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CSR and Aircraft Carriers

Volume 463: debated on Wednesday 25 July 2007

I am pleased to inform the House that the Ministry of Defence has agreed with Her Majesty’s Treasury a comprehensive spending review settlement for the next three years. The total departmental expenditure limit for Defence over the CSR period will be £34 billion in 2008-09, £35.3 billion in 2009-10 and £36.9 billion in 2010-11. That is an additional £7.7 billion for defence by 2011, and a 1.5 per cent. average annual real terms increase against our CSR baseline, excluding the costs of operations that are met from the reserves and the time-limited defence modernisation fund. The Treasury will, of course, continue to fund from the reserves the additional cost of operations over and above the defence budget, having already provided some £6.6 billion from the reserves to support the front line since 2001.

The settlement continues the longest period of sustained real growth in planned defence spending since the 1980s; that is evidence of the Government’s commitment to defence and to the men and women who serve with the utmost bravery in our armed forces.

The result of Labour’s consistent funding for defence is that the defence budget will be significantly higher in real terms than the budget that we inherited in 1997—on average, a billion pounds more for defence every year, for 10 years. Compare this with the last five years of the Tory Government, when the defence budget was being cut by around £500 million a year.

Our priority remains success on current operations. This settlement gives the MOD the financial certainty required to continue delivering that success. Over the past year I have been able to announce to the House important enhancements in protected vehicles, in helicopters and in surveillance. The settlement will enable us to do more in all these areas and others. It also allows for additional investment in the support that our service personnel deserve, building on recent improvements in pay, in the new tax-free operational bonus, in medical care for our wounded personnel and in accommodation.

At the same time as ensuring success on current operations, and support for our people, this settlement enables us to invest in the capabilities that we will need for the future. I am pleased to be able to confirm today that we will place orders for two 65,000 tonne aircraft carriers to provide our front-line forces with the modern, world-class capabilities that they will need over the coming decades. These will be named HMS Queen Elizabeth and HMS Prince of Wales. They are expected to enter service in 2014 and 2016, respectively.

This delivers on the Government’s promise in the 1998 strategic defence review. The carriers represent a step change in our capability, enabling us to deliver increased strategic effect and influence around the world at a time and place of our choosing. They will be a key component of the improved expeditionary capabilities that we need to confront the diverse range of threats in today’s security environment. They are evidence of our commitment to ensuring that our armed forces are modern, versatile and equipped for the future.

In parallel, we will continue to work closely with France. Our co-operation has already yielded real benefits. We have shared the costs of developing the common baseline design to which we are committing today and we have capitalised on our huge collective technical and military experience. Our industries are exploring further opportunities for mutual benefit, including joint procurements of equipment for the carriers, and shared support arrangements. We look forward to making a joint announcement on further co-operation in the next few months.

The carrier programme will sustain and create some 10,000 jobs across the UK, but we have always been clear that the carriers cannot be built without change in the maritime sector. As we set out in the defence industrial strategy, we need further improvements in efficiency to ensure that the taxpayer is getting value for money. We need to ensure that the UK maritime industry is the right size and shape, so that it is sustainable in the longer term, so I am pleased that VT Group and BAE Systems intend to form a joint venture in naval shipbuilding and support.

The creation of such a joint venture will enable the Royal Navy to work with industry to deliver the infrastructure that the Navy will need to support the fleet in the future while retaining all three of our existing naval bases at Portsmouth, Devonport and Faslane. This will be good news for the three communities and the service, civilian and contractor personnel employed at the bases. None the less, some reductions in the 17,600 personnel currently employed will be necessary and will be taken forward in consultation with trade unions in the usual way. We aim to rationalise infrastructure and spare capacity, streamline processes and build on partnering and other commercial arrangements. For example, today we are also announcing a £1 billion partnering arrangement with Rolls-Royce for the in-service support of the nuclear steam raising plant that powers the Royal Navy’s submarines over the next decade.

I am determined to ensure that more of our money is spent where it is really needed, reducing overheads to put more into the front line and into supporting our people. To enhance the spending power that this settlement gives us, we will make savings against the Department’s overheads, including a 5 per cent. year-on-year saving in our administrative overhead over the next three years and a 25 per cent. reduction in our head office. These are additional to the £2.8 billion efficiencies delivered over the spending review 2004 period.

