Examination of Witnesses (Questions 320-339)|
RN, MR NICK
6 FEBRUARY 2007
Q320 Mr Crausby: I just wondered
what the original life expectancy of the Ohio was as far as the
Americans were concerned.
Rear Admiral Mathews: It was 30
years with a margin on top of that.
Q321 Mr Crausby: So it was a minimum
of 30 years?
Rear Admiral Mathews: A minimum
of 30 years.
Q322 Mr Borrow: Could I come to our
submarines. From reading the White Paper, it implies that the
Government proposes to extend the life of our submarines by five
years from 25 to 30 years. Is that in fact the case or is that
one of those issues still to be resolved?
Des Browne: We have decided to
plan on extending the life of the Vanguard class by around five
years, and the answers to the earlier questions imply that we
think it would be imprudent, indeed risky, to plan any greater
life extension. It does not mean that we have fixed the actual
date for each submarine for when it leaves service, but it forms
the basis upon which we plan the programme to replace them with
the new class of submarine.
Q323 Mr Borrow: What are the cost
implications of doing that?
Des Browne: Maybe Mr McKane might
be able to deal with the specific costs.
Mr McKane: The position is that
detailed costings of that life extension will be generated as
we get closer to the point where work actually has to be done
on the boats, but the work that we have done shows that we are
probably talking in round terms of hundreds of millions for the
five years for the four boats.
Q324 Mr Borrow: So that is hundreds
of millions for each of the four boats?
Mr McKane: No, it is hundreds
of millions for all four.
Q325 Mr Borrow: I think we have heard
evidence at earlier hearings that to extend the life beyond 30
years is not impossible, but the suggestion has been made that
that could cost up to half the cost of a new boat.
Mr McKane: Well, I would say that
you then start to talk in terms of billions.
Q326 Mr Borrow: To extend beyond
the 30 years?
Mr McKane: To start planning to
extend them, say, for another five years or longer.
Q327 Willie Rennie: The White Paper
considers the cost of procurement of the new SSBNs to be around
£15-20 billion for a fleet of four boats. How did you reach
that figure and how does that figure compare with the Vanguard
Mr McKane: Well, as the White
Paper makes clear, the £15-20 billion is composed of three
broad components: the submarines, which we have estimated would
cost in the range of £11-14 billion at today's prices; then
a warhead programme which might cost another £2-3 billion;
and infrastructure for which we have put in an estimate of £2-3
billion. The cost estimates of the submarine, as again the White
Paper makes clear, are inevitably initial estimates at this stage
and there has not been the level of detailed work with industry
that would be necessary to refine them, but they have been built
up on the basis of historic costs of previous submarine programmes
uprated to today's prices by taking individual components of the
submarines and putting it all together, and that is the resultant
figure, the £11-14 billion. As for the other two sums that
I mentioned, the £2-3 billion for a warhead are figures that
again have been subject to some internal study which I cannot
really go into too much here, and the infrastructure costs are
based on an analysis of the asset registers of existing infrastructure
associated with the deterrent infrastructure on the Clyde at Faslane
and Coulport infrastructure, and infrastructure at Devonport.
There is inevitably uncertainty about precisely when such expenditure
would have to be incurred and again, as we made clear in the letter
that the Secretary of State referred to, this sum of £2-3
billion for capital investment and infrastructure would be additional
to any ongoing maintenance costs associated with existing infrastructure
over the period of the life of the boats.
Q328 Willie Rennie: Could you give
a stab at what you think the through-life costs will be? You have
briefly mentioned it there, but have you got a rough estimate?
Des Browne: We estimate that to
be between 5 to 6% of the defence budget. I just refer back to
the White Paper, that we were perfectly clear in the White Paper
that the procurement costs would be refined as the concept and
the first assessment phase is taken forward with industry. We
also go on, I think, in the White Paper to make it clear that
this clearly will need to be more accurate and more transparent
in terms of its accuracy before we actually get to the contracting
time of 2012-14, but I would just say that the running costs are
around 5 to 6% of what they presently are, so we estimate that
the running costs will be what they presently are. What people
do of course in terms of argument is that they aggregate those
running costs with £15-20 billion, which is a perfectly legitimate
thing to do, but that is what they do to come to these larger
Q329 Willie Rennie: There is great
interest in where this sum of money will come from. Will it affect
the conventional forces or will it come from outwith the MoD budget?
Can you shed any light on that?
Des Browne: I cannot make it any
clearer than the Prime Minister does in the foreword to the White
Paper itself. He makes it clear that this investment will be maintained
not at the expense of the conventional capabilities of our Armed
Forces, so I cannot give any clearer reassurance than that; that
is the Cabinet's reassurance. Can I just say though, Chairman,
on that point that it is important that people should understand
that we do not see this strategic deterrent as being an alternative
to conventional forces. It presently is additional to our conventional
forces and for a different purpose, so that is exactly consistent
with, and is nothing new, the way in which governments of this
country approach this expenditure.
Q330 Chairman: So have you thought
of charging it to the Foreign Office?
