Aircraft Carriers and UK Shipbuilding
Lord Hammond of Runnymede Excerpts(10 years, 9 months ago)
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The Secretary of State for Defence (Mr Philip Hammond)
With permission, Mr Speaker, I would like to make a statement on the future shipbuilding programme for the Royal Navy and, in particular, the aircraft carrier project.
As the House will know, the previous Government entered into a contract with the Aircraft Carrier Alliance, an industrial consortium led by BAE Systems, to build two 65,000-tonne aircraft carriers—the largest ships in the Royal Navy’s history. In the strategic defence and security review 2010, the incoming Government, faced with the challenge of dealing with a £38 billion black hole in the Ministry of Defence budget, was advised that under the terms of the contract it would cost more to cancel the carriers than to build them. The Public Accounts Committee has subsequently described that contract as “not fit for purpose” and identified, in particular, the misalignment of interests between the MOD and the contractors, manifested in a sharing arrangement for cost overruns which sees, at best, 90p of every pound of additional cost paid by the taxpayer, and only 10p paid by the contractor, as the root cause of the problem.
I agree with the PAC’s analysis. In 2012, I instructed my Department to begin negotiations to restructure the contract better to protect the interests of the taxpayer and to ensure the delivery of the carriers to a clear time schedule and at a realistic and deliverable cost. Following 18 months of complex negotiations with industry, I am pleased to inform the House that we have now reached heads of terms with the alliance that will address directly the concerns articulated by the PAC and others. Under the revised agreement, the total capital cost to Defence of procuring the carriers will be £6.2 billion, a figure arrived at after detailed analysis of costs already incurred and future costs and risks over the remaining seven years to the end of the project. Crucially, under the new agreement, any variation above or below that price will be shared on a 50:50 basis between Government and industry, until all the contractor’s profit is lost, meaning that interests are now properly aligned, driving the behaviour change needed to see this contract effectively delivered.
The increase in the cost of this project does not come as a surprise. When I announced in May last year that I had balanced the defence budget, I did so having already made prudent provision in the equipment plan for a cost increase in the carrier programme above the £5.46 billion cost reported in the major projects review 2012 and I did that in recognition of the inevitability of cost-drift in a contract that was so lop-sided and poorly constructed.
I also made provision for the cost of nugatory design work on the “cats and traps” system for the carrier variant operation and for reinstating the ski-jump needed for short take-off and vertical landing operations. At the time of the reversion announcement, I said that these costs could be as much as £100 million; I am pleased to tell the House today that they currently stand at £62 million, with the expectation that the final figure will be lower still.
Given the commercially sensitive nature of the negotiations with the Aircraft Carrier Alliance, I was not able publicly to reveal these additional provisions in our budget, since to do so would have undermined our negotiating position with industry. However, the MOD did inform the National Audit Office of these provisions, and it is on that basis that it reviewed and reported on our 10-year equipment plan in January this year.
I am therefore able to confirm to the House that the revised cost of the carriers remains within the additional provision made in May 2012 in the equipment plan; that as a result of this prudent approach, the defence budget remains in balance, with the full cost of the carriers provided for; and that the centrally held contingency of more than £4 billion in the equipment plan that I announced remains unused and intact, 18 months after it was announced.
In addition to renegotiating the target price and the terms of the contract, we have agreed with the Aircraft Carrier Alliance to make changes to the governance of the project better to reflect the collaborative approach to project management that the new cost-sharing arrangements will induce and to improve the delivery of the programme. The project remains on schedule for sea trials of HMS Queen Elizabeth in 2017 and flying trials with the F-35B commencing in 2018.
Overall, this new arrangement with industry will result in savings of hundreds of millions of pounds to taxpayers, and I pay tribute to the team of MOD officials, led by the Chief of Defence Matériel, who have worked hard over a long period of time to deliver this result.
In reviewing the carrier project, we also reviewed the wider warship-building programme within the context of the so-called terms of business agreement, or TOBA, between the MOD and BAE Systems signed in 2009 by the last Government. As the House will know, we remain committed to the construction of the Type 26 global combat ship to replace our current Type 23 frigates, but the main investment approval for the Type 26 programme will not be made until the design is more mature, towards the end of next year.
There is, therefore, a challenge in sustaining a skilled shipbuilding work force in the United Kingdom between the completion of construction of the blocks for the second carrier and the beginning of construction of the Type 26 in 2016. Under the terms of the TOBA, without a shipbuilding order to fill that gap, the MOD would be required to pay BAE Systems for shipyards and workers to stand idle, producing nothing while their skill levels faded. Such a course would add significant risk to the effective delivery of the T26 programme, which assumes a skilled work force and a working shipyard to deliver it.
To make best use of the labour force, therefore, and the dockyard assets, for which we would anyway be paying, I can announce today that we have signed an agreement in principle with BAE Systems to order three new offshore patrol vessels for the Royal Navy, based on a more capable variant of the River class and including a landing deck able to take a Merlin helicopter. Subject to main-gate approval in the coming months, these vessels will be constructed on the Clyde from late 2014, with the first vessel expected to come into service in 2017.
The marginal cost of these ships, over and above the payments the MOD would anyway have had to make to keep the yards idle, is less than £100 million, which will be funded from budget held within the equipment plan to support industrial restructuring. This order is good news for the Clyde. It will sustain around 1,000 jobs as the carrier construction work reaches completion, secure the skills base there and ensure the ability to build the Type 26 frigates in due course, while turning the MOD’s liabilities under the TOBA into valuable capability for the Royal Navy.
I turn now to the final part of this statement. The House will be aware that, this morning, BAE Systems has announced plans to rationalise its shipbuilding business as the surge of work associated with the carriers comes to an end. Regrettably, that will mean 835 job losses across Filton, the Clyde and Rosyth, and the closure of the company’s shipbuilding yard in Portsmouth. The loss of such a significant number of jobs is, of course, regrettable, but was always going to be inevitable as the work load associated with the carrier build came to an end.
I want to pay tribute to the men and women on the Clyde and in Portsmouth who have contributed so much to the construction of the Royal Navy’s warships—including, of course, the Queen Elizabeth class carriers. BAE Systems has assured me that every effort will be made to redeploy employees, and that compulsory redundancies will be kept to a minimum. The company is now engaged in detailed discussions with the unions representing the work force in Portsmouth and on the Clyde.
I know that the loss of shipbuilding capability will be a harsh blow to Portsmouth. The Government and the city council, together with Southampton, are in discussions about a city deal package for the area, to boost growth and jobs in the local economy. We expect to be able to make an announcement on that shortly. I can also announce that Admiral Rob Stevens, the former chief executive of the British Marine Federation, will chair a new maritime forum to advise the Solent local enterprise partnership on its maritime vision.
Despite the end of shipbuilding activity, Portsmouth will remain one of two home ports for the Navy’s surface fleet, and will continue to undertake the vital support and maintenance work that sustains our most complex warships, including the Type 45 destroyers and, of course, the aircraft carriers themselves. Indeed, with both carriers based in Portsmouth, the tonnage of naval vessels based in the port will be at its highest level since the early 1960s, sustaining a total of around 11,000 jobs in the dockyards and related activities. To support this level of activity, I can announce today an investment of more than £100 million over the next three years in new infrastructure in Portsmouth to ensure that the carriers can be properly maintained and supported.
The Chair of the Public Accounts Committee has previously described the carrier programme as
“one of the most potent examples of what can go wrong with big projects in the public sector”.
That is the legacy that this Government inherited: a carrier contract that was not fit for purpose and a TOBA that would have required the MOD to pay BAE Systems to do nothing while our shipbuilding skills base faded away. These announcements today put that legacy behind us. They will secure the future of British warship building, set the aircraft carrier project on a new path with clear alignment between industry and the MOD, and deliver important new capability in the form of offshore patrol vessels for the Royal Navy. I commend this statement to the House.
Vernon Coaker (Gedling) (Lab)
I thank the Secretary of State for his courtesy in providing me with early sight of his statement. It is with a heavy heart that I, and I think all Members, listened to what he had to say. However, it was important that he came to the House today, and I am glad that he did so. Let me say at the outset that when the Government do the right thing on defence, especially when difficult decisions need to be taken, they will have our support. We will always say and do what we believe to be in the interests of Britain and its people. These are complicated and detailed matters, and it will take some time to examine the consequences of today’s announcements by BAE Systems and the Government.
The Secretary of State focused today on the aircraft carrier programme. May I remind him that his party supported that programme? From what he was saying, that might have been difficult to believe. He also talked about the start of the Type 26 programme and the interim work. I will return to those subjects in a moment.
My first thoughts, and those of all hon. Members, are with the employees who are facing job losses today, and with their families and the communities in which they live. Britain’s shipbuilders are the best in the world. They have proved that over decades and even centuries, and this is a difficult day for all those people who take pride in our maritime prowess and the history of our nation. Will the Secretary of State join me in praising those who give such great and dedicated service to our country?
What discussions has the Defence Secretary’s Department had with the Department for Business, Innovation and Skills about providing support to ensure that the unique abilities of our skilled work force, particularly in Portsmouth, are not lost? I do not mean over the last week or a number of days; I mean over the last three and a half years of this Government. It seems to me that it is only since news of the potential job losses were leaked out that the Government have given any thought to this matter. In fact, in February 2012, the White Paper, “National Security Through Technology”, said that the MOD
“does not consider wider employment, industrial, or economic factors in its value-for-money assessments.”
Does the right hon. Gentleman still agree with that statement?
Will the Defence Secretary join me in praising the role of the trade unions which have worked closely with the company and have approached these very serious issues with maturity and shown leadership in representing their members across the whole of this United Kingdom? Will he confirm that the Government need to use this opportunity to set out a clearer path to help the UK-based defence industry play its part in modernising both our industrial base and our equipment programme? Does he agree that a strong UK defence industry can be both responsive to the changing threats we face, as well as part of a vibrant, advanced and high-skilled private sector, stimulating jobs and growth?
The Secretary of State made much of his repeated claim that the Government inherited a £38 billion black hole. That figure does not stand up to scrutiny. He has never explained how he got to that figure and it has never been accepted by any credible organisation, including the National Audit Office, which said it was impossible to arrive at such a figure. Can he tell us how he arrived at that figure and what assumptions he used to produce it?
On the aircraft carriers, the Secretary of State has trumpeted the new agreement to split 50:50 with the industry any overrun on the target cost. Will he confirm that any new changes by the MOD, such as the debacle over the “cats and traps” for fighter jets, which were changed and changed back again—the right hon. Gentleman now says it wasted only £62 million—will be fully met by the MOD? The fact that future costs will be split 50:50 is welcome. Most of the risk has already passed, as evidenced by the fact that the anticipated cost of the programme has almost doubled. And, of course, the 50% that the Government will meet still runs to hundreds of millions of pounds. It does not take an accountant to work out that 50% of £800 million—the reported rise in costs this week—is a lot of money for the taxpayer. Will he confirm that he expects no further rises in the cost of the aircraft carriers?
The cost of the restructuring that has been outlined will be borne by the Ministry of Defence. Will the Secretary of State tell us how much that will be and how it will be paid for?
We welcome the fact that skills will be maintained by the development and construction of the three offshore patrol vessels announced by the Defence Secretary today. Will he give a little more detail about how much these will cost, and will he outline what plans he now has for the second aircraft carrier and whether it is his intention to mothball it?
There has been a lot of conjecture about the role that the politics of the Scottish referendum played in the decision to keep shipbuilding in Govan. Will the Secretary of State confirm, as I and everyone else believe, that today’s decisions were taken on the basis of what is in Britain’s best interests and what will sustain the skills of the work force, thus maintaining the future of our shipbuilding industry and our country’s defence? Will he outline what safeguards are in place if Scotland votes to leave the United Kingdom? None of us wants to see that, but we need to know what plans he has for all eventualities. We must retain a sovereign shipbuilding capability for this country.
Finally, will the Defence Secretary join me in saying that whatever the difficulties we experience, this country is a proud maritime nation? We have a proud, dedicated Navy, serviced by a proud, dedicated shipbuilding work force. We must maintain that across the United Kingdom, and retain the ability to build the warships we will need to defend our island, protect our interests across the world and keep us secure. That is both a task and a duty for us all.
Mr Hammond
I appreciate the hon. Gentleman’s measured tone and I join him in congratulating once again the work forces on the Clyde and in Portsmouth on the excellent naval vessels that have been built for the Royal Navy over the last few years, including the carrier that remains in build.
I know the hon. Gentleman is new to his post, but he is really going to have to check some of the history before he starts making sweeping statements. He tells me that when the carrier programme was announced, the cost was £3.6 billion. Almost as soon as it had been announced, the then Secretary of State announced a two-year delay, which the National Audit Office says drove a further £1.6 billion into the cost of the carrier. The largest single element of cost increase in this programme was a deliberate act by the then Labour Government to delay the project by two years.
The hon. Gentleman asks me when we first engaged with the Department for Business, Innovation and Skills about the challenges of maintaining a skilled work force. He suggests that that has happened only in the last few days. I can tell him that the Minister of State, Department for Business, Innovation and Skills, my right hon. Friend the Member for Sevenoaks (Michael Fallon), who is in his place on the Front Bench, sat down a year ago to discuss this subject and has been in discussions with the local authorities in the area for at least a year over how to deal with the challenges that these inevitable changes present.
The hon. Gentleman asked me about the union response. I look forward to seeing the union response in full. I understand that, so far, the unions at national level have been constructively engaged with what they understand is an effort to save the shipbuilding industry in the UK. They recognise that the level of employment in naval shipbuilding represented a surge around the carrier project that was never going to be sustainable in the long term. The challenge now is to protect the skills base as we downsize the industry.
The hon. Gentleman asks me about the £38 billion black hole. We could have a very long conversation about that, but put simply, it is the difference between the projected budget available and the commitments that the previous Government had announced. I have set that out in detail. Because the hon. Gentleman is new to his post, I would be happy to write to him and set it out again for his benefit. I would be happy to discuss it with him at any time in the future.
The hon. Gentleman asks about the consequences of the STOVL—short take-off and vertical landing—reversion. If we were to change the specification in the future, the MOD as the customer would, of course, have to accept the consequences, but we are confident that the design of the aircraft carriers is now mature. The mistake made in 2008—it was a small one—was that the contract was placed before the ship had been designed. Unfortunately—I kid my hon. Friends not—anybody who has ever tried to place a contract to build a house before the house has been designed will know that that is a licence to print money for the contractor.
The hon. Gentleman asks whether I can guarantee that there will be no further rises on the £6.2 billion price. Of course I cannot give him an absolute guarantee, but I can tell him that with every pound of additional cost being shared as 50p for the Government and 50p for the contractors, we will at least have the contractor’s serious attention to try to maintain control over the project—something that we did not have under the contract construct that the last Labour Government left us.
The hon. Gentleman asks how we have paid for the additional costs. If he had been paying attention to the statement, he would know that I told him that the full costs announced today were provided in the balanced budget equipment programme that I announced in May 2012.
Yes, the hon. Gentleman is absolutely right that we are acting as the Government of the United Kingdom in the best interests of the whole of the United Kingdom, looking at where best to deliver Britain’s warship building capability in the United Kingdom in order to make it sustainable and cost-effective in the future.
Mr James Arbuthnot (North East Hampshire) (Con)
My right hon. Friend has said that “with both carriers based in Portsmouth, the tonnage of naval vessels based in the port will be at its highest level since the early 1960s”, which is excellent news. Does that mean that the Government have reached the entirely sensible decision to bring both carriers into service?
Mr Hammond
As my right hon. Friend knows, that decision will be made in the strategic defence and security review 2015. Whether the decision is to bring the ship into service or to mothball it, it will be kept at Portsmouth.
Anas Sarwar (Glasgow Central) (Lab)
At the time of the Grangemouth crisis, the First Minister of Scotland said that we should not try to play constitutional politics with such a serious issue, and I hope that he applies the same principle now to what is a very concerning time for workers in Govan.
I welcome the Secretary of State’s announcement of the new contract, but that will give little comfort to workers in Portsmouth, Govan, Scotstoun, and Rosyth who will be losing their jobs during this difficult period. Will the Government give us a pledge that they will work with employees throughout the United Kingdom who are affected by what he has announced, with the trade unions and with the company to ensure that those who have lost their jobs are supported, while also trying to find a sustainable long-term future for shipbuilding that will protect jobs and investment in the UK?
Mr Hammond
What I have announced today will provide that sustainable long-term future for shipbuilding. We have answered the $64,000 question of how we would bridge the gap between completion of the aircraft carrier blocks and the commencement of the Type 26 build programme by commissioning three additional ocean-going patrol vessels which will be built on the Clyde. We have a sustainable naval shipbuilding industry in the United Kingdom, as of today’s announcement.
Of course it is regrettable that jobs will be lost. That is a function of the surge in the size of the industry that is needed to deliver these very large carriers. We will work across Government with the unions, communities and other stakeholders who will be affected to ensure that the transition is as smooth as possible.
