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5.17 pm
Mr. John Smith (Vale of Glamorgan) (Lab): I am grateful for the opportunity to speak in this debate, albeit briefly. I intend to focus my comments on a small but none the less important part of defence policy that is often neglected—defence logistics—but first I should like to make a couple of general comments. I congratulate my right hon. Friend the Secretary of State for Defence on producing an intelligent White Paper that leads the way for future defence policy. My hon. Friend the Member for Dunfermline, West (Rachel Squire) referred to the number of strategic reviews. Unfortunately, that is an indication of the times that we live in. The security environment is changing so rapidly that there will be an increasing number of reviews over time. I also congratulate the Secretary of State on securing from the Chancellor of the Exchequer a real-terms increase in the defence budget.
I should also congratulate the shadow Defence Secretary on putting on such a brave face this afternoon, in the full knowledge of the impossibility of defending the policy that he will have to defend. I might disagree with him and his Front-Bench colleagues, but I recognise that they are committed to defence policy and to defending this country. I therefore understand the embarrassment that they must be experiencing, but it is not my intention to exploit it this afternoon.
Mr. Blunt: Following the Chancellor's Budget statement, my noble Friend Lord King sought clarification from the Treasury concerning a real-terms increase in defence spending. However, he discovered no such undertaking, beyond what had already been announced in the previous comprehensive spending review. If that proves correct, I should imagine that the hon. Gentleman, like me, will regard it as something of a let-down.
Mr. Smith: We await the Chancellor's statement with interest. My understanding is that a commitment to the defence of this country—something that I believe in strongly—has been given, and I look forward to hearing what the Chancellor says.
I shall confine my remarks to defence logistics. It is often forgotten that nearly half the entire defence budget goes on logistics and not an awful lot of time is
spent debating the £15.2 billion—at 2003 out-turn prices—involved. About £11.4 billion of that expenditure is currently under review as part of an MOD end-to-end review of air and land logistics. I support that vital review, the general objective of which is to reduce the footprint of logistics to prevent duplication, to ensure faster response times and to secure the equipment and support where and when it is necessary.The National Audit Office report on Operation Telic identified the need to achieve those tasks and it concluded that the operation was a huge logistical success. It was the fastest deployment—within 10 weeks—of the largest British expeditionary force ever into a theatre, a very austere environment, nearly 4,000 miles away. There was even a change of location. We therefore deployed people even more quickly than the planning assumptions for the deployment would have suggested.
The NAO rightly recognised some capability gaps within that deployment, but did not do so in respect of fixed-wing aircraft, which were deployed very successfully into the field. I am particularly interested in air support and the role of third-line reinforcement and support for operational aircraft that need to be put rapidly into the field and maintained there.
Government policy in that respect has been incredibly innovative over the past few years and has created the so-called trading funds. The Defence Aviation Repair Agency whose headquarters are in my constituency is one example, and there are other bodies such as the Army Base Repair Organisation, ABRO, which play a vital strategic role in ensuring that we get our logistics act together.
Ministers will be aware that yesterday's announcement of up to 550 redundancies at DARA at RAF St. Athan in the Vale of Glamorgan in the next 12 months was received with disappointment and dismay by my constituents and that work force. We should acknowledge the crucial role that these guys play in the logistical chain of depth air support. Indeed, they were somewhat taken aback. These are highly skilled workers, vital to support our front line—and I repeat that the NAO identified no faults whatever in the logistical support for our fixed-wing aircraft in Operation Telic in Iraq.
About 360 of those jobs are to be lost as efficiency savings—that was the explanation given. The work force and I accept that some efficiency savings have to be made, but we do not agree that such a large loss of highly skilled workers is necessarily the best way of achieving them. Incidentally, the depletion of such an important skills base—in military aeronautical engineering—is a severe sting, especially given that the organisation will be expected, after 1 April this year, to compete in the marketplace with no vote money and not a penny from the taxpayer for its future work. Losing those skills is a worry.
