Double Dipping

Lord John Prescott's decision to stand for election as Police Commissioner in Humberside - provides the perfect opportunity to illustrate what's wrong with the present system of public sector pensions.

As regular readers know - the present set up works to the advantage of people who are already well paid - the 'rules' are skewed towards those at the top - not the bottom.

So let's use Lord John (73) as an example - a good socialist example - and unpick the various issues one by one.

First of all Lord John was a Westminster MP for 37 years - before standing down in 2007.

But his pension will be calculated using his final salary as deputy Prime Minister - even though he spent only 10 years in that job - which meant that in his retirement  Lord John received a huge and artificial boost to his pension from the public purse.

So what's that worth?

I don't know for sure is the honest answer - but if LJ's final salary was worth around £140,000 a year - then a maximum pension would pay him £70,000 a year or so - plus a tax free lump sum of around £210,000 (three times his final salary).  

Maybe even more - because the MPs' pension scheme is especially generous.

Anyway not content with retiring and taking up painting or fishing - Lord John has  also been ennobled and sent off to the House of Lords - where he can claim £300 a day in tax free allowances just for turning up at 'work'.

So what's that worth? 

I don't know - but let's say £50,000 a year - tax free of course.

Now what Lord John wants all this money for is unclear - maybe it's an expensive business running Two Jags - who knows?

The big issue for me is that Lord John is being paid his generous public sector pension - while effectively continuing to work - yet this has no effect on the money he receives from the state.

Which strikes me as a rather odd way to use public money.

Because if Lord John wants to continue working, that's fine - and if he wants to stop working altogether, that's fine as well. 

But why should he - and many others - have their cake and eat it at the same time.

If Lord John manages to become the Police Commissioner for Humberside - he'll cop another £100,000 a year from the public purse - to coin a phrase.

After a lifetime of doing very nicely thank you very much - out of a very well used public purse in his case.

So I would bring in a new rule which would prevent people who are already retired on generous public pensions - to benefit financially from other sources of public money.

If they want to volunteer their services for free - then that's fine by me - that would be admirable in the present economic climate. 

But why do we pay this old phoney anything other than his expenses - for traipsing back and forwards to the House of Lords.

The principle underpinning the system ought to be that you don't get to double dip the public purse - if you're retired already and receiving your pension.

Me Maw, Me Maw, Me Maw