MOD Logistics (Bicester)

Alison Seabeck Excerpts

Wednesday 18th April 2012 Westminster Hall

[Tony Baldry (Banbury) (Con)]

The hon. Member for Dwyfor Meirionnydd (Mr Llwyd), like me, is a lawyer, and his speech was long on assertion and short on evidence. Indeed, it seemed more appropriate for the inside back pages of Private Eye than as a sensible contribution to Hansard and parliamentary debate.

It might be convenient for the House to know that I have represented Bicester for nearly 30 years—some three decades. During that time, the logistics depot has gone through a number of names, so for convenience I shall refer to it as the Bicester depot.

The Bicester depot has working at and within it a number of trade unions: Unite—previously the Transport and General Workers Union—and the Public and Commercial Services Union, or PCS. Over the years, I have developed a practical working relationship with them, and I stress that because they are clearly not necessarily political friends of mine. The convenor of the Whitley council at Bicester and of the International Telecommunication Union, Les Sibley, has been my Labour opponent at the past three general elections, and the hon. Gentleman can rest assured that if either Unite or PCS thought that something untoward was happening at Bicester, they would be shouting it from the rooftops.

I wonder why an hon. Gentleman from a Welsh constituency is seeking to investigate, by assertion, what is happening in a military depot in Bicester. The hon. Gentleman did not answer when I asked him who the “we” was who had been advising him. The answer probably lies in the first lines of the Library briefing for the debate. The first newspaper article in the briefing, from the Oxford Mail, has the headline, “Bicester can be ‘heart of MOD’”, and continues:

“Bicester’s MP has called for the Ministry of Defence to consolidate its UK logistic operations in Bicester.”

I am pleased that the hon. Member for the Wrekin is here because I would not want to make these comments without him being present.

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

It is Telford.

[Tony Baldry]

I apologise: the hon. Member for Telford (David Wright). At the moment, there are a number of logistic centres for the Ministry of Defence, including one at Donnington. It is no secret that the Ministry has for some time been considering whether Donnington, Ashchurch and other logistic bases should be consolidated, and it is no secret that my submission to Ministers has always been that if one is to consolidate defence logistics, the logical place—the only place—to do so is at Bicester. Bicester is in the heart of the country, near Brize Norton, which is now the major air gateway, and the M40. The east-west rail link is being developed, which will connect Southampton to Felixstowe. Given all that and the Bicester’s internal railway connections, it is the ideal location in which to consolidate defence logistics. That is not just my view; it is that of the trade unions at Bicester.

Richard Kelsall, who represents the PCS, says:

“Over many years and many in-depth studies it has been concluded that Bicester is the only site that can fulfil the MOD’s strategic aims; meeting its customers’ needs whilst safeguarding the Public purse.”

I hope that the Front-Bench spokesperson, the hon. Member for Plymouth, Moor View (Alison Seabeck) will listen to this with care. Les Sibley who, as I said, has been the Labour parliamentary candidate for three successive general elections and is a former mayor of Bicester, a current district and town councillor and a former county councillor, says:

“The pivotal role that MOD Bicester has played throughout its long history in its provision and delivery of services to the Armed Fortes worldwide over many decades is well documented.

The MOD is a large organisation and by the very nature of its role, it is inevitable that sometimes mistakes happen because we are not infallible and as such we rectify any mistakes as quickly as is humanly possible.

We have built an enviable reputation of expertise over time, and this expertise is still readily available to the MOD for future Logistics and Distribution purposes. Therefore, the most logical way forward is that these attributes can be offered to the MoD by the loyal and long serving civil service workforce whenever called upon. By utilising these skills together with the centralised location of MOD Bicester offers a winning formula for future excellence of delivery to the Armed Forces when considering any future operational requirements.”

I fully recognise that Members of Parliament who represent Donnington, Ashchurch or other locations and depots will have different arguments. I accept that, but in the context of this debate my point is that the House can be assured that if the trade unions at Bicester felt that something was systemically wrong with how the depot was being run they would be making it clear, not just to me but to Labour Front-Bench colleagues—people such as the hon. Member for Birmingham, Erdington (Jack Dromey), who used to be assistant general secretary of the Transport and General Workers Union and visited Bicester regularly during that time. I am quite sure that if the trade unions felt that something was going systemically wrong at Bicester they would have made it clear to leading members of the Labour party and to the Labour Front-Bench team.

--- Later in debate ---

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

No, certainly not. It is a pleasure to serve under your chairmanship, Mr Havard.

The right hon. Member for Dwyfor Meirionnydd (Mr Llwyd) has raised issues that give serious cause for concern, and I will listen carefully to the Minister’s response. Many of his allegations are entirely new, and his written questions have obviously started the ball rolling.

The reform of the Defence Storage and Distribution Agency at Bicester and in other parts of the country, including Plymouth, has not been straightforward. Problems have arisen along the way, and the hon. Member for Banbury (Tony Baldry) alluded to some of them.

From meetings and correspondence I had with the MOD and trade unions in my constituency, I know there were concerns at the time about how the new set-up would operate and—this relates particularly to the weapons operating centre at Plymouth—about the care taken over the management and movement of explosives. In Plymouth, genuine concerns were raised about how the new, more centralised logistics arrangements and the transport of explosives—perhaps by less experienced operatives—would operate and about what safety procedures would be put in place. There were also concerns about stock levels and value for money.

The unions in Plymouth worked not only to inform those involved in the decision-making process of where they saw weaknesses, but to protect their members. Locally, they highlighted areas where efficiency could be improved and waste could be prevented. As the hon. Gentleman made clear, the unions worked with the changes to make sure there was no waste.

Under the Government’s proposals, there is the potential for further changes at Bicester. The debate revolves around the competition introduced under the previous Government and the introduction of couriers through the outsourcing of transportation. There is also the issue of the apparent mismanagement at Bicester, which the right hon. Gentleman suggested could be on an industrial scale and with the purpose of fattening up the organisation for a sell-off to the private sector.

Clearly, what has happened must be urgently reviewed given the seriousness of what has been said, and particularly given that the Government will want to be able to take their logistics commodities transformation programme forward as planned. Failure to answer some of the questions that have been raised could lead to uncertainty about the plans for the Bicester site.

One such question is just how open the discussion of the options has been. Will the Bicester distribution centre be revamped and become much larger? Could it disappear altogether and become a housing estate? Such questions have been, and are indeed being, asked, and they lead to insecurity and uncertainty for those still employed at Bicester. Are there other options, perhaps including Donnington or Marchwood, which my hon. Friend the Member for Telford (David Wright) mentioned?

[David Wright]

The key point is that the presentation of the data leads people to take strategic decisions, so we must make sure that the data the MOD presents on Bicester, Donnington and other sites are comparable.

[Alison Seabeck]

My hon. Friend makes a good point, which I will come back to later.

The Government must be concerned that other factors, such as the drop in land values, are not helping their decision making, and nor is the fact that parts of the Bicester site are contaminated. Such factors have contributed to the MOD’s apparently defensive mindset over the future of the site and the work that goes on there. However, there appears to be much more behind such concerns, as we have heard today.

As the hon. Member for Banbury made clear, we need evidence, so transparency is hugely important. We need transparency in the relationship between the civil service and Ministers. Obviously, there are constraints regarding commercially sensitive material, and there are wider security concerns. However, one or more whistleblowers have come forward, and the right hon. Gentleman has asked written questions.

[Tony Baldry]

The “whistleblowers” do not come from Bicester; indeed, they would not need to be whistleblowers. I can assure the hon. Lady that if those working at Bicester thought there was a concern, they would be on the telephone to her, as fellow members of the Labour party, explaining that something was wrong.

[Alison Seabeck]

The hon. Gentleman has a fair point: if such people were trade union members, they might well have come to members of the Labour party. However, I do not know who has spoken to the right hon. Gentleman, and I assume the hon. Gentleman does not know either. I am talking generally about people who feel they have seen something in their workplace that is inappropriate or that constitutes extreme waste. Clearly, the right hon. Gentleman, from his perspective, has not had adequate answers to the written questions he tabled. This process started more than a year ago, and these issues were highlighted a year ago, so why do some of these things appear to have been pushed under the carpet?

[Peter Luff]

indicated dissent.

[Alison Seabeck]

The Minister shakes his head.

