Armed Forces (Service Complaints and Financial Assistance) Bill [HL]
(10 years, 3 months ago)
Lords ChamberRead Hansard Text Read Debate Ministerial Extracts
Lord Thomas of Gresford
“( ) If the person referred to in subsections (1) and (2) is deceased, the complaint may be made or maintained by his or her next of kin, or personal representative.”
Lord Thomas of Gresford (LD)
My Lords, I am returning to an issue that we discussed in Committee dealing with service complaints: whether a service complaint dies with the complainant. If the person who has grounds for making a complaint dies, is that an end of it? I would say that, in principle, that ought not to be the case. The proposed amendment to the Armed Forces Act 2006, new Section 340A, asks the question:
“Who can make a service complaint?”.
The answer it gives is that:
“If a person subject to service law thinks himself or herself wronged in any matter relating to his or her service, the person may make a complaint about the matter”.
It says “any matter”, so it applies to any issue that may arise in which the person subject to service law thinks that he has not received the proper treatment.
We have been told that the majority of the complaints made concern the terms and conditions of service, but there is another significant body of complaints that concern bullying and harassment within the service. I am extremely grateful to the Minister and his team for permitting me and others to have discussions with the Bill team before we got to Report; it has been very helpful. However, I just compare this with other systems.
Let us suppose that the subject matter of the complaint is not just bullying and harassing but a serious assault and that that assault is referred to the police. The fact that the complainant dies does not mean that the police can take no action. Indeed, I recall a serious case of rape in which the lady concerned—the complainant, who was 80 years of age; and having made a complaint and had that complaint videoed—then died. Her death was nothing to do with the fact that she had been allegedly raped, but the video was evidence in the criminal proceedings that then followed at the Old Bailey. There is nothing unusual about an allegation of crime being pursued after the person who has been the victim of that crime has died.
Why should it be any different in the case of a person who complains of bullying and harassment—or, indeed, if there is a connection between the bullying and harassment, as happened in one unfortunate case that we discussed in Committee, when the complainant committed suicide? Why should her complaint not continue? If it is a matter of terms and conditions, that is very often a concern about finance—about money. Why should a person’s complaint that he has not been properly treated, and that he is entitled to a better rank or to a higher grade of pay than he has received, not continue after his death just as it would if it were a civil claim brought in the civil courts?
The Minister in replying on this issue in Committee suggested that it would be dealt with pragmatically and sensitively by the authorities, but I was not very clear precisely what he had in mind. He said:
“Although it is clear that cases involving a deceased service man or woman must be treated seriously and with respect, and that the family of the deceased have a right to know that the issues they raise will be seriously considered, the place to do this is not through the formal service complaints system”.—[Official Report, 9/7/14; col. 232.]
I do not really understand whether that is an invitation to the next of kin or the family of the deceased to start issuing civil proceedings or to appear in front of a coroner’s court or to report matters to the police. It seems to me that where the provision is that a person may make a service complaint about,
“any matter relating to his or service”,
their next of kin, whom service people are required to define, or their personal representative should be able to continue that complaint, or raise it themselves if it has not been raised by the complainant before death, in the ordinary way. I await with interest the Minister’s response to these concerns.
Lord Rosser (Lab)
My Lords, we have an amendment in this group. The noble Lord, Lord Thomas of Gresford, has made a strong case. As he said, we discussed the issue in Committee, and our amendment is the same as that which we then proposed.
We simply seek a process that would enable issues to be raised by the family on behalf of the member of the services who has died, whether the death occurs before a complaint has been made—when evidence comes to light subsequently that indicates that a complaint could be pursued—or whether death occurs when a complaint is already going through the process but has not been finalised.
Responding for the Government, the Minister in effect said that where the complainant had died, whether before a complaint had been made or after a complaint had been made but not finalised, the chain of command could decide to investigate that complaint, but that it was a matter entirely for the chain of command as to whether they did so. The Minister referred to the need for a complaints system to be fair and,
“to give equal consideration to all parties who may be involved. That means that the person making the complaint and anyone else who might be implicated in it, or otherwise affected by it, should have the opportunity to put their case”.—[Official Report, 9/7/14; col. 230-31.]
The Minister went on to say that while,
“cases involving a deceased service man or woman must be treated seriously and with respect, and that the family of the deceased have a right to know that the issues they raise will be seriously considered, the place to do this is not through the formal service complaints system. For the service complaints system to be fair, and for all of those involved to feel that it has treated them as such, it must involve all parties: the person making the complaint and those who are accused of perpetrating the wrong”.—[Official Report, 9/7/14; col. 232.]
I am not convinced that the formal complaints procedure could not handle such complaints fairly. If the evidence is not there to sustain the complaint, or there are key issues that cannot be properly investigated because the complainant, unfortunately, cannot be there, that would surely be reflected in the outcome, but that inability to obtain sufficient evidence to make a decision will not always be the case.
