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Top Salaries Review Body

Volume 83: debated on Friday 19 July 1985

The text on this page has been created from Hansard archive content, it may contain typographical errors.

(by private notice) asked the Prime Minister if she will make a statement on the report of the Top Salaries Review Body.

I have been asked to reply. I have nothing to add to the written answer given yesterday by my right hon. Friend the Prime Minister to my hon. Friend the Member for Mid-Worcestershire (Mr. Forth).

Clearly, the Prime Minister, who has direct responsibility for these matters and who is in London this morning, should have had the courage to answer. The fact that she chooses to hide behind the Chief Secretary, of all people, shows the depths of desperation in which the Government find themselves. Although the Chief Secretary may have nothing to add now, sooner or later public opinion will make the Government add something to yesterday's inadequate statement.

How do the Government justify abolishing wages council protection for young low-paid workers one day and awarding a salary increase of £23,750 a year to the Secretary to the Cabinet the next? Have the Government now converted to the principle of comparability, or has comparability simply been wheeled out as an excuse to pay massive wage increases to the already highly paid?

If comparability is something more than camouflage, is the principle to be applied throughout the public service? Can the job that Lord Plowden did with such success for top salary earners be extended to other areas—the teachers and Lord Houghton, the miners and Lord Wilberforce, the nurses and Lord Halsbury, and local authority manual workers and Professor Hugh Clegg? The Government have denounced all those cases of comparability. The Chief Secretary had better tell us whether they have mended their ways and now believe that that is the proper way to proceed.

Will the Chief Secretary tell us about the two justifications which have been offered for the review? The first is that these people pay particularly high levels of taxation. I hope that the Chief Secretary has the grace to admit that these people—the top salary group—are the only section in the population who have received any net benefit from the Government's taxation policy. It is the one group that is paying less tax than before 1979. Eighty-seven per cent. of the population is paying more, and the Chief Secretary had better admit that.

The second justification is that the increases are necessary to recruit the right sort of people. That is what the Government spokesman said on the radio this morning. At present salary levels are the judges inadequate, the generals inefficient and the permanent secretaries incompetent, especially those who have been hand-picked by the Prime Minister during the past two years? Clearly the Prime Minister was desperate to avoid a debate on the subject, but she cannot run away from the consequences of her philosophy, which are demonstrated by this decision.

Order. There is no question of giving way in the middle of a series of questions.

Whatever the hon. Member for Croydon, South (Sir W. Clark) may wish to say, he would defend the Government if they decided to kill the first-born on 23 December one year. Whatever he may say, the public relations image of compassionate Conservatism lasted for about 48 hours, as witnessed by the fact that the Chief Secretary, of all people, was wheeled in for today's statement.

The Government have one rule for the rich and another for the rest. It is that commitment to the divided society which makes the Government increasingly despised throughout the country.

On a point of order, Mr. Speaker You will recall that during his long harangue the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) said that I would support the Government, even if they killed the first-born. Surely that is so offensive that it should be withdrawn immediately.

If the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) made that accusation, I am certain that he would wish to withdraw it.

Further to that point of order. Mr. Speaker. The remark was intended as an image, but if the hon. Member for Croydon, South (Sir W. Clark) wishes to take it literally I withdraw the literal interpretation, if not the image that I implied.

I shall not attempt to match the indignation of the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), except to remind him and the House that in 1978, when he was a member of it, the Labour Cabinet accepted the recommendation of the Top Salaries Review Body for salary increases of 35 per cent. for the grades covered. I hope that I can deal more coolly with the matter than the right hon. Gentleman, with his highly charged questions.

The problem with wages councils is different, and, therefore, our responses have been different. In some cases the recommendations of wages councils have made it more difficult, not easier, for young people to find jobs, and that is the problem that we are addressing.

In this case—I come to the right hon. Gentleman's last point—the question relates to recruiting and retaining people of high quality. Obviously the existing holders of those offices are of the highest quality, and no implied criticism is contained in the Prime Minister's second justification. We must ensure the right quality of successors.

