Nuclear Submarines

Debate between Lord Hammond of Runnymede and Lord Arbuthnot of Edrom

Thursday 6th March 2014 Commons Chamber

[Mr Hammond]

I am grateful to the hon. Gentleman, and by and large we agree on the importance of these matters, but I am afraid I must start by saying that I am not particularly minded to take lectures on transparency from someone who was a member of the previous Government. The decisions we have made throughout this process from January 2012 have been carefully balanced. I have, of course, considered throughout whether it would be appropriate, sensible or helpful to make a public statement, and I remind him that the advice we have received throughout from the regulators and experts is that no safety issues are arising, and that this incident scores as a level zero event on the International Atomic Energy Agency’s scale—an event that requires no action and presents no risk.

We have kept the independent military nuclear safety regulator and the Scottish Environment Protection Agency informed of matters, as is proper, and I have no doubt that there will be people who say that the Scottish Government should have been informed. We will see when we hear from the representative of the Scottish National party in a moment whether it will approach this matter from a responsible and sensible point of view. Key Ministers within the Government were, of course, aware of these issues throughout.

The hon. Member for Gedling (Vernon Coaker) asked why we decided to restart the reactor. Once it was clear that there was no safety risk and that a safety case for restarting it had been built and approved by the regulators, we continued with the operation of the test reactor to fulfil its intended purpose: to have delivered the same amount of core burn, and some more, as the most aged operational reactor will have achieved by the end of its service life.

The hon. Gentleman asked about the reactors being built for the Astute submarines, which are also core H reactors. I confirm that after this issue arose, all reactors in-build were re-examined with the best equipment available, to look for signs of anything that might give any further clue as to what has happened with the core H reactor at Dounreay.

The hon. Gentleman also asked about the decision not to have a test reactor for the successor series—the PWR3 reactor. There are several technical reasons for this. The reactor is being built to an entirely different design specification. Because of the way in which technology has evolved, the engineering tolerances will be much less challenging in the PWR3 reactor and we have access to far more advanced computer modelling techniques, which can provide an adequate substitute for prototyping. However, in view of the concerns that have been expressed about this decision, I have asked the chief scientific adviser to review again the evidence on which the decision not to operate a test reactor was based, and to report back to me on the appropriateness of that decision. I will inform the House in due course of the result of that review.

The hon. Gentleman asked whether CASD is affected. It will not be, and that is the point of taking this decision today. Refuelling Vanguard during an existing planned deep-maintenance period means that the operational rotation of the Vanguard-class submarines will not be affected. That is the reason we have taken that decision. It is not a safety-related decision; it is a submarine availability-related decision.

On the question of cost and as I have said already, we expect the total cost of the measures I have announced today to be about £270 million, all of which will come from contingency provision within the submarine programme that is currently unused. We do not expect it to have any impact on the wider defence programme. The contingency within the submarine programme is more than adequate—this amount is substantially less than 10% of the total contingency in the programme.

The hon. Gentleman asked whether I intended to make further statements. Clearly, I will of course notify the House if anything of significance happens; if we make a decision to decommission the reactor at Dounreay early; or if there are any further significant developments in respect of the reactor while it is running. I stress that we have reacted properly throughout, in consultation with the regulatory authorities, and we have dealt with this matter in the same way that any minor incident in a reactor, whether military or civil, would routinely be dealt with.

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

My right hon. Friend said that the consequences of this announcement for the Astute fleet would be the subject of further review. We all understand that the levels of radioactivity that he has announced are low, but what monitoring will be done of the cooling system in our operational Astutes to reassure the crews and all those involved that they are not in any way at risk?

[Mr Hammond]

We carry out daily sampling and analysis of the coolant water in all our nuclear submarines.

Afghanistan

Debate between Lord Hammond of Runnymede and Lord Arbuthnot of Edrom

Monday 10th February 2014 Commons Chamber

[Mr Hammond]

I am grateful to the hon. Gentleman for his support on this matter, on which—to the great credit of this Parliament—there has been and remains a bipartisan approach.

I of course share the hon. Gentleman’s sentiments on the Kabul attack, the purpose of which is to undermine the international support on which Afghanistan will depend for many years to come if it is to continue to make progress. I am sure that all Government Members will wish to be associated with his expression of sympathy to the families and friends of the British victims of the attack.

The hon. Gentleman asked about the future security of British civilians in Kabul. Obviously, we are monitoring the situation closely, and we will make appropriate arrangements to support British civilians in Kabul, particularly those on Crown service. He would not expect me to go into the detail of those arrangements at the Dispatch Box, but there should be no doubt in anybody’s mind that Kabul will remain a dangerous place for foreigners for the foreseeable future. We will rely primarily on the ANSF to maintain security in that city.

The hon. Gentleman talked about the recent rise in the civilian death rate. That is of course deeply regrettable, but I am sure that he would want to focus attention on the fact that more than 74% of all civilian deaths are directly attributable to the insurgency. In fact, the number of civilian deaths attributable to ISAF action has gone down over time, and the number of those attributable to ISAF air strikes—they were once the cause of considerable concern—has gone down by 80%. That is something that we will continue to pursue.

The hon. Gentleman asked about election security and what action ISAF will take. Clearly, ISAF will support the ANSF in every way it can, particularly in the provision of intelligence and surveillance capabilities, but the ANSF must take the lead. The message around this election is that the Afghans have taken lead responsibility for their security. The ANSF is capable, and it is very determined to be seen to lead this operation and to deliver the security that Afghanistan’s fledgling democracy requires.

There will be threats to the elections. We have already seen a concerted campaign of targeted assassinations. I am afraid that the realists among us expect that to continue and probably to accelerate as we move towards the election date. It is greatly to the credit of the leaders of Afghanistan’s democracy that it has not yet in any way undermined their enthusiasm for the democratic process.

