MoD in talks to settle compensation row with gay veterans

The Ministry of Defence is in talks to try to settle a legal battle with gay veterans who say they were unfairly left out of the biggest compensation payments for people forced out of the armed forces because of their sexuality.

The defence secretary, Wes Streeting, told the Guardian the department was holding talks this week, as a High Court challenge over the rules of the compensation scheme approaches.

Resignations, not dismissals

Next week a judge will decide whether two former service personnel, Steven Stewart, 55, a former Royal Military Police corporal, and Mark Shephard, 49, who served in the RAF, can bring a judicial review of the government's LGBT financial recognition scheme, which was set up in 2024 under Keir Starmer.

Both men say they were targeted because of their sexuality and forced to leave. But because their departures were recorded as resignations rather than dismissals, neither qualified for the scheme's £50,000 payment for those dismissed or discharged. Instead, Mr Stewart received £7,000 and Mr Shephard £5,000 under a separate payment recognising the impact of the ban.

"A way forward"

Mr Streeting said he had to be careful what he said because the case might be subject to judicial review. Asked whether he would change the rules so that veterans who were pushed into resigning could get the dismissal payment, he said: "We do want to get this right, so we'll keep the conversation going and see if there's a way forward that doesn't require legal action."

He stopped short of promising to change the rules or confirming that a settlement was being considered.

"It's tricky," he said. "The balance the review tried to get was making sure that where we've got records of dismissal, we're able to act. But also recognising there'll be lots of people who left for whom there were no formal records, and making sure they're still eligible to apply for support, which they are."

"The money is there"

Gay men and women were banned from serving in the British armed forces until 2000. No proper records were kept, but between 200 and 250 people are thought to have been thrown out each year because of their sexuality.

Mr Streeting, Britain's first openly gay defence secretary, urged veterans who had not yet applied to come forward. "The money is there. We've got £75m allocated to this. Over £60m has already gone, but I'm sure there are still more people who could benefit," he said.

He said some veterans had died without seeing justice. "What the payment can't do is erase the pain and the indignity of asking people who served their country faithfully to leave a career, to leave a service they loved, because of who they are."

The case has raised questions over whether the government is prolonging an injustice, with veterans who were pressured into resigning potentially receiving thousands of pounds less than those who were formally dismissed.

The ban was lifted in January 2000 after a ruling by the European Court of Human Rights. A review of its impact, carried out by Lord Etherton and published in 2023, found that many veterans had suffered lasting harm, and led to a formal apology from the government and to the compensation scheme.