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Mr James Arbuthnot (North East Hampshire) (Con)
We are an island. That makes what happens around our coasts of great importance to us. We are a member of the permanent five in the UN Security Council, of the Commonwealth, of the European Union, of NATO and of other organisations, which, added together, means that we are a world power, with global responsibilities and interests. That makes what happens in the seas of the world of great importance to us.
We are a trading nation. We are a nation that cannot, or at any rate does not, feed itself. We rely on food, as well as countless other goods, from abroad. Most of that comes by sea. That makes what happens at sea of great importance to us. We operate under the conditions of “just in time”. Those wonderful warehouses in London’s docklands have now been turned into rather chi-chi flats, and we no longer have the reserves to feed, fuel or supply the country for many weeks, let alone months. That makes us vulnerable.
It is because of all the crucial interests that I have outlined that the defence of our country is of such importance. Within that defence, maritime surveillance plays a central role. Therefore, the Defence Committee decided to conduct an inquiry into it. We called the inquiry “Future Maritime Surveillance”, because we wanted to focus not on the decision to cancel the Nimrod MRA4 programme, the successor to the MR2, in the strategic defence and security review, but on the future needs of the nation and how, given where we are now, we could address those needs. Obviously, however, the cancellation of Nimrod was a big matter, and I shall consider that first.
Let us be clear about Nimrod. It was late—very, very late. It was vastly over budget, at a time of deep financial stringency. It was an aeroplane that had serious aerodynamic problems. It was, in other words, a deeply troubled project—and no doubt one for which, in the usual way, I should take the blame as Minister for Defence Procurement between 1995 and 1997.
Mr Arbuthnot
No, that was a joke—at least, I think it was. But the cancellation of the project was the one change that troubled the Ministry of Defence most in the SDSR. The Vice-Chief of the Defence Staff told the Defence Committee:
“It would be fair to say that among the Chiefs of Staff and in the military advice, it was one of the most difficult decisions to come to terms with, because it has multiple uses.”
In the Government’s answer to the concerns that the Defence Committee expressed in our report on the SDSR of August 2011, they said:
“Like the Committee we regret that we had to cancel the Nimrod MRA4 programme. It was a capability that we would, in an ideal world, have preferred to acquire…we reluctantly concluded that cancellation was the least bad option.”
The reason for that unhappiness was described to us by Professor Julian Lindley-French. He told us that
“the point is that of the seven military tasks in the SDSR, the MRA4 could have played a very important role in all of them. It was the loss of the enablers, because the single services were forced back to defend their own core competencies by the process, which for me was the biggest failing of the SDSR process. Forget all the strategic stuff: there was a haggle at that last weekend, which was utterly unacceptable in terms of the national strategic requirements.”
The report that the Defence Committee produced earlier this week on defence acquisition contains a bit of an echo of that statement.
In our report on the strategic defence and security review, we expressed concern about the resultant capability gaps of cancelling MRA4. In their response, the Government acknowledged that there is currently no single asset or collection of assets that could fully mitigate the resultant capability gap. That is enough about Nimrod; let us look at the other assets and look to the future.
The Government said in 2011 that they continued
“to maximise the use of…assets”—
other than Nimrod—
“such as Type 23 Frigates, Merlin Helicopters, Sentry and C-130 to contribute to Anti-Submarine Warfare, Search and Rescue and Maritime Counter-Terrorism where possible. In the longer term, if the Government were to conclude that it needed to close the gaps completely because”
threats emerged that could no longer be managed in the same way as today,
“some additional funding or reprioritisation would be required.”
In our report, “Future Maritime Surveillance”, we concentrated on the strategic requirements for maritime surveillance, identifying current capability gaps and the future requirements for maritime surveillance and how they might be met. Given the wide range of maritime surveillance tasks and the number of Departments and agencies that require access to maritime surveillance capabilities, we also looked at cross-Government co-operation. We published our report in September 2012 and the Government’s response in December 2012. We have also placed on our website the Minister’s response to some follow-up issues that we raised following the Government’s response. I am grateful to him for that.
I pay tribute to the Committee’s staff and military advisers, who provide us with invaluable support and advice. We are all grateful to them. I would like to thank personally the Committee members themselves. They work extremely hard to very good effect, which is one of the reasons why chairing it is the best job that I have ever had.