The hon. Gentleman spoke about the talks going on between the Pakistan Government and the Tehrik-e Taliban Pakistan in relation to the situation in North Waziristan. We of course hope that there is the possibility of a solution between the two sides, but it remains the case that the Pakistan Government have to be willing to take firm action against the TTP in North Waziristan if a settlement is not possible.

The hon. Gentleman also asked about the reports of joint patrolling in Sangin. It is very difficult to get to the bottom of these reports, but I have personally been able to establish at the very highest levels that there is no mandate from the higher levels of the Afghan system for any such activity. Indeed, action has been taken to ensure that nothing that could be interpreted as joint patrolling or any kind of compromise with the insurgency can happen again.

The hon. Gentleman asked about the UK footprint. As he knows, our position is that we expect to have a continuing footprint at the Afghan national army officer academy at Qargha, just outside Kabul. That footprint will be within a much larger complex, which will have a US and ANSF-controlled perimeter. I cannot give him the precise number of UK personnel at the moment, but it will probably be between 150 and 250, depending on our precise assessment of the force protection needs at the time. He asked what percentage of training at the ANAOA is being done by Afghans. I cannot give a precise figure. If I can get a useful figure, I will write to him. It uses a “train the trainer” model, so we expect the Afghans increasingly to take responsibility for direct training.

The hon. Gentleman asked about media reports on remotely piloted air systems and about US aircraft backfilling for the unavailability of UK remotely piloted aircraft. We operate a combined fleet with the US and there is ISAF tasking. UK and US aircraft therefore fly ISAF mission tasks and they may be piloted by UK or US pilots. However, UK pilots always operate to UK rules of engagement. The rules of engagement for remotely piloted aircraft are exactly the same as those for our Tornado aircraft and those that will apply to our Apache rotary-wing aircraft when they are in action.

The hon. Gentleman asked for an assurance—with tongue in cheek, I hope—that any volunteers for redundancy who are currently serving in Afghanistan will be accepted. I cannot give him that assurance. They will certainly be considered. The criteria for voluntary redundancy relate to the future shape of the force and whether the skills that individuals hold are needed for its sustainment.

The repatriation of equipment is slightly ahead of plan. We have repatriated about half the equipment that we have to repatriate. Originally, we estimated that the cost would be up to £300 million. We are confident that the repatriation will be completed within that cost envelope.

The hon. Gentleman asked about locally employed civilians. He will know that we have two offers for locally employed civilians. The first is a redundancy scheme for eligible individuals who have served on the front line as interpreters, which allows them to accept a financial and resettlement package in Afghanistan or to come to the UK. So far, most of those who are eligible have opted to come to the UK. The second is an intimidation package for those who are not eligible for resettlement in the UK under the redundancy scheme, but who have experienced intimidation in Afghanistan.

Finally, the hon. Gentleman talked about our future aid budget. We are committed to providing £170 million per annum of ongoing Department for International Development support to Afghanistan until at least 2017. Some of that aid is targeted at projects that seek to protect the legacy of our achievement in the crucial area of the rights of women and girls. The Afghans made specific commitments on that area in Tokyo, and my right hon. Friend the Secretary of State for International Development addressed President Karzai on the subject personally during her most recent visit to Kabul.

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

May I welcome and agree with what the Secretary of State and the shadow Secretary of State have said on this important subject? Does my right hon. Friend agree that one cannot sensibly discuss Afghanistan without also discussing Pakistan? That region is and will continue to be of supreme importance to this country. Does he agree that as we draw down in Afghanistan, we should consider increasing our attention on and assistance to Pakistan in order to preserve that importance?

[Mr Hammond]

My right hon. Friend is absolutely right. Pakistan is crucial to the security of the United Kingdom. A significant proportion of the potential terrorist threats to the United Kingdom comes from the tribal areas of Pakistan, and we target a commensurate proportion of our aid effort into Pakistan. That includes a programme of military support for counter-IED training, which is greatly appreciated by the Pakistanis because it addresses a very real threat to their civilian population.

Armed Forces Restructuring

Debate between Lord Hammond of Runnymede and Lord Arbuthnot of Edrom

Thursday 23rd January 2014 Commons Chamber

[Mr Hammond]

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

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

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

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

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

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

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

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

[Mr Hammond]

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

Defence Procurement

Debate between Lord Hammond of Runnymede and Lord Arbuthnot of Edrom

Tuesday 10th December 2013 Commons Chamber

[Mr Hammond]

I will come to the hon. Lady in a minute.

We have to deal with the situation as it exists and we have to find solutions. What I have outlined today is the solution to the challenge facing DE&S in the real world.

The hon. Gentleman asked some specific questions. He asked me when the decision was taken. He says that we knew three weeks ago that we had received only one bid, and later asked me what the role of the Treasury had been. Since we received notification that we would not get a bid from the alternative consortium, we have been engaged in discussions with the Cabinet Office team, the Treasury team and my own senior officials to look not only at the risks inherent in trying to continue a contracting process with a single bidder, but how we can reinforce the DE&S plus proposition and the best way to go forward. I am sorry if he would have liked a decision more quickly, but I have to tell him that three weeks was the period it took to arrive at a robust conclusion on where we are and where we need to go. We have learned from the process. Talking to bidders and potential bidders has identified some of the challenges and issues we will be able to address to construct the DE&S plus process that I have set out today and, crucially, import private sector skills.

