UK Defence Spending

Chris Evans Excerpts

Thursday 24th June 2021 Commons Chamber

[Chris Evans (Islwyn) (Lab/Co-op)]

I thank the Backbench Business Committee for granting the time for this important debate during Armed Forces Week, when we celebrate the service of the brave men and women, and all those who support them, who make our forces the very best in the world.

I thank my right hon. Friend the Member for North Durham (Mr Jones) for leading the debate. His wealth of knowledge in this area is incredible, matched only by my right hon. Friend the Member for Warley (John Spellar). I think everyone will agree that the House is well served by the members of the Defence Committee. We also heard strong contributions from my hon. Friends the Members for Birkenhead (Mick Whitley) and for Easington (Grahame Morris), who spoke about the importance of the defence industry to their constituencies.

There can be no doubt that, for the Ministry of Defence, the £16.5 billion extra in defence spending that the Prime Minister announced in November would have been welcome news, especially when it was staring into the abyss of a £17.5 billion black hole in its budget. That money should be an opportunity to balance the defence budget and effect the type of change that the Ministry of Defence so badly needs in its culture. Instead, the Prime Minister announced grandiose plans in the integrated review, which included new capabilities in space and cyber, international partnerships and more collaboration between the MOD and the defence industry. Unfortunately, as always seems to be the case with the Prime Minister, he was short on the detail of how it will all be paid for. However well it plays with the headline writers, jingoism does not account for a clear and concise strategy.

The defence and security industrial strategy lacks a clear rationale about how it will be delivered without proper oversight and project management. Even the most ambitious plans will be derailed by other spending decisions. One of the aims of the DSIS is a mutually supportive, collaborative approach between the MOD and the private sector. That is a cultural shift from the adversarial approach that has characterised defence procurement in the past. It cannot happen overnight. Skilled project management and clear strategies are required to enable that transformation to take place. It is not enough for the Government to state their desired intentions. They must tell us how the plan will work and what needs to be done now to ensure that people with the correct skills are in place and that measurable progress can be made.

Corporate confidence will take time to build. Industry will not be willing to offer increasing transparency without being certain that the MOD has a coherent and deliverable plan. The aspirations of the DSIS and the integrated review are long term, but the MOD has problems right now. As I have said, the MOD’s defence equipment plan faces a funding black hole of up to £17.5 billion. The Public Accounts Committee has warned that the MOD faces additional cost pressures, estimated at more than £20 billion, to develop future defence capabilities, which are not yet included in the plan. Damningly, for the fourth year in a row, the National Audit Office deemed the defence equipment plan “unaffordable”. The Secretary of State claimed that he had personally improved affordability, but the NAO said that that assertion was based on the MOD revising its approach to assessing affordability

“rather than the result of actions to address the 10-year funding shortfall.”

Even this morning, the NAO published a report that highlights that the MOD is incapable of managing contracts to time, with delays for key defence projects of up to 254 months, and eight out of 19 major projects rated as at serious risk of failed delivery. Simply put, for the party of business, that would not be good enough in the private sector.

We cannot simply cross our fingers and hope for financial stability. These things take time and work from proper financial professionals. Yet the NAO report on the defence equipment plan says that only 41% of MOD finance staff hold a professional financial qualification. That work needs to start immediately. Ahead of the debate, I had a look at a live job advert for a commercial officer in the MOD. Strangely, even though the MOD has been told by the National Audit Office that it needs to improve the number of people with a professional financial qualification, there is still no requirement for the candidate to currently hold any financial qualifications.

On the ground, there are real concerns about delivering capability. I am sure that all Members of this House will have heard and worried about the problems with Ajax recently, which cannot be ignored. It is a long-standing issue. The Ajax vehicle has been repeatedly delayed and beset by problems. Nearly four years after the vehicle was first expected, only 14 have been delivered, at a cost of nearly £3.5 billion. Worryingly, personnel have needed medical attention after being inside them. As we heard yesterday in the Defence Committee, they cannot fire accurately on the move.

The delay on the vehicles’ delivery has left our armed forces inadequately equipped and unable to properly plan for the future. That is worsened by the cancellation of the Warrior project earlier in the year, which resulted in a larger reliance on the Ajax delivery to ensure that the Army was equipped with some modern vehicles. Our armed forces had to adapt in the light of the Warrior cancellation, and now they have been left without any new vehicles that work safely or are reliable. As it stands, the current armoured vehicle capability of the UK is perfectly summed up by the title of the Defence Committee report: “Obsolescent and outgunned”.

The cancellation of Warrior not only resulted in £430 million being spent on a vehicle that will never come to service, but has wider economic effects. We talk all the time about such figures as £430 million. They are not inconsequential sums; they will have an effect on the local economy. For example, in April this year, Lockheed Martin announced that because of that cancellation 158 jobs would be lost at the Ampthill site. The suppliers to the programme will also be hit, and the effects would have been felt in the local economy.

How can defence companies, their suppliers and small and medium-sized enterprises invest in research or apprenticeships when such uncertainty looms over them? If the MOD and the Government are going to change their mind suddenly on key equipment areas, that leaves our defence industry and our armed forces extremely vulnerable. I am not going to stand here and denigrate the DSIS. Many of the ideas are very good for an encouragement of British industry, for collaboration and for investment in research. However, judging by the MOD’s track record in the past 10 years, one cannot help thinking that those ideas are built on sand.

Some of the major components of the integrated review will take over a decade to realise, so we will require consistent and competent project management oversight. Unfortunately, there is no evidence of that now. Major capabilities are all overrunning on time and cost. Without a significant overhaul, there is no evidence that that will change. For this to work, thousands of civil servants and large numbers in industry will have to be retrained to adjust effectively to new career paths. If the integrated review is to succeed, the Government will need to demonstrate through actions, not just words, that they are able to co-ordinate inter-Department projects, support key programmes and encourage collaboration and transparency between the MOD and industry.

The easiest thing in the world for the Minister would be to dismiss all the points that have been raised today, but it is crucial that the Government get the implementation right. There is no time to wait for the plans to mystically fall in place; the work needs to start now. I say to the Minister that it is not a case of political point scoring; it is instead about the most important people in this, the men and women of our armed forces—the very people we gathered together this week to pay tribute to. Without the equipment they need and the ability to plan for what future warfare will look like, they will be unable to do what they do best: protect our great nation. We must not let them down. We must get this right; it is what we owe them for all they do for us. I welcome the more nuanced and collaborative and less adversarial approach to future contracting set out in the DSIS, but these documents include big promises and grand words and there is no detail on how they will be delivered. Publishing a plan is not the end of the story; without immediate and concrete action from the Government to lay out how progress will be made and measured, the intentions will simply remain on paper. We expect so much from our forces personnel; in return they should be able to expect only the best from us.