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Baroness Dean of Thornton-le-Fylde: My Lords, this is a very important Bill. It is a small Bill, particularly compared with the Pensions Bill, which we debated at Second Reading earlier and which is about 100 times longer than this one. But I suggest that this Bill is as important as the earlier one.

An analysis of this debate could result in the conclusion that it is an absolutely awful Bill, that our Armed Forces are being treated like Aunt Sallys and that we are not doing enough for them. I want to pick out the areas where I believe that the Bill is deficient, but, in overall terms, I welcome it. I do so having talked to Armed Forces personnel. There is much to be welcomed within it.

It is a Bill that has been a long time in coming. I remember, nearly seven years ago, being asked if I would agree to be chairman of the Armed Forces Pay Review Body and being briefed that one issue that we would be facing, probably within a year or 18 months, was the new Armed Forces pensions Bill which the Government were to bring forward. The present Government have inherited it from the previous one. I remember going to see the then Secretary of State, George Robertson, and asking him directly when we could expect to see the Bill. He said, "We're not sure", and he would not pin himself down with regard to the timing. I started to hear alarm bells ring then.

However, as time has gone on, this Bill has started to look better and better when compared with what is happening with regard to pensions generally in this country. Unfortunately, we are where we are now. In addition, this is an unfortunate year. I shall not ask my noble friend the Minister to comment, but this is not a particularly affluent year in terms of resources for the MoD. Therefore, perhaps the timing could have been a little better; nevertheless, the Bill is here now and I think that it would be sad if it did not, with some changes, receive a fair wind from this House.

The noble and gallant Lord, Lord Craig, who understandably is not in his place at present because he is attending the Constitution Committee, and the noble Lord, Lord Hodgson, talked about Armed Forces personnel not knowing much about their pensions and they questioned the line of communications.

The noble and gallant Lord, Lord Craig, referred to his experience as a young man in the services. He said that, with only 100-odd replies to the consultation
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exercise, things have not changed much. I suggest that they have changed. Each year the Armed Forces Pay Review Body meets about 3,000 personnel. I can tell noble Lords that, over the past three years in the series of meetings that we have had, pensions have been an ongoing issue for our Armed Forces personnel.

As time has gone by, that interest has increased, and the reason for that is twofold. I guess that it is because of what has been happening in the private sector and the attendant newspaper coverage but also because the Armed Forces at MoD level have been conducting a communications exercise. The problem with that is that our Armed Forces are almost on a conveyor belt—they are never in one place long enough to reach all the people in one group.

Nevertheless, the Armed Forces have been conducting a communications exercise and pensions have been one of the issues raised. One question that has been asked—it is dealt with in the Bill—is: why do officers accrue their pensions at a different rate compared with other ranks? Certainly, other ranks take something like 37 years before becoming eligible for a pension as opposed to officers, who become eligible after 34 years. The Bill deals with that matter and it should be welcomed. I can tell noble Lords that, having talked to personnel, they certainly welcome it.

The scheme is a final salary scheme. If this Bill did not go through now, I am unsure whether we would be faced with a final salary scheme in three or five years' time, considering the way in which matters are changing in the pensions area. Therefore, I would welcome a statement from the Minister about this being a final salary scheme. Indeed, the noble Lord, Lord Hodgson, made reference to defined contributions. The first part of the Explanatory Notes states that there are no plans at present to go to defined contributions. I would like some more beef on that statement. That would be most helpful.

The move from one-and-a-half times to four times pensionable pay in the new scheme has to be welcomed. It is comparable with what takes place in the private sector. The widow's pension changing from 50 per cent to 62.5 per cent also has to be welcomed. That is indeed a welcome move.

I was very puzzled as to why there was so little detail on the face of the Bill. The Minister referred to that in his introduction and I know that it is normal in many public sector pension schemes—perhaps all of them. I understand that. If such details are not to be included in the Bill, we need some assurances in a number of areas that will provide our Armed Forces with a kind of protective coat in relation to the pension scheme. In other pension schemes, where everything is encompassed in the rules of the scheme, members can have a say.

A welcome addition to the Bill would be a reference to the Armed Forces Pay Review Body taking over the monitoring of the scheme. I have declared my former interest—I am no longer chairman—but the Armed Forces Pay Review Body is an independent body, as the Government have found out to their expense from time to time. I know that my colleagues and the current
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chairman, Professor Greenway, will ensure that that work is carried out thoroughly. It would be good to have reference to that in the legislation.

