Armed Forces Commissioner Bill

Debate between Mark Francois and Luke Akehurst

Report stage
Tuesday 21st January 2025 Commons Chamber

[Luke Akehurst]

Will the right hon. Member give way?

[Mr Francois]

When I have finished this point, yes.

The Forces Pension Society points out that the system is recoverable because the changes are subject to a consultation and are not currently due to come in until April 2027. Nevertheless, this is still a potentially worrying situation, especially for armed forces families in which parents are in a committed relationship with multiple children but have not, for whatever reason, decided to marry.

We were prepared to give the Minister the benefit of the doubt about that in Committee. Indeed, without wishing to be uncharitable, when I raised it he seemed slightly taken aback by the problem. I say that because my suspicion is that when the Treasury came up with this, the Ministry of Defence was blissfully unaware of it. I therefore suggest that MOD Ministers may not be directly at fault, but it is nevertheless their personnel and families who may be affected. Towards the conclusion of the Committee, I strongly suggested to the Armed Forces Minister that he should take this away for discussions with the Treasury, as there will be a consultation exercise on the changes before they come into force in the 2026-27 financial year, with the opportunity to change the policy and avert the problem.

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[Mr Francois]

Thank you, Madam Deputy Speaker.

[Luke Akehurst]

Will the right hon. Gentleman give way?

[Mr Francois]

Just a second—I am just going to reply to this one. Forgive me, but if my remarks were not in order, we would have been told so by now. Maybe one day, after many years of distinguished service, the hon. Member for Leyton and Wanstead (Mr Bailey) will become a Deputy Speaker of this House, but not today.

I will continue, and then I will take the other intervention. We really need to do something about this issue. As the Forces Pension Society has pointed out, it would be totally contrary to the principles of the armed forces covenant—including the principle that armed forces personnel and their families should suffer no disadvantage as a result of their service to the Crown—if this were to go unanswered, and unmarried service widows and their families were to be punished in this way.

I thank the hon. Member for North Durham (Luke Akehurst) for being patient.

[Luke Akehurst]

I thank the right hon. Gentleman for giving way. He has raised some interesting specific policy issues that are clearly of concern to large numbers of people receiving armed forces pensions, but the Bill makes it clear—and Ministers have been very clear throughout its consideration—that the independent commissioner will decide for themselves what is a general service welfare matter, and therefore whether they want to look into the issues raised by amendments 9 and 10. Will the right hon. Gentleman explain the apparent contradiction between Opposition Members insisting in amendment 8 that they want reassurance about the independence of the commissioner, and their wanting to predetermine the very specific topics that the commissioner would investigate through amendments 9 and 10?

[Mr Francois]

I thank the hon. Gentleman for his intervention. As we are on Report, we are trying to amend the Bill where we think it could be improved. Just because we have the Bill as originally produced on First Reading does not mean that it cannot be improved. If I may humbly say so, that is what Report is about.

This subject is pressing—I say this particularly to the hon. Member for North Durham—as the consultation on it closes tomorrow. The Veterans Minister replied to me on this subject—hey presto!—just this morning. I quote from his letter:

“I would seek to reassure the Right Honourable Gentleman that an existing exemption in Inheritance Tax legislation means that active members who die as a result of their service, are exempt from Inheritance Tax provisions.”

However, that only applies to those killed while on active service. It does not apply to those who are still in the service of the Crown but die of natural causes, so I am afraid that the Veterans Minister’s reply is smoke and mirrors, as it deliberately ducks the issue of those who die of natural causes while still in service with living dependants. The Government have already upset farmers and business owners through their proposed inheritance tax changes; they surely do not want to upset service families as well.

I say to the Minister that if, at what is now the third time of asking, we do not receive a satisfactory reply this afternoon, we will be strongly minded to press amendment 9 to a Division in order to hold Ministers to account and try to achieve positive change. With the consultation closing tomorrow, I will listen very carefully to what the Minister says about this issue in his response, but having given him two previous bites at the cherry, I am afraid that we may be likely to divide the House if we do not receive a satisfactory reply on behalf of those service families who may be affected.

