Defence Equipment and Support
Lord Astor of Hever Excerpts(12 years, 4 months ago)
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The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever)
My Lords, with the leave of the House, I shall now repeat in the form of a Statement the Answer given by my right honourable friend the Secretary of State for Defence to an Urgent Question in another place on defence equipment and support. The Statement is as follows:
“A key element in the transformation process under way in the Ministry of Defence is that of its equipment and support activities through its Materiel Strategy. Reforming the acquisition system to drive better value from the defence budget is a core element of the transformation process under way in the Ministry of Defence.
This will require changes to the Defence Equipment and Support organisation to ensure that it has the structures, management and skills it needs to provide the right equipment to our Armed Forces at the right time and at the right cost. Change is essential to tackle the legacy problems in defence acquisition that have historically led to cost and schedule overruns, and which have resisted previous attempts at reform. The current system does not help or support DE and S properly, and it is not delivering value for money for the taxpayer.
Analysis reveals the following root causes: a historically overheated equipment programme, in which far more projects were planned than could be paid for; a weak interface between DE and S and the wider Ministry of Defence with poor discipline and change control between those setting requirements for equipment and those delivering the programmes; and insufficient levels of business capability at DE and S for the scale and complexity of the portfolio it is asked to deliver.
The result of these combined issues has been significant additional costs in the defence budget, in the order of hundreds of millions of pounds each year. Earlier this year MoD officials were asked to focus their efforts on considering the comparative benefits which could be derived from changing DE and S into either an executive non-departmental public body with a strategic partner from the private sector, or a government-owned, contractor-operated entity. The work done to date suggests that the strategic case for the GOCO option is stronger than the ENDPB option. Further value-for-money work is under way to confirm this assessment.
In the mean time, as resources and commercial appetite constrain our ability to pursue these two options simultaneously to the next stage, we have decided that the department should focus its effort on developing and testing the GOCO option further. The work to determine value for money between the options will take place over the next few months. In parallel, we will begin to develop a commercial strategy, engaging with industry to hone our requirement. This work will support decisions later this year on whether to proceed with the GOCO option and whether to launch a competition for a private sector management company to run the organisation.
Provided that the further work demonstrates that the value-for-money case for GOCO over ENDPB/SP is conclusive, this will be followed by an investment appraisal that will test the GOCO against a public sector comparator. Ultimately, this would be followed by a decision on whether to proceed”.
My Lords, that concludes the Statement.
Lord Astor of Hever
My Lords, the noble Lord is quite right; I am not a walking encyclopaedia. I will do my very best to answer as many questions as I can, but I will write to the noble Lord with the answers to the others. I will also put a copy in the Library.
I will try and take the questions as they came at me. The noble Lord asked why we need to change DE and S. For decades, the MoD has wrestled without success with the legacy problems of defence acquisition. It is clear that addressing the problems within current structures will be extremely challenging. We will, however, develop a public sector comparator based on DE and S-plus, which will be an on-vote solution with enhanced capabilities. The noble Lord asked if primary legislation would be necessary. At the moment we feel that it probably will not be, but we are putting in place all the building blocks just in case.
The noble Lord asked why the GOCO route was preferable. Work to date indicates that the strategic case for GOCO is stronger than that for an ENDPB with a strategic partner. This is based on the significant qualitative benefits that a GOCO would bring. These include the flexibility of the private sector, the increased resources available to support successful delivery and the introduction of a change in culture and behaviour to improve DE and S’s focus on the bottom line. It gives us much more strategic freedom by allowing us to manage staff in a flexible way and to bring in private-sector skills.
The noble Lord asked about value for money. Officials expect to complete work on the value for money analysis in the next few months, for consideration by Ministers in the autumn. The value for money analysis is an extremely complex area of work, representing a business change without precedent in government and requiring thorough analysis to enable discrimination between the options. This is a big decision and it is worth spending the extra time now to ensure that we make it for the right reasons.
The noble Lord also asked about members of the Armed Forces. The requirement is for specialised expertise, knowledge and skills in areas not currently found in DE and S and the wider department. This external support is key to getting DE and S into a position to create an effective organisation going forward. An important element of the future organisational design of DE and S will be ensuring that the military continues to play a key role, which will be important for individuals’ careers.
I was asked why we rejected other models. It is clear that addressing DE and S’s problems within the current structures will be extremely challenging. Changing DE and S to a trading fund was ruled out early on the basis that it would not be suitable for its business. It would also not be appropriate to privatise the organisation. The noble Lord raised the international situation and the position of our allies. We are working with our international partners to ensure that their interests are protected during the transformation of DE and S.
Those are all the questions I managed to write down. As I said earlier, I undertake to write to the noble Lord on any others.
Lord Lee of Trafford
My Lords, this is a very short Statement for a huge issue. I remember taking two Bills through the other place nearly 30 years ago to privatise the Royal Ordnance factories and contractorise the dockyards, which I understand is probably the best example of a GOCO. I want to query the Minister’s response that we are unlikely to need legislation. I would be grateful if he could further explore that.
I have four specific questions. First, who is studying the comparative benefits of the two main options? Are they just MoD officials or are consultants involved as well, and what is the cost of those consultants? Secondly, I refer to the claim that,
“resources and commercial appetite constrain our ability to pursue these two options”.
I really do not understand what commercial appetite constraints are. The noble Lord, Lord Rosser, also raised this point in his remarks. Thirdly, is either option likely to involve civilian redundancies over and above the 25,000 already being targeted by the ministry? Finally, are there any examples of other countries effectively outsourcing their supplier of military equipment in this way?
Lord Astor of Hever
My Lords, I agree with my noble friend that this is a really big issue. I had only a short time in which to prepare for this Statement and that made me realise what a big subject this is. It may be an area on which we could have a debate in the House, and I would encourage my noble friend to go through the usual channels to see whether a debate could be set up. He asked why no legislation was necessary for this. I asked officials about that and their advice was that it is very unlikely—but just in case it is needed, all the building blocks are being put in place. No decisions on the future operating model of DE and S have yet been taken. The GOCO may require legislation, but the issue will be addressed in due course.
I cannot answer my noble friend’s question about whether it was just MoD officials involved in the decision-making process, but I understand that there will be no additional redundancies as a result of these changes. I am pretty certain that that is the correct answer.
Lord Craig of Radley
My Lords, one of the criteria that Mr Bernard Gray identified in his major study of DE and S was that a budget provision for a 10-year period should be made for the equipment programme. Many instances of overloading the programme in the past have probably been attributable to changes in the budget provision, which the Ministry of Defence had expected. Has an agreement been reached on the lines of what Mr Bernard Gray was looking for, with a 10-year guaranteed budget for the equipment programme? Without that it will be difficult to be sure that we will not overload the programme if there are cuts.
Lord Astor of Hever
I can assure the noble and gallant Lord, Lord Craig of Radley, that Bernard Gray, who wrote the report, is now working for the MoD—poacher turned gamekeeper. I am confident that he has extracted a lot of the assurances that he was after.
Lord Trefgarne
My Lords, can my noble friend confirm that the input of the chiefs of staff into the initiation of the defence procurement process—namely the preparation of staff targets and staff requirements—will remain untouched after the changes that he proposes?
Lord Astor of Hever
My Lords, I cannot give my noble friend that assurance, but I am pretty certain that the Chiefs of Staff will have had strong reassurances on that issue.
Lord Stirrup
My Lords, I am in no doubt of the need to improve the overall performance of Defence Equipment and Support. However, I have lost count of the number of major reorganisations to which the mechanisms for defence acquisition and logistic support have been subjected over the past decade and a half. It seems unreasonable to expect superior performance from any organisation that spends almost its entire time studying its own navel. Can there be sufficiently wide-ranging consultation this time so that whatever emerges from this particular exercise has some chance of enduring for at least a number of years, and so that we can get some performance out of the organisation rather than a wholesale change of deck-chairs every few years?
Lord Astor of Hever
My Lords, the noble and gallant Lord makes a good point. As we said in the Statement, no decision will be taken until the end of the year. We want to discuss this with as many people as possible, not least our own workers and the trade unions, so I can reassure the noble and gallant Lord.
Lord Burnett
My Lords, I endorse the point that my noble friend has made: we should have a debate not only on this matter, but on many other matters. Perhaps a debate will go some way towards highlighting the matters that the noble and gallant Lord, Lord Stirrup, mentioned. We have had severe and deep cuts to the Army, and questions as to the inequitable nature of the redundancy payments and of the capacity and capability of the reserves, however willing they are. But on this matter, will my noble friend explain the advantages to the Armed Forces of privatising the Defence Equipment and Support organisation? I hope that factors such as security of supply, urgency, value for money, secrecy and commitment are paramount in the minds of those who are deciding this policy.
Lord Astor of Hever
My Lords, I would certainly welcome a debate on this subject, not least of all because it would give me more time to swot up on a complicated subject. As for the advantages of privatising Defence Equipment and Support, and as far as the Armed Forces are concerned, there is a compelling case for reform. Analysis has shown that cost and schedule overruns have resulted in significant additional cost to the defence budget of the order of hundreds of millions of pounds each year. A GOCO offers the greatest likelihood of focused and sustained improvement. It has the strongest incentive for culture change and a drive for productivity. The Armed Forces will benefit from getting equipment and services on time and at the right price.
Lord Bach
My Lords, do the Government believe in the concept of a defence industrial policy? It seems to some of us that in reality this plan may mean that within a fairly short time we will be buying off the shelf from anywhere, at the expense of—and with no regard for—the British defence industry, which is an excellent manufacturing industry, one of the few that remain, providing many jobs and great skills, very much to the benefit of this country. Some of us worry that the ultimate consequence of this sort of decision will be to kill off the British defence industry. Does the noble Lord agree?
Lord Astor of Hever
My Lords, it is very nice to see the noble Lord back here discussing defence issues. I can assure him that we buy the best equipment for our Armed Forces. That is our starting and ending point.
Lord Boyce
My Lords, currently Defence Equipment and Support has stewardship of a key front-line activity, logistics support, which includes such things as running naval bases. However successful or otherwise one might view Defence Equipment and Support’s performance in this area, the current shock with respect to outsourcing of major critical activities has to be a concern. Can the Minister reassure the House that the area of logistics support to the front line will be very carefully guarded; for example, passing back the running of naval bases to the single services?
Lord Astor of Hever
My Lords, I can give the noble and gallant Lord that reassurance. Obviously, in the light of the G4S issue, we are looking at it even more carefully.
Lord Selkirk of Douglas
Can the Minister say whether the withdrawal of equipment that is surplus to requirements from areas such as Afghanistan will have any effect on the equipment programme?
Lord Astor of Hever
My Lords, we will have to decide whether to take the UOR equipment back into the core defence budget. It is much too early to give my noble friend an answer on that. We are looking at it very closely.
Lord Elton
My Lords, in mulling over his reply to the noble Lord, Lord Hunt of Kings Heath, will my noble friend—
Lord Elton
My Lords, if I can start again, can my noble friend tell us whether in any debate that we have he will be prepared to answer questions about how research and development will be continued under the new organisation? It is very important that the budgetary and technical skills of the department, the military and the commercial suppliers are co-ordinated. How is that going to be managed and by whom?
Lord Astor of Hever
My Lords, my noble friend makes a very good point. If we do have a debate, I undertake to answer as many questions as I possibly can, and I would ensure that I got sufficient briefing to answer my noble friend’s question on this important issue.
Lord Empey
My Lords, some of us in this House have had experience of a GOCO being established in Northern Ireland to run the water industry. My colleagues will know that it has not been a very pleasant experience. I urge the Minister to look at that example because failure in this area would be much more catastrophic. Is not planning for defence infinitely more difficult than virtually any other area of Government because events quite often occur that require changes in specification, which generate most of the cost overruns?
I also support the point made by the noble Lord, Lord Bach. We are second in the world in aerospace at the moment and there are strategic reasons why we need to maintain a defence industry, which do not always mean the cheapest contract wins. We have to maintain a long-term strategic capability in this country. I would certainly be looking forward to seeing that issue addressed in any proposals. I echo what other noble Lords have said in calling for an early debate on this and related issues.
Lord Astor of Hever
My Lords, as we said in the Statement, we have undertaken to consult as widely as possible, so I encourage the noble Lord to feed in any issues he has in relation to the water GOCO so that any lessons can be learned. I, more than anyone, want to see a strong defence industry in this country and we will do what we can to ensure that there is one.
Lord Williams of Elvel
The Minister said that he wants to consult as widely as possible. What form will that consultation take? We have had a Statement and a number of questions to which there are, apparently, no answers because the Minister says he has not been briefed. Will there be a Green Paper? Will there be a debate? What are the answers? It is a sad day in this House when we have a Minister saying, “I am terribly sorry, but I do not know the answer to any of these questions”.
Lord Astor of Hever
My Lords, that is very unfair. I did not say that I had not been briefed; I just said that I would welcome a debate because it would give me much more opportunity to talk at greater length about these very important issues. I never said that I had not been briefed—that is completely untrue—but I would welcome a debate in order to air all this and to hear any questions and issues that noble Lords have on this important subject.
Lord Stoddart of Swindon
My Lords, following the question from the noble Lord, Lord Bach, about the need to maintain a strong British defence industry, and the Minister’s agreement with that, is there any constraint on that policy through having to obey the strict rules under the single market by which contracts have to be advertised throughout the European Union? Value for money is an absolute, although there may be constraints upon the cost that is paid.
Lord Astor of Hever
My Lords, as I said earlier, I want a very strong British defence industry. We have to obey EU industrial rules, whether I like it or not; we have to stand by them.
