Oral Answers to Questions

Julian Brazier Excerpts

Monday 4th November 2013 Commons Chamber

[Mr Hammond]

I do not know where the hon. Gentleman gets his information from, but as I said earlier we are five weeks into a five-year recruiting campaign, and I do not see anything about his track record that would lead me to give any particular credence to his prediction about how successful that campaign will be.

[Mr Julian Brazier (Canterbury) (Con)]

In supporting my right hon. Friend’s robust stance, may I urge him to look into the truly staggering level of delays and mistakes in the Army enlistment process? Will he urge the Army recruiting group to prove it is serious by at least getting Army recruiting offices open on evenings or at weekends?

[Mr Hammond]

I am grateful to my hon. Friend for that question and freely acknowledge that there have been teething problems with the IT support systems for the recruiting campaigns for the Regular Army and Army Reserve. I was in the Army recruiting centre myself last week with the Chief of the General Staff. This matter has the highest level of attention, both ministerial and military, and a number of initiatives will be implemented over the next few days and weeks that I expect to deliver a significant improvement in the areas that my hon. Friend highlights.

Defence Reforms

Julian Brazier Excerpts

Thursday 17th October 2013 Commons Chamber

[Mr Baron]

My hon. Friend is absolutely right. I shall be dealing with the capability gap—very briefly, if my hon. Friend will forgive me—because I think that it is an important issue, but may I test the patience of the House and stick to the cost issue for the time being? There is a real risk that, if costs rise faster than anticipated, we shall create false economies that will bring the whole project into doubt. That is terribly important, and we are right to ask questions about it on behalf of the taxpayer.

The Government have not come here to present a fully costed plan, but the pieces of the jigsaw that we can see do not reveal a rosy picture. We know from the Green Paper—and the Independent Commission to Review the United Kingdom’s Reserve Forces has confirmed this—that it costs more to train a reservist than to train a regular. We know that those who leave the regular forces to join the reserves will be given a £5,000 bounty, payable over four years. We have some questions about the reservist award, which is the difference between reservists’ pay and what they earn in civilian life. We are told that the potential cost has been accounted for, but the assumptions have not been made clear. We also know that, because employers are reluctant to let key employees go for extended periods, the Government have come up with an incentive for prospective employers amounting to £500 per reservist per month. Those are all added costs, but we still do not know what the fully costed plan is.

[Mr Julian Brazier (Canterbury) (Con)]

My hon. Friend referred to the Independent Commission to Review the United Kingdom’s Reserve Forces. I serve on the commission, and I do not accept his statistic. Broadly speaking, the cost of a reservist is about a fifth of the cost of his regular counterpart. In America, it is about a quarter, and my guess is that following the changes that we are making, it will be something between a quarter and a fifth.

[Mr Baron]

I must say to my hon. Friend, with the greatest respect, that he has confused training with deployment. There is no argument in the House about the fact that reservists will be cheaper; the question is, how much cheaper will they be? When costs are rising, do we enter the terrain of false economies—which brings into doubt the whole question of value for money and whether the plan should have been instigated in the first place? I was talking about training. There has been a dispute about whether it costs more to train a regular, but my hon. Friend should know from the Green Paper that it costs more to train a reservist.

However, this is not just about the bits of the jigsaw that we have seen. We know that there are hidden costs further down the line. According to a recent report by the charity Combat Stress, reservists are twice as likely to suffer from post-traumatic stress disorder as regular troops. We may be storing up a ticking time bomb for ourselves. The necessary support structures for reservists are not in place, and I should be interested to know whether there are any proposals in that regard.

May I ask the Minister how much of the £1.8 billion—spread over 10 years—has been set aside for the Government’s plans? We are told that that money has been set aside and all is well, but there are various reports that some of it has already been eaten into. Has any of it been spent, and if so, how much?

While I am on the subject of costs, may I question the Minister about the impact assessment, which attempts to take an overall view of the costs? Again, we are dealing with assumptions and projected usage rates, and not all the figures are on the table, but I think we can all agree that the assessment is very dependent on projected usage rates. The way in which the reserve forces are used will depend on assumptions about future costs.

Artificially low rates can create false economies. The central case in the document seems to be based on an assumption of 3,000 annual deployments. I must ask the Minister whether that projection is realistic, given the original rationale of the reserve reforms. We are meant to be replacing 20,000 regular troops with 30,000 reservists. If the central projected use is 3,000, something is not adding up on the terrain. We need to examine the facts very carefully, because, again, we may be creating false economies and the taxpayer may be presented with a much larger bill than was originally envisaged.

[Mr Baron]

I am indeed very worried about the possibility that we shall not have enough troops to deploy. I refer my hon. Friend to the Green Paper, which states that it costs more to train a reservist than to train a regular. However, he has made a valid point about the manpower gap, which I think is a central issue of concern. Will 30,000 reservists be enough, even if they can be recruited? According to figures from the Ministry of Defence, the present TA mobilisation rate is 40%. In other words, for every 100 TA soldiers on paper, 40 are deemed to be deployable at any one time. That suggests that if we are plugging a gap left by 20,000 regulars, we shall need 50,000 reservists, not 30,000.

In response to a letter sent to him a while ago by 25 Conservative Members, the Secretary of State suggested a mobilisation rate of 80%. He said:

“The total strength target for the Army Reserve in 2020 is 38,000, in order to deliver 30,000 trained reservists.

May I ask the Minister what research, what study, what evidence justifies the claim that the MOD’s budgets will double the mobilisation rate? It is one thing to recruit 30,000 reservists, but doubling the mobilisation rate as well would require an extremely large investment. Many of us would be interested to know what evidence supports the claim that the £1.8 billion that has been put aside will achieve both those objectives. It is a very, very tall order.

My hon. Friend the Member for Hertsmere (Mr Clappison) raised the issue of the capability gap, and he was right to do so, because there is a fear that the Government plans risk creating such a gap. The Army reforms were put together before the strategic defence and security review, and since then a string of events have changed the international strategic dynamic. The nature of conflict is changing. Previously, it was thought of very much in binary terms—there would be one bloc against another bloc—but more fluid geopolitical forces are now at play, both state and non-state. War is becoming more asymmetrical, and we need well trained, agile, regular forces at high readiness if we are to meet the challenges that lie ahead. There is no disguising among the military their frustration about the fact that they could not have been more supportive to the French in Mali. The penny may have dropped on that side of the channel, but it has not yet dropped on this side.

I must ask the Minister whether 40 days’ training is really enough. Let us be absolutely clear about this: the Government’s plans represent a step-change in our approach. We are proposing to deploy whole units of reservists into the field. We have got to ask serious questions about this. Some would say, “Well, it happens in the US with the National Guard,” but it is, perhaps, not fully appreciated that the US National Guard has its own bases and its own equipment and training programmes. They take it very seriously in the US; they throw a lot of money at it, and even then the National Guard units are not infantry units. That is the interesting thing: the National Guard units are not infantry units, despite the investment the US puts into it.

[Mr Brazier]

My last visit to a National Guard infantry unit was in Kabul about a year and a half ago. It was doing an excellent security job, and it also had detached platoons along the Pakistani border. Some 60% of the American infantry is in the National Guard and 40% is in its regular army.

[Mr Baron]

All I would say to my hon. Friend is that there is a general view that the National Guard is very much focused on supporting roles, and the Americans treat their National Guard very differently from what I think is being proposed here. For example, I do not know of there being any details about separate training programmes, operational programmes or equipment programmes in the Government’s plans, which we have yet to see. All we are asking is to see those plans, because £1.8 billion may sound like a lot of money but it is spread over 10 years, and we must consider the scale of what we are asking—not just raising 30,000 reservists, or, to be more accurate, adding another 12,000 or 13,000 reservists, but doubling the mobilisation rate. That is a very big ask indeed.

What research has been undertaken to ensure that the money earmarked is sufficient to bring reservist units up to the same standard as regulars upon deployment? That is especially important given that it appears that human rights legislation will require equal training and equipment. That has not been raised much in the debate thus far, but human rights legislation is a concern in the sense that it is going to say, “Any troops put into the field, reservist or regular, have to have equal training and equipment.” I would be interested to hear the Minister’s thoughts on that.

There is a concern that these plans are having a distorting effect on the ground. I come back to the fact that well-recruited battalions are being axed, including my own battalion, the 2nd Battalion the Royal Regiment of Fusiliers, yet more poorly recruited, and therefore more expensive, battalions are being saved. Such a policy reinforces failure. Can the Minister justify the decision for 2RRF to replace on the list one of the more poorly recruited battalions when it was not on the original list of five battalions to be scrapped? We know, because we have seen it in writing from the MOD, that five battalions were originally due to be axed as they had poor recruitment figures. One of those was replaced. They had to go looking for another battalion and they fell upon 2RRF, which happened to be the best-recruited battalion in the British Army. Many fusiliers and their families in swathes of constituencies across the north and the midlands of England would like an answer to that question.

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[Mr Julian Brazier (Canterbury) (Con)]

I welcome this debate and I congratulate my hon. and gallant Friend the Member for Basildon and Billericay (Mr Baron) on securing it. It is also a pleasure to follow the hon. Member for Coventry South (Mr Cunningham).

I understand my hon. and gallant Friend’s loyal defence of his fine former regiment. As the 100th anniversary of the start of the first world war is almost upon us, it is time to remember six Lancashire and Warwickshire Fusiliers who won Victoria Crosses in that war. Sir John French made the famous remark that without the Territorial units available at the very beginning of the fighting we would have lost in France before the war had really begun.

The reality is that we have a good plan that is being unevenly implemented. America’s land forces are almost exactly split 50:50 between regulars and volunteer reserves. Canada has 44% regulars and Australia has 36% regulars; in all countries there are more reserve infantry than regulars. Uniquely, Britain has a target that is much less ambitious. It is broadly the case that a reservist costs a fifth of the price of a regular. All of us who are keen on defence would like more resources to be allocated to defence. Indeed, more than 20 years ago, I stepped down from my post in government as a Cabinet Parliamentary Private Secretary over that issue. However, the reality is that we have to work within these very difficult economic times, and the alternative to 30,000 reservists is not 20,000 regulars, but somewhere between 6,000 and 7,500, and that would be if we got rid of all the specialist medics, cyber-people and so on whom the Regular Army does not have.

I therefore strongly support this plan; I have seen the work of American and Australian reservists, and I am proud that 20% of the British division that captured southern Iraq was made up of reservists. However, I am concerned about some of the details of how the plan is being implemented. From the beginning, Ministers and the Chief of the General Staff have made a strong commitment to it. Ministers have secured the support of every employers’ organisation in the country. The CGS, starting with his own pitch to employers in his excellent article in the Financial Times, immediately spotted the governance issue by appointing, for the first time since the second world war, a TA two-star—a major-general—to play a pivotal role in it. The problems largely lie within the recruiting group. At a time when the proposition has improved immeasurably as a result of changes the Army Board is making, it is deeply depressing that this department is failing to deliver.

