Defence Reform Bill
Lord Astor of Hever Excerpts(10 years, 9 months ago)
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Lord Palmer of Childs Hill (LD)
My Lords, I am not happy with this amendment. Having listened to the explanation by the noble Lord, Lord Rosser, I shall explain why. Small and medium-sized enterprises—I was the director of one for many years—are concerned not so much with the money but with replacing the person. The noble Lord, Lord Rosser, touched upon that. I do not think that money is the problem. Giving SMEs a bit more money does not solve the problem that a key person in a very small organisation is not there. The argument for larger payments to smaller companies will only annoy larger companies which are the source of reservists—or territorials, at the moment.
The amendment in the name of the noble Lords, Lord Rosser and Lord Tunnicliffe, also mentions the self-employed. The idea of the self-employed going into the reserves under the new arrangements is that they will receive £500 a month, or whatever it is, to substitute for their self-employed earnings. That is a decision that they would need to make, and I hope they will make it positively; but the self-employed person is not so much worried about the £500 per month substitute for earnings from their customers or their clients as about keeping their customers and their clients while they are away, and money does not solve that.
I was interested in the comment made by the noble Lord, Lord Rosser, about the unemployed. It was a point that I had not thought about, and I, too, would welcome the Minister’s reply on that point.
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever) (Con)
My Lords, the Bill proposes granting the Secretary of State a power, by regulations, to make payments to the employers of reservists over and above those which may currently be made. The current scheme allows employers to recover costs incurred in covering the work of employees who are mobilised. Those costs may include the hiring of temporary staff or the payment of overtime.
The new power is intended to allow the Secretary of State some flexibility as to the provision to be made in regulations made under it—for example, as to which employers may receive a payment and which Reserve Forces activities trigger entitlement to a payment. However, the current intention is that the regulations will authorise the making of payments only to employers in small and medium-sized enterprises whose reservist employees are mobilised. The Secretary of State will be required to consult various bodies before making the regulations, including the Reserve Forces and cadet associations and a body representing the interests of employers.
I welcome the noble Lord’s desire to recognise that while all employers may feel some impact from the medium or long-term absence of staff, it is small and medium-sized enterprises that are likely to feel the greatest effects. We listened to employers during the Green Paper consultation and seek to reflect this concern in the regulations.
Amendment 17A would allow the regulations to make provision in such a way that the sums payable could vary depending on the size of the employer’s business. In particular, it would allow larger payments to be made to small and medium-sized businesses and to employers who are self-employed. The effect that this amendment seeks to achieve is already achieved by new Section 84A, taken together with the amendments made to Section 85(1) of the Reserve Forces Act 1996. Sections 84A and 85(1) already give the Secretary of State the flexibility to provide in the regulations so that the sums payable vary depending on the size of the employer’s business. The current intention is that the regulations will authorise the making of payments to employers in SMEs only. This is because larger companies are more likely to be able to absorb the costs and disruptions associated with absences from work to undertake Reserve Forces activities.
We have not made provision for the making of payments to the self-employed in respect of their own Reserve Forces activities, as such payments are made in recognition of the impact placed on employers. The self-employed reservist has elected to become a reservist and so accepted the risk of being mobilised themselves. Were we to pay them, we would, in effect, be handing the self-employed reservist a pay rise of up to £500 per month when mobilised. I do not believe that that would be a good use of taxpayers’ money, or would be well received by those reservists who are not self-employed, or by regulars.
I would like briefly to highlight what current payments we make to both the reservist and their employer when we mobilise a reservist. Reservists are entitled to claim for a “reservist award” and to make an allowable expenses claim. The reservist award consists of a salary top-up—a payment made to reservists whose military salary, when called out for operations, is less than their civilian earnings. Reservists can also claim for benefits in kind—benefits that have been suspended or withdrawn by their employers while the reservist is mobilised. The benefits covered include, but are not limited to, health or medical insurance, life insurance, accommodation, education fees for dependent children and the loss of a company car used by the reservist’s dependants. The resulting payment for all these elements of the reservist’s award, taken together, is subject to an upper limit or cap—less their service pay—of £548 per day, or £822 per day for certain medical officers. When, in connection with their mobilised service, a reservist chooses to remain in his occupational pension scheme and continues to make his employee pension payments, any contributions withdrawn by his employer will be paid by the MoD.
The allowable expenses claim consists of additional payments for the care of a dependent child or relative, additional expenses for the care of a pet, additional home insurance premiums and payments for the essential maintenance of the reservist’s main residence and garden for security purposes to ensure that the property looks lived-in. The resulting allowable expenses claim is without limit, but is subject to providing clear documentation of claims.
Employers are entitled to claim certain costs related to the mobilisation of an employee. The “employer’s award” consists of up to £110 per day—in other words, approximately £40,000 per year—which is the amount by which the following “replacement costs” incurred by the employer exceed the reservist’s earnings. These replacement costs are limited to pay for, if appropriate, the replacement of the reservist, and, if relevant, any overtime payments to existing employees and an increase in salary for an existing employee, as well as certain non-recurring or one-off agency fees and advertising costs—VAT exclusive only, where the employer’s business is registered for VAT purposes. An employer may claim the cost of retraining a reservist on return to work, where needed, for the reservist’s re-employment. There is no provision for additional administration costs and the extra costs of training an external replacement for the reservist or, indeed, one of his colleagues now doing his work. The capped amount—that is, £110 per day—is intended to represent the quantifiable extra costs, above the reservist’s normal pay, of employing a temporary replacement. The employer is not, of course, paying the reservist during their mobilisation.
Depending on their personal circumstances, a self-employed reservist may claim under SI 2005/859 as a reservist, as an employer, or both. However, such a reservist cannot make a claim for an award to recover the same cost as a part of the reservist’s or employer’s award.
We recognise the importance of reserve service and have sought to address the financial issues for both reservists and employers that mobilisation brings. In relation to the power to make further payments that we are bringing in with Clause 46, I can assure noble Lords that we will keep the payments under review and, if we need to make alterations and adjustments in future, we will have the flexibility to do so.
I am grateful to my noble friend Lord Palmer for his support, and I very much agree with the points that he made. I will try to answer his question along with the answer I will give to the noble Lord, Lord Rosser.
The noble Lord asked whether percentages were still the same, and broadly the answer is yes. He asked about the Jobcentre view of reservist training; it is provided for and is counted as being available for work. He asked whether financial assistance at £500 would be enough for small businesses. The Federation of Small Businesses said that it was more than it expected. It is always a judgment and if we need to be flexible, we can be.
Lord Rosser
Before I withdraw my amendment, can I clarify what I think has been said? We are talking about the additional payments to the employer, over and above what has already been paid—and I thank the Minister for setting out what the current arrangements are. On the additional payment, which is one of £500 a month for each month that a reservist is mobilised, can I confirm that the intention is that that will be paid only to small and medium-sized businesses? I think that he then said that there would be flexibility over the level of the payment. Does that flexibility mean that it could exceed that £500?
Lord Astor of Hever
The answer to the noble Lord’s first question is definitely yes—it is just for the SMEs. I shall need to get back to the noble Lord on the second question.
Lord Rosser
I thank the Minister for his reply and the noble Lord, Lord Palmer of Childs Hill, for his contribution. I am grateful to the Minister for setting out on the record what the current situation is and what the Government’s intentions are as regards this additional payment. In the light of the reply, I beg leave to withdraw the amendment.
Lord Astor of Hever
“Report on volunteer reserve forces
In Part 11 of the Reserve Forces Act 1996 (reserve associations), after section 113 insert—“113A Duty to prepare report on volunteer reserve forces
(1) An association must prepare an annual report on the state of the volunteer reserve forces so far as concerns the area for which the association is established.
(2) A report on the state of the volunteer reserve forces is a report that sets out the association’s assessment of the capabilities of the volunteer reserve forces, having regard to the duties that may be imposed on members of those forces by or under this Act or any other enactment.
(3) The assessment referred to in subsection (2) must, in particular, include the association’s views on the effect of each of the following matters on the capabilities of the volunteer reserve forces—
(a) the recruiting of members for the volunteer reserve forces;(b) the retention of members of those forces;(c) the provision of training for those forces;(d) the upkeep of land and buildings for whose management and maintenance the association is responsible.(4) A report under subsection (1) must also set out the association’s assessment of the provision that is made as regards the mental welfare of members and former members of the volunteer reserve forces.
(5) An association must send a report under subsection (1) to the Secretary of State—
(a) in the case of the first report, before the first anniversary of the day on which the last Future Reserves 2020 report prepared before the coming into force of this section was presented to the Secretary of State, and(b) in the case of subsequent reports, before the anniversary of the day on which the first report was laid before Parliament under subsection (6).(6) On receiving a report under subsection (1), the Secretary of State must lay a copy of it before Parliament.
(7) The duties under this section may, instead of being performed by an association, be performed by a joint committee appointed under section 116 by two or more associations in relation to their combined areas.
(8) Where by virtue of subsection (7) a joint committee has the duty to prepare a report—
(a) references in subsections (1) to (5) to an association are to be read as if they were to the joint committee, and(b) section 117(1)(a) (power to regulate manner in which functions are exercised) has effect as if the reference to associations were to the joint committee.(9) In subsection (5)(a), “Future Reserves 2020 report” means a report prepared by the External Scrutiny Group on the Future Reserves 2020 programme.””
Lord Astor of Hever
My Lords, during consideration of this Bill in the House of Commons, the Secretary of State made a commitment to introduce in this House a government amendment on Reserve Forces that would reflect an amendment tabled by Julian Brazier and 37 other Members of Parliament. Amendment 18 is that amendment, inserting a new clause into the Bill. It amends the Reserve Forces Act 1996 to place reserve associations, also known as Reserve Forces and cadets associations, under a statutory duty to report annually to the Secretary of State for Defence on the state of the volunteer Reserve Forces. The new clause requires the Secretary of State to lay a copy of any such report before Parliament.
Reserve associations are community-facing organisations which provide an essential bridge between our Armed Forces and the civilian population. An association exists for each of 13 administrative areas of the United Kingdom. They provide advice and support on behalf of our volunteer Reserve Forces and cadets, work with the chains of command of the Royal Navy, the Army and the Royal Air Force and establish and maintain links with the community.
The new clause recognises the importance of the receipt of independent reports from reserve associations to ensure programme success in growing and revitalising the Reserve Forces. The reporting requirement that the new clause introduces is working with the grain of what the Government are already doing. It is based on the existing non-statutory arrangement under which a scrutiny group, appointed by the Council of Reserve Forces’ and Cadets’ Associations, reports annually on the Future Reserves 2020 programme and overall health of the Reserve Forces.
Under our plans for the whole force concept, the reserves will become an integral part of our future force structure, charged with delivering vital capability for the Armed Forces and providing resilience and reinforcement. However, we must not forget the unique and distinct nature of our reserves. They are civilians who have also elected to serve their country in uniform. That tens of thousands have volunteered to serve their country as a reservist, with some 25,000 serving in Iraq and Afghanistan in recent years, is humbling, but also a true reminder of the volunteer and community ethos across this nation, something of which we can be very proud.
In revitalising the Reserve Forces, we have been careful to recognise, and put in place measures to address, the extra challenges that reservists face in balancing their military service with their civilian employment and, in many cases, family responsibilities. That is why, when the Government undertook to revitalise the Reserve Forces through the Future Reserves 2020 programme, we focused on measures to make reserve service more attractive to reservists and their employers and put in place support measures for the reservist and their families.
The performance of defence as a whole is already subject to considerable external scrutiny, be that by the National Audit Office or the House of Commons Defence Committee—and, of course, by the many MPs and noble Lords with considerable defence interests and experience. All have shown themselves to be very proficient at examining the performance of defence in its entirety and on specific issues, programmes or projects.
I should also point out that the Ministry of Defence already provides a considerable amount of information of its own volition. The quarterly personnel report published in November 2013 gave the numbers of trained and untrained reservists and movements into and out of the reserve population. The next publication is scheduled for 13 February. On 19 December last year, the Secretary of State also published the indicative target figures for the future growth of the reserves in order to reach the identified trained strength target.
However, as I have made clear, the reserves are unique and, because of that, and the importance of the Future Reserves 2020 programme success, it is right that we should put in place a system for independent scrutiny of the state of the reserves as a specific entity. The new section which this new clause seeks to insert into the Reserve Forces Act 1996 requires an annual report to set out an assessment of the capabilities of the volunteer Reserve Forces, having regard to the duties that may be imposed on members of those forces, which include mobilised service under a call-out order.
Reports must, in particular, cover the effect of the following four matters on the capabilities of the volunteer Reserve Forces: first, the recruiting of members for the volunteer Reserve Forces; secondly, the retention of members of those forces; thirdly, the provision of training for those forces; and, fourthly, the upkeep of land and buildings for whose management and maintenance the reserve associations are responsible. Reports must also contain an assessment of the provision that is made as regards the mental welfare of members and former members of the volunteer Reserve Forces. This follows a further commitment made by the Secretary of State in the House of Commons.
This brings me neatly to Amendment 18C. The Government are absolutely committed to improving the mental health of serving and former members of both the Regular Forces and Reserve Forces. Noble Lords will be aware that my colleague, Dr Andrew Murrison, carried out a review of mental health provision within the Armed Forces. We have worked closely with the UK Department of Health, the NHS and third sector organisations to implement the recommendations from his Fighting Fit report. This has been backed by £7.4 million of government money.
Defence is already very open about the mental health of the Armed Forces population and the provisions we make to address issues. A great deal of this information is already published in the public domain. This includes the covenant annual report, which contains a specific healthcare chapter, and official defence statistics, such as those pertaining to the Veterans and Reserves Mental Health Programme. Defence is of course also engaged with and supports ongoing independent research programmes in the health arena, which are publicly available. For example, the King’s Centre for Military Health Research has been commissioned to undertake a further phase of its longitudinal cohort study, which includes reservists.
The Secretary of State made a commitment to bring forward an amendment in this House to require reserve associations to report annually on the state of the Reserve Forces. Recognising the importance of the issue of mental health, he undertook to include mental welfare provision in the list of matters that those annual reports must cover. Amendment 18 makes provision for this. Accordingly, I do not believe that subsection (1) of the new clause proposed in Amendment 18C is necessary.
In terms of annual spend on mental health provision for serving and former members of the Reserve Forces, it would not be practicable to produce meaningful financial data. In part, this is because it would be difficult to separate this cost from the cost of provision for regulars. Also, much of the provision for serving and former reservists is provided by the NHS at the local level, and extracting these financial data would be a real problem.
With regard to medical records, once demobilised, it is a long-established tradition that Reserve Forces’ medical care becomes the responsibility of their local NHS services, and the majority of their physical and mental health needs are met by this provision.
On the specifics of the current process for those leaving the Armed Forces or the Reserve Forces, when registering with their GP the veteran’s NHS record will be sent to the GP with a letter included in it that will inform the GP that they have been under the care of the Defence Medical Services and detailing how the GP can get the full record. Work is being carried out to further develop our systems in the future to allow for a summary of in-service care to be included with the NHS record when it is sent to the civilian GP. These proposed modifications will in future ensure that the NHS GP knows that they are dealing with a veteran and that the veteran is automatically given a copy of the full Defence Medical Services medical history if they decide that they require it.
As well as engaging with reservists, we have worked with the Department of Health to provide an electronic training package for GPs. This will help GPs to be more familiar with both the Reserve Forces’ and veterans’ community, and allow them to better recognise and monitor the needs of their patients.
In addition, current and former members of the Reserve Forces are entitled to attend the Veterans and Reserves Mental Health Programme. That programme is open to any current or former member of the UK volunteer reserve and regular reserve who has been demobilised since 1 January 2003 following an overseas operational deployment as a reservist and who believes that the deployment may have adversely affected their mental health. Under the programme, we liaise with the individual’s GP and offer a mental health assessment. If diagnosed to have a combat-related mental health condition, we then offer out-patient treatment via one of the MoD’s departments of community mental health. If more acute cases present themselves, the Defence Medical Services will assist access to NHS in-patient treatment.
Therefore, I believe that we are taking mental health seriously. We are working with reservists, former reservists, the medical community and other interested parties to ensure that everything that should be done is being done. However, I of course will welcome the view of the Reserve Forces and cadets associations as they report in due course on this issue.
I turn to Amendment 18F, the last amendment in this group, which seeks a report on the cost-effectiveness and viability of the Future Reserves 2020 programme. I would like to remind the Committee why we are making these changes. There are two strands to why we are doing this.
Lord Astor of Hever
I shall read that again. I refer to the period immediately after we come out of Afghanistan and finish combat operation there at the end of this year. So this is all absolutely in accordance with a strategic design that flows through the National Security Strategy.
We would all agree, I am sure, that this programme should be subject to proper and effective scrutiny. We have put forward a government amendment to do precisely that, with a report put to Parliament where it will be for the business managers to decide in the normal way what to do with that report. Leaving that report aside, the performance of defence as a whole is already subject to considerable external scrutiny, be that the National Audit Office, the House of Commons Defence Committee, or in defence Questions from MPs or Peers. Furthermore, as the Secretary of State said during an evidence session with the Defence Committee on 5 November, the strategic defence and security review 2015,
“will certainly want to look at the Future Force 2020 construct and decide whether it needs to evolve further to 2025 in response to a changing environment”.
The next strategic defence and security review will take place at a time when the programme has had some time to develop and demonstrate maturity.
Lord Robertson of Port Ellen
The Minister mentions the SDSR of 2015. That is presumably ongoing at the moment as 2015 is, after all, next year. What consultations has the department had with the various stakeholders in defence, such as Her Majesty’s Opposition, the trade unions, the press, the diplomatic corps, the think tanks and the academics who will be involved? Is there any outside involvement whatever in achieving a degree of consensus on what will be published around the time of the next general election?
Lord Astor of Hever
My Lords, I will try to answer the noble Lord’s question when I respond to other noble Lords’ questions. I repeat that the next SDSR, which will take place at a time when the programme has had some time to develop and demonstrate maturity, would be the right time to scrutinise the force structure and whether it needs to adapt to reflect new threats, opportunities or other such variables. I beg to move.
