Oral Answers to Questions

Debate between Peter Luff and Jeremy Corbyn

Monday 19th December 2011 Commons Chamber

[Jeremy Corbyn (Islington North) (Lab)]

5. What expenditure on the Trident replacement he expects to have incurred by 2016.

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

We expect to spend £3.9 billion on the successor submarine programme by the maingate decision-point in 2016. We have deferred the decision on the future warhead until the next Parliament. We are spending around £900 million a year at AWE—the Atomic Weapons Establishment—on capital investment and running costs to ensure that we can sustain the capabilities to maintain the current stockpile. As a consequence of this sustainment, we will also have the capability to design and produce a new warhead, should that be required. We expect to spend around £8 million over the next three years to examine the condition of the physical infrastructure at the naval bases and current communications systems for the successor submarines.

[Jeremy Corbyn]

By the Minister’s own figures, the Government are proposing to spend £5 billion on the submarine replacement and the preparations for a new missile system from AWE Aldermaston, which means that after the next election the new Parliament will be confronted with the decision whether to renew the Trident system, having already spent £5 billion on it. Does the Minister not think that we are walking—indeed, sleepwalking—into a massive expenditure, after that, of £25 billion on a replacement, plus the running costs? Is it not time we brought this vanity project to an end and cancelled the Trident system?

[Peter Luff]

No, I do not think that at all. In fact, not spending that money would prevent us from preserving the option for the next Parliament to take the decision. The hon. Gentleman is fond of pointing out the problems in respect of the capability for the nuclear deterrent, but let me assure him that the work we are undertaking will have benefits for other classes of nuclear submarines in future— particularly in respect of the primary propulsion systems, for example with the PWR3. There are real benefits from doing this work—not just for the security of the nation in the short term, but for the long term as well.

Trident

Debate between Peter Luff and Jeremy Corbyn

Wednesday 7th December 2011 Westminster Hall

[Jeremy Corbyn]

I know from long experience with CND that nothing to do with CND can be counted as a pecuniary interest. Absolutely no one has ever made any money out of being a CND member. There is nothing financial to be declared, so I set the hon. Lady’s mind at rest. I thank her for her support and membership of CND and for the sincere work that she has done for a long time to try to rid the world of nuclear weapons.

Estimates of the cost of designing and constructing the Trident submarine replacement programme have grown significantly this year, with the MOD publishing figures in the May parliamentary initial gate report that represent a doubling of those in December 2005. The estimated submarine replacement cost has increased from between £11 billion and £14 billion to £25 billion. In addition, the Ministry recently announced significant spending plans for new warhead facilities at Aldermaston, despite officially not planning a decision on replacing or refurbishing the warhead until the next Parliament. That is the question.

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

indicated dissent.

[Jeremy Corbyn]

The Minister shakes his head. It is his head, and he is allowed to shake it, but I hope that when he replies, he will be able to explain why Parliament has not been consulted on spending £2 billion on the Atomic Weapons Establishment in Aldermaston. If my figures are wrong, I am sure that he will put them right—that is the whole point of a parliamentary debate and of parliamentary scrutiny.

As I have said, the new figures announced this year for spending on replacing Trident are going up. The submarine will cost around £4 billion before the construction decision. As I understand it, it will cost £900 million on the concept phase before initial gate, which is from 2007 to 2011; £3 billion on the assessment phase between initial gate and main gate; and £500 million on long-lead items for construction. That will put the cost of the submarine replacement programme prior to main gate somewhat higher than what was spent on the Nimrod programme, which was cancelled in October 2010 after £3.4 billion had been spent on it.

Quite simply, we are moving to an enormous expenditure before a parliamentary vote in, presumably, 2016 or whenever, when all of us might still be Members of Parliament—or when none of us are. There will be a new Parliament, and a different Parliament will make that decision. I could write the speech for the Minister or his successor now. It will say, “We do not want to do it, and we do not like it. It is not good, but we have already spent so much money that it would be a shame to waste it.”

--- Later in debate ---

[Peter Luff]

I note my hon. Friend’s powerful argument. I am sure that it will be borne in mind closer to the time, but at present I can make no commitment about what will happen at the end of 2012 or in early 2013, when the report is due to conclude.

