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Mr. Breed: I endorse all the comments of the hon. Member for Aldershot (Mr. Howarth) and the hon. Member for Dunfermline, West (Rachel Squire).
I welcome the Minister's announcement that the pay review body's remit will be wider than it has been hitherto. Many of us believe that it is a pity that that was not the case some time ago, as it would then have been able to comment on the very scheme that we are now discussing. If the MOD had allowed that improvement to the remit of that body, we would have had the benefit of its comments. Nevertheless, the improvement is welcome.
On cost neutrality, I mentioned on Second Reading the fact that it was restricted to the pension scheme rather than applied to the whole remuneration budget. Now that the review body is considering remuneration, pay and pension, it is even more sensible to consider cost neutrality within the wider context of the total remuneration budget. At present the application of cost neutrality is so restricted that those strictures bear heavily on existing pensioners who will pay for some of the benefits of others.
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I also welcome the fact that the layout of subsections in new clause 2 indicates clearly what the remit of the review body would be. From what the Minister has said, however, it seems that the MOD will still decide what matters the pay review body will consider, how and when it will do so, and even whether it is allowed to do so. It therefore strikes me that it does not have much independence, and the MOD will still be very much in charge, which diminishes the role that the review body can play. For instance, if the Select Committee decides in a year or two to reconsider the matter, will that pay review body be able to give its views, or will the MOD say, "Sorry, you must wait five years to give an opinion". That seems to diminish the value of what the ministerial statement was encouraging us to think was happening last week. This opportunity to debate new clause 2 is therefore extremely valuable.
The leaflet is helpful, although some might say that aspects of its wording are premature. It still gives no indication, however, as to where a serviceman might go to get independent financial advice. It may be that a serviceman will have an independent financial adviser. Where will an IFA get the right answers to his questions to enable him to give proper advice to his client? Such decisions may be very significant, and must be made well in advance of the implications taking effect. If they are unable in any way to gain the information necessary to make the correct decision, there is at least the opportunity of a further round of mis-selling. It will not be mis-selling in the sense that people are—deliberately or not—sold something that is not appropriate to them, but in the sense that the adviser had been unable to secure all the relevant information to ensure that the client got the right advice and was not in any way restricted or ill advised in terms of the decision to change to the new pension scheme. That is an important issue, and I welcome the leaflet, but I am not certain of the implications if somebody says, "That's fine, but I want precise information about my individual circumstances." Where will they go for that information, and how will that be addressed?
Mr. Hancock: If the House agrees with the Defence Committee that the armed forces deserve a pension scheme that recognises the unique contribution that armed forces personnel make to the life of this country, it must also accept the advice that the Committee attempted to give to Ministers—that they would have to do more work on their proposals if best practice rather than cost neutrality was going to be the starting point for a review. Those words were spoken in the Defence Committee, by me and others, as far back as two years ago. Our report was published on 9 May 2002. It is a great disappointment to me that the Bill fails to grasp the point that we were making.
2.30 pm
I congratulate the hon. Member for Aldershot (Mr. Howarth) on pursuing the issue in his new clause. I hope that—unless the Minister proves extraordinarily generous—he does not withdraw the motion, thus depriving us of an opportunity to divide the House. New clause 2 is fundamental to the fulfilment of the principles spoken of in the Defence Committee's comprehensive review of the armed forces pension scheme. In its present form, the Bill does not address those principles. The new
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clause would allow the review body to take account of changed circumstances and reflect what happens in the real world, rather than waiting for five years.
The Minister said that the body reported to the Prime Minister, not the MOD. What goes to the Prime Minister, however, is not a public document. The Prime Minister can make a personal decision on whether to act on it. A report on something so fundamental should be presented to the House so that it can decide whether there should be structural changes in the way in which the armed forces are compensated for accidents, death or illness, or in their pension arrangements.
New clause 2 would enable us to help armed forces widows—who spoke to the Minister and others yesterday about their problems, and their dissatisfaction with what has been done by successive Governments. The hon. Member for Aldershot was right to acknowledge that this is not just a one-Government failure, but a traditional failure of all Governments to recognise the difficult position in which many widows find themselves. Most Members of Parliament would agree that it is unacceptable, yet we choose to do nothing about it. The new clause would allow it to be examined and ruled on not by the Prime Minister but, properly, by the House.
I was pleased to hear from the hon. Member for Dunfermline, West (Rachel Squire), who, as a member of the Defence Committee, listened to the evidence. It took a long time for the Committee to hear it all. We did not rush our review; the Committee is not renowned for its speed when it comes to matters as important as the pension and compensation rights of members of the armed forces. We heard a huge amount of evidence from all who could possibly be seen to have an interest. In her speech, the hon. Lady acknowledged that there were still improvements to be made. I sensed a more than willing acceptance that new clause 2 would help rather than hinder the Bill. I hope that the Minister will recognise that it is not a wrecking proposition, and is intended not to harm the Government's case but to cover matters that the Bill does not cover properly.
Many of the problems of service personnel and their families will not go away, and we need a speedier vehicle to deal with them than we have at present. New clause 2 could provide it, and the Minister should welcome the new clause with enthusiasm. I hope that he takes a slightly more open view of it than he took, regrettably, of new clause 1, which he refused to consider. I also hope that the whole House will accept that if we are to live up to the expectation that we all claim to have that our servicemen and women should have proper pension and compensation schemes, it should not take five years to change aspects that are wrong.
A flexible approach should be taken, and issues of cost neutrality should not be the driving force. The hon. Member for Aldershot explained very eloquently that there would be a reduction in the overall cost to the MOD. On what may have been the first occasion on which the Minister was allowed out of the MOD on his own, he addressed the Defence Committee on this issue. He dealt with a complex and difficult case remarkably well for someone who had been in his post for only a short time. He, I hope, recognises that all is not well in the armed forces, that we need to get it right, and that
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the Government's proposed scheme will give rise to widespread concern and dissatisfaction.
The way in which we are informing service personnel about the proposals is not adequate. I do not think that the leaflet goes anywhere near appreciating the complexity of the issues, and the MOD does not even provide personnel in the scheme with a detailed analysis of how they would benefit if they changed their arrangements. Does the Minister dispute that? I should welcome an intervention from him explaining how people in that position can obtain definitive details of the benefits that they would lose and those that they would gain, but I do not believe that the MOD can provide such details.
The Government's proposals lack clarity. New clause 2 gives us an opportunity to do things properly by allowing the House to examine recommendations submitted to it.
Hugh Robertson (Faversham and Mid-Kent) (Con): I refer hon. Members to my entry in the Register of Members' Interests.
I support the new clause, although I shall probably speak in its favour much less eloquently than the hon. Member for Dunfermline, West (Rachel Squire)—who, as usual, spoke extremely well—and the two Liberal Democrats.
We should be in no doubt that one overriding factor ought to influence our deliberations. Our armed forces are wholly unlike any other part of society, for a simple reason: they are expected to fight and, occasionally and regrettably, to die for their country. It is perfectly reasonable for them, in return, to expect security in their retirement.
Sadly, we live in an age in which members of the public distrust Government, and I am sorry to say that members of the armed forces distrust the MOD. I do not particularly like that, but it is a fact of life. That is why we need the form of independent governance offered by new clause 2. Although I welcome the Government's proposals, they do not go far enough. I therefore hope that the Minister will accept the new clause.
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