Open Public Services White Paper

Debate between Lord Maclennan of Rogart and Baroness Verma

Monday 11th July 2011 Lords Chamber

[Lord Maclennan of Rogart]

My Lords, while I acknowledge the sense of many of the objectives spelled out in this White Paper, does my noble friend recognise that across the whole White Paper the proposals to achieve these ends raise far more questions than answers? The modes of delivery are very far from clear and this House needs to debate them serially and at length. For example, does my noble friend recognise that cuts in public expenditure are seriously diminishing the access of local people to central services? The closure of the income tax offices and the removal of visa and passport offices in the part of the country that I live in are examples of this. Although these are central services, they cannot be neglected as they touch upon the lives of people in the locality. Does she also recognise that there are big questions about who is going to make the decisions on the money that is to be dispensed by the public service locally—is it to be central, or local government, or some new sources of funding? How is the need of the particular person who is to enjoy the personal budget to be calculated if not by some local organisation which is very closely in touch with the specific circumstances of the individual? I repeat that the general objectives seem unchallengeable but the mode of delivery seems highly opaque.

[Baroness Verma]

I will reassure my noble friend. We are working against a really difficult economic backdrop, and we will have to make some incredibly difficult choices. Having said that, it is also an opportunity for us to open up to a variety of providers and see if services are then better delivered, with best value incorporated into how those services are delivered. As with personal budgets, delivery will not just be left to one set of providers. What is important is working in partnership—in this case, personal budgets and local government. It is about being able to deliver services far better and with greater choice. Those who have access to personal budgets have said to us in consultations that they feel relieved that they are going to be able to make choices on how their care is delivered.

Ministerial and other Salaries Act 1975 (Amendment) Order 2011

Debate between Lord Maclennan of Rogart and Baroness Verma

Tuesday 5th July 2011 Grand Committee

[Baroness Verma]

My Lords, this is an order that my right honourable friend the Prime Minister has specifically requested to formalise in legislation the coalition Government’s policy on ministerial salaries, as announced on 13 May last year. The order was laid before Parliament on 21 March and agreed to in the Delegated Legislation Committee in another place on 21 June.

The order, which is intended to remain in force for the lifetime of this Parliament, will ensure that ministerial and other officeholder salaries are reduced in legislation as they have been reduced in practice since the coalition Government took office. The salaries and offices affected are specified in the amendment order and these salaries cannot be at any other rate during this Parliament without further amendments to the legislation. Lords Ministers can be assured that their salaries will remain as listed in the order until the Dissolution of Parliament.

The Government’s policy is that Ministers’ total remuneration is 5 per cent less than that claimed by equivalent Ministers in the former Government. In the case of Lords Ministers, “total remuneration” in the context of the order simply refers to their ministerial salary. For Commons Ministers, it refers specifically to ministerial and MPs’ pay taken together, with the reduction then applied solely to the ministerial salary element. Since entering office, therefore, Ministers have waived their entitlement to receive a full ministerial salary and have been receiving a reduced salary ever since.

The order also ensures that ministerial and other officeholder pension contributions and future accruals are brought into line with the reduced ministerial salary levels. Currently, Ministers and other officeholders receive reduced salaries but, because of the rules governing ministerial pensions, their contributions have to remain based on their entitled level of salary as set by the Ministerial and other Salaries Act 1975 as it stands. This has meant that departments have had to make up the shortfall in pension contributions between the reduced and the entitled levels of salary for Ministers and officeholders. The amending order will eliminate the need for departments to do this and will save the Government approximately £100,000 per year.

As I mentioned, ministerial and other officeholders’ salaries are currently governed by the Ministerial and other Salaries Act 1975, as amended. The salaries of all Ministers, the Speaker in each House and the six paid opposition officeholders fall under the remit of this Act. These individuals have been informed of this order and the changes that it will make to the Act. Currently, increases to ministerial salaries are linked to the average increase in the mid-points of the senior Civil Service pay bands. This order will effectively nullify the link during this Parliament but it will apply again after the Dissolution of Parliament.

I should point out that over several years ministerial salaries have not, in practice, remained in line with the legislation. Since 2008, Ministers in the former Government had waived any entitlement to increases in their salary. This order will therefore bridge the gap that has grown between the legislation and what is happening on the ground. Given the Government’s policy on a Civil Service and wider public sector pay freeze, it is right that Ministers show leadership during this time of financial constraint. Since taking office, this Government have saved around £700,000 on Ministers’ pay. Over a full five years, this will represent a £4 million saving. I commend the order to the Committee.

[Lord Maclennan of Rogart]

My Lords, I welcome the opportunity that the laying of this order gives to enable some scrutiny of the policy lying behind it.

The practice of making alterations to the levels of ministerial salaries is not new, and particular aspects of this order are worthy of consideration. It is perhaps remarkable that since 1975 there have been 30 previous examples of alterations to ministerial salaries. My noble friend the Minister has made it clear that to some extent this is, on this occasion, gesture politics. It is about signalling to those in the public sector that Ministers are also bearing some of the brunt of the financial situation that the country is in. It has to be said, however, that the savings to which my noble friend has referred are rather minuscule. It might reasonably be inquired as to whether such savings might have been better made by reducing the total number of Ministers, which seems inexorably to have increased over the past 100 years—notwithstanding the devolution of power and the apparent commitment of the present Government to decentralise power further. There has been no shedding of Ministers to accommodate that philosophy.

I wonder whether the setting of an example by Ministers will be regarded by those in the public sector as amounting to anything more than a row of beans, in the light of the fact that large cuts in the public sector are being made among civil servants and public authorities around the country. If savings of public funding can be made at that level, some thought ought to have been given to saving at the top in Whitehall. The question arises of why the Government have taken an inflexible view to this order, which does not match or mirror what has happened in the past? Circumstances change, and it is to be hoped that they will change within the lifetime of this Parliament. To set these proposals in stone, as apparently the Prime Minister has decided to do, does not seem to be a pragmatic approach to ministerial pay.

From the point of view of clarification, I should be interested to know what the true position is concerning the changes in the pension arrangements. My understanding is that this is not intended to be retrospective in its effect and that the raising of the contributions will take effect only when the order comes into force. I should be most grateful for my noble friend’s comments on some of these points.