Examination of Witnesses (Questions 200
- 219)
WEDNESDAY 13 MARCH 2002
RT HON
ADAM INGRAM
AND MR
BARRY MILLER
200. But, Minister, we have to be clear about
this. It either has to be cost neutral as an aim or not. If what
you are saying is the aim that it should be cost neutral but,
in the light of operational circumstances and if the historical
data is not correct if you postulate it into the future then cost
neutrality goes out of the window, I understand that. Is that
what you are saying?
(Mr Miller) The words you were quoting there were
a description of the effect of our proposals. We did not, when
looking at the Compensation Review, do so against an objective
of cost neutrality.
201. So there is—and, again, we have to
get this right—absolutely no ceiling on the resources which
would come under the budget of compensation arrangements if circumstances
dictated that that should be so?
(Mr Miller) We would not be faced by any budgetary
constraint in terms of implementing any scheme, whether it is
the scheme we have or, indeed, the scheme we propose, because
clearly the issue would be demand-related, and it would depend
on the number and type of claims that we get.
202. But just so we strip away all the ifs and
the buts and the maybes and so on, you are making a clear statement
there is no upper limit to the budget in these circumstances,
given that I have the Review document in front of me here? I just
worry about what it says in section 2, where under the words of
"affordability" it says, "The arrangements should
be cost effective, affordable and also fair to the taxpayer".
I understand "fair to the taxpayer" but it has the smack
about it of you trying to limit your liability.
(Mr Miller) I said that we did not conduct the Compensation
Review with the objective of producing a scheme which was cost
neutral in its effect, and we have not. The point is made that
we expect additional cost in the early stages. The schemes that
it would replace we would expect to pay if the demand was there.
If cases were advanced we would not expect to be constrained by
our budget, and that would apply to the new scheme equally. If
individuals are entitled, they will be paid.
203. Chairman, I will leave it there but I want
to make it clear that we will look at what you have said when
we see it in print with great care because this Committee has
to be clear that you as a employer are not trying to limit your
future liabilities in some way or another.
(Mr Ingram) I think we have given a clear statement
on that—
204. I do not think you have.
(Mr Ingram) That becomes a debatable point. If further
information is required in clarification terms, then clearly we
will assist the Committee on that.
Chairman: It would be helpful if you
clarified this. I am not having a general debate now.
Mr Jones
205. I accept what the Minister says, which
is that the cost depends on how many claims you get, but the actual
claims you get depend on the rules of the scheme or what system
you put in place, so you can affect the cost by limiting on what
grounds you claim. For example, travelling from home to work.
Would that be covered under the scheme? If it is not then that
is out and, therefore, there is no cost. If you put it in, there
is a cost, so you have to look very carefully at the rules around
this scheme, because there is going to be cost involved.
(Mr Ingram) There must be a cost involved in this.
This is something which, as Barry said, is demand-led—
206. But it is also dependent on what the rules
of the actual scheme are.
(Mr Ingram) Yes. The rules of the scheme define what
then can be claimable from it, but that will be assessed on the
basis of what is sensible and the way in which we are now approaching
the new structure of the scheme. Does it sit within that? Is it
something which can then be evaluated and, therefore, is there
a liability for us within that?
207. But if you want to limit your costs then
the way you do it is by changing the rules.
(Mr Ingram) That is one way of looking at it but it
is not the way we are looking at it. I am giving that clear statement.
There is no capping because of the demand-led aspect to it, and
that is not the approach we are taking to this particular scheme.
It is not being driven by that consideration.
Mr Hancock
208. The difference surely is that, under the
old scheme, the war pensions scheme was administered by the Department
of Social Security and it then transferred the responsibility
over to the Ministry of Defence. Was the understanding that the
Treasury would fund that at the same level within the Ministry
of Defence budget, or is it contained within the capping limit
that is on your budget as a whole? This is the specific question
which covers all of the points that are being made. Under the
old scheme, there could be as many claims as you like with an
infinite budget and it just went on being paid. If the claims
were agreed, it had to be paid, and it was absorbed nationally
out of that budget. In your case, is it that all new claims have
to be absorbed within the MoD budget, or is there a specific ring-fenced
allowance within the Treasury to cover it?
(Mr Miller) The expenditure on war pensions was what
was known as annually managed expenditure—in other words,
it is demand-related and not capped and it remains so even under
the Ministry of Defence. Although the—how can I put it—structural
position may change, we do not expect the amounts that we pay
to be capped by any budgetary limit under the new scheme.
209. But would it mean if you had an excessive
number of claims to settle, or an increasing number, that would
have an adverse effect on the MoD budget as a whole so there is
a motive within your system to make it more difficult for people
to claim?
(Mr Miller) No, we would not expect that.
