Armed Forces

Lord Hamilton of Epsom Excerpts

Monday 5th November 2012 Lords Chamber

[Lord Hamilton of Epsom]

My Lords, I should start by saying that I work for an American defence company called Curtis Wright. The Wright in Curtis Wright was the Wright brothers. Curtis Wright supplied many fighter aircraft to the US Air Force during the last war. After the war somebody came along and said, “We think you should look very closely at the whole idea of jet propulsion for fighter aircraft”. Curtis Wright looked at it very carefully and said, “No, this is not the answer”. Your Lordships will not be surprised to know that Curtis Wright are not in the production of fighter aircraft any more, but they are involved in a number of other technical areas in defence supply. It is always a great pleasure to follow the noble Lord, Lord Davies of Stamford, because—let us face it—he does not lack chutzpah when it comes to defending the actions of the previous Government.

I will deal, firstly, with the question of defence specialisation. This has a certain allure to it because what it means is that different countries in Europe would take over the sole supply of the capability of certain bits of defence. The very obvious answer to that would be that armour should be in the hands of the Germans. If the noble Lord, Lord Davies of Stamford, talks to his honourable friend in the other place, Gisela Stuart, who is German, she will tell him that the Germans have become completely pacifist. If we had this arrangement, and we decided we wanted to fight an armoured conflict somewhere, we could not do it because the Germans would not fight. There seem to be enormous problems. The noble Lord says that when this great unification of European forces was put together, they would have to sign up to looking after our colonies. The Spanish are extremely hostile to the idea of us defending the Falklands at all, and I am not sure that they are going to sign up to that in any way. There are enormous shortcomings.

I will move on to the great debate, which was raised by the noble Lord, Lord Davies of Stamford, about the size of the deficit inherited by this Government. Was it £37 billion or £38 billion of unfunded procurement over 10 years? Or was it a smaller figure? It must have been a pretty massive figure because otherwise we would not have had the devastating review of our whole procurement programme, cutting out ranges of procurement. The Harriers had to go, as did the maritime patrol aircraft and so forth. That would not have happened if there had not been a very serious problem which this Government had to address. I do not expect the Minister to answer this when she sums up, but perhaps she could write to me about it. Last Tuesday, my noble friend Lord Trefgarne gave lunch to Sir Clive Whitmore, who used to be the Permanent Secretary in the Ministry of Defence when I was there and in the time of my noble friend Lord King. Clive Whitmore, who understood politicians very clearly, was famous for saying all the time, “I have to remind you, Ministers, that I am the chief accounting officer of the Ministry of Defence, and if you want to spend money you have not got, I want a ministerial override”. As your Lordships know, a ministerial override is something that comes from the Permanent Secretary and has to be signed by a Minister. It basically says that “I, as a Permanent Secretary, advise against this particular procurement because the funds are not available and they have to be signed off by a Minister”.

The final signing off of the aircraft carriers was in 2009. The roof had fallen in on the whole economy, and we had complete disaster in every direction. It was obvious to a child of five that there was going to be no more money coming into the defence budget. At the same time, two aircraft carriers were ordered at a cost of around £5 billion. That was on top of a mass of other equipment which had been ordered but for which there were no funds whatever. What happened in the Ministry of Defence? Why were there no ministerial overrides? We look to our Civil Service to guarantee the continuity and solvency of departments of state. What went wrong that that did not kick in? What provision has now been made in the Ministry of Defence to ensure that this sort of thing does not happen in the future? Perhaps that could be put in a letter. We should be seriously concerned if we reach a position where things are being ordered in this way. This is always going to happen in political life as politicians believe they can buy people’s votes by putting out enormous orders and there could be no better way of buying votes than to have two aircraft carriers being built simultaneously in every shipyard in the country so the largesse could be spread as widely as possible. Why was there not a ministerial override saying, “The funds are not available for this, I therefore do not recommend it, and I am doing it only because I am ordered to by the Minister”?

[Lord Davies of Stamford]

Perhaps I can help the noble Lord and also defend civil servants whose reputations might otherwise be tarnished by what he has just said. We had the most conscientious and able Permanent Secretary and finance director in my time. There was no ministerial override because there did not need to be one as the carrier programme, like other parts of our programme, was funded and properly provided for within our defence budget.

[Lord Hamilton of Epsom]

That no doubt explains why the first thing this Government tried to do when they got in was to cancel the carrier programme, only to find that it could not be cancelled because BAS is very good at tying up such incredibly tight contracts that it would have cost more to cancel than to go ahead with it. I do not totally buy that: there is something seriously wrong here, and I do not think we would have the current difficulties if there had been a few more ministerial overrides in the past. Critics of my right honourable friend, Philip Hammond, the new Secretary of State, say that he is just a number cruncher who does not know anything about defence priorities. He understands very well the first defence priority, which is that you do not order kit if you do not have the money to pay for it. His second priority is balancing the budget, and he therefore takes total care that we are not going to run into any major crisis, such as the one we have experienced recently. His business experience will be valuable, and he is the ideal man to be holding the position of Secretary of State.

It is not just a shambles that we find in the administration of the Ministry of Defence. We used to be able to rely on men in uniform to do the right thing, but what have we seen? We have seen the humiliation of the retreat from Basra, which raises serious questions about the intelligence given to our military commanders before they went in. Was it a complete surprise that the Iranians decided to get involved in all the Shia militias there? The result was that we had to pull out. In terms of safe passage to get back to the airport, we had to do a deal whereby we would not go back in. The Americans were, to put it mildly, dismayed, and eventually the Iraqi Government took the view that such was the appalling shambles left behind in Basra that they had to go in with the Iraqi Army and US Marine Corps. Once they went back in, they certainly sorted out the problems there, and there has not been much of a problem there since.

Almost as a reaction to Basra, the British Army afterwards decided to deploy 3,500 men in Helmand province. What was the intelligence there? Did they not know that the Pashtuns in Helmand loathe all foreigners, and the foreigners they loathe more than any others are the British, because they still have not forgiven us for the wars we fought against them in the 19th century? The result was that we nearly lost that whole force of 3,500 men, but for the fantastic air power provided by NATO, which pulverised all the mud villages in front of it but would not have done an awful lot for hearts and minds in Afghanistan.

I am actually seriously worried about where the Ministry of Defence has gone in the past. My right honourable friend the Secretary of State has a serious problem of getting this thing back into some sort of order, both in terms of finances and, I hope, in getting involved in operational matters, because serious problems have been created for which we are paying a hefty price. I wish I could say that I looked to the future with confidence as regards the serious challenges facing my right honourable friend. He has an awful lot of work to do.