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Q10. [307397] Mr. Adrian Bailey (West Bromwich, West) (Lab/Co-op): I frequently receive representations from small businesses in my constituency about the costs of Government regulation. Does my right hon. and learned Friend agree that, in these difficult times, it is
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essential for the Government to reduce the burden of regulation, and can she tell me what the Government are doing about it?

Ms Harman: We are ensuring that the Government help business, both big and small. One of the things that we have done is help businesses to defer their tax under the time-to-pay scheme. I think that the most important announcement for small business over the past few weeks was the Chancellor's announcement in the pre-Budget report that that scheme would continue. We want to do all that we can to help small businesses. One of the things that we will not be doing is abolishing the regional development agencies, which are so important to helping small businesses but which the Tories would abolish.

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Nimrod Review

12.32 pm

The Secretary of State for Defence (Mr. Bob Ainsworth): Seven weeks ago, I addressed the House about Mr. Charles Haddon-Cave's report on the events leading to the loss of 14 service personnel aboard Nimrod XV230 on 2 September 2006. As I said then, it was a tough read. It spelt out in detail the many failings both in the MOD and in industry that led to the tragedy. I wish again to express my sorrow for what happened that day, and to reiterate my sincere apologies to the families of those who died. I know that nothing I can say will bring those 14 men back. What we must do now is learn all the lessons, and take all the actions that are necessary to implement them.

Mr. Haddon-Cave's investigations were wide-ranging. His report was thorough and detailed. I want to thank him again for his efforts, and for helping us to identify the changes that we need to make. Today I shall explain to the House how we are implementing his recommendations. Some of them are complex, and I am therefore placing in the Library of the House a more detailed written response to the 84 recommendations.

This afternoon I want to focus on three areas: the creation of a military aviation authority, the changes that we are making to the management of airworthiness, and our relationship with industry.

The Nimrod XV230 was lost as a result of a number of failings in the MOD and industry over a period of some three decades. Opportunities to discover and avoid the dangers, particularly during the development of the safety case, were missed. That was due in part to specific errors, but it was also due to the fact that the MOD's aviation safety processes had become too cumbersome and complex, and lacked transparency and accountability. Despite the efforts of many hard-working men and women in the MOD and the private sector to deliver safe aircraft, the result was simply not good enough.

The report recognised-and indeed welcomed-the many improvements we had made since the loss of the XV230, but it also made it clear that we needed to go much further. I agree, and I am today announcing the most radical reform of the MOD's airworthiness procedures since military aviation began.

First, we are creating a new independent military aviation authority that will regulate, audit and assure all military aviation activity. It will be led by a senior-three-star-military officer, supported by a staff of about 250 personnel. He will provide the leadership on airworthiness, and also the independent assurance that we and our industry partners are all operating to the highest safety standards. He will have been identified and appointed by February, and the new authority will begin its work from April next year. The MAA will be independent of those who fly and maintain our aircraft day to day, ensuring that they operate fully within the regulations and are properly equipped, trained and resourced to deliver safe aircraft to the services.

In proposing this new organisation for the management of airworthiness, Mr. Haddon-Cave wanted to ensure that there would be responsiveness in the face of changing operational circumstances, and that a safe approach would be adopted at all times. I agree, but in order to make his recommendations effective in the military
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environment, some adjustments are necessary. The single service assistant chiefs of staff must retain responsibility for determining that our aircraft can be safely released into service. The MAA will provide full assurance, but it will not carry out this release-to-service role directly. For operational emergency clearances, I have decided to opt for a tighter regime than Mr. Haddon-Cave proposed, under which the assistant chiefs-not those who fly the aircraft at the front line-will be responsible for any clearances. The MAA will play an assurance role in this area, too. This refinement of the Haddon-Cave model will deliver his intention while retaining operational agility, and improve on both our current and his proposed governance arrangements.