The hon. Gentleman mentioned Lord Levene’s report, but omitted to tell the House that the report gives the Department an excellent result overall for the delivery of the transformation process. He will know—I am sure he has studied this diligently—that Lord Levene explicitly had no remit to address DE&S plus, because it was being dealt with through a separate process driven from the Gray report. It is no secret, however, that Lord Levene, who once ran defence procurement, has always been a sceptic of the GoCo process. It is no secret that Lord Levene believes that only if DE&S plus has total freedom to hire, fire and remunerate on a fully private sector model can it succeed inside the public sector. As the hon. Gentleman and other Members with experience of Government will know, however, there are all sorts of public accountability reasons, relating to managing public money, why that is simply not possible to deliver in its purest form.

The hon. Gentleman asked me about GoCo as a potential future solution. All the evidence from this competition tells us that GoCo can deliver a value for money proposition for the taxpayer. To make it contractible, we will have to develop the DE&S proposition significantly so that it has a better and stronger baseline against which potential contractors can measure their return, and so the Department can be confident that we are not giving away public money in any contract we enter into. It remains a possibility for the MOD, once DE&S-plus is match fit, to consider running the GoCo competition again to test the proposition, in the interests of the armed forces and taxpayers, and to challenge the private sector to come forward with a proposal that will deliver value for money against the match-fit DE&S.

The hon. Gentleman asked me about part 1 of the Defence Reform Bill. Our intention is that it should continue as it stands. It will provide the legislative framework for testing the GoCo proposition, should a future Government wish to do so.

I anticipated that the hon. Gentleman would ask me, quite properly, about the costs involved in pursuing the GoCo competition. The calculation I have is that just under £7.4 million has been expended on the process.

The hon. Gentleman asked me what discussions had been held with Bechtel. He will appreciate that until the formal announcement was made to the House a few moments ago, what I could have said to, and discussed with, Bechtel was heavily constrained. In the interests of propriety, I have had no direct communication with Bechtel, but my officials have been in contact. The indication we have is that it is interested in being considered for the provision of support to the public sector DE&S plus entity through one of the support contracts that we will be letting. The invitation to negotiate that we issued for this competition made it clear that the Government could terminate the process at any point and that bidders would not be entitled to compensation or reimbursement of bid costs. The legal advice I have had is that if any such claim was received, we would be in a very strong position to resist it, and I would intend to do so.

Finally, the hon. Gentleman asked, quite properly, about the impact on staff at DE&S, not just in Abbey Wood —they are spread all across the world—but particularly in Abbey Wood. As I speak, Bernard Gray, the Chief of Defence Matériel, is, I understand, holding a town hall meeting for staff at Abbey Wood to explain to them the position and the plans for the future.

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

My right hon. Friend has just said that these changes would

“permit the recruitment into DE&S of key commercial and technical staff at market rates and with minimum bureaucracy”.

What exactly does that mean? Does it mean that the civil service terms and conditions of service have been abandoned, and only for DE&S?

[Mr Hammond]

It means that the Treasury and the Cabinet Office have agreed that we will have a bespoke regime for this central Government trading entity, recognising that it faces one of the most commercial sectors of the marketplace. We will be able to employ people with technical and high-level management skills at market-reflective salaries and to recruit them through an accelerated process that does not require us to go through the usual nine to 12-month process required to recruit senior civil servants.

Aircraft Carriers and UK Shipbuilding

Debate between Lord Hammond of Runnymede and Lord Arbuthnot of Edrom

Wednesday 6th November 2013 Commons Chamber

[Mr Hammond]

I appreciate the hon. Gentleman’s measured tone and I join him in congratulating once again the work forces on the Clyde and in Portsmouth on the excellent naval vessels that have been built for the Royal Navy over the last few years, including the carrier that remains in build.

I know the hon. Gentleman is new to his post, but he is really going to have to check some of the history before he starts making sweeping statements. He tells me that when the carrier programme was announced, the cost was £3.6 billion. Almost as soon as it had been announced, the then Secretary of State announced a two-year delay, which the National Audit Office says drove a further £1.6 billion into the cost of the carrier. The largest single element of cost increase in this programme was a deliberate act by the then Labour Government to delay the project by two years.

The hon. Gentleman asks me when we first engaged with the Department for Business, Innovation and Skills about the challenges of maintaining a skilled work force. He suggests that that has happened only in the last few days. I can tell him that the Minister of State, Department for Business, Innovation and Skills, my right hon. Friend the Member for Sevenoaks (Michael Fallon), who is in his place on the Front Bench, sat down a year ago to discuss this subject and has been in discussions with the local authorities in the area for at least a year over how to deal with the challenges that these inevitable changes present.

The hon. Gentleman asked me about the union response. I look forward to seeing the union response in full. I understand that, so far, the unions at national level have been constructively engaged with what they understand is an effort to save the shipbuilding industry in the UK. They recognise that the level of employment in naval shipbuilding represented a surge around the carrier project that was never going to be sustainable in the long term. The challenge now is to protect the skills base as we downsize the industry.

The hon. Gentleman asks me about the £38 billion black hole. We could have a very long conversation about that, but put simply, it is the difference between the projected budget available and the commitments that the previous Government had announced. I have set that out in detail. Because the hon. Gentleman is new to his post, I would be happy to write to him and set it out again for his benefit. I would be happy to discuss it with him at any time in the future.

The hon. Gentleman asks about the consequences of the STOVL—short take-off and vertical landing—reversion. If we were to change the specification in the future, the MOD as the customer would, of course, have to accept the consequences, but we are confident that the design of the aircraft carriers is now mature. The mistake made in 2008—it was a small one—was that the contract was placed before the ship had been designed. Unfortunately—I kid my hon. Friends not—anybody who has ever tried to place a contract to build a house before the house has been designed will know that that is a licence to print money for the contractor.

