HC Deb 16 July 1975 vol 895 cc1503-15
The Lord President of the Council and Leader of the House of Commons (Mr. Edward Short)

With permission, Mr. Speaker, I will make a statement about the pay and allowances of Members of Parliament.

The House will recall that on 19th December 1974 I announced that parliamentary pay and allowances would be the subject of an independent review by the Top Salaries Review Body. Part I of its report is published today as a Command Paper, No. 6136. Copies are available in the Vote Office.

The Government—and I am sure that I speak for the whole House—are very grateful to Lord Boyle and his colleagues for all the hard work that has gone into the preparation of this report. This part of the report deals with the parliamentary salary, including the part of their parliamentary salaries drawn by Ministers, and the various allowances payable to Members. The Review Body intends to report on Members' pensions, Ministerial salaries, the rates and conditions of payment of Peers' expenses allowances and some miscellaneous questions affecting other allowances later in the year.

In the report published today, the Review Body has recommended that the salary of a Member of Parliament should be increased from £4,500 to £8,000 a year—an increase of 78 per cent. This figure not only takes into account the increase in the Retail Price Index since 1st January 1972 up to the end of June, which was estimated at 66 per cent., but also recognises the greater and still growing demands of parliamentary work since the last review in 1971.

At present the amount of Members' salary payable to Ministers is £3,000, and the Review Body has recommended that this element should be increased to £5,000 a year.

The Review Body has recommended further increases in the various maximum rates of Members' allowances which can be drawn in relation to actual costs incurred. These are as follows: secretarial allowance from £1,750 to £3,200 a year; additional costs allowance from £1,050 to £1,350 a year; London supplement from £228 to £340 a year; car mileage allowance from 7.7p to 10.2p a mile; number of free travel vouchers to Westminster for the wife or husband of a Member to be increased from 10 to 15 a year.

It has also recommended that the additional costs allowance, the London supplement and the car mileage allowance should in future be adjusted automatically with corresponding increases in the appropriate Civil Service rates.

The Review Body has recommended against any form of link between Members' salaries and any other salary scale or index on the grounds that the MP's job is unique and cannot be compared with any other for the purpose of establishing a link in pay. It suggests that if such a link with another group were created it would merely transfer the sensitivity about Members' pay to that of the group to which MPs were linked. What the Review Body has recommended instead is a two-yearly review.

The Government have been examining these proposals over the past few weeks against the background of the discussions on the counter-inflation policy announced by my right hon. Friend the Prime Minister last week. The Government accept that the Boyle recommendations are justified. So far as allowances are concerned, the recommendations are based on a fair and thorough investigation of the costs involved, and they will be implemented in full from 13th June.

I turn to the salary recommendations. The parliamentary salary has remained frozen for three and a half years, while the RPI has increased by 66 per cent. We accept that an increase in Members' salary is clearly justified, but at a time when the Government have announced their anti-inflation measures we could not support a recommendation that Members should receive a 78 per cent. increase. We therefore propose that Members' salaries should be increased by £1,250—

Hon. Members

Disgraceful.

Mr. Nicholas Winterton (Macclesfield)

Jam tomorrow.

Mr. Short

—instead of the £3,500 recommended, giving a new salary of £5,750. The increase will be implemented from 13th June 1975.

The Government do not believe, however, that pension rights should be prejudiced, and will therefore propose arrangements which will allow Members' pensions to be based on the figure of £8,000 recommended by the Review Body The method of implementing this proposal will require further study, and we shall announce the details in due course.

On the question of how Members' salaries should be determined in future, as my right hon. Friend the Prime Minister said on 3rd July, we shall be initiating consultations designed to achieve the broadest possible coverage of opinion of front benchers aid back benchers on whether the time has come for Members' pay to be directly and automatically linked with other relevant salaries in a way that would take the whole question out of the range of external inquiries. If this proves to be the wish of the House, the Government will very happily make the necessary arrangements.

With regard to Ministerial salaries, the House will recall that on 20th December 1974 my right hon. Friend the Prime Minister announced that all Ministerial salaries would be frozen until at least 1st January 1976. In relation to the recommendations of the report, the Government propose that there should be no increase in the amount of the parliamentary salary drawn by Cabinet Ministers who are also Members of this House. Ministers outside the Cabinet will receive an increase of £700 compared with the £2,000 recommended by the Review Body—the same proportion of the recommended increase proposed for Members' salaries.

Resolutions bringing these various proposals into effect will be put before the House at the earliest opportunity. I hope that they will command the full support of the House.

