Defence: UK Territorial Waters

Lord Lee of Trafford Excerpts

Tuesday 24th March 2015 Lords Chamber

[Lord Astor of Hever]

My Lords, I assure the noble and gallant Lord that this will be a matter that SDSR 15 looks at very closely.

[Lord Lee of Trafford (LD)]

My Lords, I realise that this is a very sensitive area, but I do think that the public and Parliament are entitled to a little more information in this area and that the Minister and the MoD should not shelter behind generalisations. Specifically, how does Russian submarine activity off our shores compare with activity off the shores of our allies? Secondly, is the Russian activity increasing and, thirdly, is it very much focused on Faslane and our deterrent capability?

[Lord Astor of Hever]

My Lords, I am sure my noble friend will appreciate that for reasons of national security I cannot discuss the detail of such events, as to do so could allow conclusions to be drawn on the UK’s capabilities. However, I can reassure the noble Lord, Lord West, and my noble friend that we take the security of our maritime boundaries very seriously.

Astute-class Submarines

Lord Lee of Trafford Excerpts

Monday 2nd March 2015 Lords Chamber

[Lord Astor of Hever]

My Lords, I cannot answer my noble friend’s question from the Dispatch Box, but I will take it back to my department and undertake to write to him.

[Lord Lee of Trafford (LD)]

My Lords, can my noble friend give an indication of the extent of Soviet submarine activity off our shores and our ability to maintain surveillance?

[Lord Astor of Hever]

My Lords, I am aware of this but it is probably difficult for me to say too much about the subject from the Dispatch Box.

Armed Forces: Baltic Defence

Lord Lee of Trafford Excerpts

Tuesday 24th February 2015 Lords Chamber

Asked by

[Lord Lee of Trafford]

To ask Her Majesty’s Government what is their assessment of the ability of the United Kingdom’s armed forces to participate fully in any NATO-led Baltic defence operations.

[The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever) (Con)]

My Lords, NATO remains the cornerstone of UK defence. We are committed to Article 5 as a fundamental principle at the heart of NATO. An attack on one is an attack against all. We maintain a range of forces at the required readiness and standard and would respond to any NATO request to defend the Baltic states against external aggression. The level of our participation would depend on what requests NATO made of us.

[Lord Lee of Trafford (LD)]

My Lords, there is a saying that it is useless for the sheep to pass resolutions in favour of vegetarianism if the wolf is of another opinion. Is my noble friend not ashamed and embarrassed that, with clear Russian aggression in the Ukraine and major increases in Russian defence expenditure, all our major political leaders, ostrich-like, totally fail to spell out their respective positions on the levels of overall defence expenditure? Do we not need a clear commitment to maintain a 2% of GDP spend on defence and, indeed, probably more? Can my noble friend tell us why the Chief of the Defence Staff was gagged yesterday from speaking at Chatham House?

[Lord Astor of Hever]

My Lords, we have met the NATO target since coming to office and will do so to the end of financial year 2016. NATO membership means equitable sharing of risks and responsibilities, so it is a case of comparing Russia not to the UK but to NATO, which spends 10 times more on defence than Russia. On my noble friend’s second question, the Defence Secretary decided that the Procurement Minister should speak, given the conference’s focus on relations between industry and government.

Armed Forces: Aircraft Carrier

Lord Lee of Trafford Excerpts

Thursday 29th January 2015 Lords Chamber

[Lord Astor of Hever]

I absolutely agree with the noble and gallant Lord. The carriers are highly versatile defence assets, able to meet the widest range of tasks, from humanitarian assistance to carrier-strike and amphibious operations with Royal Marines and battlefield helicopters. Work is under way to plan the most effective and coherent way to operate the carrier capability. This includes the development of deployment cycles, manpower requirements, total F35B—or Sea Lightning—numbers and interoperability with allies.

[Lord Lee of Trafford (LD)]

My Lords, will my noble friend confirm that it is the intention to place a contract very shortly, perhaps in April, for the dredging of Portsmouth harbour? Will he give an indication of the likely cost of that dredging?

