Parliamentary Contributory Pension Fund

Debate between Bob Russell and Angela Eagle

Monday 17th October 2011 Commons Chamber

[Ms Angela Eagle (Wallasey) (Lab)]

As the Leader of the House says, the motion seeks to deal with some unfinished business from the previous Parliament. The order that we are debating is necessary to commence the provisions of section 40 and schedule 6 of the Constitutional Reform and Governance Act 2010. Those parts of the Act transfer responsibility for hon. Members’ pensions to the Independent Parliamentary Standards Authority. That legislation was passed, with all-party agreement, by the previous Government. It gained Royal Assent in April last year, just before the general election, and there was a general feeling that it was wrong for existing arrangements to be left unchanged, and that the independent determination of salaries should extend to cover pay and pensions. Having voted for the primary legislation that brings about that switch of responsibilities, we Labour Members will not oppose the motion today.

The order will change the current arrangements, under which the Leader of the House—in effect, the Government —determines MPs’ pension arrangements through regulations. Following the 2009 report by the Committee on Standards in Public Life, the previous Government accepted in principle that the independent regulator should be given statutory responsibility for MPs’ pay and pensions. While that change was being legislated for, there was, quite properly, input from the trustees of the parliamentary contributory pension fund, which ensured that Members’ accrued rights had protection consistent with that provided to members of other occupational pension schemes. There was also agreement to amendments that ensured that the parliamentary contributory pension fund would continue to be a trustee-based scheme with appropriate member representation, and that required IPSA to obtain trustees’ consent before making changes in the administration of the scheme.

[Bob Russell]

The hon. Lady rightly draws attention to the history that has led to our discussing the motion today, and to what happened in the previous Parliament. After 18 months’ experience of IPSA, does she have total confidence in that organisation’s ability to deliver our pensions?

[Ms Eagle]

We all have our IPSA stories, and we could probably dine out on them—with each other, and we would not claim it back. We all have stories about some of the absurdities of the scheme, especially at the beginning, when it was bedding in. There has been considerable progress, and I would like further progress to be made. There are ongoing ways in which we in this House can bring to light any remaining absurdities, and I hope that we can continue to iron them out. The principle of independent determination is right. IPSA seems as good a body as any—not withstanding the chaos at its beginning—to undertake all that responsibility. Clearly, we will have to wait and see whether my confidence will be rewarded, but I am willing to give IPSA a try. I know that the hon. Gentleman is somewhat more sceptical about the authority than I am.

[Ms Eagle]

I will come on to make a few short, in-order remarks about that aspect of our debate, but I think that most Members of the House would agree that we cannot expect to be treated differently from other public sector workers; that is a principle that most of us would share.

I was talking about appropriate Member representation on the trustee board, and the fact that IPSA, under the primary legislation and the order, will have to obtain the trustees’ consent before making changes to the administration of the scheme or the management of the scheme’s assets. Again—this is an important principle—it is entirely in keeping with the usual practice of other funded schemes. It is important that we maintain that parallel.

The order will change the legal structure of the parliamentary contributory pension fund. It will become an IPSA scheme and the power to amend it will be vested in IPSA rather than in the Government via regulations tabled by the Leader of the House, so the Leader of the House is giving away powers in the order. He seems to be quite happy about that. IPSA will acquire the duty to do all this, rather than the current Leader of the House.

The primary legislation ensures that there is a requirement, though, for IPSA to consult interested parties prior to determining benefits or contributions in future. In the primary legislation interested parties include the Speaker, the trustees of the scheme, the Senior Salaries Review Body, the Government, and in many ways the most important organisation in all pension deliberations—the Government Actuary’s Department. This is all entirely sensible, and I look forward to IPSA undertaking this work in due course.

[Bob Russell]

It is incapable.

[Ms Eagle]

Time will tell. If IPSA proves incapable, which I doubt, I suspect we will be back here quite quickly, dealing with the consequences. I do not anticipate that we will be in that position.

--- Later in debate ---

[Ms Eagle]

The question from the right hon. Member for Wokingham (Mr Redwood) that I was answering was about the duties of the trustees. My understanding, from reading the primary legislation, is that it does not impact in any differential way on the legal duties of trustees.

[Bob Russell]

On a point of order, Mr Speaker. If those on the two Front Benches cannot agree on a matter of such fundamental importance as this, how on earth can we proceed?