Draft Single Source Contract (Amendment) Regulations 2018
Tobias Ellwood Excerpts(6 years, 5 months ago)
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The Parliamentary Under-Secretary of State for Defence (Mr Tobias Ellwood)
I beg to move,
That the Committee has considered the draft Single Source Contract (Amendment) Regulations 2018.
It is an unexpected pleasure, Mr Bailey, to be in the position of moving the motion, but it is nevertheless an honour.
The Ministry of Defence spends some £8 billion a year through contracts that are not competed. Given the lack of competitive pressure, the Government need to find alternative ways of ensuring that the MOD obtains value for money on those contracts while protecting the long-term future of the defence industry by ensuring that suppliers get a fair return on single source work.
Lord Currie produced an independent report on non-competitive defence procurement in 2011. He concluded that the arrangements then in place were simply unfit for purpose. The result was a weak negotiating position for the Department and poor value for money for the taxpayer. As a consequence, the Government introduced a new framework through the Defence Reform Act 2014. Our intention was clear: the new framework set out firm rules on pricing single source defence contracts and shifted the onus on to suppliers to demonstrate that their costs are “appropriate, attributable and reasonable”. Where there is a dispute, either party can refer the matter to an impartial adjudicator—the Single Source Regulations Office—for a binding decision.
Since coming into force in December 2014, the new framework has made significant progress. Contracts worth more than £19 billion have been brought under the framework and the benefits to the MOD have been considerable, including a reduction of the baseline profit rate from more than 10% in 2014 to 6.8% this year. However, any new regime of this complexity needs to be refined in light of experience. The 2014 Act therefore required the Secretary of State to carry out a thorough review of single source legislation within three years of it coming into force. The review was completed in December 2017, and it identified several potential improvements to the framework. We have incorporated the first of those into the regulations, and we plan to introduce further amendments to Parliament later this year.
The Joint Committee on Statutory Instruments has stated that the MOD has failed to comply with proper legislative practice by not offering the regulations under the free issue procedure. The Department had taken the view that the main purpose of the regulations was to introduce enhancements to the existing regulations by changing the definition of exclusions. It believed that the aspects of the regulations that clarify aspects of the original regulations, and hence would cause them to be issued free of charge, would not have been sufficient to justify producing a new statutory instrument. However, in light of the Joint Committee’s views, we are happy to make the regulations free of charge when they are published.
The main amendments under consideration relate to the types of single source contracts, known as “exclusions”, that cannot become qualifying defence contracts. MOD policy remains to maximise the value of single source contracts covered by the framework to secure the highest level of benefits. For that reason, it is important that exclusions are defined as narrowly and precisely as possible to ensure that as many contracts as possible are eligible under the regulations.
However, experience in implementing the framework has shown that there is confusion about how to apply some of the exclusions and that contracts relating to intelligence and international co-operative programmes are being unnecessarily excluded. We are therefore proposing a clearer and more precise definition of the two categories. We estimate that that could result in up to a further 8% to 10% of single source spend coming under the regulations.
We are also adding a further category of exclusion to deal with situations where contracts are transferred from one legal entity to another, such as where an internal restructuring of an industry has taken place. In such cases, although the legal identity of the supplier may have changed, the contract has not otherwise changed in a material sense. We have engaged extensively with stakeholders in drafting these amendments and believe that the proposals will be welcomed by suppliers as offering greater clarity on definitions of exclusions and therefore reducing the degree of confusion. I hope the regulations will gain the Committee’s approval.
Mr Ellwood
Thank you, Mr Bailey—I was waiting for the deluge of other Back Benchers leaping to their feet to participate in this important debate.
I thank the hon. Member for Caerphilly for his comments and his perspective on the resignation of the former Minister, my hon. Friend the Member for Aberconwy (Guto Bebb). We all wish my hon. Friend well and thank him for his service and what he did. The hon. Member for Caerphilly sought perhaps to make fun of the fact that he had resigned, but the Government are yet to match the more than 100 resignations we have seen in the Opposition. There is one Member sitting on the Opposition Back Benches now who resigned. If we want to compare notes on resignations, Labour should perhaps keep quiet.
Wayne David
As the Minister specifically referred to me, I thank him for giving me a chance to reply. Yes, I did threaten to resign, but I actually did resign, unlike the Minister, who has threatened to resign but has not done so. Nothing has changed—he is all talk.
Mr Ellwood
The hon. Gentleman says he resigned. As far as I can see, he is still on the Front Bench, so I do not know where his resignation took him. Obviously it did not have the impact he wished. Perhaps his services were desired again because so many others had resigned that the Opposition needed a chance to revisit some of them, saying, “Please come back, because we have got nobody else.” Before we go any further down that cul de sac, shall we return to the business at hand, Mr Bailey?
Mr Ellwood
I am pleased to gain your approval.
The hon. Member for Caerphilly wished me well in momentarily taking over this portfolio. Like many of us with a desire to see the best for defence, for our armed forces and for Britain, I take a huge interest in the procurement process. I certainly feel able, competent and enthusiastic to step into the shoes of the former Defence Procurement Minister.
The hon. Gentleman spoke about investment in procurement and touched on the fact that there is to be some £180 billion of investment over the next 10 years. That is an indication of the Government’s commitment. We want to see an advance in equipment for our armed forces to ensure that we remain a tier 1 nation when it comes to our defence posture. That is partly why we undertook a capability review and the defence modernisation programme, which is coming to its conclusion.
The hon. Gentleman asked a number of questions, particularly about why we have single source contracts. There are two principal reasons for that. First, some of the major procurement contracts, such as submarine build, simply go to a single contractor. There is only one that steps forward, perhaps for security reasons or otherwise, so there will be a single source in those cases. In other cases, perhaps at smaller levels, the economic supplies limit who steps forward, such as with our maritime patrol aircraft. Nevertheless, I hope he appreciates that there is not always the competition we want. If there is not the competition, we should have robust rules to ensure that taxpayers’ money is properly spent.
The hon. Gentleman talked about the impact on businesses. There are a number of impacts. First, there is value for money, where we have seen in the percentage drop in the baseline profit rate that I mentioned in my opening comments. We have more efficient procedure, and there is less confusion as to what the process is. There is no negative impact on business—that is what the guidelines were hinting at. The measure will not require any further red tape for business to be concerned about.
The hon. Gentleman talked about the Command Paper. We are preparing that now simply because it is part of the thoroughfare of business that we need to get through. We do not wish to wait until the autumn. I certainly hope that the Command Paper will be published as soon as possible. It is part of the wider timetable that we must honour, which is about joined-up Government and ensuring that we meet our responsibilities. That is why the regulations are being put forward today.
The hon. Gentleman put a couple of other detailed questions to me, on which he invited me to write to him. If I may, I will do exactly that. With that, I seek the Committee’s approval for the regulations.
Question put and agreed to.
Defence Industry and Shipbuilding
Tobias Ellwood Excerpts(6 years, 5 months ago)
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The Parliamentary Under-Secretary of State for Defence (Mr Tobias Ellwood)
That was an introduction and a half. Thank you very much, Madam Deputy Speaker: it is a real pleasure to take part in this important debate.
Looking at the motion, I see much on which we are in agreement, and looking around the Chamber, I see many of the usual characters who wholly support not only the armed forces and the armed forces industry, but our defence posture. Defence investment is important, and my view—I do not know whether it is related to what may happen later in the day—is that we need to spread that message more widely to our other parliamentary colleagues.
Let me approach the issue from two perspectives. First, why must we invest in our maritime capability? Why, from a British perspective, is it important for us to do that? Secondly, in aiming to meet whatever is our ambition and create whatever architecture we wish to create, how can we most wisely spend the taxpayer’s money on defence? It is interesting that the hon. Member for Llanelli (Nia Griffith) focused on that as well. What is a wise use of taxpayers’ money—or should we automatically give it to shipbuilders in the United Kingdom with no questions asked? That, I think, is at the core of the debate: the issue of where the line should be drawn.
Let me step back from the details for a second, and reflect on the importance of the security and prosperity of our island nation in the context of the seas. For centuries our world-renowned Royal Navy has protected our shores and our people, and has safeguarded our interests. As we mark the end of the first world war, we remember that in that war—and, indeed, in the second world war as well—it was the aircraft carriers, the frigates, the destroyers, and the other warships built by men and women across the country that kept our fortunes afloat.
Today, as the hon. Lady said, our Royal Navy is busier than ever, defending our trade routes, leading the fight against global terror, protecting shipping lanes from piracy, tackling illegal migration in the Mediterranean, and, obviously, playing a leading role in NATO’s maritime capability. Its activities have ranged from war-fighting to nation-building to peacekeeping, and from interdiction to littoral work—and humanitarian work, as we saw in the Caribbean last summer. In a post-Brexit world, however, there is an ever greater need for us to project our influence and lead by example in retaining the most sophisticated and potent Navy in Europe, to help shape the world around us and to keep ourselves and others safe.
I make no apology for raising the wider issue of defence spending—which has already been raised by the Chairman of the Defence Committee, my right hon. Friend the Member for New Forest East (Dr Lewis)—at the very time when the same issue is being discussed more widely at the NATO summit. The Defence Secretary has succeeded in elevating the need for increased defence investment as threats diversify and become ever more complex. As I said in Defence questions on Monday,
“We are entering a phenomenon of constant confrontation by state and non-state actors.”—[Official Report, 9 July 2018; Vol. 644, c. 691.]
We are not in a phase of war, and we are not in a phase of peace.
Let us remind ourselves of the very first line of the national security strategy and strategic defence and security review:
“Our national security depends on our economic security, and vice versa.”
It is important for us to persuade all members of all parties that we must invest, because if we fail to do so, our capabilities will diminish at the very time threats are increasing. We need to convey that message to the Treasury. Let me repeat that as the world becomes more dangerous, our post-Brexit economy is ever more reliant on security for access to our international markets. Some 95% of our trade still goes by sea, and we need to protect our interests there.
Mr Ellwood
If the hon. Gentleman will let me finish this peroration, I will of course give way, just to re-energise myself. If we allow that trade to be affected by the changes made in the world around us by nations that choose to breach the rules we helped set up after the second world war, there will not be any money for any Government Departments, let alone the MOD. I hope we can join together to persuade more of our colleagues about that, and not just the stalwarts and defence fans, so to speak, who are here today.
