House of Commons Hansard Debates for 24 Apr 1995

Mr. Lilley: I was not going to do that at all. I was merely going to cite the comment of the Commission on

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Social Justice on the hon. Gentleman's proposal that we should advance the retirement age. It says, "It does not make sense."

Mr. Dewar: That is--[ Laughter ]. The laughter of jackasses. All that I can say is that I have read the report, I am well aware of it and I shall deal with what it says in a minute or two and be delighted to do so. The right hon. Gentleman cited an incomplete sentence, but never mind. Let us move on.

The Labour party has consistently and over a period of time been in favour of a flexible decade of retirement. It seems to us that the emphasis should be on choice. It seems to us sensible that people should be able to take a pension, which will have to be actuarially adjusted in exactly the same way as that after 65, as the Secretary of State is proposing, with some, not necessarily the same, actuarial adjustments. That is important because choice matters. It seems strange that I should have to preach that point to the Conservatives. It matters.

As more and more pensioners are looking forward to their state pension and feeling as if they are looking through the wrong end of a telescope, the state pension is only one and often not the dominating factor in determining when retirement should start. The idea that we should have a retirement age at which everyone is expected to shuffle obligingly off into the shadows and disappear from sight is strangely old-fashioned and seems to be totally inflexible. I have no doubt that a flexible decade makes sense and is sensible.

In that context--I know that the Secretary of State will come at me if I do not mention it--we still have to have a pivotal age. Such an age is a little less central in that context, but always a matter a importance. I have made it clear that we think that there is a case for the age of 63 because it is cost neutral, or rather better than cost neutral, based on figures in both the Government's White Papers on the matter. It would save more than would be possible were the present system to continue. There is also an element of equity in the proposal, which all hon. Members will be able to appreciate. It is therefore a sensible suggestion, but I am honest enough to say that I do not have access to the actuarial resources that are available to the Government and we shall obviously review the matter when we get into office.

The flexible decade of retirement seems to be an extremely reasonable approach to the problem which will command widespread support. I am sure that the Secretary of State will be aware that such a decade is, for example, a policy of Age Concern. I do not know how much that will impress him because he does not like those who look after particular interest groups which are concerned with pensions, although I do. It is the policy of the National Association of Pension Funds although, to be fair, it feels that the matter has to some extent been closed by the Government's decision. It remains the association's preferred option. It is the preferred option of the Confederation of British Industry. So it is not some oddity dreamt up by the Labour party for its own ends. I commend it to the House.

Mr. Churchill: Will the hon. Gentleman give way?

Mr. Dewar: I wish to finish this passage. Of course, several organisations--the Minister is right to draw them

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to my attention because they have to be taken seriously--including the Commission on Social Justice, the Social Security Advisory Committee and the Third Age Enquiry all came out in favour of 65. I recognise that. It is not an easy balance to strike. However, all of them said that if the Government insisted on going with 65, some of the so-called savings that the Minister hoped to achieve should be routed back into the pensions system to help those who were not properly covered. That was the point of the House of Lords amendment, which the Secretary of State, not to my surprise, says that he intends to reverse.

The amendment was moved in the context of the Government's insistence on 65. It said, "Let us do something by providing a right to drop the five weakest years of one's working career to help women in particular and low- paid men." I accept that there is an argument about the measure. The Minister says that it is poorly targeted. Perhaps something can be done that is better targeted, but the principle is important and we support it.

I recognise that many hon. Members want to speak, but may I say a word or two about pensions and divorce. It is important.

Mr. Churchill: Will the hon. Gentleman give way?

Mr. Dewar: No. I must go on. I have been generous in giving way. I will abuse the House if I run on for more than another two or three minutes.

The Government have made a volte-face on pensions. I make no complaint about that. I like volte-faces by Government. The Under-Secretary of State for Social Security, the hon. Member for Wanstead and Woodford, will remember that on 20 February, when he was answering questions in the House at about 3 o'clock in the afternoon, he explained that it was impossible to do anything. He said that he could not possibly tackle the problem until major research had been carried out, the results of which would not be available until the end of the year.