Lord Rosser
One of the joys of having amendments in a group where the Government have the first amendment is that you get the Government’s response before being able to explain the reasons for your own amendments. However, I would not wish the Minister to take that in any way as a criticism because we are always extremely grateful for the thoroughness with which he replies to amendments and for the extent of the information he provides to us. I will be as interested as my noble friend Lord Robertson of Port Ellen in the answer to the question he raised about the amount of discussion that is or is not currently going on in relation to the SDSR due in 2015.
Government Amendment 18 and my Amendments 18C and 18F have one thing in common; namely, they all provide for reports of one form or another. The Minister has explained the thinking behind the Government’s amendment, which, as he said, has arisen from a commitment given when the Bill was being considered in the other place. We have no issues with the Government’s Amendment 18. Our Amendment 18C calls on the Secretary of State to publish annually an analysis of the mental health provision for members and former members of the Reserve Forces and to report on the annual spend on such services. On that latter point, I note that the Minister said, in effect—I appreciate these were not his exact words—that this information could not be provided.
The amendment also makes provision for the transfer of medical records belonging to former members of the Reserve Forces to the National Health Service and for the monitoring of the health needs of former members of the Reserve Forces. Without such an arrangement working effectively, there is a distinct possibility of reservists going to their GP and their full medical history not being available. I appreciate what the Minister has already said in that context, but the reason for putting down the amendment with this requirement is because of claims that this is not what happens on occasions.
Mental health provision is, if anything, even more of an issue for reservists than for members of our Regular Forces as reservists after deployment go back into the civilian world rather than back to their units and can undoubtedly feel isolated on occasion. Hence the importance of the Ministry of Defence and the National Health Service knowing where reservists can be contacted and ensuring that they get the support they need.
A study published in 2012 showed a significantly higher rate of common mental health disorders and post-traumatic stress disorder among reservists, with the incidence of other types of mental illness being greater than that of PTSD, as it also is for regulars. The study also drew attention to the fact that reservists have much more difficulty with post-deployment social functioning and that such difficulties appear important not only to mental health but to fitting back into the family.
In future, we will be expecting a greater and different kind of commitment from our reserves and we need to ensure more than ever that the advances we have made with the Regular Forces with regard to mental illness, to which the Minister has already referred, are also achieved for our Reserve Forces. Government Amendment 18 provides for the annual report from reserve associations to include that association’s assessment of the provision that is made regarding the mental welfare of members and former members of the volunteer Reserve Forces but, apart from the issue of the extent to which reserve associations would be qualified to make such a full assessment, the Government’s amendment does not lay any requirement on the Secretary of State to make such an assessment or to address the issue of the transfer of medical records.
We believe it is important that there is such a requirement on the Secretary of State as well, particularly in relation to making the assessment. Making the provision set out in Amendment 18C and putting it in the Bill would help to ensure that mental health provision for members and former members of the Reserve Forces was regarded with the importance that it deserves.
Lord Astor of Hever
My Lords, first, the noble Lord, Lord Robertson, asked in some detail about the next SDSR. I assure him that there is a lot of activity in the Ministry of Defence on this subject. I will write to him about this in some detail. The noble Lord has a great deal of experience and wisdom on this subject, and my door in the Ministry of Defence is always open to him. He has met the Secretary of State in the past and I am happy to facilitate further meetings for the noble Lord to pass on his wisdom at any time.
Secondly, the noble Lord asked me if this is a Treasury-led exercise. We do consult other departments and external shareholders, but we must be aware of the resources available. We have seen the result of not doing so in the past. In support of the Cabinet-led process, the MoD is undertaking a well defined programme of research and activity to understand the future strategic content, examine policy options and test the continued validity of Future Force 2020.
The noble Lord, Lord Davies, asked about our allies. I, as well as other Minsters and senior officials in the MoD, constantly meet our allies. I have absolutely no doubt that they are feeding their requirements and wishes into the SDSR, as they did with the last one and, I am sure, with the one that the noble Lord mentioned earlier.
The noble Lord, Lord Dannatt, was concerned about the reserves. It is not true that we are planning to use more reserves than in the past. As I said, we are trying to build up our niche skill supply of cyber and medics. The reserves will not be less capable; they will be better equipped, trained and paid, with pensions, and be given the same equipment as the regulars. I am trying to organise a day out for noble Lords who are interested in this subject to a reserve unit close to London that is paired with a regular unit. Noble Lords and noble and gallant Lords will be able to talk with the reserves and the regulars over any concerns. However, all the reserve officers and soldiers to whom I have spoken recently are very happy with the equipment that they are getting.
The noble Lord, Lord Rosser, was concerned about veterans once they leave the services. Work is being carried out further to develop our systems to allow for a summary of in-service care to be included with the NHS record when it is sent to a civilian GP. These proposed modifications will ensure that an NHS GP will know that they are dealing with a veteran and automatically give them a copy of the full Defence Medical Services medical history if they decide that they need it.
The noble Lord asked about cost and viability. This is a tier 1 programme that will be subject to the usual scrutiny by Her Majesty’s Treasury on cost. Parliament has the ability to scrutinise the issues and has done so, but this has been a military-led programme that is six months old. We should seek to implement the plan and support the reserves, not seek to unpick this.
The noble Lord, Lord Dannatt, asked whether payment for a large number of reserves was transparent. We have been clear that we are reducing the regulars and investing in the reserves. It is true that large-scale use of the reserves could fall to the Treasury reserve; the noble Lord is correct on that. He asked whether there was a draw-down gap. It is a risk, but a manageable one. We cannot retain the Regular Forces on the scale of today on the existing budget. We have to make the best use of our resources, and the reserves allow us to do that.
Is it morally right to place reserves in greater front- line roles? The reserves have served with distinction— 25,000 have been on recent operations. They themselves certainly want a greater role. We recognise a slight increase in PTSD in the reserves, which is why we have put in place the measures that I outlined earlier.
The noble Lord, Lord Robertson, asked about the veterans’ review by my noble friend Lord Ashcroft, which I understand was announced this morning. Just as I was leaving my office in the Ministry of Defence, I received a copy and have not had a chance to look at it but will write in detail to the noble Lord about it.
Finally, he asked about the role of the reserves and our reliance on them. Reserves will have a range of roles in supporting the regulars in high-intensity conflict, leading low-intensity operations—for instance, Cyprus peacekeeping—and providing capability that we cannot retain in the regulars, including cyber and medical. This is not a like-for-like replacement of regulars with reserves. Also, as the noble Lord will know from his NATO days, the United States relies far more heavily on reserves than we do, yet the US is the most capable of NATO members.
In conclusion, I must resist Amendments 18C and 18F on the basis that what they are intended to achieve is covered by Amendment 18.
Lord Astor of Hever
My Lords, I apologise to the noble Lord for the length of my speech on the last clause. It contains important issues and I wanted to cover them in some detail.
Lord Davies of Stamford
My Lords, I must have given the wrong impression. In no sense was I complaining about the length of the Minister’s speech. I thought I had congratulated him on a comprehensive speech, which had started an interesting debate.
Lord Astor of Hever
I apologise. Perhaps I misunderstood when the noble Lord referred to Second Reading speeches. Anyway, I hope that I answered all the important points.
The noble Lord referred to the lack of clarity in deploying the reserves, especially the infantry. The pairing of regulars and reserves on high-intensity combat will include individuals and up to sub-unit level. We are changing the mobilisation limits to 12 months to enable greater pre-deployment training. I mentioned earlier—I am sure the noble Lord will welcome this—that we must get more of the niche skills in the cyber field and in the medics, who we do not need the whole time.
On talking to the reserves—I am sure the noble Lord has also done so—I found that a number of them want to deploy. When the noble Lord was a Defence Minister, I went to Afghanistan on a couple of occasions and I met a number of reserves, who were very well trained. All the regulars to whom I spoke were very impressed by the reserves and how well they trained and fitted into the Regular Army. I do not think that there is any pressure on them being embedded with the regulars, and it is our plan that they train together and use the same equipment. I should like to organise for noble and gallant Lords a visit to a reserve unit paired with a regular unit to talk to the soldiers.
Lord Davies of Stamford
I thank the noble Lord and totally agree about this. The reserves have done a wonderful job. I pay tribute to them. We have all paid tribute to them. I used to go to Afghanistan and Iraq every six months when I was in the MoD, and I saw them on the front line in exactly the way the Minister describes. As he knows, reservists take it as a matter of enormous professional pride—it is a thing they really want—when their regular colleagues forget that they are reservists. That does happen. You hear that from both sides. That is a tremendously high standard to achieve. People go into the Reserve Forces because they are prepared to put themselves through the hell of training up to that level and to risk their lives when they are deployed. That is the military experience they want. If they are going to have that on offer in future, they must be honestly told that. If they are just going to be deployed behind the wire or on UN peace-keeping operations, they need to be told that too.
Lord Astor of Hever
The noble Lord makes a very good point. I will take away the points he made earlier about Clause 47 and write to him on them. The noble Lord, Lord Robertson, mentioned the Ashcroft report. If there is an appetite for it, I am very happy to organise a Peers’ brief on it. Perhaps noble Lords will get back to me on that.
Lord Rosser
I almost feel as if I am once again moving an amendment after the debate on it has already taken place. Amendment 18A provides for the Secretary of State to publish quarterly recruitment figures and trained strength numbers for Reserve Forces against adjusted quarterly targets. I certainly do not wish to speak at any great length on this amendment but, as has already been said, there has been a significant change in approach by the Government to the role of the reserves since the increase in reserve strength was first announced alongside further reductions in the size of our Regular Forces. At that time, the previous Secretary of State made it clear that the reduction in the size of the Regular Forces would take place only as and when the reserves had been increased.
That is not now the Government’s stance, which has changed to saying that the reduction in the size of the Regular Forces and the Army, in particular, is not dependent on first delivering the increase in the size of our Reserve Forces. However, the increase in the size of our Reserve Forces must be for a purpose and, presumably, if we do not achieve the target that has been set within the period set, the capability of our Armed Forces as a whole will be less than it would otherwise have been. If that is not the case, it begs the question of why we are increasing the strength of our reserves.
If we can accept that our Reserve Forces will have an even more important role to play in the future, the question of whether recruitment targets will be achieved is a matter of some importance. Last autumn, there were reports in the press of the Army failing to attract and recruit sufficient Army Reserve personnel, and as a result it was claimed that the Army faced an increased risk to its structure and operational capability. If we are falling behind in recruitment, it may take time to recover lost ground since it is not simply a case of recruiting people. The people recruited have to be trained before they can become fully effective members of the reserves, and that takes time.
We are talking about ensuring the overall effectiveness of our Armed Forces and thus about our nation’s security. Our reserves are not simply something that is nice to have if people can be recruited; they will have an important and enhanced role to play in the future as part of our overall Armed Forces strength. In view of that, it does not seem unreasonable to provide in this Bill for not only the current Secretary of State but future Secretaries of State to publish the figure that will enable us all to know whether the targets for increasing the size of the our reserves are being achieved and thus that the future intended capability of our Armed Forces is being delivered in full. The fact that this information will have to be published may also help concentrate the minds of all those directly concerned in ensuring that targets set prove to be targets achieved. I beg to move.
Lord Astor of Hever
My Lords, reserves have always made an essential contribution to national security and that contribution is set to increase, with exciting opportunities being offered not just for individuals but for formed units. Reserves will be an integrated part of the whole force required for almost all operations, both at home and abroad. To do this, we are growing our reserves to 34,900 across all three services by 2018 and investing an additional £1.8 billion over 10 years. The Army will grow its reserves to a trained strength of 30,000, the Royal Air Force to 1,800 and the Royal Navy to 3,100. This is a challenging target but one that we are committed to achieving.
These requirements are challenging, but the planned overall numbers of trained reservists are well within historic levels. In 1997, the Territorial Army was more than 50,000 strong; it was reduced to around 40,000 by 2000 and, by 2009, it was down to just 26,000. We now have about 19,090 trained reserves. We should not be surprised if growth is neither uniform nor smooth. Given the time that it takes to train reservists, trained strength improvement will lag behind recruitment. Reservists will be an integral and integrated part of the whole force alongside their regular counterparts. The Committee will no doubt be aware that, recognising the interest in the progress of reserves recruitment, the MoD publishes the trained and untrained strength data for the reserves quarterly. The last figures were released on 14 November and the next set of data is due to be released in the next few days. I am sure that noble Lords would agree that, with such a commitment, there is no need to enact legislation.
The Army is undertaking a significant number of surge activities alongside recruit partnering projects to boost reserve recruiting and grow the reserve force. The initial response to the new recruiting campaign is encouraging and a number of new initiatives have been introduced. These include the revised medical process, introduced in January, and the new online application forms introduced this month. Both these new major initiatives will simplify the process and are aimed at improving the candidates’ journey into and through the application process. I must point out that the programme is still in its early stages. The White Paper was published only in July, and it is true there have been some administrative issues in the process. However, we are working with Capita and the senior Army leadership actively to address these issues. I believe that we can work them through. Adjustments have been made to the application process to ensure that we can continue to progress new recruits. Marketing campaigns based on the new White Paper proposition have just got under way; the latest marketing campaign for the reserves started in early January.
Maritime Reserves has stabilised its numbers and is working to ensure the retention of trained personnel already in the reserve and reduce wastage during the training programme by tailoring the training methods to better suit the reservist experience. Although there is a slight reduction in the Royal Auxiliary Air Force’s trained strength, the number in training is the highest since April 2012. The force looks likely to meet its end-of-year target and is seeking authority to allocate extra resources to marketing in order to improve further its recruitment rate. Recruiting activity itself is better co-ordinated across the three services than in the past; this should ensure a much more joined-up approach to recruiting. The new recruiting campaigns are delivered at a regional level, following planning and guidance from a national level. We are working hard to deliver the message through internal communications within other government departments that the reserves are recruiting and to demonstrate that the Civil Service is taking the lead in the public sector.
The additional costs of recruitment associated with growth of the reserves are all factored into the Future Reserves 2020 programme. Should recruitment be slower than planned, some funding earmarked for paying personnel who were not in fact recruited could be switched to increase the recruiting effort.
Lord Davies of Stamford
My noble friend’s amendment is testimony to what I spoke about earlier—the complete commitment on this side of the Committee to try to ensure that we successfully recruit and train the projected number of reservists. It would be intolerable if people who had signed up to fight for their country were subject in some way to discrimination in the employment and labour markets. Discrimination because of their sex, colour and so on is now regarded as utterly intolerable. My noble friend’s amendment is therefore absolutely appropriate.
I should make one final point. I think that I am right—the Minister will know the details—in saying that similar protections are available to members of the National Guard in the United States. We all know that the National Guard is extremely successful at recruiting and that it has enormous public support, including among employers, so I do not see any difficulty of the kind suggested by the noble Baroness whereby employers might reasonably resent such a provision. We all know that the National Guard in the United States plays a key role in the defence capability of that nation and is regularly deployed on operations. We should be encouraged by the experience of the United States to pursue the line adopted in my noble friend’s amendment.
Lord Astor of Hever
My Lords, we recognise and value the contribution of reservists and need to be sure that their interests are properly protected. Part of this is making sure that their reserve service does not negatively affect their employment prospects. That is why Clause 47 amends the Employment Rights Act 1996 to remove the current two-year qualifying period for claims of unfair dismissal where the reason for dismissal is, or is primarily because, the individual is a reservist.
I should emphasise that protection is already in place to ensure that reservists are not dismissed as a result of any duties or liabilities that they have to undertake, for example as a result of being mobilised. This protection is provided by the Reserve Forces (Safeguard of Employment) Act 1985, Section 1 of which gives a reservist who is called out for reserve service the right to apply to his or her former employer to be reinstated after they return from mobilised service. In addition, Section 17 of the 1985 Act makes it a criminal offence for an employer to dismiss an employee solely or mainly by reason of any duties or liabilities that may arise as a result of being called out.
One key strand of the White Paper was to foster an open and honest relationship with employers. Employers of reservists make a greater contribution to national security than others. We understand and value the commitment that employers make. We have seen from some of the evidence submitted—I am thinking particularly of that from the Confederation of British Industry—that employers are wary of the introduction of discrimination-type legislation, and that such an approach would run counter to the partnership approach that is needed between employers and defence. CBI members were particularly concerned that such an approach could strain working relationships between employers and reservists.
As part of this partnership approach we will: provide employers with greater awareness and predictability of training and mobilisation commitments; streamline the administrative arrangements to receive financial assistance when a reservist is mobilised; introduce additional financial incentive payments to micro, small and medium-sized enterprises; and provide appropriate recognition of the contribution that these employers make by enhancing our existing recognition schemes.
Subsection (1) of the proposed new clause in Amendment 18B would mean that Section 39(4) of the Equality Act 2010 would apply “as if membership” of the Reserve Forces “were a protected characteristic”. Surely, membership either is or is not a protected characteristic. The advice from the Government Equalities Office is that being a reservist would not count as a protected characteristic as defined in the 2010 Act—in other words, age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, and sex or sexual orientation.
There have been occasional calls for various characteristics to be given protected status, particularly during the preparations for the Equality Act. These were mostly in relation to some form of physical appearance, ranging from extremes in individuals’ height and weight to the way in which people may choose to dress. However, after full consideration, the list of protected characteristics was set as already outlined. Including reserves as a protected characteristic in the Equality Act would be a disproportionate tool to tackle the problem and could give rise to the same argument being deployed successfully in relation to a number of the physical characteristics that I mentioned. This could have the result of doubling the number of characteristics, which would have an increased on-cost to businesses, public authorities and the courts.
Lord Davies of Stamford
Would the noble Lord be kind enough to address my point about the National Guard in relation to Amendment 18B? We should bear in mind that any employers’ organisation—like any other trade association or representative body—is always likely, when a new idea is put to it, to adopt a defensive, cautious position and focus on the difficulties. Good government surely does not consist of abandoning a good idea at the first hurdle. Has the MoD explored the experience of the National Guard in this context in the United States and, if so, could the Minister let us know the conclusions of that study?
Lord Astor of Hever
The noble Lord makes a very good point about the National Guard, and I apologise if I did not refer to it in my response. This is quite a detailed subject. I will write to the noble Lord and copy my letter to the other noble Lords who have taken part in this debate.