[Lord Astor of Hever]

My Lords, I assure my noble friend that it is our intention to dredge Portsmouth harbour. As we are in the process of selecting the preferred bidder, it would be inappropriate to give a cost. We will also be carrying out some other infrastructure upgrades to support the carriers coming into Portsmouth.

Asylum: Afghanistan Interpreters

Lord Lee of Trafford Excerpts

Thursday 24th July 2014 Lords Chamber

Asked by

[Lord Lee of Trafford]

To ask Her Majesty’s Government whether all the Afghan interpreters who have applied for asylum in the United Kingdom will have their applications processed to enable those who are successful to depart from Afghanistan by the end of 2014.

[The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever) (Con)]

My Lords, claims for asylum can only be made from within the United Kingdom. Therefore no claims have been made by those in Afghanistan. To recognise the contribution of our locally engaged civilians we have a generous ex gratia scheme for those made redundant as a result of draw-down. Separately, to protect those directly employed by us who feel a threat of violence because of that work, we have an intimidation policy. These measures are unrelated to UK asylum policy.

[Lord Lee of Trafford (LD)]

My Lords, is not our national honour at stake here? Can my noble friend confirm that although something like 600 people are eligible to come here, of whom 270 have applied, only two visas have been issued? Who is dragging their feet? Is it the Home Office? Is it the MoD? Or is it a combination of both? Perhaps I may ask my noble friend, who is a man of very considerable personal integrity, to bring this shameful situation to the attention of the Prime Minister, so that he can use his authority to get some priority and resource put into this situation. We have a huge debt of obligation to those who have laid their lives on the line for this country and we have to do something about it before the end of the year.

[Lord Astor of Hever]

My Lords, I am assured that the Home Office is able to provide the necessary resources to carry out the very important task of issuing visas and supporting the relocation of those who are eligible—who stood, as my noble friend said, shoulder to shoulder with us in the toughest circumstances. I have asked my officials as a matter of urgency to work with their colleagues across government, particularly in the Home Office, to ensure that momentum is maintained.

Armed Forces

Lord Lee of Trafford Excerpts

Monday 23rd June 2014 Lords Chamber

[Lord Lee of Trafford (LD)]

My Lords, when one is the 20th speaker, as I am, in this sort of debate, most of the major themes have been covered. In my short contribution I will therefore put a number of questions to the Minister.

First, it has been noticeable that ever since the Prime Minister announced the withdrawal date of our combat forces from Afghanistan there has been an obvious turn-off of interest in that country both in the media and among the general public. I therefore suggest that we have a major, dual responsibility to Afghanistan and its future, and to our Armed Forces personnel, who in many cases have given their lives or limbs in this conflict. I have three questions on Afghanistan for my noble friend. First, given the current size and scale of the Afghan national forces, where is the funding going to come from to sustain this level of armed force? What is the latest allied agreement in this area? Secondly, what percentage of equipment that will be brought back from Afghanistan has actually been brought back so far? Thirdly, what are the latest plans, post the reduction or ceasing of our combat role, to give air support to the Afghan forces?

Turning to co-operation with our allies, which has hardly been mentioned today, I ask my noble friend specifically: what is the state of progress in our co-operation with France? Here we have a situation in which each country has a comparable defence budget and broadly comparable forces; yet it appears to me that we are still operating only in the margins of co-operation. Can my noble friend correct or update me in this area?

As regards the carriers, referred to in considerable depth by the noble Lord, Lord West, the last baseline figure given for their cost was £6.2 billion. It was strongly suggested that there would be an agreement to share between the contractors and the Ministry of Defence, on a 50:50 basis, any expenditure over and above that figure. Has that agreement been reached and ratified?

The Minister did not refer at all to the second carrier, HMS “Prince of Wales”. Has any decision been taken on what we are actually going to do with her when she comes on stream? I was glad that the noble Lord, Lord West, briefly touched on the potential of the “Prince of Wales” and carriers generally in disaster relief. We have in the world, sadly, horrendous refugee and humanitarian problems, and I suspect that this will continue. I suggest that instead of looking at the “Prince of Wales” in a minor role as an agent for helping with refugees and humanitarian relief, we give it almost a primary role in this area, with its military capability held in reserve. We have considerable funding pressures. The noble Lord, Lord West, pulls a face, but I suggest that if the “Prince of Wales” is involved in humanitarian operations, the revenue funding for the second carrier should come from our substantial overseas aid budget, not the defence budget.

