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Gordon Henderson (Sittingbourne and Sheppey) (Con)
It is good to have you in the Chair for the debate this afternoon, Mr Hood, and I apologise for its wide-ranging nature. A number of Ministers have responsibility for Ministry of Defence procurement, which I know has presented something of a dilemma as to who should respond to the debate. The Under-Secretary of State for Defence, my hon. Friend the Member for Mid Worcestershire (Peter Luff), appears to have drawn the ministerial short straw, and I appreciate that he might not be able to answer fully some of the issues raised. However, if necessary, I am more than happy to receive a delayed response from his appropriate ministerial colleague.
The issues are varied but a common theme runs through them: the apparent flaw in how contracts are negotiated by the Ministry of Defence. The first such contract to mention is a memorandum of understanding signed between the British MOD and the Canadian Department of National Defence, an agreement about the British Army training unit, Suffield—BATUS for short—which is sited at the Canadian forces base at Suffield in Alberta, Canada. In case my words are taken as a criticism of the coalition Government, God forbid, or its immediate predecessor, I should point out that although the current agreement was signed in July 2006, the original one was signed way back in 1972. I have a copy of that agreement and, in all my experience in the contracts industry, I have never seen a more one-sided document. Not only does the agreement give to the Canadian Government the final say in how BATUS is operated, down to who is employed on the base and from whom and from where equipment is purchased—I will come to that aspect in a moment—but it is also my understanding that the financial split between the two Governments is such that the British pay 80% of all the costs and the Canadians 20%. Bizarrely, however, nowhere in the documents are those figures spelt out explicitly.
The effects of the agreement are plain to see by anyone who visits BATUS, as I did recently with colleagues from the armed forces parliamentary scheme. Let me give a couple of examples. Administration on the base is shared between Canada and Britain, but three or four Canadian civilians work there, compared with one Brit. That is hardly surprising if we consider that the Canadians decide who is employed but the British taxpayer picks up 80% of the bill for employing such people. On the equipment side, earlier this year the Army decided to withdraw its helicopters from Belize and wanted to transfer them for use at BATUS in support of battleground exercises. The Canadians refused and insisted that British forces at BATUS lease Canadian helicopters piloted by a Canadian civilian from a Canadian company. That is not a good use of British taxpayers’ money.
On the subject of helicopters, to save money BATUS has now stopped using helicopters as part of its battlefield training exercises, apart from in a support role. That is a false economy because the lack of proper training could put at risk members of our armed forces during any future active service in which helicopters might be needed to transport soldiers to the front line. The cost of using helicopters during annual training exercises is estimated at £100,000—a small price to pay for a soldier’s life. If the MOD wants to find that money, let me say where it can be found.
At BATUS, there is a range control building, which is used to monitor vehicles accessing and leaving the training area. It is sited at the beginning of Rattlesnake road—yes, there are rattlesnakes on the prairie, to which my colleagues and I will bear witness—but eight years ago the Canadians insisted that the building was in poor condition and needed replacing. The MOD agreed and, earlier this year, contracts were awarded for a new range control building on a site a few hundred yards from the existing building, which, surprise, surprise, will be built by a Canadian construction company, using local labour. The cost to the United Kingdom, confirmed in a letter from the MOD, will be £4 million. Setting aside that we could build a decent-sized primary school for that amount, I question the need for a new building at all. As I said, I was at BATUS with colleagues a little more than a month ago, and the old one looked fine to me. The House need not accept the judgment of a humble Back-Bench MP, however, because I can assure the House that that view is shared by the permanent British military personnel in Canada, who categorically state that they do not need the new building. I urge Ministers to look again at that unnecessary project and to pull the plug immediately. Just think how many helicopter training hours we could fund with the £4 million saved.
Craig Whittaker (Calder Valley) (Con)
I thank my hon. Friend for securing the debate. I was on the same trip to BATUS and the training facilities there are second to none—they are an incredible facility for the British Army to use, and no one for one minute is doubting that. During our recent visit to BATUS as part of the armed forces parliamentary scheme, however, we saw another example of the ludicrous bias in the memorandum of understanding. The British Army has two personnel looking after several bunkers of live ammunition, whereas the Canadians have six personnel looking after the equivalent of a tableful of ammunition, 80% of whose cost is paid for by the British taxpayer. Does my hon. Friend agree that the BATUS memorandum of understanding needs to be looked at again now, for renegotiation, rather than being ignored? My understanding from the Minister is that there are no plans at all to renegotiate the MOU.
Gordon Henderson
I thank my hon. Friend for his intervention and for reminding me of that additional scandal—which is what it is, ultimately—about an agreement that allows the Canadians to employ whomever they want with the British taxpayer paying up to 80%. I, too, urge Ministers to enter into immediate negotiations with the Canadian Government to reduce the percentage of the total operating costs of BATUS paid for by the British taxpayer. I hope they do so, and it can be done, because the memorandum of understanding is a rolling contract—there is no bar on opening negotiations at any time.
The MOD pays the Canadians £20 million a year to use the BATUS training area which is, as my hon. Friend said, a fantastic training facility, and I would certainly not want it to close. Entering into new negotiations with the Canadian Government might pose a threat because the Canadians could turn round and ask the British to leave, but I do not believe they would. It is Canada’s interest as much as ours to have that joint training facility, and I remind Ministers that it is a joint training facility for which we Brits pay 80% of the cost. In addition to the £20 million that Britain pays for use of the training area, the UK pays a proportion of the operating costs, which is around £80 million a year, so the total cost of the facility is £100 million a year. In the current economic climate, with members of the armed forces being asked to accept cuts in pension entitlement and allowances, it is surely right that the MOD makes an effort to reduce the cost of operating BATUS.
Graham Evans (Weaver Vale) (Con)
I congratulate my hon. Friend on securing this debate. I, too, was on the parliamentary scheme visit to Canada, and I could not decide whether the Canadian Government wanted the British Army at BATUS. Given what my hon. Friend has just said, would it be worth considering leaving Canada and using other areas such as Scotland and Germany? The Army of the Rhine has to return to the United Kingdom, and perhaps we could look at more cost-effective areas instead of staying in BATUS.
Gordon Henderson
My hon. Friend is right to point that out. While we were visiting BATUS, it became clear that with the number of oil wells in the 2,700 sq km of training area, which is essentially protected by the Canadian Government, there must be tremendous pressure on them from the oil companies to encourage the British Army to leave BATUS. That is a risk, as I pointed out, but my hon. Friend is right in suggesting that other options are open to the British Government, not only in Scotland and Germany, but perhaps with expansion of the training area in Kenya, which colleagues may visit in the new year.
My personal view is that nothing that we can provide in this country is suitable for armoured warfare and tank manoeuvres. That is a problem with Scotland, although it could provide good training facilities. Germany is an option, but Kenya would pose a risk because of what might happen if there were a change of regime to an unfriendly Government and we had to leave. At least Canada is a long-standing ally and, I hope, a long-standing future ally.
I do not want BATUS to leave Canada, but in the present economic climate the Canadian Government will recognise that the British Government must do something to reduce costs, and I ask the MOD to start those negotiations. If we could negotiate a more equitable 60:40 split, which would be a reasonable split for a shared facility, that would save British taxpayers at least £20 million a year, and probably more. A more equitable cost share would encourage the Canadians to be more cost conscious when considering whom they employ, how many people they employ, and how they operate. That should be considered.
