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Lords amendment: No. 12, after clause 22, to insert the following new clause—Salaries and expenses—
.—(1) The Authority shall pay to the Mayor and the Assembly members salaries at such levels—
(2) The Authority may pay to the Mayor and the Assembly members, in respect of expenses incurred in the exercise of their functions, allowances at such levels—
(3) A determination or direction under subsection (1) above may provide—
(4) The offices mentioned in subsection (3)(b) above are—
(5) A determination or direction under subsection (2) above may provide for different allowances for different cases.
(6) A determination under this section may provide for levels of salaries or allowances to change from time to time by reference to a specified formula.
(7) The Authority's functions of making determinations under this section shall be functions of the Authority which are exercisable by the Mayor and the Assembly acting jointly on behalf of the Authority.
(8) The standing orders of the Authority must include provision for the publication of every determination under this section.
(9) The Secretary of State shall publish any direction under this section as soon as is reasonably practicable after it is given.
§ Mr. RaynsfordI beg to move, That this House agrees with the Lords in the said amendment.
Mr. Deputy SpeakerWith this, it will be convenient to take Lords amendments Nos. 13 to 16, 115, 532, 564, 658, 742 and 788.
§ Mr. RaynsfordThe amendments provide for the Authority to pay the mayor and Assembly members' salaries and expenses, and to abate those salaries where the members hold other paid public offices to which they have been elected or appointed. They provide for the Authority to establish a pension scheme for the mayor and the Assembly, and for the Authority to publish details each year of salaries and expenses that have been paid and of the financial provision made for pensions. They also provide for the exclusion of Assembly members from attendance allowance or other remuneration schemes of 563 the fire authority and the London development agency. Such provision is already made in relation to the Metropolitan police authority, and Assembly members cannot be appointed to Transport for London. The other minor amendments are consequential on these principal amendments.
§ Mr. ForthThis is all very well, but it is yet another case of a substantial issue being slipped in quietly at this stage of the Bill's progress, presumably in the hope that not too many people will notice or pay attention to it.
The amendments raise the substantial issue of whether an elected authority should be free to set whatever pay levels for itself that it deems fit. Not even this House has that freedom: we defer to the Review Body on Senior Salaries, which gives the public a degree of confidence that Members of Parliament are not voting themselves excessive salaries—at least, we think it does. But no such reassurance is built into this mechanism. We are saying, in the purest possible form, that we will trust the elected members to pay themselves an appropriate salary, without any longstop or backstop.
§ Mr. RaynsfordTo avoid any confusion or uncertainty, I should like to make it clear to the right hon. Gentleman, as I hope I did in Committee, that the salaries will be based on the recommendations of the Senior Salaries Review Board.
§ Mr. ForthI am grateful to the Minister for that reassurance. I had not spotted any such provision in the Bill. The Minister's confirmation will give some comfort to the public, particularly as this is a completely new venture, and for that I am grateful. If nothing else, the debate has clarified one matter.
I should like a similar reassurance from the Minister who, I am interested to see, is playing a prominent role in our proceedings. He started by saying modestly that he was more of an adviser or bystander, but we have had the privilege and pleasure of his very active participation. We have not heard much from the other Minister, but we may hear more as time goes on. I await the moment.
I have another point on which I hope to elicit a similar reassurance from the Minister. Lords amendment No. 14 concerns pensions, which are, if anything, even more sensitive than salaries. Salaries are relatively open and transparent, but pensions are complex and it is often difficult for the public to understand exactly what is being paid and on what basis. There are questions about length of service and who makes contributions—the employee or the employer—and so on. There are huge variations in pension schemes for elected representatives around the world. Some are extraordinarily generous—in passing, I think that ours is particularly parsimonious and, given that the average length of Members' service is only 12 years, unfair.
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We need some reassurance from the Minister, similar to that which he gave on salaries, that in making provision for pensions at the start of this new body, there is no question of members being able to vote themselves over-generous pension arrangements that require excessive input from the hapless taxpayer. A balance must be struck, but we need some reassurance that there will 564 be a mechanism to reassure the House and the taxpayer at large that the pensions provisions will have a safety mechanism attached and not be excessively generous.
