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Army (New Equipment)

8. Mr. Barry Jones (Alyn and Deeside): What plans he has to introduce new equipment for the Army. [148225]

The Parliamentary Under-Secretary of State for Defence (Dr. Lewis Moonie): We are investing in a number of new systems that will ensure that the Army's capability is maintained at the highest level. The Apache helicopter entered service last month, and plans for future equipment include new armoured engineering vehicles and, in the longer term, improvements to the range and accuracy of our artillery weapons, a fully integrated fighting system for the infantry and a new range of armoured fighting vehicles. We have also taken decisive action to rectify two long-standing equipment problems by commencing a modification programme for the SA80 rifle and by launching a new competition for the Bowman radio requirement.

Mr. Jones: Is the Ministry still committed to purchasing the new heavy lift aircraft, the A400M? I urge him to ensure that he purchases not 25 but 45 of that aircraft, and makes sure that the wings are made in my constituency, where 4,800 skilled workers stand ready to be of service to him. May I further tell him that, in the Airbus consortium, our German colleagues are lobbying like mad to get the contract to make the wings? As we have had steel redundancies in Wales, including at Shotton in my constituency, manufacturing would receive a big boost if he would say that 45 aircraft will be purchased and that the wings will be made in my constituency.

Dr. Moonie: I assure my right hon. Friend that we are absolutely committed to the purchase of the A400M. Plans for its development are progressing well. I am confident that the wings will be built in his constituency and will preserve the jobs that will be underpinned as a consequence.

Mr. Michael Fabricant (Lichfield): Will the Minister accept that until we have robot wars, we need human beings to operate the equipment? Is not the British Army 8,000 men short? What would the Minister say to the Staffordshire Regiment, whose representatives said at a meeting in the House of Commons only a week and a half ago that, for the first time since the second world war, it is undermanned by more than 250?

Dr. Moonie: I am well aware of the deficienciesin numbers that we inherited from the previous

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Government--deficiencies that, like them, we have done our best to remedy. The hon. Gentleman must recognise, however, that demographic changes in this country make it increasingly difficult to recruit into the armed forces. We are taking effective action to improve recruitment and retention through the package of support that we are giving to families, and through the improvements that we are making to accommodation. The picture in the next few years will be very much better than over the past few years.

Future Offshore Vehicles

9. Mr. Mike Hancock (Portsmouth, South): When his Department will complete its evaluation of the tenders for the future offshore vehicles contract; and if he will make a statement. [148226]

The Parliamentary Under-Secretary of State for Defence (Dr. Lewis Moonie): Invitations to tender for the future offshore patrol vessel contract were issued on 12 December 2000. The closing date for submitting bids was 8 February 2001. If industry's responses confirm improved value for money over the current service, the intention is to be able to place a contract in April 2001.

Mr. Hancock: Is the Minister aware of the importance of the contract to the employees of Vosper Thornycroft in the south of Hampshire, who currently face redundancy because of a shortage of work? In view of the important industrial implications, will he give a commitment to the House that the Defence Procurement Agency will complete its evaluation of the bids as quickly as is practicable, and will countenance no further delay? Will he also assure the House that the agency will be vigilant about the predatory bids for the contract that might be on the horizon, and rule them out of order? That will safeguard the position in which we have more than one shipbuilder building warships for the British Government.

Dr. Moonie: I am well aware of the importance that shipbuilders in the hon. Gentleman's area attach to the contract. I assure him that there will be no delays in reaching a conclusion on the bids that we have received. We are also well aware of the importance of competition.

Mr. Syd Rapson (Portsmouth, North): I declare an interest as a member of the Amalgamated Engineering and Electrical Union, which has a presence in the industry. Given the size of future shipbuilding operations in this country and the extra capacity that is required, does my hon. Friend agree that it is important to maintain the two asset bases, one on the Clyde and one on the south coast, because having two United Kingdom companies that are efficient in that sector increases our chances of building and exporting warships?

Dr. Moonie: As I have said, we recognise the importance of diversity of location and ownership in shipbuilding for our armed forces. That includes the north-east and the north-west, as well as the south coast and the Clyde. We will do everything we can to ensure that we get best value for money and continue to support British industry.

Mr. Crispin Blunt (Reigate): What confidence can there be that the Ministry of Defence will handle the

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competition fairly? The strategic defence review identified two LSLs as a requirement, but it was decided that four were needed instead, two of which were given, without competition, to the Yarrow yard. That has probably enabled Yarrow, which is owned by BAE Systems Marine Ltd., to launch a predatory bid for those craft. Is it not time the Ministry returned to the use of competition as the guiding principle, and stopped handing out contracts to giants such as BAE Systems, in the interests of industrial rather than defence policy?

Dr. Moonie: I must point out that the original requirement was for six of those ships, not four. [Interruption.]

Mr. Speaker: Order.

Dr. Moonie: When we are placing a large procurement order, such as the one mentioned by the hon. Gentleman, there is clearly a trade-off between where to place the shipbuilding orders and the time within which we want to bring the ships into service. Our armed forces are absolutely delighted with the speed with which we managed to place the orders.

Royal Navy (Pay and Conditions)

11. Mr. Tony McWalter (Hemel Hempstead): What steps he is taking to improve pay and conditions of Royal Navy personnel. [148228]

The Minister for the Armed Forces (Mr. John Spellar): The terms and conditions of naval service personnel are subjected to regular review to ensure their currency and fairness. The rates of pay and associated allowances of naval service personnel are reviewed annually by the independent Armed Forces Pay Review Body, which bases its recommendations on broad comparability with similarly weighted civilian jobs. As my right hon. Friend the Secretary of State announced on Friday, the review body's recommendations for the 2001 pay award have been accepted in full by the Government and will be implemented from 1 April. The settlement is good for all the armed forces and is fully deserved, given the excellent job that they do.

