Defence Reform Bill — Second Reading

Part of the debate – in the House of Lords at 4:15 pm on 10th December 2013.

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Photo of Lord King of Bridgwater Lord King of Bridgwater Conservative 4:15 pm, 10th December 2013

My Lords, I am particularly pleased to follow the noble Lord, Lord Levene, in this debate. I think your Lordships will recognise that nobody in the country can speak with more authority on the subjects that are part of the Bill than the noble Lord. He has had quite exceptional experience in this field, having headed up the procurement executive and having been recalled by successive Secretaries of State to overhaul and review the programme of reform for the Ministry of Defence. I particularly echo one point that he made very forcibly. It has been a feature of opening speeches from the Front Benches to pay tribute to our Armed Forces. I readily endorse that of course but also pay tribute to the civilian members in the MoD who back them up. I exempt the current Secretary of State and Defence Ministers from this, but there is a tendency in other parts of the Government to decry civil servants and say that all their present problems are problems with the civil servants rather than necessarily with policies or things they have inherited. The Minister ended on a cheerful note, saying that he looked forward to this debate. I am not sure it is the easiest debate he will ever have to reply to in his career and I admire his optimism.

The Bill has three main parts. I have no comment on Part 2, about which other noble Lords have spoken, but will say a word about Part 3. I have considerable concern whether it will be possible to reach the numbers planned for the new reserve. I am an old TA officer used to serving my time with drill nights, a few training weekends and a few fortnight camps but am all too conscious of the different demands that are now made of people serving in the reserves. I used to spend a lot of my time as Secretary of State going round an organisation called TAVRA—the Territorial, Auxiliary and Volunteer Reserve Association—and persuading employers to encourage their employees to serve in the TA.

However, of course I was trying to sell an entirely different sort of menu from what is now required. The challenges for companies and for employees are now very much greater. I was struck by the comments made by Tobias Ellwood in a debate in another place. He is a Member of Parliament who is a former soldier and a former PPS, I think, to the Secretary of State and who continues to be a member of the Reserve Forces. His last exercise was in Laikipia in Kenya:

“Halfway through the two-and-a-half week exercise, we came together to discuss the future of the TA and its impact on each of us. Round the table, we had to say what would happen if we were required to break away from our jobs for nine months. Not one person in my group was able to put up their hand and say that their employer would be able to grant them permission to be away from work for that period”.—[Hansard, Commons, 16/7/13; col. 1009.]

That very much sums up my concern about this proposal. The amendment that the Secretary of State has announced in another place, which will come forward on Report, is extremely welcome. It will be necessary to watch this very carefully as it is in nobody’s interest to find, at the end of this period, that we have a substantial shortfall.

I note the criticisms that were made about regular Army recruiting, which suggested that part of the problem was that it was not very good at recruiting people for the TA. That may be a little unkind and is simply a measure of the difficulty that it would have doing so. It clearly has to be recognised that, by contrast to what used to be the position in the TA, it will be extremely difficult for small employers to agree to their employees going off and run the risk that they may disappear for six or nine months.

Turning to Part 1, I have reservations about the proposed GOCO but I was very interested to see what the outcome of the competition would be. As the various candidates fell by the wayside, finally leaving just one competitor, I entirely understand why the Secretary of State has decided, and announced today, that he will not proceed with the proposal. It is fair to say that there are rather better omens than there might be for making a success of DE&S-plus.

I do not want to embarrass the noble Lord, Lord Levene. He quoted a report from 1991. I rather enjoyed that because I was Secretary of State at that time and he was in charge of procurement, and he showed what a much better performance was being achieved then than sadly has been the case more recently.

Only last Thursday my noble friend published in this House a Written Statement by the Secretary of State in connection with the second annual review by the noble Lord, Lord Levene, which recognised that there had been substantial progress. The Secretary of State said that there was,

“clear evidence that the Ministry of Defence has become more businesslike”.—[ Official Report , 5/12/13; col.

WS 37


which was, “very encouraging”.

There are real difficulties about a GOCO taking over the DE&S function. Certainly, as the noble Lord, Lord Levene, has said, I have no objection to GOCOs, because we did them. We did them in Devonport and Portsmouth and they were a great success. They had limited, targeted objectives—putting a company in charge of something with its commercial expertise and defined objectives—and nobody would criticise them now.

However, if you take the wider considerations for total procurement in excess of £10 billion a year, the implications are not simply about what is the best commercial deal; there are economic implications for every part of our country. There may be regional aspects to that; the future of an industry may be at stake; international collaborative ventures may have to be taken into account. What could well become a real headache for a future Secretary of State are possible conflicts of interest and allegations of failure and lack of impartiality in the treatment of contracts. There are also the security implications of foreign companies that are applying to become the GOCO operator working for other Governments as well. There is a range of issues that goes much further.

I hope that the proposal in the Secretary of State’s Statement, DE&S-plus, can be made to work and that we can build on existing capabilities. Many will have noticed the key paragraph in the Statement, that,

“we will permit the new organisation significant freedoms and flexibilities, agreed with the Treasury and Cabinet Office, around how it recruits, rewards, retains and manages staff along more commercial lines”.

That is a crucial decision, which seems to meet the challenge. There are many very experienced and talented people in the procurement field within the Ministry of Defence, but some of them lack wider senior commercial experience. If we can reinforce that, I have every hope that that could work.

It is against that background that I hope that we will also tackle one of the besetting sins of the Ministry of Defence over the years, and get greater continuity. People continually changing jobs is a problem in many government departments. We must build up that field of expertise with maximum continuity of employment.

The more difficult issue that I have to raise is that, if this is the Secretary of State’s announced decision today—and it has been referred to already—there is the question of whether we are really going forward with Part 1. I am in favour of giving every possible encouragement to the Government’s now announced decision for DE&S-plus. I hope that he can recruit the very best people to work in that, to reinforce it and to make it an effective body. It does not seem the ideal start for them if you say, “By the way, we may chuck it all in a couple of years time and, by the way, we don’t actually have to go back to Parliament because we already have an Act of Parliament in place that enables us to do it”. There is a difficult constitutional point as to whether this should be proceeded with at this stage. I am talking of course only about Part 1.

This has all happened in a great rush. We have had the Secretary of State’s announcement only this afternoon and not had a chance to discuss it. Your Lordships’ House does not vote against Second Readings so the Bill will proceed, but, between now and Committee, we have seriously to consider what really should happen to Part 1. I hope that we will give our fullest backing to DE&S-plus and make that work, and really see the improvement in the performance in MoD procurement to which I know the Secretary of State and all the Ministers in the department attach such enormous importance.