House of Commons Hansard Debates for 17 Feb 1994

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involves leasing, might also solve some short-term problems. A further streamlining of management structures and working methods, especially at Navy headquarters, might produce some savings. I look forward to hearing the Minister's comments on the matter, as I fail to see where the further savings, particularly in the Royal Navy, will come from ; it has already instituted its own cost-saving process under the prospect review of naval support structures, which was due to be completed in 1992 but is still being implemented. A further cost reduction exercise will follow the cost reduction exercise that is now in progress. Even with its present force levels, the Royal Navy still faces difficulties in meeting its commitments. I hope that the Minister will shed some light on another concern. Given that the Royal Air Force has no credible missile system that can be guaranteed to bring down an incoming Scud missile, does he believe that the two destroyers or frigates, which under the 1993 defence White Paper will be allocated for the defence--supposedly--of the United Kingdom mainland, will be armed with the sort of missiles that could bring down an incoming Scud ? As the hon. Member for Swansea, East (Mr. Anderson) said, it would be easy for a nutter or zealot to mount a Scud missile unit on a tanker. We have a problem with terrorism, but there is also the problem of people in the near east, the Gulf and elsewhere who are prepared to go to extraordinary lengths to achieve their ends.

The firing system of a Scud missile is very mobile and can easily fit in the hold--or, if properly disguised, on the deck--of a super-tanker. I hope that my hon. Friend can assure me that, given the Navy's skill in bringing down a Silkworm missile while on escort guard duty during the Gulf war, it will be able to do the same should such an emergency arise again. The population of Britain would feel extremely uncomfortable if we had no Patriot-type missiles and no system capable of bringing down missiles in an extraordinary attack which could come out of the blue.

Mr. Colvin : Is my hon. Friend aware that concerns have been expressed about the continued development of what is known as the Patriot 3 ? The Patriot surface-to-air missiles which were deployed in the Gulf were not 100 per cent. effective, but they had a remarkable political effect on the way in which the war was conducted.

Is not that doubly important because the North Koreans are now developing the equivalent of a Scud which would be capable of firing a nuclear, chemical or biological weapon as far as Tokyo? South Korea is another country that needs an important ground-to-air, point-to-point defence system.

Mr. Hargreaves : My hon. Friend demonstrates better than I could the need for such defences.

If our destroyers must be on standby for effective guard duty of the United Kingdom mainland and that is specified as one of our primary defence roles, I hope that my hon. Friend the Minister will assure us that they will be suitably equipped for that task. I should like to make a final point without which the debate would not be complete, concerning the role of the Royal Navy in Bosnia. I earnestly hope that my hon. Friend

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will assure the House that our naval force in the Adriatic will be suitably protected if force through air power has to be used over Bosnia.

It is known that the former Yugoslav navy--now the Serbian navy--has a number of submarines. I am not sure whether the correct intelligence exists as to how many of them are serviceable ; nor do I know, or wish to know, of the deployment of our submarines in defence of our ships which are operating in the area. I hope that when my hon. Friend winds up he will assure the House that we have sufficient operational ships to guarantee their safety.

A tragedy could easily occur by underestimating the number of submarines that the former Yugoslav navy is able to deploy should it be inclined to do so surreptitiously. It may feel that, through a third party or agency, it could in some way flare up the overall situation in the former Yugoslavia to its advantage by such an act. I hope very much that my hon. Friend will be able to reassure hon. Members who have spoken during the debate.

7.52 pm

Mr. John Hutton (Barrow and Furness) : The Minister of State began by saying that this was a time of change for the armed services, and for the Royal Navy in particular. He is absolutely right. This is a time of unprecedented change. We have witnessed a large reduction in the size of the fleet and in the number of service personnel. It is true to say that the Royal Navy today is smaller than at any time since the second world war.

Underlying all the changes in the Navy is the rapidly changing international climate. The end of the cold war generated hope and optimism about the future, and rightly so, but it also created major uncertainties. There are still significant threats and dangers, as the crisis in Bosnia and the Gulf war clearly demonstrated. The debate tonight gives the House the opportunity to scrutinise the Government's record while managing the Royal Navy through that difficult period of change. I must say that the evidence to date is not impressive.