At the same time, Lord Mackay of Ardbrecknish was in full and confused retreat in the House of Lords. I make no complaint. As I have not yet congratulated Lord Mackay on his appearance as a Minister of State at the Department of Social Security, I do so now. It gives me great pleasure. He was a very competent Minister at the Scottish Office and a great friend of mine when he was chairman of Glasgow university Liberal club many years ago. The impossible has become possible.

We will pursue the issue of pensions and divorce more fully at a later stage. Earmarking is a difficulty. It is a form of deferred maintenance. A divorce takes place. There is a clean-break settlement between the parties. Any children that there might have been have grown up. Some 15 or 20 years have passed and suddenly the parties have to come together again for the purpose of splitting the pension in payment. That is not an absence that will make the heart grow fonder. I am relieved that at least the Secretary of State has accepted the amendment moved by Baroness Hollis from the Labour Front Bench in the other place to put the duty of paying on the provider so that we do not have sheriffs' officers in Scotland and bailiffs, or whatever is the equivalent, in England pursuing non-payment. Under the amendment, if a couple split, a capital sum will be removed from the original pension fund to start a new pension for the divorcing spouse. That is an

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important safeguard. Let us leave aside the problems of the future career of the spouse, whether he stays in employment, how his fund does and so on. Let us assume that he dies before he can enjoy his pension. Normally, his widow would receive the survivor's benefits. If he has remarried, they will presumably go to the wife of the second marriage. Not only will the divorced spouse not receive provision for her pension at the time of the founding package but she will receive no share in her ex-husband's provision if he dies. I presume that the position is as I have described. Otherwise, we will have a notional widow and a real widow dividing the widow's rights between them. That is a prospect which most of us would not like. I use that as one example. I suspect that many more will be forthcoming when we reach Committee stage and given as reasons for believing that the Government have taken too narrow a view. I agree entirely with my hon. Friend the Member for Leyton (Mr. Cohen), whose private Member's Bill was so relevant to the argument about pensions and divorce. Let us turn one of the qualifications of the Bill to advantage. Everyone has said that it empowers, enables and allows regulations to be made in the future, but that it tells us nothing now. Let us on this subject give the courts an enabling power. Then, if it takes time to work through, provision can be made before the regulations emerge. There is genuine merit in that. I hope that the Government will give it some thought.

There is much to support in the Bill. I apologise for the fact that I have talked about very little of it. It is in the nature of a speech that one talks about areas in which there is disagreement. Measures which we support include the compensation scheme and indexation from 1997--although there are many technical arguments, I approve of it. Protection of accrued rights is enormously important. Of course we are behind it.

There is much to probe in the Bill. I have not even mentioned part-time workers--the European Court cases, the impact of the provisions in the Bill and whether, in preserving a right, they are in fact restricting it. I agree with the hon. Member for Stratford-on-Avon (Mr. Howarth) on independent custodianship, even though I fear that we may not be allowed to have the pleasure of his company on the Committee. He is right about the tragic cases in which a spouse is driven on to income support because the other half--usually the husband, although that will vary later--is in residential care and the entire pension is taken to pay the charges. There are many such areas to which we shall return, but at the end of the day, the one thing that we have in common is that we all want to banish the nightmare that enveloped the Maxwell pensioners. There are answers in the Bill. There is still work to be done.

Where there is a measure of agreement, we will try to improve, consolidate and strengthen, but always support. Where the Government have gone wrong, we will press our case. The end product must be a better framework so that people have security and peace of mind. On other issues, we may have to wait for another approach and another Government.

4.56 pm

Sir Norman Fowler (Sutton Coldfield): I welcome what my right hon. Friend the Secretary of State said

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about war widows; the whole House will do so. It is entirely right that the Government should have devoted resources in that way. It is entirely right that we should devote resources now to present need rather than always to make promises for the future. I welcome the move and I believe that the whole country will do so, too. I do not complain that the hon. Member for Glasgow, Garscadden (Mr. Dewar) was party political. Having spent five or six years being opposed by the hon. Member for Oldham, West (Mr. Meacher), I think that what the hon. Gentleman had to say was relatively mild. However, at the end of 45 minutes, rather like my right hon. Friend the Secretary of State, I am not a great deal clearer about the broad strategy of Labour policy than I was when we started.

