Defence and Security Public Contracts (Amendment) (EU Exit) Regulations 2019

Baroness Smith of Newnham Excerpts

Monday 4th February 2019 Grand Committee

[Baroness Smith of Newnham (LD)]

My Lords, this is the first statutory instrument related to Brexit that I have had the joy, or misfortune, to be involved with. In that sense I am quite glad that it has two purposes, one of which is valid regardless of whether there is a no-deal Brexit. However, one does wonder, given that the relevant legislation was repealed in 2011, why it has taken Her Majesty’s Government quite so long to bring this to our attention in the SI.

On the other aspect of the SI, many of the questions I have noted are very similar to the questions raised by noble Lords on the previous SI. According to the statutory instrument, Regulations 3 and 4 come into effect on exit day. Will the Minister explain what would happen in a transition period? Exit day would still presumably be 29 March, but at that point we would stop using the Official Journal to advertise things. Will we be in a situation where, somehow, the statutory instrument does not come into effect? Is it like the previous SI and will come into effect not on exit day, but only after some transitional period? Otherwise there would seem to be a bit of a gap. The UK would not quite be at a cliff edge, but the situation would be somewhat unclear because we would not have the situation I envisaged would be the case during the transition period.

I will ask various questions that go beyond the nitty-gritty of the regulations. Will the Minister explain what Her Majesty’s Government envisage by the statutory instrument in terms of access to UK markets? There is already a whole set of questions about overspends and the Public Accounts Committee has asked questions about defence procurement. If we are in a new world where EU defence contractors are treated like third-country defence contractors, have the Government modelled the impact this is likely to have on defence procurement? Will it mean that the UK will spend more on defence procurement than was the case when it was a member of the European Union? Similarly, what work have Her Majesty’s Government done on evaluating the impact on our arms export industry of not being part of the single market? If we are treating the EU 27 as third countries, presumably they will not exercise the reciprocity of access to their defence industry and defence exports that we have enjoyed. There are some wider questions on the impact the Government think we will see from Brexit if we are not part of the single market for defence exports.

I have various technical questions. Like other noble Lords, I have spent quite a long time reading the Explanatory Memorandum. I am intrigued to note that the Minister can confirm that it meets the required standard. What counts as the required standard, and what can we expect to see in an EM? Are there things that we might find even more useful for understanding what is going on? The memorandum is certainly rather easier to follow than the SI as it is drafted.

Modernising Defence Programme

Baroness Smith of Newnham Excerpts

Tuesday 18th December 2018 Lords Chamber

[Earl Howe]

My Lords, if it is possible for the Ministry of Defence to share that document, I will certainly do as the noble Lord asks. In answer to his first question, there are two things to say about the MDP. First, this has been a major and very thorough piece of work. Secondly, the document is essentially strategic in its nature; it focuses on key defence capabilities and has affirmed the central elements of our strategy as articulated in SDSR 15, from which, as the noble Lord is aware, it emerged. It has also guided our investment decisions on capabilities, announced at the Budget, and updated our key policies. It is designed to keep us on track to deliver the right defence for the UK, and does so in what we see as a challenging decade ahead. As noble Lords read and reread the report, I am sure that it will make clear a lot of detail underlying the general proposition that I have just articulated.

[Baroness Smith of Newnham (LD)]

My Lords, as the noble Earl has just said, the present document is very detailed, yet in many ways it appears to be a glossy brochure with a lot of aspirations. These remind me rather of the vagueness that we get on what Brexit might look like. There do not appear to be clear strategies for where the Government want to go. Can the noble Earl explain what £160 million might actually be able to deliver? I think it is about the equivalent of two F35s, and I am not quite sure how will keep this one step ahead of our adversaries. I also come back to the question raised by my noble friend Lord Campbell about the exchange rate because hedging is one thing, but we are moving towards a one-for-one rate in the pound to the dollar. Is it really credible to say that the Government have hedged all of our defence budget in that way?

[Earl Howe]

We have not hedged all our defence budget, but we have hedged a substantial proportion of it, particularly that which is payable in dollars. I was speaking to our finance director last week about this. Although she could never be sanguine about the way the pound is moving, she is much clearer now that we have an affordable equipment budget over the next couple of years, which is the period over which she aims to hedge. I have already made it clear to the noble Lord, Lord Browne, that it is, unfortunately, impossible for me to enumerate at this point those projects which will come under the umbrella of the transformation fund. It was said that £160 million is not a great deal of money—it sounds like a great deal of money to me, I must say—but one should not think of transformation simply in terms of platforms and assets. One has to think of it in terms of different ways of working and of modernising practices within defence. That is where this fund will score most heavily.

Armed Forces (Terms of Service) (Amendments Relating to Flexible Working) Regulations 2018

Baroness Smith of Newnham Excerpts

Wednesday 10th October 2018 Lords Chamber

[Lord Craig of Radley (CB)]

My Lords, I welcome the detail with which the noble Earl, Lord Howe, has gone into this, particularly the assurance that no individual will be required to undertake part-time service. That is a most important assurance, and I was glad to hear it from the noble Earl’s lips. He mentioned pensions and the abatement of pay. This seems but one part of a story, and each individual who will contemplate it must have the whole picture before he or she is able to make any decision about whether it is worth applying for. I therefore hope that in mentioning the pensions as coming forward, the noble Earl will be able to explain exactly when that is to be available; presumably it must be in the near future.

My only other point may be going into the detail, but perhaps I need a bit of education on the difference between the territorial extent of an application and the territorial application of it. It seems that, for example, in this and in the next regulation there are differences in how this is handled. Perhaps, in replying either to this or to the later debate the noble Earl, Lord Howe, will be able to explain the difference between those two things, because I for one do not quite follow it.

