HC Deb 04 July 1957 vol 572 cc1308-14
Mr. Gaitskell (by Private Notice)

asked the Prime Minister whether he can now make a statement on the remuneration of Members of Parliament and Ministers.

The Prime Minister (Mr. Harold Macmillan)

Yes, Sir. The House will recall that the Select Committee appointed in 1953 found that in modern conditions a Member of Parliament had to lay out, on the average, some £750 a year to meet expenses necessarily incurred in the course of carrying out his duties to his constituents and to the House. The Government recognise that the introduction of a sessional allowance was only a partial and temporary remedy; since, even at its maximum of about £280 a year, it leaves the total amount substantially below the figure recommended by the Select Committee.

Since the Select Committee reported, there have been exchanges between the Leaders of the three parties; and the Government have decided to propose to the House that the total emoluments of hon. Members of this House should be increased to £1,750 a year. The basic salary would remain unchanged at its present level of £1,000. But, in view of the Select Committee's findings, the Government consider it appropriate to add to it a sum of £750 which will take the place of the present sessional allowance.

Like the basic salary, this sum will be liable to tax. Hon. Members will be entitled, as hitherto, to claim that, before assessment of tax, the expenses incurred in the discharge of their Parliamentary duties shall be deducted from their gross emoluments of £1,750. The Resolution necessary to give effect to these proposals will be moved in the near future.

The Government propose, also, to deal with the reimbursement of expenses incurred by noble Lords other than Ministers in their attendance in another place. The Government accepted in principle, in debate in another place on 7th November last, that there ought to be some such reimbursement. It will be generally agreed that it is not right that attendance in another place should be limited to those who can not only afford to give their service without any remuneration, but who can meet out of their own resources the expenses inseparable from such service. The only assistance which Members of the other House at present receive is free rail travel to Westminster.

The Government now propose to allow Members of the other House to claim reimbursement up to a maximum of £3 3s. for each day of attendance. This payment will be a reimbursement of actual expenses arising out of unpaid service and will not, therefore, be liable to tax. The House will be asked to agree to a Resolution authorising this new payment.

The Government have also decided to increase the emoluments of certain Ministers. The Government propose that the salaries of Parliamentary Secretaries at £1,500 should be increased to £2,500 and that salaries of £3,000 should be increased to £3,750. The Government are taking this opportunity to propose that the Financial Secretary and the Economic Secretary to the Treasury should be remunerated on the level of Ministers of State.

There are, as the House knows, a number of salaries of less than £1,500, and these will be raised by £1,000. Salaries of £5,000 or above will not be increased. At present, Ministers in the House of Commons whose salaries are less than £5,000 are entitled to draw £500 of their Parliamentary salary. It is proposed that in future all Ministers in the House of Commons shall, whatever their salary, draw £750 of the total Parliamentary remuneration in addition to their Ministerial salaries. Since these changes generally will require legislation a Bill will be introduced as soon as possible.

The Government propose to take the opportunity presented by a Bill dealing with Ministerial salaries to include in it a Clause applying the terms of the Injury Warrant to Ministers while on duty. At present, Ministers are the only servants of the Crown for whom, or for whose dependants, there is no provision in the event of their death or injury on duty. The House will no doubt feel that provision should be made for hon. Members travelling on the business of the House. It would not be appropriate to apply the terms of the Injury Warrant to them, but arrangements will be made to cover them by insurance.

It is proposed to increase the salaries of the Chairman of Ways and Means in this House and the Chairman of Committees in another place to £3,250, and that of the Deputy-Chairman of Ways and Means to £2,500; and also, by agreement, to increase the salary of the Leader of the Opposition to £3,000. The Government also propose that the Chairman and Deputy-Chairman of Ways and Means and the Leader of the Opposition should be entitled to draw £750 of the gross Parliamentary remuneration instead of £500 as at present. A similar provision would seem to be appropriate in your case, Mr. Speaker.

Finally, the Government have decided that the long-deferred adjustment of the salaries of members of the boards of nationalised industries should now take place. A plan has been worked out. Without going into all the details now, I will give two figures to illustrate the order of the adjustments. The maximum salary of the chairman of a major board will be raised from £8,500 to £10,000, while that of a member of such a board will be raised from £5,000 to £7,000. In accordance with precedent—and, in some cases, with statutory requirements—the changes will be reported to Parliament in detail in due course.

A convenient date for these changes in emoluments and salaries would seem to be 1st July. The extension of the Injury Warrant will, of course, have to wait until the proposed Bill is law.

Mr. Gaitskell

Hon. Members will, no doubt, wish to study the details of the statement made by the Prime Minister, but I believe that there will be general -satisfaction that, after some considerable delay, these adjustments are now to be made. The case for an increase in the remuneration of hon. Members is generally recognised as being a very powerful one—indeed, was conceded in the last debate we had on this subject.

The same applies to junior Ministers. I have always felt it unreasonable that senior Ministers should be treated as if they were not Members of Parliament and unable, because they were not drawing a Parliamentary salary, to claim Parliamentary expenses. That is a matter which is now to be put right.

