HL Deb 02 March 1965 vol 263 cc1031-46

3.3 p.m.

Order of the Day for the Second Reading read.


My Lords, on behalf of my noble friend Lord Longford, I rise to move the Second Reading of the Ministerial Salaries and Members' Pensions Bill. This Bill arises out of the Report by the Lawrence Committee which was set up in 1963 to recommend what changes were desirable in the remuneration of Ministers of the Crown and also the allowances for Members of this House. I regard it as a privilege to be asked to move the Second Reading of this Bill as I was one of the Advisory Panel appointed by the then Prime Minister to assist the Lawrence Committee in its deliberations. That Panel was composed of seven Members, two from this House and five from another place. Incidentally, three of the five who were Members from the other House have now joined us here, in the persons of the noble Lords, Lord Oakshott, Lord Rhodes and Lord Wade—a high proportion of that Panel's membership. I do not know whether there is any significance in this, but it might be a tip for anyone seeking elevation to get himself appointed to a similar panel in the future.

It is not for me to praise the work of the Panel, for as to one-seventh of the praise I might be charged with praising myself, but I have No 1nhibitions about mentioning the excellent work of the Panel's Chairman, the noble Lord, Lord Tweedsmuir, who prepared memoranda and generally devoted himself unstintingly to the task he had undertaken. I am sure that 'this House is, as the Panel was, grateful to him. It would, of course, be quite wrong for me to divulge what took place between the Panel and the Lawrence Committee, for it was agreed at the outset that our exchanges should be of a confidential nature, but I think I can say that the Committee carefully considered our every suggestion and were at pains to consult the Panel on every aspect wherein our experience as Parliamentarians might prove helpful. Should the occasion ever arise for another such independent examination to take place, I can only hope that it will be conducted by people of the calibre of Sir Geoffrey Lawrence, Mr. Kirkaldy and Professor Mackenzie.

Your Lordships will recall that the Committee's recommendations affecting the salaries and allowances of Members of both Houses, as distinct from Ministers, were accepted by the Government without modification and have been implemented by a Resolution which was considered by this House on December 16 and was moved and passed in another place on December 18. As my noble friend the Leader of the House informed your Lordships on November 17, the Government did not consider that it would be appropriate in present economic circumstances to raise ministerial salaries to the level recommended by the Committee. They decided that only half the amount of the increases proposed by the Committee should be applied throughout the range of ministerial appointments. The Bill gives effect to this decision. All the salary changes for which provision is made will take effect from April 1, 1965.

The case for substantial increases in ministerial salaries is set out in considerable detail in the Report of the Lawrence Committee. All I need do now is to emphasise that senior ministers have been paid a salary of £5,000 a year for more than 130 years. I understand that the salary of a senior Minister, fixed at £5,000 in 1831, would to-day need a figure of over £31,000 to give the same value, to say nothing of the increased work demanded of Ministers since that time. Reading the Greville Memoirs recently, I came across this passage, which relates to Palmerston handing over the Foreign Secretaryship to Granville in 1851: Yesterday Granville was with Palmerston for three hours. Palmerston received him with the greatest cordiality and good humour. 'Ah, how are you Granville? Well, you have got an interesting office, but you will find it very laborious; seven or eight hours work every day will be necessary for the current business, besides the extraordinary and Parliamentary, and with less than that you will fall into arrears'. I imagine, my Lords, that any Foreign Secretary or senior Minister of to-day would be delighted to get away with seven or eight hours' work every day. Be that as it may, I do not think that any noble Lord will have cause to doubt the merits of the case for increasing ministerial salaries which has been made by the Committee, and accepted by the Government.

The main ministerial salaries structure was laid down by the Ministers of the Crown Act, 1937. This Act dealt comprehensively with the various categories of ministerial offices in the Government as it was then constituted. With the exception of the Office of the Prime Minister, the main Ministerial Offices were grouped into salary bands. This pattern of broad banding ministerial salaries prescribed by the 1937 Act is substantially preserved by the provisions which are made in Part I of the Bill. A salary of £8,500 is provided for senior Ministers, who are in general in charge of major Departments and who in any case have wide-ranging responsibilities. Below this level the differentials in salaries do no more than reflect the variations in ministerial responsibility following the pattern established by the 1937 Act. It is intended that Ministers of State in general will receive a new salary of £5,625, and Parliamentary Secretaries will receive £3,750.

