PARLIAMENTARY AND OTHER PENSIONS AND SALARIES BILL

HC Deb 29 April 1976 vol 910 cc652-93

Order for Second Reading read.

Mr. Deputy Speaker (Mr. Bryant Godman Irvine)

Mr Speaker has selected the amendment for debate.

7.57 p.m.

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

I beg to move, That the Bill be now read a Second time.

With the permission of the House, I shall answer at the end of our discussions any questions asked during the debate. As hon. Members will recall, last summer the House decided that the appropriate salary for Members of Parliament was £8,000 per annum, as recommended by the Top Salaries Review Body. How-ever, in view of the serious economic situation at the time it was felt right that a substantial part of that salary should be withheld and that the sum paid should be restricted to £5,750 per annum. That was the decision of the House last July and I am sure that it was the right decision.

The House also resolved that those who retired whilst this self-imposed restriction was in force should not be permanently penalised and that pensions should be calculated on the full rate for the job—£8,000. The main purpose of the Bill is to give effect to that decision. This is done by Clause 1.

Mr. George Cunningham (Islington, South and Finsbury)

Will my hon. Friend tell the House why—with great personal respect to him—this measure is being presented to the House by the Minister of State, Civil Service Department? I should have thought that it would be normal, in a matter of this kind—a very House of Commons matter —for the Bill to be presented by the Leader of the House. Will my hon. Friend tell us why that is not being done?

Mr. Morris

I appreciate my hon. Friend's point, but this legislation falls within my responsibility, and I shall be taking the measure in Committee.

Mr. George Cunningham

It should be noted that there is at least one hon. Member—and I should have thought rather more—who thinks that this is not the right way in which the matter should be handled before the House.

Mr. Morris

I shall convey my hon. Friend's views to my right hon. Friend the Lord President and Leader of the House.

Clauses 2 and 5 make similar machinery provisions in respect of Ministers and other office holders. It is the normal superannuation practice to amend the rules of a pension scheme to cover all participants at the same time, and there could be no good reason to have different provisions for Ministers and office holders.

I must emphasise that these clauses do no more than to equip the scheme to cope with the situation that might arise in the future. In no sense do they prefigure decisions that the Government may take on future recommendations of the Top Salaries Review Body. Moreover, before they can be given effect, prior approval by way of parliamentary resolution is necessary.

Clauses 3 and 4 make minor amendments to the existing pensions legislation, the latter remedying a number of technical defects.

In moving the last resolutions to increase the salaries of the Comptroller and Auditor General and the Parliamentary Commissioner for Administration in March last year, I intimated that the Government would introduce legislation to alter the machinery for varying their salaries. The pay of the Comptroller and Auditor General has been linked to that of the Permanent Secretaries for more than 100 years, and that of the Parliamentary Commissioner for Administration has been similiarly linked since the creation of that office.

Clause 6 does no more than make a change in the machinery for passing on changes in Permanent Secretary pay and provisions parallel to that for Members of Parliament on pensions. The House will retain control over the salaries of these two officers, since it will be open to it to vary the linkage by parliamentary resolution.

Mr. Ian Gow (Eastbourne)

Will the hon. Gentleman remind the House what salaries are payable at present to the two office holders to whom reference is made in. Clause 6?

Mr. Morris

I am grateful to the hon. Gentleman for asking that question. The information is not immediately to hand, but I shall cover the point when I reply to the debate.

Clause 7 makes similar provision for the Health Service Commissioners, although there are no separate Health Service Commisioners as yet.

I commend the Bill to the House and ask the House to give it a Second Reading.

8.4 p.m.

Mr. Paul Dean (Somerset, North)

I beg to move, to leave out from "That" to the end of the Question and to add instead thereof: this House declines to give a Second Reading to a Bill which, by basing pension rights on notional rather than actual pay, provides privileged arrangements for Members, Ministers and other office holders which are denied to the rest of the community. I am obliged to the Chair for selecting this reasoned amendment.

It can be strongly argued, and I believe that it will be argued in all parts of the House, that the pay, pensions, conditions and facilities of Members of Parliament and office holders are poor in relation to our work load and responsibilities, and in comparison with other jobs. If the labourer is worthy of his hire, the parliamentary labourer should also be worthy of his hire.

But there is another princple which should be paramount—that we should not give ourselves privileges which the Government are denying others; that if the Government are dishing out medicine, Ministers should take it themselves, and MPs cannot escape. The Government are dishing out medicine on pension rights and other fringe benefits in their current pay policy and in the Finance Bill.

This Bill exempts MPs, Ministers and other office holders from the medicine. That is the essence of my case against it. The Government are creating privileges for us at the very moment when they are denying them to others.

Mr. Eric Ogden (Liverpool, West Derby)

Does the hon. Gentleman also agree that part of our difficulties at this stage arises from the fact that when Parliament agreed, almost 12 months ago, on the level of salary that we should receive now, the Government advised the House, and the House agreed, to take less than the tonic then available to people outside? Therefore, part of our difficulties arise not from taking privileges to which other people are not entitled but from accepting restrictions on our own salaries and increments which no one outside accepts.

Mr. Dean

Perhaps the hon. Gentleman will allow me to develop my argument. I shall deal with that matter.

Part of the essence of my case is that other sections of the community are equally restricted in pay, and in pension rights that follow from that. It is on that basis that I suggest that we are giving ourselves particular privileges.

In a leading article on 23rd April, headed Making His Own Pips Squeak", The Times made the following point: It is an essential principle of taxation policy that those who impose taxes should bear their full weight. It is obviously intolerable if ordinary members of the public have to pay taxes which Members of Parliament or members of the Government are excused. If taxes are too heavy or too unfair for the Cabinet, they are too heavy and unfair for everyone else. That quotation was in the context of the Finance Bill and the proposed taxation of certain benefits, including cars and accommodation. We have yet to see whether Ministers will take their own medicine on cars and accommodation.

I realise, Mr. Deputy Speaker, that you would not wish me to pursue that point now, but the principle enunciated in that leader applies equally to other fringe benefits, including pensions. Should the medicine be taken by all, or is it an unnecessary and harmful medicine for all?

I do not believe that restrictions on pension rights should form part of a pay policy. A number of us argued in that way when the pay policy was introduced last year.

Pension schemes are anti-inflationary and are an ally rather than an enemy of pay policy. When we examine the effect on individuals, we see that when pensions are based on final pay and when that pay is either frozen or restricted, people who retire during the period of those restrictions can pay the penalty for the rest of their lives. There is a strong argument for saying that those penalties should not be inflicated as part of pay policy.

This matter was debated briefly on the Remuneration, Charges and Grants Bill in July last year. A number of us argued on that occasion that it should be no part of pay restrictions to restrict pensions as well. We managed to persuade the Government to make a few limited exceptions, but they were limited. If the Government are prepared to remove restrictions on the development of pension schemes, stage 2 may be acceptable. If the Government stop nitpicking on fringe benefits in the provisions of the Finance Bill, this Bill will look somewhat different. But we must judge this Bill on the situation that now exists.

I thought that in presenting the Bill the Minister of State, Civil Service Department would rely on the argument that what is now being done has a respectable precedent in the Civil Service. But he did not rely on that argument. Had he done so, I would have been doubtful whether that argument could have been substantiated on the basis of the Bill.

However, that is not the kernel of the case that I am putting. If we are to take the analogy of the public service, we must remember that many people, rightly or wrongly, feel that the public service is now in a privileged position in terms of pay restrictions. It is felt that members of the public service are in a privileged position in terms of their pay and the basis on which their pensions are calculated, compared with those who are not in the public service. That is a fairly widely held view.

In these days of rapid inflation, criticisms are also heard that inflation-proofing of public service pensions, which last year involved an increase of about 26 per cent., is the kind of increase that no private scheme can manage. I shall not enter into the merits of the argument, because it is not essential to my point, but in so far as criticism exists, and I believe that it is widespread, it would be unwise to add fuel to the fire by putting Ministers and Members of Parliament in the same position.

My main argument involves a comparison with the private sector during stage I of the pay policy. The original intention of the Government, when introducing the pay policy, was to have a virtual freezing of pension rights. Modifications were made as a result of our debate last July. I give the Government credit for recognising the points put from both sides of the House to the effect that if pensions were frozen considerable hardship would result, particularly for those who retired during the period of the pay policy.

