§ 3.8 p.m.
§ The Lord Privy Seal (Viscount Cranborne) rose to move, That the draft order laid before the House on 22nd November be approved [1st Report from the Joint Committee].
§ The noble Viscount said: My Lords, I beg to move the Motion standing in my name on the Order Paper.
§ The draft order gives effect to the arrangements described on this corresponding occasion last year by my noble friend Lord Wakeham for the annual uprating 797 of the salaries of Ministers and other office holders. The new salaries under this order are the result of applying the procedures set out by my noble friend then.
§ With your Lordships' permission, I should like to touch briefly on recent history. Members in another place and Ministers and other office holders accepted a freeze on their salaries in 1993 following the introduction of public sector pay restraint. In doing so, they forwent their entitlement at that time under the links that, up to then, had applied with the Civil Service, and indeed, had applied since 1987.
§ When the linkage was re-established last year for the 1994 salary review, it was agreed that the basic increase would be paid in two stages: the first stage was to be of 2.7 per cent. payable from 1st January 1994; and the second stage, also of 2.7 per cent., on 1st January 1995. Last year's Ministerial and other Salaries Order gave effect to the first stage. The second stage is included in the order that is before your Lordships today.
§ In addition, it was announced last year, as part of those arrangements, that the 1995 uprating would reflect the increases in the salary received by middle ranking civil servants during 1994—by "middle ranking civil servants" I mean Grades 5 to 7. Those civil servants received a settlement worth 2 per cent. with effect from 1st August 1994. The same 2 per cent. will be paid to Ministers and other office holders in respect of their 1995 settlement with effect from 1st January 1995, if this order is approved. This is also included in the figures appended to the order.
§ So far I have spoken in terms of the basic ministerial salaries under the principles which were established last year, principles whereby Ministers and others covered by the Ministerial and other Salaries Order can normally expect to receive the same percentage increases as Members of Parliament. Your Lordships will be aware that the salaries of Members of Parliament are in turn linked to the pay settlements in the Civil Service. However, I should remind noble Lords of one other feature of the arrangements which is of particular relevance to Ministers, the Leader of the Opposition and the Opposition Chief Whip in this House. Since Ministers and office holders in this House do not receive the reduced parliamentary salaries payable to Ministers in another place, the procedure is that they should receive the same cash increase as their counterparts in the other place, taking account of their combined ministerial and reduced parliamentary salaries.
§ Finally, I should stress that the overall increases of 4.7 per cent. for most Ministers and the cash equivalent for Ministers in your Lordships' House, which is worth more in absolute percentage terms, are not out of line with other settlements or indeed with economic conditions generally. Perhaps I may suggest to your 'Lordships that it would be worth bearing in mind that more than half of the increase is a deferred payment and that that deferred payment is part of last year's settlement, not part of the new settlement. As a result of that deferment, Ministers and other office holders have lost considerable sums in comparison with the salaries that would have been paid if the link with the Civil Service salaries had been maintained throughout. These 798 amounts will not be recovered by the office holders concerned by re-establishing the link. The 1995 settlement itself is 2 per cent., in line with the pay settlement in the Civil Service, and therefore fully in accordance with the Government's approach to the public sector pay.
§ I hope that that will be a sufficient and—I hope your Lordships will agree—severely factual explanation of the circumstances that lie behind the order. I believe that the draft Ministerial and other Salaries Order provides for a realistic settlement in accordance with agreed arrangements for Ministers and for Opposition office holders in both Houses of Parliament. I commend the order to the House.
§ Moved, That the draft order laid before the House on 22nd November be approved [1st Report from the Joint Committee]. —(Viscount Cranborne.)
§ On Question, Motion agreed to.