If, as I suspect, the Minister is not prepared to accept these amendments, or to consider the matter further, where does that leave the ombudsman in such cases? The inference must be that if a matter is not dealt with through the formal complaints system, an aggrieved party will not be able to make a complaint to the ombudsman that there has been maladministration in connection with the handling of the complaint, either through a refusal to consider it at all, or in relation to the process by which that complaint was considered.
Will the Minister also say whether or not that would be the position in respect of a complaint from, or on behalf of, a member of service personnel who is now deceased—namely, that by not dealing with the complaint through the formal complaints procedure, there could be no reference on grounds of maladministration to the Service Complaints Ombudsman? One would have thought that the ombudsman would be quite capable of making a decision on whether there was, or was not, sufficient evidence available from which to reach a fair and just conclusion.
If that is the case—I hope that it is not—and the ombudsman would have no role, do the Government really think that that is a mark of a fair complaints system which treats cases involving a deceased service man or woman seriously and with respect, and gives the family of the deceased the right to know that the issues that they have raised will be seriously considered? I am not sure that it does.
Lord Palmer of Childs Hill (LD)
My Lords, I intervene on just a couple of small points. I hope that the Minister will take regard of both these amendments. However, I want to highlight the difference between the two, which is subtle but important. When the noble Lord, Lord Rosser, said that his amendment was in the same form and words as it was in Committee, I was somewhat disappointed. My noble friend Lord Thomas’s amendment has some important differences from the amendment proposed by the noble Lord, Lord Rosser. My noble friend Lord Thomas’s amendment, to which I am a signatory, says that,
“the complaint may be made or maintained”,
whereas the amendment of the noble Lord, Lord Rosser, says only that it should be made. Very often, the complaint has been made before the person has died and therefore it needs to be maintained. It is not necessarily made after death.
The amendment proposed by my noble friend Lord Thomas refers to,
“next of kin, or personal; representative”.
Those are the correct terms in law, whereas the amendment of the noble Lord, Lord Rosser, talks about “relative or partner”. As we all know, a personal representative is not necessarily a relative or partner. If we are, by consensus, going to persuade the Minister and the Government to move on this issue, I hope that we will take those finer points into consideration.
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever) (Con)
My Lords, Amendments 1 and 2 relate to complaints about the treatment of a member of the Armed Forces who has since died. Amendment 2 would allow family members to bring a complaint about any wrong that they consider had been suffered by a serving or former member of the services who has died, but does not enable a representative of the person’s estate to pursue a complaint started before that person’s death. Amendment 1 would also allow family members to bring a complaint about any wrong that they consider had been suffered by a serving or former member of the services who has died, and in addition allow family members or representatives of the person’s estate to pursue a complaint started before his or her death.
There are two types of complaints envisaged by the amendments where a service person has died: first, complaints made by a family member, next of kin or personal representative potentially concerning a range of matters in the past where the person affected has since died and, secondly, complaints about treatment or matters alleged to be connected with the death of the service person. In responding to these amendments, I shall set out as clearly as possible how we think that complaints can—and should—be handled in different circumstances involving a serving or former member of the services who has died.
I start by making clear the purpose and primary aim of the service complaints system. It is designed to allow people to bring complaints where they think that they have been wronged or mistreated in connection with their service. Service complaints are generally about that person and concern matters that affect them personally. As the complaint is a matter personal to the complainant, it is for that individual—if needs be, with support and advice—to decide whether to initiate and pursue a complaint through the redress process rather than do nothing or deal with the matter by way of informal resolution. As a consequence, an examination of their complaint needs that person’s involvement in the process.
Lord Thomas of Gresford
Before the Minister concludes his remarks, let us assume that a complaint has been made and the defence counsel has appointed a panel to consider it. Is he saying that although the complainant has died, if it is a matter that can be resolved then the panel will continue, as opposed to it being remitted after his death to the defence counsel to deal with it as a matter of discretion?
Lord Astor of Hever
My Lords, I am saying that the chain of command would want these matters resolved. It is part of the Armed Forces covenant that these sorts of situations are clarified.
Lord Rosser
May I ask a further question? In the scenarios that the Minister has referred to, if the family of the deceased were dissatisfied with the outcome, would they then be able to refer the matter to the ombudsman, on the basis that there had been maladministration, or would they not be able to make such a reference?
Lord Astor of Hever
The answer to that is no. The noble Lord asked me earlier whether next of kin, families or personal representatives could make applications to the ombudsman where a complaint had already been made. The answer is no; they could not if no application had previously been made. If an application to the ombudsman had been made by the complainant before they died, there may be circumstances in which that could continue, depending on the feasibility of doing so and on whether appropriate redress could eventually be granted. This would apply equally to the bringing of an appeal in the internal system. As I said to my noble friend, if there is serious redress or something that needs to be put right, that would be within the interests of the Armed Forces and I am sure that the chain of command would want the situation to be rectified.
