Armed forces exempt from progression pay reforms

Budget 2013: Armed forces employees are to be exempt from the government’s civil service progression pay reforms, due to the unique nature of their careers.

As part of his 2013 Budget speech on 20 March, which marks the tenth anniversary of the Iraq war, Chancellor George Osborne said: “We are also accepting in full, from 1 May this year, the Armed Forces Pay Review Body’s recommended increases in the so-called X Factor payment [a discretionary pay award] made to military personnel to recognise the particular sacrifices they make.

“Further awards from the [London Interbank Offered Rate] Libor banking fines have gone to good military causes, with money for combat stress to help veterans with mental health issues, and funds for Christmas boxes for all our troops on operations, this year and next.”

A number of banks have been fined following a number of investigations into the fixing of Libor, the rate at which London banks lend to each other.

Osborne added: “Those who have paid fines in our financial sector because they demonstrated the very worst of values are paying to support those in our armed forces who demonstrate the very best of British values.”

The Chancellor pledged to make significant savings through reforms to public sector progression pay, adding that some public sector employees have continued to receive annual pay increases of in excess of 7% due to progression pay arrangements, despite pay constraints.

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Public sector pay rises have been subject to a 1% cap since the Chancellor’s 2011 Autumn Statement. This cap has now been extended by a year to 2015/16.