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The Parliamentary Under-Secretary of State for Defence (Mr. Ivor Caplin) rose—

Mr. Simpson: If the Under-Secretary is able to respond to my point now instead of at the end of the debate, I would be grateful.

Mr. Caplin: I shall say what I said before. As the hon. Gentleman knows, the Ministry of Defence contests the 60 per cent. figure. We have held discussions with the British Legion to examine the information in greater detail and are happy to work with it. He also knows that we were not looking at a figure for savings. The pensions and compensation schemes are separate, but both are cost neutral.

Mr. Simpson: I thank the Under-Secretary, and I look forward to hearing further representations from those affected.

The Minister of State touched on the problem of accommodation. Progress is not being made on improving service family accommodation. We understand that the target of bringing all core stock SFA in the UK up to standard 1 for condition will not be achieved by 2005. Why will it not be achieved, and will there be a new target date? What progress has been made on Project Slam to improve single living accommodation for members of the armed forces? I fully appreciate that new recruits in today's world—both men and women—much prefer, and indeed want, single accommodation rather than old-style barrack accommodation.

The Minister knows that about 8,900 troops have been affected by the failure of the "Pay 2000" computer software. What measures are being taken to address the problem, and what is the date by which he expects it finally to be rectified? I understand that he has to face several computer problems, as do Ministers across the board.
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The Government have made much of their claim that the defence budget is growing by 1.4 per cent., but they have failed to point out it is about 2.2 per cent. of gross domestic project, which makes it lower in those terms than any defence budget for the past half century. There is frankly little confidence that the present defence programme can be achieved with 2.2 per cent. of gross domestic product. Conservative Members do not think that the Government are prepared to meet the financial demands of our front-line soldiers. According to a recent internal survey of the MOD's personnel, fewer than one in five—only 19.2 per cent.—agreed that the armed forces were well-equipped. A series of important decisions looms in the future about major items of kit and equipment and smaller, but nevertheless crucial, items of kit for individual servicemen and women on active service.

The Conservative party's commitment on defence, which was announced last October and reaffirmed at the beginning of the week, is to spend more money in the defence budget on the front line. We will also produce money from savings in other Departments to go to the front line.

I always think that the Minister would make a good music hall act because he changes between being serious and becoming a knockabout Scottish comedian—he is the Harry Lauder of the Ministry of Defence. [Interruption.] Harry Lauder was a much-loved figure with a knighthood. The Minister and other Ministers have suggested that the Conservative party's figures on defence do not add up. They said last October that we would cut defence spending, but now they say that according to their figures, ours do not add up. Let us have a look at examples of what they have done.

Since the Labour party came to office, £118 million has been wasted on the defence stores management system. Some £77 million was spent on a new radar for the Sea Harrier before the decision was made to take it out of service. The defence staff in Washington wrote off £8 million

The Defence Procurement Agency was subject to a £40 million claim for

Some £6.5 million was wasted on new aircraft lifts for the current aircraft carriers that were never installed. As a result of a change in accounting procedures relating to the submarine facility at Devonport, a write-down of £287 million occurred.

A National Audit Office report states that the total cost overruns in major defence projects was £170 million in 2000–01. This year's figure, £1.7 billion, is nearly 10 times greater than that. According to the NAO, the total slippage in time for major defence projects was 27 months in 2000–01. In the worst year to date, 2002–03, major defence projects overran by £3 billion. And the Government have the cheek to question our figures, which are based on information extracted from civil servants and military people from within the MOD who have been prepared to talk to us, experts from the City, and our own experience. The Conservatives intend to reallocate £1.8 billion of savings from within the MOD and to provide another
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£1.7 billion through extra spending. Those realistic figures are laid out in public and have been available to the Under-Secretary for the past year.

When the Minister and the MOD say that they are incapable of reorganising either the Defence Procurement Agency or the Defence Logistics Organisation, I think back 20 years to when Lord Heseltine, who was Secretary of State for Defence, introduced a chief of defence procurement. The howls of anguish within the MOD, let alone the total opposition from the Labour party on the grounds that the position would never work, were proved absolutely wrong. The next Conservative Government will do the same thing, and it will be better for our armed forces.

Mr. Deputy Speaker: The 15-minute limit on speeches by Back Benchers now begins to operate. Bearing in mind the length of the opening speeches, if hon. Members stick to the full allocation decided by Mr. Speaker, it will be very difficult to recognise everybody.