[Peter Luff]

Obviously, I will check what the right hon. Gentleman said, but I think he did not get the statistics he asked for because they went back to 2005, and we did not have them. I think that will be the reason, but I will check. However, I reject the claim that there was any lack of transparency.

[Alison Seabeck]

The Minister is a decent man, and I take his response absolutely at face value. However, it would be helpful if he could check. No one takes becoming a whistleblower lightly, so if somebody felt strongly enough to become one, it is important that their allegations are fully investigated.

In written answers to the right hon. Gentleman over the past year, the Minister has indicated that savings had been achieved or were expected to be achieved at MOD Bicester. However, as we have heard, the right hon. Gentleman feels that those figures are inaccurate, and they are being seriously questioned. Indeed, inefficiencies such as Government trucks turning up at the same time as outsourced vehicles cannot be right, and I ask the Minister what monitoring is, or could be, undertaken to check on such things so that we can take action if there are, in fact, discrepancies.

How much duplication has there been? Have costs been inflated? Those are perfectly reasonable questions, and they deserve an answer. I assume the Minister is confident of the veracity of the information he has received. We need to have confidence in the data we are given. When Ministers make decisions—this reinforces the point made by my hon. Friend the Member for Telford—the data they base them on should be factually correct.

My next question is slightly tangential. Has there been any Cabinet Office involvement in this matter, given that it concerns civil servants and data? There is a Cabinet Office responsibility in there somewhere, particularly if a civil servant is involved in whistleblowing. As I say, that is a small point, but I would be interested to know the answer.

There is an issue here that transcends Governments; it was a problem for the Labour Government, and it is clearly an ongoing problem for the current Government. Waste and cost overruns happen, but Ministers—of whatever party—have a duty to the public, as well as to those they work with, to ensure that we understand how they happen.

The Government’s role as a client is also important, and there is the issue of how goods and services are procured. The Minister knows better than most that he is working towards a procurement strategy. I hope—I am sure the Chief of Defence Matériel wants this, too—that there will be a degree of openness and transparency to ensure that value-for-money benchmarks, which look attractive at first sight, actually deliver the savings the Government want further down the line.

I could go on about worries about loss of experienced civil servants and skills in the Department, but that would be extremely tangential to the points made by the right hon. Gentleman. We want to avoid a reoccurrence of the concerns that he raised. Therefore, in closing, apart from reiterating the importance of transparency, I want to ask the Minister what processes the Department will now follow to ensure that the evidence is gleaned from the right hon. Gentleman, if he has it, and that it is properly investigated. We need to find out why and how information appears to have been distorted through the process in question, and whether that was by accident or intent. It is important to understand it, and I hope that the Minister can offer us not only an explanation but some reassurance.

--- Later in debate ---

[Peter Luff]

In that case, I will make the specific rebuttal now. It is true that the right hon. Gentleman was told that mistakes are likely to be made. There are 8,000 deliveries a day across the logistics operation. If 99% of them go right and 1% go wrong, that is 80 a day that go wrong. That is a lot of anecdotal attacks to make on an organisation that is basically being well run. He was told that mistakes are inevitably made, but against a background of 8,000 daily deliveries, it is unfair to assert some kind of systematic error, inefficiency or corruption. That is the problem that we have.

I will study the detailed assertions made by the right hon. Gentleman. I will not be able to respond to them all during the debate. I shall write to him and to the other hon. Members who have participated in the debate, as best I can, as I look at the matters individually, though I think that I shall be able to satisfy him on all questions—at least if he is prepared to be open-minded about the answers. I assure him that if any company or Ministry of Defence official has acted inappropriately, it will not be tolerated, and action will be taken. We have a zero-tolerance policy on those matters, as I know from several occasions during my two years in my post.

I would say to the hon. Member for Plymouth, Moor View (Alison Seabeck) that there is an inefficiency and fraud hotline at the Ministry of Defence, so that anyone with a concern about inefficiency or fraud can ring up, completely securely—whistleblowing is entirely encouraged in the Ministry of Defence—and make the allegation. I am aware of no such allegation of impropriety in the logistics organisation being made on the hotline. If someone has gone to the right hon. Gentleman with specific allegations that is their democratic right—I do not want to stop them doing that—but I wish that they had come to me through the fraud hotline and enabled me to address such concerns sooner, if they exist.

[Alison Seabeck]

Did the Minister, before today’s debate, ask specifically whether any calls had been put into the fraud hotline on this matter?

[Peter Luff]

To be fair to the hon. Lady, I did not ask. I will check that, but I am sure that they would have been drawn to my attention had they been made. It is a fair question to ask, and I cannot give her a guarantee. There has been no Cabinet Office involvement, though; I assure her of that.

I will not arbitrate on Donnington and Bicester today. I have been to Bicester. I shall go to Donnington in July. I shall be even-handed, entirely, I promise both the hon. Member for Telford (David Wright) and my hon. Friend the Member for Banbury (Tony Baldry). I shall not be arbitrating there. I think that I shall be able to give the hon. Member for Plymouth, Moor View the reassurance that she wanted on all the fundamental points she made in her speech, because this is a bipartisan issue.

Successive Governments over decades have dealt with problems with logistics, which is often the Cinderella of defence, and to which insufficient political attention is often given. That is one reason why I welcome the debate. It is good that the subject should be exposed in the House, and good to have the opportunity to record some of the remarkable achievements of people who work in logistics, often in adverse circumstances.

I think that I detected in the speech of the right hon. Member for Dwyfor Meirionnydd—if I am wrong I apologise to him straight away—an underlying hostility to the role that the private sector can play in delivering defence outputs more effectively. We, like the previous Government—it is a bipartisan policy—have found that using the private sector appropriately enables significantly better outcomes to be achieved for defence. Many of the things that we are doing in the logistics operation build on decisions made by the previous Government. We understand the role that the private sector can play.

I assure the right hon. Gentleman that no information that it is proper to put in the public domain, within the limits of commercial confidentiality, has been concealed. Detailed information is available, for example, on each and every contractor involved—I think that 17 are on the list—including exactly how much money they are paid and exactly what they do. I have written to members of the Public Accounts Committee with that information. I have the schedule here, and if we have time before the Division in the House is called, I may even read out all 17 names, what the contractors do and how much they were paid in 2010-11. I shall make sure that the information is available to the right hon. Gentleman after the debate.

No information is concealed. Indeed, the National Audit Office rightly goes over logistics regularly, and another NAO report is due out in the fairly near future. If the NAO has not spotted such things as the right hon. Gentleman is concerned about, and all the information is genuinely available, I am frankly suspicious about whether the allegations have any foundation. However, I will double check. Question after question has been answered, and nothing that it would be improper to conceal will be concealed. Some information, as the hon. Member for Plymouth, Moor View was kind enough to note, sometimes must be kept private for reasons of commercial confidentiality. That is frustrating for politicians and democrats, but sometimes it is important. However, we shall be as open as we possibly can.

I listened carefully to the right hon. Member for Dwyfor Meirionnydd and will address some of his points in my speech—I have already done so in part; but I want to explain a little more about logistics commodities and services at Bicester, and the wider operation, to put his remarks in context. The organisation provides remarkable support to the UK armed forces, particularly to those serving on deployed operations, not just in Afghanistan but particularly there. LCS Bicester is one of three main storage and distribution depots for non-explosive stores, operated by Defence Equipment and Support. The other two are LCS Donnington, in Shropshire, in the constituency of the hon. Member for Telford, where I am going in July, and LCS Dulmen, in Germany. The role of those sites is to receive, store, maintain, issue and distribute non-explosive matériel on behalf of the UK armed forces and other Departments.

Last year, the National Audit Office published a report called “The use of information to manage the logistics supply chain”. In that report, the NAO—it is not I, a Minister, saying this, but the NAO—acknowledged the improved performance of the MOD’s supply chain and its effectiveness in supporting our forces in Afghanistan. In particular, the NAO’s report noted that the operational supply chain is more complex than the standard industry supply chain, which is not something that people often acknowledge.

To pick up on the comments made by my hon. Friend the Member for Banbury, the UK’s delivery performance is comparable with that of commercial operators. We are doing as well as the commercial sector, which is a great tribute to all those involved, and a significant achievement. That is why I am suspicious about the allegations made by the right hon. Member for Dwyfor Meirionnydd.

