HC Deb 23 July 1976 vol 915 cc2325-36
Mr. Ridley

The danger is that in taking this limit of £8,500 we have no idea what the definition of earnings should be. A noble Lord or an hon. Member may have various forms of unearned income, and we believe that this is to be exempted. But suppose he has genuine expenses which can be offset against his taxation liability. Are these to count against the limit?

It would make sense to say that the £8,500 limit was income, leaving aside expenses and allowances declared to the tax inspector. It would make sense to say which forms of earned and invest-meat income should be included and which should not. There are a number of different sorts of income and this is a complex matter.

Mr. J. Enoch Powell (Down, South)

Would the hon. Member agree that there is another case which may be very relevant, namely the profit from a farm or estate which a person manages? Is that regarded as earned income?

Mr. Ridley

If the noble Lord or the hon. Member runs the farm himself, that is earned income and counts against the limit. If he appoints a manager and takes the profit, that would be investment income which would be excluded. That illustrates the sort of nonsense we are perpetuating.

I can easily make any sum I want out of my income by adding in or taking out things which have not been clarified. I am not claiming that altogether my income would be less than £8,500. I believe that it is more than that, but as a protest against this ridiculous control I shall claim the £312, even though I shall give it to charity.

Mr. Deputy Speaker (Mr. Oscar Murton)

I hesitate to interrupt the hon. Gentleman. I have been hesitating for a while. We are debating junior Ministers' and other salaries. I should draw his attention to the fact that he is straying into the subject matter of the previous business. But perhaps he has now passed that point.

Mr. Nigel Lawson (Blaby)

Would my hon. Friend agree that we should have the view of the hon. Member for Keighley (Mr. Cryer) on the distinction between part-time and full-time junior Ministers and how it should be applied in the case of this Order?

Mr. Ridley

I have already suggested that noble Lords who are Parliamentary Secretaries have a much lesser burden than hon. Members. They have no constituencies and not so much parliamentary business. But although they are part-time Parliamentary Secretaries in another place, they are the only ones who will receive the increase. That is typical of the nonsense in making an Order such as this.

The Parliamentary Secretary described this increase which everyone will get if their income is low enough as "a necessary increase." He said that hon. Gentlemen needed it. Do the Government think that the Solicitor-General for Scotland needs an increase? He will be paid £8,062. Will the Captain of the Honourable Corps of Gentlemen-at-Arms, who will be paid £6,812 under this Order, need an increase? Is this the Socialist definition of need? These are the grounds on which we were sold the last motion. We were told that there were hon. Members in this House who were so impoverished that they had to have the £312 to avoid difficulties.

Mr. Russell Kerr (Feltham)

We have not all got your inherited wealth.

Mr. Ridley

Whenever I have felt the need of an increase I have taken it upon myself to go out and earn some money, and that is a perfectly reasonable thing to do.

We have been told that some hon. Members need an increase. I would like to know whether the need exists among those who are mentioned in the Order. I very much doubt that it does. The Socialist egalitarian approach is being pressed as a prime priority above every other consideration. Need is not the basis of the Order.

The hon. Member for Sowerby (Mr. Madden) made much of the independent Review Body. If Lord Boyle's advice is being rejected perhaps we could ask the right hon. Member for Birmingham, Stechford (Mr. Jenkins) to become the arbiter of our salaries in due course because he will have the power to impose over our sovereignty. We would not be able to disagree with a directive from Brussels on how much we should be paid. And who better than the right hon. Gentleman, when he will receive £60,000 a year tax free, so we understand. He could assess what we should be paid from a position of impartiality. I throw that suggestion in as a way of helping the Parliamentary Secretary.

This Order, like the motion before it, is nonsense. It is a result of the prejudices of the Labour Party with its misguided incomes policy served up in a sort of public relations sauce. I find it extremely distasteful, and the drafting of the Order is a piece of real sleight of hand. I hope that somewhere some Parliamentary Secretary in this miserable Administration will be strong enough and courageous enough to claim his full salary, the £312 extra he is granted by this Order. Otherwise Orders, laws, motions and Acts of this House mean nothing.

The Lord President said that although the Order provides that Parliamentary Secretaries are to have an increase of £312, they will not get it. What is the more important of the two? It is the Lord President's word. It overrides the motion which the House will pass. In the same way, the £8,500 limit derives not from legislation but from what the Lord President said on 23rd July.

I object strongly to the Lord President's desire to govern by diktat, to lay down what shall be by what he says—

Mr. Powell

Government by Hansard.

Mr. Ridley

That is an apt phrase, but these matters are not yet in Hansard.

Mr. Powell

The statement is in Hansard.

Mr. Ridley

The letter sent to me which says that junior Ministers are not to receive the increase if they are in the Commons is in Hansard only because I quoted it. It will appear in the Hansard of today's proceedings.

I therefore personally believe that my hon. Friends should vote against the Order as they voted against the last motion, more as a protest against the whole way in which this matter has been handled and in the hope of defeating the payroll vote which, after all, on this occasion will be voting for its own pay.

4.11 p.m.

