HC Deb 14 July 1997 vol 298 cc12-3
9. Mr. Burns

To ask the Secretary of State for Defence if he will make a statement on current expenditure on the defence procurement budget. [6515]

Mr. Spellar

In the current financial year, we expect to spend about £9 billion on defence equipment.

Mr. Burns

Does the Minister accept that hundreds of thousands of jobs rely on the defence procurement budget, including several thousand such jobs in my constituency, Chelmsford, West? Is the Minister aware of the growing concern that as the strategic review is Treasury driven, the defence procurement budget is at great risk? Will he reassure my constituents and others who work in the defence industries throughout the country that during the life of this Parliament there will be no real-terms cut in the defence procurement budget, and that our armed forces will get the best equipment to enable them to protect the realm?

Mr. Spellar

The hon. Gentleman may not have read out that question but it is certainly one that he prepared earlier, before he heard the response of my right hon. Friend the Secretary of State on the levels of defence spending of the previous Government. Uncertainty arose in the defence industry because of the huge cuts made by the previous Government.

First, it has been made clear that the defence review is foreign policy led, not Treasury led. Secondly, in a well-known article in The Daily Telegraph before the general election, my right hon. Friend the Prime Minister gave a commitment to the maintenance of the defence budget for the next two years. Thirdly, we have made it clear that during the strategic defence review there will not be a moratorium on equipment provision. We shall, of course, have to consider our equipment disposition after the review, given the needs of the country. We wish only that the previous Government had examined procurement requirements and the proper overall strategic needs of the United Kingdom, rather than engaging in ramshackle cutting.

Mr. McAllion

Will my hon. Friend tell the House by which month the decision whether to buy seven Trident missiles from the United States in US fiscal year 1998 will have to be taken? If the decision is taken to purchase these missiles, will he confirm that the cost will be about £89 million at current exchange rates? Will he explain why the decision cannot be postponed until the end of the strategic review, thereby keeping open at least the prospect of saving a substantial sum of public money?

Mr. Spellar

Again, I would have hoped that my hon. Friend had listened to the comments of my right hon. Friend the Secretary of State for Defence about Trident and our need to maintain the minimum deterrent. We shall obviously carry out an evaluation during the defence review.

Mr. Key

Of course we are all interested in stability in the armed forces procurement programme. That being so, why did the Government confirm on Thursday, in answer to a planted question, that defence procurement projects already on contract are being considered as part of the defence review and are therefore subject to cancellation by the Treasury? Such projects must include the Eurofighter, EH101, Apache and others. Is the Minister able to name one procurement project that he can guarantee will not be cancelled?

Mr. Spellar

I am extremely surprised that the Conservative party is reverting to the position that it took before the election and trying to create unnecessary alarm. I shall read the answer to which the hon. Gentleman referred. It stated that during the review there will be no moratorium and projects where contracts have already been placed will continue. The hon. Gentleman should have read out the whole answer, instead of only the part that suited his political purposes. The key point in that answer is that projects where contracts have already been placed will continue. Decisions on major equipment programmes not yet under contract will be considered on their individual circumstances".—[Official Report, 10 July 1997; Vol. 297, c. 531.] That applies to all Governments who carry out defence reviews.