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sufficient manpower. So far there is absolutely no British commitment. We are buying more tanks and aircraft and trying to get the narrowest possible definitions in the talks so that we may reduce as little as possible. A wider definition would mean that the Soviet Union would make even greater cuts. The Government's actions are counter-productive. There is no commitment to reduce the number of troops in Germany, and there is little Government policy on the CFE talks. There is poor direction and waste in terms of nuclear weapons.

Of course, the START talks are welcome. If we can get an agreement, there will be a cut of approximately 50 per cent. There are about 6, 000 strategic nuclear arms on each side, which shows the ridiculously high number of nuclear weapons now. There has been no British involvement in the START talks--we have consistently gone the other way. We have said that our capable aircraft must be excluded from the cuts. That was insisted upon by the Government.

We are buying the SRAM stand-off missile from the United States, and there is a big expansion in the free-fall hydrogen bomb. In the 6,000 limit under START, in an aircraft carrying free-fall bombs or short-range missiles, the entire weapon load counts as only one unit. The Government are keen on that, because it is a way of getting around the START agreement even before the ink has dried on the paper.

The same applies to the follow-on to the Lance missile. The Senate Armed Services Committee has said that it might recycle those warheads that were formerly on INF missiles on to the follow-on to Lance and then return to Europe. That is legal under the INF agreement, but it is a way of getting around it, and the Government support the follow-on to Lance.

There is nothing under START to tackle sea-launched cruise missiles--there should be, but the Government have set their face against it. Instead of curtailing sea nukes, Britain's contribution is Trident, which will have about 16 MIRV missiles, each with 14 warheads. If we multiply that figure by the four Tridents, there will be about 896 separate targets or warheads. One Trident skipper can unleash the equivalent of 6,500 Hiroshimas. As well as being terribly dangerous, the project is useless, does not work, and is easily identifiable by radar. Huge ships carry that sort of weapon load, and even the United States is curtailing it.

The Tory policies are a disaster. Conservative Members proclaim their defence policies even though they are a miserable and expensive failure. They are unattuned to world trends, needs and people's desires. All we heard from the chairman of the Conservative party at the Conservative conference last week was a question to Labour : "At the end of the negotiations will Labour get rid of all Great Britain's nuclear weapons while the Soviet Union retains some of theirs?"

That is the argument that Conservative Members will try to use in the next election. It is a ridiculous question. If we all say that we will keep the last weapon, there will never be any cuts and we will never get rid of the world of nuclear weapons. It also makes the ridiculous assumption that Britain and the Soviet Union are the two nuclear super-powers. Of course, the United States, not Britain, is the nuclear super-power. It is up to the United States and

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the Soviet Union to enter negotiations and to give up the last nuclear weapon. Our weapons just get in the way of that process. A question arises for the Conservatives : if the Soviet Union gets rid of all its nuclear weapons--and that is President Gorbachev's avowed aim for the year 2,000--will the Tories get rid of Britain's nuclear weapons? We have had an answer from the Prime Minister. The answer is no, they will not. They want to keep nuclear weapons forever. They say that we cannot disinvent nuclear weapons. We cannot disinvent gas chambers, either, but we can disavow them.

They say that nuclear weapons have deterred war for the past 40 years, but that is not the case. President Reagan said :

"Nuclear deterrence is too risky to rely on long-term." How do we deter a nuclear accident from occurring? That was cheap, slick propaganda and I am sure that we shall hear more of it. Tory policy is useless and does nothing to reduce the risk of nuclear catastrophe. On the contrary, Tories proudly proclaim their commitment to rearmament and modernisation regardless of world events.

I support the policy of reducing our defence expenditure to the same percentage of GDP as that in the rest of Europe. That would release over £5 billion per annum for peaceful purposes. We devote 55 per cent. of our research and development spending to military projects. In Japan the figure is only 2.5 per cent. It is no wonder that it is an economic powerhouse while our economy is lurching into crisis. To cut military expenditure is the way to transform our economy, expand our health and welfare services and release resources to tackle poverty, disease, ecological disasters and international debt which racks the world. The Tories do not have the answer. Their priority is more worthless armaments.

9.11 pm

Mr. Roland Boyes (Houghton and Washington) : We have had a good first day's debate on the defence estimates. Some hon. Members have expressed long and deeply held views and they are respected for them. We have had speeches from other hon. Members who have campaigned for peace in different ways over many decades. Many points were made with which I fundamentally disagree, but the debate benefited from a series of well- informed speeches. I do not intend to comment on every speech, although I missed only one and a half of them.

