Armed Forces (Pensions and Compensation) Bill

– in the House of Lords at 2:30 pm on 8th September 2004.

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Clause 1 [Pension and compensation schemes: armed and reserve forces]:

Photo of Lord Morris of Manchester Lord Morris of Manchester Labour

moved Amendment No. 1:

Page 1, line 14, at end insert—

"( ) Any scheme established under subsection (2) must provide that there shall be no onus on any claimant under the scheme to prove the fulfilment of any conditions for a claim thereunder and that the benefit of any reasonable doubt shall be given to the claimant."

Photo of Lord Morris of Manchester Lord Morris of Manchester Labour

My Lords, I beg to move Amendment No. 1. In doing so, I will speak also to Amendment No. 15 which, like my first amendment, concerns the MoD's hugely important intention to shift the burden of doubt for benefits for service-related incapacity and bereavement away from the Secretary of State to the claimant. My amendment and the new clause have the backing of noble Lords in all parts of the House. They include three former Chiefs of the Defence Staff.

I have two interests to declare: as honorary parliamentary adviser over many years to the Royal British Legion and vice-president of the War Widows' Association. I speak also as the son of a war widow—orphaned when I was seven—and from personal experience of active service with Middle East Land Forces when Israel was still Palestine and British troops stood between rival terrorist groups that had little to learn from Al'Qaeda.

It well befits the importance of the issue addressed by my amendments that they are being debated first today. For the issue is one of profound significance for service personnel, as it is too for ex-service men and women, now in broken health, who were prepared to lay down their lives in our service, and the bereaved families of those who did so.

Nothing was more strikingly clear at Second Reading—and again in Committee—than the near consensual support for the purpose of this amendment and new clause. Nor could it have been made clearer that the ex-service community was at one in its support. Indeed, in this my 40th year in Parliament, I cannot readily recall that community ever being so totally united on any legislative issue as it is now in opposing the MoD's plan to switch the burden of proof from the Secretary of State to the claimant.

For 60 years that burden has rested not on the claimant to show that death, illness or injury was due to service, but firmly on the Secretary of State to disprove the case. All the claimant is required to do is raise a "reasonable doubt" for the claim to succeed. That this is the present war pensions scheme's distinguishing feature was made pikestaff plain by my noble friend when replying on 22 January to my Starred Question about the case of the late Major Ian Hill, following the coroner's landmark finding at the inquest into his death. "I can say", my noble friend told the House,

"that war widows' pensions are paid when death is deemed to be due to service, and that the widow has to raise only a reasonable doubt for claims to succeed".—[Hansard, 22/1/04; col. 1138.]

This most important safeguard in the existing war pensions scheme was the core of my noble friend's justification of the handling of Major Hill's case and clearly, in his view, the scheme's crowning virtue.

Yet now the MoD plans to abandon that safeguard: to dump "reasonable doubt" and substitute a "balance of probabilities" as the test of entitlement, so relieving itself of the onus of proof.

The House of Commons Defence Committee describes that fundamental change of policy thus:

"Under the existing scheme, it is for the Secretary of State to show beyond reasonable doubt that Service has not played any part in causing or worsening the condition for which a claim is made. Under the new proposals, the standard of proof is changed to a 'balance of probabilities' with the onus of proof on the claimant to make the case".

The Royal British Legion has documented the very serious effects of that for incapacitated service personnel and widows alike. Taken together with the proposal to reduce to five years the time-limit for making a claim—which the MoD also now proposes—it will cut the number of successful claims by 60 per cent.

That finding was based on scrupulous analysis of the vast range of casework undertaken by the Legion, acting for claimants in 93 per cent of all represented appeals at tribunals for war pensions, and totalling some 4,000 cases in the past year alone. Most came to the Legion in respect of claims rejected by the Veterans Agency.

The Government's response was to cast doubt on the Legion's analysis, while doing nothing whatever to produce one of their own. Attempting to allay criticism of their negative stance, they told the House of Commons:

"We have now joined with the Royal British Legion to consider the methodology used".

That was not true. They did not join in discussion with the Legion. Even if they had, it was up to them to produce a valid statistical analysis of their own, based on data readily available to Ministers.

Even now, as was made plain to the Deputy Chief of the Defence Staff (Personnel) in a letter Brigadier Ian Townsend, secretary-general of the Legion, sent to him on 6 September, the MoD appears prepared to correspond and talk only about new forms of words for implementing and facilitating a different burden and standard of proof. It has not been prepared to consult about the clear commitment to protect the basic safeguard—now vouchsafed by a standard of proof based on "reasonable doubt"—on which the ex-service community insists.

The Legion's legal adviser has told my noble friend that there has been no meaningful discussion whatever. Official pretence that a dialogue has been maintained with the Legion is just not so and is lucidly disposed of in Brigadier Townsend's letter.

Meanwhile, the MoD still wastes time bogusly claiming that a "balance of probabilities" test is more modern and fairer than "reasonable doubt". In fact, as noble Lords pointed out at Second Reading, that test is as "old as the hills". It was indeed replaced, for good reason, by "reasonable doubt" when that much newer test was brought into the war pensions scheme in 1943. So what the Government now propose is to turn the clock back 60 years.

The "reasonable doubt" test acknowledges that service in the Armed Forces cannot be compared with other occupations. It is unique, involving unlimited liability to defend the interests of this country, and the present test recognises that uniqueness.

The scale of the difference between service in the Armed Forces and other employment, as the House of Commons Defence Committee has said, is that:

"Armed Forces personnel can be asked to die for their country, which makes compensation for injury an entirely different matter for them than for civilians.

"There can be no proper basis for comparing the Armed Forces Scheme . . . with schemes for other workers who simply are not exposed to anything remotely similar to the dangers and uncertainties of service factors".

Service personnel are sent to the four corners of the globe at a moment's notice. They have no conditions of employment. The environment in which they serve is not a workplace governed by the legislation that safeguards civilian workers. They have no trade unions, as have civil servants and the fire service, nor a federation as do the police. They have no rights to take action on pay, working conditions or anything else. Indeed, when civilian public sector workers exercise their industrial right to strike, the Armed Forces can be ordered to do their work.

So much for the continuing insistence of Ministers that ending the safeguard of "reasonable doubt" is justified because no clear distinction can be drawn between service in the Armed Forces and public sector civilian employment.

Since Committee, my noble friend has maintained his plea of "lack of resources" for the MoD's failure to produce its own statistical analysis of the effect of dumping "reasonable doubt" on the success rate of pension claims. He wrote on 22 July to the noble and gallant Lord, Lord Bramall—who had left no one in any doubt of his disquiet with that plea—to say that,

"an exercise of this sort would be costly", without offering the merest guidance on the MoD's estimate of the cost of making one.

One unintended recipient of my noble friend's letter was the Royal British Legion, and I quote its reaction:

"Although it crudely misrepresents the Legion—subjecting us to totally unmerited criticism—the MoD did not copy Lord Bach's letter to us".

In a response to that letter, sent to noble Lords by Colonel Terry English, the Legion revealed that in fact the MoD had, after all, made an estimate of the financial effect of the change of policy on burden of proof, in very precise terms, at a meeting with it on 15 July—seven days before my noble friend's letter to the noble and gallant Lord.

Recalling the MoD's statement that the policy change was not about saving money, Colonel English writes:

"Yet at a meeting I attended at the Department, accompanied by the Legion's legal adviser, we were told by a senior official that, if the amendments tabled by Lord Morris of Manchester are accepted, it will cost the department £200 million."

He continues:

"Of course there is another way of stating that proposition, namely that if Lord Morris' amendments are not accepted, it will cost disabled ex-service men and women—and the dependants of those who lay down their lives—the same £200 million."

The disclosure of that figure—which has been confirmed to me both by Peter Knight, the Legion's legal adviser and its pensions officer, Tom House, who was also at the meeting on 15 July—has another deeply serious implication. It is that the MoD, while rejecting calls for it to undertake a statistical analysis of the effect of its proposal on grounds of cost, must in truth already have done one. Otherwise how could they have arrived at the figure of £200 million? Why could that figure not first have been given to this House when the subject of costs was raised at length by the noble and gallant Lords, Lord Bramall and Lord Craig, the noble Lord, Lord Redesdale, and others in Committee? And when was my noble friend first aware of the figure of £200 million?

It is the revelation of that figure of £200 million that gave the lie to any claim of meaningful consultation with the Legion on the department's policy on burden and standard of proof. After all, how can it be claimed that the department was consulting on the issue when it had already made a studiedly precise calculation of the outcome? Who wants to be "consulted" about a fait accompli? And had MoD officials any authority in talking to the Legion to alter the figure of £200 million?

Certainly none of us here can any longer be surprised by the depth of dismay felt in the ex-service community about official reaction to their concern over dumping the safeguard of "reasonable doubt" in deciding service-related incapacity and bereavement claims. Nor can there be any doubt where public opinion stands on a policy that prioritises saving on incapacitated ex-service men and women and bereaved families.

I conclude with a brief message from a noble Lord who cannot be here for this debate. It comes from my noble friend Lord Callaghan who, having been glad to hear of my amendment and new clause, wrote to say he would not support any change that could affect adversely the present arrangements about pensions in the Armed Forces. His short and moving letter is as eloquent a message of support as one could ever wish for in striving to keep faith with brave men and women who serve this country so well and, by so doing, ensure that right is done. I beg to move.

Photo of Lord Astor of Hever Lord Astor of Hever Deputy Chief Whip, Whips, Shadow Minster for Defence, International Affairs

My Lords, we, on these Benches support the amendment and the noble Lord, Lord Morris of Manchester, has made an excellent case for its acceptance. I am not sure that the MoD appreciates the depth of feeling felt by members of the ex-service community regarding this issue. As the noble Lord said, service in the Armed Forces cannot be compared with other occupations. It is unique, involving unlimited liability to the demands of the Crown in protecting this country's interests. The retention of "reasonable doubt" recognises that uniqueness.

Those serving in the Armed Forces are exposed to special risks to which others in the community, including civilian public sector workers, are not. Medical knowledge is far from perfect. The aetiology of many remedial conditions is unknown. The interaction of exposure to hazards and conditions faced by service personnel cannot always be proved by them, in an environment of active service, on a balance of probabilities. Do we expect this standard of proof of them?

This is not a question about a modern standard of proof, advancements in medical knowledge, improved record keeping or what is acceptable in a civil court. It is a question of whether noble Lords consider, as a change of fundamental policy, that the burden of proof should now swing in favour of the Secretary of State, to the detriment of the serviceman or woman.

Photo of Lord Redesdale Lord Redesdale Shadow Minister, Defence

My Lords, these Benches also support the amendment tabled by the noble Lord, Lord Morris of Manchester, especially the moving way that he presented his case. The issue, which was mentioned by many noble Lords at Second Reading, is that the proposal is seen as being cost-neutral—therefore there will be winners and losers. The £200 million that will be saved under the new burden of proof will go into some of the improvements in the scheme—and we support the scheme as it is set out because some aspects of it are valuable.

The question before us is whether the safeguards are sufficient considering the real problems faced by members of the Armed Forces, who put themselves in harm's way. That is a very different situation from many others who serve us in different areas of government. We have real concerns that the Government have perhaps gone too far on this issue, which is one that I hope the noble Lord, Lord Morris, will consider pressing this afternoon and give the other place a chance to look again at the amendment.

Photo of Lord Craig of Radley Lord Craig of Radley Crossbench

My Lords, I support the amendment tabled by the noble Lord, Lord Morris, to which he spoke so admirably. It must be realised that the cost-neutral arrangement was not just Treasury-inspired, but also reflected a view taken within the Ministry of Defence itself. 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. I do not support the concept of changing the burden of proof, as has been proposed, because it is right that the best practice for the Armed Forces, bearing in mind their special nature and the way in which they have been treated in the past, should be for the present arrangements to continue.

Photo of Lord Dean of Harptree Lord Dean of Harptree Conservative

My Lords, perhaps I may declare an interest as a war pensioner and I had some involvement in these matters in the 1970s when I was a Minister for war pensions. There is a big difference between the Second World War and now—and the threats which the men and women of our Armed Forces have to face. During the Second World War we were dealing, for the most part, with disciplined enemies who wore uniform and who, for the most part, observed the conventions of war. As we all know, we are now dealing with a much more dangerous and ruthless enemy who pops up all over the place and has no concern whatever for decent human standards. That is the big difference and I should thank the noble Lord, Lord Morris, and my noble friend Lord Astor, who have made clear that this difference means that the men and women in our Armed Forces are now exposed to much greater dangers than they were in the Second World War. This is therefore not the time to make it more difficult for them or their families to claim compensation.

Why do men and women join the Armed Forces even today? There are a variety of reasons, but two are always dominant. The first is pride in belonging to the best Armed Forces in the world and the second is the desire to ensure that the honour and integrity of Britain is upheld wherever their services are needed. Alas, there will be casualties, as we all know. It is a sad fact, but it is true. At least we can give to those who are casualties and to their families the knowledge that they will receive fair compensation, effective benefits and, as the noble Lord, Lord Morris, states in his amendment,

"the benefit of any reasonable doubt".

The Minister is a kind-hearted man and I am pleased to see him in his place. I hope that on this occasion his brief does not contain the word "Resist". He has heard from all parts of the House a powerful plea against making compensation more difficult to claim. I hope that the Minister will not disappoint us today.

Photo of Lord Ashley of Stoke Lord Ashley of Stoke Labour

My Lords, the unacceptable proposals from the Government will constitute a serious blow to our Armed Service personnel and their families and I am hard-put to understand why the Government insist on them. It may well be that such proposals are part of a disturbing pattern.

Wherever and whenever British servicemen are stationed—the Balkans, Afghanistan, Iraq and other countries across the globe and during the First and Second World Wars—Ministers of successive governments always say that they are special people doing a special job and they pay tribute to their tenacity, skill and courage. However, when it comes to discussing payments for injuries and deaths incurred in those special circumstances, it is a different story—the service personnel are not quite so special.

In the early 1980s, I began campaigning in the House of Commons for nuclear test veterans. I received negative answer after negative answer from governments. Year after year they maintained their refusals. They also maintained the bitterness and sadness of nuclear test veterans who feel that they are entitled to payment. However, governments did not see them as special people requiring compensation. I have no doubt that Gulf War veterans feel exactly the same, despite the years of efforts to give them a proper, reasonable income. If these government proposals are agreed to, we will have a fresh batch of disturbed, frustrated, angry, saddened servicemen. Will governments never learn?

The Government's argument that the proposals will lead to a fairer system is unsustainable, especially in the light of the British Legion's case, as deployed admirably by my noble friend Lord Morris. Colonel English and his colleagues have put forward clear arguments in favour of rejecting the proposals and voting for my noble friend's amendment. If we come to criticise the British Legion, we are being misled. The British Legion is a very reputable, solid, responsible organisation not given to misleading forecasts. I hope that the Government will accept its case, as do many of us in this House.

The special circumstances of the Armed Forces do not change simply because the Government have taken a fancy to what they call "modern practice". The special circumstances are, by definition, special circumstances and they impose an obligation on government to pay special awards. That is the simple, basic case and any chance to shuffle these people in with the clerks, doctors and nurses is bound to fail and is unconvincing.

The Ministry of Defence is primarily concerned with tactics—tactics over a wide range. I suggest that the best tactic for the MoD today is gracefully to accept this amendment, thereby avoiding a great deal of trouble for itself and for the men and women involved. The bonus in that will be that justice will be seen to be done and the people who will feel the results of the decision will be the servicemen and servicewomen.

Photo of Viscount Slim Viscount Slim Crossbench

My Lords, in Committee, the Minister was kind enough to brief me in great detail on the problems surrounding this amendment which was bound to be put forward by the noble Lord, Lord Morris of Manchester. I am afraid I was not convinced by his kind and lengthy peroration and I support the noble Lord, Lord Morris, in his amendment.

Since then, I have spoken to a large number of ex-servicemen from the war and since. The first thing they say is, "Of course, they don't trust us, do they? They are putting these new rules in place because they think we're trying to swing the lead and get away with it".

Perhaps like me, noble Lords have spoken to the excellent people in Blackpool who handle the payments. They say that one or two people do swing the lead and get through. My personal view is that it is better to pay them something and not persecute those who are completely honest.

This is an unhappy step. I hope that the noble Lord, Lord Redesdale, who has studied it in great detail and has experience of it, was right in saying that of course the £200 million will be put to good use elsewhere. I have a nasty feeling that the Ministry of Defence will breathe a sigh of relief and say, "That's £200 million off the amount of money we have been told to cut this year".

I am therefore not convinced and I ask the Minister and the Government to think again. The amendments that have been tabled are not political; they are cross-party. They are trying to do good and remember those who have been forgotten over the years in pensions and payment. I believe that they make a good Bill. No one is complaining about what will happen to the soldiers, sailors and airmen of today. They will get a good deal. I am with the noble Lord, Lord Morris, on this issue and I urge the Government to think again.

