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21 Jun 2010 : Column 54

Mr Watson: I shall be polite to the Secretary of State even after that comment, Mr Deputy Speaker. The Secretary of State was always courteous to me during my short time as a junior Defence Minister, and I hope to return the courtesy over the next year or two.

Will the right hon. Gentleman say whether the review will consider the international conventions used for the engagement of advanced technology? I am thinking particularly of drone planes. Does he believe that such planes are within international law when they are used for the targeted extra-judicial killings of suspected terrorists?

Dr Fox: As the hon. Gentleman would expect, that issue will not be part of our review, but it is part of the sort of discussions that we need to have with our allies about the wider issues in respect of the conduct of warfare. I am sure that the Foreign Secretary and his colleagues, as well as Ministers and officials inside the MOD, will want to take on those discussions.

I thank the hon. Gentleman for what he said towards the beginning of his intervention. He was always extraordinarily courteous to the Opposition when he was in government. We shall endeavour to act in the same way, and I am sure that he will bring us up if we fail to do so.

Jeremy Corbyn (Islington North) (Lab): I thank the Secretary of State for giving way and, like others, I congratulate him on his appointment. In his opening remarks, he said something to the effect that he was going to do away with cold war thinking and look at problems of expenditure in that context. Britain's development of nuclear weapons was entirely a product of the cold war. As I understand it, Britain's possession of nuclear weapons and the Trident system will be ignored and not taken into account in the defence review. Has there been any change of thinking on that? Some of us would be astonished if defence policy could be reviewed without a review of nuclear weapons as well.

Dr Fox: A few years ago, we had an extensive debate in the House of Commons on what we thought, as a Parliament, was the best way to take forward Britain's nuclear deterrent. The Conservative party, in opposition at the time, agreed with the Labour Government's position then, and our position has not changed.

However, I say this to the hon. Gentleman. I said that we would have to get rid of some of the cold war mindset. It would be very nice if nuclear weapons had disappeared with the cold war, but when I look at what is happening in North Korea and Iran, I see that we will face the threat of nuclear proliferation in the future. Nuclear weapons are not simply a by-product of the cold war.

Several hon. Members rose -

Dr Fox: I have given way a number of times and I shall give way again later.

I believe that at the beginning of this debate it is vital and useful to go back to first principles and remind ourselves about the purpose of defence. It bears repeating that the first duty of a Government is to provide security for our citizens. Although many arms of government are directed towards or contribute to that aim, the
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armed forces are central to the effort. Of course, our armed forces can do many things for the promotion of our national interest and to support Government policy more widely. But we must not lose sight of their primary mission-to maintain the capability to apply military force, when needed, so that political decision makers have the widest possible range of choices when making strategic decisions.

That has two aspects. First, our armed forces protect our citizens and territory by deterring and containing threats, preventing possibilities from becoming actualities. The nuclear deterrent is, of course, fundamental to our ability to deter the most extreme threats to the United Kingdom. As I just said in response to the hon. Member for Islington North (Jeremy Corbyn), in 2007 the Conservative party in opposition supported the decision to renew the Trident system based on the analysis set out in the 2006 White Paper, and we remain committed to continuous at-sea deterrence.

As the coalition agreement has made clear, we are scrutinising the Trident renewal programme to ensure that we get value for money, and my Liberal Democrat colleagues will continue to make the case for alternatives. However, we underestimate the value of deterrence at our peril and we do ourselves a disservice if we merely confine the concept to nuclear weapons. We know from historical experience that a declaration of peaceful intent is not sufficient to dissuade aggressors and that a weakening of national defences can encourage them. All our forces, including conventional forces, have a powerful deterrent effect, which we should seek to maximise. Recently, we have not recognised that as much as we should have. I want the SDSR to change that-to take a fresh look at what we are doing to dissuade aggression and at how we might do it better.

Ms Gisela Stuart (Birmingham, Edgbaston) (Lab): I happen to agree with the Secretary of State's stance on nuclear weapons and Trident. Will he say a little more about the extent to which he regards Trident to be, as well as a deterrent, part of our obligations as a permanent member of the Security Council-as one of the P5, at the top table?

Dr Fox: It is not an obligation, but I certainly think that it adds credibility to our position as a member of P5. As I have said, our position on nuclear weapons is that in a dangerous world, when we are looking to 2050 or beyond, we cannot play fast and loose with Britain's defences. We do not know what threats will emerge or what will happen in terms of future proliferation, and we are simply not willing to take a gamble.

Sir Menzies Campbell (North East Fife) (LD): The Secretary of State began this passage of his speech by talking about returning to first principles. That allows me to take up an issue that he dealt with a moment or two ago, which is this: in determining the structure of our armed forces, in determining the location of bases, and in determining procurement decisions, must we not accept that the motivation has to be what is in the best interests of defence? If I may be excused for putting the matter pejoratively, we should not be using defence as some kind of job creation scheme.