One modification made during the passage of that Bill sought to deal with this hardship. I should like to quote what was said by the former Secretary of State for Employment, who is now Leader of the House. He said: It will also be open to those concerned to decide, if they wish, to continue to calculate pension entitlements on the basis of the rate of pay to which the employer was committed before 11th July, even though that commitment may be limited by the new policy."—[Official Report, 23rd July 1975; Vol. 896, c. 688.] That statement by the then Secretary of State for Employment was in due course embodied in detailed rules that emanated from the Joint Office of the Superannuation and Occupational Pension Boards. In Memorandum No. 28, which the boards issued in January 1976, they said: Where an employee retires and the calculation of 'final remuneration' depends in whole or in part on remuneration which has been restricted, so as to conform with the policy "— that refers to the pay policy— below that to which there was a commitment in existence before 11th July 1975, then the calculation may be based on the actual remuneration received in the relevant period plus such further amount as the employer would have received had there been no such restriction. They then go on to define the meaning of "commitment ": "The word ' commitment' means an agreement made before 11th July 1975 which, apart from the pay policy, would have bound the employer to increase the employee's remuneration to an extent which would have breached the limits imposed by the policy. It is clear from the combination of the statement made by the Secretary of State in this House and the memorandum that I have just quoted that the concession made was specific and was available only for commitment entered into before 11th July 1975, which was the date of publication of the White Paper foreshadowing the pay restrictions. That is the significance of the date of 11th July.

The Boyle recommendations are not on all fours with a pay agreement, but I suggest that they are very similar. The significance of the Boyle proposals in this context is that they were not published until after 11th July 1973. They were published on 16th July last year and eventually were agreed by the House in a modified form on 22nd July of that year.

Therefore, we have before us an arrangement that is similar to a commitment to pay in the private sector and outside the clear time limits laid down by the former Secretary of State. We are providing for ourselves privileged pension arrangements that the Government have specifically denied to the private sector under the pay policy.

Mr. George Cunningham

The hon. Gentleman said that the date of publication of the Boyle Report came considerably after the date of presentation. He must appreciate that some part of that time was occupied by the Government making up their minds on what they wanted to commend to the House to do about the report, and that some part of the time was taken up in printing. Is he suggesting that the appropriate date is the publication of the report rather than the date of the making or signing of the report?

Mr. Dean

I am suggesting to the House that exactly the same criteria should apply in the case of Boyle as applied in the case of the Government White Paper. The publication date of the Government White Paper was, as I mentioned, 11th July. They passed all the concessions that are allowable from the publication date of the White Paper. I therefore suggest to the hon. Gentleman that it is an entirely fair and reasonable analogy that any concessions there should be for our pensions should be based also on the date of the publication of the similar paper, namely, the Boyle Report. I am saying to the hon. Gentleman that that was a date after the date from which the concessions apply.

I have no pleasure in making this case, and I do not expect enthusiastic "Hear, hears" from colleagues who would value improved pension arrangements as much as I would. It is the Government who are putting the House in this false position. The remedy is in the Government's own hands. Let them take back the spiteful clauses on fringe benefits in the Finance Bill. Let them remove the restrictions on the improvement of pension arrangements in stage 2 of the pay policy. They can then commend the Bill to the House with a good conscience.

8.21 p.m.

Mr. George Cunningham (Islington, South and Finsbury)

I can be very brief on this subject because I think that the nub of the matter is contained in one or two technical points. The merits of the major question of the remuneration and other conditions applying to Members of Parliament were gone over with the most unsatisfactory result last July. All I want to say about that is that it is high time that this House had enough gumption and dignity to provide properly for itself, in accordance with the duties involved in being a Member of the House. It is time that Members stopped competing with each other with regard to how little we are prepared to pay ourselves for the services we give here.

The hon. Member for Somerset, North (Mr. Dean) referred to inflation-proofing in the public service and contrasted it with the arrangements normally applying with respect to inflation-proofing in private pension schemes. The public service has taken a great deal of stick recently on this point, I think totally unfairly.

If we were devising a good pension scheme, whether for public servants or anyone else, that scheme, I suggest, should provide for inflation-proofing as total as possible from the moment of retirement. There ought in the long term to be no difficulty about doing that. We simply have to trade off inflation-proofing against the level of pension available at the point of retirement. If we want inflation-proofing, we have to settle for a lower rate of pension at the point of retirement in order to pay for it.

I should like to see private schemes going more for inflation-proofing after retirement. They certainly cannot do it at a time when they are not able to get for their funds a return from the market which is anything like equal to the current level of inflation, but in normal times—and taking it not year with year but decade with decade—they ought to be able to achieve that. Rather than giving public servants stick and the Government stick for the arrangements applied to public servants, we should be telling the private pension industry that it ought also to be working in that direction.

The hon. Gentleman has suggested that the two dates we should fix in our minds, with regard to the technicalities he quite rightly raised, are the date of publication of the Boyle Report and the date of publication of the pay policy White Paper. Even taking his own presentation of the case, what he was suggesting was that an agreement reached before the date of publication of the White Paper should be satisfactory for this purpose. He did not suggest—and the words he read out did not suggest—that that agreement needed to be published before the date of publication of the White Paper.

What would be the situation in the case of an agreement which had been reached on 1st July last year and which had then, in accordance with some normal procedure, fallen to be printed and published but which was not printed and published until 12th July last year? I suggest that, in accordance with the principles the hon. Gentleman read out, that agreement would have fallen on the favourable side of the line because it was an agreement reached before 11th July.

The hon. Gentleman is inviting us to regard the production of the Boyle Report as being equivalent for this purpose to the reaching of an agreement, and I think that is fair. The question is whether we then pay attention to the date when the Boyle Report was signed, which as certainly before 11th July last year, or to the date when it was published. The date when it was published is a very arbitrary thing, depending upon whether the printers are able to do it in time and on how long the Government shilly-shally before doing the wrong thing. It has no natural existence at all. The only natural thing in that scene is the time at which the report was signed. I do not have handy a copy of the report, but perhaps the hon. Gentleman can tell us when that report was, as it were, promulgated to the Government by Lord Boyle and the others.

In passing, I point out that it is high time the House stopped these reports being promulgated to the Government at all. They have nothing to do with the Government. The Government should be clean out of it. It is the business of the House to determine these things. The Boyle Report and other such reports should be made to the House. Only a decadent old establishment such as this would tolerate such reports being made to the Government and the Government's Minister for the Civil Service taking a leading part in putting the matter before the House.

Mr. Paul Dean

Following the arguments about publication dates, and recognising that they can be somewhat arti- ficial in that a great deal of negotiation has gone on beforehand, surely we have to take some date. The Government took the date of publication of the White Paper on which to base the concessions. Is it not reasonable, therefore, if that date was taken, however artificial it may have been, that a similar date should be taken for the Boyle Report in order to get a fair comparison?

Mr. Cunningham

My immediate answer is "No". If I may try to say why I think it is "No", my answer would be something like this. Frequently, when the Government are announcing changes of policy, those changes of policy are made effective from the time when the intention to implement them is announced. Thus, if we declare that we should have a wealth tax, we frequently provide that it will be effective from the time when the intention is declared—subject, of course, to Parliament subsequently passing the legislation.

That has a very commonsense purpose to it, namely, to prevent people from escaping the obligation which later will retrospectively be laid upon them because they know that it is to be laid upon them. I suggest that that is the justification for the Government taking the date of publication of the White Paper–11th July—as the date before which an agreement needed to be reached.

I suggest, however, that the proper comparison with the date for the Boyle Report is the date of the making of the Boyle Report, which is equivalent to the date of the reaching of an agreement. If the hon. Gentlemen were saying that the comparison really should be with the date on which the House passed the motions I could see more logic in it, and that would meet his case as well as the argument that he has chosen to adopt. If, however, he bases himself upon the making of the Boyle Report, the more natural date to take is the date when it was made and not the purely artificial date when it was published.

Mr. Paul Dean

Will the hon. Gentleman, therefore, address his remarks to the date on which the House passed the Resolution in modified form, which was 29th July, after the date from which the concessions provided under the pay policy were operated?

Mr. Cunningham

It was not 29th July.It was 23rd July, in the early morning—

Mr. Paul Dean

After 11th July.

Mr. Cunningham

I know. But the hon. Gentleman has made his case. When one knocks down his case, he cannot say "You are right. Now I raise another case. Please try to knock that one down." I have suggested to him that it is better than the case which he put forward. He made the best case he could, and I think that so far I have made a better case against it.

