Members’ Salaries

Lord Young of Cookham Excerpts

Monday 21st March 2011 Commons Chamber

[The Leader of the House of Commons (Sir George Young)]

I beg to move,

That the following provision shall be made with respect to the salaries of Members of this House—

(1) For the period beginning with 1 April 2011 and ending with the relevant day, the rates of—

(a) Members’ salaries, and

(b) additional salaries payable to Members under Resolutions of this House in respect of service as chairs of select or general committees, shall be the same as those salaries as at 31 March 2011.

(2) In paragraph (1) the “relevant day” means—

(a) the day before the day on which the first determination of Members’ salaries by the Independent Parliamentary Standards Authority comes into effect, or

(b) 31 March 2013,

whichever is the earlier.

(3) Paragraphs (9), (10) and (12)(b) of the Resolution of 3 July 2008 (Members’ Salaries (No. 2) (Money)) cease to have effect on the day this Resolution is passed.

(4) The remaining provisions of that Resolution cease to have effect on 1 April 2011.

We move now to MPs’ pay. [Interruption.] Mr Speaker—

[Mr Speaker]

Order. I apologise for interrupting the right hon. Gentleman. I fully understand that right hon. and hon. Members are not that interested in hearing speeches about their own pay, but I hope that as a courtesy to the Leader of the House those Members who are disinterested and inclined to leave the Chamber will do so quickly and quietly, so that those who wish to hear the Leader of the House can do so.

[Sir George Young]

The whole House will be keenly aware of the country’s difficult financial situation, and both sides of the House accept that we have a substantial structural deficit, which must be brought down. The Government have had to take difficult decisions throughout the public sector, including imposing a two-year pay freeze on public sector workers earning more than £21,000. Hon. Members must now decide whether their constituents would welcome Parliament exempting itself from that policy and thus insulating itself from decisions that are affecting households throughout the country, or whether, as I believe, the public expect their elected representatives to be in step with what is being required of other public servants. I believe that it is right for us, as Members of Parliament, to forgo the pay increase that the current formula would have produced.

[Mr Edward Leigh (Gainsborough) (Con)]

I quite agree that Parliament should not exempt itself, but I was under the impression that we were never going to vote on our pay again.

[Sir George Young]

I will come in a moment to the point about whether we should overturn the decision that we took in July 2008. Let me briefly set out the background. On 3 July 2008, the House agreed a new formula for uprating Members’ salaries, which is what I think my hon. Friend was referring to. The annual percentage increase would be the median of a basket of public sector comparators, and this percentage would be calculated by the Senior Salaries Review Body and notified to you, Mr Speaker, in a letter from its chairman. That percentage increase would then take effect automatically from 1 April.

That system has considerable advantages. It provides a fixed uprating formula so that we do not determine our own salaries. It is transparent, as the formula and the SSRB’s determination are there for everyone to see. It is also fair in that it provides a link between the salary of a Member of Parliament and the salaries of others in the public sector. Those are the virtues that the Government usually believe should underpin any system for determining our salaries—independence, transparency and fairness. We have therefore not taken lightly the decision to set aside the pay increase and thereby abandon the formula.

As I said, the Government’s decision to invite the House to agree to a pay freeze is the product of the difficult fiscal situation in which we have to find significant cost savings across the public sector. As my predecessor as Leader of the House, the right hon. and learned Member for Camberwell and Peckham (Ms Harman), said in the 2008 debate:

“given that MPs are paid from the public purse, we should show the same discipline in our pay increases as we expect from the public sector.”—[Official Report, 3 July 2008; Vol. 478, c. 1062.]

[Jim Dowd (Lewisham West and Penge) (Lab)]

The right hon. Gentleman is a decent fellow, but this is not quite the full story. The full story is that no Government have ever resisted the temptation to poke their nose into this business. We have set up mechanisms, to which the hon. Member for Gainsborough (Mr Leigh) referred, and said that they should be independent and we should go along with them, and then when it suits the Government of the day—not just this Government but any Government—they change the rules. That completely undermines any claim they make to believe in independent mechanisms. Either we come forward with what the independent review mechanism says, or we do not. This Government, like their predecessors, are poking their nose in where it does not belong.

