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Lord Judd: I am grateful to the noble Earl for the very full way in which he has responded to our observations. I put it to the noble Earl that his argument about regulations, although apparently attractive, strengthens the misgivings, inevitably, which are held by quite a number of people that the Government are very far advanced in their commitment. If they were really committed to a genuine pilot scheme, why would they not have specified far more clearly in the proposed legislation that the regulations being introduced were attached to the pilot scheme? It seems to me that what is happening is that we are being sucked in to the sort of ratchet, as so often happens in policy development, whereby the regulations for the whole scheme will be in place, because they have to be in place for the pilot scheme, and all the arguments will increasingly therefore fall towards the logic of continuing with what has been started. I hope the noble Earl will not feel I am just being unfeeling or insensitive in saying that his arguments have strengthened my misgivings.

Perhaps I may I also say that, while he has certainly dealt with some of the observations we have made, everything that he said and that was said in the Second Reading debate, and indeed everything I have read in the debates in the other place, suggest that the references to the costing of the scheme are very generalised and sweeping, whereas some of the criticisms that are being made are very specific on this score. We know that it will take more soldiers in this new arrangement to cover the work which was previously done by Ministry of Defence police as part of their wider responsibilities, and the point that the Ministry of Defence police keep making is that it is very difficult, outside nuclear installations, to find Ministry of Defence police who are largely doing this guarding work. They do the guarding work as part of much wider responsibilities.

There must be anxieties about the real costs involved in this. We could go further. We understand, for example, that the Government have not yet reached a conclusion on whether or not service housing will be available to the new soldiers, and what the costing implications of that will be. It seems to me that we are being told that the costing exercise has been carried out--there have been many more examples of this--before evidence of a really thorough financial examination of the scheme is available for all to see.

4 p.m.

Earl Howe: I am grateful to the noble Lord. It may assist the Committee if I expand on my earlier remarks. The investment appraisal we did showed that in resource terms it would be highly cost-effective to use MLSE soldiers to replace MDP officers employed only on guarding duties. The assumption was that those soldiers

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would replace MDP officers on a one-for-one basis. Given the resource cost savings which would result from the formation of MPGS, MDP voluntary early retirement or severance payments allowed for in the investment appraisal would be affordable. We do not expect those payments in practice, but we allowed for them nevertheless.

The affordability assessment shows that aggregate savings from replacing MDP with MPGS would be some £20 million, net present value, by the year 2005-2006. The combined pilot and main schemes would break even in 2001 or 2002. Further details are contained in the annex to the consultative document. The sensitivity analysis we carried out on those figures has confirmed that the conclusions are realistic, despite the inevitable uncertainties of forecasts which extend over a fairly long period. We have done our homework pretty carefully.

Lord Judd: I am grateful again to the noble Earl. I always find him extremely courteous and disarming in his endeavour and commitment to try to put the Committee's mind at rest. However, I hope he will understand that I still need a good deal more evidence that detailed homework has in fact been done. Issues such as housing; the amount of redundancy pay; the number of raw recruits who will come from civvy street and the number who will be ex-soldiers; and the different recruiting and training costs of both must all be looked at in some detail--and be seen to have been looked at in some detail--before one can be certain about costing. I imagine that we could go on arguing this point for some time, so all that I would say is that I believe there are grounds for considerable anxieties.

I must draw the noble Earl's attention again to that part of the letter which I quoted from Chilwell, in which the Ministry of Defence policeman writing on behalf of his colleagues said:

    "On my own station, Chilwell, a complementing review scheduled for September 1996 was rushed forward to mid-April. This resulted in our being retrospectively relegated on paper only to the required status of armed guards; although our actual employment has not changed at all. This review also increased our complement, again on paper only, from our current total of 20 men to the 26 men, which the MPGS would require".

With examples like that being experienced by the people at the coalface, no wonder there is anxiety. I suspect that the noble Earl understands the point far better than he is able to acknowledge from the Dispatch Box.

Perhaps I may make the point again that there is a great deal of concern in this country about the protection of hard-won civil liberties and the rights of citizens. We all understand the difficulties, and I would be the first to emphasise that we live in very difficult times. Society is not as we would like it to be, or as many of us experienced it in our formative years, and it is no good sticking our heads in the sand and pretending otherwise: we live in dangerous times in many respects. We must therefore make provisions which, ideally in terms of liberal democracy, we might not otherwise want to make, but they are necessary to protect society. I am the first to endorse those whenever necessary. When we are doing it, however, it is doubly important to be seen to

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have thought through the implications. I am impressed that decent Ministry of Defence professionals (whom, as the Minister of State said in the other place, we all respect) are raising the anxiety that the public's rights may be undermined because very often the people with whom contact is first made in a tricky situation are civilians.

Ministry of Defence Police are subject to normal police requirements and are subject to the Police Complaints Authority; the soldiers will not be. There has been no reference to this by Ministers, and just because of the troubled times and the need to make changes, which ideally we might not want to make, it is extremely important that we do not skate over issues of this kind. For those reasons, I wish to indicate to the noble Earl that of course we will listen, and we always read with great interest and care what he says. We shall read and evaluate very carefully what he says, but we may want to return to this at Report stage.

Lord Redesdale: I wish to clarify one point because I know that this is going to come back at the next stage. From what the Minister said, they did not anticipate any cost implications as regards retirements in the transition from the MDP to the MPGS. Perhaps we could come back to this at a later stage, but it seems to me that that might be because the Minister is foreseeing that members of the MDP will downgrade their jobs to become members of the MPGS in the future. I had the impression that this might have been the cost implication about which he was talking.

Earl Howe: No. I was referring to our expectation that the formation of the MPGS would not require any compulsory redundancies. However, it is possible that the Government's proposal would allow a number of officers to leave the MDP voluntarily on the same terms as they would have received if they had been made compulsorily redundant. The present expectation is that all the MDP officers displaced by both the MPGS pilot scheme and the main scheme would be covered by natural wastage. However, we have judged it prudent to assume that it may be necessary to offer some voluntary early retirement or severance terms to those displaced by the pilot scheme. So it is that to which I was referring.

Lord Judd: Perhaps I may raise one other issue which we may want to examine in some detail at Report stage. It is how far this scheme commends itself equally to all three services, or how far this scheme may have won the acquiescence, I suspect the cautious acquiescence, of the Army; the Air Force and the Navy see little point in it. In the meantime, we will look very carefully at what the Minister said. I repeat that we may need to return to it, but at this stage I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

On Question, Whether Clause 2 shall stand part of the Bill?

Lord Mayhew: I put down this motion because I just disliked in principle the procedural background and content of Clause 2. It is extraordinary that a scheme

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which has the most far-reaching consequences--this is quite original--should be introduced in a dozen lines in the Armed Forces Bill.

I followed as carefully as I could the helpful speech of the noble Earl and yet, at the end of it, I still had the feeling that Government are trying to rush this through without sufficient reference to Parliament. I am disappointed that he could not agree at least to the principle of amending this clause in such a way as to make quite sure that, when this pilot scheme is over, Parliament is consulted as to whether to go ahead. That has not been done. We are told that information will be given to the Defence Committee, but I believe we should go further than that. If the Government want to go ahead with this scheme, to which we have no objection whatever in principle, they should take the opportunity of assuring us of that, once the pilot scheme has been completed. From then on it is for Parliament, and not the Government, to decide whether to proceed with the scheme. I hoped that the noble Earl would be able to give us that assurance, but, as I think he would agree, he did not go that far. I felt hostile from the start to the phrasing and procedure embodied in the clause. It may be necessary to refer to it again at a later stage.

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