PARLIAMENTARY AND OTHER PENSIONS AND SALARIES BILL (Hansard, 6 October 1976)

§ Lord PEART
My Lords, I beg to move that this Bill be now read a second time. The main purpose of the Bill is to give effect to the decision taken in another place on 22nd July last year that the pensions of Members of Parliament should be based on the full salary rate of £8,000 a year recommended by the Top Salaries Review Body.
In view of the serious economic situation it was decided that actual pay should only be increased to £5,750 a year but in order to avoid a permanent pension penalty for those who retired while this restriction on pay was in force it was resolved that the full recommended rate of £8,000 a year should be regarded as the proper salary rate for the job and the one to be used for pension purposes. The salary actually paid to Members of Parliament has since been increased by £312 a year which was the maximum 1385 permissible under the 1975–76 pay guidelines. The decision to use the full rate of £8,000 a year for pension purposes has required amendments to the Parliamentary and other Pensions Act 1972, since the Act only permits pension to be based on salary actually paid.
Clause 1 of this Bill amends Section 3 of the 1972 Act so that pensionable salary may be higher than the salary in payment where the House of Commons makes a Resolution prescribing a higher rate for pension purposes. The clause is retrospective to 13th June 1975 when the salary of £5,750 came into payment. Clauses 2 and 5 similarly make provision for the pensions of Ministers and other office holders to be based on a salary higher than that actually in payment.
It is the normal superannuation practice to amend the rules of a pension scheme to cover all participants at the same time, and there is no good reason for leaving the provisions for Ministers and other office holders in a different form. I must emphasise that these clauses have no practical significance at present. They do no more than equip the pension scheme to deal with such a situation should it arise in the future, and they in no way prejudge future decisions which the Government may take on the recommendations for Ministerial salaries contained in the latest report of the Top Salaries Review Body. Moreover, they can only be activated if an Order in Council specifies higher rates of pensionable salary and the terms of the order will require prior approval by way of Parliamentary Resolution.
Clause 3 adds the office of Deputy Chairman of Committees in your Lordships' House to the list of those who may opt to participate in the special arrangements for officeholders. Provision is made for retrospection to 2nd May 1974 when the first paid incumbent took up office. Clause 4 remedies some minor technical defects in the provisions of the 1972 Act. Clause 6 provides for the salaries of the Parliamentary Commissioner for Administration and the Comptroller and Auditor-General to be determined by a direct linkage with the Civil Service grade of Permanent Secretary.
This legislation was foreshadowed by my honourable friend the Minister of State to the Civil Service Department 1386 when he moved a Resolution in March last year in another place to increase these salaries in line with the increase for Permanent Secretaries implemented from 1st January 1975. The clause formalises a linkage which has long existed in the past and does no more than change the machinery for passing on the pay increases of Permanent Secretaries. There is also provision for the linkage to be changed by Resolution. The clause also provides for the full promulgated salary to be treated as the pensionable salary where payment of part of that salary is withheld in the national interest. This provision has been made retrospective to 1st January 1975 to cover the position of those who have retired since that date.
Clause 7 makes similar provisions for Health Service Commissioners. As your Lordships will be aware, there are at present no separate Health Service Commissioners, the duties being performed by the Parliamentary Commissioner for Administration; but against the possibility of separate appointments being made in the future the clause provides for an appropriate pay linkage to a Civil Service grade to be determined by Resolution. Few of the provisions contained in this Bill will directly affect your Lordships but they are essential to the wellbeing of those who serve in another place.
Before I finish, I should just add one point of detail. As your Lordships will be aware, this Bill, which came to us from the other place on 27th July, has been certified by Mr. Speaker to be a Money Bill within the meaning of the Parliament Act 1911. The Bill should have been passed by this House in accordance with Section 1 of that Act, within one month of that date, but the House rose for the Summer Recess two days later.
A similar situation has arisen at least twice before: once in 1934 when the Land Settlement (Scotland) Bill was, by an oversight, passed one month and five days after it came to this House, and again in 1972 when the National Theatre and London Museum Bill came to this House one week before the Christmas Recess. On both occasions the other place passed a Resolution under Section 1(1) of the Parliament Act directing that this provision should not apply to the Bill. It is intended, if this Bill is given 1387 a Second Reading today and is subsequently passed, to follow what was done in 1934 and 1972. I ask your Lordships to give the Bill a Second Reading.

Lord SAN DYS
My Lords, the House will be grateful to the noble Lord, Lord Peart, for introducing this Bill and explaining in detail its provisions. Very largely it affects another place, although naturally it affects certain Members of your Lordships' House.
One comment that I should like to bring to the attention of the noble Lord has been made by us in the past; namely, that for the convenience of administration and also to avoid misunderstanding outside in its interpretation—very largely its interpretation in view of the problems concerned with taxation—it would be as well if the Bill included the net figures after deduction of income tax at the standard rate alongside the gross figures of increment.

§ Lord PEART
My Lords, I have noted that point, but this was the form in which we received it. I will certainly look at the matter, but I hope that we can proceed now.

§ Lord HARMAR-NICHOLLS
My Lords, there is nothing we can do about this Bill, even if we wanted to—and I gather that we do not want to—because it is a Money Bill. The gesture which was made in not having the increase that was virtually sanctioned and advised was a gesture to face up to what is clearly a national emergency of some magnitude. It was a gesture that I think was properly made and it was a good thing to do it. In a way I am sorry that the gesture is being somewhat downgraded by preserving the increase in pensions. For what was involved in it I should have thought we could have left the legislation as it was; namely, so that the pension would be based on the full increase only when they get it, as eventually they will.
While there is nothing we can do—and even if we could I would not urge that we should—I think it is a pity that this 1388 gesture, which was at quite a high level, is mitigated by trying to give them the pension values just as though they had received the extra salary. I do not think it is in keeping with the spirit behind it. Heavens knows! I hope we shall not have national crises of a sort to make this necessary in the future, but if we are going to make a gesture, let it be a full gesture, not giving with one hand and taking three-quarters back with the other.