Examination of Witnesses (Questions 60
WEDNESDAY 6 DECEMBER 2000
SPELLAR MP AND
60. Would you envisage at some point in the future,
you said you are not adverse to such changes, you would spell
out what a partner is would or leave it to the discretion of the
(Mr Spellar) You are even getting difference
within the Committee. We had a clear view from the Member for
Canterbury, he was clear on having a fairly defined view. These
are some of the difficulties that we will be having to resolve,
but we are not at that stage yet.
61. It is my view but you would have to do it.
That is why I asked the first question about what definitions
you have or what work you have done on definitions.
(Mr Spellar) We have not as yet. We need
to a get greater distillation of the views of the Service community.
We discussed this at some length at the last consultation meeting
I had with the families' federations representatives and that
will undoubtedly come up in the next meeting.
62. Can I move on to pay? I cannot work out the
logic of Pay 2000 being paid in April 2001, does that have any
PR benefits or not? By doing that I suppose that does give you
a chance to iron out some of the problems in the pay review structure.
What further enhancements are you likely to be making in the system
before April 2001?
(Air Marshal Pledger) When you say iron
out some of the problems, Pay 2000 or Pay 2001 is a completely
new pay structure. We start from a new baseline. We will not be
dealing with issues that arose from the current complex arrangements.
It is an incremental pay system that recognises experience through
the rank and also allows for accelerated progress if people get
additional qualifications. It is a completely new structure. What
we have to do is, first of all, put it on to the legacy systems
we are currently using to deliver this accurately and efficiently
from the very first date. We would not want to go into this until
we have proven to ourselves it was deliverable. We are currently
in the acceptance testing stage of that process and, therefore,
still on track for 1 April 2001. You should not see it as amendments
to what we have because it is a completely new pay structure.
63. These were really problems in the current
system, in the old system, things like skills and qualifications
not really being properly rewarded, length of service not really
being recognised and, indeed, the actual job and the content of
the job that an individual had to do not being reflected in the
pay. Would that be properly reflected in the structure?
(Air Marshal Pledger) As I said, experience
will be reflected by incremental pay levels. Particular skills
that are added can result in accelerated increments. The whole
new system is heavily underpinned by comprehensive job evaluation
across the various trades and specialisations.
64. You are bound to have a lot of people saying,
"It does not reflect those things", or "It is not
fair" when it is paid. Will you have a review of it? How
quickly will your review be or will it be a five-years-down-the-road
(Air Marshal Pledger) First of all, a
huge what we call IPR, Internal PR Processes, is going on to remind
people of the benefits associated with Pay 2000 structures. The
fact that the rates will be announced in conjunction with the
AFPRB award this year and to show them how this the transition
goes we will be paying them on, shall we say, the new system but
at the old rate to show them how the transition worked, before
then applying any AFPRB award for this year. The whole thing is
being made very transparent to them. There are teams going out
to explain the whole process. Subsequently we will evaluate it
within two years to determine whether or not the benefits that
we associated with this have been delivered.
65. Within two years! Can I ask you about the
administration of pay. There have been complaints that it is not
very good. Certainly it has not been very good at times and members
of the Armed Forces have not been paid the full amount they are
entitled to at the proper time. Although that does get rectified
it relies on them pointing out the errors. Will Pay 2000 have
an element which vastly improves administration in these areas?
(Air Marshal Pledger) I have said we
have spent a whole extra year checking the systems that do this
to make sure that we have better accuracy from the new structure
than we had in the past. A huge process of testing has gone on
to try to achieve those outcomes you describe.
(Mr Spellar) Can I just say on that, my experience
has been that there has been a considerable reduction in the number
of complaints about pay not being put into people's accounts.
About two years ago there was a horrific position, particularly
when we had a lot of people in Bosnia and Kosovo, husbands, in
particular, out there, and the wife back in the Barracks in Service
accommodation here finds there is no money going into the account.
That was causing a considerable amount of anxiety to our Forces
and also adding considerably to their telephone bills as well.
Fortunately this was the time when we increased the amount of
telephone availability. It was a serious situation, one which,
as far as I can ascertain, we have reduced quite dramatically,
not just from what I am hearing on the management side but I am
not getting those complaints when I go around units.
66. Can I put a suggestion to you that the Government
are quite good in terms of pensions, having hotlines for pensioners
to contact if they have any queries about what they are entitled
to. Why can you not have a hotline, a direct line, for people
who have pay queries that can be picked up and dealt with right
(Mr Spellar) You do have pay units who
are very much in direct contact with the pay centre. They work
extremely hard and effectively in resolving a number of these
matters. What particularly concerns me, particularly with the
Army, where soldiers are away from home and it is the families
back home who have to deal with the bills and the money not going
into their accounts, is they are not sure what is happening and
they are trying to make contact with their husband to find out
about that and he is trying to talk to the pay unit. All of that
is causing very considerable distress there. A lot of work was
being done by the units back home to try and deal with that as
well. That seems to have largely gone now and I think all credit
to those who put a lot of work into rectifying that.
67. Not withstanding that, I appreciate it is
not as bad as it was, why can not the families, the spouses, phone
directly a hotline and get information as to why the money has
not gone into the account?
