House of Commons Hansard Debates for 24 Apr 1995

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at the end of his life because the Government will take away his savings. One cannot expect people to respond rationally in those circumstances, so many grannies lie about their assets and get help fraudulently.

The proper approach is to consider the need for a care pension, which should be part of the national insurance fund and which would be partially paid for by the savings made from the raising of the retirement age. The rest would be paid for by contributions from workers and employers, but it is immensely important that, if we are trying to encourage people to build up their pensions and to buy assets and houses, they know that they will not lose everything if they tell the truth at that point in their life when they most need help, when they are frail and elderly and need residential care. I believe that the debate that we have had for 15 years about the level at which the retirement age for the state pension should be set will be closed by the Bill. A new chapter will begin and the debate will not be about whether it should be overthrown by a future Government but about how the age itself will have to reflect the increasing health and length of life of the pensioner population. My final point fits in with other themes that have been raised and certainly touches on the contribution of the right hon. Member for Sutton Coldfield (Sir N. Fowler) which was, as always, interesting. He mentioned how the Bill fits into the future pattern of pension provision. Less than two and a half years ago, a colleague, Matthew Owen, and I wrote a pamphlet about what we saw as the future of pension provision. We said that it was to guarantee that everyone should have two forms of pension--a state pension and a private pension, whether it be a company or personal private pension. It is amazing how the debate has moved on in the past two and a half years. Not only are organisations such as the National Association of Pension Funds backing that dual approach--even the Commission on Social Justice almost backed it. It dressed it up with some ideas to the effect that perhaps the state earnings -related pension scheme was an alternative but, if we are honest, we all admit that SERPS is dead in the water and can now play a part only for those currently in it or perhaps, as the right hon. Member for Sutton Coldfield said, as a way of making special additions for the poorest pensioners so that their entitlement dies with them and does not live on for the rest of us to draw.

The only question, therefore, in this part of the jigsaw puzzle is whether the approach should, as Ministers maintain, be exhortation to get people to enter a second pension scheme or compulsion. Should we legislate so that everyone working a certain number of hours a week must be covered by a second pension and so that the compulsion would extend to contributions from employers and employees? In those circumstances, thought would clearly need to be given to the form of pensioner savings.

The right hon. Member for Sutton Coldfield mentioned his plan some years ago to try to get the Post Office to sell private pensions. All good ideas presented to the House have long roots, and I have news for the right hon. Gentleman. Mr. Gladstone tried to introduce such a reform, but the Pru and other organisations realised that they would have great difficulty competing with such a scheme and, needless to say, that reform did not see the light of day--nor did the right hon. Gentleman's.

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I hope that there will be a real divide between the parties. Ministers will hope that everyone is covered and perhaps leave it to the taxpayer at a later stage to pick up the bill. I hope that our position will be one of compulsion so that everyone is in the state and a private scheme. I hope that that will be one of the big issues that we debate in the general election, but I end as I began. The Bill contains many important and worthwhile clauses but no doubt many will be improved by debate. It will close one chapter while opening many others. It is the result of the wicked theft by Maxwell of the Maxwell pension funds. Although the Secretary of State set up the framework whereby those funds were to be regained, the hero of the hour was Sir John Cuckney to whom I, too, extend my thanks.

6.46 pm

Mr. Douglas French (Gloucester): I begin by declaring an interest. I am chairman of the management company of the Pension Trustee Forum; adviser to the consulting actuaries, Alexander Clay and Partners; and chairman of the seminar company, Westminster and City Programmes. All those interests are relevant to the aspect of the debate on which I shall concentrate.

This is a far-reaching, sound and much-needed Bill. I congratulate my right hon. Friend the Secretary of State in particular on the care that he and his Department have taken to consult all interested parties at each stage of the debate. The Bill embraces most of the important recommendations made by the Goode committee, and my right hon. Friend has undertaken a separate consultation exercise on the equalisation of pension ages. In my view, he has responded effectively to the reports of the Select Committee on Social Security.

