Defence Reform Bill

Lord Arbuthnot of Edrom Excerpts

Tuesday 16th July 2013 Commons Chamber

[Mr Hammond]

My hon. Friend is absolutely right. The role of the Territorial Army has evolved and it will evolve further. My point was that when Haldane introduced it in 1908 by consolidating the county militias, he had in mind a home or territorial defence role, which the name reflects. I am happy to agree with my hon. Friend that the role that the TA has played over the years has been substantially greater than the role envisaged for it originally.

Hon. Members on both sides of the House have raised concerns over the possibility of employment discrimination against reservists. The Bill provides improved employment protection by allowing a right of access to the employment tribunal without a qualifying employment period for an unfair dismissal claim where the dismissal relates to the employee’s reserve service. Separately, there is already a criminal offence of dismissal because of call-out for reserve service.

However, we recognise that there is a perception among many reservists that they are disadvantaged in the workplace by their reserve service. We believe that the changes that we have set out in the White Paper will greatly improve relations between reservists and their employers, but we take the issue of discrimination against reservists very seriously. We have established a webpage through which reservists can report incidents of perceived discrimination and we will investigate them. If we find that there is a case for further action, we will take it. We will consider whether further measures may be taken in the next quinquennial Armed Forces Bill, which is due to be introduced in this House in 2015.

[Mr James Arbuthnot (North East Hampshire) (Con)]

I am delighted with what my right hon. Friend has just said. Will he consider, among the further measures that might be taken, action to help reservists who find that their promotion is held back by their being in the reserve forces?

[Mr Hammond]

I am grateful to my right hon. Friend. That example fits exactly into the category of discrimination in the workplace. We must look objectively at the examples that we are given to establish whether they constitute actual and systemic discrimination against reservists, rather than mere perceptions. The time scale that we have set out is appropriate. We have set up the webpage and are starting the process now. In 2015, when the next quinquennial Armed Forces Bill is introduced, the time will be right to analyse the information that we have received and to consider what action is appropriate.

The support of employers is crucial to delivering our future reserve forces, and we seek to strengthen the reservists and the MOD’s relationship with them. The White Paper set out a range of measures to deliver a sea change in those relationships. While small and medium-sized enterprises will benefit from all of the measures, I have acknowledged previously that reserve service can have a particular impact on them as a result of their scale. Therefore, by amending clause 44 of the Reserve Forces Act 1996 to allow the introduction of a financial award of £500 per month per reservist for SMEs when any of their reservist employees is mobilised, we will target additional resources at this sector and explicitly recognise the additional impact SMEs may have to absorb when a reservist employee is mobilised.

The measures in part 3 support the package of proposals set out in the White Paper. They will ensure that we have the well-trained, well-equipped and integrated reserve forces we need, which are able to deploy with their regular counterparts as part of Future Force 2020.

The driver for change running through the Bill is the requirement to deliver the capabilities our armed forces need while ensuring value for money for taxpayers, whether that is through better procurement or more efficient and effective use of the reserves. The measures contained within it allow fundamental change to how we procure our military equipment, and ensure that we will be able to make full use of our reserve forces in the future.

Whatever else we may disagree on, all of us in this House place the utmost importance on properly equipping and supporting our armed forces. The Bill will ensure that we can be confident of our ability to do so in the future. I hope the measures will command widespread support, and that we will be able to take them forward through this House and the other place on a consensual basis. I commend the Bill to the House.

[Mr Jim Murphy (East Renfrewshire) (Lab)]

Like the whole House, I listened intently to the Secretary of State’s necessarily detailed analysis of the specific points he announced in advocating the Bill. At the start of his speech he reflected on the tragedy in Brecon, and I associate the Opposition with his comments. After the controversy relating to today’s Health statement, I wish—I suspect to your satisfaction, Mr Deputy Speaker—to seek a more consensual approach to the tone of our debate. The principles driving the reforms in the Bill have the potential to unite all parts of the House.

Reform to defence procurement is vital to ensuring value for money, while upholding the highest possible standards and timely delivery of world-class equipment to our personnel. It is essential that increasing the number and enhancing the role of the reserve force be a success, in order to strengthen our front-line Army capability at a time when it has been subject to cutbacks. The Opposition’s aim is to ensure that these objectives are met through effective delivery, scrutinising the military as well as the financial implications of the Government’s proposals.

On Government-owned contractor-operated procurement, it is crucial that defence procurement practices be modernised to serve both the front-line overseas and the bottom line back home. Both parties agree that some of the issues that have plagued defence procurement have been insufficiently tackled by successive Administrations. In all Governments, momentum on modernisation has been lost. Major projects such as Eurofighter-Typhoon have grown greatly in cost and have been delivered years late. The roots of that lay in the late Baroness Thatcher’s Administration, showing just how far back some of these issues go.

Shared blame, however, is not as important as shared resolve, which is necessary to achieve meaningful reform. Such reform will come from greater professional project and programme management within Defence Equipment and Support, faster decision making, fuller accountability for outcomes, and longer-term integration of military expertise.

The Opposition are genuinely open-minded about the management structure that will deliver this change, which is why we accept the proposed legislation that will enable a GoCo model to be established. Supporting assessment of GoCo’s feasibility, however, is not the same as supporting its creation. The comparison between a GoCo and DE&S-plus, as it is inelegantly named, should, we believe, be based on the following principles.

First, reform must strengthen value for money within programmes, with industry adhering to targets on time and on cost. Secondly, the chosen procurement management model must retain parliamentary accountability for decision making—the point made by my hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart)—so that oversight and scrutiny of multi-billion pound contracts is not hampered, but if possible enhanced. Thirdly, any change in management model must protect the rights of staff and engage with their trade union representatives, and finally, the procurement process should be characterised by talent and skill, with clear lines of responsibility, proper reward and career structures and a culture of consequences for those tasked with project management. Within that, military expertise has to be maximised without a single-service interest dominating decision making. The Opposition welcome a rigorous examination of all the options for achieving that and wish to see a genuine comparison made between the two options of GoCo and DE&S-plus.

[Mr Arbuthnot]

I am delighted with the right hon. Gentleman’s tone. I do not want to put words in his mouth, but can I take it that he has no objection, in principle, to a GoCo, but that he wishes to see how it works out in practice?

[Mr Murphy]

The right hon. Gentleman anticipates my point entirely. We wish to see reform. It is difficult to defend the status quo, which, despite the many efforts of the professionals involved, has ill suited successive Governments and has not delivered value for money. In addition to testing the logic of GoCo and DE&S-plus against the three principles I mentioned, we will consider the points the Defence Committee raised.

Further to the point made by the right hon. Gentleman, it is important that the comparison be genuine and be seen to be genuine. I say gently to the Secretary of State, however, that so far he has failed to guarantee that the Government will publish the findings of the two value-for-money studies. I hope they will take the opportunity, today or in Committee, to commit to doing so. It is essential that Parliament, industry and our armed forces have full confidence that affordability is a determining factor in this process, but that can be achieved only if we have public transparency in the findings prior to a final decision being made and Members being asked to vote in favour.

I hope, too, that we will receive reassurances about the role of Parliament and the National Audit Office in scrutinising the internal decision-making process of a GoCo. It is understood that the Secretary of State is ultimately accountable—to be fair, he said the same again today—but the decisions taken by the contractor in the handling of multi-billion pound projects should not be free from public oversight. It will also interest the House to know how reform will impact on one of the centrepieces of the 2011 Levene review, which was for service chiefs to

“take responsibility (and ultimately own the budget) for detailed capability planning”.

Any enhanced power for a contractor could contradict the increased control over budgetary management and planning given to the service chiefs.

--- Later in debate ---

[Mr James Arbuthnot (North East Hampshire) (Con)]

I echo what was said by my right hon. Friend the Secretary of State about the quality of our armed forces and the amount that we demand of them. We are putting them through a lot at the moment.

Once upon a time, before most Members were born, I was a Defence Procurement Minister, and I was delighted by the publication of the Bernard Gray report under the last Government. Sadly, the then Prime Minister tried to suppress it, although he should have recognised that it covered not just the period of a Labour Government, but the period during which I was in charge of defence procurement. The report revealed a great many failings in the procurement process. It showed, for instance, that the programme was overheated, that a weak interface between the MOD and DE&S was resulting in poor discipline and very little change control, and that there were insufficient skills in the DE&S. Subsequently, I was both delighted and highly amused when Bernard Gray was put in charge of sorting out the mess that he had identified.

The Bill was designed to achieve that. Like Gaul, it is divided into three parts—although, according to its drafting, there are four—dealing with defence procurement, single-source contracts and reserves. Each of those issues, but particularly procurement, raises a great many questions. I shall ask some of them now, because in the case of a change as fundamental as this, the devil is in the detail. The change is fundamental and it is being made against a background of fundamental change at the MOD as a result of the Levene reforms, severe reductions in funding and huge redundancies, not to mention the fighting in Afghanistan and the withdrawals from Afghanistan and Germany. As I have said, we are asking a lot of the Ministry of Defence, and it will need help to achieve the major changes set out in this Bill. It will need help from Parliament and from industry, and from academia and the country, and it should be willing to ask for and accept help, and everyone else should be willing to give it.

I shall start with the defence procurement process set out in the Bill. In December 2011 the Chief of Defence Matériel set out four options: first, the status quo; secondly, a trading fund; thirdly, an executive non-departmental public body with a private sector partner; and fourthly, the GoCo. We are now down to two options: a value-for-money comparison between the GoCo and what we hear is called DE&S-plus. Most unusually, there is no option to stay as we are. It is perhaps surprising that the MOD non-executive directors have not insisted on there being a stay-as-you-are option.

The GoCo option is reasonably clear, and I will come on to it in a moment, but DE&S-plus is not at all clear. The White Paper devotes a massive four lines to it and does not define it. In fact, so far as I understand it, DE&S-plus is designed to be unclear in order to be the basis for a negotiation between the MOD and the Treasury as to the freedoms the Treasury can offer. In other words, if DE&S-plus can pay more for its personnel and so attract much needed skills—more than current civil service terms and conditions allow for—the GoCo will become less attractive. But how, in practice, can the Treasury loosen the rules for the MOD without loosening those same rules for other Departments with similar problems? If the answer is that in practice it cannot, does that mean that in practice this decision has already been made—so it is GoCo or nothing, and there is no public sector comparator? Has my right hon. Friend the Secretary of State made up his mind? How will the private sector companies bidding for a GoCo be confident that their bids are being fairly compared with DE&S-plus, whatever that may be?

ADS, the organisation of defence companies, suggests that the proper metrics might be better value for money for the taxpayer; shorter and cheaper bidding processes; improved skills and expertise; and greater stability in the funding of the defence budget. That is a potential set of metrics, but what does my right hon. Friend say are the proper comparators, and how will he avoid this being a wholly subjective guess about future behaviour?

This brings me to the GoCo itself. I am not instinctively opposed to this idea—in fact, I am rather attracted by it—but the Defence Committee has asked lots of questions, some of which remain unanswered. No other country has gone down this route, so this is courageous, Minister. That does not mean it is wrong, but there are some questions. First, if a foreign company is the lead partner within a GoCo, how will the MOD deal with any conflicts of loyalty that arise? The Atomic Weapons Establishment does not create such conflicts and is not as widespread in its coverage. Secondly, there are concerns about the issue of intellectual property, as some of my colleagues have said. That is covered in the single sourcing part of the Bill, but it is not covered in the defence procurement part.

[Mrs Madeleine Moon (Bridgend) (Lab)]

I am not sure whether the right hon. Gentleman is about to mention how the GoCo will affect current alliances and agreements for joint contracting between the UK and our partners. I was in the USA last week for the NATO Parliamentary Assembly, and I spoke to many alliance partners in NATO and to Congress members in Washington. The best that they could say was that Britain was very brave, that they would like to see whether we succeeded and that they would leave us to get on with it. Concern was also expressed, however, about whether they would be willing to share confidential contracting and technological information. Does the right hon. Gentleman agree that that is a concern?

