in the first session of the fifty-fourth parliament of the
united kingdom of great britain and northern ireland
commencing on the eleventh day of may in the
fifty-fourth year of the reign of
TWELFTH VOLUME OF SESSION 2005–06 House of Lords

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Monday, 12 June 2006.

The House met at half-past two of the clock: the LORD CHANCELLOR on the Woolsack.

Prayers—Read by the Lord Bishop of Coventry.

Lord Lee of Trafford

John Robert Louis Lee, Esquire, having been created Baron Lee of Trafford, of Bowdon in the County of Cheshire, for life—Was, in his robes, introduced between the Lord Baker of Dorking and the Lord Dholakia.

Lord Marland

Jonathan Peter Marland, Esquire, having been created Baron Marland, of Odstock in the County of Wiltshire, for life—Was, in his robes, introduced between the Lord Northbrook and the Lord Ashcroft.

Armed Forces: Armoured Patrol Vehicles

2.48 pm

Lord Astor of Hever asked Her Majesty's Government:

    When they expect to bring into service further patrol vehicles armoured to provide protection against improvised explosive devices.

The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Drayson): My Lords, I am sure the House will wish to join me in expressing our sincere condolences to the families and friends of the soldiers killed and injured in Afghanistan yesterday. We do not comment on the level of protection of specific vehicles, for obvious reasons. Protected patrol vehicles are only one of a range of vehicles available to
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commanders to allow them to balance mobility, protection and profile based on the threat, the terrain and the task. PPVs offer a level of protection commensurate with their weight, size and role, together with good mobility and a low profile.

Lord Astor of Hever: My Lords, we on these Benches, too, extend our condolences to the family of the soldier killed in Afghanistan yesterday. Our thoughts at this time are also with the two soldiers who were seriously injured yesterday, and we wish them a speedy recovery. I thank the Minister for his reply and understand completely that any answer that he gives must not prejudice troop protection, but the Snatch Land Rover is not remotely adequate for patrolling areas where insurgents use landmines. Can the Minister assure the House that the Government will provide our soldiers with equipment that is fit for this role? What assessment have the Government made of the RG-31 which, with its V-shaped undercarriage, has a greater resilience to IEDs and which the Americans have bought in large numbers just for this role?

Lord Drayson: My Lords, I do not accept that Snatch Land Rovers are not appropriate for the role. We must recognise the difference between protection and survivability. It is important that we have the trade-offs that we need for mobility. The Snatch Land Rover provides us with the mobility and level of protection that we need.

We had 14 RG-31s in Bosnia, which we took out of service some time ago due to difficulties with maintenance. We have looked at the RG-31 alongside a number of alternatives for our current fleet and concluded that the size and profile did not meet our needs. Size is important in the urban environment. The RG-31 cannot access areas that Snatch Land Rovers can get to.

Lord Garden: My Lords, from these Benches we also join in sending condolences to the family of the soldier who was so tragically killed and to the two soldiers who appear to have been seriously injured. What is the
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progress on the refurbishment of the FV430 vehicles? They are more than 40 years old. The Government have put in an order for £85 million to refurbish those vehicles. Will they provide adequate protection against IEDs? As it is a two-and-a-half-year programme starting in August, when will they be delivered?

Lord Drayson: My Lords, yes, we are working on upgrading the FV430 vehicles to improve their armour, engines and drivetrains. That work is going on now. I am not prepared to get into the details of numbers and timescale, but the timescale is sooner than that which the noble Lord mentioned. In the short term, next year we will introduce a new protected patrol vehicle to supplement our Snatch vehicles. In the medium term, our FRES programme will introduce a range of armoured vehicles designed to incorporate several new protection systems.

The Earl of Sandwich: My Lords, I wonder whether the noble Lord could clear up confusion in the media. Are we in Afghanistan as a fighting force and not there to back up the Afghan army for reconstruction?

Lord Drayson: My Lords, our troops are in Afghanistan in support of a UN-authorised mission as part of an international coalition to provide the security framework to enable a democratic government to be established in Afghanistan.

Private Finance Initiative

2.53 pm

Lord Barnett asked Her Majesty's Government:

    What plans they have to change their policy in relation to private finance initiative projects.

Lord McKenzie of Luton: My Lords, the Government's approach to PFI is set out in PFI: strengthening long-term partnerships, which was published alongside this year's Budget and can be obtained from the Treasury's website.

Lord Barnett: My Lords, I appreciate that the PFI generally has substantial benefits, but has my noble friend seen the National Audit Office and Public Accounts Committee report on the refinancing of the Norfolk and Norwich University Hospital? It said that the private consortium had made unacceptable profits and that those tasked with management were not up to the job? They were not referring to a need for yet more management consultants because management consultants were involved. Clearly, they were making recommendations that the staff concerned in such complex financial negotiations should be trained for the job. What is being done about that recommendation?

Lord McKenzie of Luton: My Lords, the Government remain committed to using PFI only when it can be demonstrated to achieve value for
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money and does not come at the expense of employee terms and conditions. I have seen the report to which my noble friend refers. We should recognise that this particular PFI was signed in 1998, early in the process. The need to ensure that we understand the lessons, particularly of refinancing, is important. Things that have changed since then include the insistence on funding competitions for senior debt as part of the process; contractual arrangements that would lead to the sharing of any refinancing gains on a 50:50 basis; the development of secondary markets in both equity investment and debt finance, which would help to drive down some of those costs in the first instance; and the use of credit guarantee finance, under which the Government's own favourable borrowing circumstances can be made available to the schemes but where their risk is dependent on the performance of the guarantor and not the PFI contractor and its performance.

Lord Forsyth of Drumlean: My Lords, I thought the whole idea of PFI was that the private sector would take the risk and provide the finance for the projects. How can it represent value for money to the taxpayer for the Government to continue to fund through PFI projects where there is no risk transfer, at a time when the Government could borrow money in the money markets at unprecedented low levels? Are we not seeing here a very high price to be borne by future taxpayers, so that the Chancellor can pretend that he is not borrowing money, although he clearly is, for the liabilities remain with the taxpayer?

Lord McKenzie of Luton: My Lords, the decision whether to adopt a PFI scheme or alternative means of procurement is based on a value-for-money exercise. It has nothing to do with the accounting treatment and whether the debt should go on the balance sheet of government. Under a PFI scheme there is transfer of risk. Some schemes will nevertheless appear on the balance sheets of government, and that basis was adopted by the previous Government as well as the current one.

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