Logistics Commodities and Services Transformation Programme

Philip Dunne Excerpts

Tuesday 24th March 2015 Written Statements

[The Parliamentary Under-Secretary of State for Defence (Mr Philip Dunne)]

On 23 February 2015, in a ministerial written statement, I informed the House that Leidos had been selected as the preferred bidder for a transformation programme within Logistic Commodities and Services (LCS), part of Defence Equipment and Support.

Contractual negotiations have now been completed, and I am pleased to announce that the Ministry of Defence will shortly be signing a 13-year contract with Leidos to run the procurement and inventory management of commodity items and the storage and distribution elements of LCS. The transformation programme is expected to deliver financial savings of around £0.5 billion over the life of the contract and involve the TUPE transfer of some 1,250 staff. It will bring defence logistics up to the standard of industry best practice, deliver more efficient and effective processes across the supply chain and enhance the quality of support provided to our armed forces.

LCS staff are based at a number of MOD sites across the United Kingdom, but the bulk of the current LCS storage activity in the UK is located at LCS Bicester in Oxfordshire and LCS Donnington in Shropshire. The majority of procurement and inventory management of commodity items is currently undertaken at Abbey Wood, Bristol. It is of course early days and I cannot be definitive on the impact on jobs; it is a matter for Leidos, ultimately, to determine the number of staff necessary to undertake the work. What I can say is we do not foresee any site closures as a direct result of LCS(T).

Team Leidos is a skilled and experienced team of private sector defence and logistic specialist partners with the global expertise to deliver the transformation required. The programme represents a significant financial investment in new facilities—including the investment of around £90 million in the construction of a new defence fulfilment centre next to the existing LCS site at Donnington in Shropshire—and a further £40 million investment in new IT systems to provide the modern and efficient services that the UK armed forces need.

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Pipeline and Storage System Sale Update

Philip Dunne Excerpts

Friday 20th March 2015 Written Statements

[The Parliamentary Under-Secretary of State for Defence (Mr Philip Dunne)]

I am pleased to announce the successful sale of the Government Pipeline and Storage System (GPSS) to Compania Logistica de Hidrocarburos (CLH) of Spain for £82 million, following a competitive sale process.

This means that I am close to completing the three major elements of the asset management programme that the Ministry of Defence (MOD) launched following the 2010 strategic defence and security review. I have previously announced the successful sale of the Defence Support Group land business to Babcock for £140 million, along with a 10-year contract to buy back services. The contract will save the Army around £500 million over that period—a saving of over a third. Last month I announced that Solent Gateway had been selected as preferred bidder for the concession to manage, and exploit the commercial potential of, the Marchwood Sea Mounting Centre—again generating significant savings to Defence. The sale of the GPSS leads to a further substantial receipt of £82 million. It also allows the Government to transfer their commercial fuel transportation business to the private sector, while still preserving the GPSS’s military capability and ensuring national resilience is not compromised.

As part of the transaction, an enduring contract has been agreed between the Secretary of State for Defence and CLH, which will protect the provision of GPSS—supplied aviation fuel to UK military bases, including those supporting US visiting forces; over the first 10 years of the contract the MOD share will cost some £237 million.

CLH will bring unique experience to the operation of GPSS as it operates and maintains a network of oil pipelines (over 4,000 km) and storage systems serving major airports across Spain. In addition it provides fuel transportation services (including storage and pipeline facilities) to military customers in Spain.

Of the staff employed by the Oil and Pipelines Agency, the Government body which manages the GPSS, just under 80 are in scope of the sale and will become CLH employees on completion of the sale, expected to occur on 30 April 2015. They will transfer under Transfer of Undertakings (Protection of Employment) (TUPE) regulations which will protect their terms and conditions of service. The GPSS sale does not include the six UK oil fuel depots owned by the MOD, which will continue to be operated and maintained by the residual Oil and Pipelines Agency.

In summary, this sale will generate a significant sale receipt while placing the GPSS network on a sustainable long-term footing, ensuring that the capability to supply aviation fuel to UK military bases and civil airports is retained.

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Defence Spending

Philip Dunne Excerpts

Thursday 12th March 2015 Commons Chamber

[The Parliamentary Under-Secretary of State for Defence (Mr Philip Dunne)]

This has been a timely debate, secured by my hon. Friend the Member for Basildon and Billericay (Mr Baron), who, as the House knows, takes a particular interest in defence. I gently point out to the House that although the Backbench Business Committee is responsible for this debate and a number of hon. Members have said it is a shame there are not more debates on defence, there was a debate on Monday of last week on this very subject in Government time. Hon. Members need to recognise that the Government are giving due time to these important matters.

This is a timely debate because it comes as we prepare for the comprehensive spending review and the strategic defence and security review, which will follow the general election. There is no doubt about the support for our armed forces from all 20 Members who have spoken today, including the Opposition spokesman, and about the importance of defence to the nation’s security. Fittingly, this debate was used as an opportunity to speak by a number of hon. Members who are leaving the House later this month having served the House with particular distinction, particularly on defence. I pay tribute to my right hon. and learned Friends the Members for Kensington (Sir Malcolm Rifkind) and for North East Fife (Sir Menzies Campbell), who unfortunately has had to catch a train, although I told him I would mention him; to my predecessor, my hon. Friend the Member for Mid Worcestershire (Sir Peter Luff), who I am delighted to see in his place; to my right hon. Friend the Member for Croydon South (Sir Richard Ottaway), who has given considerable service to this House—I had not appreciated that he had also served on a carrier in an earlier career; and to the hon. Member for Merthyr Tydfil and Rhymney (Mr Havard), who has been a very influential figure on the Defence Committee. I am pleased they have all been able to participate, alongside the many other Members whose contributions I may or may not have time to commend.

Clearly, in a democracy, strong defence requires a strong economy, and as we head into the next Parliament, securing our economic recovery will be vital to securing defence spending. We do recognise—we were challenged by some hon. Members on this—that the threats we face have changed since the last strategic defence review, and they will be carefully reviewed in the next SDSR, which will help to determine the investment choices of the next Government.