[Mr Arbuthnot]

As I have said before, the hon. Lady performs a valuable service on the Defence Select Committee. She has put her finger on an extremely important point, which was also raised by the Select Committee in our report on defence acquisition. She is right; this matter has to be covered. I asked my right hon. Friend the Secretary of State a question about how the United States and France were reacting to the proposal, and he was able to say that he had received a supportive letter from the United States that very morning. I also know that there is a working party in operation with the United States to try to ensure that any problems are ironed out. It is true that other countries think we are being very brave. If we are indeed being so courageous, and if this works, we may well forge the way for other countries to follow us. It may well be that whichever company succeeds with the GoCo in this country could find vast new opportunities opening up for it. For example, it could take over the defence procurement of the United States, which would make somebody extremely rich.

The next question, which has been raised by ADS and by the Federation of Small Businesses, relates to how the GoCo proposition would affect small and medium-sized enterprises. The FSB has said that it is broadly supportive of the Government’s proposal, as contained in the Bill, but that it is vital that the needs of SMEs be considered when the reforms are implemented. I echo that, and I am sure that my right hon. Friend the Secretary of State will do so as well.

The time line involved is ambitious. I understand that there is a suggestion that we might reach a final conclusion in April 2015. That must remind us all of another fixture in our diaries for May 2015—the general election. Surely the risk of this project running up against the next election is huge.

[Mr Philip Hammond]

Perhaps I can help my right hon. Friend. The expectation is that the competitive process will be completed by the spring of next year, with the contract award in the late summer and with the GoCo standing up, if that is the solution we choose, towards the end of next year or at the very beginning of 2015—around December or January.

--- Later in debate ---

[Mr Arbuthnot]

Oh, good. One problem is that the date for the invitations to negotiate has already slipped. That was meant to take place this month, but it is now taking place in August. Let us hope there is no further slippage. We have not heard that any is expected; let us just hope.

[Peter Luff]

My right hon. Friend is making an important point. I hope that when the Minister winds up the debate, he will provide some clarity about the invitations to negotiate. They must not be allowed to slip beyond August, as any further slippage would put at risk the rather challenging timetable that the Secretary of State has outlined.

[Mr Arbuthnot]

My hon. Friend, as a former Minister responsible for defence procurement, has a great deal of expertise. Despite the enormous qualities of his successor, I was very sad to see him leave his job. He has got this point absolutely right.

I am going to divide the final question on this defence procurement issue into three. We understand that the process of moving towards a GoCo, if a GoCo is accepted, will be taken in two stages, with perhaps one domain paving the way to be followed by the rest of defence procurement. My questions are: first, what will be included in the first domain? Secondly, how long will it take for the Government to work out whether it has succeeded, so that the remainder of defence procurement joins the first domain? Thirdly, how will anybody work out, within a period of less than 10 years—many of these defence contracts run for so long—whether this approach has succeeded? My suspicion is that the success of this entire process will be able to be judged only in about 2020. I wish it well and, as I said at the beginning, I am attracted to the idea.

On single-source contracts, the House will be relieved to hear that I have not got very much more to say. I am not sure why this matter requires legislation, because for many decades we have been spending 40% of the defence budget without legislation. It may be that there is a tearing and pressing need for legislation or that the setting up of the regulator is what requires legislation, but no doubt that can be explained. It is startling that the MOD will be able to challenge a contract price already agreed between the parties up to two years after the completion of that contract. I would have thought that would make it a bit difficult for industry to decide how to invest, but, again, no doubt the Minister will deal with that in his wind-up. Will these new rules apply to overseas contractors? Apparently they will not. Does that not create an incentive for UK defence contractors to move abroad? That would be a shame.

Part 3 of the Bill deals with the reserves—once again, I declare an interest because my daughter is one of them. I keep asking this, but I am told that repetition is no shame in a politician: what plan does the Prime Minister have to form an alliance with the Leader of the Opposition and to go out and make it absolutely plain that this reserve forces project must succeed, in the national interest. It must succeed because there is no plan B. Much of the plan has already been welcomed by industry. I think there is a greater job to be done by industry in saying that this must succeed in the national interest, and by the FSB, which, as I say, supports it. Some measures in the Bill—for example, the extra notice for the deployment of reservists—will certainly make things easier for employers. The £500 extra payment has been welcomed by the British Medical Association, as well as by the FSB and others. Perhaps there is more to be done in order to sell this, but the success of the entire process is essential. I welcome this Bill and this part of it as being in the national interest, and I hope that the Prime Minister will be able to get out there and say so himself.

Reserve Forces

Lord Arbuthnot of Edrom Excerpts

Wednesday 3rd July 2013 Commons Chamber

[Mr Hammond]

I was intending to open my remarks by apologising for the evident delay in distributing these summary sheets. The summary sheet I referred to relates to the basing and structure statement that has been made today as a written statement. However, I felt that Members would wish to have a summary of the most important element of that—the base closures—and it was my intention, Mr Speaker, with your permission to distribute that sheet as I sat down at the end of my statement, and I deeply regret that it was not available until just a few moments ago. I am also not aware that it has been distributed outside this House.

I am grateful to the right hon. Member for East Renfrewshire (Mr Murphy) for his broad support for these measures. We have discussed these issues before, and I know the Opposition wish these measures to succeed. It is our intention that the reserves, and, as the right hon. Gentleman said, civilian contractors, will play a crucial role in the delivery of Future Force 2020, and the integrated regular reserve whole force will be at the centre of that construct.

The right hon. Gentleman referred to “longer deployment periods”. It is not the intention to increase the maximum length of deployment period. That will remain as now, usually six months in an enduring operation, with a period of pre-deployment training to precede it.

The right hon. Gentleman asked about transparency and security, and mentioned specifically the context of Northern Ireland. This is a perfectly fair point. We want to be as transparent as possible with employers, and we want to recognise employers, but we also recognise that there will be both employers and reservists who for various reasons will be reluctant to be identified, and we will, of course, respect that as we deliver this agenda.

The right hon. Gentleman asked about small and medium-sized enterprises. We have today introduced a very significant bonus for SMEs, with a £500 per month per reservist cash bonus on top of the other allowances that are already available for SMEs when an employee reservist is called up for operations, but the right hon. Gentleman is absolutely right: on top of the cash inducement, flexibility is crucial to SMEs, and we will continue to exercise flexibility in dealing with requests for postponement.

The right hon. Gentleman asked about public sector employers. I absolutely agree that the public sector must lead the way. Central Government have already set out a very generous offer to reservist employees in excess of that which is statutorily available. We are challenging the wider public sector to match that, and the NHS is already a very considerable provider of reservists, but I should just clarify that public sector employers are not eligible for the financial inducements we have announced today, and, indeed, for the ones that were already available.

The right hon. Gentleman referred to the issue of discrimination at the point of hiring. As he knows, the consultation response identified that some 46% of reservists reported a perception of discrimination at some point either in the workplace or in applying for work. We have announced in the White Paper that we are today establishing a website at which reservists can report incidences of perceived discrimination, which we will then investigate. If we discover that there is a case for further action, we will take it, including considering the possibility of further measures in the next quinquennial armed forces Bill, which is due for introduction in 2015.

The right hon. Gentleman asked about the specific issue of the spare room subsidy as it affects members of the reserve forces. We have been clear about that. There is a section in the White Paper on benefits and related matters. If the situation is still not clear to him after he has looked at that, I will be very happy to clarify further, although the Department for Work and Pensions is, of course, the lead Department on this matter. I can say this to the right hon. Gentleman, however: where any adult member of the reserves is deployed on operations or pre-deployment training and is called up and as a consequence vacates a room in their parents’—or another person’s—house, that room will not be treated as unoccupied for the purposes of calculation of the spare room subsidy.

[Mr James Arbuthnot (North East Hampshire) (Con)]

I declare an interest in that my daughter is a member of the Territorial Army.

I know my right hon. Friend and the entire House will wish to pay tribute to my hon. Friend the Member for Canterbury (Mr Brazier) for what is by any standards an astonishing parliamentary achievement. Does my right hon. Friend agree that there is no plan B, and that it is absolutely essential that this reserves plan succeeds? Will he therefore persuade our right hon. Friend the Prime Minister to join forces with the Leader of the Opposition to make it absolutely plain to employers that the success of this strategy is vital in the national interest?

[Mr Hammond]

My right hon. Friend is, of course, absolutely right. The success of this strategy is vital in the national interest, and I very much welcome the fact that the Opposition have approached the matter in a bipartisan fashion, challenging and questioning us where appropriate, but supporting the basic principle of expanding the reserve forces. I would be very happy to suggest to my right hon. Friend the Prime Minister that he make a joint approach to employers with the Leader of the Opposition. I am sure both of them share the view that the support of the employer community is critical to the success of this project.

Oral Answers to Questions

Lord Arbuthnot of Edrom Excerpts

Monday 17th June 2013 Commons Chamber

[Mr Hammond]

The adequate resourcing of European NATO members’ defence budgets was raised, but—as I have already said in the House—we must also be realistic about the situation that most European countries are facing in their public finances. The more fruitful vein for the next few years will be to ensure that we get true deliverable military capability with the budgets that countries already spend.

[Mr James Arbuthnot (North East Hampshire) (Con)]

I know my right hon. Friend believes that NATO’s output is more important than the 2% target of defence spending, but does he accept that if we abandon that 2% target, we will reduce the pressure on improving the output from NATO?

Better Defence Acquisition

Lord Arbuthnot of Edrom Excerpts

Monday 10th June 2013 Commons Chamber

[Mr Hammond]

I am grateful to the right hon. Gentleman for his welcome of this announcement. Of course I completely accept that the Opposition’s willingness to look at the issues with an open mind is not the same as an uncritical endorsement of the GoCo concept, and just in case I did not make this clear in my opening remarks, we have not yet accepted the GoCo concept as the chosen outcome; we are conducting an assessment. However, I think we agree across the House—Opposition Members who have, in office, experienced the challenge of trying to make the defence budget add up will certainly agree—on the need for change. The intentions are very clear.

The process that we are talking about was kicked off by the Gray report, published in 2009. I note that the then Secretary of State has strongly endorsed the GoCo model, which he feels is the way forward. We are examining the case for GoCo against the baseline of DE&S+. We have two separate teams, working with Chinese walls between them, that are equally resourced. One is trying to build the maximum fully-public-sector case that it can, taking advantage of all freedoms and flexibilities available. The other is working with potential GoCo bidders to look at the value that they can deliver. At the end of the process, we will make a comparison.

The right hon. Gentleman talked about the cost drivers from past scope creep. One of the clear advantages of changing the way that DE&S works is creating a harder boundary between the customer and the company supplying the requirements, making it less easy for scope to creep without a proper change process and proper recognition of the costs involved. He asked me whether the baseline would be re-costed. We do not anticipate a re-costing of the programme baseline. If we go down the GoCo route, we will negotiate with GoCo bidders for an incentivised fee structure, based on the existing costed programme. He will know that an independent cost advisory service sits alongside DE&S, and will play a continuing role in independently assessing the costs of projects and the appropriate level of risk to be attached to them.

Unsurprisingly, the right hon. Gentleman asked me about staffing levels in a post-GoCo DE&S, if GoCo is the selected solution. The staffing transfer would be made under the TUPE regulations. We anticipate about 8,000 of DE&S’s projected 14,500 2015 staff numbers transferring to the new entity, with the remainder—in naval dockyards, logistics, communications, and information services—remaining in other parts of Government, or being outsourced.

There is no reason to suppose that the GoCo route is more likely to deliver further staffing reductions than any other route. Clearly, the new management team, whether it is a GoCo or DE&S+, will seek to run the business efficiently, and to use the freedoms and flexibilities available to it to deliver outputs as effectively as possible.