The question of our escorts has been touched on, of which we theoretically have only 19 at the moment. How many are fully operational? On the Type 26 vessels, which we all welcome, I understand that vertical launch tubes were incorporated in the design, but that there are no present plans to give cruise missile capability to them. Could I ask the Minister what the extra percentage cost would be if our Type 26 vessels were equipped with cruise missile capability and capacity?

Turning briefly to procurement, in May the department issued a press release that said:

“The DE&S has been provided with the unparalleled freedom to manage its own business, outputs and workforce within an operating cost envelope set to drive significant efficiencies”.

Could I ask my noble friend whether these freedoms cover the salary levels of senior personnel in DE&S-plus? That obviously has an implication for recruitment of the right quality of personnel, which I believe to be vital.

Finally, I turn to the issue of training, where our Armed Forces excel. I am sure we were all pleased to be made aware that we have agreed to train 2,000 Libyan armed forces personnel. There are 325 who are already over here being trained in Cambridgeshire. Could I ask my noble friend whether this is our largest current training commitment? How many service personnel are engaged in training across the world? Linked to that, how many requests are there on the table from nations where there are unsatisfied commitments from this country—in other words, could and should our training capability be expanded?

Armed Forces

Lord Lee of Trafford Excerpts

Monday 7th April 2014 Lords Chamber

[Lord Lee of Trafford (LD)]

My Lords, I congratulate the noble Lord, Lord Dannatt, on securing this debate and support the broad thrust of his remarks.

We have a backdrop of a world sadly full of conflict and uncertainty, and one with increased Russian and Chinese defence expenditure. Unfortunately, in the west we are going in the other direction. Last week General Sir Richard Shirreff, our outgoing NATO Deputy Supreme Commander, was quoted as saying:

“The sort of defence cuts we have seen … have really hollowed out the British armed forces and I think that people need to sit up and recognise that”.

The plan to reduce the Regular Forces and significantly increase our reserves presented a real opportunity to enthuse and capture the country’s imagination. Some months ago in this Chamber I recommended that our reserves be retitled something more exciting, such as the “Prince’s Royal Reserves”. Instead, we have continued with the dull, stale words “reserve” and “reserves”. It is no wonder that there are problems with reserve recruitment.

Like other noble Lords, I would welcome a full defence debate, but I want to take this opportunity to ask a few brief questions, most of which I have given notice of to my noble friend. Does he believe that we have sufficient escort vessels to fulfil our international responsibilities? Nominally we have 19 escorts, of which probably only a dozen are operational. On carriers, it is suggested that additional costs above the latest baseline of £6.2 billion will be shared 50:50 between the private sector and the MoD. Is that the situation? Could he also tell us where we are with the Crowsnest radar? Will that be ready in time?

On the next generation of Type 26 frigates, is the plan still to buy 13 and are we still on target to complete the final supplier selection for major items by the end of this year? When is the maritime reconnaissance asset, ScanEagle, launched from the back of ships, likely to come into service? On UAVs, what is the state of play with Watchkeeper, which had its first full-flight training test last month? Generally on UAVs, does he agree with a former Israeli Air Force commander who said recently:

“The attack helicopter is finished”,

and does he agree that unmanned air-to-air combat is a realistic prospect within 15 years? Does my noble friend believe that we are spending enough on UAV development and procurement?

On the Air Force, there are suggestions that the Joint Strike Fighter development in the United States is slipping further behind schedule. Can my noble friend comment on that? It is clearly so important to us in this country. On the Army, leaving aside Special Forces, what is our current attitude to parachute training? How many service personnel are being trained each year?

