Reserve Basing Statement Clarification

Lord Hammond of Runnymede Excerpts

Thursday 4th July 2013 Written Statements

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

Further to my announcement of 3 July about Reserves Forces and my associated written ministerial statement, Official Report, column 49WS, about “Army Reserve (Structure and Basing)” I wish to clarify three points:

Kilmarnock is an existing Defence site and was included in the baseline of current Army Reserve sites in calculating the numbers of sites referred to in my statement. It will, in future, be occupied as an Army Reserve site. Arguably, we could have included it as a “new” site and reduced the baseline by one. The outcome is the same; that Scotland will have 46 Army Reserve sites in the future.

With regard to my answer to my hon. Friend the Member for Vale of Glamorgan (Alun Cairns), 3 July 2013, Official Report, column 944, I can confirm that there will be a Royal Naval Reserve presence at Barry and in Cardiff.

Finally for clarity, in relation to my response to the hon. Member for Dudley North, (Ian Austin), 3 July 2013, Official Report, column 939, regarding the Royal Mercian and Lancastrian Yeomanry, I can advise the House that, in addition to the regimental headquarters, to be known as the Scottish and North Irish Yeomanry, there will also be a new headquarters squadron formed in Edinburgh; it is proposed that this is named HQ (Lothians and Border Horse) Squadron.

Reserve Forces

Lord Hammond of Runnymede Excerpts

Wednesday 3rd July 2013 Commons Chamber

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

With permission, Mr Speaker, I wish to make a statement on the future of our reserve forces. In November last year, I announced a formal consultation, which lasted until January this year. I am grateful for the more than 3,000 responses we received. I have placed copies of the summary of consultation findings in the Library of the House.

More than 25,000 reservists from all three services have deployed on operations over the last 10 years. Sadly, 30 have paid the ultimate price, and I know the whole House will want to join me in saluting their sacrifice.

In 2011, the Future Reserves 2020 Commission reported that our reserves were in serious decline. This Government responded by committing to revitalise our reserve forces as part of Future Force 2020, reversing the decline of the recent past, growing their trained strength to 35,000 by 2018 and investing an additional £1.8 billion in them over 10 years.

We recognise the extraordinary commitment reservists make and, in return, we commit to deliver the reservist a challenging and rewarding experience, combined with an enhanced remuneration and support package and an improved deal for employers. However, to recruit the reserves we need and to train and equip them to be fit for purpose in Future Force 2020 requires substantial change. I am today publishing a White Paper setting out our vision for the reserve forces and the detail of how we will make reserve service more attractive. It also confirms our intention to change the name of the Territorial Army to Army Reserve—better to reflect the future role.

Alongside the White Paper, I am publishing the first report of the independent external scrutiny group, which I announced last year to oversee and report on our progress in delivering Future Reserves 2020. The White Paper reiterates our commitment to improve access to modern equipment and to provide better training as part of the £1.8 billion package. About £200 million will be invested in equipment for the Army Reserve and to kick-start that programme, I can announce today that we will bring forward to this year £40 million of investment in new dismounted close combat equipment, meaning that upgraded weapons and sights, night vision systems, and GPS capabilities will start to be delivered to reserve units before the end of the year.

The integration of regulars and reserves is key to Future Force 2020. That integration prompts a closer alignment of the structure of remuneration across the armed forces. We have therefore decided to increase reservists’ total remuneration in two ways: through the provision for the first time of a paid annual leave entitlement in respect of training days, and through the accrual of pension entitlements under the new future armed forces pension scheme 2015 for time spent on training as well as when mobilised. These two measures represent a substantial percentage increase in total reserve remuneration.

The White Paper sets out details of an improved package of occupational health support for reservists to underpin operational fitness. We will also ensure that effective welfare support is delivered to reservists and their families. Welfare officers are being recruited now for Army Reserve units. Additionally, we have already implemented measures to streamline and incentivise the process by which those leaving the regular forces can transfer to the volunteer reserve, with accelerated processing, passporting of medical and security clearances and retention of rank, as well as a “signing-on” bounty of £5,000 for ex-regulars and for direct entry officers joining the Army Reserve.

The support of employers is crucial to delivering the future reserve forces. We seek to strengthen the Ministry of Defence’s relationships with employers so that they are open and predictable. The White Paper sets out how we will make liability for call-up more predictable; make it easier for them to claim the financial assistance that is already available; increase financial support for small and medium-sized enterprises by introducing a financial award of £500 a month per reservist when any of their reservist employees are mobilised; and improve civilian-recognised training accreditation to help employers to benefit from reserve training and skills.

The White Paper signals a step change in Defence’s offer to employers. I urge them to take up this challenge. In turn, by building on the armed forces covenant with the introduction of the corporate covenant, we will ensure that reservist employers get the recognition they deserve. However, while Defence is fully committed to an open and collaborative relationship with employers, it is essential that the interests of reservists should be protected. Dismissal of reservists on the ground of their mobilised reserve service is already illegal. We will legislate in the forthcoming defence reform Bill to ensure access to employment tribunals in claims for unfair dismissal on the ground of reserve service, without a qualifying employment period.

The job that we are asking our reservists to do is changing, and the way in which we organise and train them will also have to change. That will impact on force structure, and on basing laydown. The force structures and roles of the maritime and air reserves will remain broadly similar to now, although increased in size and capability. The Army, however, has had substantially to redesign its reserve component to ensure that regular and reserve capabilities seamlessly complement each other in an integrated structure designed for the future role. That redesigned structure has been driven primarily by the changed function and roles of the Army Reserve and by the need to reach critical mass for effective sub-unit training.

The details of the future Army Reserve structure are complex, and beyond what could coherently be explained in an oral statement. I have therefore laid a written statement, supported by detailed documents that have been placed in the Library of the House, showing the complete revised order of battle of the reserve component of Army 2020.

The restructuring will require changes to the current basing laydown of the Army Reserve. The TA currently operates from 334 individual sites around the United Kingdom, including a number of locations with small detachments of fewer than 30 personnel. Some of those sites are seriously under-recruited. To maximise the potential for future recruitment, the Army has determined that, as it translates its revised structure into a basing laydown, it should take the opportunity to rationalise its presence by merging small, poorly recruited sub-units into larger sites in the same conurbation or in neighbouring communities. As part of that exercise, the Army Reserve will open or reopen nine additional reserve sites.

However, the consolidation of all poorly recruited units would have led to a significant reduction in basing footprint and a significant loss of presence in some, particularly rural, areas. I have decided that that would not be appropriate as we embark on a major recruitment campaign. We will therefore retain a significant number of small and under-recruited sites that the Army considers could become viable through effective recruiting. The units on those sites will be challenged to recruit up to strength in the years ahead. Over the next couple of years, we will work with local communities, through the Army’s regional chain of command, to target recruitment into those units. I know that right hon. and hon. Members will want to lead their local communities in rising to that challenge.

The result of the decisions I am announcing today is that the overall number of Army Reserve bases will be reduced from the current total of 334 to 308—a net reduction of 26 sites. With your permission Mr Speaker, I will distribute a summary sheet that identifies the reserve locations being opened and those being vacated.

The White Paper and the written ministerial statement on structure and basing set the conditions to grow and sustain our reserves as we invest an additional £1.8 billion over 10 years in our vision for the integrated reserves of Future Force 2020. That vision calls for an even bigger contribution from our reservists and from employers as we expand the reserve forces. I am confident that both will rise to the challenge.

For the first time in 20 years, the reserves are on an upward trajectory. Those of us who are neither reservists nor employers can none the less provide vital support and encouragement to our fellow citizens who make such a valuable contribution to delivering our national security, and I know that Members on both sides of the House will want to take the lead in urging our communities to get behind the reserves and the recruiting drive that will build their strength to the target level over the next five years. I commend this statement to the House.

--- Later in debate ---

[Mr Speaker]

It is certainly open to the right hon. Gentleman to continue. If it was the Government’s intention that such further details should be available in the Vote Office and they are not, that is at the very least regrettable, and arguably incompetent. If it was not the intention for the material to be available, it should have been.

[Mr Hammond]

rose—

--- Later in debate ---

[Mr Speaker]

Order. Before the Secretary of State rises to respond, he said in his statement:

“With your permission Mr Speaker, I will distribute a summary sheet that identifies the reserve locations being opened and those being vacated.”

It was not clear from that wording quite when the intention to distribute was, but clearly significant numbers of Members had not received a copy of the tri-service site summary by location, which is a detailed piece of information on one sheet. It was, however, apparently available to members of the media. I hope that the Secretary of State—[Interruption.] Order. I hope that the Secretary of State can clarify the situation, but on the face of it, it is a very considerable discourtesy to the House of Commons, and I hope he can either prove it is not, or if he recognises or accepts that it is, I am sure he will be gracious enough fulsomely to apologise to the House of Commons.

[Mr Hammond]

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

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

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

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

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

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

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

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

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

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

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

[Mr Hammond]

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

[Mrs Madeleine Moon (Bridgend) (Lab)]

As we withdraw from Afghanistan it will be increasingly important to have community buy-in and community awareness of our ongoing defence needs, so the building up of reserve forces within communities will be vital. It is disappointing that hon. Members, who will take a lead often in their communities to encourage people to focus on the reserve forces, do not have a copy of the statement and have belatedly had copies of the details of the areas that have been closed. I find that two are being closed in Wales, which is worrying for me because Wales’s defence footprint is already particularly small compared with that of the rest of the UK. Will the Secretary of State assure me that he will look at the impact on recruitment in Wales and the opportunity for reservists in Wales to continue to serve following the closure of these bases?

[Mr Hammond]

I can tell the hon. Lady that I have already done that. For example, the Territorial Army centre at Caernarfon is to close and I have looked at the distribution of the home addresses of TA members serving at that base. The nearest alternative base where they would be expected to go is at Colwyn Bay and, in fact, the majority of them live closer to Colwyn Bay than they do to Caernarfon. So we would expect the majority of them to continue to serve at the Colwyn Bay TA centre.

I have to explain to the House that when I said in my statement that some of these small units are significantly under-recruited, I was not overstating my case. We have TA centres with six or seven people enlisted at them, and we have one where the average attendance on training nights has been one over the past year. This is not just a question of the careful husbandry of resources; it is also a question of delivering the kind of training that we have promised members of the Army Reserve. We cannot deliver effective training unless we have a critical mass at the sub-unit level, and that is the driver of all the changes we are announcing today.

[Mr James Gray (North Wiltshire) (Con)]

I warmly welcome many of the detailed announcements that the Secretary of State has made this afternoon about the way in which both regulars and civilians will be incentivised to join the TA and how employers—small and medium-sized enterprises, in particular—will be able to look after their employees. Nevertheless, is he not concerned that there will be a time gap between a large number of regular soldiers, sailors and airmen being made redundant, which is happening at the moment, and having the 30,000 fully trained TA members that he intends to have in place? What is he going to do about the time gap?

[Mr Hammond]

Of course, as my hon. Friend correctly presents, it will take us until 2018 to have achieved a 30,000-strong trained Army Reserve. We are seeking to capture as many ex-regulars leaving the regular service as we possibly can, and we expect that the £5,000 transfer bounty, together with the streamlining of the procedures for transfer from the regular to the reserve, will have a significant impact. He rightly says that there will not be a smooth trajectory between now and 2018—some of the measures we have to take will have short-term negative impacts before they deliver long-term positive gain—but we are clear that this is the right path to adopt.

[Joan Walley (Stoke-on-Trent North) (Lab)]

Given the confusion that we have just had, can the Secretary of State categorically confirm that our campaign to keep the Cobridge TA centre in Stoke-on-Trent open, not least because of its community work, has meant that it is definitely not for closure and will stay open? Will he also give me an assurance about the recent Supreme Court judgment relating to the late Corporal Stephen Allbutt, whereby the Ministry of Defence has a duty of care properly to equip all serving armed forces under the Secretary of State’s jurisdiction? Will he assure me that the change being brought forward today will make sure that all our armed forces will be properly equipped and kitted out?

[Mr Hammond]

I am a bit astonished that someone who was a supporter of the previous Government has the effrontery to sit there and challenge me to declare that all our armed forces will be properly equipped when they go into battle, given the shocking examples that we had during the last years of the last decade in Afghanistan.

The hon. Lady correctly says that we have a duty of care, and we take it very seriously; we have made a very clear political and moral commitment to properly equipping our armed forces. I have to say to her that I do not believe that enshrining that as a legal duty, as the Supreme Court appears to have done, will help the operation of our armed forces. She also asked me specifically about Stoke-on-Trent and I can tell her that if it is not on the list we have supplied, it is not going to be vacated.

[Several hon. Members]

rose—

[Sir Menzies Campbell (North East Fife) (LD)]

I hesitate to pile Pelion on Ossa, but you will recall, Mr Speaker, that earlier this year I had occasion to raise a similar issue with you about the provision of information—the MOD has form and, no doubt, the opportunity will be taken to revise procedures.

A quick perusal of the list allows me to say that I am grateful that the bases at RAF Leuchars where an engineer regiment is based, and at Cupar, where a yeomanry squadron is based, both of which are in my constituency, are to be preserved. May I make a point to my right hon. Friend that is less about process and more about substance? Those, such as me, who have been in the House for a long time have on many occasions heard statements of the kind we have just heard from him advocating a much greater use of the value of reserves—like me, the hon. Member for Canterbury (Mr Brazier) will recall many of them. The issue now is not what the statement says; it is the extent to which it will be implemented and the extent to which the MOD will be answerable if it is not.

[Mr Hammond]

First, I am indeed embarrassed by what appears to have just occurred. As you would expect, Mr Speaker, I will be investigating precisely what has happened and I will write to you to let you know what has gone wrong this afternoon. I understood that copies of the statement and copies of the spreadsheet would be distributed as soon as I sat down, and I apologise for the fact that that did not happen.

My right hon. and learned Friend is, of course, right to say that a statement in itself, or a White Paper in itself, does not deliver the solution. But I am not coming to the House today presenting a set of ideas that we will now begin to implement; many of these ideas and processes are already under way and beginning to have effect. I have given commitments previously, and I will give them again, to keeping the House updated through the publication of both recruitment figures and trained strength figures as we turn the corner with the Army Reserve.

[Angus Robertson (Moray) (SNP)]

The Secretary of State will be aware that today is the first anniversary of the Moray Firth Tornado crash tragedy, in which Flight Lieutenant Adam Sanders, Squadron Leader Samuel Bailey and Flight Lieutenant Hywel Poole and a seriously injured fourth serviceman were involved. RAF Lossiemouth, friends and families are remembering them today, as I am sure everybody does in the House.

On the statement, there has been a discourtesy to not only Members of the House, but to the parties in this House. Some hon. Members may not be aware that all political parties in this House—the Labour party and the parties of Scotland, Wales and Northern Ireland—receive an advance copy, and we were not provided with the appropriate information either. That is a huge discourtesy. It is unprecedented—I have never experienced it in my 13 years in this House—and it is unacceptable. Frankly, it is a dog’s breakfast and the MOD should be ashamed of itself.

As we know, in recent years there have been disproportionate cuts to personnel, to basing, to spending and now even to the Territorial Army in Scotland. In the absence of providing the list in detail and on time, will the Secretary of State please confirm that six of our 38 Army and Navy reserve sites are to close? That is 16% of the total and it represents twice Scotland’s population share, so the disproportionate cuts continue.

[Mr Hammond]

The approach to dealing with the estate and the rationalisation of structure has not been territorial but was based on the structure of the Army. Some new major units are relocating to Scotland. To answer the hon. Gentleman’s specific questions, there are 52 reserve sites in Scotland. Seven will be vacated and a new site will reopen, which means a net loss of six. According to my calculation, that is a 12% reduction in site footprint. I accept that the hon. Gentleman does not have ready access to the information, so he cannot know this, but some of the sites in Scotland are so incredibly poorly recruited that I think that even he would struggle to argue for their retention. There are sites with an establishment of 30 or 40 and a recruited strength of six, seven, eight or 10. We clearly cannot deliver a proper offer to Scottish reservists unless we consolidate on to sites that will deliver a critical mass at the sub-unit level for training.

[Mr Julian Brazier (Canterbury) (Con)]

I congratulate my right hon. Friend and the Minister of State, my right hon. Friend the Member for Rayleigh and Wickford (Mr Francois), on an immensely good package. In the last statement, we heard that the Government were going to get back to using formed sub-units, which is what reserve officers want. This time, we have heard that we have gripped the critical mass issue at sub-unit level, that we are resourcing equipment properly and that we will have opportunities for employers at all levels and money for SMEs. This is a package for the future of the reserves and the future of our armed forces, of which we should all be proud.

[Mr Hammond]

I am grateful to my hon. Friend and repeat the congratulations expressed by my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot) on his work in this area as a member of the independent commission, a tireless advocate of the reserves and a giver of good advice over a long period on a complex issue. I am grateful to him for his endorsement, as he is one of the significant number of people in this place who understand the reserves and what the debate is all about.