The right hon. Gentleman asked me about the ratio of military to civilian personnel in DE&S. At present about 25% of the personnel in DE&S are military. We expect the military role, which will be performed by secondees in the future, to focus on providing specifically military advice to the DE&S organisation, rather than filling line management and project management roles, so I do not expect the military proportion of staff to increase, and it may decrease under a future model.

The right hon. Gentleman asked me a question, the motivation for which I entirely understand, about senior officials. Nobody wants to see such exercises becoming a gilded exit route for senior officials, and I am pleased to be able to tell him that the Chief of Defence Matériel, the most senior official in DE&S, will transfer to the MOD side—the customer side—of the equation and will be responsible for designing and managing the customer side. I cannot, as the right hon. Gentleman knows, give him an absolute assurance that other officials in the Department, should they choose to leave the Department, would not at some point in the future be able to join a GoCo, but of course there are rules and restrictions in place—a Cabinet Office regime which has been reinforced following revelations in The Sunday Times last year—and we will make sure that nobody is able to abuse this process.

The right hon. Gentleman asked me whether the GoCo would cover the nuclear deterrent. It will certainly cover the procurement of Vanguard replacement submarines. The management of our nuclear warheads is carried out by the Atomic Weapons Establishment, itself already a GoCo. We have not yet finally decided whether the new GoCo, if there is one, will be responsible for managing the MOD’s relationship with AWE or whether that will be managed directly. That will be one of the issues dealt with in negotiation with potential GoCo bidders.

On timescale, I can tell the right hon. Gentleman that we expect to reach a decision in the summer of next year, with a view to the new arrangements, whether GoCo or DE&S, being stood up before the end of 2014.

Finally, I turn to the question of risk ownership. This is an important point which has been somewhat misunderstood by some commentators. Clearly, it would be very attractive to think that we could transfer the programme risk in the defence equipment programme—£160 billion of it—to somebody in the private sector, but the reality is that there is nobody who has a balance sheet big enough, probably anywhere in the world, and the taxpayer would not be prepared to accept the price for taking on that risk, so the risk ownership in the programme will remain with the Government and the taxpayer. What the private sector partner will be at risk for is his fee, which will be structured in such a way as to incentivise the delivery of the key performance indicators that will be agreed with the partner during the negotiation process. That will be designed to align the GoCo partner’s incentives with the interests and priorities of the Department. That is where a great deal of our time and energy is being invested at present.

[Mr James Arbuthnot (North East Hampshire) (Con)]

What discussions has my right hon. Friend had with key allies, notably the United States and France, about this proposal and what has been their response?

[Mr Hammond]

I thank my right hon. Friend for a very important question. We have had discussions with key allies, notably the United States and France. The United States, contrary to some media reporting, is relaxed about this process. It recognises that there will be some technical issues that we need to resolve, but I am glad to be able to tell him that the Chief of Defence Matériel received this morning, by coincidence, a letter from his counterpart, the Under-Secretary for defence procurement, in the Pentagon confirming that the United States is confident that it will be possible to make these arrangements work. We have set up a joint working group to work through the issues that will need to be addressed before a decision is made.

Oral Answers to Questions

Lord Arbuthnot of Edrom Excerpts

Monday 15th April 2013 Commons Chamber

[Mr Hammond]

I am not going to pre-empt the outcome of SR 13; nor am I going to conduct the spending review in public. My Department is engaged in analysis with the Treasury and the Cabinet Office, in search of genuine efficiency savings. Where we can find such savings, for example in the equipment support programme, the Ministry of Defence will willingly do its bit to contribute to fiscal consolidation. I will, as you would expect, Mr Speaker, argue vigorously for the resources that Defence needs to deliver Future Force 2020 in accordance with the strategic defence and security review 2010.

[Mr James Arbuthnot (North East Hampshire) (Con)]

A few weeks ago, the Prime Minister told the House that he continued to hold the “strong view” that the overall defence budget should rise in real terms from 2015 onwards. When will that prime ministerial wish become Government policy?

[Mr Hammond]

I can confidently predict that the Prime Minister will be involved and will be a key player in the end game of the SR 13 discussion.

Oral Answers to Questions

Lord Arbuthnot of Edrom Excerpts

Monday 25th February 2013 Commons Chamber

[Mr Hammond]

The Prime Minister has made it clear that he stands by his view that the equipment plan budget needs to increase in real terms, and we have a pledge from Her Majesty’s Treasury that we may plan on the assumption of a 1% real-terms increase. Our planning assumption is flat real-terms growth for the remainder of the budget.

[Mr James Arbuthnot (North East Hampshire) (Con)]

I do not think that that was precisely what the Prime Minister said. Nevertheless, does my right hon. Friend the Secretary of State agree that if we possibly can we should continue to meet the NATO objective of spending at least 2% of our gross domestic product on defence?

[Mr Hammond]

I agree with my right hon. Friend. The plans that we have set out do indeed show that we will continue to comply with that 2% threshold.

Maritime Surveillance

Lord Arbuthnot of Edrom Excerpts

Thursday 7th February 2013 Westminster Hall

[Mr James Arbuthnot (North East Hampshire) (Con)]

We are an island. That makes what happens around our coasts of great importance to us. We are a member of the permanent five in the UN Security Council, of the Commonwealth, of the European Union, of NATO and of other organisations, which, added together, means that we are a world power, with global responsibilities and interests. That makes what happens in the seas of the world of great importance to us.

We are a trading nation. We are a nation that cannot, or at any rate does not, feed itself. We rely on food, as well as countless other goods, from abroad. Most of that comes by sea. That makes what happens at sea of great importance to us. We operate under the conditions of “just in time”. Those wonderful warehouses in London’s docklands have now been turned into rather chi-chi flats, and we no longer have the reserves to feed, fuel or supply the country for many weeks, let alone months. That makes us vulnerable.

It is because of all the crucial interests that I have outlined that the defence of our country is of such importance. Within that defence, maritime surveillance plays a central role. Therefore, the Defence Committee decided to conduct an inquiry into it. We called the inquiry “Future Maritime Surveillance”, because we wanted to focus not on the decision to cancel the Nimrod MRA4 programme, the successor to the MR2, in the strategic defence and security review, but on the future needs of the nation and how, given where we are now, we could address those needs. Obviously, however, the cancellation of Nimrod was a big matter, and I shall consider that first.

Let us be clear about Nimrod. It was late—very, very late. It was vastly over budget, at a time of deep financial stringency. It was an aeroplane that had serious aerodynamic problems. It was, in other words, a deeply troubled project—and no doubt one for which, in the usual way, I should take the blame as Minister for Defence Procurement between 1995 and 1997.

[The Minister for the Armed Forces (Mr Andrew Robathan)]

Quite right!

[Mr Arbuthnot]

No, that was a joke—at least, I think it was. But the cancellation of the project was the one change that troubled the Ministry of Defence most in the SDSR. The Vice-Chief of the Defence Staff told the Defence Committee:

“It would be fair to say that among the Chiefs of Staff and in the military advice, it was one of the most difficult decisions to come to terms with, because it has multiple uses.”

In the Government’s answer to the concerns that the Defence Committee expressed in our report on the SDSR of August 2011, they said:

“Like the Committee we regret that we had to cancel the Nimrod MRA4 programme. It was a capability that we would, in an ideal world, have preferred to acquire…we reluctantly concluded that cancellation was the least bad option.”

The reason for that unhappiness was described to us by Professor Julian Lindley-French. He told us that

“the point is that of the seven military tasks in the SDSR, the MRA4 could have played a very important role in all of them. It was the loss of the enablers, because the single services were forced back to defend their own core competencies by the process, which for me was the biggest failing of the SDSR process. Forget all the strategic stuff: there was a haggle at that last weekend, which was utterly unacceptable in terms of the national strategic requirements.”

The report that the Defence Committee produced earlier this week on defence acquisition contains a bit of an echo of that statement.

In our report on the strategic defence and security review, we expressed concern about the resultant capability gaps of cancelling MRA4. In their response, the Government acknowledged that there is currently no single asset or collection of assets that could fully mitigate the resultant capability gap. That is enough about Nimrod; let us look at the other assets and look to the future.

The Government said in 2011 that they continued

“to maximise the use of…assets”—

other than Nimrod—

“such as Type 23 Frigates, Merlin Helicopters, Sentry and C-130 to contribute to Anti-Submarine Warfare, Search and Rescue and Maritime Counter-Terrorism where possible. In the longer term, if the Government were to conclude that it needed to close the gaps completely because”

threats emerged that could no longer be managed in the same way as today,

“some additional funding or reprioritisation would be required.”

In our report, “Future Maritime Surveillance”, we concentrated on the strategic requirements for maritime surveillance, identifying current capability gaps and the future requirements for maritime surveillance and how they might be met. Given the wide range of maritime surveillance tasks and the number of Departments and agencies that require access to maritime surveillance capabilities, we also looked at cross-Government co-operation. We published our report in September 2012 and the Government’s response in December 2012. We have also placed on our website the Minister’s response to some follow-up issues that we raised following the Government’s response. I am grateful to him for that.

I pay tribute to the Committee’s staff and military advisers, who provide us with invaluable support and advice. We are all grateful to them. I would like to thank personally the Committee members themselves. They work extremely hard to very good effect, which is one of the reasons why chairing it is the best job that I have ever had.

[Thomas Docherty (Dunfermline and West Fife) (Lab)]

I thank the right hon. Gentleman for giving way and I apologise for being slightly late. May I point out that the reason why it is such a good Committee is that its Chairman is so excellent?

[Mr Arbuthnot]

The hon. Gentleman might say that, but as a former Chief Whip, I couldn’t possibly comment.

The threats that require maritime surveillance are evolving and have become more non-military in nature. The Mumbai terrorist attacks in 2008 rather illustrate that, in that they were launched from the sea. Our report concluded that it was a weakness that there was not a single individual within the Ministry of Defence who should be responsible for maritime surveillance. The Government did not agree.

We acknowledged that the new joint forces command could have a role in delivering, co-ordinating and strengthening maritime surveillance. We are nevertheless disappointed that the Government do not think that there is a requirement for an individual within the MOD to take responsibility for maritime surveillance. We accept that it is not the JFC’s role, but we are concerned that the left hand of the MOD may not know what its right hand is doing, let alone be able to co-ordinate the interests of the MOD with all the other Departments and agencies that require maritime surveillance capabilities.

Here I begin a number of requests to the Minister for information, which I will be grateful if he responds to, if not in today’s debate, perhaps in writing later, with whatever degree of classification he considers necessary. It will be helpful if he first outlines how the co-ordination that we are concerned about is being taken forward, particularly as the MOD starts work on the 2015 SDSR. Our concerns were highlighted when we were told that there was an “informal group of Ministers” who were responsible for taking forward maritime surveillance issues.

Although decisions may ultimately be taken in Cabinet or the National Security Council, we thought there should be greater ministerial involvement. This contains an echo of our report, “Defence and Cyber-Security”, published in January this year and our report, “Developing Threats: Electro-Magnetic Pulses”, published in February last year: we worry that Ministers faced with a threat or a vulnerability that crosses departmental responsibilities have inadequate structures and insufficient practice in getting together to work out responses, which may be needed very quickly indeed.

Against that, we welcome the establishment of the maritime security oversight group and the National Maritime Information Centre. The Government told us that the risk assessment was expected to be completed in December 2012. Will the Minister update us on progress? What threats, including new ones, have been identified? Such strategic analysis is important. Future threats are increasingly likely to be identified through intelligence gathering.

Maritime ISTAR—forgive the acronym, which stands for intelligence, surveillance, target acquisition and reconnaissance—of which maritime surveillance is a part, will be essential. Without effective surveillance, both maritime and elsewhere, the UK armed forces are operating at a much reduced effectiveness.

[Sir Bob Russell (Colchester) (LD)]

As the Chair knows, we are holding an inquiry into the consequences to the UK of an independent Scotland. How would Scotland becoming an independent state impact on future maritime surveillance for England, Wales and Northern Ireland?