Bob Stewart
Good. The Minister will tell us how we are to keep those extremely specialised skills alive. I suspect it will be by using allies such as the Americans. I thank my other Chairman for raising what was an omission in my speech.
Of course, an effective and modern maritime patrol aircraft capability is available, without the need to wait to 2020. Even assuming that SDSR 2015 looks at it, however, there is no guarantee that a decision will be taken to return to this extremely vulnerable capability—[Interruption.] Goodness me. Forgive me, Mr Brady. That was probably the Prime Minister calling.
I very much welcome Ministry of Defence funding for investigative work on other potential options. We have had briefings about unmanned systems, lighter-than-air vehicles and space technology. Additionally, hybrid air vehicles, such as the AIRLANDER, which have long endurance and operating costs a fraction of those associated with aircraft, are being considered. Of course, all those options need to be studied, and when the results are analysed, we must ensure that delivery time scales and effectiveness are carefully assessed.
I endorse the establishment, which my right hon. Friend the Member for North East Hampshire has highlighted, of the maritime security oversight group and the National Maritime Information Centre. Those are superb moves. They are steps towards a more strategic and co-ordinated output and will help, as my right hon. Friend—I mean my hon. Friend the Member for Portsmouth North (Penny Mordaunt); she will be right hon. in due course—has already highlighted, to mitigate some of our capability gaps, I hope, quickly.
We need a decent maritime surveillance capability for the United Kingdom as quickly and effectively as possible. We must of course consider a range of options, but a rejuvenated maritime patrol aircraft capability, with a truly multi-role capability, should probably remain a key element—if not the key element—of any proposed solution. I apologise for the Prime Minister interrupting my speech.
Thomas Docherty
I look forward to being shepherded out safely by the Doorkeepers later.
If the decision about the carrier was the largest financial decision, the break-up of the Nimrod aircraft is probably the most visually impressive one to come out of the 2010 SDSR. I do not think that there is anyone who did not watch those images of JCBs tearing up a multi-billion pound project with incredulity. I shall touch briefly on the lessons that the MOD must learn and things that the Committee has discussed in our subsequent report on defence acquisition.
Quite a lot has been said about the Nimrod model and its role, but other capabilities were deleted as a result of the SDSR. The most notable for maritime surveillance was, of course, the Type 22 frigate, which the hon. Member for Beckenham also mentioned. The Type 22 was, as the report says, originally designed and constructed purely as an anti-submarine warfare vessel during the cold war. In its latter years, it took on a broader role, and the Committee was, I think, unconvinced by some of the MOD’s arguments that that capability had been fully covered. Perhaps the new Minister for the Armed Forces will say something about how that matter is being addressed. I should probably take this opportunity to congratulate the right hon. Gentleman on his promotion to his new role.
Thomas Docherty
It feels like yesterday, I am sure, to many in the MOD. I had the pleasure of serving with the Minister in the Armed Forces Bill Committee when he was merely an Under-Secretary, and I thank him for the letter that he kindly sent me this morning on another matter; I am most grateful that we could resolve the issue. Obviously, he is not directly responsible for many of the decisions, or the comments made by the MOD on the report; but of course he believes in collective responsibility, and I am sure that he will be happy to respond in relation to his predecessor’s comments and to our observations. I have a huge amount of time for the Minister’s predecessor, who was very able and sound, which is probably why the Deputy Prime Minister got rid of him in the Liberal Democrat reshuffle.
Without a doubt, as we said on the acquisition report earlier this week, many decisions in the lead-up to the SDSR were rushed and not fully thought through. Thinking was not done for the long term. With a little charity towards the Government, I must say that the programme is probably the finest example of how not to procure. Four parties each bear some responsibility. First, I hope that my hon. Friend the Member for North Durham (Mr Jones), who played no part in the decision when he was at the Ministry of Defence, will accept that my right hon. Friend the Member for Coventry North East (Mr Ainsworth) and other colleagues over the years perhaps did not provide enough scrutiny of the acquisition process.
Thomas Docherty
I absolutely agree with the hon. Gentleman, and I will come on to that very point shortly.
