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Mr. Mark Robinson: Will the hon. Gentleman give way?

Dr. Reid: I cannot resist the temptation.

Mr. Robinson: In the light of what the hon. Gentleman has just said, will he give us a hint of what the terms of reference for the defence review proposed in the Opposition's amendment would be?

Dr. Reid: I have only two and half minutes left. I can tell the hon. Gentleman that we envisage a defence review that will not be limited exclusively to the Ministry of Defence. It will take into account foreign affairs. I hope that the Prime Minister's office would be involved and I hope that it would be wide enough to weigh cost benefits, not purely within the


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MOD budget, but the benefits that we get from our position within the United Nations as a result of having a defence force that is capable of playing a role in the United Nations. That is a very general statement in the time available to me, but it is a mile ahead of anything that has been produced by the Government.

Mr. Garnier: Will the hon. Gentleman give way?

Dr. Reid: I must make some progress because the Minister wants to speak.

The Government demonstrate that they have little appreciation of the extensive and complex processes that are required to produce our front-line military capabilities. They have no coherent industrial or defence policy. More than 100,000 employees in the defence sector have been made redundant in the past four years as strategically vital parts of our manufacturing base have been allowed to disappear. The Government are complacent about our ability to transport our armed forces out of area, a point that was made by several Conservative Members.

Above all, the Government are now bent--they are driven by dogma--on a policy of privatising the armed forces. We did not believe that they would do it in respect of the prisons--they have already done it--and they are now doing it in respect of the armed forces. We are not saying that efficiency should not be involved--we are not saying that some services cannot be privatised--but the Government are pushed by dogma and taking it to extremes.

It might be unfair, but we are always left with the impression that the dream scenario for the Government would be the British Army marching into battle, fed by Forte, serviced by Kwik-Fit, stirred by the strains of the London symphony orchestra, and having the solid reassurance that their flank would be guarded by Group 4. That is the Government's attitude. They have followed that dogma through to its illogical conclusion, firm in the belief that the hidden hand of the market will spontaneously cater for the requirements of Britain's national security. It will not.

Mr. Garnier: Will the hon. Gentleman give way?

Dr. Reid: No. I am sorry, but I am at my final conclusion. It is unfair to the Minister to give way, and I have been unfair enough to him tonight.

Echoing the Secretary of State for Defence, the Prime Minister assured the nation last week that

"the big upheavals in our armed forces are over."

Sadly, in time, I believe that that will prove to have been little more than another empty Tory promise.

The Conservatives have learnt nothing from the reverses that they have had in the polls. I do not want to upset my leader, who would rightfully claim the major advances that he has made in law and order, but, in due modesty, we must point out that the Conservative party which, four years ago, was 42 per cent. ahead in the polls on defence, was 10 per cent. behind last week. I hope that that gives some comfort to hon. Members.

The right hon. Member for Chertsey and Walton (Sir G. Pattie) referred to a report entitled "Arms for Oblivion", which was published by the Institute for European Defence and Strategic Studies. He did not, out of sympathy for his Front-Bench colleagues, mention its conclusion, which was brought to my attention during the debate. In attempts of honesty and objectivity, my hon. and learned Friend the


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Member for Fife, North-East, who is sitting on the Liberal Benches, and I would like to draw attention to the conclusion of that report. It states:

"Far from being able to claim that defence is safe in our hands' the Conservatives must hope that defence will not be an issue at the next election."

They can hope, but it will, and we shall win that debate and the next election.

9.37 pm

The Minister of State for Defence Procurement (Mr. Roger Freeman): Opposition Members will not win that defence debate and they will not win the next election.

I have listened to a very entertaining, witty and, at the beginning, courteous contribution, and I thank the hon. Member for Motherwell, North (Dr. Reid), but I shall seek to answer the many points that have been raised.

The hon. Member for Linlithgow (Mr. Dalyell), who is not in his place--

Mr. Martlew: Yes, he is.

