Oral Answers to Questions

Kevan Jones Excerpts

Monday 15th January 2018 Commons Chamber

[The Minister for the Armed Forces (Mark Lancaster)]

My hon. Friend is a champion for the cadets. With more than 800 cadets and 125 adult volunteers in 20 detachments, the Hereford and Worcester Army Cadet Force demonstrates how the cadet experience provides opportunities for young people to develop self-discipline and resilience. I started my military career in the cadets, I am a great fan of the cadets, and we certainly continue to support the cadet expansion programme.

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

T7. The national shipbuilding strategy states that overseas nations will order 40 Type 31 frigates. It is nearly 40 years since we last successfully exported any frigates, so will the Minister explain how that figure was arrived at? Is there any fact behind it, or is it just optimistic spin?

[Guto Bebb]

Once again, the hon. Gentleman’s comments are disparaging of our ability as a nation. This country aims to deal with past failures by ensuring that we have a platform that will appeal to nations around the world. The MOD is confident that the platform that we are developing for the Type 31e will appeal around the world. It would be good if some Members who claim to represent British industry were willing to support rather than attack it.

Oral Answers to Questions

Kevan Jones Excerpts

Monday 27th November 2017 Commons Chamber

[Gavin Williamson]

I will always listen intensely and very carefully to the arguments of my right hon. Friend. I have always seen 2% as a base as opposed to a ceiling, and I will certainly take on board his thoughts and comments in discussions going forward.

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

I welcome the right hon. Gentleman to his new post and to the world of defence. The National Audit Office report earlier this year highlighted the fact that the Government have committed £24.4 billion to extra equipment, but only another £6.4 billion was actually there in new money for the joint strike fighter. How will he fill that £18 billion black hole in the budget on the basis that both the efficiencies and the headroom identified by the NAO have not yet been met?

[Gavin Williamson]

We have an unparalleled commitment from this Government to continue to increase defence spending on equipment—0.5% above inflation every single year. I will be very happy to look at all the issues in the National Audit Office report and make sure that, working with our industrial partners, we deliver very best value for our armed forces.

UK Amphibious Capability

Kevan Jones Excerpts

Tuesday 21st November 2017 Westminster Hall

[Ruth Smeeth]

I could not agree more. At this point, we need to agree what capabilities we need, and then what the budget should be—not the other way around. That is what the former Secretary of State said to us, and that is what we need to do.

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

Does my hon. Friend agree that the black hole is of the Government’s own making? In 2013, they increased the whole great shopping list of new equipment, with no extra cash to pay for it. It was predicated basically on efficiency savings and land sales, which have not yet been achieved and will not be achieved.

[Ruth Smeeth]

We need to be very clear about how big the hole is in the equipment budget. That has not happened yet in terms of invest to save, what efficiencies will be made and how we are going to pay for things. However, that is not an excuse to cut the numbers in our military or to get rid of current capabilities and platforms.

It would be a matter of grave concern and a genuine national security risk if tomorrow’s Budget included cuts to our military or made necessary additional savings that put our operational capabilities at risk. It is not just me saying so. Over recent days we have seen MPs, former Defence Ministers and retired senior service personnel lining up to warn that our armed forces are being hollowed out and to condemn the proposed cuts to our amphibious capability, including the reported loss of up to 1,000 Royal Marines—one of our most elite infantry units.

That is why today we must send a united message to the Chancellor of the Exchequer that his decisions on these matters will have consequences, that we cannot do national security on the cheap, that we must ensure our armed forces have the resources they need to deal with the threats we face, and that any reduction in our amphibious capability or in our Royal Marine numbers would be the wrong cuts at the wrong time. His Back Benchers are telling him, his own party’s grandees are telling him and those in this room today will tell him, I am sure, that as we prepare to exit the European Union and chart a new course for Britain’s role in the world, we cannot play fast and loose with the defence of the realm. The stakes are just too high. Let us be clear: that is exactly what the loss of our amphibious capability and the suggested cuts to our Royal Marines would do.

Amphibious capability at its most basic means the ability to land troops from the sea. As an island nation, that is a core capability for the senior service and a central plank to our NATO contribution. In fact, we are the lead for NATO’s immediate follow-on group in 2019 and the main delivery partner for the Netherlands in 2020. Can the Minister tell us how we will meet those commitments with 1,000 fewer Royal Marines and no amphibious platforms? In fact, given the current threats from the Russian Federation, can she illuminate us on how she intends to defend our allies in the High North and protect our northern flank without our amphibious and cold weather specialists?

Our two landing platform dock ships, HMS Albion and HMS Bulwark, can carry 405 troops with amphibious vehicles and combat supplies. They are amazing platforms, as I can attest, having visited HMS Bulwark last year. They give us the capability to land our Royal Marines quickly and quietly in order to have maximum impact and to take land in hostile environments in the most effective way possible. Both those vessels are currently expected to remain in service until 2033 and 2034 respectively, which we have guaranteed by spending £120 million in the last seven years to refurbish both ships. In fact, HMS Albion only returned to service in April this year.

[Mr Kevan Jones]

Does my hon. Friend agree that it is not only the cuts to equipment such as Albion and Bulwark that are worrying? The cuts that have been made to winter training for the Royal Marines, for example, take away a unique capability we have at the moment.

[Ruth Smeeth]

I could not agree more. Having visited our Royal Marines in the Arctic to observe their training, I know how important that is for not only our own capabilities but the partnerships we build with other marines from our allies.

It has been suggested that the role of HMS Bulwark and Albion could be replaced by our two aircraft carriers or a cheaper Royal Fleet Auxiliary Service offering, but that is not what either is designed to do.

--- Later in debate ---

[Ruth Smeeth]

I could not agree more. Our Royal Marines work day in, day out—40 Commando and all the others—to ensure that we are where we need to be, helping our allies as well as protecting the nation.

To return to my speech, when using the carriers, our troops would have to be deployed by air. Although it may make sense to deliver the first wave of troops quickly by air, that has its limitations. First and foremost, it is impossible to infiltrate enemy territory by stealth by means of military helicopter. Troops may also need heavy weapons, vehicles, fuel, food and ammunition, which cannot be delivered in sufficient quantity by our current complement of helicopters. In more intense conflict, armoured vehicles, artillery and even a few main battle tanks may be required. Unless there is a convenient port close by, the armour and logistical support must be delivered over the beachhead even if in a second wave after the helicopter-borne troops have secured the area. In the words of Admiral Sir George Zambellas:

“Nobody in the world of complex warfare, especially for an island nation that delivers force from the sea, thinks that a reduction in the sophisticated end of amphibiosity is a good idea.”

Another option, which has been floated for some time, concerns proposed cuts of 1,000 Royal Marines. I feel immensely privileged to have had the opportunity to visit our Royal Marines around the world and even to have sort of taken part in their Arctic training in Norway, or at least what they allowed me to pretend to do. [Laughter.] The hon. Member for Berwick-upon-Tweed (Mrs Trevelyan) can stop laughing at me now.

I have seen at first hand the Royal Marines’ extraordinary courage, ability, focus and fortitude. They are truly an elite fighting force. However, what really stood out for me and, I am sure, for anyone who has spent any time with them is the mindset that they bring to their role. “First to understand, first to adapt and respond, and first to overcome”—that is the mindset of the Royal Marines and it is reflected in their extraordinary ability and versatility.

It is no wonder that the Royal Marines are disproportionately represented in the ranks of our special forces. In fact, the Royal Marines constitute only 4.5% of defence infantry but produce 46% of our special forces recruits. It is clear that making any cut to this life force of the UK special forces would make no military or economic sense. It has been suggested that as the threats we face as a country have changed, the need for these sorts of capability has diminished. I do not dispute that we must be ready to adapt to new threats and challenges. It is absolutely true that cyber-attacks and asymmetrical warfare open up whole new theatres of war, for which we must be prepared.

[Mr Kevan Jones]

Does my hon. Friend agree that the fleet protection role that 43 Commando plays in securing our nuclear deterrent is a vital role and that, if lost, it would be very difficult to replace?

[Ruth Smeeth]

I could not agree more. I have visited 43 Commando and seen up close the work that it does protecting the deterrent. Without it, I would be concerned about how we would move forward.

Where I disagree in relation to changes to warfare is with the idea that our amphibious capability is no longer a strategic necessity and is not a core aspect of the military mix that we will need going forward. It provides the option for small-scale raids, interventions and humanitarian missions. We must surely recognise that the ability to land troops from the sea, potentially in stealth conditions, has such a wide range of applications and is so vital a capability for an island nation that to diminish it would be an act of gross irresponsibility.

The 1981 review, “The United Kingdom Defence Programme: The Way Forward” advocated a reduction in the quantity of Royal Navy ships and a refocusing of the remaining resources towards Europe. Just a few years later, the Falklands war highlighted the continuing need for both our naval strength and a global outlook.

We saw a further U-turn in our approach from 1998 to the strategic defence and security review in 2015, when we looked away from Europe and towards the middle east. We had to review everything after Russia’s invasion of Ukraine. I do not doubt that threats change and that our military must change to meet them, but the role of Government is to ensure that we have a well resourced, mixed defence capability that is strong enough to defend us at home and abroad to keep us safe. When we look at the lessons of history, we see that we can never truly predict what capabilities we may need tomorrow, never mind next year. The truth is that there has been no change in the strategic environment to justify the current proposals. It is cost-cutting pure and simple. To make cuts that risk undermining our amphibious capability now, not knowing what the future holds, would be deeply irresponsible and could have serious ramifications for our future readiness.

Many people in Westminster Hall today know my fondness for the Royal Marines, and I am proud to be your deputy, Mr Gray, on the all-party parliamentary group for the armed forces, but today is not about that or even about our wonderful commandos. It is about whether we have what we need to keep us safe. Tomorrow is decision time for the Chancellor. Will he listen to the concerns from my party and his, and from servicemen and defence experts, and hit the pause button on these reckless cuts to our amphibious capability and, for that matter, to our defence budget? Will Britannia still rule the waves, or will she yield to them in the name of austerity?

--- Later in debate ---

[Johnny Mercer]

I am so sorry; I am half asleep. It is only a matter of time.

I want to make three really clear points to the House, to the Minister and to the Government. I have made my views on this clear. I am grateful for all the support that we have had from across the House because this is an issue of singular importance. However, it is very important that we do not dictate tactically what we ask our professionals to do in this country. What I mean by that is that our job here is to hold the Government’s feet to the fire, and to ensure that what they do is consistent with what they say. I do not think it is our responsibility to say, “You can never change this or that capability.” My attempts with the letter that has been signed by so many are simply a first stage in drawing a line in that battle.

What I am saying, though, is that I hope the Government, the Department and, critically, the Treasury and the Prime Minister now understand that there is a resilient cohort of Government MPs who will hold the Government to account on defence spending. Whatever our party or priorities, above all we are patriots, and it is not right to allow the Government to say something about defence on the one hand and yet under-resource it on the other. They cannot always say that defence is the primary duty of Government and yet hold their hands behind their back.

[Mr Kevan Jones]

So why are you a Tory then?

[Johnny Mercer]

That is an interesting intervention —in fact, I am just going to ignore it because it was pretty childish.

We must get our priorities right when it comes to defence. Over the weekend the Government announced that £2.3 billion would be put into artificial intelligence and driverless cars. Fantastic—great stuff—but when it comes to social policies such as those we cut our cloth according to what we can afford. When it comes to defence, we listen to the professionals who we ask to go and do the job for us and to wear the uniform. We ask them what we need and we provide them with what they need to keep us safe. As has been alluded to by my right hon. Friend the Member for New Forest East (Dr Lewis) time and again, the idea that we can come to this place and say, or sell it to the general public, that threats have intensified, diversified and increased so much that another security review needs to be conducted, and yet reduce the budget or capability for our armed forces to do that, is simply not credible. It will not be worn by the British public and it will not be worn by Back-Bench Conservative MPs.

Finally, all that I am asking for, and all that the MPs who have signed my letter, and MPs across the Conservative party, are asking for—we are the party of defence—is that we meet our manifesto commitment of a 2% of GDP spend and a 0.5% above inflation increase in the defence budget. That is the platform on which I stood at the general election, and I fully expect that commitment to be realised. We must get to a stage where we are being realistic about defence, and if the threats have increased, that must be met by a commensurate increase in money, commitment and willpower from both No. 11 and No. 10.

--- Later in debate ---

[Harriett Baldwin]

Indeed. In our national security capability review, we seek to understand how to spend that growing budget in the most intelligent way, by further modernising our armed forces against the traditional and non-traditional threats that we now face. In that context, it is only right that all areas of business across defence—

[Mr Kevan Jones]

On a point of order, Mr Gray. We have had a very good debate this morning. A lot of questions have been asked by Members across the Chamber. Now, call me old-fashioned, but I thought it was the role of the Minister when replying to a debate actually to reply to it and not just read out a prepared statement.

[James Gray (in the Chair)]

I am grateful to the hon. Gentleman for that point. Of course it is not a point of order; the Minister may indeed say what she likes when replying to the debate. However, if she replies inadequately, that is of course a matter for the record.

