Members' Allowances

– in the House of Commons at 12:41 pm on 3rd November 2004.

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Photo of Michael Martin Michael Martin Chair, Speaker's Committee on the Electoral Commission, Speaker of the House of Commons 12:41 pm, 3rd November 2004

We now have three hours for the motion on Members' allowances and the two motions on parliamentary pensions. At the conclusion of the three-hour debate, I shall call the amendments to the Members' allowances motion that I have selected to be moved formally; the House will vote on each in turn and then on the main motion on Members' allowances, amended or not, as the case may be. We shall then vote on the two motions on pensions.

My selection of amendments has been posted in the No Lobby in the usual way.

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal 12:51 pm, 3rd November 2004

I beg to move,

(1) That this House
notes the recommendations made in Chapter 4 of the report of the Review Body on Senior Salaries on parliamentary pay and allowances (Cm 6354-I) a copy of which was laid before this House on 21st October;
and is of the opinion that the provisions set out in paragraphs (2) to (5) below should be implemented, subject to any decisions of the Members Estimate Committee with regard to their application.

Staffing Allowance

(2) With effect from 1st April 2005, the Staffing Allowance should be increased to a base level of £72,000, rising to a maximum of £80,460, according to the number of full-time equivalent employees funded from the Staffing Allowance and based in London; and these sums should be adjusted on 1st April each year (beginning on 1st April 2005) in line with the Average Earnings Index for public and private sectors combined.

IT Provision

(3) With effect from the beginning of the next Parliament, the level of provision of IT equipment and support should be increased in line with recommendations 11 and 12 of the Review Body's report (Cm 6354-I).

London Supplement

(4) With effect from 1st April 2005, the London Supplement should be increased to £2,500, and this sum should be adjusted on 1st April each year (beginning on 1st April 2005) in line with the Average Earnings Index for public and private sectors combined; and it should not be payable to any Member who receives the Additional Costs Allowance.

Car Mileage Allowance and Parking

(5) With effect from 1st April 2005, the Car Mileage Allowance should be payable at the same rate as the car mileage rates approved by the Inland Revenue, with the higher rate payable up to a total of 10,000 miles and the lower rate thereafter or as determined in future by the Inland Revenue; and the cost of parking a car, motorcycle or bicycle, if wholly, exclusively and necessarily incurred in the performance of parliamentary duties, should be reimbursed.

Incidental Expenses Provision

(6)

That recommendation 8 of the Review Body's report (Cm 6354-I) be referred to the House of Commons Members Estimate Committee for further consideration.

We have three motions before us this afternoon, the first of which is on Members' allowances, the second and third on parliamentary pensions. Explanatory memorandums on each have been placed in the Vote Office. All three are tabled in response to the report of the Review Body on Senior Salaries—the SSRB's triennial review of pay and allowances, a copy of which was laid before the House on 21 October. The Government are grateful to the SSRB for undertaking the review with its customary thoroughness and expertise. I am sure that hon. Members on both sides of the House join me in thanking John Baker and his team for their hard work.

Let me say a word or two about the status of the SSRB. It is an independent organisation. That the Government, as a matter of principle, put its recommendations to the House is established practice. We ask the SSRB to study specific matters and it makes a recommendation, and it is to our advantage that we take outside and independent advice. I know that the whole House shares that view.

I emphasise that we are not debating Members' pay this afternoon. The SSRB recommended no increase in Members' or Ministers' salaries beyond the normal annual uprating in line with inflation. Personally, I think that that is right. Members' allowances have been the subject of some attention recently. It is understandable that some of the media and our constituents question whether the considerable sum spent on Members' allowances is well spent, but contrary to the lurid headlines, the allowances do not go to line our own pockets: they are essential if we are to function as effective Members of Parliament both at Westminster and in our constituencies, and all claims are within agreed rules.

The position today is very different from the one 20 or 30 years ago, when many Members lived in London, went to their constituency perhaps once a month for the odd surgery, and did not have a constituency office. Our constituents demand a different level of service and it is proper that the House has put in place the resources necessary to support that.

There are five effective parts to the motion. I shall deal with the amendments that you have selected, Mr. Speaker—(g), (h), (c) and (i)—during my opening remarks, if that is convenient. Paragraph (2) is applicable to the staffing allowance. It would implement recommendation 5 of the SSRB's report so that, with effect from 1 April 2005, the staffing allowance will be increased to a base of £72,000, rising to a maximum of £80,460 according to the number of full-time equivalent employees funded from the staffing allowance and based in London. Those sums will be adjusted annually in line with the average earnings index. The purpose is to enable Members to employ three full-time equivalent staff at proper rates of pay and to take account of the increased cost of employing staff in London.

I hope that the House will support the change. The SSRB based its recommendations on extensive analysis of pay rates in comparable jobs in London and outside. Although we must be careful with public money, we must pay our staff a decent rate for the job.

Photo of Michael Spicer Michael Spicer Chair, Conservative Party 1922 Committee

In reference to paragraphs (2) and (6), what does the right hon. Gentleman think is the reasonable minimum number of secretaries that a Member of Parliament should be able to employ in the Palace of Westminster without penalties?

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal

That is a very complicated question and difficult to answer with a simple yes or no. The reason I hesitate to respond is that each Member allocates staff and determines the precise arrangements according to his or her own needs and choices, and I think that that is an important right shared by all of us.

Photo of Ann Widdecombe Ann Widdecombe Conservative, Maidstone and The Weald

I am grateful to the Leader of the House for giving way again so quickly. He did not answer the question asked by my hon. Friend Sir Michael Spicer, but will he answer mine? Does he agree that whether we base our staff in our constituency or at Westminster is a matter for each Member to determine and that the system should be neutral between the two decisions?

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal

I am not sure that I accept the right hon. Lady's point about neutrality, because Members who base all their staff at Westminster do not pay rents and get free heat, lighting, use of the telephone and photocopying, and so on, whereas those of us who have constituency offices—the vast majority, including the right hon. Lady—incur costs there. However, one of the reasons why the motion refers the SSRB recommendation to the Members Estimate Committee, as the SSRB anticipated it might be, is that we would get into a difficult position if there were, in effect, a massive disincentive to having staff employed within the Palace or on the parliamentary estate. We are parliamentarians as well as constituency MPs, and that is an important principle to maintain.

Photo of Patrick McLoughlin Patrick McLoughlin Opposition Deputy Chief Whip (Commons)

Does the right hon. Gentleman agree, however, that in the light of the fact that the expenses and allowances paid to Members are now published, they should be equally and easily understood and able to be judged? Giving different allowances—taking £7,000 off a Member and making extra provision if a Member employs all his or her staff in London—adds to the complexity of already complex rules. Should we not be creating a simpler, more straightforward system that is easy to understand and easily accounted for?

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal

I understand the hon. Gentleman's point. He has gone into the matter in considerable detail. There are enormous benefits in simplicity; on the other hand, the decision that the House took to establish two separate sources of allowance—the staffing allowance and the incidental expenses allowance, which overwhelmingly is directed toward constituency offices, although it can be used for other purposes—had the advantage of ensuring that our employees would not have to compete constantly against demands to buy a computer, or to pay a constituency office bill. We have an obligation to our employees to ensure that they have decent conditions.

Photo of Oliver Heald Oliver Heald Shadow Secretary of State (Justice), Shadow Leader of the House of Commons

Does the Leader of the House share my concern that the proposal on the incidental expenses provision, which the SSRB no doubt made in good faith, is extremely complicated? If the Members Estimate Committee accepts the recommendation, there will, in effect, be four levels of IEP for new Members starting after the general election, and a transitional arrangement with four different levels of IEP applicable to existing Members. Is there not at least the possibility of coming up with a simpler method of dealing with the problem of providing a little extra help to Members who have their offices outside London?

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal

Yes, there is a simpler way—it is described on the Order Paper. On the other hand—the hon. Gentleman and I share common concerns on this, and I shall come on to it in some detail later—the enormous pressure on the parliamentary estate means that we have many different interests to reconcile. The SSRB tried to do that, but recognised that it would involve practical implications beyond its remit. We referred the proposal on the IEP to the Members Estimate Committee so that it could address precisely these issues. It is not the SSRB's fault, but the proposal that came to us had certain rigidities that could have had all sorts of anomalous effects. It is very important that proper consideration be given to that.

Photo of Frank Dobson Frank Dobson Labour, Holborn and St Pancras

The question of pressure on the parliamentary state is certainly outside the SSRB's terms of reference. According to paragraph 4.43 of its report,

"The House authorities wish to encourage MPs to locate their office staff in the constituency."

Who are these House authorities—the men in wigs and tights? They take their authority from Members, and Members have never said that they want that.

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal

I appreciate my right hon. Friend's passion, but the House authorities provide an extremely valuable service for us all in the variety of different functions that they undertake. They have a responsibility to inform the SSRB about a variety of issues affecting the parliamentary estate, including the enormous pressure on it.

Photo of Mike Gapes Mike Gapes Labour/Co-operative, Ilford South

Does my right hon. Friend recognise that the proposals in the report would seriously affect those of us who are outer-London MPs with a constituency office and staff in the House of Commons, as well as a huge amount of immigration and asylum casework? I would have either to sack one of my members of staff or to close down my constituency office.

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal

That is why the motion refers the matter to the Members Estimate Committee, where several such issues will be discussed.

The purpose of my bringing before the House a series of proposals on how allowances should be structured is to allow the House to decide on them. It is for the SSRB to recommend, but for the House to make the decisions.

Photo of Barry Sheerman Barry Sheerman Chair, Education & Skills Committee

What surprises many of us is not that the recommendations came about but that none of us were consulted. I should have thought that consultation of Members of Parliament on their office costs and where they want to locate their staff would have been undertaken before proposals were brought to the House. That would be done in even the most primitive organisation.

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal

My hon. Friend clearly has strong feelings, as have many Members on both sides of the House. I understand that. However, it is not true to say that Members were not consulted. Everybody knew that the SSRB inquiry was going on and anybody could have submitted evidence. At the back of the report there is a list of those who did so. The Speaker's Advisory Panel, which consists of Members of this House, was consulted. The proposal did not come out of thin air. It would not be right to criticise the SSRB, which has done a very professional job in the circumstances.

Photo of David Winnick David Winnick Labour, Walsall North

I employ one member of staff in the House of Commons. Does my right hon. Friend accept that it is disturbing that we are being told how we should go about our business in serving our constituents? It is not up to the body that has made this recommendation, the House authorities, or anyone but ourselves to decide whether we best serve our constituents by having staff here or in the constituency. I happen to have a constituency office. The proposals are simply unacceptable, and it is just as well that the Leader of the House should know that.

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal

As I said, that is precisely why the motion refers the matter to the Members Estimate Committee. I agree that it is for Members to decide how they allocate their different allowances and serve their constituencies. Equally, however, there are constraints. One of those is the amount of accommodation that is available on the parliamentary estate; another is that those of us with constituency offices incur considerable additional costs, which are not incurred by Members who have all their staff located here. We have all sorts of different interests to balance.

Photo of Alex Salmond Alex Salmond Parliamentary Leader (Westminster), Spokesperson (Constitutional Affairs; Treasury), Leader, Scottish National Party

The IEP should not be used to put pressure on staff salaries, which is why they have been kept separate; nor should it be used to pay for overnight stays for Members of Parliament on parliamentary business, which properly come under the additional costs allowance. When the Committee considers these issues, will the Leader of the House bear in mind that the rules for the additional cost allowance were drawn up in 1971 before there was a Parliament in Scotland, a National Assembly in Wales or any other assemblies that might come into being? Costs incurred on overnight stays on parliamentary business involving those places should come under the additional costs allowance.

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal

I noted the hon. Gentleman's amendment, which was not selected. The difficulty is that the additional costs allowance is intended for a very specific purpose: to allow Members of Parliament to have both a constituency home and a London home in order that we can do our jobs effectively. If the ACA were to be redirected to other areas, that would raise issues about the basis on which it is established. The hon. Gentleman may claim under the incidental expenses provision.

The hon. Gentleman refers to the Scottish Parliament. That does not affect me, for example, because I have no constituency interest in going there, although I visit the Welsh Assembly, which, as it happens to be between my constituency and London, does not cause a problem. The hon. Gentleman can continue to press his case, and we will no doubt continue to take account of it.

If I may make a little progress, I shall deal with some of the points that hon. Members have made. Amendment (g), which was tabled by Mr. Page and others, would increase the staffing allowance to £80,460—the amount that the SSRB recommended—for all Members, ending the system of differential allowances for London-based Members and those with their staff based in the constituency, while allowing Members to use up to 10 per cent. of the staffing allowance to fund their constituency office. Linked to that is amendment (h), which would remove from the motion the proposed reference of the SSRB's recommendation on the IEP to the Members Estimate Committee.

I sympathise with the underlying point of amendment (g), which suggests that although Members with staff in London pay out more in salaries for their staff, Members with staff in their constituency may pay out more on office rental and other costs. That needs to be recognised in the funds that are provided.

However, the amendment would not encourage any location of staff to constituency offices. Furthermore, the staffing allowance and incidental expenses provision are each available for specific purposes, as I explained, and there is a logic to ring-fencing them for those purposes. Allowing the staffing allowance to be put towards office costs would be a new departure and would undermine the principle that the staffing allowance should be ring-fenced and available only for the purpose of paying for work done.

Photo of Mr Paul Tyler Mr Paul Tyler Shadow Leader of the House of Commons

The Leader of the House has made much reference to ring-fencing to protect the salaries of staff. We are all sympathetic to that, but does he recognise that since the House introduced standard conditions of employment, with standard salary ranges, that argument has largely disappeared?

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal

I am not entirely sure that it has disappeared. It concerns the principle mentioned by my hon. Friend David Winnick: that it is for each Member to determine, within the acceptable custom and practice that the SSRB and the House rules provide, how to pay staff, whether they are based in the constituency or in London.

Most significantly, amendment (g) would go well beyond the increase in staffing allowance recommended by the SSRB; I am advised that it would cost an extra £2 million to £3 million. I must therefore urge the House to reject it.

Photo of Patrick McLoughlin Patrick McLoughlin Opposition Deputy Chief Whip (Commons)

The Leader of the House says that the proposal will cost an extra £2 million to £3 million. From the SSRB's report, how much will the increase in the incidental expenses provision cost?

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal

I do not have the figures, but the House authorities advise me that it would be an additional cost on top of the proposal that the SSRB recommended. I obviously need to rely on that advice.

Photo of Oliver Heald Oliver Heald Shadow Secretary of State (Justice), Shadow Leader of the House of Commons

Does the Leader of the House accept that the figures are not based on any research? If one examines the proposal for more money for IEP, amendment (g), which proposes instead more flexibility in the staff budget, appears neutral. Has the right hon. Gentleman gleaned some behavioural effect or research from the House authorities that supports the estimate of £2 million?