If the right hon. Gentleman had taken the trouble to study the report, especially paragraph 67, he would have found that comparability was not the predominant influence on the review body. Indeed, it said that if it had based its recommendations purely on the comparability principle, it would have recommended much higher figures.

On the question of high levels of taxation, the right hon. Gentleman did not pay attention to our debates on the Finance Bill; otherwise he would recall that we have directed most attention to the thresholds, which have been increased by 20 per cent. in real terms since we came to power in 1979.

Will my right hon. and learned Friend confirm that the number of people involved in the recommendations amount to 2,000, and that in considering a reward the numbers involved must always be borne in mind? Will he further confirm that, if we appoint review bodies, it does not make sense to ignore what they say? Is it not a fact that we accepted the review body's recommendations on nurses' pay, although pay was staged? Are not these recommendations also staged in recognition of the need for restraint in this matter? Will he further confirm that in the Prime Minister's answer to my question a great deal of stress is placed on individual merit and performance, that the awards are being made in that context, and that we want increasingly to move in that direction?

My hon. Friend is right, in that slightly more than 1,800 people are involved. The increased cost will be absorbed in the running costs total, so the cash limits will not be breached. He is also right in what he says about accepting the report. When the review body was set up in 1971, together with the review bodies for the armed forces, doctors and dentists, my noble Friend Lord Carr announced that the Government would not modify the recommendations unless there were clear and compelling reasons. We have made some slight modifications in this case. Nevertheless, we continue to adhere to the principle announced by my noble Friend.

In view of the opposition expressed to the increases in top salaries, does the Chief Secretary expect similar opposition to inappropriate increases in Members' salaries, which would add another 650 to the total of 2,000?

I do not wish to anticipate anything that might be done with regard to Members' salaries, and I accept no ministerial responsibility for them.

If, as my right hon. and learned Friend claims, the report is not based upon comparability, is it not important that we should be sure on what basis the awards are being made? Therefore, is not an important consideration the question of relative justice between groups?

Relative justice between groups is highly subjective. I am not sure which groups my hon. Friend has in mind. The part of the report that commended itself most to the Government dealt with the recruitment and retention of people of the right quality to fulfil tasks of the greatest responsibility in the service of the Crown.

Is it not especially offensive that such whacking increases should be given to civil servants who have been instructed by the Government to resist the partial restoration of standards for nurses and teachers? Will the Government proceed at once, on the basis of the top salaries report, to restore the standards which nurses had under Halsbury and which teachers had under Houghton?

The right hon. Gentleman forgets what has happened to the nurses under this Administration. Their salaries have increased by 90 per cent. in cash terms and by 20 per cent. in real terms. Also, if the right hon. Gentleman searches his conscience, he may be uneasy about what the Labour Government did for the teachers.

Does my right hon. and learned Friend accept that all Conservative Members support the Government's desire to reduce inflation? However, does he understand that this award will push the loyalty of many Conservatives in our constituencies a very long way? Did not the Prime Minister suggest that Members of Parliament and others at the top of the salary scale should be restrained and should give a lead to the rest of the country? The Government must realise that there will be considerable criticism of this award, when we are offering only 6 per cent. to teachers and have given only a small increase to nurses.

Of course, I note my hon. Friend's concern and that of his constituents. However, I have no doubt that he will explain to his constituents the difference between those in the public service to which these recommendations relate and Members of the House, who are responsible for fixing their own salaries. That is not true of the heads of the Civil Service or the armed forces.

May I emphasise the position of my right hon. Friend the Secretary of State for Education and Science, who said that he would welcome a restructuring of teachers' salaries, with special emphasis on the position of head teachers.

Does the Chief Secretary accept that the people who will get these massive increases in salary are the people who have had massive tax concessions from the Government since they came into office in 1979? Is it not a further example of the Government's insensitivity, and their determination to clobber the poor, whether they be nurses, teachers or the young unemployed, and to mollycoddle the rich? Is it any wonder that many Conservative voters and Members are becoming increasingly disenchanted with the massive injustices perpetrated by the Government?