There is, however, provision for Ministers of State who have heavier responsibilities to be given salaries which reflect this situation. The Ministers of the Crown Act, 1964, introduced for the first time an upper limit of £5,000 to the salaries of Ministers of State. Before the passing of that Act there was no statutory limit at all, and, in theory, the Prime Minister could have awarded any salary to a Minister of State. In practice, the highest salaries determined were equivalent to those of a senior Minister, at £5,000. This Bill does no more than to extend the upper limit of £5,000 to £8,500 and therefore allows for certain Ministers of State to be paid salaries in excess of the usual salary of £5,625, but not in excess of the new upper limit of £8,500. The actual salaries to be paid under these arrangements will be in line with the precedents established by the previous Government. Provision is also made on similar lines for the determination of the salary appropriate to the Chief Secretary to the Treasury. The Chief Secretary's salary is at the moment individually determined under the Ministers of the Crown Act, 1964, in terms which provide for treatment identical with that applying to Ministers of State. The Bill now before your Lordships continues this principle.

The Bill introduces a revised procedure for determining the salaries of the Lord President of the Council, the Lord Privy Seal, the Chancellor of the Duchy of Lancaster and the Paymaster General. In future, instead of receiving a rate of salary at a fixed level lower than that of a senior Minister, they will be treated as Ministers of State and given a salary which reflects the actual responsibilities they may have assumed. When they are members of the Cabinet they will, of course, receive the salary of a senior Minister.

The Bill provides a statutory authority for the first time for the revised salaries of the Law Officers. Hitherto the Law Officers' remuneration has been prescribed by Treasury Minutes, but the Government think it appropriate to include them in future measures dealing with ministerial salaries generally. The proposed new salaries for the Law Officers—which are £13,000 for the Attorney General, £9,000 for the Solicitor General, £8,000 for the Lord Advocate and £6,625 for the Solicitor General for Scotland—again reflect the principle of applying one half of the increase in salary recommended by the Lawrence Committee, and also the need to determine salaries which take account of the problems of recruitment as well as the question of status.

Part I of the Bill also provides for the payment of an increased salary to the Leader of the Opposition in another place. But your Lordships may well be more interested to see that, for the first time, provision is made for payment of a salary to the Leader of the Opposition in your Lordships' House. In addition, provision is made, again for the first time, for payment of salaries to the Opposition Chief Whips in both Houses. Whilst the Lawrence Committee expressed no view on the question of the remuneration of these three posts, they referred in their Report to the case which had been made for remunerating them in the evidence which had been given before the Committee. The supporting arguments rested on the contention that the Opposition Chief Whips fulfilled an onerous duty giving services which were a necessary part of the machinery of the Business of both Houses. Without the competent performance of the duties placed upon them, the work of both Houses would suffer in quality and in expedition. The Government have accepted these arguments as justifying a salary of £3,750 for the Opposition Chief Whip in another place, and a salary of £1,500 for the Opposition Chief Whip who has similar, but less onerous, duties in your Lordships' House.

Similar arguments can be advanced for the payment of salary to the Leader of the Opposition in your Lordships' House. In addition there is, of course, the precedent set by the salary which has been paid for many years to the Leader of the Opposition in the Commons. Part I of the Bill accordingly provides for an annual salary of £2,000 for the Leader of the Opposition in this House. All these salaries will be paid from the Consolidated Fund. I understand that the reason for paying them from this Fund is that this would protect them from any attempts to reduce their salaries in order to censure their conduct. I am sure the Opposition Chief Whip would never embark on anything which would cause anybody to wish to censure him. But even if he were to do so we could not use a Motion to reduce his salary as a means of censuring him. I am sure he will be delighted to hear that.

Part II of the Bill is concerned with the establishment of a pension scheme for Members of the House of Commons. Before outlining the provisions of the scheme, I should like to make two general points. The pension scheme was recommended in the Lawrence Report, and, as the Report itself makes clear, forms an integral part of a set of proposals which stand or fall as a whole. The Government's policy has been to accept in full the recommendations, both on pay and pensions, in the Report as they apply to Members generally. There has of course been an adjustment in the matter of ministerial salaries, where only half the recommended increases have been accepted. But so far as concerns Members of another place generally, the Committee was set up to relieve those Members of the embarrassment of deciding their own remuneration, and its recommendations are to be regarded as in some sense analogous to an arbitration award.

