Clause 1 — Pension and compensation schemes: armed and reserve forces

– in the House of Commons at 12:56 pm on 20th October 2004.

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Lords amendment: No. 1.

Photo of Mr Ivor Caplin Mr Ivor Caplin Parliamentary Under-Secretary, Ministry of Defence 1:09 pm, 20th October 2004

I beg to move, That this House
disagrees with the Lords in the said amendment.

It might benefit the House if I made it clear from the outset that the Government will not accept Lords amendments Nos. 1 and 2, although we will agree to Lords amendments Nos. 3 and 4.

Lords amendment No. 1 relates to the burden of proof in the new pension and compensation schemes. The new schemes for the armed forces will each be broadly cost-neutral. Both Lords amendments Nos. 1 and 2 would lead to major additional public expenditure at a time when the defence budget is hard pressed, so for that reason alone, I must ask the House to reject them. However, there are other compelling reasons to reject the amendments, especially Lords amendment No. 1.

There has also been a suggestion that savings have been taken out of the compensation scheme to finance improvements in the pension scheme. That is not the case. There has certainly been rebalancing within each scheme to improve benefits for some at the expense of others, but that is all.

Lords amendment No. 1 goes to the heart of the new compensation arrangements. There was a full debate on the burden and standard of proof at every stage of the Bill's passage through this House and the Lords. Unfortunately, the House of Lords passed an amendment to introduce provisions that are even more generous than those in the current war pension scheme. Both place the onus on the Secretary of State to show beyond reasonable doubt that service was not the cause of death or injury. The amendment would extend the generous burden and standard of proof requirement so that it covered not just the causation of death or injury, but also eligibility; in other words, was the claimant a member of the armed forces who qualified under the scheme and did the individual suffer from the disablement claimed?

Photo of Julian Brazier Julian Brazier Shadow Minister (Foreign and Commonwealth Affairs)

I am listening carefully to the debate, which has a huge audience of service and ex-service personnel. If the amendment is unreasonable, will the Minister consider a compromise because it is certain that his plans will make it much harder for people to get compensation?

Photo of Mr Ivor Caplin Mr Ivor Caplin Parliamentary Under-Secretary, Ministry of Defence

I respect the hon. Gentleman's view, but I disagree, for reasons that I shall outline.

Even in the war pension scheme, those latter questions are decided on a balance of probabilities standard of proof. The effect would be to increase significantly the probability of acceptance of claims for compensation that had nothing to do with service in the armed forces and where it was even unlikely that there was a disablement or that the claimant had been a member of the armed forces.

The House is aware that the war pensions scheme burden and standard of proof are quite explicit in allowing claims to succeed even when it can be shown that the death or injury was unlikely to have been due to service. I do not consider it reasonable to allow such arrangements to persist; still less do I regard it as reasonable to extend their scope. Inserting into the new compensation scheme a burden and standard of proof more generous than we have announced would be expensive. Our latest assessment is that the total cost would run to more than £300 million after 10 years, with a continuing annual premium.

There has been a mistaken suggestion that that sum was a saving and that the value of the scheme would be reduced as a result of the change to the burden and standard of proof. That is not the case. There has been no such saving; were we to accept the amendment, substantial additional money would be required over and above our broadly cost-neutral proposals. This is because we have taken the savings from the changed burden and standard of proof and used them to provide bigger payments where the need can be expected to be greatest. The most obvious example of that is the award for the first time of major cash lump sums to a maximum of £280,000 for pain and suffering caused to the more seriously injured. That key group is, frankly, poorly served by the current scheme.

In short, the current war pensions scheme arrangements allow a claim to succeed when there is no evidence that a condition is linked to service. That means that our funds are not focused properly on those whose disablements are greatest and whose conditions are likely to have been caused by service. In effect, by changing the design of our compensation arrangements as we have, we have taken away from a minority of cases for whom death or injury is unlikely to have been caused by service and given to those who are more seriously disabled. We cannot afford to do both, and I have no doubt that our decision is the right one.

Looking at the new compensation scheme as a whole, I am confident that it will deliver fair and reasonable outcomes. The new arrangements invite both claimant and the Ministry of Defence to provide evidence relating to a claim. Both sets of evidence would be subject to the same careful scrutiny and would be given equal weight in the process of evaluation. Only if the evidence were equally balanced or if there were an absence of clear evidence one way or the other would the burden of proof result in a rejection of the claim. The proposals are in line with those for civil courts and follow a pattern widely used in other schemes.

I hope that the House will recognise that the arrangements are, in fact, the same as those used to determine the outcome of claims for attributable benefits under the current armed forces pension scheme. It is worth knowing that it is generally the current armed forces pension, not the war pension, that provides the larger share of the benefits paid in a case of invaliding or death due to service.

However, the Government have not ignored the concerns expressed since the Bill moved to the Lords in July. We have looked carefully at the Royal British Legion's concerns that our proposals do not represent a fair balance of responsibilities between the claimant and the Department. Our approach does not place the whole of the evidential burden on the claimant. The scheme rules will provide that the Secretary of State or, at appeal, the pensions appeal tribunal will decide whether, on the basis of all the relevant evidence before them, it is more likely than not that the injury, illness or death is due to service. That evidence will include any supporting evidence provided by the claimant. It will also include the claimant's service and medical records and any additional evidence obtained by the Secretary of State.

We recognise that it would be unreasonable to ask the claimant to obtain evidence relating to his claim that is held in his official service records. The scheme rules will impose a duty on the Secretary of State to make available to the claimant such evidence on request. Any decision taken by the Secretary of State will be subject to appeal to the pensions appeal tribunal, which in turn will have regard to the entire body of evidence, whether provided by the claimant or the Secretary of State. That will place a responsibility on the Secretary of State to provide a credible response to any substantial evidence submitted by the claimant.

I regret that the Royal British Legion has not been reassured despite the many conversations with it, but I also accept that it has been flexible in recent months in offering alternative formulations of burden and standard of proof, the point made by the hon. Gentleman. However, flexibility has not been one-way. We have made a number of changes to our proposals already to address the concerns of the Royal British Legion, and I shall give just three examples. There will be an extended time limit for claims of five years instead of the three originally proposed; provision for exceptional review where deterioration of someone's condition is substantially greater than would normally be expected; and agreement to report to Parliament annually on the operation of the schemes. I shall take a close personal interest in the working of the schemes and I can assure the House that if the system is found not to be delivering fair results, the design of the arrangements will be reviewed.

I must, however, tell the House that there is no easy option here for Members who support the amendment. They cannot cherry-pick the parts of the current arrangements to which they remain deeply attached and, at the same time, embrace the improvements in the new compensation scheme. I will not allow the new schemes to proceed on that basis. If it comes to it, I would prefer to withdraw the Bill entirely, which would mean that that the benefits of the new pension and compensation schemes, which are keenly sought by many people in the Armed Forces and the ex-service community, will be lost. I hope that the Commons will tell the Lords that they have got it wrong, and reject Lords amendment No. 1.

Photo of Gerald Howarth Gerald Howarth Shadow Minister (Defence) 1:15 pm, 20th October 2004

I am sorry that the Minister has come to the Dispatch Box in a rather pugilistic mood. As my hon. Friend Mr. Brazier made clear, a great many ex-servicemen and women are concerned about this issue. It is not just people outside the House who are concerned—many Members on both sides of the House are as well. There cannot be anyone inside or outside the House who fails to understand the difficulties that this Government or, indeed, any Government face in meeting people's aspirations while keeping down the tax burden or, in the case of the Ministry of Defence, remaining within budget. The Opposition, however, and many other people believe that our armed forces are different, and should be treated differently.

The Bill provides us with a great opportunity to look at all pension and compensation arrangements. We should not treat the Bill, as the Minister wants us to do, as a take-it-or-leave-it package. He is in such a belligerent mood that, if we do not like it, he will take his bat away.

Photo of Gerald Howarth Gerald Howarth Shadow Minister (Defence)

Forgive me, that is what he just told the House, and it is also a fair reflection of what he told the Royal British Legion and the Forces Pension Society.

Photo of Mr Ivor Caplin Mr Ivor Caplin Parliamentary Under-Secretary, Ministry of Defence

I am grateful to the hon. Gentleman for allowing me to intervene at an early stage, but I have made it clear that we cannot cherry-pick the scheme and expect it to remain coherent. That was the point of the cost-neutrality that I first referred to in September last year and which we debated at length in Committee. The hon. Gentleman talked about the ex-service community and people outside the House, but perhaps he will reflect on the fact that the new compensation arrangements come into effect on 6 April 2005, and do not affect arrangements made prior to that date.

Photo of Gerald Howarth Gerald Howarth Shadow Minister (Defence)

Indeed not, but the hon. Gentleman knows that the ex-service community takes an abiding interest in today's armed forces, and has a close personal attachment to them. He and I have come to the House straight from a service at St. Paul's cathedral—it was extremely kind of him to give me a lift back—in which we celebrated the 60th anniversary of the heroic events on the beaches of Normandy. A large number of veterans, many from the Aldershot branch of the Normandy Veterans Association, attended the service not just to commemorate the heroic events of years gone by but to demonstrate their ongoing interest in the affairs of today's armed forces. The Minister, who has responsibility for veterans' affairs, will have learned of that interest from his discussions with veterans, as I have in my role both as shadow Minister and as the Member of Parliament for Aldershot.

The Opposition believe that the armed forces should be treated differently. I accept that the Bill is cost-neutral, as the Minister said, and that the new arrangements are driven by cost-neutrality. As Rachel Squire will confirm, when the Defence Committee was first appraised of these matters by Ministers, the expression "cost-neutrality" was not used, and appeared only late in the day. We should not be driven by the Minister's self-imposed constraint, because that was not the MOD's original position. It was only because it lost out in the battle with the Treasury that it had to impose a cost-restraint straitjacket on the new measures.

Members on both sides of the House will recognise the tremendous work carried out by the Royal British Legion on behalf of the veterans' community in providing representation for people seeking compensation and in campaigning on veterans' welfare issues. I am sure that the Minister is at one with me on that. In constituencies up and down the country, hon. Members recognise the vital role played by the Royal British Legion. Equally, Members on both sides of the House will share my disappointment at the shabby way in which the Government have treated the Legion during the passage of the Bill. What can only be described as open warfare spilled out in exchanges in another place. Everyone in the House would concede that our debates can become frenetic and even rebellious, but the Lords tend to debate contentious issues in a more measured fashion. It is therefore all the more astonishing that Lord Bach, the Minister in the other place, was treated to a severe roasting from Labour peers, including a former Minister, who turned on the Government over their sniping at the Legion. Lord Morris of Manchester was well known in the Commons as a Minister with responsibility for disabled people, and has spent a lifetime, Members on both sides of the House will concede, seeking to look after the interests of the most vulnerable people in society. He is a doughty campaigner in the other place, where he said on 8 September at column 572:

"The Legion's legal adviser has told my noble friend that there has been no meaningful discussion whatever."—[Hansard, House of Lords, 8 September 2004; Vol. 664, c. 572.]

