LGBT Veterans: Financial Redress

Earl of Minto Excerpts

Thursday 21st March 2024 Lords Chamber

[Lord Cashman]

To ask His Majesty’s Government when they expect to have implemented Lord Etherton’s recommendations on financial redress in the LGBT veterans independent review.

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

My Lords, defence has accepted the recommendation of a financial award, as proposed by the notable review from the noble and learned Lord, Lord Etherton, and is working with experts across government to establish an appropriate scheme, acknowledging that the process is intricate. Defence is committed to maintaining the momentum of the review and honouring all commitments made in the Government’s response, published in December 2023. Work continues to deliver the financial scheme by the end of 2024, and I commit to updating the House on the design of the scheme before the Summer Recess.

[Lord Cashman (Lab)]

My Lords, I thank the Minister for that response. This country’s treatment of LGBT armed services personnel has indeed been shameful, and the longer it takes to implement the financial elements of the report from the noble and learned Lord, Lord Etherton, the worse it gets. The Government have had the report for a long time. They accepted it in July, but we still have no financial redress for these veterans, whose careers were ruined, whose employment prospects were damaged and whose service pensions and benefits were denied. Many are now in their senior years and living in hardship. Therefore, I ask the Government at the very least to commit to an operational date for the financial redress scheme and, if they cannot do that, to update the House, as the Minister has said, at least within three months of this Question.

[The Earl of Minto (Con)]

My Lords, I certainly commit to updating the House on that latter point. I think all sides are vigorously agreed on this important issue: the treatment of LGBT serving personnel between 1967 and 2000 was wholly, wholly unacceptable. There is just no question about that. But the situation today is very different, and we are trying to address the wrongs of the past as rapidly and practically as we can. We are working across government to deliver all 49 recommendations as effectively, practically and expeditiously as possible.

[Lord Lexden (Con)]

My Lords, do the Government realise that there is grave anxiety among brave and unjustly treated LGBT veterans, because Ministers do not seem to have accepted in full the central recommendation of the noble and learned Lord, Lord Etherton, that claims for financial compensation should be met unless the Government can

“disprove the evidence of the veteran making a claim”?

Since so many of the relevant records have been destroyed by the MoD, would it not be quite wrong to place the burden of proof on veterans? Is it not indefensible that severe financial hardship should be endured by veterans such as Mr Joe Ousalice, now suffering from terminal cancer, who was sacked simply because he was gay after giving nearly 18 years loyal service to the Navy?

[The Earl of Minto (Con)]

My Lords, nobody can do anything other than agree with my noble friend. The progress we are making is as we set out after we received the review and considered it in December. Since that time, 26 of the 49 recommendations are now complete, eight remain to be completed by the Ministry of Defence, 12 remain to be completed by the NHS and three remain to be completed by the Office for Veterans’ Affairs, which is all about the very important memorial issue. The door has opened to the extremely important webpage “LGBT veterans: support and next steps” on GOV.UK—I will repeat this as often as I can. We have now had over 2,000 contacts, which have so far resulted in 415 applications to date for restorative measures, including financial measures.

[Baroness Smith of Newnham (LD)]

My Lords, there is something of a pattern here. When His Majesty’s Government pledged to make recompense to the war widows, there was an assumption that something would happen, but we heard a few weeks ago that some of the war widows were no longer eligible for the money they thought they were going to receive. We are now hearing that His Majesty’s Government are spending time creating a scheme for LGBT veterans. That is clearly welcome, but, as we have heard from both sides of the Chamber, there is an urgency about this, because some of the veterans have terminal illnesses. They and their families need to know that they are going to be recompensed sooner rather than later. Can His Majesty’s Government make a commitment to come back not just with another Statement but with the scheme that is needed?

[The Earl of Minto (Con)]

My Lords, I am fully aware of the war widows issue and we are addressing that at the same time. It is very important that all these things get finished off as quickly as we possibly can. As far as the content is concerned, I have given a commitment that I will return before the Summer Recess. That will not be another Statement; it will contain what the process is going to be.

[Lord Griffiths of Burry Port (Lab)]

My Lords, I am happy to pay tribute to the Minister for the commitments he has made openly, both to the Question we are discussing and to the modes by which he will deliver further progress on this issue. He will have noticed, in the way the Question was formed, that my noble friend Lord Cashman has used the future perfect of the verb. In other words, will it be enough to hear an update on what is happening, or do we all long for the day when we know what has happened?

[The Earl of Minto (Con)]

My Lords, we come back to grammar. We are all on the same page on this. Everybody is in full agreement, but we have to make certain that it is done fairly, that everybody who has the right opportunity to apply gets that opportunity, and that the compensation and other restorative measures are available to everybody concerned at the appropriate time.

[Lord Lancaster of Kimbolton (Con)]

My Lords, I remind your Lordships’ House of my interest as a serving member of the Armed Forces. It is imperative that our Armed Forces are representative of the society they seek to protect. While there has been significant progress in recent years when it comes to the recruitment of women and ethnic minorities into the Armed Forces, much work still needs to be done. The Royal Air Force has been an exemplar in this area. So can my noble friend simply reassure your Lordships’ House that this remains a priority for His Majesty’s Government?

[The Earl of Minto (Con)]

My Lords, I can do no more than assure the House that it is indeed an absolute priority for the Government.

[Baroness Anderson of Stoke-on-Trent (Lab)]

My Lords, I remind your Lordships’ House of my registered interests, specifically my roles with the Royal Navy. I also put on record our thanks to my friend, the noble Lord, Lord Cashman, and to the noble and learned Lord, Lord Etherton, for everything they have done to keep this issue on our agenda.

Fighting With Pride has done an extraordinary job of raising the horrendous experiences of LGBT+ veterans who served prior to 2000, and I thank the organisation for its service. It is the least that we owe it, and the veterans it serves, to enact every recommendation in the review of the noble and learned Lord, Lord Etherton, especially recommendation 28. Can the Minister update us on whether the planned financial redress will be a blanket amount per affected veteran, or whether it will—as requested by Fighting With Pride—be applied on a case-by-case basis?

[The Earl of Minto (Con)]

My Lords, when it comes down to it, it must be on a case-by-case basis, because a lot of the information that we have available to check and re-check exactly who has been so badly dealt with is either missing or not particularly accurate. I say again that anybody who has any interest in this should apply on the “LGBT veterans: support and next steps” page on GOV.UK. So far, we have only had just over 400 applications, which is less than we thought. We really want to make certain that this is absolutely comprehensive and that everybody gets paid—and all the other restorative measures, which are just as important, are taken—as quickly and practically as possible.

[Lord Cashman (Lab)]

My Lords, it is commendable that 26 recommendations have been adopted, but does the Minister agree that, without the financial element, it could be seen as window dressing? Difficult though it is, the Canadian Government turned around a much larger scheme with a much larger cohort within four months of receiving their report. I am mystified as to why the MoD cannot do the same.

[The Earl of Minto (Con)]

My Lords, the Canadian example is apposite but very different. The Canadian Government took a very clear administrative approach, which addressed a specific number of people, where they already had the information. We are not in that position, and it is important that we catch everybody who is likely to be affected, to make certain that justice and the right thing are done.

Single Source Contract (Amendment) Regulations 2024

Earl of Minto Excerpts

Wednesday 20th March 2024 Lords Chamber

Moved by

[The Earl of Minto]

That the draft Regulations laid before the House on 22 January be approved. Considered in Grand Committee on 19 March.

Motion agreed.

Single Source Contract (Amendment) Regulations 2024

Earl of Minto Excerpts

Tuesday 19th March 2024 Grand Committee

Moved by

[The Earl of Minto]

That the Grand Committee do consider the Single Source Contract (Amendment) Regulations 2024.

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

My Lords, since their introduction through the Defence Reform Act 2014, the Single Source Contract Regulations have generally worked well and helped ensure that the prices paid for single source contracts both are reasonable and reflect good value for taxpayers’ money.

There are now some 575 contracts under the regime, with a total value of more than £90 billion. However, any set of regulations needs to adapt as the environment changes. In this case, we have found that the rules continue to work well for traditional defence procurement —for ships, submarines, aircraft and so on—but less well for sectors such as software. Moreover, the imperative to procure things more quickly means that we sometimes need to buy “off the shelf” items without running a competition, either because we need compatibility with existing systems or because we simply do not have any time.

To address this, we completed a detailed statutory review of the regime in 2022. It proposed a series of reforms in a Command Paper, Defence and Security Industrial Strategy: Reforms to the Single Source Contract Regulations, which was published for consultation in April 2022. The changes made by these amendment regulations are the next stage of implementing those reforms. They will deliver improvements to the regime in three key ways.

