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Members Of Parliament (Pay, Pensions And Allowances)

Volume 990: debated on Thursday 7 August 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 wish to make a statement about parliamentary pay, pensions and allowances.

On 21 July the Government proposed to the House a motion on these matters which would have reduced the cost of implementing the recommendations of the fifteenth report of the Top Salaries Review Body by about £1 million in the coming year. The House accepted the Government's recommendation about the pay of Members of Parliament but rejected that on the allowances to be paid for secretarial and other assistance to hon. Members. In addition, the House expressed the opinion that the notional rate of pay used for calculating the pension entitlements of hon. Members in the coming 12 months should be set at £13,750 a year rather than the £13,150 proposed by the Government; that the pay of hon. Members should correspond to the salary paid to a specific grade in the public service; and that the rate of accrual of hon. Members' entitlement to pension should be raised from one-sixtieth to one-fortieth of final salary for each year's service.

On allowances for secretarial assistance, the Government accept the resolution of the House and we are asking the Fees Office to give effect to it forthwith, backdated to 13 June. The maximum secretarial allowance will be at the rate of £8,000 a year and the maximum allowance for contributions to an approved pension scheme will be at the rate of £800 a year.

On the matters relating to pensions, the Government have noted the view of the House. There are, however, considerable complexities arising from the need to consider the repercussions for public service groups and the substantial implications for public expenditure. The Government have therefore decided that before making further proposals to the House they should prepare a factual paper and place it before hon. Members for their consideration. The House will then have an opportunity to vote on further proposals in the light of that paper after the recess. The Government propose to discuss linkage of salary in the same paper and also to undertake consultations on it in the autumn through the usual channels and with the parliamentary parties.

In the meantime, the Government are asking the Fees Office to put into payment the revised rates of parliamentary salary for which the House voted on 21 July, with effect from 13 June. These are £11,750 for Members of Parliament, except for ministerial office holders, for whom the rate is £6,930. For the time being the pensionable rate of pay will remain at its present figure of £12,000, but when the House in due course votes on a substantive motion on the revised pensionable rate this will operate with retrospective effect from 13 June 1980. Accordingly, Members of this House and their dependants will not suffer from the delay in reaching a conclusion on the pensionable rate. As, for the time being, the difference between pensionable pay and actual pay will be only £250, the supplement payable to hon. Members to cover the cost of the 6 per cent. employee's pension contribution will be £15.

May I first thank the right hon. Member for making this statement and tidying up the many loose ends that exist in this field and for making the administrative arrangements—as it is his duty to do, of course —to put into effect the decisions of the House on secretarial assistance allowance and related allowances? As for the two more fundamental matters voted on by the House the other week—that is, the linkage point and the fiftieths and sixtieths pension point—we accept that those two matters cannot be implemented immediately, that one would require legislation, and that further discussion about them is appropriate after the recess.

However, we expect the Government to take seriously the fact that the House has now voted more than once for the principle of linkage and not to regard that as something that the Government can simply dismiss. We also expect the Government to take seriously the decision of the House in principle on the matter of fortieths and sixtieths as a basis for pension.

That leaves the question of pensionable salary. Here, I must be less kind to the right hon. Gentleman. The considerations to which he referred as leading the Government to reject the decision of the House on this matter were rehearsed during the debate. Nevertheless, a motion supported by hon. Members on both sides was passed by a majority of the House, made up of hon. Members in all parts of the House. Despite that, the Government, instead of implementing that decision, say that they intend to do nothing about it except to bring it forward again for another decision in the autumn.

That is not an acceptable way for the Government, and particularly for the Leader of the House, to behave towards a decision of the House. If it has become the practice for Governments to take that line on decisions of the House of this nature, many hon. Members—I am sure on both sides—will decide that it is high time for the initiative in proposing expenditure of this sort to pass from Governments to the House of Commons Commission. I hope that even at this late stage the Leader of the House will recognise that the decision so wrongly taken by the Government in that case is quite unacceptable, and an insult to the House.

The hon. Member has got the whole matter slightly out of proportion. First, I thank him for what he said about the measures that we propose. Clearly, we are taking linkage seriously. It is precisely because we take it seriously that we must have further discussions through the usual channels and with the representatives of the parties. Linkage is one of those ideas that sound fine when one first approaches them, but as one examines them more closely, the difficulties begin to emerge. We must therefore examine and discuss that matter further.