The exchanges in another place on 15 September make interesting reading. Lord Corbett of Castle Vale, formerly the MP Robin Corbett, moved an amendment, and began his contribution by accusing Lord Bach of "misleading" the Lords about the position of the Royal British Legion—his word, not mine. Both here and in the other place, the Government have sought to give the impression that the Royal British Legion has been unwilling to compromise on the burden on proof, and that its stubbornness, along with the alleged stubbornness of the Opposition, have threatened the implementation of the new scheme.

There has been an attempt to blackmail the Royal British Legion and the Forces Pension Society, which the Minister continued today. He suggested that the Government were acting reasonably in making three changes, two of which were requested by the Defence Committee and the Opposition, so should not be regarded as extraordinarily generous dispensations to the Royal British Legion. It has been told that if it and the House do not accept the changes, and if the Lords do not accept the package on offer, that is the end of the deal. Of all the new benefits that will be available, the most significant is the increase in the death in service benefit from 1.5 times salary to 4 times salary. That is one of the biggest benefits that will be brought about by the changes, which are not so much on compensation as on the pensions side, but if the package is not accepted, the Government will withdraw the Bill and that will be the end of the story. That is not grown-up politics.

Photo of Desmond Swayne Desmond Swayne Parliamentary Private Secretaries To Leader of the Opposition 1:30 pm, 20th October 2004

On a point of order, Mr. Speaker. My hon. Friend has rightly drawn attention to the threat that the Minister made. He said that if we failed to disagree to the amendment, he would withdraw the Bill. For those of us who served on the Standing Committee and can think of any number of good reasons why it would be better to see the back of the Bill, does that bring those reasons into the scope of the amendments, so that we can achieve the very prospect that the Minister has held up in front of us?

Photo of Gerald Howarth Gerald Howarth Shadow Minister (Defence)

I think the Minister wanted to intervene.

Photo of Mr Ivor Caplin Mr Ivor Caplin Parliamentary Under-Secretary, Ministry of Defence

I am grateful. On the three points, the extended time limit was discussed between the Royal British Legion and the Ministry of Defence in the run-up to the launch of the scheme in September last year. The agreement to report to Parliament annually was an initiative that I took as the Minister for veterans, along with my noble Friend Lord Bach. The second point, concerning exceptional review, was part of various discussions between ourselves and the British Legion. It is rather disingenuous of the hon. Gentleman to suggest that we have not been discussing these matters with the British Legion for some time. I have correspondence going back to 3 December 2003 about the compensation scheme. We are debating only the compensation scheme. I heard what the hon. Gentleman said, but he is confusing compensation and pensions. As I made clear in my opening remarks, we have not transferred money from one to another. Both schemes will be rebalanced within themselves to make good and effective schemes for the future.

Photo of Gerald Howarth Gerald Howarth Shadow Minister (Defence)

I accept what the Minister said about not transferring any savings to be made out of the compensation scheme to the pension scheme, so let us leave that on one side. But I do not want the Minister to get away with the idea that he has been extraordinarily generous to the Royal British Legion in accepting these changes to the compensation scheme. They were argued by hon. Members in all parts of the House and by the Defence Committee. The Minister is trying to say how carefully the Government have listened to the British Legion and responded. Yes, indeed, that was part of the Legion's pitch, but the point was made by many other people as well. The Minister should not claim that he has given the Royal British Legion a thoroughly decent hearing. On the big issue with which the Legion is concerned, the Government have made no shift at all.

I know that hon. Friends of mine and other hon. Members wish to participate, so I shall pursue my remarks. We and the Royal British Legion have attempted to achieve a more equitable balance in the burden of proof. We have been open throughout to the double standard compromise proposed by the Defence Committee, where both parties would have to make their case on the balance of probabilities test, with the onus resting on the Government. The Government would have to prove, on the balance of probabilities, that the claimant's injury or ailment was not attributable to service, and the claimant would have to prove on the same standard that it was. Only when both had gone against the claimant would the claim fail. That seems a reasonable compromise.

It is the Government who have proved so resistant to compromise. They dismissed out of hand the Defence Committee's proposal, and refused even to sit down with the Legion and representatives of the veterans community to work out some kind of compromise. The Minister says from a sedentary position—I will save him intervening—that that is not true. The fact is that he has been intransigent on the possibility of compromise. He has simply said that the scheme will cost £200 million—we are now told £300 million—and that's it. No deal. The Minister is about to tell me otherwise.

Photo of Mr Ivor Caplin Mr Ivor Caplin Parliamentary Under-Secretary, Ministry of Defence

I cannot accept the hon. Gentleman's assertion about truthfulness. That remark was inappropriate. I have a continuous and high-level series of discussion with members of the Royal British Legion executive. I meet the secretary-general regularly and we discuss many of these issues, which are rightly debated between the British Legion and the Government. That does not mean we agree. We accept in an adult relationship that there are times when we disagree. That does happen— I do not deny it.

The burden of proof that the House of Lords suggested should be adopted for the compensation scheme is costed at £300 million at least, over the next 10 years. I cannot find that in the present defence budget. The House would be interested to know how the hon. Gentleman proposes to find it, if he intends to support the House of Lords on the matter.

Photo of Gerald Howarth Gerald Howarth Shadow Minister (Defence)

I make it clear that we intend to support the House of Lords on the matter.

Of course we understand that the Government have a position and the British Legion has a position. We are trying to find a compromise. It is the Government's intransigence about sitting down with the Legion to find a compromise that exercises not just the Opposition, but Labour Members. Lord Corbett said in another place that

"to imply that the Legion was being unco-operative, as my noble friend did on 8 September"— that was the Lord Bach

"was grossly misleading. Neither did he acknowledge the Legion's responsibility for liaising with other ex-service organisations and its duty, as the guardian of the interests, welfare and memory of ex-service people and their dependants, to do all in its power to protect the safeguard currently vouchsafed by a burden of proof based on reasonable doubt. Nor again did my noble friend at any time acknowledge the Legion's offer to compromise on the basis suggested by the House of Commons Defence Select Committee and the MoD's rejection of that offer."—[Hansard, 15 September 2004; Vol. 664, c. 1183.]

There is a compromise on the table, but the Government have shown no willingness to consider it.

If the House rejects the Lords amendment in the name of the former Labour Minister Lord Morris, we will move from a system that protects the rights of those serving and those who have served who are injured or become ill as a result of their service. The current standard of proof gives the benefit of the doubt to the claimant, placing the onus on the MOD to prove beyond reasonable doubt that the injury was not attributable to the individual's military service. A change to the balance of probabilities would see the roles reversed, with a much harsher standard of proof. Those who have become ill or been injured would have to prove, on the balance of probabilities, that their illness or injury was attributable to their military service.

As Lord Bach said in his letter to Brigadier Townsend, the director general of the Royal British Legion, on 14 September,

"It remains our view that the War Pension Scheme burden and standard of proof are no longer required in order to provide the high level of safeguard appropriate to service in the Armed Forces and that the resources freed up from a change in this area are more beneficially used elsewhere".

But the British Legion continues to dispute that position. After all, the Legion is in a position to know something about the matter. It has immense experience of representing hundreds of war pensions claims every year, and it has argued strongly that the safeguard continues to be necessary to protect the rights of our servicemen and women.

The Legion estimates that with the combination of the change in the test and the shift in the onus, which would rest on the claimant, 60 per cent. of the claims that are successful under the present arrangements would fail. Although the Government dispute that figure, they too must estimate a larger number of unsuccessful claims under the new scheme by the very fact that they predict £200 million savings. Where else can that money come from, except from that which would otherwise have gone to those injured in the line of duty? Or is the Minister saying that he thinks there will be so many more frivolous claims because of the compensation culture that the amount will be ratcheted up?

What does the proposal say about the Government's concept of the duty of care? Do they really want to send a message to our armed forces that if they are injured or become ill in the line of duty, the MOD will make them fight for that which should be theirs by right, and that after such a fight, 60 per cent. of claims will fail? Many hon. Members on both sides of the House will regard it as a sad day indeed when the Government treat our armed forces with such disdain and demonstrate such a flagrant disregard for their duty of care for those who serve—I am bound to say that at a time when Her Majesty's armed forces are undertaking such onerous and dangerous responsibilities in Iraq.

As the Minister said, some will win and some will lose as a result of what he describes as "rebalancing", but greater attention must be paid to the duty of care. A moment ago, he said that some of the funds saved would provide better benefits for those who currently fare—he used this word—"poorly". In other words, he acknowledges that some people are not well served by the present arrangements, and he wants to benefit them at the expense of others. Some who fare poorly at the moment would do better; some of those who do reasonably well under the present arrangements would be imperilled.

Photo of Mr Ivor Caplin Mr Ivor Caplin Parliamentary Under-Secretary, Ministry of Defence

The hon. Gentleman quoted me correctly. I make no apology because I want those who are most disabled to get the main benefit from the compensation scheme, which is right and proper. Frankly, I hope that all hon. Members share that view. However, events happening today are covered by the current laws, whereas we are discussing events occurring after April 2005.

Photo of Gerald Howarth Gerald Howarth Shadow Minister (Defence)

Hon. Members are obliged to look to the future, because the recent pattern of deployments and military conflicts is likely to form the template for the future. Indeed, the Government currently formulate their defence strategy on the basis that our troops will be deployed more frequently, further afield and in larger numbers than was even envisaged under the strategic defence review. After the cold war, when conflict was expected but none happened—thankfully—we have moved to a position in which there is every expectation that our troops will deploy into conflict zones several times a year, and the risk of injury or illness is therefore likely to increase. It is therefore incumbent on this House to make sure that tomorrow's soldiers get the best possible deal. I submit that a compromise, which would tighten up the existing procedures without increasing the possibility that genuine claims might fail, could be reached, and it seems to me that the Defence Committee's solution provides the answer.