The hon. Member for Garscadden made a great deal of the Government's omissions--what they did and what they did not do. The House should be reminded that the reason why we are discussing this long, detailed and important Bill is not the acts of Ministers but the fraudulent actions of Robert Maxwell. That is what lies behind it. The Bill is certainly about the deliberate and dishonest action that he took to defraud Daily Mirror pensioners. It is further about preventing members of other occupational schemes being threatened and defrauded in the same way. That is the evil which the Bill tackles.

I, for one, welcome the provisions on the new occupational pensions authority and the provisions on pension trustees, as I am a pension trustee on the Bardon scheme.

I find the Opposition's attitude to the debate rather curious. I should have thought that the message that the House wanted to send out this afternoon was a united message that people such as Maxwell would not be able to raid pension funds in future. Instead, the amendment contrasts with the end of the speech by the hon. Member for Garscadden, when he grudgingly acknowledged the action that the Government are taking, but moved swiftly on to other ground as if embarrassed by it.

Mr. Miller: Does the right hon. Gentleman include in his list of people who should not raid pension funds those companies engaged in taking over other companies? Does he agree that surplus assets in funds should not be the subject of takeover warfare?

Sir Norman Fowler: I have much sympathy with what the hon. Gentleman is saying and I know that my hon. Friend the Minister will deal with that in his reply.

Mr. Jenkin rose --

Sir Norman Fowler: May I make some progress, otherwise I will end up making a 45-minute speech when I want to speak for only 10 minutes?

In their amendment, the Opposition are arguing that the Bill does not

"fully reflect the importance of pensions as a form of deferred pay".

Frankly, that is an extraordinary argument. The Bill is about ensuring that pay that is deferred is paid out in pensions at the end and that the money is not stolen or misappropriated.

We must also remember the other changes that the Government have made to protect and improve the rights of occupational pensioners. The hon. Member for Garscadden was lecturing the Government, but let me

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remind him of the position that we inherited from the Labour party. The state earnings-related pension scheme was the limit of Labour ambition. The party did nothing to improve the position or the rights of people whose pensions were frozen--people who were forced to leave their pension entitlement frozen in value with a previous employer. The Labour party did nothing to make it possible for members of occupational schemes to transfer their rights. Those changes--that revolution--were carried out by the Government. As a result, people in occupational schemes get a better and a fairer deal today. That was not a measure that was forced on us by eager pension funds or, frankly, by the official Opposition. It was this Government putting the interests of members of occupational schemes first and ensuring, to use the words of the Opposition amendment, that

"the importance of pensions as a form of deferred pay" was recognised.

We also sought to give the public more options on pensions. Occupational pensions had made an enormous contribution and there is no question about that, but in the mid-1980s they had ceased to expand and were stuck in the mud. The attitudes of some funds to the rights of their members were stuck in exactly the same way--there is no doubt about that. That is why the scandalous problem of frozen pensions endured for such a long time. We tried to introduce reforms, to give more people the opportunity to have a pension that was separate from state provision. Every opinion poll showed that that was what people wanted and so the extra option of personal pensions was introduced.

I do not for one moment defend the actions of those insurance companies that mis-sold policies. Ironically, several of the companies that were prominent in their opposition to the introduction of personal pensions were guilty. It is not part of my brief to defend wrong advice given in that way.

We should distinguish, however, between the personal pension product and the methods that some companies used to sell their products. At the end of last year, Andrew Large, the chairman of the Securities and Investments Board, said:

"I want to emphasise from the outset that our concern is not with personal pension products themselves, but with how they were sold. I would add that, because of the action that regulators and the industry have already taken, people can now have greater confidence that personal pension products are being properly sold. They do offer an efficient and flexible way of saving for retirement for many people, provided they are marketed, advised on and sold properly." That is very much my view of the position.

Mrs. Jane Kennedy (Liverpool, Broadgreen): Does the right hon. Gentleman accept that the problem is not necessarily the fact that inappropriate pension products are sold, but that there has been a growth in the number of tied agents? As a result, the agents selling financial packages do not have the full range of products available and are limited to those of one company. When I had the honour to be a member of the Select Committee on Social Security, we heard that the number of independent agents had shrunk to only 20 per cent. of those acting in the field.

Sir Norman Fowler: A major problem exists with the giving of advice and with where people can get

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independent and impartial advice on what they should buy and what is in their best interests. Clearly, in some cases people have been badly advised and I will come to that in a moment.