Grahame Morris
I apologise for interrupting the Minister’s flow. I do not think any Member on either side of the House would disagree about the importance of the Royal Navy and the incredible job it does, but our point on this side of the House—I suspect shared by some on the Government Benches—is that shipbuilding is a vital strategic industry. There are many benefits apart from producing the very best ships in the world, such as maintaining employment and a skills base that could itself generate more economic activity. I hope the Minister will take that into account, and not least the importance of the supply chain.
Mr Ellwood
There is nothing in that that I would disagree with; the hon. Gentleman is absolutely right. I will come on to what we are doing to promote Royal Navy ships; we will come on to the core fact of what is a Royal Navy ship and what is a fleet auxiliary ship, which again goes to the heart of the difference in how these different types of ship are procured.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
Notwithstanding what has just been said, surely the Minister will accept that whenever we buy a Royal Navy warship, an auxiliary ship, an aircraft or whatever abroad, we never own all the intellectual property associated with that product. We are buying F-35s, which are splendid aircraft, but we will never know the fine details of the box of tricks that makes them work, and that is a disadvantage to our country.
Mr Ellwood
I will move on to our maritime capability and our procurement process, but first please allow me to finish the bigger case of why it is important that we invest here.
I am making the point that although we must persuade Members of Parliament, we also need to persuade the nation. This is the same nation that enjoyed the fly-past yesterday and that expects us to step forward as a global influencer, but I am afraid is perhaps worryingly naive about the need to invest, because that is not a doorstep issue; it does not come up very much on the election circuit compared with health, education or transport. I think all Members would accept that point.
Our defence posture matters; it is part of our national identity. It allows us to sit with authority at the international top table and help shape global events. Other nations and allies look to us; they look to Britain to step forward, and to lead in the air, on land, on the sea and now on the cyber-plane as well. That ambition could be lost in a generation if we do not continue to invest; that capability, and desire to step forward, could be lost.
When we look at the current challenges facing Europe, the middle east and parts of Africa, we see that we are the best in Europe in terms of security, military capability, and intelligence and policing. We have an opportunity to leverage that position of strength as we craft a new post-Brexit relationship with our European allies and take a leading role in NATO, but we can only realistically do that with a sensible increase in our defence spending, which includes investment in ships.
Gavin Robinson (Belfast East) (DUP)
The Minister is right to say we need to build support not only across this Chamber among Members who are not present, but from across the nation, about the imperative benefits associated with investment in defence. I hope the Minister agrees that one of the ways to do that is by injecting a sense of national pride in our defence industry: by increasing the connectivity between our yards and our people, and between our people and their representatives. In Harland and Wolff in east Belfast that is exactly what we expect. It wants to be part of this investment and of this country’s defence infrastructure, and it looks forward to playing its part and building its support locally.
Mr Ellwood
During my time as a Member of Parliament I have seen a change in the posture of the Royal Navy that we can all be proud of. What is the Type 45? It is the best in its class. What is the Type 26? It will be the best in its class. What is the Type 31? It is a change in approach to modular design, which will be exactly what we need for export. This is what Britain is doing. We invented the aircraft carrier; we were the ones who first put that concept together. That innovation that is inherent in our DNA is what is allowing us to do exactly what the hon. Gentleman says.
Chris Stephens
I thank the Minister for promoting modular build in the UK. If modular build is good enough for the Type 31 frigate, surely it is good enough for fleet support ships, which could be built in the UK on the same basis.
Mr Ellwood
I have hinted that I will come to that in a second, but there is a distinction between fleet support ships that employ civilians and Royal Navy ships that employ Royal Navy personnel. There is a distinction between the two from a security perspective.
Going back to the point about value for money for the taxpayer, the Defence Secretary, the Procurement Minister and I all want to ensure that we are able to utilise the advanced skill sets in our defence industry across the UK, but the bottom line has to be value for money. Let us take as an example the ships that were recently purchased in Korea. The price was half the British value. Is the hon. Member for Llanelli saying that she would pay double the price for the same auxiliary support ships?
Nia Griffith
The Minister needs to take into consideration the fact that something like 36% of that spend would immediately come back to the Treasury in taxation. There would also be a knock-on effect for all the small businesses that would benefit from that money being spent out into the local economy. We would also have to take into account the cost of social security if those people were unemployed, as well as the disastrous cost of losing our shipbuilding industry altogether. Does he recognise that if we do not invest now to create a drum beat of orders, we could see the shipbuilding industry going the same way that the Tories let the coalmining industry go?
Mr Ellwood
Now we really are seeing the difference between us, if the hon. Lady is comparing this situation with the coalmining industry. Is that where this debate is going? I certainly hope not.
Several hon. Members rose—
Mr Ellwood
I am suddenly very popular, but may I just finish answering that point? Then perhaps we can go round houses.
This is a serious point. The hon. Lady did not answer the question on whether she would endorse purchasing a British-built ship that cost twice the amount as one built elsewhere. I hear what she says about the knock-on impacts for small and medium-sized businesses and so on, but a third of the money being spent comes back to Britain anyway. That is part of the contract that has been secured by the Procurement Minister. So in fact, we are already doing as she says, but taxpayers are paying half the price that they would have been paying had we purchased something from Britain. That is the situation that we face, and without wishing to sound too political, that is the difference between us on the Government Benches, who want to be fiscally responsible with taxpayers’ money, and those who simply want to pay for anything. I absolutely want it to be British, but we have to have value for money. Also, it is wrong to suggest that there is no shipbuilding capacity coming through. I have just mentioned the aircraft carrier, the Type 26 and the Type 45, in which there is continuing interest, and we also have the Type 31 and the offshore patrol vessels that are coming through. So there is plenty out there to keep our capability alive and busy.
Several hon. Members rose—
Mr Ellwood
There is so much choice that I do not know where to start. Let us go with the right hon. Member for Warley (John Spellar).
John Spellar
Will the Minister confirm that the Korean shipbuilder that took this contract, DSME, underbid and actually lost significant sums of money on the contract? It was not a fair contract, and because of its general business practices, it came very close to going bankrupt and had to be bailed out.
Mr Ellwood
I am glad that the right hon. Gentleman put it like that, because I was worried that he was going to say that state aid had been involved. I am sure that he would not suggest that that was the case, because I know him better than that, even though that was hinted at by those on his Front Bench. That was the commercial decision that the company took, but we are left in a situation where Britain is getting value for the taxpayer’s money.
Mr Kevan Jones
The Minister is talking complete and utter nonsense. On the military afloat reach and sustainability contract, there was no UK bid, and the reason for that was that the industry was told that the contract was going abroad. As my right hon. Friend the Member for Warley has just said, the Korean bid was underbid and basically bankrolled by the South Korean Government.
Mr Ellwood
The right hon. Gentleman sits down and folds his arms, but there was a UK bid.
Mr Ellwood
I would like to move on, so I am going to make some progress and perhaps invite the Minister responsible for procurement, who will be concluding the debate, to go into the detail of the bid. If Labour is taking a position of only taking British offers and not looking abroad, it is not taking taxpayer value for money into consideration.
Leo Docherty (Aldershot) (Con)
Does the Minister agree that the picture painted by Labour Members is rather inaccurate? Due to the remarkable scale of investment, not least in our new Type 26 fleet, the picture is one of extraordinary investment activity, so to portray the industry as being on its knees is, frankly, a gross mischaracterisation.
Mr Ellwood
I am grateful to my hon. Friend, but I want to move on to the second question that I posed, which is how we can best meet the ambition of optimising our industry’s capabilities while spending taxpayers’ money wisely.
The UK is a world leader in the defence sector. In 2016, the UK defence sector had a turnover of £23 billion, £5.9 billion of which was export orders. The MOD is the sector’s most important customer, spending £18.7 billion with the UK industry and directly supporting 123,000 jobs in every part of the UK. Indeed, my hon. Friend the Member for Ludlow (Mr Dunne), in his report that was published on Monday, shines further light on the important contribution that defence makes UK prosperity, and I pay credit to him for his work. The report shows that there is more that we can do, which should be welcomed by both sides of the House.
Leo Docherty
I am grateful for that compliment. The Minister is describing an interesting picture. Does he agree that aviation and aerospace are an important part of that picture? Does he also agree that activities in and around Farnborough, including the international airshow, are vital? Will he confirm that he will be attending the airshow next week? If he is not, I will happily arrange that for him.
Mr Ellwood
We have wandered away from ships a little, but my hon. Friend is right. I pay tribute to the RAF for its event yesterday, and for what it has done and continues to do. The Royal International Air Tattoo starts at RAF Fairford on Friday, and we have the Farnborough airshow next week, where we will be launching our air strategy, based on the same principles as for shipping, which will be exciting.
Returning to ships and the role of the maritime sector, we should remind ourselves of the significant changes to the Royal Navy fleet. We have two incredible aircraft carriers coming into service, a new generation of Dreadnought-class submarines, the Type 45 destroyers—the most advanced in the world—and the new Type 26 global combat ships. We also have the Type 31e frigates—e for export—which have deliberately been designed with a modular concept. Depending on the export need, which could be interdiction, surface support or humanitarian purposes, its parts can be interchanged simply to adapt to the local requirement. This is an exciting time, and all the ships will be built in the United Kingdom.[Official Report, 24 July 2018, Vol. 645, c. 7MC.]
To achieve our ambitions, we need a strong shipbuilding industry as part of the wider maritime sector. As the Opposition spokeswoman said, more than 100,000 people work in this country’s maritime and marine sectors, including in the shipyards that supply parts and support equipment to keep the great industry alive.
Mr Ellwood
I will, but I need to make progress, as other people want to speak and there may be something else that we all want to go to later.
Mr Sweeney
The Minister refers to shipyards. He might be aware that a deal was done in 2013 so that, in return for closing down operations in Portsmouth, capital investment would be made on the Clyde to make it a world-class centre of shipbuilding expertise, but that deal was never followed through with. He talks about creating a world-class industry, so why has he failed to follow through on the investment proposals that would make the Clyde world class and restore that capability?
Mr Ellwood
We are investing both in the Clyde and in Portsmouth. Looking back over the past few decades, let us be honest that although we have world-class shipbuilding capability, efficiency has not been what it could be. Successive Governments could have done better—we put up our hands up to that—which was why it was all the more important to create a shipbuilding strategy. We commissioned John Parker’s report so that we would be able to understand—
Mr Ellwood
I will make some progress, if the hon. Gentleman does not mind, because other Members wish to speak. Let me make some progress and I will give way shortly.
