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Mr. Gerald Howarth: I understand my hon. Friend's rationale, but is not one of the difficulties with collaborative programmes the fact that, on average, they are some 40 per cent. more expensive? That is a result of the collaborative element. The difficulty lies in trying to harmonise common requirements without compromising on the capability that is aimed for, and in banging together heads in Europe in an attempt to keep the costs down.

Mr. Viggers: My hon. Friend is right to say that collaborative projects are more expensive. That is why we must be much more strategic in our thinking, so that one country takes the lead in developing a tank, for example, while another takes the lead in developing a ship, and another in developing an aircraft. However, that would require a level of statesmanship that is not evident anywhere in Europe, or even in the UK.

Secondly, I want to say a word about the carrier programme, about which I am less sanguine than my colleagues on the Defence Committee or in the House. There is a yawning gap between the £2.9 billion that the Government say the ships can be built for, and the £4 billion that the manufacturers say is the absolute minimum. The Government started by setting up a competition between BAE Systems and Thales, and then announced that there would not be a competition after all. Input was forthcoming from VT, which has a great deal to offer, and from Swan Hunter, which has very little. Now we have an alliance—effectively, a committee made up of representatives from BAE Systems and Thales, with a Defence Procurement Agency chairman. We are told that it is not a committee, but if it is not that, what is it?

Ms Dari Taylor: Did the hon. Gentleman really say that Swan Hunter had little to offer when it came to building the aircraft carrier? If so, will he explain exactly what he meant?

Mr. Viggers: The hon. Lady will know that Swan Hunter almost went out of business before it was pulled back from the grave. I may be putting myself in a position that resembles the one encountered by my hon. Friend the Member for Henley (Mr. Johnson), and I may have to make a journey to the north-east, but I stand by what I said. There is widespread apprehension in the shipbuilding industry as a whole that Swan Hunter is being included because of jobs and not because of skills. I do not resile from that statement.

My third and final point concerns the need for open markets in defence products. The UK is the nearest thing to an open market in Europe in that respect, but we must work more with colleagues to encourage the US to give us the international traffic on arms regulations waiver that we need so much. The VT group has suggested a new industry-Government approach to secure greater access to global defence markets, which would also be very welcome, but the ITAR waiver is crucial.
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To be fair to the Prime Minister, I understand that No. 10 and the White House issued a joint statement after a meeting between him and President Bush. The statement said that they had agreed

The US Administration have therefore supported a waiver for the UK, but the problem lies with Congress. We must hope that the new profile of the membership of Congress will help, as we urgently need to ensure that we can maintain a good defence dialogue, in technological terms, with our American allies.

3.54 pm

Mr. John Smith (Vale of Glamorgan) (Lab): It is always a privilege to follow the hon. Member for Gosport (Mr. Viggers). I do not always agree with what he says, but his speeches are always a good listen, with occasional thought-provoking ideas. This is an important debate, especially after the announcement on the White Paper and yet another transformation in our armed forces.

I often think that defence procurement and logistics are the poor relations, but they are in fact some of the most important aspects of defence policy. If we advocate serious change but do not get right procurement of equipment and the logistical support for that equipment, we will be in serious trouble. People can wish for effects-based defence or for capability, but they will not get it if procurement and logistical support are not got right. As I have said before, although it is often forgotten, almost half the defence budget is spent, not on equipment or front-line capability, but on supporting that equipment and front-line capability. The House does not get the chance to debate that aspect of defence policy enough.

My comments today are made as a loyal supporter of the Government's defence policy, which has been a huge success since we were first elected in 1997. Like the hon. Gentleman and indeed you, Madam Deputy Speaker, I have had the honour to represent Parliament on the NATO Parliamentary Assembly for some years. I have also been a member of the sub-committee of that assembly on future military capability, and I have been proud to observe the role that British defence policy—especially the strategic defence review—has played in transforming defence, not only in this country, but in other NATO countries. I do not know whether hon. Members are aware that all the countries that have undertaken a strategic defence review, including Norway, Germany, Spain and many former Warsaw pact countries—the latter through their military action plans—have referred to the British strategic defence review as a basis for considering transformation.

