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Mr. Richard Benyon (Newbury) (Con): Previous generations have warned the House about perceived threats, and have been shouted down, not least Winston Churchill in 1930s, when he was in the House and
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talked about the need to rearm. On the perceived threat of cyber-attack, which has manifested itself in countries such as Estonia—and we have recently heard how China has indulged in cyber-technology that could be used to attack countries in the west such as the UK—what assurances can the Minister give the House that he understands that threat and has built it into his procurement policies?

Mr. Ainsworth: I think that that is the thrust of what I have said. It is enormously difficult, and it would be challenging for any Government—it is challenging to the USA, and it has always been challenging—to get the balance right. We have to face up to the situation and provide our troops with the equipment that they need now for the conflicts in which they are involved, which cost lives in real theatres of war, yet we must try, too, to look at the spectrum of potential threats, including cyber-attack, to ensure that we are best placed in an uncertain world. The question of how we get that balance right is fundamental to the issues that we face. If in the near future we wind up in an environment in which the threat increases because of the global pressures that may flow from the current economic climate, those difficulties will become even more acute.

That is not to say that we can bend our procurement programmes entirely towards the perceived threats of tomorrow, and not give priority to those threats that we face and that threaten our people today. Surely, they must come first. We have an enormously difficult thing to do, and everyone who talks about defence today talks about that issue and getting the balance right.

Mr. Ellwood rose—

Mr. Ainsworth: I shall give way to the hon. Gentleman again.

Mr. Ellwood: I shall try to contain my comments this time, Mr. Deputy Speaker, and I am grateful to the Minister for his generosity in allowing Members to intervene. May I ask him about the future strategic tanker aircraft and the contract for, I understand, 27 years, which has been signed? That is a hugely elongated period, agreed in one single contract for that operation.

Mr. Ainsworth: The future tanker will provide us with capability and availability over the long term.

Mr. Ellwood: Twenty-seven years?

Mr. Ainsworth: I do not know whether the hon. Gentleman seriously believes that we will not at any point over the next generation have any need for strategic air capability of the kind that will be delivered by the future strategic tanker. I do not think that the period of 27 years is a problem at all. That will give us stability, a very capable aircraft and a contract that will keep it in the air and available to the RAF and the rest of our armed forces consistently over that period.

Mr. Roger Gale (North Thanet) (Con): The Minister has commented twice on the carriers, but has made little other reference to the Royal Navy. The carriers are delayed, but they are on stream. Can he give the House an assurance that there will be enough Daring class destroyers and other surface ships and submarines to protect our capital assets?

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Mr. Ainsworth: The carriers will be used for a variety of tasks, any one of which will have to be properly configured, taking into account not only the requirement and what is needed in terms of force projection, but the threat. We have on order six Type 45 destroyers. They are phenomenally capable ships. I do not know whether the hon. Gentleman has had the opportunity yet to go on board Daring and to experience the radar suite and the missile system that will go with it. We have Astute, and the current Type 23 and Type 22 frigates, which will continue to provide further anti-submarine capability until the future surface combatant comes on stream. We have not taken a decision at this stage about numbers for the future surface combatant, but that will be needed to provide the carrier task force capability, as well as the other functions that those ships will have to undertake.

Linda Gilroy: Can my right hon. Friend tell the House when we shall have an announcement about the maritime change programme? When will he get his finger out and give us the clarity that we need in Devonport so that we can show people that we are at the centre of the way ahead, and answer the point that has just been raised?

Mr. Ainsworth: As my hon. Friend knows, I have been reading the local press. No matter what we say, the speculation continues as to the future of Devonport. We have said that we need Devonport as a naval base, and that that will not be solely for submarine work. No matter how many times we say that, it does not stop the BBC locally saying that our plans are otherwise. We have said that we intend Devonport to become a centre of excellence for depth maintenance, not only for submarines, but for fleet work.

I am sorry that, as my hon. Friend knows, I am not able to compromise our negotiating position while we are trying to reach a commercial agreement with Babcock—a long-term terms of business agreement. I would like to be able to give detailed comfort to the people of Devonport, but I cannot compromise our commercial situation with regard to those negotiations with Babcock. It seems not to matter how many times we say that in strategic terms, Devonport is needed, and we know that we need the continuation of the vital skill base that exists down there. The local media will continue to cause difficulties for my hon. Friend and for us until we can thrash out the detail of that commercial contract so that she and her constituents can see exactly where we stand. We will try to do that as soon as we can. We are not able to do so at present, and I know that that causes discomfort.

Mr. Philip Hollobone (Kettering) (Con): Does it not demonstrate a failure of Her Majesty’s Government’s procurement policy that the new Type 45 destroyers should take to sea without their new anti-aircraft missile system when they begin operational deployment later this year? Why has that system been delayed so much, meaning that the new Type 45 destroyers are more vulnerable than they otherwise might be?

