Falkland Islands Defence Review
Lord Craig of Radley Excerpts(9 years, 8 months ago)
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Lord Astor of Hever
My Lords, I can assure the noble and gallant Lord that the destroyers and frigates are within a certain number of days’ sailing distance from the Falkland Islands—we are very insistent on that. I think he will agree with me that sometimes an invisible deterrent is as effective.
Lord Craig of Radley (CB)
My Lords, the Minister has made an important Statement, but it really says, “We’re continuing as we are, doing some routine maintenance” —which after 30 years is hardly surprising—“and we’re sending a couple of Chinooks there next year”. That seems to beg the question: why has this become an Oral Statement rather than just a Written Statement?
Lord Astor of Hever
My Lords, I understand that it became an Oral Statement because the Opposition asked for that.
Armed Forces (Service Complaints and Financial Assistance) Bill [HL]
Lord Craig of Radley Excerpts(9 years, 9 months ago)
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Lord Thomas of Gresford (LD)
My Lords, I speak as chairman of the Association of Military Court Advocates—I declare an interest; I am not expressing the view of that association.
I very much welcome the extension of the role of the ombudsman to considering the merits of a particular issue. I approach it from the point of view of the complainant and the complainant’s family, and the importance of the confidence of the public in the system of justice in the Armed Forces. From the point of view of recruitment and retention of service personnel, it is very necessary that those who undertake the burdens of service life should feel that they have a fair and just system of complaint. As I expressed when the Bill went through this House, the weakness of simply looking at process was that a decision on process would not be satisfactory to the complainant and their family. They would want an ombudsman to act like an ombudsman and to look at the merits of a particular case. I am grateful that the Government have moved in that direction.
Lord Craig of Radley (CB)
My Lords, following the Government’s defeats on this Bill in the other place, their initial reaction was to consider how best to reverse them when the Commons amendments were considered in your Lordships’ House. I shared that reaction. Not to reverse the defeats would be a further withdrawal from the position adopted by the Government and reaffirmed in correspondence that I had with the Minister of State, Anna Soubry, following the Bill’s consideration in this House. She wrote to me:
“The bill as it currently stands”—
that was before the defeats in the Commons—
“gets the balance right between having a strong and independent Ombudsman and preserving the PRIMACY of the chain of command. It is that balance that I wish to maintain”.
We now have this run of government amendments reflecting their new position. No doubt this change of heart within government has been brought about in part by the imminence of Dissolution, in part by the weakness of their position in this House on this matter, and in part by the acceptance by the Chiefs of Staff, albeit on the basis of shotgun pressure upon them, that the Bill as amended is the least bad of the possibilities likely to be available. However, is not that latter acceptance itself due in part to the character of Nicola Williams, the nominee for the new post of ombudsman, and the position that she has adopted of recognising the ethos and value of the chain of command? Whether she accepts, as Anna Soubry stated, the primacy of preserving the chain of command remains to be judged.
However, in due time, will her replacement be as savvy? We are legislating about principles, not personalities. I am also concerned to learn that the ombudsman’s office may be 20-plus strong, not all of them lawyers, as will be the ombudsman, and so probably less qualified to undertake systemic examinations of complaints handlings, let alone of actual complaint topics.
Moreover, there seems to be no presumption of improvement in the working of the chain of command over time in dealing with complaints—in fact, the opposite. The default presumption is that complaints will continue to be subject to systemic and irreversible maladministration, as bad as or even worse than it is today. Once again, it is the unspoken but damaging inference that civil authority does not believe that the military chain of command is ever really competent or trustworthy, or is ever really worthy of being upheld or supported. Such an attitude would concern me very greatly.
The Human Rights Act 1998 flew in the face of and upturned long-standing Armed Forces legislation. It removed the majority of the Armed Forces’ legal processes from the chain of command and was damaging to the sense of trust. For example, the convening and review of courts martial are no longer exercised by the chain of command.
The Human Rights Act and other, more recent, statutes affecting the position of the chain of command have served to chip away at and undermine the essential and irreplaceable value of trust and support up and down the chain of command. Although each individual change may seem not to be too damaging or serious, it is the cumulative impact of a number of statutes on the values of the chain of command that worries me and that must be considered. Such values are vital to the use of armed forces in peace or war and to success in operations.
Will the Minister give an undertaking that, as and when there are significant improvements in dealing with complaints by the chain of command, the size and scope of the ombudsman’s team will be reviewed? Otherwise, and given those improvements, there will surely be a temptation to avoid idle hands and deploy the efforts of the 20-plus in systemic work which might, on balance, prove to be inimical to and derogatory of the standing and desired primacy of the chain of command. I look to the Minister for that assurance.
Defence Budget
Lord Craig of Radley Excerpts(9 years, 9 months ago)
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Lord Astor of Hever
My Lords, I will take the noble Lord’s suggestion back to my department and it will pass it on, but we will meet the 2% target this year and next. Decisions on defence spending will then be made in the next spending review. However, the Prime Minister is clear that there will be an annual 1% real terms increase in spending on defence equipment. We are committed to ensuring that Britain’s Armed Forces remain among the most advanced and capable, able to protect our security interests across the globe.
Lord Craig of Radley (CB)
My Lords, the Minister mentioned the Government’s commitment to a 1% increase on equipment, but he did not make it clear whether this would be a 1% increase on the defence budget. Perhaps he could do that now.
