Considered in Grand Committee
My Lords, I start by paying tribute to the brave men and women of our Armed Forces. They deserve our admiration but, more than that, they deserve to be treated with respect, and they rightly expect the nation to honour their commitment. We have a duty to those injured due to service to provide a just and fair compensation scheme for them.
The Armed Forces Compensation Scheme came into force on 6 April 2005 to pay compensation for injury, illness or death caused by service. This provides lump-sum payments and, for the more seriously injured, a guaranteed income for life. It replaced the previous compensation arrangements provided by the War Pensions Scheme and the attributable elements of the Armed Forces Pension Scheme.
The new scheme is a significant improvement on the previous arrangements. Injured service men and women are now able to claim compensation while they are still in service. The previous Government should be commended for introducing the scheme in 2005, as well as for initiating a review of the Armed Forces Compensation Scheme in 2009 to ensure that it continues to support the needs of the Armed Forces.
On 10 February 2010, the then Secretary of State announced the outcome of the review conducted under the independent chairmanship of the noble and gallant Lord, Lord Boyce. I am very grateful to him for the thorough way in which he conducted the review and for producing such a meticulous report. The Ministry of Defence committed to implementing all his recommendations within a year. The more straightforward changes were put in revised legislation in July 2010. The more detailed recommendations were laid in new legislation on 28 February 2011. The two affirmative instruments for debate today complete the legislative changes required to implement the full package of changes.
The first statutory instrument relates to time limits for appeals if an individual is not happy with the decision made on a compensation claim. The intent is to extend the time limit for appealing decisions made under the AFCS from six to 12 months. This recognises that the nature of service life may prevent claimants picking up their mail and making an appeal within the current time limit of six months. For appeals heard in Scotland and Northern Ireland, this requires Section 8 of the Pensions Appeal Tribunal Act 1943 to be amended. The first affirmative statutory instrument that we are discussing today makes the required amendments to this Act. The time limits governing appeals about AFCS awards heard in England and Wales are provided in the Tribunal Procedure Rules. These rules have been amended to increase the time limit for appealing to 12 months, with the changes coming into force from 9 May. To ensure consistency and fairness, this affirmative instrument also increases the time limit for bringing appeals in respect of all other types of decisions capable of appeal under the Pensions Appeal Tribunal Act 1943, including decisions made in relation to the War Pensions Scheme.
The second statutory instrument is on the subject of rights of appeal. The intent is to make it clear that two types of new decision under the scheme do not carry appeal rights. The first relates to claims for a fast payment. This is a new provision introduced to enable those who have a serious injury due to service to receive an early payment before going through the full compensation claim process. This helps to provide them and their families with some early financial support and reassurance during what can be a very difficult time. If the final award is less than the value of the fast payment, no money will be recovered. Where additional money is payable, the balance is transferred to the claimant. The decision on the final award carries appeal rights. As the fast payment decision is not a final decision, the instrument being debated today excludes fast payment decisions from the list of decisions capable of being appealed. Not to make this change would result in a rather confusing system for claimants.
The second new type of payment is for medical expenses incurred abroad by seriously injured personnel who decide to live permanently outside the UK within a year of leaving the Armed Forces. This power broadens the scope of the scheme. As the noble and gallant Lord, Lord Boyce, recognised in his report, this new power is discretionary, so it would not be appropriate for it to have external appeal rights but rather an individual would be able to request the MoD to reconsider its decision. This remains open to individuals if they are not content with the decision made on their behalf.
These two statutory instruments are the next step in ensuring that the AFCS remains fit for purpose for our service personnel. I beg to move.
I join the Minister in paying tribute to all the brave men and women who serve in our Armed Forces. They deserve our respect and admiration and rightly expect society, through government, to honour commitments to them, especially to those injured in service.
I thank the Minister for his explanation of these regulations. These Benches endorse his remarks and support enactment. We agree that the new scheme is a significant improvement on previous arrangements. As the Minister explained, the two instruments complete the legislative changes required to implement the full package following the review undertaken by the noble and gallant Lord, Lord Boyce. I understand that the review team spoke to and received comments from over 200 individuals and groups, including serving members of the Armed Forces, their families, reservists, veterans and the general public. The noble and gallant Lord, Lord Boyce, and his team visited serving Royal Navy, Army and RAF personnel in their bases as well as at Headley Court. The noble and gallant Lord also spoke to Ministers, the Chief of the Defence Staff, the heads of the three services and the judiciary. The review concluded that the basic principles of the Armed Forces Compensation Scheme were correct. However, it found areas where further improvements needed to be made. The review findings have been well received. Ministers have agreed to implement all the recommendations. The Minister has today outlined the key areas regarding compensation and appeals.
However, there are other key recommendations that were also agreed to be taken forward, and I shall ask the Minister about two of them. First, there was a recommendation to set up a new expert medical body to advise on compensation for particular illnesses and injuries, such as hearing loss and mental illness. Will the Minister update us on the latest position regarding this new body? How many people will sit on it? Who will lead it? How will it operate and how extensive will its role be?
Secondly, the review recommended that there should be improvements in communication to service personnel and their families to promote a better understanding of how the scheme works, including entitlements, and how the calculations behind those entitlements are made. This should not only increase awareness but raise confidence among our armed service personnel that their welfare is important. I ask the noble Lord to assure us that this matter is also being attended to.