Treating families with concerns seriously, and being seen to do so, is important if we are to maintain confidence in the Armed Forces more generally. It is in everyone’s interests to address any feelings of injustice that bereaved families may have and to reach a satisfactory outcome where possible. Where these concerns are potentially related to the individual’s death, we would expect the chain of command to consider the concerns very seriously and whether appropriate action can be taken as a result of the claims. I hope that noble Lords will gain a degree of comfort from what I have said and will be prepared to withdraw their amendment.
Lord Thomas of Gresford
My Lords, I do not propose to seek the opinion of the House on this but I would welcome further discussion to clarify what I think is not clear at the moment. It seems that if a person dies having made a complaint, it is just a matter for the defence counsel. I do not doubt their good will, their desire to appease the family and so on, but with a formal complaints system it should be more than that: the family should have a right to have the matter properly determined. I am still very uneasy about what has been said. When it comes to the death arising out of the matter of complaint, one thinks of the Ellement case where the complaint was of bullying but the death was caused by suicide. What is the situation there? Is it to be said that an inquiry is going to be set up in such circumstances, or what? I am still uneasy about this and I hope to have further discussions with the Minister but, for the moment, I beg leave to withdraw the amendment.
Lord Rosser
“( ) for a service complaint against a member of the Royal Military Police to be made to an officer of a specified description;”
Lord Rosser
My Lords, in Committee I raised the question of the intended role for the ombudsman as regards the Royal Military Police, both in respect of complaints raised by members of the RMP in connection with their working environment and situation and those raised by service personnel about the activities of the RMP and how it had carried out its role. The Minister drew attention to the fact that he had sent me a letter on that issue two days previously, and I responded by saying that I thought it would be helpful to have the information in the letter with regard to the role of the ombudsman on the record in Hansard. The purpose of my amendment today is, I hope, to achieve that objective, and nothing more.
The Minister’s letter covered the procedures that relate to service police officers in all three services, not just those in the RMP. On the assumption that the Minister will cover the position comprehensively in his reply, I do not intend to refer to any parts of the letter, with one exception. The letter indicated that the Government were also looking at other ways in which serious allegations and complaints made against members of the service police could be investigated. I simply ask whether the Minister is able to give any sort of timescale within which that exercise is expected to be completed. I beg to move.
Lord Astor of Hever
My Lords, Amendment 3 deals with how the proposed service complaints system will work with regard to the Royal Military Police. I can confirm that the provisions of the Bill apply in much the same way to complaints concerning members of the service police as they do for any other service person. For example, where a service person believes they are bullied by a service policeman acting in the course of their duties, they can complain about that.
There is one exception in that service complaints cannot be made about decisions a service policeman has made following an investigation about whether to refer a case to the Director of Service Prosecutions under Part 5 of the Armed Forces Act 2006. That circumstance is specifically excluded from being dealt with as a service complaint under the current regulations, and the intention is that it will remain so under the new regulations.
The reason such decisions are excluded is that, as a matter of principle—and this is important—the chain of command should not be able to interfere with prosecutorial decisions in the service complaints system. However, as in the civilian context, there are mechanisms for challenging such decisions via the courts, either during service proceedings or by way of judicial review.
For completeness, I will make another point: a member of the service police can complain about the same matters as other members of the Armed Forces and is subject to the same exclusions and other rules if he or she believes they have been wronged; for example, about pay, appraisals or any other matter. As such, under the new process the member of the service police would also have access to the ombudsman.
As regards who the specified officer would be in respect of any service complaint—as is clear from draft regulation 3 of the draft Armed Forces (Service Complaints) Regulations—that would ordinarily be the complainant’s commanding officer. There is no separate procedure or route for service complaints about the Royal Military Police, nor is that required. The role of the specified officer is to consider whether the complaint is admissible or not. If that person decides that the complaint is inadmissible, the complainant can ask the ombudsman to review that decision, and any decision on the admissibility of a service complaint by the ombudsman is binding.
Finally, we are also considering other ways in which serious allegations and complaints made against members of the service police might be dealt with. However, there are a number of complex issues to consider, including how any new arrangement could work in the context of an operational theatre and the need for an extension of statutory powers. We expect to conclude this work in time for next year’s armed forces Bill. I hope that that answers the question of the noble Lord, Lord Rosser.
I hope that I have provided noble Lords with reassurance that the ability already exists for a service person to make a service complaint about the way in which a service policeman has conducted themselves in their role. On that basis, I ask the noble Lord to withdraw his amendment.
Lord Rosser
I thank the Minister for his response and for placing on record in Hansard the thrust of the letter that he kindly sent to me. I am very grateful to him for doing so and I beg leave to withdraw the amendment.
Lord Rosser
“( ) The Ombudsman may, after advising the Secretary of State, investigate any matter deemed to be in the public interest on—
(a) any aspect of the system mentioned in section 340O(2)(a);(b) any matter relating to the Ombudsman’s functions under this Part;and make a report to the Secretary of State.”
