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Obviously we cannot talk about Afghanistan without considering Pakistan, just next door. Pakistan, of course, is a nuclear power and has already contributed dramatically to the proliferation of nuclear power through the operations of A. Q. Khan. The dangers of some of its nuclear weapons falling into the hands of the Taliban or al-Qaeda
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are huge. The close links and instant communication between this country and Pakistan mean that threats there are immediately threats here.

Pakistan’s economy is in trouble in the global recession, so it is unlikely to be able to contain the insurgency there without our help. Yet there is no prospect of foreign troops being allowed into Pakistan to help it do so. As I said in an intervention on the Secretary of State, all that is not made easier by the fact that Pakistan spends only 2 per cent. of its gross domestic product on education, which leaves such a huge void for the madrassahs to fill and provides an opportunity for people to be influenced by insurgents and radicals from an early age.

The instability in the region means that it has taken over from Israel as the most insecure area of the world. It must therefore be the first priority of not only this country but of our allies. We must begin the huge task of explaining the importance of all that to our allies, because we are not strong enough to cope with helping Pakistan alone. Even with the help of the United States, we are not strong enough. We need the support of our European allies above all, so we must do a lot of diplomatic work.

Next door is Iran. When the President of Iran talked about wiping Israel off the face of the map, he was not joking; he firmly believes it. The support for terrorism in Palestine, Israel, Lebanon and elsewhere has become a hallmark of Iran’s foreign policy. Iran is a threat to all its neighbours, which they recognise perhaps better than many European countries, which have provided such divided and weak responses to Iran’s nuclear ambitions.

Mrs. Moon: The right hon. Gentleman talked about the importance of engaging with not only our American but our European allies on Pakistan, and the difficulties that we all face because of attitudes emanating from Iran. Does he agree that, in using our diplomacy, it is crucial to talk to other Muslim leaders so that what is right for Pakistan does not become a western Christian view but a world view of the changes that are needed?

Mr. Arbuthnot: I entirely agree. I pay tribute to President Obama for his speech today in Egypt, in which he said—very effectively—that America is not at war with Islam and never will be. Islam is not the problem; it is a great religion, which we all respect enormously.

Next door to Iran is Russia—a wonderful country which is led by a small Government of little democratic validity. It is capable of putting a stranglehold on energy for the rest of the world, and it appears to be establishing mechanisms to achieve that. It is willing to bully its former Soviet neighbours with lethal and disproportionate force, and its motivation appears to be gaining self-respect. That is not the best way to go about achieving that. If Russia could bring itself firmly within the community of nations, and work for the good of the world—as the hon. Member for North Devon (Nick Harvey) said that we as a country should do—its self-respect would return in much shorter order.

Dr. Fox: My right hon. Friend is a respected and long-serving Member, who has also served in government. From his experience, why does he think that western Governments are making so little comment about the continuing Russian presence in South Ossetia and
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Abkhazia? Are we simply afraid of upsetting Russia, or is the subject of little importance or interest to western nations?

Mr. Arbuthnot: I think that there are a lot of reasons for that. I suspect that one of the reasons is that western Governments are not spending enough on defence, so they do not know what else they could do. They do not know whether they could back up any words about Russia with actions. That is a serious worry about our western allies as a whole, but it is also a serious worry about this country, although I will come to that in just a moment.

Next door to Russia is China, which has its pressures of population and an urban-rural divide. Incidentally, if we are looking ahead to problems of defence in the world, a real cause of instability in the future may be the vast empty lands of eastern Russia right next door to the heavily over-populated areas of China, particularly given that those areas of eastern Russia have such huge natural resources. I suspect that Russia is looking ahead with apprehension to what might happen there. We should begin to form a view on what effect that sort of issue might have on the western world.

China is growing strongly. It owns a huge amount of United States debt. The Chinese are investing in education in a way that will be very effective for their country. They take a long-term view—perhaps a longer-term view than the western world takes—and we cannot ignore their phenomenal rise, because it will have defence implications. All those things are things that we can look at in deciding what we ought to be thinking about in respect of defence in the world.

Mrs. Moon: I am sorry to interrupt the right hon. Gentleman a second time, but he is talking about an area that is of interest to me, particularly in respect of the Shanghai Co-operation Organisation and its implications for the northern border to which he has referred, and China’s attitude towards the other powers in the region. China’s stance under the terms of the agreement, which is about non-interference, is that neither it nor any other member of the Shanghai Co-operation Organisation—Russia is a signatory, while Pakistan and India have observer status—will try to impose values on other states, which is something that they see the west as doing. However, those states will agree to combine to protect each other’s independence and integrity. Is that new force not something that we should be aware of, and is it not a risk to our ways of working?

Mr. Arbuthnot: That is the current Chinese attitude. I suspect that as China’s requirements for more and more resources grow, in order to satisfy a growing middle class in China, the Chinese will begin to need to make more inroads into other countries, not just in that region, but in places such as Africa. The issue that the hon. Lady raises is certainly something of which we need to be strongly aware. I know that she has expressed an interest in it on the Defence Committee, and I hope that she will continue to do so, because it is a matter of great importance.

