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Lord McIntosh of Haringey: I am grateful to the noble Baroness for explaining her difficulties with Clause 17. I hope that I shall be able to reassure her. Clause 17 is virtually entirely benign. When I say "virtually" I mean that my only hesitation is because it includes a somewhat greater demand on the compensation fund which is paid for by all schemes.

Clause 17 improves access to the compensation provisions. It does not take away any compensation provisions from anyone. It also increases the maximum amount of compensation that can be paid to a scheme if assets are lost through theft or fraud and the employer is insolvent. It means that all scheme members will receive a higher proportion of their pension entitlement than under the existing provisions.

At present, the value of the assets of a scheme must have been reduced to less than 90 per cent of its liabilities before a claim for compensation can be made. A compensation payment at present cannot restore the fund above the level required to meet 90 per cent of its liabilities, calculated using the minimum funding valuation method.

But this does not mean that all members will at present receive 90 per cent of their pension benefits. The first priority is to maintain pensions that are already in payment. This means that younger members in a scheme with a high number of pensioners could lose a large proportion of their benefits, in order to make up the compensation payment to those who are already pensioners.

Our proposals recognise that this is unfair. Under Clause 17, compensation will be paid to restore a scheme's assets to meet 100 per cent of its liabilities for older scheme members. That means that more money will be available in the scheme to compensate people who are below pension age if their pension fund is lost through theft or fraud. The calculation will also include an expense allowance to take account of the cost of winding up the scheme, and 90 per cent of the value of liabilities in respect of younger members. Overall these younger scheme members will receive more than under the current system. It is not the scheme which gets compensation; it is the trustees on behalf of the members of the scheme. Therefore, those who have committed any theft or fraud do not receive any benefit from it.

I believe that, on reflection, the noble Baroness will agree that no members of the scheme lose out through the provisions in Clause 17. Those who are most in need--existing pensioners--will get 100 per cent

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compensation, as they would have done, but that will not be at the expense of younger members of the scheme. I commend the clause to the Committee.

Baroness Buscombe: I am grateful to the Minister for that full explanation. I do not suggest that members would lose out. All I suggest is that we must be careful when it comes to ensuring that fiduciary responsibility remains with those who are responsible for running the scheme. I thank the Minister. I take note of what has been said and shall read it in Hansard.

Clause 17 agreed to.

Clause 18 agreed to.

Baroness Fookes moved Amendment No. 41:

After Clause 18, insert the following new clause--


(" .--(1) In determining whether a pension is payable to a person as a widow under any of the enactments in subsection (2), no account may be taken of the fact that the widow has remarried or is living together as husband and wife with a person of the opposite sex.
(2) The enactments referred to in subsection (1) are--
(a) the Naval, Military and Air Forces Etc. (Disablement and Death) Service Pensions Order 1983, and any order re-enacting the provisions of that order,
(b) the Personal Injuries (Civilians) Scheme 1983, and any subsequent scheme made under the Personal Injuries (Emergency Provisions) Act 1939,
(c) any scheme made under the Pensions (Navy, Army, Air Force and Mercantile Marine) Act 1939 or the Polish Resettlement Act 1947 applying the provisions of any such order as is referred to in paragraph (a),
(d) the order made under section 1(5) of the Ulster Defence Regiment Act 1969 concerning pensions and other grants in respect of disablement or death due to service in the Ulster Defence Regiment.")

The noble Baroness said: In the unavoidable absence of the noble Baroness, Lady Strange, I was asked to move the amendment which stands in her name, that of my noble friend Lady Gardner and myself. It is a somewhat daunting prospect to stand in the shoes of the noble Baroness, Lady Strange, because she is well known as a doughty champion and supporter of war widows. I hope that I can do justice to her sentiments in the matter.

The general thrust of the amendment is to ensure that a war widow who remarries or lives as the wife of someone to whom she is not married should not lose her entitlement to a war pension. It is felt that in other pension schemes this is not happening. It therefore seems particularly unjust that it should happen in the case of a woman who loses her husband as a result of war.

However, I appreciate that this is a complex matter. As I understand it, war widows receive their pension from two entirely different sources. They are entirely different schemes administered by two entirely different departments of state. One is the Ministry of Defence, where it is effectively an occupational pension; the other is the DSS, where it is an indication of the loss widows have suffered as a result of war.

