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Mr. Kevan Jones (North Durham) (Lab): It is a privilege to contribute to this debate in a week when we respect and remember the veterans who fought for the freedoms of this country in the second world war. They
 
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fought fascism so that we could have the democratic freedoms that we take for granted today. It is also apt that we should this week remember the members of armed forces and the civilians who have died in the countless other conflicts since the second world war.

It would be remiss of me not to refer to the tragic events that are happening around us today in the capital city. I add my sentiments to those of the hon. Member for Berwickshire, Roxburgh and Selkirk (Mr. Moore), who said that our thoughts are with the families—but we must remember the dedicated and hard-working emergency workers who are, as we speak, working selflessly on behalf of their fellow citizens.

The threat that we face now is very different from the bipolar world and the threat that we faced in the cold war. That threat was predictable, and I was very interested in the history lesson that we had from my hon. Friend the Member for Pendle (Mr. Prentice) about that bipolar world. We knew who the enemy was and we could ensure that we had the appropriate response. As my hon. Friend said, there were different views on how to respond to the threat, but at least we knew what it was. The threat we face today is, as we have tragically seen, unpredictable.

In the last Parliament, I had the privilege of sitting on the Defence Committee. One of the first reports we produced after the tragic events of 11 September was published in December 2001, and it was on the threat of terrorism. I thought that it would be interesting to revisit what we said. We stated:

"Our conclusion is that the threat from terrorism has become more pressing and more dangerous. A threshold has been crossed in terms of scale and level of casualties."

That is one thing that we need to remember about 11 September. The number of casualties that day changed terrorism across the world forever.

We also said that our response to such terrorism had to be very different, and not only rely on a military solution. We said that the response needed to be three-pronged, including military, intelligence and diplomatic means. We also said that it must include a humanitarian response to root out the causes of terrorism in various parts of the world, which are the poverty and tragic conditions that allow terrorism to breed. The report states:

"We must not lose our sense of the urgency and importance of this task in the months ahead. We must not hesitate to take the necessary steps to protect the UK and our interests overseas."

Our response must be measured and purposeful, but it must ensure that the democracy that we take for granted and the freedom of movement that we enjoy continue.

As I said, I served on the Defence Committee in the last Parliament and that gave me a great opportunity to meet many members of our armed forces in different parts of the world, including Iraq and Afghanistan. I echo the comments of other Members about the professionalism and dedication that our armed forces show in their duties across the world. In addition to the work that they do in Iraq and Afghanistan to fight terrorism, I saw good examples of the reconstruction work that they carry out. For example, the projects at Mazar-i-Sharif in northern Afghanistan involve military doctors working with local hospital doctors to bring health care to parts of Afghanistan that had never had it. We must bear in mind the fact that our armed
 
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forces are involved in a lot of humanitarian work in which they have expertise. We should be grateful to them for that.

If we are to ask our armed forces to undertake the necessary and sometimes dangerous tasks that they face, they must have the best equipment possible and the funding to go with it. I am pleased that the Government have committed extra expenditure to the defence budget—£3.7 billion over the next three years. That is the longest sustainable growth in the defence budget for more than 20 years. The Government can be proud of that. It is also important that the armed forces get the equipment that they need on time.

I welcome the publication of the defence industrial policy. We should not forget the jobs that the defence industry sustains and the skills that it maintains. The policy was welcomed by industry and it set out clearly how the record expenditure that the Government are putting into defence could also benefit large and small industrial companies in this country. It also gave a clear commitment to deal with some of the legacy issues that were left over from the previous Conservative Government. The right hon. and learned Member for Devizes (Mr. Ancram) reeled off a long list of what this Government had got wrong or had overspent on, but it is interesting that he seemed to forget the £900 million hole that they left at Rosyth when they took the clear political decision to move Trident submarine refit work to Devonport.

I also refer to the legacy issues that we had to take on, such as the Astute and other projects. They went way over budget and were unrealistically framed in the first place. We have done good work, but that has meant putting more money into those projects. I visited Barrow a few months ago, and the Astute project is now back on schedule. I pay credit to the work force there who have put in a tremendous amount of hard work.

I have criticisms, however, of the Defence Procurement Agency. I know that the Defence Committee was very critical of the way the organisation operates. It was interesting to hear the hon. Member for Gosport (Peter Viggers) refer to urgent operational requirements. I want more of them, because they seem to get equipment on to the battlefield or into people's hands a lot quicker. They ensured that the equipment arrived. The problem with the system, however, is that it is over-burdensome and so-called smart procurement does not deliver equipment to the front line or ensure that it represents better value for money.

The other problem with the Defence Procurement Agency and smart procurement is the effect on small and medium-sized enterprises. I know that my right hon. Friend the Minister is aware of the organisation Northern Defence Industries, that has done sterling work trying to put supply chains together to ensure that small and medium-sized enterprises can get into defence work. That is paying dividends because many companies in the north-east are for the first time getting into projects in which they would not have participated in the past.

There is a bar, however, because under the prime contractor route the problem is that the prime contractor is selected, but the supply chain is somehow thought about afterwards. We need to sharpen up procedures so that we ensure not only that we know the
 
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position of prime contractors when they are appointed, but that we have a locally sourced supply chain in place, because many companies will happily participate in such projects if they are given the opportunity to do so.

A further criticism that I make of the Defence Procurement Agency is its turnover of staff. The Defence Committee discovered that the turnover rate is some 30 per cent. of its staff, which leads to inefficient procurement for new projects. If Lord Drayson, the new defence procurement Minister, has the legendary business expertise about which I am told, he needs to take a clear, hard look at the way in which simple projects can sometimes take far too long after they get stuck in the Defence Procurement Agency in Bristol.

I have already mentioned urgent operational requirements. The Defence Committee examined lessons that could be learned from our operations in Iraq during Operation Telic. The urgent operational requirements worked well—the hon. Member for Gosport referred to the Minimi machine guns. However, other problems that we have raised have, alas, not been addressed. I am worried that although the Defence Committee and others highlight such problems, we seem to have to wait the gestation period of several African elephants before any action is taken. For example, logistics supply is even more important now that we have a style of warfare that is more expeditionary, which will be reflected in future projects. It is thus important to get the logistics chain right, but it was clear that there were problems during Operation Telic when trying to find out where things were in the supply chain.

One of the Committee's conclusions was that such problems were not new because they had been highlighted after the first Gulf war of 1991. The lack of an asset-tracking system in Operation Telic caused numerous serious problems in theatre, including problems with the distribution of critical items such as body armour and nuclear, biological and chemical equipment. The Committee's report said we needed to urge the Ministry of Defence to come up with a solution to the problem as a top priority.

We also heard evidence that an off-the-shelf solution had been bought to take a lot of equipment back to the UK. The American system allows containers to be asset-tracked throughout the supply chain, so people know not only where they are, but what is in them. However, lo and behold, the Ministry of Defence and the DPA want to reinvent the wheel by trying to wed together the three existing Army, Navy and Air Force systems, which do not talk to each other. I sometimes wonder whether we should just buy equipment off the shelf, instead of thinking that we need a home-grown solution for such complex systems. That solution would take a long time to develop, which would not only delay equipment from getting to a vital theatre, but mean that it would take a long time before new developments occurred.       Overall, we should be proud of the men and women of our armed forces and their commitment. Given the community that I represent, it is rewarding to see the opportunity that the armed forces give young men and women from deprived backgrounds to fulfil their potential. When I meet those men and women, wherever they are throughout the world, I never cease to be amazed by their dedication and the large responsibility that rests on some very young shoulders.
 
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4.15 pm

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