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Mr. Bercow: I am grateful to the hon. Lady, who is trying hard to dispel our concerns although, frankly, mine have not been assuaged. However, in the light of what she has just argued, will she tell the House the significance of the inclusion in the article of the word "autonomous"?

Ruth Kelly: I certainly listened with interest to the results of the telephone conversation that one of the hon. Gentleman's friends had with someone in France, I believe. I do not think that he would expect me to comment on a telephone conversation to which I was not privy, but the important principle is whether we have a veto on any new EU finance tax-raising powers. I put it clearly to the House, as my right hon. Friend the Chancellor has done, and as my right hon. Friend the

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Chief Secretary to the Treasury did on Second Reading, that we have no intention of consenting to a new EU tax. Any such tax will depend on the unanimous consent of all EU members.

The hon. Member for Kingston and Surbiton made several well-informed and interesting comments. I certainly agree that we need to address the EU budget; rationalising it is a priority. We discussed that in Committee and, as he knows, we are giving a high priority to reform, with a focus on outputs and delivery, rather than inputs. I also thank him for his comments on windfall gains; I am sure that most people in the House will wish to do so.

The hon. Member for Arundel and South Downs made some interesting comments, some of which we have already addressed in Committee, so I shall not prolong our debate by going through all of them. However, he mentioned the financing of the UK's abatement, and I would like to reiterate that any changes to it that were agreed do not in any respect affect the position of the British taxpayer. The Berlin Council addressed the problem of other large net contributors to the community budget: Germany, Austria, Sweden and the Netherlands. In future, they will pay less towards the UK abatement, but the cost of that will be met by the other 10 member states, not the UK, so the change should have no net effect whatsoever.

In conclusion, the Bill demonstrates the huge benefits of Britain's constructive engagement with the EU. It shows that by taking a leading role in reform and by working together with other member states, we can achieve outcomes that are good for the UK and the EU. The agreement will mean stronger controls on EU spending, the beginnings of a more effective agricultural policy and no increase in the own-resources ceiling. The Bill ratifies part of the Berlin agreement that secured no increase in contributions from the UK and safeguarded the abatement. That is a good outcome for the UK and I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read the Third time, and passed.

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Ministerial Salaries

3.17 pm

The Parliamentary Secretary, Privy Council Office (Mr. Stephen Twigg): I beg to move,

The March report of the SSRB—the Review Body on Senior Salaries—on parliamentary pay and allowances was debated in both Houses on 5 July and its recommendation on Members' pay was agreed. Not discussed at that time by the House was the SSRB's recommendation No. 2 that Lords Ministers should receive an equivalent increase to that of Members of this House. The proposal was passed by the House of Lords on 23 July.

The order gives effect to recommendation No. 2—that there should be an increase in Lords Ministers' pay of £4,000 in two instalments of £2,000. The effective date of the first instalment is 20 June 2001, the state opening of Parliament. The order provides for the second £2,000 instalment from 1 April 2002 payable in addition to the automatic uprating of Lords Ministers' salaries, which takes effect from the same day.

The purpose of the increase is twofold: first, to ensure that ministerial pay remains broadly comparable to that of posts in the public and private sectors, and, secondly, to ensure that the cash differentials between Commons Ministers' salaries, including their parliamentary salary, and Lords Ministers' salaries do not widen. The SSRB thought it important that Lords Ministers' pay did not lose ground against that of their counterparts in this House. The SSRB's recommendation builds on its 1999 report which recognised that Lords Ministers' pay had failed to match the responsibilities of their work. I am sure that there will be a consensus in all parts of the House that Lords Ministers play an important part in government and in Parliament, which the order recognises.

The order also gives effect to similar rises for the Leader of the Opposition and the Opposition Chief Whip in the Lords. In total, 26 peers will benefit from the order, so the total cost will be modest.

3.20 pm

Mr. Eric Forth (Bromley and Chislehurst): I have not yet been too long in the position that I now occupy, but I am already alarmed at the extent to which I find myself in agreement with the Government and Ministers, and this is another such occasion. However, this occasion allows us briefly to reinforce the importance that certainly the Opposition give to the role played by the other place and its Ministers.

