Cities and Local Government Devolution Bill [HL]

Lord Storey Excerpts

Monday 22nd June 2015 Lords Chamber

[Lord Heseltine (Con)]

My Lords, I am on the side of the councillors. Giving rough figures, I can say that the chief executives of our bigger authorities earn something of the order of £200,000 or £250,000 a year. They are by any standards in the top decile of income groups in the areas that they administer. The leaders of the councils—this relates to the suggestion from the noble Lord, Lord Shipley, about the highest pay—who are there for seven days, for 24 hours, suffer the utmost strain and have to deal with every crisis get between £30,000 and £50,000, or something of that sort. What conceivable rationalisation is there to think that we can run the components of our economy—the great cities—by limiting the remuneration of the people in charge to one-fifth of what the executives get? Of course, it is not just the executives; within the apparatus of these great conurbation authorities, a stack of people will earn more than the leaders.

I come from the breed of the despised politician, as everyone in this House does. I know that we should all pay for the privilege of giving our services and we would still be from the despised breed of politician. But if we are going to start this thing properly, can we not get some sort of international comparison as to what people could reasonably expect to earn from one of the most responsible and exciting jobs on offer—running a great city? There is no amendment that I would wish to support, but when this matter comes back on Report perhaps we can look at what can be done to address this fundamental imbalance.

An argument that I would pose in favour of such a new look is that, if you expect someone to earn £40,000 for an enormously testing and strenuous job, what sort of person are you going to get? Anyone who is trying to make a career for themselves as a young, enterprising person is going to say, “If I give everything, my family is going to live in a very modest way because I am never going to be paid in the public sector anything like what I could earn in the private sector”. You cannot blame the breadwinner in a family for therefore concluding that this is not for them. But of course there are the rich and the retired, who have pensions and who have accumulated whatever resource is necessary, or who have inherited money. They can do it—and I am not in any way precluding them from doing it—but I do not think that they should have a monopoly on the easy choice. Then there are those whose company or whose union will subsidise somebody to do it—and I have no objection to that. I believe that people should be able to earn remuneration outside their chosen profession. But by every definition that you introduce into this, you narrow the choice: first, you will not pay anything like the going rate that ought to be paid for a job of this sort, then you constrain the candidates who can come forward.

I fully appreciate that it is no use leaving this matter to local people, because they will come under the same sort of pressure from the media—the envy and all the stuff that characterises the debate. The solution that I would put before your Lordships for consideration is that there should be a linkage, either with a Minister of State in government or with a senior Civil Service grade. That would go a long way to meeting a reasonable expectation of reasonable remuneration for this vastly exciting job.

[Lord Storey (LD)]

We have heard wise words from my noble friend Lord Shipley and the noble Lord, Lord Heseltine. I am very nervous of combined authorities setting up independent panels. I am nervous of their make-up. Who is going to decide their members? We are going to see differences between different combined authorities in different parts of the country. If we are going to have leadership of these combined authorities, we have to make sure that nobody feels that they cannot go forward because they are financially restrained.

I vividly remember becoming leader of Liverpool and the remuneration being considerably less than I was receiving in my professional job. I could not afford to do the job full-time because of that, so I worked in my professional job and did three days, two days, two days, three days, and it was absolutely killing. It was not the right way to lead a city. Just so nobody complains, any proportion of my leader’s allowance I gave to charity, so I was not making anything on the deal. However, that should not be the case. We should make sure that we have some mechanism, and the solution from my noble friend Lord Shipley and the noble Lord, Lord Heseltine, is the way forward.

[Lord McKenzie of Luton (Lab)]

My Lords, this has been an interesting short debate. Our starting point is to favour the amendment moved by my noble friend Lord Smith of Leigh for there to be an independent panel. I accept that there are issues. The noble Lords, Lord Shipley and Lord Heseltine, made points about making sure that it is truly independent, and there is no reason why that independence could not take account of international experience as well. A potential issue about the linkage is that the role of the mayor will not necessarily be constant and homogenous between different authorities. Sometimes the function of the mayor might be the full Monty, as it were, but sometimes it might be much less so. Therefore, we are going to have to have some form of assessment if we are going to do that fairly. It is reasonable for there to be further thinking around this.

Linking pay to the pay of the highest-paid leader of a constituent council could be a route, although in a sense what this amendment says is, “The Secretary of State decides but it must be no larger than”. That seems to put the onus back on the Secretary of State, so the principle we would support is some independent assessment, taking account of the real value of the job. I entirely accept that this would be a very powerful and important job.