Mr. Ainsworth: The hon. Gentleman should not take everything too far. The missile system is being tested and, before HMS Daring goes on operations, it will have not only its current phenomenal radar capability but the missile system to go with it. The ship does not
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have the system now, but it is not on operations. By the time the missile system is needed operationally, it will be available to the Type 45 destroyer.

Mr. Brian Jenkins (Tamworth) (Lab): My right hon. Friend referred to the fact that our armed forces are small, but an even smaller number of contractors supply them. Soon, there may be only one contractor to supply us with certain equipment and we are going into partnerships, so how can my right hon. Friend guarantee that, in the consultation and negotiations, we get value for money?

Mr. Ainsworth: I was just coming to the defence industrial strategy, so perhaps I can answer my hon. Friend by continuing with my speech and bringing out the issue that he raises.

I was talking about what US Defence Secretary Gates said about the perennial procurement problem, and I could not agree with him more. We have a duty to the taxpayer and to our armed forces to ensure that we procure as efficiently and as cost-effectively as possible—particularly in the current financial climate. The defence industrial strategy still forms the basis of those endeavours, its principles remain at the heart of how we do procurement, and we are working with industry to deliver it. We also need to ensure that we draw on every source that we can to find ways to improve. For example, there are many lessons to be learned from the urgent operational requirement experience: requirements driven by the needs of users on the front line rather than by the allure of technology; industry involved at the start of the process; and a premium placed on speed rather than on perfection. That is why the Secretary of State commissioned Bernard Gray to conduct a review of our processes for delivering major equipment programmes, and it will conclude later this year.

I say to my hon. Friend the Member for Tamworth (Mr. Jenkins) that a straightforward commercial contract on any given piece of equipment is not necessarily the way to secure value for money in defence procurement, because we—the Government and the taxpayer—wind up paying for the downtime of the facilities that the private sector provides. Partnership, whereby together we drive down costs and increase the availability of kit and equipment, is the way forward, and for that we need transparency. We need to see what the contractor is doing over time, and how is he doing it, if we are to ensure that the taxpayer makes the same gains as the contractor on the equipment that he provides.

Angus Robertson (Moray) (SNP): The Minister has been extraordinarily generous in allowing Members to ask questions. While he is on the subject, will he indicate how important he feels offset arrangements still are? Do they still operate in relation to literally hundreds of companies in the UK? They are worth hundreds of millions of pounds, if not billions.

Mr. Ainsworth: I do not fully understand the hon. Gentleman’s question. I do not know whether the Under-Secretary of State for Defence, my hon. Friend the Member for Grantham and Stamford (Mr. Davies), will be able to pick it up, or whether the hon. Gentleman will allude to it further before my hon. Friend winds up the debate.

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We will never be able to predict the future accurately. Instead, we can only train, equip and support our armed forces so that they are as prepared as they can be to face the unknown. We have seen improvements in that area over the past few years, but we can and must do better. We owe it to our armed forces and to the British taxpayer to ensure that we do.

5.15 pm

Mr. Gerald Howarth (Aldershot) (Con): Predictably, the Minister painted a rosy picture of the state of Britain’s defence equipment programme—not least in his opening remarks, when he referred to the fantastic increase in funding delivered by the Government. Perhaps I should remind him that that has been necessary because his Government have chosen to engage in five wars since taking office in 1997; those wars should have been better funded than they have been. Furthermore, I remind him that he was a Member of the House when his party attacked the Conservatives when we were in government and wrestling with the aftermath of the end of the cold war. At that time, the Labour party was asking for even more defence cuts than were being delivered by the Conservative party.

The Parliamentary Under-Secretary of State for Defence (Mr. Quentin Davies) rose—

Mr. Howarth: Oh, I see that the turncoat wishes to intervene. I give way to the turncoat.

Mr. Deputy Speaker: Order. We can conduct this debate without that sort of expression. I ask the hon. Gentleman to have second thoughts and withdraw that remark.

Mr. Howarth: It was friendly banter, Mr. Deputy Speaker, and in the spirit of friendly banter I withdraw any offence that might have been attached to my remark.

Mr. Deputy Speaker: I am sure that none has been taken, but I am grateful to the hon. Gentleman for withdrawing.

Mr. Davies: There was no offence, Mr. Deputy Speaker, but I am happy nevertheless to accept the hon. Gentleman’s withdrawal.

The hon. Gentleman was simply confused in his comments about defence spending. My right hon. Friend the Minister for the Armed Forces was talking about the core defence budget, which is rising at 1.5 per cent. in real terms, beyond inflation, in contrast to the disgraceful record of the last Conservative Administration. [Interruption.] No. That has nothing to do with the funding of the wars, conflicts and campaigns, which comes out of the reserve and is in addition to the core defence programme. The hon. Member for Aldershot (Mr. Howarth) should at least understand that distinction.

Mr. Howarth: That was absolutely magnificent and wonderful. The hon. Gentleman never made such accusations about his own side when he was sitting on the Conservative Benches. Indeed, I recall his many Rottweiler-style attacks on the Labour party at the time. He is obviously happier at home with the Labour
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party now, although he is looking rather discomfited. I hope that he has a good visit to my constituency of Aldershot tomorrow.

