Parliamentary Standards Bill

I beg to move amendment 69, page 1, line 17, at end add 'of 3 July 2008.' The amendment would take further the implementation of the recommendations of Sir John Baker. It would remove the requirement for the House to pass further resolutions in order to amend MPs' pay, which would become entirely a matter of statute. Although it incorporates the resolutions passed on 3 July 2008, I am advised that it involves no issues of retrospection. It retains the flexibility built into the Baker recommendations of a review by the Senior Salaries Review Board at the start of each Parliament. My reason for tabling the amendment is clear enough. Along with allowances, the pay of MPs has been a source of enormous controversy almost every time the House has considered it. To the public, it looks like MPs voting themselves a pay rise from taxpayers' pockets; it looks like trotters in the trough. There is always a pressing reason, too, for the Government to wish to vary an SSRB recommendation, which can cause even more controversy and require even bigger adjustments to be made later. That was partly why Sir John Baker was given the task of devising a system""to make recommendations for a mechanism for independently determining the pay and pensions of MPs which does not involve MPs voting on their own pay"." His report recommended annual uprating in line with public sector average earnings, with a review by the SSRB each Parliament, but that still left the difficulty of the need for a resolution of the House and the scope for Parliament to vary its conclusions in it. The intention of the provision is to remove that scope. In doing so, it seeks to fulfil the policy objective of the democracy task force, chaired by my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke), in which my right hon. Friend the Member for North-West Hampshire (Sir George Young) was also involved, which concluded that pay awards should be placed in the hands of an independent body by statute. It is curious—it can be a product only of the undue haste that comes when a Government convince themselves that they need what they have described as "emergency legislation"—that the Bill does not already contain a provision of this type. It is particularly odd that clause 2 perpetuates the setting of pay by resolution, when it has so manifestly caused so much difficulty for everybody in the past. Even so, it is not primarily to avoid controversy that I feel that the amendment is necessary. It is necessary primarily because, as I suggested a few moments ago, the current arrangements are still wrong in principle: nobody should set their own pay—not even MPs, and the public might say especially MPs. I think that the public are right about that. Other democracies have addressed this issue and mostly have put it right by removing the right of MPs, or their elected representatives, to set their own pay. An appendix to the Baker review sets out a wide range of other countries that have taken steps similar to what I am suggesting today. Neither does the amendment represent an effort to secure increases in pay by the back door. I am not a supporter of a sharp pay adjustment for MPs; I think that there is a vocational element to the job, which should be reflected in the pay that we receive. If one takes that view, however, it also means that the full costs borne by MPs in the performance of their duties should be met by allowances, however unpopular that may be to the public. That is why Sir Christopher Kelly's investigation will be so important and why the way in which he presents his report, however difficult, will be crucial for the future of the allowances system. This is emergency legislation and it, including the amendment, will need to be reviewed. I think that that will be best done by a sunset clause, which I have not yet had an opportunity to table, but I hope will be tabled in the other place—[Interruption.] I am pleased to hear that a sunset clause has been tabled by my colleagues. The arrangements in my small amendment would be able to be reviewed on that basis, prior to the expiry of the sunset clause. I believe that a review will eventually be needed for a number of reasons. I have already alluded to the first—that the amendment will need to be considered in the light of Sir Christopher Kelly's recommendations. Secondly, the weighted index built into the Baker proposal may, for some unforeseen reason, become distorted. That has happened in the past, which has required making changes to indexation. Thirdly, pensions are not fully dealt with by Sir John Baker, on his own admission, and we would be incorporating what he has said on pensions. As it happens, I have long favoured an end to the final salary scheme for MPs, starting with new entrants, and its replacement by a defined contribution scheme. In view of what is happening in the private sector right across the country, I believe that that is the only way forward. Fourthly, I am not absolutely sure that the indexation scheme being proposed by Sir John Baker as the basis for law by resolution is necessarily the best one. I would have favoured UK average earnings rather than public sector earnings as the basis, which would include the private sector. With a linkage to public sector earnings, it could be argued that MPs would receive disproportionate protection in a downswing, as now. Vice versa, of course, we would benefit disproportionately when UK Inc. is doing particularly well. These are all issues to which we can return when the sunset clause, which I hope is built into the Bill, takes effect. My final reason for suggesting an eventual review is that even if this amendment were made, there would still be some discretion left to Parliament through the vote on estimates. The only technical way of removing pay completely from the grasp of the House of Commons would be to pay MPs from the Consolidated Fund in the same way as the Speaker or judges, for example, are paid. The Government would then be unable to control the remuneration through votes on estimates, but that is a bigger issue and is not for now; it can be clarified as part of a later review. In the meantime, the amendment will do at least something to restore public trust by removing the opportunity for MPs to vote on their pay, which is, along with allowances, one of the big issues that have triggered a sense of loss of trust between MPs and the people who put us here. The amendment would ensure that pay is dealt with in accordance with the spirit of Sir John's recommendations and with the intentions of the Government as set out yesterday, with those of the democracy task force, on which I served, and also with the wishes of my own Front-Bench team. I very much hope that the Government will feel able to support the amendment.