Caroline Dinenage (Gosport) (Con)
The end of shipbuilding in Portsmouth is devastating for a community with a record of more than 800 years of proud service to the Royal Navy. Does the Secretary of State know when we shall hear of plans to help to ease the pain of this decision—particularly in relation to the city deal—and does he know what conversations have taken place with Portsmouth city council about the timing of today’s announcement?
Mr Hammond
My hon. Friend is, of course, right. As I acknowledged in my statement, the decision will be very hard for people in Portsmouth to accept. However, we should put this in context: 940 jobs will be lost, but 11,000 will remain in dockyards-related activity in Portsmouth, which will be the largest centre of surface maritime support in the United Kingdom—and that will continue into the future.
We are engaged in discussions with both Portsmouth and Southampton city councils about the city deal proposal, and I am advised that a statement is likely to be made very soon, as soon as those negotiations have concluded.
Jim Sheridan (Paisley and Renfrewshire North) (Lab)
As a former shipyard worker, let me say on behalf of the men and women in our British shipyards that, although they take pride in what they build, they do not necessarily care what they are building. Those at BAE Systems must learn to explore the commercial market, because they will not be able to sustain the company if it is wholly dependent on MOD contracts.
As for the question of industrial relations, we should contrast what is happening with the trade unions at BAE Systems with what has happened at Grangemouth. One employer respects its employees, and the other does not.
Mr Hammond
I am happy to report that relations in the shipbuilding industry between management and unions are good and constructive. The unions understand the challenge that the industry faces, and they have worked with the management to address it. That sometimes means that union officials must make tough decisions as well, because they know that the industry cannot be sustained at its current size.
The hon. Gentleman alluded to the diversity of the shipbuilding industry. We hear a great deal about how shipbuilding will be sustained through the commercial market and the third-nation market, including the market for warships, but I am afraid I have seen no evidence to suggest that we are able to compete in what is a very aggressive global market for commercial shipping. I think that the shipbuilding industry in this country will be primarily dependent on Royal Navy orders placed in the United Kingdom, because of the sovereign requirement for us to have warship building capability.
Mr Mike Hancock (Portsmouth South) (Ind)
Can the Secretary of State explain why it was decided to transfer the existing work that was commissioned in Portsmouth away from the yard, so that the employees there will have no opportunity to complete the construction of the aircraft carriers? Can he also assure us that the MOD will not seek to claw back any of the money that is made available to Portsmouth through the city deal?
Mr Hammond
Let me respond first to the question about the aircraft carriers. Today BAE Systems announced its plan for rationalising the industry, as it must do under the TOBA in order to sustain warship building capability in the future. The challenge for us is to bridge the gap between the completion of the carrier and the start of the Type 26 programme. By moving three carrier blocks to the Clyde, along with the manufacture of the OPVs, we shall be able to sustain warship building on the Clyde and to maintain its viability into the future.
I should be happy to discuss the city deal negotiations with the hon. Gentleman, who, I know, is well acquainted with the affairs of Portsmouth city council. I understand that the MOD is prepared to make land available as part of an overall scheme which would create investment and employment opportunities in the city.
Mr Ian Davidson (Glasgow South West) (Lab/Co-op)
As the Member of Parliament who represents Govan Shipbuilders, I welcome the order that has been placed there for the OPVs. It is a great tribute to the skills, commitment and hard work of the work force, both management and staff. As one of my colleagues observed earlier, Govan shipbuilder is no INEOS.
May I also point out that, given that this is an order from the Royal Navy, it would not have been available to a separate Scotland? Regrettably, the Minister seems not to have placed a firm order for the Type 26 frigates to be built on the Clyde. Will he confirm that that will not happen until we know the result of the referendum? Will he also confirm that work is being transferred from Portsmouth and England to Scotland in order to bridge the gap between the end of the aircraft carrier building programme and the beginning of the Type 26 programme?
Mr Hammond
As I have just said to the hon. Member for Portsmouth South (Mr Hancock), the company intends to transfer three blocks to the Clyde so that the flow of work will be continuous until we are ready to cut steel on the OPVs at the end of 2014.
We will not repeat the mistake that the last Government made with the aircraft carriers of placing an order for a ship that has not yet been designed. That would be like signing a blank cheque to BAE Systems. Much as I admire and appreciate that company’s contribution to both our economy and our defence, I have no interest in signing blank cheques to it.
Mr Gary Streeter (South West Devon) (Con)
I congratulate my right hon. Friend on the skilful way in which he has reshaped the aircraft carrier contract and protected the skills base in the United Kingdom. Will he confirm that, in shaping the special package of measures for Portsmouth—which I support—he has not taken work away from Plymouth dockyard, including the maintenance of ships or future base-porting of the Type 26?
Mr Hammond
Funnily enough, I anticipated the possibility of that question from my hon. Friend. I can assure him that nothing that I have announced today will have any direct impact on Plymouth.
Angus Robertson (Moray) (SNP)
I thank the Secretary of State for giving me advance sight of his statement, and commend him for making it today. It was originally to be made tomorrow, but I think it right for the shipyard workers and their families to have certainty, and I know that he has done the right thing.
I am sure that the Secretary of State’s thoughts are with all shipworking families, many of whom are learning just a few short weeks before Christmas that their jobs are on the line. Earlier today, BAE Systems stated that the appropriate place for frigates to be built was Glasgow. Does he agree with that?
Mr Hammond
I am grateful to the hon. Gentleman, because his question has prompted me to acknowledge that my statement was made today in response to media stories which had created speculation that needed to be dealt with. I apologise to the Opposition for having to make the statement on an Opposition supply day.
I am obviously not responsible for the statement made by BAE Systems, but the company’s judgment, on the basis of value for money, is that the Clyde is the best place in which to build the Type 26 global combat ship, and the MOD concurs with that judgment.
Sir Nick Harvey (North Devon) (LD)
This is a sad day for Portsmouth, given its proud heritage of supporting the Navy, and the decision has been a bitter pill for the workers there and elsewhere to swallow. We owe them all our thanks. However, was there not a certain inevitability about the coming of a day on which these painful judgments would have to be made? Oversupply of naval shipbuilding capacity is a problem with which successive Governments have had to deal, and the TOBA gave BAE Systems the opportunity to make a commercial judgment. Will the Secretary of State confirm that the judgment was commercial rather than political? While I can see the elegance of placing the OPV contract on the Clyde, will other British shipyards get the opportunity to bid for this? It is a small enough job that plenty of them would be able to handle.
Mr Hammond
No, the contract will be placed under the overall umbrella of the terms of business agreement we have with BAE Systems, and, as I made clear in my announcement, we are effectively ordering the OPVs to soak up money we would have been paying in any case to have these yards standing idle, and in doing so significantly de-risking the start-up of the Type 26 programme by making sure the skills base remains in place in Glasgow.
I share my hon. Friend’s view, however, that there is a certain inevitability about the announcement we have made today. Governments have put off the moment, and the carrier order represented a pretty massive 130,000-tonne postponement of the moment, but we cannot alter the inevitable fact that we do not have a large enough Navy to sustain a multi-yard shipbuilding industry in the UK.
Mr John Denham (Southampton, Itchen) (Lab)
The record will show that the last Labour Government secured south-coast shipbuilding with a share of the destroyer order and then of the carrier programme. Today’s crisis has been coming for some time. Does the Secretary of State’s statement not confirm both that no effort has been made by the Government in the past three years to win extra orders for the Portsmouth shipyard and that work will be transferred from Portsmouth to other shipyards, hastening its closure? Does the Secretary of State understand why many in southern England feel they have been sold down the river today by a Government whose attention has been elsewhere?
Mr Hammond
No, and, frankly, travelling around the world in support of UK defence exports as I do, I should not be lectured by someone who was a Minister in the last Government, which completely neglected the UK defence industry—failed to travel and failed to engage with potential customers around the globe. That is a completely ludicrous suggestion from the right hon. Gentleman. It is not the Government’s job to win orders, whether for warships or aircraft. It is the Government’s job to support the industry in doing what it has to do, and we have been doing just that, and I can tell the right hon. Gentleman that I myself and my colleagues have visited countries as diverse as Brazil and Australia in pursuit of naval shipbuilding orders to support those yards.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
A strong Navy is good for both Portsmouth and Plymouth. May I urge my right hon. Friend to ensure that any changes to the TOBA will not hamper or do damage to Devonport in my Plymouth, Sutton and Devonport constituency? Will he also look at whether the other vessels that are being commissioned could potentially be base-ported in Plymouth?
Mr Hammond
No decision has yet been made about the location of the base port for the vessels I have announced today. Just to be clear, what this announcement will do is effectively suspend the TOBA for the duration of the period when the OPVs are being built and then see its final demise upon the placing of the order for Type 26 global combat ships. I hope we have seen the very last TOBA payment being made to the industry by the MOD.
Katy Clark (North Ayrshire and Arran) (Lab)
Politics is about choices, of course. What impact has the funding of the Trident replacement had on the decisions that have led to the announcements of job losses today?
Mr Hammond
None. The Trident programme is a capital programme. The constraining factor in terms of the Royal Navy is far more around operating costs and crewing than the capital costs of platforms. We have to make sure we have a Navy that is sustainable and that we can afford to operate and crew in an increasingly tight market for engineering skills, where we often have to pay premium rates to get people with the appropriate skills. There is no point in building platforms we cannot afford to put to sea.
Mr Andrew Tyrie (Chichester) (Con)
The Secretary of State appears to have resolved a massive problem that he inherited, and he deserves our congratulations for that, although the closure of the Portsmouth yards will be a big blow for many of my constituents. Can he give an initial estimate of the likely scale of the compulsory redundancies and will he reiterate the assurance that he has already given once, that none of those jobs were lost to keep jobs in Scotland at a politically sensitive time?
Mr Hammond
I thank my hon. Friend for his comments. On the last point, the analysis of where best to build the Type 26 ships, which will have to be built to a very tight budget and a very tight timetable, was made by the company—endorsed by the MOD, but made by the company. I can tell him, as I think I said in the statement— or, certainly, as the Prime Minister said earlier on—that 940 job losses are anticipated at Portsmouth between now and the end of 2014 as a result of the decision to end shipbuilding. About 11,000 jobs in the dockyards and the supporting infrastructure will remain.
Sammy Wilson (East Antrim) (DUP)
There is a great affinity, of course, between Northern Ireland and Scotland, and many people will feel for those in the shipbuilding industry who are losing their jobs. Will the Secretary of State give us an assurance that, through procurement policies and the promotion of UK industry, everything will be done to keep the shipyards in Scotland viable, and does he agree that this decision shows that Scotland is far better-off within the United Kingdom than in having some kind of pseudo-independence?
Mr Hammond
The hon. Gentleman is exactly right about that last point. If Scotland were not a part of the United Kingdom, I would certainly not have been able to make the statement and announcement I have made today.
Mr Mark Hoban (Fareham) (Con)
This is a sad day for Portsmouth, and many of my constituents work in the dockyard. My right hon. Friend will know that the shipbuilding facility is in the heart of the naval dockyard. Is it possible to look at the footprint of the naval dockyard to see how more land might be released from it to expand the commercial port and create opportunities for jobs and growth in the commercial sector?
Mr Hammond
I am grateful to my hon. Friend, and he is right that the shipbuilding hall that will now become unused as a result of the announcements today is inside the secure dockyard perimeter. There have been discussions about how that could be carved out, and how security arrangements could be changed to accommodate its use. This is, of course, primarily a matter for the company that owns the shipbuilding hall, but I can confirm to my hon. Friend that we are looking at all options to support employment-generating activity both in the dockyard and on MOD land adjoining it.
Mr Frank Roy (Motherwell and Wishaw) (Lab)
This is a catastrophic day for the families of 835 shipbuilders, and the reality is that there will be more job losses. How many jobs does the Secretary of State estimate will be lost in the service sector for the shipyards?
Mr Hammond
I have not got an estimate of the number of jobs in the wider economy, but I can say this to the hon. Gentleman: when the carrier project was announced and the Type 45 destroyers were being built, everybody—including, I believe, the hon. Gentleman—understood that we were benefiting from a surge of work that was very welcome but that was never going to be sustainable in the long term. Of course the day when that work comes to an end is regrettable, and the consequent redundancies are difficult, but this is not something that has come unexpectedly; it is something that has long been understood and anticipated, and the announcement we have made today is good news for the Clyde, and I would have thought the hon. Gentleman would have wanted to welcome it.
Dr Julian Lewis (New Forest East) (Con)
Despite the Defence Secretary’s criticism of the contracts, does he accept that the restoration of carrier strike capability to the fleet is an absolute strategic necessity, and does he also accept that one reason for the loss of Portsmouth as a shipbuilder is that the last Government reduced the total number of frigates and destroyers from 35 to 19—and, regrettably, this Government have done nothing to reverse that?
Mr Hammond
My hon. Friend is factually correct: the last Government did, indeed, reduce the total number of destroyers to be built in the Type 45 programme, largely because of the hole that was opening up in the aircraft carrier budget due to the delay in the project that I mentioned earlier. He is right, too, that we can talk all day about the history of the placing of the order for these two very large ships—the largest ships the Royal Navy will ever have had—but the fact is that we are getting them: they are being built, and we are proud of them and we are going to make excellent use of them in projecting UK naval maritime power around the world.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
The Secretary of State has repeatedly said that this day was expected, so what work has been done to look at diversification into other industries, particularly in the marine renewables sector, for these skilled workers? To follow up the point made by my hon. Friend the Member for Motherwell and Wishaw (Mr Roy), if that estimate of the knock-on effect has not been obtained, when will it be obtained?
Mr Hammond
As the hon. Lady probably knows, estimates of effects on the wider economy are never precise, although estimates can be made. I am happy to write to tell her our best estimate, but it will be just that—the best estimate. She will know that in Scotland the responsibility for wider industrial support and the promotion of employment opportunities rests with the Scottish Government, and I would expect them to be actively engaged in this programme.
George Hollingbery (Meon Valley) (Con)
I thank the Secretary of State for his statement, although of course it is not welcome news for a number of my constituents who work at the Portsmouth dockyard. Mr Speaker, I hope that you will allow me a moment to pay tribute to the efforts of my hon. Friend the Member for Portsmouth North (Penny Mordaunt), who has worked tirelessly on this subject. She has spent an enormous amount of time trying to secure the future of shipbuilding in the UK and at meetings I have attended with her it seems that she has secured at least some change, in that the importance of the commitment to the new offshore patrol vessels should not be underestimated. She and I argued not only that we should build more warships, but that there should be regeneration support for the Solent area should the worst happen. We have got the former and it sounds as though we will get the latter. If so, will the Secretary of State ensure that the many small and medium-sized enterprises based in places such as my constituency and the others around Portsmouth are also able to access such support?
Mr Hammond
First, I am happy to join my hon. Friend in paying tribute to the tireless work that has been done by my hon. Friend the Member for Portsmouth North (Penny Mordaunt), who, since I have known her, has talked about almost nothing but the shipbuilding industry in Portsmouth. Let me confirm for him that we will do everything we can to ensure that the support package for Portsmouth will be put together in a way that genuinely diversifies the local economy. That is what is needed now, and that includes support for SMEs. I will make sure that my right hon. and hon. Friends in the Department for Business, Innovation and Skills are aware of his comments.
Thomas Docherty (Dunfermline and West Fife) (Lab)
Given that BAE Systems has announced that there will be job losses at Rosyth and given the Secretary of State’s wider comments about ship maintenance, I am sure that he will be happy to have an urgent meeting with one of his Ministers and me to discuss the future of Rosyth. May I press him to say what will happen if Scotland chooses to become a separate nation in September next year? Will the Type 26 order stay on the Clyde?
Mr Hammond
The Type 26 order will not be placed until the design is mature, which will not be until towards the end of next year, and so the hon. Gentleman’s question is premature. A significant number of workers who are nominally based on the Clyde are being bussed on a daily basis to Rosyth to boost the work force during the carrier assembly phase, so the announcement made by BAE Systems should be read in that context. My understanding from Babcock is that the yard at Rosyth has a bright future with private sector work—offshore work—as well as with the programme to assemble both the Queen Elizabeth and the Prince of Wales, which itself will keep the yard busy until 2020.
Sir Edward Leigh (Gainsborough) (Con)
Has Whitehall finally learned the lessons from what, from a public accounts point of view, must be one of the worst politically driven, stop-start contracts in our history? Will the Secretary of State assure us that never again will the Treasury insist on delaying a contract for one or two years to save money and end up with a cost of hundreds of millions of pounds more? Just so that the taxpayer knows exactly how much this has cost him, will the Secretary of State repeat what the carriers were supposed to cost originally and what they are now costing us, and when the planes were supposed to be flying operationally from them and when they will actually fly?
