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The Chief of the Air Staff has warned that the RAF is running “very lean”, and now we read that they are to lose two squadrons of Tornado strike aircraft.

Those warnings are being ignored by the Prime Minister, who has for 10 years starved the armed forces of the resources that they need to do the job that he has asked them to undertake. He says that the armed forces have been given what they need by way of urgent operational requirements, but those eventually have to be absorbed into the shrinking defence budget. There was a great fanfare yesterday for the extra 140 Mastiff armoured vehicles, but no extra money, as the Minister for the Armed Forces made clear in his opening speech. Indeed, we know from a memo leaked to The Sunday Telegraph that the Chief Secretary to the Treasury has directed that

The Under-Secretary has a duty to tell the House today whether that memo is accurate.

In the meantime, in a desperate attempt to show savings, the MOD tried subterfuge, only to be exposed by the Defence Committee chaired by my right hon. Friend the Member for North-East Hampshire (Mr. Arbuthnot), which revealed that alleged savings of £781 million turned out to be £333 million, with the
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remaining £448 million transferred to other budgets. That chaotic situation is set against a background where everyone knows that we face an increasingly uncertain world, with Russia engaged in sabre rattling, as my right hon. Friend the Member for Fylde warned, and turning off the energy supplies of those who challenge it. In the meantime, China has invested heavily in building its military capability and rogue states have threatened to acquire lethal long-range weapons. As the Minister of State himself said, who knows what will happen in 10 years’ time? This is an uncertain world and defence is the nation’s insurance policy, but the Prime Minister is not paying the premium.

Such is the hand-to-mouth policy that the excellent defence industrial strategy launched by the able and respected Minister for Defence Equipment and Support, Lord Drayson, has run into the MOD sand, and we now have a twin-track procurement policy of cash-unlimited UORs running alongside protracted, unfunded, long-term programmes which may or may not be relevant when they come to fruition. The whole procurement process has failed to adjust to the new world order. As the head of Thales, Mr. Denis Ranque, said to me when I met him in Paris on Thursday, we need to devise a new procurement strategy that reconciles the need for agility in meeting rapidly changing threats with the need for a longer-term programme into which the short-term requirements can fit.

The real problem is that the stewardship of one of the UK’s greatest assets—Her Majesty’s armed forces—is in the hands of a man who has no understanding of, let alone empathy for, the armed forces. Why else would he have made the Defence Secretary’s job and the Minister of State’s job part-time? Why else would he have scrapped the Defence Export Services Organisation, which has helped Britain’s defence industry to achieve annual export sales of £5 billion? [ Interruption. ] The Minister for the Armed Forces is not part-time—I was referring to Lord Drayson: he, too, is a Minister of State, and he is a part-timer. The decision to scrap DESO was made personally by the Prime Minister without any consultation with his Ministers, let alone with industry. It was smuggled out as a written statement two days before the summer recess, thereby denying Parliament the chance to hold Ministers to account, contrary to all those soothing assurances that he gave on taking over from Mr. Blair. That early move graphically confirms the truth of Lord Turnbull’s view that the Prime Minister exhibits “sheer Stalinist ruthlessness” and holds his colleagues in

What an absurdity to announce a consultation after the organisation has been axed—execution first, followed by the trial. I know that Ministers are embarrassed, because they were never consulted. The Minister for the Armed Forces, of course, was not around at the time of that dirty work, but the Under-Secretary was. It was shameful, and it was met with almost universal anger and dismay, not least from Ministers who were consumed with embarrassment at that example of Stalinist ruthlessness, which could only have been undertaken by someone keen to placate those who campaign against defence exports or, indeed, agents of the campaign against the arms trade. As my hon. Friend the Member for Newbury told us, the chief executive of BAE Systems, the world’s fourth largest defence contractor, wrote to
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the Prime Minister on 26 July. Mike Turner rightly praised DESO for providing a world-class capability in Government support for defence that was the envy of our principal competitors, who cannot believe their luck. My hon. Friend also quoted Helen Liddell, a stalwart of the Labour Benches for many years, who said in a letter to Digby Jones:

She told Digby Jones that Australia is setting up its “own version of DESO”, which is an indictment of the Government. The fact that the Ministry of Defence will retain Saudi business within the Department indicates that that decision is absolutely rotten.