We welcome the new initiative of a centre for defence studies. I hope that it will be properly funded so that reports can be prepared without pressure.

As a postgraduate of Bradford university, I took exception to the cheap remarks made by the hon. Member for Colne Valley (Mr. Riddick). I hope that the Secretary of State will mention to him that all hon. Members defend academic freedom.

The Secretary of State commented on the new opportunities for understanding and spoke of the massive reduction and eventual elimination of chemical weapons. He also recognised the professionalisation of the forces. I, too, shall mention that, but in a slightly different way.

Nothing has been said today about the warship programme. Many companies wonder what is happening. I hope that the Minister will speak about it and will have some good news and assurances for us tomorrow.

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The hon. Member for Kingswood (Mr. Hayward) is not in his place but my hon. Friend the Member for Clackmannan (Mr. O'Neill) is back. I invited the hon. Gentleman to read the whole speech on conversion instead of the distorted and selected examples from it which he used to make a narrow point. I hope that the Secretary of State will encourage him to do that.

The hon. Member for Glasgow, Govan, (Mr. Sillars) made a long diatribe against the Labour party's policy, not recognising that our policy has changed in response to the change in the international situation. That diatribe was a bit much, coming from the hon. Gentleman. He talked about my right hon. Friend the Member for Islwyn (Mr. Kinnock) making U-turns when, to my knowledge, the hon. Member for Govan has been a member of the Labour party, left that to form another party and ended up in the Scottish National party. I wonder where his career will eventually end. On the strength of the speech he made today, I fancy that I may see him on the Conservative Benches in the near future.

Mr. Sillars : Is not the hon. Gentleman aware that it is much better to change party because of one's principles than to change policy because one has no principles?

Mr. Boyes : One of the most striking things about SDE89--I shall use that acronym instead of saying "defence estimates" every time--is the wealth of evidence that it presents on the failure of this Government's much-vaunted procurement reforms. When Sir Peter Levene was appointed as Chief of Defence Procurement, amid much controversy over his inflated salary and the unconventional method of his appointment, he made reductions in the cost of defence procurement a top policy priority. However, the Government's record on containing the costs of weapons programmes is abysmal.

A brief glance at some naval projects listed in the major project statement in the 1989 document shows that the costs of the type 23 frigate programme have increased by 26 per cent. since last year and planned peak expenditure had been extended by one year to 1993, no doubt presaging further delays and cost increases. The troubled Upholder class diesel submarine is one year later than was predicted last year. The cost of the vertical launch Sea Wolf has risen by a whacking 168 per cent. and that of the sonar 2054 programme is up 29 per cent. on last year.

The Government have also regularly boasted about the number of jobs that defence spending creates in this country. However, as befits a party that has no commitment to maintaining employment levels in any of our key industries, the Government's boasts are hollow, as is shown by the 1989 document. In last year's White Paper the Government claimed that 350,000 jobs were dependent on defence procurement. They do not repeat that claim this year. Why? Well, if one cares to delve deep into the statistical volume of the 1989 White Paper, one finds that the number of jobs dependent on procurement is now only 310, 000--11 per cent. lower than last year's figure. In 1979, when the Government first took office, the figure was 400,000. There has been a drop of over 20 per cent. in the seven years covered by the data. So much for Tory support for the defence industries.

This year's White Paper shows that the equipment budget will be only 41 per cent. of total defence spending in the current financial year as against 43 per cent. last year. That is an all-time low since the Government took

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office. With continued pressure to improve salaries and conditions for personnel in the armed forces, Sir Peter will have great difficulty in maintaining even those levels of procurement spending. At this stage it might be opportune to digress a little to discuss manpower, which many hon. Members have mentioned. The retention of manpower in the armed forces is an area of concern to the Opposition. The 1989 document contains a cautious and typically euphemistic admission that this is an explosive situation, stating :

"Recruitment was more difficult in 1988-89"

and :

"retaining trained manpower has also been more difficult". Last year's "Statement on the Defence Estimates" showed that premature voluntary release rates in 1987 were 3.1 per cent. for officers and 2.7 per cent. for other ranks. It then pointed out that those levels were "fairly stable and compare favourably with previous years".

However, the 1989 figures show that the PVR figure rose in 1988 to 3.3 per cent. for all personnel.

