Parliamentary Commission for Administration and Health Service Commissioner for England

Bernard Jenkin Excerpts

Monday 18th July 2011 Commons Chamber

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

I do not intend to detain the House for long. However, with my colleagues’ permission, I would like to place one or two points on the record. In particular, I would like to join the tributes paid to the existing ombudsman, who has done such a fantastic job over so many years. Ann Abraham has stamped her authority on the office of the Parliamentary and Health Service Ombudsman. In particular, she fought a gallant battle over the Equitable Life issue. I am pleased that in the end it was resolved amicably between her and the Government. No one can say that she did not change the course of history on that question, as she has on so many minor issues that are equally important to the people concerned.

Ann Abraham will continue in office until the end of this year. She gallantly gave notice in good time that she wished to step down to give us time to decide not just to appoint a successor but how to appoint one. Traditionally, under legislation, the appointment is made by Her Majesty the Queen on the recommendation of the Prime Minister and with reference to a resolution of both Houses of Parliament. However, traditionally, the appointment process has been handled entirely by the Cabinet Office. Quite early in the process, the Public Administration Committee made it clear that we thought that this was no longer a process that reflected the present times and that Parliament should be much more at the forefront of this procedure. I am grateful that the Government readily conceded this point and handed the whole process over to the House of Commons.

I am extremely grateful to those who took part in the appointment process, notably the Principal Clerk of Select Committees, the permanent secretary at the Department of Health, Una O’Brien, who was the Government nominee on the panel, Professor Alice Brown, who is a former public service ombudsman in Scotland, David Prince, who was the external assessor appointed by the Appointments Commission, and myself. I am pleased to tell the House that we reached a unanimous decision in favour of Dame Julie Mellor. We had a strong field of acceptable candidates from which to choose and many of them were capable of doing the job, but Dame Julie Mellor has an outstanding record of achievement in the public and private sectors.

In particular, Dame Julie Mellor excelled as chairman of the Equal Opportunities Commission between 2005 and 2009. I can assure the House that we are fortunate to have her. That judgment was confirmed by the pre-appointment hearing conducted by the PAC on 6 July, which was chaired by a colleague on the Committee, the hon. Member for Luton North (Kelvin Hopkins). I absented myself as I had served on the panel and therefore had a conflict of interest. I wanted to ensure that the Committee had a free run in making its own judgment about the ombudsman. Again, she received unanimous approval from the PAC, and I am sure that the House will wish her well in her appointment.

Perhaps the more important issue to raise, however, is the ombudsman’s remuneration. As the hon. Member for City of Durham (Roberta Blackman-Woods) pointed out from the Opposition Front Bench, we have slipped into the habit of aligning the ombudsman’s salary with that of a High Court judge, which was appropriate, because, like a High Court judge, the ombudsman has the right to summon persons and papers to resolve the issues before her. However, in the interests of pay restraint, and with the Prime Minister’s salary in mind, the Government have set about trying to re-evaluate the correct salary for quite a large number of public appointments.

The Committee was, shall I say, distressed that the ombudsman’s salary was caught up in that general process. The difficulty that we had in arguing for the status quo was that the Parliamentary Commissioner Act 1967 makes no reference to a High Court judge; rather, it says that the salary should be fixed to that of a permanent secretary. Unfortunately, unlike in 1967, when the legislation was passed, the salary of a permanent secretary is a moveable feast these days. Their salaries extend from a little over—or even a little under—£100,000 to well over £200,000. Fixing the salary to that of a permanent secretary has now become an arbitrary process, although we did not feel it right for the Government simply to take the matter into their own hands. The Government were determined that we should advertise the post with a salary range that we describe in our report on the remuneration as “arbitrary”, and we are distressed that we were left in that position.

The current ombudsman has been clear that de-linking the ombudsman’s salary from that of a High Court judge leaves the office vulnerable to the charge that it is being downgraded by the Government. The office used to be analogous to that of the Comptroller and Auditor General, who now earns a significantly higher salary than the ombudsman. At some stage this matter will have to be addressed, but, as the hon. Member for City of Durham said, the most invidious part of the process is that the ombudsman, having been approved by the panel and agreed by the Government in principle, then had to negotiate her salary within the range offered by the Government, which was between £152,000 and £172,753. We did not feel it right that someone who will be responsible for holding the Government to account on behalf of complainants should have to negotiate her remuneration with the very Government whom she should be regulating. Having discussed the matter with one of two others in prominent public positions who had found themselves in the same situation, I can state that the Committee is entirely right to have concluded that this is an entirely unacceptable basis on which to proceed.

