CIVIL LIST SUPPLEMENTARY SUMS AND GOVERNMENT'S INCOMES POLICY (Hansard, 11 December 1975)

§ Mr. William Hamilton
I beg to move, That the clause be read a Second time.
In moving the Second Reading of this Bill last week the Prime Minister indicated that there was nothing in it that infringed the terms of the Government's incomes policy. He pointed out that 75 per cent. of the provision in the Civil List was for the wages of the Royal Household—for gardeners, kitchen-maids and the rest. However, there are a certain number at the top whose incomes have nothing to do with Civil Service rates.
I was in my constituency at the weekend, knocking on doors and hearing about individual cases, as I usually do, and I was asked to call on a working widow who had tax problems. Her situation is not irrelevant to the Bill. The right hon. Member for Down, South (Mr. Powell) has said that the Bill has to be seen in the context of the fight against inflation in which we are all, more or less, engaged. This widow showed me her pay slip for last month. Her gross 736 wage was £64, out of which she paid tax of more than £20. Her widow's pension was treated as unearned income.
In the debate last week, the Prime Minister talked some nonsense about somebody giving £150,000 to the annuitants. How can we be sure that the £150,000 will not be distributed in a way that infringes the Government's pay policy? I suggest that it must do so. If we take the number of people involved and divide that figure into £150,000, we find that it comes to well over £6 a week. Unlike the working widow in my constituency, the money for these individuals will be untaxed. They will be getting a substantial increase—well above the pay limits set by the Government—and it will be completely untaxed, because the money will be regarded as a gift from "A" to "B" within the Royal Family. It will not be subject to tax. That was made clear in evidence to the Civil List Select Committee in 1971 in relation to members of the Royal Family who are not annuitants. However, future increases to annuitants will be in the form of a gift from the Queen and will not be subject to the £6 limit or to tax.

§ Mr. David Howell (Guildford)
No doubt the Minister of State will answer the hon. Member's specific point. He knows that we find his views objectionable, but why does he continue to say something for which we can find very little corroboration in the Report of the Select Committee of which he was a member? The Report said: These annuities are specifically charged on the Consolidated Fund and are liable to tax in the ordinary way; but the Treasury in the exercise of their statutory powers exempt such part as in their opinion represents a fair equivalent of the average annual amount laid out and expended wholly, exclusively and necessarily in the performance of the duties in respect of which the annuities are payable. Why does the hon. Member continue to say they are untaxed, when the Select Committee's Report and several other authorities' point out that they are dealt with by the Treasury in the normal way?

§ Mr. Hamilton
The hon. Member should follow these matters more closely. I agree with what he said to a point. The annuitants specifically mentioned in the Civil List Act are those whose incomes are known. They are 100 per cent. tax-exempt because their earnings are 737 regarded by the Treasury as wholly incurred expenses. The £35,000 a year received by Princess Margaret is presumed to be all spent on expenses. The same is true of the £35,000 received by Princess Anne and of the Queen Mother, with her £95,000 a year. While in theory these incomes are taxed, in practice they are not taxed.

§ Dr. Glyn
Surely my hon. Friend the Member for Guildford (Mr. Howell) has explained that the position is no different from that of any other citizen who is able to say to the Inland Revenue This amount of money has been spent on public duties and I am, therefore, entitled to set it against my tax." The expenses of members of the Royal Family in proportion to their income is probably much higher, because they spend their time performing public duties.

§ Mr. Hamilton
The public at large will form their own conclusion on that. I read regularly every day the Court Circular—it is my favourite reading. If the hon. Gentleman looks at that, he will see how grossly overworked are some members of the Royal Family. Indeed, witnesses before the Civil List Select Committee said that members of the Royal Family incurred in expenses more than they received from annuities. Where do they get that money from? What are they living on if they spend more than the State gives them? There must be something wrong there. I find it difficult to believe that the Queen Mother is spending more than £95,000 on expenses.

