HL Deb 08 September 2004 vol 664 cc624-30

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."

The noble Lord said: My Lords, I wish to speak to Amendment No. 16 and to support Amendment No. 17 to which my name is attached. This is one of a number of legacy issues that we have discussed at some time at earlier stages of the Bill in relation to slightly different issues. I know that the Minister will say, in those immortal words, "I resist this most strenuously", and I know that were Ito press this amendment at this late stage of the day I would have no joy whatever. I intended considering pressing this amendment, but due to the lateness of the hour and the fact that our troops have all gone home, and I would not be able to gloat over the result, it is not appropriate for me to push this matter.

Although I am being slightly flippant, the issue is a serious one and it needs to be aired. It is also one to which we shall return at a later stage of the Bill as there are a large number of pensioner widowers who have found themselves in the very problematic position of marrying post-retirement. They could be married for a number of decades and when the partner who was a member of the services dies no provision is made for them. Therefore, such people find that they may not have simply a reduced pension, but no pension at all. The difficulty is that the person who was in the services made no provision for such a partner after he died. Therefore, such people become caught in the rather difficult position of not having been able to make provision in the past.

To introduce such legislation retrospectively would produce many of the problems that retrospection has in legislation. I know that the Minister would have difficulty with that. Amendments Nos. 15 and 16 put forward the concept of a pension being enacted from 6 April 2005. Amendment No. 17 plays with semantics and tries to make the pill less bitter to swallow for the Minister, although I know he will not swallow it anyway, which is unfortunate. However, it is important to note that there are a large number of mostly women who find themselves in this position. Many are in their 60s or 70s—although not necessarily of that age—and many find themselves in a difficult position.

At an earlier stage the Minister said that the Government would be looking at legacy issues. I very much hope that that is not just a form of words and that the Minister can think again. Of course this is some years after the constraints of the schemes to which the servicemen signed up and good practice now means that certain people are not caught by this situation. I beg to move.

7 p.m.

Lord Freyberg

My Lords, Amendment No. 17 in my name is along similar lines to that tabled by the noble Lord, Lord Redesdale. It differs in one crucial respect in that it imposes an added age restriction. I should like to explain the reasons for that and stress that those who stand to benefit from the amendment are elderly service widows and widowers in their 70s, 80s and 90s who feel let down that their spouse's years of service have not counted towards their pensions. I believe that it is the responsibility of government to right injustices inadvertently created by previous legislation, and that is certainly the case here.

At present, widows and widowers of pre-1978 post-retirement service marriages receive no service pension. In this they are at a severe disadvantage to their equivalents in other public services. That is because the majority of those who served in the Armed Forces at this time were obliged to retire at or around the age of 40, while the vast majority of those in other public services retired at 60. Thus, public servants who retired in the late 1970s with the requisite pensionable years of service were able to marry or remarry up to the age of 60 and pass on a widow's pension when they died. However, during the same period, of those who retired from the services, the majority had to have married by the age of 40 to be able to pass on their pension. In that respect the Armed Forces were uniquely disadvantaged.

In Grand Committee and in a subsequent letter to the noble Lord, Lord Redesdale, the Minister seemed to be under the impression that we are asking for special treatment for PRM widows. Not so; we are asking for a greater degree of parity. Is it so unreasonable for someone working in the Armed Forces to have equal rather than inferior employment rights to civil servants who never have to put their lives on the line for their country? It is worth remembering too that forces personnel have always been obliged to live for long periods in far-flung parts of the world, which puts strains on marriages not endured by those living at home and makes it harder to find marriage partners in the first place.

The reason for proposing 60 as the cut-off age for pre-1978 PRM widow's pensions is twofold. First, it would give service widows the same cut-off age as others in the public sector. Secondly, 60 is the limit for recall liability. By making the cut-off age the same as that for civil servants, the possibility of an expensive read-across is significantly reduced, something that I know concerns the Minister. Sixty is also the age limit for officers and other ranks to be called up for service even after retirement. Moreover, until 1973, when a large proportion of those we are discussing were serving, anyone who failed a recall could face severe consequences.

