House of Commons Hansard Debates for 22 Feb 1995

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The hon. Member for Sutton read out a number of press cuttings, one of which referred to a senior officer in Warwickshire. Extremists do get involved in many events and can often inflict great damage to the cause, but causes such as this do not depend solely on what happens during a protest. The strength of the arguments is what matters, and many decent and honourable people involved in the protest --whether they are Conservatives, Labour supporters or Liberal

Democrats--properly want to peacefully protest their interest in raising the issue, and that should be welcomed. They have a strong argument, and are exercising their right to protest.

This trade is, in my view, immoral. While it is not breaching the law, it breaches the spirit of the law by seeking to make a profit out of something which we accept is cruel and unjust. I very much hope that the efforts of the Government to try to ensure that we have an EC ban on veal crates, and also a licensing system not only in this country and neighbouring countries but throughout Europe will be sustained. That will effectively ensure that animals will be transported and kept in the best conditions. That is what we are looking for, and that is what we can get.

12.59 pm

Mr. Bernard Jenkin (Colchester, North): I have little time, but I wish to speak in the debate because a great many of my constituents object vehemently to this trade. As the hon. Member for Newham, North-West (Mr. Banks) said, many people who object to the trade are Tory voters. What outrages them most is learning from the television and the radio that we have given up the power to do anything about it. I do not accept that. I regard this as a sovereign House, and I am not prepared to be lectured by MAFF officials about what the House can and cannot legislate for.

I am fortunate enough, I hope, to have secured an opportunity to present a Bill under the 10-minute rule which will restore to the Minister the powers that he needs to apply a ban, if he considers that appropriate, and I urge Opposition Members to support it--

Mr. Deputy Speaker (Mr. Michael Morris): Order.

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Spectac Ltd.

1 pm

Mr. John Hutton (Barrow and Furness): I am grateful for the opportunity today to draw attention to what I believe to be a serious risk to many of our citizens--the unscrupulous way in which many foreign-based overseas recruitment companies operate in the United Kingdom.

I want to illustrate a particular instance of this abuse. In the weeks leading up to Christmas 1994, 27 people became the innocent victims of a carefully orchestrated criminal conspiracy. They each lost £8,000, money that none of them could afford to lose. The 27 came from all parts of the United Kingdom, but mostly from our shipbuilding towns and cities. Eleven of them are from my constituency, where, as the Minister will know, unemployment has rocketed over the past few years as Vickers Shipbuilding and Engineering Ltd. yard has declined.

All 11 constituents were recruited by a Dutch company, Spectac, based in Dordrecht and operated as a one-man business by Colin Martin. The workers, who were welders, platers, riggers and electricians--many of them used to work in shipbuilding--were told that they would be working on five-year fixed-term contracts in Guam, and would be paid £4,000 a month tax- free.

Before signing any of the contracts, many of my constituents took advice from their financial advisers, who told them that this was a safe bet and to proceed with the contracts. Many of them borrowed money, some remortgaged their properties.

Spectac recruited these workers from a variety of sources. The company placed advertisements in several British regional newspapers, and it certainly used the jobshop operated by a local enterprise council in Invergordon. I am grateful to the Minister for providing me with that information. Others recruited have testified that they were notified by local jobcentres, but in the main, details of the recruitment were circulated through a network of word-of-mouth contacts of the type common in the offshore construction industry. The company in Guam, Offshore Corporation, would require each worker to deposit a confidence or integrity bond worth nearly £8,000, which would be repaid monthly over the duration of the five-year contract. The downpayment of £5,000 was supposed to be a sign of good faith on the part of the workers towards Offshore Corporation. Inevitably, the confidence bond money was duly handed over to Spectac. The workers and their money were flown out to Thailand and later to the Philippines. The tickets, I believe, were paid for out of the proceeds of the integrity bonds.