Mr Hammond
It is always a brave person who says that Whitehall has learned the lessons. I can certainly give my hon. Friend this commitment: as long as I am Secretary of State for Defence, we will not be placing any contracts for things that we have not designed and we will not be driving cost into projects by making announcements of delay that are simply driven by the exigencies of poor budgeting and poor financial control. He asked me to repeat the numbers. When the project was announced in 2008 it had a budget line attached to it of £3.6 billion, but of course when the previous Government first proposed the aircraft carrier project the budget was much less than that, at £2.25 billion. Nobody I have met, in the industry or in the Navy, ever believed the project could be built for £3.6 billion. There was a degree of fantasy accounting going on, the reasons for which I will leave my hon. Friend to speculate upon.
Pete Wishart (Perth and North Perthshire) (SNP)
More than 800 jobs have been lost across Scotland today as a result of the Secretary of State’s announcement. He is absolutely right to say that we cannot play politics with this and we have to put aside the constitutional issues. One way in which he could do that, if he is sincere and honest about it, is to say today that he will respect the decision of the people of Scotland next year, and that regardless of which way they decide, he will honour all existing work and contracts.
Mr Hammond
What the hon. Gentleman has not heard is that the contract for the Type 26 cannot be placed until the design is mature, and that will not be until the end of 2014. The Scottish National party is nothing if not glass half empty; what I have actually announced today is that thousands of jobs have been saved, but he chooses to present it as hundreds of jobs have been lost.
Tracey Crouch (Chatham and Aylesford) (Con)
Shipbuilding in Chatham ended 30 years ago and although the dockyard is a diverse business hub today, its closure left scars of devastation and deprivation on the town. When the Secretary of State is putting together his support package for the areas sadly affected by today’s announcement, will he look at the history of the closure of Chatham dockyard, learn the lessons and make sure that proper investment is made to ensure that these areas are not blighted as, unfortunately, Chatham was blighted?
Mr Hammond
I would be very happy to look at the history of Chatham. As my hon. Friend says, Chatham’s historic dockyard is now a thriving and vibrant location, attracting investment and employment, and that is what we want to make sure also happens in Portsmouth. Of course the point about Portsmouth is that it will continue to be a major naval port, with large-scale maritime support and maintenance activity going on; it will not become a historic port in the sense that Chatham has become one.
Dr Alan Whitehead (Southampton, Test) (Lab)
Does the Secretary of State accept that shipbuilding on the south coast has already been consolidated by the removal of defence-related shipbuilding from Southampton to Portsmouth, by agreement? Does he also agree that the contract for parts of the carrier to be built in the naval dockyards in Portsmouth was very much part of that consolidation? Does he therefore accept that the removal of the aircraft parts manufacturing will be regarded as a substantial betrayal of all that consolidation effort? Does he consider it wise strategically to extinguish shipbuilding permanently on the south coast, leaving just one site for UK defence-related shipbuilding?
Mr Hammond
The hon. Gentleman is right to say that consolidation of the shipbuilding industry is not a single event; it is a process that has been going on for decades, and the absorption of VT by BAE Systems was part of it. I am afraid that the inexorable logic, given the size of the Royal Navy and the budget we have for building new ships, is that we can support only one naval shipbuilding location in the United Kingdom—anything else is fantasy economics.
Mr Andrew Turner (Isle of Wight) (Con)
One strength of the Isle of Wight’s economy is its historic involvement with shipbuilding; a number of my constituents work in the Portsmouth dockyard and many companies on the island are part of the supply chain. What assessment has been made of the impact of this announcement on the Isle of Wight’s economy?
Mr Hammond
I must confess to my hon. Friend that I have not assessed the impact on the Isle of Wight economy specifically. I know, however, that the local enterprise partnerships and local authorities have been aware of these challenges for some time. If it will help my hon. Friend, I will dig out what assessments have been made by others and draw his attention to them.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
Successive UK Governments have failed Scotland and have failed shipbuilding, against a background of more than 100 ships being built in Norway last year. The little that remains in Scotland, as we know from Lance Price’s diaries, is due only to a strong SNP and our independent state of mind. Does the Secretary of State agree with that reality?
Mr Hammond
No. The SNP’s policies would drive shipbuilding out of Scotland finally and would be the last nail in the coffin of the industry. Today, we have announced that the Clyde will effectively become the focus of the whole of the UK’s warship building industry, that we will move the remaining carrier blocks around to support that industry, and that we will place new contracts to support the yard and ensure that it maintains the skills to build the Type 26 class, and all the hon. Gentleman can do is stand up and carp. I think that people will draw their own conclusions.
Mr Tobias Ellwood (Bournemouth East) (Con)
Labour claims to support the British shipbuilding industry but, if memory serves, it was Labour that cut the Type 23 fleet by three, cut the Type 45 fleet by six orders and slowed down the new carrier order. Does the Secretary of State agree that if we are to assist our shipyards, one way to do it is to commit to operating both aircraft carriers rather than mothballing one of them in Portsmouth harbour?
Mr Hammond
Clearly, that decision will be made in the 2015 SDSR. My personal view is well known: I believe that having spent the best part of £3 billion on building the carrier, the £70 million-odd a year that will be required to operate it looks like good value for money.
Jim Shannon (Strangford) (DUP)
I welcome the Secretary of State’s statement and his obvious commitment to shipbuilding. What assistance will there be to encourage the retention of shipbuilding skills through apprenticeships and will the opportunity for such apprenticeships be available to all the regions of the United Kingdom of Great Britain and Northern Ireland?
Mr Hammond
I cannot answer for any wider initiatives that my right hon. and hon. Friends in the Department for Business, Innovation and Skills might be introducing. The deal to which I have alluded today is a city deal that specifically relates to Portsmouth and Southampton, and therefore by definition it will make funding available for job creation and regeneration only in those areas.
Steve Brine (Winchester) (Con)
I thank the Secretary of State for his statement. He knows that there will be grave concern in my Winchester constituency about the shipbuilding element. Those further down the supply chain will be listening to his statement keenly, no doubt wanting to ask many questions and, I must say, given what is happening in Hampshire, choking on their lunch hearing the SNP representatives complaining about the announcement. May I echo the other comments that have been made and urge him to leave no stone unturned not just in Portsmouth but across the wider region in the pursuit of regeneration of the yard and the jobs it supports, even as far up as Winchester?
Mr Hammond
As a south-east MP, I understand well that not all of the south-east is affluent with high employment. There are areas that depend on specific industries which are as vulnerable as other areas anywhere in the country. I will endeavour to ensure that the points that my hon. Friend has raised are taken fully into account.
Peter Luff (Mid Worcestershire) (Con)
I commend the Secretary of State, the Minister for defence equipment—the Under-Secretary of State for Defence, my hon. Friend the Member for Ludlow (Mr Dunne)—the Chief of Defence Matériel and all those involved for making the best of a very difficult situation. Will my right hon. Friend clarify the purpose and capabilities of the three new very welcome offshore patrol vessels?
Mr Hammond
They will be more capable than the existing River class, as they will be able to take a larger helicopter and will be 10 metres longer. They will be able to undertake a full range of duties, including not only fishery protection but the interdiction of smuggling, counter-piracy operations and the protection of our overseas territories.
Mr Julian Brazier (Canterbury) (Con)
I, too, pay tribute to my hon. Friend the Member for Portsmouth North (Penny Mordaunt) for her doughty struggle to get a good city deal for her constituents and for the vision for the OPVs that to my knowledge she has been outlining for at least two years. Will the Secretary of State confirm that the OPVs will to some extent provide a force multiplier for our frigate fleet? Some of the roles carried out by frigates do not require full frigate capability, so the OPVs could be a way of partially expanding that capability.
Mr Hammond
At the risk of causing her to blush, I am happy once again to praise my hon. Friend the Member for Portsmouth North. I should say to my hon. Friend the Member for Canterbury (Mr Brazier) that no decision has yet been taken about whether the old River class vessels will be retired after the new OPVs are brought into service. That decision will have to be made in SDSR 2015 based on the ongoing budget challenges of maintaining additional vessels at sea. That will be a decision for the Royal Navy.
Bob Stewart (Beckenham) (Con)
Most people suggest that our biggest defence capability is not in maritime patrol aircraft. I am no expert—although I can see that there are many naval experts in the Chamber—but could this new River class OPV, with its enhanced length and helicopter deck, also be used to cover the gap between 240 nautical miles, the distance a land-based helicopter can go out from our shores into the Atlantic, and the 1,200 nautical miles for which we are treaty responsible? Could it perhaps play some sort of MPA role in that area?
Mr Hammond
I have not looked at the specification in detail, but I do not envisage that the thing will be able to take off and fly. I understand the point that my hon. Friend is making, however, and we are conscious of the gap in maritime patrol aircraft capability. It is one issue that will be addressed in SDSR 2015 and we will manage the gap in the meantime through close collaboration with our allies. We are considering all the options, including, potentially, the use of unmanned aerial vehicles in a maritime patrol role in the future.
Neil Carmichael (Stroud) (Con)
I congratulate the Secretary of State on salvaging a sustainable shipbuilding future for this country from the wreckage left by the previous Government. Looking to the future, and bearing in mind his comments about engineering, does he agree with me that we should be encouraging young people to think about entering the defence services as engineers to develop new technologies, including in electronics and composite materials?
Mr Hammond
Absolutely. I must say to my hon. Friend and for the record that there are huge opportunities available across the defence industry and in the defence establishment for young people with engineering skills. I am glad to say that all the evidence suggests that my right hon. Friend the Secretary of State for Education’s reforms are having the effect of reawakening the interest of young people in the STEM—science, technology, engineering and maths—subjects. Increasing numbers are taking them up and that is good news for the future of British industry.
Jason McCartney (Colne Valley) (Con)
David Brown Gear Systems from Lockwood in my constituency has secured a design contract for the new Type 26 global combat ship. As well as confirming the new time scale for the Type 26s, will my right hon. Friend say when we will know how many vessels will be ordered?
Mr Hammond
I have not confirmed the new timetable for the Type 26. It was always our intention that we would mature the design fully before we placed a contract, in order to avoid the mistakes of the past. The current planning assumption is that we will order 13 vessels.
Mr Philip Hollobone (Kettering) (Con)
When we talk about aircraft carriers, we tend to focus on their construction, but, of course, when they become operational they will require trained crews. With which navies are we co-operating to train the requisite personnel and might there be expanded opportunities in places such as Portsmouth for onshore training in the run-up to deployment?
Mr Hammond
A certain amount of training can be done synthetically onshore, but I am grateful to my hon. Friend because he gives me the opportunity to reiterate publicly and on the record our gratitude to the United States navy and the United States marine corps, who are assisting us in keeping alive our carrier skills during a period when we are not operating fixed-wing aircraft off UK carriers. We have pilots and deck officers embedded in the US navy and the US marine corps and we will develop our fleet of F-35B aircraft, with the first operational squadron based in the United States at Eglin air base. It will return to the UK in 2017 as a trained squadron ready to stand up immediately on its arrival. Without that support from the US, we would be struggling to get back into the carrier business. We should be immensely grateful.
Oral Answers to Questions
Lord Hammond of Runnymede Excerpts(10 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Ian Lavery (Wansbeck) (Lab)
13. What assessment he has made of the level of recruitment to the reserve forces in 2013 to date.
The Secretary of State for Defence (Mr Philip Hammond)
May I first welcome the hon. Member for Gedling (Vernon Coaker) to his new role and congratulate him on his appointment? I hope that, in the interests of Britain’s armed forces, we will be able to have a constructive relationship, as he quite properly holds me to account for the decisions of this Government, and I hold him to account for the decisions of the last one.
When the previous Administration took office in 1997, the Territorial Army was more than 50,000 strong. By the time they left office in 2010, that figure had halved. That pattern of decline has been arrested, and the strength has now been stabilised. Recruitment figures for the first three quarters of 2013 are due to be published by Defence Analytical Services and Advice on 14 November. This is a new data series, and quarterly figures will be published thereafter.
Ann McKechin
I declare an interest as a member of the Strathclyde area committee of the Lowland Reserve Forces and Cadets Association.
Most people would describe the current recruitment target as challenging and difficult to meet. There appears to be a lack of clear strategy on recruiting more women and more people from the black and minority ethnic population in order to achieve that target. Will the Secretary of State explain how he intends to disseminate best practice in those areas?
Mr Hammond
I am grateful to the hon. Lady for raising that important point. At the moment, the armed forces recruit about 8% of their strength from women, who make up about 50% of the target age group population, and just 3% of their strength from black and ethnic minority communities, which will make up about 24% of the target age group population by 2020. We have to do better in those areas, and one of the challenges that we have set for the armed forces, and for the Army in particular, is for them to work out how they can pitch an offer that is more attractive to female and black and ethnic minority recruits, and specifically how they can use female recruits more effectively within Future Force 2020.
Mr Hammond
The reconfiguration of the Army, including the changing role of reservists and the changing structure of the Army, are not simply about trying to recruit reservists to replace disbanded infantry battalions. Most of the reservists we recruit will be specialists, rather than having a light infantry role. The White Paper that I published earlier this year set out a plan to reverse the long-term decline of the Army Reserve, redefining its role and setting out details of improved equipment, training, terms and conditions. Under the plan, we will grow the Army Reserve to a trained strength of 30,000 by 2018. I can also tell the House that, although it is still early days, a snapshot of data for the recruiting campaign that started on 16 September is quite positive. We received 1,576 applications to join the Army Reserve during the first four weeks of the campaign, and 380 were received last week. It is very early days, but those early signs are quite promising.
Mr James Gray (North Wiltshire) (Con)
I congratulate the Secretary of State on the encouraging early signs in the recruiting campaign. There will come a time when it will become plain either that he will have achieved the Future Force 2020 ambition of replacing regular soldiers with reservists or that he has not done so and will have to change his plan. When will that date be?
Mr Hammond
The Army is in the final stages of setting out a properly thought-through recruiting target set, defining the number of recruits needed during each period of time in order to deliver the trained output required if we are to achieve our 2018 target. As soon as I have those data from the Army in final form, I will publish them. They will set our target curve, and I expect to be held to account if we go significantly off it.
Sir Menzies Campbell (North East Fife) (LD)
I hope that my right hon. and learned Friend will forgive me if I press him a little further on this topic. There is a lot of anecdotal evidence that the targets are proving difficult to achieve. Given that the target of 30,000 is fundamental to the success of the restructuring of the Army, what contingency plans are now in place, and what incentives are being offered to individuals—and their employers—to become part of the Army Reserve?
Mr Hammond
I am grateful to my right hon. and learned Friend. Unfortunately, I am not his “learned Friend”: I am used to being called an accountant, but not a lawyer. I can reassure him that a variety of measures are in place to incentivise recruitment to the reserves; in particular, a bonus to attract those leaving the regular Army into volunteer reserve service has proved very successful, with significant upturn in the translation rate over the past few months. There will be a range of further incentive measures that we can introduce as and when it is necessary in order to deliver the targets which I shall publish shortly.
Vernon Coaker (Gedling) (Lab)
I thank the Secretary of State for his kind remarks, which I greatly appreciate. We will, of course, work with him where appropriate. I welcome to her post my Nottinghamshire colleague, the Under-Secretary of State for Defence, the hon. Member for Broxtowe (Anna Soubry), who I understand is the first woman Defence Minister in the House of Commons, which is a great credit to her.
The Government need to explain to the House and the country today what is happening with their programme of reform to the armed forces. I declare an interest, as my soon-to-be son-in-law serves in the Territorial Army. A recent high-level memo from the Ministry of Defence states clearly that there are clear problems and worries over Army reform and that recruitment targets are likely to be missed. That has caused senior military figures, Members of the House and the armed forces community to raise serious concerns. Can the Secretary of State assure us that the nation’s security will not be compromised and that a reduction in the regular Army will take place only if adequate uplift in the reserves is achieved?
Mr Hammond
I am grateful for the hon. Gentleman’s question. The memo from which he quoted did not say what he claimed it said. It said that in the absence of any action to stimulate recruitment we would face a very difficult challenge. We are now taking precisely that action. The hon. Gentleman may have seen an article that came from an interview with the Chief of the Defence Staff, in which he made it clear that he was very confident that we will deliver these numbers. I share that confidence.
Vernon Coaker
We look forward to the Defence Secretary publishing that memo so that we can all see what it actually said. Is not the problem one of credibility? The Government cannot get their figures right. Just today, we learned that the cost of new aircraft carriers has increased by £800 million to £6.2 billion. That is after the £100 million wasted last year on reversing the decision on fighter jets. A few months ago, the Defence Secretary told us he had balanced the books at the MOD, and then just a few weeks ago we were told that there was an £1.8 billion underspend. How can the British public have confidence that the Government will meet their target for recruitment to the reserves when they have got so much else wrong? When will the Defence Secretary take some responsibility and stop blaming everyone else but himself?