A priority through the CSR period will be the continued investment in improving accommodation for our people and their families. We expect to spend some £550 million on this over the three-year period, including plans to upgrade over 18,000 barrack-type bed spaces. This builds upon the achievements of recent years in providing upgrades to our service families homes and our plans to spend £5 billion over the next 10 years on upgrading and maintaining accommodation. We also intend to explore with the Treasury and the Department for Communities and Local Government how best we can support the wish of many servicemen and women to own their own homes.

Full details of the CSR settlement for defence will be announced in the autumn, alongside the outcome for all Government Departments. Today, however, I am providing a summary for the Library of the House.

Our armed forces are admired and respected world wide. I am conscious that with operations in both Iraq and Afghanistan, we are currently asking our armed forces to do a lot. In return we must ensure that the Government do all they can to support them and their families. This significant additional investment shows that the Government are determined to do just that, and to ensure that in the years ahead they maintain their well-earned and much deserved reputation for being the best armed forces in the world.

I am grateful to the Secretary of State for his statement and for prior sight of it.

There has been widespread support on both sides of the House for both the carrier programme and the joint strike fighter, and I am pleased that we finally have the decision that we have been promised since February 2004. Indeed, the carriers have been in planning and design for twice the length of the second world war.

Although it is welcome, let us not forget that the decision has come at a high price for the Navy. Since 1997 the Royal Navy has faced significant cuts in force levels completely at odds with the Government’s strategic defence review, which called for 32 surface combatants. Does the Secretary of State agree with the Minister with responsibility for security that

“we need 30 destroyers and frigates for what the government wants us to do”?

Will the right hon. Gentleman guarantee today that we will see no further reductions in the surface fleet from its current inadequate numbers?

If we are to have the new carriers, they will need adequate protection. The Government initially assessed the need for eight of the new Type 45 destroyers. Will the Secretary of State guarantee today that all eight will be procured? If we are to have the carriers, they will need to carry the appropriate aircraft. Can he tell us how many F35s it is currently intended to have on each of the carriers, and how many helicopters will complement that number? I presume that the Government know what they want to have on their carriers.

It is disappointing that the carriers will enter service at least two years later than expected. Can the Secretary of State guarantee that any co-operation with France in order to reduce costs will not result in a further delay for the carriers’ introduction? If we are to have the carriers, they will have to be based somewhere. What does today’s statement tell us about the Government’s longer-term plans for our naval bases? Where will the carriers be based? If he can be so specific about job cuts, can he be more specific about his wider intentions?

There is no suitable dry dock for a 65,000 tonne 900 ft carrier at Portsmouth or Devonport. Construction of a new dock or the lengthening of the existing docks would be a very expensive process. What are the Government’s plans?

We welcome the retention of three of our existing naval bases. That will be welcomed on both sides of the House, and it is a matter on which we have campaigned, but there will be a strong suspicion that we did not get the full details today. Finally on this, can the Secretary of State guarantee that we will continue to have eight attack submarines, as we have been promised?

We will look at the Government’s expenditure plans in great detail. We are involved in two long military conflicts. They have cost the lives of 227 of our servicemen and women, and have cost the taxpayer over £7 billion. The intensity of the campaigns in Iraq and Afghanistan have resulted in the loss of equipment and in equipment being worn out much more quickly than would otherwise have been expected. In other words, the defence budget needs to rise faster than predicted just for us to stand still. On top of this, there is increasing evidence that operations in Iraq and Afghanistan have not been fully funded by the special reserve and that there has been salami-slicing of equipment and training budgets to fill the gap.

The Secretary of State told us that the budget will go up by £7.7 billion by 2011. During the period up to 2011, what costs will be incurred in the procurement of the carriers, the procurement of the JSF, the Trident replacement programme, the procurement of the Type 45s, the future rapid effect system, the cost of upgrading the naval bases for the carriers, and the cost of replacing assets lost, damaged or prematurely worn out by the conflicts in Iraq and Afghanistan? Only when we have detailed answers to those questions will we be able to make a judgment on whether this is anything like an adequate settlement for the armed forces, given what they are being asked to do. Under the current Prime Minister, we are only too well aware, following his last Budget, that financial statements that look good today can look very different tomorrow. If there is any sleight of hand in what the Government are saying on defence expenditure, it will not be forgiven by our troops in combat or in this House.

