Lord Chancellor's Salary (Hansard, 13 May 1987)

§ Mr. Peter Shore (Bethnal Green and Stepney)

In this election year, the Government have been careful, with their pay awards to the public sector. Two years ago, the House was outraged when the Lord Chancellor's salary order allowed for an increase of 16.6 per cent. not only for the Lord Chancellor but for those employed in the highest levels of the public service.

That was in the same year that the Government were officially pursuing a 3 per cent. a year public sector pay policy and were reluctantly forced to concede 5.6 per cent. for nurses. This year, by contrast, the Lord Chancellor's and other top salaries will be increased by 4.5 per cent., while nurses are to receive 9 per cent. that is progress. Nevertheless, we should look more carefully at the absolute levels of pay and not just at the percentages.

The increase of 4.5 per cent. may appear to be modest, but it appears to be much less so when we recall that the Lord Chancellor's salary presently starts at £79,400 and, as a result of the order, will rise to £83,000 in October 1987. An extra £3,600 is a substantial increase. It appears to be all the more so when we consider the only other order affecting pay that the House has approved this week. I refer to the Employment Subsidies Act 1978 (Renewal) (Great Britain) Order 1987 that was approved last night. That order authorised the continuation of the Department of Employment's scheme to pay employers £15 a week subsidy to take on 18, 19 and 20-year-old employees, provided only that they are not paid more than £65 a week.

The contrast between yesterday's order and today's illustrates yet again not only the Government's resolute pursuit of income inequality but the totally contradictory view that the Government appear to hold about the working of incentives. For the poor, low pay is an incentive to hard work, and indeed the only means of gaining employment. For the well-to-do, high pay is a necessary incentive to hard work and a proper reward for talent. I do not accept that view— nor, I believe, do the great majority of people. Nor am I convinced in any way by the assertion that the Lord Chancellor's salary is immovably fixed in relation to that of the Lord Chief Justice. The doctrine that the Lord Chancellor must have whatever the LCJ receives, plus £2,000, is simply unconvincing.

I must warn the Government about future Top Salaries Review Body awards and top salaries in the public sector. In many instances, top salaries are set by what is considered to be comparable work and comparable responsibilty in the private sector. In the past two years, and particularly since the big bang in the City, there has been a veritable explosion of top rewards and top pay in the private sector, If that is to be reflected in future TSRB reports on pay in the top echelons of the public service, we shall see a massive increase in public sector pay at the top level. I do not believe that that will be acceptable to the great bulk of public sector employees, far too many of whom are among low-paid workers.

I shall say no more, but it is right to alert the House and the TSRB to what may become a major concern in the near future.

§ The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen)

It would be a courtesy if I respond, albeit briefly, to the right hon. Member for Bethnal Green and Stepney (Mr. Shore). He has used the occasion to broaden the consideration of the Lord Chancellor's salary into a wider economic policy discussion. If, over the next few weeks, we are confronted by claims from him and his political colleagues that we need policies in terms of income determination and publicly influenced income determination that will squeeze differentials and if we are to have taxation policies that will squeeze differentials, we should be able to have an open and clear debate about what kind of society our respective economic policies are designed to produce, the right hon. Gentleman and I will engage in an argument with relish. I have a suspicion that, at the end of the day, there will be a better public appreciation and understanding of the argument for differentials than there would be for the argument for compressing them through either the mechanism of an incomes policy or taxation. However, I have no wish to broaden the matter unnecessarily.

However, I remind the House why the order is needed. The requirement stems from the link between the salaries of the Lord Chancellor and the Lord Chief Justice. That link derives from the Top Salaries Review Body recommendation—again, not some thought emanating from the Treasury Bench, but a response to the 1983 TSRB recommendation that, in recognition of his position as head of the judiciary and his responsibility as a whole, the Lord Chancellor should be paid more than the Lord Chief Justice. I commend that attitude to the House.