The stick with which we were being beaten was £200 million—the noble Lords were told that the amendment would cost the taxpayer £200 million—but the Minister told us today that the figure has gone up to £300 million. In the other place, Lord Bach promised to provide a detailed breakdown of how the figure is calculated. That is the big stick with which we are being beaten, but no one has come forward from the Ministry of Defence to provide us with an analysis.

The Opposition do not have the resources to undertake such forensic and extensive examinations, but the Minister does—he has all the Ministry of Defence's resources—and he should tell us how the figure was reached. Will the savings be achieved as a one-off or over a period of time? If the Minister expects this House to make an informed decision, he should surely provide some clarification.

Photo of Mr Ivor Caplin Mr Ivor Caplin Parliamentary Under-Secretary, Ministry of Defence

I hoped that I had done that today. I said that our latest assessment—these are assessments—is that the total cost would run to more than £300 million after 10 years with a continuing annual premium. We have examined our assessments and the issues arising from the various debates in the House of Lords, and we have made a fresh assessment. I am happy to give the hon. Gentleman more detail if and when I can, but today I have brought the latest assessment of the amendment's cost to the House.

Photo of Gerald Howarth Gerald Howarth Shadow Minister (Defence) 1:45 pm, 20th October 2004

Instead of the Minister's coming to the House to conciliate me, why on earth was his Department not conciliatory with the Royal British Legion, which has asked for the figures for several months? It is not good enough for the Minister to tell us that a figure that was set in stone until half an hour ago has increased by 50 per cent. Realistically, the House cannot accept a 50 per cent. increase off the back of an envelope to the figure that Lord Bach gave down the other end of the Corridor for the scheme's cost if their lordships were to stick to their guns.

Photo of Julian Brazier Julian Brazier Shadow Minister (Foreign and Commonwealth Affairs)

Perhaps I can help my hon. Friend. I understand that it would cost £200 million to keep the arrangements as they were and £300 million to fund the amendment. The Minister still refuses to answer my hon. Friend's question on how much the compromise would cost. He keeps quoting the cost of the Lords amendment and criticises its drafting for extending the scope of the scheme. Instead, he should cost the compromise that the Royal British Legion proposed a long time ago.

Photo of Gerald Howarth Gerald Howarth Shadow Minister (Defence)

My hon. Friend's intervention is extremely helpful, because it demonstrates the bind that the Minister has got himself into. Instead of negotiating with the Royal British Legion by saying, "We will go away and cost what the all-party Defence Committee has come up with," the Government have tried to block the Royal British Legion's proposal, which is a great shame. Hon. Members cannot accept the £300 million figure, unless it is justified in a much more expansive way. I am not prepared to take the Minister's word for it—I mean no personal disrespect to him. Today, he said that figure is £300 million, but one week ago it was £200 million.

Photo of Gerald Howarth Gerald Howarth Shadow Minister (Defence)

No. I am sure that the Minister will have a chance to wind up the debate, if he can catch your eye, Mr. Deputy Speaker. Will he catch your eye or should I give way to him now?

Photo of Alan Haselhurst Alan Haselhurst Deputy Speaker and Chairman of Ways and Means

Order. It is entirely up to the hon. Gentleman whether he gives way to the Minister. Having attended to part of the debate, I merely observe that so many points have been dealt with in interventions that there may be very little scope for a winding-up speech.

Photo of Gerald Howarth Gerald Howarth Shadow Minister (Defence)

Thank you, Mr. Deputy Speaker.

The issue is important and the Ministry of Defence's resources should be made available to cost the double standard proposed by the Select Committee. The double standard offers the means of realising some savings while protecting those servicemen and women who are injured or who become ill as a result of their service.

We will vote for the amendment because the Government's blatant disregard for their duty of care should not go unchallenged, but their unwillingness to accept any form of compromise means that the amendment will be voted down. However, when the Bill returns to another place, we will encourage their lordships to pursue the compromise measure, and, even at this late stage, we urge the Government to do the same.

As Lord Craig of Radley, a former Chief of the Defence Staff, said in the other place:

"This is a rare opportunity to get the arrangements for Armed Forces pensions and compensation dealt with. They should be dealt with against the concept of best practice and not just cost neutrality."—[Hansard, House of Lords, 8 September 2004; Vol. 664, c. 575.]

The Army has the recruiting slogan, "Be the best"; the people of Britain know that it is the best; it deserves the best; let us give it the best.

Photo of Rachel Squire Rachel Squire Labour, Dunfermline West

I rise to speak on behalf of the Select Committee on Defence. The Chairman sends his apologies as the Committee had a prior commitment to take evidence on another issue this afternoon.

I should declare that I am the honorary vice-president of the Dunfermline branch of the Royal British Legion, Scotland. That means that I take considerable personal interest in pension and compensation arrangements for veterans and for certain members of our armed forces. Personally, I am very disappointed by the Minister's speech and by the Government's refusal to compromise and I find the constant description of the Royal British Legion's concerns about compensation as "cherry-picking" insulting.

Lords amendment No. 1 deals with one of the main changes to the proposed compensation scheme—the method for deciding whether an injury has been caused by service. The Government believe that it is right that service personnel should have to prove for themselves, on the balance of probabilities, that a condition from which they suffer was caused by service. The Lords amendment would maintain the status quo, whereby it is for the Ministry of Defence to prove beyond any reasonable doubt that an injury was not caused by service.

Under the Lords proposal, it is probably true that some people whose condition was not in fact caused by service would win the right to compensation. Under the Government's proposal, however, it is certainly true that some people whose condition was caused by service will not win the right to compensation. The question for the House is, which is the lesser of those two evils?

Sometimes it is not obvious why someone has become ill. As the Defence Committee noted in its report of December last year, armed forces personnel

"are likely to be involved in situations of great uncertainty, with uncertain effects on their health".

That is particularly true at the moment and will apparently be so in the near future. The fact is that we simply do not know how or why servicemen and women become ill, but does that mean that they should not be entitled to compensation?

The Government recognise that they have responsibilities to service personnel who make compensation claims—in particular, that they must keep proper medical records and make them available. That is welcome. However, we on the Defence Committee remain concerned that service people will find it more difficult to claim compensation under the proposed scheme and that, in some cases, personnel will be unable to prove that their condition has been caused by service because of a lack of information, not because their condition was not caused by service.

The armed forces are a special case. The essential difference between them and almost all other employees is that they can be asked to put themselves in harm's way or, indeed, to die for their country. In our December 2003 report, the Defence Committee argued that

"Because of the special risks that Armed Forces personnel are required to run, and because they are likely to be involved in situations of great uncertainty, with uncertain effects on their health, we continue to believe that the onus should remain on the Government to prove that service was not responsible for causing or worsening a condition for which a compensation claim is made."

The Government have explained that they oppose the Lords amendment for several reasons and those deserve proper examination by the House. The first reason is cost. The Government claim that it would be too expensive to maintain the status quo because of the cost of improvements that they have made elsewhere in the schemes. Lord Bach told the Lords:

"Frankly, we cannot afford to improve benefits for the more severely disabled and maintain the current, generous burden of proof."

The Government have always insisted that the new schemes should cost the same overall as the existing schemes. In 2002, the Committee said that the pension review had been

"hamstrung almost from the outset by the decision that the new proposals should be cost-neutral".

Photo of Julian Brazier Julian Brazier Shadow Minister (Foreign and Commonwealth Affairs)

The hon. Lady is making a powerful and convincing speech. In fact, the problem goes even further than that, because the Government's definition of cost-neutrality involves taking money out of the scheme to allow for the fact that people are likely to live longer, but adding nothing back in to allow for the fact that there will be fewer of them.

Photo of Rachel Squire Rachel Squire Labour, Dunfermline West

I thank the hon. Gentleman for that intervention. Indeed, we need further detailed consideration of where money is being taken from to benefit other developments.

In the Lords, it was suggested that to maintain the status quo would cost an additional £200 million. According to the Government, as we have just heard, it is more likely that it would cost £300 million over a 10-year period. All these figures can only be estimates based on a best guess of the number of claimants who would qualify for a war pension under the current criteria but who would not be entitled to compensation under a balance of probabilities test. Maintaining the current test would undoubtedly be expensive, although whether as expensive as the Government claim is open to conjecture. But this is a matter of principle—a question of ensuring that when service personnel put their lives on the line for their country, we look after them properly. We should do that even if it is unclear whether their injury was caused by service or not.

The Minister and the Government have claimed that the Lords amendment would upset a balanced package and that Parliament should not cherry-pick. Many of us would question whether that is a democratic approach. After all, what is Parliament here for if not to legislate? And legislation means looking at the detail, not just accepting or rejecting the Government's proposals as a package. In the Defence Committee, many hon. Members have expressed concern that several parts of the Bill remain very vague and general with insufficient detail.

The Defence Committee recommended that some of that detail—the basic principles of the schemes—should be set out in the Bill, including

"the standard and burden of proof for claims under the compensation scheme".

We need to be aware of the effects of what we propose and to decide whether the extra expense of maintaining the current burden of proof would be justified, but that is a judgment that Parliament is fully entitled to make. If the Lords amendment remains in the Bill, the Government may need to break out of their cost-neutral straitjacket to pay for it. Many of us think that that would be the right thing to do.

Finally, the Government argue that the status quo is wrong in principle and encourages a compensation culture. Lord Bach told the Lords that

"under the present arrangements it frankly is too easy for people to claim that they have received an injury or an illness during service, whereas everyone knows that they almost certainly did not. But, because of the burden, and particularly the standard of proof, that person succeeds in their claim. That is what we are trying to stop".—[Hansard, House of Lords, 8 September 2004; Vol. 664, c. 585, 587.]

That is the real debate that we should be having and the only one of the Government's arguments that is worth exploring in depth. If it is indeed true that, under the current scheme, many claims are unfounded yet claimants receive a war pension, a remedy should indeed be sought. However, the Government need to provide hard evidence, in the form of statistics or examples, that people are succeeding in spurious claims for war pensions. Even if they can make a convincing case that the net should be tightened, it is important that that should not penalise those whose claims may be just but who lack the information to prove it.

The Government may also claim that the amendment is poorly drafted and would make claims for compensation even easier than under the current war pensions scheme. However, the amendment's aim is clearly to maintain the status quo and it could be redrafted to achieve some compromise. The Royal British Legion wrote to me on Monday. The letter stated:

"The Legion has carried out research which indicates that, under the proposed scheme, using the amended burden and standard of proof, coupled with its new limitation of only 5 years during which a claim might be submitted, up to 60 per cent. of those claims currently succeeding, would fail. Although the MoD challenged our figures, they have carried out no research of their own and offered no credible alternative, whilst admitting successful claims would reduce. However, the MoD has recently conceded that their proposals, if accepted, would result in savings of £200 million"— we now hear the figure of £300 million—

"although they do not specify over what period of time. It has additionally confirmed that the burden of proof relating to the claim will transfer from the MoD to the individual claimant."

