Mr Stephen Dorrell (Charnwood) (Con): Those who want to make the case for change in an organisation—and, after the Francis review, who can doubt the need for

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change in parts of the national health service—must first demonstrate the need for change. Does this review not build on the distinguished record of both Bruce Keogh and Sir Brian Jarman in demonstrating the need for change in parts of our national health service?

Mr Hunt: My right hon. Friend speaks very wisely. As I know he agrees, identifying problems publicly is incredibly difficult, but the way to ensure that those problems are dealt with is to be totally honest and transparent about them in the knowledge that they will be sorted out as a result, and that is what is happening today.

Alan Johnson (Kingston upon Hull West and Hessle) (Lab): Thankfully, the quality of Sir Bruce Keogh’s report is vastly superior to that of the statement that we heard from the Secretary of State. Is it not the case that Sir Bruce Keogh—[Interruption.]

Mr Speaker: Order. I am very concerned about the fact that someone shouted something, and I think I heard a word that was unparliamentary. I did not see an individual who was responsible, and I do not know who was responsible, but I simply say to the House—[Interruption.] Order. It is no good people burbling on about whistleblowers from a sedentary position. Let us lower the temperature, and have orderly exchanges. [Interruption.] Order. I remind the House that I called the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson) to ask a question. Let us do him the courtesy of hearing the conclusion of that question.

Alan Johnson: Is it not the case that Sir Bruce may have given us a blueprint for better regulation, provided that the Secretary of State faces up to his responsibility and ends the tawdry and squalid attempts by his party to denigrate his predecessors?

Mr Hunt: I am sure that the right hon. Gentleman, who is one of those predecessors, would accept at a quieter moment outside the Chamber that one of the biggest mistakes made during his time as Secretary of State—or at least it was initiated then—was the appalling change that was made to the regulation of hospitals. The CQC was stripped of expert inspectors, and hospitals began to be inspected by generalists. The same group of people would inspect a slimming clinic, a dental practice, a GP’s surgery, and a major London teaching hospital. That very significant mistake lies at the heart of the reason why the CQC approved and certified so many failing hospitals.

I am happy to work with the right hon. Gentleman, and to say that honest mistakes were made and we will put them right, but today there must be honesty about what those mistakes were.

Mrs Cheryl Gillan (Chesham and Amersham) (Con): Patients and their families outside this place will join me in congratulating the Secretary of State on his brave decision not to sweep NHS failures under the carpet.

You and I know, Mr. Speaker, that Buckinghamshire contains many areas of health care that are of high quality, but the report identifies some failings, one of which is the quality of out-of-hours and weekend nursing

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and medical cover for acute medical patients. That is clearly linked to difficulties relating to the recruitment, retention and availability of competent clinicians and nurses. What more can the Department do to help our trusts improve out-of-hours provision and, in particular, the quality of temporary staff, so that those problems can be eliminated?

Mr Hunt: My right hon. Friend is right. Serious problems were identified in Buckinghamshire relating to out-of-hours care and also to dementia patients, who themselves often need help out of hours. I raised the difficult issue of the GP contract because, in order to solve such problems, we need more joined-up care in the community. The Chancellor has announced an additional £2.8 billion for joint commissioning arrangements between local authorities and health care bodies, and I think that the combination of those two measures will secure a vastly improved out-of-hours service for my right hon. Friend’s constituents.

Mr Jack Straw (Blackburn) (Lab): I welcome the Keogh report and the action that the Secretary of State has announced, which, although it will be uncomfortable for my local health trust, I believe to be necessary. However, I hope that, on reflection, the right hon. Gentleman will realise that the comments that he has made demean his office. I sat in the Cabinet with my right hon. Friends the Members for Leigh (Andy Burnham) and for Kingston upon Hull West and Hessle (Alan Johnson). I saw how anxious they were to root out inefficiency and failings, and to cover nothing up, and I think it inappropriate for the Secretary of State to suggest that he and his party have a monopoly when it comes to concern about the transparency and effectiveness of the health service.

Last Thursday, the Secretary of State commended Royal Blackburn hospital for its vascular services and accepted the excellence of many of its staff. While we are navigating through this difficult period, is it not crucially important for us to echo the Keogh report and point out that, overwhelmingly, hospitals in areas such as mine employ high-quality staff who require better leadership?

Mr Hunt: Improving leadership is vital throughout the NHS. All Governments must take responsibility for what happens on their watch, and I have taken responsibility today for those 14 hospitals and all their serious problems. The right hon. Gentleman should accept that between 2005 and 2010 his Government received 142 letters about his hospital which they did nothing about, and introduced a regulatory system that did not expose poor care and ensure that it was addressed.

Andrew George (St Ives) (LD): I welcome Sir Bruce Keogh’s important report. However, although I admire my right hon. Friend, I totally dissociate myself from his ill-judged attempt to drag this important issue into the gutter of partisan politics and petty point-scoring. I expect better of him than that.

It is clear from annex A of the report that in all but one of the 14 hospitals, problems relating to staffing levels and the staff mix need to be addressed, and

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ambition 6 recommends action to address them. As my right hon. Friend knows, I campaign on this issue. What will the Government do to ensure that staffing levels are adequate in our acute hospitals?

Mr Hunt: Tackling failure in our NHS is not an easy path to take, but it is the right thing to do for patients. If my hon. Friend believes that all the care problems in the NHS started in 2010, I think he is the only Member who does. [Interruption.] Opposition Members must bear their share of the responsibility for the failures that they did not sort out. Staffing is indeed a problem that needs to be sorted out in many trusts, which is why we commissioned the review and why we are sending in turnaround teams to do just that.

Dame Joan Ruddock (Lewisham, Deptford) (Lab): The Secretary of State has made an appalling attempt to smear my right hon. Friend the Member for Leigh (Andy Burnham). Will he now acknowledge that in 2009, my right hon. Friend sought a review of all the hospitals with high mortality rates, that 21 were registered with conditions, and that five had warnings placed on them, which he and he his predecessor inherited? Will he tell the House what he and his predecessor did in respect of those hospitals in 2010, 2011 and 2012?

Mr Hunt: As I said in my statement, in nine of these 14 trusts, the chief executive or chair has been either replaced or moved on. However, the most important thing that we are doing is setting up a transparent failure regime, so that when problems arise they will be made public, so the system will never know something that the public do not, and so that Ministers will be required to take action to sort out failing hospitals. That is what is happening under this Government, but I am afraid that it did not happen when the right hon. Lady’s party was in power.

Mr William Cash (Stone) (Con): The Keogh report, which must be welcomed, followed the Francis report. Despite my continuous attempts to have a full public inquiry under the Inquiries Act 2005, successive Labour Secretaries of State refused. Can my right hon. Friend find out from the Department or in any other way how that happened? Will he be good enough to publish his findings, because the root of the real trouble is that they were not prepared to have an inquiry and it was a cover-up?

Mr Hunt: My hon. Friend knows that the Labour party refused 81 requests for a public inquiry into what happened at Mid Staffs—I repeat: 81 requests. He also knows that if it was not for that public inquiry, we would not be here now. That is the biggest lesson to learn about the benefits of a public inquiry, and that is why transparency matters. I hope he is also pleased that we will be having a debate on the Francis report in Government time later this year.

Sir Tony Cunningham (Workington) (Lab): If the teams going into Cumbria recommend increased staffing and resources, will the Secretary of State fund that?

Mr Hunt: If the issues are around staffing, we will sort those out. If the issues are around leadership, we will sort those out. If the issues are around clinical

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practice, we will sort that out. My commitment to the House is that we will do what it takes to sort out these failing hospitals.

Dr Phillip Lee (Bracknell) (Con): In 2006 the then Labour Government purchased 49% of Dr Foster, the intelligence unit from which a lot of these mortality data are emanating. Does the Secretary of State agree that for Secretaries of State from that point onwards to be claiming they were unaware of the data seems a bit rich?

Mr Hunt: There were repeatedly high mortality rates in all these 14 hospitals, and it took the public inquiry that Labour did not want to demonstrate to the world just how important hospital standardised mortality ratios are. They are the smoke alarm that was ignored in the case of Mid Staffs, and which could have led to the prevention of thousands of tragedies if we had taken action earlier. That is why we immediately insisted on this review by Sir Bruce.

Grahame M. Morris (Easington) (Lab): I think there is widespread respect for Sir Bruce Keogh and his report and I certainly welcome it, but it is a cynical move by the Secretary of State to try to besmirch the reputation of my right hon. Friend the Member for Leigh (Andy Burnham). May I point out that on this Government’s watch clinical negligence claims are up 50%, A and E waits are at a nine-year high and “never events” have tripled? What is the Secretary of State going to do about them?

Mr Hunt: We spend more than £1 billion every year on clinical negligence because the hon. Gentleman’s Government changed the rules so that trusts suffer no financial penalty when they have to pay a clinical negligence claim. That is something we really need to look at, because it is removing one of the biggest possible incentives for trusts to treat people safely.

Mark Reckless (Rochester and Strood) (Con): Is the Secretary of State aware that in Medway we were left with just three consultants to share cover of A and E, but we have now increased the number to six, and it will soon rise to eight?

Mr Hunt: These are precisely the problems that this review is designed to root out. There were problems with long A and E waits as well as with inappropriate medical interventions and poor communication with patients, but I hope my hon. Friend’s constituents will be reassured by the transparency of what is happening today, and the fact that I am making this Government accountable for sorting out those sorts of problems.

Chris Bryant (Rhondda) (Lab): I suspect that in a quieter moment the Secretary of State will not think this statement was his proudest moment. [Interruption.] Well, it seems that he used to be run by Coulson and now he is run by Crosby.

Most voters will be more interested in the future and how we can make sure that people’s lives are protected, so what does the Secretary of State have to say about the fact that fewer people are coming from other countries to work in the NHS? Because of the Government’s

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immigration policy, there is a real danger that we will have a significant problem in A and E recruitment across the country.

Mr Hunt: I struggle to find the link between that question and Sir Bruce Keogh’s report on the 14 hospitals, but as the hon. Gentleman has asked about A and E, and as he is trying to take the moral high ground, perhaps he would explain why he has not been standing up in this House campaigning against Labour’s abysmal record, as it has missed its A and E targets in Wales since 2009.

Rehman Chishti (Gillingham and Rainham) (Con): In 2005 and 2006 Medway Maritime hospital had the seventh worst mortality rate in the country, yet nothing was done. May I thank the Secretary of State for the actions he has put forward today, which will help improve the quality of care for my constituents and people from further afield?

Mr Hunt: My hon. Friend is right. There were high mortality rates in his hospital in six of the nine years they were measured under the last Labour Government, and there were problems with A and E and with inappropriate medical interventions. He can say to his constituents today that the Government have identified the problem and have been transparent about it, and we will be accountable for sorting it out.

Mr Kevin Barron (Rother Valley) (Lab): How many health professional regulatory bodies has the Secretary of State met since the publication of the Francis report?

Mr Hunt: I think I have met most of them, but I have certainly met the General Medical Council and the Nursing and Midwifery Council, and I have talked to them about the reasons they are finding it difficult to remove doctors and nurses from their lists when there are questions about their poor performance.

Tracey Crouch (Chatham and Aylesford) (Con): To complete the Medway Maritime hat trick, may I say I am very disappointed to hear from the Secretary of State that the hospital has gone into special measures? I have been assured that Sir Bruce Keogh’s recommendations are already being implemented, but will the Secretary of State say in what time frame he, and more importantly my constituents, should expect to see significant improvements at the Maritime?

Mr Hunt: We want these things to happen as quickly as possible, but all the hospitals Sir Bruce reviewed will be looked at again within the next year by the chief inspector of hospitals, Professor Sir Mike Richards, who starts work today, so we will be able to measure whether progress has been as swift as my hon. Friend and I would like.

Helen Jones (Warrington North) (Lab): May I ask the Secretary of State to actually discharge one of the responsibilities of his office by answering a simple question? If he believes that managers should not be able to get another post if they fail, why was there a plan to transfer the chief nurse from the failed Morecambe Bay NHS Trust on secondment to Warrington and Halton on the Secretary of State’s watch, stopped only when

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my hon. Friend the Member for Halton (Derek Twigg) and I found out about it? Did he or his Ministers know about this plan, and if not, why not?