Lord Rosser
I thank the Minister for his comprehensive reply and I thank the noble Baroness, Lady Garden, for her comments. I also thank the Minister for setting out the statutory safeguards, as well as the non-statutory measures that have been, and are being, taken to address the issues that I have raised. If the Government find that working with employers and not going down the statutory route does not work, I hope that they will reflect again on providing legislation to protect the position of employees who are members of the reserves, who could find themselves in a vulnerable position.
Having said that, I appreciate that this is a difficult area. It can be very difficult to prove discrimination against somebody on the basis of membership of the Reserve Forces, particularly if one had to seek to prove that there had been discrimination through, for example, denying someone a promotion or giving them a lower salary increase or some other act of that kind. I also accept that proving discrimination on these grounds could be difficult.
I conclude by thanking the Minister for his comprehensive reply, and I beg leave to withdraw the amendment.
Lord Davies of Stamford
My Lords, I do not know that I should get into the habit of answering questions across the Floor. I would love to be a Minister again but that has not happened to me so far. I shall have to wait a bit longer. However, I shall of course respond to the noble Lord. There are the normal legal protections against assault from which he and I and every other citizen benefit. Clearly, it is a criminal offence. However, the purpose of this amendment, as I understand my noble friend, is to make it an exacerbating factor if the reason for the assault is that the victim is a member of the Armed Forces. That provides a special protection for those who might otherwise be especially vulnerable to this kind of attack. It is similar to the exacerbating factor that we already have of the motive, or part of the motive, for an assault being racial. We introduced that for a section of the community whose members might be innocent victims of gratuitous attacks which otherwise would not occur. Therefore, there is a complete analogy there and I think it was the analogy which, rightly, inspired my noble friend—if I may be so bold as to presume to answer for him—to conceive this amendment.
Lord Astor of Hever
My Lords, I am sure that I speak for all of us in saying that we hold the same view about discrimination against members of the Armed Forces. It is a completely unacceptable form of behaviour towards the men and women who have committed themselves to defending this country, its people and its way of life, and to making sacrifices that others perhaps sometimes take for granted. Those who discriminate against service personnel, or against the wider Armed Forces community, succeed only in diminishing themselves.
Discrimination can take many forms. Some of it is thoughtless or uninformed—for example, when public services fail to take account of the special circumstances in which Armed Forces personnel find themselves. Some of it is based on myth and prejudice—a view that soldiers create trouble or are unreliable customers is a misperception that we must challenge. However, some discrimination or abuse stems from genuine hostility to members of the Armed Forces, motivated by politics or perhaps by some unfortunate personal experience. It is on that narrow part of the spectrum that this amendment focuses.
The amendment would have the effect of amending Section 146 of the Criminal Justice Act 2003, which lays down circumstances in which the seriousness of a criminal offence, and thus the severity of the resulting sentence, is increased. It provides for increased sentences where an offender demonstrated hostility based on the victim’s sexual orientation, disability or transgender status, or where the offence was motivated by hostility towards persons of a particular sexual orientation, persons who have a disability or persons who are transgender. Section 145 of that Act makes similar provision in respect of “racially or religiously aggravated” offences.
The amendment would provide for increased sentences where an offender demonstrated hostility based on the victim being a,
“member of the reserve forces”,
or indeed,
“any relative of a member of the reserve forces”.
It would also provide for increased sentences where an offence was motivated by hostility towards members of the Reserve Forces.
It is important that we are clear about what the amendment would not do. It would not cover situations such as a refusal to admit members of the Armed Forces to a hotel or bar. Such situations have led to widespread public indignation but they generally do not involve a criminal offence.
The Government’s view is that there is no need for a change in the law on these lines. The courts already have a wide power in sentencing to take into account factors that make conduct more serious. Criminal acts based on irrational hostility to a person because he or she is in the Reserve Forces may lead to a higher sentence in any event. I am not aware of any evidence of courts finding that they have insufficient powers to give an appropriate sentence to an offender in such circumstances, or that we have received representations from the courts asking us to amend the law in this way.
In contrast, converting the flexibility that the courts currently have into a mandatory requirement, as the amendment proposes, may present practical difficulties. For example, demonstrating to a court that the aggravating factor was present and should be taken into consideration could be relatively straightforward in some cases, such as where a victim was in uniform, but far from straightforward in other cases, such as those in which the victim was a relative of a member of the Reserve Forces. How are the courts to deal with a situation where an offence is motivated by excessive rivalry between different sections of the Armed Forces or, perhaps, a domestic dispute? A mandatory requirement for a higher sentence reduces the court’s ability to take a sensible, common-sense approach to what is really going on in the circumstances it is examining.
There is a fundamental difference between offences provoked by hostility to the work of the victim and offences motivated by prejudice against inherent characteristics, such as homophobic crime. Section 146 of the 2003 Act is designed to help to change deep-rooted prejudices. It would be quite wrong to suggest that such provisions were necessary in relation to the Armed Forces. However, the most telling argument against this amendment is the views of the intended beneficiaries. I am not aware of any general desire in the Armed Forces community for legislation of this type. The service men and women who wear their uniforms with pride want to be respected in and considered part of their communities, and rightly so. We should not put them in a position where they are forced to explain why they require protection in law in a way not enjoyed by, for example, firemen or ambulance staff. Indeed, the amendment deals only with members of the Reserve Forces, as the noble Lord pointed out. It would not extend to members of the Regular Forces, meaning that rather than helping create the whole force which we seek the amendment would separate out members of the Reserve Forces for different treatment in law. I am not sure whether they would wish to see that in this context.
None of this means that the Government are complacent about discrimination against service personnel: quite the opposite. The Armed Forces covenant has a high profile across the whole of Whitehall and beyond. The first principle, that members of the Armed Forces community should not suffer disadvantage as a result of that membership, has given rise to many initiatives which are making a real, practical difference. In the first statutory annual report on the Armed Forces covenant, published in December 2012, we described what we were doing to make these principles a reality. We are working to remove the disadvantage that the children of service personnel can face in the schools system as a result of their mobility through the admissions code and the service pupil premium. We are ensuring that service personnel and leavers encounter a level playing field in access to social housing or Government-funded home ownership schemes.
At the same time, we are working to build the links between the Armed Forces community and the wider community to improve the knowledge and understanding that must be at the centre of that relationship. From knowledge flows the esteem for our service men and women that is ultimately the most powerful way to counter discrimination. The community covenant has now been signed in nearly 400 local authority areas, from Cornwall to the north of Scotland, and around 60 companies have signed up to the new corporate covenant, signifying a real determination to strengthen ties with the Armed Forces. I am confident that it will continue to gain further support. The grant scheme linked to the community covenant has allowed us to back a range of schemes that will help to put these declarations into practice. To that, we can now add the £35 million fund created as a result of the LIBOR fines, which will support charities with projects to help the Armed Forces and their families.
This is not an entirely new proposal. Thomas Docherty MP previously raised this issue in a Private Member’s Bill and has another for consideration this year, with its Second Reading having been scheduled for 24 January. The debate was adjourned and is expected to resume on 28 February. The previous Government, in response to a similar recommendation in the 2008 report from the then Member for Grantham and Stamford, now the noble Lord, Lord Davies of Stamford, said,
“we do not think that a change in the law is necessary or appropriate.”
As a result of the Armed Forces Act 2011, we have a new vehicle at our disposal in the form of an annual report to Parliament—effectively a report on the state of the Armed Forces covenant. In February of last year, my right honourable friend, the member for Rayleigh and Wickford, the Minister of State for the Armed Forces, indicated that the question of discrimination would be a legitimate issue for the next report at the end of 2013. The report, published on 16 December 2013, said:
“Our view is that, in the last year or so, the extent of public knowledge and sympathy for the Armed Forces has continued to grow—aided by the Community Covenant and the new Corporate Covenant. We therefore continue to believe that education, rather than legislation, is the key to eradicating the kind of behaviour that we all abhor”.
In answer to the question from my noble friend Lord Palmer about what instances there have been of service personnel not taken to include those in the amendment, we recognise a service person as a regular or reserve member of the Armed Forces. Proposed subsection (7) in the amendment seems to be drafted to enable debate in this Committee otherwise it would be out of scope, as it was judged to be in the House of Commons. The noble Lord, Lord Davies, asked about legal protection. Legal protection for all Armed Forces personnel would be out of scope of this Bill.
I hope that I have answered all the noble Lord’s concerns and I urge him to withdraw his amendment.
Lord Rosser
I thank my noble friend Lord Davies for his contribution and support and also the noble Lord, Lord Palmer of Childs Hill for his contribution. The Minister has once again done us the courtesy of giving us a very full and comprehensive response to the amendment, setting out the Government’s position. I am slightly disappointed with the reply, although I do not want to suggest that I had imagined the Minister would say that the Government would accept the amendment.
The Minister made reference to ambulance staff not having this kind of protection. That may be true in England and Wales, but I do not think that it is true in Scotland, where I believe it is offered to members of the emergency services. If I am proved wrong in saying that, I shall of course apologise. However, I think there is a wider scope in Scotland which goes beyond the police. In England and Wales, that kind of protection is there in respect of the police but does not extend beyond that.
I would like to reflect on what the Minister has said before deciding whether to pursue this at a further stage and in discussions on the Bill. In the meantime, I thank him again for his comprehensive reply, which I appreciate, and I beg leave to withdraw the amendment.
Defence Reform Bill
Lord Astor of Hever Excerpts(10 years, 9 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Rosser (Lab)
My Lords, I will be very brief indeed. Obviously, views have been expressed about keeping the law and its enforcement up to date with developments in the nature and conduct of warfare. Also, at the back of what has been said there is a desire to know what is going on in our name and what the outcomes have been in relation to the use of some of the unmanned systems to which reference has been made. Certainly I await with interest the Minister’s response.
There seems to have been a general acceptance that this is an issue which should be debated and discussed, although obviously doubts have been raised as to whether, as far as the amendment is concerned, how relevant it is to this Bill. The only comment I would make before concluding and leaving it to the Minister to give the Government’s response is that, of course, as far as concerns the provision of any additional information that there may be, or any developments in the law, whatever is done must be consistent with the national interest and national security.
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever) (Con)
My Lords, I am grateful to my noble friends Lord Hodgson and Lady Miller, the noble Baroness, Lady Stern, and the noble Lord, Lord Dubs, for tabling the two amendments in this group. It has enabled us to have a useful and interesting debate about a number of important issues. The Defence Reform Bill deals with the future arrangements for defence procurement and the Reserve Forces, and I think it is fair to say that the debate on these amendments has drifted some way from those issues—a point made by my noble friend. In responding to them, I will try to address the specific effect of the amendments on Part 1 of the Bill, but I shall also set out more widely our position on some of the other issues that have been raised.
Before turning to the detail of the amendments, it might be helpful if I set out the UK Government’s policy on unmanned aircraft systems. I think it is important to use the correct terminology when discussing unmanned aircraft systems, or UASs. The term “drone” is often used, but the word evokes thoughts and images of computer-controlled machines free from human oversight, which is simply not the case. The term “unmanned air vehicle” had previously been used extensively in the UK, but it is no longer aligned with NATO or international thinking, and in the interests of interoperability we have now moved away from using it. Often, the actual level of human involvement is unclear when discussing unmanned aircraft systems and hence it is entirely appropriate that the term “remotely piloted aircraft system”, or RPAS, is also used as it emphasises the reality that a trained professional pilot is in control of the system. UAS and RPAS are the generic terms that define the totality of the components of an unmanned or remotely piloted aircraft together with the other necessary components, including all equipment networks and, most important, personnel.
The UK operates a range of these human-controlled systems principally for surveillance and reconnaissance purposes. There is often a misconception that remotely piloted aircraft systems are autonomous. Again, we have to be careful with the terminology as the word “autonomous” can mean different things to different people and organisations. The Government consider an autonomous system as being capable of understanding high-level intent, a system that is capable of deciding a course of action from a number of alternatives without depending on human oversight or control. Our current and future RPAS will not be autonomous. A military pilot will continue to remain in control of our armed systems, just as they are now. In fact, our current armed RPASs have greater human involvement than our other armed aircraft types. Our Reaper RPAS crews comprise highly-trained pilots, sensor operators and analysts who all make decisions in real time.
The UK currently deploys unmanned aircraft systems in support of operations in Afghanistan and of Royal Navy ships. These systems are predominantly used for intelligence, surveillance and reconnaissance tasks, providing vital intelligence in support of our troops on the ground and our sailors at sea. They provide persistent video imagery for the development of situational awareness in order to conduct planning and to protect our forces. While the sensors are broadly similar to those onboard conventionally manned aircraft, unmanned or remotely piloted aircraft systems have the ability to loiter for longer, building an intelligence picture that significantly enhances the situational awareness of our commanders.
Lord Judd
As usual, the Minister has been extremely helpful and courteous, but I hope that he will say a word more about a couple of points. First, he stressed the present policy of the UK Government on autonomous weapons. If that is the case, is there not a strong case for establishing this principle somewhere in legislation, if not in this Bill? When war takes place the situation evolves, the pressures are great, and one wants to be certain that established principles continue to be observed. Secondly, will he assure us that when he talks about US forces and what they do and do not do—those forces that operate from our territory—in future any foreign services using our territory must give a firm undertaking, with which we must be satisfied, that they will abide by the same principles that the Government have in place at the moment?
Lord Astor of Hever
My Lords, we will cover the noble Lord’s second point when we discuss later amendments and I think that I can give him an assurance on that when we discuss the later amendments. As regards his first point, this Bill is not an appropriate vehicle for the issue. He raises a very important point, but there is no need for additional laws. The existing ones are sufficient.
Lord Hodgson of Astley Abbotts
My Lords, I thank my noble friend for his characteristically thorough reply to the points made and I thank my co-signatories for their support. I emphasise to my noble friend that I do not think any of the signatories are against drones. We understand that they are valuable and we do not wish to expose the lives of soldiers, sailors and airmen to unnecessary risk. However, we want to know what is going on. Of course we understand that every effort is made to avoid casualties. This is not a trigger-happy amendment; it is about information, control and transparency. I was glad to hear that my noble friend’s legal advice is that the term “vehicles and aircraft” covers every aspect of drones and there is therefore no gap in this regard. It is important to have that on the record for the future.
I am grateful to my noble friend Lord Roper for drawing attention to some of the complexities of this issue and to the noble Lord, Lord Judd, for his important comments about dispassion. Some element of personal responsibility may become deadened by distance from the point at which the operation is taking place. The noble Lord, Lord Palmer of Childs Hill, very rightly said that this was not the appropriate place for the amendment. He is right, but when the bus comes along you get on board because who knows when the next bus will come along. As he rightly said, there are very few defence Bills and it is important for us to have a chance to debate things that have emerged since the previous occasion.
Lord Craig of Radley (CB)
The House has debated the issue of Crown and combat immunity a number of times in the past eight months. The Minister has shared with the House concerns that the MoD and the Government have about problems raised by legal challenges of decisions made in the heat of battle or of decisions made in the past about equipment, training or preparations for operations in which, regrettably, individuals have been killed or seriously injured. In the debate on 7 November last, the Minister said that,
“the Ministry of Defence has been grappling with rapidly increasing numbers of legal claims arising from operations, together with escalating costs, largely as a result of these legal developments and the increasing willingness of individuals to litigate”.—[Official Report, 7/11/13; col. 413.]
He rightly stressed that no intention to reinstate any form of Crown or combat immunity should affect any cases already started, and nothing that I say or propose is directed at affecting such claims.
My particular reason for raising the issue of contractor immunity is straightforward. The experience of the past few years, particularly but not solely in the shadow of the Iraq and Afghan operations, is that courts and coroners have taken to raising issues about the suitability or modification states of equipment. I said at Second Reading:
“My fear is that this legal probing, basking in the certainty of 20:20 hindsight, will extend to questioning why original designs or modifications which subsequently proved unable to match the opposition’s capability were allowed to persist or be deployed or, alternatively, why additional steps had not been approved though the technical capability existed. Such concerns should be borne in mind in any changes to responsibility for defence procurement. Indeed, they should add further stimulus to taking positive action to reinstate immunities in a field of activity where acceptance of risk to life has to be the norm if our forces are not to be gravely neutered by legal hindsight”.—[Official Report, 10/12/13; col. 757.]
My amendment is designed to probe the case of contractor immunity and how and to what extent it might be applied. It proposes one particular approach but I do not suggest that it is the only or necessarily the most appropriate one. The Committee will have noted that Clause 3 would appear to provide a company that is or has been a contractor with unlimited MoD cover for any financial claim that is brought in a court in the UK against the company. However, this immunity is circumscribed by requirements in subsections (6) and (8) of this clause. Bearing in mind the frequency of claims and findings involving defence contractors, it seems that this sweeping, broad-brush approach should be further considered in the light of current experience. Would it not give rise to a good deal of cross-claims—no doubt of value to the lawyers involved—between the MoD and the delinquent company, possibly at considerable additional expense to the taxpayer and the Defence vote?
My probing amendment considers an issue of immunity away from the immediate battlefield—the clear domain of combat immunity—in an area of defence activity, notably procurement, that has led or might lead to legal claims by those injured while on duty or by the families of deceased service personnel. The Minister will recall in the case of the loss of RAF Nimrod XV230 in Afghanistan in 2006 that the review found that a number of individuals, including those in service, civilians and contractors, had been so seriously at fault as to bear responsibility for the technical failure that caused the loss of the aircraft and all those on board. Other more recent examples of aircraft accidents will be known to the Minister and other noble Lords, where the absence or incorrect fitting of specific equipment contributed to disaster. The coroner’s findings in the tragic death of a Red Arrow pilot, reported in the past week, is one of these.
With Crown immunity available to the MoD, as it was through much of my service career, service personnel or their families were entitled to compensation judged by the criteria that unless the MoD could prove that the injury or death was not due to service, the set rate of compensation would be awarded. This approach to proof was overturned by the Armed Forces and Reserve Forces (Compensation Scheme) Order 2005. Now it must first be established that the injured or deceased were on duty at the relevant time before they are considered for any award or compensation.