Good negotiation is the key, and there is the rub. I simply have no faith that some other procurements negotiated by the MOD provide the best possible deal for British taxpayers or, perhaps more importantly, the armed forces personnel who must live with the consequences of those contracts.
Mr Mark Spencer (Sherwood) (Con)
I congratulate my hon. Friend on securing this debate. Does he agree that the MOD’s focus should be on value for money, rather than price? A contractor in my constituency, F.J. Bamkin, made high-quality socks for the MOD, but lost the contract to a company providing a much cheaper but inferior product. If the focus was on value for money, rather than just price, we might be more successful.
Gordon Henderson
I thank my hon. Friend for his intervention. He is right, and I will come to that when referring to a contractor in my constituency whose situation reflects, in a slightly different way, the difficulties facing suppliers. I hope that he will bear with me.
I have no faith in the MOD securing a good deal for taxpayers, and I will highlight as an example a couple of contracts, the negotiation of which can best be described as nonsensical. I recently visited the 2nd Royal Tank Regiment at its Tidworth camp in Hampshire. I toured the armoured vehicle repair shop and noticed that one of the lifting ramps was cordoned off. When I asked why, I was told that the ramp had been out of order for a couple of weeks, and that although the on-site mechanics could repair it, as would be expected from REME personnel, they were not allowed to because the contract for the equipment required outside contractors to be called in, and the regiment was having trouble getting those contractors in. The bureaucracy involved in applying for the contractors to do the work was not only taking up a lot of time, but was a lot of work. That is idiotic.
While at Tidworth, I saw another example of idiocy. The problem, which is only a small one, is in the sergeants’ mess, but I have no reason to think that this is not replicated in all messes throughout the armed forces. The range of beers on offer is limited to brands determined by the private company that runs those messes, and if that is not bad enough for beer drinkers, the corporals are even worse off, because the contract does not recognise that corporals have a mess. It recognises only officers’ messes and sergeants’ messes. The corporals must pay almost double the price for beer as sergeants. In the grand scheme of things this is a small issue, but such small niggling issues chip away at the morale of our service personnel, yet they are so easy to resolve with the right contracts and the right negotiation.
I turn now to a specific procurement problem that affected a company in my constituency. The company wanted to bid for MOD work, but the tender document was drafted in such a way that compliance was impossible for any company except the existing supplier. The products that my constituents wanted met all the relevant quality and safety standards, and all the tender conditions except one. The tender document required proof of field trials carried out in Desert Storm warfare conditions. That condition could, of course, be met only by the company that supplied the equipment during that conflict. My constituent was not best pleased and, understandably, believes that the tender document was written not by the MOD, but by the supplier of the original equipment. I am slightly more charitable, and inclined to believe that the MOD staff who drafted the tender document simply did not consider the ramifications of what they were writing, and what the consequences would be.
I want to finish with a confession. I know something about MOD negotiators, because I worked for 15 years as a senior contracts officer for GEC Marconi Avionics. I spent my time running rings round MOD staff while negotiating various defence contracts. That is the problem and the solution all in one. The MOD needs people with a sound commercial background, the desire to get as good a deal for the taxpayer as they would if they were still working for a private company, and a financial incentive if they succeed.
Stephen Gilbert (St Austell and Newquay) (LD)
I congratulate my hon. Friend on securing this debate. He has put his finger on the crux of the matter with his ability to run rings around procurement staff at the MOD. Is part of the problem the fact that procurement staff in the Ministry rotate, and would a more professional, stable procurement service go some way to solving the problems that he has outlined so eloquently?
Gordon Henderson
I welcome that intervention. My hon. Friend is right because that is half the problem. However, my experience of running rings around staff during negotiations does not apply only to MOD staff; I have also negotiated with staff from the Department of Defence in America and with Canadian defence staff and they are all the same. They are civil servants who have no interest or background in commercial matters. They are negotiating with taxpayers’ money, which does not come out of their pockets or affect their profits. They have no incentive.
Karen Lumley (Redditch) (Con)
I thank my hon. Friend for securing this debate and for sharing his vast experience. I know that the taxpayer needs value for money, but does my hon. Friend also accept that we need to use Great British companies, such as Mettis Aerospace in my constituency which employs over 500 people?
Gordon Henderson
I accept everything that my hon. Friend says. It is vital to bring more professionalism into procurement. I do not want this debate to be only about kicking the MOD. I suspect that procurement systems across Government are absolute rubbish, and today’s debate highlights a deeply flawed system that we must try to do something about.
Jeremy Corbyn (Islington North) (Lab)
I am sorry that I was not present at the start of the debate and I will be brief because other colleagues wish to speak. I want to introduce a wider issue of defence procurement and I hope that the Minister will respond to my contribution. The issue concerns the large amounts of money that are being spent in advance of a parliamentary decision on the replacement of Britain’s nuclear weapon system. The Minister is smiling but I am not sure why—perhaps it is out of desperation at the amount of money flowing out of his Department and into the hands of contractors as we speak.
I would like the Minister to answer a number of questions about the costs of replacing our nuclear weapon system. The main gate decision on the Trident replacement is not due before the House until 2016. Out-turn prices were estimated in the initial gate report to be £25 billion for the replacement of the submarine, and costs for the successor system, including the warhead and infrastructure development, were between £30 billion and £32 billion. So far, £900 million has been spent on planning and replacement, and £3 billion is due to be spent on detailed design before 2016. The rest will be spent after the main gate decision in 2016.
A number of serious questions must be raised. This is not a discussion on foreign policy and we are not debating nuclear negotiations. Nevertheless, when we are faced with a massive deficit, and people in every community in the country are being told to make savings, why is the Ministry of Defence calmly ploughing ahead to get rid of £100 billion of public money on a nuclear missile system that many of us believe to be illegal, unnecessary and dangerous? All the money being spent is going into the pockets of various contractors around the world and not being put to any socially useful purpose.
Whatever choice is reached in 2016, major elements of the vessels will already have been ordered before Parliament has had a chance to debate the issue. That includes £380 million spent on the first submarine, £145 million on the second and £6 million on the third —those are the submarine costs alone. I hope that the MOD will be more open about what that expenditure is for and why it is necessary to make it ahead of any parliamentary decision. I was told by a Minister in another debate that such actions are the normal way of doing things in the Ministry of Defence, and that it does things on a sort of custom and practice basis. If it is custom and practice for the MOD to spend such sums of money without parliamentary approval, I suggest that that custom and practice needs to stop. There should be specific parliamentary approval for each element of expenditure, but that has not happened in this case.
Further spending is taking place at Atomic Weapons Establishment Aldermaston and Burghfield, and the full cost of project Pegasus—the proposed new facility for manufacturing enriched uranium components for nuclear warheads and reactor fuel for nuclear-powered submarines—was priced at £747 million when it received initial approval in 2007. I would be grateful if the Minister confirmed whether that figure is correct. If it is not, will he give the Chamber an accurate figure and state how much more money is expected to be spent on project Pegasus at AWE Aldermaston and Burghfield?
