The Minister for Defence Procurement and Industry (Maria Eagle)
I thank all those who have spoken in the debate. I congratulate the hon. Member for North Cotswolds (Sir Geoffrey Clifton-Brown) on obtaining it, very properly in Armed Forces Week, to highlight some of the issues. I will try to answer a few of his questions. I have had an interesting read of the 32nd report of his Committee; he and I used to serve together on the Committee many moons ago, so I take PAC reports very seriously.
Although it is true that there has been no equipment plan for the last two years—during which time both Governments have been in power—because of some of the disruption around the election and the wholesale reordering of the way in which the MOD works, I recognise the fact that his Committee is not satisfied with the current state of affairs, and I agree that it cannot stay how it is.
Ministers are committed to increasing transparency, and I undertake to work closely with the National Audit Office and the hon. Gentleman’s Committee to try to work out a suitable arrangement going forward that they will be happy with. We are not seeking to undercut transparency or to fail to report properly to Parliament, so I hope that will give him some reassurance. Of course, we have only just received his report; I think we have a couple of months to ensure that we reply to its recommendations properly, and I will take an interest in ensuring that we do so.
I recognise some of the figures that the hon. Gentleman mentioned in his excellent speech. He asked where all the money is coming from—one or two others have asked a similar question, with varying levels of outrage. What I can say is that in this Parliament, we have already committed an extra £5 billion this year and resources to get up to 2.5% in the core defence budget—more than £10.9 billion extra in real terms. I do not think any of the Defence Ministers have turned up at NATO today with a fully set-out plan for getting to 5% by 2035. Each country has its own way of producing budgets and will do so over different periods, and I think it is quite reasonable for us to say that during the election we had a manifesto commitment to get to 2.5%, we have set out how we are going to do that and how we will pay for it. The hon. Member for Solihull West and Shirley (Dr Shastri-Hurst) said that he regretted the way in which that commitment is being paid for, but we have made that choice—difficult though it is—in order to make it clear where the money that we have committed to in this Parliament is coming from.
We have always met our NATO commitments. That goes for parties on both sides of the House; when the Conservatives were in government, they met our NATO commitments, and we have always met them and will continue to do so. The way that our spending commitments will be funded in the next Parliament will be set out during that Parliament, but we cannot set a path directly from this Parliament into the next one. NATO will be looking at that. [Interruption.] Well, I would say to the right hon. Member for Rayleigh and Wickford (Mr Francois) that we do not budget for that length of time in the future, and neither did his party when it was in office. It is not how we do budgeting in this Parliament and it is not how his Government budgeted either.
Maria Eagle
I mean, the right hon. Gentleman has only just walked in. If he wants to start heckling me, I am happy to have a discussion with him in the Tea Room afterwards, but there is no point in him heckling me from a sedentary position when he has not taken part in the debate. [Interruption.] It is very kind of the right hon. Gentleman to allow me to continue my speech. I am trying to answer questions posed by the Chairman of the Select Committee, whose debate this is.
We know that NATO will—as it usually does—check each nation’s spending against its expectations on a yearly basis, so that will be an obvious way in which we can see progress being made towards our goal. We will also continue to report, as ever, and I have no doubt that we will get to 3% in the next Parliament and that there will be a trajectory towards 5% overall, with the 1.5% security and resilience spending. Instead of making allegations about that commitment being smoke and mirrors, it would be better for the Opposition to say that they would do the same if they were in Government. If they did so, we would have a proper consensus to give industry certainty that this is what we are committed to do as a nation. I welcome the fact that the Liberal Democrats said that they would commit themselves to that goal.
I look forward to engaging with the Chairman of the Select Committee on the recommendations in the report, and I intend to make sure he is satisfied by what we come back with. He had some particular requests about Ajax—we all know that notorious name—including when the 180 vehicles would be delivered. The initial operating capability of Ajax will be by December 2025; I am hoping it might be sooner, but as far as I am aware, that commitment is on track and at least 180 vehicles will be delivered by that time. Morpheus and the broader land environment tactical communications and information systems programme has been a troubled programme in some respects. It is a £6.5 billion, 10-year programme. It involves lots of things fitting together, as the hon. Gentleman will recall. We are trying to make sure that the programme delivers what it is supposed to deliver.
Some of the programmes we have inherited have troubled histories. That is one of the reasons why we are committed to defence reform. One of the problems with our procurement and acquisition system—this was mentioned, including by those who have perhaps experienced it in their professional life, whether in the forces or in the Department—is that it is not fit for purpose when it comes to doing things quickly and delivering what it says it will. The defence reform agenda is not about reorganising for the sake of it. That is not what we ought to be doing. Were the system in perfect order, we would not be reforming it. This reform is about ensuring that the national armaments director is accountable to Ministers and the services for delivering the equipment that the services need in a timely fashion, because that is not what happens now. Currently, each service goes off on frolics of their own. They have their equipment budgets and top-level budgets, and know what they want, and they never really talk to each other across services. As the hon. Gentleman said, a programme might get started because people think that they want the equipment, and it is a 10-year programme that is not funded right to the end, so money gets wasted. We have to do better.