I listened carefully to the Opposition spokesman, the hon. Member for North Durham (Mr Jones), a former Defence Minister, whose commitment to defence I do not doubt. I have, however, had the opportunity not only to listen to his remarks today, but to read the interim report—I believe it is described as No. 8—of Labour’s so-called zero-based review, the defence element of which was published only on Saturday. I gently remind the House that he was making some claims about defence being in a better place under a potential Labour Government, but the zero-based review’s foreword indicates that, were Labour to have the opportunity, it would carry out

“a root and branch review of every pound the government spends from the bottom up”.

The defence volume foreword says

“we will make appropriate savings in the Defence budget”.

I take that to mean that every pound of defence spending will be up for review and is not secure as a consequence.

[Mr Kevan Jones]

It is a sensible way forward to ensure, as I said in the debate last week, that every single piece of our defence expenditure is reviewed to ensure that we get maximum value for money. If we are going to meet the targets for 2015-16, savings will have to be made and that will be reinvested in what can actually be done. What we do not have is the fiscal straitjacket that the Minister has come 2016-17.

[Mr Dunne]

The only comfort that this House can take from the Opposition’s position is that one of the very few Government Departments that the shadow Chancellor would not abolish is the Ministry of Defence.

I wish to set out some context about how, since 2010, defence spending has required, and has undergone, significant reform. The situation we inherited from the Labour Administration was chaotic. There was a severely overheated programme with costs that outstripped the available budget, which left a black hole of £38 billion. Difficult decisions were routinely ducked. The Gray report, commissioned by the previous Government, identified that the average equipment programme overrun was five years, and with an average increase in cost of £300 million. The National Audit Office’s major projects report for 2009 evidenced an increase in costs in that year alone of £1.2 billion across the major projects, including the infamous decision to delay the carriers in a desperate attempt to cram that year’s spending into the available budget. To sort that out required one of the biggest defence transformation programmes undertaken in the western world. Today, the defence budget is in balance—

[Mr Kevan Jones]

rose—

[Mr Dunne]

No, the hon. Gentleman has had his chance. The defence budget is in balance and our plans are affordable. We are on track to deliver £5 billion of efficiency savings in the next Parliament, including £1 billion from the equipment support plan alone. Incidentally, the half-baked plans in the Labour review “A New Deal for UK Defence” would deliver only some 1% of what we are already saving in the Department. The proof of our transformation was set out in the National Audit Office major projects report for 2014, which showed a reduction in cost of £397 million across our 11 largest projects. That was the Ministry of Defence’s best performance on cost since 2005 and best performance on delivering projects on time since 2001.

[Mark Hendrick]

Will the Minister tell the House how much money was wasted in the Government’s decision to move two cats and traps for the two aircraft carriers and then to back away from cats and traps?

[Mr Dunne]

Yes, it cost just under £100 million to make that decision, which is substantially less than the £1.2 billion cost of the deferral to which I referred earlier. I should congratulate the hon. Gentleman on his contribution today. I had not appreciated that, like me a few months ago, he faced some impediments to getting in and out of the Chamber. I hope that his leg gets better soon.

Even the chair of the Public Accounts Committee, not known for lavishing praise on this Government, said only last week that she had

“seen a step change and improvement in performance, which is incredibly welcome.”

She was referring to the transformation in defence.

[Sir Nicholas Soames]

I congratulate Conservative Ministers on making such a tremendous improvement to the capital budget. May I urge them to seek big savings in the bureaucracy of the armed forces? There is no bureaucracy in Whitehall that is worse than that in the Army, Navy and Air Force, and those services really need sorting out.

[Mr Dunne]

I thank my right hon. Friend for his advice. It is the case that vast majority of the headcount reductions across the Ministry of Defence have taken place within the bureaucracy—as my right hon. Friend calls it—of civil service support to the armed forces.

The lesson here is that it is no use having a budget of £34 billion if it is not spent efficiently. Driving efficiency savings out of our budget is an important part of what we have achieved, which is to get more capability for our armed forces out of the money that we spend on defence.

In 2010, the defence budget was the second largest in NATO, and the largest in the EU. In 2015, it remains the second largest in NATO and, by some margin, the largest in the EU. Using NATO’s figures, the UK defence budget is now some $8 billion larger than the next largest EU budget, which is that of France. That gives the UK one of the most effective and deployable armed forces in the world. This very day, the UK has more than 4,000 military personnel deployed overseas on 20 key operations, in 24 countries worldwide.

Our funding also enables the UK to be and remain the most reliable partner to the US in NATO. Since August, we have been the US’s largest partner in the coalition air strikes against ISIL, conducting more than 10% of air strikes. A key capability in the effort, for example, has been the result of investment in the Brimstone missile, the most advanced precision missile system in the world. We are now working to integrate Brimstone on to other platforms such as Typhoon. This is just a single capability within our £163 billion costed, funded, affordable equipment plan, which in turn enables the UK to be one of only four NATO countries consistently to meet the key metric, spending 20% of defence expenditure on major new capabilities.

The clarity of this plan allows us to invest in next-generation capability. I shall give a few brief examples. Our new aircraft carriers will deliver a step change in capability. They are half as long and weigh almost three times as much as the previous Invincible class, yet will deliver their cutting-edge capability with the same size crew. They will have the next-generation F35 aircraft flying from them, and we have ordered four aircraft to form part of the operational squadron in addition to the four currently in test and evaluation in the United States. That platform will be far more capable than the Harrier that they replace. As the Prime Minister confirmed again yesterday, the Conservative party is committed to maintaining a continuous at-sea deterrent and will build a new fleet of ballistic missile submarines, with the final investment decision due in 2016, of which I am sure my hon. Friend the Member for New Forest East (Dr Lewis) will approve.

[Ms Gisela Stuart]

Yesterday I suggested to the Prime Minister that he might be just a tad embarrassed by the fact that less than a year ago he lectured other NATO countries about not reaching 2%, yet we were falling below it. He failed to answer that question. Would the Minister like to add anything?

