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Mr. Spellar:
My hon. Friend is quite wrong. That increase reflected several years during which, for a number of reasons—it was often because of the pay policies, under all Governments—we had fallen seriously behind comparable public and private sector jobs in the outside world. He is right to say that those large leaps do not favour us—as has been said, moving in line with the other indices would be a much better way of handling
things—so we possibly come to the same conclusion, but we do not necessarily have the same view of the history.
What do we need to do to resolve the situation so that we do not have to discuss this issue in the future? We have talked about the question of catching up. We need an index by which pay will be automatically uprated without a confirmatory vote. We must be clear that this is not about a review body examining various indices and coming up with recommendations. The situation should be—I think that there will be broad support in the House for this—that on, or shortly after, 1 April each year the Department of Resources, the old Department of Finance and Administration, would contact the Office for National Statistics or whatever the appropriate body to say that we are linked to such an indicator and detail the increase in the past year, and there would then be an automatic uprating. I do not care what the indicator is. It could be the retail prices index, the average earnings index, the public sector average earnings index or even the Chicago grain index. In a sense, that is less relevant than the fact that it needs to be something that the public understand and that is therefore clearly in the public domain and is not influenced by our particular actions. The public sector average earnings index might be the better one to use to try to provide a greater and clearer linkage.
I am not keen on a link to just one small part of the civil service, because organisational and structural changes could take place, which would then have a significant effect on us. There is one possible attraction of being linked to the senior civil service, because in my experience, senior civil servants always seem to have done well in finding ways through the pay policies of both Governments. However, in general, we would be better considering a basket of agreements and taking the median or another average. I believe that that is the offer that has been made to the police. I hope that Sir John Baker will take that on board. I also hope that when we come back to the matter before the summer recess, we ensure that that is clearly understood.
Mr. Mark Field: Is there not a concern that irrespective of whether we use a basket or some level of comparability, particularly one that involves public sector pay, where, directly or indirectly, we have all had an influence, the media will still raise their hue and cry whenever a figure is announced? Even if one of those independent mechanisms were properly implemented and all the concerns raised in this debate were addressed, the issue would still become a media hue and cry. Therefore, it is for us, as Members of Parliament, simply to bite the bullet and to drive forward the right sort of pay package, given that we believe in the idea of a sovereign Parliament. I have a lot of sympathy with everything that the right hon. Gentleman is saying, but I fear that we would be back to square one the moment such a mechanism comes into play.
Mr. Spellar: A sovereign Parliament would make a decision before the recess that our pay increases should be linked to a particular indicator. At some stage in the long distant future, if that broke down, something would have to happen to it.
In a sense, there is a mechanism to deal with failure, and we have had one failure with the links to the senior civil service. That mechanism is that Sir John Baker
should consider forming a new body. We must make it clear that such a body should not be designed to make endless reports on pay but to deal with any failures in the system.
There is an unspoken question about who will decide whether there has been a failure. Will it be the House of Commons and the MPs, or the Treasury? Nothing is perfect about any form of pay-setting. However, such a solution would get rid of many of the problems and difficulties that we face, particularly when we have to vote and argue about our pay. That is a particular problem if it is linked to a factor over which we do not have any direct influence, whether it is an index based on prices or earnings—that is why I have suggested a fairly wide index.
It is important that a clear message goes back from all parties, including the Government, that the increase should be implemented according to the percentage increase that has taken place. That is why the mechanism is so important, as it effectively takes the decision out of the hands of Government and puts it into those of the Department of Resources—which used to be known as the Department of Finance and Administration—which will operate under the directions of a resolution of the House.
My final point has been made by a number of other hon. Members, but it is worth reiterating. This has dragged on too long. The SSRB was commissioned to produce the report in July 2006. It reported in July 2007 and we are debating the report in 2008. I urge the Leader of the House and the Deputy Leader of the House, when she replies, to be clear and explicit that the timetable for the report will be that it should be received, published, debated and voted on before the summer recess.
Sir Michael Spicer: Again, this is a question of timing, which is essential. May I ask the right hon. Gentleman the question that I asked the hon. Member for Manchester, Central (Tony Lloyd)? Does the right hon. Gentleman have any insight about when the measures will all be implemented? Does he know when the Government intend to implement them? Has he been given any commitments that we have not yet been given?
Mr. Spellar: There were a number of indications from the Leader of the House that she hopes to get the report received, published and voted on before the summer recess. I want the report to be received by the end of May, as a preference, and by the first week in June as a necessity. It should be published at that stage and debated and voted on during the end of June or beginning of July.
Sir Michael Spicer: That describes the voting procedure. However, when will the new mechanism be implemented? In which year will it be implemented? Has the right hon. Gentleman had any assurances about that?
Mr. Spellar: There are two issues that we must disentangle. The first is the question of the next two years. I understand—the Deputy Leader of the House can confirm this when she sums up—that Sir John Baker will be asked to produce a report on the next two years and then a mechanism, or, in other words, an index, to take us beyond that period.
