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Forces Widows' Pensions (Equality of Treatment) Bill

I hope that the right hon. Gentleman will wait with anticipation for my figures. What we cannot do, both with this group of widows and with others, is treat people in isolation, because there will be consequences, and not just for other Departments. All I am trying to demonstrate is that there is a group of pensioners, some of whom served their country with great distinction, who, through no fault of their own, have no pension entitlement, even though they have served for a number of years. I agree with him that it is difficult to explain all this. The gentleman whom I met last week at the Bassetlaw event had served for 12 years, and some of his service had been in Korea. He had been in some dangerous situations, and he is clearly somebody who we should thank for his contribution to the security of this country. Again, I am trying to demonstrate that if the Bill were to go through today as it stands, other groups would have strong cases to say that we should deal with them, too. I am trying to demonstrate that all changes have unintended consequences and things can be hard for the individuals in question. Other changes that were introduced, with some exceptions in respect of short service, and air crew and others, meant that widows of men with preserved benefits entitlements would automatically qualify for a widow's pension, provided only that the marriage took place before discharge. Where their husband's death occurred before the age of 60 the terminal grant is payable to the entitled widow. Again, it is difficult to explain to some widows why those changes affected them. The appropriate benefits are increased across all measures from the date of discharge. Some changes came in on 6 April 1978, with effect from the introduction of the state scheme, which provided the widow's pension based on the husband's working entitlement. The date of marriage provision as it applied to service awards needed amendment. Where marriage or remarriage is after discharge or retirement, a pension may be awarded, but only relating to the pension or retirement pay earned after 6 April 1979. A number of other benefits were paid under the scheme. Another scheme that changed and had consequences in different ways was the children's pension. Such pensions were payable to widows or whoever had care of an eligible child. The benefits were provided at a flat rate until 1958; they were at a third of the rate payable to widows in respect of each eligible child, with no limit on the number of children who might benefit from that award. From 1 April 1973, the amount payable for each child was equal to a quarter of the father's retirement pay or invalid pension, subject to a restriction in respect of a maximum of children. That again demonstrates that changes were introduced that would affect people, either in the future or retrospectively. The attributable rates were flat rates by rank; these were subject to there being a maximum of four children. Benefits for motherless children—a horrible term—were at a higher rate of two thirds of the widows benefit from 1958, and a third of the father's pension from 1 April 1973. Death gratuities, payable to the eligible widow at a flat rate, were introduced in 1950. These were increased to 90 per cent. of the husband's terminal grant from 1958 and to 100 per cent. from April 1970, but no retrospection applied to that increase. The alternative, if financially beneficial, from 1 April 1973 was twice the top rate of retired pay for husbands, and those payments were tax free at the time. All service pensions are taxed as earned income. The war award pension paid by the old DHSS was 50 per cent. tax free from 1 April 1976, and tax free from 1 April 1979. The right hon. Gentleman referred to some of the recent enhancements, which continue the trend of successive Governments trying to improve the lot of our servicemen and women and of widows. He gave the example of the changes in 2000. Since then, benefits for widows and widowers where death was attributable to service have been continued on remarriage. Since March 2003, pensions and compensation have been made available to eligible unmarried partners for service deaths relating to conflict. I was pleased to be involved in the Bill that brought that in. It was clearly an anomaly that individuals who were not married did not receive a pension. I recall the case of a major who was killed and whose partner was not automatically entitled to a pension, so an exception had to be made. In September 2000, the concession was extended to deaths attributable to service, and since April 2005 death in service lump sums have risen to three or four times pensionable salary, depending on the individual scheme. The introduction of the new pension compensation scheme in April 2005 was a considerable achievement at the time, when other schemes in other areas were under pressure to move away from defined benefits. That debate is still going on, and I know that Conservative Front Benchers are keen to advocate examining whether cuts or changes need to be made to public sector schemes. The benefits provided under the 2005 scheme compare favourably with public sector schemes and those in the private sector. That reflected modern practice and the increase in family benefits. However, the new benefits, like all the other changes that I have outlined, were not retrospective, continuing the position taken by this Government and others on changes to improve the lot of our armed forces. May I turn to some of the more recent improvements for war widows? A number of improvements have been made to pensions provision for war widows in recent years, including, as I have already mentioned, the April 2000 changes that introduced the payment of a pension for life for those pre-1973 widows who were in receipt of a pension at the time. The change was not made retrospectively, as with other changes that had been brought in. Additionally, the war widows' special allowance, which is now known as a supplementary pension, was introduced in April 1990 and is payable to widows who receive a war widows' pension in respect of the death of a serviceman who died or left the services before 31 March 1973. Again, being the inquisitive soul that I am, I asked why we came up with such