Examination of Witnesses (Questions 20-39)
WEDNESDAY 18 DECEMBER 2002
DR LEWIS
MOONIE, MP, MS
LIZ MCLOUGHLIN,
CBE, AND MR
ALAN BURNHAM
Chairman
20. It has to be, I would have thought, because
it is very difficult for anybody, unless they were boy soldiers,
to qualify for retirement at 55.
(Dr Moonie) It is possible to buy the AVCs, of course,
and up your pension entitlement closer to the maximum level. You
make a perfectly fair point there. Service in the Armed Forces
is a young service. People have to be fit. They have to be fit
for the task; and they have to be fit for their duties. The scheme
is generous, not just because we want to be generous—although
we do—but because it is to our advantage. We do require
young, fit people; that is one of the reasons why we have the
early immediate pension as well. It is a fact of life in the Armed
Forces that you do have a premium on fitness. Within that I can
see areas, for example specialist NCOs, where there are shortages
in the field, where you might well want to encourage them to stay
on longer. That is really stepping outside the parameters of your
question, Chairman, but we would try to be flexible in the way
we do this. It is done both for the benefit of our people, as
Liz McLoughlin has said, but also for the benefit of the Service.
Mr Hancock
21. How does the Government recognise its special
responsibility to the Armed Forces in our society; and how do
you feel that the pension and compensation benefits available
to service personnel actually deliver that commitment that the
nation has to them?
(Dr Moonie) In general, first of all, I think the
Ministry of Defence has to recognise that it is important for
us to retain our Armed Forces, and that means giving them a decent
overall package; it involves pay; it involves pensions; it involves
guarantees of what will happen to them if they are injured or
fall sick; it is housing; a whole host of things. Many things,
of course, have been largely hidden, things which we have not
concentrated on in the past. As you well know, we are putting
a lot of effort into people, and the specific role of pensions
and compensation. Firstly, on the compensation side, people must
feel reasonably secure that if they become ill or are injured
as a result of their service, or not, that they will be cared
for; and the scheme should be generous enough to ensure that they
are properly cared for. As regards pensions, we have to satisfy
both the needs of the Service and the needs of the individuals.
I think the way we do that is by trying to make our scheme one
of the most, if not the most, attractive in the public
sector. That must be our guiding light.
22. I do not know if it has been brought to
your attention, but it has been brought to our attention by the
Royal British Legion, that during negotiations they had with MoD
officials they were told that there was very little difference
in the MoD's view between the Armed Forces and the emergency services,
the blue light services, fire, police and ambulance. What is your
reaction to that suggestion?
(Dr Moonie) There is, of course, a difference between
them. There are similarities as well. At the end of the day, it
is our soldiers, sailors and airmen who are required to put their
lives on the line as part of their job; and they are required
to do it as opposed to risk their lives, which is different.
23. You would not share that view?
(Dr Moonie) There are very definitely some qualitative
and quantitative differences between the two. There are similarities
as well—of course there are—but I would stress the
differences.
24. You would suggest that that is not something
the MoD officials in negotiations should draw comparison with?
(Dr Moonie) I think it is legitimate to draw a comparison
with them because, as I have said, there are similarities with
them as well. It is not a case of black or white.
25. Is the Head of Personnel aware of the suggestion
that has been made by the Royal British Legion?
(Ms McLoughlin) I was not, Mr Hancock, until you just
said it. Perhaps I can make a few observations on it. It would
depend very much in the context in which this conversation was
held. I think if they were talking perhaps about the normal age
of retirement, some of the physical demands made on our people
are also considerations in the fire service and the police. If
they were talking about physical risk, you can draw some comparisons
so I totally agree with the Minister; but comparisons do not take
you all the way. Sitting at the heart of what I am partly responsible
for, the Armed Forces' overarching personnel strategy, is a recognition
that we basically employ our people on a 24 hour, seven day a
week basis throughout the year. We have special responsibilities
to them and their families. There is no other employer who has
the same responsibilities to the individual and his or her family.
As the Minister said, we do not generally expect public servants
to exercise lethal force; and we do not ask anybody else to die,
not as an accident but as maybe a part of an operational situation.
I think all of those are well recognised. I am not saying we are
perfect, but those certainly underpin the whole range of terms
and conditions of service that are so important to our people.
26. Would you say that then carries on into
the pensions; that that recognition is not only while they are
on active duty as members of the Armed Forces, but the pension
and compensation schemes actually reflect that after they have
left the Service. There is a subtle difference between Armed Forces
pension and compensation schemes, as opposed to other public service
pension and service schemes?
(Ms McLoughlin) I think I would say that the pension
scheme is part of the overall terms and conditions, the package
of employment, and it is important that our pension scheme is
fair and appropriate and rewards and recognises the special requirements
we have of our people.
27. If that is the case, why is it then when
the case comes up for changes to be made that the MoD will not
support retrospective changes, so that there can be beneficiaries
from previous service to be included? The excuse given for not
doing that is because it would open a Pandora's Box when it comes
to other public services, because they cannot be treated differently.
You have just told us they are different. I want to know why you
do not recognise that and allow retrospective benefits to be paid
to Service pensioners?
(Dr Moonie) The allowing of retrospective benefits
is not just a matter for the way in which we regard people who
work for us; it is a matter of the law. The general advice is
that retrospection, with very few exceptions, cannot in terms
of a normal retirement scheme be applied to one part of the public
sector without opening the door to others.
