Armed Forces Restructuring

Lord Hammond of Runnymede Excerpts

Thursday 23rd January 2014 Commons Chamber

[The Secretary of State for Defence (Mr Philip Hammond)]

With permission, Mr Speaker, I wish to make a statement on the final part of the armed forces redundancy programme. As the House will be aware, following the decisions set out in the 2010 strategic defence and security review, the first such review for 12 years, we have been significantly restructuring and reshaping our armed forces to ensure we can sustain their world-class capabilities in the future. As we move from more than a decade of enduring operations in Iraq and Afghanistan, and as we bring our troops back from Germany, we are constructing a new force, Future Force 2020, to protect this country against future threats.

Restructuring the armed forces has required us to transfer personnel and resources between regiments and trades to ensure that we can invest in new areas of priority, such as cyber and ISTAR—intelligence, surveillance, target acquisition and reconnaissance. We have also needed to ensure that our armed forces retain the right age profile and skills as they reduce in size. Achieving that outcome has, unfortunately, required a limited redundancy programme.

Today, the armed forces are announcing the specialist areas from which they will select personnel to be made redundant in this, the fourth and final tranche. By strongly encouraging transfers between different parts of the Army in particular, we have deliberately sought to keep the number of redundancies to an absolute minimum. Hon. Members will no doubt have seen recent speculation in the press about the size of the final tranche. As a result of the steps we have taken, I can confirm that the overall number of redundancies required is considerably lower than that predicted in some recent press articles and lower than in each of the three previous tranches. It will comprise up to 1,425 members of the Army, up to 70 medical and dental officers and nurses from the Royal Air Force, and up to 10 from the Royal Navy.

Tranche 4 will apply the same selection principles within the eligible cohorts as were used in the last three tranches. Selection for redundancy will be based on three criteria only: performance, potential and employability. This is viewed by the individual services as the fairest methodology to all who fall into the redundancy bracket. Individuals will be informed of the outcome of the selection process on 12 June 2014. Applicants for voluntary redundancy will leave six months later and non-applicants 12 months later. As with previous tranches, there are a number of important exclusions from eligibility for compulsory redundancy: those serving on specified operations any time between today and the date of notification of selection for redundancy, 12 June 2014; and those who, on the date of notification of selection for redundancy, have been warned for specified operations commencing on or before 12 December 2014.

Unlike tranche 3, those who volunteer for redundancy having been formally warned for specified operations deploying before 12 December 2014 may still be directed to deploy by their chain of command. This is to ensure that their places do not have to be backfilled at short notice owing to the notification period occurring over the handover between the Herrick 19 and Herrick 20 deployments. The redundancy programme will not impact adversely on current operations in Afghanistan. Personnel assessed as being permanently below the level of fitness required to remain in the forces will not be considered for redundancy and will instead leave through the medical discharge route at the appropriate point in their recovery.

As a way of reducing still further the number of personnel to be made redundant, we will continue to encourage personnel to transfer from areas of surplus to areas of shortage. Specific vacancies have been identified across all three services and those identified as at risk of redundancy will be encouraged to transfer to areas for which they have appropriate skills and will be offered retraining, as necessary. The chain of command will continue to inform these personnel of the transfer opportunities available to them at all stages of this process.

I have also instructed the services to seek to maximise the number of volunteers in order to minimise the number of compulsory redundancies. However, noting that 84% of personnel made redundant in tranche 3 were applicants, it is likely that the percentage of volunteers overall in this final tranche will be lower owing to the low historical level of volunteers among Gurkhas—one of the fields eligible in this round—and the fact that a number of specialist fields will face 100% selection, meaning that there is little or no incentive to volunteer.

Throughout the whole redundancy programme since 2010, approximately 500 Gurkhas have been transferred to other parts of the Army, significantly reducing the requirement for Gurkha redundancies. However, there remains a surplus of personnel in the Brigade of Gurkhas, which is due largely to the changes in their terms and conditions in 2007 that aligned their service periods with that of the Regular Army—from 15 years to 22 years—and a raised recruitment level to compensate for some soldiers’ previous long periods of leave in Nepal. Gurkha personnel now serve on the same terms and conditions as the rest of the Army and are therefore eligible for the redundancy programme, like other personnel currently employed in areas of surplus.

I fully recognise the challenges for servicemen and women of transition to civilian life. My Department has worked hard throughout this programme to ensure that all those selected for redundancy receive not only an extensive redundancy package but comprehensive resettlement support to help them find work and settle into life outside the armed forces. The career transition partnership, which provides briefings, advice and guidance on such issues as housing and obtaining future employment, is highly successful in assisting service leavers to find work, and our latest figures indicate that approximately 90% of service leavers seeking employment find it within six months of leaving the armed forces—a better result than for the population in general.