I welcome the hon. Gentleman’s welcome for the announcement on the carriers. There has never been an announcement as to when the carriers would come into service—

There was an expectation on the part of some people. However, with all due respect to the hon. Member for Woodspring (Dr. Fox), given the nature and complexity of this project, that is his best criticism. This is a very large and important procurement with significant implications not only for the Navy but for communities throughout the country, as well as for our shipbuilding infrastructure and the industry that will support the surface fleet for decades to come. It is right that we should continue to negotiate and consider this project and the way in which we have handled it before getting to this stage.

The hon. Gentleman asked several specific questions, which is of course his wont at the Dispatch Box. [Interruption.] As he says, it is his job. In due course, as decisions are made in a very dynamic environment and as consideration is given to all the issues that he raises, announcements will be made. He has been in his job for long enough to know that we have consistently announced investments not only in the long-term support of our armed forces and equipment but in responding to their short-term needs in a dynamic environment. Indeed, I made reference to some of the announcements that I have had the privilege to be able to make in relation to protected vehicles, helicopters—[Interruption.]

Order. Mr. Speaker takes a very dim view of electronic devices going off in the Chamber. I am not quite sure whom it belongs to, but this is a general plea to the House. We have already had one going off this afternoon, but the Member scuttled out before I could reprimand him. It is very rude and seriously disturbs the whole tenor of the debate, and I hope that hon. Members will try not to do it in future.

On a point of order, Mr. Deputy Speaker. May I apologise to you and to the House? I turned my telephone off before I came into the House, and I do not understand why it went off.

I am afraid that I do not have the power to deal with electronic devices, but my earlier remarks still apply.

That is an example of the complexity of modern technological equipment. Perhaps it gives us a small insight into how complex it is to design and build carriers, with their integrated systems, and why we have to take such time and care to ensure that they are right.

Let me reply to the questions asked by the hon. Member for Woodspring. As I said, announcements will be made appropriately. I say to him, in the spirit in which the question was asked, that we stand by our description of what is necessary to sustain our Navy for the challenges that it faces and deals with so well and so professionally across the world. Only this week, in chairing a meeting of the Admiralty Board, I was immensely impressed by the work that our Navy is able to do right across the world. I have asked for a piece of work to be done to compare its current presence and capability with what it was 10 or 20 years ago. My sense is that we will discover that it is now doing much more because it is better trained and better equipped than it was then. The simplistic view of just counting ships and paying no regard to capability pays no proper respect to what it does.

Our co-operation with France has been a bonus to us, not a hindrance. We will continue with it, and it will in no way affect the timing of any further statements.

I welcome the hon. Gentleman’s scrutiny of the spending aspects of the statement; that is entirely appropriate and exactly what he should do. However,

“there is no magic pot of money we can dip into to spend a lot more on the Armed Services, much as we would like to.”

Those words are not mine but those of the Leader of the Opposition on Webcameron in April 2007. The challenge that the hon. Member for Woodspring faces is not to scrutinise our spending plans, which will increase spending on our armed forces, but to explain to the country what his party would spend if it were in government. However, he has already been warned by the shadow Chancellor not to make spending promises.

The hon. Gentleman asked where the carriers will be based. We will make that announcement when it is the appropriate time to do so.

I thank my right hon. Friend for his statement, which will be well received in the Royal Navy, particularly with regard to the aircraft carriers. It will be well received across the armed forces generally, and there is no question in my mind but that it will be well received in industry, particularly the shipbuilding industry. May I remind my right hon. Friend of the old saying that it was tears that made the Clyde? There will be cheers on the Clyde today following this announcement.

I thank my right hon. Friend for his welcome and for his kind words. I pay tribute to the contribution that he has made to our ability to make the announcement on the carriers. When he was Minister with responsibility for the armed forces, he made a significant contribution to the challenges of modernising a substantial part of the way in which we deliver effect through the MOD. We are now in a position to apply the substantial savings and efficiencies that he was able to generate for future generations. He is entitled to a significant share of the praise for this announcement.

I welcome the statement and thank the Secretary of State for advance sight of it.

On the spending announcement, the Secretary of State will understand that we will wish to study the content in detail over the coming period. It will be important for us to ensure that the difficulties with overstretch and shortages in personnel and the problems with equipment are addressed. I am sure that the communities of the three Navy bases will welcome the decision but will perhaps wait with trepidation as regards the potential job losses.