Des Browne: I do not think the
budget is big enough!
Q331 Mr Jones: Secretary of State,
can I just ask a question around this because we are having a
debate in March in Parliament about whether or not we should go
ahead with this programme, unlike the pro- and anti-nuclear debates
in the 1980s where clearly there are some remnants still around
and we had some of them before us the other day in the likes of
the CND and others, but something which is actually, I think,
preying on the minds of a lot of Members of Parliament and politicians
is the fact about costs, whether we can actually afford this.
Do you not think, in terms of having an informed debate, that
pinning down these costs is going to be very important in that
debate? Although it might be reassuring to you that the Prime
Minister can say that it is affordable in the future, it is not
going to be his problem, is it, after the summer and is his possible
successor confident that we can actually afford this within the
Des Browne: Well, assuming that
his possible successor comes from the Cabinet, then his possible
successor was a party to the agreement of the White Paper, and
there was no dissension from anyone in the Cabinet about this.
What we are seeking to do here in this White Paper and in this
debate is inform the country and Parliament to an extent that
they have never been before about the issues that underpin this
decision at a time in the process that we have been through once
before, but was conducted in secret effectively. Now, necessarily
there has to be a degree of assessment, so these figures that
we are putting in the public domain, I know from the evidence
that has come before your Committee, have been supported by a
number of experts. They are informed by our own experience and
by the discussions that we have had with industry and by the skills
and abilities that we have built up over a period of time in this
area. They are the best estimates that we can give, but of course
they will be refined by the process at the concept and assessment
phase and we will have an obligation, or the Government will have
an obligation, to keep Parliament and others informed about that
development, but at this stage in relation to the work that we
need to start now, the decision that we need to take now, then
we have put into the public domain the information that we have
in as much detail as it is appropriate for us to do and these
are honest assessments.
Q332 Mr Jones: But we have not had
a good track record of procuring submarines. Have you actually
built into these costs a possible contingency for another Astute-type
Des Browne: The circumstances
of Astute, which have been examined by the Select Committee and
others, I know, were very particular and, among others, they were
a function of allowing the skills and capabilities for submarine
design and build to deteriorate and they needed to replace them.
Can I just say that, as a country, we have a very good track record
of building these SSBNs and in fact the current class of submarines
came in on time and under budget in terms of the estimations.
Can I also say that these figures that we have put into the public
domain are not just based on our own experience, which is extensive
and actually in this area of procurement a good experience, but
they are also based on the international experience of a lot of
other countries who have built submarines and of what they were
likely to cost. It may be that someone with me may want to add
to that in terms of detail or confirmation.
Mr McKane: It is worth saying
that the costings have been done carefully to ensure that they
do include a range. I made it clear a few minutes ago that we
were talking about a range of costs and that the range contains
contingency, although it is not separately identified in the White
Paper as a contingency.
Rear Admiral Mathews: On Astute,
we have learnt hard lessons on Astute.
Q333 Mr Jones: I hope you have!
Rear Admiral Mathews: Well, we
have. We had effectively a 10-year gap in the build programme
and at a recent review of the Astute programme by what we call
a "red team", effectively a group of people taken outside
our own industry, so we have Electric Boat, some US Navy, et cetera,
their conclusion was that we have now re-established the build
capability and that has taken us nearly 10 years. The lesson for
us is to go back to Vanguard, recognise what we did for Vanguard
and learn from the Astute experience.
Q334 Mr Hamilton: Secretary of State,
you gave the response quite rightly that there will be a decision,
there will be a discussion and there will be a vote taken. Effectively,
for most of us that will be a once-in-a-lifetime opportunity to
make that decision, a one-off decision, if you like. How do you
answer the people who put it to you that you have got it the wrong
way round and what we should be doing is having the debate about
where the UK's role is within the world and indeed about our conventional
forces versus Trident and that more money should be put into the
conventional forces after we make a decision about where our role
is in the world? Are we not just having a debate about one part
of the defence budget which in fact puts us into a position where
we then restrict our debate at a later stage?
Des Browne: I do not agree with
that, and part of the reason for the very specific reference in
the foreword and in the Paper itself to the commitment that this
expenditure will not be incurred at the expense of conventional
capabilities was to reassure people of that. I have to say that,
whatever other words I use, that is what that assurance will come
to at this stage and people either have to accept that, given
that it comes from the whole of the Government, or not accept
that, and we cannot be any clearer than that. As far as contextualising
this decision is concerned, can I just say that there are those
who argue that we do not need to make this decision now, not,
with respect, Mr Hamilton, for the reasons you have articulated,
but for other reasons. Essentially, the arguments come to, "These
are difficult decisions and, if we can put them off, let's put
them off". We have sought to set out in the White Paper,
and I think this has stood the test of debate and time, although
people assert that it is not necessary to do it, but they refer
to the previous decision, not recognising that when the decision
was made in relation to Vanguard, much of the concept and assessment
work was done before the decision was announced, so they assert
that that is the case, but what we have sought to do in this White
Paper is to set out the nature of the threat that we think this
country is likely to face, or probably will face, in years to
come and, in the light of that context, make a decision as to
whether we should continue to have a strategic deterrent. The
view that we have come to, on balance, is that we should continue
to maintain, and plan for, our future generations needing to have
a strategic deterrent and I think that is a coherent argument,
I think that it is admittedly "on balance" and it is
the right argument. In my view, once you accept that that threat
is there or likely to be there, then you are to a substantial
degree committed to having to defend yourself against it. We have
to do of course the same thing in the context of the world that
we live in in relation to our conventional capabilities and we
have to ask ourselves, as the Prime Minister asked the country
recently in a very extensive speech, whether we are prepared to
make the investment in our conventional capabilities to meet those
challenges and our place in the world.
