Married Quarters (Osnabrück) (Hansard, 20 January 2004)

§ Mr. Paul Stinchcombe (Wellingborough)(Lab)
Thank you, Sir Nicholas, for giving me the opportunity to bring before this Chamber the case of four of my constituents, Mr. and Mrs. Michael Smith and their two children—and, more particularly, their treatment by the British armed forces. I am also grateful for the presence of the Minister, who will shortly reply to the debate; I look forward to his reply with real hope. I hope that he will take this opportunity to undertake to look again at the circumstances that I am about to describe, with a view to remedying what I perceive to be the injustice that my constituents have suffered.
The cause of that injustice lies in an accident that took place four years ago at the Army base at which you, Sir Nicholas, once served. At that time, Mr. Smith was a warrant officer. He was a member of the British Army, serving in the Queen's Royal Lancers. Warrant Officer Smith joined the Army as a 16-year-old in 1977. In 2000, when the accident happened, he had served for nearly 24 years. He had an entirely unblemished Army record, and was approaching the time when he would retire from the forces.
Warrant Officer Smith's last posting abroad was in Osnabrück in Germany, where he lived with his wife and children as the tenant of his employer, the Army; he lived in Army married quarters on an Army base. On 23 May 2000, he went to work as usual, as did his wife; and their two children went to school. But it was not a usual day. When they were away from home, an accident happened—and it was some accident. At a quarter past midday, an explosion ripped through their quarters.
It is sometimes easy when speaking in the House to cross the fine line between a passionate belief in defending one's constituents and hyperbole, but I have seen the photographs of my constituents' married quarters after that explosion. Indeed, I have them with me. Their accommodation was completely destroyed, and with it was destroyed all my constituents' worldly possessions—everything that they owned. When the insurance man came to assess the damage, his jaw dropped and he called his office on the mobile phone, "It's all gone," he said; "It's all gone."
As I said at the outset, the explosion was an accident. It was not terrorism that destroyed my constituent's Army home, nor was it enemy action. It was not even the munitions stored on the base that caused the explosion. It was far more banal than that. A faulty gas pipe had been laid when the Army base was constructed in 1964. Some 36 years later, some German workers were working on that gas pipe outside my constituents' married quarters, but they were unaware that it was faulty. They disturbed it, and it exploded. It was as simple as that and, as the gas pipe exploded, it took my constituents' Army home with it.
However hard we try to do so I dare say that none of us will ever appreciate—unless something similar happens to us—how traumatic that explosion was for my constituents. We may not know what it feels like to lose everything—what it feels like to wonder what would have happened if the children had not gone to school that day—but we can try. After all, we know 399WH how violated we would feel if a burglar had entered our home and tinkered with our treasured and private possessions. How much more traumatised would we feel if that home was not simply entered and trifled with, but totally destroyed—and with it, everything that we had saved for, everything that we owned, everything that we cherished, whether of financial or sentimental value? How would we feel if we lost the entire physical record of our family life? My constituents lost absolutely everything—not just some furniture and some fittings, but all their furniture and all their fittings. The schedule of items that they lost covered seven pages.
Mr. and Mrs. Smith claimed under their household insurance, and one might reasonably feel that £18,000 of cover would be more than enough to deal with any foreseeable eventuality. After all, they were living in an Army home and did not have to cover structural damage, and £18,000 is surely many times more than even the most expensive household item. However, their household insurance did not cover the loss that they suffered, because they lost their entire household. That must have been wholly unforeseeable, especially in the secure confines of Army quarters on an Army base. Indeed, Mr. Smith told me that he never thought that he could lose everything in those circumstances. However, the day after the explosion, he had to spend £100 simply to replace underpants.
In the end, Mr. Smith recovered £18,000, but what he lost cost £40,000. After nearly 24 years' service in the Army, he was £22,000 down—he had lost nearly £1,000 for every year of service. That is not a great amount in the grand design of global army budgets, when one missile might cost hundreds of thousands of pounds, but it is a small fortune for a soldier's family on an ordinary income.