To support service people leaving the armed forces still further, I can announce an additional measure today. Last year, we announced a new £200 million Forces Help to Buy scheme for service personnel. Ownership of a family home provides security and peace of mind and will help to smooth the transition to civilian life. I have therefore extended the scheme to allow personnel leaving in tranche 4 who do not own a home to apply for a loan in advance of their redundancy package to allow them to purchase a home during the period between notification of redundancy and the actual date on which they leave the armed forces and receive their lump sum redundancy payment.

As an organisation that is fed from the bottom up, the armed forces are always recruiting, and this must and will remain a priority. There is a constant need to replace with new talent those who are promoted or who complete their service. The armed forces require a constant flow of young, fit recruits to maintain the structure required. That is why a major multi-media Army recruiting campaign began earlier this month for both regular and reserve recruits, which we are confident will raise awareness of Army recruiting and provide the backdrop to a reinvigorated recruitment effort at all levels over the next couple of years to deliver the numbers required to man our future structures, both regular and reserve.

For the men and women of our armed forces, I know that this has been a painful process, but completion of this final tranche will mark a turning point. With the bulk of our troops back from Afghanistan by the end of this year, and coming back from Germany over the next four years, as we build Future Force 2020 they will be able to enjoy the peace of mind that comes from belonging to armed forces that have put a period of change and restructuring behind them and are focused on building their skills and capabilities for the future.

After a decade of unfunded promises and shortages of key equipment under the previous Government, our personnel will have certainty about the future size and shape of our armed forces, and confidence that they will have the kit, equipment and platforms they need. Just as important, the country can have confidence that its armed forces will not only be affordable and sustainable, but among the most battle-hardened, best-equipped and best-trained forces in the world, able to ensure that Britain remains safe and secure in the future. I commend this statement to the House.

[Vernon Coaker (Gedling) (Lab)]

I thank the Secretary of State for advance notice of his statement and for early sight of it, which I appreciate.

Have we not come a long way since the Conservative party said before the last election that they would have a bigger Army for a safer Britain? What happened to, “Put simply, we need to have a larger Army and we need more infantry”? When did that change? It changed when the party entered government; it was a broken promise. There were more broken promises from them even in government. After his Government’s defence review, the Prime Minister said in 2010:

“we will retain a large, well-equipped Army, numbering around 95,500 by 2015—7,000 fewer than today.”—[Official Report, 19 October 2010; Vol. 516, c. 799.]

Why did that change? Will the Secretary of State accept that this Government have let down the armed forces and their families?

No one underestimates the challenges of reconfiguring our armed forces and at the same time maintaining the British military’s reputation as the best in the world. Withdrawal from Afghanistan and the end of the presence in Germany means that there is, of course, a need for an appropriate reduction in personnel across all three armed forces. That is sensible and fair, and we support it. Is it not the case, however, that the Secretary of State is failing to approach this with the strategy required for the good of the country and the sensitivity required for the good of the individuals involved and their families? Let us not forget: this is about people.

The Secretary of State has simply not made a convincing case for further redundancies in the armed forces or for reducing capability at an even quicker rate. Does he accept that there are real concerns that by pressing ahead with these redundancies, the Government are taking risks with Britain’s safety and security? It was clear last year that the required uplift in the number of reserves—the 10,000 new recruits to replace the 30,000 regulars—was not happening at anywhere near the speed required. The Government hardly met a third of their own targets. We said then, as did Members from across the House, that the Government should pause their reductions in Army numbers until it was clear that their reserve recruitment was on track. That is still the case today.

On this specific round of redundancies, will the Defence Secretary tell us how many of them will be compulsory and from which regiments and squadrons the redundancies will be drawn? Does he not agree with me that this is a shocking way to repay the dedicated service that these people have given their country? Is he concerned about a loss of skills, particularly on pinch points, and what is he doing to address the problem? Will he confirm at least that no one will be made redundant in a way that affects their pension entitlement? Is it true that a small number of military personnel have been made redundant just days before they meet a service requirement for a pension to which they are entitled? If that is the case, it is not fair. Will the Secretary of State say more about the support he will give those who are leaving the service and making the transition to civilian life?

The Gurkhas are one of the finest fighting forces in the British Army. Does the Secretary of State accept that they have been affected disproportionately by cuts in the Army? In 2011, more than half the redundancies fell on the Gurkhas, and in the second tranche of redundancies in January 2012, when the rest of the infantry lost only 500 men, they lost 400. Does the Secretary of State think that that is fair? What does he think about the public perception that those redundancies are a result of the increased cost of the Gurkhas following their rightly successful campaign for better pay and conditions?

The sense that I have today is one of amazement. How does the Secretary of State do it? A recruitment campaign started last week amid great fanfare, but was followed a day later by the revelation of an IT crisis that had prevented people from signing up, and now by a parliamentary statement announcing redundancies. If the Secretary of State were a football referee, the crowd—and it would have to be a charitable crowd—would be chanting, “You don’t know what you’re doing”—and they would be right.

