Salmond pension perk faces axe

HENRY McLeish and Jack McConnell will be laughing all the way to the bank. MSPs are set to axe one of the biggest perks of leaving Bute House: the £38,000-a-year pension enjoyed by former First Ministers from the moment they leave office.

But McConnell and McLeish will continue to receive the money. The review of MSP pensions would apply to Alex Salmond and future First Ministers, who would get the cash only when they reached 65.

The instant pension arrangement – which is also given to former Presiding Officers of the parliament – came in for bitter criticism after McLeish was able to claim the cash, even though he had served for just 12 months and resigned following the Officegate scandal.

Presiding Officers earn £38,453 a year on top of their MSP salary, and the bumper pension deal is currently costing the public purse more than £116,000-a-year. Along with McLeish and McConnell, there are two former Presiding Officers, Sir David Steel and George Reid, who both get £19,948. None of them has to make any contributions to the pension while in office.

The generous pay and pension deals offered to politicians will come back under the spotlight this week when MPs at Westminster vote on their own pay deal.

Gordon Brown has urged MPs to stick to a below-inflation, 1.8% deal. In a bid to show he is leading from the front, he announced last week that he would give up his own pension rights which, as with former First Ministers, entitle him to claim half his salary the moment he leaves the job.

Instead, he will now only claim the cash when he reaches retirement age.

A spokesman for Salmond said last week that the First Minister "hasn't given any consideration" to following suit.

However, the review of MSPs' pensions may now take the matter out of his own hands.

A consultation document issued by the Scottish Parliament suggests that there be "a minimum qualifying period" before the First Minister and Presiding Officer should be entitled to their pension.

It also suggests that there could be a "linkage to length of service in post". This move is to prevent the theoretical situation where a First Minister could serve for just a day, and immediately get £38,000-a-year for the rest of his life.

A source involved in the review said that MSPs would consider stopping all payments until a former First Minister had reached retirement age.

"Imagine if you got a new First Minister ever four years. You could end up with a whole slew of people getting their full pension even though none of them were retired. If Alex Salmond was deposed right now, he would walk away with a full pension. We will need to look at that," said one insider.

One system being considered is the scheme at the Welsh Assembly where the First Minister simply gets an enhanced pension based on the length of their service.

The review of MSPs' pensions could also provide a cash boost for MSPs. The review will consider whether to change the final salary pension scheme from one which provides a fiftieth of salary for every year served to one fortieth.

However, MSPs insist that if the changes are made, they will be "cash neutral" to the public purse.

There may also be changes to rules which currently allow MSPs over the age of 65 to claim their salary and their pensions at the same time.

"You could have MSPs getting £8,000 from a pension as well as £53,000 salary. Clearly that isn't fair on the public purse," said one source.

The review findings will be published soon and put before MSPs this summer for a full vote.

While Salmond has not yet decided to give up his pension deal, like Brown, his officials pointed to the fact that he was already donating his Holyrood MSP's salary to assist charities in North East Scotland.

Salmond is still an MP and therefore receives a Westminster salary of £60,675 in addition to his £76,906 pay as First Minister. He also gets a third of his MSP's salary, worth £18,000, which is being handed out to local causes.