However, the second half of the decision is what worried me and many of the DARA workers at St. Athan. That was the announcement of 190 redundancies because the contract to upgrade the Harrier platform had been lost. The contract went to RAF Cottesmore, and that astonished many workers. They believed that the purpose behind the creation of
DARA, the trading fund in the logistical chain of support, was to civilianise the crucial deep repair operations—the garage or depot operations inherent in the overhaul and maintenance of fighter aircraft.Civilianising that work, and taking it away from RAF personnel, was supposed to mean that it could be carried out in a commercial environment, and on a par with any player in the private sector. Workers were shocked to hear that the contract had gone back to the RAF because the work is now to be completed in-house, even though so much effort had gone into ensuring that DARA was competitive and in a strong position to enter the marketplace after 1 April.
Another concern is the nature of the end-to-end review. I have said that it is important to carry out that review, as so much of defence expenditure goes on logistics. Freeing up some of that money would mean that it could go on front-line services. Our forces could then be released to do what they do best—war fighting, or preparing for war fighting or peacekeeping—and that they could perform those tasks unhindered.
The suspicion at DARA about the end-to-end review has several causes. First, the trading funds were not originally included in the review. They were introduced after the review had begun, and it was not thought that they would be included in the MOD logistical chain, as a solution had been found. Creating a trading fund meant that the resulting commercial organisation could compete with other players in the market. Why has the work been returned to the MOD logistical chain? The people at DARA regard the decision as more or less an afterthought.
The second cause of nervousness about the end-to-end review is that, although its team leader has a distinguished record in the armed forces, he is not noted for his support or sympathy for the newly created trading fund and its role in providing air support for the RAF. Another consideration is that the specialist teams that decide the contracts are predominantly made up of military representatives from the forces. There is therefore a belief that there could be a bias in the decision-making process. I do not say that I subscribe to that belief, but I have heard that view expressed by workers at DARA, where there is the prospect that 550 jobs will be lost.
In future, there will be competition for major contracts, such as that for the Tornado GR9 structures. I know that my right hon. Friend the Minister of State will not be able to say how that will turn out, as the review is still under way and the decision has not been taken. However, I want to be able to reassure the highly skilled workers at DARA, who play an absolutely vital role in providing logistical support, that future contract allocations will be transparent. In that way, wherever a contract is eventually placed, those workers will be able to see whether the bid that they put in was strong and economical, or weak. That will be the difference between winning and losing any such contracts.
The House will accept that we must not lose the skills that I am talking about, so it is possible that there could be a strategic reason to maintain them at military bases as a second-line reinforcement. If that is the case, a transparent contract allocation process would allow workers to understand the reasoning behind decisions. It is vital that any future decisions be transparent and seen to be transparent.
If decisions are made on that basis, the Defence Aviation Repair Agency, which has shed half its work force in the past four to five years without a single compulsory redundancy, and is virtually doing the same volume of work with half the work force, will be fit, lean, mean and capable to compete successfully in the marketplace with any organisation in the world on military aviation. Given all that it has achieved, and in recent years it has jumped through hoops to become efficient and competitive, it needs those assurances. Finally, it would also like to know why it did not win the Harrier platform contract that was announced yesterday.
5.31 pm
Mr. Gerald Howarth (Aldershot) (Con): First I thank all the hon. and right hon. Members who have paid tribute to my late noble and gallant Friend Lord Vivian. He was a very splendid man indeed and the tributes paid to him today fully reflect that. I intend to send his widow a copy of today's Hansard, so that she may read for herself the tributes paid to him in this House.
We have had a typically robust and interesting debate, sadly not as well attended as we would have wished. The usual groupies are here. We give a special welcome to the one or two new Friends who have joined us, and hope that they will come back and join us again. I say that much as they do at services in church on a Sunday. I hope that those who have not participated so enthusiastically in the past will come back. In particular I welcome the right hon. Member for Birmingham, Ladywood (Clare Short), the former Secretary of State for International Development. I do not always agree with her, but I have found her to be a personable friend across the Floor and it was interesting to hear from her.
