HC Deb 19 December 1974 vol 883 cc1821-30
The Lord President of the Council and Leader of the House of Commons (Mr. Edward Short)

The Government have decided to invite Lord Boyle's Top Salaries Review Body to undertake a full review of Members' salaries and allowances. The review body will also be invited this time to make recommendations on Peers' expenses allowances.

The last full review, as hon. Members will know, was undertaken by the Top Salaries Review Body in 1971 and resulted in increases in Members' remuneration from 1st January 1972. In its report the review body suggested that parliamentary remuneration should be subject to major reviews every four years—that is, roughly corresponding to once in the lifetime of a Parliament—but it suggested that interim adjustments should be considered between major reviews.

Apart from the updating of some of the rates of allowances in August this year, there have been no other interim adjustments and the parliamentary salary has remained unchanged now for practically three years. As a result. Members' salaries have fallen very seriously behind the rise in the cost of living. In fact, by October the retail prices index had risen by 36½ per cent. since January 1972 while Members' salary has remained static at £4,500. The Government are conscious of the serious financial strain under which many Members are now labouring and also acknowledge the restraint they have exercised during the last year or so.

The terms of reference of the review will be so drawn as to provide full scope to the review body to cover all aspects of Parliamentary remuneration, allowances and pensions. We shall ask the review body particularly to consider a mechanism whereby Members' remuneration can be regularly reviewed in future so that they do not suffer greater hardship from inflation than the rest of the community. In this connection many Members feel that their salary should be linked to a particular Civil Service salary and the review body will be reminded of this option.

The matter of Peers' expenses allowance is also being referred to the review body because the present system of a single rate of allowance is considered unsatisfactory in that it does not meet the varying circumstances of Peers attending Parliament. Some attend from distant parts of the country, while for others the House is comparatively nearby.

It is hoped that the review body will commence its work early in January, but as this is to be a thoroughgoing review, Members cannot expect the full report to be available for some time. I am sure, however, that Lord Boyle and his colleagues will, as they have always done in the past, set about their task speedily and with the utmost care and due consideration to all the factors.

Hon. Members will recall that in my statement on 29th July I announced the Government's proposals for assistance to back benchers, for Opposition parties and for political parties outside Westminster. First of all I said that I proposed to set up a Select Committee to examine the present support facilities available to back benchers.

I have today put down on the Order Paper a motion proposing the establishment of this Committee. Its terms of reference will be: To examine the present support facilities available to private Members in carrying out their duties in this House, in particular research assistance on matters before Parliament, and to make recommendations for such improvements as they consider necessary". This Select Committee will have a most important task before it on behalf of back benchers.

Next I referred to the Government's belief in the need to strengthen our parliamentary democracy, and said that we proposed that an independent committee should examine the question whether or not public funds should be made available to political parties for their work outside Parliament. I have had consultations with all the parties in the House, and the committee will be set up shortly after Christmas. The terms of reference will be To consider whether, in the interests of parliamentary democracy, prevision should be made from public funds to assist political parties in carrying out their functions outside Parliament: to examine the practice of other parliamentary democracies in this field, and to make recommendations as to the scope of political activities to which any such provision should relate and the method of its allocation". Also in my statement in July I told the House that I would bring forward in the autumn firm proposals for the provision of financial assistance to Opposition parties in the House. Any formula on which this is based must take into account both seats in the House and votes at the last election—votes because there is a correlation between votes won and the volume of correspondence to be dealt with in the offices of the Opposition parties. In the case of the main Opposition, I have applied an upper limit— which I shall mention shortly—based on the costing of an adequate Parliamentary Office, including research facilities for the Leader of the Opposition. The scheme would be confined to parties having either: two Members elected to the House at the previous General Election; or one Member elected and a minimum of 150,000 votes cast for it at the previous General Election.

The formula of £500 per seat and £1 for every 200 votes achieves the following results: Conservative Party, £150,000— which, as I have pointed out, is a cut-off below the figure produced by the formula, a cut-off based on the costing—Liberal Party, £33,250 ; Scottish National Party, £9,700 ; United Ulster Unionists, £7,050 ; Plaid Cymru, £2,300 ; SDLP, £1,270.

The allocation of funds between the two Houses is a matter for the parties themselves to decide, but I would consider it appropriate for a percentage of these funds to be allocated for the Opposition's work in the House of Lords.

These are maximum amounts and the parties will be accountable for expenditure within these limits to the Accounting Officer of the House.

I believe that these proposals will strengthen the effectiveness and independence of Members of Parliament, of Parliament itself and of the political parties and in so doing will greatly strengthen democracy in this country.

Mr. Peyton

I am sure that the whole House will be obliged to the right hon. Gentleman for the statement that he has just made and will wish to reflect upon some of the very important issues which have been raised.

