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Mr. Bercow: Given that my right hon. Friend the Member for Kensington and Chelsea (Mr. Portillo) was a truly outstanding Secretary of State for Defence, would the right hon. Gentleman now care to specify exactly in which speech and on what occasion my right hon. Friend advocated a reduction in defence expenditure? If he is unable to do so, would he just for once have the good grace to apologise and withdraw that remark?

Mr. Hoon: I have cited the evidence on which I rely, which is the central office briefing. At this stage, I am in no shape or form casting any doubts on the ability of the present shadow Chancellor in his former occupancy of the position that I am now privileged to hold. What I am doing is questioning how good a shadow Chancellor he is, and making it clear that when it comes to making the choices that the country will face at the next general election, the electorate will have to choose whether they can rely on his economic policies, given the cuts that the right hon. Gentleman is proposing across the range of public expenditure, particularly with regard to defence.

Mr. Peter Viggers (Gosport): To put the issue in context, how many firm warship orders have been placed since May 1997?

Mr. Hoon: I shall not give a specific answer. A great number--

Mr. Viggers: None.

Mr. Hoon: No, that is simply not true. There are firm orders. We are not here to play guessing games about the Government's expenditure programme. We want to know the Opposition's proposed defence expenditure, and I am giving those on the Opposition Front Bench every opportunity to tell us. Will they match precisely the amounts of money being made available to defence by this Government? That is a question that they have to face up to, a question which they signally refuse to answer. They have been given an opportunity today, but, again, there has been complete silence from those on the Opposition Front Bench.

Several hon. Members rose--

Mr. Hoon: It seems that they will be saved by their Back Benchers.

Mr. Julian Brazier (Canterbury): The Secretary of State asked for examples of items for which better value

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could be obtained. Today he has announced enormous expenditure on six shiny new ro-ros, the bulk of which will come from a German yard. Given current overcapacity in world shipping markets, I wonder whether better value could have been found, perhaps through a second-hand option. The Secretary of State's knowledge of those markets is revealed by his extraordinary statement that many vessels are placed with yards around the world every day.

Mr. Hoon: If the hon. Gentleman cares to check, he will find that approximately 2,500 ships are placed for construction around the world each year. That means a lot every day. [Interruption.] Perhaps the hon. Gentleman's grasp of mathematics is better than mine, but I doubt it given his response. [Interruption.] On better value, we organised a competition, and we got best value from the competition in precisely the way in which the previous Government proposed. We have achieved best value. Unless the hon. Gentleman can do no more than make rather windy assertions, he should come to the House with facts.

Mr. Brazier: The Secretary of State has gone for the most expensive option on ro-ros, and is placing the bulk of the order abroad. That has caused some consternation on the Government Benches. He should look across the Atlantic if he wants to see a model of a system that is much cheaper and more cost effective. The American system works at a far lower cost than ours.

Mr. Hoon: One of the hon. Gentleman's colleagues keeps saying that he is a mathematics scholar. Unfortunately, he clearly knows nothing about economics. If he had listened with at least half an ear, he would have heard me make it clear that we had gone for the best value-for-money solution. I am sorry that I have to translate that into simple English for him. It means the cheapest. We have gone for the cheapest option, and that means that we have excluded more expensive options. I am sorry to have set that out in such basic English, but the hon. Gentleman clearly experiences difficulty in hearing and understanding.

It is astonishing to receive lectures from the Conservative party on efficiency. The Conservative Government left us with a massive £3.25 billion cost overrun on the Ministry of Defence's 25 most expensive equipment projects. In our first three years in office, we managed to cut that figure by £500 million, thanks largely to our smart procurement initiative. By sustaining and broadening smart procurement under what we will now call smart acquisition, the improvements and efficiencies will continue.

