Written evidence from Dr Paul Seaward
A SUMMARY OF MEMBERS' PAY AND EXPENSES 1911-71
INTRODUCTION
This note outlines the history of the issue of Members'
pay and expenses, and concentrates on the period from the introduction
of the salary a century ago to 1971, when the Top Salaries Body
became involved, and when a system of allowances was separated
out from the salary. It is intended as background to the current
discussion. The period between 1971 and 1988, when a system for
linking pay to civil service pay began to operate, is more briefly
outlined. The period after 1971 is covered in more detail by the
House of Commons Library Standard Note Members' pay and allowancesa
brief history (SN/PC/05075), and numerous other research papers
and standard notes from the Library. This note is indebted to
the 1974 SPG publication edited by Michael Rush and Malcolm Shaw,
The House of Commons: Services and Facilities.
The note concentrates on the salary and the initial
creation of the main allowances. It does not attempt to deal with
the parallel issues of ministerial pay, and the Members' pension.
The following points have been themes of the debates on Members'
pay and allowances throughout the period:
The
lack of any separation until 1971 between salary and provision
in respect of Members' expenses, and a consequent ambiguity about
the purpose of the payments, and also some doubt about tax treatment.
The
changing roles and backgrounds of Members of Parliament, and how
these have required a changing approach to the problem of pay
and allowances.
The
controversy over whether Members should set their pay themselves
(or if they did, do so only after the general election at which
the issue had been explicitly raised) or find some external mechanism
that would ensure that it adequately kept in line with other public
sector pay settlements.
THE 1911 RESOLUTION
The Liberal government's decision to establish a
form of remuneration for Members in 1911 gave effect to long-standing
party policy, although it was only after the Osborne Judgement
of 1909a decision in the House of Lords against Trades
Unions' use of the political levy which rendered their existing
support for Members illegalthat the party was actually
forced to put it into effect. Reluctance to do so reflected a
deep and common unease about the creation of a class of professional
politicians, which was voiced frequently in the debateheld
amid deep controversy over the Liberal government's proposals
to remove the House of Lords' veto on legislation.[23]
The opponents of the 1911 scheme regarded it as an insidious corruption
of Parliament. Some thought that the effect would be, sooner or
later, to encourage other voluntary public servants, especially
those who sat on local boards and committees, to require allowances
too. Arthur Lee, who spoke for the Unionist party, referred to
the motion in an amendment as the "violation of the principle
of gratuitous public service", and suggested that paying
MPs would encourage a new breed of dubious characters to enter
Parliament.[24]
Lee said that:
I think we have a notorious example before us of
what happensand I only speak of countries with which I
am thoroughly familiarin the United States of America and
Canada. There we know that representative and influential men,
speaking generally, have the greatest reluctance to enter politics
at all. As a matter of fact, with very few exceptions they do
not enter politics. How often have I myself, when I raised that
very point with men of that description in Canada and in the United
States, heard them reply, "Why should we? We pay others to
do that for us." I am afraid that will be the case very soon
here, and, as a result, I believe we will get a different type
of Member in this House from that which we have been used to.
We will get a type of Member and a much larger proportion of men,
resembling the paid professional speakers of political parties
to-day, and, while these men are able men and do good work, I
do not believe they will be a satisfactory substitute for the
present personnel of the House of Commons.[25]
Payment, wrote another unionist, "attracts the
very worst class that a country can be governed bythe caucus-fed
professional politicians. Log-rolling and corruption are the inevitable
corollary."[26]
It was no doubt in an attempt to rebut this line
of attack that Lloyd George, the Chancellor of the Exchequer,
presented the payment as an allowance, rather than a salary:
[I]t is not a recognition of the magnitude of the
service, it is not a remuneration; it is not a recompense; it
is not even a salary. It is just an allowance, and I think the
minimum allowance, to enable men to come here, men who would render
incalculable service to the State and whom it is an incalculable
loss to the State not to have here, but who cannot be here because
their means do not allow it. It is purely an allowance to enable
us to open the door to great and honourable public service.[27]
In another passage that would be frequently quoted
afterwards, he insisted that:
The only principle of payment in the public service
is that you should make an allowance to a man to enable him to
maintain himself comfortably and honourably, but not luxuriously,
during the time he is rendering service to the State. That is
the only principle, and it is the principle on which we have proceeded.[28]
Despite the talk of allowances, the 1911 resolution
for an annual payment to MPs of £400 incontrovertibly referred
to the payment as a "salary" (Lloyd George himself also
called it in his speech as "just the salary of a junior clerk
in the Civil Service").[29]
The exclusion from the 1911 resolution of those Members who were
in receipt of a salary as an officer of the House, or as a Minister
or as an officer of the royal household seemed similarly to emphasise
that the payment was intended as a salary, as did the fact that
the Inland Revenue, initially at least, charged income tax on
the full amount. From 1912, however, the Inland Revenue routinely
treated a quarter of the amount as provided for expenses and free
of tax, creating a confused situation in which the payment was
treated as both a salary and covering expenses.[30]
The Revenue said in 1921 that it received a number of claims against
tax beyond the standard £100.
THE 1920 SELECT
COMMITTEE
Inflation during the First World War significantly
eroded the value of the salary, and resulted in pressure to increase
it during the Parliament elected in 1918.[31]
Prime Minister Bonar Law recognised the strength of feeling at
least for an inquiry into the subject when speaking on the establishment
of a select committee to review the issue in November 1920.[32]
The Committee took evidence in December 1920.[33]
The ambiguity over whether the payment should be
regarded as a salary, and the continuing controversy as to whether
membership should be paid, was at the heart of many of its discussions.