The defence equipment and support logistics commodities and services operating centre, of which MOD Bicester is a part, is key to the successful delivery of those services. The defence inventory is huge, complex and comprehensive. As at 31 December 2011, the gross book value of the inventory, excluding explosive stores, was about £29 billion. That represents 500,000 different line items, covering everything from clothing to medical supplies and engine parts. Those items are distributed to approximately 3,500 sites across the UK and around the world. Up to 8,000 issues are sent every day—some 1.2 million every year—ranging from small washers to aircraft wings. That is indeed a huge and complex operation. Given the sheer volume of items moved by the organisation—I am in no way complacent, because we do not tolerate error, either—it is inevitable that some mistakes will be made.

Turning to one mistake in particular that the right hon. Gentleman has made much of in the past, there is an appropriate saying: a lie is around the world while the truth is getting its boots on. Let us look at those boots once more. An item that should be routinely requested is sometimes marked as urgent by the unit itself; or items may be sent individually when they could be packaged together. That is normally the fault of the requesting unit.

In the specific case of the boots couriered to a unit in Northern Ireland, which the right hon. Gentleman raised at Prime Minister’s questions, that is exactly what happened. The unit used the wrong process to order the boots. It realised the mistake too late. I am not going to allow civil servants to override front-line decisions and say, “We do not think that is urgent. The officers in charge might think it is urgent, but we disagree.” That would not be right. The responsibility lies with the unit to use the appropriate requesting process.

What happened in this instance was a regrettable mistake, which the unit tried to correct too late. It was not corruption; it was not fraud; and it was not improper. It was a straightforward human error. I hope that the right hon. Gentleman will not repeat his assertion. I am entirely satisfied that there was no fraud involved at all. The mistake was made by the Army, which it regretted and tried to correct.

I cannot guarantee that such mistakes will not happen again—we are all human beings who have feet of clay and who make mistakes—but I am absolutely confident that this is not a systematic problem. The right hon. Gentleman made that assertion in his speech, but I dissent from that view firmly and absolutely.

LCS Bicester is a well-run operation, which I am sure is also true of Donnington. The restructuring of the former Defence Storage and Distribution Agency—DSDA, of which LCS Bicester was a part—has produced significant savings. The FDSCi—future defence supply chain initiative—report, which followed the DSDA restructuring, was published in November 2009 by the previous Government and presented to the House, and I would be happy to send the right hon. Gentleman a copy. It forms the basis of my remarks today and represents more information in the public domain, which I hope will reassure him.

Between 31 March 2008 and 31 March 2012, the operating costs of DSDA and its defence equipment and support units fell from £285 million to £231 million a year. That represents a reduction of nearly 20% over four years. When calculated on a like-for-like basis, taking into account inflation, the cost of improved service and other exceptional one-off costs, the saving is 26%. That is an impressive achievement for which the hon. Member for Plymouth, Moor View should take her fair share of credit, on behalf of the previous Government, who initiated some of the changes.

Similarly, the cost of transporting MOD equipment has fallen by 21% over the same five-period period. I repeat that I have the detailed information on the use of companies and couriers that I would be happy to share with the right hon. Member for Dwyfor Meirionnydd. I will resist the temptation to read them all into the record, because it is a long list. I am surprised that he highlighted Palletways in particular. I assure him that there are people on the distribution list who get paid more than Palletways. Again, on a like-for-like basis, allowing for the impact of inflation and so on, the saving on the transport costs is 29%. It is 29% cheaper in real terms, which is a big achievement. A key performance is the average cost per transaction—the processing of an issue of receipt. The equivalent cost has fallen from £103 per transaction for the financial year ending 31 March 2008 to £79 per transaction in the year ending 31 March 2012. That is an increase in efficiency of 23%. Those are good and impressive figures.

Over the same period—I appreciate that this is a good news, bad news story—manpower numbers have reduced by more than 2,100 posts and the service to the customer has significantly improved. The average customer wait time—this is a really impressive statistic—has fallen from about 49 days to four days. That is an important figure, considering that our armed forces are heavily committed in operations in, for example, Afghanistan. I pay an even-handed tribute to both Bicester and Donnington in that respect. The operation of LCS Bicester and the two other main storage and distribution depots is a genuine success story. If there were an hon. Member for a German constituency and if they were present, I would congratulate him or her as well, although storage and distribution represent only one element of the management of our equipment.

We are proud of the spares and equipment availability in operational theatres such as Afghanistan, as it ensures that commanders are not constrained in conducting their missions. The same could be said for the manner in which we supported Operation Ellamy in Libya, which was another success for a logistics operation. Support for such operations must be our first priority.

Nevertheless—this is the scandal to which I alluded in my opening remarks—there is no disputing the fact that the defence inventory is, and has been for many years, too large in both value and volume and that any avoidable delay in reducing it will create many future challenges. We have to deal with the issue. There are a number of reasons for this situation. Many items are bespoke and have been purchased in bulk, based on an estimate of need stretching across several years, even decades in some cases. Other items are purchased with a view to ensuring that sufficient stocks are available to deal with a sudden surge for a short-notice or large-scale military deployment. However, that is far from the whole story.

There is a legacy—I am not making a point about the previous Government—of under-investment in the information systems to track and manage stores. The truth, as I said during my opening remarks, is that logistics is the Cinderella of defence, and that is manifest in this case. It does not seem to be a priority for investment, but it should be. Too often, the Department is unable to locate with confidence what it holds. It thinks and is reasonably sure that it has something, but it just cannot prove it to accounting standards quality when it should be able to. Moreover, it has often held too much just in case something happens.

I visited some of the warehouses in Bicester recently—I met my hon. Friend the Member for Banbury immediately before I saw them—and they are jaw-dropping. Stuff is being held that simply should not be held and it should be disposed of. The £29 billion stock holding is far too high. Too much inventory is stored for too long and at too great a cost to the taxpayer.

This is not just a British problem. Army surplus stores exist around the world. The situation seems endemic to defence, but we must cope with it. The inventory is large and it is growing, and we are determined to tackle it head-on. We have not been idle. The Department is making progress in improving inventory disposal through the stock transition programme, which was set up to meet Treasury targets to reduce inventory holdings in our main storage and distribution depots. We have arrested the rate of growth—it is still growing—in the defence inventory as a result of those disposal measures, and we are committed to bringing purchasing activity under much stricter control.

In December 2010, I announced to the House the introduction of the future logistics information services project, which represents a step-change improvement to the quality of logistics information available to the armed forces. It will ensure the long-term delivery of operationally essential logistics information to both the MOD and industry, and the significant financial efficiencies will contribute to the Government’s strategic deficit reduction programme, without reducing operational capability.

One of the logistics information systems that will be managed under FLIS is the management of the joint deployed inventory, or MJDI—I love these acronyms—which is now up and running and has reached its initial operating capability. MJDI will bring huge improvements, enabling the entire deployed inventory—the inventory that is overseas on service—to be seen on one system. It will encourage better use of stock, which in turn will lead to reduced repeat demands, lower stock levels and saved costs in storage and transport, all generating improved operational performance. Importantly, it will enable operational commanders to make informed decisions based on accurate and timely information.

To give a specific and important example, a four-year Bowman radio equipment asset management improvement programme was introduced in 2010. Since then, we have made good progress and a coherent and auditable inventory baseline has been established. It is not rocket science, but it is hugely important and we are doing it. Process improvement in the way in which the data are captured and managed will in future enable the Department to identify and track assets more effectively. This is really important stuff.

We recognise the importance of having a comprehensive corporate strategy to tackle the myriad complex issues, and have commissioned the development of a strategic plan for the management of the defence inventory. It is intended to deliver the correct conditions to incentivise and mandate improved inventory purchasing and disposal behaviours. We have a lot of attics at the MOD, and they are too full of stuff. We need to get rid of stuff, as well as acquire stuff more thoughtfully. The strategic plan is a significant piece of work and it has just completed phase 1 of its milestone.

The financial savings and efficiencies secured by LCS Bicester and all the storage and distribution sites over the past five years are impressive, but, as I have already said, there is a long way to go if we are to provide the best possible support to military operations and maintain the agreed quality and service to our armed forces.

