Armed Forces (Pensions and Compensation) Bill

HL Deb 05 July 2004 vol 663 cc59-100GC

(Second Day)

The Committee met at half past three of the clock.

[The Deputy Chairman of Committees (Lord Brougham and Vaux) in the Chair.]

The Deputy Speaker (Lord Brougham and Vaux)

I will not remind noble Lords of the procedure; the normal procedure applies. There are no Divisions in Grand Committee but, as far as I know, there will be at least two Divisions in the Chamber. Any noble Lord who is speaking at that time should please stop and we will adjourn for 10 minutes.

Lord Astor of Hever

moved Amendment No. 22: After Clause 4, insert the following new clause— WIDOWS' PENSIONS FOR LIFE From 6th April 2005, widows and widowers currently in receipt of an unattributable forces family pension shall retain that pension for life.

The noble Lord said

My Lords, I rise to speak to Amendment No. 22, which stands in my name and those of my noble friend Lord Luke, the noble Lord, Lord Redesdale, and the noble and gallant Lord, Lord Boyce. The noble and gallant Lord, Lord Boyce, had hoped to be here this afternoon to speak to this amendment but has to attend a family funeral.

New Clause 4 deals with service widows who have unattributable pensions; that is, those whose husbands died from natural causes rather than as a result of service. Under the current scheme, certain widows and widowers retain their pensions for life, even if they remarry or cohabit, while others do not. A distinction is made according to whether the spouse's death was attributable to service or not. The proposals in the Bill mean that in future all service widows and the survivors of unmarried partners will receive that pension for life regardless of whether the death of the beneficiary was deemed to be attributable to service.

The Bill will create a small group of disadvantaged widows, those existing non-attributable widows whose husbands died of natural causes. They will still lose their pensions should they remarry or cohabit. This is the cause of bitter resentment among the victims. For that reason, it is the Forces Pension Society's top priority for change. In most cases, service widows had to travel with their husbands and were often unable to pursue a career and earn an occupational pension. The husband's career often depended on his wife's involvement. Today, the Government pay for welfare officers to do jobs that wives did when I served. A change could be incorporated in the Bill if the Government are prepared to grant a low-cost concession on this issue. They have already conceded the principle that widow's pensions for life are appropriate. In legislation introduced in 2000, existing widows whose spouses' deaths were deemed to be attributable retained that pension for life even if they subsequently elected to remarry or cohabit.

This amendment does not seek retrospective action. It merely says that from the date of the introduction of the new scheme, existing non attributable widows should retain their pensions for life in exactly the same way that all other widows and unmarried partners will in future. I am sure that the Minister will say that the cost of this amendment is too high, but there is no upfront cost. These widows are already in receipt of a pension. It is merely an undefined saving forgone at some point in the future in respect of a very small proportion of widows who remarry or cohabit.

Successive governments have consistently recognised the unique debt we owe to our armed services. Indeed, the change for attributable widows in 2000 was ring-fenced for just that reason. What is the difference for the non-attributable widow? Currently, she is still faced with an agonising choice of whether to remarry for her future happiness or not to do so for reasons of financial security. I cannot believe that this is a policy that any government could condone in the 21st century. It is an issue on which the Government could easily concede. I beg to move.

Lord Redesdale

I support this very worthy amendment. It seems that the Ministry of Defence will make a small saving, but can the Minister give an indication of the cost of that saving? Is it worth the difficulty that it presents to the small number of war widows who want to have a second relationship, which would be a legal relationship, who are penalised if they want to remarry? Nowadays many people do not consider a second marriage a necessary requirement, but for those who think that it is important, it is very unfair that there is this impediment.

Lord Craig of Radley

I, too, support the amendment. It attempts to achieve in another way what I strongly think should be achieved. I have had a very large mailbag from people who are affected. It is about time that we adopt a comparable treatment of all widows. I strongly support the amendment.

The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Bach)

I know that this amendment is moved with seriousness by the noble Lord and is supported sincerely by those who have spoken to it. I know that there is a great deal of feeling about it. But, in October 2000, when the Government conceded that attributable widows could keep their pensions for life, even if they remarried or began to cohabit after that date, we were told that there was a strong and important difference as regards attributable widows.

The new schemes that we are hoping to introduce provide pensions for life for attributable and non-attributable widows, widowers and unmarried partners. Of course, that improvement has been paid for by changes to benefits elsewhere. There is not scope to fund this improvement in the same way from the current scheme.

To make this change would not involve a small cost: it would be extremely costly as there is no case for treating Armed Forces non-attributable widows differently from other public service widows; for example, the widows of those who worked in the police and fire services or in other public services. Those who die for reasons unrelated to service—that is, accidents at home, congenital conditions and old age—are no different from others across the public service who die for reasons not connected with their paid occupation. For the Armed Forces pension scheme, the past-service cost of that change would be about £500 million. The future service cost would be around £14 million per year.

Lord Redesdale

Is that half a billion pounds for the whole of the public services or just for the Armed Forces?

Lord Bach

It is for the past-service Armed Forces pension scheme. The proposed—

Lord Craig of Radley

Can we clarify that it is half a billion pounds that is being referred to? In the letter written to the noble Lord, Lord Astor of Hever, a one-off cost for past-service of some £500 million was mentioned. This amendment is talking about future payments rather than past payments. I am not sure why we are introducing the concept of the £500 million one-off payment. I may have got this wrong but it seems to me that if we are going to pay for future pensions, the half a billion pounds has no part to play.

Lord Bach

I mentioned the £500 million figure because I am advised that that would be the figure that would count—past service would count—if the amendment is carried. As I said, the figure for future service costs would be around £14 million per year.

Lord Redesdale

This is an issue that will touch many people. We have been told in response to other amendments that if they were carried, difficulties would arise as regards retrospection. However, if this amendment was accepted, could it not be given a start date? I ask that as a point of clarification and probing at this stage. As we did with the 1978 and 1984 cut-off dates, could we not set a 2004 cut-off date from this point onwards?

Lord Bach

I think that I can anticipate what would happen in years to come, rather as I can anticipate what will happen in this Grand Committee in a few minutes' time. Some Members will argue that such a course is grossly unfair on those who are not covered by the date in question. That is why we have to consider what may follow were we to accept this amendment.

The proposed scheme includes provisions for non-attributable widows' and widowers' pensions to be paid for life. The crucial point here is that existing members can transfer to the new scheme if they wish to benefit from this provision. The new clause being proposed here covers current widows and widowers from April 2005 who are not provided for in the new scheme.

For the majority of public service schemes, non-attributable widows' and widowers' pensions still cease on remarriage, but as with the current scheme in the Armed Forces, these pensions can be reinstated on second widowhood or divorce if the individual is otherwise financially worse off than when first in receipt of his or her Armed Forces pension. While we are able to make changes for the future under the new AFPS, paid for by adjusting benefits elsewhere, change here would carry with it no offsetting saving.

It may be said that the AFPS is already paying pensions to these widows. While it is true that if a widow were not to remarry we would continue to pay for life, the assessed costs of the scheme, on the basis on which the MoD pays a charge, take into account the expectation that a certain proportion of non-attributable widows will remarry and thus lose their benefits. Speaking frankly to the Grand Committee, a change to this policy would have a long-term impact on the costs of the scheme.

Moreover, as I said only a few minutes ago, the noble Baroness, Lady Strange—who I know cannot be in her place today because she has a medical appointment in Scotland that must be kept—argued strongly in 2000 during debates on the Child Support, Pensions and Social Security Bill that attributable widows were different. The Government agreed and made an exceptional change to the regulations to allow such widows to remarry or cohabit and keep their attributable widows' pensions. However. we do not believe that any such special case can be argued for extending this benefit to current AFPS members and those already bereaved. There is no difference between a non-attributable death affecting a service person and that of a policeman, a fireman or a doctor.

For those reasons, I invite the noble Lord who moved the amendment to withdraw it.

Lord Astor of Hever

My Lords, I thank the noble Lord, Lord Redesdale, for his support. Like the noble and gallant Lord, Lord Craig, I too have been bombarded with correspondence on this issue because people are very worried about it. I am very sorry that the noble Baroness, Lady Strange, is not with us and I am sure that I speak for the whole Grand Committee in wishing her well.

I was disappointed with the reply from the Minister. The noble Lord, Lord Redesdale, asked about the cost of the saving and the Minister explained in response that it would be extremely costly. The Forces Pension Society would probably dispute those figures and I should like to consult with the society before deciding what to do next. But I was disappointed that the Minister could not accept the suggestion made by the noble Lord, Lord Redesdale, of a cut-off date.

In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

3.45 p.m.

Lord Luke

moved Amendment No. 23: After Clause 4, insert the following new clause— MEDICAL EXPENSES Any necessary expenses in respect of the medical, surgical or rehabilitative treatment of a member of the Armed Forces and of appropriate aids and adaptations for disabled living may, in so far as not provided under legislation of the United Kingdom, be defrayed by the Secretary of State for Defence under such conditions and up to such amounts as he may determine.

The noble Lord said: The amendment is also in the names of my noble friend Lord Astor and the noble Lord, Lord Redesdale. It is in effect a probing amendment, and I hope that the Minister will be able to give us some welcome news concerning the ongoing negotiations between officials of the MoD and Combat Stress, to which I am grateful for its briefing.

Under current provisions, qualifying war pensioners requiring medical support not available through the NHS—such as remedial treatment, convalescence or medical equipment—may, at the discretion of the Secretary of State, have their requirements met by other service providers and funded by the MoD. Those funding arrangements allow, for example, Combat Stress to provide significant support to service veterans suffering combat-related psychological injury. If some such arrangement does not continue, it will put intolerable financial burdens on voluntary charitable organisations that supply quality services that are unavailable elsewhere. I beg to move.

Lord Redesdale

I support this worthy amendment. I have a couple of questions. To what extent is the Minister looking at whether, if treatment is not available through a local NHS authority for certain medicines, the Ministry of Defence will make it available? At present, if it is not available through someone's local NHS trust, that is unfortunate for them and no special provision is made. That postcode lottery is a worry for those who suffer many conditions.

Without future funding for Combat Stress, what provision would be made for the specialised treatment of post-traumatic stress disorder? Combat Stress obviously has a great deal of specialised knowledge of that, but it is a service provider. If another service provider were available at a cheaper price, that would threaten the very future of Combat Stress, which would be much to the detriment of servicemen.

Baroness Crawley

By the end of my speech, I hope to have answers for the noble Lord, Lord Redesdale, on those questions. I propose to resist the amendment. It seeks to introduce into primary legislation an equivalent of Article 26 of the service pensions order, the law governing war pensions. The proposed text is based on an outdated version of that order. The current version requires that the expenses must arise from disablement due to service. As with much of the legislation governing war pensions, which remains largely as it was during the 1940s, Article 26 is a product of its time. It predates the universal systems of support provided by the welfare state, including the National Health Service. It is therefore a generally outdated provision. Since 1948, Ministers in successive governments have maintained that the National Health Service should be the principal route for treatment of accepted disablements. War pensioners receive priority in the NHS for treatment of their disablement caused by service, and we are seeking to secure the same approach from the Department of Health for beneficiaries under the new Armed Forces compensation scheme. I hope that to some extent answers the question about what happens if there is not treatment available under the NHS. We are seeking to have war pensioners made a priority under the NHS, and therefore there will be pressure on the NHS to come up with the best possible treatment.

