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At the same time, many of our smaller companies are being acquired by overseas interests, such as Thales from France and Finmeccanica from Italy. There is clearly an element of the inevitable about that, thanks
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to globalisation, but if we want to maintain a vibrant defence industry in the UK, we must ensure that investors can see an income stream.

John Smith (Vale of Glamorgan) (Lab): I hope that the hon. Gentleman will recognise the achievement of the British defence industry. Recently published figures show that defence exports from this country are at record levels.

Mr. Howarth: The hon. Gentleman, who plays such a vigorous role in our debates, will be pleased to hear that I shall come to that in a moment.

The Minister needs to tell us when we can expect DIS 2. In the other place, his colleague Baroness Bolton told my noble Friend Lord Astor that it was anticipated that DIS 2 would be brought forward, but that no date had been set. We, and British industry, would like to know when that will happen.

I am the first to acknowledge that foreign companies such as Thales and Finmeccanica make important contributions to the UK’s defence effort—

Mr. Kevan Jones: What is the hon. Gentleman’s point?

Mr. Howarth: My point is that we must remember that investment decisions are taken at head office. If most of the relevant head offices are outside the UK, we need to bear that in mind.

For its part, industry needs to accept that the current economic outlook is pretty bleak. It will have to smarten up its processes still further, as we shall seek to secure better value for money for the taxpayer.

I am concerned about the three prototype Nimrod MRA4s, and gather that BAE Systems is demanding a substantial amount of money to bring them on line. The failure of the Nimrod programme lies wholly at the company’s door: it is the design authority for that aeroplane, and it has a responsibility to the nation to deliver it into service very quickly. It is hugely needed for current operations, as well as for the future.

On a positive note, British industry’s attainment of a record £10 billion in defence sales last year—to which the hon. Member for Vale of Glamorgan (John Smith) alluded—under the outstanding leadership of Alan Garwood was a singular milestone. It is a tribute to the co-operation between industry and the Ministry of Defence, but that collaboration was shattered—utterly needlessly but wilfully—by the Prime Minister last July. That was an act of vandalism that I am pleased to report will be reversed immediately when the Conservative party assumes office. It is a sign of the transfer of power in this area that my question to the Ministry of Defence about how many foreign military delegations had visited UK Trade and Investment since that act of vandalism has been transferred to the Department for Business, Enterprise and Regulatory Reform.

Mr. Bob Ainsworth: Does the hon. Gentleman have any evidence that the damage that he alleges has actually been done? We have just heard about last year’s record defence sales. What evidence does he have?

Mr. Howarth: I am trying to find information. I have been told that the Ministry of Defence is no longer in command of these matters, as I feared. The responsibility
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for defence sales has been transferred to another Department, where it sits alongside that Department’s responsibility for other areas of British industry. Last year’s record defence sales are a tribute to Alan Garwood and his team of outstanding people, but I want to know how many military delegations are continuing to speak to the Government. I shall look forward to seeing them at Farnborough. I hear that they do not want to speak to UK Trade and Investment. They want to speak to Government, and people in uniform want to speak to other people in uniform. That is the problem.

Mark Pritchard: Does my hon. Friend share my concern at the Government’s withdrawal of funds from both the Ministry of Defence and the Foreign Office for defence and military attachés, who do a great job throughout the world and also play an important part in defence sales?

Mr. Howarth: I entirely agree. I think that some of those offices could be closed without huge damage being done to the United Kingdom’s defence industry, but the closure of others—I note that the Finland office, for example, is earmarked for closure—strikes me as evidence that the Foreign Office has demanded more money from the Ministry of Defence, which it is having to apply to current operations.

Paragraph A1.21 of “Defence Industrial Strategy” states:

That brings me to the subject of the joint strike fighter. We are equity partners in that major United States programme, but the US has been reluctant all along to allow us full operational sovereignty over the aircraft that we acquire. That cannot be right, and is no way to treat a key ally. We have experienced no problems with the arrangements regarding the operation of our Trident submarines, and the US should not hesitate to give us the sovereignty that we require over the joint strike fighter. Perhaps Ministers can tell us how matters stand, and whether the Government are continuing to insist that if Lockheed Martin is to have any role in the maintenance of the aircraft, it must perform that role from a facility within the United Kingdom.

I suspect that I am not alone in being extremely concerned about the treatment of senior BAE Systems personnel at the hands of the United States Department of Justice. The fact that our key ally had detained as common felons the chief executive, a non-executive director and the group business development director should have had the Prime Minister on the telephone to the President of the United States forthwith. I understand that one of those detained was met by five armed guards, and that his luggage was searched for an hour while they awaited a subpoena warrant.

I also understand that there is to be a grand jury hearing next month, when the United States will seek information on the UK-Saudi deal. That was a Government-to-Government deal between Her Majesty’s Government and the Kingdom of Saudi Arabia, and is not the business of the United States. Perhaps we should demand to see its memorandums of understanding with the Israelis.

