Ministry of Defence

Paul Sweeney Excerpts

Monday 26th February 2018 Commons Chamber

[Sir Edward Leigh]

That is an extremely good point, and I will come on to deal with the people side.

As the Defence Committee has pointed out, there appear to be some shenanigans going on in relation to how we reach the 2% target, and this is a really good opportunity for us to discuss money in detail and for the Minister to reply to these points. The criteria seem to change from year to year, with new bits—war pensions and other expenditure—qualifying when they have not previously done so. NATO is apparently satisfied, but this rather gives the impression that we are meeting our targets only by means of creative accounting, and when it comes to the defence of the realm, surely creative accounting is not good enough.

Let me say a word about procurement. What are our procurement procedures, and are we getting value for money? Professor Julian Lindley French testified, again to the Defence Committee:

“If you look at the $90 billion being spent by the Russians as part of their modernisation programme, the $150 billion or so being spent by the Chinese and what other countries around the world are doing, what strikes me is how few assets—both platforms and systems—the UK gets for its money.”

As a former Chairman of the Public Accounts Committee, I am talking not just about more money for the MOD, but about spending the money more wisely.

The MOD committed itself to new purchases arising from its 2015 strategic defence and security review before it established how they could be paid for. This requires the MOD to generate £5.8 billion of new savings from within the defence equipment plan itself, in addition to £1.5 billion from the wider defence budget, which is already under pressure. We never of course know what crisis may happen, and if a crisis happens and our troops have to be deployed, where will the money come from? In such a case, will we end up taking money from procurement that we had not expected to take?

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

I thank the hon. Gentleman for giving way on that very important point and for his excellent introduction to the debate. Does he recognise the issue of the defence inflation rate, which in recent years has been 3.9%, while background inflation has been just 0.8%, leading to a real depreciation in real purchasing power for defence? Is that not the root cause of the problems we are seeing with the attrition of defence capability?

[Sir Edward Leigh]

That point on purchasing power is a very pertinent one. I hope that the Minister replies to it, because it is a point well made.

Uncertainties and over-optimism—there is over-optimism—in the project costs mean that the final costs of the defence equipment plan may be significantly understated. The MOD’s cost assurance and analysis service reported that the costs in the 2016 plan were understated by £4.8 billion. Over a period of years, the MOD has failed to agree a workable way forward with the prime contractor on the procurement of a Type 26 warship, which has compromised maritime capability and placed further upward pressure on costs.

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[Sir Edward Leigh]

My right hon. Friend is of course a former Minister for the Armed Forces and really does know what he is talking about. The Government should listen to him.

There is a problem with morale. Those who perceive service morale as low increased by 12% on the previous year in the Army and 15% in the Royal Marines in 2017. The overwhelming majority, 74%, feel proud to serve—we are proud of them for feeling proud to serve—but only a third feel valued by their service. What is the point of training men and women if we fail to keep them?

[Mr Sweeney]

On retention, the hon. Gentleman referred to the reservists and the recruitment challenges that they face. My infantry battalion—a reserve battalion—has seen a significant influx of former regular soldiers echeloning through from the Regular Army as it has been severely downsized, including by, in effect, the disbanding of an entire battalion of the Royal Regiment of Scotland. The concern is how long these former regular soldiers will remain reservists before they move out altogether, because they have benefited from a transition payment. Could that financial incentive just be temporary, and will we see a further pressure on reserve recruitment in the longer term?

[Sir Edward Leigh]

That is a fair point. Pressures build on pressures.

In conclusion, the problems are many, but they must be tackled head on. Speaking personally, my record on spending and saving is clear: I think that the state should spend as little as possible. However, we also have responsibilities of absolute necessity, such as the defence of the realm. It is not pompous to say that—it is an absolute fact. That is the first responsibility of what we do in this House and we are falling short. The Government simply have to commit to spending more if we are to have the armed forces that this country requires. In order to maintain our independence—not just our sovereignty, but our freedom of action and ability to make our own decisions rather than be dictated to by circumstances—we need highly trained, fully manned, well-equipped armed forces. For a trading island nation on the cusp of Brexit and turning her face to the world, Great Britain must turn the tide of decline in defence.

I hope that this debate will prove to be a turning point, but that is up to the Government to decide. One thing is sure: further stagnation and cutting capabilities will set us back further. Once again, I am reminded of the wise words of Admiral Andrew Cunningham during the battle of Crete. Exposed to German air assault, his ships were taking heavy losses as they helped to evacuate the Army from Crete to Egypt. Some suggested that he should suspend the Navy’s part in the evacuation, saving his ships but ending the tradition of solidarity under fire among the armed forces. Cunningham knew that the Navy must not let the Army down and he refused. He said these words:

“It takes three years to build a ship, but it takes three centuries to build a tradition. The evacuation will continue.”

Our traditions of a great nation and great armed forces must continue. That is why this important debate must continue, too.

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[Mrs Moon]

My hon. Friend is absolutely right. What we have here is a consistent pattern of only about 15,000 deployable reservists. Despite the money that has been poured into the reserve forces, we have not increased their number, but we have massively decreased the number of regulars. Our Army capability is therefore shrinking. That is something that we must be very worried about, but what worries me even more is the fact that we are spending huge amounts of money while receiving little or no return.

[Mr Sweeney]

My hon. Friend has referred to the significant reductions in the regular forces. As was mentioned earlier, a large number of former regular service personnel have moved into the reserves, but they may be doing so on a temporary basis. That may explain why so few people—in real terms—are achieving their bounty qualifications each year.

[Mrs Moon]

I intend to talk about the reserve bonus scheme in the next part of my speech. I am sure my hon. Friend will welcome that.

Part of the problem is that, despite the theory that employers would be willing, and even encouraged, to allow people to take their time to go to, for instance, the annual camp, it is not happening. As people are under pressure to remain in work and to retain their jobs, they are not willing to give those 27 days. They are not able to make that commitment.

Further inefficient costs to the Army reserve can be seen when we look at the “regular to reserve” bonus scheme and its failure to retain personnel. The scheme was introduced in 2013 as a way of enticing former regular soldiers to join the reserves in order to keep their expertise within the military and pass it on to the new reserves who were being recruited. We were retaining capability, and also using the former regulars to train the reserves. The incentive for ex-regulars to join the scheme is, again, financial: a £10,000 bonus is paid in four instalments, provided that they meet the requirements of training and attendance at each stage.

As of October 2017, 4,350 ex-regular soldiers have joined the reserves under the scheme. At first that looks like a good number, but the question is, how many have been retained? In 2017, only 480 of those soldiers achieved all four instalments, which indicates a dropout rate of 89%. I accept that that figure does not take into account the fact that entry into the scheme may be staggered over the preceding four years, but it none the less demonstrates that retention of ex-regular soldiers in the Army reserve is a problem.

I can give an example. An ex-regular soldier who turned up at my house to do a piece of work had signed up for the reserve bonus scheme, and had found that once he had left the military and started work, the pressures of civilian life—being back with his family and getting into the new job—meant that he could not retain the commitment that he had thought he would want to ease his transition out of the military and into the civilian world. These are men and women with vital knowledge and expertise who are used to military life. Their retention is vital, but even with that offer of £10,000, there is not enough to keep them and for them to commit to what is being asked. This further suggests that the current model of the Army reserve just is not working.

The situation looks bad on its own, but if the cost of the scheme is taken into account, it looks a lot worse. Breaking down the entrants to the scheme into their respective ranks and assuming this distribution follows through the key milestone payments, and using these elements and combining wages and bonuses, the scheme so far has cost just over £29 million, with only 480 soldiers reaching all four payments. I am sorry to bat on about this, and I know the figures are boring, but I am deeply concerned. We have a reducing capability in our Army. We have been sold a pup, with a promise that the reserves would fill a gap in the regular forces, but that is not happening.

Defence is an expensive business—there is no getting around that—but it is also a business in which we cannot afford to lose highly skilled and highly able individuals willing to give the time and effort to get through their training so that they are deployable. I know that many Members of this House, including the Minister, are eager to fulfil our commitment to them so that they retain their membership of the reserves and their employability. I honour, and express my gratitude for, the service of all those reservists, but are we getting value for money in a way that allows us as a country to have the forces that we need? It is my concern that we do not, and the MOD’s own figures suggest that the reserves model as it stands cannot provide us with the numbers we need.

The challenges and menaces we face are very real. Many of our platforms are not fit for purpose and the readiness of our forces is just not in place, and we have heard about the disastrous Capita contract. I appreciate that the Minister has apparently suggested that he will resign if the military is cut further, and I hope he does not have to resign, because he is a good Minister, whom we trust, rely on and respect, but we also need the Minister to hear the concerns that we are expressing.

None of us want our Army to be damaged. All of us know that our personnel can, when fully trained and fully committed, be some of the best in the world; that knowledge is shared across our NATO alliance. But we are getting weaker, and that is unacceptable. I call on the Minister to look at how we are spending in terms of the reserve forces.

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[Mr Jones]

That situation was predictable when the system was set up. What is worse, I have heard stories about young people who have nearly got to the end of the selection process but do not get called back in, but then get a telephone call from some Capita call centre saying, “I’m sorry, you’ve failed. That is it.” I am sorry, but that is not the way to treat people who have tried to join the armed forces.

The right hon. Member for Rayleigh and Wickford (Mr Francois) makes a good point. When we had senior non-commissioned officers stationed in recruitment offices, they could work out how to handle the recruits and use their breadth of experience to explain what life in the armed forces is like. This situation could have been avoided. Unless something has changed radically in the last few years with injuries, I agree with the right hon. Gentleman. I had case in which someone had a childhood knee injury. That person had to wait six months for a decision and then the knee injury was flagged up as the reason why he could not join the armed forces. That cannot be acceptable.

[Mr Sweeney]

To give a personal example, I joined the Territorial Army back in 2006 with a good friend, who went on to serve in Afghanistan. He left the reserves and when he sought to rejoin, he was disqualified on medical grounds. That is someone who had actually served in Afghanistan and who did not have any obvious injuries.

[Mr Jones]

My hon. Friend raises a very good case from personal experience. This needs to be looked at. I would scrap the contract and take it back in house. The old system perhaps needed tweaking, but it was delivering.

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[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

Thank you for giving me the opportunity to contribute to the debate, Mr Speaker. Let me also pay tribute to the hon. Member for Gainsborough (Sir Edward Leigh) and the right hon. Member for New Forest East (Dr Lewis) for their efforts in securing the debate, and for their persistent scrutiny of the Government on defence matters, which has been of long-standing note in the House.

It is interesting to follow the hon. Member for Moray (Douglas Ross), whose constituency is the home of the Royal Air Force in Scotland—although, sadly, it has been much diminished since only a few years ago, when Kinloss was home to the RAF’s fleet of marine patrol aircraft. That yawning capability gap is just one of the many litanies of defence cuts that we have seen in the past few years, so I do not entirely agree with the hon. Gentleman’s glowing review of the trajectory of British defence capability in recent years. That speech aside, however, I have been struck by the consistent level of shock and dismay expressed about the extent of the reduction in Britain’s defence capabilities.