At the outset, we set ourselves a target of reducing acquisition costs by £2 billion over 10 years. Many Opposition Members scoffed at the suggestion, but I am pleased to tell the House that we now expect to improve on that figure. Thanks to the radical reforms that we have put in place to streamline the acquisition process and cut unnecessary bureaucracy, we are already identifying huge savings that can be made in our equipment programme--savings that will be reinvested in defence.

On the Apache programme, for example, we are investing now to save as much as £30 million a year in support costs. On Challenger 2, we have identified

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savings of nearly £200 million over the life of the project by working closely with industry on innovative new ways of procuring ammunition and improved design for maintenance techniques. On a £200 million contract for new Rapier air defence missiles, we have achieved savings of more than 20 per cent. with the missiles delivered more quickly than through traditional procurement methods, and the contractor able to secure further export orders as a result. "Faster, cheaper, better": once that was an aspiration, now it is a practical reality.

I shall not pretend that there are no problems; there are bound to be some. The constant need to be at the technological cutting edge means that defence equipment projects will always be difficult. They will always carry risk, and a proportion will always run into problems of one sort or another. That point that has been vividly demonstrated by the problems with HMS Tireless and the rest of our nuclear-powered submarine fleet.

As hon. Members will know, HMS Tireless went alongside in Gibraltar in May following a leak of coolant water in her reactor compartment. It was decided that it would be best if Tireless was repaired in Gibraltar. It is understandable that the Government of Gibraltar sought assurances about the safety of the repair. However, it was not until September that the Chief Minister of Gibraltar agreed that the repair could go ahead.

Mr. Bercow: On a point of order, Mr. Deputy Speaker. Earlier, you made clear the general position of the Speaker on statements that should be made to the House. I wonder if you will offer us further guidance and thoughts, in the light of confirmatory evidence that the Secretary of State's statement was placed on the BBC website at 12.10 pm, precisely one hour and 59 minutes before the right hon. Gentleman toddled along to the Chamber to address hon. Members. What redress do hon. Members have in those circumstances?

Mr. Deputy Speaker: I have already made the position clear, and Mr. Speaker has made his position clear, too. Announcements that should be made first to the House should not be made to the press prior to that. I shall make sure that the matter is brought to Mr. Speaker's attention, although I am not aware of the true position.

Mr. Hoon: Further to the point of order, Mr. Deputy Speaker. If the hon. Member for Buckingham (Mr. Bercow) had raised the matter with me, I could have told him that I was still writing the statement minutes before I stood up. I do not know what has appeared on the BBC website or when it appeared. May I make it clear, Mr. Deputy Speaker, that it was not my statement or words for which I am responsible? [Interruption.] I shall have the matter investigated. If I find that someone has released beforehand the text of my statement to the House, I shall take grave exception to that. I have always insisted on making statements on behalf of the Ministry of Defence to the House first. I shall continue to adhere to that practice.

Dr. Julian Lewis: Further to the point of order, Mr. Deputy Speaker. Is not the Minister being disingenuous? It is not a question of leaking the text of the statement, but of leaking the Government's proposals and plans. That is what matters, not the form of words in which the right hon. Gentleman chose to dress them up when he got around to writing his speech.

Mr. Deputy Speaker: Before the Secretary of State responds, I wish to say that I believe that we have dealt

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with the matter adequately. I have taken points of order, and said all that the Chair can say at the moment. The Secretary of State has also responded; we should now get on with the debate.

Mr. Hoon: Thank you, Mr. Deputy Speaker. I was dealing with the problem of HMS Tireless. Unless and until the Government of Gibraltar said that they were content for the work to go ahead, it would not have been prudent or sensible to continue with the work. We therefore had to await the initial investigation to ascertain the extent of the problem and the investigation of the work that was required.

An initial assessment of the defect on Tireless was that a weld in the reactor cooling system was cracked. Further inspection showed that the cracking was more extensive than originally considered and might be generic. As soon as that possibility was identified, we launched an inspection programme for our other SSN--strategic submarine nuclear--submarines. We therefore could not have started the repair programme any sooner. The shadow Secretary of State's suggestions to the contrary are simply not borne out by the facts. They are unfortunately characteristic of his recent approach to commenting on some matters. I regret that it has been, "Speak first, think later."