There is a lack of direction and focus to our whole defence policy. That is not just my view--it is the view of the Select Committee on Defence. A number of hon. Members have praised the activity and work of the Select Committee during the past three years, and I want to add my voice to those opinions. The Committee has done an excellent job in drawing attention to some of the problems and deficiencies in the Government's defence policy.

Underlying the Committee's concern--Committee members who are present in the Chamber may correct me if I am wrong--is the view that, until and unless we get to grips with some of the basic issues about the appropriate range of our defence commitments, we will be plagued by a continuing confusion about important procurement and manpower issues.

It is right that we concentrate at least a measure of our concern on the Government's procurement budget ; not just as it affects the Navy, although that is particularly important to our proceedings tonight and to my constituents. It is true to say that Vickers Shipbuilding and Engineering Ltd. has built some of the finest ships ever to sail under the white ensign. I think that there is genuine cause for concern when we look at the Government's management of the procurement budget.

Using the GDP deflator, defence spending fell by 2 per cent. between 1980 and 1993-94. Defence procurement

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spending during the same period fell in real terms by 10 per cent. The defence budget has fallen fractionally, but the procurement budget has fallen by five times the reduction in the defence budget. We are all concerned with the resources which are available to finance and support our armed services. There must be a reasoned debate on what we can afford and what the resources will permit us to spend. No one can pretend otherwise. There is a difficult public spending climate at the moment, and my hon. Friends know how that has come about.

If we are to maintain the operational readiness and the fighting capability of our armed services, it is essential that we at least try to ring-fence the procurement budget whenever possible. If we do not allow our services access to the latest combat technology and weapons systems supported by the necessary software and hardware to allow the systems to work effectively, we will deprive our armed services personnel of the cutting edge. Those are crucial tools which they need to do their job effectively.

Hon. Members must recognise that, in the climate of continuing pressure on defence spending, the Government are unwise to focus to the extent that they have on cutting important elements of the procurement budget. My constituency has experienced the sharp end of some of the harsh decisions taken by the Government. When "Options for Change" was published in July 1991, it represented a devastating blow to shipbuilding in my constituency.

There have been discussions today about the Upholder class. I emphasise the value of Upholder as a class and as a weapons system. When Upholder was being built originally, the Navy was expecting 12, and that has not been mentioned tonight. At a stroke, when "Options for Change" was published, that was reduced to four.

The consequences of that decision are that we will have no Upholders serving in the Royal Navy at all. That is a serious loss to the operational capability of the Navy and to support services, especially secret forces which are landed as part of secure operations and intelligence units.

In addition to the eight Upholders which disappeared from the budget, we lost another six SSNs which were planned by the Government. That random and unscheduled cut caused complete devastation to the naval shipbuilding industry, which must operate on a long-lead basis. The industry simply cannot be asked and be expected to cope with a sudden decline in the volume of its anticipated work.

The redundancies have followed as night follows day. In the past three years, almost 8,000 shipbuilding workers in my constituency and many thousands in other constituencies have paid the price of that with the loss of their precious jobs. So tonight we need to keep our focus firmly on the issue of procurement. Without an adequate supply of the right equipment at the right price, the effectiveness of our armed forces will be seriously compromised.

I want to deal with some specific issues that relate to the Navy and to my constituency. First, when can we expect the tenders to be issued for the next round of type 23 frigates? There is a serious delay in the Government's timetable for ordering those important ships. The ships were to have been ordered in 1993. That did not happen. Now it looks as if the ships will not be ordered until some time in 1995.

Anyone who has a knowledge and grasp of shipbuilding knows that such delays cause serious difficulties for shipbuilders and shipbuilding workers. There must be a

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doubt about whether the new timetable for ordering the type 23s is compatible with the Government's commitment to maintain an adequate frigate force. The delay will also involve serious industrial consequences which will mean additional redundancies among our naval shipbuilders.

Secondly, what are the Government's plans for the batch 2 Trafalgar class? When can we expect orders to be placed for those boats? The whole programme has been the subject of extensive delays all the way down the line. That has meant additional heavy redundancies at VSEL. It is worth pointing out to the Minister that the last

nuclear-powered hunter-killer submarine to be ordered by the Government was HMS Triumph, the last of the Trafalgar class vessels. The order for HMS Triumph was placed on 3 January 1986. That is eight years ago. Such a delay in the ordering of a new class of strategic submarine nuclears has been immensely damaging to the naval shipbuilding industry of Britain.

