House of Commons Members' Fund

The Committee consisted of the following Members:

Chair: Mr Roger Gale 

† Andrew, Stuart (Pudsey) (Con) 

† Bacon, Mr Richard (South Norfolk) (Con) 

† Bagshawe, Ms Louise (Corby) (Con) 

† Baker, Steve (Wycombe) (Con) 

† Bingham, Andrew (High Peak) (Con) 

† Chapman, Mrs Jenny (Darlington) (Lab) 

† Crabb, Stephen (Preseli Pembrokeshire) (Con) 

Farrelly, Paul (Newcastle-under-Lyme) (Lab) 

Godsiff, Mr Roger (Birmingham, Hall Green) (Lab) 

† Heath, Mr David (Parliamentary Secretary, Office of the Leader of the House of Commons)  

Hoey, Kate (Vauxhall) (Lab) 

† Jones, Graham (Hyndburn) (Lab) 

† Jones, Helen (Warrington North) (Lab) 

† Lilley, Mr Peter (Hitchin and Harpenden) (Con) 

† Munn, Meg (Sheffield, Heeley) (Lab/Co-op) 

† Munt, Tessa (Wells) (LD) 

† Sturdy, Julian (York Outer) (Con) 

Wilson, Sammy (East Antrim) (DUP) 

Mark Etherton, Committee Clerk

† attended the Committee

Fifth Delegated Legislation Committee 

Tuesday 9 November 2010  

[Mr Roger Gale in the Chair] 

House of Commons Members’ Fund 

10.30 am 

The Chair:  Good morning, Ladies and Gentlemen. Hon. Members may, if they are brave enough, remove their jackets. If there are Members present who have not participated in these arcane proceedings before and find themselves out of their depths, the Chairman will be pleased to endeavour to enlighten them. They will notice that it is Chairman or Mr Gale. Other forms of nomenclature find me incredibly deaf and blind. 

10.31 am 

Mr Peter Lilley (Hitchin and Harpenden) (Con):  I beg to move, 

That the Committee has considered the motion, That, pursuant to section 4(4) of the House of Commons Members’ Fund Act 1948 and section 1(4) of the House of Commons Members’ Fund Act 1957, in the year commencing 1 October 2010 there be appropriated for the purposes of section 4 of the House of Commons Members’ Fund Act 1948: 

The whole of the sums deducted or set aside in that year under section 1(3) of the House of Commons Members’ Fund Act 1939 from the salaries of Members of the House of Commons; and 

(2) The whole of the Treasury contribution to the Fund in that year. 

The House of Commons Members’ Fund is, in essence, a benevolent fund for former Members who have fallen on hard times and need financial assistance. It may be hard for some people outside the House to believe that former Members can fall on hard times; but, unfortunately, owing to the interrupted nature of people’s careers, an increasing number find themselves in need of help. The fund currently has around 67 beneficiaries, mostly very elderly former Members or their surviving dependants. Most professions and many firms have similar funds to meet their social responsibilities towards members of their profession. 

Details of the fund’s work can be found in its annual report and accounts, which are laid before the House each year. An appropriation motion is introduced every year in line with the archaic legislative requirements. It enables the trustees to continue to make awards to ex-Members and their dependants, having regard to individual circumstances. The fund is governed by a bewildering variety of Acts, and it is gratifying to know, Mr Gale, that you will be able to simplify them and explain them to members of the Committee should they have any concerns. 

The Acts stipulate the basis on which payments can be made and the amounts payable. Some payments are known as as-of-right payments; others are awarded at the trustees’ discretion. The discretionary payments can be recurring to improve a person’s standard of living, or they can be one-off grants to improve the quality of life and meet a one-off need. As-of-right beneficiaries are

such because they are either not entitled to a parliamentary pension because they left the House before 1964, when pension entitlements began, or are widows and widowers of former Members, who have a parliamentary contributory pension fund benefit below the current specified level and the fund makes up the difference. 

The average value of the recurring payments is about £2,300 per annum. A handful of one-off grants are made each year, with an average value of only about £4,000. Relatively small sums can make a great difference in some circumstances. As some hon. Members will be aware, an extensive review of the fund was completed in 2007, and conclusions on the review have been reached and endorsed by the trustees and the Members Estimate Committee in November 2007. Following that, the House of Commons Members’ Fund secretariat has held meetings with officials from the Office of the Leader of the House to discuss the practical steps that needed to be taken before proposals in line with the MEC’s decision can be implemented. 

However, the implementation of the changes requires changes to primary legislation, but the House of Commons Members’ Fund secretariat was informed that there was not enough time on the Floor of the House to enact new legislation during the last parliamentary term. New legislation in line with the conclusions of the review would move the quasi-pension payments to the Treasury or another body. That would eliminate the need for the Treasury contribution to the fund, and this part of the annual appropriation motion would cease to be necessary. However, until such time as the changes can be implemented, such a resolution remains a requirement of the legislation. 