First, they will increase flexibility around where the regime can be used to ensure that more defence contracts can be single sourced without compromising assurance on value for money and fair prices. The amendment regulations introduce a number of alternative ways of pricing a single source defence contract, most significantly by allowing prices to be set with reference to market rates rather than always having to use the bottom-up default pricing formula. Another example is where existing UK or overseas laws constrain the way prices are set in a way that is inconsistent with the single source regime. In such circumstance, the amendments will allow the disapplication of the pricing formula to the minimum extent necessary to comply with the other law.

There are also cases where it would be useful to disapply the pricing formula to part of a contract, particularly where a contract comes under the regulations significantly after it was signed. This will avoid the need to re-open the pricing of work that may have been completed and paid for years in the past, and will increase suppliers’ willingness to bring long-running contracts under the regime. The amendments will allow the pricing formula to be applied only to new elements of the contract.

Secondly, the reforms will speed up and simplify the way the regulations work in practice. The legislation currently states that, for contracts that fall under the regulations, a single profit rate needs to be applied to the entirety of the contract when it is signed. For some larger single source contracts, it makes commercial sense to use different pricing types for different elements of the contract, meaning that a single profit rate might be too high or too low for some elements.

These amendment regulations will explicitly allow contracts to be split into different components where it makes sense to do so. They will also simplify the determination of an appropriate profit rate for a contract by reducing the number of steps in the profit rate calculation from six to four. The Single Source Regulations Office funding adjustment will be abolished, and the adjustment made to ensure that profit is earned on a contract only once will be moved from a profit calculation and be considered as part of the assessment of allowable costs for contracts.

--- Later in debate ---

[The Earl of Minto (Con)]

My Lords, I thank noble Lords for their contributions to this debate and say to the noble Lord, Lord Tunnicliffe, in particular that this is a very complicated set of contracts and it took me some time and quite a bit of reading to understand them. But I do understand them and, with great respect, they are very effective indeed.

I think it is worth reiterating that the MoD’s preferred approach to procurement remains through open competition in the domestic and global market. But we are often limited to a single supplier to provide the capability that our Armed Forces need, particularly when we have to produce equipment quickly, as I said earlier, in the face of rapidly evolving threats.

The single source contract regulations are a fundamental part of defence procurement and are key to ensuring value for money. The statutory framework, which has been running for eight years now, sets out clear rules on pricing single source defence contracts that place the onus on suppliers to demonstrate that their costs are appropriate, attributable and reasonable, and defines the level of profit that can be applied. It is only right that we ensure that this framework continues to function effectively for all parties and adapts to changes in what we buy and how we buy it.

As mentioned at the opening of this debate, and by other noble Lords, these reforms are necessary. Adjustments to pricing methods, simplification of processes, correcting profit calculations and ensuring competitiveness with taxpayers’ money are all good reasons why we are here today.

We also need to preserve key industrial and technological capabilities within the UK for strategic reasons. The combination of these factors means that single source procurement amounts to around 50% of defence procurement spent on equipment and services—or some £13 billion per annum. Where there is a lack of competitive pressure, the MoD needs alternative ways of assuring value for money for the taxpayer, while ensuring that our suppliers are paid the fair returns required to preserve their long-term viability.

These amendment regulations, as the noble Baroness pointed out, which are primarily about pricing, will clearly require changes to reporting requirements. Those changes are in this statutory instrument. They should not be conflated with the broader changes to reporting requirements that will be made in the second set of amendment regulations in the autumn. Where it is not appropriate to set out the requirements in legislation, the SSRO is providing two sets of guidance. The first, which covers how suppliers in the MoD should meet the new pricing requirements, was made available to industry on 12 February—pretty recently. The second covers the changes to reporting contained in the statutory instrument, which includes detailed provisions on how contracts that use the new flexibilities must be reported on—including to Parliament.

I reassure noble Lords that we have consulted extensively with our suppliers on the policy underpinning these amendments—a point raised by the noble Lord, Lord Tunnicliffe. I thank them for their contributions, which have led to some useful improvements. Overall, the amendments are designed to make the regulations easier and quicker to apply in practice—which must be the right thing to do.

To ease the initial implementation of the amendments, we will be flexible in the way we apply the reforms, particularly for the first contracts that will use them. For example, we are waiving many of the reporting requirements on componentised contracts—contracts that are cut up into different pieces—before the beginning of 2025. We will continue to work with those in industry to address their specific concerns.

The regulations currently apply only to single source defence contracts over £5 million, so their impact on SMEs is already limited. The Government are very keen not to impose unnecessary burdens on SMEs and, to this end, committed to reviewing that threshold in our response to the consultation on these amendment regulations, with a particular view to the impact on SMEs. We expect to put further regulations before Parliament in the next year.

On the question of pricing disputes, where there is a dispute about the price, either party can make a referral on the matter to the impartial Single Source Regulations Office for a legally binding decision.

On the question of whether we are trading value for money for pace, I reassure noble Lords that this is absolutely not the case. One of the key intents of these reforms is to provide the full weight of the regulatory protections under all circumstances. For example, allowing use of alternative pricing methods, such as commercial pricing, will support rapid procurement and provide protection on value for money.

If I have not answered any questions, I will write following this Committee. I thank noble Lords for their interest in the matter and I hope that the Committee will welcome these important and necessary amendment regulations. I beg to move.

Motion agreed.

Royal Navy: Climate Change Training

Earl of Minto Excerpts

Thursday 14th March 2024 Lords Chamber

[Lord McColl of Dulwich]

To ask His Majesty’s Government what plans they have to introduce training for the Royal Navy on climate change.

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

My Lords, the defence command plan refresh highlighted that defence is already being impacted by climate change and that we must face the reality of operating in a harsher climate and adapt accordingly, enhancing both our capabilities and our operational advantage. As part of the ongoing work to ensure that defence is resilient to the impact of climate change, we have introduced an awareness course on climate change and defence resilience for the Armed Forces and Ministry of Defence personnel. Currently there are no plans for that training to become mandatory.

[Lord McColl of Dulwich (Con)]

I thank my noble friend for that Answer. Will any training include the scientific record of how the climate has changed substantially without either human interference or causing human extinction? For example, during the Younger Dryas, about 12,000 years ago, the temperature fell dramatically and then rose again by as much as 10 degrees centigrade over a period of 50 years, while during the Middle Ages the temperature of the earth was higher than it is today. Abandoning attempts to prevent climate change would save the West from bankruptcy and release a large amount of money for defence and would even enable us to buy some frigates, which would please the noble Lord, Lord West.

[The Earl of Minto (Con)]

My Lords, the question of climate change and defence resilience is increasingly at the heart of what we are doing. The UK’s ability to understand the impact of climate change across defence and to adapt to it will be key to gaining strategic advantage.

[Lord Browne of Ladyton (Lab)]

My Lords, I shall ask the Minister a question that is within his brief. The respected Institute for Economics and Peace has identified 27 countries with over 700 million people who already face catastrophic ecological threats but at the same time have the lowest levels of societal resilience. This is a recipe for conflict. The list includes countries where we are likely to deploy our Armed Forces and other humanitarian and emergency responders if requested so to do. The Minister and I have had cause to discuss the complications and consequences of the manifestation of an unanticipated risk that caused the accidental death of a member of our armed services deployed with our allies in a foreign jurisdiction in a post-conflict environment. With that in mind, since we have identified the countries where we will need them, should we not be working on appropriate and comprehensive status of forces agreements now in anticipation of this situation arising again?

[The Earl of Minto (Con)]

My Lords, I entirely agree with the noble Lord. However, I make two points. First, we will not and cannot compromise military capability solely for a sustainable solution. A key principle here is to safeguard the national defence, and that is paramount. Secondly, having said that, the UK is world-leading in this area, and we should be proud of our Armed Forces’ efforts to gain an edge on the threats and challenges posed by climate change. Each service is making significant improvements.

[Baroness Stuart of Edgbaston (CB)]

My Lords, I refer to my entry in the register of interests as an honorary captain in the Royal Navy. While education is very important, even more important is capacity. HMS “Protector” is currently our only icebreaker. Last week it returned from Operation Austral in the Antarctic, where it was delivering supplies, carrying out hydrographic surveys and improving the safety of naval passage. I urge the Minister to build on that capacity and, as we train the Royal Navy, to draw on the experience that HMS “Protector” and the teams have gained over the last few years.