I have before me the monthly recruiting statistics for one unit—I will not disclose which, for obvious reasons. In the 12 months before the first push on TA recruiting in autumn 2011, the unit had enlisted between three and 12 people a month. The figures after that push are: 15 for November 2011, 21 for December 2011 and 19 for January 2012. Then, for a reason not understood by anyone, the recruiting group introduced its new system for medicals and common selection, without any market testing and without talking to units, and within three or four months the figures had dropped to one or two a month. That muddle was sorted—it had nothing to do with Capita. Second time around, the arrangements with Capita—I do not blame Capita—were introduced without any market testing or discussion with units. I am sure we have all dealt with cases of soldiers who have waited six or nine months with their documents repeatedly lost in the system.

Time is extremely short, so I want to suggest three things that the Government need to do turn this around. The units I talk to tell me again and again that there is more interest in joining the reserves and that the figures for the two groups that are not under control of the recruiting group—officer applicants and ex-regulars—are both improving. So, first, we need to get more of the control over the enlistment process back with the units again.

[Mr Baron]

May I suggest that this is a clear example of where the plan is driven by costs, rather than by strategic design? The cost for Capita to take on the recruitment was derived in large part by scaling down, if not selling up completely, local recruitment offices. So to start opening those offices, although a sensible proposition, would require additional cost if we are going to reverse that recruitment loss.

[Mr Brazier]

My hon. and gallant Friend makes an interesting point. That is not what I am arguing for, although I would strongly argue that it is ridiculous that the offices we still retain are open 9 am to 5 pm Monday to Friday instead of, for example, 9 am to 9 pm Tuesday to Thursday, which would allow the people there to do both jobs rather than only regulars. I am calling for more emphasis on the units. A temporary measure has been adopted in that area, which I suggest should be more permanent—it need not be expensive.

The second major change we need is to have a senior reservist officer in the recruiting group who is tasked with talking to units and who has real power in the way in which decisions in that area are made. We have done it at Land Command at the senior level, where two highly effective successive deputy commanders at Land in that position have worked well, and the improvements in the proposition have stemmed in no small part from that. The same needs to be done in the recruiting group.

The third change we need is on a relatively small scale, as seven or eight changes among the 400-odd decisions that had to be made to the location of the reserves are not right. Seven or eight really well-recruited sub-units have been wrongly selected for disbandment, including the best-recruited squadron in the yeomanry, which is going down to troop level, the best-recruited battery in the TA gunners and three or four well-recruited infantry sub-units.

I believe that this plan is achievable and it is moving us in the direction of the allies we fight alongside. It is a good plan; it just needs an improvement in implementation.

[Mrs Mary Glindon (North Tyneside) (Lab)]

It is an honour to follow the hon. Member for Canterbury (Mr Brazier), who made an earnest plea. I also thank the hon. Member for Basildon and Billericay (Mr Baron) for all he has done to secure the debate today and the debate last year. He deserves our support for what he said today.

This is an important debate, because, as yet, the Government have not made a good enough case for their plans to reform the country’s armed forces completely by 2020. Furthermore, we know that, of the three services, the Army will be most affected by the Government’s proposed changes. I confess that a particular concern for me from a local perspective is the plan to disband 2nd Battalion the Royal Regiment of Fusiliers.

A year ago, on 18 October, as my hon. Friend the Member for Coventry South (Mr Cunningham) has mentioned, the House debated the proposed disbandment of that battalion. The vote was won, but we know that it was not binding and the Defence Reform Bill is before Parliament with the disbandment proposals intact. All the while, the Army is working to implement its restructuring by 2018.

Colleagues speaking in support of this motion cannot yet see any evidence that supports the Government’s decision to give reservists a bigger role in defending the country. To complete the transformation of the Army, the Government must meet their target of recruiting 30,000 new reservists by 2018. However, the Assistant Chief of the General Staff told the Defence Committee in July of this year that achieving the 6,000 target for this year is “looking tough”. Even if recruitment improves, there are concerns from many quarters about how employers will react when their staff, serving as reservists, have to be deployed for up to 12 months at a time every five years. There is also concern that the compensation of £500 a month to cover each reservist is too low to cover employers’ costs.

Moreover, can Future Force meet the same capability levels as the Army today? With less time for training and with a voluntary role, these soldiers cannot be expected to be comparable with full-time, fully trained and battle-ready Army personnel.

[Mr Brazier]

I am listening carefully to what the hon. Lady is saying. On the question about being battle-ready and so on, under the American system the regular troops are used to seize ground and the reserve troops, who can bring extra expertise—they include policemen, farmers, business men and so on—are used to hold ground. They are often more successful than regular troops at building links with the local community.

[Mrs Glindon]

The point at issue is the transformation to reservists.

So far, the Government have not been able to instil in either Members of this House or the people of this country any confidence in their cost-cutting proposals, because they have not laid the figures on the table. Instead, they have launched headlong into reform, announcing redundancies and undermining the morale of our forces on active service. I remind the Minister that the military covenant states that our military deserve our support, respect and fair treatment, and they should have that at all times.

As for the question of the depletion of our Regular Army, earlier this year I had the honour, along with the hon. Member for Basildon and Billericay (Mr Baron), of taking to Downing street a 10,000-strong petition, which was co-ordinated by the Newcastle Evening Chronicle and signed by the people of the north-east, asking the Government not to disband the 2nd Battalion. On Tuesday this week, hundreds of fusiliers marched through Whitehall in support of a national petition to save their battalion that was presented at 10 Downing street. It was an emotional afternoon, charged with the pride of a regiment that has the best recruitment record in the land, yet tinged with sadness and dismay that that proud tradition could soon be consigned to history.

After the march, I was honoured to bring four veterans from the north-east on their first visit to Parliament. I am pleased to say that while I showed them around this great place, every member of staff and every MP we encountered treated them with the utmost courtesy and respect. Those veterans—Jim, Terry, Jim the Stick and Mac—fear for the future of their battalion and the opportunities for young people in the north-east to follow them into a full-time Army career.

None of us wants to see the battalion or any other unit disbanded in haste and without our being sure that the Government’s plan is cost-effective and wholly workable. This House, our armed forces and the people of the country have a right to see evidence from the Government that they can make the savings and maintain the level of defence that they claim the reforms will deliver.

If the Government are serious about defence reform, they must acknowledge the relevance of the motion and act in accordance with it. I support the motion and urge all other Members in Westminster today to do so, too.

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[Sir Bob Russell]

I am grateful to my hon. Friend for providing a word I was struggling to find; it was not my original thought, but it will do.

The Daily Telegraph reports today:

“Controversial plans to restructure the Army are ‘failing’ because cuts to the defence budget are putting off potential new soldiers…according to a leaked document”,

and:

“The memo, which is understood to have had wide distribution within the Ministry of Defence, says that ‘disappointing’ recruitment to the new Army Reserve means that targets for a larger part-time force will not be reached.”

It goes on to quote that document, saying that

“the Army faces ‘increased risk to its structure and operational capability’”.

The full-time Army has been cut from 102,000 to about 82,000 and five battalions will be axed. As someone who would desperately like to see 3rd Battalion the Royal Anglian Regiment reinstated, I well understand why people are anxious about battalion cuts. The cuts are supposed to be offset by a major expansion in the part-time reserve force, which is expected to grow from 19,000 to 30,000.

[Mr Brazier]

Just while my hon. Friend is mentioning the distinguished Royal Anglian Regiment, one should also say that the Territorials have produced a number of distinguished Members of Parliament, including Sir Winston Churchill and the hon. Member for Raleigh, a former member of the Royal Anglians.

[Sir Bob Russell]

Or indeed, the right hon. Member for Rayleigh and Wickford (Mr Francois). I welcome a fellow Essex MP to the debate, and in a few minutes I will also be delighted to welcome from Essex the new Deputy Speaker. It is good to see an Essex girl doing so well.

The Daily Telegraph says that the 10-page report dated 6 August and marked “Restricted” claims that the Army is currently recruiting barely half the number of new reservists needed to hit the target. It says:

“The Army is currently failing to attract and recruit sufficient Army Reserve personnel. Reserve info numbers in Quarter 1 are disappointing. If this continues the Army will miss its challenging inflow targets both this year and next.”

That would have consequences for the full-time Army. The report continues:

“Only 376 recruits joined the Reserve between April and June, missing a target of 1,432. That puts the Army on course to recruit only 50% of the overall 2013-14 target”.

The defence of the realm should be based on the defence needs of the nation; it should not be resources led. I get the distinct impression that it is being resources led. I pay tribute to our service personnel and their families. I suggest to my colleagues, friends and chums on the Government Front Bench that, should windfall funds materialise from the disposal of MOD assets, which they could well do, the money should be used primarily to modernise our Army married housing. The modernisation programme is currently on hold because it is claimed that the country cannot afford it, but as heard in Prime Minister’s Question Time yesterday, the economy is improving. So if there is an MOD windfall, I suggest that the money goes on improving our housing.

I should like to end on an upbeat subject and advise the House that on Wednesday 6 November at 7.30 in the atrium of Portcullis House the Colchester military wives choir will be making a return visit. Everyone is welcome to come along and hear them.

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[Sir Alan Beith]

The same logic can indeed be applied, but the sheer strength of feeling with regard to the Royal Regiment of Fusiliers is significant, as is the number of Members who are taking part in this debate because of their concern about the future of the 2nd Battalion and of the regiment in general.

I do not want to spend too long on why the mistake was made, but it is clear that in the case of the 2nd Battalion the Royal Regiment of Fusiliers the decision to stand down was based not on efficiency, but on the cap badge argument, which preserved Scottish battalions that did not recruit as well as the Fusiliers. Interestingly, the cap badge argument did not count for much when, a few years earlier, we lost the King’s Own Scottish Borderers—the other regiment that had its regimental headquarters in my constituency—and they were merged with the Royal Scots to become one battalion of the Royal Regiment of Scotland. In effect, the two regiments associated with our area have sustained losses.

Since the decision was made—Ministers may claim it was right, but I think it was wrong—the facts have changed, and when the facts change, Governments have to look at things again. It has become clear how difficult it will be to meet the TA recruitment target. I do not know many people—indeed, anyone—who are confident that we will achieve the targets in the given time scale. It is therefore likely—in fact, I am certain—that there will be a capability gap.

[Mr Brazier]

The reason we are not meeting the targets is not that there is a shortage of people willing to enlist. As I explained in my speech, we have had two big surges, but both were wrecked because the Department in charge of recruiting and enlistment has set up systems that are simply not volunteer-reservist friendly.

[Sir Alan Beith]

My hon. Friend, who has worked diligently on strengthening the TA and its role in our military structure, makes an important point. I am not sure whether that is the whole answer or argument. If we are deterring potential recruits as a result of slow processes, that should be put right. Many years ago my hon. Friend was my Conservative opponent and he became aware during that time of the significance of the Royal Regiment of Fusiliers in my area.