It is an established fact that there has been a steady decline in defence spending as a percentage of GDP. It has fallen from 2.4% in 2011 to 1.9% in 2016. Not only has it declined every year under the present Government, but it is lower than it was in any year under the last Labour Government, which rather puts paid to the mythology about Labour’s defence record. Those figures, however—damning as they are of the Government’s real commitment—belie the true criticality of the situation. A recently published letter from former defence chiefs described the 2% target as “an accounting deception”, and added:

“Most analysts…agree core defence expenditure for hard military power is well below 2%.”

As has already been pointed out today, the inclusion of pension liabilities and other elements that were previously excluded from core defence spending suggests that what we are truly spending is much less than 2%. I welcome the commitment by the Secretary of State to making the 2% a floor rather than a target, and I hope that we can reboot our spending to increase the percentage substantially in the longer term.

I intend to stick to some essential points to which I hope the Minister will respond. Not only is defence spending well below the 2% minimum target, but its effective purchasing power is being eroded year on year. The defence inflation rate is running well above the national rate. In 2015-16 the defence inflation rate was 3.9%, the highest rate since 2010, while the national GDP deflator was just 0.8%. We only know that because the Ministry of Defence calculates the figures in conjunction with the Treasury, but, as the defence analyst Francis Tusa recently noted, the MOD and the Treasury stopped calculating them last year, so the visibility of the real purchasing power of defence has now been lost. We must recover that visibility as a matter of urgency, because it is the only way in which we can really scrutinise the trajectory of defence purchasing power. I hope that the Secretary of State will commit himself to discussions with the Treasury about the reinstatement of the calculation, because it is vital for us to have the information in order to plan ahead.

In recent months the Army has been cut by a fifth, wages have been frozen for a sustained period, and—as we heard from the hon. Member for Gainsborough—no Royal Navy ships were on patrol in international waters over Christmas, which is shocking and unheard of in recent history. All that can be attributed to the funding gap of £21 billion in the equipment programme, which shows how underfunded that programme is, and reveals the gap in defence spending overall.

I referred earlier to the relentless decline in defence spending in recent years. It peaked at £45 billion in real terms in 2009-10, the last year of the Labour Government. Although it has been suggested today that there is currently a £10 billion gap, I calculate that if the trajectory of an average of, say, 1.7% had been maintained rather than cut, we would have seen real-terms spending of £53 billion by 2020 rather than the £37 billion that has been projected. According to my calculation, the real funding gap is £16 billion rather than £10 billion. Members may feel free to correct me, but I believe that if we extrapolate the trend of defence spending before the cuts started in 2010, we see substantially more defence spending. Perhaps that shows just how critical the situation is, and demonstrates the reality of the root cause of the cuts.

The present position is both absurd and depressing. We know what the solutions are, and addressing them is a matter of political will. The key themes of the debate have concerned the chronic underfunding of defence, and the failure to recognise the uniqueness of defence industrial capability and understand how we can get the most out of it. The hon. Member for Gainsborough asked whether we were getting the bang for our buck that we ought to be getting, and what capability we received per pound in comparison with our peer countries around the world. That is a critical question, and I think that we, as a country, should investigate it. How can we secure maximum capability? I suggest that we can largely blame the way in which defence is financed.

When I was in the shipbuilding industry, we designed and built complex warships such as Type 26 frigates. We were massively constrained by the arbitrary limits placed on capital expenditure. Like many other Members, I take issue with that. When a programme of that kind is being commissioned—possibly the most complex and the largest-scale defence equipment programme, indeed the largest-scale engineering programme, undertaken anywhere in the world—imposing of arbitrary annual limits on spending is ridiculous. We ought to finance such programmes in the same way as we finance other critical national infrastructure programmes, such as HS2, Crossrail and the Olympic games.

[Mr Kevan Jones]

Does my hon. Friend agree that when equipment such as ships is being ordered, the payback to the Exchequer in tax should be taken into account and the jobs should not be exported?

[Mr Sweeney]

Absolutely. My hon. Friend has made an excellent and salient point. He and I are both members of the all-party parliamentary group on shipbuilding and ship repair, which is currently undertaking a study of that issue. According to another study, conducted by the Fraser of Allander Institute at the University of Strathclyde, the overall benefit to the UK economy per annum from the shipbuilding industry on the Clyde alone is £366 million a year, in purely multiplier effects. As for the idea that we can competitively tender programmes overseas, we are losing the opportunity of industrial benefit as well. We are not just talking about the loss of core capabilities; we are talking about the loss of revenue and economic potential for our country.

[Mr John Hayes (South Holland and The Deepings) (Con)]

I know that the hon. Gentleman has no intention of being churlish or unhelpful. He will, I am sure, acknowledge that having a shipbuilding strategy, together with a maritime growth strategy, is a particular feature of this Government, which marks them out from their predecessors of all political persuasions.

[Mr Sweeney]

I do not accept that point. It was a Labour Government who, in 2005, introduced the first defence industrial strategy, which defined a far more robust way of delivering shipbuilding capability in the UK. It defined key industrial capabilities, and that is sorely lacking from the Government’s current shipbuilding strategy. I hope that there will be some improvement as a result of the ongoing discussions on the matter.

[Mr Hayes]

I cannot believe that the hon. Gentleman has misunderstood me. Perhaps I did not explain myself carefully enough. I commissioned the maritime growth study, and it was the first for donkeys’ years, so I am not quite sure what the hon. Gentleman means.

[Mr Sweeney]

That may have been a discrete maritime growth strategy, but the overall defence industrial strategy encompassed maritime aspects. However, I welcome the right hon. Gentleman’s efforts in that regard, and I hope that we can work constructively to improve the strategy in the manner that I suggested.

The funding of large-scale equipment programmes must be revisited as a matter of urgency, because it is not sustainable. The annual limits on key programmes that are multi-generational cannot be allowed to continue. When we were looking at the programme for the construction of the Type 26, we wanted to invest potentially half a billion pounds in reinvigorating the infrastructure that would support it, but because of the arbitrary in-year spending profile we could not invest in the infrastructure and facilities that would have benefited the programme throughout its life cycle, and we therefore lost that long-term benefit. For the sake of short-term savings, we are losing long-term efficiency in the generation of defence capability. That may be an answer to the question from the hon. Member for Gainsborough about whether we were receiving the maximum benefit. Perhaps if we sow the seeds of the maximum capability at the start of programmes, we will reap the benefits of efficiencies through the manufactures that result from those highly complex programmes.

Defence inflation and the need to pump-prime programmes at the start to ensure that they meet world-class standards are just a couple of the issues that we need to challenge if we are to get the most out of our industrial capability. I hope that the Secretary of State will take those comments on board.

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[Stewart Malcolm McDonald]

I understand that that was what caused it, but how did the MOD manage to get the calculations so badly wrong? When there is a funding hole of £20 billion just in the MOD’s equipment spending—before we get to estates, personnel and all the rest of it—why is no one being hauled over the coals? I cannot think of another Minister or Department that would be allowed to get away with that, but it is due to a fundamental problem in how this Government, this Parliament and Governments over many years have decided to fund defence. It needs radical change. Even if the solution that we think might be helpful is not the perfect solution, something has to give, because the situation is unsustainable. The NAO is clear that the result is that projects must be cancelled, delayed or scaled back. I therefore ask the Minister to make it clear to the House which projects are to be cancelled, delayed or scaled back. Can we have a guarantee that not a single project in Scotland will be cancelled, delayed or scaled back, because that is the road that the NAO says the UK Government is heading down?

The situation adumbrates the need for a new SDSR—one that takes account of the change in currency fluctuations and of the fact that Britain will no longer be in the European Union. Our current security policy is based on our being members of the EU, so we need a new one that takes account of the fact that we are coming out, because that undermines operational capability.

[Mr Sweeney]

The hon. Gentleman makes a point about the impact on real defence spending of things such as currency fluctuations. We are talking about the need for stability in the defence budget and for it to be fiscally neutral, which I think was the term used by the Secretary of State, so should the Treasury not give special dispensation to the MOD so that it is pegged to a certain real level of spending, which would be an automatic stabiliser that rises and falls automatically with changing valuations or with defence inflation rates?

[Stewart Malcolm McDonald]

There is nothing that I could add to make that point any better. The hon. Gentleman is absolutely right.

Shipbuilding Strategy

Paul Sweeney Excerpts

Tuesday 23rd January 2018 Westminster Hall

[Luke Pollard]

I agree with my hon. Friend. Clarity around the role, capabilities and market for the Type 31 is absolutely critical in building a strong case—a marketing dossier—that says, “British Members of Parliament support this ship and will actively go out and sell it,” because I am concerned that we cannot even advocate for the Type 31 for UK military use, let alone military use for those abroad.

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

Does my hon. Friend agree that an increasing pattern in the procurement of ships around the world for naval purposes is that the proposition for bidders, such as Fincantieri and BAE Systems, is that those ships will be part of an industrial offer to the customer country, in that they will be built in their country, so the potential for build in the UK for export is extremely limited, and part of the competitive drive is to move that work into the country purchasing the ships as part of an industrial offer?

[Luke Pollard]

My hon. Friend perfectly sums up where this is going. It is clear that we need to look at what those jobs will be. Will they just be in design, or will they be in build in the UK?

We need to recognise that the Royal Navy needs to sell the best in-class version of the Type 31 if it is to be a compelling export product; it should be a floating showcase, an example par excellence, not a cut-back, scaled-down, bargain-basement, cheap as possible, poorly-armed, combat-light, barely acceptable platform. We need clarity on whether the export version will be built here or abroad. Britain is building ships. Britain is building corvettes and offshore patrol vessels. Babcock is building the Irish navy OPVs at Appledore: the Samuel Beckett-class OPV is lightly equipped, but capable. BAE Systems is building OPVs: the Batch 2 river-class ships and the Khareef class for Oman. They have similar armaments, but with the ability to add Exocets and a medium helicopter. Those ships could well form the basis for the Type 31 Arrowhead or Leander-class options—extended OPVs, rather than frigates in their own right.

My hon. Friend the Member for Glasgow North East mentioned customers and where they will be. Australia and Canada are looking to procure new frigates in the coming months, but they are more in the market for a Type 26 all-rounder anti-submarine warfare frigate, rather than Type 31s. I appreciate that the Minister has inherited someone else’s homework and ambitions, but where will the 40 export orders come from and can the Type 31 really win 40 orders? I am naturally cautious about suspiciously round numbers, and this shipbuilding strategy suggests not only a suspiciously round £250 million per ship, but that there will be 40 exports. As aspirations go, it is good to be bold, but I would prefer us to be realistic about the delivery of this ambition, especially against the backdrop of post-Brexit uncertainty and volatility in the value of sterling.