[Mr Dunne]

I will come on to the issue of the 2% in a moment. We are not falling below it and we do not intend to do so in the period of the spending review. We have also presided over the modernisation of our air mobility fleet, which is now the envy of the world. Many of our NATO allies rely on our capability during operations. The Voyager air-to-air refuelling capability is being used today across Iraq by a number of our allies, not only the RAF. We are transforming our helicopter fleets. As I saw earlier this morning, we have invested £6 billion over the past four years in state-of-the-art lift, attack and surveillance capability, on time, on budget, providing flexibility so that more can be done with less.

For the Army, last year we placed the Scout vehicle contract—the biggest single order for a UK armoured vehicle in 30 years. It will provide the Army with its first fully digitised armoured fighting vehicle to give it the kind of manoeuvrability that the Chairman of the Select Committee and other hon. Members have called for. I can also confirm to my hon. Friend the Member for Mid Worcestershire (Sir Peter Luff), who did such a good job in laying the foundations for this transformation work, that we remain committed to spending at least 1.2% of the defence budget on defence science and technology. We achieved more than that last year and will do so this year. This will include more investment in disruptive areas of technology such as directed energy weapons and others, where we have committed to shift more of the balance of science and technology investment as we move into a contingent posture.

The Government’s position on the motion before the House this afternoon is clear. We will meet the 2% commitment in this financial year. We will meet it in the next. As we have been consistent, after the general election this will be a matter for the next spending review. The Prime Minister has been clear. We are committed to a 1% year-on-year real-terms increase in spending on defence equipment for the next spending review period. He has also been clear that the size of our regular armed services will remain at the level it is now, with a continuing commitment to grow the reserves to 35,000. It is not just about 2% of GDP; it is about how you spend it and what you are prepared to do with it.

The results of our reform programme speak for themselves. Four and a half years ago, we were in chaos. Today, we have earned a strong reputation across Whitehall for competence and have transformed defence capability for the better. The Treasury, even, has granted the Ministry of Defence the largest delegated budget of any Department. So we have replaced Labour’s chaos with Conservative competence. Where there was a deficit, now there is a balanced budget; where there were cost overruns, now there are cost savings; and where equipment programmes were late and over-budget, now they are overwhelmingly on time. The MOD is on far firmer foundations as we head into the next SDSR and spending review.

Single Source Profit Rate

Philip Dunne Excerpts

Wednesday 11th March 2015 Written Statements

[The Parliamentary Under-Secretary of State for Defence (Mr Philip Dunne)]

I am today announcing that the Secretary of State for Defence has accepted the revised profit formula allowances recommended by the Single Source Regulations Office (SSRO). The new profit rates for 2015, which are lower than those currently in force, will be published in the London Gazette, as required by the Defence Reform Act 2014 and will come into effect from 1 April 2015 onwards. The table below shows the change to the profit rate.

Marchwood Sea Mounting Centre (Preferred Bidder)

Philip Dunne Excerpts

Tuesday 3rd March 2015 Written Statements

[The Parliamentary Under-Secretary of State for Defence (Mr Philip Dunne)]

The House will be aware that in May 2014 I launched the process to grant a concession to manage, and exploit the commercial potential of, the Marchwood Sea Mounting Centre. Following a strong competition, I am pleased to announce that Solent Gateway Ltd has been selected as the preferred bidder. This will be a joint venture between David MacBrayne Ltd and GBA (Holdings) Ltd.

The concession is expected to generate significant value for Defence, in terms of both a share in the profits from commercial exploitation of the spare capacity at the port and a reduction in the cost of sea mounting. The commercial arrangement secures the delivery of Ministry of Defence’s routine and, importantly, surge requirements. The new port operator will also be providing a deployable reserve capability as part of the Army’s total support force.

We expect to conclude the transaction and sign a contract with the new operator over the coming month. The concession will commence in the autumn. At that time, around 40 civil service employees, subject to TUPE consultation, will transfer to employment under the winning bidder. As is normal, their existing employment rights will be preserved.

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Logistics Commodities and Services Transformation Programme

Philip Dunne Excerpts

Monday 23rd February 2015 Written Statements

[The Parliamentary Under-Secretary of State for Defence (Mr Philip Dunne)]

In July 2012, my predecessor, the hon. Member for Mid Worcestershire (Sir Peter Luff), informed the House about a transformation programme within Logistic Commodities and Services (LCS), part of Defence Equipment and Support.

The primary role for LCS is to provide support to military operations by undertaking procurement and inventory management of commodity items (including food, clothing, packed fuel, general supplies and medical supplies), and the storage and distribution of these commodity items, together with other non-explosive stock across Defence.

LCS(T) will provide significant operational effectiveness by delivering improved responsiveness and agility. It will also improve efficiency in storage infrastructure; commodity procurement and logistic processes and rationalise inventory management and stock control for commodity products. It is also expected to deliver financial savings of around £0.5 billion over the next 13 years ensuring that we continue to meet the needs of the Armed Forces of the future.

The programme has now completed a very comprehensive and detailed assessment phase and following a strong and rigorous competition I was pleased to announce last week that Leidos has been selected as the preferred bidder. While I would ordinarily have made such an announcement to the House first, in order to avoid delaying the commercial process it was necessary to do so during recess. I will make a further statement to the House with final details of the transaction next month once contract negotiations have concluded.

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Oral Answers to Questions

Philip Dunne Excerpts

Monday 23rd February 2015 Commons Chamber

[The Parliamentary Under-Secretary of State for Defence (Mr Philip Dunne)]

For the third consecutive year, the defence equipment plan demonstrates a realistic and affordable plan to invest £163 billion on new equipment and support for our armed forces over the next 10 years. The delivery of this plan has been independently assessed by the National Audit Office, through the major projects report. The best way to illustrate progress is to compare the report for 2009, when in-year cost overran by £4.5 billion, with cost underspends in 2014 of almost £400 million. My hon. Friend may recall who was responsible for the chaos of defence acquisition in 2009 and who is responsible for the competence we have brought to that department since.

[Oliver Colvile]

I thank my hon. Friend for that answer and for the announcement made on Friday about the Type 26s. What is the timetable for the building of the Type 26 frigates? When will there be an announcement about the base porting, which we hope will be in Plymouth?