[Derek Twigg (Halton) (Lab)]

I would be grateful to know why the Secretary of State proposes to close the Widnes site in my constituency. Halton has 125,000 people and I would love to know the logic behind that decision. However, my question is as follows. Is not the Secretary of State missing the point? He tells us that he wants massively to increase the recruitment of reservists, but at the same time he is closing down a number of centres around the country. How is that logical and how does it make any sense whatsoever? He particularly makes the point that he wants to recruit ex-members of the armed forces. Halton is one of the best recruiting areas for the armed forces in the country, so why would he want to close down the TA centre?

[Mr Hammond]

Even in conurbation where there are numbers of TA bases, in some cases it has been necessary to consolidate them to reach critical mass and to provide the training offer that we have committed to deliver to reservists. I should explain to the House that the TA, as structured by the previous Government’s review in 2007, had an established strength of 36,500. It never resourced that and never recruited up to that strength. We are doing two things today. We are setting out a structure and basing laydown that will work for Future Force 2020 with a force of 30,000, but we are also dealing with the overhang of a hugely over-ambitious and underfunded proposition that the previous Government put in place in 2007.

[Sir Gerald Howarth (Aldershot) (Con)]

Although it is regrettable that the Secretary of State was not furnished with the correct information to enable the House to judge these matters, is it not the case that generally speaking with statements the devil is in the detail? The House will need to examine all the detail set out not only in the statement but in the White Paper. Although my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot) is absolutely right that this is the only show in town, the Secretary of State should be under no illusions about the fact that this is a substantial challenge we face in cutting our regular Army to 82,000. Will the Secretary of State assure me that he will continue to keep the House regularly informed about the success of the recruitment so that the conditions that he has just set out, which applied after the last review conducted by the previous Government, do not apply to this one?

[Mr Hammond]

I am grateful to my hon. Friend and he is absolutely right. The complexity of such an issue requires a written statement, which is why I have made one today. The changes to the structure of the Army run into the hundreds—re-rollings, relocations and amalgamations—to create an effective force, and I pay tribute to the Army staff, who have done an enormous amount of work in producing this structure. I urge right hon. and hon. Members to look carefully at the detailed documents that have been provided today, because they explain the detailed position more clearly than an oral statement ever can. My hon. Friend challenges me to publish regular updates. I have already said that I have previously committed to publishing recruitment figures and trained strength figures—on a quarterly basis, I think—and I repeat that commitment.

[Mr Jeffrey M. Donaldson (Lagan Valley) (DUP)]

We welcome the broad thrust of the statement. As the Secretary of State will know, the reserve forces in Northern Ireland are among the best recruited of any region in the United Kingdom. Indeed, 2nd Battalion the Royal Irish Regiment is one of the best recruited reserve infantry units in the British Army. Although we welcome the decision to reopen Kinnegar, will the Secretary of State explain the decision to close the Territorial Army centre in Armagh?

[Mr Hammond]

I am afraid I shall be repeating myself. The right hon. Gentleman is absolutely right that Northern Ireland is one of the best-recruited areas—in fact, most of the units in Northern Ireland are over strength and we appreciate the commitment of the community in Northern Ireland to reserve service. The changes to Army structure and the delivery of efficient and effective training require the closure of the TAC at Armagh and the opening of an additional site. I hope that the right hon. Gentleman will accept that the transfer from Armagh to Portadown is part of the Army’s best effort to deliver the most effective way of training, recruiting and managing the reserve Army in Northern Ireland. We are not talking about something for just the next couple of years but about a structure and laydown that we expect to endure for many decades and to form the basis of the fully integrated Army we all want to see.

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

I suggest that the Government have still failed, however, to show that their plans represent value for money or are in the best interests of this country. The fact that further cash incentives have been announced today, that that ex-regular reservists will be on a better scale of pay than brigadiers and that TA numbers have been falling all point to doubt being cast on Government plans—and that is before we consider the issue of capability. Would it not be wise to halt the disbandment of the regular battalions and to stop the loss of 20,000 regular troops until we know for sure that these plans will work?

[Mr Hammond]

My hon. Friend returns to a familiar theme—he has suggested that course of action to me on many previous occasions. We are restructuring our armed forces to reflect the threat they will face in the future, as identified in the strategic defence and security review, and to respond to the fiscal challenges we must address if we are to have a stable platform for the proper defence of this country. I am afraid to say to my hon. Friend that although it might be tempting to wish that we had the resources to retain the regular Army at its historic strength while we recruit up to 30,000 trained reserves, we do not have that luxury. I think the Opposition would acknowledge—and have implicitly acknowledged—that reducing the size of the regular Army while increasing the size of the reserves is not without risk but is the best way to manage the resources we have to deliver the military output we require.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

When the Secretary of State says that there will be effective welfare support for reservists, including in the context of the bedroom tax, I welcome that, and I am sure that my hon. Friends do, too. However, under DWP measures reservists are already exempt from the bedroom tax, and that is not the issue. Regular members of the Army are the ones who are affected by the definition of the bedroom tax. The veterans Minister, the right hon. Member for Rayleigh and Wickford (Mr Francois), is already well aware of that and has promised a meeting with me that will, I am sure, occur soon. We must resolve the issue now, because armed forces families are about four months in arrears.

[Mr Hammond]

The position is the same for members of the regular armed forces: if they are deployed on operations, the rooms they leave behind will not be treated as vacated—

[Tom Blenkinsop]

They are.

[Mr Hammond]

I am happy to meet the hon. Gentleman and discuss the matter. I personally read the DWP regulations on this yesterday and I am clear that when a member of regular military personnel is deployed on operations, their room will continue to be treated as occupied for the purpose of the spare room subsidy.

[Sir Bob Russell (Colchester) (LD)]

What happens if the recruitment strategy fails?

[Mr Hammond]

We are committed to recruiting a reserve force of 35,000. I remind my hon. Friend that as recently as 1990, we had a trained reserve force of 72,500, so it is not as if we are trying to do something that has not been done before. All our English-speaking allies operate with far greater reserve forces as a proportion of their regular forces than we do.

I should tell my hon. Friend that the responsibility for delivering the strength required lies with the individual commands, and they understand and accept that they may have to flex resources if that is necessary to deliver the objective. We have no plan B: we will deliver these reserve numbers.

[Keith Vaz (Leicester East) (Lab)]

One of the huge threats we face at the moment is a cyber-attack. The United Kingdom is the primary target of operatives in 25 countries. What specific training will be given to reservists in this important but specialist field?

[Mr Hammond]

I am grateful to the right hon. Gentleman for allowing me to refer to that matter in detail. Part of the structure change relates to a new focus on reservists’ contributions to cyber-defence. Alongside the traditional image of the reservist, we are looking for people who spend their week sitting in front of a screen, perhaps working for one of the big IT companies, but who relish being able to deploy their skills in a more operational environment. We will specifically recruit cyber-reservists, who will not necessarily have to have the same levels of fitness or deployability as reservists in general if they are willing to deploy to add to our cyber-defence capabilities at UK locations on a routine basis.

[Bob Stewart (Beckenham) (Con)]

I hope very much that we will get 30,000 trained and deployable reservists by 2018, but over the past year recruitment to the Territorial Army—the Army Reserve, as it will be—has not been great, so I am slightly pessimistic. In 2018, will the armed forces be blamed if 30,000 reservists are not fully trained and deployable?

[Mr Hammond]

It will be for individuals to point the finger, although I can guess where it is most likely to be pointed. I should say that, having previously declined sharply, numbers have stabilised. Of course that is not enough, but it is at least a start; the hole is not getting deeper. The purpose of announcing the measures in the White Paper is to provide the backdrop for what will now be an aggressive recruiting drive to bring through the recruits who in two years’ time—it will of course take two years—will have become fully trained members of the reserve forces.

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

I am incredibly disappointed about the shambles today, not least because I learned only 20 minutes ago that Dunfermline was to close. I hope that the Secretary of State will explain the rationale behind that decision. However, written in hand on the summary sheet for this omnishambles of a statement is the word “Kilmarnock”. Will the right hon. Gentleman clarify whether that is a late addition or someone’s homework? What exactly is going on with Kilmarnock?

[Mr Hammond]

The hon. Gentleman is right that Dunfermline is closing: 154 Transport Regiment is to move to Bruce House Territorial Army centre, in one of a significant number of consolidations. In most cases, consolidations do not give rise to site closures because there is more than one unit on a site, but in some cases, where a consolidation removes the last unit or all the units on a site, logically the site closes. I emphasise again that the driver for these changes is not to vacate sites; it is to create a structure that will deliver the military capability we require and allow reservists to receive the training offer that we have set out to them today. I regret that, in some cases, that will mean that people have to travel to an Army Reserve centre in an adjoining community, but I should mention that reservists receive home-to-duty travel allowance and will therefore be reimbursed for the costs of making the journey.

[Hon. Members]

Kilmarnock?

--- Later in debate ---

[Mr Speaker]

Order. The hon. Gentleman is an eager beaver. The Secretary of State has given his reply. If he decides he wants to say anything further in response to a subsequent question, he is well able to do so.

[Mr Hammond]

rose—

[Mr Speaker]

Does the Secretary of State wish to say it now?

[Mr Hammond]

Inspiration has just come to me. A new Army Reserve unit will move into Kilmarnock on an existing site, which will reopen to accommodate it.

[Mr Crispin Blunt (Reigate) (Con)]

Nine days ago, I took part in a flag-raising ceremony at the beginning of Armed Forces week, organised by the borough of Reigate and Banstead, at which more than 20 organisations signed a community covenant to support the armed forces. I challenge my right hon. Friend to find any local authority that has been more forward in its support for the armed forces locally, and it is a pretty poor reward that 80% of the reservists in the borough are to disappear. May I gently register my concern about the fate of the cadet forces associated with the TA centre in Redhill that he is proposing to close? I very much want to come and see him or one of his colleagues to discuss whether, in terms of the establishment of the wider armed forces, including the cadets, they have got the decision right locally.

[Mr Hammond]

I recognise that individual Members whose constituencies are affected by site closures are disappointed. The site at Redhill is occupied by a Royal Electrical and Mechanical Engineers battalion. REME is being reinforced as a result of the structural changes, but there is a need for consolidation to make it work, and 103 Battalion REME, 150 Recovery Company, is to move to the Mitcham Road TAC in Croydon. My hon. Friend’s constituency will of course retain the TAC at Reigate.

Cadets are co-located on many reserve sites. The fact that we are vacating a site does not mean that the building will be shut or the site disposed of. Where cadets are in occupation, they will continue to occupy and we will seek appropriate ways of reproviding for cadets in the same area; that may be on the same site or on one in the near vicinity.

[Several hon. Members]

rose—

--- Later in debate ---

[Robert Flello (Stoke-on-Trent South) (Lab)]

I too pay tribute to reservists, particularly those I had the privilege to meet in Afghanistan and Iraq on visits in recent years.

May I bring the Secretary of State back to the impact on businesses, especially SMEs? As we know, they are at the heart of the British economy. I have heard his statement, but I want to return to the concern that many SMEs have, because quite often it is a key individual in the business who is a reservist, and I am not sure that £500 is enough to cover the loss of that individual. Will he, as part of the White Paper process, look carefully at how he engages with businesses, particularly those that are not members of a wider business organisation?

[Mr Hammond]

We engaged extensively with business during the consultation period. The definition of an SME, of course, is very broad: up to 250 employees and £25 million. The £500 a month is not intended to compensate for the loss of the employee; it is intended to be an additional recognition, on top of all the other allowances and compensation amounts that employers can already claim. One of the crucial statements we made in the White Paper, and in the actions we have already taken, is the need to streamline the claiming procedure. One of the things we heard loud and clear in the consultation was that many employers find the process so cumbersome that it is hardly worth claiming. We are confident that, by streamlining the process, we will make it much more accessible and user-friendly for employers.

[Andrew Griffiths (Burton) (Con)]

Although I welcome the Secretary of State’s commitment to reservists and the extra funds available, clearly the announcement of the closure of the TA centre in Burton, Coltman House, will be greeted with disappointment and sadness by many of my constituents. Will he make available the rationale behind that decision and the recruitment figures to reassure me and my constituents that it is the right one? Following the earlier comments about cadet forces, Coltman House is also home to two fine cadet forces, the Army and Air Cadets, which have strong leadership and great young men and women involved. Will he meet me to ensure that those cadets have a future?

[Mr Hammond]

As I have just said, the cadets will remain in occupation. We are committed to providing them with accommodation, usually on the site but possibly close by, so that is the driver. I do not want anyone to get the impression that these changes are being made in order to vacate sites, because that is not the driver. The changes are being made because of Army structure considerations. It is not just about recruitment; it is also about the changing structure of the Army’s reserve component and the way it has to work in future. When my hon. Friend looks at the detailed information that has been laid in the Library, he will see that the change is part of a much bigger pattern of change to deliver the effective forces we need for the future.

--- Later in debate ---

[Mr Speaker]

Order. The hon. Gentleman has availed himself of the opportunity to ask four questions, which he had no right to do, but I think that he will get one answer.

[Mr Hammond]

I am grateful to the hon. Gentleman for the opportunity to choose between his four questions. I will answer the RMLY question, because I know that other Members will be interested in it. The reason I did not include it in the oral statement is that it is a complex matter and one must limit the content of an oral statement, or else one would be severely admonished from the Chair. The RMLY’s regimental headquarters, the headquarters squadron, will be relocated to Edinburgh, where it will be renamed the Scottish and North Irish Yeomanry. The troop squadrons will remain where they are and will come under the command of other yeomanry units. At Telford, a troop will remain and come under command of A squadron, which will remain based at Dudley. It is a complex change that the hon. Gentleman will be able to understand if he looks at the documents that have been laid in the Library. We expect the troop squadrons remaining in the west midlands to adopt the name of the Royal Mercian and Lancastrian Regiment in their squadron titles.

[Jane Ellison (Battersea) (Con)]

Although today’s confirmation of the closure of the St John’s Hill barracks is sad, it has been widely understood locally that that would be the case. It has been a great honour to represent the London Regiment, based at its headquarters there, which has given distinguished service in operations over recent years. Will the Secretary of State confirm that he is content with the arrangements being made for the London Regiment?

[Mr Hammond]

The London Regiment is a very important component of the Territorial Army. It is well recruited and plays an important role, having made a large contribution to the campaigns in Iraq and Afghanistan. The rationalisation of the estate across London to provide training opportunities and optimum use of the new equipment we will be delivering has come from the Army itself, from the bottom up, as the best way of delivering the capability we need. I know that my hon. Friend will regret the loss of the TA centre in her constituency, but the London Regiment will continue to be a very important part of the reserve forces construct in London.

[Naomi Long (Belfast East) (Alliance)]

I welcome the Secretary of State’s comments about integrating welfare for reserve and regular soldiers. A constituent of mine, a former Royal Marine who is now in the Territorial Army, was injured on a training exercise and was unable to access Army rehabilitation and medical services in the same way he had been able to as a regular soldier. Will the right hon. Friend clarify whether the proposals will specifically address that point, and will he review the case to ensure that it is dealt with fully?

[Mr Hammond]

I take what the hon. Lady says at face value, but I am pretty surprised by the case she outlines. If she would like to write to the Minister of State, my right hon. Friend the Member for Rayleigh and Wickford (Mr Francois), he will look into the matter.

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

As my right hon. Friend knows, during a recent visit to the US Department of Veterans Affairs, the Northern Ireland Affairs Committee learned about how the US deals with its veterans, especially as far as mental health and other welfare issues are concerned. I suggest that he talks with colleagues in the Treasury and the Department for Work and Pensions to explore whether it might be possible to put an “R” after reservists’ national insurance numbers so that they are more easily identifiable in order to receive that kind of mental health support.

[Mr Hammond]

I am happy to explore that with DWP and the Treasury, but I recommend that my hon. Friend does not hold his breath while waiting for the answer. The way US veterans administration works is very different from the way we do things in this country, because they do not have the benefit of a national health service or a comprehensive welfare state.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

Number 13 on the list of sites for closure is in my constituency. Is the intention to consolidate its activities at other sites in Edinburgh, and particularly in my constituency? With regard to the new or reopened Navy Reserve facility in Edinburgh, which facility is that and what activities does the Secretary of State envisage being undertaken there?

[Mr Hammond]

As the hon. Gentleman knows better than I do, there are a number of sites in Edinburgh, and there will still be a very substantial Army Reserve presence there. The unit he is talking about, 5 Military Intelligence Battalion, will be going to Fenham barracks in Newcastle.

[John Thurso (Caithness, Sutherland and Easter Ross) (LD)]

I commend the strategy and understand the logic of putting units together. I can save the Secretary of State the trouble of telling me that the Wick unit is down to six and that regularly only one attends, because I know that from conversations I have had with serving and former Territorials. That is a relatively recent development, because 10 years ago a substantial number of troops served on deployment in Iraq with distinction. I point out that it is a 250-mile round trip to the nearest reserve base of any kind, so if Wick closes it will effectively mean that the inhabitants of Caithness and Sutherland will no longer be able to give reserve service, and people who leave the Army and wish to be reservists will no longer be able to live in Caithness and Sutherland.

