Parliamentary Contributory Pension Fund

David Heath Excerpts

Monday 17th October 2011 Commons Chamber

[The Parliamentary Secretary, Office of the Leader of the House of Commons (Mr David Heath)]

I thank the hon. Member for Penistone and Stocksbridge (Angela Smith) for what she said in support of the motion. She set out the Opposition’s position clearly and we are grateful for her comments.

The hon. Lady is right. We ought to emphasise very clearly, first, that MPs’ pay, remuneration and pensions should be determined independently—we should not vote on the money we get. I agree with her and with the principles of the legislation, the final part of which we are putting in place today. Secondly, we should say explicitly—this is the crux of the debate—that on pensions MPs should not be in a different position from others in the public sector. We should be treated no better or worse than those whose interests we will be considering and have considered in the past. The public will take a very dim view indeed if, as a parting shot, we try to claim that we are a special case, although there have been some indications, however well wrapped up, that some feel we are a special case.

Intrinsic to that is something that we need to understand across the public sector, which is that these prospective changes do not change accrued benefits: they are not retrospective. In the case of the Members’ pension scheme, they cannot be retrospective by statute.

I must pick up one point made by the hon. Lady, which was echoed elsewhere in the Chamber. She said that Members have a relatively limited period of employment in the House, about 15 years, which is reflected in pension contributions. We should recognise that that is slightly longer than the average length of service in the civil service, which is 13.5 years, so our tenure is not below average across the working population. However precarious we might think our position is, there are precarious positions out there as well.

The main argument that we have had this evening is on the amendment tabled by the hon. Member for Christchurch (Mr Chope) and supported by the hon. Members for Wellingborough (Mr Bone) and for Blaydon (Mr Anderson) and partially by the hon. Member for Cities of London and Westminster (Mr Field), who expressed some sympathy but felt he would support the motion.

The key point is that they do not wish us to express an opinion on the form in which the independent scheme will be worked out. They feel that that should be left alone entirely and that for the House to express an opinion on the matter pre-empts the decision. I do not think that it pre-empts the decision. I think that it is perfectly proper for the House to take a view. We are statutory consultees on the final schemes that will be independently worked out by IPSA if the motion is passed. Although I think that it is important that we have an opinion, that opinion, which must have some value, will not dictate the final result. I repeat that I do not believe that we should be in a different position from other people in the public sector. [Interruption.] The hon. Member for Blaydon nods in support of that contention.

Others fear that we are arguing for exceptionalism. The general secretary of Unite, Len McCluskey, today commented on the amendment:

“We’re not all in this together… While they bay for cuts to public sector pensions, they act to feather their own nests. This will appal ordinary people”.

I do not propose to base everything I say on the opinions of Len McCluskey, but I think that many people who do not take an extreme view would nevertheless be very concerned if it appeared that MPs, of their own volition, are to be treated differently from those in other public sector schemes. That is why I am particularly grateful for the support of the shadow Leader of the House for the basic contention.

[Mr Chope]

Does the Minister trust IPSA? If so, why does he find it necessary to add other words to the motion?

[Mr Heath]

I trust IPSA to carry out its statutory functions and give an independent assessment, but I think that there is no harm whatsoever in inviting the House to agree that we should not claim an exception for MPs. We claim no such thing and therefore expect IPSA to have regard to Lord Hutton’s review and the policy consequences that flow from it.

[Mr Anderson]

Will the Minister make it very clear for the House, the public and, in particular, Len McCluskey that no Member has argued that MPs should be a special case? Everyone has argued that all public sector workers should be treated equally—that they should also be treated properly.

[Mr Heath]

I hope that no hon. Member believes that they are a special case and that, if the House divides this evening, they will bear that in mind when casting their votes. I am simply talking about the perceptions that those outside the Chamber might have. I am very clear about what the perceptions would be if Members supported the amendment, which is why I hope it will not be pressed to a Division. That would only divide the House on something on which we ought to be united.

[Adam Afriyie (Windsor) (Con)]

The House seems pretty much united behind the principle of the motion, but a little concerned about the wording. That leads to the following question: if IPSA were significantly to improve the benefits to Members, would the Government step in to prevent that?

[Mr Heath]

We would have no power to do so. It is an independent process. If there was any notion that should be done, it would require changes to primary legislation, which would be a matter for the House, not the Government. We can be assured that that is the case.

I wish to put on the record my appreciation of the work that the hon. Member for Central Ayrshire (Mr Donohoe), who chairs the trustees of the parliamentary pension scheme, and his colleagues have done. We are particularly grateful to the hon. Members for Lewisham West and Penge (Jim Dowd) and for Watford (Richard Harrington) for stepping down in order to facilitate the transfer. I know that the hon. Member for Central Ayrshire takes an active interest and has been engaged in discussions throughout the process. I am particularly grateful for his letter, rather than his comments today, in which he stated: “Overall the trustees are of the view that the transfer of powers to IPSA will give the trustees the opportunity to contribute to the review of your pension scheme that we all know is inevitable in a constructive way.” Hear, hear to that. Everyone needs to take account of the caveats he offered, but I do not think that that obstructs the thrust of the motion. My hon. Friend the Member for Colchester (Bob Russell) will not agree with that point, because he does not like IPSA, he does not like all its works and he does not believe that he can trust it. I understand his position, but I invite him to look back at the legislation, which we passed, and accept it.

[Mr Donohoe]

One very important question has not been answered: when will the order be signed transferring to IPSA the powers to undertake the pension scheme?

[Mr Heath]

First, we have to accept the result of any vote this evening, but if the motion goes through the order will be made shortly, and the hon. Gentleman should know that that really does mean shortly; it will be not one of those that lasts several months.

I reconfirm for the hon. Member for Suffolk Coastal (Dr Coffey) that the Government propose to increase contributions to the ministerial scheme, with staged increases being applied from 1 April 2012, and that we will consult on the proposal, as required by the Constitutional Reform and Governance Act. For the avoidance of doubt, I should point out that I do not receive a ministerial salary or pension, so I will not be affected—[Interruption.] As the hon. Member for Wallasey says, I do the job for nothing—for my love of the job. I am glad that that is appreciated—[Interruption.] She does, too.

On that note of happy consensus, I hope the House will agree the motion and pass the matter to the independent body with the very clear indication that, no, we do not expect to be treated differently simply because we are Members of this House and have the opportunity to express our opinions here in the Chamber.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Does Mr Chope wish to move his amendment?