Armed Forces Pay — [Steve McCabe in the Chair]

– in Westminster Hall at 2:57 pm on 14th September 2017.

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[Steve McCabe in the Chair]

Photo of Stephen Morgan Stephen Morgan Labour, Portsmouth South 3:00 pm, 14th September 2017

I beg to move,

That this House
has considered armed forces pay.

It is a pleasure to serve under your chairmanship, Mr McCabe, and to have secured my first debate in Westminster Hall today, following my maiden speech in the main Chamber yesterday.

Portsmouth has a proud military history. It is one of the most famous ports in the world and our association with the Royal Navy continues to go from strength to strength. Our naval base is home to almost two thirds of the Navy’s surface ships and we have recently welcomed the new aircraft carrier, HMS Queen Elizabeth. We look forward to welcoming the second new carrier, HMS Prince of Wales, in the near future.

The Navy is an intrinsic part of my home city, its DNA and my own family’s history, and the naval dockyard is hugely significant to the local economy. A tenth of Portsmouth’s workforce is employed there, either in the armed forces or as part of the civilian workforce who support the Navy’s work there. I pay tribute to all their work, but for today’s debate I will focus on the work of our armed forces and specifically on their pay.

I called for this debate because our armed forces have been subject to years of pay restraint in the face of rising costs and increasing pressure on their incomes. This week, we have all seen the displeasure of public sector workers about the 1% pay cap as well as the hard work of their various unions in speaking out for them, which, hopefully, is now starting to effect real change. However, our armed forces do not have that voice; we have a responsibility in this place to be their voice. We have to speak out about their pay, pensions and working conditions if they are to see any improvements.

I will focus on three areas today: pay restraint; rising costs; and, finally, recruitment and retention. First, there is pay restraint. Like other public sector workers, members of our armed forces have been subject to pay restraint for several years. New figures from the House of Commons Library show that the starting salary of an Army private is now down 5.3% in real terms since 2010—a cut of more than £1,000 a year.

I suspect that the Minister will tell us that it is the Armed Forces Pay Review Body that makes recommendations for armed forces pay, and that the Government have accepted those recommendations. However, it is clear from the review body’s 2017 report that they are making recommendations with the constraint of the cap in mind. The report states that both the Chief Secretary to the Treasury and the Defence Secretary reinforced that approach in Government policy. The report even goes so far as highlighting the review body’s concern with the cap, saying that

“We commented last year that we were concerned about the sustainability of the current ongoing pay restraint policy, and that continues to be our view”.

I ask the Minister today whether similar constraints will be put on the review body when it makes recommendations in the future. If the Government decide to lift the public sector pay cap for our armed forces, will the review body be given a chance to produce an interim report so that new pay levels for our armed forces can come in as quickly as possible?

The second area that I will cover is rising costs. It is not just the case that pay is being restrained; it also comes at a time of rising costs for families across the UK, with some specific rising costs for forces’ families, which my constituents have raised with me personally. There is a new combined accommodation assessment model that uses new grading criteria, and it will see charges increase for about three quarters of service families accommodation occupants.

Armed forces personnel have also seen their national insurance contributions rise. Again, I refer to the pay review body’s 2017 report, which made the situation very clear:

“A common theme from our visits was that the one per cent basic pay award…was not perceived as an increase as it coincided with increases in National Insurance, changes in tax credits and…increases”— that is, other increases—

“that left a number of Service personnel seeing a reduction in take home pay.”

My third and final point is about recruitment and retention. Pay restraint is not only hurting our armed forces personnel in the pocket but it is clear that it is having an impact on the ability to recruit and retain personnel. When it comes to recruitment and retention, our armed forces are in crisis. All of our services are running at a liability of 5.1%. Figures released just today show that, for the first time and even by the Government’s new and questionable definition of “trained”, the Army has fallen below 82,000 in number. Its full-time “trained” strength is 81,920 and the numbers are trending downward.

That is nothing short of a broken manifesto commitment by the Conservatives. They promised us that they would keep Army numbers above 82,000. The Government now urgently need to take action, and although I recognise that dealing with pay will not solve all the existing problems, it is a good place to start. This year’s armed forces continuous attitude survey showed how unimpressed our services personnel are with their pay. Only 33% of respondents were satisfied with their basic rate of pay. By comparison, in 2010 satisfaction with pay was at 52%. Can the Minister identify what might have changed since 2010 to cause that 19% drop?