[Charlie Elphicke (Dover) (Con)]

It is a great pleasure to serve on my hon. Friend’s Committee. I would like to hammer home the point that the function of the ombudsman is analogous to that of a High Court judge, in that the ombudsman acts as a large-scale arbiter and provider of justice. As such, it is right and proper that the ombudsman’s salary should be on a level equivalent to that of a High Court judge. Does my hon. Friend agree that the appropriate course is for the Minister to listen to this debate, go away and reconsider the matter?

[Mr Jenkin]

I have great sympathy with my hon. Friend’s comment, but the Committee concluded that it would be wrong to upset the arrangements that the new ombudsman had negotiated with the Government. To her credit, she did not argue the toss. She simply said, “I want this job, I want to serve Parliament” and decided that, for her, the remuneration was not significant. However, it is instructive to quote what she told the Public Administration Committee during her pre-appointment hearing. On whether it was right to downgrade the job and to negotiate her own salary, she said:

“I have to say that I do not think it has been a satisfactory process, and I have found myself making the principled argument…around what the criteria should be for determining the pay, and I do not think as an individual I should have been put in that position.”

The Government, having accepted that principle, are addressing the matter, but I have spoken about this matter with such force because it raises questions about every single public appointment that the Government make, and the independence of the appointments is at stake.

I am bound to tell the Minister that, on the advice of the Public Appointments Commissioner, we shall return to the way in which public appointments are made in a future inquiry, because we think that the use of the Prime Minister’s salary as an arbitrary benchmark for salaries for positions such as these is neither a scientific nor a reasonable basis for making such appointments.

[Robert Halfon (Harlow) (Con)]

Like my hon. Friend the Member for Dover (Charlie Elphicke), I served on the Committee that interviewed Dame Julie Mellor, and I agree that she gave an outstanding interview. Will my hon. Friend the Member for Harwich and North Essex (Mr Jenkin) acknowledge that she is taking a substantial pay cut to take on the job of ombudsman?

[Mr Jenkin]

My hon. Friend is absolutely right. Since Dame Julie ceased to be chair of the Equality and Human Rights Commission, she has been working in the private sector and earning substantially more than she could ever hope to earn in the public sector. For that reason, she felt that she was going to take a pay cut anyway, and the differences that were being argued about were not worth any suggestion of compromising her independence. She has argued, however, that she should never have been left in that position. This also has a lesson for other appointments—particularly, perhaps, that of the chair of the United Kingdom Statistics Authority. In that instance, with a more limited field of candidates, the Government’s preferred candidate has withdrawn her name, so we shall have to go through a reappointment process. Perhaps if the right salary and conditions had been set at the outset, rather than being arbitrarily cut by the Government, we would not now be facing that situation.

I wish to be charitable to the Government, however. I thank them for addressing this matter, and they have agreed in principle that these things should be done differently next time. They have agreed that the salaries should be decided between the Chair of the Public Administration Committee and the Prime Minister before the recruitment process starts, so that when the position is advertised there is no question of the candidate having to arbitrate his or her salary after the appointment has been made.

In closing, I invite the Minister to recognise that this is the system that is effectively being put in place for the Comptroller and Auditor General, and that the salary should be agreed between the Chair of the Public Accounts Committee and the Government. Should not this also be reflected in the legislation for the ombudsman? The “Open Public Services” White Paper, which was published last week, suggests that the Government will amend the powers of the ombudsman in respect of tendering for public services, and there might well be other changes to the office of the ombudsman in the next year or two, particularly with regard to public access to the ombudsman, which at the moment is not general but is confined to health service complaints. Does the Minister agree that it would be preferable for stability in the salary to be reflected in legislation, to protect the independence of the position in future, rather than relying on horse trading between a Select Committee and the Government, which is how we have to proceed at the moment? I invite the Minister to give us some assurances on those points this evening.

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[Mr Jones]

There is—and quite rightly. Because of previous Governments’ and this Government’s pegging of MPs’ pay, many people, even some quite low-level local government workers, are earning considerably more than us. In terms of the process that we are addressing however, it is important that the ombudsman is independent of, and cannot be influenced by, Government. We have a slightly different relationship with the individuals to whom the hon. Gentleman has referred.

These measures were all brought in on the basis of pay restraint. A lot has been said about trying to cut senior salaries. I have already mentioned the Auditor General’s pay, and there seems to be some inconsistency across Government about where this restraint should apply. If we are going to make exceptions, I cannot see why things were changed here, as opposed to, say, for Bernard Gray who was appointed Chief of Defence Materiel at the Ministry of Defence by this Government on a salary of £250,000 a year, plus a potential bonus of £30,000. I know that that is a very important job; it delivers equipment to our armed forces. I have no objections to Bernard, either; I know him well, and he is a very fine individual. However, if the decision was taken to break the principle of the Prime Minister’s salary being the ceiling in that case, I do not understand why the Government have intervened in that way in this other case.