I may be unable to persuade the hon. Gentleman, but I could persuade the majority of hon. Members to accept that tax rates of 98 per cent. and 83 per cent. can hardly be regarded as just, or as assisting our fellow countrymen. We put those injustices right, and we have also directed resources to raising the starting point for tax, which has benefited those for whom the hon. Gentleman affects concern.

Since the hon. Gentleman has again asked about nurses' pay, may I repeat that if nurses' pay had stayed at the real level inherited by the Government in 1979 the pay of a staff nurse on the maximum rate would now be £2,000 less. That is a measure of our concern for the nurses, which is greater than that of the Labour party.

Does my right hon. and learned Friend agree that the real issue here is the retention of the right calibre of civil servants so that they can carry out the duties for which they are responsible? Is he aware that it is becoming increasingly difficult to recruit top grade accountants to the National Audit Office? Will he remind the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) that he was wrong to suggest that I am a spokesman for the Government?

My hon. Friend has made several effective points, and has made his position clear. May I refer the House to the last sentence of paragraph 39 of the report, which states:

"Good quality cannot be obtained on the cheap in a competitive market place which, increasingly, is an international one for the best management talent."

Why is the Chief Secretary so worried about losing the best and brightest civil servants and so cavalier about losing the best and brightest teachers and nurses?

The hon. Gentleman cannot have heard my answer to a supplementary question from my hon. Friend the Member for Honiton (Sir P. Emery). My right hon. Friend the Secretary of State for Education and Science has made it clear that he would welcome a restructuring of teachers' salaries, with special emphasis on the position of head teachers. We wish to ensure that people with responsibility and with special talents in the teaching profession, as elsewhere, are properly rewarded.

Can my right hon. and learned Friend explain the ambivalent attitude of Opposition Members, who appear to advocate the rate for the job for sonic groups but not for others? How and where do they draw the line? Do they base their calculations on responsibility, on salary or on political expediency?

My hon. Friend has exposed the synthetic indignation of the Opposition and their complete failure to grasp the reality of the present position.

If, as the Chief Secretary says, the intention of this grotesque distortion in salary scales is to retain the right calibre of people, why is it that some under-secretaries will receive only 5·1 per cent. increases, while their bosses will receive 46 per cent. increases? Are the under-secretaries not of the right calibre?

I have not suggested that. Of course, they will be encouraged by the glittering prospects available to them if they stay in the service.

Will my right hon. and learned Friend explain to the House how often the top salaries of those involved have been held back because of the political guilt kick, which we have heard expressed by the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley)? Will he make it plain that these increases will make up for increases that were funked, wrongly, in the past?

My hon. and learned Friend is right. We have had about 22 reports from the body, and it makes a more extensive review every three years. Without notice of my hon. and learned Friend's question, I cannot say exactly what the Labour Government's decision was on each occasion, but I repeat that, in 1978—I give them full credit for it—they did not flinch from increasing salaries in line with the body's recommendations.

Is the Chief Secretary aware that this action will engender massive resentment and disgust in the country, not confined to supporters of the Opposition, especially when it has come from a Government led by a Prime Minister who had the gall to quote the prayer of St. Francis of Assisi when entering No. 10 Downing street? Does he agree that this will be a signal to the nurses, the teachers and to others struggling to obtain a decent wage not to pay the slightest attention to any of the Government's sermons on wage restraint?

This conclusion of the Government will excite indignation only if the wilful misrepresentations of the right hon. Member for Western Isles (Mr. Stewart) and the Opposition parties go uncorrected.

Is it not true that there is never a popular time to make necessary increases of this kind and that it is characteristic of the Opposition parties that their indignation is always bogus, their grasp of reality is always tenuous and their appeal to envy and class hatred is constant?

My hon. and learned Friend has accurately sized up the approach of the Opposition parties to this problem.

What message has the Chief Secretary for those in the north-east, 250,000 of whom have been unemployed since 1979 and 450,000 of whom live below the decency threshold level of the Council of Europe? Is the message for those people that if Thatcherism is not working for them it is not working either for those top people who need to be recruited into the Civil Service by such massive pay increases? Is the right hon. and learned Gentleman saying that, if they do not have these increases, they will leave the country?

