Oral Answers to Questions

Lord Beamish Excerpts

Monday 15th April 2013 Commons Chamber

[Mr Hammond]

I am grateful to my hon. Friend and disappointed that the sole representative of Scottish separatism in the Chamber today had disappeared before we reached this point in proceedings. I have indeed seen the recommendations of the House of Lords report. As my hon. Friend will know, the Government’s position is clear: Scotland benefits from being part of the United Kingdom and the United Kingdom benefits from having Scotland in it. We are confident that the Scottish people will agree. However, in the event that they voted to leave the United Kingdom, the referendum, rather than being the point at which Scotland would leave the Union, would mark the beginning of a lengthy and extremely complex set of negotiations between the Scottish and UK Governments on the terms of independence. If an independent Scotland wanted to change the arrangements for the UK’s nuclear deterrent, the considerable costs, complexity and time scale involved in delivering alternative arrangements would inevitably be a major feature of the negotiations. It is therefore incorrect to suggest the need for an immediately deliverable contingency plan for the deterrent. However, the House will be aware that the MOD plans for a huge range of contingencies. For reasons of national security, we do not comment publicly on plans relating to the nuclear deterrent.

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

The MOD underspent its budget by £3 billion last year: a total of £1.6 billion is being carried forward, and there is now a shortfall of £1.4 billion up to 2015. Further to the question asked earlier by my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop), can the Secretary of State tell the House why the MOD is not using some of that money to backdate the pay increase from May to April announced in the Budget?

[Mr Hammond]

A significant proportion of the underspend in 2012-13 is, in fact, the result of delayed spending on equipment programmes and will be needed to be spent in 2013-14 and 2014-15. As the hon. Gentleman will also know, part of the underspend is being used to meet the additional reductions in the budget announced by the Chancellor in the autumn statement and the Budget, which is why we are able to meet those requirements without cutting into the delivery of our core outputs in 2013-14 and 2014-15. To amplify the point about the pay settlement that is effective from 1 May, I will say this: the practical reality is that the MOD’s pay system is quite fragile, and the possibility of making a retrospective change was considered significantly high-risk. It would introduce a significant risk of a catastrophic breakdown in the pay system. We therefore—