Similarly, on the matter of one-fortieth as opposed to one-sixtieth of salary, on which the House expressed its opinion, complex issues are involved. The Cabinet has considered the matter twice. We came to the conclusion that it would be unwise, at the tail end of the Session, to rush into decisions without considerable opportunity for reflection.

As for the question of the pensionable salary, we are not rejecting the view of the House; the hon. Member is quite wrong. That, again, was an expression of opinion, and when an opinion has been expressed by the House the Government must reflect upon it. It is our view that one cannot implement that proposal in respect of one group of the TSRB people, who have all been treated equally, without implementing it for the others. Therefore, the House should have the opportunity to consider the facts. Then a substantive motion will be put before the House. The House will vote on the matter, and that will dispose of it.

Therefore, we are not rejecting the opinion expressed by the House. We are following it carefully and, I think, putting forward reasonable proposals. If he reflects on that the hon. Gentleman will see that the House is being treated with the respect and deference that is suitable.

On the matter of linkage, is my right hon. Friend aware that many of us regard it as totally inconsistent that we should at one moment vote for hon. Members of this place to set an example to the country by exercising self-restraint and, not five minutes later, vote to make it impossible for ourselves ever to do the same again? In any consultations that he may have will he bear in mind the fact that that view is shared by hon. Members on the Government side, and that the executive of the 1922 Committee is not authorised to act as a shop steward on our behalf?

Those are fighting words. I must take into account the views of all hon. Members. That is why it is essential to have consultations on this matter with representatives of the parties —that is, with Back Benchers as well as through the usual channels. This is a difficult problem. As my hon. Friend said, there is a strong view that it should be rejected. On the other hand, I must start from the premise that the House has voted for it and that we must examine the practicalities of it.

Does my right hon. Friend nevertheless agree that an unhealthy and regrettable situation has now developed, in that the combined allowances are well in excess of the salary figure? That must be wrong, so one of the important imperatives for linkage will also be to bring that relationship back into more sensible line, as well as to give an appropriate increase in salary.

I am afraid that I cannot agree with my hon. Friend. The allowances in this House are reimbursable allowances for expenses actually incurred. The fact that there is a combined secretarial allowance and research allowance of £8,000 does not mean that every hon. Member is entitled to it. If an hon. Member spends that money he can claim it back; if he does not, of course he would not apply for it.

May I seek further clarification on the problem of secretarial pensions? My right hon. Friend used the phrase "approved pension schemes". Will the mechanics of the system be that hon. Members should get their own quotations and present them either to the Fees Office or to himself for approval? If so, when that is done who gives the final approval? Has my right hon. Friend considered the possibility of the problems arising over secretarial pensions, presumably paid by their employers, when those employers lose their jobs, as some of us unfortunately do at election time, with the danger of insurance premiums lapsing?

Those are technical questions. If I may, I will write to my hon. Friend on his second point. As for pension proposals being referred to myself, I feel rather as my right hon. Friend the Home Secretary felt about taxation proposals being submitted to him. I would feel sorry for any hon. Member who submitted a pension pro- posal to me. He would have to be a person of great faith—and of hope and charity as well.

It is intended that any proposals should be submitted to the Fees Office. It will be possible for hon. Members to have a model scheme with an insurance company, which the Fees Office will make available, or, if arrangements are made by hon. Members themselves for secretaries, they can submit a receipted claim for money expended on the scheme, and that will be reimbursed. Those are alternatives that hon. Members may pursue.

When the substantive motion conies before us after the recess, will it be in terms of the motion that the Government tabled before with regard to pensionable salary, or in the terms of the amendment carried by the House? Does the right hon. Gentleman appreciate the importance of this? If he tables a motion in accordance with the figure that the Government want, because it will be an effective motion it will not be open to any non-ministerial Member to move for an increase in the figure. Therefore, there will be no opportunity to take again the decision that was taken a week or two ago. How does the right hon. Gentleman propose to get around that difficulty?

It is quite clear that what I am proposing is that quite a lot of information will be made available to the House about the implications of this change. The House will have an opportunity of voting for the motion in the terns in which hon. Members have already voted. It is similar to that.