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Tony Lloyd:
I am grateful to the hon. Gentleman, who probably knows more about parliamentary pensions than anyone else, but may I tell him that I have sought advice? He is absolutely right that this would require an
order. In fact, any expression of opinion in the House today will need translating into action by way of a money order, for example. The fact that a proposal will need subsequent Executive action is not of itself a barrier to the necessary action being taken. The hon. Gentleman may disagree with how the pension scheme will operate, but I can assure him that the proposals in the amendment are both legally and technically do-able.
Mr. Andrew Love (Edmonton) (Lab/Co-op): Does my hon. Friend agree that the combination of catch-up that we would forgo and two and a half years of further wage restraint, which he suggests we undertake, would mean that when the catch-up came in the new Parliament it would be a significant increase? That would make life difficult for all the Members of that new Parliament in terms of wages.
Tony Lloyd: Except, of course, that the level that Members would be at would not differ from what it would be if we brought in Baker now. It may be a big increase at the time, but that would be precisely because Members had forgone some element of it.
My hon. Friend the Member for Edmonton (Mr. Love) may want to urge me not to give away that amount of money in the meantime—that is a perfectly sustainable argument to make, and I understand it because it is a matter of judgment as to what we face the public with—but it is not legitimate to say that because we would end up at the same point the public ought to judge us harshly. The public ought to judge us well for having shown some restraint in the meantime. I do not necessarily believe that that would be the case, but it ought to be. We would not be getting more; we would be getting less. The catch-up would be all the steeper because it would be catch-up at that point.
The central point that I want to put before the House is the fact that we need to get on to the Baker mechanism, although it is a matter of judgment when. We must ensure that the Baker mechanism is what Baker described—the average index of public sector earnings—because anything other than that would see MPs continue to fall behind in the long-term future. We have to recognise the fact that Baker said that we were sufficiently far behind that we needed the catch-up. The judgment for the House today is at what speed we should reach that Baker trajectory.
2.31 pm
David Maclean (Penrith and The Border) (Con): When this matter was last discussed, I was one of those Members who argued strongly that some of us on the Members Estimate Committee should have the right to submit our own report, or at least a memorandum, to Sir John Baker. The Leader of the House kindly assented to that and three of us on the MEC—the hon. Members for North Devon (Nick Harvey) and for Middlesbrough (Sir Stuart Bell), and me—submitted a memorandum to Sir John on what pay and salary should be.
I have been a Member of the House for 25 years. I have been privileged to be a Minister under Prime Minister Thatcher and under Prime Minister Major. I have taken pay freezes, pay standstills, pay cuts and pay deferments, and a fat lot of good it did for the respect in which Parliament or Ministers at the time were held. Whether or not Prime Minister Thatcher had a pay
policy—I am certain she never did—we took a pay standstill when I was a Minister to set an example to everyone else. A fat lot of good it did us as well.
In our submission to Sir John, we said:
“Members of Parliament currently earn £61,820pa. Average tenure in the House is about 12 years, with no pay progression. The Hay Group—“
“have advised that average base salaries for each of the comparators groups lay between £70,000 and £80,000pa. Some comparators have bonus opportunities, and other incentive packages which can increase average total cash by £2-3,000pa.”
I refer to page 17 of volume 2 of the original SSRB report, which Sir John Baker chaired. He compared our salary to that of a head teacher. Our salary was £60,000 and the head teacher was on £71,000. The police superintendent was on £68,000. The senior civil servant, grade 1, was on £69,000. The county council second tier person was on £72,000. The colonel was on £69,000, as was the health human resources director and similar. The comparators in the SSRB report put those people way ahead of us.