Nia Griffith
Does the Minister recognise that the Parker report very clearly mentions having a “drumbeat” of orders? That is vital to the industry so that we do not lose skills, so that we do not fall behind on R&D and so that we can remain in the game. Does he agree that that is important and that these ships could contribute to that drumbeat of orders?
Mr Ellwood
I do not disagree. I try to be less partisan than others who jump up at the Dispatch Box, and I absolutely agree with the hon. Lady about the importance of that drumbeat of orders, but it should not come at any price. We need to make sure it blends with what is built for the Royal Navy and for the Royal Fleet Auxiliary. We have accepted every single recommendation made by John Parker, and we thank him for his very wise report.
Mr Ellwood
The hon. Gentleman is sitting on the edge of his seat. Obviously I cannot refuse to give way.
Chris Stephens
The Minister is very generous. What did John Parker’s report recommend for how the fleet support ships should be built? I am very curious. Can he tell us what the Parker report says about fleet support ships and the exact page on which it says that?
Mr Ellwood
The Parker report is about our approach to shipbuilding, and it has led to our shipbuilding strategy and our defence industrial strategy.
Mr Ellwood
If I can make some progress, I may actually be able to answer the question.
Mr Dunne
My right hon. Friend has been generous about my report, which was published on Monday, and I am grateful for the other comments about the report by Members on both sides of the House. On page 53 of the report, I refer to the fleet solid support ship and make the point that the fact that we are currently a member of the European Union means that we are precluded from taking advantage of the article 346 exemption to require that ship to be built in the UK. One of my recommendations is that we should take advantage of the opportunity of Brexit to consider the opportunity, after we leave the EU on 29 March 2019, to build UK content into our own procurement rules, which might allow us to change the position, but we cannot do that today.
Mr Ellwood
I suggest that the right hon. Gentleman reads the report by my hon. Friend the Member for Ludlow to understand the full picture. My hon. Friend is correct that EU regulations provide guidance on building those ships. The regulations do not apply to royal naval ships because, from a security perspective, every sovereign nation is allowed to bypass them, but the rules absolutely apply to non-royal naval ships—as in Royal Fleet Auxiliary ships—that employ civilians on board. I encourage hon. Members to read the report before judging what my hon. Friend has just said.
Moving back to what I was saying, we must have an honest debate about what is happening, which is why we need to develop a modern, efficient, productive and competitive marine sector that allows us to build on the work that has been done on the Clyde, in the north, in Belfast, in Barrow, in the north-east, in the north-west and in the south-west of England. We have incredible capability, and I am pleased to see so many hon. Members representing constituencies in those areas in the Chamber today.
Our new shipbuilding strategy sets out exactly how we can achieve such a marine sector. We will continue to build Royal Navy ships only in the UK while encouraging international collaboration in harnessing open competition for other naval ships. Our new framework will ensure that the impact of UK prosperity will be considered as part of our procurement decisions. The 2015 strategic defence and security review created a new security objective: promoting our prosperity. Competition and strategic choice remain at the heart of our approach, but we recognise that there are several different models for working successfully with the industry, and we need to take further steps to bolster that and make the right decisions to enable a strong partnership between the Government and industry.[Official Report, 23 July 2018, Vol. 645, c. 7MC.]
That is part of the whole Government approach, spearheaded by the national industrial strategy, with its mutually reinforcing focus on driving productivity and supporting innovation, which provides a strong and clear policy framework in which industry can invest and grow. Key to that is how defence procurement might build economic value by strengthening UK productivity and industrial capability, including at a local level, and boosting exports sustainably. We recognise that responsible exports are now widely accepted as having a part to play in our wider national defence and prosperity objective. They are considered to be an opportunity, not a burden.
Sir John Parker’s 2016 independent review made a series of recommendations about improvements we can make, and, as I said, I am pleased that we will be accepting all of them. He did place emphasis on the dysfunctional relationships between government and industry. Old ships were retained in service well beyond their service date, with all the attendant high costs, and it is important that that changes. So our new strategy is founded on three pillars. The first is better planning, giving industry greater certainty and predictability. We are providing a 30-year Royal Navy shipbuilding masterplan to guide all future naval shipbuilding decisions, and to document the number and types of ships in which we will invest over the next three decades.
The second pillar is a new approach to design and construction. We want to challenge naval standards and introduce new ones, forcing through advances in design, in new materials such as composites, and in manufacturing methods. Our new carriers are a prime example of that. They are built in blocks, with parts built in different parts of Britain, drawing on the expertise of 10,000 people, and being brought together from centres of excellence from across the country. Thirdly, we want to focus on building exports, where there is an opportunity, as the Type 31 will be the first frigate for export since the 1970s. We know that more sales can cut costs in procurement over time and give us the potential to buy even more cutting-edge ships.[Official Report, 24 July 2018, Vol. 645, c. 8MC.]
For now, for reasons of national security, the shipbuilding strategy sets out that warships will be built and integrated in the UK via competition between UK shipyards. However, for the purposes of shipbuilding only, the national shipbuilding strategy defines warships as destroyers, frigates and aircraft carriers. All other naval ships, including the Royal Fleet Auxiliary ships, as well as other Royal Navy manned ships, such as patrol, mine countermeasures, hydrographic and amphibious ships, will be subject to open competition—that means international competition. That remains where the difference lies between us and the Opposition, but it is the cornerstone of our defence procurement policy. I remind the hon. Member for Llanelli that she talked repeatedly about value for the taxpayer, and it is important we understand that. I hope that there is a compromise whereby where we want to and can, we will utilise British shipbuilding capability, but when it comes in at twice the cost of an overseas opportunity, we will have to be very careful about which decision we make.
Mr Deputy Speaker (Sir Lindsay Hoyle)
Order. The Minister will have to sit down.
Mr Deputy Speaker
Order. I don’t care what the Minister thinks he is doing; I am just telling him what he has to do.
Mr Ellwood
My hon. Friend is absolutely right—that would be considered royal naval class, so not manned by the Royal Fleet Auxiliary.
It is important that, as we move forward, we look closely at value for taxpayers’ money.
Mary Glindon (North Tyneside) (Lab)
The GMB commissioned a Survation survey that found that 74% of people want these ships to be built in this country. Do not public opinion and the pride that people would feel if the ships were built here matter as much as value for money?
Mr Ellwood
I can only say that I hope that 100% of people would like ships to be built in the UK, but I also think that 100% of fiscally responsible people would like value for taxpayers’ money. That is the difference that this debate will illustrate.
Since the strategy was launched in 2017, the Government have worked closely with our partners in industry and made significant progress on our commitments under the shipbuilding strategy, not least through our continued investment in five River class offshore patrol vessels that are being built on the Clyde. Those ships have safeguarded industrial capability through a contract worth around £635 million, which is exactly what the shadow Secretary of State wants to see. We must make sure that there is this drumbeat of work, not only so that none of the shipyards face closure, but because it is essential so that we can continue to act when we require ships to be built for the Royal Navy. The first batch of the cutting-edge Type 26 frigates that are being built under the £3.7 billion contract with BAE Systems are also being built on the Clyde.
Mr Sweeney
The Minister mentions the River class batch 2, which was primarily designed to maintain production at Govan shipyard until the Type 26 was of sufficient maturity to begin construction. Does he accept that the only reason why Govan shipyard is open today is because a Royal Fleet Auxiliary order for the Wave Ruler was placed there in 1999 to keep the yard open until the Type 45 build could start? The only reason why that yard exists today is because the Government placed that Royal Fleet Auxiliary order with Govan, and that is exactly what we are arguing for today: to maintain these builds in the UK to maintain industrial capability.
Mr Ellwood
The hon. Gentleman sort of makes my point. We need to make sure that we bear in mind not only prosperity and British capability, but value for money for the taxpayer.
The Type 26 will offer a leading anti-submarine warfare capability for its planned 25-year service life, providing critical protection to the continuous at-sea deterrent and maritime task groups. We are currently in dialogue with industry on the strategy’s flagship Type 31 frigate programme, which is worth £1.25 billion for five modern warships. They will be flexible and adaptable in design, as I said earlier, and part of a balanced Royal Navy fleet that will be deployed across operations in support of the UK’s maritime task group.
The shadow Secretary of State mentioned the launch of our fleet solid support ships programme, which is procuring vessels for the Royal Fleet Auxiliary through international competition. They will provide munitions, stores and provisions to support maritime and amphibious-based task groups at sea.
On exports, we are delighted that Australia is considering the Type 26 global combat ship and BAE as the preferred tenderer for its future frigate programme. The consequence of our creating something that other countries want is that further countries have been prompted to look carefully at the Type 26. That is exactly what is happening in our discussions with Canada. This is exactly where we want to go: we want to make sure that we have the capability to build something that we can export, not just something to keep shipyards open. That is critical. The UK’s long-term commitment to the Type 26, which is currently being constructed for the Royal Navy in Glasgow, was an important consideration for Australia in its decision-making process. The fact that we continue to invest in it showed our continued confidence in the Type 26, which we believe is the world’s most advanced, capable and globally deployable anti-submarine warfare frigate.
In conclusion—[Interruption.] I could go on, if Members would like. I hope that the House will join me in recognising the important role that the defence industry plays in helping us to meet our ambitions and commitments, ensuring that we continue to deliver cutting-edge, battle-winning capability for our armed forces for years to come.
Dr Julian Lewis
As an immoveable Defence Committee commitment means that I have to leave this debate for a period, though I hope to catch Mr Deputy Speaker’s eye later on, I would not like the Minister to sit down without knowing how much we on both sides of this House appreciate that he has been prepared to speak out as strongly as he has in favour of an increase in the defence budget. I hope that he will continue to press the Opposition to operate on a bipartisan basis in this way, because if we want to invest to keep shipyards open that might otherwise close, surely the logic is that the defence budget must increase.
Mr Ellwood
My right hon. Friend is very kind in his words. May I reciprocate by saying that he has done much work to keep this debate alive? The Defence Secretary is absolutely passionate about this. As I said earlier, we need to share this further, beyond defence colleagues and beyond those who naturally find this important and understand it or indeed who have constituencies that are connected with the armed forces. This is something on which we need to engage with the nation. We need to recognise that it is part of our DNA to be strong, to be firm and to be leaders in Europe and on the international stage itself. I hope that that message is being shared in NATO at the summit now.
