HCDC INQUIRY – NATIONAL SHIPBUILDING STRATEGY [EXTRACTS] – 28 February 2017

Q1/2 Chairman [Dr Julian Lewis]: Good morning, Sir John, and thank you for coming to see the Defence Committee to talk about your independent report. Before we start our question and answer session, would you kindly say a few words ... about the status of this report, which we understand is to inform the national shipbuilding strategy, which of course has yet to be published by the Government? They say it will be in the spring some time ...

Sir John Parker [Independent Chairman, National Shipbuilding Strategy]: It was clearly to inform the Government. I was not arrogant enough to believe that I was the Secretary of State and the Chancellor rolled into one that I could dictate matters. I was given an absolutely free hand, and I would pay tribute to the Secretary of State for Defence for that. I was not leaned on, and I think people probably realise that they should not lean on me. The Secretary of State was very supportive. I saw him several times during the course of the review to advise him where I had got to. A lot of effort had gone into the report, and I was heartened that it was published without any word redacted from it. It gave me considerable encouragement that it was taken seriously by the Government.

Q3 Chairman: Thank you. You produced a helpful covering letter to your report. I will read out one sentence which you emphasised in this letter, before asking Madeleine Moon to start the formal questioning. I take it you regarded this as central to your findings. You wrote,

“The current situation is that fewer (more expensive) ships than planned are ordered too late. Old ships are retained in service well beyond their sell-by date with all the attendant high cost of so doing. This ‘vicious cycle’ is depleting the RN fleet and unnecessarily costing the taxpayer.”

That is at the heart of what you have been trying to address, is it not?

Sir John Parker: It was indeed. I think it was with the grain of this Committee’s concerns that have been expressed in your various reports. If I remember it correctly, your November report clearly set out the decline in the frigate fleet as the 23s are phased out between 2023 and 2035. By that time most of them will be 32 or 34 years of age. Frankly, this is way beyond the sell-by date. That was indeed one of the points. That is not a free option ... We are trying to address two fundamental things. One is the SDSR review that wanted to ensure that the frigate numbers and the total numbers – 19 surface ships – should not decline, and I believe the objective was to expand that again. If we come back to the diagnosis that you just read out, the fact is that – taking Type 26 – there were 12 that were originally planned, and in fact eight are now being budgeted for. If I cast my mind back to Type 45, that is also a reduced number. It is when these designs have matured and the final cost realised after a number of years at work. The ships have been more expensive than planned. Not only are the numbers reduced because of that, they are then ordered much too late, so you have a compounding effect.

I will touch on this later, but it is worth mentioning that part of that ordering too late is clearly associated with the fact that, unlike other infrastructure projects in the country, the ships do not have a capital budget that is, in my language, ring-fenced, or assured as we say in the report. That means that, because of the cash system inside MoD, there is an arbitrary pushing back of programmes to accommodate the cash needs. In my commercial world, if we embark on a large project – be it a ship, a mine or whatever it might be – the board will set aside the capital to see that project through, because we all realise that time is money, and projects moving to the right is a very expensive uplift cost on the project itself.

In this case, the situation is compounded because of the need to then keep old ships running much longer than they need to. The result is that you are having to pile a lot of money, capital, into those old ships to cover refit and maintenance costs. Frankly, it is a nightmare for the operators. It is a nightmare for the engineers to have to operate very old ships like that – big demands on the engineering teams. Those ships really should have been sold earlier to other nations as part of our export. Second-hand export is also good business.

You have this vicious cycle of cash consumption that is depleting the RN fleet and costing the taxpayer much more money than it would have done if we had a real grip on defining the specification of the ships in the first place and ordered them on time, to a given timescale and to a fixed capital spend. That is the only way you will break into this vicious cycle.

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Q11 Ruth Smeeth: You also argued for “set and assured” capital budgets for each new series of ships. How feasible do you think that is, given that the Treasury holds the purse-strings? Should the Treasury be involved and accountable for the delivery of Royal Navy programmes?

Sir John Parker: It is very important that the Treasury appreciates whatI am trying to say; from the conversations we have had, I believe it does. First, if you are messing about with a programme every 12 months in an arbitrary way and pushing it to the right – you just have to look at table 1 in my report, which shows the lead time from concept to actual contract for a series of ships. From concept start to contract – conceptual to contract – it took two years for Type 21; six years for Type 23; and 19 for Type 26. None of us can be proud of that.