The hon. Gentleman asks whether I can guarantee that there will be no further rises on the £6.2 billion price. Of course I cannot give him an absolute guarantee, but I can tell him that with every pound of additional cost being shared as 50p for the Government and 50p for the contractors, we will at least have the contractor’s serious attention to try to maintain control over the project—something that we did not have under the contract construct that the last Labour Government left us.

The hon. Gentleman asks how we have paid for the additional costs. If he had been paying attention to the statement, he would know that I told him that the full costs announced today were provided in the balanced budget equipment programme that I announced in May 2012.

Yes, the hon. Gentleman is absolutely right that we are acting as the Government of the United Kingdom in the best interests of the whole of the United Kingdom, looking at where best to deliver Britain’s warship building capability in the United Kingdom in order to make it sustainable and cost-effective in the future.

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

My right hon. Friend has said that “with both carriers based in Portsmouth, the tonnage of naval vessels based in the port will be at its highest level since the early 1960s”, which is excellent news. Does that mean that the Government have reached the entirely sensible decision to bring both carriers into service?

[Mr Hammond]

As my right hon. Friend knows, that decision will be made in the strategic defence and security review 2015. Whether the decision is to bring the ship into service or to mothball it, it will be kept at Portsmouth.

Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Lord Arbuthnot of Edrom

Monday 2nd September 2013 Commons Chamber

[Mr Hammond]

I can tell the right hon. Gentleman that the work on the review was conducted in-house, led by the Cabinet Office and supported by the Ministry of Defence, and that the principal cost involved will have been civil servants’ time. If he submits a written question to me, I will ask the Department to produce the best estimate that it can make of the time involved.

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

Does my right hon. Friend agree that if we opted for an alternative to Trident, we should probably have to be out of the submarine building business altogether, and that that would pose a real risk to the national security of the country?

[Mr Hammond]

My right hon. Friend has made an extremely good point. It seems often to be forgotten by those who advocate an alternative that we must make a choice about whether to sustain a submarine building industry in the United Kingdom. I, for one, believe that it is essential to the UK’s strategic interest for us to maintain a submarine-building capability, and that further points to the use of a submarine-based continuous-at-sea deterrent.

Defence Reform Bill

Debate between Lord Hammond of Runnymede and Lord Arbuthnot of Edrom

Tuesday 16th July 2013 Commons Chamber

[Mr Hammond]

My hon. Friend is absolutely right. The role of the Territorial Army has evolved and it will evolve further. My point was that when Haldane introduced it in 1908 by consolidating the county militias, he had in mind a home or territorial defence role, which the name reflects. I am happy to agree with my hon. Friend that the role that the TA has played over the years has been substantially greater than the role envisaged for it originally.

Hon. Members on both sides of the House have raised concerns over the possibility of employment discrimination against reservists. The Bill provides improved employment protection by allowing a right of access to the employment tribunal without a qualifying employment period for an unfair dismissal claim where the dismissal relates to the employee’s reserve service. Separately, there is already a criminal offence of dismissal because of call-out for reserve service.

However, we recognise that there is a perception among many reservists that they are disadvantaged in the workplace by their reserve service. We believe that the changes that we have set out in the White Paper will greatly improve relations between reservists and their employers, but we take the issue of discrimination against reservists very seriously. We have established a webpage through which reservists can report incidents of perceived discrimination and we will investigate them. If we find that there is a case for further action, we will take it. We will consider whether further measures may be taken in the next quinquennial Armed Forces Bill, which is due to be introduced in this House in 2015.

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

I am delighted with what my right hon. Friend has just said. Will he consider, among the further measures that might be taken, action to help reservists who find that their promotion is held back by their being in the reserve forces?

[Mr Hammond]

I am grateful to my right hon. Friend. That example fits exactly into the category of discrimination in the workplace. We must look objectively at the examples that we are given to establish whether they constitute actual and systemic discrimination against reservists, rather than mere perceptions. The time scale that we have set out is appropriate. We have set up the webpage and are starting the process now. In 2015, when the next quinquennial Armed Forces Bill is introduced, the time will be right to analyse the information that we have received and to consider what action is appropriate.

The support of employers is crucial to delivering our future reserve forces, and we seek to strengthen the reservists and the MOD’s relationship with them. The White Paper set out a range of measures to deliver a sea change in those relationships. While small and medium-sized enterprises will benefit from all of the measures, I have acknowledged previously that reserve service can have a particular impact on them as a result of their scale. Therefore, by amending clause 44 of the Reserve Forces Act 1996 to allow the introduction of a financial award of £500 per month per reservist for SMEs when any of their reservist employees is mobilised, we will target additional resources at this sector and explicitly recognise the additional impact SMEs may have to absorb when a reservist employee is mobilised.

The measures in part 3 support the package of proposals set out in the White Paper. They will ensure that we have the well-trained, well-equipped and integrated reserve forces we need, which are able to deploy with their regular counterparts as part of Future Force 2020.

The driver for change running through the Bill is the requirement to deliver the capabilities our armed forces need while ensuring value for money for taxpayers, whether that is through better procurement or more efficient and effective use of the reserves. The measures contained within it allow fundamental change to how we procure our military equipment, and ensure that we will be able to make full use of our reserve forces in the future.

Whatever else we may disagree on, all of us in this House place the utmost importance on properly equipping and supporting our armed forces. The Bill will ensure that we can be confident of our ability to do so in the future. I hope the measures will command widespread support, and that we will be able to take them forward through this House and the other place on a consensual basis. I commend the Bill to the House.