Photo of Lord Corbett of Castle Vale Lord Corbett of Castle Vale Labour

My Lords, it is both sad and wrong that the Government should proceed with this proposed change in the face of opposition from the Royal British Legion and all those on whose behalf it works. The fact is that the Government have failed to make their case. They have not convinced those at whom this new scheme is aimed that it is fair and just, as opposed to what is in place at present.

It is worse than that because, as my noble friend Lord Morris of Manchester said, undertakings were given in another place to work with the Royal British Legion. The Minister shakes his head. Does he want to say something?

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Ministry of Defence, Parliamentary Under-Secretary (Ministry of Defence) (Procurement)

My Lords, I do want to interrupt and of course I did not want to interrupt the mover of the amendment, who chose the words that he used. But I have to say that the very serious allegations made by my noble friend Lord Morris concerning the Ministry of Defence's behaviour in its dealings with the Royal British Legion are denied completely. I do not think that my noble friend, whose opinions I respect very much, should simply adopt what my noble friend Lord Morris of Manchester said on this matter. There is clearly a disagreement between the two parties about the way in which negotiations did or did not take place. But I think that he would be wrong and foolish to accept all that was said by my noble friend Lord Morris of Manchester. If he has other arguments, I suspect that they are more valuable than the ones concerning the Royal British Legion's attitude towards the Ministry of Defence at present.

Photo of Lord Corbett of Castle Vale Lord Corbett of Castle Vale Labour

My Lords, I hear what my noble friend has to say, but it brings me back to the first point. It is certainly not the view of the Royal British Legion that the Ministry of Defence has dealt with it properly over this matter. The Ministry of Defence rejects the arguments put forward by the Royal British Legion on the back of its analysis that 60 per cent of claimants who would have succeeded under the present rules are likely to fail under the new ones. I recall from copies of correspondence that I have seen that undertakings were given in the House of Commons to try to investigate that matter jointly with the Royal British Legion. That has not been done. As my noble friend—

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Ministry of Defence, Parliamentary Under-Secretary (Ministry of Defence) (Procurement)

My Lords, I am sorry to interrupt my noble friend again. It has not been done because the Royal British Legion cancelled the meeting at which it was due to be discussed. Since then, it has said in a letter that it has no intention of doing so. That is the reason it has not been done.

Photo of Lord Corbett of Castle Vale Lord Corbett of Castle Vale Labour

My Lords, again, I hear what my noble friend says but that is a completely different argument from one used earlier where my noble friend himself said in a letter dated 22 July—unfortunately it does not say to whom it was sent; we shall assume that it was to the Royal British Legion—that,

"the MOD had not offered to do its own analysis to compare with that of the [Royal British Legion]".

It goes on to say that that was mainly because of a lack of resources. Which is it? Is it not worth doing or do we not have the money to do it? I do not think that my noble friend can have this both ways.

As I said, my main point is the one with which I started: the Royal British Legion has not been persuaded with regard to this part of the changes which the Government propose to make, and I think that it is very wrong of the Government to persist in this matter without trying harder to obtain such an agreement.

I also say to my noble friend that all of us in this House and this Parliament are very proud to pay proper tribute not simply to what we ask service personnel to do on our behalf around the world but to the way in which they carry out those responsibilities. The nub of the argument in favour of the amendment is that we should take the same pride in circumstances where the health of service personnel is impaired or their medical condition worsened by carrying out those duties as we do in the way in which we compensate them for what happens to their health when they respond to the requests and the responsibilities which we place upon them.

I say to my noble friend that I think that all the voices around this Chamber should give him reason—I put it no higher—to doubt the wisdom of the Government in persisting in their opposition to the amendment.

Photo of Baroness Dean of Thornton-le-Fylde Baroness Dean of Thornton-le-Fylde Labour

My Lords, I rise with some trepidation because I do not fully support the speeches made this afternoon—not least that of my noble friend Lord Morris. I have taken part in this Bill from the beginning and, like many Members of this House, I too have received enormous amounts of briefing from the Royal British Legion. The impression I have had is that the Royal British Legion has not been prepared to move on this issue.

We know that it is a difficult issue and I count myself among Members of this House who want the very best for our Armed Forces—not least this new pension scheme. The scheme will cost money but it will improve the lot of service personnel and their families enormously—far more than at present. We are always being told that there are packages, and the term "cost neutral" is one that rolls off the tongue of the Treasury very easily. It is not one that I accept, particularly in regard to the defence of this country and our Armed Forces.

But the difficulty that I have with the amendment—I do not know whether my noble friend Lord Morris will push it to a vote today—is that we have not yet heard what the Minister has to say. I am concerned if the Royal British Legion has cancelled a meeting, and I have not had explained to me how the figure of 60 per cent is arrived at.

With regard to the other part of the argument, I think that there is a case for having a standard burden of proof. The Armed Forces should be treated specially and they deserve our support in this House, but there are other emergency services in this country and people who are not in the Armed Forces who work in extremely dangerous conditions resulting in injuries and lifelong ill health.

Therefore, I am rather concerned about the amendment. If it is agreed to, I am concerned about its impact on the Armed Forces (Pensions and Compensation) Bill. I am not saying that one should trade one off against the other; that is not a proper way in which to conduct oneself. Nevertheless, I think that in these situations one has to listen, and we must each sometimes take on board the arguments that are being made. I am not sure that the Royal British Legion has been prepared to do that. It is an organisation for which I have great admiration but it is the organisation which represents ex-service personnel.

Photo of Baroness Park of Monmouth Baroness Park of Monmouth Conservative

My Lords, first, we must remember that the forces do not have a trade union; the Royal British Legion is their trade union. Secondly, I entirely take the point made by the noble Baroness, Lady Dean, about other people who have problems.

But the point is that the problems of the Armed Forces are much greater. First, they are exposed to things such as Gulf War illness. That is not a very common illness in this country and it has taken them a long time to be heard on that issue. Secondly, precisely because they have no union and no voice, the Armed Forces need to be spoken for much more loudly. All the other groups can be spoken for by their various supporters. We are basically their trade union and we must ensure that, if this situation remains, the onus of proof rests on the Secretary of State. I say that not least because I understand that if people are to prove the point themselves, they will not be eligible for legal aid. What kind of man will, with great difficulty, try to fight the Government on the issue of Gulf War illness? Where will he get the money to fund that? Why should he have to fund himself?

It seems to me to be absolutely simple: this is a special case. We and, above all, the Royal British Legion are their voice. Other possible cases should be dealt with in their own way, in their own time and by their own pressure groups. There should be no doubt about this: we should support the noble Lord, Lord Morris of Manchester.

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Ministry of Defence, Parliamentary Under-Secretary (Ministry of Defence) (Procurement)

My Lords, I shall start by making a somewhat surprising statement and I shall actually mean it. I thank noble Lords for the excellent contributions that they have made and for the depth of feeling and passion with which they have spoken on this subject. I am particularly sorry to have interrupted my noble friend Lord Corbett and I am grateful to him for giving way to me twice. I believe it was important to make those points to him. I have listened very carefully to all that has been said.

I want to argue to your Lordships why it would be a serious error for the House to use its heart rather than its head and to vote for the amendment moved by my noble friend Lord Morris of Manchester. I start by noting that no single element of the new pension and compensation schemes can or should be considered in isolation. That is the danger of this amendment. The Bill provides for a comprehensive package of new pension and compensation arrangements suitable for today's Armed Forces. The arrangements include provisions that represent considerable improvements on the current schemes. Noble Lords will know what I am talking about when I mention very significantly improved widows' and widowers' pension benefits, increased death-in-service benefits at four times pay instead of the one-and-a-half at present—noble and gallant Lords and noble Lords have argued for that in this House for many years—provision for unmarried partners and better focus of compensation benefits on the more severely disabled.

Many of the provisions respond to concerns about the current arrangements that have been voiced over the years. But I stress that the two schemes can only proceed together. They support and complement each other in a balanced package—I am sorry to have to use that word—designed to meet the needs of Armed Forces personnel and their families in this century. Veterans' organisations want to see the package implemented as soon as possible because of the considerable improvement in benefits, and I venture to say that the Armed Forces want to see these schemes introduced as soon as possible because they are to their benefit. Certainly the Chiefs of Staff representing the Armed Forces support the schemes.

I have to tell the House that significant changes to any area affecting either the coherence or the affordability of the schemes would inevitably cause us to look again at the overall package and might mean that we are unable to progress with some or all of the features that it currently contains. What is on offer is an overall package that redistributes resources and that better meets our manning needs and employer responsibilities.

It is just not affordable to keep the best of the old and the best of the new. If the Bill were to fall the improvements would fall with it, improvements that are clearly highly valued by many within the ex-service community and, of course, by many noble Lords who have spoken in favour of the amendment. That is why this amendment about the burden and standard of proof is so significant. If it is carried, it will have severe implications for the rest of the Bill.

Photo of The Earl of Onslow The Earl of Onslow Conservative

My Lords, is that not called moral blackmail?

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Ministry of Defence, Parliamentary Under-Secretary (Ministry of Defence) (Procurement)

No, my Lords, it is not called moral blackmail, or a threat or anything like that. It is a fact of life and I have no doubt that Ministers from all governments, including that which the noble Earl was happy to support, have on occasions had to make speeches of this kind, saying to the House, when it was in a particular mood and had a particular view, that it should think very carefully before doing something that may have greater consequences than just the issue upon which it is voting. I hope that the noble Earl knows me better than to think that I would try to blackmail the House, either morally or in any other way.

Photo of The Earl of Onslow The Earl of Onslow Conservative

My Lords, I was not accusing the monkey of that; I was accusing the organ grinder.

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Ministry of Defence, Parliamentary Under-Secretary (Ministry of Defence) (Procurement)

My Lords, I am not sure I understand that, but I believe that is an even bigger insult. In fact, I am sure it is an even bigger insult.

Photo of Lord Hurd of Westwell Lord Hurd of Westwell Conservative

My Lords, the Minister used the phrase "a fact of life". It is not a fact of life. It is a fact of government policy and Parliament exists to control and, if necessary, to change policy.

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Ministry of Defence, Parliamentary Under-Secretary (Ministry of Defence) (Procurement) 4:15 pm, 8th September 2004

My Lords, the noble Lord is right. It is perhaps a fact of political life. Perhaps we should settle for that phrase. I do not expect to convince or to convert noble Lords to my point of view on the basis of what I have said so far.

Turning to the issue of the burden of proof, since Grand Committee we have looked again at our position and, frankly, in a spirit of compromise we have offered the Royal British Legion a revised statement of our position which I had hoped would go some way to meeting its concerns that our proposals did not represent a fair balance of responsibilities between the claimant and the department. The Royal British Legion has now responded and, disappointingly, does not appear willing to change its position or to accept it as a basis for negotiation. I realise that the revised statement falls short of its full aspiration and, of course, I respect the fact that it must make its own judgment, as must noble Lords, on such key issues.

Photo of Lord Morris of Manchester Lord Morris of Manchester Labour

My Lords, will my noble friend say what costing is attached to the proposals—as he calls them—that were made to the Royal British Legion? What would have been their effect on the figure of £200 million?

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Ministry of Defence, Parliamentary Under-Secretary (Ministry of Defence) (Procurement)

My Lords, if the noble Lord will give me a little space, in due course I shall deal with exactly that point in my speech. First, I want to take this opportunity to explain to noble Lords what we now propose. At the risk of giving a history lesson, I shall also show why the history of the burden of proof in the war pension scheme, while it has its place in that scheme, is not appropriate for a new scheme to be introduced in 2005.

Awards in both the war pension scheme and the new compensation scheme are made for claimed injuries and illnesses with a causal link to service. Decision making in both schemes involves consideration of the service and the medical facts of the case. Where an illness is claimed, that consideration is undertaken in light of contemporary medical understanding of its causes.

Critics of our proposals, not least my noble friend Lord Morris, have compared the new scheme with only the current war pension scheme. That is not a reasonable point of view. I remind noble Lords that a large part of the benefits paid under the current arrangements for death or injury due to service come from the Armed Forces pension scheme, which uses the same standard of proof, the same burden of proof, as we have proposed for the new scheme. In other respects the new scheme is more favourable to the claimant than the existing Armed Forces pension scheme; notably on time limits, where only conditions leading to medical discharge are currently eligible.

We have sought to replace current arrangements with something that ensures a fair outcome. That has resulted in arrangements that we believe give a genuine balance between the very wide gateway to eligibility of the war pension scheme—we believe too wide—and the unreasonably restrictive rule of the current Armed Forces pension scheme. Frankly, simply to standardise, as my noble friend did, on the war pension scheme and to ignore the rules under which we currently pay Armed Forces pension scheme benefits is not reasonable, nor would it be affordable. Critics of our proposals have to face that fact. They must recognise that the war pension scheme is only one part of the current arrangements and, for many of those seeking compensation, it is the smaller part of what they receive.

The proposed scheme is a new scheme which will differ from the war pension scheme in respect of the burden of proof. As noble Lords have heard, under the war pension scheme, the burden of proof for claims made within seven years of termination of service rests on the Secretary of State to establish beyond reasonable doubt that the injury, illness or death is not due to service.

Under the new scheme the standard of proof will be "balance of probabilities". Since Grand Committee, we have, as I have said, looked again at our definition of the burden of proof and have proposed to the Royal British Legion a revised statement of our approach. Under this approach, the merits of the claim will be decided on the basis of the evidence from all parties, including both the claimant and the department. This evidence will be weighed on an even balance rather than by giving extra weight to the evidence of one side, based on the position of the party putting it forward, whether that happens to be the claimant or the department. If the weight of evidence shows on balance of probabilities that the claim is substantiated, then of course it will succeed.

This new 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, 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 held in his official service records. The scheme rules will therefore impose a duty on the Secretary of State to obtain and make available to the claimant such evidence.

Any decision taken by the Secretary of State will be subject to an appeal to the PAT, which in turn will have regard to the entire body of evidence, whether provided by claimant or Secretary of State. This will place a responsibility on the Secretary of State to provide a credible response to any evidence submitted by the claimant.

It remains our strongly held view that a "beyond reasonable doubt" standard of proof is not appropriate to a no-fault scheme and is out of line with current good practice where evidence-based decisions are the norm. We are confident that the revised statement of approach on this issue will ensure a fair balance of responsibilities and our work has shown that no claim would fail where there was reasonable evidence that injury, ill-health or death was due to service.

Perhaps I may briefly talk about compensation culture. I do so for a reason—gently perhaps to chide the noble Lord, Lord Astor of Hever, who has made a telling speech in the debate. I have to say that I am somewhat surprised that there is such strong support from his Benches for this amendment as expressed so far—we of course have not been through the Lobby yet—given his own party's strong position with regard to the growing compensation culture. Frankly, it seems inconsistent to condemn the growing trend towards seeking compensation at every opportunity with one breath and then with the other to support the maintenance of a balance of a burden and standard of proof which would result in awards even though—and I shall be frank with the House—the likelihood is that service was not the cause of illness or injury.

Indeed, the noble Lord's colleagues in another place could not have made their position clearer, although they came to the same view as the noble Lord, Lord Astor—I must make absolutely clear that he is consistent with what was said. They made their views clear in their helpful contributions. For example, Mr Gerald Howarth said that we should get the balance right and should ensure that we simply do not pay out to undeserving people.

The shadow Secretary of State for Defence, the honourable Nicholas Soames, made the position clear at Second Reading. He said:

"We accept that the compensation scheme is in need of reform and we welcome the opportunity to re-examine the arrangements".

He made the point, as he was entitled to, that:

"Since the Government came to power in 1997 the amounts paid by the Ministry of Defence in compensation claims have risen by a staggering 50 per cent.—£34 million to £104 million. The war pensions and compensations scheme for the armed forces have always been generous and favourable towards the claimant, but"— and I ask noble Lords to bear this in mind—

"the increases in the last three years alone suggest that even the armed forces are no longer immune from the compensation culture".—[Hansard, Commons, 22/1/04; col. 1504.]

I give way.

Photo of Lord Redesdale Lord Redesdale Shadow Minister, Defence

My Lords, rather than entering into what seems to be a slightly political attack from the Front Bench opposite, I want to ask about something that has been niggling me. Regarding compensation culture, the saving of £200 million would be for false claims which would fail on that basis. Is that where the £200 million will be saved over the, I believe, 10 years? Otherwise, we are talking about £200 million, as the noble Lord, Lord Morris of Manchester, said, coming from claims failing that would be accepted at the moment. So, is the Minister saying that we are now actually getting rid of unjustified compensation culture, or is it just a change in the rules which makes the standard higher?

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Ministry of Defence, Parliamentary Under-Secretary (Ministry of Defence) (Procurement)

My Lords, I promise the noble Lord, as I told my noble friend, that I will come to the £200 million in due course and answer his questions.

