Armed Forces Act (Continuation) Order 2017

Lord Levene of Portsoken Excerpts

Tuesday 21st March 2017 Lords Chamber

[Lord Levene of Portsoken (CB)]

My Lords, it is a great pleasure to follow the noble Baroness, Lady Dean, whose wise words on defence are always worth paying attention to. I thank her for her chairmanship of the group to which she referred, from which we all benefit. I also pay compliments to the noble Lord, Lord Touhig, for the efforts that he always makes to promote the importance of defence in Wales. He does a great job on that. I declare my interests as chairman of General Dynamics UK.

At a time when there is so much uncertainty in international relations, both in Europe and the wider world, our thoughts must always turn towards our defence to ensure that the nation is well protected. During this debate, with so many distinguished contributors, we are learning much of how our Armed Forces and others are properly prepared. But for those Armed Forces to be prepared, that preparation can be most effective only when they are supplied with the best equipment embodying the latest technology. The task of procuring this equipment is undertaken by the Defence Equipment and Support division of the Ministry of Defence, which is staffed by serving officers and civilians. For years, that division and its results have been, all too often, the subject of uninformed criticism centred on perceived delays or excessive cost when, very often, a fuller examination of these issues reveals a different picture.

Defence procurement around the world always gives rise to such feelings and countries have different approaches to dealing with it. The noble Lord, Lord West, recently asked a Question in your Lordships’ House relating to defence industrial policy. I was at pains to say that I did not believe that we should revert to an approach of “national champions”, which we had some years ago and which failed. So I shall speak today about the way in which we go about procuring our equipment for the Armed Forces and the DE&S organisation which is responsible for that task. It is a task for which some 30 years ago I had responsibility and, having been asked more recently by successive Defence Secretaries to oversee a process known as defence reform, I think that my perception of this area is relatively up to date.

Defence procurement requires a thorough understanding of the interaction between technology, production and commercial realism. I have argued for a long time that this was not necessarily very different from imperatives in other industries and that that process should be led by an experienced businessman, who understood both the development and the commercial imperatives. In my opinion, and at long last, the Government have managed to recruit an outstanding individual to head the organisation in the person of Tony Douglas, the man who previously ran the Abu Dhabi airport authority. Your Lordships will understand that that was no mean feat. This is a man used to getting complex projects completed on time and on cost: precisely what is needed in the Ministry of Defence post which he now holds.

To give further credit to those making this appointment, it was decided a little earlier to appoint a non-executive chairman to oversee the division. An inspired choice was made in choosing Paul Skinner to do this, a man whose reputation precedes him from his time spent at Shell and Rio Tinto. The top of the organisation is now in place and we should be able to deliver what we need, on time and on cost.

So far, so good, your Lordships may think, but like any other efficient organisation, it requires a clear line of control. In my view, it requires the chief executive to have authority and control over all the parts of his organisation. I have therefore been greatly concerned to look at the way in which the acquisition of the nuclear submarine successor programme is being largely hived off to a separate procurement organisation, over which DE&S will only have much reduced influence. It may be that that decision was driven by the Treasury, whose understanding of procurement in the past, I have to say, has been far from perfect, but it has taken years to find the right person to run DE&S and now the Ministry of Defence seems to be looking for yet another person to run the submarine programme. I believe that is fundamentally wrong. I know what has driven it, but I do not agree with it.

I hope that it is not too late for the Minister to discuss this with his colleagues to see whether a more suitable arrangement can be arrived at. The nuclear submarine programme is a very complex one, involving the design, development and construction of the most modern vessels. I can say from my past experience that this interface is complex but needs, in every way, to be closely connected with the rest of our defence procurement programme. A separation is wrong, and I believe it will not deliver the outcome that we really need.

I hope your Lordships may concur that we have some extremely dedicated people working on both the military and the civilian side in procurement, who rarely attract praise but very frequently are blamed for faults that often do not really exist or have been misinterpreted. As I said, we need the very best equipment to be procured. We need the best people to enable us to achieve this, and those people deserve our absolute support.