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Pensions (Amendment) Bill [H.L.]

1.16 p.m.

Lord Morris of Manchester: My Lords, I beg to move that this Bill be now read a second time.

Of all the duties it falls to Parliament to discharge none is of more compelling priority than our bounden duty to act justly to men and women who were prepared to lay down their lives for this country and the dependants of those who did so. It is that duty the Bill's supporters will be addressing in this debate. Sadly, we shall be doing so at a time of continuing distress for hundreds of the men and women who served in the Gulf conflict. Having been fit and well when they went to the Gulf more than seven years ago, many are now very seriously ill. Their illnesses are still undiagnosed. Others have gone to their graves with a deep sense of injustice, leaving behind aggrieved dependants, some of them wives who are widowed while young and fear poverty when they are old.

There can be little doubt that had the provisions of this Bill been in force seven years ago their problems and needs, as well as those of others in the ex-service community with unresolved claims, would have been seen in far sharper focus in Whitehall and Westminster and subjected to much closer public and parliamentary

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scrutiny. The Bill has been most warmly welcomed by the ex-service community. Like me, they are well aware of the work of the Central Advisory Committee on War Pensions. Indeed, I used to chair the committee 24 years ago. But many who know most about its work today feel that it has become a vehicle for government pronouncements rather than for debate in depth about the concerns of war pensioners.

"Over the years", says one CAC veteran, "the committee's role has changed in practice and its value has declined". A main purpose of this Bill is to ensure that the ex-service community and Parliament can take an informed and considered view of the adequacy of service, war and war widows' pensions and related benefits. The Central Advisory Committee might itself be asked to contribute to the compilation of the annual report for which the Bill provides. At the very least it should be free to debate the report.

It was said recently:

    "They are a unique group of workers because of the nature of the work they do, the hours they put in and the places in which they operate".
That may sound like a quotation from a campaigning trade union leader in support of a bumper pay rise. In fact, as my noble friend Lord Haskel will doubtless have recognised, they are the words of a ministerial colleague of ours when justifying, on 3rd February 1998, the exclusion of the Armed Forces, and only the Armed Forces, from the legislation for a national minimum wage. Never was there clearer recognition by a government of the unique status of the Armed Forces as public servants of the nation. Whatever the challenge, they unfailingly respond with total professionalism and commitment. They reflect huge credit on this country and inspire both national pride and international envy. It is not the quality of their equipment but the qualities of the men and women who serve in them that set our Armed Forces apart from others.

But what of their rewards and provision for the security of their families? They are employed by the biggest employer in Europe--the Ministry of Defence--whose reputation as an employer is of fundamental importance to the Government's moral authority in exhorting other employers to adopt forward-looking employment policies, as they frequently do. All government departments have a responsibility to act as good and caring employers, but its size puts a special onus on the Ministry of Defence to be seen as a model employer, in terms not only of rewards for serving personnel but also of dignified provision for those who have completed their service. The MoD's standing as an employer is indeed best judged by its treatment of service pensioners.

Yet several cases that give cause for concern have been drawn to my attention in anticipation of this debate. The first is that of Catherine Koe, the widow of an Army major. Her husband served for 32 years and his early death in 1971 was hastened by the studied inhumanity and barbarous cruelties of existence in a Japanese prisoner-of-war camp. Mrs. Koe has lived on

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a meagre one-third rate pension for the past 27 years because the 1956 pension code, under which her husband retired, paid the lowest rate of military pension of any pension code since 1945. I am sure that your Lordships' House will feel that Mrs. Koe deserved--and deserves even more now as an elderly widow--very much better than that from the country her husband served with so much dedication and undoubted courage.

Another cause for concern is the case of Audrey Osland who married her late husband after he completed 30 years in the RAF, including the whole of the Second World War. Sadly, his first wife died before he left the RAF and, because he completed his service before April 1978 and remarried after retirement, Mrs. Osland receives not one penny in widow's pension. That case, too, must cause concern in all parts of this House, more especially since it shows the MoD falling lamentably short of best practice in the private sector.

Again, even in cases where the widow is receiving a pension based on her husband's military service under the Armed Forces pension scheme her pension, like that of a war widow, is withdrawn if she remarries. This is in stark contrast even with normal practice in the private sector, where a widow's pension is awarded to her for life regardless of her future marital status. Again, it conflicts with the report of Sir Michael Bett's independent review of the Armed Forces Pension Scheme, which states that he and his team,

    "found the practice of stopping a widow's pension on remarriage unsatisfactory".
Sir Michael recommended that,

    "In line with private sector practice, a widow's pension should be payable for life".
This has already been adopted in the civilian public service, for example, by the pension scheme of local government officers. So what possible justification can there be now, not only for failing to lead but lagging far behind the private sector and ignoring Sir Michael Bett's recommendation on so sensitive an issue?

The intention of the noble Lord, Lord Freyberg, to speak on the Bill makes this an evocative moment for me. We used to speak, to the same effect, each in our own House; but now we can speak as one in the same House. I know that, as before, he will add eloquently to the voices calling for more dignified provision for service and war pensioners and their dependants. Meanwhile, if I am not allowed to call him "my noble friend", which in literal truth he is, I hope that it is permissible at least for me to describe him as "my noble associate". I do so having long been delighted to strive with him for improvements in provisions that are now in place and for others we are seeking to justify today.