This is a fundamental change in the burden of proof, in a climate where awards in civilian life appear to far outstrip those available to the Armed Forces. The Committee may recall the case of the typist with repetitive strain syndrome being awarded a couple of hundred thousand pounds in compensation. This has led to a growing number of claims being faced by the MoD in the recent past. Of course comparisons with civil awards can be misleading because in addition to a capital sum, guaranteed income payments, tax-free for life, may be awarded to those service men or women who are most seriously injured. Even allowing for that and for less extreme levels of civilian awards and for the recent increases in compensation for the most seriously injured service personnel, it is still the case that without court actions, service awards do not come close to matching those awarded to civilians. Excessive reliance is placed on the additional support of service charities. It is no wonder, therefore, that there has been an increase in claims against the Ministry of Defence. These might have been even greater if I, with the help of Lord Morris of Manchester, had not tabled and moved an annulment Motion to the Transfer of Tribunal Functions Order 2008, which persuaded the then Government to retain rather than abolish the dedicated tribunal that adjudicates on pension and compensation disputes for Armed Forces personnel.
For these reasons, I urge the MoD to be sure to put in place more representative entitlements if they go down the route I am proposing of providing immunity for the contractor in a GOCO set-up. At the heart of this is the fact that the training and operations of the Armed Forces cannot be totally risk free. Immunity coupled with more representative compensation where death or serious injury occurs is a better compromise. But because Crown immunity is now so circumscribed by statute in the Crown Proceedings Acts mentioned in the amendment, I have proposed a possible way forward if the concept of some specific contract immunity were to be favoured. Perhaps there is a better alternative, and I look forward to the Minister’s response. I hope that he will at least be able to reassure the Committee that the Government mind is not closed to the reintroduction of immunities at some future date in a manner that caters for both peacetime and conflict operations. The Armed Services Act renewal in 2016 would seem to be the right vehicle for making such a move. I look to the Minister for some reassurance on that since it could prove to be a more comprehensive approach than the one in this probing amendment. I beg to move.
Lord Astor of Hever
My Lords, I thank the noble and gallant Lord, Lord Craig, for his amendment. It enables the Committee to consider this important issue, which he also raised at Second Reading. Although the amendment appears to be addressed at giving the GOCO contractor immunity from liability for mistakes, I believe that the real intent behind it is to debate the important issue of combat immunity so far as it concerns our own service personnel. The noble and gallant Lord is absolutely right to identify the matter as one with profound implications for the conduct of military affairs in the future.
With that in mind, let me start by saying something about the recent Supreme Court case known as Smith (No 2). The outcome of the Supreme Court case in the conjoined cases of Smith and others v MoD, Ellis v MoD, and Allbutt and others v MoD has created a new situation of which the implications are not yet clear. These are all tragic cases of deaths on the field of combat in Iraq. The Government have every sympathy with the claimants but are obliged to defend these claims on important grounds of legal principle. Briefly, the argument of the claimants is that while these tragic incidents did indeed take place in the course of combat, combat immunity should not apply because the incidents can be traced back to previous decisions about the provision of equipment and training to the soldiers which could, they argue, have protected them more effectively.
The Government are concerned that this argument could be applied to virtually any claim to which the principle of combat immunity has hitherto been understood to apply and if accepted could have the effect of opening up the conduct of combat to the scrutiny of the courts after the event. This in turn could have seriously debilitating effects on the decision-making of commanders on the ground which could in the long run seriously impair this country’s military effectiveness. They therefore sought to have the claims dismissed by the courts on the grounds that combat immunity applied. As the Committee is aware, the Supreme Court declined to do so. This leaves the claims to be decided by the lower courts after a full trial in each case. Ministers and the military chain of command have been clear that commanders and other military personnel, at whatever level, who make reasonable decisions in good faith in the course of operations will receive the full backing of the services and the Government. It is important to be clear that there has been no decision by the courts that would suggest that they would impose liability in such circumstances.
Lord Rosser
Schedule 2 is referred to in Clause 7 which is very brief and simply states:
“Schedule 2 (restrictions on disclosure or use of information) has effect”.
It is in Part 1, which deals with defence procurement. Clause 38, in Part 2, which deals with single-source contracts, is similarly brief and simply says:
“Schedule 5 contains provision about disclosure of information obtained under this Part”.
In essence, the purpose of this amendment is to seek to replicate, in respect of disclosure of information, the criminal offence provision contained in Part 2 and Schedule 5 on single-source contracts in Part 1 and Schedule 2 in respect of defence procurement. In paragraphs 4 and 5 of Schedule 2, references are made to “unauthorised disclosure” and “unauthorised use” of information but there is no reference to any penalties or implications for disclosing or using protected information. However, in Schedule 5, which relates to wrong disclosure of information obtained under Part 2, on single-source contracts, there is a reference to penalties of imprisonment or a fine.
We do not understand why there is this distinction on unauthorised disclosure of information between Part 1 and Part 2. It is our view that failure to protect protected information from disclosure should be an offence with laid-down penalties. We appreciate the purpose of Schedule 2 in enabling a GOCO to be given confidential information provided by defence suppliers and held currently by DE&S in order to take over the management of existing MoD contracts should a GOCO come into operation.
The Government’s argument for not putting the penalties in Schedule 5 for misuse of confidential information into Schedule 2 appears to be that the Official Secrets Act, along with the GOCO contract itself and the constraints of Schedule 2, will give confidential information given to the GOCO the same protection from disclosure as it has in DE&S today. If there was a misuse of information, the owner of that information could bring an action directly against the GOCO as it can at present against the Ministry of Defence. However, that raises the obvious question of why similar arrangements are not proposed by the Government in Schedule 5 in relation to disclosures of information in respect of single-source contracts.
The information covered under Schedule 2 will include private and commercially sensitive information to which the Ministry of Defence has been given access, outside of a contractual obligation, in circumstances where the owner has a reasonable expectation that the MoD would hold it in confidence and not disclose it to a third party—which, under a GOCO, might be regarded by the owner of the information as including companies that either had been, or might be in the future, competitor organisations.
The Government say that it is not appropriate for a criminal offence to be created for the disclosure of information acquired in the normal course of defence procurement on individual projects and programmes, but that a criminal offence of the disclosure of confidential information provided to the Single Source Regulations Office is justified because the information is highly detailed supplier information and is forward-looking, covering future financial performance, anticipated business plans and planned subcontracting activity.
If that is the argument the Government are going to advance again today, I remain to be convinced by it. Sections of the defence industry have certainly expressed concerns about the prospect of disclosure of their confidential information that would be provided to a GOCO operator in respect of defence procurement contracts and believe that firm penalties are needed to deter such activity. The Government’s argument may be that the information that would have to be provided in respect of single-source contracts is likely to be more commercially sensitive, and thus potentially more damaging if disclosed, than the information provided under defence procurement contracts. However, surely that is something that should be reflected in the decision on whether to prosecute and through any decision of a court on the level of the penalty to be imposed rather than by, as the Government propose, having no provision for any criminal sanction at all in Schedule 2. I beg to move.
Lord Astor of Hever
My Lords, Schedule 2 in its current form is necessary to allow a GOCO to have access to existing confidential information provided by defence suppliers that is held by DE&S so that the GOCO can take over management of existing MoD contracts. If the GOCO does not have access to that information, it will seriously curtail the contracts that GOCO will be able to manage. It will not be able to manage contracts that involve the need to access confidential information provided by a supplier. If the MoD provides confidential information from existing programmes to the GOCO without the protection conveyed by Schedule 2 in its current form, the supplier of the confidential information may claim that the MoD has no legal right to do so. The MoD could seek to negotiate amendments to contracts or obtain licences to supply the necessary information to the GOCO; however, the volume of information concerned, the amount of time and resources required to undertake the negotiations, the costs in licence fees that may be incurred and the possibility of the owner refusing mean that this is not a practical proposition.
Schedule 2 as currently drafted provides protection for owners of confidential information because there are only limited circumstances—essentially where necessary or expedient for defence procurement—when the MoD can share the information with the GOCO. Schedule 2 also provides that the GOCO is then subject to the same confidentiality obligations as the MoD. For example, some of the information the GOCO has will be classified as “UK eyes only”, the classification applied to certain information that cannot be shared with non-UK nationals due to national security issues. The GOCO would not be able to share this information with any employee or parent company that does not meet the nationality requirements.
If the GOCO misuses the confidential information, the owner can bring an action directly against the GOCO in the same manner as it could have done if the MoD had misused the information. This is in addition to confidentiality obligations that the MoD will place on the GOCO through the management services contract. The GOCO will be contractually required to maintain the confidentiality of supplier information and not to disclose it to third parties without the permission of the MoD. The GOCO’s parent companies will be third parties, so the GOCO will not be able to disclose the information to them without the MoD’s permission. The Official Secrets Act will also apply to the GOCO and its staff. The information will therefore receive essentially the same protection from disclosure as it does in DE&S today.
The proposed amendment to Schedule 2 involves deleting the existing schedule in its entirety and replacing it by what is largely a replication of paragraph 2 of Schedule 5, which creates an offence of disclosure of confidential information provided to the Single Source Regulations Office. The creation of such an offence is reasonable in the context where the information is highly detailed supplier information that will be received under the single-source pricing regulations and which suppliers are required to provide by statute. However, the situation is very different from the GOCO situation, and it is not appropriate for a criminal offence to be created for the disclosure of information acquired in the normal course of defence procurement on individual projects and programmes, where any confidentiality is capable of being protected by the GOCO contract coupled with the Schedule 2 constraints. We do not want to create new offences unless it is absolutely necessary to do so. The single-source provisions cover a supplier’s future financial performance, anticipated business plans and planned subcontracting activity. It is highly unusual for the MoD to receive access to information covered by Schedule 5. The offence and tariff proposed is consistent with that applied to other price-regulated industries such as water, utilities, telecommunications and railways. It is not appropriate to day-to-day defence procurement business, which is best conducted as a commercial relationship between the MoD and suppliers.
The new statutory framework outlined in Part 2 has been designed to help ensure that we get value for money on an average £6 billion a year of single-source procurement. Our single-source suppliers can price in the knowledge that they will not be undercut by a competitor—a highly unusual position, and one that is not conducive to getting good value for money. We need to address this, and to do so we need information about a supplier’s actual costs.
Lord Hodgson of Astley Abbotts
My Lords, I shall speak also to Amendments 15 and 16. The background to this group is the same as that for the first group, Amendments 10 and 11, and I shall not weary the Committee by repeating it. Amendments 10 and 11 were concerned primarily with jurisdiction—who is entitled to inquire; the second group is concerned with scrutiny—what is done with the information so gathered. This scrutiny will be achieved by inserting new clauses into the Bill.
Amendment 14 obliges contractors to inform the Secretary of State for Defence what procured goods and services are capable of and how they are being used. The amendment has been drafted to ensure that the reporting obligation will automatically broaden to cover any new technological developments in the future. We have heard from noble and gallant Lords about the various kinds of drones—surveillance drones, attack drones and drones that will fight other drones that are now being developed. It is important that the reportage also includes them.
Amendment 15 seeks to improve scrutiny. It does so in two ways: first, it inserts a new section into the Visiting Forces Act 1952 to create a mechanism for scrutinising overseas forces operating in the UK or within UK-operated facilities. The amendment includes a requirement for the RAF commander responsible for liaison with visiting forces to report at least annually to the Secretary of State and a list of factors which are to be reported upon.
It is worth while just to reflect on the position of the luckless RAF commander responsible for liaison. For a sterling officer to be the nut in the crackers—one side of the crackers being GCHQ and the UK Government, and the other being the US Government, the CIA and the National Security Agency—is an unenviable position to be in, and not a career-enhancing one if you are going to rock the boat and possibly say things that will be unpopular. Therefore, his position is very difficult, but that is by the by. However, we were tempted to buttress his position by defining the makeup of the scrutiny group to include, as it says, a member holding high judicial office—such as a judge—and a person who is capable of understanding the technology being used. The amendment defines the right of access to premises, to receive documents or to interview personnel in pursuance of the committee’s duties.
The second method by which this amendment improves scrutiny is by imposing a duty on the Interception of Communications Commissioner to report at least annually on any activity subject to the Regulation of Investigatory Powers Act 2000—RIPA. My noble friend Lady Miller has put down and had answers to a number of parliamentary questions on this particular topic, so I will leave the field clear for her to have a clean sweep in a minute or two.
Finally, Amendment 16 concerns the use to which these reports should be put. A copy of them should be laid—no doubt with redactions—before Parliament, a copy of reports, hopefully without redactions, should be laid before the Intelligence and Security Committee, and there would be a government response to any concerns raised in those reports.
Taken as a whole, these amendments are not designed to reveal details injurious to our national security or that of our allies. I recognise the delicate balance that needs to be struck in that regard. However, they are designed to ensure that at least the Secretary of State for Defence knows what is taking place in the far-flung corners of his empire. From press conferences, it is far from clear about whether he is currently being so informed. As a consequence of these amendments, the Secretary of State will be able to judge whether actions are taking place either as a result of the use of UK facilities or as the result of the transmission of information through UK facilities that are not in accordance with UK law.
In her advice, which I have already referred to, Jemima Stratford QC points out that the USA has placed much reliance on the doctrine of what is called “anticipatory self-defence”. Except in the rarest of cases, it will be extraordinarily difficult to see how an individual being hit with a drone strike can be said to present an imminent threat to US interests, but never mind. More importantly, the UK Government have rejected that formulation of the doctrine of anticipatory self-defence. In his written report to Prime Minister Tony Blair when evaluating the lawfulness of the invasion of Iraq, the then Attorney-General wrote:
“I am aware that the USA has been arguing for recognition of a broad doctrine of a right to use force to pre-empt danger in the future. If this means more than a right to respond proportionately to an imminent attack (and I understand that the doctrine is intended to carry that connotation) this is not a doctrine which, in my opinion, exists or is recognised in international law”.
To conclude, as warfare once again begins to be waged in secret, the citizens of a democracy are entitled to know that the actions being taken in their name are lawful. Confidence in our parliamentary system demands no less. I beg to move.
Baroness Miller of Chilthorne Domer
I apologise to the Minister, but I am afraid that there is a lot more to say on these amendments before he comes to reply.
I want to address two issues in these amendments in particular. First, the technology has advanced much faster than the legislation designed to regulate its application. In this case, I am not talking about drones but about interception capabilities. Secondly, a lot of the technology appears to be applied by American forces who operate from UK soil but for whom the force of UK law does not seem to apply. For both those reasons, I suggest that the legislative framework is in urgent need of amendment.
Lord Rosser
It was not my intention to intervene in this debate since it seemed to be going on to rather wider issues than strictly covered in the amendment. For that reason, I am not going to go through the specific wording of the amendment and respond to the particular points in it as to where we stand because clearly the issues being raised in this debate go way beyond the amendment and, in my opinion, way beyond the provisions of this Bill.
Lord Astor of Hever
My Lords, these amendments have enabled us to have a debate about a number of issues. The Defence Reform Bill deals with the future arrangements for defence procurement and the Reserve Forces. As with Amendments 10 and 11, which we debated earlier, the issues in this group of amendments go some way from the issues covered by the Bill. Therefore, I will address the impact of the amendments on the Bill, and I shall also try to deal with some of the other issues that have been raised.
First, I turn to Amendment 14 which would require the contractor—the GOCO—to report annually, or more frequently if specified, to the Secretary of State on the technical characteristics, capabilities and use of the equipment and services procured under the provisions of Part 1 and to ensure that anyone who provides defence procurement services to either the GOCO or the MoD provides all the information necessary to enable such a report to be made. Currently, DE&S does not report to the Secretary of State on the details of all equipment and services procured. Procurements are classified on the basis of value, and approvals take place at the appropriate level, with approvals for very high value, novel or contentious procurements elevated to the Defence Council. Where appropriate, DE&S seeks legal assessments of equipment and services procured. An established project management and acceptance process exists for equipment and services with the customer.
It is envisaged that this process would continue to exist under the GOCO arrangements. These arrangements will be agreed in the defence procurement services contract in place between the contractor and the MoD. It is currently not practical or necessary for DE&S to report to the Secretary of State on the details of all equipment and services procured and likewise it will not be practical or necessary for the GOCO to report these details to the Secretary of State.
I turn now to Amendments 15 and 16. The proposed addition to the Visiting Forces Act runs contrary to the purpose of the Act and would impose an onerous and unnecessary obligation on the Secretary of State for Defence. The UK welcomes foreign military personnel from a large number of countries. Their position in the UK is covered by the Visiting Forces Act and the NATO Status of Forces Agreement. Some are here as exchange officers, others for major exercises and some for training and education. This financial year some 3,000 foreign military personnel will have trained in the UK. For example, 65 foreign students are at the Royal College of Defence Studies here in London. Some 80 foreign officer cadets are at the Royal Military Academy Sandhurst and eight foreign officers attend the Royal Navy’s principal warfare officer course at Fareham. These military personnel are so enmeshed into the activities of the UK Armed Forces that a separate reporting mechanism concerning procurement, command and control, and premises and property, is not needed. The amendment is broad since it concerns,
“all premises and property used by visiting forces for defence purposes”.
The Visiting Forces Act and the NATO Status of Forces Agreement do not place foreign forces beyond the reach of UK law. The Act and agreement permit foreign laws and military discipline to apply to foreign military personnel in the UK, but these do not displace UK law. There is nothing unusual or sinister about this, and we require similar provisions for our forces when they are overseas. For these reasons, the Government oppose this element of the amendment. It might be helpful in this context if I clarify that RAF bases are made available to the United States visiting forces under the terms of the NATO Status of Forces Agreement and that USVF personnel in the UK are subject to the provisions of the Visiting Forces Act. I assure my noble friend that the RAF commander takes his responsibilities very seriously, and he receives very substantial training before he takes them on; I have been assured on that point.
With specific regard to oversight of the intelligence activities undertaken at RAF Menwith Hill, this is already provided by the parliamentary Intelligence and Security Committee. The committee does not comment on the details of its work programme, although it does publish information and, when appropriate, occasionally comments in its annual report on visits it has undertaken. I am able to inform noble Lords that the committee has made such occasional visits to the joint UK-US facility at RAF Menwith Hill.
Lord Astor of Hever
My Lords, the provision in Clause 9 is necessary to ensure that any initial transfer of civil servants to the contractor will be under the Transfer of Undertakings (Protection of Employment) Regulations 2006, or TUPE. These implement the EU-acquired rights directive 2001/23EC, which ensures that employees’ rights are safeguarded in the event of transfers of undertakings, businesses, or parts of undertakings or businesses.