I am sure that there is consensus in the House--I have agreed with virtually all the speeches that I have heard tonight--that it is vital for our strategic long-term defence interests that we maintain an effective SSN -building capability in Britain. That requires not only the building facilities but the crucial design teams. The whole infrastructure that goes into a new generation of ships, which is vital for the defence interests of Britain and our allies, has been compromised by the extensive delay not only in ordering the batch 2 Trafalgars but in the original decision not to proceed with the SSN20 programme. We can argue the toss about whether we need this or that sort of boat or how many boats we need ; but we are playing with our fundamental ability as a shipbuilding nation to provide the vessels. I hope that the Government will act quickly to confirm that they will be ordering the batch 2 Trafalgars in the near future, and that they will stick to a programme that will allow an SSN fleet of at least 12 boats to be maintained ; or is it the Government's intention to reduce yet again the number of SSNs that are available to the Royal Navy ?

Thirdly, are we any nearer a decision on the results of the study into the afloat support requirements of the Navy ? Do the Government intend to order any new auxiliary oiler replenishment vessels ? What progress has been made with the new auxiliary oiler class ? Fourthly, what are the Government's plans for the replacement of Fearless and Intrepid? That issue has been raised by hon. Members on both sides of the House. It is fundamentally important to the ability of the armed forces of the United Kingdom not only to contribute to amphibious military operations in the NATO area but, on a wider scale, to support United Nations' operations around the world. We must retain that amphibious capability.

Other hon. Members have spoken about the need for two replacements for Fearless and Intrepid. It is essential that there are two replacements. There is an inherent danger in retaining a one-ship class. When it comes to the amphibious capability of the Navy, it is essential that we retain two of those assault landing ships. Certainly the shipbuilding community of Britain looks to the Government to make it clear tonight that they intend to order two of those boats and that decision is imminent and will be made this year.

Fifthly, I wish to raise the matter of the new common generation frigate. There has been some anxiety about the timetable that the British Government are operating for the

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award of the prime contractorship in the United Kingdom. An intense competition is taking place between British Aerospace and GEC on the one hand and VSEL and Hunting as an alternative rival bidder for that prime contractorship. We need an imminent decision on that. It is probably the single most important naval procurement decision that remains to be taken this decade. It will affect the structure and shape of the British naval shipbuilding industry well into the next century.

I hope that, underlying that decision, which is eagerly awaited in the shipbuilding community, there is recognition on the part of the Government that whatever decision they take they must act to ensure that the naval shipbuilding industry remains competitive and that there is a variety and multiplicity of providers in that industry. It would be a serious mistake-- we have seen it made already in the case of Swan Hunter--for the Government to pursue a procurement policy which operates in an anti-competitive way. It is important that we keep the maximum number of naval shipyards in Britain to provide competition and crucial employment and maintain the skills base that has been built up over generations in the shipbuilding communities. Another question that the Government and hon. Members must consider tonight is how many new common generation frigates will be ordered. What is the present position on the eventual size of that new fleet? There has been some informed speculation that the numbers will drop from 18 to 12. That would be serious. We must seek to ensure that, certainly in Britain, there is a one-for-one replacement of the type 42 destroyers. That will require a British build programme of at least 12 of those new generation frigates.

The last point that I want to raise is the Malaysian arms deal signed by Lady Thatcher in 1988. There has been a great deal of press speculation recently about the implications of that deal and agreement, and how it has affected British naval shipbuilders. Many Opposition Members look to the Government to come clean on the full extent and implications of that agreement. Is there any truth in the suggestion that GEC and British Aerospace were handed control of decisions about which a British defence contractor was eligible for work under that agreement? That is an important issue. It has affected not only my constituents but the constituents of other hon. Members who represent shipbuilding communities.

As I understand the original agreement between the British and Malaysian Governments, there was a possibility that submarines would be ordered by the Malaysian Government. That has simply not happened. Miraculously, under the terms of that agreement, instead of submarines which could well have been built in my constituency being procured from Britain, a number of frigates were ordered by the Malaysian Government and placed with GEC at Yarrow.