Mr Hunt: That is exactly the reason why we are introducing measures to make sure—[Interruption.] Well, the Francis report was introduced to this House on 6 February, and we have said we will change legislation this year. We have already appointed a chief inspector of hospitals. I do not think we could go much faster. The trouble for the Labour party is not that we are going too slowly but that we are going too fast and exposing all sorts of problems which it wishes did not happen.

Andrew Griffiths (Burton) (Con): I thank the Secretary of State for shining a light on to the health care provided by Queen’s hospital in Burton. Although Queen’s has a lower unexpected death rate than other hospitals, any unnecessary death is a tragedy for the family concerned. Given that since 2005 Queen’s hospital had a higher mortality rate than Stafford hospital, does he understand the anger of my constituents who have seen their loved ones die unnecessarily and these concerns ignored by Labour?

Mr Hunt: My hon. Friend’s hospital had excess mortality rates for five of the nine years leading up to 2010 and not enough action was taken, and that is what today is all about. I hope that what his constituents will take from today is that this Government are committed to turning around failing hospitals and putting in place the right leadership, and the reassurance that when their loved ones go to Queen’s hospital or anywhere else in the country, they can get the kind of care they would want for themselves.

Ms Gisela Stuart (Birmingham, Edgbaston) (Lab): May I say to the Secretary of State that there is a tone and a language that we should choose to employ for candid conversations about failure and it saddens me that he did not find that language today, because it will not do us any good? The Francis report recommended a duty of candour. Will he update the House as to just how much progress he has made on that?

Mr Hunt: Yes, I can. We have accepted the recommendation that there should be a duty of candour on the boards of hospitals, with criminal sanctions if they fail to tell members of the public that they or their loved ones have been harmed by the hospital, and if they fail to tell the system that those incidents have happened. We have commissioned a review of safety by Sir Don Berwick, one of the greatest experts in the world, and we shall ask him whether we should extend that duty of candour to below board level. We shall wait to hear what he says. We understand the reasons why people might want to do that, but we are also aware that others have expressed the concern that it might destroy an atmosphere of trust in a hospital if people were worried about criminal consequences if they did not talk about any failures they saw in their daily work.

Margot James (Stourbridge) (Con): I warmly welcome my right hon. Friend’s break with the culture of cover-up that has been so prevalent in the past. I reject absolutely

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the shadow Health Secretary’s claim that the Dudley Group NHS Foundation Trust’s performance has deteriorated since 2010—

[

Interruption.

]

Mr Speaker: Order. The hon. Lady is asking a question, but I have distinctly heard Members—in some cases identifiable Members—trying to shout her down. That should not happen on either side of the House. If she wishes to continue with her question, she may do so.

Margot James: Thank you, Mr Speaker.

I reject the shadow Health Secretary’s claim. The new leadership that was appointed to the trust in 2009 found deep-seated problems there. Does my right hon. Friend the Secretary of State welcome, as I do, the positive notes in Sir Bruce Keogh’s report about that new leadership’s abilities, and Sir Bruce’s finding that the overall work force at our trust are

“committed, loyal, passionate, caring and motivated”?

Mr Hunt: I welcome that, and I am delighted that my hon. Friend’s trust was not one of the ones that it was necessary to put into special measures. We have learnt a lesson from the successful way in which the schools system is regulated. Ofsted distinguishes between failing schools that have in place good management who are able to turn the school round and those where a change of leadership is required, and I am pleased that the report found that Dudley had the right leadership in place.

Gloria De Piero (Ashfield) (Lab): I welcome the report and I hope that the new chief executive at King’s Mill hospital in my constituency will provide the leadership that has been lacking in recent years. He assures me that he will implement all the report’s recommendations. The report mentions

“significant concerns around staffing levels at…King’s Mill Hospital”.

The trust has lost more than 200 nurses since 2010. Can we have them back?

Mr Hunt: Staffing levels are indeed one of the issues that contribute to poor care, if we get them wrong. That is why we are committed to implementing the Francis recommendations on safe staffing levels, and why, having protected and increased the NHS budget—contrary to what the shadow Secretary of State wanted—we now have 6,000 additional doctors working in the NHS. [Interruption.] In these individual cases, if staffing levels are the issue, they will be addressed.

Mr John Baron (Basildon and Billericay) (Con): The Secretary of State has been absolutely right to highlight and pursue past failures for the benefit of future patients. That includes investigating why the regulatory system seems to have failed in these cases. Does he agree, however, that we must not allow the report to overshadow much of the good work that is being done in our hospitals, including Basildon hospital which now has new management and is instigating changes?

Mr Hunt: I agree with that. One reason why it is so important to reform the regulatory structures that we inherited is that they tried to identify only poor care—not terribly successfully—when we need a system that identifies outstanding care as well. We need such a system for the

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benefit of the general reputation of the NHS and the morale of the service. We also need one so that a failing hospital can have an organisation on which it can model itself, just as a failing school can model itself on a school that has received an outstanding Ofsted report. That provides a solution to the problem: we identify a problem transparently and we sort it out.

Chris Williamson (Derby North) (Lab): The Secretary of State said that he was proud of the NHS, yet he and his Ministers have supported a top-down reorganisation of the national health service that will lead to 49% privatisation and cut 4,000 nurses. We know from the Francis report that staffing levels are key to the whole agenda, and the Secretary of State has just said he acknowledges that, so will he reinstate the 4,000 nurses he has cut from the NHS?

Mr Hunt: Perhaps the hon. Gentleman would like to acknowledge that more money has gone to the front line as a result of the reorganisation that this Government have introduced. We have 8,000 more clinical staff now than when the Labour Government were in office.

Steve Baker (Wycombe) (Con): Walter Coles died because he was forgotten. Edward Maitland died because he was fed solid food. I could name others; those are just two of the patients who have died unnecessarily. And yet high mortality rates made it on to the board’s agenda in Buckinghamshire only because of a trigger relating to concern for reputational risk. The board had no robust risk management practices in place, and there were no plans to introduce any. Furthermore, certain key elements relating to changes in urgent care were missing. In setting out to champion patients, will my right hon. Friend set out how it will be possible to remove an entire board, or any members of a board who are not performing well?

Mr Hunt: Absolutely. I congratulate my hon. Friend on his extraordinary campaigning on behalf of his constituents. It is very difficult for a local Member to take on his own hospital when he finds failings, but he does it with great bravery. Yes, we need to ensure that the way we judge hospitals is not just about meeting waiting time and A and E targets, important though they are; it must also be about safety, about compassionate care and about governance. Other things matter as well. That is what we are changing.

Jack Dromey (Birmingham, Erdington) (Lab): In a new low for British politics, the Secretary of State today descended into the gutter. How can he begin to blame the last Government for the deterioration at the 14 hospitals concerned, which took place under this Government, especially as the Government were warned about unacceptable standards in five of them?

Mr Hunt: The low in British politics is that it took so long for a Government to be honest about failings in the NHS. Many of those hospitals have a culture that entrenched failure for years and years under the last Labour Government, yet Labour Members refuse to accept that even now. What does that say to the public about whether they can be trusted with the future of our NHS?

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Martin Vickers (Cleethorpes) (Con): I welcome the robust and determined approach that my right hon. Friend is taking. It is right that the mistakes of the past should be thoroughly investigated, but my constituents—some of whom are waiting to go into Grimsby and Scunthorpe hospitals—need an assurance that action will be taken to remedy the situation immediately. There are many dedicated staff in our area, but recruitment has always been a problem in northern Lincolnshire. Will my right hon. Friend assure me that if additional support is needed to recruit the best clinicians and managers, it will be made available?

Mr Hunt: We will quite simply do what it takes to ensure that we implement the recommendations of the Keogh review for north Lincolnshire hospitals. We owe my hon. Friend’s constituents nothing less. The first step is to be honest about the problems. The big difference between the two sides of the House is illustrated by the fact that we will restore morale not by pretending that the problems do not exist but by being honest about them and confronting them. That is what we will do in my hon. Friend’s constituency.

Sarah Champion (Rotherham) (Lab): I should like to start by offering my deepest sympathy to the patients and families. We are talking about mortality statistics, but these are actually loved ones who have been lost. For the second time today, I ask the Secretary of State whether he will accept, adopt and implement the recommendations in the Francis report.

Mr Hunt: And for the second time, I say yes.

Sir Tony Baldry (Banbury) (Con): Professor Brian Jarman observed that, until recently, the Department of Health seemed to be a “denial machine” and that there was suppression and spin. Will the Secretary of State and the whole House at least agree that there is no room for denial, suppression or spin in the NHS, and that what we need for the future are total transparency, accountability and a Care Quality Commission that performs properly and professionally?

Mr Hunt: My hon. Friend speaks wisely, because the first step towards sorting out these problems is to have a system that Ministers cannot interfere with so that when there is failure, regulators are able to speak out without any political pressure—without any Ministers leaning on them in the run-up to elections—in the interests of patients. That is why we are completely changing the CQC. We are introducing a chief inspector of hospitals, who will be the nation’s whistleblower and who will have the independence and freedom that the old CQC never had. I hope that will help the public feel more confident that where there are problems they are properly tackled and not swept under the carpet.

Alex Cunningham (Stockton North) (Lab): Several times the Secretary of State has admitted that staffing cut drastically on his watch is a major factor in deteriorating care in the NHS—an NHS that has been in the charge of the Conservative party for more than three years. What is he going to do about restoring staffing levels?

Mr Hunt: Clinical staff numbers have gone up by 8,000 since 2010: there are 6,000 more doctors, 1,000 more midwives and 1,000 more health visitors. The numbers

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have gone up since 2010. If we followed the shadow Secretary of State’s advice and cut the NHS budget from its current levels, that would not be possible.

Mr Marcus Jones (Nuneaton) (Con): I am pleased that the Secretary of State has sought to take tough decisions to bring more openness and transparency to our NHS and not keep sweeping things under the carpet. Improving quality for patients is the immediate priority, and I support him in the decisive action he has taken, but will he also now seek to establish a sustainable future for the George Eliot hospital, which has suffered from a great deal of uncertainty since 2006?

Mr Hunt: I absolutely intend to do that. As my hon. Friend knows, I have been to the George Eliot hospital, working part of a shift in its accident and emergency department. I thought the staff there were working extremely hard, under great pressure. I noticed that the hospital did not have the systems in place that others have; I believe that hospital had 16 IT systems, which meant that if someone in the A and E department needed a blood test, all the details would have to be re-entered on a different system. That takes up a lot of clinical time, so making changes in these areas can make a big difference. But I do think it is important, as we expose these problems, that we recognise that even at the 14 hospitals mentioned today good care is being provided every day and the staff in those hospitals are working very hard. We need to back them, and the best way of doing so is to give them confidence that we are going to turn around their hospital.

Andrew Miller (Ellesmere Port and Neston) (Lab): Management systems that are run on a blame culture inevitably create cover-ups and lead to people disguising the facts. Will the Secretary of State now show some leadership by trying to eradicate that from the health service? Will he take the advice Professor Ashton gave on Radio 4 this morning, because he expressed a firm way forward for the NHS? Will the Secretary of State stop playing these silly political games and follow Professor Ashton’s advice?

Mr Hunt: It is not playing silly political games to expose poor care; it is doing my duty as Health Secretary, and that is what I will continue to do. Improving systems, such as making sure there is safe staffing, is very important. It is ridiculous in this day and age that someone can be admitted to A and E but that department cannot access their GP record, and cannot see whether they are a diabetic or whether they have mild dementia. Those are things we are determined to sort out.

Sir Bob Russell (Colchester) (LD): On 6 February, the Prime Minister asked Professor Sir Bruce Keogh to review the quality of hospital care. Although Colchester is only one hour from London, Sir Bruce did not make a single visit in the five months that elapsed. Although, obviously, I welcome the Secretary of State’s observation today that for Colchester general hospital this is more of a green light than a red light, will he do what Sir Bruce did not do and visit the hospital, so that he can, in the words of the panel, meet a large number of “committed and enthusiastic” staff?

