To ask the Secretary of State for Defence what impact the operational bonus announced on 11 October will have on the payment of the X factor to members of the armed forces in (a) the 2006-07 financial year and (b) future financial years. (94387)

[holding answer 16 October 2006]: The introduction of the operational bonus will have no impact on the payment of X factor in 2006-07. The value of X factor will remain at 13 per cent. of basic pay for regular service personnel up to the rank of lieutenant colonel and equivalent at the mid pay point, beyond which it tapers. X factor is regularly reviewed by the Armed Forces Pay Review Body (AFPRB). The next review is due in 2007-08. My Department will therefore be submitting a paper of evidence on X factor to the AFPRB in 2007 to inform the body’s deliberations for its 2008 report.

To ask the Secretary of State for Defence whether the cost of the new operational bonus from 2007-08 will be met from (a) existing departmental budgets and (b) additional funds. (94522)

The cost of the new operational bonus, to be called “Operational Allowance”, will not be met from existing departmental budgets, but from the Treasury Reserve.