Lord Rosser
We discussed this amendment in Committee. The noble Lord, Lord Thomas of Gresford, has also tabled an amendment with what I think I can describe as similar intent. The purpose of my amendment is to give the ombudsman rather wider powers to be able to report on thematic issues without being dependent on the Secretary of State asking for such reports. I do not intend to repeat all the points made in Committee in favour of such an extension of powers. However, it is worth pointing out that, under the present arrangements, the Secretary of State for Defence has never asked the present commissioner to report on a particular area of concern that she or the Secretary of State may have outside her normal reporting cycle.
The Defence Select Committee in the other place has already said it believes that there would be value in the commissioner being able to undertake research and report on thematic issues in addition to the annual reports, and that the commissioner’s experience on these issues should be utilised. The committee came to this conclusion at least partly in the light of what the commissioner had said on this matter when she appeared before the Select Committee to give evidence.
When the Minister gave the Government’s response in Committee, he said:
“The ombudsman’s scope for raising issues of concern also extends to the provisions made in new Section 340L for the ombudsman to make recommendations as a result of finding maladministration”,
and that such recommendations,
“could relate to systematic issues”.
However, the Minister also said that the amendments being debated extended the ombudsman’s remit “beyond that required”, which would suggest the Bill does not give the ombudsman the wider powers being sought by the Defence Select Committee. That committee also reported that, during visits to units, the current commissioner had been informed of issues that would not come to her as complaints but on which she thought some work needed to be done. Such issues would presumably not be covered by new Section 340L, which relates to recommendations as a result of a finding of maladministration.
I am also conscious that in Committee the Minister indicated concern that,
“an ombudsman with a wider remit to investigate matters of their own volition”—
notwithstanding first notifying the Secretary of State of their intentions—
“could overlap with … other jurisdictions and cause confusion and difficulties”.—[Official Report, 9/7/14; col. 243.]
One would have thought that that situation could arise under the powers in new Section 340L, in respect of which the Minister has said the ombudsman could make recommendations relating to wider systemic issues as a result of finding maladministration. The Bill is not at all clear on what investigations the ombudsman can or cannot carry out of his or her own volition beyond investigating an individual complaint of maladministration. I certainly do not believe that the Bill provides for what is being sought in my amendment. Neither do I think that the Bill makes clear the scenario for wider investigations carried out by the ombudsman referred to by the Minister in Committee.
Obviously I would like the Minister to accept the terms of the amendment, but if he is unable to do that I hope that he would, without commitment, at least agree to reflect further on the wording in the Bill with a view to ensuring that it is clear precisely what the ombudsman can or cannot investigate and make recommendations on beyond an individual complaint of maladministration, and thus enable further consideration to be given to this matter at Third Reading, if felt necessary. I beg to move.
Lord Thomas of Gresford
My Lords, like the noble Lord, Lord Rosser, I am very much concerned as to what the ombudsman thinks he can do when he has an issue before him. If he foresees or realises that there is a culture within a particular unit in the Armed Forces that involves bullying, initiation ceremonies or matters of that sort, what can he do? Is he restricted simply to reporting on an individual complaint or is he entitled to tell the defence counsel that there is a much more serious widespread issue here that has to be tackled?
When we discussed this in Committee, the Minister said that the Bill already offered,
“sufficient scope for the ombudsman to raise wider issues in appropriate ways, as they see necessary, and to provide an input to investigations or inquiries conducted by other appropriate bodies”.—[Official Report, 9/7/14; col. 243.]
It would seem from that reply—and I have had discussions with the Bill team—that the ombudsman would be entitled to file a report, and not just an annual report but a report from time to time, in which he could draw the attention of the defence counsel to thematic abuse that he has seen, from the consideration of a number of individual cases. If the Minister can confirm that, many of the concerns that the noble Lord, Lord Rosser, and I have expressed will be met. But it is not clear from the Bill’s wording, and I look forward to what the Minister says.
Lord Palmer of Childs Hill
My Lords, I draw attention to a couple of words in Amendment 5— “compelling circumstances”. I did not invent those words; they came from the Canadian legislation on this subject. I have always been a great believer that you should not reinvent the wheel when another Administration, and a member of the Commonwealth, have in their ombudsman regulations the provision for the ombudsman to carry out an investigation “in compelling circumstances”—so it is not just as a normal, run-of-the-mill decision. I hope that the Minister at some stage, even at Third Reading, can somehow give the ombudsman that additional power if the compelling circumstances should arise.
Lord Astor of Hever
My Lords, whether the ombudsman can investigate wider issues was the subject of a good debate in Committee, and I do not intend to repeat my response. Instead, I hope to provide noble Lords with clarity on how the ombudsman would deal with wider issues or possible examples of systemic abuse that come to his or her attention under the reformed service complaints system. I hope that this clarity will go some way towards dealing with the issues raised by the noble Lord, Lord Rosser, and my noble friends Lord Thomas and Lord Palmer of Childs Hill.