I am not making a political point here. We are all concerned about compensation culture. Perhaps I am gently chiding the noble Lord, Lord Astor of Hever, but I hope in a friendly spirit. This is not a political debate in that sense. But there is a point about compensation culture. Everyone, using common sense and being realistic, knows that the Armed Forces are not immune from compensation culture and 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.

Photo of Lord Marsh Lord Marsh Crossbench

My Lords, I follow very clearly the point the Minister is making. The problem is that compensation culture, or lead-swinging as one noble Lord suggested, is rampant and vast in its implications, but it is primarily, I would have thought, at its best—and this is a fact we have to face—in the public sector; whether it is the police, local government or education. The examples where it is exploited are well known. Is there any suggestion that a similar burden of proof should be placed throughout the structure, as is being suggested in this case?

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Ministry of Defence, Parliamentary Under-Secretary (Ministry of Defence) (Procurement)

My Lords, I am grateful to the noble Lord. As I understand it, there is no similar burden of proof to the one found in the present war pension scheme, which we say is out of date and more prone to lead to a possible compensation culture. The noble Lord is right: it is not found elsewhere. I do not want to exaggerate the danger of this in the Armed Forces because I know, as everyone in this House knows, the immense standard of quality from top to bottom that we have in our Armed Forces.

But we must not hide our faces from reality, which is that if you do have a burden and standard of proof like this, it is a temptation, frankly, to claim under it rather than not to. There can be no doubt that it has been claimed under when it should not have been. That is the point that I ask noble Lords to consider and that I am trying to make.

I have provided to a number of noble Lords—those who came to the meeting that was advertised for lunchtime today—some kind of response to the points raised on this issue in the letter from the Royal British Legion. I know that I have gone on for quite a considerable time, but I think that noble Lords who propose and support the amendment realise that it is an important amendment. Let me say a little about the history, how it developed and why we say that the present burden of proof is no longer appropriate today.

The current burden of proof was introduced in December 1943 during the Second World War. During the early years of the war, the rules of entitlement were stringent, as they had been in the First World War, and the scheme only accepted injuries that were directly attributable to or aggravated to a material extent by service—and please note these words—"during the war". These rules required definite evidence in contemporary records or, where those were lacking, other definite evidence which would leave no doubt in the mind of the authorities that the disablement was due to war service. Noble Lords will immediately recognise how stringent those rules were, given the circumstances prevailing at the time.

So, faced with a large number of claims from combat and problems with keeping and accessing records, it became difficult to apply the existing rules. Changes were therefore made to remove the onus from the claimant and to relax the previously strict evidential requirements, such that the administrative burden of establishing a claim could be reduced and thus speed up decisions. But, I remind the House, eligibility remained confined to disablement due to war service. Even when the case law expanded the definition of injury to include wounds or disease, very few claims for physical or mental illness succeeded, as the accepted medical understanding was that almost all diseases were a matter of constitution and that their very nature meant that they could not be caused by service.

In 1947, the scheme was further modified to allow claims seven years after the end of service, to cover those who had left the forces early in the war and might otherwise be unable to claim. It was not until 1949 that the war pensions scheme was changed to cover all service, not just war service. When the scheme covered only war service, which involved mostly physical injuries, the requirement to prove that service was not the cause was just not a significant issue. However, once non-war service was included, it was possible for awards to be made for conditions that were almost certainly due to non-service causes, but for which the department just could not demonstrate beyond reasonable doubt that service factors played no part.

The whole House will have sympathy for anyone suffering an illness, but I cannot agree—I invite the House to say that it cannot either—that to pay compensation for conditions that are very likely to be unconnected with service is, frankly, an appropriate use of taxpayers' money. Nor is it fair to those who really have a condition, illness or injury due to service. Such cases might, for example, include cases where ageing, constitution or lifestyle—for example, diet—are by far the most likely cause.

I hope that I do not have to tell the House that I of course recognise and support the argument that we should recognise the unique, special contribution made by the Armed Forces by having a generous compensation scheme for injury or illnesses caused by service. Independent review of our proposals demonstrates that they will deliver this. Frankly, it is important that we concentrate what resources we have on cases where service is the likely cause and, in particular, focus our provision on the seriously disabled. That is what we propose. At the same time, I want to make clear that the new scheme is not a cost-cutting exercise. Our best estimate is that its cost will be broadly the same as that of current arrangements.

Frankly, we cannot afford to improve benefits for the more severely disabled and maintain the current, generous burden of proof. I invite the House to say that we have made the right decision—as I said, it is the head, rather than the heart talking—to make better provision for the more severely disabled, but not to pay benefits in those cases where the illness, injury or death is unlikely to have been caused by service.

Before I sit down, let me turn briefly to the Royal British Legion's claim that 50 to 60 per cent of current war pensions claimants might fail if seeking compensation under the new scheme rules. Let me at once say that I am a huge admirer of the Royal British Legion. I ought to be: I declare an interest as an associate member of the Lutterworth and District British Legion and proud to be so. But I fear that that cannot stop me from saying what I am obliged to say: my colleague, the Minister for Veterans wrote to the Royal British Legion, setting out our view of its analysis.

First, we are clear that the sample used was not representative of the total spectrum of claims. To the extent that there is an issue, it appears to relate to the scheme time-limits for claims, rather than the standard and burden of proof. We think that the Royal British Legion concluded that current claims would have failed where they had been submitted more than five years after leaving service, because they would fail to meet the time limit for the new scheme. We think that that is a false, mistaken analysis. People will be made fully aware of the time limit and, in most cases, will be able to adjust the timing of their claims to meet it. I remind the House that a robust communication strategy is an integral part of the whole new scheme.

In a small number of cases, claimants will not be able to do that because their condition is late-onset or because injury or illness prevents them submitting a claim, but we have recognised that latter problem and the new scheme makes specific provision for late claims in such cases, so we are confident that time limits should not be the problem that the RBL fears that they will be.

In Grand Committee, it was suggested that if we did not accept the RBL's findings, we should at least look in detail at its analysis. We have taken that point on board and, in July, we offered to examine some of the cases used by the RBL to establish the basis on which, in its view, claimants might fail under the new scheme. I must tell the House that, unfortunately, the RBL has now declined our offer. Given that we have not been given visibility of its work, we must retain our concerns that its study did not provide a sound analysis of how past claims would fare under the new scheme.

The important thing is that the new scheme has been designed to admit all reasonable claims, including those which, for good reasons, fall outside the time limit. We believe that it will deliver a fair result, as was confirmed to the independent review carried out by the company Watson Wyatt.

The suggestion that it would cost disabled ex-servicemen and women £200 million, is, frankly, not true. The cost of the scheme will remain the same; there is no saving. We have put the money into improving benefits for the most severely disabled and to eligibility, as against the current rules for attributable benefits under the Armed Forces pension scheme. The £200 million reflects broad assessments of taking the standard and burden of proof into the new scheme; it does not cover how the new scheme would affect current claimants, but, as I said, we are confident that the 60 per cent figure cited is an overstatement.

We can see no reason why the use of the normal civil test of proof in the new scheme should disadvantage any service person whose injury or illness is caused by service. We will be monitoring the new scheme extremely closely. The Minister for Veterans, in particular, will be watching very closely to see how the new scheme works. We will look at any cases raised by the ex-service organisations, including, of course, the Royal British Legion, where it is thought that reasonable claims have failed.

It is important, in discussing the burden of proof, that we do not lose sight of the overall package that the Bill is designed to deliver. The new schemes will introduce provisions that represent considerable improvements on what is currently available. Some of those improvements were as a direct result of dialogue with the ex-service community, where it has shared its concerns and aspirations. Wherever possible, we have addressed its concerns and the final package has been welcomed by the majority of the community.

The two new schemes can only work and proceed together. They support and complement each other in a balanced package designed to meet the needs of Armed Forces personnel and their families today. If there were to be a significant change to any area of the proposals, we would have no choice but to look again at the overall package; and there is no guarantee that we could deliver the schemes in such circumstances.

I end by reminding noble Lords of two things. First, the chiefs of staff, on behalf of the Armed Forces, are in favour of our proposals. I submit that that should have some influence on this House. I very much hope that the House will reject the amendment, for the reasons that I have outlined. I apologise to the House for taking so long to respond to the amendment.

Photo of Lord Ackner Lord Ackner Crossbench

My Lords, before the noble Lord sits down, could he explain on whom the onus of proof lies in his proposals? I am not concerned with the standard. The claimant brings the claim: is the onus on him to establish the situation or is it on the MoD?

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Ministry of Defence, Parliamentary Under-Secretary (Ministry of Defence) (Procurement)

My Lords, under the new scheme the onus would be on the claimant but obviously on the balance of probabilities.

Photo of Lord Morris of Manchester Lord Morris of Manchester Labour

My Lords, I am conscious that the House will want to see the debate concluded as soon as possible. In thanking all noble Lords who have taken part in the debate, I shall not be making any personal attacks. Meanwhile, I refute utterly the implication from across the House that my noble friend is a monkey.

It has been well said of him that my noble friend shows a personal commitment to helping the ex-service community. But, of course, Ministers are not always briefed to give their personal beliefs. Indeed, they do not always speak only for their departments—the Treasury is often involved.

In regard to what my noble friend has said about the Royal British Legion, I am sure that its officers will want urgently to consider the very serious allegations made against the Legion this afternoon. As at Second Reading and in Committee, my noble friend has found himself up against almost consensual support for the purpose of my amendments. My good and noble friend Lady Dean had some reservations, which I am sure she will want to discuss, with all her customary decency, with the Legion.

My information about what happened before, during and since their meeting at the MoD on 15 July comes from men of the highest probity. The standing in the ex-service community of Colonel English, of Tom House, its pensions officer, and of its legal adviser, Peter Knight, speaks for itself.

My noble friend referred to the letter sent by the Legion. It made abundantly clear that the Government wanted to talk about the form of words to do with the changing of the burden and standard of proof. It had already been made plain by Lieutenant-General Palmer, in his letter to the Legion, that there could be no question whatever of fundamental change in the Government's position. There has been no fundamental change, as my noble friend confirmed in his reply.

It was the revelation of the figure of £200 million that gave the lie to any claim of meaningful consultation with the Legion on the department's policy on burden and standard of proof. How can it possibly be claimed that they were consulting on the issue when they had already made a studiedly precise calculation of the outcome? Who wants to be "consulted" about a fait accompli?

The Minister has not made anything even approaching a case for regarding the Royal British Legion's position as unreasonable. There was long delay on the department's side in arranging talks. Everyone who has taken any part in these debates is aware of Ivor Caplin's letter of last December, and that he was asked by the Legion whether the MoD had carried out any analysis of its own. My noble friend, again this afternoon, has criticised the analysis carried out by the Legion—but it is the only analysis in town. Instead of negatively criticising the Legion's analysis, the Government should have carried out one of their own.

I am quite certain that many ex-service people outside this House will want to consider very carefully what has been said this afternoon and more especially the very serious allegations made against men of the highest standing and probity who serve the Royal British Legion.

I see no difference at all in the Government's position on this issue. They are talking about a changed form of words; they are not talking about any basic change on matters of substance. I must, therefore, seek the opinion of the House.

On Question, Whether the said amendment (No. 1) shall be agreed to?

Their Lordships divided: Contents, 183; Not-Contents, 128.

Division number 1

See full list of votes (From The Public Whip)

Resolved in the affirmative, and amendment agreed to accordingly.

Photo of Lord Astor of Hever Lord Astor of Hever Deputy Chief Whip, Whips, Shadow Minster for Defence, International Affairs

moved Amendment No. 2:

Page 1, line 14, at end insert—

"( ) Any order to modify a scheme established under subsection (1) may not be made until a draft of the order has been laid before and approved by a resolution of each House of Parliament."

Photo of Lord Astor of Hever Lord Astor of Hever Deputy Chief Whip, Whips, Shadow Minster for Defence, International Affairs

My Lords, Amendment No. 2 is a relatively straightforward amendment. We have seen details of the schemes going through by negative instrument. On the whole, they are satisfactory. However, there is still the capacity for subsequent modifications to be made without any parliamentary scrutiny. In theory, the Government could modify the whole scheme by changing from defined benefit to defined contribution. We argue that any modification should be by affirmative procedure. I look forward to some reassurance on that point from the Minister. I beg to move.

Photo of Lord Hodgson of Astley Abbotts Lord Hodgson of Astley Abbotts Shadow Minister, Economic Affairs, Shadow Minister, Home Affairs

My Lords, this is familiar territory for those of us who were involved in Grand Committee. But, as my noble friend has pointed out, a fundamental change is proposed; namely, changing a defined benefit to a defined contribution. Amidst all the controversy in the country about pensions as a whole, it is the ending of defined benefit and final salary schemes that is causing so much concern. Therefore, to allow such a major change to take place with merely a negative statutory instrument must be unreasonable. It puts a coach and horses through what the Government propose in the Pensions Bill.

As I pointed out before, Security, Simplicity and Choice makes it clear that major changes—I refer the Minister to page 69, paragraphs 99 and 100—should be consulted on and proper consultation and agreement should be obtained. On page 68 there is a very helpful guide where the Government set out how they see changes could be made from defined benefit to defined contribution and the sorts of procedures that should be followed—none of which are provided for in the Bill as presently drafted.

In Grand Committee, the noble Baroness, Lady Crawley, resisted the proposal for an affirmative resolution. She said:

"To do so would . . . make it hard to administer and maintain the scheme. It would be difficult to introduce routine changes or amendments quickly".—[Official Report, 28/6/04; col. GC5.]

I do not believe that the proposals in Clause 1 contain routine powers; nor, indeed, is it a routine change. For the reasons that I have just explained, it is a fundamental change. Defined benefit to defined contribution is a very fundamental change indeed. As regards the noble Baroness's wish to be able to do that quickly, I have no wish to see those sorts of things introduced quickly. If changes that might cause concern, upset and resentment are to be accepted, they need to be carefully thought through and scrutinised.

On those grounds, I think that the noble Baroness was wrong in the assertion she made to the Grand Committee on 28 June. I hope that the Government have taken some time to think again and will listen to my noble friend's proposal.

Photo of Baroness Crawley Baroness Crawley Government Whip, Baroness in Waiting (HM Household) (Whip)

My Lords, I hope that I can give noble Lords the reassurance that they seek even while I am going to resist the amendment. The approach that we have proposed, whereby the detailed scheme rules are set out in statutory instruments subject to negative resolution, is appropriate and consistent with practice elsewhere in public service schemes. As noble Lords will know, that level of parliamentary scrutiny is greater than for the current Armed Forces pension scheme where the scheme rules are laid out in Parliament simply for information.

I note that the amendment is focused on subsequent modifications to the new schemes, allowing the schemes which have already been subject to consultation and considerable parliamentary oversight to be introduced through negative resolution. I am grateful to noble Lords for the recognition that this latest amendment gives to that process.

However, I should like to reassure noble Lords that the Ministry of Defence has never taken advantage of the lack of parliamentary scrutiny schemes in the past with respect to the current schemes. We have introduced beneficial changes, including the introduction of widower's pensions, post-retirement widows' benefits and entitlement to preserved pensions. We have not, and would not, seek to introduce significant changes without informing Parliament unless that was clearly beneficial to the scheme members or simply implementing wider government policy already considered by Parliament.

As I said, we have adopted that approach to be consistent with other public service schemes; namely, police, fire service, teachers, local government and the House of Commons. While service personnel do not have trade unions to negotiate with them on such issues—a point which noble Lords have raised—successive governments have recognised that the interests of service personnel are properly represented by the chain of command and, in particular, by the principal personnel officers.

That arrangement includes well proven systems to identify and explore the views of serving personnel across the age groups and ranks and has been found to work well. Further, we will continue to work closely with the ex-service community who have been closely engaged during the reviews of our pension and compensation schemes and who can be proud of the positive influence that they have had on the final schemes. In addition, the consultation requirements set out in the Pensions Bill will also apply to the Armed Forces pension scheme, which will place an obligation on us to consult members in specified circumstances.

Perhaps just as importantly, the Armed Forces Pay Review Body has agreed to provide independent validation of the new Armed Forces pension scheme. As noble Lords will be aware, the AFPRB is a well respected body, which I believe should offer the reassurance that the interests of our service personnel will be well looked after with respect to pensions, as well as pay and allowances.

On that basis, I do not consider that it is necessary for the statutory instruments which modify the schemes created under Clause 1 to receive this greater level of parliamentary scrutiny. I recognise from our Grand Committee debate on that issue that noble Lords do not wish to make the routine management of the scheme more difficult; that is what I mean when I talk about quickness and speed. But, as drafted, the amendment would make it hard to administer and maintain the scheme. It would be difficult to introduce routine amendments in an efficient fashion. They are often beneficial and simply provide compliance with wider legislative changes that have already been agreed by Parliament.

The amendment would inevitably delay implementation of beneficial change and would require Parliament to set aside substantial blocks of time on matters that do not generally merit that level of attention. No other public service scheme adopts that approach. We see no reason for the Armed Forces scheme to be treated differently from those other public service schemes.