Some Members of the Committee clearly had difficulty with the
notion of a salary on the basis that it was paid by the state
but that there was no contractual relationship with the state.
Major Farquarharson was particularly exercised by the philosophical
question of the extent of the state's obligation to cover the
expenses of individual members in working for their constituencies.
"Do you reason that election by a constituency, which, after
all, is an election by a majority of a constituency, creates an
obligation upon the State to pay for such service as you voluntarily
render under that arrangement?... can you give any other instance,
in your own knowledge, whereby a similar obligation upon the whole
State is created by the action of a small section of a community?".[34]
The Committee heard from a number of Members who continued to
oppose it, and from J.M. Hogge (a whip for the Independent Liberal
party) who argued that "whatever payment
is made to
a Member, that payment should be in the nature of expenses, and
expenses only."[35]
I hope the Committee will make it quite clear that
they are not discussing this even on the basis of salary. I think
that is really important, because the word has been used so loosely
from the time that the original payment was made to Members that
the public have the notion that this is a salary. I say with regard
to that, that if it is a salary, then you are altogether in deep
water. Nobody has ever yet attempted to assess what might be the
salary of a professional politician. I do not want to have professional
politicians, and any provision that is made now is not made in
the way of a salary, but as a relief to the charges which incidentally
occur to any man who must come here.[36]
Hogge appeared to be unaware that the word was used
in the original resolution: "if it has been it is very unfortunate".[37]
It was Labour Members who most strongly put the alternative
view. The Chairman of the party, William Adamson,, insisted that
the payments ought to be regarded as a salary"I do
not see how the Members of this august assembly, which we fondly
describe as the Mother of Parliaments, should be treated in respect
to salary on a different footing from the Members of all the other
Parliaments of the world, as far as I can ascertain".[38]
He claimed that the £400 should have been uprated to £1,100
to retain its value,[39]
but proposed an increase to £800 on the basis of inflation
in travel and hotel costs. Dan Irving, another Labour Member,
enumerated his costs: £105 for a third class railway pass,
and the costs of keeping up his own home and accommodation and
other expenses in London brought his annual expenses up to £370.
It meant, he said that he did not have "a penny piece for
clothing either for myself or my wife".[40]
A common view was that a period of austerity was
not the right moment to increase the sum "because of the
bad effect on the people outside",[41]
but some of the conservative Members opposed to paying salaries
were prepared to concede the justice of paying travel costs on
the basis of the importance of frequent communication with the
constituency, and the much greater difficulty for Members living
at a distance from London. The Committee professed to be impressed
by the evidence they had received of the "difficult financial
position of certain members at the present time". They recognised
that "if the sum of £400 per year was necessary in 1914,
and no evidence has been submitted to the contrary, such an amount
is inadequate today". Although they did not recommend a change
to the salary, they did recommend the provision of first class
railway travel for all Members, and the introduction of facilities
for free postage of Members' letters. The Committee also noted
the evidence they had received that many Members' expenses were
substantially greater than the tax-free sum allowed for within
the £400, and raised the question whether it should be regarded
as an allowance or as salary. They did not however make a specific
recommendation on this, although they noted that it was open to
the Treasury to issue a Minute "to the effect that the whole
£400, or any part thereof, should be treated as expenses".[42]
In a Treasury Minute of May 1921 the Inland Revenue
duly deemed that it was reasonable to treat the whole amount of
£400 as "wholly, necessarily and exclusively incurred
in performing the duties of the office".[43]
When the House debated the consequent increases in the estimate
for Members' expenses, Austen Chamberlain as Leader of the House
explained his own conversion to the idea of paying Members, and
supported the Committee's proposal. The division on it was treated
as a free vote, however, and motions allowing for the changed
treatment of the £400 salary and allowing for free travel
between the House and constituencies and homes were all defeated.[44]
Members were still able to charge expenditure above
£100 against tax, although they did so, as before, on a case
by case basis.[45]
Some pressure for uprating the amount was eased by post war deflation,
although in 1924, during the first Labour government, free railway
passes were finally introduced for Members of Parliament.[46]
THE BALDWIN
INQUIRY, 1937
Under the emergency measures introduced in 1931 (the
National Economy Bill) Members' Salaries were reduced by 10% in
line with the reductions in other public sector salaries.[47]
They had returned to £400 by 1935. By 1937 sentiment had
decisively turned towards raising the level of Members' pay. Prime
Minister Stanley Baldwin undertook to investigate the issue in
April 1937, after it was raised in the context of debate of the
Ministers of the Crown Bill that year.[48]
In a debate a few days later on Ministerial salaries he said:
The time was, when I was a boy, when people hardly
dreamed that the day would come when there would be large numbers
of Members in this House who could not afford to perform their
duties here unless they had an allowance; but I think, looking
at the whole Continent of Europe, that the more the basis of our
liberty and our Constitution is broadened, the better for our
country. Would anyone who remembers the old days here go back
to them and give up what we have gained? This Chamber, the most
famous Chamber in democratic government in the world, is now open
to all, and, once you admit that everybody has a right to be elected
to this House if he can, you cannot logically create or leave
a financial bar.