Army 2020
Lord Astor of Hever Excerpts(12 years, 4 months ago)
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The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever)
First, I am sure the House will wish to join me in paying tribute to the aircrew from 15 Reserve Squadron, based at RAF Lossiemouth, who were involved in the Tornado GR4 aircraft incident on Tuesday—Flight Lieutenant Hywel Poole, who was killed, and Squadron Leader Samuel Bailey and Flight Lieutenant Adam Sanders, who are still missing and must be presumed dead. My thoughts, and I am sure those of the entire House, are with their loved ones at this difficult time and with the fourth member of the squadron involved in the incident, who is currently in a serious but stable condition in hospital.
In addition, I am sure the whole House will also wish to join me in offering sincere condolences to the families and friends of guardsman Apete Tuisovurua and guardsman Craig Roderick of the 1st Battalion Welsh Guards, and Warrant Officer Class 2 of the Royal Corps of Signals, who were killed on operations in Afghanistan recently. My thoughts are also with the wounded, and I pay tribute to the courage and fortitude with which they face their rehabilitation.
The Statement is as follows.
“With permission, Mr Speaker, I wish to make a Statement about the future structure of the British Army.
I know that I speak for the whole House in expressing our gratitude for the superbly professional job our Armed Forces are doing in Afghanistan and around the world and in paying tribute to their courage, commitment and self-sacrifice in doing it. We have seen again this week, in all too stark contrast, the risks they take on our behalf, both in Afghanistan and at home, and the price that all too many of them pay.
The operation in Afghanistan remains the MoD’s top priority, but our combat role in Afghanistan is coming to an end, and with it, the predictability of the Army’s main effort. Looking beyond 2014, we need to restructure to face an increasingly uncertain world, ready to intervene wherever and whenever to protect our national interest and with an ability to project force and prevent conflict through “agile and adaptable” Armed Forces, as set out in the 2010 strategic defence and security review.
We also need to address the reality of the fiscal situation and ensure our Armed Forces are sustainable and affordable. My predecessor, my right honourable friend the Member for North Somerset, announced to the House last July that, as part of the measures to bring the defence budget back into balance and to eliminate the £38 billion black hole we inherited from the last Government, the future strength of the Army would be around 120,000, including an integrated trained reserve of 30,000—a total trained strength not dissimilar to the pre-SDSR level.
So this Statement is not about the size of the Army; that decision has already been announced. It is about how we structure the future Army and how we support it to deliver the greatest possible military effect with the manpower available.
The Chief of the General Staff could have taken the attitude that a given reduction in regular manpower must inevitably lead to a similar reduction in military capability, but he did not. He has grasped the opportunity presented by the end of the Afghan campaign to fundamentally review the structure of the Army and its relationships with the reserves and its commercial contractors.
A team led by Lieutenant General Nick Carter has produced Army 2020, a detailed plan for a future Army with two distinct elements: reaction forces and adaptable forces. The reaction forces will generate high-readiness contingent capability, trained and equipped to undertake the full spectrum of intervention tasks, including provision of forces for the first phases of any future brigade-scale enduring operation. The reaction forces will be based around 16 Air Assault Brigade and three armoured infantry brigades, and equipped with new or upgraded armoured fighting vehicles.
Given the high readiness of this force, it will be made up predominantly of regular troops. The reaction forces will form a powerful UK contribution to a coalition effort and act as the initial land component of a joint war-fighting operation, alongside air and maritime components. At best effort, it will deliver a division into the field. The remaining infantry and armoured units will form the adaptable forces, a pool of regular and reserve units, commanded by seven infantry brigade headquarters, capable of generating forces for tasks, including overseas capacity building, homeland resilience, the Army’s standing commitments, such as Cyprus, Brunei, the Falklands and ceremonial duties, and, when required, generating the further brigades to sustain any future enduring operation.
Over a full career, soldiers and officers in infantry and armoured units will expect to serve in both reaction and adaptable forces. Both the reaction forces and the adaptable forces will include force troops, the artillery, engineers, signals, REME, logistics, intelligence, medical and other specialist units upon which the Army in the field depends and without which it could not function. To achieve this design while reducing the size of the Regular Army demands a much higher level of integration of the regular and reserve components. In the past, the reserve may have come to be seen by some as an add-on to the Army; in future, the reserve will be a vital integrated component of the Army.
The requirement for greater integration was a principal conclusion of the independent commission set up to review the UK’s Reserve Forces, led by the Vice Chief of the Defence Staff, General Sir Nicholas Houghton. I am most grateful to the members of the commission, including my honourable friend the Member for Canterbury, for their work in producing this invaluable report.
I can tell the House today that we accept the thrust of the commission’s recommendations. In the interest of keeping this Statement to a reasonable length, I have this morning laid a Written Ministerial Statement setting out how we intend to proceed with our plans for enhanced reserves. But I can tell the House that the process of reshaping the reserves for their future role has already begun, and that I have set up an independent scrutiny team to assess its progress, led by Lieutenant General (Retired) Robin Brims, chairman of the council of the Reserve Forces and Cadets Association, who will make his first report in the summer of 2013.
Let me now return to the future structure of the Army. In reducing the size of the regular Army in line with the announcement made last July, there must, inevitably, be a reduction in the number of units. In headline terms, there will be 17 fewer major units as a result of this announcement. These reductions will fall across the various arms and services of the Army.
The importance of the regimental system to the British Army and its contribution to the fighting spirit which delivers a battle-winning edge is very clear. I understand the dismay felt particularly by former members at the withdrawal of units that may have illustrious histories and indeed, antecedents. I understand, too, the attachments of the regions and nations of the union to specific units within the British Army, and their pride in those units.
In designing the new structure, the Army has sought to be sensitive to these issues, but I am also very clear that the Army that emerges from this process must be a forward-looking, modern fighting machine, remaining best of its class, respecting the past and honouring its proud history, but looking resolutely to the future, with its principal focus the brave men and women currently serving, and the units in which they serve.
The Army has approached this task methodically, carefully redesigning the way it delivers force support; building up a whole force concept that not only gives effect to the integration of the reserves, but also the greater use of contractors—sometimes using sponsored reserves—to support operations, maximising the combat effect of the regular manpower available.
I should emphasise to the House that the withdrawal or merger of units is completely separate from the redundancy process. An individual in a unit which is withdrawn or merged is no more or less likely than any other individual with similar skills and service record to be selected for redundancy. When units are withdrawn, their personnel are reassigned to other units, where possible within the same regiment. Nor does anything I shall announce today prejudice the basing review which is looking at the optimum future basing pattern for our Armed Forces units around the United Kingdom. I will list the changes to individual units, starting with the Force troops, where 3-9 Regiment Royal Artillery, 2-4 Commando Engineer Regiment, 2-8 Engineer Regiment and 6-7 Works Group will be withdrawn. In the Army Air Corps, 1 Regiment and 9 Regiment will merge in preparation for equipping with Wildcat. In the Royal Logistics Corps, 1 and 2 Logistics Support Regiments will be withdrawn and 23 Pioneer Regiment disbanded, with its functions assumed by other units. 1-0-1 Force Support Battalion REME, and 5 Regiment Royal Military Police will also be withdrawn.
Army 2020 calls for a greater focus on mobility and the ability to mount expeditionary warfare, based around the air-assault and armoured infantry brigades of the reaction forces. This evolution of our posture still further away from the Cold War lay-down inevitably means a reduction in the size of the Armoured Corps, from 11 units to nine.
After careful consideration of all the factors, including regional distribution and the requirement for a balance of capability, the Army has decided that this will be achieved by an amalgamation of the Queen’s Royal Lancers with the 9th/12th Royal Lancers and a merger between the 1st and 2nd Royal Tank Regiments.
Turning to the infantry, I can confirm that no current regimental names or cap badges will be lost as a consequence of the changes I am announcing today. Five infantry battalions will be withdrawn from the Army’s Order of Battle, all of them from multi-battalion regiments.
In selecting battalions for withdrawal, the Army has focused on the major recruiting challenges it faces in the infantry. It has looked carefully at recruiting performance, not just at a point in time, but over the last decade; at recruiting catchment areas and at demographic projections for the age cohort from which infantry recruits are drawn. It has also considered regional and national affiliations, the merger and disbandment history of individual battalions and existing commitments of battalions to future operations. The overriding objective has been to arrive at a solution which those currently serving in the Army will see as fair and equitable.
The conclusion of this process has been that 2nd Battalion the Royal Regiment of Fusiliers; 2nd Battalion the Yorkshire Regiment; 3rd Battalion the Mercian Regiment; and 2nd Battalion the Royal Welsh will be withdrawn from the Order of Battle.
In addition, the Royal Regiment of Scotland will see one battalion reduced to a single company. Ministers have agreed with the CGS that, in order to raise the profile of the Royal Regiment of Scotland, and of the Army, in Scotland, a public duties company will be created, returning sentries to Edinburgh Castle and the Palace of Holyroodhouse on a permanent basis for the first time in years. Accordingly, the Argyll and Sutherland Highlanders, 5th Battalion, the Royal Regiment of Scotland, will be re-roled as a public duties company.
These withdrawals and mergers, unwelcome as they will be in the units affected, are fair and balanced and have been carefully structured to minimise the impact of the regular manpower reduction and maximise the military effectiveness of the Army. The reduction in regular forces will be offset by the enhanced role of the reserves and the whole force concept, which optimises the use of contractors both in peacetime and on operations.
The Chief of the General Staff and his team assess that this configuration will mean that Army 2020 can deliver the level of capability agreed in the SDSR. That is an excellent outcome given the appalling state of our inheritance at MoD, and I am extremely grateful to the CGS and the senior leadership of the Army for the constructive and intelligent way in which they managed this process. What I have announced today, while difficult and challenging for those directly affected, represents a vision for the future of a balanced, capable and adaptable British Army that will remain best in class.
The British Army has seen several transformations since the end of World War II: from wartime structure to Cold War; from conscription to professional force; and the downsizing at the end of the Cold War in Options for Change and Frontline First. Now it is embarking on another. The values of the Army have endured through previous transformations. They have sustained it through a decade of continuous campaigns. Those same values—courage, discipline, respect, integrity, loyalty and selflessness—will sustain it through this transformation and, no doubt, through many further iterations in the decades and centuries ahead, as this most enduring of British institutions looks confidently to a future in which it continues to adapt to an ever-changing world. I commend this Statement to the House”.
My Lords, that concludes the Statement.
Lord Astor of Hever
My Lords, the noble Lord started by talking about the £38-billion black hole. I do not want to score political points at the Dispatch Box but neither will I take any lectures from Labour on the £38-billion black hole. Defence must take its share in helping to reduce the deficit and our debt. Without a strong economy and stable public finances, it is impossible to build and sustain the military required to project power and maintain defence.
We have had to take difficult decisions. I should rephrase that: the Army and the Chief of the General Staff have had to take some very tough decisions. Despite the cuts that have been announced, Army 2020 will deliver approximately 90% of its current combat effect. The Army has produced an excellent paper, Transforming the British Army, which I commend to all noble Lords. In the light of the interest in the changes today, I have asked for copies of it to be put in all Whips’ offices. We are very clear that tradition and history must be respected, but it is also important to look to the future and ensure that the changes are seen as fair by those brave men and women currently serving and risking their lives.
I wrote as fast as I could, but I may not be able to answer all of the noble Lord’s questions. If not, I will certainly write to him. His first question asked what criteria were used to decide which units would be affected. A number of criteria have been taken into account before making final decisions, all of which presuppose the retention of a regimental system largely based on regional connections that continues to serve the British Army so well. These include maintaining balance across the broader armoured corps and infantry regimental structure and the capability roles within it, enabling efficient management of personnel, ensuring parity of opportunity and development for soldiers and officers, balancing regionally based regimental recruiting demand, looking back at the past 10 years’ recruiting performance, looking at the next 10 years’ demographics of regional recruitment pools to retain an effective regimental system, taking account of previous decisions on mergers and deletions, and limiting the number of cap badges affected, thereby ensuring a solution that those serving in the Army will see as fair and sustainable under the circumstances.
The noble Lord asked what underpinned these changes. The 2010 strategic defence and security review set out how the Armed Forces would be restructured to meet current threats, including managing risks before they materialise, and maintain a broad spectrum of defence capabilities. The SDSR also directed that the Army should return from Germany by 2020. Subsequently, further work to balance the books in defence, together with the report of the independent commission on the Reserve Forces, was led by the then Defence Secretary who announced in 2011 a requirement for an Army of 120,000—82,000 regulars, 30,000 trained reserves and 8,000 reserves in training.
The noble Lord asked about the availability of reserves and our discussions with employers. I can assure him that considerable discussions are taking place and have taken place with employers. If this is going to work, we have to integrate the reserves. We realise how important that is. Also, the Government must get off the mark and be part of the solution. He asked whether Army 2020 reversed the SDSR decisions. The answer is no. Army 2020 redesigns the Army to be able to undertake the task specified by the SDSR, but with fewer regulars and an increased number of better integrated reserves.
The noble Lord asked whether the Army is able to adapt. The answer to that is yes, of course. I have spoken to a number of officers and soldiers, and they are all very excited at the changes and are up for the challenge. I have also spoken to a number of reserves who are also excited about the changes and very much look forward to the future challenges. He asked about planning assumptions. Army 2020 still delivers the requirements of existing defence planning assumptions, and we cannot of course predict the findings of the 2015 SDSR. He asked what came first when decisions to make these changes were made. The reductions were driven by the requirements in the new Army 2020 structure, then by consideration of which units were the most sustainable, while avoiding the loss of cap badges.
The noble Lord asked about the five-year period, and I can assure him that there will be no change to the existing reserve mobilisation rules. Finally, he asked: how long is a long intervention? Army 2020 is capable of a long-term enduring operation.
I hope that I have answered most of the noble Lord’s questions, but I will certainly write to him on any others.