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I appreciate, therefore, that what I seek may go beyond the scope of the Bill, but I hope that at the least we could open up the whole subject and get things moving in at any rate one department, if not the other. If I sound a little dubious, it is because, having been a Member of Parliament, I have had dealings with the MoD in the past. The department is extraordinarily stiff-necked when it comes to any matter of benefits. The tendency seems to be to give less rather than more, if that is possible. Maybe it has the Treasury standing behind it--that I would not know. All I know is that it is a great job to get it to move, but I realise that this Bill may not be the appropriate place to force that movement.

Nevertheless, an important principle is at stake. I am therefore pleased to move the amendment on behalf of the noble Baroness, Lady Strange, whom, incidentally, I still prefer to regard as my noble friend. She believes that the number of people who might be affected, if this came into operation, would be in the order of 2,700 war widows. That does not count any who may subsequently become widows as a result of any other conflicts in which we may be involved. It is not likely that all 2,700 would remarry. However, the principle is important and therefore I have pleasure in moving the amendment. I beg to move.

Lord Morris of Manchester: I am grateful to the noble Baroness, Lady Strange, for facilitating this important debate by tabling Amendment No. 41, and also to the noble Baroness, Lady Fookes, for moving it with such clarity. The noble Baroness, Lady Strange, is held in the highest regard by war widows, and rightly so. At Second Reading, she said that she knew my noble friend Lady Hollis would argue that,

    "this Bill does not affect war widows".--[Official Report, 10/6/99; col. 1626.] For her part, the noble Baroness, Lady Strange, said that she believed there to be a connection. To make doubly sure, she tabled her amendment. It addresses what Jenny Green, writing for the War Widows Association of Great Britain, described as the "iniquity" of treating war widows who remarry less favourably than they would be treated if their pensions were paid under other schemes.

In the report of his team's review of the Armed Forces' manpower, career and remuneration arrangements, Sir Michael Bett recommended that spouses' attributable pensions should be awarded for life and not withdrawn on remarriage in line with what had become standard private sector occupational pension scheme practice. The Goode report had previously made the same recommendation. Today that recommendation is even more relevant, since the award of spouses' pensions for life has now also been introduced into a major public service pension scheme; namely, that for local government officers.

I speak as the former chairman for 14 years of the managing trustees of the parliamentary contributory pension scheme and of the House of Commons Members' Fund. It is accepted in the parliamentary scheme that remarriage should not cost a widow her pension. I am sure there will be noble Lords on both sides of this House who think that war and service widows are as deserving of treatment no less favourable

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than that of those for whose pensions I used to be responsible in chairing the parliamentary contributory pension fund.

Of all the duties that it falls to Parliament to discharge, none is of more compelling priority than our bounden duty to act justly to men and women who were prepared to lay down their lives for this country and to the dependants of those who did so. That is the case for urgent consideration of the anomaly to which the noble Baroness, Lady Fookes, has drawn our attention and which has been criticised so strongly by Jenny Green and the War Widows Association. I am sure my noble friend, who battled long and hard for war widows in opposition in close alliance with the noble Baroness, Lady Strange, will want to reply as helpfully as she can to this debate.

3.30 p.m.

Lord Campbell of Croy: I merely raise a point for clarification. In proposing the new clause, my noble friend spoke about those who are widows as the result of war, and about the possibility of another war. My understanding is that he expression "war widows" covers a whole further range--that is to say, the widows of servicemen who have died in peacetime on Armed Forces duty in this country. A figure of 2,700 was mentioned. My estimate is that well over half would have been in that category and not involved in any way in a war. That does not make them any the less deserving of the intention behind this clause. The media and the public are sometimes unintentionally misled by that term, and also by the expression "war pensioners". I know from my own experience, and from research with the help of officials, that more than half of those who are termed "war pensioners" have never been anywhere near a war; their disabilities have usually been caused by firing their own weapons on ranges in this country in peacetime. But again, they deserve a pension.

As I have said, the terms "war pensioner" and "war widow" are misleading. "War pensioner" ought to be replaced by "Armed Forces disability pensioner". Then, the matter would be clearer. I sympathise entirely with the purpose of the new clause. It is merely a question of being clear about the group to whom we are referring. I hope that the noble Baroness, Lady Hollis, will confirm what I have said.

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