[Mr Hammond]

I realise that my hon. Friend will be disappointed by the decision in respect of Wick. However, he saved me the trouble of pointing out that seven people are registered at Wick, only a couple of whom regularly turn up on any training occasion. I have to say to him that it is just not possible to operate such a unit effectively.

The issue is not penny pinching or closing a base for economic reasons; it is that we cannot deliver effective training or any effective military capability out of a base with that kind of level of strength. I am afraid that we just have to be realistic about that. I do recognise that, unlike many other closing bases, Wick’s nearest alternative base is so far away that it is not practical to expect those seven people to transfer. Many of the other bases—of the 26—that we have been referring to are within easy travelling distance of other reserve facilities.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

What concerns me particularly about the shambles of this statement is the lack of detail in the documents provided. I am learning now that yet another document has been made available in the past few minutes, which I do not have in front of me—my right hon. Friend the shadow Secretary of State has it.

In the absence of that document, will the Secretary of State provide detail on the announcement about a new or reopened base in Cardiff? The list literally just says “Cardiff”; there is no other detail. What impact might there be, if any, on HMS Cambria, which is just over the border in the neighbouring constituency of the hon. Member for Vale of Glamorgan (Alun Cairns), but draws on many reservists from my constituency?

[Mr Hammond]

I think I am right in saying—I shall write to the hon. Gentleman if I am incorrect—that the decision has been taken to open an additional site in Cardiff, but the exact location has not yet been confirmed. The changes will happen over the next two and a half to three years. In some cases, there is an obvious site that we are going to reopen; in others, the Army is looking at different candidates. The Army is looking at structural conditions of buildings, for example. I will be happy to write to the hon. Gentleman and confirm that, if that would be helpful.

[Bill Wiggin (North Herefordshire) (Con)]

I share with the House my sadness at the closure of the Caernarfon Territorial Army centre, where I was a platoon commander. My concern is about the loss of the term “Territorial Army”. The Secretary of State will be aware that the greatest threat to part-timers comes from regular officers within the MOD who starve the reserves of their resources. Will the Secretary of State make sure that that cannot happen under his restructuring?

[Mr Hammond]

I say two things to my hon. Friend. First, the overwhelming majority of respondents to the consultation supported the proposal to change the name of the Territorial Army, better to reflect the role that it will play in future. The second thing is that—he will just have to take my word for this—at senior level there has been a sea change in the attitude in the Army. The Army now understands that it has to grip this as its problem and deliver the solution. I accept that there is still more work to be done in the middle ranks of the Army officer corps, to persuade people to adopt the integrated model for the future. That is a work in progress.

[Jim Shannon (Strangford) (DUP)]

I thank the Minister for his statement and concur with the statement made by my right hon. Friend the Member for Lagan Valley (Mr Donaldson) on the closure of the Armagh unit; I express my disappointment at that as well. However, the announcement that Kinnegar in Holywood will become a centre for reservists is good news, which I welcome. Civilian staff there have been uncertain about their position in recent months. Can the Secretary of State confirm that Kinnegar will not be subject to any run-down or loss of civilian personnel as it becomes a centre for reservists in Northern Ireland?

[Mr Hammond]

My understanding is that, at the moment, Kinnegar is mostly used as a storage facility and the number of civilians employed there is relatively small. However, I cannot guarantee—this is part of another statement, in a sense—that as that role decreases there will not be some changes in the civilian staffing level. However, if the hon. Gentleman would like me to write to him with further details of the overall position affecting Kinnegar, I will be happy to do so.

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

I declare an interest as a member of Her Majesty’s armed forces reserves in the Military Stabilisation Support Group. As the Army rebalances its regular-reserve ratio, I hope that emphasis is placed on not only war-fighting skills but nation-building, peacekeeping, upstream intervention and stabilisation, where reservists can bring their civilian skills to the fore. May I also ask the Secretary of State what more could be done to ensure that the Army stabilisation activities that qualify against Development Assistance Committee rules can be claimed against the official development aid target?

[Mr Hammond]

As my hon. Friend will see when he reads the White Paper—the document that the shadow Secretary of State was waving a few moments ago—we do indeed emphasise that the role of the reserves in future will include participation in stabilisation and conflict-prevention operations.

On eligibility for ODA-compliant funding in these operations, recently my hon. Friend kindly sent me a paper that he has written suggesting areas that might be ODA-compliant. I have passed it to officials so that they can look further at whether there might be avenues to pursue.

[Mark Garnier (Wyre Forest) (Con)]

I am grateful to the Secretary of State for his statement, although I regret the closure of the Shrubbery TA centre in Kidderminster. Can my right hon. Friend assure me that the neighbouring King Charles I secondary school combined cadet force unit is safe? Can he also confirm that the 30 or so reservists who are currently based at the Shrubbery TA centre will be given financial support for travelling a greater distance?

--- Later in debate ---

[Mr Hammond]

On that last point, as I have said already, a home-to-duty allowance is payable for travel between home and the place of duty. Over and above that, the Army will be looking on an individual basis to ensure that, within reason, anyone whose unit is closing, relocating or re-roling, and who wishes to transfer to a different unit, will be supported. We expect that to be done at local unit level, engaging with individuals to try to retain them in the reserve service if we possibly can.

[Sir Alan Beith (Berwick-upon-Tweed) (LD)]

Instead of withdrawing entirely from a rural centre such as Berwick-upon-Tweed, which will lose its TA centre, Royal Logistics Corps and Fusiliers component, should not Ministers be looking at flexible ways of organising training and recruitment in rural areas, so as not to close off that source of recruitment?

[Mr Hammond]

I have looked at the situation in my right hon. Friend’s constituency. The driver is that the Pioneers, both regulars and reserves, are being withdrawn from the Army’s order of battle, so the Pioneer unit based at Berwick will no longer have a role to play. However, we hope that many of those serving in that unit will re-role and move to Alnwick, where the Army reserve centre will continue.

[Mr Andrew Turner (Isle of Wight) (Con)]

Drill Hall and Jersey Camp, the TA facilities on the Isle of Wight, are shared by our very strong cadet forces, who number more than 200. Given the unique transport challenges facing the island, the loss of those facilities would be a terrible blow to those young people. Will my right hon. Friend meet me and a group of constituents to discuss the matter?

[Mr Hammond]

I sense that the Minister for the Armed Forces is anxious to meet my hon. Friend. I can say this: if the facility has 200 cadets, the vacation by the reserves will not make any difference to the cadets’ continued use of it. It will remain in use by the cadets, as will be the case for a significant number of the bases being vacated.

[Mr Speaker]

The hon. Member for Pendle (Andrew Stephenson) has beetled forward by two Benches from his normal position; I am grateful that I am nevertheless able to see and recognise him.

[Andrew Stephenson (Pendle) (Con)]

Thank you, Mr Speaker.

There is a lot to welcome in today’s statement, particularly the incentives for small and medium-sized enterprises. Last Friday, I organised a jobs and apprenticeship fair at Colne municipal hall. More than 1,200 people attended and I am pleased to say that there was a great deal of interest in both the regular and reserve forces. What more does the Secretary of State believe right hon. and hon. Members across the House can do to help deliver the plans and ensure that we recruit more reserve forces in our local areas?

[Mr Hammond]

I am grateful to my hon. Friend for the work that he is obviously already doing in supporting the reserves agenda, which is about raising awareness of reserves, particularly in communities where reserve units are significantly under-recruited—essentially getting behind a “use it or lose it” challenge to those communities. We have now created a space and will be putting in place a substantial recruiting drive. Those units need to show that they can make a sustained militarily significant contribution to the Army reserves.

[Amber Rudd (Hastings and Rye) (Con)]

SME support is essential for the success of the growth of our reserve forces, so I really welcome the financial and procedural package that has been put in place for them. What support or advice has the Secretary of State received from business organisations such as the Federation of Small Businesses to ensure that we get exactly the right package to encourage our employers to support this issue?

[Mr Hammond]

The FSB has been involved with us in the consultation process, along with many others. I am glad to be able to say that it, along with the other four major employer organisations, has signed the corporate covenant that my right hon. Friend the Minister for the Armed Forces launched last Friday, which includes a pledge to support reserve service. In this White Paper we explicitly recognise that reserve service impacts on different types of employer differently, and the offer that we make has to be tailored to recognise that. That will make a significant difference to our relationships with small and medium-sized employers.

[Mr Robin Walker (Worcester) (Con)]

The 214 Battery Royal Artillery in Worcester has a magnificent new TA centre right at the heart of our city. Its officers and gunners have seen a great deal of service in Afghanistan. The whole city is very proud of having this military presence right at its heart. Can my right hon. Friend confirm that in making his difficult decisions on basing, he has paid attention to the quality of facilities available at TA centres and to the historic role of our county towns in supporting recruitment to the armed forces?

[Mr Hammond]

My hon. Friend tempts me, but I have to say in all honesty that the driver has been the structural requirements of the Army Reserve. There is no point in keeping a TA centre because it is a shiny new building if it does not fit into the structural laydown that the Army needs to deliver military effect in the 21st century, so that has been the overriding consideration.

[Alun Cairns (Vale of Glamorgan) (Con)]

HMS Cambria in my constituency has a long, proud history in supporting the unit from the communities of Barry and Sully in Cardiff South and Penarth. The statement talks about a unit in Cardiff that is to be new or renewed, but it is not yet clear whether it is the same unit or another one in place of it. Will the Secretary of State clarify that?

[Mr Hammond]

It is an additional unit.

[Mr Philip Hollobone (Kettering) (Con)]

Employer support will be crucial. There is a Queen’s award for business, a Queen’s award for technology and a Queen’s award for exports. Might there not be a Queen’s award for supporting the armed forces reserves?

[Mr Hammond]

We explored that in the consultation. We have decided to proceed via the corporate covenant, which already provides for recognition for employers who support the services broadly, including the reserve service, and provides them with a logo that they can put on their letterhead.

[Julian Smith (Skipton and Ripon) (Con)]

I, too, welcome the measures that the Secretary of State has announced for business. However, for our smallest businesses across the UK—our one, two or three-man bands—losing a key worker will pose a particular challenge. May I urge him, as he develops the White Paper, to give special credence to their views and those of employers who are not represented by the business organisations we discussed earlier?

[Mr Hammond]

The FSB has of course been involved in this process. My hon. Friend’s point is absolutely valid. It will not be right or practical for all SMEs to employ a reservist, and we must recognise that fact. It will be easier for larger businesses. Many SMEs, perhaps including some very small ones, will be keen to employ a reservist, perhaps for a particular reason. We have to be flexible and tailor our package to respond to the needs of individual employers and employer types.

[Mark Pawsey (Rugby) (Con)]

May I express my disappointment at seeing on the list of surplus sites the Territorial Army centre at Edward street, Rugby?

I thank the Secretary of State for listening to the representations on reservists by businesses, particularly small businesses, many of which stand to lose a key member of staff for a substantial period. I particularly thank him for his provisions regarding greater predictability of call-up.

[Mr Hammond]

I am grateful to my hon. Friend. I am sorry about the disappointment regarding Rugby. As he will know, the reserve unit there will be consolidated at Coventry—another example of consolidation to create critical mass.

My hon. Friend is absolutely right that predictability of liability for call-up is one of the key issues for smaller employers. If, at the beginning of the year, we can give them proper notice of training periods, and as lengthy notice as possible of a period of high liability for call-up, they can plan accordingly.

[Henry Smith (Crawley) (Con)]

Last Saturday, Crawley borough council rightly signed its military covenant. That was, in part, a sign of the great respect in my constituency for the Royal Electrical and Mechanical Engineers Territorial Army centre. Will my right hon. Friend say a little more about how he sees the REME reserves developing?

[Mr Hammond]

The Royal Electrical and Mechanical Engineers are one of the resources on which we will be relying more in future for reserve capabilities than we have in the past. My hon. Friend gives me the opportunity to use this as another specific example. We will be looking to ensure a basing laydown for REME units that reflects the nature of the work force in different areas. We clearly need to recruit to REME reserve units in areas where there are significant numbers of electrical and mechanical engineers in the work force. That is the right way to build the integrated whole force of the future.

[Guto Bebb (Aberconwy) (Con)]

There will be genuine disappointment in the town of Llandudno in my constituency at the news that the Territorial Army centre in Argyll road will see its services relocated to Colwyn Bay, but I think that that disappointment will be tempered by appreciation of the fact that it will remain a strong presence within the county of Conwy. However, it should be noted that the centre in Argyll road is also home to two vibrant cadet units which use the facilities on a regular basis. It would be appreciated in the town of Llandudno and in the wider constituency if we could have some certainty that those facilities will still be available for those two cadet forces.

[Mr Hammond]

Our commitment to the cadets is clear and enduring, and we will not throw them out on the street. We may at some point re-provision those facilities. That will depend on the individual site and whether the location is suitable to continue in the long term as a stand-alone cadet facility. We will find alternative facilities for them in the vicinity if, over the longer term, the decision is taken to close the building.

Points of Order

Lord Hammond of Runnymede Excerpts

Wednesday 3rd July 2013 Commons Chamber

[Mr Speaker]

If the Secretary of State wishes to respond, he is welcome to do so.

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

Thank you, Mr Speaker. I cannot answer the hon. Gentleman’s question from the Dispatch Box, but I will of course write to him as soon as I get back to the MOD. I am not sure that it does represent what he is suggesting it represents. Some of the sites in question are complex. I am happy to write to him and copy the letter to you, Mr Speaker, as soon as I get back to the MOD.

[Mr Speaker]

I happily accept that offer from the Secretary of State. As he will know, I am principally concerned with matters of order and good form. Although in a human sense, no doubt, particular sites are of interest, they are not within my sphere of competence, and he knows that. What I am interested to hear about is the handling of the matter. He has given me a commitment on that, and I am grateful for it.

Army Reserve (Structure and Basing)

Lord Hammond of Runnymede Excerpts

Wednesday 3rd July 2013 Written Statements

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

The Government have today published a White Paper on Reserve Forces, “Reserves in the Future Force 2020: Valuable and Valued”. The White Paper sets out our vision for the future of the reserve forces following the consultation I launched last October, and the detail of how we will make Reserve Service more attractive to individual reservists, their families and their employers. It also confirms our intention to change the name of the Territorial Army to the Army Reserve.

In order to deliver our vision for the reserves as part of the “Whole Force”, it is necessary to make some changes to the reserve structure and, in some cases, the basing laydown. While the maritime reserves and Royal Auxiliary Air Force structures will see only minimal changes, the Army has had to undertake a fundamental re-design of its reserve force structure to deliver the reserve component of the integrated Army 2020.

Against the backdrop of the revised offer to the reserve forces set out in the White Paper, the Army has developed a plan for the structure and basing of the Army Reserve, consistent with the recommendations of the Independent Commission’s review of the UK’s reserve forces¹ led by General Sir Nicholas Houghton, Vice-Chief of the Defence Staff, in 2011. It follows the July 2012 and March 2013 announcements on Regular Army structure and basing, and completes the announcements on the Army 2020 design. The plan provides clarification on the future purpose, roles and locations of Army Reserve units and, in doing so, generates the level of certainty needed to support the major recruiting drive we are undertaking to expand the Army Reserve. The restructuring will have impact across the United Kingdom and to assist right hon. and hon. Members in understanding the effect of these changes on their constituencies, documents setting out the detail have been placed in the Library of the House.

To achieve the Future Force 2020 design of a fully integrated, trained Army of 112,000, comprising around 82,000 regular personnel and around 30,000 reservists, with an additional 8,000 reservists in training, the Army Reserve will need to be restructured. The Territorial Army’s current structure was put in place in 2007 and based on some 36,500 posts. It was never fully resourced or manned, it is no longer consistent with defence policy, and it would not fulfil the roles and capabilities required of the Army Reserve under Army 2020.

We will increase the trained strength of the Army Reserve from about 19,000 to 30,000, but at the same time, we will decrease the number of posts in the structure to match the 30,000 target—delivering a fully-manned force structure, for the first time in many years.

The revised Army Reserve structure of around 30,000 will no longer exist simply to supplement the Regular Army in times of national conflict but, as part of an integrated whole force, will be ready and able to deploy routinely at sub-unit level, and in some circumstances, as formed units. To deliver this effect, the Regular Army and the Army Reserve will, for the first time outside of the two world wars, be fully integrated within a single chain of command. Army Reserve units, like their regular counterparts, will be distributed in varying proportions across the adaptable force brigades, the specialist brigades forming force troops and, to a lesser extent, the reaction force brigades. Most importantly, this structure will be properly resourced both in terms of equipment and training and, as spelled out in the White Paper, will be enabled by terms and conditions of service more relevant to the future requirements of reserve service.

