Armed Forces: Local Overseas Allowance

Baroness Warwick of Undercliffe Excerpts

Thursday 25th October 2012 Lords Chamber

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.