Oral Answers to Questions

Debate between Nick Smith and Peter Luff

Monday 11th June 2012 Commons Chamber

[Peter Luff]

As a good Unionist, I must emphasise that the carriers are being built by the United Kingdom, and that many English yards, as well as Scottish yards, are making a fine contribution to these outstanding ships. The best thing that I can say to my hon. Friend is that it is two thirds of a century since the United Kingdom built a warship outside the UK—that happened during the second world war—so the facts speak for themselves.

[Nick Smith (Blaenau Gwent) (Lab)]

The Telegraph conservatively says that it is £250 million, but can the Minister say how much the bad decision to proceed with the F-35C cost? Surely this should include the costs of carrier conversion, too.

[Peter Luff]

I can confirm what my right hon. Friend the Secretary of State has said on many occasions: as of the end of April, we had committed £39 million on conversion studies and a further £1 million on an air-to-air refuelling study. We do not think that the money has been wasted. Changing the variant was considered the best course of action under the SDSR, and these costs were necessarily incurred.

Oral Answers to Questions

Debate between Nick Smith and Peter Luff

Monday 20th February 2012 Commons Chamber

[Nick Smith (Blaenau Gwent) (Lab)]

19. What recent assessment he has made of the cost of the UK carrier programme.

[The Parliamentary Under-Secretary of State for Defence (Peter Luff)]

The overall cost of the Queen Elizabeth-class aircraft carrier programme is continually informed by the conversion development phase, which is developing a much greater understanding of the costs and risks involved. We will publish the findings as soon as we can and will keep the House informed in the usual manner.

[Nick Smith]

May I press the Minister to say what will be the total project cost after converting the carriers for the carrier variant aircraft? If he cannot tell us—and it does not look as though he can—does he recognise that that is a worrying, unfunded liability?

Ministry of Defence (Procurement)

Debate between Nick Smith and Peter Luff

Wednesday 19th October 2011 Westminster Hall

[The Parliamentary Under-Secretary of State for Defence (Peter Luff)]

I join the hon. Member for Plymouth, Moor View (Alison Seabeck) in welcoming you to the Chair, Mr Hood. I am grateful for the opportunity to serve under your excellent chairmanship. We have been on various defence expeditions together and have enjoyed them greatly, and it is good to be here today.

I agree with what the hon. Lady said about the paucity of defence debates, and of defence procurement debates in particular. I commented on that fact about two or three weeks ago in the Department, and since then there have been two Adjournment debates, so we sometimes get what we wish for. Let us hope that there are more such debates, because it is very good for hon. Members to discuss these issues.

I congratulate my hon. Friend the Member for Sittingbourne and Sheppey (Gordon Henderson) on securing this important debate, which, according to my script, relates to a number of interesting and pertinent issues. I will go further in saying that there is a bewildering range of interesting and pertinent issues that cover everything from the price of beer in messes to the nuclear deterrent. The underlying philosophy behind defence procurement is underneath all that. I may not be able to do justice to all the remarks that have been made during this debate, but I will do my best.

Reflecting on what my hon. Friend the Member for Gosport (Caroline Dinenage) said in her contribution, I pay tribute to all those who serve in our armed forces. Their courage and bravery enable the Government to fulfil their first and primary duty of providing security for our country. That duty remains ever more challenging given the complex nature of the threats that we face in the 21st century. Although, procurement—or acquisition as it is called these days—is an important part of that, it is simply a means to the end of helping those brave men and women serve their country, as they are doing right now as we speak, in two theatres.

The hon. Member for Blaenau Gwent (Nick Smith) mentioned the strategic defence and security review, which sets out a coherent path to delivering adaptable and flexible armed forces. It is crucial that we put in place the right technologies, skills and industrial capability to deliver that outcome. I do not recognise his description of the lack of scrutiny of MOD contracts. If anything, we suffer from an excess of scrutiny. The Public Accounts Committee and the National Audit Office do an excellent job. We will soon have the next NAO report on major projects to consider, too.

[Nick Smith]

I made that remark because an NAO report mentioned the weakness of the Government’s feedback on that particular topic.

[Peter Luff]

It does not feel like that from this side of the fence. I look forward to the conclusions of the PAC on the forthcoming NAO report.

I accept that we need to be clear about how we plan to acquire and support our equipment for the armed forces, which is a point that my hon. Friend the Member for Gosport mentioned. The support costs are typically about two thirds of the total acquisition cost, with one third being the initial acquisition. We also need to be clear about how we invest in technology to sustain the skills of the defence industry, which is something that the hon. Member for Islington North (Jeremy Corbyn) raised. That was about the only thing that I agreed with in his speech.

The scale of what we spend is huge; the total spend for the whole range of procurements in the financial year 2009-10 was £20.6 billion. It is right that hon. Members should be concerned about how we spend that money. It is also right that we should say that much of that is spent very well, very wisely and very effectively by skilled and talented people. It is inevitable that we concentrate on the problems, because that is the nature of Parliament and holding the Government to account is what we do. None the less, I pay tribute to all those who do their jobs remarkably well, whether they are in the armed services, the civil service, the MOD Abbey Wood or the organisation Defence Equipment and Support. They all do a great job serving our nation.

It is true that we face some difficult decisions. I will not score any partisan points by talking about our economic inheritance, and especially the inheritance for Defence Ministers, from the previous Government. In a characteristically thoughtful and articulate speech, my hon. Friend the Member for New Forest East (Dr Lewis) spoke about the need for fixed points in programmes for decisions. As he said, such a measure is important given the long period over which such decisions are felt. As I am frequently reminded, the last captain of the aircraft carriers that we are currently building is probably not even born yet, which puts into context the length of time we have.

