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Lord Hunt of Kings Heath: My Lords, so far as concerns obstetrics and gynaecology, the noble Lord will know that the Government have been in discussion with the president of the Royal College of Obstetricians and Gynaecologists. We are looking closely at a range of proposals to address that issue and the way forward. So far as concerns the OECD report, my understanding is that that information was based on 1996 statistics and therefore, I believe, comes under the responsibility of the party of the noble Lord.

Pension Increase: Basis of Calculation

2.59 p.m.

Lord Brabazon of Tara asked Her Majesty's Government:

Lord McIntosh of Haringey: My Lords, the increase in prices in the year to September is used as the basis for the inflation increase in both excise duties and pensions. Exactly the same methodology has been used this year as in previous years. Next year we shall index pensions by the out-turn for September 2000 RPI, which we forecast at 3.4 per cent.

Lord Brabazon of Tara: My Lords, I am grateful to the Minister for that reply. However, in his Budget Statement the Chancellor said that he was raising both pensions and petrol tax in line with inflation. Why did he not go on to say that he was using two completely different measures of inflation; that is, petrol at 3.3 per cent and pensions at 1.1 per cent? How can he possibly justify using two completely different measures in one Budget Statement? Is that not a scam of epic proportions, even for this Chancellor? Is the Minister aware that, had pensions been increased by the same rate as petrol, they would now by rising by £2.25 per week instead of a measly 75 pence per week?

Lord McIntosh of Haringey: My Lords, pensions have always been raised on the basis of the out-turn in September figures. Excise duties were raised in the July 1997 Budget, which we had to introduce when we came into office, on the basis of the forecast. In order not to count the same year twice, we continued with the forecast base, which explains the difference. However, the noble Lord refers to this year's figures. He should recognise that these matters balance out. Last year, the excise duties were indexed by 1.3 per cent and personal allowances by 3.2 per cent. Next year, we shall index pensions by the out-turn for the September 2000 RPI, which we forecast at 3.4 per cent. On the whole, over the years the Treasury loses out and pensioners gain.

Lord Mackay of Ardbrecknish: My Lords, has the Minister told the Bank of England that inflation will rise by well over 3 per cent? According to the rules laid down in the Act of Parliament which set up the Monetary Policy Committee, I should have thought

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that that would put the jobs of its members at risk. However, leaving aside that interesting answer from the Minister, does he believe that it is a good defence to say that when the Chancellor suggested using the same rate of inflation, he then went on to use two rates? Is that not a case of double standards? Those are not my words. It was the Daily Record, the determinedly Labour paper in Scotland, read by all the Chancellor's constituents in Dunfermline, which accused the Chancellor of double standards. Is the Daily Record right or wrong?

Lord McIntosh of Haringey: My Lords, when the noble Lord asks me a question and then proposes to leave it on one side, I am not sure whether or not he wishes me to answer. I shall answer, because I always answer his questions when they are serious. As he very well knows, the figure of 3.4 per cent which appears in the Red Book was announced at the time of the Budget. The answer to the second question is that I am not responsible for the Daily Record. I have explained exactly and precisely on what basis the September figures are calculated for each of the two purposes.

Lord Goodhart: My Lords, is it not the case that perhaps the main reason why the pension increase last year came out at such an appallingly, ridiculously low figure was that the index on which the increase was based included mortgage interest? Given that very few pensioners have mortgages and that, on the other hand, cuts in interest rates harm pensioners because the income from their savings is reduced, would it not be desirable, once pensioners have had a chance to catch up from the effects of last year, to base pension increases on an index which does not include mortgage interest?

Lord McIntosh of Haringey: My Lords, there are several different bases for calculating inflation. Some of them are unfair to some people and some are unfair to others. The RPIX version is used widely for a variety of purposes.

Baroness Hogg: My Lords, in the light of that answer, can the Minister explain why the Government have refused to subject their calculations of inflation to the independent scrutiny of the new statistics commission?

Lord McIntosh of Haringey: My Lords, I am not aware that that is the case. The new statistics commission is barely in existence. When it is, it will no doubt ask for the figures that it wants.

Lord Davies of Oldham: My Lords, does my noble friend recall whether, when they introduced the fuel escalator, the last Conservative government believed that pensions should be accelerated by the same amount?

