HC Deb 04 July 2000 vol 353 cc296-303
Mr. Peter Atkinson

I beg to move amendment No. 30, in page 70, line 31, leave out "pensions,".

Mr. Deputy Speaker

With this, it will be convenient to discuss the following: Government amendments Nos. 46 and 47.

Amendment No. 217, in page 71, line 9, leave out subsection (7).

Amendment No. 48, in page 71, line 13, leave out— 'which are operating executive arrangements'. Amendment No. 49, in page 71, line 14, leave out "of the executive".

Government amendments Nos. 187 and 188.

Amendment No. 31, in page 71, line 18, leave out "pensions,".

Amendment No. 32, in page 71, line 24, leave out "pensions,".

Amendment No. 50, in page 72, line 9, leave out— 'which are operating executive arrangements'. Amendment No. 51, in page 72, line 10, leave out "of the executive".

Government amendment No. 189.

Amendment No. 33, in page 72, line 11, leave out "pensions,".

Amendment No. 52, in page 72, leave out lines 26 and 27.

Government amendment No. 191.

Mr. Atkinson

The amendments have the particular purpose of reversing the trend towards professional, full-time councillors, and of preventing the substantial increase in the power of patronage that will result from the Bill.

Amendment No. 217 would remove the proposals relating to allowances, and the requirement to pay pensions to councillors. In Committee, we opposed the Government's proposal to pay pensions to executive members in the cabinet system. We did not consider that any councillor should be entitled to a pension, but the complaint to the Government was that it is was unfair to pay pensions only to executive members, rather than to all councillors. The Government have decided, therefore, to extend the pension regime to all local councillors.

We oppose the provision, as we believe that being a councillor is a matter of public duty. We do not consider it an activity that deserves large-scale reward, as the Government propose. In addition, the proposal has unleashed a host of headlines in various local newspapers about fat-cattery, especially in Labour councils.

No sooner was the idea of cabinets mooted than councillors throughout the country, particularly Labour councillors, began to award their leaders substantial sums of money. As my hon. Friend the Member for Eastbourne (Mr. Waterson) said in Committee, Hammersmith and Fulham was the first in this respect, with the council leader becoming, at that time, the most highly paid in the country. Hot on the heels of that award was the leader of Cardiff city council with an allowance of between £35,000 and £40,000 a year.

If my memory serves me right, the lord mayor of Cardiff was earmarked a salary of £58,000. It was only after protests and difficult meetings that that amount was reduced. When that issue was debated in Cardiff, members of the Labour group who opposed paying the lord mayor such a salary were subsequently suspended. That demonstrates the attitude of Labour councillors towards the new cabinet system.

My local newspaper, and that of the Minister for Local Government and the Regions, is The Journal in Newcastle. [Interruption.] The right hon. Lady points out that The Northern Echo is her local paper, but I believe that The Journal also circulates in her constituency. In any case, The Journal carried out a survey of north-east councils and their reaction to the cabinet system. It produced a headline, which I think damages all in local government: "Labour Councils Branded Tat Cats'". The paper contained an exposé of the amounts paid to various councillors. I am pleased to say that it included a photograph of me, taken nearly 15 years ago. It is always flattering to be reminded of what one looked like 15 years ago.

The Journal did a detailed analysis of how councillors' allowances had increased. In Sunderland, for example, the leader of the council's allowance went up from £10,900 to £30,000 a year. The leader of Sedgefield council, the Prime Minister's local authority, put up his allowance from £4,000 to £15,000 a year. If that were not enough, there have been huge increases in the leader's salary and costs in Newcastle from £14,000 to £29,375, with the total allowances for the cabinet increasing by more than £619,000—a staggering amount of money.

Mr. Levitt

I have been listening to the hon. Gentleman's list with interest. Is he saying that only people who can afford to be councillors and pay their own pension contributions should be councillors? That is the conclusion that I am drawing from his remarks.

