Parliamentary Contributory Pension Fund

Tony Lloyd Excerpts

Monday 17th October 2011 Commons Chamber

[Sir George Young]

The hon. Gentleman will know that paragraph 15 of schedule 6 to the CRAG Act states:

“Before making a scheme under paragraph 12 the IPSA must consult…the trustees of the Fund,”

so there is that opportunity for dialogue.

[Tony Lloyd (Manchester Central) (Lab)]

I should make it clear that I will support the motion, but something is causing alarm bells to ring. The Leader of the House rightly says that the motion means that the parliamentary scheme will not be better than those for other public sector workers, but will he make it quite clear that nothing in the motion has any implications for the negotiations that are taking place with other public sector schemes?

[Sir George Young]

The motion is purely declaratory, so the hon. Gentleman is quite right. The second half of it expresses a view, on behalf of the House, that we believe we should be treated no better or worse than those in other public sector schemes. It is important that our constituents know that that is our view and that we do not expect to be treated any differently from others in the public sector.

A further development is the increase in pension contribution rates for public service schemes, as already announced by my right hon. Friend the Chief Secretary to the Treasury. The case for public service employees to pay more into their pensions and therefore reduce the burden on the taxpayer was made clearly in Lord Hutton’s interim report, which was published last autumn. The report states:

“In the short term, however, I consider there is also a strong case for looking at some increase in pension contributions for public service employees, to better meet the real costs of providing these pensions, the value of which has risen in recent years with most of these extra costs falling to taxpayers”.

The subsequent statement made by the Chief Secretary made it clear that each scheme would be required to find savings equivalent to a 3.2 percentage point increase, phased in over three years, with scheme-specific discussions to make proposals on how the savings were to be achieved.

If the House accepts the principle that hon. Members should not be out of step with changes that affect other public service schemes, we should also accept that our contributions should rise at the same time. I can therefore confirm that the Government propose to increase contributions to the ministerial scheme, with increases being applied from 1 April next year on a staged basis, and we will consult on that proposal as required by the Constitutional Reform and Governance Act.

Finally, I shall end where I began: the most important development of which account needs to be taken is the acceptance that MPs’ remuneration should be assessed, determined and administered independently.

--- Later in debate ---

[Ms Eagle]

It is certainly important that we are not seen to exempt ourselves from the required changes, and in this debate so far that sense has been put across by speakers on both sides of the House.

The Government have to show understanding and good will if they are to make progress on public sector pensions.

[Tony Lloyd]

My hon. Friend is making an excellent speech, as ever, and the point that she makes is the real one: nothing in today’s vote in the House should be seen to pre-empt the legitimate negotiating process that is taking place with millions of public sector workers. If something should not be pre-empted in particular, it is the opportunity for the Government to say that, somehow, the motion before us gives them legitimacy in refusing to negotiate in good faith with public sector unions.

[Ms Eagle]

I agree. I certainly hope that the Government want to negotiate in good faith with public sector unions, and I understand that sector-specific talks have been going on. In education there were meetings last Wednesday, in health there are meetings tomorrow, and the civil service has had a few meetings, because on public sector pensions it is hard to generalise. The schemes are quite different, and the local government scheme is funded completely differently.

I understand also that a meeting is due a week today between the Chief Secretary to the Treasury and the Cabinet Office Minister with responsibility for the central talks, and I certainly hope that all sides show flexibility so that there can be a negotiated settlement.