The TUPE regulations protect employees if the business in which they are employed changes hands or if the services that they provide are to be provided by another organisation. Their effect is to transfer employees and any rights, powers, duties and liabilities associated with them from the old employer to the new employer. This includes any rights specified in their contract of employment, statutory rights, and the right to continuity of employment. It also includes employees’ rights to bring a claim against their employer for unfair dismissal, redundancy or discrimination, unpaid wages, bonuses or holidays, and personal injury claims. Liabilities arising from such claims also transfer to the new employer. TUPE gives employees a legal right to transfer to the new employer on their existing terms and conditions of employment and with all their existing employment rights and liabilities intact, although there are special provisions dealing with old-age pensions under occupational pension schemes.
Where the sole or principal reason for a dismissal is the transfer itself, it will automatically be deemed to be unfair. This is also the case where the sole or principal reason for the dismissal is a reason connected to the transfer, unless it is for an economical, technical or organisational reason—an ETO reason—requiring a change in the workforce, such as an organisational restructuring resulting in a reduced workforce requirement, or a business relocation. This ETO defence is narrow in scope, and it can be difficult for the new employer to demonstrate. Even if the employer can rely upon an ETO defence and the dismissal is not automatically unfair, it may still be unfair for other reasons, such as a failure to consult properly in a redundancy situation.
Similarly, the new employer cannot change the terms and conditions of employment of transferred employees if the sole or principal reason for the change is the transfer. This is also the case where the sole or principal reason is connected to the transfer, unless there is an ETO reason for the change, usually requiring a change in numbers of the workforce. This often makes it difficult, if not impossible, for new employers to harmonise terms and conditions of employment of staff immediately after a TUPE transfer.
There is a risk that the transfer could be regarded as being outwith the TUPE regulations and be classed as a public administrative transfer. Therefore, it is necessary to make clear provision through the Bill and give the employees certainty that their rights will be protected by the TUPE regulations. The TUPE regulations list explicitly situations to which the regulations do not apply, and a public administrative transfer is one such situation.
Clause 9 also ensures that if the contractor seeks to make redundancies or alter terms and conditions of service, the TUPE regulations will apply. Further, because the protection of employees’ pensions is limited under TUPE, the amendments to the Treasury’s fair deal policy as a result of the Public Service Pensions Act 2013 mean that the employees will also retain membership of their public sector pension scheme upon transfer, and the GOCO will enter into an employer admission agreement with the Ministry of Defence and the Cabinet Office, which will form a contractually binding agreement to continue to allow access to the public sector pension schemes for the transferred employees.
In summary, this clause is required to avoid any doubt that the TUPE regulations will apply to the transfer of Ministry of Defence civilian employees to a GOCO. It will not apply to service personnel, who will remain with their respective services, and will be placed in the contractor’s organisation as required to provide military expertise. They will remain Crown servants and will continue to be managed by their owning military service, and their terms and conditions of service will remain.
The contract between the Secretary of State and the contractor will set out a routine for managing the placement of service personnel in the contractor’s organisation, and will make provision to remove personnel at short notice from the contractor’s organisation if required for operational reasons. Service personnel placements in the contractor’s organisation will last for two to three years, in accordance with usual personnel appointing routines.
Clause 10 and its related schedule provide a number of necessary safeguards, including the power for the Secretary of State to create a transfer scheme which will enable the transfer of the business to another contractor or, in extremis, back to the Ministry of Defence. When a contract expires or is terminated, for whatever reason, it may be necessary for the Ministry of Defence to manage operations itself or to transfer the undertaking to a new company.
Under this power, it is intended that the Secretary of State would have the ability to direct the transfer of certain specified property, rights and/or liabilities such as real property, intellectual property, contracts and people, to either himself, a company, including a publicly owned company, or to a new contractor. This power would allow the Secretary of State to decide exactly what is to be transferred at the point that the transfer scheme is created. The power may be exercised in unforeseen circumstances and maximum flexibility is therefore required. The contractor will be conducting work which is critical to national security and it would not be appropriate to rely on contract provisions alone.
For example, in a situation where the entity becomes potentially insolvent and elements of the business are liable to fall into the control of an administrator, a statutory provision offers more certainty and control and therefore less risk, while contractual provisions are more easily amended or subject to dispute. Furthermore, third-party rights can usually only be transferred with the consent of the third party, whereas a transfer scheme can direct that such rights are transferred. The intention would be to use such a scheme in only a very limited number of scenarios, such as the early termination of a contract. The critical national importance of defence procurement makes it inappropriate to rely on contractual provisions alone. Moving assets by a transfer scheme will avoid the need for third-party consent and ensures the continued delivery of defence procurement services.
The noble Lord, Lord Rosser, asked whether Clauses 8, 9 and 10 on property rights apply to the new DE&S in April. The answer is no, because the new DE&S will remain part of the department, so there is no change of employer for the staff and no property is legally transferred. The noble Lord also asked about freedoms and flexibilities. The new organisation will have significant freedoms and flexibilities, agreed with the Treasury and the Cabinet Office, around how it recruits, awards, retains and manages staff along more commercial lines, to reflect its role of running some of the most complex procurement activity in the world. As part of the MoD, DE&S will remain a Crown body and its staff will continue to be civil servants. However, there will be a number of significant changes, including that governance will be through a non-executive chairman, a CEO and a Chief of Defence Materiel, supported by a board and other non-executive directors. DE&S will be accountable to Ministers through an owners’ council, with an agreed corporate plan and framework document to enshrine its freedom to operate.
Funding will be via MoD estimates, in due course through charging MoD customers for the work it does. DE&S will publish its own plans and produce annual reports and accounts, which will be consolidated within those of the MoD. DE&S will be accountable to Parliament through the CEO as an additional accounting officer. DE&S will have the freedom to pay, grade, promote and manage Civil Service staff. These changes will reinforce the customer-supplier relationship between the military command customers and DE&S and allow it to move earlier to a hard-charging regime.
The noble Lord asked if there was one competition for each phase. There will be a single competition for all four domains provided that the performance of the domains are satisfactory as they transfer. That is, before each subsequent domain transfers, an assessment is made of the GOCO-contracted performance, which is required to meet an agreed standard. The noble Lord asked about discussions on Civil Service pay freedoms. Discussion is ongoing on whether DE&S will be able to go outside the Civil Service pay framework. The noble Lord also asked about the retention of staff. The decision has not yet been made on the remuneration package for retained staff. Any decision will depend on the freedoms agreed with Her Majesty’s Treasury and the Cabinet Office. The noble Lord also asked about pensions. Civil servants transferred to the GOCO will retain their pension arrangements. He asked about a two-tier workforce. There will inevitably be staff on different terms and conditions but that will not necessarily create a two-tier workforce. Part of the purpose of the freedoms being sought is to recognise and incentivise performance through reward.
I said that I would return to Schedule 2. The noble Lord asked why, if there is a criminal penalty under Part 2 of the Bill, one should not apply to GOCOs under Part 1 as supplier contractors are very concerned that GOCOs may misuse the relevant information. Under single-source provisions, contractors are compelled to provide information. They have no choice in that. However, under Part 1 the information is voluntarily given to the MoD by the contractors as part and parcel of the particular procurement being negotiated. It should also be remembered that the Part 1 provisions for disclosure of information to the GOCO apply only to existing and legacy contracts at the date of vesting. After the date of vesting for all new contracts it will be up to the supplier contractor to negotiate for appropriate confidentiality clauses to be included in their contracts, just as for any other contract in any other area of business.
Defence Reform Bill
Lord Astor of Hever Excerpts(10 years, 9 months ago)
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Lord Palmer of Childs Hill (LD)
My Lords, the noble Lord raises some interesting points, which the Government should take cognisance of. However, I ask those who tabled the amendment and the Minister whether these issues should be included in primary legislation. I jotted down the noble Lord’s points as he spoke. He spoke about the premises, and he raises important points, but those are points you deal with in contracts, when you have a lease—whether it is a repairing lease or not. It is not something one would expect to see in primary legislation.
The noble Lord talks about export strategy and the importance of defence exports. I could take this even further: the Ministry of Defence, which is very much involved in defence exports, should also be working closely with the Business Secretary to promote exports. Very often they operate in their own silos rather than together. However, that is not something which would appear in primary legislation.
The noble Lord also talks about foreign influence over defence interests, and I hope the Minister will respond to that point; however, again, it is not a matter which needs to be addressed in primary legislation. I await my noble friend’s answers to these questions but I think they are matters for regulation and secondary legislation rather than being in the Bill.
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever) (Con)
My Lords, these amendments have enabled the Committee to have a debate on Clause 1. As has been identified, Clause 1 is the key clause in Part 1 of the Bill, and it is important that we consider it in detail, because it will enable the Secretary of State to contract with the company for the provision of defence procurement services, should that be the way forward that is eventually agreed. It is also the clause on which most of the rest of Part 1 hangs. The amendments we will be discussing today have highlighted some very important issues and the reasons behind them have been clearly and comprehensively covered by the noble Lord, Lord Rosser, and my noble friend Lord Palmer of Childs Hill.
Amendment 1 relates to the GOCO acquiring rights over the premises and property used by today’s Defence Equipment and Support organisation and ensuring that assets are properly maintained and managed. I agree with the intent behind this latter point as it recognises the importance of ensuring that effective arrangements are in place to ensure that any such assets continue to be properly managed. Clause 1(1) specifically makes it clear that the provisions within Part 1 of the Bill will apply only when three clear conditions have been met. The first condition is that the Secretary of State makes arrangements with a company—in other words, the GOCO—for the delivery of the defence procurement services currently undertaken by DE&S within the Ministry of Defence. The second condition is that the GOCO acquires from the Secretary of State rights in or over premises and property used by DE&S. The third condition is that the GOCO becomes the employer of some or all of the civil servants employed by DE&S immediately before the company becomes their employer.
It is our intention that, although the GOCO will be given the right to use existing DE&S property, the ownership of the assets themselves will not change. In the vast majority of cases this means that ownership will continue to lie with the Ministry of Defence and the management of the assets will be the responsibility of the Defence Infrastructure Organisation. Amendment 1 seeks to make the acquisition of rights over existing DE&S premises and property by the GOCO,
“subject to conditions on maintenance and upkeep set by the Secretary of State”.
However, although I fully support the intent behind the amendment it is simply not required as the issue will be more effectively and better addressed in the contract between the GOCO and the MoD and on a case-by-case basis in the individual leases or agreements.
The premises and property occupied by the GOCO will remain the property of their existing owners, which in the majority of cases will be the Ministry of Defence. The GOCO’s rights and obligations in respect to using these assets will be agreed with the MoD and set out in the GOCO contract and the relevant lease or agreement. This will include conditions on maintenance and upkeep, as normal in a commercial contract or lease. The Defence Infrastructure Organisation within the Ministry of Defence will continue to be accountable for the delivery of infrastructure services, maintenance and upkeep. However, in some cases it is possible that responsibility may be contracted to the GOCO in due course. In conclusion, although the amendment raises some excellent issues, I must resist it for the reasons I have just set out.
I turn now to Amendment 2. Its purpose is to prevent the Secretary of State commencing the establishment and operation of a GOCO under Part 1 of the Bill until he has published guidance on the operation of the contract. In particular, the amendment proposes that this guidance should include the system by which available defence contracts will be advertised to potential bidders and how any follow-on GOCO shall produce and report annually against progress on an export strategy. The amendment seeks to address concerns raised during the oral evidence sessions in the other place about a possible lack of visibility on how the contract will work, particularly in relation to how defence contracts will be placed, and about ensuring that the new GOCO pays sufficient regard to wider defence industrial policy issues, such as the exportability of equipment. The concern was that the GOCO would be focused solely on delivering equipment more cheaply and would not have to take into account other aspects of our industrial policy.
It is our intention that the GOCO will act as the Secretary of State’s agent when contracting for defence equipment and support. This means that the Treaty on the Functioning of the European Union, the Public Contracts Regulations 2006 and the Defence and Security Public Contracts Regulations 2011 will apply in the same manner as they do today. This includes advertising in the Official Journal of the European Union where required. MoD commercial policy on advertising defence contracts will also continue to apply. In addition, it is to be remembered that any contract entered into by the GOCO to deliver defence equipment, support, logistics and services will be entered into by the GOCO as agent on behalf of the MoD, which will remain a counterparty to defence contracts.
It is also our intention that the strategy for wider defence industrial policy and exports remains with government, but supported by the GOCO providing defence procurement services under contract, including providing support to government marketing of defence materiel at defence exhibitions and shows; managing the provision of defence assets and resources to support defence export opportunities, including assistance with export licence applications; and providing recommendations to government on export strategy and policy, a point that the noble Lord raised. The GOCO will therefore not be required to have its own exports strategy and the amendment is therefore not required.
Lord Astor of Hever
The answer to the noble Lord’s first question is no, it would not be. I will write to the noble Lord about the second question on contracts.
Lord Astor of Hever
My Lords, I start by thanking my noble friends Lord Roper and Lord Palmer for their support and I will look very closely at their suggestions. I always listen very carefully to the noble Lord, Lord Levene. He mentioned the importance of defence exports, and I agree with him entirely on that. He mentioned that he was brought in to bring more commercialisation to the operation, and everyone tells me that he was very successful at that. That is exactly what we are trying to do, and I agree that civil servants are not the best people to be commercially aware. We may end up sticking with DE&S+ but we want the flexibility with which the Treasury and the MoD are negotiating at the moment.
The noble Lord mentioned freedoms and controls. As I said, officials are in discussion with the Treasury regarding the nature of the delegations required within the DE&S budget, which revolves around how DE&S recruits, rewards, retains and manages staff. The detailed application of those freedoms will be worked on through the first year of operations, and DE&S staff will remain core to organisational delivery. We want to enhance our skills in bringing in private sector expertise. Further to the work done by Booz & Co on the functional make-up of DE&S, we are conducting a zero-based review to look at the organisation on a post-by-post basis.
I can tell the noble Lord that the Treasury has already agreed—this is not part of the GOCO bespoke trading organisation debate—to limited freedom for the MoD to recruit commercial officers from industry at market rates in recognition of their niche skills. This concession will remain in place as we move to the new organisation on 1 April this year. I will answer the other questions I was asked when I finish the first bit of my speech.
Part 1 sets out the provisions and safeguards necessary to transform the Defence Equipment and Support organisation into a government-owned, contractor-operated organisation—a GOCO. On 10 December last year, the Secretary of State announced a halt to the competition to select a consortium to deliver the GOCO. Although the bidder, known as Materiel Acquisition Partners, engaged effectively with the very challenging brief set out and presented a credible and detailed bid, the Secretary of State concluded that we did not have a competitive process once the other remaining consortium chose not to submit a bid, and that the risks of proceeding with a single bidder were too great to be acceptable.
Further work is necessary to develop DE&S financial control and management information systems to provide a more robust baseline from which to contract with a risk-taking GOCO partner. We remain clear that the only realistic prospect of resolving the delivery challenges facing DE&S in an acceptable timescale is with the injection of a significant element of private sector support. Noble Lords will also recall from the Secretary of State’s announcement in December that we decided to transform the DE&S further within the public sector, bringing in that private sector support and ensuring that it becomes match-fit as the public sector comparator for any future market-testing of the GOCO proposition.
To address the concerns expressed by a number of noble Lords about the continuing need for Part 1 in the light of the Secretary of State’s announcement, I tabled a government amendment that would make the commencement of Part 1 subject to an affirmative resolution by both Houses of Parliament. We have done this in recognition of the likely timescale for any future consideration of a GOCO option as the way forward for DE&S. To do this, we intend to set the DE&S up as a bespoke central government trading entity from April 2014. The new entity will be at arm’s length from the rest of the MoD, with a separate governance and oversight structure consisting of a strong board under an independent chairman, and a chief executive who will be an accounting officer, accountable to Parliament for the performance of the organisation. Importantly, we will permit the new organisation significant freedoms and flexibilities, agreed with the Treasury and Cabinet Office.
Although I understand concerns that have been raised, I reassure noble Lords that we would not seek to retain legislation without good cause. The changes we are now making to DE&S are important, but we cannot guarantee that this approach will prove to be efficient. We need to ensure that we can move quickly to run a future GOCO competition if the new DE&S freedoms prove insufficient to transform the organisation. The Government are convinced that Part 1 remains necessary to deliver an effective GOCO if—I repeat, if—that is the option selected by a future Government. It should therefore remain part of the Bill, to ensure that any Government can move quickly to a GOCO if that is so desired.
Clause 1 is the key clause in Part 1, as I have already described. Although the Secretary of State could enter into a contract with the GOCO using common law powers, the scale of what is contemplated, in terms of both money and people and the important nature of the work that DE&S undertakes, is such that Parliament should have the opportunity to scrutinise and agree the proposals through specific legislation. An important potential change such as this should be made with the consensus of all parties and with the express approval of Parliament. It is right that we have chosen this approach. Clause 1 is the main provision for that debate, and there has already been an insightful and important discussion on it through the amendments tabled by the Opposition in the other place.
Clause 1 also covers the arrangements for the transfer of procurement services once the initial and any subsequent contract comes to an end. It also allows for the transfer of DE&S services to the GOCO in a phased way. Clause 1 provides the basis on which the other provisions in Part 1 work. For example, the exemptions at Schedule 1 apply to premises which are used by a contractor under the arrangements at Clause 1. Clause 1 also includes many of the definitions used in Part 1. If Clause 1 is removed, the other clauses in Part 1 will need to be substantially redrafted to make them work.
If Clause 1 is removed, the Secretary of State could still contract out defence procurement services to a GOCO using his common law powers, but there would be no clause on the general issue of contracting out defence procurement services. This would deprive Parliament of the opportunity to approve this significant change in the way in which the Ministry of Defence does its business through its express agreement to the clause. It would also require a significant rewriting of the rest of Part 1. For those reasons, Clause 1 should stand part of the Bill.
On government Amendment 24, which I have already described, it is appropriate that Parliament has an opportunity further to debate the provisions in Part 1 at a point before they are commenced. I have tabled the amendment to allow this. It requires that both Houses approve by affirmative resolution a statutory instrument to commence the provisions in Part 1.
