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7 Jun 2006 : Column 88WH—continued

Nepal is a developing country, recently torn by internal strife, which we fervently hope is coming to an end. Retired Gurkhas living there are Nepalese citizens living in their own country, and it is not surprising that some heart-rending instances of hardship can be found there. The Government and the British public support the valuable work of the Gurkha Welfare Trust, which aims to ensure that no such case goes unaided. The hon. Member for Colchester mentioned medical costs;
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we doubled Gurkha service pensions in 1997 so that retired Gurkhas could use some element of their pension to pay for their medical costs.

Bob Russell: Can the Minister give the figure that was doubled?

Mr. Watson: Not off the top of my head, but I will write to the hon. Gentleman and will go through the figures with him, if that is okay.

As I said, we support the aims of the Gurkha Welfare Trust, and in addition the Department for International Development will pay £30 million in aid to Nepal. We pay tribute to the Gurkhas’ courage and commitment on operations, and their hard work as valued members of our community in peace. In return, over the years, British Army service has afforded many benefits to thousands of Nepalese citizens—to Gurkha soldiers and to their families. In modern times, that mutually beneficial relationship has been possible only because of the unique status of the Gurkhas, in terms of their role in the British Army. Nepal has never been a member of the British empire or the Commonwealth, and Gurkha service to the British Crown has been enabled only by a succession of agreements with the Government of a sovereign and independent Nepal. That remains the case, and those agreements, to which the hon. Gentleman referred, date back to 1815.

After the Gurkhas’ distinguished record of service in the Army of the former British Indian empire, at the time of Indian independence in 1947, an unparalleled arrangement between the British, Nepalese and Indian Governments allowed Gurkhas to continue their service to the British Crown while remaining Nepalese citizens. On 1 January 1948, the predecessors of our current Brigade of Gurkhas transferred to the British Army on terms based on that agreement, which is the tripartite agreement that we have talked about.

The unique status of those who transferred means that they joined the British Army, served, and then retired as Nepalese citizens. As my predecessor said in an Adjournment debate secured by the right hon. Member for Maidstone and The Weald—which I think the hon. Member for Colchester and I both sat in on—it would have been irrational if Gurkha terms and conditions of service had not taken account of that. We were committed to discharging Gurkhas in Nepal where, with pensions that were very substantial by local standards, and often with valuable skills, they settled in retirement and made an important contribution to the economy of one of the world’s poorest countries. We employed the Gurkhas on the same terms on which they came to us: those of the Indian army of the day. Therefore, many of the terms and conditions were different from those of the wider British Army—for example, pay, pensions, soldiers’ terms of engagement and the officers commissioning rules.

Originally, many of these differences came about because the Indian Government, who continue to employ many Gurkhas, wanted equality between their Gurkhas and ours. In those days the Gurkhas were one of a number of forces serving under the British Crown but enlisted and based overseas, whose terms and conditions of service reflected this. British Gurkhas continued to serve as they had in the old Indian army: in formed
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Gurkha units consisting entirely of Nepalese soldiers and officers, except for a few British officers and specialists. That has always been considered essential to maintaining the Gurkhas’ formidable fighting spirit.

Bob Russell: Does the Minister know what the position is of those Gurkhas—whole companies on occasion—who serve in British units? A few years ago in Colchester, the Royal Scots were about 180 short and the gap was plugged with Gurkhas. Would those Gurkhas be treated as Nepalese volunteers or British soldiers in terms of pay, conditions and subsequent pensions?

Mr. Watson: I think I shall answer the hon. Gentleman’s question as I continue my speech. If I do not, he can pull me up on it again.

The Nepalese Government were, and remain, rightly sensitive to any suggestion that British Gurkhas were mercenaries, as has been said in other areas of this discussion. They saw exclusively Gurkha units serving in the British Army with their Nepalese identity preserved as reflecting on honour and prestige on the reputation of Nepal. Even now, Gurkhas usually serve as members of formed Gurkha battalions, squadrons or companies within the Brigade of Gurkhas, although there are notable exceptions. Although the working language of the Brigade is English, the structure enables the Nepali language to be spoken, and provides religious and cultural support to every Gurkha family.

