Kevan Jones (Parliamentary Under-Secretary, Ministry of Defence; North Durham, Labour)

I am pleased to inform the House that with effect from 1 April 2009 there will be an increase in pensions paid through the Gurkha pension scheme of 14.1 per cent.

In addition, there will be significant increases of 20 per cent. and more to some 1,000 pensioners who are 80 years or over. This increase is in line with the tripartite agreement which established a linkage between Indian Army pensions and the Gurkhas pension scheme. This means the elderly who are the most vulnerable will get an overall increase of at least 34 per cent. on their pensions, a significant proportion of which will be backdated to January 2006.

It has always been our policy to ensure that the 26,500 Gurkha pensioners mainly living in Nepal are treated fairly. The Gurkha pension scheme currently costs some £47 million per year and it is calculated that these increases will add to the cost by a further £7 million per year.

This ensures that Gurkha pensions are kept at a fair and appropriate level and that the elderly who are the most vulnerable are helped. It demonstrates our continuing commitment to the retired Gurkha community in Nepal. This also reinforces the UK's long-standing links with the Government of Nepal which we greatly value and would wish to maintain.