Ministry of Defence

Edward Leigh Excerpts

Monday 26th February 2018 Commons Chamber

[Sir Edward Leigh (Gainsborough) (Con)]

This is the first proper departmental estimates debate, thanks to the Procedure Committee and the Backbench Business Committee. In our 2012 report to the then Chancellor of the Exchequer, “Options to Improve Parliamentary Scrutiny of Government Expenditure”, Dr John Pugh, who was then a Member of Parliament, and I included a recommendation to introduce additional estimates days on subjects to be suggested by a budget committee that we also proposed to create. Dr Pugh decided to test this matter by trying to talk on the subject of estimates on estimates days. He was ruled out of order by your Deputy Speaker, Mr Speaker, despite speaking about estimates on estimates days.

The reason we are here today is thanks to the work of the Procedure Committee, which I had the privilege of serving on in the previous Parliament.

[Mr Speaker]

Of which the hon. Gentleman was, I think I can fairly say, a distinguished ornament.

[Sir Edward Leigh]

I put it to the Procedure Committee, and it recommended to the Backbench Business Committee, that we take on the role of determining estimates to be debated on estimates days. Scrutiny of the Government’s supply estimates was listed under “unfinished business” at the end of the previous Parliament. It is thanks to the current Committee and its Chairman, my hon. Friend the Member for Broxbourne (Mr Walker), that this business is no longer unfinished and we have now decided to debate estimates on estimates days. It is quite shocking how little power or influence the House of Commons has over spending in the estimates procedure, with a budget of some £800 billion a year. We have one of the best post-hoc systems in the world, through the Public Accounts Committee. We have one of the weakest systems in the world in terms of parliamentary scrutiny of what we are planning to spend, not of what we have spent.

Estimates days, as they have existed, have borne little relation to the actual content of the departmental estimates. Let me give a little bit of history, which is always interesting. This debate has gone on for quite a long time. In 1911, the then Clerk of the House, Sir Courtenay Ilbert, said:

“The sittings of the committee of supply continue through the greater part of the session, and, under existing standing orders, at least twenty days must be set apart for this purpose” .

Already, estimates days were just being used as a kind of general critique of government rather than actually to deal with what we were going to spend. Another report, in 1981, said:

“By 1966 there was a considerable discrepancy between the theory of supply procedure, under which individual estimates were put down for detailed consideration at regular intervals, and the practice, under which supply days were used by the opposition to discuss topics of their choice”,

which often had little, if anything, to do with the votes concerned. Indeed, the Clerk Assistant told the House that by the 1960s more and more supply day procedures had gone through which were “Little short of farcical”. I am glad that thanks to the Procedure Committee, and all the work that has been done and the debates that we have had, we are now going to talk about money.

However, given that the Government intend this parliamentary Session to last for two years, the already insufficient allocation of days for estimates days is doubly inadequate. Overall, in the past 100 years the House of Commons has delegated its role to the Treasury. We in this Chamber should be doing more. Why should we leave it just to unelected civil servants to debate what we spend and how we allocate spending among Government Departments? This House is asked to approve Executive spending even though we are not given much clarity about what that spending is expected to deliver, nor indeed the means to influence spending levels or priorities. As long ago as 1999, the Procedure Committee said that

“when motions are directed to future plans, motions recommending that ‘in the opinion of the House’ increases in expenditure or transfers between certain budgets are desirable, should be permissible.”

I believe that Select Committees should have stronger powers to investigate and scrutinise public spending. In Australia, Select Committees also sit as estimates committees, with Ministers and departmental body heads appearing before MPs or Senators to justify their spending. In other Commonwealth countries, quite a lot of work has been done on this. For instance, in several other countries with public financial management systems that are based on the British system, estimates include spending information at a programme level, with past spending information for each programme and medium-term estimates of the cost of the programme covering the Budget year and at least two further years. Good estimates help us to understand the link between Government priorities, desired impacts and the contribution of programmes to them.

There is still a lot of work to do. I would have thought that parliamentary scrutiny of the Budget was at the very heart of this body’s raison d’être. We have fought wars on this very subject yet are not particularly bothered by the comparatively little scrutiny we have of Government spending. Debates such as this one will, I hope, encourage broader participation of Members of this House in the formal budgetary process. We have a range of experience and points of view. I hope that this use of the debate to look at the Ministry of Defence estimates might also encourage us to have a more substantial debate on defence in general.

