Armed Forces Pensions

John Glen Excerpts

Tuesday 16th October 2012 Commons Chamber

[John Glen (Salisbury) (Con)]

The purpose of calling this evening’s debate is to bring to the Minister’s attention a group of former spouses who, due to miscalculations in their pension provision by the Ministry of Defence, now face very uncertain futures. It seems that there is a group of 126 women who have been affected by the mistake. I believe it right and proper for the MOD now to take the steps necessary to ensure that this does not happen again and to compensate the individuals affected, particularly where their financial situation and life circumstances have been substantively impaired.

Three constituents came to see me in March this year. In accordance with their wishes, I shall not be disclosing their names to the House. However, their experiences are fairly representative of the group of women affected. One individual, having made the difficult decision to divorce, asked for the details of her former husband’s pension pot from the SPVA—the Service Personnel and Veterans Agency, which administers military pensions—in March 2010. Her husband’s pension was in fact already in payment. The SPVA gave details and confirmed, both on the telephone and in writing, that my constituent would be able to take her pension from the age of 55 with no actuarial reduction being applied. Therefore, in April 2010 the judge was able to finalise her divorce, relying on the information provided by the SPVA, which had been confirmed in writing.

The pension for my constituent came into payment and she undertook a number of financial obligations, feeling certain of a definite and defined monthly income payment for the rest of her life. She bought a property and undertook renovations on it, as she sought to start her new life. It has since been discovered that in November 2010 the MOD was contacted by the Department for Work and Pensions and made aware that an error had been made in the way it had interpreted DWP legislation. It meant that actuarial reductions should have been applied to those former spouses who took a pension at the age of 55. However, none of the affected spouses was informed of the error, and their pensions continued to be paid from November 2010, when the MOD was first notified that an error had occurred, to spring 2012, when the MOD communicated the error to those affected and my constituent first approached me.

On 1 March 2012, 16 months after the mistake first came to light, my constituent was notified by phone that she would receive a reduction in her pension of over 40%, which was to take effect in three months’ time. A letter confirming that arrived a few days later, on 5 March. The stress and worry must have been unimaginable. Illness followed and she lost half a stone very quickly. She sold her car, as she was so worried about the reduction in her income and felt that she had to downsize her lifestyle rapidly. Obviously she also felt under an enormous degree of strain.

Then, two months later, on 13 May 2012, my constituent received a further communication from the SPVA informing her of another mistake, which meant that she would receive more than the reduced amount but still a 16% reduction on the amount on which her divorce settlement had been based, from which she had been receiving payments for the previous 18 months.

I am sorry to say that that individual is not an isolated example. A constituent of my hon. Friend the Member for South Norfolk (Mr Bacon), who is in his place this evening, had a similar experience. She took actuarial advice based on advice from the MOD before finalising the divorce, and acting on that advice, the judge awarded a clean break settlement comprising 40% of her former husband’s pension pot. On the basis of that guaranteed income, she secured a mortgage. She now finds herself with a 20% reduction in her income due to the miscalculation and is looking at losing her house. She has been in hospital for emergency operations and has been treated for stress, and she is now on sleeping tablets.

[Mr Richard Bacon (South Norfolk) (Con)]

I am grateful to my hon. Friend for raising this subject and for mentioning my constituent. Does he agree that although one can understand that the principles of good administration require that public authorities such as the Ministry of Defence and the SPVA do not make irregular payments, they also require public authorities to be held to their promises, especially when they have created a legitimate expectation upon which people have acted, as in this case? Does he therefore agree that the right route in these circumstances is generous compensation?

[John Glen]

Absolutely. I fully endorse what my hon. Friend says, and I will come on to some specific points to which I hope the Minister will respond.

In what is an exceedingly traumatic time for anyone—going through a divorce and facing up to a new life—it is absolutely imperative that any agency of a Government Department gets the facts right first time, particularly when dealing with issues that have painful and far-reaching implications. My constituent has told me that since the mistakes have been known, the SPVA, to its credit, has done its best to provide as much information as it can, for which she is sincerely grateful. Information is one thing, but we now need action, leading to justice.

