HC Deb 26 February 1996 vol 272 c573
6. Mr. Jim Cunningham

To ask the Deputy Prime Minister what plans he has to contract out the principal civil service pension scheme. [15242]

Mr. Willetts

I intend shortly to lay before both Houses an order, under the Deregulation and Contracting Out Act 1994, to open up the administration of the principal civil service pension scheme to the private sector. The pension entitlements of civil servants will not be affected in any way.

Mr. Cunningham

Can the Deputy Prime Minister say what discussions he has had with the Paymaster General on the implications of the proposed privatisation—

Hon. Members


Madam Speaker

Order. I am sure that the hon. Gentleman is aware that he is not allowed to read out questions during Question Time.

Mr. Cunningham

What discussions has the Deputy Prime Minister had with the Paymaster General regarding the implications for the Paymaster General's office of the proposed privatisation of the civil service pension scheme? What objections has he received from teachers about the privatisation of their pension scheme, particularly teachers in Coventry?

Mr. Willetts

What we are talking about is the possible contracting out of the administration of schemes. Many letters that we have received from teachers and other organisations have reflected a serious misunderstanding of the position, and a fear that their pension entitlements will be affected in some way. I am pleased to assure the House that there will be no change in the substance of civil servants' or teachers' pension entitlements.

Mr. Dicks

Do the new arrangements mean that civil servants will have to contribute to their pensions for a change, like the rest of us?

Mr. Willetts

The changes are in the administration of civil service pension arrangements. They do not change either the pension entitlements of civil servants or the way in which they are financed. I assure my hon. Friend, however, that they contribute to the Government's overall public expenditure objectives. Whenever we have contracted out public sector services, we have achieved an average saving of 21 per cent.