PP 2016/0111

STANDING COMMITTEE OF ON EMOLUMENTS

FIRST REPORT 2015-16

REMUNERATION FOR SCRUTINY ROLES

FIRST REPORT OF THE STANDING COMMITTEE OF TYNWALD ON EMOLUMENTS 2015-16: REMUNERATION FOR SCRUTINY ROLES

The Committee shall -

(i) consider and report to Tynwald on -

(a) the emoluments of H E Lieutenant Governor, their Honours the First and Second and the Judge of Appeal, H M Attorney General, the High Bailiff, the Deputy High Bailiff and the Clerk of Tynwald;

(b) the Tynwald Membership Pension Scheme; and

(c) in addition to its consultative functions set out in paragraph 4.3(ii) and as it thinks fit, the emoluments of Members of Tynwald;

(ii) carry out its consultative functions under section 6(3) of the Payments of Members’ Expenses Act 1989, as the body designated by the Payment of Members’ Expenses (Designation of Consultative Body) Order 1989.”

The powers, privileges and immunities relating to the work of a committee of Tynwald are those conferred by sections 3 and 4 of the Tynwald Proceedings Act 1876, sections 1 to 4 of the Privileges of Tynwald (Publications) Act 1973 and sections 2 to 4 of the Tynwald Proceedings Act 1984.

Committee Membership

The Hon S C Rodan SHK (Garff) (Chairman) Hon R H Quayle MHK (Middle) Mr D J Quirk MHK (Onchan) Mr C R Robertshaw MHK (Douglas East) Mr D M Anderson MLC Mr D C Cretney MLC Mr J R Turner MLC Copies of this Report may be obtained from the Tynwald Library, Legislative Buildings, Finch Road, Douglas IM1 3PW (Tel 01624 685520, Fax 01624 685522) or may be consulted at www.tynwald.org.im

All correspondence with regard to this Report should be addressed to the Clerk of Tynwald, Legislative Buildings, Finch Road, Douglas IM1 3PW.

Table of Contents

I. REPORT AND CONCLUSIONS ...... 1

WRITTEN EVIDENCE ...... 3

APPENDIX 1: STANDING COMMITTEE OF TYNWALD ON EMOLUMENTS REMUNERATION FOR SCRUTINY ROLES – CONSULTATION PAPER DATED 22ND APRIL 2016 5

APPENDIX 2: EMAIL DATED 10TH MAY 2016 FROM HON MHK 13

APPENDIX 3: EMAIL DATED 30TH MAY 2016 FROM MR TONY WILD MLC 17

To: The Hon Clare M Christian MLC, , and the

Hon Council and Keys in Tynwald assembled

FIRST REPORT OF THE STANDING COMMITTEE OF TYNWALD ON EMOLUMENTS

2015-2016

REMUNERATION FOR SCRUTINY ROLES

I. REPORT AND CONCLUSIONS

1. It was resolved on 15th December 2015:

That the Emoluments Committee should look again at the question of remuneration for committee roles.

2. We decided to consult all Tynwald Members about this matter. The attached consultation paper was issued on 22nd April 2016 and responses were requested by 27th May 2016.1 Two responses were received and these are also attached.2

We conclude that the introduction of remuneration for scrutiny roles is not seen as an urgent priority by the majority of current Tynwald Members and that consensus is unlikely to be achieved before the Dissolution of the in August 2016.

We conclude that this matter will merit further consideration by our successors after the 2016 General Election.

1 Appendix 1 2 Appendices 2 and 3 1

S C Rodan C R Robertshaw R H Quayle D J Quirk D M Anderson D C Cretney J R Turner

2

WRITTEN EVIDENCE

3 4

Appendix 1: Standing Committee of Tynwald on Emoluments Remuneration for scrutiny roles – Consultation paper dated 22nd April 2016

5 6 Standing Committee of Tynwald on Emoluments

Remuneration for scrutiny roles

Paper dated 22nd April 2016

Introduction 1. It was resolved on 15th December 2015 “That the Emoluments Committee should look again at the question of remuneration for committee roles.” This question was last debated in Tynwald on 17th May 2011 and on 14th July 2011. Since then the system of Policy Review Committees has been implemented. The Committee would now like to give all Members of Tynwald the opportunity to submit views in the light of their experience of the Committee system since 2011 the General Election. Submissions should be sent to the Clerk of the Committee, Mr Jonathan King, by Friday 27th May 2016.