When I saw that at last we were going to get this estimates day debate, I approached my right hon. Friend the Member for New Forest East (Dr Lewis), the Chair of the Defence Committee, because I thought there was no better subject than defence to lead off on in discussing Government spending on an estimates day. That is why we are here, and this is a real opportunity. I will now talk a little bit about defence, although I recognise that there are people who are far more expert than me in this Chamber.

[Toby Perkins (Chesterfield) (Lab)]

I am grateful to the hon. Gentleman for giving way and thank him for achieving this debate. Is he surprised and disappointed that the Secretary of State is not here to respond? We are very much aware, through the press, that the Secretary of State appears to be pushing for greater budgets for the armed forces. It would have been nice if he had been here today to tell us all about the work he is doing.

[Sir Edward Leigh]

Well, I think it is very nice that we have such an impressive Minister as the Under-Secretary of State for Defence, my right hon. Friend the Member for Bournemouth East (Mr Ellwood), sitting in front of us.

[The Parliamentary Under-Secretary of State for Defence (Mr Tobias Ellwood)]

On that introduction, how could I fail to get to my feet? The Defence Secretary sends his apologies. He is with the Prime Minister, telling her what he is doing, which I think is appropriate, given the challenges on finances that we face.

[Sir Edward Leigh]

I am grateful for that.

Given our commitment to spend 2% of GDP on defence, as is required of NATO members, which most NATO countries ignore, we will have to spend more on defence regardless, in order to keep with up that target. That is the challenge we face.

[Nick Thomas-Symonds (Torfaen) (Lab)]

I am grateful to the hon. Gentleman for giving way and for the way he has introduced the debate. Of course it is important that we scrutinise the estimates, but we need substantial amounts of money to consider. Does he share my concern about a lack of amphibious capacity, which could reduce our capacity to carry out humanitarian missions, for example?

[Sir Edward Leigh]

That is an extremely good point, and if I have time I will deal with amphibious capacity later in my speech.

This is a real challenge. As Professor Malcolm Chalmers, deputy director-general of the Royal United Services Institute, pointed out in his evidence to the Defence Committee:

“While the MoD budget is set to grow by 0.5 per cent per annum over the next five years, national income (GDP) is projected to grow by an average of 2.4 per cent per annum over the same period.”

That means that the current Government commitments to defence spending imply that UK defence expenditure will fall from 2.8% of GDP in 2015-16 to 1.85% in 2020-21. I believe that Ministers need to come clean and make it clear whether they intend to abandon the 2% commitment, as seems to be the case.

[Mr Kevan Jones (North Durham) (Lab)]

I am grateful to the hon. Gentleman for giving way. He says that the Government are committed to a 0.5% increase, but does he agree that that is just on equipment, not personnel? Something like 55% of the budget goes on daily running costs and people, and that will be completely constrained if no new cash is put into the people side of the budget.

[Sir Edward Leigh]

That is an extremely good point, and I will come on to deal with the people side.

As the Defence Committee has pointed out, there appear to be some shenanigans going on in relation to how we reach the 2% target, and this is a really good opportunity for us to discuss money in detail and for the Minister to reply to these points. The criteria seem to change from year to year, with new bits—war pensions and other expenditure—qualifying when they have not previously done so. NATO is apparently satisfied, but this rather gives the impression that we are meeting our targets only by means of creative accounting, and when it comes to the defence of the realm, surely creative accounting is not good enough.

Let me say a word about procurement. What are our procurement procedures, and are we getting value for money? Professor Julian Lindley French testified, again to the Defence Committee:

“If you look at the $90 billion being spent by the Russians as part of their modernisation programme, the $150 billion or so being spent by the Chinese and what other countries around the world are doing, what strikes me is how few assets—both platforms and systems—the UK gets for its money.”

As a former Chairman of the Public Accounts Committee, I am talking not just about more money for the MOD, but about spending the money more wisely.

The MOD committed itself to new purchases arising from its 2015 strategic defence and security review before it established how they could be paid for. This requires the MOD to generate £5.8 billion of new savings from within the defence equipment plan itself, in addition to £1.5 billion from the wider defence budget, which is already under pressure. We never of course know what crisis may happen, and if a crisis happens and our troops have to be deployed, where will the money come from? In such a case, will we end up taking money from procurement that we had not expected to take?

