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by Margaret Taylor
02 March 2023
Piety in high places: Sturgeon's tax returns show need to reform parliamentary pensions

Piety in high places: Sturgeon's tax returns show need to reform parliamentary pensions

In a final act of piety before hanging up her first-ministerial shoes, Nicola Sturgeon came good on a long-made promise to release her tax returns.

Publishing the information was not in itself a pious act, of course, but the discourse that went with it was.

“Nicola pays tax on her full salary entitlement but only draws her salary at its 2008-09 level,” the SNP’s announcement read, adding that the balance goes into public funds. In 2022-23 alone “Nicola will forgo more than £27,000 in salary so that it can be spent on public services” while the fact no government minister has taken a pay rise for the same period as the First Minister means that together they “have made over £1.3m available for public spending from their own pay packets”.

It is certainly a very public-spirited gesture – and one that has given Sturgeon plenty of opportunity to crow. Indeed, when then Prime Minister Boris Johnson last year agreed to accept the 2.7 per cent pay offer recommended by the Independent Parliamentary Standards Authority, she tweeted that she and her ministers would continue to abstain.

“We donate increases back to the public purse for spending on services,” she wrote. “Where there is a will there is a way.”

It all makes for especially good PR right now, what with the government doing its best to keep public sector pay rises to a minimum while also trying to find just enough cash to fend off yet more strikes. But, as Sturgeon’s tax returns show, it doesn’t tell the full story. 

In a section yawn-inducingly titled Pension Saving Tax Charges, the returns make clear that Sturgeon has for several years had to pay extra taxes to the Treasury because her pension has grown so much it has breached the tax-free limits. The technicalities of that are for the actuaries, but in simple terms it means she is lucky enough to have a so-called ‘gold-plated’ defined benefit pension. 

Yes, it is true that all public sector workers have those in some shape or form, but, as pensions consultant John Ralfe has pointed out, while all other public sector pensions have been reformed in the past decade to make them less generous, the Scottish Parliamentary Pension Scheme has not.

So while everyone from teachers and nurses to civil servants and Westminster politicians will now retire at the state pension age and draw a pension based on the average amount they have earned over their career, Holyrood politicians can still retire at 65 and receive a pension based on their final salary – the final salary they are entitled to rather than the one some are at pains to let us know they actually take.

There’s piety, it seems, and then there is piety.

There’s no major scandal here – MSPs are entitled to a pension just like everyone else and, while Ralfe reckons that Sturgeon has already accrued enough to get £50,000 a year from the age of 65 until the end of her life, surely few would grudge her that after the shift that she has put in.

But at a time when workers across the public sector are having to fight for a decent level of income in the here and now, which will have implications on what they can expect in retirement, the fact that parliamentarians still have the kind of pension provision others can only dream about is more than a little unseemly.   

Much has been made in the last couple of weeks about the kind of legacy Sturgeon will leave behind her. Consensus is that there has been little to distinguish her on the policy front, but if publication of her tax returns led, however tangentially, to overdue reform of the parliamentary pension scheme it would be a fitting tribute to her time in office.

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