Background 2. In June 2010 a Select Committee was established to consider setting up a system of Standing Committees relating to the work of Government Departments. The Select Committee’s Report (PP 167/10) was produced in December 2010.1 This report was debated on 18th January 2011.2 At that debate it was resolved:

That the question of the specific levels of remuneration for Members’ scrutiny roles should be referred to the Standing Committee of Tynwald on Emoluments, who shall take into consideration the basis of the remuneration for such committee membership as applies within other parliamentary systems of the British Isles, and to set out the basis of such remunerations, and to make recommendations taking into account the following principles:

i. There should be no overall increase in expenditure on Members’ remuneration and any changes should be made within the parameters of overall cost neutrality.

ii. If at some time in the future the chairman of the PAC or of a “policy review Committee” were to be dedicated full time to this role in the interests of showing the importance of scrutiny, then for the same reason such a chairman should not be worse off financially than he or she would have been, had he or she served as a member in a government department.

iii. The importance of Committee scrutiny is such as to warrant a member of the PAC or of a “policy review Committee” other than the chairman also receiving some enhancement in respect of that scrutiny role.

iv. There need be no guarantee that every Member should in all circumstances have either a remunerated executive role or a remunerated scrutiny role.

1 http://www.tynwald.org.im/business/pp/Reports/2010-PP-0167.pdf 2 http://www.tynwald.org.im/business/OPIndexHansard0811/5507.pdf

1

7 The thinking of the Emoluments Committee in May 2011 3. We reported on this issue in our First Report for 2010/2011 (PP 0076/11), which was produced in May 2011.3 The Report included as its Annex 1 the resolution of January 2011 part of which is quoted above. After describing the existing system of remuneration for executive and presiding officer roles, and after looking at other jurisdictions, the Report said:

SPECIFIC LEVELS OF REMUNERATION FOR SCRUTINY ROLES

8. In agreeing to the resolution at Annex 1, Tynwald has accepted in principle that the importance of scrutiny is such as to warrant both chairmen and members of the PAC and policy review Committees receiving some enhancement.

9. Point 3(ii) of the resolution makes it clear that, while it should continue to be open to elected Members of Tynwald to serve simultaneously in an executive role and on scrutiny Committees, a chairman of such a committee should be no worse off than a member of a Department if circumstances arose in which he was dedicated full-time to chairing the committee. Under the current system this means that the rate for a chairmanship of one of these committees should be at least 30%.

10. Point 3(i) invites us to consider what enhancement should be available to a member of a scrutiny committee who is not the chairman. We think it is self-evident that the rate for an “ordinary member” of a scrutiny committee should be less than the rate for a chairman. We have considered whether the rate for membership of a scrutiny committee should be 10%, by analogy with the rate for chairing a Statutory Board. We do not think, however, that this would adequately reflect the importance which the resolution places on scrutiny roles.

11. Our preferred model would be for the remuneration to be set at 40% for the chairman of a scrutiny committee and 30% for the other members. If a member of a committee is also a member of a Department he should not receive the 30% twice; but if he is not a member of a Department he should receive the 30% in recognition of his committee role. Similarly if a committee chairman is already receiving 40%, for example if he is a Statutory Board chairman as well as a member of the committee, he should not receive any additional enhancement beyond that; but if he does not already have 40% from other appointments his pay should be made up to 40% in recognition of his role as committee chairman.

Recommendation 1

That Tynwald accepts that in principle:

(a) a member of the PAC or a “policy review committee” who is not in receipt of an enhancement of 30% or more by virtue of any other office held should receive an enhancement of 30% in recognition of his scrutiny role; and

3 http://www.tynwald.org.im/business/pp/Reports/2011-PP-0076.pdf

2

8 (b) a chairman of such a committee who is not entitled to enhancements totalling 40% or more by virtue of any other office or offices held should be entitled to a total enhancement of 40% in recognition of his scrutiny chairmanship.

COST NEUTRALITY

12. Point 3(i) of the resolution at Annex 1 calls upon us to take into account the principle that there should be no overall increase in expenditure on Members’ remuneration and any changes should be made within the parameters of overall cost neutrality.