In that context, I pay tribute to the hon. Member for Birkenhead (Mr. Field) for his work on the subject as a whole but especially for his contribution through the Select Committee. I am bound to say, however, that I do not agree with the view that he apparently shares with the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) that trust law was not necessarily the right basis on which such legislation should have been framed. I believe that it is the right way to proceed.

I am relieved that the legislation was not rushed. In the aftermath of the Maxwell saga, it would have been all too easy to rush through proposals which, inevitably in such circumstances, would have been ill considered. The fact that the Government have taken the time and trouble to prepare the legislation as they have is to be commended. As we have heard, a key aim was to put in place measures to provide additional security for pension fund assets and, as far as possible, to reduce to negligible proportions any risk that those who made contributions in the expectation of enjoying benefits later should have them snatched away by negligent or criminal activity. The Secretary of State spoke about six lines of defence to ensure security of those assets. Underlying what he said was the desire to achieve additional security without undue additional regulation and without avoidable cost. One must always bear in mind the possibility that if the additional burdens put on employers are too great, it is open to them to disengage themselves from pension provision altogether. A fine balance must be struck.

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The White Paper fully acknowledged the important role of trustees, alongside the role of the occupational pensions regulatory authority and the role of professional advisers--the three key figures of the regulatory framework. It is clear that the role of the trustees will be greater than it has been. Trustees will have increased duties and increased responsibilities, and their effectiveness will be crucial to the safety and security of the schemes. The trustees will be legally responsible when something goes wrong. The Bill sets out a range of penalties to which trustees will be liable, ranging from suspension or removal from office to fines or, in the worst cases, imprisonment. A key component is that the occupational pensions regulatory authority will be able to impose some of those penalties. The fines regime in particular presupposes that penalties are likely to be necessary. I consider it rather more important that the need and occasion for the imposition of fines should be reduced to an absolute minimum. In that sense, I associate myself with the views expressed by my hon. Friend the Member for Brighton, Kemptown (Sir A. Bowden) about the need to train trustees thoroughly to enable them to fulfil the responsibilities that they take on. We are talking about lay trustees who act in a voluntary capacity. They will, of course, have professional advisers such as solicitors, accountants and scheme actuaries.

By their very nature, the trustees should be people who try to act in the best interests of the scheme; that is what should be and, no doubt, will be uppermost in their minds. They will bring to the task the appropriate, sound common sense that lay trustees have always tried to bring to bear in the past. It would, however, appear from the Bill that the trustees will not necessarily have had the benefit of any form of training. I fear that that is a mistake and to that extent, I fully endorse the views that my hon. Friend the Member for Kemptown expressed.

There is a parallel with the position of school governors. With the introduction of local management of schools and grant-maintained schools, the task of school governors was made much more complex and the consequences of doing the job less than competently were made much more serious. One result has been a reluctance among people who would otherwise be well qualified to act as school governors. I fear that the same may happen with pension fund trustees.

Mr. Jenkin: We on the Select Committee on Social Security carefully considered what training should be apposite or, indeed, required by law. We took evidence from a wide variety of sources, including from trustees of schemes in which members were already represented. The conclusion that I firmly reached was that the less interference we stipulated by law the better, as the best schemes would naturally wish to train member trustees. I felt that to burden good schemes with too much regulation could be counter-productive.

Mr. French: I am grateful to my hon. Friend for that contribution. I have read the Select Committee report and I was extremely interested in how the Committee arrived at its conclusion; there is no clear explanation. I shall say a little more about that in a moment.

My fear is that some people who would otherwise be willing to be trustees will be less willing and that some able people will, therefore, be lost to that important responsibility. Trustees will, after all, be accountable, as

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they are at the moment, but more so under the Bill, for billions of pounds of funds and for the future well-being of millions of people, but they will not necessarily have had any special training. I am puzzled why that should have happened because the importance of training has been emphasised at each stage of the consultation. All the reports emphasise how important training is yet everyone, whether the Select Committee, the Goode committee or whoever, then comes to the conclusion that it would be wrong to impose any training requirements.

Mr. Gerry Sutcliffe (Bradford, South): Training is vital. If the regulator is to rely on whistle blowers, we need people who fully understand their responsibilities and duties. I echo the point that training is a must.