Mr. Davies: The hon. Gentleman is absolutely wrong about my record during the last Conservative Administration. I did criticise that Administration from the Back Benches for spending too little on defence.

Mr. Simon Burns (West Chelmsford) (Con): Rubbish!

Mr. Davies: The hon. Gentleman will have to withdraw that.

Mr. Deputy Speaker: Order. The House should calm down a little; we should turn to discussing the current procurement position.

Mr. Howarth: I am glad that you brought us back to the subject of the debate, Mr. Deputy Speaker; it was the right thing to do.

Ann Winterton (Congleton) (Con): Perhaps a simple housewife can pose a question or make a remark with which, I hope, my hon. Friend will agree. In the House we talk so often about how much money is being spent, but never about whether it is being spent wisely and how much waste there is. A case can be made against the current Government in respect of that latter point.

Mr. Howarth: Indeed. I am grateful to my hon. Friend for her valuable intervention and I hope to amplify her remarks.

I will acknowledge that there is some good news around—it is important that we produce a degree of objectivity in these debates. I will make a number of critical remarks about the Government and end with some positive proposals, but I say at the outset that the order for 700 armoured vehicles is right and essential. The Minister made some important points about how the threat is constantly evolving and the need for us to be very agile in our response to these changing threats. I welcome that. I also welcome the decision to proceed with the Trident replacement.

Set against those bits of good news, however, the overall position is absolutely desperate—so desperate that the chairman of the Defence Industries Council, Mike Turner, said in his evidence session before the Defence Committee:

He is a senior figure in the defence industry, well known to the Government, and his words sit gravely at odds with what the Minister has said. The fact is, as the Minister knows, that the Ministry of Defence is in a state of chaos. The Royal Air Force and the Army are each short of about 2,500 people, equipment in theatre is being hammered at a rate never originally envisaged, and the Treasury is clamouring for more cuts even as the nation contemplates committing nearly 1,000 more hard-pressed servicemen and women to Afghanistan. So dire is the position that the Ministry of Defence has been forced to agree that some UOR—urgent operational requirements—costs, until recently met wholly from the Treasury’s contingency reserve fund, will in future have to be accounted for in the main MOD core budget, but not, as my hon. Friend the Member for North Wiltshire (Mr. Gray) pointed out, until after 2010.

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Mr. Bob Ainsworth: The hon. Gentleman is saying what he has said repeatedly in television studios and from the Front Bench, but he is not entitled to cite the defence forum rather than his own Front Benchers and his own party political position. His party’s position, surely, is that the Conservatives cannot guarantee the same level of spending in any areas other than development and health—not defence. It is no good his quoting outsiders—why does he not quote his own Front Benchers, who will not even guarantee the levels of spending that currently apply to this country’s defence budget?

Mr. Howarth: I have to tell the Minister that he is in government: he and his colleagues are responsible for the state of affairs in the running of this country, and the Conservative party will not be held accountable for the carnage that they are going to leave behind for us to pick up and put right in 2010. I can tell him about our own financial proposals. We have made it absolutely clear that if we had a Conservative Chancellor proposing the Budget on Wednesday, any cuts in public expenditure this year would exclude defence as an area for cuts. [ Interruption. ] Well, that is the case for this year. Unfortunately, as each month unfolds the state of the British economy is exposed as being worse and worse and the former Chancellor of the Exchequer, now the Prime Minister, who is responsible for this catastrophe, continues to preside over a failing Government. Bring on the general election, and then we will tell the Minister exactly what we propose to do. [ Interruption. ] I have told him how we would deal with it right here and now. He cannot absolve his Government of responsibility for the shambles to which they have reduced this country.

Linda Gilroy: If this has just become a problem for the Conservatives in the light of the very challenging economic circumstances that we face, why did the hon. Gentleman’s colleague, the shadow Defence Secretary, say to the Financial Times on 17 June 2008:

Mr. Howarth: Of course that is the position. We do not know what the numbers are—we have not had access to the books. I am telling the hon. Lady and the House what my hon. Friend the shadow Chancellor is proposing as we speak.

I think that you will require us to move on, Mr. Deputy Speaker, because there is much ground to cover. The Minister covered a lot, and I want to do the same. Sticking to financial matters, in another twist of creative accounting the Government have embarked on an expensive programme of private finance initiative projects. My hon. Friend the Member for Bournemouth, East (Mr. Ellwood) referred to the largest, the future strategic tanker aircraft programme to meet our requirement for transport and air-to-air refuelling, which will cost some £13 billion over 27 years. The defence training review will apparently cost some £10 billion over a similar period, and other PFI projects for flying training and helicopter search and rescue will cost about £10 billion. Those will be contractual commitments, reducing the proportion of the defence budget available for ministerial discretionary spending. Not content with screwing up their own budget, this Government want to saddle the next Conservative Government with Labour’s debts. There is a fundamental flaw in the Government’s approach.

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