The future of Portsmouth Naval Base

05.12.06

Mike made the following contribution to a debate on the future of Portsmouth's Naval Base. The minister's reply follows

Mr. Mike Hancock (Portsmouth, South) (LD): I thank the hon. Member for Portsmouth, North (Sarah McCarthy-Fry) for the courtesy of giving me the opportunity to take part in the debate. How right she was to recognise, at the beginning of her excellent and—I hope—persuasive contribution to the debate, the importance of the co-operation that has existed between the local authority, Members of all parties, the unions, the Royal Navy and the partners already in the naval base. It is important to recognise that those partnerships were the foundations of the maritime industrial strategy and when Lord Drayson spoke to the Select Committee on Defence, he emphasised their importance. Moreover, how right the hon. Member for Portsmouth, North was to put on the record the existence of important and well engaged partnerships that are vital to their future success.

The hon. Lady is also right to recognise that we are not trying to score points. It is not the battle of the bases, as some in the west country have described it in a wholly unfortunate and, in some ways, very mischievous manner. I ask that both the Secretary of State, who gave a commitment to visit the naval base before a final decision was made, and other Ministers in the MOD, take the opportunity to visit the city in order to understand what an enormous issue it is for the community in Portsmouth and in south Hampshire generally, and to engage with the partners in the naval base.

Service personnel have benefited enormously from that interaction and through working with Fleet Support Ltd. and VT, which is to the credit of everyone who has put that process together. As we have heard, project dreadnought has already offered significant benefits and will continue to do so. It is not a one-off saving, but an effort on the part of the whole defence community, and the “family” within the naval base, to make those savings ongoing. It is open to close scrutiny and inspection and that process is not a matter of just glossing a report or massaging figures in a particular case. Hard-fought decisions have been taken, some of which have been enormously painful, for the naval base and the Royal Navy, but they have been taken and those savings have been made. Those changes for the better will continue to be made.

I want the final decision to be the best one for the Royal Navy, the defence of the country and the city of Portsmouth and its surrounding area. Our case is well made. The hon. Lady talked about some of the economic issues, and I would add that the base generates about £500 million for the local economy in one form or another. That is an enormous amount of money coming into the city. Most of that process derives from the fact that the traditional home of the Royal Navy is Portsmouth.

When presentations were made at the Defence Committee I tried to explain what I felt was important for Portsmouth. There are five reasons that I see as crucial. First, Portsmouth is the traditional home of the Royal Navy, the home of the Victory and many other historical ships, and it has the only port in the country that could take both new aircraft carriers alongside each other at the same time, which is vitally important. It is the only base in the country, excluding commercial ports, that has the surface area that allows for the carriers’ overhang to be dealt with satisfactorily and is able to provide for their supply or any other support that is needed.

Secondly, Portsmouth is the home of ship arming. Traditionally, ships would come to Portsmouth from the depot in Gosport to be armed. Are we seriously suggesting that we want to engage in the road transportation of vulnerable missiles? If ships were ported in Devonport, they would have to come to Portsmouth to be armed because it is extremely unlikely, if not impossible, that Devonport will be able to secure the sort of arming licences needed. Thirdly, there is the fact that 50 per cent. of the Royal Navy’s married housing stock and its largest concentration of shore-based personnel in the country is in Portsmouth. Fourthly, it is the traditional home of the Royal Fleet Auxiliary Service, which is very important.

Fifthly, I cannot emphasise enough the importance of the partnership arrangements. I listened carefully to Lord Drayson in his ministerial statements and the Defence Committee looked long and hard at the defence industrial strategy. It is founded upon the belief that we can make partnerships work and that they can deliver real benefits for the MOD, the nation and the communities they serve. Portsmouth is a living, existing, testament to that. It would be a sad reflection on that achievement if the Royal Navy and those ships were removed from the city, because they are an integral part of it. It is easy to say that many of those things would not happen, and to say that we would not lose the partnership arrangements because many activities would continue. However, what brings the whole process together is the fact that Portsmouth is the home base for the majority of the Royal Navy’s surface fleet.

I hope that this debate goes part of the way to securing the future of Portsmouth. That is vital for the economy of the city. When I grew up there, 48,000 people worked in the dockyard. As the hon. Lady has said, many changes have taken place and there are now fewer than 200 industrial employees directly employed in the dockyard. However, 26,000 people in the greater Portsmouth area derive their livelihoods from involvement in defence industries. It is vitally important that that continues, and long may it do so.

The Parliamentary Under-Secretary of State for Defence (Derek Twigg): I congratulate my hon. Friend the Member for Portsmouth, North (Sarah McCarthy-Fry) on securing the debate on the future of Portsmouth naval base and for giving me the opportunity to speak on this important issue.

I acknowledge the strong links between the naval base and the city of Portsmouth, which go back for more than 800 years. The people of Portsmouth have provided unparalleled support to the Royal Navy in peacetime and in wartime. I am mindful of my announcement of the planning for next year’s commemoration of the 25th anniversary of the Falklands conflict; the role that Portsmouth played in that conflict should be recognised. I believe that my hon. Friend had occasion to visit the Falkland Islands recently and no doubt witnessed at first hand the stability secured by our armed forces that is now enjoyed by the Falkland Islanders. My right hon. Friend, the Secretary of State for Defence announced on 18 September that we were about to undertake an in-depth review of infrastructure requirements at the naval bases at Devonport, Portsmouth and on the Clyde. He pointed out that the defence industrial strategy published in 2005 laid down a challenge to the UK maritime industry to reduce its overheads and invest in the facilities and skills needed to meet the demands of the Royal Navy’s future warship programme.

