§ 3.58 p.m.
THE PARLIAMENTARY UNDERSECRETARY OF STATE FOR DEFENCE, R.A.F. (LORD WINTER—BOTTOM)
My Lords, with the permission of the House, I should like now to repeat a Statement that is being made by my right honourable friend the Secretary of State for Defence in another place on pay of the Armed Forces. The Statement is as follows:
"On the 30th May, 1968, the Government announced that they had asked the National Board for Prices and Incomes to undertake a thoroughgoing review of the pay of the Armed Forces. This review was to examine the feasibility of evaluating Service jobs and comparing them with those in civil life by methods which would reduce to the minimum the necessity for subjective judgment and also to examine the basic structure of Service pay and allowances. The Government have now considered the Board's Report. They are grateful for the thoroughness with which the Board have carried out their task.
"For the short term the Government accept the recommended increase in pay to take effect from 1st April, 1969, together with other immediate changes in emoluments recommended by the Board.
"The Government accept in broad principle the Board's long-term proposals as a basis for a new structure of Forces' pay, along lines which would make it possible to establish a clear relationship between the emoluments of Servicemen and their civilian counterparts. As the Board recognises, however, much work still needs to be done in order to establish, following the re- 872 port, suitable levels of reward for individual Service ranks, branches and trades; to determine appropriate charges for accommodation and rations; to construct a new pay code which will ensure a square deal for the Serviceman while assisting the Services to overcome current recruiting problems; and to enable the cost and other implications of implementing the new structure to be precisely assessed.
"In addition there are a number of detailed recommendations in the Board's Report the implications of which require careful study which must take some time in certain cases. It will be our intention, however, to complete this process, so far as the practical difficulties and the sheer size of the task permit, by next April. Work has already begun.
"The Government accept the Board's proposal for the regular review of Forces' Pay thereafter.
"They also note the views of the Board on Service pensions. This subject is being studied separately, and it will necessarily be some time before the results can be published. A major factor lies in the need to clarify the relationship between Service pensions (together with other occupational pensions) and the Government's earnings-related pensions scheme announced in Cmnd. 3883."
My Lords, I am grateful to the noble Lord for repeating this Statement, but I must confess that I find it a little difficult to follow without knowing the Prices and Incomes Board's recommendations, and the Statement does not help us there. In the Statement, reference is made to the current recruiting problems with which the Services are faced. These problems are very great—indeed almost catastrophic. I hope that what the Government are now proposing to do on pay will help to solve these problems, but I feel that the damage which has been done to Service morale and recruiting under their Administration goes far deeper than mere questions of pay. Having got that off my chest in an easy-oasy sort of way, I should like to ask the noble Lord two simple questions. The first is: what is the recommended increase back-dated to April 1 of this year? 873 Secondly, how does that increase compare with the increase which would have been applicable under the Grigg formula?
§ LORD BYERS
My Lords, I am sure that the House will welcome the comparison which has been made by the Prices and incomes Board between the civilian and military occupations. This is important, but only, I suggest, as an aid in decision-making. It is much more important that the Services, which are charged with the defence of the nation, should be able to offer sufficiently attractive pay and conditions to ensure that the Armed Forces are kept up to strength. May I therefore put this question to the Minister? Will he confirm that the Government are not subordinating this aspect of defence policy to the Prices and Incomes Board and that the final decision on what is to be paid lies with the Government?
§ LORD WINTERBOTTOM
My Lords, I have every sympathy with the noble Earl's comment that the Statement lacks detailed information. Perhaps I may refer him and other noble Lords to the Board's Report. The various elements are mentioned in paragraph 168, on page 45, and paragraph 276, on page 73, of the Report, which I believe the noble Earl has received. The proposals are for an increase of 3½ per cent. on pay, additional pay and marriage allowance, back-dated to April 1, 1969, to be treated as a global sum of about £14 million; and secondly, for increases of pay for Service doctors and dentists, based on an average salary of £4,000 per annum for those not living in official quarters, the increase to be treated as part of the global sum. In practical terms, this means just under a 4 per cent. increase on basic pay for Servicemen and a much higher figure—approximately 14 per cent.—for doctors and dentists.
I cannot say precisely what the position would have been if Grigg had continued to apply. When the Prices and Incomes Board were first requested to bring the Armed Forces' pay under their general supervision, they came to the conclusion that the Grigg formula was not an ideal instrument and that something better must be produced. So I am not able at this moment to say what the Forces would have got compared with 874 this, if the simple Grigg formula had continued.
Turning to the remarks of the noble Lord, Lord Byers, I think that everyone has substantial sympathy with his comment. The Prices and Incomes Board are not dictating a pay policy to the Government; they are simply advising. As the noble Lord rightly says, the key need is to improve recruitment, and I am certain that this factor will be borne in mind by my right honourable friend when the final negotiations on the actual detailed implementation of these proposals take place.
§ VISCOUNT BRIDGEMAN
My Lords, may I remind the noble Lord that if any alteration is proposed in the structure of pay of the Forces, it will not only have to be related to the so-called peacetime conditions but also made applicable to active service. In these circumstances, has the noble Lord realised that there are big differences between conditions in civil life and life in the Forces?
§ LORD WINTERBOTTOM
My Lords, the noble Viscount is quite right. This is a most important factor in the calculations, and I would commend to him this extremely interesting Report. There is this element known as the X factor, which represents the sacrifices a Serviceman has to make in entering a military career. I think that the noble Viscount will find this argued in an interesting way in this document, in an attempt to bring to the public and to the Serviceman the relationship between what he earns in the Services and what he might earn in civilian life, with proper compensation for the additional risk s he has to bear as a serving soldier.
My Lords, the noble Lord kindly credited me with having read the Report, but I must confess that I have not yet done so. Could he help me with regard to the Grigg formula? He has calculated the overall increase back-dated to April 1 of this year which is being granted as being one of 4 per cent, for other ranks. My arithmetic is as follows. Grigg would have permitted a 10.1 per cent. increase for other ranks last year. In fact 7 per cent. was granted. The Index of Industrial Earnings has risen by 4.3 per 875 cent. between April 1 of last year and January 1 of this year. That means, therefore, that other ranks would be lagging 7.4 per cent. behind. I understand that 4 per cent. is being granted and therefore, according to my ready reckoner, there is still a lag of about 3½ per cent. Am I wrong in that reasoning or am I right?
§ LORD WINTERBOTTOM
My Lords, I wish that I could answer with precision the noble Lord's arithmetic. Like him-self, I have had this document at somewhat short notice and have not yet done all my sums. The basic idea is that by April next year we hope to have a sufficiently accurate job evaluation to be able to decide what a Serviceman's job is worth in civilian terms and to be able to add to that the X factor, the compensation for the loss of individual choice, which is a necessary element of military life. I hope that during negotiations the X factor will be placed sufficiently high to ensure that recruiting is adequate.
§ LORD CARRINGTON
My Lords, that is very interesting, and I am much obliged to the noble Lord. But would the other ranks be better off or worse off if Grigg had been implemented?
§ LORD WINTERBOTTOM
My Lords, there is not a simple answer to this question. Under these proposals the unmarried soldier will be a great deal better off. We believe that the married soldier will also be better off. But this will come out when the final negotiations are completed, by April, 1970.