A note on the legal advice to the Department explaining why retrospective changes to the Armed Forces Pension Scheme would have to be extended to other public sector pension schemes (Q34)

  The policy on retrospection in relation to public sector pensions schemes is well established and has been applied comprehensively by successive governments across the public services for many years. The reasons for avoiding retrospective improvement of pension benefits are primarily reasons of policy and cost. The basic policy is that those who retire are entitled only to those benefits that they have accrued within the scheme at the time at which they retired. In a number of cases, the level of benefits received relates specifically to contributions made by members (for example, where contributions were paid for extra benefits).

  Costs are also a major consideration. They are significant, particularly once the potential ramifications across the public services are taken into account, and in many of the areas where retrospection is sought the costs would be very large indeed. Changing the policy on retrospection has been considered unaffordable by successive Governments and, overall, the Government has taken the view that the policy of no retrospection is the fairest approach.

  There are also legal factors that bear on the issue. The general principle that a pensioner is not entitled to benefits introduced after a member left the scheme has been upheld in the European Court of Human Rights (ECtHR). The ECtHR affirmed in the case of Neill v United Kingdom that, in making provision for payment of pensions to Service personnel and their spouses, it was permissible to restrict entitlement to those still in service at the introduction of new provisions and to fix the level of entitlement by reference to the period of service completed following the introduction of those provisions. This view was confirmed in a second case about post-retirement widows' and widowers' pensions and an improvement to the Armed Forces Pension Scheme (AFPS) introduced from 6 April 1978. A number of retired officers' complained that the calculation under the AFPS of their widows' pension entitlements in the event of their deaths, based as it is upon the date of marriage or the date of retirement, was arbitrary and discriminatory. The Court ruled the challenge inadmissible, as the retired officers could not be victims because they received their entitlements under the rules in force at the time they retired, and the 1978 rule changes did not alter their entitlements.

  More generally, the Department's legal advice is that inconsistent application of a well-established policy, without appropriate justification, could be vulnerable to legal challenge. The Department has had regard to this in considering claims that there are unique aspects of military service that would justify retrospection with respect to particular benefits improvements only for Armed Forces pensioners.

A note on retrospection, including the validity of examples cited by the Forces Pension Society in its memorandum (QQ39 and 77)

  The Government's approach on this issue was set out in the memorandum supplied in advance of the Minister's oral evidence on 18 December 2002. It made clear the Government's policy that improvements to pensions arrangements are not applied retrospectively.

  The Forces Pension Society (FPS) cites two examples in its memorandum for the hearing on 18 December where, it argues, the Department has applied improvements to pension arrangements retrospectively. In fact, neither is an example of retrospection as there was no change in rules or structure to the Armed Forces Pension and War Widows' schemes applied retrospectively from an earlier date.

  The first example concerned an announcement by the Prime Minister in December 1963 in which he said that the war pensions of pre-1958 widows would, from a future date, be assessed on the more favourable basis recommended by the Grigg Committee (accepted by the Government) in 1958. The change meant that the widows received higher pensions from that date. Before the Pensions Increase Act 1971, there were no arrangements for annual uprating of pensions. Increases were applied at periodic intervals, typically five years or more, designed to increase payments to War Widows and others to restore and maintain their purchasing power. However, they were always paid from a current or future date. The 1963 announcement was part of this pattern of change.

  The second FPS example involved an announcement by the then Secretary of State in December 1989. Responding to concerns to help a "uniquely deserving category" of individuals, he said that pre-1973 widows would, from April 1990, be given an additional, tax-free payment of £40 a week from the then Social Security Department. During his statement, and in the ensuing debate, he made absolutely clear that the change was not retrospective. The new payment was designed to boost the income of the group, which had not benefited (because of the policy of non-retrospection) from the later improvements made to the AFPS.

  The above examples, in fact, show that before the Pensions Increase Act 1971 other mechanisms had to be found to ensure that the purchasing power of pension awards was maintained.

