Ministry of Defence
Debate between Lord Beamish and Madeleine Moon(6 years, 9 months ago)
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Mrs Madeleine Moon (Bridgend) (Lab)
It is a great pleasure to follow the fantastic overview that the hon. Member for Gainsborough (Sir Edward Leigh) set out of the defence estimates. For Members who do not find themselves—as many of us do—becoming defence-obsessed, due to our concerns at the lack of funding being sent into the defence of this wonderful realm, it was a fantastic primer on the concerns that we must face as a country.
I want to look at the reserve forces, an area that the hon. Gentleman also raised. I declare a sort of interest as the chair of the all-party group on reserves and cadets. I recently met an academic from the University of Bath, Dr Patrick Bury, who has been looking at the progress of the Future Reserves 2020 plan, the main purpose of which was to provide direct support to a reduced Army and to increase the reserves to 35,000. Following the meeting, I rather upset a Minister in the Ministry of Defence, who received more than 100 parliamentary questions in the lead-up to Christmas. He took me aside to remonstrate with me for giving him so much work. I pointed out that if he had answered some of the questions the first time around, there might have been 50% less questions, but that is the way of asking and pursuing parliamentary questions.
The information I will speak to in today’s debate is all provided—sometimes reluctantly, but it was provided eventually—by the Ministry of Defence following parliamentary questions. I am deeply concerned that the expenses involved in Future Reserves 2020 not only show a programme that is struggling to achieve its goals, but are such that we need either to redefine or to look at whether the money we are spending, given the outcomes we are achieving, would be better spent elsewhere. We all know that the Ministry of Defence cannot afford to waste that expense. Every penny counts in the Ministry of Defence.
To provide context and make the costs clear, what is the current reserve structure? The reserve model means that Army reservists sign a contract in which they commit to achieving a certain amount of training time, and to achieving training targets over a financial year. That involves 27 days’ training, including a two-week continuous period away, which is known as annual camp. If the reservists achieve that commitment, they are considered to be fully trained and up to date, and ready to fulfil their role in supporting the Regular Army—in other words, they are deployable—and are rewarded with a tax-free bounty cash payment.
It goes without saying that, for a reservist to achieve a high level of practice and well-honed skills, they would need to achieve that minimum level of training. It is only 27 days. Many members of the armed forces parliamentary scheme spend more than 27 days in the armed forces and do not qualify to be reservists. They nevertheless give that commitment. Unlike those in the armed forces parliamentary scheme, the reservist is not compelled to complete their commitment to get their pass-out certificate. They have only to complete a minimum of 27 days. The only compelling desire is achieving the tax-free bounty.
We can therefore use that tax-free bounty as a useful way of assessing how many people in the reserves are deployable. It is possible to be an Army reservist without achieving any training targets in a financial year, so if we want to know about the Army reserves, we need to look at how many achieve their bounties. Let us look at the cost of the programme. The easiest way to calculate the cost is to look at the bounty payments combined with the number of reservist service days claimed over the past few years. I am making a general assumption. A basic private’s pay in April 2017 was £46.42 a day—some will earn more, and therefore my numbers might be lower, but I am giving the benefit of the doubt and working on the assumption that everybody gets the minimum payment.
In 2016-17, 1,008,290 reserve days were claimed, and 14,930 reservists qualified for their bounty. That resulted in a spend of £68 million—it was nearly £69 million. In the year 2015-16, 957,390 reserve service days were claimed, and 14,990 reservists qualified for their bounty. In 2014-15, 884,050 reserve service days were claimed, and 14,270 reservists qualified for their bounty. Therefore, despite the rising costs, and despite continual recruitment, the true number of qualified reservists has remained stable, at just less than 15,000. It is not just that we are failing to meet targets year on year, as pointed out by the hon. Member for Gainsborough, but we are not increasing our numbers of deployable reservists.
The wages and the bonuses are low.
Mr Kevan Jones
What my hon. Friend is describing is fascinating. Does she agree that Army 2020 was really designed to give the Government political cover in the light of the reduction of the Regular Army to 82,000? It is not just a question of the retraining days; it is a question of whether the 15,000 reservists to whom she referred can actually be deployed alongside regular troops. I am told that in some cases there is no joint training at all.
Mrs Moon
My hon. Friend is absolutely right. What we have here is a consistent pattern of only about 15,000 deployable reservists. Despite the money that has been poured into the reserve forces, we have not increased their number, but we have massively decreased the number of regulars. Our Army capability is therefore shrinking. That is something that we must be very worried about, but what worries me even more is the fact that we are spending huge amounts of money while receiving little or no return.
Mr Kevan Jones (North Durham) (Lab)
I congratulate the hon. Member for Gainsborough (Sir Edward Leigh) on his introduction to the debate. I agree with him that it is important to secure more such opportunities to discuss defence and how it is financed.