As with the national security review, I fear that the national shipbuilding strategy puts the cart before the horse. We know the price tag, but not the capabilities. We know the final bill, but not what foes will be faced, what waters will be patrolled or what role it will have. Clarity is our ally if we are to make a strategy that is truly joined up and deliverable. In very uncertain times for our armed forces, this strategy should offer us hope of long-term thinking. I say to the Minister that the paralysis and the pitched battles of the national security review are understandable, but they do not have to lead to the paralysis announcements from the MOD.

I encourage the Minister to announce the base porting arrangements for the Type 26s and the Type 31s, providing clarity for future investment in base ports. Devonport offers a genuine world-class base, as he would expect me to say. I also encourage him to announce that the fleet support ship contract will be open to UK bids, and that no UK shipbuilder will be discouraged from entering by the MOD in order to curry favour for other contracts, especially the Type 31. I also encourage the Minister to announce that the social, economic and employment impact of the contracts will be assessed as part of the contract decision making process. Bring forward greater detail about the Type 31—its capabilities, roles and operations—and be clear about how it will be built in the UK.

There is a huge opportunity to be ambitious here, an opportunity to build and sustain a revitalised shipbuilding industry providing good, well paid and high-skilled employment across the country, backing British supply chain jobs, creating apprenticeships and, importantly, providing the Royal Navy and the Royal Fleet Auxiliary Service with the ships they need for Britain’s sea power to rule the waves once again. A strong defence is worth fighting for, and we know that a strong defence cannot be done on the cheap.

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[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

Thank you for giving me the opportunity to speak in this debate, Ms McDonagh. I thank my hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard) for his comprehensive contribution, in which he outlined the key concerns about the national shipbuilding strategy, and the right hon. Member for New Forest East (Dr Lewis) for outlining his longer term perspective on the attrition of the capability of the Royal Navy’s frigate and destroyer fleet, which the national shipbuilding strategy ought to aspire to address as an outcome.

I first encountered the man who wrote the report that spurred the creation of the national shipbuilding strategy, John Parker, about three years ago when he attended Glasgow University to deliver a speech on his history of working in the shipbuilding industry. He had a great reputation as a managing director at Harland and Wolff shipbuilders in the 1980s, where he started as an apprentice and grew up through the ranks. There was an international discussion about the long-term decline of British capability, from the global world leader in the shipbuilding industry that it once was to a marginal player now even in Europe, never mind the rest of the world.

I asked him three years ago when I was working at BAE Systems what his greatest regret was in his career. He stood up and said, “My greatest regret is that Europe is building 90% of the world’s cruise ships, and Britain, with such a great heritage of building world-beating ocean liners and passenger ships, is building none. There are high-wage, highly equipped shipyards in Europe building these vessels, and Britain isn’t building one of them.”

As managing director of Harland and Wolff when it was under the ownership of the British Shipbuilders Corporation—the industry was nationalised until the late 1980s—he recognised the emerging market for cruise ships, which were once again becoming a popular recreational pursuit. Harland and Wolff developed proposed designs for cutting-edge new cruise ships and went to the Government for funding to build them for Carnival, now the biggest cruise company in the world, but the Government said that they were not interested in the design. They wanted to hold a fire sale, get rid of the assets and remove shipbuilding from public ownership. They were not interested in any further investment in what they saw as a dying industry.

In the very same year—1987, the year before Harland and Wolff and Govan shipyard were sold off—Meyer Werft in Germany, a family-owned business, got funding from the German state investment bank to build a completely new, undercover shipyard and then the world’s first modern cruise ship. Today, that shipyard dominates the global market for cruise ship and complex shipbuilding in Europe, building about two 100,000-plus-tonne ships every year. That contrasting approach is symptomatic of a broader malaise that we face when it comes to industrial policy and planning in Britain.

[Chris Stephens]

Will the hon. Gentleman outline what the devastating economic consequences were of that decision on cities such as ours, Glasgow, as well as Belfast and elsewhere in the UK?

[Mr Sweeney]

The impact was absolutely devastating, and we saw the wider impact in Govan as well, which was a commercial shipyard up until 1999 when Kvaerner pulled out. That Norwegian oil company rebuilt the yard in the early 1990s for commercial oil tankers and gas carriers. The result of that collapse was disastrous. Sir John Parker said that just as we had got British shipbuilders match-fit, ready to compete, the rug was pulled from under them. Just as the industry was ready to re-enter the market and be a globally competitive player, it was wrecked. That is the sad legacy of the collapse of British merchant shipbuilding to the point where we are entirely reliant today upon the Ministry of Defence to sustain what is left of British shipbuilding capability. That is partly why I am concerned about the national shipbuilding strategy, if it is restricted in its entirety to naval shipbuilding and not the wider issue of how we re-establish a market foothold in commercial shipbuilding. The two are intrinsically linked.

If we are to achieve a competitive advantage we ought to broaden our horizons and re-establish how we deliver a resurgence in British commercial shipbuilding capability. That was Sir John Parker’s biggest regret. That is what drove his frustration at that time, and a lot of that is what underpins the recommendations in his report. He talks about a vicious cycle of changing requirements, which the right hon. Member for New Forest East mentioned, and a year-zero approach every time we have a new MOD shipbuilding programme which duplicates effort and introduces unnecessary costs. It is so bespoke in its approach to designing ships that it introduces unnecessary costs, which render British shipyards uncompetitive, even in the naval sphere, never mind the commercial sphere.

[Ruth Smeeth (Stoke-on-Trent North) (Lab)]

I thank my hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard) for securing this debate. My hon. Friend the Member for Glasgow North East (Mr Sweeney) has just hit the nail on the head. Does he agree that the lack of a steady drumbeat of orders to ensure our industrial base has caused this problem, and that the wonderful words of the shipbuilding strategy are not being delivered by the Government?

[Mr Sweeney]

I absolutely agree. We see a cognitive dissonance between the vision of the outcome desired and the prescription to deliver that vision and commitment, which are not in alignment. They are not going to deliver it. That is the tragedy of it. We all want to see the national shipbuilding strategy succeed. We are trying to deliver our own collective understanding of what is best for the British industrial capability into this document, so that we achieve the outcome of a globally competitive and effective shipbuilding industry in the UK again.

My hon. Friend mentioned a feast and famine approach to British shipbuilding, which has long been an issue, particularly as the commercial capability has fallen away. I look in stark contrast at the American approach to shipbuilding. The Arleigh Burke destroyer programme plans to build 77 ships. Those ships have been consistently under construction with the same hull since 1988. They have been built since the year before I was born, and it still plans to build more. That is a consistency of approach that we ought to think about adopting in the UK. It would essentially be a continuation of the Type 23 frigate programme, but adapting its technology and capability and maintaining the learning curves achieved over a 30-year build programme. That would be a huge opportunity for British shipbuilding. Why do we insist on stopping every time we build six Type 45s and starting from scratch on a Type 26 when a Type 45 platform could have been adapted to deliver the same capability as a Type 26? The approach is wrong-headed.

The Type 45 project has 13 different types of watertight doors. Why do we have such a huge level of variance in the programmes? We have no standardisation, no grip on the design, no standard approach to delivery, and no innovation in adopting new products and defence standards. We have no resilience or innovation in defence when it comes to an entrepreneurial way of delivering ships. If we were to benchmark it against how Meyer Werft build a complex cruise ship, the lead time between specification to delivery of the ship is minuscule compared with what we do with the equivalent ship of, say, our Type 26 platform. It is years and it is unacceptable. We need to seriously grip that if we want to drive down costs, deliver value in the naval shipbuilding industry and achieve the outcomes in terms of numbers for the Royal Navy that we desire.

The prescription is chaotic. It talks about a vision for having more

“certainty about the Royal Navy’s procurement plans”,

yet it wants to introduce a competitive programme for a Type 31. That goes right back to the early 1990s with the Type 23 programme, when Swan Hunter was competing with Yarrow shipbuilders on the Clyde, and what happened? None of those shipyards could invest in modern facilities and modern practices that would deliver the benefits in terms of timescale and minor efficiencies that would allow the ships to be built for value for money. It ended with the collapse of Swan Hunter and a drip-feeding of orders. There were huge redundancies in the shipping industry and huge uncertainty. This is a recipe to return to that model that was deeply flawed in the 1990s and led ultimately to the loss of British shipbuilding capability. That is why we are appealing today for a commitment to uphold what was originally planned in the terms of business agreement, which was extinguished.

A letter of 19 October from the Under-Secretary of State for Defence, the right hon. Member for Bournemouth East (Mr Ellwood), said that the terms of agreement was extinguished. It committed to a single world-class site for complex warship building on the Clyde and investing in that shipyard facility to make it world class, upper quartile. That would deliver the benefits industrially to allow us to deliver a national shipbuilding programme for frigates and destroyers, which would ensure that they had a consistency of build that would deliver the long-term benefits, learning curves and efficiencies. It would drive down the cost of the ships and allow them to be built at volume, which, as the right hon. Member for New Forest East mentioned, is necessary to sustain a larger Royal Navy fleet. That is how we should do this. It is not about spreading it around, which will not work.

The Royal Fleet Auxiliary programme has better potential because it has a lower gross compensated tonnage and is a less complex ship, although it is still complex. If the tonnage of 40,000 tonnes each was spread around the remaining UK shipyards, that would provide the bedrock of capacity to sustain all the shipyards around the UK, while having the designated complex war shipyard on the Clyde. That is what happens with the Canadian and Australian shipyards and it is what happens in the United States. That is the approach we ought to have. Why has the national shipbuilding strategy not taken account of international benchmarks? Why has it not got a commercial shipbuilding focus as well to develop a longer term model based on European norms? Why are we not committed to building British ships, including the Royal Fleet Auxiliary ships, in the UK? I could go on for much longer because I am closely associated with the topic.

In summary, I have outlined what we want to see changed in order to make the national shipbuilding strategy worthy of the name it deserves. We need world-class UK shipbuilding back, and the way to do it is to adopt those suggested improvements.

[Chris Stephens (Glasgow South West) (SNP)]

It is a pleasure to see you in the Chair, Ms McDonagh. I thank the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) for securing this debate. During the defence debate less than two weeks ago in the Chamber, every single Member of the all-party group on shipbuilding and ship repair complained that we had applied for debates since the publication of the national shipbuilding strategy. All of a sudden, at the very next ballot, the hon. Member for Plymouth, Sutton and Devonport secured one, so I thank him for that. I hope he will accept my apology to him in relation to Darth Vader. I actually misspoke. I did not mean to say “his hero”. What I meant to say was “their hero”, because Darth Vader is a Conservative icon and not of any other political party. I can see nods coming from the Conservative Benches.

The history of how we have got to this point is important, particularly for those of us who represent the best shipbuilders in the world: the shipyard workers on the Clyde, and those in the Govan shipyard in particular. In 2014 they were promised that 13 Type 26 frigates would be built there, plus a frigate factory. Ever since, there has been a real concern that there has been a row-back by the Ministry of Defence. The frigate factory was cancelled. Then, in November 2015, during the national strategic defence review, there were no longer 13 Type 26 frigates, but eight. We were told not to worry and remain happy because instead of five Type 26 frigates, there will be five Type 31 frigates, which the Clyde will build and will be exportable. I will come back to that later.