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal

We all rely on the Department of Finance and Administration, which has great expertise, and it has advised about the figures that I have presented to the House.

I understand the unrest and anxiety, which is why I did not put the straight SSRB recommendation in the form of a motion. Indeed, the SSRB said that its practical phasing and implementation might need further consideration. Had I tabled such a motion, it would have been defeated for all sorts of reasons, some of which have been raised with me. I have therefore given hon. Members an opportunity to reflect, through the Members Estimate Committee, on how we should move forward. I believe that a much better approach would be for that Committee, which you chair, Mr. Speaker, to consider the SSRB's proposal for abating the IEP to encourage the location of staff away from the parliamentary estate.

The Committee will consider the picture in the round, including the interaction between the staffing allowance and the IEP. That is a proper course of action, which will avoid hasty compromises with uncertain effects.

Photo of Ann Widdecombe Ann Widdecombe Conservative, Maidstone and The Weald

I am grateful to the Leader of the House for giving way to me a second time. If his recommendation is accepted and the matter is referred back to the Members Estimate Committee, would not it be appropriate for the House to express a view to that Committee about what it considers to be reasonable basic employment provision, which should not attract penalties? I am sad that my amendment (d) was not selected, but will the right hon. Gentleman at least undertake to ensure that the view of the House is taken before the Members Estimate Committee considers the matter?

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal

The Members Estimate Committee reflects the wishes of the House and can receive representations through the Speaker's advisory panel and ordinary representations. The fact that everything is being conducted so openly allows hon. Members to make their points. I understand the point that the right hon. Lady made in amendment (d), which was backed by many hon. Members from all parties. It relates to my earlier point that I understand the accommodation pressures and the desire on the part of the House authorities for location away from the parliamentary estate to constituency offices. There is enormous pressure, especially through interns, on the parliamentary estate. However, we are parliamentarians—I believe that that lies behind the right hon. Lady's amendment—not glorified social workers. We are parliamentarians in addition to providing a first-class constituency advice and assistance service. I believe that most of us try to provide such a service. Although the numbers have to be determined and have to be proportionate to the availability of accommodation and resources, it is important to sustain the case for locating staff here.

Photo of Nicholas Winterton Nicholas Winterton Conservative, Macclesfield

I have been a Member of Parliament for 33 years and the SSRB report is the first example of a report that seeks to tell Members of Parliament how to organise their offices. That is extremely dangerous. An outside body, with little experience of our work, is advising us on how to do our job. I am grateful that the Leader of the House said that the matter will be referred to the Members Estimate Committee—I shall support that motion. I hope that the Committee will take into consideration the views of the House as expressed in the debate. Will the right hon. Gentleman express some anxiety about the fact that, for the first time, an outside body has sought to tell hon. Members how to organise their offices and the job that they do in the House and in their constituencies?

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal

As I have signalled in the clearest possible terms, I understand the hon. Gentleman's point. However, I must disagree emphatically with any suggestion that the SSRB has operated in an improper fashion. The SSRB is not telling him, me or any other Member what to do. It has provided a set of incentives—whether the House and the Members Estimate Committee accept them or not—to fulfil a set of criteria that it was invited to investigate. They include pressure on the parliamentary estate and the anomaly that hon. Members with staff who are based only on the estate get the whole IEP and do not bear the costs of a constituency office, as, for example, I do. It proposed a recommendation in good faith. We should respect that and I do not accept that it was ordering any of us to do anything. In the end, the House will make the decision.

Photo of Mrs Anne Campbell Mrs Anne Campbell Labour, Cambridge

If the SSRB had not made the recommendations, an entirely different set of people would be in the Chamber, complaining bitterly that it was not advantageous for them to have offices in their constituencies. Many hon. Members do not have staff in the House. The proposal is not as draconian as it appears at first sight. The SSRB also recommended that hon. Members should have computers as well as a laptop for themselves. [Interruption.] If the work station is based here and shared by a member of staff, I presume that it would not count against the £7,500 reduction in the IEP, which would allow hon. Members to have two members of staff here with only one work station. [Interruption.]

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal

I stress to hon. Members that my hon. Friend has done a lot of work on our behalf and her point is about the number of work stations that one can have in order to be allocated the specific provisions under the IEP that the SSRB recommends. Hon. Members can vary the number of staff according to the availability of work stations. That sort of detail makes it important for the Members Estimate Committee to consider the matter in greater depth.

Photo of Frank Dobson Frank Dobson Labour, Holborn and St Pancras

For many years, Members of Parliament decided that we needed to improve the office accommodation for our staff and ourselves. Given that there is now more office accommodation than ever, why has someone decided on our behalf that we should discourage people from letting their staff use the accommodation? Three people work in my outer office. If I get rid of two, someone will continue to use the outer office and there will be no gain. My right hon. Friend says that we should submit the proposal to the Members Estimate Committee, but it will consider a transition towards something to which we have never agreed.

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal

The recommendation has been made precisely because I was aware of the concerns that my right hon. Friend and others have expressed. The Members Estimate Committee will therefore have a chance to examine the proposal in more detail.

Photo of Mark Field Mark Field Shadow Minister

Will the right hon. Gentleman give way on the point that we are considering?

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal

No. I need to answer my right hon. Friend's other points and then I shall give way.

The truth is that this place is bursting. There are already far too many people working here, and it is not the case that we could just fill up our offices with existing paid and unpaid members of staff. Even unpaid members of staff have an effect, through the greater use of catering and other facilities here, resulting in a drain on the House's resources. If we expect other people to be careful about public spending, we cannot simply expand our allowances and accommodation willy-nilly.

Photo of Michael Spicer Michael Spicer Chair, Conservative Party 1922 Committee

The theme running through this debate is that Members feel that they are not being properly consulted, as my right hon. Friend Miss Widdecombe pointed out. Will the Leader of the House give us an assurance that, when the Members Estimate Committee has done its work, the House will have a chance to take a view on its recommendations?

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal

On that specific point, I can say yes. If the Members Estimate Committee comes back with major changes to the way in which the allowance is structured—whether of the exact nature that the SSRB has recommended, or a variation or equivalent of it—of course the House will have to make a decision on them. That is absolutely right.

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal

I shall take one last intervention, then I must make some progress, because I know that other Members want to move their amendments and contribute to the debate.

Photo of Clive Betts Clive Betts Labour, Sheffield, Attercliffe

My right hon. Friend Mr. Dobson talked about the office accommodation that has been provided here. Does the Leader of the House agree that it would be strange, having built Portcullis House a few years ago with specifically dedicated accommodation for staff to work alongside Members, if we were to pass a resolution now to discourage Members from employing any staff to work in that accommodation? There is something slightly not joined up about that thinking.

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal

I will give way to the hon. Gentleman in a moment, because he has been trying to intervene on me. I did something very unusual in the case of this SSRB report, in that I did not just put down the recommendations from the board, because I knew that they would provoke precisely the concerns that have been raised here this afternoon.

Photo of Mark Field Mark Field Shadow Minister

There is a universal dislike of the whole notion of abatement, the reasons for which a number of hon. Members have set out. For inner London Members and those who do not claim the additional costs allowance, who are assumed to have a single base, this whole idea is an absolute nightmare. I saw in this idiotic report—I am not a great fan of the SSRB report—the suggestion that we could somehow get office space at between £8 and £23 a square foot. I should be very interested to see whether the Serjeant at Arms Department could find me or Mr. Dobson anything at that price in our constituencies. Is it seriously being suggested that those of us with constituencies in central London should open satellite offices in Luton, Slough or Reading in order to make ends meet? That really is absolute nonsense.

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal

I am not suggesting that, and nothing that I have said suggests that. This is an independent report, and I hope that, on consideration, the hon. Gentleman will withdraw what he said about it being idiotic. It has been very carefully considered, although whether it has come to the right conclusion on this particular issue is a matter for the House. We asked the SSRB to look independently into the provision that we make for ourselves; otherwise we could just vote whatever we liked for ourselves, without any independent advice, and it is important that we bear this in mind.

Photo of Mrs Anne Picking Mrs Anne Picking Labour, East Lothian

This obscure debate is certainly one-sided. I would like to ask my right hon. Friend and other hon. Members whether they realise the impact of the lack of accommodation in the parliamentary estate. Some Members of Parliament are still working in offices that do not even have windows, never mind accommodation for staff.

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal

That is part of the complexity that we are having to wrestle with. I would like to make some progress now, because I think that I can help the House in the debate that is to follow.

Even if the House were to accept amendment (g), I hope that it will reject amendment (h). I believe that it would still be helpful for the Members Estimate Committee to consider this matter thoroughly; the questions that have just been put to me underline that point.

On the question of information technology provision, paragraph 3 provides that, with effect from the beginning of the next Parliament, the level of provision of IT equipment and support be increased in line with recommendations 11 and 12 of the SSRB's report. In other words, the level of provision of IT equipment should be increased by one, so that each Member has one fixed workstation and one laptop for his or her own use, plus three further workstations, so that each full-time equivalent member of staff paid for through the staffing allowance has his or her own PC, and that each Member should also have two heavy-duty printers. The level and range of IT support offered to constituency offices should also be improved to a level comparable with that offered on the parliamentary estate.

Photo of David Taylor David Taylor Labour/Co-operative, North West Leicestershire

I warmly welcome the two recommendations that the Leader of the House is describing. Does he accept, however, that if we are to have more remote facilities and more support from staff here and elsewhere, the network needs urgent attention to ensure that remote users of the parliamentary data and video network—the PDVN—have an adequate service? It really is not adequate at the moment. The service in the House is not at all bad—I speak as someone with 30 years' experience in the world of information and communications technology—but the remote service is not adequate.

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal

My hon. Friend has raised this matter before. It is precisely for those reasons that the SSRB has recommended extra provision for a local constituency IT service comparable with that offered on the parliamentary estate, provided at local level. The House and I fully accept this recommendation, and I know that the House authorities will resource it.

I believe that Members on both sides of the House will welcome these recommendations on IT, which reflect proposals by the Information Committee. It is important that Members, and Members' staff, should be adequately, although not lavishly, equipped to function effectively in the information age, and particularly to interact better with our constituents. The increased IT support for constituency offices should help those Members who choose to locate their staff away from the parliamentary estate.

Paragraph 4 relates to the London supplement. It would implement the SSRB's recommendation that the London supplement should be increased from next April to £2,500, the same level as the proposed enhancement to the staffing allowance in respect of London-based staff, and that this sum should be adjusted annually in line with the average earnings index. It would also implement the SSRB's recommendation that, in future, Ministers and officeholders should be able to claim the London supplement only if they did not claim the additional costs allowance.

Photo of Mark Field Mark Field Shadow Minister

Does the Leader of the House accept that the conclusion in paragraph 4.35 that there were

"no major concerns about the London Supplement" is odd, given that I have spoken and written to him and his predecessors about the very low level of the supplement? I was particularly disturbed to read that the report stated that

"we did not interview any MPs with inner London constituencies."

On what basis, therefore, can it possibly conclude that the recommendation that the allowance should go up to a paltry £2,500 is credible, given that central London Members have to have a main, rather than a second, London home, when Members who claim the additional costs allowance are claiming at the rate of £20,902 a year? The methodology behind the London supplement is entirely wrong. A figure seems to have been plucked from the sky, which is one of the reasons why I tabled an amendment to the motion, although it has unfortunately not been selected.

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal

I know that the hon. Gentleman wanted to put an alternative point of view before the House. The SSRB did not just pluck the figure out of thin air, as he has implied. It is based on equivalent civil service rates. The additional costs allowance is to enable Members with constituencies outside the London area to provide a proper service and to live in their constituency, which is a central part of modern parliamentary life.

May I make a further point in relation to what the hon. Gentleman has just said? Eight individual MPs gave evidence to the SSRB, including the Opposition deputy Chief Whip, the chair of the Labour party, the Liberal shadow Leader of the House, and many other Members of Parliament[Interruption.] The shadow Leader of the House did, too—we would not want to forget him. Of course, I gave evidence on behalf of the Government, so it is not the case that no evidence was given. More evidence could have been given, including from Mr. Field, because everybody knew the inquiry was going on.

Paragraph (5) is to implement the SSRB's recommendations on the car mileage allowance. It provides that car mileage allowance should be payable at the same rates as the maximum car mileage rates which the Inland Revenue recognises as excluding a profit element. Car mileage will be payable at a rate of 40p per mile up to 10,000 miles and 25p per mile thereafter, instead of 57.7p per mile up to 20,000 miles and 26.6p per mile thereafter, as at present. Those rates will be adjusted automatically in line with the future changes in the Inland Revenue rates.

In part compensation for the reduction in the mileage allowance, and also for the loss of free parking at airports, paragraph (5) makes new provision for the cost of parking a car, motor cycle or bicycle to be reimbursed

"if wholly, exclusively and necessarily incurred in the performance of parliamentary duties".

The Members Estimate Committee and the advisory panel on Members' allowances will be asked to approve the rules for claims. I believe that this change will be widely welcomed.

Photo of Mrs Anne Campbell Mrs Anne Campbell Labour, Cambridge

Will my right hon. Friend confirm that the Inland Revenue recommended rate for mileage allowance has not increased for several years? It has remained stationary.

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal

Yes, I understand that that is the case.

I recognise that the proposed change represents a significant reduction in car mileage allowance and that this will have a significant impact on those Members who are heavily dependent on car transport, particularly those with large rural constituencies. I also recognise that the immediacy of the changes—by 1 April—could put some Members in real difficulties if they have entered into leasing or purchase agreements that go beyond that date.

Sir Nicholas Winterton and others have quite properly tabled an amendment that would freeze the current rate until the Inland Revenue rates catch up with the House rates. That could be many years, however. The effect of the amendment is therefore firmly to reject the SSRB recommendation, which I have put before the House.

Photo of Nicholas Winterton Nicholas Winterton Conservative, Macclesfield

I am putting this marker down now while a number of Members are present. The Inland Revenue rate seems to fail entirely to take into account, as the right hon. Gentleman has said, the size of a constituency and the need for a Member to use his car in that large area to undertake constituency duties. There is no difference between an inner-city seat and a large urban seat, which surely is grotesquely unfair. It could be a disincentive to Members properly and fully undertaking constituency duties and, in some cases, travelling to London when there is not adequate public transport to enable them to do so.

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal

I know the points that the hon. Gentleman is making. I dare say his constituents and mine would want to make the same points if they travelled a lot on business, but may I make this point? Some Members feel that the Inland Revenue rates are too low to reflect the true costs of motoring. The Government do not accept that. The 40p rate, which was set in the Income Tax (Earnings and Pensions) Act 2003, covers the full costs of using a car for business travel for a wide range of types and size of car, including cars that are safe and comfortable for long business journeys. It is advantageous to drivers of small, environmentally friendly cars. It has been set at a level that will not subsidise all the standing costs of owning a larger, more fuel-hungry car, so that it does not encourage drivers of larger cars to drive unnecessary business miles. It is, however, still generous enough fully to cover the marginal running costs of such cars.