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

I thank the hon. Gentleman for giving way on that very important point and for his excellent introduction to the debate. Does he recognise the issue of the defence inflation rate, which in recent years has been 3.9%, while background inflation has been just 0.8%, leading to a real depreciation in real purchasing power for defence? Is that not the root cause of the problems we are seeing with the attrition of defence capability?

[Sir Edward Leigh]

That point on purchasing power is a very pertinent one. I hope that the Minister replies to it, because it is a point well made.

Uncertainties and over-optimism—there is over-optimism—in the project costs mean that the final costs of the defence equipment plan may be significantly understated. The MOD’s cost assurance and analysis service reported that the costs in the 2016 plan were understated by £4.8 billion. Over a period of years, the MOD has failed to agree a workable way forward with the prime contractor on the procurement of a Type 26 warship, which has compromised maritime capability and placed further upward pressure on costs.

[John Howell (Henley) (Con)]

My hon. Friend is being very generous in giving way. Does he see the recently announced combat air strategy as a similar sort of programme, and what might its impact be on procurement?

[Sir Edward Leigh]

That is a good point. Again, I hope the Minister replies to it. It may be a case of when times change, procurement policies change, but will that result in more pressure? What I am saying—several Members, particularly my hon. Friend, have made this point in their interventions—is that the defence equipment plan has no leeway to cope with new equipment requirements resulting from emerging threats. As the National Audit Office’s investigation of the plan put it:

“The Department’s Equipment Plan is not affordable. It does not provide a realistic forecast of the costs of buying and supporting the equipment that the Armed Forces will need over the next 10 years.”

If it does not do so, what is it for? The NAO continues:

“Unless the Department takes urgent action to close the gap in affordability, it will find that spending on equipment can only be made affordable by reducing the scope of projects”.

We have had training exercises cancelled, and we know that soldiers, sailors and airmen need to keep active so that they are fully trained and at the ready. Cancelling training exercises is short-sighted and a false economy.

Just to be fair for a moment to the MOD and the pressures it is facing, we are not the only ones having problems. Documents linked to Die Welt newspaper show that the German military has secretly admitted that it cannot fulfil its NATO obligations. The Bundeswehr was due to take over the rotating lead of NATO’s Very High Readiness Joint Task Force, but despite committing 44 Leopard 2 battle tanks to the force, it was revealed that only nine are operational. It begins to look as though the arrangements for the conventional defence of Europe are a bit of a shambles.

The reality is that we are underspending, just as we did in the lead-up to the second world war. Back then, we were capable of jump-starting and expanding our defence capabilities because we faced an existential threat. God willing, we will not face that kind of threat in the coming years, though we can never rule out the possibility.

[Mrs Madeleine Moon (Bridgend) (Lab)]

One of the problems with being in a NATO alliance—I know this as a member of the NATO Parliamentary Assembly—is that there is nowhere to hide from our allies, and allies are noticing that Britain is withdrawing from exercises. They are concerned because they have seen Britain as an ally on which they could rely and depend. Does the hon. Gentleman agree that one of the most worrying things is the lack of credibility of our armed forces—valiant though they may be—because of the cuts we face in expenditure?

[Sir Edward Leigh]

That is a very good point. With France, and after America, we are the leading military power in Europe and we have to set an example. If we withdraw from exercises, that creates a bad impression.

I am glad to see that the hon. Member for Gedling (Vernon Coaker) is here. He introduced his Backbench Business debate on defence last month and pointed out that the risks this country faces are only intensifying. If we face a multiplicity and variety of threats, surely our capabilities must reflect that. Russia is indeed a threat again, because it realised that the only way to be taken seriously is to be seen to be a threat. We treated Russia with contempt during the 1990s and it has drawn the lesson. It is a geopolitical gamble that we may not approve of, but in terms of Russian influence it has paid off. What have we been talking about for the past hour except Russia? According to some estimates, its economy’s GDP is equivalent to that of Italy or even that of Australia. Russia’s emphasis on its defence spending has made it an extremely important geopolitical player. Although we are constantly told that times have changed and that defence spending is not as important as it was, perhaps the Russian example shows that defence spending does pay off. I am not for one moment defending or approving of Russia or anything it does, but it has drawn the obvious lessons from the 1990s. There is a threat from Russia and we need to take it seriously.