I do not think that anyone who follows the defence world and the way that the MOD has conducted itself over the past few years would conclude that the situation is anything other than dire. It is fair to say that the new Secretary of State realises that as well. There is also, however, a collective sense of acute amnesia, certainly among those who were Government Members in 2010, about how we arrived at this position. It is clear that the mess that the defence budget is in today is a direct result of policies taken by the coalition Government and the present Conservative Government. Seven years of ill-thought-through, rushed cuts and, on occasion, very bad decisions are now coming home to roost. The new Defence Secretary has the unfortunate task of sorting it out—a task that I do not envy, to say the least. It is therefore worth recapping how we have arrived at this position.
The Chair of the Defence Committee, the right hon. Member for New Forest East (Dr Lewis), said that these were not political decisions. They were political decisions that led directly to the mess we have today. To ignore that is to avoid the evidence and means that we will not learn lessons for the future for how we manage our nation’s defence. In 2010, the new Conservative-led coalition implemented a number of deep cuts to the armed forces. The right hon. Member for North Somerset (Dr Fox), the then Defence Secretary, justified them by claiming that the defence budget had a £38 billion black hole, which somehow meant that rash and direct action would have to be taken straightaway. No one knows how he arrived at £38 billion. I have asked Ministers in this House to explain it on numerous occasions. The NAO and the Defence Committee could not arrive at a £38 billion black hole either, but it was used in every debate as the reason why cuts to our defence budget had to be made.
The Government stopped using the figure after a while, when they realised they could not justify it. I think it came about from a clear misinterpretation of the 2009 NAO report on major projects started under the previous Labour Government. The report was a snapshot of cost increases in 2009 and related primarily to the Queen Elizabeth class aircraft carriers, the A400M transport aircraft and the Astute submarine programme.
Mr Jones
It was a deliberate strategy, in the Cameron-Osborne Conservative party, to ignore the facts and spin—“If we keep saying it long enough, people will believe it.”
The 2009 NAO report said that if the equipment budget was not increased at all over 10 years, it might be possible to arrive at a figure of £36 billion. How did they then get an extra £2 billion? I think the then Defence Secretary just added some personnel revenue costs to get to the £38 billion figure. What the report actually said, however—this point was completely ignored—was that the scenario it envisaged, of the budget remaining constant in real terms over the 10-year period, would lead to a £6 billion funding gap, which could have been managed over that 10-year period.
My hon. Friend the Member for Bridgend (Mrs Moon) is right. The impression was given to the public, and to everyone else who wanted to hear this spin, that the £38 billion had to be found in year straightaway. That was a clear fabrication. We know that, because when the current Chancellor became Defence Secretary, following the resignation of the right hon. Member for North Somerset after two years, he suddenly announced that the black hole had disappeared. I do not know whether he was auditioning for his current job as Chancellor, but the idea that it is possible to get rid of a £38 billion in-year black hole in the defence budget in just two years is complete nonsense.
The Conservative Government used that as a smokescreen to allow them to cut the defence budget, as part of the Chancellor’s austerity drive, by 16%. The effect of that has been some of the decisions referred to earlier on, including the scrapping of capability such as Nimrod. Making people compulsorily redundant in our armed forces was completely inexcusable. Certainly, if the Government I was a member of had done that when I was a Defence Minister, we would have been rightly decried by the people who are always arguing for defence. Those decisions have had an impact on what is happening today. My hon. Friend the Member for Gedling (Vernon Coaker) referred to the increased expenditure on the Trident programme. The £1.2 billion to £1.4 billion in additional costs happened because that decision was delayed. The deal done by the then Prime Minister David Cameron to get the Liberal Democrats on board in coalition delayed the programme, which built in costs.
Mr Jones
The right hon. Gentleman is nodding. He and I kept raising that and asking why that decision had not been made. The costs arriving now are because of the decisions taken by the coalition Government. I accept all that has been said about increased defence expenditure, but we cannot get away from the core decisions that have led to the problems we have today.
The 2015 pre-Brexit strategic defence and security review announced an additional £24.4 billion spending on new equipment. Some of that, for example on the P-8, was to fill the gap the Government created in 2010 with a hasty decision to scrap the Nimrod. Reference was made earlier to the civil service making decisions. I am sorry, but it was not civil servants or generals making those decisions; it was Ministers making these decisions, including the right hon. Member for North Somerset and the current Chancellor, when he was Defence Secretary. They decided to reduce the size of the Army to 82,000. I asked a retired senior general, “Who came up with the figure of 82,000 for our armed forces?” He scratched his head and said, “We were just told that that was what the figure was going to be to fit the cash envelope.” We then had the construct of Army 2020, which is a complete political cover, to try to give the impression that we are going to keep the Army at nearly 100,000. As my hon. Friend the Member for Bridgend very eloquently outlined in her contribution to the debate, that is not only not producing the additional personnel required, but is actually costing more than if we had not done that in the first place.
