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House of Commons Members’ Fund

Volume 465: debated on Tuesday 23 October 2007

I beg to move,

That, pursuant to section 4(4) of the House of Commons Members’ Fund Act 1948 and section 1(4) of the House of Commons Members’ Fund Act 1957, in the year commencing 1st October 2007 there be appropriated for the purposes of section 4 of the House of Commons Members’ Fund Act 1948:

(1) The whole of the sums deducted or set aside in that year under section 1(3) of the House of Commons Members’ Fund Act 1939 from the salaries of Members of the House of Commons; and

(2) The whole of the Treasury contribution to the Fund in that year.

With this, it will be convenient to discuss the House of Commons Members’ Fund (Custodian Trustee) motion:

That, in pursuance of sections 2(1) and (2) of the House of Commons Members’ Fund Act 1939, Capita Trust Company Ltd. be appointed as custodian trustee in the room of the Public Trustee.

I will not detain the House for long on these motions and I am grateful to you, Mr. Deputy Speaker, for allowing us to debate them together.

As hon. Members will know, the House of Commons Members’ Fund is a benevolent fund that exists to provide support for former Members and their dependants, not least those who served before the House had any statutory pensions for MPs or their widows and dependants. Similar funds exist in most professions: what is unique about this fund is that it exists under its own rather arcane, ancient and out-of-date legislation. Two things are consequently required to be done, which explains why these measures are before us today.

First, we are required annually to appropriate moneys available to the fund, which come from two sources, to the purposes for which the fund is set up. That is what the first motion does. The two sources of money are the monthly contributions of Members from their own salaries, of which they may well be largely unaware, and moneys made available from the Treasury. Under this measure, the moneys are appropriate to be used for the purposes that the fund has set up, namely to provide so-called as-of-right pensions, in particular for those who are widows or dependants of Members who served before pensions existed or widows of Members who retired before the widows’ pension was raised on a discretionary basis. It is important to match any such increase in the widows’ pension. In addition, there are discretionary funds of a modest nature made to a handful of cases brought to the fund annually. The former contributions are in the order of £2,000 a year—a very small or, to my mind, derisory amount for elderly widows. The average of discretionary contributions, which will need to be met, is about £5,000 in hardship cases of more recent retirees from the House.

I think that I have now understood the legal background. The question that posed itself when I was looking into the current facts is, given that that there are about 100 beneficiaries and that we are appropriating the whole of the two sources of money, is it in the discretion of the trustees, if they were so minded, to make much larger payments if that were felt necessary? One could contemplate a widow or widower or a former Member who retired many years ago being in pretty dire financial circumstances. To put it bluntly, £2,000 or even £5,000 might be helpful, but it would not solve the problem.

Yes, we can make larger discretionary payments. The as-of-right amount of settlement is agreed with the Treasury. I would like to see it raised, but that is not what the motion deals with or what we are debating now. A review of the whole fund is being undertaken. It may be that an agreement to increased amounts for the diminishing number of elderly widows will come out of that. However, we can, in addition, help individuals if they come to us with a specific need—for example, because of disability. We look sympathetically on those cases and have discretion to help them through the appropriation of these moneys over and above the as-of-right amount that they receive semi-automatically.

Do I understand the right hon. Gentleman to be saying that the trustees can provide an additional top-up for the as-of-right beneficiaries, as well as giving a discretionary amount to people who are not as-of-right beneficiaries?

The hon. Gentleman is quite correct: we can and do act in that way in respect of specific beneficiaries who come to us with that sort of additional need. We always welcome hearing such cases where additional needs exist.

The second feature of the legislation, which gives rise to the second motion, is the reference to there being a “custodian trustee”. Up to now, the custodian trustee has been the Public Trustee office—now called the Official Solicitor and Public Trustee office. It now wishes to desist from involvement in this matter and has effectively resigned. The trustees have agreed that Capita Trustee Ltd. should replace that office as custodian trustee. The Official Solicitor and Public Trustee office has itself carried out a public tendering exercise and, by happy coincidence, reached the same conclusion—that Capital Trustee Ltd. should be the replacement body to carry out these functions. It may be some comfort to hon. Members to know that the trustees’ judgment was supported by the Official Solicitor and Public Trustee office. Its judgment, which might be thought “interested” in that it wanted to get shot of this responsibility, was supported independently by the trustees. That explains the second motion. I commend both motions to the House.

Order. I do not know whether the Minister wishes to contribute immediately or at the end of the debate. It seems that she wants to do so now.