After a few days in Thailand and the Philippines, the truth became apparent. There was no company called Offshore Corporation. There were no jobs in Guam, and the money--by this time totalling more than £200,000 --had disappeared, along with the villains of this whole dismal episode: Ronnie Hydes, Gerry O'Connor and Colin Martin himself.

There is some doubt about whether Colin Martin was a participant in the conspiracy. I have no opinion on that matter one way or the other, but I am alarmed by some evidence that I received today purporting to come from Spectac in Holland and claiming to provide evidence of a

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payment guarantee that it had lodged with Barclays bank in Jersey to cover any problems with the non-repayment of the integrity bond. That document, I am confident, is completely fraudulent-- and it raises doubts about Colin Martin's participation in the whole business. Unfortunately, the whereabouts of Ronny Hydes and Gerry O'Connor are not known; and the chances of recovering the stolen moneys are small. On 14 February, Spectac ceased to exist as a legal entity under Dutch law. Colin Martin is thought to be somewhere in Thailand, outside the effective reach of any legal action in the United Kingdom, and probably anywhere else.

My constituents have been devastated by these events. In short, they have been exploited and ripped off.

Ms Angela Eagle (Wallasey): I congratulate my hon. Friend on securing a debate on this important subject. Bob Neil, a constituent of mine--the shipbuilding connection is again obvious--was also one of the 27 people affected. I can confirm that exactly the same happened to him as happened to my hon. Friend's 11 constituents. He too stands to lose £8,000 under the contract exposed by the good work that my hon. Friend is doing.

Mr. Hutton: I am aware of the difficulties that my hon. Friend's constituent, Mr. Bob Neil, is experiencing. They are exactly the same as those experienced by the other 27 innocent victims of the crime. This is not the first time that Ronny Hydes and Gerry O'Connor have perpetrated this kind of fraud. They were well known conmen and cowboys. The sad fact is that they are still able to perpetrate this fraud in the United Kingdom.

I want to discuss how the Government can respond to what I believe is an acute problem. We are dealing not just with work outside the European Union. There is also well documented evidence of abuse on construction sites in Germany, where many skilled British workers have found themselves ripped off--their wages have not been paid, and so on. Mr. Bob Neil's case is a stark reminder of just how vulnerable many of our fellow citizens are. They never expected to be out of work, but they possess valuable skills, and they find themselves facing the dismal prospect of years out of work in this country. Naturally, they tend to look overseas for employment opportunities. I do not believe it fair to say that the 27 people involved were gullible: they were innocent victims of a crime. These events highlight deficiencies and loopholes in what is left of our regulatory framework after deregulation. They also highlight a number of gaps and loopholes in the law. Unless we deal with those problems, it is likely that they will be repeated again and again in the years ahead.

We know that cowboys operate in the overseas recruitment business, often through front companies that act as agents for undisclosed principals. We need seriously to tackle and confront such problems. Probably no regulatory system can be foolproof, but we can do a number of things to make it harder for the cowboys to operate. First, the Government should look at the arrangements for checking the bona fides of foreign-based recruitment companies that operate in the United Kingdom. A recruitment company that has no operational base in the United Kingdom falls outside the scope of the Employment Agencies Act 1973, so it is not

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possible under UK domestic legislation for enforcement action to be taken against a foreign-based recruitment agency.

Effective action will require co-operation between European Union member states if we are to deal with the problem satisfactorily. I hope that there will be a chance, under the French presidency, of another look at the posted workers directive to see whether there is any prospect of breathing life into that initiative. I recognise that, if it has life left in it, it might benefit only workers who work in the EU. Of course, the case that I am highlighting goes outside the EU, and would not be covered by the posted workers directive. Secondly, the Department of Employment should ensure that all Government agencies are properly advised about consulting the overseas placing unit when handling overseas job places. That is especially necessary when job places are being advertised by a recruitment company. I understand that that did not happen in the case of the Invergordon job shop, which is run by the local enterprise company and is part of the Highlands and Islands enterprise agency.