--- Later in debate ---

[Mr Arbuthnot]

As I have said before, the hon. Lady performs a valuable service on the Defence Select Committee. She has put her finger on an extremely important point, which was also raised by the Select Committee in our report on defence acquisition. She is right; this matter has to be covered. I asked my right hon. Friend the Secretary of State a question about how the United States and France were reacting to the proposal, and he was able to say that he had received a supportive letter from the United States that very morning. I also know that there is a working party in operation with the United States to try to ensure that any problems are ironed out. It is true that other countries think we are being very brave. If we are indeed being so courageous, and if this works, we may well forge the way for other countries to follow us. It may well be that whichever company succeeds with the GoCo in this country could find vast new opportunities opening up for it. For example, it could take over the defence procurement of the United States, which would make somebody extremely rich.

The next question, which has been raised by ADS and by the Federation of Small Businesses, relates to how the GoCo proposition would affect small and medium-sized enterprises. The FSB has said that it is broadly supportive of the Government’s proposal, as contained in the Bill, but that it is vital that the needs of SMEs be considered when the reforms are implemented. I echo that, and I am sure that my right hon. Friend the Secretary of State will do so as well.

The time line involved is ambitious. I understand that there is a suggestion that we might reach a final conclusion in April 2015. That must remind us all of another fixture in our diaries for May 2015—the general election. Surely the risk of this project running up against the next election is huge.

[Mr Philip Hammond]

Perhaps I can help my right hon. Friend. The expectation is that the competitive process will be completed by the spring of next year, with the contract award in the late summer and with the GoCo standing up, if that is the solution we choose, towards the end of next year or at the very beginning of 2015—around December or January.

Reserve Forces

Debate between Lord Hammond of Runnymede and Lord Arbuthnot of Edrom

Wednesday 3rd July 2013 Commons Chamber

[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.

Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Lord Arbuthnot of Edrom

Monday 17th June 2013 Commons Chamber

[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?

Better Defence Acquisition

Debate between Lord Hammond of Runnymede and Lord Arbuthnot of Edrom

Monday 10th June 2013 Commons Chamber

[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.

Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Lord Arbuthnot of Edrom

Monday 15th April 2013 Commons Chamber

[Mr Hammond]

I am not going to pre-empt the outcome of SR 13; nor am I going to conduct the spending review in public. My Department is engaged in analysis with the Treasury and the Cabinet Office, in search of genuine efficiency savings. Where we can find such savings, for example in the equipment support programme, the Ministry of Defence will willingly do its bit to contribute to fiscal consolidation. I will, as you would expect, Mr Speaker, argue vigorously for the resources that Defence needs to deliver Future Force 2020 in accordance with the strategic defence and security review 2010.

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

A few weeks ago, the Prime Minister told the House that he continued to hold the “strong view” that the overall defence budget should rise in real terms from 2015 onwards. When will that prime ministerial wish become Government policy?

[Mr Hammond]

I can confidently predict that the Prime Minister will be involved and will be a key player in the end game of the SR 13 discussion.

Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Lord Arbuthnot of Edrom

Monday 25th February 2013 Commons Chamber

[Mr Hammond]

The Prime Minister has made it clear that he stands by his view that the equipment plan budget needs to increase in real terms, and we have a pledge from Her Majesty’s Treasury that we may plan on the assumption of a 1% real-terms increase. Our planning assumption is flat real-terms growth for the remainder of the budget.

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

I do not think that that was precisely what the Prime Minister said. Nevertheless, does my right hon. Friend the Secretary of State agree that if we possibly can we should continue to meet the NATO objective of spending at least 2% of our gross domestic product on defence?

[Mr Hammond]

I agree with my right hon. Friend. The plans that we have set out do indeed show that we will continue to comply with that 2% threshold.

Afghanistan

Debate between Lord Hammond of Runnymede and Lord Arbuthnot of Edrom

Wednesday 19th December 2012 Commons Chamber

[Mr Hammond]

I thank the right hon. Gentleman for his comments and for the tone in which he made them. I know that he expressed the views of Members in all parts of the House in sending best wishes for Christmas to the members of our service personnel who will be in theatre over the Christmas period. I am grateful for his continued support and for that of the whole Opposition.

The right hon. Gentleman was absolutely right to emphasise the scale of the challenge ahead, and the reversibility of the achievements that have been won. It is for precisely that reason that we are engaged in the ongoing process of building the Afghan national security forces and the institutions of the Afghan state for the long term, and it is for precisely that reason that we have gone out of our way to emphasise the nature of our ongoing commitment to the Afghan people way beyond the end of our combat operations in 2014.

The right hon. Gentleman understandably asked some questions about the draw-down of our forces during 2013. He asked which units would leave and from which parts of Helmand. Owing to our six-monthly rotational pattern in which units are deployed to theatre routinely around March-April and September-October each year, it is less a question of which units will leave than a question of deploying fewer units to replace those that are coming out of theatre at each successive turn of the handle. I expect that there will be some draw-down of numbers next April, a period during the fighting season in which numbers remain constant, and a further draw-down in September-October, towards the end of next year.

The right hon. Gentleman asked about force protection measures. Ours is an integrated force. The 5,200 figure was arrived at through a bottom-up process of military logic and military planning that took account of the shape and scale of the force that will be required to deliver the tasks that we expect to be delivering by the end of 2013.

As for the capabilities of the Afghan national security forces who will increasingly fill the gap as we reduce our numbers, the message is clear. The right hon. Gentleman will have heard it: I know that he has heard the back-to-office reports of returning commanders from Afghanistan. The Prime Minister mentioned it earlier, and I have heard it myself. Everyone talks of the Afghan forces’ increasing confidence, increasing competence and increasing willingness to engage. There has been a step change in the level of what they are able to do.

However, as the right hon. Gentleman pointed out, at present Afghan forces still depend on ISAF allies for some key enablers: air cover, air support, indirect fire support—they are building a capability of their own in that respect, but it is as yet immature—and, crucially, medical evacuation, which gives the Afghan army high levels of confidence on the battlefield. Over the next two years, we will focus on developing Afghan indigenous capabilities so that they can replace those enablers at the end of our combat involvement.