This change is already under way, and the last 15 months have seen significant investment in personal and unit equipment, in the vehicle training fleet, and in UK and overseas training exercises for formed reserve sub-units.

To ensure that formed reserve units and sub-units can operate effectively alongside their regular counterparts, regular and reserve units will be formally paired. Pairing will optimise the use of training and equipment resources, increase the capability of the integrated force, and will ensure force elements are available at appropriate readiness to deliver the Army’s outputs to defence. While the majority of Army Reserve units will be at lower readiness than regular units, the investment planned over the coming years will broadly align the equipment levels and training in reserve units to those of regular units.

Decisions on how to rebalance the Army reserve structure have been based on military judgment taking account of the capabilities required from the reserves in the integrated Army, the need to achieve full manning by 2018, and the greater efficiencies in training and equipment resulting from formal pairing between regular and reserve units. While some of the changes may be unwelcome by the units affected by them, they are necessary to deliver the effective, modern and integrated Army Reserve of the future and to enable us to deliver on our commitment to reservists of better training, better equipment and a fully integrated role.

These changes will involve the re-roling of some units, the raising of new units and the withdrawal of others from the Army order of battle. The capabilities which will make up the fixture Army Reserve will be different from today, and this change will also be reflected in the number of units and sub-units held under each cap-badge. The current Territorial Army structure supports 71 major units; overall it will reduce to 68 major units in the fixture structure:

Nine major units will be withdrawn, and their sub-units will either be withdrawn, re-roled or re-subordinated to another unit in the Army Reserve’s order of battle. They are: 100 (Yeomanry) Regiment Royal Artillery; 72 and 73 Engineer Regiments; 38 Signal Regiment; and from the Royal Logistic Corps 88 Postal and Courier Regiment; 160 Transport Regiment; 165 Port Regiment; 166 Supply Regiment and 168 Pioneer Regiment.

A further three major units will be re-roled within the Royal Logistic Corps: 152 Transport Regiment will become 152 Fuel Support Regiment, 155 Transport Regiment will become 165 Port and Enabling Regiment, and 156 Transport Regiment will become 156 Supply Regiment.

Six new major units will be created: in the Corps of Royal Electrical and Mechanical Engineers, 101 Battalion, 104 Battalion, 105 Battalion and 106 Battalion, and in the Military Intelligence Corps, 6 Military Intelligence Battalion and 7 Military Intelligence Battalion. A number of existing sub-units will either be re-roled or re-subordinated to these new units.

Decisions on withdrawal, re-roling or re-subordination of a sub-unit are completely separate from those regarding the sites each currently occupies, which are addressed later in this statement.

Additionally, there will be changes to structures at minor unit and sub-unit levels. Key details of these changes are contained in the documents that have been placed in the Library of the House.

With the exception of the Royal Mercian and Lancastrian Yeomanry, none of these decisions involves a cap-badge change. The Regimental HQ of the Royal Mercian and Lancastrian Yeomanry (RMLY) will move to Edinburgh where it will be closer to its paired regular unit, the Royal Scots Dragoon Guards, which will be based at Leuchars. It will assume command of existing Yeomanry sub-units across Scotland and Northern Ireland. To better reflect its new geographical focus, it is planned to rename this headquarters; “The Scottish and North Irish Yeomanry”. A, C and D Squadrons of the RMLY will remain in their current geographical locations (respectively Dudley, Chester and Wigan), but will come under command of other Yeomanry regiment headquarters, improving their ability to train effectively, and draw-on support from their formal pairing with regular units; a troop will also remain in Telford, which will be subordinated to A Squadron in Dudley. We expect that those squadrons will carry the RMLY cap-badge preserving it for the fixture, in addition to the antecedents they currently carry.

We will implement this structural rebalancing in a phased manner, and complete it by 2016, in order to ensure that those capabilities that the Army Reserve must deliver in the earliest phases of future operations, are available from 2017.

This restructuring will require changes to the current basing laydown of the Army Reserve. The Army has taken the opportunity to review the laydown not only to reflect the structural changes, but also to address the need to optimise recruitment and to facilitate effective training in the future.

The Territorial Army currently occupies 334 individual sites around the United Kingdom, including a number of locations with small detachments of fewer than 30 personnel—the approximate size of an infantry platoon. Some of these sites are seriously under-recruited. To maximise the potential for future recruitment, and particularly to capitalise on existing areas of specialist skills in the national workforce, the Army has determined that it should increase and rationalise the presence of the Army Reserve in urban areas, by merging small, and/or poorly recruited sub-units, into larger sites already occupied by other units in local or neighbouring communities. As well as improving recruitment opportunities the greater concentration of reserve units in fewer locations, and their increased proximity to their paired regular units, will enable more effective use to be made of manpower, infrastructure and equipment. As part of this exercise, the Army Reserve will open or reopen nine additional reserve sites.

Because the Army will be delivering a focused recruiting drive over the next couple of years, we have decided to retain a significant number of small and under-recruited sites, where long-term viability is considered possible. The units on those sites will be challenged to recruit up to strength in the years ahead. From 2016, the Army’s regional chain of command will gradually rationalise and consolidate any sites which remain persistently and seriously under-recruited and/or unable to generate effective Army capability.

Overall, the changes being announced today will result in the net vacation of 26 Army Reserve sites across the United Kingdom in the period up to 2016. The Army Reserve’s future laydown will maintain the broad pattern of activity in Scotland, Wales, Northern Ireland and England.

Further work will be undertaken to better define how those sites being vacated by the Army Reserve will be managed in the future and how retained sites will be improved and expanded where they are required to accommodate larger numbers following consolidation of Army Reserve units. We expect to invest around £80 million in improvements and expansion across the Army Reserve estate, as part of a £120 million overall investment in reserve estate.

Where cadets are co-located on Army Reserve sites for which there is no longer a defence requirement, we will pursue re-provision of facilities for the cadet unit to ensure that a local cadet presence is maintained.

Overall the structural changes to the Army Reserve and the changes to laydown set out above will deliver a more efficient and effective structure which will allow the Army Reserve to develop in full its planned role in Army 2020. This announcement gives certainty to the Army Reserve as it embarks upon the twin challenges of recruiting and training to grow to a fully manned and fully trained establishment of 30,000 and restructuring the force to deliver the outputs required of it under Army 2020.

¹Future Reserves 2020. The Independent Commission to review the United Kingdom’s Reserve Forces. London, July 2011.

Armed Forces Pay Review Body (Appointment)

Lord Hammond of Runnymede Excerpts

Monday 1st July 2013 Written Statements

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

I am pleased to announce that the Prime Minister has appointed John Steele as the next chair of the Armed Forces Pay Review Body commencing 1 July 2013 until 28 February 2016. This appointment has been made in accordance with the guidance of the Office of the Commissioner for Public Appointments.

Oral Answers to Questions

Lord Hammond of Runnymede Excerpts

Monday 17th June 2013 Commons Chamber

[Hugh Bayley (York Central) (Lab)]

7. What the outcome was of the recent NATO Defence Ministers’ meeting; and if he will make a statement.

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

The key outcomes of the recent NATO Defence Ministers’ meeting included allied endorsement of the concept of operations for NATO’s post-2014 “Train, Advise, Assist” mission in Afghanistan; agreement to national capability targets apportioned to allies as part of the NATO defence planning process; and a commitment to conduct follow-on work on how NATO might prevent, respond to and recover from a cyber-attack against systems of critical importance to the alliance.

[Hugh Bayley]

The UK is one of a small number of alliance members that spend 2% or more of their national income on defence. Was the need to raise defence expenditures by those countries that do not meet the 2% threshold raised at the meeting, and what is the Secretary of State doing to try to ensure that other countries in the alliance share the burden with us?

[Mr Hammond]

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

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

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

[Mr Hammond]

I am grateful to my right hon. Friend and I think both issues are important. It is important to be clear that in the medium to long term we must expect NATO members who want to benefit from the advantages of membership to pay the subscription price, as it were, in the form of adequately resourced defence budgets. In the shorter term, reality dictates that we focus on turning the budgets we already have into real, deliverable military capability. There is enormous headroom between what is delivered now with the £200-odd billion of NATO European defence expenditure, and what could be achieved if it were properly organised.

[Angus Robertson (Moray) (SNP)]

Will the Secretary of State confirm that northern European NATO allies such as Denmark, Norway and Iceland believe that the challenges of the Arctic and the high north are extremely important? Will he also confirm whether the Ministry of Defence has any plans to take part in air policing for NATO from Reykjavik?

[Mr Hammond]

We have no plans at the moment to take part in air policing operations from Reykjavik, but we recognise the importance of the high north, not least because such a large proportion of Britain’s primary energy resources now come from the Norwegian sector of the North sea. The MOD is currently undertaking a review of the strategic significance of the polar regions, both north and south, and that will be part of the evidence that informs the 2015 strategic defence and security review.

[Mark Pritchard (The Wrekin) (Con)]

One of the lessons from Libya showed that the European members of NATO lack sufficient ISTAR— intelligence, surveillance, target acquisition and reconnaissance—and air-to-air fuel capability. Will the Secretary of State update the House on what progress European allies are making in bringing forward that capability?

[Mr Hammond]

Both areas mentioned by my hon. Friend are identified gaps in European NATO capability. Once again, I made it clear at the NATO ministerial meeting that the UK will have surplus capacity in air-to-air refuelling once our new Voyager fleet is fully delivered, and that we are more than willing to share that capacity with other NATO allies in the spirit of pooling and sharing.

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

The Government and other NATO members have our support in difficult circumstances in trying to end the bloodshed in Syria. As the UK and some other NATO nations consider arming the rebels, will the Secretary of State say what successful precedent there is for the UK arming an opposition force and using a vetting process to ensure that weapons provided are quarantined so that they do not fall into the possession of those whose aims we do not share?

[Mr Hammond]

I think there is a hypothetical hidden premise in the right hon. Gentleman’s question. The UK has made no decision to arm the rebels in Syria and we maintain our focus on achieving a political solution, in particular at the Geneva II peace conference, and that will be a central theme of the discussions going on right now in Lough Erne. We must, of course, leave all options on the table while the terrible attrition of the Syrian population continues at the hands of the Assad regime.

[Sir Edward Leigh (Gainsborough) (Con)]

8. What plans he has for his Department’s facilities in Lincolnshire and the east midlands.

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[Mr James Gray (North Wiltshire) (Con)]

14. What recent discussions he has had with the Chancellor of the Exchequer about his planned spending review.

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

I have frequent conversations with my Cabinet colleagues on a wide range of Government business. The current spending review will set departmental funding limits for financial year 2015-16 and is due to report on 26 June. My officials have been working closely and collaboratively with the Treasury and Cabinet Office colleagues to identify areas where further efficiencies in defence spending can be achieved.

[Mr Gray]

I am sure the whole House agrees that we live in dangerous and difficult times. Does the Secretary of State not agree with me, and, more importantly, the Chief of the General Staff over the weekend, that any further cuts in defence spending would seriously risk undermining our capability to defend our realm and to project power overseas?

[Mr Hammond]

As my hon. Friend will know, the Prime Minister and the Treasury have already confirmed that the equipment plan will increase in real terms plus 1% in the period from 2015 to 2020, and we are not looking at changes that will reduce military manpower. However, I have to say to him and to the House that efficiencies can always be found in any budget, and we will search for all the efficiencies that we can reasonably find and deliver.

[Kate Green (Stretford and Urmston) (Lab)]

I am pleased to hear the Secretary of State highlight the importance of efficiencies in considering the spending review. Will he meet me to discuss the deep concerns of Joseph Gleave & Son, which has been a long-standing supplier to the Ministry of Defence and employs approximately 80 people in my constituency, regarding inefficiencies in procurement following the shift to the Government Procurement Service and the establishment of Defence Equipment and Support operations?

[Mr Hammond]

I recognise that there may be a tension between our determination to drive more efficient procurement and some suppliers finding that to be a difficult experience, but I am sure that the Under-Secretary of State for Defence, my hon. Friend the Member for Ludlow (Mr Dunne), who has responsibility for defence equipment support and technology, would be delighted to meet the hon. Lady.

[Sir Bob Russell (Colchester) (LD)]

Has the Secretary of State thought of giving Treasury officials and Ministers an idiot’s guide to what Her Majesty’s armed forces are all about, because some of the comments over the weekend about army horses and tanks showed a degree of ignorance?

[Mr Hammond]

I will probably not share with my hon. Friend all the thoughts that I would like to offer to the Treasury and some of my colleagues, but I will say this: while it is easy to draw attention to such things as the number of horses in the army, the moral component of our armed forces—that which links it to the great tradition of military service in this country—is a very important part of delivering military capability and is money well spent.

[Alison Seabeck (Plymouth, Moor View) (Lab)]

Included in those discussions will be the projected savings from the proposed changes to Defence Equipment and Support announced in last week’s White Paper. For the benefit of the House, will the Secretary of State set out what specific flexibilities he has won from the Treasury—one assumes he got its agreement before publishing the White Paper—so that the DE&S-plus model can compete openly and fairly with the Government-owned, contractor-operated option during the assessment phase?

[Mr Hammond]

That is precisely the purpose of the assessment phase: to explore the boundaries of how far we can take a wholly public sector DE&S-plus model as a benchmark against which we can score the bids we receive for the alternative GoCo proposal.

[Andrew Gwynne (Denton and Reddish) (Lab)]

15. What support his Department provides for veterans’ travel.

--- Later in debate ---

[John Howell (Henley) (Con)]

17. What assessment he has made of the potential effect that a reduced number of nuclear-armed submarines would have on the UK’s ability to maintain a continuous-at-sea deterrent.

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

The 2006 White Paper, “The Future of the United Kingdom’s Nuclear Deterrent”, stated that the minimum number of Vanguard class submarines required to maintain a continuous-at-sea nuclear deterrent was four. The number of submarines required to deliver CASD into the future will be determined in the main gate investment decision for the successor replacement for the Vanguard class, which is expected in 2016. This is a technical, rather than a policy, question.

[Dr Thérèse Coffey]

Has my right hon. Friend seen recent media reports that the Liberal Democrats might be proposing a reduction to just two nuclear submarines? Does he agree that it would be impossible to maintain a continuous-at-sea deterrent, which is the hallmark of national security?

[Mr Hammond]

I have learned not to read too much into newspaper reports. The main gate decision in 2016, which will define the number of submarines required to maintain CASD, will consider the case for four or three submarines, but I can say without equivocation that there is no possibility of maintaining CASD with two submarines.

[John Howell]

Does my right hon. Friend agree that any cost savings from a proposal to reduce the UK’s fleet of ballistic missile submarines to just two would need to take into account the requirement to maintain the UK’s sovereign submarine manufacturing capability?

[Mr Hammond]

My hon. Friend is absolutely right. Simply reducing the fleet, even if that were possible while maintaining CASD, would not generate proportionate savings. Many of the costs are fixed—the costs of development and maintaining industrial capability, not merely at Barrow-in-Furness for submarine building, but in the nuclear propulsion industry. No one in this House should ever forget either that these high-end, high-technology platforms support the very top end of British manufacturing industry—the high-precision, high-technology engineering industry on which the revival of manufacturing depends.

[Diana Johnson (Kingston upon Hull North) (Lab)]

Will the Trident alternative review be published as a Government document or a Liberal Democrat document?

[Mr Hammond]

An unclassified summary of the Trident alternative review will be prepared by the Cabinet Office and published as a Government document.

[Mr Kevan Jones (North Durham) (Lab)]

In January, the Chief Secretary to the Treasury told The Guardian newspaper that the coalition review of Trident would compile a “compelling” list of alternatives. It was suggested in the Financial Times recently that the review will come down on the side of a submarine-based ballistic missile system. In the light of that, will the Secretary of State tell the House when the review will be published, and if it comes down on the side of a submarine-based system, will the Government consider bringing forward the main gate decision into this Parliament?

[Mr Hammond]

I cannot comment on the findings of the review, which is not yet concluded and has not yet reported to the Prime Minister and the Deputy Prime Minister, but I can tell the hon. Gentleman that there is no need to bring forward the 2016 main gate decision point. That decision will be made in 2016, in order to deliver the new submarines into service from 2028, when they are required.

[Tessa Munt (Wells) (LD)]

I wonder whether the Secretary of State has responded to Rear-Admiral Patrick Middleton, who wrote in The Times on 7 May:

“With the latest developments in defence technology, the argument for Trident as a deterrent is rapidly becoming a losing one”.

[Mr Hammond]

I am afraid I do not agree with him. I suspect this is a retired rear admiral—well, I know it is; and if it isn’t, he soon will be—to whom the hon. Lady refers. We are clear that the retention of the continuous-at-sea deterrent is vital to ensure Britain’s national security and is the ultimate guarantee of our sovereignty.