As well as the slowness of TA recruitment, TA centres are being closed. Alnwick in my constituency is keeping a good and strong TA centre of the Royal Regiment of Fusiliers. The TA centre in Berwick was reassigned some time ago to the Royal Logistics Corps, which no longer needs it. I think we should have kept it and that it should be reassigned back to the Royal Regiment of Fusiliers.

If we give up on rural areas and create a situation whereby it is too far for people from rural areas to attend training nights, we will cut off a significant source of recruitment. There are many loyal people in rural areas who want to serve and many ex-regulars return to rural areas. At the very least, we need to devise ways in which the training structure can accommodate people who live 30, 40 or 50 miles away from a training centre, if we are not simply to write off a whole area of recruitment.

I do not want to take up much more time. It is clear from today’s discussion that a lot of people, for various reasons, have serious concerns about our ability to meet the TA targets. I therefore suggest to Ministers that the contingency plan they should have to hand and keep in preparedness is the retention of at least one of the regular battalions, and the obvious choice is the 2nd Battalion the Royal Regiment of Fusiliers.

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[Andrew Selous]

I accept that, but there is no reason why the chamber of commerce in my hon. Friend’s constituency or the Federation of Small Businesses could not do the same thing. I would like to see stalls on the high streets, in the market towns and at the village fairs in his constituency. We should literally be setting out our stall to get young men and women to join the reserve forces. Groups of employers could do the same thing.

To highlight one employer, Carillion is doing an excellent job of encouraging its staff to join the reserve forces because it is a two-way trade. Not only does the country get the reserve forces that it needs, but employers get back a capable, determined and well-trained employee who will be of even more benefit to their work force. It is important to recognise that this is not just about employers doing the decent thing; there are sound business reasons for employers to get behind the reserves. The Government also provide assistance to meet mobilisation costs.

It is important to recognise the contribution that the Territorial Army, as it used to be called, has made to recent campaigns. Up to 10% of our forces in Afghanistan have come from the Territorial Army. Indeed, my hon. and gallant Friend the Member for Beckenham (Bob Stewart) mentioned the figure of 14% for Iraq in our debate on 23 April.

We need a simple and straightforward recruiting system. My memory of joining the Territorial Army in 1980 is that it was a quick and easy process. Captain Simon Lalor, who is now a major-general, was the recruiting officer of the Honourable Artillery Company. I had friends in the company and I went in to see him. The process was very quick and I was doing my recruit basic training before I knew it. There was not a long delay, but I am sure that the necessary security checks were undertaken then, as they must be now. If we were able to do it quickly, simply and easily then, I am sure that we can do so now. That is important because if a young man or woman who is bursting with energy and commitment wants to join the TA, we have to act quickly to capture that enthusiasm or we may lose them.

I return to the point that I made about the need for community engagement. It is important that businesses, civic leaders, Members of Parliament, mayors, county council and unitary council chairs and so on get behind this effort, support the reserve forces and encourage people to join their local unit. I think that an extra 11,000 reserves is possible. I have heard about the difficulties with the current recruitment process that have been outlined, but I still believe that recruiting 11,000 reserves is possible.

[Mr Brazier]

My hon. Friend is making a powerful case. The central difference between the recruitment processes in this country and other English-speaking countries is that reservists here have very little say over the way in which it is designed, organised and implemented.

[Andrew Selous]

I defer to no one in this House more than my hon. Friend for their knowledge of and commitment to the reserves. He has advised the House well and loyally over the past few years. There are two Defence Ministers on the Front Bench and I am sure that they will have heard his comments. I know that they want to get the process right and that they will leave no stone unturned in ensuring that we achieve the target.

We need community buy-in. We need employers and civic leaders to be out there supporting our reserves. We need an extra 11,000 reserves. We have done it in the past. In 1990, we had 70,000 people in the Territorial Army. Surely it is possible for us to get to a figure of 30,000. I refuse to believe that we cannot do that if we have the right enthusiasm, motivation and recruiting systems.

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[Sir Edward Leigh]

I agree with my hon. Friend. When I arrived in the House we had an annual Navy debate, which was the only debate in which Mr Bonner Pink—a great man who represented Portsmouth—spoke in the course of an entire year, so important was it. We greatly respect my right hon. Friend the Minister of State, but we would like the Secretary of State to be present on these occasions and in these most important debates.

We are, of course, sympathetic to Defence Ministers, and we know the intolerable pressure they have been put under. I will not get into a debate about the £35 billion black hole, just in case the hon. Member for North Durham (Mr Jones) intervenes on me, but as we know, the money has to come from nowhere—or rather, from somewhere—and difficult decisions must be made. I hope that was not a Freudian slip, Madam Deputy Speaker, and by the way, welcome to the Chair. Thank you for calling me; you are doing wonderfully well so far.

We all know the pressure that those on the Front Benches are under, but that does not absolve them from answering the central question in this debate. We can argue about the relative costs of reservists compared with regular forces, but we cannot deny that the previous Secretary of State made a pledge to the Chair of the Defence Committee that we would not reduce the Regular Army unless we were sure we could recruit these reservists. That is the nub of this debate, and we must not get lost in the detail. We must keep our eyes firmly focused on the issue.

My hon. Friend the Member for Canterbury (Mr Brazier) has played a distinguished part in this debate, and his independent commission concluded:

“Our Reserve Forces are in Decline.”

Why are they in decline? The commission concluded:

“We have failed to modernise Reservist Roles.”

We must ask my hon. Friend, and the Minister, whether we can increase the burdens we place on reservists when we are still modernising their role. The 2013 MOD White Paper “Reserves in the Future Force 2020: Valuable and Valued” was produced in response.

[Mr Brazier]

The central point was that for the past few years reserves have been used exclusively as a part-time personnel service with no command opportunities for officers whatever. That has now changed, and as a result we have a decent proposition.

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[Mr Ellwood]

It depends which frigates we are talking about. It will be rare for us to participate in a conflict without an international flotilla, so we need to think about frigates other than our own. I want to focus on Britain’s military capability, which goes far beyond providing the senior service with a replacement for the Invincible class and thinking of carriers in terms of the battle of Medway and so forth.

We either need carriers or we do not. If we need the capability, we need a minimum of two carriers to guarantee that one is permanently operational. Let us bear in mind what happened in the operation in Libya. Halfway through the operation, the Charles de Gaulle had to head back to France for a refit. Previously, 40% of air operations had come from it. Let us also bear in mind our experiences in Afghanistan and Iraq, which highlight the need for a new and adaptable, but arm’s length, doctrine of intervention, with the flexibility for upstream engagement and stabilisation, including humanitarian tasks, based on a much lighter footprint. The carriers could become the centrepiece of British expeditionary capability.

The Queen Elizabeth class carriers provide an opportunity to facilitate a step-change in long-range manoeuvrable technology and capability, and allow us to recalibrate our joint-service approach to littoral, expeditionary and inland conflict prevention and upstream engagement. In a wider context, strategic carriers allow us to extend and embolden Britain’s diplomatic soft power and hard power in a manner not seen for a generation, for the reason my hon. Friend the Member for Hertsmere has given. In my view, we are not reaching the carriers’ potential.

[Mr Brazier]

Will my hon. Friend confirm that there is no way we can fund that objective, which I strongly support, if we have an all-regular Army?

[Mr Ellwood]

I will come to funding in a second.

In my view, the full potential of the carriers needs to be exploited. For example, we are not considering having unmanned aerial systems on board, but that will become the norm in future. Drone systems like the ScanEagle, the Fire Scout and the X47-B are already available and exist on other carriers, yet we do not have a programme to consider them, even though our ships will be around for the next 40 years. On capability, it is worth noting that two thirds of airborne operations conducted over Afghanistan by the Americans took place from aircraft carriers based in the Indian ocean. We need to recognise that those are versatile bits of kit.

Rotary systems have been mentioned. The Apache played a pivotal and interesting but new role in Libya, with the use of Hellfire missiles, extending the range at which we can use our force capability. Hellfire has a range of 8 km, the Storm Shadow 500 km, and Brimstone 12 km. I stress these points because two thirds of the world population lives within 250 miles of the coastline. That is where future conflict will take place. If we do not want to put boots on the ground, it is aircraft carriers that will allow us to conduct and expedite such operations.

Continuing to operate two carriers will send a powerful message to potential adversaries, both state and non-state, but also to our allies, such as the US, allowing us in turn to employ greater leverage on their decision making. It will also save millions of pounds because we would not have to create forward bases or undertake long-range operations. In the operations in Libya, Tornados had to be refuelled five times—three times on the way there and two on the way back, putting massive strain on the airframes. Operating two carriers will give us greater flexibility compared with running just one. With one carrier, operations are likely to be carrier-strike only—there would be little expeditionary capability.

Hon. Members have spoken passionately about retaining the soldiers who live in their constituencies. My question is this: what are the soldiers expected to do? Huge work needs to be done on expeditionary capability, upstream engagement and stabilisation. We could win the war quickly, but lose the peace because we do not have such stabilisation. Aircraft carriers can play an important role in that. Two aircraft carriers could have a tailored expeditionary capability that we have never had.

Other nations are watching us with interest. The Americans have the Wasp class carriers, which are 44,000 tonnes, and the Nimitz class carriers, which, because of sequestration, are likely to be removed. They are looking at the 65,000 tonne class with interest, and also saw what we did with the Apache. They may want to follow suit. We do not talk this up. Building a third aircraft carrier is not even being considered because of the embarrassment and the legacy problems of the past.

I believe that the additional annualised cost of a carrier, which has been mentioned—about £65 million a year—is a small price to pay for the diplomatic signal and military statement of intent it would send to potential adversaries, state and non-state alike. It would significantly reduce the operational cost of war fighting, conflict prevention and peacekeeping roles. It would also elevate Britain’s ranking as Europe’s senior military power, justifying our permanent membership of the UN Security Council. I hope that hon. Members on both sides the House support my call for operating two aircraft carriers.

Defence Reform Bill

Julian Brazier Excerpts

Tuesday 16th July 2013 Commons Chamber

[Mr Hammond]

The Secretary of State will remain accountable to Parliament, but we expect that the GoCo will have an accounting officer, probably its chief executive officer, who will therefore be liable to be called before the Public Accounts Committee.

Part 1 of the Bill sets out the provisions and safeguards necessary to underpin the operation of a GoCo. The most important element of almost any organisation is its people, and the smooth transfer of the DE&S work force to the GoCo operating company will be vital to its future success. The Bill confirms that the initial transfer of civil servants would be covered by the TUPE regulations. By virtue of being a contractor-operated entity, the GoCo would have considerable freedoms, particularly relating to its ability to recruit and reward its staff at market rates—freedoms that are not usually available to public sector bodies. The Bill confirms that in its activities on behalf of the Secretary of State it will enjoy certain statutory immunities and exemptions that are currently enjoyed by the Crown—for example, in relation to the Health and Safety at Work etc. Act 1974 and the Nuclear Installations Act 1965.