[Mr Arbuthnot]

Maritime surveillance is carried out at the moment in a nationwide fashion. To my mind, it is difficult to see how smaller units or entities could have a separate capability not backed up by MOD resources. We as a Committee have not reached that conclusion however, as my hon. Friend knows, because we have not yet concluded our inquiry into the defence consequences of an independent Scotland. When making their decision on independence, the Scottish people will need to take that issue very seriously into account. I am grateful to my hon. Friend for raising that important point.

The 2010 SDSR gave a commitment to enhancing ISTAR. In reply to the debate or later, will the Minister say what progress has been made in taking forward the development and strengthening of maritime ISTAR? What actual measures can he tell us about? What risk are the Government taking in delivering maritime ISTAR for the future?

Our report also looked at the future of maritime surveillance capabilities and what was required. We thought, frankly, that the MOD was sending out mixed messages. On the one hand, its studies identified a maritime patrol aircraft as the solution in the short to medium term, but on the other hand, a maritime patrol aircraft is not in the equipment programme. The MOD seems prepared to wait until the 2015 SDSR before making any decisions or assessing options. It seems to regard the risk as tolerable, on the basis that such equipment could be bought with unprecedented speed and efficiency. I have high hopes for the MOD’s acquisition process being reformed dramatically, but that might be the triumph of hope over experience.

[Penny Mordaunt (Portsmouth North) (Con)]

Does my right hon. Friend acknowledge that the report found that, though we had concerns over the situation in the short to medium term, the MOD has begun to explore options for future maritime surveillance in the much longer term, looking at unmanned systems and space technology in particular?

[Mr Arbuthnot]

I do acknowledge that. My hon. Friend, whose membership of the Select Committee is extremely helpful, anticipates a point that I was about to come on to—as I would expect her to.

Situations change rapidly: we have been deployed in Libya, and we are now involved in Mali. The question is whether the Ministry of Defence could rapidly regenerate a maritime surveillance requirement. Will the Minister set out what general contingencies are in place to deal with the unexpected? The problem is that he probably cannot, because they are unexpected, but we nevertheless need to have a general ability to deal with contingencies.

We also highlighted the potential for further capability gaps to emerge in maritime surveillance. For example, the Sea King will be taken out of service in 2016, to be replaced by Project Crowsnest, operating from Merlin mark 2 helicopters. The Minister has now confirmed that there will be a capability gap, as Crowsnest is not coming into service until 2020 and existing assets will be required to cover the gap. Will he tell us why that gap has occurred, and why it was not better anticipated?

In the longer term, as my hon. Friend the Member for Portsmouth North (Penny Mordaunt) rightly points out, the Government have committed themselves to exploring all the alternatives for maritime surveillance provision, including unmanned aerial vehicles and hybrid air vehicles. We commend them on that approach and the work that they have already undertaken to facilitate it.

We are grateful to the Government for their commitment to keeping us updated on the issues and to including wider cross-Government issues in such updates. We look forward to the first update in summer 2013, and to the second in summer 2014. We expect the updates to be as full as possible and in a form that we can share as widely as possible. An important part of the work on future maritime surveillance will be specific work in the run-up to the next SDSR. Some might say that that will be the most important part of the next defence review.

[Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)]

I, too, welcome the opportunity to take part in this debate. As our Chairman, the right hon. Member for North East Hampshire (Mr Arbuthnot) said, a great deal of hard work went into the production of the report. I add my thanks to the Clerks and special advisers to the Committee. The report makes a very positive contribution to the debate on the future of maritime surveillance.

As the Chairman also said, the Committee has previously expressed serious concerns about the decision in the 2010 strategic defence and security review to cancel the Nimrod MRA4 programme. Despite all the associated problems that the Chairman rightly mentioned, its cancellation involved a vast waste of public money; even so, as he also said, the MOD described that as the least worst option—I dread to think what the other options would have been. The cancellation has been analysed and re-analysed by the Public Accounts Committee and others, and in any case it is a fait accompli, so instead of dwelling on that, it seemed logical for the Committee to concentrate on its consequences, and those of other decisions in the SDSR, for maritime surveillance now and in the future.

[Mr Graham Brady in the Chair]

Given that the protection of the nuclear deterrent would have been one of Nimrod’s primary roles, one main concern about the cancellation is the capability gap in deterrent protection that might arise. I for one—I may be the only one here—would like the nuclear deterrent to be cancelled altogether. However, the former Defence Secretary Lord Browne has called into question the like-for-like renewal of Trident, suggesting that people who support it

“want to pour limited national resources into an increasingly ineffective nuclear system while being unwilling either to call for higher defence spending to meet conventional shortfalls or to scale back the UK’s level of international ambition. They want a gold-standard nuclear deterrent while under-investing in everything else.”

We all know that many within the military share that perspective. At the very least, that is worth considering and, for example, it would free resources to fill the capability gap in maritime surveillance in relation to new threats.

We do not have the luxury of a crystal ball and must look at circumstances as they are. We know that it is almost universally accepted, including by the MOD, that a replacement maritime patrol aircraft programme would, along with other assets, afford the optimum capability for the next 20 years, but that will not be seriously considered until at least 2015. Will the Minister update us on that situation, because that seems an awful long time?

I want to concentrate on the capability gap as it affects the nuclear deterrent. To understand the implications of cancelling the Nimrod programme, it is useful to look at the wider assets that, historically, have been involved in the protection of the nuclear deterrent. For understandable reasons, the MOD is cautious about providing too much information about that. In 2007, the hon. Member for North Devon (Sir Nick Harvey) received an answer to his parliamentary question on the conventional forces that had either a committed or a contingent role in the protection of the nuclear deterrent which stated:

“In addition to the four Vanguard-class submarines, all of which are dedicated to Military Task 1.2—Nuclear Deterrence—the current planned force elements assigned to support nuclear deterrence are”—

in a primary role, one mine warfare vessel and one survey vessel and, as contingent, two attack submarines, one destroyer, three mine warfare vessels, one Royal Fleet Auxiliary vessel, five Merlin helicopters and eight maritime reconnaissance aircraft. The broad order estimate of the costs was £25 million to £30 million for committed and about £250 million to £300 million for contingent for a range of tasks, including

“in support of the deterrent.”—[Official Report, 8 March 2007; Vol. 457, c. 2130-31W.]

In evidence to our Committee in November 2010, General Sir David Richards also made the point that maritime surveillance aircraft provide one of five layers of defence for the SSBN fleet, although he would not go into detail about those layers of activity, again for understandable reasons.

The fact remains that a gap in capability in the protection of the deterrent exists, and we need answers about what is to be done to fill the gap in the medium to long term. The Royal Navy SDSR question and answer document states:

“The NSC judge that there is a sufficient balance of capabilities within the SSBN, SSN, Frigate, RW”—

rotary wing—

“and MCM fleets to maintain the required level of assurance for CASD”—

continuous at-sea deterrence, and that the—

“decision to delete MRA 4 was made after carefully considering the risks associated with this.”

In written evidence to the Committee in 2012, the MOD specifically flagged up the following assets as playing a role in the protection of the nuclear deterrent: the SSN fleet—Trafalgar and Astute class—although the MOD highlighted that the primary role of the SSN is anti-submarine and anti-surface warfare, including protection of the deterrent; and the Merlin HM mark 1 helicopter, which, the MOD noted,

“has evolved organic Anti Submarine Surveillance to a Maritime Patrol Helicopter multirole capability deployed globally and in support of the strategic deterrent.”

The MOD also informed our Committee that several international agreements allow allies to contribute directly to UK surveillance tasks in support of deterrent protection.

Of the list of assets alluded to in the SDSR, the Merlin HM mark 1 is the only asset whose primary role involves maritime surveillance. There are 40 Merlin helicopters in service with the Fleet Air Arm, in both training and front-line squadrons. All four squadrons are based at Royal Naval Air Station Culdrose in Cornwall. The helicopters have a range of 450 miles, and I understand that they are being upgraded to mark 2 and will enter service as such this year. Will the Minister confirm that?

With the indulgence of the House, Mr Brady, I will raise a local issue. The HMS Gannet search and rescue service at Prestwick airport will close in the next few years. It straddles my constituency and that of my hon. Friend the Member for Central Ayrshire (Mr Donohoe). The airport is extremely important to our local area, and indeed to Scotland. It is suffering at the moment as a result of a number of factors, including the air passenger duty, and it is up for sale.

It seems daft on the surface that the Merlin helicopters, which protect the deterrent, are based hundreds of miles away in Cornwall when there is a site available on Faslane’s doorstep that has been used by helicopters for years. I urge the Minister to consider that matter, which may be small-scale in the grand scheme of things, but it is important to us locally, and I do not think that any Member will fault me for raising it.

To get back to the capability gap, several commentators gave evidence to the Committee, outlining their concerns about the potential shortcomings of helicopter maritime surveillance as a replacement for maritime patrol aircraft. The Coastal Command and Maritime Air Association said:

“The absence of the MPA together with a shortage of Towed Array fitted escorts, and the possible re-tasking of SSNs to land-strike targets (Tomahawk), results in a much reduced ASW capability. The helicopter is an effective ASW platform when operating relatively close to their base or battleship, but inevitably it has limited range and acoustic processing capability as well as restricted weapon-carrying capacity. Modern underwater detection systems using arrays fixed to the ocean bed and towed arrays on surface vessels—if one of those relatively few assets is available—can produce impressive results, but bad weather and noisy environments, both in the open sea and particularly at choke points, can totally disable these systems.”

Air Vice-Marshal A. L. Roberts, who is retired, also commented that

“while helicopter surveillance, in lieu of that by MPA, in support of the deterrent is entirely practicable in the approaches to Faslane, the range of the helicopter, if it is to remain on station for long, is limited. Adequate cover for the deterrent therefore becomes more difficult further out along transit routes and may be impracticable in SSBN patrol areas. The amount of noise generated in the water by a helicopter, which can be counter detected by any opposing submarine, is also a significant operational limitation.”

In March 2011, an article in Defence Management said:

“Mitigating the lack of Nimrods when it comes to clearing a path for Trident will be very asset-intensive in terms of Merlin ASW and towed-array frigates. But it is manageable. Just don’t expect those helicopters or frigates to be doing every task around the world that they currently undertake”.

My hon. Friend the Member for Bridgend (Mrs Moon) raised the matter in a debate in the Chamber on 26 January 2012. She is not here today because she has a constituency engagement. I am sorry about that because she really concentrates on this issue and is something of an expert on it.

[Mr Arbuthnot]

I entirely confirm what the hon. Lady has just said. The hon. Member for Bridgend (Mrs Moon) was the first to demand this inquiry, and has led it throughout. We are grateful to her for her commitment, even though she is not here today.

[Sandra Osborne]

That is entirely true. In the debate in the main Chamber, my hon. Friend referred to a letter that the right hon. Member for North Somerset (Dr Fox) sent to the Prime Minister in which he said:

“Deletion of the Nimrod MR4 will limit our ability to deploy maritime forces rapidly into high-threat areas, increase the risk to the Deterrent, compromise maritime CT (counter terrorism), remove long range search and rescue, and delete one element of our Falklands reinforcement plan.”—[Official Report, 26 January 2012; Vol. 539, c. 466.]

Will the Minister tell us the state of play of these matters as they stand today?

My hon. Friend also referred to an article in The Scotsman, which said that a Type 42 destroyer had to be detached from Portsmouth when a Russian navy battle group appeared off the coast of Scotland. A number of Russian submarines have also made a similar appearance. Previously, we would have swiftly and discreetly despatched a Nimrod to keep an eye on the situation, but, on this occasion, we sent out a Type 42 destroyer. Clearly, that illustrates a problem; we do not know what is going on in such areas without a maritime patrol aircraft.

It is also the case that the north of Scotland, which is referred to as the “high north”—that is not something that I can identify with, as I refer to it as the highlands and islands—needs close attention as it is an area of strategic and economic importance in a fast-changing environment. I hope that the fast change does not include Scotland becoming a separate country from the UK as opposed to being the north of the UK, but I will not go down that road now. The Chairman of the Select Committee has already stated that we are in the throes of an inquiry into the defence implications of an independent Scotland.

