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Mr. Jimmy Hood (Clydesdale): I thank the Minister for making this statement. The news that we have had this week beggars belief, and it is important that we should have a statement in the House, because the public need to know how the MOD has been treating our armed forces. The Ministry should not get away with it, and I hope that the Minister will tell the House not only that we are prepared to pay back the money that we have robbed from pensioners, but that the heads of those responsible in the MOD will roll.

Dr. Moonie: I can assure my hon. Friend that we shall look at this matter very carefully. The administration of

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pensions in the armed forces was changed in 1996 or 1997; I am not sure of the exact date. Much of that administration was centralised at the time, and the day-to-day administration of the three pension societies was brought much closer together. As a consequence, and because we are taking a close view of what happens in our pensions department, this kind of mistake should not happen again. The original mistake took place about 50 years ago, and it would probably be a waste of Government resources to attempt to identify who was responsible at the time. Once such a mistake becomes institutionalised, it is accepted as fact. It therefore carried on from year to year without further checking.

Andrew Mackinlay: It was under a Conservative Government.

Dr. Moonie: I shall refrain from making any party political points on the subject, tempting though that might be.

Mr. Paul Keetch (Hereford): I thank the Minister for giving me notice of his statement, and for coming to the House today. It was right that he should do so. Indeed, some might argue that the Government should have made a statement when this anomaly was first discovered. It appears that the Ministry of Defence is pursuing its normal procedure yet again in this case. First, it denies all knowledge; then it prevaricates and confuses for as long as possible; it admits to something only when the truth is insurmountable; and it compensates only when it is threatened by legal action or when the press finds out.

Why was the Army involved, but not the Navy or the RAF? That is an interesting point for further discussion. The Minister said that 103 cases have so far come to light and that his estimate for compensation is £30 million. How does he calculate that figure if we do not yet know the full number of cases? How many widows and orphans may be affected by the error?

Major Perry suggested that the MOD records are "horrific". If so, why has there not been more of a campaign to encourage take-up? I have enormous respect for the Royal British Legion and the War Widows Association, but we need more national publicity and a proper take-up campaign. Or are the MOD and its civil servants more protective of Treasury coffers than concerned about giving what is due to those who have served the nation so well?

We should congratulate Major Perry on his great persistence and tenacity, but this is not an isolated example. This is the Government who told me that they would not give compensation to the girlfriend of an SAS trooper but then offered her £100,000 when she threatened to sue. This is the Government who paid out £60 million to 5,000 service women who were found by an employment tribunal to have been wrongly dismissed just because they were pregnant.

I welcome the fact that the Minister is now responsible for veterans affairs, but surely we need a proper debate in the House on our veterans because we are consistently letting them down. This country owes a great debt to those who have served it so well. It is the responsibility of this Government to pay that debt in full.

Dr. Moonie: With regard to denial or prevarication, I can say that a mistake was identified as a result of Major

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Perry's persistence, and action was immediately instituted to try to remedy the situation. That is not something that can be done overnight. We employed four extra members of staff and a great deal of the time of others to ensure that we could go through all the records involved. That has been a very careful process, and we have made no attempt to hide it.

As I said, we gave an answer to the House in 1999 detailing our progress on the matter. We contacted veterans organisations, which, in the absence of any central register of veterans—something that I hope to remedy in future—are the appropriate bodies to deal with the matter. The War Widows Association contacts more than 50,000 widows in its newsletter, and the Royal British Legion contacts more than 600,000 veterans. Frankly, I can think of few better ways of contacting veterans than through those organisations.

However, in light of further consideration of the matter and some doubts in my mind as to whether there are more cases to be identified, I have decided to take further action, which will probably take the form of a national advertisement asking people to contact us. It will of course have to be phrased very carefully because the error affects only a minority of pensioners, and the last thing I want is to raise the expectations of the other 95 per cent. that they might be entitled to compensation—they will not.

Mr. Doug Henderson (Newcastle upon Tyne, North): I thank my hon. Friend for his statement. He will know that when a citizen falls foul of the Inland Revenue, its usual practice is to get the money back plus interest. The MOD has fallen foul of long-standing Army personnel, so will it pay the sums due plus interest?

Dr. Moonie: The situation is that the Inland Revenue, as the responsible body, will repay all the money that was taken, in error, in taxation. In addition, a sum may be paid in compensation. That is governed by legislation, and it is a matter for the Inland Revenue, not the MOD, so I cannot comment any further.

Mr. John Greenway (Ryedale): I am grateful to the Minister for his statement. My constituent Mr. Perkins has asked me personally to thank the Minister for the interest that he has shown in this matter. However, I do not think that he will be particularly pleased by the clarification of his own case which the Minister gave at the Dispatch Box. The Minister appears to be saying that despite Mr. Perkins's successful appeal, the MOD is still not satisfied that he was invalided out of the Army in 1959. Mr. Perkins is convinced that he was, and I do not see how the appeal could have been upheld if that were not the case.

Is not the tragedy of this whole affair that people such as Mr. Perkins, who are not of great means, have for forty-two and a half years lived on less than they were entitled to from the state? I honestly implore the Minister to send some money to Mr. Perkins as quickly as he can, and to make sure that all those who are entitled to this refund get their money while they still have an opportunity to improve their quality of life.

Dr. Moonie: I certainly agree that the money should be paid as expeditiously as possible and we have managed

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that in the vast majority of cases. Mr. Perkins' case is complicated and, on grounds of brevity, I stopped reading my carefully prepared brief as I anticipated that the hon. Gentleman might ask a question. There are a couple of very complicated issues to look into and I am taking a personal interest in the case. I shall ensure that it is resolved as quickly as possible.

Mr. Dennis Skinner (Bolsover): Is not the truth of the matter that my hon. Friend has taken a decision, against the MOD chiefs and all the rest of them, that Tom King, Jonathan Aitken, Malcolm Rifkind and all those other Tory Defence Ministers failed to take? I like listening to my hon. Friend when he makes a statement at the Dispatch Box, putting right what has been wrong for many, many years. I well recall his statement on putting it right for those who were prisoners of the Japanese in the war—£10,000 apiece. Rather than being curmudgeonly and nitpicking like the Liberals and the Tories, let me say that Labour Members are glad when he stands up to make a statement and puts right the wrongs of all those Tory Ministers.

Dr. Moonie: I thank my hon. Friend for his kind remarks. The important thing is that a mistake has been identified and substantially rectified. We must ensure that we find the rest of the cases involved and that the mistake is not repeated.

Mr. Crispin Blunt (Reigate): I thank the Minister for his statement and congratulate him on ensuring that the money is coming out of the Treasury, not the defence budget. I am grateful to him for putting this injustice right. Like generations of service pensioners, he is aware that officials who run pensions have been assiduous in defending the defence budget and the Treasury interest when dealing with pensioners over the decades and that there is a glaring injustice that should be addressed.

Some pensioners retired at a time of high inflation and members of my family, including my father, were affected by that. In particular, those who retired in the 1970s are in an absurd position. For example, a major who retired in 1975 having given only 33 years service is on a pension of several thousand pounds a year more than a major who gave longer service to Queen and country and retired in 1977. Will the Minister undertake to consider that injustice with an open mind and to discuss the issue openly with the Royal British Legion?

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