The answer is that the issue has to be addressed. Every year you push contracts back, you have massively added to the cost. In this case, you have a double-whammy because you have kept on the old ships for much longer. Keeping ships to 34 years of age, in my view, is just not a sensible commercial budgetary use of cash. There are many reasons for that.

Q12 Ruth Smeeth: Do you think that one of the complications is that the process, as you have clearly outlined, crosses over different SDSRs?

Sir John Parker: That is an issue, but what we are recommending is that the sponsor should have a programme of renewal of the fleet within the right time windows to avoid the amount of money being spent on old ships.

In fact, at one point in the report we recommend that the RN look into the optimal time to retain a ship in service before you sell it and have to spend a great deal of money on its refit. What is the crossover point? I don’t know, because I haven’t done the exercise, but we should be able to work it out. We recommend that they do that, because there is an export market for second-hand ships. It is important that we keep that in mind in the country. There are certainly very expensive bills to be paid if you keep these ships running so much longer. This comes back to the fundamental question for the Treasury, which is economic contracting and economic retention of the number of ships in the fleet.

Q13 Ruth Smeeth: Given the inherent tension between the Treasury and the MoD on these issues, do you think that assured capital budgets for the Royal Navy may be a better way to have these contracts, so they have a clear cost envelope from day 1 to guarantee it?

Sir John Parker: Yes; I have no doubt of that. A lot of the money in large capital projects is defined by the time it is contracted. If you leave it longer, greater technical obsolescence creeps in, redesign creeps in, ship size can change, the specification gets changed, and before you know where you are you end up with a ship that is more expensive than you first thought.

Part of that is the time shift. That and the specification in my view has to be gripped by a new governance approach that says, “Look, this is the budget, this is the timescale, and you’ve got to organise yourself,” in the way that I just discussed with your colleague. It has to be set up in in that way so you can contain cost, give the Navy what they need and produce a design that is export compatible. We are not selling any naval ships for export at the moment, and we haven’t done for quite a long time. Part of the reason is that we do not design with export in mind, but you can do it.

Q14 Chairman: We will be coming on quite soon, but not just yet, to a detailed examination of the whole frigate programme – the Type 26 and the Type 31e, as you dubbed it. I would just like to get one point clear about the idea of a fixed and allocated budget. What you are saying is that, if there is new ship design and the Government are going to introduce that new class of vessel, there should be a sum of money specifically and strictly allocated for that whole project right at the outset.

Would I be right in thinking that what you are saying should be done, for example, in the case of the frigate replacement programme – or, in this case, programmes – is something similar to what I understand has been done in relation to the Successor submarines? It has been stated right at the outset, regardless of the fact that it’s going to take a long time to build them and that they are very complex and expensive, that there is going to be a budget of £31 billion allowed with an extra £10 billion contingency. Presumably, that is it – that’s the pot of money. That gives certainty. Are you basically saying that they’ve got it right for Successor, and that they ought to be using the same or a similar model for these other major naval shipbuilding projects? Is that the point you are making?

Sir John Parker: You expressed it much better than I could. This is a very crucial point, in my view. We would not have built the Olympics on time had we not allocated a ring-fenced, or assured, capital budget. To us, we have done it and brought it in under budget. You would not commit to Crossrail 2 without the same approach. You are right: you have highlighted the nuclear submarines. I believe – and we are talking about a much smaller pot of money, in terms of Type 31e – that whatever the number of initial ships in that batch, you should ringfence the capital for that batch. That has a lot of economic advantages.

Provided it is ordered on time and that the governance model I have suggested is in place to control the specification, the naval standards and all the things that contribute to cost, so that they are controlled and within that timescale, you are then assured at the outset that you have matched the design and specification requirements to that cost base, plus contingency. The contingency will be based on a risk assessment of where the design risks are likely to be. You will allocate some of that to the project director – we have suggested the MoD – and the other should be allocated to the contracting board that will oversee the contract with the principal contractor.

That is another important point. When you come to contracting, you freeze the design and specification and no further change is permitted unless the delivery board, which will have a contingency, is prepared to accept that there will be no change to contract time as a result of introducing a particular change. It is that rigid discipline throughout that breeds success in big projects.

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Q21 Chairman: At this point, I want to plunge into the specifics of the whole issue of the frigate replacement programme. That will take a bit of a while and then we will come back, if we may, to the issue of exportability, for example. I appreciate that your particular task was to try to construct – correct me if I am wrong – what is effectively a new management model at the highest overview level, so that in future any major Royal Navy shipbuilding programme will try to conform to a more rational and controlled system, rather than one that, as you said, in the Type 45 destroyers, for example, started with a tentative plan for 12 ships, then eight and ended up with six, because of all the changes, delays and modifications along the way.