Turning now, in the order of the Bill, to war and war widows' pensions, I am indebted to my noble friend Lord Gilbert and his ministerial colleagues--notably the noble Baroness, Lady Hollis--for reacting so quickly to my plea in the debate on Gulf War illnesses in February for an end to the delay in granting a war pension to Gunner Tom Ford, late of 2nd Field Regiment, Royal Artillery, who came back from the Gulf in broken and rapidly deteriorating health (Hansard, 2/2/98; cols. 480 to 481). To be awarded one's entitlement to a war

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pension, as I was reminded by that case, is no passport to a dolce vita. On the contrary, it recalls that moving passage from Kipling,

    "Think where 'e's been, Think what 'e's seen, Think of his pension--- An' Gawd save the Queen"

It was the Royal British Legion that asked me to raise Gunner Ford's case and they share my pleasure that, within two weeks of the debate on 2nd February, he received an interim award that was followed within three weeks by an ongoing war pension of 70 per cent. So anyone who thinks that speaking in your Lordships' House cuts little ice might reflect on the speed and understanding with which my noble friends reacted to that debate.

As with service pensions, there are nevertheless many causes for concern in relation to war and war widows' pensions. One which heavily underlines the case for this Bill, drawn to my attention by Tom House of the Royal British Legion, is that of Margaret Davies who has now waited four years for a compensation payment to which both the DSS and the Lord Chancellor's Department accept her entitlement. Unfortunately for Mrs. Davies, however, the MoD does not agree and continues to pay her not a war widow's pension but only that of a widow whose husband's death was in no way attributable to his service in the Armed Forces. I cannot believe that, if this Bill had already been law, that kind of anomaly would not have been addressed sooner. I hope profoundly that it will now be urgently reviewed by the Government and with the same result as that in the case of Gunner Tom Ford.

I know that the noble Earl, Lord Effingham, will also be commenting on war pensions, which he does with so much authority, and also how very grateful the War Widows' Association of Great Britain are that my noble friend Lady Dean will speak on their concerns. But there are some issues of general importance that it may be helpful for me to touch upon briefly. The first concerns the need for additional help for ageing war pensioners with severe disabilities. With increasing age the problems of disability intensify and multiply. The average age of war pensioners now makes this a majority problem among them. Lieutenant Colonel Ray Holland of the British Limbless Ex-Servicemens Association (BLESMA) informs me that they have recently put to my noble friend Lady Hollis and her department a proposal to introduce two new age additions. I know my noble friend will want to do whatever she can to help and, since the cost involved is relatively small, I hope very much that she may soon be able to act on the proposal.

This is a very appropriate day for our debate and to remind ourselves how greatly indebted we should all be to those whom BLESMA came into existence to assist, for while in another place they are debating provisions in the Landmines Bill to save people from mutilation, we are met to give more dignity to the remaining years of men and women who are already mutilated and who lost their limbs, acting on our behalf, that others across the world might live in peace, comfort and security.

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Total spending on war and war widows' pensions will cost £137 million less this year, at constant prices, than in 1993-94. This is not because the value of individual pensions and allowances has been reduced, but because the number of pensioners is falling year by year as their average age increases and more and more of the war disabled and bereaved die. Thus simply by holding expenditure on war and war widows' pensions at its present level for a few years, we could make this a time for more generosity to Britain's ageing and ever more needful war pensioners.

With no increase in overall spending we could then also do more to meet the claims of the war widows, for whom my noble friend Lady Dean will speak and for whom the noble Baroness, Lady Strange, would have spoken had she not, very sadly, been prevented by an accident from being with us. She will be deeply missed in this debate.

My submission today has been informed by, among others, Major General Peter Bonnet and Robin Markes of the Officers' Pension Society; Colonel Terry English of the Royal British Legion; Iris Thorogood, Jenny Green and Irene Bloor of the War Widows' Association of Great Britain, as well as by Tom House and Lieutenant-Colonel Ray Holland. For them and for those in whose service they spend their lives, I commend this Bill to the House. I beg to move.

Moved, That the Bill be now read a second time--(Lord Morris of Manchester.)

1.32 p.m.

Lord Vivian: My Lords, I congratulate the noble Lord, Lord Morris of Manchester, on bringing this Bill to your Lordships' House today. I cannot give greater support to what he has already said in respect of our servicemen and women. Our sailors, soldiers and airmen are unique, as the noble Lord stated. They are the people who provide the defence of the realm and the security of the nation to enable the rest of us to live in peace and tranquillity in our own country. They are the people who risk their lives and who are prepared to make the supreme sacrifice whenever required for the sake of their country.

I submit that there are widespread areas in the Armed Forces pension scheme which are profoundly unfair. All of us, including the noble Lord the Minister, who have any connection with pensions for our servicemen and women, should feel a deep sense of shame. We should make a much greater and more determined effort to correct the injustices in the pension scheme to ensure that when they leave the Armed Forces, their pensions are sound and fair.

All the services are under strength--some more so than others. The Army, with its very welcome increase of 3,300 personnel, must be somewhere in the region of 10,000 below establishment now. Without good and fair pension rates for our servicemen and women, it will become increasingly difficult to recruit the right sort of people for service life. I welcome the creation of a veterans' unit, which I hope will be used to get rid of pension anomalies.

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I wish to focus your Lordships' attention on the profoundly unfair phenomenon known as the "pension trough", which impacts on our ex-servicemen first and then even more severely on service widows. This so-called "pension trough" comes about when pay increases are staged, with half the pay increase allowed in the first six months of the financial year, and the remainder in the second half. To explain this a little further, because pensions are based on pay rates those retiring in the first six months within the same financial year leave with a lower pension than those who retire in the second half. That is totally unacceptable and should be corrected immediately.

An underlying principle of the military salary and of the Armed Forces pension scheme is a concept which is known as "the band of brothers" or "all of one company". Under this concept, all servicemen and women of the same rank, who have given the same reckonable service and who retire in the same financial year, should receive the same basic award of service pension. I think that your Lordships will consider it fair and proper that the military community should have constructed its pension regime on such a reasonable and equitable basis.