Russia: Armed Forces
Lord Craig of Radley Excerpts(9 years, 10 months ago)
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Lord Craig of Radley (CB)
My Lords, what was the Russian ambassador’s response to the Foreign Office when it called him in to complain about the transit of a Russian bomber aircraft along the Channel?
Lord Astor of Hever
My Lords, the Russian ambassador committed to giving a full explanation in writing of that long-range bomber activity.
Armed Forces (Service Complaints and Financial Assistance) Bill [HL]
Lord Craig of Radley Excerpts(10 years, 5 months ago)
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Lord Boyce (CB)
My Lords, at Second Reading the Minister gave us reassuring words about the importance he attaches to the command chain, and that was good to hear. However, I believe that new Section 340K undermines this principle and could be seen to be violating the integrity of the command chain. I have particular difficulty with the argument that this power is necessary because ombudsmen in other organisations have it. The Armed Forces are different, and the Minister does not need reminding about the emphasis given to this in the Armed Forces covenant, especially because other organisations do not have an equivalent of the Armed Forces Act and its inherent disciplinary processes.
If the ombudsman detects obstruction, the Defence Council and the command chain on his or her instruction can issue an order to any person deemed to be obstructing to comply. The failure of that person to comply would be an offence. New Section 340K may be a safety net or a last resort in case such a procedure does not deliver what the ombudsman wants. If so, it might be helpful if that were stated. I welcome the Minister’s comments on this. I beg to move.
Lord Craig of Radley (CB)
My Lords, I have added my name to this amendment—as the noble and gallant Lord, Lord Boyce, has explained, it is a probing amendment—because of the importance that must be vested in, and allowed to, the chain of command. I do not need to rehearse in this Committee that importance. The chain must run, and be allowed to run, seamlessly from the highest legal authority, the Defence Council, down through the ranks to the most junior serviceperson.
Since the major part of this Bill is to amend the Armed Forces Act 2006, this should ensure that service personnel involved in a complaint are to be subject to a single disciplinary statute, and are not, as in matters considered to be human rights, dealt with by separate and potentially conflicting legislation. I welcome that.
However, my concern with new Section 340K is that it allows the ombudsman to opine that a serviceperson is in contempt for some obstruction or act, to certify the obstruction or act, and to refer the person directly to a civilian court for investigation. In other words, the ombudsman is given a power of command over the individual even though he—the ombudsman—is not, as the Minister stated, within and does not form any part of the chain of command. It is argued that this contempt-dealing power is normally vested in an ombudsman, although not invariably. Be that as it may, the Armed Forces are, as the noble and gallant Lord, Lord Boyce, has said, dealt with differently in legislation. No other public servant is treated in the same statutory way as are members of the Armed Forces.
Surely a better approach, which would cover the issue of contempt and retain the position of the chain of command, would be for the ombudsman to report the individual and the perceived contempt to the Defence Council. The council would then instruct the individual to comply with the ombudsman’s requirement and, if the individual did not, it would be a blatant case of failing to obey a lawful command and could be dealt with accordingly.
Allowing the issue of contempt to be taken direct to a civilian court could lead, because of the lack of detailed knowledge of the Armed Forces by the court, to protracted, time-consuming and more expensive consideration of the issue. Surely it is important to the legislation’s aim to speed up resolution of complaints that steps are taken, where possible, to avoid delay and not slavishly to insert and rely on drawn-out procedures, as would be the case with new Section 340K. Bearing in mind the authority invested by new Section 340M in the position of the Defence Council to an ombudsman’s report about a complaint, it would seem acceptable and a more timely solution to the problem faced by an ombudsman of a potential contempt of his authority if that contempt were dealt with through the Defence Council. I urge the Minister to consider this approach and be minded to offer an alternative to the current new Section 340K on Report along the lines that I and the noble and gallant Lord, Lord Boyce, are suggesting.
Lord Deben (Con)
My Lords, it will be within many of your Lordships’ memory that I take a particular interest in those occasions when we are discussing the particular interests of sections of the community. We very often have a discussion when the whole debate seems to be by lawyers about what should happen on the law. Similarly, I am concerned when the debate becomes a debate by members of the Armed Forces about what should happen in the Armed Forces. As a non-member of the Armed Forces I support the concern behind this, for two reasons.
The first is not a military reason at all. It is that I dislike very much the concept that, because somebody else has a power, it has automatically to be put into this legislation. That, of course, is an argument that has been used. It seems to me to be almost always a false argument. Indeed, if it is to be here it should be argued that it is right here, not that somebody else argued about it and said it was right somewhere else. There is much in our legislation which has got in because people have never really debated it but merely said, “Well, every time we have a Bill of this kind, we always put this in”. New Section 340K extends the way in which the ombudsman would work to an unacceptable extent.
I do not understand why it would be better to do it this way than in the way noble Lords opposite have put forward. The Government must explain why going through the Defence Council would not be just as good as doing this. If one went to the Defence Council, one would not open oneself to the concern that is here. It is not the most important thing in the world; the pillars of the temple will not come down if we do not make a change here. All the same, we ought to be very careful about making it difficult for the chain of command in the Armed Forces to be clearly a chain without any interference. There is a mechanism for avoiding that and I hope very much that the Government will look at it and see whether there is any real reason for insisting on this format, which may be all right somewhere else but is not necessarily right here. The only reason I intervene is that I think it is important for somebody who is not in the Armed Forces to say that they think this is valuable.