[Mr Dunne]

My hon. Friend is a vigorous champion of the merits of Devonport, in his constituency, as home to seven of the Royal Navy’s Type 23 frigates. The Prime Minister did indeed announce on Friday, as confirmed in a statement to the House this morning, that a demonstration phase contract worth £859 million to invest in detailed design work, shore-based test facilities and long-lead items for the first three Type 26 global combat ships will sustain 1,700 jobs. The current planning assumption is that 13 Type 26 vessels will replace the current frigates on a one-for-one basis, aligned to the current split in base port allocation, with the first coming into service in 2022.

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

It would be churlish of me not to welcome the recent contract that has been awarded that will benefit David Brown’s, a great employer in my constituency. Does the Minister agree that this Government’s failure to invest in men and equipment means that we are a laughing stock around the world? Our defence capacity is derided by the President of the United States, and President Putin knows very well that we are too weak to be a powerful defence force in Europe?

[Mr Dunne]

I do not recognise the hon. Gentleman’s characterisation of the defence equipment plan or, indeed, the capability of our defence industry to support it. This country remains the second largest defence exporter in the world. If our capability was so derided, as he says, how come we sold defence equipment worth nearly £10 billion last year?

[Christopher Pincher (Tamworth) (Con)]

Last October, the Government announced the largest Army order in 30 years for the latest set of armoured vehicles. Will the Minister outline the potential for greater procurement from UK firms, which would benefit firms in the midlands, including Elite KL in Tamworth?

[Mr Dunne]

I am proud to confirm that the Scout contract was the largest vehicle contract for the British Army since the Falklands war, and more contracts have now been let through the supply chain for that vehicle. The number of UK jobs secured through the programme is expected to be some 2,400 across more than 160 suppliers. Two-thirds of the suppliers are UK-based, including several in the midlands, and from all parts of the country.

[Angus Robertson (Moray) (SNP)]

Three of my constituents from RAF Lossiemouth were killed and a fourth was seriously injured when two Tornadoes collided above the Moray firth. That occurred nearly 20 years after the Ministry of Defence recommended the installation of collision warning systems. Is it really true that only eight out of 100 Tornado aircraft have had such a system installed, that they are not fully operational and that there are no concrete plans for such a system to be installed in the Typhoon fleet?

[Mr Dunne]

The hon. Gentleman has raised that subject many times in this House. He knows full well from the answers that I have given him to parliamentary questions that, when our Tornado fleet has a traffic collision avoidance system installed, it will be the first combat jet fleet anywhere in the world to have such a system. Civil airline fleets have been provided with such systems with success, but introducing such a system into a combat jet environment is exceptionally complicated. I can confirm that currently eight aircraft have been fitted with a system. We are working to iron out some of the residual issues with that system as we install it across the Tornado fleet.

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

May I echo the warm welcome for the signing on Friday of the demonstration contract on Type 26? But are the original assumptions from the 2010 strategic defence and security review still valid, or has anything significant changed?

[Mr Dunne]

As my hon. Friend is well aware, we are anticipating that a strategic defence and security review will take place following the general election later this summer, so all the planning assumptions that were introduced in the 2010 review will be reconsidered in 2015. As I mentioned earlier, as far as the frigate contract is concerned, the current planning assumption is for a like-for-like replacement of the Type 23 class.

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

That was a very interesting comment from the Minister given that the Prime Minister recently announced that both carriers would be operational. Clearly, it also has implications for the equipment programme. Is the Minister saying that he intends to build 13 frigates for carrier support?

[Mr Dunne]

I just explained in my answer to the previous question what the planning assumption is for replacing frigates. I can reconfirm to the hon. Lady that within the equipment plan is the capital cost of constructing both aircraft carriers, and they are coming in on time and on budget, in stark contrast to what happened under the previous Government.

[Mike Freer (Finchley and Golders Green) (Con)]

5. What steps he is taking to promote diversity in the armed forces.

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[Robert Jenrick (Newark) (Con)]

T5. The RAF has been using precision munitions effectively in Iraq, which, as far as is possible, are good at minimising collateral damage. Further to the earlier comments by the Secretary of State, will the Minister reassure the House that that important capability will not be lost when the Tornado combat jet is retired in 2019?

[The Parliamentary Under-Secretary of State for Defence (Mr Philip Dunne)]

Further to my right hon. Friend the Secretary of State’s answer to an earlier question, I can confirm that—as it happens, yesterday—I witnessed a contract signature for the investment of a further £165 million to integrate Brimstone precision munitions on to Royal Air Force Typhoons, which will enable this unique air-to-ground strike capability to enter service on our Typhoon fleet in 2018, before the Tornadoes come out of service in 2019.

[Douglas Carswell (Clacton) (UKIP)]

T8. What assurance can the Minister give that the costs of the new Type 26 global combat ship will not rise ever upwards? How much clout does his Department have in avoiding some of the mistakes of the past?

[Mr Dunne]

I am grateful to the hon. Gentleman for asking that question, because he invites me to draw another comparison with the way in which this Government have sorted out the manner of our defence procurement, in stark contrast to the previous Administration. We are undertaking detailed analysis and taking contract negotiations to a much greater degree of granularity before entering contracts so that we know what we are buying and we remove risk from layers of prime contractors, following the model that we introduced in the aircraft carrier renegotiation last year.

[Richard Benyon (Newbury) (Con)]

T6. As civil nuclear developments expand the market for skilled nuclear engineers, what steps is the Minister taking to ensure that we maintain the skills levels of the hundreds of nuclear engineers at the Atomic Weapons Establishment in Berkshire?

[Mr Dunne]

The facility in Berkshire is extremely important—part of it is in my hon. Friend’s constituency—and I have led cross-Government talks to consider how we ensure that demands for nuclear engineering skills across defence and civil sectors are successfully managed by recruiting, training and retaining appropriately skilled engineers. Next week, I will host an event in Downing street to raise awareness of degree courses in nuclear engineering.

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

Ministry of Defence police officers and their colleagues in the defence fire and rescue service are currently subject to the state pension age; yet their counterparts in the Home Office and the Department for Communities and Local Government can retire up to seven years earlier. Does the Minister think that is fair?