Q335 Willie Rennie: Secretary of
State, I think you misrepresent slightly those who argue for a
delayed decision. In the White Paper, it says that the detailed
construction and design contracts will not be awarded until 2012-14
and you have already mentioned that you do not have all the detailed
costs associated with it and you will only know those as time
goes on. Rather than trying to wrap up all the decision on Trident
now, do you not think it would be more appropriate or better to
wait until we are in advance of 2012-14 so that we are more aware
of all the facts and, as well as the international situation,
the security situation so that we have got all that information
together before we make that decision?
Des Browne: Mr Rennie to some
degree assumes that there are not other decisions to be made after
this decision is made. Of course there are, but the question is
whether the Government should carry on with what is necessary
to inform that later decision about the contract without any recourse
to Parliament and whether the Government should incur that expenditure
in an extending review period in relation to planning for that
decision without any recourse to Parliament or without any public
debate. The difference between the Liberal Democrats and us appears
right now to be that we are prepared to have a public debate about
this part of the decision and have this decision made publicly,
whereas the Liberal Democrats want us to plan for a later decision
in a secret and quiet way and then surface that decision at the
point at which we are contracting. It is very clear.
Q336 Willie Rennie: I think you are
misrepresenting again. What I am suggesting is that it should
be in a staged process and, rather than trying to make everybody
make decisions all at once now, why do we not agree to go ahead
perhaps with the initial concept and design work and have another
parliamentary vote in advance of 2012-14 when we are aware of
all the facts and the international situation?
Des Browne: I am constantly told
by people that no Parliament can prevent a later Parliament from
making another decision. The beauty of our democracy is that people
can address decisions that need to be made when they need to be
made. What we are saying here is that looking forward from here,
on balance, our view is that the strategic contexts that future
generations will face are likely to be such that they will want
to have the benefit of the nuclear deterrent that we have enjoyed
the benefit of for the past 50 years and, if we are to offer them
that opportunity, we need to make certain decisions now and these
are the consequences of those decisions. Now, we are not making
all of the decisions, there are aspects of our nuclear deterrent
which we will need to make decisions about at some time in the
future, for example, the warhead, the replacement of missiles,
so we are making the decisions that we have to make now and we
are being consistent and open and saying to people, "These
are the consequences of those decisions now". Let us not
take them as if we are only taking a part of this now and we will
stage this through, but let us be honest about what we are doing.
I must admit, I am confused about the Liberal Democrat position
in relation to this. This is the first time I have heard anybody
articulate their position as being, "Yes, we should be making
a decision now, but that decision should be restricted to a certain
part of this". Now, that is the first time I have ever heard
that. As I understood it, the position was that we do not need
to make this decision until 2014 and that necessarily, in my view,
meant that other things had to be done without any decision being
made, but if you have the ability to be able to put together your
Party's policy from here in questions, then that is a good position
for you to be in.
Q337 Willie Rennie: Just in terms
of decommissioning, we have talked about the point that there
will be ongoing costs to the decommissioning of Trident, irrespective
of whether we replace it. Have you examined those costs and what
would the costs be of just doing the SSNs alone in terms of maintenance?
You have given us a figure for the combined maintenance, but what
would be the costs for just the SSNs alone?
Des Browne: If you do not mind,
for the specifics I might refer to officials, but can I just say
that you are right to point out that, whatever the decommissioning
costs, we will have to decommission these particular boats because
that is at the heart of this decision process that we are going
through, that we will have to decommission those and we have some
estimates, I think, that we may be able to share.
Mr McKane: The memorandum, the
Government's response to the fourth report includes some detail
on this. It makes clear that the Department has included a provision
in its accounts of £1.75 billion which covers the decommissioning
of past and current SSNs, that is nuclear-attack submarines, and
SSBNs. As to your other question about the £600 million per
year, I do not have an exact breakdown of how that splits between
the SSNs and the SSBNs.
Q338 Willie Rennie: But can you give
me a rough idea of how much the additional cost would be on top
of it? What roughly would be the breakdown if you took a stab
Mr McKane: The additional costs
Q339 Willie Rennie: What would be
the costs of just maintaining the SSNs alone and then if you added
on to that the maintenance of the SSBNs? Can you give me that
kind of figure? Does that make sense?
Mr McKane: I am not absolutely sure what
you are looking for, I am afraid.