Select Committee on Defence Minutes of Evidence

Examination of Witnesses (Questions 180 - 199)




  180. It will be done by autumn, I presume?
  (Mr Miller) That is our intention, yes.

Mr Crausby

  181. I suppose the question of the definition of what an unmarried partner is is enormous. Is your consideration about, for instance, same sex partners, or different sex partners, or what type of partners? Have you done any thinking on that issue before you do the costings?
  (Mr Miller) We are told by our lawyers that if we accept unmarried partners we cannot differentiate between same sex partnerships and heterosexual partnerships, so clearly we would have to include them. We have been looking at definitions and there are quite a number about. I think from my personal point of view the one that appeals most is the one adopted by the Australian forces, which is a combination of length of time for which a couple are together and some evidence of financial interdependence, but there are clearly quite a number of possibilities one could look at here in order to demonstrate that a partnership is reasonably enduring.

  182. You have already said that the Government proposes to consider changes if the members want such changes and are prepared to meet the full cost of the improvement. We have already talked about winners and losers already and about the question of cost neutrality, but how could you do that in a situation where this is not a funded scheme and there are no contributions to the scheme? How might you look at contributions paid effectively by some people who were not in receipt of the benefits for other people who would be in receipt of the benefits?
  (Mr Ingram) In terms of how we assess this, we are doing it through focus groups to try and get the feel for the debate within the Services. I think you have recognised it is not an easy process because it touches on a whole lot of sensitive issues, and therefore we are having to do this in a very structured way. Part of the assessment would obviously be then how is this to be met? Is it met from within the existing total funding package or as a contribution to be made to meet that? Now, we have not concluded any of those lines of inquiry or examination at the present time but, given the timescale to which we are working, we have to do it within the next few months so we can meet the deadline.

  183. Will you consult Service personnel about the issues, and how will you consult Service personnel about the complex issues of whether some people will have to contribute either by way of a benefit or a loss of benefit for the issue of same sex partners, for instance? How will that go down with Service people?
  (Mr Miller) We intend to use focus groups which we used as part of the consultation process in the earlier stages of the work, so we would tackle that in this way. It is clearly going to be an issue, and in one sense the final element, the final judgment, will be individuals' decision whether or not to transfer to the new scheme. This would be against the background of us introducing a new scheme, so individuals will be able to choose whether or not they transfer to it.

  184. We are already in the midst of this to some extent with the Anna Homsi case. What have you learned from that? Her unmarried partner was killed in Sierra Leone.
  (Mr Miller) What we have learned is, if I may say so, the obvious: that unmarried partners are an increasing problem. The fact is that the existing scheme makes no provision at all for unmarried partners and that was the root of the difficulty in the Anna Homsi case.

  185. It is reported that there is a quarter of a million pound payment been offered to Anna Homsi—
  (Mr Miller) So I believe.

  186.—I am sure you could say without precedent, but there are bound to be implications from this. What would you like to say about those? Is it clearly not the case that, once you settle with one individual, that is bound to set a long-term precedent?
  (Mr Ingram) I would not want to deal with the specifics of this in that particular way because an offer has been made to Miss Homsi and she is considering whether to accept that or not so it is in that process of consideration and it would be wrong to examine that in any detail or put values to it. Clearly that particular incident and all that flowed from it stimulates a debate. The debate was here anyway but it became more sharply focused as a consequence. That means we then have to consider what we do as a consequence of all of that, and is why unentitled partners are now becoming part of an overall examination. Of itself it was not the trigger but it stimulated the debate, and this was an issue I would have judged would have had to have been addressed at some stage anyway because of the changing nature within general society. We could not ignore the debate and by addressing it in this way we are dealing with all the sensitivities which surround it and then trying to find a way forward on this. It is not without its complications, and hopefully we can find a way through it which will find acceptance within the wider community.

  Mr Howarth: Very quickly: is this review inspired by the insatiable demands of the European Court of Human Rights? Secondly, if this scheme is to be extended to unmarried people, will the cost of it be borne by those who are married and, if that were to be the case, would then that not simply constitute yet another Government assault on the institution of marriage in our country?

  Chairman: I wish I had not allowed you to ask that!

Mr Howarth

  187. Those are just two simple questions.
  (Mr Ingram) They may be simple to you but I am not a social scientist and I am also conscious of the fact that any change by a major Government Department could be seen as a bit of social engineering and, therefore, can be subject to that type of attack but remembering there is also an attitude out there within society where a change has taken place so we have to be mindful of that as well. If the world was only as black and white as you make it, Mr Howarth, it would be an easier place for ministers, but it is not and we have to deal with realities as well as all the other aspects to it. It is why we say that, by consulting the Armed Forces themselves through focus groups, we get a feel for that debate, and we do not know the extent of the problem; we do not have a measure of the scale of this other than we know it is a reality. I put it to you also that, if it becomes a recruitment and retention issue, then it would be wrong for to us ignore that. If large numbers of young people were saying, "I am not joining the Armed Forces from the communities from which we previously recruited because I do not want to be married; I want to live in a different type of relationship", that would be something I think we would ignore at our peril. So we have at all times to be alert to society's changes and if we can be ahead of it to the betterment of the Armed Forces then that I think is the responsibility that rests on us.