I only say, because the hon. Gentleman makes it necessary for me to make some comment on the point, that one could take either the date when the House reached its decision in the matter or the date of the making of the Boyle Report. In the past, until the disgraceful precedent of last year, it has been the practice for the House to accept the recommendations of the Boyle Committee or its predecessor Committees. Therefore, it is perfectly respectable to adopt the date of the making of the report as the one which is to be compared with the making of an agreement for that purpose. Others may choose different dates, but in my view that date is not clearly wicked and unacceptable.

Finally, there are tax concessions wall regard to contributions made by employees or quasi-employees like us for the purposes of superannuation. The question might arise whether, by basing our pension scheme on a notional salary of £8,000 and securing that the contributions into the fund will be at the rate of 5 per cent. of that and not 5 per cent. only on £5,750, we are exceeding any normal figure of contributions by employees which would attract tax relief. I have only one arithmetical point to make, and it is that 5 per cent. of £8,000 is equal to just under 7 per cent. of £5,750, and a contribution of 7 per cent. on the part of the employee in any employer-employee joint contribution is not unusual or excessive and is not above the limit for attracting tax relief.

On both points, therefore, I suggest that the hon. Member for Somerset, North has failed to make his case and that the House should allow the Bill to have its Second Reading.

8.33 p.m.

Mr. A. G. F. Hall-Davis (Morecambe and Lonsdale)

The hon. Member for Islington, South and Finsbury (Mr. Cunningham) opened his interesting comments by saying that the matter boiled down to a few technical points. I cannot accept that. If I may deal with his argument, I do not think that the Government would go along with what he said on his technical points. If the Government had accepted his view, they would not have introduced this Bill—

Mr. George Cunningham

Why not?

Hall-Davis

I shall come to that.

This discussion is on the point of privilege arising from a Bill that applies specifically and solely to Members of this House. That is the point of principle to which I wish to address myself, because I believe that by that type of legislation the Government have introduced an ill-judged and insensitive Bill.

We cannot consider our position in this House in a vacuum. We cannot think of our own reputation totally apart from the circumstances being experienced by the electorate outside this House. As my hon. Friend the Member for Somerset, North (Mr. Dean) has already said, whether we like it or not we already belong to a select band, because we have inflation-proof pensions. I know this was introduced by a Government, which I was supporting, for civil servants and public servants for the very best of motives. It was done largely for reasons of which the hon. Member for Islington, South and Finsbury would approve—to give incentive and encouragement to private sector occupational schemes to do the same. It has, in fact, been turned by events into the most valuable of all conditions of employment.

We must remember that many people have seen the value of their occupational pension schemes halved since their retirement date. Many of them have seen it halved in the last six years. It is a fact —and although it is not the main point I am making it is one that we should not ignore—that even those employers with the best of records in the provision and maintenance of occupational pension schemes—those who in former years have regularly adjusted the pensions of those who have retired to keep in line with the cost of living—have, in the last two years, found it quite impossible to keep pace, in conditions of recession and falling profits, with the unprecedented inflation that we have experienced. This emphasises the special band who enjoy this very favourable condition of service.

There are many people, whom, again, we should not disregard in our discussions, who were debarred by technicalities from an improvement in their pension. Many people who, in the course of their career, had every reason to expect a salary or pay increase—quite a substantial one after the chosen date—have not received it. We are not the only people in that category. When the Government ask the House to improve a level of pension related to a notional salary that has never been paid we must remember that we are not the only ones who have suffered a disappointment in relation to our legitimate expectations. There are many people who have every bit as good a reason as us to expect an increase in salary, and I, personally, would not like to see us sheltering behind a technicality —certainly not by a privileged Bill of this kind.

Before I am thought to be too sententious, let me point out that I am on record as having said, in the unhappy debate which we had, that I thought the right figure for our salaries was £6,300 —the figure we would normally have expected in line with the various pay policies and the social contract up to that date. As my hon. Friend said, under the pay pause many people have been denied improvements in the terms of their pension schemes, and this is something of which he should not be insensitive.

I was told by the Minister of State at that time that there was a precedent—it has been referred to again today—and that this type of action had been taken in the past for civil servants. But there is one difference, which is of decisive importance, namely, that we are, in effect, our own employers. We have the power to fix our own salaries and our own terms and conditions of employment. Therefore, we have a special and strong obligation to do nothing that might be held offensive or objectionable by those who do not enjoy this control over their own remuneration.

I find the Bill objectionable, regardless of the background—regardless of what went on in June or July last year. No one can make more derogatory remarks about the Boyle Committee than I. Any competent trade union official or personnel director could have come to that conclusion in three weeks from 1st January, not seven months. It is not that I lack a feeling of frustration at what has happened, but I find the Bill objectionable because, regardless of the background, it places Members of Parliament in a position of privilege through legislation the benefits of which do not extend to members of the generality of occupational pensions schemes. That is my objection.

Some hon. Members may not go along with my next remark, but to compound the Government's misjudgment, this special legislation is unnecessary. The fact that the Government have chosen this course is as much an indication of the cavalier attitude that they have adopted to the feelings of the general public and the reputation of this House as the fact that the Leader of the House did not feel that this subject warranted his attendance tonight.

I suggest—I hope that I am correct—that it would be possible to amend the rules of the parliamentary pension fund to allow us to introduce what the Revenue memoranda, from one of which my hon. Friend the Member for Somerset, North quoted, describe as "dynamised final remuneration". That would be a particularly appropriate way of dealing with pensions of hon. Members. We have normally a three-, four-, and sometimes five-year span, and in happier times we would not feel it appropriate to have an annual review. The course that I suggest would have been much wiser.

Such a course would have dealt with the position of hon. Members in a way open to all occupational funds under the existing Revenue rules. It would have used a vehicle that is available to the generality of occupational pension funds and without any legislation, let alone special legislation applying just to a small select band.

If I interpret correctly an answer that I received today from the Treasury—I appreciate that whether the answer is correct depends on whether the Treasury interpreted my Question correctly—at present it would have been possible by this course, without legislation, to pay to hon. Members pensions only 5p in the pound lower than they will receive under the Bill, and that that shortfall would have been made up by the inexorable advance of inflation by the end of this year.

Therefore, by putting my name to the amendment, I do not wish to damage hon. Members financially. What I want to do is avoid taking a course which I believe will damage the reputation of the House.

8.44 p.m.

Mr. Clement Freud (Isle of Ely)

The Minister spoke with a silver tongue and before a very thin House, but the fact remains that what we are debating is written on the first page of the song sheet that we have: The main purpose of the Bill is to amend the Parliamentary and other Pensions Act … to enable the pension benefits of Members, Ministers and other office-holders to be based on a pensionable salary higher than the salary actually paid". I do not want to be technical, mechanical or procedural, because those causes have already been argued by other hon. Members. Like the hon. Member for Morecambe and Lonsdale (Mr. Hall-Davis), I should like to consider the moral or ethical side of what we are trying to do.

I consider that the Bill seeks to bring about an ugly precedent. It ill becomes us to be party to legislation for our specific benefit, especially while we are exhorting others to show moderation. Quite simply, I am against further elitism, because I think we already have enough in this House.

I am against voting for ourselves benefits which we are denying other people, because we already do quite well when it comes to benefits. We have spent £2½ million on a car park when all that most of us wanted were offices. We have a £300,000-a-year loss on the catering services, which are run especially for our benefit, and we have a ratio of staff to customers which no commercial catering establishment could match. We have spent £28,000 on a porch in case it rains —and would that it would, for my farmers are desperate for the stuff. We are heated very much more than any of us want to be heated.

What I object to is that, with all the benefits we receive and which many of us do not want, we are here—in the absence of a senior Minister, in the absence of the Lord President, who might at least have looked in—to vote for ourselves a financial benefit based on a salary we do not draw. I am in favour of inflation-proofing, but we already have that. What I am against is that we should get what other people want and that we are party to achieving this.

Last week I saw a man in my constituency who had been a regimental sergeant-major. He had retired from the Army 11 years ago on a pension of £9 12s. 6d. a week. He now gets £41–16 a month. In 11 years his pension has remained absolutely static. Not for him a retrospective decision to base an inflation-proof pension on a notional wage.

To have the courage to pad our own future while manifesting our current reluctance to reward our present endeavours is humbug. I look forward to the day when we can pay ourselves what other people think we are worth. We can then base the pensions on that.