Defence Aerospace Industrial Strategy

Kevan Jones Excerpts

Thursday 16th November 2017 Commons Chamber

[Ruth Smeeth]

I completely agree. Let us be clear: this is a brand-new aircraft, and our Red Arrows, with their skills set, should be selling it to the world.

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

At the moment, this clearly hinges on the Qatari order, but does my hon. Friend agree that if that does not come forward and the Government do not bring forward the Red Arrows replacements, we may not have any sovereign capability for building fast jet trainers in this country?

[Ruth Smeeth]

I completely agree. The reality is that this is about our sovereign skills mix, and about whether we can develop future training aircraft or fast jet aircraft. This is also about people’s lives: for the people in the Gallery, this is about the jobs they will move on to in the future. This is therefore a key moment at which the Government should act.

[Mr Jones]

Does my hon. Friend agree that if we lose that sovereign capability, either the Red Arrows will go altogether, or the Red Arrows will in the future be flying Italian, French or possibly South Korean aircraft?

--- Later in debate ---

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

I congratulate my hon. Friend the Member for Stoke-on-Trent North (Ruth Smeeth) on securing this debate. She has outlined the importance of this industry to the UK economy. The crisis that we face is of the Government’s making. In 2010, they came into office and took great capability out, scrapping elements such as Nimrod. Then, in the strategic defence and security review two years ago, the then Prime Minister, David Cameron, tried to put in place a more ambitious programme of development, including the P8 purchase, more unmanned aerial vehicles and the attack helicopter.

The interesting point is that there was no extra money for that programme. It was going to be paid for by efficiencies and property sales. According to the National Audit Office report, the shopping list came to £24.4 billion, and the only extra money was £6.4 billion, which was earmarked to accelerate the in-service date of the F-35. That left the need for £7.3 billion from efficiencies and £10.7 billion from land sales, neither of which have been met. By 2020, £310 million will be met through staff efficiencies, but the drawdown from Germany—which many of us said would cost us—is going to cost £1 billion. This black hole in the equipment programme is of the Government’s own making.

Added to that are some ridiculously stupid procurement decisions that have been made in the past couple of years. In the light of Brexit and the plummeting pound, the procurement of the P8 and the Apache will add to the costs. The Minister intervened earlier to announce the importance of orders that had been placed with Airbus. Why did she not give that contract for the P8 to a British company? Boeing has made lots of promises about investing in this country, but I can tell her now that if that had been the other way round, with the US buying a British product, it would not have been done without a clear commitment to a workshare taking place in the USA. We have only to look at the AirTanker contract to see the muscle involved and the way in which it protects jobs in America first, rather than those overseas. The Government are actually adding to the problem.

The simple question is: do the Government want strategic capability for fast jets and certain other sectors? If they do, they are going to have to pay for that. In regard to the Hawk, there is a clear danger that we will be unable to provide fast jet trainers in this country. It used to be an annual thing when I was a Defence Minister for tabloids and Tory MPs to say that the Labour Government were going to scrap the Red Arrows. We never were, but under this Government, there is a danger that that is exactly what will happen if those orders do not come forward. This short-sighted Government are making lots of promises about equipment, but in practice, those promises are not being funded. The problem facing our industry is that, once we get rid of those skills, we cannot turn them back on again like a tap when we require them. We will be out of this industry for good. If we then wanted a Red Arrows display team in the future, it would have to have aircraft from Korea, France or Italy. That would be a damning indictment of this Government.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Defence (Harriett Baldwin)]

It gives me great pleasure to respond to this debate. I congratulate the hon. Member for Stoke-on-Trent North (Ruth Smeeth) and my hon. Friend the Member for Witney (Robert Courts) on securing it. We have heard 14 interesting and compelling Back-Bench contributions, and I will start by picking up on some of the general themes that came from them.

Many hon. Members spoke out on behalf of the incredible work of the BAE workforce in their constituencies. There has been an urgent question on this subject in recent days. The decision was made by the company, and it is currently consulting the workforce. As the Department is its largest customer, I have been in discussions with the company, asking that it looks to avoid any compulsory redundancies. As an employer ourselves, we are also in ongoing discussions regarding staff with the right skills who could fit into our organisation.

On the subject of the unfortunately named MUFC—the maritime underwater future capability—there is no hon. Gentleman who speaks up more for his constituents than the hon. Member for Barrow and Furness (John Woodcock). However, I am sure that he would acknowledge that there is a very solid pipeline of work in his constituency for decades to come. That shows the amazing work of those who live and work in his constituency. The maritime underwater future capability project is still ongoing work, and he will have seen some of the wonderfully imaginative recent ideas.

Regarding the Hawk pipeline, I can reassure the House that we continue to work on export opportunities to Kuwait and India. The RAF has 28 of the T2 aircraft, and there is no risk to the Red Arrows. A number of colleagues mentioned the P-8 aircraft. The first of that capability will come into service in 2019, and will be based at RAF Lossiemouth in the north of Scotland, which will be good for the local economy. Some excellent UK companies are in the P-8 supply chain, including Marshall with the fuel tanks, Martin-Baker with the crew seats and General Electric with the weapons pylons.

[Mr Kevan Jones]

rose—

[Harriett Baldwin]

I will not take any interventions because there is so little time.

My hon. Friend the Member for Henley (John Howell) spoke eloquently about the excellent Puma squadrons in his constituency. A number of colleagues asked about Typhoons. So far, just over 500 Typhoons have been built, and they are in service and have been ordered by nine countries around the world. There is still a significant pipeline of Typhoons to be built, and the statement of intent was signed with Qatar. Of course, the Government are working as hard as possible to ensure that those and the 12 Hawk aircraft are on contract by the end of the year.

Contributions from across the House have shown that not a corner of our great country is untouched by the nationwide enterprise that is defence aerospace. Indeed, we have a rising defence budget overall, and the strategic defence and security review in 2015 set out a £178 billion equipment plan for the next decade. In the last year for which we have the recorded numbers, 2015-16, the MOD had a spend of over £2 billion with UK aerospace, and that directly sustained over 7,000 jobs. In fact, I am delighted to be able to announce today that we have awarded Babcock three new contracts, worth £160 million, to provide RAF bases across the country with expert support.

As we heard in today’s debate, aerospace strikes a real chord with the British public, and we have heard some key reasons for that. There is obviously the historical connection and the fact that we have 100 years of the RAF coming up in the next year. We also know that our country would be a very different place were it not for the immense intervention of air power in world war one and particularly during the battle of Britain in world war two.

The current crop of aerospace experts in the UK has a worldwide leadership reputation. We have some of the most technically advanced and capable aerospace companies in the world. Aerospace is an engine of local and national prosperity. Up to 2,500 UK companies are involved in it, and it generates more than £33 billion of turnover, employing more than 120,000 people, including 26,000 just in research, design and engineering. Interestingly, more than 80% of the sector’s production is exported. Of the £64 billion brought into this country through defence-related exports in the last decade, 85% was generated by aerospace, and much of that was from the combat air sector.

Crucially, as the hon. Member for Stoke-on-Trent North mentioned, we are using our kit in places such as Iraq today. A combination of our Tornadoes and Typhoons has helped to bring Daesh to its knees and liberated millions of people from an evil death cult. I am sure hon. Members will want to join me in paying tribute to all the brave men and women who are currently serving in our aircrews on deployment.

We are absolutely right to celebrate the aerospace sector, but we also need to talk about the future. The Typhoon has been selected by nine national air forces, and we are currently pursuing exports to Bahrain, Belgium, Finland, the Kingdom of Saudi Arabia, Malaysia and Qatar. Other Typhoon nations are also pursuing export opportunities to other countries.

On the export pipeline, we are looking ahead not just one or two years. We need to look decades ahead, because we know our Typhoon aircraft will go out of service in 2040. The 2015 SDSR allocated a substantial budget over 10 years to the future combat air system technology initiative, precisely to protect and develop key design and engineering skills in our industrial base. The money includes funding for a national technology programme to maintain the UK’s position as a global leader in this area. Some of the work to mature other high-end technologies is with France, and some is with the US.

The decision on the future of combat air will require us to decide at some stage to replace the capabilities currently delivered by the Eurofighter Typhoon. It will be a complex decision, involving a clear military requirement and requiring detailed consideration of the industrial and financial implications. In terms of the timing, the decision will be made in the very early 2020s or sooner to enable a maingate decision on the procurement in or around 2025.

In conclusion, this is a key sector, and we have had a good debate highlighting a number of the issues in it. Our approach to the defence aerospace industry should be about an overall industry strategy, taking into account the business leaders, the educators, the representatives, the unions and the local economy. We must ensure that, whatever the dangers to come, the great industry we have been discussing today flies even higher, faster and further in the future.

Armed Forces (Flexible Working) Bill [ Lords ] (First sitting)

Kevan Jones Excerpts

Committee Debate: 1st sitting: House of Commons
Tuesday 14th November 2017 Public Bill Committees

[Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)]

I beg to move amendment 1, in clause 1, page 1, line 18, at end insert—

“(3B) The proportion of regular forces serving on a part-time basis in any single regiment may not exceed 15% of the total regular forces serving in that regiment.”

This amendment limits the proportion of part-time regular forces to no more than 15% of any regiment.

This is a probing amendment that seeks clarification from the Minister on how the Bill will work in practice, and specifically whether there will be any kind of cap or upper limit on the number of personnel on part-time working. The amendment refers to no more than 15% of any single regiment serving on a part-time basis, which is simply a way to establish whether the Government have any plans to place a limit on personnel who work part time, and at what level a cap would be placed.

There are significant problems with recruitment and retention in our armed forces, which is one reason for the Bill. As of September 2017, the regular armed forces were at a 5.3% deficit against the liability—an increase in the deficit from 4.1% under the liability in September last year. Furthermore, the outflow of regulars continues to outpace intake. Voluntary outflow is the main source of outflow, so most personnel who are leaving are doing so before the end of their agreed engagement or commission period.

The pay review body highlighted in its most recent report that issues with recruitment and retention have been acknowledged by the Department:

“In evidence MOD stated that there were recruitment and retention challenges across all Services for certain groups in the engineering and aviation cadres. It stated that recruitment of Regulars had continued to be challenging throughout 2015-16”.

Our armed forces are not in a situation where they can feasibly allow a significant number of personnel to work part time.

The Government’s fact sheet for the Bill says:

“We anticipate from the existing evidence that there will be a very small initial take up of the new flexible working arrangements, no more than 1% when they are implemented in April 2019. We anticipate that this will increase slowly as cultural change is fully embedded over the next 10-15 years.”

However, there is no indication of what the Government expect that figure to grow to and whether there will be any limitations on numbers.

The amendment highlights the fact that problems are more likely to emerge if a much greater proportion of those in specific roles want to work part time, particularly if they are in operational pinch points. OPPs are branch specialisations, sub-specialisations or areas of expertise where the shortfall in trained strength is such that it has a measurable detrimental impact on current, planned or contingent operations. As of April this year, there were 15 OPPs in the naval service. The key pinch points relate to engineering roles, plus some specialist roles such as warfare specialists. The Army has four OPPs, the key ones being logistics roles, and the RAF has 11 OPPs, where the key pinch points are in engineering and intelligence roles, as well as shortfalls in the aircrew branch. The Bill’s administration fact sheet says:

“The Approval Authority will take into account the chain of command’s recommendation, overall manning levels of the Service and the individual’s trade, and any specific skills held by the Service person.”

Presumably that means those from OPPs are automatically ruled out.

While I am not expecting the Government to accept the amendment, I hope that the Minister will answer some questions that were not addressed on Second Reading. Will there be clear limits on the number or percentage of those working part time in any specific regiment? How would that look in the RAF and the Navy? Would the percentages be universal or different for each service? If somebody applies for part-time working after that limit has been met, will they automatically be rejected? Will personnel from OPPs not be given the option to apply for part-time working, or will they be allowed to apply but, because of their trade, have no chance of being accepted?

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

It is a pleasure to serve under your chairmanship, Ms Dorries. I want to expand on some of those issues.

As my hon. Friend said, this is a probing amendment, but it goes to the heart of the entire Bill and how it will be implemented in practice. Will the 15% limit operate in the same way across the three services, and how will it work within each individual service? Let us take trades, for example. We all know that fast jet pilots are quite a small pool of individuals. If someone from that pool wanted to work part time, that would obviously have an adverse effect on the capability of that frontline unit. Likewise, if 15% of a ship’s crew suddenly decided to apply for part-time working, on what basis would a decision be arrived at in terms of operational effectiveness? As my hon. Friend said, there are certain niches or pinch points within the Army, with trades that are in scarce supply because of recruitment problems. What limit would be put on the number of those individuals who could apply for part-time working?

I would like to get an understanding from the Minister of how this proposal will work across the various ranks. There is a big difference, for example, between a private and a general applying for part-time working. We can envisage a situation where a senior officer in all three services wanted to go part time. One aim that General Carter has put forward for the legislation is to encourage opportunities for more family-friendly working practices, and obviously there is the aim of encouraging women not only to join the armed forces, but to advance up the career path. I would therefore like to know from the Minister what the rules are. Will there be uniform rules across the ranks for how individuals, and what percentage of individuals, would be covered?