Now Ministers are trying desperately to cobble together a formula to replace DESO. We await the outcome of that completely needless exercise, and if it fails to provide what we regard as an effective substitute, we shall have no hesitation in undertaking to restore DESO to the MOD after the next election and the return of a Conservative Government.

There is a widespread view that the current tempo of military operations is unsustainable on the present budget, to which today’s announcement makes little practical difference. As my hon. Friend the Member for Woodspring said at the outset of the debate, procurement is a welfare issue. The Government have failed to give our men and women the equipment that they need, demonstrating that they have failed to honour their part of the military covenant. We regret that the Prime Minister’s timidity in failing to call a general election will deprive us of the opportunity to take steps immediately to restore the broken covenant, but we shall use the forthcoming months to champion the cause of our brave men and women in uniform, who deserve much better than they are being given by the Government.

9.25 pm

The Parliamentary Under-Secretary of State for Defence (Derek Twigg): It is an honour and a privilege for me to work with our armed forces and veterans. I join the rest of the House in paying tribute to their courage, determination and professionalism. We are well aware of their bravery and the task that they are undertaking in Iraq, Afghanistan and elsewhere around the world.

It is right that the House should scrutinise the current procurement policy and that we should have this debate to look at ways of continuing to improve what we do. Service personnel and taxpayers have a vested interest in procurement, and it is our duty to ensure that we have the right policies and processes in place to help British armed forces.

The debate was wide ranging and included some very good contributions. We heard from my hon. Friend the Member for Grantham and Stamford (Mr. Davies), the hon. Members for North Devon (Nick Harvey) and for Mid-Sussex (Mr. Soames), the right hon. Member for Fylde (Mr. Jack), my hon. Friend the Member for Plymouth, Sutton (Linda Gilroy), the hon. Members for Reigate (Mr. Blunt), for Dunfermline and West Fife (Willie Rennie), for Salisbury (Robert Key), for Harwich (Mr. Carswell), for Newbury (Mr. Benyon), and for Lancaster and Wyre (Mr. Wallace), and my hon. Friend
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the Member for Glasgow, South-West (Mr. Davidson). I shall try to deal with as many of the issues raised during the discussion as I can.

I was surprised that the first item of procurement that was brought up was British lamb. The hon. Member for Leominster (Bill Wiggin) is not present, but I understand that the figure that he quoted is not correct. It is not 3 per cent. of our procurement—13 per cent. of the lamb procured for the armed forces is of British origin and we would like to improve that, but various issues such as availability and price must be taken into account. Where we can source British produce and meat, we will do so.

As Defence Ministers, my right hon. Friend the Secretary of State and I regularly visit our armed forces personnel in the UK, in operational areas and elsewhere. The hon. Member for North Devon mentioned kit. One of the first questions that we ask our armed forces personnel wherever we are, particularly in Afghanistan and Iraq, which I visited three weeks ago, is what they think of their personal equipment. Perhaps I am hearing a different story from the one the hon. Gentleman hears, but the overwhelming view is not only that it is good, but that it is the best personal kit that they have ever had. That view has been put across to us from all ranks. As Ministers, we want to know if there are problems that we can deal with. From time to time there are issues—we heard about boots, for example—but the message that we get is as I have described it. A great deal of investment has been put into talking to our armed forces personnel about what they need and into the work that has been taking place in the MOD and the armed forces.

Let me give an example. As the House knows, I have responsibility for Defence Medical Services. When I was out in Camp Bastion a few weeks ago, the message coming across to us from our medics throughout the Defence Medical Services was that the personal equipment that they have, particularly the body armour, is saving lives that would not have been saved just a couple of years ago. That is an important point to make, and I reject the Opposition’s accusation that we are not spending to support our armed forces at home and abroad and to give them the best possible protection. I refute that, and I shall return to the issue later.