[Baroness Smith of Newnham (LD)]

My Lords, it seems a long time ago that we debated the Armed Forces (Flexible Working) Act, partly because it was introduced into your Lordships’ House before it went to the House of Commons. I went back to my files and noted that I had talked about the devils in the detail, although I did not come up with that idea first; several Members of your Lordships’ House had talked about that. In particular, the noble and gallant Lord, Lord Walker of Aldringham, said that,

“the devil is going to be in the detail of the regulations drawn up to operate the system”.—[Official Report, 11/7/17; col. 1187.]

It would be fair to say that while on balance your Lordships’ House was supportive of the ambitions of flexible working, some concerns were articulated across the House—I suspect even by the noble Earl, Lord Attlee. In particular, the noble Lord, Lord Dannatt, raised one of the concerns that has just been raised by the noble and gallant Lord, Lord Craig of Radley, about whether flexible working would be imposed rather than chosen voluntarily. While it may appear this evening to the noble Earl, Lord Attlee, that somehow this is a simple Act and that these regulations look straightforward, the reason for wanting them to come through the affirmative procedure was precisely because there were concerns that the devil could be in the detail. There were slight suspicions that the regulations would lead to a situation where flexible working could be required of people in circumstances where perhaps the Regular Forces seem overmanned—that might seem unlikely, but that was the sort of concern raised by the noble Lord, Lord Dannatt—which was why we thought this needed to come through the affirmative procedure.

The regulations as we see them look straightforward, although I am delighted to see that the Explanatory Memorandum is rather clearer and in ordinary English, for those of us who are not used to reading legislation regularly. I hope that the advice that will be given to service men and women will be even clearer than what we see in the Explanatory Memorandum. The rules look slightly opaque, and to put them into some sort of citizen’s English—even if it includes lots of three-letter acronyms that are much more familiar to the RAF or the Royal Navy than perhaps to the rest of us—would ensure that the information given to service men and women will make them want to look at using these provisions, and would be welcome.

The regulations look straightforward and very much in line with what the Minister outlined to us at various stages during the passage of the flexible working Act. That is perhaps not surprising, because, as the noble Earl, Lord Attlee, said, essentially we expect the Minister to listen and to respond. But we do not always know whether Secretaries of State or Chancellors of the Exchequer will manage to do likewise. While it is important that these regulations are discussed this evening, I do not see a reason to do anything other than affirm their progress.

[Lord Tunnicliffe (Lab)]

My Lords, we will, of course, support these regulations. I fear the noble Earl, Lord Attlee, has in many ways the wrong challenge. The requirement that these be subject to an affirmative order has an effect that one comes across again and again in complex organisations: the knowledge that something will be scrutinised at the highest level produces very high-quality work. One of the key factors noticeable in these regulations—I take them together with the notes for the service personnel who will use them—is that virtually every question left unanswered in the primary legislation has been answered in them. Therefore, I welcome and support them. I have only one question related directly to the regulations, which is about the reporting procedure: will the frequency of their use be reported in the public domain, and if so, where?

The problem of being a Minister in your Lordships’ House is that nobody is here to enforce the rules. Accordingly, I looked at the Explanatory Memorandum to see if I could find something to say. I noted that one reason for these rules was to improve recruitment and retention in the Armed Forces. Essentially, it was an important piece of morale-boosting, which this Government certainly need. Total outflow from the Armed Forces has exceeded intake every year since 2011. I looked into this a little bit further; the way to find out what morale is like in the Armed Forces is to go to the regular Armed Forces continuous attitude survey. It is a brilliant document in terms of information—and a deeply depressing one for anybody who reads it. I will quote one or two statistics from it: satisfaction with pay has gone from 52% in 2010 to 31% now; satisfaction with service life in general has decreased—among both officers and other ranks—from its peak of 61% in 2009 to 41% now.

Dissatisfaction has been particularly acute in the Royal Marines. Members of this House have fought a little battle to keep ships retained for the use of the Royal Marines, yet we find that service morale among officers—that is, ratings for high morale—has gone from 64% two years ago to 23%; for other ranks, it has gone from 32% two years ago to a staggeringly low 9% now. I would defend the right of the Minister not to respond to this, but I hope he will rise to the occasion and give us some indication of how this crisis is being addressed. I put it to him that one of the reasons is leadership—I am not talking about people in uniform; I am talking about the politicians. SDSR 2015, which was published on 23 November 2015, promised annual reviews. That was a good thing, as I think it has emerged that the SDSR was underfunded.

The Government met their commitment and, roughly a year after that publication, they produced an annual review—the first annual report. The second annual report should have been published on 23 November 2017 but it was overtaken by, of all things, a review by the Cabinet Office. There must have been some squabbling because that metamorphosed into something called the Modernising Defence Programme. We were told that its main points would be published by the time of the NATO summit of 2018, and indeed we got a letter from the noble Earl. As ever, it read brilliantly the first time—these letters are always well drafted—but the second time you read it through you realised that it said absolutely nothing. There was not a single concrete piece of action in it.

If the noble Earl wants to rise to the occasion, I hope he will say when we will see real progress on the review and when the Armed Forces will recognise that they have a serious morale problem, with a programme to address it directly. Although I have served in the VR, I am not a military man in the sense that I have not served full time or been presented with any hostile forces, but I have talked to a lot of people who have. My summary of what they have said to me is: if you want effective forces, you have to have leadership, equipment, training and morale. These are not additives; they are multiplicities, and if any of them is at a low level, that affects all of them and you have wasted your money. We are not at all happy with the equipment area or the training area, and now we are not at all happy with the morale area, and I hope that the Minister will be generous enough to provide some answers.

