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Mr. Key: Of course we have a role to play, although I dare say that Mr. Deputy Speaker would say that that is for a foreign policy debate rather than this one. I have no doubt of the defence dimension of it, and I have no hesitation in pointing out that any export to any of those countries is subject to the range of inquiries that I described a few minutes ago. There is nothing new in the so-called ethical foreign policy. It has always been there.
The Conservative Government ensured that our forces would be better equipped than ever before. There was a sea change in the way in which the Ministry of Defence made its contracts. The Labour Government will be lucky if smart procurement achieves half as much as the Conservative reforms. There is nothing smart in new Labour slithering back into its old bureaucratic ways by imposing new copy-in-triplicate, buck-passing, time- wasting procedures, while Defence Ministers wait by the month to hear whether the Foreign Secretary approves and wait until next year to hear whether the Chancellor will allow them to defend our nation as it should be defended.
The stress that the strategic defence review is causing the procurement industry is unjustified. The list of projects concerned about the future is long: Bowman, ASTOR, COBRA, Skynet 5, EH101, Apache, multi-role armoured vehicle, future engineer tanks, future large aircraft, aircraft carrier replacements--the list is endless. Even Eurofighter is not sacrosanct if the Treasury will not pay or if it modifies the spending profile. It was the commitment of the Conservative Government to Eurofighter that convinced our partners to proceed with that project. We need Eurofighter.
Before and after the general election, we were promised that the strategic defence review would last six months, starting on 2 May. Now we are told that it will be another six months. There is no consensus across the Floor of the House on that.
Meanwhile, the people who form the greatest part of the nation's defence are kept in the dark. The foreign policy base lines are secret. The Minister of State for the Armed Forces wriggled around on this point a few minutes ago. Until the foreign policy base lines are made public, we are in no position to make a judgment, and we will not hear that until after the Treasury has decided whether the Ministry of Defence can have what it wants. There is no consensus on that between the parties.
In the short term, while we wait, thousands of long-term jobs are being put at risk. Most of the defence equipment exported from the United Kingdom by most of the companies involved is pretty uncontentious. That is why the Department of Trade and Industry export licensing unit has committed itself through its code of practice to achieve a target for obtaining licence approvals of 20 working days from receipt of the application.
The unit was not doing badly until April. According to the DTI, in April 93 per cent. of straightforward licences were being cleared in 20 days, and 70 per cent. of those that had to be circulated to other Government Departments were being cleared in 20 days. By September, under Labour, the rate for simple applications had slipped back to 60 per cent., and joint decisions had slumped to just 48 per cent. achieving target. The DTI receives more than 1,000 applications a month, and is clearing less than half.
I remind the House that the vast majority of those export orders are for products already manufactured for Britain's forces and help to keep down the cost to our taxpayers. Above all, they keep British people in British jobs. British firms are sympathetic towards harassed officials in Government Departments who have had a new regime imposed on them, with no increase in resources or manpower. This is a new problem entirely created by this Government--new Labour, new problem.
I know that the main problem lies with the DTI, not the MOD, but let me explain why it matters to the entire Government and to our nation. Not only are British firms suffering lengthy processing delays, but it is now virtually impossible for them to obtain a reason for a delay or a date by which a decision will be made. Many of those companies have been trading in the same products with the same countries for years. Labour has imposed lengthy delay and query, even on non-lethal repeat business.
Customers--usually overseas Governments or their agencies--place worldwide competitive bids against demanding terms and conditions of supply, including performance bonds supported by irrevocable bank guarantees, liquidated and consequential penalty clauses for late delivery and, of course, the final sanction--disbarment from future tenders.
Mr. Tom King (Bridgwater):
In speaking about the increased competition that British companies face, and recognising the importance of the ethical dimension to our defence export sales, has my hon. Friend noticed the interesting report that President Mandela is to go to Saudi Arabia in two weeks to seek to achieve substantial defence exports for South African companies? One does not imagine that President Mandela would be involved in anything the least bit unethical, but that puts into context some Labour Members' inclination to criticise any defence exports, and draws attention to the threat that our companies face from increasing overseas competition.
