Defence Reform

Nick Harvey Excerpts

Tuesday 26th June 2012 Commons Chamber

[The Minister for the Armed Forces (Nick Harvey)]

Let me start as the hon. Member for North Durham (Mr Jones) did—by paying tribute to the men and women of our armed forces. The job they do is difficult, dangerous and sometimes deadly, but they do it with a professionalism, commitment and courage that we have come to expect but should never take for granted. This weekend is armed forces day, which will give all of us the opportunity to pay tribute to the contribution of the entire defence community.

The House will note that we do not have the pleasure of the company of the shadow Defence Secretary this evening. No criticism attaches to him for going on a defence visit to Australia or for staying on for a few days afterwards. No criticism attaches to him for allowing the Secretary of State to honour a commitment to host Defence Ministers from several of our allies this evening. The only criticism of the shadow Secretary of State is that he has left the poor old hon. Member for North Durham the unenviable task of trying to move this completely nonsensical motion.

[Mr Kevan Jones]

The Minister is correct that the shadow Secretary of State is in Australia—unfortunately with the hon. Member for Devizes (Claire Perry), but I understand that they did not travel on the same plane so that is one good thing for him. He has stayed on after the defence visit because a member of his family there is seriously ill. That is why he is not here today.

[Nick Harvey]

I am sure we all wish the family member well. I did say that no criticism attaches to the shadow Secretary for his absence and I mean that most emphatically.

The matter before us is this nonsensical motion. It seems to say that the Opposition recognise the need to make the changes we are making, but the fact is that they ducked these changes year after year. They went for 12 years without a defence review, with pressure building up in the defence programme all the time, and there was a black hole of whatever size—we will come back to that in a minute—by the time of the strategic defence and security review. They left our armed forces overstretched, under-equipped and underfunded for the tasks they were set. That is the legacy of the Government in which the hon. Member for North Durham served. The blame for the need to remove platforms, reduce manpower and make the other reductions we have had to do sits very squarely at the previous Government’s door. They wrecked the economy, they wrecked the defence budget and they failed to make the changes necessary to prepare our armed forces for the future.

The hon. Member for North Durham made heavy weather of the black hole. When we began the SDSR process in the summer of 2010 we asked the officials who were presiding over it at the MOD, “What is our baseline and what is the true financial situation as we start this process?” The explanation came that if we took the manpower commitments, all the overheads and all the committed expenditure, including the contracts that had been signed for procurement and those that had been announced by the previous Government as Ministry of Defence policy, and planned to bring them on stream when the Labour party said they would be, over the 10-year period, there was a gap between all that and a “flat real” terms assumption on funding—not a “flat cash” assumption—in relation to the 2010-11 budget. We were told that the gap over the 10-year period would amount to £38 billion. It was a 10-year period because that is the length of time over which the MOD plans its budgets.

The hon. Member for Bridgend (Mrs Moon) said that that was an unreasonable thing to view as a starting point. She compared it with the situation of someone who was about to go personally bankrupt aspiring to buy a Ferrari, but I do not think that is very kind to the right hon. Member for Coventry North East (Mr Ainsworth). When he came to the Dispatch Box a few weeks before Christmas in 2009, he announced that there would be 22 new Chinook helicopters. He did not sign a contract or find the money to pay for them but he announced there would be 22 new Chinook helicopters. I do not know whether in the fantasy budget of the Labour party it does not think that that was a commitment, but it was one of the commitments that that Defence Secretary made, and it was on that basis that the £38 billion black hole was presented to us by officials.

I do not call into question the personal commitment of the hon. Member for North Durham, but he has to recognise that his motion opposes everything that this Government are doing and is pretty scant when it comes to proposing any alternatives. He says that he recognises the need for defence reform, but the only response in his motion is to be concerned, “anxious” and “worried” about how we are clearing up the mess he made. He has not presented one properly costed plan or given us a coherent alternative. He has not given us a plan A, let alone a plan B. He needs to recognise that he has to do better if he wants to hold us to account for what we have done.

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

Does the Minister think the decision he has just criticised was better or worse than switching to a “cat and trap” system when first coming into office and then reversing that decision at great cost only a year later?