Mr. French: I entirely accept the hon. Gentleman's point. The conclusion on training is to be found in other forms, such as in the Goode report, which says:

"We do not consider it would be practicable to require all trustees to complete even a preparatory training course, but we strongly recommend schemes arrange this as a matter of good practice".

It is not explained why the Goode committee regards a requirement for training as impracticable, yet goes on to say that training should be a component of good practice. That seems inherently contradictory.

Much the same appears in the Select Committee report. The Committee said that it believed in

"a policy of comprehensive training for trustees which should ideally commence before they take up their role and should continue throughout their time in post . . . training should consist of both an introductory training course as well as regular updates. We would also support the proposal that trustees should be strongly encouraged to obtain a certificate of qualification in trusteeship. We reluctantly accept it is not possible to make such training a compulsory requirement".

That is an inherently contradictory position.

The closest that the Bill gets to requiring training is to require employers to permit trustees who are employees of the company to take paid time off work for training. It is, of course, entirely optional for the trustee. Why--I continue to search for the answer--has it been felt that it is better to leave the trustees' knowledge to chance? It has been suggested that it is a matter of cost. If it is, it is a short-sighted point of view because costs are extremely small compared with the entire value of the assets of the pension fund that one is trying to keep safe.

On 13 March, amendment No. 89 was tabled in the other place. It stated:

"Every person appointed as a trustee shall undertake a short course of training approved by the Authority"--

OPRA--

"(unless he has already undergone such a course or holds a relevant professional qualification)."

The other part of the amendment said:

"The appointment as trustee of any person who fails to undertake such an approved course within six months of his appointment shall lapse and may not be renewed without the approval of the Authority". The amendment was seeking the right approach, although I regard that formula as more prescriptive than it needs to be. That point was reflected in the response of Lord Mackay of Ardbrecknish when he said:

"The Government do not dispute for a moment that trustees should be properly trained but we believe there are very sound reasons why such training should not be made compulsory."

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He went on to explain those reasons, which I found extremely unconvincing. He said that the amendment proposed did not take account of different training needs and that trustees will have varying experience, knowledge and abilities and need different amounts of training. He regarded that as an insuperable practical objection to the proposal of requiring training. I find that unconvincing, especially since he later said:

"Training for trustees is essential. It is vitally important that trustees boards should contain properly trained and informed trustees".--[ Official Report, House of Lords , 13 March 1995; Vol. 562, c. 670-72.]

It is apparently not so vital that any requirement is to be placed on trustees.

The training requirement does not have to be as mechanical or prescriptive as the amendment proposed. It is perfectly possible to establish a requirement for training without specifying exactly what courses or how much training should be undertaken. A requirement could be placed on the board of trustees to ensure that all trustees have had appropriate training. That leaves the responsibility to the trustees but makes it mandatory for them to have had the required training to fulfil their responsibilities. That is a halfway house between the Government's view and the amendment proposed in another place and it should be examined with great care.

It is very much more important to have training in place than it is to argue about the proportion of trustees who come from different sources. There is some argument about whether the requirement for member trustees should be one third or 50 per cent. That seems to be rather irrelevant. The key is how qualified, competent and well trained are the people who are selected to be trustees. The percentage argument presupposes that whenever conflicts arise people will take the view of the party that they allegedly represent and that therefore a member trustee will always take the view of the members. That is quite contrary to the spirit and role of a trustee, which is to be an independent person. I would much prefer the stress to be put on training rather than percentages.

To that extent, I was interested in what my hon. Friend the Minister for Social Security and Disabled People was supposed to have said in an interview in Pensions World , which was the quoted by the hon. Member for Glasgow, Garscadden (Mr. Dewar). My hon. Friend was quoted as saying:

"The precise proportion doesn't probably matter".

If that is a correct quotation, I totally agree with my hon. Friend; it does not matter at all. It is by no means the key issue. I would like to ensure that provisions are put in place so that one may be confident that trustees know when to be on their guard and when to ask the right questions and know if something is amiss with the advice that professional advisers are giving. A reasonable amount of formal training is absolutely essential in that case.