In response to the hon. Member for Plymouth, Moor View, in August 2010, I announced that DSDA would renounce its agency status and that a new organisation, the logistics commodities and services operating centre, which brings together the key commodities purchasing, storage and distribution elements of the Department into one organisation, had been created. LCS Bicester is part of the LCS operating centre. The primary role for LCS is to provide support to military operation and force generation by undertaking procurement and inventory management of all non-explosive commodity items, including food, clothing, fuel and medical supplies; the storage and distribution of those commodity items, together with all other non-explosive stock across defence; the disposal of surplus MOD equipment and the operation of the British Forces Post Office.

LCS is currently developing a transformation project, which aims to consider how we can improve further our inventory management and stock control, rationalise current stock holdings—we are trying to thin them down, rather than fatten them up—and improve and rationalise storage infrastructure. That will include releasing surplus for disposal, which will be of interest to the hon. Member for Telford and my hon. Friend the Member for Banbury. The project will also seek to improve commodity procurement and logistic processes, and optimise the size of the LCS organisation itself. The storage infrastructure requires investment to improve its condition and to rationalise the numerous dispersed locations.

Should the programme be taken forward—frankly, I expect that it will be—the first step will be to initiate an assessment phase, to explore the alternative delivery models available and whether they represent value for money, which I think addresses one of the questions asked by the hon. Member for Plymouth, Moor View. The work would explore two options for delivering support in the future: industry integration and an in-house developed value for money benchmark. That review will consider all existing facilities. I emphasise that it is far too early to say what the implications will be for individual sites and that no decisions have been made.

In advance of the work at Bicester, however, a planning application for the retained footprint and for the sale and development of surplus land has been submitted to Cherwell district council, to prepare the way to the approach to defence logistics and to secure the value of the surplus land.

We must not forget that it is the people who work at LCS Bicester, Donnington and the other sites associated with it who make logistics operations succeed. The efficiencies and improvements that have been implemented at those sites are testimony to the quality of the people whom we employ, and I am grateful to them for what they do. I have met many of them and know that they are focused on providing the best support to our service personnel deployed on operations. I fully understand the vital role that they play. They are rightly proud of what they have achieved, and they continue to achieve a great deal.

I am enormously grateful for the commitment and dedication of all those who work to ensure that our armed forces receive the best logistics support possible. It is our job to ensure that the right framework is in place to make it work. That challenge has been ducked for too long—for decades, not just in recent years. Indeed, arguably we are addressing decades of neglect in these issues, and it will take time to deal with them. The change will come, but it will come slowly and incrementally. I am determined that we should improve the way that we do things.

If the criticisms made by the right hon. Member for Dwyfor Meirionnydd contain any significant truth, I will, of course, want to address them very honestly and frankly. We need to do the best we possibly can to ensure that our armed forces can fight and defend our freedom as effectively as they have done in the past.

Oral Answers to Questions

Alison Seabeck Excerpts

Monday 26th March 2012 Commons Chamber

[Peter Luff]

Yes, I can give my hon. Friend a clear reassurance on those points. The politicians, armed services and acquisition communities of both countries understand the importance of the relationship, which I believe will endure for many years because of the benefits it brings in terms of both enhanced capability and lower cost, which are crucial tests for anyone interested in delivering effective equipment for armed forces at a price the taxpayer can afford.

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

May I associate myself entirely with the Secretary of State’s expression of sympathy following the loss of two service personnel today in Afghanistan?

The Opposition support further co-operation with the French, as industry does. However, the industry’s concern is that the French Government have an industrial strategy and are already looking at how they maximise business for French companies. They have been faster out of the blocks yet again, so given repeated delays in the announcement on planning round 12, can the Minister tell the House exactly when we can expect the announcement? Can he please not say “shortly”, because industry and employees deserve a little better?

[Peter Luff]

I assure the hon. Lady that she can expect a statement very shortly. As for her more general point, this country has a very effective way of supporting defence industries by making them competitive to ensure that they can take on world markets well and strongly, by supporting small and medium-sized enterprises and exports, and by supporting science, which the previous Labour Government cut. Those things will give us a very strongly competitive defence industry, not only in respect of the relationship with France, but around the world.

Typhoon Aircraft (Exports)

Alison Seabeck Excerpts

Wednesday 7th March 2012 Westminster Hall

[Mr Howarth]

As I think my hon. Friend the Member for Fylde made clear in his speech, the customers are overseas Governments. We do whatever we can, within reasonable limits and within the constraints that apply to us in providing the equipment that our own armed forces require, to provide what the customer is looking for. Clearly, new build is preferable because we understand that it generates jobs in the United Kingdom. However, other countries are increasingly looking for technology transfer and partnership. Trying to deal with that issue is challenging.

I recently returned from a successful trade mission to India, as my hon. Friend the Member for Fylde mentioned, where I led a delegation of 25 British defence companies, large and small, to promote the very best that Britain has to offer. That kind of initiative is designed to demonstrate to our friends in India our serious intent to build lasting partnerships with them. I am due to return to India for its defence exposition later this month, so I will see the Indian Minister again. I will mention India specifically in a moment.

Typhoon has already secured a number of export contracts beyond the four partner nations, including the Kingdom of Saudi Arabia, which has ordered 72 to date, and Austria, which has ordered 15. The MOD is actively supporting DSO and working with Eurofighter Typhoon’s three other partner nations on a number of other campaigns, which are at an advanced stage, including in Oman, Malaysia, the UAE and a further tranche for the Kingdom of Saudi Arabia. The UK is in the lead in responding to the requirements of Oman, Malaysia and the UAE, and Her Majesty’s Government and BAE Systems, as UK prime contractor, are also fully involved in those campaigns, led by our partners.

The MOD’s support activity has included deployments of aircraft to the Dubai and Malaysian air shows. The latter engagement also took in valuable participation in a multinational exercise within the five powers defensive arrangement. The RAF has also made platforms available to carry out impressive flight evaluation trials here in the UK, so that the overseas customer can witness Typhoon’s superb performance at close quarters. That is pretty impressive stuff by any measure, but all the more so when viewed against the backdrop of recent operations.

Earlier this month, a delegation from Malaysia visited the UK to undertake such a flight evaluation trial. RAF Coningsby hosted the Royal Malaysian air force, and a demanding schedule of sorties covering a wide range of mission scenarios was carried out, supported by maintenance demonstrations by teams on the ground.

We were very pleased to receive Oman’s request of 21 January for a proposal from BAE Systems for the supply and support of Typhoon aircraft. That represents an important step towards the contract and is a further sign of the strong and enduring relationship between our two countries. My noble Friend Lord Astor and my right hon. Friend the Member for Rutland and Melton (Mr Duncan) are well connected in the two countries I have just mentioned and have performed a huge service in adding to the strength of the British engagement.

As I mentioned, the Kingdom of Saudi Arabia signed an agreement to purchase 72 Typhoon aircraft, under the former Government. That is welcome, and together with initial logistics and training packages, it is worth several billion pounds to the UK and our European partners. We hope to provide a further tranche in future.

In the UAE, following representations from my right hon. Friend the Prime Minister, Eurofighter Typhoon was invited in November to submit a bid for 60 aircraft, when it had been thought a deal with another contractor was about to be signed. We are all working hard to prepare an attractive, competitive bid to one of Britain’s oldest allies. Indeed, my right hon. Friend the Secretary of State for Defence is due to visit the UAE shortly. This morning, I talked to Alan Garwood from BAE Systems, who returned this morning from the UAE. I assure all hon. Members in this Chamber that that is indicative of the effort that has been put into this campaign across the Government and industry.

Of course, we are disappointed about the decisions made in Japan and India, but of course we fully respect their decisions. The Indian Government have chosen not to take Typhoon into the detailed negotiations phase of their medium multi-role combat aircraft competition, but the Eurofighter Typhoon consortium and the partner nations stand ready to enter into further discussions with the Indian Government, should that be their wish.

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

I congratulate the hon. Member for Fylde on securing the debate, which is important for his constituency. I have a genuine question for the Minister, relating to how optimistic we should be about the prospect of the Indians changing their minds. Will he tell hon. Members how many contracts the British Government have got to that stage that have then been subject to such a change of mind, because that is not common, is it?