The cross-departmental veterans initiative confirms our commitment to ex-service people. It is addressing improved delivery of services for veterans, working with other government departments and service charities, and it is dedicated to providing excellent service to veterans. Under the new scheme, there will be no statutory underpinning of charity arrangements. There is no reason why such arrangements should be provided for in primary legislation, which would limit our ability to amend them as our understanding of the care of conditions evolved.

We understand that there are issues in relation to ex-service organisations such as Combat Stress. We recognise entirely the value of its work, and the department is in discussions with that group and others to develop the most appropriate option for the future that recognises a modern consensus of the best approach to care in these areas. I assure noble Lords that we see a continued major role for Combat Stress in the future. I hope that that will give some heart to the noble Lord, who was looking for some optimism in my answer, but we need to establish a way forward that makes the best use of its valuable capabilities. That is why at present we are in discussion with Combat Stress at ministerial and official levels about how to take the work forward.

In answer to the specific question, the NHS can provide a full range of acute treatments for PTSD. Combat Stress does not provide that; it is not about acute treatment, as noble Lords will know. It provides respite care and periodic care to prevent deterioration, and there is no plan that Combat Stress should not provide treatment for mentally ill veterans. The only question is whether what it provides now is the best approach, reflecting advances in medical understanding in this area.

Lord Redesdale

The Minister gave a helpful answer, particularly about Combat Stress. I will push her a little bit on the original answer about the NHS. It is good to hear that servicemen will be treated as a priority. One concern that has been expressed—it is a problem—is that certain NHS trusts provide certain drugs and certain trusts do not. If an ex-serviceman wishes for a certain treatment to treat a condition, and it is not on the list of prescribed drugs available under that NHS trust, there seems to be no way that he could get those treatments if the NHS trust that provides for his area does not supply them. Pushing the NHS as a whole might yield results, but what provision will be made in that situation?

Baroness Crawley:

It is for each individual NHS trust to decide on the most appropriate treatment to offer in individual cases. If I have anything to add, I will write to the noble Lord.

Lord Luke

I thank the noble Baroness for that answer, and I thank the noble Lord, Lord Redesdale, for his contribution. I am not altogether happy with what she has said. We are making some progress, but it is a difficult area. I would like to have heard a little more about the conversations with Combat Stress. I am sad that we do not seem to have made that much progress in those conversations; or was it simply the normal progress of negotiations, with something to emerge shortly?

Baroness Crawley

Active negotiations are taking place with Combat Stress, but I do not feel at this point that it would be useful for either party to make those discussions public.

Lord Luke

I thank the Minister for that. We may come back to this issue at a later stage of the Bill. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Astor of Hever

moved Amendment No. 24: After Clause 4, insert the following new clause— MEDICAL RECORDS

1. Each of the services shall maintain complete and accurate medical records in respect of service personnel throughout an individual's service.
2. (2) These records shall be retained until any question arising from them has been resolved.
3. (3) Any claimant to compensation arising from injury or illness attributable to military service shall have full and complete access through a qualified adviser to his medical records."

The noble Lord said: This is a straightforward probing amendment which the Royal British Legion has asked us to table. We will be happy if the Minister can give the Grand Committee an assurance that medical records will not be destroyed until any possible question arising from them has been resolved.

It is clear from the Government's proposals that the burden of proof will rest with the individual serviceman or woman, whose medical records must support his or her case. That will mean that current and former service personnel will require full access to complete medical records covering their period in service. However, they do not hold these records; they are held by their employer, against whom the claim is being made.

As the noble Lord, Lord Morris of Manchester, rightly pointed out last week, the MoD's history of medical record-keeping is less than perfect. Although we are reassured that there have been improvements, the Royal British Legion tells me that service personnel are still reporting gaps in their service medical histories, especially when medical events occur while they are away from their parent unit. We therefore also seek an assurance that medical records will at all times be kept in good order, updated and accurate, and that a qualified adviser can have full and complete access to them. I beg to move.

Lord Hodgson of Astley Abbotts

I support my noble friend's amendment. As the Minister and the noble Baroness will know, I have been considering read-across from the private sector. To be frank, I am absolutely astonished that what my noble friend is seeking is not standard practice. If in the private sector someone allowed the records of one of their pensioners to be lost, falsified or destroyed, it would be an extremely serious matter indeed.

My noble friend asked the Minister to reassure the Grand Committee that an individual could have access to his or her records in connection with a claim. It is amazing that it is not axiomatic that he or she can have such access. In the private sector, withholding records from a member of a pension scheme would be considered to be quite extraordinary. I hope the Minister can reassure my noble friend and accept the points that he has made.

Baroness Crawley

I hope that I can reassure the noble Lord, Lord Astor. The MoD already retains medical records for 100 years, which is well above the standard Cabinet Office guideline of 72 years. We recognise the importance of making such information available to potential claimants under current and future compensation arrangements. We have taken on board the lessons learnt from the first Gulf War and are confident that operational medical records covering medical treatment, ill health and vaccines are now properly maintained.

From December 2005, a new computerised system of medical record-keeping will be progressively introduced. This will greatly facilitate record-keeping for a mobile population and will be a valuable tool in supporting claims under the new Armed Forces compensation scheme.

As regards access to medical records, individual service personnel already have a right of access to their complete medical records. As the noble Lord, Lord Hodgson, was saying, it is axiomatic that they come under the Data Protection Act 1998.

We would therefore say that the proposed new clause is not necessary. Should an individual wish to provide their medical records to a qualified adviser such as a doctor they would be at liberty to do so. A claimant might give authority to have their medical records disclosed to a third party should they so wish. We are saying that as the ability and right already exist, there is no need for additional legislation to achieve that.

4 p.m.

Lord Astor of Hever

I thank the Minister for that response. I also thank my noble friend Lord Hodgson. In the MoD's defence, there may be an element of disorganisation in its records. I was not at all suggesting that there was any falsification of its records.

I welcome the Minister's comments on the new computerised record-keeping. However, computers are not always accurate; one need only look at how my name comes out of different computers. I received a letter this morning addressed to "Lord Astor of Heaven".

Lord Bach

A promotion.

Lord Astor of Hever

I can offer the Committee many other interesting variations.

I also welcome the noble Baroness's comments on access. I was reassured by her response and I will discuss it with the Royal British Legion. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 5 agreed to.

Baroness Dean of Thornton-le-Fylde

moved Amendment No. 25: After Clause 5, insert the following new clause— REVIEWS

1. The Armed Forces Pay Review Body shall conduct, at their determination, periodic reviews to validate the provisions of the armed forces pension and compensation schemes.
2. (2) The Armed Forces Pay Review Body shall use whatever methods and whatever consultation they deem necessary to carry out the validation exercise.
3. (3) The Armed Forces Pay Review Body shall publish the outcome of their periodic validation of the armed forces pension and compensation scheme, in the same manner as they publish their annual report on pay, allowances and charges."

The noble Baroness said: This probing amendment will not meet the requirements of all Members of the Committee but its purpose is to draw out the Government's thinking on the issue. The amendment was tabled because there is usually external support or advice for pension funds in the form of trustees or trade union representation. This pension fund is for those who are serving on behalf of the country. We are not dealing with a static workforce, but with people who are working in far-flung places around the globe. As such they cannot be contacted in order to take their opinion.

When I was the chairman of the Armed Forces Pay Review Body the pensions issue was rising up the agenda. There was an amazing lack of knowledge about how the pension scheme worked. That is not unique to the Armed Forces but is true of many people. What is unique to the Armed Forces is that, because of their postings, they cannot easily go into the office to make inquiries.

At this stage this is a probing amendment. However, I would certainly like to see a provision guaranteeing the Armed Forces that there will be an independent assessment. I thank the Minister for sending me a copy of the Written Statement from the Parliamentary Under-Secretary of State for Defence. The Statement confirmed that such an assessment, would be done in the context of … quinquennial valuation", of the pension fund by the Armed Forces Pay Review Body, and that, more frequent examinations of the … provisions could be undertaken if wider developments justified this".

I think that we have to understand who will decide whether wider ramifications justify such examinations. I would argue that the pay review body itself should decide that. I am not aware of any pension scheme that is subject to review every five years; three years is normal, and it is only two for the better schemes. So the time period is not terribly acceptable. The Statement continues: The Review Body's observations would … be made public in a supplement to the following annual report and the Government would make public their response to these observations".— [Official Report, Commons, 30/4/04; col. 65WS.]

As things stand, the Armed Forces Pay Review Body decides the abatement; it takes evidence and requires consultants to give a report. There is also the Armed Forces pension fund association, which lobbies on behalf of Armed Forces personnel. However, with respect to both bodies, we do not have a proper structure that assesses how the pension fund meets the general responsibilities of those covered by it.

The pension fund is not given gratis; there is an abatement on pay to it. In the Armed Forces as much as in the private sector, the pension fund is probably the second-biggest investment anyone makes in their life; their home would be their first. In the case of many Armed Forces personnel who do not have a home, the pension fund is probably their single biggest investment.

I hope that the Minister will consider what is really looking at it again—a very meagre amendment. Perhaps we will have to come back on Report with something which is much more robust. That is brought home to me by Amendments Nos. 26, 27 and 28. They have been grouped with my amendment and I have no problem with any of them. We may well be able to bring them all together and have one amendment on the face of the Bill. The Minister may resist such an amendment, but we have only one go at the Bill. We will not discuss Armed Forces pensions for many a year to come, and we have to get them right for the personnel and for the country; it will be very difficult to recruit people to the Armed Forces in future unless they have a good overall compensation package, with pensions at its heart.

I shall be very interested to hear what my noble friend says in reply to this probing amendment. I beg to move.

Lord Astor of Hever

I shall speak to our Amendments Nos. 26 and 27 and support the amendments in the names of the noble Baroness, Lady Dean, and the noble and gallant Lord, Lord Craig. Like Amendment No. 25, our amendments are probing at this stage, but we may return to the issue on Report. We agree with the noble Baroness and the noble and gallant Lord that the involvement of the Armed Forces Pay Review Body, reviews and some benchmarks should be mentioned in the Bill. That should give assurance that schemes will not become outmoded and outdated, as in the past. We would like greater monitoring by the pay review body, as detailed in Amendment No. 26.

We welcome the fact that Her Majesty's Government listened to our concerns in the other place by giving the AFPRB a role in externally validating provisions of the Bill. It has an excellent record and is well placed to do so. We wish its members well with its enhanced remit. However, that applies to only the new scheme. Until 2045, the latest date on which a serviceman could still be a beneficiary of the old scheme, there will be servicemen whose pension interests are protected—those on the new scheme—and others whose interests are not. That is manifest nonsense. It will clearly be divisive and bad for morale and retention. The Government's concessions should apply to all servicemen equally—hence Amendment No. 26 covers the old as well as the new schemes.

Amendment No. 27 is stronger; it would not come under the heading of "meagre". It is for an independent body, rather than being covered by the AFPRB. Its purpose is to get into the Bill an effective mechanism for keeping a steady and well informed eye on the working of the schemes from the point of view of their members and future beneficiaries. It does so by forming a standing oversight commission for the schemes to be established by the Bill.

The commission will thus perform some but not all the roles of trustees and representative negotiating bodies, such as trade unions, that are in place for all other pension schemes, as the noble Baroness mentioned. It will help to meet a considerable number of points raised in briefings that we have had from the Royal British Legion, the Forces Pension Society and the War Widows Association, to mention only a few. Those points have also come up in debate on the Bill in both Houses.