Among all those members of our armed forces who have put their notice in to leave, pay was the fifth most significant factor in making that decision. However, when we look just at “Other Ranks”, pay was the fourth most cited reason. Opportunities outside the armed forces also played a strong role in people’s decision to leave. The Army Pay Review Body’s latest report highlights that the review body has experienced this attitude at first hand, stating on page 53 that

“our visit programme made clear that Service personnel are becoming increasingly frustrated with public sector pay policy. They feel their pay is being unfairly constrained in a period when costs are rising, private sector earnings are starting to recover, and the high tempo demands on the Armed Forces have not diminished.”

The evidence is there: voluntary outflow is hugely high and recruitment is stagnant. If the Government do not get to grips with this problem soon, operational capability will start to diminish. Our armed forces are enormously professional and are respected around the world. They can do a lot with a little, but we have to be realistic: if we do not meet recruitment targets, they are not going to be able to do everything that we want them to.

So far, I have been disappointed with the Government’s responses to questions from my colleagues about recruitment targets. When asked for specific details about future targets, Ministers have responded with vague, single-sentence answers, such as:

“The Government is committed to maintaining the overall size of the Armed Forces”, which the Minister for the Armed Forces recently wrote in response to the shadow Defence Secretary, my hon. Friend Nia Griffith. This makes me concerned that the Government are not taking this issue seriously.

In conclusion, I have recently returned—hot-foot—from the Defence Academy of the United Kingdom, where I saw at first hand some of the challenges that our armed forces face, and I want to put on the record my encouragement to any Member of Parliament to consider attending this useful scheme. However, some of those on the frontline have said to me that they now feel undervalued and unappreciated, and that morale is low. When I asked them what I personally could do as a new Member of Parliament, their feedback was, “Make sure the Government make us feel valued again”.

Given all his experience, the Minister will understand the severity of the current problems regarding the plans to lift the 1% pay cap for the armed forces. I hope that he will get to grips with that issue.

Photo of Luke Pollard Luke Pollard Labour/Co-operative, Plymouth, Sutton and Devonport 3:08 pm, 14th September 2017

It is an honour to follow my hon. Friend Stephen Morgan, who made such an eloquent maiden speech in the main Chamber yesterday. To throw himself in at the deep end with a maiden speech and then a 90-minute Westminster Hall debate less than 24 hours later shows the grit and determination that Portsmouth seems to instil in its MPs. I commend him on securing this debate.

I share my hon. Friend’s interest in the armed forces. As the son of a submariner, I know that armed forces pay is not only about supporting and rewarding those people who serve our country but about putting food on the table for families right across the country. Nowhere is that closer to my heart than in Devonport, which is the country’s largest naval base—indeed, it is the largest base in western Europe—and home to many of the frontline fighting forces that our country so relies on. It is also home to half our nation’s frigates and to our amphibious assault craft, including HMS Ocean, which at the moment is doing such a good job in supporting the relief effort for our overseas territories and our friends in the Caribbean.

Plymouth, Sutton and Devonport is also the spiritual home of the Royal Marines, at Stonehouse Barracks. Sadly, that base is due to close under Conservative Government cuts. We are also home to the Army and the Artillery at the Royal Citadel: again, a base that is closing. The Army numbers and the Royal Marines and Navy personnel in Plymouth are an integral part of our city. The cap has had an effect not only on the ability of those forces’ families to afford to pay their bills, but on the contribution that they can make to our local economy.

Figures from the Library show that the number of armed forces personnel in the Navy and Royal Marines in Plymouth have fallen from 7,240 in 2010 to 5,000 now. Each job lost and each job transferred away from Devonport means less money spent in our communities and in our shops. There is a further cut in terms of officers in the Army and even in the RAF, which is not something that Plymouth is widely known for, although we have a few of them.

