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House of Lords

Tuesday, 28th February 1995.

The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.

Prayers—Read by the Lord Bishop of Bristol.

Speaker of the Commons: Pension

Lord Peyton of Yeovil asked Her Majesty's Government:

    Whether they will refer to the senior salaries review body the level of pensions paid to ex-Speakers of the House of Commons and their widows.

The Lord Privy Seal (Viscount Cranborne): My Lords, the pensions in question are based on the recommendations of the review body to which successive governments have referred the pension arrangements for the great offices of state; namely, the Prime Minister, the Speaker and the Lord Chancellor. The Government's policy is not to alter the basis of a pension after it has been awarded.

Lord Peyton of Yeovil: My Lords, I start by thanking my noble friend and my right honourable friend the Leader of the House of Commons for the courtesy, understanding and sympathy with which they have approached what I know to be a very difficult problem indeed. I hope that my noble friend will agree that the Speakership of the House of Commons is the highest and most important office that Parliament has in its gift. I ask my noble friend to apply his mind to one case, and to one part of that case. When the noble Viscount, Lord Tonypandy, retired from the Chair of the House of Commons after 38 years of membership of the House, he received a modest pension for his years as Speaker. For the preceding 33 years or so, he received nothing beyond the repayment of his own contributions, unindexed, plus interest, net of tax. By any account, that was not generous.

Viscount Cranborne: My Lords, I am extremely grateful to my noble friend for the opening part of what he said. He acknowledged that this is a difficult question at a time when many sectors of society are thought to have pensions which are too exiguous by far. As my noble friend observed, it becomes all the more difficult when it is important that the former holders of the greatest offices of state should not be seen to be treated meanly by an apparently ungrateful country. Therefore, I acknowledge wholly the justice of the sentiments which my noble friend has expressed, in particular because he mentioned the name of one of the most universally liked and respected Speakers of recent times.

In the end, I submit with the greatest respect to the House and to my noble friend that the remedy, if a remedy is deemed to be needed, is in the hands of Parliament, which can decide whether the great offices of state are paid enough so that the pension received is

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adequate. That should be the starting point because, as my noble friend knows, the pension flows directly from the amount of the final salary.

Lord Cledwyn of Penrhos: My Lords, I support the strong case which the noble Lord, Lord Peyton, made in favour of referring the matter to the review body. I see no argument against that. If that is not done, I am bound to say that I am tempted to suggest to the Government that they should privatise the Speakership.

Viscount Cranborne: My Lords, somebody with the parliamentary experience of the noble Lord, Lord Cledwyn, would also be able to advise on whether or not stock options would go with such a privatisation; and, if so, how that could be achieved.

More seriously, quite simply the difficulty is that, very sensibly it seems to me, the matter was referred in 1988 to what is now known as the senior salaries review body with the object of removing these embarrassing questions from regular review. A settlement was struck. That settlement is subject to up-rating according to the record of inflation every April. It is in the nature of those referrals, as your Lordships will be aware, that not only should the mechanism be allowed to work, but that it is extremely difficult, however much one may sympathise with the case in hand, to make them retrospective. The noble Lord advocates an element of retrospection which would cause the Government—and, I suspect, the country at large—considerable difficulties.

Lord Barnett: My Lords, for once the noble Lord, Lord Peyton, has substantially understated the case. The plain fact is that the ex-Speaker to whom he referred would have received a higher pension if he had not drawn the Speaker's pension. He would have been better off without it, in view of his years as an MP and his years of Ministerial service. In those circumstances, do we not find ourselves in an absurd situation? The noble Viscount said that it is up to Parliament. I ask him to give us an assurance about this matter. Why is Parliament not asked—and it will not cost a huge amount of money—whether it wants to be able to help somebody who is now well over 80 years of age, and who is well deserving of rather better treatment than he has been given so far?

Viscount Cranborne: My Lords, the noble Lord will be aware that it is only a matter of a very few weeks before the pension of the noble Viscount to whom he refers, in respect of his service as Speaker, will overtake in monetary terms what the present Speaker of the House of Commons will be entitled to by way of her pension. We must also have regard to that matter. The noble Lord may also be aware that such matters were debated in another place as little time ago as 1991. The opportunity was taken by Parliament to consider the matter, but no adverse comment was made at the time.

Lord Richard: My Lords, if I may say so, this is very much not a party issue; indeed, I believe that it is a matter for Parliament and, as we are looking at it in respect of this place, for the whole House. Having listened to what the noble Lord, Lord Peyton, and my noble friend said, there seems to be a real problem here.

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Somehow or other, I should have thought that the Government ought to be prepared at least to say that they will look again at the matter.

I must tell the noble Viscount the Leader of the House that I do not have such a difficulty with the issue of retrospection—that is, if the result of being retrospective is that one tends to remedy an injustice which took place in the past. On the face of it, and judging by the nods that I seem to be getting from the other side of the House and, no doubt, from those behind me—although I cannot see those behind me—I should have thought that the House as a whole would think that the Government ought to look again at the matter. There is an issue here that ought to be redressed. Can the noble Viscount tell us whether they will do so?

Viscount Cranborne: My Lords, I am sure that the noble Lord carries the whole House with him when he says that this is not a party issue. I believe that I can speak for all my noble and right honourable friends in the Government when I say that we do regard the matter as one which should be treated with the greatest amount of sympathy. The noble Lord will no doubt also be aware that the salaries and pensions of Speakers have, hitherto, been treated in conjunction with the salaries and pensions of—dare I say so in front of my noble and learned friend?—Lord Chancellors and Prime Ministers. If we were to re-examine the matter again, I am sure that the noble Lord would want to ensure that those pensions were examined in the same context. The noble Lord will be aware that there is much political baggage which could accompany such an inquiry.

Lord Allen of Abbeydale: My Lords, Members of the Cross-Benches do not have a collective voice; but a number of us do not regard the present position as being very satisfactory. We very much hope that the Government will think again and that they include in their reconsideration the possibility of legislation limited solely to the office of Speaker. I imagine that such legislation would not be highly controversial. If that were to be considered, could it be borne in mind that the annuity paid to my noble friend Lady Hylton-Foster was fixed by an Act of Parliament passed for that specific purpose at the very modest rate of one-third of the rather modest pension which her husband would have received? I should like to add my voice to those asking the Government to have another look at the matter.

Viscount Cranborne: My Lords, I can do no more than assure your Lordships that I shall make all my colleagues aware of the very strong feelings of sympathy that have been expressed in the House—feelings of sympathy with which I wholly agree. However, the noble Lord, Lord Allen, will be aware that any form of legislation of the kind he proposes could, with legitimacy, unless the parliamentary draftsman works more than his usual magic, also raise questions affecting pre-1973 war widows, a class of people with whom I have great sympathy; war disability pensioners; those whose pensions have been affected during periods of pay restraint; and, indeed, those affected by pay policy since 1984. They are all good causes in

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themselves. The Government have to consider how such matters can be treated as exceptions and attract the sympathy which we would all like such issues to attract.

Noble Lords: Next Question!

Lord Peyton of Yeovil: My Lords, I thank my noble friend for all his answers. However, would he not agree that for the message to go out to the people of this country that holders of an office such as that of Speaker of the House of Commons are to be treated in an ungenerous and even a mean fashion would be very damaging for the future? I hope that we can take the matter further at a later stage.

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