First, I assure the noble Lord, Lord Rosser, that the ombudsman will be able to look into any matter relating to the service complaints system or the functions of the ombudsman and that he or she is already required by the Bill to report on these matters to the Secretary of State. We are absolutely clear that, when the ombudsman comes across issues of wider concern relating to service complaints, the ombudsman can and should report on these issues. If systemic failings are identified through the complaints system, it is important that those are brought to the attention of both the individual service and the Ministry of Defence. Where things are going wrong, we want to know about them. It is also important that where the ombudsman identifies these wider issues or trends, these concerns are made publicly available. The ombudsman will see a lot of information as part of their role and this means they will be in a unique position to identify any systemic issues. In addition, new Section 340O(6) will allow the Secretary of State to require the ombudsman to report on any matters on a stand-alone basis at any point during the year regarding the efficiency, effectiveness and fairness of the system for dealing with service complaints or the exercise of the ombudsman’s statutory functions.
As a consequence of new Section 340O, the Bill gives the ombudsman scope to use their judgement to cover such matters in the annual report as they think relevant to the operation of the system or to the exercise of their role. The ombudsman’s annual reports, like those of the commissioner, will be able to look widely at the system of redress, the sort of complaints that are encountered and what sort of failings and misconduct the system has to deal with. This is a broad and appropriate role for the ombudsman to have using his or her knowledge and experience of the redress system.
It is also important for any organisation to know on a cultural or systemic level when and where things are going wrong, and the services are no different in this regard. By seeing complaints from across the services, the ombudsman will be in a unique position to identify connections between individual complaints—whether they come from a particular area or deal with similar issues. That ability to be able to identify trends means that the ombudsman will be in a key position to comment upon, or make recommendations in respect of, issues that go wider than individual complaints. It will also mean that the ombudsman will be able to provide valuable insight to any investigation or inquiry commissioned into such matters.
Moreover, the ombudsman, through the production of individual investigation reports, as required by new Section 340L, will be able to draw out recurring themes throughout the year as and when appropriate, rather than waiting until the production of the annual report —if, in the ombudsman’s opinion, the circumstances necessitate that.
For example, it may well be appropriate for the ombudsman to highlight where a number of complaints have been made about a similar issue or individual, or where in respect of the handling of complaints of a particular nature such as discrimination, a consistently high number of applications alleging maladministration are made. It would be right to draw out such matters, as new Section 340L(3) is broad enough to include the making of recommendations beyond those solely relating to maladministration, to addressing the effectiveness of the redress system or other systemic issues. Such wider recommendations could concern the better handling and investigations of complaints of a particular nature where there is a finding of maladministration in connection with the handling of the complaint at hand. In addition, such recommendations could well concern the commissioning of training in carrying out investigations into certain matters—discrimination being a good example—or appointing a subject matter expert to investigate systemic issues or concerns that have apparently arisen. It is then fundamentally down to the services to respond appropriately and we would expect them to do so.
New Section 340O requires the Secretary of State to lay the ombudsman’s annual reports before Parliament and we expect that, as with the commissioner’s annual reports, the reports will also be published on the ombudsman’s website. We envisage that following individual investigations, at the appropriate time, and taking account of any relevant sensitivities or information law provisions, summaries of those investigations that draw out and publicise any wider areas of concern may also be published. How that might work in practice will be the subject of discussion with the next commissioner, who will become the ombudsman.
Lord Rosser
I thank the Minister for his comprehensive reply. I will certainly read Hansard carefully. He made a number of what appear to be very clear and specific statements about what the ombudsman would and would not be able to do, but I will want to satisfy myself on the extent to which he has cleared up all the issues to which I referred. I suspect that there may still be some uncertainties. However, I am very grateful to the Minister for saying that he will reflect on the points that were made by myself and his noble friends Lord Thomas of Gresford and Lord Palmer of Childs Hill—which will, if necessary, give us an opportunity to discuss the matter further at Third Reading. In view of that, I beg leave to withdraw the amendment.
Lord Kennedy of Southwark
Lord Kennedy of Southwark (Lab)
My Lords, first, I declare an interest as a director of London Mutual Credit Union. This amendment would put in the Bill a specific indication that the establishment of a credit union for the Armed Forces will come under the scope of the Bill when it becomes an Act of Parliament, and that the establishment of such a credit union would be for the benefit of the Armed Forces community.
A lot has been said in this Chamber about credit unions and I have been a supporter of them my whole adult life. Last year, I was delighted that we were able to establish a credit union for the whole of Parliament. Anyone working in Parliament can now join it. Credit unions provide fair and affordable lending to people—often the same people who are excluded from access to other forms of lending by banks and building societies. They are also able to help people start to save, as learning to save and to manage your budget are of almost equal importance. Specific products such as jam-jar accounts have been developed to help people meet their bills and avoid getting into debt or further debt.
