HC Deb 14 July 1983 vol 45 cc410-3W
Mr. Colin Shepherd

asked the Lord Privy Seal if he will make a statement about report No. 20 from the Top Salaries Review Body.

Mr. Biffen

Yes. The Government have now considered report No. 20 from the Top Salaries Review Body — Cmnd. 8881 — on parliamentary pay and allowances. Their conclusions are as follows:

Members' and Ministers' Pay 2. The Review Body recommended that Members' pay should be fixed at £19,000 per annum, an increase of about 31 per cent., and that the pay of Ministers and other office holders should be increased by amounts averaging 34.8 per cent. and varying for different offices between 18 and 71 per cent. 3. The Government considers that these recommendations are too high. They propose that from 13 June 1983 the salary of a backbench MP should be fixed at £15,090, an increase of 4 per cent. on the previous salary. This figure be reviewed in a year's time, in accordance with the Government's reply to the Select Committee on Members' Salaries which reported in February 1982. 4. For Ministers and other office holders the Government also propose that existing salaries should be increased by an overall average of 4 per cent. with effect from the date of approval of the necessary Order. Below is a list of existing salaries, the salaries proposed by the Review Body, and the salaries which are now proposed to be paid.

Pensions and Allowances 5. On pensions and allowances the Government broadly accepts the Review Body's recommendations as set out below.

Pension and Severance Pay 6. The Government proposes the following in line with recommendations (v)-(xii) of the Review Body's report:—

  1. (a) The pension accrual rate for MPs should be set at 1/50th of pensionable salary as at present defined for each year of pensionable service.
  2. (b) MPs should be able to take an immediate pension on leaving the House at age 50 and over but before normal retirement age, subject to full actuarial reduction; but MPs retiring at a dissolution who have reached age 62 and have completed 25 years' service should continue to be able to take full accrued pension.
  3. (c) The qualifying period under the Parliamentary Pension Scheme should be abolished. MPs who complete less than the present qualifying period of service should be able to opt, as at present, for a refund of contribution or payment of a transfer value.
  4. (d) MPs should be able to commute pension up to the maximum level permitted under the Inland Revenue rules, on the basis of commutation factors advised by the Government Actuary.
  5. (e) Subject to implementation of the recommendations made for improvements to the Parliamentary Pension Scheme, the pension contribution should be increased to 8 per cent.
  6. (f) The changes recommended in the Parliamentary Pension Scheme should apply also to the supplementary scheme for Ministers and other paid office holders; and, subject to their implementation, the pension contribution for those participating in the supplementary scheme should be increased to 8 per cent.
  7. (g) In future, a resettlement grant should be available to all MPs who leave the House at a General Election, with the exception of those who have reached normal retirement age (65). The Government proposes that the resettlement grant should be made available to all Members who left the House at the last General Election.
  8. (h) The level of resettlement grant should be determined in accordance with the existing scale of payment. No period of service should be allowed to count on more than one occasion for the calculation of a resettlement grant.

Secretarial, Research and Office expenses and other allowances and facilities for Members of Parliament 7. The Government proposes the following in line with Recommendations (xiv-xxiii) of the Review Body's report:—

  1. (a) The appropriate maximum for the allowance available to MPs for Secretarial and Research assistance should be £13,000 per annum. Eligibility for the allowance should be subject to the condition that all payments to MPs' staff against the allowance should be made by the Fees Office on behalf of the MP direct to the staff concerned or to any organisation providing secretarial assistance to the Member. Claims against the allowance should be confined strictly to expenditure on salary or fees and any employers' National Insurance Contributions.
  2. (b) A separate allowance should be introduced to meet general office expenses including necessary capital expenditure on equipment. The appropriate maximum 412 for the allowance is £1,000 per annum. Reimbursement of the costs of purchasing equipment should be subject to production of evidence of expenditure.
  3. (c) There should be provision for free travel for MPs' staff between Westminster and the constituency on Parliamentary business. Up to nine return journeys a year should be allowed for staff in respect of each MP.
  4. (d) The Fees Office should act as point of advice to MPs and their staff on questions of employment.
  5. (e) MPs' staff who are paid through the Fees Office should he able in their own right to claim the contribution from public funds that is available for pension purposes. This should be paid direct to the appropriate life office by the Fees Office. The detailed arrangements should be settled by the House authorities (f) In the event of an MP's employee who is paid through the Fees Office from the Secretarial and Research allowance qualifying for a redundancy payment under he Employment Protection (Consolidation) Act, the payment should be made direct to the employee by the Fees Office from public funds (g) There should be discretion to reimburse additional costs necessarily incurred by disabled MPs in attending the House.
  6. (h) MPs should provide a more detailed account of expenses claimed against the additional costs allowance and where appropriate other allowances, in a form suitable to the House authorities.
  7. (i) The limit of 15 free journeys for travel by MPs' wives or husbands should remain. In addition, there should be provision for 15 free journeys for each dependent child under the age of 18.
  8. (j) In calculating the MPs' additonal costs allowance, account should be taken of any change in the number of weeks in which the House sits in a year.