13. We have indicated above that we consider the budgetary “baseline” for this calculation to be the sum currently available in principle for additional sums, as set out at Annex 2. It is clear that if we were to introduce the system recommended above in full there could be, potentially, an increase in overall expenditure, because we would be creating four new posts remunerated at 40%. The additional cost is potential as opposed to guaranteed because it remains open to Tynwald to appoint as committee chairmen members who are already entitled to 40%, for example members of Departments who are also chairmen of Statutory Boards or the Planning Committee. In these circumstances our model would impose no additional cost. On the other hand, it is also open to Tynwald to appoint as scrutiny committee chairmen up to four Members who would not otherwise be entitled to 40%. As the “basic” model at Annex 2 assumes every member will receive at least 30%, the potential additional cost of the proposed model is therefore 10% for each committee chairman, or 40% in total. Assuming today’s basic salary remains in place, the potential increase would be £14,576 per year, or just under 3% of the budget for additional sums.

14. This potential increase could be offset by a compensatory reduction in the additional sums for all the existing posts. The reduced annual sums under such a model would be for the Chief Minister 77.7%, Speaker 58.3%, President and Ministers 48.6%, Treasury Members 38.8% and Departmental Members 29.1%. We do not think it would be appropriate to reduce these sums in this way. It is one thing to propose giving fairer recognition to the importance of scrutiny. It is quite another to do so by giving reduced recognition to executive and presiding officer roles.

15. We find ourselves, therefore, faced with a clash between the different principles laid down in the resolution at Annex 1. The principled view we have reached of the appropriate remuneration for scrutiny cannot immediately be reconciled with the clear principle of cost neutrality laid down by Tynwald Court – a principle whose importance in the current financial circumstances cannot be over-emphasised.

16. We have concluded that, while we have no difficulty in affirming the principle of remuneration for scrutiny, we simply cannot afford to implement such a change in full at present. In particular we consider that it would be unacceptable to put in place any increase in expenditure on Tynwald Members’ remuneration – or even any potential increase in expenditure in this area – while wider public sector pay remains frozen.

3

9 THE WAY FORWARD

17. In the light of our conclusion on cost neutrality, and in the interests of making progress towards implementing Tynwald’s wishes as expressed in the resolution at Annex 1, we propose that the remuneration structure described in our first recommendation should be implemented in two phases.

18. The first phase, the introduction of a 30% enhancement for members of the PAC and the “policy review committees”, can be put in place without delay because it does not involve new costs. As we have said, budgetary provision already exists to pay every elected Member of Tynwald a 30% enhancement, because it is already open to the Council of Ministers to appoint every elected Member to a Department.

19. The second phase, the introduction of a further 10% enhancement for chairmen of the PAC and the “policy review committees”, represents a potential cost increase of £14,576 per year. We believe that this should be implemented when the public sector pay freeze is at an end.

20. The Treasury has a power under section 1(2) of the Payment of Members’ Expenses Act 1989 to prescribe different sums for the holders of different offices; and a power under section 1(2)(g) to add to the list of remunerated roles. As the roles of chairman and member of the PAC and other “policy review committees” are parliamentary and not executive roles there is no need for them to continue after the dissolution of the Keys. Section 1(3) of the Act enables the Treasury to exclude these roles from the usual provision that entitlement to additional sums continues even when a person is no longer a member of Tynwald. Under section 7 of the 1989 Act all these orders need to be approved by Tynwald.

Recommendation 2

That the Treasury should, without delay, lay before Tynwald for approval an order under the Payment of Members’ Expenses Act 1989 to provide remuneration at 30% for membership of the PAC or a “policy review committee”.

Recommendation 3

That as soon as the public sector pay freeze has come to an end the Treasury should lay before Tynwald for approval an order under the Payment of Members’ Expenses Act 1989 to provide remuneration at 40% for chairmanship of the PAC or a “policy review committee”.

The outcome of the two debates in 2011 4. When our Report was debated on 17th May 2011,4 Tynwald approved our first two recommendations but rejected the third. Thus the declared policy of Tynwald was that there should be remuneration at 30% for membership of the Public Accounts Committee or a Policy Review Committee, and at 40% for the chairman of such a Committee.