We have also made it clear that we cannot expect to rely on the industry alone to achieve the necessary rationalisation to ensure the future affordability of the warship programme. We also need to look at our support capacity at the naval bases, to ensure that it is matched appropriately to the future needs of the Royal Navy. We need to ensure that every penny counts and that resources are rightly focused on the front line. We must not lose sight of the fact that the number of ships requiring maintenance and repair has been steadily reducing. As my hon. Friend has heard before, we must be realistic, and look to the future rather than dwell in the past. That is not to say that we should not celebrate the remarkable achievements of the past, but we need to take this opportunity to consider our future support needs in detail.

Dr. Julian Lewis: Could the reason for the fact that fewer ships require maintenance be that although the Government’s strategic defence review in 1998 predicted that we would have 32 frigates and destroyers, that number has been slashed to 25? Might not circumstances arise in which it will be necessary to increase the size of the surface fleet to that which was originally anticipated?

Derek Twigg: I shall come to that issue about the fleet later in my speech. It would be remiss of the Ministry of Defence not to review the way in which it supports the fleet and not to see how we can improve efficiencies. The naval base review is an important part of the maritime element of the defence industrial strategy. The terms of reference, which are available for all to see on the MOD’s website, clearly show the intention for a wide-ranging review. The review team is currently looking at a number of options, some of which could radically reduce overheads and naval base capacity. The options range from doing nothing, at one extreme, to closing all three naval bases and building a new naval base at a single location at the other.

I emphasise that all options remain open. Ministers and I have made no advance decisions on the future of Portsmouth or the other naval bases. We will reserve judgement until we see the results of the review, which is unlikely to be before spring next year. It is simply far too early to say now what if any impact the review will have on Portsmouth.

Sarah McCarthy-Fry: I should like to clarify the point that my hon. Friend has made about the end of the review. Will the report of the review be available in the spring or will the Department make its decision in the spring?

Derek Twigg: The review will report in the spring, after which Ministers will have to consider it, but we shall make a decision as soon as possible after that. I well understand that that means a period of uncertainty, to which my hon. Friend alluded, for the naval base and its work force, industry and, more widely, the people of Portsmouth and the surrounding area. It is important, however, for the review to take a carefully considered and objective look at how best to meet the Royal Navy’s future support needs before making its recommendations.

I assure my hon. Friend that the review will take account of all the relevant factors, including the findings from other MOD initiatives, such as the developing surface ship support alliance and the home basing strategy, which was chosen with care to reflect the needs of the fleet, including carrier vessel futures and type 45 destroyers. As she hon. Friend is aware, on current plans both the type 45s and the CVFs will be base ported at Portsmouth.

My hon. Friend will be reassured that business improvement activities, such as project dreadnought at Portsmouth, will also be given due weight in the naval base review. The aim of project dreadnought and the efficiency drives at the other naval bases is to deliver savings locally. It is important that those savings should be recognised by the review and taken into account as part of that process. Only by considering all the relevant factors will we be able to determine the best value for money option.

Only when the review has been completed will we be able to quantify the likely costs and savings of any changes to the naval base infrastructure. In the meantime, it would be premature to speculate on what those might be. Initial costs and savings that were identified locally were derived from many sources and have not yet been validated by the naval base review team. The review will, however, be the subject of a robust analysis, including a full investment appraisal, which in turn will be the subject of rigorous scrutiny as it develops.

Mr. Hancock: Can the Minister give an assurance that past, present and future investment plans for the commercial interests in the bases will be taken into full consideration, and that guarantees will be sought to ensure that that investment is delivered?

Derek Twigg: The hon. Gentleman makes an important point. I have made clear what account we are taking of all the issues to which he and my hon. Friend the Member for Portsmouth, North have alluded, although I shall return to that later.

As with any review on such a scale, the team will engage not only at local and regional levels, but with officials in the Treasury and other Departments as necessary. I am fully aware of the mutually supportive relationships that exist between the naval bases and their local communities, which have been strongly emphasised in this debate. We intend to engage fully with those stakeholders who are likely to be affected by the naval base review, including the Government offices for the regions. Indeed, the Government office for the south-east has been invited, among others, to a meeting with the naval base review team later this week. It will be briefed on the aims and objectives of the review, and on the range of options under consideration. Trade unions, too, will have a part to play. Several informal briefings have already taken place with trade unions and more are planned for the new year.

Like my hon. Friend the Member for Portsmouth, North, I know very well how proud Portsmouth is of its links with the Royal Navy. Ministers have visited the naval base on several occasions, and I hope to do so in the new year. I have noted the recent successes, such as the launch of HMS Clyde, which was built in Portsmouth naval base by VT, and the refit of HMS Richmond, which clearly demonstrated the strength of the partnering arrangement with Fleet Support Ltd. None of that would have been possible without the MOD continually seeking to improve not only its front line, but its support functions. I am aware that previous reviews concluded that three naval bases should be retained, but we are in a fast-changing world and the armed forces must adapt as the strategic context alters. Just as we need to ensure that we have the right balance of capabilities to meet modern threats, so we need to ensure that our supporting infrastructure meets our requirements.

To sum up, I am pleased to have been able to respond to my hon. Friend in this important debate. I sincerely hope that she will feel reassured that the naval base review will take into account many of the issues that she and other hon. Members have raised today; not only that, I hope that I have done enough to reassure her that the review is about securing the best value for money for defence and for the taxpayer. Finally, I reiterate that no decisions have been taken about Portsmouth or any other naval base.