I recognise that this is a very difficult and thorny issue for the Government to handle. I assure the right hon. Gentleman that the Opposition have no wish whatever to add to his difficulties or to play politics with them. However, at the same time, while recognising that now is never the right time to take these decisions, 1 hope that the right hon. Gentleman will agree that in the teeth of the real crisis that threatens to engulf this country it is important not to give the impression that our difficulties are just illusory.

Mr. Short

I am grateful for the first part of what the right hon. Gentleman said. No one is more aware of the country's problems than I am. Nevertheless, Members of Parliament have had no increase in salary for a very long time —for much longer than any other group in the community. I think that the time has come when salaries should be reviewed.

Mr. Ogden

My right hon. Friend has responded to the financial pressures not only on individual Members but on political parties. May I express my thanks for that part of the statement referring to the salaries of Members of Parliament? My bank manager will be equally and highly delighted.

Will my right hon. Friend confirm that if any Member of Parliament feels that he does not need the increase, he has no need to take it? Will he emphasise again that even if the salaries of Members of Parliament are brought back to the 1970 level, they will still not reach the 1964 level? We have shown more restraint than any other section of society for a long time.

Mr. David Steel

We are grateful to the right hon. Gentleman for the Christmas spirit in which he addressed the House this afternoon. Will the right hon. Gentleman confirm that, although it is right and proper that the Boyle Committee should review Members' salaries, the extent to which that recommendation should be implemented will be a matter for the House in the light of the economic circumstances then prevailing? Does he agree, as many of us feel, that it is right that greater priority should be given now to the necessary expenditure on facilities for Members of Parliament rather than to the salary level itself?

Mr. Short

Certainly. I confirm that the Government are not absolutely bound to accept a report from Lord Boyle's Committee. The Government pay very great attention to any recommendation made.

Mr. George Cunningham

Will the Leader of the House agree that the gap between the pay of Members of Parliament who are not Ministers and hon. Members who are Ministers is a delicate matter, and that in the interests of parliamentary democracy the gap should not be allowed to be too great? Can my right hon. Friend confirm what seems to be implied by his statement, that the remuneration of Ministers is not to be reviewed?

Mr. Short

I have made no statement concerning Ministers. The Government are still looking at that matter, and an announcement will be made in due course.

Mr. Donald Stewart

I thank the right hon. Gentleman for the announcement he has made. Regarding the announcement of assistance to smaller parties, does he accept that, despite the present difficulties, it is all the more essential that democracy should be strengthened and that we should regard this as going some considerable way to that end?

Mr. Short

I note what the hon. Gentleman said. Opposition parties in the House are at a disadvantage compared with the Government, who have the whole machinery of the Civil Service behind them. I feel that a healthy House of Commons is a very important element in our democracy.

Mr. Evelyn King

Is it not a fact that Parliament is the only body having the right to fix the salaries of its Members? Whatever the level fixed, is it not undesirable and embarrassing that that should be so? Therefore, could the view be conveyed to Lord Boyle that hon. Members' salaries should be linked to those of civil servants or other officials, once and for all? Thereafter the matter need not again be discussed.

Mr. Short

I said that this option would be put to Lord Boyle. We suggest that Lord Boyle should propose some mechanism by means of which hon. Members' salaries can be reviewed regularly without a decision having to be taken by the Government.

Mrs. Wise

Does my right hon. Friend accept that the interests of democracy also make it necessary and valuable for hon. Members to be faced with problems similar to those faced day by day by their constituents? Some hon. Members believe that the best use which could be made of the Top Salaries Review Body would be to ensure the reduction of many top salaries paid, especially in a situation where there is still much stark poverty and where the House has not yet managed even to debate the Finer Report.

Mr. Short

I have spoken to a great many hon. Members privately about this matter. I do not think it is in the interests of democracy that so many hon. Members should suffer from the financial strain which they are now experiencing.

Mr. Hall-Davis

Does the Leader of the House accept that this is a particularly inappropriate moment for a review of hon. Members' salaries, and, what is more, that it will always be an inappropriate moment to review hon. Members' salaries if the interval is as long as three years, whether inflation is 5 per cent. or 25 per cent.? Will the right hon. Gentleman therefore convey to the review body that some hon. Members feel that it should not waste time considering whether there should be a more frequent review, or waste time considering linking, which I believe will present the same difficulties as the present system? Hon. Members want an annual review carried out by the review body taking into account the criteria normally used in deciding salaries in different walks of life.

Mr. Short

I agree with the hon. Gentleman. I know that there is never an appropriate time. I have been a Member of Parliament for 23 years and during that time someone has always said that the time was not appropriate. The time has now come when something must be done.

I suppose it would be open to Lord Boyle to submit an interim report, and to deal afterwards with the question of the mechanics for regular reviews, if he wished to do so. That is entirely a matter for him. I regard it as a matter of some importance that he should recommend to the House some machinery for ensuring that there are regular reviews, without having to decide what is the appropriate time.

