will it not then be rather difficult for us not to have sovereignty taken away or denied in other matters?

Simon Hughes: That is why I have found pay uncomfortable, but never a matter that we should say it was not our responsibility to deal with. If we are a sovereign Parliament, this matter must go somewhere, and it ends up coming to us. That is why constitutional issues are raised when the Leader of House says that, with wide support, she has asked Sir John Baker to
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examine whether we can have an independent mechanism. Some countries have managed to address those issues. My guess, anticipating the second Baker report, is that he will make it clear that although we can, as it were, make the process independent in future, we will not be able to take away from ourselves the right to retrieve it if we want to. I cannot see that that would be possible or compatible with the constitutional position of the UK Parliament, so the hon. Gentleman—my parliamentary neighbour—is right.

My second general point is that whatever the case, people would obviously prefer a system even more independent than the current one—and I support that, too. That means a process that examines what the best comparator should be, and then triggers it automatically. But here lies the rub: if we go down that road, when the report comes from the new body—not the Baker review, but whichever body it suggests setting up—or when the formula is worked out saying that we will be compared to pensioners, the average wage, the average civil servant or whatever, the Government must undertake automatically to implement that. The question that, with respect, I would say that the Leader of the House and the shadow Leader of the House ducked was whether they could guarantee that either the Baker report, when it comes, or any future reports issued as a result of the process that Baker recommends, would come without Government interference. Bluntly, unless we receive that assurance, we will be back where we were.

That is why I asked the right hon. Member for Maidenhead (Mrs. May) the express question that I did. Unless the report is published to the world on the day it is published to the Government, it will always be open to the Government to hold it to themselves, to spin, to leak and generally to prepare the ground—as they have done this time—before we can see the blessed thing. That is unacceptable, not only from the point of view of Members of Parliament but for all my constituents, and anybody else who takes an interest in public affairs.

Mr. Spellar: It might be helpful if we clarified what is being proposed; otherwise we might be going down a blind alley. As I understand it, the Government are asking Baker to examine the next couple of years and then to consider a mechanism that would, in effect, be an automatic indicator, which the Department of Finance and Administration would get from the national statistician or whoever else and would then implement. The other body would deal only with that mechanism, should there be a situation similar to the one involving the civil service pay link breaking down, and should there need to be a reassessment and a new indicator. I hope that I have got that right. If so, some of the concerns that are being raised by the hon. Gentleman—although not all of them—will be addressed. We are not talking about a report coming back; we are talking about an indicator, and that matter is in the public domain.

Simon Hughes: I understand the right hon. Gentleman’s point, and I hope that that is where we are likely to get to. I hope that we adopt a system with a trigger that is set externally, without anyone having to look at it all again, except if the comparator did not work, for some reason. However, that has not been proposed here, and
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it is not mentioned in either of the Government’s written statements. Therefore, it is a deduction that might have come from informed conversations with the Leader of the House or from elsewhere. We do not know that yet, however, because the Baker report has not come back to us. However, I am assuming that that is the road that we are going down. Such a system would reduce some of the risk of Government interference, for exactly the reason that the right hon. Gentleman gave. I accept that.

Dr. Tony Wright: We are getting into some real complications. It might seem straightforward to say that we will invent an independent mechanism to take care of the matter, but the fact is that there is no reliable comparator for the work of a Member of Parliament. It is a job that requires no formal qualifications, and there is an over-supply of people who want to do it. All that we are saying is that we want the judgment—it will involve a judgment, not a technical comparator—to be made by someone else. What we cannot work out, however, is who that should be.

Simon Hughes: There lies another rub. The hon. Gentleman is right. I believe that it is better for us to accept the Government’s proposal for this year. That would involve us asking our colleagues to accept pay restraint for this year in line with other public sector workers, and I support that course of action. However, we should not then leave a blank sheet—a carte blanche—thereafter. It might not be as easy as some might think either for Sir John Baker to come up with a report that commands the confidence of the House and of the public, let alone of the press, or for us to agree on what we should do.

