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The Minister for the Armed Forces (Dr. John Reid): Will the hon. Gentleman give way?
Mr. Simpson: I gladly give way to the Minister.
Dr. Reid: The hon. Gentleman has finally tempted me to the Dispatch Box with his phrase, "flawed logic". Will he explain why the Conservatives spent the period leading
to the general election complaining, "You can't trust Labour; they won't keep Trident or the Eurofighter" and have spent the time since then complaining, "Labour can't be trusted because they are going to keep Trident and the Eurofighter"?
Mr. Simpson: I think the Minister should allow me to continue my point. He should not have allowed himself to be tempted.
If, in opposition, people argue a perfectly acceptable case--that they cannot commit themselves before looking at the books--and maintain that they will carry out a strategic defence review because they lack information, where does the information come from to cause them to say that they will keep Trident and Eurofighter but that they cannot commit themselves to other important areas? By making that declaration, they largely determined the outcome of the strategic defence review, which was supposed to be foreign policy led. I thank the Minister for his intervention.
I shall now examine the flawed logic behind the strategic defence review and see how an assessment of British foreign policy could provide the driver for it. We know, in general terms, from what the Foreign Secretary said when he launched his Foreign Office mission statement on 12 May 1997, that UK security will remain based on the North Atlantic Treaty Organisation and that the Government want to be an active member of the United Nations.
However, we still do not know the foreign policy baseline for the strategic defence review. Both the Foreign Secretary and Secretary of State for Defence have refused to publish it. Several times, the Secretary of State has replied to any question about the foreign policy baseline by saying, "Nudge nudge, wink wink, you will find bits of it in the defence debate in October 1997 and in some of the speeches that I have made to outside bodies."
Why the coyness? Why not publish the foreign policy baseline? This is open government. It is crucial that we establish what, if any, foreign policy commitments have changed and how they will impact on defence capabilities and--even more significant--resources. In default of a foreign policy baseline, Opposition Members--and I suspect that there is a nagging doubt among Labour Members--are forced to conclude that the Treasury is unwilling for the foreign policy baseline to be published before the tough negotiations that are about to start between it and the MOD. If the foreign policy baseline is not published here, on the official record, it can always be massaged to fit the budgetary restraints.
I challenge the Minister: prove me wrong. Stand up today and tell us what the foreign policy baseline is or give us a commitment. If he fails to do that, the strategic defence review is fatally flawed.
On 12 May 1997, the Foreign Secretary made great play of launching a Foreign Office mission statement, saying:
I asked the Secretary of State that question in June 1997. On 16 June 1997, the Minister for the Armed Forces replied:
Ironically, 50 or 100 years ago, if someone had asked an old-fashioned and politically incorrect Minister, either Labour or Conservative--or, if we go back far enough, a Liberal--he would probably have said that the mission of the Ministry of Defence was killing the Queen's enemies. That is not so today; it is a politically incorrect statement. Therefore, as the MOD moves forward the complex process of the strategic defence review, it lacks, according to the Foreign Secretary, who is laying down the foreign policy baseline, those clear objectives so essential to any modern business--or perhaps they form part of that foreign policy baseline, which remains unavailable to parliamentary scrutiny.
My second challenge to the Minister this morning is, can he either tell us the Ministry of Defence mission statement or tell us a date in the near future when it will be published?
That logically brings me to the central issue of resources. Across the board in Whitehall, the Government face the dilemma of keeping their election pledge not to raise taxes while maintaining the Conservative Government's public expenditure plans for the first two years and at the same time delivering on Labour's priorities of education, health and employment. We know that, although the Prime Minister has pledged to maintain strong defences, the defence budget will remain static at best--and at worst it will probably be reduced.
A real strategic defence review, which genuinely examines our foreign policy, our capabilities, and our possible commitments--a real one, such as the Australians had--might broadly reflect Conservative foreign policy commitments, the need to be proactive in the United Nations and to undertake the wider requirements of defence diplomacy, the need to purchase new weapons and equipment that are required and the need at least to maintain the pay and conditions of service personnel. Such a review might conclude that the defence budget should be increased--but we know that that has been ruled out, so this is not an objective strategic defence review.
The political and financial realities confronting the Secretary of State for Defence are almost insoluble. First, his constituency, the parliamentary Labour party, backs defence cuts. In a survey of Labour Members published on 11 May 1997 in The Observer, a ratio of 6:1 favoured defence cuts; the ratio rose among the 1997 intake to 12:1. Not only are many Labour Members sceptical about the need to maintain the present defence budget, many of them believe that that budget provides a milch cow for education and health.
Secondly, despite Labour denials that the strategic defence review would not be Treasury led, the evidence proves the contrary. In October 1997, the Ministry of Defence was forced to make savings of £168 million after the Treasury claimed that there had been overspending and that the savings would help to avert a winter shortage of national health service beds.