I fully understand that some Members may feel disappointment, but I do not doubt that everyone in this House accepts the gravity of the situation and the need for restraint. But some may ask how an increase of 28 per cent. shows restraint. To them I should point out that this is less than half the increase in the cost of living since Members' last increase in salary, and that during this time average earnings in the country have risen by 85 per cent. Had Members' pay been calculated on the basis of stages 2 and 3 of the previous Government's pay policy, plus an allowance for the cost of living between the end of that policy in July last year and 1st June this year, Members would have had a pay increase of £1,800 compared with the £1,250 the Government have proposed.

Members have therefore been asked in the national interest to make a very heavy sacrifice by accepting little more than one-third of the increases recommended by an independent review body. We have been urged from many quarters to set an example to the country. I believe that in accepting these recommendations, which involve a considerable loss of real income, we shall have done so.

Mr. Peyton

The Government can hardly expect to be congratulated on their handling of this affair.—[HON. MEMBERS: "Hear, hear."]—I have some questions to put, all of them short. Why, on this preeminently House of Commons matter, did the Government not consult anyone on this side of the House? Why have they not even shown us the Committee's report until now? We have only just seen it. How are they going to reconcile not the small print of the White Paper but what the Prime Minister was generally understood to be saying and meaning on Friday—about no special cases—with what they are doing now? Is the right hon. Gentleman aware that one thing certainly emerges—the Government will please no one?

Mr. Short

I tried to estimate last night what the right hon. Gentleman would say and I got it almost exactly right. On the question of consultation, I understand that we have followed exactly the practice on previous occasions. As far as I am aware, there has been no consultation on previous occasions. On the second point, the Government regard the increases as fully compatible with the pay policy requirements. The new pay limit of £6 applies to settlements with an operative date from the 1st August onwards and the TUC had advised that agreements with a date before this should be settled within the existing guidelines. Taking account of the fact that hon. Members have received no increase since January 1972, the proposed increases do fall within these guidelines.

Mr. Walter Johnson

Is my right hon. Friend aware that, much as all hon. Members need the extra money, this is surely the time for us to set an example to the nation, first by limiting our pay increase to £6 a week over the next 12 months and secondly by reducing the secretarial allowance? Would he look again at the living away from home allowance, because an increase is needed there? He has said that he will do something about Members paying pension contributions at the full level of the recommended salary. Would he accept that that is absolutely right in order to protect those hon. Members who will be leaving this House on retirement and those who will not be coming back after the next election?

Mr. Short

The living away from home allowance has been increased and the secretarial allowance will enable hon. Members who wish to do so to employ a full-time secretary and will help us to implement the very good report of the Select Committee dealing with Members' facilities. I make no apology for the pay increase. It is fully justified. Hon. Members deserve the increase. They have been very badly treated. I would be prepared to defend this increase anywhere in the country, and I hope that all hon. Members will be prepared to do likewise.

Mr. David Steel

Is the right hon. Gentleman aware that some of us who gave evidence to the Boyle Committee on the linking of pay are very disappointed that they have not accepted our suggestions? Will he accept that we welcome his statement that he will enter into immediate consultations and have the matter discussed in the House? Does he accept that the increases in actual expenses are right but should not be added to our salary, as has happened in some in some newspapers, who have suggested that this was our total remuneration? Can he say whether there will be a free vote on this question, as there may be different views in different parts of the House, and some of us take the view that if the Government's policy of a £6-a-week maximum increase for everyone else is to have any chance of success, we have no alternative but to set a rigorous example here?

Mr. Short

I share the hon. Member's views on linking and would be prepared to hear from any hon. Members on this subject. There will be a debate and I would welcome expressions of view then. If it is the wish of the House, we would be prepared to arrange linking so that this matter is dealt with automatically in future. On the question of expenses, the hon. Gentleman is absolutely right. Hon. Members must certify that they have spent these amounts before they can claim expenses, and these should not be added to salaries. They are not a salary increase. On the question of a free vote, I can speak only for this side of the House, but my right hon. Friend has told me that there will be a free vote for this side of the House.

Mr. Ashton

Does my right hon. Friend not recognise that the Committee was set up to take the question of MP's pay out of politics and that the Cabinet has virtually ratted on an independent arbitration award? If back benchers have to make do with a 27 per cent. increase to cover a period when the cost of living has increased by 66 per cent. why does not the Cabinet do the same? Will he ask the Prime Minister to reduce his salary to £11,430, which is 27 per cent. more than the £9,500 he was getting on the 1st January 1972 so that, as good Socialists, we have equal sacrifices for all?

Mr. Short

On the first point, I fully understand the great hardship suffered by hon. Members on both sides of the House. Let there be no doubt about that. This is not an arbitration award. The Committee is an independent review body not an arbitral body and the Government are not obliged to accept the findings of any of these Top Salary Review Bodies. With regard to the Cabinet's salaries, I am sure that my hon. Friend could not have heard me. The Cabinet has already announced that we shall take no increase and that the increases in the parliamentary element of Ministerial salaries will not be accepted by members of the Cabinet.