Mr. English

Is my right hon. Friend aware that there is a considerable body of opinion, which I hope he will represent to the Boyle Committee, which suggests that instead of hon. Members' salaries being linked to a Civil Service grade, they should be linked to the average earnings index, so that as our constituents fix their own incomes they automatically fix those of hon. Members?

Mr. Short

It is open to Lord Boyle to consider that. I might point out that it is open to my hon. Friend, or anybody else, to submit evidence to Lord Boyle's Committee.

Mr. Powell

Does not the right hon. Gentleman accept that the payment of public money to Opposition parties in the House represents an innovation so important that it should be debated by the House? Will he therefore give an assurance that this proposal will not be implemented until such an opportunity has occurred?

Mr. Short

This is a considerable innovation and, I think, a very important one. It is a significant step forward for democracy. Certainly it will require a motion before the House, which I shall put down shortly. That motion will, I hope, be debated very shortly after we return from the Christmas Recess.

Mr. William Hamilton

Arising out of that answer, will the right hon. Gentleman give an assurance that the motion will be worded in a sufficiently wide manner so as to enable us to debate the whole matter of the relationship between the executive and the legislature, because to many of us that seems to be the more fundamental issue, while the financial aspects are relatively minor?

Can my right hon. Friend give us an assurance that the House will give a lead to the country in saying that hon. Members will accept no more than an agreed percentage per year, instead of waiting for a period of four or five years, and then incurring the acrimony of the public because hon. Members seem to be giving themselves an unreasonable increase?

Mr. Short

I agree that the relationship between the Executive and Parliament is one of the most important elements in the whole concept of the sovereignty of Parliament. Whether that point will be debatable on the motion, I do not know. I think probably not, since that is a matter for you, Mr. Speaker, because the motion will deal with the mechanics of aid to Opposition parties.

As regards my hon. Friend's second point concerning a percentage, it will be open to Lord Boyle to propose something of that kind. Let us wait and see what he proposes.

Mr. Tugendhat

Will the Leader of the House accept my congratulations on his sensible and robust defence of the proposals he is putting forward, which I think deserve the robustness he gave to them?

Would the right hon. Gentleman assure the House that he will not impose a self-denying ordinance on Ministers? An absurd situation is created if a Cabinet Minister is paid less than a civil servant, who is in turn paid less than heads of nationalised industries, whose salaries in turn are much lower than salaries prevalent elsewhere? If individual members of the Government wish to forgo salary increases, it is up to them to do so. It is important that the nation should at least see what the rate for the job ought to be.

Mr. Short

I am grateful to the hon. Gentleman for what he has said. However, I think that the whole House will agree that the matter is more pressing in the case of Members who are not Ministers. But the other matter is being looked at. We shall have something to say about it in due course.

Mr. Wigley

Is the right hon. Gentleman aware that, although those of us in minority parties are grateful for small mercies, we would be more grateful for larger ones? Is he aware, further, that if my party won all the seats in Wales, we should still get only sufficient funds to employ 10 research assistants—one for every two portfolios? Does the right hon. Gentleman think that this formula is satisfactory to meet the circumstances leading to the establishment of separate assemblies for Wales and Scotland, and is he satisfied with a situation where the combined money of Plaid Cymru and of the Scottish National Party is only a third of that of the Liberal Party, although together we have more Members?

Mr. Short

We spent many months looking at different formulae, and we discussed the matter with a great many people. We decided that any formula must take account of both votes and seats —seats because the volume of correspondence coming into an Opposition Leader's office here is directly related to the number of votes in the previous election. I have been into this matter carefully. I am afraid that it has produced the result for the hon. Gentleman's party that I have given, but he is getting more than before.

Mr. Madden

As my right hon. Friend said, there is never an appropriate moment at which to increase the salaries of Members of Parliament. However, to do it now is one of the worst times imaginable. As a full-time Member of this House, may I ask my right hon. Friend to take steps to ensure that our allowances for research and secretarial assistance are given an emphasis to enable us to perform a proper scrutiny of the executive, which present arrangements do not allow? Will my right hon. Friend instruct the Boyle Committee to defer its examination of our salaries for at least a year and to concentrate on allowances for secretarial and research assistance?

Mr. Short

No, Sir. I will not do that. I feel that the coming year will be a difficult one for the country and that it will need a vigorous, virile, healthy House of Commons. I hope that what I have announced today will contribute to that and relieve a great many Members from the worry and strain of financial difficulties in which they find themselves at present.

Several Hon. Members

rose—

Mr. Speaker

Order. All these matters are debatable at a certain time. We have a very important debate later today. I think that we must move on.

Later—

Mr. Adley

On a point of order, Mr. Speaker. May I make a personal statement? Just now, in business questions, I raised with the Leader of the House the matter of an answer given to me yesterday by the Foreign and Commonwealth Secretary. It would be unkind and unfair if I did not point out that on leaving the Chamber I found on the Message Board a letter waiting for me from the Foreign Secretary which was most generous and unprompted. I want to make sure that the record shows that I consider that I have received from the Foreign Secretary the apology which I sought.