Lord Touhig
My Lords, a year ago next Tuesday, the Prime Minister stood up to address the National Assembly for Wales in Cardiff and said he wanted to record his gratitude to the brave Welsh regiments. He went on to say:
“From the trenches of Northern France to the mountains of South Korea they have fought and died in defence of our nation and our values”.
He concluded by saying,
“I will always be an advocate for this country and everything it has to offer”.
Wales can offer no greater sacrifice than the lives of her young men in defence of our country as we have seen in Afghanistan. With the Prime Minister’s words fresh in my mind—and perhaps more in despair than in hope of an answer—what more could we have done in Wales to protect the Welsh regiments from these government cuts, short of threatening a referendum on independence?
Lord Astor of Hever
My Lords, I share the noble Lord’s respect for the Welsh regiments. The CGS, supported by his command team, has made very hard choices in deciding where reductions are made to bring the Army size down to 82,000, and the Army has rigorously applied a set of criteria to make these difficult decisions. They were based on capability, recruiting demography both now and in the future, appropriate national representation and solutions that do not undermine regimental principles, established in the last round of changes in 2004. Previous mergers and deletions were also taken into account, to ensure that decisions were seen as fair by as many people as possible.
Lord Lee of Trafford
My Lords, from these Benches I join the earlier tribute to the Tornado crews lost in Scotland and to those soldiers killed in Afghanistan. Perhaps I may say that just having a few minutes to question this important Statement is extremely unsatisfactory and almost an insult to our Armed Forces. I hope that before too long we will have a proper debate on our Armed Forces and that my noble friend will discuss this with the Leader of the House. It is somewhat ironic, I would suggest, that in the Statement reference is made to “an increasingly uncertain world”, yet today we are talking about reducing significantly the size of our Regular Forces.
On the question of the reserves, I have three specific questions. First, how many members of the Regular Forces does he expect will be involved in training 30,000 new reservists? Secondly, does he believe that in future we will probably need a specific covenant to protect our Reserve Forces from things such as totally unhelpful and unprincipled employers? Thirdly, where will all this new training be done, given that we seem to have a significant problem with our bases? If I interpret correctly the article today in The Times about bringing back our forces from Germany, this seems to be on the backburner, with a question mark over it.
Lord Astor of Hever
My Lords, my noble friend mentioned the possibility of a debate and I would certainly welcome that. I will have a word with our Chief Whip and see if it would be possible later in the year. My noble friend mentioned the reserves and employers. The Ministry of Defence is committed to working with employers to understand their views on its use of reservists, the impact of legislation and a better understanding of what an employer can realistically sustain in future. We will publish a consultation paper in autumn setting out our proposals. Following that, we will be able to make informed decisions early next year on the terms and conditions of service, employer engagement, the Government’s commitments as an employer and any legislation necessary.
My noble friend asked how many people would be involved in training. I cannot come up with a specific figure, but this is a good example of where integration of the reserves with the regular Army will be so important and we will use a number of the reserves to help with the training. As for where they would train, we have not yet decided what will happen in Germany, but there are very good training areas there which we might continue to use after 2020. The SDR talks about bringing all our troops back from Germany by 2020. As my noble friend knows, there are some brilliant training areas in this country. He and I have been to Salisbury Plain, Otterburn and lots of different training areas. In Wales, I spent a lot of my time in the Army at Sennybridge with its beautiful countryside. So there are a lot of training areas and I hope that answers all my noble friend’s questions.
Lord Ramsbotham
I, too, thank the Minister for his reply and declare two lateral interests with regard to the Statement. First, as Adjutant General to the Army, I had to implement the Options for Change instruction to reduce the Army by a third over three years. Let us remember what that meant in terms of all the people who were in the Army. Secondly, Lieutenant General Nick Carter was at one time my ADC and later MA. He, his father and I served together in the same regiment, the Rifle Brigade, whose tie I am proud to be wearing today.
I have two things to say. First, I think like many of us, I deplore the leaking of this Statement during the past few days, because I wonder whether those responsible for it realise the damage that it has done to the morale and well-being of the Armed Forces whom they claim to support. I hope that the Minister will take every possible step to discover who is responsible for this and take appropriate action. It must not be allowed to happen.
The noble Lord, Lord Lee, asked for a debate on defence. I welcome that, because the other thing that I wanted to say was about striking the balance between the Armed Forces. I wonder whether the Army has gone a step further than the other two forces. If there is any restructuring or rebalancing to be done, will the Army be reconsidered in the light of what happens?
My question relates to the last page of the Statement, which says that the vision is that the Army will remain “best in class”. Who else is in that class?
Lord Astor of Hever
My Lords, the noble Lord mentioned General Nick Carter and the Rifles. The Rifles are a very good example of a change that has really worked. All the people I meet who serve in the Rifles are hugely proud of that regiment and of the successful change that it has made.
The noble Lord mentioned the leaks, which did not come from the Ministry of Defence. I was told about these changes only yesterday. A very small group of people in the Ministry of Defence knew of them, so I do not know where the leak has come from. I will certainly go back to the department and see whether we cannot do more to stop such leaks.
We could debate “best in class” all afternoon, but I have met quite a number of officers and reservists in the past 24 hours who are hugely excited about the challenges of the future and really feel that they are up to it.
Lord Crickhowell
I fully understand why this is being done and I fear that £38 billion is probably an underestimate. The noble Lord, Lord Ramsbotham, referred to leaks. There is one other feature of this Statement which I regret: it disguises the historic names which are disappearing. My noble friend referred to “current regimental names” and the Statement named the 2nd and 3rd Battalions. However, the 1st Battalion The Royal Regiment of Wales, carries the title “1st Battalion Royal Regiment of Wales (Royal Welch Fusiliers)”. I do not know, now that the 2nd Battalion is to disappear, whether that historic name can be retained or what other historic names can be retained. Luckily, we have retained, I believe, in the Royal Regiment of Wales the historic flash, the hackle and other regimental insignia. I hope that in future Statements an explanation is given of exactly which historic regiments are going and how their traditions are to be maintained as far as possible, because they are of great importance when it comes to pride and to recruiting in the areas concerned.
Lord Astor of Hever
My noble friend makes a very good point. This is not a matter for politicians; it is a matter for the Army. It must decide how these regiments will go forward and whether antecedents will be included. I go back to the point I made about The Rifles and how successful the term “The Rifles” has been and how proud soldiers serving in The Rifles are of that.
I can come up with a better answer for the noble Lord, Lord Ramsbotham, about the best in class. Clearly, we are not able to compete with the United States but the British Army is the partner of choice within NATO for its strength and capability.
Lord Dannatt
My Lords, the Statement quite rightly draws favourable attention to the work of the Chief of the General Staff. I certainly echo that. He and his staff have made a very good fist out of the problem that was passed to them. But does the Minister accept that there are elements of risk that are beyond the capability of the Chief of the General Staff to manage himself within current Army resources? We all know that in the past two years of the current Government major decisions have been made on defence—in shorthand terms, prioritising a number of equipment programmes over manpower. That has brought us today to the announcement of a reduction in the size of the Army by 20%—a very sobering day for the Army, whichever way you look at it. Will the Minister assure the House that he will keep these elements of risk under review?
The risks I point to in particular are whether the noble intention to furnish the size of the Army up by a further 30,000 from the reserve will come about successfully. One hopes it will but there is an element of risk in it. Secondly, the Army’s equipment also carries a fair degree of risk. It lacks a protected manoeuvre capability for those armoured infantry brigades. Protected mobility has come out of Afghanistan with the armoured vehicles that have been provided for that operation but battlefield manoeuvre is woefully lacking and unlikely to be fielded until 2022. So will the Minister assure the House that these areas of risk will be kept under review, particularly in the context of the strategic defence review of 2015?
Lord Astor of Hever
My Lords, I cannot commit any future Government to what comes out of the SDSR in 2015 but I can assure him that we, and I think any sensible Government, will keep all these issues under review. On the noble Lord’s point about risk, I discussed this at some length with the Chief of the General Staff and he is very confident that he is on top of this issue and that we can handle any risk in future.
Lord Anderson of Swansea
My Lords, following on from the point made by the noble Lords, Lord Ramsbotham and Lord Crickhowell, would it be fair to say that the MoD is the only vessel which leaks from the top? Referring to the reserves and the points made, clearly the success or otherwise of the new proposals depend on the enhanced role envisaged for the Territorial Army, and that in turn depends on the co-operation of employees both in the private and the public sector. Is it not a fact that more and more companies are not headed by people with military experience but are foreign-owned and therefore less likely to understand the national needs here? What is the position in respect of those companies, particularly if there are longer periods abroad? As for the public sector, what estimate has been made of the availability of staff to cover shortage areas, such as anaesthetists, at a time when there are increasing pressures on our hospital services? Also, many reservists and particularly their families do not envisage these longer periods of service.
Lord Astor of Hever
My Lords, the noble Lord makes a very good point. Out in Afghanistan at the moment we rely on a lot of reserve medics. I was out in Camp Bastion in March and I met a number of anaesthetists, surgeons and people playing vital medical roles, many of whom are reserves who help the regulars.
The noble Lord talked about leaks. This leak did not come from the Ministry of Defence. I can assure the noble Lord of that.
The noble Lord talked about the enhanced roles of the reservists. In the Statement there was mention of the independent scrutiny team to assess the progress that we are making with the reserves. This is led by General Robin Brims, who is chairman of the Council of Reserve Forces’ and Cadets’ Associations. He will make his first report in the summer of 2013. This is an issue which we are taking very seriously and it is not going to work unless the reserves are fully integrated into the regular Army.
Lord Burnett
My Lords, I was concerned to hear that 24 Commando Regiment Royal Engineers is to be withdrawn. Can my noble friend tell me which formation will fulfil the engineer functions in support of the 3rd Commando Brigade Royal Marines?
The Statement refers to redundancies which are happening and which will follow. As my noble friend said, the British Army has shown the highest standards of professionalism, courage and devotion to duty, particularly over the past 15 years of continuous and hazardous war-fighting. If it is decided that a member of the Armed Forces is to be made compulsorily redundant after 15 years of service, and is offered a financial package actuarially calculated to be worth, say, £100,000, whereas if he or she had served for 16 years it would have been worth £110,000 or, more likely, more, the very least our Government should do is to compensate that person on a pro rata accrual basis.
I know that my noble friend will share my concerns and agree that generosity, fairness and integrity should be the underlying principles in these matters. Will he look into this matter as one of urgency to ensure that the Government’s deeds match their words?
Lord Astor of Hever
I understand that 24 Commando Engineers is an Army regiment that supports the Royal Marines. Although we are withdrawing the regiment, we will leave behind a squadron, which has only 20 fewer people than a regiment, so it will not be a serious change.
On my noble friend’s second question, I will look into the matter, but it is inevitable that some of those selected for redundancy may leave without completing sufficient service to qualify for an immediate pension or equivalent. The Armed Forces pension scheme recognises that, by paying significantly larger tax-free redundancy compensation lump sums to those who narrowly miss out on immediate incomes than to those who qualify.
Any pensions rights that have been earned will also be preserved, meaning that an index-linked pension and further tax-free lump sum become payable at the age of 60 or 65, depending on the pension scheme. Whereas the majority of other ranks normally have to serve 22 years before receiving immediate income, the Armed Forces redundancy scheme has reduced that requirement to 18 years, a concession of four years which will enable many redundantees to receive an immediate income for which they would otherwise not have qualified.
The Earl of Caithness
Will my noble friend tell the House by how much the Royal Regiment of Scotland will be reduced?
Lord Astor of Hever
One battalion, which I think is about 650, will go down to company strength. That will be an integrated company that will perform the ceremonial at Holyrood and Edinburgh Castle and will take soldiers from the rest of the Scottish regiments.
Lord Stirrup
My Lords, if the plans for Army 2020 are to have any chance of success, we shall need a fundamental change in this country of culture, not organisational process, with regard to the status of reservists in society and the workplace. Meanwhile, the Ministry of Defence has just announced a triennial review of the National Employer Advisory Board, a crucial body contributing to the development of reserve policy. Rather than a routine triennial review at this stage, would it not make sense to seize the opportunity to bring together employers, reservists and regulars to work out a plan to achieve the culture change without which Army 2020 simply will not work?
Lord Astor of Hever
My Lords, the noble and gallant Lord makes a very good point about employers. A lot of discussion is taking place with employers. As I have said twice, we attach much importance to our relationship with employers. This will not work unless we bring them on side. A lot is happening, but I would be very interested to hear any suggestions from the noble and gallant Lord.
Armed Forces Act (Continuation) Order 2012
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Lord Astor of Hever
That the draft order laid before the House on 22 May be approved.
Relevant document: 3rd Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 25 June.
Armed Forces Day
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Lord Rosser
To ask Her Majesty’s Government what level of financial or other form of support they are providing for Armed Forces Day on Saturday 30 June.
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever)
My Lords, the Government are supporting this Saturday’s Armed Forces Day in many different ways. Members of the Armed Forces are involved in events up and down the country, from parades to fly-pasts, including the national event in Plymouth. As well as meeting the costs of this participation, the Ministry of Defence has made grants of some £223,000 to help communities to organise their own events. In addition, reservists were invited to wear their uniforms to work yesterday, and Armed Forces veterans were encouraged to wear their veterans’ badge. As part of the build-up to Armed Forces Day, show your support flags will be flown on all government buildings and town halls, and some local authorities are taking the opportunity to sign up to their own community covenants. This all adds up to a wide-ranging celebration of what our Armed Forces bring to this country.
Lord Rosser
My Lords, yesterday we had a Question about discrimination against our Armed Forces, and another example has been reported in the press this morning. Earlier this week, we saw Ben Parkinson carrying the Olympic torch through Doncaster. He suffered appalling injuries in Afghanistan in 2006—the loss of both legs, and brain and back injuries, which are euphemistically described as life-changing injuries. Ben Parkinson carried the torch for 300 metres. It took him 25 minutes to complete the walk. It was an act of great determination, guts and, yes, courage.