There has been some discussion already about the joint equipment programme and the whiteboard, and we have touched on the balanced budget. Without prejudging what the Minister might say in response to the debate, I suspect that that might be one of the arguments that he seeks to advance. He knows well my view—and, I think, that of the Defence Committee—and that is a healthy scepticism about the claims that have been made about the size of the so-called black hole and whether or not, in the space of eight months, it has been balanced.
One of the things that concerned us in producing our report was an issue that was touched on briefly by the hon. Member for Beckenham: the long-term replacement for the maritime surveillance capability is sitting on the whiteboard, without a funding line and without even a probable time line for moving off that whiteboard and into the joint equipment programme. I wonder whether the Minister, when he responds to the debate, will clarify for the House what the status is of the whiteboard. The Minister shakes his head. With the greatest of respect to him, it is difficult for the Defence Committee to believe that the Ministry of Defence has a fully funded JEP and a clear idea of what is on the whiteboard when they will not tell us what is on the whiteboard.
Mr Robathan
Until now, the hon. Gentleman has been making rather a lot of sense—it is unlike me to compliment him, as he knows—but the whole point of the whiteboard is that we look at things that we want to have and then we assess whether we can afford them, and if everything that we thought that we would like to have was revealed to everyone else, I am afraid that we probably would not be mentioning a whiteboard at all, because we would not want to have our internal thinking announced before we have got as far as making decisions. These are not decisions; these are things that we want to have.
Thomas Docherty
I am very conscious that the title of this debate is “Maritime Surveillance” rather than “Acquisition”; I suspect that we may well seek a broader debate on acquisition. Let me just say to the Minister—again, I thank him for his career-helpful advice and praise—that maritime surveillance, as the Committee has so clearly identified, is not a “like” or a “nice to have”. It is absolutely essential.
Mr Jones
I have read Lord Browne’s articles with great interest. I consider him a friend, but the weakness of his argument in The Daily Telegraph is that he makes a point about alternatives without giving one.
A maritime surveillance capability, as the hon. Member for Beckenham (Bob Stewart) said, is vital to ensuring that we know the location of threats to our independent nuclear deterrent. From personal experience, I know the importance that the Ministry of Defence places on ensuring that any threats to our independent nuclear deterrent and our nation are taken very seriously.
Having read the report, I do not think there is disagreement between the Committee and the Government. Uniquely, there is agreement between the Government, the Committee and the National Audit Office that the decision in the 2010 strategic defence and security review was wrong. In a minute I will address why I think the decision was taken, because the contribution from the hon. Member for Aldershot (Sir Gerald Howarth) is enlightening.
Yes, mistakes were made in the discussions on Nimrod. I am surprised that the hon. Gentleman criticised BAE Systems because, as he said, he is referred to in many parlours as the “Member for BAE Systems.” On this occasion, he has been frank and clear in his criticism of the company.
The mistakes made in the early days were like trying to turn a 1962 Mini Cooper into today’s model with the same frame. That was highlighted by the reports on the project from when I was a member of the Defence Committee. Was there a time to pull out of the contract? Yes, I think there was. Our report from the early 2000s suggested that there should have been that option. When spending public money, we get to a point where people think, “A little bit more might get this done.” In hindsight, had there been some revision of the project in the early 2000s, Conservative Members would rightly have thrown criticism at us for wasting large amounts of public money. Making the decision earlier might have led to a capability being in place today.
There is no disagreement that there is a capability gap. The report states:
“The National Audit Office’s (NAO) Ministry of Defence Major Projects Report 2011 considered the capability gaps left by the…MRA4 decision. The NAO Report said that according to the MoD, the Nimrod contributed to eight out of the 15…priority risks set out in the National Security Strategy. It added that the Nimrod was uniquely able to rapidly search large maritime areas, a capability relevant to long range search and rescue, maritime counter-terrorism, gathering strategic intelligence and protecting the nuclear deterrent. The NAO Report further said that the MoD had carried out studies in the lead up to the SDSR to assess the capability gap from cancelling the Nimrod MRA4 and the MoD ‘assessed that cancelling Nimrod would have consequences for the military tasks that the aircraft was expected to undertake, some of them severe’. The Report also outlined the capability gaps”.
