Parliamentary Commission for Administration and Health Service Commissioner for England
(12 years, 9 months ago)
Commons ChamberRead Hansard Text Read Debate Ministerial Extracts
The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)
I beg to move,
That an humble Address be presented to Her Majesty, praying that Her Majesty will appoint Dame Julie Mellor to the offices of Parliamentary Commissioner for Administration and Health Service Commissioner for England.
Mr Deputy Speaker (Mr Lindsay Hoyle)
With this it will be convenient to discuss the following motion, on the remuneration of the Parliamentary Commissioner for Administration and Health Service Commissioner for England:
That, in the opinion of this House, the salary paid to the Parliamentary Commissioner for Administration and Health Service Commissioner for England should be £152,000 a year, a sum within the range of salaries payable to Permanent Secretaries in the civil service as required by section 2(2) of the Parliamentary Commissioner Act 1967, as amended by the Parliamentary and other Pensions and Salaries Act 1976; and that this should be subject to (a) any relevant increase for Permanent Secretaries recommended by the Senior Salaries Review Body and (b) after the end of the current pay freeze, 1 per cent. annual uprating in lieu of performance pay; and considers that in future, and subject always to the statutory requirements, the remuneration of the Parliamentary Commissioner for Administration and Health Service Commissioner for England should be agreed by the Prime Minister and the Chair of the Public Administration Select Committee in advance of the recruitment process, and reported to the House, prior to the House being invited to agree to an humble Address on such an appointment.
Mr Hurd
The first motion asks that an humble address be presented to Her Majesty, praying that Her Majesty will appoint Dame Julie Mellor to the offices of Parliamentary Commissioner for Administration and Health Service Commissioner for England. The second motion sets out the detail of her remuneration, and goes on to state that, in future, the remuneration for that role should be agreed between the Prime Minister and the Chairman of the Public Administration Committee before the start of the recruitment exercise. Dame Julie will be appointed for a non-renewable fixed term of seven years.
First and foremost, I wish to record the Government’s gratitude to Ann Abraham, who has undertaken the role of Parliamentary and Health Service Ombudsman with great commitment, independence and integrity. She has done much over the past nine years to increase the understanding of the work of ombudsmen.
The Government are also grateful to my hon. Friend the Member for Harwich and North Essex (Mr Jenkin) and other members of the Public Administration Committee for their role in the selection of Dame Julie. In a departure from previous practice, the House has led on the appointment process, working in close co-operation with the Government. The Government are pleased that the new arrangement for the appointment of the ombudsman has worked well and delivered an excellent candidate in Dame Julie. The appointment process has included the PAC undertaking a pre-appointment hearing with Dame Julie. The recommendations contained in the Committee’s two reports, published following that hearing, form the basis of the Government’s two motions and I commend them to the House.
Roberta Blackman-Woods (City of Durham) (Lab)
I thank the Minister for his remarks and I also wish to take this opportunity to express the Opposition’s gratitude to Ann Abraham for her dedication and exemplary service throughout her period in office.
We welcome the Government’s decision to open the process of selecting the new ombudsman to the scrutiny of Parliament, especially by moving the approval of the appointment to this House. The previous ombudsman was selected by an open competition managed by the Cabinet Office and the House was not able to debate the appointment. Today’s debate gives the ombudsman the fullest authority available and can only improve her position.
We very much welcome the selection and appointment of Dame Julie Mellor to the post of Parliamentary and Health Service Ombudsman. She is a fantastic choice. I understand that there were a large number of applications of the highest quality, many with relevant experience in the sector, demonstrating the importance of the role and the responsibilities it demands. Julie has a reputation for strong leadership, including turning around failing public bodies and supporting staff teams to deliver more effectively and efficiently. She has 30 years’ experience of public services and business. She really demonstrates the skills necessary for this post, including strategic leadership, an ability to influence and effective communication. She has experience of corporate governance, commissioning and leadership.
However, I have a few comments to make about the remuneration process. While we welcome the appointment of Dame Julie Mellor to this role, and support the Government’s decision to open up the process of appointment to parliamentary scrutiny, we have concerns that the same transparency and openness have not been extended to the ombudsman’s remuneration.
The ombudsman has a quasi-judicial role as a result of their sole accountability for the decisions made and, as a result, for many years the ombudsman’s pay has been set within the permanent secretary pay band at the point equivalent to that of a High Court judge. The Government have decided to change this longstanding tradition of a fixed salary. At a time when the Government are seeking to increase transparency and accountability, the decision to abandon the existing fixed-salary scheme and transfer the power of decision to an agreement between the Prime Minister and the ombudsman is incomprehensible. Indeed, the decision appears even more arbitrary when we consider that it is being done at a time when the Government are also attempting to limit the pay of public officials.