I welcome the fact that the hon. Member for Garscadden made it clear that the Opposition see a place for personal pensions in the range of pension provision. He also made that clear last March in a debate in the House. That view is a million miles away from the view of the hon. Member for Oldham, West when we started the pensions debate. Then, the Labour party saw no place for personal pensions and opposed them, not on merit, but because they were private provision and the hon. Gentleman did not want them. I therefore welcome the fact that the hon. Member for Garscadden is leading the Labour party on to much wiser ground.

My right hon. Friend the Secretary of State referred to the action being taken to put matters right where companies and advisers have given wrong advice and I obviously welcome that. I must make some additional points, however. First, we must make it clear to the public that personal pensions are a sensible option for many people. The idea that everyone who has taken out a personal pension has been wrongly advised is ludicrous. Some exceptionally good and reputable companies are providing such pensions.

Secondly, we must review and improve the independent advice that is available to the public. Usually, it is wrong for someone to decide to come out of an occupational, funded scheme for a personal pension. If the employer's contribution does not remain the same, which it almost invariably does not, but is reduced, there is little or no chance that the return will be comparable.

Thirdly, we must reconsider employers' contributions. I left the Department of Health and Social Security in 1987 and I tried to re-enter the debate a little later, when I was at the Department of Employment. I suggested that public sector schemes should set an example by making a contribution that was above the minimum to any of their members who wanted to move to a personal pension scheme. The suggestion was resisted fiercely by the public sector schemes--again, it was partly the curse of asking schemes to pay now when the option is to pay tomorrow and later.

The hon. Member for Garscadden proposes that the National Savings scheme should provide such personal pensions--I do not think that I am misquoting him--and I agree. I have always thought that to be a sensible course and a sensible extension of its business. During my review of pensions in the mid -1980s I proposed that, but I regret to say that it was rejected out of hand by the National Savings authorities at the time. Now that Marks and Spencer is entering the personal pensions business, perhaps it is an opportunity for the National Savings scheme to reconsider the position.

Finally, I shall try to follow the important remarks by my right hon. Friend the Secretary of State about where we are in the pensions debate--a debate that is taking place not only in this country, but in every other country in western Europe.

As people live longer, there is no question but that there will be a greater demand for taxpayers' resources, devoted to health, social services and pensions. That is why Governments everywhere are looking at ways of providing options for people to save for their own retirement. That is why the Government, who deserve

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credit, started that process about 12 years ago. That is partly why we are better placed today than most other countries, because we have massive funds that have been built up for occupational and personal pensions.

That review of pensions involves looking at the type of debt that we are leaving for future generations of taxpayers. By creating SERPS, the Labour party did not launch a funded scheme but a

"pay-as-you-go" one. No funds or investments back it up. It relies entirely upon the willingness and ability of future generations of taxpayers to finance the second-tier pensions that are now being promised. That unfunded scheme comes on top of the unfunded basic pension. It is therefore entirely sensible for any Government to consider what can be afforded. If hon Members want any proof of that, they need only look at the report of the Labour party's so-called social justice commission.

Mr. Dewar: So-called?

Sir Norman Fowler: I believe that the commission is a pretentious means of setting out a pretty ordinary set of recommendations, but obviously the hon. Gentleman thinks otherwise. In due course, we will try to probe him about what recommendations he will or will not accept.

I have a specific question for the hon. Member for Garscadden. For years, the Labour party has argued that the basic pension should be uprated by earnings and not by prices. That was the basis of the Opposition's appeal to the nation. As the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), the Liberal spokesman, remembers only too well, the hon. Member for Oldham, West--the Opposition spokesman--always argued that the Labour party would uprate the basic pension according to earnings.

Dame Elaine Kellett-Bowman (Lancaster): Will my right hon. Friend give way?

Sir Norman Fowler: No, unless my hon. Friend wants to speak for the Labour party.

I should like to know from the hon. Member for Garscadden whether the Labour party remains committed to the policy that the basic pension should be uprated by earnings, because that is not the meaning of the proposal by the Commission on Social Justice. I should be happy to give way to the hon. Gentleman on that. I am surprised that he has not sought to intervene.