Those figures are bad enough, but the figures for applications for PVR show an even greater rise from 1987 to 1988. That means that a lower proportion of those who have applied to leave the services early are being granted release. I hope that the Minister will see that that is a dangerous and short-sighted policy. Simply forcing people to stay on when they do not want to stores up ill feeling and resentment and is highly unlikely to reduce the rates of PVR applications as morale will decline and other personnel will see at first hand that those with grievances are not being dealt with sympathetically.

I am happy to see from the statistics in the 1989 report that the Royal Navy is doing rather better in terms of recruitment and PVR rates than in previous years, but that does not mean that the problems have disappeared. People on press and parliamentary visits to Royal Navy ships and establishments are still being taken aside by commissioned and non- commissioned personnel alike, told that the salaries and conditions are inadequate and urged to do something about it.

I have experienced some aspects of that. During the Richmond by-election, I went round the Catterick camp. I do not know whether action has been taken at that camp recently, but the condition of the houses was quite horrific. They needed much repair and gallons of paint. It is not right that service personnel should have to live in such conditions.

The Daily Star of Wednesday 11 October had a full page headed "The bitter legacy of loyalty."

The article referred to "brave Lynda Lewis" and said that she "is fighting a desperate battle against the crippling disease multiple sclerosis. Her world is a hospital bed. She is trapped there because of a red tape wrangle which denies her husband the money to pay for her to go into a nursing home. Now the pride that has sustained Staff Sgt. Robert Lewis through 17 years of service is cracking under the strain of watching his wife's pain and a growing feeling of betrayal."

The article also mentions--I shall not go into detail--army wife Sue Brett, who is

"plunged into a social security quagmire."

If the Minister gets hold of this paper, he will see that there are many more complaints.

When my hon. Friends and I were at a NATO meeting with senior military personnel, they talked to us about the

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problems of holding highly trained, highly skilled staff. The brigadier to whom we were speaking put it to us that there were a variety of reasons why people did not want to stay in the forces. I am sure that the Secretary of State will take an early opportunity to talk to senior military personnel about why there are so many who want to leave the forces at present. The cost of training highly skilled, professional military people and then of losing them so easily shows that the Government should look carefully at why their policies are leading to that position.

The Secretary of State mentioned chemical weapons and the hope of eliminating them. This country has enormous potential to play a positive role in many different areas of arms control. Some of that potential has been apparent in the past in the chemical weapons negotiations, and promising progress has been made. There have been some welcome developments on the Soviet side. At the United Nations last month, the Soviet Foreign Secretary said that he favoured an immediate halt to poison gas production. At the Paris conference in January, he announced that the Soviet Union was beginning to destroy its existing stocks of chemical weapons.

Meanwhile, considerable progress was being made in the negotiations at the conference on disarmament. In August, the Soviet Union met one of the long- standing objections of the United States on verification by agreeing to challenge on-site inspections of suspected chemical weapons facilities before a treaty is signed, not just after it comes into force. This development should have satisfied the Americans and our own Government that it would now be possible to verify the claim of the Soviet Union that the stockpile is only 50,000 tonnes.

Mr. Mates : Untrue.

Mr. Boyes : Technical experts--from who we got our

information--appear to be in agreement that the technology exists for proper verification of a comprehensive chemical weapons ban. President Bush, apparently responding to the allegations that the Soviets are always making the running on arms control, announced last month in his United Nations speech that the United States was prepared to cut 80 per cent. of its chemical warfare stocks, pending completion of the treaty, although binary weapons production would continue until all likely chemical weapon possessor countries had signed a comprehensive treaty. There is a long list of countries that have chemical weapons or have a chemical weapons potential. We all accept that getting some countries, such as Iraq, to sign such a treaty is a serious problem. We all agree that these are obscene weapons. All of us must work as strongly as possible to rid the world of them.

Mr. Sayeed : Like other Conservative Members, I share the aim of eliminating chemical weapons. Can the hon. Gentleman say who these experts are and in what publications we can read such pieces of expertise?

Mr. Boyes : I shall write to the hon. Gentleman.

Amid all the applause that greeted the statement, I was worried, as it implied that the United States would never give up chemical weapons production as long as any country was assessed to be capable of producing chemical weapons.

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President Bush's statement was upstaged yet again by the Soviets when the Foreign Secretary announced that the USSR was prepared to give up all its chemical weapons--not just 80 per cent.-- pending signature of a treaty. Last week we heard the shattering news that the United States would keep producing chemical weapons even after a treaty was signed. The announcement did not mention whether this was contingent on what other countries were doing.