Defence Reform Bill

Lord Lee of Trafford Excerpts

Wednesday 26th March 2014 Lords Chamber

As I said earlier, while we hold more detailed assessments of our force structure’s capabilities against a range of scenarios, they are not in the public domain for very good reasons of national security, so even if this amendment were accepted we would be limited in what we could report. I believe we are being as open and honest as we can be in terms of the information we release in existing documents or provide during other forms of parliamentary scrutiny.

[Lord Lee of Trafford (LD)]

In terms of being open and honest, how is reserve recruitment going at present?

[Lord Astor of Hever]

I was coming on to that point in response to the point that my noble friend Lord King made.

The final issue that I need to address is the point that was raised by the noble Lord, Lord Rosser: if we are having an annual report on the reserves, why should we not have such a report on the Regular Army? The reserves are a unique set-up: part-time volunteers who juggle work, family and military commitments. In recognising the importance of the reserves and in seeking to revitalise them through the Future Reserves 2020 programme, it was considered important to have an external independent view of how we were doing because the changes impact on reservists, employers, families and communities.

The reserve associations are community-facing organisations which provide an essential bridge between our Armed Forces and the civilian population. An association exists for each of 13 administrative areas of the United Kingdom. They provide advice and support on behalf of our volunteer reserve forces and cadets, work with the chains of command of the Royal Navy, the Army and the Royal Air Force and establish and maintain links with the community. They therefore have the knowledge, skills and experience to report effectively and independently on the Future Reserves 2020 programme. Clause 47 puts that into statute. The reserve associations would not be able to fulfil that same role for the Regular Army, as that is not where their expertise lies.

My noble friend Lord King mentioned the reserves, and that recruiting got off to a bad start. My noble friend Lord Lee also asked about this. In the Ministry of Defence, we have given a lot of time to this issue. We are working hard on it. We have recently increased the bounty to encourage regulars to join the reserves, which was a point which my noble friend also made. Over the past three or four weekends, I have been out to see reserves training in Scotland and different parts of England. I can report that morale is high. The senior officers to whom I have spoken are optimistic that we shall reach the numbers that we have set out, so I am confident. I had organised for the noble Lord, Lord Rosser, and two or three other Peers to visit the recruiting centre in Upavon. We had to cancel that because we had a Statement in the House, but I think that it is in the grid to have another visit there.

My noble friend Lord Palmer asked what manpower would be needed to prepare the report. The answer is a small number. My noble friend also asked what information is already in the public domain. The answer is plenty—the annual report and accounts and the Army 2020 update both cover progress in detail. He asked whether revealing deficiencies might help our enemies. We would not wish to reveal any weakness that may help our enemies, which will and does limit what we can release.

The noble Lord, Lord Ramsbotham, referred to “radical change” that had not been discussed by the National Security Council. I had better write to the noble Lord as I have quite a lot of information here that I am not going to be able to read out.

The noble and gallant Lord, Lord Stirrup, asked whether we were spending enough on cyber. The Government have recognised the importance of addressing the cyber threat to the UK and we have established a joint cyber unit of regulars and reserves.

I hope that I have answered most of the questions, but if I have not I will certainly write. I have set out why I do not believe the amendment should be accepted and I ask the noble Lord to withdraw it.

Defence Reform Bill

Lord Lee of Trafford Excerpts

Tuesday 10th December 2013 Lords Chamber

[Lord Lee of Trafford (LD)]

My Lords, I want to focus my remarks on Part 1—the procurement aspects of the Bill. I could almost second the speech of the noble Lord, Lord Levene, on this subject. Let us be quite clear what has happened here. The GOCO horse, carrying the colours of Bernard Gray, has been pulled up. There was, frankly, little backing for this nag within either the civilian or the service sides of the MoD. Unfortunately, the Secretary of State decided to place his bet on GOCO and, frankly, faces some embarrassment today. I refer the House—this was mentioned earlier—to the ministerial Statement of 17 July 2012, which says:

“In the meantime, as resources and commercial appetite constrain our ability to pursue these two options simultaneously to the next stage, we have decided that the Department should focus its effort on further developing and testing the GOCO option”.—[Official Report, Commons, 17/7/12; col. 845.]

So, clearly, the GOCO option was the department’s favourite.