Having read the Bill, I am not sure whether this issue is covered. Clearly, the ultimate decision is about the operational effectiveness of our armed forces. We could not have a situation in which, even if there was a 15% upper limit, we took out an entire capability that was needed by our armed forces.

I would be interested to know, through the probing amendment tabled by my hon. Friend, what the appeals mechanism is. One issue in the armed forces is women not advancing up the pay spine or rankings because of breaks in service and other situations, so what would be the appeal mechanism? If someone felt that they were being unfairly denied part-time working, what would be the process? If it relates to a female member of the armed forces, is that not opening us up, potentially, to a claim of discrimination against that individual if she feels that that is the reason why she has been denied part-time working?

[Mr Ellwood]

First, it is a pleasure to be here. I am very grateful that the Bill has reached Committee and, from looking around the room, it is clear that there are many committed right hon. and hon. Members who want the best for our armed forces. I am pleased that the Bill has reached this stage and that we can scrutinise what I hope will be an important stepping-stone in our support for our armed services.

In the wider debate on the clause, I will expand on the virtues and benefits of the Bill, but specifically on the amendment, questions were raised about recruitment and retention. We concede that this is a difficult climate in which to recruit and retain personnel. That is why we have put forward the armed forces people programme, of which there are four distinct parts. This Bill on the flexible working programme, which we are debating here today, forms one part of that. We need to advance, to modernise. We need to reflect society and ensure that we can recruit from that gene pool—the voluntary force out there—and make the armed forces attractive in a modern-day context. That means providing an element of flexibility in the work that we expect them to do.

The Armed Forces Pay Review Body was touched on. We will probably look at this matter in further detail under a later amendment. Now, I will simply say that the freeze—the pay cap—has been removed. Absolutely, there may be a requirement for an increase in salaries for specific trades where there is a shortfall, and we need to attract people and fill posts. That is beyond the scope of the Bill and this debate, but it sits in the wider context of ensuring that we are doing our best to attract and retain people for the most professional armed forces in the world.

I was asked whether this provision applies across the three services. It does. However, the word “regiment” would not necessarily apply in all contexts of the armed forces. It is important to remember the requirement in respect of operational capability. The example was given of an individual seeking to apply for flexible working while on board a ship. The hon. Member for North Durham will be aware that they will be attached to a posting for a period—possibly nine months—and they will make an application for the future. They would hope, perhaps, to be able to remain in a geographic location or to have the freedom to work part-time or reduced hours once they got off the ship. Ultimately, operational capability is of first and foremost importance, and it must not be affected at all by any aspect of the Bill.

[Mr Kevan Jones]

The Minister is right that a person on a ship would be applying for the future, but what would be the decision-making process when putting together a crew for a ship? What percentage of the crew would be allowed to work part time?

[Mr Ellwood]

When we look at countries that already have this process, figures like 15% simply are not applicable. Australia has, I believe, up to 1% or 2% of its personnel interested in pursuing this. Ultimately, it is about the operational capability of any ship and the force on board. Any commander or authority has the ability to deny any individual application because of that. Should an individual still feel that they require this kind of working because of their personal circumstances, there will be an appeals process. We will come on to that under a later amendment.

We have the mechanisms in place to recall service personnel. I want to make that clear. Even if permission was given for an individual not to be on a particular ship, they could be recalled because of operational capability if the situation demanded it. That is the agreement under which this entire offering is being made.

These measures have been designed by the services for the services. This is the Army, Air Force and Navy looking at their own protocols and personnel situations, and seeing how they can manage situations like the one on the ship that was described by the hon. Member for North Durham. It makes sense, therefore, to leave many of the judgments on the details to the services themselves. They own the responsibility to deliver operational duty and capability in order to recruit and fulfil their tasks.

In our view, the arbitrary limit of 15% in the amendment was put forward with good intentions, but would inevitably prove unhelpful. I am pleased that it was clear from what the hon. Member for Merthyr Tydfil and Rhymney said that it is a probing amendment. We must allow the services to retain the flexibility and agility to manage their manpower as they see fit.

[Mr Kevan Jones]

The Minister says that this proposal comes from the services. How far down the chain of command is there buy-in on this? If anyone in the Navy is asked about their next posting, they will always say, “Put the two at the top that you don’t want and you’ll get the one that you want third.” Will there be a cultural shift so that this is not just something that is recognised by the senior heads in the Ministry of Defence, but something that has buy-in from the people actually making the decisions about where people go?

[Mr Ellwood]

As I say, this has been designed by the armed forces themselves. A series of surveys has been put forward. I refer the hon. Gentleman to the opening speech given by the then Secretary of State on Second Reading, which made clear the length and depth to which the Ministry of Defence has gone to ensure that there is buy-in and approval not just among service personnel, but from their families and partners who are directly affected by this. There is absolute support for this and I hope that the hon. Gentleman will agree, particularly with his experience, that it would not be wise to go ahead with it if the chiefs did not agree, if the commanders did not agree and if the armed forces personnel themselves were not calling for it.

Looking at the surveys, one reason why individuals make the tough decision to sign off and leave the armed forces is the stress and strain that it places on their families. That is why we have said, “Let’s adapt, let’s reflect on what society is doing and on what happens in civilian areas.” That is why I believe that it makes sense to persevere with this idea. I assure the hon. Gentleman that it has support across the board.

As I suggested, we envisage a modest take-up of between 0.5% and 1% of all service personnel. The take-up rate is highly unlikely to exceed 15%, but of course it would be wrong to place a cap or arbitrary limit on it. Following the assurances that I have provided, I hope that the hon. Member for Merthyr Tydfil and Rhymney will agree to withdraw the amendment.

--- Later in debate ---

I hope the Minister and the Department will look carefully at current recruitment methods and practices with a critical eye and accept the amendment to see how new working practices impact on how we recruit into the armed forces. If he will not accept it, perhaps the Government will be willing to add some other kind of monitoring element to the Bill. If so, I look forward to him updating the Committee about that.

[Mr Kevan Jones]

The Minister has spoken about these new working practices, which I support and which are designed to make the armed forces more attractive to individuals. I can clearly see that people already in the armed forces may well take some of these on board as their lives change—with changing family commitments, for example. Has the Ministry of Defence considered offering part-time posts as part of recruitment?

The main thrust of the amendment is toward those already in the armed services, but would it allow the Ministry of Defence or the three armed services to advertise a role as part-time? People might say that that goes against the ethos of what we want from the armed forces, but I could see a situation in which someone who has previously served in the armed forces wants to come back once their circumstances change—certainly, if we are to try to attract more women back into roles—and they may want a specific role in the armed forces that is not full time. Will the Bill allow that, and has the Minister considered advertising certain posts as part-time? He has already talked about pinch-point trades, and some of those that are geographically restricted in certain areas could offer part-time work as part of a recruitment exercise to fill some of those posts.

[Mr Ellwood]

There has been helpful discussion on this clause, and I welcome the tone adopted by both hon. Gentlemen. We discussed the excellent report by my right hon. Friend the Member for Rayleigh and Wickford on the armed forces. It is called “Filling the Ranks”, and I recommend it to all right hon. and hon. Members. I am pleased that we have accepted all the recommendations. It is a sober consideration of the challenges that we face in our armed forces today, and part of the work that we are doing—including in this Bill—is about moving on from that.

We want to widen opportunities for those in the armed forces, and it could be that instead of working part time, somebody may wish to leave the armed forces all together. I remember from before I left regular service—I do not know whether others who have served felt this as well—that as soon as someone put their hand up and said that they were going to depart, they were given different types of jobs and treated slightly differently, simply because there was perhaps a question mark about their commitment that should not have been there. We now have a process of leave well and then rejoin well, because it could be that after a period in civilian life, someone might fancy going back again, and they need to be able to do that. People should not leave under any cloud, and the service should be welcoming so that somebody can come back in.

The importance of diversity was mentioned on Second Reading, and I agree. We want to recruit the very best from across the country—men and women from different ethnic backgrounds and geographical locations. There should be no inhibitors for anybody wishing to serve.

The contract with Capita was also raised, and there have been some issues and concerns about that. Again, we must advance and modernise to reflect the modern needs of our armed forces personnel.

The idea of the part-time post was raised. I will take that away with me as it is certainly worth considering. We must bear in mind that some of those posts already exist for reservists, and it will be for the services who are designing the arrangements to ensure that operational capability is not threatened in any way. It would, however, be silly not to consider any of the freedoms and opportunities that could be set up underneath that, and I welcome the input from the hon. Member for North Durham.

The amendment seeks to place an obligation on the Ministry of Defence to commission an independent report on the effects of new forms of flexible working on recruitment to the armed forces. The new flexible working measures are designed to attract, recruit and retain people from a more diverse cross-section of society. We stress that we need the knowledge, skills and experience to deliver that operational capability, and we believe that these measures will benefit a small but significant cohort who wish to take up this offer—for example, women and men starting a family, those with caring commitments, or those who wish to undertake long-term studies. However, evidence gathered by our external report, the internal surveys, the focus groups and our ongoing flexible duties trial shows we are providing our people with modern choices, which will help us retain highly skilled personnel who might otherwise leave—a concern that has already been expressed in this Committee.

This evidence already provides us with detailed assessment of the benefits of the new forms of flexible working. The MOD is experiencing many of the same skills and recruitment challenges that are being faced nationally, so to meet those challenges as proactively as possible, we are modernising the employment offer for our armed forces to better allow defence to attract and retain the right mix of people and skills. As I mentioned earlier, those are being managed collectively under our armed forces people programme, which comprises projects including the new joiner offer and the enterprise approach. The latter is about taking people with civilian skills—for example, working for Rolls-Royce or Babcock—and bringing them straight across to work in the defence environment.

The Committee will be aware that the intake in strength by rank, trade and specialisation is monitored and managed on a regular basis at both the service level and centrally by the MOD. The MOD already publishes detailed information analysis on intake in the “UK armed forces monthly service personnel statistics” publication—a long title. The overall numbers taking up the new opportunities are likely to be low, as I have mentioned before. This will mean that any detailed evaluation, external or otherwise, of the impact of the new flexible working measures on overall recruitment in the armed forces will be difficult to achieve in the early years of operation. Furthermore, evidence gathering already conducted by the armed forces of the benefits and impact that the new forms of flexible working will have on our people is of greater value than an evaluation from an independent contractor. The obligation proposed in the amendment will be unnecessarily costly, will delay the introduction of the new measures and their benefits for our people, and will add little value to what defence is already trying to achieve. With those assurances, I hope the hon. Member for Merthyr Tydfil and Rhymney will agree to withdraw this amendment.

--- Later in debate ---

[Gerald Jones]

I thank my hon. Friend for that intervention. She has highlighted one of the many concerns that we have around the work of the contracts, or the way that the contract is not working for families in our armed forces.

Last year’s National Audit Office report on service family accommodation was damning of Carillion’s performance:

“The performance of CarillionAmey has been totally unacceptable”.

Although I welcome the action that has been taken, the Government had the option to terminate the contract, yet they did not, which leaves me with some concerns about how seriously the matter is being taken. I appreciate that there have been some improvements, but reports have shown that continued dissatisfaction with the delivery of the contract is still widespread. For those in service family accommodation, satisfaction with the quality of maintenance/repair and with response to requests for maintenance/repair fell to just 28%, which is very alarming indeed.

Of course, this is all in the context of many personnel seeing increased costs for their accommodation and ongoing pay restraint. The pay review body commented on that in its latest report:

“A key consideration in people accepting the increases in charges being seen…will be a clear improvement in both the overall quality of the housing stock and the effective delivery of maintenance services.”

I would like to hear whether the Department has any specific plans to take action to improve performance and at what point we might see that happen.

Recruitment and retention issues are at the heart of the Bill, and housing is a crucial factor in that. I hope the Minister can give me some assurance and answer my questions about how the new working practices will impact on housing allocation, what the latest progress with the future accommodation model is and how the Government will deal with housing contracts if marked improvements are not shown.

[Mr Kevan Jones]

I would like to get an understanding of how the housing of someone who works part time will be dealt with. Housing has always been seen as part of the overall remuneration package that armed forces personnel get. We will potentially have a situation where someone who works part time lives in a house next door to someone working full time, with both getting the same housing package. If someone goes part time, will there be a way to recoup some of the advantage, or will they continue as if they are working full time? I can see that creating some issues, where people working full time and people working part time are getting the same benefits. How will the Ministry of Defence address that? There could be an issue of perceived fairness for the individual working full time and the idea that someone is getting benefits that they are not working for. I would like to know how the Minister thinks that would be addressed when this is rolled out.

[Mr Ellwood]

We have wandered into another huge chunk of the armed forces people programme. It is pertinent to the Bill, but it is so important that it sits alone as one of the four major pillars of improvement we are trying to make to recruit and retain armed forces personnel.

The future accommodation model has been mentioned. It will be coming round the corner very soon in more detail. It is still very much being planned, so I am not able to share too much detail, but it is helpful to hear the concerns, which we are very much alive to.