It is important that the House is informed to the fullest extent possible about the accuracy of those allegations and the role of the British Government in subsidising those defence orders. We are not talking about trivial issues. We are talking about fundamental issues of openness in government and the decisions that have affected the shape

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and size of the British naval shipbuilding industry. I know that many hon. Members will be interested to hear what the Minister has to say about that.

I shall finish my comments on that note because I know that there are still many hon. Members who want to speak. To summarise, this has been a unique debate for me because I have agreed with just about every speech that I have heard. It is good to know, for the sake of the health and quality of our armed forces, that there is a consensus in the House about the need to maintain our armed forces to ensure that they have the right equipment at the right time to do the job that we want.

We are entitled to be immensely proud of the contribution that our armed services have made and continue to make to public life. We owe it to them at least to ensure that they have the right equipment at the right time at the right price.

8.8 pm

Mr. Robert Hicks (Cornwall, South-East) : This is the first occasion on which I have had the pleasure of following the hon. Member for Barrow and Furness (Mr. Hutton) in a defence debate. Although I do not wish to follow precisely his remarks about procurement, some of the issues that I wish to raise relate to the procurement policy decision-making process.

When I was preparing my remarks for this annual Navy debate, one word repeatedly came to mind. It was "uncertainty".

That recurring theme manifested itself--whether in respect of Britain's defence requirements and capabilities over the next 20 years or more, or in relation to decisions that have been, or will have to be, made about the Royal Navy and their impact on the south-west region and the Plymouth travel-to-work area, part of which includes my constituency.

We were all excited when the Berlin wall came down, symbolising the end of the cold war. Subsequent events in the former Soviet Union and eastern bloc countries also caught our imagination. Few, if any, could have predicted the sequence of events that followed. Before those events there was a certain predictability--I hesitate to use the work "cosiness" in this context--and, in practice, both the western world and the east knew where they stood.

Since the Berlin wall came down, that predictability has been replaced by uncertainty and, sadly, increasing instability, particularly in parts of Europe and the former Soviet Union. Initially we talked about the peace dividend and the Government produced "Options for Change". I must confess that, as a layman, I find myself repeatedly asking where it will all lead. We now have the study "Front Line First" and are entitled to ask what the United Kingdom's defence objectives and responsibilities for the early part of the 21st century are, what strategy we will pursue and what defence capability we will require. In the context of tonight's debate, we ask those questions in relation to the Royal Navy. I sometimes wonder whether the Government, as a collective body, rather than the Ministry of Defence, are clear in their own mind about those responsibilities and objectives. We seem to have a series of decisions about requirements, capabilities, sizes and many other issues but, taken together, they hardly add up to a clearly defined and recognisable defence strategy.

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As well as having implications for our national defence and security--let alone our international obligations-- that worrying position has a direct bearing on the south-west. The south- west region has the highest dependence on defence and defence-related activities of anywhere in the United Kingdom. That is certainly true in the Plymouth travel-to-work area. I shall concentrate on two specific aspects ; the surface ship refitting programme for the Devonport dockyard and the Navy's manpower requirements.

HMS Raleigh is located in my constituency. It is the shore base where all the non-officer intake into the Royal Navy, both male and female, undertakes their initial training. Any announcement about the Royal Navy's manpower requirements will have direct consequences for HMS Raleigh and the Torpoint community. HMS Raleigh has the capacity to provide initial training for more than 4,000 non-officer recruits per annum. In the past three years, the numbers passing through HMS Raleigh have been 1,200, 800 and, last year, 800--a total of about 3, 000.

All of us understand that manpower requirements of the Royal Navy are changing. However, the figures show that, in a few years' time, the Royal Navy manpower planners could experience serious problems in terms not only of absolute numbers but of ensuring that they have at their disposal both adequate numbers in all the necessary skills available and the right balance of those manpower skills.

Mr. Donald Anderson : Does the hon. Gentleman agree that, if those figures are put alongside the alarming loss of our seafaring traditions as a result of the decline in the numbers of merchant marines, they add up to a serious problem?