It is important to look in detail at what the pay means for each of the different ranks in the armed forces. There is a real manpower and personnel crisis in our armed forces, not only in terms of recruitment, but in retention as well. In particular, I want to talk about what it means for the engineering grades in the Royal Navy. Within the engineering sector there is a real concern about how many engineers we are producing and where we are recruiting them. If it were not for the assistance of our friends in the US Coast Guard and in fellow NATO countries, we would not currently be able to put the ships to sea that we are able to because we have so few homegrown engineers. One of the big reasons why engineers are leaving the senior service is pay: not only the pay cap, but the draw of larger rewards in the private sector.

In the far south-west, if someone holds an engineering qualification, particularly a nuclear engineering qualification, they are in heavy demand. The ability of the nuclear industry to continue to grow with the new nuclear builds and the potential decommissioning work adds to the draw of the private sector for a lot of our Royal Navy engineering grades. That needs to be looked at because the pay cap is an arbitrary tool that has been applied for ideological reasons; it does not look at what the consequences are. Can the Minister tell us what is the additional cost of recruitment and the additional cost of the uplift that we need to bring in freelance and other types of engineers to support our Royal Navy and whether a relaxation of the pay cap for those grades would be a more efficient use of public money?

Figures from the Library show that, throughout the entire military, if there had been a 3% increase over the course of the pay cap since 2010, a private would now be earning over £3,000 more. A corporal and equivalent ranks would be earning nearly £5,000 more. Lieutenants—many people mispronounce that; I think they watch too much “Star Trek” and Americanise our grades—could be earning £4,000 more, and majors and equivalent ranks whose actual pay was £59,783 could have been earning £66,886. All of those are a draw against staying in our military.

The British armed forces are the finest fighting forces in the world. The arbitrary, ideologically driven pay cap affects not only our ability to retain the first-class talent that we have within our armed forces, especially at engineering grades in our naval dockyards and bases that both I and my hon. Friend the Member for Portsmouth South represent—it also affects how we recruit people to those grades. Will the Minister address what we are doing about engineering grades in the Royal Navy?

I imagine that Members here today share a common desire for the Royal Navy to succeed. An integral part of the Royal Navy’s success is looking not only at the capability of hulls and what we put on them—the new frigates, the new carriers, the new offshore patrol vehicles, the Type 45s and other ships—but at the personnel on board. I am really concerned that if the arbitrary pay cap continues in our armed forces, we will hollow out the expertise, especially around the specialist grades that we need to put our ships to sea. In a more uncertain world, we need to retain and recruit the very best for our engineering grades and for our frontline fighting forces.

The Government could take a big step forward and consider whether an arbitrary pay cap for our armed forces is the right way forward. Relaxing that pay cap or removing it altogether to ensure that people are paid the same in real terms this year as they should have been last year would be a way of recognising not only the fantastic work they do, but would recognise that in their pay cheque as well. I have had—I am sure my hon. Friend the Member for Portsmouth South has as well—people come to me since the election to say they are growing sick and tired of politicians saying warm words when people in our armed forces have stepped up to serve the country, but not rewarding them when it comes to the budget settlement about how much those people take home.

As we are all here because we respect and value the work of our armed forces, I ask the Minister to think seriously about how the pay cap is having a serious effect on retention and recruitment of specialist personnel in our armed forces and how that could be addressed in the coming years. We know a lot of skilled engineers are facing retirement, so we will be hollowing out our engineering grades. Will the Minister address those points when he responds?

Photo of Stewart McDonald Stewart McDonald Shadow SNP Spokesperson (Defence) 3:15 pm, 14th September 2017

It is a pleasure to see you preside over proceedings this afternoon, Chair. I congratulate Stephen Morgan on securing this debate and doing so just 24 hours after he gave his maiden speech, also on the issue of public sector pay restraint. It is obvious, given his first two outings in Parliament, that he will be a thorn in the side as far as public sector pay is concerned. He is absolutely right, so I wish him well.

Earlier this week I saw a tweet from Luke Pollard. It said that he and his hon. Friend the Member for Portsmouth South often get mixed up because people think they represent the same cities. If they carry on in this vein, following each other, that will likely continue for the life of the Parliament. If you will allow me, Mr Chairman, I also wish to put on record my thanks—I hope other Members will join me, particularly the Minister—to a former Member of this House who sadly did not hold on to her seat at the general election: Kirsten Oswald, the former SNP armed forces spokesperson, who did a tremendous amount of work on the issue we are debating this afternoon.