If Britain is to be a force for good around the world, the carriers will be an essential part of our capability. With them, we will be able to conduct operations in far-flung parts. Can the Secretary of State explain what role the dockyards at Rosyth, Barrow, the Clyde and Portsmouth will play? If the final commissioning is to take place at Rosyth, that will be one of the most complex construction projects ever on the Forth, and even more significant than the iconic Forth bridge. The carriers will be a dramatic sight from many parts of Fife, including North Queensferry in my constituency, the home of the Prime Minister. With construction taking place in all parts of the UK, this will be Britain at its best.

It has been said that if the carriers can be built on time and within budget, other countries will be interested in buying from us. Which countries are interested? Is the JSF still the aircraft of choice for the carriers? We have heard about delays with the JSF—what effect will that have on the carriers? Can the Secretary of State clarify when all forces accommodation will be brought up to standard?

I welcome the hon. Gentleman’s welcome for the announcement. As I said, the carriers will sustain and create 10,000 jobs in the UK, and during the peak assembly time that will mean nearly 5,000 jobs at the four main yards of Rosyth, Govan, Portsmouth and Barrow. Of course, detailed negotiations still have to take place on the final shape of the contracts, and whether further improvements can be made on our negotiations thus far is a challenge for the future. However, we are in a position to move forward on that, which is why I was able to make today’s announcement.

The hon. Gentleman will see the carriers appear in his constituency as they are assembled at Rosyth. I am sure that they will be admired as much as other massive constructions nearby, which have nearly become wonders of the world; they will attract significant interest.

Our co-operative work with France concerning its desire to build carriers to the same design is at an advanced stage. I am not in a position at this stage to share publicly any other commercial discussions that are taking place, and I am sure that the hon. Gentleman understands why. When I am in a position—or when those involved in the construction are in such a position—to make public statements about advances in discussions on interests that might have been expressed by other countries, I will do that.

It may be that, because I lost a particular piece of paper, I have not given the House a piece of information that relates to a question from the hon. Member for Woodspring (Dr. Fox). The carriers are to be base-ported at Portsmouth.

We remain committed to the JSF programme, which continues, as the hon. Member for Dunfermline and West Fife (Willie Rennie) knows. With the help of many people in the House, we seek to resolve the challenges of that programme in order to ensure that our aircraft of choice flies from these carriers.

I welcome the announcement about building the two carriers. They will be vital to the Royal Navy’s ability to operate independently, if necessary, throughout the world. My right hon. Friend will be aware of the importance of the Barrow shipyard not just to south Cumbria, but to the whole of the north-west. Will he therefore confirm that a substantial proportion of the two carriers will be built at the Barrow shipyard?

I can of course confirm my hon. Friend’s understanding that the Barrow shipyard will make a substantial contribution to the construction of the carriers as they are built in blocks. I am not in a position to give him specific proportions, but these figures may give him an indication of the proportion of work that the Barrow shipyard can expect when the negotiations and contracts are concluded. During the peak assembly time, nearly 5,000 jobs will be sustained or created in the four main yards, of which it is estimated 1,100 will be in Barrow.

I am very pleased indeed that the carriers are going ahead. Can the Secretary of State assure the House that the procurement of the FRES vehicles and the future strategic tanker aircraft will not be compromised by this procurement? He has announced some useful increases in defence spending, but does he nevertheless not feel that something is fundamentally wrong? Our Army is now 98,000 strong, our Navy is dropping in size and our Air Force is dropping very rapidly. We are asking so much of them; do we not need a fundamental change in our approach to defence from all parties in this House, and from the country as a whole?

As the right hon. Gentleman knows, I respect the knowledge that he has gained, not just in his time as a Minister at the Ministry of Defence but in the valuable service he provides to the House in his chairmanship of the Select Committee on Defence, the role of which we in the MOD greatly value. Nobody in the House could do anything other than respect views that he expresses.

In relation to the overall spending envelope available to the Government in this spending review, defence has done four times as well as it has done in the past. That may not be the step change that the right hon. Gentleman wants, but there is something this Government cannot be criticised for: it cannot be said of us, as it could of the previous Government, that we have not increased spending quite substantially, year on year, in real terms. Indeed, we have committed ourselves to investment in the long term, as well as in excess of £6 billion from the reserves to support those troops we have committed to the front line.