The noble Lord, Lord Hodgson of Astley Abbots, referred to the possibility of a change of pension scheme from defined benefit to defined contribution. There are no plans to introduce a defined contribution scheme as part of the Armed Forces pension scheme that is due to go live next year. While subsection (1)(b) gives the flexibility to provide money purchase arrangements, should that be a desirable or necessary approach for future pension provision, were the department ever to consider that necessary in the future, of course we would ensure that Parliament was informed and that any consultation requirements were met. With that, I hope that the noble Lord will withdraw the amendment.

Photo of Lord Astor of Hever Lord Astor of Hever Deputy Chief Whip, Whips, Shadow Minster for Defence, International Affairs

My Lords, I thank my noble friend Lord Hodgson for his support. His point on defined benefit and defined contribution was well made, and I too agree that any changes need to be carefully thought through and not rushed.

I thank the noble Baroness for her reply. I realised that she would resist this amendment, although she has given the House some reassurance, in particular by saying that the Government would not make significant changes without notifying Parliament. I shall read her response carefully in Hansard, but in the mean time I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Lord Astor of Hever Lord Astor of Hever Deputy Chief Whip, Whips, Shadow Minster for Defence, International Affairs

had given notice of his intention to move Amendment No. 3:

Page 1, line 14, at end insert—

"(2A) The Secretary of State may, by regulation, make provision for extra benefits to be provided for current members of the existing scheme during the transitional period.

(2B) For the purposes of subsection (2A), the transitional period is the time between the date of the new scheme coming into force for new servicemen and women and the date on which existing servicemen and women are given the opportunity to transfer."

Photo of Lord Astor of Hever Lord Astor of Hever Deputy Chief Whip, Whips, Shadow Minster for Defence, International Affairs

My Lords, in speaking to Amendment No. 3 I shall speak also in support of Amendment No. 10, tabled by the noble Baroness, Lady Dean.

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Ministry of Defence, Parliamentary Under-Secretary (Ministry of Defence) (Procurement)

My Lords, I am grateful to the noble Lord for allowing me to intervene, which I do not think will entirely surprise him. I have already discussed this amendment with the noble Lord and with my noble friend Lady Dean. In Grand Committee we said that we hoped to give a definite and definitive answer on Report to the very proper issues that have been raised in this amendment. However, I am afraid that across government we do not yet have the final answer, which we hope will be satisfactory to both the noble Lord and my noble friend, addressing the particular issues raised. I wonder if the noble Lord would be kind enough not to press his amendment today, but perhaps table it again at Third Reading next week. At that point it is hoped that we can deal with this matter once and for all.

Photo of Baroness Dean of Thornton-le-Fylde Baroness Dean of Thornton-le-Fylde Labour

My Lords, my noble friend's remarks were not sprung on us and I warmly welcome his statement. I certainly support the content of Amendment No. 3 and perhaps the amendment we shall table next week will bring together the elements of both amendments. I look forward to the Minister's response at Third Reading and I hope that we shall be able to make progress on this small but very important point.

Photo of Lord Astor of Hever Lord Astor of Hever Deputy Chief Whip, Whips, Shadow Minster for Defence, International Affairs

My Lords, I thank the noble Baroness, Lady Dean, for her comments. We should certainly discuss the form of an amendment to table at Third Reading next week. I also thank the Minister for his remarks. This amendment was designed to tease out further details on the transitional problem. We are happy that the Government see the need to address this and we look forward to returning to the issue at the next stage.

[Amendment No. 3 not moved.]

Photo of Lord Redesdale Lord Redesdale Shadow Minister, Defence

moved Amendment No. 4:

Page 1, line 14, at end insert—

"( ) Any scheme established by order under this Act shall provide mechanisms to ensure that—

(a) personnel in the armed forces who have completed 35 years' service but are not retained in service after their 55th birthday for service reasons receive pension benefits which are based on 66.67% of final salary, and

(b) a death-in-service benefit of four times salary is paid to surviving spouses or dependents."

Photo of Lord Redesdale Lord Redesdale Shadow Minister, Defence

My Lords, I apologise to noble Lords, but I was surprised at being called to move Amendment No. 4—

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Ministry of Defence, Parliamentary Under-Secretary (Ministry of Defence) (Procurement)

My Lords, I should apologise to the noble Lord. It is the fault of the government side. The noble Lord did not know that there was to be a kind of stately dance between the noble Lord, Lord Astor, my noble friend Lady Dean and myself on Amendment No. 3, which meant that it would not run its course today. We should have told him.

Photo of Lord Redesdale Lord Redesdale Shadow Minister, Defence

My Lords, I still have to apologise for being caught outside the Chamber, gloating over the earlier victory.

Amendment No. 4 is probing in nature. I want to ask the Minister to consider whether there is a possibility that the terms and conditions of the scheme could be changed by regulation. In the light of the emphasis on good practice to be applied to different aspects of the Bill, would it be possible for service personnel in the future to earn 66.67 per cent of their final salary rather than the present slightly lower figure? It is impossible to achieve the maximum salary percentage that is available in the private sector. I beg to move.

Photo of Baroness Crawley Baroness Crawley Government Whip, Baroness in Waiting (HM Household) (Whip)

My Lords, I had hoped that this amendment would be probing in nature because the noble Lord knows that I will resist it. However, I hope that I can give him some reassurance and explain why we believe that the present proposals set out in the Bill will be of benefit to Armed Forces personnel.

Service personnel who serve up to the normal retirement age of 55 and have served 35 years under the new AFPS will receive pension benefits comparable to those available under the current pension scheme and, as the noble Lord knows, paid much earlier that in most other schemes. Their dependants' benefits will be significantly improved. Those service personnel who wish to improve their own pension benefits will have the opportunity to purchase additional voluntary contributions; the extended accrual period of 40 years will provide sufficient headroom for them to attain benefits up to the current Inland Revenue limits referred to by the noble Lord, should they wish to do so.

The new Armed Forces pension scheme is designed to be equitable, treating personnel on an equal basis regardless of whether we can offer them a full career. This amendment would benefit only a limited number of service personnel who serve a full career, as the majority will have left before the new early departure point—that of 18 years' service and a minimum age of 40. It would therefore be counter to equality of treatment on the basis of age and would, in effect, discriminate between officers and other ranks where equality of treatment has been one of the key principles behind the new scheme. It might also have the effect of discriminating between men and women because of the shorter length of service enjoyed by most women.

The alternative of offering an improved accrual rate throughout service would be expensive to implement—we could be talking about a figure of £70 million—and it was agreed that other measures such as improved dependants' benefits should have priority.

I turn to new paragraph (b) of the noble Lord's amendment. The improved death-in-service lump sum of four times pensionable pay is an important feature of the new pension scheme. However, as I have made clear elsewhere, this sort of detail is more appropriately covered in secondary legislation. Nor would the amendment be viable in its current form. Additional material would be required to cover definitions of qualifying salary, of spouses and of dependants. Moreover, the noble Lord will realise that, as drafted, this proposal would exclude unmarried partners and partners registered under the new Civil Partnership Bill.

As was made clear to the Opposition during consideration of this issue in the Commons, such broad principles are not in practice viable in primary legalisation without supporting detail.

I hope that my explanation is sufficient to satisfy the noble Lord, Lord Redesdale, that he need not press his amendment.

Photo of Lord Redesdale Lord Redesdale Shadow Minister, Defence

My Lords, I thank the noble Baroness for that response. The purpose of the amendment was to deal with the issue of good practice, which is obviously one of the aspects that this scheme is trying to achieve. It would be wrong not to highlight the fact that, under the scheme, it would be extremely difficult to achieve the Inland Revenue limit. However, having taken into account the views expressed by the noble Baroness, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Lord Redesdale Lord Redesdale Shadow Minister, Defence

moved Amendment No 5:

Page 1, line 14, at end insert—

"(2A) The Secretary of State may by order establish schemes which award members of the armed forces expenses for—

(a) medical treatment,

(b) surgical treatment,

(c) rehabilitative treatment, or

(d) aids and adaptations for disabled living.

(2B) Such schemes, as set out in subsection (2A) above, shall be provided to cover expenses that arise wholly or mainly as a result of disablement due to service in the armed forces and in so far as subsections (2A)(a) to (d) are not provided for, otherwise than on payment of a charge by the member, under legislation of the United Kingdom."

Photo of Lord Redesdale Lord Redesdale Shadow Minister, Defence

My Lords, in moving Amendment No. 5, I shall speak also to Amendment No. 6. If the noble Baroness is to reply, she will be happy to know that these are probing amendments. She will not immediately have to say that she is resisting them but will be able to give the reasons behind the stand that I am almost certain she will take.

Amendment No. 5 refers back to the amendments that I tabled in Grand Committee. At that stage, due to my inabilities in drafting, there was a slight confusion about the aims of the amendments I brought forward. Amendment No. 5 seeks to ascertain whether the areas referred to in subsection (2A)(a), (b), (c) and (d) of the amendment will be covered under the scheme set out in the Bill. There is concern that certain areas may not be covered by national health trusts. I hope that the Minister will say that it is envisaged that such areas will be covered, even if not by local NHS trusts.

Amendment No. 6 is also a probing amendment which relates to time limits and to deterioration. I said in Grand Committee that I would raise this issue again because I believe that one aspect of the Bill is based on the standard view of actuaries and the standard view of deterioration. Obviously a great many disabilities, such as amputations and loss of limbs, will react in certain ways, and it can be taken into account how such wounds will progress over time.

The Ministry of Defence has denied the existence of Gulf War Syndrome, but the American Government have now taken account of it. If at a future date the British Government and the MoD take Gulf War Syndrome into account as an illness, will the scheme be sufficiently flexible to deal with this syndrome and similar syndromes that may arise in future engagements? It is not my intention to press the amendment or to put the Government in a position where they have to say that they do accept it as an illness. We have asked far too many questions for me to believe that we will suddenly get an answer of that magnitude today.

The issue also has to be considered in the light of the present threat of chemical and biological agents which may be developed in areas we have not yet seen. The countermeasures to those agents are a cause of concern because, even after so many years of testing by the Government, we have so little understanding of them. The purpose of Amendment No. 6 is to elicit whether the scheme has the flexibility to deal with the variable conditions that may give rise to different levels of deterioration, which may be not only physical but mental in aspect. I beg to move.

Photo of Viscount Slim Viscount Slim Crossbench

My Lords, I hope it will be helpful if I mention that subsection (2A)(c) of Amendment No. 5 refers to "rehabilitative treatment". In addition to the illnesses mentioned by the noble Lord, Lord Redesdale, there is also the issue of the disability of "stress" and the rehabilitation required for that. Without wishing to be rude, I believe that an investigation would show that there is not a great deal of experience of combat stress within the National Health Service, but there is one combat stress outfit outside of it. To be counselled by someone who has not been in combat is not very clever. I merely put that as a passing, helpful suggestion to the Minister.

Photo of Baroness Crawley Baroness Crawley Government Whip, Baroness in Waiting (HM Household) (Whip)

My Lords, I thank noble Lords for their contributions. I should say in general terms to the noble Lord, Lord Redesdale, that we believe that the scheme has the breadth and flexibility he was seeking in some of the examples he gave about the future stresses and operations that our Armed Forces may find themselves engaged in.

Amendment No. 5 seeks to introduce into primary legislation for the new compensation scheme the power to make regulations equivalent to Article 26 of the Service Pensions Order, the law governing war pensions. The proposed text of Amendment No. 5 is closely based on that article. We recognise the need to continue the provision of care in this area. However, with much of the legislation regarding war pensions remaining largely as it was during the 1940s, Article 26 is a product of its time. It was introduced when there was no universal system of support from the welfare state, including the National Health Service. Article 26 is therefore an outdated provision. Its equivalent is not needed in a scheme for the 21st century, when we have the opportunities that the National Health Service provides.

Since 1948, Ministers in successive governments have maintained that the National Health Service should be the principal route for treatment of accepted disabilities. War pensioners receive priority in the NHS for treatment of any injury or illness that was caused by service. We are seeking to secure the same approach from the Department of Health for beneficiaries under the new Armed Forces compensation scheme.

I hope that that goes some way to answering the inquiry of the noble Lord, Lord Redesdale, in regard to what happens outside the facilities of the National Health Service. We want to secure the same approach with the Department of Health to ensure that war pensioners receive priority within the NHS for any injury or illness caused by service.

The cross-departmental veterans' initiative confirms our commitment to ex-service people. It is addressing improved delivery of services for veterans, working with other government departments and the service charities and is dedicated to providing excellent service to veterans.

Under the new scheme, there will be no statutory underpinning of charity arrangements. There is no reason why such arrangements should be provided for in primary legislation. It would limit our ability to amend them as our understanding of the best way of caring for the conditions concerned evolves.

We understand that there are issues in relation to ex-service organisations such as Combat Stress. I should explain that "combat stress" is the name of an organisation as well as being something that many in our Armed Forces may feel. We recognise entirely the value of the work of Combat Stress and the department is in discussion with that charity and others to develop the most appropriate options for the future. I am aware that I said in July that we were in discussions. Having made inquiries of our civil servants, I understand that those discussions continued during the summer and were very active and very positive. They are designed to recognise the modern consensus in regard to the best approach to care in these areas.

I can reassure your Lordships that we see a continued major role for Combat Stress in the future, but we need to establish a way ahead that makes the best use of its valuable capabilities. That is why we are in discussion with Combat Stress at ministerial and official levels about how to take the work forward.

I turn now to Amendment No. 6. Noble Lords will be aware that the new compensation scheme will normally make full and final awards. This reflects the position of current medical and scientific understanding, where the level of knowledge is such that the evolution of most conditions can be predicted with a high level of confidence. The initial award will therefore be designed to take account of the expected level of worsening associated with the claimed condition, and of the development of likely consequential conditions. This generous approach enables us to maximise the award from the outset and also allows the injured person to plan and move forward with his or her life.

There is a common view that injuries and illnesses are almost bound to get worse over time. Today, with the advances in modern medical management and the emphasis on rehabilitation, that is often not the case. However, there will still be conditions where significant potential deterioration can be expected. However, this will generally be predictable and definable. Our tariff-based awards will therefore be set at a level that will take account of normal levels of deterioration from the outset. Quite properly, the scheme will not take account of the effects of ageing, constitution or other post-service factors. I am sure that noble Lords would agree that this should not be the case.

However, as has been set out in the detailed framework documents, the new scheme will allow for exceptional review. By "exceptional" we mean a situation in which there has been a significant material change in people's condition above and beyond that which is already recognised in the original award.

We believe that it is reasonable to have a time limit for claims for deterioration, albeit a generous one that makes sensible allowance for any complications to emerge, but which also protects the scheme from the risk of paying compensation for developments which are unrelated to service. An open-ended scheme would encourage an unnecessary cycle of repeated reviews and open the scheme up to claims for conditions caused by general ageing or by events unrelated to service.

The details of the provision will be set out in the scheme rules under a statutory instrument. It would not be appropriate to include this type of detail in the Bill. To do so would make it difficult to update the schemes, requiring, as it would, amendments to primary legislation.

The noble Lord, Lord Redesdale, spoke of Gulf War syndrome. I understand that the High Court will not rule on the existence of a Gulf War syndrome. It was very clear about this when it stated:

"This court is not in a position to express any views on the merits of the dispute as to whether, according to current medical research, Gulf War Syndrome is or is not a 'single disease entity' . . . It has not done so by this judgment".

I am afraid that I cannot give the noble Lord any more joy about that issue, but I hope that he feels that my response to his other points is enough to enable him to withdraw the amendment.

Photo of Lord Redesdale Lord Redesdale Shadow Minister, Defence

My Lords, I thank the noble Baroness for her full replies to the amendments. She has given me satisfaction with regard to what I wanted from them. I was particularly pleased to hear that talks are taking place with Combat Stress. I know that many noble Lords are very keen that the excellent work done by that organisation over so many years should continue. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 6 not moved.]

Photo of Lord Craig of Radley Lord Craig of Radley Crossbench

moved Amendment No. 7:

Page 1, line 16, at end insert—

"( ) The Secretary of State may by order provide for a widow (or widower)—

(a) in receipt of benefits based on existing armed forces pensions schemes, or

(b) whose spouse was in receipt of an armed forces pension, to be eligible for benefits available in the new pensions scheme from the date of its commencement."

Photo of Lord Craig of Radley Lord Craig of Radley Crossbench

My Lords, Amendment No. 7 is grouped with Amendments Nos. 9 and 14.

In earlier discussions on the Bill, Ministers relied on three arguments to say, "Nyet, nyet, nyet" and resist amendments to it. The first argument, which we heard again this afternoon, is that this is a paving Bill and it is therefore not suitable to include on the face of the Bill details about new schemes. These fall to be dealt with by secondary legislation. It has also been argued that to amend the Bill in this way would be too expensive as all public sector workers' widows would have to be included and, anyway, the scheme has to be cost-neutral, so there is no scope for increases without deductions elsewhere.

