HC Deb 30 January 1980 vol 977 cc1521-32

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Le Marchant.]

11.31 pm
Mr. Tony Durant (Reading, North)

I have pleasure in coming to the House to take up the case of Mr. Ingram, who is the deputy chief fire officer of Berkshire. I have been involved with this case for five years, during which I have been in correspondence with the Home Office. It is necessary for me to set the scene.

The firemen's pension scheme, which has been in operation since the service was denationalised in 1947, enables firemen to transfer between brigades in Great Britain. In these cases a man's pensionable service is transferred with him. In Northern Ireland, in the postwar period, the local authority fire brigades were organised on identical lines with the rest of the United Kingdom. But, because Northern Ireland then had a devolved Parliament at Stormont, the legislation covering the fire service was enacted there and firemen could transfer between brigades in Northern Ireland and take their pensionable service with them.

While pensions were transferable between brigades in both areas, administratively no provision had been included in the scheme for transfers of pensionable service between a brigade constituted in Northern Ireland and an English, Welsh or Scottish brigade. Mr. Ingram joined the service in Northern Ireland in 1950 and served in various parts of the Province. From 1957 to 1960 he was seconded from Northern Ireland to the Fire Service College at Dorking as an instructor. In 1960 he was offered an appointment with the Hertfordshire fire and ambulance brigade.

When Mr. Ingram took up the question of transferring his pensionable service from Northern Ireland to Hertfordshire, the then fire authority refused to agree to the transfer of his pensionable service on the ground that legislation did not exist to enable it to do so. It was pointed out that an amendment to the pensions regulations would be a fairly simple thing to do, but the fire authority still refused to do it at that time.

Mr. Ingram decided to take the appointment in Hertfordshire and press for reconsideration of his case. He has persisted with this over the years, until recently to no avail. As a result of changing attitudes on pension transferability between widely differing forms of employment in recent years, transfer arrangements for police and firemen's pension schemes have been introduced. Under these arrangements it seemed that the anomalies of this case could be covered. Within the regulations framed to cover these transfers there are formulae evolved to convert years of service into money purchase terms. This is sometimes referred to as the "money purchase" scheme. This also enables transfers to take place between schemes with dissimilar benefits.

In theory, the new scheme enables persons joining fire brigades to take advantage of their existing pension arrangements from a wide diversity of employments. It also brought in the Northern Ireland pension scheme, which has always been broadly similar to the firemen's pension scheme in this country. Anyone who transferred from Northern Ireland to a brigade in this country after 1 April 1972 could do so without any detriment to his benefits. In 1978 regulations were made enabling persons who transferred from Northern Ireland before April 1972 to count their Northern Ireland service. Under these later regulations, money purchase was the basis for calculating transfer values. They also provided that Northern Ireland service was calculated on the basis of the age and salary of the transferee at 1 January 1974.

The results in the entitlement in years of service fall far short of the actual years served in Northern Ireland. For example, Mr. Ingram served for nine years and 158 days, and the only service transferred on the pension rights is two years and 47 days. If the regulations enable service to be credited on the basis of the age of the person concerned at the date of first joining a fire authority in this country, this would provide a much more equitable arrangement.

Another fireman involved in this case—only two are in this difficulty—is a Mr. Lightbody, who is the chief fire officer for Cheshire. I have been asked by my hon. Friend the Member for City of Chester (Mr. Morrison) to associate him with my remarks, because he is equally concerned.

There are several letters from which I wish to quote in order to support my case. First, there is a letter from the hon. Member for Halifax (Dr. Summerskill) at the time that she was at the Home Office. In a letter dated 13 December 1977, she said: In the case of the Northern Ireland Fire Authority the new transfer arrangements apply to transfers taking place on or before 1 January 1974, but that authority will be prepared to consider paying and accepting transfer values on the new basis where transfers took place before that date. Thus, if our amending Order"— which came in later, in 1978— is made in the form proposed, the transfer of your constituent's pension rights may be considered by the authorities concerned. At that time, my constituent felt that all would be well and that when the order was introduced his pension rights would be safeguarded. However, when the order was introduced he was not assisted and, as I have already said, he got a reduced period of service.