The bigger credit unions will be able to offer ISAs and mortgages at competitive rates. The interest rate cap for credit unions has just been raised and stands at a maximum of 42.6% per annum on the money it lends out. We in this House and elsewhere all hold our Armed Forces and the forces community in high regard. They put themselves in extraordinary danger in order to keep us safe at home, and we all owe them a great debt. However, like any other group of people they can experience pressures and problems. The problem of debt and the misery that it brings is also experienced in military community families, and that is why I tabled the amendment. We owe a special duty to people in the military family.
We have all been rightly disgusted by the activities of companies such as Wonga and the outrageous rates of interest that they charge. There are other companies which target the military community, such as Forces Loans, which offer loans to military families at rates of 3,351%—or QuickQuid, which states on its special military site, “You provide security protection for your country—shouldn’t you arm yourself against financial problems, including access to military loans? We will charge you an interest rate of 1,734%”.
Over the last couple of years, I spent time with the RAF as part of our Armed Forces Parliamentary Scheme. Whenever I arrived at an RAF station, the welfare officer or the chaplain would tell us of the problems that service men and women and their families had. Often they were about debt and the lack of money. I recall an RAF chaplain telling me that on Sunday he would conduct his service, and for the rest of the week he would spend his whole time helping families of all faiths, or no faith, across the base to deal with their financial and other problems.
When I saw the Armed Forces (Service Complaints and Financial Assistance) Bill, I thought that this was a Bill that was saying enough is enough. We owe a duty to our service men and women and their families. That duty extends to their financial well-being, and establishing a military credit union will go a long way towards helping that community. A community bank will understand them and their needs. This will not take a lot of money; it just needs support and commitment from the MoD to make it happen and to encourage its development.
Will the noble Baroness, Lady Jolly, who is responding, agree to arrange a meeting with Anna Soubry, the Minister responsible, before we come back from the Recess? Will she also allow me to bring the issue back at Third Reading so that I can report back on what has happened between now and then? There is not much division on this issue in the House but we need to make it happen, and this is the Bill to do it. I beg to move.
The Lord Bishop of Sheffield
My Lords, from these Benches I welcome the amendment in the name of the noble Lord, Lord Kennedy, and give it our full support. The amendment gives strong support to the setting up of a credit union for the Armed Forces and their families in a similar way in which the church is setting up its own credit union—the Churches’ Mutual Credit Union. The Armed Forces, like the clergy and other groups, need a source of affordable credit for short and long-term needs. As a society we have a duty of support and care to our Armed Forces. Recent research in a number of strands shows clearly that the ability to obtain credit at reasonable rates of interest is a vital element in building resilience to poverty and debt across our whole society. The inability to obtain such credit in times of need raises the possibility of falling further into debt, of food and fuel poverty and of a downward spiral.
An occupationally based credit union is not only a safety net but something that will further encourage service personnel, as we have heard, to plan financially for current situations and future needs. Other professional bodies and occupations, such as the police and trade unions, already offer a credit union to their members. In the USA, the navy has long had a credit union. Founded in1933, the Navy Federal Credit Union is the world’s largest credit union with more than $60 billion in assets, more than 5 million members, 247 branches and more than 11,000 employees worldwide.
A credit union for the Armed Forces has the potential to make a significant difference in the long term. If I understand the proposal of the noble Lord, Lord Kennedy, correctly, the Navy Federal Credit Union does for US service personnel exactly what the proposals in the amendment would offer Her Majesty’s Armed Forces. The Navy Federal Credit Union could provide an interesting model by which to shape our own service personnel credit union. On 8 April in another place, the Under-Secretary of State for Defence, Philip Dunne, made positive comments and commitments to the notion of a service personnel credit union. Will the Minister in his closing remarks comment on the progress of discussions with the credit union trade body and the service charities referred to on that date by the Under-Secretary of State?
Lord Deben (Con)
My Lords, the Minister will have been under the usual pressure to say that this provision is probably not suitable for this Bill and that there are all kinds of reasons why it will not quite work. Perhaps his officials will have used the words that I well remember as a Minister: “Better not”.
I suggest to my noble friend that this is the kind of opportunity that rarely comes when a Member has raised an issue for which there is no convenient box in other Bills. I must say that the whole House owes a great deal to the noble Lord opposite for having found this moment for the amendment. I therefore very much hope that my noble friend will be sensitive to this issue. It is in line with much of what we are trying to do elsewhere and is the best way to counter the sharks. Actually, legislation does not help much with sharks because they always find a way around it, but if one can provide an alternative to the sharks, one is more likely to win the battle.
