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We are probably the meanest democracy in the western world in the way that we treat our Members of Parliament in terms of pensions. I will demonstrate that with facts and figures, but first I shall give some other public sector comparisons. Only one other public sector involves the principle of interrupted service: when the legal profession moves into the judiciary, sometimes temporarily. The judges' scheme is complicated. They used to receive a full pension after 15 or 20 years, depending on the rank of judge they were, but they are now on an accrual rate of one fortieth, which is what we are asking for.
The police have a complicated accrual rate. The rate is one sixtieth for the first 20 years and two sixtieths for each year thereafter, up to a maximum of forty sixtieths, which means that they receive, effectively, an accrual rate of one fortieth. They achieve a maximum pension of two thirds after 30 years of service. Of course, their retirement age is very much lower than ours. We retire at 65, although it is possible to retire at 60 if one is willing to take a substantially reduced pension. In the police service, however, the pension is payable from the age of 50. Normal retirement age in the police is 55, and 60 for inspectors and superintendents, except in the Metropolitan police, for whom it is 55.
Similarly, in the armed forces, to which reference has been made, the scheme grants a full pension after 34 years' service. That is similar to our scheme, but the armed forces' retirement age is 55 and they can retire after 16 years' reckonable service. Unlike our scheme, theirs is non-contributory.
Mr. Todd: I draw the hon. Gentleman's attention to the comparison made by the trustees in their evidence. They regarded the range and diversity of a Member of Parliament's job as comparable to that of directors and senior executives in the private sector. Having left such a
Mr. Butterfill: All I can say is that the review body thought that MPs were comparable with senior management and junior directors. The hon. Gentleman might have forgotten that it was making a comparison with the ordinary duties of a Back Bencher, and perhaps overlooked the fact that Members undertake considerable additional and onerous unpaid appointments, whether as Parliamentary Private Secretaries, members or Chairmen of Select Committees, members of the Chairmen's Panel, or Opposition Front-Bench spokesmen. A large number of the appointments that the majority of Members undertake substantially increase their work load. So the hon. Gentleman's comparison is not terribly accurate.
I want to make a comparison with what happens in other Parliaments. In Australia, pensions are payable after 12 years or four parliamentary terms in the case of voluntary retirement, and after eight years or three parliamentary terms in the case of involuntary retirement. The scheme provides for a maximum pension of 75 per cent. of basic salary after only 18 years.
In Finland, the full pension is payable after 15 years as an MP. Those born before 1940 get 66 per cent. of MPs' pay from the age of 60. Those born after 1940 are eligible for 60 per cent. at 65. However, Members who are defeated receive what is called an "adjustment pension" for the rest of their lives, at the current rate of 1,250 ecu a month. When an MP dies, his spouse and children receive his full pension.
In France, Members can accrue a maximum pension of 84.375 per cent. of final salary after twenty-two and a half years. In Germany, the maximum pension is 75 per cent. of final salary after seventeen and a half years.
In the Republic of Ireland, the accrual rate is one fortieth and Members receive two thirds of their pay after twenty-six and two thirds years. That is in line with our suggestion, and is one of the less generous overseas schemes.
In the Isle of Man, the accrual rate is one fortieth, but the maximum pension payable after 30 years' service is 75 per cent. of final salary. In the United States of America, the maximum pension is 80 per cent. of final salary, with an accrual rate of one fortieth.
The combined resources of the Fees Office and the House of Commons Library have not enabled me to find a single other western country that pays such a mean rate of pension as we do, and it is about time we put that right.
Mr. Chris Mullin (Sunderland, South): I have a feeling that my contribution to today's proceedings may prove a mite less popular with my colleagues than my speech yesterday. Indeed, colleagues whose judgment I respect have advised me that it is not a wise career move for someone like meyoung, ambitious, upwardly mobileto table such amendments. Well, that is something I shall just have to live with. I came to this place to do what I
I should say at the outset that I am strongly in favour of the motion on Members' allowances, which will place the employment of our staff on a proper footing. That is long overdue, and I congratulate those responsible, particularly my hon. Friends the Members for Dundee, West (Mr. Ross), and for Ealing, Acton and Shepherd's Bush (Mr. Soley), who played a leading part in achieving the reform.
I turn to the amendment that is in my name and those of several other hon. Members. I do not believe that there is any justification for awarding ourselves an extra £4,000 over the next two years, and my amendment would rescind that. Nor should we be in the invidious position of having to vote on our own pay, and my amendment would put an end to that embarrassment once and for all. It would do so by linking our fortunes not to those of some anonymous civil servant, as we have attempted to do in the past, but to a cross-section of public servantsnurses, teachers, doctors and dentistswith whom our constituents can readily identify.
If the amendment is accepted, our pay will rise each year by the average of the increase received by those professions. The figure for last year would have been about 3.7 per cent., and for the previous year about 3.3 per cent. That is not very different from the increases that we received. We would not, however, receive the extra £4,000.
There is a view that certain so-called top people should be immune from the laws of the marketin which, in all other respects, they usually believe stronglythat apply to ordinary mortals. I do not share that view. So far as possible, elected representatives should share the same sunshine and rainfall as those whom they represent. I do not accept that £49,000 a year is an inadequate salary. We are in the top 10 per cent. of income earners. We earn more than the overwhelming majority of our constituents, although I appreciate that that is less true of those who represent the more prosperous areas. However, the fact remains that £49,000 a year is a good salary, even in the most prosperous areas. I agree with the comments of my right hon. Friend the Leader of the House in opening the debate: we should not undervalue our work, and our present salary does not do so.
It might be possible to justify an increase this time if we could argue that ours is a profession that finds it difficult to attract candidates of the right calibre, or if seats were left unfilled owing to a lack of applications. The truth, however, is that all parties are heavily oversubscribed with applicants for winnable seats. Perhaps it has escaped my attention, but I have not noticed any unfilled vacancies. Unlike nurses, teachers and doctors, there is no shortage of people wanting to become Members of Parliament.
Mr. Mullin: We are not debating ministerial salaries. Should the hon. Gentleman's talents come to the attention of the Prime Minister and in due course he becomes a Minister, I assure him that I, for one, will not resent whatever salary happens to be paid for that job.
It cannot have escaped our attention that Members' standing in the esteem of the public is not all that high at present. No doubt there are a variety of reasons for that, many of them unfair, but we are not in such a strong position that we can afford to take even a little gamble with public opinion. I know that there is a view that this is a small storm and it will all blow over in a few days, but I do not agree: every time we do something like this, it adds to the great ocean of cynicism lapping at the foundations of the democratic process. Nor will it be forgotten as quickly as some Members think. Even now, after five years, people still raise with me the last outrageous salary increase that we voted ourselves, in July 1996.
Over the past four weeks, I have participated in various discussions about the urgent need to restore respect for politicians and the political process. I am not clear how awarding ourselves a large increase in salary will help to achieve that. I look forward to hearing from anyone who thinks that it will.