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Lord Mackay of Clashfern: My Lords, I thank the noble Lord for giving way. I think it would be fair to point out, as the noble Lord, Lord Goodhart did, that the Lord Chancellor as a judge is precluded from returning to practice, whereas I would have thought that the Ministers to whom the noble Lord referred would be able to return to possibly enhanced remuneration in private practice having held such distinguished office in Government.

Lord Lester of Herne Hill: My Lords, I am grateful to the noble and learned Lord for reminding me of that point. I accept that that is a possible ground for distinction under the arrangements which now exist. However, I believe the answer to that is given by my noble friend Lord Goodhart. We would anticipate that consequential changes would need to be made in the course of the next two or three years before the Bill comes into force in order that it would become unnecessary for the Lord Chancellor to be nominally a judge or even necessarily to sit as a Member of this House. In our view on these Benches he could be put into exactly the same position as a Secretary of State, as are the other very distinguished lawyers on the Government side.

It remains for me to refer briefly to that part of the Lord Chancellor's salary that he is paid for acting as Speaker of the House. It would seem appropriate for the level of remuneration for that responsibility to be determined separately by the House, perhaps even on the basis of an hourly rate to be paid to the Lord Chancellor and such other officers of the House as sit from time to time upon the Woolsack. There does not seem any justification for a fixed sum to be included for him alone.

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For those reasons we on these Benches hope that the Government will support this modest Bill and remove an anomaly that unjustly enriches whoever is holder of the office of Lord Chancellor and places an unfair and unwarranted burden upon the taxpayer. This is not a case where the emperor has no clothes; the Lord Chancellor has expensive ministerial and judicial clothes, some of which should be shed or reduced or there should be a reduction in the price paid for them by the members of the public.

3.14 p.m.

The Minister for the Cabinet Office and Chancellor of the Duchy of Lancaster (Lord Macdonald of Tradeston): My Lords, the noble lord, Lord Goodhart, proposes significant amendment of the provisions of the Ministerial and other Salaries Act 1975. The Government cannot support this amendment. The Lord Chancellor has already requested that this issue be considered by the independent Senior Salaries Review Body.

As the Lord Chancellor's remuneration reflects the status and responsibility and tradition of the offices this debate has made clear, there is a wider context, as the noble Lords, Lord Goodhart and Lord Lester of Herne Hill, have also made clear. It has been suggested that by implication, the Human Rights Act might make it inappropriate for my noble and learned friend to continue to exercise any judicial functions.

The Government do not accept that reasoning. In the United Kingdom, we have never accepted pure adherence to a doctrine of the separation of powers. The noble and learned Lord, Lord Mackay of Clashfern, elegantly dissected the arguments, which I would not presume to try to match. He referred to his distinguished predecessor as Lord Chancellor, the late Lord Hailsham of St Marylebone, who in a speech to the committee of Ministers of the Council of Europe in 1979 summed up the position in a way that is worth noting. He said:

    "Unlike that of the United States, the British Constitution is such that every leading member of the executive is also a member of the legislature.

    We have an omnipotent, omnicompetent and sovereign parliament and, to some extent, it reflects the will of the executive, but we have an independent judiciary and the function of the Lord Chancellor is precisely to maintain the independence of the courts of law and the judges.

    We have no written constitution and in the absence of a document we must rely on the integrity of a man. It is the function of the Lord Chancellor to fight, to the last gasp if need be, for the independence of the judiciary. He can perform that function only if he has a foot in all three camps".

Therefore, the office of Lord Chancellor, straddling as it does the three parts of the constitution, makes its holder uniquely placed to protect the interests of each part against the demands of the others. In particular, it both upholds judicial independence and mediates between the executive and the judiciary when occasion for controversy arises.

The Lord Chancellor is able to perform that function both because of his seniority in Cabinet and because he is head of the judiciary and sits as such from

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time to time. Through his office, the judiciary has a representative in the Cabinet. The Lord Chancellor is in a position to promote mutual understanding in order to avoid collisions at the major intersections in the separation of the powers.

It is sometimes suggested that the Lord Chancellor could continue to fulfil that function without himself sitting as a judge. The Government do not agree. Sitting as a judge can give the Lord Chancellor a practical awareness of the development of the common law at the highest level. More than that, the Lord Chancellor's position as head of the judiciary also has the effect of ensuring that only an experienced and senior professional lawyer can be appointed to the position. It is not enough to have a legal qualification; the holder must be practising as a lawyer. A review of the outstanding attributes of the present and former Lord Chancellors underlines the achievement of successive Prime Ministers in appointing only practising lawyers held in high regard.

It is of course important that when the Lord Chancellor sits as a judge, it should not be in a case in which it would be inappropriate. My noble and learned friend has made it amply clear that he would take great care not to compromise his position in such a way. He has spelled out in this House that he would not sit on any case concerning legislation, in the passage of which he had been directly involved, or in any case where the interests of the executive were directly engaged. The Lord Chancellor would always be greatly concerned that he might render himself ineligible to sit judicially were he to express an opinion on a matter that might later be relevant to an appeal to your Lordships' House.