The Government have threatened to withdraw the Bill if the Lords amendments, especially Lords amendment No. 1, are accepted. The Minister has reiterated that this afternoon. There is particular concern about that, especially in the Forces Pensions Society. Both the Minister and Lord Bach said that, if the Lords insisted on their amendment, we would have no choice but to re-examine the overall package and that there was no guarantee that the schemes could be delivered in such circumstances.

None of us wants the Bill to fail but elements of it need improving. Some of those improvements may cost money. Rather than threatening to throw it all out, the Government would do better to consider calmly how best they could effect Parliament's decisions, seek some acceptable compromise and be seen at such a crucial and dangerous time, which is likely to continue for at least the next five years, to be prepared to reward those who serve and seek to maintain freedom in our country.

Photo of Colin Breed Colin Breed Shadow Minister, Defence 2:00 pm, 20th October 2004

It is a privilege and a pleasure to follow Rachel Squire. May I, through her, thank the Select Committee on Defence for its extremely valuable work? It has benefited all hon. Members in their contributions to defence debates.

I wish to express again my admiration and gratitude for the service of the armed forces. That has been put on record many times and we need to continue to do that. Against that background, we want wholeheartedly to support any amendments that seek to provide the best compensation scheme that this country can realistically afford.

The Royal British Legion has worked tirelessly. I accept that the Minister has held many meetings and, I suspect, hard negotiations, with its representatives. They provide a valuable service in representing the best interests of our armed forces.

We support the Lords amendment, which returns the safeguard of reasonable doubt that the Government removed in clause 1. They propose to substitute a balance of probabilities test of entitlement for claims, thus shifting the burden away from the Ministry of Defence and on to the claimant. As everybody has recognised, it means that a significant number of deserving members of the armed forces will be deterred from even beginning an attempt to take on and challenge the Ministry of Defence.

Amendment No. 1 would result in a reversion to the status quo. I could not understand the Minister's assertion that the position would be better than it was. If the amendment were accepted, the burden would not be on the claimant to prove that injury, illness or death was due to service but on the Secretary of State to disprove the case.

We have all stressed in such debates that it is inappropriate to compare armed forces personnel with other parts of the civil service and other civil pension schemes. They are clearly different and they need to be addressed in a different way. Armed forces personnel run special risks, which often have uncertain effects on their health. That special status means that we should do the very best that we can.

I want to concentrate on three matters, which perhaps have not been explored in depth. First, let us consider the figure of £200 million or £300 million over a 10-year period. In my simple maths, that means approximately £30 million a year on average, although I accept that the figure could increase or decrease. I do not know how it is worked out. I want to contrast that with the announcement in the Ministry of Defence's annual review, which was made last week. It set out the abortive expenditure of £25 million on a project in the River Tamar, adjacent to my constituency.

The project is called RAFT, which stands for remote ammunitioning facility in the Tamar. It was hugely controversial and designed to enable submarines to be rearmed. It was approved against a background of great opposition. After digging hundreds of thousands of tonnes of rock and debris out of the river and dumping them in an adjacent bay, causing all sorts of environmental damage, the project was pulled. In the process, £25 million of public money was spent. I do not suggest that that is an everyday event, but £25 million would pay for at least one year of the additional expenditure. Saving abortive expenditure on one such example every year would render the Ministry's increase in spending almost cost neutral.

Secondly, the Minister said that the provisions start on 6 April next year and that current rules will apply until then. Last night, when I was considering today's debate, I heard that my daughter had given birth to our first granddaughter—a very happy event. That made me consider being a grandfather. Many children are being born to members of our armed forces while their fathers are away in Iraq. In future, the sons and daughters of those now serving in the middle east and, indeed, my granddaughter, might ask, "What did you do in the war, Daddy?" or "Granddad."

What might I reply? Perhaps I would say, "I participated in a Parliament that sent many of our armed forces to war." Perhaps we will have greater perspective when we consider the matter with hindsight in 10 or 12 years. I could say, "I also participated in a Parliament that ensured that the sort of compensation and pension schemes that those members of the armed forces may want to rely on was significantly weaker and much reduced from what they might have expected to get it they received injuries or illnesses through the conflict to which Parliament decided to send them." I would have to say that I sat on the green Benches while that happened.

Exactly what I might say, I have not the foggiest idea, but that is not important. What is important is that questions will be asked. Why did Parliament decide, within the same Parliament, not only to send people into situations of great potential harm but to introduce a compensation scheme which would not provide them with the very best support? The cost of that could well fall on those families rather than on the Government and the country. So, yes, this is about the future. We are looking towards the future and trying to provide the very best for it.

Thirdly, I want to turn to something that I shall call track record. Why is it that so many people in our armed forces, the Royal British Legion and elsewhere do not believe that the MOD is seeking the very best for them? Why do people think that the Ministry is not doing its level best to provide a scheme that will give them all that this country can properly afford and should rightly provide? Perhaps the answer can be found in an ongoing issue. I want to quote extensively from a letter from one of my constituents, Mr. John Connelly. I am sure that, as I read it, hon. Members will understand where he is coming from.

First, I shall provide a bit of context. Mr. Connelly used to work at Devonport. He was in the Royal Navy, and he worked alongside dockyard workers. He worked on ships, hauling out vast quantities of asbestos lagging and he now has an illness that is likely to cause his premature death. He says:

"Asbestos-related illnesses have killed and injured many thousands of Royal Navy veterans over the decades, and still continue to do so. The problem for Royal Navy veterans will not pass until approximately 2025, when the MOD can safely say that due to safer use of insulating materials used on warships and submarines today, and the reduced number of Royal Navy personnel and the huge reduction in the size of the Royal Navy fleet, no more sailors should be killed or made sick by asbestos. This is all very nice for those who are serving today, but our plea is on behalf of those who served Queen and country when no precautions were offered to protect us from the harmful asbestos dust and fibres which were used in massive and unregulated amounts on warships and submarines."

Mr. Connelly writes

"on behalf of the sailors and their families who have 'crossed the bar' or are still suffering today with this dreadful disease caused by the Royal Navy's use of asbestos."

Mr. Connelly continues by saying that the MOD's stance relates to

"the 1947 Crown Proceedings Act, section 10, which the Government changed in May 1987 but did not make retrospective. This has seriously disadvantaged Royal Navy veterans with asbestos diseases because the bulk of us served and left the Royal Navy prior to 1987. This gives the MOD total legal immunity, which they are very happy to exert in any challenge to this Act. This unfair and unjust law puts the Royal Navy veterans with asbestos-related illnesses, and many of their families, below the law which allows dockyard workers, coal miners and civilian workers with asbestos illnesses to claim proper and just recognition and compensation for their illnesses through the courts. It is simply obscene to give compensation for a dockyard worker's life or a coal miner's life to their families, when 'Jolly Jack Tar' is treated less than these. It was good enough to change this law in 1987. Why is it not good enough to change the law and make it retrospective? This would allow a degree of fairness for sufferers and their families.

The MOD will hide behind the war pension theory that, if ill, we can claim a war pension. The payments, if you are successful, from the Veterans Agency, are small in comparison to MOD payouts to dockyard workers and Government payouts to coal miners, etc. If large payments are good enough for these good men, then they are good enough for us. The playing field is not level, and the Royal Navy veterans with asbestos-related illnesses have an uphill struggle for recognition and fairness. It should be the other way round for those who have given their all and are now dying with asbestos diseases."

I could go on, but I think that hon. Members will have got an idea of what I am trying to say. There are many who are extremely sceptical about the real motives for the MOD's changes to the pension and compensation schemes. I recognise that the Minister is going to say that we need to make a decision on this, but this decision will pass into legislation that will affect the lives of hundreds of thousands of people for many years to come.

There is no track record of any decisions to overturn arrangements that go against the MOD's long-term interests. There is huge scepticism among people who have heard what has been done about Gulf war syndrome, about asbestos and about the other illnesses that can be contracted while people are serving; they feel that those issues have not been properly dealt with. We must provide a real Rolls Royce of a compensation scheme. It is sometimes preferable for a few people to exploit a scheme in a minor way in order to ensure that the vast majority of those who are properly owed compensation receive it. If we err in the other direction, by excluding 100 per cent. of those who might be trying to exploit the system, we will undoubtedly significantly reduce the number who should rightly and properly be rewarded.

It seems unlikely that the Government will accept any compromise on this issue, in the light of their threat to pull the whole Bill. There are good things in the Bill, which the Liberal Democrats welcome. However, there are one or two issues on which we disagree. I am sure that figures can be provided in relation to cost neutrality, and that all sorts of good reasons can be given, but the Government now have the opportunity not only to provide a proper compensation scheme for those who are serving Queen and country, but to demonstrate once and for all that the issues that Mr. Connelly raised in his letter have been consigned to the past and are not part of the MOD's current plans, and that, although mistakes may have been made in the past, they will not be repeated in future. In that way, other hon. Members would not have to receive similar letters in 10 or 15 years' time, citing these pension and compensation schemes as the reason why people are not receiving what they should be.

Photo of Julian Brazier Julian Brazier Shadow Minister (Foreign and Commonwealth Affairs) 2:15 pm, 20th October 2004

It is a privilege to take part in a debate that has had such high quality contributions. As 11 November approaches, our minds go back to the parades that we have seen over the years. This year, we have also witnessed the D-day commemorations, when we saw the many fine old men and women with their medals. Some of them paid a horrible price, and of course we remember those who paid the ultimate price.

I hope that it is in order, Mr. Deputy Speaker, for me to quote a little story that really put the whole business of war into perspective for me. A very good friend of mine was at the dinner that used to take place at the end of the rather gruelling selection procedure in my regiment. He was sitting next to an elderly, grizzled veteran. My friend, full of enthusiasm for the process that he had just been through, was telling the veteran how tough and demanding the selection had been. He went on at some length before realising that the other chap had hardly said a word. My friend turned to him and asked, "Was there a selection when you joined the regiment?" "Oh, no," said the old boy, "there was no selection. We just signed on." "I see," said my friend. "What is the most demanding thing that you can remember doing?" The old man paused for a moment, then said, "Well, Passchendaele was no picnic."