Understandably, Warrant Officer Smith looked to the Army and, ultimately, to the Ministry of Defence for a bit of help as the members of his family tried to rebuild their lives. One might intuitively feel that he had good reason to feel optimistic that the Army, which he had served for so long, would at least stand by him sympathetically. After all, it was his employer and his landlord, and he was not only serving with the Army but living on an Army base when a faulty gas pipe outside his Army married quarters caused the accident. Through no fault of the Smith family, their home was blown up, destroying everything that they owned and leaving them £22,000 out of pocket. No wonder Mr. Smith looked to the Army for help and support.
In January 2001, after Warrant Officer Smith had completed his service, the Ministry of Defence held a board of inquiry into the accident. However, the Ministry simply denied liability for the fault in the gas pipe that had caused the explosion, suggesting that Mr. Smith pursue the German workers who had disturbed the pipe or even the German utility company that had laid it. My constituents duly instructed lawyers, but they could not help either, because they soon discovered that, despite losing £22,000 through no fault of their own, the Smith family had no legal remedy against anyone for the shortfall. Like the Ministry of Defence, everyone else denied liability. The workers who disturbed the pipe said that they did not know that it was faulty when it was laid and that they had 400WH not been negligent. The utility company, which was at fault when it laid the pipe, pointed to the German equivalent of a statute of limitations. The simple fact was that the pipe had been laid so long ago that any right to make a claim had expired. My constituents therefore had no redress against anyone. Through no fault of their own, they had lost everything that they owned and received only partial compensation. They needed £22,000 simply to get back to square one, but no one was legally liable to compensate them for that loss.
It was in those circumstances that I first wrote to the Secretary of State for Defence, on 19 July 2001, to ask him to intervene. I said that Warrant Officer Smith had served his country loyally for 24 years, but that he had been denied compensation for his furniture and possessions, which were destroyed when his Army home blew up through no fault of his own. I said that that simply could not be right and that, at the very least, the Ministry of Defence had a moral obligation to do better. The then Under-Secretary of State for Defence replied on 8 August 2001. He told me that no compensation could be offered, because the MOD had no legal liability. On that basis, he washed his hands of any responsibility to help the Smiths out of the mess that they were in through no fault of their own. He washed his hands even though Warrant Officer Smith was in the Army's employ, living in its quarters, on its base and under its instruction when his family home blew up. The then Under-Secretary suggested that, instead, my constituents seek Army legal aid to pursue the German companies even though, for the reasons that I have already given, no such action could successfully be brought.
Sir Nicholas, you will appreciate that that response was received with disappointment by both the Smiths and by me. I wrote back to the Minister on 4 September 2001, pointing out that the German companies denied liability and that my constituents had been advised that they had no remedy against them, and I took issue with his assertion that the MOD could not compensate my constituents, whatever its legal obligation. I suggested that the Ministry could not be wholly without discretion in such a case. Even if it was not technically responsible in law for the devastation nor obliged to offer compensation, it surely had the capacity to do so it if thought fit, just as any employer in the private sector has the discretion to help an employee as a matter of good practice or good will—not least because it is in the interests of the morale of the entire work force and therefore serves the employer's interests as well.
I urged the then Minister to take independent legal advice as to whether the Ministry had the discretion to make an ex gratia payment. His successor Minister replied on 2 September 2002, stating: In common with other employers, the MOD does not provide insurance cover for its employees' personal belongings. It is the responsibility of the individual to ensure adequate insurance cover is arranged. That answer is so thin and lame as to be an embarrassment. It does not even purport to answer the question that I asked. It was a simple question, amenable to a one-word answer—yes or no—and it still is, so I ask it again: has the Army the capacity in law to make an ex gratia payment to my constituent? 401WH Could it, if it thought the circumstances so exceptional that fairness demanded that discretion be exercised in his favour, exercise such discretion? I ask the new Minister directly, and hope that this time I will receive a response. Moreover, I expect that response to be yes—the MOD has the discretion to compensate my constituent if it wishes to do so. However, it has in the past refused to exercise that discretion for reasons that are apparent, if one looks carefully, from its replies about the adequacy of insurance cover.