But that inherently fair system can go very seriously wrong and operate most unfairly under external influences. The noble Lord gave your Lordships a general example in his opening speech. Perhaps I may cite a specific case. Commander Keith Monnery, after 30 years' service in the Royal Navy, deferred his retirement at the request of his superiors to suit the needs of the Polaris submarine programme. He actually retired in August 1977--in a "pension trough". Had he retired two years earlier, as originally planned, his pension would now be some £5,000 greater than it is. Had he retired one year earlier or later, his pension would still be some £2,000 a year greater than it is. That is profoundly unfair and it is not a befitting way for the nation to look after its ex-servicemen.

Some might feel that the example quoted is from history, but perhaps I may describe the present situation.

First, I must remind your Lordships that since 1971 the independent review body on Armed Forces pay has made annual recommendations on the remuneration package for service personnel. In particular, the review body makes recommendations to the Prime Minister on pay. In view of what has been said earlier about the lack of representation in the Armed Forces--in terms of a trade union or staff federation--your Lordships will recognise the importance of the role of the independent Armed Forces Pay Review Body in protecting the interests of the Armed Forces. I specifically draw attention to the independence of the body, a status which is crucial to its credibility.

As I have said, the Armed Forces Pay Review Body makes recommendations every year about pay. Importantly, under the terms of the Armed Forces pension scheme, the pay rates in force on the day of retirement determine service pension rates. So, the review body's recommendations on annual pay have a direct bearing also on the pensions of those who complete their military careers in that year.

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It is a fact that in four of the past five years the Government have staged the introduction of the Armed Forces pay award, notwithstanding the fact that they have accepted in full the recommendations of the review body. That short-term expedient, as the Government well know, means that the pensions of those who are unfortunate enough to retire in the interim are permanently depressed.

Earlier this year the chairman of the Armed Forces Pay Review Body wrote in his 1998 annual report:

    "Our recommendations [for 1997] were accepted but for the second time in two years, and the third time in four, the implementation of the pay award was staged. We are seriously concerned that this practice has deprived our servicemen and women of a substantial proportion of their recommended annual salaries and is permanently damaging to the pensions of those who retire between stages. We urge that this is not repeated. This year our discussions with Service personnel revealed widespread anger at staging".

In spite of that specific recommendation, and in total disregard of the longer-term implications for pensions, the Government again staged the 1998-99 pay award. Is it really the intention of the Government permanently to depress the pensions of service men and women who just happen to complete their service--which may have lasted 30 to 40 years--while a short-term pay restraint measure is in force? Moreover, the effect is aggravated by the passage of time and is then carried over into widows' pensions.

By any yardstick this cannot be judged an honourable practice. If it is considered essential to stage the introduction of a forces pay award I urge the Government to adopt the practice of deeming of pay rates for pension calculation purposes. This would not create a precedent as that measure has been adopted on a number of occasions in the past, including arrangements for Members of another place in 1996. This is nothing but scandalous behaviour by Members of Parliament who have elected themselves deemed pension rights while denying them to members of the Armed Forces whose lives are at risk.

Many of those deployed on operations face death daily. A precedent has been set for Members of Parliament. Let that now be applied to all members of the Armed Forces.

I call upon the Government to reduce the disparity in the pensions paid to those who have suffered for a long time, not by large retrospective payments but by modest payments to correct their situation in future. I ask the noble Lord the Minister to explain why this cannot be done.

1.41 p.m.

The Earl of Effingham: My Lords, I too thank the noble Lord, Lord Morris of Manchester, for introducing this important Bill in your Lordships' House. I declare an interest. I work for the Royal British Legion. It is significant that its pensions department now handles over 90 per cent. of all claims that go to appeal tribunals of which there are some 10,000 annually.

I should like to address two particular areas: the entitlement of reservists and medical conditions. Many reservists and TA personnel (over 600 people) who were

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deployed in the Persian Gulf for Operation Granby in 1991-92 are being denied access to the attributable benefits for reservists scheme (ABRS) on the basis that they were not medically discharged from Gulf War service. However, although approximately 420 of these people are in receipt of a war disability pension as the direct result of their Gulf War service these same servicemen and women were not informed that they could have asked for a medical discharge. They feel that they are being treated differently from regular soldiers and thereby discriminated against. This would appear to be in breach of the Ministry of Defence instructions that they would not suffer financially but would be treated exactly the same as regular soldiers in terms of pension entitlements.

Territorial Army and Regular Reserve personnel who volunteered for Gulf War service were told by the Ministry of Defence that in the event that they should become a casualty they or their spouse would receive the same benefits as a member of the regular forces under the provisions of the ABRS. This advice was factually incorrect. Due to an anomaly in the regulations those who became ill and injured on embodied service, would not qualify.

I turn to the question of medical conditions. Many former Far Eastern prisoners of war claim that the cycad seed which formed part of their near-starvation diet led to the development of neurological disorders in later life. This is supported by medical evidence related to the local population of the areas where this seed forms part of the dietary intake. The War Pensions Agency has investigated these claims but so far does not appear to have come to any conclusion. Those rejected claims that are now the subject of an appeal in some cases are being delayed pending a DSS policy decision in this matter. Some four years or more have passed since the submission of papers to the DSS and still no response.

A similar situation applies in cases of stress and hypertension. An opinion was obtained from a leading cardiologist. That provided compelling evidence of a relationship between these two medical conditions and their application to service in the Armed Forces. Many war pension appeals are being adjourned and delayed while the War Pensions Agency considers its response. We understand that that is unlikely to be forthcoming until the end of this year. Considering that this option was submitted in September 1997 and that the majority of war pension appellants are of advanced age, this is not a satisfactory state of affairs. Presumably a consultative body with the necessary expertise and authority would be able to resolve such matters or at least provide strong recommendations in a considerably shorter space of time.

