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Lord Williams of Elvel: My Lords, I am grateful to the noble Earl. However, as I said, the House was in recess when the document was published. Would it not have been possible for the Government to alert me and other noble Lords who wished to take part in this debate that the document had been published? There are communications: there are telephones, and even the post. Would it not have been possible for the Government to say that it was very important for the debate that we should have the document in front of us?

Earl Howe: My Lords, I have expressed my regret that the noble Lord did not receive his copy and that other noble Lords equally did not. I am sorry that perhaps because of the Recess the system I would wish to see did not operate as effectively as it should have done. I hope that we can make amends for that before Committee stage.

My noble friend Lord Vivian asked a number of questions about our guarding proposals. First, I hope that I can reassure him, about redundancies. It is not expected that the formation of the MPGS would require any compulsory MDP redundancies, as I mentioned earlier. However, it is possible that this proposal, together with other measures affecting the long-term size of the MDP, would allow a number of officers to leave the MDP voluntarily on the same terms as they would have received had they been made compulsorily redundant. The present expectation is that all the MDP officers displaced by the MPGS pilot and main schemes would be covered by natural wastage. But we judged it prudent to assume that it may be necessary to offer voluntary early retirement or severance terms to up to 50 MDP officers displaced by the pilot scheme.

My noble friend also asked about costs. The results of the new investment appraisal and affordability assessment are summarised in the new consultative document. A more detailed breakdown has been sent separately to the staff associations and trades unions and also to the Defence Committee in another place. These show that in resource cost terms it would be highly cost-effective to use MLSE soldiers to replace MDP officers employed only on guarding duties on a one-for-one basis, and that, given the resource cost savings that would result from the formation of the MPGS, MDP voluntary early retirement or severance payments on the scale now expected should be affordable.

My noble friend expressed the hope that regular soldiers will not be used for guarding. As he will know only too well, in the great majority of Army units such as, for example, front line battalions, the Army considers it entirely appropriate for full engagement regular soldiers to provide armed guards for their own units. It does not normally consider it appropriate for them to guard units other than their own. At Army units such as, for example, headquarters or depots where there are insufficient soldiers in the appropriate ranks to provide armed guards, the Army wishes to use local engagement rather than full engagement soldiers for this

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purpose. I stress that the MPGS will be a professional, well-trained and capable guard service. Ministers would not agree to its establishment unless it was.

The noble Earl, Lord Attlee, asked why the MDP has been made into an agency. It is government policy that, where possible, non-core activities which are not suitable for market testing or contractorisation should be considered for agency status. The benefits of agency status are many; but I shall mention just three. The first benefit is the greater delegations, freedoms and flexibilities which enable chief executives to influence more effectively the manner in which the outputs of the agency are delivered. Secondly, agency status offers a leaner, tauter and more businesslike organisation. The third benefit is perhaps more intangible but has nevertheless been borne out by experience generally: agency status provides a better image for the organisation and indeed increased staff commitment.

I turn next to the subject of service discipline--

Lord Kennet: My Lords, does the Minister realise that the three reasons he just gave for favouring agency status would surely appear to a vast majority of the people of this country to be reasons against it? Is he saying that the Army is not taut, lean and businesslike?

Earl Howe: My Lords, the Army is not an agency. The Ministry of Defence Police is a discrete organisation. The chief constable of the MDP, to whom I have spoken personally on this matter, warmly welcomes the fact that agency status has been conferred upon it. He said as much at the agency launch the other day.

Lord Williams of Elvel: My Lords, that may be the case. However, to follow the point made by my noble friend Lord Kennet, since the chief constable has an interest, "he would say that, wouldn't he?". Is it not also the case that in setting up an agency for the MDP the Government are in fact setting up a standing army which is separate from all that we have discussed in relation to the Bill? Can we have an assurance that the agency will be covered by the provisions of the future Armed Forces Act?

Earl Howe: My Lords, I do not understand what the noble Lord says at all. It is not a standing army; it is an agency consisting of Ministry of Defence police. As I said, the organisation is a discrete one. The chief constable was not simply speaking for himself but, I believe, for all his force. Surely we are talking about the more efficient operation of the Ministry of Defence Police, or indeed any other agency one cares to mention. The Government's next-steps programme has demonstrated amply since the 1980s that agency status confers real benefits. It is not simply a question of financial savings; it is a matter of the benefits that are conferred by virtue of increased delegation and self-determination.