The Government are letting down our armed forces and their families, and taking risks with our country’s safety and security. The Secretary of State’s story is one of failure, on procurement, recruitment and redundancies. He is getting it wrong and he knows it, and today’s statement only reinforces that.

[Mr Hammond]

Dear oh dear! Let us start from the beginning. The hon. Gentleman trotted out some well-known lines that he has used before, and I shall respond to them as I have done before.

The hon. Gentleman began by asking when the Government had changed their aspiration to have larger armed forces. Perhaps some of my hon. Friends can help me with that, but I would guess that it was at about the time when Labour was wrecking our economy, and we were recognising that we would have to recalibrate our ambitions in all sorts of areas in order to govern the country responsibly. We understand, above all else, that a strong defence of this country can be built only on a strong economy. We must first repair the damage that Labour has done to our economy and then repair the damage that it has done to our society, after which, hopefully, we shall in due course be able to afford to put more money into our armed forces as our economy and our public finances recover.

The hon. Gentleman said that we had let the armed forces down. I say that it is Labour, through its wrecking of our economy, that has let our armed forces down, as it has let the rest of the country down. As for the hon. Gentleman’s comments on this particular tranche of redundancies, what I hear from him is total confusion. He accepts the need for downsizing and restructuring of the Army, but says that we have not made the case for using the redundancy process to do that. He is talking nonsense. We have set out a structure for our armed forces in “Future Force 2020”. They will be smaller than they have been previously, but, crucially, they will have a different structure, relying on reserves, on civilian support and on contractors in some specialist areas. As a consequence, the redundancy process needs to address the structural imbalance in the Army, taking out areas of capability that we no longer need in our regular forces.

As the hon. Gentleman will understand if he listened to my statement, I cannot tell him in advance what percentage of the redundancies will be compulsory; that will depend on how many people volunteer. However, I have been very upfront with the House. As there will be a significant number of Gurkha redundancies and Gurkhas traditionally do not volunteer for redundancy, and as the fact that 100% of the numbers in some fields of redundancy will be made redundant, giving little incentive to volunteer, we expect the overall percentage of volunteers to be lower in this final round of redundancies than it has been in the past.

The hon. Gentleman made two points about fairness. First, he asked whether I thought it was fair that people approaching their immediate pension point—the point at which they can leave the Army and draw an immediate annual cash pension—should be eligible for redundancy. We have thought very carefully about this over the period of the redundancy programme. The truth is that wherever we draw the line there will be somebody just on the other side of it who feels hard done by, and understandably so, but we concluded that it would be unfair to take into account length of service—proximity to immediate pension point—as a criterion for redundancy and we have stuck to that position throughout all four tranches of redundancy. Given the nature of the fields we are looking at in this tranche, we expect the number of people potentially at risk of redundancy who are within a year of their immediate pension point to be very small compared with previous tranches.

The hon. Gentleman asked about the Gurkhas and raised again the question of fairness. He asked explicitly whether the increased cost of Gurkha service was driving these redundancies. The answer is no, but it is the change in their terms and conditions. Previously Gurkhas served under different terms and conditions. The size and level of recruitment to the Brigade of Gurkhas was designed around 15 years of service. We now have to deal with the bulge caused by a change in the terms and conditions so that Gurkhas serve for 22 years. That is a structural challenge in the Brigade of Gurkhas. We have also seen a change to the terms and conditions of service, which no longer provide for Gurkhas to take long periods of leave to return home to Nepal. That was previously covered through an over-manning by about 370 individuals in the Brigade of Gurkhas, which allowed for those periods of extended leave at home that are no longer available now that the terms and conditions of service are standardised across the Army. So what we are seeing here is not an unfairness; we are seeing the consequences of a decision to apply fairly the terms and conditions of service to the Brigade of Gurkhas as they are applied to the rest of the Army.

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

My right hon. Friend has said this is the final tranche; well, thank God for that. What commitment can he give that this is the very last of these unwelcome statements for many years to come?

[Mr Hammond]

I can tell my right hon. Friend that the resizing of the Army announced as an outcome of the strategic defence and security review 2010 will be achieved by the redundancies that have been announced over the last three tranches and the redundancies that will be announced in this tranche. This will deliver us the size of the armed forces we need for Future Force 2020. I cannot predict or predetermine the outcome of the next SDSR, which will take place after the general election in 2015.

[Mr Tom Watson (West Bromwich East) (Lab)]

The Secretary of State recently confirmed in a written answer that we have deployed military personnel in a US base in Djibouti. Please will he tell me what their role is? Are they involved in the drones programme in Yemen, and will they be affected by this cuts announcement?

[Mr Hammond]

I can tell the hon. Gentleman that personnel deployed on overseas operations will not be affected by the redundancy announcement I have made today.