It can be argued, of course, that whatever may have been appropriate in the past, the Human Rights Act now makes it unacceptable that the Lord Chancellor should continue to fulfil his multiple functions. The Government do not accept that. I would point out, first that the only jurisprudence on this subject from the European Court in Strasbourg, the McGonnell case, as mentioned by the noble Lord, Lord Lester of Herne Hill, emphasised that:

    "The question is always whether, in a given case, the requirements of the convention are met".

The court accepted the UK's contention that neither Article 6 nor any other provision of the convention required,

    "states to comply with any theoretical constitutional concepts as such".

Lord Lester of Herne Hill: My Lords, I am grateful to Minister for giving way. Is he aware that experience in the Parliamentary Assembly of the Council of Europe and in the Venice Commission for Democracy suggests that it is almost impossible to explain to lawyers, judges and politicians in the rest of Europe how in Britain alone we retain that curious mixture of the three branches in a single person? Is the Minister

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aware of the difficulty that the United Kingdom Government will have defending that position on the international plane?

Lord Macdonald of Tradeston: My Lords, the Government are indeed aware of that, which is one reason why I cited Lord Hailsham as well as the matters before me.

It follows that the Government do not accept that the Human Rights Act 1998 causes us to review the role of the Lord Chancellor. If there is a human rights point here—we do not think that there is—it stems from our international obligations, not from domestic legislation. In any case, the Act was intended to work with, not against, the grain of our constitutional tradition. It assumes a settlement in which the judicial, executive and legislative branches of government all have an interest and role. Indeed, it works best if there is mutual respect between those branches, with each understanding the responsibilities given by the Act to the other two. The role of the Lord Chancellor encourages and promotes that.

I turn to the substance of the Bill: the issue of the salary payable to the Lord Chancellor. In principle, the level of ministerial salaries is a matter for the Government of the day. However, as the noble Lord, Lord Goodhart, mentioned, since its establishment in 1971, the independent Top Salaries Review Body, now the Senior Salaries Review Body, has periodically been asked to undertake a review of ministerial and parliamentary pay and allowances. Following the 1996 Senior Salaries Review Body report, the Government of the day now ask the Senior Salaries Review Body to carry out a thorough review about every three years and to make recommendations.

As I outlined, the Lord Chancellor is by statute head of the judiciary. Many of the core functions of his office derive from his being head of the judiciary. In addition to those functions, he is entitled to sit in the Chair of the House of Lords in its judicial capacity. As has been mentioned, the Lord Chancellor's Department has a wide range of responsibilities, employing more than 11,000 staff.

In 1983, the Top Salaries Review Body recommended that, given,

    "the pre-eminent position of the Lord Chancellor in the judiciary . . . and his responsibilities as a whole",

he should be paid rather more than the Lord Chief Justice. In 1991, that salary linkage was enshrined in primary legislation.

The Bill may be partly in response to the pay rise due to my noble and learned friend this April, following the Government's acceptance of the recommendations on judicial salary made by the Senior Salaries Review Body in February. I recognise that the increase this year is substantial, but it is entirely due to the statutory link between the salaries of the Lord Chief Justice and the Lord Chancellor.

The 12.6 per cent increase arose because the Lord Chief Justice received the 2.75 per cent increase for 2003 given to every member of the judiciary, along with the remaining 4.4 per cent of the staged award for

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2002. In addition, the review body recommended a further increase of £10,000 for the Lord Chief Justice to ensure broad comparability with the Cabinet Secretary.

The related statutory pension entitlement of the Lord Chancellor is based on his salary entitlement on retirement. That, too, has caused some comment in your Lordships' House, which the noble and learned Lord, Lord Mackay of Clashfern, tried to set in context. To repeat, it is necessary for a new Lord Chancellor to retire from legal practice prior to assuming the office.

However, the other matter to which the noble and learned Lord referred is surely fundamental to the debate and must be considered. Unlike any other Cabinet Minister, by convention, Lord Chancellors may not return to legal practice upon retirement. Thus, Lord Chancellors lose their livelihood, regardless of the length of time for which they may occupy the office. That is surely a crucial concern—one that has no doubt dictated the enduring all-party acceptance of the pension arrangements first set up in 1831 but now being called into question in some quarters.

The Senior Salaries Review Body said in its February report that it would review the broad linkage between judicial and Senior Civil Service salaries. That is needed because performance-related pay plays an increasing part in the salaries of the latter but not the former. The Lord Chancellor subsequently asked the Senior Salaries Review Body to review the statutory link between his salary and that of the Lord Chief Justice. While the review body considers the matter, my noble and learned friend has volunteered to forgo the majority of his pay rise. Instead he will accept an increase of 2.25 per cent in line with the award received by other Ministers.