[The Earl of Minto (Con)]

My Lords, I thank the noble Baroness for that extremely valid point. She is right that we need to learn from our experience. The Navy in particular is building in adaptability to all future platforms to ensure flexibility of fuel sources and all energy-efficient technologies wherever possible.

[Lord Coaker (Lab)]

My Lords, following on from the noble Baroness’s question, Lieutenant General Richard Nugee warned that global warming may affect the Royal Navy’s technical capabilities. He warned that rising sea temperatures might make it difficult for ships to cool their engines as they rely on cold seawater. It would be helpful if the Minister could provide an update on what assessment has been made by the Ministry of Defence of the impact that rising sea temperatures have had or could have on the technical efficacy of Royal Navy ships.

--- Later in debate ---

[The Earl of Minto (Con)]

Again, that is an extremely valid point. The MoD has just held its first climate security wargame across government, with international representation, and it was the MoD that led it. It is now assessing the outcomes and the lessons learned. Things such as rising sea temperatures and land temperatures are exactly the sort of area that was being considered. This and future wargames will inform all operational planning and current and future military capabilities to ensure that defence understands how capabilities will perform and operate in these changing environments; that is, both physical and security environments.

[Earl Russell (LD)]

My Lords, climate change and its future impact will not only impede our ability to project force but will be a key driver of conflicts. Responding to climate breakdown disasters will become a regular reason for deployment. Does the Minister agree that arguing that the Royal Navy should not be prepared for climate change, as some have, is the modern equivalent of asking the Navy to work on the assumption that the earth is flat?

[The Earl of Minto (Con)]

That was a very nice allegory; I entirely agree. It is embedded in everything that all services, not just the Royal Navy, undertake. This is to ensure that what is inevitable—the climate change we are facing within the next relatively short period of time—is completely planned and catered for. As I said, that will give us a strategic advantage.

[Lord Dannatt (CB)]

My Lords, I think we can all agree that the main purpose of the Question is to express our concerns about the health of our planet. However, I will extend that to say that I am concerned about the health—as the noble Lord, Lord West, will be pleased to know—of the Royal Navy. Will the Minister comment on His Majesty’s Government’s view of the former Prime Minister Gordon Brown’s statement yesterday that the economy should be put on a war footing, not just to grow the economy, but to grow the size of the defence budget from 2.5% to 3% in the interests of the Royal Navy, the Army and the Royal Air Force?

[The Earl of Minto (Con)]

My Lords, I am increasingly thinking this is rather like Groundhog Day. I entirely agree, but the words “war footing” are slightly alarmist. There is no doubt that we are in a considerably more unstable environment and that we need to invest in industrial capacity to rebuild our stockpiles and re-equip all our forces. As I said the other day, we have 22 ships and submarines on order. We have 1,200 armoured vehicles currently on order. The RAF has its greatest lift capacity since the Second World War. The new Chinooks announced yesterday by the Secretary of State are extremely good news.

[Baroness Bennett of Manor Castle (GP)]

My Lords, grounded in the reality of 2024 and the climate emergency, Britain faces greatly increased risks and the reality of floods, droughts, fires, and heat affecting public health. The independent Climate Change Committee said yesterday that the third national adaptation programme was wholly inadequate. Given that there will be increasing demands for military aid for civilian authorities—known as MACA—what extra training and provision are happening within the Navy? With areas such as floods, the Navy should have the capacity to help.

[The Earl of Minto (Con)]

My Lords, there are training programmes in all three forces, and the whole question of climate change and the changing environment we will have to face is deeply embedded in that. However, I confirm that we will not compromise on military capabilities solely for some form of sustainable solution. Our job in the Ministry of Defence is to ensure and safeguard the national defence.

Red Sea Telecommunication Cables

Earl of Minto Excerpts

Thursday 14th March 2024 Lords Chamber

[Baroness Rawlings]

To ask His Majesty’s Government what support they are providing to help protect telecommunication cables in the Red Sea.

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

My Lords, the Government take the security of the UK’s critical national infrastructure extremely seriously. We are working closely with private commercial interests to better understand the ongoing situation in the Red Sea and the resilience of telecoms networks. In recent months, Defence has acted decisively to protect international shipping in the Red Sea from the Houthi’s dangerous and illegal attacks, while continuing to apply diplomatic pressure.

[Baroness Rawlings (Con)]

My Lords, I thank my noble friend for his Answer. The Red Sea is particularly vulnerable to attack because of its narrow and shallow proximity to Iran’s naval bases. Digital data is not in the cloud but depends 97% on seabed cables, and trillions get transferred yearly. Unlike ships, there are no flags, and they are not legally registered to any country. They are easily cut, causing major disruption in the world. Their location is freely available, with scope for plausible deniability. Does the Minister agree that there have been two very good reports, one by our Prime Minister in 2017 and one this year, stressing that China, with its undersea great wall, and Russia, with its sensors and unmanned vehicles, pose a severe threat? What is the UK’s strategic doctrine guiding our seabed policy? With Russia’s aggressive behaviour in the European Atlantic, what is the UK doing to support NATO’s defence system?

[The Earl of Minto (Con)]

My Lords, I will cut to the chase. We take all this extremely seriously, but it is important to contextualise the risk. The most likely cause by far of damage to subsea cables comes from accidental damage by industrial fishing and shipping and from underwater geological events. That is not to say that undersea cables are not prone to attack but it is extremely rare, and the commercial organisations can divert very quickly to alternative routes. Having said that, the Ministry of Defence has capabilities to monitor the seabed and has invested in a multi-role ocean surveillance programme which enhances our joint intelligence surveillance and reconnaissance capability. We work collegiately with allies, including NATO, to ensure that subsea infrastructure is resilient.

[Baroness Smith of Newnham (LD)]

My Lords, one issue is clearly the cutting of cables. The other is cyberattacks on undersea cables. What is the MoD’s position on that, and do we have adequate resilience?

[The Earl of Minto (Con)]

My Lords, the question of resilience is one of ongoing technological change. However, through maritime domain awareness, which is a critical part of our maritime defence and is more specifically about the UK’s national waters rather than international waters, we collect an enormous amount of data to provide accurate information through surveillance software, coastal radars, aviation operations, space-based reconnaissance and government vessels. We get an enormous amount of data. Resilience is something which we consistently and constantly work on.

[Lord Stirrup (CB)]

The Minister has said that physical attacks on undersea infrastructure are very rare, and this is true at the moment, but it is unlikely to be true in a period of heightened tension and approaching conflict. It is not just the Red Sea. Our undersea connections for communications and power supplies, such as for gas and oil with Norway, are extensive and are growing ever greater in the Arctic. The Minister mentioned some of the capabilities that the UK military has to defend them, but they are very few and far between. Given the proliferation of this entirely new and very challenging threat, is Grant Shapps not absolutely right to call for an increase in the defence budget to 3% of GDP?

[The Earl of Minto (Con)]

My Lords, nobody would be surprised to know that, yes, I think Grant Shapps is absolutely right.

[Lord Reid of Cardowan (Lab)]

My Lords, in the absence of my noble friend Lord West, I ask: what naval assets do we have to protect the underwater cables?

[The Earl of Minto (Con)]

My Lords, our naval assets are substantial. In fact, there are new support ships coming in that have the specific capability of underwater surveillance, so it is well on the way.

[Lord Lancaster of Kimbolton (Con)]

My Lords, I will add some specifics to that. RFA “Proteus” is our multi-role oceanographic survey ship. Interestingly, its purchase was announced by Ben Wallace in November 2022 and it was in service less than one year later, which is really quite impressive. Will my noble friend say what the lessons of the speed of that procurement are and whether it is our intention to purchase any further vessels in future?

[The Earl of Minto (Con)]

My Lords, the speed of that acquisition is a fantastic example of how when procurement goes right, the agility and ability to acquire, equip and train crews to man these sorts of vehicles is comfortably within our capability. I do not know precisely when the next ship is due to come, and I will write to my noble friend with that information.

[Lord Coaker (Lab)]

What assessment have the Government made of the impacts of the cuts to these telecommunications cables on the telecommunications traffic from Asia to Europe or whatever? What are they going to do specifically to protect the workers needed to fix those cables?

[The Earl of Minto (Con)]

The noble Lord makes a good point. On the whole, the cables themselves are not fixed but replaced. It is too dangerous and time-consuming to replace them because of the depth they are at and the danger from shipping. These are commercial decisions, and there are commercial sensitivities that we really cannot go into. Suffice it to say that we are acutely aware of what the risk might be in this area.