Another point about the 2015 review is that, again, hasty decisions were taken in ordering the P-8. There is a gap, created by this Government, in maritime patrol aircraft. The P-8 was to be bought off the shelf—the Apache contract was announced at the same time—from the United States. That was pre Brexit. The added costs in foreign currency exchange are now creating pressures on the defence budget, and that is before we look at the effect on the economic and industrial base of our country. It may seem an easy option to buy off the shelf from the United States, but that lets our own industrial base decline, and that is what is happening. I have not yet seen any meaningful commitment by the contractors, Boeing, to create real jobs in the UK. What angers me is that if it was the other way around and we were selling equipment to the United States, we would be unable to do so without a clear commitment to jobs and investment in United States industry. That is where the MOD woefully and shamefully let down the British economy.
Mrs Moon
My hon. Friend will not be surprised to hear that during a visit to the Boeing factory in Charleston three weeks ago, I asked Boeing whether it regretted taking action against Bombardier and almost damaging and destroying the economy of Northern Ireland. Its response was, “We’re American, it’s what we do. It’s America first, second and third.” That is the sort of company that we were putting our trust in.
Mr Jones
It is. As an example, we have to look only at the sale of Airbus in the United States market. As part of that deal, it had to build a plant in Alabama, I think. We have the mindset in this country that somehow the ticket price looks cheap, but we are not thinking about the loss in tax revenue going back to the Exchequer and the fact that the defence industrial base is suffering.
Some decisions in 2015 were very strange. The Navy has been mentioned, and I accept that naval platforms are far more capable than they were 10 or 20—and certainly 50—years ago, but people are fixated on the number of hulls. The Government came up with the novel idea of having a cheap alternative through the Type 31e. This was literally just to deal with the idea that we have a certain number of hulls. I asked what the Type 31e is capable of doing. It cannot do NATO tasks and it is not clear what weaponry will go on it. Lo and behold, when I looked at the Ministry of Defence budget, I saw that there was no budget line for it at all—it has a £1.3 billion price tag on it—so again, how will it be paid for?
The Secretary of State needs to look not just at asking for more money, which the budget clearly needs, but at some of the ill-thought-out decisions. Take the P-8, for example. Buying off the shelf from the United States might look like a simple solution, but as I understand it, sonar buoys and missiles cannot be fired from the P-8 as it is configured, so we will have to redevelop the programme, adding more costs in. This is about looking at whether we have to revisit some decisions and take things out of the budget. I think that will be the case if we are to fit the budgets,
The issue of numbers is always contentious. When we were in government, I remember the hue and cry from the Conservative Front-Bench team—the right hon. Member for New Forest East was part of it—when we froze training days for the Territorial Army. The cost was £20 million. From looking at the headlines and at the way some Conservative politicians were going on, one would have thought that the world had stopped. If a Labour Government had slashed the defence budget by 16% and sacked people or made them redundant, as this Government have, they clearly would have been condemned.
It is the same old story. I understand the point that the right hon. Member for New Forest East made about arguing for defence—I have argued consistently for it in this House—but these are political decisions. When I was in the Ministry of Defence in 2010, I did not hear Conservative politicians stand up and say, “No, we do not need extra expenditure.” We were being condemned because we were not spending enough. In 2010, I did not see a single poster or anything in the Conservative manifesto saying, “We are going to slash the defence budget by 16%,” but these are the real facts and we cannot ignore them.
Let me turn to recruitment, which my hon. Friend the Member for Bridgend touched upon. I do not like to say, “I told you so,” but the decision on the Capita contract for recruitment was criticised at the time. My hon. Friend the Member for Gedling raised complaints, asking why armed forces personnel were being taken out of recruitment centres and why such centres were being closed in some areas. The position we find ourselves in now was bound to happen. We have heard some of the stories. The recruitment process is not only taking a year, but given the rate at which people are being failed, it is no wonder the Government are not meeting the targets. It is now time to revisit the contract and put uniformed personnel back into recruitment centres. The Capita contract should be scrapped, because it is completely failing to deliver what was outlined.
My hon. Friend the Member for Bridgend talked eloquently about reservists. It is time to rethink Army 2020. It was never going to work. It was political cover so that when the Government were cutting the Army to 82,000, they could still give the impression that they had an Army of more than 100,000. The issues my hon. Friend raised are not the only concern. I have never had an answer to the question about how we get formed units. How do we get training whereby regulars and reserves can train side by side to go on operations? I have not seen any evidence that that is happening in practice. If, in addition, it is costing what my hon. Friend says it is, it might be time to revisit it and see whether those resources can be put elsewhere. Let us come back to the suggestion that Ministers were asking advice from the Army about this. They were not; it was a political decision imposed on the Army.