Pensions Bill

moved Amendment No. 137: 137: After Clause 22, insert the following new Clause— ““Independent Public Sector Pensions Commission The Secretary of State shall establish an independent commission to be called the Independent Public Sector Pensions Commission to evaluate the terms, benefits and affordability of public sector pensions; and report to Parliament within two years of the day on which this section comes in to force.”” The noble Lord said: We discussed public sector pensions at some length at Second Reading, and I do not propose to introduce at this late hour a Second Reading debate, but I want to set out why we want an independent commission to look at the affordability in particular of the operation of public sector pensions, and why in the context of a number of proposed independent reports and commissions, we believe that this is by far the most important and the one we would like to get a nap on, if I can use that expression. In essence, we are proposing a Turner commission mark 2. The noble Lord, Lord Turner, whom I very much hope we will hear from later, did an excellent job in many ways and pointed out quite clearly the discrepancy between coverage of pensions in the public sector and that in the private sector, with his striking statistic, as the numbers then were, that public sector employees made up only 18 per cent of the national workforce and 30 per cent of the pension rights. I do not know whether the noble Lord can update the Committee, but I imagine that that discrepancy will have got wider still, given how good-quality private-sector pension schemes have been inexorably squeezed further. We believe that there is no more important issue in pensions than this. The matter was put rather well in Committee in the other place. Mr John Penrose, the Conservative Member for Weston-Super-Mare, said: "““We run the risk of having two systems, one public and one private—the public one being, in the minds of private sector workers, overly generous, with a series of schemes that they could ""not possibly aspire to themselves, while public sector workers are concerned they will end up losing out on rights that they have fought long and hard to accumulate over time. That would be extraordinarily divisive … If … we have a commission that is designed to shed light on this complicated and potentially divisive issue, we shall have an opportunity to avoid that two-nations approach. By creating the analysis and providing the structured debate””—" this is important— "““that we have enjoyed from the Turner commission, a commission could save this Government, or a future Conservative Government, a great deal of pain by ensuring that any proposals that it makes … are properly thought through, carefully balanced, and above all fair between the private and public sectors. I hope that the Committee will support the new clause””.—[Official Report, Commons, Pensions Bill Public Bill Committee, 8/2/07; col. 411.]" Mr Penrose was supporting an amendment moved by my honourable friend David Laws; it is very similar to the one we are moving today. Mr Penrose also pointed out that the value of the Turner commission lay in what it did with the information it received and the analysis it created providing the foundation stone for the consensus. This was in response to the Minister saying that a great deal of information was available already. That is important. One needs an independent commission which, by the force of its analysis and the strength of its argument, as happened in Turner mark 1, really helps to build up that consensus. I am delighted to say that the Conservative Members, led by their Front-Bench spokesman, Nigel Waterson, voted for our amendment on that occasion. The figures are fairly simple: judges have an employer’s contribution of more than 30 per cent of salary; fire fighters and police are all in the high 20s; and MPs have 26.8 per cent. These figures are not in the long-term affordable. We, in particular, were concerned about the way in which the Government effectively sold the pass on the public sector retirement age early on in the Turner commission’s work. While clearly any change to the retirement age has to be phased in, we believe the present proposed arrangements will take far too long and that the cost of public sector pensions as a proportion of national income will grow by something like a third over the period to 2050, which we believe is not sustainable. We will discuss the exact wording of our amendment with other parties. I do not propose to press the amendment to a Division tonight, but I hope that on Report we will be able to find common ground, as happened in the Commons. I look forward to hearing the remainder of the debate, in particular the contribution of the noble Lord, Lord Turner. I beg to move.