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Mr. Brazier: Following the point made by my hon. Friend the Member for Newark (Patrick Mercer), will the Secretary of State recognise that while almost every major civilian organisation is trying to decentralise its personnel strategy—a horses for courses approach—the Ministry of Defence is pursuing a one-size-fits-all approach, which is bringing personnel policy in all three services ever more closely together, as criticised by the Select Committee on Defence in the last Parliament, and is making his problem harder?

Mr. Hoon: I shall go on to talk about personnel policy, but I do not accept the hon. Gentleman's description of it. A central part of that policy is to emphasise the diversity of the three services and to respect their considerable different traditions. If the hon. Gentleman thinks about it for a moment, he will realise that the

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implication of the point made by the hon. Member for Newark (Patrick Mercer) was that we must look across the board at how we allocate people to different parts of the armed forces.

Mr. Paul Keetch (Hereford): Will the Secretary of State tell the House a little about recruitment from overseas? As he knows, the British Army has had an excellent record of recruiting people from overseas, particularly from Commonwealth countries. Will he comment in particular on moves in New Zealand to recruit former members of the Royal New Zealand Air Force?

Mr. Hoon: That continues to be the case, and recruitment from Commonwealth countries continues to be strong and to provide us with not only valuable sorts of recruits but excellent links and contacts with Commonwealth countries. Efforts have been made to recruit New Zealand pilots although it will not greatly surprise the hon. Gentleman to know that their services are in great demand, not only from other air forces around the world but from civilian airlines.

Mr. Desmond Swayne (New Forest, West): In a parliamentary answer at the end of last year, the Minister of State informed me that the intention was to move the Regular Commissions Board to Sandhurst to be co-located with the Royal Military Academy. I now understand that the money for that is not available and that the Regular Commissions Board will stay in Westbury. However, the Territorial Commissioning Board, which is currently co-located with the Regular Commissions Board, will be removed to Chilwell. Will the Secretary of State confirm that? What is the rationale for dislocating the Territorial Commissioning Board from the Regular Commissions Board and moving it to Chilwell?

Mr. Hoon: Chilwell is a fine place, which is close to my constituency—[Laughter.] It is not that close. I will have to ensure that the premises of the hon. Gentleman's question are accurate before I respond to his conclusions. However, I shall write to him on that in due course.

I have set out the background of recruitment. I want to emphasise that recruitment levels have not fallen recently but have remained remarkably resilient. In the first 10 months of 2001–02, the total intake for the armed forces reached 81 per cent. of the year's recruitment target. Over that period, intake levels across all three services were up on the same period in the previous year. That indicates that the armed forces are on course at least to match if not exceed the previous year's achievement. That is excellent news.

Bob Russell: Will the Secretary of State put some flesh on those bones and give the House some figures on the shortfall and the percentages involved? It is all very well saying that the Government are trying to achieve targets, but I got the impression from a written answer that I received that a sizeable shortfall still exists.

Mr. Hoon: I do not want the hon. Gentleman to be hypnotised by a particular figure for the shortfall. We have made no secret of the fact that the shortfall is of the order of 9,000–10,000 overall, but we have always maintained that the important figures are the ones that show how many people are joining the services, and how

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many are not staying in as long as we would prefer. A marginal improvement in retention rates would solve the whole problem.

I deal now with the changes that have occurred in society. In 10 years, 15 per cent. of the youngest age group from which we draw our recruits will come from ethnic minorities. That only serves to remind us that the armed forces must reflect the society that they serve. We remain committed to recruiting from all sectors of the community, regardless of ethnicity, gender, religion, or sexual orientation.

The annual recruitment rate from the British ethnic minority communities continues to improve. In the three years from April 1998 to April 2001, the percentage of recruits from the ethnic minorities more than doubled. The signs for 2001–02 suggest that this upward trend has continued. The position for female recruitment is similarly positive. In the 12 months to 1 February 2002, 2,658 females entered the armed forces—11.3 per cent. of the total intake.

As I have made clear, however, recruiting is only half of the challenge that we face in reaching the manning balance. Retention is also a matter of the highest priority, not least because it is the key to solving the problems of undermanning. We are trying to get this right, and I want to touch on three areas of work that are under way.

The first is pay. I should like to take this opportunity to thank the members of the Armed Forces Pay Review Body for the clear and wide-ranging report that they have produced this year. I am pleased that we were again able to implement the review body's recommendations in full and on time, for the fourth year in succession.

We expect a lot from our service men and women. Fair remuneration is an essential ingredient in maintaining their morale and persuading them to remain in the armed forces. It is reassuring, therefore, that the Armed Forces Pay Review Body welcomed the new pay structure that was introduced last year, and that it was able to report the success of the significant task of transferring personnel to the new pay ranges.

I attach great importance to the work that the Armed Forces Pay Review Body does on behalf of our service men and women. In particular, I welcome its independent status. This gives the review body's views added weight, both inside and outside the Ministry of Defence, and—most important—with service personnel themselves.

Secondly, we recognise the fact that frequent overseas deployments pose significant challenges to our people and their families. Young men and women who are attracted to joining the armed forces by the prospect of adventure and travel often find that less appealing as they grow older, settle down and take on family responsibilities.

We are therefore working hard to try to reduce the stresses and difficulties associated with service life. For example, the service families taskforce was set up in 1999 to act as a central focus for family issues and to liaise with other Government Departments on issues outside the Ministry of Defence's immediate control. Recent advances on issues involving health and education and on clarification on eligibility for allowances, particularly for those serving overseas, have been very well received. Useful progress is being made elsewhere. For the first time, for example, the code of practice on schools admissions now makes specific reference to service children.

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We recognise that the number of operations to which UK service personnel are committed has increased significantly in recent years—an inevitable consequence of the challenges and instabilities that we have faced since the end of the cold war. To ensure that we provide the best possible support to service men and women deployed on operations, and to their families back home, we commissioned a review of operational welfare.

That review was completed in December 1999. It took into account the views of hundreds of service personnel across a wide range of operational theatres, and also drew on lessons learned by our allies. The result was the development of a single, comprehensive operational welfare package.

Experience to date indicates that the operational welfare package has been extremely well received, most recently in Afghanistan, where the harsh conditions have been relieved, in part, by the provision of 20 minutes of weekly telephone call time and of electronic "blueys". Both of these help service personnel to stay in touch with their families. British service personnel have also had access to three UK radio and television channels.

Thirdly, we are addressing those areas where we face particular problems in retaining service men and women. A key example is aircrew, where a recent comprehensive review confirmed that we face serious shortages, notably in the Royal Navy and the Royal Air Force.

These shortages are largely the result of the pull from the civilian airlines, dissatisfaction with the management of aircrew and their careers, quality of life issues and the effect of early pensions and gratuities. The services are now urgently addressing these issues. We have also introduced targeted financial retention initiatives aimed at service aircrew. The Armed Forces Pay Review Body recommended that sums of between £30,000 and £50,000 should be paid to retain our most experienced and valued aircrew. Next year, we will introduce new pay arrangements for all professional aviators.

The remuneration and non-remuneration levers that are now being applied are integral parts of a coherent package that is expected to improve aircrew manning levels, although we anticipate that shortfalls will inevitably continue for several years. It is too early to assess the success of these measures, but initial indications are encouraging.

It is also worth noting that the Armed Forces Pay Review Body was impressed by the rigour and comprehensiveness of the aircrew review, and found the remuneration proposals to be a forward-looking and well-targeted approach to addressing the problems that we face.

We will build on the aircrew review and use the same methodology to address manning shortfalls in other areas. A medical manning and retention review and a submariner review are already both

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