There is therefore no doubt that we have fallen considerably behind those whom the SSRB considered our comparators. And, of course, none of those people—except a colonel in Afghanistan—is working long hours. Most of them are not doing 70 or 80 hours a week. Apart from those on the very front-line who are making tactical decisions involving life or death, most of them do not have the responsibility that we have of voting on issues that do include life or death, whether it be embryos, abortion, 42 days or whatever. We have a responsibility to make mega-decisions. For that, we get the pay of a second tier officer in a district council. I look forward to replacing my district planning officer, if the motion is not passed today.
Further in our evidence, we said to Sir John Baker’s review:
“Taking these together we, therefore, consider a salary point around the comparator average is justified by the facts. As a spot rate, it might, arguably, over-reward newcomers and under-reward experienced backbench Members, many of whom are former senior ministers who contribute substantially to the work of Parliament. But this is inherent in a system which has as a principle that the basic salary should be the same for all MPs.”
Some will get paid more, some will get paid less. We continued:
“In our judgement a base salary of £75,000pa is very well-supported by the objective evidence available.”
I repeat that our evidence, which was based on the facts, the SSRB’s original report and Sir John’s report, shows that compared with every other public sector comparator—it would not be right to compare ourselves to executives in private enterprise; we are not—a basic salary of £75,000 is about right.
I am making that point for colleagues so that I can collect most of the hate mail— I have rather a perverse incentive for getting that—and so that when they go back to their constituencies they can point out that they asked not for £75,000, which is correct, but for considerably less. If we vote for the Government motion, we will get considerably less. We will be able to point it out to our constituents that we are still not getting the pay that
every independent comparator has asked for. Today, however, we have a chance to go slightly towards it.
The Government’s motion No. 1 is much more sensible than their motion No. 3. I can understand their pay policy. They are trying to invent some complex formula of indexing themselves to a group of civil servants who do not have pay formula indexation. That is nonsense and the Government have to try to square that circle. Government motion No. 1 is sensible and we should support it.
There is, however, a better alternative, which is amendment (a) to Government motion No. 1, tabled by the right hon. Member for Islwyn (Mr. Touhig). It is sensible and deserving of support. I will probably fundamentally disagree with him on expenses, where I think he is misguided, but that is another matter. On pay, I urge my hon. Friends and Labour Members to support his amendment (a). It would take us slightly along the route to where we need to be, although that may be a matter for another Parliament.
Some of us might seriously think that we have laid this matter to rest once and for all and that we will never again have to vote on it, but I have heard that so many times. I have probably voted on the last time we will ever decide our pay on about a dozen occasions in the past 25 years. Unfortunately, I do not think that that can be the case. If we have to decide our pay, let it be based on the facts. Let it be based on the independent comparators. Then let us have the guts to do it and hold our heads up, saying to our constituents, “Yes, it was 2.3, 4.5 or 6.7 per cent., or whatever it was, but if we set up an independent pay review body, for goodness’ sake let us pay attention to it.” I said the same about police pay. I will happily meet my chief superintendent, who is going to be paid a lot more than me, and tell him that I argued that the recommendation of his pay review board should have been implemented as well.
Today we have a chance to move slightly along the route towards securing a proper, sensible salary for ourselves. I support the amendment tabled by the right hon. Member for Islwyn to motion No. 1—it has not yet been moved, but I hope it will be—and I urge Members not to back any other proposal.
2.39 pm
Mr. Don Touhig (Islwyn) (Lab/Co-op): It is always a privilege to follow the right hon. Member for Penrith and The Border (David Maclean), who spoke very well. I wish to speak to my amendment (a), which has been signed by Members in all parts of the House.
The amount that Members of Parliament should be paid is always a awkward subject for debate. The Members Estimate Committee described the issue well in its memorandum to Sir John Baker, referred to by the right hon. Member for Penrith and The Border:
“Instead of being subject to objective analysis and sensible decision-making, Members’ pay has become a serious distraction in public sector pay rounds, far beyond its real significance to the public purse.”