Baldwin announced in May his decision to increase
the level to £600.[49]
In moving the proposal in June to give effect to the change, Neville
Chamberlain, who had replaced Baldwin as prime minister a few
weeks earlier, referred to his own surprise and distress on discovering
the difficulties in which many members found themselves. He accepted
that the cost of living had declined since 1920, but argued that
it was still at least 50% higher than it had been in 1911; moreover,
there had been a considerable increase in the electorate since
then. Although there were a number of voices arguing for caution,
and arguing that the motion should only be brought forward after
a general election, the increase itself was carried with only
a small dissenting minority.[50]
THE 1945 COMMITTEE
The new level was still well below what had been
advocated in 1920 (and even despite the reduction in prices that
had occurred in the 1920s, the value had considerably diminished,
as Baldwin stated). Hugh Dalton, Chancellor in the new postwar
Labour government, moving for a new Committee in November 1945
to look at the issue, referred to the increase in constituency
pressures on Members; for the opposition Osbert Peake again made
the point that professional politicians were undesirable, but
recognised the need to re-examine the subject.
The Committee said that practically all of its evidence
and responses to its questionnaire recommended "some material
increase" in remuneration. It concluded, as had its predecessors
and as would its successors, that "many Members are finding
themselves in a position in which they cannot perform those duties
without financial anxiety". Enumerating the various expenses
that a Member found necessary, it avoided regarding the remaining
payment as a "professional salary": "though a member
may be called upon to devote a great deal of time to the business
of the House, he has complete freedom to allot his time between
his parliamentary duties, either at Westminster or in his constituency,
and his personal affairs. It would be most unwise to take this
freedom from him by paying such a figure as would unequivocally
demand his full time in return".[51]
They proposed an increase in the overall salary to £1,000,
and that £500 of this should be allowed free of income tax
to cover expenses (with Members still able if necessary to claim
for expenses over and above that). Because of these increases
they did not recommend further increase in travel allowances (the
free rail travel concession had already been enhanced by the government
to include travel between Westminster and Members' place of residence
as well as the constituency)[52]
nor the introduction of a car travel allowance. The government's
proposals for change on the basis of the Committee's report were
considered on 29 May 1946. The government agreed with the increase
to £1,000, but rejected the idea that £500, rather than
the original £100, should be regarded as tax-free, and insisted
that Members should have to make a claim to set their expenses
against tax as previously. Osbert Peake, for the opposition, agreed
with the government: "I found that [the idea that an increased
proportion of salary should be tax-free] very abhorrent to my
constituents. They took the view, and I think they were right,
that it would be all wrong for hon. Members to come under what
in practice would be a different Income Tax law from the ordinary
citizen." The government's proposals were approved, resulting
in an increased annual payment of £1,000, with £100
automatically tax-free.[53]
THE 1953-54 COMMITTEE
The £1,000 rate remained in operation over the
next eight years, despite increasing concern from Members about
the failure to raise it in line with inflation. Although the post-1951
conservative government seemed not to have been particularly sympathetic
towards the idea of an increase,[54]
it established a committee in July 1953 primarily to consider
the Members' fund,[55]
but also with the remit of reviewing the "nature and extent
of the expenditure incurred by Members of this House in the performance
of their duties". The committee believed that the expenses
of Members had increased considerably even since 1946: in 1946,
they said, the average amount allowed by Inland Revenue as expenses
was £550; by 1953 it was £750. The committee commented
on the difficulty of establishing proper rates for expenses, because
of the "different modes of life and individual tastes"
of Members, the differences in their constituencies, and especially
the difference in accommodation needs and secretarial assistance.
Nevertheless, the committee reported similar stories to those
referred to by their predecessors:
some have sold or mortgaged their homes: the savings
that others had made before entering Parliament are now exhausted
and debts are accumulating: others have sacrificed pension rights
which they had established with a company or firm, in whose employ
they were before entering Parliament, and are now at an age when
it would be difficult, if not impossible for them to find employment
when they leave the House of commons: some have to refuse invitations
to public functions which they ought to attend: in some cases,
in order to supplement the family income, the wife of the member
has had to find employment: for a long time some have not been
able to afford lunch or dinner in the dining room of the House
of Commons and use only the tea room.
The Committee recommended an increase in the annual
payment to Members to £1,500, though it recognised the case
for a larger increase and noted that the House might wish to consider
in future "in broader terms than your committee are instructed
to, the status and degree of financial independence appropriate
to Members of Parliament in relation to their duties as these
have developed in the modern world".[56]
The Committee also recommended a non-contributory pension scheme
payable to Members on retirement who had completed at least ten
years' service beyond the age of 45.
