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I beg to move, That the Bill be now read a Second time.
The past three hours have seen the House of Commons at its very best. All parties have been striving to improve the condition of a minority whose conditions need improving. I wonder whether it is too much to ask that that spirit continues for the next hour or so and that the minority whom my Bill addresses will be treated in the same generous spirit by this Government.
I do not think that I have to, but I declare an interest in that I am in receipt of an armed forces pension, which would not be affected in any way by the Bill. I also want to say that my wife Christine was a war widow until we married, but she will in no way be affected by the Bill. It is proper, in this age of openness, to ensure that one does not omit anything.
This is the second time I have introduced a Bill to correct one particularly odious anomaly in the pension system for service widows, but it is not the first time I have tried to put right the myriad problems that have arisen with the forces pension system as a result of the many changes that have been made down the years. In 1989, the mere threat of a Bill promoted by me helped to persuade my noble Friend Lady Thatcher to agree to put right an unfairness in the treatment of 54,000 pre-1973 war widows. The change that I seek to make today is far more modest in terms of the number of widows affected and the likely cost. There will also, of course, be far fewer eligible recipients today than there were in 1989 because of the passage of time.
Through the Bill, I seek to end the unfairness whereby widows of those who retired before
I am grateful to the Forces Pension Society for providing me with an example, which, sadly, the Ministry of Defence declined to do. The widow of an Army captain who joined aged 21 in 1938, and who retired at 55, as they do, on
Both widows would have the same sort of household expenditure. One would have had a husband who fought for his country in the second world war, but would receive only a one-third pension; the other would have had a husband who served later and who had probably never gone to war, and she would receive one half of her husband's pension. That difference cannot be dismissed as some technical anomaly resulting from improvements to the armed forces pension scheme. It is a gross injustice that should have been put right long ago. The purpose of the Bill is to enable the Government to put right that injustice, but the Bill would do so in a very particular way.
I make no secret of the fact that the Bill is worded as it is because of the rules of the House. As a Back Bencher, I cannot introduce a Bill that would increase public spending without obtaining a money resolution. My approach has therefore been to propose a Bill that enables pensions made before and after
Any suggestion for improvements to the armed forces pension scheme always runs up against questions of cost. In evidence to the Defence Committee in 2002, the Ministry of Defence said that on the basis of a "broad actuarial assumption"—those were its words—the cost of raising a one-third pension to a one-half pension would be roughly £25 million to £30 million a year. Of course, that cost is falling all the time as widows pass on. Furthermore, the Ministry of Defence figure is a gross estimate. Part of the expense would probably be recouped through higher tax receipts and less spent in benefit payments, but the moral argument is more important to me than the cost.
I hope that I will be proved wrong, but I fear that when the Minister replies to the debate, he will make much the same arguments that a former Minister, Derek Twigg, made when my previous Bill was debated. In case he does, let us examine each of them, the first of which relates to retrospection. Whenever a legacy issue relating to the armed forces pension scheme is raised, Ministers say that Governments have always made improvements to public service pension schemes on the basis that they are not retrospective. They say that to single out the pre-1973 widows would be to break that fundamental rule. The difficulty with that argument is that the so-called "no retrospection" rule has been broken before. As I have said, in 1989, the Government made an index-linked payment to pre-1973 war widows as a result of a cross-party campaign that culminated in my introducing a Bill on the subject.
There have been more recent changes, too. Indeed, in a debate on my previous Bill, the hon. Member for Halton made the argument for no retrospection, but promptly discussed what he called the "change of policy" in 2000, which was retrospective in its effect. The changes made in 2000 meant that the widows and widowers of spouses who died in connection with service life could still receive a pension for life after remarriage or when cohabitating with someone else.
The Minister might well say that that was not retrospective because it applied only from that date onwards, but that is not the whole of the Government's retrospection argument. They also say that pre-1973 widows should not benefit from an improvement to the AFPS because their spouses did not contribute towards the improved pension. But the Government chose to ignore that point when they decided that what the Minister last year—rightly in my view—called
"a very special group of war widows"—[ Hansard, 1 February 2008; Vol. 471, c. 629.]
should benefit from a retrospective change in the pension scheme in respect of remarriage.
The retrospection rule was also broken, in the case of the armed forces, in 1963 when the then Prime Minister decided that the pensions of pre-1958 war widows should be calculated on a more favourable basis, following a recommendation from an independent committee. The Bill is simply part two of that attempt to catch up with past unfairness.
Ministers have, secondly, argued that improvements to public service pension schemes would be unaffordable if they were retrospective. The MOD expressed this point of view in a memo to the Defence Committee, in which it stated:
"Improvements to pension schemes are not applied retrospectively as to do otherwise would make any worthwhile improvements unaffordable".
But my Bill is not proposing that all improvements should be retrospective. On the contrary, I am saying that the widows of service personnel are a special case. People who join the armed forces risk their lives for their country in a way that no other group of public sector workers do.
It is hardly credible for Ministers to say that raising the one-third pensions to one half for pre-1973 widows is unaffordable. The Government admitted to the Defence Committee in 2002 that they did not know how many such pensioners there were. I have tabled several questions over the years and have received the same response. The Government are unable to tell us how many widows there are whose husbands retired pre-1973, so suggesting that the cost would be up to £30 million a year has no credibility because no one can back it up.
Quoting sensational figures for the cost of some other retrospective changes, as the Minister did last year, is all very well but it avoids serious discussion of the plight of elderly widows on very low incomes who are now in the autumn of their lives. These are women who have been widows for at least 36 years. We should be focusing on their situation and not on far-fetched arguments about cost.
The final argument that Ministers have made is related to the last one. It is said that it would be unfair to single out one section of public sector pensioners for improvements in their pension because that would discriminate against other public sector pensioners. I regard this argument as absurd. Public sector pension schemes are not all identical. They reflect the nature of the occupation, including the degree of risk involved in day-to-day employment. The armed forces are in a different position from other public sector employees in both their conditions of work and the degree of risk involved.