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Mr. Kevan Jones: Will the hon. Gentleman tell the leader of his party that he should not criticise the Prime Minister for making what I consider to have been the right decision when the Government interceded in the investigation of the al-Yamamah deal with Saudi Arabia? He will recall that Conservative international development spokesmen tabled a motion to be debated on the Floor of the House—with which I know the hon. Gentleman did not agree—criticising the involvement of BAE Systems in Tanzania.

Mr. Howarth: We made it very clear that we regarded that as a matter for the Attorney-General, as the Law Officer of the Crown with responsibility, and that we would accept his judgment.

The present disastrous state of affairs is the effect of 11 years of stewardship, or lack of it, by the Prime Minister—first in his role of Chancellor, when he failed to fund the armed forces to the extent necessary to meet the Government’s own strategic defence review requirements, let alone current operations, and now in his role as First Lord of the Treasury, where his understanding of the military is so inadequate that he believes that the Secretary of State for Defence can double up in his spare time as Secretary of State for Scotland, with the modest task of saving his colleagues’ seats from the ravenous Scottish National party hordes. That constitutes no assault on the present incumbent, the right hon. Member for Kilmarnock and Loudoun (Des Browne), for whom I have great affection and who has sought to fulfil his impossible task to the very best of his considerable ability; but wherever I go, I find that the military feel the insult keenly. They believe that the political class does not value them.

The defence of the realm and its wider interests across the globe is the first duty of any Government. The extent of this Government’s failure to provide for both the present and the medium term has been, to an extent, masked by the extraordinary professionalism, courage and dedication of the men and women of Her Majesty’s armed forces, the support of their families, and the hard work and ingenuity of the 300,000 people in Britain’s defence industry who are engaged in the noble cause of providing equipment for the front line. They deserve better, and I trust that the incoming Conservative Government will not let them down.

2.59 pm

Mr. Bruce George (Walsall, South) (Lab): When I was the Chairman of the Defence Committee and the hon. Member for Aldershot (Mr. Howarth) was partially under my control, I thought I could teach him the moderation and fair-mindedness that I had exhibited throughout my parliamentary career. At the beginning of his speech, I thought that I had succeeded brilliantly, but I realised that I had wasted 15 years of my life when he lapsed back into his partisan ways, seeing everything through a single set of spectacles. Frankly, if people are considering what way to vote in the next election and if defence figures heavily in their thinking, perhaps they should look at who the spokesmen are on those areas of policy. That gives me a great deal of hope, which I must confess I have not witnessed for some weeks. If the hon. Gentleman manages to convey his sense of fairness to his other colleagues, I shall be quite up for the next election.

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Linda Gilroy (Plymouth, Sutton) (Lab/Co-op): Someone in my constituency summed it up very aptly as, “Scratch a Tory, same old story.”

Mr. George: My nails are not long enough to scratch the hon. Gentleman, but I can work it out without undertaking such a painful search.

The hon. Gentleman spoke about a disastrous state of affairs. Any serious-minded person—there are some—would see more than a glimmer of hope that a Labour Government had behaved incredibly responsibly for 10 years. I find it deeply insulting that the endeavours of a Government who have been successful are somehow deliberately misconstrued to try to give the impression that Michael Foot has been Secretary of State for Defence and Tony Benn the Minister for Defence Procurement for the last 10 years. It has not been that way at all. If the hon. Gentleman thinks that, I feel some concern.

I shall try to be even-handed. When I was Chairman of the Defence Committee, we kicked the hell out of the Government, whoever were the Government of the day. That was part of our role and no mercy was shown. I reached the conclusion, rather painfully, that despite the immense endeavours of Governments of whatever political hue over the years, defence procurement has proved to be immensely complicated. The best minds and organisations, with the best will in the world, have not yet led us to produce the weapons and the equipment required for our armed forces within the original budget that actually works. It has not happened.

From the strategic defence review onwards, I cannot think of any area of Government policy that has been subject to more close analysis, investigations, inquiries, changes, adjustments and readjustments, all seeking that ultimate goal of producing the equipment required in time and of the right quality at an acceptable cost. Whatever Government are in office will pursue that totally elusive goal.

I spent many hours, before the hours of the House were altered, in the Library looking at the history of defence procurement. I found it quite interesting because so many lessons can be learned. Every single war in which our armed forces have engaged was either just about won, or even lost, not just because of poor leadership but because of poor procurement. Poor equipment has existed as long as warfare. In recent years, the subject has been treated seriously. I recall reading stories—I was not there at the time—of how infantrymen’s bayonets were snapping in the 19th century and of new ships sinking on contact with water. So one finds that this is not a recent development.

When the Defence Committee produced the first of its many very good reports under this Government in 1998, I commissioned an analysis of the history of the examinations of defence procurement, and what we came up with was not earth-shattering: the 1961 Gibb-Zuckerman inquiry was followed a few years later by the Downey report; then there was the Mr. Peter Levene appointment, which brought many changes between 1985 and 1991 and many critical reports after his departure by the Defence Committee, the National Audit Office and the Public Accounts Committee, internal MOD inquiries and Defence Evaluation and Research Agency inquiries. The industry, academics and consultants made criticisms and proposed how procurement should be
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improved. There was then the very important strategic defence review process, which was epochal in its approach, and the smart procurement and smart acquisition initiative and so on.

