Armed Forces (Pensions and Benefits)

Andrew Murrison Excerpts

Tuesday 8th March 2011 Westminster Hall

[Steve Rotheram]

I will answer that question personally rather than as a representative of my party. As I have said, I am not an expert on this issue. However, having spoken to some senior officers in my local Army garrison only last month, I believe that it will have a detrimental impact on recruitment and retention in the armed forces. It is also about the morale of our troops, and I will touch on that subject a little later.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

I congratulate the hon. Gentleman on securing this very important debate and I declare my interest as a service pensioner. He underscores the importance of pensions and is right to do so. Will he note that pensions were perhaps the first manifestation of the military covenant since the Romans granted a pension to people settled in Britain after about 20 years’ service, so they have a very long history?

[Steve Rotheram]

I will touch on the Government’s position on the military covenant and what was said in the House a few weeks ago a little later in my contribution.

Military employees accept that many of their personal life choices will be determined, and often restricted, by duty to the military. Premature death and injury are occupational hazards and have lifelong and life-changing consequences that impact on entire families. Typically, armed forces employees have shorter careers; they retire at an average age of 40, which is much earlier than their civilian counterparts. For obvious reasons, many military widows and widowers are younger than the non-military average and thus more likely to be left to raise children alone. Injured or disabled retirees are frequently unable to work on civvy street following their discharge. For veterans, the quality of post-service support—medical, remedial and professional—remains patchy to say the least. Show me any other civilian public servant subject to this particular package of terms and conditions, and I will buy into the Government’s logic.

There is another way in which armed forces pensions and benefits differ from other public sector pensions. Yes, they are occupational pensions, but, as the Forces Pension Society has pointed out, they are also essentially a form of compensation for the unavoidable early cessation of a career. It is important, therefore, to consider why people join the armed forces. Individual motivations vary, but they include a yearning for travel and adventure, a desire for a structured career, an eagerness to acquire skills in a particular field and a desire simply to serve our country. None the less, let us not forget that a disproportionate number of young military personnel—men in particular—come from disadvantaged backgrounds. As we know, significant numbers are drawn from the care system. Let us not pretend that they are in it for the money. High-ranking staff may eventually find themselves comfortably off, but the vast majority of military personnel merely eke out a bog-standard living. For that, they sacrifice a great deal, particularly in the way of family life. For that, they risk permanent injury or death in the course of their duties. The theory is that as a nation, we acknowledge and value that, and that we guarantee that forces’ employees and their families will be looked after in return. In that respect, joining the armed forces is an act of faith. To change the terms and conditions of service—to move the goal posts—is to undermine that faith.

All the evidence suggests that serving troops already feel betrayed, disillusioned and frustrated. In a Sunday newspaper a few weeks ago, a British soldier serving in Afghanistan said:

“The British Army has no voice at grass-roots level. We have no union. There will be no strikes. No riots. Certainly no fire extinguishers thrown off buildings. We are just an easy target”.

There is the rub. In recent months, we have seen students protest, public sector workers strike and various interest groups demonstrate and engage in direct action. I suspect, and I say this with no relish, that we will see more and more people take to the streets as the Government’s excessive austerity measures kick in. Military personnel cannot do that. In the absence of civilian workers’ rights, they are particularly vulnerable and impotent in the face of damaging policy changes and cuts. Small wonder that they feel so beleaguered.

In January, Vice-Admiral Sir Michael Moore said:

“I have never seen a government erode the morale of the Armed Forces so quickly”.

What a terrible and shameful indictment. The Tory-led coalition’s attitude towards the military is shaping up to be, at best, ambivalent and, at worst, perverse. Some would argue that blue-blooded conservatism has traditionally been a friend of the military. Sure enough, the Conservative election manifesto pledged to

“ensure that our armed forces, their families and veterans are properly taken care of.”

The commitment appears to have started and stopped with the rhetoric. The Prime Minister is never slow to spot a good PR opportunity and he is slick when it comes to lavishing praise on our troops. For all his new-found hawkish instincts, he and his slash-happy Government stooges seem hellbent on making military service as unattractive and insecure as possible. It is under-resourced, under-equipped and undervalued with little regard to meeting current and future military needs.