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

I very much look forward to welcoming the Minister for defence equipment, the Under-Secretary of State for Defence, the hon. Member for Ludlow (Mr Dunne), and the shadow Secretary of State to my parliamentary reception on 1 July about the high-end manufacturing jobs that the submarine supply chain produces. The durability of the submarine hulls is critical to the decisions and the timing of renewal. Will the Secretary of State give the House an update on his Department’s assessment of extending the hull life to 35 years, as is currently the case, and any possible decision to extend it further in future?

[Mr Hammond]

First, I will check my diary. I thank the hon. Gentleman for his kind invitation.

I am not sure whether the hon. Gentleman is asking if we have considered whether it is possible to extend further the life of the existing submarines or to design the successor class with a longer in-service life. On the first question, he will know that we have already extended the life of the Vanguard class once, and it is not judged possible or safe to extend it further. On the second question, we will of course be looking to design the successor class with the longest possible in-service life.

[Dr Julian Lewis (New Forest East) (Con)]

My right hon. Friend is clearly very robust on this issue, but may I urge him to consider deeply the suggestion of the shadow Armed Forces Minister, the hon. Member for North Durham (Mr Jones)? If those on both Front Benches agree on the need to renew Trident and to keep continuous-at-sea deterrence, why should they not agree before the general election to make this irreversible, so that Trident cannot again become a political football, as it unfortunately did between my party and the Liberal Democrats in 2010?

[Mr Hammond]

I have to say to my hon. Friend—who is a great expert on this subject and has been one for longer than I can remember—that the essence of our strategy for defence procurement, which is at the heart of our determination to maintain a balanced budget, is that we do not make contractual commitments until we need to for the delivery of equipment in a timely fashion, when we need it. Locking in decisions before they need to be made merely reduces flexibility and, as the previous Government found out, drives cost into the programme if changes have to be made.

[Mr Speaker]

The hon. Member for New Forest East (Dr Lewis) has spoken eloquently at me on the matter for 30 years.

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

My priority remains the success of operations in Afghanistan. Beyond that, my priorities are to deliver the sustainable transformation of the Ministry of Defence, to maintain budgets in balance and to deliver equipment programmes so that our armed forces can be confident of being properly equipped and trained.

[Mr Baron]

A number of us on the Conservative Benches have reservations about the Government’s reservist policy, including its cost-effectiveness. Given that the MOD’s figures show that the Territorial Army’s mobilisation rate is 40%, which suggests we need 50,000 reservists not 30,000, and that rates of pay for ex-reservists will beat those of a serving brigadier, how confident is the Secretary of State that the £1.8 billion will cover the policy?

[Mr Hammond]

As in many areas, we have to work within the financial constraints presented to us, and we are currently tailoring a package of support for the reserve forces that can be accommodated within the £1.8 billion. I am quite confident that we can do so.

I would like to correct a possible misunderstanding. The top-up to rates of civilian pay has always been available in the system and our proposal is to limit that so that we make sure that we pay only people who have specialist skills what are sometimes very large amounts of money.

[Gemma Doyle (West Dunbartonshire) (Lab/Co-op)]

Mesothelioma is a terrible disease, as far too many of my constituents know. Will the Government take the opportunity to back amendments to the Mesothelioma Bill—or indeed table their own amendments—so that veterans who were exposed to asbestos prior to 1987 while they were employed by the Ministry of Defence, and their families, are able to get compensation?

--- Later in debate ---

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

T6. Given that so many experts, leading generals and admirals think that we no longer have defence forces that are capable of defending this country, will the Secretary of State look at his Department’s spending over the last five years of £34 million on G4S, which did such a good job on the Olympics?

[Mr Philip Hammond]

We are looking at all areas of spending other than those that support military personnel numbers. Some of the hon. Gentleman’s examples and many others that people have quoted at me are, in fact, examples of the Department having historically made efficiencies by civilianising or contractorising parts of the service. We will continue to do that where it makes sense to do so.

[Pauline Latham (Mid Derbyshire) (Con)]

T3. What advice can my right hon. Friend give to small and medium-sized businesses such as Armadillo Merino in my Mid Derbyshire constituency, which wants to apply to the approved MOD procurement list? It has socks that stop trench foot and undergarments that will stop people burning, keeping their lives safer for longer.

[Chris Bryant (Rhondda) (Lab)]

Given that Russia’s latest statement of its military doctrine states that the greatest threat to Russian security is the existence of NATO, and given that Russia has significant naval and military investment in Syria, is it not the height of irresponsibility for the Government constantly to ramp up talk of putting more arms into Syria?

[Mr Philip Hammond]

As I have already said once today, the Government have made no decision to supply any arms to anyone in Syria. As for the hon. Gentleman’s substantive point about Russia, in the context of the debate that we have just had about the nuclear deterrent, it is important to note that the Russians are committed to spending $146 billion over the next 10 years on modernising their forces, including parts of their nuclear forces that had been mothballed over the last few years.

[Jason McCartney (Colne Valley) (Con)]

T4. Eighteen-year-old Private Thomas Wroe from Meltham, in my constituency, was serving in the 3rd Battalion the Yorkshire Regiment when he was killed by a rogue Afghan policeman last September. Next Thursday, Helme Hall care home will open the Tom Wroe complex care facility, a specialised unit for adults with complex care needs. Tom’s mother, Claire, is a manager at the home. Does my right hon. Friend agree that the initiative of dedicating care homes, parks and streets after our brave soldiers is a fitting tribute to those who have made the ultimate sacrifice for our country?

--- Later in debate ---

[Mrs Mary Glindon (North Tyneside) (Lab)]

What message does the Secretary of State have for the 10,000 north-easterners who have signed a petition, that is now with Downing street, seeking to save 2nd Battalion the Royal Regiment of Fusiliers?

[Mr Philip Hammond]

I say to the hon. Lady that we have had to make some very difficult decisions in relation to the structure of the Army as we draw down its size to match our ambitions to our budgets. In doing that we have had to make sure we maximise the military capability. That means structuring the Army to deliver most efficiently the military capability that we need. I know that has meant painful decisions in a number of cases, but I am afraid we have to put the priority on delivering military effect.

[Henry Smith (Crawley) (Con)]

T10. I greatly welcome the recent contract signed by the Under-Secretary of State for Defence, my hon. Friend the Member for Ludlow (Mr Dunne) on behalf of the MOD for the sensor support optimisation project with my constituency company of Thales UK. Can he say a little more about how this sonar technology will help the resilience of our fleet?

--- Later in debate ---

[Sarah Newton (Truro and Falmouth) (Con)]

Falmouth is hosting Armed Forces day on Saturday. Will my right hon. Friend join me in thanking all those people from all walks of life who come together to make it such an exciting day that really pays tribute to our armed forces?

[Mr Philip Hammond]

I am happy to do that, and I look forward to attending the national Armed Forces day event in Nottingham.

Better Defence Acquisition

Lord Hammond of Runnymede Excerpts

Monday 10th June 2013 Commons Chamber

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

The defence of UK national interests is a priority for this Government. To secure that defence, we must provide our armed forces with the equipment and capabilities they need to operate in a rapidly changing security environment. Without the right equipment, delivered on time, properly maintained and available for use, our armed forces cannot function effectively and our national interests are put at risk. Effective procurement and support of defence equipment is therefore not just desirable, but an essential part of maintaining flexible and effective armed forces.

For decades, there has been an acknowledgement that defence acquisition in this country can, and should, be done better. Despite numerous reviews and reorganisations, successive Governments have failed to embed the systemic changes necessary to achieve that objective. We owe it to the men and women of our armed forces, and to the long-suffering taxpayer, to do better.

Two separate independent studies carried out for the Ministry of Defence have suggested that the costs arising from inefficiency in the procurement process are between £1.3 billion and £2.2 billion per annum. Waste on that scale is unacceptable at any time; more so at a time of acute pressure on the public finances. I am determined to drive a step change in the way we do our defence procurement business.

In April, I announced to the House that we had launched the assessment phase for the Department's matériel strategy programme, considering two options for the future of the Defence Equipment and Support organisation: the first, a public sector benchmark, which we call “DE&S+”; and the second a Government-owned, contractor-operated entity, a “GoCo”.

Today, I am publishing a White Paper that sets out the matériel strategy proposals in more detail, and provides more information about our intention to create a new statutory framework to drive better value in single-source procurement contracts, protecting the taxpayer in this significant area of MOD business. We believe that a GoCo-operating model is the solution that is most likely effectively to embed and sustain the significant change that is required to reform defence acquisition, but the decision will be based on an objective value-for-money comparison between the GoCo and DE&S+ options. The assessment phase is designed to deliver specific, costed, contract-quality proposals from GoCo bidders and test them against the DE&S+ benchmark.

There has been considerable speculation in the media and elsewhere about the scope of a GoCo. At the most extreme, I have seen it suggested that the proposal is simply to hand over £15 billion a year of taxpayers' money to a private company and leave it to decide what kit to buy for our armed forces. Let me reassure the House that that is emphatically not the proposition. If GoCo is the selected option, the GoCo partner will manage DE&S on behalf of the Secretary of State. It will act as his agent. All contracts will continue to be entered into in the name of the Secretary of State. Strategic direction 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. The DE&S work force will be transferred to the GoCo-operating company under standard TUPE arrangements and we will expect the GoCo partner to inject a small number of senior managers, and possibly some key technical staff.

Crucially, the GoCo is assumed to be able to recruit and reward its staff at market rates—a critical freedom in a business that is required to deal with the private commercial sector on a daily basis. The proposal set out in the White Paper is for a phased transfer of DE&S to a GoCo, with checks and break points to allow us to halt the process if it is not delivering the results we require. The legislation and the contract will include a transfer regime that will allow the Secretary of State to transfer the business to another contractor, or back to the MOD, in extremis. If, at the end of the assessment phase, a GoCo operating model is selected, we will need to be able to move quickly to conclude a contract with the successful bidder. The Government therefore intend to provide in the Defence Reform Bill the necessary authorities to let a GoCo contract in 2014, together with measures required to allow a GoCo to operate effectively.

There are finely balanced arguments about whether primary legislation is strictly required to allow the establishment of a GoCo. The Government have, however, decided that it is right that we should legislate in this instance because of the importance of DE&S+ to our armed forces and in order to ensure that Members of both Houses, many of whom take a keen interest in defence matters, have a proper opportunity to explore and debate the issues.

The White Paper sets out the proposed model for a GoCo, its key features and our expectations with regard to the control that the Department will continue to exercise and the freedoms that the GoCo will enjoy. Its purpose is to set in context the legislation that we are bringing forward in the Defence Reform Bill, including provisions to ensure that the Ministry of Defence police have the appropriate jurisdiction to be able to operate within the GoCo environment, to extend certain statutory immunities and exemptions enjoyed by the Crown—for example, in relation to the Health and Safety at Work etc. Act 1974 and the Nuclear Installations Act 1965—to the new body, and to allow the transfer of shares in the operating company and/or property, rights and liabilities in the operating company or contracting entity at the direction of the Secretary of State.

The White Paper also sets out reforms to how the MOD undertakes single-source procurement of defence equipment. Open competition is our preferred approach for getting value for money, but sometimes there is only a single provider of a capability we require, and the need to maintain critical national industrial capabilities or sovereign control of the intellectual property in equipment programmes sometimes requires us to place contracts with UK companies without a competitive process.

Single-source procurement accounts for about 45% of the total the MOD spends on defence equipment and support, or about £6 billion per year, and is likely to remain at those levels for the next decade or so. Without competition, suppliers can price and perform without being constrained by the disciplines of the marketplace. There is a clear risk to defence and the taxpayer, and ensuring that we get good value for money in single-source procurement is a key part of my programme to reform defence acquisition.

The MOD currently uses a framework for single-source procurement that has remained largely unchanged for the last 45 years, despite the far-reaching changes to the industrial landscape and to commercial procurement practices that have occurred in that time. Under this system, the profit contractors can earn is fixed, but there are few incentives for them to reduce costs. Such a system does not serve the best interests either of defence or of a competitive, export-focused defence industry.

In 2011, the MOD commissioned Lord Currie of Marylebone to undertake an independent review of our existing approach and to make recommendations. He recommended a new framework based on transparency of contractor cost data, with much stronger supplier efficiency incentives, underpinned by stronger governance arrangements. Based on his recommendations and extensive consultations with our major single-source suppliers, we have developed the new framework I am proposing, details of which are set out in the White Paper. At its heart is the principle that industry gets a fair profit in exchange for providing the MOD with the transparency and protections we need to assure value for money.

A statutory basis will ensure widespread coverage across our single-source suppliers and application of the regime throughout the single-source supply chain. The system will be policed by a stronger, independent, single source regulations office to monitor adherence and to ensure the regime is kept up to date. These changes will incentivise efficiency in operating costs and minimisation of overheads, supporting UK defence sector competitiveness both at home and in export markets.

The proposals set out in this White Paper will deliver the real reform our acquisition system needs to provide the support our front-line forces deserve, to maximise the benefit of our £160 billion 10-year defence equipment programme, and to deliver value for money for the taxpayer. I commend this statement to the House.

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

I start by thanking the Secretary of State for his statement and for advance sight of it. Reform of defence procurement is one of the major challenges facing UK defence. Those on both sides of the House will want to see reforms that deal with overspends and overruns, and ensure that world-class equipment is delivered when and where our forces need it. For too long, the good intentions of successive Administrations have not delivered sufficient reform in defence procurement. However, just as some of the responsibility can be shared, our resolve to learn the right lessons and deliver far-reaching reform must also be collective. We therefore welcome much of today’s statement.

Future procurement systems must provide value for money within financial constraints. Better performance will come from greater professional project management, faster decision making, fuller accountability for outcomes and a more considered use of military expertise. Labour supports reforms—the Bernard Gray report, on which today’s White Paper is based, was commissioned by the previous Government. We have proposed a new budgetary discipline, whereby deferred decisions that increase cost are accounted for within a rolling 10-year cycle, and increased certainty for industry over sovereign and off-the-shelf capabilities.

Labour Members are open-minded about how that is achieved, but I wish to be clear that welcoming this process today is not the same thing as supporting a GoCo in principle. There needs to be rigorous examination of all the possible options and a robust comparison between the two options of a GoCo model and DE&S+. That comparison should rest on the principles of ensuring value for money within programmes; industry adhering to new targets on time and cost; maintaining parliamentary accountability; enhancing a culture of consequence for decision makers; and military involvement being based on tri-service working, not on single-service rivalry. So reform must extend across the Ministry of Defence. Too often, scope creep has led to systems exceeding identified need, and major decisions have been pushed to the right to save in the short term at the expense of longer-term budgetary bow wave. Today’s challenge for Ministers is not just to determine a management model, but to demonstrate that decades-long entrenched behaviours are being corrected.

Let me deal with the specifics of today’s announcement. On the assessment phase, will the Secretary of State pledge to publish the findings of the two value-for-money studies and allow for a consideration by this House prior to a final decision being taken in the legislation? It is essential that Parliament, industry and our armed forces have full confidence that strategic affordability is the determining factor in this process. On costs, will the Secretary of State say whether the new management team of either model would re-cost the baseline of the core equipment programme, or would the figures published earlier this year remain? Furthermore, in the light of the National Audit Office’s observation that the MOD’s assessment of risk is “not statistically viable”, would the new management be able to reform the current method of risk assessment? On staffing, the MOD has said that current reductions will not affect outputs. Would either management model be able to make decisions over staffing independently from the Secretary of State? Will he confirm that trade unions will be consulted throughout the assessment phase?

It is essential to maximise military expertise, so will the Secretary of State say whether he considers it preferable to change the current ratio of military to civilian numbers in procurement within the MOD? Specifically on the GoCo, will he pledge that senior officials currently working on this process within the MOD will not be able to work for the GoCo consortium without a prolonged period of purdah? Many in the country will have a concern about the extent of a private entity’s potential reach over public policy. So, under these plans would a GoCo model cover the whole equipment programme, including the nuclear deterrent? What is the time scale for the implementation of a GoCo? That will enable us to judge when efficiencies may begin to accrue.

One of the biggest uncertainties around GoCo has to do with the ownership of risk and whether contractors could generate private profit while financial risk remained in public hands. For example, can the Secretary of State say whether liability for the £468 million cost overrun noted in the National Audit Office’s “Major Projects Report 2012” would have rested with the taxpayer or the GoCo, had it been established?

On the single source regulations office, we welcome the proposal in principle and will examine it closely. It is essential to drive down cost where possible in single sourcing, as the Secretary of State said. Will he say a little more about who would appoint the members, and whether regulations would be subject to the one-in, one-out rule?

In conclusion, we will support what we hope is a genuine competition. We will scrutinise the processes carefully, because efficient and effective defence procurement is essential, not just for the Ministry of Defence bottom line, but for the remarkable men and women of our armed forces, whom we place in harm’s way to serve on the front line.

