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Viscount Slim: My Lords, I should very much like put on the record the attitude of almost "uncaring arrogance" of those in another place in matters like this and that they merely put at the bottom of the page that the Exchequer will not pay. I note, and I wish it noted, that in another place, quite often just lately—three or four times—they have improved their pensions and, particularly, what happens to their widows when they die: I see that they make clear that that is no burden on the Exchequer. Those in another place have a lot to answer for.
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5 p.m.

Baroness Crawley: My Lords, despite the many strong and passionately held views to the contrary that we have heard in this debate, I remain very clear that the House should agree with the Commons reason for disagreement with Lords Amendment No. 2. I repeat the words on the Marshalled List:

The reason makes it clear that the Commons disagree because of the additional cost of some £50 million to give the benefits described in the Lords amendment carried at Third Reading. The House is familiar with the arguments. I explained them in my speech in that debate. My noble friend has also given a clear explanation of why this figure would have to be paid by the Ministry of Defence to the Treasury. It would cover the years of service in the Armed Forces before post-retirement pensions were introduced in April 1978 for widows and October 1987 for widowers. I am afraid that there is no getting away from this additional charge, even if we were to make payments from a future date.

As the House knows well, we would expect this figure to rise to some £300 million to £500 million across government as a whole because the implications for other public service schemes would remain. It would not be possible to limit any concessions only to the Armed Forces.

My honourable friend in another place, the Minister for Veterans, told the Commons on 20 October about his constructive meeting with the noble Lord, Lord Freyberg. I understand that they agreed that it would be helpful to build on that meeting in the future, after the Bill has received Royal Assent. The Minister made it clear that he was prepared to give further consideration to this matter in those circumstances. I hope that, by restating that clarification, I am being helpful to noble Lords. However, obviously I cannot go beyond the words of my honourable friend, as the noble Lord, Lord Freyberg, has asked me.

I turn now to the further amendment proposed by the noble Lord, Lord Freyberg. The changes he has made, while reducing the cost of the proposal, do not have a material effect on the reason for disagreement. While it has not been possible in the time available to cost the amendment in any detail, the following points should be considered. First, the exclusion of unmarried partners brings no specific cost saving as we were unable to calculate the liability, given that we have no details of subsequent cohabitations. It did not form part of the £50 million figure. Secondly, while the amendment limits the age at which the improved benefits can be paid to age 75, in reality the age at which the majority of former service personnel might be expected to die and their widow's pension come into payment is in their seventies, so little is likely to be saved. For those widows or widowers below this age at the time of change, it will delay the payment of improved benefits until they reach this age, but the numbers affected are relatively small.
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If carried, the amendments would impose an entirely arbitrary age limit, hedged about with qualifications which would not be defensible over time. It would, in short, be an untenable approach to legislation. To restrict benefits solely to those over the age of 70, while I am sure it is well intentioned, makes no sense at all in policy terms and would be at odds with our commitment to observe the principles of age discrimination legislation, where this is reasonable. For those reasons, I cannot agree with the noble Lord's amendment.

Viscount Bledisloe: My Lords, my noble friend Lord Freyberg gave clear reasons why the position of the services was different from any part of the public sector. He pointed out, first, that service personnel have to retire at age 40 and, secondly, that many will have served much of their time overseas, and thus probably would have found it difficult to marry during that period. The noble Baroness has not dealt with those reasons; she has merely said that it is impossible to distinguish between service personnel and the other sectors. Will she honour the House with an explanation of why she has said that?

Baroness Crawley: My Lords, the Government do not agree with the noble Lord, Lord Freyberg, in his assertion that there would not be a read-across from this section of the public service to the rest of the public service. I am afraid that it is as simple as that.

I have been asked a number of questions which I shall do my best to answer. The noble Lord, Lord Freyberg, talked about the change in the terms of the amendment, reducing costs from £50 million to £7 million. I should say to him in reply that we do not have a precise figure for the saving that would result from the change in the wording of the amendment, but we are confident that that saving would be nowhere near as great as indicated by the noble Lord. That is because, as I pointed out in my earlier response, most of the widows concerned would not be widowed until their seventies and would be expected to live into their eighties. The major cost issue which we have just been talking about is the wider implication for the public service, where we expect the costs to run to several hundred million pounds.

The noble Lord also asked about the issue of retrospection, specifically in the context of concessions we made earlier in the passage of the Bill—addressing the issue raised by the noble Baroness, Lady Strange. That concession would affect only those who remarry in the future, not those who have already remarried. In that sense, therefore, we do not see this as retrospection. Moreover, in the matter of retrospection, we are following a position that has been established by many governments.

The noble and gallant Lord, Lord Vincent, asked about cost neutrality. I would say to him that it is not the case that the parliamentary scheme is simply a matter of the Exchequer picking up the bill. The
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parliamentary scheme is contributory, and the level of both contributions and pay take into account the value of the benefits offered under the scheme.

The noble and gallant Lord also asked me about reducing the numbers serving in the Armed Forces. The assessment of the costs of providing scheme benefits is based on an individual's entitlement, and cost neutrality relates to that. It is not sustainable to argue that reducing numbers would allow more valuable benefits. Moreover, wider defence costs would need to be taken into account when looking at the scheme.

I hope that I have covered the points made by noble Lords. For the reasons I have given, I cannot agree with the amendment tabled by the noble Lord, Lord Freyberg, and do agree with the Commons reason for disagreement.

Lord Morris of Manchester: My Lords, I am extremely grateful to my noble friend for the care with which she has explained her position. Can she answer my question: if the amendment of the noble Lord, Lord Freyberg, is carried, would it involve the dumping of the Bill? I understand from the noble Lord that he was told by a Minister in another place that acceptance here of his amendment would involve withdrawal of the Bill altogether. Is that still the case?

Baroness Crawley: My Lords, not having been privy to the discussions, I understand that that never was the case.

Lord Burnham: My Lords, if cost is the reason why the amendment should not be accepted at the moment, why might things be different if further consideration is given to the issue after the Bill has received Royal Assent? What will have changed?

Baroness Crawley: My Lords, I can only repeat that a discussion has taken place between my honourable friend in another place and the noble Lord, Lord Freyberg. That discussion has been put on the record, both in this House and in another place. I cannot go beyond that discussion.

Lord Bramall: My Lords, am I right in thinking that, as this is a legacy issue, it does not have to be on the face of the main enabling Bill? Why cannot this matter be treated as a completely separate subject and the Bill go forward on its own and quite separately?

Baroness Crawley: My Lords, the noble and gallant Lord is right: the matter addressed by the amendment does not need to be in the Bill. I therefore refer noble Lords to the willingness of the Government to discuss these matters beyond the Bill.

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