The truth is that we have a special duty of care to our armed forces. As the previous two speakers and my hon. Friend Mr. Howarth have said, it is wrong to draw a parallel with normal civilian practice, as such people are not normal civilians, given the risks that they take and the things that we ask them to do. I know that the Minister cares about the armed forces—I have no doubt about that—but we have an honest difference of opinion about what is in their best interests. As we think of our troops today in Iraq—not just the Black Watch but all the other units there—and as we think of the troops in Afghanistan and other uncomfortable and dangerous places where they are risking their lives, we owe it to them to get this right.

This is a bad Bill and I would be delighted if it failed in its entirety. It comes on top of a number of other extremely unwelcome measures that the armed forces have had to bear—I will not test your patience, Mr. Deputy Speaker, other than to mention in passing the cuts in numbers and the unprecedented risks of legal proceedings against them if they make a mistake in action.

Can we lay to rest what the Minister said about cost neutrality, as we have been round this buoy so often it is becoming tedious? It has been clear from the beginning, from the MOD's evidence to the Defence Committee, that the proposals are cost neutral in a distorted sense of the word. The overall double package—as the Minister rightly says, it is pensions and compensation—is cost neutral if we include in the calculation the fact that people will live longer. Individuals will be penalised for their prospects of living longer, if at the same time we exclude the fact that there will be more of them. The Government will save money overall, because the package will take account of the fact that people are living longer; obviously, the status quo does not do so. For that reason, I think that the Minister is bluffing when he says that he will drop the Bill—but I, for one, would be delighted, as would most members of the armed forces, were it to disappear after another gallant stand by their lordships.

It is a shame that the Minister has not been willing to listen to his gallant, honourable and noble Friend Lord Morris, whose father gave his life for this country in action, and who himself served in Palestine where, coincidentally, my father also had his first military service, with problems that are not very different from the ones being faced by our servicemen in Iraq today.

It might be helpful were we to discuss how the proposals will impinge on individual cases. I will quote three, the first two of which are actual, concrete cases, and the third of which is hypothetical. I am grateful to the Royal British Legion for providing the cases. The House will recall that the standard of proof for the war pension and the attributable pension is currently different, so we can see how the current test and the proposed test would work, because the proposed test is the current test for the attributable side. In the first two cases, there was a victory on one and a defeat on the other, but under the new arrangements there would have been a defeat on both because of the burden of proof.

The first case is that of Mrs. Rita Norman of York, the widow of Flight Lieutenant Roy Norman, RAF, who died of heart disease, which the war pensions scheme, under the old standard of proof, accepted was attributable to service. She got the war pension award, but she did not get the attributable pension on the balance of probabilities. Anyone who has followed the campaign by Mr. Smith on deep vein thrombosis, for example, will know that heart problems are commonly associated with civilian air travel, so it does not take rocket science to know that one is far more likely to have a heart attack if one is a pilot. I can see why, on the balance of probabilities, that case would be lost. Anyone who marries a pilot in any of the three services knows that the likelihood of dying in service in peacetime is far higher than in most other professions. But proving that a particular death, unless it was in a crash, was attributable to military service can be extremely difficult.

In some ways, the second case is even more worrying. It involved Mrs. Cheryl-Ann Hulme of Anglesey, widow of Sergeant Geoff Hulme, RAF, who died in a climbing accident in 1996. Let us be clear: adventure training has always played an important part in the armed forces. Are we going to have arguments about whether someone who carries out activities involved in adventure training is involved in attributable service? We can argue that someone is on holiday on a particular occasion. A climbing instructor who takes people adventure training may from time to time want to take holidays in the same way, or may want to try out a slope on which he is thinking of taking personnel later. If someone engaged in climbing while in uniform—a recognised form of adventure training—will not be eligible for a war pension, that fills me with doubt.

That brings me to the third—hypothetical—case, which I want to put to the Minister. Previously, I have made it clear that the Bill offers a rotten deal for the reserve forces by reintroducing the abatement system, which was rightly abolished by the previous Government. That is in another part of the Bill. While the Minister was speaking, I realised to my concern that there is potentially a bad deal for the reserve forces in the Lords amendment. It is common practice in the reserve forces—I imagine it is even more common now, with the cuts in man training days under this Government—for officers in particular, but to some extent for all ranks, to carry out military activities without being paid for them. Indeed, Territorial Army units could not go on if from time to time officers and senior non-commissioned officers were not willing to do recces and carry out other activities outside paid training time, because there are not enough man training days within the annual budget.

Can the Minister give the House an unequivocal assurance that under the arrangements that he proposes, no one will try to argue in an MOD court that a person carrying out activities on behalf of their unit but not being paid, perhaps because the budget has run out, was not "in uniform" at the time? My God, that would be another blow to the reserve forces, on whom an incredible stress is falling at the moment. They are suffering from the same sort of problems of overstretch as the regular forces, and their civilian employers and families are becoming concerned about it.

Those three cases illustrate, I hope, why the Government's proposals are unsatisfactory. Over the years, we have all seen Ministers—it is a characteristic of Ministers in all Governments—faced with an amendment that has been lost in the other place, or in a tight corner with their Back Benchers, using a classic ministerial tactic, which is perfectly legitimate, of hiding behind the wording of the amendment to show how defective it is. The Minister has argued that this amendment would be more expensive than keeping the status quo on the burden of proof, if I have understood him correctly—£300 million against £200 million. That is not what he should be addressing, and he knows it. What he needs to tell the House is what the Government's attitude will be if, as we know is likely to happen, their lordships introduce a compromise amendment. Better still, why does he not tell the House that the Government are willing to introduce their own compromise amendment, which deals with any concerns he may have about enlarging the scope, but which still leaves those people who deserve compensation able to get it?

We owe a special debt to those who risk their lives for us. We owe it not only to those in the discomfort and danger of Iraq and Afghanistan but to future generations, such as people in cadet units—one of which I had the privilege to visit yesterday—who are thinking of joining the armed forces. Those people have received a number of unhappy messages over the past few years. Let us send a message from Parliament that we still recognise that when things go wrong, and when they get injured in military service, the House, Parliament and the system of compensation will continue to give them the benefit of the doubt, as has been the case ever since the first world war.

Photo of Desmond Swayne Desmond Swayne Parliamentary Private Secretaries To Leader of the Opposition 2:30 pm, 20th October 2004

The Minister, in his opening remarks, provided us with a powerful argument for voting against his motion. He said that if we did not disagree with the Lords, or if subsequently the Lords insisted on their amendments, he would withdraw the Bill. Although I agree with Rachel Squire that there are many good things in the Bill, I feel that on balance it is a rip-off—a bad package—and I therefore would not mind if the Minister did withdraw it. The critical argument is that advanced by my hon. Friend Mr. Brazier: in financial terms, the Bill amounts to a diminution of the present package.

The Minister has said that as a consequence of the change in the balance of probabilities involved in decisions on claims, there will be a reduction in the number of people achieving a settlement. That is also the clear implication of what Lord Bach said in the other place. When I raised that point in Committee, the Minister said what he has said once this afternoon: "No—this will not take effect until April next year." The reality is, though, that we judge what will happen in the future on the basis of what has happened in the past, so Lord Bach is right. There are undoubtedly people who have secured pensions and settlements which, had they brought their cases after April next year, would not be secured. It is right for us to ask whether that is fair, given that the settlements sought were proper.

I know of people who have secured awards on the basis of Gulf war syndrome, which would not be secured according to the new test. A whole category of settlements would fall at the first fence—they would be ruled out for being out of time. As the Minister has already been told, unless he can tell us that all those people have been given awards unfairly and improperly in the past, we should not be prepared to countenance a change that I consider absolutely unacceptable.

Many of my constituents have benefited from the existing test. I have yet to learn of one who should not have received an award, and until such information is produced I cannot countenance any change. I believe that, on the merits of the amendment, we should not disagree with the Lords. As for the new test presented by the Minister today—that if we do not do his will, he will withdraw the Bill—that is itself a powerful reason for disagreeing with the Minister.

Photo of Mr Ivor Caplin Mr Ivor Caplin Parliamentary Under-Secretary, Ministry of Defence

I welcome this debate and will try to be brief in my summing up. First, let me congratulate Mr. Breed on becoming a grandfather. [Hon. Members: "Hear, hear."] That has prompted agreement throughout the House, of which we have seen little this afternoon.

Let me also pay tribute to all our forces, wherever they are serving today. Both regulars and reservists are doing a job whose difficulty we recognise. On that, too, there is agreement throughout the House. Mr. Brazier asked whether a reservist would be compensated for injury or illness. The test is whether the injury or illness is due to service; pay is not a determinant.

I hope that I can reassure my hon. Friend Rachel Squire. We have calculated the compensation scheme carefully so that more people who are more seriously disabled will receive benefit. I consider that to be social justice, a value shared by members of my party—although I do not exclude other parties; the Liberal Democrats are welcome to share some of our values.

Securing more compensation for those who are more seriously disabled is essential. If we take money out just in connection with the burden of proof—I shall deal shortly with the point about the Select Committee—it is likely that other parts of the compensation package will suffer.

My hon. Friend also made a point about records. Let me repeat what I said at the outset, namely, that we recognise that it would be unreasonable to ask the claimant to obtain evidence relating to his claim held in his official service records—"his" also meaning "her". The scheme rules will therefore impose a duty on the Secretary of State to make available to the claimant such evidence on request. I hope that on the basis of that, along with my commitment to the Select Committee that we would take responsibility for lost or inadequate medical records, my hon. Friend will accept that we have made considerable progress.

Photo of Gerald Howarth Gerald Howarth Shadow Minister (Defence)

As Rachel Squire pointed out, this is essentially an enabling Bill. Very little of its content enshrines provisions in law. I hope that, for the benefit of the courts, the Minister will make clear that this constitutes an obiter dicta, and that he may therefore be cited as having given an undertaking to the House today.

Photo of Mr Ivor Caplin Mr Ivor Caplin Parliamentary Under-Secretary, Ministry of Defence

This is not the first occasion on which the hon. Gentleman has heard me give such undertakings. I gave them in both the Standing Committee and the Select Committee. The good news for some Members is that we shall revisit many of the issues during the secondary legislation phase, which I hope will begin once the Bill has been given Royal Assent.