The Prime Minister’s letter of 21 June reveals a lot about the attitude to pay restraint policy. I do not think he has understood the process. What we are doing here is going away from quite a well-thought-out system to one that has now brought into doubt whether not only current Ministers and Governments, but others too, could influence these areas in future.

[Mr Jenkin]

I think that the hon. Gentleman will find that when he served as a Minister, civil servants received performance-related pay and quite substantial salaries. Indeed, larger salaries were probably offered to public officials than the current Government are offering. I am therefore not quite sure what his complaint is. Does he now recognise that the Government have conceded the principle of what he is arguing in the wording of their motion, in that in future the salary will be agreed between whoever holds my office of Chair of the Select Committee on Public Administration and whoever is Prime Minister

“in advance of the recruitment process”

starting, so there will be stability in the salary at the outset of the recruitment process? I am therefore not quite sure what the hon. Gentleman is arguing with the Government about now.

[Mr Jones]

The hon. Gentleman has not won a great victory here, because he has no powers of determination now in respect of the existing salary, unless he is going to be able to go back and negotiate—be the shop steward—on behalf of the ombudsman each year to increase her salary. A mechanism would be better.

What is the difference between this instance and the cases of other individuals—such as the MOD example that has been given—in terms of the pay restraint policy that the Government are introducing? Another problem is where to start in terms of the salary band. As the motion says, the individual would get an increase, but that will be forgone at the moment.

[Mr Jenkin]

Is the hon. Gentleman seriously suggesting that we should have come back to the House of Commons, with the new ombudsman having negotiated and agreed her salary at the current level, demanding that the House of Commons vote for a higher salary than she has agreed? In these straitened times I think that the British public would have found that difficult to understand. Starting from now, we have come up with a much better solution to sort this out for the future without embroiling the new ombudsman in a silly controversy that would have distracted from the seriousness of her office.

[Mr Jones]

The hon. Gentleman cannot have it both ways. He cannot say that he is objecting to the arrangement and that he has obtained some kind of victory for the future when he has not. I am sorry to say that what was wrong was the fact that the Government intervened by imposing an arbitrary cap and then saying to the ombudsman, “Sit down and negotiate your pay.” He has obtained something for the future but it is not going to affect the starting salary or the situation now. He is asking whether it would have been wrong for his Committee to have suggested something, but it could have proposed a mechanism that would have possibly increased a larger salary. If it is okay for Bernard Gray at the MOD to be paid £250,000 a year plus bonuses, why are the Government not having consistency across the board? This is a very important job, as it involves independence from the Government and from Parliament, and it is wrong for the Government to be interfering.

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[Sir Peter Bottomley (Worthing West) (Con)]

The hon. Member for North Durham (Mr Jones) has spoken in a way that has interested the House. If I say that he has managed to say in 23 minutes what he might have said in three, I hope he will take that as a compliment.

The essential point of the second motion is that the pay of the parliamentary ombudsman should be set in advance. There is a lack of clarity about whether that will be done before the appointment is advertised. Today, if the motion goes through, I shall be voting for the first time in 36 years for something that I think is seriously wrong. It is wrong to advertise a post and then negotiate with the person who is chosen and reduce the pay after the appointment has been offered. That is wrong. One can understand why the Government might have done it, but that does not make it right. Controlling spending is necessary, but to do it after an appointment has been offered is wrong.

I could say that many more times, but the fact is that this decision is one thing the House has done that is equivalent to what happened when Elizabeth Filkin was chosen to be the Parliamentary Commissioner for Standards. Her number of days was reduced, her pay was reduced, her appointment should have been renewed because in those days it was not a non-renewable appointment, and in her last week this House agreed to pay her the £30,000 she had been underpaid during her years of service. If I may make a remark about a former holder of the office of Chair, when the former Speaker said in her memoirs that she did not approve of the commissioner or of some action, I thought that was wrong as well.

[Mr Jenkin]

I feel compelled to intervene on my hon. Friend because I do not think it is accurate to say that the Government cut the salary after the post had been advertised. They notified the House of Commons that they did not wish to pay as much as the existing salary and the recruitment panel was left in the invidious position of wondering how to advertise the post. The strong advice we received was that we should advertise a fixed salary, but the Government would not allow us to do so. We advertised based on the existing salary, but that was qualified and the candidates were informed during the recruitment process that it was subject to alteration. It was not a satisfactory process, however, so the spirit of what my hon. Friend is saying is absolutely right.

