Armed Forces: Local Overseas Allowance

Thursday 25th October 2012 Lords Chamber

Question

11:21

Asked by

[Baroness Warwick of Undercliffe]

To ask Her Majesty’s Government what is the rationale for the reduction of the local overseas allowance (LOA) in relation to Operation Kipion.

[The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever)]

My Lords, local overseas allowance is paid to service personnel serving abroad to contribute to the necessary additional local cost of living in a particular country. Rates are not directly linked to Operation Kipion or any other operation. The most recent review of LOA was conducted during the strategic defence and security review, and the subsequent LOA conventions were implemented worldwide in two phases: on 1 May 2011 and 1 April 2012. Their impact varied with location, depending on the total cost of living differential relative to the United Kingdom. As with all allowances, the Government are concerned to ensure that LOA is managed in a way that is fair to service personnel but also, in a time of austerity, to respect the taxpayers’ need for value for money and financial restraint.

[Baroness Warwick of Undercliffe]

My Lords, I thank the Minister for that informative response in what is a rather complicated area, but I wonder whether I can press him a little further. During a visit to the Gulf this summer, service men and women raised with me the unfairness that they perceived in allowances, particularly for junior ranks. Will the Minister commit to looking again at the local overseas allowance in Bahrain which, as I understand it, has been cut substantially, is much less than that paid in the UAE and no longer reflects the cost of living, making it difficult to go off-ship when alongside? Will he consider including in this year’s budget the hotel allowance, which allows service men and women to spend time away from the service environment with family and friends, to repeat its welcome inclusion in the current budget? Given the Government’s commitment to the key principles of the Armed Forces covenant, does he accept that those cuts have had a real impact on in-theatre personnel?

[Lord Astor of Hever]

My Lords, the delivery of the policy that the noble Baroness mentions lies with the Service Personnel and Veterans Agency LOA team at Gosport. It conducts visits to the main locations, including Dubai and Bahrain, and decides the rates based on the local cost of items that service personnel need to buy. There may be legitimate reasons why rates differ even in postings quite close to each other, but the noble Baroness makes a very important point. We recognise the role that a fair system of allowances plays in keeping morale high. I have therefore asked my officials to look into the whole issue of Dubai and Bahrain to see whether the system is working as it should and will get back to her.

[Lord Palmer of Childs Hill]

My Lords, on a more general theme, when the cuts to local overseas allowances were announced, it was suggested by the Army Families Federation that because of the reductions, the Army might find it harder to find volunteers to go overseas and that Army messes would fill up, with unaccompanied postings becoming the norm. Can my noble friend tell us whether those fears were justified?

[Lord Astor of Hever]

My Lords, I do not think that the fears were justified. The SDSR set out a requirement to reduce expenditure on service personnel allowances by around £250 million in order to achieve the level of savings required by the economic situation in defence. It is accepted that these changes will be unpopular, and some of them may require adjustments to lifestyle, but they are a necessary part of the department’s contribution to the Government’s overall programme to reduce the deficit. To reassure my noble friend, we regularly review these allowances.

[Lord Burnett]

My Lords, over recent decades much of the outstanding work done by the Royal Navy has been sensitive, and therefore it has not been publicised. I hope that my noble friend agrees that the Royal Navy’s minesweeping expertise is second to none. Is he able to tell the House the value and importance that our allies attach to the Royal Navy’s contribution to Operation Kipion?

[Lord Astor of Hever]

My Lords, the success of Operation Kipion is measured by the fact that our efforts to reassure our Gulf partners through providing a constant presence in the region continue to ensure access and basing in Gulf states. This is vital to support Operation Herrick. The Royal Navy is at the forefront of mine countermeasure capabilities in experience, expertise and technology. The US/UK/French patrols in the Persian Gulf and the Strait of Hormuz are a routine part of our commitment to the free movement of international shipping in the region. In recent years our ships have played a significant role as part of the combined maritime forces of the Bahrain-based coalition naval force drawn from 25 nations, with missions including counterpiracy, counterterrorism and the maintenance of security in and around the Gulf. These are all highly valued by our allies, including the United States.

[Lord Rosser]

My Lords, an MoD survey of which the Minister will be well aware has shown that nearly two-thirds of officers in the Army, the Navy and the RAF now rate their own morale as low. That is twice the level it was in 2010. What plans do the Government have for improving the morale of our Armed Forces?

[Lord Astor of Hever]

My Lords, I do not share the noble Lord’s pessimistic view of the morale of the senior Armed Forces but, as I said, we are constantly reviewing morale, allowances and everything else that leads to morale in the Armed Forces.

[Lord Geddes]

My Lords, I was fervently hoping that some other noble Lord would ask this question—but, in my appalling ignorance, what is Operation Kipion?

[Lord Astor of Hever]

My Lords, Operation Kipion replaced Operations Telic and Calash. It covers operations in the Arabian Gulf, the Strait of Hormuz, the Gulf of Aden, off the coast of Somalia and in Iraq. The latter is a defence section at the embassy, where we have a number of service personnel.

[Lord Reid of Cardowan]

I thank the Minister for his willingness to have his officials investigate the alleged anomalies. When he does so, I am sure he will bear in mind that although, of course, in a time of austerity, all the sacrifices and cutbacks must be shared, the Armed Forces are unique because very few of those who have a contract with the country or the Government have a contract stating that their service will be accomplished even until death. Will he bear that in mind when he looks at some of these matters affecting morale in the Armed Forces?

[Lord Astor of Hever]

The noble Lord makes a very good point. I have looked very carefully at all the rates that the noble Baroness brought to my attention, and I think there is an issue. The amounts are very small, but it is very important to sailors, soldiers and airmen who are out there, and it is very important that we look at it again.