It is so that we can express our thanks, gratitude and support to our Armed Forces and veterans, and the enormous sacrifices that so many have made on our behalf, including giving their lives, that we have Armed Forces Day. In thanking the Minister for his comprehensive reply, may I ask whether the Government will review the levels of future support that we as a nation give, in whatever form, to Armed Forces Day to ensure that the crucial role undertaken on our behalf and the sacrifices made by our Armed Forces continue to be fully understood and appreciated, including by the minority of individuals and organisations who knowingly or unknowingly still discriminate against Armed Forces personnel?
Lord Astor of Hever
My Lords, the Armed Forces will be very grateful for the Opposition’s continued support, and I share the noble Lord’s admiration for the courage of Ben Parkinson in Doncaster. With regard to discrimination, the Cabinet sub-committee on the Armed Forces covenant, chaired by Oliver Letwin, will oversee work across government and ensure that momentum on all strands of the covenant is maintained. The noble Lord asked whether we are doing enough to spread the message. Armed Forces Day now has over 1 million followers on Facebook, and this shows just how much the day has caught the imagination of people in this country. We will keep the level of assistance that we provide under review. However, one of the most remarkable features of Armed Forces Day is the way in which the lead is being taken by communities themselves, rather than here in Whitehall.
Lord Dannatt
My Lords, it fairly reflects the view of those who are serving, have served in or are veterans of our Armed Forces when they say how grateful they are for the upsurge in support from the British public over the past four or five years for what they have been doing. However, there are genuine concerns about the sustainability of Armed Forces Day, notwithstanding the Minister’s previous Answer. Will he consider asking his officials to conduct a survey in the coming months of the number of cities, towns and communities that have laid on activities for this Armed Forces Day, compare them with the activities on Remembrance Sunday and the remembrance period, and try to validate the thought that a better model for the sustainable recognition of our Armed Forces in the future might be to combine on one day—probably in November—the celebration of those who have served our nation in uniform with remembering the sacrifice of those who have lost their lives?
Lord Astor of Hever
My Lords, I will certainly take the noble Lord’s suggestion back to my department. I can assure him that I have a list here of all the events taking place throughout the country, and there seems to be a great deal of enthusiasm from all sections of the country.
Lord Palmer of Childs Hill
In replying to a debate on 19 June about Armed Forces Day, my honourable friend the Parliamentary Under-Secretary of State for Defence said:
“former service personnel were encouraged to wear a veterans’ badge”.—[Official Report, Commons, 19/6/12; col. 194WH.]
Does my noble friend feel that the time has come to stop prevaricating in committees and to introduce a national defence medal to be awarded on application to all those who have served our country in the Armed Forces, and to cut all red tape and allow our service personnel to proudly wear all medals awarded to them by other nations?
Lord Astor of Hever
My Lords, the independent review by Sir John Holmes of the rules applicable to the awarding of military medals is currently under way. He is considering all known campaigns for medals, including the case for a national defence medal, and will report reasonably soon.
Lord Davies of Stamford
I know the noble Lord is a great supporter of our Armed Forces and stands up for them on many occasions. Will he therefore join me in condemning the absolutely despicable behaviour of the publican of Browns bar in Coventry the other day who refused to admit two soldiers, who had been taking part in a military funeral, because they were wearing their uniforms? Will he look again at the recommendations—there were 40 in all—of the national recognition of the Armed Forces inquiry in the last Parliament? One of those recommendations was that we should outlaw discrimination against armed services personnel and provide the same kind of protection that we provide against discrimination on grounds of sex, race, sexuality or disability, so that these incidents never happen again.
Lord Astor of Hever
My Lords, I agree entirely with what the noble Lord said about that terrible act in the bar at the time of the funeral of the serviceman who was killed. I pay tribute to the noble Lord, Lord Davies, who commissioned the report of inquiry into national recognition of the Armed Forces when he was Defence Minister, which of course led to the setting up of Armed Forces Day.
Lord Burnett
Will my noble friend explain the role to be taken by the reserve forces on Armed Forces Day, and will he elaborate a little further on the involvement of the great city of Plymouth on Armed Forces Day?
Lord Astor of Hever
My Lords, Wear Your Uniform to Work Day took place yesterday, when all reservist and cadet organisations were encouraged to wear their uniform to work to highlight their important role in the defence of our country. The Plymouth event promises to be a spectacular occasion, with a tri-service parade; a fly-past by Typhoons, historic aircraft and the Red Arrows; a steam-past led by HMS “Argyll”; and lots of other service equipment on show. I am delighted that the city of Plymouth has fully embraced its opportunity to host the national event this year.
Armed Forces: Discrimination
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Lord Tunnicliffe
To ask Her Majesty’s Government what is their assessment of the levels of discrimination against serving and former members of Her Majesty’s Armed Forces.
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever)
My Lords, the Armed Forces covenant sets out the principles that those who serve in the Armed Forces, whether regular or reserve, those who have served in the past and their families should face no disadvantage compared with other citizens and that special consideration is appropriate in some cases, especially for those who have given most, such as the injured and the bereaved. Any discrimination against members of the Armed Forces community is to be abhorred, and we will continue to be alert to any cases which are brought to our attention. I believe that the vast majority of the population are hugely supportive of those who defend them.
Lord Tunnicliffe
My Lords, I agree with the Minister about that wide support. Saturday is Armed Forces Day. It will be a day of celebration. Never in recent times has the level of approval of the Armed Forces been so high. Nevertheless, despite the efforts of both parties, some members of the Armed Forces still have problems. The splendid report of the noble Lord, Lord Ashcroft—I never thought that I would find myself saying that—found that in the past five years 20% have suffered verbal abuse, 5% have suffered violence or attempted violence, 18% have been refused service in hotels, pubs and elsewhere when wearing the uniform in the UK, and more than 25% have been refused a mortgage, loan or credit card. My right honourable friend Jim Murphy, the shadow Secretary of State, wrote to the Secretary of State on 27 May to urge him to hold cross-party talks on how to end discrimination against our Armed Forces and their families, including the option of introducing new legal protections for the services community. Will the Minister assure the House that this request will receive the fullest possible consideration?
Lord Astor of Hever
My Lords, we thank my noble friend Lord Ashcroft for his very helpful report and are reassured by the high level of support for the Armed Forces that he mentions. The report provides pointers to areas requiring attention. We believe that education rather than legislation is the most effective way to combat discrimination. We can lead this if we work together on a cross-party basis in Parliament to celebrate the contribution of our Armed Forces. An example of this is having troops marching into Parliament on their return from Afghanistan and being given refreshments and tours by MPs and noble Lords. This is the initiative of the All-Party Group for the Armed Forces. In his letter to Jim Murphy, the Secretary of State said:
“I would welcome a discussion with you on how we can ensure that everything we do in Parliament emphasises our cross-party support for the Armed Forces and the people who serve in them”.
Lord Addington
My Lords, does my noble friend agree that it is not now that is the problem, as the Armed Forces have a high profile since they are engaged in combat and we have casualties coming back? We must do something that guarantees that we continue to take an interest when this conflict is over because discrimination usually increases during times of ignorance. Peace in Afghanistan may well bring this.
Lord Astor of Hever
My Lords, my noble friend makes a very good point. The problem exists not just in the present but in the future. I entirely agree with him.
Lord West of Spithead
My Lords, the worst discrimination I ever suffered was shortly after meeting my wife, when she told me that the two most useless things in a sailing boat are an umbrella and a naval officer. Joking aside, the Minister referred to education. We need to educate young people about the importance of the services and one of the best ways of doing that is the cadet forces. Are we going to put more effort into getting CCF and other units into a broader spectrum of schools to try to encourage this?
Lord Astor of Hever
I am grateful to the noble Lord for that question. The answer is yes, we are working very hard on that and we may have more to say on the issue in the days to come.
Lord Selkirk of Douglas
My Lords, what advice and guidance would the Minister give to service personnel who find themselves in difficulties as a result of direct discrimination?
Lord Astor of Hever
My Lords, first, I would tell them to get in contact with their chain of command, which will work closely with the civil police or other bodies, as appropriate, to address any problem. I understand one of the problems that they encounter is with mortgage lenders. Service personnel facing credit-rating difficulties because of time spent abroad should approach prospective mortgage lenders, and all prospective landlords or letting agents, to instruct their credit reference-checking agencies to undertake a manual check of the individual circumstances.
Baroness Dean of Thornton-le-Fylde
Does the Minister agree that discrimination can take many forms? With the repositioning of Armed Forces personnel from Germany over the coming years, one area of concern may well be about the opportunity for their children to have access to the schools that their parents want them to go to and to get on the doctor’s list in the area that they wish. Does he agree that we may need to review the covenant, which is an extremely good initiative, to ensure that the families of Armed Forces personnel are not indirectly discriminated against?
Lord Astor of Hever
My Lords, the noble Baroness makes a very good point about children’s education and doctors. This is an area that we are looking at very closely.
Lord Astor of Hever
My Lords, I agree with my noble friend. A great deal can be done by local communities. Community covenants are voluntary statements of mutual support between the civilian community and its local Armed Forces community in the form of a written pledge. These local partnerships are usually made between the Armed Forces in an area and the local authority and joined by local business organisations, charities and other public bodies as appropriate.
Armed Forces Act (Continuation) Order 2012
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Lord Astor of Hever
That the Grand Committee do report to the House that it has considered the Armed Forces Act (Continuation) Order 2012.
Relevant document: 3rd Report from the Joint Committee on Statutory Instruments.
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever)
My Lords, I am pleased to speak to the Armed Forces Act (Continuation) Order 2012. The purpose of the order is to continue in force the legislation governing the Armed Forces for a further period of one year, until November 2013.
I should like to say a few words about the legislation that the continuation order is set to continue—that is, the Armed Forces Act 2006 as amended by the Armed Forces Act 2011. The 2006 Act made significant changes to the legislation governing the Armed Forces and established a single system of service law for the first time. The single system applies to all members of the Armed Forces, wherever in the world they are serving.
The 2006 Act was fully implemented and came into force on 31 October 2009. I am pleased to say that the services say that the 2006 Act is doing a good job—the modest scale of changes made to it by the 2011 Act is testament to that—so I am confident that the 2006 Act will continue to serve the Armed Forces well for many years to come.
Your Lordships’ House has enjoyed full and interesting debates on matters of great importance to the Armed Forces, none more so than during last year’s passage of the Armed Forces Act 2011, which received Royal Assent on 3 November last year. That Act continued the Armed Forces Act 2006 for a further year, allowed it to be continued by annual Order in Council until 2016 and made various provisions to amend the Armed Forces Act 2006.
I should also like to say a few words about the 2011 Act. Although it is modest in size, its provisions are wide-ranging, partly as a result of the Ministry of Defence normally bringing forward primary legislation only every five years. I am pleased to report that over half the provisions in the new Act have been commenced, and an implementation programme for the remainder is well under way. Our aim is to complete the largest part of that work by spring 2013. Notably, for the first time, and as a result of this Act, the Armed Forces covenant is now recognised in legislation. The 2011 Act places an obligation on the Defence Secretary to report annually on progress made by the Government in honouring the covenant. The first report will be published at the end of this year. The Armed Forces covenant makes a clear commitment by the Government on how service people should be treated. Now, this and future Governments will be held to account on what they deliver on the covenant.
I should make a further observation about the order that we are considering today. Previous Governments have given an undertaking that Ministers moving instruments subject to the affirmative procedure will tell the House whether they are satisfied that the legislation is compatible with the rights provided in the European Convention on Human Rights. We believe that the order that we are considering today is compatible with the convention rights. I welcome this opportunity for another interesting debate. I beg to move.
Lord Craig of Radley
My Lords, I thank the Minister for his introduction. The Armed Forces Act 2011 introduced into law the concept of the Armed Forces covenant, as he has mentioned, and the particular requirement for the Secretary of State to prepare an Armed Forces report. I was pleased to note when that report is due to appear.
As the Minister knows, I have also tabled a Question for Written Answer about compulsory redundancies. I asked whether, in selecting personnel for compulsory redundancy, consideration was given to their immediate pension point. For the record, is the Minister able to answer this question now? There has been considerable anxiety and press coverage. There is a feeling that the Government are solely focused on achieving financial savings rather than showing understanding for the effect on the individuals involved of a sudden abrupt end to their aspirations of a lifetime career in the Armed Forces. Equally, it is a difficult time to find alternative employment in civilian life.
The effect is of course not confined to the individual but spreads to their immediate family and friends, who are as shocked, taken aback and worried about the future as the individual being made redundant. What steps is the Ministry taking to help those who are being sacked? There seems to be little in the public domain to give confidence that these individuals are being looked after with sympathy and real understanding for their plight. It would underline the value of the military covenant, and show that personnel should be considered, if a more proactive approach to the impact of redundancies on the individual were to be taken by the Ministry of Defence.
Lord Astor of Hever
My Lords, I am grateful to the noble and gallant Lord, Lord Craig of Radley, and the noble Lord, Lord Rosser, for their support in the debate today. The noble and gallant Lord asked about compulsory redundancy. When selecting personnel of the Armed Forces for compulsory redundancy, no consideration was given to the proximity of the immediate pension point. As we reduce the size of the Armed Forces, our priority is to ensure that the services maintain the correct balance of the skills and experience across the rank structures that are required to deliver operational capability now and in future. It is that which has determined the redundancy fields.
The noble and gallant Lord asked whether we were focused just on financial saving. The department has gone to great lengths to carry out these redundancies as sensitively as possible. We fully understand that making the transition from the Armed Forces into civilian life can be daunting and we remain committed to helping service leavers in taking this important step. The Ministry of Defence offers service leavers a wide range of activities that help to facilitate the transition to civilian employment. The support offered is built around preparing the service leaver for future employment in terms of accessing appropriate opportunities for reskilling as well as accessing suitable civilian job opportunities.
