House of Commons Hansard Debates for 18 Jan 1996 (pt 31)

Mr. Spellar: I think that the Minister did not like the thought of what the next passage would be. We are told that the Government

"is determined to sustain the revival in the private rented sector that deregulation has achieved. We will encourage more investors into the market, legislating to allow investment trusts to be created, making institutional investment in rented housing more attractive. We shall further deregulate private renting to reduce the burdens on small landlords."

That is what it is all about. These matters are driven not by defence needs but by Tory dogma. To paraphrase the words of the hon. Member for Wyre, it is the needs of

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estate agents, not those of the defence estate, that are driving the policy.

We have dwelt, inevitably, on our criticisms of the operations of MOD and of Ministers in matters that divide us. We should not, however, let our criticisms obscure the matters that unite us. There is a determination on both sides of the House to ensure the defence of the United Kingdom and to ensure that the men and women who undertake that task have the best training and equipment possible. Finally, there is our pride in the record of our troops as they fulfil their duties at home and abroad.

9.47 pm

The Minister of State for Defence Procurement (Mr. James Arbuthnot): It has been a privilege to take part in the debate. With the exception of one speech, it has been a debate of exceptionally high quality. Accordingly, I do not want to waste too much time on what must surely have been one of the most small-minded speeches made by the hon. Member for Motherwell, North (Dr. Reid) that I have heard in the House. He demeaned himself and, sadly, with it, the House. I hope that he will not re-read it. If he does so, he will feel that he has not done himself justice.

The debate has raised a tremendous number of issues. Inevitably, I shall not be able to cover them all this evening. I shall ensure that either I or my hon. Friend the Minister of State will write to hon. Members to whose points I have not been able to respond.

We have heard many speeches of distinction, including those of my hon. and learned Friend the Member for Harborough (Mr. Garnier), my hon. Friend the Member for Tynemouth (Mr. Trotter), the hon. Member for Greenock and Port Glasgow (Dr. Godman) and my hon. Friend the Member for West Dorset (Sir J. Spicer), who made some constructive points about recruitment, as did my hon. Friends the Members for Wimbledon (Dr. Goodson-Wickes) and for Birmingham, Hall Green (Mr. Hargreaves). I am particularly sad that I shall not be able to reply in detail to the excellent points that were made, on a wide range of matters, by my hon. Friend the Member for Salisbury (Mr. Key), but time does not permit it.

It is has been a helpful debate because it has given me the opportunity to say something about defence procurement policy, which has attracted a good deal of interest recently, and rightly so. It is the key to ensuring that the Army and other services have the equipment that they need to carry out the many tasks required of them and to obtain the best value for the taxpayers' money.

The 1995 public expenditure survey settlement reflects the Government's firm belief in strong defence and the rigorous management of money provided by the taxpayer. The new plans affirm our determination to maintain a period of stability in defence planning, which is vital to the long-term decisions that are necessary for defence. My hon. Friends the Members for Southport (Mr. Banks) and for Wyre (Mr. Mans) were quite right in what they said about the need for stability.

But we cannot be complacent about what will happen over the next few years, because a healthy and technologically advanced defence industry is an important national asset, and I will not allow the Labour party to suggest that we think otherwise. We do not take its continuation for granted. As a Government, we take a

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keen interest in the health of the United Kingdom's defence industry, although we do not share the protectionist and dirigiste tendencies of some of our allies, or of the Labour party. We monitor the effects of our procurement policies and have regular contacts with industry at all levels, and we listen to the concerns of industry.

An important contribution to the debate in that area has been the recent joint report by the Select Committees on Defence and on Trade and Industry, to which my hon. Friend the Member for Romsey and Waterside (Mr. Colvin) referred. The report was thoughtful, wide-ranging and extremely constructive. My Department and the Department of Trade and Industry are considering it carefully and the Government will respond to the Committees shortly. I do not want to pre-empt that response, but it might be useful if I say a few words about some of the current issues.

First, on equipment collaboration, as the hon. and learned Member for Fife, North-East (Mr. Campbell) said, in a thoughtful and considered speech, the rising cost of defence equipment and reductions in defence expenditure have made collaboration in equipment procurement an increasingly important means of keeping costs down. It also provides opportunities for UK industry to enter new markets and to create new alliances. That is underlined by the large number of current collaborative equipment programmes with our European partners. We are involved in some 25 projects with France; 22 with Germany. Other significant European partners include Italy and The Netherlands.

I met my German opposite number, Herr Jorg Schonbohm, in London this morning to discuss areas of co-operation, and we discussed yesterday's announcement by the German defence Minister of Germany's intention to increase its commitment to Eurofighter from 140 to 180 aircraft, which we very much welcome. We agreed that that resolves the question of production work sharing, subject to the settlement of some details by officials of the four partner nations, and it will provide a firm basis for planning by industry and the partner nations for the commencement of future phases of the project. I know that the House and my hon. Friend the Member for Wyre will agree that that is excellent news for the Eurofighter project and for British industry.

Collaboration with European partners is often easiest to arrange. There are fewer problems when partners are of roughly equal size. But we also welcome opportunities to collaborate with the United States. As in Europe, successful collaboration is often rooted in strong commercial relationships between the industries concerned. The UK defence industry has many links with US companies, and we hope that these will continue to provide a basis for further co-operation. We certainly do not see collaboration as confined to Europe. Nor do we see it as a goal in itself. It is only one means by which we aim to maximise what we can achieve with the defence budget.

Our major aim must continue to be to seek maximum value from the defence budget. That underlies all our procurement activity. Over the past decade, our policies have undoubtedly been highly successful in securing that.