We ask a lot of our forces, and we focused on that over the weekend because of a leaked report, which allegedly said something that I said at the Dispatch Box, if not in exactly the same words, but almost in terms. The right hon. Gentleman will know, as will many other hon. Members, that we do not intend to sustain the commitment we are asking of our armed forces, and there are already clear indications that we are significantly reducing it, not just in Iraq but in Bosnia, and we are coming to the end of Operation Banner in Northern Ireland. Hopefully, we are moving into an environment where we will not be asking our troops for that level of commitment continuously, and we can then address some of the issues that that would have generated otherwise.

I congratulate my right hon. Friend on his statement today and, along with 2,000 workers in the Scotstoun yard in my constituency and all the other workers on the Clyde, I thank him. On the work that is coming to the Clyde—although I do not want to appear greedy— would he perhaps make a statement on what is happening with No. 7 and No. 8 of the Type 45s, which would keep those workers in employment well beyond the next decade?

My hon. Friend knows that we have a forward plan for shipbuilding that is described in the response to the strategic defence review. There are numbers associated with that, which I do not depart from. He also knows, however, that both sides involved in negotiations on the orders that we placed for the Type 45s have to face challenges relating to their cost. It is my responsibility to ensure value for money for the taxpayer. Commitments to procurement in the long term necessarily have to be incremental, and I am afraid that they have to stay that way.

When I am ready to make announcements on the challenges we have set ourselves for the surface fleet and submarines, I shall make them, but I am not in a position to announce everything at once. I am in a position to make this announcement today. It is very good news for my hon. Friend’s constituents, and for a very important employer in his constituency. It is very good news for people throughout the United Kingdom, and for the Navy. I ask him to rest there for a time, and enjoy that good news, before demanding that we move on.

Order. May I repeat my request for brief questions and, I hope, brief answers from the Secretary of State? We will try to get as many people in as possible.

Does the Secretary of State agree that the aircraft carriers will operate in task groups, and that they will need full protection against airborne and submarine threats? The Type 45 is extremely capable against airborne threat, but is there not a yawning gap for the task groups’ defence against submarine threat?

The hon. Gentleman knows that we refer to these as a combined taskforce. We talk about carriers in relation not just to the actual boat but to what flies from the carrier and what supports it. There will be a combined taskforce that reflects all of the threats, which is why we are putting significant investment into submarines so that there is such capability to be deployed when it needs to be.

Hallelujah! This announcement will be much welcomed by the work forces, the unions and the management of shipbuilding industries up and down the Clyde. However, does the Secretary of State agree that the placing of these orders for aircraft carriers is an enormous triumph for the Union? As a fellow Scottish MP, does he agree that none of the hundreds—indeed, thousands—of man hours that will come to Scottish yards and Scottish suppliers would have come to a separated, segregated and isolated Scotland?

I thought that my hon. Friend was going to put me in a position whereby I could say that there was a possibility of persuading my hon. Friend the Member for Glasgow, North-West (John Robertson) to rest on his laurels a little and enjoy success; I thought that my hon. Friend the Member for Glasgow, South-West (Mr. Davidson) would insist on the next order. However, he asks me a question that enables me to say that, as the construction of the substantial vessels takes place on the Clyde and people see them, they will be a constant reminder to the people of Scotland that being part of the United Kingdom brings benefits not only to their security and safety but to their economic prospects, because they have a Government who intend to provide security and the economic power to invest. A Scotland torn out of the United Kingdom would almost certainly be unable to afford to do that.

The Minister responsible for defence equipment and support has made it clear that if the technology share agreement that affects the development of the joint strike fighter is found wanting Britain may not buy that aircraft for the carriers. Are there sufficient resources in the settlement to maintain the development of a marine version of the Eurofighter Typhoon?

In our negotiations about the joint strike fighter programme we are not planning for failure. Having said that, as my noble Friend Lord Drayson has said, including to the right hon. Gentleman, we have contingency planning for that—albeit remote—eventuality. Of course, that planning includes the necessary resources to carry through the development.

I warmly congratulate my right hon. Friend on achieving an above-inflation increase in the settlement. I am sure that he put a great deal of personal effort into that. I also welcome the investment in the important new capability of the future carrier and the keeping of the three naval bases. Does he acknowledge that, to optimise Devonport sustainably, there is a need for a long-term commitment to support surface ship fleet work at Devonport?