In particular, it is directed towards finding a compromise between the resistance invariably expressed by Ministers at the Dispatch Box to proposals for the scrutiny of schemes and consultation about changes to them, and the wish, eloquently expressed by Members on all sides of both Houses, that there should be on the face of the Bill sufficient provision for well-informed and ongoing parliamentary scrutiny. The commission is proposed as a standing body; that is, its oversight of the schemes and of the way they work, both in principle and in detail, will be continuous rather than intermittent. Whereas the AFPRB will, under Amendment No. 26, undertake quinquennial reviews, the standing oversight commission would report at least annually to the Secretary of State.

The oversight commission would be responsible for watching and evaluating the way that schemes are run, but not for the running of them. It would be responsive and would look into matters brought to its attention either by the MoD, by members of the Armed Forces, by concerned groups such as the Royal British Legion or the Forces Pension Society or, indeed, by Members of either House of Parliament. It will also be proactive when necessary if its members decide that something needs to be looked at. In recommending this amendment to the Grand Committee and, I hope, to the Minister, I should say that this is the fifth occasion on which a proposal to this effect has appeared in Marshalled Lists. So far the Government have consistently resisted it, often with a number of reasoned objections, mitigated by their suggestion of bringing in the AFPRB on an occasional basis. Successive texts have been amended to meet those reasoned objections. We have removed the words "representative trustees"—we accept the argument advanced by the Government that you can have trustees only if they hold the fund, which does not exist here—and replaced it with "commission", while the word "management" has been replaced by "oversight".

Members of both Houses are unhappy about the inadequacy of orders, and the provision for a written statement is calculated to mitigate this. All recognise the impracticability of bringing details into the Bill but nonetheless have made it clear that they expect Parliament to be fully informed of future changes. Subsection (14), building on the earlier provisions set out in the new clause, will provide a convenient and effective way of doing precisely that: allowing informed consultation with those who know and care without the bureaucratic rigmarole of formal consultation exercises trawling those who do not know and do not particularly care.

We have proposed an à-la-carte menu for two different options and I look forward to learning which one the Minister chooses.

Lord Craig of Radley

I rise to speak to this group of amendments, in particular the one standing in my name, Amendment No. 28. I should start by making it clear, as I did at Second Reading, that I welcome the Government's intention to invite the Armed Forces Pay Review Body to play a part in reviewing the new scheme. It was not clear whether that body would be confined to reviewing only the new schemes, both pensions and compensation, or just pensions. I raised other points at that time about whether the body would also look after the interests of officers of the rank of two stars and above.

However, I do not want to be dragged into the detail. What is very important is that whichever scheme is put in place to keep under review the new pension and compensation arrangements, that scheme should appear on the face of the Bill. It is that which appeals to me, whether it is in the words proposed by the noble Baroness, Lady Dean, who is very experienced in this area, or the new arrangement proposed by the noble Lord, Lord Astor of Hever. We need to give some further thought to this. It is the concept of adding something on the face of the Bill which says, "This is the way in which these schemes are going to be reviewed, and kept under review, in the future". That is what I am looking for.

I draw particular attention to the few words at the end of my amendment requiring the schemes to follow best practice elsewhere in the economy. That, too, is very important. Whichever schemes we end up with for the Armed Forces, they should not be seen to fall below the best available in both the public and private sectors.

4.15 p.m.

The amendment of the noble Lord, Lord Astor, has many attractions. It seeks to set up something unique to the Armed Forces which would be very helpful in reassuring servicemen and servicewomen that the pensions and compensation they are receiving have been kept under regular review by a specially dedicated group of individuals with the right kinds of expertise in this area. It will ensure that the schemes are up and running and, at any stage, as good as anything elsewhere in society. I support the amendment and the general thrust that we must have some form of review on the face of the Bill.

Lord Astor of Hever

Is the noble and gallant Lord supporting Amendment No. 26 or Amendment No. 27?

Lord Craig of Radley

If I remember rightly, Amendment No. 26 refers to the Armed Forces Pay Review Body. I certainly support that amendment. But I was interested in the concept outlined in Amendment No. 27 and, as I have already said, I give it my support.

Lord Hodgson of Astley Abbotts

I, too, support the broad thrust of this group of amendments. They go with the grain of the White Paper, Security, Simplicity and Choice. I have quoted from that document often enough and I shall not do so again today. I shall not try the Minister's patience, but I invite him and his officials to look through the White Paper to see how many of its pages are devoted to the role of individual trustees and the need for them to be properly trained and to provide independent advice. The amendments in this group have an important point behind them.

I am particularly attracted by Amendment No. 27, which refers to the "Standing Oversight Commission". It seems to move us towards the role of independent trustees, meshing with the pensions regulator and the plans for the private sector. I am pleased to note that under subsection (3) of the new clause my noble friend proposes that the representatives should include people who have served or are serving in the Armed Forces in certain ranks.

Wearing my hat as a trustee of pension funds in the private sector, the role of the pensioner members of a scheme is extraordinarily valuable. They will often give insights into the way in which a scheme operates that you would not have been able to see on your own.

The noble Baroness, Lady Dean, made a particularly important point when she referred to the dispersed and changing nature of the Armed Forces and the fact that, obviously, there are three services. An advantage in the private sector is that your workforce tends to be static and therefore people can reach you, the trustee of a pension scheme, and talk to you—or send representatives to talk to you—in a way that must be quite impossible when people are being shuffled off around the world, as inevitably is the case with members of the Armed Forces.

In subsection (10) of the proposed new clause, we are not just talking about quantum and terms; that is, the amount of pension and the terms under which it is granted. The standing oversight commission would have the vitally important duty of ensuring that members of the Armed Forces are provided with proper information and advice. That is not just documentary advice, but access to independent financial advice. The Minister will tell me that the Ministry of Defence cannot provide such advice; I understand that, but it should provide a means for independent financial advice to reach the far-flung members of our Armed Forces so that they know what is best for them.

I entirely agree with the noble and gallant Lord about the importance of following best practice in the private sector. I will go into this again only briefly. The reality is that if you do not put on the pay slip that there is a deduction for pensions, people will think that it is free. It is not free. I have enormous sympathy with the noble Baroness, Lady Dean, but even she fell into the trap of the weasel word "abatement". It is not an abatement; it is a reduction. "Abatement" is a much nicer word to use, but it is in fact a reduction.

The commission would be charged with ensuring that the practice is right and the wording is right so that serving men and women understand exactly what they have by way of pension entitlement. They would have proper independent advice to ensure that they get it. I understand that these are probing amendments, but if the response is not good enough I hope that the movers of the amendments will consider something a bit more substantive in their approach.

Baroness Dean of Thornton-le-Fylde

I cannot resist the challenge about abatement and reduction. The interpretation might be that it is a reduction, but in fact the remit to the Armed Forces Pay Review Body is that of abatement. That is what it declares upon; it is called an abatement, not a reduction. That is the correct term.

Lord Hodgson of Astley Abbotts

I accept absolutely that it is called an abatement, but the effect is to reduce the gross pay of a serving man or woman by a certain amount, which is the amount contributed to their pension. In the private sector it would be called a pension contribution. The pension would be paid on gross pay, not net pay, whether it is reduced or abated.

Lord Bach

I thank all noble Lords who have moved their amendments or spoken to the amendments. This is an important short debate. If she will forgive me, I will first pay tribute to my noble friend Lady Dean. She speaks with as great knowledge as anyone, if not more, about the Armed Forces Pay Review Body, of which until recently she was such a distinguished chairman. We are lucky indeed to have her taking part in our discussions. Whether that tribute is enough to assuage her feelings about these matters I somehow doubt, knowing her as well as I do. The tribute is meant none the less, and I know that all Members of the Committee share it.

These four amendments seek to establish a wider role for the Armed Forces Pay Review Body than that announced on 30 April by my colleague the honourable Ivor Caplin in another place. It was an important concession, and I pay a compliment to those who pressed the point. It was a sensible concession; it was not held up for some other purpose, but announced in the House of Commons at the time. So, when we started our discussions, we knew where we started from. Working along its current remit, the AFPRB has agreed— and we are grateful—to undertake regular reviews of Armed Forces pension arrangements to provide genuinely independent validation.

The body will compare the pension scheme arrangements with practice elsewhere in the economy and consider the extent to which they meet the recruitment and retention needs of the Armed Forces. It will publish its observations in an annual report and the Government will respond publicly. I make it clear that we do not intend to dictate to the review body any particular approach to consultation, nor would we envisage the resulting pension reports being dealt with any differently from the current review body reports on pay. In other words, they would be published, allowing full visibility, and the Government would be expected to explain our response to particular observations.

My noble friend Lady Dean asked why the reviews could not be more frequent than every five years. They could be, by agreement between the department and the Armed Forces Pay Review Body, if the pace of intended changes justified it. That would be decided by the two bodies in discussion.

The external validation is for the new pension scheme, not the compensation scheme; I shall come back to that. It addresses directly concerns expressed in the Standing Committee in another place about the lack of independent oversight of the arrangements provided for the Armed Forces. It is our intention that the remit be focused on the new pension and early departure schemes. We have recognised that the current pension scheme is not in line with wider best practice. The noble Lord, Lord Astor, asked why the old scheme was not included in the oversight as well. Oversight of the old scheme, except perhaps for compliance with changes in pension law, would not be appropriate. We know that the terms are not in line with modern best practice; that is why we are doing our best to replace the scheme. Independent review would just point that out.

We have introduced the new scheme to address all these points, and all those currently serving will, of course, be able to transfer to it. Anyone who wishes to stay in the current scheme can do so, but they will do so because they have decided that the package is the one for them, notwithstanding its shortcomings. We do not plan, therefore, to change the current scheme other than to keep it in line with wider pension law. Nor would the AFPRB have a remit for the pension terms of those who had already retired; it is longstanding policy, upheld by successive governments, that retrospective change is not a practicable option. If I were to ask the spokesmen for the other parties that hope to make up the government in due course, they would not want to change the rule about retrospection, I am sure. I therefore cannot see the policy altering in the foreseeable future.

Amendment No. 27 seeks to establish a commission with a parallel role in independent validation of Armed Forces pension arrangements, but extended to the new compensation scheme. That is the … la carte choice that the noble Lord, Lord Astor, was kind enough to offer, but it is unnecessary. He will forgive me, I am sure, for not accepting either offer on the … la carte menu; I choose another meal altogether. The AFPRB has served the Armed Forces very well since its formation in 1971 and has exactly the right experience to undertake the review role so far as pensions are concerned. It comprises human resources specialists, economists, trade union and ex-military representatives, and so has wide expertise. It makes perfect sense to use the skills of those already considering pay in the context of the manning and recruiting needs of the forces to consider also the appropriateness of pension arrangements to those needs.

The established focus of the body has been remuneration and the way in which that supports the manning needs of the forces. The compensation scheme has a very different place, which does not fall sensibly into the AFPRB remit. I regard the compensation scheme as a matter of good employer provision and am happy that the current arrangements will protect the interests of the Armed Forces in that respect. I shall put it another way: it is to the AFPRB that we look to advise and guide us so far as remuneration for the Armed Forces is concerned. It is an extra validation. In our view, that is what its interest should be so far as the pension scheme is concerned.

Noble Lords have asked why this is not on the face of the Bill. This argument arose in Committee last week. It is important to remember that the AFPRB is not a statutory body. It was created by a letter from the Prime Minister. For a long time, successive governments have accepted that this is the appropriate approach to such matters. If the remit were in primary legislation it would be not be flexible enough to amend. The current remit can be altered from time to time; legislative remit would not allow that. This is the approach used by other schemes in the public sector. That is why we object to the proposition that the important role to be played by the AFPRB should be written into the Bill.