Mr. Haddon-Cave also recommended a new approach to aviation safety cases. He was critical of our current approach, saying that it was bureaucratic and, frankly, missed the point. I agree. We need to make it simpler and more relevant. The MAA will rewrite our instructions to include the improvements that the report recommends. I have instructed that we examine how to apply this best practice appropriately across the whole of defence. We are also auditing the standard of our current aviation safety cases to check that they are fit for purpose. Most of this work has been completed, and it will be finalised in the next couple of weeks.

I now turn to the criticisms of our relationships with industry. The Department has been working with BAE Systems and QinetiQ to address their failings identified in the report. BAE Systems has announced the appointment of Dr. Chris Elliott to provide independent support to the group managing director in undertaking a review of the company's approach to product safety. QinetiQ has appointed Sir Robert Nelson QC to oversee the company's formal investigation, which will include a review of processes, structure and reporting. All their findings will be shared with us.

Partnership with industry has always been part of ensuring that our troops are provided with the best possible equipment and support. We recognise that partnership does not mean that we can just transfer work to industry; we still have a role to play. That is why we are improving the skills of our people to ensure that we manage industry's activities on our behalf more effectively. A review of the contract conditions that we put in place with industry is also being conducted. We will institute improved checks and audits by the MAA on industry compliance. However, I acknowledge that we need to do more, so I have asked my noble Friend the Minister of State, Lord Drayson, as part of the work that he is doing on defence acquisition reform, to establish a much clearer understanding of the different roles and interests of industry and of the MOD, and to be sure that industry's efforts meet our needs.

In the course of his report, Mr. Haddon-Cave also criticised the personal conduct of a small number of civilians and service people who held positions in the MOD and in industry in the period leading up to 2006. A number of those individuals work for BAE Systems or for QinetiQ, both of which are conducting their own investigations, and a number of others are now retired. Neither of the two serving RAF officers who were named currently holds a position related in any way to safety. An RAF police investigation is being conducted into the issues raised by Mr. Haddon-Cave. I hope that
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hon. Members will understand that I am unable to comment further on these matters at present. There is an expectation that in some such situations, investigations are accompanied by blameless suspensions of the individuals under investigation. We will re-examine this area to develop a common practice for all MOD personnel-military and civilian.

Mr. Haddon-Cave's analysis and conclusions on safety management in aviation have wider relevance, and we are looking to see what changes we may need to make across other domains in defence. He made a number of broader observations on areas that were not the main focus of his report. Mr. Haddon-Cave did not take evidence on the Department's approach to change management. However, I will ensure that his observations on these important issues are reflected in our planned work on the organisation and culture of the MOD, as part of the preparations for the future defence review.

Every effort is being made by the Department to ensure that our armed forces are the best trained and the best equipped, but we must recognise that the work of defence is inherently dangerous. We ask our armed forces to place themselves in harm's way, and that entails risk. At the same time, any organisation that wants to learn and improve must change and develop; our armed forces cannot stand still in the face of developing threats and the need to work in hostile environments. It is also vital that we do everything possible to use public money effectively and efficiently. However, I am clear that change and development and the management of risk cannot be incompatible with a clear commitment and approach to safety.

My hon. Friend the Minister for the Armed Forces and I have been clear throughout that the Ministry of Defence will be open and honest about our shortcomings, and we will respond vigorously and face the challenge to improve performance. I regret enormously the deaths of those on the XV230, and apologise for the part the Department played in failing to prevent them. The measures that I have announced today reflect a personal commitment to improving safety in military aviation and the safety of our armed forces.

Dr. Liam Fox (Woodspring) (Con): I am grateful to the Secretary of State for his statement and for prior sight of it, as well as for details of the recommendations that the Government intend to implement and those that they intend not to accept.

