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Gratuities

Volume 927: debated on Wednesday 9 March 1977

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asked the Secretary of State for Defence how many commissioned officers in the Armed Services are affected by his proposal to change the rules concerning tax-free gratuities; why the changes are considered necessary, and what consultations he has had with the parties concerned.

For the position regarding officers' gratuities, I would refer the hon. Member to the reply to my hon. Friend the Member for Lambeth, Central (Mr. Lipton) on 7th March.—[Vol. 927, c. 369–70.] Consultations are taking place between my Department, the Civil Service Department and the Department of Health and Social Security with a views to the earliest possible decision. The views of the officers concerned and of hon. Members will be taken into full account.

asked the Secretary of State for Defence if he will publish in the Official Report the standard part or parts of the terms of service between the Armed Services and commissioned aircrew due to complete their service after April 1978 which relate to the provision of a tax-free gratuity.

Terms and conditions of service are set out in letters of appointment and related recruitment literature.The relevant extract in the Royal Navy literature for short career aircrew reads:

"There are two types of Commission available:
Type A: A pensionable commission to age 38, or for 16 years, whichever is later, on the Active List, after which officers are placed on the Retired List.
Type B: As for Type A, except that officers have the option to leave after 8 or 12 years' service with a tax-free gratuity".

The equivalent passages for the Royal Air Force read:

"Direct Entry: There are three types of Direct Entry Commissions (DECs);
  • (a) DEC Type "A". A pensionable career on a permanent commission to the age of 38, or, in the case of candidates entering after their 22nd birthday, to the date on which they complete 16 years' service.
  • (b) DEC Type "B". A pensionable career as for DEC Type "A", but with options to leave the Active List on Completion of 8 years' and 12 years' service with an appropriate gratuity."
  • Recruitment to Type "B" commissions has since ceased. Recruitment on non-pensionable, gratuity-earning terms continues for aircrew and other specialisations.