Sir Raymond Gower

While many of us recognise the Government's predicament, can the right hon. Gentleman explain why they delayed this report until the most inappropriate time? Can he give some assurance that in future there will not be such a delay and that the Government will bring forward these increases at the same time as other big claims are coming forward?

Mr. Short

The hon. Gentleman has been here long enough to know that there is never a right time. I have checked on previous reports from this body, and the time taken on this occasion is just about average. The recommendations have never previously been published in less than a month.

Mr. Ogden

Will my right hon. Friend thank Lord Boyle and his colleagues for their report and agree that the recommendations concerning the proper salary, status, pension provisions and linkage deserve the full support of every hon. Member? Will he also accept, however, that the miserable recommendations of the Cabinet to this House on the new salary scale pander only to the prejudices and ignorance of the uninformed inside or outside this House? Will he confirm that if any hon. Member feels that he neither needs nor deserves the increase he has no need to take it?

Mr. Short

That is a point of view which I know my hon. Friend holds strongly. He came to see me and explained his view, and I do not quarrel with him. But I must tell the House that this recommendation—and that is all it is; it will be a matter for the House itself to decide on a free vote—strikes a fair balance between the need for restraint, on the one hand, and the need to help hon. Members in their admitted difficulties, on the other hand.

Sir John Hall

Will the Leader of the House, through his right hon. Friends, suggest to trade unions, journalists and editors that, following the example set for them by Members of Parliament, they do not put in a further demand for an increase in wages and salaries for the next three and a half years and that when they do they accept a settlement which is less than half the rise in the cost of living over that period?

Mr. Short

With its usual fairness I am sure that the Press will report fully what the hon. Member said.

Mr. Arthur Lewis

May I develop the point raised by the hon. Member for Wycombe (Sir J. Hall)? Since most of the radio and television commentators and newspaper editors advise the Government to take no action on the Boyle Report, may I recommend that the Government accept that suggestion, provided that Members of Parliament get the same percentage or the same cash increases as the editors, the radio and television commentators and everyone else who is complaining about the size of our pay rise has had since January, 1972? I, personally, would settle for half of their expenses.

Mr. Short

My hon. Friend has information about the expenses of editors which I do not have, but I agree that it is galling to be lectured by people who have had enormous increases in the last few years. We shall see how they treat the considerable sacrifice which hon. Members are being asked to make.

Mr. Evelyn King

Does the Lord President agree that the part of his statement which is unacceptable to those outside lies not in the figures which he has propounded—although I think them excessive—but in the fact that we are seen to fix our own salaries, a thing no man ought to do? Does he agree that when this matter next arises he will seek to have our salaries linked to some other scale so that we never again fix our salaries in isolation from those of other people?

Mr. Short

if that is the wish of the House, I shall be very happy to arrange for it to be done. It should be arranged in such a way that not only is the increase decided but it is paid without the need for a resolution of this House. We must try to ensure that.

Mr. MacCormick

Does the Lord President appreciate that many hon. Members from different parties do not regard themselves as Government employees? In view of that, would it not be better for us to try to evolve, regardless of the sums concerned, a procedure which does not involve the Government laying down figures which have to be accepted by hon. Members?

Mr. Short

As I have said, if that is the wish of the House, I shall be happy to arrange for that to be done.

Mr. Mike Thomas

May we be given two pieces of information? Would the whole of the Boyle Report recommendations have been allowed under the White Paper proposals? My view is that they would have been allowed. Will my right hon. Friend give a firm commitment that he will not seek the view of the House about linkage through informal consultations but will put a linkage motion down on the Order Paper with the salaries motion so that we may vote upon it?

Mr. Short

I should need notice in order to seek advice on the first part of my hon. Friend's question. I do not know the answer. On the second part, if that is the wish of the House, I shall be prepared to look at it.

Mr. Hall-Davis

Does the Leader of the House accept that the proposal to pay a pension related to a notional salary which has not been paid will impinge on one of the most sensitive areas of incomes policy and create a privilege for this House which will be gravely resented outside? Would it not have been more honest and less troublesome to have paid the £1,800 per annum flowing from the statutory policy of the last Conservative Government, coupled with observance of the social contract as laid down by the present Government, with the pension related to that actual figure?

Mr. Short

No. We are asking hon. Members to forgo part of the increase awarded by an independent review body, and it is only fair and just that this should not have repercussions on Members' pensions. The arrangements for this will be complicated, but I hope to bring them before the House in the near future.

