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Members' Pay And Allowances

Volume 978: debated on Thursday 14 February 1980

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The Chancellor of the Duchy of Lancaster and Leader of the House of Commons
(Mr. Norman St. John-Stevas)

With permission, Mr. Speaker, I would like to make a statement about the pay and allowances of Members of Parliament.

The thirteenth report of the Review Body on Top Salaries is published today as Cmnd. 7825. Copies are available in the Vote Office. Hon. Members will have an early opportunity to debate the report, but I would today like to outline briefly the review body's recommendations and to tell the House the Government's reactions.

The Government are most grateful to Lord Boyle, the chairman of the review body, and his colleagues for the consideration that they have given to these issues. We accept in general the report's recommendations but would like to propose some modifications, which I shall explain.

The review body comments on the growing usage of secretarial and research assistance by hon. Members, reflecting the growth in paperwork and the need for them to inform themselves on increasingly technical or specialist subjects. Consequently, it proposes that the present secretarial allowance, which was fixed at an interim level of £4,600 last summer, should be replaced by two allowances with maxima of £5,500 for the employment of a full-time secretary, and £1,250 for part-time research assistance. The Government consider that this change in the scope of the allowance will help hon. Members with their task and contribute to the better functioning of Parliament. However, we do not believe that it would be right to make it obligatory that hon. Members should have their secretaries paid directly by the Fees Office as the review body suggests, although we would strongly urge hon. Members to adopt that method of payment.

The suggestion is also made in the report, although it was not within the review body's terms of reference, that the House might possibly wish to reconsider the question of secretaries being employees of the House rather than of hon. Members. Hon. Members may well wish to express their views on this issue when we debate the report in greater detail. However, I am conscious of the fact that in the past many hon. Members have felt that they should remain their secretary's employer, and this is a view that we share.

The review body has also looked at the question of providing severance pay and pensions for secretaries, and also at whether the secretarial allowance should be paid during a period of Dissolution, but it has recommended no change in the existing arrangements.

I turn to the review body's recommendations on hon. Members' pension arrangements. The Government accept the conclusion that the existing rate of accrual is satisfactory and that no further improvement of provisions for back-service credit would be appropriate. The Government also agree, however, that there should be more flexibility in the time limit within which hon. Members may transfer pension rights into the scheme. An appropriate amendment will be introduced when further legislation on the scheme is planned. The Government also accept, in principle, the proposal to use the Members' Fund to provide a measure of benefit as of right to Members who left the House before 16 October 1964 and their dependants. Once the options have been examined and costed in greater detail, appropriate legislation will be introduced.

I now come to the recommendations on other parliamentary allowances and facilities. First, on severance pay, the review body considers that there could be difficulties for the older longer-serving Members when they lose their seats, and it recommends a higher severance payment for them. The report also looks carefully at the problem of the expenses that Ministers in the House of Lords incur, and recommends that an allowance of up to £1,000 per annum should be available towards the cost of secretarial assistance needed to deal with non-departmental correspondence, subject to the production of evidence of expenditure. These Ministers will, however, cease to be eligible for the maximum of £700 per annum of peers expenses allowance which they may currently claim.

As part of its remit the review body also looked at the question of constituency surgery costs, travelling expenses of spouses attending official functions, and the cost of office equipment. Apart from a minor change to the spouses' travel arrangements the review body sees no case for introducing special allowances.

I turn to the question of travel facilities. The review body reiterates the view expressed in its eighth report in 1976 that the costs of all journeys within the United Kingdom on parliamentary business should be reimbursed. The Government recognise the argument that this improvement might help Members carry out their duties but feel unable, because of the costs involved, to accept this recommendation at the present time.

Finally, there is the question of how Members' pay should be treated for the future, and whether it should be linked in any way. The review body, having considered this issue very carefully once more, concludes that linkage would be inappropriate for hon. Members' salaries. The remit to the review body asked it to look specifically at professional analogues, but the conclusion reached here is that there is no similarity between the functions and responsibilities of any professional group and those of hon. Members, and that there is no relationship in terms of pay.

The TSRB reiterates that in its view regular independent review remains the best way of dealing with parliamentary pay, and in the light of all these factors the Government intend to propose the institution of annual TSRB reviews on the parliamentary salary starting from next year. The intention would be to invite the review body to take account particularly of salary movements in the professional field. Of course, the Government could not undertake a blanket commitment to implement whatever is recommended with regard to hon. Members' salaries, but our firm intention is that recommendations will be implemented unless there are clear and compelling reasons to the contrary.

I am sure that the House will welcome the emphasis in the Boyle report on improved payment for secretaries, without whom we should not be able to do our duty. That part of the report is likely to be approved by the House. However, the Chancellor of the Duchy seems to pick and choose between the recommendations. The House will also wish to exercise its right to pick and choose. Will the Chancellor therefore make arrangements for the House to debate this issue so that it can settle the matter? May we have an undertaking that the Government will reserve their opinion until they have heard what the House has to say? Surely the Chancellor of the Duchy should consult all parts of the House before reaching a final decision.