Armed Forces (Service Complaints and Financial Assistance) Bill [HL]
Lord Craig of Radley Excerpts(10 years, 6 months ago)
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Lord Craig of Radley (CB)
My Lords, I welcome the Bill, but have some reservations about it. First, I am surprised—although maybe there is a simple explanation—that Clause 4 is not in a separate part. It does not seem to have anything in common with complaints or ombudsmen. Nevertheless, welcome support has already been given to service charities and others from the £35 million LIBOR funds that have been allocated. I welcome the Minister’s information about further funds being set aside for future years. What assurances can he give the House that these welcome funds will not be reduced or forgone, whether they come from LIBOR or from the defence budget?
I turn to the principal issue of the Bill. There has been systemic evidence that the complaints system has not moved with the times, and a commendable expectation that complaints about maladministration and issues such as bullying and sexual harassment should be dealt with fairly and in a timely manner. As the complaints commissioner’s annual reports make clear in citing examples of poor handling of complaints, much still needs to be done to improve the way in which the Army and the Royal Air Force deal with complaints. The Royal Navy seems to be showing the way, with a reasonable recent record. What is not clear—and maybe the Minister can help us on this—is how much of the difficulties being faced by the Army and Royal Air Force are due to a lack of adequate resources or to conflicting issues that make a quick and timely resolution of a complaint unachievable. Are there barriers to better performance that lie beyond the control or decision of the chain of command? The complaints commissioner herself has reported that more resources are required within the services. Is she right on this?
Unless these problems are tackled and resolved, the changes in this Bill—the substitution of an ombudsman figure for the complaints commissioner and the reduction in the appeals process from three levels to just two—will prove not to be the answer to the problem but more expensive than its predecessor. Will it turn out to be no more than costly cosmetics, because the practical difficulties faced within the services for dealing with complaints cannot be or have not been resolved?
As has been made clear by the Minister, the Government recognise the importance of retaining the responsibilities of the chain of command, even to the extent of not giving the ombudsman the final say in the outcome of his or her investigation and report. I welcome this approach because, as I have said on other occasions in this House, the whole ethos and trust between those in command and those they command are so essential to the operation, employment and day-to-day activity of the forces.
Much of the detail in the Bill will not emerge until the many regulations specified in it are published. One in particular about which it would be helpful to have further information is the reference on page 2, on lines 18 and 19, to matters of a description about which a complaint may not be made. The Minister has given the House some indication what those no-go areas might encompass, but more information would be helpful.
Another example that would benefit from further information is the procedure for the ombudsman investigations in new Section 340I on page 7. New subsection (2) states:
“The Secretary of State may make regulations about the procedure to be followed”,
but new subsections (3) and (4) seem to give the ombudsman freedom to make up his or her mind on how to proceed, albeit constrained by whatever the Secretary of State has set out in his regulation about procedure. It would be helpful to our understanding all the intricacies of the regulations referred to in this Bill if drafts for regulations for more major issues could be made available before we reached Committee. Would that be possible?
The Bill introduces arrangements that may help to speed up resolution of a complaint by reducing the number of levels of appeal and setting out timescales for the submission and discharge of appeals. I welcome the latter and the intention to have a cut-off point beyond which claims cannot be made or continued. The downside to this is that future claimants may feel that their rights have been eroded. Provided that the new arrangements—not only those covered by this Bill but, most importantly, the improvements in service procedures for dealing with complaints—are seen to work well, the reduction in appeal opportunities seems reasonable and I for one conditionally accept it.
Armed Forces
Lord Craig of Radley Excerpts(10 years, 6 months ago)
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Lord Craig of Radley (CB)
My Lords, I too welcome the opportunity for the House to express views on defence and on the role of Her Majesty’s Armed Forces. I join in the appreciation expressed for the Minister for the amount of effort he puts in to keep us informed on the defence scene. However, I fear too often with this Administration—maybe it is a feature of coalition government—there is little that gives an indication of long-term visionary and realistic thinking; I stress “realistic”. Certainly for the Armed Forces, that 2020 vision we heard about a few years ago, along with balanced manpower needs, is far from realistic or realisable given current funding projections. Indeed, as we hear more about belt-tightening and further financial stringency, there is a sense that, far from increasing the defence budget, further reductions are in the Chancellor’s mind.
However, before reviewing defence capabilities, there is a more fundamental question to answer: what is it that this country—under whatever Government—should aspire to in the field of international affairs? Do we wish to remain in the forefront of such affairs and alliances—and, if needed, punching military weight—that our place on the Security Council, our long history, NATO, our European identity and our Commonwealth membership once combined to give us that genuine status and real credibility? I hope that the next security and defence review will choose to dwell on and clarify that vision of our place in the world in this decade and the next, not just for this year and up to the next general election.
At present the impression is given that it is no longer realistic or thought right always to be active at that level of international influence. The notable absence of the Foreign Secretary at the start of international discussions about the Russia/Ukraine crisis and the almost instantaneously reactive statement at the first signs of the latest Iraq turmoil indicated that the UK would not consider the use of force. Did not that send a significant, albeit depressing, signal? Why was there not the time-honoured immediate reactions to crises, along the lines that all options are being considered and nothing has yet been ruled out? That reaction is designed to give comfort to one’s allies and friends that we are up to the necessary treaty and other commitments if all else fails, and to tell our adversaries that we do not intend to be a mere hand-wringing touch-line spectator that poses them no immediate need for concern. In the field of acquiring intelligence, for example, stand-off aerial platforms—including unmanned aerial vehicles—are available, as indeed are, if necessary, stand-off weapons from sea or air. Those are attacks without use of any ground commitment. Why are they all ruled out so quickly?