The relationship between the MOD and defence contractors is interesting. Poachers who join the side of the gamekeeper are obviously extraordinarily welcome, and the hon. Member for Sittingbourne and Sheppey (Gordon Henderson) brought a particular expertise to the debate. He seemed, however, to underline an issue that needs questioning concerning the close relationship between the MOD, defence contractors and the defence industry, and the large amounts of money being spent. Parliament exists to control what the Government do. MPs exist to represent their constituents and hold the Executive to account, and there are serious questions about the decision-making process surrounding the replacement of Trident, the purpose of Trident, and the vast expenses that are being undertaken without any parliamentary approval.
Nick Smith (Blaenau Gwent) (Lab)
I congratulate the hon. Member for Sittingbourne and Sheppey (Gordon Henderson) on securing this debate and I want to pick up the point about contracts and transparency in Government expenditure. The strategic defence and security review will lead to the renegotiation of many contracts, and that may lead to some savings or perhaps to an increase in costs. So far, the MOD has failed to provide the Public Accounts Committee, the parliamentary body that looks at value for money in defence spending—
Mr Jim Hood (in the Chair)
Order. Interventions should not be speeches. I ask the hon. Gentleman to be brief.
Nick Smith
Thank you, Mr Hood. Does my hon. Friend agree that transparency is vital in cases such as that under discussion, so that Parliament can scrutinise expensive defence procurement issues?
Jeremy Corbyn
Absolutely. Parliament must scrutinise such expenditure. One of the greatest weaknesses of the British parliamentary system relates to its ability to scrutinise expenditure. We do not traditionally do line-by-line budget voting in this country, and although the Public Accounts Committee does a good job, it can look into only one theme or area of expenditure at a time. Perhaps we need tougher scrutiny, particularly where the Ministry of Defence is concerned and given the levels of expenditure being discussed.
I have two final points. Some colleagues present today represent constituencies that have embarked—or are likely to embark—on the manufacture and development of submarines and nuclear warheads, and some represent constituencies that have a big defence interest. I do not have a big defence interest in my constituency but I understand what the position of my colleagues may be. However, there are enormous skills in the defence industry in this country. We make planes, ships and all kinds of things very well, and we have a highly skilled work force. How much better would it be to have a longer-term trajectory for using those skills to make other things such as socially useful products that will develop, sustain and support people, rather than weapons of war or, in the case of nuclear weapons and submarines, weapons of mass destruction that can only kill large numbers of civilians?
Concerns have been raised that the cost of the Trident replacement programme puts significant stresses on the rest of the Ministry of Defence budget. I hear complaints from many people throughout the armed services that they are experiencing various shortages at present. All hon. Members in the Chamber will be able to relate to that. None of those shortages will be met while we continue with the massive expenditure on nuclear weapons and the preparation for replacing the submarines and missiles.
A document entitled “Looking into the Black Hole” by the Royal United Services Institute states:
“The largest, and politically most difficult, procurement programme over the next two decades will be the construction of a successor to the Trident nuclear deterrent submarines. The MoD is due to spend £7 billion over the decade to 2020 on the initial concept, design and development phases of this project, equivalent to around 11 per cent of the new equipment budget over the decade from 2011/12 to 2020/21. But the bulk of spending on the successor submarines, total costs of which are projected at £25 billion, is due to occur during the decade after 2020/21. The Main Gate decision, which gives permission for the Demonstration and Manufacture phase to begin, is due to be made in 2016. If this schedule remains, spending on the successor programme will rise sharply, probably reaching a peak of around 30 per cent of the new equipment budget by 2021/22 or 2022/23, when the first-of-class begins production. It is likely to remain close to this level until after the planned delivery of the first submarine”.
We are on a trajectory to spend a great deal of money before Parliament has even made the decision. I could write now the speech for the Secretary of State, whoever it will be, in 2016—“We’ve spent so much, done so much and made such preparations. Let’s spend another £60 billion on this project.” Why can we not have that debate, discussion and decision now, rather than leaving it for another five years, until 2016, when all this money will have been spent?
Dr Julian Lewis (New Forest East) (Con)
I do not know whether you care to cast your mind back to May 1997, Mr Hood, but you drew the short straw of being the hon. Member who had to respond to my maiden speech. That speech was about nuclear weapons—Trident—and I fear that this one will be on the same subject. Indeed, I suspect that it will not be the last one that you or other hon. Members hear from me on the subject. I sometimes think that I should go into a sort of partnership with the hon. Member for Islington North (Jeremy Corbyn). We have debated this subject many times over the years. He never changes his tune, and I never change mine, but the debate remains live. It relates to procurement, in addition to strategy and the ethics or otherwise of nuclear deterrence, because of course the procurement process for Trident has been much disrupted.
The hon. Gentleman made great play of the fact that Parliament has not yet had the debate. Well, excuse me, I think that Parliament did have a debate. If I remember correctly, it was in the spring of 2007, and both the Labour party and the Conservative party were wholly in favour of the next generation of Trident being constructed. I recall the then Leader of the Opposition—now the Prime Minister—to whose speech I had contributed, passing me an Order Paper on which he had inscribed the words “Julian gets his way”. Sadly, of course, there’s many a slip between cup and lip or, indeed, between a vote in Parliament and the deployment of a successor generation. The slip concerned came in the failure of the Conservative party to win an overall majority at the last general election. That ought not to have been a problem for the procurement process for Trident, given that the Labour party had gone into the election pledged to renew the nuclear deterrent and so had the Conservative party. Only the Liberal Democrats were opposed to that.
Jeremy Corbyn
I know that the hon. Gentleman loves the fact that the Conservatives are in a coalition Government with the Liberal Democrats—it is what gets him out of bed every morning and into work—but in his discussions with his Liberal Democrat colleagues, has he reached any conclusion about whether they do or do not want a nuclear missile or whether they want a different type of nuclear missile in the review that apparently is being undertaken?
Dr Lewis
I have to say to the hon. Gentleman—I am tempted to say “my hon. Friend”—that the Liberal Democrats really differ from both of us, because he knows where he stands on nuclear weapons and I know where I stand, but the Liberal Democrats stand firmly with a foot in both camps. They know that they do not want Trident, but they do not want to put themselves in his camp by telling the truth, which is that the majority of their activists are one-sided nuclear disarmers and do not want a strategic nuclear deterrent at all. Therefore, they come up with this fiction that it is possible to have a viable strategic nuclear deterrent with an alternative system to Trident.
That ought to have made no headway at all when the coalition was formed. The reason for that was that I and all the other Conservative Members of Parliament, who were being addressed by the Prime Minister-to-be at a meeting in Committee Room 14, were told what the terms of the coalition agreement would be, or some of the basic outlines of the terms. We were told that we would have to accept certain things that the Liberal Democrats wanted that we did not want, such as a referendum on the alternative vote, but that the Liberals would have to accept things that we wanted that they did not want, such as the renewal of Trident—that was the very example chosen. I remember my friend and colleague the future Chancellor of the Exchequer looking up at that moment, catching my eye—because at the time I was still the party spokesman on the Royal Navy and the nuclear deterrent—and nodding vigorously in confirmation of what the leader of the party had said. You can imagine, Mr Hood, my surprise and dismay—
Mr Gregory Campbell (East Londonderry) (DUP)
On the issue of discussions and debate, does the lesson of someone nodding vigorously in agreement with a position, only for that subsequently to be replaced by a cold, hard dose of reality, ring a bell in relation to other issues?