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Mr Hunt: I would be delighted to do that. I try to visit somewhere on the front line in the NHS every week, making sure I do not just visit the best places; I visit places that have problems and places like Colchester hospital which are improving—I am delighted that Sir Bruce’s report recognised that.

Emily Thornberry (Islington South and Finsbury) (Lab): The Secretary of State began his statement with an alarming story about patients being left unmonitored on trolleys—I understand that took place at Tameside hospital. Does he agree that there may be a connection between that and the fact that there are 128 fewer nurses, midwives and health visitors in that hospital than there were in 2010? Given that the previous Government flagged up that hospital as one of particular concern, was he watching it to make sure that there were no cuts in nursing staff there?

Mr Hunt: As I have said many times, where there is not safe staffing we need to put that right. As I have also said, there are 8,000 more front-line staff under this Government than there were when the hon. Lady’s Government were in power. But those are not the only issues; we also need to address issues of leadership, of systems, which we talked about, and of clinical effectiveness. We need to sort out all those. On staffing numbers, I would just point out that plenty of hospitals under equivalent financial pressures are managing to deliver outstanding care, so a lot of this is about getting the right leadership in place at a board level.

Andrew Bridgen (North West Leicestershire) (Con): On 1 July, just over two weeks ago, my aunt died unexpectedly and alone at Queen’s hospital, Burton. The Keogh review has now shown that hospital to have had a higher mortality rate than Stafford since at least 2005. Will my right hon. Friend pledge to work tirelessly to heal our NHS, so that my constituents, my friends and my relatives do not continue to die unnecessarily because of the failed policies of the previous Labour Government? [Interruption.]

Mr Hunt: This is the problem. [Interruption.] This is the denial we are getting from the Labour party; it is denying any responsibility for these deep-seated problems in some of our hospitals. As Health Secretary, I intend to do exactly as my hon. Friend describes. In order to try to measure the progress we are making, we will this year for the first time be asking every NHS in-patient whether they would recommend the quality of care that they received to a friend or a member of their family, because in the end that is what this is all about.

Derek Twigg (Halton) (Lab): In May 2010, had mortality rates been falling in NHS hospitals?

Mr Hunt: According to Professor Jarman on the radio this morning, the answer is that it has been falling slightly.

Mr Bernard Jenkin (Harwich and North Essex) (Con): I welcome the fact that Colchester general hospital is not being put in special measures. That expresses Monitor’s confidence in the current leadership of the hospital, which is already implementing improvements in the areas that it told the Keogh report about, which are reported

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to be the matters of concern. I also welcome my right hon. Friend’s emphasis on leadership, and openness and trust of leadership, but does he accept what we are finding in the Public Administration Committee’s inquiry into complaints handling in public services that that lack of trust and openness is found not just at trust level, but goes right up the command chain of the health service and has historically existed in the Department of Health? How will he challenge that culture and define the right kind of leadership that should be taught by the leadership academy?

Mr Hunt: My hon. Friend makes a very important point. The simple way we can change that culture, which will not be easy and will not happen immediately, is by making sure that where there is failure, there is someone who is independent and able to speak up about that failure without fear or favour—someone to be the nation’s whistleblower-in-chief. That is what we must have with the new chief inspector of hospitals, modelled on the chief inspector of schools and how well the whole Ofsted regulation system has worked. That has to be the first step; there must be no hiding place when there is failure. From there, we will have the pressure on the whole system, right the way up to Ministers, to make sure that failure is sorted out.

Nic Dakin (Scunthorpe) (Lab): Sir Bruce Keogh warns us in his report about the very reaction we have seen today, which is in danger of shaming this House by focusing on politics instead of people. He wrote in his first few paragraphs that

“this is not a time for hasty reactions and recriminations”.

I read those words at five past 8 this morning when the Department of Health finally opened up to allow Members of Parliament to read what was there. Will the Secretary of State assure me and my constituents, who use Scunthorpe general hospital, that he will work to support people and put people before politics, because this afternoon he has put politics before people?

Mr Hunt: That is exactly what I am doing; the best hope we can give to the hon. Gentleman’s constituents is to say that we are putting them first by being honest about the problems and by tackling the mediocrity that has been a feature of too many hospitals for too long.

Jackie Doyle-Price (Thurrock) (Con): Bereaved families in Thurrock have had their pain compounded by how the Basildon and Thurrock trust has investigated complaints and incidents. Does my right hon. Friend agree that the way in which hospitals investigate such incidents is an important aspect of the transparency and accountability agenda?

Mr Hunt: It is, and this year we will be introducing in law a duty of candour that will make it a criminal offence for boards not to be honest, not only with families if patients have been harmed, but with the system, which is extremely important. Salford Royal hospital has one of the most successful safety records in the country, and it has achieved that by creating an atmosphere of trust so that front-line staff are not afraid to speak out about the problems that they encounter, however junior they are. It takes outstanding leadership to get that right, and part of the turning point that we require today is an understanding of what is involved in such leadership, which we need in many more places.

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Jim Shannon (Strangford) (DUP): High mortality rates are unacceptable and their effect on people’s confidence in, and satisfaction with, the NHS is a problem. We in Northern Ireland are fortunate that there have not been such disclosures, but it is important that lessons can be learned. Does the Secretary of State intend to share the data and findings with regions of the United Kingdom and the devolved Administration in the Northern Ireland Assembly?

Mr Hunt: When there are excess mortality rates, there is some controversy about exactly how many avoidable deaths they correspond to, which is why Professor Keogh has asked Professor Nick Black and Lord Darzi to carry out a further study to try better to understand the link between excess mortality and avoidable deaths. We will be happy to share that information with the devolved Administrations.

Several hon. Members rose—

Mr Speaker: Order. I am keen to accommodate as many remaining colleagues as I can, but I point out to the House that I must have some regard to the Second Reading debate on the Defence Reform Bill, so economy in questions and answers is now of the essence.

John Stevenson (Carlisle) (Con): I welcome the Keogh report. Patients should come first and patient care should be at the centre of our health service. Over the past 10 years, sadly, there has been a clear lack of leadership and management at North Cumbria University Hospitals NHS Trust, so I am not surprised by the report. However, there is a possible solution to improve health care in north Cumbria: the acquisition of the hospitals by Northumbria Healthcare NHS Foundation Trust. Will the Secretary of State work with me, the regulators and Northumbria to ensure that the acquisition proceeds as quickly as possible so that the people of Cumbria and Carlisle get the best possible health care?

Mr Hunt: I very much hope that that acquisition can proceed and I agree with my hon. Friend that it is the way forward. Although we have to ensure that that happens properly, Northumbria can give North Cumbria the leadership that it badly needs, so the process would be positive.

Barbara Keeley (Worsley and Eccles South) (Lab): Since the publication of the Francis report, it seems that we have been going round and round the question of safe staffing levels, which I have raised several times. Ratios of two nurses to 29 patients, or worse, have been reported to me—I do not think that they are uncommon—and the CQC tells us that one in 10 hospitals has unsafe staffing levels. It must be accepted that the number of nurses has reached unsafe levels in these 14 hospitals and many parts of the country. The Secretary of State cited Salford Royal hospital, but will he act now to ensure that all wards in all hospitals publicise their staffing ratios, because I would not want a relative on a ward with a ratio of 2:29?

Mr Hunt: The right ratio of patients to nurses depends on the type of patients in a ward, because different wards have different requirements. Salford Royal has a good model through which it ensures that it has the

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right number of nurses. As I said to the hon. Member for Rotherham (Sarah Champion), I accept what Francis says about safe staffing, but he did not recommend the Labour party’s policy of minimum mandated national staffing levels. I am following the recommendation of the Francis report, which I think is the right way forward.

Andrew Bingham (High Peak) (Con): My constituents in Glossop use Tameside hospital. For too long, people such as Liz Degnen have highlighted their worries about Tameside, and the recent departure of its chief executive was called for and welcomed by several hon. Members. Does my right hon. Friend agree that the Keogh report is a vindication of many of my constituents’ long-held beliefs?

Mr Hunt: Yes it is, but I hope that we can give them confidence today that the problems will finally be addressed.

Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op): I have welcomed the Keogh process from the beginning. Although the report on Tameside is hard hitting, I entirely welcome it—it is consistent with what has been in the public domain for two weeks—and the evidence that all Tameside MPs gave to Keogh to demand a change in leadership has been justified. Although I speak as an MP who has campaigned critically against his hospital, may I say that the tone and comments of the Secretary of State were neither helpful nor accurate with regard to Tameside? We need him to focus on implementing the reforms that are needed, one of which is clearly to deal with the inadequacy of the previous inspection regime. The extent of the scrutiny of these 14 trusts was great, but that is needed for all hospitals, so can he tell us what he will do to put that into effect?

Mr Hunt: I absolutely can. The new chief inspector of hospitals starts work today. We would like him to start the new inspection regime, adopting the same methodology as the Keogh review, as soon as possible, but it takes time to assemble a team of expert inspectors. He plans to start a pilot round of inspections this autumn before getting into full swing next year, and all the hospitals on today’s list will be inspected again within the next 12 months.

Heather Wheeler (South Derbyshire) (Con): My constituents use Burton trust, so it is a sad day when it is on the list. Will the Secretary of State help to ensure that no barrier is placed between MPs and hospital boards so that there is total transparency and local MPs can help the boards in the future?

Mr Hunt: That open relationship between hon. Members and their local NHS trusts is extremely important and useful. We all have to recognise that sometimes we have to speak up publicly when there are problems at our local NHS trust, because we have to represent our constituents, and that is part of the change due to this process. In the end, the most important thing is to give people confidence that, when there are problems, we are a Government who are committed to sorting them out.

Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab): Page 22 of the Keogh report clearly states:

“Contrary to the pre-visit data, when the review teams visited the hospitals, they found frequent examples of inadequate numbers

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of nursing staff in some ward areas. The reported data did not provide a true picture of the numbers of staff actually working on the wards.”

It goes on to say that that

“was compounded by an over-reliance on unregistered staff and temporary staff”.

Given that the Government have sacked more than 1,000 people in front-line nursing roles in seven of the trusts involved, what conclusion does the Secretary of State draw from that paragraph?

Mr Hunt: It is funny how Labour Members like to accuse Government Members of making party political points, but then misrepresent the reality that there are 8,000 more clinical staff throughout the NHS than when their Government were in power.

Jeremy Lefroy (Stafford) (Con): As my right hon. Friend says, transparency is vital. Stafford hospital has improved substantially since the spotlight was shone on it, although we are not complacent at all. One of the real problems we face is that good clinicians avoid management positions. What plans does he have to encourage young clinicians to undertake professional management training so that they can move into senior management positions in the course of their careers?

Mr Hunt: As ever, my hon. Friend speaks wisely, because we know a key point is that we need more good clinicians to go into management positions throughout the NHS. I am in close discussions with the NHS leadership academy, which this Government set up, to determine what more can be done to guarantee that able clinicians who pass muster and go into management can get a job at the end of that process. In addition, we have to encourage people to go into challenging trusts, rather than always being attracted to the best trusts. Such a change has been managed in the schools system, so we need to achieve that in health as well.

Ian Austin (Dudley North) (Lab): I supported the inquiry and worked hard to provide details from Russells Hall patients and relatives, and to arrange for them to meet Sir Bruce’s team. Although the hospital has not been put into special measures, there are clearly areas of concern because people are waiting longer for A and E than in 2010, infection rates have increased and staff morale has gone down. The report cites

“Inadequate qualified nurse staffing levels on some wards”.

The Secretary of State said that if staffing levels were the problem, he would sort that out, so what assurances can he give people in Dudley and the staff at Russells Hall that he is going to address those inadequate nurse staffing levels?

Mr Hunt: The same assurances I have given everyone else representing a hospital with troubles: we are totally committed to sorting out those problems—[Interruption.] Labour Front Benchers ask when, but we have said that these hospitals will be re-inspected in the next year. The structures that we are putting in place to sort them out are a million times tougher than anything that happened when they were in office.