In any case, if the House feels that the Inland Revenue rates are inadequate, that is an argument for reviewing those rates, not for diverging from them. I hope that the House will reject the amendment.

Photo of Nick Harvey Nick Harvey Liberal Democrat, North Devon

The Leader of the House has just referred to what the Inland Revenue reckons that 40p covers, which is the marginal cost of using the vehicle, whereas our current motor mileage allowance purports to cover the capital cost of the vehicle as well, so we are considering two fundamentally different things. What is being proposed is a change of policy dressed up as a recalibration of some comparative figures. If we are to debate what is being proposed, we should do so with our eyes open, rather than confuse two completely different things.

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal

The hon. Gentleman makes a valid point, but the SSRB has considered this in the round and considered what applies to our constituents, saying that we should be treated in the same way as they are. That is what it is arguing.

Norman Baker, by contrast, has tabled an amendment that would strike out the proposal to allow hon. Members to claim for parking charges. While I sympathise with his wish to encourage the use of other forms of transport, the fact is that many hon. Members rely on cars in their constituencies and for at least part of their journey to and from this place. That point was made by the hon. Member for Macclesfield.

A problem has arisen in respect of the withdrawal of free car parking provision by BAA, as a result of shareholder action. That has placed a lot of Members of the House who rely on air transport in Scotland, north-west and north-east England and elsewhere in real difficulty, because if they have to leave their cars for the best part of a week a huge additional cost is incurred. I would point out that the provision that we recommend applies to motor cycles and bicycles as well as to cars.

Photo of Norman Baker Norman Baker Liberal Democrat, Lewes

I have looked through the SSRB report and I can find no recommendation relating to parking. Have I missed it or is it a subsequent invention as part of the motion?

Photo of Patrick McLoughlin Patrick McLoughlin Opposition Deputy Chief Whip (Commons)

On the parking issue, previously there was deemed to be an element of profit in the motor mileage allowance. That was one reason for deciding that no allowance should be made when congestion charging was introduced. If we accept this proposal for parking, should not we also accept it for congestion charging if the profit element has gone from the motor mileage allowance?

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal

The Inland Revenue does not provide for congestion charging to be met in such a way. I should say to the hon. Member for Lewes that if the amendment tabled by the hon. Member for Macclesfield is carried, I will recommend that we support it, because built into the costs of the mileage rate of the House of Commons is provision to meet such costs. For example, if I travel across the Severn bridge I pay a toll. I do not think that that should be provided for by the House authorities, because the mileage rate is fairly generous. The same applies to parking.

Photo of John Butterfill John Butterfill Conservative, Bournemouth West

The Inland Revenue figure is for the calculation of tax liability; it is not said that a higher allowance should not be paid by an employer. Simply, if an allowance is given above that figure, it is taxable. That is already the case with Members' existing allowance—it is taxable above 40p. That is a matter for the Inland Revenue to decide, but the fact that this does not accurately reflect modern costs of running a motor car is well known throughout the nation. The AA says that, as do all the motor car magazines that publish the costs of running a motor car. The Inland Revenue point has nothing to do with the real cost of running a car, but it relates to a threshold for taxation.

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal

There is a lot of substance to the hon. Gentleman's argument, but the public in our constituencies are treated by the Inland Revenue in a certain way. [Hon. Members: "So are we!"] Well, we are not, because we get a higher rate than is generally given. Anyway, this is ultimately—[Interruption.] Look, I understand the concerns. For goodness' sake, I acknowledged the concerns earlier by saying that I understand the points that are being made, particularly the sharp change— [Interruption.] Hon. Members ask why I am proposing what I am proposing. It would be a serious departure if the Leader of the House did not put before the House recommendations from the SSRB.

It is for the House to decide what it wishes to decide—that is our sovereign right—but asking an independent body such as the SSRB to look at this dispassionately and then not putting its proposals before the House would be a serious breach with tradition and practice in respect of independent advice from such a body.

Photo of John Greenway John Greenway Conservative, Ryedale

The fact that there is a tension between the amendment tabled by the hon. Member for Lewes and that tabled by my hon. Friend the Member for Macclesfield, which I have supported, shows that the review body's recommendation does not suit all hon. Members. Despite the fact that we could have been consulted on the matter, this recommendation has come to many of us as a complete surprise, out of the blue. It is grossly unfair to those of us with large rural constituencies some distance from London. I agree that the provision can be unfair to people who have to use airports, but surely the matter should be referred back to the Members Estimate Committee if the amendment is not carried.

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal

I understand that point, but I have an obligation to put before the House recommendations from the SSRB. It would be a serious breach of practice adopted by previous Leaders of the House were that not done.

I will now take what must be the final intervention.

Photo of Mark Lazarowicz Mark Lazarowicz Labour/Co-operative, Edinburgh North and Leith

Does my right hon. Friend agree that when Members vote on the matter they should bear it in mind that it is difficult to explain to the public why we are prepared to accept SSRB recommendations when they increase our pay and allowances, but not so keen to accept them when they lead to a reduction? Without wishing to be pious, does he agree that at a time when every party talks about the need to combat climate change, we should at least set some example in relation to the mileage for which we claim and the vehicles that we operate?

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal

Yes, I do. I speak as someone with a large constituency, with large rural areas, who must necessarily incur large constituency mileage in going about my parliamentary duties.

The proposed provision for the reimbursement of parking—for parliamentary duties only—will be fully justified if the House agrees to reduce the mileage allowance as the SSRB has recommended. If the House rejects amendment (c), I hope that it will also reject amendment (i). If the House agrees to amendment (c), however, I shall support amendment (i), and I hope that the House will also do so. That is because the existing car mileage rates include an element to cover parking charges. Amendment (c) on its own would allow double reimbursement for parking costs.

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal

I am sorry but I must stick to what I said earlier; otherwise, like a parent with a—I will not continue with that line of thought. [Laughter.]

Paragraph (6) deals with the incidental expenses provision. The SSRB's report recommends that the provision be increased to a maximum of £27,500, and that the amount that may be claimed by Members should be abated by £7,500 for each permanent workstation occupied by their staff on the parliamentary estate. As the SSRB acknowledges, this recommendation could involve a significant reorganisation of current office arrangements for many Members, or else a significant loss of income. The SSRB states that it would understand were the House to conclude that the recommendation should apply only to new Members and that certain transitional arrangements should operate for currently serving Members. The Government believe that it would be appropriate for the Members Estimate Committee to give further consideration to this matter, particularly in the light of the points raised during this debate and the strong views expressed.

I fully support the principle behind the SSRB's recommendation—we must take steps to relieve pressure on the parliamentary estate, and we must address the current disincentives discouraging Members from basing their staff in constituency offices—but there are a number of other factors to take into account, which the SSRB was not able to address: security, for example, and the administration of House services. The Members Estimate Committee will be able to consider the various factors in the round.

On parliamentary pensions, the SSRB has made two recommendations. I am grateful to the trustees and their chairman for their work on this matter. Before I examine the matter, I want to say on behalf of the House how indebted we are to those Members who serve as our trustees. They have important and wide-ranging duties and responsibilities, and I would like to record my particular thanks to Sir John Butterfill and his fellow trustees for their continued excellent service in running our pension scheme.

The second motion before the House is to implement the SSRB recommendation that the contribution rate for those scheme members who have opted for their pension to build up at a rate of one fortieth of final salary for each year of service should increase from 9 per cent. to 10 per cent. It may be recalled that in 2002, the SSRB recommended that, in the first instance, the contribution rate of members who opted for the one-fortieth accrual rate should increase to 9 per cent. It recommended that the remaining cost of the benefit improvement should be taken into account in subsequent reviews of pay and allowances. That would mean that eventually the full cost of implementation would be borne by Members on an ongoing basis. The Government accepted that recommendation.

The SSRB has now considered the options for recovering the remaining cost. It has concluded that it would be unfair to restrict future pay increases for all Members irrespective of whether they had opted for the one-fortieth accrual rate. It has instead recommended that the contribution rate for those who opted for the improved accrual rate should increase by 1 per cent. from 1 April 2004. It considers that an appropriate step towards recovering the full cost. The SSRB remains of the view that the full cost of the benefit improvement should in due course be borne by Members on an ongoing basis. It intends to take the outstanding amount into account in its next review of parliamentary pay and allowances.

The Government are content with the SSRB's recommendation to phase the recovery of the additional cost and believe that it should be implemented. If the House agrees, I understand that the trustees would propose that the collection of arrears back to 1 April this year should be spread over the balance of the current tax year, so that Members are not saddled suddenly with a huge bill. The Government are happy with that approach.

The SSRB has recommended that the trustees should decide what action to take on the recommendations outstanding from its 2001 report. The main outstanding recommendations relate to the extension of survivor benefits to unmarried partners and the introduction of pensions for life for surviving widows and widowers. The Government's policy is that such benefit improvements could be introduced only if Members are prepared to meet the additional costs. That is consistent with our line on other public service schemes. In 2001, the House expressed its view rightly that survivor benefits should apply to unmarried partners as well as spouses. I have therefore been in discussion with the trustees about how those important provisions can be introduced in a way that is fair to Members and to the taxpayer. The issue of civil partners is slightly different. It is expected that the scheme will be amended to provide benefits for surviving civil partners, and that any additional costs arising from that will be met by the Exchequer.

The Government have noted the observation made by the SSRB in its report that phasing out the favourable early retirement terms in the scheme would be consistent with the Government's policy on public service pension age and might make possible benefit improvements as part of a package. The Government therefore feel that this represents a sensible way forward. The additional cost of providing pensions to partners and not just spouses can therefore be offset and remain cost-neutral by implementing the new retirement provisions.

Photo of Ian Davidson Ian Davidson Labour/Co-operative, Glasgow Pollok

Given that the Leader of the House and several of his Government colleagues have said on a number of occasions that they wish that a variety of hon. Members would go away, is not this change inconsistent, as it makes it less likely that they will do so?

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal

I do not remember any such recommendation from me unless it was in respect of Conservative Members of Parliament. It would be good to see more Labour Members of Parliament in the House. [Laughter.] I am not going down that road, either.

The Government's policy on pension age, first announced in the 2002 pensions Green Paper, is that the rules of public service schemes should be changed to make an unreduced pension payable from age 65 rather than 60.

Photo of Andrew Miller Andrew Miller PPS (Team PPS), Department of Trade and Industry

A uniquely separate set of circumstances applies to Members of Parliament compared with other public sector workers: the trigger dates for our choices are not in our hands but in the hands of the Prime Minister. I note that the motion says that the scheme will be

"phased out for existing members from 1st April 2009".

I see nothing in the Command Paper that defines the methodology in that regard. Will that be subject to a separate resolution, and will there be consultation with the trustees?

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal

There will certainly be consultation with the trustees. I have already discussed the matter with their chairman. There will not be a separate motion; this motion will decide the matter.

All Members are to be allowed to draw pension before the age of 65 on an actuarially neutral basis, not just those with at least 15 years' service. Those who have at least 15 years' service on 31 March 2009 will continue to be eligible for early retirement terms which are more favourable than actuarially neutral. Those who serve beyond 1 April 2009 will not have access to an unreduced pension before the pension age of 65.

Photo of Andrew Miller Andrew Miller PPS (Team PPS), Department of Trade and Industry

So it will not be phased out, as the motion says; it will be ended. Perhaps the motion should be amended accordingly.

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal

It is. I am sure my hon. Friend will understand this. Each individual Member is in a different position owing to differences in age and length of service, so this provision affects them in different ways. I could give various examples, including that of my own position, if that is of any interest.

Photo of Mike Gapes Mike Gapes Labour/Co-operative, Ilford South

Is there not an important difference between introducing changes that affect new Members and introducing changes that affect many Members, including me, in a way that does not involve a right to vote on it as a separate item, and puts us in an invidious position? We will have to vote something down in order to defend our own position, because we can see the difficulties that it will cause us by forcing us either to go very early or to stay until we are about 67. This has not been thought through clearly. Can my right hon. Friend please look at it again?

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal

I am sorry to have to tell my hon. Friend, with whom I have a long-standing friendship, that he should study the detail. His position will not be prejudiced, except in one respect.

We are seeking to bring the House of Commons in line with civil servants and other public sector workers, including my hon. Friend's constituents. We are here by permission of the electorate. There is a real problem if we are saying that because of the ageing society and the cost of providing pensions at the taxpayer's expense—which applies in our case as well—we should have fantastically more advantageous pension conditions than our constituents who work in the public sector. We are trying to bring the Government's changes in line with demographic factors affecting the country.

Photo of John Butterfill John Butterfill Conservative, Bournemouth West

May I explain why "phasing out" is, in my view, an appropriate term? The changes will come into force gradually. As from this November, new Members will no longer be entitled to the early retirement provision. Existing Members will continue to be entitled to the provision until 2009 and possibly beyond, depending on the date of the general election. Some Members who are re-elected after the next general election will continue to be entitled to the existing arrangements, even possibly until the following general election, so it is a phasing process. The motion will enable the trustees to change the rules of the scheme to allow all this to be put in place.

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal

The lucidity of the hon. Gentleman's intervention explains why he is chairman of the trustees and, perhaps, why I am not.

The point is—I think the whole House will understand this, and back it—that the Government are phasing out generous early retirement provisions in the public sector. It would be inconsistent, and would not be understood by our constituents, if we exempted ourselves from these provisions. We must be careful not to cause our own voters to think we are putting ourselves in an extremely privileged position.

The pension age in the parliamentary scheme is already 65, but Members with at least 15 years' service can retire early before that age on favourable terms. Those terms include the ability, often referred to as the "rule of 80", to draw unreduced benefits if they retire early—between the ages of 60 and 65—provided that age plus service totals at least 80.

The third motion proposes a package addressing the issues relating to survivor benefits and early retirement. It would be at least cost-neutral to the Exchequer, which is an important requirement. It proposes the introduction of pensions for surviving unmarried partners of existing active Members, calculated on the same basis as pensions for widows and widowers. I am sure that that will be widely welcomed, as it is in line with the decision already made by the House in principle.

The trustees and the Government Actuary would be involved in working out the detailed implementation of the package, as was mentioned by the chairman of the trustees. In the case of survivor pensions that would include, for example, consideration of what constitutes an eligible partner, and measures to ensure that the provisions remain affordable.

The motion proposes that pensions for widows, widowers and surviving partners of existing active Members should be payable for life, and not cease on remarriage or cohabitation as widow and widower pensions do at present. That is an anomaly, which we are correcting. It also proposes that the favourable early retirement terms should be removed for new Members immediately, and phased out—I insist that that is the correct term—for existing Members from 1 April 2009 or the day after the general election after next, whichever is the later.