Dr Lewis
There is always the possibility that people will change their mind when they see different circumstances, but I genuinely feel that that has not applied in this case as a result of what I was about to explain and what hon. Members will remember. Out of the blue, even though the procurement of a replacement and successor system for Trident had specifically been excluded from the terms of the security and defence review, on the day when the statement was made, publishing the review and presenting it to Parliament, we were told that the main gate decision, the contracts for Trident would be put off until after the next election. With the greatest respect to the hon. Member for East Londonderry (Mr Campbell), there was no doubt at all that that had nothing to do with hard facts or realities creeping in, and everything to do with politics, as the letter subsequently sent out from the president of the Liberal Democrats, crowing in triumph at the delay of the Trident decision, made clear.
I must not wander too far from the procurement emphasis of this debate. Therefore, I would like to put a specific question to my hon. Friend the Defence Minister with responsibility for procurement issues. It relates to the study that is being done about alternative systems to Trident as a possible nuclear deterrent. That is being done as a gift, a present, a political offering to the Liberal Democrats in the coalition, and I believe that the study is being carried out by the Cabinet Office rather than the Ministry of Defence, although the Ministry of Defence is supplying the material to the Cabinet Office.
I have to say to the Minister that any halfway competent assessment team, facing the problem of examining the existing and the potential systems for carrying a nuclear deterrent in the future, could do a comprehensive study over a period of probably not more than two or three months and arguably over a few weeks, on the basis of the accumulated knowledge of half a century that we have in the business of strategic nuclear deterrence. I would therefore like to know what progress such a study is making or whether it will in fact be spun out until the next general election. The reality is that there is no alternative to Trident for the next generation of the strategic nuclear deterrent, and I suspect that my political opponents in the CND ranks would agree.
Alison Seabeck (Plymouth, Moor View) (Lab)
Just as an aside, does the hon. Gentleman have any concerns that the study was one of the documents put in the waste paper bin in the park?
Dr Lewis
I do not mind so much when unclassified documents are thrown away, but I do mind when this country’s basic protection is thrown away. I really do not want to see another hung Parliament, with both major parties having gone into an election proclaiming their commitment to the next generation of the nuclear deterrent, only for a small third party that is adamantly opposed to that deterrent, but which does not have the guts to wear its unilateralism openly, to blackmail the leaders of those two parties in turn, saying, “You get rid of this weapons system and we will make you Prime Minister.”
Stephen Gilbert
I feel loth to interrupt my hon. Friend as he expands on how a small but effective team can punch above its weight in the coalition, because he is doing a splendid job. Does he not see, however, that the threat facing the United Kingdom has changed hugely over the 20 or 30 years since the end of the cold war? Does he not agree, therefore, that it is right and proper to examine whether we need to change our plans in response to that changing environment?
Mr Jim Hood (in the Chair)
Order. We are now moving from a procurement debate into a pro-nuclear or anti-nuclear debate.
Mr Jim Hood (in the Chair)
Order. I would much prefer you to carry on with your very interesting speech.
Dr Lewis
Thank you very much. I would simply say that punching above one’s weight and getting a result that reverses the mandate of the two large parties are very different things.
The question is what happens in the procurement process for a weapons system that Parliament has already voted in principle to bring into existence. The hon. Member for Islington North says Parliament should debate and vote on the issues again and again at every stage of the procurement process. As the Minister will confirm, however, procurement does not work that way; there are certain set stages in the procurement of a weapons system at which Parliament may have its say and at which contracts must be signed. The fact is that the contract in this case has been put off until after the election, and the result is that the entire procurement project has been put in jeopardy.
The systems we are worried about—whether nuclear systems or aircraft carriers—will be built over a fairly long period, but they will be in service over a very long period. The lifespan of the new super-carriers will be 50 years, and that of the next generation of the nuclear deterrent will be about 30 or 35 years. Therefore—I would not dream of returning to our earlier debate—the circumstances that have changed in the world over the past 15, 20 or 25 years might well change again over the next 15, 20, 30, 40 or 50 years. That is why we have armies, navies and air forces in times of peace, when there is no apparent threat on the horizon, and why we need systems such as the nuclear deterrent—to prevent us from being taken by surprise.
I must draw my remarks to a conclusion, as others will not have time to speak otherwise. However, I would not like today to pass without paying tribute to my right hon. Friend the Member for North Somerset (Dr Fox), the former Secretary of State for Defence, and wishing him all the best. I served under him and three previous shadow Secretaries of State, and I know that defence specialists across the parties are bound by a common world view and a common realisation that decisions taken in the defence portfolio, above all others, will determine whether the people of this country remain safe and whether our forces, when they go into action, sustain great casualties or emerge triumphant, bearing few, if any, casualties. The responsibility for those issues is fearsome. My right hon. Friend had a passionate belief in the importance of the Anglo-American alliance and of procuring a future generation of the nuclear deterrent, and I trust that his successor will be equally committed.
Finally, I welcome the hon. Member for Plymouth, Moor View (Alison Seabeck) to her responsibilities. Like many members of Labour defence teams in the past, she takes defence seriously and works on a non-partisan basis when she can.
Mr Jim Hood (in the Chair)
Order. Before I call the next speaker, I should say that we may well be comfortable for time. I intend to call the Front-Bench spokesmen at 3.40 at the latest, and I have two hon. Members on my list of speakers.
John Woodcock (Barrow and Furness) (Lab/Co-op)
It is a pleasure to speak under your chairmanship, Mr Hood. It is also a pleasure to follow the hon. Member for New Forest East (Dr Lewis). My remarks will follow on neatly from his, as his did from those of my hon. Friend the Member for Islington North (Jeremy Corbyn)—those who speak in debates on the deterrent are a kind of a parliamentary tag team. This is not the first time we have seen that, and I am sure that it will not be the last.
John Woodcock
Yes, that is quite possibly true, and I may say something about the fundamental importance of this debate for Opposition Members later.
I want to talk about the successor deterrent in the context of procurement and the critical issue of sovereign capability. Defence procurement is different from so much Government procurement in other Departments, because of the importance of Britain retaining capability in certain key strategic areas. Submarine capability must remain one of those, and British submarines defending British shores must continue to be built in Britain. It is a happy fact that the only place in Britain that can build them is in my constituency, and what an incredible engineering feat is achieved there.
It is important that procurement is undertaken in the most effective way. Gaps in construction could spell disaster for our capability to build submarines. Hon. Members will think back to the early 1990s, when the previous Conservative Government left a gap between finishing the Vanguard class submarines and starting the Astute class submarines. Ministers say—I welcome this, and we need to hold them to it—that they have learned from those mistakes and from the experience of how difficult it was to restart our capability in Barrow. In fact, the problems and cost overruns experienced with the new Astute class submarines came in large part from the fact that the people building them were learning their craft anew.
Given the constraints of sovereign capability and the fact that only one place in Britain will retain the skills to build submarines, it is critical that the Government do whatever it takes to ensure that the taxpayer gets value for money and that the country’s security is upheld. Conservative Members were hot on that in opposition, when they repeatedly pointed out the cost to taxpayers of delaying important procurement projects and of shifting timetables to the right. It therefore greatly concerned me that when they took office, they delayed the proposed in-service date for the successor deterrent submarines from 2024 to 2028, which necessitated a re-baselining of the Astute class submarines at an increased per boat cost to taxpayers and created the need for a costly refit of the Vanguard class submarines. In an answer to me on 8 November 2010, at column 5, the former Defence Secretary, the right hon. Member for North Somerset (Dr Fox), put the cost between £1.2 billion and £1.4 billion, which is the cost of refuelling alone aside from any other cost incurred in keeping the submarines going.