This point was made in an article printed in The Guardian on Tuesday 10 October. It stated :

"Analysts and US officials criticised Mr. Bush's decision, which they said would encourage other countries to match the US effort, contributing to poison gas proliferation."

It is obvious that the 80 per cent. of chemical weapon stocks which the United States says that it will give up will consist entirely of the unitary munitions which the Pentagon has been arguing for years are militarily useless, obsolete, leaking and dangerous. That can hardly be described as an arms control initiative. Now we know that the other 20 per cent., which are currently old unitary weapons, are simply being reserved for the binary weapons which will be produced indefinitely.

President Bush says that he has a strong emotional commitment to ridding the world of chemical weapons. In fact, The Washington Post of 21 October quotes him as saying during the campaign for the presidency :

" If I'm elected president, if I'm remembered for anything, it would be this : a complete and total ban on chemical weapons,' Bush told students at the University of Toledo. Their destruction forever. That is my solemn mission.'"

The events of the past couple of weeks contradict what Bush said at that time. I am sure that my feelings are shared by all hon. Members : we all want Presidents Bush and Gorbachev to agree to rid the world of these weapons.

If President Bush wants to be remembered for

"a complete and total ban on chemical weapons",

he will have to change his mind. As Vice-President, Bush used his tie- breaking vote in the Senate to support the go-ahead on binary weapons production, to which his mother strongly objected. His emotional commitment to chemical weapons is rather stronger than his emotional commitment to banning them.

Let us step back for a moment to consider what possible logic there is for this new United States position. Presumably, the United States thinks that it is necessary to continue producing chemical weapons to deter other possessor countries from using them. Think of the countries who are likely to use chemical weapons, such as Iran and Iraq. For the most part, they do not enter into direct combat with the United States of America--certainly not the sort of mass land combat which lends itself to the use of chemical weapons. If the fact that the United States currently possesses chemical weapons did not deter Iran and Iraq from using those weapons, how can it be any different in future? If the United States' stockpile of chemical weapons does not work as a deterrent merely by its existence, we can only assume that a deterrent effect can be achieved only by demonstration and use of the weapons ; but not even the most rabid anti-American would accuse them of being so stupid as to use chemical weapons against a country that had not used chemical weapons against United States troops or citizens.

President Bush has become a hostage to the strong pro-chemical lobby inside the Pentagon. There is no logic to its position. It is simply composed of people who have

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built their careers on chemical weapons. We must be positive, even in the face of such depressing developments from our principal ally. I pay tribute to the fine work done by our own negotiators in Geneva on a convention to ban chemical weapons. I appeal to the Government to make it known to President Bush that Britain does not support his commitment to the continued production of chemical weapons. I hope that when he next speaks to his United States counterpart the Minister will make it clear that this latest United States announcement will make nonsense of any chemical weapons convention, as it will encourage many more countries to start building chemical weapons before a treaty comes into force, quite apart from the effect it will have on the Soviet attitude towards the Geneva talks.

The new US policy on chemical arms control will be a major test of our Government's seriousness about a negotiated disarmament. We should either make it plain to the Americans that we are serious about ridding the world of these insidious weapons, or we should throw away any potential we have to influence positively world events.

I wish to raise a significant question, which arises from the 1989 "Statement on the Defence Estimates", about the role of the Royal Navy's Polaris submarines. Over the years there have been a number of statements by Ministers and officials to the effect that no Polaris submarine has ever been detected or tracked when on patrol. They have always created the impression that Polaris operates in an entirely independent and self- reliant manner, using stealth to avoid detection rather than relying on other systems such as aircraft and hunter-killer submarines to provide anti -submarine cover. In the 1988 "Statement on the Defence Estimates", however, a new role appeared for the Royal Navy--the deployment of our strategic deterrent. This year, that role appears as the first of the Navy's three tasks, in front of the containment of the Soviet northern fleet and the protection of reinforcement shipping. This is an amazing revelation : Polaris is not self-reliant at all, but requires a major effort by Royal Navy and Royal Air Force units to protect it. Since this is now stated officially in the "Statements on the Defence Estimates", will the Minister tell us what level of resources is being expended on the protection of Polaris submarines on patrol? If has been a convention that the cost of Britain's strategic nuclear forces is limited to the capital and operating costs of the Polaris and Trident fleets. It now seems that we should add some of the costs of anti-submarine patrols by ships, aircraft and other submarines, including perhaps part of the capital cost of building some of these vessels.