I am just going to try to take you through some of the elements of that, particularly in relation to the frigate programme, because that has to be our concern. You referred to our report that we brought out on 21 November last year. I hope you felt that we were getting to grips with it in a sensible way, and I would like to take that further. I am looking to finish off with the virtual shipbuilding industrial strategy. I am looking at figure 4 in your report. There you have got this list of seven shipbuilders: Cammell Laird, Babcock’s at Appledore, Harland and Wolff, A&P, Babcock’s at Rosyth, BAE on the Clyde and Ferguson Marine on the Clyde.

I want to get clear what you are saying, for the benefit of anyone listening. You are saying that the virtual shipbuilding industrial strategy means that instead of just having a frigate factory at BAE Systems on the Clyde, this network of seven shipbuilders would be building different blocks of these ships in different locations and then they would all be bolted together, as happened to some extent with the Type 45s and a much greater extent with the carriers. Could you just confirm that? In that case, incidentally, why do you use the word “virtual” in that context? It does not automatically resonate for that context.

Sir John Parker: No, I agree. It must be the computer age we live in, I think.

Q22 Chairman: Maybe it is “virtuous”.

Sir John Parker: First of all, it is trying to convey an industrial model. It is very important to note that it has to be led by a lead contractor or an alliance, as was the case with the carriers, and that that lead yard has to have the balance sheet strength and the project management capability and knowledge to subcontract with these yards.

Q23 Chairman: On that point, and so we can knock these things on the head as we go along, are you saying that the lead, what might be called the “integrator” or the “assembler” –

Sir John Parker: Yes – “integrator” would be a good word.

Chairman: That the “integrator” could be BAE Systems, but might be somebody else?

Sir John Parker: Correct.

Q24 Chairman: Any preference?

Sir John Parker: It is not my job to say which yard should do it, but I have highlighted in the report that it could well be BAE, or it could be others. There are not many we have identified. Clearly Babcock and BAE are the two that are now heavily involved from the UK in the carriers and, of course, Thales of France is there. We have said that either a consortium or a separate lead yard is the right way to do Type 31. There was one overriding point that came through in the various studies inside the MoD, which was that we are at a unique point right now, because the series of eight 26s is about to be contracted this year. Those eight 26s alone will not take care of the decline that you noted in your report between 2023 and 2035, so if you are going to maintain the number at 13 frigates, that requires a separate Type 31e stream coming along at the same time.

Q25 Chairman: Forgive me if this is a little bit like a dialectic. I hope that is okay, notwithstanding the Marxist overtones, because we need to try to get these components – [Interruption.] A few chuckles from my Labour colleagues there – safely nailed down. You referred to that part of our report. On page 19 of our November report, we have the out-of-service dates for the existing 13 frigates, which are, of course, all Type 23s. HMS Argyll is the first to go in 2023; HMS St Albans is the last to go in 2035.

If we are not going to fall below what we regard as our existing already inadequate total of 19 frigates and destroyers, including the 13 frigates – the Type 23s are leaving at the rate of one a year and we have the new complex warships that are supposed to be coming in – do you think it is realistic to build just the eight Type 26s from the outset and not start on the build of the Type 31e frigates until the eight Type 26s were constructed? We would be able to bring in a new Type 26 with a steady drumbeat to match the drumbeat of the Type 23s leaving service at the rate of one a year.

Sir John Parker: First, let us take the 26. As I understand it, the contracts, which are under final negotiations for the eight ships, will be to start work – to cut steel – this year, ’17, and the last ship of that series will deliver sometime in the early to mid-2030s. That is eight ships.

Q26 Chairman: I have seen 2034 for ship eight.

Sir John Parker: Somewhere around 2034. That is those eight ships. If you then take your report for the 34 or 35-year-old Type 23s, you will have a deficit of at least five ships. That is why the current situation, where we are today, requires a series of Type 31e frigates to start urgently – as a priority I have said in my report – so you can build at least five ships. My view is you could build five ships by 2030.

Q27 Chairman: So what you are saying – and this is a critical point – is that unless we start building the Type 31e frigates in parallel with the Type 26s, there is little chance of not reducing below our existing figure of 13 frigates all told. That, I must say, fits in with the projections I have seen and it follows from that, therefore, that we have to consider the best way of building two classes of frigates in parallel, rather than in succession.

Sir John Parker: Correct.