Mr Hammond
With that last remark, the hon. Gentleman has probably pre-empted my response. If I were him, I would tread a little more carefully around the issue of the cost of the aircraft carriers—until he hears, in due course, what precisely we have done. A huge amount of work is going on across the Army around the reserves recruitment initiative. There are many different strands to this work. I have made a commitment in the past, which I will repeat today, to be as transparent as possible with Parliament as this campaign gets under way. I remind the hon. Gentleman, however, that we are just five weeks into a five-year campaign to halt and reverse the attrition in our reserves that the previous Government oversaw.
Patrick Mercer (Newark) (Ind)
In my experience, inquiries about recruiting by no means turn into enlistments. Everything we have heard suggests that the recruiting for the reserves will be difficult. Was it therefore correct for our regular forces redundancy programme to have gone ahead with the urgency that it did?
Mr Hammond
Perhaps my hon. Friend did not hear me earlier. I was not talking about inquiries; I was talking about 1,576 applications to join the Army Reserve in the first four weeks of the campaign. The simple fact is that if we are to live within our budgets and restructure the Army for its tasks in the future, the decisions we made about the size and shape of the regular Army must go forward, and the recruitment and training of 30,000 Army reserves must happen. We will make sure that they do so.
Mr Speaker
Progress on the first question was desperately slow; we really need to pick up.
Mr Jim Cunningham (Coventry South) (Lab)
10. What recent assessment the Government have made of how many reservists need to be recruited as part of the Army Reserve plan to replace regular troops from the disbanded units.
The Secretary of State for Defence (Mr Philip Hammond)
I should make it clear to the hon. Gentleman, as I have already this afternoon, that we are not recruiting reservists simply to replace regular troops from disbanded units. We are changing the structure and functions within the Army, creating a whole force of regulars, reservists, civilians and contractors that will make the best use of our resources and harness the talents across the whole of UK society. As I have already said, the Army is finalising a set of recruiting targets that will at different points over the next four years deliver the numbers into training that we need to achieve the challenging goal of 30,000 trained reservists by 2018.
Mr Cunningham
Given that the Secretary of State is constantly moving the goalposts and that we know that he will not recruit the number of reservists that he needs, why does he not reinstate the two battalions of the Royal Fusiliers? That will give him the manpower he needs, so why does he not retrain those people?
Mr Hammond
I do not know where the hon. Gentleman gets his information from, but as I said earlier we are five weeks into a five-year recruiting campaign, and I do not see anything about his track record that would lead me to give any particular credence to his prediction about how successful that campaign will be.
Mr Julian Brazier (Canterbury) (Con)
In supporting my right hon. Friend’s robust stance, may I urge him to look into the truly staggering level of delays and mistakes in the Army enlistment process? Will he urge the Army recruiting group to prove it is serious by at least getting Army recruiting offices open on evenings or at weekends?
Mr Hammond
I am grateful to my hon. Friend for that question and freely acknowledge that there have been teething problems with the IT support systems for the recruiting campaigns for the Regular Army and Army Reserve. I was in the Army recruiting centre myself last week with the Chief of the General Staff. This matter has the highest level of attention, both ministerial and military, and a number of initiatives will be implemented over the next few days and weeks that I expect to deliver a significant improvement in the areas that my hon. Friend highlights.
Mr Russell Brown (Dumfries and Galloway) (Lab)
I suspect that we will experience regional variations in recruitment, with it being more difficult in some localities than in others. In answer to Question 1, the Secretary of State mentioned that he will produce certain data. Among those data, will there also be an indication of where there are difficulties and what extra efforts are being made at those locations?
Mr Hammond
The targets that we will publish will be national, but the hon. Gentleman is right that there will be different recruiting challenges in different parts of the country. The job for us is to ensure that the Army recruiting centre, the senior officers responsible for it and their recruitment partners, Capita, are agile enough to respond to the data coming in from the front line in the recruitment campaign and flex that campaign accordingly. The plan will not be implemented without change over five years; it will be highly responsive and we will monitor it regularly.
Sir Edward Leigh (Gainsborough) (Con)
As the Secretary of State has confirmed again today that failure to achieve the reservist recruitment numbers is not an option, surely there is now no difficulty in his repeating the pledge given by his predecessor that the Regular Army will not be cut until those reservists are recruited.
Mr Hammond
Any such pledge would be an unfunded spending commitment. We must live within the envelope of resources that we have available, and we have to restructure the armed forces to deliver the configuration we need for Future Force 2020. That means drawing down some regular units and providing support from reserve units, civilians and contractors for some tasks that were previously done within the Regular Army.
Julian Smith (Skipton and Ripon) (Con)
11. With reference to the Army basing review, what recent discussions he has had on the closure of Claro barracks in Ripon; and if he will make a statement.
Joan Walley (Stoke-on-Trent North) (Lab)
14. What contracts for recruitment of armed forces personnel have been outsourced to date; and what arrangements are in place to monitor such contracts.
The Secretary of State for Defence (Mr Philip Hammond)
The Ministry of Defence has not outsourced the recruitment of armed forces personnel, but the Army has entered into a recruiting partnership with Capita, and once the contract is fully operational, payment will be linked to the number of recruits required by the Army. I have already acknowledged that there have been teething problems with the IT support for the contract, but the issue has the attention of those at the highest levels in the Army and in the ministerial team.
Joan Walley
We have heard a lot this afternoon about recruitment and how critical it is to the White Paper, and how difficult it will be to meet the target that has been set. Given the real difficulties with recruitment on the ground—I am referring to unanswered e-mails, lack of communication between departments and lost forms—will the Secretary of State hold an urgent investigation into the way that Capita plays its part in the joint venture, with particular reference to candidate support managers?
Mr Hammond
Yes; we are already doing this. The initiatives that I mentioned to my hon. Friend the Member for Canterbury (Mr Brazier) are designed to deal with specific problems with the way in which the website interacts with mobile devices, and the way that we deal with medical records and with inducting candidates through the interview process. We will reintroduce, on a pilot basis, the idea of a face-to-face weekend process that deals with all the procedures in one hit. If that is successful, we will make it the default option for 2014.
Andrew Bridgen (North West Leicestershire) (Con)
What discussions has my right hon. Friend had with large public and private sector employers to see how they can better support our reservists to improve the recruitment and, equally importantly, retention of our volunteers?
Mr Hammond
That is absolutely the key to the programme. In the public sector, central Government have made a generous offer of an additional 10 days’ paid leave to reservists in the central Government service, so that they can take those days for training. Many major private companies have already signed up to the corporate covenant, and more are considering doing so. There are excellent examples of companies working with us to reach out to their employees, and to make a joint proposition to them, so that employees join the reserves in a way that is supported by their employer, not done behind the employer’s back.
Justin Tomlinson (North Swindon) (Con)
15. What new capabilities the armed forces are investing in to ensure the UK can properly defend itself from cyber-attacks.
Dr Julian Lewis (New Forest East) (Con)
17. What assessment he has made of the conclusions and utility of the Trident alternatives study.
The Secretary of State for Defence (Mr Philip Hammond)
I can tell my hon. Friend that the review demonstrated that no alternative system is as capable as a Trident-based deterrent, or as cost-effective. As to the utility, carrying out the review fulfilled a Government commitment but did not produce any unexpected conclusions.
Dr Lewis
Yes, well, it is good to know that the review came to such a predictable and predicted conclusion, but what does my right hon. Friend think of the fact that our coalition partners, the Liberal Democrats, have not adopted any of the options from the review but have decided instead to come off continuous at-sea deterrence and have only two Trident submarines? This was rejected as unworthy of consideration by the review, but now that even the Liberal Democrats want two submarines, should we take up the suggestion of the shadow armed forces Minister, the hon. Member for North Durham (Mr Jones), and try to sign a contract for them?
Mr Hammond
As my hon. Friend suggests, the reason a two-boat solution was not considered in the review is that it did not meet the hurdle test of providing a credible deterrent. I am actually rather more interested in the views of official Opposition Front Benchers on this matter than the views of our coalition partners. I welcome the fact—[Interruption.] Hang on a minute. I welcome the fact that the first visit in office by the hon. Member for Gedling (Vernon Coaker) was to Barrow-in-Furness, the home of Britain’s submarine fleet.
Mr Kevan Jones (North Durham) (Lab)
On the alternatives review, at Defence questions on 2 September the Secretary of State told my right hon. Friend the Member for Delyn (Mr Hanson), who had asked about costs:
“If he submits a written question to me, I will ask the Department to produce the best estimate”.—[Official Report, 2 September 2013; Vol. 567, c. 5.]
I have now tabled a number of parliamentary questions, but the Government seem to be refusing to produce a figure. May I gently ask the Secretary of State when he will produce the answer to my questions?
Mr Hammond
I am rather glad that the hon. Gentleman asked me that question. Let me tell him that the Cabinet Office has the lead on this matter because it was a Cabinet Office review. Any question that is phrased in general terms will be answered by the Cabinet Office; were a question to be phrased in very specific terms as to Ministry of Defence resources, then it would fall to me to answer it.
Mr David Heath (Somerton and Frome) (LD)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Defence (Mr Philip Hammond)
My first priority remains the success of operations in Afghanistan. Beyond that, my priorities are to deliver the sustainable transformation of the Ministry of Defence, to build confidence within the armed forces in the Future Force 2020 model, to reinforce the armed forces covenant, to maintain budgets in balance, and to deliver equipment programmes on time so that our armed forces can be confident of being properly equipped and trained.
Mr Heath
As we move towards a weekend when we honour the fallen, and also, I hope, bear in mind those who currently serve and veterans of our armed services, does the Secretary of State wish to congratulate the 80% of councils that have now signed up to the community covenant? Will he also follow up the one in five local authorities that have not done so? Surely that is the least they owe to those who serve in our armed forces.
Mr Hammond
I am grateful to my hon. Friend. The Under-Secretary of State, my hon. Friend the Member for Broxtowe (Anna Soubry), reminds me that 372 local authorities have signed up, and that is well over 80%. We anticipate that there will be a surge of further authorities signing in the run-up to the act of remembrance on 11 November. However, once that milestone is out of the way, I will be more than happy to answer a question listing the authorities that have not signed up, should any Member feel minded to ask me such a question.
Jeremy Corbyn (Islington North) (Lab)
T2. Will the Secretary of State tell the House how much money has so far been spent on preparations for the replacement of the Trident submarine system and, of course, the missile warheads that go with it, and what representations he has received within the higher echelons of the military not to go ahead with the replacement of Trident but to spend the money on something else?
Mr Hammond
As I have told the hon. Gentleman before, the figure is approximately £3 billion of commitments so far on design and early lead items. I am racking my brains, and I think I can say to him that since I have been in this post, which is just over two years, I have received no representation against the renewal of Trident from any senior officer in the armed forces.
Chris Heaton-Harris (Daventry) (Con)
T3. What progress has my right hon. Friend made with the renegotiation of the aircraft carrier contract?
Mr Hammond
Negotiations with the Aircraft Carrier Alliance are ongoing, but we believe they are close to reaching a conclusion. As soon as we have information to convey to the House, I will seek an early opportunity to make a statement.
Mr John Baron (Basildon and Billericay) (Con)
T4. Parliament sent a very clear message to the Government—the vote was 92 to nil—not to disband regular units until we were sure that the Army Reserve plan was both viable and cost-effective. What plans do the Government have to enact Parliament’s will?
Mr Hammond
As I have said in answer to an earlier question, it is just not possible, within the resource envelope available, to maintain the regular forces at their previous level while also recruiting and building the reserve. Neither would it allow us to restructure the force in the way necessary to deliver the outputs required from Future Force 2020.
Jenny Chapman (Darlington) (Lab)
Darlington is home to many forces families, probably because we are so close to Catterick garrison. What more are the Government going to do to support families moving between postings, particularly those who have children with additional needs?
Ian Lavery (Wansbeck) (Lab)
Seven Territorial Army centres in the north are set to close by 2016. How on earth will that assist the Government in recruiting up to 30,000 reservists before 2018?
Mr Philip Hammond
As we announced in our reserves basing plan, a small number of TA centres will close and consolidate. We have made a commitment that we will provide reservists with the latest equipment and training opportunities with their Regular Army counterparts. We can do that only by consolidating so that there are units of critical mass. In most cases, the consolidations are taking place within urban conurbations. We expect there to be few cases of people who are not within reasonable travelling distance of the next nearest reserve base.
Jack Lopresti (Filton and Bradley Stoke) (Con)
T9. Given that the MOD’s figures suggest that the present TA mobilisation rate is 40%, what research or evidence is there to justify the Secretary of State’s contention that that mobilisation will be doubled under the reserve forces plan?
Mr Hammond
I am not entirely sure that I understand my hon. Friend’s question. Under Future Force 2020, we would expect the reservist component of the deployed force on an enduring operation eventually to get to 40%. The construct that we are planning is designed to support that level. That level is still lower than what many of our English speaking allies routinely expect to use.
John Cryer (Leyton and Wanstead) (Lab)
Given the 20% cut in the Army, what representative structures exist so that the understandable concerns of servicemen and women can be heard in Whitehall and the upper echelons of the armed forces?
Bob Stewart (Beckenham) (Con)
May I ask my right hon. Friend what percentage of the £1.8 billion allocated to bolster reserve forces has been spent already?
Mr Philip Hammond
I cannot give my hon. Friend a precise answer because some of the money is committed to infrastructure, and some to equipment programmes that are in the process of being rolled out. Perhaps I can offer him a written answer that will provide some indication of where we are in this process.
Jim Dobbin (Heywood and Middleton) (Lab/Co-op)
In the recent dispute between Spain and Gibraltar, would it be appropriate to threaten the withdrawal of the British ambassador to Spain before somebody is injured?
Mr Tobias Ellwood (Bournemouth East) (Con)
May I invite the Secretary of State to commit to operating both aircraft carriers? A single carrier can be operational for only two thirds of the year, whereas a second carrier would ensure that we have year-round capability and allow us to work up not only a carrier strike but expeditionary capability as well.
Mr Philip Hammond
I am grateful to my hon. Friend—nice try. As he knows, however, it will be decided in the 2015 strategic defence and security review whether or not to bring into operation the second carrier, HMS Prince of Wales.
Mr Philip Hollobone (Kettering) (Con)
Given the recent increase in its centrifuge capability, and that there is no plausible use for the amount of uranium it has enriched to 20% and beyond, how close does my right hon. Friend feel that Iran is to developing a nuclear warhead that is ballistically deliverable to either Tel Aviv or Riyadh?
Mr Philip Hammond
I do not want to speculate on how close Iran could be to developing any kind of warhead, but I reassure my hon. Friend that the Government support the process of engagement with the Iranian regime to test whether it is serious when it says that it wants to negotiate with the west.
Mark Pawsey (Rugby) (Con)
Given previous failures, the Government are rightfully changing the framework for defence procurement, which generates a £22 billion turnover. Will the Minister confirm that under the new arrangements there will be more opportunities for small businesses to get their fair share of that expenditure?
Director of Service Prosecutions
Lord Hammond of Runnymede Excerpts(10 years, 10 months ago)
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The Secretary of State for Defence (Mr Philip Hammond)
Under section 364 of the Armed Forces Act 2006 the Director of Service Prosecutions is appointed by Her Majesty the Queen. The term of the current incumbent, Bruce Houlder QC, comes to an end on 30 November.
I can inform the House that Her Majesty has appointed Andrew Cayley QC to succeed Mr Houlder as Director of Service Prosecutions. Mr Cayley is a former British Army officer who was until recently the International Co-prosecutor of the Khmer Rouge Tribunal in Cambodia, nominated by the Secretary-General of the United Nations.
I should also like to take this opportunity to pay tribute to Mr Houlder. As the first Director of Service Prosecutions he faced the significant and challenging task of creating a single organisation—the Service Prosecuting Authority (SPA)—from the three single-service prosecuting authorities. Mr Houlder, a highly respected member of the Bar, has demonstrated, through his commitment and professionalism, that the decisions to establish an independent tri-service prosecuting authority and to appoint a civilian to lead it were the right ones. Under his leadership, the SPA has become securely established as a respected independent prosecution service, underpinning the operational effectiveness of the armed forces, and instilling continued confidence in the service justice system. As he hands over his responsibilities to Mr Cayley, I would like to express my personal gratitude for the important contribution he has made, including his agreement to stay in post for some extra months to ensure a smooth handover to his successor.
“Scotland Analysis: Defence”
Lord Hammond of Runnymede Excerpts(10 years, 10 months ago)
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The Secretary of State for Defence (Mr Philip Hammond)
The UK Government have today published the sixth paper in its Scotland analysis programme, “Scotland analysis: Defence”. This series of publications is designed to inform the debate on Scotland’s future within the United Kingdom ahead of next year’s referendum.
The “Scotland analysis: Defence” paper analyses the UK’s approach to defence and the potential consequences of Scottish independence. From a defence perspective, the arguments for Scotland remaining in the UK are extremely strong. As part of the UK, Scotland benefits from a very high level of security and protection provided through the UK’s integrated defence capabilities and network of international defence alliances and relationships, as well as from the opportunities for industry available through the UK’s single, domestic defence market. An independent Scottish state could not come close to replicating these benefits.
