House of Commons Hansard Debates for 9 Dec 1991

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That is why we are obliged to take the House's time to seek approval for the final continuation order. I commend the order to the House to afford continued statutory protection to the very small number of teachers taking up new contracts of employment during any hiatus between the current date of expiry of the 1987 Act and the coming into force of the first pay and conditions order under the 1991 Act. The 1987 Act will finally be repealed alongside the making of the first pay and conditions order under the 1991 Act. The continuation order has no bearing on arrangements for next year's pay settlement. The new schoolteachers review body is hard at work. It has received evidence from the teachers' associations, the employers and the Department of Education and Science, and has listened to the representations of all those bodies. As I have already explained, it will present its first report to my right hon. Friend the Prime Minister around the end of January next year. That report will make recommendations on the pay increase to be given to schoolteachers next year, with particular regard to any modifications which might be introduced to the system of selective payments to increase the flexibility of employers in meeting the needs of recruitment and retention. It will also consider how the pay of schoolteachers might be more closely related to their performance, in line with the principles of the citizens charter.

The review body will recommend precisely as it sees fit. The Government for their part have given a firm commitment to implement the recommendations of the review body unless there are clear and compelling reasons to do otherwise. I am confident that the work of the review body will reinforce teachers' professionalism and raise still further the esteem in which society holds our teachers. In the meantime, this order is required simply to ensure a smooth transition between the old and new statutory arrangements and to ensure that there are no gaps in the statutory provision for the pay and conditions of schoolteachers. As such, I commend it to the House.

10.2 pm

Mr. Derek Fatchett (Leeds, Central) : I thank the Minister for the way in which he introduced the debate and set out the technical reasons for the order. We shall certainly not oppose the order because, as the Minister rightly explained, it deals with a particular provision relating to new teachers and their contracts of employment. While we have had our differences with the Government about the interim advisory committee and the way in which it has worked, it might be worthwhile at this stage, in what might be our final debate on the work of the interim advisory committee, to thank its members for the work that they have done in the past few years. They may not always have turned up with what teachers would have wished, but I am sure that there has been a great acceptance of the way in which they have carried out a very difficult task. We wish those who worked on the interim advisory committee well and we look forward to the next phase in the determination of teachers' pay which is the work of the pay review body under the chairmanship of Sir Graham Day.

As the Minister knows, we had our disagreements on the School Teachers' Pay and Conditions Bill and on the School Teachers' Pay and Conditions (No. 2) Bill last year. To get to the pay review body involved an interesting and

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long gestation period by Ministers. It would not be appropriate to go through the arguments again today, but I suspect that teachers will judge the effectiveness of the pay review body not by our arguments on the Floor of the House or in Committee last year, but merely by the way in which it delivers. We expressed our reservations about the conditions attached to the pay review body--both the preconditions and the ability of the Minister or the Secretary of State to interfere at a later date. We look forward with interest to what the pay review body will report in January. We note that the Government are asking that organisation to bear in mind an increase in line with inflation, and feel that that may well not be sufficient, but we await the outcome with interest.

I agree with the Minister that there is a need for a consultation process. It is almost unique to hear a Minister--particularly, perhaps, the Under- Secretary of State for Education and Science--talk about the need for consultation. It has not been a characteristic of the Department of Education and Science in the past few years-- [Interruption.] The Minister seems not to accept that, but if he talked to teachers about one or two recent arbitrary changes in education provision, he might well hear the view that there could have been more consultation. We welcome the promise of consultation on the report of the pay review body and hope that when that consultation takes place the Government will listen to the views expressed. It is no use having a one-way consultation process : the Government must listen.

We recognise the need for and the purpose of the order, and we shall not oppose it today.