The bottom line is that former husbands and wives, the courts, actuaries and mortgage companies all relied on the information provided to them by the MOD. They had no reason to believe it to be in any way incorrect, particularly in my constituent’s case, in which the SPVA was asked directly whether there would be an actuarial reduction if she took her pension at 55. The SPVA wrote back in black and white on 6 April 2010 to say that that would not be the case.

The mistakes have had serious repercussions for a number of divorce settlements, which were decided on the basis of erroneous information. That means that the lifestyles that the judges thought it fair for both parties to have after the divorce are now not sustainable. In most cases of a so-called clean break divorce, the court will not hear the divorce case again, so the former wife—it usually is the wife—has no legal recourse. It may be possible to go back to court under ancillary relief proceedings to re-examine the finances, but the former husband may have to agree to that. Even if a court agreed to a rehearing, which is expensive in itself, many husbands would not, quite rationally and understandably on one level.

I have figures provided by an actuary from Actuaries for Lawyers, specialising in armed forces pensions, who has estimated what my constituent’s loss will be over her expected life span. I would be happy to let the Minister see those figures, and the actuary himself would be happy to meet him and representatives of the relevant agency in the Department to explain how he arrived at them.

This evening, I would like to ask the Minister a number of questions. When exactly was the mistake made? Who notified the SPVA of the mistake? Who is accountable for it? I do not wish to have a witch hunt, but as yet I have not received a satisfactory account of why the mistake was made, and I am not yet confident that it will not happen again. I also want to know what actions the Minister and SPVA officials have taken, or will take, to ensure that there is no recurrence of the same mistake.

My most pressing question is why it took so long for the MOD to contact those affected by the error. There was a 16-month window from when the mistake was discovered to the point at which those affected were contacted. That wait was unacceptable. The strategic defence and security review has been completed and, from my recent Defence Committee experience, I know that many complex changes have taken place within the MOD, but the SPVA still had a duty of care to get things right. That is its job. The argument that it “had a lot on” cannot be used.

As I have tried to stress, this error has had a huge effect on the victims. Some have become ill, and chronic illness has ensued. Some have found it hard to cope with the paperwork involved as they try and get to the bottom of what has happened. Some are facing the risk of repossession. Many have committed themselves to expenses that they cannot now maintain, or would not have entered into had they known what was going to happen. Many face adjustments to their living arrangements that they would not have had to contemplate, had their settlements been agreed on the correct basis.

I cannot do justice tonight to the misery and upset of so many families, but I hope that the Minister will reflect fully on the circumstances of my constituent and others. I want him to give a categorical assurance that compensation will be awarded, not only to those who are able to challenge this decision, through me or other MPs, but to the whole group of women involved. My constituent was awarded the well-meant but token amount of £250 to cover the “inconvenience and uncertainty”, in a letter dated 13 September 2012. However, not everyone has been given that. Why not? Did she receive it just because she was able to pursue the MOD? Some others have not been strong enough to do so, perhaps because they have been ill or simply not as persistent. There is a principle at stake here. The MOD made a mistake and the miscalculations directly affected the choices made by this group of women and their former partners.

I am aware, from previous correspondence I have had with the MOD on this issue, that a hardship fund is available to those in need. That is welcome, but it does not address the real issue, which is one of justice. The MOD ought to honour the assumptions made by the court, which decided on what it thought to be a fair and just distribution of assets based on figures given to it by the SPVA. That decision has now been compromised through errors made not by the individuals concerned but by the MOD.

If we assume an average shortfall of £50,000 per person over their lifetime, we find that the MOD would need to find approximately £6 million in compensation. Given the lifetime of service that those spouses have given through supporting their husbands and, in some cases, forfeiting their own chances of a career through the frequent relocations necessary for many service households, I hope that the Minister will order full and complete compensation from the hardship funds. That should include all reasonable legal costs, and it would be helpful if the recoverable costs could be defined.

The Minister should also take whatever steps are necessary to establish where the error was made and to ensure those responsible are retrained to make certain that this does not happen again. This Government have taken great steps with the military covenant during their time in office, but this matter tests both the letter and the spirit of the covenant. I have the highest personal respect for the Minister. He has been in post for only just over 40 days, but he has already cultivated widespread respect among many veterans’ organisations. I now look forward to hearing his sympathetic and effective response.