4 http://www.tynwald.org.im/business/OPIndexHansard0811/7102.pdf

4

10 5. Secondary legislation to give effect to this policy was duly prepared. The relevant Order (SD 516/11) was made by the then Treasury Minister, Mrs Craine, on 23rd June 2011 and laid before Tynwald in July 2011.5 After the debate, however, the Order was not approved.6

Experience since the 2011 General Election 6. After the 2011 General Election the new system of Standing Committees was put into operation, with Members being elected to the new Committees for the first time in November 2011. Because Tynwald had rejected the Treasury’s Order in July 2011, no remuneration was associated with these roles.

7. After three years of operation the system of Standing Committees was reviewed by a Select Committee which produced its Report (PP 2015/0149) in November 2015.7 The Select Committee concluded in its Report that the committee system had operated successfully since 2011 despite the fact that the remuneration envisaged at that time had not been put in place; and that the arguments for and against remuneration for committee roles remained as they had been in 2011.8 It went on to recommend that the question of remuneration for scrutiny roles be looked at again by the Emoluments Committee.

Consultation questions 8. The Committee now invites Tynwald Members to comment on the following principles, all of which have previously been agreed to by Tynwald:

Principles agreed to in January 2011

(1) There should be no overall increase in expenditure on Members’ remuneration and any changes should be made within the parameters of overall cost neutrality.

(2) If at some time in the future the chairman of the PAC or of a “policy review Committee” were to be dedicated full time to this role in the interests of showing the importance of scrutiny, then for the same reason such a chairman should not be worse off financially than he or she would have been, had he or she served as a member in a government department.

(3) The importance of Committee scrutiny is such as to warrant a member of the PAC or of a Policy Review Committee” other than the chairman also receiving some enhancement in respect of that scrutiny role.

(4) There need be no guarantee that every Member should in all circumstances have either a remunerated executive role or a remunerated scrutiny role.

5 http://www.tynwald.org.im/business/opqp/sittings/20102011/2011-SD-0516.pdf 6 http://www.tynwald.org.im/business/OPIndexHansard0811/7490.pdf 7 http://www.tynwald.org.im/business/pp/Reports/2015-PP-0149.pdf 8 PP 2015/0149, paragraphs 52 to 58

5

11 Principles agreed to in May 2011

(5) a member of the PAC or a Policy Review Committee who is not in receipt of an enhancement of 30% or more by virtue of any other office held should receive an enhancement of 30% in recognition of his or her scrutiny role; and

(6) a chairman of such a committee who is not entitled to enhancements totalling 40% or more by virtue of any other office or offices held should be entitled to a total enhancement of 40% in recognition of his or her scrutiny chairmanship.

Jonathan King

Clerk of the Emoluments Committee

April 2016

6

12

Appendix 2: Email dated 10th May 2016 from Hon Juan Watterson MHK

13 14 From: Watterson, Juan (MHK) Sent: 10 May 2016 16:08:06 To: Jonathan King Subject: RE: For response by 27 May 2016: Remuneration for scrutiny roles

Dear Dr King

Thank you for inviting me to comment on your paper on remuneration of scrutiny roles. My first point is to wholeheartedly agree with the first principle agreed in January 2011. There must be no accusation that this system is being used to in any way inflate the overall budget for Members’ salaries and allowances.

However, within that overall envelope, I think a more fundamental decision is required over what Members’ pay and uplifts are for. Is it for volume of work, or responsibility? I don’t think this question has ever been fully resolved.

It strikes me as being rather generous to pay a person £39,546.50 plus the expense allowance when the only duty is to attend the sitting of their respective Branch. I would respectfully suggest that there is a chasm of difference in responsibility between a Minister, accountable to Tynwald for all acts of their Department and a member of a Department. However, the difference in pay is only £7,901.30, or just 11% in cash terms. I think therefore a more fundamental review of the balance of members pay is warranted.

It may of course be that a Minister is actually less busy than a Department member who is on a few committees and a couple of Departments. In my view there should therefore be a differential between responsibility pay and ‘activity’ pay.