10.7 pm

Mr. George Walden (Buckingham) : I begin by echoing what the hon. Member for Leeds, Central (Mr. Fatchett) said about the interim advisory body. I have always felt a little uncomfortable about the interim stage. The Government cannot say that because, by definition, the Government have to be comfortable with everything, but it has not been a profitable period for teachers in terms of their pay. It seems that it is impossible--or should be impossible--to discuss any aspect of teachers' pay, however technical, without relating it to the quality of teachers' performance and teaching methods. If my hon. Friend the Under-Secretary of State does not object, I should like to pay tribute to the Government's overall strategy. While the Government are rightly pursuing the pay review body, which I believe and certainly hope will result in a substantial rise in teachers' pay, they are simultaneously engaged--not before time--in asking serious questions about some of the methods used in our schools, most recently in primary schools.

I hope that you, Mr. Speaker, will agree that there is a fundamental connection between teachers' pay--and the mechanics of it--the esteem in which teachers are held and the methods that they use. One of the main reasons why teachers have fallen in public esteem is that the public have lost confidence in teaching methods, which, in turn, seem to have lost contact with common sense as perceived by the man on the Clapham omnibus.

In supporting the order--one could scarcely do otherwise--I should like to stress that the way forward does not lie merely in improvements in teachers' pay, necessary though they are. The way forward must also lie

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in a two-track policy by which we continue to promote a public debate on some of the catastrophic failed philosophies of the past. Last week, my right hon. and learned Friend the Secretary of State for Education and Science said that he was not going to tell teachers how to teach in primary schools or pre-empt the outcome of the inquiry that he had just announced. He then proceeded to make some characteristically common-sense comments which might seem to carping critics to pre-empt that inquiry, but who cares about that, provided his comments made good sense, which they did?

I commend the Government's handling of the pay review body and their general approach of marrying this policy, which will lead to higher pay for teachers, with a determined critique of the elements of teachers' performance which need to be discussed and openly and rigorously criticised.

10.9 pm

Mr. Fallon : This has been a brief but interesting debate. I thank those who took part in it, and I echo the gratitude that they expressed to the interim advisory committee as the end of its days draws nigh.

I was a little surprised to hear the hon. Member for Leeds, Central (Mr. Fatchett) looking forward to the review body's recommendations. We should not forget that his party voted against a review body. Even though tonight's debate has been reasonably even-tempered, we shall lose no opportunity when the time comes next year to remind teachers who supported a review body and who opposed it.

The hon. Member for Leeds, Central suggested that we wanted the increase from the review body to be in line with inflation. That is not quite what we suggested, which was that it should have regard to affordability. The hon. Gentleman has read one too many union submissions to that body.

My hon. Friend the Member for Buckingham (Mr. Walden) must be right to say that pay should increasingly be linked to performance. That idea is in the Secretary of State's remit letter to the review body. I look forward to that beginning to apply to the teaching profession. It is long overdue and it will be warmly welcomed by senior and successful classroom teachers, who can look forward to seeing the additional efforts and successes that they have achieved in the classroom being properly rewarded in their pay structure. In general, we look forward to the recommendations of the review body--

Mr. Peter Thurnham (Bolton, North-East) : Does my hon. Friend agree that it would be wrong for a local education authority to pay teachers and others to go around and interfere when a ballot has taken place for a school to opt for grant-maintained status? The headmaster of a school in my constituency, Alan Bentley, says that people claiming to represent the LEA are calling on parents and trying to persuade them against voting to give their school grant-maintained status. Is that not wholly wrong?

Mr. Fallon : That is an extraordinary allegation and it sounds a disgraceful state of affairs. If my hon. Friend will send me the details, I will have the matter investigated.

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We are confident that the review body will do much to enhance the status and professionalism of the teaching profession. I commend the order to the House.

Question put and agreed to.

Resolved.

That the draft Teachers' Pay and Conditions Act 1987 (Continuation) Order 1991, which was laid before this House on 20th November, be approved.

STATUTORY INSTRUMENTS, &c.

Mr. Speaker : With the leave of the House, I shall put together the next seven motions on the Order Paper.

Motion made, and Question put forthwith pursuant to Standing Order No. 101 (Standing Committees on Statutory Instruments, &c.).

Double Taxation

That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (Isle of Man) Order 1991 be made in the form of the draft laid before this House on 4th November.

That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (Morocco) Order 1991 be made in the form of the draft laid before this House on 4th November.