Let me reassure my hon. Friend and the House that we gave careful consideration to the alternative formula suggested by the Select Committee. It proposed a change to the standard of proof, but offered no compromise on the key cost driver of burden of proof. Although it appeared at first sight to be offering a compromise overall, on closer study that turned out not to be the case. The claimant would not be required to prove his or her case and the ultimate burden of proof would remain with the Secretary of State. We have no detailed costing, but we are satisfied that the Committee's proposal would not change the position sufficiently to make it affordable. I am not referring to the amendment proposed in the Lords with the support of the Royal British Legion; we have costed that and it, too, is not affordable.

Photo of Gerald Howarth Gerald Howarth Shadow Minister (Defence)

Given that a clear compromise was proposed by the Select Committee, why did the Minister's Department not undertake an examination of the costs? It costed everything except the one compromise that might have secured agreement on the Floor of the House.

Photo of Mr Ivor Caplin Mr Ivor Caplin Parliamentary Under-Secretary, Ministry of Defence

I think that the hon. Gentleman is becoming over-excited. I have made clear the difference between the Select Committee's proposal and what we actually looked at. We took it away and studied it, and had we been able to cost it we would have done so. The key point about Lords amendment No. 1 is that it is not the same as the Select Committee's suggestion.

Mr. Howarth asked me earlier why I did not share the new figure with the Royal British Legion. Call me old-fashioned, Mr. Deputy Speaker, but I thought that sharing it with the House first was an appropriate act for a parliamentarian. I am very happy to come here today and to share, first, with the House of Commons our calculation of £300 million, which is the right and proper thing to do. I will share the details relating to that figure with the RBL, and I also intend to write to the hon. Members for Aldershot and for South-East Cornwall and to the Select Committee about them.

I have explained why it remains the Government's strongly held view that the "beyond reasonable doubt" standard of proof supported by the Lords is not appropriate to a no fault compensation scheme and is out of line with current good practice, which shows that evidence-based decisions that are based on a "balance of probability" standard of proof are indeed the norm. The important fact is that the new scheme has been designed to admit all reasonable claims, including those that will, for good reasons, fall outside the time limit. The reassuring message that I can give to the House is that the Government are confident that no claim will fail where there is reasonable evidence that injury, ill health or death is due to service.

I want to touch briefly on the RBL's claim, which was widely quoted in the House of Lords in particular, that it expects some 60 per cent. of claims successfully made under current arrangements to fall under the new scheme's rules. Indeed, the hon. Member for Canterbury made a broadly similar point. After some initial doubts as to whether a review of this analysis would help us to resolve the disagreement, I wrote to the RBL about the analysis and asked my officials to follow up the letter. The RBL has now withdrawn its offer to allow the Ministry of Defence to look at how it arrived at this very high failure rate, having concluded, I think, that we are not genuinely open to change. I want to take this opportunity to reassure the RBL that that is not the case, and to reiterate my offer, which I made in my original letter, to consider further its analysis.

Photo of Mr Ivor Caplin Mr Ivor Caplin Parliamentary Under-Secretary, Ministry of Defence

I will not give way because I want to conclude.

For the moment, however, as we have not been given sufficient sight of the RBL's work, we must retain our concern that the study did not provide a sound analysis of how past claims would fare under the new scheme.

Those who argue that it is appropriate to have the war pension scheme arrangements, or something even more generous, in the new compensation scheme, have a duty to explain to the taxpayer why they consider it reasonable to spend an additional £300 million over 10 years. Indeed, the hon. Member for Aldershot should explain that to Mr. Letwin, who doubtless does not know what he is up to today in budgetary terms.

Photo of Mr Ivor Caplin Mr Ivor Caplin Parliamentary Under-Secretary, Ministry of Defence

Or would the Conservatives rather take money away from the more severely disabled in particular, to allow awards in cases where service is unlikely to be the cause of a condition?

The compensation scheme—

Photo of Gerald Howarth Gerald Howarth Shadow Minister (Defence)

On a point of order, Mr. Deputy Speaker. Is it acceptable for the Minister to make an assertion that is wholly without foundation about my right hon. Friend Mr. Letwin, who is fully aware of our position on this matter?

Photo of Alan Haselhurst Alan Haselhurst Deputy Speaker and Chairman of Ways and Means

That is not a matter for the Chair; it is a matter of debate.

Photo of Mr Ivor Caplin Mr Ivor Caplin Parliamentary Under-Secretary, Ministry of Defence

I am delighted to hear it, Mr. Deputy Speaker.

If one wants to spend that additional £300 million over 10 years, it has to come from somewhere, and I assume, as I said, that the Conservatives are suggesting taking it from the more severely disabled, to allow awards in cases where service was unlikely to be the cause of a condition. That is the Conservatives' position, but I am pleased to say that it is not the position of this Labour Government.

The compensation scheme has the full support of the Chiefs of Staff, the support of many in our armed forces and, indeed, those in the ex-service community. I hope that the Bill will have this House's support today and the Lords' support when it returns to it.

Question put, That this House disagrees with the Lords in the said amendment:—

The House divided: Ayes 269, Noes 181.

Division number 272 Clause 1 — Pension and compensation schemes: armed and reserve forces

Aye: 269 MPs

No: 181 MPs

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Question accordingly agreed to.

Lords amendment disagreed to.

After Clause 6

Lords amendment: No. 2.

Photo of Gerald Howarth Gerald Howarth Shadow Minister (Defence)

I beg to move amendment (a) to the Lords amendment, in line 3, after 'widows' insert 'or'.

Photo of Alan Haselhurst Alan Haselhurst Deputy Speaker and Chairman of Ways and Means

With this, it will be convenient to discuss amendments (b) and (c).

Photo of Gerald Howarth Gerald Howarth Shadow Minister (Defence)

I am speaking to the amendments that stand in my name. There are several, but they add up to the same thing, which is to amend the amendment proposed by their lordships in the other place.

On retirement widows, as with the burden of proof, the Government have remained stubbornly resistant throughout, refusing to give an inch in response to calls from the Forces Pension Society, Members of this House and of the other place and the widows themselves.

Currently, those who retired before 6 April 1978 and married for the first or subsequent time after their retirement receive no widow's benefit. Those who retired after 6 April 1978 have a widow's benefit based only on that part of their service that took place after 1978. For example, a serviceman who served a full career with half his service before 1978 would leave his widow from a post-retirement marriage on a pension worth just over 12 per cent. of his final salary. That compares with a pension worth 24.25 per cent. of final salary that would be paid to a pre-retirement marriage widow; that is, a woman who had married her husband while he was serving in the armed forces.

The Government have set out the same arguments repeatedly, and I have no doubt that we will hear them again today. They say that the projected cost of £50 million is too expensive, that such a change would affect the longstanding policy that there should be no retrospection and that there would be a read-across to the rest of the public sector. As the Opposition have said on previous occasions, we remain unconvinced on the two latter points, and I shall turn to them now.

First, I shall deal with the question of cost. Lords amendment No. 2 offers an affordable compromise, and is aimed at helping the oldest and most vulnerable widows. We accept that the one-off, up-front cost of £50 million could be difficult to justify, given the competing pressures on an already overstretched budget, so we are offering a compromise to address the needs of the most vulnerable members of this group. By making provision for those over 70, we would maintain the spirit of the amendment tabled by Lord Freyberg, and would do so at a relatively small cost, which we believe to be entirely justified.

I should like to take this opportunity to pay tribute to Lord Freyberg. From the Cross Benches, he made a very valuable contribution to the debates on these matters in the other place.

The Government Actuary's Department and the Ministry of Defence have refused to release the assumptions on which their costings are based, so it is difficult to make accurate financial projections. However, the Forces Pension Society has estimated that were the Government minded to make a small concession on payments to those who married a member of the armed forces pension scheme before his 60th birthday and who are now widows over the age of 70, the cost would be of the order of £10 million.

We believe that to be affordable and justified. If the Government refuse to relent on this issue, the next Conservative Government will make the provision for the oldest and most vulnerable of the people affected. We are willing to make that commitment. Are the Government willing to do the same?

Furthermore, the stipulation that the marriage should have taken place before the member's 60th birthday would bring the provision into line with the normal retirement age for the vast majority of workers in the public sector. The vast majority of service people leave the armed forces at or before their 40th birthday, so that stipulation would mean only that service personnel would be treated equitably with the rest of the public sector. It would confer on them no special privilege, but would merely bring them into line with the rest of the public sector. The amendment is designed to secure parity, and there would be no read-across to the rest of the public sector.

Since 1973, service personnel have had their pay abated; in other words, a deduction is made from their salary to assist in the provision of pensions for themselves and their dependants. Pension provision is therefore not without cost for members of our armed forces, as they make payments by way of a reduced salary. That principle was conceded in the new scheme, and changes were introduced in 1978, so there can be no justification for this small and disadvantaged group to continue to be penalised by outdated legislation.

The Minister has said that providing the proposed pension provision for widows and widowers of post-retirement marriages would go against the policy adopted by successive Governments that there should be no retrospection. Again, we remain unconvinced. The precedent has already been set for making provision for vulnerable groups adversely affected by changes in legislation. In 1989, for example the then Secretary of State for Defence, my noble Friend Lord King, responded to concerns that help should be given to a "uniquely deserving category" of individuals and stated that pre-1973 widows would, from April 1990, be given an additional, tax-free payment of £40 a week. That payment would come from the Department then known as the Department for Social Security.

In his statement to the House and in the ensuing debate, Lord King made it clear that the change was not retrospective, and that the new payment was designed to boost the income of a group of people who had not benefited from the later improvements made to the armed forces pension scheme because of the policy of non-retrospection. When any new scheme is introduced, there will always be some who are left behind, as happened in 1978. However, the precedent exists to make provision for what Lord King called a "uniquely deserving category" of people.

On the question of read-across to other public sector workers, we have maintained throughout the Bill's passage through Parliament that the armed forces are different from all other public services. As Opposition Members, Liberal Democrat Members and Rachel Squire have all said, what we ask of our armed forces is unique. We ask them to place their lives on the line as a matter of routine, in the name of their country.

A former Pensions Minister said:

"I should emphasise that the exemption of the armed forces will not be a precedent for the treatment of any other group. The armed forces are unique in the demands that are placed on them and the diversity of duties that their members may be required to undertake at any time and for any period." —[Official Report, Standing Committee D, 5 February 1998; c. 777.]

That was not said by my noble Friend Lord King, nor even by a member of the Conservative party, although it might have been. It was said by Mr. McCartney. We agree. The sacrifice made by the members of our armed forces should be recognised in the way in which we treat them and those whom they leave behind.

