HC Deb 26 March 1975 vol 889 cc619-34

Queen's recommendation having been signified—

10.10 p.m.

The Minister of State, Civil Service Department (Mr. Charles R. Morris)

I beg to move,

That the rate of the salary which may be granted to the Comptroller and Auditor General under section 1 of the Exchequer and Audit Departments Act 1957 be increased—

  1. (a) for the period before 1st November 1974 from £16,475.28 to £16,496.16 per annum.
  2. (b) for the period of November 1974 from £16,496.16 to £16,517.04 per annum,
  3. (c) for the period of December 1974 from £16,517.04 to £16,579.68 per annum, and
  4. (d) for later periods from £16,579.68 to £18,675, per annum,
and the date from which, under subsection (3) of that section, the person now holding that office is entitled to a salary at the said increased rates be 1st September 1974.

Mr. Deputy Speaker (Mr. George Thomas)

Subject to the House agreeing, with this motion we can debate the motion relating to the salary of the Parliamentary Commissioner for Administration—

That the yearly rate of the salary payable to the Parliamentary Commissioner under section 2 of the Parliamentary Commissioner Act 1967 be increased—

  1. (a) for the period before 1st November 1974 from £16,475.28 to £16,496.16,
  2. (b) for the period of November 1974 from £16,496.16 to £16,517.04,
  3. (c) for the period of December 1974 from £16,517.04 to £16,579.68, and
  4. (d) for later periods from £16,579.68 to 18,675,
and the date from which this Resolution is to take effect be 1st September 1974.

I have to announce to the House that the amendments in the name of the hon. Member for Newham, North-West (Mr. Lewis) are not selected.

Mr. Morris

The purpose of the motions is to keep the salaries payable to the Comptroller and Auditor General and the Parliamentary Commissioner for Administration in step with those of permanent secretaries in the Civil Service. There is, and always has been, a firm link with those rates, confirmed in the case of the Comptroller and Auditor General by the usage of over a hundred years and in the case of the Parliamentary Commissioner for Administration by invariable practice since the office was established in 1967.

As hon. Members will know, a resolution of the House is required to vary the salary paid. By approving the motions tonight the House will be approving the link with the pay of permanent secretaries which it has always approved, and confirming these two officers in the standing which it has always wished them to have.

As watchdogs over the executive it is important that the appointment and individual salaries of these Officers should be as directly as possible under the control of Members of the House.

However, when it is necessary to review these salaries more frequently, inroads are made into scarce parliamentary time and the individuals concerned are placed, sometimes for months, in a less favourable position than the Civil Service permanent secretaries with whose pay theirs always has been aligned. It seems sensible, therefore, that there should be an improved and more up-to-date mechanism to vary these salaries while still of course retaining the essential control of the House.

We therefore intend to bring forward legislation explicitly linking the salaries of these two officers to that of permanent secretaries, with provision for the House to vary the linkage by resolution if it were felt that that was appropriate. But that is for the future.

The salaries the House is now being asked to authorise reflect the first stage of the increase promulgated in response to the considered recommendations of the Top Salaries Review Body. I am aware of the strong feelings amongst some hon. Members about high salaries generally, but I am sure that all hon. Members will agree that it would be unfair to discriminate against these two officials, rather than deal with the question by our general taxation policy, and, later, in the light of the report on higher incomes coming from the Royal Commission on Income Distribution and Wealth. It will be questionable whether we will be able to obtain staff of the appropriate calibre if their salaries are allowed to fall behind what is fair and due and can be obtained elsewhere.

Finally, I should like to take this opportunity to pay a warm tribute to the present holders of these two offices, for their devotion and skill in carrying out the onerous duties which Parliament has given them. In the case of the Parliamentary Commissioner, these duties have since October 1973 included the functions of Health Service Commissioner for England, Scotland and Wales, and I am sure I can speak for the House as a whole in expressing our appreciation of their services.

With that brief introduction I commend the motion to the House.

10.15 p.m.

Mr. Peter Hordern (Horsham and Crawley)

For our part, we welcome this motion. It is generally quite uncontentious and has never met with very much opposition or comment. Nevertheless, it is an important motion as the salaries of these two gentlemen are fixed by the House of Commons. For that reason I should like to say something on what the hon. Gentleman has said about the auto-maticity of these salaries to place them exactly in line with the salary of permanent secretaries. It is not unimportant that we should consider these salaries from time to time and make quite clear the position, that these two gentlemen are responsible to the House of Commons and not to the Government at all.

