» Wednesday, January 16, 2008

Senior Salaries Review Body

The Prime Minister’s Spokesman (PMS) began by informing Lobby that the Written Ministerial Statement had just been laid giving the Government response to the Review Body on Senior Salaries Report on Parliamentary Pay, Pensions & Allowances. We had also published copies of the report.

The key points were:

  • The recommendation for 2007/08 was for an increase of 2.56% and then for future years linked to the increase of the base pay of senior civil servants plus £650.
  • The Governments response to this was that we were proposing to stage the increase for 2007/08 so that the total increase for 2007/08 would be 1.9% in line with the Government’s broader public sector pay policy for that year.
  • With respect to future years we were saying that this should all be subject to the report being undertaken by Sir John Baker on the mechanism for setting the Government pay.
  • Obviously the staging of MP’s pay also applied to Ministerial salaries which would go up by 2007/08.
  • With respect to pensions, the Senior Salary Review Body had recommended that future holders of the offices of Prime Minister, Lord Chancellor and Commons Speaker were covered by the parliamentary pension and severance arrangements that applied to Secretaries of State rather than pension arrangements that applied now. At the moment the Prime Minister, Lord Chancellor and Commons Speaker have their own separate pension arrangements, and they were saying that for future holders of those offices, their recommendation was that effectively these schemes should be abolished and that holders of these posts should be subject to the same pension arrangements as other Secretaries of State. The Government accepted this recommendation with respect to Prime Ministers and Lord Chancellors, and in addition the current Prime Minister and current Lord Chancellor had decided that this would also apply to them. The Government did not propose to implement this recommendation with respect to future Commons Speakers as it considered the position of the Speaker to be substantially different to that of a Prime Minister or Lord Chancellor.

Asked what this meant in monetary terms for the Prime Minister and Lord Chancellor, the PMS replied that he did not have those figures to hand.

Asked if there had been any resolution of the ongoing disagreement between the last Lord Chancellor, Lord Falconer, and the Prime Minister about pensions in the light of all this, the PMS replied that his understanding was that the situation had not changed.

Asked if it was also correct that what the current Lord Chancellor had agreed was what the Prime Minister would like to do to Lord Falconer, the PMS replied that this was a fair interpretation of the position. The key point was that it was consistent with previous statements from the Government when there was a reform of the position of Lord Chancellor in 2003.

Asked if the Speaker had been consulted on this, the PMS replied that the Speaker had been consulted.

Asked if we were effectively saying that the Prime Minister and the Lord Chancellor would be taking a pension cut, the PMS replied that it would depend on all sorts of factors such as length of service for example.

Asked if it also affected when it cut in as the Prime Ministerial pension cut in as soon as they left office, the PMS replied that whatever the current rules were for Secretaries of State, that would apply in future to the Prime Minister.

Put that this was pretty significant as Tony Blair for example has ten years of pension at £65k a year, whereas a future Prime Minister retiring at the equivalent age would have to wait until they were 65, the PMS replied that whatever the rules were for existing Secretaries of State would in future apply to the Prime Minister.

Put that the Prime Minister was potentially foregoing quite a substantial sum of money, the PMS replied that if it was the recommendation of the Senior Salary Review body that this should apply to future Prime Ministers, it was in his gift for that to apply to current holders of the post as well.

Asked why he has decided that this, the PMS replied that the Prime Minister accepted the principal set out by the Senior Salaries Review Body for the reasons set out in their report that it should apply to future Prime Ministers. And if it applies to future Prime Ministers, and he is still in post, then he thinks it should apply to him as well.

Asked how we would find out the details of what this meant in monetary terms, the PMS replied that Lobby should check with the Cabinet Office. But much depended on his length of service.

Asked if there was any difference between the approach to pay compared to the approach to MPs’ pensions, whereas we were holding down the rise in pay to 1.9%, MPs were being assured that they would get protection at 2.8% on their pensions, the PMS replied that to be honest he thought this was a bit of a red herring. The pension provision applied to your salary at the end of the financial year, which was true for everyone in the public sector. Since we were staging the increase, by the end of the financial year your salary was the same as what it would have been had we not staged it. That was true of everyone in the public sector, so was a position that was applied consistently across the board.

Put that the SSRB also recommended that consideration should be given to ending the current pension arrangements for MPs, and asked if the Prime Minister supported this, the PMS replied that on that the Prime Minister thought this was a matter for the House to decide.

Asked if the Government’s view was that the overall pensions scheme should be more lucrative for MPs to compensate to the cap on their pay, or would it be staying much the same, and the same for allowances as staff allowances had been increased from 3 to 3.5, the PMS replied that the position was as set out and he did not have anything further to add to that. Nobody was suggesting any linkage between a decision made in relation to one year in relation to the staging of pay, and the wider package of recommendations set out here. It was not a trade off between one or the other.

Asked what difference the pension package was likely to make, and were most MPs likely to end up with a more or less rewarding pension, the PMS replied that it would entirely depend on their individual circumstances. But it was best to check with Cabinet Office what this would mean for typical MPs.

Asked if MPs would be whipped on this, and would they vote on the Prime Minister’s pension arrangements as well as their own salaries, the PMS replied that he did not know whether the Prime Minister’s pension would be subject to a vote. With respect to the pay increase, it would be a free vote but the Prime Minister had made his position very clear on this.

Asked how a cap would work, the PMS replied that detailed questions on this should be put to the Cabinet Office.

Put that for the financial year 2007/08 the calculation for the SSRB’s recommendation ended up with the same final figure of £61,820 both under the Government’s proposal and the SSRB proposal, but there was a figure in the SSRB proposal of 0.66% already in payment, and was this already in their pay packets, the PMS replied that he thought this correct. The key point was that the total amount of income an MP would receive over the year would have been 2.56% higher under the SSRB proposal. Under our proposal it was 1.9% higher, even though it was the same figure at the end because it was staged.

Asked why the Prime Minister thought the SSRB was right on pension arrangements for the Prime Minister and Lord Chancellor, the PMS replied that the reason was set out in some detail in the SSRB’s report, and the Prime Minister accepted their reasoning and analysis.

Asked if the Prime Minister consulted the Leader of the Opposition on the pension arrangements for future Prime Ministers, the PMS replied that these were Government proposals we were setting out. How the other parties reacted was obviously a matter for them.

Asked if the proposal put before the House would include the proposal to change the way in which MPs’ pay is decided, the PMS replied that this was not the case as it was subject to a review.

Asked when this would come to a conclusion, the PMS replied that it would be sometime later this year.

original source.

Briefing took place at 16:45 | Search for related news

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