I heard what the Leader of the House said earlier. Of course she wants us to be able to get on with this. The chair of the parliamentary Labour party, the hon. Member for Manchester, Central (Tony Lloyd), also expressed his proper concern that we should ensure that we did the work between the end of May and the end of July. It all got a bit vague, however. The written statement referred to the end of May, but it could be the beginning of June, and it is likely to drift on. I therefore urge colleagues at least to give us the protection of having a system in place for next year, so that we can do the job that the hon. Member for Cannock Chase (Dr. Wright) alluded to, and get this right. It might not be easy to find a comparator, although we could look at the New Zealand experience.

My preference is therefore for the amendment tabled by my hon. Friend the Member for North Devon (Nick Harvey), the right hon. Member for Penrith and The Border (David Maclean) and others, which would at least lock in a system for next year and set a top whack of 1.9 per cent. so that nobody would think that we were building a system that would give us a great bonus. That would give us a safety net while we work these things out.

Mr. David Heath (Somerton and Frome) (LD): I agree with my hon. Friend that it could be difficult to find a comparator that works year on year. That is why I am attracted to the idea of establishing an appropriate
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base level. I am not sure whether we have arrived at that point or whether the matter needs further work. We then need to establish a simple uprating mechanism that the general public will understand. It must relate not to some grade in the civil service but to something as simple as the old-age pension or some other average denomination that will enable the public to understand why the salary of Members of Parliament has risen.

Simon Hughes: I absolutely agree with my hon. Friend, and I see the hon. Member for Sunderland, South (Mr. Mullin) nodding in agreement as well. He has taken a strong view on this matter. My hon. Friend the Member for Sheffield, Hallam (Mr. Clegg) has argued that his preferred option would be the state pension, because it is simple and because everyone out there knows what the state pension is— [ Interruption. ] I am not saying that it was his idea. The hon. Member for Sunderland, South has argued that case, and I am saying that my hon. Friend the Member for Sheffield, Hallam also supports that argument. He also supports the proposal that we look at the matter independently to find the best simple comparator that will work, if such a thing exists. Obviously, the pension is a front runner among the options, but there might be others. In the end, we must choose something that a tabloid newspaper, the woman in the street or anyone else can understand, and that we can justify and explain in a sentence without having to give a lecture on the subject.

Mr. Mullin: The point that the hon. Member for Somerton and Frome (Mr. Heath) has just made is exactly right. Where all this has gone wrong in the past is that the independent bodies that have been set up to assess what we are worth have, from time to time, awarded us—or recommended—whopping increases that are utterly out of line with what is going on in the real world. That has happened under Governments of both persuasions, and they have quite rightly felt obliged to intervene and put a stop to such madness. My fear is that the Baker review might end up doing the same thing. It might be terribly independent, but if its recommendation is wholly unrealistic, we are going to find ourselves back where we started.

Simon Hughes: I share that view entirely; the danger is that what has happened in the past might happen again. If there is a recommendation for a low increment, the Government might say, “Yes, thank you very much”, but if there is a recommendation for a high increment, for whatever reason, the Government could intervene and say, “No, thank you very much. Not now.” That cannot be acceptable.

Mr. Maples: I do not think that the hon. Member for Sunderland, South (Mr. Mullin) is right. The reason that a whopping great increase, as he put it, is recommended every so often is that increases have been suppressed by the Government for the previous four or five years. That is what has happened on every occasion. If we had a mechanism, for example, for implementing whatever increase had been applied every year to public sector salaries—2 or 3 per cent., or whatever—this issue would never arise. We would never have a really bad increase, and we would never have a really big one. I think that we, and the public, would be satisfied with that.


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Simon Hughes: The two points of view are not contradictory, but I agree with that argument. The report makes it clear that, in the past, there have been recommendations for a catch-up and that, because they were so big, the Government have not implemented them. Unless we have a regular annual increment, we shall always find ourselves in that position.