The arrangements made for each fund in relation to custody--who holds the assets--are a key consideration. Custody was a vital ingredient in the Maxwell saga, when the rules were not sufficiently spelt out, and they are not sufficiently spelt out in this Bill either. The trustees should be required to ensure that proper custody arrangements are made. That could be done through the professional advisers to the fund, but trustees need to know enough to ensure that the custody arrangements in place are safe and appropriate to the fund.

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I also believe--I very much agreed with the point made by the hon. Member for Birkenhead--that the new regulator should have a proactive role. He has to ensure that custody arrangements are correct and he should not have to wait until a trustee comes along--albeit at the moment an untrained trustee--and says that he is not sure that everything is quite right before acting. By that time, it would be almost certainly too late. If we are determined to ensure that trustees are able to fulfil their role--that is what the Maxwell-related part of the Bill is all about--training is absolutely essential.

I would like to comment on many other aspects of the Bill, but I shall refrain from doing so in the interests of other hon. Members who wish to speak. I would simply like to endorse the emphasis which my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler) placed on the difficulty of the long-term arithmetic for pension provision. We have begun to face that difficulty in the Bill, but there is much more work to be done because the arithmetic simply does not add up. One would not have to get very far into the future before that message came home in a striking way.

I endorse the formula that has been adopted for the equalisation of the state pension age. I also very much welcome the announcement that my right hon. Friend the Secretary of State made this afternoon on war widows. That will be greatly welcomed by people up and down the country.

7.6 pm

Mr. Harry Cohen (Leyton): I agree with the comments of the hon. Member for Gloucester (Mr. French) about the need to improve the training of trustees. I have enjoyed listening to a number of erudite speeches on this complex subject. The Bill is also complex. It had, at the last count, 162 clauses and seven detailed schedules. As has been said, the Bill derives from the Maxwell scandal. I noted that the Secretary of State made his usual gibe about Robert Maxwell being a socialist. Some of us who are socialist would very much refute that definition of Mr. Maxwell. He was, in fact, a private sector potentate who stole his workers' pension money. I emphasise that he was a private sector employer. The Government are increasingly putting emphasis on the private sector. They spent £9 billion of public money to bribe people to opt out of the state earnings- related pension scheme and buy private pensions, many of them often worse than their occupational pensions. There is a hint that there will be new contracting-out arrangements in this Bill, which could be matched by yet more taxpayers' money.

As has been said, the Goode report came out of the Maxwell debacle. It made significant recommendations, some of which are in the Bill. Many recommendations, however, have been watered down or even distorted. One concern, which has already been mentioned, is about the powers of the regulator. It seems that the Government may weaken whatever powers the regulator is given. There is a fear that, if the Government go down that route, standards of routine checking will fall below those that exist. We shall closely scrutinise the Government's decisions on the regulator's powers.

The Bill contains serious flaws and it could be a missed opportunity to provide real security in retirement for everyone. Pensions are deferred pay. Those to whom the pay belongs should have most of it in their stewardship,

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yet, under the Government's proposals, employer trustees will be able to outvote the member-nominated trustees. There is a strong case for the majority of trustees being member-nominated. The Minister says that that is not important. Well, I think that it is a matter of importance. Certainly, employees and their representatives think that it is a matter of importance and that they should have at least 50 per cent. of the votes on the board of trustees.

I agree with the point that pensioners should have representation on the board of trustees. The training point has been made. As other hon. Members have said, there should be no intimidation of member trustees. The hon. Member for Brighton, Kemptown (Sir A. Bowden) said that some member trustees could face intimidation or threats to their job or promotion prospects. We should write into the Bill that no intimidation of member trustees will be legal.

We should be far more restrictive of employer contributions holidays. Over the past few years, employers have taken millions of pounds out of pension funds in contributions holidays for their own benefit. As the Bill is drafted, it would enable that to continue. That could endanger a scheme's long-term ability to meet its commitments.