Scotland benefits from the full range of UK defence capabilities and activities. These defend UK airspace, patrol the surrounding seas and help to protect everyone in the UK against both natural and man-made threats. Scotland also benefits from the UK’s extensive defence engagement overseas to project influence and help to safeguard and establish peace and security in countries affected by conflict or instability, maintain competitive advantage and tackle security threats before they reach the UK.
In the event of a vote for independence, an independent Scottish state would lose the benefits of one of the largest defence budgets in the world and of an integrated approach to defence that currently protects all parts of the UK, while offering significant economies of scale, as well as contributing to conflict prevention and resolution, and to humanitarian operations overseas. The start-up costs and complexity of establishing separate defence capabilities for an independent Scottish state would be very significant, and would need to be factored into the Scottish Government’s budget estimates.
The UK’s defence is rooted in a strong network of international alliances and relationships, underpinned by the reputation and effectiveness of the UK armed forces, which means the UK is able to exercise significant global influence to advance its security and prosperity objectives.
In a globalised world, an independent Scottish state would have to start from scratch, as a new and much smaller state, in forming alliances, building relationships and forging its reputation. It would cease to enjoy the influence that derives from the UK’s established status as a key player within the international system, and the opportunities this offers to advance the UK’s security and prosperity objectives.
The substantial defence industrial footprint in Scotland benefits from UK defence contracts, in particular the shipbuilding industry. The scale of UK defence helps to sustain defence industry in the UK and its success in the exports market. The sustainability of the defence industry in an independent Scottish state could be a cause for considerable concern, as it would no longer be eligible for contracts that the continuing UK chose to place or compete domestically for national security reasons, and would lose the support to exports provided by the UK’s extensive international defence engagement and the reputational benefits of affiliation with the UK’s armed forces in the highly competitive global market.
Future papers from the Scotland analysis programme will be published over the course of 2013 and 2014 to ensure that people in Scotland have access to the facts and information ahead of the referendum.
Armed Forces Pay Review Body (Public Appointments)
Lord Hammond of Runnymede Excerpts(10 years, 11 months ago)
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The Secretary of State for Defence (Mr Philip Hammond)
I am pleased to announce that I have reappointed two members of the Armed Forces’ Pay Review Body commencing March 2014. I have invited Mr Paul Kernaghan to serve a further three years and Sir Richard Ibbotson for a further two years. The reappointments have been conducted in accordance with the Office of the Commissioner for Public Appointments’ (OCPA) code of practice.
Oral Answers to Questions
Lord Hammond of Runnymede Excerpts(10 years, 11 months ago)
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Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
2. What assessment he has made of the cost and credibility of a nuclear deterrent based on a cruise missile system.
The Secretary of State for Defence (Mr Philip Hammond)
A range of cruise missile-based systems were examined as part of the recent Trident alternatives review. The evidence showed that any cruise missile option was more vulnerable and had significantly reduced reach compared with a Trident-based deterrent. Additionally, it would be more costly, requiring the design and development of a new warhead, as well as a new missile.
Oliver Colvile
I am grateful to my right hon. Friend, but will he give me a commitment that in any future negotiations with our coalition partners after the next general election, if by some misfortune no single party should gain an outright majority, our party would retain a continuous-at-sea deterrent with four nuclear submarines?
Mr Hammond
The Government’s position is that we will maintain continuous-at-sea deterrence, and to do that we are preparing to go ahead at the main-gate decision in 2016 with the delivery of replacement submarines. I fear I would be straying beyond my remit if I were to speculate on negotiations that may or may not take place after the next election.
Jeremy Corbyn (Islington North) (Lab)
What is the Secretary of State’s latest estimate of the cost of replacing both the warheads and the submarine system, ahead of the main-gate decision in 2016? Has he given further consideration to the possibility of us not renewing Trident in order to help bring about a nuclear-free world more rapidly rather than re-arming ourselves and thus delaying the possibility of a nuclear-free world?
Mr Hammond
On the last point, I think that history teaches us that unilateral abandonment of nuclear weapons is not the way to bring about a more rapid elimination of those weapons, much as we would all like to see that happen. I can tell the hon. Gentleman that the estimates produced in the 2006 White Paper for the cost of replacing the existing submarines with a four-boat solution were between £15 billion and £20 billion—in terms of the 2006 economic conditions—and they remain unchanged.
Dr Julian Lewis (New Forest East) (Con)
In order that the Secretary of State does not keep having to tell us that he must not go above his pay grade, will he carry the message back to No. 10 that as Labour Front Benchers say they are willing to sign up to two of the four boats before the next election, and as the majority of people in this House would like to have that main-gate decision implemented at least in part, why should we not go ahead so that we cannot be blackmailed by the Liberal Democrats in the event of a hung Parliament after the general election?
Mr Hammond
I understand my hon. Friend’s point of view. He has on other occasions raised the issue of entering into a contract for the submarines at an early stage. Our current way of managing our equipment programme is to enter into contracts with industry at the point at which projects are mature enough to enable us to secure the best possible value for money for the taxpayer. Entering into a contract at this stage, when the project is relatively immature, would not represent value for money.
Mr Ben Wallace (Wyre and Preston North) (Con)
3. What conclusions he has drawn from the Trident alternatives review about alternatives to a UK nuclear deterrent based on Trident.
Christopher Pincher (Tamworth) (Con)
11. What conclusions he has drawn from the Trident alternatives review about alternatives to a UK nuclear deterrent based on Trident.
The Secretary of State for Defence (Mr Philip Hammond)
The review demonstrates that no alternative system is as capable as a Trident-based deterrent, or as cost-effective.
Mr Wallace
Does my right hon. Friend agree that one of the dangers of the alternatives to Trident is that of mistaken identity? An intercontinental ballistic missile leaves a very distinct signature on launch, whereas the alternatives could be confused with conventional weapons, and hence trigger an escalation rather than a de-escalation of conflict.
Mr Hammond
My hon. Friend is absolutely right. The Trident alternatives review makes clear that that is just one of the many drawbacks of a cruise-based system. The other primary drawbacks are the risk, the time scale for development, the likely cost, the lack of range, and the vulnerability of the weapons system.
James Morris
Will the Secretary of State confirm that, when maintenance is taken into account, the cost differential between four boats and three boats is minimal, and that we should press ahead with a full replacement for Trident because it is in our national interest to do so?
Mr Hammond
My hon. Friend has conflated two different questions. The Trident alternatives review states categorically that Trident provides the best value and the best capability for the United Kingdom. As for the separate question of how many boats are needed, the Government are determined to maintain continuous-at-sea deterrence, and the best advice at present is that that will require four boats. The cost differential between three and four boats is about £1.7 billion in net present value terms, or about £50 million to £60 million a year over the life of the project.
Christopher Pincher
My right hon. Friend has already made a powerful case for Trident and for continuous-at-sea deterrence, but does he agree that other potential deterrents that have been mooted, such as an airborne deterrent, would also be expensive to implement? Moreover, an airborne deterrent would be prey to a pre-emptive strike—which means that it would be no deterrent at all—and would be considered objectionable by many people who do not want nuclear armed planes landing and taking off on their doorsteps.
Mr Hammond
Indeed. The nature of the United Kingdom, which is a relatively small and densely populated land mass, is one of the factors taken into account by the Trident alternatives review, and one of the reasons why the idea of land-based ballistic missiles was ruled out at an early stage. The review states clearly that all alternatives to Trident are less capable, higher-risk and more expensive. That strikes me as a pretty categorical conclusion.
Mr David Hanson (Delyn) (Lab)
Can the Secretary of State tell the House how much taxpayers’ money has been spent on the Liberal Democrat vanity project that is the Trident alternatives review, given that, by and large, both the Conservative part of the coalition and the Labour Opposition support the outcome and knew what it would be?
Mr Hammond
I can tell the right hon. Gentleman that the work on the review was conducted in-house, led by the Cabinet Office and supported by the Ministry of Defence, and that the principal cost involved will have been civil servants’ time. If he submits a written question to me, I will ask the Department to produce the best estimate that it can make of the time involved.
Mr James Arbuthnot (North East Hampshire) (Con)
Does my right hon. Friend agree that if we opted for an alternative to Trident, we should probably have to be out of the submarine building business altogether, and that that would pose a real risk to the national security of the country?
Mr Hammond
My right hon. Friend has made an extremely good point. It seems often to be forgotten by those who advocate an alternative that we must make a choice about whether to sustain a submarine building industry in the United Kingdom. I, for one, believe that it is essential to the UK’s strategic interest for us to maintain a submarine-building capability, and that further points to the use of a submarine-based continuous-at-sea deterrent.
Mr Kevan Jones (North Durham) (Lab)
The Government’s Trident alternatives review covered a large number of options and was described in this House by the Chief Secretary to the Treasury as the “most comprehensive study” of our nuclear deterrent policy. Will the Secretary of State enlighten the House as to why the alternative being put forward now by the Liberal Democrats of two boats conducting irregular unarmed patrols was not considered as part of that comprehensive review?
Mr Hammond
The review considered a three-boat alternative and a four-boat alternative; it did not consider a two-boat position, as that was not considered a credible deterrent.
Sir Edward Leigh (Gainsborough) (Con)
8. Whether his Department has undertaken a cost-benefit analysis of a Trident replacement; and if he will make a statement.
The Secretary of State for Defence (Mr Philip Hammond)
A cost-benefit analysis of possible nuclear deterrent systems was carried out for the 2006 White Paper, “The Future of the United Kingdom’s Nuclear Deterrent”. This demonstrated that a submarine-launched ballistic missile system based on Trident was the most cost-effective solution to the UK’s requirement. The recently published “Trident Alternatives Review” supports the judgments made in 2006 and demonstrates that the renewal of the current Trident-based system is the most cost-effective and capable nuclear deterrent for the UK.
Sir Edward Leigh
Just because Trident is obviously the best new nuclear deterrent, surely we should still worry about, and be aware of, costs. Given that submarine programmes have a history of vast cost overruns—50% in the case of the Astute class programme—will the Secretary of State assure the House that he is keeping a close eye on costs and that he is broadly confident that he can deliver Trident on time and on budget?
Mr Hammond
We have not yet contracted but, as I said in response to the question asked by the hon. Member for Islington North (Jeremy Corbyn), we believe that the costs of replacing the Trident deterrent will fall within the estimates set out in the 2006 White Paper. I should say to my hon. Friend that we have made significant strides to reform the way in which the submarine enterprise is conducted, and we believe that the MOD has a much firmer control of the enterprise’s cost base than has previously been the case.
John Woodcock (Barrow and Furness) (Lab/Co-op)
Is the right hon. Gentleman keeping an open mind about the timetable? If experts and the industry tell him that there could be a more cost-effective solution for the taxpayer if the main-gate decision were to come earlier than the scheduled date of 2016, will he be alive to that, rather than sticking to the current agreement within the coalition?
Mr Hammond
Tempting though it is to go down the route that the hon. Gentleman sets out, the reality is that the processes that must be undertaken to reach a mature main-gate decision that is properly informed by the evidence simply could not be shortened to the available time scale. We are aiming for 2016, by when we will have a robust basis on which to contract and to conduct the value-for-money assessment.
Miss Anne McIntosh (Thirsk and Malton) (Con)
10. What recent assessment he has made of the security situation in Syria; and if he will make a statement.
The Secretary of State for Defence (Mr Philip Hammond)
The conflict in Syria is of grave concern to the international community and the use of chemical weapons by the Syrian regime is, I think, regarded as abhorrent by everyone. The UK will continue to press for a political solution to end the bloodshed and we are urging the Syrian regime to enter the Geneva process towards a negotiated transition.
Miss McIntosh
I thank my right hon. Friend for his reply. Clearly the security situation will have the greatest impact on Syria’s near neighbours, so what discussions have he and other members of the Cabinet had with those near neighbours and the Arab League, as well as NATO and the EU?
Mr Hammond
My hon. Friend might have seen that the Secretary-General of NATO made a statement only this morning about this matter. I assure her that we have the closest possible contact and dialogue with the regional players—the Arab League, the Gulf Co-operation Council, Jordan, Lebanon and Turkey. We are acutely conscious of the risks and threats that the situation in Syria present to them. I should also mention that we are the second largest donor of humanitarian assistance to try to alleviate the shocking refugee crisis in Syria.
Mr David Winnick (Walsall North) (Lab)
Is it not the case that, although the civil war in Syria started in early 2011, a UK firm was granted a licence to sell chemicals to the regime in 2012, and that was stopped only because of tougher EU sanctions? Is there any murderous regime anywhere with which we are not willing to do business? This illustrates what I have said about Syria. If that process had not been stopped owing to EU sanctions, chemicals would have been sent that could have made the gas that was used against civilians there.
Mr Hammond
The hon. Gentleman makes a case with a great deal of passion, but without much detailed understanding of what he is talking about. Export licences were granted for some industrial chemicals that could have been used in a process that might be involved in the production of poisonous gases. Those export licences were revoked—no such chemicals were exported. However, I should explain that the problem that we all face is that a significant number of industrial chemicals have perfectly legitimate industrial uses—in this case, I believe, in metal-finishing activities—and we have to maintain the right balance between ensuring that we are not providing materials that could be misused and allowing normal trade to be conducted.
Sir Gerald Howarth (Aldershot) (Con)
Much has been made in the media about the potential impact of last week’s vote on the relationship between the United Kingdom and the United States. Does my right hon. Friend not agree that whatever disagreements there might be on the particular issue of Syria, the strength of the relationship between the United Kingdom and the United States is absolutely essential, and it rests, much more importantly, on intelligence and a shared belief in a nuclear deterrent?
Mr Hammond
My hon. Friend is absolutely right. Our relationship with the United States is central to our defence and security, and I am confident that, whatever happened last week, the depth, strength and history of that relationship mean that it is a resilient one. The Prime Minister has spoken to the President since last Thursday, and I am confident that as a result of that conversation the relationship between the United States and the United Kingdom will continue, and will remain strong and resilient.
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)
Given that the security situation in Syria is likely to deteriorate or certainly change, will the Secretary of State tell the House why last Thursday’s vote, whereby in essence the House did not agree to two motions, should not be revisited in future?
Mr Hammond
As the Prime Minister, the Chancellor of the Exchequer and the Foreign Secretary have already made clear, this is a democracy. Parliament has spoken, and we take it that Parliament has spoken very clearly. We cannot keep coming back to Parliament with the same question. I think that the circumstances would have to change very significantly before Parliament wanted to look again at this issue.
Mr John Redwood (Wokingham) (Con)
I warmly welcome the Government’s policy of not intervening militarily in Syria, but may I seek assurances from the Secretary of State that every action will be taken by the Government and by friendly Governments around the world to make sure that perpetrators of atrocities in Syria are outlawed, and that should they seek to leave their country they will stand trial and any wealth and money they have forfeited?
Mr Hammond
Our position remains that there needs to be a robust response to the illegal use of chemical weapons. The House of Commons has ruled out military participation in any such response, but we will pursue every diplomatic, political and other channel to continue to deliver the robust message that my right hon. Friend calls for.
Mr Jim Murphy (East Renfrewshire) (Lab)
I want to return to the issue raised by my hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart). On Thursday, after the vote, the Prime Minister ruled out UK involvement in military action in Syria. The Government of course will remain engaged diplomatically and on aid policy, but will the Secretary of State spell out for the House in what, if any, circumstances, following changes in Syria or internationally, the Government would bring back to Parliament the issue of UK military involvement in Syria?
Mr Hammond
If I may say so, it is a bit rich for the right hon. Gentleman, who last week trooped into the Lobby behind the leader of his party, giving rise to the very situation in which we now find ourselves, to demand that I tell him precisely in which circumstances we might revisit this issue. I have already said to the hon. Member for Birmingham, Edgbaston (Ms Stuart) that we believe that Parliament has spoken clearly on this issue, and is unlikely to want to revisit it unless the circumstances change very significantly.
John Glen (Salisbury) (Con)
12. What steps his Department is taking to strengthen the military covenant.
Mr Henry Bellingham (North West Norfolk) (Con)
T1. If he will make a statement on his departmental responsibilities.
The Secretary of State for Defence (Mr Philip Hammond)
My first priority remains the success of operations in Afghanistan. Beyond that, my priorities are to deliver the sustainable transformation of the Ministry of Defence, to build confidence within the armed forces in the Future Force 2020 model, to reinforce the armed forces covenant, to maintain budgets in balance, and to deliver equipment programmes on time and to budget so that our armed forces can be confident of being properly equipped and trained.
Mr Bellingham
I thank the Secretary of State for that helpful statement. Does he agree that the current crisis in Syria brings into very sharp relief the crucial importance of the strategic bases in Cyprus, particularly RAF Akrotiri? Does he agree that it is essential that the Government do not just retain those bases but invest in their facilities and infrastructure?