[Mr Howarth]

I am grateful to the hon. Lady for raising an important point. India had to select from two bids on the basis of price, price, price—nothing else. We understand that that is the procedure in India and that, unless and until negotiations with L1—the lowest bidder—have been exhausted and do not lead to a contract, at that point and only that point the Indian Government will be able to enter into negotiations with the other bidder. I assure the hon. Lady that we are maintaining a close interest, but we have to respect the Indian Government’s decision. Beating them about the head and saying, “You made the wrong choice,” is not the best way to win friends and influence people, least of all to encourage a customer to turn to a company.

We stand ready. I have to say that, in this case, the UK is not and never has been in the lead. The campaign in India has been led from the outset by Germany and EADS Cassidian, not by the UK and BAE Systems.

A great strength of Typhoon is that it is proven on combat operations, as we found out in Libya. I thought that it might help if I put on the record some of those achievements. Typhoon’s performance stood out from its coalition contemporaries. Fully loaded with up to six air-to-air missiles, four 1,000 lb bombs, a targeting pod and two under-wing fuel tanks, it was able to cruise at more than 500 knots and at heights in excess of 40,000 feet, taking it well clear of rough weather.

The combination of Typhoon’s long-range radar and data-link integration gave its pilots exceptional situational awareness, which enabled them to control and co-ordinate less well-equipped coalition assets. In six months of deployed operations, the Typhoon force flew more than 600 sorties for a total of just over 3,000 flying hours, without any requirement for an engine change, and delivered more than 200 precision weapons. The aircraft’s excellent reliability resulted in no sorties lost owing to serviceability issues. That is a pretty outstanding record.

Defence exports generally make an important contribution to sustaining our defence industry, as my hon. Friend mentioned. Some 300,000 people are employed in the defence and aerospace industries, which provide tens of thousands of highly skilled jobs. In 2010, defence exports amounted to approximately £6 billion and made a significant contribution to the balance of payments. Figures from UK Trade & Investment show that in the first decade of this century the UK was, on average, the second most successful exporter of legitimate defence equipment in the world, not least in my hon. Friend’s and my constituencies.

It is not simply about money and getting cash in. As my hon. Friend implied, helping our friends to build up their own defence and security capabilities contributes to regional security and helps tackle threats to UK national security closer to their source. No other industry in this country can leverage influence so much as defence, which is why we are giving it such a high priority.

I pay tribute to the UK companies, large and small, throughout the supply chain that are participating in this export drive, including Rolls Royce, SELEX, Martin-Baker, MBDA and Ultra. That reminds us that the Typhoon is not just a BAE product, but encapsulates a range of outstanding British and European technologies. Having paid such a tribute, I extend it to my hon. Friend and highlight the contribution of companies in Lancashire, because in calling this debate he pays tribute to the company and its employees for bringing so much back into the constituency of Fylde and the north-west more generally. I shall, of course, forbear from saying too much about the north-west, as I represent the Farnborough Aerospace Consortium in my neck of the woods, but we are complementary.

I reassure my hon. Friend that Her Majesty’s Government, led by my right hon. Friend the Prime Minister, are working to support Typhoon exports and British industry more widely, but in these straitened times others are doing much the same and we should not expect an easy ride. The UK enjoys historic ties with a wide range of countries, often dating back centuries, greater than any other nation can claim. Our strategy is to revitalise those ties, both in the interests of our mutual defence and regional stability and to the benefit of our outstanding aerospace industry, of which this country can be truly proud.

Oral Answers to Questions

Alison Seabeck Excerpts

Monday 20th February 2012 Commons Chamber

[Mr Speaker]

Order. I do not think that the House has access to the box in question, but we are immensely grateful to the Minister.

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

In view of the important role that SMEs play in some of our bigger programmes, and their need to be confident in the process and to have security of outcome, will the Minister give the House some clarity on the intention for the F-35 programme? In particular, given rumoured reductions in orders from the USA, Australia and Canada, does he expect the price that the MOD pays for each F-35 to rise, and does he have a view on the exact point at which they become unaffordable for the UK?

[Peter Luff]

First, I apologise unreservedly to you for my earlier answer, Mr Speaker, but you have encouraged me to be pithy in the past, and it would have been quite a long answer to give the details in full.

Addressing the concern of the hon. Member for Plymouth, Moor View (Alison Seabeck), the honest answer is that we do not know. The Americans are not reducing the total numbers for the purchase of the joint strike fighter, but they have changed the profile of those purchases. Other partner nations have indicated that they will reduce their offtake. That is likely to have implications for JSF prices, particularly those acquired in the early stages of the process, which is when this country intends to acquires its JSFs. We are watching those implications carefully, and I am happy to talk to the hon. Lady separately about the implications for the UK.

Strategic Defence and Security Review

Alison Seabeck Excerpts

Thursday 26th January 2012 Commons Chamber

[John Woodcock]

The hon. Gentleman is quite right—he put it far more succinctly than I did and I am grateful to him for doing so.

I want to stress in the concluding part of my speech that the current Administration are creating a level of risk around the deterrent. That should be a matter of concern to Members on both sides of the House. As an aside, I hope the Minister who winds up could address the matter that was raised this week—

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

The Minister does not wind up.

[John Woodcock]

Oh, there are no wind-ups. Perhaps the Minister could find time to intervene in the short time remaining to make something clear. There are significant cuts to the MOD police. Do they mean that there are plans to reduce the MOD police presence at Faslane or Coulport? Would the Minister like to intervene?

Oral Answers to Questions

Alison Seabeck Excerpts

Monday 19th December 2011 Commons Chamber

[Peter Luff]

The world is full of rumours about the future of the F-35 programme; I hear a new one almost every day. It is true that a lot of questions are being asked, and those aircraft are very important to carrier strike capability, but I shall wait to see what actually happens, rather than joining in the speculation.

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

In a written answer to me, the Minister put the estimated cost of converting one of the carriers to the catapult and arrestor system at about £1 billion. Can he therefore tell us whether the Chancellor’s announcement in the autumn statement of real-terms cuts in respect of procurement issues of almost £30 billion, extending into the first two years of the next Parliament, is apt, or whether the Prime Minister’s promise of a real-terms increase in defence spending of 1% will apply to this and other major projects?

[Peter Luff]

I can confirm that nothing has happened to our commitment to increase the equipment budget by 1% in real terms from 2015. I have to say that our job would be a great deal easier if the previous Government had not taken the decision to delay the carriers, thus adding an extra £1.3 billion of costs to the programme with no capability gain whatsoever.

BAE Systems

Alison Seabeck Excerpts

Thursday 24th November 2011 Commons Chamber

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

This is an important debate, not only for the workers affected in Brough, Warton and Samlesbury, and for their families and their wider community, but for the wider UK defence industry, UK manufacturing, and all the businesses and their employees in the supply chain.

The case for this debate has been set out in stark terms by the right hon. Member for Haltemprice and Howden (Mr Davis) and my right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson). Their comments, though, have to be set against the bigger picture. We have an economy that is flatlining, with the lowest growth of any country in the G7 bar Japan—which, of course, suffered an earthquake and a nuclear disaster—and the lowest growth of any EU country bar Greece, Portugal and Cyprus, yet we have a Government Department that repeatedly states that the decisions on where redundancies fall are nothing to do with it. I have to ask the Minister whether that is also the view of his colleagues in the Department for Business, Innovation and Skills, the Department for Communities and Local Government, and the Department for Work and Pensions, who have to pick up the pieces and the costs of these significant job losses.

We are talking about very skilled workers, whether in the north-west or Humberside, who have so much to offer to the company and to UK plc, and yet face a hugely uncertain future. It is far from clear whether the processes have been properly managed. It is also unclear whether the 90-day consultation process has been genuine or whether the company has been paying lip service to this requirement. I can well understand why right hon. and hon. Members and the trade unions that represent those affected speak inside and outside this place with such frustration and anger at how this is being handled by BAE as it downsizes and rationalises its footprint in the light of changing global demands. The leak in advance of its announcement is clearly unacceptable. We must understand just how much that affects the work force’s perception of the management and what had until now, as my right hon. Friend the Member for Kingston upon Hull West and Hessle said, been a very good working relationship. It is unclear what efforts have been made to relocate any of the work force and to consider alternative proposals from inside the company. My right hon. Friend, who has vast experience in these matters, posed a whole series of questions that the company needs to answer and in which the Government should take a close interest.

