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Government drops MP pension plan Government drops MP pension plan
(21 minutes later)
Ministers have backed down on plans to increase taxpayers' contribution to MPs' pensions, ahead of a debate. Ministers have backed down on plans to increase the contribution of taxpayers to MPs' pensions, ahead of a debate.
A planned increase is to be debated on Thursday but the government has now said it will accept a Lib Dem plan to freeze the taxpayer's contribution. A planned increase had been accepted by all parties in March but the government now says it will accept a Lib Dem plan to freeze taxpayers' contributions.
The government wants to increase MPs' contributions by £60 a month, but the Lib Dems complained taxpayers would pay £750,000 more than last year. The government wants to increase MPs' contributions by £60 a month, but the Lib Dems complained the taxpayer would pay £750,000 more than last year.
All party leaders have indicated that MPs' final salary schemes must end.
In March the main parties endorsed the increase but it was not put to a vote.In March the main parties endorsed the increase but it was not put to a vote.
BBC political correspondent Laura Kuenssberg said the political mood had changed in the wake of the MPs' expenses scandal and the impact of the recession.
MPs had been due to debate a plan to increase both the amount they contribute to their pensions and the amount taken from public funds.
But the Liberal Democrats had planned to put down an amendment, supported by the Conservatives, that would have frozen taxpayers' contributions.
In a statement, Downing Street said all parties had previously agreed a recommendation from the independent Senior Salaries Review Body in 2007 about the level at which the public contribution was capped.
The Lib Dems say it meant the taxpayer's share of funding the generous Parliamentary pension would have gone up from 26.8% to 28.%.
Downing Street added: "Were the [Lib Dem] amendment to be selected, the government would be happy to accept it and consult further.
"In any case, this was always going to be a free vote and the government has asked the SSRB to review fundamentally MPs pensions for the longer term."