Armed Forces (Specified Aviation and Marine Functions) Regulations 2018

Baroness Smith of Newnham Excerpts

Wednesday 10th October 2018 Lords Chamber

[The Minister of State, Ministry of Defence (Earl Howe) (Con)]

My Lords, the background to this statutory instrument is as follows. At the moment, a commanding officer can require a person to take an alcohol or drug test if the commanding officer has reasonable cause to believe that they are committing a service offence by performing a safety-critical duty while over a set alcohol limit, or impaired by drugs or alcohol. A commanding officer has similar powers if they believe that a civilian subject to service discipline has committed similar offences under legislation relating to safety in shipping and civil aviation. This power and the linked offences help deter or detect the misuse of alcohol or drugs by those performing safety-critical duties, and so help prevent accidents. However, these powers are aimed at gathering evidence for a possible prosecution, hence the need for a commanding officer to have “reasonable cause to believe” that an offence has been committed.

When an accident happens, it may be important to determine whether anyone involved had been misusing alcohol or drugs, even if the commanding officer does not have any immediate cause to believe that an offence has been committed. Section 2 of the Armed Forces Act 2016 amends the Armed Forces Act 2006 to allow a commanding officer to also require a member of the Armed Forces, or a civilian subject to service discipline, to co-operate with a preliminary test for drugs or alcohol after an accident. Importantly, in these circumstances a person may be tested without the need for suspicion that an offence has been committed. This gives commanding officers the power to test those who performed aviation or marine functions relating to an aircraft or ship involved in an accident. They also apply to anyone who performed a safety-critical function connected to any serious accident. “Serious” in this context means an accident which resulted in or created a risk of death or serious injury to any person, serious damage to any property or serious environmental harm. This will improve our investigations of such accidents.

It is important that accidents in the military environment are investigated thoroughly with a view to contributory factors being identified and appropriate punitive or remedial action being taken. The test will be carried out by the service police, and the results of a preliminary test can be used in support of criminal and non-criminal investigations. The tests will mainly support service inquiries, but they may be used in any type of investigation arising from an aviation or marine accident or any other serious accident. The relevant aviation and marine functions must be specified by regulations made under the amendments in the 2006 Act. The safety-critical functions are already set out in the existing offences and powers that I mentioned.

The draft regulations we are considering today specify these aviation and marine functions and are based largely on existing safety-critical duties relating to aviation or shipping. The duties specified in the regulations reflect the wide range of duties undertaken in a military environment that are linked to aircraft or ships: for instance, maintenance; acting as crew on an aircraft or ship; loading and unloading fuel, cargo and weapons; and conducting hazardous operations such as parachuting or diving. The duties specified in regulations include similar functions carried out by civilians subject to service discipline. This would include, for example, any civilian working on an aircraft or ship overseas.

In the event of an accident, a commanding officer may require a person to co-operate with preliminary testing if he or she was carrying out, or had carried out, a specified function at the time of—or in some situations before—the accident. As I said, the testing will be carried out by the service police. It will be an offence for an individual without reasonable excuse to fail to provide a sample when required to do so. Reasonable excuse could include, for example, a medical condition that prevented a person from providing a breath sample.

We hope, of course, that serious accidents will not happen and that there will be no need to apply these regulations. But the very nature of military activity is, by necessity, dangerous, and our people are exposed frequently to risk. It is important that, in the event of a serious accident, we uncover whether alcohol or drugs may have contributed to the cause of an accident to enable appropriate corrective action to be taken. I beg to move.

[Baroness Smith of Newnham (LD)]

My Lords, I was nominated to speak from the Front Bench this evening and have very little to say on this matter. The regulations seem to be admirably sensible and not overly draconian. In civilian life, if there were an accident in a similar situation, one would expect to be breathalysed. Therefore, we on these Benches have nothing to add.

Afghanistan Update

Baroness Smith of Newnham Excerpts

Wednesday 11th July 2018 Lords Chamber

[Lord Tunnicliffe (Lab)]

My Lords, I thank the Minister for repeating the Statement, and join him in paying tribute to those who have served in Afghanistan. We remember in particular the 456 service personnel who died and those who have suffered life-changing injuries.

I too believe that Afghanistan is a better place as a result of our efforts. We have achieved this through co-operation with our NATO allies. Nevertheless, a further commitment of 440 personnel is significant, and it is our duty to probe this. Noble Lords will understand that 440 on the ground will involve many times that number, as personnel are trained, deployed and rested.

It is appropriate to pause at this point. We will be sending people into harm’s way, and we civilians do not really understand what that is like. This place is enriched by the number of people who have done that; we even have one who has been in harm’s way. Afghanistan is a dangerous place, and NATO personnel were killed in the early days of these training missions. I wonder whether the Minister can give us a sense of the risk involved by telling us how many NATO personnel have been killed since the end of NATO ground operations, which I believe was at the end of 2014.

I shall now turn briefly to the Chilcot inquiry, if I may. I am told that it contained 2.4 million words, but I felt that it really had only two key recommendations: first, that the decision to commit military personnel should be taken by due process; and secondly, that before taking the first step one should have a plan for the second and subsequent steps.

On the first step, can the Minister explain the process by which the decision was made? Who was involved? Was the FCO or DfID part of the decision? Was the Prime Minister? What criteria were set to measure success? How were the risks to our troops’ lives assessed? Can the Minister assure us that the risks are indeed minimal, and that there are no scenarios in which our people will be drawn into combat operations?

Secondly, how long will the deployment last? Is there an end date, or at least a set of criteria to measure success and, hence, lead to withdrawal? Have all scenarios been considered?

