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Defence Procurement

Minehunters, I beg your pardon, Mr. Deputy Speaker. The Royal Navy is facing in two directions and there is a real danger that our pretensions for it will not match our capabilities to deliver it. If the carrier programme is to go ahead—I very much hope it does—we must build a Navy fit to go with it. If we cannot afford to do this or do not want to play such a role on the world stage, the £4 billion would be better spent elsewhere and we will finish up getting out of blue-water naval capability. I cannot believe that that would be the right decision, but that is the nature of the decisions that we face on the current budget. Decisions of that type need to be faced in a defence review that must take account of the short and medium-term fiscal crisis from which defence will not be immune, however much ring-fencing we call for in our speeches. How should we configure the armed forces for the type of country that we wish to be in the medium and long term, despite the pressures that we face in the short term? We must ask ourselves whether we really want to continue to play a global role—I echo the comments made by my hon. Friend the Member for Mid-Sussex. In the past 10 years, we have punched above our weight, but we have come close to exhaustion in doing so. We must decide whether we wish to slim down, cutting back on the carriers, JSF, the full complement of attack submarines, tranche 3 of Typhoon, FRES, future Lynx and FSC or whether our national interest demands that we maintain a global role, in which case the review must lay out a pathway to and the real costs of achieving armed forces capable of sustaining such a global role, in both Professor Strachan’s present war and the future war. In the long term, that means a bigger Army, more helicopters, more strategic and tactical lift, and a blue-water royal naval fleet. For too long, we have sought to play a global role but without being willing to pay for it. In the short term, even our current expenditure plans are unaffordable, leaving aside any ambition to expand. In the long term, recent research by Decision Analysis Services suggests that by 2028 the defence budget would need to be around £88 billion at current prices to achieve the current equipment programme, but, given trend spending growth of merely 2 per cent., it will be under £50 billion by that date. We cannot put off this choice any longer: either we play a global role and pay for it, or we do not, and we take the savings and risks that come with such a decision. I am convinced that we must maintain our global role, in which case the defence review must nurse us through the current crisis in the public finances. The current procurement budget is around £5.5 billion and the next defence review will have to go through it with a fine-toothed comb. The Government have been frightened to cut programmes, but a new Government must have the courage to break the logjam and provide the MOD with some clear direction. That is bound to be extremely tough. Can the Trident upgrade be delayed? The hon. Member for Dunfermline and West Fife (Willie Rennie), who speaks for the Liberal Democrats, is asking a perfectly legitimate question. I am not minded to agree with him, but he is entering into a debate that we need to open up and discuss more than we have so far. Although most of our costs for the Astute submarine have already been met, would it be possible or practical to slow down or delay the construction of boats 5, 6 and 7? Astute is an essential component of a blue-water Royal Navy. Few navies would dare to put to sea knowing that the British, the Russians, the Americans or the French were operating submarines in their area. That is a powerful capability to have. Could we compromise it in the short to medium term to make ends meet? Delays, however, are unlikely to be enough on their own. Some projects may have to be cut entirely. Could we abandon tranche 3 of Typhoon? Would it be worth the savings? Is there any point fighting the Treasury to keep the A400M? Again as my hon. Friend the Member for Mid-Sussex said, are we likely to be operating in any substantial theatre where heavy lift is not available from one of our allies? Airbus—aware of the technical problems and delays that have hit that programme—has admitted that the programme may collapse. Its chief executive told Der Spiegel last month:""It is better to put an end to the horror than have horror without end"." I wonder what the Under-Secretary of State for Defence, the hon. Member for Grantham and Stamford (Mr. Davies), who has responsibility for defence procurement, might say about that. Up until the end of the last financial year, the MOD had spent £564 million on that programme, but the main expenditure is not due until 2011-12, and by putting the programme out of its misery we could save around £2 billion, much of which could be diverted to proven models such as the Globemaster or C-130J. Furthermore, 25 C-130Js could be purchased for around £1.1 billion, which would save the MOD around £900 million, assuming that we do not have to wait too long or have missed our place in the queue.