Mr. Atkinson

That is not the case at all. We accept that people should have a reasonable allowance to enable them to be councillors. [HON. MEMBERS: "Spell it out."] I will spell it out. We do not want people making a living as full-time councillors. That is utterly against the ethic of being a councillor. Those of us who have been councillors believed that the officers were the paid hands doing the job and that councillors were responsible for political control and advice. However, we did that as part of a different duty, not as a full-time career. The Government are proposing to make being a councillor a full-time and highly paid job.

Once we introduce high salaries, we increase not only the benefit to the individual but the power of patronage. That is one of the most important issues to come out of these proposals for high salaries.

Labour party groups talk of abolishing whipping, but if one does so but has the power of patronage, one achieves the same thing more effectively. As we have seen, if one becomes one of the chosen few who will get a cabinet job, with the salary and the pension, one also has the opportunity to serve on a national health service trust, with another £19,000 a year—that has happened frequently in the north-east. It is significant that the names of the leading figures in local government in the north-east of England crop up time and again—I am sure that that also happens in other parts of the country.

If one goes through the magic circle into the inner core of the Labour party in local government, one will pick up a salary of £30,000 a year, expenses, trips and, if one is lucky, a place on an NHS trust or on another quango. [Interruption.] Hon. Members think that that is funny, but The Journal also looked into how often leading councillors in local authorities in the north-east went on trips in this country and abroad. It discovered that some councillors incurred costs of £15,000 a year simply going on trips.

Mr. Dennis Skinner (Bolsover)

I am intrigued by these Tories who are worried about money. I heard the other day that the Short money that they receive has increased by 270 per cent. I have never heard them complain about that. They have been transferring their staff from central office into the parliamentary office to use the Short money and it ought to be investigated. If a local authority did that, it would be surcharged.

Mr. Deputy Speaker

Order. Although that may have been an interesting intervention, it had nothing to do with the amendment.

Mr. Atkinson

Thank you, Mr. Deputy Speaker. I would have liked to respond, but I accept your ruling. There is no connection. The Bill is about local government, local councillors and this insane cabinet and executive system that the Government are proposing to force on them willy-nilly. I am surprised that the hon. Member for Bolsover (Mr. Skinner) is so keen on so much government going on behind closed doors, with unaccountable councillors going on trips and not revealing how much they are spending.

This is a jolly debate, but when The Journal telephoned authorities to ask how much they spent on trips for their councillors, a large number refused to reply. It is worth mentioning the names of the councils that refused to give any details on conference attendance or expenditure. The Journal lists them as: Newcastle, County Durham, Redcar and Cleveland, Sedgefield, Hartlepool, Tynedale, Derwentside, Easington, Durham City and Darlington. We listened to lectures from Labour Members on Second Reading and in Committee about openness, yet a number of prominent councils, which spend many thousands of pounds a year on trips and visits, refused to itemise who got what and who went where.

Mr. Loughton

The gravy train.

Mr. Atkinson


The Government and Labour Members are forcing this system of cabinet government on local authorities against their will, in spite of opposition in the country and on the Labour Benches. The Government are in danger of damaging the reputation of local government in consequence. Council tax payers throughout the land have had to pay substantial increases because the Government have cut grant—people pay well over £1,000 for quite ordinary houses in some north country councils—but are seeing councillors helping themselves to vast increases in allowances and to more money than rate payers ever dreamed of. That will be hugely damaging to the reputation of councillors and of local government across the country.

I do not pretend that our amendment will change that, but I hope that we can send a message to the other place. When their lordships consider the measure, I hope that they will reconsider the matter. The reputation of local government and of many decent councillors will be besmirched by the measure.

11.30 pm
Mr. Don Foster

Throughout the deliberations of the Standing Committee, I much enjoyed the contributions of the hon. Member for Hexham (Mr. Atkinson). However, I confess that his performance this evening causes me some confusion. I read carefully the string of amendments and have some difficulty in relating his remarks to their broad thrust—even that of those tabled by his colleagues and himself.

The key issue is relatively simple and narrow. Until this evening, the Government intended, in their proposals for executives, cabinets and scrutiny committees, that only one category of councillors—members of the executive or cabinet—should be eligible for a pension, with the agreement of the particular council. The Government were not minded that such provision should be available for other groups of councillors—such as those serving on scrutiny committees.