--- Later in debate ---

[Mr Ellwood]

I know that the hon. Lady has spent a lot of time looking at these issues, and I am grateful for her input. She has done well to finesse those concerns into the Bill. She knows that that is a separate but very important subject. I hear what she says.

CarillionAmey was mentioned. That concerned the previous Secretary of State, and the company was called in to ensure that improvements were made to meet the KPIs. The contract comes up for renewal in 2020. That does not stop us making sure we provide the best accommodation we can for our armed forces personnel. We should recognise that what people choose and expect today is very different from 15 or 20 years ago, when a room this size would have been full of 20 beds. Now people expect individual accommodation, wireless networks and decent cooking facilities, and that is what we are providing, not least as we build new premises and new accommodation, with the returning of our armed forces from Germany.

The hon. Member for Merthyr Tydfil and Rhymney seeks to place an obligation on the MOD to commission an independent report evaluating the impact of new forms of flexible working on armed forces housing contracts. The Government have already provided assurances during the passage of the Bill that regular service personnel, when taking part-time work, will retain those entitlements currently available to full-time regulars. There will be no change there. Providing our people with service accommodation is pivotal for their work. We must ensure that their families have that guarantee and that support, particularly if circumstances change and they need to be called back at short notice.

Regular service personnel who successfully apply to undertake the new forms of flexible working following the introduction of these measures will be entitled to service accommodation commensurate with their personnel status category and other qualifying criteria, in the same way as their full-time colleagues. Individuals will take up these new arrangements for a defined period only and will retain an enduring liability for mobility. They will still be subject to the same moves associated with new assignments as others in the regular armed forces.

[Mr Kevan Jones]

It is common sense that no one will suddenly be turfed out of accommodation, but can the Minister not see that tensions might rise if someone working part time is living long term next door to someone working full time? He said “as long as that contract continues”, but what happens if the person is still part time and is redeployed somewhere else for new accommodation? Will they have the same access to housing or will that change in some way?

[Mr Ellwood]

I understand where the question comes from; it is a detailed, specific point, but it needs to be considered. They will be treated in the same manner as anybody else in the unit that they are with if there is an ORBAT change or movement. It will also be down to the arrangements made when the application is put forward in the first place. If a unit is moving from one location to another, that needs to be factored into the decision. Someone might look over their shoulder and have a view about that, but that same person might request a period of absence or a change in their circumstances to move to part time at a later date. I hope the fuller explanation that we give to our armed forces personnel as these measures are rolled out will clarify that and ensure that there are not those feelings that the hon. Gentleman has mentioned.

Support for service families was a recurring theme on Second Reading. The Bill is at the heart of the work we are doing to support our people. I reaffirm that enhanced flexible working options are about providing opportunities for our people who want to work more flexibly and not about disadvantaging them or their families by limiting access to support and entitlements. I have said before that only a small yet significant number of personnel will undertake flexible working and that the longer-term impact of these new options will be difficult to assess in the early years of implementation. For those reasons, the impact on service accommodation contracts is likely to be minimal—I do not see a huge change there—and challenging to assess, particularly in the light of the fact that there are no plans for the entitlements to be altered, and an independent evaluation is therefore deemed unnecessary.

The Ministry of Defence recognises that the current system for accommodation can be unaffordable and inflexible, and that it does not support personnel to live in the way that many of them want to today. We are reforming the accommodation model so that all regular personnel can receive support to live how they want to. We recognise the need to offer accommodation that meets their needs and expectations today and in the future. The hon. Member for Merthyr Tydfil and Rhymney asked about the future accommodation model, which is due to be introduced in 2019 as part of the defence people programme. We are exploring options for a more flexible accommodation offer to give service personnel more choice in how they live.

[Mr Kevan Jones]

May I suggest that the Minister delve into the bowels of the Ministry of Defence? There was a plan there in 2010 that is clearly gathering dust, but it addresses quite a lot of the issues that he has raised.

[Mr Ellwood]

I shall certainly go back to the bowels of the MOD and see whether I can find anything that the hon. Gentleman has left behind.

Extensive work is being done to consider a wide range of options, from widening entitlement based on the current model of service-provided accommodation to helping service personnel to meet their aspirations for home ownership. We hope to be able to say more about that at the end of the year. Eligibility under the future accommodation model will not be altered for personnel who work part time or who are subject to geographical restriction when the new measures come into force. I hope that makes it clear to the Committee that there will be no change. I hope that hon. Members are reassured by what I have said and that the hon. Gentleman will withdraw the amendment.

--- Later in debate ---

[Carol Monaghan]

I think we are probably coming from the same point of view. It is difficult to know the impact if we do not monitor it. The impact of every change we make has to be monitored. However, given the Minister’s assurances, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

[Mr Kevan Jones]

I just have a question. Clause 3(5) states:

“Section 1 and this section extend to—

(a) England and Wales, Scotland and Northern Ireland,

(b) the Isle of Man, and

(c) the British overseas territories, except Gibraltar.”

I wonder what the issue is with Gibraltar.

[Mr Ellwood]

The hon. Gentleman poses an important question. There is a technical reason for this. It is simply because, as has come slightly mysteriously and miraculously to my attention, we have been liaising with the Gibraltarian Government about whether any provision of the Armed Forces Act 2006, with which he will be familiar, should be part of the new law of Gibraltar. They have undertaken to introduce their own legislation in the near future to effect this. I did know that, but a little piece of paper arrived to remind me of it. I am grateful for his question.

Question put and agreed to.

Clause 3 accordingly ordered to stand part of the Bill.

New Clause 1

Protection of existing flexible working options

“(1) Nothing in this Act shall affect the ability of persons serving with a regular force to avail themselves of the flexible working options provided for in Chapter 1 of Joint Service Publication 750 (centrally determined terms of service).

(2) If the flexible working options in subsection (1) are withdrawn, the Secretary of State must make similar provision through regulations.

(3) Regulations under subsection (2) may not be made unless a draft has been laid before, and approved by a resolution of, each House of Parliament.”—(Gerald Jones.)

This new clause preserves current flexible working practices for the Armed Forces.

Brought up, and read the First time.

Armed Forces Pay

Kevan Jones Excerpts

Wednesday 1st November 2017 Commons Chamber

[Nia Griffith]

I agree that pay is not the only factor that makes it difficult to recruit and retain staff, but it is certainly a significant one when both AFCAS and the pay review body list it as such.

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

I find the comments of Conservative Members quite astonishing, because I remember as a Defence Minister being harangued by Conservative Members in opposition arguing that we did a bad deal for the armed forces, even though we accepted the pay review body’s recommendation. With regard to the X factor, in 2013 the pay review body chairman was sacked because the Prime Minister at the time, David Cameron, did not want to recommend an increase in the X factor.

[Nia Griffith]

My hon. Friend refers to an absolutely shocking situation. It is very disappointing that Conservative Members are starting this debate on such a negative note.

More and more personnel are choosing to leave the armed forces, and every one of the services is shrinking in size. A recent Government-commissioned report by the right hon. Member for Rayleigh and Wickford (Mr Francois) found that recruitment to the services was “running to stand still”, leading to the “hollowing out” of our armed forces. Yet rather than getting to grips with this problem, the Conservatives’ record is a litany of missed targets and broken promises. Their 2015 manifesto pledged to keep the size of the Army above 82,000. That was hardly an ambitious target, considering it was well over 100,000 when Labour left government, but miss the target they did, and the trade-trained strength of the Army is now just 77,600.

The figure of 82,000 had mysteriously disappeared by the time of the Conservatives’ 2017 manifesto. That fateful document simply promised to

“maintain the overall size of the armed forces”.

We can add that pledge to the rubbish pile along with the rest of the Tory manifesto, because since June’s election we have seen a reduction in the size of the Army, a reduction in the size of the Royal Navy and Royal Marines, and a reduction in the size of the Royal Air Force. Now we are in the shameful position where the Defence Secretary cannot rule out cuts to our Royal Marines, or even promise that the Army will not shrink further.

The Government may be complacent about the diminishing size of our armed forces, but we are not. At a time of immense global uncertainty—

--- Later in debate ---

[Nia Griffith]

Indeed, the number needs to go up, because costs are escalating. We have said clearly that we would match that increase, but I have to tell the hon. Gentleman that costs are escalating far higher than that figure will accommodate.

At this time of immense global uncertainty, we cannot allow numbers to continue to slide, month after month, while all we get from the Government is warm words and crippling complacency. The Government’s chosen recruitment partner, Capita, is completely unfit for the job at hand. We have had warning after warning that Capita has not fulfilled its basic obligations, but as the number of personnel recruited continues to fall, the amount paid to Capita has grown and grown.

We propose to take real action to begin to address that state of affairs, by lifting the public sector pay cap and giving our forces a fair pay rise. I recognise that that alone would not be a silver bullet for the crisis in recruitment and retention, but we know from personnel that pay is one of the main reasons why they choose to leave our armed forces. Satisfaction with basic rates of pay and pension benefits is at the lowest level ever recorded. The Armed Forces Pay Review Body has found that there is an

“over-riding sense of uncertainty and an increasing view that the offer will only get worse”.

Barely a third of service personnel are satisfied with their basic pay, and 42% have said that pay was a push factor for them in choosing to leave the forces. Is that any wonder, when our servicemen and women have had to shoulder real-terms pay cuts that have left them badly worse off? Between 2010 and 2016, the starting salary of a corporal fell by nearly £2,000 in real terms, whereas for a flight lieutenant that figure was £2,800.

At the same time as they have been hit by real-terms pay cuts, our servicemen and women have faced rising costs in forces housing because changes to charges for service family accommodation mean rent increases for nearly three quarters of occupants. The Government’s future accommodation model risks adding to that pressure because it fractures forces communities by forcing service families into the private rented sector, with all the additional costs that that brings to them and the taxpayer. The Armed Forces Pay Review Body has warned of a “perfect storm” for personnel who face increases in rent and national insurance contributions, at the same time as their pay is cut in real terms.

Let us be in no doubt that the responsibility for the below-inflation rises lies firmly with the Government. Since the Government lost their majority at the general election, Ministers have made great play of the supposed independence of the Armed Forces Pay Review Body. They would have us believe that the pay review body sets the rates and Ministers merely implement them, as if it were some coincidence that the body had not recommended an above-inflation rise since 2010. But that is little more than a cynical attempt by Ministers to shirk responsibility, because of course they instruct the pay review body to work within the context of the cap. Despite all the warm words from the Secretary of State and Ministers, the Treasury has said that it will not fund increases above and beyond the 1% cap; that is a fact.

[Mr Kevan Jones]

Does my hon. Friend agree that the situation is worse than that? The idea is that the pay review body should be independent and able to make recommendations for Ministers and the Government to look at, but in 2013 the then Prime Minister sacked Alasdair Smith, the chair of the pay review body, because he made recommendations that the Treasury and the Government did not like. Does she agree that that is outrageous?

[Nia Griffith]

As my hon. Friend says, that is absolutely outrageous, and it betrays an appalling attitude on the part of the Government.

--- Later in debate ---

[Mark Lancaster]

I will move on in a moment to that very question. I would add that many of us also sat through Prime Minister’s questions, and I would simply refer the hon. Lady to the very powerful argument that the Prime Minister made in response to the question from my right hon. Friend the Member for Rayleigh and Wickford (Mr Francois) on the very subject she has raised.

The second point this motion ignores is the impact of pay progression. Officers and other ranks are tied to incremental pay scales, and they routinely and regularly move up the bands. The hon. Member for Llanelli (Nia Griffith) talked about privates. The average private soldier starts on a salary of £18,673. After one year, through incremental pay alone—not including the 1% pay increase—that rises to £20,029, which is an increase of 7.26% in one year. After three years, the salary rises to £21,614, which is an increase of 15.8%, not including the 3% increase that would have been given. That is an increase in pay of almost 20% over the three years.

[Mr Kevan Jones]

I think that the hon. Gentleman is being completely disingenuous—

[Mr Speaker]

Order. No, the hon. Gentleman must not use that word. He is a person of felicitous phrase and extensive vocabulary, and he must find some other way to express his irascibility with or disapproval of the Minister.

[Mr Jones]

The Minister is wrong. The point is that, in any job, people get a pay increase because they are being trained and their ability to serve increases as that goes on. The fact is that the yearly increases my hon. Friend the Member for Llanelli (Nia Griffith) mentioned affect a private’s pay because they affect the levels of the bands and the percentages. He cannot argue that, just because somebody gets pay progression, not giving them an increase in their basic pay every year will not affect their ultimate pay. Of course it will.

[Mark Lancaster]

I am slightly worried about the hon. Gentleman’s approach. We have actually been great friends in this House for many years, so I am somewhat surprised that he called me disingenuous. I am sure that I will get my revenge at some point. As somebody who continues, after 29 years, to serve in the armed forces, I would like to think that accusing me of all people of being disingenuous when it comes to the armed forces is slightly unfair. I like to think that I have done my bit.

At the end of the day, I do not think that a private soldier receiving £18,673 in their pocket on day one—admittedly before tax—and then receiving £21,614 after three years will care too much whether that is due to pay progression or annual increases; it is money in their pockets.