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[Mr Charles Kennedy (Ross, Skye and Lochaber) (LD)]

Given the very welcome commitments that the Prime Minister made in Scotland just last week about ongoing defence expenditure, bases and so on, will the Government confirm that those commitments extend to the all-important and long-standing BUTEC—British underwater test and evaluation centre—submarine range in and around Kyle of Lochalsh and that it has a viable future, given that defence will loom so large at the general election?

[Mr Dunne]

I confirm that the UK Government have no plans to close the British underwater test and evaluation centre on the Applecross peninsula and at Kyle of Lochalsh. In fact, QinetiQ, supported by the Ministry of Defence, has plans to invest £22 million in its research and testing facilities up there, which, of course, would not have happened had Scotland been independent.

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

Can the Secretary of State say more about the circumstances in which the deserted soldier in Syria was found? What steps can he take to prevent a recurrence of that situation? Does he understand the frustration that must be felt by many in our armed forces who want to do more to fight ISIL, but who see the Government not doing enough?

Trident Renewal

Philip Dunne Excerpts

Tuesday 20th January 2015 Commons Chamber

[Sir Nick Harvey]

The right hon. Lady makes a good point. If a threat emerges from nowhere, it will be either at the hands of terrorists or a by rogue state sponsored by terrorists, against which a conventional state-on-state nuclear deterrent of the sort that we have would have absolutely no value or purpose. It is important to remember that we have moral and legal obligations to try to bring about global nuclear disarmament, and with one notable exception I hope that all Members of the House believe that that is a desirable objective.

In 1968 the non-proliferation treaty was in effect a pact between the nuclear states that were going to use their best endeavours to negotiate away their weapons and the rest of the world that agreed not to develop nuclear programmes. In terms of non-proliferation the treaty has been moderately successful, but it has made astonishingly little progress on disarmament. Very few signatories to that treaty can have imagined that by 2015 so little progress would have been made. Things are stirring and changing, and the British Government need to wake up to that. More than 150 nation states have attended international conferences and considered in detail and depth the humanitarian consequences of using nuclear weapons.

[The Parliamentary Under-Secretary of State for Defence (Mr Philip Dunne)]

The hon. Gentleman is being very generous with his time, but his remarks are taking Liberal Democrat policy into a new out-of-body, out-of-mind, out-of-space dimension. Some points are unclear from his remarks, and I would be grateful if he would be clear about them before he concludes his speech. I think he said that his party’s policy now is to have all the components and capability delivery of a nuclear system but with none of them joined up, and therefore with none capable of being trained and exercised in a way that—as he will know from his time as Minister for the armed forces—takes months if not years to deliver. There would therefore be no deterrent capability at all: not a part-time deterrent, but no deterrent. How will he vote tonight?

[Sir Nick Harvey]

I invite the Minister to look at how the NATO air-based nuclear capability in eastern Europe operates, because what I am describing is a precise replica of what goes on there. That capability is not on constant patrol or constantly armed; it exists in its component parts, and there is a well-rehearsed exercise for mobilising it and putting it together. Does that have a deterrent impact? I believe it does. If anybody intends to strike faster than that capability can be put together again perhaps it would not, but who is going to do that?

This brings us to the humanitarian consequences of nuclear weapons, which I think are singularly under-perceived in this country and many others, although that is changing fast. The participation of many Governments at conferences—the first in Oslo, the second in Mexico, and the most recent in Vienna—is bringing a far greater degree of awareness around the globe of the impact of using nuclear weapons. I do not believe that the public who have come of age since 1983—the last time we had a meaningful national debate about our nuclear deterrent—understand what the consequences of unleashing the payload of one of our Vanguard submarines, armed with Trident missiles, would constitute.

If one of our submarines were to unleash its payload against, for instance, Moscow—those were the traditional criteria on which we based our capability—I think that some people in this country, possibly even in the House, labour under the misapprehension that the consequences would be pretty grim for people in Moscow and perhaps not very clever for those a few hundred miles around. In reality, if we were to unleash the payload of one of our submarines, the consequences would be global and felt for at least a decade, and at least a billion people would be at risk of dying. The more widely that is understood, the more inconceivable it is that any sane person could ever push the button, and the more widely that is understood, the less deterrent effect the possession of this great paraphernalia comes to have.

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[Vernon Coaker]

I very much agree on the need for us to recognise our international obligations.

On the subject of NATO, I would like to return to a point that others have made. Is it not time for the Scottish Nationalists to be frank and open with us all? NATO is a nuclear alliance. The Scottish National party wants to be a part of that nuclear alliance. It has to recognise—I say this with respect—that membership of NATO comes with membership of the nuclear umbrella group and the nuclear planning group. Every single nation that the SNP points to as not having nuclear weapons is a member of that nuclear planning group, and is therefore involved in nuclear possession. The SNP position appears to be: no to nuclear weapons unless they belong to NATO. I understand that the motion has been moved not only by the Scottish National party, which is in favour of being in NATO, but by Plaid Cymru and the Green party, which are against being in NATO. Clearly, the smaller parties need to talk to each other.

Labour is clear. Let me say this unequivocally: our position, in an increasingly uncertain and unstable world, is that it is right for the UK to maintain a credible, minimum independent nuclear deterrent based on a continuous at-sea posture. It is right to want to deliver that deterrent in the most capable and cost-effective way, and in a way that best contributes to global security. It is right, therefore, to want to examine all the UK’s military capabilities, including nuclear, as part of the next strategic defence and security review, and to state that we would require a clear body of evidence for us to change our view that continuous at-sea deterrence provides the most credible and cost-efficient form of deterrent. That is why, as the hon. Member for New Forest East mentioned, in 2007 Parliament voted to maintain the deterrent and to authorise spending on the concept phase and initial gate. It is why MPs will be asked again to vote on constructing a new class of Vanguard submarines in 2016. As the Defence Secretary said, no single successor submarine will be built until approval is guaranteed by this sovereign Parliament. We should not forget that this is a programme that would create thousands of high-quality jobs and apprenticeships in Scottish docks, Barrow construction yards and throughout a multibillion pound supply chain that will benefit about 850 companies, the overwhelming majority of which are based right here in the UK.