In Committee, I argued that that was a bizarre idea. The Government maintained that the scrutiny role was vital, yet councillors who served on scrutiny committees were to be deemed second class compared with those who served on the executive. In an effort to make progress on the matter, two proposals were made this evening. The hon. Member for Hexham suggests that we can even things up by refusing to allow any councillor, in any category, the possibility of a pension. That would be one way of solving the problem.

The amendments tabled by myself and my hon. Friends to provide equality would extend the pensions option to all councillors, subject to the agreement of the council. I was delighted to see that the Secretary of State for the Environment, Transport and the Regions himself saw fit to add his signature to two of the amendments tabled by my hon. Friend the Member for Torbay (Mr. Sanders) and myself—a clear indication of his support for our suggestions.

The effect of other Government amendments would be much the same as those that we propose, although the wording is marginally different. I could chalk that up as a success, but that is not important. What matters is that the Government recognised an injustice and were prepared to do something about it. I welcome that.

I hope that, when the Under-Secretary replies, she will turn her attention to amendment No. 191—the effects of which appear to be somewhat bizarre and would mean that the National Assembly for Wales would be unable to give advice on some matters. If my interpretation is correct, that would be a retrograde step and we should have difficulty in supporting it. I look forward to an explanation of why the Government think the provision is necessary.

Ms Armstrong

The amendment has disappeared.

Mr. Foster

If that is so, I am absolutely delighted.

I am extremely pleased that the Government have accepted the principle of ensuring greater equality between councillors who are members of the executive and those who are members of scrutiny committees. It is a pity that they did not accept that earlier, but I am delighted that they have done so.

Ms Beverley Hughes

I intended to start by replying to the remarks made by the hon. Member for Hexham (Mr. Atkinson), but as the hon. Member for Bath (Mr. Foster) has already noted, nothing that he said related to the amendments, so I find myself at something of a loss. The hon. Member for Hexham spent a lot of time talking about allowances for councillors, not about the payment of pensions, which was the subject of the amendments. No one would support the award of unjustified salaries and allowances to councillors, but neither do we support the rubbishing of all councillors in which the hon. Gentleman engaged. That is equally reprehensible. The assertion that councillors do not merit a reasonable allowance for the time and work that they put in is a cheap, populist jibe that diminishes the excellent work that the vast majority of councillors do.

The hon. Member for Hexham should have talked about his amendments. I am surprised that the official Opposition continue to oppose outright the payment of pensions to members of the executive. The principle that those councillors who, because of their position in the council, devote a significant amount of time to council work deserve a pension is widely accepted in both the local government world and beyond, and indeed, by the Conservative group on the Local Government Association. It will be interesting to see what the group thinks about the amendments tabled by the Opposition.

By providing that the basic or special responsibility allowances paid to members of the executive of an authority may be pensionable, we are acknowledging that the amount of time spent by some members on council duties is significant. With executive arrangements, we expect that this may increase further, and that some councillors, particularly those in the executive, may become more or less full time. It is right that we recognise that such councillors may lose out on pension rights where they do not also have paid and pensionable employment. If we are to attract the right people and a wider range of people into local government, it is important that we make such provisions. Having said that, we need to think long and hard about which councillors should be entitled to pensionable allowances, as I shall make clear in a short while. In the sense that we must not undermine the voluntary principle of public service to which the hon. Member for Hexham alluded, I agree with him.

It may prove to be the case that some councillors' roles are so demanding that we should make provision in regulations to give them access to an occupational pension such as the local government pension scheme. If that is the case, we will need to have the powers to do so. Clause 94 provides those powers. I see that an amendment has been tabled by the Opposition Front-Bench team to remove the provisions in the Bill that deal with independent panels. That one really foxed me. The Opposition may have a view about whether councillors should receive pensions, but to be opposed to making an independent panel the mechanism for making recommendations to a council is difficult to understand.