The previous fixed-salary scheme ensured that the ombudsman’s pay remained in line with that of equivalent roles. I am concerned that without this there will be no independent influence determining the terms of pay. Instead, the remuneration arrangements for the preferred candidate for the post have been negotiated directly between the Government and the candidate for the role of ombudsman, circumventing the necessary scrutiny such a decision requires. The Public Administration Committee, in its report on the ombudsman’s remuneration, has outlined considerable concerns, stating that
“this is neither a sound nor desirable way to proceed.”
The report’s conclusion stated that the Committee regretted
“the Government’s insistence on moving away from the established arrangements and substituting it with an invidious process for determining a remuneration package for the Ombudsman without prior reference to the House.”
Perhaps more significantly, this direct negotiation places the prospective ombudsman in a position with the Government that impacts on the independence from Government influence that the role requires. The Opposition believe that it is essential that the ombudsman should not find themselves needing to negotiate their salary and any future increases with the Government. The Committee’s report recommended that the Government’s motion should commit the Government and the House to the principle that in future the ombudsman’s remuneration should be agreed between the Prime Minister and the Chair of the Committee. I am pleased that the Minister’s motion has recognised the Committee’s recommendation. However, the Opposition would wish to go further and recommend that in future the ombudsman’s remuneration be approved by the House in the same way as the candidate is now approved.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
I do not intend to detain the House for long. However, with my colleagues’ permission, I would like to place one or two points on the record. In particular, I would like to join the tributes paid to the existing ombudsman, who has done such a fantastic job over so many years. Ann Abraham has stamped her authority on the office of the Parliamentary and Health Service Ombudsman. In particular, she fought a gallant battle over the Equitable Life issue. I am pleased that in the end it was resolved amicably between her and the Government. No one can say that she did not change the course of history on that question, as she has on so many minor issues that are equally important to the people concerned.
Ann Abraham will continue in office until the end of this year. She gallantly gave notice in good time that she wished to step down to give us time to decide not just to appoint a successor but how to appoint one. Traditionally, under legislation, the appointment is made by Her Majesty the Queen on the recommendation of the Prime Minister and with reference to a resolution of both Houses of Parliament. However, traditionally, the appointment process has been handled entirely by the Cabinet Office. Quite early in the process, the Public Administration Committee made it clear that we thought that this was no longer a process that reflected the present times and that Parliament should be much more at the forefront of this procedure. I am grateful that the Government readily conceded this point and handed the whole process over to the House of Commons.
I am extremely grateful to those who took part in the appointment process, notably the Principal Clerk of Select Committees, the permanent secretary at the Department of Health, Una O’Brien, who was the Government nominee on the panel, Professor Alice Brown, who is a former public service ombudsman in Scotland, David Prince, who was the external assessor appointed by the Appointments Commission, and myself. I am pleased to tell the House that we reached a unanimous decision in favour of Dame Julie Mellor. We had a strong field of acceptable candidates from which to choose and many of them were capable of doing the job, but Dame Julie Mellor has an outstanding record of achievement in the public and private sectors.
In particular, Dame Julie Mellor excelled as chairman of the Equal Opportunities Commission between 2005 and 2009. I can assure the House that we are fortunate to have her. That judgment was confirmed by the pre-appointment hearing conducted by the PAC on 6 July, which was chaired by a colleague on the Committee, the hon. Member for Luton North (Kelvin Hopkins). I absented myself as I had served on the panel and therefore had a conflict of interest. I wanted to ensure that the Committee had a free run in making its own judgment about the ombudsman. Again, she received unanimous approval from the PAC, and I am sure that the House will wish her well in her appointment.
Perhaps the more important issue to raise, however, is the ombudsman’s remuneration. As the hon. Member for City of Durham (Roberta Blackman-Woods) pointed out from the Opposition Front Bench, we have slipped into the habit of aligning the ombudsman’s salary with that of a High Court judge, which was appropriate, because, like a High Court judge, the ombudsman has the right to summon persons and papers to resolve the issues before her. However, in the interests of pay restraint, and with the Prime Minister’s salary in mind, the Government have set about trying to re-evaluate the correct salary for quite a large number of public appointments.
The Committee was, shall I say, distressed that the ombudsman’s salary was caught up in that general process. The difficulty that we had in arguing for the status quo was that the Parliamentary Commissioner Act 1967 makes no reference to a High Court judge; rather, it says that the salary should be fixed to that of a permanent secretary. Unfortunately, unlike in 1967, when the legislation was passed, the salary of a permanent secretary is a moveable feast these days. Their salaries extend from a little over—or even a little under—£100,000 to well over £200,000. Fixing the salary to that of a permanent secretary has now become an arbitrary process, although we did not feel it right for the Government simply to take the matter into their own hands. The Government were determined that we should advertise the post with a salary range that we describe in our report on the remuneration as “arbitrary”, and we are distressed that we were left in that position.