There is an important but small additional difference between the armed forces pension scheme and the others. Members of the armed forces pension scheme are not represented on the pension scheme by trustees or other independent persons. Service personnel are entirely reliant on the Ministry of Defence to look after their interests. When the MOD fails to do that, as in this case, Parliament must step in. Sometimes in politics we are called upon to speak up for a group of people who do not have a powerful voice, people who cannot easily make their case in the public arena. This is one example. It follows the example that we have been debating in such a constructive fashion for the past three hours.
The widows who are trying eke out their existence in retirement on one third of their late husband's pension are a diminishing number as nature takes its toll. The Minister has the chance to correct an unfairness and do the right thing by these widows, whose husbands did so much for this country and its freedom. I urge him do so, and I ask the House to support the Bill.
I congratulate my right hon. Friend Mr. Mates on bringing his Bill to the House and on the manner in which he presented it. It is a cause for which he has campaigned tirelessly, and I pay tribute to him for his perseverance.
I declare an interest as a service pensioner, a distinction that I share with my right hon. Friend. Although our service did not overlap, I believe we served for about the same length of time and retired at the same rank. It is more than a year since the Bill was debated in the House, a period in which our armed forces have continued to make us proud, whatever position we have taken on the Government's foreign policy. Much has been spoken of the military covenant since 2003. The men and women of our armed forces have every right to expect Government to keep their side of the bargain in relation to the military covenant. The deal includes the proper recognition of the crucial role and sacrifice of dependants—a fact that, I think, is acknowledged by all parts of the House.
The Bill was last debated on
This issue has, quite rightly, generated considerable interest among the public, and I notice that the Bill has cross-party support. In February last year, the Minister's predecessor estimated the cost of upgrading all pre-1973 widows' pensions to the half rate to be £30 million pounds. Will the Minister today tell us the updated figure and how many widows would benefit from the changes that my right hon. Friend seeks? It is only fair to say that it has been the policy of successive Governments to resist retrospective changes to existing pension schemes on the ground that to do otherwise would invite consequential and unaffordable public sector demands. I have no doubt that the Minister will cover some of those points in his remarks.
When the Bill was last before the House, the then Minister estimated that the wider cost implications might total £3 billion. Is that still the Ministry of Defence's estimate, and how was that calculation arrived at? Members will no doubt be aware of the provision in the amendments of
I acknowledge that change can sometimes be achieved without risking meltdown in the public finances. In doing so, I note the amendments in 2000 for widows and widowers whose spouses died as a result of their service, and they may now retain their pensions on remarriage. The provision was extended to all widows under the terms of the armed forces pension scheme 2005, although not to those whose spouses died prior to transfer to the new pension scheme—an apparent anomaly that was brought to my attention by a service widow who came to see me recently, and about which I have written to the Minister. Given that, evidently, change is possible, I look forward to hearing what plans the Minister has for further improvements to the armed forces pension scheme.
I shall be very brief in light of the time that is left. I congratulate Mr. Mates not only on introducing the Bill, but on his long-standing work on the issue—work that I had heard of before I entered Parliament.
We support the Bill, because it removes the use of arbitrary dates as a means of deciding financial support for the individuals whom we are considering. We firmly believe that we need to recognise the value and contribution that forces families make, and we believe that a Government's commitment to the military covenant should never be called into question. We welcome the Bill also as a step towards resolving many outstanding issues that service personnel feel need to be addressed, and we would like to be swiftly implemented, because—obviously and as had been said already—fewer forces widows are likely to see the benefit if time goes on and on before the change is made.
I congratulate Mr. Mates on introducing this Bill. His success in the ballot suggests that he has the same lucky touch that I had. His Bill calls for the equal treatment of pension provision for forces widows. He has clearly followed the usual advice to keep it as simple as possible to ensure that people could not fillet it when it came before the House.
A similar Bill was introduced in December 2007, with its Second Reading taking place on
As Minister for veterans, I always find it a great privilege to meet veterans and widows. Those widows are very varied. Some are very elderly, but there are now some who are very young as a result of the conflict in Afghanistan. Last Friday, one young widow, Victoria Bateman, convinced me and Bob Russell, foolishly, to do a parachute jump with her to raise money for the Parachute Regiment charities. She is a young lady of 24, which demonstrates the differences that exist, which are also, of course, reflected in our veterans. There are our second world veterans and the two remaining first world war veterans, but also the younger veterans that we have today.
This Government have a proud record in supporting veterans and armed forces widows. To their credit, they introduced the post of Minister for veterans—a job that I am very pleased and proud to do—to recognise the special debt that we owe to veterans in society. The success of the veterans badge is shown by the fact that more than 715,000 individuals have applied for it and are wearing it with pride. I hope that all right hon. and hon. Members will participate in armed forces day on
As the right hon. Gentleman intimated, the Bill does not only deal with retrospection in benefits paid to widows; it has an impact not just on that scheme, but on other schemes involving the Ministry of Defence and other public services. As he said, when someone joins a pension scheme, the terms and conditions under which they do so are clearly laid out, and it has been the policy of successive Governments that retrospective benefits are not paid in the MOD pension scheme or in other schemes. As he rightly said, the issue to consider is affordability. This Government have made only one exception to that rule, to which I shall refer later. It rightly applied to a specific group of defined widows.
But the numbers involved are different, and I shall certainly cover that matter later.
We need to deal with the principle of retrospection, and it is important to put the Bill and the matter of pension provision in historical context. Over time, the pensions of armed forces and other public sector workers have been changed and amended. Quite rightly, successive Governments have tried to improve the benefits of those schemes. Unfortunately, we are now perhaps entering a period in which they will not be enhanced, because in some cases affordability will be limited. We cannot ignore the cost to the Exchequer of the armed forces pension scheme or any other scheme.