Mr. George Cunningham (Islington, South and Finsbury)

If the situation were as the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) described it, there would be something deeply worrying which would need to be dealt with. He is suggesting that we are about to pass into the law of the land a provision dealing with certain salaries but that that will not be implemented, contrary to the law of the land, because the Lord President does not intend to do so in certain circumstances. I do not doubt that the Minister who winds up the debate will be better able to put the position correctly and authoritatively than I can, but that charge should not be allowed to stand for one second longer than necessary.

As I understand it, there is no truth in the suggestion. In his long experience of legislation in this House the hon. Member will surely have some across many items which provide that money may be spent up to a certain level and for certain purposes out of moneys to be provided by Parliament. I think that he will find that that is the situation under the Ministerial and Other Salaries Act, which we are in the course of seeking to amend. For the money actually to be paid in those circumstances requires not only the Act which, to use the language of the American Congress which is curiously applicable in this case, authorises expenditure, but also the appropriation Act to appropriate it. Quite simply, the money cannot be paid unless the appropriation Act authorises the payment.

Therefore, the junior Minister in the House of Lords whom the hon. Member invited to make a claim—

Mr. Ridley

I invited a junior Minister who is not eligible for it, so he would have to be in the Commons. The Order allows junior Ministers in the House of Lords to claim it.

Mr. Cunningham

If the junior Minister made a claim on the basis of the amended Act, if the Order passes today, it would not be a valid claim because there would not be subsequent legislation to authorise that payment. I cannot state that authoritatively, but it is my understanding of the situation, and that is why the Lord President is not overruling statute law. God help him if he does, because he will then have trouble not just from the Opposition if he gets up to that kind of game. The hon. Member for Cirencester and Tewkesbury should know enough to realise that that just will not happen.

These motions arise because of a feature of the pay policy. The hon. Member does not agree with that feature or with any feature of any pay policy. That policy has been imposed on the rest of the country, although without statutory backing. Whatever we do must comply with that pay policy. The result in the case of the complex situation of Members' and Ministers' pay is even more anomalous than in the case of other people. There is no real anomaly in the case of people outside the House. There may be things with which people do not agree, but there is no anomaly. In the case of Members, and of Ministers who draw two salaries, there are anomalies and there is untidiness which manifest themselves in the measures we are passing today. They are quite simply unavoidable consequences of the nature of the pay policy in the past 12 months which will not repeat themselves in the pay policy for the coming 12 months. Many difficulties arise from similar untidinesses which must simply be tolerated.

I shall vote for the Order because it is one way of doing what we all want to do. It is not the way which I would have chosen, however. The equivalent of the pay of a Member of Parliament is the attendance allowance in the House of Lords. I know that notionally the attendance allowance is supposed to cover costs. It is a great deal nearer to Members' pay than the pay of those few peers who happen to be Ministers.

The Government ought to have left the pay of House of Lords Ministers at the same rate as applies to other Ministers. To have proposed an increase in the attendance allowance of the Members of the House of Lords, if that were felt desirable, might not have been attractive to some of us, but it would have been a more logical way of dealing with the situation. It might not be attractive to some of use because more often the so-called attendance allowance is, quite wrongly, given free of tax, irrespective of whether the peer in question has deductible expenses to meet in the course of earning it.

If the peer in question has some expense, it will presumably be the expense of getting to the House of Lords and, I suppose, of eating there. Neither of those is a deductible expense for taxation purposes. Therefore, it is quite wrong that the House of Lords attendance allowance is given tax free. It is an exception to the normal tax treatment of expenses, and the Inland Revenue has recently and quite rightly been tightening up greatly on the taxation treatment of expense payments. That ought to be extended to the House of Lords. If we want to leave the House of Lords on average with the same net position, we have to increase the gross so-called attendance allowance and charge it to tax like any other such payment and leave the Members there with the same net position. The Government ought to have directed their attention to the attendance allowance rather than to ministerial salaries and consideration must soon be given to the taxation of the House of Lords' attendance allowance.

Since the Government's proposal is one way of doing the job, though not the way I should have preferred, I shall vote for it.

4.20 p.m.

Mr. John Peyton (Yeovil)

I do not advise my hon. Friends to vote against the motion or to seek to delay its passage.

I very much doubt whether that unhappy breed of men known as Parliamentary Secretaries have attracted so much attention from their superiors for a long time. I know of no class of man singled out for more unpleasant, unkind and unsympathetic treatment than Parliamentary Secretaries.

When it is odious, onerous or embarrassing to be a Minister, they are fully-fledged Ministers taking their place with their colleagues—who are mostly absent. When there is anything glorious, distinguished, honourable or privileged in being a Minister, the Parliamentary Secretary is very much regarded as a totally inferior breed of animal.

The Order has shades of George Orwell. It should be called the "All Animals are Equal" Order. All Ministers are given the same amount of money under the Order, but some are a very great deal less equal than others and will not be able to take it.