I support the amendment moved by the hon. Member for Somerset, North (Mr. Dean), because this is a rotten time to introduce what is quite demonstrably an elitist—I cannot find the right word—Bill. When the rest of the people in the country reap the benefits of their work, we shall have the right to reap the benefits of ours and receive an appropriate pension.

8.48 p.m.

Mr. Eric Ogden (Liverpool, West Derby)

The hon. Member for Isle of Ely (Mr. Freud) could not find a word to describe the Bill but he made it reasonably clear that he did not like it. Neither did the other two hon. Members who spoke from the Opposition Benches in support of the amendment.

The hon. Member for Morecambe and Lonsdale (Mr. Hall-Davis), a fellow Lancastrian, will not be too upset if I note that he used the words "select band" three times. It might be our peculiar Lancastrian humour, but that reminded me of two old hymns. I am not certain whether he had in mind Oh happy band of pilgrims, If onward ye will tread or Through the night of doubt and sorrow, Onward goes the pilgrim band". My complaint is not that the Bill provides a privileged position for Members of Parliament regarding pensions. I accept that it does. But I ask the House and people outside to set against that the underprivileged position which the House of Commons has imposed on itself in the last 12 months and which the hon. Member for Isle of Ely left out of his list of the advantages of membership of this House.

Mr. Freud

I am very well aware of that, but the hon. Member must know that we are not the only people who have denied ourselves what we thought we were worth. Not only that, but we have been exhorting other people to ask for less than they are worth. That was my point.

Mr. Ogden

The hon. Gentleman's dates and exhortations have got mixed up. We are the only group of workers who have had their salaries and allowances for the job put to an independent arbitration body outside this House for assessment. Having had our salaries and allowances assessed by an independent arbitration organisation, we have voluntarily accepted one-third less than was recommended. To my knowledge, no one else has done that. We did that to set an example. No one seems to have taken any notice of it either at the time or since.

I accept that the Bill will provide a privileged position for Members of Parliament regarding pensions, but that must be balanced against the underprivileged position which we have reluctantly accepted or imposed on ourselves because of the general limitations which we have agreed.

My choice of hymns may have excluded me from membership of the Committee on the Bill, if it gets that far. I make no complaint. However, I say to my other fellow Lancastrian, the Minister of State, that it would have been nice if the Leader of the House had looked in on this debate. This might be a difficult time for the Leader of the House to announce what Lord Boyle recommended and what the Government recommend, but to my knowledge my right hon. Friend's predecessor, my right hon. Friend the Member for Newcastle-upon-Tyne, Central (Mr. Short), never neglected his duties in putting unpopular decisions before the House. I do not know what duties are keeping the Leader of the House away tonight, but it would have been nice if he could have shown his interest in the Bill and support for the Minister of State.

Someone in the House should bluntly say that the pension proposals included in the settlement of last June and July were made on the basis that Members would limit their acceptance of salary to one-third of that which was offered because the Government would then provide a pension based on the notional salary.

I understand that I am not supposed to use the word "bribe" in this House. I might get away with "inducement". It was an encouragement for Members who were approaching pension time to accept less in real terms if this would not affect their pension rights at a later time. Therefore, last July Members were encouraged to accept the one-third limitation, because their pensions would be covered to a degree. That is a fact of life which we should bear in mind. That helped the Government to get through their proposal that we should take less than the real salary at that time. If it was not a bribe, it was a real encouragement.

On Second Reading we talk about what might be in the Bill. I ask my hon. Friend the Minister of State, what has happened to the Boyle Report on pensions which was due last November? There was talk of its being delayed and then being considered.

It is now nearly 12 months since the last negotiations on pensions and rights. Last year I thought we had got away from discussing and negotiating the salaries and allowances of Members of Parliament across the table. I much preferred meeting the National Coal. Board across the table and arguing about a halfpenny on a ton of coal. There is nothing shameful about a man arguing for the rate for the job.

What, if anything, are the Government doing regarding a Select Committee to look into the possibility of linking our salaries to a grade in the Civil Service after the next General Election? The Government presumably accepted the Resolution of the House last July. What action, if any, has been taken to implement that proposal or to bring proposals before the House?

Are there any proposals that Members of Parliament should accept the limitation placed on everybody else from 1st August last year? Are we entitled in July or August to a £6-a-week pay limit increase? Will the same limit apply to us as applies to other people? If we are only to take what is available to others outside, what proposals have the Government on the £6 limit? Will the Minister of State tell me whether any hon. Member who so strongly objected to our taking any increase last year, even an increase limited to £6, has refused his increase or paid it back?

Mr. Tim Rathbone (Lewes)

Yes, they have.

Mr. Ogden

I think there may be some. Let us hear about them.

This is not a good way of negotiating salaries and allowances. We may well be in a privileged position on pensions—I accept that—but on the whole package we are in an underprivileged position, and the sooner we get out of that the better. This is not the way of doing it.

8.56 p.m.

Mr. John Stokes (Halesowen and Stourbridge)

I join with hon. Members on both sides in deploring the absence of the Leader of the House from this debate, which concerns us all. No doubt many hon. Members, and the general public—if anything of our debate is published tomorrow—will consider the Bill as a small piece of tidying up, and I suppose it could be considered in that light.

We are always embarrassed about our remuneration and we usually manage to make a mess of it. On the last occasion, to avoid this embarrassment we asked Lord Boyle to consider our salary levels. I agree with my hon. Friend the Member for Morecambe and Lonsdale (Mr. Hall- Davis) that Lord Boyle took an intolerable time about it, but in the end, after a thorough and impartial investigation, he concluded that £8,000 a year was the right figure for the salary of a Member of Parliament.

I shall not go into the reasons why the figure was not accepted either by the Government or the House, or why the figure of £5,750 was agreed in the end as being appropriate. Clearly, underlying this decision the Government and the House felt that £8,000 a year was correct. That is why, in the Bill, our pensions will be based on the notional figure and not on £5,750.

We all know that the House can do what it likes with itself. I support the present proposal, but it would look decidedly odd if other bodies behaved in the same way. We must admit, therefore, that our action is peculiar unto ourselves, and we all devoutly hope that it will not be used as a precedent by anyone else. One reason for my supporting the Bill is that many older Members are not well off and stay on here because they simply cannot afford to retire. However wrong or illogical we may think the Bill, if we fail to pass it tonight we shall add to their hardship.

My second point concerns the level of salaries of the Prime Minister, the Speaker and the Lord Chancellor. I have long held that these salaries—and all other Ministers' salaries—are miserably low, either by comparison with other senior posts in the United Kingdom, in the Civil Service or in private industry and commerce, or by comparison with the remuneration of Ministers in foreign Governments.

A case can be made for paying ordinary Members of the House nothing—I believe that is the view of a minority in the House—or they can be paid £1,000 a year or £10,000 a year, to which inflation will probably have brought £8,000 before the next revision is made, but I believe that Ministers should be properly paid for the jobs they do. Incidentally, is it proposed that Ministers should also have notional salaries on which pension fund contributions will be paid? Perhaps that could be cleared up.

Lastly, I should like to give a quotation from The Times leader of 23rd April, which illustrates my point about Ministers' salaries. The article says: The situation of the Chancellor will be this: a Chancellor's gross income from public funds comes to about £16,000 a year; supposing him to have only the married man's allowance, a Chancellor has a net taxable income of £14,915 on which his tax liability will presumably be £7,690, leaving him with a net income of £8,210, That is pretty miserable pay considering the responsibility of the job. It works out at £2.50 an hour in take home pay, on the supposition that the Chancellor works a sixty-five-hour week. Ministers' salaries are a disgrace, and nonsensical. It should be a first priority of the Government and the Leader of the House to examine the level of Ministers' salaries before anything more is done about Members' salaries.

9.3 p.m.

Mr. Bob Cryer (Keighley)

I am interested that the reasoned amendment, which is signed by only two hon. Members, has been called. When 100 or more Labour Members table amendments to motions on public expenditure White Papers or defence reviews, that precedent will be remembered.

One reason for my intervening in the debate is that I do not wish Opposition Members who talk about privilege to get away with it. The Conservative Party is the party of privilege, and it is hypocritical for Conservatives to oppose a Bill to increase pensions when most members of the Conservative Party receive a salary as Members of Parliament supplemented by large salaries as directors of companies. They are not in the same position as working people outside Parliament, who cannot ask the boss for a day off to go to a board meeting in Bognor Regis because the boss will give them their cards if they do.

