Mr. Alan Lee Williamsasked the Secretary of State for Defence what steps he has taken to make good the effect of devaluation on service personnel overseas; and if he will make a statement.
§ Mr. Reynolds:We propose to increase the Local Overseas Allowance which is intended to cover essential extra expenditure incurred in the overseas area concerned, as compared with expenditure in the United Kingdom. We have worked on the general principle that the Serviceman overseas should be neither better nor worse off as the result of devaluation than his counterpart in the United Kingdom, and the increase therefore takes account of the rise in the cost of living which must be expected at home as the result of devaluation.
The rates now being introduced are interim. They are being followed up by a comprehensive review. Should it turn out as the result of the review that any further upward revision of Local Overseas Allowance is called for, this will be given retrospective effect.