Parliamentary Contributory Pension Fund

Claire Perry Excerpts

Monday 17th October 2011 Commons Chamber

[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.

[Claire Perry (Devizes) (Con)]

Does my right hon. Friend agree that, although there might be concerns over IPSA’s role, we should not make the perfect the enemy of the good and that this debate is long overdue? We must all look our public sector constituents in the face every day and justify changing their pensions schemes.

[Sir George Young]

I am grateful to my hon. Friend for her support and for the views she expresses.

There were constraints on IPSA taking over absolutely everything right at the beginning of this Parliament. The priority was allowances, so that was its first commitment, followed by pay. As I have said, this is the final piece in the jigsaw puzzle. We will have then passed over responsibility for the total package by 1 April next year.