The right hon. Gentleman asked about the international dimension of draw-down. There is an emerging ISAF plan, which is being discussed among the ISAF nations, and today’s announcement is entirely consistent with that plan. Other allies, including the United States of America, will make specific announcements in due course.

The right hon. Gentleman asked about the rules on redundancy. Announcements about future tranches of Army redundancy will be made in the new year, and the rules will be set out to be as fair as possible. That means ensuring that the field of redundancy is as wide as possible, while ensuring that those who are about to be deployed on operations, those who are currently deployed and those who have just returned from operations remain exempt. The more widely we set the field, the fairer the process of redundancy selection will be.

The right hon. Gentleman asked about the post-2014 non-combat commitment and about embedded training. Those matters have not been decided, beyond the commitment that we have given to take the lead role in running the Afghan national officer training academy. There are a number of things that we could consider doing beyond that, but we have decided that it does not make sense to make firm commitments earlier than we need to, before we see how the situation develops on the ground and before we see what other allies intend to do. We will make announcements to the House in due course, during 2013, as those decisions are made.

Finally, the right hon. Gentleman asked about talks between the Afghan Government and the Taliban and between US officials and the Taliban. The Government are working very hard and very diligently. My right hon. Friend the Foreign Secretary is routinely engaged in encouraging the process of dialogue, as is the Prime Minister. We know from our own experience over many years that conflicts of this kind invariably have to be settled by means of dialogue and compromise. At the heart of that dialogue and compromise will be a renewed shared understanding of the need for future dialogue and co-operation between Afghanistan and Pakistan, and I am pleased to say the UK has played a significant role in enhancing that and in ensuring there is genuine engagement with Pakistan in these discussions.

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

I welcome my right hon. Friend’s statement. My question is about force protection. As all the ISAF countries begin to draw down, they will have concerns about force protection, including how to protect increasingly isolated units. What is being done to reduce the isolation of ISAF units and to share possible force protection measures across ISAF countries and the Afghan national security forces?

[Mr Hammond]

My right hon. Friend is right to draw attention to that question, as the right hon. Member for East Renfrewshire (Mr Murphy) also did. As we draw down, force protection will be one of the key determinants of the shape of the force and the scale of draw-down that is possible. As my right hon. Friend suggests, there will be co-ordination across ISAF, including sharing force protection arrangements as the force gets smaller. I should also draw my right hon. Friend’s attention to what I said earlier about the reduction of the UK footprint in Helmand. That is significant and has significant implications for force protection. We are now servicing 32 UK locations in Helmand province, as opposed to more than 80 UK locations just nine months ago. That has led to a significant reduction in both the logistics challenge and the force protection challenge.

Future Reserves 2020

Debate between Lord Hammond of Runnymede and Lord Arbuthnot of Edrom

Thursday 8th November 2012 Commons Chamber

[Mr Hammond]

The Department of Health, along with a number of large companies, is one of our key partners in the current partnering arrangement. Many NHS trusts that I have spoken to are acutely aware of the benefits to them of properly managed reserve service. Those returning from the role 3 hospital in Camp Bastion have without doubt the best trauma training available anywhere in the NHS.

If the hon. Gentleman reads the Green Paper, he will see that, as well as appeals to corporate social responsibility and collective responsibility for the national defence, there is a strong strand of mutual benefit between the reserves, the Army and employers. We need to draw out and develop those mutual benefits, and I am sure that we will be able to do that in the case of NHS trusts.

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

I congratulate my right hon. Friend on this statement, and I know that he will agree with me that the House will also wish to congratulate my hon. Friend the Member for Canterbury (Mr Brazier), without whose persistence this statement would not have taken place. I declare an interest, in that my daughter is a reservist second lieutenant.

Will my right hon. Friend confirm that it is so important that this proposal succeeds that it deserves a campaign led by the Prime Minister and, I suggest, the Leader of the Opposition, as well as the Secretary of State for Business, Innovation and Skills and the Secretary of State for Defence, to encourage employers to recognise the enormous benefits that they will get from employing people with the work ethic and the discipline that reservists show every day?

[Mr Hammond]

I am grateful to my right hon. Friend and I am very happy to acknowledge the role of my hon. Friend the Member for Canterbury (Mr Brazier), who has played a crucial part in developing this agenda.

Yes, my right hon. Friend is right: it is essential that we achieve success in this regard. I do not regard this as a partisan issue, and I hope that the right hon. Member for East Renfrewshire (Mr Murphy) will think carefully about the point about deployed formed units and sub-units. I would be happy to arrange for him to have some briefing on this matter, if necessary, from the relevant people in the Army and Army Reserve. I hope that we can take this forward not only on a cross-government basis but on a cross-party basis.

My right hon. Friend the Member for North East Hampshire (Mr Arbuthnut) has hit the nail on the head in talking about the benefits to employers. If we are going to make this process work, we must draw out the benefits for employers, in the general management and personal skills that reserve service will bring to their work force, and given the specific vocational training that the Army can give to reservists. One proposal in the Green Paper is to use civilian-recognised qualifications in the armed forces, making it easier for members of the armed forces—regular and reservist—to use the skills that they have acquired during service to enhance their careers in the civilian economy.