Both have held extremely important functions which are increasing the whole time. The Comptroller and Auditor General now does a very different kind of job from that which he did when he was originally appointed under Mr. Gladstone. There is no question now of counting candle ends. He is the head of a very large and important Department responsible for the whole of Government expenditure, which is increasing both in resources of money and of men, especially under this Government; so we should be the last to oppose an increase in the salary which the Comptroller and Auditor General will be getting and certainly the very last to oppose the principle that the salary should be fixed by this House.

As to what the hon. Gentleman said about making this process of fixing the salaries of these two gentlemen much more automatically by, I understand, affirmative resolution, that is something that we shall have to look at very carefully because it is a matter which is the right of the House, and naturally we are very concerned to guard it very jealously. It is not just a question for the Government and the Opposition Front Benches to fix between them through the usual channels—and this is the first I have heard of it—but a matter for the House itself. I hope, therefore, that this matter will be discussed as opportunity occurs as well as this evening. It merits further discussion.

We should not regard this just as a formal opportunity to confirm the salaries that are arranged but rather as it has been in the past as an opportunity for a fairly wide-ranging debate on what has taken place during the last year or so under the Parliamentary Commissioner and Comptroller and Auditor General. This is a subject at which I am sure my right hon. and hon. Friends would like to look carefully. It is something which the House should look at very thoroughly.

With those remarks I am sure that, for our part as an Opposition, we welcome the motion as it has always been welcomed and we wish these two distinguished gentlemen every good fortune in their extremely important and arduous task.

10.19 p.m.

Mr. Bob Cryer (Keighley)

I share the admiration of the House for the work of these two gentlemen. The Comptroller and the Auditor General and the Parliamentary Commissioner are two independent Officers of this House who advise us in their scrutiny of the executive. It is very important that that scrutiny should continue. In my view this House has been far too lacking in its powers of control over the executive and there could be many improvements to bring about more democracy.

Having said that, and having said that these two gentlemen are most estimable and have responsibilities which we recognise as important, we ought to have a look at the fact that their salaries are being increased; because those salaries are by no means modest.

When the fine print has been cleared, the salary will be increased finally from £16,579.68 to £18,675. It can reasonably be said that people on £18,675 are fairly well taken care of, and therefore it seems to me that there are good grounds for considering why the Labour Government are prepared to bring in motions to emphasise the salary structure in this country. These two gentlemen do an excellent job, but so do engine drivers and miners. These two salaries are linked to the Boyle Committee's Report which acts as a precedent to enable them to keep pace with the salaries of permanent secretaries.

Some of us were distinctly dissatisfied with the way in which the recommendations of the Top Salaries Review Body were put through the House by means of a Written Answer to a Question on the Friday before the Christmas Recess, and now we are having a debate on the matter, because it has to be dealt with by a motion, by chance on the last full day of Government business before the Easter Recess. It is not the fault of my hon. Friend, but I suggest that he mentions to the Leader of the House that there are important matters surrounding this issue which should be debated at a rather more convenient time than at twenty minutes past ten on the last day of Government business before the recess. Many hon. Members have commitments elsewhere. They have to travel perhaps 200 or 400 miles to meet them, and they must get away, but some of us suffer from insomnia, and we are determined not to let anything go through the House without a degree of scrutiny. The Government can always count on some back benchers being ready to exercise some scrutiny over matters that are brought before the House.

We are dissatisfied because it looks as though the Labour Government are slightly ashamed of putting through salaries on this scale, and well they might be. Their task is not to prop up the existing social structure but to redistribute wealth, as we said in our manifesto. We are doing it in other ways, for example, through capital transfer tax, but it seems to people outside that those whom they elected to office are merely changing places with the present Opposition and doing what they did. We have to show people outside that those earning £16,000 a year or more are prepared to accept a redistribution of wealth.

In the courts, justice must be seen to to be done, and it must not just be claimed that it is being done. The capital transfer tax is a fairly complicated measure which we believe will redistribute wealth, but if we pay people getting on for £20,000 a year, and if we pay an extra £2,000 to those who are already receiving £16,000 or more, it means that the Labour Government are giving considerable financial rewards to those who already have substantial salaries.