Andrew Percy (Brigg and Goole) (Con): I am proud of our local NHS, especially the examples of good practice highlighted at Goole hospital. However, as someone who works as a volunteer in the NHS every

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weekend, I meet patients who are frightened of going into local hospitals precisely because of the failings highlighted in the report on North Lincolnshire and Goole Hospitals Foundation NHS Trust. Will the Secretary of State visit Goole and north Lincolnshire to meet my constituents and discuss such individuals as an 88-year-old whose nails were not cut for seven months, whose toilet calls went unanswered and who ultimately died after contracting E.coli in our local hospital?

Mr Hunt: Of course I would be delighted to visit my hon. Friend’s local hospital. I am sure there will be a great deal that I can learn, and I hope I will be able to give encouragement to the staff there, who are working very hard in a very difficult situation. I hope today will give them encouragement that this is a Government who are determined to turn around their hospital.

Huw Irranca-Davies (Ogmore) (Lab): On the basis of the very good and welcome Keogh report and also the Francis recommendations on safe staffing levels, does the Secretary of State feel that the reduction of 4,000 nurses over the past two or three years is in any way contributing to the very issues that he has described today?

Mr Hunt: We welcome and accept the Francis report’s recommendations on safe staffing and we recognise that that involves having doctors. We recognise and are pleased that our protection of the NHS budget means that there are 6,000 more doctors than when the hon. Gentleman’s Government were in power. If he looks at what is happening in his own Wales, he might find that there are a few lessons that the NHS in Wales could learn.

David Tredinnick (Bosworth) (Con): Sadly, the problems at George Eliot hospital go back well over a decade, so these special measures will be very welcome, but is not one of my right hon. Friend’s fundamental problems dealing with a culture of secrecy, where in the past a board with a problem would talk to a strategic health authority board and nobody would know what was going on? Is not sunlight the best disinfectant?

Mr Hunt: It is, absolutely. That is the big change. My hon. Friend speaks wisely. That is the big change that we have to make in our NHS. When there is failure, we must be open about it. It has to be public—we have to keep the public in the picture, because that is the best way of putting pressure on the system and on the politicians to make sure that they sort it out. That is not what happened before; it is going to happen now.

Charlotte Leslie (Bristol North West) (Con): Does the Secretary of State share my dismay that just as Julie Bailey was hounded out of Mid Staffs by the local Labour party for revealing the truth, some of the tone of this debate—accusations, sanctimoniousness and false victimhood—is a very tangible illustration of what whistleblowers have had to face for the past decade when they have tried to get the truth out? What a tangible demonstration, sadly, this has been.

Mr Hunt: My hon. Friend is right. If some of those on the Opposition Benches knew exactly what Julie Bailey had to go through to expose the truth of what happened at Mid Staffs, they might think again about some of their behaviour this afternoon.

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Mr Philip Hollobone (Kettering) (Con): Although proud of our local hospital, residents in Kettering will be pleased that Sir Bruce has managed to expose some dangerously run parts of the NHS, but they will be concerned to know what can be done to make the future far better than what has happened in the past.

Mr Hunt: Absolutely, and the big point about the changes that we are bringing in—I congratulate my hon. Friend, who is a huge supporter of Kettering hospital, which he and I have visited together—is that the NHS in many ways is no different from other parts of our public services: there are excellent bits and there are bits where there is poor leadership. What we have to do if we are to sort out the poor leadership is to expose it and to make sure that the public know about it and the politicians cannot duck sorting it out. My hon. Friend’s constituents will be thinking, as a result of tomorrow’s headlines, “What about Kettering hospital?” That is why we will have an independent chief inspector who will go round and tell them how good Kettering hospital is. However much they love it, he may well find things that need to be improved, and my hon. Friend and his constituents will welcome that.

David Morris (Morecambe and Lunesdale) (Con): Last week it was the CQC. Now it turns out that between 2005 and 2010 there were 386 separate warnings that the last Labour Secretary of State claims never to have received, yet the trust in my area was given foundation status. Does my right hon. Friend agree that given the new revelation by Sir Brian Jarman on suppression of warnings, along with existing allegations of spin and cover-up levelled against a former Secretary of State for Health, it is now time for the right hon. Gentleman to resign?

Mr Hunt: That is a matter for the leader of the Labour party. What concerns me most is that the Opposition do not understand the fundamental policy mistakes they made which led to the entrenched culture of failure in too much of our hospital sector.

Nigel Mills (Amber Valley) (Con): Those of my constituents who use King’s Mill hospital will understandably be concerned about their future treatment. What reassurance can my right hon. Friend give me that this summer those patients will get the treatment that they rightly expect?

Mr Hunt: It is important to recognise that even at the hospitals that we are talking about this afternoon, there is good care happening every single day. The way that we will reassure my hon. Friend’s constituents is by having an independent inspection system which has not existed before, where regulators are not leaned on by Ministers to say the right thing in the run-up to elections. It is only when his constituents have confidence in that regulatory system that they will know the truth about their own hospital, and we want them to get there as soon as possible.

Neil Carmichael (Stroud) (Con): I welcome Sir Bruce’s report and the Secretary of State’s robust approach to it. Does my right hon. Friend agree that if we take away the right lessons from the statement and the questions on it, that will be the catalyst for a change of culture,

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enhancing transparency and accountability and introducing a new pace of response for the changes necessary to bring about higher standards in our hospitals?

Mr Hunt: We do need to draw those lessons, and the sad lesson from this afternoon is that that change in culture with respect to transparency and accountability does not extend to the Labour party. Voters will notice how unwilling Labour Members are to accept that things went wrong on their patch.

Andrew Stephenson (Pendle) (Con): Given what today’s report says about capacity issues at Blackburn hospital, and that the hospital is struggling to deal with the number of patients, serious questions again have to be asked about the decision to downgrade Burnley hospital’s accident and emergency department under the previous Government in 2007, which was consistently supported by the shadow Secretary of State when he was in office. Will my right hon. Friend visit Pendle to meet some of the affected families to reassure them that lessons have been learned from the mistakes of the past?

Mr Hunt: I will be delighted to visit my hon. Friend’s hospital, as well as those of many colleagues. I am sure I will learn a great deal when I do so.

Stephen Metcalfe (South Basildon and East Thurrock) (Con): I congratulate my right hon. Friend on having put patients first in the whole process. As we move forward, we should approach the failures of the past more in sorrow than in anger, but we have to accept that that is a hard ask for my constituents who potentially have lost loved ones because of the catastrophic failures of the past inspection regime. That is why my constituents are impatient for change. If hospitals do not make the changes necessary in the required time, what sanctions will be imposed?

Mr Hunt: The entire system will be accountable for making sure that change is delivered. That is part of the change that we are making through the statement this afternoon. My hon. Friend’s hospital will be inspected again within the next 12 months and we will be able to see what progress has been made. There will be further independent inspections after that, so his constituents will have confidence that an independent expert is casting an eye over the health care that they are receiving and telling them the unvarnished truth about whether they can trust it or not.

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Points of Order

2.37 pm

Ian Austin (Dudley North) (Lab): On a point of order, Mr Speaker.

Mr Speaker: I hope it will be a point of order, rather than a point of mischief—I have known the hon. Gentleman for 30 years—but we will hear it.

Ian Austin: The Secretary of State has said repeatedly, and just a moment ago for the final time, that Members on the Opposition Benches had not supported a culture of transparency in the NHS, yet during these questions he has heard Member after Member, including myself, saying that we supported the inquiry, we provided details to it, we arranged meetings for our constituents—[Interruption.] What advice can you provide so that he does not come here and mislead the House in this way again? [Interruption.]

Mr Speaker: Order. [Interruption.] Order. I am perfectly capable of handling these matters without any sedentary interjections from hon. Members on either side of the Chamber. The first thing the hon. Gentleman must do is to withdraw the accusation of misleading the House, which is an unparliamentary accusation. If he wants to use another word, he may, but he must not accuse a Member of misleading the House. I ask him to withdraw.

Ian Austin: Yes. What the Secretary of State said is clearly not supported by the facts, but I am happy to withdraw the word that you have asked me to withdraw. I withdraw the word.

Mr Speaker: I am grateful to the hon. Gentleman for withdrawing that word. Beyond that we need not go today. I thank him for that.

Debbie Abrahams (Oldham East and Saddleworth) (Lab): On a point of order, Mr Speaker. Yesterday the Secretary of State for Work and Pensions and the Prime Minister made very misleading statements about the impact of welfare reform—

Mr Speaker: Order. I am sure that the hon. Lady is not suggesting that any misleading statements were made in this House. Can she just be clear that she is not saying that?

Debbie Abrahams: Not in this House.

Mr Speaker: Right. If the hon. Lady has a point of order, let us hear it briefly.

Debbie Abrahams: Misleading statements were made, not in this House, but in relation to Government business. The Government have been rebuked on a number of occasions, for example by the chair of the UK Statistics Authority, for making misleading remarks. It is unparliamentary behaviour. What action can be taken?

Mr Speaker: Order. I simply say to the hon. Lady that, although I understand that emotions on these matters are extremely highly charged, where there are

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references to conduct outside the Chamber, by definition the matter is not parliamentary and, therefore, there can be no question of the Chair being expected properly to rule on the matter. She has made her wider point and it is on the record. I think that we must leave it there for today.

If there are no further points of order, we now come to the ten-minute rule motion, for which the right hon. Member for Lagan Valley (Mr Donaldson) has been exceptionally patiently waiting.

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Victims and Survivors (Northern Ireland)

Motion for leave to bring in a Bill (Standing Order No. 23)

2.40 pm

Mr Jeffrey M. Donaldson (Lagan Valley) (DUP): I beg to move,

That leave be given to bring in a Bill to amend the definitions of victims and survivors for the purposes of the Northern Ireland Act 1998, the Victims and Survivors (Northern Ireland) Order 2006 and related legislation; and for connected purposes.

The current definition of a victim and survivor in Northern Ireland, and specifically the definition contained in the 2006 order, is a matter of controversy and is not accepted by the vast majority of innocent victims and survivors in Northern Ireland. Why is it unacceptable? In every conflict there are two sides, but in the case of Northern Ireland the previous Government determined that anyone affected by the troubles, either through the loss of a loved one or through psychological trauma or physical injury, would be defined as a victim and survivor. In effect, that means that innocent victims are equated with those who joined illegal terrorist organisations and went out to commit murder and destruction in Northern Ireland, and indeed in other parts of the United Kingdom, because I am minded that not all the victims of terrorist violence relating to Northern Ireland were in Northern Ireland. One thinks of the victims of outrages in Birmingham, Manchester, here in London, in Guildford and in Brighton, where the IRA sought to murder the Prime Minister of the day and members of her Cabinet. That was an act not only of terrorism, but of treason under the law of the United Kingdom.

The reality is that today in Northern Ireland the people who perpetrated those acts of terrorism, whether republican or loyalist, or of any other affiliation, if they were injured during the troubles, or if through an act of their own commission they were subjected to psychological trauma or physical injury, are regarded as a victim and survivor for the purposes of the current legislation. I believe that is simply morally indefensible. It is deeply hurtful to the innocent victims on both sides in Northern Ireland, because we are talking about not only IRA atrocities, but those committed by loyalists. The notion that those who went out with guns and bombs to take innocent life are defined under the current legislation as victims and survivors is just plain wrong.

I will give one example. The notorious Shankill bomb was exploded by the provisional IRA outside a butcher’s shop in the heart of Belfast on a busy Saturday afternoon. Many innocent people lost their lives that day as a result, but the bomber, Thomas Begley, was also killed. Yet under the definition of a victim and survivor, Thomas Begley, who murdered nine innocent people that day, is regarded as a victim. I believe that is unacceptable.

Imagine the outcry there would be if the Government were to introduce legislation determining that those who planted bombs on the London underground and on buses here in our capital city, murdering innocent people, are the same as those they murdered and should be regarded as such under the law. Imagine the outcry there would be in this city. Yet in Belfast and in my home city of Lisburn the victims have to put up with that reality.

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That has significant consequences, for example in dealing with the past in Northern Ireland. A few years ago the Eames-Bradley report put forward proposals for dealing with the legacy of the past, one of which was that there should be a recognition payment for the families of those who were killed during the troubles. Under the definition of a victim and survivor, the same recognition payment would go to the families of IRA and loyalist terrorists as would go to the families of the innocent victims. Consequently, on that issue alone the Eames-Bradley report fell. This has significant consequences for how we deal with the past in Northern Ireland.