Dr. Fox: One of the consequences of improved body armour is fewer fatalities but a higher number of casualties who survive serious injury. I shall ask the Minister something that I have asked his predecessors about for more than a year. One of those consequences will be an increase in concussion-type injuries resulting in traumatic brain injury. The Americans have already instituted protocols for their servicemen and servicewomen in theatre, but we have not. When will that be done? We are constantly told that the Government will evaluate the information, but it is now some 18 months since this was begun in the United States, so when will we get it for our armed forces?

Derek Twigg: I have told the hon. Gentleman that we are examining this. Let me make it clear that when I was talking about this issue at Headley Court a few months ago, there was a difference of opinion about how it should be addressed. The Americans have a view
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about how they want to pursue it. We are listening to that and we shall be talking to them—we have a liaison officer out there. It is important that we get the medical opinion right. When we reach a conclusion, we shall make a statement in the House on our approach to this type of injury.

The hon. Gentleman is right that the way in which we look after people and injuries is a crucial part of the whole process. I hope that he will now accept that what is happening at Selly Oak, Headley Court and our regional rehabilitation centres is world class in terms of saving lives and allowing many people to be rehabilitated and, in some cases, to go back to service in greater numbers than they have before.

The hon. Member for Newbury takes a great interest in this because of his regimental connections and the casualties that his regiment has suffered. I praise him for his work in taking service personnel to Newbury. I know that that was a very good day out and that they greatly enjoyed it. He put a lot of effort into it, and I wish to put that on the record.

We need to judge the success of our procurement policy by the success of our military operations. We are clearly seeing success. Recently, when I was in Afghanistan, I found a great feeling that much has been achieved. There is much more to do, but people felt a great sense of achievement in doing something that was right and proper. That message came across from all ranks. There can be little doubt that our forces are demonstrating in Iraq and Afghanistan that they have behind them a robust and effective procurement infrastructure.

We have changed the infrastructure in recent years, most notably through the formation of Defence Equipment and Support and the implementation of the defence industrial strategy. Two years on, it is clear that the DIS is working and has made an impact. It is embedded in our culture and the way we do business, and it is driving better partnerships between the MOD, as customer, and industry. Clarity and transparency are the cornerstones of the strategy, building strong foundations for an equipment programme that is stable and affordable and has the flexibility to respond to changing operational requirements.

I want to echo an important point made by the hon. Member for Mid-Sussex: the fact that what our armed forces are doing in Iraq and Afghanistan is not getting wider recognition in the press and elsewhere. General Dannatt has also recently raised this issue, and we share those frustrations. Reporters are embedded in both theatres and, as the hon. Gentleman will know, there are opportunities to talk to our armed forces personnel. They could also go to Headley Court, where on two or three occasions I have spoken to them. There are plenty of opportunities to do more and plenty of information exists. A number of documentaries have been made and there have been TV involvements, but I agree that more should be done, and I urge those in the media to do more to publicise the fantastic bravery of our armed forces. My hon. Friends and I will continue to do as much as we can to ensure that the message about the bravery and professionalism of our armed forces gets across, but we cannot force people to print something or to show something.

Two years on, it is clear that the defence industrial strategy is working and has made an impact. It is a blueprint for change and a plan of action. It is about
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robust project management, proper deadlines and driving forward through life capability, making sure our forces get the kit that they need when they need it. Of course, innovation is at the heart of this.

In order to face the defence challenges of the future, we must maximise our benefits from advancing technologies. Last autumn, we launched our defence technology strategy, which outlines the research and development agenda over the next decade. The right hon. Member for Fylde raised a particular issue about the strategy’s future and I hope that we will be able to deal with that. Innovation and a focus on emerging technologies will be a clear priority. That has provided the direction for both the MOD and industry about where we need to retain UK-owned capability to ensure operational sovereignty and national security.