As you can see, Madam Deputy Speaker, amendment 10 covers three topics: the

“operation of the Continuity of Education Allowance”,

or CEA as it is known;

“the provision of Special Educational Needs tuition”

for the children of armed forces personnel; and

“the maintenance of service families’ accommodation.”

I will take those topics in reverse order.

On service families’ accommodation, I welcomed in Committee the recent announcement that the Government intend to, in effect, buy back service family accommodation from Annington Homes. I know that my hon. Friend the Member for South Suffolk (James Cartlidge) also welcomes these proposals because—as Ministers, to be fair to them, have already acknowledged on the Floor of the House—while in government, he spent a great deal of time working on the scheme. He is understandably very pleased to see those efforts come to fruition, albeit under a Government of a different colour, as indeed am I. We should give credit where it is due.

Service housing was mentioned multiple times in Committee, and there seems to be little doubt but that it qualifies as a general service welfare matter. However, I have included the topic in this amendment to facilitate a brief discussion on the management and maintenance of service housing post Annington, as it were, and in the timeframe during which the new Armed Forces Commissioner is likely to be in operation. The fact that the MOD will in effect recover the freehold of its properties and be the landlord opens up exciting opportunities to change the maintenance of service family accommodation and, indeed, of single living accommodation as well.

The Minister will be aware that, when I was a Minister, I was commissioned by a former Prime Minister to write two reports: one was on armed forces recruitment, subsequently entitled “Filling the Ranks” and delivered in 2017; and as a result of the first report, a second one was on retention, entitled “Stick or Twist?” and delivered in February 2020—barely a month before the nation went into lockdown because of covid. I know that some Defence Ministers have kindly taken the time and trouble to look at those reports, so I shall not attempt to repeat their contents here, except to make one specific point on the management of SFA.

Having looked at the matter in detail, my team concluded very strongly that there must be a better way of managing service housing than the current Future Defence Infrastructure Services contract. Our alternative, which I believe now has new resonance as the homes are transferred from Annington back to the MOD, would be to form a dedicated forces housing association, the fundamental purpose of which would be

“to provide high quality, well maintained accommodation for service personnel and their families at an affordable cost.”

I think the Minister has kindly read this report, as has the Veterans Minister, who has responsibility for it, and I hope he will take that on board.

We debated special educational needs in some detail in Committee, so I do not propose to repeat all of that again, but I refer the Minister to a recent Public Accounts Committee report that was published last week on the topic.

The continuity of education allowance is a very important issue, particularly as it affects retention. The VAT increase of 20% will affect around 4,200 children of service personnel, but the MOD is increasing the CEA cap only by 12.5% for senior school students and 16.6% for junior school students, leaving their parents to make up the difference from their post-tax income. This has already come into effect from 1 January, or about three weeks ago. A joint briefing note from the Independent Schools Council and the Boarding Schools’ Association points out that the VAT will cover both tuition fees and boarding accommodation at independent boarding schools. In the worst cases, the VAT will have an adverse impact on military families using CEA, who could see their contributions increase by over 50% for senior school pupils. The Treasury’s VAT consultation said that it would

“monitor closely the impact of these policy changes on affected military and diplomatic families, with the upcoming Spending Review being the right time to consider any changes to this scheme.”

The spending review—[Interruption.] Madam Deputy Speaker, I believe we have until 6 o’clock. The spending review will not report until this summer, but military families are having to pay the increased costs now, and I have a whole range of quotes that I could read into the record.

Armed Forces Commissioner Bill (Third sitting)

Debate between Mark Francois and Luke Akehurst

Committee stage
Thursday 12th December 2024 Public Bill Committees

[Mr Francois]

For the convenience of the Committee, I will take amendments 9 and 10 in reverse order.

Essentially, amendment 10 is intended to ensure that the office of the commissioner is sufficiently well resourced to undertake its role effectively, independently of the Ministry of Defence. The explanatory notes to the Bill intimate that once the office is up and running, it will start off with a budget of approximately £5 million, as the Minister confirmed on Second Reading.