This highlights the extraordinary and ponderous way in which we go about the most simple tasks. A few people are to get some extra money and I can see no need to bring in all the others in this ponderous, dreadfully worded Order. One paragraph reads: For the amount of salary specified in the second column of Part III or IV of Schedule 1 to the Ministerial and other Salaries Act 1975 against each of the offices specified in the first column of the following table there shall be substituted the amount of salary specified in relation to that office in the second column of the table. This kind of thing ought not to be allowed to happen without some protest. I hope that it will not be regarded as a partisan protest. It should be made from both sides of the House and with some venom at this way of conducting our business.

4.22 p.m.

The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot)

The criticisms of the right hon. Member for Yeovil (Mr. Peyton) of the literary quality of the Order are most apposite and I hope that they will be taken to heart. I do not know whether the lawyers could have achieved the same objectives by stating them more agreeably, but the right hon. Gentleman's protest strikes a chord in my breast and it would be foolish not to acknowledge it.

I am grateful to my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham) for his remarks. I agree that the attendance allowance and expenses are proper matters for consideration, although they may form part of the Boyle Committee Report. They do not figure in the part of the report we have received but there is a further report to come. I do not know what representations have been made on this subject, but my hon. Friend was justified in what he said.

I am also grateful to my hon. Friend for his effective reply to the speech of the hon. Member for Cirencester and Tewkesbury (Mr. Ridley), who renewed the debates which we had almost exactly a year ago and which I remember very well. The hon. Member explained then, with his customary brevity, his opposition to incomes policies in any form, prophesied that any policy would be unworkable and illustrated the paradoxes and contradictions that were bound to arise. Those of us who have criticised various forms of incomes policy in the past know that this game is not so difficult to play.

But the hon. Gentleman's prophecies of the total collapse of the policy have been disproved. The policy worked far better than all the critics, including the right hon. Member for Down, South (Mr. Powell), who made the most telling, all-embracing attacks on it, believed that it could. It succeeded and was a notable example of a successful policy of asking people to accept arrangements by consent. It worked because of the readiness of trade unionists and employers to abode by general arrangements. Nobody who worked through most of that year at the Department of Employment, as I did, would be foolish enough to suggest that it was due to unemployment or to any other such factor. People abided by the policy because they had agreed to it through their democraticv institutions.

I deny the suggestion of the right hon. Member for Down, South that there is any element in our proposals of government by Hansard. They are nothing of the sort. We have a voluntary policy applied by voluntary means. The right hon. Member has said on many occasions that it is not a criminal offence to pay more, but we expect that the vast majority of people in this country will be prepared to accept what has been generally agreed and it would have been absurd for us to say that we would not abide by the £8,500 limit. Of course this gives rise to certain anomalies in its application to some Parliamentary Secretaries, particularly in another place. That is why we have had to have special provision for dealing with this problem.

Our legal advice is that Section 1(4) of the Ministerial and other Salaries Act 1975 does not enable different amounts to be specified for different holders of a particular office specified in Schedule 1 of the Act and that therefore there is no power to make different provision for different cases.

We could have had a whole new Bill. Instead we chose what the right hon. Member for Yeovil considers to be a clumsy and awkward method. But it does the job and I invite the house to approve the motion.

4.29 p.m

Mr. Nigel Lawson (Blaby)

I shall be very brief. There is an important point to which I expected the Leader of the House to address himself but to which he did not address himself.

The right hon. Gentleman has suggested that some Ministers should waive the extra £312 a year. My hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) has suggested that they should not waive it.

It is curious to note that in a letter to my hon. Friend the Member for Cirencester and Tewkesbury on 22nd July, the Leader of the House said something rather different. He said: It might be helpful if I explain that the Order is drafted as it is merely because the Act can only be amended in respect of a whole category of Ministers. Under Section 4(2) of the Act, however, 'the amount specified … shall be taken to be the maximum amount … and accordingly … the salary … may be of a less amount than that so specified'. That passage included a lot of dots, indicating that words were missing. I am not an exceptionally suspicious person, but I looked up the Act to find out which words were missing. That was very significant indeed. No doubt that was why the Leader of the House added those little dots because what Section 4(2) said was: The amount specified in this Act as being the amount of any salary payable thereunder out of money provided by Parliament shall be taken to be the maximum amount so payable,"— it is the word "payable", that key word, which he left out of the letter to my hon. Friend— and accordingly, notwithstanding the provisions of this Act as to any such amount, the salary so payable in any year in respect of any office may be of a less amount than that so specified. What the right hon. Gentleman is sheltering under is the fact that junior Ministers can say "No, we shall not raise our salaries. We do not want it".

What the right hon. Gentleman is saying is that the Government, under Section 4(2), can refrain from paying them the increase. What he is saying, in other words, is that it has been done by statute and that he is imposing on the junior Ministers a statutory incomes policy.

There is no question of the junior Ministers having any option to take it or leave it. It is a curious thing, and it is something which should be referred to on this occasion, that here we have, for the first time, the Leader of the House coming forward with a fully-fledged and un adulterated statutory income policy.

Question put and agreed to.

Resolved, That the Junior Minister and Other Salaries Order 1976,a draft of which was laid before this House on 14th July, be approved.