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Dr. Moonie: To save me from having to spend too long on that in my winding-up speech, there is a vast difference between outturn figures and budgets. The hon. Gentleman is comparing an outturn figure, which includes contingencies that are always paid by the Treasury, with the forecast budget figure, which underpins our regular spending. He is 100 per cent. wrong.

Mr. Laws: Although the Minister says that I am 100 per cent. wrong, I am, in fact, 100 per cent. right because the figures in the document bear out the claim that in every year of the spending review real expenditure will be lower than it was last year. Regardless of the contingency claims, that demonstrates that the Ministry of Defence budget remains under pressure.

I notice that the Minister did not challenge what I said about the Ministry having the lowest increase in real terms of any Department other than the Department for Work and Pensions and, when we include the change in annually managed expenditure, that it comes bottom of the list. I am sorry if the Minister does not like those comments, but he should look at the documents. Perhaps he is irritated and upset because the Chancellor managed to pull the wool over his Department's eyes. Perhaps he does not like the reality of the figures, which do not live up to the Chancellor's spin, but they are in his Department's documents.

We are grateful to the right hon. Member for Walsall, South for the excellent report that his Committee produced last week on major procurement projects. I shall focus on the four or five projects on which there are the most substantive concerns or the greatest differences of opinion. I accept his general point that there is, thank goodness, a great deal of unity among hon. Members on the overall approach taken by the Ministry of Defence, but we must concentrate on the matters that concern us.

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The Minister gave the impression that the Select Committee's report was mildly supportive of the decision on the Sea Harrier. Having read the report and listened to the comments of the right hon. Member for Walsall, South, the Chairman of the Select Committee, I must say that they are a strange endorsement indeed. In paragraph 92 of the report, the Committee notes:

other nations, that is—

The hon. Member for Aldershot asked on whom we might rely to take over the vital role of air patrols at sea. The right hon. Gentleman said that the only alternative to the United States of America is Russia, a country on which no one would want to rely to secure our future defence needs.

I am sure that hon. Members agree that we must ensure that the strategy for the future of our defence is sufficiently flexible so that we can fight any reasonable campaign. We cannot be sure that the campaigns that we might have to fight over the next five to 10 years, when we might have no proper air cover for our fleet, will receive the support of the USA. If we cannot be sure of that, we cannot be sure of the support of any other nation either.

The Minister said that he is taking a decision on the balance of risks and that the technical upgrade of the Sea Harrier is risky. However, he should acknowledge that he is transferring one risk for another. He does not want to risk upgrading the Sea Harrier but, as a consequence, he is taking the risk either that our armed forces will not be able to engage in operations requiring that layer of air cover or that we will engage in those operations in circumstances that endanger our armed forces, which would be even worse.

There is deep non-party political concern among hon. Members—I certainly detected it in the Select Committee—about the Government's decision. I urge the Minister to reconsider it because, in a world of second best, it might be better to spend money prolonging the life of the Sea Harriers rather than losing the significant capability that allows us to deploy the Royal Navy with air cover. The experience of the Falklands war reinforced the fact that we cannot rely on ship-based missiles to defend our forces, especially at sea, because the ability of our enemies to deploy missile technology against us is changing and improving all the time. Defence Ministers and generals used to be criticised for always wanting to prepare to fight the last war. My concern is that we seem to be unable to fight even the last war, let alone the next one. I hope that the Government will re-examine that matter.

Mr. Francois: The hon. Gentleman mentioned the Falklands. I am an Atlanticist by instinct. If anybody is likely to support us, it would probably be the United States. We now know that the United States provided us with assistance in the Falklands, but even they did not send us the USS Nimitz. That was a real scenario in which we could not rely even on the US for carrier-based air power. It is not fantasy to say that a problem exists.

Mr. Laws: I entirely agree. We simply cannot predict the type of environment that we will be in or the defence choices that we will have to make. We cannot be sure of

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future circumstances and the level of support that we will receive from our potential allies, even the United States. Over the next five to 10 years, the Government risk putting us in a position in which we cannot pursue our defence interests or have to take unacceptable risks to do so. I hope that the Minister and the Department will reconsider the issue.