Mr Hammond
The Government reviewed the utility and position of the sovereign base areas in 2010-11 and concluded that they played an important part in Britain’s defensive arrangements. We intend to continue to invest in them and to maintain them on the current basis.
Graham Jones (Hyndburn) (Lab)
T7. When will the Government make a decision on the number of F-35s that will be procured as part of the arrangement with Lockheed Martin, and is the Minister able to guarantee that the work-share allocation for the United Kingdom and BAE Systems will not be reduced in the future?
Mr Tom Watson (West Bromwich East) (Lab)
A leading commentator in Australia recently characterised the Syrian conflict as not “goodies versus baddies”, but rather “baddies versus baddies”. Does the Secretary of State share that simple assessment of our political and military dilemma?
Mr Philip Hammond
Simple assessments of complex situations rarely paint the whole picture, but the hon. Gentleman has a point. The opposition is not a single, homogenous force. There are various elements within it, some of which are deeply unpleasant in their objectives and methods.
Simon Hughes (Bermondsey and Old Southwark) (LD)
T3. Following the answer to the first topical question and in the light of last Thursday’s decision, what conflict-resolution role does the Secretary of State envisage for our troops based either in Cyprus or more widely in the middle east and north Africa region?
Mr Philip Hammond
As I have made clear, we accept the will of Parliament that there will be no British military involvement in any action against Syria. That does not mean that we are not continuing to press for a diplomatic solution and for the convening of the Geneva peace conference to try to reach a negotiated transition in Syria. No one has yet suggested that any such transition would involve any military role for the UK. Until such a conference convenes and makes progress, any such question is purely hypothetical.
Mr Ben Bradshaw (Exeter) (Lab)
Why was the intelligence document published by President Obama on Friday so much more comprehensive, detailed and compelling than the one the Secretary of State published just the day before? If the Secretary of State was not in possession of the same information, which I find difficult to believe, why did he not wait until he could put all of the facts before this House, instead of forcing Members to make a decision when it was too soon and we were not in possession of the facts?
Mr Hammond
First of all, I did not publish a document. The chairman of the Joint Intelligence Committee wrote to the Prime Minister summarising the judgment of the UK intelligence community. That was done in an atmosphere in which we were extremely conscious of the parallels with Iraq 2003 and extremely cautious about presenting any argument to Parliament that relied or depended on intelligence information that we could not publish or produce. I think we made the right judgment in presenting our argument cautiously, relying only on information that was available and could be examined by Members of the House of Commons.
Duncan Hames (Chippenham) (LD)
T4. Ministers’ summer reading will have included the report of the Committee on Arms Export Controls, including its concerns about export licences for dual-use items to Syria. In responding to that report, will the Minister confirm that British exports will not have contributed to the military strength of the Assad regime?
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
The head of Britain’s armed forces, General Sir Nick Houghton, has admitted that he faces a “huge challenge” in maintaining morale and performance. Figures that were released just the other month show that the proportion of service personnel who feel that their morale is low has gone up to 30%. That is a shocking situation. What will the Government do about it?
Mr Philip Hammond
If the hon. Lady cares to read the original interview that General Sir Nick Houghton gave to the in-house magazine, she will see that there is a slightly different slant in that story to that in some national newspapers. The Chief of the Defence Staff was saying that we have perhaps not communicated our vision of Future Force 2020 and what it offers to the people in our armed forces as well as we could or should have done. That is why I included in the list of my priorities that I gave a few moments ago the communication of the challenges and opportunities of Future Force 2020 to our own people.
Sir Edward Leigh (Gainsborough) (Con)
T5. Given that for four centuries, Scotland and the Scottish people have played such a glorious part in the defence of our United Kingdom, and that from the battles of Malplaquet and Blenheim to the sands of north Africa and the mud of Flanders we have shed blood together, would it not be a good idea if Armed Forces day 2014 was held in Scotland?
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
What is the strategy in Syria? Listening to the speeches in last Thursday’s debate, it became very clear that no one had spoken to the new leadership in Iran or to the new leadership in China about their position on the Security Council. What is the strategy or are the Government just giving up on defence and foreign affairs?
Mr Philip Hammond
We will take no lectures from the hon. Gentleman on the last point. As I have said several times today, notwithstanding the vote last Thursday, which made it clear that we will not engage militarily in a response to the shocking use of chemical weapons, we will continue to explore every avenue to influence the outcome through diplomatic and political means. I suggest to the hon. Gentleman that if he makes himself available here tomorrow, he will have the opportunity to ask the Foreign Secretary that question at Foreign Office questions and to receive a full answer about the level of engagement with the leaderships of Iran, Russia, China and the many other countries that are involved.
Ian Paisley (North Antrim) (DUP)
Have the Government taken the opportunity to thank the Americans for so thoroughly dumping on their oldest ally, the French, in favour of the long grass of the Congress when it comes to Syria?
Mr Philip Hammond
I think we have to be clear in these matters. The British Government can speak for what Britain will or will not do; other allies have to make their own decisions, and just as we have asked them to respect our political processes and constitutional norms, so we have to respect theirs as well.
Mr James Gray (North Wiltshire) (Con)
T8. Parliament as a whole owes a huge debt of gratitude over 25 years to the armed forces parliamentary scheme and its founder, Sir Neil Thorne. Under your instructions, Mr Speaker, and those of the Lord Speaker and the Secretary of State, the scheme will be relaunched next Tuesday at 5 o’clock in Room 14 under new management, and I am glad that Sir Neil Thorne has agreed to become life president of the new scheme. Will the Minister recommit the assets and determination of the Ministry of Defence to the scheme, and ensure it takes forward this brilliant opportunity of educating parliamentarians about the ways of the armed forces?
Mr Philip Hammond
That is a very good question and, of course, a completely separate issue. If the large stocks of chemical weapons held by the Syrian Government were to fall into the hands of non-state actors, that would represent a very serious threat to the region and indeed to the wider international community. I confirm, as the House would expect, that we have had and will continue to have dialogue with international partners about what we might collectively do if such a situation were to arise.
Sheryll Murray (South East Cornwall) (Con)
T9. I understand that a Fleet Air Arm pilot recently landed an F-35 on an American aircraft carrier. Will my right hon. Friend please confirm that, and also update the House on the implications of any effect last Thursday’s vote had on training with the Americans?
Mr Philip Hammond
As my hon. Friend says, I am delighted to confirm that a British-piloted F-35B—the short take-off and vertical landing version of the F-35 aircraft—has completed a successful landing on USS Wasp, which was, I think, off the coast of Virginia. We have a programme of embedded UK pilots training with US navy marines on those aircraft. Progress is good on that programme, and we expect the first squadron of aircraft to come to the UK fully formed in 2018, with pilots who have been trained and prepared in the United States.
John Mann (Bassetlaw) (Lab)
Post-conflict Commonwealth applicant Burundi desperately needs assistance in rehabilitating soldiers and ex-combatants from the civil war, including disabled and child soldiers. Will the Secretary of State use his good offices to come up with a scheme with the Department for International Development gainfully to employ some of the great expertise that our ex-service personnel, who are about to increase in number, could use to assist them?
Mr Hammond
I will certainly talk to my right hon. Friend the International Development Secretary and see whether DFID could look at that. I will also ask our own conflict prevention and reconstruction unit to consider whether there is anything that the UK military could do to help in that situation.
Defence Reform Bill
Lord Hammond of Runnymede Excerpts(11 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Defence (Mr Philip Hammond)
I beg to move, That the Bill be now read a Second time.
The defence of the United Kingdom and the protection of our national interests must be the priority of any Government. The brave men and women of our armed forces do an exceptional job, and I am sure all Members of the House will wish to pay tribute to their dedication, and to the sacrifices they make not only on operations but, as the tragic events in the Brecon Beacons at the weekend reminded us, on a daily basis.
The armed forces can perform their vital role only if we provide them with the capabilities they need to operate effectively and safely. We have a duty to them to ensure they have the tools they need in terms of manpower, training, equipment and logistical support. At the same time, we must deal with the black hole we inherited in the defence budget, and the Ministry of Defence has had to contribute its share to the broader challenge of correcting the public sector structural deficit.
Mr Jim Murphy (East Renfrewshire) (Lab)
I wish to respond not to the Secretary of State’s discordant point but to address his earlier comment and say that Her Majesty’s Opposition wholeheartedly share the expression of sympathy offered by the Secretary of State about events in Brecon. I know there are limits to what he can say at this early stage because it is subject to a police inquiry, but can he share any more details with the House about his understanding of those tragic events? In particular, there have been suggestions that training regimes may recently have been altered as part of efforts to boost the number of reservists, but I suspect that they are unfounded. Will he say what he feels he can say at this early stage?
Mr Hammond
I understand that the right hon. Gentleman desires to get to the bottom of this matter—as do we all—but he is right that there is little I can say. An inquiry by Dyfed-Powys police is under way, and when it is complete there will be a service inquiry into the events of last weekend. We will get to the bottom of what happened, and if there are systemic lessons to be learned, we will learn them. I give the right hon. Gentleman an undertaking that once the inquiry is complete, I will report to the House in an appropriate way.
The need to address the public sector structural deficit and the deficit in the defence budget has meant tough decisions and a relentless focus on squeezing more capability out of what remains the world’s fourth largest defence budget.
Mr John Baron (Basildon and Billericay) (Con)
My right hon. Friend talked, quite rightly, about the first duty of government, but he will be aware that some of us on the Government Benches are concerned that misguided Army reserve plans will throw up false economies and unacceptable capability gaps. Given that the present Territorial Army mobilisation rate is 40%, will he explain how we are trying to plug a gap from the loss of 20,000 regular troops with only 30,000 reservists? A 40% figure would suggest that we need nearer 50,000.
Mr Hammond
My hon. Friend’s view on this matter is well known. Two weeks ago the Government set out robust proposals in a White Paper, “Future Reserves 2020”. I am confident we will be able to deliver the force we have set out, and that that force will support the level of ambition for deployment set out in the strategic defence and security review 2010.
Nick Smith
Will the Secretary of State tell the House the annual recruitment targets for reservists for each remaining year of this Parliament?
Mr Hammond
I suspect the hon. Gentleman is referring to figures that were put in the public domain last year before this process was fully under way. I have said to the House that I will be transparent about recruitment and trained-strength targets. Later this year we intend to begin publishing quarterly figures, and we will set out the expected forward trajectory at the same time. As I said the week before last, and will say again now, the path will not be smooth and there will be some lumpiness in it. The structural changes we are making in the regular Army and the Army Reserve will have an impact at the front end, but in the long run it will support the growth of reserves that we all seek.
Eliminating waste and inefficiency in our procurement systems, and making best use of the skills available, whether they are in the public or private sector, or indeed in the regular or reserve forces, are at the heart of our plan for sustainable and effective defence in times of austerity. The Government have set about transforming the way that defence is managed and delivered. Starting with the strategic defence and security review in 2010, we have looked hard at how we can carry out our activity to see whether it can be improved. As part of that process, my predecessor asked Lord Levene of Portsoken to conduct an in-depth review into every aspect of how we manage defence, and we are well advanced in implementing the changes he recommended.
Ensuring our forces have the right equipment, delivered on time, is essential if we are to maintain our capabilities in the future, and ensuring we do that cost-effectively is critical if we are to sustain them. Making full use of the expertise and skills of our reserve forces is crucial if we are to meet the security challenges that we face with smaller regular forces. In most areas, we are able to deliver defence transformation through changing the way we are organised and the way we do things in the Ministry of Defence. In two areas—procurement and the use of reserves—primary legislation is required to complete the programme.
Kate Green (Stretford and Urmston) (Lab)
I am glad that the Secretary of State is about to expand on procurement. Will he confirm that in securing a reliable and cost-effective supply of equipment, there will be open competition for a wide range of suppliers—including those such as Joseph Gleave & Son in my constituency, which has supplied the Department for many years—and that the Government procurement model will not squeeze out smaller businesses that have been supplying in the past.
Mr Hammond
The Government have a focused initiative to increase participation of small and medium-sized enterprises in the defence supply chain. Such businesses provide a tremendously important part of our defence resilience. Because they are often buried in complex supply chains led by a large prime contractor, their contribution is not always noticed as much as it should be, but they are an important part of the equation. I will come later to the balance between open competitive procurement and single-source procurement, which is at the heart of part 2.
The Bill has three main parts. Parts 1 and 2 deal with defence procurement and part 3 deals with our reserve forces. Turning first to procurement, I think that few in this House would not agree that the way in which we develop, specify, procure and support defence equipment can and must be improved. We have already made significant progress, but we recognise that fundamental change is needed if we are to sustain that progress and to deliver the equipment that the armed forces need and the value for money that the public are entitled to expect. Now is the time to make those changes.
For decades, our defence equipment programme has suffered from poor time and cost forecasting and poor project and programme management, leading to delays, cost overruns and specification failures. We have to address these issues by challenging the pattern of incentives and behaviours once and for all. That is why, after success on military operations, my priority as Defence Secretary has been to establish, for the first time, a fully costed and deliverable 10-year equipment plan. This has now been achieved and published. Our armed forces now have the certainty that the equipment they are expecting has been both planned for and is properly funded. However, if we are to deliver this programme consistently and to entrench a better method of working to provide a better service to the front line in future, we need fundamentally to reform our defence acquisition processes and structures.
The previous Government were of course aware of this problem. Towards the end of their time in office, they commissioned the independent report by Bernard Gray into the acquisition process. That report found serious structural and cultural problems in the way in which we procure defence equipment. We have considered carefully its analysis and the options available for reform of Defence Equipment and Support. My predecessor appointed its author as Chief of Defence Matériel, with a remit to take the reform agenda forward. The results of that work are set out in the White Paper, “Better defence acquisition”, which I published on 10 June this year.
Our preference is to transform the existing Defence Equipment and Support organisation into a Government-owned, contractor-operated organisation—a GoCo. We believe that this model is the one most likely to embed and sustain the significant behavioural change required to transform defence acquisition. However, belief alone is not enough, and we will test this proposition through a commercial competition and against a public sector comparator. If, at the end of this rigorous evaluation process, a GoCo is assessed to be the best-value-for-money option, a private sector partner will be appointed to manage DE&S on behalf of the Secretary of State. This will be a radical change, but not quite as radical as some of the more lurid headlines have suggested.
Peter Luff (Mid Worcestershire) (Con)
I am most grateful to my right hon. Friend for his compelling speech and for giving way. May I ask him about the timetable for the process he has outlined? When will these things actually happen?
Mr Hammond
We expect to reach a decision point in the commercial process next spring. If we go down the route of appointing a GoCo, we expect the GoCo operator to be appointed late in 2014 or at the very beginning of 2015.
Mr Tobias Ellwood (Bournemouth East) (Con)
I am grateful to the Secretary of State for explaining what is happening with the GoCo. A number of international companies would be interested in applying to run it. Is there any requirement that it needs to be run by a British company, or would it be open to tenders from across the world?
Mr Hammond
The proposition is that a GoCo would be a UK-registered and domiciled company paying its taxes in the UK, but we expect that its shareholders will include international partner firms. The GoCo that runs the Atomic Weapons Establishment includes three non-UK companies in its shareholder register, and I see no reason to expect that the result of this competition would be different. We would expect British and non-British companies to be involved in the ownership, but the GoCo itself will be a British company.
Sir Gerald Howarth (Aldershot) (Con)
The Secretary of State will be aware that there are concerns among those in industry that their intellectual property may not be protected. Given that there is a very high degree of competition between the United States and the United Kingdom, the admission of a US company into the inner workings of the British Ministry of Defence across a wide range of areas would not be the same as the co-operation on the Atomic Weapons Establishment at Aldermaston, where the United States and the United Kingdom are completely in agreement.
Mr Hammond
I am grateful to my hon. Friend, who will have thought very carefully about these matters. Of course, this goes to the heart of the deliberations that we have been having. We are confident that we can put in place a model that will protect intellectual property—an issue to which I shall return.
Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)
On a similar theme, what have been the discussions with the United States about the transfer of classified information in this context?
Mr Hammond
I shall talk about confidential information later in my speech. DE&S has access to certain confidential information at the moment. The arrangements will provide for the GoCo to have access to that confidential information under a regime that retains its confidentiality and ensures that it will be maintained. If the hon. Lady will bear with me, I shall address that very shortly.
If, at the end of the evaluation process that I have described, a GoCo is assessed to be the best value-for-money option, a private sector partner will be appointed to manage DE&S on behalf of the Secretary of State. As I said, this will be a radical change, but not quite as radical as some have suggested. The GoCo will always act as the Secretary of State’s agent. All contracts entered into will continue to be in the Secretary of State’s name, and strategic governance will be provided by a governance function that will remain within the MOD. The GoCo’s customers will be the front-line commands and the MOD itself; it will work to their agenda and their priorities. I can therefore assure the House that this is absolutely not about handing over billions of pounds of taxpayers’ money to a private company and leaving it to decide what kit to buy for our armed forces.
