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Mr. Gray: Opposition Members have been listening carefully to the hon. Gentleman's proposals, although they are not exactly rocket science. Has he costed them? Will he tell us precisely how much they will cost the nation and will it be taken out of the penny on income tax which, at least until recently, was the Liberal Democrats' only taxation policy?

Mr. Keetch: I am glad that the hon. Gentleman thinks that the proposals are not rocket science. Indeed they are

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not, but at least we are putting forward proposals, unlike the official Opposition who seem to have nothing to say besides criticising the Government. If Conservative Front-Bench Members will just contain their enthusiasm for my words a little longer, I shall come to the defence budget in due course.

Liberal Democrats would also review moving and relocation allowances to ensure that the total costs to service personnel are adequately covered. The armed forces should, as far as possible, reflect the society that they serve, as the Secretary of State said. Armed forces personnel may be called upon to risk their lives in the service of their country. We accept that the services must have standards, for example of discipline, that differ from society at large in order to meet the special demands of the military. But no one should be subject to unfair discrimination in relation to pay, discipline, accommodation, other benefits and promotion opportunities.

Despite some small improvements, ethnic minorities still make up only 1.7 per cent. of the armed forces. It is clear that a career in the armed forces does not appeal to the youth of the ethnic minorities in Britain. High-profile initiatives to root out racism in the armed forces are welcome, but Liberal Democrats suggest that outreach and recruitment programmes run by the MOD in the ethnic minority communities should include a drive for cadet membership among young people.

The MOD continues to review the role of service women in the armed forces. Despite significant progress in the number of women serving and in widening the range of jobs open to women, some front-line positions remain closed. Liberal Democrats believe that no post should be closed to male or female personnel provided that they can meet the physical and mental requirements of the task.

Ensuring high standards of welfare for the families of service personnel is central to securing high levels of retention. The reason for departure most cited in the continuous attitude survey for service leavers is the effect on family life. It is therefore imperative for the efficient running of our armed forces that social, educational and recreational facilities for service men and women and their families be actively supported.

We offer our support to the service families taskforce and what it has done so far. We should like to see a service families officer on every base and we should like to see that implemented soon, but we support the Government in what they have done.

Mr. Mark Prisk (Hertford and Stortford): The hon. Gentleman mentioned pensions and I should be interested to know whether Liberal Democrat policy is to maintain cost neutrality, as appears to be the Government's policy—or have they not established a position on that yet?

Mr. Keetch: The short answer is yes, we would support cost neutrality.

Yesterday we heard of the proposed action by Kenyan tribesmen in relation to unexploded ordnance left by British forces. The Secretary of State is concerned that yesterday I referred in the media to the role of civil servants. I was wrong to criticise civil servants directly. Civil servants cannot reply and I apologise to them, but I

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have to say that the suggestion yesterday that a deal might be struck by MOD lawyers is just another round of litigation.

The MOD was taken to the European Court of Human Rights before it would give compensation to gay men and lesbian women who have been wrongly dismissed. The MOD was forced to pay £60 million in compensation to service women obliged to leave the forces on the grounds of pregnancy. We have also heard of the cases relating to equal pension rights for Gurkhas, soldiers who caught malaria in Sierra Leone and the tax on service pensions blunder.

Ministers must realise that there is a difference between being prudent and sensible with resources and being seen by some as an uncaring regime, never assuming responsibility and never saying that one is wrong. It is no wonder that there are acute problems with undermanning in the armed forces when in some cases the public image of the MOD is of an intransigent and unbending organisation that never admits its mistakes. I hope that the Secretary of State will look at the way in which his Department deals with compensation actions, particularly in relation to taking care of our service men and women and their families.

Some of the changes to personnel policy that I have outlined could be made easily while others would require greater expense. With the results of the comprehensive spending review looming, I must add that the Liberal Democrats are committed to maintaining our defence capabilities, even if that means a real increase in defence spending. Improving standards for our armed forces and resolving the crises of overstretch and undermanning are important aspects of maintaining that capability.

It is important to say that a career in the armed forces remains an incredibly attractive and deeply worthwhile option for our young men and women. I am sure that no hon. Member would wish to discourage anyone from pursuing that career, but it is important that any flaws in personnel policy and any possible solutions should be discussed in the House.

In a debate on armed forces personnel, it is right to conclude by saying once again that our armed forces perform an incredibly difficult job with remarkable skill and courage. However, if we are to maintain our capability and the extraordinarily high regard in which our armed forces are held throughout the world, we must ensure that their unflinching commitment to us is matched by our unflinching commitment to them.

3.20 pm

Mr. John McFall (Dumbarton): I shall focus my remarks on one issue in my constituency: the effect on the personnel at the Clyde submarine base of the decision of my right hon. Friend the Secretary of State for Defence to privatise the warship support modernisation programme. I am hugely disappointed about the implications for Faslane, not least because the decision was taken without a rational basis. The MOD issued a general statement to the effect that there was overcapacity in the four yards, but no effort has been made to define that overcapacity in Faslane. The MOD said that savings of £250 million to £300 million were required, but again, no further insight into how those savings were to be made was put on the agenda.

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What has been on the agenda since 1997 is privatisation. The issue has a long history; indeed, after the Government came to office in June 1997, the privatisation of catering services in Faslane was announced. The initiative was known as HMS Neptune.

Along with the trade unions and the work force, I petitioned the then Minister of State, Ministry of Defence, now my right hon. Friend Secretary of State for Northern Ireland. We realised that savings had to be made, but we asked him and the MOD why they could not be made in-house. The unions and I made proposals at a meeting with him at the MOD. As a result, he overturned the decision proposed by MOD officials and made HMS Neptune in-house. Consequently, we have had target savings every year since.

The trade unions undertook the same exercise this time round, but it was rejected. The experience has been bitter for the work force and for me, especially with regard to the successful prosecution of HMS Neptune and my efforts to ensure that the MOD allowed itself sufficient time to examine the benchmark proposals made by the trade unions in Faslane. I have met my right hon. Friend the Secretary of State a number of times to discuss the matter, but to date, I have received no detailed explanation of why the Government are taking this way forward, other than the notion of the £250 million saving. The work force, the trade unions and I accept that continuation of the status quo is not an option. The problem is the manner in which the decision was made and the way in which it was handled.

I am not one of those who say that the Government are arrogant—a notion that has been put abroad. We are not arrogant, but arrogance can certainly be detected in the way in which the MOD has gone about its business in this case. Let me explain. On the weekend of Saturday 23 March, the media trailed the story that there would be 1,000 job losses in Faslane. They did so in Scotland in particular, but also throughout the UK. The story ran the whole weekend, but there was no MOD response and no explanation was given, so it grew legs. No contact was made with the Members of Parliament who had a vital constituency interest. All that was said by the media and across the wires at the weekend was that a statement would be made on Monday.

The Minister of State for Defence (Mr. Adam Ingram): Does my hon. Friend accept that a statement was to be made on the basis of a parliamentary question? The fact that a breach of confidence occurred somewhere in our discussions is not a matter for the Ministry of Defence. If I or any of my colleagues had proceeded to take on the debate before the House had been advised, we would have been criticised as having inspired the leak. I must make it clear to my hon. Friend—I hope that he accepts the sincerity of my remarks—that the decision was taken not to enter the debate over the weekend or to engage with individual Members of Parliament because we were giving due respect to the House of Commons.

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