I would also ask my noble friend to assure me that the reviews that the Government have conducted and the recommendations to the MoD are put in the public domain, just as is the case with the annual report of the Armed Forces Pay Review Body. There is no reference to that at the moment. I believe that that is essential because it would mean that Armed Forces personnel would have access to it and be able to raise issues with the Armed Forces Pay Review Body.

The burden of proof has been mentioned by noble Lords and I understand that. We need to debate that because it is not as straightforward in some areas as perhaps we think, but I welcome the fact that the issue has been raised.

I am very concerned about two other areas, one of which has not been mentioned—the transitional issues. I am not talking about the legacy issues; I am talking about the transitional issues that will arise in April next year when new recruits go straight into the new scheme and current serving personnel join not later than April 2007, should they so choose.

My friend, the noble Baroness, Lady Strange, mentioned the briefing meeting that was held at the MoD. We are indeed grateful to the Minister and to his civil servants for being so open with us and giving us an absolutely first-class presentation. That was very welcome indeed. I also thank the Minister for sending me yesterday a three-page letter dealing with the transitional issue. I am sure that he will not be too surprised to know that it does not answer in full the questions that I intend to ask during debates on the Bill.

Let us imagine a situation such as Iraq. Next year we shall have personnel in Iraq—I doubt we shall be out by next year. Suppose in June next year new recruits are working in operations on the ground and someone who has just joined the services is killed. His widow and his family would receive four times the pensionable pay and, if he is not legally married, his unmarried partner would also receive recognition in respect of widow's pay. However, if he or she had been in the services under the current scheme, the amount would be one-and-a-half times pensionable pay and, if he or she is not married, the unmarried partner would not be recognised.

As regards the pension, the spouse pensioner of a new recruit will receive 62.5 per cent whereas, currently, a widow receives 50 per cent. It might be that a new recruit who gets killed has got two months' service and another person who gets killed in the same action might have 15 years' service. That situation is absolutely untenable. This is a priority issue for the Bill. It is a transitional situation, which probably needs a transitional arrangement. I am not suggesting that the Bill is changed indefinitely or that there is any extra cost to the base cost, but we need to deal with that issue because it sends out a very bad message for serving personnel.
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Last weekend we saw the D-day commemorations. In departing from the issue before us today, I wish to pay tribute to the BBC, which for a whole week was at its best. I am not referring to the English language; but the BBC talked in many kinds of languages. During last week, the BBC broadcast something for everyone in the United Kingdom; that is, young people who do not know very much about D-day, elderly people, and all other age groups. It did a marvellous job.

On Sunday, if we had asked the people of Britain if they thought that we should triple what we give our Armed Forces, there would have been a unanimous "Yes" vote. A referendum would have obtained a 99.9 per cent "Yes" return. However, it brought home the issue to which the noble Viscount, Lord Slim, and the noble Baroness, Lady Strange, referred. It is a diminishing issue, but it is still an issue of unfairness; that is, the war widows' pensions pre-1973.

When we were discussing the 1995 pensions Bill—not Armed Forces pensions—I sat on the other side of the House because we were in opposition. I was number two to my noble friend Lady Hollis. The Opposition were supporting the Conservative government of the day by refusing to lift the war widows' pensions. The noble Baroness, Lady Strange, courageously put forward an amendment. I am not suggesting that I was courageous, but I risked being thrown off the Bill team. I thought, "Technically, the government of the day are right and the Opposition are right. But actually, in fairness terms, they are wrong". I suggest that that is still the case.

Technically, it may be right to do nothing. Retrospection is very difficult in a whole range of areas. Widows' pensions pre-1973 is an area where we have to say that fairness and morality must come first, rather than give technical reasons about why they do not. Such considerations would not cost a lot of money. That may sound mercenary, but the blunt fact is that they would not. They are also a diminishing issue as regards cost. Would the Government please consider what they can do about this small number of people?

When I saw those veterans on the television and heard them talking on the radio, I was absolutely convinced. I had all the facts before me and I was already convinced, but that moved me to think that we will not see the likes of those people again in such numbers, many of whom are more than 80 years-old.

As I said, this Bill is a long time coming. It is not often that we get the chance to discuss Armed Forces' pensions, so we must try to get it as right as we can, although it will not be perfect. This is important for our Armed Forces, not just for the personnel serving but for their families. When the Armed Forces serve in operations, it is important for them to know that their families are well looked after. This is one aspect of their commitment to the nation. Accommodation for families and welfare packages are important. I suggest that pension provision is equally important.
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5.43 p.m.

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