HC Deb 15 July 2002 vol 389 cc83-4W
Mr. Forth

To ask the President of the Council, pursuant to his answer to the hon. Member for Vale of Clwyd (Chris Ruane) on 7 May 2002,Official Report, column 74W, on Members' pensions, when the statutory instrument to give effect to the recommendations of the SSRB will be tabled. [70293]

Mr. Robin Cook

In July of last year the House voted to increase the accrual rate of the parliamentary pension from one-fiftieth to one-fortieth. The Government did not accept the proposal in the resolution that all the cost should fall on the Exchequer. I therefore announced on 7 May that I had referred the cost of this improvement to the SSRB.

The SSRB has now reported. In brief, they recommend that the cost of the faster accrual rate, which is estimated at 5.1 per cent. of pay, should in the short-term be split with Members contributing 3 per cent. and the Exchequer contributing 2.1 per cent. The SSRB further recommends that this additional Exchequer contribution should be taken into account in subsequent reviews of MPs pay so that eventually the full cost of the accrual rate is borne by MPs.

The Government accept these recommendations of the SSRB. I am therefore today laying an Order giving effect to the new accrual rate and also to other recommendations of the SSRB which the House approved last July

There are two remaining issues, whether survivor pensions should be extended to unmarried adult dependants and whether survivor pensions should continue if a spouse remarries. It is the Government's policy that neither the cost of extending pensions to surviving adult dependants, nor that of the SSRB recommendation to pay pensions to surviving spouses for life, should fall on the taxpayer. Following the vote last year, the trustees of the pension scheme were asked to consider how these proposals could best be implemented at no cost to the Exchequer. The trustees only reported on 5 July. There has not therefore been sufficient notice for the Government to reach a view on these proposals and whether they do protect the taxpayer against any additional cost. I expect to bring forward proposals to the House in the autumn. Changes will be backdated to today's date.

The new contribution rate for Members will be 9 per cent. of pay. The statutory instrument provides that contracting into the new accrual rate will be optional for existing members of the scheme.

I hope this sensible compromise will be welcome. I believe it fairly recognises the decline in the average length of service of MPs, which has had the effect that only a handful of Members now achieve the maximum pension entitlement.