I think that there is a strong case for narrowing the differential between the very top and the very bottom salaries. One might recall that in this House we were subjected to considerable inconvenience—happily now over—because of a strike by industrial civil servants. As my hon. Friend the Member for Bolsover (Mr. Skinner) demonstrated, the take-home pay of skilled craftsmen is £28 a week. If we say to other people who are doing a necessary and important job that we propose to give £2,000 to people who are doing an important job and we have given an extra £2,500 to permanent secretaries and we shall cushion them with another increase at the beginning of next year, they will say that we are not creating the sort of just society which we promised to create when we were elected to office.

Only yesterday we had 4,000 textile workers in London demonstrating about the situation in the textile industry. Many of them are on short time. That means that in the North, for instance, a household which depends on the wife going out to work will have its annual income severely reduced. It will not be reduced from £16,000 to £12,000 or £10,000, but from £1,500 to £1,200 or £1,000. That is the sort of money that people are living on throughout the country.

We must also bear in mind that we lauded the Labour Government when they increased pensions to £10 for single persons and to £16 for married couples. We said that it was the largest increase in history. We must bear in mind that many useful, admirable people, who have worked throughout their lives for the country—in some cases they fought for their country and were injured in so doing —are now living on £10 if they are single or £16 if they are married. When we say to them that other admirable people are getting £18,600 by means of an increase of approximately £2,000 so as to keep them ahead and to maintain differentials, they might well say "What sort of society is it that you are maintaining when these enormous differentials exist?" We must bear that sort of thing in mind.

When I raised this subject in my constituency I was shown wage slips which indicated a take-home pay of £32 including overtime. I represent a constituency which does not have high-wage-earning levels. Even in the areas where there are high-wage-earning levels we are talking about gross annual figures of perhaps £2,500 to £3,000. That is what we meant when a few months ago we talked about the men in the car industry being high wage earners. That is what we are talking about when we say that the miners have just made a successful claim. My God, the economy is tottering because the miners have received an extra few pounds a week yet here we are slipping through an extra £2,000 for one person. That sum is more than many of my constituents earn in a year. Indeed, we are discussing a salary that many of my constituents will not earn in four or five years.

I have made my position clear. I am making no personal attack. The fact is that we must discuss these differentials. We must be seen to make a shift of wealth in other ways than just through the taxation system. We must point out, of course, that the people who earn the most money pay the most tax. We want a progressive tax system. That is what direct personal taxation is all about. However, there is no question that the person on £18,000 is vastly better off than the person on £3,000 a year in spite of direct taxation taking its toll.

The hon. Member for Horsham and Crawley (Mr. Hordern) did not mention the element of retrospection. Only yesterday—

Mr. Dennis Skinner (Bolsover)

Monday.

Mr. Cryer

Yes, Monday. Time flies so quickly in this hallowed Chamber. On Monday we had a lengthy debate on the Housing Finance (Special Provisions) Bill. It was severely mauled by the Opposition. Many Opposition Members were critical about its retrospective provisions. The Bill sought to right a wrong which had been pushed through the House by the previous Conservative Government. During the debate on 24th March the hon. Member for Southend, West (Mr. Channon) in column 75 said: Can it be right, whichever party is in power, and whether the councillors concerned are supporters of that party or the party in opposition, that the Government of the day should, on coming into office, retrospectively remove the penalties which attach to the breaking of a law which was passed by the previous Government? That is a most dangerous act for the House to condone. The hon. and learned Member for Montgomery (Mr. Hooson) went even further. He said: Neither the Attorney-General nor the Secretary of State could possibly contemplate retrospective legislation to remove the surcharge. That was more than they could stand."—[Official Report, 24th March 1975; Vol. 889, cc. 75 and 85.] The general point is that it has been said that legislation relating to councillors who refused to implement the Housing Finance Act would be retrospective and that that would be a very bad thing. I am not opposed to retrospective legislation. In many cases it is necessary. What worries me is the hypocrisy of the Conservatives who turn up in droves on an issue like Clay Cross and condemn retrospective legislation on that score. Their condemnation of retrospective legislation seems rapidly to diminish when it is introduced to deal with the cases of two people who, I agree, are doing an admirable job and who might well share the attitudes adopted by the Opposition—I do not mean politically but in a socio-economic sense.