I am as guilty as the hon. Member for Aldershot, in that it is very difficult to put all the blame on one Government—in fairness, he alluded to that fact. Time scales are such that the programmes are begun by one Government, but are later cancelled or persisted with until the towel is thrown in when people say that they must be cancelled because they are not redeemable. Alternatively, something else could happen. I suspect that the SA80 is a great example of that, because it originated under Labour, somehow survived 17 years of the Conservative Government and then became a half-decent gun when Labour came back into office. The problem is that if one is going to take the hon. Gentleman’s approach or the one that I am just about to take, that is not entirely fair, because blame can be fairly evenly distributed.

The National Audit Office report gives many reasons why projects fail: inflation, cost estimating, changes in specification, quantity audit variation and cost variation. There are also equally long explanations of failure on in-service dates. One could go on almost endlessly.

I have said in previous debates of this kind that I should not go into the history too much unless provoked, and I have been provoked once again, this time by the hon. Member for Aldershot. I have found my infamous A to Z of Tory procurement failures. I shall just remind him of those, although I was not going to do so. If we see before us the team, with a few additions, that will be setting up as the new decision makers in procurement, we want to know what they are, what they are doing, what they are saying and what the genesis of their evolution is. I must therefore remind him about Bowman, among other things—I shall not cover the whole of my alphabet.

C stands for the cancelled common new generation frigate; for CACS, on which the Defence Committee reported in 1986-87—that system was rubbish; for HMS Challenger, which was a sea bed operation vehicle that was flogged off because it did not work; and for the Chinook Mark 2, which was originated in 1995 and with which we have not done much until recently, but we know where it began. D stands for DROPS—the Demountable Rack Offload and Pickup System—which I am sure the hon. Gentleman will remember, as everyone on the Defence Committee does. F stands for Foxhunter. I recall, as will he, that the Defence Committee was persuaded to close its eyes to the fact that when a Tornado was flying with its radar, there was no radar there—it was concrete put into the nose. We tried to sell it on the basis of concrete and not on the basis of a proper radar system. F also stands for the Fearless-Intrepid change, which took so long.

I could add the Hercules replacement, the C130J; JSTARS, the joint surveillance targets attack radar system, which we should have bought for ASTOR, the airborne stand-off radar; Law 80, a wonderful weapons system except that it bounced off Russian tanks; Nimrod 2000; QinetiQ, which was appalling; the Rapier field service C; the SA-80 rifle; the Upholder class submarine, which was flogged off to the Canadians; Westland; and Zircon. The list goes on and on.

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I am prepared to accept criticism of procurement failures. In a debate two years after we came into office, the then Opposition Defence spokesman criticised our record—it was my hon. Friend the Member for Grantham and Stamford (Mr. Davies), who has since wisely defected to the Labour party, no doubt immediately after one of my critiques—and I told him to wait, because we had only been in office for two years and we had not had time to have any failures. I said that if he came back in 10 years, there would be a lot, and there are. But that is endemic. Despite all our efforts, defence procurement is an attempt to do the undoable. Other countries have failed equally miserably, and some far worse.

Mr. Gerald Howarth: I just wanted to say that the C130J was a success and ordered by us, but I shall not question the list any further because the right hon. Gentleman might find a new alphabet to double the numbers.

Mr. George: Until I do, I am prepared to teach the hon. Gentleman the existing alphabet. The C130J was partly his Government’s policy and partly Lockheed Martin’s. The Defence Committee came up with a solution and said that we should not put all our money into the C130J, which was then unworkable, but look for alternatives and supplement it. In this case, it was largely Lockheed Martin’s fault that the C130Js were not as numerous as they could and should have been, and my version of events is better than the hon. Gentleman’s. If he would like to try again, I shall willingly give way. Indeed, having heard his riposte, I would give way as long it was allowed.

I have tried to find out what cancellations of systems there have been, but it was tricky. The hon. Gentleman’s boss tried to find that out and he was apparently told that information about the cancellation of systems could be provided only at disproportionate cost. One wonders how many failures have gone unpublicised. Along with my A to Z, I have looked at the Public Accounts Committee’s reports. Projects cancelled between 2002-04—thus ordered by the previous Government—included TRIGAT, the third-generation anti-tank missile; the multi-role armoured vehicle; the area defence weapon; and the counter anti-radiation missile suite.

In 1989, the then Minister was asked a parliamentary question about projects cancelled between 1984 and 1989. The list is short but telling and does the previous Government no credit. I can read out the list of projects cancelled under the Conservatives if hon. Members wish me to do so.

Mr. Arbuthnot: We are all enjoying the right hon. Gentleman’s speech enormously. His performance on the Defence Committee is remembered with great reverence, affection and respect. Will he give some thought to the point we made in our most recent report on procurement to the effect that money is always short, and one therefore needs to decide whether salami-slicing or cancelling an entire programme is better? Salami-slicing can destroy the benefit of many programmes for the future.

Mr. George: I was about to deliver a eulogy on the Defence Committee, not only under my chairmanship but under that of the right hon. Gentleman. Its reports—including on defence equipment 2008 and on defence industrial strategy—are excellent and quite remarkable.

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