Mr. Ingram: It is easy for the hon. Gentleman to throw around scenarios that have no bearing on reality. Will he accept that the period from the non-availability of the Harriers to the availability of the new fleet is about 18 months, not the five to 10 years that he has just quoted?

Mr. Laws: There are two points. First, if we are to rely on aircraft rather than simply on ship-based missiles, that period would be longer than the Minister has indicated. We all—not least the Minister and his Department—know about the potential for new orders to slip. What could start off as a two, three or five-year gap could easily slip into a much longer one. We would not only risk our flexibility in defence policy and our armed forces during that period, but run down the skills and abilities of the air crew who are currently involved in such operations. They are specialised and skilled and would be difficult to maintain without Sea Harriers.

Secondly, in responding to the hon. Member for Aldershot, the Minister said that, at the moment, the Government do not intend to change the number of Eurofighters to be ordered. We know how these things can change and that current Government policy is to order 232 Eurofighters. Are the Government considering not taking the later tranche of Eurofighters because of slippage of the programme, the pressures on the procurement budget and on the defence budget in general and the fact that the arrival of later tranches of Eurofighters will be close to the arrival of the joint strike fighter?

That matter is slightly unclear and I look forward to gaining some insight into it when the Under-Secretary replies. Are the Government considering transferring orders between the Eurofighter and the joint strike fighter? The Minister will know that regardless of what is said in the House, many people, including defence experts, those who have recent experience of such matters and perhaps those on the Defence Committee, are sceptical about the Government's willingness to deliver on the 232 Eurofighters and believe that, eventually, they will order a much lower number—perhaps even fewer than 150.

The third issue is lift capability, which has not been much discussed today. However, it is an extremely important issue in light of the fact that the Minister and his Department envisage that we will be engaged, not in the static warfare that we might have fought in western or eastern Europe, where we would be able to reinforce from Germany or our own shores, but in operations in which, typically, we might have to deploy all over the world. Has he evaluated our lift capability, including the capability of our helicopter fleet? He would be disappointed if I did not mention helicopters. Has he calculated whether our current lift capability matches the requirements that he and his Department believe we should have?

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Does the Minister believe that we should consider bringing forward the Sabre project, which would look at a replacement for Puma and Sea King? Obviously, I am not going to try to influence the Minister by suggesting an ideal replacement. He knows that many excellent products come out of the west country, and this matter must be considered in the normal, rigorously competitive way. Without mentioning specific products, can he say whether lift capability has been evaluated and whether it is considered a problem?

My fourth point has been aired by a number of hon. Members: the SA80. Today, The Sun has a cartoon showing a typical battlefield of the future, with new unmanned aircraft using all sorts of sophisticated technology to scan information and pick up what is happening. It ends with a picture of the Prime Minister in Downing street following all the information as it comes in. All that sounds wonderful, and if we can get the technology right, it may be the way of the future.

While we are waiting for that fantastic new technology, however, there remains concern, as the Minister has acknowledged, over the most basic product on which our armed forces rely—the rifle. He said that he does not want to make irresponsible statements or raise fears unnecessarily and that he is conducting an investigation into the product to find out whether it is good enough. We understand all that, but he will understand that there is already great concern about that equipment which extends into the armed forces.

When the Under-Secretary winds up the debate, will he go a little further and say more about the time scale for the decision that will be made? Can he give us a firm commitment that if the Department concludes that the product is not reliable enough in the extreme conditions in which we may deploy our forces, it will be willing to make a potentially large investment to find a new piece of equipment to do the job? Does he agree that the issue is too important and basic to be subject to budgetary constraints and to be offset against other items in the procurement budget?

Finally, will the Under-Secretary shed some light on the matter of unmanned aerial vehicles, to which I just referred? The other day, the Minister of State answered several questions asked by my hon. Friend the Member for Hereford (Mr. Keetch) about the Phoenix system and its possible replacement. That project has been long delayed and there has been much comment about the effectiveness, or potentially the ineffectiveness, of Phoenix. Does that project still have some life in it, or do Ministers consider it dead? Will it be replaced by the new Watchkeeper system that is being considered?

Those are some of the major issues on which we need answers today. I see from the Minister of State's reaction that I have hit on some of the right issues; I seem to have enlivened him. I look forward to enlightenment in the wind-up not only on the salient procurement issues but on the budgetary issues about which all hon. Members have expressed concern today.

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