So far I have been talking about things that we are able to see already. Ten years ago we would not have been able to foresee any of them—except, perhaps, those to do with China. What will be happening in 10 years’ time that we cannot now foresee? Are we
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prepared now to have a defence budget and a defence stance that will be completely unable to cope with the unforeseen in 10 years’ time?

I believe that defence is at a watershed. There are fundamental structural flaws in the Ministry of Defence, at a time when the Army is down to fewer than 100,000 and people are no longer sure what equipment can be bought. There are huge internal battles for survival, for supremacy and for equipment between the different services, and with the civil service. There appears to be no cohesive view to show to the world, or even internally, within the Ministry of Defence. There is a budget that has been weakened over decades by war and by underfunding.

At the end of the cold war, we saw two changes. First, nuclear deterrence and mutually assured destruction stopped being as effective as they had previously been, so we should then have spent more, not less, on conventional arms. Secondly, the world became less stable, rather than more stable. Again, we should therefore have spent more, rather than less. [ Interruption. ] I will give way to the Minister if he wants to intervene. No, he does not. So, we took the peace dividend, and that was a serious mistake. If the Minister is hinting, by his gestures from a sedentary position, that it was the Conservatives who took that peace dividend, I can assure him that we were whipped on by the Labour party every step of the way. Everybody in the western world was saying, “Thank heavens, we can spend less on equipment,” and it was the Labour party that went into the 1997 election promising to reduce spending on defence to the European average.

It was a dreadful mistake to take the peace dividend. The result is that there is now a black hole in the defence budget. Things have been made worse recently by the knowledge that there is to be no bad news coming out of defence, and no new money going into defence. A lot of the defence decisions that should have been taken last year or the year before have therefore been postponed until just after the general election. When the pigeons come home to roost, they will discover that there is no roost to come home to.

There is a strategy in the Ministry of Defence that relies very heavily on the power of new equipment but ignores the quality that comes from quantity. The manpower of the armed forces has therefore been reduced to a level that is close to unsustainable. The hon. Member for North Devon talked about helicopters. The helicopters are going to become much more powerful, but there will be so few of them that they will not be able to be anywhere.

Bob Russell: The right hon. Gentleman said that the size of the Army was about 100,000. Is it his understanding that approximately 10 per cent. are from overseas? Does he agree that there is a need to recruit more from the United Kingdom if we are not to become increasingly dependent on overseas members of the Army?

Mr. Arbuthnot: I think that the figure is 9 per cent., but, yes, I believe that it is necessary to have larger armed forces. I am just about to talk about money, but where is the money to come from for that? This is a serious issue that the country—not just the Government, the Opposition and politicians—has to face.

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We are relying heavily on more and more powerful equipment, but we are still losing the capacity to act alongside our closest ally, the United States. We have dwindling armed forces and a tiny reserve, and all of this means that there is less and less connection with the people whom the armed forces are protecting, because they do not meet them on a regular basis. I am afraid that the review of the reserve forces appears to be managing the decline of the armed forces rather than inspiring their rebirth. We have a public who do not understand the armed forces or what they are doing, and who therefore do not support defence spending. As a result, there is no money to spend on defence. We have spent the money, for decades ahead, on the banks.

Mr. Gerald Howarth: My right hon. Friend suggests that the public may not be as supportive of the armed forces as they once were, but I would like him to reflect further on that. The common wisdom has been that the public will not support increased expenditure because they do not understand the armed forces, but I put it to my right hon. Friend that we have seen a quite astonishing wave of outpourings from people recently—and not just in Wootton Bassett, where the reception of our fallen heroes was particularly dignified, but right across the land. Perhaps we politicians—and, indeed, military commanders—are in danger of misunderstanding the public mood.

Mr. Arbuthnot: I desperately hope that my hon. Friend is right. I feel that if the public are asked whether they think the armed forces are being treated unfairly, they will reply with a resounding yes, but if they are asked whether they want funding for the new ward in their local hospital to be cut in order to provide more for the armed forces, I suspect that they will be much less certain in their answer. I believe that we have to take the argument over this question out to the public, because they need to understand the issues the country is facing.

When it comes to the current team of Defence Ministers—it is an excellent team, incidentally—I have a suspicion, although none of them have told me so, that they are desperately hoping that they lose the next election because some of the decisions that they would otherwise have to take would, largely because of the lack of money, be so awful. They know that we are in deep trouble.

Mr. Jenkin: Staying with the theme of the public’s attitude towards defence spending, we in the House of Commons should have learned in recent weeks how neglecting an issue can engulf us in public rage. Neglect of this particular issue may be fine in peacetime and when we are deploying our troops in faraway and little-understood battles, but if we require our armed forces to do something at short notice that they are not capable of doing and it results in disaster, we need to be aware that the wrath of the British people over our neglect will be unimaginable—and we will deserve it.