--- Later in debate ---

[Conor McGinn (St Helens North) (Lab)]

rose—

[Mr Kevan Jones]

It’s less.

[Mark Lancaster]

Here we go: the hon. Gentleman says—perhaps this is testimony to Labour mathematics—that £21,614 is less than £18,673. [Interruption.]

--- Later in debate ---

[Mark Lancaster]

I am a very agreeable chap, but this is yet more speculation from The Times. No decision at all has been made to scrap the operational allowance. Every year since the operational allowance was introduced 12 years ago, there has been a review of where it should and should not apply. Soldiers have not been told that they will not receive it when they go to Iraq. I am deeply proud that this Government have doubled the operational allowance from £14 to £29. Finally—to get the last word, for the time being at least, with the hon. Member for North Durham (Mr Jones)—none of those figures takes into account the substantial rise in the personal tax allowance introduced while this Government have been in power.

[Mr Kevan Jones]

Will the Minister give way?

[Mark Lancaster]

I will not give way at the moment—I am taking my revenge—but I am sure he will get another chance.

Despite fiscal constraint, salaries in the armed forces throughout this period have not stagnated. Indeed, they have actually risen on average by 1.5%. What is more, the MOD has the option of introducing targeted payments where there are particular recruiting and retention issues. These payments can range from time-limited financial incentives through to longer-term recruitment and retention payments that recognise the particular challenges we face in retaining certain specialisms, such as military pilots or submariners.

That brings me to the third aspect of the pay story, which has been conveniently glossed over. Joining our forces comes with a range of often unacknowledged additional benefits: a non-contributory pension scheme, subsidised accommodation and food, access to free medical and dental care, and allowances packages—I have just mentioned one of them—towards additional costs. It is therefore unsurprising that pay is neither the primary reason why people enter the service, nor the primary reason why they leave.

--- Later in debate ---

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

The Government are nothing if not consistent, as Conservative Governments have been throughout history, in that in opposition they call for more expenditure on the armed forces and argue that they are proud supporters of the armed forces, but when they get into power the first thing they do is cut the defence budget and show no respect for the men and women of the armed forces in terms of their pay and conditions. We have heard some remarkable things today. Conservative Back Benchers—including the hon. Member for Plymouth, Moor View (Johnny Mercer), who must have quite a few members of the armed forces in his constituency—have been suggesting that pay is not important. Well, I am sure that will be news to those members of the armed forces, when they get that message.

[Johnny Mercer]

The hon. Gentleman knows full well that what I was trying to say—and what I did say—was that pay was not the No. 1 issue for service. It would be disingenuous to suggest that it was. There are a number of reasons why people serve, and a great experience is on offer to the people of this country who serve. Pay is important, but it is not as important as this debate suggests.

[Mr Jones]

I find that remarkable. The hon. Gentleman is letting down his constituents by not supporting what we are arguing for, which is a fair deal on pay for members of our armed forces. If I were in his shoes, I would be making sure that I did.

The last Labour Government, during which I served in the Ministry of Defence, had a proud record of accepting the recommendations of the pay review body every single year. For example, the increase was 3.7% in 2001 and 2002 and 3.2% in 2003, and that goes right up to 2010, when the increase was 2%. However, this Government have put in an artificial cap, completely ignoring the pay review body, and it was remarkable to hear the Minister say that that does not matter because people are receiving increments. I am sorry—this may be the trade union official in me coming out here—but where someone starts affects where they end up. A 2% incremental increase may mean an increase in pay, but a 2% increase on the basic level of pay is a damn sight bigger, and we need to recognise that.

Something else that cannot be forgotten is this idea that armed forces pensions are, as I think someone said, gold plated and generous. However, people do not recognise that that is taken into account by the pay review body. I also want to remind the Conservatives that if I had sacked armed forces personnel or made them compulsorily redundant weeks away from their retirement date when I was in charge, I would have been rightly condemned. That is just another example of a Conservative Government saying one thing, but doing another. Making people compulsorily redundant is astounding.

As for the independence of the pay review body, it is clear that the Government have completely ignored its recommendation, but things are even worse than that. The previous Prime Minister David Cameron sacked the head of independent pay review body in 2013 because he did not like what it said about the X factor and pay increases. The Government have not just ignored the pay review body; they have interfered in the independent process. Conservative Members may say that pay is not important, but I am yet to meet anyone in life who does not think that getting a decent reward for their efforts is important to them.

Alongside that, we have seen declining morale. One of the Conservative Government’s betrayals is that they say, “We stand up for the armed forces.” Well, the armed forces stood at 191,710 personnel in 2010, but that is now down to 149,366. The situation is worse than that, however, because there are artificial caps on numbers in the individual services, including the Navy, which is leading to real deployability problems. Ships are not sailing because they do not have the crews. As I said, the Conservatives say that they stand up for the armed forces, but if they genuinely want to do that, they should pay people accordingly and recognise the efforts and sacrifices that individuals make on our behalf. Empty words are fine, but actions in government are different. I am proud that the Labour party—not just in the last Labour Government, but throughout its history—has always stood up for our armed forces by supporting personnel and by ensuring that our country is defended.

[Robert Courts (Witney) (Con)]

That last Labour Government, for which the hon. Gentleman presumably has some responsibility, left a £38 billion black hole in the defence budget. By contrast, this Government are increasing defence spending. Does he accept that he has some responsibility for that and that the Conservatives stand up for the armed forces?

[Mr Jones]

I thought the Cameron Kool-Aid had been dispensed with. That figure was plucked out of thin air. I recommend that the hon. Gentleman look at the 2010 National Audit Office report that says that there would be a £6 billion so-called black hole over the next 10 years. The Conservatives dishonestly tried to give the impression that there was a £38 billion black hole to be met in 2010. Both the right hon. Member for North Somerset (Dr Fox) and the right hon. Member for Runnymede and Weybridge (Mr Hammond), his successor as Defence Secretary and now Chancellor, miraculously got rid of that black hole within 18 months and said that it had been plugged—do not ask me how they did it. If they could get rid of a £38 billion black hole in less than 18 months, they are in the wrong job. That was complete nonsense. The hon. Member for Witney (Robert Courts) should stop repeating things that are just not true. I give the Conservatives credit for their great job of changing the narrative at the time, but the actual facts are different.

[Robert Courts]

Will the hon. Gentleman give way?

[Mr Jones]

No, because I am about to finish. I suggest that the hon. Gentleman looks at the black hole that exists in the current Government’s procurement plan. I am not suggesting that it is an in-year black hole; this is about the 10-year equipment plan. The hon. Gentleman may want to look at that, the NAO report and the excellent report out today on how the Government are cannibalising equipment. Please look at the details.

I will finish with a non-partisan point. Everyone across the House recognises the dedication and service of the members of our armed forces, and they deserve that recognition. In just over a week’s time, we will remember those who made the ultimate sacrifice, and there is a consensus across the House of support for our armed forces, but if we are to support and recognise the sacrifices they make, they need to be paid and resourced at an acceptable level.

--- Later in debate ---

[Ruth Smeeth (Stoke-on-Trent North) (Lab)]

I begin by paying tribute to hon. Members on both sides of the House for their contributions to this debate. They have spoken with insight and conviction about the importance of ensuring fair pay for our armed forces personnel, not just as a point of principle but as an essential guarantee for our future recruitment and retention across all three services, which in turn ensures that we will have the right people in the right place and in the right numbers to keep us safe.

We speak here today because our armed forces and their families make daily sacrifices to protect us, so it is only right and proper that we do our duty and look after them. I am therefore delighted that today’s motion, tabled by the Leader of the Opposition and my hon. Friend the Member for Llanelli (Nia Griffith), directly mirrors an early-day motion I tabled earlier this year on the need for enhanced salary levels for our armed forces personnel.

I am privileged to chair the all-party parliamentary group on the armed forces covenant, and it is because of that role that I wish to contribute today. At a time when we and our allies face renewed threats from a resurgent Russian Federation, when the global order is facing unprecedented realignment and when we see global terror attacks on the news bulletins on a weekly basis, not least the horrendous scenes in Manhattan last night, we find ourselves with a Government who seem to be missing the point. It is our service personnel who keep us safe, and we need to ensure that their overall terms and conditions are good enough to recruit and retain in post.

Let us be clear about the current challenge. As other hon. Members have said, we find ourselves facing a personnel deficit of 5%, with stories of declining morale and faltering recruitment targets, and with no fewer than 38 operational pinch points across the three services—gaps that threaten to have a detrimental impact on our planned and contingent operations. We need to ask ourselves, why?

We expect our armed forces personnel to do the extraordinary every day. It is challenging and, all too often, life-threatening work. We ask them to make incredible sacrifices and to cope with intense physical, mental and emotional challenges in the line of duty. From engineers to infantry soldiers, bomb disposal experts to intelligence officers, logisticians to caterers, and pilots to submariners, all our armed forces personnel, at whatever grade and in whatever role, are exceptionally skilled and dedicated men and women.

Our armed forces personnel do not do the job for the money, and we should be in no doubt that people of their calibre may well be able to earn more in other fields, but they do need to pay their bills, as we all do. They deserve recognition, including financial recognition, for their service. It is unacceptable that anyone who makes sacrifices to keep us all safe should struggle to support their family. As chair of the all-party group, servicemen and women and, as importantly, their families tell me that they are struggling. The House needs to recognise that we have a problem when they are earning less in real terms than they were seven years ago.

The pay cap has meant real hardship for many in service, and it is undoubtedly one obstacle to recruitment and, more so, to retention. Not only that, the pay cap is symbolic of how much—or should I say how little?—the men and women of our armed forces mean to the country they serve. The cap’s removal would be symbolic, too.

I welcome that the Government are now back-pedalling on the continuation of the 1% pay cap for armed forces personnel. Their recognition that the men and women of our armed forces deserve better than they have been subjected to for these past seven years can only be welcomed by Members on both sides of the House, but I am sure I speak for many when I ask the Minister, what took so long?

My fear, however, is not just the pay cap, which many others have raised today. We need to look at the terms and conditions of our service personnel in the round. Too many servicemen and women have contacted me with concerns about potential cuts to their tour allowances and bonuses for me not to be worried that the Government are planning to rob Peter to pay Paul to fund pay rises. This may all prove to be smoke and mirrors, and our proud servicemen and women might end up no better off next year because they lose the X factor, the tour bonuses from Iraq or other things.

[Mr Kevan Jones]

Does my hon. Friend agree that the pay cut over the past seven years will have an ongoing effect throughout these individuals’ lives, as it will affect their final pension?

[Ruth Smeeth]

I could not agree more with my hon. Friend. Let us be clear about realities: where someone’s base salary is not increased, their pension, which is based on that salary, is also affected. So this affects everybody.

That brings me on to my next point. No trade union can advocate for our armed forces and no staff association can stand up to the Government for them. It is therefore down to us in this House to ensure that they are well paid and to fight their corner, because no one else is going to do it for them. They follow orders—that is what we pay them to do and train them to do. Therefore, they are never going to challenge us. So while they do their duty protecting our national security, at home and abroad, we must do our duty and look after them and their families. Next week, we have Remembrance Sunday and although our servicemen and women do not consider themselves heroes, we should. Heroes do not want handouts—they just want a fair deal. It is the very least they deserve.

--- Later in debate ---

[Leo Docherty (Aldershot) (Con)]

I am pleased to be able to speak in this debate. First and foremost, it is important that the discussion is based in fact. On that note, we must recognise that a 1% increase to armed forces pay was recommended in January this year—

[Mr Kevan Jones]

This year, not last year.

[Leo Docherty]

In 2017. The Government accepted that recommendation. They declared that they were moving away from a blanket 1% cap on public sector pay, and we anticipate that the Armed Forces Pay Review Body will make suggestions that the Government will accept. We must bear in mind that good news when we discuss this issue.

[Mr Kevan Jones]

I am sorry, but what the hon. Gentleman is saying is just wrong. Over the past six years, the Government have completely ignored the pay review body. I do not know where he gets the idea—I must have missed this—that the Government are going to accept its future recommendations, because I am not aware of such an announcement.

[Leo Docherty]

If the hon. Gentleman had been paying attention back in September, he would have noticed that the Government indicated that there will be a move away from a blanket 1% public sector pay cap. If the pay review board makes a recommendation to the Government about increasing pay, it is likely that the Government will accept it, so it is entirely erroneous to paint a picture of armed forces pay being cut.

We must recognise that, broadly, the offer to the armed forces is good. In addition to increases in basic salary, armed forces personnel enjoy subsidised housing and non-contributory pensions. That is important and we must recognise it. There are of course concerns, and we must be vigilant in safeguarding and improving the experiences of our armed forces personnel, but the offer is good. I hear from people in my constituency concerns that are more related to kit and equipment, and to opportunities for training and deployment.

The issue of pay should not be a political football to be kicked around by Opposition Members. There is a good story to tell and we should be positive about the broad offer that the armed forces present to people. Sadly, the Opposition are talking it down; to demonstrate how, I shall quote the Leader of the Opposition, the right hon. Member for Islington North (Jeremy Corbyn).