I think that I can give the hon. Member for Plymouth, Moor View the assurance that she sought about the 10-year equipment programme. As I understand it, we now have a groundbreaking deal with the Treasury, which enables us to plan with much greater certainty the future of defence equipment and support in general.

I also want to pick up something that my hon. Friend the Member for New Forest East said about the previous Secretary of State, my right hon. Friend the Member for North Somerset (Dr Fox). The MOD is now set on a path of real recovery, real hope and real confidence thanks to his excellent work. It now falls to the ministerial team to continue that work as a tribute to his sterling leadership as Secretary of State.

I will concentrate my remarks on the speech of my hon. Friend the Member for Sittingbourne and Sheppey, because I owe him that courtesy. If I cannot deal with everyone else’s comments, I apologise and will write to them. I will not comment on individual cases, but I reassure my hon. Friend that the support that we give to SMEs has a high priority in my portfolio. I pay tribute to Vector Aerospace, which is one of the few companies that have been named in this debate. It is an outstanding example of a medium-sized company.

We are making a few changes that should help the SMEs considerably. We are reducing the threshold at which the MOD advertises contract opportunities and have created the new defence suppliers forum, which meets regularly under my chairmanship, to discuss how SMEs can make a better contribution to defence and how we can help them achieve that. We are learning a lot from that group’s work. We are launching a new Government-wide contracts finder that offers a free-to-access one-stop shop of public sector opportunities over £10,000. There will be more in the White Paper, the publication of which I too look forward to very much indeed. I cannot say too much about its contents but it will include a definition of value for money—something that many Members have mentioned—and talk more about outsourcing. Although there is already extensive outsourcing in defence—more extensive that many people realise—I agree that there is scope for more. The White Paper will also address the framework agreement on technical services and through-life costing, which is essential.

I am happy to reassure the hon. Member for Plymouth, Moor View that our relationship with BIS is excellent and that there is nothing between us. I know that she would expect me to say that, but it happens to be true as well.

The White Paper will also define sovereignty requirements. I do not foresee any change in the definition that was published in the Green Paper last year.

I will now specifically address the remarks of my hon. Friend the Member for Sittingbourne and Sheppey. I note that he worked for GEC Marconi, where he apparently ran rings around our officials. That issue is why Bernard Gray is working at present on the new matériel strategy. One of the principal purposes of that strategy is to ensure that we have the skills in place in Defence Equipment and Support to make sure that these procurement decisions are taken well and that the contracts are well negotiated. My hon. Friend has made a powerful point, and that work is ongoing. I hope that submissions to Ministers will come before the end of the year. And watch this space, because I agree that it is important that we do procurement and acquisition well, which has not always been the case. In the spirit of consensus, I think that the Opposition’s document on acquisition is not at all bad. In my view, all it lacked was an apology, but that is another matter for another day.

Turning to Canada, I am pleased that my hon. Friend and other hon. Members obviously had such an interesting visit to the British Army training unit Suffield—BATUS—over the summer with the armed forces parliamentary scheme. That is a great scheme, which works very well under Sir Neil Thorne’s excellent leadership. I have benefited from it twice with the Royal Navy— I am a “postgraduate” according to the scheme’s definitions. Today has shown how valuable the scheme is in enabling Members to speak with authority about the armed services and to challenge Ministers on things that they find. It is what the scheme is there for, and we need to make even better use of it than we do already.

I slightly disagree with my hon. Friend’s emphasis and what I think was the spirit of his remarks when it comes to Canada. Led by my right hon. and hon. Friends in the Foreign and Commonwealth Office, Her Majesty’s Government are looking to develop even closer ties with Canada, as well as with other Commonwealth countries. A joint declaration of closer working between the UK and Canada has been drawn up by the FCO for signature by the two Prime Ministers, with a desire to seek

“greater interoperability between our defence forces and deepen co-operation on procurement and capabilities, to be enabled in part by a Memorandum of Understanding - MoU - on Defence Materiel Cooperation”,

and so on and so on and so on. The document was signed on 22 September by the two Prime Ministers, and it symbolises the very close relationship that we enjoy with the Canadians.

I will now talk about BATUS in more detail. As my hon. Friend the Member for Sittingbourne and Sheppey reminded us, it was set up in Canada in 1972. The location was chosen for its ability to provide the large-scale manoeuvre exercises that at the time—the middle of the cold war—were seen as being critical to meeting the UK’s operational and tactical requirements. BATUS provides 2,690 sq km of rolling, semi-arid prairie, delivering training on a scale that is unparalleled by anything available in the UK and enabling more than 11,000 troops to be trained each year. I want to place on record our real gratitude to the Canadians, who have been our utterly reliable allies in providing this world-class training location since 1972, which allows us to train in a way that is just not possible in the UK. The training at BATUS has been essential for the preparation of our troops for operational deployments, and we owe the Canadians a great debt for the part that they have played in enabling the training to happen.

Oral Answers to Questions

Debate between Nick Smith and Peter Luff

Monday 16th May 2011 Commons Chamber

[Nick Smith (Blaenau Gwent) (Lab)]

Will the Minister give an assessment of the financial cost of the conflict in Libya so far? Does he recognise reports which state that if the conflict lasts six months, the cost could reach £1 billion?

[Peter Luff]

I do not think it will get to that. This is necessarily a complex subject, and I cannot give a straightforward answer. There are costs that would be incurred anyhow by the armed forces operating in Libya. There are additional costs that are specific to the campaign. We would also have to establish the precise value of the assets deployed or used in the campaign. All I can say to the hon. Gentleman is that the House will be informed in the usual way of the precise costs in the winter supplementary estimates.