§ Mr. WilshireThe Minister may be able to confirm something for me and thus make most of what I want to say irrelevant. I was not on the Standing Committee, but he told my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) that he had made it clear in Committee that guidelines would have to be followed. Will that be enacted, or is it only what the Government hope will happen? Will the Assembly be able to note the guidance of the top Review Body on Senior Salaries and then move on, or will it be bound by it?
§ Mr. RaynsfordI can give the hon. Gentleman the reassurance that he seeks. In the ethical guidance that will be issued, we intend to indicate that the initial salaries will be set by the Secretary of State on the recommendations of the Review Body on Senior Salaries. Subsequently, the Authority itself should have regard to the recommendations of the review body in any upgrading of, or changes to, those salaries.
§ Mr. WilshireSadly, that has not rendered what I want to say useless. Ethical guidelines are wonderful things that we should all follow and recommendations are useful, but I was seeking reassurance that there was a statutory obligation that bound the Authority. Without that, my concerns still stand.
Whatever the ethical considerations, we are being requested to vote to allow the Authority to pay itself whatever it likes. It has only to listen and think before doing so. That is not the case in local government, so why should it be with the Authority? Why are the guidelines, whatever they may be, not being put in terms that require them to be followed? If that is not possible, why cannot we pass the setting of salaries to an independent third party, so we do not have people deciding what they want to put in their pockets and doing so at the public's expense? We should review what we are being asked to do. This is not party political, because my worry applies irrespective of which party the Assembly's members come from.
I am even more concerned about expenses. It is always easy to home in on someone's salary, but expenses often get published only as a general figure. Over the years, many people have wanted to spare their own blushes and avoid the bad publicity of a pay rise by turning their attention to setting their own expenses.
I do not see anywhere in the Bill proposals to limit the power of the Authority's members to set their own expenses. There is not even any reference to guidelines or codes. The Minister may say that there will be guidelines. That would help a bit, but it is not enough reassurance.
The Bill allows for indexation. I am all in favour of indexation as a way of dealing with inflation, but there ought to be some limit on the amount of indexation that can be applied, or some terms that will have to be followed. If I understand it correctly, at the moment the Authority can simply say that it will index salaries by 25 per cent. a year, without justification. That will have the power of law. So I hope that, even at this last moment, the Government will consider limiting automatic indexation of salaries and expenses to the rate of inflation. 565 If the Authority wishes to go above the rate of inflation, it should have to discuss it at a public meeting at which the press can hear what is said and report it.
The Bill also makes reference to the publication of information. All of us who have been through local government know only too well what happens when a minute advert is put on page 43 of the local rag. That amounts to publication, but it does not tell anyone anything—because no one sees it. In saying that matters must be published, this House, the Government or whoever should specify that information is to be published in such a way that it is clear for all to see, and in a place and form in which the public will understand it.
The other matter on which I ask the Minister to comment is pensions. Rather like expenses, pensions can become a useful way of acting in a fashion that the press and public do not necessarily notice. Will details about pensions include just the employees' portion of the payment? Will they include the employer's portion, or will the two be listed separately? Will details be given of when pensions are payable? There are some splendid examples from around the world. Australia is the one that always come to mind. A person has to serve in the Parliament for only a short period to go on to a full pension. That is a relevant matter for the Greater London Authority.
Will we be told what the end benefits are for people whose contributions are paid at public expense? If a body which is subsidiary to Parliament and the Government is given financial freedom which is not given to other people, we shall lay the system wide open to abuse. In due course, there will be a scandal and we shall be back here having to legislate. We can prevent all that by getting the Bill right tonight.
§ Mr. Simon HughesThe hon. Member for Spelthorne (Mr. Wilshire) has given some wise words of caution. The first days of the Welsh Assembly and the Scottish Parliament gave those bodies no good publicity because all they appeared to discuss was salaries, costs and so on. There is a wider issue here about the management of public money paid in salaries, expenses and pensions. I understand the implications: this would take us down the road of public sector pay control for all public bodies.
I have three specific questions for the Minister, but I flag it up that devolving to each body in the public sector the power to make its own pay arrangements provides a large opportunity for actions that produce great criticism. I have checked with my hon. Friend the Member for Sutton and Cheam (Mr. Burstow) that my understanding is right. Local government, for example, is now much more free to make its own arrangements. The danger of that whole process is that, if the chief executive of the next door authority is paid £120,000, we have to pay the same to our chief executive, and then the members will decide that they have to pay themselves a decent amount because they will not otherwise receive anything like the same as their chief executive. The sums never go down—the process never works in the other direction.