I pay tribute to my hon. Friend, and other hon. Members who represent constituencies where there are naval bases, for their contribution to the naval base review. All those communities have been championed exceptionally by their local Members, who have conducted their advocacy on behalf of their communities with respect for each other. My hon. Friend in particular is entitled to credit for that. There is no doughtier champion of her community. She must be pleased today that there is a long-term future for Devonport. The investment that the Government put in the infrastructure of the base must have been obvious to the people of Devonport and an indication of how much we value that resource.

I welcome the announcement about ordering the carriers and retaining the Faslane base, although I am obviously concerned about the prospect of job losses.

May I make the case to the Secretary of State for basing the aircraft carriers at Faslane? He mentioned Portsmouth at the end of a reply to another question, but I hope that he will reconsider the decision. Faslane has superb deep-water anchorage and enough clearance for large ships such as the new aircraft carriers to get in, even at low tide. There is also plenty of space to accommodate all the back-up support that the carriers need. I therefore hope that the Secretary of State will reconsider basing them at Faslane.

The hon. Gentleman is a champion for his community, although I wonder if those whom he purports to champion understand the consequences for his community and jobs there of his view on the deterrent.

I understand the hon. Gentleman’s argument, but decisions about where to base the carriers—they are to be base-ported at Portsmouth—are not made simply on the depth of the water. There are several other issues to be taken into consideration. The naval base review balanced them all and concluded that, to support our fleet, we need all three existing naval bases, including Faslane, which makes an extraordinary contribution to sustaining our Navy. At some stage, those communities need to work together and not necessarily in competition for the resources that others have.

My right hon. Friend knows that I wrote to him a few weeks ago in my capacity as chair of the Portsmouth naval base stakeholders group and asked him to make an announcement before the recess to allay some of the uncertainty in my constituency. I therefore sincerely thank him for his statement, for removing the cloud that hung over Portsmouth naval base and recognising the important role that our base plays in keeping the country secure. Today’s announcement, coupled with the aircraft carrier contract, will give my city a huge boost and ensure that the Royal Navy is equipped for its future challenges—

I think my hon. Friend may be satisfied with the answer, because it starts by paying tribute to Portsmouth, its people and those who work in the naval base and support our Navy so splendidly. They, as well as the people of Devonport and the people on the Clyde, are entitled to have their significant contribution rewarded by such an announcement. However, they should now begin to work with us to try to find the necessary efficiencies to allow us to offer all three communities and their bases the sort of long-term future that they want.

In relation to the naval bases, will the Secretary of State give us an idea of the scale of the job losses to which he referred, so that the community of Plymouth can begin to prepare itself? What is the likely impact—the knock-on effect—on Devonport dockyard? Will he confirm that no surface ships that are currently base-ported in Devonport will be shifted to Portsmouth as a consequence of today’s statement? Although it is, of course, welcome that Devonport naval base will not be closed, will he confirm that we are not condemned to death by a thousand cuts? We are looking for reassurance.

There is no intention of condemning anybody to death by a thousand cuts. I made it clear to those who conducted the review that I wanted an honest assessment and not something that misrepresented the position and then got us into salami-slicing in the communities that we are considering. That would have been dishonest and inappropriate. I am advised comprehensively by the outcome of the review that we can sustain significant bases in all three places. I am not prepared, outwith the appropriate consultations and discussions that need to take place, to bandy figures or even general descriptions. However, let me emphasise that there will be co-operative, open and continued discussion with hon. Members. We will share information with hon. Members to the extent that we can as the next process goes on. I reassure the hon. Gentleman that there is no intention of making salami cuts, but I do not want a continuation of competition between the bases for the opportunities that exist. It is now time for us all to co-operate and work in the way that the industry and the Ministry of Defence are beginning to show people can achieve a future for all of us.

I welcome my right hon. Friend’s statement and yet another real-terms increase for the armed forces and the Ministry of Defence, however that might be tempered by recognising the huge challenge and commitment that our forces face. It is in stark contrast to the 28 per cent. cut in real terms over some seven years under the Conservative Government.

