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Mr. Jones:
Does not the right hon. Gentleman think it would be very unfair if, for example, we were to pay the increase now, but the estate of somebody who went to meet their maker a week before or a year before did not have a claim on it? It is not as simple as he suggests. Moreover, as I mentioned, members of the armed forces who served after 31 March 1973 were given the option to buy in their previous service. Would it not be unfair now to extend the enhanced benefits to widows of husbands who had not taken steps to acquire that
financial improvement? Compensation would be difficult. Would we have to set up a scheme to pay back those who had chosen to pay the additional contribution?
Post-retirement marriage is another problematic example that dates back to the Social Security Act 1975, which had implications for the AFPS and many other schemes. The Act required occupational pension schemes to introduce a pension for widows who married their husbands after they had retired from service. Provision was made in the armed forces pension scheme in 1975 to comply with the Act, but only widows whose husbands served after April 1978 benefited, and only service after that date was used to calculate the pension. For widows, the change was not introduced until April 1989, and then only for service from that date.
The one-off extension of entitlement to all current and deferred AFPS pensioners would, the right hon. Gentleman will be pleased to hear, cost about £50 million. Again, there would be a crossover effect on other public service schemes.
The other issue that affects pensions is commonly referred to as the pension for life. Following a change of policy in 2000, widows and widowers have been able to retain their pension on remarriage or cohabitation—a point that the right hon. Gentleman made. However, the change was extended only to those individuals who had not already remarried or cohabited. The changes that were made in 2000 were exceptional and for a special group of war widows, and they were not extended to the widows and widowers whose spouses had died for reasons unrelated to service life. That was a defined group of individuals to whom the right hon. Gentleman referred.
In 2008, the Government Actuary’s Department conducted a detailed study of the costs of providing pensions for life for non-attributable widows, and found that the cost of providing pensions for future service would be about £14 million a year. That would gradually decrease, as the right hon. Gentleman suggested, as the number of AFPS pensioners fell—as they got older and the grim reaper took his toll. Using the rates in the 1975 AFPS, the retrospective costs would be about £70 million, but they might be as high as £350 million for the armed forces scheme. I asked for the figure throughout the public sector, and I shall be quite happy to share the information with the right hon. Gentleman afterwards. It would be about £3 billion, although I accept his point that, as years go by, it will decrease. Again, however, such a measure would be unfair.
No Government have retrospectively changed pension entitlements under the schemes. It is worth looking at the similarities between the provisions of the Bill and the changes that were introduced in the Pensions Act 1995—being an anorak, I spent last night trying to see the crossovers. The main clauses before us were tabled during the passage of the 1995 Act in order to do exactly what the right hon. Gentleman wants to do today. New clauses 11 to 14 were introduced by Mrs. Ewing, a Scottish Nationalist Member at the time, and they were voted on. The right hon. Member for Richmond, Yorks (Mr. Hague), who was a Minister in what I think was the Department for Social Security in 1995, resisted new clause 11, and it is worth noting what was said in respect of the other new clauses:
“With this, it will be convenient to discuss also the following: New clause 12—Post 1973 war widows— ‘Notwithstanding any other enactment, a widow awarded a Forces Family Pension (Attributable) shall receive that pension for life.’. New clause 13—Post 1973 war widows (No. 2)— ‘Notwithstanding any other enactment, a widow in receipt of a Forces Family Pension (Attributable) shall receive that pension for life.’. New clause 14—Post-retirement marriage: service widow's pension— ‘Without prejudice to benefits already available under the terms of the Armed Forces Pension Scheme for widows of members of Her Majesty’s Armed Forces with service beyond 6th April 1978, no widow of a member of Her Majesty's Armed Forces shall be disqualified from receiving a full pension under that scheme in relation to her late husband’s membership of Her Majesty’s Armed Forces by virtue of the fact that the marriage occurred after he had retired from Her Majesty’s Armed Forces, provided that that marriage was before his 65th birthday and had lasted for at least three years.’.”