The defence budget has been slashed and major projects have been cancelled or abruptly abandoned, frequently at ridiculous cost to the taxpayer. Around 17,000 armed forces posts are to go over the next few years, 11,000 of which will go through redundancy. A range of other issues, including the unequal treatment of military widows, disadvantageous changes to income tax relief on pension contributions and the proposed cuts to educational allowances for armed forces families only compound matters by adding to the cumulative effect. Those changes all seem incredibly short-sighted and it is difficult to see how any of them will do anything other than damage recruitment and recruitment levels, which I have been told are already at crisis point.

It is equally difficult not to suspect that the pensions indexation switch is something more opportunistic and ideologically driven than a mere fiscal measure. There has been no suggestion on the part of the Government that they consider the current pension and benefit arrangements to be overly generous, so that leaves the deficit reduction agenda as the only possible explanation for the cuts. Let us examine that explanation, because the problem with it is that it does not explain or justify the decision to change the index link permanently. That decision will have long-term impacts that will be felt long after the economy has recovered.

By way of an aside, it was mentioned earlier that my colleagues and I are urging the Government to enshrine the military covenant in law, but we must not let that campaign blur our vision or distract from the specific issues that we are discussing today. Let us consider the dry and self-explanatory observation of the Forces Pension Society to the Armed Forces Bill Committee:

“We note the commonly aired reference to the Covenant but we do not see a coherent and comprehensive set of actions which would make the Covenant come alive; it avoids any mention of pensions.”

When all is said and done, the most powerful argument in favour of abandoning this callous indexation plan for the armed forces’ pensions and benefits is basic—it is a moral one. It is about doing the right thing by those who have done the right thing by us. In return for the immense courage, patriotism and self-sacrifice shown by UK armed service personnel and their dependants, we have an obligation to provide them with the highest levels of support and reward, during and after service. If that involves discriminating in their favour, so be it.

As I hope I have illustrated, to renege on the deal made when service personnel signed on the dotted line would be to betray an implicit trust. Those serving will feel let-down and bitter, and who can blame them? And potential recruits will think twice before giving so much for so little in return.

I purposely paint a bleak picture, but as yet none of these changes is a fait accompli. There is still time for the Government to see sense. My own party has a number of ideas about how the deficit reduction dilemma might be resolved without so brutally hurting armed forces’ employees. In our view, the ideal solution is entirely to decouple armed forces pension and benefit schemes from other such schemes in the public sector. However, we recognise that that is not a practicable or realistic option at the current time. The best way forward would be to make the indexation switch a temporary one that could be reversed in 2014-15, or at least once the Budget deficit has been pared down.

Others favour an alternative time limit measure, something along the lines of maintaining the current RPI link for the armed forces personnel or their widowed spouses until they turn 55, when the link would come into line with the rest of the public sector. Such measures, and variations on them, are all quite feasible but none of them is perfect, and they will not please all the people all the time. However, they represent carefully considered compromises, which the grown-up coalition Government profess to be big on, and they would go some way to alleviating the short to medium-term pain.

In addressing the Minister, I urge the Government to consider those measures carefully. I also remind the Government that this is a cross-cutting issue, which requires joined-up thinking. Defence, Treasury and Work and Pensions Ministers must all think again.

I have a final salutary point to make. Thomas Southerne was an Irish dramatist of the 17th century. In 1685, he served in the army of James II, which fought against the Monmouth rebellion. Southerne knew what it was to be a soldier. In later life, he reportedly said:

“Dost thou know the fate of soldiers? They are but ambition’s tools, to cut a way to her unlawful ends. And when they are worn, hacked, hewn with constant service, thrown aside, to rust in peace and rot in hospitals.”

I am sure that everyone will agree that the part about “unlawful ends” is open to debate, but some modern military adventures spring to mind on hearing that quote. Southerne’s bitter closing observations make uncomfortable reading. Do we want to entertain the notion that, 300 years on and at the dawn of the 21st century, we hold our armed forces in no better esteem?

[Gemma Doyle (West Dunbartonshire) (Lab/Co-op)]

I congratulate my hon. Friend the Member for Liverpool, Walton (Steve Rotheram) on securing this important debate. As he mentioned, we have had a number of opportunities recently to debate these issues, including armed forces pensions and the military covenant. It is very important that we continue to debate them, because we have not yet received a satisfactory response from the Government Front-Bench team. Today we have a different Minister before us. Thus far, I have discussed these issues with the Under-Secretary of State for Defence, the right hon. Member for South Leicestershire (Mr Robathan), who is the Minister with responsibility for veterans. I am hopeful that we might hear something from the Minister who is here today that pleases us.