[Lord Teverson (LD)]

For UK data security, the rather unglamorous solution is the proliferation of these cables, which to a degree is already naturally happening commercially. Where there is real vulnerability is at landing sites, where there is a concentration of these cables. We need to diversify those landing sites on this side of the Atlantic. Does the Minister agree? If so, what action are the Government taking to make sure that takes place?

[The Earl of Minto (Con)]

The noble Lord is right that proliferation is an issue. As has been mentioned, the amount of data that travels through these cables is so significant that it requires all the protection it can get. The question of landing sites is very much part of the overall security resilience that we have been talking about. I can only imagine that they are going to become more and more important as we continue to suffer such an unstable global situation.

[Lord Craig of Radley (CB)]

My Lords, the Minister mentioned the Houthis. What assessment have the Government made of the ability of the Houthis to replace the weapons they have used or those that have been destroyed by Royal Air Force and other allied attacks? It is important to know whether the Houthis will be able to continue the sorts of attacks that they started some months ago.

[The Earl of Minto (Con)]

The noble and gallant Lord is right. The Government’s approach to addressing the issue of the Houthis has not really changed. It is all about increasing diplomatic engagement, ending the illegal flow of arms—I think we are all fully in support of that—cutting off the financial resources of the Houthis and helping the people of Yemen, who need support.

[Lord Bellingham (Con)]

My Lords, the Minister mentioned diplomacy. Surely this brings into sharp focus the need for a robust and sustainable peace process. Obviously military action is part of what is needed, but can he give us an update on how the peace process is going at the moment and what role the UK is playing?

[The Earl of Minto (Con)]

My Lords, that is not strictly within my brief. However, I am fully aware that my noble friend the Foreign Secretary and my noble friend Lord Ahmad have recently met the relevant parties, and the importance of the peace process could not be emphasised more.

UK Armed Forces

Earl of Minto Excerpts

Tuesday 12th March 2024 Lords Chamber

[Lord Coaker (Lab)]

My Lords, how will the state of the UK Armed Forces be helped by the cuts to defence spending announced in the Budget? Table 2.1 in the Red Book shows defence resource spending cut from £35 billion in 2023-24 to £32.8 billion in 2024-25, and table 2.2 shows defence capital spending cut from £19.2 billion in 2023-34 to £18.9 billion in 2024-25. How on earth does that defence spending cut help the state of our Armed Forces?

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

My Lords, I will say something about the Armed Forces to start off with. Our Armed Forces are, at all times, ready to protect and defend the UK. We continue to meet all operational commitments, including supporting Ukraine in the face of Putin’s illegal and unjust invasion and tackling Houthi aggression in the Red Sea. The Royal Navy contributes 25% of NATO’s maritime strength, which has four times as many ships and three times as many submarines as Russia. The RAF has greater lift capacity than at any time since the Second World War. The Army was globally deployed in 67 countries last year, with 14,000 troops deployed on exercises and operations across Europe. We are rightly proud of all their efforts.

On the money side, I have gone into this in quite some detail, and it is the difference between budget and outturn. Budget is a figure struck at the beginning of the financial year, and outturn is what actually gets spent by the end of the financial year. In 2023-24, the budget was £51.4 billion and the outturn was £54.2 billion. This year, the budget is £51.7 billion and the outturn is £55.6 billion—a 1.8% increase of £1.4 billion.

[Lord Stirrup (CB)]

My Lords, yesterday in another place a Conservative Member suggested to the Minister for Defence Procurement that the timing of the 2.5% target should be determined by the level of threat rather than as economic conditions allow. In response to this entirely rational and pretty obvious proposition, the Minister replied:

“I do not think that we can commit to levels of public expenditure … without being confident that the economy can support them in a prudent fashion”.—[Official Report, Commons, 11/3/24; col. 25.]


Does the Minister really think that giving fiscal considerations priority over the scale and immediacy of the threat to this nation’s security can be characterised as any kind of prudence?

[The Earl of Minto (Con)]

My Lords, as I have said before, and I can do no more than say again, we are faced with a lot of conflicting needs and requirements from all the different departments of Government. Looking at the level of defence spending, we are spending more in financial terms than we have ever spent before—the highest level in history—and it is increasing in real terms. It is not where we would like it to be, and I think the Prime Minister has made clear the direction of travel in which he wishes it to go.

[Lord Lee of Trafford (LD)]

My Lords, to say that defence expenditure will be increased to 2.5% “when economic conditions allow”, when Russia and China are massively increasing their defence expenditure and when the world is a tinder-box at the present time, is frankly totally unacceptable and a complete dereliction of national responsibility. How does the Minister react to the recent PAC report that only two of the MoD’s 46 equipment programmes are rated highly likely to be delivered on time, on budget and of high-enough quality? How does the MoD justify employing 60,000 civilians—virtually the same number as over the last five years? What do they all do, when the Army itself is only about 70,000?

[The Earl of Minto (Con)]

My Lords, there were a lot of questions there. On the question of the contracts, the DE&S is actually overseeing 2,600 different contracts across 550 different programmes, delivering, believe it or not, 98% of key user requirements. It achieves 90% of the strategic milestones and, contrary to public perception, and indeed to perception within this House, it delivers well to budget.

[Lord Robathan (Con)]

My Lords, my noble friend is making a good fist of defending a frankly indefensible brief. He and I both served together in the Cold War —a long half-century ago—but there is now a hot war in Europe. It is taking place as we speak, hundreds of thousands of people are being killed, and it is against the same opponent. As the noble Lord, Lord Lee, has just said—and I hate to agree with the Liberal Democrats —we cannot say that we will set out our long-term aspiration to increase defence spending “when fiscal and economic circumstances allow”. It is now; we must spend money now before the whole of European prosperity and our prosperity are destroyed.

[The Earl of Minto (Con)]

My Lords, I can do no more than take that message back, and take the tone of the House back, to the Secretary of State. He will not be surprised, but I will certainly undertake to do that.

[Lord Browne of Ladyton (Lab)]

My Lords, the Minister will remember that, last year, a senior US general remarked that the British Army was no longer regarded as a top-level fighting force. Some short time thereafter—I cannot remember exactly when it was—at Defence Questions, the then chair of the Defence Select Committee invited the Secretary of State to comment on these remarks as he said they tallied with his committee’s own findings that the conflict in Ukraine had exposed serious shortfalls in the war-fighting capability of the British Army. I have no way of judging whether any of that is correct, but what interested me was the Minister’s response. The Minister, Mr Heappey, responded that

“underinvestment in the Army … has led to the point where the Army is in urgent need of recapitalisation”.

That was the word he used: “recapitalisation”. He went on to say:

“The Chancellor and Prime Minister get that, and there is a Budget coming”.—[Official Report, Commons, 30/1/23; col. 5.]


We have now had two Budgets. There was no recapitalisation in the first. There certainly was no recapitalisation, for the reasons that my noble friend pointed out, in the second. So, when is this recapitalisation going to happen? This, out of the mouths of Ministers, is in direct contrast to the description the Minister gives this House. Why is that?

[The Earl of Minto (Con)]

My Lords, one can look at the recapitalisation—and I understand it is a very strong word—and the environment we find ourselves in at the moment. Let us think about the orders we have placed at the moment. There are 22 ships and submarines either on order or under construction, and I have seen some of them; we have got 1,200 armoured vehicles on order; we support, in this country, over 400,000 jobs across the union. We spend £25 billion with the UK defence industry, including £5.5 billion on shipbuilding and repair, close to £2 billion on aircraft and spacecraft, and over £2 billion on weapons and ammunition. We continue to support the defence industry and our Armed Forces as best we can. On the absolute amount of money, I completely understand the level of concern.

[The Earl of Effingham (Con)]

My Lords, the Army, the Navy and the Air Force offer amazing opportunities, but our Armed Forces’ numbers have been shrinking. We saw the largest number of applications to the Royal Navy in eight years during January, but one swallow does not make a summer. We need a proactive, long-term strategy, aside from pay and accommodation, to drive future recruitment. I ask the Minister, what is that strategy?

[The Earl of Minto (Con)]

My Lords, as I have said before, modern war fighting is as much about capability as numbers. Having said that, much is currently being undertaken to improve and retain force numbers. Between, for instance, June 2021 and June 2022, the Army had 53,000 applications. In the same period last year, we had 69,000 applications. So we are moving in the right direction. We are easing the process of joining, and indeed or rejoining. Pay, conditions, accommodation, childcare—all this sort of stuff—are extremely important. It was in my day and I am sure it is now. We are also introducing a new, single, streamlined recruitment programme which is cross-service and which is about to be awarded this year. We hope it will come into operation by the beginning of 2027. So, I take my noble friend’s point that joining the forces is a great career opportunity and it should always remain so.