If that is the answer, I urge the Minister, at this of all times with the eyes of so many on his Department, to reconsider three simple reasons. First, it is surely wrong to treat Warrant Officer Smith and the Army that he served like all other employees and employers. Warrant Officer Smith was a soldier with an unblemished record of 24 years, willing to sacrifice his life in the service of the Army and the nation. That alone deserves a degree of consideration from his employer beyond the bare legal minimum. Secondly, I do not believe that even the civilian world would act so shabbily. Imagine a corporate analogy to this case—that of a foreign banker posted to Canary wharf and put up in a company flat, in a company tower, secured by the company's security guards. I bet that if that flat exploded through no fault of the employee and he lost everything, the company would make up any insurance shortfall, because it would know how hard it would be to recruit a replacement otherwise. In which case, how can it possibly be right for our armed forces to offer less support to our servicemen than a bank might to its staff?
Thirdly, I ask for discretion to be exercised. It is simply wrong to assert that Mr. and Mrs. Smith had been negligent or irresponsible in failing to insure themselves adequately. They took out £18,000 worth of insurance, which was more than enough to cover all the risks that anyone could reasonably have contemplated. The problem was just that they had never contemplated that, living in Army quarters, they would run the risk of losing absolutely everything. Surely the Army should share some responsibility for the fact that the unthinkable happened on its base.
The then Minister ended his last letter to me with the words: I am content that taking account of the compensation already received, Mr and Mrs Smith have not been unfairly treated. I do not share that confidence. Even taking the compensation into account, my constituents are £22,000 poorer—about the level of a ministerial salary before tax—through no fault of their own, simply because they were living in an Army home when it exploded into smithereens. Does the Minister believe the case to be fair? Does he want to send the message to potential recruits that they should join the Army, serve loyally, live in quarters on Army bases that get blown up and lose the lot, because there is no duty—neither legal nor moral—to house people safely? If so, overstretch might last for quite a while.
I do not come to this Chamber to ask the Minister for the world or even for a decision to compensate my constituents for everything that they have lost. I ask 402WH the Minister for just one thing: to promise at least to review the case, so that justice, even now, might yet be done.

§ The Parliamentary Under-Secretary of State for Defence (Mr. Ivor Caplin)
I congratulate my hon. Friend the Member for Wellingborough (Mr. Stinchcombe) on securing this debate, which gives me the opportunity to explain the Ministry of Defence position on such an unfortunate subject.
Osnabrück garrison is one of five British Army centres in Germany. About 5,000 of the 23,000 British soldiers based in Germany are located there, mainly as part of 4 Armoured Brigade. The garrison's domestic accommodation consists of about 1,500 serving families' quarters, which, like all accommodation in Germany, are not Ministry of Defence property. Some 746 are provided by the German Federal Government, under the terms of a supplementary agreement to the NATO status of forces agreement. Federal authorities lease the remainder on behalf of the Ministry of Defence. However, the Department is responsible for the maintenance of those properties, most of which were built more than 50 years ago. We are already investing in a range of improvements to those properties, which I hope will be completed in the next few years.
We provide quarters to all service families who need them, under the terms and conditions of their service. Entitlement to quarters is governed by scales that define the appropriate size and type of building, according to rank and family needs. The taxpayer, because of the unique role of our armed forces, rightly bears the risks associated with that commitment, which in Germany includes those associated with any damage to the property itself. However, the taxpayer cannot be responsible for the personal property of our personnel. We therefore make it clear to all service personnel that they should make arrangements to insure their possessions adequately. We also provide facilities in Germany, through NAAFI and other commercial outlets, to make arrangements relatively easy for those who wish to use them.
My hon. Friend presents his case eloquently and with some emotion. I recognise and understand that, and I am sure that the House would also recognise it in these especially difficult circumstances. I am, however, disappointed that he implied that the Ministry of Defence has been unsympathetic to Mr. Smith and his family. He did not mention the support that Mr. Smith's unit gave his family at the time of the accident, nor did he explain the efforts made by Army Legal Assistance and the claims staff in Germany in pursuing the case with the German authorities.
The family were re-housed within 24 hours of the accident, having stayed with friends overnight despite being offered hotel accommodation. The new house was fully furnished at public expense, and the family were given the support of the community and a small amount of money from regimental funds to meet their immediate needs. Army Legal Assistance also provided the family with free advice and support for three years, and explored every avenue to find a way of helping them.