I welcome the Minister’s input into these matters, which have been brought to the Committee’s attention by people who are astronomically more expert than I am, and I look forward to his response.

--- Later in debate ---

[Bob Stewart]

I thank my hon. Friend. I certainly do agree. It is good that we have those bodies, and I may speak about that a little at the end.

SDSR 2010 got rid of a number of frigates, including Type 22s and Type 23s, as well as their on-board helicopters. That has further reduced our maritime reach and capabilities. The good thing about such Royal Navy vessels is that they can travel great distances, remain at sea for considerable periods and, crucially, demonstrate intent and presence when that is needed, as part of a combined taskforce or individually.

Collectively, members of the Defence Committee are concerned about the loss of our sovereign long-range maritime surveillance capability. They are also concerned about the United Kingdom’s current dependency on its allies for operations out into the Atlantic and in terms of our wider military defence capability.

The Committee was advised that the anti-submarine warfare capability gap that resulted from the loss of the Nimrod MRA4 is covered by a mix of helicopters, ships at sea and support by our allies. I do not buy that argument. The external situation has not changed. Indeed, with a resurgent Russia and the proliferation of smaller submarines in many areas of the world, it has arguably got worse. To counter such threats, the UK has reduced its capability and capacity by removing maritime patrol aircraft completely, as well as by removing appropriate frigates and destroyers, including their organic helicopters.

As has been mentioned, the Ministry is considering a number of future options. In particular, a decision on maritime patrol aircraft may be considered as part of SDSR 2015. However, such a decision would result in delivery of the new operational capability closer to the 2020 time scale. I would prefer us not to wait until 2015 to make such a decision. I would like it to be considered as soon as possible.

[Mr Arbuthnot]

Will my hon. Friend give way?

[Bob Stewart]

To my Chairman? With the greatest of pleasure.

[Mr Arbuthnot]

Mr Brady, you are our Chairman, of course.

[Bob Stewart]

Forgive me, Mr Brady. Two Chairmen in one—I’ll buy it.

[Mr Arbuthnot]

My hon. Friend danced lightly over the possibility of regenerating the capacity and the skills to fly these aircraft. Such skills are difficult to maintain, let alone to regenerate. Is he coming to that important point, which needs to be covered?

[Bob Stewart]

I thank my other Chairman. The answer is that I was not, but I am glad that he has raised the matter. We also highlighted the difficulty of keeping these skills alive, and no one has mentioned it. Perhaps the Minister will tell us—you will, won’t you, Minister?

--- Later in debate ---

[Thomas Docherty]

As I said, I know that my hon. Friend played no part in the decision to proceed. I cannot quite remember who was the Minister responsible for acquisition in the previous Conservative Government, but perhaps it will come back to me later in the debate.

Not just Ministers need to take some responsibility for mistakes; Ministry of Defence officials and the Royal Air Force need to take some, too. There was an 86% change in the aircraft specification from the time of commissioning under that previous Minister and October 2010. Mr Brady, you worked in industry prior to coming to the House. You know that making that amount of change to a project means that costs will go up and it will be delayed.

[Mr Arbuthnot]

Does 86% of the blame therefore need to lie with the Labour Government?

[Thomas Docherty]

I am sure that a previous Minister with responsibility for defence acquisition would always be happy to take responsibility for all the decisions that he made, even if he was not always fully aware of that at the time.

As our report on acquisition makes clear, the MOD must learn the lessons of past acquisition decisions. I think that I speak for the whole Committee when I say that, although we welcome the Government’s progress on acquisition, we are not convinced that they have learned all the lessons yet. There is still more work to be done. Perhaps the Minister will say more about what improvements can be made, in the light of those lessons.

The third responsible party is BAE Systems. It should not sit around and blame the MOD, the RAF and the two Governments, and try to get by without accepting some responsibility for its decisions. The Minister nods, and I welcome the fact that there is acceptance on both sides of the Chamber that BAE was not an exemplar: in much the same way as I have been critical of Lockheed Martin’s approach to the strike fighter, I consider that BAE Systems bears some blame.

--- Later in debate ---

[Thomas Docherty]

Well, I cannot possibly comment on the sums. However, that principle of not committing to a future increase in spending is exactly what this Government have done. We saw it again yesterday at Prime Minister’s questions, when the Prime Minister, in response to what was not the most difficult question from the right hon. Member for North East Hampshire, the Chairman of the Defence Committee—

[Mr Arbuthnot]

It was a very important question.

[Thomas Docherty]

Indeed, but in response to it the Prime Minister failed to give a clear commitment to increase spending.

--- Later in debate ---

[Mr Arbuthnot]

Perhaps the hon. Gentleman will be able to help us further? Has he heard Leader of the Opposition give a commitment to increase defence spending after 2015?

[Thomas Docherty]

I will say two things. First, I have heard my right hon. Friend the Leader of the Opposition speak on many occasions of his great appreciation for the role of our armed forces. Secondly, however, I am also fairly conscious that I am not sitting on the Opposition Front Bench—

[Mr Arbuthnot]

Yet.

[Thomas Docherty]

It may not be happening any time soon after my earlier remarks, and I will perhaps leave it to other colleagues—including perhaps my hon. Friend the Member for North Durham, who is sitting on the Opposition Front Bench—to address the right hon. Gentleman’s point later in the debate.

The hon. Member for Beckenham made a point about seedcorn. On pages 41 and 42 of the Committee’s report, we very clearly tackled the point about seedcorn and future remuneration. We welcome seedcorn as a principle; we very much welcome the notion that we would use our international allies to provide training and personnel support. However, we are also very clear that we do not believe that that can continue beyond 2019, and we actually say that there is huge scepticism about it continuing until 2030. The more that we have examined the issue—again, the Minister can correct me if he wants to—the more that it looks as though 2030 is the realistic time line now, in light of both our inquiry and of course our recent correspondence with the Minister, before we will get back that full capability. I wonder whether the Minister has absolute confidence that our partners—particularly our Five Eye partners—will be able to continue to provide that support to us for effectively 17 years, or perhaps even longer?

On replacement platforms, I hope that one of the things that the Minister reflects on, particularly given the BAE Systems debacle, is that there are other ways to procure replacement platforms. Of course, he will be aware of the model of Saab aircraft. In effect, an existing, tried and proven airframe is taken and then the software is fitted on to that system. Obviously, that model needs to be considered in the light of our report on Tuesday about the need for a defence industrial strategy. Can the Minister confirm whether or not the MOD is actively considering that model as one of the options?

There has also been mention of what the MOD has now called remotely piloted aircraft, which we know as unmanned aerial vehicles, and their future role. Again, there was talk about joined-up government. When we had the debate before Christmas, with the Under-Secretary of State for Defence, the hon. Member for Ludlow (Mr Dunne), who is the Minister with responsibility for defence procurement, the point was made by a number of colleagues that, in relation to maritime surveillance and the role of RPAs, a number of Departments clearly have an interest in maritime surveillance. The Minister might be able to correct me if I miss any on the list, but my note would say that, as well as the MOD, other Departments that have an interest in maritime surveillance include the Department for Transport and the Department for Environment, Food and Rural Affairs, which has lead responsibility for fishing and ensuring that Icelandic boats or, indeed, those of our European partners do not break the law. The Home Office has a role for maritime surveillance, as has the Foreign Office, with its responsibilities for overseas territories.

I hope that the Minister takes this as genuinely helpful advice: the Committee believes that we need a much more joined-up Government. Perhaps the Minister can clarify, in a way that the Minister with responsibility for defence procurement could not, what proactive steps the Department is taking to bring other Departments together to discuss whether we can have a shared acquisition policy for RPA, rather than having four Departments acting differently.

I think that, up to now, this has been a genuinely consensual debate, but the final issue I want to raise, which we touched on in the report, is slightly contentious with the Department. It is about the wide area maritime underwater search project. My colleagues know more about it than I do, so I will not go into any great detail. The Committee feels that WAMUS is an exercise that should have been carried out before or during the SDSR and not afterwards, while we were undertaking an inquiry. It was only after extensive questioning by the Chairman of the Committee and my hon. Friend the Member for Bridgend (Mrs Moon) that we discovered that the RAF and the Ministry of Defence had failed to tell us that the WAMUS project had not only started but had been completed while we were carrying out our SDSR inquiry. Air Vice-Marshal Green and the Minister’s predecessor both accepted that the information should have been shared with the Committee.

I am not suggesting that the RAF, the MOD and the Minister were malicious in withholding information, but I do suggest that there was either arrogance on the part of the Department—not the Minister—or incompetence. I think that it is fair to say that the Chairman of the Committee expressed his disappointment with both the Royal Air Force and the Minister. Mr Brady, I am sure that when the Chairman of the Committee was Chief Whip you never gave him the opportunity to express his disappointment in you. As one of the members of the Committee to whom that has occasionally happened, I can assure you that the Chairman’s disappointment is something that one does not seek to invoke. I hope that, in his response, the Minister will set out how the MOD has learnt the lesson of that mistake and how it is ensuring that the Committee is not let down by the Department again.

I commend the report to the House. This has been an excellent debate, and I look forward to hearing from colleagues.

--- Later in debate ---

[Sir Gerald Howarth (Aldershot) (Con)]

I am delighted to take part in this extended Defence Committee discussion in Westminster Hall, which is, of course, open to a wide audience. As a former member of the Select Committee, I take this opportunity to pay tribute not just to the Chairman, who is my next-door neighbour in Hampshire, my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot)—distinguished neighbour and Select Committee Chairman though he is—but to the entire Committee and its advisers for their detailed analysis of important policy and project considerations. In so doing, the Committee provides an immense service to not just the House of Commons, but the wider public and the Ministry of Defence and its officials.

I confess that I had not realised that the debate would be happening today, but as soon as I heard that it would be I decided that I would like to take part. This is the first time I have taken part in a detailed debate on defence matters since I ceased to be the Minister with responsibility for international security strategy at the Ministry of Defence, and I participate because I feel so passionately about the issue.

Maritime surveillance is of fantastic importance to this country and as my hon. Friend the Member for Beckenham (Bob Stewart) said in an intervention on the hon. Member for Dunfermline and West Fife (Thomas Docherty), it is not simply about the protection of the deterrent. I salute 201 Squadron and the other Nimrod squadrons that perform that fantastically important role. They provide a hugely important capability that is applicable all around the world; we face a much more dangerous and volatile world now than ever before. The capability also, as my hon. Friend the Member for Beckenham pointed out, has a civil dimension. We have responsibilities under the international convention on maritime search and rescue. I think that is what it is called; I tried to establish the exact title, although I seem to remember from my days in the Department that it is called the Chicago convention. As my hon. Friend said, the United Kingdom has an obligation to provide search and rescue right out into the Atlantic, but currently we are not able to provide that capability. It is important to see this as part of a jigsaw. It is not just the United Kingdom providing support for the United Kingdom and the international waters for which we have responsibility, but part of an interlocking NATO capability.

A year ago, I had the great pleasure and privilege of visiting Norway, where the royal Norwegian air force was kind enough to entrust me with its P-3 Orion. [Interruption.] My right hon. Friend the Minister need not worry; I came back safe and sound. I had the Norwegian Defence Minister as a passenger. It was an interesting experience because it enabled me to see not only what the maritime patrol capability delivers, but the role played by our allies. I pay tribute to the royal Norwegian air force for its part in policing the sea lanes between the Russian port of Murmansk and these islands. At 2 o’clock in the afternoon, when one is in complete darkness there, 1,000 feet over black, black water with no horizon and just endless water stretching to the Arctic, it is interesting to realise that without those people the sea lanes would not be patrolled. Mention has been made of the activity that the Russians undertake, and which their forebears in the Soviet Union undertook: sending their submarines around to the north-west coast of the United Kingdom, in particular to Scotland and the constituency of the hon. Member for Ayr, Carrick and Cumnock (Sandra Osborne), to observe what we are up to.