Sir John Parker’s report was an honest attempt to deal with the feast and famine that we have heard about from the hon. Member for Glasgow North East (Mr Sweeney), but it contained several historical inaccuracies that concern me because the national shipbuilding strategy seems to be based on those historical inaccuracies, which is that two different types of ships have never been built in the same shipyard. That is not the case. Anybody who had worked at Yarrow’s would tell us that that was not the case, because, while they were building ships for the Royal Navy, they were building a different type of ship for the Malaysian navy. If the Government are basing their decision on such an historical inaccuracy, it is up to us Members of Parliament to tell them that it is an historical inaccuracy, and perhaps they might want to comment on that and put that right.

[Mr Sweeney]

I thank the hon. Gentleman for his comments, particularly about the frigate factory. Does he agree that the major issue was the fact that financing could not be achieved, because of fragmentation of the programme? If that had been gripped in the same way as programmes such as HS2 or the London Olympics, and the budget had been assured through its whole life, there would have been a business case to finance, through commercial means, the investment necessary to build a world-class shipyard on the Clyde.

[Chris Stephens]

I agree entirely. My Glasgow comrade is absolutely correct. That was one of the significant reasons for the frigate factory being cancelled.

My concern about the national shipbuilding strategy has been expressed by others: it is that we are going back to 1980s thinking and introducing competition. One of two things can happen when we start to introduce competition on that basis. Shipyards will try to undercut. As we heard earlier from my Glasgow comrade, that meant the collapse of Swan Hunter. It would be inevitable if we went back to the days of competition. Alternatively, companies would get together and the prices of ships would increase.

I think I am being fair and moderate in my remarks when I say that we are now at a place where the announcement of the national shipbuilding strategy was a presentational dog’s breakfast. The then Secretary of State, the right hon. Member for Sevenoaks (Sir Michael Fallon), claimed six times in the Chamber that there was a frigate factory on the Clyde. While he was on his feet in the Chamber making that claim, GMB officials were taking Scottish journalists around the proposed site, which was rubble and ash. There is no frigate factory on the Clyde. It was a presentational disaster for the Government.

I add my support to that expressed already for the argument that there is no need for the Royal Fleet Auxiliary Service ships to go to international competition. The reason no British yard has yet asked to be considered is that they believe the work will be sent out internationally; that is inevitable. As has been said, there would be clear economic benefits from building those ships not just for the local economies of the places where they could be built, in a modular format, but from the tax and national insurance take.

I also want to add to concerns expressed about the Type 31 frigate. It seems to me that the price is setting the capability of that ship, vessel or whatever we call it. The suggestion that it could be built for £250 million has already been described as a conspiracy of optimism. We need to know its capability and its role and purpose within the Royal Navy. To put it more simply: is it a complex naval warship? If it is, it should be built on the Clyde, which has been designated by the Government as a specialist shipyard to build complex naval warships.

[Mr Sweeney]

The hon. Gentleman says that the Clyde has that designation, but in reality, under the terms of business agreement, it was extinguished in 2014, although that has not been explained. Why did the rationale change? It makes sense to build all the complex warships on one integrated site where all the learning curves, benefits and efficiencies are concentrated. Why has that changed?

[Chris Stephens]

I think that is a question for the Minister. We need to know the reason, and I shall explain why. I understand that the only country with more than one specialist shipyard is the United States of America. That is probably no surprise given the size of the US Navy. We need to know such things, because recently there was an accident at sea involving a US Navy ship. If it had been built to commercial standards rather than by a specialist yard the collision with another ship would have been a real disaster. The model elsewhere, especially in Europe, is that one specialist shipyard builds complex naval warships.

There is a contract for three Type 26 frigates on the Clyde and I ask the Minister to confirm that the other five will be built there. There is a feeling in the yards and the trade unions that represent the workers that there has been a roll-back on delivering on promises.

I echo the points that the hon. Member for Glasgow North East made about shipyard construction. If the Ministry of Defence is concerned about economies and efficiencies and similar issues, it has a role to play in investing in shipyards and speaking to companies. The Clyde should have a frigate factory, and there is a role for the MOD to play in that.

The national shipbuilding strategy needs a bit more work. This is the first opportunity that hon. Members have had since the statement to raise concerns, and I hope that the Minister has listened carefully and will be able to respond to many of the points we have made.

[Douglas Chapman (Dunfermline and West Fife) (SNP)]

It is a pleasure to serve under your chairmanship, Ms McDonagh. I thank the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) for his significant move in bringing the debate to the Chamber today.

Shipbuilding, as hon. Members know, is a key part of our industrial base. Although the industry has undergone much change in recent years, including to the number of people involved in it, it is still a key element of our industrial heritage. The national shipbuilding strategy that was introduced last September gave some rays of hope to the industry more generally. Sir John Parker recognised that a steady drumbeat of orders was crucial if investment in technology and skills was to make new-build projects more competitive, and that the sharing of risks between yards would give flexibility and speed to help in meeting our aspirations to renew our, albeit diminished, naval fleet. On that last point, there has been a debate about the sense of sharing work between yards, and perhaps that is a debate for another day. The proof of the pudding, for the national shipbuilding strategy, will be in the eating. Already the signs are not good.

There is no clear sign that a drumbeat of orders will be forthcoming at a sufficient pace to give some surety to the industry. As workers on the Clyde are all too aware, we have already witnessed the number of Type 26 frigates being reduced from 13 to eight, and then the placing of an order for just three. My good friend the Chair of the Defence Committee, the right hon. Member for New Forest East (Dr Lewis), cited the example of the Type 45s, which started at 12, were reduced to eight and ended up as six. The direction of travel in MOD thinking is a matter of some concern. The only drumbeat that is evident to me is the one to which Type 23s will come out of service, starting in 2023 with HMS Argyll and ending 13 years later, in 2035, with HMS St Albans. That is a steady drumbeat for the withdrawal of ships from service; we need one for a process going in the opposite direction. Indeed, the previous First Sea Lord said that that time scale for the Type 23s was not extendable. If we are to maintain 19 surface frigates and destroyers at sea or in a state of readiness, something needs to give from the Minister’s office.

[Mr Sweeney]

The hon. Gentleman mentioned sustaining the drumbeat. Does he agree that there is an unnecessary constraint on that because of the arbitrary in-year spend profile that the MOD is lumbered with? The key to unlocking that is the Treasury, which can adapt its method of financing huge generational programmes for things such as complex warships. Those are unique in relation to the way the Government buy kit. The undertaking is huge and unique and should be financed in a way appropriate to the project.

[Douglas Chapman]

I know that the hon. Gentleman is very experienced in such matters and I am sure that he has considered it long and hard for a number of years, both as an industry professional and as an MP. It is obvious, given the amount of investment being put in, that it must be done in the long term, and looking at the project overall rather than as its component parts. I agree with the hon. Gentleman.

The Government’s watchword has been that we must live within our means. The Tory manifesto in 2017 spoke of meeting the NATO target of at least 2% of GDP going on defence spending, and increasing defence spending by at least 0.5% over inflation each year. According to the Institute for Fiscal Studies, it has been cut in real terms since 2010-11 by some 13%. That has resulted in a massive black hole of around £20 billion. Big-ticket items such as F-35s are purchased in US dollars, and only one carrier can be used at a time. Last night, Max Hastings said on “Newsnight” that the Dreadnought has an outdated capability.

All that has contributed to the black hole with which the Ministry of Defence currently has to cope. Such things have pride of place in the Government’s strategy, but in the current financial climate it is a case of pride coming before a fall because the budget for them—and for many other things, such as the P-8s, which are also purchased in US dollars—is simply unsustainable. Decisions that would offer hope and a future to the likes of the Clyde, Rosyth, Appledore and Tyneside are delayed, and we miss the chance to synchronise the drumbeat that would secure jobs, skills and investment.

If we are to “live within our means” as the Government mantra suggests, the MOD either needs to find more money, or something else has to give. The SNP would choose to get rid of nuclear weapons. Think of the opportunity-cost benefit if Trident, or Dreadnought—call it what you will—was not a consideration in our defence budget. How much would that release for more conventional forces? How many more surface ships could we start to build to create a real drumbeat of orders? How much more money for cyber, land forces and the Royal Air Force? Is it not madness that we have a NATO ally with nuclear weapons just 20 miles off our coastline? In trying to satisfy the most pro-nuclear lobby in the House, could not that capability be shared between those two adjacent NATO nations, instead of their both paying top dollar for it? If we can share a tapestry, as I believe we are about to do, who knows what other things we could share on a larger scale? If we are to meet the key dates for bringing the Type 26s and Type 31s into service, something has to give. The Government cannot keep delaying orders, lengthening the pace of decision making, and not making savings in the budget to allow contracts to be signed, sealed and delivered.

SNP Members long for the day when Scotland becomes an independent country that is responsible for its own defences. Small nation Norway has a shipbuilding industry order book as long as your arm, and it has also bought into F-35 and P-8 capability. That can be done even with a small nation budget. Last week, small nation Denmark agreed to increase its defence budget by some 20% to meet the threats that the Danish people might face now and in the future. Small, well-equipped, effective, flexible, good partner nations can play their part in the defence of Europe both individually and through NATO.

Finally, while Scotland is still a constituent part of the UK, I urge the Minister to make surface shipbuilding his priority. In my constituency, workers at Rosyth have delivered carriers and a wide range of refit projects on time and to budget. We now have an opportunity to deliver the Type 26s, Type 31s and the fleet solid support ships. The message is simple: let us make the national shipbuilding strategy a working document that encourages the engineering talent of our nation to get on with the job, at pace, and with that vital steady drumbeat.

--- Later in debate ---

[Guto Bebb]

The value of the strategy is in ensuring that we have a British-owned design. The whole strategy is building on the manner in which the aircraft carriers were built successfully—the block-building capacity. That is the strategy we have undertaken, and it will pay dividends.

The third element is exports.

[Mr Sweeney]

Will the Minister give way?

[Guto Bebb]

I cannot, I am afraid; I only have three minutes left. We identified that the export market is crucial. Having the export market allows us to look at cost controls and the ability to create savings within the programme. It also allows the United Kingdom to show once again that we have the ability to design and deliver ships internationally. For the MOD, the whole effort in identifying the support for the shipbuilding strategy is about building capacity and ensuring we are in a position to target other markets. I hope that Members will join the Ministry of Defence and the Government in ensuring that the advantages of the Type 26 are made known to potential customers in all parts of the world.

The other issue I want to touch on is a key success for the strategy, which is the partnership approach. To return to Sir John Parker’s original point, the strategy hinges on the strength of the partnership between the Government and the sector. It is about our collective ability not simply to improve productivity and develop the product that the international market wants to buy, but to continue to develop the skills and the talent to keep the industry firing on all cylinders. That is exactly what Members have been asking for, it is absolutely what I want to contribute in my role in the Ministry of Defence, and it is the purpose of the shipbuilding strategy. Where we need to refine or take on board the advice and guidance given to us by colleagues, we will do that, because the aim of the strategy is to ensure that we leave the shipbuilding sector in a better place than we found it. I am confident we can do that, but we need support from all parts of the House.