There has been a trend of improvement, and successive Governments of different political persuasions have introduced changes. The original armed forces pension goes back to 1831. I was going to look up the 1831 Act to compare it with today's arrangements and see how things have changed, but I think that would try the House's patience a bit. The forces family pension scheme was introduced in 1952, and it set out what widows of RAF officers and warrant officers who had served after
That first scheme created a category of people called class 1, who were considered for a pension when death occurred during or after service. The pensions were at a flat rate according to rank and did not vary by length of service as they do today. The rate was doubled if the death was accepted as having been due to service. That is very different from today's scheme, in which both length of service and rank are considered.
The scheme was quite harsh in a lot of ways, because it was an either-or scheme. No widow could qualify for both a pension from the Ministry of Defence on grounds that their husband's death was due to service—that was called a "special" pension—and one for other related service, which was called an "ordinary" pension. A widow qualified for state widow's benefits only subject to stringent conditions, and only if her husband's death was not due to service. The tests that were set, not just by the MOD but by the broader welfare service, were therefore harsh. The state benefit was only 10 shillings a week. For older Members, let me say that that is 50p in new money. The special pension for death due to service was more beneficial.
The widow of a man who had held the rank of warrant officer class 1 but did not serve after
As usual, the hon. Gentleman makes a useful intervention. If he uses the great services of the Library, he will find the information, but I do not have the answer at the moment. The key point is that whenever a new pension is introduced, there are always winners and losers. That happens today, too, and I will say more about that later.
There were stringent conditions relating not only to the husband's length of service, but to age, marriage and even the age difference between the man and the woman. The system was far from simple. The main requirement was that the marriage took place before retirement or discharge. The resultant pension was awarded subject to a means test. As Mr. Burns suggested, the state pension was taken into account.
Until 1939, for the RAF, both types of pension—special and ordinary—were paid out of the MOD vote. However, the responsibility for funding a pension for death due to service in the case of those who served after
The rate of pensions was not altered until 1950, but increases were awarded, with other service pensions, under legislation in 1944 and 1947. Improvements in benefits were considered after the post-war pay and pensions review and resulted in a new benefit called the family pension scheme, which was introduced by Command Paper 8741, payable from
It is interesting to note that the then Government considered whether improved family schemes should be financed by a contribution from the serviceman. I think that the right hon. Member for East Hampshire referred to that. We must remember that the schemes that we are considering are not funded. The individuals do not make contributions, although I accept that under the current scheme, people's pay awards are taken into consideration as an abatement, which sometimes causes concern and resentment in parts of the armed forces. It is sometimes difficult to explain the figures when calculating wage awards.
It was decided in 1950 that the non-contributory scheme should continue because applying a contributory scheme to the services presented too many difficulties. The right hon. Gentleman said that servicemen and women are a unique group, and I agree. However, there is some crossover with the police and fire service. Again, their schemes are non-contributory and those individuals put their lives at risk, but I accept that the armed forces are unique, and there is nothing comparable that we could consider. However, anyone who is involved in local government will know that those two schemes, which are both unfunded, are under a lot of pressure.
The main changes to the scheme were introduced for those who served after
Payments of a reduced pension called a modified pension—this is where the length of service and other conditions were satisfied—were made from MOD votes to widows who qualified for the war award from the then Department of Health and Social Security. Another important change was that the conditions requiring marriage to have taken place before retirement or discharge were relaxed, only to recognise the re-employment service given during 1939 to 1940, so that if a serviceman qualified for a reassessed pension and his date of marriage preceded the date of the completion of his re-employment, his widow could be considered for a pension.
The length-of-service conditions were also changed. In particular, the length-of-service conditions for the payment of a forces pension to a widow of a man below the rank of WO1 who died after discharge were: 22 years for a man at the rank of WO2 or a flight sergeant; 27 years for a sergeant; and 32 years for a corporal or below. That created a second category of pensionless widows, because the husband would be receiving a pension regardless of rank if he had completed 22 years' service after
The legislation covering rates has also changed over time. The ordinary pension was paid at a flat rate according to rank, with variations relating to length of service for widows of men below the rank of WO1. The flat rates attracted increases under subsequent measures to increase pensions, and they formed the basis of what was called the minimum rate, for which any widow whose husband had retired or been discharged before
The introduction of the modified pension was necessary because it became obvious that a widow qualifying for an ordinary pension plus state pension benefits, which had by then improved, could be financially better off than a widow of a man whose death was due to service, but who was receiving only the war award, as it was still known. Modified pensions were approved for war award widows who otherwise qualified for an ordinary pension. Again, there was a flat rate by rank, which was equal to approximately half the ordinary pension for officers, to two thirds of the pension for those at the rank of WO1 and to the special rates for lower ranks. Those pensions also qualified for the increase in benefits.
The war award benefits paid by the then Department of Health and Social Security were related to rank. There was no minimum length of service required, and the date of marriage was not a barrier if death occurred after
In 1958, the Grigg committee's recommendations were accepted by the Government and were introduced and payable from
The revised provisions at that stage gave widows an ordinary pension of a third of their husband's original retirement pay or pension, or a third of the invaliding pension for which he would have been eligible if he had died while serving. The modified pension, where death was due to service, was set at half the ordinary rate. Widows' pension attracted the benefit of an increased measure introduced since the date of discharge or death in service. The minimum rate could be paid as an alternative, where that was more advantageous.
It soon became clear that, because the new benefits were awarded to the widows of men who had died after November 1958, regardless of their date of retirement or discharge, anomalies were being created between the flat rate and the two-thirds award given to the widows of men with exactly the same service record and dates. So the widows of two men who had served for exactly the same length of time could be treated differently.