Apart from the increased cost, the changed in-service date has potentially stretched the safe life of the current Vanguard class submarine to its limit. Experts in the Navy, Barrow shipyard and the Government say that with the increased cost of the refit they think they can keep the Vanguard class submarines in service for the projected time, but their life will be stretched to the limit, and any further delay could compromise safety and radically increase the cost. I hope that the Minister will comment on that. It is important that we keep the project to time, but it has slipped in the past, and if it slips further, given that he has increased the risk to the project, what will happen?
I hope that the Minister will make it clear whether the new Defence Secretary intends to look at the issue afresh, and, if so, what that is likely to entail. Will he ring-fence the budget for Trident from the defence main budget, which has already been mentioned in the debate? Will he make clear the overall extra cost to the taxpayer from the political deal between the coalition factions, which the hon. Member for New Forest East has expanded on at length? That deal subjugated what was in the best interest of British taxpayers on procurement and the defence of the realm to political expediency in this Parliament.
Nick Smith
I take my hon. Friend’s point about timing, which is perfectly made, but the alteration to requirements is also important. In the strategic defence and security review the Government, as we have seen, changed their mind about what planes would travel on the new aircraft carrier, which has pumped up the cost by billions.
John Woodcock
My hon. Friend has extended my point. Because of the limitations that have necessarily been put on defence procurement for very good reasons, Ministers have an increased responsibility to make the right decisions. The hon. Member for Sittingbourne and Sheppey (Gordon Henderson), whom I congratulate on obtaining the debate, expanded at length on other areas of difficulty, and I hope that the Minister will deal with those points, particularly the most important issue of all for our defence—the ultimate deterrent that the UK maintains.
Caroline Dinenage (Gosport) (Con)
I congratulate my hon. Friend the Member for Sittingbourne and Sheppey (Gordon Henderson) on securing the debate, which he promised would be wide-ranging, as it has certainly proved. I want to make passing reference to some of his points about the waste of public money in various previous defence procurement contracts, which is particularly galling given how hard we are now sweating our military assets, working people and equipment to deliver incredible value for money. It is galling, too, because, representing a military constituency, I receive letters from wives in military families saying, for example, that their husband is about to be deployed for a second eight-month term with only a 10-week break, and will be away for a second consecutive Christmas. That puts incredible pressure on families, so it seems very wrong to throw money away thoughtlessly on ill-devised and badly thought-out procurement contracts.
I want, however, to talk about another matter, and that is the vagaries of a defence procurement process which puts obstacles in the way of good, efficiently run British companies—particularly small or medium-sized enterprises—winning contracts, creating jobs and earning the money to help the country grow out of its economic hardship. I know that the Government have always recognised the strategic and economic importance of the defence sector. I have six significant defence companies based in my constituency, so I have become increasingly aware in the past 18 months of the challenges that the industry faces. In the light of the forthcoming White Paper on defence and security equipment, support and technology, I urge the Ministry of Defence to deal with three areas of concern to the companies in my constituency: support for SMEs, greater long-term planning and a strategy for successful outsourcing to industry.
I have spoken before in the Chamber about the great importance of SMEs in all sectors. They are truly the lifeblood of the defence industry. In my constituency, SMEs such as Vector Aerospace represent vital links in the supply chain that allow our headline companies to succeed, and to be world beaters. Britain boasts more SMEs in its defence industry than France, Germany, Spain and Italy combined, and we must recognise and nurture those unique assets.
I welcomed the acknowledgement in the December 2010 Green Paper that SMEs are a vital source of innovation and flexibility. I now urge the Government to address the enduring challenges that SMEs face, as unreliable or slow acquisition processes continue to place unmanageable burdens on their cash flows. Requirements such as the framework agreement for technical support listing have also been highlighted by small contractors in my constituency as prohibitive to SMEs supplying the Ministry of Defence.
The forthcoming White Paper must deliver comprehensive support, through the procurement processes and supply chain management, for our SMEs, so that they can continue to be the pride of the British defence industry. Across all tiers, our defence companies provide jobs for more than 300,000 people and add £12 billion to the UK economy, but, despite the importance of that, the Government are right to prioritise the needs of our armed forces and the taxpayer above industry. We must always be clear that we are not in the business of artificial job creation through public sector procurement. However, the companies whose representatives I have spoken to in my constituency and beyond are not demanding protectionism. They want, for the taxpayer and for industry, an environment that delivers the best value for Government and appropriate support for British companies.
Jeremy Corbyn
In the hon. Lady’s dealings with local companies, which undoubtedly have very high skill levels, has there been any discussion or consideration of contracts outside defence, and in other areas, using those transferable skills?
Caroline Dinenage
Many do that, and many work in the defence of other countries outside the UK, but Vector Aerospace does repairs and servicing for many of the helicopters—Chinook, Sea King and Lynx—and the mainstay of its work is for the British military.
The White Paper must tackle two procurement challenges that have frequently hampered both industry and cost-cutting efforts. First, we must ensure that through-life capability management is fully considered in the procurement process. In many respects, the MOD is right to prioritise buying off-the-shelf products at the best value, but with acquisition representing only 15% to 20% of the lifetime cost of a programme, there can be significant cost implications to excessively short-term thinking. That has been all too apparent in the case of the Carson rotor blades purchased under an urgent operational requirement for helicopters in Afghanistan, which lacked a repair contract and so had to be ordered as new each time one broke. That is absurd and highly expensive, and we must seek to avoid that in future through greater scope in the procurement process for long-term thinking.
Secondly, the White Paper must ensure that the limited resources of the MOD are put to the best use through successful partnerships with industry. Representatives from Vector Aerospace, which I have already mentioned, have noted that the outsourcing of functions carried out by service personnel or civil servants can deliver significant savings to the taxpayer while continuing to support British industry. They have had incredible results by sending their own personnel to Afghanistan to service and repair Chinook helicopters. Their performance has always been described as exceptional.
We need to ensure that long-term thinking is built into our procurement process. I look with great anticipation to the publication of the forthcoming White Paper, and urge the Government to ensure that it sustains the strategic and economic importance of our defence industry through delivering a supportive and considered procurement environment.
Alison Seabeck (Plymouth, Moor View) (Lab)
It is always a pleasure to serve with you in the Chair, Mr Hood. This is my first opportunity to speak as shadow Minister since the Minister’s warm welcome last week at Defence Question Time. Looking back through Hansard, it is a little surprising that this is the first Westminster Hall debate on procurement since the last election, with the exception of two half-hour debates. I therefore warmly congratulate the hon. Member for Sittingbourne and Sheppey (Gordon Henderson) on securing this debate. He certainly ranged widely, as promised, and highlighted the broad scope and reach of the Ministry of Defence in procurement. There are major challenges in balancing defence equipment needs while ensuring value for money and retaining the essential skills base to support sovereign capability.