As my right hon. Friend the Secretary of State said earlier, pensions are a fundamental issue, because there is hardly anything that costs more in present or future spending than pensions. The Labour party has gone to the country in election after election claiming that it would uprate pensions according to earnings. That has always been the great distinction between the Conservative party's policy and that of the Labour party. We have been attacked constantly by the Labour party on that very issue, but now the hon. Member for Garscadden is unable to say whether the promise to uprate the basic pension according to earnings remains a policy of the Labour party. The public will draw their own conclusions. It is clear that the Labour party is scuttling that particular policy--yet one more policy is going down.

Dame Elaine Kellett-Bowman: Will my right hon. Friend give way?

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Sir Norman Fowler: As I failed to get a reply from the Opposition Front-Bench spokesman, I am happy to give way to my hon. Friend.

Dame Elaine Kellett-Bowman: May I remind my right hon. Friend that when the Labour Government first introduced that pension provision, they did so at a time when prices were rising faster than wages? They therefore cheated the pensioners.

Sir Norman Fowler: I agree with the force of my hon. Friend's point. The Labour spokesman, however, remains quiet on the fundamental issue of uprating pensions.

There is one reason why the public sensibly want to rely on something more than just state provision. The hon. Member for Garscadden may talk about the security of the state, but let me remind him that, in recent years, the people who lost out most were state pensioners under the Labour Government when Barbara Castle changed the uprating system midstream. As a result, pensioners lost out by more than £1 billion according to the value of current money. That happened because Barbara Castle changed the entire uprating system with the effect that the Labour Government went from following the historic system of validating past inflation to forecasting inflation when the inflation rate was dropping. That is why it is so important that we should have good private and occupational schemes, which is the purpose of the Bill.

It is the first duty of any Government to ensure that present pension provision is adequate. That is why I strongly welcome what my right hon. Friend said about war widows. We obviously owe them a particular debt. It is right that the Government should devote extra resources to them now, but the issue goes wider than that. It is good news that about 60 per cent. of retired people now have some form of additional provision, but we should recognise that some of that additional provision is modest and that, in any event, some 40 per cent. of retired people have no such additional provision. The problem is that some people now living in retirement have been unable to build up an occupational pension through no fault of their own. There are a variety of reasons for that. For example, their firm may not have had an occupational pension scheme at that time, or they may have been members of a scheme, but, because of the scandalous early leaver rules and frozen pension rules, were prevented from receiving the full value of their pension. They may have been caught by a number of historic employment practices. Whatever the reason, those people now depend absolutely on the basic pension with little or nothing more.

We introduced family credit because we accepted that we were unable to help the families we wanted to help through the general child benefit. It is open to us to help those pensioners we consider most in need by introducing a pension credit system. In other words, we should add to the basic pension of those whose income most urgently needs supplementing.

Mr. Dewar indicated assent .

Sir Norman Fowler: I am glad to note that the hon. Member for Garscadden agrees with me.

Mr. Dewar rose --

Sir Norman Fowler: I have no intention of allowing the hon. Gentleman to intervene when he failed to do so at my earlier request.

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Rather than relying upon general increases in the basic pension, we should direct resources to where they are needed. The basic pension would remain price-protected and would continue as now, but to those who do not have the benefit of other retirement income or have only a limited income, the pension credit would be given as an additional weekly payment. It would operate in the same way as family credit, which the Government introduced and which has been widely welcomed. I welcome the Bill. The Government have taken the action needed to combat the Maxwell scandal and other similar scandals. The Bill builds on the new rights that we have already awarded to occupational pensioners and assures the public of the security for their investment. Most of all, I congratulate the Government on continuing to encourage occupational schemes and personal pensions. I hope that the Government will now consider the position of those living on the basic pension, or close to it, and take further action because I profoundly believe that such action is also necessary.

5.18 pm

Mr. Alfred Morris (Manchester, Wythenshawe): The Bill, as it has emerged from another place, is widely felt to be in need of some very important further amendments. One of them is the amendment so ably moved by my noble Friend Baroness Hollis, which would allow a carer to keep 50 per cent. of his or her occupational pension if the spouse enters long-term residential care. The Secretary of State will know how very important that amendment is to the Alzheimer's Disease Society, of which I have the honour to hold office as vice-president, and to the very deserving people the society exists to help. The amendment, on which doubtless there will be an opportunity soon to vote in this House, has my total support.