It should be no part of the Government's policy to put forward this legislation when a few weeks ago they were telling pensioners that they could not have a modest increase in their pensions—making a total of £6 in 18 months—until November.

We must not be surprised if people outside tend to say that the Government are pushing through this legislation. We know that there is a sort of consensus approach, with everybody here coming to the conscious-torn decision to support increases in their pensions, but a Labour Government will incur the odium of people who say that we can increase our own pensions but cannot put up the pensions of ordinary people. It is no part of the Labour Government's programme to carry through such legislation.

Mr. Ogden

I hope to be around for some time before I draw my pension. I shall be voting for increased pensions not for myself but for my hon. Friends who are retiring at the end of this Parliament. I hope it will be some time before I get any benefit from this legislation.

Mr. Cryer

Many of the people who support us and who put us into power do not have the opportunity to save, and they have no superannuation schemes. They have only the national pension on which to live and they are facing great difficulties.

We phased out subsidies for the gas and electricity boards and are now being criticised for increases in gas and electricity charges. People whose only income is the national pension find the greatest difficulty in making ends meet. We must bear these realities in mind.

I understand that my hon. Friend the Member for Liverpool, West Derby (Mr. Ogden) is thinking of others, but people outside may not interpret our action in that light. They will say that we are putting ourselves into a good position, and it is not the purpose of the Labour Party to do that.

The Labour Representation Committee was formed in 1900 with the idea that if we got representatives of working people into Parliament their experience would bring to bear on this place ideas and a momentum for change that would produce the sort of society in which we wish to live.

If we treat ourselves as members of an executive market place, in which we are taking such frightfully high responsibilities that we must always have more financial reward, we shall become removed from the social responsibilities on which the Labour Party was based. I sometimes wish that people would talk more about doing things because they felt a commitment to do them and not continually saying that because they form a particular group, making particular decisions, they must have financial returns the whole time.

I presented a Ten-Minute Bill providing for the election of heads of nationalised industry boards, in the hope that we would get talent from among the workpeople of the industries and might have chairmen who were not wholly concerned with financial reward and seeking ever increasing income in a spiral of financial returns.

The whole pattern of the Bill seems out of character with the aims of the Labour Party and the Labour movement. I was a little staggered to note that the Bill contained two clauses with retrospective effect. When retrospective legislation was proposed in the case of the Clay Cross councillors, the Opposition were dancing with rage, claiming that we were introducing a new principle and that we never had retrospective legislation in this House. I do not mind retrospective legislation; it is necessary in some circumstances. But the Labour Government were not too happy about it.

The Labour Party conference passed a motion to lift the surcharges imposed on the 11 Clay Cross district councillors who were carrying out Labour Party policies, employing people who were unemployed and ensuring that warden accommodation was properly serviced. The Secretary of State for the Environment said that if we removed the surcharges we should be applying retrospective legislation. Not even Clause 4 of the Housing Finance (Special Provisions) Bill, which would simply have lifted the penalty of disbarment from the 11 Clay Cross councillors, was agreed to by the House. It is a different set of values that is displayed tonight by those who were prepared, in the Chamber, to vilify and accuse the Clay Cross 11, to talk about the great principles of Parliament as though they have to be laid down without any possibility of flexibility. They said that the principles were firm and fast, that the Clay Cross Councillors were totally wrong and that nothing could be done.

When it comes to an increase in pensions with retrospective effect for a group of people who are not on the bread line, who do not live in two-up and two-down houses in terraced rows in provincial towns, who, by and large, are receiving very good salaries and are in an elitist group within our society, where are all the Opposition? They are not here. They have gone home in the cosy knowledge that the Bill will slip nicely through. Let us expose the hypocrisy that exists in this place. In fact, the Bill in no way represents Labour Party politics and the ideas for which the Labour movement has stood over the years. The Clay Cross 11 stood far more closely by the standards of the Labour Party than this Bill does.

I shall not vote against the Bill. [HON.MEMBERS: "Oh."] I was not elected as a Labour Member of Parliament to go into a Lobby with Tories on the basis of a hypocritical reasoned amendment that represents a total divorce from reality. I shall not vote against the Bill. I shall abstain, like a number—[Interruption] That may cause some amusement. The Opposition may find it amusing that some of us wish to abstain. Let me remind Opposition Members of what happened three or four weeks ago, when 38 Labour Members abstained from voting on the public expenditure White Paper. They did not say that that was a weak gesture. They were asking "What about a General Election?" That abstention was not regarded as a weak gesture.

The Chancellor, not to put too fine a point on it, got quite cross, not too far from where I am standing. He used what might be termed blunt language about the abstention. The former Prime Minister, my right hon. Friend the Member for Huyton (Sir H. Wilson), was pretty critical about the abstention. So was the Chancellor, in what might be termed a more formal manner, when winding up. Let it not be thought that abstention is a meaningless gesture; it is not. Within the context of this situation it is a reasonable position for some of us to adopt.

We were most surprised that the reasoned amendment was called. Our experience, after collecting over 100 signatures and seeing Mr. Speaker, was that there was not a possible chance of the amendment being called. We were startled to hear it called and to know that a vote was to be taken, bearing in mind that it bore the signatures of only two hon. Members.

Mr. Deputy Speaker

I think that the hon. Member for Keighley (Mr. Cryer) is getting a little near the mark. He must not under any circumstances question Mr. Speaker's decision as regards the amendment.

Mr. Cryer

I should never question Mr. Speaker's selection, but I can express surprise at the result. These matters should be placed on record so as to make it clear that some of us are not too happy with this legislation.

9.14 p.m.

Mr. Ian Gow (Eastbourne)

This Bill was presented to Parliament by the former Leader of the House. It is a fact on which many on both sides of the House have commented already that the new Leader of the House is not here to present and defend the Bill tonight. It is no commentary on the Minister of State to say that we believe that the Lord President should have been here. The hon. Member for Islington, South and Fins bury (Mr. Cunningham) expressed surprise, in an intervention when the Minister was moving the Second Reading, about the Lord President not being here. I suspect that the reason why the Lord President is not here is that he does not like the Bill and is rather ashamed of it.

I believe that the Bill is a miserable measure. It is miserable for three reasons. The first is that Parliament should at all times be very zealous about scrutinising public expenditure. If it should be zealous at all times, it should be doubly so at the present time and trebly so when the expenditure that we are being asked to approve is expenditure which confers a special privilege on Members of this House.

As regards the financial effects of the Bill, we are told that in a full year the additional cost to public funds will be £330,000 only, in respect of the additional pensions contributions and in respect of the salary supplements to Members. Even on a day when in a four-hour debate we have given a Second Reading to the Industry (Amendment) Bill, which increases the limit of so-called Government assistance to industry from £350 million to £1,600 million, I regard it as very much the duty of all of us to scrutinise and to protest, as my hon. Friend the Member for Somerset, North (Mr. Dean) did, about this further expenditure of £330,000 a year.

Although the sum of £330,000 a year is trifling as compared with the deficit this year of £12,000 million, it is symptomatic of a disease which is afflicting this House in a very serious way at present —namely, that we go on passing legislation to increase public expenditure while all of us know that, though we continue to operate in this way, the harsh reality of the economic situation is fast catching up with us.

That is my first objection. I disapprove of an additional £330,000 of public expenditure, and notably when this confers a privilege on Members of the House.

Mr. George Cunningham

Does the hon. Gentleman agree that the real disease which afflicts this House and kills it dead as a working organisation is that every Member wants to be a Minister and pulls his punches?

Mr. Dennis Skinner (Bolsover)

No.

Mr. Cunningham

There are exceptions, but for practical purposes every Member wants to be a Minister and pulls his punches in order to be a Minister. One reason—only one—which leads that to be done is the vast differential in the remuneration of Ministers and those who have no other interests. There are some exceptions. Although that is only half of the story, it is one of the factors that makes this a non-working legislature. Is that not one reason for voting for a Bill of this kind?

Mr. Gow

I do not really see the relevance of that intervention to the point I was trying to develop. In any event, I find myself in disagreement with the hon. Gentleman.

I was coming to my second objection to the Bill, which is that the measure is retrospective, with retrospective effect to 13th June 1975. That is more than 10 months of retrospection.

Mr. Ogden

But it was announced at the time.