Lord Belstead, in correspondence with me in a letter dated 27 December last, outlined the history of this case, most of which I have repeated. He said: I do not think it would be reasonable to require fire authorities in Great Britain to meet the additional cost which would arise from allowing firemen who transferred from the Northern Ireland Fire Authority in the 1960s to reckon the length of service they would have been allowed to reckon had Northern Ireland been prepared to agree to transfer arrangements at that time, without the receipt of a commensurate transfer value. As far as I am aware, it is not intended that the Northern Ireland Firemens Pension Scheme should be amended to provide for the payment of increased transfer values in these circumstances. That seems like a negative answer. However, the fourth paragraph of another letter from the Home Office, dated 21 September 1979, which was also signed by the noble Lord, states: Mr. Ingram is quite right in saying that the Northern Ireland and Great Britain Fire schemes are broadly similar, but in this case he will be credited with less reckonable service largely because his transfer value has been calculated on the monetary value of his pension rights in Northern Ireland on the basis of his age and pay in 1960. It was thought that the Northern Ireland fire service would not support his application. But a letter which Mr. Ingram has passed to me to use in the debate, dated 2 October 1979 and signed by the secretary to the Fire Authority for Northern Ireland, said: It is not part of the policy of this Authority to obstruct or restrict your right to previous service". I feel that this man, as well as the other gentleman, both of whom are good fire officers, who have served the fire service extremely well both in this country and Northern Ireland, have been badly penalised in respect of their pension rights. I urge my hon. and learned Friend the Minister to consider some ex gratia basis to put this matter right or to amend paragraph 1 of part 11 of appendix 4 to the Firemen's Pension Scheme (Amendment) Order 1978 so that paragraph 1(2) applies to Mr. Ingram and Mr. Lightbody as opposed to paragraph 1(4), which appears to be the present interpretation.

I appreciate that this is a complicated case and I know that the Minister has all the papers with him. I make a special plea on behalf of these two men who, I think, have not had a fair deal in relation to their pension rights.

11.39 pm
The Minister of State, Home Office (Mr. Leon Brittan)

If I may say so, Mr. Ingram owes a considerable debt to my hon. Friend the Member for Reading, North (Mr. Durant) for the assiduous way that he has pursued his case, not only in this debate, where he has put the matter so clearly, but also in correspondence both with the present Administration and with our predecessors.

I should also like to add that the case of Mr. Lightbody has been pursued with a similar degree of assiduity by my hon. Friend the Member for City of Chester (Mr. Morrison), who has pressed his claim in the same manner and using similar arguments to those put forward by my hon. Friend the Member for Reading, North.

The essence of Mr. Ingram's claim is that he should be allowed to reckon his period of service as a fireman in Northern Ireland towards his fireman's pension in Great Britain. Broadly speaking, there is no difficulty in reckoning the same service on transfer between fire brigades in Great Britain, as the same pension schme covers all brigades in England, Wales and Scotland.

The Great Britain and Northern Ireland firemen's pension schemes, on the other hand, are separate but they now belong to the same transfer club, and for transfers since April 1972 there is similar provision for firemen who transfer between the two schemes.

However, before April 1972 there were no such arrangements. The policy in Northern Ireland was not to encourage such transfers. The fact that the secretary of the Northern Ireland Fire Authority said on 2 November 1979 that it was no part of the policy of his authority to obstruct or restrict Mr. Ingram's right to previous service may reflect the policy of that authority in 1979, but it does not reflect the policy that was applied by the Northern Ireland authorities dealing with these matters in 1960, which was the relevant date.

The policy in Northern Ireland, as I have said, was not to encourage such transfers. Recent changes, however, enable those who transferred during that time to gain some benefit from their service in Northern Ireland by an actuarial calculation, translating the value of the transfer payment made by Northern Ireland into the value of the length of service credited in the Great Britain scheme.