The current ombudsman has been clear that de-linking the ombudsman’s salary from that of a High Court judge leaves the office vulnerable to the charge that it is being downgraded by the Government. The office used to be analogous to that of the Comptroller and Auditor General, who now earns a significantly higher salary than the ombudsman. At some stage this matter will have to be addressed, but, as the hon. Member for City of Durham said, the most invidious part of the process is that the ombudsman, having been approved by the panel and agreed by the Government in principle, then had to negotiate her salary within the range offered by the Government, which was between £152,000 and £172,753. We did not feel it right that someone who will be responsible for holding the Government to account on behalf of complainants should have to negotiate her remuneration with the very Government whom she should be regulating. Having discussed the matter with one of two others in prominent public positions who had found themselves in the same situation, I can state that the Committee is entirely right to have concluded that this is an entirely unacceptable basis on which to proceed.
Charlie Elphicke (Dover) (Con)
It is a great pleasure to serve on my hon. Friend’s Committee. I would like to hammer home the point that the function of the ombudsman is analogous to that of a High Court judge, in that the ombudsman acts as a large-scale arbiter and provider of justice. As such, it is right and proper that the ombudsman’s salary should be on a level equivalent to that of a High Court judge. Does my hon. Friend agree that the appropriate course is for the Minister to listen to this debate, go away and reconsider the matter?
Mr Jenkin
I have great sympathy with my hon. Friend’s comment, but the Committee concluded that it would be wrong to upset the arrangements that the new ombudsman had negotiated with the Government. To her credit, she did not argue the toss. She simply said, “I want this job, I want to serve Parliament” and decided that, for her, the remuneration was not significant. However, it is instructive to quote what she told the Public Administration Committee during her pre-appointment hearing. On whether it was right to downgrade the job and to negotiate her own salary, she said:
“I have to say that I do not think it has been a satisfactory process, and I have found myself making the principled argument…around what the criteria should be for determining the pay, and I do not think as an individual I should have been put in that position.”
The Government, having accepted that principle, are addressing the matter, but I have spoken about this matter with such force because it raises questions about every single public appointment that the Government make, and the independence of the appointments is at stake.
I am bound to tell the Minister that, on the advice of the Public Appointments Commissioner, we shall return to the way in which public appointments are made in a future inquiry, because we think that the use of the Prime Minister’s salary as an arbitrary benchmark for salaries for positions such as these is neither a scientific nor a reasonable basis for making such appointments.
Robert Halfon (Harlow) (Con)
Like my hon. Friend the Member for Dover (Charlie Elphicke), I served on the Committee that interviewed Dame Julie Mellor, and I agree that she gave an outstanding interview. Will my hon. Friend the Member for Harwich and North Essex (Mr Jenkin) acknowledge that she is taking a substantial pay cut to take on the job of ombudsman?
Mr Jenkin
My hon. Friend is absolutely right. Since Dame Julie ceased to be chair of the Equality and Human Rights Commission, she has been working in the private sector and earning substantially more than she could ever hope to earn in the public sector. For that reason, she felt that she was going to take a pay cut anyway, and the differences that were being argued about were not worth any suggestion of compromising her independence. She has argued, however, that she should never have been left in that position. This also has a lesson for other appointments—particularly, perhaps, that of the chair of the United Kingdom Statistics Authority. In that instance, with a more limited field of candidates, the Government’s preferred candidate has withdrawn her name, so we shall have to go through a reappointment process. Perhaps if the right salary and conditions had been set at the outset, rather than being arbitrarily cut by the Government, we would not now be facing that situation.
I wish to be charitable to the Government, however. I thank them for addressing this matter, and they have agreed in principle that these things should be done differently next time. They have agreed that the salaries should be decided between the Chair of the Public Administration Committee and the Prime Minister before the recruitment process starts, so that when the position is advertised there is no question of the candidate having to arbitrate his or her salary after the appointment has been made.
In closing, I invite the Minister to recognise that this is the system that is effectively being put in place for the Comptroller and Auditor General, and that the salary should be agreed between the Chair of the Public Accounts Committee and the Government. Should not this also be reflected in the legislation for the ombudsman? The “Open Public Services” White Paper, which was published last week, suggests that the Government will amend the powers of the ombudsman in respect of tendering for public services, and there might well be other changes to the office of the ombudsman in the next year or two, particularly with regard to public access to the ombudsman, which at the moment is not general but is confined to health service complaints. Does the Minister agree that it would be preferable for stability in the salary to be reflected in legislation, to protect the independence of the position in future, rather than relying on horse trading between a Select Committee and the Government, which is how we have to proceed at the moment? I invite the Minister to give us some assurances on those points this evening.