In addition to those freedoms, we also need to put in place a number of safeguards to protect Government and taxpayer interests. Therefore, the Bill provides the Secretary of State with the power to create a scheme to transfer the business to another contractor or, in extremis, back to the MOD, should that prove necessary. The Bill also provides for the Ministry of Defence police to have clear jurisdiction to investigate any offences that may relate to defence work carried out by contractors. It also makes provision to allow the Secretary of State to disclose information that he has received in confidence to a contractor, and to authorise the use of intellectual property. Clause 7 and schedule 2 put in place appropriate safeguards to prevent the unauthorised use or disclosure of confidential information by either the GoCo or its employees.

I am determined to drive a step change in the way in which the MOD carries out its defence procurement business, and to do so rapidly. The gradual erosion of skills and capability in the organisation over recent years cannot be allowed to continue if we are to ensure the MOD’s ability to deliver equipment to the front line. The measures in part 1 of the Bill will allow us to make the transition to a GoCo at the conclusion of the commercial competition, subject, of course, to the bids representing value for money for the taxpayer.

Part 2 relates to single-source procurement. Open competition remains the best way of ensuring value for taxpayers’ money. However, sometimes there is only a single provider of a capability we require, such as nuclear propulsion units. Sometimes the need to maintain critical national industrial capabilities or sovereign control of the intellectual property in equipment programmes requires us to place contracts with UK companies without a competitive process. European Union public procurement regulations specifically allow this for military equipment.

This so-called single-source procurement typically accounts for about 45%—about £6 billion a year—of the total that the MOD spends on Defence Equipment and Support, and it is likely to remain at that level for at least the next decade or so. Clearly, in the absence of the disciplines of the marketplace there needs to be a set of rules governing single-source procurement in order to ensure proper protection for the taxpayers’ interest.

The MOD currently uses a framework for single-source procurement that has remained largely unchanged for the past 45 years—the so-called yellow book. Under this system, which is voluntary, the profit that contractors can earn is fixed, but there are few if any incentives for them to reduce costs. Clearly, this does not serve the best interests of the taxpayer and neither does it help industry to maintain a competitive focus that will allow it to succeed in export markets. It is therefore in the interests of both the MOD customer and its industrial suppliers to create a framework with incentives for efficient and competitive behaviour.

In 2011 the Government commissioned Lord Currie of Marylebone to undertake an independent review of the yellow book. He recommended a new framework based on transparency, with much stronger supplier efficiency incentives and underpinned by more robust governance arrangements. Based on his recommendations and following extensive consultations with our major single-source suppliers, we have developed a framework that will be introduced through regulations provided for in part 2 of the Bill. At its core is the principle that industry gets a fair profit in exchange for providing the MOD with transparency on costs and the protections we need to ensure value for money. It will align the MOD and industry by allowing additional profit to be earned through delivery of defined efficiencies, sharing the benefits between industry and the taxpayer. A statutory basis for the regime will ensure widespread coverage across our single-source supply base and allow application of the regime throughout the single-source supply chain.

To police the new framework we will create a small, arm’s length body, to be known as the single source regulations office, with approximately 30 staff. Its role will be to keep the statutory framework under review and to monitor adherence to it. It will replace an existing non-departmental public body that has little power other than to oversee a voluntary framework that can be amended only by consensus. The existing regime has failed to evolve to reflect changing circumstances, largely because either party can block any change that it regards as contrary to its own interests.

The single source regulations office will ensure that we do not have to wait another 45 years to update the regime. It will be a source of expert advice to the Secretary of State and it will also act as expert adjudicator in disputes between the MOD and our single-source suppliers. Crucially, it will advise the Secretary of State on the setting of key profit rates for single-source contracts.

Critical to ensuring that the MOD is able to negotiate prices that are fair and reasonable to both suppliers and taxpayers is the generation of better quality and more standardised cost data. Therefore, regulations enabled by this Bill will introduce a requirement for standard reports throughout the life of single-source contracts worth more than £5 million, allowing the MOD to build up a database against which future pricing assumptions can be judged and on the basis of which more robust, long-term cost forecasts can be made.

On contracts above £50 million, suppliers will also have to provide quarterly contract reports to support effective contract management, report any relevant events and deliver information about their overhead costs, allowing us better to align the industrial capacity the MOD is paying for with our long-term capability requirements. Clause 25 also creates a power for the MOD to gain access to suppliers’ records.

In order to ensure that suppliers fulfil their reporting and transparency obligations, the Bill includes a compliance regime. Failure to provide the required information on a timely basis will result in a penalty being applied under a civil penalty regime. Penalties will vary with the value of the contract and the single source regulations office will act as the appeal body for the compliance regime.

We recognise that we are requiring our suppliers to provide unprecedented levels of sensitive commercial information that would be of great value to their competitors or to market analysts. We need this information to ensure we get value for money on what is a significant proportion of defence spending, but obtaining proprietary information by statute imposes on Government a duty to secure its proper protection. In order to ensure that the increased level of transparency and reporting we require is not subject to abuse, the Bill creates a new criminal offence of unauthorised disclosure of sensitive information obtained under the new single source framework, such as forecast financial performance and investment or rationalisation plans.

Given that confidential and commercially sensitive information is already exempt from freedom of information requests, we do not think it will be necessary to bar release under the Freedom of Information Act in order to protect the information. However, I am clear about our obligation to our suppliers in respect of their sensitive information and the Bill creates an order-making power to allow the Secretary of State to invoke a full statutory bar on disclosure under FOI if the routine exemptions prove inadequate to protect the exceptional level of information that we are requiring to be disclosed to us.

[Mr Julian Brazier (Canterbury) (Con)]

The framework being described by my right hon. Friend is largely welcome, but it seems odd that it is being applied to only part 2 and the 45% spent on single-source procurement. Many of us support in principle the idea of the GoCo, but introducing more commercial entities to the organisation that buys the other 55% of the kit could expose more commercial-in-confidence material to outside bodies than would be the case under a single-source supplier.

[Mr Hammond]

I assure my hon. Friend that the arrangements for our relationship with the GoCo, which will be largely contractual but partly regulatory, will also protect confidential information and make appropriate arrangements for the use of intellectual property held by the Secretary of State. I am dealing with the specific regime that will apply to part 2 contracts with single-source suppliers.

The new single-source regime will incentivise efficiency in operating costs and the minimisation of overheads. It will align the interests of the MOD and its suppliers, and support the competitiveness of the UK defence industry in both domestic and foreign markets.

Finally, I turn to the third part of the Bill, which relates to our reserve forces.

--- Later in debate ---

[Mr Julian Brazier (Canterbury) (Con)]

I follow the Secretary of State, the shadow Secretary of State and others in paying tribute to those brave young men who have just lost their lives in the hills of the Brecon Beacons. My thoughts and prayers are with their families, as I am sure are those of the whole House. I remember some uncomfortable times there many years ago.

It is a pleasure to follow the hon. Member for Merthyr Tydfil and Rhymney (Mr Havard). He and I work together closely on the Select Committee. I associate myself with his tribute to the mountain rescue service in his constituency. We must not prejudge the inquiry, but I hope its role in averting a much worse problem will be fully acknowledged.

Let me be very clear that I strongly support the Bill and I am delighted that the Under-Secretary of State for Defence, my hon. Friend the Member for Ludlow (Mr Dunne), will be taking it through Committee—if I am very lucky, perhaps I will be allowed to serve on it. I support almost all the Bill’s provisions. I just want to say a few words on procurement before focusing mostly on part 3.

I am happy that we are evaluating the possibility of a GoCo. There are a number of very successful GoCos in our current set-up, including Aldermaston and the special arrangements that Babcock has with the Royal Navy. However, to echo what my hon. Friend the Member for Aldershot (Sir Gerald Howarth) said, there is one feature of the GoCo that I am very concerned about: the possibility that there might be a substantial foreign element in its running. My reason for saying that is not xenophobic at all. There are two main reasons why there should be a serious concern about foreign companies or foreign employees being involved in the management company: one relates to intellectual property rights—state secrets—and the other relates to reasons of commercial confidentiality.

Many years ago, just before I was elected to Parliament, I did a consulting project in Aldermaston for the management of a small Swedish firm that I was working for at the time. I cannot see how the commercially in confidence question could possibly arise in Aldermaston with regard to the American companies involved in the management. It simply is not an issue. The point about IPR is that we are already collaborating with the Americans and, arguably, they are pretty uniformly ahead of us; so the IPR reason does not arise, because there is no parallel.

The plain fact is that if we were to employ foreigners in a management company, whether or not they work for foreign companies, there is a danger that they might then be cherry-picked. Even if we put the clear criminal sanctions set out in part 2 of the Bill into part 1—slightly oddly, they are in part 2 but not in part 1—there would be no way of enforcing them if, for example, an American employee of an American company was then head-hunted by one of the big American defence contractors so that it could pick his brains on commercially confidential material.

[Peter Luff]

I think that I can reassure my hon. Friend on that point. The risk he identifies exists already. The risk of people being head-hunted from Defence Equipment and Support because they cannot be paid the right sum of money means that intellectual property can already transfer out of the organisation too readily. I think that those risks, whatever the nationality of the companies that have an interest in the contract, will be reduced significantly by the change to GoCo status.

[Mr Brazier]

My hon. Friend’s point is well taken, and I support the concept of the GoCo, but the plain fact is that, however strong the protections we try to put in place, there is no way of enforcing them in relation to foreign employees. It is that straightforward.

[Peter Luff]

rose—

[Mr Brazier]

If my hon. Friend will forgive me, I will move on to the main burden of what I want to say today, which relates to reserve forces. I strongly support the measures set out in part 3. [Interruption.] My hon. Friend is clearly agitated, so I will take his intervention before moving on.

[Peter Luff]

I think that I can offer further reassurance. All employees in sensitive areas of DE&S will be required to be “UK eyes only” personnel, so no foreigners would be working on the sensitive stuff that worries my hon. Friend.

[Mr Brazier]

If the sensitive areas were for UK eyes only, that is a protection normally for intellectual property rights. The problem for the defence industry is what is commercially in confidence—increasingly being called “soft IPR”—which is in no way covered by the provision my hon. Friend mentions, as he knows. The problem is that knowing how a particular contractor has structured a particular contract, which the management company must know—otherwise, there is no point in having it—means that that kind of information must be known to it, and it is extremely valuable material. He was quite right to say in his previous intervention that the danger already exists. However, the only way to produce an enforceable mechanism that deals with it cannot cover foreign employees who go back to America, or indeed anywhere else, although I think that we would be unlikely to take employees from another country.

My main point concerns reserve forces. I strongly support part 3 of the Bill and the Government’s measures on reserves, and I was delighted to hear the shadow Defence Secretary give a broad welcome from the Opposition Benches to those measures. I will not go into the provisions in the Bill except to say that one or two—special support for SMEs, for example—are especially welcome, as is greater protection for employees who are reservists. Instead, I suggest that the Bill could provide a vehicle for reforms in the governance of reserves. Such reforms were highlighted in the report by the independent commission to review the United Kingdom’s reserve forces, on which I was privileged to serve, as we are a long way out of line with arrangements in other English-speaking countries.

