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Armed Forces

My Lords, I begin by declaring an interest as an associate fellow of the Royal United Services Institute for Defence and Security Studies. I congratulate the noble and gallant Lord, Lord Inge, on initiating this debate and on his wide-ranging and erudite contribution. Of course, as a former CDS he has enormous experience in this field and is greatly respected in your Lordships’ House. Her Majesty’s Armed Forces are facing great challenges across the world with immense professionalism, courage and dedication and deserve your Lordships’ utmost support. In defending the United Kingdom and its interests and strengthening international peace and stability, the Armed Forces are truly a force for good in the world. I would argue that that is undoubtedly the case in the Balkans, Africa, Iraq and Afghanistan, where we have been engaged in rebuilding democratic states from the ashes if not of totalitarianism then at least of extremely repressive regimes. To cut and run in Iraq and Afghanistan would be a betrayal not only of the peoples concerned, millions of whom have taken part in democratic elections at great risk to themselves, but also of our Armed Forces, who have already sacrificed so much. I shall focus attention on developments in procurement policy. Our Armed Forces have undoubtedly undergone a significant transformation since the 1998 Strategic Defence Review and subsequent White Papers. A key factor has been a substantial equipment programme to reconfigure our forces underpinned by real and sustained increases in the defence budget from each spending review since 1997. Like the noble and gallant Lord, Lord Inge, in this regard, I congratulate my noble friend on the publication last year of the Defence Industrial Strategy, which he expertly crafted and which has been warmly welcomed by the defence industry. The DIS recognises the important role in the defence industry in delivering capability but also recognises that the industry must change to meet the evolving demands of our Armed Forces. The DIS outlined several important themes: the complex, technical, challenging high-value systems currently being planned will last for many years, sometimes decades. Industry must therefore change its focus from the design and build of new platforms and systems to the upgrade and support of existing and future equipment. Specifically, the DIS identifies the need to maintain onshore capability in key areas of production, security of supply and support services. The DIS has been so warmly welcomed in industry circles especially because it outlined the defence capabilities that we need to retain in the UK and how these capabilities must be sustained. It was acknowledged that the MoD and the Government needed to ensure that the UK had the ability to continue to operate our equipment in a way that maintained our technological sovereignty and to protect our national security. In that regard, I also commend my noble friend on the how he has insisted that the purchase of the JSF aircraft from the United States must be accompanied by the necessary transfer of technology. As the DIS has committed the Government to greater transparency over their future indicative spending plans, industry will be able to make important investment and restructuring decisions with greater confidence. Like the noble and gallant Lord, Lord Inge, I note the report in the Financial Times today on a possible merger between the DPA and the DLO, which in my view may herald improved co-operation and coherence in the procurement field. But obviously we shall have to wait for the announcement. Particularly important is the end to the old boom-and-bust industrial cycle and a recognition that through-life capability will depend on long-term partnering and alliances based on value-for-money solutions for the Armed Forces. Her Majesty’s Government have moved away from the predominant view of the 1980s and early 1990s that the UK’s manufacturing base did not matter and was somehow inferior to the City and the service sector. In that regard, I look forward to the contribution of the noble Lord, Lord Levene of Portsoken, on that issue, given his great experience in this field. Unbridled competition as an end in itself, with no thought for the need to maintain a strategic defence industrial base, is, mercifully, consigned to history. There need be no conflict between achieving value for money and preserving those technological skills that are vital for this country’s national security. I also welcome the Government’s recognition that, when it comes to procurement, all sides need to effectively quantify risk and reduce it by placing it where it can be managed most effectively, something not always achieved in the past. The balance of risk between supplier and customer will, it appears, be more evenly spread in the future, even if it means stopping a project before Main Gate. There has been much discussion in the press of defence procurement cost overruns, but the National Audit Office has shown, with its report on 19 major procurement programmes, that the UK has a relatively good record in what remains a challenging area. The main cause of cost overruns is the complexity of new weapons systems. An advanced fighter such as the US’s FA-22, for example, must be manufactured to exact tolerances to preserve its stealth capabilities and run by software that has millions of lines of code. Britain has done well out of defence research. A recent expert study by Andrew Middleton and Steven Bowns showed that of 10 leading nations, the UK is second only to the US on the military equipment quality curve. The UK’s defence equipment is nearly 80 per cent as good as that of the United States, which spends 10 times as much as this country does. The study also showed that if we let up and spent less on defence research, we would rapidly slip down the ranks of defence nations. The Minister has indicated that the MoD’s policy on research and technology has yet to be finessed. I hope he continues to give R&T the priority it deserves, and that he will come back to that issue when he winds up this debate. I further welcome the relaunch of the masters degree in defence administration, the MBA (Defence), to be taught jointly by the Royal Military College of Science and Cranfield University School of Management. It will help to ensure that when MoD staff engage in discussion with defence equipment suppliers, those who have gone on the course will have a better understanding of the financial, economic, marketing and operation management issues that affect the defence sector. It will also enable the MoD to achieve the best value for money for the taxpayer. At the end of the day it will be the task of the MoD and HMG to ensure that our Armed Forces have the kit they need to do the job, on time and at reasonable cost, while at the same time preserving our technological sovereignty and a viable defence manufacturing base, including a thriving aerospace and shipbuilding sector. It is a huge challenge, but one that this Government must meet head on.