If an overseas recruitment company were able to operate in this country through agencies established by central Government without any effective procedures for ensuring that proper information was disclosed between the agencies, there would be a serious abrogation of responsibility. I am prepared to accept that this case may be an example of a one-off, a mistake, but there were guidelines. It seems that they were not followed in this instance. I hope that it is a one-off. If it is not, the Minister should seriously consider what has happened. It is one of the ways in which we should have regard to how recruitment agencies are operating.

We must, of course, operate within a framework of European law in partnership with European Union member states, but there is a case for the Government examining the operation of the Employment Agencies Act 1973 and tightening some of their administrative arrangements for disseminating information and best practice in advising local job shops, job clubs and jobcentres about overseas recruitment and vacancies.

Thirdly, measures need to be taken to deal with integrity bonds. It is this aspect of the Spectac case that concerns me most. The Government should consider making it unlawful for companies to require the payment of such bonds in the United Kingdom. At the least, there should be more effective control over how the moneys are to be handled.

If it is considered inappropriate to make the payment of integrity bonds unlawful, there is a case for saying, for example, that any payments should be held on account by trustees and not, as in the Spectac case, paid directly by the 27 workers recruited by Spectac to the recruitment agency. When that happens, there is little or no effective control over the moneys, including where they eventually end up. In the Spectac case, we still do not know where the moneys ended up.

The Government should consider amending the guidelines issued by the overseas placing unit to overseas jobseekers. In particular, the guidance should be amended to warn against paying into integrity or confidence bonds. There is nothing in the guidelines issued by the overseas placing unit that refers directly or indirectly to the

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problems associated with integrity bonds. There is a warning about working overseas and not being covered by United Kingdom employment protection legislation, but that misses the point. Most people working in the far east, for example, would assume that that legislation does not extend to Guam and Thailand.

The problem lies more with some of the sharp practices that are increasingly finding their way into the recruitment agency business. Integrity bonds are inherently dangerous and dodgy. The Government should carefully consider the guidance they have already issued to overseas job seekers, with a view to spelling out the problems associated with the payment of integrity bonds.

It may be appropriate, in the light or wake of the Spectac case, for the Department of Employment to consider advising the editors of British regional and national newspapers against handling any advertisement from foreign or domestic recruitment agencies that require payment of integrity bonds. That would involve the Government in recommending editors and newspapers generally to engage in an easy and standard form of inquiry.

Our newspapers provide the main forum for the cowboys' operations. The Government should require an investigation to determine whether any vacancy being handled or placed through any agency requires the payment of an integrity bond. If the Government are not convinced of the need to make such payments unlawful, they should introduce a requirement that advertisements should warn the public of the dangers or hazards associated with paying integrity or confidence bonds. We must bring the perpetrators of these crimes to justice. I know that the Minister is extremely competent, but I do not believe that her jurisdiction extends into the Foreign and Commonwealth Office. I hope, however, that the Government will be in contact with the Dutch and Thai authorities to ensure that Hydes, O'Connor and Martin are all held to account for their actions.

It is clear that no criminal offence took place within the jurisdiction of the United Kingdom courts, but there may have been violations of the Dutch criminal code. I hope that the Government will raise the extradition of Hydes, O'Connor and Martin with the Dutch Government. British citizens have been the victims of an appalling fraud. That being so, I hope that the Government will do all they can to ensure that justice is seen to be done in this case.

1.14 pm

The Minister of State, Department of Employment (Miss Ann Widdecombe): I congratulate the hon. Member for Barrow and Furness (Mr. Hutton) on obtaining the debate and on raising an important matter. He will have increased public awareness of the problem, and I congratulate him on that, too. I congratulate him also on having his debate at such a "seasonal" hour. I hope that afterwards I do not go on autopilot and go home forgetting that there is the rest of the parliamentary day.

First, I shall respond to some of the hon. Gentleman's specific points about what the Government might seek to do to counter what is, fortunately, a rare but serious type of fraud.

