§ 4.57 p.m.
§ LORD SHACKLETONMy Lords, with permission—I am sorry it is at this late hour—I must repeat a Statement which my right honourable friend, the Secretary of State for Defence, has made in another place about Forces' Pay. His words are:
"In accordance with the standing reference of Forces' Pay made to the National Board for Prices and Incomes under Section (3)(1) of the Prices and Incomes Act 1966, the Board has made a First Report (No. 70). This recommends that pay should be increased by 7 per cent. with effect from 1st April, 1968, which is two years since the last increase; and that this increase should be treated as a global sum within which the Ministry of Defence should be free, subject to the usual Treasury agreement, to make appropriate adjustments and minor changes in pay scales. The Board also recommend that the out-of-quarters marriage allowance should be increased by 3s. a day for all ranks.
"The Government accept these recommendations, and these increases in pay and marriage allowance will be paid as soon as practicable.
"The Government welcome the Board's intention to undertake a 1275 thorough-going review designed to examine the feasibility of evaluating Service jobs and comparing them with those in civil life by methods which will reduce to the minimum the necessity for subjective judgment; and, as a related question, to examine the basic structure of Service pay and allowances, having regard to the implications of possible changes for manpower policies (Chapter 1, paragraphs 2 and 3 of the Board's Report). The Government have asked the Prices and Incomes Board to complete their review within a year in order that, consistently with current incomes policy, any new system of pay that may be desirable in the light of this review can be introduced as soon as practicable.
"The review will take into account the questions in Chapter 4 of the Report regarding the pay of doctors and dentists in the Armed Forces."
That is the end of the Statement.
LORD THURLOWMy Lords, we are grateful to the Leader of the House for this Statement. I should like to ask him one or two questions. First of all, regarding the 7 per cent. increase with effect from April 1, can he tell me how it is related to the comparable civilian rates; and if this examination of the feasibility of evaluating Service jobs is carried out, whether any alteration in pay, by way of further improvement, will be retrospective? Secondly, can the noble Lord tell us whether Service pensions are included. Here I must declare a considerable interest. Thirdly, can he tell us what the total cost of this increase of pay, and possibly pensions, will be? Finally, can he inform us whether the local overseas allowance is affected by this review?—because when I recently went to the Rhine Army there was considerable worry about the fairness of the interim L.O.A. additions.
§ LORD SHACKLETONMy Lords, I hope that I can answer the noble Lord's questions. I am not in a very strong position to give him an answer as to the extent to which this pay increase accurately reflects increases in civil pay rates to achieve comparability. Under what might be called the crude application of the Grigg formula, it does not match up to the full amount which would suggest 1276 even an increase of up to 10 per cent. But the noble Lord will note that the Board are to carry out a review in the course of this year which would establish whether those criteria are appropriate. Various consequences may then follow.
Clearly, I cannot tie the Government to the action which they will take on any recommendation, or indeed say whether any increase will be paid retrospectively. I share the hope of the noble Lord in this matter, realising also that this may have some bearing on his own personal interest in the matter of pensions. I congratulate him on being 7 per cent. richer as a result of this review. The total cost of the increase in pensions is £1.7 million—but I do not think that is all going to the noble Lord! The total cost of the present increase in pay and marriage allowance will be £27 million.
The noble Lord asked me about L.O.A. in Germany. I am afraid I cannot answer that question. He will have noted that, quite apart from the particular increase which has been announced, for the out-of-quarters marriage allowance, there is certain flexibility within the total amount as to how this money is to be allocated. I have a number of figures before me as to how it works out in regard to particular individuals, but I will not take up the time of the House by reading them out. I would only say that a representative increase for a married private living out of quarters could come to as much as 11 per cent. or 35s. The point about L.O.A. is noted, and no doubt it will be taken into account.
§ LORD BALERNOMy Lords, may I ask the noble Lord two questions? The first relates to recruiting for the Services. Are the Government satisfied that this mere 7 per cent. increase will be a sufficient incentive to bring up the numbers of recruits to something like what is necessary in certain branches of the Services? Secondly, in regard to the comparison of Service jobs with those in civil life, where there is a major discrepancy will the Service jobs be brought up to comparability with the civil jobs, and will this increase then be included in the overall adjustment as stated at the beginning of the noble Lord's statement—in other words, would it be included in the overall adjustment or would it be additional to it?
§ LORD SHACKLETONMy Lords, on the first point I cannot say that I, personally, regard the recruiting figures as very happy at the moment. As usual, the noble Lord, Lord Balerno, has put his finger on a matter on which he will find a good deal of sympathy, particularly from Service or ex-Service Ministers. We shall just have to see whether this does the trick. Clearly, these are the sort of national factors which the Incomes Board will have to take into account in establishing appropriate rates. It is not only a matter of comparability, but also a matter of recruitability which has to be taken into account.
I was not sure about the noble Lord's point on comparability. In regard to the present increase, there will be certain adjustments, but they will not necessarily be of a very wide range; nor will the Government themselves, in regard to particular areas of pay increases, be able to do very much in the way of adjustment in terms of comparability. I hope that the further review which will take place later this year will focus more precisely on that point. I am afraid I have not perhaps fully understood the noble Lord, or perhaps have not even given the proper answer. But if it is not satisfactory and there is something more to be added to it, I will let him know.