28. You cannot have it both ways?
(Dr Moonie) Yes, you can.
29. I do not think you can, can you? Your personnel
do not think that, do they? They feel that there is a recognition
that they are different; that their terms of employment and pension
and compensation schemes are different. If you examine it you
can see it in the accrual rate: the way in which the whole system
works is different. How can you then suggest that you can not
make retrospective payments because the schemes are all the same
in the public sector, when they are manifestly not?
(Dr Moonie) I did not say they were all the same.
I said there were exceptions which we would take. There have been
one or two in the past. In general, where you are talking about
general conditions, these conditions must be applied against all
these schemes. It is not a matter of not recognising—that
is done through the overall benefits of the scheme. I think it
would be quite invidious to select out one group of people who
have gained a normal retirement pension and give them additional
benefits retrospectively and deny these to others who have also
given service to their country through public services.
30. You have already said that these people
are different because they are the only group of people employed
by the nation who, as a matter of duty, have to put their lives
on the line as part of their career involvement.
(Dr Moonie) Absolutely.
31. I cannot understand how a change in pension
and compensation affecting that very specific group of people
would have to be reflected across the whole of the public sector.
What possible reason could there be?
(Dr Moonie) I have just told you what the reasons
are, Mr Hancock. The reasons are that there are certain laws in
this country, such as the Convention on Human Rights, which now
apply. People are entitled to be treated equitably. Exceptions
can be made, and are made, and they underpin the statement that
we regard our people differently. You cannot make widescale exceptions
to that without opening the door to other schemes.
32. Has the MoD had legal advice on that point?
(Ms McLoughlin) Yes.[4]
(Dr Moonie) We have, yes, and this is
general government policy. This is not one junior minister sitting
here in front of you expounding on it, I am afraid. The policy
is quite clear. The exceptions cannot be made in a general sense;
and they will not be made because we cannot afford them.
33. Could somebody write to the Committee with
that advice and tell us what we have had?
(Dr Moonie) I think legal advice sometimes cannot
be disclosed in that way.
Mr Hancock: I would like us to have some sort
of explanation how people whose lives are on the line as part
of their terms and conditions of employment cannot then be judged
to be the same as people in the public sector, wherever they might
work. If you have had advice that the Services cannot be an exception
to that, I think the Committee should be entitled to see that
advice.
Chairman
34. Either send us a version of it, or send
us the advice.
(Dr Moonie) We will certainly look at that, Chairman,
and do our best to satisfy that. I should point out, saying that
people are different surely does not imply that in every single
case and in every single possibility you have to look on them
as being different. The whole package applies in this case. I
think the whole package does recognise that people are treated
differently. There will always be individual elements within it
which we can find disagreement with.
Syd Rapson
35. Part of the legacy problems relate to positive
reforms, and that is to be recognised, but unfortunately they
rarely carry retrospective effect. Increased provision for widows,
in particular, has not be retrospective, leaving some of them
feeling instead of being the norm they are worse off. That is
understandable because they are left behind and others have benefited
from it. In the MoD memorandum it explains that "Improvements
to pension schemes are not applied retrospectively as to do otherwise
would make any worthwhile improvements unaffordable" If a
particular pensions reform could be made retrospective at a cost
which was not unaffordable, would you consider doing so, if you
could?
(Dr Moonie) I am trying hard to think of an example
of that. If you look at the past, small marginal changes have
been made. It is reasonable to say that where the cost is very
small you could look at it. It seems terrible always to come back
to money but, at the end of the day, resources are finite, and
every decision that is taken carries an opportunity cost for something
else. If you spend it on one thing you cannot spend it on another
thing. That applies to pensions as it does to everything else.
Our government has spent a great deal of time and money on improving
the general position for pensioners. Were I given a choice, I
would still say that is the appropriate way in which to do this.
36. I realise you have not got far to manoeuvre
with this and we want to be fair, but is there a figure that says
this is unaffordable and you cannot afford to do it?
(Dr Moonie) I cannot give you a specific figure, much
as I would like to. As I say, we are always prepared to look at
marginal changes; but in general, particularly if this crossed
other public sector schemes, the costs multiply so dramatically
that they very rapidly become unaffordable.
37. I feel sorry for pensioners who have been
caught out through non-retrospection.
(Dr Moonie) So do I.
38. Is there any way that you can deal with
their grievances, or is it just saying, "Hard luck, there's
nothing we can do"; or is there any way in which they can
be considered?
(Dr Moonie) There are very few specific ways, given
the strictures that apply on us in which that can be done. We
can listen sympathetically to what is said; we can make small
changes. For example, this year we managed to upgrade the war
widows' pension for lower level other ranks to the NCO level.
It was a very small change, I have to say, but it was not made
retrospectively, no. We can make changes, but they tend to be
prospective rather than retrospective. Retrospection is a rule
which all governments have looked at very, very severely indeed.
I try to maintain very good relationships with my pension societies,
war widows and other groups. A sympathetic ear and a soft word
turneth away wrath. Not always, but one does one's best in what
can be very difficult circumstances. I have every sympathy with
them, but the government has decided that a line will be held
and the line is held.
Chairman
39. If we could find some examples of retrospection
and then you can write to the Treasury and point out the anomalies
of their own interpretation.
(Dr Moonie) I am not going to use the phrase "lost
causes", but difficult causes have always attracted me. I
would be happy to give it my best shot, but with no real expectation
of success.
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