I am surprised to see that there is not a single Conservative Back Bencher here to defend the Government’s position. Given their defence of the European Union (Withdrawal) Bill on Monday, the power grab on Tuesday and the pay cap on Wednesday, I thought they would at least make it along to defend their own Government, but clearly armed forces pay restraint was just a step too far. It seems there are indeed brass necks on the Tory Benches. Is it any wonder? The Conservatives have continuously painted themselves as the sole party in this Parliament that defends and stands up for the armed forces, while continuously painting my party and lambasting the Labour party as being what they see as weak on defence. But we have heard the figures this afternoon: targets for the size of the Army have been missed; morale is low; recruitment is in crisis; and pay has been cut and cut, by over £1,000 a year, with pay restraint for the past seven years.

There are other issues surrounding the pay and conditions of members of the armed forces. One of those was highlighted by a colleague of mine in the Scottish Parliament, Gordon MacDonald, the MSP for Edinburgh Pentlands. It concerned Ministry of Defence housing where the rents go up all across the country. In Scotland the new charging system introduced by the MOD has seen 81% of service families having to pay more rent than under the old regime. Complaints about MOD housing in Scotland, outsourced to Carillion, have gone up by a massive 43%.

I do not wish to speak for long because I am keen to hear from the Minister, who is very diligent. Although we crossed swords a couple of times in the previous Parliament, and no doubt will do so again in this Parliament, I and many in my party have a great deal of respect for him. I look forward to hearing what he has to say, but I will end with this. As was adumbrated in the House yesterday by members of my party, the Scottish Government have now committed to lifting the pay cap for all public sector workers in devolved Government agencies. It is about time this Government followed suit. The utterly bizarre stunt that was pulled yesterday, when they did not even have the gumption to march through the Lobby and vote for what we all know they believe, says it all. It made this place look like a banana Parliament. I have spent my political life arguing that it is a banana Parliament, but yesterday was perhaps the best—or should I say the worst—example of that.

I commend the Scottish Government for what they do to support service personnel, service families and veterans in Scotland as far as they can. The “Renewing our Commitments” document that they published last year came with £5 million of funding to try to support service families, who are having to deal with the burdens of the pay cuts imposed on them by Whitehall.

Defending the country is of course the first duty of Government. It is increasingly difficult to know how that is to be done with hollowed-out armed forces, a recruitment crisis and forces whose morale is at an all-time low. It is not just a matter of our commitments to them—and those commitments are supreme. We must ask what effect there will be on national security, and whether the current situation allows us properly to live up to the commitments that we make to our allies, to be a strong and ready fighting force to protect the people of this country.

I look forward to hearing what the Minister has to say, and I congratulate the hon. Member for Portsmouth South on securing the debate. I look forward to seeing him take on the Government, on this issue and many others, as the Parliament progresses.

Photo of Wayne David Wayne David Shadow Minister (Defence) (Armed Forces and Defence Procurement) 3:21 pm, 14th September 2017

It is a pleasure to serve under your chairmanship, Mr McCabe. I congratulate my hon. Friend Stephen Morgan on making his second maiden speech. His eloquent words show strongly that he is a stout supporter of the interests of his constituents—particularly the armed forces and the Navy. It is particularly appropriate that we are holding this Westminster Hall debate today, because tomorrow is Battle of Britain Day and today is Support Our Soldiers Day. I have seen people taking to the streets of London to raise awareness of and funds for ABF The Soldiers Charity.

There can be no doubt that today, sadly, our armed forces as a whole face a crisis of recruitment and retention. In figures from the Ministry of Defence published only this morning, we are told that there are a total of 142,100 full-time trained personnel in all the services combined. That figure represents a stark reduction: on 1 April there were 143,090. The reduction is throughout the services—the Royal Navy and Royal Marines, the Royal Air Force and the Army. Let us not forget that the Conservative manifesto of 2015 said that the Army should not fall below 82,000. Yet the figures today show it is down to 81,920, and the situation is getting worse, not better.