We shall strengthen the guidance that we give to warn job seekers about the dangers of integrity bonds. I take the opportunity to reinforce the advice that we already give job seekers, which is that, if they find in a magazine

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or newspaper an advertisement of employment abroad, they should take it up and have it checked through their jobcentre with our overseas placing unit, about which I wish to say more in a moment. That is a sensible measure, which will greatly increase the protection offered to job seekers.

European legislation will not help in dealing with the tiny minority of fraudsters who come within the terms of the debate. The Department has, however, taken up with the Dutch Minister with employment responsibilities the matter of illegal agencies that are based in the Netherlands. Officials will be taking discussions forward.

We have already taken steps to warn job seekers about bogus agencies, through a poster and leaflet campaign. In the light of the debate and in the light of the Spectac incident, I shall examine the need to refresh the campaign.

I do not entirely share the hon. Gentleman's view that we should be making representations to newspapers. Newspapers are already well aware that it is not in their interests to carry advertisements that place their readers at risk. On the other hand, I am sure that the hon. Gentleman will acknowledge that bogus agencies do not make their purposes entirely clear in newspaper advertisements. I think that he will accept that it is quite difficult for newspapers to come to judgments. Often, however, they contact the Department for advice when they think that there is an element of doubt. There is already some contact between newspapers and the Department.

Ms Eagle: Is there a list of companies that are known to have been fraudulent in the past that the Department of Employment could refer to or begin to keep, if it does not do so already? At least those companies would have to keep changing their names and taking on new forms if they were intent on trying to perpetrate the same fraud over and over again.

Miss Widdecombe: When I come to discuss the overseas placing unit, I shall explain that one of the purposes is to check on the bona fides of job vacancies that are advertised from abroad. Given its experience, the unit would obviously have knowledge of companies where there was established fault or doubt. That is not information that would be held centrally in every jobcentre. We have the unit as a point of referral, so that we can try to keep a level of expertise.

I turn to the specific case that the hon. Member for Barrow and Furness has raised.

I wrote to him on 12 February and set out the steps that the Employment Service had taken to establish how the vacancies had been drawn to the attention of job seekers. I confirmed that it was not, in fact, through the Employment Service, and I also told him the checks that the Employment Service makes on vacancies that come to it from employers in other countries.

Of course we deplore completely the activities of bogus employers who trade in entirely fictitious jobs overseas with the sole intention of defrauding job seekers. It is a practice that is known to us, but it is, as I said earlier, thankfully, still rare. Where and when we can, we are taking steps to ensure that it happens even less often. I would advise anybody considering paying an integrity bond to take legal advice before doing so. They may well end up having to pay a solicitor, only to find that they are advised not to take the job, but that is infinitely better than losing thousands of pounds on an integrity bond.

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This very unfortunate incident must be seen in context so that we can tackle it appropriately. About 5.7 million people change jobs each year. Many do so through informal channels, such as friends, colleagues or newspaper advertisements. The Employment Service and the private sector recruitment agencies have a valuable part to play, both in helping people to find work and in stimulating a flexible labour market.

The Employment Service is charged by the Government, of course, with offering unemployed people--especially the long-term unemployed and others at a disadvantage in the labour market--help and advice in finding work. In the last full year, 1.64 million people were placed into work and 2.27 million vacancies were handled, so that puts this problem into context.

From those volumes of business, therefore, we must bear in mind the infrequency of the type of incident that we are debating. Although we need remedies--and we do--we must keep them in proportion to the problem; otherwise, we would run the risk of prejudicing a wide range of good practices for all parties in the labour market, and thus reduce our ability to service legitimate vacancies from employers, including employers overseas, which can bring real benefit to skilled individuals from Britain. In that context, the posted workers directive, even if fully implemented, would have had nil impact on this case.

The Employment Service will therefore continue to deal with vacancies overseas, as do UK-based private employment agencies. Sadly, we cannot take direct action on foreign-based employment agencies, but I will come back to what the employment agencies, the Employment Service and its overseas placing unit can do, and in most cases what they are already carrying out, to minimise the risks of sharp practice.