[Sir Gerald Howarth (Aldershot) (Con)]

While many will remain baffled at this Government’s priorities in increasing overseas aid by £2.5 billion this year and continuing to inflict these long-planned cuts on the Army, will my right hon. Friend nevertheless accept that had it not been for the fact that the Ministry of Defence was starved of its share of the increase in public expenditure under the last Government, the base from which we would have had to restructure the MOD under this Government would have been a jolly sight better than it has been?

[Mr Hammond]

My hon. Friend has a good point. The hon. Member for Gedling (Vernon Coaker) lectures me from the Opposition Front Bench, but it is noticeable that during that long period after 2001 when there appeared to be no limit to the scale of public spending and no limit to the level of taxation and borrowing and spending that the then Government were prepared to engage in, the armed forces did not share in that cornucopia and the consequences are here for all of us to see today.

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

The Conservative party continued to promise a larger Army even once the scale of the challenge facing our public finances and the country was known. Does he accept that that did a disservice to the British public and the armed forces on whom we rely?

[Mr Hammond]

I know that Opposition Members do not like this, but the truth is that we discovered a black hole in the finances of the Ministry of Defence that had to be dealt with if we were going to have sustainable armed forces in the future and eliminate our armed forces being asked to deploy without the equipment and protective personal equipment that they required to do so safely. We had to put that right. That has meant that some tough decisions have been made, but my understanding is that the Opposition accept the restructuring and resizing of our armed forces and that we have to have an Army of 82,000 going forward. If I am wrong about that, I should be happy to be corrected from the Front Bench and to have an explanation of how the Opposition propose to pay for a larger Army.

[Nicholas Soames (Mid Sussex) (Con)]

When the withdrawal from Afghanistan is complete, the RAF will have only about four aeroplanes and a few hundred people deployed abroad, yet it retains 220 combat jets, 650 support aircraft and 36,000 men. It is not clear to me what these are for, given that there is no discernible air threat to the United Kingdom. Will my right hon. Friend be a little less timid and have a close look at how military aircraft assets are held in this country and set about some vastly needed and urgent reform?

[Mr Hammond]

I am grateful to my right hon. Friend for his suggestion. The balance between the different arms and the focus that we put on different parts of our defence infrastructure is quite properly reviewed in the strategic defence and security review process. I am glad, and I am sure he will be too, that we have now placed this on a firm quinquennial footing so that the issues can be reopened and re-examined regularly. It is quite proper to do so.

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

Is not the failure of the Army recruitment strategy the reason the redundancy numbers are smaller than originally envisaged?

[Mr Hammond]

We constantly look at all the levers—as the Army calls them—of manning. The levers are recruitment levels, voluntary outflow—people leaving the service before the last possible date—and redundancy, which is always the last resort. There is a constant rebalancing. We had already reduced intended recruiting numbers to minimise redundancy, but we cannot do the whole restructuring through the recruitment lever alone because in some areas we have to take personnel out of the structure in order to deliver Future Force 2020.

[Bob Stewart (Beckenham) (Con)]

Some people suggest that there will not be much support for expeditionary warfare among the public again. In my experience, the public can be very fickle, especially when events and horrors happen. With this tranche of redundancies, we now have the smallest armed forces we have had for a long time. May I ask the Secretary of State to say what everyone in this House feels—that our armed forces will now be up to any challenge that they are asked to meet within their small numbers, and that our people should rest assured that they will do that extremely well when called on to do it?

[Mr Hammond]

My hon. Friend observes that we shall have the smallest Army for a number of years when we have completed this restructuring, but we might also remind ourselves that we still have the fourth largest defence budget in the world and, on any fair and objective assessment, the second most capable expeditionary armed force capability in the world after the United States. The public can rest assured that our armed forces will do their duty and protect this country wherever, whenever and however called upon to do so.

[Angus Robertson (Moray) (SNP)]

I thank the Secretary of State for giving me advance sight of his statement. The UK Government have acknowledged that personnel reductions in Scotland have been disproportionate. The right hon. Gentleman’s predecessor confirmed that there would be cuts of 27.9% in Scotland, compared with 11.6% across the UK. Will the Secretary of State confirm that personnel numbers are at a record low in Scotland, at around 11,000? That is significantly lower than the level of 15,000 planned by the Scottish Government for after independence.

[Mr Hammond]

I was thinking about how to answer the hon. Gentleman’s question, but he has just given me the solution. The Scottish Government’s so-called plans for the future Scottish defence force exist in cloud cuckoo land. Their numbers simply do not add up, and our analysis shows that they would require about 30% more than they are proposing to spend to deliver the full structure that they have outlined in their White Paper. I look forward to coming to Scotland in due course and deconstructing, yet again, the rubbish coming out of the Scottish National party.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

Can my right hon. Friend confirm for my constituents that we still have a well-equipped, properly staffed and professionally led defence force that is capable of meeting present and future challenges and defending our nation?