Q28 Chairman: One of the ways you have in mind is that, presumably, BAE Systems would concentrate on the Type 26, and BAE Systems or Babcock might be the integrator for the Type 31e frigates, which would be built in blocks around the country. That raises the question that, if we were to start with a whole new concept for the Type 31, as far as I know, the design work has not even begun. The suggestion I have heard is that it might be much more practical and possible to take the existing design for the Batch 2 offshore patrol vessels and enhance and enlarge it to create a general purpose light frigate that could then be brought into production relatively soon.

Do you think there is much chance of being able to get the Type 31e programme up and running in the sort of timescale you are talking about – if we are not going to dip below the already low totals we have – if we had to have a brand new design? What do you think about the suggestion that we ought to take an existing design from the large offshore patrol vessels – the latest type – and adapt that for the general purpose frigate?

Sir John Parker: We are trying to attack two issues here, at least, my report was directed, effectively, to look at two issues: the decline in fleet numbers and how you arrest that, and secondly, how you have the opportunity to start exporting ships again. I, personally, am not in the business of choosing which design to go for, but I am convinced that, with modern digital engineering and so on, you can get a new design on the street in time and build in this way.

The reason for distributing in this way is that you can massively reduce the cycle time of building. So, instead of building sequentially in one facility, if you are receiving the blocks, you massively compress your construction time. That is a very important component of satisfying the delivery of five or six of these ships by 2030 or by the early ’30s. If I were the ship builder, I certainly would have no problem in getting it done. None. With a new design plus construction of these ships in this way, you could keep your frigate numbers up by getting on with it now, commissioning the design and producing a new design that is compatible with the export market.

Q29 Chairman: Can I check that, on this point, you are talking about a new design?

Sir John Parker: Yes.

Q30 Chairman: If we were to start a new design from scratch with a new concept, given the time it took us to design the admittedly much more complex Type 26 frigates, do you think we could still meet the timescale with a brand new design? How do you react to the suggestion that we perhaps ought to take a more mature design from the offshore patrol vessel model, and enhance and expand that, to accelerate the process of design?

Sir John Parker: There are two questions there. One is, can you produce a new design that will meet our end needs and have a long-term export potential around it? You take on the overseas competition in doing that. I will come to your second question in a moment. I have a list of 18 designs from around the world – some of them are from the UK, actually. If I exclude the UK, there are probably about 14 designs that range from 2,400 tonnes to 5,000 tonnes. If you remember, the Type 23 was 3,380 tonnes when it started – it is probably over 3,500 now. I imagine that a new design will lie somewhere in that 3,000 to 4,000 tonne range.

The very important thing is that, whatever design is chosen, it has got to have adaptable features for the export market. We have pointed to one British design by BMT the consultants – Venator. They went out, talked to a lot of overseas navies about their requirements and produced modular choices. They have a standard platform, more or less in line with what we conceived. We met them and discovered that they had already developed such a design. The design is close to 3,800 or 4,000 tonnes. They created a design with modular choices for weapons systems, communications systems, etc., which you can fit on day 1 and retrofit later. There is great flexibility, and they have introduced a lot of plug and play. It is a very modern concept. An important point, because the yards that get the blocks to build have to completely outfit them – it is not just a sticky box – is that the systems engineering has to be done within the blocks as far as possible, so you have minimum join-up of systems. You will quite clearly have some, but you try to minimise that.

If we are going to take on the competition, we need to have the very best modern design, which takes care of the export market. If we decide not to do that, you can widen the camera lens on to different designs, including looking at extending our existing OPV. That is, in my view, quite a long way from a modern tailor-made export with all the options in it that you would need.

Q31 Chairman: I am rather keen that we avoid ambiguity of language, and we have used the word “modular” today in two senses. I just want to clear this up. Sometimes when we use the word “modular”, we are talking about the fact that the ship is built in separate blocks in different places, but that is not what we are talking about here. What we are talking about here is what you described as “plug and play”, and what we called in our report a “template” warship with what we might say are a lot of empty compartments that you can sell to people and they can then plug in different weapon systems, just as we have a rather large gymnasium on the Type 45 destroyers, which was designed so that when we can afford to have a surface-to-surface missile system – which a Type 45 does not have – we will not have to rip the ship apart to fit it.

I just want to check that you are with us on this: what we are saying here is that whether we take an existing design or a brand new design, the idea is that this new warship – the one that we want both for export and the one that we are hoping will start to increase our warship numbers, because it says at least five of these after the eight Type 26s – will be a template and will not necessarily be fully fitted with all its weapons systems from the word go, but will be capable of being versatile and adaptable. Different countries will then want to configure it in possibly very different ways. Do I have that right?