I note that this is the third time that I have debated this issue in this place. We also covered the topic extensively during the strategic defence and security review debate last year. Since assuming Government, my Ministry of Defence ministerial colleagues and I have answered about 180 parliamentary questions on nuclear issues, not to mention a significant amount of public correspondence. In May this year, we published a comprehensive report on the initial gate decision for the successor submarine. We have recently repeated an earlier commitment to make an annual statement on progress to Parliament, and I think that that frequency strikes the right balance. We have published the costs of various aspects of the nuclear programme, such as the Atomic Weapons Establishment, on numerous occasions. Moreover, in May last year, we announced for the first time the overall size of our nuclear warhead stockpile, giving the deepest ever transparency of our nuclear capability. That is hardly a culture of secrecy or sleepwalking.

[Jeremy Corbyn]

I am not quite sure why the Minister is getting into such a bad mood about Parliament asking questions to the Ministry of Defence. That is what Parliament is for; it is why we are here. Will he give us an accurate estimate of how much will be spent on the whole programme, on the initial gate and on the Atomic Weapons Establishment at Aldermaston, before any decision is made in Parliament in 2016? Can he not revisit the idea of a quarterly statement on the vast expenditure that is going on?

[Peter Luff]

It is my intention to do that, but I am conscious of the time. I hope to be able to answer all the hon. Gentleman’s questions.

I should now like to turn to the specific costs of the current and future deterrent programmes. The simple fact is that being a responsible nuclear weapons state requires investment. Submarines and their ballistic missiles and nuclear warheads are extremely complex and require considerable skill and expertise to design, maintain and operate safely, and I make no apology whatsoever for taking seriously our responsibilities for the safe custody of these systems, nor for spending the money needed to do that. That is not to say that we have not closely scrutinised the costs of the programme. Indeed, Members will be aware that we announced last year as part of the SDSR a number of measures to do just that.

I should like to dwell briefly on the different elements of the nuclear deterrent programme. The White Paper highlighted three key areas: the platform, the infrastructure and the warhead. At 2006 prices—I emphasise that it was at 2006 prices—the Department estimated that the platform would cost between £11 billion and £14 billion, and each of the other two elements would cost between £2 billion and £3 billion. Separately, there are also the costs of maintaining and running the in-service deterrent—what we have at present—such as the facilities at the Atomic Weapons Establishment, which I will come to later.

If I may start with the platform—the boats—earlier this year “The Initial Gate Parliamentary Report” stated:

“assuming a four boat fleet, the replacement submarines will remain within the £11-14Bn estimate.”

We made it clear in the report and, indeed, in the White Paper itself that those values are at 2006-07 constant prices, and the report also indicated that, when we take into account inflation, the costs equate to £25 billion. Costs have simply not doubled, as reported on CND’s website; that is wrong. This misreporting of the true position is extremely misleading. Of the £25 billion, we expect to have spent £3.9 billion by main gate. That includes the costs of the concept and assessment phases, and the majority of that work is in the maturation of the design.

With regard to long-lead items, we have been clear that we have minimised spend as far as possible. Over the coming years, we will place orders for different specialist items, which take a number of years to be delivered, totalling some £500 million. That is just 2% of the total purchase cost. We plan to place the order for the specialist high-grade steel only in 2014, so that it is ready for manufacture and cutting in 2016 after the main investment, or main gate, decision. We will not procure any items for the fourth boat until 2016, when the build decision is made. Any accusation that, by purchasing those items, we will be locked into a particular strategy before main gate in 2016 is simply wrong. The simple fact is that these highly specialised components take time to be delivered. Identifying long-lead items is part of any well-run programme, and nothing that we are doing will prevent us from being able to make the right decision in 2016. I should like to explore that at more length, but I am conscious of the time.

With respect to infrastructure, the value-for-money review concluded that no significant investment was needed in the immediate future. To study the infrastructure requirements in detail, we will spend about £8 million over the next three years and will continue to look for opportunities to drive down running costs and the need for any new investment. Despite being at an early stage of the programme, we still expect to meet the White Paper estimate of between £2 billion and £3 billion.

