Oral Answers to Questions — Prime Minister – in the House of Commons at 5:45 pm on 4 November 2009.
Votes in this debate
David Gauke
Shadow Minister (Treasury)
5:45,
4 November 2009
I beg to move Amendment 57, in Clause 40, page 20, line 20, at end insert-
'(10) All remuneration, allowances and expenses in relation to P must be published monthly online.'.
In relation to the clause and the amendment, P refers to the Comptroller and Auditor General. As we have heard, the reform of the governance of the CAG has largely been driven, or provoked, by the difficulties regarding Sir John Bourn's expenses. As the Chairman of the Public Accounts Committee said, there was a sticky patch. The amendment would address that in perhaps the simplest way possible-by introducing much greater transparency.
There is obviously a sensitivity with regard to the CAG's remuneration and other expenses, given that his role is to identify waste in public spending. Therefore, it seems right that he should be assessed with great scrutiny. He should lead the way in moves towards scrutiny of public spending, which should include spending relating to him.
If we have time-time is short again today-I hope we can have a longer debate on the wider issue of the transparency of public spending when we discuss part 8 of the Bill, but to ensure that the CAG is above suspicion, such information should be in the public domain.
Alan Williams
Labour, Swansea West
The CAG already submits his expenses to me as Chairman of the commission and publishes them on a six-monthly basis which, we are assured, goes further than for any other public servant. He is therefore already ahead of the game elsewhere in Whitehall.
David Gauke
Shadow Minister (Treasury)
The Father of the House makes a good point-the CAG is further ahead. On the whole, we believe there should be greater transparency in public spending, and the CAG could be yet further ahead. I accept that he submits expenses to the Father of the House in his role as Chairman of the Public Accounts Commission, but by putting them in the public domain we would prevent any repetition of what happened with Sir John Bourn, even though such information goes into the public domain every six months.
Our proposal is a matter of going further. As a rule, we think information on how public money is spent should be in the public domain and published online. The CAG in particular needs to be above suspicion.
To avoid-I hope-the need for a separate stand part debate, Clause 40 states:
"P's package is to be determined jointly by the Prime Minister and the"
Chairman
"of the Committee of Public Accounts before the start of the appointment."
There is a great deal of flexibility within the clause, which is welcome and sensible, because there are dangers in being too prescriptive, depending on the nature of the CAG candidate. However, we are lucky enough to have the Chairman of the Public Accounts Committee in the Chamber, and perhaps he is in a position to say something further on the thinking behind the package. For example, there has been talk about linking it to the salary of the Treasury permanent Secretary or the Lord Chief Justice. Historically, there was a link with High Court judges. We have to recognise that we want to get the right person, and pay in the private sector for audit work has increased substantially over the past 20 or 30 years or so. If the CAG is not paid enough, it will have a knock-on effect on everyone else working in the NAO. It is important to get the figure right so that we get the right people.
It is also right that no performance-related pay is included. It was recommended by the Tiner review, but it could lead to some sort of influence being put on the CAG. The proposals do everything they can to preserve the independence of the CAG and that is welcome. Subject to those queries, we have no objection to the clause, other than to say that it would be strengthened by Amendment 57 to put on a statutory basis the publication online of details of the remuneration, allowances and other expenses of the CAG.
Edward Leigh
Chair, Public Accounts Committee, Chair, Public Accounts Committee
6:00,
4 November 2009
I am fairly relaxed about Amendment 57. The CAG publishes details already of all his expenses and allowances. The commission had a discussion about the pay. It is true that traditionally the CAG has received the same salary as a High Court judge. We did not think that that was appropriate any more, because that is fixed and, in order to get a very high-calibre candidate, it might be necessary to pay more than that. When we put in the advertisement, we said that the package would be broadly in the permanent Secretary range. That is an attractive salary, and it is useful to do it that way, because permanent secretaries are paid between £140,000 and £230,000 a year.
There was some discussion about whether we should link the pay to that of the Lord Chief Justice. Personally, I liked that idea, because I am convinced-having done my job for eight years-of the very great importance of the CAG. It would have sent a message if we had made that link, but I suspect that the Treasury was not entirely happy with that. So we reached a compromise. It is not necessary for me to say in Committee what the CAG actually earns-it is published, it is a good salary and we got a high-calibre candidate.
Finally, it is important that the CAG, like permanent secretaries, should not be subject to appraisal by anybody and he should not receive any bonuses. The best approach is the one that we have taken-with the Chairman of the Public Accounts Committee working with the Prime Minister to set a good salary at the level of a permanent secretary. Let us stick to that. It can go up every year by inflation, but no bonuses should be paid and no appraisal made. That is part of the CAG's independence.
Philip Dunne
Opposition Whip (Commons)
I support Amendment 57. It is obviously ironic that Members should be talking about the pay and rations of others today, but in this case it is appropriate for the individual who will be the primary custodian of probity in public finance to be prepared to show the way in terms of transparency about pay and rations. We are all acutely aware of the increased transparency that will apply to public figures paid from the public purse, who will have to make that information available. For the CAG to lead the way will set a good example to others in the public sector and will make his job easier. For all those reasons, this is an appropriate amendment.
Sarah McCarthy-Fry
Parliamentary Secretary, HM Treasury
Of course, we share everybody's wishes for greater transparency, and, as has been said by many Members, the CAG has been leading the way on that. At an administrative level, the NAO already provides for advance approval of the CAG's expenses by a non-executive member of its audit committee, with recourse to the Public Accounts Commission if necessary. Expenses are discussed with the chairman of the NAO audit committee in advance, and the CAG expenses follow, as far as possible, permanent Secretary rules. In addition, since 2007, the expenses and hospitality records of all NAO senior managers, including the CAG, have been published on its websites for each six-month period. We welcome that commitment to transparency.
The CAG's remuneration package is set before he takes office and then has effect for the full term of office, subject only to uprating, which is permitted, but only in line with a predetermined formula. As was mentioned, the current range for a civil service permanent secretary is fairly wide-a minimum of £140,000 to a maximum of £273,000. In the interests of transparency, I have no objection to saying that Mr. Morse is being paid £210,000 per annum, which is mid-range. The CAG's remuneration is reported in the NAO annual report and accounts. Given that it will change only once a year, in line with the annual uprating formula, I see no great advantage in requiring the NAO to report each month on the salary.
The other information that hon. Members wish to be published is available already on the NAO website, albeit only six-monthly, not monthly. I think that six months is fine, given that there has to be advance approval for it, so I do not think that the Amendment is necessary. I ask the hon. Gentleman to consider withdrawing it.
David Gauke
Shadow Minister (Treasury)
I am grateful to the Minister for providing the information about the current CAG. Given that he was previously a partner at PricewaterhouseCoopers, I suspect that he has taken a substantial pay cut to perform this role. Nothing I say is meant to suggest that Mr. Morse has acted improperly. However, given that we are legislating on the set-up for the CAG, it would be helpful to specify on a statutory basis what the CAG should do. That point should apply more widely within the public sector. Rightly, it now applies to Members of the House. It would improve the structure and lead the way, and it would not cause any harm or unwarranted embarrassment to the CAG. I seek, therefore, to press the Amendment to a vote.
Question put, That the amendment be made.
The Committee proceeded to a Division.
Sylvia Heal
Deputy Speaker
I ask the Serjeant at Arms to investigate the delay in the Aye Lobby.
Division number 239
Prime Minister — Clause 40 — Remuneration package of the Comptroller and Auditor General
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