§ Mr. Kaufman
asked the Secretary of State for Defence why the local overseas allowance for Royal Navy crews in the Gulf has been reduced by 10 per cent.; and whether he will reinstate this cost as from the operative date of 1 October.
§ Mr. Ian Stewart
Seagoing local overseas allowance, which is designed to make up, where necessary, the estimated difference between the cost of essential expenditure incurred by naval personnel when ashore abroad and ashore in the United Kingdom, was reduced by 12 per cent. in sterling in the Gulf area with effect from 1 October 1987 because the basket of local currencies, from which the allowance is calculated, depreciated relative to the pound sterling in which the allowance is paid. The purchasing power of the allowance is therefore maintained at the same level.
The SLOA rates are reviewed on a twice-yearly basis and may go up or down depending on the position of the relevant exchange rates at the time of the review. The next adjustment, if any, will be made on 1 April 1988.