The case that the hon. Gentleman has rightly drawn to the attention of the House is highly serious. The company that he has described--Spectac--is reported to have responded to an advertisement placed in a Dutch newspaper calling for the submission of tenders for the supply of labour to work on a barge on the north Pacific ocean island of Guam. The company that placed the advertisement, variously described as the "Offshore Corporation of Chicago" or the "Offshore Corporation of Bangkok", is bogus. Spectac, a Dutch-based company, run by a director of British origin but resident in the Netherlands, had agreed to obtain an integrity bond of US$12,000 from applicants as a condition of securing the contract for the supply of labour. Men were then recruited from various parts of Great Britain towards the end of 1994. Some were indeed unemployed; others gave up full-time jobs to take up the vacancies. As the hon. Gentleman rightly said, many of them ill-advisedly raised the money for the bond through taking out loans.

The men went to the far east in early December, only to become stranded in Manila, where it became clear to them that the jobs did not exist. The director of Spectac returned from Manila to Bangkok, with one of the men from the final group to leave Britain, and there they reported to the police the activities of the Offshore Corporation. One of the directors was then held by the Thai police for a few days, but, allegedly, was released by them after promising to find his partner. He and his partner have since disappeared. Spectac has now been investigated by the Dutch authorities and closed down.

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It is known that the unfortunate victims of the fraud came from different parts of Britain. There is, however, evidence that areas of the country where men have recently been made redundant were specifically targeted by Spectac. That may well explain why men in the hon. Gentleman's constituency were particularly affected. Many of his constituents are skilled shipbuilding workers, who supposedly would have been able to find the money for the integrity bond from redundancy payments.

There is also evidence that the highlands region of Scotland was targeted by Spectac, probably because it, too, has a large number of ex-employees from the oil fabrication industry, who have skills and a source of capital. But after exhaustive inquiries throughout the Employment Service, concentrating particularly on the highlands region, there is no evidence that jobcentres were involved in what is a profoundly regrettable incident. I believe that the hon. Gentleman might have been led to suspect that my Department was involved, because many people learned of the bogus vacancies through the Invergordon job shop.

The Invergordon job shop is run by three local enterprise companies reporting to Highlands and Islands Enterprise. Two years ago, Highlands and Islands Enterprise recognised that the oil fabrication industry, on which the economy of the area around the Moray firth had depended heavily for two decades, was facing significant decline. Along with the increased efforts to ensure the survival of the existing businesses, and the provision of advisory services, Highlands and Islands Enterprise, in conjunction with the three local enterprise companies, set up a redundancy counselling and placement service, known as the job shop. The job shop has, to date, been successful in placing some 1,100 redundant oil fabrication workers. I understand that, on 3 November, the Invergordon job shop was contacted by the director of Spectac Ltd. in the Netherlands, notifying the management there of an impending contract in Thailand between his company and the so- called Offshore Corporation of Chicago, with the potential of up to 500 jobs. Seven days later, Spectac again contacted the job shop to say that its director was in Thailand, preparing to sign the contract, and gave details of the staff required.

In total, 54 people on the job shop's books were contacted to find out whether they would be interested in the contract. But it was stressed to them at that stage that nothing was known about the job or the company, and that the approach at that point was entirely tentative, to ascertain--

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Mr. Hutton: Did the Invergordon job shop, at any time prior to contacting those 54 individuals, discuss Spectac and the contract with the overseas placing unit?

Miss Widdecombe: I shall come to that point, and will also point out that, when doubts were raised in the job shop's mind, it went to great lengths to contact all those who were on its books and who had originally expressed interest, to point out to them that they absolutely should not enter into a contract with Spectac, because the company's bond was illegal. Job shop staff contacted all 54 individuals. They even contacted 20 or so other people from the Easter Ross area, who had come to them unsolicited. It then gave them the same advice.