There is a case for better inflation-proofing than the Bill provides for. It provides for inflation-proofing to the retail prices index or 5 per cent., whichever is the lower. We live in relatively low inflation times, but that may not be the case in the future. An employer will have the power to allocate only 5 per cent. for inflation, so the actual value of the pension fund could diminish. That matter could be investigated in Committee.

Several hon. Members have mentioned representations made by Age Concern, the Alzheimer's Disease Society and various other organisations, about occupational pensions and state pensions when one partner of a couple goes into care. Age Concern's letter says: "Age Concern also sponsored an amendment to improve the state pension of women separated rather than divorced. Age Concern's amendment would have allowed women who were separated, particularly those separated by their husband going into care, to claim the full pension."

That was a sensible amendment, but it was not accepted by the Government. Age Concern says:

"Unless the government amends the pensions bill, some women will be financially more secure if they get divorced when their husband goes into long term care."

We should not inflict that on those spouses. Such an amendment must be considered again closely in Committee. I hope that the Government will show some flexibility on such issues and that we can get a reasonable change.

There is a quietly spoken agreement that retirement at 65 for women is acceptable. I do not think that it is. It discriminates against women. It is unfair to women. Women under the age of 44 will lose about £15,000 at today's prices if their retirement age is raised. That is straight robbery of those women. It is unjust. It is indirect discrimination.

Far fewer women than men have occupational pensions, so a far greater proportion of them will have to work right up to 65, especially as many women take career breaks during their working life. Many men will not have to work up to 65. Perhaps twice as many women as men may have to work to 65. So I do not agree that the argument should be settled by a common retirement

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age of 65. I am in favour of lowering the retirement age to 60 for everyone--for men to join women. That could be phased in over a considerable period. The Government are phasing in the increase in the retirement age to the year 2020. We could phase in a reduced retirement age over an extended period. We could perhaps reduce the retirement age for men by one year each decade. That would at least take us towards equal retirement at 60. That is the direction in which we should go. It is not the direction in which the Government are going.

I wish to concentrate my remarks on pensions and divorce and the need to arrange for equitable distribution of pensions in the event of divorce. I have presented to the House two ten-minute Bills on the subject, one in the last Session of Parliament and one in January this year. My measures have been published, so there are Bills that show how pensions could be divided in law.

I pay tribute to Baroness Hollis and the others in the other House who pressed an amendment and had it carried. The Government were defeated by five votes. That is to be welcomed. I appreciate that the Government have accepted that amendment in principle today. There is a powerful case for equalising pensions in the event of divorce. I shall deal later with how that could be done.

I wish to read to the House two quotations. One is from Sallie Quin of the organisation Fairshares, to which I pay tribute for its campaign on the issue. In a paper which it submitted to the House of Commons Library, it says:

"The wife suffers a double betrayal, she is betrayed by her partner and then by the system which dashes her hopes and all too often condemns her to a life, if not of poverty, of very reduced circumstances. Even if she has pension entitlement in her own right it is below that of her husband's through career breaks and periods of part time work. . .

The wife is treated like a chattel. She is totally at the mercy of her estranged husband. If he decides to continue working until the age of 75 she will not receive her entitlement until then, and while he has a comfortable salary on which to live she must survive on state benefit. If he dies before retirement she will receive nothing as she has no entitlement, as an ex-wife, to a widow's pension. If he dies after retirement her source of income will dry up for the same reason, you cannot be both his widow and his ex-wife. It is accepted that women live longer than men, therefore there will be many wives spending their last years thrown on to state benefit. . .

We believe that it is possible to divide pensions on divorce. It will not be easy, but with conviction it can be achieved. In every other country in the EU to a greater or lesser degree it is law. . . There is over £600 billion accrued in occupational pensions alone, over 25 per cent. of the privately held wealth in this country. 90 per cent. of payments of occupational pensions are to men. 1.14 million retired women are dependent solely on income support. It is time for better treatment of the wives and mothers, the carers, of this country".

I agree with her on that.

On the same issue, the Equal Opportunities Commission says in its briefing paper to Members of Parliament:

"In research carried out for the DSS, women aged 55-69 who were divorced and not remarried at the time of retirement were the poorest group of all pensioners. . .