My amendment is drawn up in such a way as to overcome the first argument, and I also wish to challenge the other two. I wrote about them to the Minister on 20 July, but so far I have not seen a response. The Royal British Legion is not alone in failing to get responses from the MoD over the summer period.

My amendment provides for secondary legislation to tackle the dreadful legacy issues, which have been well aired on previous occasions. The Minister is very familiar with them. The House will have a chance to hear more about them in the debate on other noble Lords' specific amendments.

The opportunity for primary legislation on Armed Forces pensions is rare. So this opportunity to make provision for changes that might be accepted in tackling the legacy issues should not be missed. It seemed to me sensible to include an amendment to enable the Secretary of State at a future time to correct by order aspects of the legacy issues that are most deplorably unfair. I hope that the Minister will at least concede that this is a reasonable approach. My amendment leaves the initiative to the Secretary of State.

One of the inequities galling to servicemen and women is the knowledge that so far as the parliamentary pension scheme is concerned, the widow of a Member of the House of Commons receives an unabated pension, regardless of when she married her late husband. Surely it is not unreasonable to expect similar treatment for the spouses of service personnel. To claim that the parliamentary scheme is contributory whereas that for the services is not is a distinction without a difference. Service pay is abated to contribute towards the service pension, and that is calculated on the abated pay, not the notional gross pay. So there is no generosity in that.

Former state monopolies, such as coal, electricity and telephones provide for a spouse's pension, regardless of the date of marriage. This seems to be the accepted norm for today's pension schemes. Indeed, the Government have accepted it in other areas. So those who have paid their way—and some took the opportunity to qualify for a half-rate widow's pension—still find that there are very significant differences involved. For example, if a woman had married her husband before he retired, instead of receiving £11,700 per annum when he died, she would be entitled to a pension of less than £1,900—a difference approaching £10,000 per year. Figures such as these, about which many individuals have written to me—and no doubt to many other noble Lords and Members of the other place—make distressing reading.

The services deserve to be treated as a special case, and not grouped together with all others in the public service. So the claim that the cost would be around £3 billion is ridiculously misleading. I recognise that making good what those have missed out on is not realistic, but it would give enormous relief and help to those who are now well into their senior citizenship, and so reducing in numbers as the years go by, to be brought into the new scheme. The costs of this are marginal, relative to the £2.6 billion cash expenditure on the present Armed Forces pension scheme.

I hope that the Minister will accept that an amendment such as this, suitable to a paving Bill, is sensible and that he will give it his full support. It provides a gateway for dealing with legacy issues without recourse to new primary legislation—an insuperable obstacle for such a topic. I hope that Amendments Nos. 9 and 14 will go through but if they do not, they could still be considered at a later date if Amendment No. 7 were accepted.

If the Minister does not support this amendment, I sense that there is great resistance and no real intention to do more than consider the problems of legacy issues, and this rare opportunity to put them right will have been stubbornly resisted. I beg to move.

Photo of Lord Astor of Hever Lord Astor of Hever Deputy Chief Whip, Whips, Shadow Minster for Defence, International Affairs

My Lords, this is an important group of amendments and the House is grateful to the noble and gallant Lord, Lord Craig, for raising the important issue covered by his Amendment No. 7. Our Amendment No. 9 deals with the issue of another disadvantaged group—widows and widowers—who will be left out in the cold should the Bill go forward unamended. I refer to the existing non-attributable widows and those who will inevitably be created between now and the introduction of the new scheme.

Should those widows attempt to build a new life by marrying or cohabiting at some time in the future, they will have to forfeit their widows' pensions. All other widows—existing, attributable or non-attributable and survivors of registered partnerships in the new scheme—will keep their pensions for life. Widows whose husbands died for service reasons are quite properly compensated for the loss of their spouses through the compensation arrangements and they also retain their pensions for life. But a widow whose husband's death was not caused by service reasons receives no compensation. Such widows are additionally penalised by having to surrender their pensions should they remarry.

In Grand Committee, I expressed my doubts about the validity of some of the costs being quoted to implement this amendment. The Minister quoted a figure of £500 million for past service. Since this amendment only proposes paying widows' pensions for life from 6 April 2005, there can be no past service costs. The amendment does not seek retrospective action, nor does it seek to restore the pensions of those widows who have already re-married. In addition, the Minister quoted annual costs of £14 million. However, the MoD quoted £8 million—almost half the Grand Committee figure—in a memorandum to the Defence Select Committee on legacy issues for the Armed Forces pension scheme on 18 December 2002. Which figure is correct—£14 million or £8 million?

On average, only about 300 widows are created each year. Who is to know what proportion of that small number will remarry? All existing widows already have pensions in issue. There can therefore be no upfront additional costs. What we are talking about is a speculative guess. If the Minister's figure of £14 million is correct, it represents a tiny proportion—0.005 per cent of the £2.5 billion annual expenditure on the Armed Forces pension scheme.

How can these costs be found from within the scheme? This House has yet to see details of the transition arrangements for those wishing to transfer from the old to the new scheme, but it has already been stated in the House of Commons Defence Committee hearings that the Treasury is keen to prevent individuals from making windfall gains. That could mean that limitations are placed on the options available to servicemen—a clear breach of the principle of cost neutrality—and would result in savings for the Crown. That money could easily pay for this amendment while preserving cost neutrality. It would also right a demonstrable injustice.

In Grand Committee, the Minister told the House that,

"there is no case for treating Armed Forces' non-attributable widows differently from other public service widows",—[Official Report, 5/7/2004; col. GC61.]

but there is every justification for doing just that. The Armed Forces pension scheme is the only one in the public sector that draws a distinction between attributable and non-attributable widows. That makes the scheme different from all the others. There is therefore no justification for suggesting that this amendment would result in a requirement for read-across. Indeed historically, whenever improvements have been made in other public sector schemes, read-across has not been deemed necessary in the Armed Forces pension scheme.

This amendment seeks to resolve a long-standing injustice. The costs could be met from within the scheme, it is not retrospective and there need not be any read-across to the rest of the public sector. It is an issue on which the Government could easily concede.

Finally, I am also pleased to support Amendment No. 14 in the name of the noble Baroness, Lady Strange. We have reason to be proud of our servicemen. We acknowledge the demands that we place on them and the sacrifices that they are called to make, including laying down their lives for this country. When that happens, they leave widows—war widows who are also unique. I will leave the rest of the case to be made in an eloquent way by the noble Baroness, Lady Strange.

Photo of Lord Boyce Lord Boyce Crossbench

My Lords, I apologise to the House for not being here to support the noble Lord, Lord Morris of Manchester, on Amendment No. 1, which is also in my name. I was unavoidably detained in an engagement with the Armed Forces. I was pleased to see that my eloquence was not actually required in the event.

I now wish to talk about Amendment No. 9 and this small and tightly defined group of people who are already in receipt of a pension. It is worth repeating what the noble Lord, Lord Astor of Hever, said. They are already in receipt of a pension and the point about no upfront costs is an important one to register. As to what future costs might be, it is impossible to define. I shall be interested to hear what the Minister says in response to the noble Lord, Lord Astor of Hever, about where the costs will come from. It is not certain that all the widows will remarry anyway, which makes the group smaller still.

The new scheme recognises the injustice of not allowing non-attributable widows and indeed partners to receive for life the pension that their spouses earned— and rightly so. The principle was recognised in 2000 with attributable widows and widowers being allowed to keep their pensions for life, including with retrospection. I seriously believe that if this amendment is not accepted, we will create a new group of disadvantaged and aggrieved people for relatively little saving. Surely the Minister can agree to this small amendment by being magnanimous, not to mention taking this moral step.

Photo of Baroness Strange Baroness Strange Crossbench

My Lords, I am very grateful to my noble friend the Minister for writing to me about this amendment, and also for the helpful meetings with him. We all agree that there is much to be welcomed in this Bill for the new generation of war widows—and how we all wish there need never be one. But there does seem to be some uncertainty about detail and that concerns me, and my association. Given the lack of detail, the Ministry of Defence should give assurances that no widow or child under the new regulations will be worse off than under the old scheme. We have not seen detailed worked-out examples.

Turning to my amendment, in the year 2000 the War Widows' Association was extremely pleased to secure for its younger members—the post-1973 widows—the right to remarry or cohabit without prejudice to their attributable Armed Forces family pension. That has meant a great deal to those post-1973 war widows who have now had some freedom to rebuild secure family units with some financial stability, although in fact comparatively few of them have actually done so. However, the older ladies—the pre-1973 war widows—do not have an attributable Armed Forces pension, and so do not have this freedom. And some of them do want to remarry. I had a letter from a lady of 86 who has remarried and consequently lost her pension. Age is no barrier to love.

Those lucky enough to have the opportunity of sharing their old age with someone else must choose between loneliness with a pension or happiness without a pension. It is true that on relinquishing their pension, some will qualify for other state benefits, which will cost the Government almost as much, but they will have to apply for these themselves, and people of this older generation do not like losing their dignity by applying for state handouts. This is a strong deterrent to sharing your life with someone else; but if there were someone else at home, it might prevent some unnecessary and expensive hospital admissions. This would therefore be a benefit to society in general.

I believe that the Government think that it would be divisive to allow these ladies to keep their war widows pension. Why? As my noble friend Lord Morris of Manchester and my noble and gallant friend Lord Craig of Radley said, the services are a very special case. These war widows are tightly ring-fenced and clearly defined, and they are the only group in receipt of this award, so there would be no need to make a read-across. From April 2005, with the introduction of the new Armed Forces pension scheme, there would be no new war widows paid the war widows pension that we are talking about.

I also understand the principle of cost neutrality. Well, Minister, I have good news for you here: all these ladies are already in receipt of their pension, so no new money needs to be found. The only possible saving would be if a few old ladies sacrificed their pensions for marriage. Is it the Government's policy to claw back money from the most vulnerable groups in society, or indeed to penalise people for marrying? Surely not. Can the Minister tell us how many widows he estimates would be involved? We have tried, but we have been unable to get exact figures which distinguish whether the lady has remarried or whether the pension has ceased because she has died.

The Minister could also of course find further assurance for the future against charges of divisiveness and ageism were he to extend his generosity to the finite group of all pre-2005 widows. Beautiful though those ladies are, not many will have the chance of meeting another Mr Right, so even if some did remarry the saving would be minimal. There would of course be no cost. As we remember with such pride the dead of 60 years ago and those who have been killed in more recent conflicts, it is surely time also to remember their widows and all war widows whose husbands sacrificed their lives for us, and extend a loving, caring hand of friendship to them.

Photo of Baroness Dean of Thornton-le-Fylde Baroness Dean of Thornton-le-Fylde Labour

My Lords, I speak briefly in support of the three amendments. The noble and gallant Lord, Lord Boyce, in his most courteous way chided me about my stance and said that he did not believe that one could compare the Armed Forces with the other emergency services. I was comparing them—but about the burden of proof on the legal cases for injuries. Apart from that, I entirely agree with him, especially on this particular area.

I agree with the noble Lord, Lord Astor, that this is a very important part of the Bill. When our Armed Forces personnel go away on duty, they want to know that if anything happens to them while carrying out their duty to their country, their families will be looked after. If the Bill does not contain some of the measures that are in the three amendments, it will be a very much diminished Bill and not achieve what many of us want to see it achieve.

In conclusion, on Amendment No. 14, to which I have put my name, I could not say anything in addition or better than the noble Baroness, Lady Strange, who is also a friend. She put the case most eloquently—and I should not like to be in the Minister's position and have to refute the points that the noble Baroness is making.

Photo of Viscount Slim Viscount Slim Crossbench

My Lords, I support noble Lords on this amendment. In Committee, I asked the Minister and other members of the Government if they would consider carefully the state of the widows pre-1973, and the fact that all of them are living on one third of their husbands' pension. That is not a state of affairs that should be countenanced in this country today—particularly in view of the fact that, as the noble and gallant Lord said, the widows of Members in another place get the full amount.

The politest way in which I can put my remarks is that Parliament seems satisfied, in this day and age, for a section of our military widows to live on one third of their husbands' pensions. Those are widows whose husbands fought in the Korean and other wars, and it is—I am almost forced to use the word—wicked that Parliament should allow such a measure to be in place today.

That matter is slightly aside from the points made by the noble and gallant Lord. I support what has been said and I believe that the amendments are very important. Speaking as one who works almost entirely among veterans, in view of the concern that they have for widows—and the great work that the noble Baroness, Lady Strange, does for widows—I believe that there should be some initiative from the Government. I am not simply blaming this Government; I was just as curt to the previous administration on this matter, who were just as much to blame for this sort of thing as are the present Government.

Even if the Minister cannot agree somewhere, somehow, within the Ministry of Defence, somebody should put his mind to the problem. There might be a bit of a crack at the Members of the other place to think not only of themselves but of others. In my generation, we were taught as officers that, come the end of the day, one looked after the mules first, because they carried the heaviest load. One then looked after one's men—and then, if there was time, one looked after oneself. I must say that I find Members of another place rather good at looking after themselves first, and to hell with the rest of us.

Photo of Lord Morris of Manchester Lord Morris of Manchester Labour

My Lords, like my noble friend Lady Dean, I hold the noble Baroness, Lady Strange, in high admiration. I have the very good fortune to work with her in the War Widows' Association of Great Britain, of which she is president. She is extremely proud of its membership, as I am too as vice-president.

As my noble friend Lady Dean said, the noble Baroness has made a compelling case for the amendments. She speaks not only with commitment but also great authority in this policy area. I know that the Forces Pension Society has done a very great deal to sustain noble Lords who have been supporting the purpose of these amendments. I pay tribute to them as well. With regard specifically to Amendment No. 9, the important point to emphasise is that it is about ensuring equity all across the scheme. I hope very much that the Government will accept that there is very strong feeling in all parts of the House in support of these amendments, and that they will offer a positive response to them this evening.

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Ministry of Defence, Parliamentary Under-Secretary (Ministry of Defence) (Procurement)

My Lords, I am grateful to all noble Lords who have spoken to these three important amendments. The noble and gallant Lord, Lord Craig, began to address the House in Russian, when he said nyet, nyet, nyet. For those noble Lords who understand basic Russian, as he and I do, he may be somewhat pleased to hear that my response is in the spirit of, "Nyet, nyet and da". For those who do not speak basic Russian, that means that the Government will make a concession on Amendment No. 14. I shall come to that in due course.

I turn first to Amendment No. 7. I apologise profusely to the noble and gallant Lord if his letter of 22 July has not been replied to. His letter of 19 July has been. I have checked, so far as I can while I am in the Chamber, and I am told that the officials know nothing of another letter of 22 July. I shall make inquiries immediately the Report stage ends and come back to the noble and gallant Lord. I am very sorry that the letter has not been replied to.

As regards Amendment No. 7, the new pension scheme has been designed to be broadly cost neutral. The cost of benefit improvements in some areas, such as those for widows and dependants, has been offset by a reduction in the value of benefits elsewhere, for example, the immediate pension.

Amendment No. 7 would enable the Secretary of State to provide current and future widows and widowers of current scheme members with the best of all possible worlds. If the widows and widowers of members were to be allowed to compare the benefits they receive under the current pension scheme with those under the new scheme, and to select accordingly, that would frankly increase the cost of the new scheme very significantly. It would be unreasonable to allow individuals to have a substantial improvement to their benefits when their spouse had either not accepted the balancing trade-offs in the new scheme when an active member of the current pension scheme or had never had the opportunity to do so as he or she had retired before the new scheme was introduced.

There is the further point that given the conditionality of the wording of Amendment No. 7, even if the amendment were passed there would be no immediate entitlement. Were a future government to decide to make such a change, they would not require the proposed change in primary legislation to do so. The value of the amendment is therefore unclear to us. On that basis I am afraid that I cannot agree the underlying objective of the amendment nor the need for it in terms of enabling a future government to make such a change.

I turn to Amendment No. 9. I thank noble Lords who have spoken to the amendment. The noble and gallant Lord, Lord Boyce, spoke ironically of his eloquence not being needed as he was not present to speak to Amendment No. 1. Thank goodness he was not here; with his eloquence goodness knows what the result would have been. The noble and gallant Lord has spoken with great eloquence on the issue that we are discussing, not just today but at a social gathering that we both attended some time before the Summer Recess. However, in spite of what he said to me on that occasion, and in spite of the strong arguments that have been put today, I am afraid that I must resist Amendment No. 9. I shall try to explain why that is.

The proposed new Armed Forces pension scheme includes provision for non-attributable widows' and widowers' pensions to be paid for life. I stress that existing members can transfer to the new scheme if they wish to benefit from this provision. The new clause proposed here would extend this to current widows and widowers from April 2005, who are not provided for in the new scheme.