The Prime Minister (Winston Churchill) gave the government's
response to the report in April 1954, saying that in the government's
view it would not be right in the present circumstances to proceed
with the increase in salary, or to insist on a non-contributory
pension scheme.[57]
The recommendations were further discussed in an adjournment debate
in May, at which the Chancellor (R.A. Butler) reiterated the government's
opposition to the proposals as they stood, but suggested an alternative
approach of expanding the provision of allowances in cash or in
kind, including a daily subsistence allowance of around £2
per night that the House sat, the equivalent, he thought, of £200
to £300 a year.[58]
Some Members complained that this was simply to fudge the issue.[59]
In a debate later in May, George Thomas (Labour), in introducing
a motion giving effect to the Committee's original proposal for
an increase of £500 a year in the salary, said:
The proposal to base an increase on expenses incurred
wholly and exclusively in the performance of our duties here means
that hon. Members would have to be saving up chits for expenses
into which they had entered throughout the whole year. It could
mean all sorts of embarrassing and awkward situations for the
House, and, in the end, it could be far less desirable than dealing
with this question as Parliament after Parliament has felt it
necessary to deal with it. This is not the first Parliament which
has had to consider whether it would deal with the problem of
allowances for Members of Parliament by way of expenses or of
an allowance. I believe I am right in saying that, each timein
1911, 1937 and 1946, as also this timethere have been suggestions
that these allowances should be by way of expenses, in its wisdom
each successive Parliament has rejected the idea of the expenses
account as being not nearly as desirable as a straight increase
which the public will appreciate.[60]
The House, on a free vote, but against government
advice, adopted the original proposals of the Committee. The government,
however, subsequently persuaded the opposition to back the proposal
that Butler had outlined, and the prime minister announced this
to the House in Julyalthough Clement Attlee nevertheless
complained about the government's decision to proceed contrary
to the declared will of the House.[61]
The result was the addition of a £2 daily allowance to members'
remuneration for the days except Fridays on which the House sat.
At the same time the Treasury withdrew the automatic relief from
tax for £100 of the salary.[62]
Attlee continued to reflect the view that Members
were grossly underpaid, and argue for a proper increase. His successor
as Leader of the Opposition, Hugh Gaitskell, initiated talks with
the government on the subject, and a debate in July 1956, in which
he referred to the government's failure to implement the House's
decision of 1954 and suggested that the allowance (averaging about
£280 per session) amounted to less than half the increase
in pay proposed by the Select Committee. He claimed that it was
impractical for many politicians to obtain other jobs, and indeed
that the possession of other jobs by some Members made it difficult
for the House to work properly, with committee attendances affected.
The Prime Minister did not contest the case for a raise but reiterated,
as had been said in 1954, that now was not the right moment to
raise salaries:
I need not tell the House after that that an increase
here at this time in the full glare of publicity, in which we
have to live as Members of Parliament, whether we like it or whether
we do not, cannot but have its effect at once on other sections
of the community, at a time when we are urging restraint.[63]
By 1957, however, the government did accept that
the situation had eased sufficiently for it to accept a proper
increase,[64]
and about a year after Gaitskell's debate, R.A. Butler introduced
a series of resolutions which, leaving the salary at £1,000,
introduced a payment of £750 in respect of expenses, which
would be "a straightforward addition to salary". The
sum was the same as that which the 1954 Committee had mentioned
as the average which had been claimed as expenses against tax
by MPs. "The fact that it is equal to the figure of average
expenses quoted by the Select Committee", Butler emphasised,
"must not lead hon. Members to believe that it is an expense
allowance and as such exempted from taxation". He abolished
the daily allowance introduced three years before.[65]
Gaitskell supported the proposal, although he pointed out that
the sum was not quite equivalent to the amount proposed by the
Committee in 1954 taking inflation into account, that that figure
had been based on the assumption that there would be a non-contributory
pension (something which was still not conceded), and that the
sum was still much less than some continental Parliaments. He
argued once more for a proper system for uprating Members' pay:
I think that in due course we ought to consider the
possibility either of relating the payment of Members of Parliament
to some other salary which is paid in some official capacity or
to the possibility of an outside tribunal considering the matter
from time to time. I realise that there may be differences of
opinion on this, but when one remembers the difficulties which
we have encountered in the last years, I believe that this should
now be looked at.[66]
THE LAWRENCE
COMMITTEE, 1964
As on previous occasions, an uprating was followed
by several years of inflation and inaction.[67]
The Committee on the Remuneration of Ministers and Members of
Parliament (the Lawrence Committee) was established by Alec Douglas
Home as Prime Minister in December 1963 following consultations
with the leaders of the main political parties in both Housesthough
with an all-party agreement that the results of the review should
not be presented to the government until after the general election.[68]
As Michael Rush has emphasised, it was the first time that a review
of Members' pay was given to a body outside the Government or
Parliament.[69]
The Lawrence Committee report was the most thorough
consideration of the subject of Members' pay that had been attempted.
As previous committees had done, they canvassed the opinions of
Members themselves with a questionnaire. Members themselves, they
recognised, continued to be divided on whether the job should
be considered a part-time or full-time activity, with a number
still resisting the idea that there should be "full-time
professional politicians". They also recognised that the
personal circumstances of Members made it impossible to fit a
salary at a level which would meet everyone's needs perfectly.[70]
They concluded that the only practical way of proceeding was to
make "the salary for all members, whatever the type of their
constituency
such as will enable those Members who are without
private means or the opportunity to earn income outside the House
efficiently to discharge the duties of the service without undue
financial worry and to live and maintain themselves and their
families at a modest but honourable level". The Committee
firmly rejected the idea of an automatic link with the Civil Service,
or any other comparator: MPs' pay "should be determined on
its own and should not enjoy any automatic built-in protection".
The current salary of £1,750, they pointed out, fell well
below the value of the original £400, and had long been inadequate,
and echoing their predecessors, they accepted that there were
cases of real hardship:
those Members, of whom there is an increasing number
not limited to one side of the House, are forced to endure the
discomfort, in spite of tax relief, of cheap and shabby lodgings
in London; they cannot afford to use the Members' Dining Room;
they have to submit to the humiliation of not being able to return
hospitality even at the most modest level of entertainment; they
are forced to impose considerable sacrifices upon their families
and they find it necessary to cut down the number of days on which
they can attend sittings of the House.[71]
The Committee recommended an increase in the salary
paid to Members to £3,250 a year, with £1,250 of the
sum as the amount of this which it was assumed might be required
to cover expenses.[72]
The Committee also finally recommended a contributory pension
fund. It however made no very significant recommendations concerning
allowances, which it largely regarded as beyond its terms of reference.
