§ 3.37 p.m.
§ The Parliamentary Under-Secretary of State, Ministry of Defence (The Earl of Arran)
My Lords, with the leave of the House, it may be convenient if I repeat a Statement about the Atomic Weapons Establishment which is being made in another place by my right honourable friend the Secretary of State for Defence. The Statement is as follows:
"With permission, Mr. Speaker, I should like to made a Statement on the future organisation of the Atomic Weapons Establishment,
"In their Fifth Report 1988–89, the Select Committee on Defence drew attention to the problems that they believed risked delay to the progress of the Trident programme. The Government have been considering the best way to address these issues.
"The present position is that we believe we shall achieve the initial production at Aldermaston and the other AWE sites that will enable the Trident in-service date of the mid-1990s to be met. However, the need for increased production from 1992 for later Trident deliveries, against the background of the very keen demand for skilled labour in the Thames Valley area, does pose an increasing challenge, and one for which a greater production management capability is required.
"The Government consider that the best way to address these problems is by full contractorisation, with the land, facilities, and other assets remaining in the Government's ownership. Legislation will be required to implement this and will be introduced in due course. Under this legislation, provision would be made for the present workforce to be employees of one or more operating companies.
751 "In the meantime, and until the necessary legislation is introduced, the Government intend to appoint a management contractor who will concentrate initially on manufacturing work and site support. The contractor will strengthen the establishment by bringing in during 1990 a small number of experienced managers from the private sector. The contractor will be selected by competition and invitations to tender will be issued as soon as possible.
"There will be no change in the purpose or direction of the establishment's programme. The first objective is to reinforce rather than to replace existing AWE management, and all the existing AWE sites will continue in operation.
"The Government remain fully committed to the Trident programme, together with a strong research base to underwrite nuclear weapon capability for the future. Safety will continue to be the highest priority. A compliance office, led by a senior and suitably experienced government official based at AWE, will monitor contract compliance and observance of safety, quality and security arrangements.
"Under the initial arrangements, I have described, AWE personnel will remain civil servants. The workforce at the establishment's sites are being informed today and consultation is being set in hand with the relevant trade unions. A consultative document which sets out in greater detail the background and the proposals I have outlined will be placed in the Library of the House this afternoon.
"These changes will not affect the Aldermaston new building programme, which has been managed satisfactorily since 1988 by a private contractor operating under a government contract. The British nuclear deterrent is committed to NATO in support of the agreed NATO strategy of deterrence based on an appropriate mix of adequate and effective nuclear and conventional forces. The arrangements that I have announced today seek to address the valid concern of the Select Committee about the need for improvements at AWE and to ensure that the Trident programme is successfully implemented. I commend them to the House".
My Lords, that concludes the Statement.
§ 3.41 p.m.
§ Lord Graham of Edmonton
My Lords, the House will be grateful to the Minister for repeating the Statement made in another place. A number of aspects of the Statement concern us. Perhaps I may briefly set them out and then ask a number of questions.
Paragraph 4 of the Statement says:The Government consider that the best way to address these problems is by full contractorisation, with the land, facilities and other assets remaining in the Government's ownership".Paragraph 6 says:There will be no change in the purpose or direction of the establishment's programme".752 The Statement continues:Safety will continue to be the highest priority".The Statement then goes on to say:These changes will not affect the Aldermaston new building programme".Although the Minister indicated that the proposed contractorisation rests upon a reference by the Select Committee on Defence, it is based on a report by Sir Francis Tombs. How long has that report been in the Government's hands, and when do they intend to publish it? Can he give an assurance that major redundancies will not follow these proposals? If he cannot, can we assume that contractorisation is an opportunity for the Government to evade their responsibilities towards the employees at Aldermaston? Is it the case that the Government will entrust commercial management with issues of national security? For example, is it not the case that the secrets of Britain's nuclear bomb designs are held at Aldermaston? How will those secrets be protected? Has the United States been consulted, in view of the fact that some of her secrets are housed at Aldermaston?
Are the Government aware that the staff at Aldermaston, especially those who are members of the Institution of Professionals, Managers and Specialists, which represents about 1,600 Aldermaston scientists and engineers, are strongly opposed to the management of Britain's nuclear deterrent being farmed out?