On 24 May 2000—the day after the explosion—the German public prosecutor appointed an expert in gas installations to conduct an investigation to ascertain the 403WH cause of the explosion. The expert's report was completed on 16 June 2000. It concluded that a gas pipe, incorrectly fitted probably as long ago as 1953, had caused the explosion, and that the work that Osnabrück municipal services was doing at the time was unlikely to be the cause. Following that report, a full board of inquiry was held. Its report was published on 8 March 2001, and gave three opinions. First, it confirmed that the explosion was caused by a gas leak from a pipe fitted incorrectly during construction in 1953, which may have been disturbed during routine maintenance by the local German authority on the day of the incident. Secondly, the tests, inspections and maintenance of the gas installations carried out under the authority of the British forces during the period before the explosion were of a standard over and above that required by legislation and, in any event. would not have detected the fault. Lastly, the explosion was probably inevitable.
The Ministry of Defence incurred costs of about £1,500 as a result of damage to public property caused by the explosion. In the light of conclusions drawn by the board of inquiry, our officials in Germany lodged a claim through the German Ministry of Finance, which acts as our agent under the treaty. At the same time, the German claims company, which also acts as our agent, sought compensation for Mr. Smith of slightly more than £22,000.
After some debate, the claim lodged by the Ministry of Defence was rejected on the ground that the German authorities were not responsible for damage to publicly owned property in these circumstances, and that it was not possible, after so much time, to identify the contractor who might be liable—a point rightly made by my hon. Friend in his opening remarks. However, the Finance Ministry was persuaded to reconsider Mr. Smith's case, as personal hardship had been caused by the faulty installation. The matter was therefore referred to the Federal Ministry of Finance in Berlin, which finally refused the claim on 7 May 2003. I know that the refusal of the claim was a disappointment to Mr. Smith, his family and my hon. Friend.
While handling these issues, advice was taken from German lawyers employed by Army Legal Assistance and our Treasury Solicitor's staff, and the German authorities consulted their own staff. I have reviewed these issues, and am sure not only that Mr. Smith's interests have been fully considered, but that the legal position has been examined extensively.

§ Mr. Stinchcombe
I am grateful for my hon. Friend's considered reply. He says that the legal position has been fully considered. I asked a question of law on which 404WH I invited the Ministry to take independent legal advice: does the Ministry have the discretion to help my constituents, even it is not legally obliged to do so?

§ Mr. Caplin
I am coming to that. I know that my hon. Friends a much better lawyer than I am; I am not one, for a start.
I want to answer the question that my hon. Friend has raised in his intervention and earlier as directly as I can. It is within the Ministry of Defence's capability to consider an ex gratia payment to compensate Mr. Smith. We have never claimed otherwise. Indeed, we have considered the possibility of doing so carefully on a number of occasions. We have also taken legal advice and have debated the issues over a three-year period.
The Ministry of Defence has pursued every legal option that it has been able to identify to help the Smith family. It has even consulted the family's insurers to make certain that we have not taken any action that could disadvantage the family. The company's advice was clear: it is obliged to ensure that no profit is made as a result of the accident. Mr. Smith had effectively declared the value of his possessions, which resulted in a payment by the company of £18,000 in full settlement. Therefore, if he were now to receive any form of compensation from the Ministry, the company would be obliged to recover part or all of the original settlement. The House might agree that that would be a pointless exercise and would merely cause the family more distress.
I also refute my hon. Friend's assertion about commercial companies underwriting their employees' risks. I accept that some people might be employed under such terms, but Mr. Smith was not. He knew that, but he sill decided to take the risk, contrary to his employer's advice. To make an ex gratia payment in this case would fly in the face of that obligation and undermine the basis on which all service pay and entitlements are based.
The Government repeatedly reassure the House of their commitment to the welfare of their employees and especially of those who serve in our armed forces and are asked to lay down their lives for our country. I give that assurance again today without reservation. It is at the centre all our policies throughout the Ministry of Defence, but it is also part of that commitment that we should treat each and every employee fairly and, I stress, equally.

§ Sir Nicholas Winterton (in the Chair)
We thank the Minister for his reply.