Pay deal 'breaks Military Covenant'

Air Chief Marshal Lord Stirrup, a former Chief of the Defence Staff, said ministers must allow the Armed Forces Pay Review Body, which advises on salaries, to set annual rises. “The lowest-paid members of the Armed Forces aren’t paid a great salary. With inflation at the level it is, they will feel the impact particularly strongly,” he said.

“The most important thing for personnel and their pay is to maintain the independence of the review body and for ministers to implement its recommendations in full.”

In the Commons, MPs warned Mr Hammond that the pay cut would undermine Forces morale, but he said the proposals allowed for “flexibility for the MoD to address specific problem areas if we are losing or failing to recruit specialist staff”.

David Nuttall, a Tory MP, told Mr Hammond that the pay deal compared badly to the annual increase in benefits payments agreed last month. “What effect does he think there will be on the morale of our Armed Forces personnel when their pay is being frozen while many on benefits are being given a 5.2 per cent increase?” he asked.

An MoD spokesman said the Coalition was committed to ensuring decent treatment for servicemen.