These salary increases, therefore, will get no support from me. I shall not divide the House. I offer a warning to my hon. Friend the Minister, and I know that he will take it to heart. The Labour movement outside, which is the arbiter for us in this place, will be studying the message which goes out from this place, because those people put us here to carry out a Socialist programme, not to tinker with the system, to maintain differentials, and to maintain the ruling élite as though time has stood still and will never be changed.

Mr. Skinner

I think that my hon. Friend is now coming to the nub of the problem. It is that, whatever the situation in respect of those who accepted the arguments we put forward in both General Election campaigns about the need for a fundamental redistribution of wealth, it was also argued that within the social contract as it was then envisaged no one should get more than a normal cost of living increase on a sort of weighted average. My view is, and I wonder if my hon. Friend shares it, that if there is to be a weighted average there must be a movement from below which is above the rise in the cost of living and a movement from the top which is below. I tend to get the impression from this measure that the movement is an average which to some extent benefits those who are better off. Although it could be argued, therefore, that the two are moving in a kind of parity based on the cost of living, the facts belie that argument.

Mr. Cryer

That was a very good speech from my hon. Friend the Member for Bolsover (Mr. Skinner). He is of course correct, and that is the point I made earlier. There is no point in arguing that there has been an increase in the cost of living and therefore this £2,000 is necessary. We are simply maintaining the status quo, the position which prevailed when we took office. Frankly, the Government must grasp the nettle. People who are living off the fat of the land on excellent salaries may be doing excellent work. But there are millions of people doing excellent work which is not so exalted and is much more humdrum. We need them just as much as we need the Parliamentary Commissioner and the Comptroller and Auditor General. We must move their wages and standard of living more closely to the standard enjoyed by those in exalted positions. The people in exalted positions must stand still for a few years. That is the road for the Government if they want to travel it.

10.34 p.m.

Mr. Ian Gow (Eastbourne)

It would be out of order, I think, to criticise the decision of the Chair not to select the amendment standing in the name of the hon. Member for Newham, North-West (Mr. Lewis)—

Mr. Deputy Speaker (Mr. George Thomas)

Order. The hon. Gentleman is quite right. I rise only to tell him to play safe.

Mr. Gow

I hope, Mr. Deputy Speaker, that it is not out of order to say that although I do not criticise the Chair on the selection, if the amendment had been selected I would have voted for it.

At a time of national economic crisis it is right that those who have the broadest backs should make a fair contribution to the national sacrifice.

Secondly, I endorse what the hon. Member for Keighley (Mr. Cryer) said about the way in which this proposal for increases in the salaries of two distinguished gentlemen is brought before the House at this late stage of the Session and at what is, at any rate to some hon. Members, a late hour of night. It is not a late hour to the hon. Member for Keighley, the hon. Member for Bolsover (Mr. Skinner) or the hon. Member for Sowerby (Mr. Madden). For us, at least, the night is young.

Just before Christmas, on the last day of the Session, and in a Written Answer, the Prime Minister announced substantial increases in salaries for the holders of certain important posts. We can draw comfort tonight from the fact that we are making progress, in that we have the opportunity for a debate, and it is the day before the last day of the Session.

Thirdly, if there is to be restraint in the incomes of our fellow citizens, as I believe there should be, it must apply supremely to those who are best placed. I do not see the justification for increases of this kind, outside the social contract, and outside the scope of the sensible amendment.

I join in the tributes to the outstanding quality of the two gentlemen who occupy the important posts with which we are now concerned. But I remember, as does the hon. Member for Keighley, the attitude of those whom we represent.

When Mr. Churchill came to power in economic circumstances which, by common consent, were much more favourable than those which exist today, he required every Minister in his Government to take a 5 per cent. cut in salary. A prerequisite of national unity is that those in the most favourable position should take a reduction in salary. The Minister would be astounded at the public response that there would be if he and his right hon. Friends followed Churchill's example.

If the amendment had been selected, I would have voted for it. I regret that it was not selected.

I appeal to the Government to look again at their policy in regard to these gentlemen, however distinguished. Sacrifices at the top are required if we are to get any sense of national unity.