Our report looked at three areas of governance, one of which was for transition. The other two areas were senior appointments, and the role of the reserve forces and cadets associations and, when considering those two matters, it is important to ask what is happening abroad. I have focused on English-speaking countries because there is little point in looking at countries that have recently given up conscription. The most obvious example of a country that gave up conscription a long time ago—France—has gone down a route that Britain will never follow in having an armed gendarmerie trained effectively as an army reserve, including a big reserve component of its own. Therefore, the US, Canada and Australia seemed to the commission, and seem to me today, to be the best comparators.

In truth, those countries—I say this with no pride at all as somebody who has extensively visited their armed forces—have consistently had, year after year, much lower personnel turnover than our reserve forces, and they often get better turnouts for periodic training. The National Guard units that I visited in Afghanistan had a staggering 98% turnout for that operation, and the officer recruiting level of all those other countries is much higher than in the UK. Reserve forces in those countries have a larger place in society than our Army Reserve, and I fully endorse and totally support everything the Government are doing to expand that role in society. Above all, reserves in other countries have much more experience than us of deploying formed capability rather than simply being used as a part-time personnel service, as has been forced on the reserves over the past few years.

[Bob Stewart]

I totally understand and accept the majority of what my hon. Friend is saying, but to compare us with the National Guard is somewhat misleading. National Guard units are often mobilised and deployed for long periods of time, whereas our system will bring someone in for six months’ operations, presumably with three months of training before and three months afterwards. That is not as long as National Guard units serve, which obviously makes them almost regular, at least in spirit.

[Mr Brazier]

My hon. Friend has been misinformed about that. An impressive airborne cavalry unit that I visited in Kabul was one of a small number of units that had had the misfortune a few years ago of being part of the only experiment by the Americans in recent memory of trying to call people out for more than 12 months. The US has the same limit as us in the UK and has agreed never to repeat that experiment because of the painful experience. Such units operate on the same 12-month cycle as we do.

I do not say this to run down our reserve forces in any way, but when those forces were used as formed bodies, they served extremely well despite the handicaps they faced. One thinks of a company of reservists from the London Regiment, who in their time in Afghanistan were reputed to have killed 45 members of the Taliban. They got an incredible endorsement, which I quoted in the House, from their Brigade Commander, Brigadier—now General—Lorimer. I also think of my own former unit, which deployed a squadron that got three military crosses. However, I want to make the point that, in terms of yardsticks, we are behind the curve. I welcome all the Government’s efforts to move us up the curve, but we have to recognise that governance is an important part of this.

[Thomas Docherty (Dunfermline and West Fife) (Lab)]

I am slightly confused by the excellent answer that the hon. Gentleman gave to the hon. Member for Beckenham (Bob Stewart). When he says that reserves in the US deploy on a 12-month basis, does he mean that their total call-out is 12 months and they are not doing 12 months in theatre?

[Mr Brazier]

They have almost exactly the same total span as us—basically, 12 months. Unlike us, they typically do three months’ work-up and nine months’ deployment—this is for formed bodies up to brigade level—whereas we do six months and six months, but it is still a 12-month limit. The Australians, who have sent a number of formed bodies to Afghanistan, do three months and three months.

I am explaining these points because it is worth looking at the difference in governance arrangements, some of which we set out in our commission report. In all three of these countries, the vast majority of reserve units are commanded by reservists, and the vast majority of those units are in brigades, also commanded by reservists. The National Guard has a whole mass of legislation protecting its special status. Australia and Canada do not have the same legal arrangements, but both countries have a set of widely accepted customs and practices that work in lieu.

That brings me to the main point that I want to put to the House. I suggest that there are four things—two pairs of things—we can do to redress the balance a little, all of which build on the spirit of what the Government are doing. The first two are about people. Sir Peter Wall anticipated our commission report with a very good move that has been pivotal in delivering progress when he announced overnight that he was creating a new post that has existed since time immemorial in Australia and Canada and in the National Guard in every state in America—a de facto commander of the TA in the shape of the Deputy Commander Land Forces. The Duke of Westminster was the first incumbent and General Ranald Munro is now doing the job. They are both fine reserve officers.

Sir Peter Wall said that that was a tied post, but there is nothing laid down anywhere to say that some future, less enlightened Chief of the General Staff, with a selection committee entirely composed of senior regular officers, and one token civil servant, should not at some future stage retire an existing two-star general and say “Here we have a reservist who can do the job.” That is the current arrangement with the reserves in the RAF. I propose that a list should be laid down of certain jobs that are tied to people, many of whom may be ex-regulars, who have for a number of years earned their living in the civilian world and served as reservists at the same time. The selection committee should include an outside element, perhaps the chairman of the Reserve Forces and Cadets Associations or the outgoing incumbent.

My second recommendation on people is that we must address the issue of reserve primacy for unit-level command. I am not asking that we have reservist brigade commanders, like all these other countries, although we do already have reservist deputy brigade commanders. In 2011, a week before we published our report, the military secretary’s department broke completely new ground by announcing, unbelievably, that whereas other countries have 80% to 90% reservist commanders, and historically we have had 40% to 50%, 24 out of 30 of the reserve commands were to go to regular officers. I have to say that I was so angry about this that my fellow members of the commission had more or less to tie me down.

The subsequent year—2012—the department did something that was arguably even worse. Although it put the word out that it wanted more reservists, it applied a de facto reverse quality filter and made such an unreasonable demand with regard to man training days for TA commanding officers that most of the people with the best jobs said, “I’m not putting in for that.” The result was a great deal of unhappiness with some of the command awards. The generation who will take on those units—the two years between recruits mean that this relates to almost every Territorial Army unit—are not necessarily the kind of people who would have been selected if the process had been similar to that which is used abroad.

The good news is that the new military secretary is working very hard on this and trying to sort it out. A strenuous effort is being made to encourage and develop good-quality people to be the next generation of TA commanding officers. None of this, however, is laid down anywhere. I think that TA primacy—which, incidentally, exists in the Royal Naval Reserve—should be formally laid down.

That brings me to my last two points, which are on the RFCAs. I was delighted that the Government adopted in their Green Paper our report’s recommendation for an annual report from the RFCA Council on the state of the reserve forces. It was right that the Secretary of State saw that first and I was glad when he published the Green Paper for Parliament. Unfortunately, it was then suddenly announced in the White Paper that, rather than having a wider remit, the report should focus on progress with integration and that it should stop when integration is completed in 2018. That was not our recommendation. It is after the political spotlight has moved on that the role of this independent report will be most important.

It is worth remembering that when Haldane set up the reserves, who served so bravely six years later in the first world war, he gave to the County Associations—the forerunners of the RFCAs—a large part of the budget as well as the responsibility for managing recruitment, basic training and property. Today the only responsibility left to the RFCAs is the control of property, which they do vastly more effectively than the Defence Infrastructure Organisation, with less than a third of the percentage overhead. They also make use of all the free expertise available from the people on the individual regional councils, including estate agents, lawyers and entrepreneurs.

For the past 10 or 15 years, the RFCAs have been handicapped in that work because, despite the fact that they own most of the estate, they are no longer allowed a free hand to manage it properly. They are constantly subject to trying to drive deals. For example, in Yorkshire an excellent deal with a local supermarket that would enable essential renovation work to take place has been on hold for several years. Now that the basing plans are sorted out, I think we should put in legislation the role of the RFCA as owners of most of the property.

In summary, the word “integration” is at the heart of this. The Government are committed—in a welcome plan that I strongly support—to the integration of regular and reserve components. We have tried assimilation and it failed. The findings of our commission’s report on an assimilated structure with no separate chain of command for Army Reserve—in fact, the structure did not even include a reserve branch at Land Command; it just had a few people scattered around—were dismal. Integration is about recognising that each service has a separate ethos. Someone who serves as a reservist and does something else for their main living has a different ethos. The White Paper says a great deal about moving from being service personnel to providing capability—I strongly support that—but in order to make it work we have to hardwire certain structures into the system, and I believe that this welcome Bill offers us that opportunity.

--- Later in debate ---

[Peter Luff]

I do not want to get bogged down, but I agree that the £38 billion figure depends on the assumptions made. Those assumptions were too generous, actually, to the last Government and the true size of the black hole was nearer £60 billion or £70 billion, but that is another debate. That is my sincerely held view.

On the whole, I do not think it right for ex-Ministers to boast about their achievements, particularly as anything achieved in a Department is always shared with many other players. However, I was pleased that the National Audit Office’s major projects report for 2011, dealing with the 16 major biggest defence acquisition programmes, said—among some words of criticism, of course, for how things were being managed; it was not a totally clean bill of health—the following:

“In recent years we have reported several times that the Department has had to slip projects or cut equipment numbers to bridge the gap between estimated funding and the forecast cost of the defence budget. These decisions were not value for money and meant that new capabilities were not available on time. There are no such instances recorded this year”.

That is the way we need to keep it. I believe that this Bill is the way to achieve that massive step forward.

[Mr Brazier]

I do not make interventions like this very often, but my hon. Friend is being too bloody modest—excuse my language, Mr Deputy Speaker. He must take some of the credit for that extraordinary achievement.

[Peter Luff]

I am most grateful to my hon. Friend. I am very proud indeed to have been part of the team that achieved that. In fact, the only change being made to the budget now is to put new bits of equipment into it, which is a huge sea change from the world that all of us involved in defence have known over many years.

The Government have set out a clear policy to sustain those improvements. I say to the hon. Member for Hartlepool that if I were publishing now the White Paper that I published last January or February, I would call it “Defence-Industrial Strategy”, because that is what it is. At that stage, there was a degree of nervousness in the Government about the phrase “industrial strategy”, but the Department for Business, Innovation and Skills has now won that argument. I see what we have now as an effective defence-industrial strategy that will drive up the competitiveness and effectiveness of British industry, particularly by protecting investment in science and technology—again, that is a debate for another day. My argument with the hon. Gentleman is this: it is broken and it does need fixing. I agree that there are risks with any change, but this is a change that needs to be made. I am conservative by nature, and one of my favourite quotations is from Viscount Falkland, who said in 1641:

“When it is not necessary to change, it is necessary not to change.”

On this occasion, I believe it is genuinely necessary to change.

I will quickly work through the Bill in reverse, if I may. On reserves, I will not add to the excellent remarks of my hon. Friend the Member for Canterbury (Mr Brazier), to whose work in this area I pay mutual tribute. He really has done a first-rate job on our reserves, and the whole House—indeed, the whole armed forces—owes him a great debt of gratitude. Concerns have been expressed about the number of reserves we need to fulfil the Government’s aspirations. I always divide numbers by parliamentary constituencies to get a sense of their scale, and in this case we are talking about an average of about 50 for each constituency. That is not a huge number. I genuinely believe that what the Government are doing will help us to recruit some of the specialists we need, as the White Paper says, particularly in the area of cyber-security. Keeping skills up to date is important in the real world as well. The reserves have a hugely important role, and I am sure the Minister will respond to my hon. Friend’s comments when he winds up.