Mr Kevan Jones (North Durham) (Lab)
I should like to start by agreeing with what the hon. Member for Harwich and North Essex (Mr Jenkin) said about the role that Ann Abraham has played as parliamentary ombudsman. As Members of Parliament, many of us will have referred cases relating to the Child Support Agency and tax credits to her. She and her staff have dealt with those cases very efficiently and ensured that those people, who had had awful experiences at the hands of the system, got some redress. I should also like to welcome the appointment of Dame Julie Mellor to the post. She has considerable experience in the public and private sectors, and her enthusiasm for the role was evident during her interview with the Public Administration Committee.
The Government have not handled the issue of remuneration well. With their spin agenda and attempt to translate sound bites into policy, they do not understand one thing about the parliamentary ombudsman. There seems to be a difference between what the sound bite element in the Conservative party comes up with and putting things into practice. They are creating long-term problems for the Government in respect of the parliamentary ombudsman’s position. Her decisions, which will often criticise Departments for their dealings with our constituents, should be independent of the Government and this House.
It is in our interests as Members of Parliament to ensure that the ombudsman is as independent as possible. However, I do not think it is possible for her to be independent when she has to negotiate her own pay with the Government. I am not suggesting for one moment that Dame Julie Mellor is going to be influenced by money; clearly, as has already been said—by the hon. Member for Dover (Charlie Elphicke), I believe—she took a pay cut to do the job in question. We hear the rhetoric about being on a par with the Prime Minister’s salary, but no policy decisions have been made on that and no evidence has been provided on why the benchmark for senior positions should be the Prime Minister’s salary.
Since I have been in the House—the last Labour Government might have been as guilty as this one—independent bodies have been asked to decide on remuneration, but when Governments did not like the outcome, they changed it or argued against it. That might be justifiable when it comes to MPs’ pay, which we put out to an independent body. The first thing the Government did was to stop us taking the increase, which was to be over many years, taking our pay further and further down. There is a big difference between that and the ombudsman, who has to be seen to be independent from the Government. It is not acceptable for the Government or Executive to be able to exert any levers over the ombudsman.
There is a lot of inconsistency in what has been done. The hon. Member for Harwich and North Essex raised the issue of the Comptroller and Auditor General—another post that should be independent of the Government—but his salary range goes from £210,000 to £214,999. The point made by the hon. Member for Dover is right: with a link to a High Court judge, it is the independence of the person that counts. Controlling things in the way the Government have done—to be honest, I do not think they have done it intentionally; it is just that the soundbites have got the better of them—shows that they have not thought this through. If we are to have this nonsense whereby the Prime Minister’s pay is the benchmark, I ask the Minister to provide at least some justification of why and how it is formulated.
It is important to understand the history of the parliamentary ombudsman and the health service ombudsman. The Committee’s report was good both in questioning why things had been changed and in saying that the previous situation, although it had arisen largely as a result of tradition, was at least a justifiable way of determining the individuals’ pay.
Schedule 1 of the Health Service Commissioners Act 1993 says that where a person holds the office of parliamentary ombudsman and the office of the health service ombudsman, they are entitled to draw a
“salary pertaining to the office of the Parliamentary Commissioner.”
Section 2 of the Parliamentary Commissioners Act 1967 sets out the salary provisions for the parliamentary ombudsman, and section 2(1) states:
“There shall be paid to the holder of the office of Commissioner the same salary as if he were employed in the civil service of the State in such appointment as the House”
may resolve from time to time. The Act states that, in the absence of a resolution passed by the House, the salary payable to the ombudsman
“shall be the same salary as if he were employed…as a Permanent Secretary.”
Over time, the way in which civil servants are remunerated has changed. The current annual salary of permanent secretaries ranges from £140,000 to £239,999. There is also the bonus culture, of which, as a former trade union official, I am not in favour. To give the impression that civil servants’ pay is being kept down, the basic salary is kept down but bonuses are paid as well. Civil servants may be on the lowest scale of £140,000 a year, but by the time they have received their bonuses—and various other payments—they are earning considerably more.
The salary of the Cabinet Secretary and Head of the Home Civil Service ranges from £235,000 to £239,999. The salary of the chief executive of the national health service ranges from £210,000 to £214,999. The annual salaries of the permanent secretaries of the Departments that are responsible for most complaints to the ombudsman range from £170,000 to £174,99 and from £180,000 to £184,999.
It will be asked why that matters. I believe that it matters because of the status of the ombudsman herself. That can best be explained by means of an exchange of letters between the present ombudsman, Ann Abraham, and the Prime Minister, which revealed that the current salary was analogous to that of a High Court judge in salary group 4, which is £172,753. As the hon. Member for Dover pointed out, we are asking such people to act in a quasi-judicial capacity, and I think it important that they not only retain their status but cannot be influenced by Government.