§ The Chairman
Order. I am sorry to interrupt the hon. Member, but he is going beyond the strict terms of the amendment.

§ Mr. Hamilton
I am sorry, Mr. Thomas, but I was replying to the intervention.
In the Second Reading debate the Prime Minister referred to members of the Royal Family who were not annuitants under the terms of the Civil List Act 1972. At col. 1984 he referred to the Duke of Kent, Princess Alexandra and others who were provided for by a global sum within the Civil List Act 1972 which the Queen distributed at her discretion. Those people will not get increases pro- 738 vided for by the taxpayer. The Queen will give a sum which will be distributed among them. Those are the sums to which I am referring. The moneys hitherto provided by Parliament to members of the Royal Family who are not annuitants will increasingly be provided from the Queen's private resources. It is that part of the money which will not be taxed. If the hon. Member for Guildford (Mr. Howell) will take home with him and read the evidence given to the Civil List Select Committee, he will find that what I say is right. It is stated specifically that that money is in the form of a gift from one person to another. At the time when that report was published Princess Alexandra was getting £20,000 per year as a gift from the Queen—

§ The Chairman
Order. I am sorry to interrupt the hon. Member again, but the clause deals specifically with the moneys payable under the Bill and with nothing else.

§ Mr. Hamilton
I agree. I am trying at the same time to educate the hon. Member for Guildford and to keep in order. It is difficult to do both. If the hon. Gentleman will take the book home with him and read it tonight, we shall be able to have a chat next week.
The Minister of State must give an undertaking that in no circumstances will anyone in the Royal Household, from the top to the bottom, get more than the current going rate under the Government's incomes policy. The £6 limit has been observed by trade union leaders in an amazing way. The whole country hopes that the policy will work. It stands a much better chance of working if we get a lead from the top. The sort of lead the miners want is a statement that nobody in the Royal Household will get an increase of more than £6 a week and that the Government's incomes policy will be strictly adhered to.

§ Mr. James Dempsey (Coatbridge and Airdrie)
When my hon. Friend refers to "nobody", does he include all the household employees of the Royal Family, such as joiners, plumbers, Mrs. Mopps and cooks? If they are included, will my hon. Friend tell me whether he has arrived at any conclusion as to whether the global sum is more than the £6 ceilinghich has been fixed?

§ Mr. Hamilton
I dare say that the kitchen-maids, chauffeurs and similar employees deserve more than £6 a week, but that is the maximum under the Government's pay policy. It should be the maximum for everyone. My hon. Friend has made a good point. He might have tabled a new clause to provide that anyone employed in the Royal Household earning less than £20 or £30 a week should fall outside the incomes policy and be able to get more than £6 a week.
I am concerned with the people at the other end of the scale. They should be setting an example. After all, they say that they are the unifying force in the nation. They set the moral lead for the nation, and the nation is yearning for that lead to get us out of our difficulties.
I have had shoals of letters in the last week wishing me good luck and more power to my elbow. The Inland Revenue takes one-third of an income of £60 a month, yet we are producing this Bill. I feel that it is a sad commentary on the Labour Government that the first Bill to get on the statute book this Session, in probably the most difficult economic circumstances we have known since the 1930s, should deal with a specially privileged section of the community. It is a scandal and it will not get my support.