[Mr Hammond]

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

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

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

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

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

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

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

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

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

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

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

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

[Mr Hammond]

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

[Mrs Madeleine Moon (Bridgend) (Lab)]

What powers will Defence Ministers and Select Committees have to intervene and examine contracts, negotiations and procurements if the GoCo goes ahead? What powers of oversight will Parliament retain?

[Mr Hammond]

As I said earlier, the procurement contracts will still be entered into in the name of the Secretary of State. The Secretary of State and Ministers will remain accountable to Parliament and to the Select Committee. The permanent secretary at the Ministry of Defence will remain accountable to the Public Accounts Committee, and access to and scrutiny and oversight of those contracts will be exactly the same as they are now.

[Bob Stewart (Beckenham) (Con)]

Will the proposed GoCo have the power to negotiate independently of the Ministry of Defence to try to get a really good deal out of a foreign defence contractor in, for example, the United States?

[Mr Hammond]

If doing so was within the remit given it by the Secretary of State, it would have that power. I need to be very clear about this. The point of hiring a commercial partner is to deploy its commercial expertise. There is no point hiring it and then constraining it so tightly that we do not get any benefit from it. On the other hand, it will be very clear, and I am very clear, that it will always operate within the framework of strategic direction that has been given by the Secretary of State, and the Secretary of State will retain a power to intervene and specifically direct it on a specific point within its management of a programme if necessary.

[Angus Robertson (Moray) (SNP)]

I thank the Secretary of State for advance sight of his statement. Will he clarify that should one go down the GoCo route he has no objection in principle to the winner of a GoCo contract, should that be the preferred outcome, being headquartered in the United States, Europe or further afield?

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[Mr Hammond]

The hon. Gentleman and the House might be interested to know that of the 21 expressions of interest that we have received in response to the issue of the pre-qualification questionnaire, a third have been UK-headquartered companies, but it is likely that the winner of a competition for a GoCo will be a consortium and it is highly likely that some members of that consortium will be non-UK companies. In fact, to be frank, it is highly likely that it will include US-headquartered companies, but the entity with which we contract will be UK-registered and domiciled, and will pay its tax in the UK.

[Penny Mordaunt (Portsmouth North) (Con)]

I congratulate the ministerial team on its progress on this important matter. DE&S covers Her Majesty’s Navy bases. Will the Secretary of State reassure me that his announcement today will not affect the proposal to transfer them to the Royal Navy?

[Mr Hammond]

I can assure my hon. Friend that the plan to transfer the Royal Navy dockyards out of DE&S, along with the plan to transfer the logistics and commodities supply service out of DE&S to an outsource contractor, will continue on track. That is why there is a gap between the projected 2015 total numbers of DE&S on a steady state basis, and the 8,000 that we are expecting to transfer under a TUPE transfer if we go down this route.

[Hugh Bayley (York Central) (Lab)]

How much does the Secretary of State think that the new arrangement will save each year? Will those savings be used to buy additional equipment for our armed forces, or simply returned to the Treasury, leaving our servicemen with less?

[Mr Hammond]

The latter part of the hon. Gentleman’s question is clearly one that I cannot answer on a unilateral basis, but I suspect that, in the way that generally happens, there is a potential win-win situation here—a win for the taxpayer in terms of lower public expenditure and a win for the armed forces in terms of greater capabilities being able to be purchased. I think I included these figures in my statement, but the independent estimates are that somewhere between £1.3 billion and £2.2 billion of frictional costs generated by inefficiencies in the procurement system are incurred every year. It would be a very rash man who suggested that we can squeeze out every last pound of those, but I would expect us to be able to achieve net gains after taking account of the cost of the arrangements—the GoCo fee and the cost of the governance function on the MOD side—in the hundreds of millions of pounds.

[Mr Julian Brazier (Canterbury) (Con)]

I welcome my right hon. Friend’s thoughtful statement. Will he confirm not only that Aldermaston is a GoCo, but that in fact most of the American nuclear programme has historically been run by university-led GoCos? I urge him to look carefully at the issue of military project managers and at the experience from abroad. In land systems, in particular, we can end up with a project manager and an expensive military adviser, rather than one uniformed officer driving it forward. It is worth looking at the Swedish experience, for example, which is of a very effective and tight ship with mostly military project managers.

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[Mr Hammond]

I hear my hon. Friend’s point but, to be blunt, I think that we have to be realistic about this and acknowledge that military personnel are not necessarily trained to be best equipped to deal with world-class industrial project managers employed on eye-wateringly large salaries by the defence contractors we have to negotiate with. It is to try to allow DE&S to engage with those multinational corporations and world-class project managers on a level playing field that we are considering these changes. There will be a role for the military in this organisation, but it will not generally be as lead project mangers.

On my hon. Friend’s other point, I am grateful to him for drawing the House’s attention to the fact that the majority of the US nuclear programme is in the hands of non-public sector organisations—federally funded research and development corporations—which look very much like GoCos.

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

The strategic defence and security review in October 2010 resulted in a four-year delay to the in-service date for the Vanguard class replacement submarines. It was by no means the first project that has been shifted to the right with increased costs, but it caused particular disappointment because it was done by an Administration who, when in opposition, criticised the former Administration for doing similar things. If a GoCo is in place when such decisions are considered in future, on submarines or anything else, will it be taken out of Ministers’ hands?

[Mr Hammond]

As I have already said, Ministers will retain the ability to provide strategic direction. If the hon. Gentleman does not mind, I will take no lectures from the Opposition on shifting projects to the right at huge cost, because the previous Government shifted the carrier project two years to the right at a cost of £1.6 billion. What was actually done in 2010, in relation to the submarine enterprise, was a reconfiguration of the programme between the Astute class submarines and work on the Vanguard class replacement submarines, which resulted in a delay to the introduction into service of the Vanguard class, but within the overall constraint that we have in this country of needing to sustain a submarine yard at Barrow, and the minimum level at which we can sustain a submarine yard is building one submarine at a time. However we configure them—Vanguard class first or Astute class first—we have to provide that work flow if we are to keep that sovereign capability. That is the kind of single-source procurement that we are targeting in the announcement I made today on the single-source procurement rules.

[Martin Horwood (Cheltenham) (LD)]

I commend the Secretary of State for getting to grips with defence procurement, which is long overdue, but does he recognise that there is nervousness in some quarters about the complexity of the emerging process, which will involve the MOD, the armed forces, NATO, the private supplier, the GoCo and the independent cost advisory service? Can he give the House any reassurance that new inefficiencies will not creep into the system as a result of that complexity?

[Mr Hammond]

I will be very frank with the hon. Gentleman: one of the things I have learnt over the past three years is that new inefficiencies creep in all the time if one is not continually vigilant. That, incidentally, is why, however much one thinks one has squeezed out all the inefficiencies, when one goes back around the loop and looks again one finds more that were not noticed the last time or that have crept in since. He is absolutely right to say that it is a complex enterprise, but within the overall portfolio of defence transformation—we are carrying out many hugely complex projects simultaneously —it is just one of many, and I am confident that we can manage it.

[Dr William McCrea (South Antrim) (DUP)]

Will the Secretary of State assure the House that the interests of national security and the safety of our armed forces, to whom we owe a great debt of gratitude, as well as value for taxpayers’ money, will be at the heart of the changes in defence procurement? Will he also assure us that all essential defence equipment will be made available to our front-line forces in the defence of the nation?

[Mr Hammond]

I can of course give the hon. Gentleman that assurance. We are trying to do two things: to ensure that the £160 billion defence equipment and support programme is delivered effectively to our armed forces and that it is delivered efficiently and in a value-for-money way to the taxpayer. In the end, this allows us better, more reliably and more sustainably to support our armed forces while ensuring that this is done in an appropriate way during a period of public financial austerity.

[Sir Gerald Howarth (Aldershot) (Con)]

I was a fan of Mr Bernard Gray’s report in 2009 when I was shadow defence procurement Minister, but I was a bit nervous about his proposals for a GoCo, so I welcome my right hon. Friend’s caution; he has taken the right attitude. Will he set out the mechanism by which he hopes to be able to maintain the crucial industrial capabilities that this nation needs, because that is an extremely important part of his statement? Will he also set out how the new proposals might avoid the mistakes of the £800 million cost overrun on the disastrous Nimrod programme?

[Mr Hammond]

I am grateful to my hon. Friend. He knows me and he knows that I am a cautious person. This is a big and complicated project, and we are approaching it carefully. We are weighing up the options and taking the appropriate length of time to make the decisions, and I am confident that they will deliver the result that we require. He asks about our national sovereign capabilities. We have set out our approach to the defence industry in the White Paper “National Security Through Technology”. We have also set out today, in this White Paper, the proposed changes to single-source pricing regulation and how we expect to drive greater efficiency into the single-source part of the defence industry that delivers about half our requirements. Only by making those in that sector focus on reducing costs, which they currently have very little incentive to do, will we make them not only efficient providers to us but efficient and competitive players in the international defence export market. That is in the interests of the industry, the UK’s armed forces and UK plc.

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

The Secretary of State referred to the freedom to recruit and reward staff with market rates as, I think, a “critical” freedom in the potential move to a GoCo. In that phased transfer, would any increased remuneration in bonus packages still come from the MOD baseline?

[Mr Hammond]

That depends. We would expect a GoCo contractor to inject a certain number of senior staff who would be part of its package and who would be remunerated through its incentivised fee. Within the overall DE&S work force, getting the right skills in the right places will be part of the task for the management contractor. In some cases, that will mean recruiting at market rates, because at the moment we are haemorrhaging talent. The Under-Secretary of State for Defence, my hon. Friend the Member for Ludlow (Mr Dunne), has just given me an example where we had nine applicants for 70 commercial posts that have recently been advertised. We have to address the haemorrhage of talent from DE&S by offering market rates if we are to support our armed forces as we need to.

[Peter Luff (Mid Worcestershire) (Con)]

The Secretary of State will understand how pleased I am that he has announced the implementation of the major elements of the report that I commissioned from Lord Currie on single-source pricing regulations—a highly technical but really important subject. On DE&S, does he share my concern that there may be forces even in his own Department, and certainly elsewhere in Government, that may wish to frustrate the progress towards a GoCo? May I encourage him to reassure me that he will work enthusiastically and energetically, notwithstanding his caution, to overcome unreasonable, opportunistic or bureaucratic obstacles put in his way on the path to a GoCo?

[Mr Hammond]

I am grateful to my hon. Friend and happy to acknowledge the crucial part that he has played in the process that has led us to this announcement. I can safely say that yes, there will always be forces that resist any change that I look to make. We have to carry the case by making the argument, building it during the assessment phase and then presenting the value-for money case for the Go-Co against the DE&S+ benchmark comparator. I am absolutely clear that we have to make that case: there is no pre-judgment that a GoCo is the route we will follow. We have to prove that it provides value for money, and do so to some of the institutionally most sceptical forces—no names, no pack drill—in Government.

[Paul Flynn (Newport West) (Lab)]

Has the Secretary of State noticed the extraordinarily high number of former Ministers, civil servants, admirals and generals who awarded contracts to companies when in office and then ended up working for the self same companies in retirement? Would not it be a good idea to ban these senior people from working in companies to which they have awarded contracts, in order to ensure that contracts are awarded in office on the basis of the needs of the public purse and not on people’s hopes to gain a hacienda in Spain from their retirement earnings?

[Mr Hammond]

The hon. Gentleman is being a little harsh: most if not all of the elected and appointed people with whom I have come into contact do their very best to deliver in the public interest. We have a rigorous set of rules in place to deal with the cross-boundary issues between the public and private sectors. We must never get into a situation where we prevent or discourage all transfer between the public and private sectors. That would be a disaster. We need that flow of lifeblood between the two, but we need it to be done properly: it has to be properly regulated and transparent.

To answer the hon. Gentleman’s specific question, when The Sunday Times published revelations last year about people who had gone from senior military roles into defence industries, I asked the same question as he has and the advice I received was that it would not be lawful to issue an unlimited ban preventing people from taking up one career once they had left another.

[Mr Douglas Carswell (Clacton) (Con)]

For decades, much of the defence budget has been spent in the interests of defence contractors: by constraining the range of suppliers, the seller gets to set the terms of trade. How will these reforms ensure more choice and competition in defence procurement?

[Mr Hammond]

I am sorry to say that where there is a single supplier or a national security reason for our having to procure in the UK, we cannot magic up a competitive marketplace. What we can do in such circumstances is control the pricing of those contracts. At the moment, under the current regime, profit is clearly controlled but costs are not, and there is no incentive for contractors to control and manage their costs. What we are proposing is a regime where, as now, profit is controlled but where there are clear financial incentives for contractors to control their costs and get them down. By working in this way—by aligning the interests of defence with those of the contractors—we will drive out cost and increase the amount of deliverable military capability to our armed forces.

[Katy Clark (North Ayrshire and Arran) (Lab)]

What implications will this announcement have on complex weapons systems and in particular on establishments such as Defence Munitions Beith in my own constituency, which houses and services such weapons systems?

[Mr Hammond]

In terms of our procurement of weapons systems and of contractor support for weapons systems, the DE&S will work as the agent of the Secretary of State. I am not sure that I can put my finger on the precise function of the establishment mentioned by the hon. Lady, but we have a separate programme to outsource some of the defence logistics and commodity procurement activities, which I mentioned earlier. None of theses plans will be changed by whether DE&S is run in future as a GoCo or as a fully public sector DE&S+ model.

[Mark Menzies (Fylde) (Con)]

Several thousands of my constituents are employed at BAE Systems in Warton, which is involved in advanced manufacturing of military aircraft. What benefits are they likely to see as a result of today’s announcement?

[Mr Hammond]

They will see benefits at two levels and a healthier BAES as a result of this announcement. First, large defence contractors, perhaps counter-intuitively, do not relish the lack of a capable interlocutor in their trading partners. They would welcome our beefing up our capability and having higher-skilled, better-paid project managers on our side of the table, because that would drive genuine efficiencies into the process. At that level, we know that the companies will welcome this announcement. Secondly, on single-source procurement, I am confident that over time by incentivising cost-efficiency we will increase the exportability of British defence products, which are an incredibly important part of our high-tech manufacturing industries and help us to sustain jobs at the very top of the curve.

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

These are early days and final decisions are yet to be made, but what indication can the Secretary of State give about the impact of this announcement on jobs at MOD Abbey Wood? Will he ensure that suitable provisions are in place for the employees who may be affected?

[Mr Hammond]

As my hon. Friend knows, the TUPE transfer of an enterprise does not imply any reduction in job numbers at the outset. It is true that a private sector partner taking on a work force of this nature will, over time, look to reconfigure the shape of the work force to make the business as efficient as possible. However, it will have to do that within the constraints of the TUPE regulations, normal employment law and the arrangements that are in place for negotiation with the trade unions.

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

I thank my right hon. Friend for his statement and for the White Paper, which will be of great interest to the Public Administration Committee because it is conducting an inquiry into procurement across Government, including defence procurement. I remain to be convinced that a GoCo is the right idea. If, as he says, the objective is to be able to recruit and reward staff at market rates, why can we not legislate to do that in the Ministry of Defence, instead of contracting it out? After all, is not the acquisition of defence matériel and equipment a core function of the Ministry of Defence? We must have those skills in-house, because we cannot expect to manage them in some arm’s length contractor.

[Mr Hammond]

My hon. Friend says that he remains to be convinced; I am glad to confirm that I remain to be convinced. It is exactly the point of the assessment phase to convince us collectively that this is the right way to go. This proposal is about being able to employ staff at market rates, but that is only a small part of the total challenge. There are many other cultural and behavioural changes that need to be delivered to make it work. He is right that defence procurement is a core function. That is why we will maintain a competent customer function in the MOD, led by the Chief of Defence Matériel and supported by an external private sector consultant to build the intelligent customer function, to ensure that we are in a robust position to manage the GoCo contractor, if that is the route that we choose, not just now but through future evolutions of the GoCo and future appointments of GoCo contractors.

[Jeremy Lefroy (Stafford) (Con)]

I thank my right hon. Friend for his statement and for the grip that he has on his Department’s budget. Clearly, the first priority of defence procurement is value for money for the taxpayer, but does the procurement system also take into account the export potential of UK-based companies when making its assessments?

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[Mr Hammond]

I am grateful to my hon. Friend. Export potential is an important consideration and one of the Department’s stated priorities. As I have said, I believe that what we are doing, particularly with regard to the single-source procurement regulations, will drive export competitiveness into defence contractors. If a GoCo is appointed, one of its required tasks will be the support of UK defence exports, which is a UKTI lead.

[Jason McCartney (Colne Valley) (Con)]

What implications, if any, will these long overdue reforms have for small and medium-sized enterprises in my constituency that are already employed in the defence procurement supply chain?

[Mr Hammond]

We have an active policy of encouraging the engagement of SMEs in the defence supply chain and it includes many thousands of SMEs. The single-source pricing regulations will apply throughout the supply chain, but will have a price threshold. We expect almost all SMEs not to be directly affected because their level of transactions with the MOD will fall below the price threshold. The threshold is yet to be determined, but it is likely to be about £5 million.

