Cameron urges MPs' pension reform

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David Cameron has said the "very generous" MPs' final salary pension scheme should close to new entrants.

He said if MPs were to "look other state sector public sector employees in the eye" over pension reform, their own scheme had to be changed.

At a press conference the Tory leader said allowing the scheme to continue endlessly was "not appropriate".

Meanwhile Lib Dem leader Nick Clegg has said MPs' pay rises should be linked to the state pension.

Mr Cameron was detailing the findings of his party's Democracy Task Force - chaired by former chancellor Ken Clarke - which suggests policies aimed at restoring public trust in politics.

We have to look at our own pension arrangements and recognise that a very generous final salary scheme, going on into the future, is not appropriate David CameronConservative leader

He said he was "very attracted" to the suggestion to end the final salary pension scheme, which he said was needed to tackle a potential "deep divide" between public and private sector pensions.

Instead new MPs should be enrolled in a "defined contributions scheme", he said.

"If we really want to look other state sector, public sector employees in the eye, and say we really do need to look at pension arrangements and reform pension arrangements and make sure they're affordable, we have to look at our own pension arrangements," he said.

Honours awards

Mr Cameron said there was a need to "recognise that a very generous final salary scheme, going on into the future, is not appropriate and it is time to close the scheme to new entrants".

He praised the recommendations of the Democracy Task Force, which also included removing the powers of ministers to award honours, tighter control over jobs ministers can take after leaving office and stopping MPs voting on their own pay and allowances.

It seems only right to me that our pay rise should not be more than the rise in the basic state pension Nick CleggLib Dem leader

Instead their pay should be linked to a benchmark - such as the change in average earnings, it said.

The Senior Salaries Pay Board is expected to recommend MPs get a 2.8% rise in its report later this week - which MPs will debate and vote upon within a fortnight.

But Prime Minister Gordon Brown has urged them to vote through a 1.9% rise, to keep them in line with public sector workers.

Review announced

Mr Cameron said his frontbench would support the government on this - and urged backbenchers to consider how it would look if MPs voted through a bigger rise for themselves, than they expected of others.

Meanwhile the new Liberal Democrat leader Nick Clegg, who has also said he will vote for a 1.9% rise, has called for an end to the "unseemly spectacle" of MPs voting for their own rises.

He has written to the prime minister proposing a link between MPs' pay and the basic state pension.

"As MPs, we are basically public servants and it seems only right to me that our pay rise should not be more than the rise in the basic state pension," Mr Clegg said.

"Those receiving a state pension have contributed to society throughout their whole lives and whatever rise is deemed acceptable for them should therefore be acceptable to MPs too."

Mr Cameron also said he wanted to "get away from" MPs voting on their own pay and pensions.

And Commons leader Harriet Harman has already indicated that there will be a review into the issue of MPs' pay and pensions being voted through in the Commons.

Last week she told MPs this year could be "possibly the last time" they debate and vote on their own pay.