The right hon. Gentleman is not quite right in saying that we have indulged in picking and choosing. The majority of the recommendations have been accepted by the Government, with one or two reservations. I held informal consultations in various parts of the House on a confidential basis before coming to the House with the recommendations. There will be an early debate. The decision of the House will be final.

Does my right hon. Friend agree that this is a matter for a decision of the House of Commons and that it is wrong for the Government to seek to qualify any significant or tangible parts of the recommendation if in due course the House of Commons expresses clear opinions about the way in which this package should be constructed?

I think that the Government have fulfilled their duty. The Government must, with a report of this nature consider, in the light of the situation, what their recommendations to the House should be. As I have just said, it is then for the House to decide on those recommendations.

Does the Leader of the House realise that out of the new secretarial allowance once an hon. Member has paid national insurance contributions for his secretary and made some contribution to a pension for her he is left with a maximum of £4,700 a year? That assumes that he pays for his office expenses out of his own pocket. Is that the going rate for an experienced secretary in the right hon. Gentleman's Department?

I quite agree. Hon. Members have to pay 13½ per cent. of the salary for national insurance purposes. These arrangements are not generous. Indeed, they are minimal recommendations—and I fully accept that. However, they are the recommendations of the independent review body.

Will the right hon. Gentleman ensure when we have the debate that he has promised that on the Order Paper for the consideration of the House will be a motion to consider the first van Straubenzee report, which has never been considered? The right hon. Gentleman will recollect that it recommended as an option—not in a mandatory way—that hon. Members should be allowed to place their secretaries on the House of Commons payroll. No one has ever allowed the House to discuss that matter. The Leader of the House could easily include that in the debate if she wished.

I am sure that that important report will be relevant to the debate and, subject to Mr. Speaker's ruling, that references to it will be in order. The question of the option is, of course, one of the issues that will be discussed in the debate.

Will my right hon. Friend accept that many of us are pleased that there is to be an annual salary review? We feel that that is the best way to deal with the situation. Equally, many of us are somewhat disturbed that each and every one of those reviews—or some in succession—can be negatived by what are described by my right hon. Friend as "clear and compelling reasons". Can he give the House any indication of the sorts of reason that might negative the annual review?

There is no great mystery about this. It is impossible for any Government to accept a review that they have not seen. We must take account of the circumstances of the time. I have said that the presumption is that the Government will accept the report subject to particular circumstances such as a crisis or some kind of economic difficulty. That reservation must be made. I can only pray in aid the behaviour of the Government on this matter. We have agreed that there should be a review to be completed later this year of the second instalment of hon. Members' pay and have given an undertaking that we will fulfill that. This report is in fulfilment of another Government pledge and therefore I suggest that the record of the Gov- ernment on this matter is perfectly reasonable and convincing.

Is my right hon. Friend aware of the depth of feeling in the country about the index-linking of salaries of Members of Parliament? Is he aware that there will be relief that Members of Parliament will not have the benefit of index-linking when so many people do not have it? Does he agree that it is right that we should not benefit from inflation?

I have a great deal of sympathy with what my hon. Friend says. I know well the case for index-linking. In the present economic situation, however, it is not a politically viable option for any Government to propose index-linking. I have, therefore, done the best that I can to make sure that the salaries of hon. Members do not fall behind. I hope that the annual review will be taken not as a major event but as a routine event.

As the Chancellor of the Duchy is clearly under whelmed by the recommendations on secretaries and research assistants does he not agree that there is a case in the House for an upward amendment of those figures since there is no way in which a secretary can fairly be said to be competing for a share of the general office expenses allowance given that she has, under these recommendations, no pension or severance pay arrangements? Does not the right hon. Gentleman also agree that a research assistant cannot be paid £20 a week? The position is that some hon. Members with substantial outside interests can employ a research assistant and others cannot.

I do not pretend that these proposals are perfect, but at any rate they are an improvement on the existing situation. The hon. Gentleman's point is one that he can make in the debate. No doubt other hon. Members will make it.

Will my right hon. Friend reconsider his attitude to the question of travel arangements within the United Kingdom and recognise that in saying "No" he really is penny pinching? The Government could quite easily limit the number of available tickets on British Rail. After all, British Rail is running at a loss and the Government are paying money to it. It needs it. A limit on the number of tickets would enable hon. Members on both sides of the House who need to go outside their constituencies from time to time to obtain the knowledge that is essential for them in the performance of their parliamentary duties Will the right hon. Gentleman reconsider the matter?

I do not think that it is fair of my hon. Friend to can me a penny pincher. I have been called the last of the big spenders by my right hon. Friend the Prime Minister. If my hon. Friend looks carefully at what I said, he will see that I have not closed the door entirely on this matter. We are open to suggestions, but at the moment the Government cannot accept that recommendation.

Is the Minister aware that there is a lot of evidence of considerable hardship among hon. Members who retired before 1964? If there is any spare cash available will he recognise that there would be agreement on both sides of the House if the Government erred on the side of generosity in their treatment of these men?