Mr Robathan
I was not involved in defence before the general election, but I understand that the MR2 was retired from service in March 2010, when the hon. Gentleman was a Minister. That is when the capability gap started, because there was no maritime reconnaissance aircraft from that day forwards. Is that correct?
Mr Jones
The important point is that the earlier decision on the MRA4 should have been reviewed. We would then have avoided the capability gap.
I remember that at the time we were facing an Opposition who were calling not only for larger armies, more ships and more aircraft, but for an increased defence budget. I am sure that if we had decided to cancel some of the things that they have subsequently cancelled, they and their allies at the time on The Sun would have given us a harder ride than they have had in recent years.
The NAO report sets out that
“limited analysis was carried out on how specific military tasks could be covered”
by a combination of the various options. The report continues:
“However, the Department noted that there would be ‘significant shortfalls without significant investment, and the co-ordination of such assets at the right place and the right time’”.
There is no disagreement that the Government have created that major capability gap. Worse, there is no solution to fill that gap. I agree with the hon. Member for Aldershot that we are relying heavily on our allies. I pay tribute not only to the Norwegians but to the US and others that are helping us with that capability.
The next question is why was the decision taken? Again, I am interesting in what the hon. Gentleman said: the decision had to be taken because of the mythical £38 billion black hole. I notice Ministers sometimes use that figure, but sometimes they do not. We must recognise that those decisions had to be taken because of the 9% cut in the defence budget introduced by the SDSR. The decisions were not strategic; they were budgetary. Knowing the defence budget as I do, there are only two simple ways to take out in-year cash. The first is to take out capability, as happened here, and, for example, with the Harriers. The second is to sack people, which has happened over the past few years.
I have never figured out where the £38 billion figure came from, even though my parliamentary colleagues, the Public Accounts Committee, the Defence Committee and I have asked for explanations. We have been promised explanations that we have never received. I suspect the figure came from the 2009 NAO report, but that was on the equipment budget.
As my hon. Friend the Member for Dunfermline and West Fife (Thomas Docherty) said, it gets to £36 billion only if everything in the programme is included, flat cash, for 10 years. Adding the inflation rise meant £6 billion. As the hon. Member for Aldershot knows, as he has admitted this afternoon, there might be aspirations in the equipment programme, but that does not mean it will all be delivered. Some things come out and others go in.
The weakness of the current situation is that the Secretary of State claims to have balanced the budget but, so far as I can see, that refers only to the equipment budget, rather than the remaining 55%. If he has been so good at plugging a £38 billion black hole within months, he and his predecessor, who made the same claim, should not be in the Ministry of Defence, but in the Treasury. We need some honesty.
The Minister for the Armed Forces (Mr Andrew Robathan)
It is a pleasure to serve under your chairmanship, Mr Brady. Of course, the Conservative parliamentary party always serves under your chairmanship.
I begin by congratulating my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot) on the work he and his Committee have done in this area. Since we are all being nice to those who help us, I add my thanks to the huge number of serving personnel and civil servants who came to fill in one or two knowledge gaps in my portfolio. I have already made that point. They have come along to see whether they have repaired the gaps in my knowledge, and I think they did.
This is an important and wide-ranging subject and it is right to give it serious attention. As has already been pointed out, maritime security is vital to the defence of our nation and our interests around the world. The military and non-military dimensions of maritime surveillance are key elements. We highlighted our position as an open, outward-facing island nation in the national security strategy and placed an emphasis on surveillance and intelligence in the SDSR. Put simply, we cannot protect ourselves against existing and anticipated threats if we do not understand and cannot detect them. Doing so successfully requires a range of capable platforms and sensors, highly trained personnel and procedures to ensure effective action is taken on the information they provide.
The geography of the United Kingdom means that we are dependent on the sea for our economic prosperity. Maritime security and surveillance underpins our trade: the vast majority of our imports and exports are transported by sea. As much as 90% of world trade is carried by sea, so we not only need to secure our own territorial waters but to contribute to protecting key global sea lanes and our vital interests overseas.
I think everybody here would agree that we also wish to be able to project military power with our allies through the use of expeditionary forces. We rely again on maritime surveillance assets to protect those forces wherever they are deployed. Closer to home, the Government have responsibility to protect our people, our borders and our exclusive economic zone. I have always said that the first duty of Government is the defence of the realm. That requires that the different agencies charged with doing so—the police, borders, immigration, intelligence agencies, coastguard, Department for Transport, search and rescue providers and the armed forces—have the capabilities they need and work closely together.
