Defence Equipment 2009 - Defence Committee Contents

Examination of Witnesses (Questions 400-419)


16 DECEMBER 2008

  Q400  Chairman: So you flew the existing helicopters harder.

  Mr Davies: We are bringing them into service—no, not at all, we have introduced a lot of new helicopters. Another thing which has not come out so far—I am slightly proud of it because it is something which I took initiative on in my first week or two in my present role—is that we are re-engining some of the existing Lynxes so as to make sure they are available in Afghanistan on a 24-hour, 365-day basis, which they have not been up to now. That is very important and that is going to come through as an urgent operational requirement to be delivered in the course of next year. There is a whole range of areas where we are increasing genuine helicopter capability. The stories are very upwards and onwards ones, the story is getting rid of old-fashioned helicopters—quite rightly—obsolete helicopters, helicopters that are much less performing and replacing them with the latest helicopters and helicopters with the specification that we require to do the job.

  Q401  Mr Jenkin: Helicopters are also essential for protected battlefield mobility.

  Mr Davies: Yes.

  Q402  Mr Jenkin: Commanders in both Iraq and Afghanistan have consistently complained they are not able to get enough helicopter hours, not for hitting things, just simply for flying people around. By 2020 we will have a total of 14 Chinook helicopters in the entire British Armed Forces. How will that possibly be enough unless we are going to cease to envisage conducting military operations on the scale at which we currently conduct them.

  Mr Davies: Mr Jenkin, I do not recognise your figures but we are introducing an additional eight Chinook helicopters which have been specifically refurbished to provide for the lift role for which we want them, the battlefield tactical lift role which you just identified correctly as being so important. We have just bought six Merlins from Denmark and we will be deploying those in the most useful fashion possible as soon as we possibly can. We are bringing in a lot of highly capable helicopters, we are investing in helicopters the whole time and I have just given you the figures.

  Q403  Mr Jenkin: How many helicopters are you planning that we have by 2020?

  Mr Davies: I do not know that we have an actual figure for that but if we do I dare say my colleagues will help me with it. Have you any idea what the figure will be?

  Lieutenant General Figgures: You mentioned Mr Jenkin Chinook and you mentioned 14.

  Q404  Mr Jenkin: 14 by 2020.

  Lieutenant General Figgures: I think we shall have 48 by 2020.

  Q405  Mr Jenkin: That does mean considerable life extensions beyond the out of service dates that you currently announced.

  Lieutenant General Figgures: Indeed.

  Q406  Mr Jenkin: So we are going to be flying older and older airframes because we will not order any new helicopters.

  Lieutenant General Figgures: Chinook is a robust airframe and we have plans to upgrade the cockpits, we have plans to have a universal fleet so we have 48 of a similar standard, we have plans to up-engine it and of course to keep its defensive aid suites, communications, weapon fit and so on to match the threat. Chinook actually is a very good example of the through life capability approach which we have taken to get the most out of the fleets we own.

  Q407  Mr Jenkin: I have put down questions to ask for straight answers on this and it is only by piecing together a jigsaw that I am able to put together any figures at all. Could I ask the Minister in future, if I put down a question, to maybe provide the Committee with the information that you have there and maybe we would have a more intelligent discussion about what these capabilities are.

  Mr Davies: Mr Jenkin, I appreciate your questions and we do try to give the correct answers. I am quite confident that I have never given you an answer, never given you an answer—let me say this twice now—

  Q408  Mr Jenkin: You the Government.

  Mr Davies: -- which suggests that we will only have 14 Chinooks in 2020. I do not know where that came from; it cannot possibly have come from any answer which I gave because I can assure you that if somebody presented me with a draft answer of that kind there would be an immediate inquiry in the MoD as to how we could possibly be proposing to do any such thing. I do not know where that figure came from but it certainly did not come from us, it certainly did not from me in a Parliamentary answer.

  Q409  Mr Jenkin: I think you will find that in order to get more than 14 helicopters you will need to adjust some out of service dates that you have already published. The General is nodding.

  Mr Davies: You are making all kinds of assumptions.

  Q410  Mr Jenkin: I am making assumptions on the basis of answers the Government has given me.

  Mr Davies: You are making assumptions that we do not either refurbish or upgrade or buy a single new helicopter between now and 2020. I have no idea why you think such an assumption is correct.

  Q411  Mr Jenkin: What is the lead time on buying new Chinook helicopters?

  Mr Davies: Mr Jenkin, I repeat, I appreciate your questions and I repeat there is always a well-informed interest in our proceedings and it is extremely valuable for us to have people who take a close interest in things like that. There is, however, clearly a mistake involved in the assumption of 14 and I think you have had that confirmation now from General Figgures. General Figgures has been able to give you a very different figure—the difference between 14 and 48 I am sure you will agree is a material difference.

  Chairman: Moving on, Linda Gilroy.