Mr. Freeman: The hon. Gentleman raised allegations in connection with Mark Thatcher. I shall certainly look at the documents that the hon. Gentleman has passed over tonight and he will receive a considered response. However, as for the comments that my right hon. and learned Friend the Secretary of State and my right hon. Friend the Prime Minister have made, I make it quite plain that the transaction between Her Majesty's Government and Saudi Arabia was on a Government-to-Government basis in which no commissions were paid, and no agents or any middlemen were involved. I will look at the documents and write to the hon. Gentleman.

The Select Committee report, to which my hon. Friend the Member for Upminster (Sir N. Bonsor) referred, and which is the background of the debate, rightly started, on its front page, by affirming the need for NATO. Hon. Members on both sides of the House will agree that NATO is the bedrock of our defence policy. It has been successful; we have deterred the Soviet Union; we have won the cold war. That is the reason for the significant reduction in our armed forces following "Options for Change". Now the threat has moved to the south and the east, but that does not invalidate our membership of NATO. As I have said, it is the bedrock.

Our alliances with European countries are important, but we must never forget our association with the United States, our reliance on it--in part- -and our close friendship with a country that still maintains 100,000 troops in western Europe.

The defence costs study, which the debate has largely concerned, relates to support for the front line. It is logical that that should follow on from "Options For Change". It has represented the pulling together of a great number of initiatives started in the Ministry of Defence and it is perfectly sensible for us to aim for £750 million of savings in 1996- 97.

Let me tell my hon. Friend the Member for Upminster, who chairs the Select Committee and raised the point in its excellent report, that we will achieve those savings. We have many dozens of proposals, some out for consultation and some still to come. In answer to my hon. Friend the Member for Davyhulme (Mr. Churchill), who


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is not yet in his place, let me say that if we achieve the target--I feel confident that we shall--the benefits will come back to the armed forces. It is wholly appropriate that their efforts should be reflected not only in better capability on the front line, but in better equipment.

I should make it plain to my hon. Friends the Members for Wealden (Sir G. Johnson Smith) and for Wimbledon (Dr. Goodson-Wickes)--and to the hon. Member for Carlisle (Mr. Martlew), who spoke yesterday--that if and when we are able to withdraw troops from Northern Ireland, which Northern Ireland Members know will be no easy task, the size of our armed forces will not be affected. Any benefits will come not in redundancies, but in a partial reduction of the overstretch that has been mentioned; my right hon. and learned Friend the Secretary of State has made that clear.

Let me reply to the hon. Member for Fermanagh and South Tyrone (Mr. Maginnis) by saying that the Prime Minister spoke in an illustrative fashion when he talked about Semtex. I can confirm that he meant that we want Semtex and all other weapons to be laid down by the terrorists before progress can be made, as I am sure all hon. Members would wish it to be.

Many hon. Members on both sides of the House mentioned problems with the defence costs study. The study is not an annual round; it has been a special exercise. I have already referred to our £750 million target. My hon. Friend the Member for Romsey and Waterside (Mr. Colvin), and indeed the Opposition Front-Bench spokesman, alluded in passing to the expected receipts from the sale of married quarters--approximately £500 million in 1995-96. I confirm that we intend to proceed with that programme, while refining and improving it. It is a unique and difficult transaction, but we are determined to bring it to fruition; otherwise the defence budget would be affected, and we are determined that that should not happen. In connection with the defence costs study, let me say in particular to my hon. Friend the Member for South Dorset (Mr. Bruce)--who expressed his concern about Portland with great force and courtesy--that I have visited Portland in the last two weeks. I should tell my hon. Friend, and other Conservative Members who have expressed concern, that the consultation exercise continues, although it has been formally completed in part. It will be fair and open, and will continue until Ministers reach a decision.

I invite all hon. Members who have raised concerns about the defence costs study to raise them in person, either with my hon. Friend the Minister of State for the Armed Forces or with me. We share responsibility, and I do not regard anything as foreclosed. We want to ensure that savings are yielded to the defence budget, but yielded in a sensible fashion.

