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9.45 pm

The Parliamentary Under-Secretary of State for Defence (Mr. John Spellar): This has been an interesting debate. The hon. Member for Salisbury (Mr. Key) advised us that his constituency was previously represented by eight Members of Parliament, which is obviously an example of efficiency measures. I was accused by the hon. Members for Blaby (Mr. Robathan) and for Mid-Sussex (Mr. Soames) of political correctness. Colleagues will find that slightly difficult to take. It is also absolutely absurd--we are talking not about political correctness, but about good, old-fashioned British virtues of fair play and decency. In that context, the contribution of the hon. Member for Mid-Norfolk (Mr. Simpson) was welcome.

In closing what has been a good debate, I should like to address two areas of defence business which may not catch the headlines in the way that operations do, but which are none the less extremely important: the defence estate and the smart procurement initiative. Ministry of Defence land holdings in the United Kingdom currently extend to almost half a million acres. We are thus a major landowner and a major customer of the United Kingdom construction industry, to the tune of £1.7 billion a year.

Our management of the wider defence estate was considered carefully during the strategic defence review. We had to ensure that our estate is not only utilised to the maximum possible extent, but is the right size to meet our changing operational requirements. We have concluded that there should be more effective central strategic management of the estate. As a result of a thorough review of our estate holdings during the SDR, we have put in place an ambitious, but achievable, land disposal programme which will shape our estate better to reflect the new structure and priorities of the armed forces. It is also part of our contribution to brown-field development, which was mentioned by the hon. Member for Colchester (Mr. Russell).

Mr. Ian Bruce : The Minister knows from our many conversations that I am concerned, as are my constituents, that an air station that is to close and be sold off, for which we had customers, has been frozen from that sale. I am told that we will not even be able to start negotiating until March 1999. That is not acceptable. What is he going to do about it?

Mr. Spellar: As the hon. Gentleman knows, I was down in Weymouth and Portland last week. I met the local council and a number of the companies involved, and I fully understand the frustration at delays. There are genuine issues that we have to deal with in terms of

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alternative use; indeed, we aim to progress that as soon as possible. I will write to the hon. Gentleman as soon as we are able to make further progress.

Last week I also announced major changes in our construction programme. We are a major, £1.7 billion a year public client. As such, we must not only secure value for money for front-line defence, but play our part in reform of the construction industry following the Lathan and Egan reports. That, I have to admit, is challenging, in the best Sir Humphrey use of the word, but it is vital for our defence infrastructure and for our national economy.

Our smart procurement initiative on defence equipment was mentioned by a number of hon. Members and is,as the hon. Member for Mid-Norfolk rightly said, enormously important for our vital defence industry. The initiative is a key element of a reform programme that will lead to clear improvements in defence procurement in terms of time, cost and performance.

A full-time smart procurement implementation team has been established. The team started work in earnest in September and has made brisk progress. It is required to produce, by March 1999, a detailed implementation plan for transition activities during 1999-2000. The approach adopted by the team, which is working under the overall direction of a steering group, which I chair, will be to test the smart procurement principles and concepts in a series of pilot projects. A number of projects are now being selected as potential pilots, such as the future offensive air system, the attack helicopter and the future attack submarine.

Those pilot projects will provide a challenging test of the smart procurement principles in a live environment. They will not involve parallel running, nor will they shadow existing project activity. They will do it for real. They will draw from projects relating to all environments and range across the spectrum of our procurement activity by value, technology, their position in the procurement cycle, and the degree of industry involvement.

I accept that that is all being driven forward at great speed. Momentum has been generated and we intend to maintain it for two reasons. First, the Ministry of Defence has been set a number of performance and savings targets as part of its funding allocation and we need to ensure that the improvements promised by smart procurementare delivered as soon as possible. Secondly, the reorganisation of projects into integrated project teams creates uncertainty for staff, both civilian and military, which we are keen to resolve at the earliest opportunity. We understand that this is a time of anxiety and opportunity for our staff. Many are looking to the changes with eager anticipation to improve the job that they do for the Department. Some are concerned and will want to move, and others will want to be sure that it works. Like the Select Committee, we recognise that we will need to manage change with care to preserve staff morale and working efficiency.

Mr. Peter Bradley (The Wrekin): My hon. Friend will know of the defence sector's importance to my constituency and how welcome the Secretary of State's announcement was in April that GKN Defence was to be part of the German, French and British consortium that has won the contract for a multi-role armoured vehicle. We are also pleased to see a reference to that in the SDR. Since then, however, we have had the German elections.

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Can my hon. Friend confirm that Ministers have discussed the issue with their German counterparts, and that the contract remains on track, the consortium remains in place and the timetable is secure?

Mr. Spellar: That issue was also mentioned by the hon. Member for Salisbury in the introduction to his speech. The position has not changed. We are continuing to discuss with France and Germany the terms of the contract with the winning consortium. We have had no indications from the Germans of an intention to freeze the programme. Not only are we continuing to work actively with them on it, but my right hon. Friend the Secretary of State will go to Germany this week and discuss that matter. I give my hon. Friend those assurances.