GOCOs are fine in certain circumstances. The noble Lord, Lord Levene, and others referred to the contractorisation of the dockyards. I was involved in that process, and supported it, when I was a Minister at the MoD. However, no other country and, to my knowledge, no other major plc, has effectively thrown in the towel and said, “We cannot handle our buying ourselves”. Huge amounts of civilian, ministerial and service time and at least £12 million have been wasted on this GOCO option. However, in my judgment it is the Treasury that historically carries the prime responsibility for this procurement fiasco through its bone-headed, penny-wise, pound-foolish approach, which over the years has prevented DE&S recruiting top talent from the private sector. It has effectively been emasculated and has proved no match for hard-nosed defence contractors, as was referred to earlier. We were told this afternoon that at present DE&S has 800—I repeat, 800—vacancies. In recent years, it has had to employ very expensive consultants. Perhaps when my noble friend sums up he can indicate just how much the MoD is spending on consultants.

Thankfully the Treasury, under pressure, has now got real and has given certain new freedoms to DE&S-plus. I am sure that we all wish it well. Excellent personnel are already there, as a number of noble Lords mentioned —in fact, all noble Lords who have spoken referred to that aspect. It will be strengthened and augmented, we hope, by top-drawer recruitment from the private sector. However, I must ask, first, whether we are giving DE&S-plus a chance. As the noble Baroness, Lady Dean, said, is it sensible or fair to retain the GOCO option in the Bill, almost as a sword of Damocles hanging over the future DE&S-plus? Is it going to encourage top personnel to give up their careers in the private sector and join this organisation if some future Government in a few years’ time are going to go back to the GOCO option and argument? Secondly, does it really make sense for the morale of this new organisation to have its new chief executive in Bernard Gray, the person who drove the alternative option that clearly has failed and fallen?

I should like to ask my noble friend three or four specific questions to which I should like him to refer in his wind-up speech, or, if not, perhaps he can write to me. First, can we have more details of the freedoms that the Treasury is going to give DE&S-plus? Will there be an additional block of money available to it or is there going to be some sort of limitation on the numbers employed? Is there going to be any maximum salary level? Secondly, what is the duration, if any, of Bernard Gray’s contract with the new organisation? What is his salary going to be? Will it increase or, bluntly, will it be a reward for failure? Thirdly, is the new chairman being brought in going to be an executive or non-executive chairman? Finally, on the question of the GOCO competition, what is the position regarding compensation for the remaining Bechtel-led consortium? Is there any likelihood of significant compensation having to be paid out?

--- Later in debate ---

[Lord Astor of Hever]

My Lords, we have had a constructive and well informed debate on the Bill. I share the generous thoughts of the noble Baroness, Lady Dean, about Lord Gilbert. The debate has shown that there is a large degree of consensus on the need to reform the way in which we manage and deliver our defence capabilities. It is important that we provide our Armed Forces with the equipment and support they need and that we take the appropriate measures to ensure that the Reserve Forces can be used as part of the integrated Future Force structure with individual reserves appropriately protected in their role and their employers better rewarded for the contribution they make in supporting the Reserve Forces.

The measures set out in the Bill represent a real change to how the Ministry of Defence will conduct its business in future. They will allow us to ensure that equipment and capabilities are delivered on time, on budget and to the right specification.

At this point, I am going to cut short my speech as I have been bombarded with questions, and I will try to answer as many as I can tonight. There is no way I will be able to answer all of them, so I will write to all noble Lords who asked questions and copy in other speakers.

The noble Lord, Lord Rosser, and other noble Lords asked why Part 1 should remain if we are no longer proceeding with the GOCO. I am well aware of the mood of the House on this issue. We believe that a GOCO remains a potential future solution for transforming DE&S once we have put in place a more robust baseline from which to contract with a GOCO partner. It would therefore be prudent to have Part 1 in place should a future Administration decide to go the GOCO route. We very much hope that the new DE&S-plus organisation will be robust and successful. We should not be afraid of the competition that potentially testing the market for a GOCO in three to five years’ time would provide. Keeping the possibility of a GOCO would provide an incentive for a new organisation to maximise its performance.