Mr. Gow

I was talking about the Bill being a retrospective measure. That is incontrovertible.

Mr. Ogden

The hon. Gentleman will forgive me for having previously interrupted from a sedentary position. The intention was announced last July when we passed legislation through the House.

We all know that it was the Government's intention to bring forward legislation to link pensions to a notional salary. The intention was announced almost 12 months ago.

Mr. Gow

I appreciate what the hon. Gentleman says, but it does not alter my point that I believe that there is a principle involved about retrospective legislation and that that principle is being violated by Clause 1 It is retrospective for a period of more than 10 months, and I object to that.

My third objection is that we are creating an Alice in Wonderland situation for the benefit of Members of Parliament. The Alice in Wonderland situation is that we are saying to hon. Members, but to nobody else, that their pensions will be calculated not on the salary they receive but on a figure which the Government say is to be taken as the notional salary. That will be totally incomprehensible to people outside the House. To say, as is said in Clause 1 of the Bill, that an hon. Member's ordinary salary is to be regarded for pension purposes as being at a higher rate than it actually is is the kind of world of make-believe and double-talk which should not characterise our legislation.

I believe that the Bill will create a bad impression outside the House. The arguments advanced by my hon. Friend for Somerset North were compelling. I support his amendment and I hope that the House will have the opportunity to divide on it.

9.22 p.m.

Mr. Tim Rathbone (Lewes)

I am delighted to follow the speech of my hon. Friend the Member for Eastbourne (Mr. Gow), who is my political neighbour. Before coming to my own arguments I shall add two riders to his argument.

To underline the element of expenditure involved, I have calculated that the money on which we shall vote is the equivalent of the Government's borrowing for about 12 minutes. That is far too much Government borrowing. My second rider is on the retrospective element. I share my hon. Friend's concern about retrospection from now, but even if it is not retrospection from now—because it was announced last year—it is retrospection from July last year until 15th June this year. There is an element of retrospection in whatever way it is examined, although it might be a small element.

My argument concerns what is or is not a commitment to pay an increased pension on the basis of a hypothetical salary which has not been granted. The former Secretary of State for Employment, now Lord President, touched upon that point on 23rd July last. It raises the question of what is a commitment to grant a pay increase. If on 13th June, the date to which the Bill is backdated, or on the date when the Boyle Report was presented, there was a commitment to pay an hon. Member a salary of £8,000, the need for this Bill is questionable. That is because it was already covered by the right hon. Gentleman in his speech last year. It would also be reassuring to people outside the House to know that hon. Members were being treated the same way as they are themselves in their own pension schemes.

I doubt whether the amount of £8,000, or the date for payment of that amount, is in any way a commitment. I do not believe that the Government should say they will pay us more at some moment in the future and that it will be an amount to be decided upon at some future date.

But if—and I fear that this is more likely to be the case—there is no real commitment as to the absolute amount or the date when it will be paid, the Bill truly proves that Members of this House are prepared to set themselves apart from other people who are suffering under the inhibitions of our economic constraints, most particularly the Government's wages policy. In the same way as I felt that our pay increases which were granted as from 15th June should have been limited to £6 a week, which was the figure to which the Government were asking the country to limit its pay increases, I believe that our pensions should be on the same basis as other people's.

The Government and elected representatives, more than any other group of people, should abide by the principle of asking people to do as they do rather than as they say.

9.26 p.m.

Mr. Ronald Bell (Beaconsfield)

It is much more agreeable not to take part in debates of this kind, because the subject is distasteful, but I feel a duty to take part and to say what I believe to be the correct approach to the subject.

I have the misfortune to disagree with my hon. Friends the Members for Lewes (Mr. Rathbone) and Eastbourne (Mr. Gow), because I have seen this process going on for a long time. I can remember when Parliamentary Secretaries were paid £1,500 a year. That went on and on, almost for ever. In 1831, I think it was, Secretaries of State were paid £7,500 a year. In the interests of economy they accepted a cut to £5,000, and 130 years later they were still receiving £5,000 a year. That continued right up to a few years ago. It was an astonishing situation, which constantly excited attention.

I remember the evidence that Mr Stanley Baldwin gave to a Select Committee. Asked how that had gone on for so long, he replied "I suppose it was because we all had a sense of delicacy about our own remuneration, and the moment never seemed to be right." That is the answer. The moment never is right for politicians to increase their own remuneration. I am sorry to say that it is rather a popular cause for politicians themselves to oppose any increase in their remuneration. It may be not be popular with some people in my constituency that I defend it, but we should have the courage of our convictions in this matter.

Mr. Rathbone

I follow my hon. and learned Friend's argument, which he makes from a position of far greater seniority than I have and perhaps ever shall have. But the point is that there is no moment, in his experience, that was wronger than it is now, because at no moment have the Government been invoking restraint on the part of the people to the degree that they are now.

Mr. Bell

With great respect to my hon. Friend, the invoking of restraint is a permanent feature of our political life. There always is a moment when it never could have been wronger, if I may use a somewhat involved expression, just as there never has been a time in our parliamentary history when the reputation of Parliament has not stood lower than ever before. One can look back over the records, the newspapers and history books, and see that the reputation of Parliament has always been at its lowest ebb. "Retrenchment" has been one of the permanent cries in our history.

We must apply a little realism and common sense to the subject. We have been setting ourselves apart, of course—but in what respect? We have treated ourselves differently from everybody else in the community in that, there having been an inquiry into the proper rate of remuneration for Members of Parliament, it was recommended that after nearly five years of static remuneration the appropriate remuneration was £8,000 a year. It was not we but an impartial committee set up to do the job which decided that.

If that recommendation, or something similar, had been made in respect of some other occupation at the time, the class of persons about whom it was made might have accepted that they would receive less than the recommendation. In other words, if a figure of £8,000 had been recommended, the final figure accepted might have been £7,500, 7,250, or possibly even £7,000. But what category of people would have accepted £5,750 in relation to an award of £8,000? I suggest that nobody else would have done so. I thought that we were right to do so and to set an example, but by so doing we set ourselves apart. We did something that no other section of the community would have considered remotely reasonable.

The practicable question arises whether the pensions of older Members of the House, who may be at the point of retirement, should be prejudiced because of what appears to be a temporary crisis in the nation's finances. We did something similar for a similar class of public servant in recent years, and it makes sense, although in one sense it is anomalous. However, it is far better to have the plain courage to get somebody else to decide a proper rate of remuneration and to abide by it—otherwise, we shall store up trouble for ourselves. We did so by waiting four and a half years, in a time of inflation, to rectify the matter. Although the recommendation may be 50 per cent. or 60 per cent., nobody takes into account the four and a half lost years, the compound interest, the deferment element, and all the rest of it. If the figure is compared with what other people are to receive in one year, it puts the other category in a vulnerable position.

The Boyle Committee, 18 months ago, said that the appropriate remuneration for Members of Parliament was £8,000 a year. Nobody thinks that next year or the year after that that the figure will be implemented. What will be the appropriate remuneration for hon. Members in three years' time? Will it be £9,000, £10,000 or £11,000? Does anybody think that it will be easy, then, to go from £5,750 to £10,000 or £11,000? This is the process taking place decade after decade. I have already said that this process occurred for a period of 130 years because people were scared of taking any action, until eventually the situation became so scandalous, especially for junior Ministers, that the Government could not have carried on unless something had been done.

Various devices were used to meet the situation. We saw the introduction of Ministers of State, which was simply a device to pay Parliamentary Secretaries more money without having to put through an increase—

Mr. Charles R. Morris

Not now.

Mr. Bell

It is true historically, but of course is no longer the case. Almost everything has been done to avoid being open, full and frank about the matter. It is time for the humbug to stop. There is no doubt that recently we have got ourselves in a humbugging position. We have to remedy the matter tonight.

I do not like this Bill and, so far as I can see, nobody does. But, logically, there is nothing else to do this time but support it. On Monday we shall debate the Finance Bill, which is retrospective to the date of the Budget Resolutions. Since this matter refers back to a resolution, I suppose that there is that element of retrospection about it. Disagreeable though it may be, we must take this step. At some point we must link our remuneration automatically to sensible machinery. Although we passed a resolution, it was non-operative.

Mr. George Cunningham

It was as operative as any of them.

Mr. Bell

It was not a resolution that took effect. At some point we must do this, because it is a bad system and a bad procedure. It creates a bad reputation for politicians, and ends up by putting those in public life at a considerable disadvantage, to put it mildly, compared with those in other countries perfoming remotely comparable functions.

