Oral Answers to Questions

Debate between Lord Spellar and Lord Beamish

Monday 8th July 2019 Commons Chamber

[Mr Kevan Jones (North Durham) (Lab)]

rose—

[John Spellar (Warley) (Lab)]

rose—

UK Sovereign Capability

Debate between Lord Spellar and Lord Beamish

Tuesday 20th November 2018 Westminster Hall

[Mr Kevan Jones (North Durham) (Lab)]

I congratulate my hon. Friend the Member for Glasgow North East (Mr Sweeney) on securing this debate. He emphasised the lack of strategy on maritime sovereign capability, but we need to ask the broader question of why we are in this mess today.

Since 2010, this Government have had no industrial strategy on defence. Some of the short-term decisions that were taken in 2010, when the Government slashed the defence budget by 16%, have resulted in capability gaps. A revolving door has been put on the office of the Minister for Defence Procurement, which means that they have a life expectancy a bit longer than a mayfly. That is not helpful when we need a champion in that role who can argue against the Treasury.

Why is sovereign capability important? If we want to have certain capabilities for the defence of our nation, we need to invest in them. The right hon. Member for Birkenhead (Frank Field) has raised the issue of defence exports. He is right to say that if we are to nourish that industry, there is a defence export role to it. The Ministry of Defence and the Treasury have adopted Donald Trump’s mantra of “Make America great again”, because the procurements that have taken place are suggestive of an “America first” strategy. In the past few years, they have procured more than $8 billion-worth of contracts from the United States.

As my hon. Friend the Member for Glasgow North East and my right hon. Friend the Member for Warley (John Spellar) both said, those procurements were not put out to contract; they were simply awarded. There were no competitions. We have the Apache contract and the P-8 contract—direct foreign military sales—and we have the scandalous situation of the airborne warning and control system, or AWACS, and I understand the Department is now going down the Wedgetail route. From talking to colleagues in NATO, I know that the Ministry of Defence has had no role, and nor is it interested, in partnering the programme that is replacing the 15 AWACS NATO aircraft. It is going down the Boeing route again. I am not sure whether soon we will have a sign at the Ministry of Defence’s Main Building saying, “Sponsored by Boeing”, but that seems to be the way it is going.

We also have the joint light tactical vehicle contract that was awarded to Oshkosh, with £1 billion of sales to replace armoured vehicles. There was no competition at all. At the same time, the Ministry of Defence and the Treasury are saying that the contract has to go out to competition. This is dangerous for our capability. It is not just about jobs, which are important, but about our supply chain and investment in research and development in our technology. My hon. Friend the Member for Glasgow North East will not remember the Falklands war, where we faced the issue of kit procurement from abroad. It reached a situation where we wanted to use the kit independently but were told that we could not.

I have serious concerns about this off-the-shelf approach to defence strategy, because there is no commitment at all. It would not happen in any other country—it would certainly not happen in the United States. If we were to sell equipment to the United States, there would have to be some offset in terms of jobs or investment there. This Government have not even tried. They trumpet the £100 million going into Lossiemouth, but that would have had to go anywhere. Boeing is going round on a public relations exercise, with glossy adverts that say it is now a British company, but it is not. There is very little evidence of real investment going into jobs and technology. That is not just today; our technology in this important sector is in long-term decline.

The hon. Member for Berwick-upon-Tweed (Anne-Marie Trevelyan), who is no longer in her place, said that there is no indication that the Treasury or the Ministry of Defence recognises that if a contract is awarded in this country, the money will come back straightaway. That is a serious problem for them. Short-term decisions taken now will have long-term implications for our effectiveness not just at maintaining our sovereign capability in a whole host of areas including shipbuilding, which has been outlined by my hon. Friend the Member for Glasgow North East, but at maintaining our capability to use that kit in certain situations. For example, will we be able to get the upgrades on Apaches if a future US Government determine that we should not? That is why we need sovereign capability.