  188. And the answer to my first question?
  (Mr Ingram) Is it driven by the European Courts? No.

Syd Rapson

  189. My question was very similar but along much more sympathetic lines, of course. The award of the claimant was in response to a very popular line taken in the media, and I am not criticising that decision but it was taken, I understand, by the Prime Minister. Was it welcomed, under this cost neutrality review for pensions, when a separate person in the shape of the Prime Minister made a decision to alter the whole financial structure within that cost neutrality band? Did you cheer and say "Well done"?
  (Mr Ingram) Do I welcome Prime Ministers' decisions? Every one of them! But it was a much more subtle process than all of that. Clearly, given the prominence that particular case had and the pressure we were on, for a Prime Minister or any minister to ignore it would have been wrong. I am not saying that it was by diktat and that all of a sudden that had to happen. All of these things are debated within the Government, along with the flow of that debate and what it means if we make that decision and what does it read across elsewhere, and I would rather not get into the detail of this individual case because sensitivity of the individual has to be taken into account. I think I had better rest there, because we have not settled with Miss Homsi on this particular point.

  Chairman: We must now move on to compensation.

Jim Knight

  190. In your earlier exchange on cost neutrality with the Opposition front bench, Mr Howarth used some language which you described as "emotive" in talking about people laying down their lives for the country and so on, but I think in this case Mr Howarth has a point in the special status of the Armed Services. It has been put strongly to us by the Royal British Legion, by the Forces Pension Society and so on that we have to account for that special status. I know when we were in Washington last month we were all impressed at the special status that the Armed Forces and veterans are offered in the USA, and I think we have something to learn from them in terms of the regard that we hold people who are willing potentially to make that sacrifice. Do you agree that this is an important factor? When you are going around trying to explain these new proposals to people and they start to become aware of issues of abatement and terminal grants, where they thought they were going to get a nice handout and they are paying for that through other losses on the pension scheme, do you think that we are paying due regard to the special status, and specifically in compensation are the proposals properly recognising the unique commitment which Service personnel make?
  (Mr Ingram) When I used the emotive language, I could share in that type of argument but I think we also have to set against that—and hopefully this is not misinterpreted—the clinical judgment. There have to be hard judgments taken at all times against anything we ask of all the Armed Forces. I would share the views within the Committee about the enormous job they are doing and we could spend a long time playing out the language of this, but we are dealing here with the specifics of how then we deliver in terms of the remuneration package. The same argument could be advanced in terms of pay and conditions and a whole lot of other aspects to it as well, and I think we have as a Government begun to address many of those issues, and I do believe it is one of those processes that will never end because the argument is out there and at the present time, given the focus that is on the Armed Forces, there is a greater awareness of what we ask of them. I do not detect a large demand, however, within the wider community for more to be done. That may be hard to say in one sense but, where the public demand is, there is not a huge demand to do more in this area. We then, from the Department's point of view, have to constantly take that argument forward, constantly remind people of the importance of what we ask of the members of our Armed Forces, and make sure there is a greater public awareness and alertness to this, and we have many strategies by which we approach all of that. You then refer to your experience in the States and we have learned lessons from there, which is why we now have a minister in the shape of Dr Moonie responsible for veterans' affairs. It is a new approach but it is one which we are attending to with vigour, trying to find ways in which we can step up our support—again, across the reach of the veterans' community as well as the existing Service community. Alongside that, there is a way in which we are tackling the needs of the families as well—the way in which we have sought to put in place new welfare packages. All of these things are developing all the time and are part of our overall strategy, of trying to act as the very best employers do against all the other constraints out there. I do not think the Department can be found wanting in terms of our awareness of the issue and the way in which we are beginning to tackle it. We are at the beginning of tackling this; these are issues which have not been addressed at all, probably, and now we are having to address them because of some of the pressure points, and because of the recruitment and retention needs we are having to look at a wide range of strategies to tackle all of this. What I would say about the US and perhaps other countries is that, when we look at the benefits which can be paid to veterans, there is a situation arising where you have to compare it with what else is given in this country with what is not given in those countries—ie, a National Health Service. They have to make huge commitments because they do not have that type of support, a Health Service, there, and that could be replicated across a number of other delivery systems we have within this country. So it is not like-for-like in all of that. It is easy to say, "Well, veterans there get a particular reward", but they do not get rewards elsewhere in the society because of the structure of that particular society. So that is why we have to look at this in a global way. We have to learn lessons at all times; we have to be alert to the enormity of the issue; and I would share with you your view and Mr Howarth's view and others within the Committee about the importance of what we ask of our Armed Forces personnel, and never to lose sight of that.

  191. I accept a lot of what you say and I know, for example, in the massive increase—the $34 billion or whatever it is in the Department of Defence budget—?
  (Mr Ingram) $48 billion.