Surely one lesson we can draw from the past, particularly from the lead-up to the second world war, is that, in terms of commitments, we must have a real presence. There is no point in our having a token commitment to or presence in the Baltic states; we need a real presence if deterrence is to work.

Many other threats are developing from Russia, the Chinese and other potential opponents: cyber-attacks and information warfare are all potential threats.

[John Spellar (Warley) (Lab)]

The hon. Gentleman rightly identifies the potential difficulties on the north European plain. Should not the Ministry of Defence therefore reconsider its decision to withdraw from north Germany and reinstate our capability there?

--- Later in debate ---

[Sir Edward Leigh]

Yes, I certainly think it should reconsider it. All the old, conventional threats are still very real and require conventional responses. We have to maintain our original capabilities while also expanding and improving them.

On the range of capabilities, last year Hurricane Irma wreaked devastation in the Caribbean, and HMS Ocean was a key element in our response to that tragedy. Now, apparently we have sold HMS Ocean to the Brazilians, but we have a proud humanitarian tradition on these islands and it is our duty to maintain it. This is not just about responding to threats; it is also about our humanitarian duty. We have direct responsibility for our overseas territories and bonds of close friendship with other members of the Commonwealth.

Ministers have so far refused to commit to keeping HMS Albion and HMS Bulwark, which give our armed forces an amphibious landing capability, as the hon. Member for Torfaen (Nick Thomas-Symonds) said in an earlier intervention. The hon. Member for Barnsley Central (Dan Jarvis) pointed out last month that

“40% of the world’s population live within 100 km of the coast”.—[Official Report, 11 January 2018; Vol. 634, c. 516.]

I voted against the Iraq war, but the fact remains that we made a very effective contribution with our amphibious invasion of the al-Faw peninsula in 2003. I may not always be in favour of using military options, but I want, and the British people demand, that we have as many options on the table as we can and that we maintain our capabilities.

Meanwhile, there are proposals to cut the Royal Marines, some of our most useful, well-trained, high-quality and greatly effective troops. The variety of roles they can undertake underpins the ability of Great Britain to project our military power. As I will mention in a moment, this has led to low morale and a culture of fear for the future in one of the most important and valuable parts of our military.

Then there is the Navy. I received an email—one of many that have been sent to many Members from all sorts of sources—from a former Army major, writing to me through “gritted teeth”:

“the area of defence that has been shockingly neglected is the Royal Navy. Put Trident to one side and disregard the vanity project that is HMS Queen Elizabeth and you have virtually no ships. The Royal Navy has to be the most important service for an outwardly facing island nation.”

I agree with that. In December 2017, all six of our Type 45 destroyers were laid up in Portsmouth, whether for repairs, equipment failures, routine maintenance or manpower shortages. The possibility of a significant crisis requiring a naval deployment catching us not ready is strong—too strong.

[Toby Perkins]

I am grateful to the hon. Gentleman for giving way again. He is absolutely right. In December 2017, not only were none of our destroyers out, but, as revealed by an answer to my parliamentary question, for the first time in history not a single Royal Navy frigate or destroyer was deployed overseas. That demonstrates powerfully the scale of the pressure on our Royal Navy and its lack of capability.

[Sir Edward Leigh]

That is a very good point and that was a worrying incident.

On recruitment and numbers, the Public Accounts Committee “Army 2020” report notes that

“the Army’s recruiting partner, Capita, missed its regular soldier recruitment target by 30% in 2013-14 and it recruited only around 2,000 reserves against a target of 6,000. A huge step-up in performance is required if the Army is to hit its ambitious target of recruiting 9,270 new reserves in 2016-17. The size of the regular Army is reducing faster than originally planned but the size of the trained Army reserve has not increased in the last two years because more people have left the reserve than joined.”

We have shifted from an emphasis on the Regular Army to one that includes a very strong Army reserve. All the same, we still need a Regular Army, but we are not meeting targets for that either. Our force strength numbers are not up to scratch. In April 2016, we were short by 5,750 personnel. A year later, that had increased to over 6,000. By August 2017, it was over 7,000 and the latest statistics available show our armed forces are short of their full strength by 8,160 men. The problem is getting worse.

[Stephen Kerr (Stirling) (Con)]

My hon. Friend highlights a very important point. What I cannot understand is why it takes the best part of a year for someone to be able to join the armed forces. Surely that should be addressed as a matter of urgency.