I am anxious also to see an early opportunity to revise the decision taken in another place in regard to the exclusion of British pensioners in Commonwealth countries from pension upratings that are paid to all who live in the UK, as well as to expatriates in the European Union, the United States and some 30 other countries. I need hardly emphasise again today how badly that decision was taken in Australia and Canada, among many other Commonwealth countries. The House will not be surprised, however, that I rise mainly to speak in this debate about the widows of men who gave the best years of their lives in the armed forces of this country. In this 50th anniversary year of victory in the second world war, their claim to our attention is one of very high importance. They live with a deep sense of grievance and their unhappiness about the unfairness to which they have been subjected is visible to all of us who meet them. As Major-General Sir Laurence New, who is held in special regard on both sides of the House, said in a letter published by The Sunday Times yesterday, they are widows who feel "forgotten, neglected and wronged." While millions of people will be celebrating the end of the war against Germany on 8 May, for them it will be another day of mourning for men who fought and died that we might live.

Of course, I applaud the indication given by the Leader of the House last Thursday--and confirmed by the Secretary of State today--that the Government will not now attempt to overturn the new clause added to the Bill

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in the House of Lords which automatically restores the Department of Society Security war widows pension on second bereavement or divorce. That improvement to the Bill was secured by the young Lord Freyberg who, although he is a Cross-Bencher, I am delighted to call my noble Friend. He was strongly supported by peers of all parties and of none, and they, too, have my gratitude for achieving one of the four purposes of my early-day motion 186 in support of war and service widows' claims.

I am sure that the Government's most praiseworthy change of heart towards the new clause will be welcomed on both sides of the House, but it would be helpful if it could be made clear, as the debate proceeds, that the concession has no provisos. I say that because I did not hear the word "automatic" in what the Secretary of State said this afternoon; nor does it appear in the DSS press release, which, hot from the press, I have been given by hand.

If the Minister can clarify the position now, I am sure that it will be very warmly appreciated by the War Widows Association of Great Britain, the Officers Pensions Society, the Royal Air Force Widows Association, Help the Aged and the many other organisations that have been campaigning for the change.

"Automatic" is a word the war widows will certainly want to hear, just as they will want to hear that there is to be no question of means-testing.

Mr. Clifford Forsythe (Antrim, South): The right hon. Gentleman is chairman of the managing trustees of the parliamentary contributory pension scheme. Are the changes that he seeks for the war widows in that scheme?

Mr. Morris: Yes, they are; so, the Members of Parliament who are supporting the war and service widows' claims this afternoon are not saying that they want other people to "do as we say" but saying "do as we do".

But welcome as the concession the Minister has announced is, he will be unwise not to realise that he has addressed but one of the rightful claims of our war and service widows. If he stops there, he will be seen as having taken this one step merely to counter mounting criticism of the Government's response to the widows' claims as a whole.

The Minister will know that those claims are not new. The 1989 campaign to make life better for war and service widows was directed at achieving their purpose. This Bill affords us a further opportunity to correct the injustices to which they relate. My early-day motion now has 245 signatories from all parts of the House, and 42 other Members have written to the Officers Pensions Society expressing their unequivocal support, at the same time making it clear that, were it not for the conventions that prevent their signing early-day motions, they would have done so. The spread of support for the motion is comprehensively all-party and includes 72 Conservative signatories.

Mr. Deputy Speaker, war and service widows are presently being discriminated against--I choose my words carefully--in each of the three still outstanding areas of concern dealt with by my early-day motion. Make no mistake, they are asking not for special treatment but for an end to discrimination, for, by comparison with other similar schemes provided by our allies, and by comparison with commercial pension provision in this country, Britain's war and service widows are uniquely disadvantaged.

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As General Sir Peter de la Billie re said in his letter to The Sunday Times yesterday:

"Neither our Allies nor our former enemies treat their widows in such a penny-pinching way."