§ Mr. Denzil Davies
I hope that I can set my hon. Friend's mind at rest on the issues he has raised. As my right hon. Friend the Prime Minister said during the Second Reading debate and in February, any increases payable under the arrangements set out in the Bill will be entirely in line with the Government's incomes policy. That policy, however, is a voluntary one, and I think my hon. Friend will agree that it would be inconsistent, to say the least, to seek to apply to the Royal Household statutory restrictions which do not apply to other members of the community.
Wages and salaries in the Royal Household are, wherever possible, closely linked with comparable Civil Service rates, which are themselves negotiated with the Civil Service staff associations and unions. The additional money to be provided through the Royal Trustees will be subject to Government control in the normal way, and the Committee can be assured 740 that, in so far as the money is required to pay salaries and wages, the amounts will be limited so as to provide the increases approved for comparable grades in the Civil Service.
There are 347 full-time members of the Royal Household, officials and staff who will all be covered in one way or another by the Government's pay policy. Eight members of the Household are linked to Civil Service grades for whom increases were recommended under the Boyle Report. Eighty-three members of the Royal Household are linked to Civil Service grades ranging from typist to assistant secretary. Twenty messengers and domestic staff are linked to Civil Service or National Health Service grades. Two hundred and thirty-six domestic, garage and stable staff and gardeners are without a firm link to Civil Service grades but their pay increases follow strictly the percentage rate of increase to linked staff.
In so far as the expenditure is on wages and salaries, it will be covered by the Government's general counter-inflation policy. We believe that that policy should be voluntary. We do not believe that it would be right—as my hon. Friend seems to suggest—to make it a statutory policy for the employees of the Royal Household.
I ask the House to reject the amendment so that we can apply the voluntary policy to employees of the Royal Household as to other employees. I hope that my hon. Friend is satisfied with my assurance that we are applying the policy equally to employees of the Royal Household as to everyone else.

§ Mr. William Hamilton
May I press my hon. Friend a little further? Will he give me a categorical assurance that the annuitants will not get more than £6 a week increase in the next 12 months?

§ Rev. Ian Paisley (Antrim, North)
There is a point that is disturbing me. It was said that a widow's pension was taxable as unearned income. I understood that it was taxable as earned income. Will the hon. Gentleman elucidate that point?

§ Mr. Hamilton
I am not sure whether the Minister answered, but in no circumstances whatever should any member of the Royal Household from the top to the 741 bottom, get more than is allowed within the Government's income policy.

§ Mr. Denzil Davies
I made it clear that there are 347 full-time members of the Household, officials and staff, and they will all be subject to the controls under the Government's counter-inflation policy.

§ Mr. Hamilton
Does this include the annuitants? A nod will not be shown in the Official Report. My hon. Friend must get up and say "No".

§ Mr. Dennis Skinner (Bolsover)
As hon. Members will know, I take a somewhat different view from my hon. Friend the Member for Fife, Central (Mr. Hamilton) on incomes policy, because I have always taken the view that the people most affected are usually those who can be gathered together at the bottom end of the wages scale. The many other people at the top end cannot be monitored effectively, because nobody really knows what their wages are, as has been indicated in this case. Even if their wages could be monitored by Government officials—countless numbers would be needed for the purpose—the fact is that they get their income also in the form of perquisites of one kind or another, as well as by means of tax relief and so on. This has been amply demonstrated by my hon. Friend in the course of this very short debate.
Whereas I differ from my hon. Friend quite distinctly on the question of incomes policy, which is mainly directed against the people I represent, I am still a little unsure what the Minister is answering in respect of those at the very top end who cannot, in my view, be covered by the Government's present incomes policy or, for that matter, any incomes policy.

§ Mr. Denzil Davies
Perhaps I may repeat that the payments about which we are concerned in the Bill are in the main payments to members of the Royal Household. The annuitants to whom my hon. Friend the Member for Fife, Central (Mr. Hamilton) referred are not members of the Royal Household.
As my right hon. Friend the Prime Minister has said, we are concerned in the main with payments to the Royal Household for wages and salaries, and it is in relation to these payments that we are 742 debating the clause. The annuitants, I repeat, are not members of the Royal Household. We are concerned in the main with wages and salaries to the Royal Household, and all the members of it, from top to bottom, will be subject to the Government's counter-inflation policy.

§ Mr. Hamilton
That does not answer my question. The incomes policy either applies to everybody or it does not. The annuitants might not come within the terms of the Bill but the wages policy covers everybody. Perhaps the Minister will risk being out of order and tell me whether the annuitants will be inside the incomes policy or not.