Mr. Hicks : I made it clear that I viewed the recent trends with genuine anxiety. In five years or so, the products of the past five years' training will move into senior non-commissioned posts in the Royal Navy. We are not talking about office manpower requirements, when one can advertise, recruit and train in a comparatively short period but about highly skilled young men. Will my hon. Friend the Minister bear that fact in mind, because it worries me? I know that those involved in the training of those young men are equally worried.

The projected work load over the next five years at the Devonport dockyard is another important issue. Since last year's Royal Navy debate the important Trident refit contract decision has been made. Naturally, I was pleased that the contract was awarded to Devonport. At the same time, Ministers announced that, as part of the offset arrangements, Rosyth dockyard would undertake 16 surface ship refits and one carrier refit over the next 10 years. I do not tonight wish to enter into a debate on the merits of that decision, but the economic results of the decision are questionable in terms of providing value to the taxpayer.

My principal worry relates to the position of the Devonport dockyard before the Trident refit work materialises at the turn of the century. I gather that, over and above the Rosyth allocation, 11 frigates and destroyers will require refits between now and the year 2000. Devonport has provisionally been allocated just three of those 11--HMS London later this year, HMS Norfolk in 1995-96 and HMS Marlborough in 1997-98. To put it bluntly, that work load is insufficient to ensure the viability

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of Devonport over that vital period. It is essential that Devonport is allocated more Ministry of Defence refit work.

If Devonport is not allocated more refit work, further job losses will occur that could have implications for its ability to retain the current skill mix in appropriate quantities to service the strategic deterrent--I do not say that lightly. That is the dilemma facing the dockyard managers at Devonport. The Ministry of Defence can resolve the problem through enhanced surface ship refit allocations. If Ministers do not recognise that, further job losses will occur. Ministers should also acknowledge that below a critical employment figure, unit labour costs rise and Devonport could then be placed at a disadvantage in terms of competitive tendering.

I am sure that Ministers do not want that unsatisfactory state of affairs to arise, but the remedy lies in the hands of Ministers at the Ministry of Defence.

Several hon. Members rose --

Mr. Deputy Speaker : Order. I understand that the winding-up speeches are to begin at 9.20. In the hour remaining for Back-Bench Members to contribute to the debate, six hon. Gentlemen, who have been in the Chamber for most of the day, are hoping to catch my eye. With a bit of co- operation from hon. Members, they may all be successful.

8.19 pm

Mr. Nicholas Brown (Newcastle upon Tyne, East) : I shall keep my remarks brief, Mr. Deputy Speaker, to comply with your wishes. It is a pleasure to follow the speeches of my hon. Friend the Member for Barrow and Furness (Mr. Hutton) and the hon. Member for Cornwall, South-East (Mr. Hicks). I shall take up themes on which they both touched, for precisely the same reasons.

Defence procurement matters are extraordinarily important to communities that rely on them for employment. When I was first elected to this place in 1983, the largest single public sector employer in my constituency was British Shipbuilders. Work at the Swan Hunter shipyard was shared between the Walker yard in my constituency and the Wallsend yard in the neighbouring constituency of my hon. Friend the Member for Wallsend (Mr. Byers). When the parliamentary boundary commissioner proposed, some 18 months ago, to bring Wallsend and Northumbria wards from north Tyneside to Newcastle, East, I looked forward to representing the whole of the shipbuilding industry on Tyneside. Although the decision has come into effect, one or two other things have happened in the meantime.

The hon. Member for Cornwall, South-East wondered what happens when a dockyard runs out of work. I am here to tell him. Swan Hunter is currently in the hands of the receiver. When the company failed to win the landing platform helicopter contract, some 3,000 people were directly employed at the yard and a further 3,000 workers were employed, through sub- contractors, on shipbuilding but were wholly reliant on Swan Hunter as the main employer.

Since receivership, the number of people still employed at the yard has dropped to just below 1,000, and work is fast running out. It reflects enormous credit on the

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remaining management at Swan Hunter, and particularly on the remaining 600 manual workers, that they are able to complete, to the highest quality, type 23 frigates, which are sophisticated vessels, for the Ministry of Defence and deliver them on time in those desperate circumstances.