One way we will do better is by having much clearer accountability. The NAD is a tremendously important figure in that. We will also make sure that we shorten our acquisition timescales. We cannot just have CADMID— concept, assessment, demonstration, manufacture, in service and disposal—for everything, with pre-contract phases and so on. We cannot do that any longer. We are not in times when we can get away with taking 10 years to produce something that is not quite what we wanted in the first place. There has been too much of that, and that is why we are segmenting our acquisition budget. The NAD will be in charge of delivering the capabilities that all our services need in much shorter timescales.
As for drones and that kind of capability, we are trying to get to contract within three months. By standing up UK Defence Innovation with a ringfenced budget of £400 million this year, and 10% of our investment budget in future, we aim to ensure that there is the money to innovate fast and get lethality into the hands of our warfighters faster. That is essential. We need to shorten the time it takes to get there, even for nuclear submarines. Members will have seen the aspiration in the SDR to get the time to contract down from an average of six years for those kinds of things to two years. That is a challenging aim.
On spiral upgrades and the new radars for our existing capabilities, we need to make sure that we get the time to contract down to a year. We need a much faster pace of innovation, change and improvement. The NAD will be responsible for that. There will be direct lines of accountability, and direct budget lines for which he is accountable. We have to ensure culture change to empower those at a lower level, so that we do not slip back into the old way of doing things. That is a challenge, but we need to meet it, given the times we are in.
Maria Eagle
The hon. Member is going to ask me about the new medium helicopter.
Adam Dance
The Minister must be a mind reader. Will she give us a timescale for when the new medium-lift helicopter contract will be awarded? I hope it will be awarded to Leonardo in my constituency.
Maria Eagle
I am not making any announcements today, but I have heard what the hon. Member said, and I want these matters dealt with more swiftly than in the past. He needs to listen out, because the announcement will come in due course.
We are undertaking this defence reform to make a real difference to acquisition and a real improvement to our procurement, to stop wasting money, and to get things into the hands of our warfighters faster. We can argue about money, as the hon. Member for South Suffolk (James Cartlidge) likes to, but we must do better with the money that we receive, because the money allocated to defence could be spent on other things—on hospitals, schools, and helping people with their needs at home.
We all accept that we have to show the public—the voters—that we are spending the money in a way that provides us with maximum value. I know that the Select Committee will help the Government to do that, and I am determined to ensure that we do it. That is what defence reform means.
James Cartlidge
The Minister mentioned money, and it is brilliant that she is engaging in that debate. I mentioned the 2.6% issue. This is very important; the pledge is for 2.6% of GDP by 2027. In written parliamentary answers, we are not being told what quantum of money will be added to the Ministry of Defence budget—namely, what the intelligence spend will be, and the spend on the Foreign Office items outside Chagos. Will the Minister tell what that quantum is, so that we know whether the MOD will really be spending 2.5% on the core defence budget?
Maria Eagle
What the hon. Gentleman said at the beginning of his speech was very simple, I must say. I understand the point that he has made, although I have not seen the answers to which he has referred, so I shall have to take his point away. I am happy to discuss it with him on another occasion, but I cannot give him an answer today.
Sir Geoffrey Clifton-Brown
I deliberately included a little bit about recruitment and retention in my speech. There will, I think, be a tension between the armaments director and the Chief of the Defence Staff over recruitment versus the budget for equipment. It is not possible to suddenly turn on the tap and recruit more people; it takes time. Can the Minister say anything today about when she will start to ramp up that recruitment?
Maria Eagle
A great deal of effort is already being made. Both the Minister for Veterans and People and the Minister for the Armed Forces are leading a number of efforts to improve recruitment and retention. As the House will know, in a “flow and stock” situation, it takes time to turn around a long-standing trend, and unfortunately the last Government did not meet the recruitment targets for the armed forces in any one of their 14 years. This is like turning around a supertanker. We have already made some reforms to try to speed up the time that it takes to recruit a young person who wants to join the forces, and that will start to show results in due course.
Maria Eagle
I am conscious that I am probably overusing my time, so I do not want to give way any more. I apologise, but there is another debate to come.
All of us in the House essentially understand the importance of increasing our defence spending in a way that is effective and gives us good value for money, so that we can boost the capacity of our armed forces to defend the nation and deter potential adversaries. I think we are all on the same page in that regard, and that is a good way for me to end my speech. I thank all Members for taking part.