Pensions (Hansard, 11 February 2002)

§ 3. Andrew Mackinlay (Thurrock)
If he will make a statement on the impact of the pensions trough on former armed forces personnel; and what measures he proposes to remedy anomalies. [31893]

§ The Parliamentary Under-Secretary of State for Defence (Dr. Lewis Moonie)
I hope that I have better luck with this one.
In the past, periods of public sector pay restraint, coupled with high inflation, have meant that public servants, including members of the armed forces, retiring at that time received pensions lower than the value of those in previous and subsequent years.
It has been the policy of successive Governments not to make retrospective changes to public sector pensions to address such anomalies, as to do so would be prohibitively expensive. However, as part of the review of the armed forces pension scheme, the Ministry of Defence is giving consideration to introducing mechanisms that might prevent similar occurrences in future.

§ Andrew Mackinlay
Will the Minister forgive me for asking a disobliging question on a day when other aspects of armed forces' pensions are in the news? I hope that he will agree to meet me and the Forces Pension Society so that we can make him focus on a tremendous anomaly and unfairness. Two people can join the armed forces on the same day and achieve the same rank in the same time scale, but one can leave one week and get a higher pension than the other who stays on a little longer, sometimes at the request of the armed forces. We cannot 7 put a high enough price on fairness; the arrangement is as demonstrably unfair as it is perverse, and I hope that the Minister will agree to my pinning him down on the table with the Forces Pension Society so that he can focus on that wrong that needs to be remedied.

§ Dr. Moonie
My hon. Friend is rarely disobliging. I am due to meet the officers of the Forces Pension Society in the next week or two.

§ Andrew Mackinlay
Not with me.

§ Dr. Moonie
Should another meeting be necessary, I am of course happy to meet the society along with my hon. Friend. Again, while the arrangement may well be perceived as unfair by those in receipt of smaller pensions than they might have had, I can only reiterate that the policy of successive Governments is that we cannot revisit the issue.

§ Mr. Paul Keetch (Hereford)
May I associate my right hon. and hon. Friends with the remarks of the Secretary of State about Her Royal Highness Princess Margaret?
The Minister will recall his statement in the House on 23 January 2002 about Army invalid pensions, in which he said that perhaps £30 million needs to be repaid because of previous blunders. The following day, he wrote to me and other Members saying that that figure may have been too high. Today, we have heard that the blunder may have gone back not to 1952, but to 1919. Will the Minister tell us whether that is the case? How many people were involved in the blunder?

§ Mr. James Gray (North Wiltshire)
The Liberal party should pay; send the bill to Cowley street.

§ Mr. Keetch
Indeed, if the blunder was a result of action by the Liberal Government, when refunds are paid, will they come from the Treasury, not Ministry of Defence coffers? Finally, if there has been a blunder, the only way in which people will know that the pensions of their fathers and grandfathers were correct will be for a full independent inquiry to be conducted. Will the Minister initiate such an inquiry today?

§ Dr. Moonie
I suppose that this is the only opportunity that I shall have in my life to blame a Liberal Government for something.
The hon. Gentleman would be better off not trying to get his facts from the pages of The Daily Telegraph; despite accurate briefing, it still managed to get things wrong. The problem may date back to 1919, but as those in receipt of pensions and the officials involved are unlikely to be alive now, I can scarcely see that there is any coherent rationale for a public inquiry. We have conducted exhaustive inquiries into what went on in Army pension schemes before they were unified under central management. So far, we have been unable to establish the exact facts. Let us not forget that only a small percentage of all those who receive service pensions are affected and not, as was suggested in The Daily Telegraph today, all those in receipt of a war pension—their pensions, of course, have never been taxed. A small number of people 8 are therefore affected. We shall certainly try to establish who is involved, and if we can find any of them or their relatives, they will be repaid.

§ Mr. Tony McWalter (Hemel Hempstead)
While my hon. Friend is pinned to the table, will he listen to the representations of those who have served a decade or more in the armed forces and are in receipt of no pension whatever? Will he bear it in mind that that can hardly be a just way for our wider society to repay those who risked their lives for its defence?

§ Dr. Moonie
As is the case with other public sector pensions prior to 1975, those who served for less than the prescribed time are not entitled to a pension. There is nothing new in that. There is no way that this Government—or, I suspect, any Government of any political hue—would be prepared to revisit that at this stage.

§ Dr. Julian Lewis (New Forest, East)
When we last discussed pensions in the House, the Minister kindly said that he would look again at the question of post-retirement marriages, where the officer concerned may have died after having married after the end of his period of service—often because the nature of his service encouraged that postponement—and the widow is not entitled to any pension at all. Has the hon. Gentleman had a chance to look into the matter, as he said he would, and if so, what are his initial thoughts on the subject?

§ Dr. Moonie
The matter is still under discussion with my officials in the light of the pensions review that is taking place. However, it is most unlikely that any change that was brought in would be retrospective. That is not to say that some changes in the margins may not be made with regard to future holders of a pension.

§ Mr. Desmond Swayne (New Forest, West)
On the substantive question before us, may I draw the Minister's attention to the answer given to me on 29 January by the Minister of State for Defence, his right hon. Friend the Member for East Kilbride (Mr. Ingram), who stated that for the information of veterans organisations, we are looking to see whether it would be practical to give a broad estimate of the costs that might be involved for the major periods at issue"?—[Official Report, 29 January 2002; Vol. 379, c. 216W.] That is not just for the interest of veterans organisations. It is of interest to all hon. Members, so that, as a new generation of Members of Parliament, we can re-evaluate what it is possible to do for those people. As the Minister said in a generous answer to my hon. Friend the Member for New Forest, East (Dr. Lewis), these matters should be kept under continuous review.
Will the hon. Gentleman also consider whether there has been a substantial enough investigation of the taxation of invalidity pensions, given that he told us on 23 January that that went back to 1952, but his answer to me on 5 February makes it clear that he has no idea when the problem dates back to? That requires an inquiry, at least.

§ Dr. Moonie
It would appear that we have a problem. I believe that it is of no interest to those who are in receipt of a pension whether the mistake took place in 1952 or 1919. I do not believe that that is relevant, other than to the individual holders. We have given a guarantee that we 9 will find all of them and pay them the money that they are due. The total sum that has been expended up till now is about £6.5 million, so clearly my estimate of £30 million was a generous one. I do not anticipate that it will take as much as that to cover the matter, but all those who are due the money will get it.