I have never had any doubt in my mind, and I have even less doubt now, that the House of Lords is a vital part of our parliamentary process. It is an institution that gives important safeguards to our people, so it is important that we recognise the role played by Members of the House of Lords and, therefore, Ministers in the House of Lords. To that extent, I welcome the order today.

There are questions that are not for today but which we would do well to consider as to whether or not or how far even the SSRB recommendations give effect to making ministerial pay broadly comparable to that in the private

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sector, as I think the Minister said. I have always been intrigued as to how it is that even a body as distinguished as the SSRB can set out to identify some sort of comparability between what Ministers of the Crown do and what is done in the private sector.

I have always had some doubt about how far that comparability can be stretched, but let us be thankful for what the SSRB has given us. It is has given us the opportunity to make ministerial pay generally, and in this case ministerial pay in the House of Lords, at least somewhat more realistic, and for that much we should be grateful. It is for another occasion for us to return to whether ministerial pay either here or in the Lords is sufficient.

Having said that, I have one question for the Minister for the sake of clarification. The explanatory note intriguingly states:

On what basis would the salaries be less and who would decide that they should be less? The Minister may say that the Government will decide—or more probably the Prime Minister, because he appears to decide most things—but what interests me is not so much what the Prime Minister decides for the salaries of his Ministers, but whether the Prime Minister would then decide the salaries of Opposition officeholders, as set out in schedule 2.

I ask that for clarification because, in some circumstances, it could give rise to difficult or contentious tensions. I hope that I can be reassured that my suspicions are unfounded, but I should be grateful if the Minister could expand on that delphic sentence. Having said that, we are more than happy to support the order.

3.23 pm

Mr. Andrew Stunell (Hazel Grove): I thank the Minister for bringing the order forward. It is deceptively short and bland in what it says and does. I do not pick any quarrel with the proposal for ministerial salary increases in the House of Lords and the bringing of them into line with those in the House of Commons. I would only pick up the point made by the right hon. Member for Bromley and Chislehurst (Mr. Forth) in relation to comparability with the private sector, a point that the Minister raised and on which he might wish to elaborate.

When one considers the private sector, particularly former parts of the public sector now in the private sector, and when comparability is prayed in aid for the enormous salaries paid, one finds that, unlike in the schedule, we are not talking about five-figure numbers nor even six-figure numbers but, in many case, seven-figure numbers. I sincerely hope that the Minister does not intend to come back with further steps towards comparability that take us anywhere near such exceptional, excessive figures. Some of us do not accept the argument that comparability with the private sector should be the starting and the finishing point.

I want to say a little about the even less considered schedule 2, relating to the Leader of the Opposition and the Opposition Chief Whip in the House of Lords, which involves a total expenditure of £117,000 and some pence. I think that I am quoting the Minister accurately when I say that he said that the measure affects only 26 Members of the House of Lords and so does not cost much. This

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provision concerns only two Members of the House of Lords, and £117,000, by the Minister's standards, may not be much—perhaps a couple of hours' pay on the new rates that might come in with comparability. It pales into insignificance compared with the £500,000 paid by the Government to Her Majesty's Opposition in this place. It is certainly a modest figure compared with the amounts being paid here. [Interruption.] The right hon. Member for Bromley and Chislehurst says that it is worth every penny, but there might be several points of view on that.

Schedule 2 relates specifically to the official Opposition's role in the House of Lords and I assume that the constitutional reason for the money being paid—not the realpolitik reason—is to improve the effective scrutiny of the Government in that place and to achieve better legislation; otherwise, it is money completely down the drain. That £117,000 would be well worth it if it secured effective scrutiny and better legislation.

I was intrigued by the right hon. Gentleman's comment with regard to those being maximum figures and asking about the possibility of lesser amounts being paid to those two Members of the House of Lords. He asked who decides what money they should have. My response to that is, "He should be so lucky." These are the only two Opposition Members in the House of Lords to receive Government support. The arithmetic and the reality of the House of Lords is that there are two Opposition parties.

I look forward on a future occasion to speaking on and voting for an order that more accurately reflects the political reality and democratic facts in the House of Lords and here in relation to the financing of Opposition parties.

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