[Mr Dunne]

The shadow Defence Secretary has just laid out very clearly to the House the current Front Bench position of Her Majesty’s Opposition. Will he add to that clarity by confirming that he believes at present the most cost-effective way to deliver continuous at-sea deterrence is with a four-boat solution?

[Vernon Coaker]

As I have said, the evidence before us is that the continuous at-sea deterrent requires the current posture. What we have said is that, as part of the strategic defence and security review, we will consider whether a continuous at-sea deterrent can be delivered in a more cost-effective way. That is exactly what the Defence Secretary said in his remarks earlier today. I suggest to the Minister that the important principle here is that there is continuous at-sea deterrence. It is incumbent on all of us to do that in the most cost-effective way.

Of course, a decision on the UK’s future nuclear capabilities must primarily be based on strategic requirements and an assessment of the global proliferation and disarmament agenda. However, does that mean we can afford to ignore the thousands of livelihoods that depend on our building a new class of Vanguard submarine? Neither should we be drawn into a debate between funding vital public services and maintaining the deterrent. A future Labour Government would commit to delivering public services that the British people can be proud of and to maintaining the security of the country.

As well as issues of capability, costs and jobs, it is right to ask serious questions about how the UK can best contribute to multilateral nuclear disarmament efforts, and for that, Britain needs to show leadership on the global stage. It does not need a part-time deterrent of the like proposed by the Liberal Democrats—or whatever the hon. Member for North Devon (Sir Nick Harvey) was talking about. Theirs is a policy that would only add to instability and insecurity and which their own “Trident Alternatives Review” did not even consider worthy of consideration.

Is it not more telling that the review by the British American Security Information Council into Trident—a cross-party, independent assessment of the UK’s nuclear capabilities that, unlike the “Trident Alternatives Review”, did consider unilateral disarmament as an option—recommended that the UK continue its current Trident system while seeking to further enhance our multilateral disarmament record. For the avoidance of doubt, it is worth quoting a section of the report. On page 6 of the 2014 final document, it says:

“Based upon the two key specific considerations, namely national security concerns and responsibility towards the”

NATO

“Alliance, the Commission has come to the unanimous conclusion that the UK should retain and deploy a nuclear arsenal, with a number of caveats expressed below. Most notably, it remains crucial that the UK show keen regard for its position within the international community and for the shared responsibility to achieve progress in global nuclear disarmament.”

We could not agree more. The UK should maintain the minimum, credible, independent nuclear deterrent through a continuous-at-sea system, delivered in the most cost effective way, while advancing along the path to multilateral disarmament. We have the opportunity to advance the cause of global disarmament for a safer world. Britain can play a leading role in this while ensuring the security of the British people. Let us grasp this opportunity.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Defence (Mr Philip Dunne)]

Today’s debate has shown one thing above all, which is that the House takes a strong interest in nuclear deterrence.

I should like to begin by congratulating the minor parties on securing the debate, and all those who have made a contribution. I may not be able to refer to everyone individually in the time available. We are fortunate to be able to rely on the crews of our submarines and their families, and the men and women, both military and civilian, who support the nuclear enterprise. Their support is essential to maintaining our nation’s credible and effective minimum nuclear deterrent based on Trident, operating on a continuously at-sea posture, and we thank them for their unwavering dedication.

[Ms Gisela Stuart]

rose—

[Mr Dunne]

I am afraid that I cannot take interventions.

I remind the House that it is the first duty of any Government to ensure the security of the nation, its people and their vital interests. This Government do not, and will not, gamble with the United Kingdom’s security. We recognise that people wish to be reassured that money spent on replacing the current Vanguard-class submarines will be money well spent. That has been reflected by several hon. Members in the debate. As my hon. Friend the Member for Penrith and The Border (Rory Stewart), who chairs the Select Committee on Defence, eloquently pointed out, this is not just about money. It is a big decision, but costs are important too. The Government agree that the strategic deterrent should be subject to the same discipline in bearing down on securing value for money for taxpayers that we are applying across defence procurement.

We will continue to scrutinise and improve the procurement programme for Successor, but we should not forget that capability is a long-term issue. We are talking about maintaining a strategic deterrent in service until 2060, and it is essential that we can protect the UK against future uncertainties during that period. The world has always been an uncertain place, and the task of defending the nation has always been supremely challenging, and never more so than in the nuclear age. Some hon. Members have questioned the threats and the nature of deterrence—Members have very different views on the subject. As the Secretary of State said, we are now in the second nuclear age, with existing nuclear powers commissioning new capabilities. The problems of proliferation have become sharper, and the emergence of new nuclear states is a reality. The need for the nuclear deterrent is no less than it has ever been. Only today there have been reports in the US raising doubts about continuing co-operation by Russia and its working with the United States to protect stockpiles of weapons and materials.

We have heard impassioned speeches by Members on both sides of the debate. I commend the consistency that most speakers have shown on this vital topic. I was reminded by some speakers, notably the right hon. Member for Lewisham, Deptford (Dame Joan Ruddock), and the hon. Members for Islington North (Jeremy Corbyn) and for Brighton, Pavilion (Caroline Lucas), of speeches from the 1980s. My hon. Friends the Members for Harwich and North Essex (Mr Jenkin) and for New Forest East (Dr Lewis) argued with equal passion and considerable expertise. My hon. Friend the Member for Reigate (Crispin Blunt) has clearly travelled in one direction in this debate, while at the same time the hon. Members for Bridgend (Mrs Moon) and for Sedgefield (Phil Wilson) have travelled in the opposite direction.

