It is wrong for MPs to featherbed their pensions

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The Independent Online

Members of Parliament should be paid generous salaries for two reasons. People of ability should not feel that they have to make a huge material sacrifice, compared with what they might earn elsewhere, if they go into politics. Nor should they be given an excuse for pursuing outside interests when they should be doing a full-time job representing their constituents.

Members of Parliament should be paid generous salaries for two reasons. People of ability should not feel that they have to make a huge material sacrifice, compared with what they might earn elsewhere, if they go into politics. Nor should they be given an excuse for pursuing outside interests when they should be doing a full-time job representing their constituents.

The Independent has always been impatient, therefore, with hair-shirt tendencies which demands that MPs should be paid no more than average earnings – even while we harbour a sneaking admiration for Lionel Jospin, the French Prime Minister, who in his early days in office at least had a reputation for modest living and who refused to give up his small and battered car.

We have long argued that MPs should receive generous allowances to employ staff to support them in their democratic roles of dealing with constituents' problems and of holding the Government to account.

MPs should not, therefore, be begrudged their forthcoming pay rise to £55,000 a year. What is unacceptable, however, is their extraordinarily generous pension scheme, which they are expected to improve even further. It was stunningly insensitive for them to increase their pension benefits, which are defined in relation to their salary as MPs, at the very time when salary-linked schemes are being closed at an accelerating rate throughout the private sector. The decline in the stock market has put companies under pressure to end schemes which guarantee pay-outs – such as the one which MPs are about to vote to increase. It also means that the growing number of their constituents who have to rely on alternative pensions linked to stock-market performance are feeling the squeeze.

MPs cannot even argue with credibility, in today's flexible labour market, that politics is an especially insecure profession. They have, in effect, a four-year contract, which is more than most people do. And they have a generous severance scheme which pays out if they lose their seats (and even more if they lose ministerial office).

Pay them well, by all means, but let them invest in their own pensions. That would have the added benefits of giving them a direct incentive to understand the finer points of today's capital markets, and to have a chance of approaching Alistair Darling's plans for pensions reform from a position of less than total ignorance.

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