Select Committee on Defence Third Report


148. We welcome the MoD's decision to embark on the reviews of pension and compensation arrangements. However, the way in which the reviews have been conducted has been lamentable. The MoD has published weak and uninformative consultation documents, containing proposals which are, at best, inadequately thought-through and, at worst, fundamentally flawed. It has repeatedly failed to keep to the deadlines which it has set itself and now appears to be little further advanced in its thinking than it was when the reviews began in 1998. It has gone on to compound these failings by seeking to attach the blame for its incompetent handling of this process to others.[251] It lies squarely with the Department itself.

149. The pension review was hamstrung almost from the outset by the decision that the new proposals should be cost-neutral. This prevented the MoD from taking a sufficiently radical approach to their examination of the present scheme, and what has resulted is, in the Minister for the Armed Forces' own words, a reshuffling of the pack. Any gains in one part of the scheme have been achieved at the expense of reductions in benefits elsewhere. We reject this approach. The MoD has focused too much attention on how it can use the pension scheme as a management tool, and not enough on ensuring it makes proper provision for personnel when they leave the forces. This has had a negative effect: if the MoD had been brave enough to look at taking retention incentives out of the pension scheme, they would have opened up the possibility of developing more flexible and sophisticated man management tools while at the same time freeing the pension scheme from the constraints which the Immediate Pension imposes. The Armed Forces deserve a pension scheme which recognises the unique commitment they make to this country and which compares favourably with what is available to other public service employees. The MoD needs to do a great deal more work on its proposals before they meet this requirement, taking best practice as its starting point, rather than cost-neutrality.

150. The compensation review has failed to produce a valid alternative to the existing system. The MoD's determination to reduce the number of civil negligence cases brought against it by Service personnel has had too great an influence on its approach. This has produced proposals which try to emulate the civil claims system for calculating awards by forcing the compensation arrangements into a format which clearly does not work. We can see the attraction to the MoD of an easier and cheaper no-fault compensation scheme but in many ways the term 'compensation' is a misnomer for what the MoD should be offering. The War Pensions Scheme represents a proper duty of care exercised by an employer to employees who risk their lives and their health in the course of their work. Any new system must continue this duty of care. Civil negligence claims have a separate and valuable role and we would uphold any service man or woman's right to sue the MoD for negligence.

151. The MoD's aim of a simpler, quicker system was admirable, but they have not convinced us that their proposals will produce this. Moreover, fairness and justice should not be sacrificed for simplicity. As a result of the way the new scheme has been designed, fewer claims will be successful, as the MoD has admitted. We believe that reducing provision in this way is unacceptable. We do not believe the scheme proposed does justice to Armed Forces personnel and we cannot support it in its present form.


251   Q 234; Ev 37, 114 Back

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2002
Prepared 9 May 2002