None the less, hon. Members will be well aware that we did not start on firm financial ground in planning for the future. The parlous state of the defence budget inherited from the previous Government and the overheated and unrealistic equipment plan meant that hard decisions had to be taken. I am not going to engage again with the hon. Member for North Durham (Mr Jones), who is in denial, yet he was a Minister in the previous Government and knew what the situation was. He remains in denial and we have had this conversation before.
I understand that the Secretary of State has written to the shadow Secretary of State detailing exactly what the situation was.
Mr Robathan
If he has not, I will come back to the hon. Gentleman and ensure he gets a response. It is also the case that the parlous state of the nation’s finances is visible for all to see. Yet, instead of having any guilt about it, he sits and smiles and says it is not true and that everything was going swimmingly, as the previous Government in a profligate manner distributed money everywhere and left us in this ghastly situation that none of us enjoys.
Mr Robathan
I have told the hon. Gentleman that I will not engage with him again, because we have done it before and he is in denial. One cannot have military or economic security based on unsustainable defence spending. The Soviet Union found that out. That is why we took a number of difficult decisions during the SDSR, including the decision not to bring the Nimrod MRA4 into service.
At the beginning of the debate, my right hon. Friend the Member for North East Hampshire said that he did not wish to concentrate on Nimrod, but I am afraid that it has been largely about Nimrod, which I will therefore have to deal with in some detail. I asked the officials present—this huge number of serving personnel and civil servants—at what date the original Nimrod decision was taken, so I knew before his confession that it was, sadly, taken under the previous Conservative Government.
We should not forget the background to the decision to cancel Nimrod. There were no maritime reconnaissance aircraft flying in the RAF when we came into government. We did not create the capability gap—the capability did not exist. Owing to cost growth in the programme, the original plan to convert 21 airframes for the MRA4 had by 2010 been scaled back to only nine. The in-service date had been delayed from 2003 to 2012, costs had none the less risen from £2.8 billion to £3.6 billion, there were still outstanding technical problems which would have taken further large sums of money to solve and we knew that it would cost about £2 billion to operate over the next decade. While the capability’s role in support of anti-submarine and anti-surface warfare, strategic intelligence gathering, and search and rescue remained important, in a financially constrained environment dominated by the operations in Afghanistan among other threats, it made the most military and financial sense to discontinue the programme, however unhappy that made us.
I was particularly interested in the comments of the hon. Member for Dunfermline and West Fife. I joined the armed forces in 1970 and, during my time in the Army and in Parliament since, I have seen a long list of poor procurement projects—[Interruption.] That is the Leader of the Opposition ringing. Out of a litany of procurement disasters, as the hon. Gentleman said, this has been one of the worst. It was more than nine years late, each aircraft was to cost three times the original amount and we still had not finished. We did not where the programme was going, there was no end in sight and we were not asked to throw good money after bad. I am afraid that that decision, much as it is regretted, was the right one.
Dr Julian Lewis
I apologise to the Minister and to other right hon. and hon. Members for coming late to the debate. I was serving on the Justice and Security Bill Committee, which has only just finished. Given that so much money was sunk into this project and that considerable technological advances were made for the equipment that was to be carried on the Nimrod, will we still get the benefit of that advanced technology development for possible use in future programmes?
Mr Robathan
My hon. Friend asks a good question, but I am afraid that I cannot answer at this moment. I will write to him and let him know but, certainly, technological advance does not go away—it has happened.
We have not been idle in dealing with the consequences of the decision. Revised plans and operating procedures are in place for other platforms to mitigate the absence of a maritime patrol aircraft capability. I will not go into too much detail, as some things are classified, but we can request support from allies and partners if necessary and we have established a seedcorn initiative to maintain the skills and knowledge necessary to operate maritime patrol aircraft in the future, should circumstances change. I was in New Zealand last year and saw some of our RAF personnel who were taking part in the seedcorn initiative. They said it was extremely valuable, and I thought it also sounded like a pretty good posting.