A few months ago there was a good report, commissioned by No. 10 Downing Street, from Mr Francois, a former Armed Forces Minister. He reported that there was a crisis. That is my word, not his, but nevertheless he noted a severe reduction in the number of personnel in the armed forces. His figures were slightly different from what the MOD said this morning, but nevertheless the trend is quite clear. He said:

“The Regular strength of the UK Armed Forces is currently 138,350, 4.8% below the required number…In the year to April 2017, 12,950 people joined the UK Regular Armed Forces but in the same period 14,970 left.” I share the regret that has been expressed that no Conservative Back Benchers are here for this important debate.

We must ask the reason for this unfortunate trend, and, as the right hon. Member for Rayleigh and Wickford said, there are several clear reasons. He comments that

“while more personnel continue to leave each year than to join, the recruiting organisations across the Services are increasingly ‘running to stand still’ to try to fill the widening gaps in the ranks. Whilst the most serious problems remain in the Army, this is also likely to prove an increasing challenge for the Royal Navy and the RAF as their liability will increase by several hundred over the next few years”.

He hints that the problem can be put down, in part, to concerns about the future prospects that the armed forces offer, and declining standards of accommodation, with quite minimal improvements, in many areas. There is also real concern about the levels of remuneration available—or not.

The findings and recommendations in this year’s report by the Armed Forces Pay Review Body are governed by Government diktat, but it is nevertheless obliged to paint the picture that it sees, objectively. It states:

“On levels of pay generally, our visit programme made clear that Service personnel are becoming increasingly frustrated with public sector pay policy. They feel their pay is being unfairly constrained in a period when costs are rising, private sector earnings are starting to recover, and the high tempo demands on the Armed Forces have not diminished.”

I think that that is objectively correct, and it underlines the unfairness of the Government’s policy and attitude. It is essential to provide an objective facility so that honest recommendations can be made. Unless the Government have real reasons to reject those recommendations, they should be obliged to accept them. New figures from the House of Commons Library show that, for example, the starting salary of an Army private is down 5.3% in real terms since 2010. That is a cut of more than £1,000 a year.

We all want young men and women to join the armed forces in greater numbers, but—hand on heart—how on earth can anyone be persuaded to go into something with limited career prospects, where the living conditions for them and their family would be far from good, and where they would be likely to see a continuing fall in their standard of living? It is clearly unacceptable, and we strongly urge the Government to take a comprehensive approach to lifting the 1% public sector pay cap and to allow the Armed Forces Pay Review Body to make recommendations on pay rises for the armed forces. The Government should allow it to do so without restriction.

That seems to be a perfectly reasonable request, and it is one that many in the House support, including, I suspect, many Conservative Members—that is why they are not here to support the Government this afternoon. It will be warmly welcomed by the armed forces and those proud men and women who defend our country, sometimes in the most difficult circumstances. A point was made earlier about how the armed forces do not have a trade union to speak for them and are constrained in their access to the media to get their message across.

Photo of Stewart McDonald Stewart McDonald Shadow SNP Spokesperson (Defence)

The issue of an armed forces trade union for non-commissioned personnel featured in the Scottish National party’s manifesto. I am unsure about the hon. Gentleman’s party’s manifesto, but it sounds as though he supports the principle. Will he note that, just this month, a captain has been named as the general secretary of the trade union for non-commissioned armed forces in Denmark? Is it not about time that we followed countries such as Denmark, Germany and the Netherlands and established that here in this country?

Photo of Wayne David Wayne David Shadow Minister (Defence) (Armed Forces and Defence Procurement)

I hear what the hon. Gentleman is saying, and there is a strong argument for it, but it would be unfortunate if we allowed that issue, important as it may be, to distract us from the central issue before us this afternoon, which is our request—it is a cross-party request, I hope—for the Government to comprehensively lift their 1% pay restraint on the public sector, including the armed forces.

In conclusion, as things stand at the moment, there are few external voices to support the armed forces. The armed forces themselves are constrained in what they can say, so it is all the more up to us to put forward their case with strength, determination and, I hope, unity. Through that, the Government can clearly hear the voice of the House of the Commons. They should adopt common sense and fairness and change their policy forthwith.