The changes were effected by resolution and the introduction
of a pensions bill in December 1964, although the coincidence
of a decision on Members' salaries and pensions with the deferment
of a general pensions increase until the following spring was
politically awkward, and the cause of some embarrassment to the
government.[73]
The innovation of referring the issue to an external body was
widely welcomed; but one member regretted the fact that the Committee
had:
seen fit to prolong this fiction of tax-free expenses.
it is not a sensible or reasonable thing to do, because
the public get the idea that Members of Parliament receive part
of their salary tax-freetax-free expensesbut this
is not so. The nonsense of this arrangement can be clearly seen
by the fact that if one spends less than £1,250, one gets
a less allowance for tax purposes, and if one spends more than
£1,250, one gets more than £1,250.[74]
Some lamented the Committee's failure to agree with
the idea that salary should be linked automatically to another
comparator, but this point was not taken up with any force: the
proposal for automatic linkage was not yet popular, despite the
difficult history of Members' salaries over the previous fifty
years, no doubt partly because of a reluctance to concede (shared
with the Lawrence Committee itself) that the role of a Member
could in any way be compared with that of a "normal"
job; and partly perhaps because of a hopeexpressed by Selwyn
Lloyd in the debatethat inflation might not be a persistent
factor.
THE TSRB REPORT
1971: DIVIDING SALARY
AND EXPENSES
In fact, inflation grew rapidly in the late 1960s
and before it rose very quickly in the 1970s. The failure of the
salary to keep pace with the cost of living and the lack of any
means to ensure that it was reviewed were again the subject of
comment in the late 1960s.[75]
The introduction of a secretarial allowance in 1969 was one response
to the issue. The sixth report of the Services Committee of 1968-69
argued that "the provision of a secretary is essential".
Remarking that the value of the salary set at £3,250 in 1964
had fallen, and "that no machinery exists for its review",
it recommended that provision should be made at public expense
for secretarial assistance at the rate of a maximum of a full
time secretary for each Member. A secretarial allowance was brought
into effect by a resolution of December 1969, although it was
pegged at a maximum of £500 per Member, which many regarded
as inadequate.[76]
In the debate James Dickens said that "This House of Commons
is by far the worst serviced and poorest paid of any assembly
in any major democracy", and Douglas Houghton complained
that:
We are constantly having thrown at us that one of
the first things that this Parliament did when it was elected
in 1964 was to increase its own pay. This is because of the absurd
method of combining remuneration and expenditure for hon. Members.
I regard the Lawrence proposals in this respect as being quite
unacceptable and based on wrong principles. I believe that we
should get this matter straight before long.
The government had already conceded that the subject
needed to be rethought. In July 1969, in its response to the Services
Committee Report, it acknowledged the links between facilities
and the expenses issue, and agreed to refer the matter to the
National Board for Prices and incomes during the next Parliament.[77]
It also proposed that the matter would become part of the regular
business of a proposed Commission for Industry and Manpower. The
Commission, however, was never established, and the government
changed at the general election of June 1970. Early in the new
Parliament, backbench concern on the subject was further signalled
by Douglas Houghton's private members' bill to establish a review
body for Members' pay, allowances and pensions and conditions
of service.[78]
The new conservative government had previously announced that
it would establish three pay review bodies, one of which would
deal with top salaries in the public sector, and in December 1970,
on the second reading of the private member's bill it announced
that the question of Members' and ministers' salaries would be
referred to this review body.[79]
The first report of the new Top Salaries Review Body
(TSRB) dealt with the issue. It began by observing that "the
extent
to which Members of Parliament pay expenses of their
work out of their salary is much higher than is generally the
case in other occupations; indeed most salaried employees expect
all their reasonable expenses to be met in full by the employer
and not merely treated as deductible for tax".[80]
It estimated that the average net pay for Members after meeting
all necessary expenses but before tax, was a little under £2,000
a year.
As a measure of the standard of living which their
salary has represented during this time (while not implying that
the pay of MPs should be fixed in relation to that of a given
grade of civil servant), it is interesting to note that the equivalently
paid official (in approximate terms) in the civil Service was,
before the first world war, a Principal, between the wars a Higher
Executive officer (two grades below a principal), after the second
world war a Senior Executive Officer (one grade below a principal)
and in 1964 a Principal again. The nearest equivalent grade now
is a Senior Executive Officer. These comparisons are even less
favourable to the MP if account is taken of the fact that the
civil servant, within standard limits, is reimbursed for all expenses
incurred in performance of his duties.[81]
The body complained that:
the difficulty of assessing a fair level of pay is
compounded by the way in which the notion of the Member's payment
has developed. It has come to be regarded as being composed of
two parts, one being in the nature of a salary from which Members
have to meet their living expenses, and the other being intended
to meet the expenses of carrying out their Parliamentary duties.