[Nick Harvey]

I think it was a perfectly sensible alternative to explore the “cat and trap” option. As we said at the time, it would have given us the ability to project a much better aircraft type off the carrier. I think that to commission the detailed work on that proposal was entirely responsible. If it ends up costing us the maximum, as the Secretary of State suggested, of £100 million, that is a small sum compared with the £1.5 billion the previous Government added to the carrier project in one afternoon, when they announced from the Dispatch Box that it was to be postponed by a year. That was a far greater drain on the defence budget than the relatively small bounded study, which unfortunately concluded that the costs of going ahead with the plan were such that it was not viable.

The shadow Defence Secretary has identified £5 billion of cuts that he says he supports, but that would barely scratch the surface of the black hole that his party’s Government left behind. Of course, his cuts are not new; they are already being made. On Labour’s current public plans, the defence budget would still be in chaos. They have pledged neither to make any extra savings, nor to restore the cuts that have been made. What is interesting is not what they are saying in public, but what they are saying in private. Earlier, reference was made to the interesting correspondence between the Leader of the Opposition and the shadow Defence Secretary. It is worth quoting the letter from the Leader of the Opposition to his colleague, dated 23 January this year:

“You have powerfully made the case in your recent interventions that there is no easy future for Defence expenditure and clearly in the context of the current fiscal position we can expect to have to make further savings after the next election.”

In public, the Opposition are against the cuts that we are making, but in secret, they are planning even deeper defence cuts. Today’s debate is not simply opposition, but opportunism as well.

[Mr Kevan Jones]

We said that at the last general election. What we were not going to do is rush the process. I challenge the Minister of State to place in the Library of the House the details of how he arrived at the £38 billion figure. Today he has said something that no other Minister has ever said: that the £38 billion is over 10 years. The impression has always been given that it is there right now. Will he produce that information? Without it, some of the cuts he is making are not credible.

[Nick Harvey]

That is absolute nonsense. It has been clear from the outset that the £38 billion figure was over 10 years. I remember many a debate with the shadow Defence Secretary about whether we were talking about the 10 years being measured out on the spending side in flat real or in flat cash, and I have said again tonight that it was by reference to flat real. It has always been a 10-year figure, and the suggestion that we have magicked £38 billion out of spending in two years is clearly nonsensical; it has always been over 10 years. I am happy to give the hon. Gentleman further details of how we worked that out, but there is no getting away from the fact that the Labour Government left behind a massive black hole. The right hon. Member for East Renfrewshire (Mr Murphy) has identified a tiny number of cuts that he thinks need to be made and he has secret plans to make more, but he is not prepared to face up to the difficult decisions that have to be made to clear up the economic inheritance across the piece and specifically in defence.

Transforming Britain’s armed forces by implementing the 2010 SDSR is necessary to recover capabilities after a decade of enduring operations. It is necessary to prepare the armed forces for a future in which threats are diverse, evolving and unpredictable. It is necessary to help to tackle the fiscal deficit and to put the defence budget and equipment plan back into balance. We have to build for the future with strict financial discipline, making certain that the armed forces have confidence that projects in the programme are funded and will be delivered. As my right hon. Friend the Secretary of State announced last month, the black hole has now been eliminated and the 10-year defence budget is now in balance. I readily acknowledge that Future Force 2020 will be a smaller fighting force, but it will still be able to deploy a brigade-sized force on a sustained basis on operations, or a divisional-sized force on a best effort.

There was much criticism from the hon. Member for North Durham because we have had to reduce manpower numbers, but it is worth noting that in the memo the Opposition defence team sent back to the leader of their party, they said, in reference to Royal Navy and Royal Air Force personnel, that they recognised that there would be reductions in personnel numbers. On Army restructuring, too, the memo stated that they recognised the need for manpower reductions. So they recognise the need for the measures we are taking; they just do not like the grim reality of having to do it.

Despite all the changes that we are making, we will still be supported by the fourth-largest defence budget in the world, meeting our financial responsibilities to NATO. We will configure the armed forces for a world where threats to our homeland and allies are increasingly to be found outside Europe, rather than on the north German plain, and we will move from a heavily armoured force to a more mobile, adaptable and deployable force.