In a letter to the Prime Minister dated 11 April 2011, Ann Abraham wrote:
“The existing arrangement provides an objective and effective mechanism for determining the Ombudsman’s salary, and any increases to it. It gives Parliament assurance that an Officer of the House is being appropriately remunerated and it provides clarity and certainty for the Ombudsman. It enables Government to reject out of hand any suggestion that Ministers or officials are applying undue pressure or offering inappropriate rewards to the Ombudsman.”
She went on to object to the salary bands proposed by the Government.
I think that it was right to link the ombudsman’s salary with that of a High Court judge, because it meant that the ombudsman, either on appointment or each year, would not interfere with, or have some influence over, his or her pay, and it removed the danger, which may be posed by the salaries of the many civil servants who earn much more than the ombudsman does now, that the person concerned would be influenced by his or her salary level. Continuing to do that would also dispense with the nonsense that if we are not careful—I will say more about this in relation to the motion concerning the increase in the salary of the new occupant of the post—it will be necessary to negotiate every time there is a new Government, or if the salary becomes pegged below its present level when the economy becomes buoyant in the next few years and pay restraint is removed.
Mr Peter Bone (Wellingborough) (Con)
The hon. Gentleman is making a detailed and valid point, but MPs, too, have to hold to account people who are earning a lot more money than them. Is there not a correlation between that point and the argument he is making?
Mr Jones
There is—and quite rightly. Because of previous Governments’ and this Government’s pegging of MPs’ pay, many people, even some quite low-level local government workers, are earning considerably more than us. In terms of the process that we are addressing however, it is important that the ombudsman is independent of, and cannot be influenced by, Government. We have a slightly different relationship with the individuals to whom the hon. Gentleman has referred.
These measures were all brought in on the basis of pay restraint. A lot has been said about trying to cut senior salaries. I have already mentioned the Auditor General’s pay, and there seems to be some inconsistency across Government about where this restraint should apply. If we are going to make exceptions, I cannot see why things were changed here, as opposed to, say, for Bernard Gray who was appointed Chief of Defence Materiel at the Ministry of Defence by this Government on a salary of £250,000 a year, plus a potential bonus of £30,000. I know that that is a very important job; it delivers equipment to our armed forces. I have no objections to Bernard, either; I know him well, and he is a very fine individual. However, if the decision was taken to break the principle of the Prime Minister’s salary being the ceiling in that case, I do not understand why the Government have intervened in that way in this other case.
The Prime Minister’s letter of 21 June reveals a lot about the attitude to pay restraint policy. I do not think he has understood the process. What we are doing here is going away from quite a well-thought-out system to one that has now brought into doubt whether not only current Ministers and Governments, but others too, could influence these areas in future.
Mr Jenkin
I think that the hon. Gentleman will find that when he served as a Minister, civil servants received performance-related pay and quite substantial salaries. Indeed, larger salaries were probably offered to public officials than the current Government are offering. I am therefore not quite sure what his complaint is. Does he now recognise that the Government have conceded the principle of what he is arguing in the wording of their motion, in that in future the salary will be agreed between whoever holds my office of Chair of the Select Committee on Public Administration and whoever is Prime Minister
“in advance of the recruitment process”
starting, so there will be stability in the salary at the outset of the recruitment process? I am therefore not quite sure what the hon. Gentleman is arguing with the Government about now.
Mr Jones
The hon. Gentleman has not won a great victory here, because he has no powers of determination now in respect of the existing salary, unless he is going to be able to go back and negotiate—be the shop steward—on behalf of the ombudsman each year to increase her salary. A mechanism would be better.
What is the difference between this instance and the cases of other individuals—such as the MOD example that has been given—in terms of the pay restraint policy that the Government are introducing? Another problem is where to start in terms of the salary band. As the motion says, the individual would get an increase, but that will be forgone at the moment.
Mr Jenkin
Is the hon. Gentleman seriously suggesting that we should have come back to the House of Commons, with the new ombudsman having negotiated and agreed her salary at the current level, demanding that the House of Commons vote for a higher salary than she has agreed? In these straitened times I think that the British public would have found that difficult to understand. Starting from now, we have come up with a much better solution to sort this out for the future without embroiling the new ombudsman in a silly controversy that would have distracted from the seriousness of her office.
Mr Jones
The hon. Gentleman cannot have it both ways. He cannot say that he is objecting to the arrangement and that he has obtained some kind of victory for the future when he has not. I am sorry to say that what was wrong was the fact that the Government intervened by imposing an arbitrary cap and then saying to the ombudsman, “Sit down and negotiate your pay.” He has obtained something for the future but it is not going to affect the starting salary or the situation now. He is asking whether it would have been wrong for his Committee to have suggested something, but it could have proposed a mechanism that would have possibly increased a larger salary. If it is okay for Bernard Gray at the MOD to be paid £250,000 a year plus bonuses, why are the Government not having consistency across the board? This is a very important job, as it involves independence from the Government and from Parliament, and it is wrong for the Government to be interfering.
