HL Deb 13 October 2004 vol 665 cc271-2

3.09 p.m.

Lord Garden asked Her Majesty's Government:

What was the net cost of the sale of four Upholder submarines, taking into account procurement costs, maintenance before sale and the price obtained from the Canadian Government.

Baroness Crawley

My Lords, the acquisition cost of the four Upholder submarines was some £900 million at 1992–93 prices. The value of the lease-to-buy arrangement with Canada, which includes the four submarines, training and initial spares, is some 610 million Canadian dollars.

Maintenance and refurbishment costs of the submarines are commercially sensitive, and I am withholding details in accordance with Exemption 13 of the Code of Practice on Access to Government Information.

Lord Garden

My Lords, I thank the Minister for her partial Answer to my Question. I am sure all your Lordships would like to join me in expressing sympathy to the family of the Canadian sailor who so tragically died in that fire and wish a speedy recovery to the other officers who are injured.

The Answer misses the key point about the maintenance. There were some 10 years between the purchase of brand-new submarines and their being sold on to the Canadians. Will the Minister ensure that the Ministry of Defence conducts a full review into whether the maintenance was adequate during that period?

Baroness Crawley

First, my Lords, I should like to say that the Government wish to be associated with the noble Lord's condolences to Lieutenant Saunders's family and friends.

On the issue of maintenance, the submarine met all appropriate Royal Navy standards for acceptance and was ready for the handover on 2 October. She was ready to be brought into operational service. Canada decided to purchase the submarines after its teams undertook extensive surveys of the vessels and had thorough negotiations with UK MoD.

Lord Berkeley

My Lords, it is a bit like buying a second-hand car—"one careful owner, very good nick, passed the MoT". I feel very sorry for the people who have been killed or injured. Is there not a case for some independent MoT test on dodgy MoD equipment that gets sold off to other people?

Baroness Crawley

My Lords, it is not at all the situation, as my noble friend puts it, that the submarines were dodgy. Canada decided to purchase the submarines after extensive surveys of the vessels and after negotiations with UK MoD. My noble friend will know that, in defence procurement, vessels are purchased and sold on all the time. For instance, we have recently sold frigates to Chile and Romania.

Lord Astor of Hever

My Lords, these Benches would also want to associate themselves with the condolences expressed by the noble Lord, Lord Garden.

Would the noble Baroness tell the House something of the investigation that is taking place with our Canadian allies on what went wrong with HMCS "Chicoutimi"?

Baroness Crawley

My Lords, a board of inquiry has been convened. I hope that the noble Lord will be interested to know that there is a UK MoD representative on that board, which is now in session. It will investigate the incident thoroughly. It would be inappropriate to speculate on the outcome.

Lord Redesdale

My Lords, have the Government made any provision for litigation or compensation to the Canadian Government? If they have no estimates, could they at least say from which budget that litigation or compensation would be paid?

Baroness Crawley

My Lords, I am afraid that it is not possible for me to speculate on these matters as a board of inquiry has been set up. That board will investigate the incident and we cannot pre-empt the outcome of that inquiry. However, as for the costs of rescue, Canada will not be charged for any efforts to prevent loss of life. But it is far too early to say what additional recovery costs there will be and where those costs will fall.

Earl Ferrers

My Lords, in her original Answer, the noble Baroness gave the purchase price in pounds and the sale price in Canadian dollars. Would she be good enough to keep to one currency and let us know what the price was in pounds?

Baroness Crawley

My Lords, I am sorry, as somebody famously said, I cannot do that in my head just now.