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Dr Fox: I have a degree of sympathy with what the right hon. and learned Gentleman says, but it is worth pointing out, at a time when the economy is going through a great deal of trouble, that the defence industry provides 300,000 manufacturing jobs-jobs that actually make and sell things to the benefit of this country's balance of payments. The defence industry contributes a very high value to Britain's exports, and it punches above its weight. It will be the aim of the Government to increase Britain's defence exports, partly as a way of securing British defence jobs in the longer term, because the more markets we have, the less the British defence industry is dependent on the British domestic economic cycle.

John Woodcock (Barrow and Furness) (Lab/Co-op): I agree with the Secretary of State about industrial capacity. Before he moves on from the deterrent, will he clarify whether the value-for-money Trident review is solely considering the ballistic missile submarine system, or are alternative systems being considered?

Dr Fox: There are a number of elements in the Trident renewal programme, and we are looking for value for money in each of them, and trying to see where we can, if possible, get that capability for lesser cost. However, there is no question but that we will move ahead with a continuous, minimum, credible at-sea nuclear deterrent for the United Kingdom.

Dr Julian Lewis (New Forest East) (Con): Will my right hon. Friend give way?

Dr Fox: I will in a moment.

This brings me to the second aspect of the armed forces' primary mission. Defence is also there for when everything goes wrong-when despite our best efforts, deterrence and containment have failed, diplomacy is exhausted, and, as a last resort, the use of lethal force is required. No other arm of government can deliver this or is designed for this purpose. So our armed forces must be structured, first, to deter; and secondly, to deliver the use of force in support of our national interest and to protect national security. We undertake this strategic defence and security review at a time when our armed forces are delivering on that primary mission in Afghanistan. We must have strategic patience and resource that mission fully, but it would be a mistake to base our future security on the assumption that future wars will be like the current ones. That is why we must maintain generic capability able to adapt to changing threats.

I now give way to my hon. Friend the Member for New Forest East (Dr Lewis).

Dr Lewis: My right hon. Friend must have read my mind; perhaps that is not difficult to do. I congratulate him on taking up his post; it is a pleasure to see him there.

My right hon. Friend says that we cannot assume that future wars will be like current counter-insurgency campaigns, yet some very senior figures in the Army are asking us to make that very assumption. It cannot be safe for this country to plan on the basis that just because we are engaged in irregular warfare now, we do not have to worry about state-against-state conflict in
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future. Will he say, once and for all, that there is a danger that we could one day find ourselves opposed by a modern, well-armed, industrialised state, and that we have to be prepared for that terrible eventuality?

Dr Fox: I would never be so presumptuous as to believe that I could read the complexities and high intellectual level of my hon. Friend's mind, but let us just say that having spent four years in opposition together, I have a fair idea of what he is likely to raise and when. He is absolutely correct, and I reiterate that it would be wrong, and fly in the face of everything that we have learned from history, to believe that future wars will be predictable or like the ones in which we are currently engaged. We must maintain generic capability that is flexible, adaptable and able to deal with changing future threats of a sort that we cannot possibly predict with any certainty.

Mr Bob Ainsworth (Coventry North East) (Lab): I am struggling to understand at the moment how the Secretary of State plans to deal with the issue of the deterrent. I know what the coalition agreement said and what the Liberal Democrats' position is, and I have heard him say various things, but will the value-for-money study be part of the strategic defence review, has it started, and how and in what forum will his coalition partners be able to pursue their separate views on the shape of the deterrent?

Dr Fox: The value-for-money study on Trident has begun, as has the SDSR, and it will be concluded long before the SDSR. I hope that it will be concluded before the summer recess.

I want to be as open as I can about the backdrop to the SDSR. To take one aspect, the defence budget itself, the future programme is entirely unaffordable, especially if we try to do what we will need to do in future while simultaneously doing everything in the way that we do it today. The legacy that the new Government have inherited means that even if defence spending kept pace with inflation, we would face a deficit of many billions of pounds over the life of this Parliament and more over the next decade. To make things worse, there are additional systemic pressures on the defence budget that exacerbate the situation, including the trend of pay increases above inflation. The previous Government's approach was too often characterised by delay-to-spend rather than invest-to-save. The decision to slow the rate of the Queen Elizabeth class carriers in 2009, for example, increased the overall costs by more than £600 million at a stroke.

The bottom line is this: no matter how hard we bear down on the costs of administration and drive up efficiency, we cannot expect to bridge the gap by those means alone. The problem is structural, so the response must be structural to put defence on a stable footing. The Ministry of Defence, as a Department of State, must itself face wide-ranging reform. We intend to reorganise the whole organisation into three pillars: first, strategy and policy; secondly, the armed forces; and thirdly, procurement and estates. We intend to create a more efficient and leaner centre, in which everyone knows what they are responsible for and to whom they are accountable, with clear deadlines and budgetary discipline. Major reform of our procurement practices will be accompanied by a number of industrial consultations that I will shortly outline to Parliament.