The new clauses were eloquently proposed by Mrs. Ewing, and the Minister replying, the right hon. Member for Richmond, Yorks, said:
“New clause 11 seeks to make an exception for one group of public service pensioners—the widows of ex-service personnel—by backdating an improvement to the armed forces pension scheme that was made in 1973.”—[ Official Report, 4 July 1995; Vol. 263, c. 248-49, 258.]
The provision of pensions for the widows of those who married after the husband had left the scheme was one of a number of major improvements to public service pension schemes made in the 1970s, but each of those improvements was introduced at a fixed and current date; none would have been affordable if it had been extended retrospectively to recognise all previous service. Sir Tim Spicer, the MP for Dorset, I think it was— [ Interruption. ] Sir Jim Spicer, the MP for Dorset, West. I thank the hon. Member for West Chelmsford.
The fact that those changes were not made retrospectively in the 1970s was an important factor for the Government then, and it is an important factor for the Government now, and for all future Governments. I do not usually agree with the right hon. Member for Richmond, Yorks, but he reiterated that not only Government but others had never engaged in retrospection. He clearly explained that if new provisions were introduced with retrospection, it would make them unaffordable. Mrs. Ewing, who was obviously quite a formidable lady, was not having that and pressed the new clauses to a vote. I am not criticising the right hon. Gentleman in any way, because I know that, like me, he is a party loyalist, but he voted against the new clauses. The Ayes were 41 and the Noes were 199. The then Government realised that they could not have retrospection, and that is relevant today as well.
There is a legal principle involved in retrospection, and all these things get tested in the courts—increasingly in the European Court of Human Rights. In January 2002, the Forces Pension Society backed a challenge in the European Court by a number of retired officers on the post-retirement and one-third pension issue. Their complaint was that the 1975 AFPS calculation of their widow’s pension entitlement in the event of death, which was based on the date of marriage or retirement, was arbitrary and discriminatory. The right hon. Member for Richmond, Yorks made that point in his contribution on the 1995 Act. It takes me back to the point I keep making, that wherever we put the cut-off date there will be winners and losers on either side of it.
Interestingly, the Court ruled that the challenge was inadmissible as the individuals involved were not victims and had received their entitlement as set out when they retired. It ruled that the subsequent rule change had not altered the entitlement of those who had already retired. That is an important point. People join a scheme on the terms set out at that point. I accept that many of us, particularly younger individuals, never look at their entitlements in their pension scheme until later in life, when they realise that they might make it to retirement and get the pension that they have been paying into. However, that challenge to the scheme was not allowed by the European Court of Human Rights.
The Bill encompasses civil partners. As hon. Members know, the Civil Partnership Act 2004 created a completely new legal relationship enabling two individuals of the same sex to register their relationship. The Bill suggests that civil partners, as well as widows, be included in its remit. When registering a civil partnership, same-sex couples obtain legal recognition of their relationship and acquire the same rights enjoyed by married couples. We extended those rights in the Armed Forces Act 2006, and I remember that that was bitterly opposed at the time by the hon. Member for Aldershot (Mr. Howarth), but common sense succeeded. The Civil Partnership Act came into force on 5 December 2005. Before that date, while other couples had the option of marriage, same-sex partners could not formalise their relationship.
The situation for service personnel who were still in service when the Act came into force is straightforward: the whole of their reckonable service will be counted towards the pension of their civil partner survivor. The general guidance on the Act was that the entitlement of civil partners to survivor’s benefit could be limited to service between 1988 and the date of the scheme member’s retirement. However, for the armed forces pension scheme it was decided that as civil partners had an entirely new status, they would be allowed to count service from October 1987. The same was agreed for widows’ pensions.
Mr. Eric Joyce (Falkirk) (Lab): That improvement seems particularly important. Around the country there are not a huge number of people affected, but we come across a surprising number of cases in which people involved in same-sex relationships have left the forces, lived with their partner for 20 or 30 years afterwards and then died, and their partner has not received any benefit from their pension. I believe that the new benefit was introduced in 2003 or 2004, and it benefits all those people across the country, in some cases elderly ladies, who are not quick to raise their hands.