We all hope and pray that the mission is successful but, sadly, history is littered with limited military interventions turning into full-scale war. Can the Minister assure us that in no circumstances will that be allowed to happen? I have complete faith that our people will be able to help the Afghans fight more effectively, but could the Minister give us more detail on the training that will be provided? Will it be complemented by softer essential skills such as policing, particularly with respect to corruption, and governance? Will the further input to produce those skills come from the FCO and DfID, or will our allies provide the resource?

[Baroness Smith of Newnham (LD)]

My Lords, like the noble Lord, Lord Tunnicliffe, I thank the Minister for repeating the Statement, and I echo the words of the Secretary of State and the noble Lord, Lord Tunnicliffe, on the commitments that this country has made to Afghanistan and the tributes paid to the service men and women who have given their lives in Afghanistan.

This is clearly a serious decision that is being announced today. As the noble Lord, Lord Tunnicliffe, pointed out, 440 service personnel is a significant number. It increases the personnel that we currently have in Afghanistan by two-thirds. It is noticeable that the decision has been made, we are told, in response to a NATO request, at the time of a NATO summit and on the eve of a visit by the President of the United States. What is not clear is when the request was made. When was the United Kingdom asked to make this additional commitment and when was the decision actually taken? Is the confluence of timings just ahead of the NATO summit intentional? Is it intended in any way to send a signal to the President of the United States that the United Kingdom at least is keeping up to its NATO targets?

There is a whole set of other issues associated with the nature of the contribution and some of the key decisions that need to be considered, which, as the noble Lord, Lord Tunnicliffe, has pointed out, have not necessarily been answered in the Statement. How long is this additional deployment intended to be? We have been told that about half the troops are due to be deployed in August 2018 and the rest by February 2019, but we are not told how long this is intended to last. The more deployments that we have, the more questions there are about the sustainability of deployments and the pressures put on Her Majesty’s services. While we pay tribute to the service men and women who are deployed to Afghanistan and everywhere else around the world, there is a question of the impact that this will have on forces morale. Is the Minister content that the resources are there to ensure that this additional deployment can be managed? Can he tell us a little bit more about what the Government’s exit strategy might be?

Finally, the Secretary of State commented that this shows our commitment to NATO, which,

“must remain the cornerstone of our defence”.

Nobody in your Lordships’ House would disagree with that, but does the Minister think that the President of the United States feels similarly? What discussions might the Prime Minister have with the President to try to ensure that, by the end of this week, the United States’s commitment to NATO is strong as that of the United Kingdom?

[Earl Howe]

My Lords, I thank the noble Lord, Lord Tunnicliffe, and the noble Baroness, Lady Smith, for their support for this announcement and, indeed, for their well-directed questions. Some of the questions from both noble Lords coincided, and I shall attempt to address them all in turn.

The noble Lord, Lord Tunnicliffe, asked me about the process that led to this decision. He is absolutely right to remind the House of the lessons from Chilcot, and that there needs to be a formal deliberative process across government for a decision as momentous as this—and that is indeed what happened. The UK was initially asked to consider this additional deployment in March of this year—that request came from NATO itself. We subsequently did so; that is to say, the Ministry of Defence considered the feasibility and a decision, following a discussion, was taken formally by the National Security Council on 26 June. It was then endorsed formally by the Treasury and by No. 10.

The noble Baroness, Lady Smith, was again correct to make the point that the decision to do this was based not only on the fact that we thought it was the right thing for Afghanistan, for the UK and for NATO, but that it was intended—as I hope it will—to underline our commitment to NATO and the fact that Britain has particular skills that it can offer in a context such as this. I am sure that that message will not have been lost on any of our NATO partners.

The noble Lord, Lord Tunnicliffe, made the perfectly fair point that we will be sending troops into harm’s way. I would, however, just qualify that by making clear, as the Statement does, that the roles that are being and will be performed by our personnel in Afghanistan are non-combat roles. They are therefore quite distinct from the kind of role that we saw being performed under the ISAF banner before 2015, when our troops were very definitely on the front line against the Taliban. Chiefly, our troops will be charged with supplementing the Kabul defence force within Kabul itself. We have to remind ourselves that the NATO mission operates under the banner of “Train, Advise, Assist”. The UK contribution will therefore be to support that NATO mission but—to come back again to a point made by the noble Lord, Lord Tunnicliffe—the safety and security of our troops remains, as it always will, our key priority. We keep the protection measures for our personnel under constant review and will not hesitate to adapt those measures to the changing threats. They are benefiting from bespoke equipment, such as the Foxhound armoured vehicle, which is suited to the streets of Kabul. Essentially, as far as force protection is concerned, our personnel are equipped and mandated to protect themselves, as well as to protect coalition and diplomatic personnel. It is the Afghan national defence and security forces which are responsible for maintaining security in Kabul.

Both the noble Lord and the noble Baroness asked about the timescale. I hope that they will understand that it is not possible to put a timescale on the deployment of our troops within the NATO mission in Afghanistan. All NATO allies are agreed that we will continue to support the Afghan national defence and security forces until the conditions are right for our collective withdrawal, which includes the ability of the Afghan forces to protect the people of Afghanistan without support from international forces, and when progress has been made on a peace process.

The noble Baroness—and, I think, the noble Lord—asked what kind of training we are delivering in Afghanistan. As I have already said, the mission goes under the strapline “Train, Advise, Assist”. The UK is mentoring and advising Afghan personnel, helping to develop capable and independent Afghan government and security structures, and working in the mission headquarters and the Afghan security ministries. An example of this is at the Afghan national army officer academy, where we are working alongside our NATO allies and Afghan partners to produce the next generation of Afghan military leaders.