Mr. Key:
I am grateful to my right hon. Friend for that telling point. He is right. The South African defence industry is a worldwide industry and is very good indeed. It is tendering for many of our traditional markets and winning in some of them. We must be fully aware that the competition that we face from sources that we hitherto considered beyond the pale is now making a great inroad into our potential business.
Time is of the essence when responding to contractual delivery dates. Once the capital outlay for the prime contractor capital system or equipment has been purchased, it is crucial that the supply of expendable goods and services be available on demand. Our defence export industry has been winning new export orders inthe face of fierce international competition. The Government's dead hand on export licences has already resulted in serious damage to UK exporters' credibility to contractually perform as a reliable quality supplier. Export orders have been cancelled because of late delivery caused by the lack of a licence.
Substantial costs have been incurred by British industry for liquidated damages and additional shipping costs. US and European competitors have moved in very fast on our export markets. How much longer are Ministers prepared to sit on their hands and see British exports lost and British jobs lost? More quickly than I expected, unemployment will rise in this sector. It is still true: Labour is not working. There is no consensus.
Ms Rachel Squire (Dunfermline, West):
Does the hon. Gentleman agree that during 18 years of Conservative government, hundreds of thousands of jobs were lost in the defence industry, and particularly close to home, 10,000 jobs were lost in my constituency and that of my right hon. Friend the Member for Dunfermline,
Mr. Key:
I should like the hon. Lady to speculate on what those figures would have been if a Labour Government had been in place. I remind her that although all of us who have defence-oriented constituencies saw dramatic changes in employment patterns, we ended up with hundreds of thousands of new jobs, economic activity rates in this country higher than anywhere else in Europe, and unemployment lower and falling.
Yesterday my right hon. Friend the shadow Secretary of State laid out clearly our position on land mines. I shall merely emphasise one point and make one other. If the Government want consensus, they are more likely to find it on the issue of anti-personnel land mines than on many other issues. The new Government must realise that, as any infantryman will tell them, mines save lives as well as taking them. Used properly, they can be an effective, efficient, time-limited deterrent and defence.
The British Army felt that it was bounced by the new Government's announcement on mines, in respect of both details and timing. That was neither wise nor competent. Further progress can, will and should be made. It will succeed if it has the full agreement and support of the armed services down the chain of command and heeds the advice of the Defence Evaluation and Research Agency.
Mr. Frank Cook:
Will the hon. Gentleman accept from me a copy of the paper written by the former Engineer-General Sir Hugh Beech, in which he makes the case that the military purpose of anti-personnel mines has been long outlived? He says that they are redundant and that sensors are available with sufficient range and accuracy to draw direct and indirect fire to any kind of incoming incursion force, thereby making APMs unnecessary for the safety of our own people and providing support for his view that in the past our APMs have killed more of our own men than enemy forces.
Mr. Key:
I am aware of those views, and of course I respect them. I should be delighted to see the paper: I think that it is important to be as well informed as possible about such issues. I warmly welcome the promise of money and training facilities for mine clearance work. However, what will be the impact on the Royal Engineers in terms of deployment, recruitment and retention? That issue must be considered.
I issue a word of warning to Ministers, who are prone to photo opportunities that they regret later. I propose to make a deal between Front Benchers on the issue of land mines:
no more stunts. The issue is too serious. We must stand back and leave it to the experts.
The image of the late Princess of Wales in an Angolan minefield will stay with millions. Back in the United Kingdom, I know that many thought it undignified--or even stupid--for a role model such as Her Majesty's Secretary of State for International Development to dress up and smilingly wave about weapons responsible for such carnage. That stunt did little to help the cause--it simply was not worth it. As for the Secretary of State for Defence, I will spare his blushes.
A couple of weeks ago--right on cue before the return of Parliament--the Chancellor of the Exchequer announced his first raid on the defence budget. How did the Secretary of State for Defence respond? He invited the pop group Verve to rent disused MOD property for concerts. That is good news for fans of Verve and good news for the Treasury. It may work when looking for small change, but it will not do as a serious response when defence coffers are empty, when the cupboard is bare and when the Treasury is no longer the MOD's flexible friend. I fear that defence Ministers will then be the Treasury's flexible friends.
