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Parliamentary Pensions

Earlier this year, the House debated the report of the Review Body on Senior Salaries regarding parliamentary pay, pensions and allowances. I am sure that many Members will remember that debate, although most of the speeches and comments related to the more newsworthy items of pay and allowances, rather than parliamentary pensions. Despite that, one of the motions passed at the end of the debate was a recommendation from the report—namely, that members of the pensions fund with retained benefits should be allowed to opt for a one-sixtieth accrual rate, in return for paying reduced contributions, provided that off-setting savings could be found to make the change cost neutral. Ensuring that any change is cost neutral is important and I am pleased to see that the Government Actuary's Department feels that the proposals achieve that. The changes suggested to the pension scheme are right and proper. It is only fair that those who have retained benefits and will therefore receive less compared with other Members, should contribute less and at a different accrual rate. I appreciate that there has been some debate as regards the percentages involved, but the proposals before us provide a sensible halfway measure, ensuring that those who receive less actually pay less, while ensuring that those who do not have retained benefits do not end up picking up the slack. The ill-health retirement pensions provisions are very much a step in the right direction. We must recognise the concern about the existing structure, whereby the ill-health pension for serving Members does not distinguish as to whether he or she is deemed capable of being able to carry out some other form of employment. Moreover, once a medical assessment has been made, the current procedure does not allow for reviews to determine whether it is appropriate to continue with the payments. I therefore welcome today's proposals, which create a two-tier level for serving MPs, which is a structure that is common in the private sector, as well as in other public service schemes. There will be a higher level of payment for those scheme members whom the trustees feel are permanently incapable of doing any form of work and a lower level of payment where it is felt that, although the member is deemed permanently incapable of performing the duties of an MP, he or she can none the less do some other types of work. It is also right that once an assessment has been made, the case and medical history should be subject to review, as felt necessary by the trustees. The proposals before us are sensible and balanced. They point towards a better and fairer system, and we on the Conservative Benches support them. Finally, may I put on record our huge thanks to my hon. Friend the Member for Bournemouth, West (Sir John Butterfill) and his fellow trustees? They have been trying to resolve the issues for quite a while, and during that period they have put in much time and effort. I thank them not only for sorting out the issues to hand but, more generally, for all the work that they do on our behalf. It is much appreciated.