I hope we are building on firm foundations. We are looking to move to the future with a strategy that is not starting from scratch, but builds on our strengths and reputation, while identifying that we have to rectify the fact that we have not sold a warship in 40 years. We have to be confident that what we have to offer is cutting edge. It is about working with the industry, which has a reputation to live up to and has contributed so much in so many parts of the United Kingdom. We need to ensure that the industry is capable of producing ships of value to the UK and the Navy while competing internationally and making a cutting-edge contribution at the world level.

Members have touched on the economic contribution that the strategy can make. I am very aware of that. Ipsos MORI has conducted research that highlights what we need to do. It is available on the Department for Business, Energy and Industrial Strategy website. I am aware that I need to allow the hon. Member for Plymouth, Sutton and Devonport time to sum up the debate, so I will finish. I genuinely believe that we are moving forward constructively. As a Minister, I want to work with Members to ensure that the strategy delivers for the United Kingdom and our Navy.

National Security Capability Review

Paul Sweeney Excerpts

Monday 15th January 2018 Commons Chamber

[Gavin Williamson]

My hon. Friend makes a powerful point. We need to draw these matters to a conclusion as swiftly as possible and make sure that people have a clear idea of our intent—how we are going to develop our armed forces and make sure they have the right resources to deliver everything we ask of them. That is what we aim to do. We have the best armed forces in the world; and we have to maintain that. If we want to ensure that Britain remains a global nation that can project power in every part of the globe, we need an armed forces with the resources and manpower to do that. That is what I aim to deliver.

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

The House learned from the defence debate on Thursday that one of the cruxes of the issue of defence budget pressures is the fact that the defence rate of inflation is considerably higher than the national rate. Year on year, it erodes the purchasing power of defence. However, the Ministry of Defence and the Treasury stopped measuring the defence inflation rate last year. As part of the review, will the Secretary of State commit himself to reinstating measurement of defence inflation, and, in order to be truly fiscally neutral, will he ensure that the annual defence budget increases are pegged to the defence rate of inflation?

[Gavin Williamson]

That is a very important comment. Foreign exchange rates have had an adverse effect on our ability to buy equipment such as the F-35 fighter. We will always be happy to look at suggestions such as the one made by the hon. Gentleman, and I will certainly raise it with the Treasury, but I cannot guarantee the response.

Oral Answers to Questions

Paul Sweeney Excerpts

Monday 15th January 2018 Commons Chamber

[Mark Lancaster]

I would not dream of banging on about the SNP, but it is of course for it to justify to our armed forces personnel its higher rate of income tax. I have yet to be contacted by any RAF pilots wishing to leave, and I will continue to do my best to ensure that they will want to stay in the RAF.

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

20. If he will make an assessment of the potential merits of holding a UK-only competition to design and construct the new fleet solid support ships for the Royal Fleet Auxiliary.

[The Parliamentary Under-Secretary of State for Defence (Guto Bebb)]

The national shipbuilding strategy made it clear that, as non-warships, the fleet solid support ships will be subject to international competition. There are clear cost and value-for-money advantages from maximising competition, which remains the cornerstone of defence procurement. UK companies are welcome to participate in the competition.

[Mr Sweeney]

Daewoo, of South Korea, which is currently building the Tide class tankers for the Royal Fleet Auxiliary, has benefited from unfair state aid assistance from the South Korean Government. Will the Minister give assurances that for the next batch of fleet solid support ships, any shipyard worldwide that is benefiting from unfair state aid will be excluded from the competition? Even better, will he make a commitment that UK shipbuilders will be able to bid for that on that basis?

[Guto Bebb]

I thank the hon. Gentleman for his question. The point I made in my initial answer is very clear: we believe that competition is a good thing. That means fair competition, so we will be more than happy to look into the details of his comments. However, we do believe that competition on this issue is the best way forward.

Defence

Paul Sweeney Excerpts

Thursday 11th January 2018 Commons Chamber

[Vernon Coaker]

I thank the hon. Gentleman for his advice. I am sure that he has read the whole motion, which says that expenditure should be maintained

“at least at current levels”.

This is the problem that I have in trying to be conciliatory. I tried to put together something that everybody would agree with, but perhaps I should have been a bit stronger. I take the admonishment, but I did say “at least”.

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

My hon. Friend refers to maintaining a fiscally neutral position in defence spending. Does he recognise that in the past few years defence inflation has been 3.9%, on average, whereas the background GDP deflator has been only 0.8%? We are seeing a huge erosion of the effective purchasing power of the defence budget every year that is eroding our capability every year.

[Vernon Coaker]

My hon. Friend knows, from his own background in the defence industry, the importance of the point he has made. It is not just the headline inflation figure but the real inflation rate we face that needs to be addressed when we make any spending decisions, so the point is very well made. If I may, Madam Deputy Speaker, I will speak for just a few more minutes.

We find ourselves in an incredibly serious situation, given that a Defence Minister is reported to have threatened to resign if the Army numbers are reduced any further. Will the Government rule out any further reductions in troop numbers below the 82,000 figure? The Army is already 4,000 below that figure, recruitment and retention in our armed forces as a whole has reached crisis point and the current deficit in the number of service personnel needed is 5.6%. I say to the Minister that central to this—I know the Government have made some noises about it—is lifting the 1% public pay cap for our armed forces. We should ensure that something is done about it as soon as possible.

What about the cuts to training that we have all read about? The Government have confirmed that a number of training exercises have already been cancelled for 2018, largely due to costs. According to a parliamentary written answer I have seen, those include Exercise Black Horse and Exercise Curry Trail, which involves jungle training. Have we now abandoned the foolish idea of cutting the marines by 1,000 people, and of getting rid of HMS Albion and HMS Bulwark, which would mean we did not have the ability to mount beach landings? As I have said, the Government say that this is speculation, but the Minister now has an opportunity to rule out such things; he could say that this is speculation, that these things are not going to happen and that this Government will not let them take place.

Following on from the point made by my hon. Friend the Member for Chesterfield (Toby Perkins), all of this is taking place against the backdrop of continuing financial pressures on the MOD’s £178 billion 10-year equipment plan. The National Audit Office has said:

“The risks to the affordability of the Ministry of Defence Equipment Plan are greater than at any point since reporting began in 2012”.

That is surely right. The plan relies heavily on efficiency savings being made in order to make ends meet. The MOD’s permanent secretary has stated that there is a need to save £30 billion over a 10-year period.

The 10-year equipment plan for the MOD does have amazing new equipment for our armed forces—new frigates, new planes and the Ajax fighting vehicle—and our defence companies provide massive employment opportunities, including apprenticeships. Many areas depend on this military spending, as well as businesses such as BAE, Airbus, Thales, Raytheon, Babcock and many others, including small and medium-sized enterprises. They need certainty in their orders, however, and regular orders to maintain their skill base, and the questions raised by the Defence Committee and the National Audit Office about affordability and efficiency savings cannot just be dismissed. The refreshed defence industrial strategy must be something that makes a tangible difference.

--- Later in debate ---

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

I suspect you may agree, although you would never be ungracious enough to say it, Madam Deputy Speaker, that sometimes debates in this place can go on a bit. But we have heard a genuinely informative and at times inspiring series of contributions today, and it has been a pleasure to sit through and listen to the debate, almost in its entirety. I, like perhaps one or two others, may not have the privilege of winding up a debate any time soon from the Front Bench, so it is a privilege to be the last speaker from the Back Benches in this debate.

[Mr Sweeney]

Almost.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

For the avoidance of doubt, there is still one hon. Member to come and I have not forgotten him.

--- Later in debate ---

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

Thank you, Madam Deputy Speaker, for the opportunity to contribute to this magnificent debate in which we have heard a series of robust, resilient and passionate contributions, not least from my immediate predecessor in speaking, my hon. Friend the Member for Barrow and Furness (John Woodcock). He represents a fine shipbuilding town that has a critical stake in the future of the defence equipment programme.

I think it is fair to say that there has been consensus, and that it is a source of great dismay, among everyone present today that every year of this Government has seen a steady decline in defence spending as a percentage of GDP, from 2.4% in 2011 to 1.9% in 2016. Not only has it declined in every year of this Government, but it is lower than in any year of the previous Labour Government. Those figures, damning as they are about the Government’s real commitment to defence, belie the true criticality of the situation. A letter published by former defence chiefs during the general election last year called the 2% target “an accounting deception” and added:

“Most analysts…agree core defence expenditure for hard military power is well below 2%.”

Not only is real defence spending well below the purported 2% target minimum, but its effective purchasing power is being eroded year on year; as many Members will know, the defence rate of inflation runs well above the national rate. In 2015-16, for example, the defence inflation rate was 3.9%, the highest since 2010, while the national GDP deflator was just 0.8%. That relentless pressure on defence resources explains the litany of cuts stemming from the 2010 and 2015 strategic defence and security reviews. Most notable in its absurdity has been the scrapping of the Nimrod MRA4 programme mere months before it entered service, squandering £3.4 billion and leaving the UK with no maritime patrol aircraft for at least a decade.

In recent months, the Army has been cut by a fifth, wages have been frozen for a sustained period and no Royal Navy ships have been on patrol in international waters over Christmas for the first time in history. That is an absurdity and a really depressing situation. We continue to see the playing out of chaotic and wrong-headed thinking on procurement of defence, most notably in the recent national shipbuilding strategy. Yesterday, I had the privilege of chairing the latest meeting of the all-party parliamentary group on shipbuilding. We heard further testimony about the urgent need to improve key elements of the strategy if we are to achieve the best effects possible for our national shipbuilding sector.

Key themes seem to be emerging from the ongoing process of discussion with key stakeholders in industry and in the defence community. The national shipbuilding strategy must both define and outline measures to safeguard key industrial capabilities. It is breathtaking that the strategy has taken no steps to define the minimum sovereign capabilities that we need to sustain as a nation in the shipbuilding industry or to prescribe how we achieve and sustain those capabilities.

The strategy must also commit to investment that will ensure that those key industrial capabilities, once defined, are modernised to be world class. That was the case under the previous defence industrial strategy created by the Labour Government in 2005; it designated that the Clyde shipbuilding industry would be the key deliverer of the nation’s complex warships and prescribed a solution that would allow that industry to become world class by developing what was called a frigate factory or modern dock facility. That would deliver an integrated, consolidated site achieving the efficiencies necessary to deliver the defence capability for the Navy at an effective value for money cost.