Mr. Jones: I am pleased that the Government have recognised and helped that group. The Conservatives opposed the 2004 Act, but I understand that the new Conservatives now support the measure, although some of the more regressive backwoodsmen possibly think it was not a good idea. However, my hon. Friend makes the good point that it extended benefits and civil rights to a group of individuals who did not receive them in the past.
The Bill means that those entering into a civil partnership would be eligible for a survivor’s benefit, so those in service on 5 December 2005 would be allowed to count all their service for their civil partners’ benefit. Those who left service before that date but were in service on
or after 1 October 1987 would be allowed to count all service after 6 April 1978—a date on which service was counted for post-retirement spouse’s pension. Again, that is in line with widows’ treatment. Those who left service before 1 October 1987 would not be entitled to count their service for that purpose. When establishing eligibility for a survivor’s pension, service personnel and the Veterans Agency will look for proof of registration, as they would look for a marriage certificate for a widow or widower. The Bill would extend civil partners’ eligibility to receive survivor’s pension far beyond the remit of the 2004 Act. The arrangements would be far more generous than those under the 1975 armed forces pension scheme.
Much as I welcome civil partnerships legislation, we cannot escape the fact that someone would have to pay for the extension of entitlement, and the burden would again fall on the defence budget. In my experience in the Ministry of Defence in the past nine months, affordability comes up time and again. The Treasury keeps a keen eye on implications for the Exchequer, not just the defence budget.
There is some concern about reservists because the Bill discriminates against them, although I am sure that that is unintentional. I know that the right hon. Member for East Hampshire would never wish to do that because he supports all our armed forces, full time or reservists. However, clause 4, which is entitled “Interpretation”, states:
“In this Act... ‘armed forces’ means the naval, military or air forces of the Crown, but not the reserve forces,... ‘reserve forces’ has the same meaning as in the Reserve Forces Act 1996”.
The Bill would, therefore, albeit unintentionally, exclude reservists. I find it particularly unfair that it excludes a group which I know that the right hon. Gentleman supports, and which makes an invaluable contribution.
Mr. Mates: I am almost sure that there were no pension provisions for reserve forces before 1973, so there cannot be any reserve forces widows who have pensions. However, I am not absolutely certain.
Mr. Jones: We will call that a score draw, but such matters could be considered in Committee, as the hon. Member for West Chelmsford suggested. The important point is that if the legislation is to make provision retrospectively, it must cover all groups, although I do not think that it was the right hon. Gentleman’s intention to do that.
I have covered some of the issues relating to the retrospective nature of the Bill. The right hon. Gentleman quite rightly made the argument for the special group that he mentioned, but there are other areas of the Bill where, if we were to make a change, we would make a special group of others, as I think I have mentioned. Another group that we could argue for are those who were affected by what is called the pension trough, which relates to public service pension schemes that are final salary schemes, such as the armed forces pension scheme of 1975. That means that pension awards are made on the basis of an individual’s pay rate at the time, which is again a topical issue.
There have been a number of troughs over the past 50 years, but a particular cause for concern among service pensioners in the mid-1970s, who still feel aggrieved and quite rightly make representations, was the fact that
public sector salaries were restrained because of the then incomes policy. Several years of high inflation meant that the pensions of those retiring before wage constraints were lifted were overlooked. They are another group of people whom we might consider who feel strongly that they were disadvantaged through no fault of their own. They served their country, but they were affected by the then Government’s incomes policy. The question is whether we should make a retrospective change for those individuals.
Last time I was at the Dispatch Box, I was replying to the Gurkha debate. Everyone would agree that we owe the Gurkhas a great debt of gratitude, but one of the issues raised in that debate was the retrospection of Gurkha pensions. As has been said—I know this in detail—the issue has been to the High Court on a number of occasions. The Gurkhas are a group of individuals whom the public support and for whom they have a tremendous amount of respect, but there is an issue with those individuals who served before July 1997—a date chosen because it was the date on which the Gurkhas became based in the UK, rather than in Hong Kong or other parts of south-east Asia. The pensions payable to Gurkhas post-1997 were incorporated into the armed forces schemes, with most of them in the new armed forces scheme of 2005, while the pre-1997 pensions obviously come under a different scheme. There is the question whether we should retrospectively pay any changes in the armed forces pension scheme to the pre-1997 Gurkhas, which is an issue that I have already raised, given the changes that we have made to allow more Gurkhas to come into this country, and which I think is due to return to court this year. The figure for that group alone is £1.5 billion.