Secondly, in making provision for a pension scheme for Members in another place, Parliament will not be putting itself in a specially favourable position. Not only are pension schemes general thoroughout the public services, but they are also to be found in most other walks of life. What is being done here is to put Members of Parliament broadly in the same position as those who are able to follow other carreers and have not had to give them up or interrupt them in order to render Parliamentary service. The scheme itself is contributory, involving total contributions of £300 a year in respect of each Member—half to be paid by the Member himself out of his Parliamentary salary, and half by the Exchequer. The contributions will be invested and accumulated in a fund under the control of Trustees out of which the benefits will be paid as they fall due. The main benefit is, of course, the Members own pension. This will be payable when the Member has both attained the age of 65 and ceased to be a Member of the House of Commons, in whichever order these two events take place.

The amount of the pension has been largely determined by consideration of the average length of service, which has been found to be in practice about fifteen years. Accordingly the scheme provides that the amount of annual pension should be £60 for each year of reckonable service not exceeding fifteen years, which will produce a pension of £900 a year on attainment of pensionable age with fifteen years of reckonable service to the Member's credit. For years of service after fifteen, pension continues to accrue but at a lower rate of £24 a year for reckonable service. Membership in another place is inevitably interrupted at intervals of five years or less, and may be interrupted for longer periods. The pension scheme takes account of this, by providing that all periods of service may be aggregated and that, provided the contributions are left in the fund, pension may be paid at age 65 however many years may have elapsed since the Member last ceased to serve as such. Moreover, in order to provide the greatest possible measure of flexibility, a Member who leaves the House of Commons and does not expect to return may have the value of his pension benefits transferred to another approved superannuation fund, whether in the private or public sector; and if this is not possible he may, after a suitable period, draw out his own contributions in cash.

Besides these flexible benefits for Members themselves, the scheme makes provision for widows and children and for the rare case of the incapacitated dependant widower of a woman Member. The widow's pension is calculated as one half of what her husband's pension was, or would have been, and appropriate additions are made for the children, with special provision for the case of doubly-orphaned children. The scheme is, therefore, a comprehensive and well-balanced one. The Government have commended it to Parliament because it has an important part to play in the integrated framework of the Lawrence Committee's recommendations in ensuring that those who are best able to serve Parliament and the nation in another place are free to do so.

Part III of the Bill provides for changes in the pension payable to a Prime Minister whose ceases to hold office after April 1, 1965. Again, the proposal for an annual pension of £4,000 reflects the principle of applying only one half of the increases recommended by the Lawrence Committee. The widow of such a Prime Minister will receive a pension of £1,333. Provision is also made for the pensions of existing ex-Prime Ministers to be increased under the Pensions (Increase) Acts.

I trust that your Lordships will regard this Bill as implementing faithfully, in so far as the economic circumstances permit, the Report of an independent Committee of high standing. We have sought to introduce as few changes as possible in the detailed recommendations of this Committee, in order to preserve, so far as possible, a situation in which Ministers of the Crown and Members of both Houses do not themselves take undesirable initiatives in the matter of their own remuneration. My Lords, I beg to move.

Moved, That the Bill be now read 2a.—(Lord Champion.)

3.23 p.m.


My Lords, I rise to express in very few words my gratitude to the other members of the Panel, and the gratitude of the Panel to Sir Geoffrey Lawrence and his colleagues, for the great care and consideration with which they listened to the advice which we had to tender. Although, like the noble Lord who preceded me, I shall not, of course, divulge anything that was said between us at the time, there were certain points which arose in inquiring into this subject, which I think may be of interest to the House as a whole.

I do not think anybody could have been in two minds about the need for radical change in this matter—because it is not a very popular subject with Governments, and is discussed only very rarely—and a change that was sufficiently radical to ensure that the benefits of the change might last for some long time to come. Adjustments in the pay of Members of Parliament, for instance, have been made only six times in the last 54 years, and, although the pay of Members of Parliament and the allowances to Members of your Lordships' House are dealt with by a separate Instrument, I intend with your Lordships' permission, just to mention them in passing.