He went on to

"urge the Prime Minister to look beyond the well-crafted defensive briefs emanating from his Ministers . . . and to see to it that the widows of those servicemen who served our country are able to live out their lives with dignity and some small financial security." I remind the House that, whereas a war widow's husband died attributably and a service widow's husband died naturally, both sets of widows had to watch their husbands go off to war. Some never came back, some came back broken in body or in mind, some came back apparently unharmed but died soon thereafter. All these widows are our "victory widows". They are our inheritance, our legacy of war. Far from discriminating against them, we should be seeking to repay in full the very special debt we owe them. They are mostly over 75 and many of them live on some form of income benefit. So it could hardly be described as expensive or open-ended to provide for them financial assistance that the war and service widows of our allies and former enemies already enjoy as of right.

What are the remaining three problem areas? First, there are the service widows who married their husbands after they had left the services and then, invariably, nursed them to the end of their lives. Because they married after retirement, they get no pension at all, in spite of the fact that their husbands contributed fully towards a pension. The armed forces pension scheme is almost completely isolated in not offering an unabated pension to the widow who married a service man after he retired. That is not the case in any other comparable scheme studied by the Officers Pensions Society. It is true that post-retirement marriage pensions were introduced in the armed forces in 1978, but only service after that date counts towards a pension. That does not help the older service widow who receives nothing. All that is being asked for now is that, where the post- retirement marriage took place before the service man was 65--the end of his recall liability--and provided it lasted for at least three years, there should be a pension for his widow. As ever, the Treasury pleads cost, but we should remember that these service men effectively contributed towards their pensions, initially at 11 per cent. From 1988, their contribution was one of 10 per cent., and from 1991 it was 9 per cent.

The second remaining area of concern affects the younger war widow. Today she loses both her DSS war widows pension and her occupational attributable war widows pension on remarriage. Her DSS war widows pension can never be restored and her occupational attributable pension can be restored only after a second bereavement or divorce if she fails a means test. Yet 83 per cent. of all commercial widows pension schemes of which the National Association of Pension Funds has evidence are paid for life. That applies to almost all the equivalent allied schemes. The Bett independent review, in its report, recommends that all war and service widows pensions should be for life.

While the Treasury again pleads cost, we should remember that these women are the widows of men who paid for their pensions. The right hon. Member for Bridgwater (Mr. King), then the Secretary of State for Defence, said so in the House on 11 December 1989.

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Moreover, the Government pay anyway because 99 out of 100 younger war widows are not remarrying. They thus remain a full charge to Government for both Ministry of Defence and DSS pensions. If our proposals were accepted and if younger, post-1973 war widows were paid for life and therefore encouraged to remarry, the DSS war widows pension would cease so long as the war widow remained married, and there would thereby be a saving to the DSS budget.

Our third and last concern is for the older war widow. Military service before April 1973 earned only a one third rate pension for widows, while service after that date earned a half-rate pension. Those still serving on 1 April 1973 were allowed to buy in their previous service at the half-rate and almost everyone did so. But those who had already retired, even by a day, were not allowed to buy in. The result is severe hardship.

A study by the Officers Pension Society of 14 other countries shows that provision in the United Kingdom is the meanest. It may come as a shock to many hon. Members that Britain is now alone among all the countries with which it can be compared in paying any service widow who is entitled to a pension less than a half-rate pension. In the United States the minimum figure is 55 per cent., in Germany it is 60 per cent., in Australia and Belgium it is up to 67 per cent. and in the Netherlands it is 71 per cent. All we seek now is that widows on the one third rate should be lifted to the half-rate pension. By definition, most of them are at least 75 and in the evening of their lives.

The case of Mrs. Margaret Woods exemplifies the severity of treatment that such women receive. She is the widow of a Fleet Air Arm pilot. He flew throughout the war and took part--flying a Swordfish--in the famous raid on the Tirpitz in Alten fjord. He died at 37 of a massive heart attack while still serving as a pilot in the Fleet Air Arm, but his death was said not to be attributable to service. After tax, his widow's current Ministry of Defence pension is £29.06 a week; hardly enough, it may be thought, for a main course fit to put before a regional gas company chairman.

To show how pushed Mrs. Woods is on her income, I quote a comment she made in a recent television interview. She said:

"a half-rate pension would give me another £800 a year--which would revolutionise my life."

I have briefly stated our still outstanding proposals. Their implementation is long overdue. This is not a matter for party animus, but one of honour for the House and the nation as a whole. 5.34 pm

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