The majority of resettlement provision is contracted out to the career transition partnership—the partnering relationship between the MoD and Right Management Ltd. The contract is successful as 97% of eligible service leavers use CTP, 93% of whom tell us that they succeed in becoming settled or gain employment within six months of leaving. That figure increases to 97% after 12 months, and 57% will have had two jobs.
I am grateful for the support of the noble Lord, Lord Rosser. He asked whether, if we did not approve what we are doing today, the Armed Forces would cease to exist. He also asked whether there was other legislation or a more appropriate way of doing this. A change was proposed by the Ministry of Defence in the Armed Forces Bill in 2005 but was resisted by the Defence Committee and the Select Committee that considered the Bill. Both committees favoured retaining the present arrangements and the Ministry of Defence amended the Bill accordingly. What would the effect be if the order were not made? Unless the Armed Forces Act 2006 is continued, there would not be lawful authority for the disciplinary system that governs the Armed Forces. I hope that that addresses the issue.
Lord Rosser
Can I be clear, at least in my mind, that the only effect of not continuing this order would be the impact that it would have on the disciplinary system and not on the reality of our Armed Forces continuing to exist?
Lord Astor of Hever
My Lords, I think I need to write to the noble Lord. The disciplinary issue is pretty important but it is quite complicated, to the extent that I probably do not have time to provide an answer now, but I shall write to the noble Lord. If I may, I shall study the Hansard record of the points that have been raised and write to the noble and gallant Lord and the noble Lord if I have anything to add to these exchanges.
Armed Forces Act (Continuation) Order 2012
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Defence: Trident Replacement Programme
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Lord Lea of Crondall
To ask Her Majesty’s Government what is their assessment of the consequences for nuclear non-proliferation of proceeding with a Trident replacement programme.
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever)
My Lords, first, I am sure that the whole House will wish to join me in offering sincere condolences to the families and friends of Captain Stephen Healey of the 1st Battalion The Royal Welsh; Corporal Michael Thacker of the 1st Battalion The Royal Welsh; Private Gregg Stone of the 3rd Battalion The Yorkshire Regiment; Lance Corporal James Ashworth of the 1st Battalion Grenadier Guards; and Corporal Alex Guy of the 1st Battalion The Royal Anglian Regiment, who were killed on operations in Afghanistan recently. My thoughts are also with the wounded and I pay tribute to the courage and fortitude with which they face their rehabilitation.
I turn to the Question. The nuclear non-proliferation treaty, the NPT, does not require unilateral disarmament. Maintaining the UK’s nuclear deterrent beyond the life of the current system is fully consistent with our obligations. There is also no evidence or likelihood that others would follow the UK down a unilateralist disarmament route. We will achieve sustainable global nuclear disarmament only through a multilateral process, and the NPT represents the best means currently available for pursuing this.
Lord Lea of Crondall
My Lords, on the very sad news from Afghanistan, I am sure that everyone on this side of the House will wish to endorse the sentiments expressed by the Minister and his condolences to the five families concerned. The premise of my Question is multilateral, not unilateral. It is the Government who are, in practice, trying to ride both horses. Recent researches for the Trident Commission show that the nuclear powers will be spending $1 trillion—$1,000 billion —over the next 10 years. How does the Minister expect the non-nuclear states who have signed the non-proliferation treaty to stick to their side of the deal—the grand bargain—unless the likes of us stick to it too? Secondly, the very well-informed defence correspondent of the Evening Standard reported yesterday a “decision by stealth” to go for full Trident replacement. Why are the people of this country not entitled to a national conversation about the pros and cons of where we should be heading as we approach the so-called “main gate” decision in 2016?
Lord Astor of Hever
My Lords, we are committed to retaining the minimum credible nuclear deterrent capability necessary to provide effective deterrents, and we keep that under constant review. At the same time, we are working multilaterally for nuclear disarmament and to counter nuclear proliferation. We believe that this is the right balance between our commitment to long-term disarmament and our responsibilities to ensure our national security. I do not accept the noble Lord’s point about stealth. So far as concerns a public debate, a main gate is not expected until about 2016. A decision about how best to consult will be made nearer that time.
Lord Lee of Trafford
My Lords, I join these Benches in the earlier tribute. How seriously is my noble friend’s department studying an alternative to Trident? Where is that study up to? Does he not find it rather strange that the Secretary of State for Defence never seems to refer to that study? In this context, would he like to comment on the recent article in Der Spiegel which indicated that Israel was arming its submarine Cruise capability with nuclear capacity?
Lord Astor of Hever
My Lords, the purpose of the study is to help the Liberal Democrats to make the case for an alternative to the Trident system, as agreed in the coalition programme for government. I understand that the Cabinet Office is leading the review and it is being overseen by the Minister for the Armed Forces. It will report by the end of the year to the Prime Minister and the Deputy Prime Minister. The Secretary of State did mention it in his UQ in the other place yesterday; it was mentioned several times. On the point about Israel, we are aware of the widespread assumption that Israel possesses nuclear weapons but note that the Israeli Government have refused to confirm this.
Lord Gilbert
I am sorry. It is also clearly not the case with any of the extraordinary arrangements that the Liberal party seems to be contemplating at the moment.
Lord Astor of Hever
My Lords, I do not want to be drawn into an argument with my colleagues but I can say that the first duty of any Government is to ensure the security of their people. The nuclear deterrent provides the ultimate guarantee of our national security, and for the past 42 years the Royal Navy has successfully operated continuous deterrent patrols to ensure that. I pay tribute to the crews and support staff who ensure the continued success of deterrent operations and to the families of all those personnel, many of whom are regularly away from home for long periods.
Lord Hannay of Chiswick
My Lords, what consideration are the Government giving, during the clearly lengthy period between now and the main gate decision on Trident, to making the nuclear dimension of our security posture less prominent than it was during the Cold War and to pursuing measures to reduce both our alert status and those of other nuclear weapon states?
Lord Astor of Hever
My Lords, this will be one of the issues that the alternative study overseen by my colleague, the Armed Forces Minister, will be looking at. As I said earlier, the study will report to the Prime Minister and Deputy Prime Minister by the end of this year.
Lord Rosser
My Lords, from the opposition Front Bench I extend sincere condolences from this side to the families and friends of the five brave members of our Armed Forces who lost their lives in Afghanistan recently in the service of our country. We support retaining our independent nuclear deterrent and are strong advocates of the nuclear non-proliferation treaty. We believe that multilateral disarmament is the route to securing the collective goal of a world free of nuclear weapons. As has been said, the Government set up a Liberal Democrat review on alternatives to the replacement of the Vanguard class strategic submarines carrying the Trident missile. The Minister has indicated when he expects the review to be published, but can he also confirm that the cost of delaying the final decision on the renewal of the Trident programme until after the next general election, purely for internal coalition government political reasons, has already cost the nation’s taxpayers £1.4 billion?
Lord Astor of Hever
My Lords, I am grateful to the noble Lord for the shared consensus that the nation’s security should be above party politics. So far as concerns the costs of any delayed decision, there are no costs at all, as the main gate decision will not be taken until 2016.
Defence Budget
Lord Astor of Hever Excerpts(12 years, 6 months ago)
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The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever)
My Lords, first, I am sure that the whole House would wish to join me in offering sincere condolences to the families and friends of Corporal Brent McCarthy of the Royal Air Force and Lance Corporal Lee Davies of 1st Battalion Welsh Guards, who were killed on operations in Afghanistan recently. My thoughts are also with the wounded, and I pay tribute to the courage and fortitude with which they face their rehabilitation.
The Statement made in another place by my right honourable friend the Secretary of State for Defence is as follows.
“With your permission, Mr Speaker, I would like to make a Statement on progress in balancing the defence budget and establishing a sustainable equipment programme as part of the work to deliver the vision set out in the strategic defence and security review—a vision of formidable, adaptable and well equipped Armed Forces, backed by balanced budgets, disciplined processes and an efficient and effective department.
The United Kingdom’s Armed Forces and the Ministry of Defence exist to protect our country and its interests, and provide the ultimate guarantee of its security and independence. My overriding priority as Secretary of State for Defence must be achieving success on military operations. However, our defence is built on the extraordinary quality and commitment of our people, and ensuring their welfare is close behind. I am clear that when we ask the brave men and women of our Armed Forces to put themselves in danger to ensure our national security, we owe it to them to make sure that they are properly supported with the very best equipment we can give them to do the job.
The best way I can support our Armed Forces as they restructure and refocus themselves for the future is to give them the assurance of stable and well managed budgets and the confidence that the equipment programme is affordable and deliverable, because the only way to ensure, in the long term, the ability to project power, to protect our national security and to ensure that our troops have the equipment they need is to have a defence budget that is in balance.
A strong, diverse economy and sound public finances are a prerequisite to being able to sustain the Armed Forces that our national security requires, so correcting the disastrous fiscal deficit that we inherited and returning the economy to sustainable growth are themselves strategic imperatives. Defence has, rightly, contributed to that fiscal correction, as well as putting its own house in order by dealing with the chaos we inherited in an equipment programme that left a yawning black hole under our Armed Forces.
Tough decisions have been taken and I want to take this opportunity to pay tribute to those who have taken them: my predecessor, the right honourable Member for North Somerset, who showed the courage to tackle head-on some of the worst and longest-running procurement fiascos, and to make agonising choices over capabilities that Britain could simply not afford; the Armed Forces chiefs, who have grasped the challenges the SDSR has presented and embraced the opportunity to create a sustainable foundation on which they can build for the future; and the leadership team in the MoD, who have worked tirelessly to turn this supertanker around, to tear up the old ways of doing things and to embrace a new model that will ensure that the MoD never again gets into the mess it was in by early 2010.
Thanks to all of them, and with the decision I announced to the House last week on carrier strike being the final piece of the jigsaw, I can tell the House today that, after two years’ work, the black hole in the defence budget has finally been eliminated and the budget is now in balance, with a small annual reserve built in as a prudent measure to make sure that we are not blown off course by unforeseen events—a plan endorsed by the chiefs and by the Treasury. We have achieved this by facing up to the fiscal reality and taking the tough decisions that the party opposite dodged, reluctantly accepting smaller Armed Forces and redoubling our resolve to invest in the best possible equipment for them; transforming the role of the TA as the Regular Army gets smaller and making it an integral part of Future Force 2020; and embarking on a major restructuring of the department and a reduction of just over a third in the civilian workforce.
These have not been easy decisions, but they have been the right ones. This has been a difficult period for all our people in the Armed Forces and more widely across defence. Major change, the threat of redundancy and uncertainty about the future all present challenges to confidence and morale. Reaching a balanced budget for the MoD’s planning round 12, or PR12, represents a hugely important milestone in the transformation of defence—a symbolic break with the failed practices of the past and a solid foundation on which to build the future—and it starts to put that destabilising uncertainty behind us as we move forward with defence transformation.
At the heart of the plan is the defence equipment programme, which by the end of the PR12 period will account for around 45% of the total defence budget. I have seen over the past seven months just how complex defence procurement is—developing cutting-edge technology so that our Armed Forces have a battle-winning edge in projects that rank alongside the biggest being undertaken in this country today. While there have been widely publicised failures, there have been unsung successes—most notably in Afghanistan where the urgent operational requirements process funded by the Treasury has repeatedly allowed us to deliver quickly and efficiently the equipment our Armed Forces need. Brigadier Patrick Sanders, who commanded 20th Armoured Brigade last year in Afghanistan, has described the equipment his troops had as ‘second to none’ and ‘the best that I’ve experienced in 27 years’. We need to build on the best elements of the UOR model to achieve that level of performance across defence as a whole.
At the same time, we must learn from the failures. Over the 10 years of PR12, we will spend almost £160 billion on new equipment and data systems and their support, reflecting the planning assumption agreed with the Treasury of a 1% per annum real increase in the equipment and support budget from 2015. But poor decision-making and poor management have too often meant that the Armed Forces have not received the full benefit of all this spending.
Under the previous Government, the equipment plan became meaningless because projects were committed to without the funding to pay for them, creating a fantasy programme. Systemic overprogramming was compounded by a ‘conspiracy of optimism’ where officials, the Armed Forces and suppliers all consistently planned on a best-case scenario, in the full knowledge that once a project had been committed, they could then revise up costs with little consequence. It was an overheated equipment plan, managed on a hand-to-mouth basis, driven by short-term cash rather than long-term value, with constant postponements and renegotiations driving costs into projects in a self-reinforcing spiral of busted budgets and torn-up timetables. Rigid contracting meant no flexibility to respond to changed threat priorities or alternative technologies becoming available, and it is our Armed Forces and the defence of our country that have ultimately paid the price for this mismanagement. The culture and practice have to change.
So we will move forward with a new financial discipline in the equipment plan—underprogramming, rather than over-programming, so that we can focus on value rather than cash management—giving our Armed Forces confidence that once a project is in the programme, it is real, it is funded and it will be delivered, so they can plan with certainty. The core committed equipment programme, covering investment in new equipment and data systems and their support, amounts to just under £152 billion over 10 years, against a total planned spend of almost £160 billion. That £152 billion includes, for the first time ever, an effective, centrally held contingency reserve, determined by the new Chief of Defence Materiel, of over £4 billion to ensure the robustness of the plan.