For the majority of public service schemes, non-attributable widows' and widowers' pensions still cease on re-marriage. This approach reflects to some extent the view of society at the time the schemes were established that wives could expect a level of financial security on remarriage so the pension of their deceased husband could safely be withdrawn. As with the Armed Forces current scheme, these pensions can be reinstated on second widowhood or divorce if the individual is otherwise financially worse off than when first in receipt of their Armed Forces pension. While we are able to make changes for the future under the new Armed Forces pension scheme, paid for by adjusting benefits elsewhere in the new scheme—that is something that I could have said with more certainty before the vote on Amendment No. 1 this afternoon—changing an arrangement for the current scheme would carry with it no offsetting saving. It would therefore be an expensive change, with retrospective effect, which together would make such a change unattractive to a government of any colour.

The debate in Grand Committee on this same amendment focused on the cost of such a change and the extent to which widows of Armed Forces personnel could be seen as a special case in this regard as compared to other public service employees. Since then I have written to a number of noble Lords and I think that I should place some of the comments that I made in those letters on the record. First, as regards cost, the one-off cost of £500 million for the Armed Forces cannot be avoided. It is a cost that would need to be paid even if payments were to be made from a future date. It reflects the relatively large numbers involved from the World War II and conscript era, and the way in which seemingly small numbers each year mount up. The overall cost of a concession would be even higher if there were to be, in addition, any backdating of payments. The figure of £500 million represents the past payments that the MoD would need to have made to the Treasury each year to buy this future widows' benefit for our members throughout their service. We have for many years paid annually the agreed costs of the benefits provided by the scheme through something called the accruing superannuation liability charge, but the costs of non-attributable pensions on remarriage have not been a part of that cost.

A number of noble Lords made the point at Grand Committee and today that, as the affected widows were already in receipt of pension payments, a concession would cost little. This is a highly seductive, but I argue incorrect, argument for the reasons that I have just tried to explain. While it is true that, if a widow were not to remarry we would continue to pay her pension for life, the assessed costs of the scheme on the basis of which the MoD pays the accrued superannuation liability charge takes into account the expectation that a certain proportion of non-attributable widows will remarry and thus lose their benefits. Thus a change to this policy would have a long-term impact on the costs of the scheme.

Affordability is placed in even sharper focus when the issue is looked at across the public services as a whole, which the Government consider is unavoidable. The fact that members of the Armed Forces are held in the highest regard by this House and by all sections of the community is not in the end, I am afraid, a relevant argument in this context. The special circumstances of service life are, in my view, fully recognised in the high value benefits we are making available under the new pension and compensation schemes to the widow, widower or partner of a service person who dies of causes related to service, known in the jargon as an attributable death. These, exceptionally in the public services, will be paid for life.

I am aware of a further argument from some noble Lords that the pressures of service life justify different treatment for non-attributable Armed Forces widows; that is, where the spouse has died from causes unrelated to service. At the end of the day we cannot agree with that, nor, I am sure, would those affected elsewhere in the public service, for example, in the police force or in the fire brigades, who might reasonably argue that the pressures of their jobs can likewise put stresses and strains on an individual's health and well-being. They may be different stresses and different strains but they are still potentially very difficult to deal with. The Government do not believe that special treatment should be extended to circumstances where the pension relates to a death which is not due to service. In this case we could not in all fairness treat differently the widow of a service person and the widow of, say, a fireman, a policeman, a civil servant or a teacher. There is no basis for paying pensions for life in one case but not in the other, and if there is a basis it is not sufficient. No special case can be made for Armed Forces widows where a death is age-related or lifestyle-related, or due to a congenital susceptibility. The cost of making that concession for the public services as a whole is estimated at £3 billion, which noble Lords will understand is not currently affordable.

In summary, even if the Armed Forces were to be treated on the issue as a special case, the MoD cost of changing the policy for the estimated 60,000 service widows and widowers affected is calculated by the Government Actuary to be £14 million a year—that answers the question of the noble Lord, Lord Astor—with a one-off cost for past service of some £500 million.

I come to a vexed question with a lot of feeling behind it. The noble Baroness, Lady Strange—I hope she will not mind me using her name in vain—argued strongly four years ago, in 2000, in debates on the then Child Support, Pensions and Social Security Bill, that attributable widows were different. The Government agreed and made exceptional change to the regulations to allow them to remarry or cohabit and keep their attributable widows' pensions. No such special case can be argued for extending that benefit to current AFPS members and those already bereaved.

I turn finally, and perhaps more happily, to Amendment No. 14, spoken to today by the noble Baroness, Lady Strange, and in Grand Committee by my noble friend Lady Dean. I shall resist the amendment as drafted, for reasons that I will explain, but I want to make it clear from the start that I am happy to support the intent behind it and will make proposals to noble Lords.

The proposed new clause seeks to amend war pension legislation to enable war widows' pensions to be paid for life for a specific group of widows and widowers. Article 42 of the service pensions order, which contains the rules of the war pensions scheme, provides that payment of war widows' pension ceases on remarriage or cohabitation. That rule applies equally to all war widows and widowers. My main argument against the change in the form in which it has been proposed is that the change might entail retrospection to benefit those who have already remarried or cohabited. Noble Lords will recognise the cost implications of such an extension, which would make the change wholly unaffordable.

Following eloquent presentation of the amendment both today and in Grand Committee, however, the Government have given very careful consideration to the issues behind it. As noble Lords will be aware, since October 2000—I have just referred to the matter—we have allowed widows and widowers under the Armed Forces pension scheme whose spouse died from causes related to service to keep their pensions on remarriage and cohabitation. In view of the exceptional position of war widows and the special needs of those whose spouses' service ended before major improvements were made to occupational benefits in 1973, we accept the argument for a change in that respect. It will apply only to future remarriages for widows and widowers whose service spouse left service or died before 1973. It would not be affordable to make the change retrospective for past remarriages.

As with the October 2000 change, the change will apply only to those who remarry or cohabit after the date of change. That means that it is not a retrospective concession. However, it means that those war widows who have already remarried will not benefit, although, should their position change and their pension be reinstated in future, the new rules would apply to them. I am happy to place on the record the Government's commitment to make that change for war widows. I suggest that we do it through an amendment of the service pensions order; there is no requirement to amend any primary legislation. I hope that the House will welcome that concession. The noble Baronesses, Lady Strange and Lady Dean, and many others, including the noble Lord, Lord Morris, have worked for it for a long time. I hope that they will accept credit for the part that they have played in changing our minds and achieving the concession.

Photo of Lord Craig of Radley Lord Craig of Radley Crossbench

My Lords, I thank all noble Lords who supported or spoke to Amendment No. 7. I suppose a nyet on my amendment has been balanced by a da for Amendment No. 14, and one da a day is better than nothing. However, I am left more than a little confused. Once again, we have had assertions that costs will be very significant, without any indication of cost. I do not find that acceptable. I hope that, when we return to the matter at Third Reading, it will not simply be said again that costs are very significant, as it is difficult to make any assessment of the real position when faced with that assertion.

I was interested when the Minister said that, for some of the issues on widows, primary legislation would not be required to help them, and that help could be given through secondary legislation. I shall read carefully what he said; I am not quite sure that I followed him clearly.

I am more than a little confused still about the £500 million. We have Sir Humphrey-speak here, dealing with internal bookkeeping between the Treasury and the Ministry of Defence, which does not seem to speak very highly for joined-up government. Again, I should like to read what the Minister said on that. I am delighted about Amendment No. 14, but I beg leave to withdraw Amendment No. 7.

Amendment, by leave, withdrawn.

Photo of Lord Hodgson of Astley Abbotts Lord Hodgson of Astley Abbotts Shadow Minister, Economic Affairs, Shadow Minister, Home Affairs

moved Amendment No. 8:

After Clause 4, insert the following new clause—

"COMPLIANCE WITH CODES OF PRACTICE FROM THE PENSIONS REGULATOR

The Secretary of State shall ensure that the pension and compensation schemes for armed and reserve forces comply with the relevant provisions of codes of practice published by the Pensions Regulator."

Photo of Lord Hodgson of Astley Abbotts Lord Hodgson of Astley Abbotts Shadow Minister, Economic Affairs, Shadow Minister, Home Affairs

My Lords, for those noble Lords who have not attended the Committee on the Pensions Bill or did not attend the Committee on this Bill, I should say that the Pensions Bill is a massive piece of work in two volumes. It establishes a Pensions Regulator who has four clear objectives; namely, to protect the benefits of occupational schemes, to protect the benefits of personal pension schemes, to reduce the risks of situations where payouts might have come from the Pension Protection Fund, and—last but by no means least—to promote an improved understanding of the good administration of work-based pension schemes.

Those functions have important relevance so far as the Armed Forces are concerned, although obviously not the third of them—the risk of a payout from the Pension Protection Fund—as the Armed Forces pension scheme is a government-backed scheme. The Pensions Bill is a framework Bill being discussed at length in the Moses Room in Grand Committee, and we await large chunks of guidance notes and regulations to fill in the gaps. They will have an important read-across to this Bill for the Armed Forces.

When I introduced a similar amendment in Grand Committee, the Minister rightly chided me by saying that not all the regulations and guidance notes produced by the Pensions Regulator would apply to the Armed Forces. In that sense, the new clause that I had tabled then was deficient. I have now retabled it to insert the words, "the relevant provisions", so that it applies only so far as matters that are of importance and relevance to the Armed Forces.

I do not want to weary the House with the very special position of the Armed Forces; we have tramped that ground a good many times. The problem is not simply the danger or the conditions of service, which may require servicemen to be away from their families. It is not simply the very different career structure, whereby people tend to retire much earlier than from civilian roles. It is not even that there are three very different services carrying out three very different roles. It is, as I think that the noble Baroness, Lady Dean, said at one of our meetings, that they are broken up into small groups of people who are spread far and wide—to the four corners of the globe, a phrase which the noble Lord, Lord Morris, used earlier this afternoon. So it is critical, given the nature and structure of the careers of members of the Armed Forces, that we ensure that pension practice for the Armed Forces will be of the highest standard and therefore complies with the standards that the Government think should be applied in the private sector.

The importance of the amendment can be tested under three yardsticks. First, we had an important discussion on Amendment No. 2, tabled by my noble friend Lord Astor of Hever, which the Government rejected, about the need for an affirmative resolution for major changes to pension funds. They said that they did not want that written on the face of the Bill but that they would simply consult.

The second matter is that there are several important legacy issues in place, particularly regarding the pensions trough. If the consequences of the actions being taken had previously been properly explained, the bitterness and damage might have been avoided or at least minimised. I have received a letter from someone affected by the pensions trough which alleges that there is evidence of a deliberate attempt to keep the consequences hidden. That is somewhat parallel with the current pension mis-selling scandal and the penalties now suffered by Equitable Life policy holders. What legacy issues are we creating today and what requirement is there to spell out the full implications of what is being proposed?

The third yardstick is the government Front Bench's repeated assertions that we should have no concerns about those omissions. The noble Baroness, Lady Crawley said:

"We shall be obliged to follow his",

—that is, the Pensions Regulator's—

"codes of practice".—[Official Report, 28/6/04; col. GC10.]

She repeated that in remarks earlier this afternoon.

Along with other noble Lords, I had a most helpful letter from the noble Lord, Lord Bach, dated 4 July in which he said:

"I recognise that there will be consultation requirements introduced in the Pensions Bill and these will apply to the Armed Forces Pension Scheme once they are introduced. It is our intention that we will comply with these consultation requirements although as yet they have not, I understand, been specified in detail".

I do not doubt the sincerity or integrity of the two Ministers, but Acts of Parliament last a long time and Ministers come and go. Governments also come and go. I see no reason why there should be any risk in making explicit the requirement for compliance in the Pensions Regulator's relevant provisions. The Government simply cannot legally impose a series of regulations on the private sector while not accepting formally and legally a similar provision for public sector pensions. I beg to move.

Photo of Lord Astor of Hever Lord Astor of Hever Deputy Chief Whip, Whips, Shadow Minster for Defence, International Affairs

My Lords, I support the amendment. My noble friend Lord Hodgson has argued his case comprehensively. Essentially it is an issue of best practice. If we are to have a new Pensions Regulator under the Pensions Bill to ensure minimum standards and requirements for occupational pensions in the private sector, why should we not put a duty on the Secretary of State to ensure that the new Armed Forces Pension Scheme must also comply? The Minister may assure us that there is no need to enforce a read-across from the private sector to the Armed Forces Pension Scheme because both will be working to the same best practice model. But that has not been the case in the past. Indeed, the Armed Forces Pension Scheme has fallen short of best practice elsewhere in the pensions industry. If the Bill were to state explicitly that there will be compliance with the new Pensions Regulator it would set many minds at rest.

Photo of Lord Redesdale Lord Redesdale Shadow Minister, Defence

My Lords, I support the amendment. It was useful that the noble Lord, Lord Hodgson, was able to sit through the proceedings on both this Bill and the Pensions Bill, with its large amount of paperwork. It is also worth noting that best practice should spread across all sectors, public and private, because we only have to look back a couple of years to realise that Crown immunity—once one of the cornerstones that allowed death in service not to be covered by certain other aspects, which led to abuse—had to be abolished because it was seen as inequitable in today's society. The amendment contains much sense.

Photo of Baroness Crawley Baroness Crawley Government Whip, Baroness in Waiting (HM Household) (Whip)

My Lords, I thank noble Lords for their interventions, and the noble Lord, Lord Hodgson of Astley Abbotts, has argued a characteristically robust case. He is amazingly cheerful, having sat through this Bill and the Pensions Bill. However, I have to tell him that I shall continue to resist his amendment.

The new Pensions Regulator will not be established until April 2005, subject to the passage of the necessary primary legislation. The regulator will issue codes of practice, some of which will be mandatory, to help pension fund trustees and other professionals understand how to comply with pensions legislation. I have noted and listened carefully to the noble Lord in his experienced observations regarding those who have fallen victim to certain pension regimes over the years and those who are bitter as a result of it. However, where the codes impact on the Armed Forces Pension Scheme, new and current, I can assure the House that the MoD will comply with their requirements. I see, still, no need to write such a requirement into primary legislation.

The various codes will provide pension schemes with the regulator's interpretation of pension law, thus assisting in improving compliance and encouraging best practice, as the noble Lord has said. Codes of practice enable legislation to be less prescriptive, while at the same time providing guidance and certainty for scheme professionals. This means that the regulatory approach is more flexible and scheme professionals will have more room to exercise their professional judgment in some areas of scheme administration. This approach responds directly to recommendations made by Alan Pickering in the Pickering report. I hope that the noble Lord, Lord Hodgson, will feel reassured enough to withdraw the amendment.

Photo of Lord Hodgson of Astley Abbotts Lord Hodgson of Astley Abbotts Shadow Minister, Economic Affairs, Shadow Minister, Home Affairs

My Lords, I am grateful to my noble friend Lord Astor and the noble Lord, Lord Redesdale, for their support. I was not clear whether the noble Baroness was trying to use the fact that the Pensions Regulator was not to be established until 5 April next year as a fig leaf for the reason why it could not be included in this Bill. She started down that track and then her speaking notes veered away from it. Instead she followed the line that we had received assurances on the Floor of the House and in Grand Committee. I shall have a look at what Alan Pickering had to say—given that he is clearly a man of importance and relevance to this debate—and of course at what the noble Baroness had to say, and see where that takes us regarding Third Reading next week. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 9 and 10 not moved.]

Photo of Lord Astor of Hever Lord Astor of Hever Deputy Chief Whip, Whips, Shadow Minster for Defence, International Affairs

moved Amendment No. 11:

After Clause 5, insert the following new clause—

"ARMED FORCES PAY REVIEW BODY

(1) The Armed Forces Pay Review Body ("the AFPRB") shall undertake quinquennial reviews to monitor and consult on the provisions of the armed forces pension and compensation schemes established under this Act.

(2) For the purposes of subsection (1), the AFPRB must employ specialist pension advisors.

(3) For the purposes of subsection (1), the AFPRB may take into account—

(a) any representations made to them on the workings of the schemes or on legacy issues;

(b) any other information which they think necessary.

(4) The conclusions of the review published by the AFPRB shall be submitted to the Secretary of State and laid by him before Parliament.

(5) The Secretary of State may, at his discretion, vary or accept any of the recommendations made by the AFPRB.

(6) For the purposes of subsection (5), the Secretary of State shall make a written statement to Parliament setting out—

(a) the recommendation,

(b) the AFPRB's reasons for making the recommendation,

(c) the Secretary of State's decision in relation to the recommendation, and

(d) the reason for his decision.

(7) A legacy issue shall be defined as an historical anomaly in provisions of armed forces pension schemes causing inequitable treatment of certain clearly defined groups."

Photo of Lord Astor of Hever Lord Astor of Hever Deputy Chief Whip, Whips, Shadow Minster for Defence, International Affairs

My Lords, the amendment focuses on the role of the AFPRB in validating the new pension and compensation scheme established under the Bill. We had substantial debate in Committee on this matter. It was clear that noble Lords appreciated the concession in another place from the Government that the AFPRB should be given the remit of validating the scheme. We have been lucky enough to have in our midst the noble Baroness, Lady Dean, who has an unparalleled knowledge of the working and expertise of that excellent body. However, I share with the noble Baroness some concerns about the extent of the new remit for the AFPRB. For this reason, I have brought back a redrafted version of our Amendment No. 26.