Those two examples demonstrate the costs involved. They might not seem like much individually, but if we add them up, we see that they are large just for the MOD, and the implications across other Departments are also quite large. The provisions would also break the precedent relating to retrospection, which all Government have resisted doing. To do so would make most of the changes to the pensions would be unaffordable.
A further point that I would like to make relates to the plight of war widows. I pay tribute to Gill Grigg and others from the War Widows Association who have worked tremendously hard on behalf of war widows and given support not only to the older widows but to the younger ones whose husbands served in the conflicts in Afghanistan and Iraq. I always find it very humbling when I meet the widows of those who served in those conflicts. They take tremendous pride in what their husbands did, and we need to recognise that we should support them.
The right hon. Gentleman’s point about the older war widows was correct. I would not want to give the impression that the pension is the only support that this country gives to them. As a Government, we can rightly be proud of the changes that we have made for pensioners, which also affect many war widows. The minimum income guarantee, for example, has raised a lot of pensioners out of poverty, and I know that the winter fuel payment, which all pensioners receive, is very welcome. We need to look at the question of widows’ pensions and war pensions in the round.
The right hon. Gentleman has made some important points, but the aspects of retrospection and affordability make his proposals difficult to accept. Also, we should not raise people’s hopes. I accept his point that the number of individuals involved is declining over the years, but we should not do any injustice to those who died before the changes were made. Any changes would involve an arbitrary date. I would not want this Government or any other to be prevented from introducing a change to pension entitlement by having to consider the cost of implementing the change retrospectively.
Mr. Mates: On a point of order, Mr. Deputy Speaker. As we come to the end of today’s debate, may I make a serious point of order to you about the way in which we do our business in private Members’ time? I do this because we now have a short window of opportunity during the interregnum between Speakers when you and all the other candidates are advocating the need to change some of the ways in which we conduct our proceedings. Today is perhaps one of the better examples of how ill we use our time in the House. This is not the whinge of a frustrated Back Bencher—I have been here too long; I know that the system is the system. We have sat here for five hours today, during which we first discussed a Bill that had universal approval across the House and which could have been dealt with perfectly well in 30 minutes or an hour. That was followed by this short Bill. It is a controversial one that the Government do not support—fair enough—but the matter could have been decided on a vote after an hour. That would have given us time to debate the Bill of my hon. Friend the Member for Vale of York (Miss McIntosh). That is how we should properly conduct private Members’ business. The House has set aside time for Back Benchers to introduce legislation about matters that we think are important, yet it is frustrated not by the will of the House but by the Government saying, “We don’t want this Bill to go to a vote, so we are going to talk it out.” This is a system—
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I think I have got the drift. The right hon. Gentleman was making a point of order to begin with, but now he is moving away from it. Also, by continuing, he might deny me the opportunity to reply to him. Suggestions have been made regarding the use of Fridays, and how private Members’ Bills should be dealt with. I might have been responsible for some suggestions myself, but it would be quite improper for me to elaborate on that at this stage.
Mr. Mates: Further to that point of order, Mr. Deputy Speaker. I did not want to put you in that position. I wanted to say to all of you that I hope that this matter is really going to be looked at.
Mr. Deputy Speaker: Order. I think that the right hon. Gentleman has made his point.
Mr. Jones: Speaking as an aficionado of Fridays when I was a Back Bencher, and having secured the—
2.30 pm
The debate stood adjourned (Standing Order No. 11(2)).
Ordered, That the debate be resumed on Friday 16 October.
Business without Debate
Theft from shops (use of penalty notices for disorder) bill
Motion made, That the Bill be now read a Second time.
Bill to be read a Second time on Friday 3 July.
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