We have listened carefully to the views expressed by noble Lords from all sides during Second Reading about the need for Parliament to have a further opportunity to consider any proposal for a GOCO, should one be brought forward by a future Government. The government amendment removes the requirement for Amendments 17 and 25, tabled by the noble Lords, Lord Rosser and Lord Tunnicliffe. Their amendments have enabled our informed debate about a number of important issues.
Amendment 17 goes much further: it seeks to place a lengthy consultation requirement on the Secretary of State before any draft commencement order can be laid before Parliament. It requires the Secretary of State to comply with any recommendation by the Select Committee on Defence as to persons and bodies to be consulted. It extends the period in which Parliament has to consider and debate the draft commencement order. These additional requirements are far too prescriptive and would place an onerous and unreasonable bureaucratic burden on the Secretary of State.
Amendment 25 would add yet more prerequisite requirements on the Secretary of State before he may place a draft order before the Houses of Parliament seeking to commence Part 1. The amendment seeks to make the Secretary of State’s power conditional on satisfying the powers set out in proposed new subsection (2B), which would require the Secretary of State to, first, lay before Parliament an evidence-based impact assessment, which must cover the risks and merits of available options, including the GOCO and the “do nothing” option of retaining the existing DE&S; secondly, lay before Parliament an independent report setting out the comparative advantages of the options set out above; thirdly, require the Defence Select Committee to review and scrutinise the independent report and report its findings to Parliament; and, finally, to lay before Parliament any other documents or information that it needs to inform its decision.
Amendment 25 is not required, as the activities proposed will either have been undertaken by the Ministry of Defence as part of its normal approvals process or are not appropriate for legislation as they could be considered to be normal business. Any future proposal to proceed with the GOCO option will be subject to a full, evidence-based business case and investment appraisal, which will set out the relative risks and merits of all credible options, including those cited as required in the amendment. The business case will undergo extensive cross-government scrutiny and assurance and will require ministerial approval before any option can be taken forward. Business cases are approved by the MoD Investment Approvals Committee and by both Ministry of Defence and Treasury Ministers. However, wider government approval is sometimes required—for example, in the most contentious cases.
Lord Bach
My point is that an affirmative resolution does not really provide any effective stop for Parliament, not that it does so. Given my experience of affirmative orders that have been fatally objected against, I wonder how the noble Lord can say that an affirmative order that is defeated really changes things. What happens is that the Government of the day—this is not a reflection on the Minister’s Government—say that the legislation has been passed and the affirmative order must therefore also be passed. In reality, fighting affirmative orders is not an effective way of allowing Parliament to give its view. For something as vital and important as this, having merely the protection of an affirmative order somewhere down the line is not nearly enough. I should be interested to know why the Minister thinks differently.
Lord Astor of Hever
I tabled our amendment after approaches from a number of noble Lords from different parts of the House who wanted to allow any future Government flexibility with which to introduce a GOCO, if that was thought to be the best thing at the time. In reply to the noble Lord’s question, one simply would not have the legislation without the commencement.
Lord Robertson of Port Ellen (Lab)
Can the noble Lord reflect after this debate on the fact that in the House of Commons, as the Commons Library statement says:
“Several amendments relating to the GOCO (Part 1 of the Bill) were tabled for Report Stage but were subsequently not called. Instead the main focus of the Report Stage was on the Government’s plans for the Reserves”?
So there was limited scrutiny in the House of Commons of this part of the Bill. Now the Government are proposing to promote the idea that a GOCO will be a matter for secondary legislation and affirmative resolution. Can the Minister take away the fact that in this sitting, we have had a former Chief of Defence Procurement, a former Chief of the Defence Staff, a former Minister for Defence Procurement and a former Secretary of State saying that, on balance, although they are in favour of radical reform, they all think that Amendment 25 is actually the best way of proceeding? Would it not look rather odd after that if the Government were to say, “We will ignore the advice that we have been given at that level, and arrogantly go ahead with a procedure that is perhaps inadequate”?
Lord Astor of Hever
My Lords, I will certainly reflect on that. We never ignore advice given by the people that the noble Lord mentioned. I am very happy to organise a meeting to discuss the issue, if he feels that that would be a way forward, before Report. I will certainly take it away to reflect on it. I have just been told there were eight sittings on this issue in the House of Commons.
The noble Lord, Lord Davies, said that cost-plus is the most appropriate type of contract for this class. The GOCO will have the commercial expertise that the MoD does not possess to identify the most appropriate contracting arrangements. In future, budgets will lie with the commands, ensuring that we can more quickly respond to changes in equipment requirements. The noble Lord asked about contracting arrangements for first-class major equipment. The target cost incentive fee contracting arrangements are one of the options available to the MoD for the reasons that he described and will continue to be utilised where they are the best option to deliver and support equipment procurement.
In the light of the government amendment and the points that I have just set out, I commend Amendment 24 to your Lordships; I will take away the point that the noble Lord, Lord Robertson, mentioned; and I urge noble Lords not to press Amendments 17 and 25.
Lord Rosser
First, once again, I thank the Minister for the consideration he has given to the amendments and for the detail with which responded to the points that have been made. I also thank all noble Lords who have contributed to this debate with varying degrees of support for the super-affirmative procedure and for the deletion of Part 1. I think it is fair to say that the noble Lord, Lord Palmer of Childs Hill, very much left his options open and was waiting to hear what the Minister said on the question of the super-affirmative procedure.
My argument for removing Part 1 is that this Government no longer intend to go down the GOCO road. It will be for the next or a subsequent Government to make such a decision one way or the other, and it is that Government who should have to justify their decision in detail to Parliament in the light of what improvements have or have not been achieved through the DE&S++ organisation after the changes being introduced after April this year.
The Minister referred to the freedoms and flexibilities that have been agreed with the Treasury in relation to the DE&S organisation from April of this year but, personally, I would find it helpful if he could put in writing what has and what has not yet been agreed with the Treasury and whether there is also agreement by the Cabinet Office; we understand that those freedoms and flexibilities have to be agreed with both, and I do not think that the Minister referred to the Cabinet Office.
One justification that the Minister gave for keeping Part 1 was that it would speed up the process of moving to a GOCO if the decision was made to go down the GOCO road. I do not think that speed is the most important thing. After all, it has already just been delayed for at least three years, so how can an argument be put forward that we need this legislation in place on grounds of speed? The Minister also referred to my amendment and the proposals within it as an unreasonable burden on the Secretary of State. The convenience of the Secretary of State of the day is not the matter we should be worried about. What matters is proper scrutiny of the proposals and getting them right through parliamentary scrutiny, not speed or the convenience of the Secretary of State of the day.
Lord Rosser
Amendment 6 seeks to insert the code of conduct outlined in the proposed new clause. It seeks to address what is sometimes called the “revolving door” issue among Ministry of Defence personnel which can potentially lead to undue influence or access when bidding for MoD contracts.
The matter is relevant to the Bill as many Ministry of Defence staff could have cross-over work with, and come into contact with, the GOCO. There is also the question of whether the revolving door will become a bigger issue than now with the new DE&S+ organisation from April this year which will have greater private sector involvement, greater freedom and flexibilities and be a separate government trading entity.
We would like to see a code of conduct which precludes Ministry of Defence or military personnel of certain rank and above from working for defence contractors, say, for at least two years from the termination of their contract, requires contractors to publish annually a list of employees who have worked for the Ministry of Defence at the specified rank or above, and requires the creation of a register of gifts and hospitality over a certain value. Such a code of conduct would go some way towards slowing down the revolving door between the Ministry of Defence and defence contractors, and also reduce the brain drain or loss of skills in the Ministry of Defence.
Published information, compiled apparently from freedom of information requests, suggests that senior military personnel and former officials from the Ministry of Defence have taken up 3,500 positions with defence contractors since 1996. This trend continues today and clearly is not an issue that relates to a particular Government.
The Advisory Committee on Business Appointments appears to have insufficient influence or power. As rules can effectively be broken, or so it would appear, without sanction, there is surely a case for legislation which will bring greater accountability and transparency to this area. We suggest, as set out in the amendment, a code of conduct with tighter guidelines. I beg to move.
Lord Astor of Hever
My Lords, before I address this amendment, perhaps I may reassure the noble Lord that I will write to him, answering as best I can the points he raised. I mentioned the Cabinet Office in my earlier answer.
Lord Rosser
Perhaps I may express my regrets. I did not hear it. I accept fully what the noble Lord has said.
Lord Astor of Hever
I shall certainly write. I said that officials were in discussions with Her Majesty’s Treasury and the Cabinet Office regarding the nature of the delegations required within the DE&S budget. As far as I am able, I will write as detailed a letter as possible to the noble Lord and make sure that copies are sent to all other noble Lords who have taken part in this Committee. I can reassure the noble Lord, Lord Robertson, that I will organise a meeting to see whether we can come to some meeting of minds. We all want to do what is best for the Armed Forces and for procurement. I shall organise that meeting as quickly as I can.
On Amendment 6, I am grateful for the points raised by the noble Lord. I fully accept the critical importance of protecting the interests and integrity of decision-making within the Ministry of Defence and wider government by maintaining the highest standards of propriety of those Crown servants within the Ministry of Defence, which includes civilian staff as well as members of the Armed Forces, who interact with defence contractors. I believe strongly that the integrity and propriety of those Crown servants who may be in a position to influence decision-making should be seen to be beyond reproach.
However, I must resist the inclusion of the amendment as the issue is already effectively addressed. The code of conduct that the noble Lords wish to include seeks to address general concerns that senior government officials could be perceived to be in conflict or have vested interests when dealing with defence contractors in their day-to-day work. Further, the noble Lord, Lord West of Spithead, in his evidence session of 3 September to the House of Commons, also made mention of Title 10 of the US code, the section of the code relating to the Armed Forces of the United States.
The code of conduct that the noble Lords seek already exists within the Ministry of Defence in two forms. The first is in the form of the business appointment rules, which govern situations in which Crown servants wish to take up a relevant offer of employment within two years of leaving the Ministry of Defence. The second is the gifts, reward and hospitality rules, which govern situations in which Crown servants are offered a gift or hospitality. Together, these two important sets of rules set out the standards of conduct expected of Crown servants within the Ministry of Defence. For civilian officials within the Ministry of Defence, both the business appointment rules and the gifts, reward and hospitality rules are contained within the Civil Service Management Code, which was issued under Part 1 of the Constitutional Reform and Governance Act 2010. For military officials, the rules are contained within the Queen’s Regulations for each of the services, and the provisions of the business appointment rules have been in effect since July 1937.
The Civil Service Code states that civil servants must not accept gifts, hospitality or benefits of any kind from a third party that might be seen to compromise their personal judgment or integrity. The Queen’s Regulations lay down the conduct and procedure to be observed by service personnel on the acceptance of gifts, rewards and hospitality. In all cases, any offers of gifts or hospitality must be registered by the individual in receipt of the offer. The provisions of the business appointment rules for both military and civilian officials differ depending on the seniority of the individual, with the most senior officials requiring permission from the Prime Minister to take up an appointment following the end of their service within the Ministry of Defence.
The specific provisions of the business appointment rules are as follows. For the most senior officials in the Civil Service—at three-star level or their military equivalents—the rules require that they submit an application, which must be referred by the department to the Advisory Committee on Business Appointments, which will provide advice to the Prime Minister to enable a decision to be taken. Due to their role at the highest level of Government and their access to a wide range of sensitive information, all Permanent Secretaries will be subject to a minimum waiting period of three months between leaving paid Civil Service employment and taking up an outside appointment or employment. As a general principle, there will be a two-year ban on civil servants at three-star level and above lobbying the Government—communicating with a view to influencing a government decision or policy in relation to their own interests. For civil servants at two-star level and their military equivalents, the rules require that an application be made to the Permanent Secretary, who is responsible for making a decision and providing a written recommendation to ACOBA—the Advisory Committee on Business Appointments.
Lord Robertson of Port Ellen
The Minister was reading rather quickly. Did he say that the quarantine period was to be three months only?
Lord Astor of Hever
Yes, I did. I shall be able to answer the noble Lord’s question at the end.
Applications from one-star level and below and their military equivalents are considered internally within the MoD. An application at these levels is required only if the individual’s circumstances mean that, in their last two years of service, they have been subject to one or more of the following: first, they have been involved in developing policy affecting their prospective employer, or have had access to unannounced Government policy or other privileged information affecting their prospective employer; secondly, they have been responsible for regulatory or any other decisions affecting their prospective employer; thirdly, they have had any official dealings with their prospective employer; fourthly, they have had official dealings of a continued or repeated nature with their prospective employer at any time during their civil service career; fifthly, they have had access to the commercially sensitive information of competitors of their prospective employer in the course of their official duties; sixthly, the proposed appointment or employment would involve making representations to, or lobbying the Government on behalf of a new employer; and seventhly, the proposed appointment of employment is consultancy work, either self-employed or as a member of a firm, and they have had official dealings with outside bodies or organisations involved in their proposed area of consultancy work.
The number of applications made under the business appointment rules is relatively modest and has averaged around 200 per year over the past five years across grades 1 to 4. For example, in 2012-13 there were 258 applications, of which 172 were approved with conditions, and the rest approved unconditionally.
Baroness Garden of Frognal (LD)
Can my noble friend clarify whether the minimum three months would relate to an employment which was absolutely nothing to do with the previous work? In practice, people who go to work for defence contractors tend to have to wait considerably longer than three months before they can take up that appointment, do they not?
Lord Astor of Hever
My noble friend makes a very good point, which I was just going to mention. The period is three months but obviously, if a Permanent Secretary has any conflict of interest, that would be extended to two years under the normal rules. My noble friend makes a very good point.
Lord Rosser
Once again, I thank the Minister for the thoroughness of his reply on the amendment explaining the current situation, which has clearly caused some surprise in relation to some aspects. Clearly, we will want to look at what he has said when we read Hansard. I assume from his reply that the Government as a whole are satisfied with the present arrangements, and that they are being adhered to—and that there is no problem with the rules being broken, which is what I suggested might be the case. It would be helpful if the Minister could confirm that as far as the Government are concerned, there is no significant or worrying breach of the rules. Perhaps he could also comment on the role and effectiveness of the Advisory Committee on Business Appointments, as that is a matter that I and my noble friend Lord Robertson of Port Ellen raised.
I will be withdrawing the amendment, but I hope that the Minister will be able to reply to those points. I am loath to keep asking him whether he will reply in writing, as I appreciate that what he says will appear in Hansard but, bearing in mind some of the concerns that have been raised, it would be helpful if he could put in writing what he said about the distinction between the three-month period, and the circumstances in which that applies; and the two-year period, and the circumstances in which that applies.
Lord Astor of Hever
My Lords, I will be very happy to do that; in fact I was going to offer to write to the noble Lord, Lord Robertson, with copies sent to other interested noble Lords. I have been handed a fairly detailed brief on that point. Rather than reading it out, I would like to put it in a letter and address all the concerns that have been raised.
Lord Roper
My Lords, I would be grateful if my noble friend in replying to this debate could give us more information on why Clause 2 is necessary and what sort of financial assistance we are discussing here.
Lord Astor of Hever
My Lords, Amendment 7 would require the Secretary of State to withhold approval on any relevant contract price change until a detailed report has been laid before both Houses setting out the circumstances why the increased price is required. The amendment also requires the Secretary of State to write to the chairs of the relevant parliamentary committees, which I assume to be the House of Commons Defence Select Committee and the Public Accounts Committee, telling them that the report has been laid. Although I fully support the principle of being transparent with Parliament regarding the performance of the defence equipment programme, I do not believe that this amendment is appropriate, as it would significantly constrain the operational freedom of the Secretary of State and the department. The amendment is also not required as the performance of the equipment programme is already regularly reported on, including by the National Audit Office, and scrutinised by Parliament.
In addition, the proposal would introduce significant practical issues. Under the proposal, every change of price within a contract managed by the future GOCO would require a report to be laid before both Houses. Given that DE&S manages many thousands of contracts, this requirement could impose an unmanageable burden on the GOCO and the department. Gaining better control over the schedule delivery and cost of the equipment programme is a fundamental part of the likely future GOCO arrangements, and that will not be helped by imposing an excessively burdensome reporting constraint on the GOCO. Indeed, it could result in the opposite effect. The amendment also provides no mechanism for how contract price changes would be approved while Parliament is in recess. It is clearly unreasonable for the day-to-day operation of the department and GOCO in delivering equipment and support to the front line to be constrained in this fashion.
Turning to Amendment 9, it is important to stress that Clause 2 of the Bill is designed as a fallback option to be used as a last resort in circumstances where a GOCO company is in need of financial assistance and unable to obtain it from the commercial market at acceptable rates. We would expect a future contractor to be a financially robust company that would only very rarely need to seek financial assistance from the market and that, should it need to do so, the assistance required would be available on acceptable commercial terms. Therefore, the power to provide financial assistance to the contractor from the Secretary of State is anticipated to be required only in extremely rare circumstances and as a last option to prevent the business from becoming insolvent and ensure business continuity. Clearly, continuity is critical and must be ensured when the business in question is the provision of defence equipment procurement and support services that are vital to supporting our troops on the front line. That risk must therefore be effectively managed. A further important point is that the Ministry of Defence would seek to claw back any financial assistance provided under this clause through deductions from future contractual payments to the GOCO.
The effect of the amendment is to require the Secretary of State to withhold approval for the grant of financial assistance until a report has been laid before both Houses setting out why financial assistance is required and until he has written to the relevant chairs of the parliamentary committees telling them that the report has been laid.
The purpose of this amendment is about ensuring transparency to Parliament—a principle, as I said in my opening remarks, that I fully support. I understand and agree with the desire for Parliament to be kept fully informed and to have the opportunity to consider and comment on the provision of financial assistance from Government funds. However, although the amendment seeks only to constrain the ability of the Secretary of State to provide financial assistance—to the extent that he could not do so until the report has been provided to Parliament—it would have the effect of introducing a time delay to the provision of such assistance, which could have very significant consequences if assistance is required urgently to ensure business continuity.