Afghanistan (NATO Strategy)

Debate between Lord Hammond of Runnymede and Lord Arbuthnot of Edrom

Tuesday 18th September 2012 Commons Chamber

[Mr Hammond]

As I said in my statement, the amount of partnering will steadily reduce with the transition to Afghan lead, then Afghan sole control. As a matter of fact, it has been reducing. [Interruption.] I can tell the hon. Gentleman that over the past few days, before that ISAF order was issued on Sunday, UK commanders had already reviewed—I discussed this with them when I was in theatre on Thursday—the activities of British forces to make sure that any unnecessary contact with Afghans was withdrawn during this sensitive period. We are flexible and cognisant of the broader atmosphere. We will take all steps necessary to minimise the risk to our forces consistent with maintaining the key strategy of partnering and mentoring to build up ANSF capability.

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

My right hon. Friend said that the new measures announced by ISAF were prudent but temporary. In what respect are they temporary? In what respect can they be?

[Mr Hammond]

General Allen has indicated that he intends to review the order in the light of the evolving security environment, and to return to normal operations, as he described it, as soon as possible.

Army 2020

Debate between Lord Hammond of Runnymede and Lord Arbuthnot of Edrom

Thursday 5th July 2012 Commons Chamber

[Mr Hammond]

The right hon. and learned Member for North East Fife (Sir Menzies Campbell) has often reminded me of the concerns about Leuchars. I can only repeat that there will be no impact whatever on the basing review, and our intentions on basing remain as set out. We are doing the work to enable us to deliver them, and we have set out a time scale for doing so.

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

At last, the uncertainty that has been hanging over the Army’s head has been dispelled. We can all be thankful for that, and I know that the Army will be. However, this plan relies on an increase in the recruitment of reservists unparalleled in modern history. What gives my right hon. Friend confidence that that will happen, and what incentives will employers be offered to release their best workers to serve their country?

[Mr Hammond]

I am grateful to my right hon. Friend. The Army has looked at the experience of comparable forces around the world in recruiting reservists, and I agree that co-operation with employers will be critical. We intend to publish a consultation paper in the autumn on our proposed changes and our engagement with employers—the offer for employers, if you like—and we will bring forward our proposals in the new year. If implementing our vision of reserves requires legislation, we will legislate.

Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Lord Arbuthnot of Edrom

Monday 11th June 2012 Commons Chamber

[Mr Hammond]

I am not sure that the hon. Gentleman was here when I made my statement, but he is completely wrong; my statement related to the whole budget, not simply the equipment plan. As he will know, the announcement of a reduction in the size of our armed forces was made last year. We are now making a series of tranches of redundancy announcements, of which the one due tomorrow will be the last for the Royal Navy and the RAF, to get us eventually to armed forces of the size specified for Future Force 2020 in the strategic defence and security review.

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

The news that the defence budget is balanced is obviously very welcome, but there will inevitably be a certain amount of scepticism about it. Does my right hon. Friend accept that if he is to dispel that scepticism, the sooner he can provide absolute clarity about exactly how he has balanced the budget, and exactly how the £38 billion black hole that Defence Ministers referred to is calculated, the better?

[Mr Hammond]

I accept that there will be a certain amount of scepticism. In relation to the equipment plan, there are two parts to the answer. First, the armed forces committee has confirmed that the equipment plan that we set out and funded does deliver the capabilities required for Future Force 2020. Secondly, we have submitted the programme to the National Audit Office for review, and we will publish the result of that review in due course. In respect of the 55% of the annual budget that is not taken up by the equipment plan, the proof of the pudding is in the eating, and Members in all parts of the House will look to see a defence budget that comes in within the spending plan total, as they did in 2011-12.

Defence Budget and Transformation

Debate between Lord Hammond of Runnymede and Lord Arbuthnot of Edrom

Monday 14th May 2012 Commons Chamber

[Mr Hammond]

As the hon. Lady will know, my predecessor took some difficult decisions to cancel programmes that were contracted, which incurred some costs. One of the changes that we are now making will ensure that we do not commit contractually to projects earlier than we need to, so that if the MOD needs to restructure a programme or introduce flexibility, it will be able to do so without incurring such penalties.

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

The proof of this pudding will be in the eating, but I would suggest that the House should give it a wary welcome. At least we have now moved away from the position that existed at the end of the last Government, when the then Prime Minister said that there was to be no bad news and no new money. Does my right hon. Friend feel that we are really giving enough priority to defence research? The figure of 1.2% of the defence budget seems pretty low to me.

[Mr Hammond]

I am grateful to my right hon. Friend for his comments. Defence research and technology provide vital support to our defence effort and, after years of decline, we have guaranteed that we will not reduce any further the percentage of 1.2% of the defence budget.

Carrier Strike Capability

Debate between Lord Hammond of Runnymede and Lord Arbuthnot of Edrom

Thursday 10th May 2012 Commons Chamber

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

To make an announcement like this takes real courage and I commend the Secretary of State, and the Prime Minister, for making what I agree with the former Secretary of State is the right decision. Is my right hon. Friend able to say how much it would have cost to have converted the second carrier to cats and traps, because was there not a real risk that we would end up with a carrier that we could neither use nor sell?

[Mr Hammond]

My right hon. Friend is correct to focus on that point, and I thank him for his comments. As I think I said in my statement, fitting cats and traps retrospectively to the Queen Elizabeth, after her completion, would undoubtedly be significantly more expensive than even the current £2 billion estimate for fitting them to the Prince of Wales in build. It is therefore not unreasonable to think of a likely cost of between £2.5 billion and £3 billion for retrospective fit to the Queen Elizabeth, making that project, as I suggested in my statement, in practice unlikely ever to occur.

Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Lord Arbuthnot of Edrom

Monday 26th March 2012 Commons Chamber

[Mr Hammond]

The hon. Gentleman will know that the strategic defence and security review committed us to a regeneration of carrier strike capability, and the building of the carriers is well advanced. I can reassure him on that front. There is no intention to revisit the decision to build the carriers. The review is about how we operate them, use them and ensure that they remain affordable into the future.