My noble friend asked why we propose to allow greater access to trial by court martial. The proposal is not intended to undermine the authority of commanding officers. But we believe it important to extend the

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greater safeguards for defendants that are available at courts martial compared to summary proceedings. We suspect that most defendants will continue to prefer to be dealt with by their commanding officer, not least to sort the matter out quickly.

Under the general heading of discipline, I turn to a question posed by the noble Lord, Lord Mayhew, who asked about recent Army drug testing figures. In 1995, 18,309 tests were carried out; 138 Army personnel produced positive results. Up to 17th May 1996, 18,172 tests had been carried out--roughly the same as for the whole of last year; 76 personnel had tested positive and will be considered for discharge in accordance with normal policy. These figures suggest that the intended deterrent of the Army's compulsory drug testing is taking effect.

The noble Lord also referred to discipline in our Armed Forces on the island of Cyprus. The Army authorities were both horrified and ashamed that British servicemen could have committed such a terrible crime as that against the young Danish tour guide, Louise Jensen. The vast majority of troops serving in Cyprus are both well-behaved and disciplined. We all condemn the actions of the particular individuals found responsible but I do not believe that the Army as a whole can be held responsible for that horrific crime. The Army is committed to the maintenance of the strictest standards of discipline. Every soldier is aware of his or her individual responsibility to maintain the high standards of personal behaviour which are demanded of them and of the consequences should those standards not be met. Since the killing of Miss Jensen, a number of restrictions have been placed on all personnel. They include placing Ayia Napa out of bounds and curfews on the tourist strips of Larnaca and Limassol. The Commander, British Forces Cyprus constantly monitors his disciplinary policies to see whether they can be improved upon.

The noble Lord, Lord Judd, expressed anxiety about how the redress of grievance procedures would operate. Service personnel will be informed of the three-month deadline within which complaints must be made under the internal redress procedures. That will provide time for the applicant to consider and frame submissions for redress. If the complaint has not been resolved, or not resolved to the complainant's satisfaction, within the six-month tribunal deadline, complainants will be reminded of their right to present a case to an industrial tribunal and of the deadline for submission to the tribunal. I believe that that is a sensible way to minimise the number of cases referred to industrial tribunals, to avoid delays and backlogs. However, there will be no possibility, if the services' consideration of the complaint is delayed for any reason, of personnel losing their right to approach an industrial tribunal.

My noble friend Lord Vivian asked about discharge certificates and what additional particulars are envisaged. The additional particulars beyond the minimum provided for in Clause 3 are most likely to be those currently contained in discharge certificates, such as the qualifications gained, a testimonial to the person's service and so on. That essentially technical change in Clause 3 will increase the flexibility to add to or change

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the additional particulars required without requiring changes in regulations, should that assist in one of the purposes of those certificates; namely, finding employment for a serviceman or servicewoman after he or she has left the services.

I turn to equal opportunities in the armed services and a question raised by the noble Lord, Lord Mayhew, about women. Very few roles now remain closed to women in the Armed Forces. The policy is that in future they will be excluded from posts only where their presence would impair combat effectiveness. Undoubtedly, the most significant development has been the opening to women of combat roles at sea and in the air.

The noble Lord also asked about the Army's physical assessment testing. The Army has installed new equipment at recruit selection centres in order to conduct the new physical assessment tests. The new physical selection standards are now being implemented as part of a validation trial. The aim is to provide a valid and reliable predictor of physical task performance. Tests will be used as a basis for counselling recruits on the career opportunities for which they are physically qualified. The development of physical selection standards has been carried out concurrently with the Army's review of the wider employment of women. That review will consider matters wider than physical assessment testing.

The noble Lord, Lord Williams, spoke about homosexuality in the Armed Forces. I welcome what he said. But there were other notable contributions on that subject from, among others, the noble Earl, Lord Attlee, the noble Lord, Lord Mayhew, and the noble and gallant Lord, Lord Craig. The Armed Forces policy on homosexuality is made clear to all applicants to the forces. Our policy was endorsed by the Select Committee on the Armed Forces Bill in 1991 and the current Select Committee, having taken account of evidence from the MoD, Stonewall, rank outsiders and others, and does not recommend any change to the policy.

Your Lordships will be aware that the other place voted last month for the retention of that policy. The evidence from the homosexuality policy assessment team's report shows that even in those countries which allow homosexuals to serve, very few have chosen to come out, despite the relaxed regulations. But the difficulties go further than those inherent in overt homosexuality. The key problem lies in the knowledge or strong suspicion of homosexuality. Uncertainty and suspicion about the sexual orientation of fellow service personnel is just as likely to cause unease, polarise relationships and disrupt unit cohesion as overt sexuality would do. The only certain way to avoid such a situation is to maintain the current policy.

