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Mr. Keetch: I must correct the Minister. The Liberal Democrat spokesman is entitled to an hour, but I have given my commitment to the Deputy Speaker and to the Whips that I shall not be using the full hour--not least because I want to ensure that my hon. Friend the Member for Eastleigh (Mr. Chidgey) and Back Benchers from other parties have the opportunity to speak.
In a thorough--if slightly long--speech, the shadow Secretary of State, the hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) paid tribute to Sir Robert Walmsley, as do I. However, the hon. Gentleman rightly criticised the contribution made by the Secretary of State at the start of the debate. The hon. Gentleman pointed out that the right hon. Gentleman's speech was a mixture of a statement and a party political broadcast. Furthermore, I am surprised that the Secretary of State could not find the time to remain in the Chamber--to listen not, perhaps, to me, but to the important contribution made by the Chairman of the Select Committee, the hon. Member for Walsall, South (Mr. George).
In relation to the ro-ro order, I hope that the Under-Secretary--who is in the Chamber--will answer the specific points that were raised. First, my hon. Friend the Member for Torridge and West Devon (Mr. Burnett) asked whether details of the successful bids would be placed in the Library. May we have a simple yes or no answer to that question about the landing ships?
Mr. Keetch: I agree with my hon. Friend. Some of the orders for those ships were placed overseas and I think that the Chairman of the Select Committee shares the concerns expressed by Conservative and Liberal Democrat Members that that is wrong. We should have more information than the Government may be prepared to give.
Thirdly, if it is true, as was suggested by the hon. Member for Buckingham (Mr. Bercow), that the Secretary of State's decisions about these orders--albeit not his actual words--were broadcast on the BBC website before he made his statement to the House, the right hon. Gentleman should return to the House this evening and apologise.
We should never debate defence without stating our belief that the men and women of the British armed forces are among the finest in the world. In all manner of places throughout the world, it has been proved time and again that, when military action must be taken to resolve conflict or to enforce peace, the UK is more than capable of taking the lead and setting the example. This year, that has been proved yet again by Operation Palliser in Sierra Leone.
The quality of our armed forces enables the UK to fulfil our commitments to protect, enforce and promote the rules of the international society to which we subscribe. The best procurements we make for our armed forces are the men and women who serve in them.
A delicate balance is involved in controlling expenditure on defence procurement. We must ensure that Britain's armed forces are equipped to meet the nation's defence obligations both in peacetime and during conflict. Our armed forces need to be prepared to act alongside our allies in extremely hazardous environments as part of collective defence and security operations. They must have the means successfully to participate in peacekeeping activities anywhere in the world. If they are not sufficiently equipped, the UK's ability to project power--to protect, enforce and promote democracy--will be seriously undermined. As a nation, we will not be living up to the responsibilities brought by a permanent seat on the Security Council of the United Nations.
Defence procurement is about how the Government can best prepare those who serve in our armed forces for the extremely difficult jobs that we sometimes ask them to do. It is also about getting best value for the taxpayer. How can we judge correctly the relationship between quality, speed of delivery and value? Under the previous Government--as we have already heard--projects such as the Bowman system dragged on for a decade, and misjudgments were made time and again. As the shadow Secretary of State rightly pointed out, the Bowman contract should have been dealt with sooner. It is possible to acquire affordable equipment, deliver it quickly and still ensure the highest quality. We should look to our allies, because they have often performed better than us in that regard.
Affordable quality equipment does not have to take decades to arrive. Speed, quality and value can coexist; it is the job of Government to ensure that they do so. With that in mind, we welcome the goals underlying the Government's smart procurement initiative. Any initiative that ensures faster, cheaper and better procurement should be welcomed.
However, if smart procurement is to be more than just another soundbite, it needs to be testable. The report of the Select Committee stated that there were early signs of improvement; perhaps they are the "green shoots of recovery"--perhaps not. The Committee also concluded that there is a long way to go. Costs and delays continue to escalate. The average in-service date delay has risen from 43 months in 1998 to 47 months in 1999. As for making procurement cheaper, 13 projects have exceeded their original cost approvals, and cost overruns have increased by £22 million since 1998.