Finally, the noble Baroness asked about the messages that we wish to deliver this week at the NATO summit. We have a number of objectives for that summit. Essentially, they can be summarised as making NATO more modern and adaptable. NATO continues to adapt to ensure that it is less bureaucratic, better at prioritising its activity and more capable of taking and implementing decisions quickly. The principles for all those things were largely agreed at the NATO summit in Cardiff and endorsed at the subsequent summit in Warsaw. We are confident that allies will agree ways to deliver those objectives, with the aim in view of strengthening deterrence and defence against Russia, increasing our efforts on tackling terrorism and addressing the threats presented by cyber and hybrid warfare. That very much relates to how we can improve readiness so that we can make sure that we have the right forces in the right place so that they can act when needed to protect our people. I believe that the UK already has an important part in that process, supporting the design of a new NATO command structure, and I think that we can be very proud that we will be committing an extra 100 posts to that structure, taking our commitment to over 1,000 UK service personnel.

Single Source Contract (Amendment) Regulations 2018

Baroness Smith of Newnham Excerpts

Monday 9th July 2018 Lords Chamber

[The Minister of State, Ministry of Defence (Earl Howe) (Con)]

My Lords, a substantial proportion of the MoD’s annual procurement spend, amounting to some £8 billion a year, goes on single-source contracts. Given this level of expenditure, it is critical that the department obtains value for money. It is also critical that we protect the long-term future of the defence industry by ensuring that suppliers get a fair return on single-source work.

When the noble Lord, Lord Currie, produced his independent report on non-competitive defence procurement in 2011, he concluded that the arrangements then in place were simply unfit for purpose. The result was a weak negotiating position for the department and poor value for money for the taxpayer.

Following the noble Lord’s report, in 2014 we introduced a new framework as part of the Defence Reform Act. Our intent was clear: the new framework sets out firm rules on pricing single-source defence contracts and puts the onus on suppliers to demonstrate that their costs are “appropriate, attributable and reasonable”. Where there is a dispute, either party can refer the matter to an impartial adjudicator, the Single Source Regulations Office, for a decision.

Since coming into force in December 2014, the new framework has made considerable progress: more than £19 billion-worth of single-source contracts have been brought under the framework, and the benefits to the MoD have been significant.

However, any new regime of this complexity needs to be refined in the light of experience. The Act therefore requires the Defence Secretary to carry out a thorough review of single-source legislation within three years of the framework coming into force. This review was completed in December 2017 and several proposals were identified as potential improvements to the framework. We have incorporated the first of these into the SI under consideration, but we plan to introduce further amendments later in the year.

The main amendments under consideration here relate to those types of single-source contract, known as “exclusions”, which cannot become qualifying defence contracts. Experience in implementing the framework has shown that there is some confusion about how such exclusions are applied and that some contracts, relating to intelligence and international co-operative programmes, are being unnecessarily excluded. We therefore propose a clearer and more precise definition of these two categories.

We are also adding a further category of exclusion to deal with situations where contracts are transferred from one legal entity to another, such as where an internal restructuring of industry has taken place. In such cases, although the legal identity of the supplier may have changed, the contract itself has not otherwise changed in a material sense.

We have engaged extensively in drafting these amendments and believe that the proposals will be generally welcomed by suppliers. I beg to move.

[Baroness Smith of Newnham (LD)]

My Lords, I am grateful to the Minister for introducing this statutory instrument and apologise for arriving momentarily after he started. He mentioned that the changes introduced in 2014 were intended to improve value for money and MoD procurement arrangements in general and that, since then, £19 billion had been spent using the single-source procurement mechanism. Will he explain a little more how the changes proposed in the SI will benefit the MoD and the taxpayer? I heard him say that the changes will be of benefit to the supplier. While we do not want to do down the suppliers, it would be helpful to understand how the changes will benefit the taxpayer as well.

[Lord Tunnicliffe (Lab)]

My Lords, I thank the Minister for presenting the regulations. Part 2 of the 2014 Act and the subsequent Single Source Contract Regulations 2014 are supported by these Benches. Unfortunately, I have lived through every bit of their creation and evolution. The key thing is: are they effective? The way to judge their effectiveness is, first, to understand the mechanisms, which the Minister has been invited to expand on, and, secondly, to look at how extensive they are. Does the Minister have at hand how much is being spent on equipment and infrastructure in a typical year, say, 2017-18? How much of that is single sourced? I believe the answer is nearly half. What proportion—and this is the key issue—are qualifying defence contracts? I wonder if he has similar figures for contracts with BAE.

The Explanatory Memorandum says that three of the five categories are “working well”, meaning that they describe the exclusions clearly. Two relate to land, I believe, and the third to government-procured equipment. Three are new or modified. The first, Regulation 7(b), is where there is international co-operation. The modification is that there should not be an exclusion if all parties agree. I have great trouble working out why parties would want to agree, because the mechanism is designed to give the Government, the SSRO, the MoD or whoever a better understanding of what is happening in the contract, giving them rights to challenge the suppliers. Why would anybody want to agree to this? Have any firms actually agreed to this?

The second modification relates to “intelligence activities”. This is clearly a case of unintended consequences because all intelligence activities are currently excluded. This turns it on its head to require only those contracts that are a risk to national security to be automatically excluded. Paragraph 7.9, I think, of the Explanatory Memorandum effectively defines “risk to national security”; that is, reports that would normally be required by the SSRO would contain information above a certain security level. Am I right in that understanding? Am I right that the key test will be the security level of the information that the SSRO would naturally demand if they became qualifying contracts? Otherwise, how is national security defined and who defines it?