I know that I am not the only MP in the Chamber who has a sizeable defence community in their constituency. Before the last election, my constituency was called Plymouth Devonport, which included Her Majesty’s naval base at Devonport. Thanks to the Boundary Commission, it looks like it might be coming back at the next general election, but we shall see. For me and many hon. Members, providing the right equipment to our troops when they need it, so that they can carry out the work for which they have been trained to the best of their ability, is of upmost importance. A number of hon. Members in the Chamber and I have constituencies filled with military personnel and their families, and I often pick up concerns on the doorstep. I should say at this point that I am delighted to have 29 Commando back in Plymouth, safe and sound. It is right and proper to debate the issues here today.
I listened with interest to the speech made by the hon. Member for Sittingbourne and Sheppey and particularly to his reference to the British Army training unit, Suffield, based in Alberta on the Canadian prairies. It is worth noting that the reason why the British Army started to use that training site was due to the loss of El Adem and Tobruk in Libya when a certain Colonel Gaddafi came to power. The hon. Gentleman’s point about the need for bases in secure venues is absolutely right. Suffield was used briefly during world war two, and since 1972 it has been used as a British Army training base, initially on a 10-year lease. The agreement has been repeatedly renewed, which the hon. Gentleman touched on. I believe that a rolling programme of indefinite use is being offered. I note his comments and questions regarding that area. Other hon. Members also quite rightly challenged whether money was being best spent by the MOD on upgrading the premises there. I will listen with interest to the Minister’s answers to those questions.
The hon. Member for Sittingbourne and Sheppey also touched on morale and beer prices, and he raised a genuine concern about how new companies break into the MOD marketplace, to which I will come later in my speech.
My hon. Friend the Member for Barrow and Furness (John Woodcock) flagged up some potential problems, such as the need to secure the skills agenda and the loss of historic capability in Barrow, which is a lesson that we cannot forget. He also spoke about the implications of delays for contracts and cost overruns that follow.
The hon. Member for St Austell and Newquay (Stephen Gilbert), in supporting concerns about the rotation of staff in procurement, raised a challenging issue. That did not used to be the case, because officers used to be retained within certain specialties, and a number of senior and ex-members of the armed forces have spoken to me on exactly that issue in the past. I hope that the Minister will respond to that, because that area deserves consideration.
My hon. Friend the Member for Islington North (Jeremy Corbyn) asked a series of serious questions about Trident replacement and whether it is needed. He has always campaigned on that issue with a great deal of commitment. Again, I want to hear what the Minister has to say about the time scale and transparency regarding Trident.
My hon. Friend the Member for Blaenau Gwent (Nick Smith) raised the issues of contracts and transparency and of the cost of the over-specification of projects.
The hon. Member for New Forest East (Dr Lewis) is on the flip side of the coin from my hon. Friend the Member for Islington North. He described, with benefit of his long-standing interest and knowledge in defence matters, some of the problems regarding procurement and politicians’ role in muddying the waters, if I am to be gentle about what is going on in the coalition regarding Trident.
Dr Julian Lewis
Because there has been such candour on Government Benches about muddied waters, for the sake of clarity, will the hon. Lady take the opportunity to reaffirm her party’s firm commitment that Trident should be renewed and replaced by the successor system?
Alison Seabeck
The hon. Gentleman and I both stood on manifesto pledges that said exactly that. I also thank him for his kind comments in welcoming me to my new role.
I would like to look more generally to the future of defence procurement. It would be remiss of me not to thank my predecessor in this role, my hon. Friend the Member for Barnsley East (Michael Dugher), for his work alongside that of my right hon. Friend the Member for East Renfrewshire (Mr Murphy) in taking forward Labour’s review on defence procurement—not least in commissioning the report from Admiral Lord West, Bill Thomas from Hewlett Packard and Tony Roulstone from Rolls-Royce Nuclear. I thank them for their incredibly detailed and thought-provoking report, which builds on the work carried out under the previous Government by Bernard Gray, who has been brought in by this Government as the new Chief of Defence Matériel.
In response to questions last week, the Minister told me that he had read the report, although from our exchange last Monday, I think that there might be some differences in interpretation. However, I believe that we need, on the back of the report and Lord Levene’s excellent work, to look at structural reforms and at how, despite repeated attempts by successive Governments, we have failed to tackle overpriced and overrun projects. The Public Accounts Committee and the National Audit Office have clear views and some pretty sharp criticism on that. The Gray report did not mince its words either when talking about overheating in the equipment programme and the inability of the system to flesh out the real cost of equipment at an early stage.
We need to have a defence procurement policy that works with an active industrial policy—one that promotes defence exports, an area in which we in Britain excel and should continue to do so. The hon. Member for Sherwood (Mr Spencer), who is no longer in his seat, pointed that out. While value for money is clearly important, so is the quality of the product supplied to our armed forces, and British products are among the best. More than 21% of the global market in the past five years was met by British production, and we are the largest exporter to the European Union. Also, there is evidence that competition in the export market leads to an enhanced drive for innovation and improvement in those companies, from which the MOD could benefit. The make or buy proposals in the report submitted to the shadow defence team—it is good reading—deserve some further consideration. We all agree that we need a sustainable defence industrial base that can continue to deliver in the long term. Will the Minister let us have his thoughts on the proposal in the Gray report for a 10-year rolling budget, which does not seem to have found full favour with the current Government?
The hon. Member for Gosport (Caroline Dinenage) was absolutely right to say that small and medium-sized enterprises need a degree of long-term certainty when it comes to supporting programmes, particularly bigger programmes. My hon. Friend the Member for Islington North rightly mentioned the need for diversification of industry. It is all to the good if companies can diversify and find other markets, but there are a number of firms, of which I have several in my constituency, that are incredibly specialised in what they do. They provide bespoke products for defence purposes and it is difficult for them to expand, change or move on from what they do.
I welcome the Minister’s thoughts on all those issues. Will he tell us what sort of relationship he has with his colleagues in the Department for Business, Innovation and Skills and what the feelings are about the need to join up procurement policy, which is such an important element in all this?
Finally, is the Minister happy that, for future procurement policy, there is a clear enough delineation between the absolute sovereign capability and the deployment sovereign capability? Is that something that will be made clear in the expected White Paper? Given the ever-changing nature of conflict, the need for greater co-operation between nations, the drive to secure British business opportunities in this field and the economic challenges that we face, we need to ensure that Governments now and in the future have in place the best systems through which to deliver equipment that is designed to enable the front-line soldier to survive, operate and fight. We also need the best technology and back-up for our armed forces, so that they can deliver force wherever and whenever it is required. I look forward to the new White Paper, because there is a real opportunity to make a difference in this particular sphere of MOD procurement.
The Parliamentary Under-Secretary of State for Defence (Peter Luff)
I join the hon. Member for Plymouth, Moor View (Alison Seabeck) in welcoming you to the Chair, Mr Hood. I am grateful for the opportunity to serve under your excellent chairmanship. We have been on various defence expeditions together and have enjoyed them greatly, and it is good to be here today.
I agree with what the hon. Lady said about the paucity of defence debates, and of defence procurement debates in particular. I commented on that fact about two or three weeks ago in the Department, and since then there have been two Adjournment debates, so we sometimes get what we wish for. Let us hope that there are more such debates, because it is very good for hon. Members to discuss these issues.