[Sir Peter Bottomley]

I am grateful to my hon. Friend and I congratulate him and the Government business managers on finding a motion that could get through the House. The essential point remains however—I think I am right in saying this—that the salary negotiation took place after the person had been chosen, and that is wrong. Although I was not part of the process, I understand that the candidates were strong and that almost any of those who were well-qualified to be chosen could probably have decided to take the job at no pay if it had been advertised at no pay because it is an important position of public service to the people of this country and, indirectly, to improve the government of the country. The essential point is that we should never again start negotiating with someone who has been offered a job in competition by saying, “At what level will you do it?”

My hon. Friend the Member for Harwich and North Essex (Mr Jenkin) referred to the UK Statistics Authority, whose report was published today. The report rightly says that its aims, with the Office for National Statistics, are respect—I do not think that aim has been met in this case—and working together to make a difference, which is true. Another of its aims is being proud of what has been done and always trying to do it better. In terms of trying to do things better I am not sure that, without a framework, it is correct for the Prime Minister and the Chairman of the Public Accounts Committee to decide rates of pay. We need to have a framework and then we can say, “This is what it would appear to be—it should be up or down on that.”

I ought to have started by saying that I approve of the selection of Dame Julie Mellor and that I would have approved of the selection of any of those on the shortlist because I agree with my hon. Friend the Member for Harwich and North Essex that any of those who got to the shortlist could have been appointed with honour and distinction. However, let me make a less important point. Motion 9, which is being taken with the lead motion, refers to the rate of pay which is

“subject to (a) any relevant increase for Permanent Secretaries recommended by the Senior Salaries Review Body and (b) after the end of the current pay freeze, 1 per cent. annual uprating in lieu of performance pay”,

and it goes on to things we have discussed already. I do not think those conditions are right. We ought to say that the rate of pay for someone holding that office should not change at all, as with Members of Parliament between general elections. We ought to say that, although there might be some inflation or even deflation, the rate of pay for someone holding a position that goes from appointment to a point at the end of service, or, as for us, from one general election to another, should remain the same. I do not think that 1% in lieu of performance pay dignifies the office, is necessary or makes sense, but that is not to be amended.

[Mr Jenkin]

I share my hon. Friend’s concern about this but the problem is the legislation, which allows the salary to be determined only in relation to that of a permanent secretary. That is why I invited my hon. Friend the Minister to give an assurance that we will, at the earliest opportunity I hope, update the legislation.

[Sir Peter Bottomley]

I shall conclude my remarks by joining in the praise for Ann Abraham and the way she has fulfilled the job, and I look forward with anticipation to Dame Julie Mellor’s doing the same.

I do not think anyone in the House thinks it was the Minister’s idea to get us to this position, although he might have helped us out of a difficulty. I hope that he will say to ministerial colleagues that it would be better to get my hon. Friend the Member for Harwich and North Essex, as Chairman of the Public Administration Committee, and others together to create a framework so that we avoid any possibility of dropping ourselves into such a mess again. I leave aside the fact that Dame Julie Mellor is female and that the House has a record of saying to people, “We’re going to change the terms of the job and a woman will do it.” There are other times when I may be more explicit about such things, but there is an opportunity to say here, with approval for Dame Julie Mellor and disapproval for the way we got ourselves into this fix, that we expect the Government to take on their responsibility and, with others, find a way of resolving it for the future.

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[Mr Hurd]

That leads me on to my next remark. The Government have reviewed the way the process was conducted and have been quick to accept the Public Administration Committee’s recommendation that for future appointments to the role, the remuneration arrangements should be agreed between the Prime Minister and the Chairman of that Committee before the start of the recruitment process. This commitment is reflected clearly in the Government’s motion.

My hon. Friend has raised the possibility of using any legislation coming out of the Government’s recently published open public services White Paper to enshrine these new arrangements in statute. As he knows, the Government’s proposals in relation to the ombudsmen set out in that White Paper are at an exploratory stage, and it is too early to know what may be required in terms of legislative reform, but the crucial point is that the Government are committed to these new arrangements going forward and that commitment is clear from the terms of the motion. Subject to the outcome of that debate, should a suitable legislative opportunity arise in the future, the Government will give serious consideration to enshrining the new appointment and remuneration arrangements in statute.

[Mr Jenkin]

rose—

[Mr Hurd]

I am grateful to hon. Members for their contributions to the debate about this important role. I commend the motions to the House.