Does the Minister recognise that this is a fundamental issue? The Minister should explain to the House why the role of protecting the deployment of our strategic deterrent has never been mentioned in the annual "Statements on the Defence Estimates" until 1988, but is now the first of three roles played by our maritime forces. Has Soviet open-ocean anti-submarine warfare suddenly advanced strategically in complete contradiction of US intelligence evidence, which suggests that it has not? Have the hundreds of millions of pounds that have been spent on Polaris refits in recent years failed to produce a vessel that can operate independently and without fear of detection? The Secretary of State's speech was confused, contradictory and lacking in essential detail. He ignored the big issues, such as Ferranti and the new frigates.

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Mr. Tom King : I dealt with Ferranti.

Mr. Boyes : Only when he was pressed on it did the Secretary of State--

Mr. O'Neill : After.

Mr. Boyes : Only after he was pressed did the Secretary of State volunteer anything on Ferranti. We have been told nothing about the new frigate programme, and I hope that the nodding of the head of the Minister of State for Defence Procurement means that we shall have an important announcement tomorrow.

In the struggle for peace, it is clear that only the Labour party has the strategy, the will and the policies that will allow our generation to pass on the earth to its children. That is why it is essential that we rid ourselves of the Government ; and, according to the opinion polls, we are well on the way to achieving that objective.

9.36 pm

The Parliamentary Under-Secretary of State for Defence Procurement (Mr. Michael Neubert) : After three months of the summer recess, andeven longer since our last extended debate on the subject, after the rapid, not to say dramatic, developments in East-West relations and after the extraordinary public outpourings of popular feeling in eastern Europe and beyond, it is no surprise that today's discussion has ranged widely over issues of more than usual interest and topicality. In the time that is allotted to me, I shall try to comment on a number, although not all, of the points that have been made today. I shall also make some comments of my own.

I am sure that the hon. Member for Houghton and Washington (Mr. Boyes) knows that the policy issue of frigates and warships will be taken up tomorrow by my hon. Friend the Minister of State for Defence Procurement if he catches your eye, Mr. Speaker.

Since we last met, my responsibilities have changed. In a widely unpublicised postscript to the Government reshuffle, I have moved across the Ministry of Defence to become the Under-Secretary of State for Defence Procurement. My hon. Friend the Member for Plymouth, Sutton (Mr. Clark) the Minister of State, will deal with the full range of our present projects for all three services and procurement policies in general, and points appertaining to them that have arisen today, when he opens the second day of the debate tomorrow. I shall draw attention to the equally important work going on within the MOD to improve cost-effectiveness and efficiency in the conduct of our business. My right hon. Friend the Secretary of State highlighted some of the main features of this. He gave the broad picture. If the Chamber of the House of Commons were to be compared with the Sistine chapel, he would be Michaelangelo and I would be some dauber in the dark corners. However, I hope to add something to the report to the House that we are making today.

Before I do so, I shall return to the subject of housing, which preoccupied me in my previous armed forces post. In the debate on the Army held earlier this year, I described the assistance that we provide to service men who wish to become home owners and I know that this is a topic of interest and concern to many hon. Members, most especially my hon. Friend the Member for Canterbury (Mr. Brazier), who has made this his subject.

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The hon. Member for Clackmannan (Mr. O'Neill) is now trailing behind my hon. Friend in his enthusiasm for the subject.

It can be argued, and rightly, that, provided that the pay and allowances of service men are comparable with those in civilian employment, they are as well placed as any to enter the housing market. The measures that I described then recognise that many service men have bought and will continue to buy their own homes. However, there is no doubt that, because of the mobility that we require of our service families, particularly in the Army, the service would-be home owner may face practical and financial difficulties that his civilian counterpart generally does not. Of particular concern is the position of the long-serving service man, who finds towards the end of his engagement that the council house that he might have been assuming would be available is not and that he is not easily able to afford a decent family home.

I told the House earlier in the year that one idea which we were actively considering was the establishment of a scheme involving a housing association or associations. I am glad to say that we have now carried that work forward to the point at which we have decided in principle on the outline of a trial scheme and we are about to get down to the detailed work with housing associations. Our aim is for the trial scheme to offer about 60 to 70 homes, with flexible arrangements to buy and/or rent, which will be targeted at longer serving Army NCOs.