Lord McIntosh of Haringey: My Lords, my noble friend points to the fact that it was the previous government who withdrew the earnings link and

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replaced it with a prices link for pensions. My noble friend is also aware that the full benefit of the provisions that have, and are being, made for pensioners in this Parliament amount to £6.5 billion whereas restoration of the earnings link would cost only £4.5 billion.

Lord Clark of Kempston: My Lords, surely the Minister agrees that the public, pensioners and motorists were misled by the Statement of the Chancellor of the Exchequer. It was a shabby trick to play on pensioners and motorists. Does the Minister agree that it is high time that Statements from whichever government department should be unassailably true?

Lord McIntosh of Haringey: My Lords, unless the noble Lord is saying that something that I have said this afternoon is not unassailably true, I believe that he should be careful about the words he uses.


Lord Carter: My Lords, at a convenient moment after 3.30 p.m. my noble friend the Leader of the House will, with the leave of the House, repeat a Statement which is being made in another place on the European Council at Feira.

House of Lords' Offices: Select Committee Report

3.6 p.m.

The Chairman of Committees (Lord Boston of Faversham): My Lords, I beg to move the Motion standing in my name on the Order Paper.

Moved, That the Fifth Report from the Select Committee be agreed to (HL Paper 70).--(The Chairman of Committees.)

Following is the report referred to:

    The Committee have met and been attended by the Clerk of the Parliaments and the Gentleman Usher of the Black Rod.

    1. Fast stream pay proposals

    The Committee agreed to new arrangements, developed in conjunction with the House of Commons, for paying fast-stream Clerks and Library Clerks.

    2. Salaries of the Chairman and Principal Deputy Chairman of Committees

    The Committee approved revised salaries with effect from 1 April 2000.

    3. Lords' reimbursement allowances

    The Committee was informed that from 1 April 2000 the motor mileage allowance had been up-rated in line with the retail prices index to 52.5 pence per mile for the first 20,000 miles and 24.2 pence per mile thereafter; and that the bicycle allowance had been up-rated to 6.7 pence per mile.

    4. Appointment of a management consultant

    The Committee approved the appointment of a management consultant, Mr Michael Braithwaite, to undertake a review of the management structure and the structure, including the Committee structure, for taking decisions about the services of the House and

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    other domestic matters, which were introduced in the House of Lords in 1991-92 following the Ibbs reforms in the House of Commons.

    5. Commercial activities

    The Committee agreed that the House of Lords should not be used by Members as a business address nor the name used for the promotion of any commercial activity.

Lord Barnett: My Lords, I believe that the House is being asked to approve a Motion which, frankly, is ridiculous. Perhaps I may trouble the House with a few questions that I wish to ask the Chairman of Committees. First, item 1 of the report states that:

    "The Committee agreed to new arrangements"--

it does not tell us what the new arrangements are--

    "for paying fast-stream Clerks",

but it does not tell us who fast-stream Clerks are.

Item 2 tells us that the committee "approved revised salaries" for the Chairman and Principal Deputy Chairman. It does not tell us what those revised salaries are and by what amount they have been increased.

Item 3, regarding Lords' reimbursement allowances, tells us that the Committee was informed that from 1st April 2000 (in other words, backdated) the motor mileage allowance has been uprated in line with the retail prices index--not the RPIX but the retail prices index. There will also be an increase in the bicycle allowance, which has been uprated to 6.7p per mile. However, no reference is made to noble Lords' other allowances, which I should have thought were much more important than those two items.

What of the committee? I gather that it is composed of the usual channels, and of course we know who they are. They are part of the House authorities. We read that the Clerk of the Parliaments and the Gentleman Usher of the Black Rod were also in attendance at that meeting.

The worst item that we are asked to approve is item 4, which concerns the appointment of a management consultant. We are told that he is a certain gentleman called Michael Braithwaite, who will,

    "undertake a review of the management structure and the structure, including the Committee structure, for taking decisions about the services of the House".

We are not told what salary that gentleman will receive, or why we need a management consultant when a small committee of your Lordships' House could, at no cost at all, do a job that we understand.

I am sorry to trouble the House with those four items, but it is nonsense and does a disservice to the House to ask us to approve a document when we have been given so little information. I should be obliged if the Chairman of Committees could answer some of my questions.

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