I was present when the former Supreme Allied Commander Europe, General Wesley Clark, held up a copy of the British strategic defence review and told other NATO countries that that was how it should be done. The SDR has been a great success story. Indeed, I have a spare copy, for anyone who is interested, of the Spanish defence review, which pays particular tribute to the British review. In fact the only country in Europe to undertake a defence review recently without paying tribute to the British role is France. Hon. Members may not be surprised to learn that.
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I welcome the speech by my right hon. Friend the Member for Walsall, South (Mr. George). All hon. Members should read the Defence Committee's report carefully, and it would be a mistake for the Government to ignore what it says. We have done well in formulating our vision and in the reconfiguration of our forces to meet future challenges, but I sense a drift in the Ministry of Defence on issues of procurement and logistical support. The Defence Committee report should be welcomed by Front Benchers as a warning shot across the bows. There are problems developing in the Department and now is the time to do something about them, while we still can. In that way, we can build on the excellent start that we have made with our smart procurement and smart acquisition policies.

Mr. Caplin: The Ministry has no intention of suggesting that we do not understand the points made by the Defence Committee—I will say more about that later—or that we are not willing to learn lessons. We have proved over the years that we are willing to do so. However, some of the language used in the report was not properly evidenced. That is where the disagreement has occurred between the Defence Committee and the Ministry.

Mr. Smith: I am delighted with the assurance that my hon. Friend gives us in that intervention, but I still have deep concerns about trends in the Department.

Mr. Lindsay Hoyle (Chorley) (Lab): Does my hon. Friend agree that procurement—whether for Typhoon, Hawk or the A400M—has been very good under the Government, but the big problem, especially in respect of British textiles, is that uniforms are being made in China by a red army company? I am sure that he would agree that that is absolutely absurd and should not be allowed to happen.

Mr. Smith: I am not familiar enough with the issues to be able to comment on them—I am sure that my hon. Friend the Minister is and will take every opportunity to do so—but I take the point that was made earlier; what we want for our servicemen and women, who do such a wonderful job for us throughout the world, is the best equipment at the best price. That occasionally involves making tough decisions.

I want to spend the time left to me throwing up a case that reflects my concerns about developments in the DPA and the Defence Logistics Organisation that have been flagged up already in the Defence Committee report. I refer to the announcement on 16 September of the Minister of State's preferred option to hand back the entire deep repair and maintenance of the RAF's premium front-line fleet of Tornado GR4s to the RAF. I am talking not about servicing in theatre, first-line servicing or minor repairs to keep those aircraft in the air, but factory maintenance. Major repair and overhaul is being taken away from the Defence Aviation Repair Agency.

I commend the report produced by the Defence Committee in March 2001 that heralded the creation of that agency as a great innovation, as part of the strategic defence review as it relates to smart procurement.
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DARA was created by Her Majesty's Government in April 2001, as an alternative competitive source of aircraft repair to that offered by the commercial, private sector. It has a major strategic role in ensuring that our front-line fleet is kept in the air at the right price, so that we get value for money.

The RAF used to carry out deep repair and maintenance—in fact, it did so in my constituency for 40-odd years—but not because it could deliver front-line capability better, more cost-effectively or more efficiently than business, but because there was a very good military case for doing so during the cold war. Since the end of the cold war, no one—none of the NATO countries, nor any of those who produced strategic defence reviews—believes that there is any military or economic case for the RAF to carry out deep support for our fast jets on the front line.

Only the declaration of a preferred option has been announced, but I am deeply concerned that, if pursued, it will result in capability failures and a dependence on a monopoly source of support for the RAF, and that a well-known defence contractor—I shall not name it, but I am sure that those on the Front Bench are aware of it—will be relied on to bail out the RAF in the future, as it has had to do in the past. If the fully commercialised civilian capability that exists is taken out of DARA, the RAF will have no one else to turn to. I draw the House's attention to the recent comments of the Public Accounts Committee when it interviewed Sir Kevin Tebbit about the Ministry of Defence's constant failure to avoid being dependent on a monopoly supplier; that is exactly what is happening.

The decision is bizarre, but it reflects the drift that is occurring in the DPA and the DLO. I am absolutely delighted that the Defence Committee has decided to investigate the preferred option before the decision is taken, rather than after the recommendation is implemented and the capability is lost for ever.

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