Time after time we are faced with the same row about Members’ deciding their own pay, and time after time we come up with an arrangement that frustrates many and does not satisfy anyone—least of all the media and the public, who are always looking for some story to report. I therefore give a strong welcome to the mechanism
outlined in Sir John Baker’s review. It is fair, it is transparent, and it prevents Members from being put in the invidious position of having to vote on their own pay; although, given the experience of the right hon. Member for Penrith and The Border, we may not be dealing with the issue for the last time today.
For as long as we vote on this issue, we are trapped between a rock and a hard place. We see the vital need to increase public confidence in Members of Parliament—especially after some recently reported lapses which have, perhaps, done much to damage the reputation of Parliament—but we are sometimes extremely cautious about voting ourselves even the most modest pay increase, and whenever we do we can be sure that we will be portrayed as greedy and avaricious.
I love my country, and I think that the British people are the finest, but I have no illusions about their views on MPs pay: they would not give us a penny if they had their way, and that is the truth of it. However, if we allow Members’ pay to fall behind other public sector pay, we will face a time—in my view, a time long past—when only those who can afford it, only those with private means, can enter the House. I am the son of a miner and my mother was a home help. I am a working-class boy from the mining valleys of south Wales. I would never have got here on the basis of independent means. I say that with strong feeling. If the British people want Members of Parliament to be those who have plenty of wherewithal and do not need salaries, let them not vote for me at the next election, because I am the wrong guy to support.
We currently earn less than a primary head teacher in central London, less than a secondary head teacher in many parts of Britain, less than a chief superintendent of police, and less than the head of IT in the Commons. It is only common sense for Members’ pay to be determined completely independently of Parliament, and removed from any future political debate. That view was echoed by Sir John in his report. He wrote
“if MPs are prepared to relinquish their control over their salaries, then the Government also has to forgo any possibility of directly seeking to intervene in the process”.
Would that my right hon. and hon. Friends on the Treasury Bench took heed of that advice.
It was the Government who set up the Baker review, and it was the Government who gave Sir John Baker his terms of reference. Now that he has delivered, however, the Government are actively seeking to trash his report. Indeed, they have tabled a motion proposing a pay formula which, at best, Sir John considered inferior. To de-politicise this hot potato once and for all, we should ensure that it is not a matter for Government policy in future. In that spirit, it makes much more sense for the House to accept the recommendations of an independent reviewer than to accept the views of the Government, who are not independent.
Sir John’s proposals offer a much-needed way in which to solve the problem, and I hope that the motion as amended will be approved. However, my hon. Friends and I, who have tabled amendments to motions Nos. 1 and 3, understand the Government’s concern about the need for pay restraint. If the Baker recommendations were adopted, Members’ pay would be uprated annually by about 3. 5 per cent. this year. In a year in which others are being asked to show pay restraint, Members want to set an example.
Sir Michael Spicer: The right hon. Gentleman may wish to know that every member of the 18-man executive committee of the 1922 committee—bar two who were absent last night—has signed his amendment.
Mr. Touhig: I am grateful for that. It shows that the House is united in wishing to resolve the matter.
The amendment to motion No. 1 accepts the formula set out by Baker, but proposes a increase of just 2.3 per cent. from 1 April this year. The amendment to motion No. 3 follows the Baker recommendation of a £650 top-up, but that would not kick in until 1 April 2009. The amendments would keep Members’ pay within the framework of public sector pay while at the same time demonstrating restraint.
I appreciate that some will say our amendment allows for pay restraint this year but, depending on the outcome of the next independent review, could breach Government pay guidelines next year. That is perfectly true, but I have no crystal ball. I do not know what the Government’s pay policy will be next year, or what the review might produce next year. The amendment tabled by my hon. Friend the Member for Manchester, Central (Tony Lloyd) seems to rely on a crystal ball. If it is accepted, on 1 October 2010 Members of Parliament will receive an increase of about £6,000 to £8,000 a year. Clearly, then, there will be no Government pay policy in 2010. There is a cardinal rule that we should remember: no Parliament can bind another. There will be a new House of Commons in October 2010, and it might not take the same view as we take today. If we agree to the amendment in the name of my hon. Friend, that new House might say, “Well, we’re not going to implement that after all.” It is important that we bear that mind.