Industry support for, and involvement in, the smart procurement initiative is vital. The creation of new partnering arrangements with industry, established through competition wherever possible, will be an important enabler for a number of the smart procurement principles. I am pleased to tell the House that new guidelines, agreed between the Ministry of Defence and the Confederation of British Industry, will shortly be issued.

Smart procurement is but one area where we are demonstrating our determination to make the very most from defence resources. Another area where we are considering ways to maximise the return on our investment is that of defence diversification, mentioned by my hon. Friend the Member for Ilford, South (Mr. Gapes). Our Green Paper has been generally well received and I am pleased to announce that we intend shortly to publish a White Paper on defence diversification.

I shall now deal with some of the matters raised in the debate, though regrettably not all. There was a new and welcome element, particularly in the speeches by the hon. Members for Mid-Sussex and for Salisbury. It might almost be described as "constructive opposition"--they were prepared to say where they agreed and focused on the arguments where they differed. I hope that that does not damage their careers. I say genuinely that it is a welcome development. The real consensus on defence is when we get national agreement on principles, and argue about implementation.

Hon. Members, including my hon. Friend the Member for Chorley (Mr. Hoyle) and the hon. Members for Portsmouth, South (Mr. Hancock), who has unfortunately had to leave, and for Salisbury, have, again today, asked about carriers. I dealt with most of the points yesterday in columns 1051 and 1052 of Hansard. I reaffirm what we said in paragraph 115 of the SDR, which is that

That is what we said, that is what we are going to do, and that is what the Navy wants.

Mr. John Maples (Stratford-on-Avon): I am glad to hear that commitment. If that is the case, what will the Ministry do if the feasibility studies on the existing carriers conclude that it can be done, and they can land the joint strike fighter? Will he throw that out?

Mr. Spellar: Having misread the advertisement yesterday, and having carefully omitted the word "study", the hon. Member for Stratford-on-Avon should have kept quiet. We answered that question.

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Yesterday, the right hon. Member for Wealden(Sir G. Johnson Smith) and the hon. Member for Stratford-on-Avon referred to NATO, as did my hon. Friend the Member for Ilford, South today. In our manifesto, we said:

In the strategic defence review, we said:

    "NATO will continue as the cornerstone of our defence planning".

That is why it was sad to see the outbreak of Euro-scepticism among Conservative Members. There is no sharp choice between Europe and America in today's strategic environment. They are but two sides of the same coin: both are essential to our security.

Britain is playing a key role in developing NATO's new strategic concept--the alliance's own SDR--to give it an equally clear vision into the next century. We are also playing a central role in developing an effective European security and defence identity in NATO. I stress the word "effective", because at present European rhetoric is not matched by the reality of Europe's military capability. Our priority must be to ensure that European allies can make an effective military contribution to operations, including when the Americans choose not to participate.

The Western European Union is an integral part of that approach. Progress on the practical relationships between WEU and NATO on the one hand, and WEU and the European Community on the other, are important to avoid unnecessary and damaging duplication of the work of all three organisations.

The hon. Members for Salisbury and for Tatton (Mr. Bell) referred to the Association of RAF Wives. I am pleased to tell them that the chairman and executive of that organisation met the air member for personnel earlier this month. They have agreed to produce in the next month or so a memorandum of understanding and an acceptable business plan for the association. I am sure that that is welcome, and I shall write to the two hon. Gentlemen to inform them of the outcome.

My hon. Friends the Members for Leyton and Wanstead (Mr. Cohen), for Aberdeen, North (Mr. Savidge) and for Bury, North (Mr. Chaytor) referred to nuclear disarmament. On many occasions, we have made clear our commitment to the goal of global elimination of nuclear weapons. When we are satisfied with verified progress towards that goal, we shall ensure that British nuclear weapons are included in multilateral negotiations. We are working to take forward our commitment in the light of the conclusions of the SDR.

I remind colleagues that the United Kingdom was the first nuclear weapon state to introduce legislation to implement the comprehensive test ban treaty. We also welcome the agreement made this year at the conference on disarmament to begin negotiations on a convention verifiably ending production of fissile material for use in nuclear weapons.

The hon. Member for Mid-Sussex referred to the movement of staff between the Foreign and Commonwealth Office and the Ministry of Defence. I presume that, as the new permanent secretary at the MOD has come from the Foreign Office, we may be instigating that policy.

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My colleagues and I are justifiably proud of the outcome of the strategic defence review. We have developed a package of measures that will provide a clear and sensible direction for the armed forces and all those who support them. That package has been welcomed on all sides: it has been praised by politicians, journalists and academics here and around the world and, most important, by the men and women whose lives are most affected. That should not surprise us. The structure that will emerge from the review will provide modern and relevant forces that will be more effective and more capable of furthering Britain's interests as a force for good in the world.

We are keenly aware that the success of our proposals depends on implementation, and we know that that is no easy task, but the rewards will be great, and we are determined to achieve them. As we have made clear in the past two days, we are making good progress.

The strategic defence review has been a remarkable success. Its implementation promises much, and will deliver it. I have pleasure in commending it to the House.

Question put, That the amendment be made:--

The House divided: Ayes 134, Noes 366.

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