I congratulate my hon. Friend the Member for Sittingbourne and Sheppey (Gordon Henderson) on securing this important debate, which, according to my script, relates to a number of interesting and pertinent issues. I will go further in saying that there is a bewildering range of interesting and pertinent issues that cover everything from the price of beer in messes to the nuclear deterrent. The underlying philosophy behind defence procurement is underneath all that. I may not be able to do justice to all the remarks that have been made during this debate, but I will do my best.
Reflecting on what my hon. Friend the Member for Gosport (Caroline Dinenage) said in her contribution, I pay tribute to all those who serve in our armed forces. Their courage and bravery enable the Government to fulfil their first and primary duty of providing security for our country. That duty remains ever more challenging given the complex nature of the threats that we face in the 21st century. Although, procurement—or acquisition as it is called these days—is an important part of that, it is simply a means to the end of helping those brave men and women serve their country, as they are doing right now as we speak, in two theatres.
The hon. Member for Blaenau Gwent (Nick Smith) mentioned the strategic defence and security review, which sets out a coherent path to delivering adaptable and flexible armed forces. It is crucial that we put in place the right technologies, skills and industrial capability to deliver that outcome. I do not recognise his description of the lack of scrutiny of MOD contracts. If anything, we suffer from an excess of scrutiny. The Public Accounts Committee and the National Audit Office do an excellent job. We will soon have the next NAO report on major projects to consider, too.
Nick Smith
I made that remark because an NAO report mentioned the weakness of the Government’s feedback on that particular topic.
Peter Luff
It does not feel like that from this side of the fence. I look forward to the conclusions of the PAC on the forthcoming NAO report.
I accept that we need to be clear about how we plan to acquire and support our equipment for the armed forces, which is a point that my hon. Friend the Member for Gosport mentioned. The support costs are typically about two thirds of the total acquisition cost, with one third being the initial acquisition. We also need to be clear about how we invest in technology to sustain the skills of the defence industry, which is something that the hon. Member for Islington North (Jeremy Corbyn) raised. That was about the only thing that I agreed with in his speech.
The scale of what we spend is huge; the total spend for the whole range of procurements in the financial year 2009-10 was £20.6 billion. It is right that hon. Members should be concerned about how we spend that money. It is also right that we should say that much of that is spent very well, very wisely and very effectively by skilled and talented people. It is inevitable that we concentrate on the problems, because that is the nature of Parliament and holding the Government to account is what we do. None the less, I pay tribute to all those who do their jobs remarkably well, whether they are in the armed services, the civil service, the MOD Abbey Wood or the organisation Defence Equipment and Support. They all do a great job serving our nation.
It is true that we face some difficult decisions. I will not score any partisan points by talking about our economic inheritance, and especially the inheritance for Defence Ministers, from the previous Government. In a characteristically thoughtful and articulate speech, my hon. Friend the Member for New Forest East (Dr Lewis) spoke about the need for fixed points in programmes for decisions. As he said, such a measure is important given the long period over which such decisions are felt. As I am frequently reminded, the last captain of the aircraft carriers that we are currently building is probably not even born yet, which puts into context the length of time we have.
I think that I can give the hon. Member for Plymouth, Moor View the assurance that she sought about the 10-year equipment programme. As I understand it, we now have a groundbreaking deal with the Treasury, which enables us to plan with much greater certainty the future of defence equipment and support in general.
I also want to pick up something that my hon. Friend the Member for New Forest East said about the previous Secretary of State, my right hon. Friend the Member for North Somerset (Dr Fox). The MOD is now set on a path of real recovery, real hope and real confidence thanks to his excellent work. It now falls to the ministerial team to continue that work as a tribute to his sterling leadership as Secretary of State.
I will concentrate my remarks on the speech of my hon. Friend the Member for Sittingbourne and Sheppey, because I owe him that courtesy. If I cannot deal with everyone else’s comments, I apologise and will write to them. I will not comment on individual cases, but I reassure my hon. Friend that the support that we give to SMEs has a high priority in my portfolio. I pay tribute to Vector Aerospace, which is one of the few companies that have been named in this debate. It is an outstanding example of a medium-sized company.
We are making a few changes that should help the SMEs considerably. We are reducing the threshold at which the MOD advertises contract opportunities and have created the new defence suppliers forum, which meets regularly under my chairmanship, to discuss how SMEs can make a better contribution to defence and how we can help them achieve that. We are learning a lot from that group’s work. We are launching a new Government-wide contracts finder that offers a free-to-access one-stop shop of public sector opportunities over £10,000. There will be more in the White Paper, the publication of which I too look forward to very much indeed. I cannot say too much about its contents but it will include a definition of value for money—something that many Members have mentioned—and talk more about outsourcing. Although there is already extensive outsourcing in defence—more extensive that many people realise—I agree that there is scope for more. The White Paper will also address the framework agreement on technical services and through-life costing, which is essential.
I am happy to reassure the hon. Member for Plymouth, Moor View that our relationship with BIS is excellent and that there is nothing between us. I know that she would expect me to say that, but it happens to be true as well.
The White Paper will also define sovereignty requirements. I do not foresee any change in the definition that was published in the Green Paper last year.
I will now specifically address the remarks of my hon. Friend the Member for Sittingbourne and Sheppey. I note that he worked for GEC Marconi, where he apparently ran rings around our officials. That issue is why Bernard Gray is working at present on the new matériel strategy. One of the principal purposes of that strategy is to ensure that we have the skills in place in Defence Equipment and Support to make sure that these procurement decisions are taken well and that the contracts are well negotiated. My hon. Friend has made a powerful point, and that work is ongoing. I hope that submissions to Ministers will come before the end of the year. And watch this space, because I agree that it is important that we do procurement and acquisition well, which has not always been the case. In the spirit of consensus, I think that the Opposition’s document on acquisition is not at all bad. In my view, all it lacked was an apology, but that is another matter for another day.
Turning to Canada, I am pleased that my hon. Friend and other hon. Members obviously had such an interesting visit to the British Army training unit Suffield—BATUS—over the summer with the armed forces parliamentary scheme. That is a great scheme, which works very well under Sir Neil Thorne’s excellent leadership. I have benefited from it twice with the Royal Navy— I am a “postgraduate” according to the scheme’s definitions. Today has shown how valuable the scheme is in enabling Members to speak with authority about the armed services and to challenge Ministers on things that they find. It is what the scheme is there for, and we need to make even better use of it than we do already.
I slightly disagree with my hon. Friend’s emphasis and what I think was the spirit of his remarks when it comes to Canada. Led by my right hon. and hon. Friends in the Foreign and Commonwealth Office, Her Majesty’s Government are looking to develop even closer ties with Canada, as well as with other Commonwealth countries. A joint declaration of closer working between the UK and Canada has been drawn up by the FCO for signature by the two Prime Ministers, with a desire to seek
“greater interoperability between our defence forces and deepen co-operation on procurement and capabilities, to be enabled in part by a Memorandum of Understanding - MoU - on Defence Materiel Cooperation”,
and so on and so on and so on. The document was signed on 22 September by the two Prime Ministers, and it symbolises the very close relationship that we enjoy with the Canadians.