The deterrent is a key part of Britain’s defence capability. I will not go into any more detail than has already been given, because we are in danger of trespassing on classified territory, but mention has been made of the importance of the deterrent and the maritime patrol capability in delivering its protection. It is terribly important, therefore, to understand the significance of the capability, and to understand too that it is part of a jigsaw with our neighbours and our NATO allies, and a key element of the defence of the free world.

I must, of course, respond to the charge that I was a member of the Department when we made the decision, as was my right hon. Friend the Minister. We were both there at the time, and it is fair to point out that although the Ministry of Defence was a key part of the whole strategic defence and security review process, there were also other players, not least the National Security Council. I have to say that I think this was the most serious capability gap that we created, but I, at least, did not create it without understanding its significance. I asked the National Security Adviser, Sir Peter Ricketts, “Does the National Security Council understand the significance of the loss of the capability?” I was given the wonderful mandarin response, “Oh, I don’t think you need to worry, Minister; I think they’re fully aware.” Frankly, I do not believe that people in the Government have been fully aware of the significance of the loss.

[Mr Arbuthnot]

To be fair to the National Security Council, describing it as a loss of a capability implies that the capability was in service, which it was not yet, due to aerodynamic and other difficulties with the aeroplane itself.

[Sir Gerald Howarth]

I am grateful to my right hon. Friend for providing me with my cue. It says in the few brief notes that I scribbled down, “Reasons for cancellation”. The first reason for cancellation was indeed that BAE Systems had persistently failed to deliver.

BAE Systems is headquartered in my constituency, and there are people who think that I am in BAE’s pay. Lady Thatcher once said to me, “I hope BAE is still paying you.” BAE Systems has never paid me a penny piece in my life. I think that it is a great company, but on this project, as successive major project reports and National Audit Office reports showed, it failed to deliver. For those who do not understand what I mean when I say that BAE was the design authority—I speak as an aviator—the company is responsible for the design of every bit of the aeroplane. BAE did not even know that the wingsets were about 4 inches different, so it had to more or less hand-make whole new wingsets for each aircraft. That is why I believe the company to be culpable. Yes, I take the point that perhaps more diligence should have been shown by technical officials in the Department, but Ministers cannot be expected to understand all the details of aerodynamics.

--- Later in debate ---

[Mr Jones]

That does not surprise me at all. If we had more time, I could bore Members with some of the ludicrous ideas that were presented to me when I was a Minister by the Treasury, showing a lack of understanding.

The Ministry of Defence claims to have balanced the budget, even though we do not know what is on the whiteboard. The Minister said again this afternoon that he is not prepared to tell us what is on the whiteboard. Is the replacement on there, yes or no? Is, for example, Sentinel, another very important piece of kit, on the whiteboard? Even though it has been deployed to Mali, the Secretary of State indicated in Defence questions the other day that it will somehow be reprieved. If so, what is coming off the budget? Last week’s NAO report said that the £8 billion put aside in reserve may not be enough even to cover the risk in the existing programme. The hon. Member for Mid Worcestershire (Peter Luff) keeps asking at Defence questions for that whiteboard. Until we get to see that and what is actually in the equipment budget, there is no way of telling when the capability will be put forward.

When the hon. Member for North Devon (Sir Nick Harvey) came before the Committee, he was clear that there was no money or indication to replace this capability until 2015. There are unanswered questions. There is clearly a capability gap; the Government admit that. The Committee and the NAO report identified that. No solution has been put forward to resolve that.

[Mr Arbuthnot]

Would the shadow Minister tell us whether the Leader of the Opposition is committed to increasing defence spending year-on-year in real terms after 2015?

[Mr Jones]

I am surprised by the right hon. Gentleman. He is usually non-partisan in such matters. If we do not know what is on the whiteboard, what the budget is or the state of the remaining 55% of the budget, it is difficult to make that determination. The Government made claims last week when they got the figures mixed up and did not understand that the 1% applies only to the equipment budget, not the remaining 55%. Even the NAO report says that that might be swallowed up just by the risk in the existing programme. We need to know such things. Until we do, it is difficult to know what will be capable of replacing this piece of kit.

It has been a good debate, which shows the cross-party nature of the Defence Committee at its best. However, the Government, with the short-sighted decisions they took in the SDSR, among many others, have created a huge capability gap that I fear will have strategic implications for the nation for many years.

Afghanistan

Lord Arbuthnot of Edrom Excerpts

Wednesday 19th December 2012 Commons Chamber

[Mr Hammond]

I thank the right hon. Gentleman for his comments and for the tone in which he made them. I know that he expressed the views of Members in all parts of the House in sending best wishes for Christmas to the members of our service personnel who will be in theatre over the Christmas period. I am grateful for his continued support and for that of the whole Opposition.

The right hon. Gentleman was absolutely right to emphasise the scale of the challenge ahead, and the reversibility of the achievements that have been won. It is for precisely that reason that we are engaged in the ongoing process of building the Afghan national security forces and the institutions of the Afghan state for the long term, and it is for precisely that reason that we have gone out of our way to emphasise the nature of our ongoing commitment to the Afghan people way beyond the end of our combat operations in 2014.

The right hon. Gentleman understandably asked some questions about the draw-down of our forces during 2013. He asked which units would leave and from which parts of Helmand. Owing to our six-monthly rotational pattern in which units are deployed to theatre routinely around March-April and September-October each year, it is less a question of which units will leave than a question of deploying fewer units to replace those that are coming out of theatre at each successive turn of the handle. I expect that there will be some draw-down of numbers next April, a period during the fighting season in which numbers remain constant, and a further draw-down in September-October, towards the end of next year.

The right hon. Gentleman asked about force protection measures. Ours is an integrated force. The 5,200 figure was arrived at through a bottom-up process of military logic and military planning that took account of the shape and scale of the force that will be required to deliver the tasks that we expect to be delivering by the end of 2013.

As for the capabilities of the Afghan national security forces who will increasingly fill the gap as we reduce our numbers, the message is clear. The right hon. Gentleman will have heard it: I know that he has heard the back-to-office reports of returning commanders from Afghanistan. The Prime Minister mentioned it earlier, and I have heard it myself. Everyone talks of the Afghan forces’ increasing confidence, increasing competence and increasing willingness to engage. There has been a step change in the level of what they are able to do.

However, as the right hon. Gentleman pointed out, at present Afghan forces still depend on ISAF allies for some key enablers: air cover, air support, indirect fire support—they are building a capability of their own in that respect, but it is as yet immature—and, crucially, medical evacuation, which gives the Afghan army high levels of confidence on the battlefield. Over the next two years, we will focus on developing Afghan indigenous capabilities so that they can replace those enablers at the end of our combat involvement.

The right hon. Gentleman asked about the international dimension of draw-down. There is an emerging ISAF plan, which is being discussed among the ISAF nations, and today’s announcement is entirely consistent with that plan. Other allies, including the United States of America, will make specific announcements in due course.

The right hon. Gentleman asked about the rules on redundancy. Announcements about future tranches of Army redundancy will be made in the new year, and the rules will be set out to be as fair as possible. That means ensuring that the field of redundancy is as wide as possible, while ensuring that those who are about to be deployed on operations, those who are currently deployed and those who have just returned from operations remain exempt. The more widely we set the field, the fairer the process of redundancy selection will be.

The right hon. Gentleman asked about the post-2014 non-combat commitment and about embedded training. Those matters have not been decided, beyond the commitment that we have given to take the lead role in running the Afghan national officer training academy. There are a number of things that we could consider doing beyond that, but we have decided that it does not make sense to make firm commitments earlier than we need to, before we see how the situation develops on the ground and before we see what other allies intend to do. We will make announcements to the House in due course, during 2013, as those decisions are made.

Finally, the right hon. Gentleman asked about talks between the Afghan Government and the Taliban and between US officials and the Taliban. The Government are working very hard and very diligently. My right hon. Friend the Foreign Secretary is routinely engaged in encouraging the process of dialogue, as is the Prime Minister. We know from our own experience over many years that conflicts of this kind invariably have to be settled by means of dialogue and compromise. At the heart of that dialogue and compromise will be a renewed shared understanding of the need for future dialogue and co-operation between Afghanistan and Pakistan, and I am pleased to say the UK has played a significant role in enhancing that and in ensuring there is genuine engagement with Pakistan in these discussions.

[Mr James Arbuthnot (North East Hampshire) (Con)]

I welcome my right hon. Friend’s statement. My question is about force protection. As all the ISAF countries begin to draw down, they will have concerns about force protection, including how to protect increasingly isolated units. What is being done to reduce the isolation of ISAF units and to share possible force protection measures across ISAF countries and the Afghan national security forces?

[Mr Hammond]

My right hon. Friend is right to draw attention to that question, as the right hon. Member for East Renfrewshire (Mr Murphy) also did. As we draw down, force protection will be one of the key determinants of the shape of the force and the scale of draw-down that is possible. As my right hon. Friend suggests, there will be co-ordination across ISAF, including sharing force protection arrangements as the force gets smaller. I should also draw my right hon. Friend’s attention to what I said earlier about the reduction of the UK footprint in Helmand. That is significant and has significant implications for force protection. We are now servicing 32 UK locations in Helmand province, as opposed to more than 80 UK locations just nine months ago. That has led to a significant reduction in both the logistics challenge and the force protection challenge.

Defence Personnel

Lord Arbuthnot of Edrom Excerpts

Thursday 6th December 2012 Commons Chamber

[Mr James Arbuthnot (North East Hampshire) (Con)]

I beg to move,

That this House has considered the matter of defence personnel.

If I may, I would like to begin, rather oddly, by congratulating my hon. Friend the Member for North West Cambridgeshire (Mr Vara) on the previous debate, which was outstanding—despite the fact that it has taken time away from the defence debate. I think that it was a really worthwhile way of starting today’s Back-Bench business.

I am grateful to the Backbench Business Committee for granting us a debate on personnel issues. We discover that there is a disadvantage in having this debate during the week of the autumn statement, because it has been relegated to the end of a day after not only the important debate we have just had, but important statements that have to be made following the autumn statement. Because there is less time than there might otherwise have been, I will take as little time as possible in order to allow everyone who wishes to speak to do so.

There will inevitably be subjects I do not cover. I am afraid that I will not cover the important issue of reductions of certain historic and well-recruited regiments, but I hope that, by not speaking about that, I will allow other right hon. and hon. Members to do so, and with greater knowledge than I could possibly show. I shall say little about redundancies or reservists, because the Defence Committee has recently conducted a number of inquiries into those subjects. Yesterday, we took the unusual step of announcing in advance the Committee’s programme for the remainder of this Parliament. It will include inquiries into some of these important matters.

One of the advantages of having the debate today is that it seems to have prompted the Ministry of Defence to produce lots of documents, including its accounts for 2011-12 and the annual report on the covenant. It is always nice to have the MOD’s accounts, even if the auditor qualifies them, as always, by saying that they do not show a true or fair view of the state of the MOD’s finances. It would have been nicer still if we had had the accounts in June or July, when we should have done, but no doubt the accounting officer will be able to give an explanation when he comes before us next week—an event to which I know the whole Defence Committee will be looking forward enormously.

Today’s annual report on the armed forces covenant is welcome. It reflects many of the suggestions made by the Committee in its continuing series of inquiries into the covenant, for example on doubling council tax relief, on the false economy created by the pause in the refurbishment of single living accommodation, on home ownership and on health care, particularly mental health care, for veterans and reservists. Those are not acknowledged as being the Committee’s suggestions, but we know the terms of trade and do not mind that, so long as the MOD from time to time listens to what we say and does something about it.