It includes: 14 new Chinooks, Apache life extension and a Puma upgrade; a programme of new armoured fighting vehicles worth around £4.5 billion over 10 years and a £1 billion upgrade of the Warrior armoured fighting vehicle; the building of the two Queen Elizabeth-class aircraft carriers; the remainder of the Type 45 destroyers and the new Type 26 frigates; the Astute class and successor nuclear submarines; investment in new Wildcat helicopters; the Merlin upgrade programme and the assessment phase for Merlin marinisation; the introduction into service of the Voyager air-to-air refueller and troop transporter, the A400M air transporter and the Air Seeker surveillance aircraft; an additional C17 strategic airlifter; continued investment in Typhoon and the Joint Strike Fighter; and £7 billion invested in complex weapons—the smart missiles and torpedoes that give our Navy, Army and Air Force their fighting edge.
Balancing the budget allows me to include within that £152 billion core equipment programme: a £4 billion-plus investment in intelligence, surveillance, communications and reconnaissance assets across the CIPHER, SOLOMON, Crowsnest, DCNS and Falcon projects; the outright purchase of three offshore patrol vessels which are currently leased; capability enhancements to the Typhoon; and a range of simulators, basing and support equipment for the new helicopters and aircraft we are introducing.
This programme represents the collective priorities of the Armed Forces set out by the Armed Forces committee on which all the service chiefs sit. The chiefs confirm that this committed core equipment programme, together with the available £8 billion of unallocated headroom, will fund the capabilities they require to deliver Future Force 2020, as set out in the SDSR. That £8 billion will be allocated to projects not yet in the committed core programme only at the point when they need to become committed to be delivered on time, and only in accordance with the military assessment of priority at the time. No project will be allowed to commit without a 10-year budget line to cover not only its procurement but its support costs—not rocket science, you might think, but quite an innovation in defence procurement none the less. Individuals and contractors can expect to be held to account for the estimates on which decisions to commit to projects are based.
This Government believe that transparency is a driver of performance, and I want to be as transparent as possible about the defence budget because greater transparency will help me to drive the change that we need to see in the MoD. But the House will understand that some elements of the defence budget are security-sensitive and other elements are commercially sensitive. It is essential that we preserve our negotiating space with defence contractors without announcing all our detailed intentions in advance. To provide the reassurance that the House will want, while protecting the commercial and security interests of defence, I have agreed with the NAO that it will review the equipment plan and confirm that it is affordable. The NAO will have confidential access to detailed information on the equipment plan that cannot be published, but once it has completed its work we will publish its verdict on the plan, together with a summary of the plan itself.
Today’s announcement and the work we are taking forward mean that for the first time in a generation the MoD not only has a balanced budget and an appropriate reserve but is putting in place the behaviour-changing incentives and structures that will keep it balanced. It means that the politicians and civil servants in the MoD can look the Armed Forces in the eye in the knowledge that we are delivering them the stable platform that they need to build Future Force 2020, with a budget agreed across government, across the department and by the service chiefs, and a firm baseline for the transformation that is under way to an Armed Forces that may be smaller but will be adaptable, agile and equipped with the very best technology, supported by an MoD that is laser-focused on its needs and working alongside a defence industry that can invest with renewed confidence in an equipment plan that is actually deliverable. It represents the start of a new chapter in the long history of UK defence. I commend this Statement to the House”.
Lord Astor of Hever
My Lords, of course I agree with what the noble Lord said about the bravery of our Armed Forces in Afghanistan. However, I am sorry that he took such a pessimistic line on our Statement by saying that there is not much to it. We have had to make some very difficult decisions. In the SDSR, as the noble Lord knows, the Harriers went, the “Ark Royal” went and MRA4 went, along with a whole lot of other things that we would much rather have kept. We have had to make some very difficult civilian and service redundancies. There is much greater financial discipline in the department now than there was. It has been a very difficult task.
The department's fundamental approach is to deliver the Future Force 2020—so I can confirm to the noble Lord that there is absolutely no loss of capability. We have debated that over a long period, and we are absolutely convinced that that is correct. The process had the SDSR at its core and has made no significant changes to it. At the end of the SDSR we acknowledged that there was more work to be done, and, obviously, balancing the budget is a vital part of that process.
The noble Lord asked if I could guarantee that there would be no cuts for 10 years. The Government have committed to carrying out an SDSR every five years. Although we would not want to pre-empt the outcome of that process, it is clearly important that the department is able to make long-term plans. However, I cannot say what the next SDSR, in 2015, will come up with.
The noble Lord asked if all commitments were fully funded. I can confirm that the answer is yes. He said that a “miracle” had taken place. The Secretary of State has a brilliant—outstanding—head for figures, along with all his other very great leadership qualities. This has given great leadership to the department as far as the budget is concerned. We have a much better relationship with the Treasury than we used to have. The Permanent Secretary is adopting a very disciplined approach to all budget holders, which is a great help to us.
The noble Lord asked about redundancies. I can confirm that, as far as the civilian headcount is concerned, there will be a reduction of about 32,000 by 2020, which equates to just over a third of civilian manpower. Service manpower will be reduced by 33,000, or 19%, by 2020, of which approximately 19,500 will be in the Army, 8,000 in the Royal Air Force and 5,500 in the Royal Navy.
The last of the noble Lord’s questions was whether I felt we had the capability to keep hold of the plan. My answer is: absolutely, yes.
Lord Lee of Trafford
My Lords, I should like first to join these Benches in the earlier tribute.
Now that the MoD budget is on much more of an even keel, and given the long-term nature of so many MoD contracts—10 years is not particularly long, and my noble friend talked about the 10-year line—would it not make sense now for the political parties to try to get together to agree a common approach to the level of defence spend? Would it not make a lot of sense if that could be achieved?
I appreciate that my noble friend may not be able to answer all my specific questions at this stage, so perhaps he will write to me. First, have there been any changes to profit margins on non-competitive contracts? Secondly, on the reductions in the civilian workforce that he talked about, how many reductions have taken place so far? I know that there is an aspiration to reduce by about 30,000, but how many specific redundancies have taken place?
My noble friend referred to the offshore patrol vessels that have apparently been leased. Leasing is normally quite an expensive operation. When were they originally leased and what are the financial terms of the purchases? Further, are any other naval vessels currently being leased?
On the question of the NAO review, can my noble friend give an indication of how long the work will take and when publication might come through? Finally, will the likely considerable costs of withdrawing equipment from Afghanistan come out of the normal defence budget or will they be treated as, in effect, the equivalent of urgent operational requirements?
Lord Astor of Hever
My Lords, I thank my noble friend. He has asked quite a few questions and I will not be able to answer them all here, but I will write to him. He asked first whether I think it is a good idea for all the parties to get together. I certainly have very good relations with my shadows and I am very happy to take this back to the department and come back to my noble friend. It is an excellent suggestion, and it is one that he has made in the past. I shall let him know how I get on.
I cannot give my noble friend an instant answer to his questions about profit margins and reductions in the civilian and Armed Forces staff. He also asked whether we are leasing any other vessels which might be bought. Off the top of my head I think that HMS “Protector” might fall into that bracket, but I do not want to be held to that answer and I will write to my noble friend. I am not sure how long the NAO report will take, but I am happy to write to him about that as well.
Lord Gilbert
My Lords, when I first was lucky enough to join your Lordships’ House some 15 years ago, and I was already appointed as the Minister of State for Defence Procurement, I held strongly to the view that defence matters are far too important to be treated in a partisan way. I was extremely flattered and gratified that when I was introduced into the House, one of my two sponsors was a distinguished Conservative former Defence Minister and former Secretary-General of NATO. The Statement I have heard today is replete with political self-justification of a sort that should have no place in a Defence Secretary’s Statement. I am very sorry for our Minister because he has had to read it out. The last defence Statement took 13 minutes to repeat, and this one took 15 minutes, with large parts of it just as odious as the previous one. Again, I am sorry that our Minister has to come out with all this stuff because he is a thoroughly decent man. It has no place whatever in a Defence Secretary’s Statement, and if he wants to bandy about political remarks, I would ask him to look at who it was that saddled this country with the F35C—Dr Liam Fox—and he can put that in his pipe and smoke it.
However, today I have only one question for the Minister, who I regard as a good friend and hold in great respect. I hope that he does not consider himself tainted with the remarks I have found it necessary to make. What assessment has been made in the MoD of our ongoing loss of the C130, which is going to be kept by the Americans for many years? We are going to lose interoperability with around a dozen of our closest allies—the Australians, the Canadians, the Americans, the Qataris and many others. I think that this is going to be one of the most damaging consequences of these so-called reviews, and I should be grateful for the Minister’s views on the subject.
Lord Astor of Hever
My Lords, I hope that the noble Lord, Lord Gilbert, does not feel that I approach matters in a partisan way. I do not use this as a criticism, but I try to go out of my way to invite Members of all parties in this House into briefings. This is indeed a very complicated Statement so I shall be happy to lay on a briefing in the Ministry of Defence on all these issues. However, I hear what the noble Lord says.
With regard to the C130, the problem as I understand it is that the production line is going to close quite soon. I did have a flight in the A400M the other day—it was its first flight. I did invite the noble Lord and I had hoped that he would join me—and I think I very nearly got there. It is a wonderful plane and the Royal Air Force, which was originally very much against it coming into service, is now absolutely delighted. I think it makes a very good addition to the Royal Air Force.
Lord King of Bridgwater
I apologise to my noble friend for not being here to hear the opening Statement, but I have for greater accuracy obtained a copy, which I have had a chance to read. He spoke about a bipartisan approach. If I understood correctly the noble Lord who spoke for the Opposition, he called for no more cuts. It seems that we are moving in that direction, which is encouraging. The MoD is very good at producing plans; the problem is whether they are fully executed. Even if the NAO approves the plan, the challenge will then be the difficulties of having single contractors and the various contracts which might be entered into—they are major challenges. In that connection, I agree with what my noble friend said about the Secretary of State. We have a more numerate, literate Secretary of State than perhaps were some in the past. If he keeps up the initiative that he has announced in this Statement, the challenge for him is to make sure that it happens.
Lord Astor of Hever
I thank my noble friend for his support. I do not underestimate the difficulties, but, as my noble friend said, the current Secretary of State is very numerate. He is on top of his brief, and I am fully confident that we can carry these plans out.
Lord Stirrup
I welcome the new arrangements that the Minister has announced, but following on from what the noble Lord, Lord King, said, it seems to me that the MoD enters into contracts which, to my inexpert eye, more or less boil down to, “If you want more than you originally asked for, you pay more; if you want less than you originally asked for, you pay more; and, actually, if you want what you originally asked for, you pay more”. For the MoD’s books to have a chance of remaining balanced, we will need contracting staff and legal staff who are at least as good as those employed by industry. When will the Minister be able to say something about the approach that the new Chief of Defence Materiel will take on this subject? How will he recruit that level of skill within his staff that ensures that contracts are to the benefit of both sides and not just of the one?
Lord Astor of Hever
My Lords, the noble and gallant Lord makes a very good point. There have been cases in the past where the department has been let down in negotiations with industry by the legal staff. We are looking closely at this issue; we are aware of it and of the sums of money that need to be paid. It is certainly in our in-tray at the moment.
Lord West of Spithead
My Lords, after 25 years of serving at sea and then serving in the madhouse—I am sorry, I should have said the MoD—I share the view of the noble Lord, Lord King, and the noble and gallant Lord, Lord Stirrup, about the difficulties associated with contracts. I worry that it is not that easy to stay within costs, and there is an awful lot of smoke and mirrors as well. I hope that the projections are true, but I have real doubts about them. I also share the view that defence is so important for the nation that we should try wherever possible to be cross-party in our approach to it.
Looking at the 10-year timeline for PR12, am I right in assuming that the money for the replacement of the V class submarines, which will be coming to its big spend at the end of that period, is being allowed for in the figures that have been given in this Statement? This morning, at the EIS summit, the right honourable Member for Runnymede and Weybridge spoke very strongly about the need for deterrence.
Lord Astor of Hever
My Lords, I can assure the noble Lord that we have a new team in the MoD who, as I have seen with my own eyes, are absolutely on top of this issue and will do their very best to make sure that this plan is properly carried out. On submarines, as confirmed in the SDSR, the MoD is committed to delivering seven Astute-class submarines, at a cost of approximately £10 million. In order for the UK to continue as a nuclear power, the MoD is committed to delivering continuous at-sea deterrent. The MoD has started the £3 billion assessment phase for the £25 billion successor programme to deliver long-term CASD.
The Lord Bishop of Wakefield
My Lords, first, from this Bench, I join with all others in their tributes to those who have lost their lives recently in Afghanistan. I am grateful to the Minister for the considered Statement and for the acknowledgement that the budget should be balanced. I am sure that we would all agree with that. I assume from what he said that much of this is derivative from the SDSR. I am concerned about three questions. First, progress has been made recently with the military covenant, particularly in the area of welfare for families affected by casualties and injuries, and, more generally, for those serving in the Armed Forces. At a time when the conflict continues in Afghanistan, I want to be assured that all that has been set out there can be fulfilled in the short term.
Secondly, and similarly in the short term, in thinking about resources for those serving in Afghanistan, we have all heard on a number of occasions the fears of senior officers in the forces, who are unhappy with the present support in terms of equipment. Can we be assured of that support at present, rather than looking further into the future?
My third question is about morale. I am grateful for all the briefings that the Minister has organised. Morale is one issue that has come up time and again. There are bound to be difficulties at a time when such drastic cuts have to be made. In the Army, I think another 20,000 people will eventually lose their jobs within the forces, and that uncertainty causes continuing difficulties with morale. I want assurances on welfare, the equipment at the present time and how we will try to encourage morale at this tricky moment.
Lord Astor of Hever
I am grateful to the right reverend Prelate. On the military covenant, nothing in the Statement will affect any decision or commitment to members of the Armed Forces. The right reverend Prelate also mentioned equipment. I am sure that some noble Lords went to the briefing by Brigadier Sanders the other day. He is just back from Afghanistan and said that the equipment is better now than at any time in his 27 years in the Army. He could not say enough good things about the equipment. Finally, it is a difficult time as we have to make these redundancies but we are doing our best to ensure that morale is as high as possible.