Charlie Elphicke
I say to the hon. Gentleman that under the previous Government there was a lack of ability to check pay and keep it to the correct level. As a matter of policy, it is right, in general, that officials should not be paid more than the Prime Minister. Nevertheless, the failure and misunderstanding of the policy in this particular case relates to the fact that the ombudsman’s role is akin to that of a High Court judge, and her office means that she should be treated in the same manner as a High Court judge. That is what I hope Ministers will consider, and will perhaps reflect upon and act upon.
Mr Jones
I know that the hon. Gentleman is a new Member, but he is living in hope if he thinks that any future Government are suddenly going to throw money at individuals once the salary has been set; he is being a bit naive to say the least. He makes an interesting point about the figure of £142,500. The policy is that nobody should earn more than that. Why? Where has that come from? We know where it came from. It came from the soundbite machine at the general election, from this Government and from a Prime Minister who does not need the salary in any case, because he has independent wealth. If someone could argue that that was the proper level for the job, that would be fine and I would have no problem with it. However, no evidence is being put forward to support that figure of £142,500. That is an absolute fortune, and most of my constituents could only dream of earning anything like that, even in 10 years, let alone in one year. None the less, I would have more respect for the Government’s approach if there were an evidence base to suggest that that figure was the norm, rather than people plucking it out of thin air and then trying to give an impression that it is the norm and capping the pay of the ombudsman—the one post that it should not have been applied to—while having different arrangements for other positions, such as the MOD example that I gave, and others.
I opposed bonuses when I was a trade union official, and the hon. Gentleman is right about our approach. The last Government used them all the time; we tried to say that we were keeping civil service pay down but we were paying bonuses instead. I was always against bonuses because they do not accrue in terms of pensionable entitlements. Let us be honest and say that the Government should try to get away from this whole idea.
The Government have put forward the same argument in respect of local government. The idea that cutting the salary of the chief executive of Durham county council by £5,000 a year or £10,000 a year will actually make a difference in delivering £140 million-worth of cuts over the next three years is completely bonkers. It is nice for the newspapers and it is a nice soundbite at elections, but it does not do the job. What we need in all these situations, as we need in any organisation, is well-thought-out remuneration structures. I am not happy about the cosy relationship between the Chair of the Committee and the Prime Minister in determining the salary of this individual. What the Committee should have proposed are the proper, thought-out, independent salary review processes that we need. As I said before, all Governments try to ignore them when they do not quite fit what they are arguing for, but that is what we need in this case.
The Government have done the ombudsman a huge disservice by intervening in such a way. I feel sorry that she is now lumbered not only with this salary but with a feeling that she somehow has to negotiate her own salary. The Committee did not pull its punches. It said:
“We believe that this is neither a sound nor desirable way to proceed.”
One of the many things about the Government that concern me is the fact that they are completely ignoring processes in devising any type of policy. That leads not only to inconsistencies but to changes that will have an effect, over time, on how the ombudsman service is seen.
My final point concerns the motion. We will agree a salary of £152,000, which the motion says is
“within the range of salaries payable to Permanent Secretaries”.
It is and, as I have already demonstrated, it is not. There are some who are on possibly £100,000 more than that and who are eligible, as the ombudsman is not, to receive annual bonuses. The hon. Member for Dover is right. On some occasions in the Ministry of Defence, I could never quite work out which targets some people got bonuses for meeting. Bonuses were used as a way of avoiding giving pay increases.
The motion says that the salary should be subject to
“any relevant increase…recommended by the Senior Salaries Review Body and…after the end of the current…freeze, 1% annual uprating in lieu of performance pay”,
and that the House considers
“that in future, and subject always to the statutory requirements, the remuneration of the Parliamentary Commissioner…should be agreed by the Prime Minister”.
That is fine for the future, but why 1%? What is that figure based on? Trying to do something at the end is not very satisfactory. Although the motion will be passed tonight, the Government have a lot of questions to answer about why they have intervened in such a way.
Sir Peter Bottomley (Worthing West) (Con)
The hon. Member for North Durham (Mr Jones) has spoken in a way that has interested the House. If I say that he has managed to say in 23 minutes what he might have said in three, I hope he will take that as a compliment.
The essential point of the second motion is that the pay of the parliamentary ombudsman should be set in advance. There is a lack of clarity about whether that will be done before the appointment is advertised. Today, if the motion goes through, I shall be voting for the first time in 36 years for something that I think is seriously wrong. It is wrong to advertise a post and then negotiate with the person who is chosen and reduce the pay after the appointment has been offered. That is wrong. One can understand why the Government might have done it, but that does not make it right. Controlling spending is necessary, but to do it after an appointment has been offered is wrong.