That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (Papua New Guinea) Order 1991 be made in the form of the draft laid before this House on 4th November.

That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (Czechoslovkia) Order 1991 be made in the form of the draft laid before this House on 4th November.

That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (Iceland) Order 1991 be made in the form of the draft laid before this House on 12th November.

That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (Finland) Order 1991 be made in the form of the draft laid before this House on 12th November.

That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (Denmark) Order 1991 be made in the form of the draft laid before this House on 12th November.-- [Mr. Neil Hamilton.]

Question agreed to.

Motion made, and Question put forthwith pursuant to Standing Order No. 101 (Standing Committees on Statutory Instruments, &c.).

VAT (Buildings and Land)

That the Value Added Tax (Buildings and Land) Order 1991 (S.I., 1991, No. 2569), dated 13th November 1991, a copy of which was laid before this House on 14th November, be approved.-- [Mr. Neil Hamilton.]

Question agreed to.

Motion made, and Question put forthwith pursuant to Standing Order No. 101 (Standing Committees on Statutory Instruments, &c.).

Customs Duties

That the Customs Duties (ECSC) (Amendment No. 6) Order 1991 (S.I., 1991, No. 2583), dated 15th November 1991, a copy of which was laid before this House on 18th November, be approved.-- [Mr. Neil Hamilton.]

Question agreed to.

Motion made, and Question put forthwith pursuant to Standing Order No. 101 (Standing Committees on Statutory Instruments, &c.).

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Criminal Law

That the draft Criminal Justice Act 1988 (Designated Countries and Territories) Order 1991, which was laid before this House on 25th November, be approved.-- [Mr. Neil Hamilton.]

Question agreed to.

EUROPEAN COMMUNITY DOCUMENTS

Motion made, and Question put forthwith pursuant to Standing Order No. 102 (European Standing Committees) .

Indirect taxation

That this House takes note of European Community Documents Nos. 6762/89 and the Supplementary Explanatory Memorandum submitted by H. M. Customs and Excise on 15th July 1991, relating to completion of the Internal Market and approximation of indirect taxes, 6641/90 and the Supplementary Explanatory Memoranda submitted by H. M. Customs and Excise on 12th November 1990, 17th May 1991, 15th October 1991 and 25th November 1991, relating to the common system of Value Added Tax, 6642/90 and the Supplementary Explanatory Memorandum submitted by H. M. Customs and Excise on 12th November 1991, relating to administrative co-operation in the field of indirect taxation, and 9670/90 and the Supplementary Explanatory Memorandum submitted by H. M. Customs and Excise on 12th November 1991, relating to the general arrangements for the holding, movement and control of products subject to excise duty ; and congratulates the Government on negotiating an agreement on indirect tax rates, which in particular safeguards the Government's right to continue its existing zero rates for VAT and an agreement on the VAT technical system which provides for the effective operation of the intra-Community VAT system after 1992, and includes provision for the continuation of intra-Community tax-free shopping for a transitional period, together with an agreement on enhanced administrative co-operation arrangements which will help to combat fraud ; supports the proposals on the movement and control of excise goods, which in particular include provision for the continuation of intra-Community duty-free shopping for a transitional period, and for minimum indicative limits to distinguish between commercial and private cross-border transactions in alcohol and tobacco ; and welcomes the significant progress which these agreements and proposals represent toward the abolition of fiscal frontiers and the creation of the single market.-- [Mr. Neil Hamilton.]

Question agreed to .

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Ex-Service Men

Motion made, and Question proposed, That this House do now adjourn.-- [Mr. Neil Hamilton.]

10.14 pm

Mr. Peter Viggers (Gosport) : I am delighted to have the opportunity briefly to raise the subject of Government policies affecting ex-service men. It is particularly apposite that I should do so, because I believe that my constituency of Gosport contains more service men and probably more retired service personnel than any other, and a very fine contribution to the constituency they make too, although, of course, the subject is one of general application throughout the United Kingdom.