The relationship between the MOD and the Select Committee needs to contain an element of constructive tension—almost scratchy; never cosy. Sometimes there is more tension than constructiveness, but I tell the Minister that the more open his Department is with the Committee, the more we can help to get his policies right. We shall shortly be producing a report on the Service Complaints Commissioner, who, as usual, gave us most helpful evidence a couple of weeks ago. I hope that the Minister will listen and respond positively to what we will say on Dr Atkins’ extremely valuable role.

The MOD does sometimes help us. Last week it helped the Committee to have an extremely valuable visit to Afghanistan as part of our normal programme of visiting our armed forces wherever they are deployed. Several issues arose, and they are what I want to concentrate on for the remainder of my short remarks.

I will touch first on welfare matters, starting with decompression. At the end of a six-month tour, we consider it essential to ensure that our troops are provided with a period of what is known as decompression. Often that takes place in Cyprus on the way home, when the returning troops, over a few kegs of beer, are reminded that their spouses will have been living their own lives while they were away and will not necessarily understand exactly what they have been through. These are absolutely essential reminders.

However, apparently, decompression is not considered essential when our forces return for a two-week break in the middle of a tour. That suggests that we need to rethink the entire concept of the two-week break, not of decompression itself. Is the two-week break necessary or a good thing? For example, when our troops are working alongside the Americans, who, unlike British forces, get travel time taken off their break but get only a two-week rest and relaxation break in a one-year tour, does that create resentments on either side? Is the entire concept of a break destabilising? If, for operational reasons, someone’s break comes very near the beginning or end of their tour, what good does it do? The armed forces and the Ministry of Defence need to begin to think about these things very seriously.

The armed forces sometimes need to make serious and difficult choices between welfare and operational output. I suspect that in 2014 the welfare of our troops in Afghanistan will be pretty minimal, frankly. We will have drawn down and taken away much of their support system, and, as we were told, they will be living out of the backs of their vehicles. The troops and, just as importantly, we need to know that, think about it, and accept it now. This is not about stopping looking after the armed forces who do so much for us; it is about putting it in the context that their primary task is operational, and that when they signed up they also signed up to an element of austerity when necessary.

Another issue that arose was detention. There is a genuine problem over the legal ability to transfer those whom we detain to the Afghan authorities, which were accused in the past of mistreating one of the people we had previously transferred. We visited the detention facility in question, and we were impressed with the new deputy governor, who has a good international track record in observing and enforcing human rights. Nevertheless, we remain concerned that there should be a speedy solution to this problem. We must not run the risk of being forced to hold on to people whom our troops detain, because that might lengthen our involvement in Afghanistan in certain respects far beyond the period for which we would wish to be so involved. Still less must we put our troops at risk of being subject to any legal challenge regarding a failure to obey international law in what they have done. I suggest that in future there should always be an Afghan element in the capture, interrogation and detention of those suspected of insurgency or dealing in narcotics so that in all cases the detention is Afghan, not British, and the problem therefore does not arise. However, such a solution would require complicated discussions between ourselves and the Afghan authorities, and I appreciate that it will not be easy to achieve.

Our role in Afghanistan now is to step back, and that is a very difficult thing for the British armed forces to do. Their natural inclination, as the sort of people they are with the sort of qualities they have, is to step in and help; that is what they are trained to do. However, we are now reaching the stage in Afghanistan where the best help we can give is not to help. One aspect of this is the insider threat, which is sometimes referred to as “green on blue”. One of the soldiers we talked to in Camp Bastion said that it is absolutely galling that the very people we are there to help might turn on us. The risk is not going to go away; all we can do is minimise it. My own view—I do not know about other members of the Defence Committee—is that we are doing our very best to achieve that. If we draw the conclusion that we cannot trust the Afghan security forces, we will be quite wrong. It is a fantastic country with wonderful people who are, let us not forget, being asked to learn in a few years what it took us centuries to learn. It will still be necessary for our troops to help to use the ISTAR—intelligence, surveillance, target acquisition and reconnaissance—assets that we have and to call in the medical helicopters that are so highly regarded, but it will increasingly be less necessary for them to patrol alongside the Afghan patrols, which are becoming more capable day by day.

We came away from Afghanistan with a strong message. At the end of the summer, an instruction went out to the insurgents that they should fight their way through the winter. Despite that, the insurgency dropped away very suddenly. The insurgents are finding it increasingly hard to raise and retain their money and resources. They are also finding it very difficult to persuade their co-insurgents to fight Afghan soldiers, who are becoming increasingly competent. That competence is likely to increase with the advent of the academy for officer training, to be run along the lines of Sandhurst. We went to visit it. It is currently a building site, true, but the Afghans have begun to identify their first training officers and non-commissioned officers, who are clearly of extremely high quality. They have set themselves some enormously high challenges—for example, to have 150 female officer cadets a year passing through the college. In the long run—this point was most validly made to us by President Karzai—the issue of the equal treatment of women is likely to be resolved not by western influence or by the hectoring of countries such as ours but by education and the visibility of the outside world provided by the internet.

We found that security is no longer the primary issue of concern for most Afghans. There is still fear when people travel from one part of the country to another, but the ability of Afghans to farm in peace, and to get their goods to market on an increasingly secure road network, is being greatly improved. This has been achieved by a combination of the actions of our troops and the actions of the Afghan national security forces—police and army, pleasingly—in doing what our troops are training them to do.

Some say that we should leave Afghanistan now. In one sense, that is what we are doing. If we wanted to leave tomorrow, it would in fact take us about 18 months to do so. We are doing it by leaving in place a working security apparatus that will help to ensure that Afghanistan does not again become a threat to this country. By staying involved after the end of combat operations in 2014, we will ensure that there is transition, not abandonment. The strongest message that we received from our personnel in Afghanistan was that we should hold our nerve and stick to the plan, which is a good one.

Here I should acknowledge something: I was wrong. I believed that by setting a date for us to leave Afghanistan we were playing into the hands of the Taliban, who would just wait us out. I told the Prime Minister that if we concentrated on success, we would make it easier for us to leave, whereas if we concentrated on leaving, we would make it harder for us to succeed. It is hard for me to say this, but the Prime Minister and my hon. Friend the Member for Carlisle (John Stevenson) were quite right and I was quite wrong. In practice, the Afghans needed us to step back, and they needed a timetable. Arguably, by setting a date in 2014 the Prime Minister bought more time for the international security assistance force to achieve transition than it would have had if the time scale had been left open-ended.

Finally, I would like to pay tribute to our armed forces. They are going through a tough time at the moment, as is the entire country. They know they are not immune from the financial hardship afflicting us all. They are facing redundancies, reductions in the pensions they can expect and a smaller total expenditure on defence.

[Angus Robertson (Moray) (SNP)]

Does the right hon. Gentleman agree that many service personnel want clarity from the Ministry of Defence on what will happen to arrangements for units in which husbands and wives are based? They, like the right hon. Gentleman, perhaps, and me, were under the impression that we might learn that from a statement from the MOD as soon as next Tuesday. Is he aware of reports suggesting that that announcement will not take place next Tuesday and does he know of any reasons why that might be? If not, perhaps the Minister on the Treasury Bench could clarify whether that is correct.

[Mr Arbuthnot]

I am grateful to the hon. Gentleman for his intervention. The Chief of the General Staff was asked a similar question when he appeared before us yesterday. Unsurprisingly, the timing of statements is a matter for the Government. We will have to wait to hear from the Minister whether this has been affected by the changes announced in yesterday’s autumn statement, but he will have heard the hon. Gentleman’s intervention and will no doubt be eager to cover it in his contribution, even if he does not look too eager at present.

As I have said, the Chief of the General Staff appeared before us and he said that this was a worrying and destabilising time for the armed forces. Picking up on the hon. Gentleman’s point, it is certainty that the armed forces want—they just want to know where they stand so that they can plan their lives accordingly.

It is our job as a Parliament to recognise what our armed forces do for us and to thank them for it. I am pleased that the country seems to be well aware of how much we owe our armed forces, and today is our opportunity to acknowledge it and to thank them.

--- Later in debate ---

[Mr Gray]

My hon. Friend never misses an opportunity to speak up for the Royal Marines, and he is absolutely correct. I was not for one second suggesting that the House was silent on these matters during those years; I merely said that their prominence had declined somewhat at various times over the past 50 years.

Into that relative desert of knowledge, awareness and understanding of our armed forces came the figure of Sir Neil Thorne—this is where my hon. Friend the Member for New Forest East (Dr Lewis) did me a disservice a moment ago. Realising the shortage of information and awareness in the House, Sir Neil created the armed forces parliamentary scheme 25 years ago this year. Since then, he has run the scheme more or less single-handedly. He has help from a variety of people, but he is the driving force behind it. The scheme has gone through all sorts of changes. When I joined it in 1997, it was extremely small, with one MP from each side of the House attached to each of the four services. This year, there are about 70 people involved, including MEPs, Clerks of the House, Members of the House of Lords and others.

The work of the armed forces parliamentary scheme under Sir Neil has significantly increased the level of understanding and awareness of our armed forces and, in particular, of the work done by our boys and girls on the ground. A significant cadre of Members of Parliament now truly understand what happens on the ground. MPs are embedded for up to 22 days a year, perhaps wearing some kind of uniform, and they get intimately involved with activities of our armed forces on a variety of levels. That is central to the excellence of the understanding that the scheme has brought to this place.

In that context, it is probably known around the House that there will be some changes coming to the armed forces parliamentary scheme. Sir Neil has indicated that he would like to see changes, and the Secretary of State for Defence and Mr Speaker have joined him in that. The scheme will soon be re-established as a charitable trust under nine trustees, and we very much look forward to its continuation under the slightly new format.

Two things are central. First, it seems to me essential that the armed forces parliamentary scheme should remain as it is, or very much like it is, for 25 or 50 years to come. It would be no good at all if we said right now, “That’s it. It has been great, but let’s say goodbye to it.” We must not do that—the armed forces parliamentary scheme plays a terribly important part in all our parliamentary debates. Secondly, there are all sorts of ways of doing this, but on this 25th anniversary of the scheme’s foundation, it is terribly important that we pay due respect to the fantastic contribution to the defence of the realm and to our understanding of it that Sir Neil and his wife have made. He has done a great job; it is right that we should acknowledge it.

[Mr Arbuthnot]

Does my hon. Friend agree that Sir Neil has not only put in a large amount of his own time and considerable expertise but has invested a large amount of his own money into creating the scheme, and that it is has proved so successful that it has been copied in other countries around the world and has given rise to similar schemes for the police, for example?

[Mr Gray]

My right hon. Friend is absolutely right: Sir Neil’s personal contribution in respect of time, money and, indeed, the excellent Lady Thorne has been significant. A similar scheme has been established in Australia and, as my right hon. Friend says, there is a similar police scheme in existence—in this Parliament, and who knows where else it might spread.

On an occasion such as today’s when we are talking about defence personnel, it is right to pay our respects to and honour those people who do things that we in the Chamber could not contemplate doing, although one or two of us have done them—my hon. Friend the Member for Filton and Bradley Stoke (Jack Lopresti), for example, who is not in his place at the moment. He has had the great advantage of having spent six months in Afghanistan, with 36 hours of contact, firing a light gun at the enemy. Very few Members of Parliament have achieved anything of that kind; I think we should pay our respects to my hon. Friend for that.

It is right that we should make use of the armed forces parliamentary scheme, the all-party group for the armed forces and the welcome home parades. We should also celebrate the respects paid to the armed forces down the streets of Royal Wootton Bassett—or now in Carterton in Oxfordshire. The people of the United Kingdom and the Members of this House understand what a great contribution our armed forces make to the defence of our realm. It is right that we should convert that understanding into visible signs of it; various organisations do that very well.

--- Later in debate ---

[Mr Kevan Jones]

I congratulate the right hon. Member for North East Hampshire (Mr Arbuthnot) and the Backbench Business Committee on selecting this afternoon’s debate. Let me put on record everyone’s thanks and tributes to the members of our armed forces and their families, who are an integral part of the defence of our country. I also agree with the hon. Member for Colchester (Sir Bob Russell) about the army of civil servants and civil contractors, without whose support we could not deploy forces.