The noble Lord, Lord Champion, mentioned that Ministers' salaries had not been raised since 1831. They were not raised to the 1831 level; the Committee which sat in 1831 reduced them to that level. There was a very strong feeling in those days that far too many people had their hand in the public purse. This Committee met and debated for a very long time. Everybody, with the exception of the Postmaster General, received a savage cut; the Ranger for the Parks lost his job, and the Master of the Mint lost his shortly afterwards. But, lest your Lordships should think that this is an all-time record for wage restraint, let me assure you that it is not, because the remuneration for the office of the noble Duke, the Earl Marshal, was fixed at £20 a year in the year 1483.

My Lords, when we studied this subject it became perfectly plain that there was no other profession or calling in the world which could compare with that of a Parliamentarian. We dealt with history, we informed ourselves and we investigated the doings of other countries which have adopted the Westminster model of Parliament. We found a lot that was interesting and relevant, and extremely valuable, in the Parliament of Australia, for instance. It is not quite true to say that in the old days before 1911 Members of another House were never paid. In the very old days some Members of Parliament were paid by the boroughs they represented. They also had a very valuable perquisite in the free franking of letters in the days when it cost a great deal of money to send a letter, all of which was swept away in 1840 by the coming of the Penny Post.

In going into the question of the need for a rise in the salaries of Members of Parliament, there was not just the diminishing purchasing power of money to take into account; nor the fact that Members of another place do more work-now than in the old days. There was the fact of the change in the nature of the work. The problem really falls under three headings, and the noble Lord, Lord Champion, touched on all three. The first is the machinery of Parliament; the second is the Ministry, and the third is the membership. The machinery of Parliament must be adequate to the nation's needs, and I was absolutely delighted when, although it was omitted from the recommendations of the Lawrence Committee, the Government proposed to pay the Leader of the Opposition in this House and the Opposition Chief Whips in both Houses, because they are an integral part of the machine, and unless they can do their job properly the machine cannot function.

On the matter of Ministers, the people for whom I think we were all most sorry, who have languished in extreme penury for a very long time, were the Junior Ministers. The 1831 Committee saw Junior Ministers as people on the threshold of abundant promotion and people for whom one need not be particularly sorry. Their Report cast a very long shadow ahead of it. They reported as follows: The Appointments of the Parliamentary Under-Secretaries-of-State frequently lead to Advancement in the higher Offices of the Government, whilst to the permanent Under Secretaries those Appointments are, generally speaking, the Commencement of a laborious Course of Profession of great Trust and of close Application. When Dr. Beeching was invited to the Ministry of Transport to assist them he received what the public thought was a really large emolument. It has always been understood that in the private sector of the doings of the country one has to pay for brains. In the public sector one's reward comes in two ways; partly in pounds, shillings and pence, and partly in the pride of patriotic public duty. But when Dr. Beeching was hired and his salary far eclipsed those of the Minister and his Under-Secretaries and the Permanent Under-Secretary, from whom he was going to receive his instructions, all added together, I think the country as a whole thought that there was some disequilibrium. But the disequilibrium did not lie in the size of Dr. Beeching's salary.

Last of all, there are the Members of both Houses. It is a question of steering a course, because it would be perfectly possible to make the emoluments too high so that undesirable people would enter Parliament purely for money. But what every one of us would wish to see, not only in Parliament but in this country, is that emoluments are high enough to give those who aspire to Parliament that independence, in the fullest sense, without which they cannot possibly do their duty.

Finally, my Lords, in your Lordships' House there is what we might call an inner machine. There are those who attend the House very regularly and carry out the business of the House; and that goes further than merely the Members who are entitled to sit on both Front Benches. There are those who are here for the great majority of the Sitting Days of the year. Then there are those who occasionally bring their experience and their expert knowledge—experience which they could not have, and expert knowledge which they could not keep up, if they spent their whole time in this House. For the latter group, an allowance such as we have is absolutely appropriate. For the former group, I do not believe we shall get anything which represents a really fair deal.