As women still shoulder the main responsibility for the care of the family, they can miss out on pension rights in years when they do not have paid work, or combine caring with part-time work.

Many of them expect to share in their husbands' pensions when they retire, but divorce takes away this prospect and leaves them facing very low post- retirement incomes. For women who are older

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when divorce happens, even though a Court may order an ex-husband to pay maintenance, when he dies they are not entitled to a widow's pension and so become dependent on the State."

The report continues:

"the problem remains that the Court cannot make an Order requiring an occupational pension scheme to split the pension rights between the two spouses. This is unsatisfactory and in some cases prevents an equitable distribution of matrimonial assets."

The EOC sums up:

"Divorce can devastate some women's pension expectations and leave them financially insecure in retirement. The Courts should be able to divide pension rights in the same way that they now have power to allocate other matrimonial property on divorce." The EOC makes a powerful case and the Government have not gone far enough. By accepting the principle of dividing pensions in the event of divorce, they have gone most of the way down the route that Fairshares, the EOC and others want, but they have not gone the whole way and given courts the power to split pension fund money between the fund member and his or her spouse.

The Secretary of State said that such a split would be complex. I am sure that a probing amendment on this subject will be tabled in Committee--I hope to table it--and we shall find out just how complex it would be. I do not believe that it is complex to give the courts such a general power. The Pensions Management Institute said that it need not be complex and that the costs could be allocated equally to the two parties and need not fall on the pensions fund. All those issues will have to be explored during the passage of the Bill. On a more general point, between 1979 and 1992, the poorest tenth of the population suffered a 20 per cent. fall in real incomes, while the richest tenth enjoyed an increase of more than 60 per cent. That disparity is reflected in the disparity of pensions. There is a massive case for an improvement in the basic state pension. About 1.4 million single pensioners and 250,000 elderly couples have to rely on income support to top up their basic pension, and one in four old-age pensioners--about 570,000 people--who are entitled to income support do not claim it because of their dignity, or for some other reason. They need an increase in the basic pension.

In 1977-78, the basic pension was worth 20 per cent. of average male earnings. By the early 1990s, it had dropped to 15 per cent. and, on current trends, by the year 2020 it will be worth less than 9 per cent. Under the previous Labour Government, the link was between prices and earnings. If that link had been maintained, a married pensioner couple would be £30 a week better off and a single pensioner £20 a week better off. Pensioners are kept poor because the Government stopped that link.

Beyond what we have done with private pensions, there is a case for an increase in the basic state pension. I have asked to be a member of the Standing Committee. I look forward to the debates there and to trying to get the Government to change some of the clauses in the Bill. I hope that they will listen to hon. Members on both sides of the House and that they will make some of these changes so that we get a better Bill.

Several hon. Members rose --

Madam Deputy Speaker (Dame Janet Fookes): Order. Before I call the next hon. Member, I must point out that there is clearly great interest in the debate and that, unless speeches are shorter during the next two hours, I am afraid there will be some disappointed Members at the conclusion of the debate.

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7.24 pm

Sir Jim Spicer (Dorset, West): I apologise to you, Madam Deputy Speaker, and to my right hon. Friend the Secretary of State, as I was unable to be here for the opening speeches. I followed my right hon. Friend's speech closely, however, and was delighted with its content.

I was fortunate enough to come into the Chamber just before my hon. Friend the Member for Davyhulme (Mr. Churchill) spoke so movingly about overseas pensioners, or non-pensioners, and the difficult situation in which they find themselves.

I became chairman of Conservatives Abroad in 1985 and for the next eight or nine years received the sort of letters that my hon. Friend the Member for Davyhulme has received from people suffering very great hardship. It is an exceptionally difficult problem for any Government and I hope that this Government, our Ministers and those speaking for the Opposition will tread very carefully indeed before making promises in advance of a general election that they might not be prepared to keep. I say that because, before the last election, the Opposition made promises to overseas pensioners, saying that their case would be heard and that something would be done to rectify the problem, and I know that they would not have lived up to their promises.