Leo Docherty
I am grateful to my right hon. Friend for giving way. Given that, at the NATO summit, President Trump has called on all NATO members to invest 4% of GDP on defence, does my right hon. Friend agree that 3% from the United Kingdom is the very least that we should be investing in our national security?
Mr Ellwood
Before wandering too far down that road, let me say that this is just too important for us to play a guessing game and try to thump out numbers of GDP advancement. Other Departments will just turn around and say, “Well, I want a bit more of that for my Department as well.” We must make the case; we must spell out exactly what the money would be spent on, what savings would be made and what efficiencies we can provide inside defence itself. Therefore, whether the figure is 4%, 3% or 2.5%, the purpose of the defence modernisation programme is to give us the detail on what we need to do for our air, land and sea; what we need to do to upgrade in all phases of war; what we need to do in the new areas of complex weapons, cyber-security and protection of space for fear of hollowing out our conventional capability.
In conclusion, this Government have a responsibility to obtain the right capabilities for our armed forces. However, as a customer, we must ensure that this represents value for money for the taxpayer. Competition is at the heart of our approach. Our shipbuilding strategy is a pathfinder and exemplifies many aspects of our approach, set out in the Government’s policy framework, which includes an ambition to transform the procurement of naval ships; the importance of making the UK’s maritime industry more competitive; investment in the Royal Navy fleet; a commitment to exports; and a plan to boost innovation, skills, jobs and productivity across the UK.
We are rightly proud of all those who serve our country. We have a duty to look after them and protect them. That includes procuring the best possible equipment, which allows us to remain a tier 1 nation, leverage our industrial capacity and produce cutting-edge equipment for us and for us to export.
Wayne David (Caerphilly) (Lab)
On a point of order, Mr Deputy Speaker. Earlier, the Minister was adamant that there had been a British bid for the MARS tanker contract. That was not the case, and I wonder whether he would like to correct the record.
Mr Ellwood
Because of the mechanics of the Defence Committee, I, rather than the Under-Secretary of State for Defence, my hon. Friend the Member for Aberconwy (Guto Bebb), stepped forward to open this debate. However, defence procurement is his brief, and it would make more sense for him to give a comprehensive reply on this very subject as he is concluding this debate.
Mr Deputy Speaker
The matter is now on the record for it to be picked up—[Interruption.] Hot potatoes!
I now have to announce the result of today’s deferred Division, which was subject to a double majority vote under Standing Order No. 83Q, in respect of the Question relating to the draft Renewables Obligation (Amendment) Order. The Ayes were 299 and the Noes were 211. In respect of the same Question among those Members from qualifying constituencies in England and Wales, the Ayes were 282 and the Noes were 201, so the Ayes have it.
[The Division list is published at the end of today’s debates.]
Stewart Malcolm McDonald
Oh, I am going to come to that. The hon. Gentleman leapt up, but sometimes hon. Members’ interventions are best made from their seats; that might have been one of them.
On whether this is a civilian ship or a warship, my party is in agreement with the shadow Secretary of State. We think that the Government have the wrong definition and we do not believe that they are actually fulfilling their responsibilities as far as the Parker report is concerned. These ships are armed and, as has been mentioned, take part in counter-piracy and counter-narcotics missions.
I want to read a quote from the Under-Secretary of State, the hon. Member for Aberconwy (Guto Bebb), who is responsible for procurement. He said in a written answer on 27 April this year:
“The programme to deliver the Royal Fleet Auxiliary (RFA) Fleet Solid Support ships is in the Assessment Phase. We expect that the ships will be provided with a limited range of weapons and sensors for self-protection, most likely to include small arms, and close range guns such as Phalanx. The exact equipment provision has not yet been finalised but will remain consistent with the defensive measures provided to RFA vessels.”
On that definition, the Minister who has just spoken is getting it wrong.
Mr Ellwood
May I invite the hon. Gentleman to visit a Royal Fleet Auxiliary ship to see the self-defence assets that are on board? That is allowed by law, given that civilians are working there. They are allowed to have a certain accommodation of capability, as he has just rolled out. That does not make such a vessel a royal naval warship or one that is doing any kinetic operations.
Stewart Malcolm McDonald
The Minister is free to invite me. Indeed, I look forward to getting a suggested date and time.
I am not the only one who is picking a fight with the Government over this; I am joined by all the Opposition parties in the Chamber today, the shipbuilders who will be producing these ships when the order finally comes through and the trade union movement that supports them.
Kevin Foster
I thank the right hon. Gentleman for his intervention. Sadly for him, if he had waited until I got to a later part of my speech, he would have heard me talk about the Republic of Ireland, which is building naval ships at the Appledore shipyard in North Devon. He asked me to name one country in the world, and he has got one: the Republic of Ireland. I do not think I will take another intervention if knowledge is so limited that even our closest neighbour is not known about.
Mr Ellwood
I just want to make a technical point. One reason why we are in this situation is that the Royal Fleet Auxiliary, as I mentioned, is made up of civilians. Most nations that have advanced naval capability have support vessels that are part of their naval fleet; it is for sovereign capability that those ships are built in that way. They do not have even the freedom to offer that elsewhere.
Kevin Foster
I thank the Minister for his intervention.
The part of the motion I have sympathy with is about ensuring that when we engage in procurement exercises the criteria take into account the wider benefits of using particular contractors. One of the things I am slightly concerned about is the idea that buying from the UK is something we are only going to do if we have a protectionist policy in place. As is shown by the example I have just been able to give of Babcock building ships for the Irish navy, our industry is perfectly capable of winning contracts in the international market. That is because of the quality of the teams, the quality of the product and the cutting-edge nature of some our technology. The recent Australian navy contract won by BAE, which has already been mentioned, will see the export of our knowledge and expertise—many small and medium-sized enterprises in the UK will get jobs and contracts out of that decision—and it is a sign of the quality we can offer.
It is almost doing down our industry if we stand up in the House and say to its potential international customers that the only reason we would want to buy from it is if we were required to do so, because that is simply not the case. Our industry has moved on hugely, and it is a cutting-edge and competitive one. It is disappointing that more Members have not got up and said that in this debate. I must say that Members on both sides of the House have implied there would be a massive cost to buying here in the UK, whereas we can actually win contracts overseas.
For me, it is clear that our industry can go out and compete properly for work, based on criteria that take into account the wider benefit of delivering a particular contract in a UK yard. I want to see these ships built in the UK and I want a yard to win that contract. I want us to be able to go out and say to our international competitors that that was done because our shipbuilding industry put in a good bid, at a good price, and could deliver exactly the right product and one that they would want as well. Let us be candid: if global Britain is about saying, “We want to sell everything to you, but there is no way we’re going to buy anything in return,” it will not be particularly successful.
In every trade deal we sign, we should rightly look to include protections against subsidy or state aid. In the same way that we would look to stop the dumping of steel via tariffs, we should make sure that a procurement contract deals with any nation wanting to subsidise it with a view to having an unfair competitive advantage. Again, fair criteria would deal with that.
Oral Answers to Questions
Tobias Ellwood Excerpts(6 years, 5 months ago)
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Dame Cheryl Gillan (Chesham and Amersham) (Con)
The Parliamentary Under-Secretary of State for Defence (Mr Tobias Ellwood)
I am sure you will be familiar, Mr Speaker, with the significance of the battle of Solferino in 1859 when it comes to looking after our casualties. Tens of thousands of casualties were left for dead there and that was observed by Jean-Henri Dunant, who went on to form the international Red Cross. Today, we do provide support for those who are injured on the battlefield, but even faster we move them into state-of-the-art hospitals, such as we saw in Helmand province. Some of them end up losing a limb or more, and we need to make sure that we look after these brave veterans for the rest of their lives.
Dame Cheryl Gillan (Chesham and Amersham) (Con)
In 2011, Paul lost his left arm when injured by an improvised explosive device. He wrote about how he did not know how to go forward and did not want to leave the house, but he got everything back that the military offered him: confidence, camaraderie, teamwork and the chance to compete through an inspirational golfing charity, the On Course Foundation. Will the Minister agree to visit that charity and accept an invitation to see the American and British ex-servicemen compete for the Simpson cup, which is named after the founder John Simpson and will be played next year at the Royal & Ancient golf club between 19 and 22 May?
Mr Ellwood
I endorse absolutely the On Course Foundation and what it does. Such organisations and the Invictus games have shown us that there is a new chapter to be had and a new direction for those who have been injured in terms of what they can do through sport. Prince Harry is very involved in that. I would be more than delighted to accept my right hon. Friend’s invitation and I pay tribute to the work that has been done by John Simpson.
Stephen Morgan (Portsmouth South) (Lab)
We know how important it is to link up the armed forces with the NHS, particularly for personnel who have suffered life-changing injuries. What steps has the Minister taken to strengthen those links?
Mr Ellwood
The hon. Gentleman raises an important point. Not only the Ministry of Defence, but other Departments have a responsibility in this regard. That is why we have set up the veterans board, but for those who have lost limbs or who have had severe injuries there is integrated personal commissioning for veterans. That makes sure that all the agencies that are required to support and individual through their life provide better access to help our brave veterans.
Grahame Morris (Easington) (Lab)
The Parliamentary Under-Secretary of State for Defence (Mr Tobias Ellwood)
The threats Britain faces are getting complex and more diverse. We are entering a phenomenon of constant confrontation by state and non-state actors. We are not at war but we are not at peace. If we are to continue to play a role on the international stage, we need to advance our defence posture, which involves investing in our three services and at all ranks.
Grahame Morris
I thank the Minister for that reply, but my question was really about the retention of skilled personnel. Like many right hon. and hon. Members, I was proud to attend the armed forces celebrations in my constituency, where I chatted to a number of former and current service personnel about the consequences of accelerated promotion within the armed forces. I am told that service personnel are being pushed through the ranks to cover gaps created by a retention crisis, which in turn is placing other pressures on recruitment. What is the average length of service today compared with what it was 10 years ago?
Mr Ellwood
First, let me join the hon. Gentleman in paying tribute to Armed Forces Day, which is growing in status. It is important that we strengthen the bond between society and the armed forces, as it is from society that we recruit. The challenge we face is in recruiting people—we need to recruit 18, 19 and 20-year-olds who are fit and able then to meet the criteria.
Robert Courts (Witney) (Con)
The quality of service housing and the cost of private sector housing around RAF Brize Norton in west Oxfordshire are major factors affecting retention. What are Ministers doing to address those two factors?
