Select Committee on Defence Minutes of Evidence

Examination of Witnesses (Questions 320-339)



  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 class?

  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 figures.

  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 defence budget?

  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 fiasco?

  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 at it?

  Mr McKane: The additional costs of decommissioning?

  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.

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