The noble and gallant Lord, Lord Craig, expressed his disagreement with any kind of "Don't ask, don't tell" approach. The American policy along those lines amounts to a continued ban on all except celibate homosexuals. To adopt that kind of policy would be seen as a compromise. It would be acceptable to neither heterosexual service personnel nor homosexuals. In fact

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Stonewall has already rejected any compromise based on "Don't ask, don't tell" and the Select Committee in another place also felt that such a policy would not be practicable.

The noble Lord, Lord Chalfont, referred to the moral dimension of the homosexuality ban. The point I seek to emphasise is that the policy derives from a practical assessment of the adverse implications of homosexual orientation for fighting power. Good discipline, morale and ethos are essential to unit cohesion and therefore operational effectiveness. But we are dealing here primarily with military judgments and not abstract moral ones. That is what my honourable friend in the other place simply sought to stress.

But I need to disagree with the noble Earl, Lord Attlee, when he said that there was widespread homophobia in the Armed Forces. There is no support for the view that the Armed Forces are homophobic in the report of the homosexuality policy assessment team. In fact, that report shows that service personnel can clearly differentiate between their personal views on homosexuality (which are often sympathetic and tolerant, in fact) and their assessment that homosexual service personnel would have an adverse effect on operational effectiveness.

Perhaps I may also say to the noble Earl that the wider employment of women does not have implications for privacy or decency because both sexes continue to occupy segregated accommodation. That would not be the case with homosexuals.

The noble Lord, Lord Mayhew, suggested that a blanket ban on homosexuality might not be strictly necessary. I simply say to him that in my view it is not possible to run a postings policy on the basis that some posts are open to homosexuals and others are not. Even if that were attempted, it would mean that, over time, homosexuals would end up, whether or not they wished to, away from the teeth arms in support areas--for example, non-seagoing posts. That would be a recipe for creating resentment and military inefficiency through loss of the all-important interoperability of personnel and would result eventually in the creation of two Armed Forces.

The noble Lord, Lord Williams of Elvel, and other noble Lords, including the noble and gallant Lord, Lord Lewin, referred to the future of the Royal Naval College at Greenwich. The noble Lord, Lord Kennet, spoke with particular eloquence on Greenwich and the wider heritage issues that surround it. Your Lordships will remember that on 28th March my right honourable friend announced that he had accepted the central recommendation of the group set up to advise him on the future of the Royal Naval College, to the effect that in the event of non-defence occupancy, there should be an independent trust charged with the guardianship of the site for the nation. He also announced that the most appropriate contenders for occupation, on information so far available, were the University of Greenwich for most of the site and the National Maritime Museum.

In making that announcement my right honourable friend highlighted that there was much detailed work to be done before the future of the site could be secured.

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The noble Lord, Lord Williams, expressed the view that no lease should be granted unless the wider heritage interests were satisfied. It is important to remember that the Secretary of State is holding the land for the benefit of a Crown charity--the Greenwich Hospital. As my honourable friend made clear in another place, it would be unfair to that charity if the Secretary of State could determine future occupation without having regard to its interests. The clause seeks to achieve a proper balance between the private interests of a charity which the Secretary of State, as trustee, must seek to safeguard and the wider public interest.

The noble Lord, Lord Williams, suggested that in Clause 30 there was no link between subsections (2) and (3). I can assure him that there is a clear link in Clause 30 between those two subsections. Subsection (2), which lists the matters to which the trustee must have regard, is specifically designed to govern the exercise of all his statutory functions under the Greenwich Hospital Acts. Subsection(2) makes it clear that that will include his power to grant a lease under subsection (3). Indeed, to conform with the clause he must have regard to those matters before granting a lease. I would like to reassure the noble Lord that we have put the clause in the most protective way possible without verging into hybridity and that that reflects the legal advice we received.

I welcome in particular the contribution of the noble and gallant Lord, Lord Lewin, on this question. He referred to the proposal to form a preservation trust. I agree with him that the objectives of such a trust will need to be clearly spelt out and that is an area currently being considered by the advisory group. I am sure that that group will consider seriously the points raised by the noble and gallant Lord, as it did the valuable contribution that he made to your Lordships' House on 30th October last. The terms of reference accord closely with the objectives of my right honourable friend's announcement of 28th March and the intentions of Clause 30 currently before your Lordships.