This week, the Minister announced in a written answer that smart procurement will save us £2 billion over the 10 years between 1998 and 2008. How does he know? In the light of the figures and of the worsening performance trends, will the Minister share with us the brand of fiscal mathematics that makes such savings possible, let alone likely?
Surely, if procurement is becoming slower and increasingly expensive, that does not add up to smart procurement. Where are the green shoots? How do the Government measure the success of smart procurement? By which criteria do they claim--as the Secretary of State did this afternoon--that it will save £2 billion? Parliament should be told. Smart procurement needs smart government, and until the Government publish the criteria by which they assess those figures, it is nothing more than a soundbite.
I do not doubt the height of the mountain that the Government have to climb. There have been decades of mismanagement--as Members on both sides of the House must accept. For example, in 1968, the Downey report recommended that 15 per cent. of development spending should be disbursed before full development began. It is obvious that the costs of the whole project, and not just the early costs, should be taken into account when making design decisions. In 1987, a Ministry of Defence working party recommended the implementation of the Downey report. However, the Conservative Government did not fully implement it.
On the Challenger 2 project, Vickers came in 30 months behind schedule and was fined a measly £3 million--only 0.13 per cent. of the contract. As a result, the MOD incurred costs of £39 million, plus the lack of operational capability. Why were those costs not pursued? Why were much larger penalties not imposed?
Furthermore, in 1994, options for a follow-on buy were taken up before the tanks had demonstrated their reliability. In 1995, it was then found that they were not reliable and it required two more years of work to bring them up to standard.
On the contracts that are the responsibility of the Labour Government, the expeditionary strategy, outlined in the strategic defence review, relies on the introduction of two new aircraft carriers to replace the ageing Invincible class. For Britain to have a key role in ensuring international peace and security in the future, it is essential to increase our capacity to deploy. The carriers are vital
Let us examine those aircraft, as any aircraft carrier is only as good as the aircraft that it carries. There are possibly half a dozen aircraft which we could choose to go on the new carriers, including the joint strike fighter, the F18, a version of Eurofighter and perhaps an advanced version of Harrier. Considering the downward spiral in the Government's performance in meeting procurement deadlines, it is a rather unnerving thought that, if the aircraft chosen is not developed in time, the whole carrier project could be in doubt.
The chief of defence procurement has identified 2005 as the deadline for the decision on the carrier-borne aircraft. However, considering the current state of procurement, if an aircraft is chosen by that time, can we really be confident that it will be delivered to coincide with the carriers? We should not forget that 15 of the 25 on-going projects, or 60 per cent. of all procurement programmes, are at least three years overdue. It is therefore possible that future carriers, perhaps designed with joint strike fighters, will face overruns, which means that the carriers will stand idly by with no aircraft to use. Even worse, we may have to redesign the carriers to operate a different type of aircraft. I hope that we never have to answer those questions in a future debate.
I hope that the type 45 destroyer will succeed. With the principal anti-air-missile system, the type 45 will provide defence at sea against anti-ship missiles, and support for troops on the ground. Most importantly, the proposed capability of the type 45 to accommodate vertical launchers that could carry cruise and Tomahawk missiles would provide the fleet with a weapons capacity that would do a great deal to equip the UK to meet the challenges of the future. As I said when intervening on the hon. Member for Chingford and Woodford Green, given the demise of the submarine-launch Tomahawk fleet, I hope that the type 45s will have the capacity to carry that missile.
Recent evidence suggests that all is not well with the type 45 contracts. Vosper Thornycroft is threatening to make 650 workers redundant and withdraw from large-scale warship building in the UK as a result of confusion over the workshare agreement. Will the Minister assure the House that the workshare agreement set out in the alliance heads of agreement remains the basis of contractual negotiations? Will he also assure the House that there will be fair and equal allocation of work between the prime contractors and other partners and subsidiaries?
What is worse than the uncertain regime of smart procurement is procurement delivered against no regime whatever. The Defence Procurement Agency will shortly place an order for a theatrewide area communications network system, which is a sophisticated and essential development to meet the future needs of our Army. On 10 October, I wrote to the Secretary of State for Defence, asking several questions about that project, but he has not yet seen fit to reply. I shall therefore explain the position to the Minister. The provisions of the system have been subject to competition and tender through the DPA's