Prior to 1975, members of the Armed Forces had to serve for 22 years in the case of other ranks and 16 years for officers to qualify for pension rights at all. In the Minister's letter of 30 July 2004 to the noble Lord, Lord Redesdale, the Minister stated: Those with substantial periods of service who married after retiring would be the main beneficiaries [of the amendment], but it could not be argued that this group merited exceptional treatment as against other similarly affected pensioners in the UK". That seems a bizarre assertion. Of course those with the greatest periods of service deserve to benefit most, while his statement that there are other groups of similarly affected pensioners in the UK is demonstrably false. The police and the fire service have the earlier-than-average retirement age of 55, but only the Armed Forces forcibly eject personnel at around the age of 40 and have long periods of service abroad. Furthermore, although the retirement age for officers is 55, only 5 per cent reach even that target.

I should like to address the Minister's assertion in Grand Committee in July that this amendment would cost £50 million. The Government have been unable to give a basis for this in spite of many requests over more than a decade for research into costs and the number of personnel involved. For example, earlier in the year, in another place there was a request for a breakdown of the £50 million calculation. No such breakdown has been forthcoming, nor has any effort apparently been made to calculate the number of personnel. In Grand Committee in this House, a series of sums greater than £50 million were announced and then corrected and revised down in a subsequent letter to the noble Lord, Lord Redesdale. In the absence of evidence on where the figures have come from, one can only assume that the actuaries' estimates are little more than guesswork. What one can say with certainty is that the cost of the amendment would be enclosed and diminishing, as well as just.

The widows and widowers are puzzled and angry that they are being financially penalised for marrying later in life, but no later than many in the Civil Service at this time who were then able to claim a widow's pension. The Labour Party recognised the justice of this cause when it supported an amendment on the subject in the House in 1995, led by the esteemed noble Baroness, Lady Hollis. The facts are the same 10 years on, and the costs involved have decreased. I hope that this Administration will do the decent thing and not turn their back on the injustice that they rightly perceived.

Lord Steel of Aikwood

My Lords, I rise briefly to support one or other of the amendments proposed by my noble friend Lord Redesdale and the noble Lord, Lord Freyberg. I do so simply because, to my surprise, I received a number of letters on the subject. I do not know why; I am not a pensions or defence expert.

In our democracy people wonder whether it is worth writing to Members of the House of Commons or the House of Lords. When they take the trouble to do so and not to send circulars, I think that one should pay some attention.

I want to take issue with my noble friend Lord Redesdale in suggesting that all the troops have gone home. I do not understand how he can say that sitting in front of our most gallant noble friend Lord Garden—a very distinguished trooper indeed—not to mention myself and my noble friend Lord Thomas, but we will take issue with him later.

I said I would briefly support the amendment because I understand we are not pressing the matter and hope to return to it on another occasion. I should like to quote from one of these letters which illustrates in a personal way exactly what the noble Lord, Lord Freyberg, said. I shall not give the name and address of the person but he is a retired squadron leader. He said: I served continuously in the Royal Air force from 1938 until 1971. I married in 1939 and my wife was with me throughout my Service and when I retired in 1971. She died in 1975, 4 years after I retired. I remarried in 1977. If my present wife is widowed she will not get any related widow's pension. Throughout my Royal Air Force Service my pay was adjusted at source … to pay for the Armed Forces Pension Scheme, which includes widow's benefits. Therefore, throughout my Service, I have 'bought' an entitlement for my widow to receive a pension irrespective of the date of my marriage. Since, by their very nature, my contributions can never be refunded, my widow's pension rights must always remain 'bought'". That is a telling example and it is a matter of financial as well as general justice in comparison with others in other walks of life as the noble Lord said. I hope the Government will therefore give this serious thought before the issue comes before the House again.

Lord Craig of Radley

My Lords, I rise also very briefly to support the amendment. I have already drawn attention to the fact that the parliamentary pension scheme does not prevent the widow of an MP getting a pension regardless of when she marries her late husband. The Armed Forces are in a special category when it comes to pensions because of reserve commitments after retirement, much earlier retirement and, sadly, the greater likelihood of premature death. We should try to do something regarding pensions for post-retirement marriages.

Lord Bach

My Lords, I know the strength of feeling on this long-standing issue. I am surprised that we have had a debate about it today given that, as I understood it, the matter was to come before the House later in the Bill. But there has been a debate, so I am afraid that I must answer it. I do not resent answering it on the grounds that it is not a serious question—it is a very important question; I appreciate that. But if the amendment had been withdrawn straightaway, we could have had this debate and, if the noble Lord wanted to see it to a conclusion, we could have voted on it on the next occasion.

