War Pensions: Uprating

Earl Howe Excerpts

Monday 11th January 2016 Lords Chamber

[Lord Touhig]

To ask Her Majesty’s Government, further to the Written Statement by Earl Howe on 9 December (HLWS366) on the 2016 Uprating of the War Pensions Scheme, when war pensioners can next expect an increase in their pensions.

[The Minister of State, Ministry of Defence (Earl Howe) (Con)]

My Lords, the reason war pensions are uprated is to ensure that they reflect any increases in the cost of living. They are uprated annually in line with the consumer prices index—CPI—figure, which is the same measure the Department for Work and Pensions uses for uprating social security disability benefits and is in keeping with other public service schemes. Our approach ensures consistency with the measure of inflation used by the Bank of England. War pensions will increase when the annual CPI figure next increases.

[Lord Touhig (Lab)]

The Government deserve credit for enshrining the Armed Forces covenant in law, and I am sure that the entire House endorses the words of the Defence Secretary, who said in the latest covenant report that,

“we have a duty to ensure that our servicemen and women are treated fairly”.

Yet within days of his making that statement, his department published a Written Statement entitled War Pensions Scheme—Uprating 2016, although there is no uprating, and in fact war pensions have been frozen for two years. Does the Minister agree that war pensioners should be treated the same as, say, someone like me, who is in receipt of a state pension, which, as a result of the triple lock, is guaranteed to increase every year? As the Defence Secretary said, we have a duty to ensure that our service men and women are treated fairly, and surely none more so than those who have been injured while serving our country.

[Earl Howe]

My Lords, it is important to make it clear that despite its name, a war disablement pension is not a state pension but a form of compensation for disablement and/or injuries caused by service to the country. It is tax free and payable in addition to the state retirement pension. Payments are set at a higher rate than similar disability benefits and most war pensioners who have reached retirement age will be in receipt of both pensions.

[Baroness Jolly (LD)]

My Lords, the war pensions scheme includes allowances related to employment, so the annual uprating should be related to earnings inflation and not price inflation. Will the Minister tell the House what it would cost the Treasury to link the war pensions scheme to earnings and not to inflation?

[Earl Howe]

My Lords, I know that the Royal British Legion has come up with its own calculation. To answer the noble Baroness’s question, I am not aware that the Treasury has done so. However, the principles should be clear here. Under the Armed Forces compensation scheme and the war pensions scheme which preceded it, an injured service man or woman is assessed on their level of disability, and based on that assessment they are compensated for their deemed loss of earnings in civilian employment. After that, the guiding principle is that the real-terms purchasing power of the annual payment should be maintained, and it is therefore indexed to the consumer prices index, which, as I said, is the index applied by the DWP to all disability benefits.

[Lord McFall of Alcluith (Lab)]

My Lords, the Royal British Legion is very clear in saying that war pensions are losing value compared with military and civilian salaries. It is inexplicable that our injured and disabled comrades cannot have the same as others in society—the triple lock. Is it not a sad commentary that the Royal British Legion and others are correct in saying that, in this case, we are not all in this together?

[Earl Howe]

My Lords, the triple lock applies only to the basic state pension. Members of the Armed Forces will therefore benefit from the triple lock once they reach state pension age, but there are broader issues to be considered here. One is that maintaining parity with social security disability benefits is in principle the right thing to do, but secondly, there is the affordability issue. As a Government and, I believe, as a nation, we have to stick with the long-term economic plan and we have to continue to live within our means.

[Lord Foulkes of Cumnock (Lab)]

Is the Minister not surprised that no Conservatives are rising to their feet to defend our servicemen? They are quite prepared to go along and lay a wreath and to go on marches, but when it comes down to it, the Minister gave it away: he said the word “affordability”. These are people for whom we must afford to uprate their disabled benefits, along with pensions; otherwise, we are really not honouring the memory of those who died for our country and served it so well.

[Earl Howe]

As I have explained, we do uprate the war pensions scheme, in line with the CPI, which is exactly the measure used by the DWP for all disability benefits, so those people are not disadvantaged.

[Baroness Gardner of Parkes (Con)]

I had a past interest as the first chairman—I suppose that was my title—of the War Widows’ Association. Indeed, my noble friend Lady Fookes is now in the same position and has been very successful in that regard, as have other Members of this House. Can the Minister tell me whether the wonderful change, brought in by a Conservative Government, whereby war widows can marry again without losing their pension, is affected in any way, or will they still be able to live whatever life they choose as the widow of a war pensioner?

[Earl Howe]

My Lords, a change was introduced. As from 1 April last year, those who are widowed and have a war widow’s pension can keep that pension whether or not they subsequently marry. However, regarding cases that fall before that cut-off point, it has been the policy of successive Governments that changes or improvements to all public service pension schemes should not be applied retrospectively, so there are no plans to reinstate war widows’ pensions for war widows who remarried between 1973 and 2005. However, from 1 April last year, those who have already surrendered their pension due to remarriage or cohabitation can apply to have their pension restored for life, should that relationship end.

[Lord West of Spithead (Lab)]

My Lords, 210 years ago on Saturday, Lord Nelson was put in the crypt at St Paul’s. He always said that when he died, he would have “lack of frigates” engraved on his heart. We had some 220 frigates at that stage; we now have 13. Does the Minister feel that Lord Nelson might be a little disappointed by that, and when will he order new frigates to replace the ageing ones?

[Earl Howe]

My Lords, with great respect to the noble Lord, I think that is another question.