Mr. Ingram is asking to be treated exceptionally by being credited with more service than the actuarial value of the transfer payment being made. He is asking to be treated either as if he had transferred after April 1972, when the new transfer system took effect, or as if there had been reciprocal arrangements in force between Great Britain and Northern Ireland in 1960.

I must make it clear that, although I appreciate the force with which my hon. Friend puts forward Mr. Ingram's case, Mr. Ingram is not in any way being victimised. He is being treated in accordance with the rules of the scheme.

The fireman's pension scheme for Great Britain is set out in an order made under section 26 of the Fire Services Act 1947 by the Home Secretary, subject to the negative resolution procedure. Before making an order, the Home Secretary is required to consult the Central Fire Brigades Advisory Councils for England and Wales and for Scotland. The current scheme is set out in the Firemen's Pension Scheme Order 1973.

This scheme is considered to be one of the best in the public service. The two main factors that determine pension are reckonable service and pensonable pay in the last year of service. The scheme provides for a maximum personal pension of two-thirds of annual pensionable pay after 30 years' reckonable service, or half pay after 25 years. The scheme covers the whole of Great Britain but does not extend to Northern Ireland, where they have their own scheme.

As I have already indicated, firemen may normally move about between brigades in Great Britain without affecting their pension rights, because they are members of the same pension scheme. Where there has been a promotion on transfer or a gap in service, the transfer value will be insufficient to meet the cost in pension terms of the improved circumstances. Nevertheless, fire authorities accept these results on a "swings and roundabouts" principle.

There is also a transfer system that applies throughout the public service and to other schemes prepared to pay and receive transfer values, under which pension rights may be transferred from one pension scheme to another. Rights which have accrued during service under the scheme the employee is leaving are converted into a sum of money, which is called the transfer value and which is the actuarial equivalent of such rights. The transfer value is then reconverted to establish what it represents in terms of pensionable service in the scheme to which the employee is moving.

It has been agreed between public service schemes on a reciprocal basis to credit service for all transfers since April 1972 on the basis of age and pensionable pay on leaving the first scheme. This means that for recent transfers from the Northern Ireland fire service a fireman is likely to be credited with the same length of service as he had in Northern Ireland.

There was no such general agreement for reciprocity between schemes in respect of transfers before April 1972. However, amendments to the firemen's pension scheme were made in October 1978 enabling some service to be credited on receipt of a transfer value for such transfers. These transfers are dealt with on the basis of crediting service as if the transfer value had been paid on 1 January 1974. Fire authorities bear the cost of any improved circumstances between January 1974 and the date when the transfer value is received. It was not considered reasonable to impose any greater burden on them. The firemen concerned benefit in being able to reckon service under the scheme, which they had formerly no prospect of counting at all. Mr. Ingram's case comes into this category.

Mr. Durant

Surely, the Minister's argument shows that everyone has been discussed except these two poor chaps. The authorities have amended the regulations and done everything to make a transfer suitable, but those two were left out.

Mr. Brittan

That is not the case. At the time of transfer, my hon. Friend's constituent and Mr. Lightbody—to the extent that he is in a comparable position—had no reason to expect that any of their years in Northern Ireland could count towards any pension entitlement through any transfer mechanism. Contrary to any expectations that Mr. Ingram might have had, he was subsequently put in a position whereby some entitlement accrued. That puts the question in a different light.

I now come to the circumstances of Mr. Ingram's case. He transferred from the Northern Ireland Fire Authority to the Hertfordshire fire brigade in 1960. At that time the two schemes were broadly similar, as they are now. There was, however, no provision for the transfer of pension rights between the two schemes, because the policy in Northern Ireland at that time was quite clear and deliberate. It was not an accidental administrative quirk or omission. The policy was not to enter into transfer arrangements that might encourage firemen to leave Northern Ireland.

As regards the equity of the case, there must be many people in Northern Ireland who continued to serve in the fire brigades there—no doubt under more arduous conditions than operate in some parts of Great Britain—and they might have been tempted to come to Great Britain. However, they did not do so because they knew full well that if they did their years of service in Northern Ireland would not count towards their ultimate pension.