I suspect that the people for whom the hon. Gentleman professes to speak will appreciate that it is better to have a high quality Civil Service and high quality armed forces than to have their position constantly eroded by the envy, malice and misunderstanding of the Opposition.

Can my right hon. and learned Friend confirm that, unlike, for example, the hon. Member for Middlesborough (Mr. Bell), the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) or me, the people who are receiving these increases are unable to earn large sums of money in addition to their salaries? While it may be unoriginal, is it not always true that the poor are not helped by attacking the rich? Does my right hon. and learned Friend agree that the Labour party, the Liberal party and the Social Democratic party have given notice to anyone with talent and ability that he need not expect his talent and ability to be rewarded by any future Government in which any of those parties has any part to play?

My hon. Friend has succinctly summed up the message that goes out every time that the Labour party cares to disclose its policies, which it does very rarely. The other parties are so thinly represented here at the moment that I would not care to speculate on their position.

Is the Chief Secretary aware that, in view of the expected Government reshuffle, his statement today may be the last one that he will make on behalf of the Government?

Is it not fair to say that the Government are not beset by communication problems and presentational difficulties? The point is that the Government are determined to look after those at the very top. Having allocated tax cuts to the top 6 per cent. in society, they have the nerve to hand out these massive pay increases to top civil servants and all the rest, none of whom works in an economic unit of production, as opposed to pensioners who have been offered about 7 per cent., nurses who have been offered 7 per cent. coupled with the threat to take some of it back, and local authority manual workers who were offered 4 per cent. last year and probably will be offered the same again this year. All these groups in society are deliberately hammered by this Government so that they can better look after their own class. It is time that the Chief Secretary, when he loses his job in the autumn, took the whole caboodle of the Tory Front bench with him. The best thing that this Government can do is resign and get out of the way.

I should not expect the hon. Member for Bolsover (Mr. Skinner) to understand the scale of responsibilities carried by the people for whom the review body has made these recommendations.

Does my right hon. and learned Friend agree that exceptional ability, exceptional responsibility and exceptional effort should be accorded exceptional reward? Is not this proposition recognised universally in all the most successful economies? Is it not the case that the greater the extent to which it becomes recognised here, the greater are our prospects of establishing ourselves amongst the most successful economies, to the benefit of all our people?

I accept entirely the principles enunciated by my hon. and learned Friend. Would that the Opposition had the same clear-sighted appreciation of what the country requires.

Will the Chief Secretary give consideration to the feeling in Scotland, especially amongst the teachers, who have been arguing for more than a year for the creation of an independent salaries review body? Unfortunately, there is no Scottish Minister present to advise the right hon. and learned Gentleman. Scottish teachers have been arguing for such an independent review body to evaluate their position in society, only to see these rewards being given by the Government to highly paid people. Will the right hon. and learned Gentleman try to evaluate the resentment in Scottish schools and Scottish education and the damage that the Government are doing?

I shall not trespass on what is a particularly Scottish problem, although I doubt whether it is a particularly Scottish problem. However, I remind the House that the loss of relative value in teachers' pay occurred between 1975 and 1979 after the Houghton award had stoked up inflation.

Is my right hon. and learned Friend aware that I am one who supports a proper wage rise for teachers and that I am also one who was paid the Houghton award of 1974? I was in the profession between 1974 and 1979 and saw that pay award eroded by a Labour Government and a Lib-Lab Government of which the right hon. Member for Blaenau Gwent (Mr. Foot) was a member. We were much worse off then than teachers are now. I also remember Mrs. Castle saying to teachers in an early dispute with the Labour Government for higher pay, "Good luck to you," but she was in the Cabinet which refused us an increase. What hypocrisy! Will my right hon. and learned Friend comment on the gross hypocrisy and absurd position of the Labour and Liberal parties on teachers' pay?

It is beyond me to comment effectively on the hypocrisy of the Labour party. However, I am glad that my hon. Friend, speaking from first-hand experience. has set the record right.

Does the right hon. and learned Gentleman regret that his engagements last night did not allow him to be present to hear my Adjournment debate during which I put forward a case for a very seriously ill man who twice applied——

Order. This is a bit wide of the Top Salaries Review Body's recommendations.