Photo of Tobias Ellwood Tobias Ellwood The Parliamentary Under-Secretary of State for Defence 3:31 pm, 14th September 2017

It is a pleasure to serve under your chairmanship, Mr McCabe, and to respond to this debate. I declare an interest, which is in the Register of Members’ Financial Interests: I am ex-Army and a lieutenant colonel in the reserves. I pay tribute to the other coastal towns that have been represented in the debate by the hon. Members for Portsmouth South (Stephen Morgan) and for Plymouth, Sutton and Devonport (Luke Pollard). I represent Bournemouth. I think the only Members present who do not represent coastal towns are the spokesmen for the SNP and the Labour party, the hon. Members for Glasgow South (Stewart Malcolm McDonald) and for Caerphilly (Wayne David). Nevertheless, the debate has been helpful in understanding and sharing concerns about public sector pay specific to the armed forces.

A number of Members have made perhaps a little bit of a political point, asking where the Conservative Members are in this important debate. I could say to the SNP spokesman that there are no SNP Back Benchers here either; he is his party’s sole representative. Many Members who would have been here today are participating in the armed forces parliamentary scheme. That is why they are absent.

I pay tribute to the hon. Member for Portsmouth South for calling this debate. Like the hon. Member for Plymouth, Sutton and Devonport, he represents a historical city that has a connection with all services, but specifically the senior service. We need to place the debate in context and against the backdrop of the nation’s finances, which ultimately are the question mark hanging over the size of the coffers that the Treasury has to provide financial support not only to the Ministry of Defence, but to all armed forces. I will not go into the politics of the situation, but when we came into government in 2010 there was a significant deficit. That deficit has been reduced by three quarters and the economy is now growing. The low taxes we are seeing are creating growth in our economy. We have record lows in unemployment, which is a good thing.

However, let us be honest: the election result and the debates during the campaign showed a nation concerned about our public sector and the length of time that the pay freeze has affected them. That concern was shared not only by those individuals affected, but by those who support our teachers, nurses, doctors, fire service, police, ambulance service and armed forces. Our armed forces do not have the voice of the unions, as has been mentioned a number of times. Members will be aware that the Government have been continuing the difficult task of balancing the books, but we must recognise that that ultimately means a period of pay restraint that has affected all public sector workers, including the armed forces.

We are aware, as we bring fiscal discipline back to the public finances, that that restraint has had an impact on the salaries of our people, but looking forward, the Government’s recent announcement of greater flexibility where required in public sector pay means that the independent pay review bodies can now make their own judgments on future pay awards, which will mitigate the impact. As the Chief Secretary to the Treasury said on Tuesday, our public sector workers, including those in the armed forces, are among the most extraordinarily talented and hard-working people in our society. I would go further: our public services are one of the things that define Britain across the world, by which I mean not just our blue light services, but our armed forces in particular. I echo other contributors by saying that professionalism is what defines us and gives us our reputation across the globe. It is important that we look after the people using equipment in operations. They make their mark and step forward to make a contribution with allies as a force for good in this very difficult and challenging age. They, like everyone else, deserve to have fulfilling jobs that are fairly rewarded. We have to take a balanced approach to public spending, dealing with our debts to keep our economy strong while also ensuring that we invest in our public services.

Photo of Tobias Ellwood Tobias Ellwood The Parliamentary Under-Secretary of State for Defence

I think there might be enough time for me to do so.

Photo of Wayne David Wayne David Shadow Minister (Defence) (Armed Forces and Defence Procurement)

The Minister is hinting at something important, but I would like clarification. He talks about greater flexibility for the Armed Forces Pay Review Body. Is he suggesting that were that greater flexibility to produce a recommendation for a significant increase for the armed forces, the Government would accept that immediately, without question?

Photo of Tobias Ellwood Tobias Ellwood The Parliamentary Under-Secretary of State for Defence

I will not do what the Leader of the Opposition suggested when we came back to office after the general election, which was a knee-jerk removal of the 1% pay freeze. That was suggested in proposed amendments to the Queen’s Speech. I will work extremely hard to ensure that that ambition is fulfilled. If the hon. Member for Caerphilly recognises and reads what is happening this week, there is greater clarity to provide independence, to ensure that Departments are free to reflect what is required in this day and age.

