AMONG matters on which New Labour is deaf to all pleas is the restoration of the link between earnings and the state pension, notoriously broken by Margaret Thatcher. Shamed by that insulting 75p increase, the Government has more recently raised the pension by more than inflation. But this is a mere temporary, tactical ploy. In the long term the pension will wither as assuredly under New Labour as Old Tory.
Meanwhile, the Chancellor, needing to find cash ruled out by his high-profile commitment not to raise income tax, has taxed private pension funds instead. Attractive to the Government because it makes no immediate or obvious impact, this has become a key factor behind a rush by companies, including Marks and Spencer, British Telecom and Abbey National, to curtail or scrap their pension schemes.
Increasingly, people are expected to provide their own pensions. Poverty in old age on a scale not seen since Victorian times awaits many of today's young and even middle-aged citizens.
But one group is nicely cushioned. Indeed, though they already enjoy a pension more generous than most, our MPs have voted to boost it. While their pension has so far built up at the rate of one fiftieth of their final salary for each year of service, in future it will accumulate at the larger rate of one fortieth. Even at the present rate, just two decades of service brings a pension of £28,000. That's about £10,000 more than anyone on similar earnings would receive through a company scheme. To get the same as an MP would require contributions of about £559,000.
The gold plating on the MPs' pension doesn't stop there. Unlike in most company schemes, early retirement at 60, five years before the full pension is due, does not carry a penalty. And widows receive five eighths of their husband's pension compared with the standard half.
You've perhaps got to admire the nerve that allows MPs to erode the pension prospects of their electors while generously feathering their own retirement nests. But could anything better illustrate the rottenness at the heart of our Parliamentary system - the lack of scruples and principles among the so-called Honourable Members?
I suppose the Government has enough pensions business on hand at the moment. In tandem with enhancing the MPs' scheme it is sharpening the knife to remove statutory protection of employees' pension benefits when companies restructure.
Obviously pensions are an intolerable burden on their providers - except when the providers are us, funding the MPs' pensions.
IF Prince Charles wishes to generate large and positive headlines about Britain's public services, perhaps he will state a wish that all future young royals should attend state schools - and that from this day he and his family will rely entirely on the NHS, expecting no privileged treatment in matters such as regular checkups, appointments with consultants and admission to hospital.
Published: Wednesday, March 13. 2002
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