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Mr. Hain: Yes, I do. I speak as someone with a large constituency, with large rural areas, who must necessarily incur large constituency mileage in going about my parliamentary duties.
The proposed provision for the reimbursement of parking—for parliamentary duties only—will be fully justified if the House agrees to reduce the mileage allowance as the SSRB has recommended. If the House rejects amendment (c), I hope that it will also reject
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amendment (i). If the House agrees to amendment (c), however, I shall support amendment (i), and I hope that the House will also do so. That is because the existing car mileage rates include an element to cover parking charges. Amendment (c) on its own would allow double reimbursement for parking costs.
Mr. Ian Davidson (Glasgow, Pollok) (Lab/Co-op): Will my right hon. Friend give way?
Mr. Hain: I am sorry but I must stick to what I said earlier; otherwise, like a parent with a—I will not continue with that line of thought. [Laughter.]
Paragraph (6) deals with the incidental expenses provision. The SSRB's report recommends that the provision be increased to a maximum of £27,500, and that the amount that may be claimed by Members should be abated by £7,500 for each permanent workstation occupied by their staff on the parliamentary estate. As the SSRB acknowledges, this recommendation could involve a significant reorganisation of current office arrangements for many Members, or else a significant loss of income. The SSRB states that it would understand were the House to conclude that the recommendation should apply only to new Members and that certain transitional arrangements should operate for currently serving Members. The Government believe that it would be appropriate for the Members Estimate Committee to give further consideration to this matter, particularly in the light of the points raised during this debate and the strong views expressed.
I fully support the principle behind the SSRB's recommendation—we must take steps to relieve pressure on the parliamentary estate, and we must address the current disincentives discouraging Members from basing their staff in constituency offices—but there are a number of other factors to take into account, which the SSRB was not able to address: security, for example, and the administration of House services. The Members Estimate Committee will be able to consider the various factors in the round.
On parliamentary pensions, the SSRB has made two recommendations. I am grateful to the trustees and their chairman for their work on this matter. Before I examine the matter, I want to say on behalf of the House how indebted we are to those Members who serve as our trustees. They have important and wide-ranging duties and responsibilities, and I would like to record my particular thanks to the hon. Member for Bournemouth, West (Sir John Butterfill) and his fellow trustees for their continued excellent service in running our pension scheme.
The second motion before the House is to implement the SSRB recommendation that the contribution rate for those scheme members who have opted for their pension to build up at a rate of one fortieth of final salary for each year of service should increase from 9 per cent. to 10 per cent. It may be recalled that in 2002, the SSRB recommended that, in the first instance, the contribution rate of members who opted for the one-fortieth accrual rate should increase to 9 per cent. It recommended that the remaining cost of the benefit improvement should be taken into account in subsequent reviews of pay and allowances. That would mean that eventually the full cost of implementation would be borne by Members on an ongoing basis. The Government accepted that recommendation.
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The SSRB has now considered the options for recovering the remaining cost. It has concluded that it would be unfair to restrict future pay increases for all Members irrespective of whether they had opted for the one-fortieth accrual rate. It has instead recommended that the contribution rate for those who opted for the improved accrual rate should increase by 1 per cent. from 1 April 2004. It considers that an appropriate step towards recovering the full cost. The SSRB remains of the view that the full cost of the benefit improvement should in due course be borne by Members on an ongoing basis. It intends to take the outstanding amount into account in its next review of parliamentary pay and allowances.
The Government are content with the SSRB's recommendation to phase the recovery of the additional cost and believe that it should be implemented. If the House agrees, I understand that the trustees would propose that the collection of arrears back to 1 April this year should be spread over the balance of the current tax year, so that Members are not saddled suddenly with a huge bill. The Government are happy with that approach.
The SSRB has recommended that the trustees should decide what action to take on the recommendations outstanding from its 2001 report. The main outstanding recommendations relate to the extension of survivor benefits to unmarried partners and the introduction of pensions for life for surviving widows and widowers. The Government's policy is that such benefit improvements could be introduced only if Members are prepared to meet the additional costs. That is consistent with our line on other public service schemes. In 2001, the House expressed its view rightly that survivor benefits should apply to unmarried partners as well as spouses. I have therefore been in discussion with the trustees about how those important provisions can be introduced in a way that is fair to Members and to the taxpayer. The issue of civil partners is slightly different. It is expected that the scheme will be amended to provide benefits for surviving civil partners, and that any additional costs arising from that will be met by the Exchequer.
The Government have noted the observation made by the SSRB in its report that phasing out the favourable early retirement terms in the scheme would be consistent with the Government's policy on public service pension age and might make possible benefit improvements as part of a package. The Government therefore feel that this represents a sensible way forward. The additional cost of providing pensions to partners and not just spouses can therefore be offset and remain cost-neutral by implementing the new retirement provisions.
Mr. Davidson: Given that the Leader of the House and several of his Government colleagues have said on a number of occasions that they wish that a variety of hon. Members would go away, is not this change inconsistent, as it makes it less likely that they will do so?
Mr. Hain:
I do not remember any such recommendation from me unless it was in respect of Conservative Members of Parliament. It would be good
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to see more Labour Members of Parliament in the House. [Laughter.] I am not going down that road, either.
The Government's policy on pension age, first announced in the 2002 pensions Green Paper, is that the rules of public service schemes should be changed to make an unreduced pension payable from age 65 rather than 60.
Mr. Andrew Miller (Ellesmere Port and Neston) (Lab): A uniquely separate set of circumstances applies to Members of Parliament compared with other public sector workers: the trigger dates for our choices are not in our hands but in the hands of the Prime Minister. I note that the motion says that the scheme will be
I see nothing in the Command Paper that defines the methodology in that regard. Will that be subject to a separate resolution, and will there be consultation with the trustees?
Mr. Hain: There will certainly be consultation with the trustees. I have already discussed the matter with their chairman. There will not be a separate motion; this motion will decide the matter.
All Members are to be allowed to draw pension before the age of 65 on an actuarially neutral basis, not just those with at least 15 years' service. Those who have at least 15 years' service on 31 March 2009 will continue to be eligible for early retirement terms which are more favourable than actuarially neutral. Those who serve beyond 1 April 2009 will not have access to an unreduced pension before the pension age of 65.
Mr. Miller: So it will not be phased out, as the motion says; it will be ended. Perhaps the motion should be amended accordingly.
Mr. Hain: The end date is 2009 or the general election after next, whichever is the later.
Mr. Miller: That is not phasing.
Mr. Hain: It is. I am sure my hon. Friend will understand this. Each individual Member is in a different position owing to differences in age and length of service, so this provision affects them in different ways. I could give various examples, including that of my own position, if that is of any interest.
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