Mr. Arbuthnot: My hon. Friend is quite right, which is why conducting this debate on this particular day is such a disgrace. It is excellent when Defence Ministers regularly go out to places such as Afghanistan and know what they are talking about—but I cannot remember
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the last time a Treasury Minister went out to Afghanistan. Perhaps the Minister could enlighten me about that, but I suspect that he probably will not.

The Minister for the Armed Forces (Mr. Bob Ainsworth): The right hon. Gentleman makes some important points, which we should all be prepared to address. Let me first reassure him, however, that no matter what the difficulties in future, I would far rather take the decisions myself than have him or his colleagues taking them; he should be under no illusions whatever about that. What he appears to be saying—I think with a degree of honesty—is that despite the fact that he deprecates the situation we are in, his own party, too, would have to cut defence capability. [Interruption.] That is effectively what he said. If he is not saying that, will he tell us, in the honest and open way in which he speaks in these debates, what he believes will be in all the parties’ manifestos at the coming general election—no matter how near or far away it is—and, in particular, whether his party is likely to pledge to improve defence spending over and above what the Government have pledged?

Mr. Arbuthnot: I did not say that my party would cut defence. Frankly, however, I very much doubt that there will be much difference between the defence spending plans in the Labour manifesto and those in the Conservative manifesto. What I have always tried to do as Chairman of the Defence Select Committee is to tell the people of this country that they need to realise how important defence spending is, and that they should put pressure on both the Chancellor and shadow Chancellor of the Exchequer, and on all of us, to change our approach to defence spending, because the whole country needs it.

It is essential that we change, because our defence spending is down to about 2 per cent. of GDP—the lowest since the 1930s. That is leading to disrespect. The people of this country have not discussed that or considered the problem that is about to hit them, which will hit them whoever wins the next election. The issue is not whether we remain a first-order power, but whether we become a second-order or a third-order power. In other words, will we be able to operate alongside France, or will we be limited to operating alongside Belgium and Italy?

The public, I hope, will have a view on that, but only if they are asked. For that reason, I strongly believe that we need a strategic defence review. One thing that we need to consider is research and technology. I shall quote a paragraph:

That paragraph was written by the Government in the defence industrial strategy, so what is the Ministry of Defence doing about this? Astonishingly, it is cutting its research and technology budget by 7 per cent. this year, and it looks as though that is to continue over the next few years.

The Under-Secretary of State for Defence, the hon. Member for Grantham and Stamford (Mr. Davies), who has responsibility for defence equipment and support,
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tells us that that is a simple matter of priorities. He is right; it is—and he has the wrong priorities. Our ability to respond quickly and effectively to emerging threats is built on the knowledge base, which is itself built on sustained investment in research and development since the 1980s. He might say that he wants industry to do more of the research. It is doing that. In 2006-07, according to the Society of British Aerospace Companies, the defence sector invested £3.34 billion in research and development, which was about 40 per cent. of the EU’s and 15 per cent. of the UK’s research and development spend. However, this country’s defence industry needs some customers, which means the Ministry of Defence.

After that catalogue of despair there is some hope, which comes from two sources. The first source of that hope is the men and women of our armed forces. Long, long ago as a Defence Minister, I was awed by the strength of purpose of our armed forces—their determination, honesty, courage, humility and intellectual ability, which I was not necessarily expecting when I went into the Ministry, but it was certainly there. They were wonderful men and women, and so were the civil servants who supported them. As Chairman of the Defence Committee, I have had that confirmed every time I have met them. We have some outstanding people; I just do not think that we are making the best use of them.

The second source of hope is the resilience and determination of the people of this country. When they are given the right information and things are properly explained, they make the right choices.

I shall end on the point that we need a strategic defence review in the full public gaze. We are getting a non-strategic defence review in the secrecy of the Ministry of Defence. That will not do the trick. First, as my hon. Friend the Member for Woodspring (Dr. Fox) so rightly said, we need to work out what defence is for. What do we need to defend? Secondly, we need to reform the Ministry of Defence so that it becomes coherent, cohesive, functional, straightforward and directed.

My hon. Friend correctly said that we need to reform the defence acquisition process, and I was delighted with the Secretary of State’s comments about Bernard Gray’s inquiry, about which I have heard good things. We need to put into the job of defence acquisition people who are intrinsically good at it, rather than those who do it because a gap has opened up for the next two years. We need to ensure that those who are best at the job carry on doing it rather than getting moved on quickly. We need a defence acquisition process led by capability rather than by programmes. We need to force the armed forces to make choices between what they want to be able to do, instead of piling up ever more unrealistic shopping lists, egged on by the defence industry, and unrestrained by any functioning process in the Ministry of Defence.

Finally, we need to tell the people about the importance of what the Ministry of Defence does. We need to tie it in with our national interests and explain why it is important to the people. This is a defence-oriented nation. If there is a war, we are more than likely to be involved in it. This country does not want to be an also-ran nation. We have interests all round the world, which we want to protect, and citizens at home and abroad whom we must defend. That, after all, is what Government is for.

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