My hon. Friend the Member for Liverpool, Walton has already mentioned a quote from the Forces Pension Society, but it is one that merits repeating. The chairman of the society, Sir Michael Moore, recently said:

“I have never seen a Government erode the morale of the armed forces so quickly.”

That is quite a strong statement and the reasons for it stem from the wide-ranging promises made by the coalition partners to our service personnel, ahead of last year’s election and since coming into office. Their record of delivery has spectacularly failed to live up to their rhetoric.

In opposition, the Conservatives declared that the military covenant was “shattered” and they promised to rebuild it. Both the Conservatives and the Liberal Democrats made clear pledges to our armed forces, such as improving service housing, setting minimum standards for family welfare and maximising rest and recuperation leave. In government, they have so far offered very little to address those issues. Indeed, it is worse than that, because the measures that we are seeing now will roll back the military covenant. Accommodation has been identified as an area in which to make savings; tours of duty will be reviewed and there has been no guarantee that they will not be lengthened; and the Government have confirmed that armed forces personnel will be cut by 11,000.

The Prime Minister could not have made a clearer pledge than the one that he made to sailors on the aircraft carrier HMS Ark Royal just last summer:

“Whether it’s the schools you send your children to, whether it’s the healthcare that you expect, whether it’s the fact there should be a decent military ward for anyone who gets injured...I want all these things refreshed and renewed and written down in a new military covenant that’s written into the law of the land.”

However, nine months later, the Government have failed to enshrine a military covenant in law, or at the very least propose doing so in the Armed Forces Bill, which is making its way through Parliament. Instead, they have already changed their policy, as outlined to all MPs in a recent letter from the Royal British Legion.

As far as the armed forces are concerned, the Government’s time in office has been marked by broken promises and empty rhetoric. However, it is more serious than that. The actions of the Government are undermining the unwritten contract between the nation and our services in honour of the brave work that they do. In the process, as Sir Michael Moore said, the Government

“erode the morale of the armed forces”.

There is no better example of that than the impact of the Government’s planned pensions changes on the armed forces. As my hon. Friend the Member for Liverpool, Walton has outlined, the Government’s plans permanently to link public sector pension rises to CPI rather than to the usually higher measure of RPI will disproportionately affect members of the armed forces. I know that the Minister with responsibility for veterans does not accept that because he told me so in the Committee that considered the Armed Forces Bill, and I do not know whether the Minister for the Armed Forces will take a different approach today.

[Dr Murrison]

The hon. Lady puts forward an interesting case. Will she therefore commit any incoming Labour Government in 2015 to the measure that she appears to be articulating, namely, that the change will be temporary and, if so, how will that feature in the budget she intends to set? The armed forces will not be alone; others will say that they should be dealt with in a similar way.

[Gemma Doyle]

I think that the hon. Gentleman is aware that we proposed a much fairer, time-limited approach, and that would be a better way forward.

If the Minister will not listen to me, perhaps he will heed the concerns of the Forces Pension Society, which delivered a letter to No. 10 in December to explain to the Prime Minister the disproportionate impact of the pension changes on the armed forces. Many members of the armed forces leave the military by the time they are 40, or earlier perhaps, if they are injured, so their pensions start to pay out much earlier compared to those of other public sector workers, and the changes will result in their losing hundreds of thousands of pounds over their lifetimes. As my hon. Friend the Member for Liverpool, Walton said, we are not talking about small amounts of money—these are very significant amounts. For example, a corporal who lost both legs in a bomb blast—a horrific and serious injury—would miss out on about £500,000 in pension and benefit-related payment, a figure that is very difficult to justify. War widows, who disproportionately rely on their pension schemes, will also lose out enormously. According to figures from the Forces Pension Society, a 34-year-old wife of a staff sergeant killed in Afghanistan would be almost £750,000 worse off. Again, that is very difficult to get one’s head around, and to justify.

There can be only two possible reasons for the changes. The Government might think that armed forces pensions are too generous, but I have not heard them saying that, so I can assume only that it must be about deficit reduction, which is indeed the argument that has been put forward. I am afraid, however, that that argument does not add up either because the impact of the change from RPI to CPI uprating will be felt long after the Government’s intention to pay down the deficit is achieved.