Lord Roper
Before my noble friend sits down, could he explain—I thought I understood this but now understand it less—whether the reference in Clause 2 to “a contractor” is to the GOCO contractor or to an individual company that is supplying goods to the Ministry of Defence? That is not totally clear.
Lord Astor of Hever
My Lords, I totally agree with my noble friend. Before Committee I had a long debate with the team about this, and we changed my speaking notes radically. We changed “‘contractor” to “GOCO” in many cases. The answer to my noble friend’s question is GOCO, but the terms “contractor” and “GOCO” are interchangeable as far as the Bill is concerned. One can use both when describing provisions in Part 1 of the Bill, but for consistency and clarity we have decided, in my speaking notes, to use the term “GOCO” as far as possible. I note that a “contractor” slipped through the net.
In the light of what I have just said, I need to resist these amendments as unnecessary, and I hope the noble Lords will withdraw Amendment 7 and not move Amendment 9.
Lord Rosser
Once again I thank the Minister for his detailed response. I make two brief comments. Clearly the point of Amendment 7 was to seek to ensure that Parliament would still be kept advised on cost increases in defence contracts in the changed circumstances of the GOCO.
In relation to Amendment 9, if I have understood the Minister correctly, one could argue that if there is provision for financial assistance, it would mean that the risk was not being transferred to the GOCO operator but would remain ultimately with the taxpayer. That raises an important issue about the GOCO operator and the proposals: what risk is being transferred? The response given by the Minister suggests that, come the crunch, not much risk at all is being transferred. However, I do not intend to pursue the matter any further, certainly at the moment. I beg leave to withdraw the amendment.
Lord Rosser
The amendment inserts a new clause after Clause 1 to provide that employees transferred to a company under Clause 1 may not be required to geographically relocate outside the UK without full and proper consultation, which, frankly, one would hope in reality would mean that it would be done only by agreement, although that specific wording is not in the amendment.
There will be an opportunity under later amendments to consider all the possible implications for the employees affected by being transferred to a GOCO contractor organisation, and indeed of being part of the new DE&S organisation after April, with its greater flexibilities and freedoms. However, this amendment deals with a specific issue: the need to provide assurance that staff transferred to a GOCO consortium made up of at least some major international companies will not find themselves being told they must move to a position outside the UK when it is not something they would wish to do, nor would have been compelled to do when part of the current DE&S organisation. I am assuming that this could not happen under the new post-April 2014 DE&S organisation, but it would be helpful if the Minister could confirm that that is the case.
The provisions of the amendment would at least reduce the prospect of such transfers being required against the wishes of the individual concerned. This is not some minor point, because requiring an employee to move abroad is a not unknown way of either removing an employee who has fallen out of favour, or is no longer needed, out of an organisation in the UK, or alternatively if they refuse, out of a company altogether. I very much hope that the Minister will be able to provide some assurance on this point. I beg to move.
Lord Astor of Hever
My Lords, going back to the previous amendment, the noble Lord asked me about risk. I can confirm that risk is transferred but must be capped; otherwise no company would bid for a GOCO, due to unlimited liability. The noble Lord may wish to come back on that.
Amendment 8 raises an important issue. I am grateful for the points that the noble Lord raised and I agree that it is important that we protect the interests of those members of DE&S who would be transferred to the GOCO. I believe strongly that the interests of the transferring employees should be protected in the event that the new company should decide to relocate some or all of the services outside the UK. However, I must resist the inclusion of the amendment because it is not needed. Those employees transferring to the GOCO would be sufficiently protected by UK employment legislation in this regard and, accordingly, there is no requirement to include this provision in the Bill.
Noble Lords may recall the note on the Transfer of Undertakings (Protection of Employment) Regulations 2006—SI 2006/246—provided in another place for reference, which explained the protections that those regulations afford to transferring employees. In summary, the TUPE regulations protect employees if the business in which they are employed changes hands, or the services that they provide are to be provided by another organisation. The effect of the regulations is to transfer employees and any rights, powers, duties and liabilities associated with them from the old employer to the new employer. This includes any rights specified in their contract of employment, statutory rights and the right to continuity of employment. Additionally, the new employer cannot change the terms and conditions of employment of transferred employees if the sole or principal reason for the change is the transfer. This is also the case where the sole or principal reason is connected to the transfer, unless there is an ETO reason for the change, usually requiring a change in number of the workforce. This often makes it difficult, if not impossible, for new employers to amend terms and conditions of employment of staff immediately after a TUPE transfer.
The fact that this Bill makes it clear that the TUPE regulations would apply to the transfer of employees to the company would have the effect of protecting the employees’ terms and conditions of employment in place at the point of transfer, as well as representational rights. The terms of employment that will be protected include any obligation with regard to mobility. Civil Service terms and conditions of employment generally contain a mobility obligation within the UK and abroad for all but the most junior of grades. Some employees who would transfer to the GOCO will have, on previous occasions, relocated for work-related reasons both within the UK and abroad throughout their career in the Civil Service. Any proposed change of work location would be subject to general employment law constraints, which require that any enforcement of a mobility obligation must be fair and reasonable, dependent upon the personal circumstances of the individual concerned.
Noble Lords will be aware that amendments to the TUPE regulations came into force last week, and those amendments will not have a detrimental impact on employees. Further to the protections afforded to employees by the TUPE regulations, part IV of the Information and Consultation of Employees Regulations 2004 (SI 3426/2004) places a general obligation on employers to provide information to, and consult, employee representatives. Consultation is the process by which management and employees or their representatives jointly examine and discuss issues of mutual concern. It involves seeking acceptable solutions to problems through a genuine exchange of views and information. Consultation does not remove the right of managers to manage—they must still make the final decision—but it does impose an obligation that the views of employees will be sought and considered before decisions are taken.
To comply with their obligations under the ICE regulations, employers must provide relevant information to, and consult employee representatives on, all matters in relation to: first, recent and probable development of the undertakings activities and economic situation; secondly, the situation, structure and probable development of employment within the undertaking and on any anticipatory measures envisaged—in particular, where there is a threat to employment within the undertaking; and, thirdly, decisions likely to lead to substantial changes in work organisation or in contractual relations. The information must be provided at such time, in such fashion and with sufficient content as are appropriate to enable the representatives to conduct an adequate study and prepare for consultation.
Furthermore, any consultation must be appropriate in terms of timing, method and content, and conducted with a view to reaching agreement on decisions within the scope of the employer’s powers. In other words, the employer must ensure that any consultation that is conducted must be meaningful, and commensurate to the change which is being consulted on. For example, if an employer were planning to move their current premises to a new building half a mile from where they were currently located, with no effect on working practices or workforce numbers, it could be deemed that the impact of this change would be minimal and, accordingly, a minimal time period of consultation of two to three weeks would be appropriate. However, if the proposal were to relocate to new premises at the other side of the UK, or even abroad, this would have a significant impact on the workforce and a period of two to three months would probably be deemed more appropriate.
I do not have an answer to the noble Lord’s question, except “confirmed”, and I would need to pad that out in the form of a letter to him. In summary, established UK employment legislation provides the required protection to the employees that this new clause is seeking to achieve and I therefore ask the noble Lords to withdraw their amendment.
Lord Rosser
I thank the Minister for his detailed and considered response, which I will read carefully in Hansard. In the mean time, I beg leave to withdraw the amendment.
Lord Astor of Hever
My Lords, this may be a convenient moment for the Committee to adjourn.
Defence Reform Bill
Lord Astor of Hever Excerpts(10 years, 10 months ago)
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Lord Astor of Hever
That the instruction of 21 January be revoked and that it be an instruction to the Grand Committee to which the Defence Reform Bill has been committed that they consider the Bill in the following order:
Clauses 1 to 4, Schedule 1, Clauses 5 to 7, Schedule 2, Clauses 8 to 10, Schedule 3, Clauses 11 and 12, Clauses 44 and 45, Schedule 6, Clause 46, Schedule 7, Clause 47, Clause 13, Schedule 4, Clauses 14 to 38, Schedule 5, Clauses 39 to 43, Clauses 48 to 50.
Armed Forces: Widows’ Pensions
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Lord Craig of Radley
To ask Her Majesty’s Government what is the estimated annual cost of allowing all armed forces widows, who choose to re-marry or co-habit, to retain and not forfeit their existing service widow’s pension in line with the provisions in the Armed Forces Pension Scheme 2015.
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever) (Con)
My Lords, first, I am sure that the whole House will wish to join me in paying tribute to Captain Richard Holloway of the Royal Engineers, who was killed while on operations in Afghanistan on 23 December, last month. My thoughts are also with the wounded, and I pay tribute to the courage and fortitude with which they face their rehabilitation.
The cost of not suspending pensions on remarriage or cohabitation to spouses who survive members of the 1975 Armed Forces Pension Scheme, whose deaths were not attributable to service, is estimated to be in the region of £250,000 per annum; the cost is estimated to be £70,000 per annum in relation to the War Pensions Scheme. Survivors of those enrolled in the current 2005 pension scheme and the new 2015 scheme, when implemented, will retain pensions for life regardless of personal circumstance.
Lord Craig of Radley (CB)
My Lords, I associate myself with the Minister’s remarks about Captain Holloway. I also declare an interest as a vice-president of the Forces Pension Society and a member of the Armed Forces Pension Scheme 1975.
Is the Minister in favour of justice for widows—those widows who are trapped or locked into a scheme which is unfair and discriminatory compared with later schemes, which allow the survivor pension awards to be retained for life? Is this not totally counter to the Armed Forces covenant, which is so strongly supported by the Prime Minister and all in the Government? Will Her Majesty’s Government move quickly to remove the discrimination in the Armed Forces Pension Scheme 1975 and the War Pensions Scheme, bearing in mind that there would be no significant cost to the taxpayer, given the Minister’s figures and making allowance for the policing, both intrusive and insensitive, and the complex administration of these schemes?
Lord Astor of Hever
My Lords, there are 10 categories of widow or widower under the Ministry of Defence pension and compensation schemes. I have discussed this very complex issue with the noble and gallant Lord. We both agreed that I should place a letter of explanation in the Library setting this all out, which I have done this afternoon.
Defence Ministers have enormous respect for the Forces Pension Society and for the War Widows Association of Great Britain and will continue to work very closely with both of them. Successive Governments have reviewed pensions for life, but changes cannot be taken in isolation from other public sector schemes, including those for the NHS, teachers, police and the fire service, which have similar rules in place for their older schemes.
Lord Rosser (Lab)
My Lords, we associate ourselves with the condolences expressed by the Minister to the family and friends of Captain Holloway. His death on active service in Afghanistan is another reminder of the enormity of the sacrifices that continue to be made on our behalf by members of our Armed Forces.
We have had questions before on service pension issues, including the impact of redundancy just prior to the relevant pension qualifying date. If the money is unavailable to ensure that what some would regard as the basic principles of fairness are not overlooked in some cases over service pensions, why is the money readily available to bail out the Secretary of State over misjudgments on, for example, the Joint Strike Fighter and the IT system for Armed Forces recruitment?
Lord Astor of Hever
My Lords, I remind the noble Lord that it is a fundamental principle, which has been applied by successive Governments, including that of the noble Lord, that public service occupational pension terms should not be improved retrospectively for those who are no longer active members of these pension schemes or for their dependants.
Lord Palmer of Childs Hill (LD)
My Lords, from these Benches, may I associate us with the condolences expressed by the Minister?
I agree with the Minister that this is a most complicated area of legislation. When you research it, you realise how mixed up, complicated and confused it is, particularly for those people trying to work their way through it. What is the cost in terms of staffing an administration to police the relationship status of service widows? Given this, and given the fact that the Armed Forces Compensation Scheme does not depend on widows remaining single, is it not time to look again at extending the service widows pension to cover all service widows, whatever their subsequent relationships?
Lord Astor of Hever
My Lords, I agree with my noble friend that this really is a very complicated issue, which is why I am placing a letter in the Library, a copy of which I will send to some noble and gallant Lords. The Service Personnel and Veterans Agency checks the relationship status of war widows. This is conducted every two years, looking at a random sample of about 5% of recipients. In 2010, this exercise cost some £50,000. It is a complicated matter for the Government to consider whether to look again at extending the terms of various schemes to cover all bereaved spouses for life regardless of subsequent relationships. Nevertheless, Ministers will continue to work closely with the Forces Pension Society and the War Widows Association of Great Britain.
Lord Naseby (Con)
My Lords, I declare an interest as a trustee of the parliamentary pension fund. In light of the fact that Her Majesty’s Government have totally turned that upside down through the use of IPSA et cetera, why on earth cannot Her Majesty’s Government listen to the noble and gallant Lord opposite about what is, yes, a complicated scheme—as was the parliamentary scheme—and take some action?
Lord Astor of Hever
I am afraid that I am not sighted on the parliamentary pension fund. However, we are sympathetic to the concerns of the Forces Pension Society and the War Widows Association of Great Britain. The NHS, teachers, police and fire services’ scheme administrators were consulted last year and highlighted their concerns. Should the MoD accede to the retrospective change, the Government Actuary’s Department confirmed that, if all public sector schemes were to change their rules to accommodate this, the cost would be in the region of £3 billion over a 40-year period—the NHS cost alone would amount to about £1 billion.
Lord West of Spithead (Lab)
My Lords, I believe that the armed services are different and it is shameful that we cannot look at this. When Governments look at something like this and decide to do something, as the noble Lord says, they can do it. It is appalling that we have people policing these women—and they are generally women—who are now wanting to remarry to live with someone and who will probably have to have a worse standard of living. Certainly, if I died, I would want my wife to have a happy second life. It is appalling and we should do something about it. Can that not be done?
Defence Reform Bill
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Lord Astor of Hever
That it be an instruction to the Grand Committee to which the Defence Reform Bill has been committed that they consider the Bill in the following order: Clauses 1 to 4, Schedule 1, Clauses 5 to 7, Schedule 2, Clauses 8 to 10, Schedule 3, Clauses 11 to 13, Schedule 4, Clauses 14 to 38, Schedule 5, Clauses 39 to 45, Schedule 6, Clause 46, Schedule 7, Clauses 47 to 50.
Ministry of Defence: IT Systems
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The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever) (Con)
My Lords, I shall now repeat in the form of a Statement an Answer given in the other place to an Urgent Question. The Statement is as follows:
“The Army entered into a partnering contract with Capita in March 2012 to manage recruitment of regular and reserve soldiers. This is an Army-led initiative designed to free up military personnel from recruitment-related administrative tasks and to improve the quantity and quality of Army recruits; it will play a key role as we transition the Army to the new Army 2020 structures.
I should make it clear to the House that the Army has not outsourced its recruitment; it remains in overall charge of recruitment and will continue to play a major role in attraction and mentoring of recruits. Capita’s role is to manage the supporting processes by which a would-be recruit becomes an enlisted regular or a fully-trained reservist.
As I have explained to the House previously, there have been initial difficulties with this recruiting process as we transition to the new recruiting arrangements with Capita and, in particular, we have encountered difficulties with the IT systems supporting the application and enlistment process. The decision to use the legacy Atlas IT platform was deemed at the time to be the quickest and most effective way of delivering the new recruitment programme. An option to revert to a Capita-hosted solution was included in the contracts as a back-up solution.
I was made aware last summer that the Army was encountering problems with the integration of the Capita system to the Atlas platform. Since then we have put in place a number of workarounds and mitigation measures to the old IT platform to simplify the application process, and we have reintroduced military personnel to provide manual intervention to support the process.
Having visited the Army’s recruitment centre in Upavon on 30 October, it was clear to me that, despite the Army putting in place measures to mitigate these problems in the near term, further long-term action was needed to fix the situation. It was agreed in principle at that point that the Atlas system was not capable of timely delivery of the Capita-run programme and that we would need to take up the option to revert to Capita to build a new IT platform specifically to run its system, which will be ready early next year.
In the short term, we have already taken action to bring in a new range of initiatives that will make it progressively easier and quicker for applicants, both regular and reserve, to enlist. As I informed the House in December, we have already taken a number of actions, including: the introduction this month of a new front-end web application for Army recruitment; a simplified online application form; more streamlined medical clearance processes; greater mentoring of recruits by local reserve units through the application, enlistment and training process; and the reintroduction of reserve unit recruitment targets and the provision of recruitment resource to reserve unit commanding officers. With an improved Army recruitment website, streamlined medicals and an increase in the number of recruiting staff, recruits should see a much improved experience by the end of this month.
As we move forward, we are looking at further ways of improving the management of the recruiting process in the intervening period before the introduction of the advanced IT system now being developed in partnership with Capita, which is expected to be deployed in February 2015. We have just launched a new recruitment drive for the Army, both regular and reserves, which will remind the House and the public that the Army is always recruiting and continues to offer exciting and rewarding careers in both the Regular and the Reserve Forces”.
Lord Astor of Hever
My Lords, we acknowledge that there have been difficulties, and the Army is working with its partners to put things right. As the noble Lord knows, the previous Government had their share of IT problems, and we in the Ministry of Defence are gripping the problem.
In the short term, the Army is freeing up to 1,000 soldiers to help with recruiting on the front line. As the response to the Urgent Question said, we are improving the online experience. The application form is being simplified and there is a streamlined medical clearance process and greater mentoring of recruits by the local units. We want to make the whole process much more user friendly.
Much work has gone into addressing recruiting and a new campaign was launched last weekend. Noble Lords may have seen it. Given the target set out in the Written Ministerial Statement before Christmas, we are confident that this can be achieved. We are changing the shape of the British Army to reflect financial reality and the needs of the 21st century. We need to build up reserves with much more specialist roles.
Regarding the noble Lord’s specific questions, on additional cost the £15.5 million mentioned is what we have spent so far getting the system to work on the Atlas platform. Of that £15.5 million, £6.7 million has been spent on doing work that is now of no utility—in other words, that £6.7 million will need to be written off. Another £4.4 million is needed to make the interim programme work in terms of extra manpower and so on. This means that the total of £6.7 million plus £4.4 million, which equals £11.1 million, is the extra cost of this announcement. The overall cost of the programme remains within the financial allocation of £1.36 billion covering the period from March 2012 to March 2022.
This is a long-term issue that deserves cross-party support. I will be going down to Upavon, where the recruiting group, including Capita, is based, and I would like to extend an invitation to the noble Lord, Lord Rosser, my noble friend Lord Palmer and the noble Baroness, Lady Dean, or a representative from the defence group, to accompany me to see what the Army and Capita are doing to sort this problem out.