At its most elemental, lacking high-worth defence capability, as seen by others, is significant, if only as a further indicator that this country is no longer really prepared to make the effort to remain a leading power in the world of today and tomorrow. Above all, how does that read in Washington? Maybe it is not difficult to guess, if the concerns expressed by US Defense Secretary Gates and his successor Hagel are taken as seriously as they should be. The special relationship, so important to our national security, is starting to lack substance, as viewed in Washington. At a time when the United States’s strategic anxieties are focusing more across the Pacific than across the Atlantic, that may become all too obvious—obvious, that is, when your best and strongest ally just does not bother to consult you about a developing world crisis or problem.
Measures of comparison of input expenditure on defence do not reveal a true picture. The Government have claimed—perhaps it is no longer true—that their defence expenditure is the fourth largest in the world. However, output, not input, should be the true measure of defence capability. Rather than compare what we have spent in the past with expenditure today, I would prefer to use a comparison between what we had in the past—say, when we had realigned our defence posture after the end of the Cold War—and what we have now, as well as what we plan for the immediate future. Time is too short to spell this out in detail, other than to say that the Armed Forces’ manpower and inventory of war-fighting equipment are far below those of the late 1990s. Surely the world and this nation are not safer—maybe far less safe—than they were in that period.
Indeed, the Prime Minister only last week drew attention to the real threat of terrorism spawned in failed states. Defence capability, along with political, economic and diplomatic effort, will combine to tackle such threats, but the latter will lack weight without the backing of military strength and the will to use it to protect this country and its citizens. There are few, if any, quick fixes in defence capability, so a draw-down today will be as damaging in five or even 10 years’ time as it is at the present time. Equally, if in spite of recent indications we wish to retain our place on the world scene, now is the time to invest not only in capability but in numbers. This would both give an immediate indication of determination to remain at a leading position in world affairs and provide successor Governments with the wherewithal to retain that posture.
The 2010 strategic defence and security review was inevitably driven by the economic crisis and an aspiration for force levels a decade hence, in the timescale of 2020, but those aspirations are drifting far out from what was projected only four years ago. By 2020, further slippage and delay in an underresourced programme will be upon us unless significant new money is made available.
A further consideration, too often overlooked, is critical mass—in the number and trades of individual personnel, in the inventory holdings of critical major components, whether ships, aircraft or other weapons platforms, and in spares and availability of consumables. Smaller forces, too, inevitably reduce the scale and opportunities of career and professional advancement. As is already evident, this hampers the ability of the forces to recruit and retain, in particular, those with special expertise, such as engineers or aircrew.
Yet it is from those who first volunteer to join and then decide to remain in the forces for a full career that future senior commanders will have to be found. Headhunting a commander-in-chief or a chief of staff from outside their service is impossible, so the calibre and quality of those who decide in an all-volunteer force to remain and who will be the advisers to Ministers on the use and applications of military power is a further issue for politicians to ponder. Some of the brightest in the services are choosing to leave while they have the youth and skills to take up a new career in civvy street, leaving others maybe less capable to soldier on to fill the senior positions in the Armed Forces.
The next review of the defence and security of the nation must surely be more explicit about the future global posture and strategy for this country and it must be more realistically funded than at present, unless it is the intention to dumb down our standing in the world in a futile and fanciful search for a quieter life.
Defence Reform Bill
Lord Craig of Radley Excerpts(10 years, 8 months ago)
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The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever) (Con)
My Lords, this amendment fulfils a commitment I made on Report. During that debate I made it clear that the Government supported an amendment, tabled in the names of the noble and gallant Lords, Lord Craig and Lord Stirrup, the noble Lord, Lord Levene, and my noble friend Lord Roper, that would have required a future Government to publish a White Paper and an impact statement before laying a draft order commencing Part 1 of the Bill. I agreed to bring forward a suitable government amendment at Third Reading, and that is the amendment that is before us today.
I do not intend to repeat the debate that we had on this issue in Committee and on Report. In essence, the debate centred on the need for parliamentary oversight and scrutiny of a future decision to proceed with a GOCO and the provision of sufficient information to Parliament to enable it to have an informed debate prior to the commencement of Part 1. In the end, there was consensus that this should take the form of a statutory requirement on any future Government to publish a White Paper and an impact statement. The government amendment reflects that commitment, although the need for precision in legislative drafting requires us to describe the content rather than the form of these documents. Nevertheless, the information that would be provided under the amendment is effectively the information that would be included in a White Paper and impact assessment.
Amendment 1 therefore makes it a requirement to publish and lay before Parliament a report on the options for carrying out defence procurement that the Secretary of State has considered. This must be done before any draft order commencing Part 1 of the Bill is laid before Parliament. The report will need to cover not only the GOCO option but any other options that the MoD is considering at the time for the reform of DE&S and it must include an assessment of the impact of the options and any other information that is appropriate to enable a proper comparison to be made between them.
It should be noted that the report must deal, in particular, with the option of what is commonly called DE&S-plus-plus—that is, the new DE&S as it will be once the transformation, which began at yesterday’s vesting day, is in place. This requirement specifically to consider the reformed DE&S is covered by new subsection (3D) of the amendment. I know that this is something that noble Lords were particularly keen should be captured in the amendment.