I hate to use the phrase “go back to basics”, but that is what the Treasury and the Ministry of Defence need to do. They need to make it clear that we need to procure and manufacture in the UK under sovereign capability, which should be the starting point for the defence industrial strategy. We have been promised it by the revolving door of Ministers for Defence Procurement, but it has never been put in place. It has to be a joined-up approach across Government that includes the prosperity agenda, which does not seem to matter when it comes to those huge contracts that have been awarded without competition. When there is a situation such as the fleet solid support ship contract, where we could have investment in UK jobs and prosperity, we put it out to foreign competition. My right hon. Friend the Member for Warley is right: no other nation in Europe would do such a thing.

[John Spellar]

Will my hon. Friend give way?

[Mr Kevan Jones]

I am sorry; I am running out of time.

This scandal needs to be highlighted. I hope the Minister, in the time he has got in his new role, stands up to the knee-jerk “America first” reaction.

Finance (No. 2) Bill

Debate between Lord Spellar and Lord Beamish

Committee: 1st sitting: House of Commons
Monday 18th December 2017 Commons Chamber

[Mr Kevan Jones]

I agree with the hon. Member for Witney (Robert Courts) and the right hon. Member for Hemel Hempstead (Sir Mike Penning) about the armed forces allowance. In my experience, as in theirs, the modern member of the armed forces, whether male or female, wants choice. I have nothing against that, but I think that this is the wrong way of providing it. As we heard from my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds), the problem now is that much of our military housing stock was locked into what was a terrible deal for the taxpayer during the last year of the Major Government, who sold most of the housing stock in England.

[John Spellar]

May I correct my hon. Friend? In the last few months of the Major Government, Michael Portillo, in a hugely criticised deal at the time, basically gave Nomura the deal of the century.

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[Mr Jones]

I do agree with the hon. Gentleman. Anyone with a close involvement with the armed forces, as he has, will know that we rely on those men and women to go on operations and that a key issue for morale is to ensure that their families are supported during those times.

I am a bit wary about this proposal for another reason. When the Australians introduced this type of rent allowance, they did it gradually, over a 10-year period. There was therefore a transition period with new starts and other people coming in. The proposals in the Bill seem a bit piecemeal, and if they are not done in a thought-out way, we could end up in a situation in which Annington Homes retracts the existing accommodation and people’s options become limited. Again, I think this is the right move forward but it is not being done in the right way. Anything that the Treasury can do to extract the Ministry of Defence from the Annington Homes contract would be universally welcomed—[Interruption.] The right hon. Member for Hemel Hempstead is shaking his head. He has obviously looked the same thing as me. Let us wait and see what the new housing model delivers, but let us hope that it adopts a joined-up approach that will be of benefit to members of our armed forces.

I want to turn now to stamp duty. My right hon. Friend the Member for Warley (John Spellar) asked the Minister which regions would benefit the most from this proposal. The Minister, as usual, sidestepped the answer, but it is in fact quite clear. The average house price in County Durham is £138,000. In London, it is £488,000, so it is quite clear where the money will go. As my hon. Friend the Member for Wirral South (Alison McGovern) said, the Government are completely ignoring the idea of trying to eradicate inequalities throughout the regions. Indeed, they will actually increase them through these moves.

There is a broader point, however. I passionately believe that people who aspire to own their own home should be able to do that, and we should be able to help them to do it. The problem with this Government, however, is that they have one trick in their armoury, which is the idea that the private sector should deliver all this. They believe that the only way to achieve the mythical 300,000 new homes is to allow the private sector to deliver them. Well, I am sorry, but if they are going to rely on the private sector to do that by supplying 300,000 new homes for purchase, that will not deliver the homes that we need in most areas—not just in London but throughout the regions.

[John Spellar]

Does my hon. Friend agree that the underlying problem is that the private sector supply side is becoming increasingly dysfunctional? Indeed, it is becoming an oligopoly, and many of the companies involved are no longer construction companies but just land banks.