It is notable that throughout our society the encouragement of the credit union movement by all sorts of organisations—I have recently come across several examples—is something that can do only good because it uses three simple concepts. First, people need to borrow money from time to time. Even the best-organised families find that to be necessary so there ought to be a way in which they can do it. Secondly, there is no doubt that within the Armed Forces there are many for whom pay and conditions are not absolutely perfect and where there are stretching moments—perhaps more so than in other jobs. Thirdly, as the noble Lord opposite said, we owe our Armed Forces a particular debt and, because of the things we ask them to do and the places we ask them to go to, it is often more difficult for them to access the sort of short-term help that many people receive from family and friends. That just happens to be part of the conditions of being in the Armed Forces.
I very much hope that my noble friend, who has shown himself to be particularly sensitive on many issues, will be able on this occasion to give us some hope that he can persuade others to accept that this is a sensible place to put the amendment and to give some degree of creativity to a Bill which, although important, is not the most exciting to have come before this House. I have sat through most of our proceedings and I have to say that this nugget, if my noble friend is able to give it his blessing, might well be the thing that people remember the Bill for.
Lord Rosser (Lab)
My Lords, I congratulate my noble friend Lord Kennedy of Southwark and the right reverend Prelate on introducing the amendment and on the powerful case that they have put forward. I certainly do not intend to repeat all the points that have been made, not least because the Ministry of Defence already recognises the importance of this issue.
As has already been mentioned, the former Parliamentary Under-Secretary of State for Defence, Dr Andrew Murrison, said this year that as part of the department’s,
“ongoing efforts to better support our service personnel, the MoD is currently considering the benefits of an armed forces credit union. However, no decision has yet been taken”.—[Official Report, Commons, 24/2/14; col. 63W.]
The Ministry of Defence has, of course, introduced the MoneyForce programme to provide service personnel with advice and training on finances. Welcome though that scheme is, it does not provide service personnel with an alternative to their current arrangements. I hope that the Minister will be able to tell us when the Ministry of Defence is going to make a decision, as a military credit union would offer a financial lifeline to a great many serving personnel, veterans and their families. We support such a move, and in that I think we have the Department for Work and Pensions in our corner, as it has been supporting the expansion of credit unions across the UK since 2012, following its own feasibility study, which found that around 7 million people fall into the trap of high-cost credit.
One of the advantages of a credit union is that it can offer specialised financial products and services designed to meet the particular needs of the communities it serves. That means that the very specific circumstances and situations that military personnel, veterans and their families often face—such as living apart, or moving house a considerable number of times—can be factored in to financial decision-making and advice.
The Government—any Government—have a responsibility to source an adequate route to financial security for Armed Forces personnel, veterans and their families, under the obligations placed on them by the Armed Forces covenant, which states that, where possible, disadvantages should be removed so that military personnel are able to enjoy the same opportunities and outcomes as the civilian community. The reality is that many military personnel and their families are limited in their access to secure finance, due to circumstances arising from the duties they perform, and the service they give, on behalf of us all. I very much hope that the Minister will be able to give a helpful and meaningful response to the amendment in the names of my noble friend and the right reverend Prelate.
Baroness Jolly (LD)
My Lords, I feel that I should make a declaration at this stage as I have been a member of a credit union for many years. In order to become members of such a union we first had to set one up, so we set up a credit union in Cornwall; Cornwall is its common bond.
I thank the noble Lord, Lord Kennedy of Southwark, and the right reverend Prelate the Bishop of Sheffield for bringing forward the important issue of credit unions and congratulate them both on championing this cause. As the noble Lord, Lord Kennedy, has outlined, credit unions are not-for-profit financial co-operatives owned and controlled by their members and they must have a defined “common bond”. This could be a shared geography, such as Sheffield or my own county of Cornwall, or a shared job or employer, such as employees of BAE Systems, members of a police force, or even members of the clergy. Credit unions provide savings and loan products designed to meet the needs of their community. They are designed to instil a culture of regular saving, and thence access to affordable credit when needed. In effect they are ethically based, democratically controlled, community-owned financial institutions that offer an alternative to high-cost payday lenders and conventional banking.
As noble Lords will be aware, the Government actively support credit unions and have been working to increase access to affordable credit. We have invested £38 million in the Credit Union Expansion Project and are working with the Association of British Credit Unions to look at how credit unions might be expanded to benefit a broader section of the community. The Government’s commitment was underlined in a recent House of Commons adjournment debate. For the record, I would like to highlight some of the key points from that debate. Credit unions do have a role to play in supporting our Armed Forces communities. Financial pressures exist within service households just as they do in the wider community. But for too long there have been factors that exacerbate the problems faced by the Armed Forces community. Often this is nothing to do with people’s creditworthiness, but reflects the nature of a peripatetic career that prevents them developing a proper credit history.
The Ministry of Defence has recognised these difficulties and has undertaken a great deal of work, under the Armed Forces covenant, to address the disadvantages. We are working with the financial services industry to ensure that it understands the unique circumstances of the Armed Forces community and to ensure that it is not unfairly disadvantaged. As part of this we have introduced UK postcodes for overseas locations to help Armed Forces personnel serving overseas to maintain a UK credit history that is recognised by financial service providers and to allow improved access to financial products. In partnership with the Royal British Legion and the Standard Life Charitable Trust, we have developed the MoneyForce financial capability programme, which delivers training and briefings, and provides resources and online support to help the Armed Forces community manage its money and financial affairs better.