2.52 pm

Mr. Doug Henderson (Newcastle upon Tyne, North) (Lab): I will heed your comment and try to keep my remarks well within the time limit, Mr. Deputy Speaker.

I am pleased that we have this debate, which has happened for a number of years, on personnel policies in the armed forces. All Members of Parliament have experienced people who serve in the forces or their families telling them, "You come up with the high-falutin' policies on world politics, but we have to implement them and our families must live with that." The armed forces serve us proudly whenever they are asked to undertake a task and we owe it to them to consider their situation and that of their families. Serving officers and soldiers can also read reports of what is said in Parliament, which allows them to campaign and make their point, if they feel that that is necessary.

The armed forces know that they operate in a world of change and that their requirements always flow from political considerations. Hon. Members know that important changes in world politics, such as the destruction of the USSR, the threat from global terrorism and the problems that increasingly flow from poverty and the alienation of people in poorer parts of the world who see the life enjoyed by people in richer parts of the world, have affected the tasks that our armed forces carry out.

The institutions on which we have traditionally relied to implement our military policies must also change. In the past 50 years, we have relied heavily on NATO, which I continue to support, but NATO itself is questioning its own purpose. Is its only purpose to protect western Europe from potential threats or does it have a wider role? Should it operate within the western European theatre or across a wider area? Whatever conclusions it eventually reaches, they will inevitably have major consequences for our armed forces' structure and purpose and in respect of with whom our armed forces must link up, of training requirements, of operational matters and so on.

I see a world of increasing change. We have paid little attention to China and its potential economic and military power and we must build strong political
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relationships with it. I know that the leaders of our armed forces are aware of those considerations, and, whatever decisions we take, I am sure that our armed forces will be subject to major repercussions.

Thankfully, there is more agreement on such matters than many hon. Members would admit. The G7 countries and the leaders of the armed forces in those countries and beyond agree on the tasks that we face and there is much agreement in the House. I do not support the intervention in Iraq and believe that we should set out a timetable for withdrawal. However, I support 100 per cent. the need to have the military capability to operate at a distance—an expeditionary force, if you like—on behalf of our nation or our allies. Such a capability has major repercussions for logistics and operations and, consequently, on personnel policy.

I am not a member of the Select Committee, but I have read its reports. A great deal of emphasis has been placed on the strategy of effects. I thought that the world of politics and the military were trying to convince us that they have discovered something new, but Lord Haw Haw immediately came to mind. There is nothing new in the effects strategy, but if it was important in the past, it is crucial now because of instant media, embedded journalists and so on.

We must not only secure a physical victory in theatre, but convince civilians in that theatre that we are acting on their behalf in the interests of the values that we hold. At the same time, we must hold public opinion in our own country, in our NATO allies' countries and in UN colleague countries, which requires a different approach by our armed forces. I am pleased to say that the Government recognised that point in their dialogue with the Select Committee.

We want more resources to fulfil those greater tasks. I know that Front Benchers have argued about who can deliver what, but real-terms increases in defence expenditure have occurred in recent years and, this year, the increase is 1.4 per cent., which is welcome. It is necessary to increase resources, but resources cannot be increased for ever, so it is also important to use resources more efficiently, which has consequences for personnel policies. Some areas can obviously be improved and the need to reduce cost and get better value is never ending.

There is probably room for further efficiencies in internal logistics, which will have consequences. If a technician, rather than a middle-aged major, undertakes tasks in a warehouse because of restructuring, it has major consequences for officer structures in the Army and for sub-contractors, who are not members of the armed forces and who will carry out such tasks in the future.

The White Paper, which has my support, identified the key issues. The Army is not a museum that we must keep in its current shape for ever. It has to change as its task changes, and the people who know that better than anyone else are the Army personnel themselves—this point also applies to other armed forces—both officers and other ranks. They understand that what they are being asked to do in Iraq is completely different from what the Army was asked to do in Germany 20 years ago. They know that things have to change. They know that their principal purpose, according to the mission
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statement, is to protect the nation, our values and our way of life, and to carry out any tasks that they are asked to do. They know more than anyone else that there has to be change.

The Scottish nationalists raised earlier the names and structure of the regiments, and such issues are indeed important. I support the Government's proposed reorganisation of the regiments and there is a case for reducing the number from 40 to 36. Northern Ireland is part of that story, as is the need in the modern Army to diversify skills. Crucially, this is a relatively minor issue compared with the main one, which is how we protect our nation. We must also consider the purpose of NATO and how we deal with future expeditionary forces.

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