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As much as structural reform is required, however, I am equally determined that the armed forces be reconfigured to meet the needs of the evolving security environment and satisfy the expectations of this country. Although the SDSR is necessarily financially aware, it is policy-based, and I wish to set that policy out to the House.

Mr Dai Havard (Merthyr Tydfil and Rhymney) (Lab): I apologise for interrupting now, because what the Secretary of State has just said is hugely important, but may I go back to what he said about the review of the deterrent? May we be clear that the financial review of the nuclear deterrent is due to take place before the recess, that it is a one-off activity and that it will not be part of a continuing review at each of the various stages of the programme that has been outlined, including the main gate stage? Will the Secretary of State clarify that point?

Dr Fox: As part of the coalition agreement, we agreed that we would have a value-for-money study to examine the costs of the programme and see where we could achieve better value within it. That is the process that is now ongoing.

The Foreign Secretary has set out the new Government's distinctive British foreign policy, which has at its heart the pursuit and defence of UK interests and a recognition that our prosperity and security is bound up with that of others. That will require the enhancement of diplomatic relations with key partners, using Britain's unique network of friendships, bonds and alliances and working bilaterally as well as multilaterally. That does not mean that we must be able to do all things at all times. We will need to be smarter about when and how we deploy power, which tasks we can undertake in alliance with others, and what capabilities we will need as a result. That must be based on a hard-headed assessment of the current security environment and the growing threats to peace and stability.

We live in a period in which direct military threats to UK territory are low, but in which the wider risks to our interests and way of life are growing. Over the coming decades, we could face weak or failing states creating new focal points for exportable Islamist terrorism that threatens our citizens and our allies, as we have seen in Yemen and Somalia. We could also face a nuclear-capable or nuclear-armed Iran destabilising Shi'a-Sunni and Arab-Persian fault lines, as well as those with Israel and the rest of the world. That could create an uncontrollable cycle of nuclear proliferation and, at worst, the erosion of the post-Hiroshima taboo against nuclear use by both Governments and terrorists. Elsewhere, we could see the emergence of old or new regional powers and the return of state-versus-state competition and confrontation. More immediately, competition for energy and other resources, including fresh water, could take on a military nature.

It is conceivable that we will negotiate the next half century without confronting any of those risks-I certainly hope so-but it is equally possible that the UK could face security policy decisions relating to any or all such risks during the course of the next Parliament. That is the reality of the world in which we live, and we must break away from the recent habit of planning for the best-case scenario and then hoping the worst never
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happens. Unlike what happened during the cold war, we cannot be confident about how and how quickly such trends may evolve. I shall therefore conduct a thorough stocktake of our contingency plans in the months ahead.

Of course, responding to such events would not be for Britain alone. Britain's relationship with the United States will remain critical for our national security; it is the UK's most important and prized strategic relationship.

Mark Lancaster (Milton Keynes North) (Con): Given the contingencies that my right hon. Friend outlines, is it not important for us to have a strategic reserve? What lessons can be learned from last year's debacle, when the previous Government had to do a humiliating U-turn over cuts to the Territorial Army, to ensure that we do not make such mistakes again in the coming defence review?

Dr Fox: It is very clear that we require civil contingency in the UK, and as part of the wider SDSR, we are looking at the protection of the UK homeland. We cannot simply direct our armed forces at external threats while ignoring internal threats. That must be a raised priority, as it will be as part of the wider security review.

Michael Dugher (Barnsley East) (Lab): I welcome the Secretary of State and his team to their positions. When in opposition, he was always steadfast and unwavering in his calls for a larger Army. Does he share my concern and that of my constituents that the review ought not to be used as a way of delivering major cuts to Army manning levels, which would be quite unwise and, indeed, dangerous?

Dr Fox: The defence review is not about predetermining the size or shape of the armed forces. In fact, the size or shape of the armed forces will be determined by the review. I can comfort the hon. Gentleman by saying that the service chiefs will each thoroughly defend their service in the review, as one might expect. I would be surprised-Opposition Front Benchers would be even more surprised-if that were not the case.

Mr Ian Davidson (Glasgow South West) (Lab/Co-op): These are complex and difficult issues, and if they are to be approached thoroughly, they cannot be approached quickly. Does the Secretary of State intend to take any decisions that might pre-empt the results of the review? In particular, what are the implications for procurement contracts that are running? Does he intend to take any steps to halt, restrict or in any way constrain existing procurement contracts? He might be able to think of the one I have in mind.

Dr Fox: On this occasion it is rather easier to be a mind-reader. I am well aware of the project to which the hon. Gentleman is referring. We thought about making an interim statement to Parliament just before the summer recess about which programmes were likely to go ahead, but we decided that it might cause more instability than it was worth. We therefore intend to announce all the programmes that we believe give reality to the capabilities that we want when we reach the end of the review.

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