Aircraft Carriers and UK Shipbuilding

Edward Leigh Excerpts

Wednesday 6th November 2013 Commons Chamber

[Mr Hammond]

The Type 26 order will not be placed until the design is mature, which will not be until towards the end of next year, and so the hon. Gentleman’s question is premature. A significant number of workers who are nominally based on the Clyde are being bussed on a daily basis to Rosyth to boost the work force during the carrier assembly phase, so the announcement made by BAE Systems should be read in that context. My understanding from Babcock is that the yard at Rosyth has a bright future with private sector work—offshore work—as well as with the programme to assemble both the Queen Elizabeth and the Prince of Wales, which itself will keep the yard busy until 2020.

[Sir Edward Leigh (Gainsborough) (Con)]

Has Whitehall finally learned the lessons from what, from a public accounts point of view, must be one of the worst politically driven, stop-start contracts in our history? Will the Secretary of State assure us that never again will the Treasury insist on delaying a contract for one or two years to save money and end up with a cost of hundreds of millions of pounds more? Just so that the taxpayer knows exactly how much this has cost him, will the Secretary of State repeat what the carriers were supposed to cost originally and what they are now costing us, and when the planes were supposed to be flying operationally from them and when they will actually fly?

[Mr Hammond]

It is always a brave person who says that Whitehall has learned the lessons. I can certainly give my hon. Friend this commitment: as long as I am Secretary of State for Defence, we will not be placing any contracts for things that we have not designed and we will not be driving cost into projects by making announcements of delay that are simply driven by the exigencies of poor budgeting and poor financial control. He asked me to repeat the numbers. When the project was announced in 2008 it had a budget line attached to it of £3.6 billion, but of course when the previous Government first proposed the aircraft carrier project the budget was much less than that, at £2.25 billion. Nobody I have met, in the industry or in the Navy, ever believed the project could be built for £3.6 billion. There was a degree of fantasy accounting going on, the reasons for which I will leave my hon. Friend to speculate upon.