There have been improvements in the intervening years. For example, in 1972, Gurkhas serving in the UK received a cost of living allowance that, added to their Indian army rate of pay, gave them broadly comparable take-home pay to that of their British counterparts, and when they served in Hong Kong they were paid an allowance that reflected prices there. Over time there has been a constant review of and improvement to support and services for Gurkhas.

However, the presumption has always been that Gurkhas would retire in Nepal, and their terms and conditions, particularly their pension arrangements, continued to reflect that understanding. When the time approached for the UK to hand over Hong Kong, through a gradual process, the Gurkhas were withdrawn from that country. The hon. Gentleman will know that that process ended on 1 July 1997, when what had hitherto been a force enlisted and based overseas was now predominantly based in the UK. It was only natural at that point that Gurkhas and their families would increasingly regard the UK as an alternative home to Nepal, and that their expectations and aspirations would develop accordingly.

In my view, it was inevitable that the terms and conditions appropriate to a force based in the far east would have to adapt to that change in circumstances. In evolving these terms and conditions, we have always sought to protect the unique identity of the Gurkhas and their relationship with their homeland, which the hon. Gentleman has talked about, and the presumption of their retirement in Nepal has remained.

Worldwide parity of take-home pay was brought in as part of a package of changes introduced in that great year of 1997. It included a new universal addition, which brought a Gurkha’s take-home pay—wherever he was serving—up to the same level as that
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of his counterpart in the wider British Army. Gurkhas were allowed to be accompanied by their families in UK, as was already the case in overseas stations such as Brunei, although under the tripartite agreement, that was limited to 25 per cent. of all personnel. At the same time, Gurkhas retained some privileges not available to other members of the Army, such as the traditional “Nepal long leave” of five months every three years at the public expense.

Some differences stemming from the original Indian army terms and conditions were retained because they were seen as more suitable for the Gurkha’s unique status as a Nepalese citizen. The Gurkha soldier was virtually guaranteed 15 years of service, which earned him a pension for life immediately on discharge—often at the age of 32, 33 or 34—and after that for his dependants. The Gurkha pension scheme provided pensions that are modest by UK standards but represent a substantial income, annually updated for inflation, in Nepal. Such an early payment of pension is not available to other members of the British armed forces. Over 80 per cent. of ex-Gurkhas, if they had been members of the armed forces pension scheme, would have returned to Nepal with only a preserved pension payable at age 60.

The Gurkha’s expectation of service depends on his progress through the ranks. A corporal would have to retire after 15 years, whereas a warrant officer class 1 would serve for 22 years. The 22-year notice of engagement in use for all ranks in the wider Army is only manageable because in recent years British junior ranks have tended to leave voluntarily if not promoted, sometimes after four or five years. Traditionally, Gurkhas serve for as long as they can, and it would not have been possible to offer them all 22 years’ service because that would have resulted in a stagnant, unmanageable manpower structure in the brigade’s exclusively Gurkha units, and it would have denied to many Nepalese citizens any opportunity of British Army service.

I believe our predecessors tried hard to get the balance right between the maintenance of traditional Nepal-facing terms and conditions and their assimilation, where appropriate, into those of the wider Army. However, since the move of the Gurkhas’ base to the UK and the progressive alignment of their roles with those of their counterparts in the wider Army, the differences between their respective terms and conditions of service have increasingly come under scrutiny, as they have today. The Government have responded to that in order to ensure that fairness is at the heart of how we treat the modern Brigade of Gurkhas.

Improved arrangements for Gurkha married accompanied service were announced in August. In 2003, seven Gurkha veterans had challenged many of the differences in their terms and conditions of service, particularly their different pension arrangements, by way of judicial review. The judges accepted that the differences were still justified because of the Gurkhas’ unique status, and that a full like-with-like comparison with the wider Army could not be made. The courts dismissed all complaints and subsequent appeals, although they did, exceptionally, warn that the 25 per cent. limit on married accompanied service should be reviewed.
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We have done that, and from 1 April this year, all Gurkhas with at least three years’ service will have the same entitlement to be accompanied by their families at their duty station as soldiers in the wider Army.

