HL Deb 24 June 1993 vol 547 cc14-5WA
Lord Kennet

asked Her Majesty's Government:

How remuneration for appointed members of quangos is calculated; by whom, and taking what (for example, existing public service or other pensions) into account; and how many (a) chairmen and (b) members give their services free and what are the implications of the difference.

The Earl of Caithness

Provision for the remuneration of chairmen and members of non-departmental public bodies is generally set out in the founding legislation of those bodies. Remuneration is determined by Ministers with the consent of the Treasury At 1st April 1992, 1,356 chairmen and 19,485 members, some 59 per cent. overall, of advisory boards, executive bodies and tribunals received no salaried remuneration. Full details are published inPublic Bodies 1992 which is available in the Library.

Lord Kennet

asked Her Majesty's Government:

How financial "compensation" is calculated when ministerial appointees to publicly-funded jobs resign or are required to resign because their standard of efficiency or of rectitude is deemed insufficient; for what they are being -compensated" if resignation or de facto dismissal is appropriate; whether the large sums apparently passed in "compensation" on these occasions are compatible with public disapproval; whether they have discerned any waste of taxpayers' money, as referred to by the Chief Secretary to the Treasury (H.C. Deb. 8th February 1993, col. 683), in any taxpayer-funded "compensation" awards; and whether the social chapter in the Maastricht text covers these issues of workers' rights.

The Earl of Caithness

In exercising his or her statutory power to award compensation, a Minister will have regard to all the circumstances.

Compensation is normally calculated taking into account loss of remuneration for the unexpired period of appointment reduced by the amount the appointee might reasonably be expected to earn in other suitable employment. There are other adjustments for tax and national insurance, and the net amount is discounted for immediate payments. This follows the approach which a court of law would apply in assessing damages for a breach of contract. But there may be other adjustments to take into account the circumstances of the departure of the appointee, and the Minister may exercise his discretion not to pay any compensation. The Government would not approve compensation payments which they regarded as a waste of taxpayers' money.

The social chapter does not apply to the United Kingdom.

Lord Kennet

asked Her Majesty's Government:

What are the rules governing the discretionary payments of taxpayers' money that Ministers may make to ministerial appointees who leave before a contract has expired because their standards of work or conduct have been unsatisfactory, what is the purpose of these payments in terms of 'value for money' for the taxpayer, whether they are subject to income tax or VAT, whether they are confidential, and if so to whom.

The Earl of Caithness

In many cases a Minister has statutory powers to pay such compensation as he or she may determine and normally the Treasury has to approve the payment. A Minister may also have powers, if satisfied that the appointee is unable or unfit to discharge the necessary duties, to remove him or her from office without payment of compensation. No compensation is payable if an appointment is terminated early by the resignation of the appointee at his or her own initiative.

Where compensation is paid, its amount is determined by the Minister on the merits of the particular case. Regard would also normally be taken of the terms of the appointment and of the amount which the courts might award if they were considering a claim from the appointee for damages for a breach of contract.

Under current legislation, payments made at the discretion of an employer to compensate for loss of office or employment are taxable only to the extent that they exceed £30,000. They are not subject to VAT.

Totals of compensation paid for loss of office are published in the annual accounts of nationalised industries and non-departmental public bodies in accordance with guidelines published by the Treasury.