My point is that this man's claim was rejected by some of the people who today are to be given these massive increases. Will the Chief Secretary accept that people are sick and tired of government by the establishment for the establishment and of the arrogance of intellect coupled with the brutality of power?

I am sorry that I did not have the privilege of hearing the hon. Gentleman's intervention last night. I shall study the record in Hansard, though I doubt whether that problem was the responsibility of any of the civil servants or members of the armed forces for whom these recommendations have been made.

Will my right hon. and learned Friend not be deterred by the hysteria on the Opposition Front Bench and elsewhere from putting, as he has done, the case for high salaries for high responsibilities in the public service? However, will he please think again about his surprising assertion that, because Members of Parliament can fix their own wages, they are in a different category? If the Government had accepted the independent recommendations two years ago of the same investigator. that problem would not have arisen.

I take note of what my hon. Friend says. I think that I should be going a little wide of the subject if I were drawn into commenting on the salaries of hon. Members.

Is the Chief Secretary seriously asking the public to believe that increases for permanent secretaries of between 32 per cent. and 46 per cent. are necessary to stem the fall in their morale and to stop civil servants and others feeling like parasites? Does not he understand that many in the Civil Service, especially in the lower ranks, have low morale and feel like parasites because the Prime Minister and her Government have never ceased denigrating public service ever since they assumed power? Why do the Government think that they can have teachers and nurses on the cheap? Why is it necessary for the poor to accept wage cuts to make them work harder whilst the rich must always have more to make them work harder?

The hon. Gentleman seems to be a little confused. We have deep appreciation of the dedication and contribution of civil servants and the armed forces. They should be properly rewarded, and I hope that, particularly after this, they will so regard it. Our record on the Civil Service stands the closest possible examination, and I am happy to rebut the hon. Gentleman's distortions.

The hon. Gentleman returned to the point about teachers' pay. As my right hon. Friend the Secretary of State for Education and Science has emphasised, we would be delighted to see restructuring to give emphasis to special skills and responsibilities.

As to the case of nurses, the hon. Gentleman had better study Hansard tomorrow. I have set out not once but three times how our record stands the closest possible comparison with that of the Labour Government. The cash increase for nurses has been about 94 per cent. and the real increase about 20 per cent. Every nurse and staff nurse would be far worse off if the levels of pay for that dedicated profession that we have inherited from the Labour Government had been perpetuated.

Order. I remind the House that this is a private notice question and I have an obligation to protect the Northern Ireland business. I propose to allow questions to continue for a further five minutes and then we must move on.

My right hon. and learned Friend will have noticed that, almost to a man, Opposition Members have advocated upward comparability. Does he recognise that there are Conservative Members who believe that the way to control the inflation with which the Labour party, when in power, nearly destroyed the country is through restraint, and that restraint must apply to top salaries as well as to others?

My hon. Friend will have noticed that we have not implemented the recommendations in full. He is right to remind the House that the standard of living and savings of most sectors of our community were eroded to an incomparable degree by the inflation that prevailed under the last Labour Government.


This is not a bit of fun, although it may be funny to the Tories. Is the Minister prepared to tell the 4 million unemployed, the 1 million homeless, the 600,000 waiting for hospital treatment, the old-age pensioners and the young unemployed that it is they who will be making the sacrifices to pay for these £500 a week increases?

To set the record right, in case anybody should be misled by the hon. Gentleman's misunderstanding of the facts, I point out that the cash involved in a full year will be £9 million, and this year it will be £4 million. I emphasise again that this will be absorbed into the running costs and cash limits of the Department concerned.

Can my right hon. and learned Friend confirm that the pay review body is impartial, and that its findings are based on a careful evaluation of the facts before it?

It is a completely impartial body and it has never been suggested, even by Labour Members, that it is not.

The two-faced actions this week by the class-ridden Tory Government show one thing. On Wednesday, they tell half a million youngsters, some of whom are on £29·70 a week, that they are pricing themselves out of jobs. On Thursday their friends in high places, the ones they share clubs and restaurants with, and went to school with, and into whose families they married, who are served by those youngsters in hotels and restaurants and shops are told that they can have a rise of £460 a week. Is not that a clear sign of a class-ridden Government that should be swept from office?