Let me turn to the single-source pricing regulations. It was time for a radical review. I commend page 20 of the impact assessment to the House, which lists the major structural changes to have taken place since 1968, when the yellow book was first introduced. Let me emphasise the point—this cannot be said too often—that this is not an attack on the profit of the defence industries; it is an attack on their cost base. A reasonable rate of return is what the defence industries need to sustain their activity in the UK. This is not an attack on their rate of return for their shareholders, but, as I say, on their cost base. Frankly, I have seen past examples of the cost base being—shall we say?—artificially inflated in a way I found totally unacceptable. There has been abuse.

We in this House also ought to say a big thank you to Lord Currie of Marylebone, who did so much hard work to produce the “Review of Single Source Pricing Regulations”, the document published in, I think, October 2011. I will quote my own words—because I said them better then than I could today—from the foreword to that report:

“Tackling industry’s cost-base and improving the MOD’s procurement process are at the heart of this Government’s transformation agenda for Defence.”

Importantly, I also said:

“Making industry more efficient should not only achieve value for money to the taxpayer, but also lead to a more competitive role for the UK industry in the export market.”

I was particularly pleased by the emphasis that Lord Currie put in his report on small and medium-sized enterprises. Again, I said in my introduction:

“Small and Medium Enterprises…would have fewer data reporting requirements and a simplified profit rate process. Larger contractors would be expected to provide an annual statement on how they have engaged SMEs in their supply chain.”

It is a hugely important development in the single-source pricing regulations review that we will now ask contractors to say what they are doing to help SMEs in their supply chains, because so much of the innovation in modern defence comes from SMEs. We want to know that they are being helped and encouraged by the primes—the big contractors—and I am sure the report will be important in ensuring that that happens.

I agree with the hon. Member for Hartlepool and my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot), the Defence Committee Chairman, about single-source pricing regulations and possible exemptions for foreign companies. In fact, the Bill gives the Secretary of State the power to exempt individual qualifying contracts from the process, but I agree that it could be used to exempt foreign companies. I cannot think at present of many examples of a non-competitive contract going to an overseas contractor, and this would not affect FMS—foreign military sales—as I understand it, so the Tomahawk missiles, for example, would not be covered by the regulations.

There is a powerful point here about the risk of creating a perverse incentive, should foreign companies be exempt, for British contractors to move more of their operations overseas to escape the new regulations. I hope there will be a truly level playing field and that the American defence contractors—who typically will be affected by the regulations—will genuinely be affected and not exempted from them. I also obviously expect the Single Source Regulations Office to be truly independent and sympathetic to the needs of small and medium-sized contractors, as the industry suggests.

Turning to Defence Equipment and Support itself, potentially the most controversial part of the Bill, getting the budget balanced was the easy bit. It did not seem so at the time—certainly not for my right hon. Friend the Secretary of State—but keeping the budget balanced is going to prove a lot harder. Acquisition reform is going to be central to achieving that.

I am delighted about the bipartisan process that has been adopted, and I have a bit of an apology for the hon. Member for Plymouth, Moor View (Alison Seabeck) who is on the Opposition Front Bench. Last year, we worked through the complex issues associated with this development but did not keep her properly informed about how things were developing. I am grateful for the sympathetic meeting we had in my office some time last year, when we brought her up to date on our thinking. I apologise, in that we got too obsessed with the internal processes of government and did not do enough to communicate how our thinking was developing.

Bernard Gray was a special adviser to the last Labour Government and is Chief of Defence Matériel for this Government. His report of 2009 called for a GoCo. That was not the initial view of Ministers in this Government, but we changed our minds as we listened to the argument. I was rather amused by the response of officials to his report. When I took on the ministerial portfolio it was all, “Well, we all knew it was like that; we don’t need Bernard Gray to tell us this. It will all be absolutely fine. He told us nothing new at all”. Actually, he did tell us something new. He put it all together in a powerful and punchy way, and I am sure the issues had never been analysed as coherently and consistently as they were by Bernard Gray.

I was presented with the document entitled, “The Defence Strategy for Acquisition Reform”, which was a product of the last Government. It was a classic piece of Sir Humphrey-like bureaucratic obfuscation and box-ticking, with apparent action being the substitute for effective change. It provided a mass of detailed actions that gave the appearance of doing something while doing absolutely nothing whatever. Now, we all speak with unanimity about the dangers of an overheated equipment programme, about the conspiracy of optimism on programme costs, about the high price of requirement creep—huge steps forward—and about the lack of key commercial and engineering skills at DE&S.

I was struck by some of Bernard Gray’s comments in an interview in Civil Service World—a publication I like to read every week or month when it comes out. He said:

“If industry wants to go out and hire the best lawyers, the best programme managers, they can; and all the choices they make create costs that we bear. So we’re paying them to upgrade their side of the equation, but we don’t pay to have those skills available to our own side.”

That is a very important point indeed. I think we now understand that we have to keep the equipment programme balanced, to create proper boundaries between DE&S and the customers and to ensure that DE&S has the skills, processes and incentives to keep costs down.

DE&S does most of its work extremely well, and its staff deserve a pat on the back and to be congratulated more often than they are. The phenomenal work done recently on urgent operational requirements and operations should be a cause for deep and warm congratulations. Sometimes the staff are unfairly pilloried by some members of the national media, and there are nowhere as many of them as is sometimes said. The current headcount—I look to the Minister for reassurance here—is some 14,000 or 15,000 after a series of very steep reductions in recent years. I believe that only some 8,000 civilians would transfer to the new GoCo if such a transfer were to take place, with around 2,000 military secondees—some 10,000 people, which is much smaller than the 29,000 figure one often hears quoted by cynics.

I have three specific concerns about the GoCo. First, could we write the contract? I have been reassured on that and believe that the suggested phased approach addresses the issue sensibly. Secondly, would it offer value for money? I believe it will, and we will know very soon. It is right for the House to be exposed to this argument in as much detail as possible, consistent with commercial confidentiality and not prejudicing the Department’s commercial position.

Finally, would our allies be happy, especially about the security question? I have seen some alarmist reports in the specialist media about the American view and I am confident that that can be addressed. We have a GoCo already for the most secret thing we do—that is, nuclear warheads—and there is no reason why we cannot address those concerns. Our nuclear propulsion plants and our submarines are already built by the private sector and there is no reason why we cannot write the kind of guarantees our foreign allies would seek.

I have a number of questions, some of which echo points that have already been made. First, on the point made by the hon. Member for Hartlepool, will DE&S be incentivised to support exports? That is an important question and we need to know how that will be achieved. Secondly, will the system have enough flexibility to cope with sudden surges caused by operations? Will there be sudden meetings of lawyers and specialists to discuss contract amendments, or will we be able to deal with sudden and rapid surges in demand? Industry is right to worry about intellectual property protection, and clause 7 and schedule 2 will need particularly careful scrutiny in Committee.

Above all, I am worried about the speed of progress. I intervened on my right hon. Friend the Chairman of the Defence Committee about the invitation to negotiate. Time is slipping through our fingers and—call me cynical—I still fear there might be people in the Treasury, the Cabinet Office and the higher echelons of the MOD who do not like the idea and might like to kill it by civil servants’ favourite device of time-wasting. I hope there are no such processes under way and that my hon. Friend the Minister can reassure me that after the rapid progress we have made, there will be no slippage in the invitation to negotiate, as urgency is needed.

I believe that only radical change will secure the behavioural changes we need in defence. It is not just about numbers on a bit of paper but changing people’s mindset. We need to ask what the taxpayer’s relationship is with the armed forces and what we need to do to improve the way we operate. Even if the value for money case is finely balanced, the behavioural changes a GoCo would introduce would make it worth deciding to go for a GoCo. I hope a modest, finely balanced judgment will not be used as an excuse for not proceeding. Only if the value for money case was clearly negative would there be grounds to pause and think again.

In the preface to his 2011 report, Lord Currie of Marylebone summed up my attitude to the procurement aspects of the Bill:

“The reward is a more stable environment for the single source defence sector, where industry is more cost competitive in export markets, and the MOD maintains a balanced budget. That balance will avoid the need to cut or delay programmes and greatly reduce the level of waste that results, with benefit to the MOD and industry, including SMEs. This is a much healthier position for both parties, and one that should help to take them out of the spotlight. The real prize…will be better value for money for taxpayers and a better equipped front-line.”

That is what the Bill will deliver.

[Thomas Docherty (Dunfermline and West Fife) (Lab)]

Let me begin by following up on the point made by the hon. Member for Mid Worcestershire (Peter Luff), who said that ex-Ministers probably should not boast about their achievements. I say gently to the ex-Minister that if they do not do the boasting, there is probably no one else who will do it on their behalf.

I think we have been greatly served over the past two decades by a succession of good, generous and genuine procurement Ministers, not least Lord Gilbert who so sadly passed away just a few short weeks ago. The spirit of the debate on both sides of the House is testimony to the fact that we believe that providing our men and women who serve so bravely with the correct equipment is an issue on which we should not make too much of a party political point—although Members will forgive me, as we are in Parliament, for making some observations in my speech.

I have a specific question for the Minister, which he may wish to consider, on the reserves and the territorial extent of the provisions. The explanatory notes state that the Bill’s scope on reservists will extend to the Channel Islands and the Isle of Man—so, to Crown dependencies—but do not mention the overseas territories. It is my understanding that Bermuda and Gibraltar raise TA units, and it would be helpful if the Minister could explain why the provisions will not extend to Gibraltar and Bermuda. I know that the Minister is already thinking carefully about the answer he will give me.

There has been some suggestion that the budget is now balanced, but unfortunately the Defence Committee’s view has been that as the Secretary of State has consistently refused to show us the books, we have no way of upholding that judgment. The Prime Minister—he is only the Prime Minister and not Lynton Crosby, so he is not actually running the Government—has said that his preference is for a real-terms increase from 2015 or 2016, but there is some confusion about the date he meant. Perhaps the Minister will explain what will happen if there is no real-terms increase. Will the books go out of budget? This returns me to my exchange with the hon. Member for Mid Worcestershire. If the books are balanced only in the event of a real-terms increase beyond 2015, I am afraid that we shall have another black hole, whether the Minister likes it or not.

I am something of a sceptic when it comes to a GoCo, for a reason that the Minister heard me give only last week when he met members of the Defence Committee representing both sides of the House. There are three reasons for the overruns and programme delays that have led to some of the biggest procurement problems in the last 20 years: those involving the Type 45 destroyer, the joint strike fighter and the Queen Elizabeth class carrier.

First, there is the conspiracy between the defence industry and the services. The industry wants the work and the services want the kit, so they artificially drive down the cost that they declare to Ministers for each project. Surprisingly enough, once the main gate decision has been reached, the costs start to rise to fairly extreme levels. We also see decisions being pushed to the right. As was pointed out by my right hon. Friend the shadow Secretary of State, Labour must take some responsibility—our hands were not entirely clean in this regard—but it is not a new problem.