I understand the noble and gallant Lord's keenness to see matters move ahead. Of course we need to be careful not to pre-empt the will of Parliament, which is necessary to allow new arrangements. I am sure that all your Lordships will agree that any new arrangements for this great site which, after all, would only be the second change of use in the 300-year history of the present buildings, need to be got right. Having said that, I agree that the next step is the establishment of a trust. But that raises a range of practical issues which need to be addressed so that the trust can be securely established. I can assure the noble and gallant Lord that we will make a further announcement on that subject as soon as we can.

Perhaps I may turn briefly to a subject raised by a number of noble Lords; that is, the proposed sale of the married quarters estate. This was a subject referred to particularly by the noble Lord, Lord Chalfont, the noble and gallant Lord, Lord Craig of Radley, and my noble friend Lord De L'Isle among others. One of the purposes of the sale will be to improve the quality and management of service housing. It will do so in two main ways: by providing funds for an accelerated

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programme to upgrade those houses which are overdue for improvement and by enabling us to dispose more quickly of surplus properties, thus reducing the number of empty homes that we hold.

One anxiety expressed by noble Lords was the fear in the Armed Forces of reduced entitlement to married quarters. That fear is misplaced. The sale will have minimal impact on occupants of the quarters that we retain. The sale will not affect entitlement to quarters or our commitment to providing housing. It will not affect the charges that families pay or the way in which they are set. I remind the House that they are set independently by the Armed Forces Pay Review Body. Nor will the changes affect the Ministry of Defence's responsibility for managing and maintaining the quarters that we occupy; nor, equally, the security of the married quarters or our ability to preserve cohesive housing communities. Those undertakings are important and are points that I raised with the Army Families Federation.

The noble Lord, Lord Chalfont, referred to the Bett Review, and in particular to the proposals for providing Armed Forces pension schemes. I recognise his concerns on what is an important ingredient in ensuring recruitment and retention in the armed services. Our deliberations are continuing and we hope to make an announcement later in the summer. I can say that the letter from five former chiefs of defence staff to which the noble Lord referred, recently printed in The Times, will be taken into account as we consider the future shape of service pensions.

The noble Lord, Lord Williams, urged the Government to consider consolidation of service legislation. We agree with him about the importance of consolidation. A start was made after the last Armed Forces Act, but, when it was realised that the present Bill would make so many changes to the legislation, it seemed sensible to defer further work until it was enacted. We are now considering how to make progress in the most effective manner. The problem, as ever, is a shortage of drafting resources. It is not and it never has been the aim to produce a single Act covering all three services. That is too ambitious a project. It is better to modernise and update the separate Acts for the three services in terms which are meaningful to the members of each service. I suggest that a single Act may be too remote and abstract, not to mention long, for that purpose.

In concluding, I should like to observe that in my view the Bill strikes just the right balance between continuity and change. Service discipline cannot be susceptible to changes in fashion, but nor can it exist in isolation from the society which the Armed Forces serve and from which they recruit. Thus the five-yearly Armed Forces Bills provide the opportunity to fine-tune the disciplinary system and the reforms to the courts-martial system and the other changes included in the Bill, important as they are, need to be seen in that light.

I mentioned a balance between continuity and change. There is another balance which is critical of which your Lordships will be conscious; that is, the balance between obligations and duties which service in the

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Armed Forces imposes on their members--that is the essence of discipline--and the rights and expectations of those men and women who join the service but who remain citizens. The test of a disciplined system for volunteer Armed Forces in a free society is to get the balance right. Again, that requires us to exclude any thought of complacency but rather to keep a constant watch on the system and to use this quinquennial legislative opportunity purposefully and wisely.

It is customary on occasions such as this to pay tribute to the men and women who serve in the Armed Forces and I take great pride in following that tradition. Indeed, we can all take enormous pride in our servicemen and women, wherever they are serving--here or overseas--whether with the Royal Navy, the Army or the

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Royal Air Force. Regardless of whether it is in a high profile capacity or, as is more often the case, far from the attentions of the television cameras and the press, those men and women display qualities of determination and resilience, of flair and courage, to say nothing of skill and a capacity for sheer hard work which we take for granted at our peril. The system of discipline is not incidental to that. As many noble Lords observed, it should be regarded as a framework which is key to the effectiveness of our Armed Forces. The Bill is about improving that framework and on that basis I commend it to the House.

On Question, Bill read a second time, and committed to a Committee of the Whole House.

        House adjourned at twenty minutes after seven o'clock.

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