New Clause 2 - Re-employment of armed forces pension recipients
Armed Forces
10:45 am
Mr Gerald Howarth (Aldershot, Conservative)
You will see before you, Mr. O'Brien, a series of new clauses now that we have galloped through the Bill. That picks up on the point that I was just making, which is that there is so little in the Bill that we have had to table a series of new clauses to probe the Government for more detail about what precisely they propose and to try to introduce safeguards for the members of the armed forces whom the legislation will affect.
We are now on the first of those groups. New clause 2 deals with those who have served in the armed forces and who are then re-employed under the Crown and,
in particular, in the armed forces. New clause 9 deals with the early departure payments, and new clause 26 sets out some of the key points of the early departure payment scheme that the Government have made available to us during these sittings. New clauses 9 and 26 concern the early departure scheme. New clause 2, however, is slightly different and is an attempt to deal with those who have left the armed forces and are drawing a pension, but whom the armed forces then re-engage to fill a position. I have in mind those who used to be called the reserve officers, of whom there are about 2,000. They are no longer called reserve officers—I cannot remember what new title the Minister has given them—but they still perform a valuable role in the military community.
I shall single out a case—that of Colonel Jack Matthews, who is the adjutant of the Aldershot garrison. He formally left the services about nine years ago and has been a retired officer since then. I have observed the way in which he has been the fixed point in the garrison. The garrison commanders tend to serve two or three-year tours of duty and then move on. Meanwhile, Colonel Jack Matthews is there throughout, providing stability and continuity. He provides a knowledge base for the garrison, which, I remind the Minister, is the home of the British Army, and is therefore a big operation. About 5,000 troops are stationed there, so it is hugely beneficial to have someone like that in place. I single him out because I know him and know what he does, but the role that he performs is replicated throughout the country by approximately 2,000 people.
In parentheses, I note that I regard the decision of the Ministry of Defence to open up those positions to civilians as a retrograde step. The whole purpose of such positions is to seize on the huge repository of wisdom in people who have served in the armed forces, retired and then come back and been re-engaged on slightly different terms. I think that that decision is regrettable. I recognise, Mr. O'Brien, that that matter is not strictly within the purview of our discussions on the pension arrangements, but nevertheless I should like it to be put on the record that I consider the decision to be a mistake. I ask the Minister to reconsider it.
The issue that we are trying to address by tabling new clause 2 is that, under the current arrangements, pay and pension is not allowed to exceed the previous salary. Typically, retired officers have served quite a long time so they have a pretty good pension, and they are paid a correspondingly low salary—low in the sense that if that were their entire income, it would not be enough for the responsibility that they assume and for the tasks that they carry out. The fact that they are in receipt of a pension is taken into account, but they are not allowed to earn more than they were earning at the time when they left the service. To some extent, I can see the point of that but, given the valuable role that such people play, it is unfortunate that that condition applies. The reason that we want to press the new clause is that I understand that that condition will
also apply to the early departure payment scheme. However, I do not understand exactly how that will work.
I hope that the Minister will be able to give me an indication of the way in which that scheme will operate the abatement in respect of retired officers, or whatever they are now called. Under the new early departure scheme, there will be no index linking of early departure payments between the age of 40—or 18 years' service—and the age of 55. Therefore, there will be a flat payment throughout that period until the preserved pension kicks in at 55. After that, I understand that it will be uprated.
In the meantime, the Committee would like to know what will happen in the following example. Let us say that a retired officer leaves on a pension of £10,000 a year, which is fixed in term and his leaving salary was £35,000. He will not be able to be paid more than £20,000 for his retired officer role for the next 15 years. He is not allowed to earn more than the salary that he was earning when he left the service. That seems grossly unfair. It may be that I have not understood the scheme particularly well, but it would be helpful if the Minister could explain in detail how the Government see it working in practice.
I turn to new clauses 9 and 26, which are the substantial elements of our debate. It is unfortunate that no details of the early departure scheme were available to the House on Second Reading. I can do no better than quote the hon. Member for Dunfermline, West (Rachel Squire):
''It is unacceptable that the Government failed to publish details of their proposed early departure scheme before the debate. We know that the value of the payments will be less than before, but we do not know whether they will be protected from inflation. —[Official Report, 22 January 2004; Vol. 416, c. 1507.]
The Minister can expect that the House will want to pay some attention to this issue on Third Reading, when the proposals can be discussed not just by members of the Committee who have had the benefit of seeing them, but by the House generally and, in particular, members of the Defence Committee, who are not represented here. The hon. Member for Portsmouth, North (Syd Rapson) is a distinguished former member, and I had the pleasure of serving on that Committee with him.
The fundamental issue here is that the Government have been constrained by the requirement that all the changes to be made in the armed forces pension scheme are to be governed not by what is best for the armed forces, but by the overarching requirement of cost-neutrality. The Defence Committee accepted that that is the basic framework within which the Government are operating. It did not believe that it is ideal to review pension and compensation arrangements for our armed forces when they are being called on to serve in action overseas more than at any time in the memory of most of us in the House, but that is a constraint that the Government imposed and the Committee took that into account.