The Royal British Legion, which deals with more cases of ex-service men's welfare than any other organisation, draws on its experience to say that it would be extremely helpful if, in dealing with issues, it could deal with one Government Department. The Royal British Legion finds that, as it deals with 15 or 16 Government Departments, there can be problems of complication in dealing with different Departments, there can be duplication of information provided to the Ministry of Defence, the Department of Social Security, the Department of Health and the Department of the Environment, and there can be delays arising from that duplication.

In the case, for instance, of an invalided service man, there can be a special problem with the individual's health, there can be a problem with his housing if he is living in service accommodation, there can be a problem with the Department of Employment if he is seeking a job, and there can be a problem with the Department of Social Security.

The suggestion of the Royal British Legion is that there should be a Department for ex-service men's and ex-service women's affairs--a Department which would be comparable with departments of veterans' affairs in other countries. In other countries, such departments are found to be extremely helpful. For example, in the United States, Canada and Australia, the structure operates to provide one department in which one Minister can answer for all matters relating to all veterans' and ex-service men's affairs and can co-ordinate the work that is required in dealing with their special problems. Why do we need a special Department? Why should ex- service personnel be treated differently from any other group of people? There are 18 million service men and women and their dependants, and their experience and service exposes them to special strains and pressures. Much is demanded of service personnel, as we all know. Service life provides its own framework, which is of great assistance to individuals when they are in their service occupation, but some people find that, on withdrawing from service life, the loss of that framework provides them with special problems. Most, of course, adapt very well. They are capable, adaptable people and in most cases there are no problems. However, I know from my constituency experience that when there are problems, they tend to be multiple ones. There would be great benefit in having one Department.

It is not a new suggestion, nor is it a party political suggestion, that there should be a Department for ex-service men's affairs. The hon. Member for Knowsley, North (Mr. Howarth), with all-party support, presented a ten- minute Bill on 26 February 1991. My hon. Friend the

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Member for Rugby and Kenilworth (Mr. Pawsey), in a written question to the Prime Minister which was answered on 13 June, again asked whether there could be a separate Department for ex- service men's affairs. The Prime Minister answered that he did not consider that such a Department would be appropriate. I respect the fact that the request was rejected on that occasion, but I hope that the idea will be borne in mind by Ministers.

If Ministers consider the matter further, it is suggested this view would be shared by the Royal British Legion and by the Officers Pension Society-- that it is the self-evident responsibility of the Ministry of Defence to defend this country and that it is the responsibility of the Department of Social Security to deal with pensions and social affairs generally. The general view, therefore, would be that it would be better to include a separate Department and a separate Minister within the Department of Social Security if that idea should find attraction.

In dealing with service pensions, it would be wrong and churlish of me not to pay respect to what the Government have already done in respect of service pensions. The Government's pay and pensions record is quite outstanding. One of the very first actions of the Government when they were elected in 1979 was to rectify the problem which had been created by the previous Labour Government, who held back service pay as part of their pay restraint policy, in an attempt to contol inflation.

One of our first acts in government was to increase service pay by a massive 32.1 per cent. That in itself was of great assistance in rectifying the problems of service pensions, because pensions are calibrated against pay. As a Government, we have consistently held service pay and pensions at a reasonable level for those currently serving and now retiring.

On a separate issue, I am proud to have been personally associated with a five-year campaign to win pensions for the first time for a completely different group of women, the pre-1950 widows who, until 1979, had no service pension at all. That anomaly has also been rectified by the Government. I am proud that more than 20,000 pre-1950 widows are or have been enjoying service pensions because of the Government's actions in introducing such pensions in November 1979.

It was also this Government who recognised the special problems of the war widows whose husbands had served before 1973. My right hon. Friend the Secretary of State for Defence introduced a new extra ex-gratia war widow's pension of a further £40 per week, making that payment tax-free so that it would not count against income-related benefits. The Government's record is therefore a proud one. Nevertheless, there are anomalies, and the Officers' Pensions Society has been assiduous, as always, in pointing them out to the Government. I could recite a long catalogue of them, but the first major one relates to the disparities in retired pay, which depends on the level of remuneration of the individual officer or man at the date of his retirement. There are serious pension troughs. Those who retired under the 1956 code of pensions, for instance, are worse off than those who retired under the 1950 or 1945 pension codes. Similarly, those who retired in 1976 or 1977 are in a serious pension trough. The amounts can be substantial.