I especially welcome the announcement about the carriers. I declare an interest. I was there at the birth of the carriers in the strategic defence review. I was there, as Secretary of State for Scotland, at the saving of the Scottish yards, which I confirmed when I was Defence Secretary.

I am especially delighted for the Navy—it deserves the announcement as reward and recompense for its efforts—and the workers on the Clyde. Seven years ago, when the yards were on the verge of closure, they were given a chance. They have taken that chance and earned the right to secure their future. Today, my right hon. Friend has given them the chance to do that.

It is my privilege and pleasure to build on the work that my right hon. Friend did in the two terms that he spent at the Ministry of Defence, first as Minister for the Armed Forces and latterly as Secretary of State for Defence, immediately before I took over. There will be recognition by the Navy and others of the contribution that he made on a number of significant challenges, not least the development and publication in time of the defence industrial strategy. Without that we would not have achieved the level of affordability that we have achieved and we would not have been able to make today’s announcement. He is therefore entitled to a significant portion of the credit for today’s announcement, and I am sure that he will be given it in any event, without my seeking it for him.

Finally, with my right hon. Friend’s special knowledge of the issue, he knows that, because of the reductions that we inherited and the damage that they did to the infrastructure of our armed forces, which he pointed out, the muttering of excuses from the Conservative Benches does not explain things all the way.

So inadequate was the provision for defence expenditure from the previous Conservative Government that this Government, for whom the right hon. Member for Airdrie and Shotts (John Reid) was Minister for the Armed Forces, decided to cut the budget by £1 billion a year—a cut that was reduced to £500 million a year only by the intervention of the then Chief of the Defence Staff. A little less political spin in the Secretary of State’s statement would have done a little more honour to his office. To describe the real increase in defence expenditure given in the figures as quite substantial breaks any reasoned connection with the English language. The armed forces are exhausted and worn out. Their forward equipment programme will be substantially damaged by the expenditure involved in trying to accommodate the aircraft carriers and aircraft. What are the consequences for the forward equipment programme of the Secretary of State’s statement today?

The hon. Gentleman describes the budget in the early years of this Government. My recollection is that we came to power with a commitment to follow the planned budget of the previous Conservative Government. We inherited an economic situation that required significant attention and a legacy of under-investment not only in our armed forces, but throughout public services. As he knows, or should know, spending is an issue of priority but there is a limited pot of money for it, as his own leader points out on his website.

The hon. Gentleman also knows—this is not something that we have instigated in government—that the Ministry of Defence looks at the equipment programme year on year, at its affordability in relation to the available budget and at the inflationary factors that have affected that. We will continue to do that. When we have to make tough decisions, as every Government do, we will announce them to Parliament. However, we will make no decisions that in any way affect the capability or the performance of our armed forces. The whole focus of what we do in relation to the budget will be to ensure that we support our armed forces to face the challenges that we set for them. We have done that consistently since I have been the Secretary of State.

Order. I have been in the House for only a short time now and I have heard two very long questions and quite lengthy answers. If I am to try to call all other hon. Members, I must ask for very short questions and concise answers, as we have quite a lot of other business to be done today.

My right hon. Friend has rightly praised the calibre of our personnel in the Royal Navy. It is truly of an exceptionally high standard. Can he assure the House that the changes that he has announced today will in no way be to the detriment of the high-quality training that is afforded to our personnel, particularly given the huge technological challenges facing the Royal Navy with the future vessels?

It is a fact that there are fewer shipbuilding jobs in Scotland now than there were in 1997. It is therefore welcome to hear today’s announcement on the carriers and the news that Scotland’s only operating naval base is to be retained. However, is the Secretary of State aware of concerns about job retention on the Clyde in relation to the MARS—military afloat reach and sustainability—project? As we are talking about time scales two days before the recess, will he confirm that he now expects the board of inquiry into the Afghan Nimrod tragedy to take place during the recess?

The House is stunned every time the hon. Gentleman gets to his feet and asks questions about jobs in relation to military equipment or installations that his party does not support. In fact, it is a party with an avowed policy of taking us out of NATO. Never mind the fact that his party would never be able to afford to build aircraft carriers or parts of them in Scotland—it would have no intention of doing so, because they would not be necessary for the forces that it would need. It is sometimes difficult to respond to challenges on the Floor of the House, but it is very easy to respond to challenges from the hon. Gentleman’s party in those circumstances. If he had his way, there would be practically no work in Scotland.