It is not easy for any Government to fulfil in total the commitments for which my hon. Friend the Member for Davyhulme asked, but he made it clear that we could at least make a start and many others have pressed for the same thing. For example, we could look after the over-80s rather than the over-70s because that is where the real hardship lies. We could and should make some small move towards recognising that hardship.

I have to declare an interest as I am the honorary adviser to the Royal British Legion and I am proud to hold that office here. I am delighted that my right hon. Friend the Secretary of State accepted, in very broad terms, early-day motion 186 on the 50th anniversary of victory on behalf of war and service widows. I shall not read it out in full as we all know what it called for--better and special treatment for war widows.

The fact that an amendment was carried in the House of Lords--moved very ably by the noble Lord Freyberg--with a good majority shows that there is recognition across the board that we are not creating a precedent by dealing differently with war and service widows. I am certain that no other groups of widows will try to follow through on that front--this is recognition for war and service widows. My right hon. Friend the Secretary of State is not here at the moment. The decision to accept clause 117 was taken by the Cabinet, and none of us knows what goes on in Cabinet. However, I am sure that no one did more to support the case for accepting clause 117 at the Cabinet meeting than my right hon. Friend the Prime Minister. I know where his sympathy has lain all the way through and I am delighted that he will receive the recognition and thanks that he deserves from war widows and all ex-service men.

May I query the cost of clause 117? It has been said that it will cost £40 million a year, but my understanding is that this is not an annual cost but a capital sum, part of

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which would be held back or returned as the numbers who claimed under the clause decreased. I would like some clear information about that.

I am delighted that my right hon. Friend the Secretary of State is back in the Chamber because, as I have already said, we are grateful for what the Government have done, but it is only the beginning. A little more tidying up to the Bill should be done in Committee to make it absolutely clear that all war widows and service widows will receive just treatment. I know that Treasury Ministers will say that £40 million is a lot of money and that special cases always exist. However, other amendments with minor financial implications could be introduced in Committee. We are talking not about sums of between £10 million and £40 million but of between £1 million and £5 million to redress the injustices suffered by under 2,000 widows. Treasury Ministers should be happy to know that it is an absolute certainty that the sums involved will decrease with the years.

I should like to quote a letter that illustrates the difficulties that need to be tidied up:

"Dear Sir,

I am writing to you, hoping you can help me to understand the problem I have. My dear husband died on 13 November 1994. It was our second marriage, he lost his wife the same time I lost my dear husband, but knowing him 46 years ago, we met and married in Sherborne Abbey in May 1993. He made the Army his career for 30 years and came out a Warrant Officer. Before he died, he always said there would be part of his pension for me when anything happened to him. He was such a sticker for things to be right, everything was left in order, that when I found out that I am not entitled to anything I just can't believe it. I am his wife, and dependant, and this dear man has gone still thinking I am being looked after. Surely 30 years mean something. How many more people get married as we did and rely on their pensions. I get my widow's pension--but it's very hard. Is there anywhere I can go to? I think you are my last hope. What does it matter if I am his second or third wife, I am still his dependant and he gave 30 years to the Army knowing"--

or thinking--

"that his wife would be looked after. I am not asking for much, just a little help from what we thought was mine.

I await your reply".

I cannot reply to that letter at the moment to say that all will be well, but I hope that those serving on the Committee considering the Bill will take up such cases.

I hope that everyone will agree that in this 50th anniversary year, those who served their country--many of them died for it--deserve the recognition that we can give them. They are a special case and should be treated as such. They do not create a precedent.

7.32 pm

Mr. Gerry Sutcliffe (Bradford, South): I am happy to take part in the debate. The thoughtful contributions from hon. Members on both sides of the Chamber show that we accept that the Bill has a long way to go. If I am successful in my application, I look forward to serving on the Committee, so that I can go through the Bill in more detail.

The Secretary of State said that the Maxwell pension scheme fraud was the inspiration for the Bill. I should like to declare an interest as I am sponsored by the Graphical, Paper and Media Union, formerly known as SOGAT and the NGA. That union represented many Maxwell pensioners who successfully fought for compensation. If accolades are to be given, the union deserves some of

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