I would not suggest that this one step alone will have a huge impact, and not until we are able to evaluate the success of the trial shall we be in a position to decide whether, and if so how, we might take it further. I hope that hon. Members will take this as a demonstration of the importance we attach to this issue and our willingness to explore new approaches.

Mr. Brazier : I am certain that hon. Members on both sides of the House will welcome the fact that the Ministry of Defence is taking a modest step towards trying to do something about the social problem of those who find at the end of their service that they are homeless. However, even if it were to provide several thousand houses, they would be rapidly filled. The problem of those who have already left has nothing to do with the principal problem of premature voluntary release, which is offering a man who joins the services now, or who has joined recently, an alternative to house purchase as a route to owning his own home at the end of his service. As Field Marshal Lord Bramall said in the other place in July, premature purchase of a house leads all too often to PVR. I put it to my hon. Friend the Minister, as he knows only too well, that tax changes will be required if such a scheme is to be attractive.

Mr. Neubert : The scheme is proposed as only one contribution to a range of possibilities for helping serving men and women provide their own housing. It is not intended to answer all the questions that my hon. Friend constantly puts before us.

My hon. Friend the Member for Hampshire, East (Mr. Mates) expressed concern about the application of the community charge to service men. When I first came into post in December 1988, it was a letter to him on this subject that was among my first duties. It is a complex matter that is perhaps not easily discussed on the Floor of the House. My hon. Friend's point is taken, but the decision had been made. It is one that involves shielding

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the serving man and woman from the worst excesses of high-spending local authorities by reason of the requirement for mobility and location in such authorities without removing the general principle of accountability, which is the purpose of the scheme.

My hon. Friend the Member for Hampshire, East is concerned also about shortage of civilian staff. In this he was joined by the hon. Member for Blaydon (Mr. McWilliam). It is true that shortages cause delay in the day- to-day business and lead to slippage in equipment programmes. In response, we redeploy resources to meet urgent needs. Our remedies have been outlined in the report of the Select Committee on Defence. Perhaps the Committee did not give sufficient credit to us for our initiative, which we hope will bear fruit.

I turn to the recurrent theme of value for money. In his opening speech, my right hon. Friend the Secretary of State touched on our New Management Strategy for Defence. This has profound implications for the way that the Department is run, and I should like to say a little more about its history, and about what we aim to achieve. As the White Paper notes, this is the 25th anniversary of the unified Ministry of Defence. A succession of important organisational changes have followed to reinforce this unification, so that corporate decisions on policy, priorities and on resource allocation are taken within a common defence framework.

This process of reinforcing the centre was consolidated in the reorganisation initiated by my right hon. Friend, the Member for Henley (Mr. Heseltine) in 1985, under which the responsibility for advising Ministers on the future size and shape of the armed forces was passed to a centralised defence staff, and an Office of Management and Budget. But the 1985 reorganisation had a second and no less vital purpose : to create the framework for the decentralisation of responsibility for day-to-day management of the defence resources allocated. In short, this means the maximum delegation of management authority, down clear lines of accountability to commands and outstations.

This last aim--delegation--has been on the agenda for some time. As long ago as 1901, the Esher committee complained that, to use its words,

"the entire system of War Office finance is based on the assumption that all military Officers are necessarily spendthrifts, and that their actions must be controlled in detail by civilians". Responsibility for managing resources on the ground remains strictly separated from financial control of those resources. As a result, although our present systems of financial control are relatively cheap and effective , they can stultify managerial initiative. As a result of our reforms, the conditions are now ripe to put that right, and thereby to provide the means of releasing the energies and abilities of managers, both military and civilian, who are close enough to the action to know what drives the costs, but who, hitherto, have been shackled in performing their tasks by the remote system of financial control and by over-detailed instruction and direction from above.

That, then, is where the new management strategy comes in--to provide a framework within which financial responsibility can be more closely aligned with executive authority, to delegate day-to-day management and, therefore, to complete the design that was outlined in the 1985 reorganisation. The ultimate aim is much more

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efficient management of our operating costs to ensure that we can continue to afford the defence that the nation needs and the necessary investment in vital new equipments.