Mr Ellwood
I have visited Brize Norton—I was trying to weave that into the end of my answer to the hon. Member for Easington (Grahame Morris)—and with the future accommodation model, we are trying to provide greater opportunity for those who want to live on the base, rent accommodation or, indeed, live outside and get on the housing ladder. I hope that that will lead to greater retention and recruitment.
Mr Stephen Hepburn (Jarrow) (Lab)
I acknowledge Ministers’ work to retain knowledge and skill in the ranks of our defence forces; it is just a pity that they do not apply the same effort to our defence industry, instead of giving a billion-pound taxpayers’ order to improve skills and jobs in Germany, Italy and the Netherlands.
Mr Ellwood
As I said, the art of war is changing, and we need to diversify, which means recruiting a wider range of skillsets. Not everybody can come up through the ranks with all the capabilities that we need. We need to be cleverer at inviting people in at a higher rank, which is part of our enterprise approach to bringing in skillsets from civilian street at a much higher level.
Michael Fabricant (Lichfield) (Con)
One factor that affects retention is esprit de corps. The Royal Marines have a unique training system whereby officers and those of other ranks train together on their core programme. What consideration has my right hon. Friend given to other branches of the armed forces doing that?
Mr Ellwood
I have visited Lympstone and the operation there is fantastic for recruiting some of the brightest, the best and the fittest. My hon. Friend puts a question for my right hon. Friend the Minister for the Armed Forces, who I am sure would be delighted to have a cup of tea with him in the Tea Room.
Stewart Malcolm McDonald
Thank you very much, Mr Speaker.
An unfortunate aspect of the modernising defence programme debate is that we focus so much on kit and platforms and not enough on our real deterrent: the men and women of the armed forces. When the document eventually sees the light of day, will the Minister confirm at the Dispatch Box that it will allow the Ministry of Defence to lift the 1% pay cap?
Mr Ellwood
The lifting of the 1% pay cap has already advanced because the Chief Secretary to the Treasury liberated that ceiling last year when she made her statement. My right hon. Friend the Secretary of State for Defence is pushing forward with the MDP. The hon. Gentleman is absolutely right to say that this is not just about equipment and training; it is about the people. It is the people who make our armed forces the most professional in the world.
Stewart Malcolm McDonald
Thinking of the defence community in the round, which is of course the Minister’s brief, perhaps he can tell us why the Government are pressing ahead with the privatisation of the defence fire and rescue service. It is another windfall for the cowboys at Capita, despite the fact that the Ministry of Defence’s internal documents have given it the highest possible risk assessment. Why on earth is he going ahead with it?
Mr Ellwood
I made a full statement to the House on this issue. Capita won the contract fairly and squarely. This is not the first time that the private sector has been used. A number of airfields already have a set up in place. We need to make sure that we provide the best safety for airfields, and I think that Capita will be able to provide that.
Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)
Bill Grant (Ayr, Carrick and Cumnock) (Con)
The Parliamentary Under-Secretary of State for Defence (Mr Tobias Ellwood)
One third of us will suffer some form of mental health problem during our lifetime, and the same applies to those in the armed forces. It is very important that we challenge the stigma that surrounds mental health and ensure that we equate mental health with physical health. I am therefore pleased that we are moving forward with our mental health and wellbeing strategy, which encourages our service personnel to step up so that we can treat at an early stage.
Chris Davies
I am sure that my right hon. Friend values the work carried out by the charity sector in this field, with organisations such as Combat Stress, Change Step and Care after Combat conducting vital work in support of military veterans. Will the Government therefore consider funding these charities, or giving them further funding, so that they are able to do more?
Mr Ellwood
My hon. Friend gives me licence to thank all the service-facing charities for their work—there are more than 400 of them. I have had the honour of visiting Veterans’ Gateway, which is a simple online portal that brings together organisations, giving those who seek help one place to go to for support. My hon. Friend is absolutely right that we need to ensure that these charities are funded. The MOD does not directly fund them, but we do fund individual projects. I would be more than delighted to meet him to discuss the matter further.
Bill Grant
I am sure that the Minister will agree that it is vital that the UK Government and devolved Administrations work together on this important issue of mental health. Will he assure me that he is working closely with the Scottish and Welsh Governments to ensure that all veterans and service personnel have access to the high-quality mental health support that they so richly deserve, irrespective of where in the United Kingdom they reside?
Mr Ellwood
My hon. Friend is absolutely right. Wherever veterans are in the United Kingdom, we must ensure that every one receives the support that they deserve. That is why the Veterans Board brings together the devolved Administrations, and the MOD health partnership board brings together the health specialists from all the devolved nations and England.
John Howell (Henley) (Con)
Chris Ruane (Vale of Clwyd) (Lab)
The Parliamentary Under-Secretary of State for Defence (Mr Tobias Ellwood)
The future of the Prestatyn is yet to be finalised. The hon. Gentleman will be aware that the Royal Electrical and Mechanical Engineers regiment is doing a reorganisation of its assets. This is part of the rationalisation of real estate. However, there are no further announcements to be made at the moment.
Chris Ruane
There has been an armed forces footprint in the Vale of Clwyd for over 100 years. I am opposed to 119 Recovery Company leaving Prestatyn and the disposal of that site. Will the Minister and his Department consult local stakeholders, including the town council, the county council and, especially, the Royal British Legion, before they make their decision?
Mr Ellwood
Well, HQ 160st Infantry Brigade and 38 (Irish) Brigade will continue to have a footprint in the area. I would be more than delighted to meet the hon. Gentleman to discuss this. I am always happy to meet any colleagues to discuss the real estate challenges that we face in any particular constituency.
Afzal Khan (Manchester, Gorton) (Lab)
The Parliamentary Under-Secretary of State for Defence (Mr Tobias Ellwood)
It took far too long for the contract to be awarded—I made that very clear during a statement a couple of weeks ago. However, I stand by what I said: it is important that we look after our airfields and get a good deal, which will be provided by Capita.
Jeremy Quin (Horsham) (Con)
Eddie Hughes (Walsall North) (Con)
Mr Ellwood
It was my honour to visit the Veterans’ Gateway last week. This is an incredible portal that allows the 400 or so service-facing charities to provide access for those who need help. I very much hope that this will advance and that more charities will join in and support it.
Dr Julian Lewis (New Forest East) (Con)
Does the Secretary of State accept that existing black hole in the defence equipment budget cannot be filled by the small annual increase in that budget?
Rachael Maskell (York Central) (Lab/Co-op)
The Reserve Forces and Cadets Associations want to dispose of Duncombe barracks in York. Will the Ministry of Defence ensure that they work with City of York Council and use the principles of One Public Estate, so that the land is developed in the housing interests of the city, rather than that of developers?
Mr Ellwood
The cadet programme is one of the huge success stories in Britain, with over 400 cadet units operating throughout the country. I join with the hon. Lady in paying tribute to what they do to advance an interest in the armed forces and the education of our young.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
I thank my right hon. Friend the Secretary of State for his personal support for the Year of Engineering and for all his Department is doing to create inspirational and exciting experiences that demonstrate what it is to be an engineer in the military. Will he pass on my thanks to all those involved in making that happen?
Armed Forces Veterans
Tobias Ellwood Excerpts(6 years, 5 months ago)
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The Parliamentary Under-Secretary of State for Defence (Mr Tobias Ellwood)
May I begin with a declaration of interest as a colonel in the reserves?
As is customary on these occasions, I congratulate my hon. Friend the Member for North Devon (Peter Heaton-Jones) on securing this important Adjournment debate. May I thank him also for an absolutely delightful and educational visit to Chivenor? It was a pleasure to go down there to see the Marines and the activities that are going on and also to understand what is happening as we rationalise the real estate of the armed forces. I am grateful for his interest in that matter. I am also thankful that he has drawn the House’s attention to this important issue of mental health and to the support for veterans, too.
My hon. Friend mentioned his grandfather. He tells a tale of a 15-year-old who wanted to serve King and country and to lie on the sign-up sheets. That was repeated across the country. Massive tribute should be paid to the dedication, the loyalty, the commitment and the bravery of people stepping out into the unknown, unsure of what to do, but knowing also that it was the right thing to do. I pay huge tribute to his grandfather. I know that his action was repeated up and down the country.
My hon. Friend also mentioned Armed Forces Day. This debate is absolutely timely, as we celebrate, mark and reflect on the role that the armed forces play in our society. The bond between our armed forces and society is critical. We recruit from society. That is our gene pool, and it is where we want to attract people from, so that we have an armed force by consent of the nation. Therefore, that relationship that we have is absolutely pivotal if we want to keep the professionalism of our armed forces, which are revered and respected across the world.
I am pleased to say that the Secretary of State will be in Llandudno in north Wales, leading the focal point of Armed Forces Day celebrations, which will be repeated up and down the country as we pay our tributes. I see the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) is nodding. Last year, I went to the Armed Forces Day celebrations in his constituency, and they were fantastic.
My hon. Friend also mentioned that these celebrations mark the end of the second world war; they also mark the 100th anniversary of the RAF, so we have another opportunity this weekend to say thanks to those in uniform.
Interestingly, Northern Ireland celebrates its Armed Forces Day a week earlier. Last weekend, I was in Coleraine in Northern Ireland. Having served there myself, may I just say what a pleasure it was to be able to see the bands, the infanteers and those in uniform marching down the high street of Coleraine with the absolute support of the public? It was absolutely gratifying to see that because when I served in Northern Ireland, we could not even move from one place to another unless we were on patrol in uniform. Again, it is an illustration of that important bond between society and our armed forces.
My hon. Friend raises this matter of support for veterans with a focus on mental health and other issues. I was pleased to give evidence this Tuesday at the Defence Committee’s evidence session on armed forces veterans and mental health. This morning, I had the opportunity to speak at the Queen Elizabeth conference centre to the Forces in Mind Trust. This is an important body that helps to provide accurate data on exactly what is going on with our veterans and our armed forces. My hon. Friend mentioned that there are 2.5 million veterans. The profile of our veterans community is likely to change over the next 10 years. It will decrease by about 1 million because we will very sadly lose those who fought in the second world war.
As we are talking about the honesty and clarity of the data we need, I want to take the opportunity to emphasise up front that life in the armed forces is a rewarding and fantastic experience. The vast majority of personnel serve well, transition well and leave well. The nation has benefited from their service, and continues to benefit from their service once they have packed up their uniform and slid it across to the quartermaster that final time. We benefit because of the unique set of skills that people learn in the armed forces: leadership, teamwork, grit, tenacity, determination and a bit of attitude. Those are skillsets that any employer would want.