We do not have a pension fund and, for that reason, we argue that trustees are not required to oversee the proper management of a fund. Indeed, it is because of that fact, and the nature of this pension scheme, that we think that the Armed Forces Pay Review Body, which is an independent body, is appropriate.

4.30 p.m.

Lord Hodgson of Astley Abbotts

Can the Minister confirm that the Civil Service pension fund, which is similarly structured, does have trustees?

Lord Bach

I hesitate to say this, but I do not think that the noble Lord is right. If I am wrong, he knows that I shall be the first to tell him. I am advised that the Civil Service pension fund does not have trustees. We will leave that on the table for the moment and see what the position is.

Service pensioners get a guarantee of defined benefits. They do not depend on the performance of a fund for those benefits. The benefits are underwritten by government. Service pay is set to reflect the accruing cost of the pension less the employer contribution paid by the Ministry of Defence.

I do not know whether this debate has satisfied my noble friend, who wanted a debate on these issues. It is my view that this is an important debate, but it should not be forgotten that the Government have agreed to work with the AFPRB to make sure that the new pension scheme is working satisfactorily and fairly for members of our Armed Forces. That is an important provision and we should keep hold of it.

Lord Astor of Hever

Before the noble Baroness rises to speak, I welcome what the Minister said about the strong possibility of more frequent reviews. That was good news. The noble Lord rubbished our call to look at the old scheme. Does Minister's department have any figures for the percentage of members anticipated to remain in the old scheme and those expected to go to the new scheme?

Lord Bach

We do not have the figures and it would be very dangerous to guess. I think I made it clear by implication that we hope that those serving in the Armed Forces will move to the new scheme because we think it is a better scheme. We expect that that is what will happen.

Baroness Dean of Thornton-le-Fylde

I shall have to wait and see what happens. I thank the Minister for his courtesy and for the compliments that I certainly do not deserve. It was an honour to be chairman of the Armed Forces Pay Review Body. I have heard the debate and, although the Minister valiantly attempted to answer the points I raised and those raised by other noble Lords, I do not think that he gave the confidence that we are looking for to underpin the Bill.

He is absolutely correct that the pay review body is not a statutory body. Indeed, its remit and terms have been changed from time to time. Although that might be a blessing, I do not think that it is in this case. I would be concerned if the remit of the review body is open to amendment without any reference to Parliament. All too often, we see how the budgets of the MoD are Boxed and Coxed, sometimes not for the best purposes of Armed Forces personnel. I did not intend to push this amendment today, but I think we need to come back to this matter. I beg leave to withdraw the amendment.

Lord Craig of Radley

I thank the Minister for his reply, and I thank other noble Lords who have spoken. I remain very concerned that there is nothing in the Bill to indicate that there will be a regular formal review. I take the point that the Armed Forces Pay Review Body is not a statutory body and that there could be some difficulty about that. It seems to me that just as the Ministry of Defence has decided to put the Armed Forces Pay Review Body into play now, in another year or two it could be taken out. There is no assurance that it will continue. I am concerned that we do not have something that gives that assurance. I shall not move my amendment, but we need to come back to this point and see what form of support we can get into the Bill to reassure servicemen and servicewomen that there will be regular reviews.

The Minister also mentioned that the AFPRB concentrates purely on pensions, and that compensation is a matter for the Ministry of Defence as the employer. I am not sure that one can put these two matters into totally separate boxes. It might be that that is not an entirely satisfactory way to keep the two schemes under regular review.

Amendment, by leave, withdrawn.

[Amendments Nos. 26 to 28 not moved.]

Schedule 1 [Amendments to Pensions Appeal Tribunals Act 1943]:

Lord Astor of Hever

moved Amendment No. 29: Page 7, line 46, at end insert— 6CA COST OF APPEALS

1. A party to an appeal under section 6A or 6C, or a party to a re-determination under section 6B, shall be entitled to be paid the costs of bringing or opposing such appeal or, in the case of a redetermination under section 6B(3), the costs of such application.
2. (2) An application for costs payable to a person under this section shall be made in writing to the President of the Pensions Appeal Tribunal within six weeks after the determination of the appeal or subsequent appeal, whichever is the later.
3. (3) In determining the amount of such costs, the President shall assess those on the basis that would be applied to an assessment of costs of High Court proceedings."

The noble Lord said: The purpose of Amendment No. 29 is to ensure that every claimant has proper representation to ensure a level playing field.

The Government are relying on the generosity of the voluntary sector, particularly the Royal British Legion, to support claimants in their detailed cases against the Government. The proposed changes, including the introduction of another tier of appeal, will impose substantially increased burdens on the Royal British Legion. Although we accept that there is a case for the social security commissioners having a role, the Royal British Legion tells us that it will increase its workload. It has a relatively small and stretched staff. I am very grateful to it for all the help it has given me and my colleagues on the amendments on which we have worked together. Under the existing scheme, the expenses of representing a claimant on appeal on a point of law are paid from funds controlled by the Pensions Appeal Tribunal. No provision is made in the Bill for claimants to be paid the expenses that they incur in an appeal by them or by the Secretary of State against the decision of the Pensions Appeal Tribunal. Therefore, the claimant is no longer able to take part in an appeal on a point of law on a level playing field.

If the Government take away an individual's entitlement to be paid the costs of prosecuting or defending an appeal, how do the Government propose that individuals can be represented on a level playing field? The Leggatt review of the tribunal system overlooks the fact that the present system allows for paid representation. The review did not recommend taking away that right. Instead, it recommended the grant of funds to the Royal British Legion for this purpose. Will the Government adopt that recommendation, and how much will be paid?

We do not want a situation where any appeal, whatever its merits, can receive finance. That caused some concern in the other place. Therefore, the amendment provides that application must be made to the president of the Pensions Appeal Tribunal. I am aware of the Government's positive amendment in the other place that refers to travelling expenses and other allowances. However, we, and the Royal British Legion, do not think this goes far enough as it gives the Lord Chancellor discretion and refers only to travelling expenses and other allowances. I beg to move.

Lord Redesdale

This amendment is also tabled in my name, and I support it as I have a particular concern. As I understand it, at the moment the Royal British Legion receives no funds from the Government. If it were to receive funds from the Government for this purpose, that might compromise its position. It would be better for the Government to accept the spirit of the amendment and bring back at a later date an amendment to cover the problem of the costs of appeals for the defendant. Otherwise, we end up in the situation that was raised in the debate on the amendment on the burden of proof, which is that we are introducing a system that will either deplete the resources of the Royal British Legion or will be a means test for those who can afford to take the matter forward in law.

Lord Bach

I am grateful to the noble Lords, Lord Astor and Lord Redesdale, for speaking to the amendment. I propose to resist this amendment. I shall deal in turn with the three situations to which this amendment about the cost of appeals would apply. Noble Lords will know that we intend to change the system so that instead of appeals against Pensions Appeal Tribunal decisions on points of law going to the High Court, they will go to social security commissioners, who are likely to be known as pensions appeals commissioners. If appropriate, appeals on a point of law from there will go to the Court of Appeal. The first of the three situations concerns appeals from the Pensions Appeal Tribunal to the social security commissioners. A party appealing a decision of the Pensions Appeal Tribunal under the new Section 6A of the Pensions Appeal Tribunal Act will now go to the social security commissioners. I should first note that the vast majority of appeals before the commissioners will be dealt with on paper, without an oral hearing. When a hearing is required, the Office of Social Security and Child Support commissioners will provide for the costs of those attending a hearing, such as travel and accommodation costs.

It is not intended that there will generally be representation on either side but with regard to legal costs, the Legal Services Commission provides a range of services to help claimants to prepare an appeal to the commissioners. For example, the Legal Help scheme can provide advice from a solicitor worth up to £500. Various advice agencies that we all know, which have very good reputations, such as Citizens' Advice Bureaux, can provide advice for free.

On the question of costs for legal representation, outside of exceptional circumstances, legal aid is not available for legal representation in any sort of tribunal hearing. This is because tribunal hearings are very different from a court. They are intended to operate without legal counsel. This applies equally to the department, which would not generally expect to have legal representation. 4.45 p.m.

The tribunal system is intended to be accessible and user-friendly. It is intended that people can bring their cases before a tribunal without the delay, cost and formality of court proceedings. The commissioners are well used to unrepresented appellants and run hearings by asking questions of the parties and any attendant experts. The process is not adversarial, as it is in our courts, but inquisitorial. It removes, we believe, the need for counsel that you would have in the High Court.

It is for this reason that full legal aid, which would fund legal representation in a hearing, is not available for hearings before the commissioners. However, the Lord Chancellor has the authority to approve exceptional funding if necessary. To qualify, the applicant would need to fulfil the normal financial conditions for Community Legal Service funding and at least one of three additional factors: first, that it is in the public interest for the user to be represented; secondly, that the case is of overwhelming importance to the user; and, thirdly, that a lack of representation would lead to obvious unfairness in proceedings and that it would be practically impossible for the user to bring or defend the proceedings. Such exceptional funding would allow legal counsel to assist in an appeal to the commissioners. So that is the first situation with which I am dealing.

The second situation relates to appeals from the social security commissioners to the higher courts. I can reassure the Grand Committee that appeals to the Court of Appeal in England, Wales and Northern Ireland, or its equivalent in Scotland, the Court of Session, will fall under their existing cost and legal aid regimes. Our legal aid system recognises that appeals to a court require representation, and a person before a court may qualify for full legal aid, subject to means and merit testing. This enables legal representation for persons unable to fund it for themselves. Noble Lords will know that courts have the power to award costs as they see fit. As the existing system already provides for full legal aid and award of costs where appropriate, I do not see the need for any change.

The third situation relates to appeals by the Pensions Appeal Tribunal. I am not sure why the amendment applies to the redetermination of appeals under proposed new Section 6B(3) of the PAT Act. This section will allow a differently constituted tribunal to redetermine the case when both parties are in agreement that there was an error in the initial decision. It is a sensible provision because it avoids the time and expense of sending a flawed decision to the next tier of appeal. Such redeterminations fall under the existing procedure for cases before the Pensions Appeal Tribunal; they are not an appeal. There are no specific or extra costs attached to this process, so I am unsure what problem this particular part of the amendment is intended to remedy. In any case, as with appeals to the social security commissioners, parties in a PAT hearing will receive reimbursement for costs incurred in the hearing, such as travel and accommodation.

The Bill modernises the appeal process to make it faster, cheaper and more accessible for claimants. Our justice system already provides for the reasonable costs of claimants, and legal representation is not necessary before a tribunal. I therefore invite the noble Lord to withdraw his amendment.

Lord Astor of Hever

I thank the noble Lord, Lord Redesdale, for his support. I detected an enthusiastic nod of support from over my shoulder to his suggestion of the Government coming back with their own amendment. Clearly, we are going to be disappointed on that.

I thank the Minister for his detailed reply. I will discuss with the Royal British Legion the question that he asked about redetermination. I will consider what he said, read Hansard carefully, and maybe we will come back on Report with a different wording. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Astor of Hever

moved Amendment No. 29A: Page 8, leave out lines 7 to 14.