The noble Lord also asked what “at a future date” means in relation to a possible future GOCO. We do not envisage reopening the GOCO option for at least two to three years, certainly not before the next election.

The noble Lord asked how much money has been spent on the GOCO commercial process and whether the Bechtel consortium will now make a claim against the MoD for the money it has spent on the bid. This was also asked by the noble Lord, Lord Davies. We have spent £7.4 million on supporting our work on the GOCO option. The money is not wasted. We have gained valuable insights from this work that have not only helped us understand the commercial landscape but will stand us in good stead for the new organisation. On Bechtel, we have always made it clear that we will not pay bid costs.

The noble Lord asked about the draw-down of regulars prior to build-up of reserves. We have had no choice but to reduce regulars to stay within the budget. The cost of 20,000 regulars is £1 billion a year. In line with the SDSR, there is a drawing down in some areas to build up in others, such as cyber, as the noble Lord knows. This is about doing defence differently.

[Lord Lee of Trafford]

My noble friend has just given an indication of the cost of the GOCO option so far. I draw his attention to a reply to a Written Question I had tabled:

“The Materiel Strategy programme is currently in the Assessment Phase and is considering two options … The Concept Phase of the programme started in May 2011 and analysed a number of different operating models. It concluded with the approval of the Initial Gate Business Case in April 2013 and cost £12 million. The Assessment Phase is currently developing both DE&S+ and GOCO options”.—[Official Report, 18/11/13; col. WA135.]

Perhaps my noble friend might like to look at that.

[Lord Astor of Hever]

My Lords, when I come to answer my noble friend’s questions, I will touch on the assessment phase and come up with some figures which may be helpful to him.

The noble Lord, Lord Rosser, asked for the latest update on recruiting. The quarterly personnel report of 14 November had trained and untrained strength of reserves, inflow and outflow. The Secretary of State will publish recruitment targets before the end of the year. The noble Lord asked about Capita recruitment. We have been very open about the fact that there have been teething problems. The Army and Capita are fixing these. The new website will be up and running in January, and there will be a faster recruitment pipeline. Temporary adjustments have been made to applications to ensure that we continue to progress new recruits. We want to cut out any blockages there.

The noble Lord, Lord Levene, suggested that we stop running down the abilities of civil servants. I agree with the noble Lord and pay tribute to those civil servants in the MoD, who certainly give me excellent advice. The noble Lord asked for a definition of the difference between DE&S and DE&S-plus. This is quite complicated, and I will write to the noble Lord and make sure that all other speakers get a copy of that.

The noble Lord and my noble friend Lord Lee asked why there was no competition for the chief executive post. The simple fact is that the CDM has an extant contract that takes us past 1 April, when the new trading entity will stand up. His post as CDM will morph into the chief executive role. Furthermore, realistically, there would have been no chance of selecting and appointing anyone else in time for them to stand up the new organisation on 1 April. He will also provide a vital thread of continuity from the Gray report into the continuing reform agenda.

Going back to the note that I said that I would write to the noble Lord, I will undertake to do that before the Bill moves into Committee. The note will set out the different models.

The DE&S civilian staff will remain civil servants—a point that the noble Lord raised. Their status will not change. Members of the Armed Forces will continue to make a valuable contribution in DE&S as they do today. We will be able to create a more businesslike organisation which is better able to recruit, reward, retain and manage its staff. In terms of recruiting, we will be using private sector expertise to help DE&S-plus get match-fit, including in terms of its HR transformation.

My noble friend Lord King mentioned the deferral of mobilisation. It is already possible for a reservist or their employer to ask for mobilisation to be deferred. For an employer, one of the criteria for deferral is the impact that mobilisation would have on the business.

I am glad that my noble friend Lady Garden mentioned the cadet debate of a couple of weeks ago. I listened to some of the speeches in this Chamber and was most impressed. I will write to my noble friend about careers advice for cadets. She asked whether there was any skills audit of current DE&S staff. The answer is no, but we undertook a detailed assessment of DE&S business capabilities in the early part of the materiel strategy, which looked at the issue of skills.

