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Lord Craig of Radley: My Lords, I am grateful for this early slot in the speakers' list. I am involved with the Constitutional Reform Select Committee that is currently in session. I have already expressed my apologies to the Minister and the Front Benches for my consequent absence for part of the debate.

I am very pleased that the MoD has produced this much needed and long awaited Bill. It has taken years to get here. It will be another year before the new scheme arrangements, many of which I welcome, are in place. I should remind the House that I am a vice-president of the Forces Pension Society. It is appropriate to commend the society's determination and hard work in its many meetings and exchanges with the MoD. They have played an important part in identifying and securing some significant, if overdue, pension and compensation improvements for servicemen and women and their dependants.

When I was commissioned aged 21 in the RAF, even with an honours degree in pure mathematics, neither pensions nor compensation arrangements figured anywhere in my personal thinking about my future career. Even today, with much more exposure to the topic, and as a pensioner, I am still far from clear on much of the detail. The whole topic is riddled with
 
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complexities. I shall not labour that point other than to stress this important consideration: it behoves the employer—MoD—to make exceptional efforts to ensure that servicemen and women are not short changed. There should be an understanding—an undertaking—that Armed Forces pension benefits will always be at the level of the best in public service and never measure unfavourably with best practice in the private sector.

Service in the Armed Forces has unlimited liability—anywhere, any time, at no notice. When he was in another place, the noble Lord, Lord Rooker, said:

"Members of the Armed Forces enter into a unique contract with the state. In effect, they agree to die for their country if necessary".—[Official Report, Commons, 24/7/00; col. 816.]

I am sure that this House would agree with him.

It is not reasonable to expect young men and women who join the Armed Forces to be pensions "literate". Youth and the spirit of adventure mean that pension and compensation are not something that the recruit weighs in the balance when deciding whether to sign on. It was not the case with my age group when we joined up.

I do not know whether the Minister has any evidence that pension and compensation rates are a significant pull factor and recruiting sergeant for today's youth. The minuscule number of serving personnel who responded to the consultation exercises—a mere 139 on pensions and 22 on compensation—seems to indicate that attitudes have not changed from my generation.

Another of my concerns was that there was no provision for any review, so I was much encouraged to learn from the Minister in his letter of 30 April that the Government would invite the Armed Forces Pay Review Body to carry out quinquennial reviews and assessments. That is good news, but does it go far enough? The AFPRB does not report on remuneration for senior officers of two stars and above. How will their pension entitlements be reviewed?

Will the Minister confirm, as now happens with AFPRB recommendations on pay, that its views on pensions and compensation will be accepted and implemented by the Government? Will the AFPRB be restricted to a review of the new schemes only? That would be unfortunate. I strongly urge that the involvement of the AFPRB is placed on the face of the Bill. This would give great reassurance that the schemes will not be allowed to become outdated and outmoded, as has happened in the past. I press the Government to adopt this suggestion.

It has been MoD practice to argue that the impact of pension arrangements on recruitment and retention has to be considered. In his letter about AFPRB involvement, the Minister referred to that again. I do not like this because it is a cop-out. I am not aware that generous pension schemes for Members of Parliament are dependent on recruitment and retention. I doubt whether private schemes based on best practice are greatly varied to take account of recruiting. Why should this provision, which could be prayed in aid of
 
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lower than best practice arrangements when recruitment and retention happened to be good, be allowed? Recruitment and retention rates fluctuate, and to rely on them as a means of settling or reviewing pensions which will run for decades seems wrong. I hope that the AFPRB will not allow it to dominate its advice about pensions.

At the moment, this enabling Bill will allow a Secretary of State to set up new schemes, varying them up or down solely by statutory instrument. The armed services would be reassured if there were some key benchmarks about the new schemes on the face of the Bill. In spite of his opening remarks, I hope that the Minister will consider including some of those, such as the improved rate for dependants' benefits; the new death-in-service benefit; and that defined benefits are to be based on actual pensionable earnings. These and some other key markers drawn from the proposed new schemes and put on the face of the Bill would set a baseline below which pensions and compensation benefits could not fall without primary legislation.

I note with concern a matter the Minister referred to, and one that I know the noble Lord, Lord Morris of Manchester, will speak about as well: that the MoD is proposing to change significantly the standard of proof needed for a claim. The onus will move from the MoD to the individual serviceman. This does not strike me as the action of a caring employer who should be no less willing to treat quickly and sympathetically today those who suffer great trauma, both mental and physical. I do hope that the MoD will think again and agree to retain the present standard of proof in the new scheme.

Finally, I turn to two of the legacy issues. As we have heard, the new scheme, while improving arrangements for future widows and partners, perpetuates a source of great anguish and disgust. I refer to the differing treatment of those who become service widows. The new scheme will withdraw the existing distinction about whether or not the spouse's death was attributable to service. All widows and widowers, and all unmarried partners of either sexual orientation will now be permitted to keep their pensions for life. So far, so good. But the Bill will leave the existing non-attributable widows' rules untouched. These widows will still lose their pensions, should they elect to remarry or even to cohabit.

Why discriminate against a small, discrete group by relying on a long-outmoded rule dating from the days when women were perceived to be totally reliant on their husbands for support? The rule has been dropped for all other widows and widowers, unmarried partners of either sex and their offspring. It is utterly indefensible.

Could not those affected be allowed to opt for the new scheme? Governments have been, recently, much less rigid about holding to past precedent when close family relationships are involved. Once only those married could benefit. Now entitlement has stretched far beyond the confines of a legal marriage. Surely those legally married should not lose out.
 
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A further widows' issue concerns post-retirement marriages. My postbag—as I am sure have those of other noble Lords—has been full of letters from those who will remain assessed by a rule that has now been scrapped for other widows and widowers in the new scheme. I could quote any number of telling points that have been made to me but the underlying message is clear and strong.

A serviceman's pay throughout his career was abated to provide a pension entitlement for himself and for a widow and dependent children of his. That is what he thought he was paying for; the more so when he, along with many others, was given the opportunity and encouraged to pay to increase his widow's pension entitlement from a third to a half of his own pension. Surely, in equity, he has a right to expect that if he leaves a widow she should benefit from his contributions and that the Government should honour that arrangement regardless of when he did get married. Any dependent child should also not be penalised.

We should remember that service rules and customs discouraged early marriage for the generation of individuals who are now affected. The pattern of service life then—many young servicemen were stationed overseas and their chances of meeting a potential spouse were limited or non-existent—meant that marriages were often contracted later than in other walks of life; in many cases only after the end of a military career.

I hope that we do not have to await the debates on the relevant statutory instruments to correct these gross injustices which bring so much justifiable anger and distress to those affected. It would be greatly appreciated if the Government would themselves table the necessary undertaking so that there is not an unseemly battle over the issue. It is too sensitive and too distressful a matter to be a topic for heated debate in your Lordships' House. I urge the Government to do so and I invite other noble Lords to support me in this appeal.

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