[Sir George Young]

I should like to address very directly the hon. Gentleman’s point about the independence of the review that we are overturning. He rightly says that by bringing this motion before the House, a Government are once again asking Members to vote on their own remuneration—something that we believed we had put behind us. He asks the very good question as to why we are asking the House to reject the independent findings of the SSRB and whether the SSRB is unable to take on board issues of the kind that I have been talking about. The short answer is this: the system that was introduced in 2008 provided an objective mechanism for determining our pay, but it was a long way from being independent. The formula was devised by the previous Government and endorsed by the House, and in no sense could it be said to be independent.

For those, like the hon. Gentleman, who say that we are substituting our own judgment on this issue for that of the independent SSRB, I remind the House of what the chairman of the SSRB, Sir Bill Cockburn, said in his letter to you, Mr Speaker, on 19 January. He said:

“I should emphasise that the SSRB has no discretion in making this determination but simply applies the formula set out in the Resolution. We were not consulted when the Resolution was drawn up. The resulting figure is not what the SSRB would have recommended had we been able to have regard to all the circumstances including, this year, the Government’s pay freeze for public sector workers paid more that £21,000 a year.”

In a nutshell, the SSRB is saying that if its hands had not been tied by the House, it would not have recommended the 1% pay increase that came before us in January. If the hon. Gentleman looks at the pay recommendations for other professions published today by the SSRB and the Review Body on Doctors’ and Dentists’ Remuneration, he will see that no uplifts are recommended for those earning more than £21,000.

[Mr Graham Allen (Nottingham North) (Lab)]

The Leader of the House is making a convincing argument that the SSRB, or whichever independent body we choose, should be more independent, not less. What he is doing tonight, of course, is renationalising the terms and conditions of MPs’ salaries, which is going in exactly the wrong direction. Does he accept that this matter will go on and on, and that MPs will be undermined consistently by the media and the public until we have a wholly independent authority that does not come back to this House or to the Government for a final decision?

[Bob Russell (Colchester) (LD)]

We do not want IPSA.

[Sir George Young]

I say to the hon. Member for Nottingham North (Mr Allen) that that is exactly the process that we are moving towards, although it will disappoint the hon. Member for Colchester (Bob Russell). I will now come to what happens next.

[Mr Peter Bone (Wellingborough) (Con)]

What I do not understand from the Leader of the House is, if this increase is based on an average of public service salaries, are we not simply getting what the rest of the public services are getting?

[Sir George Young]

If my hon. Friend looks at the comparator, he will see that it includes a number of people who earn less than £21,000 and that, crucially, it includes settlements that were made before the last election. To that extent, it lags behind the public sector pay freeze that we announced in the Budget.

To answer the point raised by the hon. Member for Nottingham North, the 2008 resolution also requires the SSRB to conduct a review of Members’ salaries in the first year of each new Parliament. By rescinding the resolution in its entirety, the motion removes the requirement for the SSRB to conduct such a review this year. The review of Members’ salaries will instead take place following the commencement of section 29 of the Constitutional Reform and Governance Act 2010, which will transfer the determination of our salaries to IPSA on a statutory basis. As I said at business questions last week, the Government intend to commence that section shortly. If, in future, the House wants to overturn any recommendations, it will require primary legislation, not a 90-minute debate such as we are having this evening.

[Mr Mark Field (Cities of London and Westminster) (Con)]

Given the self-denying ordinance that the Leader of the House is proposing today for salaries, will he give a commitment that he will bring in primary legislation to ensure that there will be no increase in allowances for the next two years under IPSA, or is this the same old story that we have had in the past of holding the salary in a blaze of glory, and turning around and seeing allowances increased?

[Sir George Young]

There is no intention of doing that.

The Government’s policy is to have a public sector pay freeze for those earning more than £21,000 a year. Members of Parliament clearly earn more than that. I think that it would be unacceptable for those earning just more than £21,000 to have no increase and for Members of Parliament earning three times that sum to get a salary increase of about £650. That is why I think it is right this evening to ask the House to freeze our salaries. I very much hope that the House will approve the motion in my name and that of the Deputy Leader of the House.

[Mr Speaker]

I have not selected the amendment, so the Question is as on the Order Paper.