Parliamentary Contributory Pension Fund

Debate between David Anderson and Peter Bone

Monday 17th October 2011 Commons Chamber

[Mr David Anderson (Blaydon) (Lab)]

It would be hard to argue with what the hon. Member for Colchester (Bob Russell) has just said if we had not already agreed to do this. We are halfway down the line, and we have been since before the last general election when we said we would give IPSA this responsibility. The debate should have stopped then. We should have said, “Right, we agree today that we’re going to do something we should have been doing over the last 16 months. We’re going to tell IPSA to get on with it by sitting down with our trustees and negotiating a settlement based on the way pension schemes across the world operate.”

Why are we having this debate tonight on a lengthy motion that pulls in public sector pensions? I take the Leader of the House at his word of course, but I am convinced that other people will use this debate as a stick to beat public sector workers over the head with. They will say, “MPs have agreed to have their pensions changed, so why don’t you?” That is the wrong way to deal with something as integral to someone’s terms and conditions as their pension. The terms and conditions of public sector workers, or of any other worker in this country, should be based on a genuine debate between the employer representative for the pension scheme—IPSA in our case—and the trustees. They should come together to weigh up the evidence about what the scheme does, what it is there for, whether it is sustainable and whether there is evidence to back changes.

This country faces a situation in which the Treasury is telling us that a levy must be imposed on those in the public sector, which in some cases will be 3% and for us could well be 5%, without any account having been taken of whether it is legitimate, whether it makes schemes affordable or whether, as has been said, it makes them less sustainable. A survey carried out by YouGov for the Fire Brigades Union suggested that 27% of its members could opt out and 12% would be very likely to opt out of their scheme if these changes go through. Unison has suggested that 350,000 people could opt out of these schemes. These schemes are good for the people in them. They are not gold-plated, but they are probably as good as most people in work can get. If people opt out, that will affect not just those individuals but will have a huge effect on the investment potential of this country, because those pension schemes invest heavily in the stock market.

[Mr Bone]

The hon. Gentleman is putting his point fairly. I might well agree with the Government’s approach to pension reforms, but I am surprised that the motion states that “this House” supports it. This is the wrong debate in which to make that statement.

[Mr Anderson]

I could not agree more with the hon. Gentleman. This debate should be about the processes of this House—House business is about that, not the politics of this House. It should be about whether we agree that this is the right way for Members of this House, and whoever comes after us, to be treated. This should not be about whether this suits someone’s political agenda and allows them to go outside and say, “Look, MPs think it’s legitimate to have a 5% or 3% levy. Why won’t you do the same?”, but my worry is that that is what this is about.

Let us not forget that we had a debate that concluded three years ago about public sector pensions, including our own. That resulted in big changes to public sector pensions. As has been suggested by our trustee colleague, my hon. Friend the Member for Central Ayrshire (Mr Donohoe), a cut-off was introduced: people would retain the benefits if they joined before a certain date, but for those who joined after and for new members the pension contributions would be more and their benefits would be less. Public sector workers agreed to that three years ago on the basis that it would make their pensions sustainable for the future. Nothing has changed since then, except for the fact that the Government want to impose a levy on public sector workers to try to dig themselves out of the hole created by the collapse of the global financial system. That approach is clearly wrong. Public sector workers should not have to carry the can for the failure of the banks, and that is clearly the message being given throughout the world.

My worry is that if we tell people that they should start paying 50% more for their pensions at a time when they face pay freezes, freezes of increments, a tax on shift payments, potential redundancies and so on, they will walk away from these pension schemes, as I said earlier. That will be to the detriment of the schemes, investment and the welfare system, because as people reach retirement age there will be a bigger drain on the welfare state than there would have been had they been able to provide for themselves.

This approach is a con trick. It is not about pensions’ stabilisation; it is about taking money out of the pockets of nurses, firefighters, street cleaners, social workers and home care workers to pay for the failures of capitalism. The truth is that we should stand together with those workers, as public sector workers, in a debate that is about our terms and conditions. They have a similar debate about their terms and conditions and we should say, “We stand in solidarity with you. It’s wrong that the Government are robbing you for your pension and taking money out of your pockets.”