[Mr John Baron (Basildon and Billericay) (Con)]

My hon. Friend is right to take no advice from the party that, when in government, more than doubled the national debt, but may I pursue the point about recruitment and downsizing the British Army? Reports suggest that 2nd Battalion the Royal Regiment of Fusiliers is to be axed, despite being one of the best recruited battalions in the British Army and forecast to remain so. Does the Minister accept that decisions about which battalions to axe should be based on the ability to recruit? In that case, the Ministry of Defence should be looking at the Scottish battalions, which consistently have trouble recruiting, with their numbers made up by English soldiers. I would suggest that no Englishman should ever be forced to wear a kilt.

[Nick Harvey]

I urge my hon. Friend and all other hon. Members not to give credence to speculation about which battalions might end up having to be disbanded or merged. I repeat what I said at Defence questions: the decisions will be taken on the most objective criteria, not on a snapshot of current recruitment. Those criteria will be ensuring that we get the right balance of forces for the future, that we maximise our operational output and that we have the right geographical spread across the country, and that our long-term ability to recruit is assured.

[Jim McGovern (Dundee West) (Lab)]

My grandfather, Hugh Macdonald, served gallantly in the Black Watch and is buried in the military cemetery in Gibraltar, where he died in 1941. I am sure that he was proud to wear a kilt. There were Englishmen serving in the Black Watch then and now—indeed, the Liverpool Scottish part of the Black Watch comes up to Dundee every year. Can the Minister of State give my constituents and serving members of the Black Watch some sort of assurance that, on his watch, there will always be a Black Watch?

[Nick Harvey]

I can give the hon. Gentleman the assurance I have just given the House: the decisions to be taken will be objective decisions against the four criteria that I have just set out. No one should give in to the temptation to believe what they read in the newspapers.

[Pete Wishart]

Scotland is suffering badly from what is happening in defence spending. Only four of the 148 major Regular Army units are based in our territory. That represents 2.7% of the entire British Army, yet we have 8.4% of the population. Why is Scotland doing so badly when it comes to defence cuts and defence spending?

[Nick Harvey]

I do not accept either the analysis or the figures offered by the hon. Gentleman. Scotland does well out of defence, and defence does well out of Scotland. We plan our defences for the defence of the United Kingdom as a whole in the most coherent way we can, and Scotland will do a great deal better out of being part of the UK’s defences than it will ever do if it goes on its own and plans its own defence force.

[Mr Jenkin]

There is speculation that the process is being elongated, perhaps over a number of months, because of political considerations. Does my hon. Friend accept what a large number of armed service men and women are saying—that uncertainty is extremely corrosive, damaging and morale sapping, and the sooner these decisions, however difficult and unpleasant they are, can be made, the better?

--- Later in debate ---

[Nick Harvey]

I agree. Uncertainty always has a destabilising effect. I can assure my hon. Friend and the members of the armed forces that they will not have long to wait. However, it is more important that we get this right than that we do it quickly. These decisions are a once-in-a-generation rebalancing of the Army’s structure. If we get it wrong, the Army will suffer the consequences for decades to come, so it is important to take a little time and get it right. The House will not have long to wait for announcements to be made.

[Richard Drax (South Dorset) (Con)]

We hear reports that people are being targeted for redundancy and will therefore not qualify for their full pension. Is that correct? If it is, will the Government look kindly on those affected?

[Nick Harvey]

Let me say first to my hon. Friend that the issue of disbandment of battalions, which we were just discussing, and redundancy have nothing to do with each other, so nobody should read into the decisions that are taken about particular battalions that members of those battalions will be made redundant. In answer to the specific question that he puts, nobody has been selected on the basis of their proximity to a retirement date, but inevitably it is the case that where there are lines, some unfortunate souls will fall just the wrong side of the line. It is a matter of great regret, but the redundancy payments will in any case be bigger than the lump sums that those personnel would have received at retirement.

[Dr Murrison]

In making the very difficult decisions that my hon. Friend undoubtedly will have to make in the near future, what attitude does he have to the very gallant men and women from countries other than the United Kingdom who serve in our armed forces? How does he imagine they will be affected by the redundancy programme?