I know that the Minister cannot answer questions today, but I hope he will none the less give serious thought to this. I was reassured to hear him say on several occasions that he would take away issues that were raised across the Chamber. That is not least because we saw in the 1980s the loss of large defence and industrial employers and the devastating effects that that had on communities. Those effects outlast generations, as we saw in my own constituency of Plymouth—and, indeed, in Barrow, in Woolwich, and in other places.

This is a test of the Government’s willingness and ability to support British manufacturing, British defence industries and skilled British jobs, and not merely to talk of an export-led recovery. I do not mean to stray into territory that I am sure will be covered at length in the following debate, but the issues raised at Brough speak to the wider question of how the Government are failing to support British business and get the economy growing again.

[Jack Lopresti]

Will the hon. Lady give way?

[Alison Seabeck]

Forgive me, but I will not, because a lot of Back-Bench Members want to speak. The Minister gave way a lot, and we need to move on.

A key part of the very significant contribution that the defence industries, and indeed BAE, make to our economy is the need for a strong defence industrial strategy —one that meets our overall defence needs and protects our sovereign capability. We need a coherent plan of investment—for example, in unmanned aerial vehicle technologies—that will help to sustain the whole-aircraft skills on which this industry has traditionally been based. Labour Members have already commissioned our own review of defence procurement, and it will be interesting to see whether, in the long promised White Paper, the Government pick up on any of the themes we have suggested, which deserve further consideration. Crucial too, and touched on in our document, is the economic case for a strong defence sector able to export goods and grow its markets rather than, as we are seeing now, having to scale back its work, shrink its work force and leave the taxpayer covering the cost of unemployment.

The relationship that BAE Systems has with the UK Government, and therefore within the defence industrial base, is significant because of its substantial reach. It is a company of global significance with some 38,000 employees in the UK, one of the largest cohorts of apprentices, 10%-plus of all defence industrial jobs, and over a third of its sales market in this country. In fairness to the company, it does understand the need to protect the skills base. BAE also has some 9,000 UK suppliers, with tens of thousands, if not hundreds of thousands, of supply chain jobs therefore partly dependent on it.

We are working in a market environment in difficult financial times, and it is therefore important to understand from the Government what discussions they had with BAE prior to this announcement. The Minister touched on that. Was the prospect of offsetting potential job losses from the slowing of programmes at BAE against the mooted development by Siemens in Hull ever discussed? Siemens, of course, was in line to pick up the work that Bombardier failed to get. There is some uncertainty all around this. We should be a little clearer about which branches of Government are looking to ensure that there is sustained, ongoing skilled employment in the Humber area.

We have to have concerns when organisations such as ADS, the trade organisation advancing the UK aerospace, defence, security and space sectors, express the view that the current cuts to BAE are the tip of the iceberg. We need to be convinced that the Government are using all their tools—I realise that that is not solely the responsibility of the Minister who is present—to help those successful industries to be more productive. When the Government are the client, they must still ensure that the taxpayer gets value for money. The Government must decide whether they want to act to support sovereign capability with skilled jobs based in this country. If they do, they need to act now.

We have to look at the potential problems facing the Typhoon programme. Italy and Spain are having difficulty paying their way. I heard the Minister’s positive comments about the Typhoon programme, but we need reassurance that the Government are doing everything they can to keep it on track. We need to be sure that, along with the Department for Business, Innovation and Skills, the Department is looking at the impact of the loss of intellectual property rights, such as those associated with the Harrier and the Hawk, which were mentioned by the right hon. Member for Haltemprice and Howden. Those are transferable, and in theory that allows build programmes to happen outside the UK. Will Hawk production be shifted entirely to India? Is that an entirely desirable endgame for the British Government? I suggest that it is not.

I hope that the Minister will listen, as I shall, to right hon. and hon. Members in this important Back-Bench debate as they flag up what is wrong with the way BAE is responding to the current downturn, and highlight the ways in which the Government are not supporting British industry in this sector as Members feel they should. The Minister should not only take a direct interest in the current situation, as he has made clear that he does, but pay heed to the critical reports of the Public Accounts Committee and the National Audit Office, including any future investigations that they might undertake as a direct result of today’s debate, particularly into the yellow book. In the forthcoming White Paper, the Government should indicate clearly a positive way forward, because BAE, irrespective of the issues raised in the House today, is a significant player in the Government’s defence strategy and wider industrial strategy, particularly for fixed-wing aircraft and unmanned aerial vehicles, so it needs to be able to plan with some certainty within its own domestic market, as do all its competitors. In turn, it will be able to secure high-skilled jobs such as those at Brough into the future. We must avoid further job losses, any further loss of expertise and, of course, the poor use of taxpayers’ money.

[Mr Deputy Speaker (Mr Nigel Evans)]

The time limit has been reduced to five minutes in order to get everybody in.

Oral Answers to Questions

Alison Seabeck Excerpts

Monday 14th November 2011 Commons Chamber

[Peter Luff]

Some Members may well find themselves in considerable sympathy with what my hon. Friend has said. Let me simply say that when I engage in discussions with my French opposite numbers, such issues are always at the forefront of my mind, and they will continue to be so—for instance, at the summit that is to be held in December.

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

The Minister will be aware that the global financial crisis is causing a number of nations to take defence work back in-house, partly in order to protect their own work forces. Others, such as Italy, are seeking to renegotiate contracts, which is leaving UK firms of all sizes open to potential job losses. The Minister’s answer to my hon. Friend the Member for Kingston upon Hull North (Diana Johnson) provided no reassurance that the Government were doing everything that should be done to protect British business overseas. In fact, what we heard was far from reassuring: it was about passing the buck back to industry. Will the Minister please reassure us that he will do all that can be done to support British industry?

[Peter Luff]

With respect, the hon. Lady’s question is rather different from the one asked by the hon. Member for Kingston upon Hull North (Diana Johnson). When it comes to helping British businesses overseas, I think that this Government’s track record compares very favourably indeed with that of the lot opposite when they were in power, and I am happy to tell them that the reason the Under-Secretary of State for Defence, my hon. Friend the Member for Aldershot (Mr Howarth)—the Minister responsible for international security strategy—is not present today is that he is at the Dubai air show doing precisely that. Moreover, my right hon. Friend the Secretary of State was in Japan a couple of weeks ago, making the case for the Eurofighter Typhoon. We are doing a very good job speaking up for British industry overseas: a damn sight better job than the Opposition did.

Armed Forces Personnel

Alison Seabeck Excerpts

Thursday 10th November 2011 Commons Chamber

Motion lapsed (Standing Order No. 9(3)).

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

On a point of order, Mr Deputy Speaker. The Government statement today on Project Avanti, which is about Army restructuring, is very interesting, and is made all the more so because it appeared in an American defence magazine on 7 November. It is important that we understand why the American defence community knew about the statement in quite a lot of detail, including naming names, three days before the House did. Will the Secretary of State for Defence, when he is available, come to the House to give an explanation or, at the very least, instigate an investigation within the Department into how that happened?

[The Parliamentary Under-Secretary of State for Defence (Mr Andrew Robathan)]

Further to that point of order, Mr Deputy Speaker. I was not aware of that. I will most certainly ensure that it is looked into very closely and I will let the hon. Lady know.

Ministry of Defence (Procurement)

Alison Seabeck Excerpts

Wednesday 19th October 2011 Westminster Hall

[Dr Lewis]

There is always the possibility that people will change their mind when they see different circumstances, but I genuinely feel that that has not applied in this case as a result of what I was about to explain and what hon. Members will remember. Out of the blue, even though the procurement of a replacement and successor system for Trident had specifically been excluded from the terms of the security and defence review, on the day when the statement was made, publishing the review and presenting it to Parliament, we were told that the main gate decision, the contracts for Trident would be put off until after the next election. With the greatest respect to the hon. Member for East Londonderry (Mr Campbell), there was no doubt at all that that had nothing to do with hard facts or realities creeping in, and everything to do with politics, as the letter subsequently sent out from the president of the Liberal Democrats, crowing in triumph at the delay of the Trident decision, made clear.