809 Naval Air Squadron

Earl of Minto Excerpts

Monday 11th March 2024 Lords Chamber

[Lord West of Spithead]

To ask His Majesty’s Government when they plan on 809 Naval Air Squadron being fully operational with a full complement of aircraft.

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

My Lords, 809 Naval Air Squadron has been stood up as a joint Royal Navy and RAF front-line F35B Lightning squadron. The squadron’s force growth, strength and capabilities will continue to increase throughout this and next year. This will enable the first operational deployment of the squadron as planned as part of the carrier strike group 2025 air group.

[Lord West of Spithead (Lab)]

My Lords, it is absolutely extraordinary in this highly volatile and dangerous world, as recognised by a number of senior people in government, that there was no extra money for defence in the Budget. It is very difficult to understand. Symptomatic of that blindness to defence spending is the length of time that it has taken to build up the air groups for carrier strike, which are well behind time. It illustrates a peacetime mindset but, I am afraid, we are now in a world where one cannot have a peacetime mindset. The disgraceful issue over pilot training and the slow rate of delivery of airframes could have been overcome if we had approached it in the right way. I think the Minister understands the shortage of cash for defence, although he cannot say much sitting on the Front Bench. Can he confirm that, when 809 and 617 deploy under the deployment plan in 2025—it was announced by the Prime Minister and the Secretary of State for Defence in Japan—there will be 12 aircraft from each squadron on board the ship?

[The Earl of Minto (Con)]

My Lords, the noble Lord makes a very good point about additional funds for defence; I think we are all in the same area on this. The problem is that resources are finite. There are strong arguments in all sorts of different directions. The Prime Minister has given a clear indication to reach 2.5%; it looks as though this year will end up at about 2.3%. As far as the two squadrons are concerned, the answer is yes: there will be up to 12 aircraft in each squadron by the time the carrier force is ready to go.

[Lord Soames of Fletching (Con)]

My Lords, will my noble friend confirm that there will be, and is, a pipeline of training sufficient for the pilots of both the Royal Air Force and the Fleet Air Arm to cover these mythical beasts?

[The Earl of Minto (Con)]

My Lords, the training programme is in line with the build-up of aircraft. While it is not an easy thing to get right, the aircraft will certainly be capable of being manned.

[Lord Lee of Trafford (LD)]

My Lords, in 2022 the then Defence Secretary, Ben Wallace, told the International Relations and Defence Select Committee that the RAF training programme was “lacking” and

“not in the place I would like it to be”.

Apparently, at that stage we had only 30 British pilots who could fly the F35s. Has the situation improved? How many pilots have we got at present who can fly the F35s? Can he also please tell us what aircraft are currently deployed in the Falklands?

[The Earl of Minto (Con)]

My Lords, on the number of pilots going through training, as I have said, the Lightning Force continues to grow its pilot numbers and graduate additional pilots in the operational conversion unit in line with the planned force growth. The pilots are in training. I will write to the noble Lord and let him know exactly how many pilots we have available at the moment. His second question was about the Falklands. My understanding is that there are four Typhoon FGR4s based in the Falklands and a Voyager tanker based at Mount Pleasant in the South Atlantic.

[Lord Trefgarne (Con)]

My Lords, can my noble friend confirm that naval forces are being deployed urgently to the eastern Mediterranean to protect the cargo ships taking the urgently needed food supplies from Cyprus to Gaza?

[The Earl of Minto (Con)]

My Lords, I understand that this is the case. Sometimes I think we forget just how incredibly amenable and spread our forces are. We have 22 ships and submarines on order or under construction. The Army is globally deployed across 67 countries, with 14,000 troops on exercises and operations throughout Europe. We certainly fulfil all our role as part of NATO and in the safety of security of this country. We also involve ourselves in issues such as combating the Houthi rebels and the other issues we are facing around the world.

[Lord Reid of Cardowan (Lab)]

My Lords, could the Minister have another try at answering the question from my noble friend Lord West? He asked if the Minister could confirm that both squadrons will have 12 aircraft. If I heard the Minister correctly, he said that there would be “up to” 12, which of course could mean two. Could he give a straight answer to my noble friend?

[The Earl of Minto (Con)]

The noble Lord is quite right; I did say up to 12. The whole point of this is that the forces we have need to be flexible and interchangeable. By the end of 2025, we will have two squadrons in full operation. We will have 48 aircraft by the end of 2025, and I am assured that there will be up to 12 aircraft in each squadron which are capable at any one time. I am absolutely certain that there will be a lot more than two in each.

[Lord Empey (UUP)]

My Lords, is my noble friend happy that we have chosen a situation where there is only one aircraft in the world that can fly off our carriers? It is a very expensive aircraft which is in short supply. Is it not inevitable that we will have to modify these aircraft carriers so that they can fly off catapult-launched aircraft?

[The Earl of Minto (Con)]

My Lords, the noble Lord has greater knowledge than I have in this area. As far as the Lightning is concerned, we are fully committed to the 138, as we originally set out. We will have 48 by the end of 2025 and another 27 by the early 2030s. As far as flexibility on the aircraft is concerned, I shall have to find out the full detail and write.

[Baroness Anderson of Stoke-on-Trent (Lab)]

I remind the House of my registered interests, specifically my roles with the Royal Navy. Last year, the Defence Select Committee in the other place highlighted that the proposed cuts to the F35B and Typhoon fleets, as outlined in the defence Command Paper, would significantly undermine our ability to exert combat mass in conflict. What risk analysis has the MoD undertaken to assess the value of high-capability platforms versus airframe mass in peer-to-peer conflict? Where is the balance between sovereign capability and sovereign mass?

[The Earl of Minto (Con)]

My Lords, the noble Baroness asked a very detailed question. The key is that, as the threat changes, we need to change the capability to meet it. We work on very long lead times. All these aircraft are extremely complicated and need to be adjusted to meet the particular threat as it comes through. Through the relationship with Lockheed Martin and the Joint Program Office, we are trying to understand what the delay on some of the deliveries is. However, we do not currently anticipate a shortfall in the ability to build the UK Lightning Force to full operational capability by the end of 2025.

[Earl Attlee (Con)]

My Lords, what is the point of having all the platforms that my noble friend the Minister referred to if we cannot improve the terms and conditions of service for the ratings, to retain them so that they can man the platforms?

[The Earl of Minto (Con)]

My noble friend makes a very good point. I think we addressed this last week or the week before. An enormous amount of work is being undertaken on the question of recruitment and, particularly, retention, to ensure that the terms and conditions of employment within His Majesty’s Armed Forces are fit for purpose.

Military National Service

Earl of Minto Excerpts

Thursday 7th March 2024 Lords Chamber

[Lord Naseby (Con)]

My Lords, in begging leave to ask the Question standing in my name on the Order Paper, I declare an interest in that 67 years ago this month I was awarded RAF Wings to fly jets in defence of my country.

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

My Lords, the Government have no plans to reintroduce national service or any form of conscription. Since 1963 it has been the policy of successive Governments that the best way of providing for the defence of our country is by maintaining professional Armed Forces staffed by volunteers. The demanding nature of defence today is such that we require highly trained, professional men and women in our regular and reserve Armed Forces who are fully committed to giving their best in defending our country and its allies.

[Lord Naseby (Con)]

I am grateful to my noble friend for his clear Answer, but many of us feel that at this point in time the warning signals are flashing red. In my conversations with our young people, particularly my grandchildren, there is a willingness to consider some form of training, either of a military reserve nature or possibly even of a national service nature. I took my oath in the other place 50 years ago today to serve the country. I believe our young people want to serve our country. Is my noble friend aware that as far as NATO is concerned, we are one of only two countries that have nothing in the way of training our young people in the challenges that arise in today’s world?

[The Earl of Minto (Con)]

My Lords, my noble friend makes some very good points, a number of which we can all relate to. The Armed Forces continue to meet all their current commitments, keeping the country and its interests safe. The Government remain committed to ensuring that this country has the world-class Armed Forces that it needs, deserves and has held in high reputation across the globe. We can rightly be very proud of our forces.