So that the House understands the range and scale of the blow to Tyneside, may I add that our two other major employers, NEI Parsons (Heavy Engineering) and the offshore oil industry--largely William Press, a subsidiary of AMEC, and the sub-contracting work that it facilitates--are also both laying off men with similar skills. Parts of my constituency have male unemployment levels of 90 per cent. In the shipbuilding community as a whole, male unemployment already runs at 40 per cent. A further 600 people will become unemployed this summer unless the Government intervene or a private sector company can buy Swan Hunter and give it shipbuilding work in the near future.

Therefore, what happens when great defence facilities run out of work is that it is a disaster for the local community that relies on those large single centres of employment, and the disaster is not easily resolved. I hope that the Minister will say how pleased the Ministry of Defence is with the quality of work that is still coming out of Swan Hunter and that he hopes that Swan Hunter will make a transition into the private sector and continue to supply warships to the Ministry of Defence.

Conservative Members have stressed the importance of the intervention funding being secured for Swan Hunter. It is not intervention funding in the conventional sense. It is not an unlimited subsidy for merchant work which a future owner can procure for the yard, but a maximum £7 million, which can sit alongside a private sector merchant vessel order that goes into the yard. That will not happen unless the yard also has a base work load, which means a military work load. At one time I had hoped that, with the type of intervention funding that has been secured. Swan Hunter could make a transition to more general reliance on merchant shipbuilding work and more general engineering work so that its over- reliance on warship building could have been diluted. That is now unlikely to happen.

Time is running out for the Swan Hunter yard. The future for the yard will be as a much smaller, leaner and more efficient warship building company. The intervention funding that has been secured may never be used at all. If it is used, it will be as transitional relief to enable the yard to continue warship building, rather than a step away from warship building as part of--dare I say a defence conversion strategy towards civilian activities. That is an absolute tragedy for the community that I represent. It is also a tragedy for the community which I hope to represent after the next general election, when a large number of former shipyard workers--now unemployed shipyard workers--will be moved into the Newcastle, East and Wallsend constituency, as it will then be called.

The Government have done nothing to help to provide alternative employment or bring new work to the area. I accept that is not the fault of the Minister of State for Defence Procurement. We are asking not for charity for him, but for a fair hearing. We have not had that fair hearing so far.

The decision on the AOR-1 contract cost Tyneside dear. Well over 1, 000 people lost their jobs immediately after

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that procurement was announced. We learned much later from the Public Accounts Committee that the work was carried out elsewhere at an extra cost to the taxpayer of some £58 million. People on Tyneside regard that as unfair. The competition between ourselves and Barrow-in-Furness was not one of two equally placed tenderers. Vickers Shipbuilding and Engineering Ltd. has enormous reserves behind it which it uses astutely enough but which are simply not available to Swan Hunter.

On overseas contracts, the British Government would not even back Swan Hunter in the little contract from Oman for two patrol vessels, which could have led to orders for a further eight vessels. I believe that the Government's influence could have been decisive, but rather than see Swan Hunter get the contract, they let the work go to the French. That contract came at a time when a gesture from the Government would have been seen as an important gesture of confidence in the yard.

The Malaysian contract was a great scandal. The charge against the Government is twofold : if they were playing favourites in an overseas defence order, that is very wrong and unfair to other British companies that would have liked to have tendered for the work on an even playing field. If the British Government used public money to put a concealed subsidy behind the bid of their favoured tenderer, that is not just unfair ; it is positively illegal. I hope that sooner or later the facts are ferreted out and are subjected to the fullest possible public scrutiny.

Mr. Henry Bellingham (Norfolk, North-West) : No.

Mr. Brown : I thought that I heard a Hooray Henry intervention from the playing fields of Eton.

The people of Tyneside are asking for a level playing field. If the Minister can confirm that he is satisfied with the quality of work from Swan Hunter and that he hopes that it can tender for future work from his Department in private sector ownership, I shall be satisfied with his response to the debate tonight.

8.30 pm

Mr. Peter Luff (Worcester) : It is a pleasure to follow the hon. Member for Newcastle upon Tyne, East (Mr. Brown). I can associate myself at least with his earlier remarks, having visited Swan Hunter some three years ago and seen for myself the excellence of the work carried out there.