Time is marching on, so if the House will forgive me I will not go through all the speeches that were made. I put it on record once again that the deliberations of the Defence Committee have done credit to that Committee, to the House and to the parliamentary system. It was an extremely well-informed report that contributed significantly to all our understanding of the conduct of the Iraq war.
A number of people, including my right hon. Friend the Member for Fylde (Mr. Jack), remarked on the lack of detail in the White Paper. My right hon. Friend rightly described it as a menu without prices. Like him, I too have a major BAE Systems operation in my constituency and my constituents are concerned about the uncertainties surrounding a number of programmes. The reasons for publishing the White Paper are encapsulated in supporting essay 2. Paragraph 2.9 states:
- "Since SDR our Armed Forces have conducted operations that have been more complex and greater in number than we had envisaged. We have effectively been conducting continual concurrent operations, deploying further afield, to more places, more frequently and with a greater variety of missions than set out in the SDR planning assumptions. We expect to see a similar pattern of operations in the future."
The White Paper also recognises the need to retain the ability to undertake a large-scale operation such as Operation Telic, although in his statement to the House in December the Secretary of State accepted that expeditionary operations on that scale can be conducted effectively only if United States forces are engaged. That leads to the further essential requirement set out in the White Paper, of inter-operability with the United States.
The blunt message of that policy was summed up by Bronwen Maddox in The Times:
- "Britain will never again fight a big war on its own, as it did in the Falklands."
Notwithstanding that brutal assessment, the Government's ambitions are markedly greater than in 1998, and the White Paper must be judged against the revised range of assumptions. We have no reason to disagree with the threat assessments. We believe that the United Kingdom should be prepared to play an important role in the less stable, post-cold war world—but if the UK wants to play in that league, there is a price tag. We are not convinced that the solutions proposed meet the challenge that the Government have set themselves. Nor do we believe that the Government are prepared to pay the price that goes with effective application of the policy. Like the Chief of the Defence Staff, we look forward to the Chancellor's detailed announcements on spending in July.
A widespread view shared at senior military level is that the strategic defence review was underfunded. The White Paper proposes an even more ambitious military posture, yet—despite the Chancellor's rhetoric—the additional resources do not meet the increased ambition.
Taken together with the acceptance that high technology in the form of network-enabled capability must be an essential component of the new scenario, the Government's enhanced ambitions have put the screws on our conventional forces—the reason for talk of platform numbers being less relevant. If we are to be prepared for the envisaged increase in operations, something has to give. My hon. Friend the Member for Mid-Sussex (Mr. Soames), who was in such good form today, said in December:
- "We are concerned that a whole raft of decisions on cuts in both manpower and equipment will start to leach out later."—[Official Report, 11 December 2003; Vol. 414, c. 1213.]
We know that the Ministry of Defence is undertaking studies in 14 so-called work strands with a view to meeting the cost savings demanded by the Treasury. We were assisted by the Minister of State in the other place yesterday:
- "To manage the in-year pressures, we have had to scale back cash expenditure across the department, in particular in the Defence Logistics Organisation and the Defence Procurement Agency . . . It is clear that during both next year and the year after we shall continue to face financial pressures. We are conducting an assessment of where reductions in planned expenditure can be made in each of those years so that we can continue to live within our means . . . So I am not in a position to be able to tell noble and gallant Lords and the House generally what figures are being bandied about but I think that I have been fairly frank with the House in going as far as I have."—[Official Report, House of Lords, 24 March 2004; Vol. 659, c. 743–744.]
If our forces are to undertake the range of operations foreseen in the White Paper, platform numbers and boots on the ground will matter. The Government are engaged in a series of gambles in a desperate attempt to square the circle. They have taken a gamble with the early withdrawal of the Sea Harrier starting next week, thereby removing Britain's independent maritime air defence capability. On present projections, that capability gap will be at least six years—longer if the new carrier programme is delayed. We may be looking at 10 years without full fleet air defence. The Minister ought to say whether he agrees that aircraft could remain in service until 2012 without an engine upgrade.