[Mr Hammond]

Yes. Future Force 2020 will be able to deliver the outputs specified in the strategic defence and security review, in which we set out clearly what we expect our armed forces to do and how we expect them to work, frequently in partnership with allies. I am confident that they will be able to deliver those outputs for the benefit of our nation.

[Mr David Crausby (Bolton North East) (Lab)]

What can the Secretary of State tell us about his longer-term recruitment plans for the Gurkhas, or is this just the beginning of the end for them?

--- Later in debate ---

[Mr Hammond]

No, we maintain recruitment of Gurkhas, but we have to deal with the structural imbalance caused by the changes made in 2007. Once we have done that restructuring, the pattern of sustainment in the Brigade of Gurkhas will require continued recruiting as we move to a normal pattern of 22 years’ service for Gurkha servicemen.

[Sir Bob Russell (Colchester) (LD)]

The Prime Minister’s approach to defence is the most complacent I have known in my lifetime. A few days ago, the former US Defence Secretary, Robert Gates, said:

“With the fairly substantial reductions in defence spending in Great Britain, what we’re finding is that it won’t have full spectrum capabilities and the ability to be a full partner as they have been in the past.”

Does the Secretary of State accept that assessment from someone who knows what he is talking about?

[Mr Hammond]

The hon. Gentleman mentioned the Prime Minister. I wonder whether he remembered the previous Prime Minister’s attitude to defence when he made that sweeping assertion. I have a great deal of respect for former Secretary Gates, but he has been out of office for a couple of years now. I also noted that, in the interview in question, he seemed distinctly vague about some of the details of our defence policy. He could not even quite remember what our position was on aircraft carriers, and it seemed to have completely passed him by that we were building the two largest ships in the Royal Navy’s history right now, not only to replace the carrier capability but hugely to enhance it. I absolutely reject his suggestion that we will not be able to be a worthy and preferred partner for the United States in the future. Just last week, I met the commander of the United States fifth fleet, who told me specifically that the Royal Navy was, and will remain, the fifth fleet’s partner of preference and that, in their joint operations in the Gulf, the dividing line between the Royal Navy and the fifth fleet was invisible. That is the way we want it to be, and that is the way we will ensure it remains.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Does the Secretary of State agree—he will not like this—that the great British public are not stupid and cannot be fooled and that we know, our allies know, our enemies know, our admirals know and our generals know that, today at the Dispatch Box, he has run up a flag that tells the world that we are no longer a serious world power? [Interruption.] That is the truth, and he cannot disguise that fact.

[Mr Hammond]

Well, I have heard some rubbish in my time. Although we might disagree, the hon. Gentleman could have tackled me on a range of issues about the impact of the changes that we have made in the structure and funding of our armed forces, but this final tranche of redundancy today—about 1,500 people across the armed forces—is not a big structural change and certainly does not warrant the accusation he has made.

[Mr Julian Brazier (Canterbury) (Con)]

Does my right hon. Friend accept that the unpalatable and difficult decisions that he has had to take on manpower were an absolute requirement to enable us to fund the rebuilding of the fleet, which has always traditionally been, and should remain for a country that is an island dependent on trade, our No. 1 defence priority?

--- Later in debate ---

[Mr Hammond]

My hon. Friend makes the good point that, as we look to the challenges of the future, we must be prepared to take difficult decisions to flex how we spend the budgets and resources that we have available. Even half a decade ago, no one was talking about investing in cyber-warfare. Now, it is the No. 1 issue on everyone’s agenda. As our defence budgets are not getting larger, to invest in this critical new area, we have to disinvest in other areas. That is the nature of the difficult challenges we face, and we will continue to take those difficult decisions in Britain’s best interests.

[Dan Jarvis (Barnsley Central) (Lab)]

Clearly, as we draw down the Regular Army, the plan is to increase our reservist capability. All the people in the Army Reserve whom I talk to say that we must still do more to persuade particularly small and medium-sized employers to support their employees serving as reservists. What more can the Government do to support them in releasing their people to serve?

[Mr Hammond]

I welcome the hon. Gentleman’s question, and he is right: a big part of getting the reserve recruitment agenda right, and for that matter the reserve retention agenda right, is engagement with employers. Engagement with large employers, including public sector employers, is well advanced, but he is absolutely right to put his finger on the fact that engagement with smaller employers is, first, more difficult and, secondly, crucial to the success of this project. The Defence Reform Bill, which is in the other place, which I am not supposed to call the other place any more—currently, in the House of Lords—

[Vernon Coaker]

Where did that happen?

[Mr Hammond]

In the Procedure Committee, I believe. The Bill contains provisions that will allow us for the first time to pay bounties to small and medium employers when their reservist employees are mobilised. That is not perhaps a differentiator in itself, but it sends an important signal to small and medium employers that we recognise the cost burden that they take on when they allow a member of their staff to become a reservist.