I resist both amendments, I am afraid. Post-retirement widows' pensions were introduced following government-wide changes in policy through the Social Security Pensions Act 1975. Provision was made in the current 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. Subsequent government policy changes to provide widowers with the same post-retirement provision were introduced later, but this change benefited only the widowers of those giving service on or after 1 October 1987.

Amendment No. 16, if carried, would have three effects. First, it would allow all service widows and widowers to qualify for a post-retirement widows' pension regardless of the date of their marriage. Secondly, it would increase the rate of post-retirement widows' pension for those widows and widowers who currently receive a post-retirement pension based on only that part of their spouse's service after the changes were made. Thirdly, it would improve the benefits of unmarried partners who currently receive benefits only if their partners are attributably killed in service—that is, their death is due to service.

Amendment No. 16, if carried, would not have the impact that the noble Lord who moved it intended that it should have. The principal underlying rationale was that the current position unfairly penalised those who might have been encouraged to delay marriage but then left after a relatively short period of service and therefore married after retirement. Many of those whom the measure is designed to benefit would have no entitlement to a pension, even if this change were carried. The overwhelming majority of the widows affected would have spouses whose career in the Armed Forces pre-dated not only April 1978, when post-retirement widows' pensions were introduced, but also April 1975, when preserved pensions were introduced.

There was no legal requirement to preserve pension rights before that date for those who left before completing enough service to qualify for a pension—22 years for other ranks and 16 years for officers. This position was not unique to the Armed Forces and affected most other public service and private sector workers. Those with substantial periods of service who married after retiring would be the main beneficiaries, but it could not be argued that this group merited exceptional treatment as against other similarly affected pensioners in the United Kingdom.

As the noble Lord, Lord Freyberg, has said, the Government Actuary has estimated that there would be a one-off cost in the order of £50 million to extend post-retirement widows' and widowers' pensions to all current and deferred AFPS pensioners. The noble Lord asked for the figure to be broken down. I cannot do that at the Dispatch Box today but I shall ensure that the noble Lord is written to next week with an attempt at a breakdown—he was justified in asking that question. It will cost around £50 million. The cost would increase if unmarried partners were to be included, but it is difficult to estimate given the limited information on the number of partners who might be eligible. There would be no future annual cost.

I explained in Committee that there is no distinction between Armed Forces personnel and other public service employees with regard to the fact that the post-retirement widows' and widowers' pensions are available only to the spouses of those with service on or after a specific date. It has been the long-standing policy of successive governments that changes to improve the benefits from public service pension schemes should be implemented from a current date for future service only. To extend the post-retirement marriage concession only to survivors of service pensioners would therefore put pressure on all public service occupational schemes. Extending the provision to all public service occupational schemes would cost between £300 million and £500 million.

7.15 p.m.

Furthermore, as the noble Lord, Lord Redesdale, graciously acknowledged, the amendment would be in breach of the principle of retrospection, which has been followed by governments of all colours throughout the ages—and immediately denied by opposition parties when they get into government. I do not say that with any relish, but it is just the way it happens, I am afraid.

Amendment No. 17 would limit the benefit to those marrying before the service person's 60th birthday. It would still mean that there was a significant cost, both to the MoD and to other public service schemes, because we could not treat Armed Forces personnel differently on this issue, as I have attempted to explain.

For those reasons, and with no joy in my heart, I resist the amendments, which were so ably moved. The noble Lord has said that he may return to the matter at a later stage. If he does, I hope that I will be in a position to speak on the amendment again. But I am afraid that I cannot give out any hope at all that our position will change; it would set an unfortunate precedent. The noble Lord says that the Government have made no concessions on legacy issues. I am afraid that I dispute that: our concession on Amendment No. 14 was on a legacy issue. The difference between Amendment No. 14 and this amendment is that the former is not retrospective.

Lord Redesdale

My Lords, I thank the Minister for his reply. I know that it is not an easy issue; nor is it a party-political issue on which points could be scored. The issue affects many people. I understand that Amendment No. 14 has very few cost implications, which is one of the guiding principles whereby it can be agreed, whereas the other legacy issues cannot be accepted. I wished the issue to be aired today. It was useful for people to put their points across because, if the issue will never be solved, that must be stated in the House without giving the impression that this or any government will change the situation without fundamental changes to the whole way in which pensions are looked at. I may return to the matter, but I thank the Minister for his reply. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Freyberg had given notice of his intention to move Amendment No. 17:

After Clause 6, insert the following new clause"—