It also became clear that many widows of men whose death was due to service were worse off financially than they would have been, had their husbands died in normal circumstances. Approval was given to reassess the former, and to introduce a supplementary pension for the latter group. This recognised the unintended consequence of the changes, which had left a group of widows at a disadvantage.
Under the Grigg reassessment, as it was called, all existing widows' pensions were given the benefit of a third principal ordinary pension or a sixth principal modified pension, instead of the pension that they were receiving, where that was to their advantage. The scheme was designed to help those who had been disadvantaged, but the revised rates were paid from
The supplement was introduced to ensure that the total pension income of the widow of an officer who was receiving a war award would exceed the income that she would have received had her husband's death not been due to service by at least £26 a year. I have asked how that amount was chosen, because a lot of these figures seem arbitrary—
The hon. Gentleman has expressed it in old money. Why it was £26 a year, I am not sure. I asked my officials if they could dig down on that, but it has obviously been lost—perhaps somewhere in civil service heaven can be found the reason why that amount was arrived at. Obviously, it was seen as the right amount at the time. I might receive correspondence explaining why it was £26 a year from someone watching or following this debate who was involved in the issue at the time.
A constant revision and adjustment of all war award cases was the result, so each time the state benefit changed, changes in pension increase measures were introduced. It was also relevant if a child completed education. Here is an example of changes to state benefits impacting, because of the link, on changes to war pensions. The supplement for widows of a warrant officer was 7 shillings a week—in old money, the right hon. Member for East Hampshire will be pleased to hear—and it was 5 shillings for other ranks. In view of my audience in the House today, or perhaps those listening to or following our debate, I should have asked my officials to put all my figures into old money, as that would have been more useful to them.
The next major change was the adjustment in 1971. It became increasingly apparent from the size of the supplements we were paying and the increase in state benefits that the amount of modified pension needed to be improved. A financial comparison between the normal widow receiving ordinary pension from the Ministry of Defence plus state widows benefit from the then Department of Health and Social Security and those receiving a modified pension plus a war award from that same Department revealed a significant difference in supplement amounts. It was decided that the modified pension within the forces family pension scheme should be replaced by a benefit, reduced by the rank element in the war award, which continued the principle that the war award widows should be financially better off than widows of a serviceman of similar rank who "died normally"—well, that is what it says in my brief, but I question whether it is possible to die normally.
Yes, "natural causes" is better terminology than "normal circumstances".
The war award widow received from
The basic war award in 1979 exceeded the standard widows pension by about £6 a week. No doubt the right hon. Member for East Hampshire will be able to tell me what £6 was worth and what it could buy in 1979. The hon. Member for West Chelmsford is obviously too young to know what that could buy in 1979—I am flattering him, as usual.
A supplementary adjustment was also necessary for the widows of long-serving and mainly high-ranking officers who qualified before 1954 for a war award, but who also had as an alternative the right to an ordinary pension. The Grigg formula from the Grigg committee and the improved state pension resulted in their being worse off financially—another example of the unintended consequence of changes. Approval was given for a supplement to be paid by the Ministry of Defence equivalent to the amount by which the forces pension would have exceeded the war award.
There has only been one year since 1939 in which our armed forces have not been engaged in some sort of conflict. Does the war award refer simply to awards that can be attributed to second world war service, or to subsequent conflicts? If so, which ones? Does the Minister mean "attributable" widows, or simply widows of servicemen who have been killed in conflict?
As I understand it, the scheme refers to both. The distinction that we made, which I shall come to, relates to the 2000 decision, which, as the right hon. Member for East Hampshire said, made an exception for widows of those who had been killed in conflict. There was rightly a retrospective element to that. The defined nature of the individuals to which Dr. Murrison referred covers only a small number of people. I am trying to demonstrate that the pension schemes have changed over time. Those changes have been made by, I think, successive Governments of all political persuasions, to improve the lot of war widows, who all hon. Members would recognise are a special case.
The 1973 changes relate to the Bill. Following a Government plan to introduce occupational pensions for all employees, the half-rate benefit for widows was also introduced for the public service. Before that, there was no defined right to a pension. For many people in many jobs who worked for quite a while and left before accruing the necessary number of years there were no preserved pension rights.
There were three main benefits to the changes to pensions for servicemen and their widows. For half-rate pensions, for all service after
The second benefit was that the rate of pension paid by the MOD for the first 91 days of widowhood was to be the basic daily rate of the RAF pay or, for those already retired or discharged, a rate of payment at the date of death where it exceeded a half or a third of the entitlement.
The third change was a reduction of the qualifying period for a pension in cases of death to five years from the age of 18 for both officers and other ranks. The widow's pension was to be calculated as a proportion of a man's invalidity entitlement at that time. The invalidity pension rates were also enhanced.
A special rate—an attributed pension related to rank—not dependent on a minimum period of service could be paid where death in service was found to be attributable to service. The death gratuity was also changed. It was formerly payable only to widows of those who died in service. It became payable in all cases. The amount was to be equal either to the terminal grant or twice the maximum rate of retired pay for whichever rank had the higher award. That was another alteration, but the rules on marriage remain unaltered in the new legislation. Again, those benefits did not apply retrospectively; they applied only to widows of men who gave service after
Under the state scheme at this time, the Ministry of Defence was required to provide a pension payable from age 60 for those who had completed not less than five years of service. Prior to 1975, there was no right to preserved pensions in any public or private pension schemes, and most schemes had very restrictive criteria for awarding pensions. That was not just the case for the Ministry of Defence. The qualification for a pension under civil service arrangements was that an individual had to be over the age of 50 and to have served for 10 or more years. Those who left voluntarily before meeting those criteria lost rights to pensions. Armed forces occupational pensions were awarded only if a member had completed at least 16 years of reckonable service as an officer or 22 years of reckonable service in other ranks, and reckonable service was paid after the age of 21 for officers and 18 for other ranks. Engagements for shorter periods were not permissible.
