Ministry of Defence

John Howell Excerpts

Monday 26th February 2018 Commons Chamber

[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.