I should also like to associate myself with the remarks of my hon. Friend the Member for Cornwall, South-East (Mr. Hicks) in all he said about Devonport. I played my own modest role in putting pressure on the Government to secure the Trident refit contract for Devonport. The hon. Member for Dunfermline, West (Ms Squire) is no longer in the Chamber. I hope that we are never forced to choose between Devonport and Rosyth ; they both have a crucial strategic role to play in the defence of our country.

The debate has done a great deal to reassure me that at least the House understands the dependency of our nation on the sea. Some of our constituents are not as aware of that as they should be. The United Kingdom still depends fundamentally on sea power. Even after the opening of the channel tunnel, 90 per cent. of our trade will still enter and leave these shores by sea. In war, securing the maritime supply lines will be an essential challenge to the Royal Navy if our civilians are to survive.

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The origins of the Royal Navy lie in the protection of the merchant fleet. When Henry VIII had his red, white and blue squadrons, there was no delineation between the merchant and military capacity of the Navy. It gradually separated into the red, white and blue ensigns that we have today designating the different aspects of our fleets. The Royal Navy's principal historic purpose has been to secure our coastal waters and protect our merchant shipping. Of course, the Navy has acquired many new roles ; it has to deal with an unpredictable and dangerous world. We have heard a great deal about that today, not least from my hon. Friend the Member for Upminster (Sir N. Bonsor). We should take careful note of the eighth report of the Defence Select Committee which shows the stresses and strains under which the Royal Navy operates.

The least sophisticated, least stable country can easily gain access to the most sophisticated and reliable weaponry. That is a challenge which we must make sure our Navy can face.

My principal purpose tonight is to raise two concerns which my hon. Friend the Minister did not address in his opening remarks. One has been dealt with in a number of interventions and speeches : the relationship between the Merchant Navy and the Royal Navy. The other is ensuring that the hydrographic service is capable of meeting the challenges of the modern world.

I turn first to the Merchant Navy. We have heard a great deal from the hon. Member for Swansea, East (Mr. Anderson) and my hon. Friends the Members for Upminster, for Sevenoaks (Mr. Wolfson) and for Romsey and Waterside (Mr. Colvin) about the crucial role of the Merchant Navy as the fourth arm of the defence of our shores.

If the Royal Navy existed primarily to protect the Merchant Navy in the early days, it is certainly true now that the Merchant Navy has a crucial role in reinforcing the Royal Navy. If the Royal Navy is stretched, as it probably is, ping and I have learnt the crucial role that the Merchant Navy can and should play in meeting our defence needs.

Several hon. Members have referred to the Falklands conflict and the role of STUFT--ships taken up from trade. More recently, in the Gulf war, there was heavy reliance on charter. Different conclusions were drawn by the Ministry of Defence from their experiences. In 1982, Admiral Sir John Fieldhouse said :

"I cannot state too often or too clearly how important has been the Merchant Navy's contribution to our efforts. Without the ships taken up from trade, the operation could not have been undertaken, and I hope this message is clearly understood by the British nation.". At the end of last year in a television interview, my right hon. Friend the Secretary of State for Defence, commented on the chartering of ships for the Gulf war :

"The criteria, the test is, Can you get them when you need them?' If the answer is Yes, and unequivocally yes' then this is a sensible way to use your resources."

That is the central question. Can we get them when we need them? Will those chartered reinforcements be available as readily as the Minister believes? I do not believe that they will.

A wide variety of military roles will be required of merchant vessels in a conflict : fleet support, supply tankers, troop carriers, hospital ships, vehicle and tank

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carriers, stores ships, tugs and salvage vessels. For different reasons, in each of those markets, different conditions will prevail which will make it difficult to be confident that the right mix of vessels will be available.

The crucial reason for that concern lies in the catastrophic decline of the British merchant fleet, both owned and registered. In 1980, some 38 million deadweight tonnes of shipping were owned by British shipping companies. Now the figure is only 13 million tonnes--one third of the level in 1980. The registered fleet stands at only 3.3 million deadweight tonnes, yet the Ministry of Defence insisted in a slightly mealy-mouthed statement nearly two years ago that, in general, there are still enough vessels for defence purposes.