Therefore, given that primary legislation is involved, not least the Northern Ireland Act 1998, which sets the broad parameters of the peace process and implementing agreements, we in this House ought to deal with this situation by amending the Act. We ought to address the hurt felt by innocent victims in Northern Ireland who feel that it is wrong that someone who pulled a trigger or planted a bomb is treated in the same way by the definition as their innocent victims.

To support that contention, let me quote from an e-mail I received yesterday from one of those innocent victims, Ann Travers, who has become quite prominent recently by speaking out on victims issues and who happened to become aware that I would be asking for leave to bring in a Bill today. She wrote:

“On the 8th April 1984 the IRA murdered my 23 year old sister Mary and attempted to murder my father”—

he was a judge—

“shooting him 6 times and attempted to murder my mother by holding a gun to her head, only for it to jam twice, while my family were walking home from mass. I was 14 at the time and this evil incident has affected my whole life. The men and woman who woke up that Sunday and chose to go out to murder can not be considered victims in the same sense as my sister, my parents, my brothers and myself. It is bizarre that we equate the perpetrators

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of murder along with their victims in Northern Ireland. After our sister’s murder, neither my brothers nor myself chose to get revenge by joining an illegal organisation. To put it in the simplest terms, imagine the following scenario: my family is attacked by the IRA, the gunman shoots Mary in the back, an RUC land rover pulls up and a policeman shoots the IRA gunman in the back. Is he a victim in the same sense as my unarmed sister? In my opinion, he is not. By his own free will and choice he created victims in both my family and his own. It is time, in my opinion, that all innocent victims are given the consideration and respect that they deserve.”

I can put it no more eloquently.

I believe that it is a travesty that in Northern Ireland those who went out with murder in their hearts to destroy innocent life are regarded as victims for the purposes of legislation and equated with those innocent people who were cut down in cold blood on our streets, and I include in that the courageous men and women who served in our armed forces, the Royal Ulster Constabulary and the emergency services, and put their lives at risk. They, too, are innocent victims along with the many civilians murdered in the course of the troubles.

In presenting this Bill, I ask the House to give careful consideration to these issues, and I hope that right hon. and hon. Members will give leave for the Bill to proceed. This is an injustice that needs to be addressed. I recognise that there must be input from others on this matter, but we cannot allow this travesty to continue unchecked.

Question put and agreed to.

Ordered,

That Mr Jeffrey M Donaldson, Mr Nigel Dodds, Bob Stewart, Kate Hoey, Lady Hermon, Dr William McCrea, Mr Gregory Campbell, Philip Davies, David Simpson, Mr David Nuttall, Jim Shannon and Sammy Wilson present the Bill.

Mr Jeffrey M Donaldson accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 22 November, and to be printed (Bill 92).

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Defence Reform Bill

[Relevant documents: The Seventh Report from the Defence Committee, Session 2012-13, Defence Acquisition, HC 9, and the Government response, HC 73]

Second Reading

2.52 pm

The Secretary of State for Defence (Mr Philip Hammond): I beg to move, That the Bill be now read a Second time.

The defence of the United Kingdom and the protection of our national interests must be the priority of any Government. The brave men and women of our armed forces do an exceptional job, and I am sure all Members of the House will wish to pay tribute to their dedication, and to the sacrifices they make not only on operations but, as the tragic events in the Brecon Beacons at the weekend reminded us, on a daily basis.

The armed forces can perform their vital role only if we provide them with the capabilities they need to operate effectively and safely. We have a duty to them to ensure they have the tools they need in terms of manpower, training, equipment and logistical support. At the same time, we must deal with the black hole we inherited in the defence budget, and the Ministry of Defence has had to contribute its share to the broader challenge of correcting the public sector structural deficit.

Mr Jim Murphy (East Renfrewshire) (Lab): I wish to respond not to the Secretary of State’s discordant point but to address his earlier comment and say that Her Majesty’s Opposition wholeheartedly share the expression of sympathy offered by the Secretary of State about events in Brecon. I know there are limits to what he can say at this early stage because it is subject to a police inquiry, but can he share any more details with the House about his understanding of those tragic events? In particular, there have been suggestions that training regimes may recently have been altered as part of efforts to boost the number of reservists, but I suspect that they are unfounded. Will he say what he feels he can say at this early stage?

Mr Hammond: I understand that the right hon. Gentleman desires to get to the bottom of this matter—as do we all—but he is right that there is little I can say. An inquiry by Dyfed-Powys police is under way, and when it is complete there will be a service inquiry into the events of last weekend. We will get to the bottom of what happened, and if there are systemic lessons to be learned, we will learn them. I give the right hon. Gentleman an undertaking that once the inquiry is complete, I will report to the House in an appropriate way.

The need to address the public sector structural deficit and the deficit in the defence budget has meant tough decisions and a relentless focus on squeezing more capability out of what remains the world’s fourth largest defence budget.

Mr John Baron (Basildon and Billericay) (Con): My right hon. Friend talked, quite rightly, about the first duty of government, but he will be aware that some of us on the Government Benches are concerned that misguided Army reserve plans will throw up false economies and unacceptable capability gaps. Given that the present Territorial Army mobilisation rate is 40%, will he explain

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how we are trying to plug a gap from the loss of 20,000 regular troops with only 30,000 reservists? A 40% figure would suggest that we need nearer 50,000.

Mr Hammond: My hon. Friend’s view on this matter is well known. Two weeks ago the Government set out robust proposals in a White Paper, “Future Reserves 2020”. I am confident we will be able to deliver the force we have set out, and that that force will support the level of ambition for deployment set out in the strategic defence and security review 2010.

Nick Smith (Blaenau Gwent) (Lab): Will the Secretary of State give way?

Mr Hammond: I will take one more intervention and then I must make some progress.

Nick Smith: Will the Secretary of State tell the House the annual recruitment targets for reservists for each remaining year of this Parliament?

Mr Hammond: I suspect the hon. Gentleman is referring to figures that were put in the public domain last year before this process was fully under way. I have said to the House that I will be transparent about recruitment and trained-strength targets. Later this year we intend to begin publishing quarterly figures, and we will set out the expected forward trajectory at the same time. As I said the week before last, and will say again now, the path will not be smooth and there will be some lumpiness in it. The structural changes we are making in the regular Army and the Army Reserve will have an impact at the front end, but in the long run it will support the growth of reserves that we all seek.

Eliminating waste and inefficiency in our procurement systems, and making best use of the skills available, whether they are in the public or private sector, or indeed in the regular or reserve forces, are at the heart of our plan for sustainable and effective defence in times of austerity. The Government have set about transforming the way that defence is managed and delivered. Starting with the strategic defence and security review in 2010, we have looked hard at how we can carry out our activity to see whether it can be improved. As part of that process, my predecessor asked Lord Levene of Portsoken to conduct an in-depth review into every aspect of how we manage defence, and we are well advanced in implementing the changes he recommended.

Ensuring our forces have the right equipment, delivered on time, is essential if we are to maintain our capabilities in the future, and ensuring we do that cost-effectively is critical if we are to sustain them. Making full use of the expertise and skills of our reserve forces is crucial if we are to meet the security challenges that we face with smaller regular forces. In most areas, we are able to deliver defence transformation through changing the way we are organised and the way we do things in the Ministry of Defence. In two areas—procurement and the use of reserves—primary legislation is required to complete the programme.

Kate Green (Stretford and Urmston) (Lab): I am glad that the Secretary of State is about to expand on procurement. Will he confirm that in securing a reliable and cost-effective supply of equipment, there will be

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open competition for a wide range of suppliers—including those such as Joseph Gleave & Son in my constituency, which has supplied the Department for many years—and that the Government procurement model will not squeeze out smaller businesses that have been supplying in the past.

Mr Hammond: The Government have a focused initiative to increase participation of small and medium-sized enterprises in the defence supply chain. Such businesses provide a tremendously important part of our defence resilience. Because they are often buried in complex supply chains led by a large prime contractor, their contribution is not always noticed as much as it should be, but they are an important part of the equation. I will come later to the balance between open competitive procurement and single-source procurement, which is at the heart of part 2.

The Bill has three main parts. Parts 1 and 2 deal with defence procurement and part 3 deals with our reserve forces. Turning first to procurement, I think that few in this House would not agree that the way in which we develop, specify, procure and support defence equipment can and must be improved. We have already made significant progress, but we recognise that fundamental change is needed if we are to sustain that progress and to deliver the equipment that the armed forces need and the value for money that the public are entitled to expect. Now is the time to make those changes.

For decades, our defence equipment programme has suffered from poor time and cost forecasting and poor project and programme management, leading to delays, cost overruns and specification failures. We have to address these issues by challenging the pattern of incentives and behaviours once and for all. That is why, after success on military operations, my priority as Defence Secretary has been to establish, for the first time, a fully costed and deliverable 10-year equipment plan. This has now been achieved and published. Our armed forces now have the certainty that the equipment they are expecting has been both planned for and is properly funded. However, if we are to deliver this programme consistently and to entrench a better method of working to provide a better service to the front line in future, we need fundamentally to reform our defence acquisition processes and structures.

The previous Government were of course aware of this problem. Towards the end of their time in office, they commissioned the independent report by Bernard Gray into the acquisition process. That report found serious structural and cultural problems in the way in which we procure defence equipment. We have considered carefully its analysis and the options available for reform of Defence Equipment and Support. My predecessor appointed its author as Chief of Defence Matériel, with a remit to take the reform agenda forward. The results of that work are set out in the White Paper, “Better defence acquisition”, which I published on 10 June this year.

Our preference is to transform the existing Defence Equipment and Support organisation into a Government-owned, contractor-operated organisation—a GoCo. We believe that this model is the one most likely to embed and sustain the significant behavioural change required

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to transform defence acquisition. However, belief alone is not enough, and we will test this proposition through a commercial competition and against a public sector comparator. If, at the end of this rigorous evaluation process, a GoCo is assessed to be the best-value-for-money option, a private sector partner will be appointed to manage DE&S on behalf of the Secretary of State. This will be a radical change, but not quite as radical as some of the more lurid headlines have suggested.

Peter Luff (Mid Worcestershire) (Con): I am most grateful to my right hon. Friend for his compelling speech and for giving way. May I ask him about the timetable for the process he has outlined? When will these things actually happen?

Mr Hammond: We expect to reach a decision point in the commercial process next spring. If we go down the route of appointing a GoCo, we expect the GoCo operator to be appointed late in 2014 or at the very beginning of 2015.

Mr Tobias Ellwood (Bournemouth East) (Con): I am grateful to the Secretary of State for explaining what is happening with the GoCo. A number of international companies would be interested in applying to run it. Is there any requirement that it needs to be run by a British company, or would it be open to tenders from across the world?

Mr Hammond: The proposition is that a GoCo would be a UK-registered and domiciled company paying its taxes in the UK, but we expect that its shareholders will include international partner firms. The GoCo that runs the Atomic Weapons Establishment includes three non-UK companies in its shareholder register, and I see no reason to expect that the result of this competition would be different. We would expect British and non-British companies to be involved in the ownership, but the GoCo itself will be a British company.

Sir Gerald Howarth (Aldershot) (Con): The Secretary of State will be aware that there are concerns among those in industry that their intellectual property may not be protected. Given that there is a very high degree of competition between the United States and the United Kingdom, the admission of a US company into the inner workings of the British Ministry of Defence across a wide range of areas would not be the same as the co-operation on the Atomic Weapons Establishment at Aldermaston, where the United States and the United Kingdom are completely in agreement.

Mr Hammond: I am grateful to my hon. Friend, who will have thought very carefully about these matters. Of course, this goes to the heart of the deliberations that we have been having. We are confident that we can put in place a model that will protect intellectual property—an issue to which I shall return.

Ms Gisela Stuart (Birmingham, Edgbaston) (Lab): On a similar theme, what have been the discussions with the United States about the transfer of classified information in this context?

Mr Hammond: I shall talk about confidential information later in my speech. DE&S has access to certain confidential information at the moment. The arrangements will

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provide for the GoCo to have access to that confidential information under a regime that retains its confidentiality and ensures that it will be maintained. If the hon. Lady will bear with me, I shall address that very shortly.