In summary, the Gulf War and what happened to many of those who took part in it is still the subject of investigation and research. However, the conflict also highlighted anomalies in eligibility for compensation payments to reservists as opposed to members of the regular forces. There would appear to be no provision for reservist payments of invalidity benefits by the Ministry of Defence if they were not the subject of a medical discharge. Many reservists claim that they

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developed conditions not post-service but while still serving and that, irrespective of whether that led to their medical discharge, they should be treated on an equal basis with members of the regular forces.

Although the reservists can claim DSS war pensions, the regulations further discriminate against them by placing on them the burden of proof, even if a claim is made at any time after leaving the services. It is to be hoped that the Government's current review of service compensation will address these injustices and provide long needed reforms. It is also hoped that the review will provide an opportunity for consultation with the service organisations who are closely involved in such matters and that it will not suffer the same fate as its predecessor, the Bett Report, which now seems to have been consigned to history.

As many noble Lords are aware, there are no independent appeal procedures which can be applied to Ministry of Defence decisions. A consultation body such as that proposed in the Bill will provide for arbitration in such cases and is welcome.

1.48 p.m.

Baroness Dean of Thornton-le-Fylde: My Lords, I am pleased to support the Bill introduced by my noble friend Lord Morris of Manchester, particularly in view of his marvellous record over the years in speaking out in this particular area. Only a small number of noble Lords are taking part in this debate but we come from all sides of the Chamber. This matter does not give rise to any political issue by any stretch of the imagination.

I should like to concentrate on the issue of war widows. I do not do so because I believe that other parts of the Bill are unimportant. The last time this matter was discussed was during the passage of the Pensions Bill. It was a different day of the week and time of day but one could not sit down in the Chamber. The Benches on all sides of the House were full. I recall the remarkable speech of the noble Lord, Lord Freyberg. When we came to divide, the political disciplines were applied, but I do not believe that many noble Lords in this Chamber were convinced by the counter-arguments. Although time has moved on, the general principles that underlie the issue have not changed. Had we taken the right decision then, I do not believe that we would be discussing this matter in this way today.

When the proposed change affecting war widows was discussed under the Pensions Bill in 1995 in another place, two reasons--I shall call them excuses, because that is what I believe they were--were given for not conceding the point of principle that when a woman, widowed as a result of the death of her husband in the service of his country, received a widow's pension, should she remarry, she lost her pension. That is the key issue upon which I should like to concentrate.

There were two, as I say, excuses then given. The first was the perceived effect on civil servants in other areas of work. Although I do not have an interest to declare today, I was a member of the Armed Forces Pay Review Body. I find it difficult to make a direct comparison between asking personnel when they sign up to be prepared to give the ultimate--their lives and

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therefore the future of their own families in many cases--and persons who are recruited into employment in other civilian jobs, and who are paid by the Crown, as are Service personnel. Nevertheless, that was put forward as a reason.

From April this year, the LGA has done the right thing by widows when their husbands die in service. They receive a widow's occupational pension derived directly from their husband's occupational pension contributions.

The other reasons given was that it would be entirely wrong. The Bett Report dismissed that, and rightly and not surprisingly so, because it was not a new principle, it was contained in the Goode Report, which was the key report which brought about the Pensions Bill itself.

My experience in industry is that today occupational pension schemes, by and large, provide a widow's pension for life under the husband's occupational pension scheme. I do not accept that those are principles which should prevent this happening. If one wants to be mercenary and look at the cost factor, we are not talking about something that will increase the cost to the nation. But even the economic arguments do not stack up when one studies them.

I happen to have a part-time public sector job. I pay 6 per cent. of my salary to the pension that I shall eventually receive. There is an abatement of 7 per cent. in the pay of Armed Forces personnel. So the abatement is an even higher figure. It is not as though the fund is a non-contributory one. It is a pension contributed to from the salary of those service personnel.

The noble Lord, Lord Vivian, referred to the fact that the Armed Forces have no independent representation on their behalf other than the Armed Forces Pay Review Body. They do not have the right to join a trade union, and they do not have a federation. So who speaks for them? That is a key question. Although pensions are not directly in the remit of the Armed Forces Pay Review Body, whenever I met Service personnel--and I met a great many of them, whether it was on their ships in the Navy, on air force bases, or soldiers--they all raised with me the issue of pensions. They were all concerned about it. They had no idea what they could do to get their problems aired and their concerns aired about their widows if they lost their lives in the service of the nation. On those facts alone, the Bill is worthy of a good hearing.

There is a third reason. There is something wrong with a system that encourages widows not to remarry, although they may enter into a relationship, because on remarriage they will lose their pensions. That is not a threat many other widows in Britain have to face. The widows of people in industry whom I used to represent would not have that to face. They do not regard their pension as a hand-down from the state or from the private sector employer: they paid to it. It was part of their overall employment package. That is what I interpret it to be in the case of the Armed Forces.

We believe in families--this is not a party political issue--and support them; we believe in the family unit; and in Britain we believe in marriage. There is something wrong with a situation where a woman

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knows that if she remarries she will be penalised financially. That is wrong. It is especially wrong if she marries someone who may not have sufficient income to care for the children of the marriage in the way that her previous husband was able to.

I approach this issue on fairness and responsibility grounds. We have a responsibility to these people and their families. I have always judged good employers on how they judge people in the round, and not just on the level of their salary; how they regard them as employees. These people sign up knowing that they could give their lives in the service of their country. On those grounds, the Bill is worth a hearing. I shall listen with great care to what my noble friend the Minister says in response. I cannot think of any logical reasons for going against the Bill.

1.56 p.m.