British defence costs increased greatly after the inception of IFOR in December 1995 because of the doubling in size of the British force in Bosnia. The costs totalled £244 million to the end of March 1997--that is £60 million for 1995-96, £160 million for 1996-97, and a separate £24 million in 1996--97 for the cost of the RAF contribution to the air component of IFOR, Operation Decisive Edge, based in Italy. The Ministry of Defence was reimbursed for the total sum of £244 million from the Treasury contingency reserves. The MOD would seek to recoup the additional costs from the reserve should it not be able to absorb them
I can find no reference to any commitment by the Treasury to fund the costs of United Kingdom peace implementation in Bosnia from the reserves in this financial year. Has the Ministry of Defence conducted negotiations with the Treasury on that matter? Has there been a settlement? Will defence lose 1 per cent. of its budget in addition to the 1 per cent. fine given to health--£168 million? Are the Government getting careless? Have they lost 2 per cent. of the defence budget since May?
By summer 1996, Conservative Defence Ministers and the then Defence Select Committee were showing not just inflexibility to Treasury pressure but a new steeliness in their approach to defence expenditure. I pay tribute to Michael Portillo, whose instinct for defence won him many friends in all three armed services as well as in the Ministry of Defence. I was grateful to hear the Minister pay tribute to him last night. As a former Chief Secretary, Michael Portillo would spot a weak spending programme better than anyone--but he also knew a bottom line when he saw it.
My hon. Friend the Member for Mid-Sussex (Mr. Soames) knew his business as Minister for the Armed Forces inside out. He made it his duty to understand what was going on at the sharp end of the services. It is no secret that his frustration with the Treasury attitude to defence brought him, with great honour, close to resignation.
My hon. Friend the Member for North-East Hampshire (Mr. Arbuthnot) was ruthlessly inquisitive about the procurement programme for which he was responsible. It was not very smart of the incoming Government to claim credit, after just a week or two, for fundamental improvements and new approaches that were put in place during my hon. Friend's term of office. My noble friend Lord Howe proved as a defence Minister that his blood flowed not just blue, but royal blue, light blue and khaki as well.
The previous Defence Select Committee was unanimous in its view that the defence spending plan for this nation had reached rock bottom. Many members of that Committee have been replaced by the electorate or by the mysterious machinations of the appointments process in the House. I was very pleased to see the hon. Member for Walsall, South (Mr. George) elected as Chairman. He has a proud record on defence and a deep knowledge of his subject--unlike the Minister. In view of all that the hon. Member for Walsall, South has said over the years--on the record and off it--we would not want to see him resign his chairmanship of the Defence Committee. Yet we know that he would not flinch from that decision if he were pushed too far.
Similarly, we do not want to see the Minister for Defence Procurement pushed off his perch. Only last year, he said:
What about Defence Ministers? Without fear of contradiction, I assert that they are all nice men--more than that, they are thoroughly decent and honourable. They are delightful and hard-working opponents. I think that they honestly went to the recent general election and accepted office believing that the strategic defence review would be just that. However, where is the beef? Labour sneered before the general election that its approach to defence is fundamentally different from that of the Conservatives, yet now the Government are begging for consensus. They might get it--on our terms.
Innocents that they were, Labour Members did not imagine that they would be rolled over, first by the Foreign and Commonwealth Office and then by the Treasury. The muggings began, and the parliamentary answers became more defensive and more opaque. Labour Members were bound hand and foot, with rope to spare. Gordon marched them up to the top of the hill and he marched them down again. They sailed away for a year and a day--it will be that long before we know the real outcome of the SDR.
"without detriment to the rest of the defence programme".--[Official Report, 25 November 1996; Vol. 286, c. 29.]
In July this year, when responding to a parliamentary question, the Minister for the Armed Forces stated that the cost of Britain's military contingent of IFOR, including its air support component, was estimated at "something over £200 million" in the 1997-98 financial year. That would be about 1 per cent. of the overall defence budget. Given that the size of the British force in Bosnia has fallen significantly since the early days of a direct NATO role in that country--it now stands at about 5,300 men--the £200 million plus might include some of the £120 million mentioned in November 1996 as being additional costs for repair and restocking.
"I also happen to think that this country does not spend enough on defence".--[Official Report, 14 October 1996; Vol. 282, c. 506.]
Quite so. The Opposition need Lord Gilbert, even if the Government do not.
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