§ Mr. WilshireThe hon. Gentleman thoughtfully referred to public sector pay restraint, but I hope that he 566 can see the difference between a debate about elected members and one about paid officials. That is the only distinction that I should like him to draw.
§ Mr. HughesI understand that, but I ask the hon. Gentleman to accept that, for example, when a person is considering whether to be a full-time councillor, and—in this instance—a full-time council leader, he or she might ask, "How much would that pay me, and how much are the people who work with me paid?"
I have three questions. First, I accept the Minister's proposition that, in effect, we should start with the recommendations of the Senior Salaries Review Body as to what the salaries of the mayor and Assembly members should be. That is the proper way to determine their salaries, and I am not against the idea that the salaries should continue thus to be determined. I do not know whether I have the authority to say that—it is a personal view.
One relevant issue that has been recorded with the review body by London local government leaders, cross-party, is that whatever amount is decided should reflect those aspects that are particular to living, working and serving in the capital city. The amount should reflect, first, the cost of living and travelling in London; and secondly, it should be comparable with that received by people who do comparable jobs. We want the mayor to be worthy of the city, but if he or she chooses not to take their salary, that is their responsibility. However, we should consider how much they are paid compared with mayors of other great European cities—also how large an electorate they represent, what their work load will be, and so on.
That raises some difficult questions, because if one is on the top-up list in London, one is part of a group of people who represent the whole of London, but that should not mean that one can expect a salary that is X times more than someone who represents a particular constituency. Representations have been made to the salaries review body, and I hope that the points that apply specifically to London will be taken properly into account.
My second question does not seem to have been answered thus far. Amendment No. 13 is headed:
Limit on salaries of members of other public bodies.It deals with the fact that the dual mandate is not precluded. My understanding is that one could be a Member of Parliament and a member of the Assembly, or a councillor and a member of the Assembly. I accept that, and I support the idea that one should not be able to accumulate salary after salary and expenses after expenses. However, behind that amendment is the question of whether people are expected to be full time or part time. For example, if there is to be a deduction for someone is a Southwark councillor and a member of the Greater London Assembly, why should there not also be a deduction if that person has a private salary?There is one answer to that question that I can understand, but I do not think that it is sufficient. People who are not doing a full-time job should perhaps expect a reduction if they have other income. That point also applies to the debates about our costs in this place.
567 Will the Minister consider whether my third question could be dealt with under secondary legislation? Amendment No. 12 includes the provision:
A determination or direction … may provide … for different salaries to be payable to Assembly members holding different such officers.Under a normal understanding of the drafting, that would allow, at least in theory, for a different salary to be paid to everybody in the Assembly, because everyone would be doing a different job—chairing different committees, sub-committees and so on. It cannot be right to give great discretion to the Government of the day to determine the salaries of different people so differentially. I am not suggesting that that is in the Government's mind, but Government must be seen to act impartially. I want to ensure that the wording does not allow abuse of the system, with some people getting a good deal, while others get a less good deal.
§ Mr. RandallMay I offer the Minister a cautionary tale with regard to people setting their own salaries and allowances? In the London borough of Hillingdon, councillors enjoy the second lowest allowances in London. All the parties have got together to try to increase them and to bring them more in line with those of other boroughs. However, it is a time of financial constraint in the borough and the subject is regarded by the public as very poor for the status of councillors. Week after week, the Uxbridge Gazette is full of letters saying that the councillors should show self-restraint.
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I fear that, as the hon. Member for Southwark, North and Bermondsey (Mr. Hughes) said, the new Assembly will get off to a bad start if the first weeks are taken up with wrangling over salaries, whether they should be means-tested, and whether there should be a greater deduction for a Southwark councillor because he gets more or less than one from Hillingdon. Thus there is a whole Pandora's box, which will not bode well for the first days of the Assembly.
May I ask the Minister another question, as I may not have been clear enough when I spoke on the previous amendment? Why could this matter not have been addressed in Standing Committee, when we had plenty of time to deal with it? Why has it arisen now, when we are in a bit of a rush?