In the short time left, I want to say something about the overseas placing unit, and so shall leave my rather fuller description of what went on. I hope that I have shown from that rather brief description that the job shop in Invergordon took every last possible step to inform people that there was a severe risk in paying over an integrity bond. Indeed, it did more than that, and advised them not to do it.

The overseas placing unit, which is based at the Employment Service head office in Sheffield, provides guidance to our jobcentres on giving advice to job seekers about work abroad. It supplies guidance to job seekers directly and to employers both in the UK and abroad on placing vacancies.

It is supported in Employment Service English regions, Scotland and Wales by a network of experts known as Euro-advisers. They are connected by information technology to a central clearing point in Brussels and to other Euroadvisers in the European Union, so that they can exchange details of vacancies and information on living and working conditions. On average, the unit receives 3,000 inquiries a month on all questions about working overseas, not only in Europe but many other parts of the world.

In 1994, 950 people were placed by the Employment Service in jobs overseas, but as we can see from the subject of the debate, there can be special difficulties with such vacancies. Because they are overseas, it makes it difficult for my officials in jobcentres. For that reason--I cannot stress this too strongly--jobcentres may not act on overseas vacancies until the vacancies have been vetted by the overseas placing unit.

The overseas placing unit runs several checks on the contract of employment and job description. It seeks a letter from a lawyer, written in English, stating that the company is bona fide and clarification on the availability of work permits. If the prospective employer cannot meet any of those stipulations, the vacancy is refused, and may not be handled by our jobcentres.

Mr. Deputy Speaker (Mr. Michael Morris): Order.

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Senior Officers (Employment Conditions)

1.30 pm

Mr. Geoffrey Clifton-Brown (Cirencester and Tewkesbury): Thank you, Mr. Deputy Speaker, for granting me the debate. I also thank my hon. Friend the Minister of State for the Armed Forces for being here this afternoon to respond to it.

Some colleagues and others listening to the debate will have believed that I applied for the debate to highlight the circumstances surrounding the case of my constituent, Air Chief Marshall Sir Andrew--otherwise known as Sandy--Wilson, KCB. Sir Sandy had an excellent record of service in the Royal Air Force for more than 30 years. He began as a formidable fighter pilot and subsequently assumed the initial command of our forces during Operation Granby and was promoted to the post of Commander-in-Chief of RAF Germany from 1991 to 1993. He is now Commander-in-Chief of RAF personnel at RAF Innsworth, a four-star appointment, and he is the third most senior officer in the RAF.

Given that exemplary record of public service, many were surprised to read of Sir Sandy's early retirement. I should make it clear for the record that it was his decision to seek early retirement and, on balance, bearing in mind all the circumstances, I believe that he made the correct decision. I hope that it will now be possible for him to retire with all the dignity and honour that he deserves and that his retirement, terminal grant and redundancy terms will be generous and befitting of an officer of his stature, and as recommended in paragraphs 63, 64 and 65 of the latest report of the Senior Salaries Review Body.

Before I move on to the substantive part of my speech, I want to highlight the case of Private Clegg. It is vital that the Ministry of Defence considers the yellow card instructions so that our soldiers carrying out their duty can know that they have the full protection of the law.

Mr. Deputy Speaker (Mr. Michael Morris): Order. I am not aware that a private is a senior officer in the armed forces.

Mr. Clifton-Brown: Thank you, Mr. Deputy Speaker. May I just say that there is a welter of public indignation at the way--

Mr. Deputy Speaker: Order. The hon. Gentleman may chose to say all sorts of things in different debates, but this morning he must confine himself to senior officers only.

Mr. Clifton-Brown: Thank you, Mr. Deputy Speaker.

We should have no doubts at the outset of the origins of overstretch. The armed services will number 236,000 in April 1995--a reduction of 22 per cent. since April 1990--but in general terms there is every hope that the pressure placed upon service men post-"Options for Change" will ease. I fervently hope that the Northern Ireland peace process holds so that it will be possible to reduce the number of roulement units in Northern Ireland, perhaps reversing the increase from four to six which took place in 1992.