  192.—Well, there you go. A substantial part of that is increase in pay and conditions benefits for Armed Forces and their dependants, and a substantial part of that in turn is the Tricare health system, but it is certainly not cost neutral. They are putting more money in, in order to give better benefits for their Armed Services. They are providing leadership in terms of the general public being able to place a value on their Armed Forces and veterans and, without wanting to re-rehearse the arguments you had with Gerald about cost neutrality, I would have a fear perhaps that many of our Armed Forces do not go around thinking every day about their pension entitlement, they do not join up because of it, but when this debate is put to them with the comparators between the existing scheme and the old one they will look more closely at these issues which are very current in public debate about final salary schemes going and all of that, and they may not feel as valued as they do now. They are not thinking so much about it, and that in turn may lead to one or two retention problems in some areas for you and then you may regret the cost neutrality decision you make?
  (Mr Ingram) I think we entered this with our eyes open. What I have said all along is that, if the assessment was one of those neuralgic issues, then we would be much more exercised on that particular front. We are exercising other areas—air crew retention, for example. That is a very demonstrable case that has to be addressed and we address it in a specific way. Hopefully, of itself, that will not stimulate everyone saying, "This is now the biggest issue under the sun and I am going to leave the Forces and I am not going to join up because the pension policy is not sufficient"—it will not quite work that way, but if it was the case that we had detected this then our approach, by definition, would have been different, and that has to be part of our consideration. There is no point hiding that or saying that this is done in a different way; that is part of the priority approach which has to be developed within the Department. Insofar as the total value placed upon the Armed Forces is concerned, we are currently in the process of negotiations with the Treasury in terms of our budgets. I cannot even begin to touch upon those subjects today.
  (Mr Miller) We may well have chosen not to increase the amount we spend on the pension scheme but we have in recent years put substantial extra money into, for example, the operational welfare package, the new pay system, this year's pay settlement, the air crew retention review, deployment allowances and a number of others. So we are spending extra money on people.

  193. Good. To be more specific about compensation, did you consider the possibility of a scheme which distinguishes between injuries sustained during active service and those which occur in everyday occupations, more comparable to civilian work? For example, in other evidence sessions we talked about people incurring injury whilst undergoing sporting activity and being able then to be eligible for compensation. Did you consider a separation that perhaps rewarded people better for genuine active service injuries and separated that off?
  (Mr Miller) Frankly, we did not consider it for very long. We found it very difficult really, in all fairness, to discriminate between the individual who is, say, wounded in action, and the storeman whose work is just as essential to maintaining the frontline and who is injured in an accident in his storehouse. We thought on balance it was fairest to treat all Service people on the same basis for accidents or injuries incurred on duty.

  194. So your definition of active service is "on duty" in any form. Does that include going to or from the place of active service? There seems to be another grey area as to what happens if someone incurs and injury in those circumstances?
  (Mr Miller) The issue of home to duty travel is clearly a difficult one and we have not reached final conclusions yet.

  195. Will you do so by the autumn?
  (Mr Miller) Yes, but if I can make the point, we dictate to servicemen where they live. When we do that it is perhaps not unreasonable that we cover them for injuries incurred in their home to duty travel. That is the sort of consideration we have to bring to this.

  Jim Knight: I would not want, given their special status, to downgrade matters. Thank you.

Mr Cran

  196. Minister, I am afraid we are back to the concept and principle of cost neutrality again. I think I made it very clear to you when we were discussing the pension scheme arrangements that I thought you were, as an employer, being niggardly. You are going to produce your comparators to show I am wrong, and I am waiting for that. However, whilst I may be wrong about that, I am completely mystified why an employer attaches the words "cost neutrality" to compensation arrangements. I am truly mystified by that and I think it will be deeply misunderstood by your workforce because what it does is gives the impression—
  (Mr Ingram) We do not use that terminology in terms of the compensation of individuals.

  197. Well, do, please, tell me why, because I have it in front of me that you do?
  (Mr Ingram) From words I have used?

  198. No, just from internal documents that we have here. Are you saying to me there is no cost neutrality in terms of the compensation arrangements?
  (Mr Ingram) Well, I can because in one sense it is an unknown quantity, is it not? It is one of those things that will go up and down based upon circumstances, so we will have to work in terms of assumed cost to a Department, so notional funding would be within a Department on that, but if there was a major terrorist incident or other hostilities where there was a significant quantity of injuries attributable to Service, then that has to be met. So there is not a capping on this, at all.

  199. I welcome that but, just so we understand this completely, I have it in front of me that the Review document says that there will be additional costs in the short term as the scheme is introduced but "in the longer term we would expect direct costs of the new scheme to be broadly cost neutral". How do I put your answer against that statement?
  (Mr Ingram) That has to be the working assumption. We have to look at the historical cost of meeting compensation claims and then seeing with the new scheme whether this is going to generate additional multipliers. Of course, the issue relates to the individuals who are claiming.

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