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Lord Bach: My Lords, I am grateful to the noble Lord for allowing me to intervene, which I do not think will entirely surprise him. I have already discussed this amendment with the noble Lord and with my noble friend Lady Dean. In Grand Committee we said that we hoped to give a definite and definitive answer on Report to the very proper issues that have been raised in this amendment. However, I am afraid that across government we do not yet have the final answer, which we hope will be satisfactory to both the noble Lord and my noble friend, addressing the particular issues raised. I wonder if the noble Lord would be kind enough not to press his amendment today, but perhaps table it again at Third Reading next week. At that point it is hoped that we can deal with this matter once and for all.

Baroness Dean of Thornton-le-Fylde: My Lords, my noble friend's remarks were not sprung on us and I warmly welcome his statement. I certainly support the content of Amendment No. 3 and perhaps the amendment we shall table next week will bring together the elements of both amendments. I look forward to the Minister's response at Third Reading and I hope that we shall be able to make progress on this small but very important point.

Lord Astor of Hever: My Lords, I thank the noble Baroness, Lady Dean, for her comments. We should
 
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certainly discuss the form of an amendment to table at Third Reading next week. I also thank the Minister for his remarks. This amendment was designed to tease out further details on the transitional problem. We are happy that the Government see the need to address this and we look forward to returning to the issue at the next stage.

[Amendment No. 3 not moved.]

Lord Redesdale moved Amendment No. 4:


"( ) Any scheme established by order under this Act shall provide mechanisms to ensure that—
(a) personnel in the armed forces who have completed 35 years' service but are not retained in service after their 55th birthday for service reasons receive pension benefits which are based on 66.67% of final salary, and
(b) a death-in-service benefit of four times salary is paid to surviving spouses or dependents."

The noble Lord said: My Lords, I apologise to noble Lords, but I was surprised at being called to move Amendment No. 4—

Lord Bach: My Lords, I should apologise to the noble Lord. It is the fault of the government side. The noble Lord did not know that there was to be a kind of stately dance between the noble Lord, Lord Astor, my noble friend Lady Dean and myself on Amendment No. 3, which meant that it would not run its course today. We should have told him.

Lord Redesdale: My Lords, I still have to apologise for being caught outside the Chamber, gloating over the earlier victory.

Amendment No. 4 is probing in nature. I want to ask the Minister to consider whether there is a possibility that the terms and conditions of the scheme could be changed by regulation. In the light of the emphasis on good practice to be applied to different aspects of the Bill, would it be possible for service personnel in the future to earn 66.67 per cent of their final salary rather than the present slightly lower figure? It is impossible to achieve the maximum salary percentage that is available in the private sector. I beg to move.

Baroness Crawley: My Lords, I had hoped that this amendment would be probing in nature because the noble Lord knows that I will resist it. However, I hope that I can give him some reassurance and explain why we believe that the present proposals set out in the Bill will be of benefit to Armed Forces personnel.

Service personnel who serve up to the normal retirement age of 55 and have served 35 years under the new AFPS will receive pension benefits comparable to those available under the current pension scheme and, as the noble Lord knows, paid much earlier that in most other schemes. Their dependants' benefits will be significantly improved. Those service personnel who wish to improve their own pension benefits will have the opportunity to purchase additional voluntary contributions; the extended accrual period of 40 years
 
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will provide sufficient headroom for them to attain benefits up to the current Inland Revenue limits referred to by the noble Lord, should they wish to do so.

The new Armed Forces pension scheme is designed to be equitable, treating personnel on an equal basis regardless of whether we can offer them a full career. This amendment would benefit only a limited number of service personnel who serve a full career, as the majority will have left before the new early departure point—that of 18 years' service and a minimum age of 40. It would therefore be counter to equality of treatment on the basis of age and would, in effect, discriminate between officers and other ranks where equality of treatment has been one of the key principles behind the new scheme. It might also have the effect of discriminating between men and women because of the shorter length of service enjoyed by most women.