On the third element, my attention was drawn recently to speculation that implied that we had already spent at least £2 billion on a new warhead. That is simply not true. We are investing at the Atomic Weapons Establishment to ensure that we sustain the capabilities that we need to maintain the current stockpile. It is true that that will give us the capability that we need to design and produce a new warhead if and when required, but that is not the purpose of the expenditure. We will take the appropriate decisions at the right time, and Members will recall the commitment in the SDSR not to take any decisions on a new warhead until the next Parliament. We expect a replacement warhead to meet the White Paper estimate of between £2 billion and £3 billion.

Trident

Debate between Peter Luff and Jeremy Corbyn

Tuesday 1st March 2011 Westminster Hall

[Jeremy Corbyn]

The figure I cited was the one that the Minister gave himself, which is £330 million. I asked where the parliamentary authority came from for that expenditure.

[Peter Luff]

I am sorry if the hon. Gentleman’s figures have been misunderstood by the Department. I was told that he said a figure around £1 billion. The authority comes from the vote in the House of Commons in the previous Parliament, established custom and practice and all complex programmes. If he wants a historical precedent, I am told that we bought the oak for HMS Victory 15 years in advance of building it. This is par for the course in major procurement programmes; there is nothing unusual about it at all.

It is quite simply not true to say that large parts of the build programme will have been completed by main gate, nor is it true to say that we will be locked into contracts and that we will have spent so much that we will have to build the boats when we get to main gate. There is nothing in the current programme that will prevent us from making choices in 2016 about what deterrent capability we want or how many boats we might order. It is self-evident from the decisions that we took during the SDSR to refine the replacement deterrent programme, which allowed us to save and defer £3.2 billion over the next 10 years, that our intent is to pursue value for money rigorously and only commit to expenditure as and when it is required. As agreed in the coalition programme for Government, the Liberal Democrats will continue to make the case for alternatives to a like-for-like replacement. Yes, it is true that the concept phase was extended in January 2010, which involved some extra cost, but some costs will be transferred from the assessment phase to the concept phase as a result.

What of the calls for scrutiny of the initial gate business case? Parliament does not routinely review internal Ministry of Defence business cases and I have not yet heard a convincing argument that suggests that this programme should be any different. The initial gate business case is not a grand strategic assessment; that happened in 2006 with the White Paper and the vote in the House of Commons in 2007. The initial gate business case is a technical assessment that presents design choices and programme analysis that is reviewed and agreed by technical, financial and procurement experts in MOD, Treasury and Cabinet Office. What we have committed to do once the initial gate business case has been approved is publish a report setting out the key decisions that we have taken, update Parliament on the latest assessment of cost, and explain the steps that we will be taking in the run-up to the main procurement decision in 2016. I hope that that reassures the hon. Lady.

As this is one of the largest programmes in Government, it will be reviewed closely as we move towards main gate, both in the Ministry of Defence and more widely across Whitehall. As my right hon. Friend the Secretary of State for Defence announced last week, the Government are doing more to tighten up the Ministry of Defence’s internal processes. The Secretary of State for Defence will chair the major projects review board, which by definition will include the replacement submarine programme, and will receive a quarterly report on our major projects to ensure that they are on time and within budget. Where projects are falling behind schedule or budget we will take immediate remedial measures. Those responsible will be brought to account in front of the project board. In addition, we will publish a list every quarter of the major project review board’s “projects of concern”. That way, Parliament, the public and the market can judge how well we and industry are doing in supporting our armed forces while offering value for money to the taxpayers.

Progress on the decisions we have taken during the SDSR, including those on the nuclear deterrent, will be reviewed by the National Security Council. The Government have also established a major projects authority within the Cabinet Office with a specific remit to oversee our portfolio of major projects and assess the health of programmes in it through a combination of quarterly reporting and more focused reviews. The major projects authority will produce an annual report through which Parliament and the public will be able to review our performance. On top of that scrutiny, the National Audit Office has published a report on the deterrent programme and, while it is not for me to task the NAO, I would not be surprised if it were to look again at this programme in the run-up to main gate, giving the Public Accounts Committee a chance to do the same thing.

It will be for the next Government to make decisions about scrutinising the main gate decision. For now, I am confident that we are striking the right balance between delivering the programme and ensuring that we are open about how we are performing. As this debate shows, if hon. Members wish to scrutinise the process, there are many avenues open to do that in our parliamentary democracy—many have already been explored by the Select Committee and many other options exist. Our democracy is more secure because of the Trident programme and our commitment to its successor.

Question put and agreed to.