I hope that the amendment will command widespread support. It reflects the detailed debates that we have had on this Bill about the need for Parliament to have oversight of a decision to proceed with a GOCO and shows that the Government have listened carefully to the concerns raised by noble Lords from all sides of the House. The amendment will ensure that Parliament is provided with sufficient information to enable it properly to scrutinise and consider a future decision to proceed with a GOCO. I beg to move.
Lord Craig of Radley (CB)
My Lords, I thank the Minister for his explanation of the amendment. As he has mentioned, the amendment reflects Amendment 9 on Report, which was tabled by the noble Lords, Lord Levene and Lord Roper, my noble and gallant friend Lord Stirrup and myself. The amendment that the Minister is now proposing is indeed fuller than the one that we put down but it carefully covers all the points that we had in mind. It may not mention the words “White Paper” but it spells out, in 25 lines compared with our five, the very thorough and comprehensive look at the proposals that is to be taken before Part 1 is passed into law. I thank the Minister and all those who have worked on the amendment. I shall certainly give it my support.
Defence Reform Bill
Lord Craig of Radley Excerpts(10 years, 8 months ago)
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Lord Palmer of Childs Hill (LD)
My Lords, the amendment moved by the noble Lord, Lord Rosser, raises an important point. Despite a lengthy explanation, the point is whether an annual 2020 plan would help. I have some questions for my noble friend the Minister. What sort of manpower on an annual basis would be needed to prepare such an annual report and would that have any effect on the use of our fighting manpower? Will he also comment on how much information is already in the public domain? That point was mentioned by the noble Lord, Lord Rosser, who said that the information is available but not in a complete format. Perhaps my noble friend can say whether such an annual report, if it showed deficiencies, would aid our enemies rather than the country. I am all for transparency but we are talking about the defence of the realm.
Lord Craig of Radley (CB)
My Lords, I have one very small comment. It would seem to be quite wrong to restrict such an annual report to the Army. It would be necessary, if such an approach were to be adopted, for the report to cover all three services in full.
Lord Ramsbotham (CB)
I absolutely agree with my noble and gallant friend Lord Craig on that point. On reading the Defence Committee report, Future Army 2020, I was concerned to note two statements:
“We are surprised that such a radical change to the Army’s structure … was not discussed at the National Security Council”,
and,
“We note that the Secretary of State for Defence accepts that Army 2020 was designed to fit a financial envelope”.
The financial envelope includes not just the Army but the other two services. If we look at history, an annual debate was held in both Houses on the estimates for the Navy and the Army. We are therefore putting back history, as it were, if we have an annual estimate. Particularly in this case, I note the suggestion that the first discussion should be in January 2015 because, of course, when the strategic defence review 2010 was introduced it was clear that its achievement was dependent on the money that would be available in 2015. Looking around, it seems pretty obvious that that amount of money may not be available—in which case, all three services will have to face a review of the current plans.
Lord Craig of Radley
“( ) An order under subsection (1) to commence Part 1 may not be made before the Secretary of State has published a White Paper and an impact statement on any proposed Government-owned contractor-operated options compared with DE&S as modified by the Secretary of State commencing in 2014.”
Lord Craig of Radley
My Lords, the amendment relates to the commencement of Part 1. During earlier consideration of the Bill, both at Second Reading and in Committee, I and other noble Lords questioned why Part 1 should be enacted now. The Government had made it clear just before Second Reading that they did not intend to proceed with the GOCO model; instead, they would seek to strengthen DE&S—described as DE&S-plus—for the next three years, and maybe more, before reconsidering a GOCO solution.
It was explained that getting parliamentary time for a GOCO Bill at a later date might be difficult. The option of using the quinquennial Armed Forces legislation, due not later than November 2016, as a vehicle for Part 1 of the Bill might be adopted, but it could well be too early. Moreover, few would claim that a GOCO part would be a particularly comfortable companion to the Armed Forces Bill. This must be enacted before the five-year life of its 2011 predecessor runs out. Any delays in its progress through Parliament because of differences over the GOCO part would be best avoided. For these reasons, I now accept that the Armed Forces Bill would not be a suitable vehicle and that the inclusion of Part 1 in this Defence Reform Bill should stand.
However, because a GOCO model would be such a major step change in defence procurement arrangements and the timing of its introduction so undetermined, the Government agreed that both Houses should be given a legislative opportunity to reconsider Part 1 prior to its commencement. The Minister therefore added in Grand Committee the amendment that now forms Clause 50(3). This is a step in the right direction, but it does not go far enough.
Part 1 sets out a range of issues covering the arrangements and responsibilities of a GOCO. It contains a considerable amount of important detail; for example, on transfer of employees, financial provisions and protection of intellectual property rights. These and the rest of Part 1 are clearly essential information for any consortia that might wish to formulate a bid for a GOCO contract. In short, Part 1 is about process; it is not about principle. The principle is whether to replace DE&S-plus—not the current DE&S—with a GOCO. An affirmative resolution, the Government’s present position in the Bill, approves only Part 1 commencement and agrees the technical and administrative processes to be followed by a GOCO. This is surely not sufficient.
Ahead of passing the affirmative resolution, Parliament needs to consider as well the relative merits and risks of proceeding with a GOCO compared to those of what will be an up-and-functioning DE&S-plus. This is sometimes strangely characterised as being match fit. Would that equate to how prepared Chelsea were before thrashing Arsenal 6-0 last week, or to a joiner’s well crafted dovetail joint in a carpenter’s shop? It is not clear to me quite how MoD interprets such a vague phrase.