a precise date. The person in the MOD who came up with it, however, is obviously in civil service heaven or its equivalent. A war widows' pension is paid only when death is due to service. It is not normally a survivor's benefit. The purpose of the measure was to bring the overall pension provision for war widows more into line with the provision for those widows whose late spouses' death were due to service on that infamous date of 31 March 1973 and who were receiving an attributable pension under the armed forces pension scheme. For instance, prior to the allowance, world war two widows whose husbands' deaths were due to service received only a war widows' pension while a Falklands widow received both the pension and an attributable pension under the armed forces pension scheme of 1975. As at December 2008, more than 90 per cent. of all war widows were in receipt of the supplementary pension. May I turn to the changes that have been made that apply to current members of the armed forces? There are two main pension schemes for current members of the armed forces. One is the armed forces pension scheme of 1975, known to the Department, which loves its acronyms, as AFPS 75—anyone who deals with the MOD knows that people need a dictionary of acronyms when they become a Minister. I am still trying. I was speaking to Lord Robertson the other day, who said that he failed in his time to get the Department to stop talking in acronyms. The armed forces pension scheme of 1975 was closed to new entrants on 6 April 2005. The armed forces pension scheme 2005 was then introduced on 6 April 2005. It is important, seeing as I am an anorak about dates, to remember that whenever a pension scheme or benefit is changed, there has to be a date. People will always fall on one side of that line or on the other. The reserve forces pension scheme—the RFPS, as it is known in the MOD—was also introduced on 6 April 2005. I was pleased to be on the Committee on the Bill that introduced that measure, and we also changed the compensation that we paid to injured service personnel. The Government also provide compensation for individuals who are injured or disabled as a result of service. The current scheme for injuries received due to service on or after 6 April 2005 is the armed forces compensation scheme, or AFCS for those in the MOD. The war pensions scheme, the WPS, provides no-fault compensation to any former member of the UK armed forces who was injured or disabled as a result of service before 6 April 2005. I am pleased that the armed forces compensation scheme provides a tax-free sum for pain and suffering according to tariffs for injury, ranging over 15 sums from £1,155 to £570,000. Hon. Members may say that that is not pension, but it demonstrates that we, like other Governments, have made a change in how we compensate members of the armed forces. Again, that compensation scheme is not retrospective. The right hon. Member for East Hampshire and I have received representations from many individuals who were injured before the scheme was introduced. People might ask why their case cannot be considered under the scheme. That comes back to the point that whenever one makes a change, there will be a cut-off date. That is seen as unfair for the individual who is not eligible. It is a hard issue for any politician. I know that both he and I would like to do the maximum possible for our servicemen and women, who have fought on behalf of this country. It is not easy to explain about the arbitrary date that is introduced. I have mentioned the legacy issue concerning preserved pensions. As I have said, my hon. Friend the Member for Morley and Rothwell tabled early-day motion 46, which has secured quite a lot of support. It, too, is about the retrospection of a scheme. It is important that we do not build false hopes. We should not say that a scheme will be changed when it is clear that the change will not be introduced if it is not affordable for this or any future Government. I met Major-General Moore-Bick of the Forces Pension Society and my hon. Friend the Member for Hastings and Rye (Michael Jabez Foster) on 10 December last year to discuss the issue raised by the Bill and the remarriage issue—that is, whether we should change the provision that, when people remarry or cohabit, they can keep their pension. It was interesting that the one thing that they emphasised—I have sympathy with the individuals concerned—was that they did not feel that the scheme could be retrospective. I am a cynic at times, as many in the Department know. I wonder whether we sometimes try to look for solutions that are more difficult than the problems that are presented to us. If we were to make a change to allow people who remarried or cohabited to retain their widow's pension from today, would not a large group of individuals who had lost that pension in the past come forward and ask why today's date was chosen? That shows the difficulty with the arbitrary dates chosen. I will talk again to Major-General Moore-Bick, because he is a great champion of widows and armed forces pensioners in general. The right hon. Member for East Hampshire raised the issue of the one-third and one-half rates, which I have already touched on a little. Until 1973, widows of retired servicemen were entitled to a pension equal to a third of the pension of their late husband. As a result of the major changes made under the Social Security Act 1973, which improved not just armed forces pensions but other public sector pensions, and pensions more generally, the rate increased to one half from April 1973, but only for the widows of those in service from that date. As I have said, service personnel were given an opportunity to make a direct contribution and to buy in former service at the half rate. It is predicted that it would cost up to £30 million a year to change all pre-1973 armed forces widows' pensions to the half rate. The implications of such a change across Government would be considerable, because other public service schemes would look into the change. I sympathise with the right hon. Gentleman. I find it frustrating that what we do in one Department has an impact on another. We might wish to introduce changes independently for our special group of service men and women, but those who advise me and others must consider the implications across Government.