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Then there is the issue of pensions. The Government plan to link public sector pension increases to the consumer prices index, rather than the retail prices index. This will result in lower pension increases than people had previously anticipated and expected and will disproportionately affect members of the Armed Forces and their dependants who rely on their pensions at earlier ages than almost anyone else. The reduction over the years in the anticipated and expected level of pension payment to some individuals, including seriously injured service personnel and Afghanistan war widows, will run into hundreds of thousands of pounds as their anticipated pensions are reduced for the rest of their working lives. When challenged on this last November, a Ministry of Defence spokesman said:

"It is not possible to treat the armed forces differently from other public servants".

Can the Minister say whether that statement represents his view and that of his defence ministerial colleagues? Is such a statement consistent with the intention and meaning of the military covenant?

At the time your Lordships' House debated the strategic defence and security review, there were reservations, in some cases strong reservations, about some of the decisions that were part of that review. The Minister prayed in aid the Government's analysis

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of the financial situation, and will perhaps do so again today. No doubt, that is the Government's justification for their approach to Armed Forces pay, which is hardly designed to improve morale. For a military covenant to have credibility among and within the Armed Forces, it is imperative that the Armed Forces are provided with the resources to undertake the commitments, clearly defined and with clear objectives, that they are expected to carry out and meet, and are not expected to undertake commitments which cannot be, for whatever reason, properly resourced. That relates not just to equipment and manpower, but to the welfare of service personnel and their families, given that that also helps to maintain morale and ensure operational effectiveness.

I do not doubt for one moment the personal commitment of the Minister to the military covenant or his own determination and, I am sure the determination of his defence ministerial colleagues, to try to ensure that the commitments our Armed Forces are expected to undertake are clearly defined and continue to be backed up by the level of resources needed to show that the military covenant is a meaningful and credible covenant which reflects the admiration and esteem that the people of this country feel for our service personnel.

5.28 pm

The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever): My Lords, I, too, congratulate the right reverend Prelate the Bishop of Wakefield on securing this important debate on the military covenant. In addition to the excellent debate that we had earlier today in the name of my noble friend Lord King, we had a debate on 12 November on the SDSR. As I said then,

The SDSR was the first review in 12 years and the first specifically to incorporate a security dimension-an acknowledgement that today defence and security are indivisible.

In setting out our defence and security strategy for the coming years, our overwhelming priority was to ensure operational success in Afghanistan, not least by giving our Armed Forces, who continue to deploy so courageously, all necessary resources. In addition, we had to work within the constraints of the biggest financial crisis in a generation and to reach our conclusions without damaging essential capability, the military covenant or critical industrial capability.

We recognise the need to do more to ensure that our Armed Forces veterans and their families have the support that they need and are treated with the dignity that they deserve. Members of our Armed Forces are second to none. They willingly accept the sacrifices that they may be called on to make. They enter into a lifestyle that can, at times, prevent them from enjoying aspects of life that many of us take for granted. That sacrifice is also borne by their families.

The military covenant originally set down the mutual obligations that exist between the nation, the Army and each individual soldier in recognition of the

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extraordinary commitment and sacrifice that soldiers may be called on to make, including the ultimate sacrifice. Those soldiers and their families should expect to be treated fairly and to be valued and respected. This debt of honour enshrined in the military covenant is something that I am sure noble Lords and noble and gallant Lords would acknowledge. While we were in opposition, however, we felt that the covenant was beginning to fracture. Consequently, the Government are rewriting the covenant as a tri-service document, the Armed Forces covenant, which expresses the enduring general principles that should govern the relationship between the nation, the Government and the Armed Forces community.

The Armed Forces covenant will provide a framework for government policy that aims to improve the support available for serving and former members of the Armed Forces and the families who carry so much of the burden, especially in the event of injury or death. The Armed Forces Bill currently going through the other place contains a clause requiring the Secretary of State for Defence to present an Armed Forces covenant report to Parliament every year. That requirement for an annual report will be enshrined in law and the report will play a crucial part in holding the Government to account to ensure that they are honouring the covenant.

One of the first things that the coalition Government did was to set out a number of concrete measures to rebuild the covenant. The programme for government described a number of measures that are designed to rebuild the covenant. They range from support for the education of service personnel to increasing support to veterans' mental health needs. We have already doubled the operation allowance and changed the rest and recuperation arrangements. It is right that we properly support the families of those who have sacrificed or are prepared to sacrifice so much. In December last year we announced details of a new scheme to provide further and higher education scholarships for the children of service personnel killed on active duty. The scholarship will meet the cost of tuition fees and living expenses. Nothing can make up for the loss of a parent, but we hope that the scheme can in some way demonstrate the overwhelming gratitude of the nation for the sacrifices that some of our service families have made.

We also believe that it is important to support our service leavers as they transition to civilian lives, and that we should do all we can to help to make that transition successfully. In December, for example, we announced enhancements to the scheme that enables service leavers to go to university. Investing in their education is an investment in this country's future prosperity, so we are reducing the qualifying period from six years to four and removing the qualifying period completely for personnel who are medically discharged.

