---

Strategic Defence and Security Review

It is an honour to speak after so many fantastic maiden speeches, in particular those of my hon. Friends the Members for Castle Point (Rebecca Harris), for Winchester (Mr Brine), and for South East Cornwall (Sheryll Murray). I congratulate my hon. Friend the Member for Winchester on his wedding anniversary. Mine is tomorrow, so I know the feeling of being away from family down here in London. It is also an honour to follow my hon. Friend the Member for Beckenham (Bob Stewart), who spoke with such passion and authority on the necessity of ensuring the resilience of our front-line units in Afghanistan. It is well known that the percentage of gross domestic product that we spend on defence is at historic lows. However, as a result of our equally historic deficit, it is now likely to fall even lower. I was a soldier, and I do not want that, but I am a realist on the state of Government finances, so I recognise that the Ministry of Defence must take its share of the pain. I am hopeful that if that is done through the prism of a comprehensive strategic defence and security review, we can ensure a sustainable balance between resources and requirements. The SDSR cannot be conducted independently of a thorough review of the defence-industrial strategy. A quarter of our defence budget is spent on equipment and services, and our current approach to acquisition is, at best, a mixed bag. The urgent operational requirement system allows for a valuable degree of flexibility and provides a way into the procurement system for our strong phalanx of small and medium-sized defence companies, but in too many cases, the core programme level is a disaster. At this stage, I must take issue with the hon. Member for Alyn and Deeside (Mark Tami) and my hon. Friend the Member for Filton and Bradley Stoke (Jack Lopresti), who praised the A400M aircraft. They said that it was a fantastic aircraft with which we should be delighted to be involved. I do not doubt that the aircraft that finally results from the programme will be a fine aircraft, but the acquisition process that has got us to this point is an example of how not to procure an aircraft. It is more than three years late and almost £10 billion over budget, and arguably, it is now considerably over-specced for the initial requirements. Earlier, my hon. Friend the Member for Portsmouth North (Penny Mordaunt), in her maiden speech, noted that the United Kingdom has not exported a naval vessel since the 1970s. Type 45 destroyers were originally supposed to cost something like £280 million each, but they now cost more than £1 billion each. Is it any wonder, given the gold-plating that happens in our procurement process, that we end up with bits of kit that are simply too expensive to export? It cost the previous Government £100 million simply to avoid making a decision on the future rapid effect system for a year. The frictional costs at Abbey Wood have been estimated at some £0.5 billion a year. That would pay for a brigade of soldiers. I am a strong supporter of the UK defence industry. It is a UK good news story, employing some 300,000 people and representing 10% of UK manufacturing jobs, and these are high-quality jobs—they are high-tech, high-value added jobs. The industry turnover is some £35 billion, of which 22% is from exports. However, the question must be asked whether the current acquisition process is designed to support our armed forces or our defence industry. It is supposed to do both; it is in danger of doing neither. I am old fashioned: I believe that the defence budget is there to equip and train our armed forces, and to support them in performing their duties at home and abroad. The defence budget is not there to support industry—there are other Departments with that remit. I am not even convinced that the defence industrial strategy as it currently operates is good for our defence industry. We have some of the most successful high-tech, highly skilled companies in the world—companies that are hampered, not helped, by the MOD's constant gold-plating and moving of the goalposts. The MOD too often limits the industry's export potential by specifying equipment that is simply too expensive and too specialised for the export market. I am not arguing for scrapping the defence industrial strategy or for abandoning partnering between the MOD and industry, but anybody who thinks that the current acquisition programme is working is deluding themselves.