The hon. Member for Moray (Angus Robertson), as usual, is trying to have it both ways. During the campaign last year on the referendum, which settled the issue of independence for Scotland, he argued that Scotland’s defence would rest on the presumption of NATO membership. To be accepted as a member of NATO requires a nation to accept protection under an umbrella of nuclear compatibility, yet the motion seeks to do precisely the opposite in respect of our own nuclear deterrent. As the hon. Member for Gedling (Vernon Coaker) pointed out, all NATO allies except France, a nuclear-weapons state, participate in NATO’s nuclear planning group, so an independent Scotland would either have to participate in NATO’s nuclear planning process, which would be odd for a Government with a declared opposition to nuclear weapons, or it would have to persuade the 28 allies that it should hold a unique anti-nuclear position in a nuclear alliance—not a credible position.

As my hon. Friend the Member for Harwich and North Essex pointed out, the hon. Member for Perth and North Perthshire (Pete Wishart) showed that he did not understand his own party’s motion. We should be clear about this. We are making the maingate decision next year on replacing four Vanguard-class submarines with four Successor submarines—that is, no increase in proliferation or stockpiling of weapons. In fact, as my right hon. Friend the Secretary of State made clear, and as set out in today’s written statement, this Government have already reduced the number of warheads deployed on each boat from 48 to 40 and the number of operationally available warheads from 160 to 120.

The hon. Member for Moray and several others made much of the cost of the overall programme, particularly the sums being spent or committed ahead of the maingate investment decision. It might help the House if I clarify the actual rather than the fantasy costs of the programme. Several hon. Members have referred to £100 billion as the cost of replacing Trident. We simply do not recognise this figure. The Government White Paper presented to Parliament in 2006 estimated a cost of £15 billion to £20 billion, at 2006 prices, for the Successor submarine infrastructure and refurbishment of warheads. We remain within these initial estimates, which in 2011 were updated for the capital costs of Successor submarines to £25 billion at outturn prices.

Some hon. Members acknowledged the economic impact of this programme. In addition to the important design and manufacturing facilities for the submarines at Barrow, which the hon. Member for Barrow and Furness (John Woodcock) mentioned, for the propulsion in Derby, and for the warheads in Berkshire, there are of course those involved in the submarine operating base at Faslane—the largest employer in Scotland. We have identified over 850 businesses in the supply chain across the UK that will potentially be involved in the Successor programme. This is one of the largest capital projects in the UK.

The shadow Defence Secretary, the hon. Member for Gedling, revealed two things. First, we heard the renewed commitment to a minimum credible independent nuclear deterrent delivered through CASD—continuous-at-sea deterrence—in the most cost-effective way. I, and other Government Members, welcome that. It will be interesting to see how many of his colleagues join him and me in the Lobby to reject the motion. I hope that he has the support of his party. I noticed that he claimed the support of the leader of the Scottish Labour party, but not of his own leader.

Secondly, and revealingly, the hon. Gentleman declined to confirm, in answer to my specific question, that the Labour party is committed to a four-boat solution. Perhaps this explains the nuances between the hon. Gentleman, who spoke before Christmas of a minimum credible deterrent, and the Leader of the Opposition, who, when challenged, talked of a least-cost CASD.

[Vernon Coaker]

We should not be playing party politics with an issue like this, but if we are, does the hon. Gentleman agree with the right hon. Member for North Somerset (Dr Fox), who said,

“At the moment the assessment is we need four…So at the moment the technology says four. That’s something that can always be kept under review”?

--- Later in debate ---

[Mr Dunne]

Every study that we have looked at so far has said four, so that is where we stand, and I hope that the hon. Gentleman does too.

Finally, I turn to the position advocated by my hon. Friend the Member for North Devon (Sir Nick Harvey), whom we found dancing on the head of a pin in talking about a bizarre new Lib Dem policy aspiration. Far from a minimum nuclear deterrent capability delivered with a two-boat option for dual use, he has developed a new policy on the hoof—not a part-time deterrent but a kit-part deterrent. Apart from the fact that neither of those options was even considered by the alternatives review, this has demonstrated that the Liberal Democrat party is—

[Pete Wishart]

claimed to move the closure (Standing Order No. 36).

Question put forthwith, That the Question be now put.

Question agreed to.

Main Question accordingly put.

The House proceeded to a Division.

Equipment Plan and Major Projects Report

Philip Dunne Excerpts

Tuesday 13th January 2015 Written Statements

[The Parliamentary Under-Secretary of State for Defence (Mr Philip Dunne)]

I am today placing in the Library of the House the third annual summary of the Defence equipment plan. The equipment plan represents the position at the end of March 2014 and sets out our plans to spend around £163 billion on new equipment and equipment support over the next 10 years. For the third successive year, this plan is realistic and affordable over the whole of the decade. It includes a central contingency provision of £4.6 billion over and above the provisions for risk within individual project budgets, and around £8 billion of additional headroom in the later years of the decade. Together these provide flexibility to address any cost growth within the core equipment plan while allowing us to fund, incrementally and flexibly, a number of additional programmes that are a high priority for Defence, as soon as we can be sure that they are affordable.

Today, the National Audit Office (NAO) will publish its third assessment of the affordability of the Ministry of Defence (MOD) equipment plan, which this year has been merged into one document with the MOD’s Major Projects Report for the first time. The report recognises the progress we are continuing to make, including the relative stability of forecast project costs, as well as highlighting areas where we must continue to improve and refine our processes.

Of the 11 projects within the MPR sample of 17 projects that have passed the main investment decision point, we have delivered 99% of requirements, the forecast cost of the projects has reduced by £397 million and the in-service dates have had a small increase of 14 months. This is the MOD’s best cost performance since 2005 and the best time performance since at least 2001, with delivery of military requirements routinely good over the period.

[HCWS184]

Oral Answers to Questions

Philip Dunne Excerpts

Monday 12th January 2015 Commons Chamber

[Mr Adam Holloway (Gravesham) (Con)]

6. What progress his Department has made on delivering the defence equipment plan.

[The Parliamentary Under-Secretary of State for Defence (Mr Philip Dunne)]

Under this Government, the Ministry of Defence was one of the first Departments to publish a long-term plan: our 10-year equipment plan. The third annual iteration of the equipment plan will be published shortly. I expect it to show that, in the vital area of defence equipment, we have a plan and that we are delivering against it in each domain. New investment committed last year includes: three offshore patrol vessels, four new F-35s, and 589 new Scout armoured vehicles under the largest land equipment contract the British Army has seen for 30 years.