The right hon. Member for Hitchin and Harpenden (Mr. Lilley) has fully set out the arguments behind the two motions. I urge the House to support them, but I also wanted to thank the right hon. Gentleman very much for his work as chairman of the trustees and to express my gratitude for all the work that the trustees do.

I will also be brief. I add my thanks to those of the Minister for the right hon. Member for Hitchin and Harpenden (Mr. Lilley) and his colleagues for discharging this function.

I have two further questions—I had hoped to intervene to make my contribution even shorter—so let me deal with them in turn. First, in respect of the first motion and the fund as a whole, I understand that it currently stands at just above £4 million. By definition, the 100 beneficiaries are declining in number as they age. At the end of the exercise of this set of functions, will the money go back into a fund that will be available for other potential beneficiaries, will it go back to the Treasury or will it go somewhere else? From the papers I have read, I could not work out where the money would go once the duties of the trustees to these 100 beneficiaries have been fulfilled.

Secondly, on the replacement custodian trustee, I have no fundamental disagreement with the judgment of the trustees, but a bell was ringing in my head when I saw who had been nominated to take over. It is a private sector company well known to many of us and this is clearly its trustee arm.

Capita has not been uncontroversial in its intervention in public sector tendered activities; it does, and has done, huge amounts of work for local authorities. I think that the other arm of the company might still run London congestion charging, so it is well known across the country. It has had difficulties in the recent past: it is a matter of record that it was fined by the Financial Services Authority, and it accepted that and paid up. In addition to the tendering process done by the previous official custodian as official trustee, will the right hon. Gentleman confirm that our trustees, of whom he is an eminent chairman, satisfied themselves that the company was not only satisfactory simpliciter but the best available in the market—even if they did not undertake a tender process, as I understand it—and that any concerns about its past failures had been overcome, so that people could have confidence that it was entirely reputable and competent to do the job?

I simply want to make two points.

First, my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) referred to the fact that a review of the fund is taking place, which I welcome. The hon. Member for North Southwark and Bermondsey (Simon Hughes) might find that at least one of his points is addressed by that review. Secondly, I add my thanks, not only to my right hon. Friend who is chairman of the trustees, but to the other trustees who have undertaken their role with distinction. Despite stories in the press about hon. Members with their snouts in the trough, many widows and other dependants of those who have served as Members in the past are in dire circumstances and need the support of the fund. The trustees do a very good job.

I am grateful for the opportunity to respond to this brief debate and the two questions asked by the hon. Member for North Southwark and Bermondsey (Simon Hughes).

On how the review might influence the disposal of moneys in the hands of the trustees, one proposal that we are considering is that a sum of money from that £4 million be handed back to the Treasury, which would take on the responsibility for the as-of-right cases during their remaining existence. Some actuarial assessment of costs would be sought, and the Treasury would in turn diminish or cease to make an annual contribution to the fund. The fund would therefore need to retain some moneys to ensure that it was properly financed, together with the ongoing subscriptions that it receives from serving Members to meet the needs of ad hoc cases that come before us. We will have to get the sums right in the review for that to be agreed, and for a proposal to be put before the House.

On Capita, the issues raised by the hon. Gentleman were considered when there was the happy coincidence of the two bodies reaching a decision. That they both reached that decision should give him some comfort.

I am grateful for the opportunity to clarify matters, and for the thanks that all who have spoken have given to the trustees. I add my thanks to all those who have served as trustees, and who do so out of a sense of noblesse oblige, as that service cannot in any way contribute to their parliamentary careers.

Question put and agreed to.

Resolved,

That, pursuant to section 4(4) of the House of Commons Members’ Fund Act 1948 and section 1(4) of the House of Commons Members’ Fund Act 1957, in the year commencing 1st October 2007 there be appropriated for the purposes of section 4 of the House of Commons Members’ Fund Act 1948:

(1) The whole of the sums deducted or set aside in that year under section 1(3) of the House of Commons Members’ Fund Act 1939 from the salaries of Members of the House of Commons; and

(2) The whole of the Treasury contribution to the Fund in that year.

HOUSE OF COMMONS MEMBERS’ FUND (CUSTODIAN TRUSTEE)

Resolved,

That, in pursuance of sections 2(1) and (2) of the House of Commons Members’ Fund Act 1939, Capita Trust Company Ltd. be appointed as custodian trustee in the room of the Public Trustee.—[Mr. Lilley.]