The noble and gallant Lord, Lord Stirrup, pointed out that we must focus not just on a single factor as we reform DE&S. We recognise the complexity of defence acquisition, and will continue to do so.

The noble Baroness, Lady Dean, asked about the proportion of regulars recruited to reserves. There are incentives for ex-regulars to join reserves. Those who leave the Army through redundancy are being encouraged to consider a part-time military career in the reserves. For the Army, ex-regulars who enlist into the Army Reserve within three years of leaving regular service can enjoy a number of incentives and benefits, such as reduced Army Reserve commitment and training requirements or, alternatively, a commitment bonus worth £5,000 paid over four years. There is a comprehensive information campaign to ensure that all service leavers, not just redundees, are aware of the opportunities and benefits of joining the reserves.

The noble Baroness asked who is running recruitment; it is Capita, which is working closely with the Army to fix the teething problems. She asked whether tranche 4 redundancies were to be paused. No final decision has been taken on that. Also on the regular to reserve transfer, 459 applications have been made to the commitment bonus scheme, of which 316 were from ex-regular other ranks, 35 from ex-regular junior officers and 108 from direct entry—that is, not ex-regular—junior officers. I understand that this is quite complicated, and I shall write to the noble Baroness and set it all out, copying in other noble Lords.

The noble Baroness asked whether having the legislation in Part 1 would not be a sword of Damocles over the DE&S-plus option. No, we do not see it like that at all. We are constantly striving to improve performance. The innovative structure will move us forward, but the underpinning rationale for a GOCO remains in place and could represent a further evolutionary step. Part 1 being in place will not mean that we have to proceed with a GOCO in future, but it will keep the option open.

My noble friend Lord Lee asked a number of questions. He asked whether a GOCO was the department’s favoured option. When the Secretary of State announced the materiel strategy proposals in June, he was explicit in saying,

“we have not yet accepted the GoCo concept as the chosen outcome; we are conducting an assessment”.—[Official Report, Commons, 10/6/13; col. 54.]

My noble friend asked, as did the noble Lord, Lord West, whether Bernard Gray would resign. No, there is no need for that; what matters is that we drive forward the reform of DE&S. Bernard Gray will do that as chief executive of the new organisation.

My noble friend asked whether the chairman of the new organisation’s board would be executive or non-executive. The answer is non-executive; we will have strong oversight of the new organisation. We were asked how we would recruit the new people. We will use the private sector expertise that we plan to bring in through business partner contracts to help us to deliver a transformed HR. This will include getting the best out of freedoms that we have agreed with Her Majesty’s Treasury and the Cabinet Office, which are necessary for the new DE&S.

My noble friend mentioned Her Majesty’s Treasury. We have agreed with the Treasury and, indeed, the Cabinet Office that we must have freedom to be able to operate effectively. We are confident that we will get these. It is one of the reasons that we are setting this up as a bespoke entity. How much have we spent so far on this? I gave the figure of £7.4 million to the noble Lord, Lord Rosser. We have spent some £17.8 million on the assessment phase of this complex change programme to determine the best way to deliver what we need. This investment, which excludes the cost of MoD staff, has included work on the GOCO, the DE&S-plus option, and on the necessary changes to the customer.

My noble friend asked how much we have spent on consultants. The MoD spent £68 million on consultants in 2012-13. Going back to the freedoms, we do not yet know details of these, but they will be significant. Her Majesty’s Treasury recognises the need for significant freedoms around salary for DE&S-plus. I will write to my noble friend when I have more information. This is obviously a very important issue and I will copy in other noble Lords on it.

My noble friend asked about Bernard Gray’s salary, as did the noble Lord, Lord Davies. I understand that Bernard Gray will continue on his existing terms, but I cannot confirm that today. His current salary is around £220,000 per annum. My noble friend asked whether the potential GOCO competition would make it harder to recruit from the private sector. This is simply not the case. Those we are trying to recruit would see GOCO as an opportunity, not a threat.

The noble and gallant Lord, Lord Craig, asked about ministerial notification and early availability. It is important that Ministers oversee a call-out. We will seek to provide employers with as much notice as possible and arrangements already exist for high-readiness reserves who can be mobilised at short notice. I will write to the noble and gallant Lord on this issue.