The final modification relates to what one might loosely describe as novation. That does not give me any pain at all.

The key question about the modifications is: how many more, or what greater proportion of, single-source contracts will be brought into the ambit of the Single Source Regulations Office by these changes? Will the number be trivial or substantial? My final question relating to the order is: when will the MoD respond to the other SSRO recommendations?

Lastly, I have a question that is completely out of order. I point out to the Minister that the NATO summit is, I think, on Wednesday and Thursday. Will he give some indication of when he will give an overview of the defence modernisation programme promised before the NATO summit?

Defence Review

Baroness Smith of Newnham Excerpts

Thursday 18th January 2018 Grand Committee

[The Lord Bishop of Portsmouth]

My Lords, I confide in you. Priests—even bishops, perhaps particularly so—are inclined to repeat themselves. I imagine noble Lords might have noticed. I have heard it said that we have only one sermon in us and just dress the message up differently each Sunday. I will be repeating my message today, and I am grateful to the noble Lord, Lord Sterling, for the opportunity to do so. I am just as grateful to the noble Earl, Lord Howe, for listening to my repetition with the grace, care and attention that we all appreciate.

My message is that I applaud the Government’s ambition for defence, which is about British power for good in the world—but as things stand, I doubt that we have the capability, or the defence budget to deliver the capability, to meet that ambition. Things could be about to get worse, judging by what we read in the media. So, if we are to meet the Government’s ambition, we must also review our ability to do so.

My second point is that the present state of uncertainty is not helpful, and that is an understatement. The media is not the forum in which to conduct discussions on defence expenditure. We should have discussions in private, followed speedily by clarity in public. That would be fair to those who are affected, so they know where they stand. The current lack of clarity creates uncertainty, particularly among the servicemen and women we value so much.

My final point is also on morale. The noble Earl may have an inkling of the direction in which I am heading. I hope that he will be able to respond to my question on whether he can commit to a debate on the Floor of the House on the Armed Forces covenant—an opportunity to pat the Government on the back for all that has been done and to look forward to all that might be done. When it comes to defence, our greatest riches are the commitment, sacrifice and professionalism of our Armed Forces. We need to provide them with resources and end this ghastly uncertainty.

[Baroness Smith of Newnham (LD)]

My Lords, like other Members of your Lordships’ House, I am most grateful to the noble Lord, Lord Sterling. Oh, have I jumped ahead? I am so sorry.

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[Baroness Smith of Newnham]

My Lords, first, I apologise to the noble Lord, Lord Freeman, for jumping the gun. I was so keen to put my stopwatch on and make sure that I did not do more than my two minutes that I will misuse a few of my seconds now in apologising. I thank the noble Lord, Lord Sterling, for making sure that your Lordships’ House keeps coming back to the question of defence and defence expenditure. As he said, in the other place last week there was an excellent debate on defence where all the contributors, from whichever part of the other place, made clear their commitments to the Armed Forces and defence expenditure.

For slight reasons of getting the list wrong—it is not just me today—I do not speak as the Liberal Democrats Front-Bench speaker at the end of the list. However, on behalf of the Liberal Democrats, I want to reconfirm that we are still committed to 0.7% of GDP going to development aid. My noble friend Lord Lee made very good points about defence expenditure, but he maybe is not putting forward the party line on development aid.

We are deeply concerned about expenditure. I seem to recall that in the aftermath of the referendum the Minister repeatedly told us that defence expenditure was essentially hedged and would rise in real terms, yet that is not the advice that we seem to be given now. What commitment can he give us that defence expenditure will be ring-fenced in real terms? The right reverend Prelate the Bishop of Portsmouth rightly mentioned morale in our Armed Forces. What is the Minister doing about the offer in terms of pay and pensions, and to what extent does he think morale is in the right place? Can more be done? In particular, can he reassure us that adequate training will be given, including extreme-weather training for the Royal Marines, and that the Royal Marines’ position in our Armed Forces remains absolutely secure?

National Security Capability Review

Baroness Smith of Newnham Excerpts

Monday 15th January 2018 Lords Chamber

[Earl Howe]

My Lords, yes, that is the conclusion that we and previous Governments have reached as the minimum practicable and credible force required to deliver continuous at-sea deterrence.

[Baroness Smith of Newnham (LD)]

My Lords, the Secretary of State makes a commitment to protecting the north Atlantic. Is he also concerned about the south Atlantic, or should the Falklands be concerned?

[Earl Howe]

Yes, my Lords, and nothing I said should be taken as any indication that we will cease to keep a firm eye on the defence of the Falkland Islands, which we will continue to do.

Royal Marines

Baroness Smith of Newnham Excerpts

Tuesday 28th November 2017 Lords Chamber

[Baroness Smith of Newnham (LD)]

My Lords, like all noble Lords who have spoken this evening I thank my noble friend Lord Burnett for securing this incredibly important debate. Unlike other noble Lords who have spoken, I will also apologise to him for passing a note from the Whips saying, “Time’s up”. If my noble friend had sat on the Back Benches and hidden away, he might have avoided the Whips’ note. I have never been asked to be a Whip and I believe that is because my party has understood that my timekeeping is always a bit off, so I was a little embarrassed to be the person passing the note. I also note that the Whips have come in force to make sure that I do not do more than my five minutes.

[Lord Burnett]

I did not take any notice anyway.