Sir John Parker: You do indeed, Sir. If we can just clarify the language as you have asked me to do, modular construction is as you have described it: the block-build. Modules of equipment is what we are talking about in terms of the menu of choice that an overseas customer would look for, along with the ease of either fitting it now, at time of contract, or fitting it later through life. Upgrades that are done easily would be a feature of modern export-orientated design. A fundamental issue is that we have made T31e deliberately. The “e”, as in export characteristics, is an inherent part of that design so that we do not neglect that in the development of the design.

Q32 Chairman: My last point before I hand back to Gavin to pursue the export points specifically is on cost. I have heard it suggested that if we were to take an existing design such as the Batch 2 OPV and base the new design on that, it might be possible to get up to four or five new ships for what it cost us to build one much more sophisticated and advanced Type 45 destroyer.

Do you think that part of the problem that we have is this tendency – which must now go back several decades in the Royal Navy – to reclassify ships in a rather inflationary way? What I mean by that is that they started off by calling small aircraft carriers “through-deck cruisers”, then what we would regard as “cruisers” became “destroyers” like the Type 45, which has to be a “cruiser” by any standards. “Destroyers” became “frigates”. The idea that a Type 23 does not meet the criterion of a destroyer, let alone the Type 26, is crazy, but that is why frigates are sometimes now put in terms of “offshore” or “ocean-going patrol vessels”.

I can see what the political arguments were for this downgrading, but we are talking here about a new generation of light general purpose frigates, and I would not want the classifications and the rebranding that we have had in the past to stand in the way of getting the right design. What I am really asking is: is there any basis at all for saying that a general purpose light frigate, with the template features that you are talking about, could not be based on an enhanced design coming from what is currently classed as an offshore patrol vessel?

Sir John Parker: I am not saying that. I have not looked into converting existing ships to what we need here, but I am saying that the nation needs to make up its mind. Is it going back into the export market aggressively or not? If it is, you should come up with the very best product because you are going to have competition from this list of designs around the world – France has just developed a new design which it is working on now of 4,200 tonnes – from Spain, Italy, Germany, Netherlands and Holland.

Q33 Chairman: It is a gamble, isn’t it? If we make the ship too sophisticated and too large, and we don’t sell many, we won’t be able to afford to buy that many for our own fleet, and we are not going to get the numbers up, are we?

Sir John Parker: Correct. We have come full cycle into allocating a budget, the time and the right governance model to ensure that you don’t have the explosion of either specification or timescale. We are back to that fundamental question of how to achieve that. I have no doubt that we can massively improve the discipline around this.

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Q37 Chairman: One last point on selling ships to other countries – I can see the obvious advantages of selling new ships to other countries. Historically, when the Royal Navy was very large indeed, in the post-war world, it sold many, many warships to other countries. I think I am right in saying that this was not really a very significant source of revenue, any more than the price of a second-hand car which, the moment you put it on the road, significantly depreciates in retrading value.

Have you any reason to believe that if we were to sell some of these ships after we had had a good deal of use out of them, the revenue that we would receive would in any way match what we had spent in order to acquire them in the first place? Given that we are finding numbers so difficult to sustain, how likely is it that we would want to dispose of these ships, if we had actually managed to build them and take them into the Royal Navy, where they still had years of service left in them?

Sir John Parker: I take your point. What you are suggesting by the sale of one from the line is that if we have an important overseas prospect of selling a number of ships but they need to get them in a hurry, then if the RN were to cough one up to actually help secure the business, why not?

Q38 Chairman: So we would just build a new one for ourselves?

Sir John Parker: Correct. Because we would also have the opportunity to build some others for them, or provide them with support to help them build their own. I think we have to be very flexible in the export market, but you need to have the right product and it needs to be competitive, otherwise don’t enter it.

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Q51 Chairman: We are coming to a close. We have just a few questions about other ships. This is naturally concentrated on frigates: what other ships do you see coming up on the horizon that your new model would bring benefits towards? In the report you mentioned solid-state supply ships.

Sir John Parker: In the report we have encouraged that yards should undoubtedly aggressively tackle support ships for the carrier. With the pound where it is now, our overseas experience with the Royal Fleet Auxiliary and so on, can’t be all that attractive. From what I have learned, I don’t think overseas contracting through that process has necessarily been a massive success – let me just put it like that. I believe that it is up to the home market, and us as an industry – sorry, I am using “us”; I am no longer in the industry, but if I were – to become as competitive in design and industrialised productivity as possible. The industry should be tackling every ship in either the Royal Fleet Auxiliary or the support fleet.