We also recognise as a result of this process that a distributed block build strategy as defined by the national shipbuilding strategy is not suitable for frigates such as the Type 31E as it will actually drive up unit costs to manufacture; they would best be built in that consolidated world-class facility, with the benefits from learning curves and efficiency from integrated production. The national strategy must also recognise clearly that there is a huge opportunity for that distributed block build strategy in the next tranche of royal fleet auxiliary ships to be procured: the three fleet solid support vessels with a displacement of 40,000 tonnes—a scale suitable for such a strategy. No one site in the UK would be capable of building such a ship alone. That is the key opportunity: to use that distributed block build strategy to sustain shipbuilding capacity across all the multiple sites in the UK and maintain the resilience of the defence supply chain. I would like to insist that the Minister consider applying the treaty on the functioning of the European Union article 346 protection in the case of the new solid fleet support ships to ensure that there is a UK-only competition to build those new complex royal fleet auxiliary ships.

[Mr Seely]

I am interested in what the hon. Gentleman says as I have the same problem. Does he agree that, as well as having shipbuilding as a core strategic industry, we need to keep radar capacity in my constituency and others? We need radar demonstrators to ensure that we continue development of radar in this country for those ships in the next 50 years.

[Mr Sweeney]

I thank the hon. Gentleman for that excellent contribution. What he says is absolutely critical. When we think of shipbuilding, we often just consider the hull of the ship. However, when we see a ship launch into the water for the first time, we are seeing perhaps only 8% of the value of the overall project, even though structurally it looks like much more. The real value is in the ship as a platform for multiple other high-value defence capabilities. A good example is the multi-function SAMPSON radar. It is manufactured on the Isle of Wight and constitutes a large share of the overall cost of the Type 45 programme. That is where we need the pipeline of capability: not just in the front-end shipbuilding capability, but in the second and third-tier supply chain.

Our RFA capability provides an opportunity to pump-prime our national shipbuilding capability. According to the latest figures compiled by the Fraser of Allander Institute at the University of Strathclyde, shipbuilding on the Clyde alone contributes £231 million a year to GDP in the UK and—critically—generates, in addition, a multiplier of £366 million a year across the wider defence supply chain. That includes the facility in the constituency of the hon. Member for Isle of Wight (Mr Seely). It is critical that we use the national shipbuilding strategy to involve that wider supply chain and so maximise the value to the UK economy.

The all-party group on shipbuilding and ship repair yesterday discussed how we gave the contract for the latest fleet support tankers to Daewoo Shipbuilding and Marine Engineering in South Korea. The cost of building them there was equivalent to the cost of building them in the UK, but the price the South Koreans offered was considerably lower than any UK shipbuilder alone could have offered. In effect, the South Korean taxpayers are subsidising the British MOD to build its ships for it. Why on earth would they do that if they did not recognise that it is a major industrial opportunity for them? Surely there must be an opportunity for the South Koreans. They would not do it simply out of generosity or altruism; they are doing it because they recognise that it is a core part of their defence industrial capability and national industrial strategy. Perhaps we ought to take a leaf out of their book by having a more active industrial strategy when it comes to defence and including those RFA ships.

There is a further issue in the national shipbuilding strategy: the financing, particularly of complex warships. My hon. Friend the Member for Barrow and Furness mentioned that the previous Chancellor of the Exchequer described defence as no different from any other Government Department when it came to capital expenditure. I take issue with that, as I am sure do many other Members. Defence is unique when it is commissioning complex warships such as the Type 26 and the new deterrence submarines. These two vessels alone constitute two of the most complex engineering projects every built by mankind. They are huge national, generational programmes. The idea that they ought to be constrained by in-year spend profiles is absurd, because it militates against the efficiency of the programmes. They are not managed in the same way as, say, the Olympic games, the High Speed 2 programme, Crossrail or any other large-scale infrastructure project. They are arbitrarily constrained by Treasury limits on annual spending. It is critical that we change that—this is a cultural thing in the UK—if we are to achieve the best opportunity for defence. That has to be tackled on a cross-party basis.

When I worked at BAE Systems, innovations for the Type 26 programme, which included changing to spray-on insulation, using LEDs and replacing non-structural welding with adhesives, were constrained because the MOD was not willing to adapt and innovate and apply new standards to its shipbuilding programmes. That demonstrates that it is the customer that is sclerotic in its approach to innovation in new programmes. It drives costs into projects and militates against innovations that would save costs in the long term. Those short-term constraints cast a long shadow through the life of the programme and build in an overall cost.

That is the reason for the attrition we often see in programmes such as the Type 45—originally 12 ships were meant to be built; that was cut to eight; and finally six ships were built. There is an optimism bias at the start, followed by annual constraints on spend and a structural rigidity built into the programme that fails to adapt as it goes forward and innovate with new products as new technologies emerge. That approach also insists on arbitrary competition in the supply chain, when actually long-standing relationships can be established there—for example, with gear box manufacturers and engine builders—that can ensure a commonality of approach and adaptability and enable ships to be built more efficiently. A year-zero approach for every programme duplicates costs and adds complexity that could easily be avoided.

All that ought to change. We have a huge opportunity. We have seen the bigger picture. The root cause is the relentless decline in defence spending as a share of GDP. The Chair of the Defence Select Committee mentioned that it has halved as an overall percentage of national wealth in the last two decades or so since the end of the cold war. That is the root cause, but we could certainly provide mitigation in the meantime by more efficiently managing the remaining resources we do receive and managing our defence equipment programme in a more resilient and innovative way.

Hopefully I have presented some practical opportunities to improve the national shipbuilding strategy that can help us to achieve a future fleet of the scale and capability that we need to sustain British military power around the world in the coming decades. I look forward to the Minister offering his view on that.

Oral Answers to Questions

Paul Sweeney Excerpts

Monday 27th November 2017 Commons Chamber

[Mr Ellwood]

Mr Speaker, I join you and the Secretary of State in congratulating Prince Harry and Meghan on the announcement of their engagement. I had the privilege of working with Prince Harry in Toronto this year. The Invictus games are absolutely his project. They started in London and continue next year in Sydney. They give those who perhaps have given up on life a new chapter through sport. Prince Harry is to be hugely commended for the work he does, along with the rest of the royal family, in supporting our brave armed forces personnel and their families.

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

T5. The Secretary of State might be aware that in 2009 the terms of business agreement signed between the MOD and BAE Systems secured the future of complex naval shipbuilding in this country by ensuring a commitment to invest to create a shipbuilding infrastructure in the top quarter of all shipbuilding capabilities world wide. In the recently published national shipbuilding strategy, that commitment is no longer given. Will he confirm that the commitment in the terms of business agreement to creating a world-class shipbuilding industry remains?

[The Parliamentary Under-Secretary of State for Defence (Harriett Baldwin)]

Of course I can confirm that we have a commitment to a world-class shipbuilding industry. Indeed, the shipbuilding industry in Scotland has a pipeline of work going out two decades.

UK Amphibious Capability

Paul Sweeney Excerpts

Tuesday 21st November 2017 Westminster Hall

[Ruth Smeeth]

I could not agree more. Having visited our Royal Marines in the Arctic to observe their training, I know how important that is for not only our own capabilities but the partnerships we build with other marines from our allies.

It has been suggested that the role of HMS Bulwark and Albion could be replaced by our two aircraft carriers or a cheaper Royal Fleet Auxiliary Service offering, but that is not what either is designed to do.

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

This comes after the loss of a landing ship dock auxiliary from the Royal Fleet Auxiliary Largs Bay to Australia in recent years and the pending decommissioning of HMS Ocean without any formal like-for-like replacement. The aircraft carriers are unsuitable for subsuming that role as a landing helicopter dock ship. Does my hon. Friend agree that that in itself—never mind the loss of the Albion and Bulwark LPDs—should be a matter of criticism and scrutiny in the House?

[Ruth Smeeth]

My hon. Friend has pre-empted the next paragraph of my speech. Why on earth, having spent £7 billion on new aircraft carriers, would we use them in this way? It is a waste of capability and an appalling use of the cutting-edge platform we have just built. As importantly, they do not have the capacity to carry or launch amphibious landing craft, and their holds are not designed to meet the specific requirements of the Royal Marines with regard to kit and platforms. They also cannot be used independently of the fleet and, as I think we are all aware, they cannot be deployed very quietly.

--- Later in debate ---

[Wayne David (Caerphilly) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Gray. I congratulate my hon. Friend the Member for Stoke-on-Trent North (Ruth Smeeth) on securing this important debate and on her first-rate speech.

This is one of the few Westminster Hall debates I can recall in which there has been unanimity—well, virtual unanimity—among contributing Members, a point made well by my hon. Friend the Member for Bridgend (Mrs Moon). Every Member who has spoken in this debate holds the firm view that the defence of this country requires an amphibious capability; if HMS Albion and HMS Bulwark are scrapped and 1,000 Royal Marines are lost, that capability will effectively come to an end. We have heard from right hon. and hon. Members with great knowledge and expertise, whose views largely echo those of leading figures in the armed forces, including the former First Sea Lord, Admiral Sir George Zambellas. His evidence to the Defence Committee last week has already been quoted, but I shall quote it again:

“Nobody in the world of complex warfare, especially for an island nation that delivers force from the sea, thinks that a reduction in the sophisticated end of amphibiosity is a good idea.”

General Sir Richard Barrons, former commander of the Joint Forces Command, said that we run

“the risk of a ridiculous zero-sum discussion...the nonsense of culling marines to buy more sailors”.

He also described

“the idea that if the Navy needs to…find more sailors, the… thing to do is to cull some of the finest infantry in the world—the Royal Marines”

as a “line of madness”. A number of hon. Members, including my hon. Friend the Member for Sedgefield (Phil Wilson), have quoted those words, which I am sure we all agree were powerful and well considered.

Since the end of the second world war, our amphibious capability has been used more than 10 times in military action, from Korea and Suez to the Falklands and Sierra Leone. As my hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard) noted, it has also been used to great effect in humanitarian efforts, including recently in Operation Ruman in the Caribbean. The Royal Marines have been in almost continuous operation in 30 different campaigns. There were pressures to remove our amphibious capability after our withdrawal from east of Suez in the 1970s and early 1980s, but common sense has always prevailed.

Let us not forget that our amphibious shipping and the Royal Marine command brigade were crucial in liberating the Falkland Islands—a point made well by the right hon. Member for Rayleigh and Wickford (Mr Francois) and in the powerful speech of the hon. Member for Aldershot (Leo Docherty). After the Falklands war, it was agreed that the UK needed to maintain a minimum amphibious force, but since the 2010 SDSR we have seen gradual reductions in capacity.

[Mr Sweeney]

Labour’s 1998 strategic defence review defined the optimum capability for amphibiosity in the UK as not just two Queen Elizabeth-class aircraft carriers, but six Point-class sea-lift ships, one landing helicopter dock on HMS Ocean, two Albion-class landing platform docks and four Bay-class landing ship docks. That assumption should not have changed; why has it? Why has the capability been cut since then? We have had no explanation from the Minister.

[Wayne David]

My hon. Friend makes his point well; I agree absolutely. Let us also bear in mind that the marines have recently lost 400 personnel, and it is rumoured that the newly refitted HMS Ocean will be sold to Brazil for a very modest £80 million.