Simon Hughes: That may indeed be the case, but it is certainly not what the terms of reference say. The implication is that Sir John will come up with a mechanism for immediate implementation.
Mr. Spellar: Yes, but a mechanism can be twofold. The first element is the need to deal with the immediate issue, which also deals with the question of catch-up. The other element would be an automatic linkage that would operate once we had established the base. I hope that Sir John Baker’s report will separate those two strands and establish the base, after which we can consider the rate of future increases. That will allow us to get back to representing our constituents, legislating and debating the issues facing the country. I think that hon. Members of all parties do that job rather well.
2.55 pm
David Maclean (Penrith and The Border) (Con): It is a privilege to follow the right hon. Member for Warley (Mr. Spellar), with whose speech I agree entirely.
All colleagues have begun their contributions by congratulating Sir John Baker and the SSRB on the report that has been produced, but it has been noted already that one or two little difficulties remain, especially with those parts of the report that deal with allowances. I suspect that more difficulties will be highlighted as the debate goes on.
May I suggest, in the nicest possible way, that the SSRB has not grasped some of the intricacies of our allowance system? The result is that there are difficulties with what is being proposed in the report. I cannot comment on behalf of the Directorate of Resources—what used to be called the Fees Office—but I suspect that its excellent staff would encounter enormous difficulties in implementing and enforcing some of the recommendations that the report makes about constituency offices, space allocations, costings and incidental expenses provision—IEP—changes for some colleagues.
The proposals are almost unenforceable. We cannot have transparency in our allowances if we cannot devise a system to enforce the changes, or understand what the SSRB is recommending. The Leader of the House is therefore right not to implement the recommendations verbatim and to refer them to the MEC. That Committee is supported by the Advisory Panel on Members’ Allowances that is chaired by the right hon. Member for Warley, and it will be able to sort out what amounts to a bit of a mess in the SSRB report.
Who are the dangerous men and women on the MEC who have been given that responsibility? They are exactly the same people as those who make up the House of Commons Commission. They meet at the same time, but the agendas are different: sometimes a person is a member of the MEC, at others a member of the Commission.
The MEC is chaired by Mr. Speaker. Its next most distinguished member is the Leader of the House, followed by the shadow Leader of the House, the hon. Members for Middlesbrough (Sir Stuart Bell) and for North Devon (Nick Harvey) and myself. The MEC does not leak, so I cannot reveal what we discuss, but I can say that we meet regularly. The Leader of the
House has entrusted us with making sense of that bit of the SSRB report that deals with allowances and, in conjunction with the right hon. Member for Warley, that is what we will try to do.
We will be served by some incredibly clever people in the Directorate of Resources. I have had the privilege of serving on the MEC and the Commission for two years, slightly longer than the Leader of the House. When I say that, I am not being arrogant: I simply mean that I have had the privilege of seeing more papers produced by the men and women in the Directorate of Resources than she has. I have been delighted by their excellence, and can say that the MEC is exceptionally well served.
If the House gave the MEC authority to produce its own suggestions for a suitable pay and allowances mechanism, we would rely heavily on the Directorate of Resources staff, and we would look to the Library’s research department for background information. We would also lift some stuff from the SSRB report, given that much of the relevant work has been done already and makes sense. It is possible that we could produce some reasonable suggestions for the House’s consideration.
If the recommendations in any memorandum, report or little review that the MEC might prepare turned out not to be sensible, colleagues would be very quick to bin them and our names would be mud. However, I believe that we could produce some sensible suggestions, as we might be able to consult hon. Members of all parties more thoroughly than the SSRB.
Stephen Hammond: I listened carefully to what my right hon. Friend said and he is absolutely right. Does he think that the Members Estimate Committee would be overburdened if it were also to consider recommendation 29?
David Maclean: I will leave it to my hon. Friend to convince the House that the Committee should be given that task, too. I think that our burden will be fairly heavy as it is. There will also be a heavy burden on our officials, who will have to help us untangle some of the allowances difficulties created by the SSRB report. We would probably be at maximum capacity if we took on the responsibility that my hon. Friend mentions, in addition to having to reach a view on a mechanism for determining MPs’ pay, so that we did not have to vote on the issue every other year.
I have not set out terms of reference. I would say to the House, “Trust us.” We on the MEC and the House of Commons Commission do not need to tie our hands with terms of reference. We want to bring forward proposals on an independent mechanism for the House to consider. We would not tie our hands with principles that I think are wrong. The right hon. Member for Warley commented on some of the principles that the SSRB set out on page 7 of volume 1 of the report. The SSRB says that it is tied to the fundamental principle that
“Pay should reflect levels of responsibility rather than workload”.
On page 16, the SSRB reassess MPs’ work load, which it says has increased steadily. We accept that that is the case. Expectations of what MPs can achieve for
their constituents are rising, and e-mails come in all the time. The work load is increasing. It goes on to say:
“To some extent the problems of workload are within MPs’ own control.”