Chairman and members of select and scrutiny committees are not currently remunerated. I would quite agree that this additional activity, placed on the members by their Tynwald colleagues should be remunerated up to a cap. Because there is not the same level of accountability, decision making or responsibility, I would suggest that this cap should be less than that paid to the Chairman of a Statutory Board. I would have no problems with different committees or chairmanship / membership having different rates of activity pay up to the cap.

I would suggest that the any additional sums should be funded from a reduction in the basic pay of members, or a reallocation of the round sum expense allowance paid to members. This would create the pot for additional activity pay, whilst lowering the amount available to those who only do the bare minimum, whilst still providing a fair wage for the work and time required at the minimum level. I would concur that there should be no expectation of government or scrutiny role, but the nature of Tynwald has been, and I believe should continue to be one of inclusiveness whereby we combine a thriving scrutiny system, as well as experience in the executive.

I would be happy to expand my thinking further should it be of use to the Committee.

Yours sincerely

Hon. Juan Watterson BA(Hons) FCA MHK Member of the House of Keys for Rushen Legislative Buildings Douglas

15 IM1 3PW

Twitter: @juanwatterson Facebook: https://www.facebook.com/juan.watterson

From: Jonathan King [ ] Sent: 22 April 2016 12:01 To: Members DL Subject: For response by 27 May 2016: Remuneration for scrutiny roles

To: All Members of Tynwald

Please see the attached paper, which is circulated on behalf of the Emoluments Committee.

Jonathan

Jonathan King Deputy Clerk of Tynwald and Clerk of the Legislative Council Legislative Buildings, Douglas, Isle of Man IM1 3PW 01624 686303 www.tynwald.org.im

Isle of Man. Giving you freedom to flourish

WARNING: This email message and any files transmitted with it are confidential and may be subject to legal privilege. You must not copy or deliver it to any other person or use the contents in any unauthorised manner without the express permission of the sender. If you are not the intended addressee of this e-mail, please delete it and notify the sender as soon as possible.

No employee or agent is authorised to conclude any binding agreement on behalf of any of the Departments or Statutory Boards of the with any party by e-mail without express written confirmation by a Manager of the relevant Department or Statutory Board.

RAAUE: S’preevaadjagh yn çhaghteraght post-l shoh chammah’s coadanyn erbee currit marish as ta shoh coadit ec y leigh. Cha nhegin diu coipal ny cur eh da peiagh erbee elley ny ymmydey yn chooid t’ayn er aght erbee dyn kied leayr veih’n choyrtagh. Mannagh nee shiu yn enmyssagh kiarit jeh’n phost-l shoh, doll-shiu magh eh, my sailliu, as cur-shiu fys da’n choyrtagh cha leah as oddys shiu.

Cha nel kied currit da failleydagh ny jantagh erbee conaant y yannoo rish peiagh ny possan erbee lesh post-l er son Rheynn ny Boayrd Slattyssagh erbee jeh Reiltys Ellan Vannin dyn co-niartaghey scruit leayr veih Reireyder y Rheynn ny Boayrd Slattyssagh t’eh bentyn rish.

16

Appendix 3: Email dated 30th May 2016 from Mr Tony Wild MLC

17 18 From: Wild, Tony Sent: 30 May 2016 21:40:26 To: Jonathan King Subject: RE: For response by 27 May 2016: Remuneration for scrutiny roles

Dear Jonathan

Apologies for my late response. I support principles 5 & 6 from the May 2011 recommendations.

Kind regards

Tony

Tony Wild MLC Tynwald Legislative Buildings Finch Road Douglas Isle of Man IM1 3PW

From: Jonathan King [ ] Sent: 22 April 2016 12:01 To: Members DL Subject: For response by 27 May 2016: Remuneration for scrutiny roles

To: All Members of Tynwald

Please see the attached paper, which is circulated on behalf of the Emoluments Committee.

Jonathan

Jonathan King Deputy Clerk of Tynwald and Clerk of the Legislative Council Legislative Buildings, Douglas, Isle of Man IM1 3PW www.tynwald.org.im

Isle of Man. Giving you freedom to flourish

19 20

Parliamentary Copyright available from:

The Tynwald Library Legislative Buildings DOUGLAS Isle of Man, IM1 3PW British Isles June 2016 Tel: 01624 685520 Fax: 01624 685522 e-mail: [email protected] Price: £3.15