I also strongly support—and urge Members to support—the idea that the Members Estimate Committee, under Mr. Speaker, should also do its work on this matter. I do so for two reasons. One is that the House, with all its experience of what it all means, can look at the matter. The other is that the staff of the House, who have all the experience of administering the system, can give the benefit of their wisdom and experience and all the money that we have paid them over the years. It would not be inconsistent for us to have an independent review as well as doing our own work on the matter. I absolutely support the view expressed in the amendment tabled by the right hon. Member for Penrith and The Border that we should give authority to the Members Estimate Committee to do a parallel piece of work, so that we can have that in front of us as well.

Mr. Mark Field rose—

Simon Hughes: Let me carry on for a minute. I might come to a natural point at which the hon. Gentleman can intervene.

I support the Government’s recommendation on pensions. Other Members might want to elaborate on that subject, but I do not propose to do so now. My final point is on staffing, offices and allowances, and I shall start where the right hon. Member for Maidenhead started. I want to say, as explicitly as she sought to do, that this does not involve money that we are given to allocate either to ourselves or to others. It is not an allowance that I can choose to spend or not. Money goes from the taxpayer into the Fees Office, and from the Fees Office directly into the bank accounts of our staff, without our touching it. All that we do is agree how much of the total amount available should go to them.

The sum that we are talking about is currently £90,505 a year, and that is meant to pay for the salaries and national insurance contributions of three people. Some of us employ more than three people, however, and it does not take a genius to work out roughly what people are paid. They are not paid huge sums for the job that they do, given the importance of their job of looking after constituents such as yours, Madam Deputy Speaker, and mine, who come to us with evictions, housing and benefit crises on a daily basis. They need to be decently looked after. That is why I absolutely support going down the road, as the Government recommend, of an increase of half a person in the potential number we can employ—taking it to three and a half people, as it were. As it happens, I employ four people at the moment and others who assist.

Let me add another postscript. It is not proposed that the three and a half people should be paid at the same rate as now, because the increment provides for a few thousand pounds extra over the current arrangements. For the record, the recommendations
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are that for three and a half staff employed outside London the total staff bill should be £96,630, which would go up to £102,650 when all the staff are in London.

I hope that colleagues will vote for my amendment (b). The Leader of the House was good enough to say that she intends the proposals to come into effect from the beginning of the new financial year, which I accept, but I want us to lock that in so that we can plan ahead, knowing that in the new financial year we will be able to pay for three and a half staff with funds provided from the taxpayer via the Fees Office. That is not unreasonable— [Interruption.] For London, yes.

Andrew Mackinlay: I am a bit nervous about the London dimension, partly because of my geographical position. My staff do not work exclusively in the constituency; some just work in the Palace of Westminster. I am a bit nervous that whoever reviews the position is going to get in an awful mess and perhaps be unfair, not to me but to my staff. It does not work so neatly for Members in my geographical position, who are just outside the Greater London authority area.

Simon Hughes: I absolutely understand that. That is why I support the proposal that the administration of this matter, including its interpretation, should go to the Members Estimate Committee, as recommended in the motion. The proposal should be subject to that process, but it should not be subject to a delay in respect of the year to which it applies. There is no significant difference between the hon. Gentleman and me. The decision should apply from 1 April, but the details of definition need to be worked out fairly.

The hon. Member for Cities of London and Westminster (Mr. Field) rightly identified that all the recommendations bar one have been dealt with. Three relate to staff and we are asked to agree to them, while we are asked to refer the rest to the MEC and other deliberative bodies. One, however, has been dropped and eliminated. I declare an interest in the matter, but I cannot help it because I am an MP representing an inner-London constituency.

Presently, inner-London MPs and outer-London MPs may opt for a London allowance in line with many other London public sector workers, as opposed to an alternative that in theory is more generous. The Senior Salaries Review Body report says under the heading of “London Supplement” in paragraphs 5.58 and 5.59:


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