[Lord Tunnicliffe (Lab)]

My Lords, I really hope that the Minister’s Answer is not accurate. We know that there is a serious risk—not a probable risk but a serious risk—of a ground war breaking out in Europe, and we may become involved in it. This is being said by serious people such as generals, Mr Shapps and so on. Surely the military would be derelict in its duties if it was not considering that risk. Ukraine has shown that modern warfare, once again, is people-intense. The numbers in our Armed Forces are something like half what they were at the end of the Cold War. Surely the military is developing multiple scenarios, almost certainly short of conscription, to make sure that a rapid increase in resources can be achieved.

[The Earl of Minto (Con)]

My Lords, the noble Lord makes some very good points but, as I have said before, increasingly it is about capability rather than pure numbers. We are facing some widely known recruitment issues that are not peculiar to the forces or to the country and that are giving us a bit of a challenge, but while we have smaller forces than previously we are applying all sorts of issues to attract and retain forces across all three services.

[Lord Fowler (CB)]

My Lords, the noble Lord asks for consideration of

“a form of military national service”.

As one of the last national servicemen in the 1950s, I think he is wise to put it that way. I have no personal complaints, but I observe that not everyone had happy memories of this period. Otherwise, you would not have had conscripts keeping lists of days and hours left to do, and the most popular recording on British forces radio in Germany for those nearing discharge would not have been “Happy Days Are Here Again”. I agree with the noble Lord that there is a strong case for looking at this again, but if we do I hope we will find something better than the 1950s model.

[The Earl of Minto (Con)]

I cannot disagree with the noble Lord, but we have to rely on the fact that all three forces have a global reputation and are professional, highly trained and the envy of many. To dilute them with unwilling recruits, to a certain degree, can lead only to a slight dilution of that reputation.

[Baroness Smith of Newnham (LD)]

My Lords, on these Benches I will not call for military service to be reintroduced, but we are hearing from across the Chamber that this country and His Majesty’s Government need to prepare for a different security context from the one we have enjoyed for the last 30 years. Can the Minister tell the House what plans His Majesty’s Government are making to reinforce the services, including increasing the numbers of reserves and making sure our that recruitment deficit is overcome?

[The Earl of Minto (Con)]

My Lords, the way we address the threat is a constantly changing situation. Whether through procurement or through individual members of the forces, there is a constant ratio of training, retraining and readdressing the threat. I really believe that we have the right quality of forces in place. We know that we do not have as many as we had planned, and there are some prevalent recruitment issues. Encouragingly, applications have been well up in the last few months. We had more than 10,000 applications for regular soldiers in January; there were 53,000 applications in the period from June 2021 to 2022 and just shy of 70,000 from June 2022 to 2023.

[Lord Howell of Guildford (Con)]

On those words, professional, regular and reserve, my understanding is that for some years now we have been vigorously building up our whole reserve—what used to be called the territorials—including a number of combat units trained to semi-professional standards and readiness. Is that process increasing? Is it reinforcing the number of troops we really have available? Are we following some of the patterns that the noble Baroness, Lady Smith, and the noble Lord, Lord Fowler, hinted at?

[The Earl of Minto (Con)]

My Lords, we are. The current mix that we have in the Army is about 70,000 ground troops and about 30,000 reserves. The 100,000 target is where we are focused at the moment. The full size of the forces, currently at about 131,000, is an issue. The outflow is also an issue, as everybody is aware, and we are taking action to improve retention.

[Lord Stirrup (CB)]

My Lords, I agree entirely with the Minister’s remarks about conscription. One area where the Government could do more is in support for the cadet organisations. Although it is certainly not a recruiting arm of the military, the Air Cadet organisation already offers challenge, excitement, adventure and a sense of service to more than 43,000 young people from all backgrounds and communities across the UK. Can the Government ensure that they not only support this organisation in its current work but do their best to expand it?

[The Earl of Minto (Con)]

My Lords, I entirely agree. In a past life, I had something to do with cadets and I also trained Junior Leaders soldiers. There is no doubt that the success of those particular intakes into the Armed Forces pays dividends time and again.

[Lord Snape (Lab)]

My Lords although I cannot possibly match the glamorous nature of the questioner’s service, when I joined the British Army 60 years ago in the hope of being able to drive steam locomotives on the Longmoor Military Railway, the recruiting sergeant in my hometown of Stockport offered to swear me in that same afternoon and send me on my way to the Royal Engineers depot the following morning. As I understand it, these matters of recruitment are now dealt with by a company called Capita, and I read that it takes nine to 12 months for each individual to join a regiment. Does the Minister agree that, by the time we had recruited a whole regiment of these reluctant conscripts, most of them would be too old to serve?

[The Earl of Minto (Con)]

My Lords, the Government are doing all they can to speed up the process. The situation is improving, but the point is very well made. The sooner we can get enthusiastic men and women into the forces, the better.

Defence Acquisition Reform

Earl of Minto Excerpts

Thursday 7th March 2024 Lords Chamber

[Baroness Smith of Newnham (LD)]

My Lords, “over-complex, over-budget and over-time” is how major programmes of defence procurement have been characterised not just by the opposition, our enemies or even our allies but by the Minister for Defence Procurement in giving this Statement in the other place. Defence procurement has, over years, been riddled with problems, as the noble Lord, Lord Coaker, pointed out. While this Statement is very welcome, there is a question about whether it goes far enough or thinks about the wider pattern of defence procurement.

I read the Statement as it was produced and put into the Printed Paper Office last week. It said, “Check against delivery”. I read it, and there were various points where I thought, “Surely no Minister actually said this”. I went back and looked at Hansard to see what the Minister for Defence Procurement said in the other place and, indeed, some of the slightly strange comments were made in the House of Commons. I will therefore ask a few very specific questions.

What we have as the fifth aspect of the new approach to procurement is:

“Fifthly, we will pursue spiral development by default”.


Other noble Lords might know what spiral development is, but I am afraid that I do not. The Statement did not give me much clarity on it, nor does the document that was produced to go alongside it, so I hope the Minister can explain a little more what spiral development means.

Even more, however, I would like to know what is meant by the next line:

“seeking 60% to 80% of the possible, rather than striving for perfection”.

I realise that there have been concerns about the fact that we have looked for exquisite solutions and platforms that are so highly specified that they become ever more complicated, with the timeline for procurement shifting ever further to the right. However, “60% of the possible” raises a lot of questions. Does it mean that only 60% of our ammunition is going to work, or that only 60% of our trials of Trident will work? Given that we seem to have had a couple of problems with Trident recently, I very much hope that the Minister can explain what this means. There is nothing in the Statement or the document that explains clearly that we do not want to spend so long over-specifying things that we never deliver the platforms or equipment that our Armed Forces need. Do we think that we need to specify less? What do the Government mean?

The Statement talks about learning the lessons of experience, which is clearly very welcome. We do not want another Ajax. Learning from that experience is highly welcome and I am sure the Minister would be very grateful not to have to face the situation that his predecessor, the noble Baroness, Lady Goldie, did, of repeatedly coming to your Lordships’ House and having to answer questions about Ajax for which, frankly, there were not any good answers.

Do the Government think that just learning the lessons of the recent past is enough? Will that deliver, at pace, as we say we need, the defence equipment that the United Kingdom needs in an era of unprecedented challenges? Will the noble Earl, in his response, tell the House how far this procurement model will really help us deliver beyond what we have been seeing and help ensure that, if we are sticking at 2% of GDP on defence expenditure, which seems to be the case from the Budget, that we are actually going to be equipped at the level we need to be to face the challenges that we and our allies are facing, and send the messages that we need to be sending to Russia, China, Iran and other countries, some of which we certainly would not think of even as collaborators in international relations?

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

My Lords I thank the noble Lord, Lord Coaker, and the noble Baroness, Lady Smith, for their questions and their very well-made points. The whole point of this paper is to look forward, not to the past. I think there is a full acceptance on all sides of the House that we can agree on the need to reform our acquisition processes, because they are rooted in the past, not in the current; and of course they ought to be rooted in the future.

As mentioned by my honourable friend the Minister for Defence Procurement in the other place,

“the long-standing weaknesses … are well known”.—[Official Report, Commons, 28/2/24; col. 354.]

They include highly exquisite requirements—“exquisite” is his word—constrained export opportunities, vulnerable supply chains, personnel wary of speaking up when problems emerge, not to mention the overprogramming and unintended competitiveness between different parts of the organisation for finite funding. All these have to be addressed if we are going to move forwards.

I draw all noble Lords’ attention, if they have not already been made aware of it, to the publication placed in the Libraries of both Houses last week, Integrated Procurement Model: Driving Pace in the Delivery of Military Capability. Within that document, noble Lords will find the five core principles through which we will deliver acquisition reform. For the benefit of the House, these are as follows—some have already been mentioned.

