Defence Supplementary Estimate 2021-22

Chris Evans Excerpts

Wednesday 9th March 2022 Commons Chamber

[Chris Evans (Islwyn) (Lab/Co-op)]

I thank the right hon. Member for Rayleigh and Wickford (Mr Francois) for raising that point of order. If anything proves the heartlessness of Vladimir Putin, it is that news. I join the Prime Minister, as I am sure everyone in the House does, in condemning that action.

I begin by thanking my right hon. Friend the Member for Warley (John Spellar) for opening this timely debate. Like him, I wish the Chair of the Defence Committee a speedy recovery from his minor operation. In this debate we have also witnessed the unique sight of my right hon. Friend the Member for North Durham (Mr Jones) finally finding some common ground with the hon. Member for Plymouth, Moor View (Johnny Mercer)—those of us who know both of them will know that that is an amazing sight. Both spoke of how spending decisions affect the morale of our troops.

The management of MOD spending, our equipment and the numbers of our armed forces are always important, but in the current international climate there is no room for mis-steps. The Government must respond to the threats to the UK and to European security that a Russian invasion in Europe poses. Just as Labour reassessed defence spending after the 9/11 attack on the twin towers, we expect the Government to bring forward a budget boost when the Chancellor comes to the House in exactly two weeks’ time.

Other European allies have already made this move. In the light of Russia’s invasion, Germany has announced an increase in its defence spending, including a €100 billion fund to upgrade its armed forces. Denmark also announced at the beginning of the week that it will significantly increase its defence budget. I welcome these announcements. European countries have been quick to respond to Russia’s actions, recognising that they threaten the security of Europe. As my right hon. Friend the Member for Warley mentioned, Germany’s recent decisions have reversed defence and foreign policy positions that have been held for decades. Chancellor Olaf Scholz has described Russia’s invasion of Ukraine as

“a turning point in the history of our continent”

and made it clear that, in order to ensure the freedom and democracy of Europe, an increase in defence spending is needed.

I want to be clear that if the Government act to increase defence spending in the next Budget, they will have Labour’s full support in doing so.

[Mr Baron]

I was in the House when the shadow Secretary of State made that announcement during the Defence Secretary’s statement earlier today. If we are to move the dial on defence spending, we need the support of both sides of the House. Can the hon. Gentleman confirm that when the official Opposition ask for that increase in defence spending, it will not be just a one-off? It has to match our interests’ requirements, but it has to be sustainable.

[Chris Evans]

I think the hon. Gentleman has just written my speech for me. If he will allow me, I will develop that argument further.

Any increase in defence spending would benefit the UK economy. If done well, taxpayers’ money can be spent in a way that enables more apprenticeships, the growth of small and medium-sized enterprises, and for the UK to be a world leader in design, innovation and engineering. However, mismanagement and delays of contracts, or contracts being awarded to foreign companies, will damage the UK defence sector. Unfortunately at present, public money is not being used in a way that brings the most benefit to the UK. Without steady investment and supply of contracts, British shipyards, British aerospace and, ultimately, British jobs will suffer.

When I speak with industry representatives, they tell me they want fairness, not favours; all they ask for is a level playing field. UK bids are competing in a race to the bottom with international companies that enjoy state backing. The feast and famine cycles of defence contracts leave British companies unable to prepare, or to sustain investment in apprenticeships and jobs over a long period of time. If these companies suffer, we lose our domestic defence manufacturing sector.

Labour supports the UK defence industry, which is why we believe in a “British built by default” approach to defence procurement. Our shipyards and our steel industry are national assets, and we need to see a clear plan from the Government on how we enhance these capabilities.

Concerns have been raised by the National Audit Office, the Defence Committee and the Public Accounts Committee about the running of the MOD. Now more than ever, at a time when European security is most under threat, Ministers must ensure that the deep-rooted problems in the MOD are urgently addressed. As the NAO suggests, the Government’s new equipment plan still fails to ensure that our armed forces will get all the equipment they need. Sadly, value for money for the British taxpayer is not being guaranteed. Then, of course, there is the Ajax-shaped hole at the heart of the British Army’s future, which I am sure we will hear more about in the coming days.

In 2020, Labour welcomed the Government’s extra £16.5 billion investment in defence spending, with more scope for high-tech research and development, but the Government’s plan only papers over the cracks in the MOD’s budget. Too much of that new money will be swallowed up by the MOD’s budget black hole. The National Audit Office also states that too little has been done to reform the MOD’s controls in order to deliver this plan on time and on budget. There is also no plan to deal with massive MOD waste, despite at least £13 billion of taxpayers’ money being wasted through MOD mismanagement or misjudgment since 2010, with £4 billion wasted in the past couple of years alone while the present Defence Secretary has been in post. Unfortunately, it all points to the conclusion that the MOD is a uniquely failing Department.

If wasted expenditure had been avoided or reduced, funding would have been available to strengthen the UK’s armed forces. There would have been no need for the cuts to troops, planes, ships and equipment forced by financial pressures. For example, in last year’s integrated review, the Government cut main battle tank numbers by a third. Restoring the Challenger fleet to full strength would cost an estimated £430 million, equivalent to the money wasted by the MOD.

[Jeremy Quin]

As ever, I am listening closely to the hon. Gentleman’s remarks, and we believe the £4 billion figure is wholly spurious. I seem to recall that, when we cut assets, the document called it waste, and when we invested in assets, that was also waste. It is a very odd document.

[Chris Evans]

I am very pleased and quite proud that the Minister has looked into that document so well—it shows his due diligence. However, many of the figures in the waste dossier he refers to came from the National Audit Office’s figures. I was a member of the Public Accounts Committee for five years, and sat through many of those uncomfortable hearings with Defence civil servants. It is not just land capabilities that have suffered: last year’s defence Command Paper announced that the entire fleet of Hercules aircraft would be scrapped. At a cost of about £150 million per aircraft, the fleet of 14 would have cost £2.1 billion, comparable to the amount of money that the MOD has wasted on write-offs since 2010.

I am sure Government Members will ask, “What would Labour do differently?” In Government, we would commission the NAO to conduct an across-the-board audit of MOD waste. We would also make the MOD the first Department subject to our proposed office of value for money, with a tough regime on spending decisions. The Public Accounts Committee concluded last year that the MOD’s procurement system is “broken” and “repeatedly wasting taxpayers’ money”—those are the independent Public Accounts Committee’s words, not mine. With any spending announcement on defence, a similar announcement must be made outlining the methods for tackling waste.

As the Minister refers to, Labour’s dossier on waste in the MOD between 2010 and 2021 found 67 officially confirmed cases of waste, the cost of which could have been reduced by better management. All defence projects carry a degree of financial waste, but the level of waste in the MOD goes far beyond this. Some examples that Labour has uncovered are simply embarrassing, such as £64 million wasted on admin errors. When waste on this scale is occurring alongside cuts to our armed forces and cancellations of, or reductions to, armed vehicle projects, Ministers must ensure the chronic mismanagement within the MOD is immediately addressed. Can the Minister guarantee that our troops will get the right kit when and where they need it, and does he accept that defence spending plans are forcing further cuts to our personnel?

Given the threat that Europe now faces from Vladimir Putin’s aggressive regime, it is clear we must do all we can to halt the cuts to our armed forces. Now is the time to reassess our defence spending. We must ensure that our armed forces have the equipment they need, when they need it. We must build a strong defence industry and use public money effectively. We must respond to the new threats in Europe. Labour stands ready to support an increase in defence spending, support our NATO allies, and—above all—support the brave men and women who are serving in our armed forces.