I could say that many more times, but the fact is that this decision is one thing the House has done that is equivalent to what happened when Elizabeth Filkin was chosen to be the Parliamentary Commissioner for Standards. Her number of days was reduced, her pay was reduced, her appointment should have been renewed because in those days it was not a non-renewable appointment, and in her last week this House agreed to pay her the £30,000 she had been underpaid during her years of service. If I may make a remark about a former holder of the office of Chair, when the former Speaker said in her memoirs that she did not approve of the commissioner or of some action, I thought that was wrong as well.
Mr Jenkin
I feel compelled to intervene on my hon. Friend because I do not think it is accurate to say that the Government cut the salary after the post had been advertised. They notified the House of Commons that they did not wish to pay as much as the existing salary and the recruitment panel was left in the invidious position of wondering how to advertise the post. The strong advice we received was that we should advertise a fixed salary, but the Government would not allow us to do so. We advertised based on the existing salary, but that was qualified and the candidates were informed during the recruitment process that it was subject to alteration. It was not a satisfactory process, however, so the spirit of what my hon. Friend is saying is absolutely right.
Sir Peter Bottomley
I am grateful to my hon. Friend and I congratulate him and the Government business managers on finding a motion that could get through the House. The essential point remains however—I think I am right in saying this—that the salary negotiation took place after the person had been chosen, and that is wrong. Although I was not part of the process, I understand that the candidates were strong and that almost any of those who were well-qualified to be chosen could probably have decided to take the job at no pay if it had been advertised at no pay because it is an important position of public service to the people of this country and, indirectly, to improve the government of the country. The essential point is that we should never again start negotiating with someone who has been offered a job in competition by saying, “At what level will you do it?”
My hon. Friend the Member for Harwich and North Essex (Mr Jenkin) referred to the UK Statistics Authority, whose report was published today. The report rightly says that its aims, with the Office for National Statistics, are respect—I do not think that aim has been met in this case—and working together to make a difference, which is true. Another of its aims is being proud of what has been done and always trying to do it better. In terms of trying to do things better I am not sure that, without a framework, it is correct for the Prime Minister and the Chairman of the Public Accounts Committee to decide rates of pay. We need to have a framework and then we can say, “This is what it would appear to be—it should be up or down on that.”
I ought to have started by saying that I approve of the selection of Dame Julie Mellor and that I would have approved of the selection of any of those on the shortlist because I agree with my hon. Friend the Member for Harwich and North Essex that any of those who got to the shortlist could have been appointed with honour and distinction. However, let me make a less important point. Motion 9, which is being taken with the lead motion, refers to the rate of pay which is
“subject to (a) any relevant increase for Permanent Secretaries recommended by the Senior Salaries Review Body and (b) after the end of the current pay freeze, 1 per cent. annual uprating in lieu of performance pay”,
and it goes on to things we have discussed already. I do not think those conditions are right. We ought to say that the rate of pay for someone holding that office should not change at all, as with Members of Parliament between general elections. We ought to say that, although there might be some inflation or even deflation, the rate of pay for someone holding a position that goes from appointment to a point at the end of service, or, as for us, from one general election to another, should remain the same. I do not think that 1% in lieu of performance pay dignifies the office, is necessary or makes sense, but that is not to be amended.
Mr Jenkin
I share my hon. Friend’s concern about this but the problem is the legislation, which allows the salary to be determined only in relation to that of a permanent secretary. That is why I invited my hon. Friend the Minister to give an assurance that we will, at the earliest opportunity I hope, update the legislation.
Sir Peter Bottomley
I shall conclude my remarks by joining in the praise for Ann Abraham and the way she has fulfilled the job, and I look forward with anticipation to Dame Julie Mellor’s doing the same.
I do not think anyone in the House thinks it was the Minister’s idea to get us to this position, although he might have helped us out of a difficulty. I hope that he will say to ministerial colleagues that it would be better to get my hon. Friend the Member for Harwich and North Essex, as Chairman of the Public Administration Committee, and others together to create a framework so that we avoid any possibility of dropping ourselves into such a mess again. I leave aside the fact that Dame Julie Mellor is female and that the House has a record of saying to people, “We’re going to change the terms of the job and a woman will do it.” There are other times when I may be more explicit about such things, but there is an opportunity to say here, with approval for Dame Julie Mellor and disapproval for the way we got ourselves into this fix, that we expect the Government to take on their responsibility and, with others, find a way of resolving it for the future.