If, at the end of the evaluation process that I have described, a GoCo is assessed to be the best value-for-money option, a private sector partner will be appointed to manage DE&S on behalf of the Secretary of State. As I said, this will be a radical change, but not quite as radical as some have suggested. The GoCo will always act as the Secretary of State’s agent. All contracts entered into will continue to be in the Secretary of State’s name, and strategic governance will be provided by a governance function that will remain within the MOD. The GoCo’s customers will be the front-line commands and the MOD itself; it will work to their agenda and their priorities. I can therefore assure the House that this is absolutely not about handing over billions of pounds of taxpayers’ money to a private company and leaving it to decide what kit to buy for our armed forces.

The commercial competition is under way, and we expect it to be completed by spring next year. In parallel, we are developing a robust public sector comparator, which we call DE&S-plus, that will explore how far it is possible to go in reforming the organisation, making the maximum use of freedoms and flexibilities that we can negotiate within the public sector. If, at the end of this process, the GoCo model is indeed the chosen option, legislation needs to be in place so that we can move quickly to sign a contract with the successful bidder once a final decision is made.

Ms Stuart: The Secretary of State might address this point later, but how does he envisage that the GoCo will be accountable to Parliament? Would it appear in front of the Public Accounts Committee or the Defence Committee?

Mr Hammond: The Secretary of State will remain accountable to Parliament, but we expect that the GoCo will have an accounting officer, probably its chief executive officer, who will therefore be liable to be called before the Public Accounts Committee.

Part 1 of the Bill sets out the provisions and safeguards necessary to underpin the operation of a GoCo. The most important element of almost any organisation is its people, and the smooth transfer of the DE&S work force to the GoCo operating company will be vital to its future success. The Bill confirms that the initial transfer of civil servants would be covered by the TUPE regulations. By virtue of being a contractor-operated entity, the GoCo would have considerable freedoms, particularly relating to its ability to recruit and reward its staff at market rates—freedoms that are not usually available to public sector bodies. The Bill confirms that in its activities on behalf of the Secretary of State it will enjoy certain statutory immunities and exemptions that are currently enjoyed by the Crown—for example, in relation to the Health and Safety at Work etc. Act 1974 and the Nuclear Installations Act 1965.

In addition to those freedoms, we also need to put in place a number of safeguards to protect Government and taxpayer interests. Therefore, the Bill provides the Secretary of State with the power to create a scheme to transfer the business to another contractor or, in extremis,

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back to the MOD, should that prove necessary. The Bill also provides for the Ministry of Defence police to have clear jurisdiction to investigate any offences that may relate to defence work carried out by contractors. It also makes provision to allow the Secretary of State to disclose information that he has received in confidence to a contractor, and to authorise the use of intellectual property. Clause 7 and schedule 2 put in place appropriate safeguards to prevent the unauthorised use or disclosure of confidential information by either the GoCo or its employees.

I am determined to drive a step change in the way in which the MOD carries out its defence procurement business, and to do so rapidly. The gradual erosion of skills and capability in the organisation over recent years cannot be allowed to continue if we are to ensure the MOD’s ability to deliver equipment to the front line. The measures in part 1 of the Bill will allow us to make the transition to a GoCo at the conclusion of the commercial competition, subject, of course, to the bids representing value for money for the taxpayer.

Part 2 relates to single-source procurement. Open competition remains the best way of ensuring value for taxpayers’ money. However, sometimes there is only a single provider of a capability we require, such as nuclear propulsion units. Sometimes the need to maintain critical national industrial capabilities or sovereign control of the intellectual property in equipment programmes requires us to place contracts with UK companies without a competitive process. European Union public procurement regulations specifically allow this for military equipment.

This so-called single-source procurement typically accounts for about 45%—about £6 billion a year—of the total that the MOD spends on Defence Equipment and Support, and it is likely to remain at that level for at least the next decade or so. Clearly, in the absence of the disciplines of the marketplace there needs to be a set of rules governing single-source procurement in order to ensure proper protection for the taxpayers’ interest.

The MOD currently uses a framework for single-source procurement that has remained largely unchanged for the past 45 years—the so-called yellow book. Under this system, which is voluntary, the profit that contractors can earn is fixed, but there are few if any incentives for them to reduce costs. Clearly, this does not serve the best interests of the taxpayer and neither does it help industry to maintain a competitive focus that will allow it to succeed in export markets. It is therefore in the interests of both the MOD customer and its industrial suppliers to create a framework with incentives for efficient and competitive behaviour.

In 2011 the Government commissioned Lord Currie of Marylebone to undertake an independent review of the yellow book. He recommended a new framework based on transparency, with much stronger supplier efficiency incentives and underpinned by more robust governance arrangements. Based on his recommendations and following extensive consultations with our major single-source suppliers, we have developed a framework that will be introduced through regulations provided for in part 2 of the Bill. At its core is the principle that industry gets a fair profit in exchange for providing the MOD with transparency on costs and the protections we need to ensure value for money. It will align the MOD and industry by allowing additional profit to be earned through delivery of defined efficiencies, sharing

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the benefits between industry and the taxpayer. A statutory basis for the regime will ensure widespread coverage across our single-source supply base and allow application of the regime throughout the single-source supply chain.

To police the new framework we will create a small, arm’s length body, to be known as the single source regulations office, with approximately 30 staff. Its role will be to keep the statutory framework under review and to monitor adherence to it. It will replace an existing non-departmental public body that has little power other than to oversee a voluntary framework that can be amended only by consensus. The existing regime has failed to evolve to reflect changing circumstances, largely because either party can block any change that it regards as contrary to its own interests.

The single source regulations office will ensure that we do not have to wait another 45 years to update the regime. It will be a source of expert advice to the Secretary of State and it will also act as expert adjudicator in disputes between the MOD and our single-source suppliers. Crucially, it will advise the Secretary of State on the setting of key profit rates for single-source contracts.

Critical to ensuring that the MOD is able to negotiate prices that are fair and reasonable to both suppliers and taxpayers is the generation of better quality and more standardised cost data. Therefore, regulations enabled by this Bill will introduce a requirement for standard reports throughout the life of single-source contracts worth more than £5 million, allowing the MOD to build up a database against which future pricing assumptions can be judged and on the basis of which more robust, long-term cost forecasts can be made.

On contracts above £50 million, suppliers will also have to provide quarterly contract reports to support effective contract management, report any relevant events and deliver information about their overhead costs, allowing us better to align the industrial capacity the MOD is paying for with our long-term capability requirements. Clause 25 also creates a power for the MOD to gain access to suppliers’ records.

In order to ensure that suppliers fulfil their reporting and transparency obligations, the Bill includes a compliance regime. Failure to provide the required information on a timely basis will result in a penalty being applied under a civil penalty regime. Penalties will vary with the value of the contract and the single source regulations office will act as the appeal body for the compliance regime.

We recognise that we are requiring our suppliers to provide unprecedented levels of sensitive commercial information that would be of great value to their competitors or to market analysts. We need this information to ensure we get value for money on what is a significant proportion of defence spending, but obtaining proprietary information by statute imposes on Government a duty to secure its proper protection. In order to ensure that the increased level of transparency and reporting we require is not subject to abuse, the Bill creates a new criminal offence of unauthorised disclosure of sensitive information obtained under the new single source framework, such as forecast financial performance and investment or rationalisation plans.

Given that confidential and commercially sensitive information is already exempt from freedom of information requests, we do not think it will be necessary to bar

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release under the Freedom of Information Act in order to protect the information. However, I am clear about our obligation to our suppliers in respect of their sensitive information and the Bill creates an order-making power to allow the Secretary of State to invoke a full statutory bar on disclosure under FOI if the routine exemptions prove inadequate to protect the exceptional level of information that we are requiring to be disclosed to us.

Mr Julian Brazier (Canterbury) (Con): The framework being described by my right hon. Friend is largely welcome, but it seems odd that it is being applied to only part 2 and the 45% spent on single-source procurement. Many of us support in principle the idea of the GoCo, but introducing more commercial entities to the organisation that buys the other 55% of the kit could expose more commercial-in-confidence material to outside bodies than would be the case under a single-source supplier.

Mr Hammond: I assure my hon. Friend that the arrangements for our relationship with the GoCo, which will be largely contractual but partly regulatory, will also protect confidential information and make appropriate arrangements for the use of intellectual property held by the Secretary of State. I am dealing with the specific regime that will apply to part 2 contracts with single-source suppliers.

The new single-source regime will incentivise efficiency in operating costs and the minimisation of overheads. It will align the interests of the MOD and its suppliers, and support the competitiveness of the UK defence industry in both domestic and foreign markets.

Finally, I turn to the third part of the Bill, which relates to our reserve forces.

Sir Gerald Howarth: I am grateful to the Secretary of State because he has given way many times. Before he turns to the reserves, may I ask him about defence research? As he will know, my hon. Friend the Member for Mid Worcestershire (Peter Luff) and I feel strongly that we are not spending enough on defence research in this country. How does he see the protection of that important base being secured? Will it be handed over to the GoCo? What will be the regime to govern research?

Mr Hammond: My hon. Friend knows well, because he was a Minister at the time, that we made a commitment that a fixed minimum percentage of the defence budget will be spent on research and development. That is a matter of policy and such matters will remain for the MOD to determine. If a GoCo is appointed, it will execute policy, not make policy. I am happy to give him that reassurance.

Our reserves make an essential contribution to delivering the nation’s security at home and overseas. They are a valuable and highly valued part of our armed forces who work alongside their regular counterparts to deliver our military capability. Earlier this month, I published a White Paper that signalled a step change in the offer that we make to individual reservists and their employers. It set out a range of measures to revitalise the reserve forces and reverse the decline of the recent past, including paid annual leave and pension entitlements in respect of training days, access to key defence health services, greater predictability of reservists’ liability for call-out and a £500 per month per reservist award to small and

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medium-sized enterprises when their reservist employees are mobilised. There will also be substantially improved equipment and training opportunities.

Helen Goodman (Bishop Auckland) (Lab): I asked the Secretary of State a parliamentary written question because the centre in Bishop Auckland in my constituency is to close. I asked what that will save the Government. Instead of answering the question, I received the information that the Government are investing £8 million in the reserve estate. I would like to give him another opportunity to answer the question. How much is being saved? Quite honestly, if nothing is being saved, do not close it.

Mr Hammond: I do not know whether the hon. Lady was in the House for my statement on the reserves. If she thinks that closing Army Reserve bases is about saving money, she has the wrong end of the stick. It is about delivering the commitments that we have made to the Army Reserve about training, equipment and proper organisation. It is about reflecting the changes in the regular Army and our commitment that reserve units will be paired with regular Army units.

I cannot answer the hon. Lady’s specific question at the Dispatch Box, but I will write to her. The vast majority of sites from which we are withdrawing Territorial Army or Army Reserve activity will remain because they house cadet units that will continue, so that is likely to be the case. This is not about saving money; it is about organising the reserve forces in a way that allows them to make their vital contribution to Future Force 2020.

The White Paper details a comprehensive package of changes that will allow us to create the integrated regular reserve force of the future. A small number of the planned changes require primary legislation. The first of those is the renaming of the Territorial Army. The TA was founded in 1908 and has served this country superbly in peace and in war. However, today’s TA soldiers have a function that is far wider and more important than the original home defence role envisaged by Haldane. As we reshape the Army—regulars and reserves—for the 21st century, it is right that we change the name of the TA to the “Army Reserve” better to reflect its future role. The Bill also provides for the consequential renaming of the Army’s ex-regular reserve force as the “Regular Reserve”.

Reflecting the integral role that reservists will play in almost all future military operations, the Bill extends the powers to mobilise reservists across all three services. Under the Reserve Forces Act 1996, reservists can be mobilised only under specific circumstances. The Bill will enable reservists to be mobilised for the full range of tasks that the armed forces may be asked to undertake.

Bob Stewart (Beckenham) (Con): This is just a small point, but I recall that the Territorial Army was deployed to the 1st British Corps of the British Army of the Rhine, so it has not dealt just with home defence.

