Defence Budget and Transformation

Baroness Stuart of Edgbaston Excerpts

Monday 14th May 2012 Commons Chamber

[Mr Speaker]

Order. There is much interest in this matter among right hon. and hon. Members. Accommodating that level of interest will require brevity in questions and answers alike.

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

The Secretary of State was enormously helpful last Thursday when he told me that procuring an aircraft carrier was slightly more complicated than buying a bottle of milk or a box of eggs. I wonder whether he will be equally helpful today. He keeps referring to the £38 billion black hole. Will he tell us how much of that £38 billion he assesses as being due to contractual commitments and therefore outside the scope of his cuts, and how much of it as being outside those contractual commitments?

[Mr Hammond]

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