HL Deb 20 May 2003 vol 648 cc687-91

2.50 p.m.

Lord Vincent of Coleshill

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare an interest as vice president (unremunerated) of the Forces Pension Society.

The Question was as follows:

To ask Her Majesty's Government what action they propose to take to improve the Armed Forces pension scheme with respect to the death in service benefit paid to the spouses of those killed in action.

Lord Bach

My Lords, the Ministry of Defence's two reviews of the Armed Forces pension and compensation schemes have included consideration of the level of death in service benefits. We expect to finalise proposals for the new Armed Forces pension and compensation scheme and to make a public announcement of the key proposals before the summer Recess. The new schemes will not be introduced before 2005–06. We have no plans to enhance the current death in service benefit ahead of implementing the findings of the reviews.

Lord Vincent of Coleshill

My Lords, I thank the Minister for his reply. Given that members of the Armed Forces accept a unique commitment by putting their lives at risk whenever and wherever they are sent on operational duty—as was demonstrated this year with 35 of them dying in operations associated with Iraq—does not the Minister agree that the death in service benefit paid in respect of those killed serving their country in this exceptional way, which is currently set at no more than twice their annual salary, should at least be as good as the related benefits paid, for example, to firemen, Members of Parliament and policemen, where the present rates vary between three and five times their salaries?

Lord Bach

My Lords, I agree with what the noble and gallant Lord said about the bravery, courage and dedication to duty shown by all our Armed Forces. We think particularly of those who died in the service of this country. As far as our obligations are concerned, of course we all owe them much more than. frankly, we can ever pay. But I have to say that while the death in service benefit for the Armed Forces is, as the noble and gallant Lord said, below that of, for example, the police and fire service schemes, it does need to be seen in the context of the other benefits available under our compensation arrangements.

For example, although the police and fire service pension schemes pay a short-term widow's pension equal to the officer's pensionable pay for a period of three months, the Armed Forces scheme pays a short-term pension for six months. That means that the serviceman's widow sees no reduction in the household income for a further three months. The police and fire services long-term widow's pension is comparable to an Armed Forces widow's pension. However, the Armed Forces widow's pension is paid for life and, of course, this is increased annually with inflation, unlike the police and fire schemes which cease on remarriage or cohabitation. A pension for life is, of course, extremely valuable for young widows with children.

A serviceman's widow receives a tax-free war widow's pension under the War Pension Scheme. However, this ceases, as the noble and gallant Lord will know, on remarriage or cohabitation. The widow may be also eligible for rent allowance under the War Pension Scheme. Children's pensions are comparable but there is an additional tax-free children's allowance payable under the War Pension Scheme. I am sorry that I have taken so long to answer the noble and gallant Lord's question, but he raises a very important point.

Lord Vivian

My Lords, prior to the recent conflict in Iraq, the MoD introduced emergency affected

pension rights for single partners of servicemen and women who are killed in combat. Will the Minister explain why, at the same time, the Ministry of Defence neglected to raise death in service lump sum benefits commensurate with modern standard practice, whether single or married?

Lord Bach

My Lords, the reason that we did not raise that benefit at this particular time is because we think it best to wait until the new scheme, which it is hoped will be announced before the Recess, comes into effect. Once one starts tampering with one side of the benefits that make up this compensation, one has to start tampering with the others. Although it is hard, we consider it best to stay where we are until we can produce a comprehensive new scheme. That is the reason why we behaved in the way that we have.

Lord Craig of Radley

My Lords, can the Minister give the House an indication as to whether this long and protracted MoD pension review is required to be cost neutral, bearing in mind, for example, that when the death in service benefit for Members of Parliament was raised in July 2001 from three to four times basic salary, it was stated that,

The cost of this was to be met by the Exchequer"? In other words, can the Minister confirm that where it is necessary to follow modern practice on pensions there is no bar on the additional cost which that would require to meet?

Lord Bach

My Lords, I am afraid that I cannot confirm that for the noble and gallant Lord. Our intention is that the changes in this particular field will be cost neutral.