I personally, expressing an absolutely individual view, should like to see those who attend daily, or more than a certain number of Sittings in a year, have their daily rate of allowances escalate so that they would get on to what would amount to a very considerable improvement on the present rate. I say this because if one lives outside London and has to acquire a place to live in inside London one will eventually be committed to some form of accommodation, such as a flat, for which one must pay whether or not it is being used, and that takes one into a totally different bracket of expenditure. Lastly, my Lords, I give a warm welcome to this Bill, because I think it will help to enhance the dignity and efficiency of Parliament. I wish it well.


My Lords, I want very briefly to make only one point in which I have been interested for a number of years. It comes in particular under Clause 2, in Part I of this present Bill. It seems to me somewhat illogical, and I hope it will not go too far in the course of time. After a dissolution of Parliament the country is asked to decide which of one, two or more Parties it wishes to take over the government of the country. Then, having turned down, for example, at the last General Election, the Party to which I happen to belong, it then has to pay out of the taxation levied in the country a salary to the people to whom it has refused office. I am referring, of course, to the Leader of the Opposition and the Chief Whip; and having been a Chief Whip myself, I am not saying this because I dislike Chief Whips.

3.33 p.m.


My Lords, I entirely support this Bill although I think it does not really go far enough. When the salaries of Cabinet Ministers were reduced, as my noble friend said, in 1831 to £5,000 a year, money was worth six times as much as it is now. If salaries were now to be of an equivalent value we should have to pay Cabinet Ministers a little more than £30,000 a year. In the 19th century most Cabinet Ministers in all Parties probably had some considerable private means of their own. Some had very large private means, and at that time they were very lightly taxed. Perhaps many of them in the 19th century could have managed to get on without any ministerial salary at all.

Now, in 1965, most Cabinet Ministers do not have very large private means, and, if they do, then those means are taxed up to 90 per cent. Therefore it is surely much more in the public interest now than it was 100 years ago that Cabinet Ministers should be remunerated upon a scale which is comparable to those in other occupations of comparable importance. I do not think they will be remunerated on that scale, even under this Bill, and I must say I do not think that the almost masochistic inhibition of Parliament for so many generations against paying politicians properly reflects any real credit either on Parliament or on Ministers.

In 1951 I happened not to be a Member of either House, so perhaps I am speaking out of turn, but it has always seemed to me that when the Conservative Government came into office in October, 1951, their action in voluntarily cutting down salaries by 20 per cent. did no good at all. I do not think anybody outside Parliament regarded it as an act of patriotic self-sacrifice. I think most people regarded it, probably unfairly, as an act of misguided and inequitable exhibitionism which had no real relevance to the economic needs of the country.

We can only guess—we cannot know—how much political talent is diverted by the financial sacrifices of political life into other occupations, and of course we cannot know either to what extent those other occupations may be more or less valuable to the country than the political service which has been lost; but on balance it cannot be in the interests of this country that Cabinet Ministers should be as much underpaid as they have been.

I regret, my Lords, that the Government have not accepted the recommendations of the Lawrence Committee. They have accepted only half the recommended increase. I know that when one takes taxation into account the difference between £12,000 and £8,500 may not be a great deal; but then, if it is not a great deal, it will not cost the Treasury a great deal, and if the Minister in question happens to be someone who has no other income and has large family responsibilities, so that he gets the benefit of both the dependants' allowances and of the new scales of surtax on earned income, then the difference between £8,500 and £12,000 might be very considerable.

In any case, I think it is utterly wrong in principle that a Cabinet Minister in charge of a Government Department should receive a salary which is not substantially higher than the salary of his principal civil servants. I believe that will still be the case under this Bill. Therefore I am sorry that the full recommendation of the Lawrence Committee has not been accepted.

My Lords, the Bill also dealt with proposals for pensions to Members of another place. That is mainly a question for Members of another place. As I have been a Member of both Houses, perhaps I may be allowed to say that all the considerations I have mentioned about Cabinet Ministers apply equally, and perhaps more strongly, to Back Bench Members of the House of Commons. In view of the financial sacrifices which are often involved by long service in another place, I think it is a remarkable thing that the standards of ability and integrity in that House have remained as high as they have.

We are also for the first time giving some remuneration to the Leader of the Opposition and Chief Whip in your Lordships' House. My Lords, the principle of giving a salary to the Leader of the Opposition was accepted in the other place in the 1930s, and I am sure all your Lordships who attend this House regularly must have felt, during the last two Parliaments, when they saw the assiduous diligence with which the late Lord Alexander of Hillsborough attended this House, that it was very unfair that this should apply only in another place.