A coherent, joined-up approach across the defence portfolio to break down the silo nature of procurement.

New checks and balances to challenge assumptions. Taking expert advice from the outset of projects, not half way through, when it is either too late or no longer appropriate.

Prioritising exportability. Far too much of what we have done has been tailor-made. We work in a global market now, where there are skills and abilities outside our shores, sitting with our allies, where we should not only take advantage of their industrial capability but also the sales opportunity that it presents to us.

Empowering industrial innovation through greater transparency and common endeavour. Transparency is so important in this ability to be honest about the situation as things progress. We need to be able to have the honesty to challenge each other the whole way through the process, to make certain that we do not disappear down blind alleys and that things are produced to time and to budget, when they ought to be, and that everybody feels open enough and relaxed enough to be able to challenge some of these issues.

Then there is the whole question of continuous improvement, or spiral development. Spiral development is a new term for me as well. I come from the private sector, where it is called “test and refine”. The principle is very simple. There is a point when you know that what you are doing is capable of achieving the aim. It is not perfect, but you test it, you use it, you learn and you refine it. You can also refine it for other customers as well: you have the base model, it works well, you can test it and then start to develop it in various different directions, to do various different things that you might want, but also what any potential customer might want. It does make perfect sense, I must admit.

Before turning to the questions quite rightly raised, and some of the challenges, I will look at the way procurement has been taking place. Let us be in no doubt, these are extremely complex pieces of technology and equipment, and they do take a long time to bring to fruition—particularly some of the larger ships and aircraft, as I am sure noble Lords are fully aware. It is a long gestation process, where checks and balances need to be inserted at the right place. But it appears to me, looking from the outside, that the process is well overdue an update, and that it needs to be much nimbler, quicker, more open, more collaborative, more informed, more technologically advanced, more digitally enhanced—you name it. There is such opportunity here.

Will it work? Well, it has certainly made a good start. I will mention just a few things about where we have got to. We already have some initiatives under way, and they are starting to improve things. We are starting to drive pace; risk and complexity are being looked at; senior responsible owners and their teams are much more focused; the strategic alignment is getting better; and the capacity and capability of the professionals involved and the SROs is improving. Psychological safety—this idea of being open and honest with each other and having a non-blame culture, which I do not think we have had in the past—pan-defence category management and financial savings: all these things come down to capability having to be holistic. To have an effective operation and delivery across organisational boundaries, you have to have a holistic view.

I will now address some of the questions. The question of value for money, as raised by the noble Lord, Lord Coaker, which I am sure everybody is aware of, is a question of budgeting and taking a sensible approach, being up front about the budget and making certain that the opportunities and contingencies within the budget are transparent. That is very much the case.

On the question of underlying mismanagement, there are various plans in place within the organisations to ensure greater accountability, less project management and more specific accountability for specific parts of work, which makes the whole ownership that much easier and more driven on a private sector opportunity basis.

I think I have addressed the questions of analysis and accountability in speaking on the empowering of individuals. Will this work? Like everything, it is never going to work from day one, but it is a real move in the right direction. It is the current way that large industrial organisations work now, and the ability to insert SMEs in the process the whole way along is absolutely critical. If one thinks about technology and digital in particular, it is often SMEs that come up with the good ideas. They need to be inserted within the business and supported right the way through so that—I hardly dare say this—the primes do not gobble them up and sometimes destroy their nimbleness. So, this is the right thing to do. The question of co-operation with NATO and other allies is, equally, extremely well made.

The noble Baroness mentioned spiral development. It is a strange concept to be described like that, but I completely understand that it is “test and refine”. You get to a certain level, which is 60% to 80% of where you want to end up; you feel confident enough that you can actually put it out into the live environment, in the clear knowledge that you are going to get it back to make it better once it has been used and other people have seen its breadth of opportunity.

On the question of overcomplication, it is a difficult matter. We are dealing with very complicated machinery and skills, and everything we have learned in the past couple of years suggests that things do not need to be overcomplicated; they just need to work, and we need to be able to produce them at pace and in volume.

On Ajax, the Sheldon review has addressed this, I hope. Without making silly jokes about it being back on the road, the lessons really have been learned on Ajax—luckily, it is a thing from the past. We do learn from the lessons of the past, and procurement, if it is properly addressed, is about learning from experience, or enhancing and living with the concept of change. I hope that the challenges that we have seen have been addressed by what I think is a an extremely sensible and practical way forward for the very complicated and broad-ranging challenge of military procurement for a nation state. We could not take it more seriously; I certainly undertake to keep noble Lords fully up to date with all progress as we start to introduce some of the main milestones that will come up within the next two to three years.

[Lord West of Spithead (Lab)]

My Lords, war is raging in Europe, the Levant, the southern Red Sea and Sudan. We are in the most dangerous and hostile world we have been in for many years and, amazingly, the Government have not increased or provided any extra spending for defence in yesterday’s Budget. State-on-state warfare is back. Does the Minister agree that, in terms of procurement, we must look much longer-term? For example, the carriers had £1.5 billion added to their cost because, to get the funding line straight in MoD, they stopped work on them for two years—a ridiculous thing to do. Equally, we are now desperately trying to get enough frigates into our Navy because we took too long ordering them. The SMEs have a real problem. We need to have a drumbeat of orders looking to the future, which we should commit to, because we now know that we are in a world where there is state-on-state warfare. More importantly, does the noble Earl agree that that will provide some resilience, so that, for example, when we start giving ammunition stocks or whatever to people, the firms involved have built into their whole organisation a structure that enables them to be replaced?

[The Earl of Minto (Con)]

I agree with almost everything that the noble Lord said. Certainly, the immediacy of the situation has already introduced into the procurement cycle within the Ministry of Defence a much more nimble way of acquiring the needed munitions, both for gifting and for our own stockpiles. We have started to invest substantial sums of money in the industrial base. If you think about this way of proceeding, it is very much a joint relationship with the industrial manufacturers that will deliver exactly what we want here, as far as both the primes and the SMEs are concerned. It is being driven by the current situation and the rate of technological advance.

[Lord Arbuthnot of Edrom (Con)]

My Lords, I declare my interests as set out in the register. It is nearly 30 years since I became the Minister for Defence Procurement, so ably succeeded by the noble Lord, Lord Bach, who I see in his place—and the questions do not change. New threats arise as old threats remain, and sometimes get worse. Our dependence on technology is greater now than it ever has been; therefore, our vulnerability is greater now than it ever has been. I welcome what my noble friend says about a more joined-up approach across the defence sector, but does he not agree that it has to be married with a more joined-up approach across the infrastructure sector as a whole, because of that very vulnerability?

[The Earl of Minto (Con)]

My Lords, I agree. The Americans have a very good expression: “soup to nuts”. It is a very simple way of describing any project from one end right to the other. I believe that is precisely what my friend in the other place is trying to achieve here, in coming up with a considerably more flexible and nimble approach to the threats that we currently face.

[Lord Deben (Con)]

Could my noble friend go back to number two of his five principles? It seems to me that in the private sector, we have a very large number of these problems as far as procurement is concerned. There are many places where great strides have been made. It has always been thought that the forces are not always willing to accept, with a degree of openness, advice from the private sector—not just in the single programme, but overall. Can my noble friend reassure the House that this is really going to change, and that people understand that there are aspects of procurement which are not just about how you do this very difficult technical kind of procurement, but which really can be learned from other people?

[The Earl of Minto (Con)]

My Lords, I entirely agree with my noble friend. There is no doubt that the private sector and the Ministry of Defence need to work much more closely together to ensure that the absolutely current technology is not only available but able to be developed, and that the working practices and checks and balances on some of the assumptions that have been made are tested properly within the wider concept, not just within the forces network. This is incredibly important. If there is to be a joined-up approach and a proper pan-defence affordability exercise at the outset, it almost demands engagement across a much wider base than previously.

AUKUS

Earl of Minto Excerpts

Thursday 29th February 2024 Grand Committee

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

My Lords, I too am grateful to my noble friend Lord Risby for initiating this debate and to all noble Lords for their constructive and extremely thoughtful contributions. It is fair to say that I have never been asked more questions in such a short period, so I will be doing quite a lot of writing. However, I hope to pick them all up either now or through answering some of the more specific ones.