The Government will continue to ensure that the overall package for public sector workers is fair to them and that we can deliver world-class public services that are affordable within the public finances and fair to taxpayers. The last spending review budgeted for 1% average basic pay awards, as has been mentioned a number of times, but that is in addition to progression pay for specific workforces, such as the armed forces, and that must not be forgotten. There will still be a need for pay discipline over the coming years to ensure the affordability of the public services and the sustainability of public sector employment. The Government recognise that in some parts of the public sector, particularly in areas of skill shortages—such as with engineers, as has been mentioned—more flexibility may be required to deliver those world-class public services, including in return for improvements to public sector productivity.

The detail of the 2018-19 remit for the Armed Forces Pay Review Body and the Senior Salaries Review Body—I stress that they are both independent bodies that provide advice to the Prime Minister and Secretary of State on pay and remuneration for the armed forces—is still under consideration and will be agreed as part of the Budget process. Recommendations from the AFPRB and SSRB are expected in the new year.

The Government, as I have emphasised, fully recognise the invaluable work undertaken by our gallant members of the armed forces, often in dangerous and difficult circumstances. A good example is the response of our personnel to the recent events in the Caribbean and Hurricane Irma. That is a timely example of the professionalism of our armed forces in a crisis. More than 1,100 armed forces personnel have been deployed so far under Operation Ruman, to provide relief to the people of the devastated Caribbean islands. A further 600 are en route on board HMS Ocean, which was mentioned earlier. I am sure all hon. Members will join me in paying tribute to the valuable work of our armed forces personnel.

The armed forces pay and wider remuneration package is designed to reward their unique service to our country and to support the recruitment and retention of personnel. The Government are of the view that the armed forces receive an attractive package of terms and conditions of service, which have not been mentioned so far and include a competitive salary with incremental pay scales. I stress that there are pay bands for privates, lieutenants and other ranks, such as captain. Each year they move up the band and their salary does not stay still. In fact, across the armed forces, the average individual pay rise has been about 1.5%.

Photo of Wayne David Wayne David Shadow Minister (Defence) (Armed Forces and Defence Procurement)

As someone with a distinguished service record, does the Minister personally think that remuneration in the armed forces is adequate? What is his personal view?

Photo of Tobias Ellwood Tobias Ellwood The Parliamentary Under-Secretary of State for Defence

I am going to do everything I can to make sure that we do our best to have the remuneration package that our armed forces deserve, but we have to bear in mind the context and the backdrop, which I have spelled out. There has to be fiscal recognition of the place we are in, but I agree with the hon. Gentleman that we should all work as hard as possible to make the case and ensure that personnel get the salary they deserve and need.

There is also a non-contributory pension scheme, subsidised accommodation and food, and access to free medical and dental care. Service personnel also have access to an allowance package that provides financial assistance towards additional costs incurred as a result of their service. Throughout the pay restraint period, many personnel in the armed forces have received an annual increase in pay of well above 1%.

During the period of pay restraint, armed forces pay has not stood still. In 2016 we introduced a major revision to armed forces pay in the form of the Pay 16 pay model, which was designed to simplify an individual’s pay journey, enabling them more accurately to predict their future career earnings. That has also rebalanced pay to reward armed forces personnel more effectively in line with their skills, while addressing many of the concerns raised by the AFPRB regarding the previous Pay 2000 structure.

We also employ remunerative measures to address issues of recruitment and retention, which have been mentioned, to ensure that our armed forces are manned to the required levels and with the requisite skills. Where there are particular issues in recruiting or retaining personnel, for which career management action by the services has had limited impact, we have the option of introducing targeted payments. Those payments can range from time-limited financial incentives, to longer-term recruitment and retention payments that recognise the particular challenges we face in retaining certain defence specialisms, such as military pilots or submariners.

Armed forces pay is subject to annual review by the Armed Forces Pay Review Body and the Senior Salaries Review Body, which are independent bodies tasked with providing the Government with recommendations on armed forces pay and charges for all military personnel, including the reserves. Their terms of reference require them to give consideration to the need of the services to recruit, retain and motivate suitably able and qualified people, taking account of the particular circumstances of service life.