That means that anyone retiring at the next general election will not be affected. Nor will anyone retiring at the general election after that. Indeed, by 2009 nearly half of us—48 per cent—will be able to retire immediately and draw our pensions without any reduction. We will either be over 65 or will have served for more than 20 years, and will qualify for unreduced benefits under the rule of 80. A further 17 per cent of us—including me, as it happens—will either be able to retire then and draw our pensions on better than actuarially neutral terms, or have the potential to do so when we are older.

Photo of Clive Betts Clive Betts Labour, Sheffield, Attercliffe

First, will my right hon. Friend spell out more clearly the nature of the residual benefit that will remain after 2009? I do not entirely understand—perhaps other Members do not either—what will happen to those who retain some potential benefit under the existing scheme. Will it go completely after 2009, or will it continue in some form?

Secondly, does my right hon. Friend accept what was said by my hon. Friend Mr. Miller? There is a difference between Members of Parliament and those in other schemes. We cannot go on our 65th birthdays; we have to go on the date of the general election. If people cannot go with reduced pensions before they are 65, my right hon. Friend is effectively saying that the average retirement age of MPs is 67 or 68.

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal

These are complex matters. We already have generous pensions by most people's standards: the whole House will agree with that. It would be very dangerous if we did not put ourselves in line with the retirement provisions that now apply to other public sector workers, let alone those with much less favourable terms.

Let me give some examples of how the arrangements would work. On 31 March 2009, a Member aged 54 who has served for 13.6 years will have given over 15 years' service but will not meet the rule of 80. That Member will be able to draw pension before 65 on favourable terms, but not on an unreduced basis. Let us consider the position of a 1987 entrant who, as of 3 November 2004—today—is aged 55 and has 17.4 years' service. As of March 2009, they will meet the rule of 80 and will be able to draw pension immediately on an unreduced basis, so the scheme will continue. As of March 2009, an older, 1992 entrant—aged 59, for example—with 12.6 years' service will meet the rule of 80 and will be able to draw pension immediately on an unreduced basis. As of March 2009, a younger 1992 entrant, aged 43, with 12.5 years' service, will have more than 15 years' service but will not meet the rule of 80. They will, however, be able to draw pension before 65 on favourable terms, but not on an unreduced basis. So it is not the case that Members will suddenly fall over the edge and get no benefit at all; rather, it is a question of providing for these changes in a proper fashion.

Finally, I note the SSRB's observation that it will be for the Government, in conjunction with the trustees, to consider the implications of the new pension tax regime. The Finance Act 2004 sets out a much-simplified tax treatment of pensions, and I can confirm that that will apply to the parliamentary pension scheme. The Government look forward to working with the trustees on its detailed implementation. I urge the House to vote for these motions, especially those relating to pensions. It is very important that we bring our own practice in line with outside practice, and that we preserve our own conditions in the way that I described. I reiterate the Government's thanks to the SSRB for conducting this triennial review. A respected independent body has recommended certain changes to our allowances and pension arrangements, and I hope that the House will agree to their implementation in the way that I described.

Photo of Oliver Heald Oliver Heald Shadow Secretary of State (Justice), Shadow Leader of the House of Commons 2:01 pm, 3rd November 2004

The Senior Salaries Review Body's triennial review is an important piece of work, and I, too, would like to thank John Baker, the chairman of the SSRB, and its other members, who have clearly worked hard to produce that report. The SSRB has done its work conscientiously for many years, and it is vital that information such as this be placed in the public arena.

In all parts of the House and in the country, it is recognised that Members need services such as staff, postage, transport, and personal and office accommodation, in order to do the job effectively on behalf of their constituents, many of whom come to them for help when they have been turned away elsewhere, or when they have been unsuccessful in their struggle against a particular bureaucracy. We speak often about connecting Parliament with the public, and it is imperative that parliamentarians maintain, and be seen to maintain, the highest standards of probity and adherence to the principles of public life. But it also should not be forgotten that we do a vital job, and that when our constituents most need help, they come to us.

The work and independence of the SSRB has been important in providing the public with an element of reassurance about our accountability. Members of Parliament were first paid in 1911, and our pay levels have always been controversial, primarily because we are one of the few groups with the power to set our own salaries. The mechanism for mitigating this is, and has been since 1970, the objective assessment of a body that is independent and outside Parliament: the SSRB.

Since that time, the SSRB's terms of reference have been revised on several occasions. The development of its role is welcome, but I still feel that there is scope for making the setting of parliamentary salaries more independent, and in particular for finding firm employment comparators for Members—and sticking to them.

On allowances, I welcome the fact that more of the services necessary to Members are being provided centrally by the House authorities. That has already happened with computers, and such an approach is being tested with the travelcard. The move towards pay scales for staff is a further important step in the right direction. However, I have a concern that seems to be shared in all parts of the House, and I wonder whether you also share it, Mr. Deputy Speaker. The SSRB compares us to chief executives of councils and businesses. Such people employ private secretaries, and their costs are treated as something that a council or company would necessarily provide. Nobody ever talks about them receiving "expenses" or allowances in that regard; such things are treated as the tools of the job, not a perk. So I hope that on another day, we can discuss how these matters might be better presented in future.

Photo of Phil Woolas Phil Woolas Parliamentary Secretary

The hon. Gentleman is making a very powerful point, and it might help his case if I remind him that the comparators that the SSRB uses for Members are in fact head teachers of middle-ranking secondary schools and police superintendents. I perhaps wish that it did use the comparator of chief executives of local authorities.

Photo of Oliver Heald Oliver Heald Shadow Secretary of State (Justice), Shadow Leader of the House of Commons

I am grateful to the hon. Gentleman. If he looks a little further into the report, he will see that the managing director of a business is treated as one of our comparators in the private sector, as is a particular local authority grade.

Photo of Patrick McLoughlin Patrick McLoughlin Opposition Deputy Chief Whip (Commons)

My hon. Friend mentioned earlier the supplying of computers. The current situation is wholly inadequate, so will he draw attention to recommendation 12 in the report? It states:

"We recommend that the level and range of IT support offered to constituency offices should be improved to a level compatible with that offered on the Parliamentary Estate."

If Members are to find any way of locating in their constituencies, acting on that recommendation is one of the most important things to do. At the moment, there is a very long way to go, so will he emphasise that that recommendation needs to be implemented?

Photo of Oliver Heald Oliver Heald Shadow Secretary of State (Justice), Shadow Leader of the House of Commons

My hon. Friend makes the point about IT very well. He and I both gave evidence to the review, which focused on the position of Members with outside offices and the need for more help. When we considered the incidental expenses provision, we were looking for an element of help for those with offices outside Westminster, and the complexities and difficulties associated with the SSRB's recommendations are something that we will have to contend with.

On this year's recommendations, I want to thank the Leader of the House for discussing with me the form of his main motion. Of course, these are free-vote matters, but I feel able to offer him a strong measure of support. The pensions changes reflect the SSRB's views and the increased cost of providing parliamentary pensions, and they ensure that the main burden is not placed on the taxpayer. That seems non-controversial, and I want to pay tribute to the trustees of the parliamentary scheme, and particularly to its chairman, my hon. Friend Sir John Butterfill. They have taken the trouble to do so much in terms of training and talking to Members about these issues; indeed, he offered an admirable explanation of the various changes a few minutes ago. The examples that the Leader of the House gave show that such changes are being phased in, and they certainly reflect what is happening in the civil service. I also accept that the salary rate should not increase above inflation.

I accept the motion on Members' allowances, which reflects the SSRB's thinking. However, the recommendations on incidental expenses provision seem over-complex, creating as they do four levels of payment and a six-and-a-half-year transitional period. I am sure that further reflection would be worth while.

I agree with Mr. Dobson that the report seems to contain a large number of references to Officers of the House giving evidence and guidance to the SSRB. It is important that we recognise that, much as we admire their work, they have never run a constituency or party office. Their guidance should be taken into account, but it should not be regarded as the final word on the subject. The principle that those who have an office outside Westminster incur extra costs in providing the services available to Members here seems correct, but establishing non-eligibility to the new payment by reference to how many workstations a Member has seems problematic. A simpler system that retains equality of treatment of Members, but which allows a Member to use part of his salaries budget towards office costs outside London, might well be the way forward. That would also avoid an increase in the incidental expenses provision, while giving an extra element of flexibility within the same envelope. The costs involved should be relatively neutral.

Although there has been some talk of a cost to the House authorities if the change goes through, I do not believe that it is based on any research—I understand that it is not—and it seems to me that unless it has some behavioural effect that has not been described, it should be a relatively neutral proposal. I would like to hear what hon. Members have to say, but I am inclined to support the proposal.

The Leader of the House was right to say that amendment (h) may, on reflection, be unnecessary and it may be worth my hon. Friend Mr. Page thinking more about whether it is necessary. It may be right for the Members Estimate Committee to look further into it.

Photo of Nicholas Winterton Nicholas Winterton Conservative, Macclesfield

Does my hon. Friend not accept that the ability of a Member of Parliament to employ two people within the Palace of Westminster should be entirely acceptable? I have one and a half members of staff here and have done for many years; the half member of staff is shared with my wife. We have one suite of offices and two members of staff in the office between our two individual offices. There should be no disincentive to having—quite legitimately—one secretary and one assistant or researcher. Surely there should be no disincentive to having that level of staffing for a Member of Parliament?

Photo of Oliver Heald Oliver Heald Shadow Secretary of State (Justice), Shadow Leader of the House of Commons

I agree with my hon. Friend and I also feel that it is right for an MP to be able to decide how to run his office within a reasonable band of options.

Photo of Mark Field Mark Field Shadow Minister

Given that my hon. Friend is on the Members Estimate Committee, will he pay some attention to the points that I made earlier to the Leader of the House about the particular strains that inner London Members would face if there were to be an abatement of provision? Will he do his best to ensure that inner London Members and those who do not claim the additional costs allowance and are assumed to have single base will be exempt from any abatement provision?

Photo of Oliver Heald Oliver Heald Shadow Secretary of State (Justice), Shadow Leader of the House of Commons

That point is probably best considered in the context of a more detailed report that my hon. Friend could present not only to me as shadow Leader of the House but to the Speaker's Panel, which plays an important role in advising on matters connected with pay and allowances. That would be the best way forward for my hon. Friend and his important points.

Photo of Ann Widdecombe Ann Widdecombe Conservative, Maidstone and The Weald

My hon. Friend will be aware that my amendment (d) has not been selected, despite gaining 51 Members in support within a couple of hours of being tabled. I am sad about that. My amendment simply said that in referring the matter back to the Members Estimate Committee, we should express the opinion as a House that it is reasonable to employ two members of staff at Westminster. My hon. Friend has just said that he agrees with that, so does he also agree not only that it is reasonable, but that it is the House's view that the Members Estimate Committee should take it into account?

Photo of Oliver Heald Oliver Heald Shadow Secretary of State (Justice), Shadow Leader of the House of Commons

Yes, as I said, but I also believe in a neater approach rather than having so many different rates of IEP, which is the product of the system of abatements. I think that a proposal such as amendment (g) offers a simpler way of proceeding. My preference is to leave the decision with MPs and to have as simple a system as we can. I certainly believe that having four different rates of IEP and a transitional arrangement that creates another four rates of IEP for the next Parliament is not a satisfactory way forward. Having said that, the simple point that the SSRB was trying to reflect in its suggestions—that there should be some extra help for people who have offices outside London—is a good one. Indeed I, my hon. Friend Mr. McLoughlin and the Leader of the House himself made that point in evidence to the SSRB. In translating SSRB support for the concept into a practical solution, there might have been room for a simpler proposal.

Photo of Oliver Heald Oliver Heald Shadow Secretary of State (Justice), Shadow Leader of the House of Commons

Gosh, an "embarras de richesses". I shall give way to my hon. Friend first.

Photo of Mr Jonathan Sayeed Mr Jonathan Sayeed Conservative, Mid Bedfordshire

At some stage during his speech, will my hon. Friend explain to the House why, when we have built a very large and very expensive new office building, we are running out of space and need these proposals? Can he offer the House any figures about how many staff, Officers of the House and so forth are on the parliamentary estate and do not necessarily need to be based here?

Photo of Oliver Heald Oliver Heald Shadow Secretary of State (Justice), Shadow Leader of the House of Commons

As far as Members are concerned, I think I am right in saying that there about 2,500 passes issued for them and their teams. The report refers to about 900, who I assume are paid staff, so there is quite a difference between the number of paid staff on the estate and the number of pass holders. As regards the establishment of the House authorities, I do not have the figures to hand, but we should pay tribute to the staff of the House for the work that they do to support us. Personally, I would not want to criticise them in any way, which I hope meets the point.

Photo of Mrs Anne Campbell Mrs Anne Campbell Labour, Cambridge

I would like to refer to the hon. Gentleman's implied support for amendment (g). He will recall that, a few years ago, staff salary allowances and incidental expenses were not separate. We had an office cost allowance out of which everything was paid. There were reasons for changing from that system to a separate system of staff salaries. It was thought that many members of staff were not being properly paid and did not have proper terms and conditions. I believe that the changes introduced—the Members advisory panel was instrumental in making the recommendations—have had a major beneficial effect on staff pay and conditions in the House. Does the hon. Gentleman agree that amendment (g) takes us back to where we were before those changes were made?

Photo of Oliver Heald Oliver Heald Shadow Secretary of State (Justice), Shadow Leader of the House of Commons

I hope to persuade the hon. Lady. I agree totally that we should have an IEP that provides for the physical costs of an office outside the House and certain other expenses, and that the salaries budget should be separate from it. She will recall that it is possible to use part of the IEP to subsidise staff salaries. That might apply to Members who have an operation in London where staff costs are more expensive.

I believe that amendment (g) provides similar flexibility, applying to Members who might have lower staff costs outside London—the salary scales reflect that—but want to use part of it to subsidise the higher costs of providing an office outside London. It provides an element of equality between the two allowances and means that Members can have the same allowances, which is very important in the context of publishing the allowances. We should not have different rates of allowances if the public are going to see them published: they must be on an even basis. I hope that the hon. Lady will accept that making the change will not weaken the principle at all.

Photo of Michael Spicer Michael Spicer Chair, Conservative Party 1922 Committee

Further to what my hon. Friend is saying, is it not also the case that up to 25 per cent. of the staff budget can already be used for consultancy purposes and for buying services? The flexibility already exists.

Photo of Oliver Heald Oliver Heald Shadow Secretary of State (Justice), Shadow Leader of the House of Commons

Yes, that is a strong point that supports my position.

On amendment (c), which deals with car mileage allowance, it is hard to avoid the logic of the SSRB recommendation that we should receive equality with our constituents. Although I accept the SSRB proposals, I look forward to hearing the arguments of my hon. Friend Sir Nicholas Winterton and others and to seeing how they advance their case. Different circumstances may apply in different constituencies and in different parts of the UK. I will listen carefully to what my hon. Friend has to say, as I always do, and see how much support his arguments gain in the House today.