Army 2020

John Glen Excerpts

Thursday 5th July 2012 Commons Chamber

[John Glen (Salisbury) (Con)]

Many of my Salisbury constituents have expressed concern that the increased number of reservists used to mitigate the impact of today’s cuts will not prevent a loss of capability. Will the Secretary of State reiterate why he is confident that there will not be an emerging capability gap as a result of today’s announcements?

[Mr Hammond]

Because the Chief of the General Staff and the team carrying this work have presented me with a plan for the future Army, which they tell me will be able to deliver the output requirements of the strategic defence and security review. I have confidence in their professionalism.

Defence Budget and Transformation

John Glen Excerpts

Monday 14th May 2012 Commons Chamber

[Mr Hammond]

I am grateful to my hon. Friend for that. The knowledge that there is a £4 billion contingency budget will be hugely reassuring for the defence industry when it looks at the overall programme and decides how to invest its own money in the technologies and skills needed to deliver it. However, I urge the company in her constituency not to think that the £4 billion is there to accommodate its cost overrun.

[John Glen (Salisbury) (Con)]

In warmly welcoming today’s announcement, may I ask the Secretary of State to go further and assure the House that when he reviews the options for the organisational model that the Chief of Defence Matériel believes will be best for the future of the Defence Equipment and Support organisation, he will challenge them robustly on their capacity to deliver real, radical organisational and cultural change in that organisation so that decisions are made in the right way in the future?

[Mr Hammond]

I can give my hon. Friend that assurance, but I do not underestimate the scale of the task. As DE&S is structured at the moment, we are seeking to employ project managers to manage some of the world’s largest and most complex projects and we are seeking to do it on civil service pay. That is challenging.

Carrier Strike Capability

John Glen Excerpts

Thursday 10th May 2012 Commons Chamber

[Mr Hammond]

A first-week midshipman could probably tell the hon. Gentleman that it is not normal to order a 65,000 tonne STOVL carrier without any cats and traps. With regard to the hon. Gentleman’s question on Rosyth, no decision has been taken on where the carriers will be maintained in future.

[John Glen (Salisbury) (Con)]

It is widely alleged by some that the through-life costs of the F-35B could compare unfavourably with those of the F-35C. What rigorous assessment has my right hon. Friend undertaken to ensure that we achieve value for money, having made this decision, and what wider lessons on the defence budget can be drawn for similarly important and large decisions in future?

[Mr Hammond]

To answer the last question first, I am drawing some very interesting conclusions about how to manage the defence budget on an ongoing basis and hope to share them with the House shortly. It is precisely because the F-35C variant, on the face of it, has a lower purchase cost and a lower through-life maintenance cost that this option was pursued at the time of the SDSR 2010, but operating the carrier variant will of course require the installation upfront of the catapults and arrester gears, which we now know will cost in the order of £2 billion and rising. On the basis of a properly discounted cash-flow analysis over 30 years, I am clear that the STOVL variant, given the current estimate of the cost of cats and traps, will now be cheaper.

Afghanistan (Troop Levels)

John Glen Excerpts

Thursday 26th April 2012 Commons Chamber

[Mr Hammond]

The right hon. Gentleman is a real dyed-in-the-wool glass-half-empty man. I have not announced that we will commit our forces for another 32 months. The Prime Minister announced early last year that we would have them out of a combat role by the end of 2014. That is a good news story, as is the fact that in the interim, all the ISAF nations are focused on creating an ANSF that can take over our role and maintain security in Afghanistan.

In the meantime, everybody in the House ought to be extremely proud of the social and economic development in central Helmand. There are significantly more schools, hospitals, clinics, bazaars, and bridges. Over the past six months, the British Army has built the biggest bridge that it has constructed since the second world war. All those things allow ordinary people in Helmand province to resume their normal life, grow their income and make mainstream Afghan society more and more attractive to those who have previously been attracted by the insurgency.

[John Glen (Salisbury) (Con)]

My concern is that the current residual threat is not a reliable indicator of what precisely will happen post-2014. What assurance can the Secretary of State give the House that the likely change or intensification of threats from without Afghanistan in 2015 are being properly examined and acknowledged in the training being received now by the ANSF?

[Mr Hammond]

The strategic threats are acknowledged in, and form a core part of, ISAF’s thinking. I do not know whether my hon. Friend had a particular aspect in mind, but it is clear to us that building a sustainable and reliable relationship with Pakistan and ensuring the security of the border with Pakistan will be fundamental to the future of Afghanistan.