First, it would reassure many of us if the role of the AFPRB in the pension scheme were explicitly placed on the face of the Bill. Our amendment would do just that. We would like more detail on how the AFPRB will assume its new role. For that reason, our amendment insists that the AFPRB employs specialist pensions advisers as set out in subsection (2). This is a vital provision. Other pension schemes have trustees. We cannot have trustees, so we are told, because there is no trust. Yet we feel there is a clear need for oversight—for governance, as it were—to make sure that the schemes are in line with best practice and meet the needs of our servicemen and women. This could be provided only by those who have extensive knowledge of the intricacies of the pension industry. Currently, the AFPRB has no such expert.

I have listened to the Minister's arguments and appreciate that it might not be appropriate for the AFPRB to oversee the old pension scheme as well. However, we believe that there is a need for the AFPRB to be open to representations from all who have comments on the workings of the schemes, including legacy issues.

I know that the Government are constrained by their own self-imposed cost neutrality straitjacket at the moment, but a future government might not be. If there were to be some spare money available, a consultation review of the AFPRB would be extremely useful in pointing out which legacy issues could perhaps be addressed. Above all, our amendment strives to guarantee that the AFPRB has qualified experts available to take on its new role of validating a pension scheme and that there is a transparent process in terms of its consultation and interaction with the Secretary of State if any proposal or recommendations are made. In this way, the AFPRB can be a vital safeguard for ensuring that our servicemen and women are adequately cared for and protected in terms of their pension rights and needs. I beg to move.

Photo of Lord Hodgson of Astley Abbotts Lord Hodgson of Astley Abbotts Shadow Minister, Economic Affairs, Shadow Minister, Home Affairs

My Lords, I support the amendment. I regard it as highly desirable, even essential, that if the Armed Forces Pay Review Body is to be charged with overseeing the Armed Forces' pensions generally, a formal framework should be established within which it can carry out its duties.

We heard the Government's previous response that there was no need for this as service personnel were properly represented by the chain of command. Indeed, the noble Baroness used the phrase "chain of command" again today. I am afraid that this just will not wash. It is asking too much of a serving officer or an NCO to put forward and espouse what may be unpopular issues and views raised by junior colleagues. People may be putting their career on the line by doing so.

Without going back over ground we covered during the previous debate, there is a read-across to the private sector. As a trustee of a private sector pension fund, I would not accept that the only line of approach to me and my fellow trustees is through the line management of the company concerned. The dangers of doing so are obvious: the management shut or close off reasonable views put forward by more junior members of staff. That is why in the private sector there are employee member trustees, and it is quite right that there should be. If we cannot have employee member trustees, that is a role the AFPRB must fulfil and it needs explicit powers to do so effectively.

Finally, in Committee, the Minister and I discussed whether there were trustees for the Civil Service pension fund and he said that there were not. Of course he was right in fact but not entirely right in spirit. There is a joint consultative committee for the Civil Service pension scheme made up of unions and management. They are not trustees, but they are a consultative committee. I think that this is just what the amendment is seeking to parallel and I therefore hope that the Government will see that an important precedent already exists and that they will support it.

Photo of Lord Craig of Radley Lord Craig of Radley Crossbench

My Lords, I support the amendment and I spoke to a similar amendment previously. However, during Second Reading I asked a question to which I did not receive an answer. The Armed Forces Pay Review Body is concerned with one star personnel and below, but I was not clear about how its remit would run for more senior officers.

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Ministry of Defence, Parliamentary Under-Secretary (Ministry of Defence) (Procurement)

My Lords, I am grateful to noble Lords who have spoken to the amendment. It seeks to place the Armed Forces Pay Review Body's role in primary legislation and, frankly, to extend it beyond the remit announced on 30 April by my honourable friend the Veterans Minister, Mr Caplin. Noble Lords will recall the terms of that announcement.

Working alongside its current remit on pay, the AFPRB will undertake regular reviews of Armed Forces pension arrangements, comparing the pensions scheme arrangements with practice elsewhere in the economy and considering the extent to which they meet the recruitment and retention needs of the Armed Forces. It will publish its observations in an annual report and the Government will respond publicly.

Since Grand Committee, the Veterans Minister has written to Professor Greenaway, the AFPRB chairman, to seek to agree the detail of the external validation remit work. This follows discussions between my officials and the Office of Manpower Economics. The chairman will discuss the letter with other members of the AFPRB at its next meeting towards the end of the month. It would not be appropriate therefore to give further details today. However, it is reasonable to say that the work will cover the new pensions schemes and any variants, such as those for the full-time reserve service, together with the new early departure payment scheme. I am equally clear that the arrangements should not cover legacy issues for the AFPS, affecting those in receipt of pensions.

The concern of the review body is remuneration in the context of recruitment and retention of those currently serving. It operates through a system of comparability. Pension benefits of veterans are not a matter of recruitment and retention and it is difficult to see how they could be the subject of comparability with the terms paid to others who are currently employed in the UK economy. Any change to legacy issues must be a matter for political decision.

In terms of timing, we would expect that as currently planned the AFPRB would value pensions for its 2006 report in the context of that year's pay recommendations. We have proposed that this valuation should be confined to the current AFPS benefit, given that the membership of a new scheme will be small at that date. We will be at a very early stage in our implementation of the scheme. If something dramatic happens in the pensions field, however, provision is available to bring forward the review by agreement.

The next scheduled valuation would be for the 2011 report. We have proposed that unless there is evidence to suggest an earlier review, the first AFPRB validation of the AFPS should also be undertaken in 2010 for publication in 2011. The body's findings and observations on the scheme will be published in a supplement to the annual report, along with any associated reports commissioned by the body as part of its work. This will be in line with normal practice.

I see no need to include the review body's role in primary legislation. It has undertaken its role with respect to pay entirely satisfactorily for many years on the basis of a non-statutory remit. Other review bodies also operate on a non-statutory remit and I see no reason to depart from this arrangement for pensions. Indeed, it would be strange to have a different approach for the one review body. For those reasons, I must resist the amendment.

There was a question from the noble and gallant Lord to which I completely forgot to reply. When the AFPRB conducts its visits relating to remuneration, it speaks to service personnel of all ages and ranks and has free access to them. The Armed Forces are encouraged to share their views and concerns. Does that deal with the point that the noble and gallant Lord was making?

Photo of Lord Craig of Radley Lord Craig of Radley Crossbench

My Lords, I do not wish to prolong the matter now but it strikes me that the Armed Forces Pay Review Body's remit is one star and below and we are talking about pensions for all service personnel. Can I leave it that the noble Lord will write to me?

Photo of Lord Hodgson of Astley Abbotts Lord Hodgson of Astley Abbotts Shadow Minister, Economic Affairs, Shadow Minister, Home Affairs

My Lords, before the Minister finishes, can he answer one question? If we have a joint consultative committee for the Civil Service pension scheme, why do we not have one for the Armed Forces pension scheme? Is that not what we are trying to create here?

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Ministry of Defence, Parliamentary Under-Secretary (Ministry of Defence) (Procurement)

My Lords, I think that the answer to the noble Lord's probing question is that it is because we have the Armed Forces Pay Review Body, which has proved itself, as it were, in battle for many a year and there is no need to alter it.

Photo of Lord Astor of Hever Lord Astor of Hever Deputy Chief Whip, Whips, Shadow Minster for Defence, International Affairs

My Lords, I am grateful to my noble friend Lord Hodgson and the noble and gallant Lord, Lord Craig, for their support on this amendment. I also thank the Minister for his reply, which was very full and listed some very important points which I should like to consider. I should like to read Hansard very carefully before deciding what to do. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 1 [Amendments to Pensions Appeal Tribunals Act 1943]:

Photo of Lord Astor of Hever Lord Astor of Hever Deputy Chief Whip, Whips, Shadow Minster for Defence, International Affairs

moved Amendment No. 12:

Page 7, line 46, at end insert—

"6CA COST OF APPEALS

(1) A party to an appeal under section 6A or 6C shall be entitled to be paid the costs of bringing or opposing such appeal.

(2) An application for costs payable to a person under this section shall be made in writing to the President of the Pension Appeal Tribunal within six weeks after the determination of the appeal or subsequent appeal, whichever is later.

(3) In determining the amount of such costs, the President shall assess those on the basis that would be applied to an assessment of costs of High Court proceedings."

Photo of Lord Astor of Hever Lord Astor of Hever Deputy Chief Whip, Whips, Shadow Minster for Defence, International Affairs

My Lords, in moving Amendment No. 12, I shall speak also to Amendment No. 13. This amendment is intended to protect the existing rights of a dozen or so individuals whose cases each year are the subject of appeals, on a point of law, from a decision of the Pension Appeal Tribunal. As matters presently stand, an individual is entitled to paid legal representation where leave to appeal has been granted by the president either to the individual or to the Secretary of State.

The Government have been concerned about access to justice. Indeed, their most recent White Paper entitled Transforming Public Services: Complaints, Redress and Tribunals is concerned with that very issue. The amendment ensures that access to justice is retained on an equal footing.

The White Paper contemplates that individuals will not require representation on appeals on points of law. However, the individual is entitled to a level playing field. At a recent tribunal hearing—not an appeal on a point of law—the Secretary of State was represented by counsel instructed by the department's legal adviser, together with two senior representatives of the Veterans Agency. The claimant was represented by his father and a representative from the Royal British Legion.

In two other cases—both judicial reviews—the ministry abandoned its case involving the party who was legally represented and pursued the judicial review against the party who had taken no active part in the proceedings and who had no representation. Those are not the actions of a Government who wish to safeguard and protect the interests of individuals who are entitled to proper legal representation.

The Government are concerned about proportionality. In 2002, there were 2,372 appeals to the Pension Appeal Tribunal. Approximately a dozen gave rise to further appeals on points of law. That does not incur disproportionate legal costs and the Government now propose to take away the very sensible basis that has prevailed for ensuring proper and fair representation.

The Government have not adopted the proposal contained in the Leggatt report that there should be a grant of funds to the RBL for the purpose of ensuring that advice and representation can be provided. Rather, the Government's intention is to take away an existing right and benefit in order to save money and to swing the existing balance of representation away from the individual. I beg to move.

Photo of Lord Redesdale Lord Redesdale Shadow Minister, Defence

My Lords, I support Amendment No. 12, which is also in my name, because it goes back to some of the arguments that were raised on Amendment No. 1. A concern arises that, with the emphasis being on cost savings so that the benefits can be paid for, a certain stringent view on the amount of money that can be paid to claimants—many of them justifiable claimants—will cause them not to be represented and therefore conceivably to have their cases dismissed. That will be unfair to many people who believe that the system will be working for them whereas in an adversarial system it appears that it may well be the case that there will be a different burden of proof with financial consequences if they fail to prove their case.

One issue that should not be forgotten at this point is that those who are trying to prove their case will have suffered some injury—physical or mental—and therefore deserve all the protection that can be given to them, even if that comes at a residual cost.

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Ministry of Defence, Parliamentary Under-Secretary (Ministry of Defence) (Procurement)

My Lords, I am grateful to the two noble Lords who have spoken in this debate. I propose to resist the amendment. The debate on whether Schedule 1 shall stand part of the Bill will touch on many of the issues. Therefore, as I understand it, it is part and parcel of the same debate and I shall reply, if I may, to Amendment No. 13 as well.

Perhaps I may deal with the two situations to which the amendment concerning the cost of appeals would apply. I shall deal, first, with appeals from the Pension Appeal Tribunal to the Social Security Commissioners. A party appealing a decision of the Pension Appeal Tribunal will now go to the Social Security Commissioners. I should first note that most appeals before the commissioners are dealt with on paper without an oral hearing. I shall have more to say about that in a minute.

When a hearing is required, the Office of the Social Security and Child Support Commissioners will provide for the costs of those attending a hearing, such as those relating to travel and accommodation. With regard to legal costs, the Legal Services Commission provides a range of services to help claimants to prepare an appeal to the commissioners, subject to means and merits tests. For example, the Legal Help Scheme can provide up to £500 worth of advice from a solicitor. Of course, various advice agencies, such as the National Association of Citizens Advice Bureaux, provide advice for free.

That leaves the question of costs for legal representation. Outside of exceptional circumstances, legal aid is not available for legal representation in a tribunal hearing. That is because tribunal hearings are very different from a court. They are intended to operate without legal counsel. That applies equally to the department, which would not generally expect to have legal representation.

The new tribunal system is intended to be accessible and user-friendly. It is intended that people can bring their cases before a tribunal without the delay, cost and formality of a court proceeding. Commissioners are well used to unrepresented appellants and run hearings accordingly by asking questions of the parties and any attendant experts. I remind the House that the process is inquisitorial and removes the need for counsel—a need which is clearly present in the High Court.

There will, of course, be some rare occasions where it will be appropriate to fund legal counsel for a tribunal hearing. If necessary, representation before the commissioners may be publicly funded through an application for a grant of exceptional funding. That can be granted where an applicant meets the standard means and merits test and the matter is of a significant wider public interest, has overwhelming importance to the client or where representation is needed to ensure a fair hearing.

The second part of the amendment concerns appeals from the commissioners to the higher courts. Appeals to the Court of Appeal in England and Wales and Northern Ireland or the Court of Session in Scotland will fall under their existing cost and legal aid regimes. Our legal aid system recognises that appeals to a court require legal representation. A person before a court may qualify for full legal aid, subject to means and merit testing. That enables legal representation for persons unable to fund it for themselves. Of course, noble Lords will know that courts have the power to award costs as they see fit.

As the existing system already provides for full legal aid and award of costs when appropriate, I do not recognise the need for any changes. In short, the Bill modernises the appeal process to make it faster, cheaper and, most important of all, more accessible for claimants. Our justice system already provides for the reasonable costs of claimants, and tribunals are intended to operate without legal representation.

In my notes on the Schedule 1 debate, I repeated much of what I have already said, but I should make a couple of points about tribunals. Having two levels of tribunals, as we intend, provides a quicker, more user-friendly and more cost-effective service to the parties involved in comparison with the court system. Tribunals have a number of strengths in the consideration of administrative disputes.

First, on participation and funding—for example, in cases where a hearing is required—concerns have been expressed about "inequality of arms". I can assure noble Lords that the system is designed to avoid just that situation. It has to be remembered that the system is designed for lay and unrepresented appellants. The commissioners go out of their way to accommodate the parties and to explain the relevant matters of law.

In a hearing the presiding commissioners will investigate the issues, as I have said, in an inquisitorial manner, not relying on arguments of opposing counsel. The department would generally not expect to have legal representations at tribunal hearings. As I have said, there are rare occasions when it will be appropriate to fund legal counsel. If necessary, representation may be publicly funded through an application for a grant of exceptional funding.

Secondly, the tribunal system has special expertise. There is some misunderstanding about the Social Security Commissioners. They are extremely senior lawyers. The statutory qualification for their office is a 10-year general qualification or to be an advocate or a solicitor in Scotland of at least 10 years' standing. They offer considerable expertise in resolving appeals from the Pensions Appeal Tribunal. Many will have had previous experience in the Pensions Appeal Tribunal jurisdiction and it is they who will initially be assigned to hear appeals from the PAT. To distinguish such appeals, we shall call them the "Pensions Appeal Commissioners" when hearing appeals from the PAT. Of course, I want to make it clear that there are not many of them compared with other general matters of social security.

The third point, which I believe I have already covered, is that the strength of a tribunal system is its accessibility; it can be much more accessible than the courts. But we have changed the system so that there is an appeal, for the first time, on a point of law from the commissioner to the Court of Appeal and, if necessary and with leave, to the House of Lords in its judicial capacity. In short, we believe that what we are suggesting in terms of access to justice for claimants will be well met by the new system that is being adopted.

Photo of Viscount Slim Viscount Slim Crossbench

My Lords, in Grand Committee I asked whether we could keep the rulings simple. The excellent exposition that the Minister gave was quite difficult to understand. Thinking of an elderly claimant or a claimant in the middle of Sierra Leone who is being transported back home, or whatever, we must keep the paperwork simple so that straightaway he can get his claim on the books.

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Ministry of Defence, Parliamentary Under-Secretary (Ministry of Defence) (Procurement)

My Lords, I appreciate what the noble Viscount says, but the whole point of the tribunal system is that it is supposed to be in the language of the layman. I am afraid that that cannot always be said for the courts.

Photo of Lord Astor of Hever Lord Astor of Hever Deputy Chief Whip, Whips, Shadow Minster for Defence, International Affairs

My Lords, I thank the noble Lord, Lord Redesdale, for his support. The cost of appeals is an issue of great concern to the Royal British Legion. I am grateful to the Minister for his very detailed reply on that issue and on the issue of tribunals. I shall consider the Minister's response carefully with the Royal British Legion before deciding what to do next. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 13 not moved.]