In England we have announced the introduction of a pupil premium within state schools. This additional funding aims to enable schools to provide the extra support needed to mitigate the effects of frequent changes of school and the effects of separation from a serving parent deployed on operations.

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In addition to the measures within the programme for government, the Prime Minister ordered the creation of a covenant task force under Professor Strachan. Its remit was to develop a series of low-cost policy ideas to help rebuild the military covenant, focusing particularly on ways of involving charities, private companies and civil society. Professor Strachan's report was published on 8 December and we immediately accepted two of its recommendations: the community covenant, which aims to encourage support locally for the Armed Forces community; and the Chief of the Defence Staff commendation, which aims to recognise those who have shown support and assisted our Armed Forces in many different ways. We aim to launch both of these schemes in the spring. We are now consulting across Government and with other stakeholders on the report, and will issue a full government response commenting on each of the 90-plus recommendations, also in the spring.

We are committed to meeting the mental health needs of our people. Last year we accepted all the valuable recommendations in my honourable friend Dr Andrew Murrison's excellent report, Fighting Fit: A Mental Health Plan for Servicemen and Veterans. The report focuses on improving the identification of mental health problems and better outreach, assessment and information services. It sets out 13 recommendations to encourage engagement with serving and former service personnel with mental health problems. We are now working hard to bring all these improvements together in one overarching strategy.

Stability and mobility are often competing forces in service life. We believe that we can better organise our Armed Forces to provide greater stability and minimise the mobile nature of the role that is so often the root cause of many of the difficulties that our Armed Forces families are faced with. Financial pressures are making it difficult for us to do as much as we would like to improve the accommodation that we currently provide for service families, but I am pleased to say that work started in December on a project to provide 260 new high-quality sustainable homes for soldiers and their families on the Canadian estate at Bulford, near Salisbury.

I turn to questions that I received. The right reverend Prelate the Bishop of Wakefield asked about the timetable for the development of a new employment model. This is a project aimed at the long term. Work is now getting under way but it cannot be implemented immediately. The study will be conducted over the next 12 to 18 months. Timelines for implementation will be devised following the concept phase. The new employment model project will review current terms and conditions of service and make changes where appropriate, to bring the expectations of service personnel and the demands we place on them more into line. At the heart of the new employment model is a recognition that, where mobility is required for service reasons, appropriate support and compensation must be available.

I assure the right reverend Prelate that it is not our intention to phase out the external reference group. We will continue to call upon and welcome the input of the external reference group, which brings together representatives from across Whitehall, the key service

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charities, the three families federations and academia, and delivers an independent judgment on the Government's efforts in supporting the Armed Forces community. Indeed, we were able to offer reassurances to the group when it met last week.

My noble friend Lord Glenarthur asked three questions, the first of which was about ID cards. Many reservists already have a permanent ID card. I am looking into the issue and will write to my noble friend as soon as possible. I will also write to him in response to his question on medical information being passed to reservists' GPs. On support to employers, the MoD aims to build support from employers of members of the volunteer Reserve Forces through its SaBRE campaign. We run a website and a free phone support line to communicate the benefits associated with employing a reservist.

My noble friend Lord Lee asked about the return from Germany. As announced by the Prime Minister, as part of the strategic defence and security review the Government have decided to accelerate the rebasing of 20,000 military personnel in Germany with a view to returning half of them by 2015 and the remainder by 2020. Work is ongoing to look at how best we do that.

The noble Lord, Lord Ramsbotham, made a point about the Veterans Minister. We absolutely accept that we must work across government to best support veterans and I pay tribute to the work done by the previous Government to improve that. We must now take that further. The question is whether simply moving the location of the Veterans Minister would be the best way to achieve that.

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A number of noble Lords, including my noble friend Lord Lee of Trafford, the noble Lords, Lord Ramsbotham and Lord Bilimoria, the right reverend Prelate the Bishop of Hereford and the noble and gallant Lord, Lord Guthrie, mentioned allowances. I am well aware of the strong feeling on that issue and know how seriously my right honourable friend the Prime Minister takes the covenant. A strong economy is a national security imperative. The Government conducted the SDSR against the background of the dire fiscal situation, which requires difficult decisions on reducing public spending. Proper support to our service personnel is equally essential. An appropriate set of allowances is an important element of that support and will remain so in future. However, it cannot be immune from careful scrutiny to ensure that it remains appropriate. While reductions in that area will never be welcome, the package of changes that we are introducing has been developed in full consultation with the service Chiefs of Staff and represents the best balance between affordability and fairness.

I have run out of time. I will write to the noble Lords who asked me other questions. Again, I am most grateful to the right reverend Prelate for giving us the opportunity to discuss these important issues today. We are absolutely committed to ensuring that our Armed Forces have the support that they need and are duly recognised for the important role that they fulfil and the sacrifice that they make in the defence of the nation. Neither they nor the nation should expect anything less.

House adjourned at 5.42 pm.

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