Armed Forces Pension and switch from RPI to CPI // February 1st, 2011 // Speeches, Articles and Interviews
Gisela Stuart supports the call for Armed Forces Pensions to remain linked to RPI, in response to the Government’s proposal to permanently switch AF Pensions to CPI. Cross party support has been generated, along with an EDM to raise the debate.
EDM 1367 31-1-11
Indexation of benefits and pensions for armed service personnel
That this House recognises and honours the immense courage and patriotism shown by UK armed service personnel and their dependants; commits to providing them with the highest levels of support and reward; notes with concern the Government’s proposed permanent switch to the consumer prices index from the retail prices index for the annual indexation of benefits and pensions since this represents a year-on-year reduction which will impact when the economy has returned to growth; further notes the cumulative financial loss this will cause service personnel and their dependants, including war widows and those serving in Afghanistan now; warns that a double amputee 28 year old corporal will lose £587,000 by the age of 70 and a 34 year old widow of a staff sergeant killed in Afghanistan will lose almost £750,000 over the course of her lifetime; and urges the Government to commit to making this switch temporary so that as soon as the fiscal climate allows and the deficit has been paid off our forces and their dependants receive the higher rate of pensions and benefits they deserve.
Background
In the Comprehensive Spending Review 2010 the Government announced that public sector pensions and benefits will be annually uprated using the Consumer Price Index rather than the Retail Price Index. CPI is a historically lower measure and this means that pensions will this year go up by 3.1% rather than 4.6%. This is intended to be a permanent change that applies to all public sector pensions and benefits.
Why is this unfair?
The result of this change, according to the Forces Pension Society would be: Disabled double amputee 28 year old Corporal would lose £587,000 by age 70. 40 year old Sergeant Royal Marines would lose £212,000 by age 85. 40 year old Squadron Leader would lose £319,000 by age 85. A senior NCO’s widow would lose three quarters of a million over her lifetime.
Source: http://www.forcespensionsociety.org/news/news-releases/public-services-pensions-and-the-armed-forces/
If this change goes through the impact this year will be: Severely injured service personnel (who won’t get work again) who have been discharged will lose £120 next year in pension. Compensation for specified minor injuries will be £110 less next year. A widow’s (with children) basic per annum pension will be £94 less next year.
Government’s position
The Government has been very robust in their defence of this policy. They have said it must apply across the public sector on a permanent basis and that no exceptions can be made. When challenged on this by the Forces Pension Society in November a Ministry of Defence spokesman said: “It is not possible to treat the armed forces differently from other public servants”.
The Government has consistently said that this policy is part of their deficit reduction plans. A Ministry of Defence spokesman said this month: ‘The economic situation has meant we have changed the kind of pension provided to our service personnel and the bereaved families which is more in line with inflation.’
The Forces Pension Society delivered a letter to Downing St, addressed to David Cameron, on Nov 30th asking the Government to rethink the policy. They have had an acknowledgement but to date no substantive response.
Labour’s position
Our starting point is that we would like to see Armed Forces’ pension and benefit schemes decoupled from others in the public sector and treated as unique, reflective of the unique nature of military service. This is, however, very difficult to achieve in legislation and is not a realistic option on the table at the moment, so we are campaigning for a commitment from the Government to reverse this decision once the deficit has been paid off in 2014/15.
We are against a permanent change as it will mean soldiers fighting in Afghanistan now will have poorer pensions in future and that war widows and injured personnel will have less pensions or benefits year-on-year. This amounts to a plan to permanently reduce levels of support to which the forces’ community are entitled rather than reduce the deficit.
We consider the Government’s failure to distinguish Armed Forces pension schemes as different from other public service schemes a failure to recognise the unique nature of military service. Crucially, this move will disproportionately affect members of the armed forces and their dependents since they rely on their pensions at earlier ages (usually around 40 years of age) more than other public sector employees.
Process
The Social Security Uprating Order provides the annual levels of percentage increase of all public sector pension schemes, including those for armed forces. This is likely to be brought forward in mid- February as it was last year. The SSUO is subject to affirmative procedure. That means that it cannot be amended - it is either approved or annulled by Parliament - but there will be a debate on the floor of the House followed by a vote. The SSUO is a DWP lead.
7 Comments to “Armed Forces Pension and switch from RPI to CPI”
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This is outrageous. RPI is a measure of inflation and has been used for 38 years used for uprating public sector pensions amongst other things. It isn’t a “reward” for anything, to be bestowed by governments or prospective governments as largesse. It should not be removed from the armed forces NOR should it be removed from public service pensioners or private pensioners linked to the relevant Parliamentary Acts, unless of course, a more accurate index is used in its stead, which CPI most certainly isn’t. Shame on you Labour politicians.
