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Nick Harvey:
I entirely agree with the right hon. Gentleman, and this is why. The SSRB has just sent us a detailed report covering all aspects of hon. Members’ allowances—I say “just”, but hon. Members will know
what I mean; it actually sent it to us last July. There are some good ideas in that report and the motivation for making many of the recommendations in it was entirely laudable. Regrettably, however, some of them are slightly less practical than they might be, and have all sorts of unintended consequences that cannot possibly have occurred to the authors of the report.
For example, having totted up what the changes in the office rental and staffing arrangements would mean for me, I discovered that I would lose £12,400 a year from my allowances. I do not believe that it was the intention that the SSRB would have that impact on anybody’s budgeting, but it did. The SSRB ought to have some objectivity and independence; it commissioned people to look at things in markets out there in the real world, and produced a report with some good ideas, but also with some glaring anomalies, which the MEC will be required to consider. If that report is the only one before us when we come back in July, there is every risk of further complications, unintended consequences, inaccuracies, anomalies and other inconsistencies, which will put the House in a difficult position.
If that report is the only proposition before us, we will again be presented, on a “take it or leave it” basis, with something that we know to be riddled with flaws. It would make far more sense if the MEC, which can see the flaws in the current proposals on allowances, were allowed to put in its tuppenceworth on the subject of a pay system for the future, because when we hold that debate, it would benefit the House to have that alternative before us. I cannot comprehend why there could conceivably be thought to be a problem with that.
In general, there were many suggestions in the SSRB report that we can take forward. I have stressed that the MEC is only too willing to try to iron out some of the problems. We have heard from Members on both sides of the House what some of the practical problems are, and we will earnestly use our best endeavours to put them right, and to come back to the House at a later date with a workable set of proposals on which Members can take a view.
3.40 pm
Mr. Chris Mullin (Sunderland, South) (Lab): I hope that every hon. Member will support the Government’s motion to keep our pay increase in line with those for the rest of the public sector. That is essential for our self-respect. If we do that, we can then look the police and other public servants in the eye and say that what is good enough for them is good enough for us. If we do not, I fear that, as a profession, we risk sinking even lower in the public’s esteem than we are at the moment, and we would have only ourselves to blame.
On the question of linkage, I think that everyone agrees that it is a matter of perennial embarrassment to most of us that we are called upon to determine our own remuneration. In speech after speech, going back more than 30 years, hon. Members have lamented that fact and called for the matter to be taken out of our hands, yet here we are, 30 years on, and it is still in our hands. The difficulty with all previous attempts to index our pay is that they were complicated and completely incomprehensible to the outside world. The 1996 motion, for example, described an increase by
“the average percentage by which the mid-points of the Senior Civil Service pay bands having effect from 1st of April of that year have increased compared with the previous 1st of April.”
That is not very comprehensible even to us, who obviously take more interest in our pay, let alone to those in the outside world.
Another difficulty has been the one that I mentioned in an intervention on the hon. Member for North Southwark and Bermondsey (Simon Hughes), namely that, every so often, the SSRB or its equivalent has recommended an increase that was way out of line with what was going on in the rest of the world. That has happened under Governments of all persuasions, and they have felt obliged to intervene and impose, or attempt to impose, some sanity.
It is my contention that there is no need to look for a complicated solution when a simple one is available. So, in July 2001, in the hope of putting an end to this nonsense once and for all, I proposed that future increases be increased by the average of the annual awards to nurses, teachers, doctors and dentists. As it happens, if that had come to pass, we would all have done rather well, as those professions tend to do well under Labour Governments, although not all of them are prepared to admit it. However, my proposal was dismissed out of hand by the then Leader of the House, Robin Cook, with the result that we yet again find ourselves back in the same old mess.
Today, my right hon. and learned Friend the Leader of the House of Commons is proposing, with the best of motives, another review. I fear, however, that after much learned deliberation, such a review is likely to saddle us with yet another unworkable solution. In an effort to avoid going round the same old track again, I tabled an amendment—which, regrettably, has not been selected—proposing to link future salary increases to the state old-age pension, thereby permanently and irrevocably linking our fortunes to those of the humblest of our constituents.
Mr. Ken Purchase (Wolverhampton, North-East) (Lab/Co-op): My hon. Friend mentioned his previous proposal for a pay formula that would have resulted in our pay being linked to certain professionals who have done rather well. He now suggests that our pay increases should be linked to those of pensioners. Does he believe, however, that it would be reasonable for the Government ever to forgo the right to intervene in MPs’ pay, or for this House not to recognise its role as a sovereign body? In order that our pay increases, whatever the circumstances outside, should actually reflect what is politically possible rather than being linked to dentists, doctors or whomever— I hope that my hon. Friend will take this in the spirit in which it is given—we really need to understand that the Government have to govern, and they have to have the right to intervene wherever and whenever that is necessary.
Mr. Mullin: I would hope that we could get ourselves into a position where the Government would not feel obliged to intervene every time; but perhaps we cannot, in which case we are doomed to go on having these debates every four years for eternity.