That brings us to where we are today. We learned from the press last week that the new Secretary of State for Defence did not believe that the cuts to Albion, Bulwark and the marines could be justified, and was asking the Treasury for an extra £2 billion to help to fill the gap in the MOD’s finances and ward off cuts to the Navy. However, we read this weekend that the Treasury had given him the cold shoulder, saying emphatically that no more money would be available. Some reports have even suggested that he did not even make such a request to the Treasury.

Will the Minister clarify exactly what is going on? Is it the MOD’s view that—as all hon. Members in this debate have argued and so many defence experts have stated— there is no rationale for effectively ending the Navy’s amphibious capability? If she is prepared to say that, she will have the support of all her party and the Opposition. Surely we all need to recognise that this issue is above crude party politics; it is about our country’s ability to defend itself effectively, which it cannot do without an amphibious capability.

Armed Forces Pay

Paul Sweeney Excerpts

Wednesday 1st November 2017 Commons Chamber

[Mr Paul J. Sweeney (Glasgow North East) (Lab/Co-op)]

Madam Deputy Speaker, thank you for the opportunity to speak in this debate.

I reflect on the values and standards that I was taught in the service. A fundamental one was the notion that credible leadership is derived from serving others and serving the interests particularly of those we lead. This House could demonstrate its leadership and its credibility in the leadership of our armed forces by ensuring that our service personnel have the adequate remuneration that reflects the nature of their service and dedication to our country. Only 33% of service personnel are satisfied with the basic rate of pay, so it is clear that there is dissatisfaction. It is a rather ill-observed point that, just because pay is not the primary driver of someone’s behaviour and career development, it is not important and not worthy of discussion in this House. It is, in fact, very worthy of discussion in this House, and I repudiate those sentiments utterly.

It has been mentioned that the X factor of incremental pay reflects the antisocial nature of the career of regular forces and that it makes up for the fall-off and restraint on pay. But it does not; only a quarter of the personnel surveyed think that it is sufficient compensation for the disruption it causes in their lives. A key thing to bear in mind is that the X factor is not much of an X factor at all.

An interesting observation about service pay that has been made across the House is that service in the armed forces provides a great opportunity for career development, particularly for young people. One of the great advantages of joining the armed forces is that the lower increment for minimum wage does not apply. It would be great if the Scottish National party could reflect that sentiment in ensuring that we continue to extend the opportunity to serve in our armed forces to 16 and 17-year-olds.

[Stewart Malcolm McDonald]

I think the hon. Gentleman is referring to a recent debate on policy change at my party’s conference. I am sure he will note when he gets to his feet that I argued against that change in policy.

[Mr Sweeney]

It is reassuring indeed that the SNP spokesperson on defence matters continues to uphold the principle that young people should be allowed to join the armed forces and develop their careers in the service. That is most welcome.

Consider a serviceperson on the lowest basic rate of pay. When on 24-hour deployments—on exercise or operations—their basic pay could actually go down to a notional value of £2 an hour. Is that really the value of our armed forces when they are dedicated to that extent? Any plans to remove the increments associated with overseas service are totally unacceptable. We should bear that in mind when we consider appropriate rates of pay for our armed forces. We talk about the great opportunity that a career in the service provides, particularly for skills development, apprenticeships and trade opportunities.

[Sir Mike Penning]

The hon. Gentleman is making a very good point about career prospects and the package. Why was that not in Labour’s motion? Many of us would have agreed with exactly what he is talking about.

--- Later in debate ---

[Mr Sweeney]

We are making the point that, by virtue of that great opportunity for development, these people are very attractive to the private sector. When inflation picks up and private sector salaries respond, we will see increasing pressure on retention in the services, especially if pay continues to lag behind that in the private sector. We need to address the situation urgently if we are to continue making our armed forces capable.

[Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)]

In Plymouth, the private sector is already poaching some of the engineering grades in particular, and pay is one of the reasons why people are leaving the armed services to work in the private sector. Does my hon. Friend agree that that is the case?

[Mr Sweeney]

Yes, I absolutely agree. Engineering and air crews in particular have urgent issues of undermanning in the service.

It is alarming that the entire Regular Army can be comfortably seated in Wembley stadium now that its numbers have fallen below 82,000 and it is 6% undermanned. In contrast, the Regular Army numbered 103,000 when I joined in 2006 and it could not fit into Wembley stadium.

The defence budget has fallen from 2.5% of GDP to under 2% over the term of this Tory Government. There is a chaotic equipment programme. Whether it is Nimrod or the cats and traps on the carriers, fiasco after fiasco has bled resources out of the armed forces through a lack of efficient management of equipment programmes. It is shocking that armed forces pay should suffer as a result.

[The Parliamentary Under-Secretary of State for Defence (Mr Tobias Ellwood)]

I just want to give the hon. Gentleman the opportunity to correct what he just said. It was the Labour Government who chose to abandon cats and traps, and who slowed down the building of the aircraft carrier, which cost over £1 billion on top of the original bill. That is what happened to the aircraft carrier under a Labour Government.[Official Report, 20 November 2017, Vol. 631, c. 3-4MC.]

[Mr Sweeney]

I have to correct the Minister. That is factually incorrect. I worked at BAE Systems at the time. The project was commissioned as a result of the 2010 strategic defence and security review, and £1 billion was utterly wasted before the project was cancelled.

I will quickly draw my comments to a conclusion. The Armed Forces Pay Review Body has highlighted that the 2016-17 pay review was not an increase in real terms at all because of the impact of national insurance increases and the changes to housing cost allowances. From 2010 to present, it actually represents a 5.3% cut in real-terms pay for our armed forces. The reality is borne out by the evidence presented today, and it is comprehensive. We have seen a litany of failure, falling expenditure and stagnating incomes. That leads to a fall in morale. As a result, outflow has exceeded recruitment since 2011. Let us come together in this House today to recognise that there is a vicious cycle of downsizing. We must move towards a virtuous cycle of investment that will stop the continued degradation of our armed forces and ensure that the operational effectiveness of our armed forces is secure for the future in a very dangerous world.

--- Later in debate ---

[Mr Ellwood]

Thank you, Mr Deputy Speaker. I have a huge amount of respect for the work that the hon. Gentleman did, and continues to do, in supporting our armed forces, but the numbers are clear. The growth of the deficit since 2000, moving forward, increased, increased and increased; and that is the black hole that I was actually referring to.

I think we have milked this subject enough for the moment, so I will move on. The hon. Member for Stoke-on-Trent North (Ruth Smeeth) spoke about the importance of the covenant. She is in her place. I thank her for the work that she does on this important matter and I would like to meet the Committee at the earliest opportunity.

My right hon. Friend the Member for Hemel Hempstead (Sir Mike Penning) spoke of the package of financial support, which is very important. I have touched on that. The hon. Member for St Helens North (Conor McGinn) said that the reserve numbers are increasing. My hon. Friend the Member for Aldershot (Leo Docherty) spoke with passion about his constituency. It was a pleasure to visit the event to commemorate the 35th anniversary of the Falklands campaign. The hon. Member for Clwyd South (Susan Elan Jones) spoke about the importance of the Royal British Legion. I am really pleased that the Office for National Statistics has agreed to include a tick—a requirement—for veterans and I am pleased that everyone has worked towards that.

My hon. Friend the Member for Cheltenham (Alex Chalk) spoke about the importance of the equipment that we have—£178 billion is being spent on that. He also said that the total cost of the promises that Labour has made so far under this Government is £500 billion. I do not know where that money will come from.

The hon. Member for Glasgow North East (Mr Sweeney) spoke about cats and traps. I want to make it clear that the electromagnetic aircraft launch system—EMALS—was being promoted. That simply had not matured in time. There was no way that we were going to buy F-35Cs for the aircraft carrier; they could not have been launched off it because there is no steam.

[Mr Sweeney]

rose—

[Wayne David]

rose—

Armed Forces (Flexible Working) Bill [Lords]

Paul Sweeney Excerpts

2nd reading: House of Commons
Monday 30th October 2017 Commons Chamber

[Mr Paul J. Sweeney (Glasgow North East) (Lab/Co-op)]

It is a real privilege to follow the hon. and gallant Member for Aldershot (Leo Docherty). His constituency has a fine military tradition, and his speech was a very illuminating and interesting discussion of the Bill. I echo the sentiments expressed by Members on both sides of the House in welcoming the principles of the Bill. On reflection, I think that it is part of the longer-term trend we have seen in our armed forces in recent years.

I want to reflect on joining the Territorial Army at the age of 17 in 2006, the year in which the Royal Regiment of Scotland was formed. At the time, it was part of a very controversial exercise in the restructuring of the armed forces and the Army in particular. The change to the regimental system was met with much dismay among those who held true to the traditions of the regimental golden thread, as it was known. However, after a decade of experience of this new multi-battalion regimental system, it has broadly been seen as a successful development in the British Army’s history, primarily because it has offered increased career flexibility for those serving in the multi-battalion regiments. That move to a true one Army structure was excellent, and this feels like a continued evolution of that agenda.

The Bill could look at a more formalised structure between the regular and reserve components and how that might play out. My friends and colleagues in the Army reserves, for example, have transitioned between regular battalions and reserve battalions. While they have developed great experience—I include myself in that—in their attachments to regular battalions and serving alongside them in exercises around Europe, a stigma is still attached to reservists transitioning to more long-term service with regular battalions. For example, someone who is commissioned on a reserve commissioning course at Sandhurst cannot then take a command role in a regular battalion, as they are seen as not having had the necessary training to develop their competence. I would like to see that opportunity explored in more detail during the passage of the Bill. It is an excellent opportunity for greater synergy between our regular and reserve forces which we should examine.

One of the key developments in recent years in the multi-battalion structure for infantry regiments has been the end of the arms plot, which was one of the worst experiences for regular soldiers. The entire battalion would be uprooted, lock, stock and barrel, every couple of years and moved to a different part of the UK, to Germany or even to Hong Kong. Their family lives and the careers of their dependants were uprooted, and it was viewed as a pernicious aspect of serving in the armed forces. It is great that Labour brought in reforms to the Army’s structure that ended the arms plot and stabilised the location of Army battalions. The Bill is a further development in providing stability for families who rely on building a relationship with the local community without a unit, and that is welcome.

I would also like to see greater emphasis on the legal status of those pursuing civilian opportunities while still serving in a regular unit. I know from personal experience that many reservists experience regular discrimination when looking at civilian career opportunities. I remember when I was at university looking for a part-time job. I could tell that the interviewers were not interested as soon as I mentioned being a reservist, and I was not offered the job. It is important that we promote the skills and experience of service in the reserves and that we provide legal protected status for such service. That should feed into how the Bill treats regulars transitioning to some form of civilian employment as well as serving in a regular capacity.

I was heartened to hear that, in surveys, 32% of regular personnel consider that the change would be a positive development and encourage them to retain their career development in the armed forces. That is encouraging.

[Dr Caroline Johnson (Sleaford and North Hykeham) (Con)]

On the point about retention, as a member of the armed forces parliamentary scheme, I have been very impressed by the dedication, skills and bravery of the armed forces, but there is no doubt that the pressures of balancing family life with a career in the forces are hard, particularly for those who move around frequently or do long tours of duty. In welcoming the Bill, does the hon. Gentleman agree that it will improve the retention of not only reservists but those in the Regular Army?