The majority of veterans transition back into society without a problem at all. Some 90% of people who have gone through our transition programmes are back in education or employment within six months of leaving the armed forces. When we have debates, it is therefore important that we emphasise this point and try to remove the negative myths about our armed forces that still abound.
One of those myths is that people who serve somehow come out damaged. I am afraid that people have the perception that if someone is wearing a uniform or did wear the uniform, they will somehow be damaged. Lord Ashcroft’s helpful report confirmed that that is absolutely not the case, as everyone who is close to the armed forces knows. If these myths perpetuate and we do not put the challenges in perspective, it can affect the reputation of the whole of the armed forces, it can affect employers who might think of recruiting somebody who was in the armed forces and it gives false perceptions of the experience. Veterans are no more likely to commit suicide, to have post-traumatic stress disorder or to have mental health issues than people in the general population.
That said, we are not complacent. We recognise that there are those who experience difficulties and need help, and we must be there to provide that help. We have brought forward the armed forces covenant to ensure that responsibility, which often goes way beyond the Ministry of Defence into other Government Departments. We want to ensure that those responsible are actually doing the things that they have to do in this regard.
Mary Creagh (Wakefield) (Lab)
The Minister is making an excellent contribution. When I visited Community Awareness Programme in my constituency, people told me about the large number of homeless veterans coming through their doors. The Minister is making a point about the liaison with local authorities and homelessness charities to provide specialist support to veterans who may have mental health needs that have not been addressed. That is very important, as such support can enable them to hold down a home, rebuild their families and enter civvy street again with dignity.
Mr Ellwood
I join the hon. Lady in paying tribute to the charity she mentioned. She makes a valid point, and I will come to the issue of homelessness in a second.
I stress that it is important to treat the issue of mental health with due concern, but we must also put it into perspective when we look at wider society. The issue has stayed in the shadows not just in the armed forces, but across society; there has been a stigma surrounding mental health, and it has become secondary to physical injuries. Yet, we need to recognise that a third of us are likely to be affected by mental health issues at some point in our lives.
If these early mental health issues are not challenged and are left unaddressed, they can effect a downwards spiral that reduces confidence, has an impact on employment, destroys relationships, feeds loneliness and, in extreme cases, leads to homelessness and suicide. That is why we are undertaking a comprehensive overhaul of how we deal with mental health. We launched a new mental health strategy last year that promotes positive mental health and wellbeing—we now speak of it as mental fitness—to ensure that it is on a par with physical fitness. We need to ensure that we prevent people from experiencing the effects of mental health issues to begin with, but also that if they are affected, there is good detection, so that we can recognise and analyse it. With detection comes treatment, and following treatment comes recovery. We need to remove the stigma. We need to change the culture not just in society but in the armed forces, so that it is okay for someone to put their hand up and say that they are suffering from something, or for someone to point out that a friend, spouse and so on has an issue.
Those are the changes we are introducing, to ensure that every captain of a ship, every platoon commander and every individual is aware that it is okay to step forward and that help is available. I am really pleased that the Secretary of State is passionate about that. One of the first things he did in his role was to introduce a 24/7 helpline, working with Combat Stress, to ensure that there is a number to call, with professional help on the other end of the line. That now applies to those in the armed forces and veterans.
We have introduced a wave of measures for veterans. My hon. Friend covered them articulately, but I will touch on them briefly. First, the veterans gateway provides online access to a variety of veterans charities. I join him in paying a huge tribute to the incredible work that more than 400 military-facing charities do to provide those serving in our armed forces and those who have retired with the necessary support. However, if someone is homeless or unemployed, which charity do they turn to? It is important that there is a simple, single online gateway—there is also a telephone line—that gives advice and directs people to the necessary support.
My hon. Friend touched on the veterans board. It is imperative that we co-ordinate the work of Government Departments—whether it is the Department of Health and Social Care, the Department for Education or the Department for Work and Pensions—and the devolved Administrations, because they all have a responsibility. Local government is also critical, and that is where we need to do more work. As has been mentioned, there are fine authorities such as those in Portsmouth and Plymouth that are familiar with the armed forces because they have military assets in their neighbourhood. We need to ensure that every local authority in the country recognises its obligations to the covenant and has an armed forces champion—one senior director who does not necessarily do the work up front but directs all aspects of work to ensure that support is available for veterans. That is new, and we need to work on it.
My hon. Friend touched on the veterans strategy and invited me to say a bit more about it. It will be launched in November and, again, is an initiative of the Defence Secretary. It focuses on four themes: first, looking at perceptions and trying to remove the myths surrounding the challenges that we face; secondly, improving co-ordination between the support that is out there; thirdly, offering a cultural shift in our attitudes towards veterans; and finally, there will be studies on specific areas, including mental health and homelessness, which we know are bigger issues that we need to pay more attention to.
Let me be the first to recognise that while we have done significant work and have some incredible projects coming through, there is an awful lot more to do to sharpen the practical impact of the covenant and ensure that we do our best to provide support for our brave veterans. We are immensely proud of our armed forces, given what they do for the nation. Our commitment to them must go beyond equipping and training them well as they serve, to supporting them after they leave. In society, not just in defence, as we become more comfortable talking about and understanding mental health, everyone can play their part.
In conclusion, as we approach Armed Forces Day, I once again congratulate my hon. Friend on securing this important Adjournment debate. Let us further encourage people to think differently about our ex-service personnel. Whether as former soldiers, sailors or air personnel, reservists or MPs representing our proud and patriotic constituents, we all have a role in making this happen. We all know what our veterans have done in the past for our country, but we also know that they still have lots to give our nation in the future. We need to make sure that we put our considerable energies together to get that message out there.
Question put and agreed to.
Defence
Tobias Ellwood Excerpts(6 years, 5 months ago)
Ministerial CorrectionsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Fabian Hamilton (Leeds North East) (Lab)
(Urgent Question): To ask the Secretary of State for Defence if he will make a statement on the awarding of the defence fire and rescue contract to Capita.
The Parliamentary Under-Secretary of State for Defence (Mr Tobias Ellwood)
I am grateful for the opportunity to put on record the justification for the awarding of the contract. The defence fire and rescue project has been examining potential improvements in how fire and rescue services are provided to the Ministry of Defence, both here in the United Kingdom and overseas. The total value of defence fire and rescue operations is around £1.3 billion. We intend to award a 12-year contract worth around £400 million to Capita Business Services Ltd. However, this is open to possible challenges—the normal process ensues—following the issuing of the contract award decision notice and possible parliamentary challenges to the contingent liability.
[Official Report, 21 June 2018, Vol. 643, c. 467.]
Letter of correction from Mr Tobias Ellwood.
An error has been identified in my answer to the urgent question on Defence Fire and Rescue Project: Capita.
The correct response should have been:
The Parliamentary Under-Secretary of State for Defence (Mr Tobias Ellwood)
I am grateful for the opportunity to put on record the justification for the awarding of the contract. The defence fire and rescue project has been examining potential improvements in how fire and rescue services are provided to the Ministry of Defence, both here in the United Kingdom and overseas. The total value of defence fire and rescue operations is around £1.3 billion. We intend to award a 12-year contract worth around £550 million to Capita Business Services Ltd. However, this is open to possible challenges—the normal process ensues—following the issuing of the contract award decision notice and possible parliamentary challenges to the contingent liability.
Defence Fire and Rescue Project: Capita
Tobias Ellwood Excerpts(6 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Fabian Hamilton (Leeds North East) (Lab)
(Urgent Question): To ask the Secretary of State for Defence if he will make a statement on the awarding of the defence fire and rescue contract to Capita.
The Parliamentary Under-Secretary of State for Defence (Mr Tobias Ellwood)
I am grateful for the opportunity to put on record the justification for the awarding of the contract. The defence fire and rescue project has been examining potential improvements in how fire and rescue services are provided to the Ministry of Defence, both here in the United Kingdom and overseas. The total value of defence fire and rescue operations is around £1.3 billion. We intend to award a 12-year contract worth around £400 million to Capita Business Services Ltd. However, this is open to possible challenges—the normal process ensues—following the issuing of the contract award decision notice and possible parliamentary challenges to the contingent liability.[Official Report, 25 June 2018, Vol. 643, c. 4MC.]
The contract will deliver improvements in the safety of military and civilian firefighter personnel, and improvements in the equipment and training available to them. It will deliver savings that will be reinvested into the defence budget while sustaining our ability to support operations around the world and to support local authority fire services, should that be required at times of heightened national need. In doing so, it will ensure that our personnel, airfields and strategic assets worldwide continue to be protected from the risk of fire.
I assure Parliament that the proposed contractual arrangements have been subject to the fullest range of testing and scrutiny across Government to ensure that the services will be delivered in a sustainable and resilient manner. Safeguards are in place to ensure that there is no break in service provision. Capita is a strategic supplier to the Government, and the Cabinet Office maintains regular engagement with the company, as with all strategic suppliers.
Fire risk management will remain a defence responsibility after the award of the contract. In no circumstances will there be any compromise to our personnel’s safety. Over the course of the bidding for the contract, Capita’s financial status has been analysed by the MOD’s cost-assurance and analysis service, and we have in place the necessary contingency plans to ensure that the contract is managed accordingly. We will actively manage the contract to provide early warning of any performance concerns so that they can be addressed thoroughly.
Following a competitive bidding process, Capita’s bid was deemed to deliver the best technical solution and the best value for money for defence. Robust evaluation and modelling processes were undertaken to test the deliverability of the proposed contracts to ensure that all risks were identified. As well as the full assessment of the proposal, we have a contract that clearly defines the obligations for the contractor. A performance mechanism has been developed to make sure that Capita is incentivised to ensure that delivery targets are clearly defined.
I should be clear that this is not the first time that contractors have been used in this way—several sites, including Porton Down, are already using contractor fire service capability. In addition to offering significant financial savings that can be reinvested in defence, the project aims for the delivery of sustainable and agile defence fire and rescue services that meet the requirement without compromise.
Fabian Hamilton
I am extremely grateful to you, Mr Speaker, for granting this urgent question. I was very eager to hear the Minister’s justification for awarding such a crucial contract for the defence fire and rescue service to Capita.
I think that we would all agree that it would be extremely worrying if a situation were to arise whereby this contract could not be delivered or was not delivered to the standard required. The risks, I am sure the Minister agrees, are simply too great for that to be allowed to happen.