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I should like my hon. Friend the Minister to give serious consideration at the earliest opportunity to introducing a floor--a minimum level of pension--for each rank. It is wrong that an individual of one rank can be paid a lower pension than an individual in a lower rank simply because the individual in the higher rank happened to retire in the wrong month or year and is thereby disadvantaged.

My second major point relates to a subject that I have been pursuing for many years. I raise it this evening because I fear that there is a grave risk that the Government are going seriously wrong on one point which, although it affects only a tiny number of people, is extremely important. The war pensions scrutiny report was due to be discussed by the Central Advisory Committee on War Pensions on 5 December. It is interesting that that report is being considered by a committee which is chaired by our noble Friend, Lord Henley, who is a Minister at the Department of Social Security, not the Ministry of Defence. That is a good example of the problem of the multiplicity of Departments to which I drew attention earlier.

The war pensions scrutiny report highlights the surprising point that whereas the Ministry of Defence is responsible for defence pensions, the Department of Social Security is responsible for war widows' pensions. At the moment, an officer's war widow has the right to have her pension restored if she remarries and is then bereaved a second time. However, the opposite is true for a widow of an other rank. If that widow remarries, she receives a gratuity but does not have the right to have her pension restored. This is a serious issue : I know from my constituency experience that as, fortunately, people are living longer, it is becoming increasingly likely that elderly ladies will wish to remarry, but they are faced with an agonising choice, knowing that, if they remarry, they will forfeit the service pension. That is an extremely serious point.

It worries me that the scrutiny committee may be moving towards taking the view that the pension arrangements that apply to other ranks should apply in the case of officers' widows as well. That would be wrong. To deprive war widows of the right to have their pensions restored at the time of second bereavement would be socially wrong. All widows in receipt of pensions should be in a position where it is advantageous and attractive for them to remarry, recognising that they will forfeit their pension during the period of remarriage, but that they have an automatic right to have the pension restored should they be bereaved a second time. That will encourage second marriages, which is socially desirable. It is proper and fair for us to encourage remarriage in that way.

I could mention a catalogue of other anomalies in the treatment of service pensioners and their widows, but I hope that I have given enough examples to persuade my right hon. Friend the Minister that problems exist which could be diminished by creating a single Department to deal with the affairs of ex-service men and women. 10.25 pm

The Minister of State for the Armed Forces (Mr. Archie Hamilton) : I congratulate my hon. Friend the Member for Gosport (Mr. Viggers) on securing this debate. I am sure that the issues that he has raised are of interest to many

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hon. Members. I am aware that, for several years, he has taken a particular interest in the provision made for service personnel and their dependants after retirement.

My hon. Friend suggested that a separate Department of ex-service men's affairs should be established within Government. I understand that such departments exist in several countries. However, there is a tendency for the interest to centre on medical programmes for veterans. Such programmes are unnecessary in the United Kingdom, because ex-service personnel, like other citizens, have access to the national health service. In the particular case of those who have disabilities which are attributed to their service in the armed forces, or of the dependants of those who die as a result of their service, special provision is made in the Department of Social Security through the war pensions scheme. Associated with that scheme is the war pensions welfare service, which is available to assist war pensioners and their families.

As my hon. Friend said, in the United Kingdom several Government Departments are involved in matters which have an impact on ex-service personnel Major social and welfare provision for them is rightly integrated with that for the population as a whole, as is the case with the national health service.

My hon. Friend referred to service pensions. As the House will be aware, we have in place a pension scheme for the armed forces which is specially designed to recognise and provide for the type of careers that are available to service personnel. For those who are able to serve for a full career, which will normally end at the age of 55, the scheme provides benefits at a level which in most types of employment are not available until the age of 60 and possibly 65. The armed forces scheme provides for those who retire at 55 a pension at approximately half the rate of the military salary that they received at the date of retirement and a lump sum of three times the rate of pension. However, the career of many service personnel must end much earlier than the age of 55, so the pension scheme must be flexible. For those who have to retire earlier, a pension is awarded for immediate payment after as little as 16 years' service for officers, counting service from the age of 21. For other ranks the minimum requirement is 22 years' service, counted from the age of 18.

