HL Deb 21 May 1980 vol 409 cc913-5

2.50 p.m.

Lord BESWICK

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government what new guidelines they now propose to set for the Top Salaries Review Body when considering remuneration of board members of public corporations.

The LORD PRESIDENT of the COUNCIL (Lord Soames)

My Lords, the Government do not issue guidelines in the way the noble Lord suggests. How the Review Body carries out its work is a matter for that body itself.

Lord BESWICK

My Lords, while I thank the noble Lord for that Answer, the fact of the matter is that very definite rates are laid down for the boards of public corporations. May I ask the noble Lord, without commenting at all on the merits or demerits of a recent appointment to the board of the British Steel Corporation, whether he does not find it difficult to defend one rate on the promise of performance as against an inferior rate for those board members who have proved their worth as regards both profitability and public service, and expect them to accept an inferior rate?

Lord SOAMES

My Lords, while in no way disagreeing with the noble Lord as to the services which are rendered by members of all these boards generally speaking, where the particular situation of Mr. MacGregor and British Steel is concerned it was one particular man who the Government thought was right to run this particular industry and to overcome the very considerable difficulties which we all know confront that industry, and so special arrangements were made. Perhaps it is the exception which proves the rule.

Lord AVEBURY

My Lords, does the Minister recognise that everybody thinks like Mr. MacGregor, that his own services to the community are exceptional; and that if you have an example of this kind set, then throughout the coming 12 months, if there are no guidelines or no indications from the Government as to what level of settlement is acceptable, there will be far worse inflation than we have had so far, even, and the estimate made by the Treasury last November, that the retail price index would not increase by more than 14 per cent. during the coming 12 months, should perhaps be doubled or even trebled?

Lord SOAMES

My Lords, in answer to the general point made by the noble Lord, Lord Avebury, of course we are awaiting the report, and I think it would be premature to say what the report contains. I do not know what the report will come up with in terms of increases in salaries in this particular area, so I am sure he will forgive me if I do not comment on it. As to the point to which he linked his general observation, about the tendency of everybody to think that he is as good as Mr. MacGregor, I think the market place has something to do with that as well.

Lord BALOGH

My Lords, which market place does the noble Lord talk about? This is a monopoly situation. He was in a monopoly situation, and there was no competition at all, so far as one can make out from the statements made. There was no competition whatsoever. He was picked out, and absolutely fantastic—

Several noble Lords: Speech! Speech!

Lord BALOGH

My Lords, does the noble Lord think that the principle of comparability is going to operate?

Lord SOAMES

My Lords, I am not sure that I heard every word that fell from the noble Lord's lips, but I think I heard the term "market place" from him. What I was referring to was not the market place in just these particular industries. But when it comes to picking men out from the market place to put them into these industries the market place will often give you a guideline as to what those men could command within that market place.

Lord SHINWELL

My Lords, may I ask the noble Lord the Leader of the House why it is necessary to wait for the report? Are we not being told frequently by the Prime Minister, by the Chancellor of the Exchequer, by other members of the Government and by people in high places, whose high moral principles are beyond question, that one of our problems derives from the demand by certain people in the country for high wages? Could not those people in top management with excessively high salaries— and, as I say, with high moral principles— volunteer, without waiting for the report, to accept lower salaries in order to help the Government out of their financial difficulties?

Lord SOAMES

My Lords, that, I feel, is a matter for individuals, and not a matter for the Leader of this House or the Lord President of the Council.

Lord BESWICK

My Lords, may I call the noble Lord's attention to one rule which is applied relating to the repayment of fees earned from outside directorships? That rule is being relaxed in the case of the British Steel Corporation. Would he not agree that it will be very difficult to defend the relaxation there if it is maintained in every other case?

Lord SOAMES

My Lords, I am afraid I cannot give an exact answer to that question "off-the-cuff" concerning the extent to which this limitation applies, but I think we feel that in the case of those who are executive board members of nationalised industries, as opposed to non-executive board members, it is a very full-time job, and, generally speaking, one would not expect them to be using their energies outside that particular job. However, as I say, where Mr. MacGregor is concerned this can be expressed as the exception that proves the rule. But I do not want to take it too far, if the noble Lord will excuse me, because I am not yet absolutely certain what are the guidelines.

Lord HALE

My Lords, can the noble Lord say what all this has to do with mounted police dashing into crowds?

Lord SOAMES

My Lords, if the noble Lord will content himself for a second or two, I think we shall soon be on to the mounted police.