Orders of the Day — Parliamentary and Other Pensions Bill

Part of the debate – in the House of Commons at 8:18 pm on 27th April 1987.

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Photo of Mr John Biffen Mr John Biffen , North Shropshire 8:18 pm, 27th April 1987

The House has never been in a position of formally, totally and exactly reflecting any recommendations from the TSRB. I believe that the hon. Gentleman will none the less conclude, if he considers the legislation that was put through the House following that report on the pension scheme, that it reflected many of the recommendations, including the extremely valuable one on the rate of accrual. I accept that, of course, the House never has reflected and doubtless never will precisely and exactly reflect the recommendations of the TSRB. I will, of course, take note of any points that are raised today about the substance of the scheme, but I believe that our debate should and must concentrate on the contents of the Bill itself.

Clause 1 reproduces the main provisions of the existing legislation governing the existence of the parliamentary contributory pension fund. The fund will continue to operate with the current trustees, appointed by the House, as it does now. Detailed arrangements for the conduct of the trustees' business will, in future, be contained in regulations.

Clause 2 is the heart of the Bill. It gives a power to the Leader of the House to make regulations providing for pensions for Members, Ministers and certain other office-holders. The principal matters that may be covered by the regulations are listed in schedule 1. This clause and schedule are based on various provisions of the Superannuation Act 1972 which governs most of the main public service pensions schemes. Schedule 2 provides for the current legislation to continue to have effect until it is replaced, as appropriate, by regulations made under the new power.

Although the change from primary legislation to regulations means that the opportunities in the House for debate and amendment of the Government proposals will be less extensive, the clause provides significant safeguards for the rights of Members. No regulations can be made that adversely affect the accrued pension rights of former Members or office-holders no longer in service at the time of the making of the regulations, or their dependants, without their consent. The Leader of the House is obliged to consult the trustees and Members' representatives before making any regulations. The regulations themselves will be subject to affirmative resolution procedure in both Houses.

Clause 3 provides for the continuation of the annual Exchequer contribution to the fund, which is based on the recommendation of the Government Actuary. He will continue to report on the fund every three years, but the Bill does slightly amend present practice. In future the Government Actuary will be recommending a rate of contribution by the Exchequer for the years following publication of his report, rather than the years following the valuation date, which may be some time before the report is published. This will avoid unexpected adjustments to the rate of contribution, which can upset the trustees' investment activities.

Clause 4 gives authority for the payment of a pension to the widow of Lord Maybray-King, the distinguished former Speaker who died last year. When Mr. Speaker King retired in 1971 his pension arrangements were set out in a special Act of Parliament, as was the practice then. This provided for a pension to be paid to his then, wife, who was named in the Act, in the event of his death. She died, however, and he remarried, but the Act did not provide a pension for his surviving widow. There has been a certain amount of public comment on this provision, and I am pleased to have this opportunity to correct any misleading impression that may have been given. Mr. Speaker King's Retirement Act makes specific provision for his widow's pension to be subject to the limitations applying to the pension of Members' widows. Since the parliamentary pension scheme began in 1965, it has provided that the survivor of a marriage after retirement should be entitled to a pension. But it would clearly have been invidious to have made explicit provision in the 1971 Act for the possibility of Mr. Speaker King being married to anyone other than his then wife at the time of his death. Clause 4 is, therefore, needed to ensure that Lady Maybray-King is in no worse a position than if her husband had remained just a Member of Parliament and had not become Speaker.

The House will see from this brief description that the Bill is almost wholly concerned with the legislative framework of the scheme. As I suggested earlier, I envisage no substantial changes to the scheme itself in the absence of recommendations from the TSRB. Some changes will be necessary before next April, however, so that the scheme complies with the requirements of the Social Security Act 1986.

The most significant change is that membership of the scheme will no longer be compulsory for Members. This means that we, like all other members of occupational pension schemes, will be able to take advantage of the new freedom to choose personal pensions. I shall not detain the House further on this point now. I have already circulated to Members an outline of the pension scheme illustrating their effects, and we shall, of course, have an opportunity to debate the regulations themselves. I am incidentally indebted to my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) for pointing out an ambiguity in that outline in the reference to pensions based on final salary: in common with many other schemes, pensions are based on the salary earned in the last 12 months of service, rather than the rate in payment on the date of retirement.

In conclusion, I say to the House that I believe that we should not take up an inordinate amount of parliamentary time with debates on our terms and conditions. It is, however, right that there should be a proper degree of public and parliamentary scrutiny. This short and relatively modest Bill improves the modalities by which we make and discuss these arrangements. I commend the Bill to the House.