--- Later in debate ---

[Mr Sweeney]

I am sympathetic to the sentiments that the hon. Lady has offered the House on that aspect of the Bill. In fact, this weekend a close friend celebrated an early Christmas with his infant daughter because he is about to deploy on active service in Afghanistan—an insight into the extraordinary depth of the commitment and sacrifice that members of our armed forces make. They are unlike any other public servants, and we should recognise that—as other hon. Members have said—when it comes to respecting the covenant, the pay cap and the remuneration of our armed forces. They serve without fear or favour 24 hours a day on exercise or operations overseas. Does the compensation they receive from such a severe dislocation from civilian interaction and family life really reflect the commitment they make? We should also consider that broader point.

What effect will the Bill have on progression in a career in the regular forces? Consideration for promotion in the reserves, for example, is largely predicated on how often someone can commit to attending career courses, weekend training events and annual camps. Given the demands of civilian career development, progression within reservist forces can be prejudiced. I wonder whether that subtle effect also has an impact in the Regular Army when people are considered for promotion—it might be a lowest common denominator effect when it comes to progression in the ranks.

I would like to address the cap badges issue and how this might play out in different branches of the service. The right hon. Member for Rayleigh and Wickford (Mr Francois) made a critical point about the severe under-manning, especially in key pinch-point trades and services in the armed forces. Ironically, those are areas where we could leverage skills into the services from civilian life. It would be interesting to see more scrutiny of how the Bill could help to promote the adoption of flexible working in different branches of the Army. For example, the infantry or the cavalry have a very traditional, bottom-up career progression built on experience and the highly specialised nature of their roles, and there might be a better opportunity for the infusion of civilian talent, skills and experience in some of the more technical arms and services—for example, the intelligence corps, cyber and the Royal Electrical and Mechanical Engineers might benefit from greater cross-pollination between the private and defence sectors and the armed forces. That might be an interesting way to explore potential scenarios and the impact they might have on certain trades or cap badges.

When the Army structure was proposed back in 2006, with the end of single battalions and the move to multi-battalions, we also saw a reduction in the regular battalions of infantry from 40 to 33. That was an unfortunate exercise. Although we realised more capability from ending the arms plot and the transition in roles of each battalion, we lost a critical mass of capability in the Army as a whole. As for the reforms to the reservists, I remember vividly serving in the Territorials one year when we were told to stop training because the MOD had run out of money—an atrocious example that demonstrates the contempt that the reserves were held in for a long time. It is nice to see that that has now changed and the Army Reserve, as they are now known, are critical and integrated into the Army’s capability.

I would like to see greater opportunities explored, so that we do not just use the Bill as a cost-cutting exercise but as a way to enhance the capability of our armed forces, especially our Army, given that the staffing and manning levels have fallen below the target of 82,000 to 80,000. If the Bill can be a harbinger of a greater enhancement of the armed forces in the future by harnessing the potential of our people in both civilian and military life, to add to our military capability, it would be a welcome move forward for our armed forces. Many of our regulars experience pressure and stress when moving to civilian life, and perhaps the Bill could be used as an opportunity to help the transition of people leaving the armed forces to a civilian career opportunity, instead of the cliff edge of being thrown out or leaving the Army suddenly after 20 or more years of institutional service. I would welcome it if those aspects could be considered in more detail during the passage of the Bill, and I am happy to support its progression.

--- Later in debate ---

[Luke Pollard]

We should send a clear message from this House that those from the LGBT community are welcome in the UK armed forces. That sends a strong signal to our allies and opponents about our clear vision for an armed forces that represents all parts of our community.

At the heart of the Bill, though, there is a need for greater recognition of the personnel crisis in the UK armed forces. It is right that we reflect the different reasons people join the armed forces and their different rationales for continuing to serve their country in the way we structure both the recruitment regulations and the terms and conditions. Hon. Members have spoken already about pay, but it is worth my looking again at that and at terms and conditions.

People do not join the armed forces for the pay, but it is definitely a contributing factor, especially at key life moments—for instance, when people are expanding their family, looking to invest in property or going on the housing ladder. Hon. Members on both sides of the House have spoken about armed forces housing. In Plymouth, this remains a national scandal on which we need to do much more. CarillionAmey is not doing its job properly. It is important that the Government send a strong signal to CarillionAmey that the service it is offering is simply not good enough and that our armed forces families deserve the very best.

One of the keys to the personnel crisis are the pinch points, particularly in the Royal Navy, which is of great interest to the patch I serve, as I represent Devonport dockyard and naval base. I am talking about engineers and nuclear skills in particular. As we look to invest more in our armed forces and buy ever more expensive bits of kit, it is vital that we recruit and retain the talent to make sure that those bits of kit can be used in the way they are supposed to be used. I am concerned, however, about our continuing skills shortage in engineering grades.

It is important that we recognise our friends and NATO allies, especially those from America, who have transferred personnel to serve in our UK armed forces in engineering grades. In particular, I welcome the transferring of people from the US Coast Guard to serve in the Royal Navy. There remains much more to do, however, and I would welcome a greater effort from Ministers in terms of how we invest more in engineering. That is especially a concern in nuclear engineering skills, particularly as the new generation of nuclear new build power stations comes online and there is a temptation to poach people by offering them better pay, terms and conditions and lifestyle.

[Mr Sweeney]

My hon. Friend makes an excellent point about skills, particularly in critical areas such as nuclear engineering. It is worth noting that generally during the build of a large complex programme, such as the Astute-class submarine, there are large-scale secondments of personnel from the Royal Navy, working alongside engineering staff with defence contractors such as Rolls-Royce or BAE Systems. Essentially, they are on a job-share initiative between the defence contractor and their normal service location. Might the Bill be an opportunity to formalise that arrangement, increase their compensation and build their industry experience as well as their service experience?

[Luke Pollard]

It is crucial in structuring the regulations and operations of armed forces that we recognise the interplay between civilian and military life. It is not simply a one-way street; there are stages in people’s careers when they might move between those two different lifestyles.

Flexible working can support the retention and recruitment of military personnel and also add two other important factors: the ability to return to our armed forces and then for their service to be recognised and properly supported. Hon. Members on both sides of the House have spoken about the need to recruit people and to attract the best and brightest from a variety of backgrounds and to retain their service. There are an increasing number of examples, however, certainly in Plymouth and in the Royal Navy, of armed forces personnel who have left the service returning in a variety of different contracts in different roles. I hope that the Government will consider specifically what additional support will be needed by people whose previous backgrounds will have been very different, and what can be done to persuade more people to return to parts of the service where there is currently a shortage of skills, particularly engineering skills. I think that Members on both sides of the House agree on the importance of recognition in the armed forces, and there is certainly more to be done about veteran support.

Our armed forces do not operate in a bubble, and the rules and regulations governing recruitment, retention and flexibility should reflect the existence of a more competitive environment. The forces should attempt to be the best and brightest employers, offering both openness and quality, and they should be family-friendly. We should not give flexible working a new status if we are not yet sure about the possibility of stigmatisation. I hope that Ministers will have a think about the definitions that are being used, because it worries me that those who take up the option of flexible working as part of their contracts could be stigmatised by their colleagues, and that a stigma could also be attached to the cultural setting in which they found themselves. I know that that is not the intention behind the Bill, and I hope that Ministers, and others who scrutinise it, will give some thought not only to the definitions, but, more important, to how they can be translated into action to ensure that we can recruit, retain and return talent without that accompanying stigma.

Anyone who travels from Plymouth on Sundays will be familiar with the line-up of new recruits who arrive at the station on Sunday evenings to join HMS Raleigh. That is normally the moment when they have left their families, and they line up in their smartest suits awaiting their first proper day in the Royal Navy. I have spoken to many of those new recruits as they work out which station they should be going to and how they are to get there. I remember, on one occasion, helping a young man to tie his tie, because he was very nervous and wanted to make a good impression.

New recruits join the Royal Navy, and the armed forces in general, for a variety of reasons. Some want a better life than they have previously endured, some simply want to serve, and some want to follow family members or contribute to our country. There are many stories that they can tell about the hope and excitement that they feel. It is important for us, in this place, to create rules and regulations that do not discriminate against those who want to join the forces—regardless of their background, their sexuality or their gender—and to support them throughout the various moments in their lives, and those of their families, that they will experience during their service.

I should like to know how the Government will address personnel shortages, and how those life moments and the requirements of flexible working can be phased and dialled up and down so that we can bring back the talent that we need as and when it is required. My hon. Friend the Member for Glasgow North East (Mr Sweeney) said that flexible working might be a good way of ending the “cliff edge” that is sometimes encountered by people when they leave the services, but we should bear in mind that it could also enable us to bring people back into the armed forces at some future date.

This short Bill is a welcome example of the progress that our armed forces have been making for many years, and I think that it is a step forward, but I also think that a few elements could be tweaked to ensure that it is implemented in the best way possible. I hope that the Minister will think about how we can not only recruit and retain personnel, but return them to our armed forces.

Oral Answers to Questions

Paul Sweeney Excerpts

Monday 23rd October 2017 Commons Chamber

[Sir Michael Fallon]

My hon. Friend and I have made it clear that those who travel to fight with Daesh in Iraq or Syria will have been committing a criminal offence. Daesh is a proscribed organisation, and we have to make sure that if these people ever do return from Iraq and Syria, they do not pose a future threat to our national security. However, they have made their choice: they have chosen to fight for an organisation that uses terror and the murder of civilians as a modus operandi.

[Mr Paul J. Sweeney (Glasgow North East) (Lab/Co-op)]

6. What assessment he has made of recent trends in the size of the Army.

[The Minister for the Armed Forces (Mark Lancaster)]

We are committed to maintaining the overall size of the armed forces, including an Army that is able to field a war-fighting division. While Army recruitment and retention remain challenging, over 8,000 people joined the regular Army last year and since April applications are over 20% higher compared with the same period last year.

[Mr Sweeney]

I thank the Minister for that answer, but in the year I was born—1989—the Regular Army’s strength was 140,000. In 2006, when I joined the Territorials, it was 102,000. Yet, in recent years, we have seen the Army fall below a regular strength of 82,000—the Government’s stated target—to only 80,000, and that includes a 40% fall in the armoured strength of the Army. Does the Minister not accept that this is an unacceptable degradation of British Army strength?

[Mark Lancaster]

No, I do not. It is important to note that the Army is currently 95% manned. I do accept that there are challenges. Having probably the highest employment rate we have had in recent years does not help when it comes to recruiting to the Army. There is also, as we discussed earlier, the changing nature of Britain, which means we have to fight harder to make sure that all parts of society will join the Army. However, this is also about the offer, and I must say that when the Leader of the Opposition says he cannot see a situation where he would deploy the Army overseas, that is hardly a good recruiting tool to get young people who want to join the Army to do exactly that.