I am aware that there has been a campaign on behalf of individuals who served during this period but did not get any pension. Last Saturday, I had the honour of meeting almost 300 veterans in Clumber park in the constituency of my hon. Friend John Mann. Several people raised the preserved pension issue, and we have to feel very sorry for some of these individuals who served their country. One person had been in the Navy for 12 years and had got no pension for that. Again, the changes were not retrospective in this case, and the argument put forward was—as it is again today—that retrospection would make that scheme unaffordable.
A group representing those who did national service has also been campaigning on this issue. Prior to 1975, there was no statutory provision requiring employers to allow a national serviceman's period of compulsory service to count towards an occupational pension. However, the notion of its contributing towards a state pension was made on behalf of those on national service terms, and the changes brought about by the 1973 legislation and the subsequent social security Act did not apply to those national servicemen.
I make the point about preserved pensions because although the right hon. Member for East Hampshire rightly raises the injustice that war widows feel, if he were to meet the individuals who did not get preserved pensions, he would find that they feel equally hard done by. Although it is hard to explain, I sometimes have to say to people that changing the legislation and retrospectively paying would be unaffordable. My hon. Friend Colin Challen has tabled early-day motion 46, and he has campaigned very hard to get recognition for this group.
The Minister is dealing with the Bill fairly, but it is very hard to explain these anomalies to certain people who are suffering from them. The scheme he talked about would clearly be unaffordable, so that is a pragmatic reason for not implementing it. But providing for this particular group of people is not unaffordable—or is it? We do not know because he has not yet given us any figures.
I hope that the right hon. Gentleman will wait with anticipation for my figures. What we cannot do, both with this group of widows and with others, is treat people in isolation, because there will be consequences, and not just for other Departments. All I am trying to demonstrate is that there is a group of pensioners, some of whom served their country with great distinction, who, through no fault of their own, have no pension entitlement, even though they have served for a number of years. I agree with him that it is difficult to explain all this. The gentleman whom I met last week at the Bassetlaw event had served for 12 years, and some of his service had been in Korea. He had been in some dangerous situations, and he is clearly somebody who we should thank for his contribution to the security of this country. Again, I am trying to demonstrate that if the Bill were to go through today as it stands, other groups would have strong cases to say that we should deal with them, too.
I am trying to demonstrate that all changes have unintended consequences and things can be hard for the individuals in question. Other changes that were introduced, with some exceptions in respect of short service, and air crew and others, meant that widows of men with preserved benefits entitlements would automatically qualify for a widow's pension, provided only that the marriage took place before discharge. Where their husband's death occurred before the age of 60 the terminal grant is payable to the entitled widow. Again, it is difficult to explain to some widows why those changes affected them. The appropriate benefits are increased across all measures from the date of discharge.
Some changes came in on
Another scheme that changed and had consequences in different ways was the children's pension. Such pensions were payable to widows or whoever had care of an eligible child. The benefits were provided at a flat rate until 1958; they were at a third of the rate payable to widows in respect of each eligible child, with no limit on the number of children who might benefit from that award. From
Benefits for motherless children—a horrible term—were at a higher rate of two thirds of the widows benefit from 1958, and a third of the father's pension from
The right hon. Gentleman referred to some of the recent enhancements, which continue the trend of successive Governments trying to improve the lot of our servicemen and women and of widows. He gave the example of the changes in 2000. Since then, benefits for widows and widowers where death was attributable to service have been continued on remarriage. Since March 2003, pensions and compensation have been made available to eligible unmarried partners for service deaths relating to conflict. I was pleased to be involved in the Bill that brought that in. It was clearly an anomaly that individuals who were not married did not receive a pension. I recall the case of a major who was killed and whose partner was not automatically entitled to a pension, so an exception had to be made. In September 2000, the concession was extended to deaths attributable to service, and since April 2005 death in service lump sums have risen to three or four times pensionable salary, depending on the individual scheme.
The introduction of the new pension compensation scheme in April 2005 was a considerable achievement at the time, when other schemes in other areas were under pressure to move away from defined benefits. That debate is still going on, and I know that Conservative Front Benchers are keen to advocate examining whether cuts or changes need to be made to public sector schemes. The benefits provided under the 2005 scheme compare favourably with public sector schemes and those in the private sector. That reflected modern practice and the increase in family benefits. However, the new benefits, like all the other changes that I have outlined, were not retrospective, continuing the position taken by this Government and others on changes to improve the lot of our armed forces.
May I turn to some of the more recent improvements for war widows? A number of improvements have been made to pensions provision for war widows in recent years, including, as I have already mentioned, the April 2000 changes that introduced the payment of a pension for life for those pre-1973 widows who were in receipt of a pension at the time. The change was not made retrospectively, as with other changes that had been brought in.
Additionally, the war widows' special allowance, which is now known as a supplementary pension, was introduced in April 1990 and is payable to widows who receive a war widows' pension in respect of the death of a serviceman who died or left the services before
A war widow's pension is paid only when death is due to service. It is not normally a survivor's benefit. The purpose of the measure was to bring the overall pension provision for war widows more into line with the provision for those widows whose late spouses' death were due to service on that infamous date of
For instance, prior to the allowance, world war two widows whose husbands' deaths were due to service received only a war widow's pension while a Falklands widow received both the pension and an attributable pension under the armed forces pension scheme of 1975. As at December 2008, more than 90 per cent. of all war widows were in receipt of the supplementary pension.
May I turn to the changes that have been made that apply to current members of the armed forces? There are two main pension schemes for current members of the armed forces. One is the armed forces pension scheme of 1975, known to the Department, which loves its acronyms, as AFPS 75—anyone who deals with the MOD knows that people need a dictionary of acronyms when they become a Minister. I am still trying. I was speaking to Lord Robertson the other day, who said that he failed in his time to get the Department to stop talking in acronyms.