I would see the support ships as a possibility and other ships coming in the future. We also pointed out in the report that, on some occasions, we should look at the conversion of commercial ships for support shipping to reduce budgets overall. In a way, this is what the longer-term planning should be looking at as well. For example, is there a case for mine clearance? Can we use different platforms and entirely different technology today from that available to us when we designed the previous generation?

Q52 Chairman: Let’s go back to the question of the carriers. I had the experience of being in Parliament from 1997 – the year before the carriers were first put forward in the then Labour Government’s strategic defence review – right through to the many delays in placing the order, and the rising price from, if I remember correctly, £2.9 billion to nearly £4 billion over the time.

If your whole management model had been in place, how would that have affected the story of the carriers? The carriers were the largest vessels ever built for the Royal Navy: presumably, if your management model would have worked with that, it would work with anything. Let us just take a flight of fancy. If you would, will you take us through how the carrier story would have been different if your methodology had been applied? For a start, they would have had to put down a ring-fenced budget.

Sir John Parker: I was going to start with that point but thank you, Chairman, for getting ahead of me. I think an assured budget would certainly have ensured that some of the cost that accumulated would not have materialised.

Secondly, I suggest that rigour should apply in the contracting board model of a joint integrated team, with technical challenge from the outside. I have recommended independent technical challenge on, for example, the extent of naval shipbuilding standards and not reducing the capability of the ship. There are standards around it. They have been there for years, but do not necessarily add real value to its fighting capability. You could save quite a bit of money.

We have suggested, as part of the innovation centre, that you have a rigorous review of all naval shipbuilding standards, but, more importantly, that we cost the ones that we believe should be there as options so that those who are specifying understand the commitment they are making to the project in terms of adding money or adding cost. I believe that that would have saved probably quite a bit of money on the carriers.

On change, I am not privy to the build process. I did the review originally for the Navy on whether the carrier was ready for contracting or not. We made a series of recommendations about what should be done and needed to be done before you did actually contract. I think the project overall has been quite a success, if you remove these additives to the cost that are outwith the normal industrial process, because I think sometimes industry carries the can for a lot of things that have happened up the line. Were I to examine it in a clinical way, I am sure I would find a lot of things that have happened that should not have happened with regard to change, which have all contributed to costs.

When I look at these projects today, I think back to those early days when people said:

“There is no way Britain has got the capability to build anything of this scale today.”

Well, the answer is that it has been done and we can take some pride in that. But if we were managing it in a more rigid way upfront, in the way we describe now, you could save quite a bit of money.

That is another point I would like to leave with you and the Committee. The governance that we are proposing here will save the MoD and the country a lot of money over time. If we can build the ships on time with grip on their specification and cost and we avoid retaining old ships for 30-odd years when we should have sold them at 20-odd maximum, we will undoubtedly accumulate significant savings over time.

Q53 Chairman: Finally, are you satisfied that the permanent secretary at the MoD, the Secretary of State for Defence, the Minister for Defence Procurement, the Treasury, the First Sea Lord and his staff, and the captains of industry have all fully gripped and understood what you propose?

Sir John Parker: Well, that is quite a task you are giving me, at the end of a gruelling session. First, I have a lot of confidence in the Secretary of State. I have had absolute support throughout this process. We have been in contact several times, to have updates. Never once did he steer me, and never once did he lean on me; I hope my reputation is such that people would not lean on me anyway. We had Treasury involved in a steering board, as well as No. 10, the high-ranking naval officers and headquarter finance and so on. I have also had discussions with the new permanent secretary, Stephen Lovegrove. He is, I think, quite taken by the governance model we are suggesting here. He is very supportive. Obviously, I cannot speak for all of the industry in any way, but I believe that the industrialists I have talked to see a lot of logic in what I have proposed. Of course, it may not suit everybody, but I believe that the vast majority who have talked to me are highly supportive and realise that we had to navigate a challenging task here: to ensure that Type 31 can become a reality only if there is an industrial strategy around it that allows it to be built with speed and if we get on with it.

Chairman: Sir John, thank you. That was a tour de force. Thank you for the work you have been doing and for appearing before the Committee for five minutes short of two hours. I hope we have set a good example to industry by finishing slightly ahead of schedule.

[For the full transcript of this Defence Committee session, click here.]