Secondly, there is the chopping and changing of programmes. We saw that when, following the strategic defence and security review, a carrier decision was changed in favour of a sea variant. After £100 million had been wasted in 18 months, the new Secretary of State made the correct decision to return to the B variant, but unfortunately we are where we are, and, regrettably, the taxpayer is down £100 million. Thirdly, there is the problem of immature decision making on the part of the MOD and the services. They do not necessarily understand what their requirements are in the longer term, and that drives up costs.

The GoCo will not solve any of those problems, but strong ministerial leadership would help to alleviate at least two of them, if not all three. I hope that the Minister will explain how the MOD will tackle the buy-in conspiracies, the chopping and changing, and the lack of mature decision making.

As was made clear by my hon. Friends the Members for Hartlepool (Mr Wright) and for Merthyr Tydfil and Rhymney (Mr Havard)—and, indeed, by the right hon. Member for North East Hampshire (Mr Arbuthnot)—the Committee feels quite strongly about the research budget. We spend only 1.2% of the defence budget on research and development, and not all that money is going to United Kingdom companies. We are, in effect, subsidising other nations. The Defence Committee has an aspiration—it cannot be described as a pledge—to reach a spending level of 2%, and, crucially, we think that that money should be spent on UK companies. We must support our own companies, as the Americans and the French do. We should welcome an update from the Minister on the progress of, for instance, the remotely piloted aircraft programme. I understand that Sentinel will not be funded beyond 2015, and it would be helpful to understand the implications of that now.

May I press the Minister to say more about how two programmes will be dealt with under either GoCo or single source? I will not make my speech about Trident today, because we shall have a three-hour debate on the subject tomorrow, but it would be helpful if the Minister could explain how the common missile programme will be dealt with, in practical terms, under the new arrangements. I should also like to know how the joint strike fighter programme will be dealt with, given the genuine concern that has been expressed by our closest ally about GoCo and the new arrangements.

I am slightly disappointed that the Bill contains no provision to tackle the “revolving doors”. The Committee is concerned not just about the revelations in The Sunday Times about generals and admirals leaving on a Friday afternoon and popping up in the defence industry on a Monday morning, but about the more general policy. I am not specifically criticising the Bill here, but it would be helpful if the Minister outlined what steps he intends to take, so that we avoid this culture and what appears to the Committee to be an unhealthy relationship between some of our senior military leadership and the defence industry is tidied up.

It is easy to knock civil servants. Politicians have never lost a vote by having a go—[Interruption.] Except in Cheltenham, where I suspect that if a politician knocked the civil servants, they would probably lose quite a lot of their votes. On the whole, however, knocking civil servants is not a difficult gig, and successive Governments have perhaps been guilty of doing that. I think we must recognise the contribution made by our civil servants, however, as we would not have a procurement programme or a functioning defence industry without them. I hope the Minister will say that this is not going to turn into an exercise in beating up civil servants.

I cannot see anything in the Bill about how the pay and conditions for those for whom Bernard Gray wants greater flexibility will be set. The Defence Committee is very concerned that Mr Gray may be seeking to have the power to set the pay and conditions for his management team without ministerial buy-in. Will the Minister explain how he will ensure that there will be ministerial accountability for all the pay and conditions awarded to Mr Gray and his team? We understand the argument about increasing competitiveness, but we must not get into some of the situations that have developed elsewhere, with personal contracts and off-the-books arrangements and tax avoidance, such as for the chief executive of the Student Loans Company. Will the Secretary of State still have to sign-off all individual packages, or does the Minister expect that to be delegated to Mr Gray and his successors?

On the point about invitation to negotiate, it is my understanding that we have seen a slippage from July to August. Can the Minister confirm whether that is indeed the case, and does he understand the concern felt by me and many other Members across the House in respect of the aspirational timeline he has set and the possibility that it will become harder to meet the deadlines? I might not attribute this to the same cynical reasons as the hon. Member for Mid Worcestershire, but can the Minister assure us that if the date has indeed been moved, there will be no rushing of the later stages to get us back on track?

I appreciate the sentiment behind the aim of trying to transfer financial risk from the MOD to defence contractors, but does the Minister accept that in reality that is impossible, partly because we are talking about buying kit for our men and women serving on the front lines? The MOD will have to own and take accountability for those decisions, therefore, and any slippage or risk will ultimately be borne by the politicians, not BAE or Babcock or whoever else. I am also yet to be convinced that there is a practical way of transferring the financial risk, because. given the types and the size of the contracts, in the final analysis the MOD will still have to be the underwriter for those projects.

I have asked the Minister this question before, but I did not get a clear answer, so I will ask again: which country does he hold up as a good example of defence procurement? We often hear about the bad examples, but I have yet to hear that there is any good example. Perhaps the Chinese, for the obvious reason they tend to chop people’s heads off when it goes wrong? Which country would the Minister hold up as doing procurement well? The United States has some of the worst examples of procurement. We need only to look at the strike fighter to see that. That project’s costs have increased 100% in the past 10 years, from $100 million per airframe to $191 million.

[Mr Brazier]

Sweden, a country of just 8 million people, developed its own fast jet fighter. Its defence industry has an astonishing record of not only using high-quality equipment but finding diverse civil applications for many of its products.

[Thomas Docherty]

I am grateful to the hon. Gentleman; he has made that point about Sweden to the Defence Committee as well. I take on board the point that he is making about the Saab Gripen. My understanding is that the Swedes would say that they procure less badly than us or the United States; they would not say that they were a great procurer. The hon. Gentleman is probably right, however, and he has probably helped the Minister to avoid doing some homework. Sweden might be a reasonable example, although it does not have a fantastic track record on procurement schemes.

Let us bear in mind some of the problems that we have coming down the road, including the strike fighter. I apologise to my colleagues on the Defence Committee for having been something of a sceptic about the whole procurement system. An example can be seen in air-to-air refuelling. The A-variant of the strike fighter, which the US air force, Australia and most of our European allies are procuring, uses a probe and drogue refuelling system, whereas the B-variant and the C-variant, which we and the US Marine Corps are buying, use a boom refuelling system. Unfortunately, the two systems are not compatible with each other, so if the RAF were to win its argument for the A-variant, it would have to retrofit the Voyager tankers to enable them to be refuelled. That is an example of the UK, the US and others not being joined up, and it is absurd that we have got into such a situation. I shall not rehearse the arguments about the carrier, but the Defence Committee found that there had been an “immature understanding” of the decisions on the strike fighter and the carrier, and that not enough detailed work had been done before decisions were made. Will the Minister tell us how he is going to fix that problem?

There is a great deal to commend in the Bill. The fact that we have heard supportive remarks from the Opposition Front Benchers and from Back Benchers, who are not always sympathetic to the Secretary of State’s arguments, bodes well for the legislation. We all wish the Bill God speed.

--- Later in debate ---

[Penny Mordaunt]

I am grateful for my hon. and gallant Friend’s intervention, as his experience in this matter will back up my point.

In my experience, reservists are extremely dedicated individuals who have to reach the same standards as the regulars. The joint training between the two, instigated in the past few years and which it has been my privilege to experience, has been very powerful indeed. To achieve the recruitment and training we need for our future reserve forces, we need to focus on the detail and the dry administration: we need to ensure that people are getting their medicals swiftly; and their identity cards, joint personnel administration accounts and insurance cover need to be processed quickly if we are to retain interest from new recruits and deliver the throughput we need to regenerate that capability.

I am extremely pleased at the attention given and the offer made on strengthening the package not only to reservists, but to their employers. That is an excellent piece of work. I also hope that we will be able to focus on problems that lie in particular professions, where reservists are having real difficulty in meeting their training and deployment commitments. Anecdotally, teachers always seem to top that list, but one would think that that profession would be well geared up to cope with reservists, given the supply teaching system. I hope the Minister will be able to give that some attention.

There has been much focus on the issue of reserve forces as the major challenge facing the MOD, but I would argue that it is tiny in comparison with the challenges on Defence Equipment and Support. What we have had has not been fit for purpose; earlier in this Parliament, I highlighted the case of a frigate that was deployed to Libya with no defensive weapons on board. Historically, we seem to have been incapable of getting what we needed, where we needed it and in a state in which we could use it. It will be some time before these reforms come into effect. They are very much needed and I very much welcome them, but they will not take effect immediately. I hope that the Minister can provide reassurance that the status quo will not remain in the interim. We cannot wait for this Bill to take effect for further progress to be made; we need further improvements now. I very much recognise the considerable progress that has already been made, but it must continue and pick up pace.

Immense changes lie ahead for our armed forces and in how we procure for them. We must seek to protect our sovereign capabilities and the unique research, development and supply chain networks so evident in constituencies such as mine. We need to have a clear vision of what industrially is in our national interest. We need to consider: what technology should we be investing in with our research and development funds? What do we build enough of over a given cycle? What is genuinely innovative? What kit could we be using in trade deals, for example? To which countries should we be exporting? Clearly there are countries to which we do not want to sell particular kit, but it might be to our advantage, for diplomatic and defence reasons, to sell them naval assets to protect their oil platforms, for example. Outside the MOD we need a more sophisticated view on exports.

Much scepticism has been expressed in the Chamber this afternoon about an off-the-shelf approach, but people could be very reassured by reading the White Paper produced by my hon. Friend the Member for Mid Worcestershire (Peter Luff), who is no longer in his place. [Hon. Members: “He is over there.”] I am glad that he is here for the pat on the back that I am giving him. That excellent White Paper captured the necessary subtleties when considering whether to retain particular sovereign capabilities and focusing on our national interests. We need to learn from the example of the MARS tanker contract, which he cited, because although a proposal might seem on paper to be the best decision for the budget and the procurement process, we must be aware of its knock-on effects on the supply chain. A number of companies would have found it difficult to get a foot in the door to supply kit for that project, including large companies with an export rate close to 50% of what they produce. We must learn from such experiences and guard against throwing the baby out with the bathwater.

For understandable reasons, the previous strategic defence and security review was not strategic enough. We therefore must ensure not only that the next one is strategic, but that a strategic approach permeates our defence procurement, because only then will we get the best value from our budget.

If the Minister will forgive me, I shall conclude by returning to a campaign about which he has heard me speak many times. As he sorts out the tangled mess of contracts that he has inherited, I hope that he will consider the case that building two ocean patrol vessels for the Royal Navy would be the best use of the budget. Obviously, I would want them to be built in Portsmouth, which would give the city a couple more years to put in place an excellent plan for the future of the dockyard. It would provide the overstretched Royal Navy with a couple more hulls, as well as freeing up the existing and future frigate fleet from undertaking tasks for which, frankly, frigates are not needed. I have bored the Prime Minister, the Chancellor and Ministers from the Ministry of Defence to the Department for Environment, Food and Rural Affairs about this, and I thank them all for giving up their time to listen to me.

[Mr Brazier]

I hate to interrupt my hon. Friend’s compelling speech, but may I suggest that she could not possibly bore on that subject? She is absolutely right from a shipbuilding angle, as well as from the point of view of flexibility and value in the Navy, so full marks to her.