But these expenses have varied not only according to the nature
of the Member's constituency, whether it is rural or urban and
its distance from London, but also according to the way in which
an individual Member sees his role and deals with his work.[82]
As it pointed out (and as had frequently been said
before), the more expense a Member incurs in carrying out his
job, the less were his disposable earnings: "this may mean
also that the more work he does in visiting his constituency and
dealing with his constituents' problems, the less money is left
in his pocket."[83]
It regarded as one of the most basic questions whether a Member's
salary should be independent of expenses. They concluded firmly
that it should: "as a general rule we believe that, in future,
a clear separation should be observed between salary, on the one
hand, and provision for expenses on the other
it should
not normally be the responsibility of the individual Member to
finance the facilities he needs to do his job". It acknowledged
that it would be difficult to make this distinction perfectly,
but it laid this down as a basic principle. The Body continued
to resist the notion of an automatic system of uprating, and rejected
linkage with a civil service comparator. It accepted that there
was pressure from some members for such a system, which they attributed
to "a desire to remove the question of salary determination
from the political arena and to provide protection against the
erosion of their salaries through inflation", but believed
it quite wrong that negotiations on civil service pay might be
affected by the question of Members' pay. "The question of
remuneration should be examined periodically (and we would hope
regularly) on its merits and in the light of the relevant circumstances
at the time".[84]
The Body said that there should be a review once in the lifetime
of each Parliament.
The Body recommended a raise in salary to £4,500
a year, as well as a system of allowances, the most significant
of which was to cover the additional costs of living away from
home: "it is clear from the evidence we have received that
many Members find the costs of additional accommodation, especially
in London, a considerable burden, and we are of opinion that Members
should not be expected to meet them entirely out of their salary".
The additional costs allowance system was based on the notion
of a subsistence allowance, and was a fixed daily sum paid to
cover the additional cost to Members of staying in London or in
their constituency when engaged on parliamentary duties, a sum
set at £5.25 or £5 a day; London members would receive
a £175 London supplement to their salary instead. The Committee
also recommended the widening of the system of travelling expenses,
and the increase in the secretarial allowance to £1,000 a
year, to meet both secretarial and general office expenses, which
might include the employment of research assistants. Another innovation
was three month's severance pay to a Member who lost his or her
seat during a general election.
The government implemented the rise in salary, although
it rejected the additional costs system as proposed by the Body,
on the grounds that it was too complex. It substituted a simpler
scheme, an annual flat-rate payment of £750 for Members based
outside London, with the London allowance of £175.[85]
With expenses finally divided from salary, following
the 1971 report and consequent resolutions four principal allowances
existed: car allowance (which replaced free travel vouchers);
secretarial assistance; additional costs (subsistence) allowance
and London supplement.
1971-83 AND LINKAGE
TO CIVIL
SERVICE PAY
Inflation began to pick up in the 1970s very rapidly.
While trying to enforce pay restraint more generally, the government
was extremely reluctant to allow Members' pay to rise. As at least
an interim approach, a strategy of increasing allowances while
holding down the salary was explicitly stated by the then leader
of the House, Ted Short, in May 1974:
The Government do not feel that it would be right
at the present time to review the level of Ministers' and Members'
salaries as these would more properly form part of a major review.
But, on the other hand, there is no doubt that the value of the
various allowances which Members may draw to help them defray
the necessary expenses they incur in the course of their parliamentary
duties has fallen to a level which is causing serious difficulties
for many Members. I have in mind the secretarial allowance, the
motor mileage allowance, London allowance, and the allowance which
covers the additional cost of overnight stays away from home.[86]
He therefore invited the TSRB to review the allowances
only. The result, announced to the House in July 1974, increased
them significantly. The secretarial allowance went up from £1,000
to £1,750; the additional costs allowance from £750
to £1,050 a year, with a London supplement increased from
£175 to £228. Many Members regarded this as inadequate.
William Hamilton called it "a backhanded way of giving increases
to Members", and argued that "it would be much more
honest if we were to be paid an adequate salary and allowed to
decide how much we chose to spend on secretarial assistance and
other things". Ted Short agreed to invite the TSRB to review
salaries and allowances again in the autumn, and did so in December
1974,[87]
after the October election. The TSRB recommended an increase from
£4,500 to £8,000, an increase of 78%, designed not only
to take into account the two thirds increase in the retail prices
index since 1971, but also the changing demands of the role of
the Member. The secretarial allowance it recommended raising to
£3,200 a year, the additional costs allowance to £1,350
a year, and the London supplement to £340 a year (and in
future automatically in line with changes in civil service London
weighting). The Body again considered the question of an automatic
link with civil service pay, only to reject it, arguing that it
would not make the issue any less politically sensitive, and other
automatic linkages, to inflation or wage movements, might put
Members into a more advantageous situation than other people.
It urged, however, that reviews be held more frequently than they
had originally recommended, suggesting a biennial review, rather
than one review in each Parliament.
The government felt unable to allow the full salary
increase, limiting it to £5,750 in 1975. In each of the following
three years it was supplemented within the current policy of wage
restraint, despite pressure to bring it up to the level recommended
by the TSRB more quickly.[88]
Many Members were angry about the failure to pay the recommended
increase, and returned to the argument, rejected by the Review
body, to bring the salary into line with civil service comparators,
a point on which the government promised to consult.[89]
In July 1978 the government announced another periodic
review by the TSRB, which was published in June 1979, after the
General election. The increase proposed by the Body, to £12,000,
was agreed by the new Conservative government, but would again
be staged. The 1979 discussion marked the beginnings of a more
general acceptance of the principle that Members' pay should be
set on the basis of a comparator. The Leader of the House, Norman
St John Stevas, signalled a radical shift in the general view
when in 1979 he introduced the government's proposals for an increase:
The tradition in this country is of unpaid and voluntary
public service.