It is often argued that Members are in a no-win situation when voting on their pay, and I am sure that we will be criticised whatever we do. However, if we do not take these decisions now, we run the risk of falling further behind other public sector workers. The only outcome of this eventuality is that in future we will be faced with voting for an even bigger increase in order to catch up, and where will we be then?
The Government have tabled motion No. 2 as an alternative to Sir John’s recommendation. I put it to colleagues that, however impressive it may look now to put on hair shirts and support proposals which would have the effect of reducing Members’ pay increases for the short term, that will be storing up trouble in the long term. We might look good to the public at present, but in the long term we will be storing up a big pay increase. We are celebrating the 60th anniversary of the health service. Aneurin Bevan, the man who founded the NHS, summed up that sort of approach when he said that in life we cannot have both the crown of thorns and the 30 pieces of silver.
The Government have to be seen to be doing something about pay, but although their position is understandable, it is not objective. Sir John Baker’s independent review is genuinely objective. If our aim is to take Members’ pay out of the domain of politics and put it in the hands of those who have no political axe to grind, let us support these recommendations. By supporting the two amendments in my name, the House would ensure that Members’ pay would be, as much as is possible, de-politicised and would in future become part of the
normal public sector pay system, while at the same time demonstrating the type of restraint that we have asked others to follow this year.
I hope Members will support my amendment.
2.46 pm
Sir Patrick Cormack (South Staffordshire) (Con): I am delighted to follow the right hon. Member for Islwyn (Mr. Touhig). I strongly support what he said and the view that my hon. Friend the Member for West Worcestershire (Sir Michael Spicer), who is the chairman of the 1922 committee, expressed in an intervention.
In all my years in the House, I have very rarely voted on pay, because I have always found doing so extremely embarrassing. I do not think I have ever spoken on the subject before, but I feel moved to do so this afternoon because I am appalled by the attitude of the Government and of those on my own Front Bench.
We have the independent review. Sir John has produced a report to which no one in their right mind can take exception, and I believe that we do ourselves and the public we serve a disservice if we slap Sir John in the face and do not accept his recommendation. I agree with the amendment tabled by the right hon. Member for Islwyn, because it shows a degree of restraint.
I want to talk this afternoon about the comparisons, however. Professional and business people come to my advice sessions for help and assistance. I correspond with them daily, and I always try, as I am sure colleagues do, to do my very best to assist them. Yet I am sure I am not the only Member who has observed that it has reached the stage where virtually every single one of them is earning significantly more than we are.
When I entered the House in 1970, being an MP was regarded as a way of life rather than a job, and I still tend to look upon it in that light. The salary then was £3,250 a year, and there was no trough to get one’s snout into because the only allowance we had back then was £500 towards the employment of a secretary. Indeed, only two years before I entered the House—when my hon. Friend the Member for Louth and Horncastle (Sir Peter Tapsell), who sits in front of me in this Chamber and who is present now, was already a Member—MPs were given postage costs for the first time.
We have moved a long way since then. Some might say we have moved too far. There is no doubt that allowances were brought in because the Government of the day were not prepared to bite the bullet on salaries, or to acknowledge that this way of life had, indeed, become in a sense a job, and because it would be very wrong to exclude people such as the right hon. Member for Islwyn.
I do not mind saying that when I came into this House as a fairly impoverished schoolmaster, I looked for outside earnings to subsidise my work here, and my wife worked for me for more than five years without receiving a penny piece—it was the only way we could do it. We have perhaps over-compensated on some of the allowances—some of which I do not particularly approve of, although I do approve of the ones that we are mainly talking about this afternoon—but I believe that we ought to have some pride in ourselves and what we seek to do for others.
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