[Mr Peter Bone (Wellingborough) (Con)]

I thank the excellent Secretary of State for coming to the House and making this statement. One problem that I have seen with defence procurement is not the way in which equipment has been procured, but the decision by the Ministry of Defence at the beginning of the process to have something more than the standard package. There was the nonsense with the Chinook aircraft, which were bought but never flew because the Department wanted to add to them. Will there be more emphasis on buying standard packages?

[Mr Hammond]

That depends on what we are buying. Clearly, there are things that we can buy off the shelf or from competitive international providers. We recently ordered the new fleet of MARS—military afloat reach and sustainability—refuelling tankers from a South Korean shipyard. That decision did not go down well with everybody, but it was sensible procurement. At the same time, we have to maintain important capabilities that are essential to our national sovereignty here in the UK. In those cases, we have to support the indigenous industry. One purpose of the changes is to make transparent the costs that are driven into a project by the specification of bespoke requirements and to force the customers to recognise those costs.

[James Morris (Halesowen and Rowley Regis) (Con)]

I welcome the statement, but will the Secretary of State say more about the timescale over which he expects the reforms to deliver tangible savings to the taxpayer?

[Mr Hammond]

As I said to the shadow Secretary of State, if we went down this route, we would expect to award a contract next year and for it to be effective by the last quarter of 2014. We would then expect there to be a two-stage process towards the full GoCo-isation—if I may use that term—of DE&S. We would expect savings and efficiencies to be generated from the very beginning, and from the second year of operation we would expect there to be cashable benefits.

[Mr Philip Hollobone (Kettering) (Con)]

I congratulate my right hon. Friend on his statement. Were he to save the full £1.3 billion to £2.2 billion of waste that he has identified, he would be able to buy an extra one or two Type 45 destroyers a year and to start to rebuild the Royal Navy back to its proper size. Will he confirm that this is the biggest waste black hole in the MOD budget and that no other hole in the budget has a bigger annual cost?

[Mr Hammond]

It is certainly our assessment that the frictional costs of inefficiencies within defence procurement are the biggest single challenge that we face and our biggest single opportunity. I was at Portsmouth the week before last and talked to the commander of the dockyard. He told me that once the Queen Elizabeth carriers are berthed there, he will be making provision for some 200,000 tonnes of fighting ships to be tied up in the harbour. That will be largest tonnage that he or his predecessors have had to make provision for since the 1960s.

[Richard Fuller (Bedford) (Con)]

I understood from my right hon. Friend’s thoughtful statement that the organisational merits underpinning the GoCo would be cultural change and skills enhancements to deliver efficiencies. Will he tell the House in more detail what missing skills he hopes to attract? Will he also reassure us by saying what steps he will take in the incentives scheme for the management company of the GoCo to avoid the perverse incentives that led to so many financial messes in public-private contracting under the last Government?

[Mr Hammond]

My hon. Friend is right in setting out the changes that are required. One he did not mention, but which is important, is creating a hard boundary between the customer and the provider organisation. At the moment, responsibilities across that boundary are not as clear cut as they should be, and that allows specification scope to drift on occasions. Let me give him a couple of examples. We currently spend in DE&S £400 million a year on external technical support because we cannot hire the people we need. Being unable to hire somebody at £50,000 a year means that we are paying a contractor £1,000 a day to do the work. We expect the GoCo contractor, if we go down that route, to make substantial early savings by hiring key technical capabilities into the organisation, rather than by bringing them in as technical contractors. He is absolutely right about perverse incentives. Our big challenge now in the assessment phase is to negotiate a set of key performance indicators and incentive payment structures that align a GoCo contractor with the priorities of the Ministry of Defence.

Afghanistan

Lord Hammond of Runnymede Excerpts

Tuesday 4th June 2013 Written Statements

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

As our presence in Afghanistan reduces, our requirement for the support of local staff is also reducing. The Government recognise the contribution and commitment of all local staff. They have played a vital role in contributing to our shared goal—a more secure, stable and prosperous Afghanistan. Without them, the UK’s contribution to the international mission would not have been possible. We pay tribute to those who have made the ultimate sacrifice and those who have been injured while working with us.

The future of Afghanistan lies in the hearts and minds of such people, who have done so much to move their country forward. Having invested so much already, the Government want to encourage local staff to stay in Afghanistan and to use their skills and knowledge to make it stronger, better able to meet the challenges ahead and to seize the opportunities.

For this reason, we have decided to implement a generous package of training and financial support for our locally engaged staff in Afghanistan. It will provide local staff with up to five years of training or education in Afghanistan in a subject of their own choosing and a living stipend for the full period of training based on their final salary. Staff who prefer not to take up the training package will be offered a second option—a financial severance payment which represents 18 months’ salary. This will be paid in monthly instalments. These options aim to encourage local staff to develop valuable skills and knowledge in Afghanistan so they can go on contributing to a brighter future for themselves, their families and their country.

The Government acknowledge that some local staff, such as interpreters, have worked in particularly dangerous and challenging roles in Helmand. In recognition of this unique and exceptional service to the United Kingdom, these local staff and their immediate families will be offered a third option—resettlement in the UK. In order to help them adjust to life in the UK, they will be offered initial assistance and accommodation including access to benefits, as well as support in seeking employment.

To be eligible for resettlement in the UK, local staff must have routinely worked in dangerous and challenging roles in Helmand outside protected bases. Seriously injured staff, who might have qualified had their employment not been terminated due to injuries sustained in combat, are also included. Local staff who were contracted by the UK, but who mostly worked for Danish or Estonian forces and who meet the criteria above, are also eligible. This approach has been agreed with the Danish and Estonian Governments.

We have always been clear in our desire to recognise the efforts of local staff, and have balanced this against a range of other factors. These include the cost of any scheme, and the potential impact on the UK and on Afghanistan of resettling large numbers of people. In line with previous similar policies, qualification for this redundancy scheme is limited to those local staff who were in post working directly for HMG on 19 December 2012, when the Prime Minister announced the drawdown of UK forces, and who have served more than 12 months when they are made redundant. Those whose employment ended before this date, and those whose employment was ended voluntarily or for disciplinary reasons will not be eligible. In total, we estimate that around 1,200 local staff will qualify for a redundancy package. Of these, we estimate that up to 600 will be eligible for resettlement, although they may choose to stay in Afghanistan to help build its future, supported by the training and financial packages.

Further details of the practical arrangements for applying for and implementing the redundancy scheme will be announced in due course.

Separately from the redundancy package, we recognise our obligations to any local staff who face real threats to their safety or that of their immediate family as a result of their service to the UK. Our existing intimidation policy will remain in place for all local staff, regardless of their date and duration of employment. This ensures that local staff who face real threats to their own and their families’ safety, now and in the future, are supported. The policy offers relocation within Afghanistan and, in the most extreme cases, the possibility of resettlement in the UK. We are currently reviewing the policy to ensure it continues to provide a fair and robust system of assessing threats to, and ensuring the protection of, our local staff.

The UK is strongly committed to the future of Afghanistan and will maintain a long-term relationship based around trade, diplomacy, development assistance, financial contribution to the Afghanistan national security forces and military training. Our future work in Afghanistan will continue to benefit from the talent and dedication of local staff, and we will never forget this.

Armed Forces Pay Review Body: Medical and Dental Officers

Lord Hammond of Runnymede Excerpts

Monday 20th May 2013 Written Statements

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

The 2013 main report of the Armed Forces’ Pay Review Body (AFPRB) and Government response was published on the 14 March 2013. In line with convention, the AFPRB has today published a supplement to its main report making recommendations on the pay of service medical and dental officers. The supplement is later than the main AFPRB report to allow the review body to take into account recommendations from the NHS Doctors’ and Dentists’ Review Body. The Government accept the recommendations of the report in full. I wish to express my thanks to the chairman and members of the review body for their work in producing the report.

Copies of the AFPRB report are available in the Vote Office.

Operation Herrick

Lord Hammond of Runnymede Excerpts

Tuesday 14th May 2013 Commons Chamber

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

With permission, Mr Speaker, I would like to make a statement on troop rotations as we draw down our forces in Afghanistan.

First I would like to pay tribute to Corporal William Thomas Savage and Fusilier Samuel Flint, both from 2nd Battalion the Royal Regiment of Scotland, and Private Robert Murray Hetherington, a reservist from 7th Battalion the Royal Regiment of Scotland, who were tragically killed in action in Afghanistan on 30 April when their Mastiff vehicle was struck by an improvised explosive device on route 611. Their deaths are a stark reminder of the continued dangers our soldiers, sailors, airmen and marines face as they manage the transition of security responsibility to the Afghan national security forces. My thoughts are with their families and loved ones as they come to terms with their loss.

Although security in Helmand is steadily improving, with Afghan forces already responsible for the bulk of the province, the environment in which our troops operate remains dangerous. IEDs remain one of the greatest threats and present risks even to the very best-protected vehicles available, of which Mastiff is one.

As the House will be aware, at the height of operations we had around 9,500 military personnel in Afghanistan. Our troop numbers will be at 7,900 by the end of this month and, as the Prime Minister announced last December, they will reduce further to around 5,200 by the end of this year. This is a clear reflection of the international security assistance force campaign drawing to a close and the Afghan national security forces taking on increasing responsibility for their own security. Already the ANSF lead 80% of all security operations, covering nearly 90% of the Afghan population. By the summer, that figure will reach 100%. So after more than a decade in which fighting the insurgency has been a primary focus of the ISAF coalition, the campaign is changing and the UK’s military role in Afghanistan is evolving from combat to one of training, advising and assisting the Afghans; and, as the Prime Minister has made clear, UK forces will no longer be in a combat role by the end of 2014.

In the light of this, and of the changing nature of the operation, we have looked at how we can best deploy what will be declining numbers of troops and smaller amounts of equipment between now and then to deliver the best possible protection to our people while continuing to provide the Afghans with the support they need during this critical transition period. Brigades deploying to Afghanistan on Operation Herrick have routinely done so on a six-monthly cycle, with a relief-in-place occurring in spring and autumn each year. The phased nature of the rotation and the overlap of deploying and redeploying forces has meant individual tours of between six months and six and a half months for the vast majority of personnel. That pattern of rotation has worked well for the enduring deployment, but is judged not to be sustainable during the final months of the draw-down period. The Army has therefore decided that the brigade deploying in October on Herrick 19 will deploy for eight months from October this year until June 2014. The subsequent brigade, Herrick 20, will deploy for six months from June 2014 to December 2014 when the ISAF campaign concludes, but the deployment could extend to up to nine months for a relatively small number of individuals who may be needed to support final redeployment activity post-December 2014.

The rationale for this decision is clear and is based on advice from military commanders. First, it will better align the final tours with key milestones in the transition process such as the Afghan presidential elections in spring 2014. Secondly, it will help to maintain continuity in posts where we work closely with our Afghan partners at a time when retaining and bolstering Afghan confidence is critical, both for mission success and to ensure our own force protection. Thirdly, it removes the need to train and deploy another brigade at greatly reduced scale to cover the final couple of months of 2014. It will therefore minimise the total number of service personnel who deploy to Afghanistan over the next 18 months. That will allow personnel to focus on post-Afghanistan training, improving the general readiness of the Army as it reverts to a contingent posture for the future.

The Chief of the Defence Staff and I believe that extending Op Herrick 19 to eight months and allowing the possibility of some personnel on Op Herrick 20 deploying for up to nine months is the most effective way of maintaining force protection, meeting our commitment to the NATO ISAF mission, and supporting the Afghans until the end of 2014. Of course, as we have already made clear, the UK’s commitment as part of the international community’s assistance to Afghanistan will continue well into the future, beyond 2014, in terms of significant investment in development assistance and support to the ANSF, as well as UK-led military training.

The changed pattern of brigade rotations does not mean that all those deploying will do so for a longer time. I should emphasise to the House that, because of the expected steady reduction in numbers during Herrick 19 and 20, we expect that most personnel will continue to serve no longer than the standard six or six-and-a-half-month tour, while significant numbers will serve less than six months. At the same time, the amended tour rotations mean that some personnel will deploy for up to eight months, with a much smaller number potentially deploying for up to nine months. At this stage it is not possible to be precise about the total numbers of personnel who will be affected, although current estimates suggest that between 2,200 and 3,700 overall may deploy for more than six and a half months.

We have considered carefully how best to compensate affected personnel who serve extended tours and face increased uncertainty about their pattern of deployment and relatively more austere conditions which may be expected towards the end of the Herrick campaign as the redeployment of assets continues. Her Majesty’s Treasury has agreed the recommendation of the defence chiefs that a bespoke allowance should be paid to eligible personnel who serve more than seven and a half months in Afghanistan from September 2013. This Herrick draw-down allowance will be paid at the rate of £50 per day before tax and is payable on top of the standard operational allowance package. The new allowance will not apply to those personnel in the small number of established longer-term posts who are already compensated by the campaign continuity allowance. Service personnel who may serve longer terms and who may therefore be eligible for the new allowance have already been notified by their commanding officers.

As I said at the beginning of this statement, the campaign and the UK’s military role in Afghanistan are changing. During this period, it is critical that we retain the ability properly to protect our forces, as well as to maintain the confidence of the Afghans as our combat operations draw to a close and they take on full security responsibility. The number of UK forces in Afghanistan may be reducing, but they still have a vital job to do, and this initiative is the most effective way for them to do it successfully, while remaining as safe as possible. I commend the statement to the House.

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

I thank the Secretary of State for his statement and for providing notice of it, although unfortunately much of it appeared in this morning’s media.

I wish to start in the same way as the Secretary of State by paying tribute to those who lost their lives recently in Afghanistan: Corporal William Thomas Savage and Fusilier Samuel Flint, both from the 2nd Battalion the Royal Regiment of Scotland, and Private Robert Murray Hetherington form 7th Battalion the Royal Regiment of Scotland. Little we can say in this House can heal the hurt that their families feel, but they should at least know that they remain in our thoughts and prayers. Members on both sides of the House will always remember the remarkable individual acts of heroism and the collective acts of courage that define our armed forces. It is their sacrifice and bravery that is helping to make Afghanistan more stable and the UK safer.

It is essential that the progress our armed forces are making in Afghanistan becomes permanent and that full transition to an Afghan lead on security is successful. This remains a mission that is not just in our national interest, but in the interests of international stability.

The Opposition consistently commit to bipartisanship on Afghanistan and our support is, of course, complemented by scrutiny. Today is no different: we see the logic in the Government’s move, but many will be concerned about the impact on the individuals affected.

The enormous operation mounted over the past 12 years will require extensive and expensive effort as it is brought to a close. Recouping and reintegrating equipment, training the Afghan forces, facilitating inward investment and seeking a political solution are all essential elements of the international community’s task. As part of this, we see the merit in ensuring that there is not a destabilising changeover during the Afghan presidential election next year and that personnel are present to ensure that equipment is repatriated efficiently.

Could the Secretary of State say which regiments and units will be affected, how many of those expected to stay for longer he anticipates will be reservists, and why the Herrick draw-down allowance does not start from the beginning of the extended tour?

I say gently to the Secretary of State that there appeared to be a slight contradiction in his statement. He said that he was not aware of the exact number that will be expected to stay beyond six months, but towards the end of his statement he said that everyone who will be expected to stay for longer than six months has been informed by their commanding officer. There therefore seems to be a glitch, if not a contradiction, in the logic of his argument.

Many people will worry that a smaller force operating in Afghanistan after the withdrawal deadline may be subject to higher risk. Will the Secretary of State say whether all those who are planned to be in-country in 2015 will be combat troops with NATO-provided force protection?

Extended exposure to conflict increases the risk of physical and mental health problems. Research for King’s College London has shown the importance of adherence to the Harmony guidelines. Will the Secretary of State say how the Harmony guidelines will be altered for those affected by today’s announcement? Research for King’s College London also shows that if tours are longer than anticipated, servicemen and women are much more likely to report symptoms of post-traumatic stress disorder.

This is a one-off measure which, as I have said, has merit. However, many will note that the 2010 strategic defence and security review stated categorically:

“We need to challenge some of the fundamental assumptions which drive force generation, such as tour lengths and intervals”.

It stated that the single service chiefs would carry out the review,

“completing their work by the spring of 2011.”

Last year, that work was still ongoing. Will the Secretary of State say what work has been done internally on the wider application of longer tours of duty? If there is to be a shift to longer tours on a more regular basis in any future conflict, the military community will want a better understanding of the recommendations of the service chiefs.

Today’s announcement also raises the issue of the UK’s long-term commitment to Afghanistan. As part of an alliance presence, training and support for Afghan forces post-2014 will be essential. There is no word yet on the size and scope of such a force or the UK’s role within it. Who will be responsible for the protection of UK service personnel? Will any commitments that are made before 2015 be open-ended or time-limited? When does the Secretary of State expect more detail to be forthcoming?