I turn to the amendment. The Government have acknowledged, in particular in a letter dated 19 March 2014 circulated last week among many of your Lordships by Mr Philip Dunne, Minister for Defence Equipment, Support and Technology, the need for a White Paper and an impact assessment prior to the statutory instrument. Mr Dunne says that the Government recognise that comparison between a putative GOCO and the contemporary performance of DE&S-plus is an essential prerequisite before formally approving commencement of Part 1. However, the Secretary of State has the power to set up a GOCO without the formalities of enabling legislation.
Lord Astor of Hever
My Lords, before the noble and gallant Lord sits down, it may assist him and other noble Lords to know that the Government are prepared to support the amendment in principle and that we intend to bring forward a government amendment, achieving these aims, at Third Reading. I will, of course, respond fully to the issues raised at the end of the debate, in the usual way, but I want to make our intentions clear now.
Lord Craig of Radley
My Lords, that is obviously most welcome news and I thank the Minister and the Government for making it clear at this stage. On that basis, I will be prepared to withdraw my amendment. However, for the purposes of the debate, I beg to move.
Lord Rosser
My Lords, I speak to Amendments 10 and 11. In Committee, we argued that Part 1 of the Bill should be withdrawn, following the Government’s decision not to proceed with their proposal for handing over defence procurement to a company under contract to the Secretary of State. That decision was made following a lack of bidders. Instead, the Government announced their intention to go down the road of further developing the DE&S organisation in the Ministry of Defence by setting it up as a bespoke central government trading entity with effect from next month.
Lord Astor of Hever
My Lords, the amendments in this group deal with the issue of parliamentary oversight and scrutiny of a future decision to proceed with a GOCO. The question of what information should be available to Parliament has been discussed extensively during the passage of the Bill, and that debate has been carried on this afternoon. As I have already indicated, the Government support Amendment 9 in principle and intend to bring forward a government amendment at Third Reading. We think that Amendment 9 strikes the right balance between ensuring Parliament has sufficient information to consider a GOCO proposal and not setting undue constraints on a future Government, the Defence Select Committee or the commercial process.
Amendment 9 requires the Government to publish an impact statement and White Paper before proceeding with a GOCO. The Government have always been clear that Parliament should be able to debate and consider in detail a decision to proceed with a GOCO in future. We agree that that would be a major decision and that it is right that Parliament should have the opportunity to hold the Government of the day to account for such a decision, should they decide to proceed with Part 1 of the Bill. We have also been clear that we expect any future Government to publish an impact assessment on the options before proceeding with a GOCO and to issue a White Paper setting out those options in detail.
We have discussed the issue of parliamentary oversight and scrutiny of a future decision to proceed with a GOCO in great detail, both in Committee and with interested colleagues, and I am grateful to all noble Lords for their contributions to that debate.
The requirements set by Amendment 9 seem reasonable, as they would impose two statutory requirements on the Secretary of State before an affirmative order to commence Part 1 could be laid before both Houses of Parliament. That would ensure that Parliament had sufficient information to properly debate the GOCO proposal under consideration before Part 1 could be brought into force.
We acknowledge the merit of some form of statutory requirement to provide detailed information on the GOCO proposals in future and that it is reasonable to put such a requirement into the Bill. We did not initially think that a statutory requirement was necessary, but we have been convinced otherwise by noble Lords from all sides of the House. That is an example of what the Members of this House do best—ensuring that legislation is properly scrutinised, and amended where necessary. We will therefore bring forward a government amendment at Third Reading that will make it a legal requirement for a future Government to publish appropriate information on the GOCO options before the order commencing Part 1 is brought forward.
We think that Amendments 10 and 11 go too far. They would do two things. First, they would place in statute the need for a future Government to publish a number of documents before proceeding with a GOCO. Secondly, they would make the affirmative commencement order that brings Part 1 into force subject to the super-affirmative procedure.
I will deal with those two things separately. On the publication of documents, the requirement would be for an impact assessment that covers specific options. This in itself does not present any difficulties; as I said earlier, we are prepared to accept a statutory requirement to produce an impact assessment.
However, proposed subsection (2B)(a)(iii) in Amendment 10 goes too far in that it requires the impact assessment to include any options that may be recommended following consultation with the Defence Select Committee. That is a very unusual provision. It effectively sets a statutory requirement for a future Government to consult the Defence Select Committee on the way forward. Although the Ministry of Defence would, of course, welcome any report that the Select Committee produced on the department’s proposals, we need to be very careful in this House about setting out statutory requirements on a House of Commons Select Committee. The Defence Select Committee already has the power—if it wishes—to look at any aspect of MoD business and I do not think it would be right for us to tell it what it must do. It is for the committee, not us, to decide what its programme of work should be.
On the other parts of Amendment 10—which would require an independent report on the options and the Defence Select Committee to review and report on that report—again I think this is too much. I really do not see what an independent report would add to the impact assessment set out earlier in the amendment, which would already set out the issues and analysis objectively. I do not think it is right to make it a legal requirement for the Defence Select Committee to review such a report. This raises fundamental questions about fettering the ability of a Select Committee to decide its own programme of work and it would be wrong for this House to direct what a Commons Select Committee must do.