Charles Haddon-Cave's report was, for many of us, the most damning thing that we had ever seen in our time in Parliament. His criticism of the Nimrod safety case was excoriating. Let me remind the House that he said that it

It is a report that I think we will all remember, however long we serve in this House. The bottom line is that 14 men died in a tragedy that was wholly avoidable. There were previous warnings and previous incidents, but appropriate action was not taken, and two major companies with international reputations, as well as the MOD, are involved.

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I do not think that anybody in this House wants a witch hunt. No one is seeking scapegoats for the sake of having scapegoats, but as well as ensuring that, as the Secretary of State said, no repetition occurs, we also need to know who takes responsibility for what happened-responsibility as regards the families who have lost loved ones, and the armed forces. As we have often said in this House, we have two duties to our armed forces-to ensure that we do everything we can both to provide them with the maximum chance of success in their mission, and to minimise their risk in carrying out that mission. We have to ensure that they have confidence in the high-tech equipment on which they increasingly rely.

I welcome the measures set out in the Secretary of State's statement and in the Government's wider detailed response, including the setting up of the military aviation authority. However, given the complexity of the issue, I am sure that the Secretary of State will understand that we will want to look at this in greater detail, and in particular at the recommendations that the Government do not want to implement. It is worth praising MOD staff for having acted expeditiously in going through the report and ensuring that these items can be implemented as soon as possible.

I have some specific questions, but before I come to them let me say that overall, responsibility for technical issues needs to lie with technical experts. I have to say-as I did seven weeks ago-that I still have worries about the quality of advice being passed up the chain. Is the Secretary of State satisfied that sufficient and independent assessment of technical advice is being given to Ministers? There is no point in making Ministers responsible if they are not safeguarded in the quality of the advice that they receive.

The MOD pays to be an intelligent customer, so how does the Secretary of State specifically assess the role of QinetiQ in making the MOD an intelligent customer in this case? Why the delay in the QinetiQ and BAE responses? They knew that the report was coming, they had ample time to make their case and it is simply not good enough. We in this House and the families deserve a full and proper explanation, and delays and excuses about who has retired simply will not wash.

Let me turn to the specific issues. Will the Secretary of State first tell us how much the setting up and running costs of the MAA will be, and which budgets they will come from? Will he explain in a little more detail than he did in his statement why the new MAA will not have release-to-service responsibility? Is it, as I think he implied, because it is not just about the safety of the aircraft but about the fact that the environment in which they will have to operate will be taken into account, as will the specific circumstances at the time? If that is so, how do we avoid the risk of cutting corners and finding ourselves with the potential of another tragic event? In a culture-whether we like it or not-of increasing legal liability, it is a worry to all of us in this House as well as to our armed forces that we seem now to be compounding warfare with lawfare.

I have three other specific questions that I would like to put to the Secretary of State. Does he accept, and does the MOD accept, that it was a mistake to abolish the post of chief engineer of the RAF? To amplify what he has said already, can he give a categorical assurance,
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given that the airworthiness regime is consistent across the air domain, that all air assets in all three service are "safe to fly"? Can he guarantee that the imperative of speed in introducing urgent operational requirements to platforms for theatre has in no way degraded the airworthiness case of the aircraft being deployed?

I turn briefly to the question of compensation. No sum of money can compensate for the loss of a loved one. None the less, compensation is at least in part an act of atonement that recognises responsibility for failure. Does the Secretary of State agree that any level of compensation set has to reflect that concept adequately? Will he ensure that the process of compensation occurs expeditiously and accurately? At the same time, will he also ensure that the same applies to pension arrangements, because, as he will be aware, some of the families have concerns about the accuracy of the system?

I shall end as I started, by speaking about the avoidable deaths of 14 of our service personnel. Their families will bear their loss for ever, and this is a very difficult time of year for them. I am sure that the whole House will want to join me in wishing the families, to the best extent that circumstances will allow, a happy and peaceful Christmas.

Mr. Ainsworth: I thank the hon. Gentleman for many of the comments that he has made, a large number of which I totally and absolutely agree with. Equally, I want to thank him, on behalf of the staff of the MOD, for the kind comments that he has made about how they have responded to the report. I think that their response has been exemplary.