As part of its review, the AFPRB undertakes a detailed and comprehensive programme of work each year, which consists of a package of both written and oral evidence from the Secretary of State for Defence, senior officials and service families federations, representatives of which I had the pleasure of meeting only yesterday. The AFPRB also undertakes a series of visits to military units to hear directly from service personnel about their views on pay. In 2017, the AFPRB met more than 2,300 service personnel and 154 spouses and partners during 186 discussion groups. It visited establishments both in the UK and overseas, including operational theatres and ships.

In addition to the evidence it receives from Government, the AFPRB also commissions its own independent analysis and research, including on the pay comparability of the armed forces within the wider UK economy. A programme of visits has just concluded and the Government look forward to receiving the AFPRB recommendations next year.

Turning to the 2017 report, which the hon. Member for Caerphilly mentioned, in January this year the AFPRB and SSRB recommended a 1% pay increase for service personnel, taking into account the evidence received and independent pay comparability data. Those recommendations took into account the need to recruit, retain and motivate high-calibre people; the Government’s policies on the public services; inflation targets and the public funds available for Defence. The AFPRB reported that it believed that a 1% increase in base pay would

“broadly maintain pay comparability with the civilian sector.”

We need to bear that in mind, because that is the competing area.

The Government accepted in full the recommendations of the AFPRB and SSRB. I take this opportunity to thank the members of both pay review bodies for their work; it is greatly respected.

Turning to future pay, on which we want to focus, as I stated previously the detail of the 2018-19 pay remit for the pay review bodies is still under consideration and will be agreed as part of the budget process. As the Secretary of State said this week at the Defence and Security Equipment International conference,

“we will have greater flexibility to respond to the recommendations of the Armed Forces Pay Review Body.”

I hope that answers directly the question posed by the hon. Member for Caerphilly. It is for the AFPRB to make its recommendations for 2018-19, and as I mentioned earlier its remit allows it to consider any specific recruitment and retention issues that may apply to the armed forces. I am sure it will consider some of the issues raised in this debate. Over the coming months, the Chief Secretary will write to all the pay review bodies setting out the Government’s pay policy. The Defence Secretary will submit formal evidence to the AFPRB, setting out any specific recruitment and retention issues.

The armed forces are among the most extraordinarily talented and hard-working people in our society. The Government are committed to ensuring that the overall package that they and other public sector workers receive reflects the value we place on their work. The last spending review budgeted for 1% average basic pay awards, but the Government recognise that in some parts of the public sector, particularly in areas of skills shortage, more flexibility may be required, as reflected in this week’s announcement. There does, however, need to be pay discipline over the coming years, to ensure the affordability of the public services and the sustainability of public sector employment.

I make a personal statement that I will do all I can, as Minister for Defence People and Veterans, to make sure that the remuneration package that our gallant armed forces personnel get is what they deserve.

Photo of Stephen Morgan Stephen Morgan Labour, Portsmouth South 3:47 pm, 14th September 2017

I pay tribute to everyone who has spoken in this debate. I thank my hon. Friend Luke Pollard for his important comments on the contribution that armed forces personnel make to local economies, and on the shortages for engineering jobs. I understand that that is also the case with chefs, and it is certainly an issue in Portsmouth too.

I also thank my colleague from the SNP, Stewart Malcolm McDonald, for his contribution on what the devolved Government in Scotland are doing and for his important message about the lack of Back-Bench Conservative Members in this debate. That says a lot about their support for the armed forces and it is a concern.

I thank the Labour spokesperson, my hon. Friend Wayne David, for his contribution on accommodation. He reminded us of the key findings of recent reports and the real challenges we face on recruitment to the armed forces.

As I said in my introduction to the debate, it is for us in this place to speak up for those who dedicate their lives to the armed forces, because they often feel unable to do so owing to a sense of loyalty to Queen and country. We have heard about the impact that the cap has had on morale, retention and recruitment. I will continue to work with colleagues throughout the House to build a cross-party consensus to hold the Government to account and to ensure that the armed forces get the pay they deserve.

Question put and agreed to.

Resolved,

That this House
has considered armed forces pay.

Sitting adjourned.