--- Later in debate ---

[Alex Chalk]

That is exactly the kind of sophistication that should be brought to this debate. We should be looking at specific issues, that can improve the lives of serving soldiers, sailors and airmen and women.

The principles that we should apply are tolerably simple. First, we should listen to independent experts—the pay review bodies—and, secondly, we should build in flexibility where there is a skills shortage. I will return to that briefly in a moment. It is right, as my right hon. Friend the Prime Minister indicated in Prime Minister’s questions today, to look at the context of the public finances. She said that we are spending £50 billion a year on debt interest alone. That raises a really important moral argument. When we talk about the future of our armed forces, we do not just want armed forces for today, tomorrow or next week; we want our children to be able to enjoy the protection of the armed forces as well.

What is Labour’s suggested solution to this? Notwithstanding the fact that we have public borrowing of about £58 billion each year and a national debt of £1.7 trillion, its remedy is more borrowing, more debt and more tax. Where does that leave us as a country? If we were to borrow an additional £500 billion, as has been suggested, our national debt would go from £1.7 trillion to £2.2 trillion. What happens to that £50 billion that we are spending each year? It goes to about £65 billion. Basically, before we pay for a single soldier, a single police officer, or a single nurse, we will be spending £62 billion a year when the entire defence budget is £36 billion. There will be people born today in our country who in 30 years’ time, through no fault of their own, will either knock on the door of the welfare state because, as an entirely deserving case, they need assistance, or they will want the protection of our armed forces, but the cupboard risks being bare if the Opposition are able to achieve what they want to achieve.

[Mr Kevan Jones]

I thought that the Tory party’s script had changed; obviously the hon. Gentleman does not have the new one. Will he explain, therefore—

[Alex Chalk]

rose—

[Mr Kevan Jones]

He needs to sit down.

[Alex Chalk]

I was chomping at the bit.

[Mr Kevan Jones]

The Government were able to find £1 billion out of fresh air to pass over in their agreement with the Democratic Unionist party in Northern Ireland so that they could stay in power, so why can they not fund the pay of our armed forces?

[Alex Chalk]

With respect, that argument has been made with tedious regularity. It betrays a complete lack of understanding of the public finances. This country borrows £58 billion every single year. The nation spends £803 billion a year. Yet, Labour wants to borrow £500 billion, which in turn would increase our annual payment by something in the order of £12 billion. That would be monstrous and disastrous for the UK economy and future generations. There is an issue of generational justice, and that is a message that Labour has not learned.

--- Later in debate ---

[Johnny Mercer (Plymouth, Moor View) (Con)]

Thank you for squeezing me in, Madam Deputy Speaker. I was not going to speak today but I felt compelled to come to the Chamber and give my two pence-worth. I very much enjoyed the contribution of the hon. Member for North Durham (Mr Jones), but it would be remiss of me not to point out how narrowly he danced on the line between delusion and fiction. He was veterans Minister in 2008-09, when I was fighting those campaigns. This is not about me or about anybody’s personal service; this is about truth and fact, and the fact is that the equipment with which we fought those campaigns and the care for veterans were simply appalling. I cannot stand here and allow Opposition Members to say that Labour’s record on defence is so—

[Mr Kevan Jones]

rose—

[Johnny Mercer]

No, I will not give way at this moment.

I cannot say that the Labour party’s record on defence is so superior to the Conservative party’s.

[Mr Kevan Jones]

On a point of order, Madam Deputy Speaker. Is it in order for one Member to accuse another Member of something that is not true and then not allow that Member to respond to it?

[Madam Deputy Speaker (Dame Rosie Winterton)]

I am sure the hon. Member for Plymouth, Moor View (Johnny Mercer) will feel that if he has referred to another hon. Member in that way, he might like to take an intervention.

[Johnny Mercer]

Am I alleged to have said something that is not true? What have I said that is not true?

[Mr Kevan Jones]

I am not going to get into a discussion. What is not true is what the hon. Gentleman just said about cutting support for veterans.

[Johnny Mercer]

I didn’t say that.

[Madam Deputy Speaker]

Order. Can we not have conversation across the Chamber? This is an intervention and the hon. Member for Plymouth, Moor View will then respond to it.

[Mr Jones]

I was proud to introduce the Army Recovery Capability, which made sure we supported the armed forces coming back from Afghanistan and Iraq with severe injuries. I was proud to be a part of a Labour Government who introduced the Armed Forces (Pensions and Compensation) Act 2004, which for the first time brought in lump sum payments for those severely injured. The track record of our Administration on support for veterans will stand up to any scrutiny in comparison with what the Conservative Government have done since.

[Johnny Mercer]

It may be worth the hon. Gentleman putting that debate on our offer to our veterans and service personnel to the court of public opinion. The time between 2003 and 2015 saw the biggest explosion of military charities this country has ever seen because of the lack of provision that he presided over. It would be a good thing to put that into the public domain and to see whether his argument bears out the facts.

It is important that this debate is grounded in fact. This should not be a partisan issue. We should not be talking about what Labour did or what the Conservative Government did. There are areas—[Interruption.] I have to talk about it, because of the fiction coming from the Opposition. We need to work harder on some serious elements of defence—mental health, veterans’ care, what we want our armed forces to stand for, and, crucially, what we do not want from our armed forces as we move forward to the period post-Brexit—but we must ground this debate in credibility and reality.

Yes, when it comes to pay everybody would like to be paid more. I could not find a single serviceman or woman in the UK armed forces today who would not like more money, but it would be disingenuous in the extreme if I were to stand here and say that that is the single blanket issue that drives down recruitment and reduces our ability to retain skilled men and women, or to say that a career in the armed forces is not worth it or completely constrained by appalling terms and conditions. That is not the case.

I want to address what is one of the most frustrating things about this place. We have a world-class military. Of all the things I can be accused of, of which there are many, being a Government lackey on defence is not one of them. If Members look at my record on the Iraq Historic Allegations Team and defence spending, or have a brief conversation with the Minister for the Armed Forces, who recoils at the very mention of my name, they will know that I am not a defence lackey. On our capability, yes, we had more ships in the Falklands and more tanks and so on, but in the Falklands a lot of the guns and the ships did not work. The Type 26 frigate is one of the world’s most capable combat ships. Members can shake their heads and say, “Well, it doesn’t employ millions of people and the steel did not come from exactly where I wanted it to,” but we have a world-class military. It is therefore extremely disingenuous to the people of this country to constantly use this as a political football between the Labour party and the Conservative party over who is doing better on defence. We have deep challenges, but I gently suggest that pay is not one of them.

--- Later in debate ---

[Mr Ellwood]

I will not give way to the hon. Gentleman. He tests the patience of the House in rising to his feet after denying my hon. Friend the Minister for the Armed Forces I do not know how many times the opportunity to intervene.

The Opposition spokesperson, the hon. Member for Llanelli (Nia Griffith), talked about the importance of Remembrance Day, which was also highlighted by other hon. Members, and about the importance of pay itself. She also talked about the role of the Armed Forces Pay Review Body, whose recommendations will, I understand, come through in March.

The hon. Member for Glasgow South (Stewart Malcolm McDonald) used the debate as an opportunity mostly to promote his views on Trident, which are not shared across the House. Indeed, this nation would become a lot weaker if we were to get rid of Trident. That would not be in anybody’s interest.

My right hon. Friend the Member for Rayleigh and Wickford produced a report highlighting some of the challenges we face, and I fully agree with him that we need to work on improving diversity. It is important that we attract the brightest and the best, and that includes recruitment moving up to 15% by 2020 for women, and up to 10% for BAME—black, Asian and minority ethnic. I am grateful to him for the work he did on that important report.

The hon. Member for North Durham (Mr Jones) talked about the black hole in defence finances. We came into government recognising that £38 billion was seemingly missing, because it had been stolen from future budgets, but let us take a step back.

[Mr Kevan Jones]

Will the Minister give way?

[Mr Ellwood]

In a second. When we came into government, we found a black hole in the nation’s finances, with £150 billion missing. Although the Labour Government managed to balance the books back in 2000, in every single year thereafter they spent more and more money that they did not have, but which belonged to the taxpayer. That is why we ended up with the deficit and the recession—they were taking money that did not exist.

[Mr Jones]

I am sorry that the Cameron Kool-Aid is now being handed round again in the Conservative party. I ask the Minister to look at the facts—

[Mr Ellwood]

rose—

[Mr Jones]

Look at the National Audit Office report of 2010. What it said on the equipment budget, not the overall budget, was that on its current basis the figure would be £6 billion. If there was no increase in line with inflation over a 10-year period, the figure would be £36 billion, not £38 billion—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. First, if the Minister takes the intervention both Members cannot be on their feet and he cannot suddenly say, “I don’t want to hear any more of it.” In fairness, if he gives way he needs to let the intervention get to the end. If I think the intervention is too long, let me take that decision. Let us not have both Members on their feet.

[Mr Ellwood]

Thank you, Mr Deputy Speaker. I make it clear that the facts are very clear. Look at any—

[Mr Jones]

On a point of order, Mr Deputy Speaker—

[Mr Deputy Speaker]

Look what you’ve done now. You’ve got a point of order: Kevan Jones.

[Mr Jones]

I am sorry—

[Mr Deputy Speaker]

Hang on. The Minister has been here long enough; you know you have got to sit down. Please, let us follow the rules of engagement. As ex-Army personnel, you are very good at that. Kevan Jones.

[Mr Jones]

It is a serious point of order. The right hon. Gentleman gave way to me, and then he stood up when I had not finished. But the serious point is that what he is saying is not true—not the facts—and as a Minister, he should not be actually saying that.

[Mr Deputy Speaker]

Whoa! Nobody would mislead the House with an untruth.

[Mr Deputy Speaker]

Sir Mike Penning, thank you. Your knighthood goes before us. [Interruption.] Order. Now, we know that that is not the parliamentary way. I am sure the hon. Member for North Durham (Mr Jones) does not mean it in the sense in which it was given.

[Mr Jones]

Further to that point of order, Mr Deputy Speaker. All I am saying is that accurate information must be given. If the Minister looks at the NAO report from 2010, he will see the actual figure, instead of the bluster which he keeps—

[Mr Deputy Speaker]

Okay. I will accept “accuracy” but not “truth”. Minister.

National Shipbuilding Strategy

Kevan Jones Excerpts

Wednesday 6th September 2017 Commons Chamber

[Sir Michael Fallon]

The revival of naval shipbuilding, particularly in the English yards, will produce huge opportunities for apprentices to embark on highly valued skilled engineering careers. Indeed, in Scotland—I turn again to the opportunity here for Scotland—when I was at the Govan frigate factory on the Clyde, cutting steel on HMS Glasgow, I was able to point out to the workforce that the apprentices who will be working on the eighth of these eight frigates are yet to be born. That is the nature of our long-term commitment to the Clyde and, I hope, of our long-term commitment to our other, English yards.

My hon. Friend makes an important point about the delivery of this programme. Too many programmes in the past have ended up over budget and over time, leaving critical gaps. By setting a fixed price for these ships and putting in place a delivery organisation that will ensure that there will be penalties, we are determined this time that we will drive the procurement and delivery of these ships at pace.

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

As chair of the all-party group on shipbuilding, I welcome these orders for the UK shipbuilding industry, but may I ask the Secretary of State about two fundamental points? First, on military capability, will the Type 31 add to our defence capability? Will it be able to fulfil our full NATO maritime standing commitments? So far little has been said about its anti-submarine or war-fighting capabilities. Secondly, the last successful set of exports was in the early 1960s, with the Rothesay class of frigates. Is it realistic to underpin a strategy entirely on exports, particularly when the French and Italians have similar types of ships not only on the drawing board, but in the marketplace?

[Sir Michael Fallon]

First, in respect of the performance of standing tasks within NATO, I made it clear that they will principally be undertaken by the Type 26 anti-submarine frigates and Type 45 destroyers, releasing the Type 31s for other duties around the world where we need to project our presence and where we can work more closely with allies outside the NATO context.

On exports, I hope that the hon. Gentleman will not be as pessimistic as he appears to be about our prospects. There is growing international demand for lighter ships and ships that are adaptable for all kinds of constabulary work around the different coastal regions. I have every confidence that we can produce a ship that will outperform what can be produced by the Italian or French yards but, in the end, it is for British industry to rise to this challenge and produce a ship that is cost-effective and can compete in the world market.

Counter-Daesh Update

Kevan Jones Excerpts

Thursday 13th July 2017 Commons Chamber

[Sir Michael Fallon]

Absolutely. The answer to that is an unequivocal yes. It is now so important that the city administrations and the governorates get engaged in the process of political reconciliation. My Foreign Office colleagues and I continue to urge that on the Abadi Government as an absolute precondition for the kind of reconciliation that we want to see.

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

I welcome the liberation of Mosul and pay tribute to members of our armed forces who have been involved. The tactics used by Daesh mean that the cost to both the infrastructure and the people of Mosul has been great. Will the Secretary of State outline what strategy Iraq could take to rebuild the infrastructure of Mosul and to allow the return of those refugees who have fled Mosul over the past few years?