I will now talk about BATUS in more detail. As my hon. Friend the Member for Sittingbourne and Sheppey reminded us, it was set up in Canada in 1972. The location was chosen for its ability to provide the large-scale manoeuvre exercises that at the time—the middle of the cold war—were seen as being critical to meeting the UK’s operational and tactical requirements. BATUS provides 2,690 sq km of rolling, semi-arid prairie, delivering training on a scale that is unparalleled by anything available in the UK and enabling more than 11,000 troops to be trained each year. I want to place on record our real gratitude to the Canadians, who have been our utterly reliable allies in providing this world-class training location since 1972, which allows us to train in a way that is just not possible in the UK. The training at BATUS has been essential for the preparation of our troops for operational deployments, and we owe the Canadians a great debt for the part that they have played in enabling the training to happen.
Alison Seabeck
I want to ask the Minister a simple question: do BATUS and the recent new agreement give scope for any increased use of BATUS, as the German side starts to scale back?
Peter Luff
The hon. Lady not unexpectedly anticipates remarks that I will make in a few moments. I will turn to that issue then, if I may.
I will now address the concerns of my hon. Friend the Member for Sittingbourne and Sheppey about the costs involved with BATUS. The BATIC—British Armed Forces’ Training in Canada—agreement makes clear provision for the cost-sharing of goods and services relating to UK training in Canada, including the provision of all goods, services and facilities supplied in Canada or procured through Canadian sources. The costs are shared in accordance with agreed formulae, which my hon. Friend talked about in his speech, and those arrangements are scrutinised carefully. In addition, the memorandum of understanding is open-ended and may be renegotiated—that will give my hon. Friend some encouragement—at any time with the mutual consent of both parties.
In my view, the UK quite rightly pays the lion’s share of the costs of BATUS, on the basis that we use the facility significantly more than the Canadians. That is absolutely right and proper, and I have no problem with the cost-share involved in these arrangements. I agree that there is always scope to reduce costs, but other locations, as suggested by some hon. Members during this debate, are simply not equivalent and they would incur costs of their own, including significant set-up costs. So I am sure that the scope for savings is always there, but it may be more limited than my hon. Friend imagines.
Gordon Henderson
I accept what my hon. Friend says about the useful nature of BATUS. Nevertheless, does he not accept that it is wrong for the British taxpayer to have to pay such a high proportion of the costs without the MOD having a greater say in how those costs are accrued?
Peter Luff
I will look at some of the specific points that my hon. Friend made during his remarks, but I must say that I am broadly content with the overall structure of this arrangement, which delivers great value to British taxpayers and great opportunities for British armed forces, while strengthening and deepening our relationship with an important ally.
I must also say specifically that there has been no cancellation of helicopter training in BATUS. It is true that there are some different arrangements with contractors, including changes to some of the transport arrangements, but the training facilities involving helicopters have not been affected in any way. It is very important that that is understood.
Gordon Henderson
I am not sure whether we MPs were misled during our visit to BATUS, or whether the information has not yet filtered back to London, but I assure the Minister that there are two aspects of helicopter use during battleground operations: one is the use of helicopters to help injured people during the exercise, which is still being maintained and which involves BATUS using Canadian pilots; the other aspect, which has been cancelled, is the training that allows helicopters to be used to take troops into battle, as they would be used during a real battle operation. That second part of the training is the part that has been cancelled.
Peter Luff
I will clarify exactly what the arrangements are in a letter to my hon. Friend, so that there is no misunderstanding at all, but my information is that no aspect of our training arrangements has been affected by the new arrangements for helicopters.
Turning to the range control building at BATUS, it is true that there is an existing building, which provides the safety and co-ordination function required. It controls access and oversees safe practice on the range area, which is extremely important where live ammunition and weapons are concerned. Of course, it also controls movement around the prairie during live firing. In 2003, the Canadian Government approached the MOD with a number of infrastructure requirements that they felt needed to be addressed to enable the future use of the BATUS facility, including improvements to the range control building. I agree that the decision to upgrade that facility may not have been the UK’s first priority, but the facility was in very poor condition and met neither UK nor Canadian building regulations. A number of options were considered and the only viable option was to construct a new building. The contract for that was awarded in February this year, so I am afraid that the possibility of cancellation is no longer one that we can countenance.
I promised the hon. Member for Plymouth, Moor View that I would talk about future training in BATUS, which relates to what other colleagues have said. I will simply say that BATUS is 2,690 sq km compared with Salisbury plain’s 375 sq km, so BATUS is about eight or nine times the size of Salisbury plain. We must assess BATUS in the context of our overall training requirement, both in terms of the capacity and the nature of environments in which we need to train. We must also ensure that we end up with an overall solution that is the most cost-effective mix.
There is more work to be done before we can draw any conclusions, but what is certain for BATUS, any other training area and indeed for defence as a whole is that we need to drive out any unnecessary cost and to prioritise ruthlessly between what is “essential” as opposed to what is “highly desirable” or just “desirable”. I know that our Canadian partners will support us, so any work that looks at BATUS will be a truly collaborative effort. Not only does the memorandum of understanding require that collaboration, but Canada is one of our closest and most valued allies, and our interests are closely aligned. So, to answer the hon. Lady’s question, work is being done in this area.
I will briefly address the tank-lifting ramps at Tidworth. In view of the time that I have left to speak, I will not give my hon. Friend the Member for Sittingbourne and Sheppey all the remarks that I have here. It is true that the Royal Electrical and Mechanical Engineers could fix the ramps; it is also true that there are some issues around the contract; and I will look at that matter and write to him about it, because he has a point. I assure him that there has been absolutely no impact on operational capability. It is an important point, but he need not be concerned about the preparation of our armed forces or the health and safety of personnel using the site.
I now turn to the very important issue that my hon. Friend raised, which is drink—beer. The three-mess system is very much at the heart of the military ethos. Junior ranks’ messes are private sector enterprises, because all bar stocks are purchased by the contractor and the messes are wholly commercial ventures. In the officers’ messes and senior non-commissioned officers’ messes, bar stock is purchased by the mess and paid for through mess members’ subscriptions. Any profit is returned directly to the mess and lower prices can be set. I agree that there is a distinction there, but I am told that the three-mess system goes to the heart of military traditions and ethos. It is not a matter of contract—it is a matter of armed forces’ choice—and this politician is not going to interfere in the traditions of the armed services. However, I have been assured that military front-line commands keep this matter under constant review, so I understand my hon. Friend’s concern.
In the minute that I have left, I will address nuclear missile systems. I smiled when the hon. Member for Islington North got to his feet, because I could see the other “usual suspects” in Westminster Hall and I knew what would happen. Actually, I think that the hon. Gentleman’s concerns have largely been addressed. The long-lead items for HMS Victory were bought 15 years ahead of the construction of the ship, and the oak for the ship was laid down accordingly. Long-lead items are an established part of military procurement, and they always will be. I do not think we need to make any apology for that.
I heard what my hon. Friend the Member for New Forest East said, and he is right to keep us to our pledge. I assure him that the main gate decision being delayed until 2016 brings certain advantages, in that there will be a more mature design by then for us to approve. However, I hope he will hold us to the fire on an important capability that guarantees our freedom, as he so rightly reminded the Chamber. I also heard what the hon. Member for Barrow and Furness (John Woodcock) said. He and I have often talked about this issue, and I will correspond with him about some of the specific points that he made.
Finally, as for the aircraft carriers, it is true that we are getting a more capable and stable carrier variant than the previous Government decided to have, and it is also true that that has a cost. However, at least we are buying increased capability for an additional sum, because the previous Government delayed the carriers for a year, which cost £1.6 billion, and just got them a year late.