The Chairman of the Select Committee makes a technically accurate point, but one that ignores the fact that the Department for Communities and Local Government not only helps to fund that scheme, but may be pulling many of the strings.
Our exchanges highlight the fact that there are very different views about public sector pensions and about what needs to happen in future to make them sustainable. Surely the lesson is that the Secretary of State and the Government should borrow from the model that has served them so well in relation to the rest of pension reform, whereby they established an independent body chaired by somebody who is highly respected—[Interruption.] I am most grateful to the Pensions Reform Minister, but I am not offering myself, or any other Liberal Democrat Member, for the job, as I am sure that somebody of even greater independence would be needed.
The Government have a perfect model for flushing out the substance of the debate and securing a consensus. They should learn from the experience of Turner and consider establishing an independent commission to look into public sector pensions to give us a shared understanding of the economics of those schemes, which often rely on employer contributions—that basically means taxpayer contributions—and which are way in excess of anything in the private sector. Were the Government to establish such a commission, we could understand, on the basis of evidence—not prejudice from either the left or the right of the political spectrum—whether such pension schemes are sustainable. We could then bring forward proposals for rational reform. If we do not reform public sector pensions in that way, I fear that some future Government, of some party, will, in a very short period, have to make the reforms that should have been made with the sort of long lead times that the Secretary of State has provided today in respect of the change in the state pension age. If he is looking for a typically new Labour tough choice, establishing an independent commission to consider public sector pensions is precisely what he ought to do.
To return to some of the other detail dealt with by the Secretary of State today, another issue about which people were concerned when he made his previous statement, and one that is a big concern among constituents throughout the country, is the amount of time that we will have to wait for the earnings link to be restored to the basic state pension. The initial Turner proposal was for 2010, and the Secretary of State has not only moved back the earnings link and moved forward the increase in the state pension age, but he and the Chancellor have added another element of uncertainty about when the earnings link will be restored. It is unclear why that element of uncertainty has been added.
Pensions Reform
Proceeding contribution from
David Laws
(Liberal Democrat)
in the House of Commons on Tuesday, 27 June 2006.
It occurred during Adjournment debate on Pensions Reform.
Type
Proceeding contribution
Reference
448 c162-3 
Session
2005-06
Chamber / Committee
House of Commons chamber
Subjects
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Timestamp
2024-04-21 22:55:56 +0100
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