[Penny Mordaunt]

My hon. Friend is absolutely right that the proposal would be a good idea for the Royal Navy and the taxpayer, as well something that would cheer him up no end. If the Minister agreed to my proposal, my happiness could be topped only if he also announced that he intended to revive the names HMS Portsmouth and HMS Penelope, which have been absent from the surface fleet for far too long. I thank him not only for listening, but for all the work that has gone into this excellent Bill.

Reserve Forces

Julian Brazier Excerpts

Wednesday 3rd July 2013 Commons Chamber

[Mr Hammond]

The approach to dealing with the estate and the rationalisation of structure has not been territorial but was based on the structure of the Army. Some new major units are relocating to Scotland. To answer the hon. Gentleman’s specific questions, there are 52 reserve sites in Scotland. Seven will be vacated and a new site will reopen, which means a net loss of six. According to my calculation, that is a 12% reduction in site footprint. I accept that the hon. Gentleman does not have ready access to the information, so he cannot know this, but some of the sites in Scotland are so incredibly poorly recruited that I think that even he would struggle to argue for their retention. There are sites with an establishment of 30 or 40 and a recruited strength of six, seven, eight or 10. We clearly cannot deliver a proper offer to Scottish reservists unless we consolidate on to sites that will deliver a critical mass at the sub-unit level for training.

[Mr Julian Brazier (Canterbury) (Con)]

I congratulate my right hon. Friend and the Minister of State, my right hon. Friend the Member for Rayleigh and Wickford (Mr Francois), on an immensely good package. In the last statement, we heard that the Government were going to get back to using formed sub-units, which is what reserve officers want. This time, we have heard that we have gripped the critical mass issue at sub-unit level, that we are resourcing equipment properly and that we will have opportunities for employers at all levels and money for SMEs. This is a package for the future of the reserves and the future of our armed forces, of which we should all be proud.

[Mr Hammond]

I am grateful to my hon. Friend and repeat the congratulations expressed by my right hon. Friend the Member for North East Hampshire (Mr Arbuthnot) on his work in this area as a member of the independent commission, a tireless advocate of the reserves and a giver of good advice over a long period on a complex issue. I am grateful to him for his endorsement, as he is one of the significant number of people in this place who understand the reserves and what the debate is all about.

Oral Answers to Questions

Julian Brazier Excerpts

Monday 17th June 2013 Commons Chamber

[Mr Julian Brazier (Canterbury) (Con)]

Does my hon. Friend agree that America’s understandable decision to shift its focus towards the Pacific puts all the more responsibility on countries such as Britain, which after all are much closer to the potential threats than America is, to keep up our armed forces despite the economic situation?

[Dr Murrison]

Clearly we cannot ignore the economic situation, because it poses a clear and present danger to this country and others. I think that it means that we will have to renew our efforts with our friends and allies to ensure that they, too, spend significant sums of money on defence, but I should emphasise that the US is quite clear about its continuing commitment to Europe and the MENA region, and I think we should take some comfort from that.

Better Defence Acquisition

Julian Brazier Excerpts

Monday 10th June 2013 Commons Chamber

[Mr Hammond]

The latter part of the hon. Gentleman’s question is clearly one that I cannot answer on a unilateral basis, but I suspect that, in the way that generally happens, there is a potential win-win situation here—a win for the taxpayer in terms of lower public expenditure and a win for the armed forces in terms of greater capabilities being able to be purchased. I think I included these figures in my statement, but the independent estimates are that somewhere between £1.3 billion and £2.2 billion of frictional costs generated by inefficiencies in the procurement system are incurred every year. It would be a very rash man who suggested that we can squeeze out every last pound of those, but I would expect us to be able to achieve net gains after taking account of the cost of the arrangements—the GoCo fee and the cost of the governance function on the MOD side—in the hundreds of millions of pounds.

[Mr Julian Brazier (Canterbury) (Con)]

I welcome my right hon. Friend’s thoughtful statement. Will he confirm not only that Aldermaston is a GoCo, but that in fact most of the American nuclear programme has historically been run by university-led GoCos? I urge him to look carefully at the issue of military project managers and at the experience from abroad. In land systems, in particular, we can end up with a project manager and an expensive military adviser, rather than one uniformed officer driving it forward. It is worth looking at the Swedish experience, for example, which is of a very effective and tight ship with mostly military project managers.

Reservists

Julian Brazier Excerpts

Tuesday 23rd April 2013 Westminster Hall

[Mr Julian Brazier (Canterbury) (Con)]

I congratulate my hon. and gallant Friend the Member for Beckenham (Bob Stewart), including on the fact that he has the second-last ever Distinguished Service Order awarded for gallantry. I am conscious that many hon. Members—including the Minister, whom I am pleased to see in his place, and the Whip, the Lord Commissioner of Her Majesty’s Treasury, my hon. Friend the Member for Milton Keynes North (Mark Lancaster)—have been on active service, and that I have not.

Let me be absolutely clear that I firmly believe that the Government’s direction is right. I have one or two reservations on details, but we should be clear that the tiny proportion of the work force that we need to recruit to make it work is much smaller, and the balance with which we will be left is a much smaller proportion of reservists, than in any other English-speaking country.

[Richard Drax (South Dorset) (Con)]

Will my hon. Friend give way?

[Mr Brazier]

I am sorry, but I am conscious that I must leave time for other Members.

The national guard and the US army reserve make up more than half of the American army, and two thirds of Australian infantry battalions are in the Australian army reserve. The fact is that other countries have delivered such a change and have been able to do so. When I visited units from the national guard in Afghanistan, I was told that its brigade, commanded by a civilian soldier—he is a banker in civilian life—had achieved a 98% turnout for its deployment for three months’ work-up and nine months’ active service there. I was intrigued by the roles that it had been given. The infantry battalion that I visited had detached platoons along the Pakistani border defending provincial reconstruction teams, a role in which older soldiers with civilian skills could produce double value, given the skills that they bring as well as their being infanteers.

I am a great believer in maintaining political control over the call-up of volunteers, but the one area we must delegate is disaster and emergency relief. The Americans, Australians and Canadians all say that that is their No. 1 recruitment factor with employers and local communities, although it is a tiny proportion of their activity.

I want to suggest a couple of things that need sorting out. We must be clear that we are talking about the integration of two forces, each of which has a very different ethos. There is a danger of sliding back into the old days of assimilation. The absolute shambles in recruitment for the nine months from April to December, which will leave a permanent gap in the numbers, was because of the Regular Army’s imposition of a completely unworkable system on the reserves. My hon. Friend the Member for Filton and Bradley Stoke (Jack Lopresti) gave good examples of that. It has now been sorted out, but it has left a nine-month gap in recruiting numbers.

If we are to maintain the distinction of ethos, we must also be clear that the vast majority of volunteer reserve units abroad are commanded by reservists. Unbelievably, 24 out of 30 commands went to regular officers on a 2011 list; the last was a little better, but not a lot. If we are to produce the volunteer ethos, soldiers need to be commanded by people who are used to dealing with employers, understand how to market training to soldiers with competing demands and, above all, have the moral plus that comes from being able to look a soldier in the eye, when he is under serious pressure from his employer, and say, “I’ve been there too”, not someone who can take Mondays off. To do that, we must provide more support for Territorial Army commanding officers, so that people with busy civilian jobs can fulfil their role on a genuinely part-time basis, as they do everywhere else in the English-speaking world.

We need to see off the attempt by the Defence Infrastructure Organisation to take over the control of the reserve forces and cadets estate from the reserve forces and cadets associations, which have much lower overheads and are far more efficient. We must also sort out the muddle in cyber, where a centre of excellence—the Specialist Group Royal Signals—has been broken up, with its squadrons sent off to different parts of what some of us think is a rather expensive and wrongly oriented set-up.

Those are points of detail, however. The fact is that the Government have set the right course. They are tackling a profound imbalance in the system. Everyone here wants defence to have a higher priority, but the balance was wrong and the Government are doing everything they can to restore it. I look forward to hearing from the Minister.

Oral Answers to Questions

Julian Brazier Excerpts

Monday 15th April 2013 Commons Chamber

[Mr Julian Brazier (Canterbury) (Con)]

I welcome my right hon. Friend’s robust earlier reply, but does he agree that the links to which he and my hon. Friend the Member for Kettering (Mr Hollobone) referred—not only with Iran but, to a lesser extent, with other potentially extreme regimes—emphasise once more that, in a world with huge uncertainty, our nuclear deterrent is critical?

[Mr Hammond]

I agree with my hon. Friend, and I would go further and say this: the life expectancy of the replacement ballistic missile submarines will be about 35 to 40 years, and it would be a very brave man who would claim now that he could see, 40 years ahead from the 2020s, that there will be no need for that capability.

Army Basing Plan

Julian Brazier Excerpts

Tuesday 5th March 2013 Commons Chamber

[Mr Hammond]

None whatsoever is the simple answer. The withdrawal of our forces from Germany represents the logical conclusion of the ending of the cold war some 20-odd years ago. Keeping a large standing force in Germany is expensive and no longer serves its original strategic purposes. As our Army becomes smaller, the diseconomies of scale of having two separate centres for armoured vehicle training, for example, and consequently two separate centres for armoured vehicle maintenance, become unsupportable. This is a logical final move following the conclusion of the cold war era.

[Mr Julian Brazier (Canterbury) (Con)]

The closing of Howe barracks is clearly a blow to the local community, as the 5th Battalion the Royal Regiment of Scotland made a huge contribution to the community, and indeed a number of its members have given life and limb. Nevertheless, the logic of my right hon. Friend’s announcement is clear. In looking to part 2 of his statement, which will be made before the summer recess, may I urge him to consider two things? First, it is very important that the TA is based where it has historically recruited and where it can recruit and that that is not distorted by pairing arrangements with regular units, important though they may be. Secondly, it is critical that we keep our training areas going, particularly the smaller ones, because otherwise we will find that the new model will become unviable.

[Mr Hammond]

First, today’s announcement says nothing about the training estate. If announcements about the training estate need to be made, my right hon. Friend the Minister for the Armed Forces will make them. I recognise the tension my hon. Friend outlines between the need to have reserve accommodation in the areas where we recruit and the need to enable joint training for regulars and reserves, which is at the heart of our new model for the reserve forces. I can assure him that resolving that tension is at the core of the work going on and will inform the reserve basing review, which I will announce to the House before the summer recess.

Oral Answers to Questions

Julian Brazier Excerpts

Monday 25th February 2013 Commons Chamber

[Mr Julian Brazier (Canterbury) (Con)]

I welcome my hon. Friend’s commitment to this programme. Will he confirm that the aircraft carriers will be the largest in British history, and can I urge him not to let anyone put him off building them?

[Mr Dunne]

My hon. Friend is a redoubtable champion for all matters to do with the armed forces. He is aware that the 65,000 tonne aircraft carriers that will form the Queen Elizabeth class will be not only the largest aircraft carriers ever built in this country, but the largest naval ships ever built in this country.