Adviser sacked by David Cameron after Armed Forces pay row 'paid the price' for supporting troops Jim Murphy, the Shadow Defence Secretary, has described Prof Smith's sacking as "punitive and incompetent." The review body's annual report was published on Thursday, calling for a 1 per cent increase in basic pay for soldiers, sailors and airmen. The body also recommended a 0.5 per cent rise in the "X-factor," a supplement added to Forces wages to reflect the hardships and uncertainties of military life. The level of X-factor varies according to rank, but is supposed to increase overall pay to 14 per cent more than a comparable civilian salary. The Government said that it had not accepted the review body's call for an increase in the X-factor. The Treasury has said that annual public sector pay rises due next month should be capped at 1 per cent. That is below the rate of inflation, meaning a real-terms cut. Last year, ministers told the review body that the 1 per cent cap should apply to the Armed Forces too. The report was submitted to No10 in January. It is understood that No10 made the decision even though senior figures in the MoD had wanted Prof Smith to serve another term. Philip Hammond, the Defence Secretary, said that the MoD could not afford the additional pay rise, which officials estimate could cost up to £40million. Mr Murphy said that the sacking "takes government incompetence to a new level." "The removal of Professor Smith from Chairmanship of the Armed Forces Pay Review Body is punitive and incompetent," Mr Murphy said. The Review Body exists to make independent recommendations on Forces' pay and it seems that the problem was that the advice was just too independent. Professor Smith has been removed for doing the job he was asked to do. A government has the right to take the unusual step of not agreeing to the independent recommendations but to then refuse to renew the contract of the Chairman smacks of intolerance. This out of the blue decision also leaves the Pay Review Body without a Chair at a crucial time for our Forces and their families; it takes government incompetence to a new level.