I want to make it clear that I am not wedded to any particular formula. To my pleasant surprise, I found
myself in general agreement with my right hon. Friend the Member for Warley (Mr. Spellar), who is no longer in his place, when he suggested a number of different alternatives: indexing to the average increase in public service wages, for example, though he lost me on the Chicago grain index. Whatever formula we alight on has to be readily comprehensible to those outside this place. It also needs to be easily defensible so that we can look our constituents in the eye, which we have not always been able to do in the past.
Sir John Butterfill: We did once have a link with a certain grade of civil servant and it was suggested that our pay should go up automatically in line with that. The difficulty that has arisen is that there is now a basic increase for civil servants and then rewards for performance on top of it. That means that linking us to the base civil service increase, as we were last year, giving us 0.66 per cent., does not reflect the reality of the situation.
Mr. Mullin: I am not in favour of our trying to identify yet again another civil service grade to which we can be linked, because it has got us into all sorts of difficulties in the past. On one occasion, I believe that the grade was abolished, so we found ourselves promptly back where we had started.
Let me repeat that I am looking for something that is easily defensible and easily explicable to our constituents in the outside world and that will not get us back here debating the subject every three or four years as we are today. I fear that Sir John is going to come up with something—I am sure it will be independent—that either the Government will feel obliged to interfere with or will not be viewed as credible in the outside world.
It fills me with despair to think that the first of these debates I participated in was in 1987 and that it was exactly the same as today’s: everyone was lamenting the fact that we were all here again discussing our own wages and everyone had their own complex formula for sorting it out. Nevertheless, here we are, 21 years later, going through it all again. I read the debate of 1975 and there was Edward Short at the Dispatch Box, talking about a formula linked to a civil service grade—but here we are yet again. I want to see us putting a stop to all that and doing something simple and easily explicable to the outside world. When the Deputy Leader of the House concludes the debate, I would like to hear some assurance that in their evidence to the review the Government will emphasise to Sir John the need for a formula that is simple, workable, easily understood and morally defensible.
3.48 pm
Mr. John Maples (Stratford-on-Avon) (Con): I think that I entered the House a little later than the hon. Member for Sunderland, South (Mr. Mullin), but I remember that one of the very first debates that I attended in 1983 was about Members’ pay, and exactly the same issues that have been rehearsed today were rehearsed then. We sensibly decided on that occasion to link pay to a grade in the civil service. I did not think that it was particularly ambitious to link our pay to 78 per cent. of that of a principal officer—just one above the fast-stream entry grade—but, nevertheless, it resolved the problem for quite a long period.
I want to talk about two issues. One has had a lot of attention and the other has not, so hopefully I can shorten my speech. The one that has had a lot of attention is what the uprating mechanism should be. As the hon. Gentleman said, I personally think that it should be simple and comprehensible, not just to us but to our constituents. I would have thought that it should be something like the annual percentage increase in public sector pay. The Government are concerned that our pay must take account of their public sector pay policy, and that mechanism would. The Government are in one way or another negotiating if not setting public sector pay, and we would be one year ahead of it—or behind it, whichever way one looks at it. I believe that if our uprating on, let us say, 31 March every year were linked to the average increase in public sector pay over the previous 12 months, that would take the problem away.
The Government, whether Labour or Conservative or anything else, must keep their hands off this matter. When they interfere, they simply make the problem worse for themselves. They lower the increases for three or four years, which they think helps. Actually, I do not think that the press care; whatever we do, they will be unhappy with us. Whether it is 1 per cent. or 10 per cent., we will get the same bad publicity. If the Government interfere to suppress annual pay increases—I hope that the Deputy Leader of the House takes this on board—they can do it for four or five years, and then we will insist on having a whacking great catch-up increase and it will look awful. Were the increase 2.5 to 3.5 per cent. a year, or whatever the general rate of increase in the public sector was, that would satisfy us and the public, and would not create these horrendous problems. Linking it to public sector pay is the way to go, but I would be happy to consider any other index that is suggested.
I must pick up a point made by my right hon. Friend the Member for Penrith and The Border (David Maclean). This is a House of Commons matter, not a Government matter. The hon. Member for Sunderland, South said that the trouble is that the Government control the matter, but they do not. When it comes back to the House, I hope that some amendments will be tabled by Back Benchers, and that we will be allowed to vote on them. The Government do not control this; they control about 100 votes, but the rest of us can speak and vote for ourselves.
A fair amount of remarks have been made about the erosion in our pay, and I do not need to reiterate those. Had the mechanism that we had agreed been followed, however, we would now be paid between £65,000 and £66,000 a year. Were we to continue to allow the erosion of our pay relative to other people, or to the public sector, that problem would sooner or later get so bad that it would have an effect on the sort of people who get into this place. If we want to fill it with people who are either fanatics or rich, that is the way to go, but it is not sensible. There are people who would do the job for nothing—I would be happy to present “Newsnight” for nothing—but whether they are the right people is a different question. It is not the right way of qualifying for a job. We certainly do not want to fill the place up, as we did until about 100 years ago, with people who have significant other sources of income.