Lord Freyberg: My Lords, I, too, congratulate the noble Lord, Lord Morris of Manchester, on bringing the Bill to the House and thank him for his kind words about me. In the other place he has a well-deserved reputation as an assiduous protector of many groups, including the Armed Forces. I know that from my own experience. When I started out here three years ago, speaking on several of these issues, I received tremendous support and kindness from him. It is wonderful to be taking part in his Bill which he has so ably moved. As he said, the welfare of our servicemen and women, and their dependants, is an important issue. Parliament has a special responsibility to them and it is not, as the noble Baroness, Lady Dean of Thornton-le-Fylde, said, a matter of party politics.

The noble Lord highlighted some of the shortcomings in the current Armed Forces' pensions and benefits regimes. I would like to expand on the problems underlying two of the concerns to which the noble Lord referred.

The Armed Forces Pension Scheme is 40 years old. It has been periodically modified, to match new social norms, changes in legislation and wider pension practice. So, for example, in 1973, when it became standard to pay a widow a pension based on half her deceased husband's pension instead of one-third, the rules of the Armed Forces Pension Scheme were updated. Thereafter, new entrants to the scheme enjoyed a half-rate pension for their widows and those serving at the time were given the opportunity to buy into a half-rate pension. The provisions from 1973 onwards are seen as fair and proper.

Unfortunately this is not the case for those whose plight prompted the change in the rules in the first place. Those who completed their service before 1973 never had the opportunity to buy into a higher rate scheme and their widows' entitlement remained at one-third. This affects the most elderly widows, who in addition receive far smaller pensions than those who served subsequently, and who current struggle to survive. This is absurd and unfair.

In a similar way, in 1978 the rules of the Armed Forces Pension Scheme were changed to allow a widow of a post-retirement marriage to receive a pension based

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on any service her late husband gave after 1978. Those who had already completed their military careers when the new rules came in were unable to hand on any pension to wives married after they had retired, whatever their length of service. It should be stressed that this situation is particularly acute in the Armed Forces because of compulsory early retirement ages, which did not (and do not) apply to the same degree to members of the Civil Service, the police force or the fire brigade, or other public services.

So, I challenge the logic and propriety of identifying inequities and anomalies in the Armed Forces pensions and benefits regime without offering remedy to those affected. Changes made to the provisions for widows have been essential and welcome, but the lack of new arrangements for the very people who are suffering is iniquitous.

Let me give you two examples to illustrate the unfairness of the prevailing regime. Mrs. Jean Dewdney's late husband served in the infantry for 34 years. This included service throughout the Second World War, and in Korea, where he was appointed MBE. He retired in 1962 and his widow has had to manage on a one-third rate pension since her husband's death in 1987 because he retired before 1973. She is now nearly 73 years old and receives a pension from his army service of £3,634--a measly sum to live on.

Mrs. Anne Sweetapple is in an even worse situation: she receives no service pension. Mrs. Sweetapple married her late RAF husband a little over one year after he had completed nearly 37 years' service. They were married for 28 years and she nursed him for several years before he died two years ago. She receives no service widows' pension because he completed his service before 1978.

I find the cases like this very disturbing. It just doesn't seem right that women like Mrs. Dewdney and Mrs. Sweetapple should be left so inadequately provided for. Urgent action is required. Such women are increasingly old and vulnerable, and fearful of the future--often unable to pay for basic needs.

Their pension provisions are grossly inadequate, as subsequent changes in the law recognise. Their needs will not go away. The inequity between the two will continue to cause great distress. It should be addressed as soon as possible.

The argument against retrospection is understandable, but, as the noble Lord, Lord Morris, has pointed out, the circumstances of the Armed Forces have always been acknowledged as special. Moreover, arguments against retrospection are no reason for leaving vulnerable people in poverty while providing for others. They must feel as if their plight is being deliberately ignored in the knowledge that the passage of time will simply remove the problem.

I understand that the MoD is again reviewing the Armed Forces Pension Scheme for future entrants to the forces. The House would like to be assured that the review will not only identify the shortcomings of existing provisions but consider measures to help those already suffering under them.

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It is morally unacceptable to identify and acknowledge serious shortcomings and to then allow them to persist. To this end, I hope that the Minister will ask the MoD review team to consult former service organisations in order to determine the views of service pensioners.

Finally, I call upon the Government to grasp this late opportunity to ensure that the widows of servicemen who have served our nation are able to live out the last years of their lives with dignity and some financial security.

2.3 p.m.

Lord Randall of St. Budeaux: My Lords, I beg the indulgence of the House in speaking in the gap. I shall confine my comments to three or four sentences. I am pleased to associate myself with this Second Reading debate and the Bill. I admire the way that the noble Lord, Lord Morris, seems to have spent most of his life caring for people. He was Minister for the disabled and served terrifically well as chairman of the parliamentary pension scheme for almost 20 years. Now he is taking steps in respect of service pensions, war pensions and war widows' pensions. The essence of the Bill is worthy and I hope that it will be supported at all stages as it proceeds through both Houses.

Clause 1 relates to the production of an annual report. The idea is eminently sensible. It would have the effect of ensuring that the Government are fully aware of the concerns and what is happening in this important field with regard to our servicemen.

We have heard that there is a feeling of unfairness at the way ex-servicemen and women and widows are being treated. I shall not go into details. If the report does anything to overcome that feeling of unfairness, then the whole matter is justified. If there is unfairness, then published reports to ensure that there is accountability are worthy things.

Producing such a report would institutionalise the concern of the Government for people who have served our country in such an admirable way--people who have given their lives, people who have suffered. Many of our fellow Peers walk with difficulty because of what happened during the war when they were shot at and experienced bombs and other horrible things.

The report, which is the essence of the Bill, is worthwhile. It is laudable. I hope very much that the Bill receives support at all stages in both Houses and goes through on the nod. It is not complicated; the principle is simple. I am pleased to support the noble Lord, Lord Morris of Manchester, in his enterprise.