The Bill does not mandate a specific number of staff to assist the commissioner; it is not that prescriptive. Given that the role has a wider remit than that of the Service Complaints Ombudsman, it seems likely that more staff will be required to carry out the expanded function—not least because it will now include visits to service establishments, some of which the commissioner could be empowered to conduct on an unannounced basis, subject to certain safeguards, if they thought that the issues that they were examining merited it.

The purpose of amendment 10 is to reinforce the idea that the office should be adequately resourced by mandating the financial assistance provided by the Secretary of State, which is effectively the commissioner’s budget, should increase by at least real terms each year, defined using the consumer prices index measure of inflation, which is published by the Office for National Statistics. I hope that amendment 10 is relatively uncontroversial and that the Minister might even be tempted to accept it. We can but try.

Amendment 9 would mandate that at least one member of the commissioner’s staff be a King’s counsel.

[Luke Akehurst (North Durham) (Lab)]

It is an honour to serve under your chairmanship, Mr Efford. Would the right hon. Gentleman be able to give the Committee an idea of the annual cost of a King’s counsel, so that we can have an idea of what percentage of the proposed budget that would be? Why he is choosing to be prescriptive about the need for this particular element of staffing? That seems to contradict earlier pushes in amendments to safeguard the independence of the commissioner. If we are appointing a commissioner, surely we should trust them to determine the configuration of their staff.

[Mr Francois]

There are two questions there. On the first, the honest answer is that it depends on the KC. In my limited experience, different King’s counsels tend to charge different rates. One would hope that the commissioner would employ someone who was good at their job, so yes there would be a public expenditure cost.

If the hon. Gentleman will permit me, I am going to come in a moment to the exact rationale for why we have sought to mandate that at least one of the commissioner’s staff should be a qualified KC; he slightly pre-empts me. But I hope I can convince the Committee that there is a genuinely good reason for doing so and I am going to produce at least one real-world example. If that satisfies the hon. Gentleman, I will make some progress. Did the hon. Member for Portsmouth North, sitting next to him, also seek to intervene or have I inadvertently answered her question?

Armed Forces Commissioner Bill (Fourth sitting)

Debate between Mark Francois and Luke Akehurst

Committee stage
Thursday 12th December 2024 Public Bill Committees

[Mr Francois]

I entirely take the hon. Lady’s point, for which I thank her. There are a number of wider issues—one of them is education, and particularly special educational needs—and I will touch on those in the clause stand part debate, if it pleases the Chair. The hon. Lady may recall that I gave the Minister a pretty fair heads-up about that on Tuesday. I tabled the amendment so that we could raise the specific issue of pensions, which is a concern for armed forces personnel, rather than discussing it under clause stand part.

To drive that point home before I conclude my remarks, Larisa Brown, the excellent defence editor of The Times, has just published an article online entitled, “Call to spare troops’ loved ones from inheritance tax trap.” Its subheading is: “Death in service payments for unmarried members of the armed forces who die off-duty will be subjected to the levy under plans announced in the budget”. In answer to the hon. Lady’s question, this is very much a live issue as of about 14 minutes ago.

[Luke Akehurst (North Durham) (Lab)]

Will the right hon. Gentleman give way?

[Amanda Martin (Portsmouth North) (Lab)]

Will the right hon. Gentleman give way?

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[Mr Francois]

I will try to be brief. This amendment in no way precludes the raising of any of the other issues that the hon. Lady mentioned. It does not say, for instance, that the commissioner can look only at pensions—not at all. However, it does specifically make it clear that the commissioner is empowered to look at pensions, because they kick in, by definition, when armed forces personnel leave the service. Some people might try to argue that pensions are not a general service welfare issue because personnel are no longer serving, but they very much are—not least because, as the Minister will know, they very much affect retention. They might also affect recruitment slightly, but pensions are certainly very important in retention. Sometimes they are the overwhelming reason that people stay in the service, depending on their personal financial circumstances.