The armed forces pension scheme of 1975 was closed to new entrants on
The reserve forces pension scheme—the RFPS, as it is known in the MOD—was also introduced on
I am pleased that the armed forces compensation scheme provides a tax-free sum for pain and suffering according to tariffs for injury, ranging over 15 sums from £1,155 to £570,000. Hon. Members may say that that is not pension, but it demonstrates that we, like other Governments, have made a change in how we compensate members of the armed forces. Again, that compensation scheme is not retrospective. The right hon. Member for East Hampshire and I have received representations from many individuals who were injured before the scheme was introduced. People might ask why their case cannot be considered under the scheme. That comes back to the point that whenever one makes a change, there will be a cut-off date. That is seen as unfair for the individual who is not eligible. It is a hard issue for any politician. I know that both he and I would like to do the maximum possible for our servicemen and women, who have fought on behalf of this country. It is not easy to explain about the arbitrary date that is introduced.
I have mentioned the legacy issue concerning preserved pensions. As I have said, my hon. Friend the Member for Morley and Rothwell tabled early-day motion 46, which has secured quite a lot of support. It, too, is about the retrospection of a scheme. It is important that we do not build false hopes. We should not say that a scheme will be changed when it is clear that the change will not be introduced if it is not affordable for this or any future Government.
I met Major-General Moore-Bick of the Forces Pension Society and my hon. Friend Michael Jabez Foster on
The right hon. Member for East Hampshire raised the issue of the one-third and one-half rates, which I have already touched on a little. Until 1973, widows of retired servicemen were entitled to a pension equal to a third of the pension of their late husband. As a result of the major changes made under the Social Security Act 1973, which improved not just armed forces pensions but other public sector pensions, and pensions more generally, the rate increased to one half from April 1973, but only for the widows of those in service from that date. As I have said, service personnel were given an opportunity to make a direct contribution and to buy in former service at the half rate. It is predicted that it would cost up to £30 million a year to change all pre-1973 armed forces widows' pensions to the half rate. The implications of such a change across Government would be considerable, because other public service schemes would look into the change.
I sympathise with the right hon. Gentleman. I find it frustrating that what we do in one Department has an impact on another. We might wish to introduce changes independently for our special group of servicemen and women, but those who advise me and others must consider the implications across Government.
I am grateful to the Minister. I am sure he needs to get off his feet for a minute in the middle of this marathon. The figure of £30 million that he quotes is the same figure as we were quoted last year, and it was quoted eight years ago. It must have varied because there are fewer widows. Where does he get it from? How many widows are there? How much would the proposed change cost per widow? If we knew that, we could better judge the Minister's allegation that it is not affordable or that it is not right.
I agree, but the issue of retrospection arises. I am happy to speak to him after the debate, to see what we can do to establish the number of widows. I met some actuaries last year. I foolishly asked to meet them, strange as they are. They come equipped with charts and so on. Actuarial figures are not an exact science, but they are based on the rate of people going to meet their maker and other demographic changes. If the right hon. Gentleman would like to talk to me afterwards, I will be happy to meet him.
The Minister destroys his own argument. If the figure is based on the course of nature, and we know that there are far fewer widows—they are all in their 80s—how has it remained at £30 million for the past six years? It has been plucked out of the air by an official who thinks that he will get his Minister to quote it and get away with it, but it is not satisfactory, is it?
Does not the right hon. Gentleman think it would be very unfair if, for example, we were to pay the increase now, but the estate of somebody who went to meet their maker a week before or a year before did not have a claim on it? It is not as simple as he suggests. Moreover, as I mentioned, members of the armed forces who served after
Post-retirement marriage is another problematic example that dates back to the Social Security Act 1975, which had implications for the AFPS and many other schemes. The Act required occupational pension schemes to introduce a pension for widows who married their husbands after they had retired from service. Provision was made in the armed forces pension scheme in 1975 to comply with the Act, but only widows whose husbands served after April 1978 benefited, and only service after that date was used to calculate the pension. For widows, the change was not introduced until April 1989, and then only for service from that date.
The one-off extension of entitlement to all current and deferred AFPS pensioners would, the right hon. Gentleman will be pleased to hear, cost about £50 million. Again, there would be a crossover effect on other public service schemes.
The other issue that affects pensions is commonly referred to as the pension for life. Following a change of policy in 2000, widows and widowers have been able to retain their pension on remarriage or cohabitation—a point that the right hon. Gentleman made. However, the change was extended only to those individuals who had not already remarried or cohabited. The changes that were made in 2000 were exceptional and for a special group of war widows, and they were not extended to the widows and widowers whose spouses had died for reasons unrelated to service life. That was a defined group of individuals to whom the right hon. Gentleman referred.
In 2008, the Government Actuary's Department conducted a detailed study of the costs of providing pensions for life for non-attributable widows, and found that the cost of providing pensions for future service would be about £14 million a year. That would gradually decrease, as the right hon. Gentleman suggested, as the number of AFPS pensioners fell—as they got older and the grim reaper took his toll. Using the rates in the 1975 AFPS, the retrospective costs would be about £70 million, but they might be as high as £350 million for the armed forces scheme. I asked for the figure throughout the public sector, and I shall be quite happy to share the information with the right hon. Gentleman afterwards. It would be about £3 billion, although I accept his point that, as years go by, it will decrease. Again, however, such a measure would be unfair.
