HC Deb 17 January 2000 vol 342 cc546-7
7. Mr. David Rendel (Newbury)

What amount and proportion of police funding was spent on pensions in (a) 1990 and (b) the most recent year for which figures are available; and if he will make a statement. [103967]

12. Mrs. Jacqui Lait (Beckenham)

What measures he is taking in respect of the funding of police pensions. [103972]

The Secretary of State for the Home Department (Mr. Jack Straw)

Net pensions expenditure in 1989–90 amounted to £285 million, or 6.9 per cent. of total spend. For 1998–99, expenditure was £889 million or 12.6 per cent. of total expenditure. We have increased the proportion of overall funding to be distributed for police pensions to 13.2 per cent. in 1998–99, and to 14.5 per cent. in 1999–2000, in recognition of increasing pension costs.

Following a major review of the police pensions system, I am currently considering what longer-term changes, if any, are required.

Mr. Rendel

I am grateful to the Secretary of State for that answer; it shows that the proportion of money spent on police pensions has almost doubled during that period. Does he recall the answer given to my hon. Friend the Member for Southwark, North and Bermondsey (Mr. Hughes) just before Christmas, which said that, this year, four police forces are seeing a reduction in real-terms spending? However, if we take out pensions spending, 14 police forces will see a reduction in real-terms spending. What does the right hon. Gentleman intend to do about that? How will he get more policemen back on the beat?

Mr. Straw

The answer to the last part of the hon. Gentleman's question is that, as he knows, we have found additional new money—£35 million—for the next financial year, and more thereafter, to pay for the 5,000 police recruits over and above the number that will otherwise be recruited. The arrangements whereby the police pension costs form part of each police authority's budget are of long standing; they have some merits in ensuring that police forces concern themselves with, for example, the number of unnecessary medical retirements that they permit. However, I accept that those rising costs throughout the country are of great concern to the police service—as they are to me. That is why we are examining the longer-term future of the pension scheme.

Mrs. Lait

May I begin by thanking Ministers, on behalf of the people of Penge, for the closed circuit television system? However, although it might reduce the amount of crime on the streets of Penge, I suspect that the residents will feel equally concerned about police numbers, and will be even more concerned when they realise what a large proportion of the Metropolitan police budget goes on pensions. I have listened with great care to the exchange between the Secretary of State and the hon. Member for Newbury (Mr. Rendel). Will the Home Secretary reassure me further that, when that fact is taken with the expenditure on radios to which reference has already been made, the people of Penge, and of Beckenham and the whole of London, will not see a reduction in front-line policing over time because of the costs of radio and pensions?

Mr. Straw

It is my fervent hope that the circumstances that the hon. Lady desires come about. I also point out to her that, during the whole period between 1992 and March 1998, when the budgets had been set by the Conservative Administration whom she supported, the Metropolitan police lost 2,060 officers. I worked hard to try to stabilise the number of Metropolitan police officers, and, in the year that ended in March 1999, the reduction was not 2,000, but just 21.

Mr. John Wilkinson (Ruislip-Northwood)

Is it not an impossible situation when the proportion of police funding for pensions continues to increase? Although I welcome the fact that the Home Secretary has admitted that he will undertake a fundamental review of the matter, I urge him to adopt, at the earliest practical date, a fully funded pension scheme for the police service, and to introduce it gradually so that it will not disadvantage serving officers or reduce their pension expectations, but will, in the longer term, provide security for them and their families.

Mr. Straw

I have already said that, obviously, the changes to the police pension scheme will not disadvantage existing serving officers. We are closely examining the idea of a fully funded scheme, which in principle would be a more satisfactory alternative. The problem that we are up against, to which we have found no solution, although we hope that one may be forthcoming, is that the initial costs—the funding costs— of a fully funded scheme are very substantial and that money would have to be found from somewhere.

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