Mr. McWalter: Does my hon. Friend agree that many people in the armed forces welcome the improvements that he describes? However, vessels such as HMS Ocean were not so much lean-manned ships as scandalously undermanned, as part of the previous Government's arrangements? Will he ensure that staffing levels on such ships are high enough to keep them clean, so that they can be a source of pride to the Royal Navy?

Mr. Spellar: I assure my hon. Friend that the Navy's leadership is ensuring that our ships are properly and adequately manned. It is also undertaking effective recruiting, as my right hon. Friend the Secretary of State said, and the Royal Air Force and the Navy are moving towards achieving the required staffing balance.

Mr. Peter Viggers (Gosport): Does the Minister agree that the most unfair aspect of pay and pensions is the so-called pensions trough, whereby some people who retired at a time of pay restraint are £1,000 or more a year

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worse off than people who may have retired only a few days later? Does he also agree that if those pensions were part of a private scheme, the trustees would have triedto address the problem? Will he face up to the representations made to him by the Officers Pensions Society and others to deal with that injustice?

Mr. Spellar: The hon. Gentleman knows full well that the issue is difficult and has been faced by Governments of both parties for many years. It affects not only the armed forces pension scheme, but a considerable number of public sector schemes as well. It is a little disingenuous of the hon. Gentleman to imply that there may be a separation between the armed forces scheme and the schemes for the rest of the public sector. As I said, all Governments have faced that difficulty, and in 18 years, the previous Government did nothing about it.

Ms Claire Ward (Watford): Is my hon. Friend aware that armed forces personnel serving abroad receive less pay than they do when they are based in barracks here? Will he give a commitment to consider that issue?

Mr. Spellar: My hon. Friend is probably referring to overseas allowances for personnel in Germany and the Balkans. That is a difficult matter, which raises taxation issues. The previous Administration also faced those problems--but I am not trying to place the responsibility on them. Individuals who serve in Germany and the Balkans may not be better off in their overall service, because they will be affected by a different tax regime. However, we recognise the problems caused by separation; that is why we introduced enhanced separation allowances.

Mr. John Wilkinson (Ruislip-Northwood): Does the Minister realise that the shortfall of naval pilots in joint force Harrier is not just a question of money? Does he understand that although RAF Cottesmore is an agreeable location--it is a former bomber base in good hunting country--it is not exactly the same as a naval air station where there is salt in the air, and the traditions, atmosphere and ethos encourage Fleet Air Arm pilots, like other naval personnel, to stay and to feel at home?

Mr. Spellar: I have been to Yeovilton and I did not notice too much salt flying across from the waves on the beach. Like many other countries, we face considerable pressures in recruiting naval air personnel and RAF pilots, because of the expansion of the civil airline industry.I wish only that the industry paid for all its own training, instead of constantly poaching personnel from the air force. We are looking to improve and increase output from the training system, but that will take time. That is why we have, as the hon. Gentleman will know, introduced measures to encourage retention, so as to sustain our operational effectiveness. The Navy and the RAF are hopeful and optimistic that those will have a significant positive effect.

Caroline Flint (Don Valley): My hon. Friend will be aware that for some years I have been campaigning to have removed the arcane old-fashioned regulations that affect the pay of Navy, Army and RAF personnel. Those regulations prevent the operation of deduction of earnings orders that the Child Support Agency has imposed on

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some personnel, and so help them to avoid their responsibilities. When will the Minister do something about that? The new CSA arrangements will do nothing to deal with the backlog of cases affected by those regulations, and that is a crying shame.

Mr. Spellar: I know that my hon. Friend has met the Under-Secretary of State to discuss the matter. My recollection from my days as Under-Secretary is that the percentage that can be deducted from service pay is greater than the CSA levels that are to be introduced. I admit that problems arise because of arrears, which are often due to CSA bureaucracy. My hon. Friend the Under-Secretary is considering the matter.

Mr. Quentin Davies (Grantham and Stamford): I wonder whether the Government have any conception of the consternation and chaos produced throughout the armed forces by their ill-conceived and mishandled pay proposals for 2000. What possible sense or justice is there in paying a cook more than a bomb disposal expert with the same rank and seniority? I spent Thursday with an all-party group on one of the Royal Navy's largest ships. The whole complement was in a state of cold fury about the proposals. Is it surprising that with such a ham-fisted Government, morale and retention in all the services are collapsing--contrary to the complacent impression given by Ministers earlier in response to my hon. Friends the Members for Canterbury (Mr. Brazier) and for Lichfield (Mr. Fabricant)?

Mr. Spellar: Everyone recognises that changed pay systems always create some difficulties, especially in their early stages. Policies are designed to be more flexible so that they can be adapted to changing circumstances. Everyone will have the opportunity to increase his earnings within his rank, in recognition of experience and qualifications. The second major change is a more targeted approach, which will allow us to address accurately particular areas of need. Allowances will be focused more efficiently on recruitment and retention. It is a strategy for retaining the best alongside the strategy for change. [Interruption.] The hon. Member for Grantham and Stamford (Mr. Davies) indicates some dissent. That is slightly surprising, as that was said at the introduction of the policy in February 1997, in the foreword signed by the then Secretary of State for Defence, the right hon. Member for Kensington and Chelsea (Mr. Portillo).

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