Peers' Expenses 8. The Government proposes the following in line with Recommendations (xxv)-(xxxi) of the Review Body's Report:—

  1. (a) The Leave of Absence and Lords' Expenses Committee should have discretion to authorise reimbursement of additional costs necessarily incurred by disabled Peers in attending the House.
  2. (b) Peers should be reimbursed on the same basis as MPs for travel within the United Kingdom on Parliamentary business other than that covered by the present provisions for travel by Peers.
  3. (c) The following levels are appropriate for the Peers' expenses allowances:
    1. i. Overnight subsistence—£40.00.
    2. ii. Day subsistence and incidental travel—£16£00.
    3. iii. Secretarial, postage and certain additional expenses —£17.00.
  4. (d) All Ministers and paid office holders in the House of Lords who cease to hold office, for whatever reason, after serving for not less than two years and before they have reached normal retirement age (65) should be eligible to receive a payment equivalent to three months' salary.
  5. (e) The wives, husbands and children of Ministers and other paid office holders in the House of Lords who have their main home outside London should be able to travel between that home and Westminster at public expense, to the same extent and on the same basis as the wives, husbands and children of Members of Parliament.
  6. (f) The appropriate level of the Secretarial allowance for Ministers and other paid office holders in the House of Lords is £2,000.
  7. (g) The title "Peers' Expenses Allowance" should be replaced by "Peers' Reimbursement Allowance".

Costs 9. The cost of implementing these proposals is estimated at about £5 million in 1983–84 and £6–£6.5 million in a lull year. These costs will be contained within the provision for total public expenditure in the latest Public Expenditure White Paper (Cmd. 8789). In the case of Members' of Parliament pay and allowances, and Peers' allowances, supplementary provision will be needed for both the House of Commons and the House of Lords Votes, neither of which is cash limited. This will be charged to the Contingency Reserve.

Parliamentary approval 10. The proposals on pay, pensions and allowances are subject to Parliamentary approval. The Government are making early arrangements for the necessary debates. Certain of the recommendations that have been accepted, concerning pensions

Ministers and office holders
Proposed Salaries*
TSRB Recommendations
Office Number of Office Holders Current Salary† Salary‡ Percentage Increase Proposed salary║
Prime Minister 1 46,660 65,000 39.3 48,520
Lord Chancellor 1 52,500 62,000 18.1 54,600
Mr. Speaker 1 38,785 55,000 41.8 40,330
Cabinet Minister (Commons) 17 37,410 55,000 47.0 38,900
Cabinet Minister (Lords) 2 28,950 49,500 71.0 30,100
Minister of State (Commons) 22 29,035 38,000 30.9 30,190
Minister of State (Lords) 6 24,200 32,500 34.3 25,170
Parliamentary Secretary (Commons) 25 24,160 31,000 28.3 25,130
Parliamentary Secretary (Lords) 4 19,350 25,500 31.8 20,130
Attorney General 1 39,160 55,000 40.4 40,720
Solicitor General 1 33,810 44,000 30.1 35,160
Lord Advocate (Lords) 1 29,000 38,500 32.8 30,160
Solicitor General for Scotland 1 30,210 38,500 25.8 31,410
House of Commons
Leader of the Opposition 1 35,035 50,000 42.7 36,430
Chief Whip 1 32,610 42,000 28.8 33,910
Deputy Chief Whip 1 29,035 38,000 30.9 30,190
Opposition Chief Whip 1 29,035 38,000 30.9 30,190
Government Whip 12 21,735 28,000 28.8 22,610
Assistant Opposition Whip 2 21,735 28,000 28.8 22,610
Chairman, Ways and Means 1 29,035 38,000 30.9 30,190
Deputy Chairman, Ways and Means 1 26,585 34,500 29.8 27,640
House of Lords
Chief Whip 1 24,200 32,500 34.3 25,170
Deputy Chief Whip 1 19,350 25,500 31.8 20,130
Government Whip 5 16,925 22,500 32.9 17,610
Leader of the Opposition in the House of Lords 1 19,350 25,500 31.8 20,130
Opposition Chief Whip 1 16,925 22,500 32.9 17,610
Chairman of Committees 1 24,200 32,500 34.3 25,170
Principal Deputy Chairman of Committees 1 21,750 29,000 33.3 22,620
TOTAL SALARY BILL 3,125,390 4,212,500 ¶34.8 •3,250,340
*These are the salaries to which office holders are entitled; certain individuals draw less.
†Includes Parliamentary salary of £8,460 where appropriate.
‡Includes Parliamentary salary of £11,000 where appropriate.
║Current salary increased by 4 per cent, (rounded) and including Parliamentary salary of £8,800 where appropriate.
¶ Weighted by number of office holders.
• Represents 4 per cent. increase in total salary bill.