IRELAND - The government has been accused of "political cowardice" for reducing the pensions of former ministers by 25% instead of abolishing the entitlement immediately.

Currently former ministerial officeholders who continue to serve as either members of parliament (TDs), senators or members of the European Parliament (MEPs) are entitled to receive half of the pension that they would otherwise be given, payable from age 50.

In a debate on the 'Oireachtas (Allowances to Members) and Ministerial and Parliamentary Offices Bill 2009' yesterday the government confirmed the rules would abolish the existing arrangements from the date of the next election, but argued legal constraints meant a limited reduction applied to sitting members. (See earlier IPE article: Ireland cuts former ministers' pensions by 25%)

Brian Lenihan, minister of finance, admitted: "While these measures are intended to effect savings on public expenditure, their financial impact will not be significant although they are a real contribution by members as individuals and a signal that members of both Houses are willing to give a lead in a time of great economic difficulty."

However TDs from opposition parties all argued the pension arrangement should be immediately abolished.

Deputy Alan Shatter, representing Fine Gael, said: "It is unfathomable that the Minister's legislation seeks to reduce the ministerial pensions of sitting Deputies by 25% on the basis of some advice on constitutional issues which suggests he cannot interfere with them at all."

He argued there is either a constitutional reason not to interfere with pensions, so a 25% reduction or any reduction is unconstitutional, or the government is allowed to interfere so there is no constitutional issue.

Instead he claimed, "there is clear evidence of political cowardice" as the government had not asked its backbenchers to voluntarily give up the entitlement "to set an example for the rest of the country", which would then have solved the issue without the need to introduce the Bill.

Deputy Arthur Morgan, representing Sinn Féin, added: "My issue with this Bill is why the pension is not being scrapped entirely. So what if there is a legal challenge? The Minister should face them down and take them on."

He argued it is "totally ironic that we are here, in the last week of this term, deliberating on a Bill aimed at cutting a meagre 25% from these ministerial pensions when many workers nationwide have lost their pensions completely".

"How can some elected representatives prioritise the recapitalisation of banks but do nothing as thousands of working people may end their lives in poverty despite having paid money to pension funds all their lives? This is not leading by example. Retaining any portion of a ministerial pension until the next general election is ludicrous," added Morgan.

In response to the concerns Lenihan revealed the Attorney General "advised that removing the pensions from current sitting Members was vulnerable to constitutional challenge but that a reduction following consultation with the Members would be possible".

Therefore the government asked for feedback from members and "decided a proportionate reduction of 25% would be possible", as the Attorney General had recommended a "ceiling should apply to any reduction that could be effected in the case of a sitting Member".

Lenihan added: "Governments have to act on the advice of the Attorney General. A lot of legal opinions are expressed nowadays but at all stages before and since the budget the advice of the Attorney General has been consistent and he has always maintained that issues would arise from the implementation of any decision to abolish pensions or increments. We acted within the legal constraints that applied to us."

If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email nyree.stewart@ipe.com

 

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