That tradition, although it is not sustainable
in the conditions of today, dies hard. It influences public attitudes.
It seems to me that the contemporary manifestation of it is that
Members should be paid, but not paid adequately. That is not a
principle of great logical merit, but it is a principle of powerful
effect. I would make clear at the outset, both to the House and
the country, that the Government's view is that Members of Parliament
should be adequately paid. Hon. Members occupy a position of prestige,
influence and responsibility and that position should be reflected
in their remuneration. Furthermore, the Government believe that
ad hoc arrangements by which hon. Members' salaries are reviewed
once in each Parliament are no longer satisfactory by themselves
in inflationary periods. It is therefore the Government's intention
that if the proposals that I have put before the House command
support Lord Boyle's committee should be requested to find one
or more professional analogues to which the pay of hon. Members
should be linked between reviews.[90]
In its response to this, the Body held to its view
that automatic linkage was not an appropriate solution to the
problem, but it said that it recognised the frustration of Members
about the unwillingness of governments to implement the Body's
recommendations. It therefore set out some ideas concerning what
sort of linkage might be established.[91]
In February 1981, the government established a select committee
to further examine the question, which proposed a link to average
earnings.[92]
When the government set out its proposals in relation to the uprating
of Members' pay following the next periodic report by the TSRB,
in July 1983, however, it accepted backbench amendments, proposed
by Edward Du Cann, to raise the level of the salary over four
years to the level recommended by the TSRB, and thereafter to
link pay directly to the civil service pay scale. The linkage
to civil service pay began in 1988. More detailed information
on pay and allowances since then is provided in the Library's
standard notes and other publications.
October 2011
This chart shows the value of the sum provided to
Members as salary over the period 1911-2011. It is included here
to show the fluctuations in the value of the salary over time,
particularly before 1971. It should be remembered that until 1971
a substantial part of the salary (all of it in some cases) was
treated as expenses, and therefore to compare the pre- and post-1971
situation it would be necessary to add in the sums available for
these purposes: however it should also be noted that the changing
conception of the role of a Member of Parliament also makes it
difficult to compare in any straightforward way their remuneration
across the century.
Chart
THE VALUE OF THE MEMBERS' SALARY FROM 1911-2011
IN CONSTANT 2011 PRICES (House of Commons Library)

23 The debate was on 10 August 1911: HC Deb 10 August
1911 vol 29 cc1365-483. In the division on the main question the
government won 256-158. Back
24
G R Searle, Corruption in British Politics, 1895-1930,
Oxford, Oxford University Press, 1987, pp 108-9. Lee, later Viscount
Lee of Fareham, was the man who donated Chequers to the state
in 1917. Back
25
HC Deb 10 August 1911 vol 29 c.1391. Back
26
Frank Meyer, in 1914, quoted in Searle, Corruption in British
Politics, p 109. Back
27
HC Deb 10 August 1911, vol 29, c 1383. Back
28
HC Deb 10 August 1911 vol 29 c 1382. Back
29
10 August 1911. Although as the TSRB said in its 1971 report,
the relevant grade was that of Principal. Back
30
Under section 3 of the Finance Act 1913 the Treasury was empowered
to fix a sum representing a fair equivalent to the annual average
expended "wholly, exclusively and necessarily in the performance
of the duties in respect of which the salary is payable, and a
1913 minute fixed this sum as £100 in respect of Members
of Parliament": Back
31
HC Deb 05 March 1919 vol 113 cc515-29; HC Deb 14 July 1919 vol
118 c36. For the effect of inflation, see the chart in the appendix
to this note. Back
32
HC Deb 26 November 1920 vol 135 cc817-27. Back
33
For the appointment of the committee, see HC Deb 26 November 1920,
vol 135 cc817-27Report from the Select Committee on Members' Expenses,
HC (1920) 255. Back
34
QQ 324, 437. See also QQ 101-17. Back
35
Q 359. Back
36
Q 370. Back
37
Q 371. Back
38
Q82. Back
39
Q 84. Back
40
Q 170. Back
41
In the words of G.R. Lane-Fox MP, Q. 520. See also Sir John Butcher,
Q 641. Back
42
HC (1920) 255. Back
43
Note by the Board of Inland Revenue on Expenses of Members of
Parliament, May 1921, Cmd. 1352. Back
44
HC Deb 01 June 1921 vol 142 cc1087-153. Back
45
HC Deb 23 June 1921 vol 143 cc1541-3. The clerk of the House said
in 1945 that the system for travelling expenses had been put into
operation for a week when the vote was defeated in the House:
HC (1945-46) Q. 235: see also HC Deb 03 June 1921 vol 142 c1402. Back
46
HC Deb 25 February 1924 vol 170 c35; HC Deb 19 February 1924 vol
169 c1533; HC Deb 26 February 1924 vol 170 c299W; HC Deb 10 March
1924 vol 170 cc1899-900; HC Deb 13 May 1924 vol 173 c1159W; HC
Deb 24 July 1924 vol 176 cc1505-7; HC Deb 05 August 1924 vol 176
