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The Deputy Leader of the House of Commons (Chris Bryant): I, too, pay enormous tribute to the hon. Member for Bournemouth, West (Sir John Butterfill). I am not sure whether the job of looking after pensioners in Parliament automatically goes to a Member of Parliament who represents Bournemouth, because of the concerns of constituents there, but I am sure that the hon. Gentleman has plenty of experience of dealing with his constituents’ pension issues down in Bournemouth. I am also grateful to him because, as a long-established member of the all-party Spain group, I know that he knows the difference between a good bottle of Rioja and a not-so-good bottle of Rioja.
We should also pay tribute to the other trustees and the staff who administer the scheme. Every hon. Member, from across the House, would agree that they receive a personal service from the staff who operate the scheme. Those staff sometimes have to explain matters to hon. Members whose main interest in life has not necessarily been their pension arrangements and whose first level of expertise is not in pensions.
The Government, too, agree that the proposals before us make sense. Those proposals have come from the trustees and are the result of considerable consideration by them over the past couple of years, and they were broadly outlined in principle in the debate on 24 January this year. The new accrual rate in particular makes sense. It is unfair for those who have significant retained benefits not to gain any further benefit, despite the fact that some of them pay in at 6 per cent. or, in a few cases, at 10 per cent.
That applies not just to one part of the House, but to hon. Members from all parts of the House. I am therefore grateful that instead of the current system, whereby, as has been said, either 6 per cent. of salary is paid for an accrual rate of one fiftieth or 10 per cent. is paid for a rate of one fortieth, we will introduce a new scheme, whereby 5.5 per cent. will be paid in for an accrual rate of one sixtieth. That is simply fair.
Simon Hughes: I want to allow the hon. Gentleman to correct what I said or at least to put the Government’s position. My proposition earlier was that the new scheme would be less expensive to the Treasury—I think that I was correct in saying that it would effectively be cost-neutral—but can the Minister confirm that as he understands it the scheme will certainly not cost the public any more and that the objective of the whole package is to be cost-neutral at most?
Chris Bryant: I was coming to that. The Government reckon that the new accrual rate will cost something in the region of 0.4 per cent. of future service payments in the scheme, but similarly, the benefit of the changes to the provisions relating to retirement through ill health will be something in the region of 0.4 per cent., so the two elements will balance each other out. That is why we are glad to say that what is being put forward this afternoon is entirely cost-neutral.
As for retirement through ill health, the hon. Member for Bournemouth, West pointed out the concerns that many have raised. First, at the moment, everyone is treated equally in the decisions that the trustees have to make, despite the fact that there may be considerable differences between somebody who is clearly permanently incapable of undertaking any future paid employment and someone who thinks that they may be able to do some work, but not the arduous work of a Member of Parliament. Furthermore, there is a concern that there is no system of review at the moment. As has been pointed out, this is not so much a question of sudden miracles occurring in people’s medical conditions as of the fact that their conditions might go through different phases or cycles, during which it might be possible for them to return to work. As we know, returning to work is one of the best forms of cure for many people. We are aware that it is important for there to be a system of review.
Mr. Winnick: I apologise if my hon. Friend has already covered this point. I do not wish to be accused of hypocrisy, as I will obviously be a beneficiary of the pension scheme. Does he accept that, while it is important for there to be such a pension scheme, questions are bound to be asked about the difference between our scheme and those of the millions of ordinary people who are now being forced out of final salary schemes? There is speculation, to say the least, in the present circumstances about what sort of pension most of our constituents will receive when they reach retirement age.
Chris Bryant:
I very much hope that my hon. Friend will not be retiring for some considerable time. I also hope that he will not have to retire for reasons of ill health; he seems to be a gentleman of exceedingly good health. He has made the important point that many of our constituents look at our parliamentary contributory pension scheme while having concerns about their own
pension arrangements. That is why the Government have been keen to ensure that these proposals, in their unity, will not cost the taxpayer a single penny more, and that the package that we are introducing today will be cost-neutral. That point could not be more tellingly made than in the present global economic circumstances, but it also behoves us to look carefully at the way in which we look after ourselves. That is why it is right that there should be a tightening of the provisions for retirement through ill health, as the trustees have proposed.
Mr. Don Touhig (Islwyn) (Lab/Co-op): My hon. Friend the Member for Walsall, North (Mr. Winnick) was quite right to point out that some of our constituents are having difficulties with their pensions, but the House should be aware that, of about 770 Members who left the Commons in the past 10 years, only 34 qualified for the full pension.
Chris Bryant: My right hon. Friend makes a good point. It is also true that many former Members of Parliament have to rely on the charitable funds that the House provides because, in the past, provision has simply not been adequate. Those who commit themselves to public service through the House are owed a debt of gratitude. We do not want to overstate that, but it is important that we should look at that issue.