A crucial element of greater openness has been the detail provided about how Members' allowances are spent and the new publication of those details, which was handled very efficiently by the staff of the House. The old system lacked the necessary transparency and did not provide full information to the public. The publication of allowances has shown that MPs are generally providing a good service and that they need help to do so. I am sure that both sides of the House will join me in that view. Subject to the qualifying points that I have made, I shall support the motions before us today. We should back the recommendations of the review body.

I would have supported the amendment on pooled research facilities, and I hope that it is possible for that issue to be dealt with in some way in the future. It seems wrong that a shared researcher should be treated differently from a person who works directly to an hon. Member. I hope that some consideration can be given to that.

Of course, I shall monitor the strength of support for the various amendments to see whether a compelling case can be made for changes to the Government's plans. I am sure that we will have an interesting and reasoned debate, and I have kept my remarks reasonably brief as I know that many hon. Members want to contribute.

Photo of Mr Chris Smith Mr Chris Smith Labour, Islington South and Finsbury 2:20 pm, 3rd November 2004

I want to concentrate on the SSRB's recommendation on incidental expenses, and especially on the question of abatement for those who have staff here in the House. I have no personal interest in this matter: I am standing down at the next election, so I will not benefit from or be disadvantaged by the proposals. However, I have a very strong interest in ensuring that my successor—whoever he or she is—and those of my colleagues who also represent London seats will not be severely disadvantaged by those proposals.

I shall make five very brief points. First, the proposals in the SSRB report will severely affect those hon. Members with existing staff who have always been based in the parliamentary estate. That is despite, but in some ways because of, the recommendation for a transitional period. The staff to whom I refer have been employed on the basis that this is their place of work. If, even after a period of one Parliament, this place ceases to be their place of work, the SSRB recommendation would amount to a serious change in their terms and conditions of work and could well mean that they have to terminate their employment.

Although having a transitional period is better than imposing such a change immediately, I am not sure that it is sensible for us to create what, in effect, is two tiers of membership of this House. Under the recommendations, some hon. Members would be able to have more staff here, and some would not. That does not strike me as terribly sensible.

Secondly, the provisions in the SSRB report will be very difficult for those hon. Members who represent constituencies in London, but especially so for those with inner-London constituencies. As Mr. Field noted, establishing a constituency office in the City, Islington or Holborn costs much more than it does in many other parts of the country outside London. To assume that the same constituency office allowance will apply both in London and outside it takes no account of the differences in costs, prices, rent and so forth.

Many hon. Members with inner-London constituencies face an especially heavy constituency case load. I have been in this House for twenty-one and a half years. In all that time I have not used any of the allowances available to me to employ any researchers because I have had to devote all my resources to employing people to work on my constituency case load. At present, the number of cases in connection with immigration and asylum is very large for hon. Members with inner-city constituencies—and especially so for those in inner London—but the allowance system does not recognise the additional costs that those hon. Members incur.

Nothing in either the present or the proposed systems recognises the particular difficulties that face London Members. That is why I have always had my staff here in the parliamentary estate, and why I want to ensure that my successor has the same option, if he or she decides that that is in the best interests of constituents.

Thirdly, the SSRB proposal hits permanent staff but not people such as interns or volunteers, who share workstations and do not have their own. If my right hon. Friend the Leader of the House and the review body are worried about pressure on the parliamentary estate because of the number of people using the facilities here, I would gently suggest that the report is aiming at the wrong target. The report hits permanent staff as I have described, but ignores the pressure that arises from non-permanent staff. That seems a rather partial approach to the problem.

Photo of Ian Stewart Ian Stewart PPS (Mr Stephen Timms, Financial Secretary), HM Treasury

My right hon. Friend mentioned the use of interns and volunteers, but does he accept that the use of such people has implications for the resources of the House? They all need to be trained to use the PDVN system, and they have other training needs that take up the House's resources.

Photo of Mr Chris Smith Mr Chris Smith Labour, Islington South and Finsbury

My hon. Friend is right, but I hasten to make it clear that I am not suggesting that it should not be possible to employ interns or volunteers. However, if we are taking a serious look at the pressure on the House's resources, we must accept that the problem is very complex. To assume that the SSRB recommendation is the only answer would be to ignore that complexity.

My fourth point is simple and blunt. Although it does not apply to me, I suspect that it will apply to some of my colleagues, especially those representing seats in London. If implemented, the proposals will involve redundancies among existing staff. That is not something that should be considered lightly, and I am not sure that the SSRB has taken account of the costs involved.

Photo of Ann Widdecombe Ann Widdecombe Conservative, Maidstone and The Weald

The right hon. Gentleman is taking us through this minefield in an exemplary fashion, but does he agree that the recommendation means that some of the most experienced members of staff would lose their jobs? They are the ones who have permanent workstations, and they have been kept here because of their knowledge.

Photo of Mr Chris Smith Mr Chris Smith Labour, Islington South and Finsbury

The right hon. Lady is right. I confess that I can imagine saying that only in very rare circumstances, but she is absolutely correct on this point.

Photo of Mr Chris Smith Mr Chris Smith Labour, Islington South and Finsbury

And on hunting, as the hon. Gentleman says.

My fifth point is perhaps the most important. In seeking to remove one perceived discrimination between hon. Members, the SSRB is in danger of inserting another. Its report seeks to help those hon. Members with constituency offices outside the parliamentary estate, but in doing so it would cause serious harm and difficulty to those hon. Members—and especially to those London Members—with offices and staff on the parliamentary estate. I suggest that, instead of removing one discrimination and creating another, the solution is to help the one category of hon. Member without harming the other.

That is why I shall support amendment (g). I believe that it offers an effective way of ensuring that we provide further support and assistance to those hon. Members with constituency-based offices so that they can run them properly and effectively.

The amendment makes sense, however, only if the incidental expenses provisions are left as they are—not enhanced and not abated. If the amendment is passed, I hope that will be the spirit in which the matter is approached. If it goes to the Members Estimate Committee, I hope that the Committee will take into account the concerns that I and many Members on both sides of the House have expressed.

Photo of Peter Hain Peter Hain Chair, Modernisation of the House of Commons Committee, The Secretary of State for Wales, Leader of the House of Commons and Lord Privy Seal

With the shadow Leader of the House and some other Members, I am a member of the Committee, so perhaps I can offer my right hon. Friend some comfort by assuring him that we will certainly take close heed of the points that he and other Members have forcefully made.

Photo of Mr Chris Smith Mr Chris Smith Labour, Islington South and Finsbury

I am grateful to my right hon. Friend for saying that. I would have expected no less from such an exemplary Leader of the House, but I hope that these serious issues will be considered carefully and that the rather simplistic approach that the review body proposes—albeit to achieve a sensible and fair purpose—will not be seen as the right way forward.

Photo of Oliver Heald Oliver Heald Shadow Secretary of State (Justice), Shadow Leader of the House of Commons

The Members Estimate Committee will take very seriously the points that the right hon. Gentleman is making and will ensure that they are adequately reflected in our discussions.

May I also say that I did not know that the right hon. Gentleman was retiring? We shall all miss him.

Photo of Mr Chris Smith Mr Chris Smith Labour, Islington South and Finsbury

That event will occur only when the Prime Minister decides that the time is right for an election, but I am grateful to the hon. Gentleman for his remarks.

Photo of Mark Field Mark Field Shadow Minister

I am aware that many Members want to speak, so rather than make a speech myself I endorse all that the right hon. Gentleman said about the concerns of London Members. All too often, Members with country seats, perhaps especially in my party, do not understand the burdens to which he referred. In my constituency, which is very like his, there are not only 70,000 electors but 40,000 non-UK nationals. I have 600 live asylum and immigration cases, which puts an intolerable burden not so much on me but on the large number of staff I am required to employ. I endorse the right hon. Gentleman's remarks, as well as those of Mike Gapes, who spoke forcefully on the matter earlier.

Photo of Mr Chris Smith Mr Chris Smith Labour, Islington South and Finsbury

The hon. Gentleman is right. The issues are common to all of us who represent London seats. The pressure is great and it has increased during the whole 21-year period I have been a Member.

Photo of Steve Pound Steve Pound Labour, Ealing North

My right hon. Friend may be choosing to leave the House at the next election but no one could ever describe him as retiring.

On this occasion, my right hon. Friend speaks, as ever, for London, but is he as bemused as I am at a circumstance in which a review body on senior salaries appears to be concerning itself with staff deployment? If there is a problem with staff in the House, should not that be considered in isolation, rather than being spatchcocked into the SSRB report, which will have the most disastrous consequences for people such as my right hon. Friend and me who do not have a constituency office but try to give constituents the best possible service from an office in the Palace?

Photo of Mr Chris Smith Mr Chris Smith Labour, Islington South and Finsbury

I very much agree with my hon. Friend. I am sorry that amendment (d) was not selected, as that would have enabled the House as a whole to give a clear indication of what we regard as a reasonable level for staff based in Westminster. That would not have taken account of the particular problems for London Members, but it would have enabled us to give a general view. As I am sure my hon. Friend will agree, Members, rather than the SSRB, must ultimately decide these matters.

I hope that my right hon. Friend the Leader of the House, the shadow Leader of the House and the Members Estimate Committee will take those points on board if and when they consider these matters. They are serious matters; they affect the standard and quality of the service that we give our constituents.

Photo of Nicholas Winterton Nicholas Winterton Conservative, Macclesfield

On a point of order, Mr. Deputy Speaker. May I seek your help? The debate has just over an hour to run, but Members whose amendments were selected have not yet made a contribution. Will you make a plea to Members to be brief, Mr. Deputy Speaker? Otherwise, there will be no formal presentation of the amendments that Mr. Speaker selected?

Photo of Alan Haselhurst Alan Haselhurst Chairman of Ways and Means

I am not sure that it is exactly correct to say that hon. Members who tabled amendments have so far made no contribution to the debate—that is perhaps why the opening speech from the Leader of the House was so long. However, the hon. Gentleman correctly observes that there is a limited amount of time available, so the Chair will do its best to accommodate as many Members as possible—but their comments must be brief.

Photo of Mr Paul Tyler Mr Paul Tyler Shadow Leader of the House of Commons 2:35 pm, 3rd November 2004

I am delighted to follow Mr. Smith. I listened to him with great care and agree with every word he said. I am not a member of the Members Estimate Committee but I hope that it has taken seriously the issues he raised. I have a particular point of agreement with him, as I, too, can declare a non-interest in most of the matters before us, because I am due to retire at the next general election, which looks as though it will be sooner rather than later.

I want to refer to the principles behind the SSRB report. I accept that it is vital to preserve the principle that our package of remuneration and reimbursement of costs is assessed by an external, independent, authoritative body, just as monitoring and authenticating it is in the hands of rigorous auditing arrangements in the House. However, an equally important principle is that the body must have access to the fullest possible information about the work of parliamentarians. It has become increasingly apparent this afternoon that the SSRB has not been operating on the basis of intelligent analysis of the real work of parliamentarians. Indeed, it has, to a considerable extent, misunderstood the work we do in this place.

The emphasis of the report, especially the elaborate and convoluted section on office costs and the salaries of our staff, seems to suggest that MPs must be encouraged to concentrate our work in our constituencies. We are already under attack for neglecting our core role as parliamentarians—as scrutineers of the Government's legislative programme and of Executive action. If anything were to encourage the media and the public to think of us as overpaid and under-trained social workers, it would be the recommendations of the report, which would push things in that direction. That is a basic misunderstanding of our role in this place.

Within obvious limits, I insist that every Member of the House has the right and responsibility to serve the country and their constituents in whatever way he or she thinks most effective and appropriate. That is critical to the way in which Parliament operates. I fear, as is already apparent from the comments of several Members, that the SSRB does not understand that that is our role.

Photo of Nick Harvey Nick Harvey Liberal Democrat, North Devon

The Leader of the House fairly made the point that Members had the opportunity to give evidence to the SSRB, but, if we were broadly content with things as they were, there was no incentive to do so; only now that we have seen what the SSRB proposes is there any reason for us to comment. Bodies such as the boundary commissions consult after they make their initial proposals. There is more concern about the current SSRB report than ever before, so we must consider the future and ensure that there is a second round of consultation on its proposals before they are signed off; otherwise, we shall be put in the embarrassing position of having to repudiate the recommendations, which we do not want to do.

Photo of Mr Paul Tyler Mr Paul Tyler Shadow Leader of the House of Commons

I am grateful to my hon. Friend for making that point, to which I want to return. As someone who gave evidence to the SSRB, I can speak with authority; there was no evidence from any Member of the House on the vital issue of our role. Nor, as far as I can establish, was there any evidence on mileage. As far as I am aware, no Member of the House gave evidence on those issues.

Photo of Mr Tony McWalter Mr Tony McWalter Labour/Co-operative, Hemel Hempstead

I commend the hon. Gentleman's remarks, but I wish to point out that it is extraordinarily difficult to acquire knowledge about the role of an MP. All our constituencies have hugely different problems and we use our personality and judgment to interact with our constituencies in very different ways. The current rules give us a lot of scope to exercise our judgment, but this report gives us—in my view and, I hope, that of the hon. Gentleman—far less scope to take decisions that will benefit our constituents.

Photo of Mr Paul Tyler Mr Paul Tyler Shadow Leader of the House of Commons

The hon. Gentleman makes an extremely important point. The diversity in the way in which we operate is the result of our very diverse constituencies.

Photo of Mr Paul Tyler Mr Paul Tyler Shadow Leader of the House of Commons

No, because I want to make progress. I know that other Members wish to contribute to the debate.

I wish to refer to a point that the right hon. Member for Islington, South and Finsbury made. It is not an answer to deal with one distortion by introducing another. Two wrongs do not make a right. However, I am afraid that is the whole basis on which the SSRB has approached the issue of staffing.

We should all examine carefully the way in which the SSRB has considered staffing allowances. The report refers to

"modern, high quality, fully serviced accommodation for MPs and their staff . . . available free of charge on the Parliamentary Estate in Westminster, particularly in Portcullis House".

The SSRB then makes a leap to a value judgment. It adds:

"The present system as a whole acts as an incentive to locate staff on the Parliamentary Estate."

That is why we built Portcullis House.

When I first entered the House in 1974 for a very brief interlude, I had the end of a table and no phone. I had to meet my secretary somewhere down in the bowels of the earth. Therefore, to give us a proper opportunity to do our job, we in the House decided—I think with the nation's support—to improve the conditions in which our staff, and perhaps Members, operate. To refer to that as though it is a retrograde step is extraordinary and seems to go right beyond the way in which the SSRB should look at the issue. It may be that the SSRB's extended its remit itself.