The commercial competition is under way, and we expect it to be completed by spring next year. In parallel, we are developing a robust public sector comparator, which we call DE&S-plus, that will explore how far it is possible to go in reforming the organisation, making the maximum use of freedoms and flexibilities that we can negotiate within the public sector. If, at the end of this process, the GoCo model is indeed the chosen option, legislation needs to be in place so that we can move quickly to sign a contract with the successful bidder once a final decision is made.
Mr Hammond
The Secretary of State will remain accountable to Parliament, but we expect that the GoCo will have an accounting officer, probably its chief executive officer, who will therefore be liable to be called before the Public Accounts Committee.
Part 1 of the Bill sets out the provisions and safeguards necessary to underpin the operation of a GoCo. The most important element of almost any organisation is its people, and the smooth transfer of the DE&S work force to the GoCo operating company will be vital to its future success. The Bill confirms that the initial transfer of civil servants would be covered by the TUPE regulations. By virtue of being a contractor-operated entity, the GoCo would have considerable freedoms, particularly relating to its ability to recruit and reward its staff at market rates—freedoms that are not usually available to public sector bodies. The Bill confirms that in its activities on behalf of the Secretary of State it will enjoy certain statutory immunities and exemptions that are currently enjoyed by the Crown—for example, in relation to the Health and Safety at Work etc. Act 1974 and the Nuclear Installations Act 1965.
In addition to those freedoms, we also need to put in place a number of safeguards to protect Government and taxpayer interests. Therefore, the Bill provides the Secretary of State with the power to create a scheme to transfer the business to another contractor or, in extremis, back to the MOD, should that prove necessary. The Bill also provides for the Ministry of Defence police to have clear jurisdiction to investigate any offences that may relate to defence work carried out by contractors. It also makes provision to allow the Secretary of State to disclose information that he has received in confidence to a contractor, and to authorise the use of intellectual property. Clause 7 and schedule 2 put in place appropriate safeguards to prevent the unauthorised use or disclosure of confidential information by either the GoCo or its employees.
I am determined to drive a step change in the way in which the MOD carries out its defence procurement business, and to do so rapidly. The gradual erosion of skills and capability in the organisation over recent years cannot be allowed to continue if we are to ensure the MOD’s ability to deliver equipment to the front line. The measures in part 1 of the Bill will allow us to make the transition to a GoCo at the conclusion of the commercial competition, subject, of course, to the bids representing value for money for the taxpayer.
Part 2 relates to single-source procurement. Open competition remains the best way of ensuring value for taxpayers’ money. However, sometimes there is only a single provider of a capability we require, such as nuclear propulsion units. Sometimes the need to maintain critical national industrial capabilities or sovereign control of the intellectual property in equipment programmes requires us to place contracts with UK companies without a competitive process. European Union public procurement regulations specifically allow this for military equipment.
This so-called single-source procurement typically accounts for about 45%—about £6 billion a year—of the total that the MOD spends on Defence Equipment and Support, and it is likely to remain at that level for at least the next decade or so. Clearly, in the absence of the disciplines of the marketplace there needs to be a set of rules governing single-source procurement in order to ensure proper protection for the taxpayers’ interest.
The MOD currently uses a framework for single-source procurement that has remained largely unchanged for the past 45 years—the so-called yellow book. Under this system, which is voluntary, the profit that contractors can earn is fixed, but there are few if any incentives for them to reduce costs. Clearly, this does not serve the best interests of the taxpayer and neither does it help industry to maintain a competitive focus that will allow it to succeed in export markets. It is therefore in the interests of both the MOD customer and its industrial suppliers to create a framework with incentives for efficient and competitive behaviour.
In 2011 the Government commissioned Lord Currie of Marylebone to undertake an independent review of the yellow book. He recommended a new framework based on transparency, with much stronger supplier efficiency incentives and underpinned by more robust governance arrangements. Based on his recommendations and following extensive consultations with our major single-source suppliers, we have developed a framework that will be introduced through regulations provided for in part 2 of the Bill. At its core is the principle that industry gets a fair profit in exchange for providing the MOD with transparency on costs and the protections we need to ensure value for money. It will align the MOD and industry by allowing additional profit to be earned through delivery of defined efficiencies, sharing the benefits between industry and the taxpayer. A statutory basis for the regime will ensure widespread coverage across our single-source supply base and allow application of the regime throughout the single-source supply chain.
To police the new framework we will create a small, arm’s length body, to be known as the single source regulations office, with approximately 30 staff. Its role will be to keep the statutory framework under review and to monitor adherence to it. It will replace an existing non-departmental public body that has little power other than to oversee a voluntary framework that can be amended only by consensus. The existing regime has failed to evolve to reflect changing circumstances, largely because either party can block any change that it regards as contrary to its own interests.
The single source regulations office will ensure that we do not have to wait another 45 years to update the regime. It will be a source of expert advice to the Secretary of State and it will also act as expert adjudicator in disputes between the MOD and our single-source suppliers. Crucially, it will advise the Secretary of State on the setting of key profit rates for single-source contracts.
Critical to ensuring that the MOD is able to negotiate prices that are fair and reasonable to both suppliers and taxpayers is the generation of better quality and more standardised cost data. Therefore, regulations enabled by this Bill will introduce a requirement for standard reports throughout the life of single-source contracts worth more than £5 million, allowing the MOD to build up a database against which future pricing assumptions can be judged and on the basis of which more robust, long-term cost forecasts can be made.
On contracts above £50 million, suppliers will also have to provide quarterly contract reports to support effective contract management, report any relevant events and deliver information about their overhead costs, allowing us better to align the industrial capacity the MOD is paying for with our long-term capability requirements. Clause 25 also creates a power for the MOD to gain access to suppliers’ records.
In order to ensure that suppliers fulfil their reporting and transparency obligations, the Bill includes a compliance regime. Failure to provide the required information on a timely basis will result in a penalty being applied under a civil penalty regime. Penalties will vary with the value of the contract and the single source regulations office will act as the appeal body for the compliance regime.
We recognise that we are requiring our suppliers to provide unprecedented levels of sensitive commercial information that would be of great value to their competitors or to market analysts. We need this information to ensure we get value for money on what is a significant proportion of defence spending, but obtaining proprietary information by statute imposes on Government a duty to secure its proper protection. In order to ensure that the increased level of transparency and reporting we require is not subject to abuse, the Bill creates a new criminal offence of unauthorised disclosure of sensitive information obtained under the new single source framework, such as forecast financial performance and investment or rationalisation plans.
Given that confidential and commercially sensitive information is already exempt from freedom of information requests, we do not think it will be necessary to bar release under the Freedom of Information Act in order to protect the information. However, I am clear about our obligation to our suppliers in respect of their sensitive information and the Bill creates an order-making power to allow the Secretary of State to invoke a full statutory bar on disclosure under FOI if the routine exemptions prove inadequate to protect the exceptional level of information that we are requiring to be disclosed to us.
Mr Julian Brazier (Canterbury) (Con)
The framework being described by my right hon. Friend is largely welcome, but it seems odd that it is being applied to only part 2 and the 45% spent on single-source procurement. Many of us support in principle the idea of the GoCo, but introducing more commercial entities to the organisation that buys the other 55% of the kit could expose more commercial-in-confidence material to outside bodies than would be the case under a single-source supplier.
Mr Hammond
I assure my hon. Friend that the arrangements for our relationship with the GoCo, which will be largely contractual but partly regulatory, will also protect confidential information and make appropriate arrangements for the use of intellectual property held by the Secretary of State. I am dealing with the specific regime that will apply to part 2 contracts with single-source suppliers.
The new single-source regime will incentivise efficiency in operating costs and the minimisation of overheads. It will align the interests of the MOD and its suppliers, and support the competitiveness of the UK defence industry in both domestic and foreign markets.
Finally, I turn to the third part of the Bill, which relates to our reserve forces.
Sir Gerald Howarth
I am grateful to the Secretary of State because he has given way many times. Before he turns to the reserves, may I ask him about defence research? As he will know, my hon. Friend the Member for Mid Worcestershire (Peter Luff) and I feel strongly that we are not spending enough on defence research in this country. How does he see the protection of that important base being secured? Will it be handed over to the GoCo? What will be the regime to govern research?
Mr Hammond
My hon. Friend knows well, because he was a Minister at the time, that we made a commitment that a fixed minimum percentage of the defence budget will be spent on research and development. That is a matter of policy and such matters will remain for the MOD to determine. If a GoCo is appointed, it will execute policy, not make policy. I am happy to give him that reassurance.
Our reserves make an essential contribution to delivering the nation’s security at home and overseas. They are a valuable and highly valued part of our armed forces who work alongside their regular counterparts to deliver our military capability. Earlier this month, I published a White Paper that signalled a step change in the offer that we make to individual reservists and their employers. It set out a range of measures to revitalise the reserve forces and reverse the decline of the recent past, including paid annual leave and pension entitlements in respect of training days, access to key defence health services, greater predictability of reservists’ liability for call-out and a £500 per month per reservist award to small and medium-sized enterprises when their reservist employees are mobilised. There will also be substantially improved equipment and training opportunities.
Helen Goodman (Bishop Auckland) (Lab)
I asked the Secretary of State a parliamentary written question because the centre in Bishop Auckland in my constituency is to close. I asked what that will save the Government. Instead of answering the question, I received the information that the Government are investing £8 million in the reserve estate. I would like to give him another opportunity to answer the question. How much is being saved? Quite honestly, if nothing is being saved, do not close it.
Mr Hammond
I do not know whether the hon. Lady was in the House for my statement on the reserves. If she thinks that closing Army Reserve bases is about saving money, she has the wrong end of the stick. It is about delivering the commitments that we have made to the Army Reserve about training, equipment and proper organisation. It is about reflecting the changes in the regular Army and our commitment that reserve units will be paired with regular Army units.
I cannot answer the hon. Lady’s specific question at the Dispatch Box, but I will write to her. The vast majority of sites from which we are withdrawing Territorial Army or Army Reserve activity will remain because they house cadet units that will continue, so that is likely to be the case. This is not about saving money; it is about organising the reserve forces in a way that allows them to make their vital contribution to Future Force 2020.
The White Paper details a comprehensive package of changes that will allow us to create the integrated regular reserve force of the future. A small number of the planned changes require primary legislation. The first of those is the renaming of the Territorial Army. The TA was founded in 1908 and has served this country superbly in peace and in war. However, today’s TA soldiers have a function that is far wider and more important than the original home defence role envisaged by Haldane. As we reshape the Army—regulars and reserves—for the 21st century, it is right that we change the name of the TA to the “Army Reserve” better to reflect its future role. The Bill also provides for the consequential renaming of the Army’s ex-regular reserve force as the “Regular Reserve”.
Reflecting the integral role that reservists will play in almost all future military operations, the Bill extends the powers to mobilise reservists across all three services. Under the Reserve Forces Act 1996, reservists can be mobilised only under specific circumstances. The Bill will enable reservists to be mobilised for the full range of tasks that the armed forces may be asked to undertake.
Bob Stewart (Beckenham) (Con)
This is just a small point, but I recall that the Territorial Army was deployed to the 1st British Corps of the British Army of the Rhine, so it has not dealt just with home defence.
Mr Hammond
My hon. Friend is absolutely right. The role of the Territorial Army has evolved and it will evolve further. My point was that when Haldane introduced it in 1908 by consolidating the county militias, he had in mind a home or territorial defence role, which the name reflects. I am happy to agree with my hon. Friend that the role that the TA has played over the years has been substantially greater than the role envisaged for it originally.
Hon. Members on both sides of the House have raised concerns over the possibility of employment discrimination against reservists. The Bill provides improved employment protection by allowing a right of access to the employment tribunal without a qualifying employment period for an unfair dismissal claim where the dismissal relates to the employee’s reserve service. Separately, there is already a criminal offence of dismissal because of call-out for reserve service.
However, we recognise that there is a perception among many reservists that they are disadvantaged in the workplace by their reserve service. We believe that the changes that we have set out in the White Paper will greatly improve relations between reservists and their employers, but we take the issue of discrimination against reservists very seriously. We have established a webpage through which reservists can report incidents of perceived discrimination and we will investigate them. If we find that there is a case for further action, we will take it. We will consider whether further measures may be taken in the next quinquennial Armed Forces Bill, which is due to be introduced in this House in 2015.
Mr James Arbuthnot (North East Hampshire) (Con)
I am delighted with what my right hon. Friend has just said. Will he consider, among the further measures that might be taken, action to help reservists who find that their promotion is held back by their being in the reserve forces?
Mr Hammond
I am grateful to my right hon. Friend. That example fits exactly into the category of discrimination in the workplace. We must look objectively at the examples that we are given to establish whether they constitute actual and systemic discrimination against reservists, rather than mere perceptions. The time scale that we have set out is appropriate. We have set up the webpage and are starting the process now. In 2015, when the next quinquennial Armed Forces Bill is introduced, the time will be right to analyse the information that we have received and to consider what action is appropriate.
The support of employers is crucial to delivering our future reserve forces, and we seek to strengthen the reservists and the MOD’s relationship with them. The White Paper set out a range of measures to deliver a sea change in those relationships. While small and medium-sized enterprises will benefit from all of the measures, I have acknowledged previously that reserve service can have a particular impact on them as a result of their scale. Therefore, by amending clause 44 of the Reserve Forces Act 1996 to allow the introduction of a financial award of £500 per month per reservist for SMEs when any of their reservist employees is mobilised, we will target additional resources at this sector and explicitly recognise the additional impact SMEs may have to absorb when a reservist employee is mobilised.
The measures in part 3 support the package of proposals set out in the White Paper. They will ensure that we have the well-trained, well-equipped and integrated reserve forces we need, which are able to deploy with their regular counterparts as part of Future Force 2020.
The driver for change running through the Bill is the requirement to deliver the capabilities our armed forces need while ensuring value for money for taxpayers, whether that is through better procurement or more efficient and effective use of the reserves. The measures contained within it allow fundamental change to how we procure our military equipment, and ensure that we will be able to make full use of our reserve forces in the future.
Whatever else we may disagree on, all of us in this House place the utmost importance on properly equipping and supporting our armed forces. The Bill will ensure that we can be confident of our ability to do so in the future. I hope the measures will command widespread support, and that we will be able to take them forward through this House and the other place on a consensual basis. I commend the Bill to the House.
Mr Philip Hammond
I am happy to clarify that point. As the right hon. Gentleman knows, we are in the process of devolving budget responsibility to the front-line commands, including responsibility for equipment procurement and support, starting with the smaller equipment procurement projects, but eventually including all but the very largest and most strategic. They will be the customers for the GoCo, just as in the current model they are the customers for DE&S. One of the disciplines that the proposed change will introduce is a harder boundary between the customer and the provider. At the moment, we suffer from a permeable boundary that allows decision making sometimes to be a bit woollier than it should be.
Mr Murphy
I thank the Secretary of State for that genuinely helpful intervention. In Committee, we will have to interrogate the expertise of the civil servants operating at that interface. I mean no disrespect to anyone, but they are up against remarkably talented negotiators with an entirely legitimate commercial interest, so we have to get that interface right. The simplicity the Secretary of State spoke about is important.
Mr Hammond
I apologise for intervening on the right hon. Gentleman again, but that is exactly the point: the civil servants and the military people in the front-line commands—who are the customers—will interface with DE&S-plus or GoCo, which is their service provider. It is the service provider that will have to deal with the hard-nosed negotiators of the multi-billion pound international defence companies, and which will need to hire and fire in the marketplace at market rates in order to face them across the table on a level playing field—if I may mix my metaphors.
Mr Murphy
We are looking for a level playing field and a level negotiating table—if a metaphor it is—because this issue is so significant. I welcome what the Secretary of State said about hopefully simplifying and strengthening the process. However, procurement might have become a little more complicated as a consequence of a speech given today by the Chief Secretary to the Treasury in another place—which would normally mean the second Chamber, but which on this occasion appears to mean the Royal United Services Institute. We are pretty clear: Labour have always said that we are committed to the minimum credible independent nuclear deterrent. Actually, I should correct myself: we have not always said that.
Mr Murphy
Thank you, Mr Deputy Speaker. To be fair to the hon. Member for Cheltenham (Martin Horwood), it was impossible for him not to take the bait. [Interruption.] The Secretary of State sensibly says, “He’s the only Lib Dem here.” There is no audience, as it were, from his party for him to perform for, although the Chief Secretary to the Treasury will make the Lib Dems’ policy clear tomorrow in the Chamber—I hope. However, there is an issue—I will finish on this matter after this point, Mr Deputy Speaker—about how taxpayers’ money has been used to inform a Lib Dem process. I accept that the Government will say that the review is a Government document, but it was intended to inform the Lib Dem manifesto.