The hon. Member for Carmarthen (Mr. Williams) raised the specific issue of Pendine. I confirm to him that we have concluded that we need to rethink the proposals. The hon. Gentleman was perfectly fair; he raised legitimate concerns about the way in which the financial calculations had been done. He was fair enough to say that his group would guarantee those savings, but he asked us to look at the matter in a different fashion which might permit the continuation of the Pendine range in view of the cost of re-provision of the test tracks elsewhere. I accept the force of his argument and I confirm that I will be in touch with


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him in due course. That is an example of an intelligent response to the case made by the hon. Gentleman and the hon. Member for Pembroke (Mr. Ainger), together with the trade unions, in a fair and convincing fashion. We will listen where it is appropriate and where a change of approach is required by the facts.

My hon. Friend the Member for Davyhulme, who is not here at present but will read my remarks in the record, asked my right hon. and learned Friend the Secretary of State yesterday what specific enhancements would result from the defence costs study. We made commitments about the front line. It is not possible to be precise, but it is our belief that savings of about £100 million a year can be ploughed back into augmenting the front line.

In July my right hon. and learned Friend announced a range of measures which will improve front-line capability. The key to the defence costs study is, as my right hon. and learned Friend said, that we will retain our capability. My right hon. and learned Friend has gone further and said that we will not have a series of annual defence mini-reviews. We are not going to cut. There are no further proposals for reductions in regiments, aircraft or ships. Therefore, I can assure the Select Committee that we are now into a period of stability.

Of course, there are several years yet to run in which the original proposals in "Options for Change" and the defence costs study will work themselves out. I cannot deny that. The hon. Member for Motherwell, North was right when he said that there had been significant cuts and that there were still more to come. However, the important point is that we have no further announcements to make. What you see is what you will get. That will bring stability and an improvement in morale to the armed forces.

My right hon. Friend the Member for Chertsey and Walton (Sir G. Pattie) was helpful when he referred to the need continually to improve efficiency in the armed forces. May I report that in the year ended 1 October 1995--the year that we are just starting for testing--we expect £334 million- worth of support activity to be tested. That represents a 50 per cent. improvement on the past year. Market testing in the Royal Air Force was raised with me by the Opposition Front-Bench spokesman. My right hon. Friend the Member for Richmond and Barnes (Mr. Hanley) announced last year the formal three-year review of the RAF Maintenance Group Defence Agency. Since then, and following consultation, we have announced the decision to rationalise the RAF storage facilities.

Since my appointment I have visited both RAF Sealand and RAF St. Athan. I can now outline briefly the way ahead for both stations. We intend to press ahead now with a vigorous market-testing programme at the two stations to achieve best value for money through competition and the involvement of the private sector as soon as possible. That will be within the framework of Government ownership. However, within that framework, industry will be fully consulted and will be able to make innovative proposals for the maintenance and repair of RAF equipment. Proposals could include partnership--the private sector in partnership with the existing work force --and Government-owned contractor-operated stations.


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I was greatly impressed by the work force at both RAF Sealand and RAF St. Athan and commend their dedication. I do not rule out in-house bids. Both trade unions and work force will be fully consulted.

May I associate myself with the remarks of my hon. Friends the Members for Ruislip-Northwood (Mr. Wilkinson) and for Tayside, North (Mr. Walker), who paid tribute to the Royal Air Force and stressed the importance, within a contracting service--the numbers are reducing dramatically--but one with better equipment, of the need to maintain morale?

Mr. Wilkinson: What authority or disciplinary powers will officers in the Royal Air Force have over contractors responsible for the maintenance of RAF equipment? That is of the greatest importance in engendering confidence in the contracting-out process.

Mr. Freeman: I can assure my hon. Friend that when a regrettable incident took place involving one private sector contractor at St. Athan the contractor was promptly and correctly removed. That experience does not invalidate the market-testing exercise because it was part of the normal process of contracting out certain work. At St. Athan--the major RAF air base--the RAF in-house team won the bid on the 25 Fatigue Index project involved in the repair of the Tornado F3 fighter aircraft and I congratulate them. That is a sign that in-house bids can and do win.