Lord Palmer of Childs Hill (LD)
My Lords, first, I thank my noble friend the Minister for that offer, which I am happy to accept. When the decision was made to recruit online, was it not premature to cease to use the well tried manual systems, which have been used successfully over the years? I understand the need to move into the next century, but in business you do not introduce a new IT system and throw away the old system until you have proved that the new system is working. Can we be reassured that that will be looked at in the future?
Lord Astor of Hever
My Lords, obviously, we will look at that very closely. It is very easy to be wise with the benefit of hindsight.
I failed to answer various questions asked by the noble Lord, Lord Rosser. He asked me how many Armed Forces personnel will return. I think that I answered that—the Army will be sending in 1,000 regulars to help on the ground with recruiting both the regulars and the reserves. He asked what the effect would be on recruitment, which is a question that I myself asked; the answer is that it is too early to say. How late will the project be? There will be a two-year delay before the full operating capability of the new programme is reached. The IT is due to be up and running in February 2015.
Lord West of Spithead (Lab)
My Lords, surely the fundamental, terrible error was, as the noble Lord, Lord Palmer of Childs Hill, said, to stop using the old system. We took out the people who actually make young men and women want to join the Army. They want to see a bluff NCO with a chest full of medals talking about the Army, not some Capita or “Crapita” person talking to them from behind a computer. As I understand it, 800 regulars who were doing that job were removed and now we are putting 1,000 back in. Does the Minister agree that that was the fundamental error?
Lord Astor of Hever
No, my Lords, it was not. The whole idea of this was to try to relieve manpower to enable soldiers to go back to the front line as well as reducing cost. However, I point out to the noble Lord that this is not the first IT project to go on. In 1998, Labour announced a programme to reform the way that the NHS used IT. It was originally intended to cost £6.2 billion, but costs later doubled to almost £13 billion. In 2011, the Government axed that project and replaced it with a cheaper, locally led system. The National Audit Office slammed the original scheme, saying that it did not represent value for money, so this is not the first time that there have been problems with IT.
Lord Ramsbotham (CB)
My Lords, that is exactly the point that the Minister has made. This is not the first time that an IT system has gone wrong. As the noble Lord, Lord West, has said, this trial was going completely against the traditional methods of recruiting. Will the noble Lord tell the House whether it was adequately tried out before it was forced on what I understand was a very reluctant Army?
Lord Astor of Hever
The noble Lord is probably better informed on that than I am. We want to get the best of both worlds. The Army is not losing control of recruiting—it was always going to be in control of recruiting—but we want to use the very best software to help it do the job properly and get recruits into the reserves and into the regulars.
Baroness Symons of Vernham Dean (Lab)
My Lords, does the noble Lord not accept that my noble friend Lord West made a very important point about soldiers inspiring young people to want to join the Armed Forces? In the same way, you could say that excellent doctors or lawyers have a role in inspiring young people to join the medical or legal profession. Surely it was a mistake to cut out that role from the Army and Armed Forces and simply give it to an organisation like Capita.
Lord Astor of Hever
The noble Baroness makes a very good point, but, as I said, the Army will not lose control of this whole process and there will be soldiers helping with recruiting. This concept was designed not only to cut costs but to enable soldiers to go back to the front line. The initial gateway business case was accepted back in July 2008 by the previous Government.
Lord Brooke of Sutton Mandeville (Con)
My Lords, in addition to what my noble friend referred to in 1998, does he also recall that there was a massive reduction in the Territorial Army during that period? Some of us who were then sitting in the other place had to defend not one but two Territorial Army bases in our constituencies in order to prevent them from being closed. The situation that we are now dealing with would not be so acute if the Territorial Army had had a more stable period.
Lord Astor of Hever
My Lords, my noble friend makes a very good point. When the previous Administration took office in 1997, the Territorial Army was more than 50,000 strong; by the time it left office in 2010, that figure had halved. That pattern of decline has now been arrested and the strength has been stabilised.
Lord Dannatt (CB)
My Lords, the regular Army is losing 20% of its strength, which means 20,000 trained soldiers over the next few years over and above the normal annual outflow of trained soldiers. The initiative to increase the strength of the Territorial Army, as it was previously called, is—to be generous about it—struggling. Can the Minister assure the House that the IT system that is in place is good enough to track the regular Reserve—that is, the soldiers who have served and have been recently discharged—and that, in extremis, there is the IT capability there to recall them to the colours as ex-trained regular soldiers?
Lord Astor of Hever
The noble Lord makes a very good point about officers and soldiers who have left whom we might need at some point in the future. The best of my understanding is that we can track them. If that is not the case I will write to the noble Lord.
Armed Forces and Reserve Forces (Compensation Scheme) (Consequential Provisions: Primary Legislation) (Northern Ireland) Order 2013
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Lord Astor of Hever
That the draft order laid before the House on 19 November be approved.
Relevant documents: 15th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 17 December
Armed Forces and Reserve Forces (Compensation Scheme) (Consequential Provisions: Primary Legislation) (Northern Ireland) Order 2013
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Lord Astor of Hever
That the Grand Committee do consider the Armed Forces and Reserve Forces (Compensation Scheme) (Consequential Provisions: Primary Legislation) (Northern Ireland) Order 2013.
Relevant documents: 15th Report from the Joint Committee on Statutory Instruments.
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever) (Con)
Noble Lords may recall that I led a debate on 15 October this year, introducing this legislation specifically for those seriously injured service and ex-service personnel resident in Northern Ireland who are entitled to an Armed Forces independence payment, or AFIP. This legislation provides access to additional benefits, schemes and services, known as passported benefits. The Motion was passed by the Committee but, due to a procedural error in the progress of the statutory instrument in the other place, the legislation must be debated again before it can come into force.
Although the AFIP has been available to seriously injured service and ex-service personnel resident in Northern Ireland, the legislative changes to provide access to passported benefits have not been implemented. A second statutory instrument, amending secondary legislation, will be in place shortly. Today’s debate gives Members a second opportunity to debate this legislation. It provides access to two minor but important legislative changes in respect of carer’s allowance and the Christmas bonus.
This legislative change will ensure that those who provide invaluable support to seriously injured members of the Armed Forces in receipt of AFIP have access to carer’s allowance in Northern Ireland from the Department for Social Development. Carer’s allowance is currently £59.75 per week. This change will make provision specifically for those who devote their lives to supporting our seriously injured people, providing some financial support for doing so. It is only right that a person caring for an AFIP recipient should have access to carer’s allowance. The provisions relating to the Christmas bonus will ensure that all recipients of AFIP automatically qualify for the tax-free, lump sum Christmas bonus of £10.
By putting in place the provisions to give AFIP recipients resident in Northern Ireland access to the additional benefits, schemes and services that are offered by other government departments, devolved Administrations and local authorities, the Government are giving them treatment equal to that offered to service personnel and veterans resident elsewhere in the UK. It is important that we address these issues, meeting the principles at the heart of the covenant across all Administrations for members of the Armed Forces and veterans who are seriously injured. I hope the Committee will therefore once again approve the order today.
Lord Empey (UUP)
My Lords, the Minister will know that my interest in these matters goes back to the passage of the Armed Forces Bill in 2011, when a number of amendments were discussed in relation to ensuring that the military covenant was applied universally throughout the United Kingdom, particularly in Northern Ireland. One of the points made at that time was that many of the services that are required to be provided for soldiers, former soldiers and their families are devolved matters in different parts of the United Kingdom. The question then arose: how could the Secretary of State for Defence prepare and deliver a report to Parliament, given that he or she would not be in control of many of the services required in the regions? It was also based on the general principle that these services should be as universally available to eligible personnel throughout the UK as possible.
There are a couple of aspects to this. I understand the technical matters that the Minister has addressed, and the fact that the legislation has had to be reintroduced. However, I seek the Minister’s assurance on a couple of issues. First, the welfare issues are currently before the Northern Ireland Assembly. I have no doubt that amendments will be tabled in that Chamber. Whether they affect any of this is unclear, but sooner or later the Welfare Reform Bill will be passed in Stormont, and then we will see where that takes us. Any amendments may well involve a cost to the Northern Ireland Assembly from the block grant. I think people realise that is the case.
The issue that concerns me more than that is that the Minister is saying that the Government have received the consent of Northern Ireland Ministers from the relevant departments for these proposals. Does that mean that the Government will require a legislative consent Motion to come from the Stormont Government or the Assembly, or is there sufficient administrative flexibility for Ministers in Northern Ireland, on their own, to give the Minister and the department the assurances they seek?
The second point is one I made during the passage of the Armed Forces Bill, and I know the Minister is aware of my concern. Although the fact—if it is the case—that he has the consent of Northern Ireland Ministers is welcome, Ministers in various departments will change from time to time. Therefore, the consent of Ministers cannot be guaranteed in the long term. What does the Ministry of Defence do in the event of a Minister refusing his or her consent? That was a point I made during the passage of the Bill. In the short term there is no problem; however, in the long term there may well be one.
I therefore seek an assurance from the Minister that the Government will take all necessary steps, legislatively if necessary, to ensure that the services provided to injured personnel and their families will be provided throughout the United Kingdom, even if there is opposition from the local Administrations. I fear that a pattern has developed whereby we are hiding behind the Sewel convention, to the extent that it is now regarded as a shibboleth. Is Parliament devolving powers or giving them away permanently to local Administrations? That is a big issue for devolution generally.
The specific issue before us is that currently the consent of Ministers in Belfast is required. I understand that. At the moment, it appears that that consent is being given, and I am glad about that, but in the long term it might not be. I say to the Minister that when the next Armed Forces Bill is introduced, which I gather will be around 2016, I would be willing to bring forward proposals to correct any difficulties that might arise because the ministerial team in Belfast had, by then, changed. The issue that concerns me could arise—we have seen it already with the National Crime Agency, where it is not yet resolved.
I feel very strongly about this issue. The House accepted, during the passage of the Armed Forces Bill, that regardless of where they come from or live in the United Kingdom, the services provided to help former soldiers and service personnel who have served in the UK Armed Forces should be available as equally as possible. Nobody should suffer discrimination because they happen to come from a devolved region. This is Parliament’s responsibility, because the Armed Forces are an excepted matter under devolution. In my opinion, it will never be a devolved issue. Therefore, this Parliament has an overarching responsibility to see that these services are provided on an equitable basis, irrespective of where the recipient comes from. I seek the Minister’s assurances on all these matters.
Lord Rosser (Lab)
My Lords, the Minister has reminded us that we debated this matter on 15 October when the order was agreed and we expressed our support for it. The Minister has explained why we have to approve the order again, and that is certainly not an issue on which I wish to dwell.
I have just a couple of brief points, since I do not intend to repeat what I said on 15 October. In responding to points I raised then, however, the Minister said that the number of,
“seriously injured service or ex-service personnel … covered by this order relating to Northern Ireland … is fewer than 20”.—[Official Report, 15/10/13; col. GC 213.]
I simply ask, since the order is not coming into effect on 28 October as was envisaged, whether anyone has lost out as a result, as the order itself indicates that it comes into force on the day after that on which it is made. It would be helpful if the Minister could clarify what date that is likely to be, and whether anyone has lost out as a result of this apparent delay in bringing the order into effect for the reasons the Minister mentioned.
Lord Astor of Hever
My Lords, I thank the two noble Lords for their contributions to the debate. I very much agree with the noble Lord, Lord Empey, that all services and benefits should be universally available throughout the United Kingdom.
Five Ministers of State for Northern Ireland provided consent for these amendments to be made. The departments are the Department for Social Development, the Department of Justice, the Department for Employment and Learning, the Department of the Environment and the Department of Health, Social Services and Public Safety. No further Northern Ireland government approval is required for this SI, but the noble Lord asked me about a possible future situation where a Minister refused consent. I am afraid that I do not have an immediate answer with me, but I undertake to write to the noble Lord on this important point.
The Deputy Chairman of Committees
My Lords, there is a Division. We will return at 3.52 pm.
Lord Astor of Hever
My Lords, the noble Lord asked me what impact the late implementation date would have on the access to a Christmas bonus of AFIP recipients in Northern Ireland. Although there is no legislative provision to make payment of a Christmas bonus to those individuals who have elected to receive AFIP—as the noble Lord said, there are fewer than 20 in Northern Ireland—payments have been made by the DWP to ensure that eligible seriously injured service personnel resident in Northern Ireland receive the same support as AFIP claimants in the rest of the UK and recipients of both the enhanced rates of personal independence payment, which include the Christmas bonus.
In summary, I restate the point I made when I opened this debate. The changes debated today are closely linked to the Government’s commitment to uphold the Armed Forces covenant. It is only right that we provide access to additional benefits, schemes and services to those most seriously injured, wherever they are resident in the United Kingdom. I believe that these changes will go some way to achieve this.
Afghanistan: Interpreters
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Baroness Coussins
To ask Her Majesty’s Government, further to the Written Answer by Lord Astor of Hever on 4 November (WA 1), how they will implement the “intimidation policy route” in respect of locally employed interpreters and translators who have worked with British armed forces in Afghanistan but are not eligible for the ex-gratia redundancy scheme; and what is the per capita cost of the intimidation policy compared to the redundancy scheme.
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever) (Con)
My Lords, we take reports of threats and intimidation towards our staff very seriously. There is a robust process in place for the thorough investigation and assessment of intimidation claims. Depending on the threat severity, different mitigating actions can be taken, including relocation within Afghanistan or, in exceptional cases, to the United Kingdom. It is not possible to compare the cost of the schemes at this time, as a redundancy scheme is still being implemented.
Baroness Coussins (CB)
My Lords, over 2,000 Afghan interpreters are ineligible for the redundancy scheme. It is insulting to trust them to risk their lives for us but not trust them enough to rely on their own assessment of the dangers they face. Will the Government set aside the redundancy scheme and the intimidation policy and instead offer all the interpreters the same targeted assistance package that was available to the Iraqi interpreters? Will the Minister also agree to arrange a meeting with all relevant departments and a cross-party group of Peers to discuss progress? If ever there were a special case for acting outside the Immigration Rules, surely this is it.
Lord Astor of Hever
My Lords, we absolutely recognise our clear commitment to take all reasonable steps to ensure the safety and the security of our locally engaged staff during and beyond the term of their employment with Her Majesty’s Government. The threat environment is different from Iraq. We have a very thorough anti-intimidation policy which applies to all staff employed since 2001 and, in extremis, that includes relocation to the United Kingdom. The noble Baroness asked if I could organise a meeting with a cross-party group of Peers. I am happy to do that. It would be across government, with members from the Foreign Office, the Home Office and DfID.
Lord Palmer of Childs Hill (LD)
My Lords, the Times reported an MoD report showing that UK translators had died and evidence that one US translator had been killed. Given this, will the Minister assess the threats? Is he aware of any death threats to UK translators who have served British forces?
Lord Astor of Hever
My Lords, since June 2013, 116 cases of intimidation have been reported to the intimidation investigation unit. The IIU investigates claims of intimidation, and an in-theatre decision panel assesses the claim and appropriate response level, depending on the risk to the LEC. The MoD’s labour support unit can confirm that, so far as it is aware, in Afghanistan there have been no deaths of serving LE staff that can be directly linked to intimidation.
Lord West of Spithead (Lab)
My Lords, why have the Government been so on the back foot over this issue? The numbers of people involved are minuscule compared with the immigration figures that we have to look at. Other countries are treating people who act as interpreters far better than we do, so I cannot understand why we are so on the back foot. Where is our generosity of spirit? This will affect us in future operations around the world. It is difficult to understand who in government is stopping this happening.
Lord Astor of Hever
My Lords, we are not on the back foot. The intimidation policy has been reviewed, and will be kept under review as appropriate, to ensure that it provides a robust and responsive means for addressing concerns appropriately. This will take account of the current security threat and the lessons learnt from handling cases and consultations with local staff. I have a list of what other countries—our allies—do, and it is very much along the same lines as what we do. I am very happy to write to the noble Lord with information on that.
Lord Stirrup (CB)
My Lords, the media today are reporting the case of an Afghan interpreter who worked for the UK being given asylum by Germany, having been refused it by the United Kingdom. Is this really the sort of comparison that we wish to draw to ourselves in the international community, and how does that square with the Minister’s assertion that our policies are broadly the same as those of our partner nations?
Lord Astor of Hever
My Lords, I have seen the article in the Times today. As I said to the noble Lord earlier, we go about this in a very similar way to other countries. So far only a very small number have been offered relocation in Germany.
Lord Clark of Windermere (Lab)
My Lords, many fair-minded people in this House and outside are completely perplexed by the Government’s response in this respect. We do not seem to be treating our interpreters fairly, and many of us feel that the Government have taken a strange decision. Can the Minister explain in words of one syllable why we are not treating our interpreters in Afghanistan in the way that our colleague countries are doing, and as we did in Iraq?
Lord Astor of Hever
My Lords, staff who have trod the ground with us, such as patrol interpreters and their FCO and DfID equivalents, have endured a level of danger over a sustained period, shoulder to shoulder with us in Helmand province. Their contribution to what we have been able to achieve there was made in a uniquely difficult and dangerous environment. We will not abandon them.
Lord Cormack (Con)
My Lords, will my noble friend place in the Library a detailed analysis of the comparative treatment by various countries? He says that it is broadly similar; many of us would like to see the details and the facts.
Lord Astor of Hever
My Lords, I am very happy to write to the noble Lord, Lord West, and put a copy of my letter in the Library.
Lord Campbell-Savours (Lab)
My Lords, the noble Lord referred to a review. What factors will influence that review?
Lord Astor of Hever
My Lords, we review the situation every six months. Obviously the level of intimidation, which is relatively low at the moment, is an important factor that would be considered.
Lord Craig of Radley (CB)
My Lords, in considering whether to grant asylum to an Afghan interpreter, does the fact that he has a family or is not married come into the equation?
Lord Astor of Hever
My Lords, I can assure the noble and gallant Lord that it does not. Eligible staff will be allowed to bring their immediate family: that is their spouse—one only—or partner, their minor dependent children under 18 years-old and that spouse. There is no limit on the size of a single family provided that the criteria are met.