Not only are those pensions brought into payment immediately, but, in addition to taking account of the length of reckonable service given, they include a further element to allow for the early termination of the service career. Those pensions are also accompanied by a lump sum of three times the annual rate of pension awarded.

On the relationship between the rate of pay earned on the last day of service and the amount of pension which will be awarded, I confirm that the appropriate annual rates of military salary in force at the date of retirement, not those enforced earlier or later, are used as the basis for calculating pension scales. That is one aspect of what is known as the "code system" under which service pensions are awarded.

Another aspect of the code is that pensions are based on what is known as a "representative" rate of pay for each rank, rather than on the rate received by each member. Thus, although service men of the same rank may receive different rates of pay, perhaps because they need specialist skills, they will be awarded exactly the same rate of pension provided that they retire on the same date and have given the same length of reckonable service.

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The representative rate of pay for each rank is taken from the military salary payable to those who have a combatant role, and I am sure that the House would accept the logic of that.

I recognise that, although the arrangements achieve uniformity of awards within each "code" period, they also have the effect that those who retire on either side of the date on which pay increases come into effect will receive different awards of pension. Those differences may be appreciable if the pay award is large. That is not an ideal situation, but it is only one aspect of a pension system, which is recognised as having many advantageous features for service men.

The impact of increased living costs on those who rely on a service pension as their primary source of income in retirement is not overlooked. Service pensions are protected against inflation by index linking. In common with other public service schemes, that takes the form of annual increases, which reflect in full previous movement in the retail prices index.

While the purchasing power of pensions is maintained in that way, the increases awarded are likely to differ from those which occur in the rates of pay over a corresponding period. The difference can be in either direction. Under conditions of high price inflation, pensions in payment may move ahead at a faster rate than is the case for levels of pay. At other times, pay rates may increase at a faster rate than the level of price inflation then being experienced. The two different mechanisms--the award of pensions according to the current rates of pay and the subsequent protection of those pensions against inflation by index-linking--do not achieve a perfect balance. Each is generally accepted as appropriate to its purpose, but, when viewed over an extended period, variations in the pensions received by individuals who retire at different times are likely to occur. Only one other factor can have that effect. Pension schemes are not static, and the armed forces pension scheme is no exception. Particularly in the period since the end of world war two, there has been an increasing emphasis in this country on financial provision for retirement. That has been reflected in the increasing development of occupational pension schemes. Consequently, the nature and structure of the scheme for members of the armed forces has been subject to review and significant improvement on a number of occasions. Improvements have also been introduced at other times, as the scheme keeps pace with general developments, especially those adopted by other public service schemes, in line with the main thrust of Government policy on provision for retirement.

In making such improvements, a particular and important principle has to be taken into account--that of non-retrospection. Improvements are available to those who are serving at the time that a change is implemented and who retire subsequently. Eligibility is not extended to include those who had already retired. The reason for that is well understood. Any improvement increases the future costs of the scheme, but those will normally arise progressively, as people who are eligible for the improved terms retire, or otherwise qualify over an extended period. If all existing pensioners were also made eligible, there would be an immediate and, by comparison, disproportionate escalation in cost. In those circumstances, worthwhile improvements would be difficult to achieve.

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I have gone into these matters at some length because it is important to make three points. There are a variety of reasons why the pensions of individuals who have similar rank and length of service, but who retire at different times, may differ. The general considerations and principles which give rise to that for retired members of the armed forces are potentially applicable to the generality of occupational schemes, both within the public service and outside.