[Mr Tobias Ellwood (Bournemouth East) (Con)]

As the British Army rebalances its Regular-reservist ratio, will the Secretary of State confirm that, once the Defence Reform Bill becomes law, the large pool of reservists will be considered for all future operations on equal merits as the regulars and that the call-up process will be a lot simpler and without fear of financial loss to the reservists?

[Mr Hammond]

Well, there were a lot of multiple questions in there. First, I should like to make it clear that the restructuring of the Regular Army is predicated on a number of things. The growth of the reserves is one of them, but an increased use of civil support and contractors to provide some of the support functions is also an important part. Once we have built the reserve force to the level that we have set out by 2018, there will be certain areas where we use reservists routinely on operations because we only hold those capabilities in the reserve force. But of course, a core function of the reservists will always be to provide resilience and reinforcement for an enduring deployment of the nature of what we have been doing in Afghanistan.

[Paul Flynn (Newport West) (Lab)]

Does the Secretary of State not recognise the public’s disillusionment that the cost of being the fourth highest spender on defence in the world has been the loss of the lives of 626 British soldiers in two avoidable wars? Does not punching above our weight militarily always mean dying beyond our responsibilities?

[Mr Hammond]

I do not think the hon. Gentleman is doing a great service to the families and memories of our brave servicemen and women who have made the ultimate sacrifice in the two campaigns that he refers to. I do not think that many hon. Members or, indeed, many of the British public think that it is either right or in our interests to turn our backs on the world. We are an open nation and a trading nation that depends on the maintenance of the rules-based system of international law and trade. We should remain fully engaged in the future, and our armed forces are but one—a very important one—of the many levers that we have available to maintain our influence in the world.

[Sir Tony Baldry (Banbury) (Con)]

The armed forces recognise, as does everyone else, what had to be done to clear up the mess that the last Labour Government left the country in, but they want, as we all do, some stability and certainty in their lives, so will my right hon. Friend reiterate and make it clear to the House that, once this last tranche of redundancies has been completed, that is it—this is the final tranche—so that everyone in the armed forces knows that they have some stability and certainty?

[Mr Hammond]

I am grateful to my right hon. Friend, and that is exactly what I want to convey today. This has been a difficult time: a period of uncertainty and change, and no one likes uncertainty or change. The armed forces will now be able to concentrate on the future and on building the skills and capabilities that we have set out for Future Force 2020, knowing that we have completed the draw-down in size and the major restructuring that we have undertaken. That provides a very robust base to build for the future, with armed forces that will remain one of the most experienced combat-hardened and capable armed forces in the world.

[Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)]

Will the Secretary of State clarify whether personnel who are serving on operations will be accepted or refused if they apply for redundancy?

[Mr Hammond]

I am happy to clarify that for the hon. Lady. Personnel who are serving on operations are, of course, eligible to apply for redundancy if they wish to do so, but if they are serving on operations at any point between now and the announcement date on 12 June, they will not be eligible for compulsory redundancy. So if they do not volunteer, they will be exempt from redundancy.

[Andrew Selous (South West Bedfordshire) (Con)]

Will the Secretary of State say a little more about the reinvigorated recruitment effort that he told the House about? In particular, will he be open to different methods, so that we can see more of what works?

[Mr Hammond]

As my hon. Friend might well imagine, Ministers and senior officials are vigorously examining different approaches that have been tried in different areas and different parts of the country to see what works best. What is clear to me is that, as I said in the House last week, we must focus back on using front-line reserve units as the principal tool of recruitment to the reserve. We can support that with national campaigns and a nationally managed IT platform, but we must rely on front-line reservists recruiting their fellow reservists. Everything that I have seen reinforces that, and it will be one of the driving requirements in how we manage this campaign.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

May I clarify that the Secretary of State is promising the House that RAF redundancies will be confined to a maximum of 70 medical and dental officers and nurses?

[Mr Hammond]

I can confirm that.

[Mr John Baron (Basildon and Billericay) (Con)]

The plan to replace 20,000 regulars with 30,000 reservists is beset with problems, including more than £50 million wasted on a botched IT system, missed recruitment targets, cancelled reserve courses and a widening capability gap. Given that the previous Secretary of State recently confirmed in this House that the original plan was to hold the regulars in place until the reservists were able to take their place, can this Secretary of State inform the House why and when that plan changed?

[Mr Hammond]

First, my hon. Friend continually asserts, and I continually rebut, the idea that we are trying to replace 20,000 regular soldiers with 30,000 reservists— that is not what we are doing. We are restructuring the regular force; the regular force will be smaller. We will use civilians in a different way from how we have used them in the past. We will use contractors more effectively, learning the lessons, particularly from the US experience of using contractors to support combat operations. We will also use reservists, but it is simply wrong for him to suggest that this is a straightforward swap of 20,000 regulars replaced by 30,000 reservists. That is not how it works.