Lord Forsyth of Drumlean
My Lords, would my noble friend take this opportunity to pay tribute to the role which Scottish regiments have played in the British Army and reaffirm that the best future for regiments such as the Black Watch, with its proud tradition, is in Scotland’s remaining part of the United Kingdom and continuing to play such an important role in its defence?
Lord Astor of Hever
My Lords, I share my noble friend’s views. I am a strong supporter of the union and the Scottish regiments. My brother served in a Scottish regiment. I have the highest respect for them.
Lord Davies of Stamford
My Lords, the noble Lord’s own remarks in the House today have been temperate and statesmanlike, as they always are. Yet the Statement that he read out from the Secretary of State was tendentious, and quite disgracefully so. The great difference between the Labour Government and the Conservative-led coalition in defence spending is that we built up the nation’s Armed Forces. We increased real spending by more than 10 per cent. This coalition has run down the numbers in our Armed Forces by 20 per cent and disgracefully exposed us to having no carrier strike capability for 10 years. The noble Lord said that the equipment in Afghanistan was better than it had ever been. I wonder as a result of which decisions that equipment came through the pipeline.
I was amazed to hear the Secretary of State, whose remarks were read out by the noble Lord, taking credit for a whole lot of projects, such as the A400M, the new Chinook helicopters—although the Government have reduced their number by 10—and the Scout vehicle, which I negotiated. It was a very disingenuous Statement and I hope that the Government will think twice before coming to the House with such a piece of party-political propaganda on so serious a matter in future.
Lord Astor of Hever
My Lords, I am happy to pay tribute to the noble Lord and the Opposition for many of the defence procurement decisions that were taken. I think that he would agree that we were left with a big black hole and a whole host of problems that had to be sorted out. That is why I am here today.
Lord Trefgarne
My Lords, my noble friend has announced the planned future size of the regular forces—the Army, Navy and Air Force. Will he give parallel figures for the Reserve Forces—the Territorial Army, the Royal Naval Reserve and the Royal Auxiliary Air Force?
Lord Astor of Hever
My Lords, I cannot give my noble friend those figures today, but I will be able to do so very soon.
Lord Hennessy of Nympsfield
My Lords, I add my thanks to the Minister for his Statement and particularly welcome the firm place that he gave to the successor submarines in the long-term costing and programme. Reverting to the question asked by my noble and gallant friend Lord Stirrup, when will we get the report of Mr Bernard Gray, Chief of Defence Materiel, on the options for structuring future procurement operations? I think it was completed several months ago; it was ready at the end of last year. Some of us have been awaiting it with keen anticipation.
Lord Astor of Hever
I am also waiting with keen anticipation. I cannot give the noble Lord a date, but as soon as I hear one, I will let him know.
Baroness Browning
I welcome my noble friend’s Statement. Having spent six years on the Public Accounts Committee, where we spent many hours dealing with defence procurement, I believe that it is important to get the books balanced first. Will he say something about what changes are to be made in project management within the MoD? Clearly, from the reports that the Public Accounts Committee has received from the NAO over the years, there is a serious systemic problem there involving both systems and personnel.
Lord Astor of Hever
My Lords, my noble friend makes a very good point. I assure her that the Permanent Secretary is getting on top of that issue and taking a very disciplined approach to budget holders. A number of them have had a quiet gripe to me about that, but it is the right thing to do and the only way to get on top of the problem.
Baroness Symons of Vernham Dean
My Lords, I thank the noble Lord for his briefings. He is extremely helpful. I, too, regret that the tone of the Statement was at such odds with the way in which the noble Lord conducts his business with other Members of the House.
The Statement lays great stress on the spiralling costs in defence procurement, which has been a problem for a very long time. What is being done about the other problem which has been around for a very long time, which is the constant delays to the programme? Once we are told that a capability will be delivered in five years, in my time—and I have seen it go on since—one was always certain that there would be delay after delay. Getting that under control, as well as the costs, is so important.
Lord Astor of Hever
The noble Baroness makes a very good point. We hope that now that we are on top of the budget, there will be less need for delays. Industry and the MoD will be certain where they are, so there will be less need for delays.
Defence: Carrier Strike Capability
Lord Astor of Hever Excerpts(12 years, 6 months ago)
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The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever)
My Lords, first, I am sure that the whole House will wish to join me in offering sincere condolences to the families and friends of Guardsman Michael Roland of the 1st Battalion, the Grenadier Guards; Corporal Andrew Roberts of 23 Pioneer Regiment, the Royal Logistic Corps; and Private Ratu Silibaravi of 23 Pioneer Regiment, the Royal Logistic Corps, who were killed on operations in Afghanistan recently. My thoughts are also with the wounded and I pay tribute to the courage and fortitude in which they face their rehabilitation.
The Statement is as follows:
“With permission, Mr Speaker, I would like to make a Statement on the carrier strike programme.
The strategic defence and security review considered the carrier strike programme, put in place by the previous Government, as part of a wide-ranging review of options for delivering effective future defence while dealing with the black hole in Labour’s defence budget and the unaffordable ‘fantasy’ equipment plan bequeathed to us by the party opposite. While the review confirmed that carrier strike would be a key capability in delivering Future Force 2020, it also recognised the unsustainability as a whole of the defence equipment plan we inherited.
The strategic decision on carrier strike which emerged from the SDSR process was to convert one carrier with catapults and arrestor gear to operate the carrier variant of the Joint Strike Fighter, facilitating greater interoperability with allies, with a decision on the future use or disposal of the second carrier to be taken at the 2015 SDSR. The decision was also taken routinely to embark 12 fast jets while retaining the ability to surge up to the previously planned level of 36 aircraft. As the House would expect for such a complex and high-value project, the strategic decision taken at SDSR was followed by the commissioning of a detailed programme of work to look at the costs, risks and technical feasibility of all aspects of the proposed solution. That study was expected to take 18 months, completing by the end of 2012.
Since I took on the role of Defence Secretary in October last year, my overriding concern, after current operations and the welfare of our Armed Forces, has been to ensure the deliverability of the MoD’s equipment plan and the achievement of a balanced and sustainable budget. That will give our Armed Forces the assurance they need to carry out the massive transformation that will deliver Future Force 2020—the concept for our Armed Forces set out in the SDSR. The carrier project is a large element of the equipment programme and I have worked closely with the new Chief of Defence Materiel, Bernard Gray, to assess the technical and financial risks involved in it.
It quickly became clear to me that a number of the underlying facts on which the SDSR decision on carriers was based were changing.
First, as the programme to convert a carrier to operate with a catapult system has matured, and more detailed analysis has been carried out by suppliers, it has become clear that operational carrier strike capability, using the ‘cats and traps’ system, could not be delivered until late 2023 at the earliest, considerably later than the date envisaged at the time of the SDSR of ‘around 2020’. Because Britain’s carriers will have all-electric propulsion, and therefore do not generate steam like nuclear-powered vessels, the catapult system would need to be the innovative electromagnetic version being developed for the US Navy. Fitting this new system to a UK carrier has presented greater design challenges than were anticipated.
Secondly, and partly as a result of the delayed timetable, the estimated cost of fitting this equipment to the ‘Prince of Wales’ has more than doubled in the last 17 months, rising from £950 million to around £2 billion, with no guarantee that it will not rise further. Technical complexity and the cost of retrofitting ‘cats and traps’ to the ‘Queen Elizabeth’ would be even higher, making it unlikely that it would ever, in practice, be converted in the future.
Thirdly, at the time of the SDSR, there was judged to be a very significant technical risk around the STOVL version of the JSF and some commentators were speculating that it could even be cancelled. Indeed, the STOVL programme was subsequently placed on probation by the Pentagon. However, over the last year, the STOVL programme has made excellent progress and in the last few months has been removed from probation. The aircraft has completed over 900 hours of flying, including flights from the USS ‘Wasp’, and the US Marine Corps has a high degree of confidence in the in-service date for the aircraft. The balance of risk has changed and there is now judged to be no greater risk in STOVL than in other variants of JSF.
Fourthly, further work with our allies on the best approach to collaborative operation has satisfied us that joint maritime task groups involving our carriers, with co-ordinated scheduling of maintenance and refit periods, and an emphasis on carrier availability rather than cross-deck operations, is the more appropriate route to optimising alliance capabilities.
When the facts change, the responsible thing to do is to examine the decisions you have made and to be willing to change your mind, however inconvenient that may be; doing what is right for Britain, not burying your head in the sand and ploughing on regardless, as the last Government so often did. A persistent failure to observe this simple principle is at the root of many of the MoD budget problems that we inherited from the party opposite. I do not intend to repeat its mistakes. The decision taken in the SDSR to proceed with a carrier strike capability, despite the massive challenges we faced with the MoD’s budget, was the right decision. The decision to seek to contain costs by going for ‘cats and traps’ on a single carrier with greater interoperability with allies, and the cheaper CV version of the JSF aircraft, was also the right decision based on the information available at the time.
But the facts have changed. I am not prepared to accept a delay in regenerating Britain’s carrier strike capability beyond the timetable set out in the SDSR, and I am not prepared to put the equipment plan which will support Future Force 2020 at risk of a billion pound-plus increase in the carrier programme and an unquantifiable risk of further cost rises. So I can announce today that the National Security Council has agreed not to proceed with the ‘cats and traps’ conversion, but to complete both carriers in STOVL configuration. This will give us the ability to use both carriers to provide continuous carrier availability at a net additional operating cost averaging about £60 million per year. As we set out in the SDSR, a final decision on the use of the second carrier will be taken as part of SDSR 2015.
We will switch the order for JSF aircraft from CV to STOVL, which we can do without delaying delivery, and by making this announcement today we can plan on the basis of the first operational aircraft being delivered with a UK weapons-fit package. We expect HMS ‘Queen Elizabeth’ to be handed over to the Royal Navy in early 2017 for sea trials. We expect to take delivery of our first test aircraft in July of this year, and we expect the first production aircraft to be delivered to us in 2016, with flying from the ‘Queen Elizabeth’ to begin in 2018 after its sea trials are complete.
We have discussed this decision with the French Government and with the United States. The French confirm that they are satisfied with our commitment to jointly planned carrier operations to enhance European-NATO capability. The United States, on whose support we would rely in regenerating either type of carrier capability, has been highly supportive throughout this review, and I would like to record my personal thanks to the Secretary of Defence, the Pentagon, the Navy and the Marine Corps for their high level of engagement with us. I spoke to Secretary Panetta last night and he confirmed the US’s willingness to support our decision and its view that UK carrier strike availability and our commitment to the JSF programme are the key factors. The Chief of the Defence Staff and his fellow chiefs of staff—all of them—endorse this decision as the quickest and most assured way now to deliver carrier strike as part of an overall affordable equipment programme that will support Future Force 2020.
This was not an easy decision to take, but our responsibility is to make the right decision on the basis of the facts available to us. Neither I nor any of my colleagues came into government expecting decisions to be easy or pain-free. I have a responsibility to clear up the financial mess we inherited in the MoD, just as we are clearing up the mess we inherited across government as a whole: to set a balanced budget and an affordable, deliverable equipment programme with manageable and bounded risk. This decision addresses one of the last impediments to me announcing the achievement of those objectives to the House, and I hope to be able to do so very soon.
But it is not just about balancing budgets, critical as that is. It is about the UK’s defence, secured by having an appropriate and sustainable military capability. This announcement delivers an affordable solution to securing that capability and, with two useable carriers, gives us the option of continuous carrier availability. It confirms the expected delivery of the first test aircraft this summer; of the first production aircraft in 2016; of the first carrier into sea trials in 2017; and of the first flight of the JSF from the deck of the carrier in 2018, with an operational military capability in 2020. It confirms the support of our principal allies, the United States and France, and that of the defence chiefs. It shows that we, at least, are not afraid to take difficult decisions when they are right for Britain. I commend this Statement to the House”.
Lord Astor of Hever
My Lords, it is a bit rich for the Opposition to criticise when it was they who scrapped the Sea Harriers, a decision that a senior naval officer described as,
“one of the most disastrous military decisions ever undertaken”.
It was they who pushed the in-service dates of the carriers back two years, which drove £1.6 billion of costs into the programme with no capability gain, a decision which the Public Accounts Committee said set,
“a new benchmark in poor corporate decision making”.
I could go on.
I may not be able to answer all the noble Lord’s questions but I undertake to write to him. First, he asked if the Prime Minister felt that the STOVL was the right aircraft. I can categorically say the answer is yes, under the changed circumstances since we made the decision in the SDSR. The House should be aware that we are talking about a very capable aircraft. We have spent a lot of time debating Harriers. The STOVL-variant is a very much more capable aircraft than Harrier. It has a genuine day and night capability; it is bigger, faster and can fly higher for longer, and can carry more weapons. It has low observability—that is, stealth—and greatly improved survivability. It is a fifth generation technology and its sensors and systems integration make it a high-performance tactical ISTAR asset. JCA places the UK at the forefront of fighter technology.
The noble Lord said that he felt that the SDSR decision was wrong. The SDSR was about setting a strategic direction and we remain committed to reintroducing a carrier strike capability around 2020, but the Government made clear then that if costs—or facts—changed, we would not just plough on regardless. We said that we would spend time and money examining the option of carrier conversion and that is what we have done. A “main gate” decision will necessarily be the subject of a much greater level of analysis than that conducted for the SDSR.
The noble Lord pointed out that the B aircraft was on probation for a time. That is correct. As was said in the Statement, the STOVL programme was taken off probation in the United States in January 2012 after successful sea trials in November 2011 on board the USS “Wasp”. I have photographs here of the B-variant taking off from the USS “Wasp” which I am very happy to hand out to any noble Lord who would like them. The STOVL-variant is also required by the US Marine Corps and the Italian Navy. We are very grateful for the assistance that we have received from both the US Navy and the US Marine Corps.