[Baroness Smith of Newnham]

The Royal Marine Commando mindset is: be the first to understand, the first to adapt and respond and the first to overcome. These are all incredibly important, but the Royal Marines can do those things only if there are Royal Marines in sufficient numbers. It is absolutely clear that across your Lordships’ House and in the other place there is considerable concern about the rumours of further cuts to the Royal Marines. Back in April, the First Sea Lord suggested that the Royal Marines had decided to restructure to better balance skills across the force. Can the Minister tell us whether the Royal Marines indeed decided to restructure, or were they forced to restructure because of financial matters? Are the Royal Marines being adequately resourced? Does the MoD view the Royal Marines as the jewel in the crown of our Armed Forces?

Many Members have mentioned extreme weather training and going to the high north. I had the opportunity to go to northern Norway in February to visit the Royal Marines doing their training. It was illuminating to discover just how important the Royal Marines’ training is, not just for our forces but to our Norwegian and American allies. The idea that training is being reduced is a considerable worry. If we are not able to provide the training that we have been doing, what are the Royal Marines going to provide instead? It is particularly concerning to hear that the Royal Marines Reserve is no longer going to be allowed to go overseas to train. Can the Minister tell us precisely what the Government are expecting to do with the Royal Marines? Can he reassure us that there will not be cuts either to numbers or to the training, which is so important? The Arctic, jungle and desert training are all vital. We have troops who are second to none but every cut weakens our reputation.

As so many Members have said, this is a time of considerable threats. If we take away the training in northern Norway, what message does that send to our NATO allies and to Russia? Presumably not the message Her Majesty’s Government intend to send. The security threats that we face in 2017 are not reducing; if anything, they are getting greater. Leaving the European Union will not reduce any threats. If anything, the need to co-operate with our NATO allies will make it even more important that we work closely together. Our second-to-none Royal Marines should be a fundamental part of that.

On almost everything, these Benches can agree with the mood of the Chamber. But there is one area where it is important to suggest that the Liberal Democrats cannot quite agree with every view. We are committed to defence and we would like to hear that Her Majesty’s Government remain committed to defence expenditure, but we are also committed to international development. Development and defence go together, as we saw recently in the way that we reacted to the hurricanes. Does the Minister agree, and will he reassure the House that aid and defence will go together and that there will be no cuts to the Royal Marines?

Armed Forces (Flexible Working) Bill [HL]

Baroness Smith of Newnham Excerpts

Report stage (Hansard): House of Lords
Wednesday 11th October 2017 Lords Chamber

[Lord Touhig (Lab)]

My Lords, Amendments 1, 2, 4 and 10 will, if agreed, mean that regulations made necessary by the passing of this Bill will be subject to the affirmative procedure. It was a point well debated in Committee, and I do not need to rehearse those arguments again at length. It is worth pointing out, however, that the Delegated Powers and Regulatory Reform Committee, following its consideration of the Bill, stated:

“The Bill will confer novel and broad powers on the Defence Council to make provision for part-time service … These powers are conferred without any detailed provisions on the face of the Bill limiting or restricting how the powers are exercised. In the circumstances we consider that the affirmative procedure should apply, and that this is so despite the fact regulations under section 329 of the Armed Forces Act 2006 are generally subject to the negative procedure”.


I believe that there is agreement across the House that the Government should heed the committee’s recommendation. I thank the Minister for his willingness to engage in discussions, both in Committee and outside, on this matter and for his undertaking that the Government are listening to the comments that are being made.

This Bill introduces provisions enabling the Defence Council to make regulations regarding part-time working and the new forms of geographically restricted service. The Defence Council will also be able to make regulations setting out the circumstances in which agreements can be varied, suspended or terminated. The provision in the Armed Forces Act 2006 that governs the parliamentary procedure to which regulations are subject is Section 373. At present, any regulations made under Section 329 are subject to the negative procedure. However, our amendments will ensure that any regulations made under the new sections to be inserted by this Bill will be subject to the affirmative procedure. Section 373(3) sets out which regulations made under the 2006 Act are subject to the affirmative procedure, and the amendment inserts reference to regulations under the Bill into that list. The amendments also amend the wording of Clause 3(6) of the Bill to reflect the fact that Clause 1 now amends two sections of the Armed Forces Act 2006 and not just one. I beg to move.

[Baroness Smith of Newnham (LD)]

My Lords, I rise to speak to the amendments, particularly to Amendment 8 in my name and that of my noble friend Lady Jolly. My comments will be very much in line with the words of the noble Lord, Lord Touhig. In Committee, the Minister said:

“I am not in a position today to give any undertakings on the substance of this issue, but I undertake to reflect further on the matter in a constructive way ahead of Report”.—[Official Report, 12/9/17; col. GC 85]


If constructive reflection has occurred, it has not been visible in the form of any government amendment. Could the Minister explain to the House why no government amendment has been forthcoming and, in the absence of that, why noble Lords should not accept either the amendments of the noble Lord, Lord Touhig, or that of my noble friend Lady Jolly?

[Earl Attlee (Con)]

My Lords, to answer the noble Baroness, I suspect we are going to find out very shortly.

An essential characteristic of any good parliamentarian is curiosity, so I can understand why many noble Lords would like to debate the first relevant new Defence Council Instructions before they are implemented. However, in the future it may become apparent that it would be appropriate to make a slight amendment to the regulations concerning flexible working in order to make them work better, be fairer to service personnel or for some other desirable reason. Unfortunately, no such amendment is likely to be made unless it is absolutely essential. The reason is that, thanks to these amendments, an affirmative order will be needed and the MoD will simply not bother with it—it is just too much trouble, unless it is absolutely essential.

Why, then, is my noble friend likely to acquiesce to these amendments? The answer is that he will have told his officials that they have only one shot and they must get the regulations right first time. In short, my noble friend probably thinks that no amendments to the regulations will be needed for a long time, so it does not really matter. Unfortunately, these amendments would make the parliamentary scrutiny of Section 329 of the Armed Forces Act entirely inconsistent, as recognised by your Lordships’ DPRRC’s first report. The fact that a power is novel—in other words, innovative and broad—does not necessarily mean that it should attract the affirmative procedure; what really matters is if there was likely to be any difficulty with it.