I hope that the Bill will go through tonight but that at the same time it will serve as a starting point for a little thought on the subject, so that we can institutionalise our arrangements and get away from the dreadful business of haggling and wrangling about every change in our remuneration or allowances every time the subject comes up.

9.36 p.m.

Mr. Roger Moate (Faversham)

I should like to touch very briefly on a couple of points made by my hon. and learned Friend the Member for Beaconsfield (Mr. Bell). I agree with him in his dislike of retrospective legislation. I agree also that the Bill cannot be objected to on those grounds. We are going back only to the date of a resolution of the House, and I do not believe that is unfair retrospection. It was a clearly expressed view of the House that a certain decision should be taken from a certain date, and I think it is quite a reasonable basis for subsequent legislation.

Where I disagree totally with my hon. and learned Friend is on the view that there is no other course but to support the Bill, and that to support it would be ending humbug. I think, frankly, that the Bill is humbug. There is a respectable argument to be made—I know that my hon. and learned Friend takes a different view—about the level of salaries. The hon. Member for Islington, South and Finsbury (Mr. Cunningham) put the case very strongly. He believes passionately that the right figure was £8,000 a year, or whatever Boyle recommended. My hon. and learned Friend thinks that it should be a high figure. For some reason he endows Boyle with some degree of sanctity, as though that was the greatest wisdom and the rate for the job, and that everything else ought to flow there after.

Others believe, as I do, that on balance salaries should be rather low, and that the end result of lower salaries would be a better House of Commons. [Interruption] I accept that there is a real difference of opinion, but the fact remains that the House of Commons, for various reasons, decided that at this time the salary was not to be at a level of £8,500 or £8,000 a year but at the lower level. Whether it was a lack of courage, an act of wisdom, an act of sacrifice or an act of restraint, the House decided that the salary should be at a certain level, and it is the utmost humbug to go into the Lobby in support of a proposition that our pensions should be based on a very much higher level than the salary we had the courage to vote for ourselves. That is humbug, and I believe it is a cheat. I think it would be seen by the public to be misusing the special privileges of the House—the special power that we have to vote our own salaries, our own remuneration, and our own pensions.

Earlier my hon. Friend the Member for Halesowen and Stourbridge (Mr. Stokes) said that he hoped others would not follow this precedent. The fact is that they cannot follow it. If they sought to do so they would have to come to Parliament for legislation. We shall not legislate for them; we shall legislate only for ourseves, for our own special benefit.

At this moment many millions of our people have, for a variety of reasons, accepted lower salaries than they think they are entitled to receive. The Chancellor of the Exchequer, in particular, has of late wept crocodile tears for these people, in the same salary bracket as Members of Parliament, who thought they were entitled to far higher remuneration. These people are in the middle executive range. They are not getting the sort of salary to which they feel entitled, and their pension entitlement is based on the salary that they are getting and not on the one they would like to have.

Yet Parliament, tonight, is proposing to vote in favour of a very high notional salary, with the equivalent pension. Any hon. Member who votes for the resolution will have a very difficult job to explain it to his constituents, colleagues, friends and associates tomorrow, when they ask why they could not have similar privileges.

Mr. Ronald Bell

Does my hon. Friend suggest that £8,000 a year is a very high notional salary?

Mr. Moate

That begs the question about the argument on parliamentary remuneration. If we voted for what we thought individual Members were worth, we should probably end up with variable salaries. Some hon. Members contribute magnificent services to the House—services that would be worth millions of pounds a year. Others justify a negative figure. But that is not the point. The question is whom we want representing us in this House. I suggest that if we abolished salaries altogether there would still be a long queue of people seeking election, and it is quite possible that we should see many of the same faces on these Benches.

I think that the Bill is a misuse of the privileges of this House. If we passed it, we should be legislating a special privilege for Members—a privilege that I believe would be seen by the public to be a total misuse of our powers. I hope very much that those of my hon. Friends who have spoken so strongly and persuasively will go into the Division Lobby against the Bill. If they do not, having spoken so strongly against it, that, too, will be seriously misunderstood.

I hope very much that there will be a vote, and that the House will see the wisdom of the case advanced by my hon. Friend the Member for Somerset, North (Mr. Dean) and carry his amendment.

9.42 p.m.

Mr. David Howell (Guildford)

Whatever we think of the Bill, I think that we can all agree that this is an ugly, miserable and messy business. It has been described as everything from "distasteful" to the phrase of my hon. Friend the Member for Lewes (Mr. Rathbone), "never could be wronger", which is a suitable ungrammatical epitaph to the whole affair.

It is an unavoidable business. It cannot be ducked, although whoever fixed it to be taken at this hour on a Thursday evening had a good try at ducking it. It is a matter to which we have to turn our minds and on which we have to reach decisions. When I say "we", I wish to underline what I thought was one of the correct observations of the hon. Member for Islington, South and Finsbury (Mr.Cunningham)—although I did not agree with all that he said—about this being the business of the House. Of course it is, and it is the business of the House to reach agreement on what, if any, our remuneration and pension arrangements should be.

I am sorry to see that this evening the Lord President decided to be invisible and not to take part in what is a difficult job for any Minister. We salute the presence of the Minister of State to do his bit.

The Lord President's text, if that is the right word to use in connection with someone who describes himself as an archangel, was the one quoted by my hon. Friend the Member for Somerset, North (Mr. Dean), from the debate on 23rd July on the Remuneration, Charges and Grants Bill, when the right hon. Gentleman said: It will also be open to those concerned to decide, if they wish, to continue to calculate pension entitlements on the basis of the rate of pay to which the employer was committed before 11th July"— and then the very ambiguous words at the end— even though that commitment may be limited by the new policy."—[Official Report, 23rd July, 1975; Vol. 895, c. 688.] I am not sure what those last words mean. But that was the text, and that is the date that we have been debating.

If we ask whether there was a commitment beforehand or an agreement after 11th July, there can be only one kind of agreement about the view of this House on how it should remunerate itself, and that is an agreement reached by a resolution of the House. There is no other way in which an agreement can be reached. There is no other commitment. There are no mythical publication dates when a review board said that something should happen. So, if we are to argue about these narrower points—because in a sense they are technical, in the same way as the whole of the £6 policy was not statute law but a curious, mixed, amphibious animal, lying between law and voluntary endeavour by the citizens—it is clear that 11th July lay before the date when the House agreed on the resolutions, one of which required the amendment to the Parliamentary and Other Pensions Act 1972.

There is no escape, there is no dancing around the point. This is what we have decided for ourselves, and in doing so we have conferred upon ourselves—and, indeed upon various dignitaries of State and servants of the House as well—a different treatment from that which the Government have urged on millions of workpeople under their policy. They have not passed a law about it, but having urged it and passed surrounding legislation, they have indicated that difficulties will arise if their policy is not followed. That is the distinction that we have conferred upon ourselves.

We should be wary about conferring upon ourselves distinctions of this kind, just as we should be wary of allowing the State and the Executive to confer on its servants special privileges and distinctions over and above those available to millions of workpeople. The question that is rightly raised by the movers of the amendment—my hon. Friend for Somerset, North recognised it as a distinction or, as some would call it, a privilege—is whether one should go on from there and say that it should not be granted, that the House reached the wrong agreement about its remuneration, that we made a mistake, or whether it would have been a better course if the Government had never sought to interfere in the first place with arrangements for the payment of pensions and the improvement of pensions schemes, if they had never got into the tangle of deemed rates of pay and notional rates of remuneration, and that then, none of this difficulty and embarrassment would have arisen. I am inclined more to the latter view than to the former, but this raises much wider issues about the kind of business the Government set about in the late hours towards the end of July last year, when they brought in the Renumeration, Charges and Grants Bill.

As my hon. Friend the Member for Eastbourne (Mr. Gow) said, Clause 6 provides a new means of setting the salary, as well as provisions for pensions, of the Comptroller and Auditor General and other servants of this House. Here again I emphasise the phrase of the hon. Member for Islington, South and Finsbury: these are matters which are the business of this House. I sometimes think that Governments—the present Government are not the first to make the mistake—have been inclined to overlook that point. When we consider the Comptroller and Auditor General's salary it is worth reflecting—what I say now is no imputation at all against the present incumbent of that position, or upon past or future incumbents—that if this high officer is a servant of the House, his appointment should perhaps be rather more a matter for this House than it has been in the past.

