House of Commons Hansard Debates for 1 Feb 1996 (pt 20)

7.19 pm

Mr. John Hutton (Barrow and Furness): It is a pleasure to follow my hon. Friend the Member for Plymouth, Devonport (Mr. Jamieson). I cannot promise to match his literary references, but I echo his comments about the men and women who serve in the Royal Navy and the Royal Marines. We are lucky to have the services of so many dedicated and professional men and women, and I express my admiration and respect for them.

I pay tribute also to the crew of the HMS Cumberland, who, in the past year, have spent much time supporting my county of Cumbria in its efforts to attract new investment and new jobs. All of my constituents would like to express their appreciation and thanks to the officers and the crew of HMS Cumberland.

My constituency has enjoyed a very long association with the Royal Navy. Over the past 150 years, we have built some of the Navy's finest ships, and we continue to do so. My constituency also plays host to many Royal Navy personnel who are currently involved in the Trident programme, and we look forward to a long and continuing association with the Royal Navy.

I think it is common ground on both sides of the House that the past five years have been a period of enormous change for the Royal Navy. Those changes have seen a significant reduction in the size of the fleet--which has raised doubts about its operational capabilities--and those reductions in turn have had a dramatic effect on the size of the United Kingdom naval shipbuilding industry.

Recently, we saw the closures of the Cammell Laird shipyard on Merseyside and the Swan Hunter shipyard on the Tyne. There have been many job losses at Yarrow on the Clyde and at Vosper Thornycroft at Southampton--and that is leaving to one side what has happened in my constituency since 1991 and the release of "Options for Change".

I am sure that the Minister is aware of what has been going on at Vickers Shipbuilding and Engineering Ltd. at Barrow-in-Furness, where almost 10,000 jobs have been lost in little more than four years. That has had a tremendous effect on the local economy, and has dealt a devastating blow to my constituency. We are a geographically isolated part of the United Kingdom, which has historically relied on one employer--the shipbuilding firm in that area. My constituents have found it enormously difficult to make the necessary adjustments when they have had to endure so much pain over a short period.

Therefore, I make no apology for concentrating on naval procurement policy, and what I believe to be the Government's failure to manage the process of change in an effective and a sensible manner. I shall deal particularly with the Government's continuing emphasis on competition as the driving force behind their procurement policy. However, before I turn to those issues, I shall comment more generally on the Royal Navy's future role.

I believe that our first priority must be to ensure that the Royal Navy is capable of deploying flexible, highly mobile and self-sustaining forces to any part of the world whenever the need arises. That requirement is a reflection of the end of the cold war and the disappearance of a single, monolithic threat.

In his eloquent speech to the House tonight, the hon. Member for Inverness, Nairn and Lochaber(Sir R. Johnston) referred to the fact that quotations by

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admirals featured in all hon. Members' speeches tonight. I shall continue that tradition by referring to the comments of Sir Benjamin Bathurst in his article in the Royal United Services Institute Journal of August 1995. I agree with him, when, summarising the effects of the "Options for Change" review and the Royal Navy's change of direction, he concludes:

"Yet overall the move to a broad and balanced expeditionary navy will be seen as a pretty radical change from the anti-submarine warfare orientated doctrines of the Cold War".

If we are to support that operational shift in the Royal Navy doctrine, its forces should include aircraft carriers, long-range submarines and landing ships. I think that it is the responsibility not only of the Government but of the Opposition to construct policies that will ensure that the Royal Navy has that equipment and those resources to meet the challenges of the next millennium.

It would be remiss of me to let the issue pass without expressing regret that, earlier today, the Minister of State for Defence Procurement attempted to give the impression that Labour would unilaterally abandon Britain's nuclear deterrent. That is not the case.

Dr. John Reid (Motherwell, North): I am very glad that my hon. Friend has raised that issue, because it seems that, whenever four Tories gather together, they are genetically compelled to spread myths. I shall take this opportunity to set the record straight. Like the Government, we would like to see a nuclear-free world. Towards that end, we will encourage and participate in global multilateral negotiations. However, until that day--which I fear is far off--we shall retain Trident, and have a deterrent as long as any potential enemy has one.

Mr. Hutton: I am grateful to my hon. Friend for setting the record straight. We all want to see nuclear disarmament--in fact, I understand that it is Government policy to promote it on a multilateral basis. I am glad to say that that is also my party's policy. My hon. Friend has made it quite clear that we shall not indulge in a policy of unilateral nuclear disarmament. When discussing the policies and the operational doctrine of the Royal Navy, it is important to have regard to the role it plays deploying Britain's independent nuclear deterrent, in addition to the more flexible approach that we want it to adopt.

