What factors he took into account in determining the recent pay settlement for the armed forces; and if he will make a statement.

Pay rates for UK service personnel are recommended by the independent Armed Forces Pay Review Body, which bases its recommendations on a wide range of factors. The Government accepted in full its recommendations, which will be implemented with effect from 1 April 2008.

I thank my right hon. Friend for that response. Is he content that the recent pay award will improve recruitment and retention in our armed forces? Is he also content that the views and aspirations of our armed forces are reflected accurately under the current structure, particularly in the lower ranks?

The increases provided for by the pay review body this year will include not only the 2.6 per cent. but the addition of the X factor to increase the remuneration of the lower ranks by about 3.5 per cent. My hon. Friend needs to recognise that that is on top of the 9 per cent. for the lower ranks provided for last year. The operational bonus will also increase by 3.6 per cent. In addition, the retention packages for certain pinch-point trades will be continued to try to maintain skills in those areas where they are most needed. The package will be welcomed by the armed forces, including the lower ranks, and adds to what we achieved last year.