I regard the amount for the provision of subsistence allowances for noble Lords as reasonable and, indeed, necessary, and it has my full support.

As the Prime Minister has said, these matters—I mean the matters relating to the pay of Members and Ministers—were discussed between the Government and we on this side of the House and I should like to take the opportunity of expressing my personal appreciation to the right hon. Gentleman and to the Leader of the House for having reached this decision now.

Sir T. Moore

Is there not one omission in the admirable statement of the Prime Minister—the question of substantive pensions for hon. Members who are no longer able to fulfil their functions in this House or does that fall under another Statute?

The Prime Minister

My hon. Friend will remember that under the House of Commons Members' Fund Act, 1957, which, I think, became law only a few weeks ago, the Members' Fund is to receive a subvention of £10,000 in the current financial year from the Exchequer. I should have thought it better to wait and see how this works out before making any addition.

Mr. H. Morrison

Can the Prime Minister explain why there is the difference in the new figure for Members of Parliament between £1,000 and £750? Under the daily allowance arrangement there was a provision whereby hon. Members could draw the £2 and they were expected to declare that the expenditure was actually and necessarily incurred—if I remember rightly that was so—even if they were not here every day. If I am wrong, I have no doubt that I shall be corrected, but I thought that it was not particularly honest. Can the Prime Minister explain why it is necessary to make a distinction between the £1,000 element in the figure of £1,750 and the £750?

The Prime Minister

I am glad that the right hon. Gentleman has asked that question. I felt that there were two reasons. Of course, the whole of the £1,750 is subject to Income Tax, and claims must be made in the ordinary way, as with any other person in the whole community. There is no privileged position for Members of Parliament.

On the other hand, I think that the people of the country should recognise that this method of doing it, as it were, by adding £750 to the £1,000, is not an increase in salary in the sense of benefits accruing to Members, because so much of this, as the Select Committee showed, is for carrying on work of a rather special kind, living perhaps in two places and having to employ secretaries, which, in ordinary business or employment, would be paid by somebody else on their behalf. Therefore, I thought that it would be an advantage for all our sakes to make that as clear as possible to the nation.

On the second point, it has this advantage. While we think that it would be wrong for Ministers to draw their Parliamentary salaries—the whole of the £1,750—in addition to their salaries as Ministers, we think it reasonable, since they are not allowed to claim any expenditure which they have to spend as Members of Parliament, and since, by tradition, and rightly so, they may not use the Civil Service for private Parliamentary functions, to make the £750 available to them. I think that equity is met and convenience, also.

Mr. Pickthorn

May I ask what I think is one question, though I hope I may be forgiven if I put it in three paragraphs? First, when my right hon. Friend spoke of these changes necessitating a Bill, was it right to assume that these changes refer only to the changes about Ministerial remuneration? Secondly, can he tell us whether the arrangements for the House of Lords can be legally and constitutionally accomplished by the procedure that was used when remuneration was introduced for this House, that is to say, by Resolution, followed by an assumption that the words in the Appropriation Act mean something which they did not mean before? Thirdly, if the intention is, as I presume, that as far as this House goes the matter shall be settled by Resolution, can we be told when we shall have the debate upon that Resolution?

The Prime Minister

I think that the three questions really merge into two. The answer to the first and third is that I used the phrase— Since these changes generally will require legislation a Bill will be introduced. It is a little complicated. Some of these Ministerial changes, the great majority, require legislation; others, in fact, curiously enough, do not. We think that it is preferable to have everything to do with that put into the Bill, so that we have it clear that for anything to do with Ministers, officers, and so forth. There will then be a Resolution of this House dealing with the remuneration and emoluments of Members of the House of Commons. There will also be a Resolution and estimate in relation to Members of another place.

Mr. Holt

May I, on behalf of the Liberal Party, warmly welcome the comprehensive nature of the review which has taken place, including the increases in the salaries of the chairmen and other directors of the nationalised industries? May I ask the Prime Minister, particularly with reference to the increase in the pay of Members of Parliament, which is obviously a complete review—one where a Member is getting a more appropriate salary, and not just to make up for the loss in the value of money—whether he would not agree that in the House itself and in the country generally it would be better accepted, and would safeguard our own interests and the interests of the country, if, in future, the right hon. Gentleman does not support policies which lead to a further depreciation in the value of money?

The Prime Minister

That is a moral which we can perhaps all take to ourselves, but I have noted in various proposals of the Liberal Party suggestions for enormous increases of national expenditure on a great variety of subjects.

Perhaps I may be allowed to thank the Leader of the Opposition for the very kind things he said about the way this has been handled, and say that I hope that the right hon. Gentleman will not think it amiss if I add the hope that he will live to enjoy this slight addition to his salary for very many years to come.

Mr. Gaitskell

This exchange of compliments must at some time come to an end, but I cannot forbear reminding the Prime Minister of his great interest in the salary of the Leader of the Opposition.