  Q412  Linda Gilroy: Minister, following the Pre-Budget Statement the Chief Executive of the SBAC said "It is a disappointment that the Chancellor has neglected to include an injection of much-needed funds for the UK defence industry. This oversight is disappointing given the contribution that this industry will make to the UK's economic recovery, a contribution that could be even greater still if the Government had included it in the stimulus package." How disappointed were you that there was no injection of funds for the UK defence industry in the Pre-Budget Statement?

  Mr Davies: First of all, Mrs Gilroy, I have to say that I think the Government very adequately indeed is funding defence, and the effort we have made has been most impressive, not only the core defence programme which is increasing the whole time as I have already said—the defence budget as a whole is increasing by 1.5%, equipment and support are doing extremely well in that context, but also there is the UORs and, as you know, we are expecting to have UORs of £635 million in the course of the coming financial year and that is in addition to the very substantial amounts of money we have provided for the latest batch of protected vehicles, for 700 new PPVs for Afghanistan, which was announced last month. That is a record we can all be very proud of. What I think you are questioning is about the fiscal stimulus package. Let me go into that a little bit because there may be some misunderstandings here. It goes without saying, Mrs Gilroy, that like every defence procurement minister in the world I imagine I am not in the business of turning down new money; if it comes to me I am very happy to put it to very, very good use.

  Q413  Linda Gilroy: Did you actually make the case for more?

  Mr Davies: Let me explain to you about that. If you want to go in for a fiscal stimulation package, which of course the Government is—and I think you and I agree—doing entirely the right thing about, then we really need to achieve three criteria. First of all you need to have spending which feeds through very rapidly into consumption—in other words you cannot use Crossrail, for example, because by the time you have all the planning inquiries—

  Q414  Chairman: Minister, I wonder if you could do your utmost to answer Linda Gilroy's question, did you make the case for more defence spending, rather than talk about Crossrail?

  Mr Davies: I have to say that you need to achieve three things, Mr Arbuthnot. One is you need to bring forward this money rapidly into consumption, and defence is not necessarily ideal for that purpose because the lead times in defence are quite long between you signing a contract—because we are very often at the frontiers of technology—and when the money actually flows through in the pay packets of the people who are being employed by contrast to other sectors of economic activity. That is the first thing that really needs to be said.

  Q415  Chairman: It sounds as if we are building up to a no.

  Mr Davies: Perhaps I could be allowed to just answer the question.

  Q416  Chairman: That would be good.

  Mr Davies: The second thing is that ideally to use your money for maximum impact you need to spend it on goods and services which are labour-intensive rather than capital-intensive in their manufacture so that the benefits flow through into pay packets rather than into rewards for providers of capital—banks and shareholders and so forth who would inevitably have a very high propensity to save and a low propensity to consume. Ideally you need those wages to flow through to people who are relatively low-paid. That is not the case with defence; defence is capital-intensive rather than labour-intensive.

  Q417  Chairman: Minister, can I suggest you please do your utmost to answer the question and to say then "I will explain why that is" if you like. In this case, when Linda Gilroy asks you "Did you make the case?" you can say, "No, and I will say why it would have been a bad case to make" or "No, and I wish I had", or some other answer but do please try to answer the questions that we put rather than explaining everything all around the houses before you actually answer the question.

  Mr Davies: Mr Arbuthnot, I am trying to enable the Committee to understand why actually defence is not an obviously efficient target for counter-cyclical fiscal stimulation, which is the question I was asked by Mrs Gilroy. The third factor is leakage into imports. There is quite a high leakage into imports in defence, inevitably, and that is not the case, for example, if you are repainting schools or putting new roofs on schools.

  Chairman: I think you have answered that question. Linda Gilroy.

  Q418  Linda Gilroy: Can I just take that up, based on the region that I represent part of, where we have one of the biggest aerospace industries possibly in the whole of Europe in terms of defence employment, estimated to be about 40,000 with 100,000 indirectly dependent and a very long supply chain reaching right down into Cornwall from the more obvious places where the aerospace industry is sited in the region with a presence from all four primes. Are you saying to me that before the Pre-Budget Statement—and people are still trying to work this out—there is sufficient in the way that you have reconfigured the defence budget to enable that supply chain to be maintained?

  Mr Davies: Yes, I believe there is.

  Q419  Linda Gilroy: That is a very straight answer and a short answer. Can I move on to research spending then because that puts the other angle on it. I am sure you will have read the exchange that I had with the Permanent Under-Secretary on the fears about the cuts in the defence research spending and the way in which that can impact on the long term capability and keeping ahead in that capability. Has defence research spending been cut; if so by how much and in what specific areas?

  Mr Davies: We have not made an announcement about that in the equipment examination. The matter is under review. I would say, Mrs Gilroy, that we obviously do not spend money carelessly, we spend money on research spending because we are very conscious of the benefit we can get from that particular research programme and, like everything else, we have to look at it from the point of view of priorities, so I am not in a position to give you any assurances about that particular matter.

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