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Mr. Bernard Jenkin (North Essex): He does not have the money.

Mr. Duncan Smith: He does not have the money or the answer.

The biggest issue on which we want to focus in this debate is that the Government appear to have learned nothing about what the public think have gone wrong. The public are fed up with spin and relaunch, which are what the Government seem to live by. Indeed, they continued to do so even during the election and are doing so now. We hear continual spin from the Secretary of State for Defence about defence budget increases, but the fact remains that defence spending has fallen since 1997 and is still falling as a percentage of gross domestic product. The increases that he managed to secure in last year's comprehensive spending review are far outweighed by the within-budget savings that have been made on efficiency, asset sales and allocations for smart procurement.

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If the picture is so rosy, why did a leaked internal Ministry of Defence document entitled "Short Term Plan (STP)/Equipment Plan (EP) 2001" clearly show that the Government propose, as was reported,

Will the Secretary of State please tell us why that figure chimes so closely with the figure produced by the Treasury, which said that full manning would cost £1.3 billion?

Even today--and, for that matter, all week--we have found that the Government are continuing their usual practice. Another example of Government spinning relates to the procurement project for aircraft carriers. On Sunday, one of the papers carried a story--of course, the Secretary of State will be asking how it got there--saying that the Government were to confirm that the order for aircraft carriers was going ahead. This morning, the BBC website and even Radio 4 told us that the Secretary of State was to announce today that the order is going ahead.

It appears that the only news that the Government are going to give us is that they are somehow still committed to building the carriers that form the centrepiece of the strategic defence review. However, they need to tell us a bit more. They must tell us where the money is, how much they are prepared to pledge and whether the Chancellor, who is not known for his great love of the defence forces, is prepared to accept that work on the carriers should proceed. For example, we have learned that the funding to be announced for the risk reduction exercise, which is critical to the design of the carriers, will be some £25 million. I hope that the Secretary of State is listening, so that he can provide some answers. However, BAE Systems has pointed out that, under smart procurement, that figure should be nearer £350 million. Will he tell us how much will be invested in that part of the project? Will he give an indication of the Government's commitment, or have they now got cold feet? It is no good him shaking his head. There is no order for the carriers, even though they have been relaunched four or five times since they were first trailed in the strategic defence review.

The announcement on the type 45 was made last year, but there has been no decision. We were even told that the order was placed in December, but no single part of those ships has yet been worked on and we have no idea when that will happen. The Navy has no replacement ship on the horizon, does not know when it will arrive and is slipping behind on the programme. The shipyards that were supposed to be building the vessels--especially Vospers--are no closer to knowing whether they can withdraw the redundancy notices that they sent out, or whether they will have to let go of employees. That is the most tragic part of the situation.

This week, there was another reannouncement--this one was unbelievable--about the A400M project. From the way in which the Government have talked about it, one would think that they were buying a thousand of the aircraft. In the Secretary of State's great announcement, nobody mentioned that the number of aircraft to be bought has been cut from 288 two years ago to only 212 this week. How many more will be cut before the next piece of paper is signed but the Government fail to place the order again? It is only an memorandum of understanding anyway, so there is no fixed purpose of procuring those aircraft and no contract.

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Doubts still remain about the Germans' commitment to the project. They are supposed to be buying some 73 of the aircraft. Does the Secretary of State honestly think that they will ante up to that? BAE has said that if the number falls below 180, the project will no longer be viable, and we are not far from that number now. When will the Secretary of State get round to ordering something and to being firm about what will be bought? I warned him last year that if he did not do something soon, companies such as BAE would be in crisis over what will happen next.

My right hon. and hon. Friends know that this is a cynical Government, but--cynicism of all cynicisms--just two days before the election a wonderful £120 million contract was signed for the Rosyth dockyard to refit the aircraft carrier HMS Illustrious. The Under-Secretary of State for Defence should be careful about smiling about that, because his constituency of Kirkcaldy is close by. However, the one person whose constituency will really benefit just happens to be the Chancellor himself. Why could not the Government have left the announcement for the day after the election? It is an example of the Government's use of pork barrel politics. No wonder the public are fed up of politicians when the cynicism of the Government reaches such new heights. [Interruption.] I am glad that the hon. Member for Nottingham, North (Mr. Allen) is in his place and is now able to speak. It has been so long since we have heard from him--and the right hon. Member for Dewsbury--that I wondered whether they had lost their voices. In the next few days, they may wish that they had.

The Government clearly have no answers on those points, so I shall move on to the issue of the European army or rapid reaction force. The formation of that force, which has been driven by this Government, represents a break with foreign and defence policy in place since the second world war. It does so in a way that--I believe--the Government and the other nations of Europe will come to regret.

At the NATO summit last week, President Bush said that he would

However, there can be no doubt that the Government are embarked on a divisive process that will undermine NATO. Non-EU members, such as Turkey, have been excluded from the force and planning for operations will take place independently of the NATO framework. The Defence Secretary has admitted as much himself. Much concern is felt in the US about the issue, as over here.

Despite the President's carefully chosen--as ever--words, it is worth considering the thoughts of a previous director of the CIA, James Wolsey, who was in office under the Democrats. He recently noted:

The USA has, rightly, asked European nations in NATO to be able to do more and better, and to be able to get more men and equipment to the place they are required. None of that is happening, even over here. Instead, a set of bureaucratic and divisive structures is being created.

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For all the talk about improving European defence capability and strengthening the NATO alliance, the fact is that EU defence spending is falling. A recent report by the Institute of Strategic Studies said that it was falling by 5 per cent. a year in constant dollar terms, so I do not know how the Government have the cheek to tell us that the programme will improve the defence capability of the European nations. No one else sees it like that. As my right hon. and learned Friend the Member for Folkestone and Hythe said, the terrible future that lies ahead is one of a growing gap between north America and Europe, driven by those on the continent and some here who see the process as one of simply counterbalancing America as a hyperpower.

One issue that is a test of the Government's attitude is missile defence. The Labour party hardly dealt with the subject during the election. It is perhaps the most important strategic subject, and the Government may come to rue their position. In the Labour manifesto there was little more than a waffly statement about waiting to find out what would be decided by the Americans. The Government have given few public signs that they support the concept of missile defence or even made any attempt to explain why they do not.

The most worrying feature is something that other of my hon. Friends may be worried about. The Government still do not put our nuclear deterrent in context or say how it would work within such a defensive shield. In other words, they do not want to talk about it because, as the hon. Member for Islington, North (Jeremy Corbyn) would happily agree, most of the Labour party does not want it. It is absolutely opposed to NMD and does not want the Government to support it. Many of the Labour party's allies in Europe do not want it either, but not all of them. The intriguing thing is that other countries have been much quicker to give the United States the support that allies would normally expect.

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