2.6 p.m.

Lord Goodhart: My Lords, we are most grateful to the noble Lord, Lord Morris of Manchester, for introducing this Bill today. As all noble Lords are aware, his record of service not only to the war disabled but to all disabled people is outstanding and unique in this country today.

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Those who have been disabled through military service, or whose husbands have been killed in war service or died as a result of that service, are especially deserving of the gratitude of this country. Some pensioners were disabled, or lost their husbands, in the cause of defending this country from the desperate threat of World War II--a war in which the grandfather of the noble Lord, Lord Freyberg, played such a distinguished part. The loss and hardship of others are no less real and deserving if they were suffered as a result of resistance to aggression and violence, even if that aggression posed a less direct threat to the United Kingdom. One thinks of the wars in Korea--in which a number of my National Service contemporaries were killed or disabled--the Falklands, the Gulf War and, more recently, Bosnia; or if the disability or death was caused in the process of peacekeeping operations in Northern Ireland. Fortunately, the number of new pensioners remains small. However, even now there is the possibility of further deaths or grave injuries in Northern Ireland; and there is a possibility of further involvement in places such as Kosovo.

The services, war pensioners and war widows are a group who have always been supported by this House. It was as a result of pressure from this House in a debate on the Pensions Bill, subsequently the Pensions Act 1995, and in particular pressure from the noble Lord, Lord Freyberg, that Section 168 of that Act was incorporated. It restored widows' pensions to those who had remarried but whose second marriage had terminated through death or divorce.

The noble Lord, Lord Morris, and the noble Baroness, Lady Dean of Thornton-le-Fylde, both spoke movingly in support of the proposition that widows should retain their pensions following their remarriage. I hope that the Government will listen to those arguments. It is a total anachronism nowadays that any woman's pension should be lost by her remarriage.

I also hope that the Government will support proposals made by the noble Lord, Lord Morris, for age additions for the older service and war pensioners and war widows. I hope that the Government will deal with the anomaly raised by the noble Lord, Lord Vivian. It is an anomaly caused by staged pay awards and is clearly unjust.

The Bill is directed to preventing unnecessary hardship to recipients of service pensions, war pensions, and war widows' pensions. The hardship of service pensioners, war pensioners and war widows is part of a wider context. It should be the aim of this or any government to ensure that all pensioners receive pensions which are adequate to provide a decent standard of living in retirement. How that is to be done is a matter for debate. It is a debate currently taking place within the Government and will soon become a matter for wider debate. It is not the occasion for that wider debate today.

We on these Benches warmly welcome the initiative of the noble Lord, Lord Morris of Manchester. We support the Second Reading of the Bill and ask the Government to treat this now small and especially deserving group, whose numbers are declining, as generously as possible.

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2.11 p.m.

Baroness Byford: My Lords, I welcome the opportunity to respond on behalf of the Conservative Benches. I thank the noble Lord, Lord Morris, for bringing the Bill forward. We have a tremendous commitment to, and give thanks for, all those who have served this country in the past, and continue to do so. They are exceptional people who always put country before their own individual personal gain.

We welcome the Second Reading of this Bill which requires an annual report to be made on service pensions, war pensions and war widows' pensions. It will lead to greater and open awareness of what goes on. I was not in the House when the previous Bill was passed. I have sat humbly among your Lordships and was touched by the contributions made by noble Lords with great expertise from all sides of the Chamber. In this House we have an age range which represents those with experience of more recent times and those with great knowledge of earlier times. Before moving on to specifics, I pay great tribute in particular to the British Legion but also to the other myriad of organisations which help our service people.

I put on record our tribute to all those who served in our forces. They have given great commitment. Many of us in this Chamber today know only too well their record of service in the past. I am sure it is right that we, in our turn, should make sure that their pension provision is properly met.

The noble Lord, Lord Morris, asks quite simply that an annual report be placed before Parliament and that it shall include the number of pensions and an assessment of payment levels to make sure that those pensions are sufficient to prevent hardship. Listening to the debate today I was deeply moved by the many examples which were brought forward by noble Lords. My noble friend Lord Vivian touched on the problem of pension troughs and delay. I was not aware of that. He mentioned also that the pay awards are staggered. I hope that the Minister will respond to that in replying to the debate.

The noble Earl, Lord Effingham, referred in particular to pension entitlements and the fact that benefits should be relevant to the people concerned. He also raised the problem of medical conditions which ex-service people must overcome. At present, there is no right of independent appeal which, again, the Minister may wish to address.

The noble Baroness, Lady Dean, spoke of war widows of whom I have met many over the years. I too find it difficult to understand why their pensions are removed after remarriage.

The noble Lord, Lord Freyberg, spoke of pensions and the pre-pension position of the ageing and older pensioners. The number of those is obviously dwindling and I hope that the Government may feel able to do something more practical for them.

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The noble Lord, Lord Randall, and others raised the unfairness of the system. That theme has been present throughout our debate. However hard one tries, anomalies tend to arise.

If we give the Bill a Second Reading, the report provided in it will make it possible for Parliament to be able to see how well the agency is working, and to ensure that checks and balances are made. We shall be able to call into account the way in which pensions are provided. It is proper that those who serve our country should be looked after properly.

I believe that the noble Baroness, Lady Dean, spoke of the serious consideration that she hoped we should give this matter today. I am sure we all agree. The review should encompass many of the concerns and questions which have been raised today. I wish and hope that this Bill will be accepted by the House and that many of the points which have been dealt with in great depth by noble Lords with much experience will be taken on board by the Government. We are all grateful to those who have served. In our turn, we all wish to make sure that we look after them after they have looked after us.

2.17 p.m.

