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6.39 pm
Ms Rachel Squire (Dunfermline, West): I shall be brief. My first point is that the experience of service families has not been positive. They have been stretched to the limit by the Government's defence cuts, which have meant families spending more time apart. It is therefore no wonder that Army wives and others have done something which is very rare for them--they have spoken out publicly because they feel badly treated by the Government.
Secondly, it is clear that the policy has been Treasury driven. It is no coincidence that the right hon. Member for South Thanet (Mr. Aitken) moved from the Ministry of Defence to the Treasury after he had been responsible for decisions that affected my constituency and which led to the creation of surplus MOD property and its sale.
Thirdly, people have been badly treated. I cannot quote the communication in full, but I was contacted by a Mr. and Mrs. Trotter. Mr. Trotter served with the Royal Navy
for 22 years--in the Gulf, Bosnia and the Falklands--and is desperate for help, which he was not receiving, in trying to find suitable accommodation for his retirement. Another constituent--a Mr. Anderson--came to see me when the rent for his MOD property was doubled and he was told that he and his family had to find other accommodation by the end of this month.
Fourthly, in Scotland the situation is different for legal reasons and because of the sale of surplus property at Rosyth owing to the Government's defence cuts. The situation there has been marked by obsessive secrecy. I have written to the Minister for the Armed Forces and the Minister of State for Defence Procurement, asking why they have apparently made a deal with Home housing association, which has no property north of the border, and why they did not invite other Scottish-based companies to bid, but I have been given no information and no clear answers.
Mr. John Spellar (Warley, West):
This debate has rightly focused the House's attention on the vital role played in the life of this country by the armed forces and on the invaluable support given by their families. As we know, that is inextricably tied in with the community spirit of their estates and the support provided by their being surrounded by friends who know the strains and stresses of service life, especially in view of the regrettable recent increase in tension in Northern Ireland. The real question is whether the proposed sale adds or detracts from that. In our view, it surely undermines the system, which is why I believe that the Select Committee's report said that the jury is still out. It is also why the matter has aroused such cross-party concern.
The Chairman of the Select Committee on Defence said that the Committee's report raised as many questions as it provided answers. I must say that the Secretary of State's speech did not provide those answers, especially not to some of the important questions. For example, it is not clear how much it will cost to bring the estate up to grade one standard. Although pressed, the Secretary of State did not specify the other public sector investments for which he said the money would be available.
The concern raised by the hon. Member for Bexleyheath (Mr. Townsend) was mirrored in The Economist, which recently stated:
The Secretary of State alluded to, but did not deal properly with, the fact that the MOD has lost long-term control of the future of the estate. The MOD may make a decision on an exchange on military grounds, but, as far as we can see, it can be overruled by a civilian arbitrator. Families may be consulted--let me make it clear that that
is a welcome change--but the decision will not be in their hands, nor in the hands of the MOD, the House or another place.
The consultation is welcome but it is largely cosmetic. Indeed, it is not the consultation that was proposed in the early-day motion or in the resolution--it is consultation after 25 years, not consultation before the sale. In any event, as has been mentioned by hon. Members of all parties, it does not alter the fundamental weaknesses of the scheme, which is still a matter of concern to the hon. Members for Canterbury (Mr. Brazier) and for Bexleyheath.
Let us consider the £100 million for upgrading, which was mentioned by many hon. Members, especially the hon. and learned Member for Fife, North-East (Mr. Campbell). I find it astonishing that, in their amendment, the Government are still setting great store by the £100 million of what they claim is new funding. First, it is £20 million a year over five years, or even less if it is over seven years. That may impress the right hon. Member for South Thanet (Mr. Aitken), but I am not sure that it impresses Army families.
Secondly, last year alone, the MOD spent £126 million on repairs and £40 million on upgrading the estate. The £20 million is a welcome increase, but it is a small percentage of the total. Thirdly, there is no guarantee of additionality. The Minister of State for Defence Procurement must tell us how much will be spent in each of the next five years on repairs and upgrading; if not, the scheme has as much substance as Scotch mist or a promise made on a wet Thursday night in Dudley town hall.