One of the primary arguments for a GoCo is its supposed ability to attract and retain higher skills and prevent a loss of talent from DE&S. The Opposition are clear about the need to increase the skill levels in our armed forces, but we recognise that this requirement limits itself to those in uniform. Those at the front line of defence procurement within government should be the equal in experience of those within industry—a point to which the Secretary of State has alluded. We will carefully scrutinise the procedures in place to ensure that the assessment phase is fair and transparent, and that sufficient controls are in place to ensure that those involved in the possible preparation of a GoCo cannot immediately go and work in that GoCo, a point to which we will return.
While we are on this theme, it seems unacceptable that the Government have not yet fully published their findings on The Sunday Times revelations on cash for access within the Ministry of Defence. The Secretary of State, of course, wrote to me on the matter, explaining the outcomes, but this was a private letter and I was not at liberty to disclose its contents and have chosen not to do so. I think it important, however, for the Secretary of State to provide the full details to the House.
Mr Philip Hammond
I am grateful to the right hon. Gentleman but I was not aware that I had not explained the situation publicly. If he would care to ask me a written parliamentary question, I will publish in the public domain the full information I have provided to him.
Mr Murphy
That is a kind offer from the Secretary of State, although he could have done so off his own back, and the problem is that we are running out of time for named day questions and replies. The alternative, with his permission, would be for me simply to tweet his letter. That would be quicker and I would be happy to do so if he so wishes. [Interruption.] With the Secretary of State’s permission, I will now tweet the letter I received some months ago detailing the Government’s response to The Sunday Times revelations.
These issues, alongside the impact of any reform of our strategic and working relationships with major international partners, particularly the US, and providing clarity on the ownership of risk, will be priorities for the Opposition. The restructuring of DE&S, however, should also be seen as part of a wider structural reform of defence procurement.
There is much else that I could have said, but time is against us today and my colleagues will raise in Committee additional points about sovereign capabilities, long-term planning and predictability for British industry, so I shall now turn briefly to reform of the reserves.
The Opposition want to ensure that reservist recruitment is successful so that the reserves can work alongside regulars to project force globally. Our reservists make an enormous contribution here at home in many ways. About 2,000 of them, some of whom I saw for myself when I went to see the Greco-Roman wrestling, helped to protect the London Olympics. Many serve overseas in far-away terrain in the name of national security. We should pay tribute to each one of those who have served, and above all to those who have lost their lives serving our nation.
While we champion the reserve force, we recognise the need to modernise. The name change to “Army Reserve” will reflect a modern composition and hopefully help to attract a new generation of recruits. The task ahead is, however, enormous and we should not pretend otherwise. The plan to double the size of the reserve forces to 30,000 by 2018 is now central to the Government’s ability to deliver their planning assumptions—originally, of course, designed for an Army of 95,000, but after further cuts now reliant on a regular force of just 82,000.
The scale of this task is underlined if we consider that the reserve forces of the US, Canada and Australia make up between 40% and 50% of their armies, as opposed to 20% here in the UK. Many analysts worry that, rather than reform of the Army being synchronised with that of the reserves, both are disjointed and the reserve uplift will not complement the regular Army but supplement lost capacity. Cuts in the regular Army are happening regardless of the success of any uplift in the reserves, rather than the one being contingent on the other.
This development comes as Army reserve recruitment has hit real trouble. The figures are publicly available—that recruitment targets were missed by more than 4,000 last year. Great care has to be taken to ensure that the loss of 26 Territorial Army centres does not make civilian communities in certain areas more disconnected from the military and disinclined to volunteer for the reserves.
Mr Murphy
My point is that in the same context, Regular Army numbers increased. I do not want us to bat each other about the head on this; I am assessing how we can make a success of the boost in reservist numbers. The comparison the hon. Gentleman invites me to draw, however, is with the Labour Government, and we boosted the size of the Regular Army. His party said that it was not big enough; it wanted an even bigger Army and was elected on a manifesto of going in that direction. The comparison is clear: we boosted the number of regulars. Of course, there is always pressure when it comes to reservists, who were under-recruited for about nine decades, so this is not a short-term problem for us or the current Government to grapple with.
Mr Philip Hammond
Will the right hon. Gentleman clarify two points? Does he accept that the six-month cancellation of TA training announced by the previous Government in October 2009 was not the way to stimulate TA recruitment and confidence? Also, as he is talking about Regular Army numbers, does he now accept a Regular Army of 82,000 as the basis for Future Force 2020, or does he still hanker after a reversal of that reduction?
Mr Murphy
As the Secretary of State knows, the previous decision on training was based on the recommendation of the Regular Army and the best available military advice. It was the type of situation that he faces whenever it comes to considering the best available military advice. We will make the detailed shape of the formation of our forces clear in our strategic defence review and in advance of the election.
The Opposition support moves to improve the training for reservists and ease their deeper integration with regular forces. We also support moves to use niche civilian skills, for example on cyber, in a military setting as well as to expand occupational health services. There are, however, areas where we believe the Government could go further. It is essential that the changes, particularly the extended periods of training and deployment, be compatible with employment patterns and that the reforms be designed in collaboration with employers.
It is worth noting the huge impact the changes could have on employers, particularly small employers. More than 600,000 businesses in the UK employ between two and four people. I suspect that we Members all employ a similar number of people in our parliamentary offices. We should ask how we would cope with losing a staff member for up to a year. Although I am sure that each and every one of us would be enormously supportive of a staff member’s military ambition, we might struggle to fill that space. Once we reflect on how we would feel about that, it gives us a better understanding of what many within that core group of 600,000 businesses will be confronted with.
Our view is that the reservists in those businesses will be a remarkable bonus and asset for them, but we must do more together to make that argument. A survey by the Federation of Small Businesses found that for one in three businesses, nothing would encourage them to employ a reservist, whereas almost 40% of those who had employed or would consider employing a reservist said that they believed that the Government’s proposed reforms would have a negative impact on their business. I do not agree with that; nevertheless, it is a sentiment felt by all too many businesses.
I welcome the announcement about access to unfair dismissal tribunals, but, as we have said before—and the Secretary of State referred to this—we believe that Ministers could go further. Current legislation clearly states that an employer has a duty to re-employ a returning reservist in the occupation in which he was employed before his service, on the same terms and conditions. There is, however, no legislation to prevent employers from discriminating against reservists in their hiring procedures on grounds of military affiliation.
We hope that, rather than embarking on a new consultation, the Government will work with employers on new legislation to provide further protection against discrimination in the hiring of reservists, which would need to be coupled with an obligation for reservists to make a transparent declaration at the interview stage. We believe that that should be part of a wider collaborative approach, and that a permanent employer engagement committee should be established to enable Governments to take the lead in advocating the employment of reservists.
There has been some debate about whether £1.8 billion is the right amount to invest, but we should also consider whether it will provide value for money. We hope that Ministers will be able to shed light on that in Committee. We shall want to know what proportion of the money is intended to fund financial incentives for employers and the “reservist award”, which tops up reservists’ salaries to match their civilian salaries. We shall also want to know whether the £1.8 billion covers reservists’ training, medical costs and pension payments, or whether those will come from another part of the MOD’s core budget. We are keen to establish what elements of the Reserves 2020 plan have clear funding streams, and where there may be unknown liabilities in a budget that involves competing interests.
The Bill has the potential to help the United Kingdom develop world-class procurement procedures that will be the envy of every nation. It gives us an opportunity to make a success of the enormous challenge of doubling the reserve force. The Opposition will support and scrutinise its proposals in Committee, and will give it a fair passage today.
Mr Arbuthnot
As I have said before, the hon. Lady performs a valuable service on the Defence Select Committee. She has put her finger on an extremely important point, which was also raised by the Select Committee in our report on defence acquisition. She is right; this matter has to be covered. I asked my right hon. Friend the Secretary of State a question about how the United States and France were reacting to the proposal, and he was able to say that he had received a supportive letter from the United States that very morning. I also know that there is a working party in operation with the United States to try to ensure that any problems are ironed out. It is true that other countries think we are being very brave. If we are indeed being so courageous, and if this works, we may well forge the way for other countries to follow us. It may well be that whichever company succeeds with the GoCo in this country could find vast new opportunities opening up for it. For example, it could take over the defence procurement of the United States, which would make somebody extremely rich.
The next question, which has been raised by ADS and by the Federation of Small Businesses, relates to how the GoCo proposition would affect small and medium-sized enterprises. The FSB has said that it is broadly supportive of the Government’s proposal, as contained in the Bill, but that it is vital that the needs of SMEs be considered when the reforms are implemented. I echo that, and I am sure that my right hon. Friend the Secretary of State will do so as well.
The time line involved is ambitious. I understand that there is a suggestion that we might reach a final conclusion in April 2015. That must remind us all of another fixture in our diaries for May 2015—the general election. Surely the risk of this project running up against the next election is huge.
Mr Philip Hammond
Perhaps I can help my right hon. Friend. The expectation is that the competitive process will be completed by the spring of next year, with the contract award in the late summer and with the GoCo standing up, if that is the solution we choose, towards the end of next year or at the very beginning of 2015—around December or January.
MOD Annual Report and Accounts
Lord Hammond of Runnymede Excerpts(11 years, 1 month ago)
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The Secretary of State for Defence (Mr Philip Hammond)
I am today publishing the Ministry of Defence’s annual report and accounts 2012-13. It provides a comprehensive overview of the Department’s financial performance for the year, together with data on some specific areas of non-financial performance, including factual information on the Department’s progress against structural reform and business plan priorities.
Astute Boat 6
Lord Hammond of Runnymede Excerpts(11 years, 1 month ago)
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The Secretary of State for Defence (Mr Philip Hammond)
I am pleased to announce that the Astute class submarine hull 6 is to be named HMS Agamemnon. The boat is expected to join HMS Astute, HMS Ambush, HMS Artful, HMS Audacious and HMS Anson in service in 2022.
The seven Astute class boats planned for the Royal Navy are the most advanced attack submarines ordered by the Ministry of Defence, with improved firepower and communications, and the ability to operate stealthily for extended periods. The crew also benefit from greatly improved accommodation and facilities.
The boats will undertake a wide range of tasks in support of military operations worldwide.
Afghanistan (Roulement)
Lord Hammond of Runnymede Excerpts(11 years, 1 month ago)
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The Secretary of State for Defence (Mr Philip Hammond)
The next roulement of UK forces in Afghanistan is due to take place in October 2013. Around half of these units will form Taskforce Helmand under the command of 7th Armoured Brigade. The remainder will deploy within Helmand and to other locations in Afghanistan—particularly Kandahar and Kabul—as part of the UK’s overall contribution. The forces deploying include1:
7th Armoured Brigade Headquarters and Signal Squadron (207) |
Headquarters 101 Logistics Brigade |
857 Naval Air Squadron |
3rd Regiment Royal Horse Artillery |
The Royal Scots Dragoon Guards (Carabiniers and Greys) |
9th/12th Royal Lancers (Prince of Wales’s) |
Elements of The Queen’s Own Yeomanry |
Elements of 5th Regiment Royal Artillery |
Elements of 14th Regiment Royal Artillery |
Elements of 16th Regiment Royal Artillery |
Elements of 32nd Regiment Royal Artillery |
Elements of 39th Regiment Royal Artillery |
Elements of 47th Regiment Royal Artillery |
32 Engineer Regiment |
63 Works Group Royal Engineers |
Elements of 36 Engineer Regiment (Search) |
Elements of 42 Engineer Regiment (Geographical) |
Elements of 101 (City of London) Engineer Regiment (Explosive Ordnance Disposal) |
Elements of 10th Signal Regiment |
Elements of 14th Signal Regiment (Electronic Warfare) |
Elements of 15th Signal Regiment (Information Support) |
Elements of 21st Signal Regiment (Air Support) |
Elements of 30th Signal Regiment |
Elements of 39th (Skinners) Signal Regiment |
1st Battalion Coldstream Guards |
The Highlanders, 4th Battalion The Royal Regiment of Scotland |
2nd Battalion The Royal Anglian Regiment |
3rd Battalion The Mercian Regiment (Staffords) |
Elements of 3rd Battalion The Royal Anglian Regiment |
Elements of 3rd Battalion The Royal Welsh |
Elements of 4 Regiment Army Air Corps |
Elements of 9 Regiment Army Air Corps |
2 Logistic Support Regiment The Royal Logistic Corps |
27 Theatre Logistic Regiment The Royal Logistic Corps |
Elements of 7 Theatre Logistic Regiment The Royal Logistic Corps |
Elements of 11 Explosive Ordnance Disposal Regiment The Royal Logistic Corps |
Elements of 29 Regiment The Royal Logistic Corps |
Elements of 151 (London) Transport Regiment The Royal Logistic Corps |
Elements of 158 (Royal Anglian) Transport Regiment The Royal Logistic Corps |
Elements of 162 Movement Control Regiment The Royal Logistic Corps |
Elements of 159 Supply Regiment The Royal Logistic Corps |
Elements of 148 (Expeditionary Forces Institute) Squadron The Royal Logistic Corps |
2 Medical Regiment |
202 (Midlands) Field Hospital |
203 (Welsh) Field Hospital |
2 Close Support Battalion Royal Electrical and Mechanical Engineers |
Elements of 7 Air Assault Battalion Royal Electrical and Mechanical Engineers |
Elements of 101 Force Support Battalion Royal Electrical and Mechanical Engineers |
Elements of 103 (Hybrid) Battalion Royal Electrical and Mechanical Engineers |
111 Provost Company Royal Military Police |
Elements of 114 Provost Company Royal Military Police |
Elements of Special Investigation Branch Regiment Royal Military Police |
Elements of The Military Provost Staff Corps |
Elements of 1st Military Working Dog Regiment |
Elements of 1 Military Intelligence Battalion |
Elements of 2 Military Intelligence (Exploitation) Battalion |
2 (Army Cooperation) Squadron, Royal Air Force |
617 Squadron, Royal Air Force |
51 Squadron Royal Air Force Regiment |
58 Squadron Royal Air Force Regiment |
Number 5 Royal Air Force Force Protection Wing Headquarters |
Number 2 Tactical Police Squadron, Royal Air Force |
Elements of 24 Squadron, Royal Air Force |
Elements of 30 Squadron, Royal Air Force |
Elements of 32 (The Royal) Squadron, Royal Air Force |
Elements of 216 Squadron, Royal Air Force |
Elements of 39 Squadron, Royal Air Force |
Elements of 13 Squadron, Royal Air Force |
Elements of 27 Squadron, Royal Air Force |
Elements of 51 Squadron, Royal Air Force |
Elements of 99 Squadron, Royal Air Force |
Elements of 33 (Engineering) Squadron, Royal Air Force |
Elements of 90 Signals Unit, Royal Air Force |
Elements of 1 Air Control Centre, Royal Air Force |
Elements of Tactical Supply Wing, Royal Air Force |
Elements of 1 Air Mobility Wing, Royal Air Force |
Elements of Tactical Medical Wing, Royal Air Force |
Elements of Number 1 Royal Air Force Police Wing |
Elements of Number 2 Royal Air Force Police Wing |
Elements of 2 (Mechanical Transport) Squadron, Royal Air Force |
Elements of 93 (Expeditionary Armaments) Squadron, Royal Air Force |
Elements of Engineering and Logistics Wing, Royal Air Force Odiham |
1Where the contribution is 10 personnel or more. 2In some cases there will be up to three rotations of Royal Navy and Royal Air Force individual augmentees during Herrick 19, due to differing deployment durations often occurring outside the numbered Herrick iterations. |
In addition to the list of formed units, individual augmentees from each of the services will continue to deploy as part of this integrated force package. In total we expect around 1,119 individual augmentees to deploy on operations. This will be comprised of 246 Royal Navy personnel, 370 Army personnel and 503 Royal Air Force personnel2. The Royal Air Force currently provides the command element of Headquarters Joint Force Support (Afghanistan), with the wider headquarters manned by individual augmentees from all three services. 101 Logistic Brigade will deploy in November to take on this role.
Volunteer and ex-regular members of the reserve forces will continue to deploy to Afghanistan as part of this integrated force package, and we expect to issue around 400 call-out notices. On completion of their mobilisation procedures, the reservists will undertake a period of training and, where applicable, integration with their respective receiving units. The majority will serve on operations for around six months although a small proportion of any force that is stood down due to force level reductions is likely to be reservist.
As the Prime Minister announced in December 2012, the UK’s conventional force levels in Afghanistan will draw down to around 5,200 by the end of 2013, from the current level of around 7,900. As part of this draw down, there will be around 6,000 personnel in Afghanistan from autumn 2013. However, this figure may fluctuate and occasionally exceed this total due to relief in place and additional surges into theatre.
As announced by the Defence Secretary on 14 May 2013, some elements of 7th Armoured Brigade will deploy on Op Herrick 19 for up to eight months. This will remove the requirement to train and deploy an extra brigade, at greatly reduced scale, to cover the final months of 2014. It will also align tours to key milestones in the transition process, such as the Afghan presidential elections in spring 2014. A small number of reservists may voluntarily serve eight months.
I shall make a further statement on 7th Armoured Brigade’s planned replacement formation, 20th Armoured Brigade, nearer the time of their deployment.