---

Sir Teddy Taylor: As a lot of people outside will be watching, listening to and reading this debate, would it not be helpful if the hon. Gentleman, or perhaps his Front-Bench colleagues, would make clear that, under a Labour Government, there would be no question of military housing being sold as a unit to the private sector?

Mr. George: I have no authority to give that assurance, but I trust that my Front-Bench colleagues will do so.

Why was it necessary to sell the houses? Were they all elderly, or stock that should be got rid of? No. The Government clearly had other intentions. The Select Committee report said:

"We note that the fact that the majority of the estate is in generally good condition was confirmed by an independent stock condition survey commissioned by MD to assist prospective purchasers."

So the idea that the houses are being sold off because they are dilapidated is nonsense.

Some £100 million given to the new authority set up by the Government would largely solve the problem. Why go through the pantomime of selling all the properties--potentially to the Nomura bank of Japan--when MOD Ministers should go to the Treasury and say, "We want £100 million to upgrade the accommodation because we owe it to our service men and their families"? The Minister of State told the Select Committee that

"we do not just go to the Treasury and get £100 million out of them"

but they should try to do so.

Everyone knows that the real motive is not to improve MOD housing, but to improve the Tories' election prospects. The British service man has made many sacrifices, but rarely for such a base and undeserving group of people. Families who are to be turfed out of their properties, who may have some headbangers located next door or across the road and whose service ethos is shot through will remember who imposed the scheme upon them.

Why is this scheme being carried out? It is bananas. "Surely," we are told, "the MOD will gain." But it will not. Although the MOD is to dispose of the assets,

16 Jul 1996 : Column 969

the Treasury will get £1.5 billion. The MOD will retain the responsibility for managing, providing social services and maintaining the security of the estate, but it is getting nothing out of it. The gainers will be the Tory party and the property speculators. The MOD will not get the dosh, because it is going to the Treasury.

The Government are the short-termers, whose eyes can rise only as far as the next election. They do not know or care what will happen in five or 20 years. It is "tax cuts now, stupid"--that is the cry. The morale of service men, already low, will plummet even further. This is being done unnecessarily.

The MOD argues that the chiefs of staff endorse its action, but chiefs of staff who have endorsed a deterioration of defence expenditure from 5 to 2.6 per cent. of gross domestic product are unlikely to worry too much about 60,000 houses. Those who argue that this action has been endorsed by the Army Families Federation should note its statement that it was reluctantly withdrawing from public opposition. That is hardly a ringing endorsement.

Mr. Portillo: I think that I heard the hon. Gentleman, who is a member of the Defence Select Committee, being pretty insulting to the chiefs of staff. As the record of the debate will be read, I wanted to give him an opportunity to reconsider what he has said.

Mr. George: I thank the right hon. Gentleman for giving me the opportunity to reconsider but I shall move on to the identity of the buyers. That is secret. I was not present when the Minister of State for Defence Procurement reluctantly divulged to the Committee who they were. I read details in the newspapers. It is all hush-hush. I received a video from one buyer today so perhaps it is not really so hush-hush.

I am not xenophobic, but I do not like the idea of housing for which the MOD is responsible being bought by the Nomura bank. If the Japanese win contracts, many people will be insulted. I asked the Secretary of State whether the Japanese would be able to demand name changes on the housing estates, perhaps removing references to Montgomery or the Chindits. I was told that that was over the top but we must not forget what happened in County hall, whose new Japanese owners refused to permit British service men to honour their war dead until public pressure forced them to do otherwise.

Our report was the best that could have been produced in the circumstances. We could have produced a much better one if we had had adequate information. Our conclusion used the words

"We have sought to be satisfied".

We did not say, "We have been satisfied".

This action is being taken at the direction of the Treasury and, perhaps, of Smith square. It is being done for the wrong motives. The Government, those who supinely follow them, and those who will be dragooned into following them will reap the whirlwind. We have ample information about the threats against hon. Members who were seen to be opposing the Government. I hope that the Government will relent because I do not want service men to be inconvenienced and their family homes sold, potentially to foreign owners.

Mr. Deputy Speaker: Order.