In contrast to the amendments tabled by the official Opposition, the amendments tabled by the hon. Member for Bath have a great deal of common ground with the Government amendments. For the record, amendments Nos. 46 and 47 were first tabled by the hon. Members for Bath and for Torbay (Mr. Sanders) and now appear as Government amendments, and of course we will accept them—just in case the hon. Gentlemen were in any doubt. Amendments Nos. 49 and 51 have the same purpose as Government amendments Nos. 187 and 189, but we do not feel that they do all that is needed, and I hope that the hon. Gentleman will accept the Government amendments and not press his own. We also intend to accept amendments Nos. 48, 50 and 52 in the name of the hon. Member for Bath, so we will not move amendment No. 191. The other amendment to which the hon. Gentleman referred has not been selected.

As I made clear in Committee, we believe that it is right that everyone, including councillors, should have access to an adequate occupational or personal pension to supplement the basic state pension. All councillors will be able to benefit from stakeholder pensions, which are specifically designed to provide access to supplementary pension provision. I hope that, for most councillors, council work will not be their principal occupation, and these councillors will receive levels of allowances that are more in line with the intended target group for stakeholder pensions; but, with the advent of executive arrangements, we expect that some councillors may become more or less full-time, and it is for those that the enabling powers in the amendments are particularly designed.

I have said that I intend to accept amendments Nos. 48, 50 and 52 to ensure that the enabling powers in clause 94 are as flexible as possible, in order that we can respond as we and the councils gain experience and circumstances change, following implementation of all the elements of the modernisation agenda in the Bill. However, in accepting the amendments, I should like to make a few things absolutely clear and place them on the record.

First, I consider it unlikely that the amendments will prove necessary in the long run because I think that all principal councils will ultimately be operating executive arrangements. The only way in which a principal council could find itself in a situation where it is not operating executive arrangements is if it is operating the alternatives following a referendum defeat, and we have already made it clear that we believe that to be unlikely.

Secondly, we believe that the new councillor role was created by the executive arrangements, which may mean that some councillor roles are such that they should receive pensionable remuneration. Thirdly, I believe that I have already made it clear that pensionable remuneration may not prove to be the best option for any member's roles, but the best case is likely to be for members of the executive. I must tell the hon. Member for Bath that I find it difficult to envisage any roles in arrangements of a non-executive style that might demand pensionable remuneration.

Therefore, although I believe that we should ensure that the enabling powers in the clause are wide enough to enable us to respond to the multiplicity of potential situations and arrangements that could arise following enactment of the Bill, I do not necessarily accept that we shall need to use all of that flexibility.

In summary, I shall repeat what we are proposing in relation to the various amendments. To ensure that the powers in the clause are wide enough to allow us to be flexible, and to enable us to react flexibly to the results of the consultation that we shall engage in on pensionable remuneration, we shall accept amendments Nos. 46, 47, 48, 50 and 52. I shall move those and Government amendments Nos. 187, 188 and 189 in the appropriate place and I shall not move amendment No. 191. However, I must oppose amendments Nos. 49 and 51 because they are technically flawed and, in my view, the amendments that we have tabled will achieve the intended effect. I most certainly oppose Opposition amendments Nos. 30 to 33 and 217, and I hope that the hon. Member for Hexham will withdraw amendment No. 30 and not press the others.

Amendment negatived.

Amendments made: No. 46, in page 70, line 32, leave out "of an executive".

No. 47, in page 70, line 34, leave out— executive" and "local authority" have' and insert ""local authority" has".

No. 48, in page 71, line 13, leave out— 'which are operating executive arrangements'. No. 187, in page 71, line 15, leave out "executive" and insert "council".

No. 188, in page 71, line 17, leave out "and" and insert "or".

No. 50, in page 72, line 9, leave out— 'which are operating executive arrangements'. No. 189, in page 72, line 10, leave out "executive" and insert "council".

No. 190, in page 72, line 23, leave out from "State" to end of line 25.

No. 52, in page 72, leave out lines 26 and 27.—[Mr. Robert Ainsworth.]

Further consideration adjourned.—[Mr. Robert Ainsworth.]

Bill, as amended in the Standing Committee, to be further considered tomorrow.