On value for money in procurement, the Eurofighter 2000 and the EH101 support helicopter were mentioned by a number of my hon. Friends and Opposition Members. The key point is that, although we have a commitment to the Eurofighter 2000 programme and we need fresh support helicopters for the Royal Air Force, that need will not be fulfilled at any price. We are determined about that and I hope that this message will be heard clearly by the manufacturers. We will negotiate with them in good faith, but the project must represent good value for the defence vote. That is not an excuse for delay as we need to make progress. The House wants to hear of a conclusion to our consideration of both projects and it will get it.

As for a Hercules replacement--many of my hon. Friends raised the matter-- the report of the Defence Select Committee--

Mr. Geoffrey Clifton-Brown (Cirencester and Tewkesbury): Will my right hon. Friend give way?

Mr. Freeman: May I make my point, then I shall give way briefly for the last time?

The Defence Select Committee report put the issue clearly and I agree with it. The Committee said that the aircraft, which are nearly 30 years old, are experiencing increasing maintenance and decreasing viability. That is plain fact and, therefore, I have to do something. I must make a recommendation about action to my Secretary of State soon--whether this month, the next or early next year remains to be seen. I cannot avoid doing something, but that something is not buying the future


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large aircraft because it is probably 10 years hence. I hope that that project makes excellent progress and I wish it well as a commercial project.

Mr. Michael Clapham (Barnsley, West and Penistone): Will the right hon. Gentleman give way?

Mr. Freeman: No. I must finish my point. The issue before us is whether half the fleet, say, should be refurbished to push on its life for another 10, 15 or 20 years, or whether we should order the only possible aircraft--the C130J--now. That is the issue. It is not a matter of whether we should compare the C130J with the future large aircraft, but of ensuring that the military need of the Royal Air Force is met. We will try to reach that conclusion as quickly as possible. I wish the FLA project all godspeed. I think that we all want a European project and a European design for an aircraft--it is still many years in the future--that can compete and we in the Ministry of Defence will certainly be glad to consider the aircraft, but at the moment it is only a concept.

Mr. Clifton-Brown: Does my right hon. Friend agree that we have heard a great deal about the future large aircraft during this debate, mainly from members of the official Opposition? Does he agree that we do not yet have reliable estimates, not merely of development costs but of the procurement costs? Does he also agree that the Hercules replacement programme should be placed on a value-for-money basis and, above all, on the requirements of the RAF? Does my right hon. Friend further agree that that would secure an excellent opportunity for aerospace firms in my constituency and elsewhere within British industry, both now and in the short and long term?

Mr. Freeman: My right hon. and learned Friend will have heard my hon. Friend, and when we come to make the decision the speeches from Members on both sides of the House will be taken into account. In drawing to a conclusion, I shall first refer to the arguments from both sides of the House regarding ballistic missile defence. That is an extremely important subject on which the Government intend to spend not only time but resources in developing. We are not going to go it alone in developing a response to ballistic missile threats in western Europe. We will co-operate with the United States and with our colleagues in Europe, but I am glad to announce that we have placed a contract with British Aerospace for a pre- feasibility study to look at some of the options which are available to us. When I was in Washington recently I was able to confirm with the Deputy Secretary of Defence, Dr John Deutch, that we would make a contribution from our own resources--albeit a modest one at this stage--towards some of the technology demonstrators, particularly in the fields of radar and surveillance.

On Trident, I say in response to the hon. Member for Denton and Reddish (Mr. Bennett) that I have seen the report from the Health and Safety Executive concerning safety at Aldermaston. I commend what Hunting-BRAE has achieved and the plans for additional works at Aldermaston, but the Government


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accept in principle the argument that we should license Aldermaston and Burghfield, subject to discussions about timing and implementation.

Mr. David Rendel (Newbury) rose --

Mr. Freeman: If the hon. Gentleman will forgive me, I have only three minutes left.

