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Powered by article titled “MPs to defy reform of their pensions” was written by Polly Curtis, Whitehall correspondent, for The Guardian on Thursday 14th July 2011 20.23 Europe/London

MPs are to fight attempts to make them pay more into their pension pots, risking a backlash from the 4 million public sector workers facing increases in their contributions.

MPs who run the parliamentary pension scheme are to defy a government order set out yesterday that they should face the same reforms to their pensions as other public sector workers, arguing that they are already among the highest contributors in the public sector – paying 11.9% of their salary – and saw a rise in contributions only two years ago.

The leader of the Commons, Sir George Young, told parliament on Thursday he would pass the issue to the Independent Parliamentary Standards Authority, completing a process to remove responsibility for parliament to set its own pay and remuneration following the expenses crisis.

“Given the failure of self-regulation, which so damaged parliament’s reputation, this represents a significant step in drawing a line under the problems of the past and rebuilding public confidence,” he said.

“We have consistently made clear that parliamentary pensions must be reformed in the light of the [Hutton Report’s] findings and subsequent application to other public service schemes. “There is no case for MPs being treated differently from other public servants.”

But Brian Donohoe MP who chairs the trustees of the parliamentary scheme said they would argue for less than the suggested 5%.

“There’s an awful lot to be negotiated,” he said. “MPs have already paid an additional 1.9% and that was increased about 25 months ago. If people know how much we pay compared with elsewhere I think we can make a case,” he said. “We have to set an example to the country but we don’t have to capitulate to unreasonable demands. My job is to represent members of the scheme.”

The government has said it is to increase pension contributions by an average of 3.2 percentage points for public sector workers, but those earning under £18,000 will be protected, meaning high earners will pay more. The chief secretary to the treasury, Danny Alexander, has said the highest increases would be capped at five percentage points, which under current conditions would probably be applied to MPs, who earn £65,738 a year.

They will also move from a final salary scheme to to a “career average” scheme. In practice this will only affect ex-ministers, as ordinary MPs have a flat-rate salary.

The government has already accepted that a special case may have to be made for members of the local government scheme which, like the MPs scheme, is self-funded and has a large investment fund.

The MPs’ fund, however, is about to go into the red because so many MPs retired at the last election and began drawing their pensions.

Mark Serwotka, general secretary of the PCS union, which has been at the forefront of the strikes against the pension reforms, said: “While the unreconstructed Tory millionaires in the cabinet are seeking to force public sector workers to pay more and work longer for much less in retirement, it seems MPs remain reluctant to see their own pensions cut.

“If this was out of empathy for public servants it would be welcome, but I suspect it has more to do with protecting their very generous arrangements that so far have received little scrutiny.” © Guardian News & Media Limited 2010

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