[Sir Michael Fallon]

An encouraging number of dispossessed Maslawis—people of Mosul—are returning to east Mosul. They are returning in quite large numbers now, and markets and schools are beginning to reopen. West Mosul has of course been much more badly damaged than east Mosul and a huge amount of reconstruction has to be done there. That will be led by the United Nations Development Programme and its co-ordinator, but we will be playing our part financially and in the organisation of the rebuilding programme.

Oral Answers to Questions

Kevan Jones Excerpts

Monday 13th March 2017 Commons Chamber

[Mike Penning]

We will look carefully at this as the new ships come on stream and as we spend £63 billion on the Royal Navy in the next few years. We will ensure that Devonport gets a very good look-in.

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

I am not sure whether the Minister mentioned this, but one of the Royal Navy’s key roles is to meet NATO commitments to protect not just this country but our allies. In that context, will he say whether the new Type 31 frigate will actually be able to meet those NATO commitments?

[Mike Penning]

I am sure that, when the Type 23 frigate comes in, it certainly will—[Interruption.] Type 31; I apologise. We have extensive NATO commitments around the world: HMS Ocean is just returning from six months in the Gulf and will be in Gibraltar soon; and HMS Daring is down off the strait of Hormuz. As for HMS Dragon, I was woken in the early hours because one of our civilian yachts was in distress with a crew of 14, some of whom were injured, and that Type 45 sailed 500 miles to rescue them. That is exactly what our Navy is for.

National Shipbuilding Strategy

Kevan Jones Excerpts

Wednesday 8th February 2017 Westminster Hall

[Douglas Chapman (Dunfermline and West Fife) (SNP)]

I beg to move,

That this House has considered the National Shipbuilding Strategy.

It is a pleasure to serve under your chairmanship, Mr Evans. I stand before you with the sense that we have been here before, and indeed we have. It is déjà vu on a grand scale, because at Defence questions, during Westminster Hall debates, in answers to urgent questions and in ministerial statements, the Government have had the chance to put at rest the minds of the various parties interested in the shipbuilding strategy. Yet again, we find ourselves hoping that the Minister will give us something more than the usual scorn sometimes reserved for SNP Members.

Any time I tire of waiting for answers, I simply remind myself that many people have been waiting much longer, whether they be the men and women who serve us in the Royal Navy or those in the yards on the Clyde and at Rosyth. That is not to mention the average taxpayer, who demands nothing more from the Government than that their money is well spent on equipment that actually works and the assurance that the Government are doing their utmost to fulfil their most basic duty—defending our homeland.

In 2021, it will be two decades since HMS St Albans slipped from Yarrows on the Clyde and became the last-of-class Type 23 frigate, meaning that the state that has always prided itself on being a maritime power will not have built a single frigate for the best part of 20 years. Furthermore, as the first-of-class Type 23, HMS Norfolk, left that same shipyard in 1990, it found that the mission for which it had been specifically designed had all but ended. It is quite incredible that in 2017, we are still unable to see a signed contract to begin the replacement of the Type 23s, which are a cold war platform. No one I have spoken to through my work on the Select Committee on Defence, whether fellow members, academics, shipbuilders, trade unionists or even civil servants, sees that as an acceptable way forward, yet here we are.

Its cold war mission may have ended, but the Type 23 has certainly done all that was asked of it, and more. Let us not forget that the range of tasks the Royal Navy has undertaken in the post-cold war era has dramatically increased, yet paradoxically, as the senior service’s task list is increasing, the number of frigates and destroyers available to it has sunk to an historic low. It is that paradox that I hope the Minister will help me with today. Although the Ministry of Defence has long been able to exploit the convoluted and confusing history of the Type 26s and Type 31s, there is no way to hide its failings. I will make it easy for the Government by posing three straightforward questions that I hope they will take in good faith and respond to appropriately.

First, and most simply, when will we see the national shipbuilding strategy? Secondly, the MOD has made much of 2017 being the year of the Navy, but 2023 is a much more appropriate choice, as that is when the MOD completes the purchase of 24 F-35B planes to fly from the carriers, and when HMS Queen Elizabeth becomes fully operational. Will the Minister reassure us that the Royal Navy will be able to form a fully functioning carrier group with Type 26s, Type 45s and the requisite Royal Fleet Auxiliary Service ships? Thirdly, on a related note, various media outlets have reported in recent days on the bandwidth problems in the procurement budget, which were highlighted in a National Audit Office report. So far as the equipment plan is concerned, how will the shipbuilding strategy ensure that surface naval ships are prioritised in procurement decisions?

When the Government committed to the national shipbuilding strategy as part of the 2015 strategic defence and security review, many of us thought we were reaching the end of a long journey with respect to the modernisation of the Royal Navy. How wrong we were. Early studies of what in 1994 was called the “future surface combatant” certainly thought outside the box. A whole range of options were considered, including a radical trimaran hull design. After a decade, the FSC had become the “sustained surface combatant capability”, which had as many as three designs. It was not a concept that would survive the financial crash. Indeed, by 2009, it was possible for my friend the right hon. Member for New Forest East (Dr Lewis), who chairs the Defence Committee, to call for a future surface combatant that was as “cheap as chips”. How did we get from as “cheap as chips” to building £1 billion frigates in less than a decade?

I contend that the blame lies squarely at the door of the MOD. One thing has become clear from the numerous conversations I have had with both management and unions at BAE Systems: it is a global company with a world-class workforce that is able to turn its hand to whatever design and specification is provided by the MOD. Up to this point, it has done that. Quite simply, the MOD’s unerring ability to change horses midstream has added to the cost, timescales and uncertainty of the ongoing naval procurement programme.

That continued after the shipbuilding strategy announcement in 2015. The initial reassurances we were given were replaced with disquiet last spring, when no contract for the Type 26s was signed. When The Guardian broke the story in April about potential job losses at the Clyde yards, there was a crushing realisation that, yes, it had happened again. Any hope that a refreshed team in the main building over the summer would lead to clarity on the Type 26 or the shipbuilding strategy did not last long. When the Minister repeatedly assured us in the Chamber that we would see a strategy by the autumn statement, we knew she was using alternative facts. When my colleagues and I on the Defence Committee released a report that concluded

“it is now time for the MoD to deliver on its promises”,

I imagine we already knew that it had no intention of doing so—although I am interested to know if that report played any part in delaying the strategy, or if Ministers simply chose not to tell Parliament of their intentions.

It was not entirely clear, when Sir John Parker’s independent report was announced, whether informing Parliament was part of the original strategy. When the report was finalised, we thought that it would be the formal strategy going forward. There is plenty to agree with in Sir John’s report. Many of its findings chime with my experiences of MOD procurement, namely that there was a

“vicious cycle of fewer and much more expensive ships being ordered late and entering service years later than first planned”,

and:

“The Government must drive cultural and governance changes in Defence that inject genuine pace into the procurement process with a clear grip over requirements, cost and time.”

However, we are now getting to a stage at which the report, far from being too little, too late, is too much, much too late. It will once more allow Ministers to take us around the houses and hope that we forget that they are running out of time to fulfil previous promises made to the House, the Royal Navy and the men and women on the Clyde.

While there is

“no precedent for building two ‘first of class’ RN frigates in one location in the UK”,

there appears to be no real alternative to the Clyde, as I am sure we will hear from my hon. Friend the Member for Glasgow South West (Chris Stephens). Let us get on with signing the Type 26 contract and ensure that the Type 31 is ready to go as soon as possible.

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

Can the hon. Gentleman shed any light on what the Type 31 is? There have been generalised views of what it will do and what it will be, but I understand that there are no plans and no actual specification. Is the Type 31 not one of those pipedreams that seems to be put out there to reassure the industry, when actually there is a lot of work to be done not only to design it, but to find out where it fits into the broader naval strategy?

[Douglas Chapman]

The hon. Gentleman makes a good point. We are constantly told that the Type 31s are also for the export market. I have asked parliamentary questions on whether the Government could provide details of their homework on what that export market might look like. I am afraid that, to date, there are no answers. We need to make progress with the information we have, which is why we are questioning the Minister today.

Anyone who has taken an interest in this matter will know that BAE Systems has two possible designs. It is important that we get on with picking one, so that we can ensure—to follow up on the hon. Gentleman’s point —that we have an exportable product that we can take to market. However, we are falling behind. The Franco-Italian Aquitaine class frigates are already in service with La Royale and have been exported to Egypt and Morocco, so we are already missing the export boat with regard to the Type 31s.

--- Later in debate ---

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

It is a pleasure to serve under your chairmanship, Mr Evans. I congratulate the hon. Member for Dunfermline and West Fife (Douglas Chapman) on securing this very important debate. He raises some very interesting points. Certainly I have been trying to get answers to them through parliamentary questions, but we are getting the usual stonewalling from the Ministry of Defence, which has become a habit in recent times.

The important thing is to ask this question: what is the status of Sir John Parker’s report? It was announced in the 2016 Budget, which stated:

“The government has appointed Sir John Parker to lead the national ship building strategy, which was confirmed in the Strategic Defence and Security Review 2015.”

It also stated that the report would be published in the autumn of 2016, which in MOD-speak means anytime between December and the following June. The press release stated that it was a Treasury-led, not a MOD-led review. That is important. It was announced by the right hon. Member for Tatton (Mr Osborne) when he visited Portsmouth naval base.

The report was published, strangely, not as a Government report but as Sir John Parker’s own report. The jungle drums in the MOD tell me that there was a bit of concern about whether the Secretary of State would put his name to this report, and he decided not to. That has left the report in limbo in terms of what influence and status it will have in the forward thinking about not only our naval shipbuilding strategy, but our wider industrial strategy.

I am also concerned about how this matter fits into broader defence industrial strategy. I asked the Minister on 12 January when we would publish a defence industrial strategy, only to be told that there are no plans to publish a separate defence industrial strategy, but that the national shipbuilding strategy—Sir John Parker’s report—would be added into a broader cross-Government piece of work on industrial strategy. That is important because we have basically abandoned having a separate industrial policy and strategy in this country. That is important because of the jobs that are relied upon and the important capabilities that we need in this country. The Government seem to have just mashed that into the rest of wider industrial policy.

A basic question needs to be asked about shipbuilding: do we want sovereign capability to produce complex warships in this country—yes or no? It is a very simple question that the Government need to answer to give reassurance about the future of the jobs—which the hon. Member for Dunfermline and West Fife raised—and the technical expertise. The problem is that people look at a warship and think that the bulk of the cost and expertise has been met on the outside. It has not. The main value and technology in it are the skills that go into designing it and into systems integration. Our supply chain goes way beyond the Clyde—there is a national footprint of companies in leading-edge technologies. We need to ask whether we want those skills in this country or whether we will just buy from abroad.

When I was first involved in shipbuilding in the late 1980s, the then Government competed at different yards. We had Swan Hunter, Yarrows and Cammell Laird around the country and the Government used to compete contracts between them. At the end of the day, it was pork barrel politics as to who got the contract and that ultimately meant that Swan Hunter closed. Clearly, the strategy after that was to concentrate complex warship building in one yard. That made absolute sense. That one yard is on the Clyde, whether we like it or not. There is no other way of doing it.

The concern I have about Sir John Parker’s report—there are some points in it that I agree with—is that it is a bit naive. It has looked at building the carriers, which are on a huge scale in terms of block modular build, and then more or less said that we can start building Type 26s and others in a modular format. Well, I am sorry but I do not think we can—no disrespect to my hon. Friend the Member for Jarrow (Mr Hepburn). These ships are on a different scale. We need one yard to do the integration—the actual build. The idea that we are going to build them around the country to try to get some competition goes back to an argument we had in the late 1990s. I come back to the basic question of whether we actually want complex warship building in this country.

The issue is not just the capability. There is naivety among some people who think that they can order these ships like ordering their next car. They decide what colour they want, go to the showroom and say, “I will have a blue one and we will have a yellow one next year.” That is not how this happens. These are very complex warships and pieces of defence equipment. We need to retain not only the technological capability but the skill base in the yards and in industry, and we need a drumbeat of work going through to ensure that we do that. A classic example of when we got that wrong is when the Conservative Government in the 1990s took us out of submarine building. That led to all the problems we had trying to regenerate the capacity in Barrow for the Astute programme. Unless we keep that drumbeat going, we will get into a situation whereby we cannot rely on the fact that when we need a complex warship, there is one there to be delivered. We cannot turn these skills and capabilities on and off like a tap when they are needed.

[Carol Monaghan (Glasgow North West) (SNP)]

One of the real dangers is exactly what the hon. Gentleman describes. As the yards in Glasgow await the commencement of the Type 26 project, engineers—highly skilled workers who can work in many different fields—will not wait around forever.

[Mr Jones]

The hon. Lady makes a very good point. The issue is not just about generating the skills in the first place—the key investment that companies need to make in apprenticeships and other things. This is now an international market. There are perhaps engineers working on the Clyde who, if there is no work, will move elsewhere in the world. In some cases, they will not come back to the industry. We found that with the Astute programme; nuclear engineers left and trying to get them back, or regenerating those skills and expertise, was very difficult.

[Martin Docherty-Hughes]

The hon. Gentleman is making an excellent point. Critically, the Canadian suppliers were actually in Glasgow the other week looking for such people to take to north America.