The Armed Forces Compensation Scheme, introduced by the previous Labour Administration and subsequently reviewed and improved here today, is agreed to be fit for purpose and is not in dispute. However, I ask for the noble Lord’s assessment of how it compares with other compensation schemes in the UK and overseas.
Although I recognise that the AFCS goes some way to compensate the injured and the families of those who have died, there are one or two discrepancies that can occur around the fringes of the scheme—often with regard to dates. Our Armed Forces have served in operations in Afghanistan since 2001, as well as in Iraq in 2003. Is the Minister content that those injured after 6 April 2005 receive awards under the AFCS scheme, whereas those who were injured merely one day before do not? Perhaps he can explain. A fair and respected compensation scheme must be a given for our Armed Forces, and I am content to endorse these provisions today.
I am sorry to delay the Committee but I wish to say only a couple of things. This scheme—as the previous Government brought it in, I think we can pass on our congratulations to them—seems to be an improvement on what went before it, and it certainly seems to be much more fit for purpose than what it replaced. When you are dealing with the Armed Forces and anyone who has been injured, there is always a part of you that wants to say, “Give them more”. However, I appreciate that there are limits.
The noble Lord, Lord Grantchester, has already touched on the specifics of the ongoing process of reviewing the scheme. Is there an inbuilt structure which means that we will constantly keep an eye on it as changes take place? If there is, I think that many people will be reassured. We will never get it right for all time with changes in medical technology, survival rates and so on, but if we were to have a look at the thinking here, that would help those of us who take an interest in this matter.
Perhaps we could also have a little more information on the body that has been set up. Knowing where it started from would be a help. As I said, the scheme may not be the most generous in the world but it seems to be a vast improvement on what preceded it and it provides a point from which to develop. An understanding of the logical basis and development of the process will help those outside and in the forces to have an idea of how they are viewed and how development will occur. That is something that we could usefully do today: we could put down a basis for future developments for as long as we will unfortunately need a scheme such as this.
I support the Motion to implement the two instruments, which very much fall within the recommendations from the AFCS review report. I think that some of the questions that noble Lords have asked were addressed in the report, and I am sure that the Minister will have adequate answers for them.
My Lords, I start by thanking all noble Lords for their support for the regulations. As I said in my opening remarks, the previous Government should be commended for introducing the scheme, as well as for initiating a review of the AFCS.
I shall try to answer the questions asked by the noble Lord, Lord Grantchester. First, he asked how the scheme compares with other schemes in the UK and internationally. The noble and gallant Lord, Lord Boyce, and his independent scrutiny group undertook comparisons with other schemes and compensation arrangements, and acknowledged that some adverse comparisons had been made in the media. The guaranteed income payment of an award can be the most financially beneficial part of a compensation package. This tax repayment over a lifetime is worth many hundreds of thousands of pounds and is not capped, whereas other compensation schemes may be subject to limits.
The noble Lord’s last question related to Afghanistan and Iraq and to compensation payments.
The noble and gallant Lord, Lord Boyce, considered carefully whether improvements should be made available to those who were injured before the start of the scheme in April 2005. The conclusion was that the improvements should not be backdated before that date. Those injured due to service prior to 6 April 2005 qualify for compensation from the War Pensions Scheme. Although the War Pensions Scheme was first designed over 90 years ago, it still provides valuable benefits for those who rely on it for compensation for their service-related injuries. Backdating improvements for a particular group would create new distinctions between that group and others who had suffered injury due to service all the way back to when the War Pensions Scheme was introduced in 1917. That would be a significant financial undertaking.
My noble friend Lord Addington asked about the new financial group, the Independent Medical Expert Group, and in answering I hope that I will address all his questions. The Independent Medical Expert Group of leading medical experts is undertaking its work on behalf of the MoD. It is chaired by Professor Sir Anthony Newman Taylor of Imperial College London’s faculty of medicine, and it comprises six medical experts, two service representatives and Colonel Jerome Church, who is the chief executive of BLESMA. They are appointed by Ministers.
This group was set up in March 2010 on the recommendations made by the review of the AFCS, led by the noble and gallant Lord, Lord Boyce, to advise Ministers on certain complex injuries that had been raised during the review as requiring further detailed medical consideration. These were, specifically, injury to genitalia, non-freezing cold injury, paired injuries, brain injury, spinal cord injury, loss of the use of a limb, mental illness and hearing loss. The group has examined each of these types of injury and has formulated recommendations to ensure that the AFCS appropriately compensates for them. IMEG’s initial recommendations will be published in the next few weeks, and the group will continue its work through to 2012 in order to consider fully the issues raised by the noble and gallant Lord.
My noble friend asked who will provide a constant eye on the progress of the AFCS. The Central Advisory Committee on Pensions and Compensation will continue to provide an ongoing overview of the AFCS post the implementation of the noble and gallant Lord’s recommendations.
I think that I have covered all noble Lords’ questions, although there was also a question about how we communicate with service personnel. The Independent Medical Expert Group is about to publish a report that identifies its initial findings and recommendations and that will address the very important issue raised by my noble friend about how service personnel will be communicated with.
I thank noble Lords and the noble and gallant Lord for their support. Our Armed Forces are indeed a special group of people and should be properly compensated for injury or illness arising from what we ask them to do on our behalf. I commend both sets of regulations to the Committee.