Where will that leave the MOD? It leaves it precisely with the concern expressed by the Select Committee--that, in the longer term, the Treasury might press for any gap that may arise between the money paid by the MOD and the money received from the occupants to be closed. That reality is glaringly obvious, not only to the Select Committee but to service families around the country. If the Minister has any doubts about their feelings on the subject, I hope that the MOD official who covered my meeting with Army wives in Colchester will have made them clear.
What have the service families lost? They have lost the possibility of the discounted sales scheme, which has not been mentioned today. This year they have already had rent increases of between 10 per cent. and 25 per cent and have been warned that more are on the way. They are concerned that financial pressures will reduce the availability of housing and create difficulties as they move from one establishment to another. The sale will only make things worse, and it is therefore no wonder that they are fearful for the future.
It is also clear that the proposal is financially a bad deal for the country. In this dash for cash, the MOD is taking on an open-ended commitment. One does not have to follow the figures that appeared in The Times to realise that annual payments towards the end of the first 25 years could be substantial and, indeed, could well exceed the original purchase price. While house prices have been falling recently, private sector rents have been rocketing--up 19 per cent. in 1994, 22 per cent. in 1993, 26 per cent. in 1992 and 26 per cent. in 1991. The Government are selling at the bottom end of the market and renting on a rising tide. As many hon. Members have asked, what will that ultimately mean for the MOD's budget?
What are the key attractions for the purchasers? They are getting a steady guaranteed income stream that can only be adjusted upwards, as I have outlined--and for what? Contrary to the views of the hon. Member for North-West Surrey (Sir M. Grylls), they will not have to use private sector skills and will not be managing or maintaining the estate. All that they have to do is rake in the cash and sell the spare property, although what bankers in Tokyo, New York and Amsterdam know about the property market in Portsmouth or East Anglia is quite beyond me. Presumably, the purchasers are hiring people who do know about it, but why the MOD cannot do the same is equally beyond me.
I also find it remarkable that when we recently debated the Armed Forces Bill, we were told--rightly, to my mind--that the armed forces were a special case. Yet now, because the Chancellor of the Exchequer has got his sums wrong, we are told that their housing should be treated like any other commercial transaction. That is significant because in a country such as ours which has an unwritten constitution, it is very important to acknowledge the informal relationships that keep society together. We have a strong tradition of our armed forces being loyal to the Government of the day. In turn, the troops are loyal to the armed forces and wives and families are loyal to the troops. All those relationships are reinforcing, but they must be reciprocal. That is the unwritten contract that we have with our forces. If it appears, or even believed, that the Government are not loyal to service families, shock waves run through the system, affecting not only recruitment but retention, with all the subsequent impact on morale and operational effectiveness.
As many families fear, the Government may have decided that they want the forces to comprise primarily single young men. If so, they should come clean and say so, allowing service men and their families to make a decision about their future. If the Government have taken that decision, it would be a retrograde step, especially since the Army is involved in peacekeeping operations, which require a balance of personnel including mature and experienced soldiers, and what all the services increasingly need--it is part of the Bett report that has been mentioned--are trained, experienced, technical personnel. [Interruption.] I tell the Minister and Conservative Members that that fear has been expressed to me very strongly by Army wives. The Minister needs to dispel those fears by not only words but deeds.
We need to strip the scheme down to the essentials and consider it apart from all the fripperies. As has been rightly mentioned, it is not a privatisation. Nor is it a property deal. It is a shuffling of the financial pack to help out the Chancellor. Essentially, it is a sale and lease-back scheme. Whatever the hon. Member for Wyre (Mr. Mans) says, that is the scheme's essential financial nature. It is a live now, pay later scheme. It is not defence led; it is Treasury driven.
"Should the Government be forced to withdraw the privatisation, Mr. Portillo would be hard pushed to stop the Treasury deducting the missing money from his budget. That would mean cancelling programmes for new weapons--which is why the generals, unlike the men and women they command, want the privatisation".
I could understand the reaction of service chiefs faced with that case, even though any analysis would show that it does not stand up for a second. But has the case in fact been made? Is it true? Has the connection been made? We need a categorical statement on the matter.
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