The hon. Gentleman asked about speed, but in these circumstances it is important to balance speed of reaction with thoroughness and not making mistakes. That is something that we have to think about, but I hope that we have got the balance right by establishing the MAA and looking at these complex issues to try to get a new system in place. I know that the families want us to move as quickly as possible to learn the lessons of what led to the loss of their loved ones, but equally they want us to learn those lessons genuinely and thoroughly.

The hon. Gentleman asked me about the advice that I get within the Department. I have been in the MOD for two and half years now, and I find it to be packed with talented and dedicated people who are prepared to look, learn and challenge the perceived wisdom all the time. I try to encourage that attitude and atmosphere, so that people are not stifled in what they say and do, and so that we get as broad an internal view on these issues as we can.

From time to time, however, we need to use outside expertise to enable us to see through our own failings, or, as the hon. Gentleman mentioned, the failings of others. That is when we bring in someone like Mr. Haddon-Cave to help us. I think that he has done a thorough job, and that he has identified lessons that badly need to be learned.

I cannot talk in detail about the exact reaction of QinetiQ and BAE Systems. I spoke to Mr. Haddon-Cave again only yesterday, and I think that both companies are now moving in the right direction. I cannot say whether they were as shocked as we were by the report's findings in the initial days, and I do not want to dwell on that. I think that we need to look forward.

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The hon. Member for Woodspring (Dr. Fox) also asked about compensation. My hon. Friend the Minister for the Armed Forces has met the families repeatedly, so he gets the criticisms and pressures directly, as did I when I used to hold that job. I hope-indeed, I am repeatedly assured-that we are not the cause of any delay in settling compensation claims. That is what I am told, but my hon. Friend is sitting front and centre on this, trying to make absolutely certain that we are not the cause of delay. In no way do we want to aggravate in any way the sorrow and the loss suffered by the families. We need to be seen to be getting on with this job. If blame has to be apportioned between us and the companies involved, that is something that we can sort out. It should not affect our ability to get on and make offers to the families.

We are driving the matter forward as fast as possible. We have made an offer of interim payments, but I am afraid that the legal representatives of some of the families have turned their faces against that. However, we will do everything we can to reach a settlement as soon as possible. We accepted responsibility a long time ago, and we do not demur from that in any way.

Nick Harvey (North Devon) (LD): The Defence Secretary called the Haddon-Cave report "a tough read", and it certainly was, describing as it did the tragic and avoidable deaths of 14 of our personnel. It was a damning indictment of procedures in the Ministry of Defence and in industrial partner companies, so I welcome the tone of the right hon. Gentleman's response, both seven weeks ago and again today.

At the centre of what the Defence Secretary announced today, I particularly welcome the formation of the new military aviation authority. He described the authority as independent, but it is obvious that the safety of particular aircraft will differ according to the theatres in which they operate. The right hon. Gentleman has refined the Haddon-Cave recommendations on precise release to service, but will he say whether the MAA will have personnel on the spot in theatre at all times? Will he guarantee that there will be enough of them, and at a senior enough level, to be able to retain their independence and not get swept up into the emergency of a particular situation?

Will the Secretary of State also assure us that the new arrangements will be more responsive and attentive to feedback from the crews of particular aircraft than has sometimes been the case in the past?

The report was scathing about the two companies involved. Industrial partners are important to us, and I welcome the steps that the Defence Secretary said that the two companies were taking, but will he tell the House whether they will step up to the plate and share with the Ministry of Defence both the responsibility and the liability that emerge from this tragic event?

Mr. Ainsworth: The hon. Gentleman is right to say that there was a glaring risk to this aircraft that went undiscovered by many experts over 30 years. Most particularly, however, it was not discovered during the safety case that was supposedly put together to identify exactly such risks, but which failed so to do.

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