On testing and the chemical weapons convention, the Government will ratify the convention as soon as possible.

Finally, I turn to the two Opposition amendments on the Order Paper. First, there is the official Opposition amendment, which calls for a defence review. Which commitments do the Opposition wish to eliminate? [Interruption.] The Opposition had ample time to consider which commitments the Government should reduce. What is the right size of the defence budget? The Opposition have no arguments. They have complained about £750 million of savings in the defence costs study, but, having complained, they have no arguments about how to fund the increase in the defence budget which would occur if those savings had not been made.

Again, on the defence diversification agency, the Opposition have no arguments about the cost of that initiative. So the official Opposition amendment simply calls for a defence review and contains no policy arguments whatsoever.

The other motion on the Order Paper--which we will not have the pleasure of voting on--has been signed by 45 Opposition Members. The motion was carried by the Labour party conference and calls for the elimination of Trident-- [Interruption.] The hon. Member for Motherwell, North protests, but 45 of his hon. Friends signed the motion. The hon. Gentleman cannot sweep that underneath the table. Forty-five of his colleagues want to scrap Trident and cut the defence budget. [Hon. Members:-- "No."] I can count. The hon. Members should look at the early-day motion at the back of the Order Paper. In arguing the unilateralist case, the hon. Member for Blaenau Gwent (Mr. Smith) said that he wanted defence cuts of £8.5 billion. That would mean cutting the Royal Navy, scrapping our nuclear deterrent and making many cuts in the defence budget. We would have to leave Germany and reduce our-- [Interruption.] The hon. Member for South Shields (Dr. Clark) may laugh, but where would he make £8.5 billion worth of cuts?

As a result of our policy, we are now in for a period of stability and major enhancements in our defence capability. We have the right balance between commitments, forces and finance. The Opposition remain divided; they are either unilateralists or a vacuum for a defence policy. If they fight the next election on that basis, they will lose the issue. Oppose the Opposition amendment.


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Question put, That the amendment be made:--

The House divided: Ayes 273, Noes 304.

Division No. 304] [21.59 pm

AYES


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Abbott, Ms Diane

Adams, Mrs Irene

Ainger, Nick

Ainsworth, Robert (Cov'try NE)

Allen, Graham

Anderson, Donald (Swansea E)

Anderson, Ms Janet (Ros'dale)

Armstrong, Hilary

Ashdown, Rt. Hon. Paddy

Ashton, Joe

Austin-Walker, John

Banks, Tony (Newham NW)

Barnes, Harry

Barron, Kevin

Battle, John

Beckett, Rt Hon Margaret

Beith, Rt Hon A. J.

Bell, Stuart

Benn, Rt Hon Tony

Bennett, Andrew F.

Benton, Joe

Bermingham, Gerald

Berry, Roger

Betts, Clive

Blair, Tony

Blunkett, David

Boateng, Paul

Boyes, Roland

Bradley, Keith

Brown, Gordon (Dunfermline E)

Brown, N. (N'c'tle upon Tyne E)

Bruce, Malcolm (Gordon)

Burden, Richard

Byers, Stephen

Caborn, Richard

Campbell, Menzies (Fife NE)

Campbell, Mrs Anne (C'bridge)

Campbell, Ronnie (Blyth V)

Campbell-Savours, D. N.

Canavan, Dennis

Cann, Jamie

Chidgey, David

Chisholm, Malcolm

Church, Judith

Clapham, Michael

Clark, Dr David (South Shields)

Clarke, Eric (Midlothian)

Clarke, Tom (Monklands W)

Clelland, David

Clwyd, Mrs Ann

Coffey, Ann

Cohen, Harry

Cook, Frank (Stockton N)

Cook, Robin (Livingston)

Corbett, Robin

Corbyn, Jeremy

Corston, Ms Jean

Cousins, Jim

Cunliffe, Lawrence

Cunningham, Jim (Covy SE)

Cunningham, Rt Hon Dr John

Dafis, Cynog

Dalyell, Tam

Darling, Alistair

Davidson, Ian


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