Strategic Defence and Security Review

John Glen Excerpts

Thursday 26th January 2012 Commons Chamber

[John Glen (Salisbury) (Con)]

As a member of the Defence Committee, I welcome this opportunity to contribute to the debate. Defence reform is a complex matter and it is not easy, in a few minutes, to encapsulate coherently and completely in an incisive contribution how one would move things forward. I say that to mitigate the disappointment when I sit down and to reflect how difficult it is to reform a Department that has so much complexity hard-wired into its fabric. Much analysis and many reports on this issue have been undertaken over the years and I do not want to use my time now to revisit controversial decisions on whether, if or when we will have an aircraft carrier or aircraft carriers, or on the number of senior posts that will be rationalised, or on how those decisions were taken. Neither do I want to examine the different reasons armed forces personnel face a greater likelihood of compulsory redundancy than their civil service counterparts.

The three points I wish to raise today concern culture, accountability and the measurement of outcomes. Regardless of what decisions are made about programmes and the size and shape of the three services, it is in those three areas that lasting, effective and meaningful reform will be achieved. Many people will probably raise their eyebrows at the mention of culture and think it is a soft and peripheral concern. They might think that the culture of the armed forces is well defined and focused, so let me explain what I mean.

I have no doubt whatever that the sense of discipline, service and mutual dependency is fully developed within the culture of the armed services, as is that brave willingness to risk life and limb for country. However, I am increasingly of the view, through all my different interactions with the armed services in the two years I have been in the House, that although in operational terms there is no doubt about how well the different services work together, when it comes to taking decisions in the interests of UK defence at the strategic and policy level, individuals display an undue dependency on their own service, department or section and the affinities that go with them. Often, I feel that decisions on fundamental matters of reform are made on the basis of the relative political skills of the senior individuals involved. Until a culture exists that rewards and prizes fully at all levels the good of UK defence above other ingrained imperatives, lasting and successful reform will not happen. We cannot continue to pay lip service to jointery from a structural and organisational chart perspective but make no real investment in the mechanics of decision making within the MOD.

The second issue I want to address is accountability. The Defence Committee’s report of just this week says that

“the MoD could not provide adequate audit evidence for over £5.2 billion worth of certain inventory and capital spares.”

My hon. Friend the Member for North Wiltshire (Mr Gray) referred to the Secretary of State appearing like the chairman of an international company.

[Mr Gray]

A very good one.

[John Glen]

Indeed, but what would happen in a business if such inventory could not be accounted for so that for the fifth year the financial director had to qualify the accounts? My gallant Defence Committee colleague, my hon. Friend the Member for Beckenham (Bob Stewart), recently told me he had once been severely reprimanded for an unaccounted rifle. That was only a generation ago, yet today £125 million-worth of Bowman radios are still unaccounted for.

Many Members will raise their eyebrows, because the issue has been highlighted so many times in different reports, but poor accountability for decisions and outcomes and for the use of public money needs to be addressed. Accountability needs to be hard-wired in the MOD, not just at the highest level but at every level, otherwise reform will not be successful.

The final issue I want to examine is measuring outcomes. As a member of the Select Committee, I draw attention to our recent report, which notes that we were told that

“88 per cent progress had been made to a stable and secure Afghanistan.”

It is a promising statistic, but when we examined it further we were told that

“the performance was not 88 per cent against a full range of indicators of what is happening in Afghanistan, for example on the quality of governance, the economy and security.”

In that case, what is the point of such a statistic in the MOD’s annual report and accounts? We can debate at length the different aspects of decision making and allocation of resources, but until we have proper accountability and measurement of outcomes we cannot have real change in future outcomes and conduct in our MOD. We need to change the culture. We need real accountability, with consequences. We need to measure outcomes so that effective decision making can be built on well into the future.

[Several hon. Members]

rose—

Oral Answers to Questions

John Glen Excerpts

Monday 19th December 2011 Commons Chamber

[Mr Speaker]

I am relieved that the Minister of State did not burst into song, but that may happen later in the day—who knows?

[John Glen (Salisbury) (Con)]

T1. If he will make a statement on his departmental responsibilities.