Amendment 11 would also make the commencement order for Part 1 subject to the super-affirmative procedure. This would require the Secretary of State to consult on the order, including with anybody recommended by the Defence Select Committee. This would seem completely unnecessary given the requirement to publish an impact assessment and totally inappropriate in relation to a commencement order. Super-affirmative procedures may be appropriate where secondary legislation covers significant policy matters but not in relation to commencement orders. It is not clear what we would consult on given that the order will simply say when the provisions should come into force. Amendment 11 confuses the issues. I accept that there is a need for Parliament to consider any GOCO proposals but I fail to see what would be achieved by the requirements in Amendment 11. It would not provide the House with any more scrutiny of the proposals in question and introduces an unnecessary and overly complex procedure where none is required. I must therefore strongly resist Amendment 11, which I think is both unprecedented and wholly inappropriate.
The noble Lord, Lord Rosser, said that the super-affirmative procedure would be unprecedented for a commencement order. The other circumstances in which super-affirmative procedures are used are very different. There is no precedent for using a super-affirmative procedure for a commencement order. A super-affirmative procedure is relevant only where an order covers significant changes in policy or has significant legal effect. A commencement order does neither.
I thank my noble friend Lord Roper for his support and wise advice during the passage of the Bill. I also thank my noble friend Lord Trefgarne for his support. Given that the Government have made it clear that they support Amendment 9 in principle and that we intend to bring forward a government amendment at Third Reading, I ask the noble and gallant Lord and other noble Lords not to press their amendments in this group.
Lord Craig of Radley
My Lords, I thank the Government and the Minister once again for deciding to take away Amendment 9. I also thank very much the noble Lord, Lord Roper, the noble and gallant Lord, Lord Stirrup, and the noble Lord, Lord Levene—who regrettably was not able to be present—for their support and I beg leave to withdraw my amendment.
Defence Reform Bill
Lord Craig of Radley Excerpts(10 years, 9 months ago)
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Lord Palmer of Childs Hill (LD)
My Lords, I thank the noble Lord, Lord Tunnicliffe, for raising a number of questions to which I am sure my noble friend will seek to reply. They were interesting issues. I also liked the noble Lord’s comment that it was an admirable attempt at an intractable problem. Indeed, such an attempt is being made, which is really the point. Let us hope it is an issue that is cross-party and of no party, which could be seen as a good thing.
The other interesting point made by the noble Lord was that the words spoken by the Minister will be followed by the industry. That is the point about this debate: the words that are spoken and reported in Hansard are what the industry can see and take confidence from, as well as the amendments before us. I was also grateful that the amendments are not an attempt to wreck the Bill. The noble Lord’s final comment—that they would enliven the debate—was a pleasant way of looking at this matter.
Clause 13 in Part 2 is an important technical advance that attempts to bring sanity to single-source contracts. Clearly, the clause is necessary, and the Motion to remove the clause is purely a technical effort to debate it. The issue in Amendment 18G relates to how one ratifies appointments, which it suggests should be done by a Select Committee. I ask the Minister whether, if any ratification by a Select Committee takes place, it should have to interview the applicants. That would surely be beyond what was necessary and would end up involving a comprehensive interview process, which would be too much. The point made by the noble Lord was about how much influence and power would go to the Secretary of State, rather than to some other body of people. Although the Secretary of State must be allowed to have influence, he should not be the person taking the real decision as to who is supported.
When the Minister replies, I hope that she will also deal with a question not raised by the noble Lord, Lord Tunnicliffe. Should the Single Source Regulations Office be the sponsoring department? Should the sponsoring department be the MoD? What about the Department for Business, Innovation and Skills? I have raised this matter with the Minister on other occasions, not only in this context. Here we have a department, the Department for Business, Innovation and Skills, whose raison d’être is to sell and encourage business and industry, but the brief of the Ministry of Defence is also to engage in contracts, selling and so on. Indeed, that ministry sells overseas and I often wonder why we do not look holistically at how we deal with selling this country’s products. I wonder why, in the context of this amendment, the sponsor of the SSRO should be only the Secretary of State for Defence. Why should it not also or instead be the Secretary of State for Business, Innovation and Skills?
Lord Craig of Radley (CB)
The noble Lord, Lord Tunnicliffe, has raised in a variety of ways the issue of the independence of the SSRO from government. I raised one further point on that at Second Reading. I got a reply, but I was not absolutely confident that it provided the right answer. The point I made was that the SSRO has an interest in value for money, but so has the Treasury throughout government. I asked to what extent the SSRO stands free of, or is supervised by, the Treasury. For the record, it would be helpful to have that point covered once again. If I remember correctly, I got a very full answer from the Minister, the noble Lord, Lord Astor of Hever, but I was not absolutely happy that it gave a feeling of the pure independence of the SSRO from the Treasury.
Baroness Jolly (LD)
My Lords, I thank noble Lords for their comments at the beginning of this fourth day in Committee. In particular, I thank the noble Lord, Lord Tunnicliffe, and commend him for his preparation for the scrutiny in this Committee stage. I apologise in advance to noble Lords because some of my earlier speaking notes are quite lengthy, but they get shorter. The purpose of the length is that we need much of this on record.
Clause 13 is at the heart of the reforms to single-source procurement. It establishes the Single Source Regulations Office, a small, arm’s-length body responsible for keeping the new framework under review, monitoring adherence and providing expert determination between the MoD and single-source suppliers. It is therefore essential to the success of these reforms. Clause 13 also establishes in law the overriding aim of the SSRO to assure that good value for money is obtained in government expenditure on qualifying single-source defence contracts and that defence suppliers are paid a fair and reasonable price under those contracts.