No Government have retrospectively changed pension entitlements under the schemes. It is worth looking at the similarities between the provisions of the Bill and the changes that were introduced in the Pensions Act 1995—being an anorak, I spent last night trying to see the crossovers. The main clauses before us were tabled during the passage of the 1995 Act in order to do exactly what the right hon. Gentleman wants to do today. New clauses 11 to 14 were introduced by Mrs. Ewing, a Scottish Nationalist Member at the time, and they were voted on. Mr. Hague, who was a Minister in what I think was the Department for Social Security in 1995, resisted new clause 11, and it is worth noting what was said in respect of the other new clauses:
"With this, it will be convenient to discuss also the following: New clause 12—Post 1973 war widows— 'Notwithstanding any other enactment, a widow awarded a Forces Family Pension (Attributable) shall receive that pension for life.'. New clause 13—Post 1973 war widows (No. 2)— 'Notwithstanding any other enactment, a widow in receipt of a Forces Family Pension (Attributable) shall receive that pension for life.'. New clause 14—Post-retirement marriage: service widow's pension— 'Without prejudice to benefits already available under the terms of the Armed Forces Pension Scheme for widows of members of Her Majesty's Armed Forces with service beyond 6th April 1978, no widow of a member of Her Majesty's Armed Forces shall be disqualified from receiving a full pension under that scheme in relation to her late husband's membership of Her Majesty's Armed Forces by virtue of the fact that the marriage occurred after he had retired from Her Majesty's Armed Forces, provided that that marriage was before his 65th birthday and had lasted for at least three years.'."
The new clauses were eloquently proposed by Mrs. Ewing, and the Minister replying, the right hon. Member for Richmond, Yorks, said:
"New clause 11 seeks to make an exception for one group of public service pensioners—the widows of ex-service personnel—by backdating an improvement to the armed forces pension scheme that was made in 1973."—[ Hansard, 4 July 1995; Vol. 263, c. 248-49, 258.]
The provision of pensions for the widows of those who married after the husband had left the scheme was one of a number of major improvements to public service pension schemes made in the 1970s, but each of those improvements was introduced at a fixed and current date; none would have been affordable if it had been extended retrospectively to recognise all previous service. Sir Tim Spicer, the MP for Dorset, I think it was— [ Interruption. ] Sir Jim Spicer, the MP for Dorset, West. I thank the hon. Member for West Chelmsford.
The fact that those changes were not made retrospectively in the 1970s was an important factor for the Government then, and it is an important factor for the Government now, and for all future Governments. I do not usually agree with the right hon. Member for Richmond, Yorks, but he reiterated that not only Government but others had never engaged in retrospection. He clearly explained that if new provisions were introduced with retrospection, it would make them unaffordable. Mrs. Ewing, who was obviously quite a formidable lady, was not having that and pressed the new clauses to a vote. I am not criticising the right hon. Gentleman in any way, because I know that, like me, he is a party loyalist, but he voted against the new clauses. The Ayes were 41 and the Noes were 199. The then Government realised that they could not have retrospection, and that is relevant today as well.
There is a legal principle involved in retrospection, and all these things get tested in the courts—increasingly in the European Court of Human Rights. In January 2002, the Forces Pension Society backed a challenge in the European Court by a number of retired officers on the post-retirement and one-third pension issue. Their complaint was that the 1975 AFPS calculation of their widow's pension entitlement in the event of death, which was based on the date of marriage or retirement, was arbitrary and discriminatory. The right hon. Member for Richmond, Yorks made that point in his contribution on the 1995 Act. It takes me back to the point I keep making, that wherever we put the cut-off date there will be winners and losers on either side of it.
Interestingly, the Court ruled that the challenge was inadmissible as the individuals involved were not victims and had received their entitlement as set out when they retired. It ruled that the subsequent rule change had not altered the entitlement of those who had already retired. That is an important point. People join a scheme on the terms set out at that point. I accept that many of us, particularly younger individuals, never look at their entitlements in their pension scheme until later in life, when they realise that they might make it to retirement and get the pension that they have been paying into. However, that challenge to the scheme was not allowed by the European Court of Human Rights.
The Bill encompasses civil partners. As hon. Members know, the Civil Partnership Act 2004 created a completely new legal relationship enabling two individuals of the same sex to register their relationship. The Bill suggests that civil partners, as well as widows, be included in its remit. When registering a civil partnership, same-sex couples obtain legal recognition of their relationship and acquire the same rights enjoyed by married couples. We extended those rights in the Armed Forces Act 2006, and I remember that that was bitterly opposed at the time by Mr. Howarth, but common sense succeeded. The Civil Partnership Act came into force on
The situation for service personnel who were still in service when the Act came into force is straightforward: the whole of their reckonable service will be counted towards the pension of their civil partner survivor. The general guidance on the Act was that the entitlement of civil partners to survivor's benefit could be limited to service between 1988 and the date of the scheme member's retirement. However, for the armed forces pension scheme it was decided that as civil partners had an entirely new status, they would be allowed to count service from October 1987. The same was agreed for widows' pensions.
That improvement seems particularly important. Around the country there are not a huge number of people affected, but we come across a surprising number of cases in which people involved in same-sex relationships have left the forces, lived with their partner for 20 or 30 years afterwards and then died, and their partner has not received any benefit from their pension. I believe that the new benefit was introduced in 2003 or 2004, and it benefits all those people across the country, in some cases elderly ladies, who are not quick to raise their hands.
I am pleased that the Government have recognised and helped that group. The Conservatives opposed the 2004 Act, but I understand that the new Conservatives now support the measure, although some of the more regressive backwoodsmen possibly think it was not a good idea. However, my hon. Friend makes the good point that it extended benefits and civil rights to a group of individuals who did not receive them in the past.
The Bill means that those entering into a civil partnership would be eligible for a survivor's benefit, so those in service on
Much as I welcome civil partnerships legislation, we cannot escape the fact that someone would have to pay for the extension of entitlement, and the burden would again fall on the defence budget. In my experience in the Ministry of Defence in the past nine months, affordability comes up time and again. The Treasury keeps a keen eye on implications for the Exchequer, not just the defence budget.
