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Britain's Place in the World

Part of Speaker’s Statement – in the House of Commons at 5:34 pm on 15th October 2019.

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Photo of Kevan Jones Kevan Jones Labour, North Durham 5:34 pm, 15th October 2019

We were promised that but it has not happened, and that needs to be looked at. The real issue, which I will come to, is our ability not only to afford this, but to know where we are going.

Added to that is the crisis in our defence procurement. In reaction to limited budgets, we are now buying off the shelf from abroad—mainly from the United States—which is not only leading to a hollowing-out of technology and jobs that could be in the UK, but adding to costs. I did not want to mention Brexit in this debate but I have to, because it has a direct effect on the equipment budget. The MOD has contract liability of some $35 billion. Last year, exchange rate losses cost it £620 million, and that could rise to some £800 million or £900 million a year. Buying off the shelf might seem very cheap for the Treasury, but it has long-term implications for the hollowing out of our defence industries, and the foreign exchange risk means that we are spending a huge amount of money that could train, for example, some 9,000 soldiers a year or fund a main frontline frigate in our Royal Navy.

We then have the ludicrous situation, still ongoing, whereby the MOD is continuing this nonsense of putting the fleet solid support vessel out to international tender—it is currently under tender—and arguing that that will somehow be in the interests of not only the taxpayer but UK plc. That dangerous trend is having an effect not only on our sovereign capability to provide these pieces of equipment for our armed forces, but on jobs and technology. It makes common sense to invest in UK plc. The fleet solid support vessel contract could sustain jobs in the UK, if there was the commitment to do that. It is no good trying to hide behind EU procurement rules, as the Government try to do, because no other European nation seems to do it.

This crisis seems to have been completely ignored in the Gracious Speech. Without some fundamental thinking about the equipment plan and what we want to do in defence as a nation, the crisis will continue, and so too will the pressure on individual members of the armed forces. Instead of this smoke-and-mirrors approach to defence funding, it would have been nice to see a full commitment in the Gracious Speech to a fundamental defence and security review. That would mean making some hard choices, but it would not only be better for the industry and members of our armed forces to have some certainty about the future; it would help to define our role in the world—what we can do, what we want to do and what we should do.