10.39 p.m.

Mr. Charles R. Morris

The one impressive thread that has run through each contribution to the debate is the unanimity of appreciation for the services of these two officials. That is a reflection of the general appreciation of hon. Members for the work that these two individuals perform.

My hon. Friend the Member for Keighley (Mr. Cryer) made some stringent comments on the report by the Top Salaries Review Body. The Boyle Committee's report published in December last year was the first substantive report of the Review Body since its establishment by the then Conservative administration in May 1971.

Those who have found time to read the report will, I am sure, agree that it is a well-documented, closely reasoned analysis of the scale of remuneration received by those employed in the private sector carrying comparable responsibilities and performing similar administrative functions. As I said, the report represented the first full review of the salaries concerned since 1969, and the Government were obliged to consider it accordingly.

My right hon. Friend the Prime Minister in his stament on the Boyle Committee recommendations at that time announced that the Government had also to consider the recommendations at a time of critical economic difficulty for the country. It was against this background that the Government examined the recommendations of the Boyle Committee. I noted carefully what my hon. Friend the Member for Bolsover (Mr. Skinner) said when he suggested that increases in salaries should broadly be contained within the movement in the retail price index. That is a valid point, but I draw to his attention that the evidence to the Boyle Committee indicated that since the last substantive review in 1969 the salaries of individuals within the groups covered by the review had increased markedly less than the rise in prices, less than the increases in average earnings and less than the average increase in comparable salaries in the private sector.

Mr. Cryer

Does not my hon. Friend agree that the evidence given to the Boyle Committee was largely from the same strata of top people and, therefore, was not wholly unprejudiced?

Mr. Morris

My hon. Friend is perfectly entitled to put whatever construction he wishes on the evidence that was presented to the Boyle Committee, but the committee was looking to the private sector. My hon. Friend made that point with regard to the recent unofficial industrial action taken by industrial civil servants. They were arguing for comparability, and that is precisely the function which the Boyle Committee fulfils for the House in looking at top salaries and at these two salaries. Comparability was all that the Boyle Committee in general principle was seeking to establish.

I assure the House that, irrespective of the evidence, the Boyle Committee recommendations were the subject of detailed scrutiny by the Government. As a result, the Government decided that in the case of the recommendations for nationalised industries, no increases could be agreed at all. In fact, the Government decided to defer any decision on these recommendations until the Royal Commission on the Distribution of Income and Wealth had made its report on higher incomes. The Government have taken this view in spite of increasing problems of discontent over nationalised industry salaries generally.

So far as the other three groups are concerned—civil servants, judges and officers in the Armed Forces—the increases where the revised salary exceeds £13,000 are being staged. The increases recommended here, although substantial, were generally lower than those recommended for the nationalised industries, and were payable in the main to people on lower salary levels than, for example, nationalised industry chairmen.

Mr. Gow

Will the Minister confirm that these increases are within the social contract?

Mr. Morris

These increases stem from the recomendations of the Boyle Committee. That committee looked at these salaries over a long period of time and its considerations covered a period from 1969 to the time of the report.

Mr. Gow

With great respect, the Minister has not answered my question, which is a very important one. We are not now going back over a period of time but are talking about increases in salary which take effect from the dates laid down in the order. Will he answer "Yes" or "No" to the question whether these increases fall within the social contract?

Mr. Morris

These recommendations emanate from a 180-page report of a committee under the chairmanship of Lord Boyle. The justification for these recommendations lies within that report.

Mr. Hordern

I know that the recommendations follow that report, but my hon. Friend is on to a good point—and it is a very simple one which the hon. Gentleman should be able to answer—namely, whether these awards fall within the social contract?

Mr. Morris

I am grateful to the hon. Gentleman for that clarification, but I shall be coming to this point at a later stage in my speech and perhaps he can then intervene if he so wishes.

The Government have an obligation as employers towards these groups not to use their powers to discriminate unfairly against them. To impose general restraints on higher incomes is another matter and one which the Government no doubt may wish to consider when they have the Royal Commission's report. Meanwhile, there is no justification for singling out public servants for harsher treatment than is experienced by other sections of the community.