Thomas Docherty
The Committee said that we support seedcorn, which was a sensible move by the Government, but we were specifically concerned that the capability could not be maintained beyond 2019. Given the ongoing delays, what reassurances can the Minister offer to the Committee that that issue has been met?
Mr Robathan
That is a perfectly good question. We are coming up to another SDSR in two years’ time, when we will consider how to take this forward. I was going to cover the subject subsequently, but we are stretched for time. Hot off the press, I point out to my hon. Friend the Member for New Forest East (Dr Lewis) that some of the equipment destined for the MRA4 is now destined for the Merlin Mark 2 from 2015. Living within our means will continue to guide our decisions. Hard-headed realism and rigour will determine what we buy.
I have many things that I want to put on the record, but the sitting ends at 4.30 pm, so I must be circumspect in what I say. I turn to submarines, which have been much discussed. Submarines use their stealth and global reach to collect information, indications and warnings of threatening activity; where appropriate, they operate in support of naval taskforces. Bringing in the Astute submarine is a major step forward; it is a quieter submarine and gives us greater capabilities. Also, internationally we are not operating alone. Not only the French and Norwegians, but the Americans and Canadians can provide support through maritime patrol aircraft. We have existing agreements with some of those countries and have recently signed a memorandum of understanding with Norway to co-operate on maritime air surveillance. We are also supporting a NATO smart defence initiative to look at long-term solutions to challenges, which could involve buying maritime patrol aircraft.
We are not complacent. There is a great deal of agreement in the Chamber that this is something we wish to have: greater ability for maritime surveillance. We are looking at ways to have that in future. In order to answer the questions, however, I will not go through the rest of my speech, except to comment on the helicopters. We are looking at the Merlin Mark 2 coming into service this year—two are already in service—and we have SKASaC or Sea King airborne surveillance and control, which will operate until 2016, although the airframe is quite aged, as my hon. Friend the Member for Beckenham (Bob Stewart) said. We are not in any way suggesting that life is perfect at the moment.
When winding up, one should answer Members, so I will give some replies. My right hon. Friend the Member for North East Hampshire asked five questions. We see co-ordination of maritime surveillance as being done by the maritime security oversight group, up to the National Security Council. I agree that further development is needed, and I think that it will develop further. His second question was on the strategic analysis of maritime threats and the need for surveillance. I do not have a specific answer, because that is something we are doing the whole time. If he wants to ask a specific question later, I am happy to answer it. On progress on developing maritime ISTAR, some is classified, but optimisation study is going on as we speak. The air ISTAR optimisation study will consider the potential contribution to maritime surveillance of lighter-than-air vehicles, which were mentioned earlier; the initial report will appear in April this year, for consideration of options by April next year. His fourth question was the general ability to deal with contingency operations. Generally, contingency—a much overused word in the MOD—seems to rule everything at the moment. After Afghanistan, that is very much where we are looking. His fifth question was on updates, which we will continue to provide. If we do not, he can come back to me and ask for them, as I certainly will update him.
I did not entirely agree with the point made by the hon. Member for Ayr, Carrick and Cumnock (Sandra Osborne) on the deterrent, although I entirely agreed with her point about Scottish separation. We have layers of defence for the deterrent, so I echo the CDS, and I have just mentioned the Merlin upgrade to Mark 2, going into service this year. They regularly deploy to Prestwick to rehearse anti-submarine warfare in support of deterrence protection. Therefore, what she said is something we are using, although not permanently.
Mr Robathan
I do not think that I should; I have one minute left.
I agree entirely with the hon. Member for Dunfermline and West Fife that the procurement and acquisition process has been appalling in the past. I hope that he will have some confidence in the pronouncements by my right hon. Friend the Secretary of State and, indeed, by my hon. Friend the Member for Ludlow (Mr Dunne), the Minister for Defence Equipment, Support and Technology. We are trying extraordinarily hard, with the assistance of Bernard Gray, the Chief of Defence Matériel, to get this right. The Select Committee will come back to me or the Ministry of Defence if we do not get it right. The hon. Gentleman mentioned the black hole, but I do not want to go there again.
May I say how much we miss my hon. Friend the Member for Aldershot (Sir Gerald Howarth) at the MOD? He was absolutely right about money, but I am afraid to say—