Underfunding is not, as the shadow Secretary of State has suggested, to blame. The problem appears to be a design fault on submarines, which were built under successive Administrations of both parties.

I also note that the shadow Secretary of State has criticised the Government for selling our diesel-powered submarines and putting all our eggs in one basket. If the hon. Gentleman had bothered to check his facts before rushing to comment, he would have discovered that the Conservative Government took the decision to dispose of the Upholder class in the first place.

Delaying the sale of the Upholder class submarines to Canada is not a practical means of reducing the temporary shortfall in our operational capability. The first vessel has already been handed over to the Canadians. The remaining three are not ready for sea, and other important factors, including the significant amount of training our crews would require, prevent their use.

We anticipate that the necessary repairs are, in fact, relatively straightforward, but they will take some months to complete because of the protracted procedures that are required to ensure complete nuclear safety during the repair work. In peacetime, safety will always take precedence over operational requirements. The safety of the public and our own personnel is of paramount importance. I am not worried about party political point scoring, and I am sorry that Conservative Members do not seem to share that approach. We will be able to provide protection for the deterrent through the use of other assets--employing additional frigates with towed array and Nimrod maritime patrol aircraft. The safety of the deterrent will not be compromised.

There has also been considerable comment recently on the Kosovo conflict, together with a report on it by the Defence Committee. I welcome the Committee's acknowledgement that


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There has been a great deal of comment on our precision weapons capability, and I hope that the House will recognise that we have already taken steps to address that matter. We have announced the purchase of Maverick missiles, a proven system that is ideally suited for attacking point targets, particularly in situations where there is high risk of collateral damage. We have also announced that we will be procuring enhanced Paveway bombs which make use of global positioning system technology to guide them to targets in all weather conditions.

Comment has also been made on problems with secure air-to-air communications which affected a number of NATO nations during the Kosovo campaign. Following trials earlier this year, I announced in July that we are now undertaking a programme to fit secure communications to aircraft of the types used in the Kosovo campaign.

We are also addressing the need to improve our strategic ability as a result of the lessons learned in Kosovo. As well as today's announcement, I announced in May this year that we will lease four Boeing C-17 Globemaster aircraft. Our longer term requirement will be met by the A400M Airbus aircraft. In sum, we have already taken very seriously the key equipment capability lessons learned from the Kosovo campaign and we have taken quick action to improve our capabilities.

Hon. Members have expressed concern about other items of equipment. Most will have seen the lurid and sensationalist headlines about other examples of so-called "equipment failures", but I wonder how many know the truth behind the headlines and the scale of the problems that we inherited from the last Government?

Take the SA80, for example. Yes, there are problems, but they were first identified during the Gulf war--nearly 10 years ago, under a Conservative Government. It is only now that we have a Labour Government that those problems are being sorted out. The same is true of the Bowman programme. We are acutely aware of the failings of the current Clansman radio system and the crucial importance of introducing a replacement as soon as possible. However, we inherited a replacement programme that was already over time and over budget with little sign of things getting better. That is why we re-opened the competition for the Bowman requirement--because, sometimes, tough decisions have to be taken. Unlike the Conservative party, we will not shy away from taking them when the effectiveness of our armed forces is at stake.

The status quo is no longer an option. We must modernise our defences by planning for the long term now. Nowhere is that more true than with the future of defence research. The strategic defence review made clear that if the Defence Evaluation and Research Agency is not to go into decline, we must take a new approach--

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one that enables us to exploit fully the knowledge and technology within DERA; to improve access to civil technologies for military applications; to introduce private capital into DERA to meet its investment needs; and to provide DERA with the freedom it requires to allow it to compete for and reward staff, as well as to develop new business.


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