My Lords, the only other thing I have to say is that I regret that the Lord Chancellor is left out of this Bill. I see from the Report of the Second Reading debate on the Bill in another place that the Minister in charge explained that Any increase in the salary of the Lord Chancellor will be dealt with in the time-honoured way through a future Judicial Salaries Bill". [OFFICIAL REPORT, Commons, Vol. 704 (No. 37), col. 734, December 18, 1964.] My Lords, that may be in accordance with constitutional propriety, but the office of Lord Chancellor is certainly far more ancient, and in some ways not less onerous, than the office of Prime Minister, and the burdens which that office has to bear are certainly as great as the burdens of any other office except that of the Prime Minister. If it is really essential that the question of the salary and the pension of the Lord Chancellor—there is no provision about his pension, either—should be tied up with a Judicial Salaries Bill (as I dare say it may have to be), then I would ask the Government to see that this Judicial Salaries Bill is introduced in the present Session at an early date, in order that the Lord Chancellor may not continue to lag behind his colleagues in this respect.

3.42 p.m.


My Lords, I am sure that the Government, at any rate, must be delighted with the reception this Bill has received. I would thank the noble Lord, Lord Tweedsmuir, for his welcome of the Bill, and for the interesting facts which he presented to the House. I had, fortunately, read them in a memorandum which he prepared for the Committee some time ago, and therefore was aware of them, and I recognise the force and the truth of them. On the point of an allowance for regular attenders at this House—the people who actually keep it going for others who come into it at odd moments—this, of course, was a matter which was discussed to some extent when we had the Resolution before us; and of course the allowance does not figure at all in this Bill. I should think that any measure of that sort would have to follow a considerable reform of this House as a whole, and therein, I think, lies some of the difficulty. It would need a partially salaried House, which would alter the constitution, the membership and the general set-up of this place. But I agree with the noble Lord in what he said. As an old regular attender at this House—one of the people who just did keep it going in the last Parliament—I have tremendous sympathy for those who are in a like situation.

The noble Viscount, Lord Stuart of Findhorn, was to some extent answered by his noble friend Lord Dundee. I am bound to say that it seems to me, too, to be a little illogical that a Party is defeated and then gets some salaried Members. But this was decided by the 1937 Ministers of the Crown Act, it has been generally accepted since, and I personally should not like to see it altered.

The noble Earl, Lord Dundee, generally welcomed the Bill and reminded us that not only has the work increased, and not only has the value of money fallen since 1831, but the incidence of tax has become very much higher. Indeed, in 1831 income tax stood at nought in the pound. I believe this was the case between 1814 and 1851, when it then came back in again at, I believe, 6d. in the pound.


It was 1841.


I am grateful to the noble Earl. It was 1841 when it was reimposed at, I believe, 6d. in the pound.




My Lords, I could just about manage 7d. The noble Earl regretted that the Government did not feel courageous enough to accept in full the Lawrence Committee's recommendations so far as they applied to Ministers. So do I, in my individual capacity. In my corporate capacity, as a member of the Government, however, I must defend the decision of the Gov ernment that this was arrived at in the light of the general economic circumstances prevailing. But, as the last Prime Minister said, the time is never right, and these things have to be faced courageously. Strangely enough, as regards the salaries of Members of the other place, what was the subject of Press comment and so on for a fortnight has now been pretty well forgotten. I am sure the decision to raise salaries was the right one to take.

So far as the Lord Chancellor is concerned, it is, of course, the Government's intention to accept the recommendation of the Lawrence Committee, but the same principle of accepting half the increase will apply also to the Lord Chancellor, who I understand is likely to get, as a result of the Bill dealing with the salaries of the higher Judiciary which will be introduced in the not too distant future—


This Session?


I cannot promise that. I rather hope that will be the case, but I cannot go beyond that. He will receive a salary of £14,500 and a pension of £6,250. My Lords, I hope I have answered all the questions that have been asked, and that your Lordships will now be prepared to give this Bill a Second Reading.

On Question, Bill read 2a, and committed to a Committee of the Whole House.