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Dr. Moonie: I have discussed the matter with the Royal British Legion and the Forces Pension Society and I have no doubt that I shall continue to do so. The policy of successive Governments has been very clear: it is recognised that unfortunate cases have arisen from the pensions trough of the 1970s, but that applies to anyone who retired on a public service pension at that time, not just the armed forces. Successive Governments have also recognised that to put it right now is not possible. No change has been made in that policy by this Administration.

On pensions in general, one reason for establishing a Minister for veterans affairs was to consider how we relate to our pensioners and, to use the modern word, to try to be more user-friendly. We want to make it easier

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for them to contact us, make them feel that they have someone to listen to them and see that injustices are remedied where possible.

Glenda Jackson (Hampstead and Highgate): I thank my hon. Friend for the speed with which he has come to the Chamber to deliver the statement, for his manner and for the apology that he offered to the veterans—in marked contrast to the bizarre ramblings of the Conservative spokesperson. I also thank my hon. Friend for his warm tribute to members of the War Widows Association for the help with which they furnished his Department.

Surely every hon. Member of Parliament can provide help to their constituents, so I have essentially two questions. First, is it possible for the Ministry of Defence to furnish Members with documentation and information which dependants of a deceased veteran may need to make their claims? Secondly, will the moneys be paid in a lump sum; will they be paid over a period of time; and will they remain tax free, even if those who now take the money that this country has owed to them are taxpayers?

Dr. Moonie: Points of tax law are always difficult for a humble Defence Minister to deal with, but I shall do my best.

My hon. Friend's first point was excellent. Clearly, right hon. and hon. Members will be approached by constituents, and I shall attempt in the very near future to give them information which will allow them to identify with constituents who go to their offices or advice surgeries exactly whether they are likely to be entitled to a refund, or at least whether one would be worth pursuing.

On my hon. Friend's last point, the moneys themselves would not be liable to taxation. After all, they were withdrawn as taxation in the first place. The only reason why I cannot give her a 100 per cent. answer is that I am not sure what happens when moneys are added to an estate that is already liable to death duties. Frankly, I do not know whether, in those circumstances, the moneys would be liable to taxation, but I shall write to my hon. Friend on that.

David Burnside (South Antrim): May I welcome the Minister's statement and his apologies to those who have lost out badly? I agree with the Liberal Democrat spokesman, the hon. Member for Hereford (Mr. Keetch), that this subject is once again at the bottom of the agenda. The subjects of widows, pensioners and war widows come up now and again as a result of pressure, but they are way down at the bottom of the agenda, and I support the call for a full debate on this subject.

May I ask the Minister two questions, one of which relates to my part of the world? First, if there are any eligible serving members among those who served full time in the Ulster Defence Regiment in the 1970s, 1980s and 1990s, will they receive the compensation as full members of a British Army regiment?

Secondly, will the Minister comment on Major Perry, who deserves a great deal of praise from this House? According to an article in The Daily Telegraph today—this is not on the original mistake—Major Perry blames this cover-up on

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I would not question the general role of the civil service within the MOD or any Department, but it would appear that there has been a recent cover-up. Can the Minister assure the House that the cover-up and delays on this subject will be investigated and that, if heads have to roll, they will?

Dr. Moonie: With regard to the UDR, like any other serving regiment they would be liable to repayment if such cases arose. If the hon. Gentleman discovers any, I shall be happy if he will bring them to our attention. I strongly rebut any question of a cover-up in the Ministry of Defence. We started to act as soon as we became aware that our previous behaviour, based on what we thought was accurate advice, was wrong. Until recently, the pension society concerned had quite a lot of independence in carrying out its duties and was perhaps not subjected to close enough scrutiny.

As the hon. Member for Hereford (Mr. Keetch) said, only one of our three pension societies made this mistake—the other two did not. It beggars belief that a period of 50 years could have elapsed with one of our pensions organisations doing one thing and two doing another. Given that retired officers meet and discuss matters regularly, it also beggars belief that at some stage somebody did not discover that one of them was paying tax on his pension while another was not. Had that happened, this matter would have been brought to public notice much earlier.

I reiterate that Ministers heard about this matter in 1998. The position was clarified, and organisations outside were contacted and wrote to their members. As progress was being made, we replied to a question in the House on the subject, and we have replied to further questions since. There has been no attempt to cover this up; nor have I, through my officials, been able to establish any evidence in the distant past of an attempt to cover it up.

I believe—I shall have another look at the matter to make sure, although it will be difficult to go back 50 years—that an honest mistake was made in one of our societies in the 1950s. It was then institutionalised and brought into every action after that. It was only through the persistence of Major Perry, whom I again congratulate, that we got to the bottom of it.

Mr. Mike O'Brien (North Warwickshire): I welcome my hon. Friend's statement and the way in which he made it. Is it not important that these payments be made quickly, using a simple, straightforward formula? Some of these pensioners will have been in receipt of benefits at various stages. Can my hon. Friend assure us that there will not have to be an excruciatingly complex analysis of relative incomes and of the impact on benefits of the payments that these pensioners have been denied, which would result in a long delay? We may end up with the Benefits Agency being able to claim money from these pensioners.

Dr. Moonie: I think that these pensions are usually discounted when benefit entitlement is considered. I am not sure how much is discounted, or what the overall position would be, but I should be happy to establish that for my hon. Friend, and to set his mind at rest by writing to him on the subject.

Mr. Elfyn Llwyd (Meirionnydd Nant Conwy): I am obliged to the Minister for the copy of the statement,

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although the notice was rather short. The hon. Gentleman warmly praised Major John Perry for his tenacity and efforts, and I am sure that it is largely due to Major Perry's campaign that this result has been achieved.

If compensation is to be paid, it will have at least to equal the amount plus the interest that would have been earned on deposit account, otherwise it is no compensation at all. I sincerely believe that the Minister will do his best in that regard. Will he consider that issue, and ensure that compensation really does mean compensation?

Dr. Moonie: I shall do my best, but compensation is paid according to a fixed formula. That is covered by statute, and I honestly do not believe that there is anything I can do to vary that. The formula is based on the amount of money taken in error plus an element of compensation to take account of the fact that the money could have been used. Let us face it, no compensation will make up for the fact that many of these pensioners have died without enjoying the benefits of the money to which they were entitled.

Mr. Eric Martlew (Carlisle): I also welcome the Minister's statement. It is a pity that it is 50 years too late, but that is not our fault. On the practical side, I was worried that at the end of his statement my hon. Friend said that people should write to an office in Glasgow. In reality, many of them will contact their Members of Parliament. The procedures that were put in place to compensate prisoners of war worked very well. I suggest to the Minister that we are given a parliamentary number that people can ring, so that we can put cases into the system. I do not want to be the arbiter of people's entitlement. If we do not get this procedure right, we will get more complaints about further delay.

Dr. Moonie: I fully accept my hon. Friend's point. Today, I am giving a holding answer so that anyone with immediate concerns can write to the appropriate address. People have also been phoning our hotline at the War Pensions Agency. Assuming that that continues, we shall ensure that it is capable of dealing with complaints. I shall also ensure that suitable advertisements are placed, and that hotlines are widely publicised, so that as many people as possible can take advantage of them.

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