My hon. Friend knows very well the answer to the second part of his question: there is not the budgetary capacity to maintain the Regular Army at 102,000 while building the reserve to 30,000 by 2018. That simply cannot be done without imposing new and unwanted cuts elsewhere.

[Heidi Alexander (Lewisham East) (Lab)]

I listened carefully to what the Secretary of State had to say about individuals being made redundant just before their immediate pension point. What he failed to say, of course, was that for some long-serving officers this loss can amount to tens of thousands of pounds in forgone pension payments. Does he really believe that that scale of loss is consistent with the spirit of the military covenant?

[Mr Hammond]

Let me just be clear about what we are talking about, as although the hon. Lady may understand this, perhaps not all hon. Members do. When people reach their immediate pension point they can leave the Army, notwithstanding the fact that they may be only in their 40s, and take an immediate pension. When somebody is close to, but has not reached, their immediate pension point when they leave the Army through a redundancy, they receive an enhanced lump sum redundancy package to reflect that fact and they still, of course, retain their pension rights when they reach their pensionable age of 60 or 65, depending on what pension scheme they are in. We have looked at the alternatives and concluded that all of them would deliver at least as much unfairness to other groups, and that this is the fairest and most appropriate way to proceed.

[Sir Edward Leigh (Gainsborough) (Con)]

We were told, understandably, that the armed forces had to take their share of pain through the time of recession. Surely, by the same coin, as the economy is growing they can take their share of the gain. If the reserve recruitment programme does not go as well as we all hope it will go, can we at least keep the door open—I am not asking for a commitment now—to once again recruiting more for the Regular Army in the future and increasing it to meet our commitments as they arise?

[Mr Hammond]

I can say two things on that to my hon. Friend. First, unfortunately, the scale of the damage to our public finances is such that, as the Chancellor set out a couple of weeks ago, although the economy may be recovering, we have not yet dealt with the structural deficit we inherited from the Labour party, and it will take some years yet to correct the fiscal imbalances that we face in this country. However, he is right to say that we should never say never, and one of the key drivers in our restructuring of the Army is to ensure that we retain a capability to regenerate force, so that if at some future point our public priorities change or external circumstances force us to change them, we will have the capability within our armed forces to expand again and regenerate that capability.

[Yasmin Qureshi (Bolton South East) (Lab)]

How many Gurkhas will lose their jobs? What percentage of such redundancies will be voluntary?

[Mr Hammond]

I can tell the hon. Lady that the expected number of redundancies in the Gurkha areas are: 71 in the Queen’s Own Gurkha Logistic Regiment; 28 in the Queen’s Gurkha Engineers; 246 in the Royal Gurkha Rifles; and nine among Gurkha staff and personnel support functions. On voluntary versus compulsory redundancy, all I can tell her is that historically the uptake of voluntary redundancy by Gurkhas has been very, very low. Therefore, on a pessimistic projection, I have to assume that the majority of those redundancies will be compulsory.

[Jason McCartney (Colne Valley) (Con)]

My right hon. Friend has already confirmed that the UK has the fourth largest defence budget in the world. Will he also confirm that the UK, along with the United States and, ironically, Greece, is one of only three of the 28 NATO members to be achieving the 2% of GDP level on defence expenditure?

[Mr Hammond]

I am pleased to be able to tell my hon. Friend, as my colleague the Estonian Defence Minister would never forgive me for not mentioning this, that Estonia has joined the elite band of countries that meet the 2% of GDP defence spending target. Just four countries in NATO meet that target.

[Mrs Madeleine Moon (Bridgend) (Lab)]

I am sure that members of the RAF will feel the shock that I felt at the announcement that 70 medical and dental officers and nurses are to be made redundant. In evidence to the Select Committee on Defence, those were identified as “pinch trades” in some aspects of the armed forces. The Secretary of State has talked about the ability for people to retrain. Will he say something about the support given for people to leave one branch of the armed forces and move into another branch, where there may well be vacancies they can fill?

[Mr Hammond]

First, I reassure the hon. Lady that nobody will be made redundant in a pinch-point trade; these redundancies are happening only in areas where we are carrying surpluses. As a result of restructuring, a change in the way we deliver the service means that the posts of 16 RAF dental officers, nine RAF dental nurses and five RAF dental technicians are no longer required. She is right to raise the issue of retraining, and I recall that she raised it in respect of previous tranches of redundancy. We have put in a lot of effort in this tranche to make sure that we put even more emphasis behind the opportunities for retraining. Where people have the skills and the willingness to retrain, they will be fully supported through the chain of command to retrain and redeploy within the armed forces. We have no wish or ability to lose talent and skills that we have, so long as we can deploy them in a way that is usable within the new structure that we are putting together.

