HC Deb 29 January 2002 vol 379 cc216-7W
Lawrie Quinn

To ask the Secretary of State for Defence if he will give the latest estimate of the total cost of refunding tax to those retired Army personnel or their widows and widowers who are, or were, in receipt of a service invalidity pension. [31696]

Dr. Moonie

In my statement to the House of 23 January 2002,Official Report, columns 891–902, I estimated the total cost of refunding wrongly taxed Army pensioners at around £30 million. The latest Inland Revenue estimate is that, to date, it has refunded in the order of £6.5 million to eligible pensioners or their spouses. We believe that the majority of these pensioners or their spouses have already been identified but we recognise that there may be some beneficiaries eligible to claim where the pensioner is deceased. It is not easy to establish their number or the cost attached to such claims. Nonetheless, I would not expect the total to exceed £30 million, and based on the repayments that have been made to all of the cases that have been identified it is likely to be significantly less. Of those so far identified as having wrongly paid tax, only 14 have not yet had refunds.

Mr. Swayne

To ask the Secretary of State for Defence if he will estimate the cost to the Armed Forces Pension Scheme of increases to future pension payments to bring them to the level which would have applied but for the pay restraint policy in the mid 1970s. [28724]

Mr. Ingram

A number of previous Governments have operated pay restraint policies that have affected the pensions of all public servants retiring at the time. No estimate has been made of the costs of increases to future payments to remedy these effects or that specifically relating to the pay restraint policy in the mid-1970s. Periods of "trough" are not clearly defined and we therefore see major difficulties in costing any remedial measures. Nonetheless, for the information of veterans organisations, we are looking to see whether it would be practicable to give a broad estimate of the costs that might be involved for the major periods at issue. However, it has been the policy of successive Governments that retrospective action to redress such issues would not be appropriate and we do not plan to change this policy.