The creation of an independent body is absolutely central to the success and longevity of the framework. I cannot say this too strongly. The purpose of this body is to be independent and transparent, thus giving confidence to both parties who need to play in this area. It was a key recommendation of the independent review conducted by the noble Lord, Lord Currie. The SSRO will replace the existing Review Board for Government Contracts, which, as the noble Lord, Lord Currie, identified, has, through no fault of its own, failed to evolve to reflect changing circumstances, largely because either party can block any change that it regards as contrary to its own interests.
Clause 13 brings into effect Schedule 4, which establishes the governance structure of the SSRO. In this we have closely followed guidance published by the Cabinet Office on executive non-departmental public bodies and have considered existing governance arrangements for similar bodies, such as Monitor. So we have not started with a blank piece of paper and, as the Committee will see, with the following key characteristics of the SSRO, the structure we have created is in common with other similar public bodies. It has a separate chair and chief executive and a board which has a majority of non-executive directors, which is aligned with best practice in the Financial Reporting Council’s UK Corporate Governance Code and Cabinet Office guidelines. Non-executive members of the SSRO should be appointed for a period of between three and six years to assure a staggered process of appointments to the key positions. There will be a process that allows the Secretary of State to remove or suspend a member from office on the grounds of failure to carry out his or her duties, incapacity, such as ill health, or misconduct, which rightly follows Cabinet Office guidance on the creation of public bodies. The SSRO will have the ability to appoint its own employees, which is consistent with Public Bodies: A Guide for Departments, produced by the Cabinet Office; and, in accordance with the Cabinet Office’s guidance on good corporate governance in executive NDPBs, the SSRO’s committee structure will be the body that makes key binding determinations, including where there is an appeal from one of the parties to a qualifying defence contract. We have listened to industry requests in this area, and have agreed that committees can contain members who are not employees or members of the SSRO.
The SSRO will also have separate responsibilities to the Secretary of State, the Auditor-General and Parliament. These, which are set out in Schedule 4, include the provision of annual accounts which are consistent with international finance reporting standards, which will be audited by the National Audit Office. These accounts will be prepared between three to six months of the end of the financial year. An annual report on its activities must be provided by the SSRO to the Secretary of State, who in turn will lay the report before Parliament.
As the sponsoring department of the SSRO, the Secretary of State will make payments to the SSRO to finance its operations. This is in common with Cabinet Office guidance on the funding of ENDPBs. There will be a framework agreement established between the MoD and the SSRO that sets its budget, in accordance with HMT’s guidelines in Managing Public Money and performance targets. The SSRO will be jointly funded by the MoD and industry, but we have agreed with industry that the MoD will pick up its costs over the first three years, as it is established and until we determine its precise annual running costs. The SSRO will be allowed to borrow money only on a temporary basis up to an overdraft limit set by the Secretary of State. There may be occasions where the SSRO has a higher number of adjudications or determinations that it is administering, where it may require additional resources to meet its objectives in a timely fashion.
We have given the SSRO the ability to pay pensions to its non-executive members. This is not because we intend to pay a pension to every non-executive member the SSRO appoints; rather, we have done this to give the Secretary of State the flexibility to recruit non-executive members from both the private and public sectors who may have existing pension arrangements. Other elements of Schedule 4 ensure that the SSRO will be a body that is subject to the Freedom of Information Act 2000, allow the parliamentary commissioner to investigate the SSRO, and ensure that its staff are not civil servants.
This clause is therefore crucial to the overall establishment of the SSRO and the functioning of the new framework. The SSRO will, over time, become an independent expert in defence single-source pricing, ensuring that we do not need to wait another 45 years for this framework to be reviewed again. It is therefore crucial that this clause is retained in the Bill.
Amendments 18G and 18H revolve around a concern, primarily expressed by industry, but also by the noble Lord, about the independence and impartiality of the SSRO. I assure noble Lords that we are committed to ensuring that the SSRO will be both independent and impartial. The credibility of the new single-source framework rests upon this. For example, the SSRO can act as an independent adjudicator in the event of disputes between parties and it is the appeal body to which industry can refer if we apply a civil penalty to it. Perhaps even more significantly, it annually recommends the profit rate and recommends changes to the framework as part of the quinquennial review process. It is the guardian of the new framework and its impartiality is at the core of the dual aims under Clause 13 of ensuring a fair and reasonable price for contractors and value for money for the Government.
If the SSRO was perceived as being partial, this would create great difficulties. If the perception was that it was too biased towards the Government, shareholders could decide that the defence sector was no longer worth investing in and our suppliers could be driven to leave it. If the perception was the other way—as too biased towards our suppliers—we would seek to change the framework entirely or we would exempt our contracts from it and thus lose the protections we are establishing in this Bill. Neither of these outcomes serves either the MoD or our single-source suppliers. It is the need for independence and impartiality that has led to our desire to set up the SSRO in the first place. The current framework requires consensus to change. This has meant that for 45 years, any change that one side has felt puts them at a disadvantage has been blocked. This is the principal reason why the old system has remained frozen in time for so long. Consensus will not serve us. The alternative, a statutory framework determined entirely by the MoD, would always be resisted by industry. There would be a risk that over time the framework would become steadily more one-sided and that industry would be driven out of the sector, so this option is also not desirable. What we need is an independent body, namely the Single Source Regulations Office.