The noble Lord said: Amendment N o. 29A is purely a probing amendment, designed to pick up a point made by the Select Committee on Delegated Powers and Regulatory Reform. Its report suggested that it might be wise to query one of the powers contained in Schedule 1. The passage in the Select Committee's report is detailed, so it might help the House if I read out the comments related to this part of Schedule 1. The report stated: 7. The powers in Schedule 1 are based on those in the Social Security Act 1998 … They include a new Section 6D(2) of the Pensions Appeal Tribunals 1943 (inserted by paragraph 4 of Schedule 1 to the bill) which is not specifically addressed in the MoD's memorandum. 8. The Lord Chancellor is enabled by new section 6D(2) to make regulations (subject to negative procedure) providing for authorised officers to make determinations which otherwise would be made by the Social Security Commissioners. This power is the same as that in paragraph 6 of Schedule 4 to the 1998 Act. (A similar power in the 1998 Act relating to social security tribunals is, in accordance with a recommendation of the Committee, subject to affirmative procedure, but the tribunals differ from Commissioners in a number of respects, including their composition and the number of cases they are likely to handle). The Government explained in 1998 that the purpose of the power then being taken was to enable nominated officers to handle cases such as those".

In view of the recommendations by the Delegated Powers and Regulatory Reform Committee, we have tabled this amendment to allow the Minister to give us a little more explanation about the power to delegate that this paragraph of Schedule 1 allows. I beg to move.

Lord Bach

I am grateful to the noble Lord for raising this issue. Indeed, it was the one issue raised by the Delegated Powers and Regulatory Reform Committee, which otherwise gave this Bill a clean bill of health. I am in the process of writing a short letter to clarify the points raised by that distinguished committee.

The probing amendment would remove subsection (2) of Section 6D to the Pensions Appeal Tribunals Act. This subsection will enable delegation of some functions from the social security commissioners to authorised members of staff. This is a well established arrangement in the social security commissioners' office, under which the commissioners are relieved of more minor and routine judicial and quasi-judicial functions, so that the commissioners can concentrate on substantive decisions. It is anticipated that regulations drafted under this subsection will mirror those in Regulation 7 of the Social Security Commissioners Procedure Regulations 1999. Types of functions that may be delegated include postponing hearings, extending time for proceedings, or giving directions about the production of evidence. Importantly, and this is stated in the letter to the committee that I will be signing, all decisions by a nominated officer can be appealed to a commissioner. There is no intention to supplant the role of commissioners in deciding substantive matters on appeal. I hope that that answer satisfies the noble Lord.

Lord Astor of Hever

I thank the Minister for that reply. He mentioned that he is in the process of responding to the committee. It would be helpful if those of us who attend this Committee could have copies of that letter.

Lord Bach

As soon as I have signed the letter, I will make sure that all noble Lords attending the Committee have a copy.

Lord Astor of Hever

In the light of that comment, I beg leave to withdraw the amendment. Amendment, by leave, withdrawn.

Schedule 1 [Amendments to Pensions Appeal Tribunals Act 1943]:

On Question, Whether Schedule 1 shall stand part of the Bill?

Lord Astor of Hever

The Bill has a provision in Schedule 1 which would have the effect of altering the appeals procedure that has been in place for more than 60 years, has stood the test of time, and provides an efficient, accessible and cheap method for determining fairly appeals on points of law.

As things presently stand, an appellant who is dissatisfied with the decision of the Secretary of State has the right to appeal to an independently constituted Pensions Appeal Tribunal. Thereafter, on a very limited number of occasions each year, an appeal from the Pensions Appeal Tribunal can lie to a single judge of the High Court nominated by the Lord Chancellor for the purpose of hearing such appeals. My understanding is that such appeals are relatively infrequent and probably number about a dozen each year.

The appeal is heard by a single judge who, in the past, has been a judge with service experience and, by hearing a number of appeals, has familiarity with the subject. The clear advantage of such a system is that it is a streamlined, single appeal on a point of law which is disposed of quickly and efficiently by the High Court judge.

What is now proposed is to introduce a two-tier system of appeals on a point of law from the decision of a tribunal. The first stage involves an appeal proceeding to the social security commissioner. That commissioner is to determine the point of law. Thereafter, there is a limited further right of appeal to a single High Court judge.

There are a number of obvious disadvantages in introducing an additional layer of appeal. First, for an appeal to proceed from the tribunal, leave will have been given by the highly experienced president of the tribunal who himself is a qualified lawyer. The appeal will go to the social security commissioner, who is not necessarily a lawyer by training and, despite whatever might be said, will not appear to the ordinary claimant to be an independent person, if for no other reason than the title and nature of the appointment.

But the real mischief lies in how it is proposed an individual would be represented in front of a commissioner and thereafter in front of a single judge. Before explaining this point, I should reiterate that current appeals on points of law fall into three particular categories. The first is the appeal by the individual appellant. The second is an appeal by the Secretary of State for one of two reasons: he is either dissatisfied with a particular decision, or concerned to establish a point of law of wider and more general application to the whole body of potential claimants. The third category are those cases where the president of the Pensions Appeal Tribunal himself has identified the need for a particularly difficult point to be decided judicially.

As things stand at the moment, where leave to appeal has been granted, the individual concerned is fully entitled to legal representation and the costs of that representation are paid irrespective of the outcome. The individual is treated fairly, receives proper representation and has equality of arms when faced with the Secretary of State, the resources of the Government, Treasury Counsel and the Treasury Solicitor. This is important because the individual may well face an appeal from the Secretary of State, or initiated by the president.

By introducing a two-tier system, the individual will now no longer receive the automatic right of representation, with the costs being met, so that a speedy decision on a point of law can be made by a High Court judge. Instead, the proposed system introduces an additional tier and more complexity in the appeals procedure. The individual is unlikely to be represented in front of the commissioner, will not automatically have a right of access to legal advice and may well be left thinking that the appeal has not been dealt with by a wholly independent person of judicial standing. The social security commission will therefore be the graveyard of appeals, decided on an unequal basis.

The Government have suggested that the introduction of the additional layout of appeal is a more modern approach. I would suggest that the modern attitude is to ensure the speedy and cheap disposal of the very limited number of appeals on points of law, by ensuring that they proceed immediately to a single judge on the issue which the highly experienced president of the tribunal or the judge himself has identified as being the important point for determination. In so doing, the individual should continue to be afforded equality of arms through meeting the reasonable legal costs incurred. We see no reason for change.

I apologise to the Committee for a rather long speech. However, I hope the Minister will be able to put to rest my own and the Royal British Legion's concerns.

5 p.m.

Viscount Slim

I have been listening to noble Lords' comments on the appeal procedure and trying to understand it. Perhaps I can come down to earth on a couple of points. As the noble Lord, Lord Astor, has just explained, the present system seemed to be pretty good. According to the Government, however, the procedure is now being improved by adding layers on to it.

The Minister knows that I speak daily with veterans and with serving soldiers. The proposals need selling because they will not be the most popular piece of the pension plan. Most soldiers, sailors and airmen will look at proposals such as these and say, "The whole thing is drawn out. Whatever they say about quick results, it is going to be a lengthy procedure. You can appeal here and appeal there, but you will have to fight for money to help you if you want legal advice".

One sees the bumf—the paperwork and red tape—increasing. The soldier on the ground who is about to enter this appeal procedure will have two comments to make. The first is, "As usual, the Ministry of Defence has made everything much more difficult. I can hardly understand it. Where do I go to get a thorough explanation of my rights? Does the officer above me know that this is something that I can understand, and will he explain it to me? Where do I go?" He will then say, "They are doing this to cut costs". I hope that the Minister can explain whether this is a matter either of saving money or of spending more.

The soldier will then say, "This lengthy procedure is going on so long. None of us can understand it. I am getting a bit old. I really do not think that it is worth my while because I do not understand it". If the Minister is making a case that this is a better and more favourable procedure—and here we come on to the burden of proof, which we will discuss in a moment—then the claimant, he or she, must be able to believe that this is a better system.

I therefore say to the Minister that, somewhere down the line, someone— perhaps one of those among the happy haggle of advisers behind him—who is familiar with the issue can produce a pamphlet or something that soldiers, sailors and airmen—men and women—can understand. It can be a slightly "selling" document but it must not spin. If people see it as spin they will simply chuck it in the bucket and say, "What the hell".

The Minister said that at their most recent meeting the Chief of the General Staff and all the red tabs agreed to this and like it. I am a little suspicious that they agreed to it. However, at some point the new system must be sold. And you must be fair to the soldier, sailor and airman and ensure that he fully understands it.

Lord Bach

I am very grateful to the noble Lord, Lord Astor, for what he said and, in particular, to the noble Viscount, Lord Slim. He tried to bring us down to earth about the practicalities of what this will mean in the very small number of cases that there will be each year, but which will not be small to the people who are involved. I appreciate that. Perhaps I may come back to the noble Lord as I make my remarks.

Schedule 1 is a key part of the Bill. Appeal rights are fundamental and are a fundamental principle of our administrative justice system. As the noble Viscount, Lord Slim, said a few minutes ago, under the new Armed Forces compensation scheme, claimants must have confidence that the final determination of their rights lies with an independent and specialist body.

Schedule 1 introduces the Pensions Appeal Tribunal as an independent appeal tribunal to consider decisions of the Secretary of State under the new compensation scheme. The PAT works well as part of the current arrangements. From what Members of the Committee have said today and in last week's debates, it is clear that they have no difficulty with this aspect of the proposed arrangements, but that the objections to Schedule 1 really relate to changes in the onward path of appeal.

Noble Lords will be aware that the Department for Constitutional Affairs is working to modernise our administrative justice system. Modern policy on tribunals holds that in most cases there should be a second-tier tribunal to hear appeals on points of law before a matter arrives in the courts. But I want to reassure the noble Viscount that that is not an added part of the process. At the moment, the process goes from the PAT to the High Court to—in a very few cases—the Court of Appeal. The High Court will disappear and the commissioners will take its place. Instead of a process of tribunal, High Court, Court of Appeal, there will be a process of tribunal, commissioner, court of appeal. There is no added layer. The commissioners will replace the High Court.

There are a small number of exceptions to the rule that I have just stated, such as for asylum seekers. For war pension cases, the social security commissioners will be introduced as the second tier of public tribunal which, as I have just said, replaces the High Court. We believe that having two levels of tribunal provides a much quicker, more user-friendly, more cost-effective system for the parties involved. Tribunals specialise in different areas of administrative law. They have arisen over time in recognition of the fact that some disputes are better settled by specialist tribunals rather than through the more formal, legalistic, expensive and—dare I say—longer court system. Tribunals provide a number of strengths in the consideration of administrative disputes. I hope that the Committee will forgive me if I try to set them out.

First, as regards participation and funding, a common aim of current tribunals is that users should be able to prepare and present their own cases effectively with the help of good information, procedural help from tribunal staff and substantive assistance from advice services. Members of the Committee should note that most appeals to the commissioners would be decided, as I have said already today, on papers, without an oral hearing. In cases where there is a hearing, there have been concerns expressed about inequality of arms.

I want to assure noble Lords that the system is designed to avoid such a situation. In a hearing, the presiding commissioners will investigate the issues in an inquisitorial manner rather than relying on the arguments of opposing counsels. Nor would the department generally expect to have legal representation at tribunal hearings.

The current system of appeals going directly to the High Court creates high, disproportionate legal costs. The Government are required to fund legal counsel for both parties to the appeal. The situation is not compatible with modern legal aid policy, which uses means and merit testing to focus limited resources where most are needed.

