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Mr. Swayne: I draw the attention of the House to my entry in the Register of Members' Interests. The Secretary of State will be aware that greater use is being made of reservists. Their pay is abated in the same way as that of other servicemen, but they do not receive the pension. The Ministry of Defence makes generous arrangements to pay the pension contributions of reservists while they are mobilised, but what consideration has been given to making the benefits of the scheme available to those who have no pension arrangements to which the Ministry can make contributions, or who are unemployed?

Mr. Hoon: That is a perfectly proper question and, given the hon. Gentleman's distinguished contribution to the armed forces, it is right that he should raise it. Indeed, it was a question that I raised in preparing for the debate. The difficulty, as I hope he will accept, is that it is unlikely that the number of hours that most reservists give in service during their careers as reservists would make a realistic contribution to what is, in any view, a generous occupational pension scheme. Even if the reservists paid the contributions themselves it would be unfair on them, as they would be making only very modest contributions towards—to be frank—a very modest pension. Given the complexity of extending such an arrangement to reservists, it was not thought appropriate to do as the hon. Gentleman suggests.

The second important aspect of the scheme is that we have increased the maximum period for pension accrual to 40 years, which will address the current concern that long-serving service personnel cannot earn pension benefits beyond 34 years for officers and 37 years for

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other ranks. The change also reflects the desire of many for longer working lives to allow them to make better provision for retirement. At present, that affects a relatively small number, but in the longer term it will allow us to reward longer working lives, consistent with the Government's overall approach to that issue.

Thirdly, we shall retain unchanged the current career pension age of 55. For those who leave before that age, we propose to defer the payment of preserved pensions from age 60 to age 65 in both the new and the current scheme, while protecting benefits already earned. That reflects the increased costs caused by people living longer, which all pension schemes have to address.

Mr. Brazier: I am most grateful to the Secretary of State for his courtesy in giving way to me a second time. My earlier point was precisely that the overwhelming majority of armed forces personnel do not serve until the age of 55. They will not come into the full pension scheme until they are 65, whereas comparable groups—the police or fire officers—can receive a pension at 55. That is a major reduction in the terms of service of our armed forces.

Mr. Hoon: I do not think that is entirely fair when we compare the existing arrangements. To repeat in part my earlier reply: someone who joined the fire service or the police force and served a full career, sufficient to earn the full pension, would have had a single career and would retire at 55 expecting, not unreasonably, a full pension based on that full career. The hon. Gentleman knows from his experience that that is not the position for the great majority of people who join the armed forces. Indeed, the educational and training arrangements that we are currently developing are designed to recognise the fact that even after 22 years' service, someone leaving the armed forces at 40, or in their early 40s, will be looking for a second career. We want to improve their educational qualifications to ensure not only that their second career is fulfilling but that they recognise that it is part of their whole career pattern—from the start of their working life until they retire. Although I accept that at first glance there appears to be a difference in approach, there is no difference in principle.

Pension scheme members in both the public and the private sector contribute to meeting the costs of the scheme. Companies such as Rolls-Royce, BAE Systems, Sainsbury and Tesco have all taken action in the last 12 months either to increase member contributions or to reduce the level of pension benefits on offer. More generally in the public services, the normal retirement age will in most cases be deferred to 65 to help deal with that issue. It therefore follows that, consistent with the Government's broader policy on longer working lives, it is right to introduce a slightly later pension age for those spending relatively short periods in the armed forces. The rationale for that is that a new entrant to the new pension scheme from April 2005 can, on average, expect to benefit more from a longer working life than their counterparts on the current scheme, and should thus bear a greater share of the cost.

The Defence Committee recommended that the Ministry of Defence should consult armed forces personnel about the timing of the change in the age for the payment of preserved pensions. Just as service

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personnel benefit from increased longevity, so those benefits have significant consequences that cannot be overlooked. It is difficult to make the case for excluding service personnel from the general policy of encouraging longer working lifetimes and increasing public service pension ages. However, the special circumstances of long-serving personnel, who now complete at least 18 years' service, have been recognised by our decision to pay early departure compensation from the age of 40 and by our retaining the normal full career pension age of 55.

To address the point made by the hon. Member for Canterbury (Mr. Brazier) directly, essentially what is being preserved is the recognition that many who join the armed forces anticipate that their career will lead to a new career in their early 40s, so at that point they will have both a lump sum payment and an income stream, and the possibility of a further career leading, I hope, to a pension from that further career as well as the lump sum and pension from their service career. On balance, that seems to be a very favourable arrangement.

The fourth principle is to provide benefits for unmarried partners who can demonstrate that they are in a substantial relationship. The scheme recognises the wider changes in society and the lifestyle preferences of those who are already serving and those whom we seek to recruit. As with other pension schemes, the range of criteria to determine whether a relationship is substantial includes evidence of dependence, such as a joint mortgage and other shared financial assets, and a shared responsibility for children, if appropriate.

Mr. John Wilkinson (Ruislip-Northwood) (Con): Will the Secretary of State make it absolutely plain what Her Majesty's Government's attitude is to single-sex partnerships and to applying the same compensation and pension arrangements to bereaved partners in such instances? Many of us find that a very perilous path, both on ethical grounds and given the very temporary nature of many single-sex relationships.

Mr. Hoon: I shall take the hon. Gentleman through my reasoning: once it has been recognised that the Government should compensate those who choose to live together but are not married—understandably, there was a considerable, vociferous campaign in the House to recognise that, not least before the start of the most recent conflict—and we have recognised heterosexual couples who choose to live together without marrying, it must necessarily follow, unless the hon. Gentleman can persuade me of some legal reason otherwise, that those of the same sex who choose to live together have to be recognised on the same basis. I cannot see a distinction between the two groups that would be sustainable either in law or, frankly, in fairness. If the hon. Gentleman has a way to make such a distinction, I should be delighted to it hear it.

Mr. Paul Keetch (Hereford) (LD): I apologise to the Secretary of State for missing the start of his speech, but may I tell him that many hon. Members will be grateful to the Government for that decision, particularly for the fact that it was announced before the Iraq conflict? Will any of the dependants of the British servicemen

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tragically killed in Iraq benefit from the change, which the Government announced before the war? If so, some of those people will benefit who would not have done so previously.

Mr. Hoon: I will not go into each case in detail, but that work can certainly be conducted. However, we introduced the change in the unmarried arrangements to deal with the threats from that conflict.

I have set out the general principles in the Bill. I want now to deal with how they will be implemented. The Bill will give the Secretary of State enabling powers to introduce the new schemes. I recognise that there is general concern about Bills with wide enabling powers, but that approach is the only practical way that the proposal can be made to work. It gives Parliament more involvement than there is with the current scheme, and is in line with other major public service schemes, such as those for the police and fire services and the national health service.

Mr. Jonathan Djanogly (Huntingdon) (Con): As has been identified by the Royal British Legion—supported by 113 Members through early-day motion 301—will the Secretary of State recognise that the proposed change in the standard of proof of entitlement to a disability award in favour of the MOD, from beyond reasonable doubt to the balance of probabilities, will lead to 60 per cent. fewer pensions being awarded? Will the Government deal with those concerns?


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