The immigration rules were changed in 2004 to make it easier for Gurkhas to return to this country on discharge from the Army. Successive Governments have maintained the policy that British citizenship is not automatically given in return for military service, but granted on grounds of residence, towards which such service might count.

Bob Russell: I appreciate that this is not a matter for the Minister’s Department, but for the Home Office, and I had discussions with his predecessor about it, but will he assure me that the Ministry of Defence is of the view that service to the Crown should count as residence, even when the soldier is serving overseas?

Mr. Watson: I think I can. If I cannot, I will clarify that by letter. I do not want to give the hon. Gentleman an assurance on behalf of another Department, particularly the Home Office, dare I say.

Both Gurkhas and Commonwealth citizens usually serve in our armed forces while maintaining their own nationality. Although the presumption of retirement in Nepal has been accepted by the courts as part of the unique arrangements for Gurkha service, ex-Gurkhas had always been able to apply to return to this country under normal immigration rules, such as under the work permit scheme. I think that that answers the hon. Gentleman’s point.

In 2004, we accepted that from the time the Gurkhas became based in the UK in 1997 they should be able to apply for settlement here in the same way as Commonwealth citizens leaving our Armed Forces. On discharge, they could count four years of their military service towards the residential qualification for indefinite leave to enter the United Kingdom and, subject to entry clearance, could settle here with their families. They could subsequently apply for British citizenship, if they wished to do so, under normal rules.

The Prime Minister announced the new Her Majesty’s forces immigration rule on 30 September 2004. We understand that virtually all Gurkhas discharged since the rule took effect have applied for visas to enter the UK. Those discharged since 1 July 1997 have until October of this year to apply. It became clear that more serving and retired Gurkhas and their families would be living in the UK than ever before, and the Government determined that the remaining differences in their terms and conditions of service, especially the Nepal-facing ones, should be reviewed. That is what we are doing now.

The hon. Member for Forest of Dean (Mr. Harper) made a point about the remit of the review. I shall give a bit of the context. A former Secretary of State, my right hon. Friend the Member for Ashfield (Mr. Hoon), asked in January last year for a comprehensive review of Gurkha terms and conditions. It is by far the widest-reaching review since 1948 and is examining every remaining difference between Gurkha and UK terms and conditions. Much of what I have said, inasmuch as it refers to Gurkhas’ current terms and conditions, may be affected by the review.

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We have consulted serving Gurkhas through surveys and focus groups, and we are in close touch at official level with the Nepalese Government. We have tried to be as inclusive as possible and have invited other interested parties, including groups representing Gurkha veterans, to express their views. The complexity of the review has proved even greater than we expected, and I welcome the support that we have had in ensuring that we have time to ensure that the review is comprehensive and wide-reaching. I hope to be able to report back to the House with the outcome of the review as soon as I can, and I take the matter very seriously. I want to be able to give good news to the House that will satisfy some of the aspirations that have been expressed today.

Meanwhile, I am pleased to say that we have been able to introduce some improvements in advance of the review’s final report. In addition to the immigration concession and improved facilities for married accompanied service, which were the two main concerns that were raised by the right hon. Member for Maidstone and The Weald, as everyone knows, the Gurkhas have been included in the national insurance scheme so that they can qualify for national insurance benefits, including the state retirement pension and the state second pension. From April this year, collective settlement of their income tax and national insurance contribution liability by the Ministry of Defence and the provision of free food and accommodation, offset by corresponding abatements of their universal addition, ceased, and Gurkhas will now see full details of their pay, tax and charges and be eligible for rebates of food and accommodation charges when appropriate in the same way as any soldier in the wider Army. Those improvements were widely welcomed by serving Gurkhas and the groups that represent them.

I have to emphasise that the review is focused on the terms and conditions of service for serving and future Gurkhas.

Bob Russell: I am getting a bit alarmed. Did the Minister say that the review is not historical and applies only to current and future Gurkhas? If it is not historical, the campaign that is being waged will have to be reinvigorated.

Mr. Watson: I ask the hon. Gentleman to hear me out and let me make my point. If he is not satisfied, he should come back to me again.