Photo of Frank Dobson Frank Dobson Labour, Holborn and St Pancras

The SSRB's report goes on to say:

"However none of the MPS who we met said they had actually chosen to establish office facilities or employ staff on the Parliamentary Estate for financial reasons."

It reached conclusions that are plainly contradictory to the evidence that it took.

Photo of Mr Paul Tyler Mr Paul Tyler Shadow Leader of the House of Commons

It is a fair point, but my basic point is that if we decide that we can provide a good service to the country as a whole—we are not just constituency Members; we are members of the UK Parliament as well—surely we should be given some flexibility. It is extraordinary that it appears as though we will be bribed to spend less time in the facilities in which we have recently invested in this place.

There is another more critical issue. What is the prime function of a Member of the House of Commons? What would Edmund Burke say about the suggestion that we should scatter ourselves throughout the country by spending more time with our constituents and that our staff should, too? That would mean that we would not fulfil our role in the House and such an assumption is way beyond the remit of the SSRB. As I understand it, no Member gave evidence on this issue simply because it did not arise at the time of the original review.

Ministers might be only too happy to see some Government Back Benchers and more Opposition Members spending more time in their constituencies. I understand that the Government did not give evidence to that effect; it was given by those mysterious people—the authorities of the House. It is extremely important that we deal with the issues carefully and consider them in the round.

My Liberal Democrat colleagues will have a completely unwhipped vote on the issue, but I must say that I am attracted by cross-party amendment (g). It is also probably helpful to retain what I think is paragraph 6 rather than to push amendment (h) to a conclusion. However—and it is an incredibly important point—if the Opposition parties are to be denied the resources to do our job in the House properly, I hope that the Government recognise that we shall have to review the Short money; otherwise we will simply be prevented from doing our job properly in holding them to account. In the long run, there will not be a reduction in the taxpayers' provision.

I shall deal speedily with paragraphs 2 and 3 on information technology and the London supplement. They are tidying-up and sensible provisions. They may not be as generous as everyone thinks or would like to accept, but they make good progress.

On car mileage, I recognise that some Members, especially those with large and scattered constituencies such as mine and those who have seen the value of their cars depreciate very quickly as they travel thousands and thousands of miles and way beyond what most people in our comparator occupations travel, have a valid point. Most MPs are now faced with a system that fails to assist with the capital cost of an essential working tool for our job. That is not necessarily the case with some of the comparators.

Sir John Butterfill and my hon. Friend Nick Harvey made a very important point about the tax significance of that additional sum over and above the Inland Revenue rate.

Photo of John Butterfill John Butterfill Conservative, Bournemouth West

Is the hon. Gentleman also aware that it is by no means clear who asked the SSRB to consider this item? In fact, I understand that the recommendation came as a shock to Ministers and the Cabinet Office. They had no idea that it was going to arise, which is why nobody gave evidence. There is just a sneaking suspicion that the provenance of this suggestion may rest with the Treasury at the instigation of the Inland Revenue.

Photo of Mr Paul Tyler Mr Paul Tyler Shadow Leader of the House of Commons

Well, what a surprise! I am grateful for that revelation, because it encourages me in my view that the SSRB has been asked to go well outside its original terms of reference on this issue.

Photo of Mr Paul Tyler Mr Paul Tyler Shadow Leader of the House of Commons

I hope that my hon. Friend will forgive me, but I wish to make progress.

As I understand it, the Inland Revenue rate was decided three or four years ago, even though it was implemented only recently. It completely fails to take into account the considerable increases in fuel costs in recent years. There is a difficulty with that.

It may be that for quite different reasons—for environmental policy reasons or to lead opinion on the issue—the Government recommended that there should be a change. However, I see no logic to the SSRB coming forward with the recommendation. I want a firm commitment that the Inland Revenue rate will be uprated by the time of the next Budget to take into account the additional costs before I am persuaded that the proposal is logical.

Photo of Mr John Burnett Mr John Burnett Shadow Minister, Home Affairs, Shadow Solicitor General, Law Officers (Constitutional Affairs)

I sincerely hope that my hon. Friend means that if the Inland Revenue rate is uprated, that will benefit not just Members of the House but the country generally.

Photo of Mr Paul Tyler Mr Paul Tyler Shadow Leader of the House of Commons

Of course, that is axiomatic. Someone said earlier that we were in a privileged position, but we are not. Everyone is in the same position and we all pay tax on everything over and above the minimal level.

I understand the argument that the incidental expenses provision should be referred to the Members Estimate Committee. That view has some merit. I see from the many issues that have already arisen in the debate that an input from Members, based on their practical experience, would be helpful. However, Members are entitled to know what the remit, limitations and constraints of that investigation would be. Will the SSRB's basic objectives be accepted, and what is the time scale for producing the conclusions and implementing them? What will happen in the interim?

I turn now to parliamentary pensions, and I suppose I should now declare an interest. However, given the convoluted discussion that took place earlier, I am not sure how I am affected. Nevertheless, we are all affected to some extent. I accept that it was unfortunate that the long process to persuade or encourage us to engage in adequate saving arrangements in the late 1990s or the early part of this century meant that, when we eventually got round to improving the terms, the world had moved on. It looked as though we were totally out of synch with comparators in other occupations. That creates a difficulty, and I understand the problem and the suggestion from the Leader of the House and the SSRB that there should be some "phased recovery". I have the greatest confidence in our trustees, but some issues have not been properly addressed.

I hope that the Leader of the House will give us a specific assurance that the situation will not set a precedent for going back on explicit promises made to Members only a short time ago about the way in which the rate of contributions will be handled. The fact that the provision is retrospective and will apply from April 2004 also sets an unfortunate precedent. We usually say that we do not want the House to implement retrospective legislation, and I hope that that situation will usually apply to us. Members will face an effective increase of 2 per cent. because the 1 per cent. provision will apply to only six months in the current year.

I entirely agree with the reasonable and equitable improvements suggested for beneficiaries. However, pensionable age remains a fraught question, and there is no way that we are dispelling worries about that today—[Interruption.] Mr. Miller has obviously indicated that that is the case. We should bring ourselves into line with people in comparable occupations, but, as has been pointed out, hon. Members, especially those in marginal seats, are not encouraged by the leaders of their parties—not even the leader of my party—let alone the Whips, to say on their 65th birthday, "I'm off, friends."

I hope that the Leader of the House will carefully examine the way in which the SSRB was asked to conduct this review. I take up a point made by my hon. Friend the Member for North Devon. The SSRB made a set of proposals that were unrelated to the matters that hon. Members thought were on the table, so there was no consultation on major changes that will affect the way in which we try to serve the country and our constituencies. That has weakened the package—perhaps disastrously. Although I would hope that an SSRB package would normally receive overwhelming cross-party support when debated on the Floor, on this occasion the SSRB has either been let down, or has let us down—I am not prepared to judge which. Yes, it has an important role to play, but it is not right that it should advance principles about the way in which Parliament operates that are outwith its terms of reference.

Photo of Ian Stewart Ian Stewart PPS (Mr Stephen Timms, Financial Secretary), HM Treasury 2:52 pm, 3rd November 2004

I am pleased to be called to speak in the debate. There are 659 Members of Parliament, so the Members' service has 659 different shapes. I speak for myself on the basis of my experience. I can tell you at the outset, Mr. Deputy Speaker, that if I retain the confidence of the people of Eccles at the next general election and they return me to this place, I shall make an even bigger effort to assist the authorities with their future deliberations on the question of what I call the "MPs' parliamentary service" by submitting oral evidence to the Senior Salaries Review Body. That service ranges from a Member's role in the core aims of the service to the way in which the service is delivered across locations. To be frank, I do not think that we do enough to raise public awareness about such matters and although I accept that each individual Member must decide the most appropriate shape of service for his or her constituency, there are overarching issues which the House can, and must, address. Nevertheless, I support the system through which the independent SSRB reviews such issues as Members' pay and allowances.

I thank the SSRB for its comprehensive report. I understand that some members of the body may be in the Public Gallery today, so I hope that the debate will further their understanding of the many varied factors behind the 659 different approaches employed by Members to deliver such a complex and important service. I also thank the body for agreeing to hear my oral evidence in support of the written evidence that I submitted. Although I am pleased that my request to the SSRB bore fruit, I am sad to report that on two occasions, the former Speaker's Panel on Members' Allowances refused my request for a meeting and did not offer any solution to the problem with the staffing budget that I had highlighted. I thus have great hopes that the new Members Estimate Committee will be much more transparent, accessible and responsive to Members.

I had a lively and stimulating session with the SSRB, which I thoroughly enjoyed. As I have given written and oral evidence to the 2001 and the 2004 review boards, I have come to realise that while my motive for attending the sessions was to ensure that the body understood my views, I also gained clarification on, and a better understanding of, the issues that arose from our joint exchanges.

Like many hon. Members, I have an office in Westminster and one in my constituency. I employ 2.5 members of staff, who are individual members of the Transport and General Workers Union parliamentary branch, which is based in the House. I would like to increase that complement to three full-time equivalent workers. As you are aware, Mr. Deputy Speaker, I have deep roots in the trade union movement as a lifelong TGWU member. I take the view that if there is an identified formal job to be done, someone should be employed to do it and paid at the right rate for it. I should point out that although I am a proud trade union member, I have consistently put forward my views on the basis that I want to be a Member of Parliament who is also a good employer. That is imperative if I am to deliver the service that my constituents deserve.

To deliver that service, we need not only good equipment, but caseworkers, researchers and, of course, the much maligned administrators. I welcome the increase in the staffing budget because I hope that it will go a significant way towards enabling us to employ the three full-time equivalent members of staff that the SSRB recommends at decent and appropriate salary levels. I welcome the SSRB recommendation that the extra pay intended for staff based in London be recognised in their pay ranges.

I am sorry to say, however, that the problem with the staffing budget remains. In my submission to the SSRB, I argued for the abolition of the anomalous cap on staff salaries. I said that the numbers of staff allowed, after account was taken of the criteria outlined by the House and proper staff evaluation, would create a natural cap in the existing system, and I remain concerned. When the previous report was produced, the House's Department of Finance and Administration circulated to us, as employers, the recommended salary scales for each grade of staff. However, the increase in the staffing allowance that we have received each year since then has met only the cost of inflation. Although I have been able to give my staff a pay increase to cover rising costs, I have not been able to allow them to progress up the salary scales. If I were to do that as the SSRB and the Department of Finance and Administration intended, I would have to pay staff at less than the appropriate grade for their qualifications, experience and duties, or employ fewer than three members of staff, which I believe provides a lesser service than my constituents deserve.

I doubt that many members of staff are on the top level for posts such as senior parliamentary assistant. The SSRB and the Department of Finance and Administration recommend a rate of £34,300 for such staff based in London. I am certainly unable to pay that amount. I am sure that many of us have experienced and long serving staff, but we just cannot pay them the highest salaries, even when that is appropriate. We do not have the money to do so because the staffing budget has an artificial cap, which means that if an experienced member of staff meets the criteria laid down in the 2001 SSRB report for the highest grade and if the MP, after proper evaluation, agrees to pay that level of salary, he or she must depress the salary levels of the other two full-time equivalent members of staff or alternatively be forced, like me, to consider employing fewer than three members of staff. The system is perverse.

I hope that the SSRB recommendation to increase our staff budget from £66,450 to £72,000 for Members outside London will help us to make progress on the issue. However, the matter requires further investigation and is still to be resolved. I note that the SSRB recommends a review of job descriptions and pay ranges for caseworkers, which I would support. That should give us a firm basis on which to resolve the matter, and I am happy to assist the Members Estimate Committee or any other appropriate body in order to do so.

It is well known that I take an interest in the provision of information technology equipment. The implementation of the SSRB recommendations in 2001 was undoubtedly a significant step forward. I am glad that the board is unequivocal in advocating that every MP should be provided with three work stations in addition to their own, which is an acknowledgement that we need three full-time equivalent members of staff. However, we must address the increasing use of pervasive technology such as modern mobile phones that can be used as mini-computers. As I have told Mr. Speaker, I am happy to carry out a pilot, and I shall contact him separately on the matter. We need a designated MP IT service unit. Every Government and parliamentary department has its own designated IT unit, and it is not acceptable in this day and age that MPs should have no such support or back-up.

Turning to SSRB recommendations with which I do not agree, I appreciate that pressure on the parliamentary estate has led to proposals for hot-desking. As I have already said, there is great pressure on MPs to take on interns and other temporary staff, but hot-desking is not the answer. Caseworkers generally need access to hard-copy information, particularly in immigration and asylum cases. They cannot work just anywhere, if for no other reason than to preserve confidentiality. I am on record as predicting that electronically received constituency casework will increase over the next five to 10 years, which means that MPs will have to employ more staff. However, although e-mail casework is increasing, my constituents are far from emailing me as a matter of routine. Constituents with problems still tend to use a small size of ruled writing paper—so much so, in fact, that I think the pad is passed round the constituency. Our constituents expect confidentiality, which must not be compromised. Hot-desking will not solve the ever-increasing need for space for MPs' services on the parliamentary estate. However, the House must be frank with the public and explain why we need certain resources to deliver a modern and effective service. The more accessible and effective Members' services are, the greater the need for adequate and appropriate resources. We should not shirk that responsibility, and we should be frank with the public.

As the initiator of the "ADAPT" learning project, which has subsequently developed into the parliamentary learning project, I was pleased that the SSRB highlighted the key role of training for staff and, indeed, Members. However, constituency staff are the Cinderellas of the field, so more must be done to allow them access to high-quality training and support. We need to develop the parliamentary learning project to deliver core training for Members' services, including the use of the internet-based distance learning system originally envisaged in 1998.

I shall conclude with a provision that affects our constituencies. I am concerned about the recommendation on the one hand to increase the incidental expenses provision to £27,500 while on the other hand clawing back or slicing off some of that money from Members who employ one or more staff members in London. That detrimental change could lead to a massive deficit that might destabilise our services. My local authority has argued with the Government that a reduction in the overall population does not necessarily lead to a reduction in the cost of providing services. I believe that the same principle applies to Members' services. Once a Member has an office in their constituency, fixed costs for rental and heating apply whether they have one or more members of staff. I also oppose any reduction in the facilities available in the House, as it is self-evident that that is not in my constituents' interests. I hope that my recommendation will be remitted to the Members Estimate Committee so that it can find a more acceptable way forward. I shall therefore support the proposals on the provision of incidental expenses tabled by my right hon. Friend the Leader of the House.

I have not yet addressed the recommendations on Members' pay. The SSRB reports that it received no submissions from MPs proposing that their pay be increased. I gave oral evidence to the SSRB and, on both occasions, I declined when I was asked if I wished to comment on Members' pay. To date, I have been happy with an inflation-proof increase on an annual basis. The next SSRB report is scheduled for 2006, but I thank the board for its present report. While I do not agree with all of it, it is lucid and easy to read. I hope that some of its key recommendations will command the support of the House, and I welcome the fact that it will be referred back to deal with the concerns that I have highlighted, namely hot-desking and the proposals on the incidental expenses provision.