As I said in an earlier debate concerning legal representation, there are a number of ways in which a person might receive legal assistance in preparing his or her case or in responding to an appeal from the Secretary of State. As I said last week, the Department for Constitutional Affairs is willing to facilitate discussions between the ex-service organisations and the Legal Services Commission to outline the range of services available. I very much hope that those bodies will take up that offer so that discussions can take place to see if we can find a satisfactory solution to their concerns.

Secondly, the tribunal system has special expertise. The social security commissioners are judges, all of whom are lawyers. They can qualify only if they have at least 10 years' experience and specialise in hearing complex appeals on points of law. They are appointed by Her Majesty, and they will offer considerable expertise in resolving appeals from the PAT. A number of those commissioners have previous experience in the PAT jurisdiction. Initially, they will be assigned to hear appeals from the Pensions Appeal Tribunal. In order to recognise the special status of Armed Forces veterans, those commissioners will sit as pensions appeal commissioners when hearing appeals from the PAT. That would distinguish the appeals from other general matters of social security.

The third area of strength is accessibility. A citizen seeking relief on a matter of administrative justice will find the tribunal more accessible than the courts. Appeals to tribunals do not carry the same costs as appeals to the courts. A self-representing tribunal removes the need for legal representation. Of course, expenses for travel and accommodation are paid. Tribunals often hear claims from vulnerable and disadvantaged members of society. Formal and expensive court processes are often unsuitable for such people. Tribunals offer a more hospitable, specialised service that caters to their needs, which we hope will provide assistance when required.

I turn now to a point made by the noble Viscount. The social security commissioners will determine cases far quicker than the High Court. Currently, cases are being disposed of in 18 to 19 weeks on average. It is for those reasons that we believe that the changes made by Schedule 1 are a key part of the Bill. It is imperative that we establish appeal rights for new compensation schemes. The final determination of claimants' rights will lie with an independent and specialist body.

Perhaps noble Lords will allow me one moment to seek advice: I have inadvertently misled the Committee, which I want to put right before I sit down. The noble Viscount asked whether this would be an extra layer to the appeal system. It is not because it will take the place of the High Court. In the present system, the process ends at the High Court; there is no ability to go beyond the High Court. I am sorry that I mistakenly said that there was. Now, there will be the ability to go from the commissioners to the Court of Appeal on a point of law if the Court of Appeal agrees to hear it.

The noble Viscount also referred to the need to communicate those rather arcane changes to those who potentially might be involved in them. We recognise the importance of explaining how the new compensation scheme will apply to service personnel. Booklets will be produced to explain how to claim and how to appeal against decisions. We have experience of writing such booklets in clear language. In this case, that is vital so that personnel in the Armed Forces know their rights. We believe that Schedule 1 is important and should stay in the Bill. I have tried to explain why that is so.

5.15 p.m.

Viscount Slim

I thank the noble Lord for that clear and detailed explanation. I thought that he was selling quite well, too.

Lord Bach

But not spinning, I hope.

Schedule 1 agreed to.

[Amendment No. 30 not moved.]

Baroness Dean of Thornton-le-Fylde

moved Amendment No. 31: Before Clause 6, insert the following new clause— "PRE-1973 WAR WIDOWS' PENSIONS ON REMARRIAGE

1. Article 42 of the Naval, Military and Air Forces etc (Disablement and Death) Service Pensions Order 1983 (S.I. 1983/883) is amended as follows.
2. (2) After Article (1A) there is inserted—

Article 42(1) does not apply to a widow or widower of a member of the armed forces whose service terminated before 31st March 1973, and any pension or allowance paid to such a widow or widower (including a pension or supplementary pension paid under Article 29) shall continue whether or not the widow or widower marries or lives with another person as the spouse of that person."

The noble Baroness said: In moving the amendment, I regret that it is not possible for the noble Baroness, Lady Strange—who has been in the vanguard on this issue for many years—to be here today. She asked me if I could speak for both of us, and I am delighted to do so.

I can remember discussing this issue 10 years ago; it has been debated time upon time. However, the logic and strength of the argument has not been lost. I do not believe that this area is caught by the Treasury requirement in the new pensions Bill for the Armed Forces to be cost neutral. As an aside, I have never known a pension scheme to be introduced with a cost neutral requirement. It is extremely difficult of the Treasury to expect that. Certainly I do not think that this area is a victim of that requirement; it is not covered in the Bill.

The more one considers this system and discusses it, the more het up one gets about how unfair it is. What kind of standards are we passing? The majority of these widows cannot be under 60; many of them are over 80. We are saying to them, "If you find someone with whom you want to spend the rest of your life, do not marry them; just kid the system". It is almost reminiscent of the old welfare system in regard to cohabiting. If you were caught co-habiting, you lost your benefit. In a way, we are treating these people far worse than that. The amendment would mean that anyone in this small group of people—I say "small group" because I do not think anyone on the Committee has the numbers; I do not know whether my noble friend the Minister has—should they have the opportunity to spend their declining years in companionship with someone, and marry them or live with them as a spouse, will not lose the money we are paying them now. It will not cost any extra money. It is a simple amendment.

I do not know whether my noble friend has a simple answer but, nevertheless, it is an issue that many feel strongly about. I do not think that a lot of money is involved, but it means an awful lot to the individuals concerned.

The noble Baroness, Lady Strange, said that she was not going to make a Second Reading speech, but one could be tempted. One could go on about how a person of 70, who was receiving a pension, could meet someone and be faced with a choice. If they get married and lose their pension, there is an assumption that their partner will make up the loss—but that is not always the case. Furthermore, the pension they are receiving has nothing to do with their second partner; it relates to a period when their first husband or wife was a member of the Armed Forces. Looking at the date—pre-1973—it is quite clear that we are not talking about many widowers; we are talking mainly about widows.

I hope that the Minister will agree to consider the amendment. I know that the situation I have described is not, strictly speaking, covered by the Bill because it is a new pensions Bill. However, it provides an opportunity to rectify something which this Government and the previous government should be ashamed of not having rectified. It does not involve a huge amount of money. We are simply asking the state to forgo the money it believes it is entitled to but which most of us feel that it is not. I hope the Minister will give me more than a nod and a wink of sympathy. I beg to move.

Lord Astor of Hever

On these Benches, we support the amendment. In the absence of the noble Baroness, Lady Strange, the noble Baroness, Lady Dean, moved the amendment very eloquently and persuasively. This is a matter that is very close to my heart. I was very happy to have my name on the amendment tabled by the noble Baroness, Lady Strange, four years ago. Once again, I thank Jenny Green and the War Widows Association for their briefing on this subject.

I hope that the Government will do something for those war widows, many of whom have had no chance to have children or grandchildren to help them in their old age. No new money needs to be found; the pensions are already being paid. The only saving is the minuscule amount saved by the very small number of people who remarry. This will cost the Government almost nothing, but will demonstrate to our war widows that they are not forgotten.

Lord Morris of Manchester

I join my noble friend Lady Dean in her warm tribute to the noble Baroness, Lady Strange, as president of the War Widows Association. Both here at Westminster and as vice-president of the association, I see time and again the quite remarkable range of work undertaken by the noble Baroness in this deeply important policy area.

As the noble Lord, Lord Astor, said, my noble friend Lady Dean made a compelling case for the amendment. Her speech alone deserves to carry this proposed change to the Bill. My noble friend talked of costs. The provisions of the Bill were referred to on Second Reading as a package, one that is cost-neutral. Of course, the issues of cost and affordability have also been raised from one amendment to another in our proceedings in Committee. Is there anywhere a summary of the anticipated, as it were, gainers and losers? I ask that question because it is the package as a whole that was referred to as cost neutral and not its parts; and it is difficult from time to time to check the overall intention of cost neutrality against the estimates and guesstimates made about the cost of individual amendments to the Bill.

It really would be extremely helpful to us, before we conclude the debate on this amendment, if we could look at the intention of cost neutrality in terms of the parts of the Bill and not merely of the Bill as a whole.

Lord Redesdale

I, too, support the amendment. I believe that no records have been kept on this issue, but I ask why none are being kept? If this is to be a cost-neutral provision, the Government must be taking into account a degree of saving, or a lack of degree of saving. If there is a lack of saving, then there would be no change if the amendment were accepted. However, if a degree of saving has been taken into account, it seems a rather cynical move by the Government to deny elderly people the right to dignity in their old age if they wish to remarry.

Lord Craig of Radley

This Bill, as we have all realised, is fairly unique. It is only very rarely that Parliament is able to review Armed Forces pensions at all. However, this legislation has come and the opportunity should be taken to put right particular legacy issues, of which this is a very important one. I very strongly support the amendment. The arguments have been very well expressed by the noble Baroness, Lady Dean, and others. It would be a great pity if this unique opportunity to correct some of these legacy issues was not taken. The House would be failing in its duty to Parliament if it did not give serious consideration to correcting these small but extremely distressing issues, which are unwarranted in this day and age; the more so when we see what the new schemes will do, not only for widows, but also for partners and even for partners of the same gender.

This is very welcome but it only adds to the importance of correcting some of these legacy issues in relation to the widows of people who have given a great deal to this country and who are viewed, quite rightly, as very special and very important. I support the amendment.

Viscount Slim

At the previous meeting of the Grand Committee I tried to highlight, with others, the situation of widows who receive only one-third of their husband's final pension. I said how iniquitous it was in this day and age, particularly when down the Corridor in another place, and elsewhere, widows do very much better in the pension game. I do not blame only this Government; the previous government was also culpable, except for the excellent work of the noble Lord, Lord Freyberg, and the noble Baroness, Lady Strange, on one occasion.

I do not know why governments have it in for widows of the military; I simply do not understand it. As I have explained, they are women who have suffered considerably in many ways—much more than the wives of the average civilian or Member of Parliament. Rather like the way in which the Prime Minister took a grip of the campaign for an extra payment to prisoners of war of the Japanese, I would ask the Minister to take much higher the issue of military widows always being set upon, and resolve it. It is not right that in this day and age a widow should be persecuted, as the noble Baroness, Lady Dean, said. It is quite wrong that widows should receive only one-third of a pension, and a pretty miserable pension too.

This constant political excuse of not being able to do anything retrospectively to put matters right smacks of weak government, weak decision-making and certainly weak management.

5.30 p.m.

Baroness Crawley

I am grateful to all noble Lords who have taken part in this serious debate. I agree that we have missed the noble Baroness, Lady Strange, today, but the noble Baroness, Lady Dean, has done sterling work in moving the amendment.

I propose to resist the amendment, which seeks to insert a new clause to amend war pensions legislation to allow war widows' pensions to be paid for life to one specific group of widows and widowers. Article 42 of the Service Pensions Order, which contains the rules of the war pensions scheme, provides that payment of war widows' pensions ceases on remarriage or cohabitation. This rule applies equally to all war widows and widowers.

War widows' pensions are paid at a preferential rate compared with the Department for Work and Pensions widows' pensions because of the special circumstances of their widowhood. The standard war widow's pension is paid at about 20 per cent higher than national insurance widows' pensions, with no time limits for claiming. It is tax free and not income related. So I would gently disagree with the noble Viscount, Lord Slim, in his complaint, expressed quite bitterly, about this Government's view of war widows.

There are two arguments against the change proposed. First, the proposed amendment to the war pensions legislation is divisive and will create inequity in the scheme. Under the proposal, widows and widowers of service personnel who died or left the service before 31 March 1973 would be able to retain their war pension on remarriage or cohabitation, but all other war widows and widowers would not. This would create a single group of war widows and widowers who are treated more favourably than others in a similar situation.