And as for the Conservative party; anti-inflation indexing should be as accurate as possible and not replaced as means to save money.
Tell us. are MPs pensions linked to RPI or CPI, incidentally.
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By Martin York | February 3, 2011
I fully agree with Martin’s comments and I would like to see the answer to his question on MPs pensions.
The Libcon Government must not be allowed to rob any pensions public or private. The move from the RPI to the CPI is nothing short of stealth theft. If they get away with it some pensioners and mainly women will fall in to poverty.
Also Tell us, why are you not supporting all public sector pensioners, those in the private sector linked to the relevant Parliamentary Acts and their widows? Why have you not signed up to EDM1032 -Indexation of Pensions and Benefits?
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By Donald Wood | February 3, 2011
Speaking as an ex-serviceman, and I think you have got this badly wrong.
Fairness is what you want, and so do we all. You don’t get that by accepting a general unfairness - the cowardly attack on all public service pensioners – by saying it OK, I just want one exception. Save the Forces Pensioners by saving all public service pensioners, them included, from the unfairness you accurately describe. I’ve tried Cameron, Clegg, Duncan-Smith, Webb, with the idea of restoration in 2014 – nary a reply.
I too, as an ex-serviceman, want all the wounded, the seriously injured, to be well looked after. As well as their full, RPI protected pensions, they should have further fully adequate special provisions specific to their circumstance. They are owed both.
But do bear in mind, in making your special case, what we ex-servicemen know, what everybody except maybe a tabloid editors remembers, front-line combatants are a minority of servicemen. Most servicemen do less exposed, less dramatic public sector work, quite like other public service jobs, on a day to day basis. And remember even of active combatants, the wounded are a minority again. Your whole argument seems coloured by melodramatic exceptionalism and inappropriate special pleading, hopelessly simplistic.
If ‘decoupling’ is, as you imply, the Labour Party position, it is a derogation of oppositional responsibility, mere populist opportunism. The Party should get off that pathetic stance asap and take the part of all 8 million PS pensioner voters, Forces included. Labour MPs really must work for universal rightness and fairness, not follow the tabloids.
Yes, I am an ex-serviceman. As a child in WW2 I was bombed. When I left the service, I became a teacher. I’m 76, my pension dependency, and my likely widow’s, is mostly by far on a Teacher’s Pension. This ex-serviceman, wants remembering and properly looking after, but with no special measures, no special pleading, just the public servant’s pension he paid for, protected by RPI as agreed when he took it out. Most people don’t fit into neat single categories, and many an ex-soldier is like me – something else as well, and not sentimentality.
The modest, simple demand of EDM1032 would do the job for the Forces Pensioner Society by doing the job for all public sector pensions. You really should drop your very difficult (as you recognise) arcane, complex, obscure proposal whose exceptionalism defies rational defence. Get justice for us ex-soldiers. us ex-teachers, all public sector pensioners, by getting behind the rational, reasoned, EDM1032. Please.
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By James Alexander | February 3, 2011
Robbery that all it is. This present government has not got an ounce on patriotism between the lot of them. Mind you none of them are exactly in touch with the reality of service men and women struggling to cope with both physical and psychological scarring, and now losing a huge part of the pension they so richly deserve.
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By david graham | February 8, 2011
All public sector workers should have the rpi link restored once the deficit has been sufficiently reduced and the economy is growing. To distinguish between, say, a police officer facing thugs every night on the streets of London and some members of the armed forces who sit behind a desk all their careers is unjust and simply not workable. Why don’t you join with your colleagues in the public sector and fight the change on its merits, rather than pleading an unattractive special case?
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By cwjones | March 6, 2011
So much for the Forces Covenant! We who served did so in the belief that our pensions were secure for life… I, like many others gave the best 30 years of my life and all I ask for is that which was offered and agreed in our terms and conditions. In the interests of maintaining the confidence and commitment of those who serve and protect us now, this must stop.
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By Dave Sale | October 12, 2011
If this or any Govt want the support and loyalty of their armed forces they should not treat them underhandedly and with the contempt that is shown to our forces of today.
Pensions are a big part of remaining in the forces and serving your country. The MP’s will not see a drop in their pensions and yet face none of the risks of our armed forces.
This Govt and its treatment of the public today is an embarrasment.
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By Ray Latham | January 16, 2012