I have great sympathy with the hon. Gentleman's point. However, the review body has concluded—as review committees have concluded before—that we cannot in principle allow hon. Members who have not been participants in the scheme and who were not eligible for the scheme when it came into operation to participate in it. That is a normal rule of pensions practice. Therefore, we welcome the suggestion that the Members' Fund, which is currently under-used, should be used for this purpose. I hope that the trustees of the Fund will use it generously and that for certain categories of ex-Members it will be a right not a discretion.

Order. I see that hon. Members are all jumping up. I had better impose a limit now. As long as I keep calling them, hon. Members will jump up. I propose to indicate that any hon. Member who has not risen hitherto and who rises after this warning will not be called.

Will my right hon. Friend confirm that there is a strong case for paying secretaries much more money provided that they are willing to undertake research as well as do their job as secretaries to Members of Parliament? If secretaries work for long hours—my secretary certainly does—they should be entitled to claim for that work quite legitimately and the money should be paid direct by the Fees Office.

That is a perfectly valid point. It is a matter for arrangement with the Fees Office rather than with me. I take the view that these two allowances are for work done and that they need not be rigidly separated.

Even so, will the right hon. Gentleman please look again at the matter of severance pay for secretaries? There are women who work in this House all their lives under worse conditions than are found outside in industry and who, at the end of their careers because of the death or translation of their Member, they find themselves without any support.

I accept what the hon. Lady says. I am aware that under the Redundancy Payments Acts a heavy burden can fall on hon. Members. I am not unsympathetic to the point and I think that it is one that could be pursued in the debate. However, the review body has made its recommendation.

Should not the House be grateful for the improvements announced by the right hon. Gentleman? He is not an unskilled negotiator. Is he aware that he is following exactly the same well-worn path to the worst of all possible worlds that was trodden by his predecessors in that office? Although he cannot say that the Government will commit the House of Commons to a review, cannot the Government stop putting forward their own recommendations? It is not unknown in the world outside for people engaged in a dispute or wages negotiations to say that the matter should be put to an arbitration or independent review body, whose findings they accept in advance. Is not that the only way to go on without always getting the worst of all possible worlds?

The hon. Gentleman is being a little pesimistic. The fact that there will be an annual review is a real advance. I have gone as far as I can to committing the Government to accepting that review. One cannot say that in all circumstances. I hope that after the system has been in operation for a certain time the practical result will be the same as the theoretical one adumbrated by the hon. Gentleman.

Does the right hon. Gentleman appreciate that many of us are grateful for an improvement in the secretarial allowances? However, does that not leave a lot to be desired in the general conditions under which secretaries are employed? Severance pay was mentioned. Secretaries' pensions are inadequate. There is no provision for sickness. Do we not still appear to be employing secretaries like employees in an old-fashioned sweatshop? Should we not reconsider this matter and set decent standards as employers of secretaries?

Nobody could quarrel with that. In this case the employers suffer with their employees.

Order. Hon. Gentlemen who are now rising were not here when I said that I would call those who were then standing.

In all fairness we should thank the Leader of the House for what he has done. This is a step forward. When we discuss this matter, could we have a report to Members of Parliament on the accommodation in and around the Palace of Westminster? That is a corollary of having extra money for secretaries and additional research assistants. We should have decent accommodation in which to put them. Information about the accommodation in and around the Palace of Westminster seems to be a bigger secret than that about MI5 and MI6, about which we may read fairly openly. The question of travel was raised. The Boyle committee recommended that we should be entitled to travel throughout the country, yet that recommendation has not been taken up by the Government. Hon. Members do not travel around the country lightly or unnecessarily.

Order. The hon. Gentleman should ask questions. He is making debating points, which can be raised when the matter is discussed.

Will the Leader of the House give an assurance that the Government will reconsider the matter of travel before the debate?

I thank the hon. Gentleman for his generous words. I hope that this will be achieved by the annual review: we should never get into the situation again when a large gap opens up between Members' salaries and the inflation compensation that they should have had. Otherwise there is a totally false impression of large rises being given to Members of Parliament, although their remuneration is catching up only with past inflation. There will be a gain.

I shall certainly consider the subject of travel in the light of what the hon. Gentleman said and of the debate. Accommodation, both inside and outside the House, is being kept under continuous review by the Services Committee and the right hon. Member for Wakefield (Mr. Harrison). The hon. Gentleman said that it was as difficult to find details about accommodation as it was about MI5 and MI6. The right hon. Gentleman is in charge of all this. In effect I might describe him as "MI7".

Does the Leader of the House accept that we welcome the secretarial improvements? He made special mention of an annual review to prevent the salaries of Members of Parliament from falling behind. Does he accept that striking steel workers are making exactly the same point? Their salaries are being forced to fall behind as a result of the arbitrary action of the Government. If the right hon. Gentleman can intervene on behalf of Members of Parliament, why cannot his right hon. Friend the Secretary of State for Industry intervene on behalf of the striking steel workers and get the dispute settled?

That is an interesting question. I am responsible for Members of Parliament. I am not responsible for striking steel workers. I shall do my best. I am sure that my right hon. Friend the Secretary of State for Industry will do his best.