The Bill and the subsequent regulations under Section 329 provide flexibility for service personnel, and that can only be positive for them as it will enable certain of them to continue to serve when otherwise they would have to consider leaving the services. However, any of these regulations under the Bill will attract the affirmative procedure.

Contrast the flexible working provisions that we are talking about with, for instance, Section 329(2)(d), which I suspect enables Defence Council regulations to impose golden handcuffs on a service person in exchange for attending a desirable course. For instance, if a soldier has completed his minimum term of service, he or she might want to be considered for training as a helicopter pilot. Quite understandably, the MoD would want to prevent that new pilot from leaving for civvy street immediately after qualification—hence the need for the golden handcuffs. But what if the MoD is experiencing a shortage of helicopter pilots? As far as I can see, the Defence Council could retrospectively increase the period for the golden handcuffs. However, these regulations, which could be very tough, are made under the negative procedure.

If we accept these amendments—as I expect we will—not only will we make the parliamentary scrutiny of Section 329 of the Armed Forces Act entirely inconsistent but we will be getting ourselves deep into the weeds. Apparently, the MoD is considering whether two landing platform docks should be taken out of service, while your Lordships want to look at the minutiae of flexible working for a few service personnel. If we can trust Ministers and the Defence Council to make really difficult strategic or operational decisions, sometimes on a very short timescale, I think that we can safely allow them to amend the original flexible working regulations on their own.

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Moved by

[Baroness Smith of Newnham]

9: After Clause 1, insert the following new Clause—
“Accommodation
After section 329 of the Armed Forces Act 2006 insert—“329A Accommodation(1) A person to whom section 329(2)(ha) applies is entitled to service family accommodation or single living accommodation.(2) Six months after section 329(2)(ha) comes into effect, and every three years thereafter, the Secretary of State must lay a report before both Houses evaluating the impact of that section on family accommodation and single living accommodation, and providing information on future accommodation needs in the light of trends of serving on a part-time basis.””

[Baroness Smith of Newnham]

My Lords, this amendment, too, replicates an amendment that was brought in Committee and refers to an issue that is fundamental to recruitment, retention and forces’ welfare, as well as the welfare of forces families: accommodation. In his response in Committee the Minister suggested that the numbers of people who might avail themselves of the opportunity to work part-time under the arrangements of the Bill would perhaps be sufficiently limited that they would not impact on forces accommodation. The idea was welcomed that all members of Her Majesty’s forces, whether full-time or part-time, if they are regulars, would be entitled to the same accommodation provisions.

However, if more people are acquired because some people work part-time, so that you might have three people instead of two people doing the job, each of those individuals would be entitled to accommodation, and at some point this might have an impact on the requirement for accommodation as a whole. Clearly, as the Minister stated in the discussion on Amendment 7, there may be cases where this will be overcome by Help to Buy and through the new employment model. However, to the extent that this is not the case, it is hugely important for service men and women and their families to believe that Her Majesty’s Government will provide adequate accommodation for them.

For that reason, we have again tabled an amendment on accommodation, both to restate that service men and women who avail themselves of this flexible model are entitled to appropriate family accommodation or single-living accommodation, and, perhaps more importantly in the longer term, to have certainty that the Government are reviewing what forces accommodation is available and whether it will be suitable for the number of service men and women we have.

One of the key things is what is available and habitable and the extent to which the accommodation, and the maintenance contracts which deal with it, are fit for purpose. We have been told on various occasions that CarillionAmey now meets its key performance indicators, yet there are still many complaints. If it meets its key performance indicators, does that mean that they are not the right ones? While this might not be the appropriate amendment to bring that forward, it would be welcome if the Minister could at least explain when we might be able to discuss such things.

[Lord Touhig]

My Lords, I am grateful to the noble Baronesses, Lady Smith and Lady Jolly, for tabling a further amendment on service accommodation. As the noble Baroness, Lady Smith, noted in Committee, there are already significant pressures on service accommodation, and that is before we even begin to consider the move to the future accommodation model from 2019.

I will not go into the detail about our concerns on the future accommodation model, but clearly there are urgent questions for the Government to answer on how the Bill will affect personnel who rely on service accommodation, particularly when the system is shaken up. There will also be more questions for the Government to answer in the future as the new system is rolled out. I am therefore glad to see the addition of the second part of Amendment 9, which would require the Secretary of State not only to provide a periodic snapshot but to be proactive in anticipating future accommodation needs. I hope that the Minister will provide us with some answers—perhaps in a further round of letters before Third Reading—and offer a firm commitment; it is important that these things are reported back to Parliament.

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I am very willing to have a meeting with the noble Baroness to discuss repairs and maintenance of the defence estate, which falls slightly outside the scope of her amendment, but I hope that, for the purposes of the amendment, she has been reassured by what I have been able to say today and that she will agree to withdraw it.

[Baroness Smith of Newnham]

I thank the Minister for his very full reply. It would be nice to think that Her Majesty’s Government as a whole and, in particular, the Chancellor of the Exchequer will ensure that the money put aside for defence will enable all those words to be brought about in practice and that we do not need to worry about the money that will be put aside for accommodation. In the light of the discussion about the future accommodation model, the idea that proposals will come forward later in the year and the suggestion of putting questions into the Armed Forces covenant report, I am content to withdraw the amendment. However, I should very much like to take the Minister up on his suggestion of a meeting.

Amendment 9 withdrawn.