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Mr. Caplin: I thank the hon. Gentleman for his comments. I shall deal with his remarks in the context of my contribution, as we have only a short time for this debate.

Most widows' and widowers' pensions come into payment only when the recipients are in their 70s, so little is likely to be saved by introducing what would, in any case, be an entirely arbitrary age point. The other point about the proposed amendment is that it is just not possible to ring-fence the armed forces on that issue, which brings me to the read-across point made by the hon. Gentleman. We have given that question careful consideration and I have revisited it in the light of the clear concerns expressed both in this place and in the Lords. Any concession to the widows and widowers of service personnel would inevitably read across to the other public service schemes, where individuals frequently leave service, for all kinds of reasons, before normal retirement age.

Against that background, it is disappointing to say the least that their lordships have not heeded the clearly expressed will of this House, so I invite the House today to send a strong signal to the Lords on the matter. The stakes could not be higher. I must make it clear that the Bill will not be able to proceed if the Lords insist on an amendment on post-retirement widows' and widowers' benefits. The Government have no provision within their programme for the £300 million to £500 million that might be involved, and could not justify making such provision.

This is but one of a number of equally deserving pension legacy issues, which affect not only the public services, but many people who were employed in the private sector. To address them all would cost many billions of pounds. Successive Governments of all persuasions have concluded that a remedy would be unaffordable.

If their lordships were to insist on their amendment, or something like it, on Wednesday, there would be no realistic chance of the Bill coming on to the statute book. In that case, the significant improvements to the pension scheme, which have long been sought by serving personnel and are strongly supported by the chiefs of staff, and also by many veterans organisations, including the Forces Pension Society and the Royal British Legion, would be lost; as would the benefits under the new compensation scheme, of lump sum payments and a new deal for the more seriously disabled. I cannot believe that the hon. Member for Aldershot (Mr. Howarth) would welcome that outcome, even though I know that some of his Opposition colleagues have shown no such reservations, as we saw the last time we debated the matter.

Given the number of times that we have debated the issue, I shall not take the House through all the arguments again. The Government's strong opposition
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to the proposal is clearly on the record: the cost implications of the amendment are too far-reaching to allow any Government to make such a change. Furthermore, despite what the hon. Gentleman said during our last debate, I doubt, in the very unlikely event he were standing in my place, that he would take a different view. Those who continue to support the amendment must face up to the very real and substantial cost implications of the change.

No one has grounds for saying that the Government have been insensitive to the needs of our older veterans or widows. Indeed, my noble Friend Lord Bach announced in the Lords on 8 September a tightly-defined concession for the pre-1973 war widows, reflecting the very special circumstances of that group of generally elderly and relatively poorly off war pensioners. That concession was targeted on that deserving group, which the War Widows Association has regularly highlighted for special treatment, and will cost the Government more than £20 million. However, that is as far as we can afford to go and further than any previous Government have gone.

Mr. William Cash (Stone) (Con): Does the Minister accept that most of his argument turns on cost? Would he not care to consider the fact that, for example, the Public Accounts Committee has made some pretty trenchant remarks about some failures in relation to Ministry of Defence costings and accountancy? Therefore, bearing in mind that the sum of £300 million to £500 million may seem a lot by comparison with the issues and principles at stake, it pales into insignificance when compared to the very considerable amount of inefficiency that has been occasionally highlighted by the PAC, although I should like to add one thing—

Mr. Deputy Speaker (Sir Michael Lord): Order. That is sufficient for one bite of the cherry.

Mr. Caplin: I thought that we were just getting to the interesting bit, Mr. Deputy Speaker.

I say to the hon. Member for Stone (Mr. Cash) that the MOD has a defined budget, and we rightly have to live within it. The measure would involve extra expenditure, and there is no provision for it in our current thinking. Of course, we take into account what the Public Accounts Committee has said, and we had a very lively debate on procurement just 10 days ago in this House, when all those issues were properly and fully examined.

I do not believe that the Lords amendment can achieve what its proposer is seeking. There were no pensions before 1975 for those with less than 22 years' service as another rank and 16 years' service as an officer. In other pension schemes, arrangements were even less generous, as no pensions were payable with less than 40 years' service. The measure would therefore benefit very few of those who may have decided to delay marriage out of deference to the constraints of service. We would expect the main beneficiaries to be those remarrying later in life after either the death of the spouse or divorce. There can be no compelling case for the special treatment of those in that group who are in the same position as many others across the public services.
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Overall, I strongly believe that the Government have put together a very good package of pensions and compensation benefits for our armed forces. The improvements to the pension scheme have been made in response to concerns about the current arrangements that have been voiced over the years by serving personnel, including many former Chiefs of the Defence Staff and the ex-service community.

I hope that the Lords will not insist on their position, but let us just consider what is at risk if they do: a pension scheme based on final salary, against the general trend seen outside; a very significant improvement to widows' and dependants' benefits; the extension of benefits to unmarried partners, including same-sex relationships; the introduction of common terms for officers and other ranks; and a new deal for the more seriously disabled, significantly improving their benefits.

As I have said before in the House, I am in no doubt that the new pension and compensation schemes are a good deal for service personnel and that it would be quite wrong to tear up the new schemes now and start again, thus asking the armed forces to wait yet longer for proper, modern employment terms. I am therefore again asking the House to send a clear signal to the House of Lords about the wishes of the elected House on this matter. I hope that, in the light of the debate and in the knowledge that we could not allow the Bill to proceed if it contained the Lords amendment, the Lords will agree that it is now time to accept the will of this, the elected House, and allow the Bill to proceed to Royal Assent later this week. I therefore ask the House to reject Lords amendment No. 2C.

Mr. Gerald Howarth (Aldershot) (Con): First, may I point out that we have only a relatively short time to debate the amendment? That has nothing to do with the Opposition; the Government have set an arbitrary limit of an hour for the debate. I hope that that will not result in those who wish to participate being unable to do so.

After months of detailed deliberations on the Bill in the House, in Committee and in the other place, the Government now seem likely to get their Bill pretty much in the form that they originally intended. It is disappointing that they have proved unwilling to consider any form of compromise on a number of key issues, including the burden of proof, on which the Select Committee on Defence offered a very sensible compromise solution, the reduced early departure payments scheme and the refusal to allow our servicemen and women to earn a full career pension.

Sadly, only on the issue of independent oversight did the Government accede to Opposition demands by giving an oversight role to the Armed Forces Pay Review Body. Of course, we welcome that. As the Minister said, the only outstanding issue between the two Houses is the provision for the payment of a widow's pension to the oldest of those widows of post-retirement marriages whose spouses' service took place before 1978.

I was very interested to hear the Minister produce the figures that he used, because he produced them completely out of the air—there was no back-up or substance to them whatever. He does a disservice to the House in so doing. The Government Actuary's
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Department and the Ministry of Defence refuse to release the assumptions on which those costings are based, so it is very difficult to make accurate projections of the financial cost of the amendment. However, as the Minister knows, the Forces Pension Society has done some work on the issue, and it estimates that the provision would cost in the order of £7 million. I will come in a moment to the read-across to other Departments. For the Minister to suggest, as we sit here in the week of the Armistice commemorations, that these people are somehow not particularly deserving and that there ought to be a read-across to every other Department will, frankly, not wash.

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