Photo of Mr Richard Page Mr Richard Page Conservative, South West Hertfordshire 3:06 pm, 3rd November 2004

I wish to speak in support of amendment (g). The Leader of the House and my hon. Friend Mr. Heald can relax, as I do not propose to speak to amendment (h) or press it to a vote.

I am exceedingly grateful to right hon. and hon. Members who have supported amendment (g). Like Mr. Smith, I belong to the select band of Members who, after 28 years of service, will not stand at the next election, so I can press amendments without fear or favour. I tabled the amendment because I am concerned that the House is getting into a bit of a muddle. When I leave, I want to be sure that everything is sweetness and light and runs properly. At the outset, however, I should make it clear that I am not critical of the way in which the SSRB has determined its figures. Whatever mysterious method it uses, I have no quarrel with the total sum. However, the money should be divided equally between all Members of Parliament and, as elected representatives, we should take responsibility for the way in which the allowance is spent, subject to approval from Finance and Administration that it has been correctly spent.

I said that the House is getting into a bit of a muddle—after all the years that I have spent here, I recognise a slippery slope when I see one. I am not sure whether the figure of £7,000 is a bonus or penalty, but it is the start of a slippery slope. I am not sure where it will lead, but I fear that it will further diminish the standing of Parliament. I am afeard that that £7,000 will force MPs to do not what they want to do, but what the allowances direct them to do.

Photo of Ann Widdecombe Ann Widdecombe Conservative, Maidstone and The Weald

Will my hon. Friend comment on the farcical situation that would ensue? Members of Parliament would be so penalised by the rule of £7,500 per work station that they would end up—as I would—with insufficient money to pay the rent for their constituency office, which is the exact opposite of the intended effect of the proposals.

Photo of Mr Richard Page Mr Richard Page Conservative, South West Hertfordshire

My right hon. Friend, who had the wit and wisdom to support my amendment, makes a valid point. We must return to a clearer and simpler system, so that we avoid those difficulties. One or two hon. Members have said that the SSRB should stop trying to engineer accommodation in the House and stick to its overall task.

Photo of Patrick McLoughlin Patrick McLoughlin Opposition Deputy Chief Whip (Commons)

Does my hon. Friend accept that another problem with the recommendations in the SSRB report is that, now that allowances are to be published each year, the very fact that certain Members will be able to claim £27,000 in incidental expenses provision while other Members will perhaps be able to claim only £5,000 may give the public a very distorted view of what is being claimed or the benefit that a Member of Parliament is getting?

Photo of Mr Richard Page Mr Richard Page Conservative, South West Hertfordshire

One of the advantages of speaking so late in a debate about one's own amendment is that it will have been trawled and trampled over, and generally explained to everybody to the nth degree. In fact, I wonder why I am speaking to amendment (g) at all. Apart from the Leader of the House, who got himself into such a muddle trying to answer questions about these matters, everybody agrees that the amendment is a good thing. Perhaps I should sit down and leave it at that, but I have never known a Member of Parliament not use some words when the opportunity to do so is available. As my time is running out in this place and this is such an opportunity, I should like to say just a little bit more, but I promise that it will be only a little bit.

The main purpose of amendment (g) is to restore to Members the right to restructure their offices however they think best in order for them to carry out their parliamentary and constituency duties. That is the raison d'être of the amendment. As has been mentioned, prior to 2001 all Members were treated equally with regard to allowances. Many aspects of those reforms were welcome, but in my view they started this very unhelpful trend towards ending the uniformity of allowances for Members and introducing an element of persuading Members, by the allowances that were available, to restructure their offices in a particular way that was not their way, but the allowances' way. The £7,000 would accelerate that trend.

I welcome the greater transparency in laying down and publicising Members' allowances, but I think that, in order to be believable—this relates to the point that my hon. Friend Mr. McLoughlin has just made—those allowances must be made irrespective of where Members' constituencies are and of whether and where they have decided to have a principal office. First, we had extra allowances for Members with London constituencies, and now Members who choose to base their staff in Westminster rather than in their constituency will, if the proposals are agreed to, have their allowances reduced. It is not a fair comparison. We have all had media interest in our various allowances, and we have had it to a greater degree over the past few weeks.

More importantly, I strongly believe that Members should not be subject to financial pressures in deciding how best to structure their offices in order to do the best job for their constituents. They have to stand up in front of their constituents at the election, and I believe that they should not be subject to outside pressures telling them how they should have been running their affairs. As the House will know, the unique nature of each constituency means that there cannot be such a one-size-fits-all arrangement for Members' offices. The Leader of the House accepted that view when he delicately accepted—I was about to say dodged, but perhaps I shall withdraw that—the points made by hon. Members on this matter.

I shall not expand on that point, except to give just one example. On the day when the list of MPs' expenses was published, John Thurso—I did not tell him that I would mention him in the debate, but I do not believe that he will be upset, because what I have to say is in no way critical—said that he had chosen not to have a fixed office in his constituency on account of the huge geographical area that it covers and the distances between its various towns and villages. Instead, he chooses to travel to his constituents and receive logistical support from his Westminster-based staff. If that is the arrangement that he wants, it is the arrangement that he should have. There should be flexibility in the allowance system to enable him to do exactly that. I believe that the review body's proposals would unfairly penalise those with such arrangements.

Photo of Ian Stewart Ian Stewart PPS (Mr Stephen Timms, Financial Secretary), HM Treasury

Does the hon. Gentleman remember that in the 2001 report and the subsequent debate, a special circumstances allowance was referred to? To date, we know of no hon. Member who has applied—I am aware that some have done so—who has achieved any success from that allowance.

Photo of Mr Richard Page Mr Richard Page Conservative, South West Hertfordshire

I am not responsible for who gets or does not get any of these so-called special allowances. I believe that there should be an overall, even amount for Members of Parliament, and that it is for them alone to decide how that money is spent.

In short, Members have widely different responsibilities and constituents' needs, and the allowance should give maximum flexibility in office arrangements. Amendment (g) would be easy to administer and control, and would ensure that responsibility is where it should be—with the Member.

Several hon. Members:

rose—

Photo of Alan Haselhurst Alan Haselhurst Chairman of Ways and Means

Order. Although the length of time for debate is not fixed from the Chair, I am anxious that there are a number of what might be called stakeholders who will expect to contribute to the debate. May I please appeal now for extreme brevity, as we need a winding-up speech at the end of the debate, and there is not a lot of time left?

Photo of Mrs Anne Campbell Mrs Anne Campbell Labour, Cambridge 3:16 pm, 3rd November 2004

I should like to speak in favour of the main motion, which largely reflects the recommendations of the SSRB.

I want also to take this opportunity to pay tribute to the work done by my hon. Friend Ian Stewart in initiating the Adapt project, which has led to some extremely valuable training provision for our staff. My staff have found that training extremely useful and valuable, and it has also been valuable to me as a Member. The work that he did was pioneering stuff, and I congratulate him on it. I assure him that the Members' advisory panel carefully considered his submission to us; although we did not call him to give evidence, that submission was extensively considered, and I am sorry that we were unable to follow through the recommendation.

The amendments raise some issues that I would like to address. I oppose amendment (g), which was tabled by Mr. Page, because I think that it breaks an important principle that was introduced after the 2001 election. The principle was introduced because it was feared that many members of staff were not being employed under proper terms and conditions. The work done by the Speaker's advisory panel and now the Members' advisory panel, which I chair, led to the introduction of a standard contract for all employed staff, standard pay scales and a staff salaries budget, which was ring-fenced, so that it is in no one's interest to pay their staff poverty wages.

Photo of Mr Tony McWalter Mr Tony McWalter Labour/Co-operative, Hemel Hempstead

My hon. Friend makes a good point. I agree with her in principle, but as she heard my hon. Friend the Member for Eccles say, there is now no scope for giving proper increments to experienced staff year on year. As I read it, amendment (g) would allow us to do that very thing.

Photo of Mrs Anne Campbell Mrs Anne Campbell Labour, Cambridge

We are always going to get to a point at which the maximum is reached. It is inherent in the capping procedure that once staff salaries total the maximum, it is not possible to pay increments in addition to inflationary allowances. That is one of the difficulties that we have to accept. Staff turnover is rapid, so one can start new staff at the bottom of the scale and pay increments to other staff, but we all face that difficulty.

Photo of Mr Paul Tyler Mr Paul Tyler Shadow Leader of the House of Commons

Will the hon. Lady accept that if the motion is passed hon. Members will be encouraged to employ interns, partially qualified staff, untrained staff or part-time staff, which she apparently wants to do, rather than maintaining professional staff in the House?

Photo of Mrs Anne Campbell Mrs Anne Campbell Labour, Cambridge

We must all make a judgment on that, but we all understand the importance of employing permanent staff. I would find it difficult to staff my office entirely, or even mainly, with interns and voluntary staff.

Photo of Frank Dobson Frank Dobson Labour, Holborn and St Pancras

A substantial number of hon. Members supplement the existing money for salaries by taking money from the incidental expenses provision. They do so because they like to give increments to staff, some of whom have worked for them for more than 20 years, and because they like to reward their staff, if their staff undergo training. If they continue that practice and exercise their judgment that their staff should be in their parliamentary estate office, they will not be able to do the other things for which IEP provides, because they will have only £5,000.

Photo of Mrs Anne Campbell Mrs Anne Campbell Labour, Cambridge

I understand my right hon. Friend's point and do not pretend that the SSRB's recommendations are entirely satisfactory. I use the example to speak against amendment (g), which erodes the important principle that staff salaries should be ring-fenced. Together with the changes to staff pension arrangements, we have put staff employment on a proper and fair footing, and I do not want to see the erosion of that principle.

It is, of course, possible to transfer money into salaries from IEP, but not the reverse, which amendment (g) would allow, and we should hold fast to that principle. I realise that amendment (g) was tabled for good reasons and that it is simpler than the proposal advanced by the SSRB. However, it is better to increase IEP and allow hon. Members to transfer some of it to staff salaries, which they may do now, than to transfer money from staff salaries to IEP, so I cannot support the amendment afternoon.

On the main proposal, I welcome the modest increase in the staff budget. Paragraph 4.9, table 4.3 in the SSRB report makes it clear that most hon. Members spend all of their staff salaries allowance. I personally welcome the extra, which will enable me to reward my staff a little more generously for what they do. I need to employ my full complement of three staff, all of whom work on constituency casework. I do not employ staff to conduct research here because the casework load is so heavy that I need three staff to do it—I can also find plenty of work for the various interns and volunteers who pass through my office. My staff serve me well—they perform an essential service and are much appreciated by my constituents. However, a new rule to increase IEP for those hon. Members with constituency offices and to reduce it for members of staff based at Westminster would present many of us with a conundrum.

Earlier, I referred to the important question of how workstations would count under amendment (g) towards reducing the allowance. I would certainly base my workstation here in the House, which is where I do most of my work, but I do not use it when I sit in this Chamber, for example, and therefore consider it to be available to a member of staff. That addresses the point raised by Miss Widdecombe about two members of staff being the norm. One could have a staff workstation and a Member's workstation, in which case two members of staff could be employed for about the same IEP as they are currently.

Photo of Ann Widdecombe Ann Widdecombe Conservative, Maidstone and The Weald

This is Monty Python stuff. The hon. Lady's answer is that we should get round the problem not by decreasing the burden on the parliamentary estate but by fiddling how we define "workstation"—forget it.

Photo of Mrs Anne Campbell Mrs Anne Campbell Labour, Cambridge

I object to the use of the word "fiddling". Examining the allocation of workstations is not fiddling.

Amendment (c) concerns mileage allowances, which I have always considered absurdly generous, possibly because I do not own a car and therefore have rarely had the opportunity to claim them. We should encourage hon. Members to use environmentally friendly means of travel, and the private car does not fall into that category. I appreciate that my constituency is small, that I can get around it by bicycle, on foot and by bus, and that many hon. Members cannot do that, but the current mileage allowance is far too high.

I use a taxi when it is raining, blowing or snowing, which makes a bicycle impractical. Ironically, the current mileage allowance pays about one third of the cost of a taxi. We have recently introduced the possibility of claiming the full amount from IEP, provided that receipts are produced, but because I always spend my IEP—in most years, I exceed it by a quite a large amount—I cannot use that solution. If IEP were to increase, it would allow me to use some of my allowance to pay for taxis, when they are necessary.

I appreciate that many hon. Members will be caused difficulty by a rapid reduction in the mileage allowance from 57.7p a mile to 40p a mile, and we must examine how to introduce that reduction gradually rather than very quickly. I do not support amendment (c), because the Inland Revenue rate has not been increased for many years, and I presume that it would take a long time for its rate—40p per mile—to catch up with the 57.7p that we pay Members now.

Photo of John Butterfill John Butterfill Conservative, Bournemouth West

On a point of order, Mr. Deputy Speaker. It is clear that it will not be possible for my hon. Friend Sir Nicholas Winterton to speak to his amendment. Will he be able to move it formally, when time is up?

Furthermore, I shall be unable to say anything about the pension fund, which hon. Members wanted to be explained to them. Can the Leader of the House arrange another occasion for me to do that?

Photo of Alan Haselhurst Alan Haselhurst Chairman of Ways and Means

It is now apparent that not all those whom I identified as wanting to speak are likely to be able to contribute. However, that has no negative effect on the ability to put Questions at the end of the debate.

Photo of Alex Salmond Alex Salmond Parliamentary Leader (Westminster), Spokesperson (Constitutional Affairs; Treasury), Leader, Scottish National Party

On a point of order, Mr. Deputy Speaker. Is it not in order for the Leader of the House to move that the debate be deferred or extended, so that these matters can be decided after having been debated?

Photo of Alan Haselhurst Alan Haselhurst Chairman of Ways and Means

That is not a matter that I can determine. The House determined the timing of the debates yesterday on a motion tabled by the Leader of the House, and I do not think that we shall see any change now.

Photo of Mrs Anne Campbell Mrs Anne Campbell Labour, Cambridge

I was about to wind up, as I have nothing else to say. I shall listen carefully to what others say.

Photo of Nicholas Winterton Nicholas Winterton Conservative, Macclesfield 3:30 pm, 3rd November 2004

I am grateful to be called to speak briefly to my amendment (c). I am not frightened of putting my head above the parapet when I believe that it is necessary to gain justice and fairness for Members of Parliament.

I remind the House that Members of Parliament have entered into leasing or hire purchase agreements on cars, or have found other ways to have the use of a car, and they cannot change such arrangements, which might last for up to five years. I believe that it is unreasonable to reduce dramatically the rate of mileage allowance available to Members from the present rate of 57.7p per mile, which is low compared with what we used to have. The purpose of my amendment is to freeze the allowance at the present rate until the Inland Revenue rate—40p per mile at present—has caught up.