I do not know the hon. Gentleman's definition of a class-ridden Government, but I suggest that he studies the differentials in the Soviet Union.

Does my right hon. and learned Friend share my sense of relief that my hon. Friend the Member for Croydon, South (Sir W. Clark) does not intend to participate in the massacre of the first-born? Will he confirm that the Government are already having difficulties in recruiting judges and potential senior civil servants?

I know that the House will not regard my hon. Friend the Member for Croydon, South (Sir 'W. Clark) as having Herodian sentiments in this or in other parts of public sector activity. I am grateful to my hon. Friend for drawing attention to the central point, which is dealt with at various points in the review body's recommendations, that there is difficulty in recruiting in certain sectors, and certainly difficulty in retaining people at various grades. I am sure that the House will join in believing that we should have high quality armed services, and a high quality public service generally.

Does the Chief Secretary have any real conception of how yesterday's decision will be greeted by those young people for whom this Government offer no employment prospects, a reduction in supplementary benefit and destruction of the wages council provisions giving them a minimum level of protection? How will he persuade them that we live in one nation?

The hon. Gentleman either does not understand or wilfully misunderstands the Government's intentions. If he had listened closely to the careful case for reform of the wages councils, he might be able to explain to young people that it will enhance rather than diminish their chances of finding work. He might also remind them of the considerable resources devoted at Budget time to increased training and various job creation schemes.

Order. We are running short of time. What does the hon. Gentleman wish to say?

The hon. Member for Coventry, South-East (Mr. Nellist)—[Interruption.] I am sorry, but intend to pursue this matter. The hon. Gentleman deliberately used, in a loud voice, the word "hypocrite" to describe my right hon. and learned Friend the Chief Secretary——

Order. I hope that, in this highly charged situation, hon. Members will moderate their language.

Is it not the case that, when the Labour party and the alliance were trying to score cheap political points over the appointment of Mr. Peter Levene, they fully recognised the serious problem of senior civil servants drifting into the private sector? Is there not much humbug among Opposition Members? Only a month ago, in the defence debates., leaders of both parties were calling on the Government to do more to stop the drift of officers into the private sector.

My hon. Friend is right. The Labour party has never realised that there is an open international. market for talent. If the country is to be well administered, and if our prospects are to be maintained at a high level, it is important that we should recruit, retain and motivate the highest quality people to serve in the armed forces and Civil Service.

The Chief Secretary will have heard criticism of the Government's proposals from both sides of the House, and most eloquently from the hon. Member for Honiton (Sir P. Emery) and others of his hon. Friends, both now and at about 9.30 this morning. As the feelings on both sides of the House are so strong, does he understand that it will be intolerable if these decisions are implemented before they are debated in the House of Commons; and when they are debated we hope that the Prime Minister will have the courage to come to defend them herself?

I make it clear that my right hon. Friend the Prime Minister is concerned with these matters, but she has a meeting with a visiting Head of State this morning. The possibility of a debate is a matter for my right hon. Friend the Leader of the House and the usual channels.

On a point of order, Mr. Speaker. You will have noticed that this morning—and Friday mornings are not notable for a strong attendance in the Chamber—more than 30 hon. Members on both sides of the House have tried to put questions on the statement. Undoubtedly there would have been more had the statement been made on a normal working day. There might even have been a spokesman from the SDP present.

I need your advice and help, Mr. Speaker. Is it not clear that there is a need for a full debate on this package of pay proposals, particularly as the Government are about to add a Cabinet Minister to all those who are aboad this high-wage gravy train? As only five more working days are left before we go into recess until the end of October, will you, on behalf of the House, use your authority to convey to the Prime Minister not only our deep concern but our strong feeling that the Government should not be allowed to evade a full debate in prime time?

The House knows that that matter is not in my hands. The Adjournment motion is due to be considered next week. Whether we adjourn for the summer recess is in the hands of the House.