cc2745-6. Back
47
HC Deb 11 September 1931 vol 256 cc419-90; HL Deb 30 September
1931 vol 82 cc168-245. Back
48
HC Deb 07 April 1937 vol 322 cc180-1. Baldwin expanded slightly
on the format his inquiries would take in the debate on the Ministers
of the Crown Bill on 12 April 1937. Back
49
HC Deb 27 May 1937 vol 324 cc425-6. Back
50
HC Deb 22 June 1937 vol 325 cc1049-122. The vote was 325-17. The
resolution was moved by Neville Chamberlain, who had replaced
Baldwin as prime minister on 28 May 1937. Back
51
Para 7. Back
52
Air and sea travel had also been included from 1945. Back
53
On a division, 345-26: Back
54
For complaints about the situation, especially from Mr Arthur
Lewis see HC Deb 16 March 1953 vol 512 c170W (in which Boyd-Carpenter
gave the current value of the £400 original payment as less
than £1,500, in response to a question from Arthur Lewis);
HC Deb 17 March 1953 vol 512 c174W; HC Deb 20 March 1953 vol 513-c45W;
HC Deb 06 July 1953 vol 517 c66W; HC Deb 07 July 1953 vol 517
cc1043-5. HC Deb 23 July 1953 vol 518 cc589-90. Back
55
In the debate on 22 June 1937, Chamberlain indicated openness
to the idea of a pension for Members, but told the House first
that it would require legislation, and secondly that it would
require further consideration. A scheme was established under
the House of Commons Members' Fund Act 1939, although this was
a fund for the relief of hardship of former Members, rather than
a pension. Back
56
HC (1953-54), 72, para 62. Back
57
HC Deb 14 April 1954 vol 526 cc1150-2. Back
58
HC Deb 13 May 1954 vol 527 cc1439-1562. Back
59
Eg: any subterfuge that is attempted means that we shall be creating
more inequalities and injustices than would occur by a straight
increase' (John McGovern); 'I should have preferred a flat increase,
and I say quite frankly to my right hon. Friend that I believe
that a number of my hon. Friends and the Government have been
unduly scared by the reactions of popular opinion' (Henry Raikes). Back
60
HC Deb 24 May 1954 vol 528 cc30-157. Back
61
HC Deb 08 July 1954 vol 529 cc2347-9. Back
62
HC Deb 16 July 1954 vol 530 cc68-70W. Back
63
HC Deb 12 July 1956 vol 556 cc607-720. Back
64
For continuing pressure (especially by Mr Arthur Lewis) in the
interim, see e.g. HC Deb 06 March 1957 vol 566 cc78-9W; HC Deb
05 March 1957 vol 566 cc176-7; HC Deb 14 March 1957 vol 566 cc1308-9. Back
65
Although at the same time he introduced the Lords' daily attendance
allowance. Back
66
HC Deb 09 July 1957 vol 573 cc227-49. Back
67
One Member referred to Members being subject to a 'pay pause'
in the Debate on the Address in 1961: HC Deb 01 November 1961
vol 648 cc166-311; an all party-deputation visited the prime minister
on the subject in late 1962: HC Deb 20 December 1962 vol 669 cc234-5W. Back
68
HC Deb 19 December 1963 vol 686 cc1441-5; Edward Short, Whip
to Wilson (1989), 77. Back
69
The House of Commons Services and Facilities edited by
Michael Rush and Malcolm Shaw (for the SPG, 1974), 168. Back
70
Paras 29-33. Back
71
Para 42. Back
72
Para 54. Back
73
Short, Whip to Wilson, 77-8. As Selwyn Lloyd observed,
when responding to the resolution, "some quite embarrassing
Amendments could have been thought up about the timing and the
amount. We take the view, rightly or wrongly, that though responsibility
rests with the Government, this is a House of Commons matter and
divisions on party lines are not really in the interests of Parliament."
HC Deb 18 December 1964 vol 704 cc739. Back
74
William Shepherd ' HC Deb 18 December 1964 vol 704 c809. As he
commented, the reason for this continued division of salary into
salary and a notional amount expected to cover expenses was to
provide a benchmark for the sum Ministers would receive in respect
of their parliamentary expenses, in view of the fact that they
were not entitled to a Member of Parliament's salary. Back
75
See HC Deb 05 May 1969 vol 783 cc40-4W for a comparison of Members'
emoluments with those available in other countries. Back
76
HC Deb 18 December 1969 vol 793 cc1693-722. Back
77
A suggestion that it had previously rejected: see Rush and Shaw,
The House of Commons: Services and Facilities, 192;
HC Deb 24 July 1969 vol 787 cc474-6W. Back
78
The House of Commons (Conditions of Service) Bill, Bill 30 of
Session 1970-71: Rush and Shaw, The House of Commons: Services
and Facilities, 192. Back
79
HC Deb. 4 Dec. 1970, vol 807, cc 1721-5 Back
80
Review body on Top Salaries, First Report: Ministers of the Crown
and Members of Parliament, Dec. 1971, Cmnd 4836, para 6. Back
81
Para 22. Back
82
Para 27 Back
83
Para 28. Back
84
Para 35. Back
85
HC Deb 20 December 1971 vol
828 cc1132-1251. The government previously announced its acceptance
of the report on 6 December. Back
86
HC Deb 21 May 1974 vol 874
cc194-8. Back
87
HC Deb 19 December 1974 vol 883 cc1821-30. Back
88
Eg, HC Deb 23 July 1976 vol
915 cc2337-47. Back
89
HC Deb 16 July 1975 vol 895
cc1503-15; HC Deb 22 July 1975 vol 896 cc441-516. Back
90
HC Deb 11 July 1979, vol. 970, cc. 479-80. Back
91
Top Salaries Review Board, Report No 12 (June 1979), Cmnd. 7598,
chapter 5. Back
92
HC (1981-2) 208. Back
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