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Mr. Brazier: I am so grateful to the hon. Lady for giving away again. Before she leaves that narrow point, I emphasise that there is an additional problem. The Royal British Legion and others asked for a unified veterans agency and suggested that it should be based in the Department for Work and Pensions. However, the whole mechanism, including medical records, is now being handled by the employer. In no other profession is all the relevant medical information held by one of the two parties.
Rachel Squire: The hon. Gentleman makes a valid point. Recent press reports have suggested, for example, the possible use of secret vaccines. The medical records of armed forces personnel, which they need to support a claim, are held by their employer. Under the circumstances, is it reasonable to ask personnel to show that their condition has been caused by service? What difficulties will they encounter if, through lack of information—for example, about secret medical records—they are unable to prove that their condition was caused by service?
The Committee also raised anxieties about the proposed income streams under the compensation scheme; it describes them as "mechanistic." Injuries will affect different people's earning potential in different ways. Although the proposed income streams are supposed to compensate personnel for loss of earnings, they are related to specific injuries rather than the calculation of an individual's loss of earnings. For example, someone who suffers the loss of one eye will receive 50 per cent. of their salary as an income stream under the compensation scheme, whatever the effect on earning potential. However, someone who suffers from two frozen shoulders, with significant continuing disability, will receive no income stream.
The Government told the Committee that a more flexible approach, linked to an assessment of loss of earnings
- "would not be appropriate to a no-fault scheme where the aim is to deliver consistent, fair and reasonable outcomes, within a reasonable timescale and cost-effectively and which can be reasonably understood and administered."
The Committee feels strongly that communications with personnel remain unsatisfactory. It described the original reviews as
- "dogged by delay and incompetence"
- "not accept that there has been inadequate consultation".
- "consult on how and to what timescale the higher pension age and any associated benefits could be extended to existing employees".
- "how and to what timescale"
The time scale for the implementation of the new schemes is very short, and service personnel will have to make a complex choice between the existing pension scheme and the new one introduced by the Bill by April 2007 at the latest. We hope that the Government will produce individual benefit statements to enable service personnel to make that choice, but at the moment they do not seem to have the computer systems that can produce such statements, nor do they know when they will have such systems. The Government do not know how to target individual personnel reliably to make sure that they are aware of the choice that they have to make, and that they are informed enough to make it.
I apologise for the length at which I have spoken, but the Defence Committee has given a great deal of time and priority to this matter, and will continue to do so. In conclusion, although we in the Committee feel that the Government's proposals are better than those which we first examined early in 2002, we are still not happy with the overall structure in which the schemes have been conceived. We are very unhappy indeed that details of the early departure scheme, which we felt should have been available for this debate, are still not available. We are worried about the implementation of the schemes and about the fact that, after numerous delays, we are now working to a tight parliamentary time scale.
The Committee's comments on the schemes are intended to be constructive. It is important that the schemes that are introduced work, and are seen to do so. The armed forces devote intense commitment, and sheer energy of work, to protecting their country, and they should receive pension and compensation benefits that match the importance of what they do. The Government do not seem to have considered what the armed forces deserve and, bluntly, the Committee believes that the current proposals fall far short of that.
2.52 pm
Mr. Colin Breed (South-East Cornwall) (LD): It is a great pleasure to follow the hon. Member for Dunfermline, West (Rachel Squire), and I thank the Defence Committee, through her, for its tremendous work. My party shares many of the concerns that she quite properly raised. I hope that when the Bill goes into Committee we will be able to do justice to all the
concerns that the Defence Committee has so thoroughly investigated, and that in Standing Committee we will be able to argue equally forcefully for the changes needed to improve pension and compensation arrangements.We all acknowledge the tremendous contribution that our armed forces have made over many years, not least in the past year or so. They deserve pension and compensation arrangements that demonstrate the House's commitment to them, just as they demonstrate commitment to their country. Overall, we welcome the main substance of the proposals, including the increase in death-in-service benefit and the extension of dependence benefit to unmarried partners. However, I, too have concerns about quartering arrangements. I live in a constituency that is very close to the naval establishment at Devonport and have often seen emergency housing requirements caused by the splitting up of marriages of armed forces personnel. That places tremendous pressure on the local authorities. There must be a clear system, and the Bill may trigger the development of one by the Government.
The proposals aim to bring armed forces pensions into line with other public sector pensions, which is long overdue, but they do not go far enough. Many examples of their shortcomings have been given this afternoon, not least of which is the inability to reach the two-thirds target. There are ways in which that could be achieved, but the Ministry of Defence feels that it is not important enough to include it in the Bill. That may affect only a small number of people, but it is an important aspect of these pensions if we want to make them comparable to other public sector pensions.
Recruitment has been mentioned. I accept that quite a lot of young people, when they enter the armed forces, or employment generally, do not immediately look at their likely pension arrangements, but far more young people are doing that today than when I first went out to work 30 or 40 years ago. Young people going through HMS Raleigh in my constituency might not immediately look at what they will be paid under that part of their benefits, but far more are now aware of pension arrangements, not least because pensions are much more newsworthy, and some of those young people may have seen their parents suffer from poor pension arrangements. We ought not to ignore the fact that pension arrangements will have at least some effect on those who want to join the armed forces.
I was quite surprised to learn that there has not been a full review of the pensions and compensation scheme for 30 years, which seems an extraordinarily long time, although I recognise that there have been changes during that period. In 1973, armed forces pensions were very much in the top slice of public sector pensions—among the very best. During that 30-year period, however, it is clear that they have slipped considerably towards the bottom of the scale. That must be because of an inability to keep pension provisions constantly under review.
I want to couple to that matter the availability of financial advice, which has already been raised this afternoon. I suspect that 30-odd years ago, although perhaps no one considered them very much, pensions were much more simple—an obvious benefit in a remuneration package. Today, with the complexities of tax and pension arrangements generally, almost everyone, even if they have a reasonable understanding
of financial matters, requires independent financial advice. We have seen the mis-selling of pensions only too recently.The MOD owes a duty of care and responsibility to its employees to provide some means by which they can have independent financial advice. There are various ways in which that can be done. I hope that we can explore some of those in Committee, and that the MOD will realise that that must be part of what it offers its employees. After all, some of them will be taking decisions on their pension arrangements that could significantly benefit their later lifestyles. Independent advice should be available to them during that year or so of important decision making, especially bearing in mind that they do not have the same sort of representation as many other groups.
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