It is indeed two and a half years since we launched the AUKUS defence and security partnership to bolster global security alongside our equal American and Australian allies. Since then, the challenges to address have become more acute. Putin has brought war to Europe, tensions have heightened in the Indo-Pacific, and terrorism and violence have been unleashed in the Middle East. Military coups have toppled Governments across the Sahel and the Houthis are holding global trade hostage in the Red Sea. Each of these global security setbacks magnifies the need to advance our military capabilities through partnerships such as AUKUS. This is about much more than building the next generation of submarines and other capabilities. It is also about establishing a more sustainable industrial base and developing the skills for the future. With that in mind, I will provide an update on the progress we have made on the various AUKUS workstreams and I will try to address the questions raised by the noble Lords.

First, AUKUS pillar 1 is our commitment to help Australia develop a conventionally armed nuclear-powered submarine capability. Last March, AUKUS leaders announced that this new platform would be based on designs for the UK’s next-generation submarine that will replace our current Astute class. They will incorporate cutting-edge US technologies and will be the largest, most advanced and most powerful attack submarines ever operated by the Royal Navy. They will enhance our capability to operate in the north Atlantic and will further our objectives around the world. They will be built in Australia and the UK and will enter service with the Royal Navy in the late 2030s, and with the Royal Australian Navy in the late 2040s. This phased delivery will enable us to work together to build up the facilities, skills and experience needed for all partners to operate the vessels both safely and securely.

I was delighted to see the Australian high commissioner and his deputy earlier this week. We had a very positive, enthusiastic conversation about precisely this point on skills, training and experience. The opportunity of working ever more closely together on this critical task, developing joint skills and sustainable employment for decades to come across all three nations should be rightly celebrated, and that work is well under way.

The Government have committed an additional £5 billion up to 2025 to modernise the UK’s nuclear enterprise and fund the next phase of the AUKUS submarine programme. It is obviously very difficult, as the noble Lord, Lord Browne, rightly knows, to budget very accurately when we are talking about 2030, which is years ahead. However, the determination is there to ensure that the procurement process is both accurate and timely.

AUKUS partners BAE, Babcock and Rolls-Royce have already been awarded contracts worth £4 billion to procure long-lead components for the submarines. This will support thousands of highly skilled jobs in the UK, particularly in Barrow, where the UK’s submarines will be constructed, and at the Rolls-Royce Raynesway site in Derby, which will double in size to manufacture all the reactors for the UK and Australian subs, creating around 1,100 new jobs. We have also accelerated nuclear co-operation and training between AUKUS partners, offering enhanced opportunities for Australian sailors to train in the UK and the US, including on non-nuclear submarines, and we have committed to more planned visits to the US and nuclear-powered submarines to Australia.

On pillar 2, although the media spotlight has shone brightest on our submarine collaborations under pillar 1, AUKUS has always been about a much broader range of defence and industrial collaboration under pillar 2. From better information and technology sharing to new cutting-edge joint capabilities and more seamless interoperability, as well as strengthening the resilience of our defence sectors, these objectives were centre stage at the AUKUS defence ministerial meeting in December, where Ministers announced new pillar 2 capability programmes on AI, autonomous systems, threat detection, undersea warfare, quantum technologies and cybersecurity, as well as a separate deep space advanced radar programme and a programme of industrial engagement. We are making steady progress with many of these capabilities and, wherever possible, we will continue to be transparent and provide updates as we reach important milestones or embark on new endeavours.

Our ambition to deliver nuclear-powered submarines for Australia will remain trilateral. However, as our work progresses on AUKUS advanced capabilities—pillar 2—and other critical defence and security capabilities, we are open to engaging with allies and close partners. Defence Ministers also announced new future combined exercises, including a joint exercise in the autumn of 2024 off the east coast of Australia to test new equipment to protect critical underwater infrastructure, including autonomous systems. Joint exercises such as this improve our ability to work together and enhance the development of new capabilities.

My noble friend Lord Risby is absolutely right to raise the important function of the AUKUS working groups, which continue to progress the ambition set out in December by Defence Ministers. I am also grateful to him for highlighting the pivotal role that Barrow will play as a home of UK submarine-building. The Government have committed £5 million to support the long-term delivery board for Barrow and are working in close co-operation with Westmorland and Furness Council and BAE Systems to develop that community. With the infrastructure to support this ambition, it should be a thriving place for people to work and live. That includes local transportation and other community projects.

Critical to the success of AUKUS and the strength of the partnership is our ability to forge deeper and more seamless ties between our nations right across the defence sector, so we were delighted that Congress recently passed legislation to establish an AUKUS nations exemption to the International Traffic in Arms Regulations—ITAR—for the UK and Australia. I understand some of the concerns about the small print of this, but the principle having been taken is a very significant step in the right direction.

Closer collaboration and exchanges between our businesses and experts will drive innovation, enable us to make the most of emerging technologies and provide an opportunity for UK defence companies to turbocharge exports. To further grease the wheels of innovation and trade, we have established the advanced capabilities industry forum and will shortly publish the first AUKUS innovation challenge, deepening those crucial links between our three systems to ensure we support the development of skills fit for the future workforce.

[Lord Bilimoria (CB)]

I thank the Minister for giving way. He just mentioned the AUKUS advanced capabilities industry forum and collaboration with trade and industry. That is absolutely spot on, but no one mentions working with universities. Is there not huge potential for the AUKUS programme, in the USA, Australia and here in the UK, to work with our world-class universities to turbocharge this programme? I am chancellor of the University of Birmingham, which last week won a Queen’s Anniversary Prize at Buckingham Palace for its work with Rolls-Royce on aero-engines. It is so powerful. Should we not be promoting this more?

[The Earl of Minto (Con)]

I could not agree more. Rolls-Royce is in the process of doubling its graduate intake between 2022 and 2025, and taking on an enormous number of apprentices over the next 10 years to ensure that we build up this capability of proper, genuine, well-paid and highly skilled jobs for life—exactly the sort of thing that the noble Lord refers to.

Alongside our AUKUS partners, we have also committed to co-operate on the deep space advanced radar capability programme. Although DARC is not part of AUKUS as a result of the particular nature of regulatory requirements covering space-related technologies, it is a clear benefit from the closer trilateral working relationship that we have forged through our AUKUS partnership. That shows the breadth of thinking that AUKUS is projecting.

A couple of noble Lords raised our non-proliferation obligations. As part of the AUKUS programme, we have engaged extensively with the International Atomic Energy Agency, as noble Lords would expect. The UK, the US and Australia are fully committed to an approach that protects classified information and strengthens the global regime.

On the question of other strategic allies in the Indo-Pacific, such as Canada, Japan or indeed South Korea, which was mentioned, we already enjoy close defence relationships.

On exchanges, we currently have three Australian officers embedded in the Royal Navy submarine officer nuclear training pipeline and two Royal Australian Navy personnel embedded in the Submarine Delivery Agency in the Defence Nuclear Organisation. An advanced verification team formed of experts from all three partner countries visited Pearl Harbour and Faslane last year to build our understanding of the maintenance and industrial skills required to maintain nuclear submarines.

I shall just go through some of the specific questions. The noble Lord, Lord Browne, asked about costs and contingencies. In addition to the £3 billion extra provided to our Defence Nuclear Organisation, I confirm that there will be sustained funding to support the AUKUS programme over the next decade. It will be a process of iteration but the commitment is absolutely there.

Can we really build submarines faster than ever before? We have a commitment from our industrial partners and confidence in that. Rolls-Royce is producing the reactors and we have invested billions of pounds in both Barrow and Derby. As I said, we have committed to more than 1,000 new jobs already.

It is better that I write to the noble Lord, Lord Browne, about our assessment of uncrewed submarines.

At this time, it is not for me to comment on President Trump and the presidential candidates’ views. At the moment, all three parties are confident of the longevity of the tripartite agreement.

On the question of jobs in Belfast, there is indeed a very proud tradition and industrial past of shipbuilding in Northern Ireland and across the UK. I take the point: Barrow-in-Furness has the licence and capability to build the submarines, but I am certain that there will be a lot of SME opportunity that includes Northern Ireland. In fact, we will ensure that it does.

In closing, I express my gratitude once again to my noble friend Lord Risby for initiating this important debate on AUKUS. Our national defences have always been dependent on the strength of our resolve, the quality of our people and capabilities, and the power of our alliances. In our more dangerous world, the AUKUS partnership is strengthening all three of these elements. Our adversaries may be aligning but, through AUKUS, the UK, the US and Australia have become ever more connected, prepared and lethal. AUKUS is a partnership building bridges across the Atlantic and the Pacific. It is a partnership for the future that, I hope, will keep us safe for generations to come.