There is some concern about reservists because the Bill discriminates against them, although I am sure that that is unintentional. I know that the right hon. Member for East Hampshire would never wish to do that because he supports all our armed forces, full time or reservists. However, clause 4, which is entitled "Interpretation", states:
"In this Act... 'armed forces' means the naval, military or air forces of the Crown, but not the reserve forces,... 'reserve forces' has the same meaning as in the Reserve Forces Act 1996".
The Bill would, therefore, albeit unintentionally, exclude reservists. I find it particularly unfair that it excludes a group which I know that the right hon. Gentleman supports, and which makes an invaluable contribution.
We will call that a score draw, but such matters could be considered in Committee, as the hon. Member for West Chelmsford suggested. The important point is that if the legislation is to make provision retrospectively, it must cover all groups, although I do not think that it was the right hon. Gentleman's intention to do that.
I have covered some of the issues relating to the retrospective nature of the Bill. The right hon. Gentleman quite rightly made the argument for the special group that he mentioned, but there are other areas of the Bill where, if we were to make a change, we would make a special group of others, as I think I have mentioned. Another group that we could argue for are those who were affected by what is called the pension trough, which relates to public service pension schemes that are final salary schemes, such as the armed forces pension scheme of 1975. That means that pension awards are made on the basis of an individual's pay rate at the time, which is again a topical issue.
There have been a number of troughs over the past 50 years, but a particular cause for concern among service pensioners in the mid-1970s, who still feel aggrieved and quite rightly make representations, was the fact that public sector salaries were restrained because of the then incomes policy. Several years of high inflation meant that the pensions of those retiring before wage constraints were lifted were overlooked. They are another group of people whom we might consider who feel strongly that they were disadvantaged through no fault of their own. They served their country, but they were affected by the then Government's incomes policy. The question is whether we should make a retrospective change for those individuals.
Last time I was at the Dispatch Box, I was replying to the Gurkha debate. Everyone would agree that we owe the Gurkhas a great debt of gratitude, but one of the issues raised in that debate was the retrospection of Gurkha pensions. As has been said—I know this in detail—the issue has been to the High Court on a number of occasions. The Gurkhas are a group of individuals whom the public support and for whom they have a tremendous amount of respect, but there is an issue with those individuals who served before July 1997—a date chosen because it was the date on which the Gurkhas became based in the UK, rather than in Hong Kong or other parts of south-east Asia. The pensions payable to Gurkhas post-1997 were incorporated into the armed forces schemes, with most of them in the new armed forces scheme of 2005, while the pre-1997 pensions obviously come under a different scheme. There is the question whether we should retrospectively pay any changes in the armed forces pension scheme to the pre-1997 Gurkhas, which is an issue that I have already raised, given the changes that we have made to allow more Gurkhas to come into this country, and which I think is due to return to court this year. The figure for that group alone is £1.5 billion.
Those two examples demonstrate the costs involved. They might not seem like much individually, but if we add them up, we see that they are large just for the MOD, and the implications across other Departments are also quite large. The provisions would also break the precedent relating to retrospection, which all Government have resisted doing. To do so would make most of the changes to the pensions would be unaffordable.
A further point that I would like to make relates to the plight of war widows. I pay tribute to Gill Grigg and others from the War Widows Association who have worked tremendously hard on behalf of war widows and given support not only to the older widows but to the younger ones whose husbands served in the conflicts in Afghanistan and Iraq. I always find it very humbling when I meet the widows of those who served in those conflicts. They take tremendous pride in what their husbands did, and we need to recognise that we should support them.
The right hon. Gentleman's point about the older war widows was correct. I would not want to give the impression that the pension is the only support that this country gives to them. As a Government, we can rightly be proud of the changes that we have made for pensioners, which also affect many war widows. The minimum income guarantee, for example, has raised a lot of pensioners out of poverty, and I know that the winter fuel payment, which all pensioners receive, is very welcome. We need to look at the question of widows' pensions and war pensions in the round.
The right hon. Gentleman has made some important points, but the aspects of retrospection and affordability make his proposals difficult to accept. Also, we should not raise people's hopes. I accept his point that the number of individuals involved is declining over the years, but we should not do any injustice to those who died before the changes were made. Any changes would involve an arbitrary date. I would not want this Government or any other to be prevented from introducing a change to pension entitlement by having to consider the cost of implementing the change retrospectively.
On a point of order, Mr. Deputy Speaker. As we come to the end of today's debate, may I make a serious point of order to you about the way in which we do our business in private Members' time? I do this because we now have a short window of opportunity during the interregnum between Speakers when you and all the other candidates are advocating the need to change some of the ways in which we conduct our proceedings. Today is perhaps one of the better examples of how ill we use our time in the House. This is not the whinge of a frustrated Back Bencher—I have been here too long; I know that the system is the system. We have sat here for five hours today, during which we first discussed a Bill that had universal approval across the House and which could have been dealt with perfectly well in 30 minutes or an hour. That was followed by this short Bill. It is a controversial one that the Government do not support—fair enough—but the matter could have been decided on a vote after an hour. That would have given us time to debate the Bill of my hon. Friend Miss McIntosh. That is how we should properly conduct private Members' business. The House has set aside time for Back Benchers to introduce legislation about matters that we think are important, yet it is frustrated not by the will of the House but by the Government saying, "We don't want this Bill to go to a vote, so we are going to talk it out." This is a system—
Order. I think I have got the drift. The right hon. Gentleman was making a point of order to begin with, but now he is moving away from it. Also, by continuing, he might deny me the opportunity to reply to him. Suggestions have been made regarding the use of Fridays, and how private Members' Bills should be dealt with. I might have been responsible for some suggestions myself, but it would be quite improper for me to elaborate on that at this stage.
Speaking as an aficionado of Fridays when I was a Back Bencher, and having secured the—
The debate stood adjourned (
Ordered, That the debate be resumed on