It would be quite wrong to say that Mr. Ingram, having decided to come to Great Britain in full knowledge of the situation, should have those years accredited to him at a later date when his colleagues had remained in Northern Ireland. Those colleagues remained there because they realised the situation, and they did not want to lose their years of pensionable service in Northern Ireland. Mr. Ingram decided to transfer in the knowledge that his Northern Ireland service would not reckon at all for pension purposes under the Great Britain scheme. This was made abundantly clear to him at the time and he accepted the position.

I have the documents here which show just how carefully the matter was considered. A letter was written to Mr. Kerr, who at the time headed the Fire Service College where Mr. Ingram was. The letter says: I should be glad if you will ask Ingram to confirm in writing that he still wishes to take the post in Hertfordshire, notwithstanding that he realises that this will involve the forfeiture of his pensionable service in Northern Ireland. That letter was dated 30 November 1959. Elsewhere in that letter the signatory—a Home Office official dealing with the matter at the time—said: I have now received a reply from Stormont about Ingram. I am afraid it is not very favourable, since the Northern Ireland Government, after consultation with the Northern Ireland Fire Authority, have decided, not only that they cannot pay a transfer value, but that as a matter of policy they do not wish to enter into negotiations for arranging reciprocity of transfer values. It follows from this that if Ingram takes the Hertfordshire post, his previous service will not count for pension, and that there is no prospect of any future amendment of the law which might be operated with retrospective effect so as to allow his pensionable service in the past to count for pension. The letter from the official goes on: I understand, however, that when Ingram visited Northern Ireland he informed the Fire Office Commander that he intended to accept the Hertfordshire post…notwithstanding the fact that he would forfeit his pensionable service with the Northern Ireland Fire Authority. The suggestion was that Mr. Ingram should confirm in writing that he realised that position and none the less wanted to go ahead and transfer to England.

Duly we find on the file a letter of 7 December 1959 to the official at the Home Office from Mr. Ingram saying: With reference to your letter of 30 November 1959 to the Commandant of the Fire Service College"— and that is the letter from which I have just quoted extensively— I wish to confirm that I am still anxious to take up the appointment with Hertfordshire, providing the difficulties under the appointment of promotion regulations can be overcome. Therefore, the position is somewhat different from that which appears at first sight.

As a result of the amendments made in 1978 in the Great Britain scheme and similar amendments made in the Northern Ireland scheme, a transfer value has now become payable in Mr. Ingram's case. But it must be calculated on the basis of his pensionable pay in Northern Ireland in 1960, and I would stress that, in so far as any transfer value has now become payable at all, it is something which Mr. Ingram had no reason to expect when he came to England, and did not expect.

The position is that as a result of the amendments made in 1978 the service that Mr. Ingram had accumulated in 1960 was calculated actuarially to produce a transfer value. That was treated under the scheme as if it had been paid to the new fire authority in 1974. By 1974 Mr. Ingram was earning very much more than in 1960, and with a consequent higher potential pension entitlement. This meant that the cost of buying a year's worth of pension had become that much higher, so that the transfer value of his Northern Ireland years, in terms of the number of years' pension that they could buy, was much less. In round figures, Mr. Ingram's nine years in Northern Ireland buy only two years' credit in the scheme here.

Once the fire authority decides to accept a transfer value, it has no discretion to depart from the resulting calculation of service. The only way to do that would be to revise the scheme itself or to make some sort of ex gratia payment. Mr. Ingram has risen to the senior ranks of hisprofession—I am sure by hard work and ability. I congratulate him on his success. But when a man has taken a deliberate decision to forgo pension entitlement in the interests of his career, for whatever cause, I think that it is reasonable to expect him to abide by the consequences of that decision.

It is to his advantage that subsequent amendments to the firemen's pension scheme enable him to count two extra years towards his pension. That is what I might call an uncovenanted bonus. I sympathise with Mr. Ingram's desire to improve his pension position still further, but I am afraid that this is all that the scheme, as it now stands, provides for. For the reasons that I have given, I do not think it would be justified to make any further changes in it.

Question put and agreed to.

Adjourned accordingly at five minutes to Twelve o'clock