The second argument against the proposed change is that it is likely that the change would involve retrospection to benefit those who have already remarried or cohabited. This would be difficult to reconcile with the policy of successive governments and could set a difficult precedent for other campaigns for similar retrospective change. A departure from the policy of no retrospection carries very substantial cost implications.

I was asked about the issue of cost neutrality. The Bill does not cover provisions for new, extended benefits under the war pensions scheme. Cost neutrality has been applied only to the new pension and compensation arrangements. We know that the current proposals are cost neutral, and this amendment would represent an additional cost. We do not have a figure, but the numbers are not trivial, nor would be the cost.

I was also asked whether the current scheme would cover cohabitation. As I said, the current scheme covers cohabitation as well as remarriage. We do not have the number of widows who would be aided by this amendment but, as I have said, our records of the trade-off between different parts of the package allow it to be cost neutral. While I cannot give noble Lords an overall figure, records are kept of the different parts of the package that are traded off in order to allow the scheme as a whole to be cost neutral.

Lord Morris of Manchester

I am most grateful to my noble friend for her care in addressing the points raised by noble Lords with whom clearly she does not agree. She referred again to cost neutrality. In doing so she said that it was not in reference to the past, but to the present and the future. But what figures are available for the pre-1973 benefit entitlements? One of the centrally important factors here is that the number of older war widows is declining year by year. The attrition of age-related illnesses and disabilities reduces the population of older war widows year by year. That is why I have argued, along with the noble Baroness, Lady Strange, and my noble friend Lady Dean, and others, that this is a moment for generosity.

The cost cannot be prohibitive in conceding this amendment. I really do think that it would be to the honour of the present Government and much to their benefit if they could at least agree this afternoon to reconsider their position on this very important amendment.

Baroness Dean of Thornton-le-Fylde

I thank all noble Lords who have taken part in this short debate. I think that there is some confusion about the figures because pre-1973 war widows, should they remarry or live with someone as a spouse, lose the whole of their pension, whereas post-1973 widows—as a result of the efforts of the noble Baroness, Lady Strange, and, I believe, the noble Lord, Lord Freyberg, among others—retain their attributable pension as a widow. One can always find a reason for not doing something. However, this amendment addresses a specific group in specific circumstances—a group which is declining in number. It will not increase or make further claims; rather it is now claiming what I would call an occupational pension for the Armed Forces. This is a group of people not covered by those arrangements and which form a special case. While I am always loath to argue special cases, this really is one with which I feel comfortable.

I must confess that the longer this goes on and the more one thinks about it, the more angry and hot under the collar one gets. We seek for something to be maintained, not introduced, and I do not think that it would create a precedent on such a scale that the Government would be faced with having to pay out inordinate sums of money. We are saying simply that these people should be treated decently by today's standards.

We must always remember that we are talking about a group of people who have no power. It is within the gift of the Government to say no, as did the previous government. That group can do nothing about it. While the group has the support of the War Widows' Association, which does marvellous work, the power and leverage must come from Members of this House during their discussion in Committee and at other stages of the Bill. Although this issue is not specifically covered by the legislation, it is important that we deal with it.

I am not convinced that it would be expensive and I am not convinced that the figures show that increasing numbers would be involved. Rather, the numbers will diminish. We are talking about a time in the lives of these people when they are at their most vulnerable. They do not have any leverage or power. At this stage I shall withdraw the amendment, but I would certainly welcome the opportunity to have a discussion with Ministers outside the Grand Committee. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 6 agreed to.

Lord Redesdale

moved Amendment No. 32: After Clause 6, insert the following new clause— POST-RETIREMENT MARRIAGES

1. As of 6th April 2005 widows, widowers and surviving registered unmarried partners of all service personnel shall receive a full widows' forces family pension based on their spouses' or partners' length of service and final salary regardless of the date of marriage or registration.
2. (2) The Social Security Contributions and Benefits Act 1992 (c. 4) shall be amended as follows.
3. (3) After section 35A there is inserted—

"35B POST-RETIREMENT MARRIAGES As of 6th April 2005 nothing in this Act shall prevent the payment of a forces family pension to a widow or widower that is married to a member of the scheme after the member has completed their service in the armed forces.

1. (4) The Social Security Administration Act 1992 (c. 5) shall be amended as follows.
2. (5) After section 188 there is inserted—

"188A POST-RETIREMENT MARRIAGES As of 6th April 2005 nothing in this Act shall prevent the payment of a forces family pension to a widow or widower that is married to a member of the scheme after the member has completed their service in the armed forces."

The noble Lord said: This issue follows in the same vein as the last argument about appealing to the Government to change a situation that is slightly unjust. Judging by the arguments that we have already had, we are not going to get very far on this. However, the amendment deals with the 1978 cut-off.

I thank the members of No Pension 4 U who have written to me on this issue. A large number of people have contacted me about this. It is extremely unfortunate that so many people are put at such a disadvantage over this issue. Even if the Government do resist, I know that they understand the plight in which many people find themselves. As with the last issue, it is impossible to say how many people are affected by this post-retirement marriage Catch-22 because no records are kept. I know that because it was raised at an earlier stage in another place. However, the people that we are dealing with are a diminishing group, the majority of whom are in their 70s to early 90s.

It particularly concerns me that this should be an issue of best practice. Many pension schemes in the private sector have looked at retrospection; British Gas, British Telecom and British Airways pension schemes are all former state pension schemes that have changed. It would be helpful if the Government could say again why the Armed Forces pension scheme should be different. It was also noted in another place that MPs' pensions are not covered by the issue of marriage or non-marriage. It is the marriage at time of pension that is important.

The noble Baroness raised the issue of retrospection. Although this is a great bat and ball to be used on many occasions across the Floor of the House, and I have been involved in a number of the arguments, it should be noted that it is not a hard and fast rule. It can be changed on certain occasions, although those cases are rare. This is a worthy case that should be looked at. It should not be forgotten that Armed Forces' pay is kept at a lower level because of the generous pension provision. That has been set out in many of the benefits that we are seeing in this Bill. Many of the letters that I have received state that many of those serving did not realise that they were going to be caught by this provision in the Act. It seems unfortunate therefore that some of those who served our country so valiantly, and believed that they had provided pensions for their wives who they married after retirement, would not be provided for in this case.

This issue has been debated before. I was reminded by the noble Lord, Lord Freyberg, that we debated this issue in 1995. Before the Minister goes down the usual route of resistance and retrospection, it was supported by the Labour Opposition at the time. I remember voting on the issue, and it was one of the first votes in which the noble Lord, Lord Freyberg, took part. He was being grasped by all sides as the totem of a person who could make this happen. He did valiantly at the time, and we only lost by 14 votes. It would be remarkable if the Government could take a positive step forward and change this provision because they argued so well and so forcefully at that time for it to be changed. I beg to move.

Lord Freyberg

This amendment is also tabled in my name. In speaking to it, I will add further arguments to those of the noble Lord, Lord Redesdale, in support of pensions for widows of pre-1978, post-retirement Armed Forces marriages. I stress the special factors affecting the marriages of the armed services in this whole debate. In the context of the rest of the public services, these have led to considerable discrimination, as I will explain.

5.45 p.m.

First, and most importantly, there is the very young age at which the majority of the Armed Forces is forced to retire. An astonishing 70 per cent of all the services retire at or around 40 years old, and only approximately 5 per cent carry on even to 55. This increases the likelihood of marrying subsequently far more than in any other profession. Thus it can be seen that talking about a read-across with other public services, which is supposed to be the case as things stand, is completely misleading. The age for retirement in the Civil Service has traditionally been 60 for men and 60 for women. The "early" retirement age in the police force and fire brigade is actually 55, an age which is achieved by approximately 5 per cent of the Armed Forces. The Armed Forces have therefore been heavily and uniquely penalised by the pre-1978 PRM pensions rule.

In addition, unlike any other public service, the Armed Forces are stationed abroad for long periods at a time, often in dangerous situations. Single people are thus prevented from meeting likely spouses and the strains on existing marriages are exacerbated, leading to a higher divorce rate than in the civil population and thus an increased likelihood of a post-retirement marriage. It might also be worth mentioning that another factor governing late marriages is that, for officers, early marriage was formally discouraged until 1973 by withholding the payment of marriage allowance—a significant proportion of their total salary.

The result of these factors is that a higher proportion of the Armed Forces has always married after leaving the services than in other professions, including other public services. What we are trying to do in this amendment is to put the Armed Forces on the same footing in this respect as the rest of the public services.

One of the major reasons cited against not introducing pensions for pre-1978 post-retirement marriages is that such a move would be retrospective and with an expensive read-across. But the current read-across is already extremely punitive to the Armed Forces. It is this injustice that needs to be addressed very belatedly and not retrospectively.

Ironically, it has been suggested to me that there is one course of action currently available to couples of post-retirement marriages which would enable a service widow or widower to receive a pension after their spouse's death. Under the Welfare Reform and Pensions Act 1999, the courts have the power to share an individual's occupational pension as part of a divorce settlement. Such an option would not be available if they were to remain married until death. In a recent case, one spouse was entitled to her husband's entire Armed Forces pension as part of their divorce settlement. I cannot imagine that the Government would advocate mass divorce for elderly service people of post-retirement marriages.

Then there is the issue of recall liability. Currently, officers and other ranks can be called up for service after retirement until the age of 60. That means that the Armed Forces contract does not end at the moment of leaving the active list but only terminates when the recall liability has been fully discharged. Until 1973, those who retired and chose not to obey a recall could face severe consequences. The MoD had the power to suspend or withdraw the retired pay of any individual who failed to keep part of the contract.

The other area that needs to be clarified is that of cost. It has been stated this year that it would cost £50 million to introduce pensions for post-retirement marriages in the Armed Forces and between £300 million and £500 million to extend the concession to survivors of members of all public service occupational schemes. Yet, as the noble Lord, Lord Redesdale, said, the Government have always stated that they have no records of the numbers of PRMs.

Furthermore, on 15 September 1997, the then Minister for the Armed Forces, Dr John Reid, said in a letter to Miss Valerie Davey MP: We have, however, made a rough estimate of the cost to the Armed Forces Pension Scheme of retrospectively recognising all post-retirement marriages contracted before 6 April 1978 on the assumption that the incidence of marriage in later life in the services is the same as that found in the general population. On this basis, we would estimate that the immediate effect of full retrospection would be to add about £16 million per year to the cost of Forces Family Widows Pensions".

The Government should know that the cost of providing very limited pensions to post-retirement marriage widows is both enclosed and diminishing. Their numbers are dwindling and there will be no one in the Armed Forces with pre-1978 service in 12 years' time. In the mean time, however, widows and widowers of those who paid into the equivalent of a pension scheme are being denied its benefits.

For individuals, the sums involved are not large, but they make an enormous difference as well as fulfilling the criteria of justice—receiving a widow's pension as a reward for many years of service. For example, a sergeant who retired in 1982, after 22 years of service, would receive an annual pension of £6,927, and his widow's pension would be just £3,463.50 per annum. That is a tiny sum in itself, yet if he had married after retirement, his widow would receive just £629.72 a year, for the four years after 1978. Where is the justice in that? I look forward to the Minister's reply.

Lord Astor of Hever

We on these Benches support the amendment. The noble Lords, Lord Redesdale and Lord Freyberg, both covered very ably the points that I wanted to make. I will not weary the Committee by repeating them.

