Armed Forces: Pay Recommendations (Hansard, 1 February 1999)

§ Lord Gilbert

The 1999 Report of the Armed Forces Pay Review Body has been published today. Copies are available in the Printed Papers Office and the Library of the House. We are grateful to the Chairman and members of the Review Body for the work they have put into them.

In the Comprehensive Spending Review, the Government made it clear that public sector pay settlements would need to be fair, affordable and consistent with targets for public service improvements we have set. The new arrangements announced in the CSR for the Pay Review Bodies were designed to ensure a closer and more effective link between pay settlements, departmental expenditure limits and service delivery targets. Under these new arrangements, the AFPRB now reports to my right honourable friend the Secretary of State for Defence, as responsible Departmental Minister, as well as to the Prime Minister. The Terms of Reference of the AFPRB were revised to ensure that, in making their recommendations, they took into account four key considerations set out in the CSR:

recruitment, retention and motivation of the Armed Forces;
the requirements for departments to meet their output targets for the delivery of services;
requirement for departments to stay within their three-year expenditure limits;
the Government's inflation target, requiring responsibility in pay settlements across the public and private sectors.

The AFPRB has recommended an increase in basic military salary of about 3.5 per cent. for all ranks, with the exception of: Privates and Lance Corporals, and their equivalents, who should receive 3.6 per cent.; Lieutenants and Captains, and their equivalents, who should receive 3.7 per cent.; and Brigadiers, and their equivalents, who should receive 3.3 per cent. Additional Pay—for example Flying Pay and Submarine Pay—will also increase by 3.3 per cent.

We are satisfied that these recommendations take account of the four key considerations and will support the Services' strategies to achieve full manning. The additional cost of this settlement will be contained within the MoD's expenditure limits announced in July and we will continue to meet the objectives and targets set out in Public Service Agreements. This is in line with the Government's prudent and disciplined approach to public spending and its commitment to delivering high quality public services and low inflation.

The AFPRB's recommendations are to be accepted in full, with implementation effective from 1 April 1999.