The UK Ministry of Defence is negotiating an out-of-court settlement with LGBT veterans who left the armed forces because of discrimination. The ministry is seeking to avoid a judicial review of the financial compensation rules, under which affected service members received many times less than their formally discharged colleagues.
Key points
- What the dispute is about: In 2024, Keir Starmer's government launched a financial compensation scheme for LGBT veterans who had suffered discrimination. However, service members who left the military under pressure but were recorded as having “resigned voluntarily” were excluded from the maximum payouts.
- How much the veterans lost out on: Former service members who were formally discharged receive up to £50 000. Those who were forced to resign received only between £5 000 up to £7 000.
- Who is suing: Former Royal Military Police corporal Stephen Stewart and former RAF service member Mark Shepherd filed a claim with the High Court in London.
- The government's position: Defence Minister Wes Streeting said he was keen to find a solution without going to court, but has yet to guarantee that the rules will be changed.
What exactly is unfair about it?
Next week, a High Court judge is due to decide whether to allow a judicial review of the government's LGBT veterans financial recognition scheme. The lawsuit has confronted the Labour government with an uncomfortable question: does the current system continue to discriminate against people who were persecuted in the armed forces?
The claimants are 55-year-old Stephen Stewart and 49-year-old Mark Sheppard. Stewart served as a corporal in the Royal Military Police, while Sheppard served in the Royal Air Force. Both say they were targeted because of their sexual orientation and were effectively forced out of the armed forces as a result.
However, their departure was recorded as a voluntary resignation rather than a formal dismissal. As a result, neither Stewart nor Sheppard was eligible for the payment of £50 000, available to those who were formally dismissed. Instead, Stewart was paid £7 000, and Shepard — £5 000 under a separate compensation category covering the mere fact that the ban on LGBT people serving was in force.
What is known about the scale of the discrimination and the compensation scheme?
Gay men and lesbians were banned from serving in the UK armed forces until 2000. No accurate count of those affected during that period was kept, but it is estimated that each year, the number of people expelled from the military because of their sexual orientation was 200 to 250 people. Facing the threat of court-martial and public humiliation, many chose to resign voluntarily, leaving no official record of being discharged for cause.
In total, the British government allocated £75 million, of which more than £60 million has already been paid out to those affected.
What does the defence secretary say?
Defence Secretary Wes Streeting—the first openly gay person to hold the post in British history—found himself in a difficult position. On the one hand, he acknowledges the depth of the historical injustice; on the other, he is compelled to defend the ministry’s criteria.
“The balance that was sought when designing the scheme was to provide redress where records of dismissal exist, while also allowing the many people for whom no formal records have survived to apply for support,” Streeting said.
The secretary confirmed that the department is holding consultations to find a way forward without litigation, but stopped short of making any firm commitments to review the rules or pay compensation in full.
Streeting noted bitterly that many of the veterans affected had already died without ever seeing justice. He stressed that no amount of money could “erase the pain and humiliation” of loyal servicemen and women being forced to leave careers they loved simply because of who they were.
What happens next?
The High Court hearings will determine whether the compensation scheme’s rules are subject to judicial review. For the Labour government, the case will test its ability to right historical wrongs without creating new bureaucratic barriers.
At the same time, Streeting said he was determined to prevent similar injustices from being inflicted on transgender service personnel. He stressed that he was proud of the service of trans people in the armed forces, although he acknowledged that his previous decisions as health secretary—particularly regarding medication for children—had caused concern within the trans community.
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