As part of the review, the Department is looking again at the pension position of Gurkhas back to 1 July 1997, when the Gurkhas first became a UK-based force. We remain of the view that the position of Gurkha
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veterans discharged prior to 1 July 1997 remains exactly as it was when the judicial review reached its conclusions. We maintain that their terms and conditions may have been different, but that they were not discriminatory. On the issue of veterans’ pensions, I remind the Chamber that it has been the long-held policy of successive Governments not to make retrospective improvements to public sector pension schemes.

The hon. Member for Dunfermline and West Fife asked whether we had estimated the cost of adding a retrospective element to the scheme for the time before 1997, back to the tripartite agreement of 1947. It would cost many billions of pounds if we were to do that, even before we accept that it would have repercussions in terms of precedent for other pension schemes in the public sector. There are good reasons for our not making retrospective changes for those who have already left under earlier pension rules, as that would make future improvements unaffordable. To depart from that rule for one group would inevitably cause others to demand the same treatment.

I recognise that that will disappoint the hon. Member for Colchester and those who retired before 1 July 1997, particularly those distinguished former Gurkhas who handed in a petition to Downing street on 22 May. I acknowledge the strength of feeling that this subject and other veterans’ issues generate among certain Gurkha ex-servicemen’s groups, although we have tried hard to explain the situation to them, including by sending MOD officials to hold briefings in Nepal.

I hope that I have provided some reassurances that the Department continues to treat Gurkhas with the significant respect that they earn and deserve. To reflect on the more recent period, in 1997 the brigade became a UK force, in 2003 we reviewed the responsibilities for Gurkha families and later in 2004 we changed their immigration status. I hope to align their terms and conditions further with those of the British Army. We are on a journey with their terms and conditions and I hope that it is a positive one.

I know the hon. Gentleman will be disappointed with my last point. There will always be people who think that we should do more and that we can do more, but I believe that our treatment of Gurkhas, Gurkha veterans and their dependants has been and remains both fair and reasonable under the circumstances.

10.38 am

Sitting suspended.

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Hull to York Transport Gateway

11 am

Mr. Graham Stuart (Beverley and Holderness) (Con): I am delighted to have secured this debate and to have an opportunity to shine a light on and raise the profile of the corridor from Hull to York—often known as the 1079 corridor because of the A1079, which unfortunately is famous more for its accident record, congestion and failure to support a powerful and dynamic growth area than for any other reason. I am grateful to the Minister for being here today and I am glad to welcome her to her new post.

The issue is of growing importance to many of my constituents in Beverley and Holderness, in respect of not only car transport but transport of freight and public transport. First, I plan to discuss the economic and social transformation that has taken place in the region over the past decade and the growing demand for a viable, expanding transport infrastructure that is commensurate with and supportive of that growth. I plan then to concentrate on two specific issues: the A1079, which runs between Hull and York; and the proposed reopening of the Hull to York railway line, including the section that no longer exists between Beverley and York. I shall then focus on the relatively poor funding that the East Riding of Yorkshire receives from central Government for local transport and conclude by making a plea to the Minister to work on correcting all those injustices.

The East Riding of Yorkshire is performing strongly. The local economy is doing well, business investment has increased significantly in recent years and more people are moving to the area than ever before. Population growth in the region is now the second fastest outside London. People are attracted to the area by its relatively high standards of living, excellent leisure opportunities and an education system which, despite being one of the lowest funded in the country, continues to achieve year-on-year improvements under the guidance of the East Riding of Yorkshire council.

Meanwhile, the two cities of Hull and York remain powerful economic regional players. Hull is currently one of the largest cities in the country, with a population approaching 330,000. It hopes to take strides towards becoming one of the country’s top 10 cities. It is recognised as an international leader in telecommunications and is an important gateway to mainland Europe, with a successful port that caters for more than 1 million passengers a year. The port of Hull on the north side of the River Humber is a regional priority and has had more than £94 million-worth of investment in the past 15 years alone. It is the leading timber port in the country, and it is estimated that up to 16,000 jobs have been generated in Hull directly from the operation of the port itself or from the presence of local businesses that have established themselves in the area because of relatively easy access to the continent.

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