Defence Reform Bill

Martin Horwood Excerpts

Tuesday 29th April 2014 Commons Chamber

[Martin Horwood (Cheltenham) (LD)]

I cannot let the Minister’s comments pass without welcoming them and thanking him for them, and, in particular, expressing the sympathy of the Liberal Democrat parliamentary party and its researchers and staff following the loss of their friend, who displayed great courage and died in the service of his country.

[Mr Dunne]

I appreciate and reciprocate that sentiment.

Let me now deal with the Lords amendments. They deal with all three elements of a Bill that introduces a new and significantly stronger regime for the management of single-source contracts, and makes important legislative changes that will enable us to modernise and make better use of our reserve forces. There is a great deal of support for those measures in all parts of the House, as was evident when we discussed all its previous stages here. The Bill also includes the measures that are needed to help an effective Government-owned contractor-operated organisation to manage defence equipment and support should a future Government decide to proceed with such an option. I shall return to that shortly.

These are all Government amendments, which were made following detailed consideration of the Bill both in this House and in the Lords. Although they deal with different parts of the Bill, they have a common theme: they either provide Parliament with further information relating to the implementation of defence policy, or strengthen parliamentary oversight of future legislation. That, I think, is right, and it reflects the Government’s commitment to ensuring that Parliament has a greater role in the scrutiny of the Executive. The amendments demonstrate that we have listened to the concerns that were raised about issues covered by the Bill, particularly in the other place, and that we have responded accordingly.

Lords amendment 6 fulfils a commitment given on Report in this House, on 20 November, to make it a statutory requirement to report annually on the state of the reserve forces, while Lords amendment 7 reflects the debate in the other place about parliamentary involvement in any future decision to proceed with a GoCo proposal requiring the provisions in part 1 of the Bill. The amendments will strengthen the parliamentary oversight of future defence plans, and I hope that they will be widely welcomed.

Lords amendments 1 to 5 relate to part 2, which concerns single-source procurement. They were made in response to the Delegated Powers and Regulatory Reform Committee’s report on the Bill, which was published on 20 December last year. I am grateful to the Committee for its report, and for the excellent work that it does in ensuring that any proposed delegated powers are appropriate.

The Committee recommended that the first set of single-source contract regulations should be debated and agreed by Parliament. It also recommended that certain of the regulations—namely those relating to the definition of a qualifying defence contract and to the penalty amounts applied under clause 32 of the Bill—should always be subject to the affirmative procedure. Those recommendations are reflected in Lords amendment 5, and Lords amendments 1, 2, 3 and 4 make the necessary consequential changes that arise from that amendment.

Lords amendment 6 would require reserve associations to report annually to the Secretary of State on the condition of the volunteer reserve forces, and for their reports to be laid before Parliament. The reports would include the associations’ assessment both of the capabilities of the reserve forces, and of the provision made in relation to the mental welfare of their members and former members. The amendment delivers on the commitment given by my right hon. Friend the Secretary of State on Report in this House last November. Members will recall that we had a substantial debate at that stage, initiated by my hon. Friend the Member for Canterbury (Mr Brazier)—it is good to see him in the Chamber—about the state of our reserve forces, and the need to report regularly to Parliament on the issue. The amendment enshrines in law the requirement to produce such a report.

Members may be interested to know that on 10 April I had the privilege of attending the West Midlands Reserve Forces and Cadets Association annual dinner. Their knowledge and enthusiasm for the reserves was palpable and I am glad we will have such expertise reporting to the Secretary of State on an annual basis as a result of this amendment.

At the dinner, Defence’s most senior reservist, Major General John Crackett, spoke eloquently and persuasively of the reservists’ contribution to our nation’s defence in the past century and the importance this Government have attached to revitalising and expanding the reserves during this century.

Last weekend’s helicopter crash, which unfortunately I have already had to refer to today, underscores the fact that, tragically, 31 reservists have paid the ultimate price in the service of their country since 2003.

--- Later in debate ---

[Mr Brazier]

We do not have the detail, but we do know that there is now more flexibility on people and in other crucial areas, such as the annuality of budgets, which are extremely important for running an operation such as procurement.

I want to leave one thought on procurement. Some 25, 26 or 27 years ago, when working as a management consultant, I was privileged to take part in a study comparing the procurement methods of seven different countries. Our procurers in the then procurement executive—it has changed its name several times since—were at least as good as the average and arguably better. The majority of the problems in the system fell into one of two categories. Either the customer within MOD changed its mind or was unclear about its needs, or things were laid down from outside, some of which appear to be being addressed. As a result of the unsuccessful attempt to create a GoCo, we have ended up with a better outcome than we would otherwise have had.

I support all the Government’s amendments and I am pleased that the hon. Member for Plymouth, Moor View is with them, too, although she has indicated one area in which she would like to go further.

I of course knew when my right hon. Friend the Secretary of State made his pledge on the reserves that it would be honoured. However, not only has it been honoured exactly, but the Government’s wording of the clause is better than I originally proposed and has been well thought through. They particularly thought through the complicated federal nature of the reserve forces and cadets associations. The clause deals neatly with a problem, which I hope will never occur again but happened some 15 or 16 years ago, when the centre got out of touch with its regional branches. Leaving the real power with the regional branches, which are elected, covers that issue nicely. Parliament will get a good report whatever happens. I am grateful to the Government for agreeing to the proposal and to the Members on both sides of the House who supported the original measure.