Finally, I pay tribute to my fellow trustees for the work that they undertake very diligently on the fund’s behalf. 

10.34 am 

The Parliamentary Secretary, Office of the Leader of the House of Commons (Mr David Heath):  It is a joy to be in this warm Committee Room this morning, Mr Gale. I am grateful to the right hon. Gentleman for bringing the motion before the Committee today. I do not want to say too much to add to what he has already said. As he has indicated, the charming proceedings in which we engage may be brought to a conclusion in the future by a change in primary legislation. 

The purpose of the fund is to assist elderly former Members, their widows, widowers and dependants. It provides payments for former Members who left the House before the parliamentary contributory pension scheme was introduced, and it provides grants for specific purposes to former Members who are facing hardship. 

The trustees, the Members Estimate Audit Committee and the Members Estimate Committee all considered a review of the fund in 2007. The MEC concluded that the monthly contribution from Members should be raised from £2 to £5 and that £1 million—based on a 2007 valuation of the fund—should be refunded to the Treasury. 

The fund will also be divided into two parts. The benevolent function of making grants to former Members who face specific hardship will continue to be exercised by the trustees. The function of making as-of-right payments to former Members who do not have a pension will be transferred to the Treasury, which will use the Exchequer contribution to do so. 

The changes will require primary legislation and, until a suitable legislative vehicle can be found, the motion is necessary to appropriate the Exchequer contribution to the fund. I hope that we will be able to expedite that process at some stage in the future, but, until then, I commend the motion. 

10.36 am 

Helen Jones (Warrington North) (Lab):  It is a pleasure to serve under your chairmanship, Mr Gale. I spent too long as a Whip passing notes to Ministers telling them to wind up and sit down, so I do not intend to speak for long. The motion is a routine application for the annual appropriation for the Members’ fund. The fact that some former Members still need money from the fund, whether as recurring payments or as one-off grants, and that the sums are relatively low, as the right hon. Gentleman has said, shows that the fond belief among some people that Members retire on gold-plated sums showered upon them from the public purse is false. Many Members do not stay in the House long enough to build a large pension entitlement, and many others have difficulty finding employment when they leave the House, as anyone who has spoken to some of those who have recently left will know. I hope that, when the Government talk about reforming MPs’ pensions in future, they will bear in mind that many are not entitled to large sums when they leave the House or, indeed, any sort of decent sum. 

The fund therefore remains necessary, and we support the motion. I thank the right hon. Gentleman and his fellow trustees for their work on our behalf, which is no less valuable for being unseen in public. The House is grateful to them all, and I urge my hon. Friends to support the motion. 

10.38 am 

Steve Baker (Wycombe) (Con):  I support the benevolent intent of the fund. I will not waste your time by explaining why, Mr Gale, because I believe that all hon. Members support it. I am certain that the fund is necessary, and I join the applause for the trustees and their work. However, we now live in an era of the big society and public austerity, and I am not perfectly convinced that our benevolence should be funded by the taxpayer. 

As an ex-member of the Royal Air Force, the RAF Benevolent Fund is a subject close to my heart. It is

funded largely by donations from serving members of the RAF at a rate of half a day’s pay per annum. The £215,000 a year taken from the Treasury divided by the 650 Members of Parliament is just £330 a year, which is less than half a week’s gross pay for an MP. 

I recognise and applaud the benevolent intent of the fund, but it is my belief, in these straitened times, that MPs should support the fund and that we can generally afford to do so. We should take it upon ourselves to show a lead to the public by stopping the taxpayer contribution to this benevolence and funding it from the salaries of current hon. Members. For that reason, I oppose the motion. 

10.39 am 

Mr Lilley:  I urge my hon. Friend not to oppose the motion, because the fund is actually entirely in agreement with him. The review recommends that the Treasury contribution should cease. The regular payment of quasi-pensions to widows of former Members who were not, for technical reasons, covered by the ordinary pension legislation will be handled by the Treasury in the same way as it handles other people’s pensions. We will also hand some of the money that has accumulated in the fund back to the Treasury. 

This is probably the first example of a public body voluntarily offering money back to the Treasury, but we were a small cog in the big society before it was even born. Thereafter, the fund will be funded entirely by what remains of the existing fund, plus a monthly contribution from MPs. I would slightly qualify the remarks of the Deputy Leader of the House, who said that it had been agreed that that should be increased to £5 a month. The Members’ fund thought that hon. Members should be ready to increase the amount, but it did not believe that to be immediately necessary. 

I hope that my hon. Friend will feel that we are moving in exactly the same direction; all that is required is primary legislation. 

10.40 am 

Steve Baker:  Having heard my right hon. Friend’s remarks, I am persuaded and support the motion. 

Question put and agreed to.  

10.41 am 

Committee rose.