I must not wander too far from the procurement emphasis of this debate. Therefore, I would like to put a specific question to my hon. Friend the Defence Minister with responsibility for procurement issues. It relates to the study that is being done about alternative systems to Trident as a possible nuclear deterrent. That is being done as a gift, a present, a political offering to the Liberal Democrats in the coalition, and I believe that the study is being carried out by the Cabinet Office rather than the Ministry of Defence, although the Ministry of Defence is supplying the material to the Cabinet Office.

I have to say to the Minister that any halfway competent assessment team, facing the problem of examining the existing and the potential systems for carrying a nuclear deterrent in the future, could do a comprehensive study over a period of probably not more than two or three months and arguably over a few weeks, on the basis of the accumulated knowledge of half a century that we have in the business of strategic nuclear deterrence. I would therefore like to know what progress such a study is making or whether it will in fact be spun out until the next general election. The reality is that there is no alternative to Trident for the next generation of the strategic nuclear deterrent, and I suspect that my political opponents in the CND ranks would agree.

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

Just as an aside, does the hon. Gentleman have any concerns that the study was one of the documents put in the waste paper bin in the park?

[Dr Lewis]

I do not mind so much when unclassified documents are thrown away, but I do mind when this country’s basic protection is thrown away. I really do not want to see another hung Parliament, with both major parties having gone into an election proclaiming their commitment to the next generation of the nuclear deterrent, only for a small third party that is adamantly opposed to that deterrent, but which does not have the guts to wear its unilateralism openly, to blackmail the leaders of those two parties in turn, saying, “You get rid of this weapons system and we will make you Prime Minister.”

--- Later in debate ---

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

It is always a pleasure to serve with you in the Chair, Mr Hood. This is my first opportunity to speak as shadow Minister since the Minister’s warm welcome last week at Defence Question Time. Looking back through Hansard, it is a little surprising that this is the first Westminster Hall debate on procurement since the last election, with the exception of two half-hour debates. I therefore warmly congratulate the hon. Member for Sittingbourne and Sheppey (Gordon Henderson) on securing this debate. He certainly ranged widely, as promised, and highlighted the broad scope and reach of the Ministry of Defence in procurement. There are major challenges in balancing defence equipment needs while ensuring value for money and retaining the essential skills base to support sovereign capability.

I know that I am not the only MP in the Chamber who has a sizeable defence community in their constituency. Before the last election, my constituency was called Plymouth Devonport, which included Her Majesty’s naval base at Devonport. Thanks to the Boundary Commission, it looks like it might be coming back at the next general election, but we shall see. For me and many hon. Members, providing the right equipment to our troops when they need it, so that they can carry out the work for which they have been trained to the best of their ability, is of upmost importance. A number of hon. Members in the Chamber and I have constituencies filled with military personnel and their families, and I often pick up concerns on the doorstep. I should say at this point that I am delighted to have 29 Commando back in Plymouth, safe and sound. It is right and proper to debate the issues here today.

I listened with interest to the speech made by the hon. Member for Sittingbourne and Sheppey and particularly to his reference to the British Army training unit, Suffield, based in Alberta on the Canadian prairies. It is worth noting that the reason why the British Army started to use that training site was due to the loss of El Adem and Tobruk in Libya when a certain Colonel Gaddafi came to power. The hon. Gentleman’s point about the need for bases in secure venues is absolutely right. Suffield was used briefly during world war two, and since 1972 it has been used as a British Army training base, initially on a 10-year lease. The agreement has been repeatedly renewed, which the hon. Gentleman touched on. I believe that a rolling programme of indefinite use is being offered. I note his comments and questions regarding that area. Other hon. Members also quite rightly challenged whether money was being best spent by the MOD on upgrading the premises there. I will listen with interest to the Minister’s answers to those questions.

The hon. Member for Sittingbourne and Sheppey also touched on morale and beer prices, and he raised a genuine concern about how new companies break into the MOD marketplace, to which I will come later in my speech.

My hon. Friend the Member for Barrow and Furness (John Woodcock) flagged up some potential problems, such as the need to secure the skills agenda and the loss of historic capability in Barrow, which is a lesson that we cannot forget. He also spoke about the implications of delays for contracts and cost overruns that follow.

The hon. Member for St Austell and Newquay (Stephen Gilbert), in supporting concerns about the rotation of staff in procurement, raised a challenging issue. That did not used to be the case, because officers used to be retained within certain specialties, and a number of senior and ex-members of the armed forces have spoken to me on exactly that issue in the past. I hope that the Minister will respond to that, because that area deserves consideration.

My hon. Friend the Member for Islington North (Jeremy Corbyn) asked a series of serious questions about Trident replacement and whether it is needed. He has always campaigned on that issue with a great deal of commitment. Again, I want to hear what the Minister has to say about the time scale and transparency regarding Trident.

My hon. Friend the Member for Blaenau Gwent (Nick Smith) raised the issues of contracts and transparency and of the cost of the over-specification of projects.

The hon. Member for New Forest East (Dr Lewis) is on the flip side of the coin from my hon. Friend the Member for Islington North. He described, with benefit of his long-standing interest and knowledge in defence matters, some of the problems regarding procurement and politicians’ role in muddying the waters, if I am to be gentle about what is going on in the coalition regarding Trident.

[Dr Julian Lewis]

Because there has been such candour on Government Benches about muddied waters, for the sake of clarity, will the hon. Lady take the opportunity to reaffirm her party’s firm commitment that Trident should be renewed and replaced by the successor system?

[Alison Seabeck]

The hon. Gentleman and I both stood on manifesto pledges that said exactly that. I also thank him for his kind comments in welcoming me to my new role.

I would like to look more generally to the future of defence procurement. It would be remiss of me not to thank my predecessor in this role, my hon. Friend the Member for Barnsley East (Michael Dugher), for his work alongside that of my right hon. Friend the Member for East Renfrewshire (Mr Murphy) in taking forward Labour’s review on defence procurement—not least in commissioning the report from Admiral Lord West, Bill Thomas from Hewlett Packard and Tony Roulstone from Rolls-Royce Nuclear. I thank them for their incredibly detailed and thought-provoking report, which builds on the work carried out under the previous Government by Bernard Gray, who has been brought in by this Government as the new Chief of Defence Matériel.

In response to questions last week, the Minister told me that he had read the report, although from our exchange last Monday, I think that there might be some differences in interpretation. However, I believe that we need, on the back of the report and Lord Levene’s excellent work, to look at structural reforms and at how, despite repeated attempts by successive Governments, we have failed to tackle overpriced and overrun projects. The Public Accounts Committee and the National Audit Office have clear views and some pretty sharp criticism on that. The Gray report did not mince its words either when talking about overheating in the equipment programme and the inability of the system to flesh out the real cost of equipment at an early stage.

We need to have a defence procurement policy that works with an active industrial policy—one that promotes defence exports, an area in which we in Britain excel and should continue to do so. The hon. Member for Sherwood (Mr Spencer), who is no longer in his seat, pointed that out. While value for money is clearly important, so is the quality of the product supplied to our armed forces, and British products are among the best. More than 21% of the global market in the past five years was met by British production, and we are the largest exporter to the European Union. Also, there is evidence that competition in the export market leads to an enhanced drive for innovation and improvement in those companies, from which the MOD could benefit. The make or buy proposals in the report submitted to the shadow defence team—it is good reading—deserve some further consideration. We all agree that we need a sustainable defence industrial base that can continue to deliver in the long term. Will the Minister let us have his thoughts on the proposal in the Gray report for a 10-year rolling budget, which does not seem to have found full favour with the current Government?

The hon. Member for Gosport (Caroline Dinenage) was absolutely right to say that small and medium-sized enterprises need a degree of long-term certainty when it comes to supporting programmes, particularly bigger programmes. My hon. Friend the Member for Islington North rightly mentioned the need for diversification of industry. It is all to the good if companies can diversify and find other markets, but there are a number of firms, of which I have several in my constituency, that are incredibly specialised in what they do. They provide bespoke products for defence purposes and it is difficult for them to expand, change or move on from what they do.

I welcome the Minister’s thoughts on all those issues. Will he tell us what sort of relationship he has with his colleagues in the Department for Business, Innovation and Skills and what the feelings are about the need to join up procurement policy, which is such an important element in all this?