My noble friend Lady Doocey asked about mental health and housing. I have very detailed answers but, rather than test the patience of the House tonight, I will write to my noble friend on those matters. I have a very full answer that I think she will be happy with.

The noble Lord, Lord Davies, made a very political speech and asked whether the potential GOCO contract would make it hard to recruit from the private sector, as did my noble friend Lord Lee. We do not believe that is the case. The people we are trying to recruit would see GOCO as an opportunity, not a threat. The noble Lord asked whether there was a special deal for Bernard Gray. His role will continue beyond 1 April on his existing terms and conditions. He provides a vital link between the work done so far and the new organisation.

The noble Lord, Lord Tunnicliffe, gave me sight of his questions. I can confirm that legislation is not required to establish the bespoke entity that we announced today. However, legislation is required to establish an effective GOCO and that remains a possible future option. If we do not have the legislation in place then, that could inhibit a future competition.

We still have to work out the detail of specific freedoms and authorities. However, as I said, the Treasury and the Cabinet Office have been working with us to ensure that this innovative structure will be permitted significant freedoms and flexibilities. I have already undertaken to write to noble Lords on this very important issue.

DE&S civilian staff will remain civil servants—their status will not change—and members of the Armed Forces will continue to make a contribution to DE&S, as they do today. We will be able to create a more businesslike organisation which is better able to recruit, reward, retain and manage its staff.

The Bill provides the legislation we need to make far-reaching changes to the way in which we deliver our defence capabilities. The changes set out will not only improve the support we give to our Armed Forces but make specific improvements for reservists and their employers, who are an integral partner in enabling the Reserve Forces. The measures in the Bill will also help to ensure that the taxpayer gets value for money. We must not miss this opportunity to make essential changes to the way we manage and deliver defence in the future. I therefore commend the Bill to the House.

Bill read a second time and committed to a Grand Committee.

Defence: Procurement

Lord Lee of Trafford Excerpts

Thursday 21st November 2013 Lords Chamber

Asked by

[Lord Lee of Trafford]

To ask Her Majesty’s Government, in the light of the withdrawal of a private-sector bidder from plans to manage defence procurement through a government-owned, contractor-operated organisation, whether they have any plans to close off that option.

[The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever) (Con)]

My Lords, a review is under way to assess two options—a government-owned, contractor-operated entity and a transformed DE&S+, remaining in the public sector. We remain convinced that we absolutely must change our process to deliver the best value for money for the taxpayer and enable the right equipment and support to be delivered on time for our Armed Forces. The status quo is simply not acceptable.

[Lord Lee of Trafford (LD)]

My Lords, is the reality not that the GOCO competition concept is now totally dead in the water? It is quite impossible to run a competition with just one bidder. The very fact that this one bidder, the Bechtel consortium, has a bid in of 1,200 pages surely draws attention to the manifest absurdity and complexity of the bid process.

This concept has been driven through by Bernard Gray with very little support in MoD and the services; should not he now, in the circumstances, given that it has collapsed, consider his own position and consider resigning? But is not the real culprit the Treasury, whose bone-headed attitude over the years has restricted the MoD in employing the quality of people from the private sector, bringing in private sector disciplines, to handle and manage our £14 billion procurement budget properly? So is not DE&S+ the answer, as supported by many noble Lords, including the noble Lords, Lord Levene and Lord West, who sadly cannot be here today?

[Lord Astor of Hever]

My Lords, on my noble friend’s first point, the very fact that one commercial bid team has submitted a bid shows that it believes that there is a potential deal and it can deliver against requirement. We have always known that running a defence acquisition would be challenging, which is one reason for testing through the assessment phase whether it can be done. As for my noble friend’s second point, he is right to recognise the specific needs of defence acquisition and support personnel to match the professionally motivated defence industry. That is why we are very clear that, whatever option we choose, we will need to work with colleagues across relevant departments to put in place the necessary freedoms of operation to provide our Armed Forces with the right kit at the right time and deliver the best value for money for the taxpayer.