Hon. Members on both sides of the House criticised the fact that my right hon. Friends' announcement was made on 20th December, the last day before the Christmas Recess last year. It was suggested that the Government had some justification for being ashamed in that respect. I wish to explain that the Gov- ernment were anxious to make an announcement about the report of the Top Salaries Review Body at the earliest possible date. However, it was not until a day prior to the last day of the Session that the Cabinet took a decision on the review body's recommendations. Therefore, the earliest date for the announcement was the last day before the Christmas Recess.

Mr. Gow

Would the Minister not agree that the reason the Cabinet decided to take a decision on 19th December was so that the Government could announce it on 20th December, the last day of the Session? Was it not a deliberate policy on the part of the Cabinet?

Mr. Morris

The hon. Gentleman should not cast an air of conspiracy over what was a reasonable sequence of events.

Mr. Cryer

My hon. Friend must not follow this tack. It is not reasonable for announcements of such importance to be made by means of Written Questions—Questions which some people, in an unscrupulous way, might say were planted, but I make no such charge. My hon. Friend should certainly take back to the Cabinet our view that the House would like to see large items such as this debated in the House. I realise his difficulties, but we on the Labour benches and within the Labour Party will insist on these matters being debated.

Mr. Morris

My hon. Friend and I belong to the Labour Party. I assure him that his views in that regard will be conveyed to my right hon. Friend. I also assure him that there was no planted Written Question. The Written Reply was the most efficient way of making the announcement on the last day of the Session, given the great volume of other business on hand and the general disturbance at that time.

Mr. Hordern

I accept that the Question was not planted. I am sure that no such suspicion entered anybody's mind. But why were the Government unable to make a statement on the last day on this business? Why was it not possible for a statement to be made which would have been subject to questioning? It was that aspect that was so unusual and rightly brought criticism from both sides of the House.

Mr. Morris

On that day there was an appreciable amount of parliamentary business before the House. The announcement was not made in an unreasonable manner.

My hon. Friend the Member for Keighley said that Government supporters outside this House are concerned to see a positive redistribution of wealth in favour of the socially disadvantaged. Are the salaries and wages of Government employees the best form in which to bring about that redistribution? I suggest that it is better to wait for the report of the commission which is looking into this particular matter.

The hon. Member for Eastbourne (Mr. Gow) suggested that the amendment tabled by my hon. Friend the Member for Newham, North-West (Mr. Lewis) was sensible. The hon. Gentleman is entitled to his interpretation of the amendment. I appreciate the close and continuing interest in these matters which has been demonstrated by my hon. Friend the Member for Newham, North-West over the years. If the salaries in question were to be increased in line with the terms of the suggested amendment to the limit of 45 per cent. more than the 1972 figure, the result would be £22,800, which would be over £4,000 more than the Government are proposing in the two resolutions. That would be the reality of the amendment that Mr. Deputy Speaker has decided not to call.

The hon. Member for Eastbourne said that it would be an example to the nation if Ministers and Members of this House gave a lead by agreeing to a 5 per cent. reduction in salary. I remind him that the salary of Members for Parliament has not increased since 1972. I hope that the people of Britain recognise that fact and accept it as a fine example to the nation.

Mr. Horden

The Minister was asked whether the award came within the social contract. If he cannot answer that point, which I thought would have been simple, can he say whether the increases mentioned in the motion are within the increase in the cost of living or above it?

Mr. Morris

I covered that point earlier in my speech when I indicated that the salaries of the individuals within the groups covered by the review had increased markedly less than the rise in prices, less than the increases in average earnings and less than the average increase in comparable salaries in the private sector.

With that explanation, I trust that the House will adopt the two motions.

Question put and agreed to.

Resolved,

That the rate of the salary which may be granted to the Comptroller and Auditor General under section 1 of the Exchequer and Audit Departments Act 1957 be increased—

  1. (a) for the period before 1st November 1974 from £16,475.28 to £16,496.16 per annum.
  2. (b) for the period of November 1974 from £16,496.16 to £16,517.04 per annum,
  3. (c) for the period of December 1974 from £16,517.04 to £16,579.68 per annum, and
  4. (d) for later periods from £16,579.68 to £18,675, per annum,
and the date from which, under subsection (3) of that section, the person now holding that office is entitled to a salary at the said increased rates be 1st September 1974.