My Lords, earlier today my right honourable friend the Chancellor announced in the other place that we would fund an increase in X-factor, so this recommendation will now also be accepted. This will be welcome news for service personnel and their families who should receive the increase with their May pay. This positive response to the Armed Forces Pay Review Body recommendation also emphasises the importance and the respect that the Government accord to the views of the review body.
My Lords, that is of course very welcome news, although I think it would be a shade fanciful to think that a topical Question could so rapidly change the Government’s mind. Nevertheless, because there has been a delay, can the Minister assure the House that the pay uplift will be made available on time in April, or will it be delayed and have to be backdated? I hope that the Government will do everything they can to ensure that it does not have to be backdated. Will this additional pay be available to full-time mobilised reservists as well as to service personnel?
My Lords, service personnel will receive the increase from 1 May onwards. I understand that it is the general policy of all Governments not to backdate, to avoid adding complexity and risk to normal administrative operations. The noble and gallant Lord asked if the uplift in X-factor will be paid to mobilised reservists. X-factor is paid at the full level—currently 14%—to all ranks up to and including lieutenant-colonel or equivalent in the Regular Forces, full-time reserve service personnel on full commitment and mobilised reservists.
My Lords, the Government have made as nifty a U-turn as a London taxicab on implementing the X-factor supplement recommendation. Yet the contract for the chairman of the Armed Forces Pay Review Body, Alasdair Smith, is not being renewed. He said that, because of the late decision and the time needed to make another appointment, his successor will miss the first half of the year’s programme of work, including all the visits to members of the Armed Forces that are a hugely important part of the role. That statement indicates that this was a sudden decision by the Government, made following receipt of the pay review body’s recommendations at the end of January, since just over two weeks later Alasdair Smith was told that he would be finishing at the end of this month. In view of their hasty U-turn, will the Government now offer Professor Smith a further term as chairman? After all, he will have the confidence of members of the Armed Forces since he upheld the independence of the pay review body—or is that the problem?
My Lords, there is no link between the Prime Minister’s decision not to reappoint Professor Smith and the increase in X-factor. The Prime Minister’s decision not to extend Professor Smith’s appointment represents broader government policy regarding no automatic right to reappointment to non-departmental public bodies such as the pay review body. The decision is in line with the Commissioner for Public Appointments’ Code of Practice for Ministerial Appointments to Public Bodies. An interim chair, John Steele, has been drawn from the remaining members of the AFPRB until a formal replacement can be appointed.
My Lords, the remit for the 2013-14 pay round and the Armed Forces Pay Review Body’s terms of reference are contained within its 2013-14 report, copies of which are available in the Library of the House. The report also includes a letter to the body from the Chief Secretary to the Treasury in which he provides details of the Government’s approach to public sector pay for the 2013-14 pay round.
My Lords, the X-factor was introduced in 1970 and is paid as an addition to base pay. It is paid to reflect the relative disadvantage between the conditions of service experienced by members of the Armed Forces over a full career and conditions in civilian life that cannot be taken directly into account in assessing pay comparability. Those factors include danger, discipline, turbulence, separation and liability for duty at all times.
My Lords, I listened carefully to the noble Lord’s reply to my noble friend’s question. I heard him explain that it was perfectly within normal procedure for a contract not to be renewed, but I missed his answer as to why the contract had not been renewed in this case.
My Lords, I said that the decision is in line with the Commissioner for Public Appointments’ Code of Practice for Ministerial Appointments to Public Bodies. The Government believe that the habit of automatically renewing those appointments has to stop. We need to bring fresh blood into jobs such as these.
My Lords, I congratulate the Minister on the Government’s decision to send HMS “Daring” to Australia for the centenary of the Australian Navy. That leaves us with 18 escorts for the rest of the world. Does not the Minister agree that 18 is far too few and that we need to get going on the order for the Type 26 ship?
My Lords, during the passage of the Armed Forces Bill last year, we discussed the question of the Armed Forces covenant. We were given to understand that the Statement made by the Secretary of State for Defence each year on the covenant would be taken in this House, giving us an opportunity to ask questions about it. That did not happen. I suspect that if it had, my noble and gallant friend’s Question could have been put earlier. Will the Minister undertake that in future years the Statement on the Armed Forces covenant will be taken in this House?