Lord Haskel: My Lords, I thank my noble friend Lord Morris for giving us this opportunity to speak about pensions and compensation available in respect of injury, illness and bereavement attributable to service in the country's Armed Forces. I add my tribute to all those who have been disabled or bereaved as a result of service to this country in the Armed Forces. The Government fully recognise the debt of gratitude owed to all those who made such sacrifices.

I pay tribute also to the ex-service organisations which act in the interests of ex-servicemen and women and their dependants. I have great admiration for the valuable work they do and thank all noble Lords who have spoken today on their behalf. Also, I acknowledge the dedication of my noble friend Lord Morris to matters relating to disabled people. I pay tribute to his distinguished service to war pensioners, disabled people and victims in general.

My noble friend's Bill brings before us today the matter of war pensions, war widows' pensions and service pensions. They are not all dealt with by the same department. War pensions and war widows' pensions are the responsibility of the Department of Social Security while service pensions are the responsibility of the Ministry of Defence. Nevertheless, I shall do my best to address all aspects of the Bill. The legislation contains two main provisions. The first is a request for information about war pensions and Armed Forces pensions. The second is a requirement for a regular assessment of whether pension levels are set sufficiently high to avoid hardship.

I shall start with a matter of information. There is already a statutory provision for a report on war pensions to be presented to Parliament each year. This report, the War Pensioners' Report, details the current number of war pensions' recipients and also gives

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information on the various issues affecting war pensioners considered by the statutory central advisory committee on war pensions. The committee meets twice a year with the Minister who has special responsibility for war pensions. It is an independent body; it is not a voice of government, as noble Lords seemed to imply. Committee members represent all major ex-service organisations such as the Royal British Legion, the British Limbless Ex-Servicemen's Association, and the War Widows' Association of Great Britain. Indeed, I have with me the War Pensioners' Report for 1977. On page 22 of the document there is a picture of a young MP who has a lovely wave in his hair. The caption below the picture says:

    "Mr Alfred Morris MP, Minister with special responsibility for war pensions, during his visit to the Princess Louise Hospital, Erskine near Glasgow"
That report has been in existence for a number of years, and I believe that noble Lords are well aware of it.

A further statutory annual report is presented to Parliament by the chief executive of the War Pensions Agency. This report, the War Pensions Agency Annual Report and Accounts, details how the war pensions scheme is administered and includes details of performance targets and achievements. I believe that that deals with the point raised by my noble friend Lord Randall about the necessity for openness to overcome unfairness.

At present the Ministry of Defence does not present routinely an annual statement on service pensions paid under the Armed Forces pension scheme. But each year detailed information about the level of armed forces pensions, including ill-health benefits and attributable injury benefits, is published in Orders in Council for the Royal Navy; in the Army Pensions Warrant; and in the Queen's Regulations for the RAF. These documents fully describe the rules of entitlement for pensions benefits under the scheme and record the levels at which pensions are set. Thanks to the introduction of resource accounting, I am pleased to say that, from 1999, this information will be supplemented by an annual statement of accounts to be laid before Parliament. The point I wish to make is that I believe that, taken together, all this information is more than adequate to meet the requirements of my noble friend's Bill for information about pension levels.

Perhaps I may now turn to the matter of adequacy as regards my noble friend's Bill. I shall take, first, service pensions. The noble Lord, Lord Freyberg, reminded us that the foundations of the Armed Forces pension scheme were laid in 1959-60. As he said, a number of improvements have been made since that time. It is a non-contributory, salary related occupational scheme. The retirement age for Armed Forces personnel is 55, by which time most individuals have earned a full career pension. Immediate pensions are payable on retirement at younger ages after periods of service as short as 16 years for an officer, or 22 years for a serviceman or woman of other rank. Pensions are increased annually in line with the rate of inflation so that they maintain their purchasing power.

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The scheme contains a range of ill health and injury benefits. Those retiring on ill health grounds can receive a pension after two years' service, and after five years' service the pension benefits are enhanced compared with normal pensions. Those becoming ill or injured as a result of their work may be paid additional benefits, known as attributable benefits, depending on their degree of disability. The pensions of individuals who are retired for attributable reasons are tax free.

The Government Actuary periodically assesses the value of the Armed Forces Pension Scheme. His most recent evaluation confirms that its benefits remain greater than the generality of occupational pension schemes. Nonetheless the scheme is kept under review and it continues to evolve and change in line with current legislation and policy. On 8th December, the Government announced a review of the current arrangements to compensate ex-service personnel for injury, illness or death. The review was commissioned because the Government shared a number of concerns--many of which were stated in this debate today--about the anomalies and complex nature of the existing arrangements.

I can confirm that the review is looking at all the compensation schemes available--the noble Lord, Lord Freyberg, asked about that--including the war pensions scheme, and the inter-relationship between them. The aim is to devise a modern, fair and simplified scheme which would apply to all service personnel killed or disabled as a result of their service. The main focus is on people who will join the forces in the future but the review will also consider existing apparent anomalies. We will publish the outcome of the review in a consultation document. Consultation will involve all those with an interest in the area, including the ex-service organisations.

Turning to the levels of war pensions, this Government have fully protected the purchasing power of war pensions, by uprating them in April this year in line with the retail prices index. As regards the adequacy of the rates of war pensions, let me compare those we provide for our war pensioners with those we provide to civilians in respect of disability or bereavement. For example, a severely disabled ex-serviceman or woman could receive currently a total tax free war pension of over £400 a week. The equivalent payment under the Social Security Industrial Injuries Scheme would be £344.

A former private who has served five years in the Army, and who is invalided as the result of a severe training injury and whose disablement is assessed as 100 per cent. could receive a tax free attributable pension from the Ministry of Defence of just over £4,000 a year. With the maximum war pension, that would give him a total annual income of some £24,000, all tax free. That is not the sort of income that could be considered to put a man or woman in hardship.