The hon. Gentleman asked about a part of the equipment programme, on which I will make an announcement in due course. I do not know the answer to his question about the board of inquiry, but I will be in touch with him about it, because I know that he has a genuine constituency interest in the matter.

My right hon. Friend will be aware that the gateway system operates under smart acquisition, to prevent projects from overrunning on time and money. When he made the decision on today’s announcement on aircraft carriers, how many traffic lights were on green and how many were on red in the main gateway?

If we were not in a position to go through a green traffic light, I would certainly not drive through a red one.

Representing royal naval air station Yeovilton, I warmly welcome the announcement on the future carriers. Has a decision been taken on the future use of the existing carriers? In particular, what assessment has the Secretary of State made of the need for a second helicopter carrier to supplement HMS Ocean?

No decision has been made on the future use of the carriers. I will write to the hon. Gentleman on his question about another helicopter carrier.

I warmly welcome the announcement of the carriers today. It is good news not only for the Navy and the shipbuilding industry, but for the defence industry. The announcement will also be good news in the north-east, as a lot of small and medium-sized enterprises will get work from the contract. I urge my right hon. Friend to ask the consortium to work with Northern Defence Industries andother organisations that help SMEs to get work in the supply chain, so that the maximum economic impact of the orders is spread throughout the United Kingdom.

My hon. Friend is a champion of workers not only in larger companies, but in important niche companies that make a valued contribution to the building of our equipment. I give him the assurance that he asks for and will ensure that that message is driven home to those who will build the carriers.

How confident is my right hon. Friend that a short take-off and vertical landing version of the joint strike fighter will be made available? Given the contingency that he mentioned in answering the question that the right hon. Member for Fylde (Mr. Jack) asked, would a carrier-based version of the Typhoon be ready by 2014?

I understand why my hon. Friend asks the question. I understand his desire to shift our attention from the preferred option of the JSF to the alternative that he prefers, for obvious reasons to do with job prospects and other investment in his community. I repeat to the House that we are still committed to the JSF programme and we are not planning for failure. We have a plan B, but for very good commercial reasons and I do not want to go into the detail of that publicly.

The news about the carriers is obviously splendid and there will be widespread support for it throughout the country. Everybody hopes that the JSF will be available and that the technology transfer problems with the Americans can be resolved. However, there is considerable anxiety about the possibility of the JSF not being available or not being available on acceptable terms. There is also anxiety about whether a marine version of the Typhoon can be developed in time if necessary, so that the carriers can be deployed from 2014. If neither of those solutions works, has my right hon. Friend considered the possibility of ordering the Rafale?

All the issues that my hon. Friend has raised are under consideration, but it would be otiose for me to repeat the answer that I have already given to the House twice.

I thank my right hon. Friend for his proposals on home ownership for our service personnel. One of the greatest disincentives to retention is the difficulty that our service families have in getting on to the property ladder these days. I urge him to ensure that adequate funds are made available by the Treasury, and that the opportunity for home ownership is spread right across the country and not simply contained in the areas in which our military personnel are presently based.

I can reassure my hon. Friend that there is a commitment at the highest level in the Government to give our best support to our servicemen and women to achieve the aspiration that many of them have to own their own home. Increasingly, those in the Royal Navy and the Royal Air Force have been able to achieve that. Settling the Army in larger bases for longer periods will be a key to unlocking that opportunity for members of that service. There is no lack of commitment to identifying the release of resources to enable those service personnel who wish to buy their own home to do so. It is a significant challenge, but I agree with my hon. Friend that it is a key to retention.

May I warmly welcome my right hon. Friend’s statement this afternoon? It is confirmation, if confirmation were needed, that Labour is the true party of defence in this country. Given the large-scale spending commitments that he has announced, however, will he give the House an assurance that phase 2 and phase 3 military skills training will remain the No. 1 priority, and that today’s announcement will not have an adverse impact on the programme solution for the defence training rationalisation programme?

Today’s decision will have no effect at all on the ongoing negotiations and discussions on meeting the affordability challenge of phase 2 of the defence training rationalisation. That is a self-contained issue that we need to negotiate our way through. I do not underestimate the nature of that challenge, as I explained when I announced to the House in some detail our preferred bidders for those contracts, but my hon. Friend can be assured that neither issue is dependent on the other.