Action which was specifically designed to modify existing pensions in payment, so as to diminish differences which may exist today, would be contrary to long-established principles and practices. My hon. Friend mentioned minimum rates of pension. I note the suggestion that minimum rates of pension should be established and that all service personnel whose pension is below such a minimum should have it increased accordingly. To decide what those minima should be would, in itself, be an arbitrary exercise. More important, it would be contrary to normal principles to proceed in that way. All existing pensions were correctly calculated in accordance with the provisions in force at the time of retirement. They have subsequently been increased through index linking. I acknowledge the attraction for those at the lower end of any comparison to levelling-up process, but I cannot agree that we should undertake it. The implications are widespread and extremely costly.

My hon. Friend mentioned the case of war widows who marry again and subsequently lose their pensions on being widowed for a second time. He pointed out that other ranks are treated differently from officers' widows. As he said, the whole question is being considered by my noble Friend the Under-Secretary of State for Social Security, who is well aware of the problem and is addressing it. It is basically the responsibility of the Department of Social Security, and it would not be appropriate for me to comment on how its work is progressing.

I shall now spell out the main provisions of the armed forces pension scheme as it applies to service widows. The widows of service men who retired before 30 March 1973 generally receive a pension which is one third of that received by their husband. Service given from 31 March 1973 onwards generates widow's pension at one half of that received by the husband. On subsequent remarriage, entitlement to a widow's pension ceases, except to the extent that there is an entitlement to a widow's guaranteed minimum pension.

Except for some small variations in the effective date of the change from one third to one half rate, these provisions correspond with those of other public service schemes. As with other improvements, the increased proportion of a husband's pension payable to his widow was not extended to include those who had already retired.

The point has been made that the relatively lower rates of pension received by those men who retired at various times in the past also result in lower pensions for their widows. I acknowledge that that is so and that there is a direct proportional relationship between the two. However, I cannot accept that that is in some way wrong.

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In each case, the pensions that result are a reflection of the entitlements of the scheme at the time when the service was given. Of course, they have the significant benefit of being fully index-linked. I recognise that it would be attractive for those concerned if their pensions could be made greater, but, as I said earlier, it is a basic principle in the management of occupational pension schemes that improvements are not made retrospectively. Without it, we would not have been able to achieve the benefits that are available nowadays.

Mention has been made of the position of widows who lose their pension on remarriage and who are unfortunately widowed again. The position under the armed forces scheme is that an entitlement to a widow's pension ceases, or is restricted to the guaranteed minimum pension, in the event of remarriage. That applies also in other public service schemes, although I am aware that it is not always the case in the private sector. In public service schemes, however, the view is taken that the effect of remarriage is to terminate the condition of widowhood.

I am aware of the concern that, under these arrangements, the former widow may find herself in difficult financial circumstances if she is widowed for a second time. I believe that it is widely known that my Department has discretionary powers to restore the original service widow's pension to payment, if circumstances are felt to be appropriate. Indeed, it has been made clear that restoration will normally be agreed if a widow is worse off on second widowhood than when she was receiving her widow's pension.

It has been suggested that restoration should be automatic, thus enabling widows to remarry with absolute confidence that, whatever may happen, they will have a service pension to fall back on if they are again left on their own. My hon. Friend referred to such circumstances. However, to operate in such a way would be to make assumptions about future events. The result of remarriage may enhance a former widow's pension as her second husband may provide for her in the event of his death. Other events may also affect her financial circumstances. There are factors that could be sensibly allowed for if and when the need for a decision on restoration arises. Under our current arrangements, I accept that there is no guarantee that a widow's pension will be restored once entitlement has ceased. However, there can be a reasonable degree of assurance that it will be restored if there is a need. There is no real prospect that a widow will be left worse off than she had been originally. I believe that that is fair to both sides.

We are talking about public money. It would be wrong to restore a war widow's pension if she was widowed the second time and her second husband was a man of financial probity who was able to leave her in comfortable circumstances. In that event, restoration would mean that that widow was being paid out of public funds when she did not have an obvious need for that money.

I am grateful to my hon. Friend for raising the matter and for the opportunity to explain my Ministry's position on it.

Question put and agreed to.

Adjourned accordingly at nineteen minutes to Eleven o'clock.

Written Answers Section

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