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Armed Forces Pensions

Volume 522: debated on Monday 31 January 2011

14. What assessment he has made of the effect on armed forces pensions of proposed changes to indexation arrangements for public sector pensions. (36749)

No robust assessment of the kind requested can be made as future movements of the retail price index and consumer price index are not known. To use the current 2010 rate as the basis for any forecast would give an unreliable representation of future payments in the long term as these rates will fluctuate over time.

I thank the Minister for his answer, but does he not agree that most studies suggest that CPI produces a higher pension than RPI? Does that not count as a cut in military and service personnel pensions?

If I may gently prod the hon. Gentleman, he has it the wrong way round: RPI is more likely to produce a higher pension than CPI, which is not what he said. As I pointed out to the right hon. Member for Delyn (Mr Hanson), there was no upgrading of pensions at all in April 2010 because RPI was negative in 2009, and that is the way things are. It was a hard decision, but we believe that it is in the best interests of the country and of the armed forces as a whole.