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Forward Equipment Programme

Volume 477: debated on Monday 16 June 2008

4. What assessment he has made of the consistency of the forward equipment programme with the Department’s expenditure plans. (210791)

The Department reconciles the equipment programme and the available resources through its regular planning round process, which enables us to adjust priorities, not least in response to the experience of operations. To inform the 2009 planning round, we are undertaking a short examination of the equipment programme to look at our planning assumptions in the next 10 years. That aims to bear down on costs and shift the balance of defence procurement to support operations.

But the truth is that that short examination confirms what everyone knows: the forward equipment programme is inconsistent with the state of the defence budget. Will the Minister confirm that the examination is therefore likely to conclude that salami-slicing will no longer be enough and that a major amputation of an entire programme is probably required?

We need to try to ensure that we have got the focus on our current operations right and that it is sufficient. We need to ensure that we do more for our people, if we can. To do so, we need to examine the cost issues in the equipment programme to ascertain whether we can bear down on them. A review is necessary, sensible and exactly what we are doing.

Will the Minister assure me that any such review will not delay signing the contract for my aircraft carriers? Will he further confirm that, if the future of the Scottish naval shipyards is to be assured, it is essential that they maintain access to the United Kingdom market—no Union, no shipyards?

The commitment to the carrier programme is clear, and that will not be part of the review that we are undertaking.

Is it not clear that a review of the major equipment programme is just another opportunity for the Government to push decisions “to the right”, as the Ministry of Defence jargon goes, in order to delay expenditure for as long as possible, in the hope that the Government can get through a general election before they have to cancel anything? Is it not time for the Government to accept that they will not be able to deliver the capabilities that they originally promised in the strategic defence review under the current defence budget?

I saw the hon. Gentleman talking to his hon. Friend the Member for Reigate (Mr. Blunt), who is sitting in front of him, so it is surprising that he should stand up and say exactly the opposite. His hon. Friend said that the review will expose certain things; he says that it is a way of delaying them. The review is a short review. If the hon. Gentleman had paid any attention to what I said, he would know that the review is there to inform our decisions in the 2009 spending round.

Can my right hon. Friend give us some detail on the essential Airbus A400M programme? How many aircraft do we intend to procure and what is his best estimate of its in-flight date?

We need to consider our equipment programme, with the exceptions of decisions that have already been taken, through the review, although I cannot pre-empt those decisions. We shall aim for the minimum of delay in decision making. The review will not take that long, but it needs to be conducted, and we need to look further on than we were able to during the 2008 spending round.

In looking at the forward equipment programme, perhaps the Minister can look at the past equipment programme, too. We all want to see value for money, but does he really think that it is value for money for this country to have bought eight Chinooks that are now lying idle in a hangar? [Hon. Members: “You bought them.”] Having said that—[Interruption.] I know exactly what the Minister is saying, but can he give the House an assurance that he will look at all the contracts on which we are now expending money, to ensure that there is no waste whatever in the equipment that our armed forces need?

The hon. Gentleman knows that those eight Chinooks were ordered by the previous Conservative Government. That procurement was found to be completely within the terms of the procurement procedures. We could not go back to Boeing, because it had done what it had been asked to do, but those Chinooks were not compatible with our safety requirements. That was a pretty disastrous situation. We have decided to make those Chinooks fit for purpose, so that we can get them into theatre as quickly as possible. It was a pretty complicated mess in which we found ourselves in the first place, and yes, it has taken some sorting out.

To have the most accurate correlation possible between a complex forward equipment programme and the associated budgets provided, the MOD needs the highest order of financial advice available at its top levels. In the light of the two National Audit Office reports—one relating to the Chinook helicopter disaster, the other to the flog-off of QinetiQ, where senior management enriched themselves by ensuring that the price was well below the market value—what quality of financial advice are Ministers receiving in this benighted Department?

Hindsight is a wonderful thing. With the benefit of hindsight, one can see the huge success that QinetiQ has been, but that was not guaranteed at the time. However, the Government made nearly £1 billion—an 800 per cent. profit—on their shares in QinetiQ.