[The Secretary of State for Defence (Mr Philip Hammond)]

My departmental responsibilities are to ensure that our country is properly defended, now and in the future, through the delivery of the military tasks for which the MOD is mandated; that our service personnel have the right equipment and training to allow them to succeed in the military tasks; and that we honour our armed forces covenant. In order to discharge those duties, I have a clear responsibility to ensure that the Department has a properly balanced budget and a force generation strategy and a defence equipment programme that are affordable and sustainable in the medium to long term.

I am deeply aware that our people are the greatest assets of the armed forces, and I am sure that all Members of the House will want to join me in wishing all of them, especially those who are away from home over the festive period, a happy and a safe Christmas.

[John Glen]

I thank my right hon. Friend for his answer. Will he update the House on the status of the service chiefs' review of force generation and sustainability, which among other things was looking at harmony guidelines? I am sure that my right hon. Friend will be aware that if he adopted the Navy’s harmony guidelines, he would secure a significant saving across the MOD.

[Mr Hammond]

The single service chiefs are reviewing force generation issues in the light of the proposed change structure of the armed forces. The issues around harmony are different in the three services, and it is right that the individual services develop harmony guidelines that are right for their conditions and allow them to operate within their single service budgets.

Armed Forces Personnel

John Glen Excerpts

Thursday 10th November 2011 Commons Chamber

[John Glen (Salisbury) (Con)]

I begin by acknowledging, as many others have, the welcome and historic breakthrough of enshrining the armed forces covenant in law. However, as the Prime Minister himself has said, the challenge is to make the Government live up to the obligations in it in reality. It is critical that we bring the aspirations that we all have for the covenant together with the realities that we are faced with in trying to deliver it.

The awful reality is that members of the armed forces and their families may have to face death or injury while they are serving. If the worst happens, it is extremely important to ensure that the right processes are in place and to make certain that the wishes of those who have been killed or wounded are carried out. I wish to focus my few remarks on that.

All armed forces personnel are advised in pre-deployment briefings to make a will. A form, MOD 106, is provided for the purpose. Unfortunately, no advice is given on making the will, nor is there any compulsion to do so. Little information is given to those serving on the risk of mental incapacity following a tour of duty, or on the fact that if there are such complications, the management of financial affairs will not be sufficiently dealt with by a will. In reality, members of the armed forces would need to have a legal power of attorney document to be used in those circumstances, but it must be registered before the mental incapacity happens to make it valid for use when an injury occurs.

Many complicating factors conspire to mean that in many cases, our service personnel may not be properly legally protected in such situations. First, there is a cultural battle. Many young men and women who want to serve are less likely to make a will, because they feel invincible before a tour of duty after undergoing sustained training, or sometimes because they do not want to tempt fate. Secondly, a will speaks only from death. Many personnel are under the misconception that a will covers all eventualities, including mental injury, but it will not. That means that there is a real need to deal with the legal power of attorney option properly.

The consequence of not having a legal power of attorney document can be far-reaching and cause enormous problems for those left behind. I have been made aware of the case of a young man who tragically lost his life. He had made a will, but did not have legal power of attorney in place in the right way, which caused some difficulties. The will was also out of date, which meant that the benefits did not go the people he intended them to. Similarly, another person was in the middle of an acrimonious divorce, and his will did not work as he wished. The outcome was that it did not accurately reflect his updated wishes, which caused major complications for his family.

As we know, more people who serve in the armed forces are surviving terrible injuries that they would not have survived 10 years ago. Some are unable to manage their affairs when they have recovered from physical injuries, which means that someone must do so on their behalf. An LPA would solve a lot of problems in such cases. It is true that an LPA pack can be downloaded from the Office of the Public Guardian, but it costs £130 to register the LPA when all the forms are completed. That will seem like a lot of money to service personnel, many of whom are young people who might believe that nothing will happen to them—an LPA is probably the last thing they want to spend their money on. Defence instructions mention that document, but I am given to understand that they lack detail and contain errors.

If no LPA is in place, a deputyship must be applied for on behalf of the injured service person, which can be extremely expensive, as can the ongoing maintenance costs of a professional deputyship. I am aware of one case of a deputyship costing about £60,000 per annum to service. Solicitors who manage compensation claims will choose to instruct a professional deputy when a lay deputy is perfectly viable, which drives up the costs that take away from compensation schemes—they will have to borne by the MOD.