Finally, is the Minister happy that, for future procurement policy, there is a clear enough delineation between the absolute sovereign capability and the deployment sovereign capability? Is that something that will be made clear in the expected White Paper? Given the ever-changing nature of conflict, the need for greater co-operation between nations, the drive to secure British business opportunities in this field and the economic challenges that we face, we need to ensure that Governments now and in the future have in place the best systems through which to deliver equipment that is designed to enable the front-line soldier to survive, operate and fight. We also need the best technology and back-up for our armed forces, so that they can deliver force wherever and whenever it is required. I look forward to the new White Paper, because there is a real opportunity to make a difference in this particular sphere of MOD procurement.

--- Later in debate ---

[Peter Luff]

It does not feel like that from this side of the fence. I look forward to the conclusions of the PAC on the forthcoming NAO report.

I accept that we need to be clear about how we plan to acquire and support our equipment for the armed forces, which is a point that my hon. Friend the Member for Gosport mentioned. The support costs are typically about two thirds of the total acquisition cost, with one third being the initial acquisition. We also need to be clear about how we invest in technology to sustain the skills of the defence industry, which is something that the hon. Member for Islington North (Jeremy Corbyn) raised. That was about the only thing that I agreed with in his speech.

The scale of what we spend is huge; the total spend for the whole range of procurements in the financial year 2009-10 was £20.6 billion. It is right that hon. Members should be concerned about how we spend that money. It is also right that we should say that much of that is spent very well, very wisely and very effectively by skilled and talented people. It is inevitable that we concentrate on the problems, because that is the nature of Parliament and holding the Government to account is what we do. None the less, I pay tribute to all those who do their jobs remarkably well, whether they are in the armed services, the civil service, the MOD Abbey Wood or the organisation Defence Equipment and Support. They all do a great job serving our nation.

It is true that we face some difficult decisions. I will not score any partisan points by talking about our economic inheritance, and especially the inheritance for Defence Ministers, from the previous Government. In a characteristically thoughtful and articulate speech, my hon. Friend the Member for New Forest East (Dr Lewis) spoke about the need for fixed points in programmes for decisions. As he said, such a measure is important given the long period over which such decisions are felt. As I am frequently reminded, the last captain of the aircraft carriers that we are currently building is probably not even born yet, which puts into context the length of time we have.

I think that I can give the hon. Member for Plymouth, Moor View the assurance that she sought about the 10-year equipment programme. As I understand it, we now have a groundbreaking deal with the Treasury, which enables us to plan with much greater certainty the future of defence equipment and support in general.

I also want to pick up something that my hon. Friend the Member for New Forest East said about the previous Secretary of State, my right hon. Friend the Member for North Somerset (Dr Fox). The MOD is now set on a path of real recovery, real hope and real confidence thanks to his excellent work. It now falls to the ministerial team to continue that work as a tribute to his sterling leadership as Secretary of State.

I will concentrate my remarks on the speech of my hon. Friend the Member for Sittingbourne and Sheppey, because I owe him that courtesy. If I cannot deal with everyone else’s comments, I apologise and will write to them. I will not comment on individual cases, but I reassure my hon. Friend that the support that we give to SMEs has a high priority in my portfolio. I pay tribute to Vector Aerospace, which is one of the few companies that have been named in this debate. It is an outstanding example of a medium-sized company.

We are making a few changes that should help the SMEs considerably. We are reducing the threshold at which the MOD advertises contract opportunities and have created the new defence suppliers forum, which meets regularly under my chairmanship, to discuss how SMEs can make a better contribution to defence and how we can help them achieve that. We are learning a lot from that group’s work. We are launching a new Government-wide contracts finder that offers a free-to-access one-stop shop of public sector opportunities over £10,000. There will be more in the White Paper, the publication of which I too look forward to very much indeed. I cannot say too much about its contents but it will include a definition of value for money—something that many Members have mentioned—and talk more about outsourcing. Although there is already extensive outsourcing in defence—more extensive that many people realise—I agree that there is scope for more. The White Paper will also address the framework agreement on technical services and through-life costing, which is essential.

I am happy to reassure the hon. Member for Plymouth, Moor View that our relationship with BIS is excellent and that there is nothing between us. I know that she would expect me to say that, but it happens to be true as well.

The White Paper will also define sovereignty requirements. I do not foresee any change in the definition that was published in the Green Paper last year.

I will now specifically address the remarks of my hon. Friend the Member for Sittingbourne and Sheppey. I note that he worked for GEC Marconi, where he apparently ran rings around our officials. That issue is why Bernard Gray is working at present on the new matériel strategy. One of the principal purposes of that strategy is to ensure that we have the skills in place in Defence Equipment and Support to make sure that these procurement decisions are taken well and that the contracts are well negotiated. My hon. Friend has made a powerful point, and that work is ongoing. I hope that submissions to Ministers will come before the end of the year. And watch this space, because I agree that it is important that we do procurement and acquisition well, which has not always been the case. In the spirit of consensus, I think that the Opposition’s document on acquisition is not at all bad. In my view, all it lacked was an apology, but that is another matter for another day.

Turning to Canada, I am pleased that my hon. Friend and other hon. Members obviously had such an interesting visit to the British Army training unit Suffield—BATUS—over the summer with the armed forces parliamentary scheme. That is a great scheme, which works very well under Sir Neil Thorne’s excellent leadership. I have benefited from it twice with the Royal Navy— I am a “postgraduate” according to the scheme’s definitions. Today has shown how valuable the scheme is in enabling Members to speak with authority about the armed services and to challenge Ministers on things that they find. It is what the scheme is there for, and we need to make even better use of it than we do already.

I slightly disagree with my hon. Friend’s emphasis and what I think was the spirit of his remarks when it comes to Canada. Led by my right hon. and hon. Friends in the Foreign and Commonwealth Office, Her Majesty’s Government are looking to develop even closer ties with Canada, as well as with other Commonwealth countries. A joint declaration of closer working between the UK and Canada has been drawn up by the FCO for signature by the two Prime Ministers, with a desire to seek

“greater interoperability between our defence forces and deepen co-operation on procurement and capabilities, to be enabled in part by a Memorandum of Understanding - MoU - on Defence Materiel Cooperation”,

and so on and so on and so on. The document was signed on 22 September by the two Prime Ministers, and it symbolises the very close relationship that we enjoy with the Canadians.

I will now talk about BATUS in more detail. As my hon. Friend the Member for Sittingbourne and Sheppey reminded us, it was set up in Canada in 1972. The location was chosen for its ability to provide the large-scale manoeuvre exercises that at the time—the middle of the cold war—were seen as being critical to meeting the UK’s operational and tactical requirements. BATUS provides 2,690 sq km of rolling, semi-arid prairie, delivering training on a scale that is unparalleled by anything available in the UK and enabling more than 11,000 troops to be trained each year. I want to place on record our real gratitude to the Canadians, who have been our utterly reliable allies in providing this world-class training location since 1972, which allows us to train in a way that is just not possible in the UK. The training at BATUS has been essential for the preparation of our troops for operational deployments, and we owe the Canadians a great debt for the part that they have played in enabling the training to happen.

[Alison Seabeck]

I want to ask the Minister a simple question: do BATUS and the recent new agreement give scope for any increased use of BATUS, as the German side starts to scale back?

[Peter Luff]

The hon. Lady not unexpectedly anticipates remarks that I will make in a few moments. I will turn to that issue then, if I may.

I will now address the concerns of my hon. Friend the Member for Sittingbourne and Sheppey about the costs involved with BATUS. The BATIC—British Armed Forces’ Training in Canada—agreement makes clear provision for the cost-sharing of goods and services relating to UK training in Canada, including the provision of all goods, services and facilities supplied in Canada or procured through Canadian sources. The costs are shared in accordance with agreed formulae, which my hon. Friend talked about in his speech, and those arrangements are scrutinised carefully. In addition, the memorandum of understanding is open-ended and may be renegotiated—that will give my hon. Friend some encouragement—at any time with the mutual consent of both parties.

In my view, the UK quite rightly pays the lion’s share of the costs of BATUS, on the basis that we use the facility significantly more than the Canadians. That is absolutely right and proper, and I have no problem with the cost-share involved in these arrangements. I agree that there is always scope to reduce costs, but other locations, as suggested by some hon. Members during this debate, are simply not equivalent and they would incur costs of their own, including significant set-up costs. So I am sure that the scope for savings is always there, but it may be more limited than my hon. Friend imagines.