I heard what the noble Earl said about consultation in the future, but before the announcement today did the Government consult with the employees at Aldermaston? Can he tell the House what they have in mind in respect of security at Aldermaston? How will that be affected by the change? Is it not a fact that security at Aldermaston is presently in the hands of the MOD police, who have among other responsibilities the power of arrest and also the right to carry firearms? What changes do the Government envisage in the security arrangements?
The noble Earl will recall that in two glaring instances —at the Royal small arms factories at Enfield and Waltham Abbey —serious questions were raised when security was transferred to private security firms. He will not need reminding of the serious questions that are being asked about the adequacy of security provided by a private security firm at the Royal Marines depot at Deal. Can the Minister assure the House and especially the people wo live around Aldermaston that these changes will not affect those matters? Is the noble Earl satisfied with the Government's experience of contractorisation at Rosyth in Scotland and also at Devonport?
Finally, does the noble Earl appreciate that selling to the private sector this strategic area of the sensitive matters handled at Aldermaston is a new step in the Government's mania for getting out of their responsibilities to the nation and to the national interest?
§ Lord Tordoff
My Lords, on these Benches we also thank the noble Earl for repeating the tatement made in another place. I have one or two questions.
753 Is it not a paradox that in regard to nuclear defence we are moving in the direction of privatisation, whereas with nuclear power we are moving in the other direction, as we found last night? One of the reasons for this move is the pressure on scarce manpower resources and the cost thereof in the Thames Valley area. Does that not mean that there will be higher costs under the new arrangements? If that is the case, will there be an effect on the defence programme? What will be cut to make way for these higher costs?
I agree with the noble Lord, Lord Graham, that the issue of security is extremely worrying. We read in paragraph 7 of the Statement that safety will continue to be the highest priority. That means that security will not be the highest priority. The noble Lord touched on various aspects of that subject and asked questions to which we should all like answers.
The Government are contemplating introducing legislation. In paragraph 5 of the Statement they talk of interim arrangements until the necessary legislation is introduced. Those interim arrangements seem to pre-empt the legislation that may need to go through this House.
Finally, in paragraph 3 we read of the need for increased production from 1992 for later Trident deliveries. Can we be assured that the weaponry will be available for the new Trident boats in time for each one of them when it takes to the water?
§ The Earl of Arran
My Lords, I thank noble Lords for their questions. The noble Lord, Lord Graham, asked about full contractorisation. A further consultative document is likely to be issued in due course outlining our legislative proposals for the proposed method of contractor operation and the implications for the AWE's existing workforce. It is likely that the workforce will be transferred into contractor's employment under the terms of the Transfer of Undertakings (Protection of Employment) Regulations 1981. The workforce will be fully consulted at the appropriate time on the implications of the transfer for their conditions of service and in particular for their superannuation rights.
The noble Lord also mentioned the recently compiled report by Sir Francis Tombs. We have paid great attention to the report but it is not the Government's intention to publish it. The noble Lord asked about redundancies. As the Statement made clear, the AWE is short of manpower, so there is no question of general job losses under the management contract. But the possibility of a very small number of redundancies among senior management cannot entirely be ruled out. As regards long-term redundancies after full contractorisation, that depends on demand for the work of the establishment, which would be the determining factor whatever management arrangements were in place at the AWE, whether it was in the private sector or in the public sector.
The noble Lord also referred to the security aspect. Private contractors already have great status in this area. They have been involved in a range of works on AWE sites for many years. What is most important is 754 that a £1 billion programme of capital construction at Aldermaston is already under private sector project management. Dockyard contractors now refit and service nuclear powered submarine reactors.
The noble Lord made an important point when he talked about ensuring security. Safety and security will continue to be paramount and will be safeguarded. All staff will be vetted in exactly the same way as civil servants. The contract will specify strict environmental, health and safety criteria.
Finally, procedures will be in place to ensure careful monitoring. We shall maintain the Ministry of Defence police at AWE and will continue to set security standards for the establishment. They will be monitored by Ministry of Defence staff at AWE and in MoD headquarters.
The noble Lord made a point about nuclear defence and nuclear power. They have nothing to do with each other in this context, which is to improve management efficiency to see the Trident programme complete.
Costs were mentioned. Costs will obviously depend upon the outcome of the competition. It is not primarily a cost-cutting exercise, but we shall clearly be looking to the contractor to manage his resources efficiently.