I see the hon. Lady’s point, but all this is doing is making it very clear, beyond peradventure, that the Armed Forces Commissioner’s remit would extend to pensions. I admit that it also gave us an opportunity to raise this very important issue, which the Forces Pension Society raised with me a little while ago. When I met its representatives, they were genuinely worried about this, and my amendment was an opportunity to put the issue on the table and on the Government’s radar, as it were. That is what I was seeking to achieve.

[Luke Akehurst]

On one level, I congratulate the right hon. Gentleman for finding an opportunity to raise this issue in the context of the Bill Committee. It is one for which I have a huge amount of sympathy, as I represent a constituency with a large number of retired service personnel. On the other hand, it is a little cheeky to use a Bill Committee to raise a substantive policy issue that could have been raised on the Floor of the House—perhaps in Defence questions.

[Mr Francois]

Is this another brief intervention?

[Luke Akehurst]

I am sorry—I will be as brief as I can. I am getting used to being brief. What led the right hon. Gentleman to suspect that this issue might be in any way excluded? I hope the Minister will clarify that the Bill is designed to be permissive and broad, and to allow the commissioner to define what a general welfare issue might be. I do not think there is any attempt to exclude—

[Mr Francois]

I thank the hon. Gentleman for his very pithy intervention. He pays me a back-handed compliment. How outrageous that His Majesty’s Opposition should try to raise a difficult issue in the middle of a Bill Committee; if I were to go back through the annals of Hansard down the centuries, I am sure there would be some precedent for that.

This was a timely opportunity, if I can put it like that, to table the issue. There is a consultation coming up, and I suspect, looking at his face, that the Minister was not really au fait with this issue—I am not being rude to him—but he is now, and I will be very interested to hear what he has to say.

The key point here is that death in service benefits have traditionally been payable if someone dies while in the armed forces or in the service of the Crown, whether or not they were on active service. A person who died back at home with their family would still qualify for the money. Under the armed forces pension scheme, they would still qualify if they had a regular partner. Under the Bill, however, because we are now dealing with the inheritance tax rules, unless the individual is married or in a civil partnership the exemptions do not apply. That is the critical point. I suspect the Ministry of Defence had not picked up on it. The Forces Pension Society, which exists for exactly this kind of eventuality, has done what it says on the tin and raised an issue that could materially affect armed forces pensions. In some ways, I am acting as their factotum this afternoon in tabling the issue.

[Mr Francois]

I think it is. Those who have left the service, are by definition no longer subject to service law; they are subject to the laws of the country like any other civilians, as that is what they have become, albeit they are civilians with the special status of being a veteran, which we should respect. But they are no longer serving in His Majesty’s armed forces. The amendment would allow the commissioner to expand their remit little bit in order to look at pension-related issues, which are something that armed forces personnel regard as part of their general service welfare. When they are taking that stick or twist decision, weighing up the pluses and minuses of whether to stay or leave—particularly if they have been in the service for some years and have accumulated a reasonable pension pot—that is definitely something that they will take into account.

[Luke Akehurst]

Will the right hon. Gentleman give way?

[Mr Francois]

In a moment. My hon. Friend the Member for Spelthorne is a former commanding officer of the Scots Guards, and he knows the challenge that all commanding officers face in retaining personnel, particularly experienced personnel. It is part of that stick or twist decision, which is why we believe that the Armed Forces Commissioner should be able to look at it. The amendment would remove any doubt that they had the ability to do that, while—to come back to the point made by hon. Member for Broxtowe—in no way precluding their being able to look at anything else.

[Luke Akehurst]

I thank the right hon. Gentleman for giving way. I will try to be more pithy this time. I thought there was a separate proposal for a veterans’ commissioner. Should not matters that affect former service personnel after the point when technically they have ceased to serve, or their families if they are deceased, sit in the purview of a veterans’ commissioner, not the Armed Forces Commissioner?

[Mr Francois]

The hon. Gentleman anticipates me, because if he looks down the list of amendments, he will see that new clause 2 talks specifically about veterans’ commissioners. Perhaps at that point he might want to intervene on me again, as long as it does not mean Mr Betts misses his train.

I hope that I have made my point. I shall be interested to hear what other Members in the Committee think, and particularly what the Minister’s view is.