There are other reasons for confidence that the conditions of stretch in our armed forces will be reduced, such as the creation of a Territorial Army unit for the Falklands, which will reduce the pressure for roulement

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units to cover those islands. However, it is likely that commitments elsewhere, such as in Bosnia, will always remain. I welcome the fact that the Government have accepted in full the recommendations of the independent Review Body on Armed Forces Pay. The average pay rise will be 2.6 per cent., taking a corporal to a possible maximum of £18,527.

Furthermore, it is right that we continue to reward the most senior officers for the significant and increasing managerial

responsibilities that they are now asked to undertake. We must pay realistic rates if we are to retain those with the skills and the ability to carry out senior officers' responsibilities. At £57,766 for a brigadier and £97,430 for a general, I have no doubt that, in comparison with the private sector, the taxpayer is receiving value for money.

The report of the Senior Salaries Review Body, published this month, offers some interesting comparisons between top officials. It recommends that a permanent secretary should be paid between £90,000 and £150,000, with an average of £120,000, a top judge should be paid £121,000 and the Chief of the Defence Staff should be paid £121,130. Those figures are all comparable.

I shall say a few words about the review of pay and conditions of service men being undertaken by Michael Bett, which is due to report to Ministers shortly and will cover the period up to 2010. The signs are that the Bett review is moving in the right direction and the Ministry of Defence has said that its findings will be published and subject to consultation. I welcome that.

However, we should recognise that there are differences between civilian and service life. Disruption through frequent postings is the recognised norm in all three services. Stability for those with young families should be considered and, where practical, longer postings should be the norm. There is also scope for better targeting of travel and other allowances for those who need them most. The children of Army and RAF officers facing frequent overseas postings in mid-career deserve a stable education. Boarding school allowances have an important role to play in that. We must also recognise the pressures that come from overseas postings and transient lifestyles on service men's wives who are unable to establish permanent homes, second incomes, or stable networks of friends.

Fair redundancy terms for senior officers also need to be considered in the context of the Bett review. According to recent media stories, eight major- generals, 32 brigadiers and 48 colonels will be asked to retire early under the "Front Line First" study. The details of the settlement by which a major-general will receive a total first-year pay-off of £210,000 seem fair in the circumstances. That figure is made up of 18 months salary worth £90,000, a further severance payment of £90,000 and a first year's pension of £30,000. Paragraph 64 of the report of the latest Senior Salaries Review Body states:

"We recommend that three-star officers and above who are retired early as a result of current and future restructuring should receive compensation on terms no worse proportionately than apply to junior officers in their service."

Given the age and current earnings of senior officers, such sentiments are only fair.

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It is vital that we continue to attract the high-calibre officers on whom the future of our services rest. Ministry of Defence figures from the statistical bulletin in June show that while recruitment was above target for the Navy and on par for the Air Force, in the Army there was a 20 per cent. shortfall between target and actual officer recruitment--784 compared with 967. In comparison, the shortfall for 1990 was only 4 per cent., based on a much higher level of recruitment. A single year does not make a trend, but those figures should be noted with concern.

The public perception of the status of senior officers, including their remuneration, promotion and retirement conditions, will affect the recruitment prospects of officers at junior level. We should in no way compromise the level of talent in officers and other ranks whom we are prepared to recruit.

Again, the 17th report of the Review Body on Senior Salaries states:

"The quality of the senior officer structure depends on the ability of the services to recruit and then retain sufficient young men and women of the highest calibre to rise to two-star rank and above."

The most important part comes next. It states:

"In our last report we expressed concern that the reduction in career prospects could impair the recruitment and retention of junior officers. We remain highly concerned that the highly publicised reductions in armed forces strength may deter many high-quality individuals from pursuing a military career."