§ Mr. RaynsfordWith the leave of the House, Mr. Deputy Speaker, I shall start by responding to the last question. The hon. Member for Uxbridge (Mr. Randall) will recall from our debates in Committee that various stages had to be gone through before the Government could incur expenditure on certain items. Before Second Reading, we were not entitled to incur expenditure on those items. We have now progressed beyond that. It was not, however, possible to include in the initial stages of the Bill the recommendations of the Senior Salaries Review Board, which we could not commission to undertake that work until we had the sanction and cover to do so.
A number of those processes have, of necessity, taken place later than I would, ideally, have liked, but the hon. Gentleman will appreciate that that is simply the mechanics of introducing a new procedure of this nature. 568 We are very much committed to the recommendations of the Senior Salaries Review Board. We asked it to look into the question of both salaries and pensions, and it will be on its recommendations that the Secretary of State will set the arrangements that will begin the process.
On salaries, the fear is that the first days of the GLA will be overshadowed by decisions being taken by Assembly members on their own salaries. That fear can be allayed by my saying that the Secretary of State will take the decision on the initial occasion. It will therefore be the Government's decision. However, it is not right that an autonomous body—a strategic authority for London—should be entirely precluded from having any responsibility in these matters in future years. The model that we propose is that the SSRB will be required to report periodically on those matters.
§ Mr. RandallWill there be any indication of the salary on or around the election date, because we shall all be asked that question on the doorsteps?
§ Mr. RaynsfordIndeed. We hope that the SSRB will report to the Government next month. The Government certainly want those recommendations, whatever they are—the decision will be taken by my right hon. Friend the Secretary of State—to be made public well before the election.
In the first instance, the SSRB will make recommendations. It will be required to report periodically on those matters to the GLA, and the GLA will have to have regard to the SSRB's recommendations before it takes its final decisions. As I said, it would not be right to create a framework in which the GLA has no discretion at all. As a responsible body, it should have the ability to set salaries and pensions for its members. We are dealing now only with the salaries of the mayor and Assembly members, not with those of staff. We believe that the matter should be dealt with within an ethical framework, which requires the GLA to have regard to the SSRB's advice. If it departs without good reason from that advice, it would certainly be open to challenge, and some people would no doubt consider mounting such a challenge. I hope that those safeguards reassure hon. Members who are concerned about this provision.
I shall now deal with the points raised by the hon. Member for Southwark, North and Bermondsey (Mr. Hughes). It will be up to the Senior Salaries Review Board to consider what London costs should be taken into account in its recommendations. It will be difficult for the board to find posts comparable to those of mayor and Assembly member, because to the best of my knowledge there are none. The post of mayor is unique, and there are no other assembly members in local government with a strategic role and a salary. It may, therefore, be difficult for that aspiration to be met.
It is proper that people should not be paid from the public purse for performing two functions without an abatement of their salaries. That is the crucial point. Abatement of salaries does not apply to people who have a private income from another source. However, an abatement provision is a proper safeguard for public money.
§ Mr. Simon HughesWill the hon. Gentleman tell us whether the Labour party will require its Assembly members to be full time, or will it allow them to be part time?
§ Mr. RaynsfordThat provision is not precisely defined in the legislation, but the presumption is that the amount 569 of work will require Assembly members to devote the great bulk of their time to that job. There is no statutory requirement that it must be a full-time occupation with no other activity.
On the hon. Gentleman's third concern, he will understand from what I said in response to the question about the role of the Senior Salaries Review Board that we have had to provide flexibility in the wording to allow different salaries for Assembly members doing different jobs, because we cannot anticipate the board's recommendations. From the evidence given to the board, we have identified different posts and responsibilities that might be considered for a salary uplift because of special responsibilities. The statutory provisions must be flexible to take account of possible recommendations from the board, and we will deal with them when we receive them.
I hope that I have covered all the issues, and that hon. Members will recognise that this is a sensible basis for proceeding. It provides proper safeguards, and will ensure that the Greater London Authority can get off to a good start without allegations of improper preference given to members in their salaries or pension entitlement.
§ Lords amendment agreed to.
§ Lords amendments Nos. 13 to 16 agreed to [some with Special Entry].