Baroness Turner of Camden (Labour)
My Lords, I am sure that the noble Lord will not be surprised to learn that I oppose the amendment. I do so because the present salary and pension structure for civil servants is the result of agreements between the Government and the unions, and because it is generally accepted that the pension package is an element of deferred income. As has already been stated, this is a question of deferred pay for the civil servants covered by the package. It is true that the present arrangements are non-contributory, but I understand that Civil Service salaries are effectively reduced by around 6 per cent in comparison with similar employment in the private sector to account for the non-contributory aspect.
We really are not talking about highly paid people. The average Civil Service pension is around £5,400 a year, with a quarter being less than £2,000 a year. Any attempt to make savings in public sector pensions will have a greater impact on women pensioners who have lower pensions than men due to their lower average salaries and shorter service records. Furthermore, if those pensions are taken away, the taxpayer will fund further payments under pension credit, since the people who would be disadvantaged if this package were removed would be those eligible for pension credit. As we all know, many of those who are eligible to receive means-tested benefits do not actually get them. Pension credit is not an easy way of covering the loss to those who otherwise would be compensated through the Civil Service pension scheme.
I understand that Civil Service pensions have already been through a process of evaluation and reform. The principles for reform of the scheme were agreed by the Government and the TUC in the Public Services Forum in October 2006. These principles recognise that public service pensions are a key benefit of public service employment and should be celebrated as such. It is important to maintain their good quality through retaining defined benefits and index linking. That is an important commitment. If the amendment to establish a commission was accepted, those covered by the present arrangements would be concerned lest the Government attempted to go back on what has already been agreed in the process of negotiations. I therefore urge that the amendment should not be accepted. We discussed this proposal during proceedings on a previous pensions Bill and the House rejected it. I hope that it will do so again. We have a negotiated agreement and there would certainly be difficulties if it was thought that any attempt was being made to go back on what has already been agreed. I suggest that this amendment should be decisively defeated.