Today we are focusing on the temporary extension of two tours. I want to turn, finally, to how we will mark permanently the contribution of all those who have toured and, in particular, those who have not returned. The Opposition believe that there should be a national memorial for all who have served in Afghanistan. We have also proposed that streets be named after fallen personnel, should their families and communities request it, and that veterans champions should be working hard in every local authority to help service leavers with the transition to civilian life. I hope that the Government will take this opportunity to support those and other measures.

As the operation in Afghanistan draws to a close, our nation is rightly showing huge support for those who have served. That public sentiment will prevail beyond any withdrawal timetable and so should the commitment of the Government, no matter who is in power. It is in that spirit that we want today’s announcement to be successful. We offer to work with the Government to achieve a fitting legacy in Afghanistan and to support our troops.

[Mr Hammond]

I am grateful to the right hon. Gentleman for reasserting the bipartisan approach that has prevailed on matters relating to Afghanistan. I welcome his pragmatic engagement with this announcement and his perfectly legitimate questions.

I should say at the outset that when I said that the people who were eligible and likely to be affected by the announcement had been informed, I should have used the military term warned off. Those in the pool from which the people will be drawn have been warned off that they may be affected. It will be some time before we can be clearer about who precisely will be affected. Although the next Herrick rotation is in preparation, we have not yet announced the precise composition of the next brigade. That will be determined by the practical evolution of things on the ground. I am afraid I cannot therefore give the right hon. Gentleman more detail today.

The right hon. Gentleman asked me why the Herrick draw-down allowance is not payable from day one of the tour. It is intended to compensate for the longer period of duty, the uncertainty and the austerity that may exist in the final part of the Herrick campaign. Normal allowances will be payable throughout the deployment. The Herrick draw-down allowance is an additional allowance payable from the seven-and-a-half-month point. That ties in with the current campaign continuity allowance and makes it fair and equitable among those who have served longer than six and a half months historically and those who will do so in the future.

Of course, the right hon. Gentleman’s points about additional risk and the additional potential for physical or mental health issues arising from longer tours are legitimate, and we have considered them carefully. It is worth pointing out to the House that as we draw down, a higher and higher percentage of the troops deployed will be deployed to main operating bases, where they will be relatively much safer than they have been in the forward operating bases, patrol bases and checkpoints that they have occupied in the past. Conditions will generally be significantly better.

The Harmony guidelines will not routinely be breached. Harmony is measured by the number of nights of separated service over a three-year cycle, and nothing that I have announced today is expected to have an impact on the armed forces’ ability to maintain Harmony. I should also say that this is emphatically not a systematic shift in policy with regard to tour lengths. It is a bespoke solution to deal with the final few months of the Herrick campaign and will not affect our standard deployment policy for the future.

On the two generic points that the right hon. Gentleman raised about the timing of our announcements on post-2014 deployment, he will know that discussions are going on with NATO literally right now, as we sit here, on the post-2014 configuration. We will continue to discuss the options with allies, and as soon as we have come to a conclusion we will of course inform the House.

Finally, I am pleased to say that we are in complete agreement on the question of a national memorial. My expectation is that the memorial wall in Bastion will be dismantled and recovered to the UK, probably for re-erection at the national arboretum in Staffordshire. My personal view is that we should also look at having a fitting memorial in central London to those who have given their lives both on Op Herrick and, before, on Op Telic. I would be happy to enter into a discussion with the right hon. Gentleman about that to see whether we can make it a bipartisan initiative.

[Sir Menzies Campbell (North East Fife) (LD)]

May I begin by associating myself with the remarks of condolence in relation to the three individuals who have recently lost their lives in Afghanistan? The Royal Highland Fusiliers is a regiment to which my family has a particular attachment.

It was never the understanding that bringing an end to combat operations would consist of turning the key in the lock and putting the lights out. Obviously, we need to employ rather more sophisticated means. In that respect, what the Secretary of State has said is entitled to receive the endorsement of the House, since it proceeds upon the military advice and has as its primary consideration force protection at a time when our forces might be particularly vulnerable.

[Mr Hammond]

I am grateful to my right hon. and learned Friend and should emphasise that our intention and objective is still to compete the draw-down by the end of 2014 if we can. We will certainly make every effort to do so that is consistent with proper force protection and the good order of our forces. However, today’s announcement gives us the flexibility to keep small numbers, primarily of logisticians, in Camp Bastion beyond the end of 2014 if they are needed to complete that draw-down.

[Derek Twigg (Halton) (Lab)]

There is obviously a difference between those who serve in the rear echelon at Camp Bastion and so on, who are important to the whole operation, and those who go outside the operating bases on to the front line. Does the Secretary of State envisage that personnel will be continually asked to do that throughout the whole of their deployment? In particular, what will happen to the medical teams that are sent out to Camp Bastion?

[Mr Hammond]

It is not our expectation that we will continue routinely to patrol outside the main operating bases beyond the end of this year. By then, we expect to be operating from only four main operating bases, and troops will routinely be operating within those bases. Of course, they will have to retain the ability to go out in support of the Afghans if that is necessary. We intend to maintain the role 3 hospital at Camp Bastion right through to the end of the operation.

[Mr James Gray (North Wiltshire) (Con)]

What the Secretary of State has announced this morning makes perfectly good sense from a straightforward operational standpoint, but does he not agree that if one is deployed for up to nine months, with a six-month pre-deployment training period prior to that—a total of up to 15 months away from the family—particular strains may come to bear on friends and family at home? What extra care will he take to ensure that those who are deployed for lengthy times are looked after from a compassionate standpoint? In particular, will he pay great attention to reservists, for whom those stresses and strains may be even greater?

[Mr Hammond]

First, I do not think my hon. Friend is absolutely correct to say that the six months’ training, together with a maximum theoretical deployment of nine months, would amount to 15 months away from home—certainly not all the training period will involve being away from home. However, I am quite certain that the chain of command will be sensitive to individuals’ circumstances in planning the next deployment.

My hon. Friend makes a valid point about reservists. A period of service that might be extended may clearly be more problematic for reservists than for regulars. Again, we will take that fully into account when planning for individuals to be selected for deployment.

[Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)]

May I associate myself with the earlier expressions of condolence?

As one who voted against the incursion into Afghanistan, I am obviously pleased that the deployment is drawing to a close. As the Secretary of State knows, history shows that periods of draw-down are especially dangerous. There will be an increased risk of people suffering from conditions such as post-traumatic stress disorder and associated problems, as well as the possibility of increased periods in the field leading to fatigue and potential loss of life. I am sure he is aware of that and will do everything in his power to ensure that it does not happen.

[Mr Hammond]

I am grateful to the right hon. Gentleman and can tell him that not only those who voted against the operation but those who fully supported it are pleased that we are now drawing down and bringing our combat commitment to an end. He is absolutely right that the draw-down period is a critical phase of the operation with its own risks. One reason for the decision to change the rotation pattern is the importance of maintaining relationships with key Afghans as we have fewer of those relationships. Historically, we have been mentoring and partnering at battalion and company level, but we will not be doing that any more, so we will have fewer relationships with the Afghans. It is important for our own force protection and situational awareness that we maintain and build those relationships.

[Sir Nick Harvey (North Devon) (LD)]

May I thank the Secretary of State for his statement, the logic of which is straightforward? Having spoken socially to some of those who will deploy this October, I think it was widely anticipated that they would serve longer. Perhaps they were warned off, to use the Secretary of State’s expression.

Getting out of Afghanistan safely and steadily requires a great deal of meticulous planning. Does the Secretary of State agree that those who are prone to saying occasionally in the media that we should pack up and get out now are rather missing the point? In the months it would take to rip up the existing plan and devise another one properly, we would probably have got back on to the timeline for the existing plan.

--- Later in debate ---

[Mr Hammond]

My hon. Friend is of course right. We are packing up and getting out—we are actively in the process of recouping our equipment. Hundreds of containers, hundreds of vehicles and pieces of major equipment have already returned, and it is an ongoing process. To try to do it any more quickly, particularly at a time of significant transition in Afghanistan and through the period of the presidential elections, which can be anticipated to be a difficult period for internal security, would be reckless with Afghanistan’s security but also reckless with the protection of our own forces.

[Jeremy Corbyn (Islington North) (Lab)]

Will the Secretary of State explain why we are planning to keep more troops in Afghanistan after 2014, and say what purpose they will serve while in a place of enormous danger and huge political uncertainty? Would it not be better to say that the whole escapade has not been a great success and that we are bringing everybody out, according to a rapid timetable?

[Mr Hammond]

The hon. Gentleman’s views on this subject are well known. As I have announced, a small number of people—mainly logisticians—will possibly remain after 31 December 2014 to complete our redeployment from Bastion. In addition, we have committed to providing trainers and life support personnel for the Afghan national army officer training academy outside Kabul, which is a military training academy modelled on Sandhurst. Those are the only commitments we have made at the moment, amounting to a couple of hundred personnel on an ongoing basis. We judge that to be an effective and appropriate way for us to continue supporting Afghan national security forces, together with the £70 million a year cash support that we have pledged as part of the international community’s commitment.

[Dr Julian Lewis (New Forest East) (Con)]

Even before British troops have left, our brave Afghan interpreters have been threatened with assassination. How many of them must be killed before we do what we ought to do and offer those who wish to come to this country the opportunity to do so, as the previous Government rightly did for Iraqi interpreters?

[Mr Hammond]

The situation in Afghanistan is not the same as that in Iraq. Lessons were learned from the Afghan campaign, and the way that interpreters and other civilian employees have been recruited in Afghanistan has been modified accordingly to take those lessons on board. I assure my hon. Friend, however, that we will not turn our back on those who have served us in Afghanistan as locally employed civilians. We believe that Afghanistan has a future that will require skilled, capable people who are committed to building it post-2014. We want to explore all options for encouraging people, wherever they can, to be part of that future and help to build their country in which we have invested so heavily. We have and will continue to have mechanisms that deal with cases of intimidation or threat, including those that could, in extremis, allow for resettlement in this country.

[Mrs Madeleine Moon (Bridgend) (Lab)]

Employers of reservists who may be deployed in the next two brigades might feel great anxiety about losing staff from their day jobs for considerable periods of time. What discussions has the Secretary of State had with employers? If employers feel unable to release an employee for that period of time, what impact will that have on the reservist’s employment record in the military?

[Mr Hammond]

The hon. Lady raises a fair point, and through the employers advisory committee we are constantly in touch with the views of employers. As we come to the end of the Herrick campaign, we are likely to use fewer reservists in the last couple of rotations of that campaign, and we will be sensitive to the views of reservists and their employers if they do not wish to serve. It is unlikely that many reservists will be required to serve because of their particular skill sets if they express a clear wish not to do so.

[Amber Rudd (Hastings and Rye) (Con)]

Will my right hon. Friend confirm that these changes are based purely on military advice from service chiefs, and are not about cutting costs?

[Mr Hammond]

Yes, I am happy to do that, and it is not yet clear whether there will be any significant financial savings from the measures announced today. Clearly, we will not have to train a final, much smaller brigade for deployment to Afghanistan. That does not mean that the training will not be conducted;, it means that those troops will be training for contingent operations post-Afghanistan. That will present itself as a dividend to the military in terms of an increased readiness for return to contingent operations.

[Nick Smith (Blaenau Gwent) (Lab)]

Will the Secretary of State tell the House who will be responsible for UK forces force protection post-2014? Will it be the Afghan national army, and does the Secretary of State have total confidence in that?

[Mr Hammond]

So far, as I made clear to the hon. Member for Islington North (Jeremy Corbyn), we have committed only to providing trainers and life support personnel in the Afghan national army officer training academy outside Kabul. We are, of course, dependent on Afghan national security forces for overall security in Afghanistan after 2014, but we will be collocated at Qargha, at the Afghan national army officer academy, with US forces who will be running a similar academy on the adjoining site. Detailed force protection arrangements have not yet been agreed, but they are likely to include elements of UK and US forces, providing protection to the combined facility.

[Dan Byles (North Warwickshire) (Con)]

Having served a nine-month operational tour of duty in Bosnia, I can attest to how long that is to be away from one’s family. Will the Secretary of State confirm that this is a one-off change to the way we do business, and that it will not represent a slippery slope and a longer-term change in doctrine?

[Mr Hammond]

It will not represent a slippery slope and it is not a change in doctrine. I am hesitant to call it a one-off since my hon. Friend has just given an example of another occasion on which nine-month tours were served. There are already people in theatre who are serving tours of nine months or longer in specific posts, so it is not unknown, but there is no intention to make a general change to the operational deployment of six-month tours.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

I endorse tributes already paid across the House to the soldiers from the Royal Regiment of Scotland who were so sadly killed in Afghanistan recently. The Secretary of State spoke about packing up and getting out, but will he indicate the value of the equipment that will have to be left in Afghanistan and gifted to the Afghan forces?

[Mr Hammond]

The policy on gifting to the Afghan forces is NATO-wide and it is important that we adhere to it. Equipment should be gifted only if it is genuinely valuable to the recipients and within their capability and financial capacity to maintain and operate—in other words, it is a “no dumping” policy, and we will not just leave equipment behind because it is not convenient to take it with us. We have not finally decided what, if any, equipment will be gifted to the Afghans, but we will gift it only in accordance with that ISAF policy.

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

May I express a little disappointment that after a decade of involvement in Afghanistan, we never completed the railway line from Kandahar to Spin Boldak, linking to the Pakistani railway and the port of Karachi? It would have been a game changer for the city of Kandahar, and a more efficient and simpler way of getting our kit out. Perhaps it is not too late.

Will the Secretary of State confirm that today’s announcement about lengthening tours will mean that one fewer brigade needs to go to Helmand, which could lead to taxpayers’ money being saved?

[Mr Hammond]

I am sorry about the railway. If my history serves, we never completed the Cape Town to Cairo railway either, but such are plans. I prefer to focus now on High Speed 2—we should look to the future.

My hon. Friend is right. Today’s announcement will mean that it is not necessary to prepare and train a further brigade to deploy. It is not yet clear whether that will make any significant saving for the taxpayer because most of that deployment, had it taken place, would have been in the back of transport aircraft that would have been going out empty in order to come back with repatriated equipment.

[Jim Shannon (Strangford) (DUP)]

I associate my party with tributes to the soldiers who lost their lives in Afghanistan, and I thank the Secretary of State for his statement. He will be aware of the experience and training gained from Operation Banner in Northern Ireland. Will he confirm that the valuable skills developed through that operation will be made available to the Afghan army to the end of 2014, and indeed beyond?

[Mr Hammond]

I can confirm to the hon. Gentleman that we are training Afghan troops in various specialist techniques that will be of value to the Afghan security forces in maintaining security in future. Of course, that draws on all the experiences that British troops have gained over the years, including many valuable experiences in Northern Ireland.

[Jason McCartney (Colne Valley) (Con)]

I congratulate my right hon. Friend on the introduction of the Operation Herrick draw-down allowance. Last year, following a spate of so-called green-on-blue friendly fire attacks that resulted in casualties from, among others, the Yorkshire Regiment—my local regiment—a number of measures were introduced to remove the threat. Will he confirm that, as the draw-down gathers pace, that the threat from green-on-blue attacks will be minimised as much as possible?

[Mr Hammond]

As I have sought to emphasise throughout the statement, maintaining force protection during the draw-down period is our primary consideration; thereafter, it is maintaining effective support to the Afghans. The green-on-blue threat has not gone away. As we draw down into fewer and fewer bases and have less and less contact with the Afghans, the nature of the threat changes. In some ways it is diminished, because we have less contact; in other ways it is increased, because we have less awareness. However, I can assure my hon. Friend that the military commanders are extremely focused on how best to manage the situation to optimise force protection during that period.

[Sir Bob Russell (Colchester) (LD)]

The Secretary of State says that between 2,200 and 3,700 military personnel could deploy for more than six and a half months, and for up to nine months in some cases. In addition to the Herrick draw-down allowance, will personnel have additional home leave entitlement during that extra deployment period?

[Mr Hammond]

It is not intended that an additional R and R period will be incorporated. As with current practice, there will be a single 14-day period of R and R during a tour.

[Sir Gerald Howarth (Aldershot) (Con)]

May I congratulate my right hon. Friend on a sensible move to ensure that the transition is orderly? Does ISAF have any intention of retaining a continuing capability beyond the extra three months of 2015? Will the UK be prepared, beyond the support to the officer training academy, to contribute troops to ensure that the transition period to full ANSF control is achieved?

[Mr Hammond]

I am sure my hon. Friend is aware that a NATO chiefs of defence staff meeting at which that question will be discussed is taking place today in Brussels. No concrete proposal has yet been accepted, and the UK has made no commitments beyond the Afghan national army officer academy. However, we will consider what ISAF and our NATO allies propose to do in future. We will look at the requirements that any NATO plan involves, make a decision on what, if any, participation the UK should have post-2014, and notify the House as soon as any such decision is made.

[Mr Speaker]

I am grateful to the Secretary of State and to colleagues.