Mr Hammond: My hon. Friend is absolutely right. The role of the Territorial Army has evolved and it will evolve further. My point was that when Haldane introduced it in 1908 by consolidating the county militias, he had in mind a home or territorial defence role, which the name reflects. I am happy to agree with my hon. Friend that the role that the TA has played over the years has been substantially greater than the role envisaged for it originally.

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Hon. Members on both sides of the House have raised concerns over the possibility of employment discrimination against reservists. The Bill provides improved employment protection by allowing a right of access to the employment tribunal without a qualifying employment period for an unfair dismissal claim where the dismissal relates to the employee’s reserve service. Separately, there is already a criminal offence of dismissal because of call-out for reserve service.

However, we recognise that there is a perception among many reservists that they are disadvantaged in the workplace by their reserve service. We believe that the changes that we have set out in the White Paper will greatly improve relations between reservists and their employers, but we take the issue of discrimination against reservists very seriously. We have established a webpage through which reservists can report incidents of perceived discrimination and we will investigate them. If we find that there is a case for further action, we will take it. We will consider whether further measures may be taken in the next quinquennial Armed Forces Bill, which is due to be introduced in this House in 2015.

Mr James Arbuthnot (North East Hampshire) (Con): I am delighted with what my right hon. Friend has just said. Will he consider, among the further measures that might be taken, action to help reservists who find that their promotion is held back by their being in the reserve forces?

Mr Hammond: I am grateful to my right hon. Friend. That example fits exactly into the category of discrimination in the workplace. We must look objectively at the examples that we are given to establish whether they constitute actual and systemic discrimination against reservists, rather than mere perceptions. The time scale that we have set out is appropriate. We have set up the webpage and are starting the process now. In 2015, when the next quinquennial Armed Forces Bill is introduced, the time will be right to analyse the information that we have received and to consider what action is appropriate.

The support of employers is crucial to delivering our future reserve forces, and we seek to strengthen the reservists and the MOD’s relationship with them. The White Paper set out a range of measures to deliver a sea change in those relationships. While small and medium-sized enterprises will benefit from all of the measures, I have acknowledged previously that reserve service can have a particular impact on them as a result of their scale. Therefore, by amending clause 44 of the Reserve Forces Act 1996 to allow the introduction of a financial award of £500 per month per reservist for SMEs when any of their reservist employees is mobilised, we will target additional resources at this sector and explicitly recognise the additional impact SMEs may have to absorb when a reservist employee is mobilised.

The measures in part 3 support the package of proposals set out in the White Paper. They will ensure that we have the well-trained, well-equipped and integrated reserve forces we need, which are able to deploy with their regular counterparts as part of Future Force 2020.

The driver for change running through the Bill is the requirement to deliver the capabilities our armed forces need while ensuring value for money for taxpayers, whether that is through better procurement or more efficient and effective use of the reserves. The measures

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contained within it allow fundamental change to how we procure our military equipment, and ensure that we will be able to make full use of our reserve forces in the future.

Whatever else we may disagree on, all of us in this House place the utmost importance on properly equipping and supporting our armed forces. The Bill will ensure that we can be confident of our ability to do so in the future. I hope the measures will command widespread support, and that we will be able to take them forward through this House and the other place on a consensual basis. I commend the Bill to the House.

3.30 pm

Mr Jim Murphy (East Renfrewshire) (Lab): Like the whole House, I listened intently to the Secretary of State’s necessarily detailed analysis of the specific points he announced in advocating the Bill. At the start of his speech he reflected on the tragedy in Brecon, and I associate the Opposition with his comments. After the controversy relating to today’s Health statement, I wish—I suspect to your satisfaction, Mr Deputy Speaker—to seek a more consensual approach to the tone of our debate. The principles driving the reforms in the Bill have the potential to unite all parts of the House.

Reform to defence procurement is vital to ensuring value for money, while upholding the highest possible standards and timely delivery of world-class equipment to our personnel. It is essential that increasing the number and enhancing the role of the reserve force be a success, in order to strengthen our front-line Army capability at a time when it has been subject to cutbacks. The Opposition’s aim is to ensure that these objectives are met through effective delivery, scrutinising the military as well as the financial implications of the Government’s proposals.

On Government-owned contractor-operated procurement, it is crucial that defence procurement practices be modernised to serve both the front-line overseas and the bottom line back home. Both parties agree that some of the issues that have plagued defence procurement have been insufficiently tackled by successive Administrations. In all Governments, momentum on modernisation has been lost. Major projects such as Eurofighter-Typhoon have grown greatly in cost and have been delivered years late. The roots of that lay in the late Baroness Thatcher’s Administration, showing just how far back some of these issues go.

Shared blame, however, is not as important as shared resolve, which is necessary to achieve meaningful reform. Such reform will come from greater professional project and programme management within Defence Equipment and Support, faster decision making, fuller accountability for outcomes, and longer-term integration of military expertise.

The Opposition are genuinely open-minded about the management structure that will deliver this change, which is why we accept the proposed legislation that will enable a GoCo model to be established. Supporting assessment of GoCo’s feasibility, however, is not the same as supporting its creation. The comparison between a GoCo and DE&S-plus, as it is inelegantly named, should, we believe, be based on the following principles.

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First, reform must strengthen value for money within programmes, with industry adhering to targets on time and on cost. Secondly, the chosen procurement management model must retain parliamentary accountability for decision making—the point made by my hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart)—so that oversight and scrutiny of multi-billion pound contracts is not hampered, but if possible enhanced. Thirdly, any change in management model must protect the rights of staff and engage with their trade union representatives, and finally, the procurement process should be characterised by talent and skill, with clear lines of responsibility, proper reward and career structures and a culture of consequences for those tasked with project management. Within that, military expertise has to be maximised without a single-service interest dominating decision making. The Opposition welcome a rigorous examination of all the options for achieving that and wish to see a genuine comparison made between the two options of GoCo and DE&S-plus.

Mr Arbuthnot: I am delighted with the right hon. Gentleman’s tone. I do not want to put words in his mouth, but can I take it that he has no objection, in principle, to a GoCo, but that he wishes to see how it works out in practice?

Mr Murphy: The right hon. Gentleman anticipates my point entirely. We wish to see reform. It is difficult to defend the status quo, which, despite the many efforts of the professionals involved, has ill suited successive Governments and has not delivered value for money. In addition to testing the logic of GoCo and DE&S-plus against the three principles I mentioned, we will consider the points the Defence Committee raised.

Further to the point made by the right hon. Gentleman, it is important that the comparison be genuine and be seen to be genuine. I say gently to the Secretary of State, however, that so far he has failed to guarantee that the Government will publish the findings of the two value-for-money studies. I hope they will take the opportunity, today or in Committee, to commit to doing so. It is essential that Parliament, industry and our armed forces have full confidence that affordability is a determining factor in this process, but that can be achieved only if we have public transparency in the findings prior to a final decision being made and Members being asked to vote in favour.

I hope, too, that we will receive reassurances about the role of Parliament and the National Audit Office in scrutinising the internal decision-making process of a GoCo. It is understood that the Secretary of State is ultimately accountable—to be fair, he said the same again today—but the decisions taken by the contractor in the handling of multi-billion pound projects should not be free from public oversight. It will also interest the House to know how reform will impact on one of the centrepieces of the 2011 Levene review, which was for service chiefs to

“take responsibility (and ultimately own the budget) for detailed capability planning”.

Any enhanced power for a contractor could contradict the increased control over budgetary management and planning given to the service chiefs.

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Mr Philip Hammond: I am happy to clarify that point. As the right hon. Gentleman knows, we are in the process of devolving budget responsibility to the front-line commands, including responsibility for equipment procurement and support, starting with the smaller equipment procurement projects, but eventually including all but the very largest and most strategic. They will be the customers for the GoCo, just as in the current model they are the customers for DE&S. One of the disciplines that the proposed change will introduce is a harder boundary between the customer and the provider. At the moment, we suffer from a permeable boundary that allows decision making sometimes to be a bit woollier than it should be.

Mr Murphy: I thank the Secretary of State for that genuinely helpful intervention. In Committee, we will have to interrogate the expertise of the civil servants operating at that interface. I mean no disrespect to anyone, but they are up against remarkably talented negotiators with an entirely legitimate commercial interest, so we have to get that interface right. The simplicity the Secretary of State spoke about is important.

Mr Hammond: I apologise for intervening on the right hon. Gentleman again, but that is exactly the point: the civil servants and the military people in the front-line commands—who are the customers—will interface with DE&S-plus or GoCo, which is their service provider. It is the service provider that will have to deal with the hard-nosed negotiators of the multi-billion pound international defence companies, and which will need to hire and fire in the marketplace at market rates in order to face them across the table on a level playing field—if I may mix my metaphors.

Mr Murphy: We are looking for a level playing field and a level negotiating table—if a metaphor it is—because this issue is so significant. I welcome what the Secretary of State said about hopefully simplifying and strengthening the process. However, procurement might have become a little more complicated as a consequence of a speech given today by the Chief Secretary to the Treasury in another place—which would normally mean the second Chamber, but which on this occasion appears to mean the Royal United Services Institute. We are pretty clear: Labour have always said that we are committed to the minimum credible independent nuclear deterrent. Actually, I should correct myself: we have not always said that.

Mr Deputy Speaker (Mr Lindsay Hoyle): I think it has always been the case for you, Mr Murphy.

Mr Murphy: You know me well, Mr Deputy Speaker. Since we were serious, we have always said—[Hon. Members: “Ooh!”] Sorry: since we are being serious about our nation’s defence and have a passing affection for the public’s opinion, we have always said that we are committed to the minimum credible independent nuclear deterrent, which we believe is best delivered through a continuous at-sea deterrent. It would require a substantial body of evidence for us to change that view, but the review published today does not appear to offer such evidence. We will continue to scrutinise today’s report on the grounds of capability, cost and disarmament. Labour will also continue to look at ways in which a minimum, credible, independent nuclear deterrent can

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be delivered most efficiently, based on protecting our capability, delivering value for money and advancing disarmament objectives.

John Woodcock (Barrow and Furness) (Lab/Co-op): If you will permit me for a moment to continue straying off the topic slightly, Mr Deputy Speaker, may I put on the record the fact that the shadow Defence team deserves a great deal of credit for keeping both sides of the House on the right path, both for the thousands of jobs in my constituency and for our future defence for generations ahead?

Mr Deputy Speaker: Order. May I suggest to the hon. Gentleman that he should try to hold back his speech for tomorrow? I would not want him to use it all up today, and I think he got the point across.

Mr Murphy: I take your strictures about our not using the speeches we intend to give tomorrow, Mr Deputy Speaker, but I am not making a speech tomorrow—my hon. Friends will be speaking then—so I thought I would say it today.

The point I am making is about procurement, GoCo and DE&S-plus, and the complexity of the deterrent programme in that process. However, what we have learnt today is that the Lib Dem part of the Government has taken two years to review a policy and spent thousands of pounds of taxpayers’ money, only to conclude that the Lib Dems’ past policy was unachievable. Today they appear to have managed to advocate both a Trident-based system and part-time unilateralism simultaneously. That is a real achievement. The British people will marvel at the incompetence of suggesting that we should pay tens of billions of pounds to send boats to sea, while the media are now being briefed that on occasion they will not even carry missiles. That is like someone having a new, expensive burglar alarm at their home with no batteries and a sign above the door saying, “Come on in—no one’s at home”.

Martin Horwood (Cheltenham) (LD): The right hon. Gentleman must understand and be accurate in his descriptions. This was not a Liberal Democrat review; it was a review by the Government, insisted on by the Liberal Democrats, which says:

“The analysis has shown that there are alternatives to Trident that would enable the UK to be capable of inflicting significant damage such that most potential adversaries around the world would be deterred.”

Credibility—

Mr Deputy Speaker: Order. We are in danger of running tomorrow’s debate today. I do not want to do that; I want to get back to the Bill. [Interruption.] No, you are taking the bait, Mr Horwood. It is no use looking to Mr Murphy; we know he is not here tomorrow, but you will be.

