Downing Street Says » MP and Ministerial Pay/Baker Report

The PMS said that there was a discussion at Cabinet this morning on the issue of MP and Ministerial pay. As the journalists were aware, the Baker Review was being published this morning. The key point to take from Harriet Harman’s Written Ministerial Statement (WMS) was that there were two recommendations in particular that the Government did not accept. The first of these was a recommendation from Sir John Baker that there should be catch-up payments for MPs of £650 per year for the next 3 years, which Harriet Harman referred to in her WMS by saying that the Government did not accept the recommendation and that MPs should be setting an example at a time of public sector restraints.

The second recommendation that the Government did not accept was that MPs’ pay should rise in line with the public sector average earnings index. The Government instead proposed, in line with an alternative proposal provided by Sir John Baker, that MPs should receive the average of the settlements of a wide basket of public sector workers.

The PMS also brought to the journalists’ attention the Prime Minister’s WMS on MPs’ pay and that the Government was accepting the recommendations of the Senior Salaries Review Body across a number of areas. The PMS referred the journalists to the final page of the Prime Minister’s WMS where it said that, given the importance of public sector pay restraint at a time of economic uncertainty, Ministers would not be accepting any pay rise in 2008/09; this was agreed at Cabinet.

Asked if there were indicative figures regarding the average settlements of the basket of public sector workers in relation to MPs pay, the PMS said that we did not have the exact figures as it depended on what the settlements were for the groups in the comparator basket. However, the sort of groups that could be in the basket included senior civil service, the judiciary, the senior military, senior NHS managers, doctors and dentists, as well as other senior workers in the public sector. It was important to remember that in a number of these areas there were still negotiations outstanding so at this point it was not possible to give the exact figure.

Asked if Ministers had all individually accepted that they would not get a pay rise in 2008/09, the PMS said that the Cabinet decided this morning that Ministers should not accept a pay rise.

Asked if there was a vote, the PMS said things did not normally go to vote at Cabinet, but that there was unanimous agreement this morning that this was the right thing to do.

Asked what percentage Ministers were giving up, the PMS said that the convention in recent years had been that Ministerial pay normally rose broadly in line with pay increases for senior civil servants. It was difficult to put an exact figure on it but that had been the convention in recent years.

Asked about the senior civil service 7% pay envelope, the PMS said that the 7% was over 3 years and that 1.5% was what it would be for the first year.

Asked if the 7% was an accumulative rise over 3 years that started off with 1.5%, the PMS said that that was a general characterisation and that it was cumulative so it was not simply a case of taking the arithmetical average of the three years. It was best to speak to the Cabinet Office for details.

Asked if the Government was trying to set an example to the private sector, the PMS said that these were matters for individuals to take and referred journalists to the Chancellor’s letter to Mervyn King where he said that continued restraint on pay was required from both the public and private sectors.

Put that, in the past, senior members of the Cabinet had argued against this sort of restraint and that they had a right to get the rate for the job they did, the PMS said that the Cabinet had taken the decision they had because of the particular importance of public sector pay restraint this year.

Asked if there had been a discussion about this at Cabinet or just an announcement from the Prime Minister, the PMS said that there was a general discussion around the whole issue of the economy. That was then followed by a discussion specifically on the Baker review and MPs’ pay, which included a discussion on Ministerial pay; it was not the case that each item was taken point by point as it was more a general discussion.

Asked if there were two sides to that discussion, the PMS said that all members of the Cabinet agreed with the decision that they came to.

Asked how the discussion took place and if the Prime Minister introduced it, the PMS said that he did not want to get into the specifics of the Prime Minister’s meetings but that there was a general discussion on the issue of MPs’ pay and allowance, of which this was a part. It was proposed by the Prime Minister and accepted by Cabinet, but there would have been discussions in advance of Cabinet.

Put that it was just a recommendation and that Ministers did not have to adhere to it, the PMS said that the Secretaries of State at Cabinet were representing the interests of their own Ministerial teams.

Put that the Ministers would be giving up 1.5% this year and asked if the restraint was just for one year, the PMS said that it was for 2008/09 i.e. one financial year.

Asked what would happen to pensions in light of this, the PMS said that this was about pay.

Asked if the Government was leading by example and expecting groups such as judges, the military, doctors and dentists to follow suit, the PMS said that that was not what we were saying; the pay for those groups was set on the basis of recommendations from the pay review bodies. Most of the pay deals for these groups had already been agreed.

Asked if the Government was hoping to set a wider example, the PMS said that the Prime Minister’s WMS made clear that at this time of public sector pay restraints, the Cabinet decided that it was important that Ministers accepted a pay freeze for this year, but that we were not proposing changes to the arrangements for other groups.

Put that the Government had accepted the recommendation that the Senior Salaries Review Body should continue to review and report but that they should use as their guide when making a decision, the average settlements, the PMS said that this was correct.

Asked if the Prime Minister expected the Scottish, Welsh and Northern Irish executives to follow suit, the PMS said that that would be a matter for them.

Asked what message the Prime Minister was trying to send out, the PMS referred journalists to the language that the Prime Minister used in his WMS and the importance that the Cabinet was attaching to public sector pay restraint at this time of economic uncertainty and that that was why they were not accepting a pay rise.

Asked what the grounds were for not accepting the two recommendations, the PMS said that the grounds were set out quite clearly in Harriet Harman’s WMS.

Asked if it would be a 3-line whip when it went to a vote at the House of Commons, the PMS said that votes on MPs’ pay were usually free votes.

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» Tuesday, June 17, 2008

MP and Ministerial Pay/Baker Report

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