Kelvin Hopkins (Luton North) (Lab)
I shall speak briefly to say some positive things about both Ann Abraham and Dame Julie Mellor. I was a member of the Public Administration Committee for eight years in the previous Parliament and met Ann Abraham on many occasions, saw her at work and interviewed her many times. She was always first class. She was steadfast, highly intelligent, a genuine representative of the people she served, and loyal to Parliament. She sometimes had to take stands on behalf of citizens and of Parliament in the face of the Government, who were sometimes unwilling to accept her recommendations. In the end, she won through with the unanimous support of the Public Administration Committee, which I was pleased about. Ann Abraham has done a tremendous job and I am sure other eulogies will be made when she retires at the end of the year.
Because the Chairman of the Select Committee, the hon. Member for Harwich and North Essex (Mr Jenkin), was on the appointment committee, I had the privilege of chairing the pre-appointment hearing. That was not just a privilege, but a pleasure. Dame Julie came before us and was subjected to an hour of questioning. Each member of the committee asked several difficult and searching questions and she came through with flying colours. She was absolutely the right person for the job and I compliment the hon. Member for Harwich and North Essex and his colleagues on recommending her appointment. They have got exactly the right person.
I am confident that Dame Julie will be a worthy successor to Ann Abraham. It was a pleasure interviewing her. We enjoyed the experience. For her, it may have been something of an ordeal but, as I say, she came through it very well indeed and will be a great success in the post. I add my support for the appointment.
Mr Hurd
There have been sincere tributes from both sides of the House to the work of Ann Abraham, and it is clear that she has made an outstanding contribution. Her legacy will be a valuable and lasting one, not least, as my hon. Friend the Member for Harwich and North Essex (Mr Jenkin) said, in relation to Equitable Life.
I am delighted that there is such consensus about the qualities of Ann Abraham’s successor. Dame Julie Mellor’s record as chairman of the Equal Opportunities Commission demonstrates that she is able to perform well in a high- profile and sometimes controversial role, and is prepared to assert her independence and authority when required— all crucial traits, I am sure we agree, for a successful ombudsman.
A number of Members have made points about the remuneration arrangements for the role. The Government make no apology for subjecting highly paid public sector roles, particularly those paying more than the Prime Minister’s salary, to a strict policy of scrutiny and pay restraint, and do not believe that this undermines the status and independence of the ombudsman role. As set out in the motion, Dame Julie has agreed to accept an annual salary of £152,000, which will be subject to the current public sector pay freeze. Thereafter, the remuneration will be uprated in line with the text of the motion.
Sir Peter Bottomley
I do not make this as a personal remark. Could my hon. Friend consider, with his colleagues, making a written ministerial statement any time the Government next intend to negotiate the pay after a candidate has been chosen?
Mr Hurd
That leads me on to my next remark. The Government have reviewed the way the process was conducted and have been quick to accept the Public Administration Committee’s recommendation that for future appointments to the role, the remuneration arrangements should be agreed between the Prime Minister and the Chairman of that Committee before the start of the recruitment process. This commitment is reflected clearly in the Government’s motion.
My hon. Friend has raised the possibility of using any legislation coming out of the Government’s recently published open public services White Paper to enshrine these new arrangements in statute. As he knows, the Government’s proposals in relation to the ombudsmen set out in that White Paper are at an exploratory stage, and it is too early to know what may be required in terms of legislative reform, but the crucial point is that the Government are committed to these new arrangements going forward and that commitment is clear from the terms of the motion. Subject to the outcome of that debate, should a suitable legislative opportunity arise in the future, the Government will give serious consideration to enshrining the new appointment and remuneration arrangements in statute.
Sir Peter Bottomley
On a point of order, Mr Speaker. Would it be possible for the Chair of the Public Administration Committee to make the point that he was hoping to make?
Mr Speaker
No.
Question put and agreed to.
Resolved,
That an humble Address be presented to Her Majesty, praying that Her Majesty will appoint Dame Julie Mellor to the offices of Parliamentary Commissioner for Administration and Health Service Commissioner for England.
Parliamentary Commissioner for Administration and Health Service Commissioner for England (Remuneration)
Resolved,
That, in the opinion of this House, the salary paid to the Parliamentary Commissioner for Administration and Health Service Commissioner for England should be £152,000 a year, a sum within the range of salaries payable to Permanent Secretaries in the civil service as required by section 2(2) of the Parliamentary Commissioner Act 1967, as amended by the Parliamentary and other Pensions and Salaries Act 1976; and that this should be subject to (a) any relevant increase for Permanent Secretaries recommended by the Senior Salaries Review Body and (b) after the end of the current pay freeze, 1 per cent. annual uprating in lieu of performance pay; and considers that in future, and subject always to the statutory requirements, the remuneration of the Parliamentary Commissioner for Administration and Health Service Commissioner for England should be agreed by the Prime Minister and the Chair of the Public Administration Select Committee in advance of the recruitment process, and reported to the House, prior to the House being invited to agree to an humble Address on such an appointment.—(Mr Hurd.)