16 Jul 1996 : Column 970

5.12 pm

Mr. Michael Colvin (Romsey and Waterside): I pay tribute to the hon. Member for Walsall, South (Mr. George) for his speech and for his contribution to the Defence Select Committee, on which he has served for so long. On defence matters, he knows what he is talking about.

My intervention will be brief because although the Defence Select Committee, which I chair, set out our preliminary conclusions on the sale of the married quarters estate in our sixth report of this Session, which was published this morning, it is, as the hon. Member for Walsall, South said, inconclusive. I apologise to the House for its interim nature. It is incomplete because much of the information that we would require to finalise it is commercially confidential: hence all the stars in some of the evidence-taking sessions. They do not refer to expletives deleted but to confidential information.

We felt a duty to report in advance of the debate on the Floor of the House, which was bound to take place before the House rose for the summer recess. I pay tribute to our staff, to our special adviser and to the Committee, who have enabled us to meet the deadline and to have the report available for this debate. We felt that there would be such a debate, either because the other place would have approved the amendment to the Housing Bill or because the Opposition would use a Supply day for it.

The debate in the other place was interesting. Most of the speeches opposed the Government's scheme for selling married quarters until there had been more consultation and a resolution of both Houses in favour of it. However, most of the votes were in favour of rejecting that proposition and letting the Government proceed as they planned. Surprise, surprise.

Mr. McWilliam: I attended that debate and I have never seen the other place more crowded. They must have brought them out of the woodwork.

Mr. Colvin: The House will have noted that with interest and a certain amount of agreement.

The proposed sale of the married quarters estate has sparked off a lively debate in the House and outside--and quite unnecessarily. If the Government had handled the operation with more care, many of the anxieties of service men and women and their families would never have arisen. The House can agree on that.

The married quarters estate has been badly managed and maintained. There is an urgent need for better management and an enormous injection of funds to upgrade properties. Further, there is no good defence reason for the MOD to own between £1 billion and £2 billion in bricks and mortar. The money to upgrade the properties was not going to come from the shrinking defence budget; it had to come from the Treasury. As we know, there are Treasury pressures on all spending Departments and the defence budget is most certainly not immune to those threats from the Treasury.

We hope that the recently established Defence Housing Executive may improve management and maintenance--provided that it recruits the right people and is properly funded on an on-going basis. We also note that more than 2,700 quarters are surplus to requirements and 20 per cent. of the total stock of 60,000 dwellings is empty. In defence terms, in today's uncertain world, the turbulence of

16 Jul 1996 : Column 971

service life and the pressures on service men and women--and, therefore, on their families--will increase. The quality of life necessary for recruitment and retention will be more difficult to achieve. We can also agree that the cohesion and ethos of the married quarters estate--the so-called patch--is a vital part of the welfare, and therefore the morale, of service men and women.

The charges for accommodation for married quarters had fallen behind the market and the Armed Forces Pay Review Body had taken overdue but necessary action to bring them more into line with the charges for council housing, housing association dwellings and the private sector generally. We can also agree--and even Ministers might acknowledge this--that the Government have made a rod for their own back by their appalling timing in the setting up of the Defence Housing Executive, the introduction of new, increased accommodation charges through the Armed Forces Pay Review Body and by the announcement of the current proposal on Budget day, which made the insistence of my right hon. Friend the Secretary of State that this was not a Treasury-led operation rather incredible.

As our inquiry continues, the Committee will need to be satisfied, first, that the concept of the sale is in the public interest; secondly, that the method of sale is appropriate; and, thirdly, that the needs and expectations of service families are properly protected and that defence interests are being respected. We already feel that the Defence Housing Executive needs to be strengthened if it is to do its job properly. It must be assured of an adequate allocation of cash each year from the proceeds of sales to guarantee the proper maintenance and repair of all MOD housing.

The £100 million mentioned by Ministers works out at approximately £2,000 per dwelling. Bearing in mind that we have been told that upgrading is likely to include new kitchens, double glazing, new window frames and decorations, I cannot believe that £2,000 per dwelling is anything like enough. That money will be made available over five years and the House needs to be reassured that money will continue to be made available for that purpose beyond that period direct from the Treasury, rather than from the defence budget.

---