I end by saying—I hope that you will indulge in me in this, Madam Deputy Speaker, because, strictly, it is beyond the amendment—that when we originally debated the matter in the House, there was great concern about recruiting for the reserves. I expressed the view that it had been seriously mishandled under the new assimilated structure controlled by the Regular Army. I also expressed confidence in Major General Chris Tickell, who had taken over.

Since then, things have moved a long way. My local TA infantry battalion got as many soldiers in January and February as it did in the previous 10 months. That is still only two thirds of what it needs if it is to grow, rather than just tread water, but it is a huge step forward. Today it has eight young officers under the age of 30, whereas a couple of years ago it had only two or three.

I firmly believe that things will move in the right direction, but I think that the steady hand on the tiller of this annual report from the RFCAs, which really do get it, will play a profound role, and I am grateful to the Government for giving way on that. I support all the Lords amendments.

[Martin Horwood]

It is a pleasure to follow the hon. Member for Canterbury (Mr Brazier), who displays great knowledge of these issues. I am sure that the friends and family of Oli Thomas will very much appreciate the comments that have been made across the House, as I am sure will my hon. Friend the Member for Brecon and Radnorshire (Roger Williams). He would have been here at the beginning of the debate to respond to the Minister’s comments had the expected times for votes not changed rather suddenly. I hope that people will understand that. I am sure that all Members across the House would wish to express their sympathy to the friends and family of all the servicemen who lost their lives in that terrible accident.

I welcome the Lords amendments, which I think strengthen Parliament’s role in scrutinising the implementation of defence policy, which is very important. I know that several of my noble Friends had concerns about the process of building up the new reserve force and about the technicalities of the GoCo idea. It is very welcome that the Government have been open-minded enough to bring forward their own amendments to reflect those concerns and increase parliamentary scrutiny.

On the volunteer forces, we have an ambitious plan to change the whole chemistry and make-up of our armed forces. I think that will leave us with armed forces that are more flexible, more light-footed and more cost-effective, and in a time of genuine austerity that must be borne in mind. On the concerns that have been expressed on both sides of the House about exactly how well that will work, whether it is too ambitious and whether it will at some stage pose unexpected challenges, I think that it is right to have this extra level of parliamentary scrutiny over the process, so Lords amendment 6 is extremely welcome.

Lords amendment 7, which relates to the GoCo, now seems slightly academic, given that we are unlikely to see any proposals for a GoCo in the near future. However, were such a proposal to come forward at some point, I think that it is important to have the safeguards in place to ensure not only that a draft statutory instrument is laid before the House before the actual order is laid, but that we have the report beforehand on alternative options and impact assessments for each one.

In tabling amendment (a), the hon. Member for Plymouth, Moor View (Alison Seabeck) is perhaps trying to gild the lily. I think that she is trying to conjure some mild controversy out of what is now a consensus on the issue. She said that she had remaining concerns about wholesale outsourcing, but of course that is only about the outsourcing of outside supplies, so it does not really change anything in that respect. It is only about whether in future that outsourcing is managed directly by a Government agency or by a more independent and commercially orientated organisation.

Many of us have expressed doubts about that idea. I expressed doubts on Second Reading about whether we should have yet another tier of decision making in between the armed forces and the actual decision-making process and the eventual supplies. However, I think that the formula we have come up with, whereby the different options will be re-examined at the time any such proposal comes forward, is a good one. We would not normally insert another 12-week time scale into legislation of this kind, so I am not sure that that is absolutely necessary, but I appreciate the spirit in which the amendment was moved.

I think that the Lords amendments have made a good Bill even better. I join the consensus on both sides of the House in this good-natured debate by saying that this is the right Bill to bring forward at this time.

[Mr Dunne]

With the leave of the House, I shall make a few closing remarks. I know it is not conventional to do so, but I have been challenged in customary fashion by the hon. Member for Plymouth, Moor View (Alison Seabeck) with a number of questions, and it is right that we put some answers on the record.

The first question that the hon. Lady posed was a technical one about whether the framework of part 2 had been approved by the RPC. We approached the Better Regulation Executive in the Department for Business, Innovation and Skills, which confirmed that in its view part 2 did not constitute regulations of the type that ought to be considered by the RPC or the reducing regulations committee. We therefore did not do so.

The hon. Lady also asked whether in the strategic defence review in 2010 there was some strategic basis for arriving at the force composition of regulars and reservists. As she will know, I was not in post at that time, so I cannot give her my personal recollection of those discussions. It is undoubtedly the case that the fiscal situation that not only the country faced but our Department inherited—the £38 billion black hole in unfunded commitments—played a part in determining dispositions, but the main drivers of the force composition were set out at the time of the SDSR—namely, the unpredictable strategic environment and the need for an agile and adaptable force structure. The force structure that we ended up with, we believe, will enable us to meet the unpredictable strategic environment in future. It also moves UK armed forces closer to the force structures in place among many of our closest allies, so we do not think it is out of line with our main partners and allies.

The hon. Lady touched on reserves and the status of reserve recruiting, which was mentioned by my hon. Friend the Member for Canterbury (Mr Brazier). I thank him for the anecdote he gave us about the growing youthfulness of officers and the growing numbers of recruits that he referred to. I am not in a position to give the House detailed figures at this point, but applications are running significantly higher than average applications in months last year, which is an encouraging sign. We are making good progress in increasing the conversion rate from applicants to trainees. That is also an encouraging sign. I would not like to give the House the impression that we do not recognise that we have a considerable way to move in raising both the number of applicants and that conversion rate.