Veterans’ Pensions

Ian C. Lucas Excerpts

Monday 16th March 2015 Westminster Hall

[Ian Lucas (Wrexham) (Lab)]

It is a real pleasure to speak in this debate with you in the Chair, Mr Davies. I congratulate my hon. Friend the Member for North Ayrshire and Arran (Katy Clark), who is a good friend, on introducing this debate on a complex aspect of pensions. She has done a lot of work over several years on behalf of individuals in the armed forces who have been disadvantaged by past errors, some of which she outlined in her speech. At the outset, it is right for us all, across the House, to restate our recognition of the huge debt of gratitude that we owe our servicemen and women, their families and our veterans. They have made, and continue to make, huge sacrifices in defence of our freedom and in the service of the nation.

Those who served before 1975, as we heard from my hon. Friend, spent a great deal of effort in service of the nation, in exactly the same way as did those who have served since. However, the difference in provision made for those two groups is striking. It is right to single out the 250,000 people who made such a commitment to the service of our country but who have not received the same level of provision and support from the state as others. They deserve no less recognition than those who have received benefits since 1975 for making the same commitment.

I am proud of the work done in recent years by Governments of all colours. I am particularly proud of the work done by the Labour party in government and, more recently, in opposition to advance the rights of, and protections for, our armed forces community. Hon. Members across the House are proud of the work that they do in their local communities with veterans’ organisations, which are respected and valued in those communities. Wrexham, which I have the honour of representing, is an Army town that has the great tradition of the Royal Welsh Fusiliers. One of the most satisfying aspects of my job is meeting, through the armed forces and through veterans’ organisations, service personnel from different generations. I thank them for being so generous in sharing their experiences and knowledge with me, and helping me to do my job better.

The development of the veterans’ movement, if I can call it that, over the 14 years in which I have been in Parliament has been one of the most positive aspects of the relationship between communities and the armed forces. The active service of our service personnel in places such as Afghanistan and Iraq has led to strong support for our armed forces and a greater understanding of the commitment that they show. We are considering the question of veterans’ pensions in that context.

The Labour Government before 2010 sought to modernise and develop services for veterans, and successive Labour Ministers with responsibility for veterans worked with the armed services, with veterans’ charities and support groups, and with local communities to offer practical help to veterans and their families. That work led in 2008 to the Command Paper entitled “The Nation’s commitment: cross-government support to our armed forces, their families and veterans”. That was the precursor to the armed forces covenant, for which we campaigned long and hard, and which we welcome. As a result of that covenant, we all recognise that we have a moral obligation to the members of our armed forces, to veterans and to veterans’ families. We recognise that no serving or former member of the forces, or their families, should be disadvantaged as a result of the service that they give our country. I am proud of the Labour party for holding the Government to account, when it comes to enshrining the rights of our armed forces and their families in law. A future Labour Government will build on that work, and I am certain that hon. Members will hold them to account for it.

There are estimated to be 4.5 million veterans in the United Kingdom, and some 250,000 of them are disadvantaged because they left the forces before 1975 and did not have the kind of pension provision that exists today. Several of those veterans, and organisations working on their behalf—such as EFVA, which my hon. Friend mentioned—have spoken out about the pension arrangements for those who served before the establishment of the armed forces pension scheme. As we have heard, those who left before 1975 and who served for fewer than 16 years as an officer, or 22 years for all other ranks, were not entitled to receive a service pension. That gives us some indication of the perception of pensions before 1975, because those figures represent a substantial period of service for which to make no pension provision. When the armed forces pension scheme was introduced in 1975, servicemen and women were required to have completed only two years’ reckonable service to be entitled for most pension options.

Pensions legislation for our armed forces has been updated several times since then. The armed forces pension scheme 2005 provides access to pension benefits for servicemen and women with two years’ service. Next month we will see the introduction of the armed forces pension scheme 2015, which will create one pension scheme for all, including reservists. I very much sympathise with anyone who retired from the armed forces prior to the qualifying period for the armed forces pension scheme of 6 April 1975, because since then, there has been such substantial development of pension provision for individuals within the armed forces.

Some 250,000 veterans have been disadvantaged by leaving the armed forces before 1975. Concerns have been raised not only because serving personnel were not allowed to invest in occupational pensions prior to 1975, but because when legislation was passed in 1973 to pave the way for the armed forces pension scheme 1975, serving personnel were given poor information. My hon. Friend referred to that information, and to the short period allocated for providing information to individuals who were making important decisions about their future and their future provision, and who have been disadvantaged for many years because they were not given sufficient information. I am sure that would not happen nowadays, but it happened then, and there has been a substantial impact over a substantial period.

It has been the policy of successive Governments that changes to public sector pension schemes cannot be made retrospectively. My hon. Friend recognises that it is highly unlikely at this stage, so many years later, that any retrospective change will be made by any Government. It would be difficult to devise a legally sustainable arrangement for retrospective pension entitlements purely for the armed forces. The Equality for Veterans Association has, in light of that argument, been making the case for lump-sum payments for those affected in lieu of retrospective pension payments. My hon. Friend’s request is for the injustice to be recognised, and for steps to be taken to enable those who are suffering hardship to deal with their financial pressures, which have been exacerbated by the poor arrangements that were in place because of the failure to introduce an adequate pension scheme.

In 2012, the Chancellor transferred £35 million from fines levied on the banks to the Ministry of Defence to support the armed forces community. That LIBOR fund is one example of funds from a particular source being used to support charities, good causes and organisations that work to improve life for our armed forces community. If there is injustice and particular need in individual cases, it is right and proper that we, as a community, recognise the spirit of the armed forces covenant by trying to introduce a scheme to support individuals who are under financial pressure, and who are disadvantaged by previous errors, or the failure to give notice of legislation that was being introduced.

I encourage the Minister to consider options for allowing veterans to apply to the LIBOR fund, or for introducing, in some other way, access to funds for individuals who are under financial pressure and who have been affected by the pensions issue. That could provide a suitable means of financial support for veterans who left the armed forces before 1975 and their families.

Our armed forces community have worked tirelessly for decades to keep the nation safe, and to enhance the rights of others across the world. We owe a debt of gratitude to those who served before 1975 and after. Those who served before 1975 and who did not get adequate pension arrangements deserve our respect and support, so I hope that the Government will look at this genuine case, consider it closely and take steps to try to support those individuals by addressing the issue that my hon. Friend has raised today.