Thursday, November 02, 2006

Latest Trough News

Loverly grub
We've blogged the outrageously generous MPs' pension scheme many times (eg see here). Briefly, at a time when most people have lost any hope of a decent final salary pension, MPs continue to enjoy a deal with a one-fortieth accrual rate (meaning they can retire on 60% salary after just 24 years*), fully funded and guaranteed by us taxpayers.

Earlier in the year we learned that there was a £50m hole in the fund, which they would be plugging largely with our money- at an extraordinary 27% contribution rate, compared to around 6% in the private sector. And yesterday we heard total taxpayer contributions will amount to a staggering £168m between now and 2020.

But yesterday's trough snufflings went further. The government has also decided to spend another £6m pa on a new "communications allowance" for MPs, which will pay for the publication of glossy propaganda brochures to add to the piles of junk mail already clogging our hallways.

It is clearly designed for all those Labour MPs facing the Reaper in 2010, so they can mount a last-ditch effort to impress us with their personal charisma and "constituency work".

But why should we pay? As Michael Pinto-Duschinsky pointed out a couple of weeks ago, disguised taxpayer support for political parties is already running at £50m pa plus. And - listen carefully - WE DON'T WANT TO PAY.

*Actuarial footnote... do try to stay awake at the back: a pension accrual rate of one-fortieth simply means that with each year's employmnet, you accrue an annual pension entitlement of one-fortieth of your final salary. Most private sector schemes are much less generous, with accrual rates between one-sixtieth and one-eightieth. But then again, most private sector schemes have been forced to close by Gordo's pension tax grab and his undermining of UK stock market performance. So for most pensioners a rather more pressing concern will be how they're going to pay the gas bill.

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