Lord Redesdale

My Lords, can the Minister say when the Government will actually start the reviewing process for unmarried partners? Obviously, the issue affects quite a few service personnel. Will it take place in the next year or so?

Lord Bach

My Lords, the noble Lord will know that on 20th March this year the Minister for Veterans, Dr Lewis Moonie, announced that ex gratia awards, equivalent to benefits paid to a surviving spouse under the Armed Forces pension scheme, may be awarded to their unmarried partner where the service person's death is as a result of conflict and the relationship is deemed to have been substantial.

Lord Elton

My Lords, can the Minister tell us how he will explain to recipients of the new pension arrangements which he has described for the Armed Forces the reasons for treating them less favourably than Members of the House of Commons?

Lord Bach

My Lords, I have not described what these new arrangements will be. I am not in a position to do so. Even if I were, I would not until a proper

announcement had been made. But when these announcements are made, I have no doubt that we shall answer the question raised by the noble Lord.

Baroness Strange

My Lords, is the Minister aware that as president of the War Widows Association of Great Britain I, and all my ladies, agree totally with all that my noble and gallant friend Lord Vincent said and, also, with all the things that he did not have time to say? Is he also aware that George Washington once said that the strength of a country's armed forces was directly relevant to the way in which it treated its service pensioners and its war widows?

Lord Bach

My Lords, I am well aware that the noble Baroness, with her experience and close interest in this field, will have much common feeling with the noble and gallant Lord who asked this Question. It is important to point out that our view is that the overall scheme—not just the death in service benefit but the other items that I have attempted to set out in short—represents an above average way of dealing with this problem compared to other public services.

Lord Acton

My Lords, can my noble friend say, in respect of the overall scheme to which he has referred—

Lord Davies of Coity

My Lords, I am wondering—

The Minister for Trade (Baroness Symons of Vernham Dean)

My Lords, there is plenty of time. Perhaps we should hear first from the noble Lord. Lord Acton.

Lord Acton

My Lords, would my noble friend explain, in relation to the overall scheme which he described to the noble and gallant Lord, Lord Vincent, which family an actuary would say is better off? Would it be the family of a member of the Armed Forces, the family of a member of the police or the family of a member of the fire service? I could not understand it.

Lord Bach

My Lords, I could not say which family would say they were better off. I have said that the fact that the death in service benefit is less at the present time for widows in this field is countered, to a considerable extent, by the increase that there is in pensions and the tax position, too.

Lord Campbell of Croy

My Lords, will the review of the pension scheme take full account of deaths in action in peace-keeping and similar operations which are not necessarily regarded as war against an enemy?

Lord Bach

My Lords, I am happy that at last I can confirm a question put to me. Yes, I can confirm that. Indeed, members of the Armed Forces who lose their lives in training, let alone in peace-keeping operations, are eligible for the death in service benefit and the other compensations I have mentioned. It is a question of whether the death or the injury—the death in this case—is attributable to their service.

Lord Davies of Coity

My Lords, I am sure—

The Earl of Erroll

My Lords—

Baroness Symons of Vernham Dean

My Lords, we have heard only once from the Labour Benches. The noble Lord, Lord Davies, has been very patient. I suggest we hear from him and then hear from the Cross Benches.

Lord Davies of Coity

My Lords, I am sure that my noble friend is aware that, in industry generally, if an employer or one of his servants is neglectfully responsible for the death of another employee, considerable insurance payments are made in compensation. Can the Minister say whether any such approach is taken in respect of soldiers killed as a result of so-called friendly fire?

Lord Bach

My Lords, it is not appropriate to make a complete comparison between what may happen in industry and what may happen in the heat of battle.

The Earl of Erroll

My Lords, how can the Minister possibly say that the Armed Forces scheme is as generous as the parliamentary scheme? As he has admitted, the Armed Forces scheme is cost neutral whereas the costs of the parliamentary scheme fall on the Exchequer.

Lord Bach

My Lords, I do not think I said that it was as generous as the parliamentary scheme. I do not think I have commented on that one way or the other. I am saying that the present scheme is being altered and that the intention is to alter it for the better. We shall have to see how that turns out.