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

What impact will this announcement have on Devonport-based ships and the Royal Marines based in my constituency? Will he ensure that we can recruit more doctors and dentists, bearing in mind that we have one of the finest medical schools in the country?

[Mr Hammond]

As I have been at pains to point out, the fact that we are making people redundant in certain areas does not always mean that we will not be continuing to recruit in those areas. The armed forces are bottom-fed organisations, and we have to get the correct rank structure within each of the specialisms. My hon. Friend will have heard me say that the maximum number of Royal Navy redundancies will be 10, all of which will be in the medical and dental field. I expect the impact on the Royal Navy to be very limited. We will, however, have smaller medical and dental services in the future, to reflect the way in which we provide those services to our armed forces in peacetime.

[David Rutley (Macclesfield) (Con)]

Will my right hon. Friend remind the House of the scale of the financial challenge faced by the MOD in 2010 compared with that in other nations? Will he also tell the House what steps are being taken to ensure that we do not face such challenges again?

[Mr Hammond]

I am grateful to my hon. Friend for that. I know that Opposition Members do not like it being said that we inherited a £38 billion black hole in the defence budget. We have dealt with that and we have put in place a balanced equipment plan that is fully funded with a contingency of £4.5 billion in it. More importantly, we have put in place mechanisms to ensure that projects do not get signed off willy-nilly by politicians when the resources are not in place to pay for them. That ensures that we have a coherent defence budget and that we never again find ourselves in the position of the former Labour Defence Secretary Lord Hutton who, for the want of £300 million over two years, was forced to delay the aircraft carrier project and drive £1.6 billion of additional costs into that programme. We will not get ourselves into that position.

[John Glen (Salisbury) (Con)]

Some of my constituents have been alarmed by recent reports of unfilled vacancies in key roles such as intelligence officers, radiologists and electronic warfare system operators. Will my right hon. Friend confirm that the announcement today will take account of the need to maintain all capabilities and avoid expensive short-term replacements from outside the armed services?

[Mr Hammond]

As I said in an earlier reply, we will not be making any redundancies in those pinch-point fields. We face, across the armed forces, a number of areas in which we directly compete with very highly paid civilian occupations. I am talking about engineering of all types—nuclear, aircraft and airworthiness speciality skills. In those areas, it is a constant challenge to recruit and retain staff, but those are challenges that the single services manage extraordinarily effectively in the circumstances.

[Richard Graham (Gloucester) (Con)]

How many of those currently working at the Allied Rapid Reaction Corps, many of whom are constituents of mine, will be affected by this programme? Will the Defence Secretary confirm that all those made redundant will receive a generous compensation package and help with housing and new jobs? We need to work closely with counties such as Gloucestershire, which have signed the military covenant, and to emphasise to the young of our county and my city that there are still real opportunities to join the Army and learn skills, for example as bricklayers and electricians.

[Mr Hammond]

Those opportunities do indeed remain, and the purpose of the current marketing campaign is to emphasise to people that all areas of the military—the Navy, the Army, the Air Force and the Marines—are recruiting and open for business. However, we are conscious that the inevitability of a redundancy programme sends out a somewhat mixed message. I can also confirm that military redundees receive generous compensation packages. I have announced today help with housing purchase, and there is an excellent programme in place for supporting people to acquire the skills they need for dealing with the civilian world, including employment search. I am confident that we have done everything we can to make the transition from military to civilian life as smooth as possible for those who will be affected by the programme.

[Rehman Chishti (Gillingham and Rainham) (Con)]

A question has been raised about the armed forces covenant. Will the Secretary of State clarify and confirm that it was brought about by this Government in 2011, helping armed forces personnel and their families. Will he also clarify whether, following the post-2014 restructuring that will take place after Afghanistan, the United Kingdom will retain all its Reaper drones, and whether those drones will play a part in our long-term strategy?

[Mr Hammond]

I can confirm that it is this Government who have enshrined the armed forces covenant in law and have very positively driven the armed forces covenant programme since that time, creating the community covenant and the corporate covenant, which now play an important part in the overall programme. My hon. Friend also asked me about Reaper drones post-Afghanistan, stretching the statement on redundancy to its maximum limit. None the less, I say to him that we expect unmanned aerial vehicles to form a permanent and significant part of our future aerial capability.

[Mr Philip Hollobone (Kettering) (Con)]

If 18 medical and dental posts are to be lost from the RAF and the Royal Navy, what efforts are being made, and what incentives are being provided, to ensure that such experienced and dedicated personnel find new careers in the NHS where their skills are badly needed?

[Mr Hammond]

Such people are inherently employable. Almost all of them will be absorbed pretty much immediately into the NHS. The priority challenge for us is to ensure that as they make that transition into the NHS, they join the reserves to continue playing a part in delivering Britain’s military capability.