[Nick Harvey]

In no way will they be singled out. These decisions are being made in the most objective and scientific way we can make them, but inevitably some who serve from overseas will be affected and others will be more fortunate. There is no getting away from that.

Some of the reductions that are to take place will be accounted for by reduced recruiting and fewer extensions of service, but as I said, a redundancy programme is, sadly, inevitable to ensure that the right balance of skills is maintained across the rank structures. Compulsory redundancy will not apply, as we have made clear from the outset, to those in receipt of the operational allowance, those within six months of deploying, or those on post-operational tour leave following those deployments. In all cases it is for the individual service to determine how the necessary reductions can be achieved and over what timeline, making sure that the right mix of skills, experience and ranks are retained.

The main programme for the Royal Navy and the RAF have been concluded, but protecting the Army’s contribution to Afghanistan has meant that two further tranches are still to come for the Army. We will, as I said, make an announcement on Army 2020 very shortly, which will provide clarity on the future structure of the Army. We will have a land force of 120,000, composed of a Regular Army of 82,000, plus 30,000 reserves and an 8,000 training margin. An Army of this composition will have to be structured differently, and it is impossible to do that without losing and merging some units.

Although we cannot avoid difficult decisions as the Army gets smaller, we will seek to do this in the most sensitive way possible, respecting the traditions of the Army, respecting the traditions of our great regiments, but always recognising that military effectiveness must be the first requirement in designing our future structure.

[Mr Julian Brazier (Canterbury) (Con)]

I commend what my hon. Friend has just said. When we think about which TA regiments to keep, which to lose and where to put them, I urge him to bear in mind that a unit in the Territorial Army cannot be moved more than a very small distance without losing the people. It is even more critical than in the Regular Army to pick those that have an officer and soldier base that is well recruited; many units do not have such a base. It is vital that we build on the best ones.

[Nick Harvey]

My hon. Friend makes a good point, which is being taken into account as these difficult decisions are made.

The current financial situation makes it difficult to act as swiftly as we would wish to address some of the issues that make day-to-day life that bit more difficult for personnel and their families. Mention was made of the pause we have had to make on major housing upgrades, but thankfully the £100 million additional investment in accommodation that was announced in the Budget will deliver more than 1,000 new and refurbished single living and service family accommodation units. That will help the MOD to continue to meet its commitment, set out in the armed forces covenant, only to allocate homes that are standard 2 or above.

On the issue of the covenant, I start by recognising the important work done by the hon. Member for North Durham, along with the right hon. Member for Coventry North East, in preparing the ground for the publication of the tri-service armed forces covenant in May last year, which built on many of the suggestions in their Command Paper. We have been able to double the operational tax-free allowance and we have improved rest and recuperation. Council tax relief has been doubled twice since the Government took office, and now stands at nearly £600 per person for a six-month deployment. In health care, we are investing up to £15 million in prosthetics provision for personnel who have lost limbs during service, extended access to mental health and increased the number of veterans’ mental health nurses.

On education, we have set up scholarships for bereaved service children, provided financial help for service leavers who want higher and further education, and introduced the pupil premium for the children of those currently serving, making extra funds available for state schools with service children. More than 50 councils have signed up to the community covenant scheme with another 47 planning to do so, and there is a £30 million grant pot to support that. However, there is a long way to go.

For the first time, the armed forces covenant has been formally published and recognised in legislation, and we are working across Government to ensure that no disadvantage is faced by armed forces personnel, their families and veterans compared with other citizens.

Ever since the publication of the SDSR, the Opposition have been calling for another SDSR. They went 12 years in government without one, but they now seem to want another one every time the wind blows. We have put in place a system for regular strategic review through the National Security Council, and preparations for the SDSR of 2015 are already under way in the MOD. However, none of the strategic assumptions underpinning the 2010 SDSR have significantly changed, so we will press ahead with the implementation of the SDSR based on formidable, adaptable and high-tech armed forces, built on balanced budgets and supported by an effective and efficient MOD, taking the tough decisions that the previous Government ducked, providing our armed forces with the tools they need to do the job we ask of them, upholding the armed forces covenant, and protecting this country’s national security, which is the first and foremost duty of any Government.

[Several hon. Members]

rose—