What action is the Department taking to reassure pensioners whose invaliding pensions have been examined as part of the review of the improper taxation of invaliding pensions and have been found not to have been improperly taxed? (Q59)

  In reviewing cases that might have been affected by the tax error, the Department has given priority to veterans or their dependants who have made enquiries, whether in response to media coverage or as a result of its national advertising campaign. Regardless of the result of its investigation into their taxable position, the Department has replied to all enquirers. The total enquiries to date number a little over 6,000, although very few have been received since November 2002. However, the Department has not informed any veteran where there has been no approach, but whose case has been investigated internally and found to be correct. The reasons for this are:

(a)  An up-to-date address is not necessarily held, particularly where dependants are concerned.

(b)  Even if addresses were available, the task would be extremely labour intensive and would have delayed the investigation well beyond the target for completing the work by the summer recess, on which the Minister for Veterans gave a commitment to the House.

  The 6,000 direct enquiries received represents less than 3% of the anticipated total investigations which the Department will be undertaking. Initial consideration indicates that the resources (personnel and cash) needed to track the addresses of large numbers of pensioners or dependants, some dating back to the 1940s, would be considerable. It is inevitable that there will be a number of cases where the veteran has died and his family have either died or are untraceable. An advertising campaign would be one way of reaching such individuals. On balance, the Department considers that a national media announcement at the same time as the Minister's planned statement to the House before the summer recess would be the most effective means of communication.

A note on widows' pensions, with examples of individuals in different circumstances (QQ81& 83)

  Until 1973, the widow of a retired Serviceman, irrespective of rank, was entitled to a pension equal to one-third of that of the husband. In 1973, improvements were made to the Armed Forces Pension Scheme, one of which was to increase Service widows' pensions to half the spouse's rate of pension. This improvement applied only to that part of the spouse's pension earned by his service on or after 31 March 1973. Opportunities were, however, provided for those already serving at that point to make direct contributions to buy-in former service at the half rate. For those who did not take up this option, only service given after 31 March 1973 counted at the higher rate.

  Post-retirement widow and widower pensions (PRWP) are given to the widows of Servicemen with service on or after 6 April 1978 and widowers of Servicewomen with service on or after 6 April 1989. Those Service personnel who left before the qualifying dates and who married after leaving the Armed Forces have no entitlement to spouses' benefits. Personnel who left shortly after the qualifying dates have an entitlement, but the PRWPs are low in value, as benefits only accrued from the date of introduction.

  The four examples at annex illustrate the impact on the widow's pension paid in different circumstances where the Serviceman's career spanned the 1973 improvement:

Example

(a)  no buy-back of benefit for pre-1973 service;

(b)  full buy-back;

(c)  member widowed or divorced after retirement and remarried, with full buy-back; and

(d)  member widowed or divorced before retirement and remarried before retirement, again with full buy-back.

  In all cases, the examples show the pension value at the time of initial payment and the value at 2002 prices.

  While it was recognised at the time that some groups would be excluded or adversely affected, notably those whose spouse died before retirement or who divorced and remarried after retirement, the affordability of buying-in also had to be considered. The lump sums required for buy-in former service at the half rate were based on an actuarial calculation of the benefits offered. The cost would have been significantly higher had the eligibility criteria been extended, for example, to post-retirement marriages. This would have put the measure beyond the reach of a number of personnel. At the time, the needs of those spouses who had shared the member's service were considered to be the particular priority. In addition, the circumstances where there was no benefit from the "buying in" arrangements (notably where the spouse died before the member's retirement) were set out clearly in the Defence Council Instruction which advertised the option at the time. All personnel had access to this. The instruction refers to eventualities which might give rise to grievances, such as the case where a Serviceman divorced and re-married.