Photo of Baroness Strange Baroness Strange Crossbench

had given notice of her intention to move Amendment No. 14:

Before Clause 6, insert the following new clause—

"PRE-1973 WAR WIDOWS' PENSIONS ON REMARRIAGE

(1) Article 42 of the Naval, Military and Air Forces etc (Disablement and Death) Service Pensions Order 1983 (S.I. 1983/883) is amended as follows.

(2) After Article (1A) there is inserted—

"Article 42(1) does not apply to a widow or widower of a member of the armed forces whose service terminated before 31st March 1973, and any pension or allowance paid to such a widow or widower (including a pension or supplementary pension paid under Article 29) shall continue whether or not the widow or widower marries or lives with another person as the spouse of that person.""

Photo of Baroness Strange Baroness Strange Crossbench

My Lords, I thank my noble friend the Minister for his kind and generous words and all noble Lords who have spoken for me and for my ladies. I particularly want to thank my noble friends Lady Dean and Lord Astor for their magnificent support. I and all the war widows are deeply grateful. In view of the Minister's kind promises and assurances, and bearing in mind that we still have Third Reading next week, I shall not move the amendment.

[Amendment No. 14 not moved.]

Photo of Lord Morris of Manchester Lord Morris of Manchester Labour

had given notice of his intention to move Amendment No. 15:

Before Clause 6, insert the following new clause—

"BURDEN OF PROOF IN CLAIMS FOR BENEFITS IN RESPECT OF DEATH OR DISABLEMENT

The power in respect of the provision concerning pensions and other grants for disablement and death due to service made pursuant to section 12(1) of the Social Security (Miscellaneous Provisions) Act 1977 (c. 5) (exercise by Order in Council of existing powers relating to benefits for death or disablement through service in the armed forces) may not on any occasion be exercised in any manner which would or might alter either the onus on any person of proof in respect of claims for entitlement to awards as provided for by Article 4(2) or the benefit of reasonable doubt as provided for by Article 5(4) of the Naval, Military and Air Forces etc. (Disablement and Death) Service Pension Order 1983 (S.I. 1983/883) as appropriate."

Photo of Lord Morris of Manchester Lord Morris of Manchester Labour

My Lords, by explanation of my intention not to move this amendment, and in courtesy to the House, it might be thought that my approach in tabling both amendments was one of belt and braces. Certainly the amendment that the House has already so emphatically approved this afternoon—Amendment No. 1—is a robust safeguard of the existing burden of proof; and as I do not wish to detain the House further this evening and can, if necessary, return to the issue at a later stage, the amendment is not moved.

[Amendment No. 15 not moved.]

Photo of Lord Redesdale Lord Redesdale Shadow Minister, Defence

moved Amendment No. 16:

After Clause 6, insert the following new clause—

"POST-RETIREMENT MARRIAGES

As of 6th April 2005 widows, widowers and surviving registered unmarried partners of all service personnel shall receive a full widows' forces family pension based on their spouses or partners length of service and final salary regardless of the date of marriage or registration."

Photo of Lord Redesdale Lord Redesdale Shadow Minister, Defence

My Lords, I wish to speak to Amendment No. 16 and to support Amendment No. 17 to which my name is attached. This is one of a number of legacy issues that we have discussed at some time at earlier stages of the Bill in relation to slightly different issues. I know that the Minister will say, in those immortal words, "I resist this most strenuously", and I know that were I to press this amendment at this late stage of the day I would have no joy whatever. I intended considering pressing this amendment, but due to the lateness of the hour and the fact that our troops have all gone home, and I would not be able to gloat over the result, it is not appropriate for me to push this matter.

Although I am being slightly flippant, the issue is a serious one and it needs to be aired. It is also one to which we shall return at a later stage of the Bill as there are a large number of pensioner widowers who have found themselves in the very problematic position of marrying post-retirement. They could be married for a number of decades and when the partner who was a member of the services dies no provision is made for them. Therefore, such people find that they may not have simply a reduced pension, but no pension at all. The difficulty is that the person who was in the services made no provision for such a partner after he died. Therefore, such people become caught in the rather difficult position of not having been able to make provision in the past.

To introduce such legislation retrospectively would produce many of the problems that retrospection has in legislation. I know that the Minister would have difficulty with that. Amendments Nos. 15 and 16 put forward the concept of a pension being enacted from 6 April 2005. Amendment No. 17 plays with semantics and tries to make the pill less bitter to swallow for the Minister, although I know he will not swallow it anyway, which is unfortunate. However, it is important to note that there are a large number of mostly women who find themselves in this position. Many are in their 60s or 70s—although not necessarily of that age—and many find themselves in a difficult position.

At an earlier stage the Minister said that the Government would be looking at legacy issues. I very much hope that that is not just a form of words and that the Minister can think again. Of course this is some years after the constraints of the schemes to which the servicemen signed up and good practice now means that certain people are not caught by this situation. I beg to move.

Photo of Lord Freyberg Lord Freyberg Crossbench

My Lords, Amendment No. 17 in my name is along similar lines to that tabled by the noble Lord, Lord Redesdale. It differs in one crucial respect in that it imposes an added age restriction. I should like to explain the reasons for that and stress that those who stand to benefit from the amendment are elderly service widows and widowers in their 70s, 80s and 90s who feel let down that their spouse's years of service have not counted towards their pensions. I believe that it is the responsibility of government to right injustices inadvertently created by previous legislation, and that is certainly the case here.

At present, widows and widowers of pre-1978 post-retirement service marriages receive no service pension. In this they are at a severe disadvantage to their equivalents in other public services. That is because the majority of those who served in the Armed Forces at this time were obliged to retire at or around the age of 40, while the vast majority of those in other public services retired at 60. Thus, public servants who retired in the late 1970s with the requisite pensionable years of service were able to marry or remarry up to the age of 60 and pass on a widow's pension when they died. However, during the same period, of those who retired from the services, the majority had to have married by the age of 40 to be able to pass on their pension. In that respect the Armed Forces were uniquely disadvantaged.

In Grand Committee and in a subsequent letter to the noble Lord, Lord Redesdale, the Minister seemed to be under the impression that we are asking for special treatment for PRM widows. Not so; we are asking for a greater degree of parity. Is it so unreasonable for someone working in the Armed Forces to have equal rather than inferior employment rights to civil servants who never have to put their lives on the line for their country? It is worth remembering too that forces personnel have always been obliged to live for long periods in far-flung parts of the world, which puts strains on marriages not endured by those living at home and makes it harder to find marriage partners in the first place.

The reason for proposing 60 as the cut-off age for pre-1978 PRM widow's pensions is twofold. First, it would give service widows the same cut-off age as others in the public sector. Secondly, 60 is the limit for recall liability. By making the cut-off age the same as that for civil servants, the possibility of an expensive read-across is significantly reduced, something that I know concerns the Minister. Sixty is also the age limit for officers and other ranks to be called up for service even after retirement. Moreover, until 1973, when a large proportion of those we are discussing were serving, anyone who failed a recall could face severe consequences.

Prior to 1975, members of the Armed Forces had to serve for 22 years in the case of other ranks and 16 years for officers to qualify for pension rights at all. In the Minister's letter of 30 July 2004 to the noble Lord, Lord Redesdale, the Minister stated:

"Those with substantial periods of service who married after retiring would be the main beneficiaries [of the amendment], but it could not be argued that this group merited exceptional treatment as against other similarly affected pensioners in the UK".

That seems a bizarre assertion. Of course those with the greatest periods of service deserve to benefit most, while his statement that there are other groups of similarly affected pensioners in the UK is demonstrably false. The police and the fire service have the earlier-than-average retirement age of 55, but only the Armed Forces forcibly eject personnel at around the age of 40 and have long periods of service abroad. Furthermore, although the retirement age for officers is 55, only 5 per cent reach even that target.

I should like to address the Minister's assertion in Grand Committee in July that this amendment would cost £50 million. The Government have been unable to give a basis for this in spite of many requests over more than a decade for research into costs and the number of personnel involved. For example, earlier in the year, in another place there was a request for a breakdown of the £50 million calculation. No such breakdown has been forthcoming, nor has any effort apparently been made to calculate the number of personnel. In Grand Committee in this House, a series of sums greater than £50 million were announced and then corrected and revised down in a subsequent letter to the noble Lord, Lord Redesdale. In the absence of evidence on where the figures have come from, one can only assume that the actuaries' estimates are little more than guesswork. What one can say with certainty is that the cost of the amendment would be enclosed and diminishing, as well as just.

The widows and widowers are puzzled and angry that they are being financially penalised for marrying later in life, but no later than many in the Civil Service at this time who were then able to claim a widow's pension. The Labour Party recognised the justice of this cause when it supported an amendment on the subject in the House in 1995, led by the esteemed noble Baroness, Lady Hollis. The facts are the same 10 years on, and the costs involved have decreased. I hope that this Administration will do the decent thing and not turn their back on the injustice that they rightly perceived.

Photo of Lord Steel of Aikwood Lord Steel of Aikwood Liberal Democrat

My Lords, I rise briefly to support one or other of the amendments proposed by my noble friend Lord Redesdale and the noble Lord, Lord Freyberg. I do so simply because, to my surprise, I received a number of letters on the subject. I do not know why; I am not a pensions or defence expert.

In our democracy people wonder whether it is worth writing to Members of the House of Commons or the House of Lords. When they take the trouble to do so and not to send circulars, I think that one should pay some attention.

I want to take issue with my noble friend Lord Redesdale in suggesting that all the troops have gone home. I do not understand how he can say that sitting in front of our most gallant noble friend Lord Garden—a very distinguished trooper indeed—not to mention myself and my noble friend Lord Thomas, but we will take issue with him later.

I said I would briefly support the amendment because I understand we are not pressing the matter and hope to return to it on another occasion. I should like to quote from one of these letters which illustrates in a personal way exactly what the noble Lord, Lord Freyberg, said. I shall not give the name and address of the person but he is a retired squadron leader. He said:

"I served continuously in the Royal Air force from 1938 until 1971. I married in 1939 and my wife was with me throughout my Service and when I retired in 1971. She died in 1975, 4 years after I retired. I remarried in 1977. If my present wife is widowed she will not get any related widow's pension.

"Throughout my Royal Air Force Service my pay was adjusted at source . . . to pay for the Armed Forces Pension Scheme, which includes widow's benefits. Therefore, throughout my Service, I have 'bought' an entitlement for my widow to receive a pension irrespective of the date of my marriage. Since, by their very nature, my contributions can never be refunded, my widow's pension rights must always remain 'bought'".

That is a telling example and it is a matter of financial as well as general justice in comparison with others in other walks of life as the noble Lord said. I hope the Government will therefore give this serious thought before the issue comes before the House again.

Photo of Lord Craig of Radley Lord Craig of Radley Crossbench

My Lords, I rise also very briefly to support the amendment. I have already drawn attention to the fact that the parliamentary pension scheme does not prevent the widow of an MP getting a pension regardless of when she marries her late husband. The Armed Forces are in a special category when it comes to pensions because of reserve commitments after retirement, much earlier retirement and, sadly, the greater likelihood of premature death. We should try to do something regarding pensions for post-retirement marriages.

Photo of Lord Bach Lord Bach Parliamentary Under-Secretary, Ministry of Defence, Parliamentary Under-Secretary (Ministry of Defence) (Procurement)

My Lords, I know the strength of feeling on this long-standing issue. I am surprised that we have had a debate about it today given that, as I understood it, the matter was to come before the House later in the Bill. But there has been a debate, so I am afraid that I must answer it. I do not resent answering it on the grounds that it is not a serious question—it is a very important question; I appreciate that. But if the amendment had been withdrawn straightaway, we could have had this debate and, if the noble Lord wanted to see it to a conclusion, we could have voted on it on the next occasion.

I resist both amendments, I am afraid. Post-retirement widows' pensions were introduced following government-wide changes in policy through the Social Security Pensions Act 1975. Provision was made in the current Armed Forces pension scheme for the payment of pensions to widows of service pensioners who married or remarried after retirement, but this change benefited only the widows of those giving service on or after 6 April 1978. Subsequent government policy changes to provide widowers with the same post-retirement provision were introduced later, but this change benefited only the widowers of those giving service on or after 1 October 1987.

Amendment No. 16, if carried, would have three effects. First, it would allow all service widows and widowers to qualify for a post-retirement widows' pension regardless of the date of their marriage. Secondly, it would increase the rate of post-retirement widows' pension for those widows and widowers who currently receive a post-retirement pension based on only that part of their spouse's service after the changes were made. Thirdly, it would improve the benefits of unmarried partners who currently receive benefits only if their partners are attributably killed in service—that is, their death is due to service.

Amendment No. 16, if carried, would not have the impact that the noble Lord who moved it intended that it should have. The principal underlying rationale was that the current position unfairly penalised those who might have been encouraged to delay marriage but then left after a relatively short period of service and therefore married after retirement. Many of those whom the measure is designed to benefit would have no entitlement to a pension, even if this change were carried. The overwhelming majority of the widows affected would have spouses whose career in the Armed Forces pre-dated not only April 1978, when post-retirement widows' pensions were introduced, but also April 1975, when preserved pensions were introduced.

There was no legal requirement to preserve pension rights before that date for those who left before completing enough service to qualify for a pension—22 years for other ranks and 16 years for officers. This position was not unique to the Armed Forces and affected most other public service and private sector workers. Those with substantial periods of service who married after retiring would be the main beneficiaries, but it could not be argued that this group merited exceptional treatment as against other similarly affected pensioners in the United Kingdom.

As the noble Lord, Lord Freyberg, has said, the Government Actuary has estimated that there would be a one-off cost in the order of £50 million to extend post-retirement widows' and widowers' pensions to all current and deferred AFPS pensioners. The noble Lord asked for the figure to be broken down. I cannot do that at the Dispatch Box today but I shall ensure that the noble Lord is written to next week with an attempt at a breakdown—he was justified in asking that question. It will cost around £50 million. The cost would increase if unmarried partners were to be included, but it is difficult to estimate given the limited information on the number of partners who might be eligible. There would be no future annual cost.

I explained in Committee that there is no distinction between Armed Forces personnel and other public service employees with regard to the fact that the post-retirement widows' and widowers' pensions are available only to the spouses of those with service on or after a specific date. It has been the long-standing policy of successive governments that changes to improve the benefits from public service pension schemes should be implemented from a current date for future service only. To extend the post-retirement marriage concession only to survivors of service pensioners would therefore put pressure on all public service occupational schemes. Extending the provision to all public service occupational schemes would cost between £300 million and £500 million.

Furthermore, as the noble Lord, Lord Redesdale, graciously acknowledged, the amendment would be in breach of the principle of retrospection, which has been followed by governments of all colours throughout the ages—and immediately denied by opposition parties when they get into government. I do not say that with any relish, but it is just the way it happens, I am afraid.

Amendment No. 17 would limit the benefit to those marrying before the service person's 60th birthday. It would still mean that there was a significant cost, both to the MoD and to other public service schemes, because we could not treat Armed Forces personnel differently on this issue, as I have attempted to explain.

For those reasons, and with no joy in my heart, I resist the amendments, which were so ably moved. The noble Lord has said that he may return to the matter at a later stage. If he does, I hope that I will be in a position to speak on the amendment again. But I am afraid that I cannot give out any hope at all that our position will change; it would set an unfortunate precedent. The noble Lord says that the Government have made no concessions on legacy issues. I am afraid that I dispute that: our concession on Amendment No. 14 was on a legacy issue. The difference between Amendment No. 14 and this amendment is that the former is not retrospective.

Photo of Lord Redesdale Lord Redesdale Shadow Minister, Defence

My Lords, I thank the Minister for his reply. I know that it is not an easy issue; nor is it a party-political issue on which points could be scored. The issue affects many people. I understand that Amendment No. 14 has very few cost implications, which is one of the guiding principles whereby it can be agreed, whereas the other legacy issues cannot be accepted. I wished the issue to be aired today. It was useful for people to put their points across because, if the issue will never be solved, that must be stated in the House without giving the impression that this or any government will change the situation without fundamental changes to the whole way in which pensions are looked at. I may return to the matter, but I thank the Minister for his reply. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Lord Freyberg Lord Freyberg Crossbench

had given notice of his intention to move Amendment No. 17:

After Clause 6, insert the following new clause—

"POST-RETIREMENT MARRIAGES

As of 6th April 2005 widows, widowers and surviving registered unmarried partners of all service personnel shall receive a full widows' forces family pension based on their spouses or partners length of service and final salary, provided that their marriage took place before the service personnel's 60th birthday."

Photo of Lord Freyberg Lord Freyberg Crossbench

My Lords, I thank the noble Lord, Lord Steel, and the noble and gallant Lord, Lord Craig, for their kind words. This is a late hour at which to take the matter any further, so I shall not move the amendment.

[Amendment No. 17 not moved.]