In this short debate, it has not been possible to cover all aspects of employment conditions of senior service men but I hope that I have highlighted a few concerns so that people of the highest calibre will continue to be recruited and to make their complete career in our armed forces. The public have a right to be proud that our armed forces are the most professional in the world. The Gulf, the Falklands and the Northern Ireland campaign truly demonstrated that, and I hope that it will always be so.

1.39 pm

The Minister of State for the Armed Forces (Mr. Nicholas Soames): I congratulate my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) on securing this debate on such an important and timely topic. Some of the points that he raised went a little wider than the subject of the debate, but I would like to reassure him that a number of those points will be raised, and I shall deal with them at some length, during the Army debate tomorrow which, knowing his interest and support for the armed forces, I very much hope he will try to attend.

I entirely agree with my hon. Friend about the great

responsibilities placed on our service men and women at all levels, and the crucial importance of our continuing ability to recruit and retain people of the first quality. That is one of the most important challenges that face the armed services for the future. It is precisely with that objective in mind that my right hon. and learned Friend The Secretary of State commissioned the independent review of service career and manpower structures and terms and conditions of service that is being conducted for the Ministry of Defence by Mr. Michael Bett and his team. I hope that my hon. Friend will be reassured to hear that Mr. Bett and his team have gone to enormous lengths to produce what I am sure will be a worthwhile and interesting report.

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My right hon. and learned Friend the Secretary of State expects to receive Mr. Bett's report at the end of March. The review is very wide-ranging, as my hon. Friend knows. It covers pay and allowances structures, pensions, rank and career structures, housing and accommodation policy and terms and conditions of service, all of which, as my hon. Friend rightly knows, are extremely important to service men and women.

The review's purpose is to ensure that, as we approach the early years of the 21st century, arrangements are in place that are sufficiently robust and flexible and meet our needs in terms of our ability to attract and retain people of the highest quality to perform the very demanding tasks that we ask of people at all levels. In particular, the review was needed against the background of change in the deployment of the armed forces and the very profound changes--not all of them for the better--in our national life. Mr. Bett and his team will thus be taking the most careful account, among other things, of changes in the nature of the tasks which our service men and women are expected to perform, in the skills that they need and in the work force from which they are recruited.

At the same time, the review will certainly take the fullest account of the particular requirements and ethos of service life. That is an extremely important matter for the armed forces and one for which we shall have a very high regard and care. I agree with my hon. Friend about the importance of that point and I want to assure him that it is especially reflected in Mr. Bett's terms of reference. It is a matter that we shall consider very carefully indeed. As for recent and current recruitment trends, lower targets resulting from the "Options for Change" rundown have meant that we have had few problems in attracting sufficient numbers of suitably qualified and well-motivated young people to a career in the services, even though applications for both officers and other ranks are down on previous years. My hon. Friend will be pleased to hear, however, that premature voluntary release remains at very low levels, although there is some evidence of increased competition from the civilian job market as the economy improves.

As recruiting targets rise in the coming years, it may be more difficult to attract young people in the eligible age groups. That, as my hon. Friend will understand, would be a very serious matter for the forces. We are therefore spending great time and effort to see how we can better manage those issues. As my hon. Friend knows, studies about recruiting have been under way for some time and some have gone very well indeed.

My hon. Friend referred to allowances, on which we are expecting Mr. Bett to make recommendations. My hon. Friend has identified issues such as the degree of stability or otherwise in service life, which will obviously be a very important background to the review team's thinking because they influence the costs incurred by service men and women and their families as a result of the requirements of service life.

My hon. Friend might like to know that, last week, I met an outstanding brigadier who has served for 30 years in the Army, during which time he has had 28 jobs in 14 countries involving 17 home moves. He remains triumphantly happily married with two very beautiful daughters, but it is an appropriate moment to pay the warmest possible tribute to the wives of our service men who put up with a great deal and do not derive great confidence from the fatuous sniping by the Opposition.

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