This nation has a strong science and technology base. UK scientists claim about 10 per cent. of the major international prizes every year. By 2014, the Government plan to increase investment in research and development to 2.5 per cent. of gross domestic product. Every year, the Department spends about £2.5 billion on research and development, and we are committed to pushing through our ideas into commercial spin-offs. We have steadily opened up our research programme to competition in recent years. We are well placed to reap the benefits of this process and the defence technology strategy sets the agenda on how we will go about that. Five major initiatives were launched through the DTS: the Grand Challenge; the Competition of Ideas; increased emphasis on science and technology research; engagement with industry on future investment in defence research and development; and investment in skills, about which my hon. Friend the Member for Glasgow, South-West made a point earlier. Those strands work together to ensure that the UK has the best people, skills, knowledge and industry it can.

The Competition of Ideas proved to be extremely successful in reaching out to the wider scientific and engineering community to find solutions for the new challenges we face. I am delighted to have the opportunity to announce the very first award. The Competition of Ideas recently saw its first contract awarded to Plextec Ltd, which will research improvements in communications between vehicles and convoys. That is the kind of creative application from a small company—several issues have been raised today about the importance of small companies to defence—that has the potential to make a vital contribution to this country’s defence effort. I commend my noble Friend Lord Drayson for his work in this area. It is widely accepted that he has done a magnificent job and made many major improvements.

Many hon. Members referred to the importance of the defence industry to this country, and it is a vibrant and thriving sector. It supports more than 300,000 private sector jobs and produces revenue of around £13 billion per year. I pay tribute to it; it is crucial to this country and the defence effort. It is imperative that we get it right by ensuring the best deal for the front line and the taxpayer, and building capability throughout our armed forces is crucial to that.

We talked about naval capability, but I would like to cover a few other areas. The capability of the Navy has improved demonstrably over the last decade. The Sea King Mk 6 anti-submarine warfare helicopter has been replaced by the new Merlin aircraft, which I saw recently
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during my visit to RNAS Culdrose. It is capable of significantly greater detection ranges and a faster cruising speed, and it is able to cover eight times more sea space, which represents a quantum leap in capability. Looking to the future, the maritime afloat reach and sustainability class of afloat support ships will replace the current group of ageing auxiliary fleet support helicopter ships. That will strengthen the Navy’s ability to sustain an extraordinary expeditionary capability well into the 21st century.

Much has been said today about capabilities, and as has been highlighted before, the responsiveness of our UOR programme. We have heard about the range of equipment now in theatre, and it is important to make the point that the UOR process has continued to deliver more than £1 billion of force protection—approved for Afghanistan and Iraq. It continues to deliver for our front line armed forces. To go further, as of August 2007, 91 per cent. of equipment procured under the UOR process was deemed either highly effective or effective by our troops, which is an improvement. The Viking, supplemented by UORs for a desert environment, has been praised by the Royal Marines operating in theatre. To quote one Marine:

Recently we have seen the deployment to Afghanistan of the guided multiple launch rocket system, or GMLRS, which has a precision strike ability of up to 70 kilometres. It has proved itself to be a remarkable asset to the Royal Artillery.

Air capability also plays a crucial role in the success of our operations. We are in the final stages of gaining airborne stand-off radar, or ASTOR. It is a ground surveillance system designed to provide information regarding the deployment and movement of enemy forces. With contract costs of approximately £800 million, the ASTOR system comprises five aircraft and eight ground stations, together with comprehensive training and maintenance facilities at the main operating base, RAF Waddington. Clearly, the up-to-the-minute information this technology can deliver will be of exponential benefit to commanders on the ground.

As I think was mentioned earlier, the procurement includes the future strategic tanker aircraft, which will replace the RAF’s VC10s and TriStar fleets. The new platform will perform air-to-air refuelling and air transport roles. We are proceeding with a private finance initiative and aim to have the capability by 2011. We have already invested £25 million in this project—a figure that is likely to increase as we place orders.

I shall briefly deal with several other points, especially those about helicopters. The hon. Member for North Devon spoke about the future of the Lynx helicopter. The project remains within its approved performance time and cost targets. The £1 billion cost that was announced in 2006 referred only to the contract with AgustaWestland for the development and manufacture of 70 aircraft. The overall approved cost is £2 billion, which includes significant elements outside the AgustaWestland contract, as well as VAT and the compound effect of inflation. We are committed to that.

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