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

My right hon. Friend is rumoured to be considering reverting to the short take-off and vertical landing variant of the joint strike fighter. Is he aware that were he to do so, his decision would be applauded by many because it would mean not having to find £2 billion per carrier—money not readily available—and because it might mean having two carriers instead of one?

[Mr Hammond]

I can assure my right hon. Friend that I have spent a great deal of time looking at this project over the past few months, and I believe that I am aware of all the arguments on both sides.

Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Lord Arbuthnot of Edrom

Monday 20th February 2012 Commons Chamber

[Mr Hammond]

The hon. Gentleman correctly identifies one of the lessons from the Libya campaign. Much of what came out of that campaign was positive, but clearly some shortfalls were identified. I must say that the finger must point primarily at those European members of NATO that fail to spend the target 2% of their GDP on defence. We will be looking to them to contribute the additional resources required to make good the shortfalls.

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

I am delighted to hear that my right hon. Friend is close to balancing the books. Does that mean that we can look forward to an early set of accounts that are not qualified by the auditors, so that we can have confidence in what the books say.

[Mr Hammond]

Speaking candidly, I can say to my right hon. Friend that it will be a number of years yet, as the Department has made clear, before it is able to get an unqualified set of accounts. As Labour Members will know, that is largely due to a legacy problem associated with MOD inventory and the large quantity of stock items held in a form that the National Audit Office is not able adequately to audit. A solution is being put in place—a new IT system will resolve this problem over the next couple of years—and it should then be possible to get unqualified accounts.

Strategic Defence and Security Review

Debate between Lord Hammond of Runnymede and Lord Arbuthnot of Edrom

Thursday 26th January 2012 Commons Chamber

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

rose—

[Mr Arbuthnot]

I can quite see my right hon. Friend answering, “Well, this is a funny way to go about it,” but I will give way to him none the less.

[Mr Hammond]

I am tempted to say that it is even a grotesque way, Mr Deputy Speaker. In the spirit of my right hon. Friend’s remarks, perhaps I can try to help him. I understand his concern about the voluntary and compulsory redundancy numbers, but the simple fact is that we have set out a trajectory of headcount reduction among the civilian employees of the MOD and among the armed forces. At each tranche we have called for volunteers, and enough volunteers from the civilian population have come forward for no compulsory redundancies to be required. There has been an insufficient number of volunteers from the military population so, regrettably, compulsory redundancies have been required. I do not rule out the possibility that compulsory redundancies will be required among the civilian work force in future.

[Mr Arbuthnot]

My right hon. Friend is, as always, helpful. I hope that he will now address the issue on which there is some dispute of fact—whether those in the military on whom compulsory redundancy is imposed are allowed to offer themselves for retraining; we have heard variously both that they are and that they are not. That is an important issue.

I now turn to the strategic defence and security review—although I do not want to take too much longer because a large number of people would like to speak. One of the main aims of the Defence Committee is to see how the next strategic defence and security review, in whatever year it will be—2014, 2015, 2016; we do not yet know—can be better than the last one. Our criticisms of the last one included the fact that it was rushed to fit in with the comprehensive spending review, and was therefore undertaken without sufficient consultation with academia, industry, Parliament or the country. I heard my right hon. Friend the Prime Minister say that taking longer over decisions does not necessarily make them better, and that is true, but having proper full discussion in the country before such decisions are made would make them more informed.

Oral Answers to Questions

Debate between Lord Hammond of Runnymede and Lord Arbuthnot of Edrom

Monday 14th November 2011 Commons Chamber

[Mr Hammond]

The simple answer to the right hon. Gentleman is no. I understand very well the concern that he expresses. He is referring, I think, to stories about the level and speed of US Marine Corps withdrawal from central Helmand, and indeed from the wider Helmand area. We are very clear that it is the increased force density that has secured the success of the British mission, and we have no intention of allowing that force density to be diluted in a way that damages our future prospects of success.

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

Over recent years the Afghan national police have been regarded as a threat by the local population second only to the Taliban. Can my right hon. Friend say whether significant progress has been made in bringing the quality of the police up to that of the Afghan national army?

[Mr Hammond]

I believe that progress has been made. The composition of the Afghan national police is different from that of the Afghan national army in terms of the distribution of locally raised forces. There is a greater affinity between ANP forces and local people than between the army and local people, but there is still further work to do, and I fully recognise what my right hon. Friend says.

Afghanistan

Debate between Lord Hammond of Runnymede and Lord Arbuthnot of Edrom

Tuesday 18th October 2011 Commons Chamber

[Mr Hammond]

The important thing is that the ANSF are growing in size and capability, so, with 25% of the population already living in areas that have been transitioned and another tranche of transition to be announced later this autumn, Afghan civilians will increasingly find that their day-to-day security contacts are with the Afghan national security forces. As we move towards 2014, allowing foreign forces to be seen as formations that can be withdrawn without compromising the security that Afghan civilians enjoy is a positive step, so I should like to see something positive in the figures that the hon. Gentleman cites.

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

I, too, welcome my right hon. Friend to his position. He has a hard act to follow, but I am sure that he will do a very fine job—and if he does not, the Defence Committee will hold him to account. Does my right hon. Friend agree that one of our key strategic aims in Afghanistan must be to bolster the stability of Pakistan? How does he think that we can manage the draw-down of our combat troops so as to bolster that stability, rather than undermine it?

[Mr Hammond]

I thank my right hon. Friend, and absolutely agree with his analysis that the greatest strategic challenge is security in the wider region, including security in the vulnerable cross-border area. If he does not mind, with only 48 hours under my belt, I will not give the House a lecture on how that is to be delivered, but I will confirm that I recognise it as a very important priority.