The Government's view is that it is easy to charter, but what if the Governments or the owners of the vessels are opposed to United Kingdom strategic interests? How long will neutral shipowners take to assess the risk to their vessels before being prepared to commit them for use in wartime? Our need is often greatest in the early stages of a conflict. The hon. Member for Swansea, East asked about the costs of doing that.

The vessels that were chartered at the time of the Gulf war cost £180 million--more than twice what it would cost to charter in peacetime. The irony is that rebuilding our merchant fleet, which would be possible using a variety of fiscal and other techniques, would make money for the Treasury instead of costing money. What do other nations do? More than 100 merchant ships went to the Gulf war for Britain, but only six flew the red duster. France sent 27 merchant ships ; 26 of them flew the tricolour. The United States of America sent 165 merchant ships of which 105 flew the stars and stripes.

Mr. Nicholas Brown : Is the hon. Gentleman familiar with the contents of the Jones Act which provides the explanation of why many United States merchant ships have to fly the United States flag?

Mr. Luff : There are many aspects of the way in which the United States has sought to address its merchant navy needs. I do not support all of them, but the United States has said that it needs to do better in any future conflict and has dedicated extra resources to building its merchant fleet.

The Employment Select Committee, in its third report last Session, drew particular attention to the problem of manpower. It might be possible to buy in foreign crews, but can we rely on their loyalty in time of conflict? Can we rely on their Governments allowing them to fight for Britain? The Indians would not let their nationals fight in the Falklands war.

The Ministry of Defence insists that adequate numbers are available. Have the Government made sufficient allowance for the various specialities by category of ratings and officers? Half the United Kingdom ratings perform little more than hotel functions on board British merchant vessels. They are valuable and important functions, but they are not necessarily the most important in times of war. Have the Government made a proper assessment of the fitness and qualfications of many of the numbers they claim? Coastal, estuarial and dock workers all make useful contributions, but their experience is unlikely to be relevant to deep sea warfare.

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There is also the issue of relocation to foreign chartered ships. It is not easy to learn how to use new equipment or deal with the foreign language instructions on much of that equipment.

The second and quite separate area that I want to address concerns the hydrographic service. That specialist area of the Royal Navy is sometimes overlooked. It celebrates its 200th anniversary next year, so it is right that we should remember it today. It has functions for the Ministry of Defence in gathering hydrographic, oceanographic and geophysical data. It has particular importance in terms of submarine navigation and for our nuclear deterrent. It also has a crucial role for maritime safety, the protection of the marine environment and maritime trade in all the waters for which the United Kingdom is responsible.

It may be run as an agency on the production and commercial side, but the ships are firmly part of the main fleet of the Royal Navy under the command of the Commander in Chief Fleet. The hydrographic service performs a vital role at times of national emergency. We were rightly reminded earlier of the imminent 50th anniversary of D-day. The brave and courageous surveying of the landing beaches by the hydrographic service enabled D-day to be the success that it was. There are a number of specific challenges for the hydrographic service. It is a little known fact that only 36.6 per cent. of the United Kingdom continental shelf has been charted. That leaves some two thirds remaining. Many coastal waters have been surveyed only by lead line. The shifting sands in places such as the coast around Dover, where I recently had the privilege of sailing with HMS Beagle, require regular re- survey. There is also the question of changing priorities. The Braer disaster has created a new importance to surveying around the Fair Isle gap.

I hope that my hon. Friend the Minister will be able to address my next point, as it is important. There are new legal requirements. There is some talk of the Germans tabling proposals to amend chapter five of "Safety of Life at Sea" which would impose a massive new burden on our surveying requirements. Perhaps more important, the United Nations law of the sea convention has now acquired its 60th signatory and comes into force on 16 November this year.

Her Majesty's Government are in active consultation over part 11 of that convention, which deals with mineral resources in international waters. I hope that the Government will ratify the treaty before November. If they do, article 76 will have an important impact on our hydrographic service, because it imposes an obligation on our Government to define the continental shelf properly and accurately, and provide a mass of data within 10 years of ratification. I am told that, in the north-west approaches to our waters, the continental shelf goes out more than 400 miles from the mainland, some way south of Iceland. Charting it is a massive task, to which others will contribute, such as the Natural Environment Research Council, the British Geological Survey, private contractors and private shipowners. But the central effort will be devolved to the hydrographic service. That is of central importance,

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