The alternative of offering an improved accrual rate throughout service would be expensive to implement—we could be talking about a figure of £70 million—and it was agreed that other measures such as improved dependants' benefits should have priority.

I turn to new paragraph (b) of the noble Lord's amendment. The improved death-in-service lump sum of four times pensionable pay is an important feature of the new pension scheme. However, as I have made clear elsewhere, this sort of detail is more appropriately covered in secondary legislation. Nor would the amendment be viable in its current form. Additional material would be required to cover definitions of qualifying salary, of spouses and of dependants. Moreover, the noble Lord will realise that, as drafted, this proposal would exclude unmarried partners and partners registered under the new Civil Partnership Bill.

As was made clear to the Opposition during consideration of this issue in the Commons, such broad principles are not in practice viable in primary legalisation without supporting detail.

I hope that my explanation is sufficient to satisfy the noble Lord, Lord Redesdale, that he need not press his amendment.

Lord Redesdale: My Lords, I thank the noble Baroness for that response. The purpose of the amendment was to deal with the issue of good practice, which is obviously one of the aspects that this scheme is trying to achieve. It would be wrong not to highlight the fact that, under the scheme, it would be extremely difficult to achieve the Inland Revenue limit. However, having taken into account the views expressed by the noble Baroness, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Redesdale moved Amendment No 5:


"(2A) The Secretary of State may by order establish schemes which award members of the armed forces expenses for—
(a) medical treatment,
 
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(b) surgical treatment,
(c) rehabilitative treatment, or
(d) aids and adaptations for disabled living.
(2B) Such schemes, as set out in subsection (2A) above, shall be provided to cover expenses that arise wholly or mainly as a result of disablement due to service in the armed forces and in so far as subsections (2A)(a) to (d) are not provided for, otherwise than on payment of a charge by the member, under legislation of the United Kingdom."

The noble Lord said: My Lords, in moving Amendment No. 5, I shall speak also to Amendment No. 6. If the noble Baroness is to reply, she will be happy to know that these are probing amendments. She will not immediately have to say that she is resisting them but will be able to give the reasons behind the stand that I am almost certain she will take.

Amendment No. 5 refers back to the amendments that I tabled in Grand Committee. At that stage, due to my inabilities in drafting, there was a slight confusion about the aims of the amendments I brought forward. Amendment No. 5 seeks to ascertain whether the areas referred to in subsection (2A)(a), (b), (c) and (d) of the amendment will be covered under the scheme set out in the Bill. There is concern that certain areas may not be covered by national health trusts. I hope that the Minister will say that it is envisaged that such areas will be covered, even if not by local NHS trusts.

Amendment No. 6 is also a probing amendment which relates to time limits and to deterioration. I said in Grand Committee that I would raise this issue again because I believe that one aspect of the Bill is based on the standard view of actuaries and the standard view of deterioration. Obviously a great many disabilities, such as amputations and loss of limbs, will react in certain ways, and it can be taken into account how such wounds will progress over time.

The Ministry of Defence has denied the existence of Gulf War Syndrome, but the American Government have now taken account of it. If at a future date the British Government and the MoD take Gulf War Syndrome into account as an illness, will the scheme be sufficiently flexible to deal with this syndrome and similar syndromes that may arise in future engagements? It is not my intention to press the amendment or to put the Government in a position where they have to say that they do accept it as an illness. We have asked far too many questions for me to believe that we will suddenly get an answer of that magnitude today.

The issue also has to be considered in the light of the present threat of chemical and biological agents which may be developed in areas we have not yet seen. The countermeasures to those agents are a cause of concern because, even after so many years of testing by the Government, we have so little understanding of them. The purpose of Amendment No. 6 is to elicit whether the scheme has the flexibility to deal with the variable conditions that may give rise to different levels of deterioration, which may be not only physical but mental in aspect. I beg to move.


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