[Mr Jones]

Again, the hon. Gentleman makes a very good point. This is an international market and these skills are very sought after. This comes back to my point that if we want this capability in the UK, we have to nurture and protect it and the only way to do that is by having a throughput of work.

The hon. Member for Dunfermline and West Fife raised the issue of the Type 26. The delay is adding to that uncertainty. The wider piece really concerns me. To give the impression that we are going to have that drumbeat of work, we have had the Type 31 inserted into the programme. I have studied in detail to try to find out what the Type 31 actually is; no one has been able to tell me yet. It is a bit like the mythical unicorn—everybody thinks it exists, but no one has ever seen one. If the MOD can say that there is a budget line for it, it should please identify that—in the current procurement there is no budget line for it at all in the programme.

[Chris Stephens (Glasgow South West) (SNP)]

Was the hon. Gentleman concerned, as I was, to read in an article in The Daily Telegraph a suggestion from a Ministry of Defence source that there is no budget for Type 31s and that they might not even happen?

[Mr Jones]

As people know, I am a bit of an anorak on this subject and I actually study the MOD accounts, but I still cannot find where this budget line is. Another point that has never been answered is what this ship will actually be used for. I am not sure where it fits into any naval strategy. Will it be able to meet, for example, Britain’s NATO capabilities? Will it have capability to fulfil those roles? If it has not got the air defence capability, it will not. The other thing that people have completely missed is that this is about not just building the ship, but running it afterwards. We all know that there is a crisis in recruitment and manpower in the Royal Navy. Again, where is the budget line for not only building but running this generation of ships?

The hon. Member for Dunfermline and West Fife makes a very important point. The Government say that the great thing about the ships is that they are exportable; I am sorry, but we are bit behind the game on this. He rightly identifies at least two other nations that have product out there.

There is another point about strategy. This is about not only skills but the defence of our country, because if we have the gap between the Type 23s going out and the Type 26s coming in, there will also be a gap in the nation’s capability. I understand that there is an ongoing extension programme for some Type 23s, but we need clarity, because if there is a gap, we will not be able to protect the carrier groups or some of our other capabilities.

That leads me to the wider piece about the Government’s strategy in this area. The Prime Minister argues that she is batting for Britain and that Britain is the key market, but we have a situation in which the Ministry of Defence, obviously leant on heavily by the Treasury, is happy to have multimillion-pound contracts with the United States—the Apache and P-8 contracts, to name just two—with no commitment whatever that proportionate workshare will come back to the UK economy. I asked the Minister a written question about the Apaches, and I think Boeing said that 5% of the programme’s value will come back into our supply chain. That point is important not just for the number of jobs, but to keep the capability that we need in this country. I cannot imagine for one minute the United States doing something similar, even before President Trump took office, and things will get even worse now. Exporting highly paid jobs and capability from this country is inexcusable. I do not want to see the same thing happening in shipbuilding, so that we will perhaps just buy ships off the shelf from the United States or anywhere else.

A few weeks ago I asked the Minister in a parliamentary question what she was doing to monitor whether Boeing, for example, would put enough jobs into the economy. She fudged the answer, saying, “We don’t monitor this area.” I am sorry, but that is inexcusable. What really irritates me is that if a British company sold a piece of defence kit to the United States of America, there is no way that we would not have to give guarantees about workshare and jobs in the United States. My fear is that without joined-up thinking on shipbuilding, if we are not careful, a time will come when the Treasury says, “Isn’t it cheaper just to buy these from abroad—from the United States or somewhere else?” We would then lose not only the sovereign capability that is so important to this country, but the skill base and jobs that come with that.

I come to my final point. It is about time that the Ministry of Defence fessed up that it has a huge problem, which is only partly of the MOD’s making, because this is actually a Treasury issue. The National Audit Office report is clear about the procurement budget. The Ministry of Defence is falling into an old habit—as a former Minister in the Ministry of Defence, I know this is easy to do—of just pushing the budget sideways, which is what has happened with the defence budget. However, there are other pressures on the day-to-day in-service budgets. Ships are being laid up, for example, because the cash is not available to run in-service services. In addition, there is a huge black hole—it was highlighted in the NAO report—that the MOD has to deal with. We are not talking about separate money; it will have to find £8 billion over the next 10 years for the defence estate. All that falls within the defence budget, so if does not come out of one place, it will come out of another.

The Government need to be honest about where they are with the equipment budget. The Opposition got lectures from the incoming coalition Government about how frugal they would be, in terms of ensuring that they did not over-commit on defence, but they are clearly doing that now. The shipbuilding strategy needs to be published soon. If we are going to answer yes to the question, “Do we want a sovereign capability for shipbuilding in this country?”, we will have to put the money behind it and ensure that the work is of a nature that allows the industry to develop its skills and retain that capability.

--- Later in debate ---

[Steven Paterson]

Yes, I think that is a concern that many of us have—that the priorities identified in the risk assessment done for the document I have quoted are not being followed in Government spending. Perhaps that is why there has been delay after delay in the project.

[Mr Kevan Jones]

Does the hon. Gentleman also recognise that the Dreadnought programme is putting money into the Scottish economy? A success story in that regard is that Babcock is doing the missile tubes at Rosyth.

[Steven Paterson]

If we are going to take the SDSR process seriously and look at the assessment of what we need for the defence of the country, we must deal with tier 1 threats first—that is why they are tier 1 threats. Clearly, if we are to meet the threats identified, the shipbuilding programme is essential.

As my hon. Friend the Member for Glasgow South West (Chris Stephens) noted, the Government promised that 13 Type 26 frigates would be built on the Clyde, then revised that substantially, to eight, with five multi-purpose frigates. At paragraph 90 of its report on the 2% level of spending by the Government, the Defence Committee correctly identifies the risk to the Type 31 programme:

“Should...the ‘concept study’ to investigate the potential for a new class of lighter, flexible general purpose frigate be unsuccessful, we wish to be informed at the earliest opportunity of the MoD’s contingency plans to deliver the extra ships to satisfy the total originally promised.”

The Government’s response to those concerns merely indicates a willingness to keep the Committee informed. We are looking for some more concrete answers from the Minister today. Furthermore, we still await confirmation that the frigates will be built on the Clyde. Should that not occur, it will be a betrayal of the Clyde workers, as my hon. Friend said. They would be entitled to feel betrayed; it would threaten the yards’ capacity to deliver complex warships in the future and would undermine the UK’s ability to meet the challenges identified in its own national security strategy and the SDSR.

My second concern is that the shipbuilding strategy will not be affordable. I am concerned that there will be further backtracking on the commitments. It is fine to have a strategy, with many large new procurement projects, but if there is no money to actualise the strategy, what is the point in the exercise? According to the National Audit Office’s report “The Equipment Plan 2016 to 2026”—which the hon. Member for North Durham (Mr Jones), among others, has already alluded to—the price of the plan has ballooned by 20%, to £82 billion, in a single year. That means that the Department has allocated all headroom previously set aside in the plan, removing all the flexibility to accommodate additional capability requirements. That is why we need reassurance today.

Given that the Type 26 project started at a projected cost of £343 million per hull, according to the 2015 major projects report, and is now £1 billion per hull, according to oral evidence to the Defence Committee, the MOD does not have, and never has had, a proven track record of acquiring big-ticket items on time and on budget. Rather than dealing with those pressures in the past, it has pushed the programmes further down the list and allowed service dates to slip, exactly as has been described today.

[Mr Jones]

Does the hon. Gentleman agree that there is added pressure on the defence budget because of Brexit, in terms of the value of the dollar, which is made worse when we procure large-ticket items from the United States?

[Steven Paterson]

The hon. Gentleman must have read my mind, because I am coming on to say that point 18 of the NAO report summary states:

“Changes in foreign exchange rates, such as those that happened after the EU referendum, can pose a significant risk to the Plan’s affordability in the future. As at 10 January 2017, the pound was 21.4% below the exchange rate with the US dollar and 4.2% below the exchange rate for the euro used in the Department’s planning assumptions. Approximately £18.6 billion of the Plan is denominated in US dollars and £2.6 billion in euros over 10 years.”

That will have a major impact.

I understand that the Department has a certain amount of protection against foreign exchange rates in arranging its finances, but does it not worry the Minister that such a large amount of the plan is predicated on foreign exchange rates, with the Government appearing to be gambling that the rate will not go up further? Given the Government position that economists cannot be trusted, which is what many current Ministers said during the recent referendum—and going by even a cursory look at the financial predictions before Brexit—can we really have any confidence that the envisaged programme can be afforded? That is why we need reassurance today.

The shipbuilding strategy is long overdue and, given the current state of the Department’s books, it is badly needed to provide clarity for those working in shipbuilding and those monitoring our national defence readiness going forward.

--- Later in debate ---

[Harriett Baldwin]

I thank the hon. Gentleman for an obviously irresistible invitation. I hope I will be able to take him up on it in the not-so-distant future. For the record, I say to the hon. Member for Jarrow (Mr Hepburn) that I am in Newcastle tomorrow. I look forward to meeting a range of manufacturers. I will not specifically be meeting A&P Tyne on this occasion, but I met A&P in Falmouth only last week.

In the SDSR we announced our plans for a naval programme of investment. We are investing in two new aircraft carriers, which are currently being completed at Rosyth. We are investing in new submarines to be based in Scotland at Faslane. We have announced our plans for frigates. We are building five new offshore patrol vessels on the Clyde at the moment. We have ordered new aircraft, including the maritime patrol aircraft, the P-8, which will be based at Lossiemouth. Scotland is clearly doing well out of defence, and the UK is doing well in defence with Scotland, and 2017 is the start of a new era of maritime power, projecting the UK’s influence globally and delivering security at home. I do not have time in this debate to list all the different ships we have deployed across the world’s oceans.

I know the appetite of Members for publications. They will have all read the 2016 equipment plan, which we published last month. It laid out the plans in more detail and announced that the total amount that will be spent on the procurement and support of surface ships and submarines over the next decade amounts to some £63 billion. It is all part of the continued modernisation of the Royal Navy in the coming years, which will be underpinned by our national shipbuilding strategy. It is very much our intention that the strategy will be a radical, fundamental reappraisal of shipbuilding in the UK, with the aim of placing UK naval shipbuilding on a sustainable long-term footing. It will set the foundations for a modern, efficient and competitive sector, capable of meeting the country’s future defence and security needs.

[Mr Kevan Jones]

Can the Minister point out in the Budget where the budget line is for the Type 31?

[Harriett Baldwin]

The hon. Gentleman will have read the equipment plan. I do not have the exact quote here, but clearly we have a very ambitious equipment plan. We are expecting to spend some £63 billion on ships, support and submarines.

I want to convey to Sir John Parker the thanks of all Members who have spoken today for his excellent report. He is clearly a highly respected expert. Importantly, he has taken an independent approach to the report. He has had a high level of engagement with stakeholders. Members asked about his engagement. He has visited all key industry leaders and all the companies across the UK that design and build ships, including in Northern Ireland. He has visited small and medium-sized businesses in the supply chain. Industry stakeholders were engaged at all levels. He brought strong strategic direction and guidance to the work, for which we are immensely grateful. He also met trade bodies, trade unions, Ministers, civilian and military officials and, indeed, the hon. Members for Glasgow North West (Carol Monaghan) and for Glasgow South West (Chris Stephens). He has been thoroughly engaged with everyone.

I have not got much time left, so I will speak very briefly about exports, which a range of Members raised. The report makes an important recommendation about exports. We have already started that work, working closely with the Defence and Security Organisation in the Department for International Trade. Members can expect to hear more about that in the coming weeks and months.

The Type 26 programme is a key element of our investment plans. To meet our needs, we require eight to replace the eight anti-submarine-focused Type 23 frigates. Members will be aware that the Defence Secretary announced in November last year that, assuming successful completion of the negotiations, we expect to sign a contract for the first batch of the eight planned Type 26s and cut steel on the first ship this summer. That would give BAE Systems on the Clyde work until the early to mid-2030s. Commercial contract negotiations are intense and ongoing, so I cannot make any more information available to the House today. The investment will sustain shipbuilding skills at the shipyards on the Clyde and continue to provide opportunities in the wider supply chain around the UK. The ships will provide an anti-submarine warfare capability, which is essential for the protection of our nuclear deterrent. SNP Members had a bit of a political pop at me, but they would do well to remember what I have just said. Their two political obsessions—Scottish independence and ending our continuous at-sea nuclear deterrent—would be two of the worst things that could befall the Scottish shipbuilding industry.

Briefly on the Type 31e, Sir John recommended that a new class of lighter general purpose frigate should be given priority. He was clear that it should be designed to be exportable, but capable of incorporating the needs of the Royal Navy. A lot of work is under way on that in the MOD. It is in the pre-concept phase, and further information will be made available in the national shipbuilding strategy.

In summary, the MOD is working with colleagues across Government and with industry to examine Sir John Parker’s report and its recommendations in full. I recognise that Members value the shipbuilding jobs in their constituencies, and I assure them that the Government are committed to an industrial strategy that will increase economic growth across the country and refresh our defence industrial policy.