I see this as a specific covenant issue: if we are prepared to send young people off to fight and possibly die or be gravely injured for their country, and if we invest so heavily in the correct equipment and training for them while they are on operations, we must also have a duty of care to ensure that their affairs are in the order that they would wish them to be in if they are injured or killed. We have concentrated on equally important matters until now, but this issue needs to be looked at again in more detail as part of the pastoral care package that is offered to service personnel.

I am not seeking to embarrass the MOD or the Minister—this is a constructive suggestion on which I have worked with hon. Members on both sides of the House—but the Mental Capacity Act 2005 made this issue real, which is why it needs further examination. What should be done? I would like all those on deployment, and ideally all service personnel, to have an up-to-date will and LPA in place. It would be best to have a will pre-enrolment, but personnel should certainly have one pre-deployment.

I have also had meetings with a group who have a proposal for an organisation called the services trust—I met the group earlier this week. They would like to assist the MOD and serving personnel with information on some of the gaps to which I have drawn the House’s attention. The group could also help with processing LPAs and could act as deputies if necessary.

It would be useful to train admin officers to give relevant information on the consequences of not writing a will or of having no LPA. In fact, the Office of the Public Guardian held a consultation on what groups of people should be exempted from the £130 LPA fee, but it did not include the MOD. That unnecessary oversight needs to be corrected.

It should be feasible to spread the cost of an LPA over a number of months and to take it from the wage packets of personnel at source. That is done for a variety of costs, and it would be a simple matter to add it to the joint personnel administration system. Payments could even be taken out with payments for the armed forces insurance scheme.

To return to where I began, the Government have made a commitment to the welfare of the armed forces by enshrining the covenant in law. It is essential that that commitment is extended to ensure that not only their financial and operational needs are met, but their legal needs. I respectfully ask the Minister to give an indication of whether he is prepared to meet me and other hon. Members, and representatives behind the services trust proposal, to establish what can be done to address that proven need in our armed forces.

Defence Transformation

John Glen Excerpts

Monday 18th July 2011 Commons Chamber

[Dr Fox]

I confirm that we intend to utilise HMS Caledonia as a unit for the MRB. We aim for the moving in to start in 2015-16. Of course, this will be a cross-departmental subject when it comes to looking at the wider costs.

[John Glen (Salisbury) (Con)]

Will my right hon. Friend confirm that the additional funding announced for defence equipment budgets will not be a sufficient uplift post-2014 to achieve the full aspirations of the Future Force 2020?

[Dr Fox]

We have to look at the defence budget as a whole, not simply the equipment budget, and see where there is leeway. I set out the equipment programmes that we are willing to start spending money on today. I am simply not willing to start to spend on other projects where I can see no budgetary line in the future. After all the pain we have gone through to rebalance the Ministry of Defence budget, we are not going to go back to the bad old habits and recreate the black hole that we inherited.

Defence Reform

John Glen Excerpts

Monday 27th June 2011 Commons Chamber

[Dr Fox]

I was keen to discuss at length with Lord Levene how to create a structure within defence that could offer careers to those who might be attracted to the intellectual, if you like, side of defence—electronic warfare and so on—but who might not want to become commandos. We need to create a pillar inside defence that can grow as the nature of conflict changes. We want to create that expertise and attract those young minds who have a different view of what the electronic and cyberspaces look like and who are interested in a defence career. It is essential that we change how defence does business in order to reflect the genuine threats out there. As we develop that expertise, so we will have a greater ability to deter the sorts of attacks to which the hon. Gentleman referred.

[John Glen (Salisbury) (Con)]

One of the issues that needs clarification is the practice of individuals being appointed to sensitive roles in large procurement processes for just two years. Will that be reviewed, so that the period of the role suits the project, rather than an arbitrary career path?

[Dr Fox]

The specific work on that is currently being done by Bernard Gray but, as I said in the statement, it is now important that we increase the length of tenure of many such posts, otherwise we are wasting talent. If the MOD were a private company, it would be number three in the FTSE. The idea of having the most senior people in the private sector stay for 18 months or two years, and then rotating them round because it is “good for their career experience” would not hold water in the private sector, and it no longer holds water in the MOD.