Mr. Faulds

Does the Leader of the House realise that this is a typical piece of Wilsonian legerdemain which will simply lead to a greater abuse of the secretarial allowance than already exists? Does he expect other people to observe the £6-a-week limit? What cuts is the Cabinet to take?

Mr. Short

On the first point, I do not think there is any abuse of the secretarial allowance—

Mr. Faulds

Oh!

Mr. Short

An hon. Member must certify and sign a form to say that he has incurred the expenditure for which he is claiming.

Mr. Faulds

Some of us do.

Mr. Short

I do not think there is any abuse whatever, and I am surprised to hear my hon. Friend say that there is. I dealt with the question of the £6 limit in my first supplementary reply. The amount is fully in accord with the Government's pay policy.

Mr. Nicholas Winterton

The Cabinet's salary recommendations are an insult and a kick in the teeth to back-bench Members who have little or no salary outside this House. If the increase in the cost of living is 77 per cent. and the Lord President is offering us 27 per cent., how does he suggest that hon. Members who are already living to the full extent of their salary are to cope with this minute pittance which he is offering?

Mr. Short

I understand the hon. Member's feelings and I do not complain about anything he said. Hon. Members are being asked to make a considerable sacrifice. As for the peculiar expenses of a Member of Parliament, we are accepting the Boyle recommendations in full.

Dr. John A. Cunningham

Does my right hon. Friend recognise that the behaviour of the Labour Cabinet has been akin to the behaviour of the worst kind of reactionary nineteenth century employer? Does he further recognise that its failure to consult this House and the fact that it has treated its own supporters with contempt are matters of great regret to many of us? Does he recognise that this whole debacle has meant the degrading of Parliament and the demeaning of Members and has destroyed any faith we could have in the working of the Boyle Committee? Does he also recognise that the Cabinet has not heard the last of this matter?

Mr. Short

I am quite sure that we have not heard the last of this matter, but to listen to my hon. Friend's comments one would think that I had announced a reduction in salary—

Mr. Winterton

That is just what the right hon. Gentleman has done.

Mr. Short

To listen to the comments of my hon. Friend anyone would think that I had announced a reduction, not an increase in salary. I have announced an increase of £1,250 in salary and a considerable increase in hon. Member's pensions and expenses allowances.

Mr. Tebbit

rose—

Hon. Members

Hear, hear.

Mr. Tebbit

Is the Leader of the House aware that it is a very unusual day on which I receive cheers from below the Gangway opposite? Could he tell the House whether it is now the policy of Her Majesty's Government that only those people who either have substantial private means or are prepared to live on a scale which is totally unsuitable and indeed impossible to accommodate so as to do an MP's job—the rich and those prepared to accept near poverty, in some cases, for their families—are to come to this House of Commons?

Mr. Short

Certainly not, but there is a wider question behind what the hon. Gentleman has said. There is a case for looking at a differential salary for hon. Members who have outside interests.

Several Hon. Members

rose—

Mr. Speaker

Order. We have been told that these matters must be debated. It would appear from the exchanges today that we will have an interesting debate upon them.

Later—

Mr. George Cunningham

Because of the exchanges that have taken place on the Lord President's statement, some statements have been made implying that a decision has been taken by the Government on this matter and that that is the end of it.

I should like to ask for your clarification, Mr. Speaker, on the procedure of the House on this point. As I understand it, the form of resolution by means of which the House normally provides for the salaries and allowances of Members is unusual in that, technically, it is merely an expression of opinion and does not in itself authorise the expenditure to take place. Accordingly, for that reason, as I understand it—and it is on this point that I am seeking your confirmation—it is in order for any hon. Member to table an amendment, without that Member necessarily being a Minister of the Crown to increase or reduce the figure.

Particularly in the light of the degrading spectacle to which this House has just exposed itself, with Members of the House holding out their hands with a begging bowl to the executive, will you confirm, Mr. Speaker, that when the vote has been taken next week—whether or not there is a Division—it will be by a decision of this House that these recommendations, or any altered version of them, take effect? I am not getting at the Lord President, but I want to press upon Members of the House an understanding, which some do not seem to have, that the decision is taken here, so that after the vote next week no hon. Member who has been expressing his irritation with great heat will have any complaint against the Government, because a majority of the House is able to change the suggestion that the Government make.

Hon. Members

And we will.

Mr. Speaker

I have listened with interest to what the hon. Member has said. When I see the resolutions and the action that is sought to be taken upon them, I will rule accordingly.

Mr. Cunningham

Further to that point of order, Mr. Speaker I am asking whether, if the resolution is in the normal form, I am correct in thinking—and I know that I am, since I have taken advice upon it—that it would be perfectly in order to table amendments.

Mr. Speaker

I have no intention of giving a hypothetical ruling. I will see the resolutions and then decide.