As the splendidly feisty organisation No Pension 4 U has observed, many of the spouses of the oldest widows covered by our amendments will have seen service during the second world war. Indeed, some of the very oldest widows may have contributed to that victory themselves, through the Women's Royal Army Corps, the Women's Royal Naval Service, the Auxiliary Territorial Service and the Women's Royal Air Force, or other associated occupations.

Some pretty touching cases have been drawn to my attention. A lady from Devon stated:

"My husband was in Bomber Command during the second world war. He stayed on in the Royal Air Force and served until 1970. He lost his first wife in 1974 and he and I married in 1977. He is now nearly 88 and I am 82—however, not too old to feel very bitter that although now partners of the same sex are entitled to a pension I am not and would have a struggle to maintain standards if he dies first. One really does feel was his sacrifice of his youth worth it when the older service men seem to be forgotten?"

A lady from Essex wrote:

"My husband joined the army in 1946 and left in 1975. His first wife sadly died in 1987. We married at Christmas 1989 and I am dismayed to find that I have less status regarding pensions than an unmarried or same sex relationship partner. My husband is now 75 and still works. Although he enjoys working I know that his main motivation for doing so is to help to provide for my future as he now knows that I shall not receive any part of his pension if he dies first."

Photo of John Gummer John Gummer Conservative, Suffolk Coastal 3:00 pm, 20th October 2004

Does my hon. Friend remember an earlier debate in which the need to recognise the realities of life were mentioned? It was said then that people facing circumstances that were less favourable than expected should have a reasonable or fair deal. That is an attractive argument. Will my hon. Friend explain why people do not feel the same way about women who have lived as second wives for a long period of time and who then find themselves in reduced circumstances? That was wrong under the previous Conservative Government; surely it is time that the House recognised that it would be sensible to put the matter right?

Photo of Gerald Howarth Gerald Howarth Shadow Minister (Defence)

My right hon. Friend is entirely right. The Minister will say it anyway, so I shall say it first: the legacy issue was not dealt with by the previous Conservative Government, but the number of people involved is declining all the time. It is time to recognise those members of the armed forces pension scheme who served their country and got married later in life.

There is a well recognised precedent in this House that we try to put right unfairnesses and injustices for which the resources previously have remained unavailable. We believe that those resources should be made available, and we are prepared to commit them in this matter.

We see no reason why a gesture to the most vulnerable among the post-retirement widows need have any effect on the wider public services. The Government admit that the armed forces are unique; their members and their families should be treated as such. With so many of those covered by the amendment being widows of second world war veterans, it would be an entirely justified and magnanimous gesture to make in the 60th anniversary year of the end of the war, regaining the Government some of the trust they have lost among the ex-service community.

We accept that there is no particular reason why the post-retirement marriage amendment should appear in the Bill; little else does. We accept that it is essentially a legacy issue and falls outside the auspices of the new armed forces pension and compensation scheme. However, the plight of the most vulnerable post-retirement widows cannot be simply brushed to one side.

The Opposition have made a commitment to seek some kind of provision for those widows. We will, therefore, not seek to take this amendment further if the Minister is prepared to give a commitment now to make provision for the most vulnerable widows, along the lines of the amendment, outside the new scheme. The Minister has already given various commitments to the House today that while not in the form of legislation, are nevertheless binding commitments on the Government. If the Minister wishes to make that commitment now, I shall be happy to give way to him.

Answer came there none. I am sorry about that, because I am trying to find a compromise. If the Government refuse to be magnanimous and make a small cash commitment to some of the most vulnerable who have been overlooked for many years, we shall seek to press the amendment to a vote. The Minister can be assured that the issue will return when it has been considered in the other place. I am sorry that the Minister is unwilling to compromise. I have made what I consider to be an overwhelming case and it is time we took action and acted magnanimously. I hope that the House will support the amendment.

Photo of Rachel Squire Rachel Squire Labour, Dunfermline West

The Defence Committee sees the amendment as contentious, and I understand that it was passed in the other place by only one vote. The amendment would have a retrospective effect. Before 1978, service personnel were unable to accrue pension entitlements for widows or widowers except when marriage occurred before or during service. The amendment would extend the right to a widow's pension to wives, husbands and registered unmarried partners of service personnel, even if the marriage took place after the service person had left the armed forces, as long as it occurred before they reached the age of 60.

The amendment would also increase the rate of post-retirement widow's pension for those widows and widowers who currently receive a post-retirement pension based only on that part of their spouse's service after the changes were made. It would improve the benefits of unmarried partners who presently receive benefits only if the death of their partner is due to service.

I am aware that the Government opposed the amendment in the other place because of the cost of some £50 million and because it is wrong in principle for laws to have a retrospective effect. The Government are also concerned that a change for the armed forces might require similar, and much more expensive, change for the rest of the public sector. I have heard estimates of between £300 million and £500 million. We are all aware of successive Governments' opposition to making improvements to public service pension schemes retrospective, and I have been made aware of possible considerable ill-feeling if the widow of a serviceman received some retrospective benefit and was treated more favourably than the widow of a fireman or a policeman. However, the Defence Committee and many other hon. Members think that our armed forces deserve particular treatment because of the commitment they give, including possibly risking their lives in the service of our country.

Like Mr. Howarth, I have received strong representation on this issue from the Forces Pension Society. This year we have been remembering the 60th anniversary of the Normandy landings and next year we will remember the 60th anniversary of the end of the second world war, so I hope that the Government will consider a compromise on these issues, especially for the 75-plus age group and those linked to the veterans of that war.

Photo of John Gummer John Gummer Conservative, Suffolk Coastal 3:15 pm, 20th October 2004

The subject of the amendment is easily made into an emotive issue and, in a sense, is none the worse for that. As Rachel Squire said, we are talking about a group of the population whom we have asked to do something very special that is different from anything that we ask of anyone else. Given that we are—in my view, wrongly—at war, it is a good time for us to think about this issue.

Throughout my time in Parliament I have taken up several relevant cases, and I am sorry that previous Conservative Governments were not able to put the matter right. I have always found it unacceptable that widows of service people who marry another service person should lose entitlement to the pension of their first spouse without gaining entitlement to the pension of the second. That is not a generous approach. I commend the concept of generosity to the Minister. I have been frank in saying that it was a pity that previous Governments, of whom I was a member, were not generous enough. If I am willing to say that, perhaps the Minister will be willing to be more generous.

The amendment provides an opportunity to do something that is, frankly speaking, a matter of common decency for those who, in later life, have provided the companionship that has been denied to a serviceman through the death of his original wife. We do not say that those people should receive extra compensation or special treatment, but that they should receive what reasonable people might think was theirs by right.

There is no need for a read-across from this provision to other areas. It never has been true that we have allowed our treatment of the servicemen and women, to whom we owe so much, to be prayed in aid in other cases. The Government have a particular reason for accepting the amendment. At this very moment, they have decided or are about to decide—depending on which version one believes—to ask yet more of service personnel by extending their tour of duty and making them more vulnerable by putting them in the line of fire. It is not unreasonable, therefore, to see what we can do to recognise the special role that the armed forces play.

I understand that there is not much money around. I can think of many examples of the Government's policies and programmes from which they could find some money, but I would incur your wrath, Madam Deputy Speaker, were I to explore that issue. That is why we have not been ambitious in our request that the Government do the right thing.

Photo of Gerald Howarth Gerald Howarth Shadow Minister (Defence)

The official Opposition have done our sums and we calculate that we can provide a 10 per cent. uplift in defence expenditure—a £2.7 billion increase for our armed forces over two years. My right hon. Friend says that we should be able to afford the measure; we will be able to afford it.

Photo of John Gummer John Gummer Conservative, Suffolk Coastal

My hon. Friend makes an important point, which I put in this context. The Government make the amazing argument that all their expenditure is perfect, inviolable and properly directed and that no other expenditure can possibly be accepted due to the enormous responsibilities they have taken on. That is an incredible position for any Government, but especially for this Government because we can see just how much wastage there is throughout the system. However, we are not dealing with that but with a principle—whether the proposal is right.

I am worried about the amendment, as I think it would be right to go the whole hog. That is the moral demand placed on us by our forces. I have always made that argument, so I do not suggest for a moment that I have changed my mind simply because we are in opposition. I held that view as a Minister and I am only sorry that I was neither in a position, nor had the clout, to insist on it taking place. I am now trying again.

I suggest to those who have been especially dependent on our forces and have put them in a position in Iraq that is wholly unacceptable—I know that my hon. Friend Mr. Howarth does not agree, but that is my view—that they really should do something. What could be better than to say to our troops currently fighting in the very questionable circumstances in which the Government have placed them that, in addition to the vast sum of money—unnecessary money in my view—that we are expending, we are spending that small sum on people who served our country in so signal a way? That is the least we can do.

If the Under-Secretary says that we cannot afford to do that, my reply will be that we are able to afford every pound that we spend in Iraq, even though we should not be there. We should not be spending that money and we were misled into that position, so the least he can do is to spend a bit on these proposals. That is where he should spend the money; on those who cannot speak for themselves and who deserve it. I hope that he will do it—[Interruption.] It is all right for the Minister of State to mumble under his breath; he has a very heavy price to pay. Most members of his party know that. Some of us knew at the time, and more and more of us—

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

Order. I hope that the right hon. Gentleman will confine his remarks to the amendment.

Photo of John Gummer John Gummer Conservative, Suffolk Coastal

You are perfectly right, Madam Deputy Speaker. I am sure that Ministers will be pleased to get back to the amendment, which they find easier. It is easier not to help the poor than to take the measures that should be taken. Perhaps, however, they will allow me to suggest that this would be a good moment for them to show that they understand that the armed forces do something that no one else does. Accepting the amendment would be a way of recognising that.

Photo of Colin Breed Colin Breed Shadow Minister, Defence

There are only a few occasions when primary legislation deals with long-standing grievances that people have waited a long time for us to address. Many people will be watching closely the debates in this and the other place on this legacy matter.

As other speakers have noted, there seem to be three main reasons that the Government feel unable to support the amendment: expense, retrospectivity and read-across. All three have been adequately addressed and if the Government had the will, they could in fact undertake that relatively modest additional expenditure. It has nothing to do with the overall cost, the retrospective principle or the fact that the provision could be read across into other sectors. At the end of the day, the Government are the Government and they can will things to happen if they believe it right.

If the Government do not act, it is because they do not consider it right to do so. Such a rebuff will resound in many homes after this debate and others that succeed it during the passage of the Bill.