With all due respect, it has confused work load and hours. Our work load is increasing all the time, but our hours have stayed fairly static, at 60, 70 or 80 a week. I could reduce my work load. I could, on Armistice Sunday, refuse to go to the service in Carlisle in the morning and the one in Penrith in the afternoon. I could refuse to do Saturday surgeries, and could refuse to go to council meetings on a Friday night. We could reduce our time commitment to 40 hours a week, but would that be the responsible, sensible thing to do? Would it be serving our constituents if we refused to do all the things that we have to do that take us 80 hours a week when the House is sitting and 60 hours a week when it is not?
Mr. Swayne: Mr. Speaker has informed me that he has not selected my amendment for debate; might we not, in a similar way, write to our constituents and tell them that unfortunately their letter was not one of those selected for reply?
David Maclean: When I first came to the House in 1983 there were stories about some of our illustrious predecessors, from both sides of the House, who did not believe in holding surgeries. There is a wonderful story—perhaps it is apocryphal—about a Member who would telephone his constituency association and say, “I shall be making my annual visit to the constituency in March. Please lay on the cocktail party.” Those days died out 20 or 30 years ago, and rightly so. The service that we are now expected to give is heavy. There is no shortage of people who are willing to become MPs and take on a work load of 60, 70 or 80 hours a week, but I believe that the pay should reflect that burden.
In the second section of the report, the SSRB and PricewaterhouseCoopers set out some comparators. On page 17, the total package for MPs—our total reward, including pensions—is compared to that of a head teacher, a police superintendent, a senior civil servant at grade 1, a county council second-tier executive, an armed forces colonel and a director of a health trust. Our salary comes out as 90 per cent. of theirs; in some cases, it is 83 per cent. When the comparison is with those in small companies, the figure is 58 per cent. However, that is on the assumption that we are doing a 40-hour week, as many people in those professions are.
Can anyone imagine the outcry if the House or the Government had said to doctors, “We’re going to fix GPs’ salaries, and there’s going to be an assumption that they’re doing only 40 hours a week”? We know that they work excessively long hours—60 or 70 hours a week—and their pay reflects that. Conversely, could we say to the chief executive of a small district council, who, it seems, is on £81,000, “We’ll pay you £81,000, but dear chap, you’ll no longer work 40 hours a week; it’s going up to 70”? There would be an outcry.
So I believe that the SSRB has misled itself from the beginning in fixing as a fundamental principle that it does not consider the hours that MPs work or take the
work load into account. If that were taken into account in a review, we may come out with slightly different comparators.
Sir John Butterfill (Bournemouth, West) (Con): Does my right hon. Friend accept, as he will hear when I speak later in the debate, if I am able to catch the Speaker’s eye, that the situation is rather worse than that? The costs, as assumed by SSRB, of our pension scheme, as assessed by Watson Wyatt, contain a number of fundamental and serious factual errors by Watson Wyatt.
David Maclean: My hon. Friend is respected in all parts of the House for the tremendous amount of work he has done in chairing our pensions committee. No one can speak with more authority on House of Commons pensions than he can. I hope his words will carry weight in all parts of the House.
I quote the examples from the report not because I want us automatically to link our salaries to them, but to show where I believe the SSRB has slightly misdirected itself. I hope that if we on the MEC can do a review, we would not tie our hands in such a way, we would consider the work load and the hours that we work in addition to the other factors, and we would look at a basket of comparable jobs in the public sector and the private sector, and not limit ourselves to the basket that is included in the report. There is a range of other comparators that could be included in the basket. From what I have seen of the staff of the Fees Office and the Directorate of Resources and the expert researchers in the House of Commons Library, I believe that we could come up with recommendations as good as, if not better than, those that Sir John will produce.
And there will be something else. Sir John will make his recommendations to the Government. That is fair enough, and I accept entirely the assurances of the Leader of the House that the Government will not sit on the report for six months this time; it will be brought quickly to the House. If we, the Members Estimates Committee, had given the stamp of approval to bring forward proposals to the House today, we would be reporting to all Members—to the House. At some point it would be up to the House collectively and all Members to grasp the nettle of what we had proposed. If all colleagues thought that what we proposed was nonsense, it would soon be binned. If they thought it was right, we could go ahead with it.
I know that my amendment refers to an independent pay review body. I am not tied to that. I had to submit my amendment rather hastily. If I were to redraft it, I would refer to an independent pay mechanism. That is what we must seek to achieve—a mechanism that could be linked to a basket of salaries or something else, and which would be uprated each year by the Fees Office. The Directorate of Resources would look at the comparators and the mechanism and automatically adjust it. If at some future date it went all askew, the House would have to grasp the nettle and do something about it. Any independent pay review should report to the House, not the Government. That takes the Government’s hand out of the matter.
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