Secondly, we must ensure that operations involving long-range deployment of Royal Navy forces can be fully supplied and serviced. A number of concerns have been expressed about the resources available to the Royal Fleet Auxiliary, and I am glad that at least one of the issues relating to that force has been partly resolved today. We understand that the Ministry of Defence has issued an invitation to tender for two replacements for the O class tankers. That is welcome, but I ask the Minister to say tonight to whom those invitations have been extended.

I see that the Minister is reading a newspaper, which I understand is not the practice that hon. Members should adopt during a debate in this place. I am sorry to see him doing that, and I hope that he is still listening to me.

Mr. Deputy Speaker (Sir Geoffrey Lofthouse): Order. I shall clear up that matter. If the Minister is reading a newspaper in connection with the debate, he is in order. If it is not connected with the debate, of course he is not.

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Mr. Hutton: I accept your ruling, Mr. Deputy Speaker. It pains me to refer to the hon. Gentleman in that way, as I know that he takes a very close interest in debates. My constituents will want to know who has been invited to tender, and what time scale the MOD envisages for the tender period. When does the Ministry of Defence expect to issue a contract for the construction of the two newO class vessels?

There is also evidence of continuing overstretch within the Royal Navy. HMS Invincible--an aircraft carrier which was built in my constituency--recently broke almost all the Royal Navy's harmony objectives after its service commitments in the Adriatic. That is a matter of some concern to the Defence Select Committee, because it clearly implies an imbalance between the Navy's commitments and its present strengths. I hope that the Minister of State for the Armed Forces will address that issue in his speech later tonight.

I now turn to procurement, both in general and specifically in relation to my constituency. Between 1990 and 1995--1990-91 was the year of "Options for Change"--expenditure on naval procurement and sea equipment fell more than the combined fall in expenditure on land and air equipment. In real terms, there was a decline of 41.3 per cent. in naval procurement, compared with a fall of 18.5 per cent. for land equipment and16.7 per cent. for air equipment. Over the same period, the Ministry of Defence budget decreased by 18.3 per cent.

It is quite clear from those figures that the Royal Navy has taken the brunt of the reductions in Ministry of Defence spending since 1990 and 1991. Given our maritime role and our unique contribution to NATO forces, many people will ask why those cuts have so deeply impacted on the Royal Navy. The reductions have been twice as heavy in expenditure terms for the Navy as the equivalent reductions for the Army and the Royal Air Force.

No one can argue against the concept of competitive procurement, because it clearly provides the taxpayer, through the Ministry of Defence, with value for money. However, as the recent report by the Defence Select Committee and the Trade and Industry Select Committee has revealed, there are real concerns among those in industry about how that policy is being implemented.I must say that it will be difficult to sustain the policy for much longer, as the industry continues to contract and rationalise.

There are a number of particular concerns to which I should like to draw attention. First, reliance on price as the final determinant ignores the need to maintain strategic capability. We have already lost a UK capability in image intensifier tube manufacturing. I think that the Select Committee was right to comment that there is a need to adopt a long-term approach to the retention of strategic capabilities, and to build that into future procurement policies.

Secondly, competitive procurement tends to undervalue the need to maintain the technological base of the United Kingdom's defence companies. The Ministry of Defence should work more closely with the DTI in that sphere.I welcome what the Minister of State for Defence Procurement said today about the Government's response to the report from the Defence Select Committee and the Trade and Industry Select Committee. It demonstrates movement, and a recognition of some deficiencies in the Government's procurement policies.

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Thirdly, companies require more guidance from the Government about their future requirements, which of course was a Select Committee recommendation. That point appears to have been accepted by the Government, which I welcome. The seminar conducted in July by chief executives of defence companies and MOD officials and Ministers was a welcome development. However, it is important that timetables should be adhered to once requirements have been identified.

That did not happen with the batch 2 Trafalgar class update programme, which is currently running almost three years behind schedule. That three-year delay is bound to have adverse consequences for employment and maintaining vital skills in my constituency.

Finally, I should like to refer to some specific issues that are of concern to my constituents. I am thinking in particular about the contract to replace HMS Fearless and HMS Intrepid, and the prime contractorship for the new Trafalgar class submarines. As for the batch 2 Trafalgar class programme, I am sure that the Minister will be aware that the decision to award the prime contract to the GEC-Marconi team and not to VSEL was a huge disappointment to my constituents. The loss of the prime contract has created a mood of real uncertainty in my constituency.

In a letter dated 22 January this year to the Prime Minister, Tom Campbell, the chief executive of Barrow borough council, said:

"We do not expect the Government simply to hand out work to GEC Marine but we do believe that the Government has a responsibility to the skilled work force of the town and the thousands who have already lost their jobs. We do need your help to alleviate the fear which hangs over every household in Barrow as a result of the now precarious and uncertain defence procurement strategy."