Mr Murphy: Thank you, Mr Deputy Speaker. To be fair to the hon. Member for Cheltenham (Martin Horwood), it was impossible for him not to take the bait. [Interruption.] The Secretary of State sensibly says, “He’s the only Lib Dem here.” There is no audience, as it were, from his party for him to perform for, although the Chief Secretary to the Treasury will make the Lib Dems’ policy clear tomorrow in the Chamber—I hope. However, there is an

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issue—I will finish on this matter after this point, Mr Deputy Speaker—about how taxpayers’ money has been used to inform a Lib Dem process. I accept that the Government will say that the review is a Government document, but it was intended to inform the Lib Dem manifesto.

One of the primary arguments for a GoCo is its supposed ability to attract and retain higher skills and prevent a loss of talent from DE&S. The Opposition are clear about the need to increase the skill levels in our armed forces, but we recognise that this requirement limits itself to those in uniform. Those at the front line of defence procurement within government should be the equal in experience of those within industry—a point to which the Secretary of State has alluded. We will carefully scrutinise the procedures in place to ensure that the assessment phase is fair and transparent, and that sufficient controls are in place to ensure that those involved in the possible preparation of a GoCo cannot immediately go and work in that GoCo, a point to which we will return.

While we are on this theme, it seems unacceptable that the Government have not yet fully published their findings on The Sunday Times revelations on cash for access within the Ministry of Defence. The Secretary of State, of course, wrote to me on the matter, explaining the outcomes, but this was a private letter and I was not at liberty to disclose its contents and have chosen not to do so. I think it important, however, for the Secretary of State to provide the full details to the House.

Mr Philip Hammond: I am grateful to the right hon. Gentleman but I was not aware that I had not explained the situation publicly. If he would care to ask me a written parliamentary question, I will publish in the public domain the full information I have provided to him.

Mr Murphy: That is a kind offer from the Secretary of State, although he could have done so off his own back, and the problem is that we are running out of time for named day questions and replies. The alternative, with his permission, would be for me simply to tweet his letter. That would be quicker and I would be happy to do so if he so wishes. [Interruption.] With the Secretary of State’s permission, I will now tweet the letter I received some months ago detailing the Government’s response to The Sunday Times revelations.

These issues, alongside the impact of any reform of our strategic and working relationships with major international partners, particularly the US, and providing clarity on the ownership of risk, will be priorities for the Opposition. The restructuring of DE&S, however, should also be seen as part of a wider structural reform of defence procurement.

There is much else that I could have said, but time is against us today and my colleagues will raise in Committee additional points about sovereign capabilities, long-term planning and predictability for British industry, so I shall now turn briefly to reform of the reserves.

The Opposition want to ensure that reservist recruitment is successful so that the reserves can work alongside regulars to project force globally. Our reservists make an enormous contribution here at home in many ways. About 2,000 of them, some of whom I saw for myself

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when I went to see the Greco-Roman wrestling, helped to protect the London Olympics. Many serve overseas in far-away terrain in the name of national security. We should pay tribute to each one of those who have served, and above all to those who have lost their lives serving our nation.

While we champion the reserve force, we recognise the need to modernise. The name change to “Army Reserve” will reflect a modern composition and hopefully help to attract a new generation of recruits. The task ahead is, however, enormous and we should not pretend otherwise. The plan to double the size of the reserve forces to 30,000 by 2018 is now central to the Government’s ability to deliver their planning assumptions—originally, of course, designed for an Army of 95,000, but after further cuts now reliant on a regular force of just 82,000.

The scale of this task is underlined if we consider that the reserve forces of the US, Canada and Australia make up between 40% and 50% of their armies, as opposed to 20% here in the UK. Many analysts worry that, rather than reform of the Army being synchronised with that of the reserves, both are disjointed and the reserve uplift will not complement the regular Army but supplement lost capacity. Cuts in the regular Army are happening regardless of the success of any uplift in the reserves, rather than the one being contingent on the other.

This development comes as Army reserve recruitment has hit real trouble. The figures are publicly available—that recruitment targets were missed by more than 4,000 last year. Great care has to be taken to ensure that the loss of 26 Territorial Army centres does not make civilian communities in certain areas more disconnected from the military and disinclined to volunteer for the reserves.

Mr Ellwood: I echo the tone adopted by the shadow Secretary of State, but I am concerned by his direction of travel. Will he not take some responsibility for what happened to the TA during the previous Government’s tenure? The size of the TA fell by 40% and recruitment was down by tens of thousands. As a member of the TA, I remember an announcement from this place that training was to be cut and that no funding would be provided. He must acknowledge that the previous Government have some responsibility for where things are today.

Mr Murphy: That would be a very fair point if it was based on a fact. I suspect that our conversation today will be less productive if we repeat some of the debates of recent times, but the fact is that we increased the size of the Regular Army, whereas this uplift in the reserve forces is happening at a time of reductions in the Regular Army—that is the significant difference.

Mr Ellwood: I did not mention the Regular Army, but the TA. When Labour came to power in 1997, TA numbers were 62,000. When Labour left power in 2010, they were 37,000. It does not take a maths degree to realise that that is a massive reduction in TA capability.

Mr Murphy: My point is that in the same context, Regular Army numbers increased. I do not want us to bat each other about the head on this; I am assessing how we can make a success of the boost in reservist numbers. The comparison the hon. Gentleman invites

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me to draw, however, is with the Labour Government, and we boosted the size of the Regular Army. His party said that it was not big enough; it wanted an even bigger Army and was elected on a manifesto of going in that direction. The comparison is clear: we boosted the number of regulars. Of course, there is always pressure when it comes to reservists, who were under-recruited for about nine decades, so this is not a short-term problem for us or the current Government to grapple with.

Mr Philip Hammond: Will the right hon. Gentleman clarify two points? Does he accept that the six-month cancellation of TA training announced by the previous Government in October 2009 was not the way to stimulate TA recruitment and confidence? Also, as he is talking about Regular Army numbers, does he now accept a Regular Army of 82,000 as the basis for Future Force 2020, or does he still hanker after a reversal of that reduction?

Mr Murphy: As the Secretary of State knows, the previous decision on training was based on the recommendation of the Regular Army and the best available military advice. It was the type of situation that he faces whenever it comes to considering the best available military advice. We will make the detailed shape of the formation of our forces clear in our strategic defence review and in advance of the election.

The Opposition support moves to improve the training for reservists and ease their deeper integration with regular forces. We also support moves to use niche civilian skills, for example on cyber, in a military setting as well as to expand occupational health services. There are, however, areas where we believe the Government could go further. It is essential that the changes, particularly the extended periods of training and deployment, be compatible with employment patterns and that the reforms be designed in collaboration with employers.

It is worth noting the huge impact the changes could have on employers, particularly small employers. More than 600,000 businesses in the UK employ between two and four people. I suspect that we Members all employ a similar number of people in our parliamentary offices. We should ask how we would cope with losing a staff member for up to a year. Although I am sure that each and every one of us would be enormously supportive of a staff member’s military ambition, we might struggle to fill that space. Once we reflect on how we would feel about that, it gives us a better understanding of what many within that core group of 600,000 businesses will be confronted with.

Our view is that the reservists in those businesses will be a remarkable bonus and asset for them, but we must do more together to make that argument. A survey by the Federation of Small Businesses found that for one in three businesses, nothing would encourage them to employ a reservist, whereas almost 40% of those who had employed or would consider employing a reservist said that they believed that the Government’s proposed reforms would have a negative impact on their business. I do not agree with that; nevertheless, it is a sentiment felt by all too many businesses.

I welcome the announcement about access to unfair dismissal tribunals, but, as we have said before—and the Secretary of State referred to this—we believe that Ministers could go further. Current legislation clearly

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states that an employer has a duty to re-employ a returning reservist in the occupation in which he was employed before his service, on the same terms and conditions. There is, however, no legislation to prevent employers from discriminating against reservists in their hiring procedures on grounds of military affiliation.

We hope that, rather than embarking on a new consultation, the Government will work with employers on new legislation to provide further protection against discrimination in the hiring of reservists, which would need to be coupled with an obligation for reservists to make a transparent declaration at the interview stage. We believe that that should be part of a wider collaborative approach, and that a permanent employer engagement committee should be established to enable Governments to take the lead in advocating the employment of reservists.

There has been some debate about whether £1.8 billion is the right amount to invest, but we should also consider whether it will provide value for money. We hope that Ministers will be able to shed light on that in Committee. We shall want to know what proportion of the money is intended to fund financial incentives for employers and the “reservist award”, which tops up reservists’ salaries to match their civilian salaries. We shall also want to know whether the £1.8 billion covers reservists’ training, medical costs and pension payments, or whether those will come from another part of the MOD’s core budget. We are keen to establish what elements of the Reserves 2020 plan have clear funding streams, and where there may be unknown liabilities in a budget that involves competing interests.

The Bill has the potential to help the United Kingdom develop world-class procurement procedures that will be the envy of every nation. It gives us an opportunity to make a success of the enormous challenge of doubling the reserve force. The Opposition will support and scrutinise its proposals in Committee, and will give it a fair passage today.

3.56 pm

Mr James Arbuthnot (North East Hampshire) (Con): I echo what was said by my right hon. Friend the Secretary of State about the quality of our armed forces and the amount that we demand of them. We are putting them through a lot at the moment.

Once upon a time, before most Members were born, I was a Defence Procurement Minister, and I was delighted by the publication of the Bernard Gray report under the last Government. Sadly, the then Prime Minister tried to suppress it, although he should have recognised that it covered not just the period of a Labour Government, but the period during which I was in charge of defence procurement. The report revealed a great many failings in the procurement process. It showed, for instance, that the programme was overheated, that a weak interface between the MOD and DE&S was resulting in poor discipline and very little change control, and that there were insufficient skills in the DE&S. Subsequently, I was both delighted and highly amused when Bernard Gray was put in charge of sorting out the mess that he had identified.

The Bill was designed to achieve that. Like Gaul, it is divided into three parts—although, according to its drafting, there are four—dealing with defence procurement, single-source contracts and reserves. Each of those issues,

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but particularly procurement, raises a great many questions. I shall ask some of them now, because in the case of a change as fundamental as this, the devil is in the detail. The change is fundamental and it is being made against a background of fundamental change at the MOD as a result of the Levene reforms, severe reductions in funding and huge redundancies, not to mention the fighting in Afghanistan and the withdrawals from Afghanistan and Germany. As I have said, we are asking a lot of the Ministry of Defence, and it will need help to achieve the major changes set out in this Bill. It will need help from Parliament and from industry, and from academia and the country, and it should be willing to ask for and accept help, and everyone else should be willing to give it.

I shall start with the defence procurement process set out in the Bill. In December 2011 the Chief of Defence Matériel set out four options: first, the status quo; secondly, a trading fund; thirdly, an executive non-departmental public body with a private sector partner; and fourthly, the GoCo. We are now down to two options: a value-for-money comparison between the GoCo and what we hear is called DE&S-plus. Most unusually, there is no option to stay as we are. It is perhaps surprising that the MOD non-executive directors have not insisted on there being a stay-as-you-are option.

The GoCo option is reasonably clear, and I will come on to it in a moment, but DE&S-plus is not at all clear. The White Paper devotes a massive four lines to it and does not define it. In fact, so far as I understand it, DE&S-plus is designed to be unclear in order to be the basis for a negotiation between the MOD and the Treasury as to the freedoms the Treasury can offer. In other words, if DE&S-plus can pay more for its personnel and so attract much needed skills—more than current civil service terms and conditions allow for—the GoCo will become less attractive. But how, in practice, can the Treasury loosen the rules for the MOD without loosening those same rules for other Departments with similar problems? If the answer is that in practice it cannot, does that mean that in practice this decision has already been made—so it is GoCo or nothing, and there is no public sector comparator? Has my right hon. Friend the Secretary of State made up his mind? How will the private sector companies bidding for a GoCo be confident that their bids are being fairly compared with DE&S-plus, whatever that may be?

ADS, the organisation of defence companies, suggests that the proper metrics might be better value for money for the taxpayer; shorter and cheaper bidding processes; improved skills and expertise; and greater stability in the funding of the defence budget. That is a potential set of metrics, but what does my right hon. Friend say are the proper comparators, and how will he avoid this being a wholly subjective guess about future behaviour?