There have been 11 very good contributions to today’s debate. The right hon. Member for North East Hampshire talked about Afghanistan. I agree that the deadline has focused minds in Afghanistan; my concern is about what role UK armed forces will play post-2014. There is a naive assumption that a training role will be without its dangers, but the people performing training roles with the embedded teams in Iraq were in harm’s way. We need clarification from the Government on that before 2014, because people will be in harm’s way. We also need to know what our armed forces’ footprint will be in Afghanistan post-2014.

The right hon. Gentleman also talked about the Service Complaints Commissioner, as did the hon. Member for Portsmouth North (Penny Mordaunt). This was a tremendous success for the Defence Committee, following its report on the duty of care in the last Parliament, although I agree with the hon. Lady that the next step needs to be some type of ombudsman—a proposal that was in the original report to give the post teeth. I, too, pay tribute to the Service Complaints Commissioner, who has done a first-rate job in not only highlighting and dealing with complaints, but getting the trust of senior members of the armed forces.

My hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart) raised the issue of medical support for our armed forces. She, like me, was heavily criticised at the time for the closure of Army, Navy and RAF-dedicated hospitals, but in hindsight it was the right thing to do. She rightly paid tribute to the Queen Elizabeth hospital and the investment that has gone into it, as well as the dedicated NHS staff working closely alongside the military personnel, breaking new ground not only with new surgical techniques but by keeping people alive who even a matter of years ago would not have survived, as she rightly said. However, I have concerns about how the NHS integrates with the Army recovery capability—which she also raised—which is something I am glad the Government are committed to. We need to ensure a seamless transition into civilian life for those people, and that they get the appropriate NHS care once they have left the armed forces.

My hon. Friend made some interesting points about finance in relation to the strategic defence and security review. No one will be surprised when I reiterate that the SDSR was not a defence review but a budget-led, Treasury-led review. As a nation, we need to ask what our role is in the world. That was not done as part of the SDSR, as it was led by the Treasury. That led to some of the mistakes that are now being unpicked as the new Secretary of State tries to get to grips with the situation.

The hon. Member for Filton and Bradley Stoke (Jack Lopresti) talked about the defence budget. The Government keep pushing the myth that they started with a £38 billion black hole, even though no one has yet been able to explain the calculations behind that figure. The original National Audit Office report said that there would be a £6 billion black hole if the budget continued on its present basis. The only way of arriving at a figure of £36 billion would be to add flat cash over 10 years and to include everything in the equipment programme. That still leaves an unexplained extra £2 billion. Members will be pleased to know that I am now on Twitter, and I had an interesting exchange last night with the former Minister for defence procurement, the hon. Member for Mid Worcestershire (Peter Luff), who told me that the figure was even higher than £38 billion. If that is the case, why do we not know what it actually is?

That brings me to the Ministry of Defence’s annual report and accounts, which make great reading. It is interesting that claims by the previous and present Secretaries of State to have balanced the budget are nowhere to be seen in the introduction. It will also come as no surprise that the accounts for this year have been qualified.

[Mr Arbuthnot]

May I gently draw the attention of the shadow Minister to the fact that the accounts were qualified in every year under the last Labour Government as well?

[Mr Jones]

I acknowledge that, but I did not make wild claims about somehow having magicked away a £38 billion black hole in two years, which the Secretary of State is now doing.

The hon. Member for Filton and Bradley Stoke mentioned Defence Equipment and Support, and I agree with him that there is uncertainty in that regard that needs early resolution. He might be interested to know that the accounts show that the average length of time that the MOD equipment programme was delayed in 2010-11 was 0.46 months, and that the figure has now increased to 5.5 months. No great progress has been made in the efficiency of the delivery of that programme.

Another startling fact to emerge from the annual report and accounts is that the Department has not received approval for the remuneration package for the Chief of Defence Matériel, who is earning considerably more than the Prime Minister. It has been suggested that the Department has somehow acted outside its authority in this regard. We need clarification of some of the issues raised in the annual report and accounts.

We keep being promised an explanation of the Secretary of State’s assertion that the defence budget is now in balance. On 14 May and 11 June, he told the House that he would shortly publish the figures, and he told the Defence Select Committee on 12 July that the NAO report would be published in September and that it would explain exactly how he had balanced the budget. The hon. Member for Newark (Patrick Mercer) raised an interesting point about this matter.

Yesterday, during the Chancellor’s statement, it was mentioned almost as an aside that defence had somehow got off lightly, given the further 1% cuts that other Departments were being asked to make—but that is not the case. It will have to swallow cuts of its own, and, according to The Daily Telegraph today, that will involve another £1.3 billion coming out of defence. It is important that we get clarification of this so-called balancing of the budget, when it is clearly not in balance. We also need an explanation of where the original figure of £38 billion came from.

The reason that is important is that members of our armed forces and their families know that we are in tough times and that they have to take some share of the pain. What they do not want to see, however, are spurious figures and spurious claims made to justify some of what is being done. There are only two ways of getting money quickly out of the defence budget: either by cutting the number of personnel or by cutting in-year programmes, leaving capability gaps, which is what the strategic defence and security review has done.

The hon. Member for Moray (Angus Robertson) made some points about Germany and rebasing. We have been promised a statement next week, so it will be interesting to see whether that comes forward. I thought it completely bonkers when the right hon. Member for North Somerset (Dr Fox) made the announcement. I looked at the issue when I was a Minister, so I know that four years ago the price tag was £3.5 billion—but where that is coming from, I do not know. It is important to have clarification not only for the reasons that the right hon. Gentleman gave regarding communities and individuals here, but because we must know what is actually happening for our servicemen and women along with civil servants, educationalists and others based in Germany. If the cost was £3.5 billion then, it is surely a lot higher today. It is not just about bringing people back, as it is also about evaluating the costs of withdrawal—environmental and other costs that will be added to the clean-up of those areas. Under the treaty with the Germans, it is quite clear that two years’ written notice has to be given, but I am not aware that that has happened. I do not mind if the Government have changed their policy on this issue, but they should say so, as we do not want the uncertainty.

The hon. Member for Moray spoke about the so-called future Scottish armed forces, claiming that they will comprise 15,000. I am not sure what type of role they will take: if they are to be in NATO, what would they deploy? Will the army act as a border force to stop riotous Northumbrians crossing the border? Will there be a navy of fishing boats? Will the air force be of gliders? In this debate, it is important for the Scottish National party not only to deal with the present lay-down of armed forces, as the hon. Gentleman has, but to be honest with people and say what the future defence structure would look like in an independent Scotland.

I join the hon. Member for North Wiltshire (Mr Gray) in paying tribute to Wootton Bassett and to Sir Neil Thorne. I also commend the hon. Gentleman’s role on the marching parades, which have been supported across the parties.

I pay tribute to the hon. Member for Strangford (Jim Shannon) for his quite proper recognition of the contribution of people from Northern Ireland to the armed forces. I visited Northern Ireland when I was a Minister, and I was very impressed by the dedication I found there to all three of our armed forces.

I know that on many occasions the hon. Member for Beckenham (Bob Stewart) adopts a light-hearted approach in his contributions to the House. Today, however, he made a very serious contribution, which I think shows the House of Commons at its best. He paid tribute to the victims of the Droppin’ Well bombing. It must have been very difficult for him to relive some of those experiences today, so I pay tribute to him for doing so. He is right that 30 years seems a long time ago, but not for him and the people who were there. Speaking as he did in this debate greatly honours those people and pays a fitting tribute to their memories. I hope that his contribution gives some comfort to those who were injured in the ways he described and to the families, relatives and friends of those who lost their lives.

The hon. Member for Beckenham mentioned another matter, and his position was the same as mine when I was veterans Minister. It is fine to get things right now for veterans and those injured in conflicts in Iraq and Afghanistan. My concern, in common with the hon. Gentleman’s, is what happens to these people in 20, 30 or 40 years’ time. We, as a society and a nation, owe a great debt of gratitude to those individuals. Irrespective of our political parties, we need to ensure that that remains the case. I hope that the work with service charities in relation to the Army recovery capability scheme, which is in the pipeline, involves something of that joined-up approach, but we shall have to monitor this on a yearly basis. We shall need to look after the people to whom the hon. Gentleman referred—who are already injured as a result of service in Afghanistan and Iraq—when they are older. There can be no if or but; we must do that.

When it comes to housing—the favourite subject of the hon. Member for Colchester—we must ensure that we continue to listen to the views of the British Armed Forces Federation.

Let me end by saying that it is always good to hear such well-informed contributions, and by again paying tribute to our brave servicemen and women.

--- Later in debate ---

[Mr Arbuthnot]

With the leave of the House, Mr Deputy Speaker, may I start my contribution, after a debate in which it has been a great privilege to take part, on a note of disagreement? In a year in which we have celebrated Her Majesty’s diamond jubilee and the greatest Olympics the world has ever seen, I must disagree with the suggestion of the hon. Member for Birmingham, Edgbaston (Ms Stuart) that we may be losing our sense of self. I think we are a prouder nation now than we have ever been, and we have every reason to be proud. One of the greatest reasons to be proud is our armed forces.

In a few short sentences, my hon. Friend the Member for Beckenham (Bob Stewart) reminded us what it is that we owe to our armed forces and of our duty to look after those who have looked after us so well. He reminded me of what a privilege I have in charing the Defence Committee of this House.

Question put and agreed to.

Resolved,

That this House has considered the matter of defence personnel.

Future Reserves 2020

Lord Arbuthnot of Edrom Excerpts

Thursday 8th November 2012 Commons Chamber

[Mr Hammond]

The Department of Health, along with a number of large companies, is one of our key partners in the current partnering arrangement. Many NHS trusts that I have spoken to are acutely aware of the benefits to them of properly managed reserve service. Those returning from the role 3 hospital in Camp Bastion have without doubt the best trauma training available anywhere in the NHS.

If the hon. Gentleman reads the Green Paper, he will see that, as well as appeals to corporate social responsibility and collective responsibility for the national defence, there is a strong strand of mutual benefit between the reserves, the Army and employers. We need to draw out and develop those mutual benefits, and I am sure that we will be able to do that in the case of NHS trusts.

[Mr James Arbuthnot (North East Hampshire) (Con)]

I congratulate my right hon. Friend on this statement, and I know that he will agree with me that the House will also wish to congratulate my hon. Friend the Member for Canterbury (Mr Brazier), without whose persistence this statement would not have taken place. I declare an interest, in that my daughter is a reservist second lieutenant.

Will my right hon. Friend confirm that it is so important that this proposal succeeds that it deserves a campaign led by the Prime Minister and, I suggest, the Leader of the Opposition, as well as the Secretary of State for Business, Innovation and Skills and the Secretary of State for Defence, to encourage employers to recognise the enormous benefits that they will get from employing people with the work ethic and the discipline that reservists show every day?

[Mr Hammond]

I am grateful to my right hon. Friend and I am very happy to acknowledge the role of my hon. Friend the Member for Canterbury (Mr Brazier), who has played a crucial part in developing this agenda.

Yes, my right hon. Friend is right: it is essential that we achieve success in this regard. I do not regard this as a partisan issue, and I hope that the right hon. Member for East Renfrewshire (Mr Murphy) will think carefully about the point about deployed formed units and sub-units. I would be happy to arrange for him to have some briefing on this matter, if necessary, from the relevant people in the Army and Army Reserve. I hope that we can take this forward not only on a cross-government basis but on a cross-party basis.

My right hon. Friend the Member for North East Hampshire (Mr Arbuthnut) has hit the nail on the head in talking about the benefits to employers. If we are going to make this process work, we must draw out the benefits for employers, in the general management and personal skills that reserve service will bring to their work force, and given the specific vocational training that the Army can give to reservists. One proposal in the Green Paper is to use civilian-recognised qualifications in the armed forces, making it easier for members of the armed forces—regular and reservist—to use the skills that they have acquired during service to enhance their careers in the civilian economy.