I want to turn to the second point. Once we have the uprating mechanism agreed, what is the starting point? Is it what we are paid now? Is it £66,000, £66,170 or what it would have been if we had had the uprating as agreed? Is it something different? I do not think that the study done for the Baker review was right. Comparing the skills that Members of Parliament bring to the job is not the right way to decide what they should be paid. We 646 Members constitute a huge variety of people. Some of us have enormous earning potential out of this place, and some of us do not. Some of us have professional qualifications, and others do not. But we all come here equal, and while we are here we are all equal, and we all need to be paid the same. Trying to compare the skill levels and the hours of work will not produce a satisfactory answer.
What we ought to do is look at what other people in the public sector are paid. I made a start with the people employed by the House of Commons Commission, all five members of which have spoken in this debate. It employs just over 1,500 people, of whom 92 are paid more than Members of Parliament. I expect that all of those people are properly paid—at one stage, when I was in the Treasury, I was responsible for civil service pay and an enormous amount of attention was given to trying to get the right pay grades to recruit, retain and motivate civil servants, and I am sure that a lot of attention is paid to their salaries. But is it right that 10 people in the Department of the Official Report are paid more than us, along with 10 people in the Department of Finance and Administration, 21 people in the Clerk’s Department—that might be more understandable—13 people in the Information Communications and Technology Department, two people in catering, six in the Library and nine in the Serjeant at Arms Department? There is a status issue. We are not just putting in hours of work, being social workers for our constituencies, or giving vent to our views on the great events of the day. Members of Parliament have some sort of status as well. We have to consider where that should place us on the public sector pay scale. I find it difficult to believe that my status, and that of all of us, in the public sector is less than 92 people who work for us for the House of Commons Commission.
I have looked at one or two other areas of the public sector—I do not pretend that there is any system to the areas that I have examined. We are paid at the low end of what a lieutenant-colonel in the Army or commander in the Navy is paid. We are paid at the low end of what a police superintendent is paid. Lieutenant-colonels in the Army, commanders in the Navy and police superintendents are often—this is certainly the case in the armed forces—bright 38-year-olds who are going somewhere. Is that the right end of the pay scale for us, or should we be paid in conjunction with a higher grade?
When we look at pay in local government, we really do find out how badly paid we are. There are 852 officers working in 34 county councils who are paid more than Members of Parliament. Our pay is the same as about the middle rate paid to what is called a third-tier manager, and the third tier does not include the chief executive. The order is chief executive, first tier, second tier, third tier. There are 1,000 officers in district councils who are paid more than us, and we are
slightly higher than the top end of the second tier. The order is chief executive, first tier, second tier. Then there are the metropolitan councils, the unitaries and all the rest. Nearly 7,000 officers in local government are paid more than Members of Parliament. Is that really how we see ourselves? Is it the right place for us to be?
There are 4,000 members of the senior civil service who are paid more than Members of Parliament. I do not agree with the methodology of the PricewaterhouseCoopers study, but I was interested by the suggestion that our comparator was a grade 1 civil servant. For those of us who go back a while, that is equivalent to the old grade 3 or grade 4 under-secretary level. The average pay of grade 1 civil servants is about £71,000 a year and their average bonus is about £10,000, so we are looking at about £80,000 a year. There is a grade 1a, at which the pay is about £10,000 or £12,000 more.
It may be a bad idea to take a look at the pay scales of the judiciary, but let us look at the bottom end, level 7. The chairman of an employment tribunal or an immigration judge receives £98,000 a year. At level 6, a Land Registry adjudicator or the regional chairman of a mental health tribunal—we are not talking about the Court of Appeal or the High Court—is paid £117,000.
We will all have views on where we sit on the scale, but I think we must consider where we as Members of Parliament see ourselves in relation to other people in the public sector. I very much hope that we shall be able to choose the right level in future, and I shall seek to table amendments to that effect when the issue returns to the House. I think that we should table a series of amendments suggesting levels £5,000 apart rising from £60,000 to £100,000, because I consider the right amount to be somewhere between the two. My own view is that it is in the £75,000 to £85,000 region, but I think there should be a series of amendments on which we can vote. We will take a lot of flak once, but we will settle the issue of what the base should be before whatever uprating mechanism on which we agree comes into effect.
Mr. Mullin: The hon. Gentleman got off to a pretty good start, but somewhere along the line he has gone away with the fairies. I fear that if we go down the track that he is now recommending, he will get us back into exactly the sort of trouble that we have got into in the past.
Mr. Maples: I will get us into it once. There will be one unpleasant occasion on which we settle this and then we will not have to settle it again, certainly during the hon. Gentleman’s political career and mine. It is possible that the issue will return during the political careers of some of our younger colleagues, but I think it will see us out.
If we let the editorial writers of the Daily Mail and The Daily Telegraph set our pay, we are done for.
John Bercow: We would be paying them.
Mr. Maples: I am sure that none of the people who write those editorials would do the job even for the pay of the chairman of an immigration tribunal, let alone for what we get.
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