(Mr Spellar) Partly because they are
not our employees, we would need to look at that, as any employer
would, at the relationship between the people whom they pay directly
and others. I can envisage some difficulties and we would have
to look at that.
(Air Marshal Pledger) Can I also point something else
out here. Of course, the employer is the unit. The paying agent
is the organisation I think you are focusing on but, of course,
they are responding to the unit pay inputs, so the hot line is
exactly the right one. We have identified the focus and who owns
the activity and we have put in place opportunities through the
welfare officers in the Army and through designated points of
contact in the Air Force. When individuals are deployed their
spouses can contact them directly and access through that methodology.
68. Thank you. Just on salaries or wages for
young recruits. Imagine a young recruit, married, living in a
God awful place where there are not any jobs available for his
wife, not on a high wage, where Family Tax Credit appears to be
an option that is pursued. That is almost like getting another
government department to reward low pay. I would not expect an
answer now but it saves putting another Parliamentary Question;
how many families do you think are claiming Family Tax Credit
because perhaps they feel they cannot manage with the wages they
are being paid? That would be helpful, Minister.
(Mr Spellar) We will certainly write
I think it is a combination of wages and family circumstances
at a particular point, but we have looked at that in response
to some of the queries that have been made and I will certainly
look at what data we have to back that up as well.
69. On Monday week we will be having an informal
briefing from the Officers' Pensions Society. They rang me this
morning in the hope that I could raise the question I am now going
to do and, by coincidence, I see that it is well addressed in
my brief here as well. This is the review of the Armed Forces
Pension Scheme. The review was announced almost exactly three
years ago this month and it was supposed to be completed in the
middle of 1998 so it is running two and a half years late. Why
(Mr Spellar) I think we are really looking
at the various complexities on pensions. There have been some
interim measures that have been taken. For example, on the attributable
widows' pension, the Secretary of State made an announcement in
July and the necessary regulations were made on 31st October.
But on the broader pensions area and also related to compensation
on injuries and the inter-relationships between these, this is
a fairly complicated area and the work has not been as easy as
70. Surely something that is taking between five
and six times as long as was originally envisaged you cannot put
down to a few added complexities, can you? Is it not a matter
of insufficient priority being given to this work?
(Mr Spellar) I do not think it is, but
it is a complicated area. It is obviously part of the public sector
pensions, although obviously with many unique characteristics
which have also to be taken into account. I think that combination
has meant that the work is complicated and difficult. We hope
to be launching a consultation document on that but I cannot give
an exact time on that.
71. So even the date of December 2000 is now
slipping, is it?
(Mr Spellar) I cannot give an exact time
72. So it is not going to be December 2000?
(Mr Spellar) I would think that would
be less likely.
73. One of the problems is that, as you say,
the idea is that there should be an opportunity for full consultation
of interested parties following publication of the review findings.
Although you pointed out in your earlier response that this particular
measure has been taken on an interim basis and so has that one,
until the review actually comes out with its findings you are
not going to get input from concerned specialist representative
bodies like the Officers' Pensions Society, are you?
(Mr Spellar) My recollection is that
they have been making representations and putting input into our
discussions as we have been going on.
(Air Marshal Pledger) That is absolutely right.
74. But they are hoping to be able to enter into
the formal consultation process and they cannot do that, can they,
until we get these findings?
(Mr Spellar) That is true but they have,
quite rightly, been making regular representations on a number
of issues. As I said, for example on the attributable widows there
has already been action taken in that regard.
75. Is one of the areas in which they have been
making representations the possible reinstatement of pensions
to war widows who became war widows during the Second World War,
who subsequently remarried and have now outlived their husbands
but who have not had any restoration of pension?
(Mr Spellar) I cannot recall as to whether
they have raised that issue. We would have to write to you on
76. What I have in mind is a constituent of mine,
who himself holds the DSC, who came to see me recently about his
sister-in-law who was originally widowed when HMS Hood went down
and, in a similar situation to that I have described, has now
outlived her second husband and is finding life at the age of
81 difficult, and surely to stretch out a review of schemes of
this sort, which might have some bearing on the situation in which
World War II widows find themselves, is, shall we say, a little
(Mr Spellar) If I can be clear, you are
referring in this instance to someone who had been in receipt
of a war widows' pension
77. Which then ceased.
(Mr Spellar) Which is actually the responsibility
of the Department of Social Security who are responsible for the
administration of that scheme.
78. Do you not anticipate as a result of this
review there would be some bearing on the way in which such payments
would be made?
(Mr Spellar) That is absolutely right.
All I am pointing out is in the first instance those are questions
that would need to be referred to the Department of Social Security
with regard to a case such as that.
79. What then are the key issues that you expect
your review to address? We do not expect to be told any likely
conclusions because those may be well over the horizon by the
sound of it, but what are the key issues you are examining in
this extremely slow review?
(Mr Spellar) One of the key issues is
when pensions are paid, which is an issue that has been of interest
to this Committee, and indeed was raised earlier during the course
of these proceedings. That is obviously a major and significant
issue and arises from the Bett Report.
4 See Appendix 9. Back