Oral Answers to Questions

Lord Beamish Excerpts

Monday 13th March 2023 Commons Chamber

[Mr Wallace]

If people came to this House with real, genuine honesty about the track record of the Governments they were part of, the armed forces might be in a better position. What we should strive for is for the men and women of the armed forces to know that their political leaders are prepared to be clear about past mistakes and to talk about the future with some honesty. The National Audit Office report gave a view on the Labour party’s governance of defence. I have it here, because Labour Members often forget it. It said that the Department’s poor financial management had led to a severe funding shortfall of up to £36 billion in defence spending over the next 10 years.

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

Not true.

[Mr Wallace]

So what the National Audit Office says is not true, Madam Deputy Speaker—it made it up. It said that when the Department signed the contract for the aircraft carriers, it was aware that the overall defence budget was unaffordable. Labour Members were party to the crime at the time, but they will not come to the House now and be honest about their role in it and the things that need to be done to fix it in the future.

--- Later in debate ---

[Mr Wallace]

As my right hon. Friend will know, the Ajax was decided on in, I think, March 2010, under a Labour Government. As I have often said, it has been a troubled programme. Since I have taken over this office, we have sought to rectify the issue on almost a weekly basis, and with the determination of both the former Minister for Defence Procurement, my right hon. Friend the Member for Horsham (Jeremy Quin), and the current Minister, my hon. and learned Friend the Member for Cheltenham (Alex Chalk). The vehicle has passed its user validation trials and is now undergoing its basic field trials. It is doing extremely well, and I am given a weekly update.

Although the programme is being delayed—and we are doing our best to rectify that—overall it has not cost a single extra penny, because the contract, which was agreed under the Conservative Government after the selection of the vehicle by the Labour party, involved a fixed price. Yes, the programme is being delayed, but we are fixing it, and it is showing good progress.

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

May I say first that if the Secretary of State is going to quote the National Audit Office, he should read the entire statement rather than doing so selectively?

In large, multibillion-pound contracts in the private sector, a project lead with expertise is usually put in place for a number of years. In defence procurement, well-meaning and committed individuals with very little expertise in project management are there for a short period. Is it not time to look at the ways in which we project-manage these large multi-year contracts, and to move from what appears to some to be an amateur approach to a more professional one?

[Mr Wallace]

I do not disagree with some of the right hon. Gentleman’s observations. Consistency in these programmes is incredibly important. As he will know, some of them, even when on track, can be 20-year programmes, and consistency is important. It is not just about the senior responsible owners, by whom those programmes are led, but he is right to suggest that we are seeking to see whether we can have more longer-term or permanent SROs. They are accompanied by programme deliverers from Defence Equipment and Support in Bristol, who are more permanent.

There are lots of lessons to be learned about procurement, some of which are within our gift to fix. Some of them, sadly, have been observed as problems for decades, and we only have to the read numerous reports from the last Labour Government and my Government to know that they have not always been rectified. Some are out of our control owing to inflation, change of threat or changing technology, or because they involve an international consortium in which we have less control when we start. An example is the Typhoon, which is a four-nation project. Sometimes it is harder to control those projects. Overall, in my experience the key is that we have to manage expectations, get our pricing right, seek consistency of skills and reward that skills base for the long term. I agree with the right hon. Gentleman entirely on that.