I know that people argue that it is best to have someone from inside in the position, because he knows the system, but one can just as well argue that it is best to have someone from outside, because he will bring a fresh approach to the whole situation. This is not an issue that can be resolved in neat terms—there could be one appointment from inside and another from outside—but when it comes to discussing not merely the remuneration and the pension but the appointment of this officer, Parliament should have a much stronger determination to decide whom it should be, rather than readily accepting what the Executive has decided.

The basic point was touched on by my hon. and learned Friend the Member for Beaconsfield (Mr. Bell). He said that what we must have the courage to do is to identify the proper weight and apply it. We should begin to work our way out of our present tangle—a tangle that was intensified by the Government's mishandling last summer and the way in which the whole matter became hopelessly involved with their £6 policy and their attitudes to the fixing of remunerations, rewards, wages, salaries, pensions and everything else. If we can take courage and establish the proper rate, we shall escape those difficulties in future.

9.51 p.m.

Mr. Charles R. Morris

This has been an enlightening, illuminating and in some respects sad debate. As a Minister, and certainly as a Member of Parliament over the years, I have shared the concern about the regard in which the public hold the House and Parliament. I am tempted to wonder what contribution some hon. Members have made tonight to public understanding of Parliament and of the circumstances and conditions under which hon. Members serve the electorate.

Let us consider some of the adjectives which have been used to describe the Bill. The hon. Member for Guildford (Mr. Howell) described it as an ugly, miserable and messy business. The hon. Member for Isle of Ely (Mr. Freud) spread himself. He said that morally and ethically we were establishing an ugly precedent—legislation for our own benefit. Everyone is entitled to his point of view and I would be the last to question anyone's sincerity, but the Bill has been represented as an example of parliamentarians establishing some privileged position for themselves.

In seeking to refute that argument, I would say that it ignores the fact that in 1975 Members of Parliament had not received a pay increase for three and a half years. Let any hon. Member identify any other section of the community who have been in that position and then put forward the view that parliamentarians are over-eager to put themselves in a privileged position. Those who identify themselves with that view are misrepresenting the position of MPs and committing a travesty of the facts.

Those who argue that we are seeking to establish a privileged position for ourselves overlook the fact that the appropriate rate for the job which hon. Members do was established by an independent body, the Top Salaries Review Body, and not by parliamentarians determining their own salary.

Once the TSRB had made its report, parliamentarians indicated that they were prepared to forgo an appreciable proportion of that £8,000 in the national interest and out of regard for the nation's economic difficulties. The same people who took that decision are now being represented as people who are concerned only for their own interests. One cannot have the argument both ways.

It is rather hard to listen to parliamentarians berating this measure, which seeks only to provide justice and a reasonable pension for those who have given many years of their life representing the interests of their electors as parliamentary representatives in this House. There are those who nod and shake their heads, but the fact remains that we have had disturbing examples over the years of parliamentarians who have shown the stresses of their services as individual Members of this House.

I want now to deal with the individual points raised during the course of the debate. The hon. Member for Halesowen and Stourbridge (Mr. Stokes) inquired about the position of Ministers under the Bill. The salaries and remuneration of Ministers at the present time is subject to study and review by the Top Salaries Review Body. As well as basing the pension of Members of Parliament on a notional salary of £8,000, the Bill seeks to make the same legislative arrangements for Ministers and other office-holders when the TSRB reports to the House on those salaries.

The hon. Member for Eastbourne (Mr. Gow) inquired about the salaries of the Comptroller and Auditor General and the Parliamentary Commissioner. The salary of both those gentlemen is £18,675.

Mr. Gow

Following upon the point made by my hon. Friend the Member for Guildford (Mr. Howell), will the Minister take the opportunity this evening of indicating the attitude of the Government towards the Parliamentary Commissioner (Amendment) Bill tomorrow?

Mr. Morris

Not at this stage, and certainly not without notice. I can understand the hon. Gentleman's eagerness as far as that issue is concerned.

Division No.115.]	AYES	[10.0 P.m.
Body Richard	Hicks, Robert	Ridley, Hon Nicholas
Boscawen, Hon Robert	Hooson, Emlyn	Ross, Stephen (Isle of Wight)
Clarke, Kenneth (Rushcliffe)	Kenneth-Bowman, Mrs Elaine	Sims, Roger
Clegg, Walter	King Evelyn (south Dorset)	Stanbrook, Ivor
Dean, Paul (N Somerset)	Lawson, Nigel	Warren, Kenneth
du Cann, Rt Hon Edward	Miller, Hal (Bromsgrove)
Durant, Tony	Page, Rt Hon R. Graham (Crosby)	TELLERS FOR THE AYES:
Goodlad, Alastair	Powell, Rt Hon J. Enoch	Mr, Clement Freud and
Gow, Ian (Eastbourne)	Rathbone, Tim	Mr. Roger Moate
Hall-Davis, A. G. F.

NOES
Atkinson, Norman	Fowler, Gerald (The wrekin)	McMillan, Tom (Glasgow C)
Bagier, Gordon A. T.	Freeson, Reginald	McNamara, Kevin
Bates, Alf	Gillbert, Dr John	Mawby, Ray
Bell, Ronald	Golding, John	Maynard, Miss Joan
Bishop, E. S.	Grant, George (Morpeth)	Mendelson. John
Booth, Rt Hon Albert	Hamilton, W. W. (central Fife)	Millan, Bruce
Bray, Dr, Jeremy	Hardy, Peter	Molloy, William
Carmichael, Neil	Harper, Joseph	Morris, Charles R. (Openshaw)
Clemitson, Ivor	Harrison, Walter (wakefield)	Moyle, Roland
Cocks, Michael (Bristol S)	Hooley, Frank	Murray, Rt Hon Ronald King
Conlan, Bernard	Huckfield, Les	Ogden, Eric
Cook, Robin F. (Edin C)	Hunter, Adam	Ovenden, John
Cryer, Bob	Irvine, Rt Hon sir A. (Edge Hill)	Parker, John
Cunningham, G. (Islington S)	Jackson, Miss Margaret (lincoln)	Robinson, Geoffrey
Cunningham, Dr J. (Whiteh)	Janner, Greville	Ross, Rt Hon w. (Kilmarnock)
Davies, Ifor (Gower)	Jenkins, Hugh (Putney)	Silkin, Rt Hon S. C. (Dulwich)
Deakins, Eric	Judd, Frank	Silverman, Julius
Dormand, J. D.	Kerr, Russell	Skinner, Dennis
Douglas-Mann, Bruce	Lambie, David	Small, William
Duffy, A. E. P.	Lamond, James	Smith, John (N Lanarkshire)
Ellis, John (Brigg & Scun)	Leadbitter, Ted	Snape, Peter
Faulds, Andrew	Lyons, Edward (Bradford W)	Spearing, Nigel
Fletcher, Raymond (IIkeston)	MacFarquhar, Roderick	Stallard, A. W.
Fletcher, T[...] (Darlington)	Mackenzie, Gregor	Stoddart, David
Ford, Bon	Maclennan, Robert	Stokes, John

A crucially important point was made by the hon. Member for Somerset, North (Mr. Dean) when he was seeking to argue the case that there was no analogy between the pension provision for Members of Parliament based on a notional salary of £8,000 a year and pension provision in the private sector. He developed his argument by quoting various dates—11th July and 22nd July. The Government's recommendations on this Bill are based on the date of the report of the independent Top Salaries Review Body, which was 13th June.

I am conscious that my hon. Friend the Member for Keighley (Mr. Cryer) suggested that a number of Members of Parliament had gone home in the cosy knowledge that the Bill might go through in their absence. That was an uncharitable attitude to many Members of Parliament who have pressing constituency commitments. At the same time, I hope that this measure will go through with the wholehearted support of the House.

Question put, That the amendment be made: —

The House divided: Ayes 24, Noes 84.

Tinn, James	Williams, Alan (Swansea W)
Tomlinson, Jonn	Woodall, Alec	TELLERS FOR THE NOE
Torney, Tom	Woof, Robert	Mr, James Hamilton and
Urwin, T.W	Young, David (Bolton E)	Mr. Thomas Cox
White, Frank R. (Bury)

Question accordingly negatived.

Main Question put forthwith pursuant to Standing Order No. 39 (Amendment on Second or Third Reading), and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).