There is continual pressure--I know that the Minister is affected by it--from the Treasury to offload the cost of British peacekeeping operations in Bosnia from the contingency reserve on to the Defence vote. However, I suggest that the real financial squeeze will come from the Treasury's comprehensive spending review, which was announced in June last year and should be completed this summer. We know from the answer to a question asked in this place on 3 November 1997 that the strategic defence review is the Ministry of Defence's contribution to the comprehensive spending review. That review is tasking Departments to look for savings--it does not require them to come up with ideas for obtaining new money from the central reserve.
Thanks to the delay in completing the strategic defence review--I remind hon. Members that its publication was promised in December last year, but the completion date has now slipped and we expect it in the first half, perhaps May or June, of 1998--the Ministry of Defence's ideal solution of a quick bilateral deal with the Treasury appears to be receding into the distance. The strategic defence review is being dragged further and further into the orbit of the comprehensive spending review.
Whitehall rumours--who am I to gainsay them--have suggested that the Treasury is seeking long-term cuts of £2 billion, or 10 per cent. of the current budget, or even £4 billion, or 20 per cent. of the budget. If that is not bad enough, the MOD--like other Departments--will have to introduce resource accounting by the financial year 1999-2000.
Dr. Reid:
The Tories introduced it.
Mr. Simpson:
I assure any hon. Members who have not come across them that resource accounts will have a major impact on Government Departments. They will involve valuations of the MOD's assets, inflate the size of the MOD budget and make the MOD appear to other Departments even more of a Whitehall milch cow. The Ministry of Defence will be seen as a soft touch.
Mr. James Gray (North Wiltshire):
Did my hon. Friend hear the seated intervention from the Minister a moment ago? In response to my hon. Friend's comments about resource accounting, the Minister said the Conservative Government introduced it. Does my hon. Friend agree that it sounds as though the Government are planning to abolish it?
Mr. Simpson:
I thank my hon. Friend. I am not certain that the Government know what they are doing in this area. However, they intend to go ahead with resource accounting, which will have a major impact on the Ministry of Defence.
In the short term, the MOD budget will be under considerable strain and, in the medium term, it will be very vulnerable. That will seriously constrain the Secretary of State's strategy of paying for the MOD's one "big idea". A young officer who works at the Ministry of Defence told me recently that the staff are thinking about putting up a series of signs around the Ministry--rather like in "Alice's Adventures in Wonderland"--that will point to "The Big Idea". Ministers and their special advisers might find it one day--but it will be in the boiler room.
The Ministry of Defence's one big idea--which is largely a product of MOD studies; it has nothing to do with Ministers--is an expeditionary force capability. There is a certain irony here because, if we had been sitting in the Chamber 90 years ago, we would have been discussing the formation of an expeditionary force capability under a Liberal Secretary of State for War, Richard Burdon Haldane. We have turned a full circle in 90 years.
Even if savings are found elsewhere in the MOD budget, an expeditionary force capability will require new weapons, equipment and information technology that will not be compensated by internal savings. Even if assumptions are made that our allies will provide many of those capabilities, the United Kingdom will still require a minimum stand-alone capability, which I do not at present envisage the Government's being able to fund.
Quite correctly, the Government have emphasised the quality of our armed forces personnel and the need to sustain their morale and that of their families. We all agree about that, but how do service personnel judge the strategic defence review? We know the answer to that question because a leaked Ministry of Defence report provides the damning evidence. At the end of last year, the MOD conducted a three-week assessment of 1,500 personnel from all three services at 14 different establishments, covering all ranks from private to two-star general. In a damning phrase, the strategic defence review liaison team assessors found almost unanimous suspicion that the review is a
Furthermore, as the publication of the strategic defence review has slipped and slipped, many service personnel and local communities have experienced a great period of unease about their future. In my constituency, the 9th/12th Lancers--an armoured regiment based at Swanton Morley that is currently deployed in Bosnia--are concerned about their future. My constituents at Coltishall and the surrounding villages are concerned about press reports regarding the future of the Jaguar force at RAF Coltishall based in the constituency of my hon. Friend the Member for North Norfolk (Mr. Prior).
Despite all the promises and good intentions of Ministers, we are forced to conclude that the strategic defence review lacks a purpose. To paraphrase Winston Churchill, this strategic defence review lacks a theme. We are unable to determine the foreign policy baseline that is supposed to form the basis of the MOD's defence review. Ministers have been unable to produce a departmental mission statement with a clarity of purpose. The defence budget is vulnerable to pressure both from within the parliamentary Labour party and from the Government's own comprehensive spending review--and that is reflected in the mood of our service personnel. Sadly, the strategic defence review will probably come up with a requirement to do even more with even less.
"Every modern business starts from a mission statement that sets clear objectives".
Quite so. This is now the requirement for most business and industry and, indeed, the military. By any definition, the Ministry of Defence is a very large modern business, worth £22 billion, so where is the Ministry of Defence mission statement?
"We intend to issue shortly revised aims and objectives for my Department in the form of a mission statement."--[Official Report, 16 June 1997; Vol. 296, c. 15.]
Since then, despite repeated requests by several hon. Members, there has been no MOD mission statement.
"cost-cutting exercise dressed up in policy rhetoric".
In the spirit of openness, I ask the Minister whether he will place that report, and any other studies of service morale that he has commissioned, in the Library.
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