The Minister’s Department received advice as recently as 7 June that Capita represents a 10-out-of-10 risk, so how was the decision made to give the contract to Capita? The Minister has already touched on that. His Department has said that all its suppliers are
“subject to robust assessments ahead of any contract placement.”
What consideration, if any, was given to the advice that the Ministry of Defence has received on the financial health of the company?
We know that Capita has a record of poor performance for delivering Ministry of Defence contracts. It was stripped of the defence estate contract, and the less said about its Army recruitment contract the better. In spite of that, the Government have knowingly chosen to give Capita another contract. What specific measures has the Department put in place to monitor the delivery of the contract and to take penalty action for poor performance, if necessary?
The Government’s written statement told us that
“the contract duration is 12 years”,
which is a considerable amount of time for a company associated with extremely high risk. The fire service is vital to the safety of our armed forces, to their families and to key defence assets. Will the Minister tell us what arrangements will be in place if Capita is unable to deliver the contract for its full duration?
A number of defence fire workers will be very worried indeed about this news. The significance of the workforce, and their role in protecting MOD staff and families, and the Department’s infrastructure—both overseas and at home—cannot be overstated. What assurances can the Minister give us about the future of these workers and their pensions? What help will be provided for them if redundancies do occur?
Is it not time to accept that this Government’s ideologically driven approach to outsourcing public services at any cost has simply failed? We must end the racket of outsourcing and deliver solutions that benefit taxpayers and service users alike.
Mr Ellwood
I am grateful to the hon. Gentleman for his questions. I appreciate his interest in, and concern about, these important matters. If I may, I will probably write to him in more detail, because he set out a series of questions, but I will give him an overview now to reassure him that the bidding process was absolutely robust.
I did go to some length in my opening remarks to reassure the hon. Gentleman that we were looking at a number of companies—Serco, Babcock and QinetiQ, as well as an in-house offering—to ensure that we have a robust system that meets our responsibility to eliminate any problem related to fire. The actual bid process itself was competitive. There was robust evaluation modelling—it involved not just the MOD, but the Treasury, the Cabinet Office and indeed the three services—to make sure that we have the necessary processes in place to manage what will be an umbrella organisation.
As the hon. Gentleman knows, the way in which our fire service is conducted means that we have responsibility inside the wire. There is also civil capability, and RAF and naval personnel are cap badged to provide fire capability, too. We also lean occasionally, when required, on local authorities, and that relationship will continue, but overall control will come from Capita itself. Having said that, the actual responsibility will be managed by the Defence Fire Risk Management Organisation, which, as I have said, will continue to scrutinise the performance of Capita itself.
The hon. Gentleman is right to raise concerns about the workers themselves. Just under 600 civilian workers will be transferred across. I absolutely hope that this will not lead to any changes. If there are any, I hope that they will be done through redundancies. We are looking for investment in new machines, new technology, new capability and new safety measures, which will hopefully be welcomed by Members on both sides of the House.
Sir Desmond Swayne (New Forest West) (Con)
The Minister said that personnel would be safer; will he explain how?
Mr Ellwood
Short and to the point, as ever. As I just mentioned, there will be investment in new technology—we need investment in new fire service vehicles—as well as training methods, collaboration and response times so that we can respond to any fire at any time. These changes will make the work of the fire service personnel safer.
Brendan O'Hara (Argyll and Bute) (SNP)
Scottish National party Members have always been very concerned that these vital services were ever thought appropriate for privatisation. Our added concern is that the protection of national and defence strategic assets has been given to a company with such a chequered past. Indeed, on the day of the announcement, Capita’s chief executive was appearing before the Public Accounts Committee to answer questions about the company’s poor delivery of services to the NHS. Will the Minister therefore explain why the Government felt the need to privatise these services, when not even the US Department of Defence does, and how a company with such obvious shortcomings could be considered the best option for delivering this contract?
Mr Ellwood
I can only repeat what I said earlier: there was a robust bidding process and it was deemed that Capita offered the greatest contract we could have. Concerns have been raised about Capita in other areas—recruitment, for example, has been mentioned—but I am convinced that the necessary scrutiny is in place to provide the best deal and the necessary support for our fire service.
Rachel Maclean (Redditch) (Con)
Will the Minister say a bit more about the savings he talked about being reinvested in defence, which I am sure most of us in the House would be very glad to see?
Mr Ellwood
I am grateful for that question, although it almost tempts me down a rabbit hole that I have occasionally gone down before. While I support the increase in the budget for the health service, I must reiterate that the UK’s defence posture is such that we must invest in our armed forces as well. Having said that, there is an obligation—a requirement; a duty—on the armed forces and the MOD to make efficiencies and savings, without affecting risk, and this is one area where we can do that and reinvest the savings in defence.
Ruth Smeeth (Stoke-on-Trent North) (Lab)
We have had 12 years of debate about what should happen to the contract—12 years of uncertainty for the workforce—and now we have a 12-year contract. It seems to me and the unions that key parts of the work currently delivered by the defence fire and rescue service, such as the checking of fire extinguishers on site, are not included in the contract. Capita does nothing for nothing, so this will not save money. What is the Minister doing to ensure this provides value for money?
Mr Ellwood
The hon. Lady follows these issues very closely, and I pay tribute to her for her interest and expertise in this matter, which the House greatly appreciates. I agree that, for various reasons, this has taken too long. The contract process was run in accordance with the Defence and Security Public Contracts Regulations 2011, but it has taken too long for various reasons, some of which I have covered, including the number of stakeholders that had to scrutinise and agree the bidding process, and confirm the successful bidder. I take her point on board, however, and we will make sure as we do the evaluation that her concerns are met.
Jeremy Quin (Horsham) (Con)
I welcome the fact that safeguards are in place and that the delivery of the contract will be monitored. Will the Minister reconfirm that the contract represents value for money and will also result in improvements and savings to the Department?
Mr Ellwood
My hon. Friend makes an important point. This is not just about savings; it is about the responsibilities of our defence fire service, which not only has the duty of looking after our airfields, ports, ships and bases, but has the responsibility of being on standby to help its civilian counterparts in extreme cases. It is important that we can invest in the necessary high-tech machinery and fire service capability. That is what will lead to savings in the long term.
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
Prospect, the union that represents staff in the MOD fire and rescue service, including in Devonport in my constituency, has said that any projected savings cannot be delivered without increasing the risk to defence. Will the Minister respond to that concern?
Mr Ellwood
I would need more detail even to respond to that very broad statement. The analysis done in the MOD, and the analysis that has been done by the Treasury and the Cabinet, says exactly the opposite. As always, I am happy to discuss the hon. Gentleman’s concerns for Devonport; he did not mention Plymouth this time.
Alex Chalk (Cheltenham) (Con)
Can the Minister provide some assurances about fair terms towards subcontractors? BST Electrical in my constituency fell victim to the Carillion scandal because of Carillion’s obscene 120-day payment terms. Will the Minister assure me that that sort of invidious practice will not continue under Capita?
Mr Ellwood
My hon. Friend’s question gives me licence to confirm that the shadow of Carillion hangs heavy over all Government Departments, if we are fair. Any new contract—with Capita or anyone else—needs to be sufficiently robust that we do not fall foul of some of the problems that Carillion experienced, including through its relationship with small and medium-sized enterprises, which my hon. Friend mentions.
Tom Brake (Carshalton and Wallington) (LD)
There is a case for outsourcing when the company has specialist expertise. What specialist expertise does Capita have in military fire services? Does the Minister think that it is now time for freedom of information legislation to apply to companies that are, in effect, doing public sector work, so that we can know, for instance, what contingency plans there might be in case Capita goes belly up?
Mr Ellwood
May I welcome the fact that the right hon. Gentleman’s party—if he is speaking on its behalf—recognises the importance of the private sector in such cases? However, as the hon. Member for Leeds North East (Fabian Hamilton) said, this should not apply at any cost or under any circumstances. A series of Governments—not just Conservative or coalition, but also Labour—have outsourced responsibility for firefighting from the armed forces over the past few decades, so it is very important that the necessary robust processes are in place to ensure that these contracts are met. We have around 60 contracts with Capita. Its responsibility is not to run the day-to-day things. Many people providing the fire service capability will continue on. This is about the management and organisation that Capita brings.
Mr Philip Hollobone (Kettering) (Con)
How many alternative bids were there, and was Capita’s bid the cheapest?
Jim Shannon (Strangford) (DUP)
Given the fact that this company has earned the highest risk rating of 10 out of 10 and, worryingly, a health score of three out of 100, how will the Minister convince the House that this is not a case of penny wise and pound foolish at the expense of our defence fire and rescue service?
Mr Ellwood
As I said in my opening remarks, there was a very robust bidding process, which was scrutinised by a number of Departments. It does not just stop there. We do not simply slide the contract across and call it a day. We will continue to scrutinise the process, and any issues will be raised. I hope that the hon. Gentleman’s concerns will be met.
Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)
It is said that the definition of insanity is doing the same thing multiple times but expecting different results. I think that this may be the case given the absolute failure in Army recruitment, whereby Capita has not met the already woeful threshold of 82,000. What is the Minister doing to grip that issue before rewarding failure again with this fire service contract?
Mr Ellwood
We are wandering into a very different subject, which is related to this matter only because of the company involved. The challenge that we have with recruitment is that the gene pool of people from which we are recruiting is of a particular age group and a particular level of fitness. In this day and age, that is a very competitive environment; it is not just Capita that is going out and doing recruitment. Capita works very closely with all three services. But, yes, it is a tough environment—I do not doubt that—and we need to do more to attract the brightest and best to be in the most professional armed force in the world.
Nick Smith (Blaenau Gwent) (Lab)
Given Capita’s highest risk rating, will the Minister please give us a full list of the MOD’s Capita contracts?
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
A constituent of mine, Mr Rob Rigby, is the national secretary of the Unite branch representing these workers, and I can assure the Minister that the workers are not particularly happy about this announcement. If the contract is going to be such a success, why is the Minister excluding all the bases in Cyprus?
Mr Ellwood
I did not quite hear the end the hon. Gentleman’s question. I think it was to do with the agreement in Cyprus; is that correct?
Gareth Snell
I asked the Minister why he was excluding the bases in Cyprus.
Mr Ellwood
Particular terms and conditions will apply to our overseas bases, and there will be contracts in place. I think that nine airfields are already running under privatised contracts, so the question mark over a particular airfield may be subject to existing arrangements.