[Mr Holloway]

What changes have been made to the way the plan is being delivered?

[Mr Dunne]

As my hon. Friend will recall, the previous Labour Administration had no plan and compounded one procurement incompetence with another. Consequently, the wrong equipment was often delivered, years late and billions over budget. By contrast, since balancing the defence budget and establishing an equipment plan, where there was chaos now there is competence; where there were cost overruns now there are cost savings; and where equipment deliveries were years late now they are on time, or, in far fewer cases, a few months behind.

[Angus Robertson (Moray) (SNP)]

In recent weeks, maritime patrol aircraft have been seen in the skies above Moray, operating from RAF Lossiemouth and plugging a capability cap, because the RAF has precisely no maritime patrol aircraft. All of our neighbours have them: the Irish air corps, the Royal Danish air force and the Royal Norwegian air force. In the plan the Minister has just mentioned, when can we expect to have maritime patrol aircraft?

[Mr Dunne]

As the hon. Gentleman knows full well, there was a recognised capability gap when maritime aircraft were taken out of service in SDSR 2010. The Government, as with previous Governments, operate in conjunction with our allies around the world. We provide aircraft to Baltic patrol and transport lift aircraft to the French. On occasion, our allies provide us with maritime patrol aircraft.

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

I was glad to hear the Minister’s answer to the question regarding Russian submarines infiltrating our waters.

Why, after the major equipment programme has been let, are his Department and UK Trade & Investment still scurrying around trying to hold the manufacturer to a pre-contract offer of safeguarding or creating 10,000 jobs in the UK? We now know that the Scout programme he mentioned will be built in Spain, Germany and the Netherlands, and that the core jobs in the UK are fewer than 400. That has happened on his watch. Why was the economic case for bringing the work to the UK not done before the contract was finalised? The Secretary of State spent all that time trumpeting what seemed to be a huge success when, in fact, it is not.

[Mr Dunne]

As the hon. Lady may recall, the original proposed contract, which was considered under her Administration, was for more than double the number of vehicles for which we have contracted. Consequently, the number of people potentially employed is significantly lower. However, the contract for the Scout vehicle, at £3.5 billion, is the largest contract that the British Army has received, and involves some 160 companies, predominantly in the UK. It will sustain 1,400 jobs in the UK, and we are currently actively exploring the opportunity for the onshore assembly of vehicles, from 101 to 589.

[Douglas Carswell (Clacton) (UKIP)]

7. What his policy is on the creation of a national defence medal.

--- Later in debate ---

[Sir Oliver Heald (North East Hertfordshire) (Con)]

13. What recent investment he has made in (a) cyber-security and (b) unmanned aerial vehicles for the armed forces.

[The Parliamentary Under-Secretary of State for Defence (Mr Philip Dunne)]

In addition to the sums identified by my right hon. Friend the Armed Forces Minister, in July of last year the Prime Minister announced a further investment in equipment for our armed forces, which included £75 million specifically for cyber-defence. The total recent investment in unmanned aerial vehicles for the armed forces in the current year is £233.5 million.

[Sir Oliver Heald]

On unmanned aerial vehicles, will my hon. Friend provide more information about the Watchkeeper tactical remotely piloted air system and when it will be available to our British Army units?

[Mr Dunne]

I am pleased to be able to tell my hon. and learned Friend that the Watchkeeper achieved its first initial operating capability last summer and was deployed with the Royal Artillery to Afghanistan between August and October last year. It immediately demonstrated its excellent, and potentially game-changing, tactical capability over Helmand. We expect Watchkeeper to be at full operating capability in April 2016.

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

As well as investing in unmanned aerial vehicles, is the Department responding to reports that al-Qaeda in the Arabian Peninsula is developing counter-measures designed to diminish the effectiveness of these drones in current operations?

[Mr Dunne]

We are always alert to intelligence reports of evolving threats, from wherever they emerge. We take a very keen interest in the development of unmanned systems across the armed forces and will continue to do so.

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

T1. If he will make a statement on his departmental responsibilities.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Defence (Mr Philip Dunne)]

This is the first opportunity I have had to put on record at the Dispatch Box how pleased the UK is with the decision by the United States air force to base its first two F-35 squadrons at RAF Lakenheath, which is adjacent to Mildenhall. We think that a number of jobs will transfer from Mildenhall to Lakenheath. The base closure at Mildenhall is regrettable, but it will not happen for a number of years. We in the Ministry of Defence will engage with the working group being led by my right hon. Friend the Minister for Business and Enterprise, and we will be looking to see whether there is a future military use for the facility; if not, we will work to find an alternative.

[Angela Smith (Penistone and Stocksbridge) (Lab)]

T9. According to recent reports in The Times, Ministers are presiding over not only a stalling reserves recruitment programme but a crisis in recruitment to the regular forces. Can any of the Ministers reassure the House that the targets for recruitment to the regular Army forces will be met this year?

--- Later in debate ---

[Mark Menzies (Fylde) (Con)]

T7. May I put on record my thanks to the Minister for the Armed Forces for his visit to BAE systems in Warton and Salmesbury aerodromes, which are key employers in Lancashire? Will he update the House on defence export prospects for the Hawk trainer aircraft, as its production line has recently opened in my Fylde constituency?

[Mr Dunne]

As my hon. Friend knows, BAE systems is pursuing a number of significant export prospects for the Hawk, with active support from the Ministry of Defence and UK Trade and Investment Defence and Security Organisation. As international air forces modernise their front-line aircraft, we anticipate that there will be significant further interest in the next generation of Hawk aircraft, the Hawk T2, which is already in service to train our Typhoon pilots and will do so for the F-35 pilots in due course.

[Jeremy Corbyn (Islington North) (Lab)]

Next month, the Government will be hosting a meeting of the five declared nuclear weapons states ahead of the non-proliferation treaty review in May. Will the Minister tell the House what he intends to achieve from that meeting, whether there will be an agreed position put and whether the P5 will adhere to the basic principles of the non-proliferation treaty and take steps towards nuclear disarmament?