I shall not go into great detail about the mechanics of the NMS, some of the detail of which is set out in the Defence Committee's perceptive report. It is gratifying that it welcomes the strategy. Broadly, we intend to achieve our aim through a threefold programme. First, we will allow our managers new ways of managing. Our new system of budgets, delegated throughout the Department, is aligned closely with the command and management structure itself. Line managers will be given considerable flexibility to decide for themselves how best to achieve their tasks, thereby making the best use of their ability, energy and initiative. That offers real freedom to our managers to get on with their jobs, unfettered by needless control. As the Defence Committee has recognised in its report, effective delegation will be crucial for the new management strategy's success.

Secondly, we will give managers the necessary technical assistance. That will include the system of budgets that I have already mentioned ; a new and more systematic system of planning under which objectives are made clear ; targets for achievement set through management plans that define managers' objectives ; and advanced management information systems.

Thirdly, there will be new structures--and here I am referring to the establishment of the defence support agencies that my right hon. Friend announced in his speech this afternoon. That will not lead, as the hon. Member for Clackmannan suggested, to privatising apprenticeships in the armed forces. The support agencies will remain within the Ministry of Defence, and they will be discrete bodies within the organisation. That will allow us to reap the benefits of the Government's "next steps" initiative, while recognising the particular circumstances of defence.

Our organisations are highly interdependent because, ultimately, we have-- to use the jargon--a single output, the defence of the realm. The concept of defence support agencies will ensure that the organisations continue to be regarded as integral to the fabric of defence, not least because of their roles under operational circumstances within the chain of command.

Mr. O'Neill : That point was recently put to me by some members of the defence unions who were concerned about their career prospects. They believe that, having been civil servants with the Ministry of Defence, if they continue to be employed they will become the employees of agencies that will be responsible for the training of young soldiers doing service apprenticeships within the armed forces. Can the Minister confirm that that is what will happen, because I understand that it is now the subject of negotiation with the trade unions?

Mr. Neubert : Yes, and that is where it should rest for the moment. These are new proposals and we have other proposals. It is important that they should not be confused and that each should be taken on its own.

In addition to a wide range of defence support agencies we are, of course, proceeding with our plans to turn into full "next steps" agencies the two major candidates that we identified shortly after the publication of Sir Robin Ibbs's report--the Meteorological Office and the non-nuclear research establishments.

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As the House will be aware, I announced recently that the Meteorological Office will assume executive agency status in April 1990.

The Meteorological Office already has worldwide renown for its contribution towards meteorological and environmental matters. It is well known to millions, but not everyone is aware that it is in fact part of the Ministry of Defence. Of those associated with the Ministry of Defence, the television weather forecasters are probably the best known and the most popular--present ministerial company excepted.

The Meteorological Office is part of the Ministry of Defence because much of its work involves direct support of all three services, a role which would become particularly crucial in wartime when weather conditions can be of vital operational importance. Therefore, we have decided that the new agency will remain within the ambit of the Ministry of Defence.

Nevertheless, I am anxious that the Meteorological Office should have every opportunity, within that necessary constraint, to manage its own affairs. It will have a new charter, and we will give it peformance targets to encourage a new management approach and to stimulate greater flexibility and openness toward commercial opportunities. I intend that the Meteorological Office should, as necessary, recruit business and commercial talent from outside. That will complement the unique scientific expertise that the Meteorological Office already had.

Our aim in establishing the Meteorological Office as an agency is to improve its management and commercial skills, while retaining the high technical and scientific standards that have placed it as a front runner in its field. This will provide a better service for all its customers, civil and military, and give the Ministry of Defence better value for the operating costs of the Meteorological Office, which amount to some £80 million a year.

The House will recall the announcement on 16 March this year by my predecessor, my hon. Friend the Member for Hove (Mr. Sainsbury), of the Government's intention to establish a defence research agency, made up of the four principal defence non-nuclear research establishments. Those are the Admiralty Research Establishment, the Royal Aerospace Establishment, The Royal Armament Research and Development Establishment and the Royal Signals and Radar Establishment. The Atomic Weapons Establishment will not be included, but we are considering whether other areas within the Ministry of Defence, such as test and evaluation facilities, should also form part of the agency.

We have appointed a chief executive designate, through open competition, to manage the four establishments that will make up the DRA and to prepare the organisation for agency status. Detailed work, of which there is a great deal, is now well under way.

Our aim in establishing the agency is again to get better value for money from our expenditure on defence research and project support. We see this being achieved by a sharpened customer-supplier relationship, and by allowing the establishments greater freedom to manage their resources in response to changing customer requirements. The DRA's primary function will continue to be providing the Ministry of Defence with technological support and

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