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Mr. Duncan Smith: Two points arise from the Secretary of State's comments on ballistic missile defence. First, will he confirm whether there is a shift in Government policy from that which his predecessor espoused? His comments imply that.

Secondly, the Secretary of State mentioned the four elements of reaction to proliferation. In the past two or three months, evidence has suggested that, despite sanctions, Iraq is close to being capable of producing a missile and a weapon of mass destruction. Does not that make it much more important--if not urgent--for the Government to make their position on ballistic missile defence clear? Otherwise Iraq will not feel deterred from going ahead.

Mr. Hoon: I expressed the Government's anxieties about proliferation and acknowledged that the US is right

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to want to defend itself in the way that it proposes. However, it has not yet made a decision. There has been no shift in the Government's position. An evolution of thinking in response to the issues is inevitable. It is taking place in the US as well as in the United Kingdom and among NATO allies. It is important to conduct a calm and measured debate. We welcome the fact that, since last year, the US has involved NATO allies in evolving the thinking on difficult and potentially dangerous matters. I listened carefully to the hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) and assure him that the Government will respond appropriately when and if the US decides to deploy national missile defence.

Mr. Wilkinson: The Secretary of State is making some significant statements. If the United States were to procure a system to deploy a national ballistic missile defence, would not it be remiss of the United Kingdom not to participate jointly in such a system because it would be a cost-effective option that would have operational as well as economic benefits?

Mr. Hoon: The hon. Gentleman, understandably, invites me to travel much further down the road than it is necessary to go now. As I have said, we are in close contact with the United States. As its thinking evolves and as ours matures and develops, we shall perhaps have to address such matters, but we do not have to do so today. Unless and until the US decides to deploy even a limited national missile defence, there would be no great value in considering those issues, although I am sure that appropriate think tanks will welcome his thoughts on the subject.

We in the United Kingdom have taken great strides to ensure that the support provided to those forces will be the best we can provide. The new Defence Logistics Organisation will ensure that. Smart procurement is already showing how it can achieve significant reductions in the costs and time involved in bringing equipment into service, such as £200 million off the lifetime cost of the Challenger 2 tank and up to five years knocked off the time between main approval and the in-service date for the future offensive air system, which will provide a day and night long-range offensive air capability to replace that currently provided by the Tornado GR4.

We are leading the way among NATO and European nations in rebuilding and restructuring our forces for the operations that we expect to face in future. We cannot afford to be alone in that restructuring. Future operations are almost certain to be conducted in coalition with our allies and partners. Such operations will not succeed if they have not also restructured their forces. It is right that Europe should occupy a significant place on the international stage that reflects the continent's political and economic weight. However, a place at the top table brings obligations and responsibilities. In terms of its military capability, Europe is simply not up to the job in certain key areas.

The debate on European security and defence was launched by my right hon. Friend the Prime Minister about 18 months ago. The Kosovo crisis threw into sharp relief the gaps in European capability and gave added impetus to NATO's defence capabilities initiative. It is only right that Britain should have taken a leading part in

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developing that work. The European defence initiative will ensure that, collectively, Europe's armed forces are capable of meeting their responsibilities. From the start, we have focused on the practicalities of improving Europe's military capability so that we can better contribute to NATO and are able to take effective action when NATO as a whole is not engaged.

Mr. Nicholas Soames (Mid-Sussex): I apologise for not being present for the beginning of the right hon. Gentleman's speech. Will he tell us what practical steps he is taking to encourage those capabilities, given that European defence spending is decreasing? How can the Germans increase their capability, which needs to be dramatically increased, if they are cutting their defence budget?

Mr. Hoon: I am pleased that the hon. Gentleman is here. I was concerned that he would miss not only the beginning of my speech, but most of it.

Mr. John Bercow (Buckingham): My hon. Friend was having lunch.

Mr. Hoon: That is a wholly plausible excuse.

The specific answer is that we have concentrated on the capabilities because too many European nations are still organised to face the threat from the Soviet Union-- a threat that fortunately no longer exists. We are emphasising the need to reorganise those forces along expeditionary lines, as we have advocated in the strategic defence review, so that they can rapidly enter the field. That is precisely why, at the Helsinki European Council last December, all EU leaders committed themselves to meet a challenging target for collective capability. That headline goal requires EU member states to be able, by 2003, to deploy rapidly and sustain up to 60,000 troops, capable of undertaking the most demanding crisis management tasks.

Meeting that goal means improving Europe's armed forces so that we are better able to assemble, deploy and sustain the right mix of forces for specific NATO or EU-led operations. That is about real world capability; it is not institutional tinkering and certainly not a matter of creating a European army. We in the United Kingdom will continue to give a lead.

Mr. Robathan: I thank the Secretary of State for giving way: he has been particularly generous in doing so.

I have here a quotation from Mr. Prodi, President of the European Commission. In February, following the Helsinki summit, he told The Independent:

Mr. Prodi said that he was not joking. He means a European army.

Mr. Hoon: I am sure the hon. Gentleman knows enough about the institutional structure of the European Union to be aware that Mr. Prodi--I assume that it is the same Mr. Prodi--is a European Commissioner, and, as such, will have no responsibility for the arrangements that we propose. Those arrangements will be dealt with in an intergovernmental context. Like any other European

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citizen, Mr. Prodi is entitled to his point of view, but it will not reflect the decisions that European Governments are making.

We want the European Union to draw on detailed technical support from NATO, while retaining political control of the process. That will avoid the establishment of wasteful duplicate planning systems.

Mr. Quentin Davies: Can we return to the question of whether there is any chance that the Helsinki commitments will be met? Is the right hon. Gentleman using every opportunity to try to persuade his European Union colleagues to increase their defence budgets, or is he not?

Mr. Hoon: As I have said, getting a force of between 50,000 and 60,000 into the field quickly is not strictly about the size of the budget; it is about reorganising existing spending. It ought to be possible for the United Kingdom to deliver a force of that size to a theatre pretty quickly, but other countries ought to have the same capability. The aim of the headline goal is to make them concentrate on that, and they all agreed to it. Our immediate task is to expand the headline goal into a detailed list of the required forces and capabilities. That will provide a sound baseline, enabling us to identify national contributions and to highlight overall shortfalls later this year. The work is going ahead, in a detailed and practical way.

Work to implement the headline goal can only help the implementation of NATO's defence capabilities initiative. It will strengthen Europe and, in so doing, will strengthen NATO. As European nations are better able to bear their share of the alliance burden, our relationship with the United States will be strengthened.

Last year, we celebrated the 50th anniversary of the Atlantic alliance. Around that time, many predicted that the celebration would become a funeral wake, and that the alliance would break apart under the pressures of the Kosovo crisis. They were wrong: the alliance emerged strengthened, having demonstrated a remarkable ability to pursue a common purpose in difficult circumstances.

NATO, however, is not the organisation that it was 50, 20 or even 10 years ago. "Adapt or die" may be an over-dramatic cliche, but there is a truth in it. With its new command structure, its force structure review, the defence capabilities initiative and a series of other changes, NATO has adapted effectively. Meanwhile, we in the United Kingdom are adapting to face the challenges of the new century. Practical experience over the past 12 months has shown that, like the alliance of which we are a part, we have made a sound and effective start. There is still some distance to go, but I believe that we have the right plans for making the changes we must make. I also believe that we are doing all that we reasonably can to ensure that we, and Europe, will be able to respond to the challenges that we can be sure will face us in future years.

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