On the matter of retirement through ill health, it is important that we should introduce the two tiers that the trustees are calling for. That will mean that those who are permanently incapable of any work—including work in the House of Lords—would get the full pension to which they would be entitled if they were not retiring through ill health and had been able to work until the age of 65. Others, who have only a partial incapacity and who are not permanently incapable of any further work—and who might end up in the House of Lords—would receive a pension only in relation to what they had so far earned by virtue of their contributions and the Treasury contributions, but that would not be actuarially reduced by virtue of the fact that they were retiring early.
It is also important that there should be regular reviews. My hon. Friend the Member for Walsall, North (Mr. Winnick) asked the hon. Member for Bournemouth, West how many people had retired through ill health. I can tell him that the precise figure for the past 11 years is 26, so we are not talking about an enormous number of people. However, there can be a great deal of distress involved not only for the individuals concerned, but for
their families. Being a Member of Parliament is an arduous job, not least because of the travel between our constituencies and the House, and if we are to do the job well, we need to throw all our energy into it, as I know all hon. Members seek to do.
Finally, the hon. Member for North Southwark and Bermondsey (Simon Hughes) said that this was not a Government concern. I think that there are only two regards in which it is a Government concern. The first is that, as my hon. Friend the Member for Walsall, North said, the eyes of the nation are on how we make provision for our own pensions, so it behoves us at this particular time to be careful not to incur additional costs to the taxpayer. The taxpayer already makes significant contributions to the parliamentary pensions fund. Secondly, we are presented with a cost-neutral package—as I have already said, a saving of 0.4 per cent. in one direction and an additional cost, we believe, of 0.4 per cent. in the other direction.
Chris Bryant: Those were to be my final words, but I will give way to the hon. Gentleman.
Simon Hughes: Prompted by what the right hon. Member for Islwyn (Mr. Touhig) said, I think I am right in saying—the Deputy Leader of the House may confirm it—that the average length of service for MPs is for less than 10 years, so we are not talking about large numbers of people with huge pensions accrued over many years. It is too easily assumed by people outside that we are here for ever, whereas many MPs are actually here for a short time rather than a long one.
Chris Bryant: The hon. Gentleman is absolutely right. I do not want to undermine the parliamentary contributory pension fund, or, for that matter, contributory pension funds in any other public service. My right hon. Friend the Member for Islwyn (Mr. Touhig) and I represent remarkably similar seats and many of our constituents will earn considerably less than we earn as MPs. Many of their public sector pensions may be secure, but that does not necessarily mean that they will be very large.
I fully support the current pensions scheme. The Government are keen to ensure that we do not overburden the taxpayer on account of our contributions, but we obviously need to ensure that proper provision is made for all hon. Members so that they do not live in indigency in their old age.
Electoral Commission (Appointment and Remuneration of Chairman)
The Deputy Leader of the House of Commons (Chris Bryant): On a point of order, Mr. Deputy Speaker. There are two motions, one of which relates to the appointment of a new commissioner, with the other dealing with pay and remuneration. I wonder whether it would be convenient for the House to have one debate covering those two subjects.
Mr. Deputy Speaker (Sir Michael Lord): With the House’s permission, we will deal with motions 9 and 10 together.
4.58 pm
Sir Peter Viggers (Gosport) (Con): I beg to move,
That an humble Address be presented to Her Majesty, praying that Her Majesty will appoint Jennifer Watson to the office of chairman of the Electoral Commission with effect from 1 January 2009 for the period ending on 31 December 2012.
Mr. Deputy Speaker: With this, it will be convenient to discuss the following motion:
That the following provision shall be made with respect to the remuneration and expenses of the Chairman of the Electoral Commission (“the chairman”):
(1) In respect of remuneration for service between 1 January 2009 and 31 December 2009, the chairman shall be paid £100,000.
(2) In respect of the year starting with 1 January 2010 and in respect of any subsequent year starting on the anniversary of her appointment, the chairman shall be paid as remuneration for that year the sum payable during the immediately preceding year increased by the same percentage of that sum as the percentage (if any) or total of the percentages (if more than one) used to 10 increase the salary of a High Court Judge during that immediately preceding year.
(3) Where during any of the years referred to above the chairman ceases to hold that office, the sum to be paid to her in respect of the part of the year for which she held office shall be such proportion of the sum which would have been due had she completed that year in office as reflects the portion of that period during which she held the office of chairman.
(4) The chairman shall be reimbursed for any expenses she incurs in connection with the discharge of her duties as chairman on travel, accommodation and subsistence.
(5) The pension of the chairman shall be calculated broadly by analogy with the pension scheme of the staff of the Commission, thereby delivering a pension based on the Principal Civil Service Pension Scheme.
Sir Peter Viggers: It is unusual for a Back Bencher to be asked to open a debate on a substantive motion, so my first task is to explain why the hon. Member for Gosport is on his feet and not the Minister. The motions before the House today are proposed by members of the Speaker’s Committee on the Electoral Commission. The Speaker has important statutory responsibilities in relation to decisions on the appointment and remuneration of the electoral commissioners. However, Mr. Speaker is not in a position to move a motion in the House, so it is in my capacity as a member of the Speaker’s Committee who answers on behalf of that Committee that I speak today.