[Mr Jones]

They are indeed. My hon. Friend the Member for Ipswich (Sandy Martin) mentioned the example of Persimmon earlier. Many of those companies are no longer housebuilders in the traditional sense. They are employment agents who employ contractors to do things. In my constituency, some of the complaints about new builds are pretty horrendous, and I think that that experience is shared across the House.

--- Later in debate ---

[John Spellar]

I start by welcoming the service accommodation proposals. I echo the comments of my hon. Friend the Member for North Durham (Mr Jones) on the short-term gain taken by the Ministry of Defence and the Treasury in a bid to shore up the finances of the Major Government, which did them absolutely no good in the 1997 election. Service personnel and their families have been suffering from the impact of that ever since.

On the basic question of the stamp duty measure, I suppose that it could be welcomed, superficially, as a reversal of the intergenerational transfer of wealth, but in fact, as my hon. Friend the Member for Wirral South (Alison McGovern) said, the reverse is the case, as the main beneficiaries will be the existing owners of housing. In a tight housing market with a large amount of stock and limited flow, the net effect of adding extra liquidity into the system is most likely to be an increase in the price of housing.

The other beneficiaries will be not just individual householders who seek to trade down, or even up, but private sector landlords who have been buying up property and forcing up prices. Many youngsters are not able to get together the sort of deposit that is now required unless they can go to the bank of mum and dad. With the average house price in London at nearly £500,000, they are having to find a deposit of some £50,000. We are targeting a considerable public subsidy towards one small group without actually dealing with the problem.

It was very instructive that the Minister was unable—or probably unwilling—to give the figures I asked for about how much the measure will cost in aggregate and how the costs will break down by region. It is inconceivable that such analysis was not carried out as the policy was drawn up and ground through the mills of the Treasury. To save me from tabling a parliamentary question, I urge the Minister to come up with those figures in his winding-up speech. I think that the figures will show a considerable disparity between regions, which is not uncommon under this Government, much as they seek to hide it. Just recently, a letter from the Secretary of State for Transport told us that we had it all wrong and the average spend on transport was roughly equal between the north and the midlands, and London and the south. The only issue was, as my hon. Friend the Member for North Durham found out, that the Government had omitted to include the £32 billion—I believe that is the figure—for Crossrail from the London figures, because that had somehow been designated as a national scheme.

[Mr Kevan Jones]

I can inform my right hon. Friend that it was actually worse than that, because the Government had also deemed the north as being the north-west, the north-east and Yorkshire.

[John Spellar]

I do not get involved in those arguments.

In essence, we are seeing major transfers of wealth to areas that the Government see as their political homeland. However, let us also look at the big house builders, as they are euphemistically called—really they are land bankers and, as my hon. Friend said, employment agencies. They also indulge in a number of other unsavoury practices. Several of them have now been exposed for their involvement in the racket of escalating leaseholds, which they have now been forced to back down from. They have had to pay considerable sums to buy back those leases from individuals—speculators—who bought them and were then exploiting residents on that basis. Is that not a symptom and a symbol of the dysfunctional nature of our housing market? The Government are not tackling that in any particular way.

Nor are the Government tackling the increasingly oligopolistic nature of the house building industry. There has been a significant decline in medium and small builders, who used to be the backbone of the building industry and of many towns. Building, by its nature, is subject to cycles, and banks have been incredibly reluctant to lend money to small builders, who have steadily either gone out of business, or been absorbed into the big builders. That has flowed into the lack of training that has taken place, because so many of the big house builders are mainly just the name outside a project and are not particularly interested in the small sites—brownfield sites—around our towns. With the breakdown in training, we then have the cry from those same builders that need to bring in more and more builders from abroad because of insufficient supply in this country. That is because over several years, if not decades, they have not been training people.

Nor do the Government have any programme, as far as I can see, that is equivalent to the better homes programme which, as a number of colleagues have said, contributed enormously, not only to bringing many properties back into effective use, but to improving the lives of many of our constituents. Finally, what we see here is figures being plucked out of the air. This is reminiscent not of an efficient market, but very much of Soviet planning, with declarations of 300,000 houses but no visible means by which that will actually be achieved.