Despite this support, there are still those in the Armed Forces, as among the public at large, who end up requiring a loan but get into difficulty with debts at high interest rates owed to payday lenders. Members of the Armed Forces and their families can of course already, providing they meet the common bond for membership, apply to join an existing credit union to access the range of financial services offered. However, unlike in the US, as we have heard, and some EU states, coverage in the UK is not national and the services vary. Therefore, significant thought has been given to whether to create a dedicated Armed Forces community credit union.
UK credit unions traditionally grow organically from small beginnings which may take many years to cultivate their membership. Several thousand members are required for a credit union to achieve long-term self-sustainability to offer a tailored suite of products which meets the needs of its members. What makes credit unions unique and makes them work is their independent spirit. They are created by the people for the people and they offer products that their customers want, because their customers are also their members. Credit unions grow steadily and organically from small beginnings, and normally take many years to cultivate their membership. To give one example, the Glasgow Credit Union Limited was founded by two members in 1989 as the Glasgow District Council Employees Credit Union. I am sure that the noble Lord, Lord Kennedy, will recognise that type of model. Over its 25 years, it has grown to a membership of 32,000 and some £100 million in assets.
Unlike payday loan companies, credit unions are a positive force in the community around them. They benefit members and local economies alike. However, it would not be in anyone’s interests—the taxpayer, the UK financial services industry or members themselves—to try to shoehorn such an institution of this kind into a Whitehall department. The savings of our service personnel should be properly stewarded, managed and regulated. As noble Lords will appreciate, this is not core business for the Ministry of Defence and would involve financial, reputational and resource risk.
Out of the corner of my eye, I see my noble friend Lord Deben suggesting that this is an “I told you so” moment—but there is some light here. The Minister for Defence Personnel, Welfare and Veterans met interested members of the House, including the chair of the All-Party Parliamentary Group on Credit Unions, representatives of the Association of British Credit Unions Limited and the chief executive of the Plane Saver Credit Union, to discuss how the MoD might support access to credit unions by the Armed Forces. Officials are now actively exploring the support that the MoD could offer. A number of issues are being considered, including the criteria a credit union should achieve to receive MoD support and the education of the service community in order to facilitate informed choices. To add a personal note, when we set up our credit union, one of the most difficult things was to inform people what a credit union does and how it works. Further issues being considered are how credit unions can be accessed by service personnel and the potential for payroll deduction to reduce the administrative costs of running a credit union.
The organisation of credit unions has always been, and must continue to be, the remit of the private and the voluntary sectors. However, the Ministry of Defence will support organisations with the wherewithal to put in place a credit union to support the men and women who have served this country with such distinction.
I hope that this has provided noble Lords with some assurance on the Government’s position on credit unions. However, I think that including specific provision on credit unions is unnecessary in this Bill and would take us away from the primary purpose of Clause 4, which is to provide the legal basis for funding charitable, benevolent and philanthropic organisations that support members of the Armed Forces community throughout the United Kingdom. On that basis I ask the noble Lord to withdraw his amendment. However, we will take away the suggestion of the noble Lord, Lord Kennedy, of a meeting with Anna Soubry and see what can be done before Third Reading.
Lord Kennedy of Southwark
I thank all noble Lords who have spoken in the debate. I am not entirely pleased with the Government’s response. I do not understand the reputational risk to the MoD. It is the same reaction I got when I raised the issue of a credit union in Parliament a year or two ago. I was told by officers in both Houses that because of the reputational risk and all the problems I would have it would not happen. Finally, we got there and it now happily works in both Houses of Parliament, with no particular risk. I do not understand the risk in facilitating a voluntary body that provides affordable credit to our Armed Forces community. I think that is quite disappointing. I hope that we can have a meeting before Third Reading and I hope to be able to bring something back at Third Reading as I think this is an important issue.
I thank the right reverend Prelate the Bishop of Sheffield for his support. I very much agree with the comments he made about Navy Federal. It is the biggest credit union in the world. It happily serves the whole of the armed forces of the United States. There are no problems there at all. I am sure that it would give us some assistance and support in getting a credit union fully established in the UK for the military community. I thank the noble Lord, Lord Deben, for his comments. He made the case for supporting credit unions much more eloquently than I could make it. I was very hopeful when he spoke that maybe he knew something that I did not know and that we would be able to get a better answer from the Government. Clearly that was not the case. I was also pleased with the support of my noble friend Lord Rosser from my own Front Bench.
I am disappointed with the response. I think we should do more than this. I hope I can bring the amendment back at Third Reading. With that, I beg leave to withdraw the amendment.