The Government are fond of targeting their resources and the amendment would give them a good opportunity to employ that principle by targeting those aged over 70, who may be the most needy in these circumstances. As has been said, many of those people would feel not that they were being given special treatment, but simply that they were being treated equally and with justice. That uniquely disadvantaged group will inevitably grow smaller each year. If the Government feel, at this late stage, unable to support a genuine attempt to reach a reasonable compromise, it is because they do not actually believe that it will affect real people—they are real people, as the examples we have heard demonstrate—and we can come to only one conclusion.

Photo of Mr Ivor Caplin Mr Ivor Caplin Parliamentary Under-Secretary, Ministry of Defence

I very much appreciate the debate that we have held on post-retirement marriage. People are affected by the issues, as Mr. Breed said and I accept that, at present, the Government have not been able to agree to this particular measure. However, both the hon. Gentleman and Mr. Howarth might have reflected on the changes that we have made during the past few months, during our debates on these issues.

In particular, we agreed, in the Lords, to a measure to allow war widows whose husbands' service ended before 1973—when the improved occupational pension schemes were introduced—to retain their pension on remarriage. That was a valuable and important amendment and shows our commitment to an important group of pensioners. It does not breach the retrospective rule. It has a cost, however. Mr. Gummer was baiting me a little about cost, but that relatively small amendment will cost the Government £20 million. None the less, I think it is worth doing and my right hon. Friend the Secretary of State and other Ministers accept that. There is always a cost, however, and we cannot exclude such considerations. That provision was especially significant for the War Widows Association and it demonstrates the Government's desire to consider the issues when we can do so.

Photo of Gerald Howarth Gerald Howarth Shadow Minister (Defence)

Perhaps I can just put on the record that we do indeed welcome the change that the Government have made. It is a welcome sign of flexibility. If the Minister would just move a little further forward, we could all agree and go home.

Photo of Mr Ivor Caplin Mr Ivor Caplin Parliamentary Under-Secretary, Ministry of Defence

Let us not get too carried away. I want to place on record one or two comments about the Lords amendment No. 2 and the three amendments tabled by the hon. Member for Aldershot. He recognises that this matter does not require primary legislation and has nothing to do with the pension scheme. Hon. Members on both sides of the House accept that, and I accept that particularly the Forces Pension Society has used the Bill to promote the legacy issues. I do not deny that; nor do I disagree with it. It is a perfectly reasonable campaign approach.

If the House were to accept Lords amendment No. 2, pensions would be provided to widows and widowers who married their service spouse in retirement and who did not benefit from the introduction of pensions for post-retirement marriages in the 1970s. That would affect all widows whose husbands had service before 6 April 1978, and all widowers whose service wives had service before 1 October 1987.

In moving his amendment, Lord Freyberg limited his concession to marriages before the age of 60, arguing that members of other public service schemes who were similarly affected before 1978 could, unlike servicemen and women, have expected their careers to last until the age of 60 and so would not, up to that age, have been marrying post retirement. The Government do not accept the thrust of that argument. The basic rules apply equally to all public service schemes, and early retirement is not unique to the armed forces. Other public servants who have had to give up their careers before the age of 60 were equally unable to marry after leaving service and pass on their benefits to their widows for any service before April 1978.

Photo of John Gummer John Gummer Conservative, Suffolk Coastal 3:30 pm, 20th October 2004

Most people in the public service who give up work before the age of 60 would consider themselves unusual—that is not what happens normally—but the fact is that the nature of service life is such that people do so as a matter of normal activity. Therefore, such a read-across is not fair. Surely, it is possible to make a special arrangement for those in the armed forces because of the nature of their jobs and their prospects after the age of 40. Unless we are to have a large number of people in the infantry at the age of 59, that seems to be a likely continuum.

Photo of Mr Ivor Caplin Mr Ivor Caplin Parliamentary Under-Secretary, Ministry of Defence

Perhaps I can come to the point that the right hon. Gentleman makes, but we cannot avoid the read-across to wider Government issues. I certainly want to say a bit about that in a moment, although I do not think that my explanation will satisfy him.

We are also considering the amendments tabled by the hon. Member for Aldershot. I did not respond when he was trying to bait me to rise from my seat because, quite simply, those amendments came across my desk first thing this morning. As the hon. Gentleman knows, I had another engagement this morning, which I was very pleased to carry out, at St. Paul's cathedral. So I have not had time to study the proposals in detail. Last week, however, I had a constructive meeting with Lord Freyberg, and I indicated to him that we may be able to build on that meeting in future, once the Bill has received Royal Assent. I hope that, when that occurs, we can perhaps look at some of the other issues.

I need to deal with the read-across to public service generally, because it is important.

Photo of Gerald Howarth Gerald Howarth Shadow Minister (Defence)

I will not detain the House long. It is extremely encouraging that the Minister has had that meeting, but I suspect that the other place and, indeed, those hon. Members who feel strongly about the issue will need a little more than hearing that there is a willingness to discuss the proposals. Will the Minister give a firmer undertaking that either Lord Freyberg's proposals on post-retirement marriages or my more limited proposals would be acceptable?

Photo of Mr Ivor Caplin Mr Ivor Caplin Parliamentary Under-Secretary, Ministry of Defence

I have gone as far as I intend to go today in respect of my conversation with Lord Freyberg, and the hon. Gentleman will have to make his decisions accordingly.

I want to deal with the costs, which have obviously entered our debate—the hon. Member for South-East Cornwall referred to them. The total cost to the Government of retrospective action would be significant, which is why successive Governments have decided that whatever the merits of the case, change was simply unaffordable. As the hon. Member for Aldershot knows, it is estimated that the Ministry of Defence would have to pay a one-off lump sum of £50 million to cover past service costs. The Government Actuary estimates that the cost of the read-across to all public service schemes would be £500 million. The unmarried partner aspect of the Lords amendment would add substantially to that cost, but we have been unable to estimate how much because of the lack of data on unmarried partner numbers in the past.

I understand why Members of both Houses would want to support the Lords amendment, but I do not think that they have given proper regard to the cost implications that the changes would create. The question of affordability is important, and irrespective of the merits of the measure, it would not be viable to implement it without paying any regard to other parts of the public service. We have put together a good package of pension and compensation benefits for our armed forces, so I hope that the question of post-retirement marriages will not prevent the Bill from receiving Royal Assent during this Session so that we can begin the important transition process to the new scheme in time for April 2005.

It might be useful for me to deal with the question of retrospection because it often comes up during our debates on pensions. It is true that successive Governments have maintained the principle that there should be no retrospection in pension policy. I pray in aid the Defence Committee because its report recognised:

"it would hardly be reasonable of the Government to avoid making better provisions for future pensioners so that previous pensioners do not feel aggrieved".

That is the overall point behind our debate on post-retirement marriages, and I hope that the House accepts that I understand the nature of the situation. During my discussions with Lord Freyberg and the Forces Pension Society, I indicated that we are prepared to continue to consider the matter.

I hope that the hon. Member for Aldershot will resist the temptation to press his amendment to a Division because if he does so, my hon. Friends and I will vote against him. I hope that the House will join me in disagreeing with Lords amendment No. 2 because that provision on pension legacy is not needed, as we proved to some extent in the House of Lords when we made a slight change to the system, which will cost £20 million.

Question put, That the amendment to the Lords amendment be made:—

The House divided: Ayes 181, Noes 270.

Division number 273 Clause 1 — Pension and compensation schemes: armed and reserve forces

Aye: 180 MPs

No: 270 MPs

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Question accordingly negatived.

Lords amendment: No. 2.

Photo of Mr Ivor Caplin Mr Ivor Caplin Parliamentary Under-Secretary, Ministry of Defence

I beg to move, That this House
disagrees with the Lords in the said amendment.

The House divided: Ayes 279, Noes 180.

Division number 274 Clause 1 — Pension and compensation schemes: armed and reserve forces

Aye: 278 MPs

No: 180 MPs

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Question accordingly agreed to.

Lords amendment No. 2 disagreed to.

Lords amendment: No. 3

Photo of Mr Ivor Caplin Mr Ivor Caplin Parliamentary Under-Secretary, Ministry of Defence

I beg to move, That this House
agrees with the Lords in the said amendment.

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

With this it will be convenient to discuss Lords amendment No. 4.

Photo of Mr Ivor Caplin Mr Ivor Caplin Parliamentary Under-Secretary, Ministry of Defence

I am pleased to tell the House that the Government accept Lords amendments Nos. 3 and 4 from their lordships' House. They are uncontroversial Government amendments. Lords amendment No. 3 is beneficial to the ex-service community as it broadens the definition of "appeal" in the Late Appeals Regulations 2001 to include late interim assessment appeals.

Lords amendment No. 4 corrects a technical defect in the initial drafting of the Bill that was identified by the Delegated Powers and Regulatory Reform Committee when it considered the Bill. It provides that a commencement order under clause 8 is not subject to any parliamentary procedure.

Photo of Gerald Howarth Gerald Howarth Shadow Minister (Defence)

We have no problem in agreeing to the amendments and we are delighted that the Government have accepted at least some amendments from their lordships' House, even if they have been less than gracious in rejecting the other two.

I welcome the Government's move in the direction outlined in amendment No. 3. As the Minister said, we discussed the matter in Committee and it is right and proper to make provision for late appeals against final as well as interim assessments. We therefore welcome amendment No. 3.

I confess that I am not as technically familiar with the substance of Lords amendment No. 4 as perhaps I should be.

Photo of Gerald Howarth Gerald Howarth Shadow Minister (Defence)

My hon. Friend says, "Shame." However, I understand that the amendment would inhibit to some extent some of the amazing powers that the Bill confers on the Government.

It has been an issue for all parties that the Bill is an enabling measure that confers enormous powers on the Secretary of State. I warmly welcome anything that limits the Secretary of State's powers and I therefore welcome amendment Lord No. 4.

Photo of Colin Breed Colin Breed Shadow Minister, Defence

We are happy to signal our support for both amendments.

Lords amendment agreed to.

Lords amendment No. 4 agreed to.

Committee appointed to draw up Reasons to be assigned to the Lords for disagreeing to their amendments Nos. 1 and 2 to the Bill: Liz Blackman, Mr. Colin Breed, Mr. Ivor Caplin, Mr. Gerald Howarth and Derek Twigg; Mr. Ivor Caplin to be Chairman of the Committee; Three to be the quorum of the Committee.—[Derek Twigg.]

To withdraw immediately.

Reasons for disagreeing to certain Lords amendments reported, and agreed to; to be communicated to the Lords.