Mr Jones
210. I think the unique nature of the Armed
Forces has already been mentioned, and one unique part of the
existing scheme is the fact that personnel are allowed to claim
against the MoD in their own time limits after they have left
the Service, whichever Service they are in. What is being proposed
is that you are going to put a three-year time limit for injuries
and, also a one-year time limit once disease is diagnosed that
could be linked possibly to service in the Armed Forces. We took
evidence from the Royal British Legion who are clearly not very
happy about the introduction of those time limits. Is this not
an example of where you try to limit the liabilities of the MoD?
(Mr Ingram) Not at all. There is an accepted list
as well. If medical science changed or medical knowledge changes
then we are obliged to revisit our previous consideration. There
are unknowns in all of this. We hope to put in place a coherent,
structured system which is hopefully better and more easily understood
so that there is then an obligation on people to bring forward
their claims and an easier means of evaluation and rights of appeal,
and so on, for fair purposes. We believe that is the right approach,
it is a cleaner and more efficient system, not driven by a financial
consideration.
211. It is a cheaper system for you, is it not?
(Mr Ingram) There is no certainty in that.
212. Surely there is, because you have a situation
whereby there is going to be a cut off date after three years,
whereby people are not able to bring claims. I would imagine that
from my knowledge of industrial injuries—where a lot of
people failed to put their claims in because they missed the time
limits—that is clearly going to happen here and this is
a way of limiting the number of claims you are going to get?
(Mr Ingram) That perhaps could happen in certain circumstances.
213. I say it will happen
(Mr Ingram) I do not know whether we have historical
data on this in terms of the period of claim, I do not know whether
that is immediately available, if not we can seek to make it available.
We are approaching this on the basis of trying to get a clean,
coherent structure and not driven by the philosophy which you
are alluding to—
214. I am not alluding to it, I am saying it.
(Mr Ingram)—to try and ensure that it is structured
in such a way to encourage people to claim within a reasonable
time scale. Undoubtedly it is different from what exists at present.
We are changing the culture of that approach because we believe
it is a better way of doing it, rather than going through the
civil burden of proof and rather than having it open-ended in
terms of the claim structure at the present time. We believe it
is more sensible in terms of best use of all resources and in
the way in which we can then, I think, assist our serving personnel
to claim their entitlement. That is our philosophy. That is our
approach. It is not driven by cost neutrality or saving money
out of the system.
215. Would you also agree that one of the key
issues in industrial injuries cases is the fact that people do
not know their rights in terms of the time limits, clearly under
this system there are going to be a lot of people who are going
to miss the deadline and are not going to have access to any justice
at all, are they?
(Mr Ingram) Okay. Mr Chairman, what I can say is,
and it is repeating the point, we are still in the receive mode,
we have not closed down on this. This is something which we have
tried to set out and tried to define. We will certainly take into
account the representations which have been made by the British
Legion and any representations also made by your Committee. Again,
if it stacks up, if it is an issue which has a justifiable point
then we will revisit it in a positive way.
216. I welcome that. Can we have an assurance
that costs will not be a reason for not changing this?
(Mr Ingram) The answer is yes to that.
Mr Hancock
217. Can I, first of all, apologise for not
being here at the start, I was chairing a Bill Committee and I
sadly missed the beginning. I would not deliberately have wanted
to miss Mr Howarth's contradiction of some of the things you said.
I am interested in the whole concept of the statement that the
MoD made when they published your original document, that the
current War Pension Scheme was both unusual and generous. I would
like you, if you would, to elaborate on what allows you to suggest
that it is both unusual and generous, because many of the recipients
do not believe that?
(Mr Ingram) Are you talking about the compensation
scheme here or the pension scheme?
218. Both. Both the way in which the War Pension
Scheme operates and also the on-going situation regarding the
pension scheme?
(Mr Ingram) This is on the burden of proof point and
the shift in the direction on this. Clearly people will think
that the current system is, in one sense, preferable because it
is open-ended. What we are saying is to try and bring some structure
to it and to put measures of evaluation into this and to try and
enhance the payments for attributable injuries and having a lump
sum payment being made for pain and suffering and then a guaranteed
income stream alongside. That, it seems to me, to be a more desirable
approach on this. If the view of the Committee is that we should
have no change in this I think we would be losing a lot of enhancements
in terms of the restructuring that we are trying to put in place
here.
219. How can you explain the situation that
one of the changes will be that you will shift the burden of proof
on to the claimant? How on earth can you justify that when you
yourselves in the Ministry of Defence in answer to Parliamentary
questions and in letters have said that your records are not all
they ought to be - that is what you said—particularly in
relation to Gulf War vets who are trying to make a claim? You
said there were not meticulous records kept and they have now
gone astray or they were never kept. If you were really cynical
and you were a veteran who had an illness which he is trying to
prove if you want to make these changes you simply rule out that
whole raft of people from making legitimate claims?
(Mr Ingram) If it is an old claim it is set against
the old scheme. The new scheme relates from the point of implementation.
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