It has been reported that the Government are to cut the number of Type 45 destroyers from 12 to as few as nine or eight, vastly reducing Britain's maritime capability and reach. Numbers do count, as the Minister will understand when he recalls that the frigate deployed to Sierra Leone a few years ago was also on standby for the Falklands and the Caribbean. For those without a map, those areas are several thousand miles apart. Will the Government clarify their position on the Type 45s? Do they intend to procure the 12 vessels originally envisaged or will we have to wait until those work strands have reported?
On the future rapid effects system—FRES—the Government are gambling on a programme that is central to achieving the aims set out in the White Paper. FRES is a clear example of the fact that the development of a medium-weight capability is essential to the expeditionary role envisaged in the White Paper. That was reflected in the early in-service date and high-priority status afforded to it. However, the Government have not yet even decided what they want from the programme, let alone how to procure it. By putting it out to a systems house, the Government could have added anything up to a year to the process, kicking a final decision ever further into the long grass and making the prospect of FRES reaching its early in-service date remote.
There are other examples, with which Ministers will be only too familiar. Two of the six Astute submarines are said to be on the chopping block, which would reduce our maritime capability still further and deal
another blow to the Ministry's favourite contractor, BAE Systems. Up to 40 Challenger tanks may be mothballed, curtailing capabilities further. Ark Royal is to go into some kind of mothballing and the joint strike fighter—now called the joint combat aircraft—could be cut from 150 to 110. It is a key component for the carriers and it would helpful if Ministers could answer some of the concerns that have been expressed on both sides of the House about those programmes today.On a note of agreement, I can say that we support the carriers. The carrier programme that the Government have developed will be essential to the concept of expeditionary warfare that they advocate. I welcome the fact that the drumbeats in the jungle suggest that the carrier size has gone back up to 60,000 tonnes. That will result in serious carriers that are capable of delivering what we all want to see. However, there is uncertainty about the programme. We have heard reports that the MOD wants to take control of the programme, instead of making BAE Systems the prime contractor, or to hand it over to AMEC. Despite having the excellent Syd Gillibrand as its leading light, that company has not had great experience in running such a programme.
The Government are also ransacking the cupboard for other savings. Earlier this week, the Under-Secretary smuggled out a written statement, blandly called "Estate Rationalisation: Presentation Strategy", the key sentence of which reads:
- "The work now underway is looking at consolidating defence activity at a smaller number of more densely utilised locations in order to achieve the optimum use of land and facilities . . . it will take into account existing relocation studies that have already been announced."
The White Paper sets out the Government's projections for the next 15 years. Admittedly, the last White Paper lasted only six years, but it is still a basis for today's discussions. The projections anticipate a level of military action similar to the recent pattern, which is well in excess of the level envisaged by the SDR just six years ago, and they do not fully quantify the effect of Islamic fundamentalist terrorism on our country. The truth is that manpower has been cut, increasing pressure on young service families. Training has been cut. The TA is running out of people to support the regulars. Numbers of aircraft, ships and armour are being reduced and assets are being sold.
Despite the dangerously uncertain world that we have entered, Ministers are taking gambles that capability gaps will not be exposed. They have failed to order essential battlefield equipment in time. The defence industrial policy, about which my right hon. Friend the Member for Fylde spoke so comprehensively, is, to quote a senior industrialist, "a shambles". We have
received no tangible dividend for the Prime Minister's support for the United States. As my right hon. Friend said, there should at least be a technical access agreement on the joint strike fighter. Where is that? What answer can the Minister give us about control of the British defence industrial base if that control is moving inexorably into the hands of the Americans? As we know, they have done us no favours in the commercial field. Political correctness inhibits training and the development of risk awareness.All those points were summed up in the brutally frank admission made yesterday by the Prime Minister's personal adviser on defence, the Chief of the Defence Staff: the Army has been stretched to breaking point and cannot mount another Iraq-scale war for five years.
Let us hope our enemies are not listening.
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