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Defence Procurement

I merely point out that our defence expenditure has declined, relative to that of other nations, and that our defence expenditure as a proportion of total public expenditure has also been in decline. It has also been in decline as a proportion of gross national product, as everyone knows. I do not think that the Government made a conscious decision to do that when they were first elected, but that is what has happened, and I think that it explains why our armed forces are under such strain and why there is probably a £2 billion hole at the heart of this year’s defence budget. There will probably be a bigger hole next year, because there seem to be no proposals to fill the hole, apart from pushing programmes forward, as I shall explain. The recession has changed the public expenditure landscape, and we can no longer expect any Government to provide dramatic increases to allow the armed forces to catch up with other public services in the short or medium term. That opportunity has passed. The public finances are in crisis, and will be for years to come. Defence, like everything else, must learn to cut its cloth and live within its means. I say that as someone who has, for some years, advocated significant increases in defence spending. It is frustrating that, once again, we see that when it comes to designing fiscal stimuli to resuscitate the economy, defence is left out of the Prime Minister’s mindset. He has preached the need for more Government borrowing and spending to get us out of a debt crisis and has brought forward £3 billion of expenditure on capital projects—on everything from £30 million for play facilities for children to £300 million for road building. When I tabled a question to ask the Ministry of Defence to say what had been brought forward in defence to revive the economy, the response was:""No Ministry of Defence capital expenditure has been brought forward in response to the economic downturn."—[Official Report, 27 January 2009; Vol. 487, c. 308W.]" That sentence sadly sums up where the armed forces come on Labour’s list of priorities—and it gets worse. Not only has funding not been brought forward; it has been put back. The equipment report of last December delayed the carriers, mothballed MARS, cut Future Lynx numbers and kicked FRES into the long grass. Even the compromise reduction in tranche 3 Typhoon, as discussed earlier, is being questioned, when it could maintain skilled jobs in the north-east throughout the recession. We can expect only more cuts and more delays when the results of the latest planning rounds are finalised—if ever they are. Defence must share the pain with other public services, but why is it, we may ask, that the only time when our armed forces seem to come first is when budgetary restraint is called for? The Government’s attitude has forced the Ministry of Defence to prioritise current operations ahead of the long-term procurement of capabilities, as the national security strategy made clear. That has meant that the long-term equipment programme is increasingly unaffordable—the collective view of the Defence Select Committee. There is estimated to be a £2 billion black hole at the heart of defence budget. Everyone in the MOD, in the Cabinet, in the House and in the media knows that the Department is increasingly paralysed by the Government’s inability to deliver their stated policy on defence. I have a certain amount of sympathy for the Secretary of State, knowing, as we all do, that he comes to the House with his hands tied by the Prime Minister and the Treasury. Outside Downing Street, everyone recognises the need for a new defence review, but we all know that it cannot happen this side of the election because the Government know that a review will identify either the need for more money, more equipment and more troops, which it is now impossible to provide, or that the only realistic choices lie, at least in the short term, in what to cut from the programme. The Secretary of State is reduced to falling back on the strategic defence review mantras. I echo the point made by my hon. Friend the Member for Mid-Sussex—that the SDR is a fine piece of work, but the Government have become too complacent about it. For example, the Government said:""The SDR continues to inform our thinking; our future procurement strategies are designed around the analysis contained in it."—[Official Report, 30 October 2008; Vol. 481, c. 1071.]" The SDR was designed before Kosovo, before 9/11, before Afghanistan, before Iraq, before the Iranian nuclear programme, before we went to Helmand and before the Georgian war. There is a sense that all this has to move on, but it has not done so because the Government dare not because it would open up so many questions about what our defence policy should be. The challenge we must face is: how do we escape from the straitjacket of SDR being funded inadequately, leading to vital decisions being delayed because of costs, where Ministers argue that dwindling numbers of platforms and troops do not matter? The Department remains obsessed with the SDR idea of capability over numbers in an age when numbers of platforms and troops matter as much as capability, if not just as much as they ever did. For example, the decision to extend the life of the Type 23s by up to eight years has been made because the future surface combatant programme will be slowed on account of budgetary constraints. Ministers still claim that the first FSC is expected to enter service "around the end" of "the next decade", but it seems more likely that it will not be until the beginning of the following decade at the earliest. The Under-Secretary of State told the House at Defence questions before Easter that construction on the first FSC will begin""as soon as the second carrier has been launched"—[Official Report, 30 March 2009; Vol. 490, c. 647.]" That is unlikely to be until 2015, so HMS Daring, the first Type 45, will have taken more than six years from first metal being cut to entering service—meaning that the first FSC is not likely to enter service until at least 2021—provided there are no further delays, which seems unlikely. What is two years between friends in the Ministry of Defence, we might ask, but between 2019 and 2021 three Type 22s are due to leave service, reducing our surface fleet still further. The decision to extend the lives of the Type 23s, with no answers to parliamentary questions about the cost implications of the decision, is merely another attempt to push cost decisions to the right. It is the same story with the helicopter programme. Aware that there was a danger of the fleet being cut in half by 2020, the MOD has now announced plans to extend the lives of the Chinooks, the Pumas and the Sea King Mark 4s and 7s. Despite repeated questioning, however, Ministers—including the Under-Secretary who will reply from the Dispatch Box this evening—will not reveal how much these decisions will cost, or when the money will be made available for these life extensions. Again, decisions are shifted to the right so the financial consequences of today’s decisions will be felt only after a general election. We have already discussed the carriers, but the decision to delay them reeks of money more than any other consideration. To argue, as the Minister did, that this leaves our defence capability "unaffected"—the word he used—is simply not credible. As elsewhere, cost pressures and political expediency mean shifting the cost of delays until after the general election. It was disappointing that the Minister was unable to furnish the Defence Committee with robust figures about how much the delay to the programme would cost. We now have the figure of £600 million floating in the air, to which the Minister will neither indicate assent or dissent. He is shrugging his shoulders. We know that this is likely to be yet another bill that will land on the Secretary of State’s desk after the next general election. The MOD and the Royal Navy will not countenance cutting the carriers because they are a prestige programme, so they just delay them, but there is little indication that the Department has thought through the practical consequences of building these carriers and what sort of Navy we want to possess in the 21st century. My hon. Friend the Member for Mid-Sussex was absolutely right to question the purpose of these two 65,000 tonnes carriers. They seem to point towards ambitions for a powerful blue-water Navy, but at the same time we have seen the number of frigates and destroyers slashed and significant cuts to the number of attack submarines at a time when the Americans value most highly our minesweepers, for the capability that they can bring, rather than our larger capital ships.