We have already heard that the Inland Revenue rate is based on no understood criteria and has not been increased for a number of years, despite the fact that motoring costs, particularly fuel costs, have increased dramatically in the past four or five years. The Leader of the House knows that in the last two or three months alone the cost of petrol and diesel has increased by 7p or 8p per litre. It would be an injustice not to reflect that in the mileage allowance that Members are able to claim.

Photo of Nicholas Winterton Nicholas Winterton Conservative, Macclesfield

I shall in a moment.

We have agreed to have no increase in salary this year, other than the inflation increase. At April 2003, the median salary of the typical private sector comparator was £68,000, and that of the typical public sector comparator was £65,000. Our salary is £57,500, so our earnings are well below those of the comparators with which we are supposed to be matched. It is therefore unfair that from 1 April next year Members of Parliament face a dramatically reduced mileage allowance, which bears no resemblance to the true cost of motoring. I understand that Members who travel 20,000 miles a year will lose £3,600 from their income. Is that fair? I do not believe that it is.

Photo of Nicholas Winterton Nicholas Winterton Conservative, Macclesfield

I am sorry, but I have been advised to keep going because of the time. I apologise profusely to the hon. Gentleman.

I wish to draw the House's attention to the threshold. My constituency is about 180 miles from London. My wife and I generally, but not always, travel to London by car rather than by train, because doing so enables us to do our job in our constituencies better—we are able to attend more meetings and meet more constituents. Every time we do that journey, we save the taxpayer £380. I get only a modest allowance for travelling by car, so I already subsidise every mile that I travel on constituency or parliamentary duties. I hope that the Leader of the House will say that my amendment will be decided on a genuinely free vote. It is wrong that Members of Parliament should so heavily subsidise their parliamentary activities. I feel very deeply about this. I am delighted that my amendment has received support from the Labour party—the Government party—the Liberal Democrat party, the Democratic Unionist party, and Her Majesty's Opposition: the Conservative and Unionist party.

I ask only for fairness. There has been a huge rise in the cost of motoring. In my constituency, it is 26 miles from north to south and 16 miles from east to west. I attend numerous events. We do not have the public transport that Mrs. Campbell appears to have. I cannot get from the north to the south of my constituency by public transport or, for that matter, by bicycle, unless I spend a huge amount of time that reduces the time available to serve my constituents.

I say this to the Leader of the House: please let us have justice for people who seek to do a good job and to use their car only when it is necessary to do so in support of their parliamentary activities. The Senior Salaries Review Body is abusing its position by interfering in this matter, which has nothing whatever to do with it. Why it did it I do not know. I see the damp hand of the Inland Revenue; that is deeply regrettable.

Members of Parliament have faced the situation that all their allowances were published in the tabloid press and elsewhere—let us give them a fair crack of the whip. I have been in this place for 33 years. I worship this House and believe that it is the best Parliament in the world. Let us not undermine the role of Members of Parliament by undermining their ability to do the job that they are here to do.

Photo of Norman Baker Norman Baker Liberal Democrat, Lewes 3:36 pm, 3rd November 2004

I thank you, Mr. Deputy Speaker, for being so kind in trying to call Members who have moved amendments.

I am afraid that I must disagree with Sir Nicholas Winterton, although I do so with respect for his position. He says that motoring costs have risen substantially, but Department for Transport figures show that they have decreased by 4.8 per cent. since 1997. I do not agree that 57p is the appropriate rate for mileage. The recommendation in the report is right on environmental grounds. Paragraph 4.51 explains why the rate was chosen and says that it includes depreciation, which was mentioned by my hon. Friend Nick Harvey. It states:

"We received no evidence to justify why MPs should be entitled to a more advantageous rate", and that it

"sets a bad environmental example by encouraging and rewarding car use."

If Members feel disadvantaged, they have, as the Leader of the House said, the option of switching to a cleaner, greener car. I endorse his view. I hope that he will have had some sway with his colleagues, and that if amendment (c) is carried, he will support my amendment (i).

The proposal on parking charges was not in the report but was subsequently inserted into the motion. There would have to be strict controls on how that is applied. For example, it costs £40 a day to park in short-term parking at Heathrow airport. No doubt Members could make the case that that was necessary in the performance of their duties, but it would not be good value for the taxpayer.

I will not take up any more of the House's time, although there is a lot more that I could say. If amendment (c) is accepted, I will move amendment (i).

Photo of John Butterfill John Butterfill Conservative, Bournemouth West 3:39 pm, 3rd November 2004

The trustees and I support the amendments that relate to the pension fund. We agreed to the increase in Members' contribution when we changed the accrual rate. The increase of 1 per cent. goes one further step—almost all the way—to paying for that. Perhaps when the next actuarial valuation is made, a further increase will not be necessary. However, we shall not know that until the Government Actuary's Department conducts its valuation.

The package of measures that relate to pensions for widows, widowers and surviving unmarried partners and the payment for life of pensions to widows, widowers and unmarried partners is generally available throughout the country in pension schemes in the public and private sectors, and I fully support it. The need to make that cost neutral influences the idea that we should forgo our early retirement rights. I suggested that in a debate when we discussed forces pensions. It is right and proper that we should fall into line with what is happening elsewhere in society and in the public sector.

The change needs to be phased in, however. The Government's proposal would lead to a process of phasing in which I shall try to explain briefly. For new Members of Parliament, there will be no right to retire before the age of 65 without a diminution calculated by the Government Actuary. All existing Members will have some benefit. Those who retire in 2009 or the day after the general election after next will not be affected. After that, there will be a sliding scale whereby the actuarial factor is diminished to take account of Members' length of service so that they will not pay the full actuarial reduction but some actuarial reduction, tempered by a table that my fellow trustees and I, together with the Leader of the House and the Government Actuary, will construct. We will send full details of that to all hon. Members as soon as they are available. However, no existing Members will have a full actuarial reduction if they retire before they are 65.

Photo of Alex Salmond Alex Salmond Parliamentary Leader (Westminster), Spokesperson (Constitutional Affairs; Treasury), Leader, Scottish National Party 3:42 pm, 3rd November 2004

I understand that time is pressing. With the exception of the contribution of Sir John Butterfill, whose expertise I respect, much of the rest of the SSRB's report is a dog's breakfast. I believe that that is due to a lack of familiarity with some of the detail of the allowances. The Leader of the House would have been better advised to refer the SSRB report in its entirety, rather than only one aspect of it, to the Members Estimate Committee. That would have been better for the treatment of the recommendations and, I suspect, for the outcome.

I want to speak for one minute on a small matter. It is frustrating that I have failed to get it progressed. Perhaps it is a symptom of our treatment of such issues that something so minor has not been progressed. The SSRB defines the additional costs allowance as it is described on the House of Commons website. It states that the purpose of the allowance is

"To reimburse Members for costs incurred when staying overnight away from their main home whilst performing Parliamentary duties."

However, the additional costs allowance was brought into being by a motion in December 1971 and defined specifically as being for parliamentary duties in London or the constituency. At that time, there was no National Assembly for Wales or Scottish Parliament. For a small number in the north of Scotland and perhaps in rural Wales, it is often physically impossible to carry out parliamentary duties with Scottish or Welsh Ministers or, indeed, Westminster Ministers when they are visiting the relevant Parliament, without staying overnight, away from home.

The Fees Office solution, which is bound by a previous resolution, is to tell Members to claim out of their IEP. However, it is clear from the SSRB report that IEP is not designed to pay for Members' overnight expenses. The additional costs allowance should do that. I am not asking for an increase in the allowance, merely for the ability to claim from the correct allowance for meeting a Minister in the Scottish Parliament or the National Assembly for Wales instead of being told to claim from an allowance that was not designed for that purpose.

This affects a very small number of Members, but I would have thought that it was a very simple matter to resolve. I had a meeting with the Leader of the House last year to attempt to progress it, and I find it highly frustrating that something so simple, so clear and so obvious cannot be done to bring the House up to date in regard to its expenses provision. I strongly suspect that, if the SSRB were more familiar with the nature of our allowances, it would have had no objection whatever to my proposal. I therefore hope that the Members Estimate Committee will, if the House decides to charge it with considering these matters, introduce this minor amendment. It would make life for a few Members much easier by bringing the allowances into line with what they were originally intended to do, and by bringing them into terms with reality.

Photo of Phil Woolas Phil Woolas Parliamentary Secretary 3:45 pm, 3rd November 2004

I thank all the right hon. and hon. Members who have contributed to the debate, not only this afternoon but in the extensive work that they have done before. Members such as Sir John Butterfill and my hon. Friend Mrs. Campbell have put in a huge amount of time and effort on behalf of us all—often without thanks, as we have seen this afternoon. I thank them and all the other Members who have taken part.

I emphasise that, as this is a House matter, this will be a free vote for Back Benchers on this side and, I know, on the Opposition side—[Interruption.] If hon. Members will be patient, I shall explain. My right hon. Friend the Leader of the House has a duty to put forward the recommendations of the independent report from the SSRB, which the House commissioned. He cannot cherry-pick, should not cherry-pick, and has not cherry-picked the recommendations. This is an independent report and it is presented to us to ensure that the integrity of the House is maintained.

I want to go through some of the arguments in favour of the motion and against the amendments—[Interruption.] If Mr. Bercow would stop chuntering, he might find that he has some sympathy with what I have to say—[Interruption.] He is chuntering and chattering, as is normally the case. As I was saying, it is incumbent on us to put these recommendations before the House. As the Leader of the House acknowledged, there is some difficulty in regard to the recommendations on incidental expenses provisions. The SSRB report recognises that some of the matters that it has been asked to deal with—it is the House that asked it to do so—go beyond the remit of considering Members' pay and allowances. Of course, there is an interaction between office accommodation, incidental expenses and staff allowances. It is also a fact—a harsh one—that the parliamentary estate is very crowded, and that has to be taken into account.

Mr. Tyler made the point that there was discrimination under the current system. His worry was that the proposed new system would introduce another kind of discrimination, and that two wrongs would not make a right. That is exactly why my right hon. Friend the Leader of the House has asked for a deviation from the SSRB recommendation in this one regard, by asking the Members Estimate Committee to consider this matter. He has done so because the matter is not exclusively about salaries and allowances.

Amendment (g), which has the advantage of simplicity, has been supported by hon. Members on both sides. It contains a carrot, in that it would redress the discrimination against those Members who lose out by not having staff on the parliamentary estate, but it does not provide the stick, in terms of an incentive to bear down on the staff. I am not arguing that it should do that, or that it should not. I am pointing out that the choice has been put before the House. Hon. Members should bear in mind the fact—as the House authorities, the Leader of the House and I have to—that none of these things come without a cost. We do not know the exact cost of amendment (g), but we estimate it at between £2 million and £3 million. However, we must acknowledge in our deliberations the fact that we are in a unique situation in deciding our own pay and allowances. I am grateful for the indication that amendment (h) will not be pushed to the vote.

On mileage, Sir Nicholas Winterton has pointed out the shock impact of the proposal, in that Members who use cars will lose money. On the other hand, the House has to balance whether it wishes to accept the independence of the SSRB report and the fact that our mileage allowances are better than those for members of the public. If there are problems with the Inland Revenue rates, I suggest that hon. Members take that up with the Government and the Inland Revenue, not make special pleading for their own case.

On pensions, which are perhaps the most important point, it is clear that the increase in the fund is provided by Members' contributions. This is not feather-bedding by the Exchequer; Members' salaries pay those contributions, which sets a good example. However, I believe that we have a moral, as well as a political and financial, obligation to accept these recommendations that the trustees all supported.

It being three hours after the commencement of proceedings on the motion, Madam Deputy Speaker put the Questions necessary to dispose of proceedings, pursuant to Order [2 November].

Amendment proposed: (g), in line 9, leave out from first 'to' to 'and' in line 11 and insert—

"£80,460 for all Members with up to 10 per cent. of the Staffing Allowance being available to fund a Member's office in his or her constituency.".—[Mr. Page.]

Question put, That the amendment be made:—

The House divided: Ayes 239, Noes 109.

Division number 307

See full list of votes (From The Public Whip)

Question accordingly agreed to.

Amendment proposed: (c) in line 25, leave out from 'With' to 'and' in line 28 and insert—

'immediate effect, the annual uprating of the higher and lower car mileage rates shall cease; with effect from the date on which the Inland Revenue higher car mileage rate first exceeds the higher car mileage rate payable to Members, the higher rate car mileage allowance payable up to a total of 20,000 miles to Members should be payable at the same rate as the higher car mileage rate approved by the Inland Revenue, and with effect from the date on which the Inland Revenue lower car mileage rate first exceeds the lower car mileage rate payable to Members, the lower car mileage allowance payable to Members should be payable at the same rate as the lower car mileage rate approved by the Inland Revenue.'.—[Sir Nicholas Winterton.]

Question put, That the amendment be made:—

The House divided: Ayes 118, Noes 193.

Division number 308

See full list of votes (From The Public Whip)

Question accordingly negatived.

Main Question, as amended, put and agreed to.

Resolved,

That this House notes the recommendations made in Chapter 4 of the report of the Review Body on Senior Salaries on parliamentary pay and allowances (Cm 6354-I) a copy of which was laid before this House on 21st October; and is of the opinion that the provisions set out in paragraphs (2) to (5) below should be implemented, subject to any decisions of the Members Estimate Committee with regard to their application.

Staffing Allowance

(2) With effect from 1st April 2005, the Staffing Allowance should be increased to £80,460 for all Members with up to 10 per cent. of the Staffing Allowance being available to fund a Member's office in his or her constituency; and these sums should be adjusted on 1st April each year (beginning on 1st April 2005) in line with the Average Earnings Index for public and private sectors combined.

IT Provision

(3) With effect from the beginning of the next Parliament, the level of provision of IT equipment and support should be increased in line with recommendations 11 and 12 of the Review Body's report (Cm 6354-I).

London Supplement

(4) With effect from 1st April 2005, the London Supplement should be increased to £2,500, and this sum should be adjusted on 1st April each year (beginning on 1st April 2005) in line with the Average Earnings Index for public and private sectors combined; and it should not be payable to any Member who receives the Additional Costs Allowance.

Car Mileage Allowance and Parking

(5) With effect from 1st April 2005, the Car Mileage Allowance should be payable at the same rate as the car mileage rates approved by the Inland Revenue, with the higher rate payable up to a total of 10,000 miles and the lower rate thereafter or as determined in future by the Inland Revenue; and the cost of parking a car, motorcycle or bicycle, if wholly, exclusively and necessarily incurred in the performance of parliamentary duties, should be reimbursed.

Incidental Expenses Provision

(6) That recommendation 8 of the Review Body's report (Cm 6354-I) be referred to the House of Commons Members Estimate Committee for further consideration.