Diana Johnson (Kingston upon Hull North) (Lab)
May I try again with the Minister? I do not understand how a company that scores 10 out of 10 for risk in an internal document produced by the MOD can be awarded a contract.
Mr Ellwood
In the bid that was put forward, the expectation that is made here is for managing our fire risk capability, and it is in those circumstances that Capita is being judged. We do not step back and take a look at the numbers and the bits and pieces in other areas; it is particularly for this aspect of it. The concern that the hon. Lady raises must be taken into account by ensuring that there is robust scrutiny of the effectiveness of the contract as it ensues, and I will be happy to come back to the House to report on the success or otherwise of the contract with Capita. I give her that guarantee.
Dr David Drew (Stroud) (Lab/Co-op)
The workforce undertake a complicated pattern of working through their shift arrangements. Will the Minister guarantee that that will not fundamentally change? Many of the workforce travel long distances to work and are on site for days on end. Will he guarantee that that will continue?
Mr Ellwood
I hope that I speak on behalf of the whole House in paying tribute to the incredible bravery, commitment and determination of all our emergency services. There are specific harmony guidelines in place to ensure that they are able to meet their requirements, see their families and do their duties, and I am sure that they will be continued under this new contract.
Contingent Liability
Tobias Ellwood Excerpts(6 years, 6 months ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Defence (Mr Tobias Ellwood)
My right hon. Friend the Minister of State in the House of Lords (The right hon. The Earl Howe PC) has made the following written ministerial statement.
I am today laying a departmental minute to advise that the Ministry of Defence (MOD) has received approval from Her Majesty’s Treasury (HMT) to recognise a new contingent liability which will come into force following the award of the defence fire and rescue project contract.
The defence fire and rescue project contract will provide significantly improved safety for the MOD and its firefighters through investment in modern firefighting vehicles and improved fire risk management systems. It will also deliver significant financial savings which can be reinvested in defence. The selected bidder for this contract is Capita Business Services.
The contract duration is 12 years. The contingent liability will commence on contract award and reach a maximum value of £37 million in financial year 2020-21 and will reduce thereafter as the contract progresses until it ceases in financial year 2025-26. It reflects a commercial arrangement that represents optimum value for money to the Department.
It is usual to allow a period of 14 sitting days prior to accepting a contingent liability, to provide Members of Parliament an opportunity to raise any objections.
[HCWS770]
Oral Answers to Questions
Tobias Ellwood Excerpts(6 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Alex Sobel (Leeds North West) (Lab/Co-op)
Mr Speaker
It is very good to see the Minister. I was in his constituency on Friday speaking to school students, and they spoke of him with great warmth and affection.
Mr Speaker
I am sure that I told the right hon. Gentleman, but if I did not do so, I will be the first to apologise. I am pretty sure I did. Anyway, it was a great joy.
Mr Ellwood
On reflection, Mr Speaker, I think I did receive some message that you were heading there.
We can be extremely proud of our armed forces, but if we are to continue to recruit the brightest and best, we must continue to invest in our equipment and training, but also in the welfare of our people. I am pleased that we are moving forward with the future accommodation model, which will give our armed forces personnel three choices: to remain on the garrison in the unit, inside the wire; to step outside and rent accommodation; or to get on the housing ladder by purchasing property.
Alex Sobel
The Royal United Services Institute criticised the future accommodation model, saying that it was woefully inadequate and behind schedule. Will the super-garrison at Catterick be finished on time, to ensure that armed forces personnel can live on garrison? Does the Minister think that the sale to Annington Homes in 1996 was a mistake?
Mr Ellwood
With due respect, I think that the hon. Gentleman is mixing up a number of issues. The future accommodation model has yet to start, but the pilot scheme is on track to start in December. We have been working closely with the families federations, which have themselves recommended the locations for the pilot schemes. I very much look forward to this work taking place in December.
Edward Argar (Charnwood) (Con)
Recently, concerns have been expressed to me about the quality of grounds and buildings maintenance at armed forces accommodation at Woodhouse in my constituency. The Minister’s commitment to our armed forces personnel is well known and clear. Can he reassure me that the future accommodation model will include high-quality maintenance, and will he meet me to discuss that specific issue?
Mr Ellwood
Accommodation is very important. As I have mentioned, equipment and training are one thing, but we must ensure that we look after our people. The level of accommodation is one of the reasons why armed forces personnel choose to leave, which is why we are investing in more modern accommodation. I would be delighted to meet my hon. Friend to discuss the issue. The Secretary of State and I take very seriously the matter of upgrading the accommodation that we offer our armed forces personnel.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
Thank you, Mr Speaker. The affordability of the future accommodation model relies heavily on the present rent adjustment on the Annington Homes estate. As we know, that is due to be renegotiated for 2021, with expectations that rents will rise significantly. The Tories were warned in 1996 that the sell-off of married quarters was a mistake, and that is exactly how it has transpired. What urgent steps has the Department taken to ensure that the rent renegotiation does not further cripple the MOD budget?
Mr Ellwood
The hon. Gentleman raises a number of matters. I agree with that there is a question mark over what happened in the past, but it did happen, and we now need to move forward to provide the necessary offering for our armed forces personnel. As I mentioned, we are working with the families federations to ensure that we get the deal necessary to make accommodation affordable for our troops.
Christian Matheson (City of Chester) (Lab)
The Parliamentary Under-Secretary of State for Defence (Mr Tobias Ellwood)
I agree with the hon. Gentleman that it has taken too long. I had a briefing on this only last month and we will make progress. I heed the concerns that he raises.
Michelle Donelan (Chippenham) (Con)
Mr Ellwood
My hon. Friend touches on such an important issue: looking after our veterans, in particular those who are homeless or who feel isolated. The Secretary of State moved forward with a 24/7 support helpline and is launching a new veterans strategy, which will be announced in November. It is important that every local council takes responsibility for having an armed forces champion who looks after those who are homeless and identifies what help can be given.
Toby Perkins (Chesterfield) (Lab)
Catherine West (Hornsey and Wood Green) (Lab)
Mr Ellwood
I would be delighted to speak further with the hon. Lady on this matter to see what more can be done.
Mr Mark Francois (Rayleigh and Wickford) (Con)
I warmly endorse the Secretary of State’s tribute to the Chief of the Defence Staff, but Sir Stuart Peach did say last week that he was deeply uncomfortable about the process of legacy investigations into veterans. I understand that several years ago, the Ministry of Defence did a lot of detailed staff work into the practicability of the statute of limitations. Would the Secretary of State promise the House that he will ask to see that work and perhaps be able to take it forward?
Jeff Smith (Manchester, Withington) (Lab)
Mr Ellwood
I am well aware of the campaign not just by the hon. Gentleman, but by others. I am certainly happy to look into it in more detail. He will be aware that there are two components to this—risk and rigour, and avoiding duplication of other medals that have already been given—but I am certainly happy to discuss it further with him outside the Chamber.
Peter Heaton-Jones (North Devon) (Con)
The Minister will be aware that I and the North Devon community have lobbied hard over the future of Royal Marines Base Chivenor. In the light of media reports over the weekend, is he able to confirm whether a decision is indeed imminent?
Mr Ellwood
On the invitation of my hon. Friend, I visited Chivenor and was very impressed with what is happening there. No decision has been made on Chivenor, so please ignore the reports in the media, and I will be more than happy to discuss where things are going with him outside the Chamber.
Robert Courts (Witney) (Con)
Progress on the REEMA site in Carterton has stalled for far too long. Will the Minister commit to working with me to provide the housing the RAF in west Oxfordshire so badly needs?
Mr Ellwood
My hon. Friend raises an important point about making sure we have the correct accommodation, which is something we touched on earlier. I know there are big questions about what is happening in the Brize Norton area, and again I would be delighted to discuss the matter with him further.
Armed Forces Covenant: Northern Ireland
Tobias Ellwood Excerpts(6 years, 7 months ago)
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The Parliamentary Under-Secretary of State for Defence (Mr Tobias Ellwood)
I would like to thank all hon. and right hon. Members for their contributions to the Opposition day debate about the armed forces covenant in Northern Ireland on 7 March 2018. The passionate and constructive comments of Members clearly demonstrated this House’s support for our armed forces.
The covenant has always applied throughout the UK, including in Northern Ireland and there are a number of initiatives underway to ensure the armed forces community in Northern Ireland is treated fairly, supported, and not disadvantaged in accessing public and private goods and services.
The newly-formed Northern Ireland veterans support office (NI VSO)—embedded in the reserve forces and cadets association for Northern Ireland and acting on behalf of the confederation of service charities—functions as a single point of contact for veterans who feel unable to access public bodies or service charities for services.
We have allocated £300,000 over five years to improve the capacity and capability of local authorities and other service providers in Northern Ireland to apply for covenant funding.
Any UK armed forces veteran living in Northern Ireland who feels that they cannot access the support they require from public sector service providers should contact the NI VSO, either direct or via the network of local veteran’s champions. The NI VSO can provide bespoke support and advice through its partner organisations tailored to the specifics of each individual case.
[HCWS711]
Contingent Liability
Tobias Ellwood Excerpts(6 years, 7 months ago)
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The Parliamentary Under-Secretary of State for Defence (Mr Tobias Ellwood)
I am today laying a departmental minute to advise that the Ministry of Defence (MOD) has received approval in principle from Her Majesty’s Treasury (HMT) to recognise a new contingent liability associated with the NAAFI pension fund. Negotiations are ongoing and the contingent liability will come into force on signature of a pension guarantee.
The departmental minute describes the contingent liability that the MOD will hold as a result of the NAAFI pension guarantee. The maximum contingent liability against the MOD is £223 million. It is usual to allow a period of 14 sitting days prior to accepting a contingent liability, to provide Members of Parliament an opportunity to raise any objections.
NAAFI is a company limited by guarantee controlled by the MOD through the NAAFI council. The guarantee would remove the risk of the MOD, as a result of its relationship with NAAFI, being required by the Pension Regulator to fund all or part of the deficit calculated on a buy-out basis on or before 2021 should NAAFI be wound up. It would save the MOD up to £5 million per annum, this being the current undertaking made annually to NAAFI, to reduce the pension fund deficit. It would also negate the risk of MOD losing the NAAFI’s services in the territories in which it operates creating potential gaps in service affecting MOD personnel.
[HCWS677]