All hon. Members have had the opportunity to read the report that the Speaker’s Committee published on 15 July, which set out how Mr. Speaker discharged his responsibilities under the Political Parties, Elections
and Referendums Act 2000 to select a candidate for the post of chair of the Electoral Commission. It informs the House who is on the panel that advises Mr. Speaker on that selection and it is ably chaired by Baroness Fritchie. As a member of the panel, I can answer any questions that colleagues may have on the way in which the panel went about its business or on the reasoning behind the decisions that it and the Speaker’s Committee took. The Minister may be better placed than I to pass on to his Ministry of Justice colleagues any queries about the Government’s current legislative proposals as they will affect the commission in so far as those proposals are relevant to the matters before the House this evening.
The panel had to take two decisions: the first on whom to recommend to Mr. Speaker as candidate for the post of chair, and the second on the terms and conditions attaching to that post. Since the commission was set up in 2001, there has been only one chair, Sam Younger. I want to thank him for his leadership of the commission in its formative years. He has many friends in the House, and I am sure that many Members will join in wishing him well. His success in the role is evidenced by the fact that last year he was reappointed for a second term at the request of the House. He bequeaths to his successor an organisation in good shape, ready to face the challenges that are certainly coming. I pay tribute to Sam Younger, and wish him well.
Andrew Mackinlay (Thurrock) (Lab): The hon. Gentleman said that he and his colleagues were involved in the appointment, and that he could answer any questions about it. I believe that the remuneration figure that appeared on the Order Paper some weeks ago was £150,000. I do not know what has happened since—there may have been a printing error—but that is my recollection, and I should like to know what has taken place in the intervening period.
In a parliamentary answer, the hon. Gentleman indicated that the person whose appointment is proposed today would work for approximately three days a week. Is the recommended £100,000 a pro rata payment? Are we talking about £100,000 a year for a three-day week, or £60,000 a year? I think we should be told, and I should be grateful if the hon. Gentleman provided clarification.
Sir Peter Viggers: The hon. Gentleman has asked some pertinent questions. He will not be surprised to hear that I am about to deal specifically with the two points that he has raised. I shall deal first with the part-time basis and then with the pay, but I will answer the hon. Gentleman’s questions in terms.
Bob Spink (Castle Point) (Ind): Before the hon. Member for Gosport (Sir Peter Viggers) answers those questions, may I join him in paying tribute to Sam Younger? He has worked very hard, and when I speak later I shall cast no aspersions on him whatsoever. He is a great guy.
Sir Peter Viggers: I am grateful to the hon. Gentleman for his comments.
Since the commission had become a well-established feature of the political landscape, the Committee on Standards in Public Life recommended, in its important report of January 2007, that the post of chairman be held on a part-time basis. The Speaker’s Committee
accepted that recommendation, and considered it desirable for the post to be filled on a part-time rather than a full-time basis. That underlines the non-executive nature of the role, and is entirely in line with similar public sector appointments. The panel appointed by Mr. Speaker took the same view. Mr. Speaker also wrote to a number of eminent public figures seeking their opinions on the matter, and they were overwhelmingly in favour of moving to a part-time appointment. So, too, were the leading firms of recruitment consultants with whom the panel discussed the question. The post was therefore advertised as involving a commitment of, typically, three days a week.
The report of the Speaker’s Committee also records the original decision, made in March 2008, to maintain the existing level of remuneration for the post, notwithstanding the move to a part-time role. That decision, too, was made after extensive discussion and careful consideration. Again, the panel asked leading consultants for their opinions. These were consistent with the advice received from others, which was that if we really wanted to attract a first-class candidate for the post—and in the view of the Speaker’s Committee, the post was too important for us to settle for anything less—we should not reduce the salary from the level set by Parliament.
Bob Spink: Will the hon. Gentleman please put on record for the benefit of Members what Sam Younger is currently paid in his full-time post?
Sir Peter Viggers: I shall come to exactly that point. I am about to deal with the issue of remuneration, and it may be helpful if I do so in my own way.
Rob Marris (Wolverhampton, South-West) (Lab): The hon. Gentleman referred to the criteria that were adopted. I do not recall whether he used the word “consultants”, but he said that outside advice had been taken on what criteria were appropriate for the securing of a suitable candidate. Was public service—that somewhat devalued but to me extremely important factor—taken into account? As I said in the Chamber recently in the context of the Information Commissioner, we keep comparing senior public servants doing important jobs with those in the private sector in terms of remuneration, while not taking into account what I consider to be the vital issue of devotion to public service, which often involves a sacrifice in view of what the individual in question could earn in the private sector.
Sir Peter Viggers: I take the hon. Gentleman’s point, and when I conclude my arguments, he may feel that it has been well met.
It is important to note that, pro rata, the original offer was not off the scale for non-executive chairs. The chair of the Child Maintenance and Enforcement Commission is paid at this rate, as are the chairs of HM Revenue and Customs and the Court Service board, and the chair of Ofcom is paid at a slightly higher rate. The fact is that there is a highly competitive market to secure the services of the best people. I can tell the House that two very credible candidates dropped out of this competition, in one case at the very last minute, because they had accepted other offers.
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