§ Lord Tordoff
My Lords, I am sorry to interrupt the noble Earl, but he must have misunderstood me. I was not suggesting that it was a cost-cutting exercise. I suggested that it would cost more because the contractors would have to respond to market forces. I was asking the Minister about the increased costs, not the decreased costs.
§ The Earl of Arran
My Lords, having to respond to market forces does not necessarily mean that the operation will cost more. With the natural efficiency of market forces it is to be hoped that it will not cost any more.
As regards the legislation and when it is likely to take place, legislation will be required for full contractorisation. We hope to put a Bill before Parliament in time for the operation to begin in 1992.
§ Lord Graham of Edmonton
My Lords, before the noble Earl sits down will he deal with the subject of the contractor and the competitive tender? Is he telling us, as he read out in the Statement, that the contractor will be selected by competition and an invitation to tender? Are we putting out to competitive tender the safeguarding of security of that establishment? What will be the criteria upon which such a tender will be awarded if it is not awarded on the lowest price?
§ The Earl of Arran
My Lords, it goes without saying that safety and security will be of paramount importance when the contractor is chosen. It will be made clear that they are of paramount importance.
§ Lord Boyd-Carpenter
My Lords, will my noble friend confirm what I think that he has nearly but not quite said: that the contractors and the staff that 755 they bring in will be subjected to exactly the same degree of security vetting as is the Civil Service staff at present?
§ Lord Jenkins of Putney
My Lords, perhaps I may ask one general question and one particular one. On the general question, is the whole operation desirable and is it necessary in present circumstances? Is there not a certain lack of enthusiasm for Trident on the other side of the Atlantic? Are any of the operations intended to step in to see whether the job can be done alone in the event of the United States stepping out? Is that the nature of the problem that the Government face? The particular question I wish to ask relates to trade unions. I was glad to hear the Minister say that the trade unions would be consulted. Is that not a different attitude from the attitude which the Government have taken in relation to GCHQ? If they are going to consult the trade unions in this delicate area perhaps they might reconsider their attitude at GCHQ.
§ The Earl of Arran
My Lords, I understand what the noble Lord is saying about GCHQ, but I do not believe that the situation is related to what is proposed. On the question of whether there is a need for the Trident programme, the noble Lord is aware of the joint NATO communiqué of June of this year in which it was agreed that there is no alternative to the alliance deterrence strategy based on an appropriate mix of adequate and effective nuclear and conventional forces. The honourable gentleman the shadow defence spokesman in another place in October of this year said that the next Labour Government would accept the responsibilities, both financial and strategic, of inheriting the Trident programme.
§ Lord Jenkins of Putney
My Lords, was not that all before the recent world-shaking events in which Mr. Gorbachev has played so large a part and in which the President of the United States has also participated?
§ Lord Harmar-Nicholls
My Lords, when my noble friend told my noble friend Lord Boyd-Carpenter that he was quite right, was he saying that each individual workman working for a private contractor will have to give a written undertaking just as civil servants do?
§ The Earl of Arran
My Lords, they will undergo the normal vetting which is standard for civil servants.
§ Lord Cledwyn of Penrhos
My Lords, on a first hearing of the Statement, I am bound to say, and regret to say, that there is a dangerous element of recklessness about it. Will the Minister be good enough to define the meaning of "contractorisation", a word that I have never heard before? I do not know 756 whether it is in the Oxford Dictionary, but it has never been brought to my attention at any stage. Is it privatisation by another means? The Statement says that the Government:consider that the best way to address these problems is by full contractorisation, with the land, facilities, and other assets remaining in the Government's ownership".Will he be good enough to define what is left? Secondly, on the question of security, which has been raised effectively by other noble Lords, is it possible for those contracts to fall into the hands of foreign firms and contractors? It is important that in the public interest the Minister and his right honourable friend should define this matter carefully.
§ The Earl of Arran
My Lords, the noble Lord the Leader of the Opposition asked about contractorisation and said that he had never heard of the phrase in that context. I must make it clear that we must ensure that scarce manpower resources are managed effectively and that strong production management expertise exists in view of the increased production requirements from 1992. It is the Government's view that that can best be achieved by a full government-owned, contractor-operated management. That requires legislation. In the meantime, as a first step, we are introducing a management contractor who will concentrate initially on manufacturing and supporting activity at AWE sites. The noble Lord also asked whether the operation would be open to foreign firms. The answer is no. We can ensure that through the application of Article 223 of the EC Treaty.