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House of Lords

Monday, 20th March 1995.

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

Prayers—Read by the Lord Bishop of Chelmsford.

Ministerial Salaries

Lord McCarthy asked Her Majesty's Government:

    What criteria they employ to decide the appropriate levels of pay for Ministers and the differentials between the pay of the Prime Minister and other members of the Cabinet.

The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish): My Lords, pay levels and differentials reflect the Government's response to recommendations made from time to time by the Top Salaries Review Body (now the Senior Salaries Review Body) and the additional cumulative effective of pay increases. Under the present arrangements pay increases for Ministers reflect pay awards in the Civil Service.

Lord McCarthy: My Lords, I thank the Minister for that Answer. Can he tell me how the Government explain the enormous differences in the pay differentials between Ministers since 1979? If the noble Lord consults the salary tables in the Civil Service Year Book, for example, he will find that there are some Ministers who have had increases of 500 per cent., others 400 per cent. or 300 per cent. and the Prime Minister about 150 per cent. Is the Minister aware that there are six Ministers of State who now have higher pay (a 350 per cent. increase) than their bosses in the Cabinet who are Secretaries of State? Furthermore, the Solicitor General for Scotland—

Noble Lords: Speech!

Lord McCarthy: My Lords, I am asking the Minister to explain all this. In 1979 the Solicitor General for Scotland had 25 per cent. less than the Solicitor General in England, but he now has 25 per cent. more. Can the Minister say whether that is because the cost of living is higher in Scotland? Or is the rise given to the Prime Minister in reflection of the fact that it is easy to get Prime Ministers? Can the Minister say whether it is a question of changes in responsibilities? What are the reasons for these differences?

Lord Mackay of Ardbrecknish: My Lords, I indicated in my original Answer that the Top Salaries Review Body plays its part. I suspect that the examples quoted by the noble Lord are taken from situations where, at a certain stage, the holder of the office is a Member of the House of Commons where he is entitled to part of his parliamentary salary and, at another stage,

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a Member of this House where he is not entitled to a parliamentary salary. Therefore, the total pay of Ministers differs.

Lord Boyd-Carpenter: My Lords, is my noble friend aware that, on the whole, Ministers are grossly underpaid and, if he will allow me to say so, particularly the junior Ministers in this House?

Lord Mackay of Ardbrecknish: My Lords, I am delighted to be able to agree with my noble friend on that. As I seem to repeatedly come to the Dispatch Box I feel that personally a little more than most.

Lord Avebury: My Lords, when Ministers devolve part of their responsibility onto agencies, or privatise sections of their department, why does their pay remain the same? In particular, can the Minister explain why the Minister in charge of prisons did not have a reduction in his salary when all his responsibilities were transferred to Mr. Lewis?

Lord Mackay of Ardbrecknish: My Lords, I almost feel like saying to the noble Lord that I refer him to the reply I gave him on the last occasion he raised this question. The situation is quite simply that Ministers are responsible for the policy arrangements of the department and that remains with them. They are also responsible for the overall way in which the policy is carried out; and they are answerable to Parliament. That is the situation and it remains so. That is why my right honourable friend the Home Secretary is well worth the money he is paid.

Lord Peyton of Yeovil: My Lords, does my noble friend believe it appropriate to thank the noble Lord, Lord McCarthy, for the immense amount of information which he has communicated to your Lordships? Perhaps my noble friend will also make it clear that he does not share the noble Lord's conclusions and that, in fact, Ministers are very meanly paid. Does he agree that there may be disastrous results in the long run?

Lord Mackay of Ardbrecknish: My Lords, I agree with my noble friend that the noble Lord, Lord McCarthy, gave us some interesting information. He makes a very valid point in that both Houses of Parliament have to be careful as regards the inter-relation between what they pay Ministers and what fetters are put on Ministers' ability to make a living after they cease to be Ministers.

Lord Jenkins of Putney: My Lords, is it not the case that some elements of productivity may be involved in this matter? Can the Minister say what it is that Ministers are required to produce which will safeguard the element of productivity? In the event of negative productivity, would it not be possible to introduce some degree of negative increase into the arrangements so that the Minister whose production is nil perhaps receives a negative rise?

Lord Mackay of Ardbrecknish: My Lords, the last time this matter was raised by the noble Lord, Lord McCarthy, we discussed this particular aspect. I say to the noble Lord—as I believe I said during that exchange—that it depends how the matter is judged.

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Some people judge a Minister as having succeeded if he passes less legislation, but others believe in more legislation. I suspect that in this case beauty lies in the eye of the beholder.

Lord Pearson of Rannoch: My Lords, does my noble friend have any idea whether Mr. Neil Kinnock is better off financially since he failed to become Prime Minister and became instead a Euro Commissioner, and if so, by how much? Does my noble friend believe that he is more usefully employed there than he would have been here?

Lord Mackay of Ardbrecknish: My Lords, I certainly believe that the country is probably better off that Mr. Kinnock is not Prime Minister. As regards the question, Mr. Kinnock's bank manager must be very thankful that he is not Prime Minister but a European Commissioner because my right honourable friend the Prime Minister is paid £82,000, including his parliamentary salary. Mr. Kinnock, as an EC Commissioner, and depending on the Belgian franc and sterling exchange rate, is paid about £140,000 according to the last calculation I made. Therefore, Mr. Kinnock is clearly much better off being an EC Commissioner than he would have been as Prime Minister.

Lord Cledwyn of Penrhos: My Lords, against the background of this informative exchange, does the Minister agree that the people who are the worst treated in all this are members of the Opposition Front Bench in this House?

Lord Mackay of Ardbrecknish: My Lords, I suppose that my heart is now expected to bleed. However, having spent days on the Pensions Bill, I am not entirely certain whether I am an independent judge. Of course, members of the Opposition Front Bench work extremely hard—and long may they continue to work hard in their current positions.

Lord Dormand of Easington: My Lords, is the Minister aware that the criteria that he gave to my noble friend Lord McCarthy do not apply to the particular anomaly whereby five Ministers of State who are not in the Cabinet receive higher salaries than their Secretaries of State who are in the Cabinet? Is not that a most peculiar state of affairs, and should not something be done about it?

Lord Mackay of Ardbrecknish: My Lords, I am having some trouble with this. I am looking down the list but I cannot instantly see any Ministers of State who are paid more than their Secretaries of State. As I said, however, one has to take the parliamentary salary component into account. It is undoubtedly the case that Law Officers are paid on a different basis from others. Although I may turn out to be wrong, at a quick glance I cannot see any junior Minister who receives more than the £67,819 that is received by Cabinet Ministers.

Lord McCarthy: My Lords, I shall send the Minister the figures. I am not seeking to say that Ministers are overpaid; I am seeking to ask why they are paid what they are paid. Given that the Government insist that

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everybody else in the public sector and the voluntary sector explains why they are paid what they are paid, is it not reasonable to expect the Government to do a bit better than the statements which the Minister has given us this afternoon?

Lord Mackay of Ardbrecknish: My Lords, I seem to have some difficulty getting through to the noble Lord. The Top Salaries Review Body, and now its successor, looks into these matters. I should have thought that that was a perfectly proper way for such things to be conducted. I have explained how those salaries and differentials have come about. If at any stage in the future the noble Lord thinks that the successor to the Top Salaries Review Body should examine those differentials and increase them or the salaries, I am sure that he would happily be prepared to send a paper to that body.

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