I should explain at this point that financial recognition in respect of disablement or death arising from service in the Armed Forces can come from more than one source. A disabled ex-serviceman can be paid a war disablement pension from the Department of Social

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Security and can also receive an attributable service pension from the Ministry of Defence Armed Forces Pension Scheme. The same principles apply regarding war widows' pensions. Under the war pensions scheme, a war widow's pension may be awarded where the late husband dies as a result of service.

The majority of war widows receive currently a total weekly pension of £157. That amount comprises the standard rate of war widow's pension of £83.90 a week, an age allowance, and a supplementary pension of £54.70.

Again, to put the total pension into perspective, I should explain that the standard National Insurance widow's pension is £64.70 a week, around 25 per cent. lower than the standard war widow's pension, and less than half the full war widow's pension payable to a widow aged 70 or over.

So, taking an overall view of war pensions income compared with that for the whole population of this country, noble Lords may find it helpful to know that figures based on the 1995-96 Family Resources Survey indicate that war pensioners' weekly incomes were within a few pounds of the average income of the whole population--£287. That average includes groups in full-time work. That perhaps demonstrates the adequacy of some of the pensions.

Noble Lords raised matters of concern. My noble friend Lord Morris raised the case of Mrs. Koe and Mrs. Osland. I cannot discuss any individual case now, but I will write to my noble friend. The noble Lord, Lord Freyberg, raised the case of Mrs. Dewdney and Mrs. Sweetapple. Again, I will write to the noble Lord, as I cannot deal with individual cases.

Concern was raised about the matter of war widows remarrying. My noble friend Lady Dean spoke eloquently about the issue and it was mentioned by other noble Lords. Cessation of widows' pensions on remarriage with discretion to restore on second widowhood is a feature of most public service schemes. It is not an issue that can be looked at in isolation from the rest of the public service.

The principle of spouses' pensions for life has been conceded for local government employees on the basis that local government pension schemes are funded schemes, and that the cost of the improvements will have to be found from within the authorities' pension funds. There are no direct public expenditure implications. The current review of compensation arrangements for death or injury to service personnel will, however, provide an opportunity to re-examine the arguments. We shall certainly take into account what has been said in the debate today.

The noble Lord, Lord Freyberg, raised the question of pre-1973 widows. A supplementary war widows pension may be awarded to pre-1973 war widows; that is, to the widow whose husband's death was due to service before 31st March 1973.

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That supplementary pension was introduced in 1990 in order to bring overall pension provision for pre-1973 widows more into line with that for the widow whose late husband's death was due to service on or after 31st March 1973 and who received an attributable pension under the Armed Forces pension scheme administered by the Ministry of Defence. Therefore, we have tried to deal with the question of pre-1973 widows.

My noble friend Lord Morris raised the question of deterioration through age and the additional problems faced by war pensioners. Age allowances are payable to war pensioners aged at least 65 whose disablement is assessed at 40 per cent. or more. A war pensioner may apply at any time for a review of his case if he considers that his condition has deteriorated.

My noble friend also referred to the issue raised by the British Limbless Ex-Servicemen's Association in relation to age allowances for war disabled. I have to explain that these allowances are unique to the war pensions scheme and were introduced to ease the double burden of age and relatively severe disablement. The allowances currently range from £7.40 a week for those aged 65 or over whose war pensions disablement is assessed at 40 to 50 per cent., to £22.90 for those whose disablement is assessed at over 90 per cent. I understand the noble Lord's proposal, but those are not insignificant amounts. In isolation, it would be difficult to justify an increase in that war pensions preference. I will, however, ensure that the noble Lord's proposals are kept in mind.

The noble and gallant Lord, Lord Vivian, raised the question of the pensions trough and staging, and gave us an example. Certainly this can lead to anomalies whereby those who are about to retire can receive lower pensions than those already in retirement. This is because pensions are based on pay. Once in payment, pensions rise in line with the retail prices index. This matter affects all public service pension schemes. It is confusing. We cannot treat Armed Forces pensioners in isolation. We note the noble Lord's suggestion on deeming pay rates through pensions. I am sure that that suggestion will be considered by the Committee which is reviewing these matters. I can assure the noble Lord that we have no intention to depress pay through staging, but we have to keep within public expenditure limits.

The noble Earl, Lord Effingham, raised the question of reservists in the Gulf. The Ministry of Defence has received a number of representations from Gulf veterans about their entitlement to invalidity benefits under the provisions of the Armed Forces Pension Scheme. Claimants have questioned the status of members of the reserve forces for the purpose of determining eligibility under the rules, the circumstances and regularity of their discharges and the attributability of particular conditions to service. The Ministry of Defence is currently investigating these claims.

The noble Earl, Lord Effingham, also raised the question of Far East dietary deficiencies. This matter is under consideration and we expect to be able to provide

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an answer during the course of this year. We appreciate the seriousness of the matter, but I understand that there are, in fact, very few cases.

I believe I have responded to most of the points raised by noble Lords. Perhaps I may say in conclusion that the Government will not oppose my noble friend's Bill, but we feel that we are already delivering much of what the Bill asks for. A statutory annual report on war pensions is provided to Parliament each year. Together with the proposed annual statements of the Armed Forces Pensions Scheme, that should provide all the information which my noble friend requires. We have a Service pension scheme which provides benefits greater than do the generality of other schemes and war pensions which are payable at a higher rate than their social security equivalents, roughly equal to the average income of the population. I believe that that should go some way towards satisfying my noble friend's concern about the level of pensions.

Finally, it appears to me that war pensioners and Ministry of Defence pensioners have a secret weapon. That weapon is noble Lords who are in this Chamber today. They will certainly keep the department on its toes. In the debate today they have demonstrated their deep concern about this matter. I hope that the Government will be able to respond to that concern.

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