My Lords, I declare an interest in that I work for the Cohen Group, a Washington-based consultancy led by a former Secretary of Defence, William Cohen.
I support the idea and concept of a GOCO. However, I also recognise the powerful case made by my noble friend in relation to secondary legislation. We should consider the GOCO because something radical needs to be done about defence procurement. I was Secretary of State for Defence for two and a half years, too brief a period to get to terms with the scandal that has been the continuing story of defence procurement in this country. The story of cost overruns and time overruns is deeply disturbing and worrying.
Over the past weekend, I took part in a security conference in Munich. There was a special session with a number of talented and experienced people talking about European defence and the crisis of diminishing defence budgets in the face of both existing and emerging threats. I made the point in that discussion that we were unlikely to get defence budgets stabilised or increased. Unless the case can be made to the general public that there are threats that need to be dealt with, defence budgets will continue to go down. At the moment, advocacy of the need for defence is missing.
At the same time, the case is consistently undermined by the fact that we do not use existing defence budgets properly or effectively. First, there is a multiplicity of defence projects across Europe which duplicate in many areas what we could do; a focus on items of capability which are related to the Cold War and not to future threats; and the sheer number of tanks and hopeless aircraft in the European arsenal which relate to yesterday’s enemy and not to the future. Secondly, and importantly, a large amount of money is wasted on the way in which we procure defence. As Secretary of State, I thought it was important that we should deal with that issue and look at it radically. In the strategic defence review of 1998, which I supervised, we made radical changes to defence procurement. I am sad that I did not stay there long enough to pursue it. My successors also tried and failed to get to grips with it as well. The term “smart defence” was coined by me at a press conference during my time at the Ministry of Defence, but it has become less and less smart as time has passed.
The saga continues and will do so until something radical is done. The thinking at that time was put together by me and my special adviser, Bernard Gray. He was employed by me—I took him away from the Financial Times, where he was the defence editor, in order to be my special adviser—and I frankly admit that we would not have had such a good and long-lasting defence review if it had not been for Bernard Gray’s clear thinking and his powerful purpose during that time. People criticise him now, but I believe that he is
one of the few people who has the intellectual grasp and dynamic conviction to drive through the required changes. The noble Lord, Lord Levene, was appointed by Lady Thatcher to look at defence procurement, and he made a good fist of it then, but again he moved on before it could be fully put into practice. If my private sector experience since I left NATO has taught me anything, it is that execution is a critical area to focus on to get outputs instead of just excellent inputs.
The GOCO concept is certainly radical—and my noble friend is right that it is in many ways untried—but many people are watching us because many countries have exactly the same problem. We have to look at that. It is sad that the process failed, and that only one competitor—if that is the right word—was left standing at the end, but the process produced a number of proposals, as part of the tendering, that indicated that major savings could be made. There may only have been one left at the end of the day, but each competitor put forward proposals that would have saved the taxpayer money and made sure our troops got equipment much more on time. DE&S+ is second best, but it has to be tried, given the situation. The radical nature of what we have to do is utterly justified by the fact that our troops do not get the equipment at the right time and in the right form, and the taxpayer also pays well over the odds for it. If we do not think radically, the same old mess will continue.
However, my noble friend has made a powerful case for the GOCO, having been shunted into a siding, remaining there until it is a reality and we have had time to test it properly—and secondary legislation is not the right way to do that. Therefore, Amendment 25 is a good way of making sure that when the day comes, as I am sure it will, when we go down the GOCO route, there will be the proper scrutiny that the idea deserves.