Armed Forces Redundancy Scheme

– in the House of Lords at 3:12 pm on 29 June 2005.

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Photo of Lord Garden Lord Garden Spokesperson in the Lords, Defence 3:12, 29 June 2005

asked Her Majesty's Government:

What are the benefits of the new Armed Forces redundancy scheme, announced on 21 June, compared with the current scheme.

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

My Lords, the terms of the new redundancy arrangements, including a comparison with current terms, were set out in a Defence Instruction and Notice. Copies of that notice were placed in the Library of the House when my honourable friend the Parliamentary Under-Secretary of State and Minister for Veterans made his Statement announcing the new schemes on 21 June.

Photo of Lord Garden Lord Garden Spokesperson in the Lords, Defence

My Lords, I thank the Minister for his Answer. Before I continue, I shall use the opportunity to congratulate the Royal Navy on its extraordinary display yesterday at the international fleet review. It was a great occasion. If the sentiments of the House could be conveyed to the Royal Navy, we should all be grateful.

I am afraid, however, that the Minister did not answer my Question. It looks as though the redundancy scheme is another savings measure. For example, we move from being able to have a special capital payment of 18 months' pay to having 12 months' pay. That is yet another degradation in conditions of service. Will the Minister consider looking at the issue again and perhaps being as generous as his Government appear to be prepared to be to temporarily redundant Cabinet Ministers?

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

My Lords, I join the noble Lord in congratulating the Navy on the Trafalgar 200 celebrations yesterday. They were truly splendid. I am sure that the whole House will join me in passing on those congratulations.

I turn to the second point made by the noble Lord. We accept fully that the benefits offered to the Armed Forces should properly reflect the particular demands of a career in our forces. However, existing redundancy terms were not fair as between people leaving at different points in their career. They were established over 30 years ago, were out of date and needed to be looked at. The way that they have been considered properly reflects the situation today. They are generous compared to the terms offered to members of the Civil Service and considerably more generous than what is normal in the private sector. We are fully satisfied that the new terms are a generous reflection of the service of those affected.

I turn to the noble Lord's third question. A sergeant leaving the Armed Forces aged over 40 under the new scheme will receive a capital tax repayment equivalent to 12 months' pay and a continuing payment until the end of his life of one quarter of his final salary. By comparison, for a Minister, it is three months.

Photo of Lord Astor of Hever Lord Astor of Hever Spokespersons In the Lords, Foreign Affairs, Spokespersons In the Lords, Defence, Spokespersons In the Lords, International Development, Deputy Chief Whip, Whips

My Lords, we echo the warm words of the noble Lord, Lord Garden, congratulating the Royal Navy. The Statement that the Minister mentioned contradicts his Written Answer to me on 6 June, which said that there were no plans to review the schemes. Why the sudden change?

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

My Lords, I do not have a full answer to the noble Lord's question. I will look into it to give him a proper answer.

Photo of Lord Garden Lord Garden Spokesperson in the Lords, Defence

My Lords, given the opportunity, may I ask the Minister: if it is such a generous scheme, how much extra money has been put aside to implement it?

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

My Lords, I do not want to give the House the impression that it is a more generous scheme. It is not; it is a less generous scheme. However, as it has been restructured, there have been significant improvements in the elements of the scheme that are regarded currently as the most important. I have already mentioned the point about ensuring that the payment made to a person leaving the Armed Forces was proportionate to their length of service. That did not exist in the previous scheme; it will in the new scheme. To take another example, the death in service benefit has risen from 1.5 times to four times final salary.

Photo of The Countess of Mar The Countess of Mar Crossbench

My Lords, will the 25 per cent of final salary be inflation-proofed?

Photo of Earl Attlee Earl Attlee Deputy Chief Whip, Whips, Spokespersons In the Lords, Transport

My Lords, I remind the House of my peripheral interest. Will the new scheme increase or decrease the cost of the current redundancy round?