Nationalised Industries (Chairmen's Salaries) (Hansard, 29 April 1969)

§ 3. Mr. Lane
asked the Minister of Power, having regard to the National Board for Prices and Incomes Report, whether he proposes to increase the salary of the Chairman of the National Coal Board; and by how much.

§ 4. Mr. Kenneth Baker
asked the Minister of Power, having regard to the National Board for Prices and Incomes Report, whether he proposes to increase 1129 the salary of the Chairman of the Electricity Council, and by how much.

§ 7. Sir G. Nabarro
asked the Minister of Power whether he will now make a statement on the 60 per cent. increase in salaries, from £12,500 to £20,000 per annum, recommended by the National Board for Prices and Incomes for chairmen of certain State fuel boards.

§ 8. Sir B. Rhys Williams
asked the Minister of Power, having regard to the National Board for Prices and Incomes Report, whether he proposes to increase the salary of the Chairman of the Gas Council; and by how much.

§ 10. Mr. Ridley
asked the Minister of Power if he will implement the National Board for Prices and Incomes' report on the salaries of top people in the nationalised industries under his control.

§ 44. Mr. Roy Hughes
asked the Minister of Power what plans he has to increase the salary of the Chairman of the British Steel Corporation; and if he will give an assurance that any increase will be in accordance with the Government's prices and incomes policy.

§ Mr. Mason
Generally, I would refer hon. Members to the Answer given to the hon. Member for Honiton (Mr. Emery) on 22nd April.—[Vol. 782, c. 50.]
As regards my hon. Friend's Question about the British Steel Corporation, I have now announced the reappointment of Lord Melchett as Chairman of the Corporation for a further period to 26th January, 1975, at a salary of £22,500 for the first year and £25,000 thereafter. At his own request, Lord Melchett has served so far on a personal salary of £16,000, considerably less than he was earning in the private sector and considerably less than the agreed range for the Deputy Chairmen.

§ Mr. Lane
Although I welcome the Government's acceptance in principle of the Prices and Incomes Board Report, is the right hon. Gentleman confident that the one increase to which the Government have so far committed themselves for the Chairman of the National Coal Board will be enough to offset the discrepancy between the public sector and the private in the salaries of senior executives just below the top level?

§ Mr. Mason
I have committed myself to most of the chairmen's increases, as recommended by the N.B.P.I. On the question of comparability, no doubt the hon. Gentleman knows that the Board did not go down that road. If it had compared public industry and the men in charge of these major responsibilities with those of private enterprise, its recommendations would have been in the region of £40,000 to £50,000 per chairman.

§ Sir G. Nabarro
Would the right hon. Gentleman explain why the extraordinary disparity between the salaries of the chairmen of these boards has now been further aggravated? Why are the chairmen of coal, gas, electricity and the railways getting £15,000 a year whereas Lord Melchett, for no apparent reason, is getting £25,000 and an increase of 56¼ per cent. on his existing salary? Is that the right hon. Gentleman's idea of a prices and incomes policy?

§ Mr. Mason
Because the N.B.P.I. recognised that the British Steel Corporation was a different industry. As my right hon. Friend the Minister of Transport said in 1967, it is a different industry. It is certainly very different from the nationalised domestic concerns of, for example, coal, gas and electricity.

§ Mr. Baker
Would the Minister care to deny reports in the Press that when these increases are implemented the various chairmen and senior managers concerned may have some of their allowances cut and that that would, in effect, eliminate their increases?

§ Mr. Mason
That is one recommendation in the Report on a subject which has still to be determined between the chairmen of the industries concerned—not all of them are concerned—and myself.

§ Mr. Ridley
Would the right hon. Gentleman explain why the steel chairman is to get so much more than the other fuel industry chairmen? Is it because the steel industry is supposed to be competitive whereas the other fuel industries are not, which was the reason given by Lord Melchett?

§ Mr. Mason
There are a number of reasons. The first is that steel is not a domestic nationalised industry like, for 1131 example, coal, gas and electricity. Secondly, most of it operates alongside a large private sector which contains 100,000 men and up to 200 firms. Thirdly, it must be internationally competitive. Fourthly, it must compete, particularly from the point of view of higher management, with private manufacturing as well.

§ Mr. Hughes
Does my right hon. Friend believe that patriotism should start at the top? What is the point of exhorting the likes of building workers and bus crews to stick to a 3½ per cent. norm while, at the same time, he sanctions increases of this character? Would not he agree that inconsistencies of this kind are resulting in the Government losing the support of thousands of working-class people throughout the country?

§ Mr. Mason
No, Sir. That is happening because of ill-informed comment such as that I have heard in the House. [Interruption.] Patriotism in this respect did start at the op. The Chairman of the British Steel Corporation voluntarily took a cut in his salary of £4,000 a year and two senior deputy chairmen and two full-time members of the Board voluntarily took a cut of 12½ per cent. No other members of senior management have done that in the last two years.

§ Mr. Palmer
On the question of comparability, does my right hon. Friend appreciate that the annual rate of capital investment in steel is very small indeed compared with, say, the electricity supply industry?

§ Mr. Mason
That is so only if one makes a comparison between steel and electricity as a whole—the C.E.G.B. and the 12 area boards.

§ Sir B. Rhys Williams
Would not the right hon. Gentleman agree that only by sharply reducing the rate of tax on earned income will the Government effectively be able to make sense of the salary structure of top management?

§ Mr. Atkinson
Was my right hon. Friend aware that when he was negotiating with Lord Melchett he was to be the first Minister to increase a recommendation made by the N.B.P.I.? Was he aware, while he was doing that, that he would cause a national outrage, particularly in the Labour movement? Did the Cabinet approve his decision?

§ Mr. Mason
I have, of course, noted the comments which my hon. Friend made during the weekend in which he referred to me as being too gutless to make a statement in the House. I have given him an opportunity today—

§ Mr. Shinwell
Why not debate it?

§ Mr. Mason
I should have thought that the salary of one chairman represented a subject on which I should not take up too much of the time of the House.
The N.B.P.I. pointed out in its Report that the level of pay in the British Steel Corporation was substantially higher than in other State enterprises and reflected in part its recent past as a separate group of private enterprises. The Select Committee on Nationalised Industries also emphatically said last year that we should not refer the matter to the Board but should pay the rate for the job. That is precisely what I have tried to do.

§ Sir J. Eden
Why has the right hon. Gentleman down-graded, by comparison, other chairmen of nationalised power industries in the face of the increase to the Chairman of the British Steel Corporation? What exactly are the criteria by which the right hon. Gentleman judges the degree of competitiveness of the industry?

§ Mr. Mason
I have not down-graded them. I have given them increases in accordance with the Board's wishes. I have already explained the differences between the Corporation and other industries.

§ Mr. Alfred Morris
What note, if any, do the Government take of additional paid employments held by the chairmen of nationalised boards? How many such additional employments do they now hold?

§ Mr. Mason
Chairmen must receive my specific permission and consent if they wish to take up such employments. If my hon. Friend will table a Question on the subject, no doubt I shall be able to give him the information he requires.

§ Sir G. Nabarro
On a point of order, Mr. Speaker. In view of the very unsatisfactory reply given by the Minister to Question No. 7, I beg to give notice 1133 that I shall raise this matter on the Adjournment.