[Sir Edward Leigh]

There is clearly a problem, one I hope the Minister will deal with later. Why does it take so long to recruit? Are we putting off potential recruits with our very slow processes?

[Mr Mark Francois (Rayleigh and Wickford) (Con)]

Just before my hon. Friend moves on from the issue of recruitment, does he agree that the performance of the Capita recruitment partnering project contract has been distinctly sub-optimal, and that if this continues for very much longer the Ministry of Defence would be wise to seek an alternative?

[Sir Edward Leigh]

My right hon. Friend is of course a former Minister for the Armed Forces and really does know what he is talking about. The Government should listen to him.

There is a problem with morale. Those who perceive service morale as low increased by 12% on the previous year in the Army and 15% in the Royal Marines in 2017. The overwhelming majority, 74%, feel proud to serve—we are proud of them for feeling proud to serve—but only a third feel valued by their service. What is the point of training men and women if we fail to keep them?

[Mr Sweeney]

On retention, the hon. Gentleman referred to the reservists and the recruitment challenges that they face. My infantry battalion—a reserve battalion—has seen a significant influx of former regular soldiers echeloning through from the Regular Army as it has been severely downsized, including by, in effect, the disbanding of an entire battalion of the Royal Regiment of Scotland. The concern is how long these former regular soldiers will remain reservists before they move out altogether, because they have benefited from a transition payment. Could that financial incentive just be temporary, and will we see a further pressure on reserve recruitment in the longer term?

[Sir Edward Leigh]

That is a fair point. Pressures build on pressures.

In conclusion, the problems are many, but they must be tackled head on. Speaking personally, my record on spending and saving is clear: I think that the state should spend as little as possible. However, we also have responsibilities of absolute necessity, such as the defence of the realm. It is not pompous to say that—it is an absolute fact. That is the first responsibility of what we do in this House and we are falling short. The Government simply have to commit to spending more if we are to have the armed forces that this country requires. In order to maintain our independence—not just our sovereignty, but our freedom of action and ability to make our own decisions rather than be dictated to by circumstances—we need highly trained, fully manned, well-equipped armed forces. For a trading island nation on the cusp of Brexit and turning her face to the world, Great Britain must turn the tide of decline in defence.

I hope that this debate will prove to be a turning point, but that is up to the Government to decide. One thing is sure: further stagnation and cutting capabilities will set us back further. Once again, I am reminded of the wise words of Admiral Andrew Cunningham during the battle of Crete. Exposed to German air assault, his ships were taking heavy losses as they helped to evacuate the Army from Crete to Egypt. Some suggested that he should suspend the Navy’s part in the evacuation, saving his ships but ending the tradition of solidarity under fire among the armed forces. Cunningham knew that the Navy must not let the Army down and he refused. He said these words:

“It takes three years to build a ship, but it takes three centuries to build a tradition. The evacuation will continue.”

Our traditions of a great nation and great armed forces must continue. That is why this important debate must continue, too.

--- Later in debate ---

[Sir Edward Leigh]

This has been an historic debate. For the first time in nearly 60 years, the House of Commons has discussed estimates on estimates day. I have been campaigning for this for 10 years, and the quality of this debate has vindicated the decision to discuss money on estimates day. I am so pleased that I persuaded my right hon. Friend the Chair of the Defence Committee to make the Ministry of Defence the subject of this first estimates day debate on money.

Everybody has spoken with one voice. This has not been a party-political debate in that sense. Whether from New Forest East, Gedling, Moray, Aberdeenshire, Glasgow, Aldershot or Rayleigh, everyone has made the point—and the Minister has just echoed it, one of the first times that I have heard it from the Front Bench—that spending 2% on defence is simply not enough.

In the spirit of consensus, I echo what the Opposition spokesman said—that we cannot get security on the cheap. I also echo what the hon. Member for Gedling (Vernon Coaker) said, and I tell the Secretary of State to go back to the Treasury and No. 10 Downing Street and say that every single Member, from the SNP, the Conservatives and Labour has made this point—[Interruption.] And the Liberal Democrats. How could I forget the great speech about the contribution of the local regiments in Caithness? Members spoke with one voice. The Secretary of State can go back and say, “This is not like the 1930s. This is not like the Fulham by-election when we were worried about public opinion on disarmament. We have the support of the whole House.” He should go back, get the money and make sure that we defend our country.

Question deferred (Standing Order No. 54).