Lord Morris of Manchester

This is an evocative moment for me, as it must be also for my friend Valerian—the noble Lord, Lord Freyberg—who again this afternoon spoke with such utter commitment and sincerity. It is not the first time that we have joined in supporting legislative change. We did so many years ago in working together in the service of war widows, but at that time he was in one House and I was in the other. Indeed, his maiden speech was linked to propositions I had made in another place. Now we are in the same House, and I am delighted to be following him in support of the amendment now before the Committee. It is one that, by any test, we can well afford, and, as I said at Second Reading, the claims of older war widows are deserving of the highest priority. We all owe them an immense debt of honour. I am most grateful to the noble Lord, Lord Redesdale, for having tabled the amendment. Here again, he has done a very important service to the ex-service community.

Lord Craig of Radley

I support the amendment. Like other noble Lords, I have had considerable mail from individuals whose letters are very poignant and sincere. They feel extremely hard done by, and I think with every justification, as they look around and see how modern practice is to give a very good arrangement which I think we have all supported. They are left out on a limb and that just does not seem to be reasonable or fair. I cannot possibly try to defend it. I do not think that the Government should try to defend it. I think a way should be found to sort this out. The Bill provides a unique opportunity to do that. I hope very sincerely that the Government will take this away and consider what can best be done. It is not satisfactory, and I think we will be failing if we do not attempt to persuade the Government to accept that these post-retirement marriages should be dealt with in a way that ensures that there is no longer a feeling that it is a legacy issue.

Lord Bach

We have heard very powerful, passionate and witty speeches in favour of the amendment. I commend all those who have spoken to the Committee. I know that this is a matter that is deeply felt by all the speakers.

As I understand it, before the passing of the Social Security Pensions Act 1975, in order for a widow to qualify for a pension she and her husband had to have been married at the time her husband was serving. If they married only after he had completed service, at whatever age that might have been, she was not entitled to a pension. The 1975 legislation introduced post-retirement widows' pensions across government. Provision was made in the Armed Forces pension scheme for the payment of pensions to widows of service pensioners who married or remarried after retirement, but this change benefited only the widows of those giving service on or after 6 April 1978—and then, importantly, only on that part of their service that followed on from 6 April 1978. In other words, the service for these purposes was deemed to start on 6 April 1978. Subsequently and importantly, Government policy changes to provide widowers with the same post-retirement provision were introduced later, but that change only benefited the widowers of those giving service on or after 1 October 1987.

That is the background. Let me say a word about the cost. The Government Actuary has estimated that it would cost in the order of £50 million to extend post-retirement widow and widower pensions to all current and deferred Armed Forces pension scheme pensioners. This does not take into account those who had no post-1978 service, who receive no widow's pension. That would cost an unknown amount because we have no idea how many of these people there are.

Lord Redesdale

We have heard the cost of £50 million before. For the benefit of the Committee, can the Minister give a breakdown of that £50 million? Is it a one-off cost or a capital cost?

Lord Bach

I understand that it is a capital cost of £50 million to extend pensions to all those who receive some pension now, or those who are qualified to some extent because of their service on 6 April 1978. It does not take into account those who have no post-1978 service. We do not know how much that would cost.

Lord Freyberg

I am sorry to interrupt the Minister again. Is that a year-on-year cost or is it a one-off capital cost?

Lord Bach

I am sorry to keep the Committee waiting but I think it is important to get the answer right. As I understand it, the one-off cost would be around £50 million and the annual cost would be about £16 million per year. After the Committee finishes, I shall make sure those figures are right and I will write to noble Lords on the position.

But that does not take into account those who had no post-1978 service and who of course received no pension at all, so we do not know who they are or where they are. Nor, of course, does that include the cost if unmarried partners were to be included. But the cost is difficult to establish given the limited information on the number of partners who might be eligible.

This is not just about the cost. No distinction is made between service personnel and public sector employees with regard to the fact that post-retirement widow and widower pensions are available only to the spouses of those with service on or after a specific date. It is also common practice for those who are eligible to have their pensions calculated only on the post 1978–87 service.

Frankly, it has been a longstanding policy of successive governments that changes to improve the benefits of public service pension schemes should be implemented from a current date for future service only. To extend the post-retirement marriage concession to the survivors of service pensioners would put pressure on all public service occupational schemes to do precisely the same. We calculate, although I stress that it is a rough calculation, that extending the provision to all public service occupational schemes would cost between £300 million and £500 million. That is a great deal of money and stops governments of whatever colour from doing what has been put forward so clearly in this particular area.

6 p.m.

Lord Freyberg

As currently worded, this amendment is based on the length of service and final salary of spouses and partners regardless of the date of marriage or registration. If that was changed to 60 years of age—the date of retirement for the majority of those in the public sector; there would be no read-across because it would be the same as that in other public sector services—would the Government look at this in a positive light?

Lord Bach

I am not in a position to be able to answer that one way or another. What the noble Lord has asked me will appear in Hansard and we shall consider it along with all the comments made by noble Lords in this debate.

Lord Freyberg

Will the noble Lord write to me?

Lord Bach

Of course I shall write. It will be part of the letter that I mentioned a few minutes ago.

However, I have to take exception with the noble Lord, Lord Freyberg, about one thing in what I hope is a friendly way; that is, about the contention that somehow those in the Armed Forces marry late. There is no hard evidence in either direction, neither for his proposition nor for the one that I may make inadvertently in the course of my remarks over the next few minutes.

It may well be true that for some officers, late marriage was more the norm than the exception, although not in every case.

Lord Astor of Hever

When I was in the Army, early marriage was positively discouraged.

Lord Bach

I am sure that it was positively discouraged for officers; there is no doubt about that. However, so far as I can tell, I have to say that many soldiers marry and have families when they are extremely young. We can swap anecdotes until the cows come home, and it is good fun to do so, but some hard facts would be helpful. But I do not think that there is anything to suggest, taking the Armed Forces as a whole, that they are a species that marry late.

Lord Craig of Radley

We must remember that we are not talking about the Armed Forces of today, but the Armed Forces of a generation or even two generations ago. The noble Lord, Lord Astor of Hever, is quite right. We were certainly financially discouraged from getting married before the age of 25 in the case of officers. Moreover, many of us were posted overseas with limited opportunities to meet our future loved ones. So I do not think that it necessarily follows that today's position is anything like what it was at the time about which we are talking, which concerns the widows of personnel who served many years ago.

Lord Bach

If I have both the noble Lord, Lord Astor of Hever, and the noble and gallant Lord, Lord Craig, against me, perhaps there is something in the point. However, it would be nice to have some evidence. If there are any data, I invite the noble Lord and those advising him to let me know. I take the point that we are talking largely about a generation or two generations ago rather than today.

I am not clear what the references to the Social Security Contributions and Benefits Act 1992 and the Social Security Administration Act 1992 contained in subsections (2) and (4) of the amendment are designed to achieve. They are not relevant to service pensions but more to social security benefits.

I was gently chided by the noble Lord. Lord Redesdale, about the fact that while in opposition my party took one view and takes another view now. He was too generous, perhaps, to the party that was in power before, which then clearly took one view and takes another now. There may be an explanation for this to be found in the ugly word "retrospection". In other words, once you walk through the portals of government, it is pointed out to you how dangerous it is to allow one's heart to rule one's head in terms of allowing retrospective changes to the law. Once you start doing so, there will be 1,000 good claims for it.

Ministers have to steel themselves in order to combat the natural tendency to be sympathetic to cases put so well. I say to the noble Lord, Lord Redesdale—whose party has not enjoyed government for a few years now—that that is probably the reason for the shift of emphasis. It is mainly for that reason that we find it impossible to accept the amendment, which, as I said, has been so well moved.

Lord Redesdale

I thank the Minister for his reply. We on these Benches are obviously preparing for government—a phrase used by a former party leader which is prophetic in its nature. I also thank him for what he said in regard to the issue of drafting. Obviously this is Grand Committee and this is a probing amendment; I shall want to take on board what has been said before I come back with a redraft.

However, I thank all noble Lords who have spoken on this issue. There is a great deal of support for the amendment. The support of the noble Lord, Lord Astor of Hever, is based on the benefit that would accrue to so many people who perhaps should have been dealt with at an earlier stage. I agree that the hurdle for retrospection should be extremely high; however, I very much hope that this issue will be able to leap over that hurdle.

It has just occurred to me that the two youngest people in this House in 1995 were me and the noble Lord, Lord Freyberg. It seems slightly ironic that we are discussing the same issue nine years later in Committee. I very much hope that we can take the matter forward at another stage, with perhaps a more optimistic response from the Government. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 2 agreed to.

Clause 7 [Amendments and repeals]:

Baroness Crawley

moved Amendment No. 33: Page 3, line 27, at end insert— ( ) In regulation 2 of the Pensions Appeal Tribunals (Late Appeals) Regulations 2001 (S.I. 2001/1032) (interpretation), the words "to which section 8(1) of the Act applies" in the definition of "appeal" are omitted. This amendment is deemed always to have had effect.

The noble Baroness said: I recommend the amendment to the Committee. It is uncontroversial. I have already written to explain the purpose behind it to the noble Lords, Lord Astor and Lord Redesdale, and the noble Baroness, Lady Dean.

When the Pensions Appeal Tribunals (Late Appeals) Regulations 2001 were introduced, it had been intended that the right of a late appeal against an interim assessment should exist. It had been thought that those regulations provided for that, but recently it has become apparent that that is not the case, and that there is no legal basis on which to hear such appeals late. Therefore, there is a need to make the amendment.

The amendment would be beneficial to the ex-service community, and end the inconsistency and unfairness in the way such appeals are dealt with by the three Pensions Appeal Tribunal jurisdictions since the omission in the legislation became known. Currently, the England and Wales PATs continue to allow such appeals to be heard, in the main, whereas those in Scotland and Northern Ireland do not, on the basis that they have no authority to do so. The amendment would clarify the position for all those involved in the appeals process.

The proposed new subsection to Clause 7 would broaden the definition of "appeal" in the late appeals regulations of 2001 to include late interim assessment appeals. That would allow those decisions which have already been processed to be validated, and provide the PAT with the authority to hear pending and fresh appeals. That will validate those late appeals on interim assessments which have already been processed, and provide the PAT with the authority to hear fresh appeals.

I hope that Members of the Committee will accept the amendment. I beg to move.

Lord Astor of Hever

I thank the Minister for the letter. The matter is uncontroversial, and I am happy to accept the amendment.

On Question, amendment agreed to.

Clause 7, as amended, agreed to.

Schedule 3 agreed to.

Clause 8 [Commencement]:

[Amendment No. 33A not moved.]

Clause 8 agreed to.

Clause 9 agreed to.

Clause 10 [Orders]:

[Amendments Nos. 33B and 33C not moved.]

Baroness Crawley

moved Amendment No. 34: Page 4, line 8, after "Act" insert "(other than an order under section 8)

The noble Baroness said: The commencement order under Clause 8 is the only order under the Bill that will not require parliamentary scrutiny. As the Committee will know, commencement powers are not usually subject to any parliamentary procedure. The inclusion of the amendment removes the requirement for the commencement order to be subject to that process. I hope that the Committee will accept the amendment. I beg to move.

On Question, amendment agreed to.

[Amendments Nos. 35 and 36 not moved.]

[Amendment No. 37 had been re-tabled as Amendment No. 29A.]

Clause 10, as amended, agreed to.

Clauses 11 and 12 agreed to.

Bill reported with amendments.

The Committee adjourned at a quarter past six o'clock.