The noble Lord's Bill would remove the link between the salaries of the Lord Chief Justice and the Lord Chancellor. It would set the Lord Chancellor's salary at the same level as that of a Secretary of State. It is surely clear to everyone who listened to the powerful arguments of the noble and learned Lord, Lord Mackay of Clashfern, that the Lord Chancellor's role is singular, as I briefly touched upon .

In conclusion, in the light of the work being done by the review body, which we expect to receive early in 2004, the Government believe that it would be premature to amend the legislation on the Lord Chancellor's salary before the review body has had a chance to report.

3.26 p.m.

Lord Goodhart: My Lords, I am grateful to everyone who spoke in this debate. I am particularly grateful to the noble and learned Lord, Lord Mackay of Clashfern, who contributed much, as I hoped he would, by presenting a closely argued view that was opposite to mine and that of my noble friend. I regret that we heard no comment whatever from the Conservative Front Bench, although a Minister has been present. I would have thought it appropriate that

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the view of the Conservative Party, which may or may not be the same as that of the noble and learned Lord, should be expressed.

I wish to say something slightly different from what my noble friend Lord Lester of Herne Hill said. I do not intend to argue that the Lord Chancellor's current salary involves any unjust enrichment. The real problem is not that his salary is too high but that Cabinet Ministers' salaries are too low given the enormous responsibility that they bear. I would be more than happy if the salary of the Secretary of State were increased to that of the Lord Chancellor. Obviously, a link to the salary of the Lord Chief Justice would still be inappropriate. The problem is the disproportion between the salary of the Lord Chancellor and those of Secretaries of State.

The conclusions of the noble and learned Lord, Lord Mackay of Clashfern, proceeded by irrefutable logic from what I believe to be a false premise—that the Lord Chancellor can be regarded primarily as someone who holds judicial office. That is nominally correct. As the noble and learned Lord pointed out, the Lord Chancellor swears a judicial oath and is entitled to sit as a member of an Appellate Committee of your Lordships' House both during and after his period of office. When the noble and learned Lord, Lord Mackay of Clashfern, was Lord Chancellor, the position may have been closer to a judicial office. He had not served in political office and his involvement in political issues and in the Cabinet was undoubtedly much less than that of the noble and learned Lord, Lord Irvine of Lairg. In a sense, the noble and learned Lord, Lord Mackay of Clashfern, could have been regarded as sitting in the Cabinet as a representative of the judiciary. At present, however, that is not the case.

The Minister referred to the fact that, in this country, we do not have a constitutional separation of powers in any true sense. Some of us feel that that is unfortunate. Although the entwinement of the legislature and the executive is so fundamental that it cannot be changed, that is not necessarily true of the relationships between the judiciary and the executive.

The argument that the Lord Chancellor's role in Cabinet is to fight for the independence of the judiciary and, in some sense, to act as its representative in Cabinet is not and, what is more, cannot be true because of the doctrine of collective Cabinet responsibility, apart from anything else. The Lord

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Chancellor cannot speak out outside the Cabinet Room against decisions that might threaten the independence of the judiciary, unless he is prepared to resign. It has become increasingly clear in recent years that the Lord Chief Justice, who is freer to speak his mind, is the true representative of the judiciary, not the Lord Chancellor.

The noble Lord, Lord Macdonald of Tradeston, used the argument that sitting as a judge gave the Lord Chancellor practical experience of the exercise of judicial functions. All I can say is that sitting in one case in two years cannot do that. The burdens on a Lord Chancellor, with the increase in the role of the Lord Chancellor's Department, are so great that it would be impossible for any future Lord Chancellor to sit regularly in an Appellate Committee of your Lordships' House, in the way in which, until relatively recently, that was commonly done.

It was argued that the Lord Chancellor's inability to return to practice was an argument for the present level of salary. I deny that. It may be regarded as the reason why the Lord Chancellor is entitled to a full pension for however long he served in the office, but it is not an argument for a higher salary. Apart from anything else, a retired Lord Chancellor can sit as a member of the Appellate Committee, either as a Law Lord, as Lord Dilhorne did, after he ceased to be Lord Chancellor, or on an ad hoc basis, for which he is entitled to draw salary. Furthermore, a retired Lord Chancellor can sit as a commercial arbitrator, as do many other retired senior judges. Those arguments against the Bill are not justifiable.

I recognise that the Bill is unlikely to become law, but it is, nevertheless, wholly justifiable. For the first time since the Lawrence committee in 1963 and 1964, there is an opportunity for the Senior Salaries Review Body to consider whether there should be a change in the basis on which the Lord Chancellor is paid. It is clear from the 1983 report to which my noble friend referred that the question was not considered on the basis of whether the distinction was justified; it was simply an examination of what the difference in salary levels should be.

As a contribution to further debate, I wish to move the Second Reading of the Bill.

On Question, Bill read a second time, and committed to a Committee of the Whole House.

        House adjourned at twenty-five minutes before four o'clock.

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