The noble Lord asked how much money we had wasted. As of the end of April, we had committed £39 million on conversion investigations and a further £1 million on an air-to-air refuelling study. We do not consider this money to have been wasted. Changing the variant was considered the best course of action at the time of the SDSR and these costs were necessarily incurred. Without a detailed investigation of the impact of carrier conversion, we would not have been in the position today to have identified the significant rise in estimated costs and made the decision to call a halt to this programme. I think that I have covered all the questions, but if there were any others, I will check Hansard and write to the noble Lord.
Lord Lee of Trafford
My Lords, I join these Benches in the earlier tribute. Today’s Statement marks another sad chapter in the saga of the aircraft carriers. It ill beholds the Opposition to crow and to adopt the pose that they did today in their heavy questioning.
I have three questions. First, there appears to have been some change of heart or change of plan over the second carrier. My understanding was that the second would be mothballed, or possibly even sold; now it seems to be planned to be operated much more in tandem with the first carrier.
My second question is about the overall cost of the carriers. Where are we up to with our latest forecast of the cost of the two carriers? Thirdly, will my noble friend say a little more about interoperability, particularly with the French carriers?
Lord Astor of Hever
My Lords, we have an aspiration to use the second carrier, but this will be an issue that the next SDSR, probably in 2015, will have to consider, particularly in the light of the cost of crewing it, which we estimate to be about £60 million a year. I can assure my noble friend that it is our aspiration to have the second carrier ready to assist when the first carrier goes in for a refit, or for any other reason.
I feel uncomfortable giving my noble friend figures for the overall cost of the carriers. We are in discussions with industry and it would be wrong to reveal too many of those figures.
My noble friend asked finally about interoperability. The key intention agreed by the UK and France, which my noble friend mentioned, has always been to co-ordinate operations to ensure that when one country has a carrier in maintenance, the other has one available. Our ability to deliver this assurance will be enhanced should we ultimately decide to bring the second carrier into service. The US has made it clear that carrier availability, rather than cross-decking or the capability of aircraft, is the key issue for it.
Lord Stirrup
My Lords, in welcoming this decision, which is not only the right decision but, realistically, the only possible one, could I for the sake of clarity ask the Minister to confirm three points? First, will he confirm that the initial Joint Strike Fighter aircraft to be delivered to the United Kingdom, which will be instrumented aircraft for test and evaluation flying, will be STOVL variants and that this has always been the case, because, at the time of the SDSR, it was too late to change the choice of variant for those aircraft? Secondly, will he confirm that the first carrier, now in build, is being built without cats and traps and, again, that this always has always been the case, since, at the time of the SDSR, it was too late to change that? Thirdly, will he confirm that, as a consequence, the timescales for the delivery of the aircraft capability and the carrier capability have not changed from the pre-SDSR assumptions as a consequence of this excursion into carrier variant?
Lord Astor of Hever
My Lords, I am grateful to the noble and gallant Lord for his support. He and I sat through all the SDSR meetings and had to make the original decision. I can confirm to him that the first B-variant will be delivered in July this year and that the second one, I understand, will be delivered in October this year. They are both B-variants and both test aircraft. The third one, which will be delivered within 18 months, is also a B-variant—so all the first three aircraft are B-variants.
The noble and gallant Lord then asked me to confirm that the first carrier was being built without cats and traps and that the time when it would come into operation would not change. I can confirm that that is the case.
Lord Gilbert
My Lords, I, too, welcome this Statement, which must have been very difficult for the Minister to deliver. It took him 13 minutes to read out the Secretary of State’s Statement, and all he had to do was get up and say, “Sorry, you were right; we were wrong”, but he did not do that. But that is where we are.
Leaving aside all that fog about changed circumstances, I was very interested in what he said about a refuelling study. Why on earth did the Ministry of Defence need to engage in a refuelling study? It was buying the plane from the Americans. Why did not just ask the Americans what arrangements they had or did not have? I suspect that the plane will not have any refuelling capability because it will probably do damage to the stealth of the aircraft.
While I greatly welcome this decision, I still do not think that we out of risk and danger completely with the B version of this aircraft. Less than a year ago, Rear Admiral Venlet, the officer in charge of the whole programme in the United States, said that, so far, the F-35B is using more runway than desired in its short takeoffs and landings and that it cannot land vertically with as much payload as customers would like. I would be grateful if the Minister could speak to those two points. I am not too concerned about the second one, because you can always drop off fuel and ordinance that you have not used when you are trying to land, but concerns about the takeoff distance need careful attention and the Minister should explain to the House where we stand.
Lord Astor of Hever
I am grateful to the noble Lord for his measured welcome of the Statement. I have far too much respect for him to criticise him for his subsequent comments. I am not briefed on the refuelling study with the Americans; I will write to the noble Lord and put a copy of the letter in the Library of the House. I am not aware of the problems of runway and takeoff associated with the B-variant. All the briefing that I have had on that from Royal Naval officers and civil servants has been very positive. They are all very happy with the plane’s performance, but, again, I will write t the noble Lord on this issue of runway and takeoff.
Lord Burnett
My Lords, I apologise for missing the first few minutes of the Statement. Will my noble friend explain what impact this decision will have on our amphibious capability and the amphibious role envisaged for these carriers?
Lord Astor of Hever
I can assure my noble friend that we are doing quite a lot of work on this issue. Previous studies have shown that this decision may offer great flexibility in the employment of the carriers in other roles, particularly amphibious roles. The carriers are central to our amphibious assault capability and are a leading example of the expeditionary forces that underpin the core principles of the SDSR. I can assure my noble friend that there is plenty of room on the carriers to embark a good number of Royal Marines and to operate helicopters to support them. The B-variant can land on austere runways on land in support of ground troops.
Lord Reid of Cardowan
My Lords, the Minister rather led with his chin on occasions in his Statement when defending his predecessor’s decision. I am going to resist the temptation and keep my hand rather firmly in my pocket. I very much welcome the Statement made today by the Secretary of State, not least because it has reverted to a decision that was taken by the last Government on perfectly rational grounds and in which I played a minor role at the beginning. My colleague the noble Lord, Lord Browne of Ladyton, who is here today, played a much more major part.
The truth of the matter is that it is the easiest thing in the world for a new Minister, in a fresh dawn, to overturn the recommendations and decisions of their predecessor. A lot of political kudos can be attracted to that—a degree of bravura, a sense of decisiveness, ruthless leadership and so on. It is much more difficult for a Minister in a Government to overturn completely the decision of their immediate predecessor, and it takes a great deal of courage to do that. There is no political kudos—all that can be anticipated is criticism, “egg on face” quotes, and so on.
I congratulate the Government and the Secretary of State on having made the right decisions for the right reasons this time. This is right for the Armed Forces, for the security of the country, for the Navy and above all for the people who serve in the Armed Forces. In passing this commendation to the Secretary of State, will the Minister urge him to apply the same scrutiny and rationale to various other aspects of the SDSR, which, on the evidence of today’s decision, have been taken more in haste and in the pursuit of kudos than in the interests of national security of the country?
Lord Astor of Hever
My Lords, I am very grateful to the noble Lord for his welcome. This was a very difficult decision but it was right for the Royal Navy and for the country. In taking this decision, my right honourable friend the Secretary of State made no criticism of his predecessor’s decision. Things have dramatically changed over the cats and traps, and obviously with the B-variant. I will take the noble Lord’s other point, on bringing the same scrutiny to other aspects of the SDSR, back to the department.
Lord Davies of Stamford
My Lords, I do not think that anyone is going to be deceived by the attempts by the Secretary of State to make party political points or to make people see this as anything other than a discreditable shambles. It is very unfortunate. The Government would have done better to have come forward with a slightly more humble line and to have confessed that they had made a mistake.
Can we hear how many aircraft the Government are now proposing to procure? We still have not heard that. Does the noble Lord accept and acknowledge that, because the B version carries a lot of its weight in the form of its own lift fan, its range is much less—400 miles against 700 miles for the CV version? Its payload is similarly reduced, and therefore more aircraft will be required to give a similar military effect. Are the Government planning to purchase more aircraft to procure the same military effect? Will the Minister also recognise that if we simply restrict ourselves to purchasing the F-35B, we will have no deep-strike bombing capability at all once the Tornados have been withdrawn? Do the Government have any plans at all to replace that lacuna in our capability, which will emerge by the end of the decade?
Lord Astor of Hever
My Lords, again I resent this criticism. I feel that it is the noble Lord who should be a little humble, particularly when the party opposite’s last single year in office saw a staggering £3.3 billion increase in the total cost of the 15 largest defence equipment projects. The noble Lord asked me how many Joint Strike Fighter B-variants we are going to buy. In the first instance we intend to buy enough Joint Strike Fighter aircraft to build up our initial carrier strike capability. We do not intend to make final decisions on JSF numbers until our next strategic defence review, in 2015 at the earliest.
I will just re-emphasise what the Statement said. We are getting our first and second aircraft this year. We are getting the first production aircraft in 2016. The first aircraft trials at sea, when we will have three aircraft, will be in 2018. The initial operational capability will be in 2020, when we will have eight useable aircraft. This is three years earlier than would be possible with the C-variant.
Baroness Falkner of Margravine
My Lords, I accept that it must have been a very difficult decision to take, but clearly the sums involved point us in that direction. However, I thought that the most intriguing part of my noble friend’s Statement was that the Chief of the Defence Staff and his fellow chiefs,
“endorse this decision as the quickest and most assured way now to deliver carrier strike as part of an overall affordable equipment programme”.
I wonder what the advice to the Secretary of State from the chiefs was when he came in in 2010. I suspect that my noble friend will not illuminate that point right now.
My other point is about the question of interoperability versus collaboration. This is clearly a setback to our co-operation with the French. The lessons of Libya will have told us that it is vital that we continue to collaborate with them. Will he reassure us that we will continue to work with them to optimise our joint capabilities?
Lord Astor of Hever
My Lords, taking my noble friend’s second question first, I can reassure her on that point. I have had a number of discussions with the French military at all levels, and am very keen on pushing our relations with it. As for the chiefs giving their support, I understand that they all put their support in writing to No. 10. I cannot answer now the question about the advice that the Secretary of State received in 2010, but my noble friend might want to have a word with the noble and gallant Lord afterwards.
Lord West of Spithead
My Lords, this is clearly the correct decision, but I have two questions for the Minister. The first continues the point made by the noble Lord, Lord Lee. The decision that had been taken before was that we were going to have STOVL and run two carriers. Looking at this Statement in detail, it is not at all clear that we are really going to run two carriers. It would be dreadful if, after all this going round in circles like an oozlum bird for two years, we end up with only one carrier running. I hope that we can be more positive about the fact that we will run two in order to ensure that we have a carrier 100% of the time, because that is good for the nation and for the defence of this country.
My second point runs on from that. Perhaps the Minister could get across to the Secretary of State, and to the rest of his Front Bench, that this is good news. We have a 65,000-tonne ship because if you surge 26 Joint Strike Fighters, of whatever variant, it has to be that size. It is not because some admiral woke up and thought, “Gosh, I’ll have a big ship”. It is done for a reason. We should be very proud that this nation is building two of them. Let us get a bit of whoomph and say, “Right, we’ve made a decision, this is a fantastic thing, tens of thousands of people are working producing these things and they will protect and look after our nation for 50 years”.
Lord Astor of Hever
My Lords, the second carrier is, as I said, an aspiration and we very much hope it will be possible. We will certainly always have one carrier at sea. The decision on the second one will have to wait until 2015, but it is our aspiration that it is going to happen. As for the noble Lord’s point about it being a good news story, of course it is a good news story and we are very proud of British industry. I was up in Rosyth and Govan a couple of weeks ago and saw the work. I am enormously proud of what we are producing up there.
Lord Lyell
My Lords, I hope there is time for one quick question from a mere accountant. Can my noble friend confirm the wise words of the noble and gallant Lord, Lord Stirrup, about the effectiveness and competence of the new STOVL version? I believe that we shall make a major saving in the cat and trap system, although there may be some shortfall in deliverability of the particular weapons system in the distance. Can he write to me, or let me have this afternoon, a quick sum on the saving of the cat and trap system, not least the time and availability in 2017-18 of the new version?
Lord Astor of Hever
My Lords, I will be happy to write to my noble friend. I have a lot of figures here with which I shall not weary the House. I can tell him that to convert the “Queen Elizabeth” to cats and traps after she is built would cost between £2.5 billion and £3 billion.
Lord Greenway
My Lords, are we not in danger of short-termism? Following what the noble Lord, Lord West, just said, we will, we hope, end up with two immensely useful platforms that will last for 40 or 50 years and that will be able to take all sorts of strange aircraft about which we do not yet know. Therefore, the project going ahead as it is now is most useful.
Lord Astor of Hever
No, my Lords, I do not think that it is short-termism. We are in very good company with the B-variant. The US Marine Corps uses it; it is buying a lot of Joint Strike Fighters. The Italians are also going to buy them for their carrier. It is not short-termism at all.
Lord Foulkes of Cumnock
My Lords, although everyone seems happy that we are now back on the right track, can the Minister give us an estimate of the extra abortive expenditure involved in the unnecessary adventure of cat and trap?
Lord Astor of Hever
My Lords, I have already given an answer to the second question. I will read it out again, but before I do I must say that I am very grateful to the noble Lord for assuring me that we are on the right track. I said that at the end of April we had committed £39 million to conversion investigations and a further £1 million to an air-to-air refuelling study. We do not consider that money to have been wasted. Changing variant was considered the best course of action at the time of the SDSR and those costs were necessarily incurred. Without a detailed investigation of the impact of carrier conversion, we would not have been in a position today to identify the significant rise in estimated costs and to decide to call a halt to the programme.