  The importance of the timing of any second marriage is shown in examples (c) and (d). In examples 1(c)-3(c), the Serviceman re-marries after retirement and his widow therefore gets a pension based only on his service after the 1978 introduction of the post-retirement widow's pension (in example 4(c), the individual retires in 1976 and his widow does not therefore qualify for a post-retirement pension). In the (d) examples, the second marriage pre-dates retirement and, with full buy-back of pre-31 March 1973 service, means that the widow's benefit is the same as in examples (b) for the first and only wife.

What actions have been taken and preparations made to minimise the risk that Service personnel involved in future action will develop conditions attributable to service during the Gulf War? (Q112)

  The Government has demonstrated its commitment to addressing Gulf veterans' concerns openly, honestly, and seriously and will continue to do so. Gulf veterans' illnesses issues remain a high priority for this Government, as evidenced by the Gulf Veterans' Medical Assessment Programme and continuing support for research. The Government accepts that some Gulf veterans have become ill and that many believe this ill health is unusual and related to their Gulf experience. There is evidence that Gulf veterans report more ill-health than other comparable groups. However, the overwhelming consensus of the scientific and medical community, in which the Department shares, is that there is insufficient evidence to enable this ill-health to be characterised as a unique illness, condition or "syndrome". The Department remains open minded about possible causes.

  The Department takes very seriously its responsibility to its Service personnel, given the demands made on them during operations. Since the end of the Gulf Conflict, the Department has implemented changes in a number of important health-related areas:

(a)  The Department has made improvements in medical record keeping through the introduction of a new operational medical record form which is now in use. This should ensure that health events while on deployment are recorded more systematically than in the past;

(b)  The Department has acknowledged that the Gulf conflict revealed shortcomings in medical preparedness and, notably, a number of personnel were not up to date with their Service standard vaccinations. There is clearly a need to ensure that our forces are ready for world-wide deployment at all times, and vaccination status is an important aspect of such readiness. The Department's policy guidance has been modified to ensure that troops are immunised routinely, so there should be no need for personnel to receive a combination of vaccines upon deployment;

(c)  The Department has improved the briefings given to personnel on health-related matters. The Permanent Joint Headquarters (PJHQ) now commissions up-to-date medical intelligence briefings for those areas of the world where it is judged that UK forces are likely to operate. Personnel deploying on operations receive pre-deployment and in-theatre briefings on health and hygiene matters based on the assessment made by PJHQ. These briefings would include information on protection against biting insects, personal hygiene, sexual health, acclimatisation to living and operating in arduous environments, and the malarial prophylaxis that is required. There are also briefings on the nature and management of combat stress reactions and other psychological stresses of conflict. Arrangements to limit the effects of Post Traumatic Stress Disorder (PTSD) within the Armed Forces have been developed over a number of years, and they will continue to be reviewed in the light of medical developments in the field of stress management and treatment;

(d)  In respect of current deployments to the Gulf, health and safety instructions have been issued to the crews of vehicles which carry Depleted Uranium (DU) ammunition and to the units that support them. These instructions make clear that the risks from DU are far lower than those from other hazards arising from military operations and include advice on procedures for minimising contamination by use of respiratory protective equipment and protective clothing and procedures for handling DU ammunition. The Department has also issued thermo-luminescent radiation dosemeters to the nominated units;

(e)  New and comprehensive Joint Service guidance on the use of pesticides has been introduced and is kept under review. This advocates the use of pesticides only when physical controls (proofing, nets, etc) have proven unsuccessful. The Department's personnel are only permitted to procure and use pesticides approved by the Health and Safety Executive. Pesticides can only be demanded, held and used by trained personnel, and all use of pesticides must be recorded. A small number of organo-phosphate pesticides are still in use; these are considered the most appropriate products to meet the sometimes severe challenges faced by military personnel from insect-borne diseases, such as malaria.

  The Department cannot of course guarantee that deployed forces will not suffer ill health, but it is doing everything it can to minimise the risks.