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Baroness Hamwee: My Lords, the comments made by the noble Baroness, Lady Hogg, about complications as regards the difficult history of the matter are not points of which I should like to make light. However, I suggest to your Lordships that it is those very

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complications--the history and the problems over such a period--that make it all the more important fully to consult and reassure the families who will be affected.

Much could be made of the MoD's failure to use empty properties in areas of housing stress; of its appalling failure to manage and maintain the properties which have quite extraordinarily been turned into an argument for the scheme, on the basis that the private sector can do better than the public sector; and of its failure to construct a strategy and stick to it over a period. However, the amendment is not about that. I have no wish to look for political differences: this is not a party political matter. Those noble Lords who know me will know that that is something which I rarely say.

I found the description of the noble Baroness, Lady Park, regarding the human aspects involved both today and in Committee to be very moving. Her description of the strains on service families struck a real chord; so, too, did her description of the management reasons for ensuring that the families support the proposals and that they are not left with feelings of confusion, of apprehension, of low morale and, possibly, even of betrayal.

In other housing sectors the Government make much of tenant involvement, and rightly so. Indeed, last night when this Chamber was somewhat emptier than it is now, we debated the role of tenants in decisions about the management of their own housing. We were told that amendments which were put forward from these Benches and from the Labour Benches to strengthen the position of tenants were unnecessary because they were involved throughout the process.

In Committee, when the amendment of the noble Baroness was debated, the Minister said:

    "We have already consulted and communicated extensively".
He told the House that the Secretary of State for Defence wrote,

    "to the occupants of all married quarters in England and Wales to explain the position last autumn";
and, indeed, that:

    "A parallel communication went to all personnel worldwide".--[Official Report, 25/6/96; col. 899.]
That is not consultation; consultation is a two-way process. If the benefits to the families are such as we are told as regards better conditions, and so on, what do the Government have to fear from consultation?

In modern jargon: those who are affected should own the decision. This seems to be more a case of disowning. We on these Benches are most grateful to the noble Baroness for so cogently and energetically putting her case in the early hours of the morning in Committee and, again, this afternoon. We warmly support the amendment.

Lord Clifford of Chudleigh: My Lords, I am most grateful to the noble Baroness for repeating what she said in Committee as regards the amendment that she moved this afternoon. I am also grateful to the other speakers who have taken part in the debate--for

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example, the noble and gallant Lord on these Benches and, indeed, many others who I believe support the noble Baroness.

As a result of the two or three schemes drafted to confront and best manage the recognised presence of empty and void married quarters, the MoD established the Defence Housing Executive about which noble Lords have already heard. Indeed, I shall be repeating various points and I hope that your Lordships will excuse me for doing so. That executive was given three years to fulfill its role, to dispose of the excess, costly and empty assets.

Before any move is made by Parliament in line with this Housing Bill, the Defence Housing Executive should be given time to act as managers of the housing stock. It should be allowed to present a "Plan of Operation Table" and give estimates for sales and the purchases of quarters. It should be allowed to carry out a policy of selective rationalisation, choosing the areas to be retained and those to be sold. If areas were to be sold, they should be complete estates--and noble Lords have heard this argued before--or patches, and sold with vacant possession.

The evicted servicemen--and I emphasise the word "evicted"--and their families should be helped financially to move into a new patch--quarters--selected by the Defence Housing Executive. In the same way, certain areas may be chosen by the executive or the MoD which would be available for redevelopment and sold. The proceeds should be used to improve the remaining stock of houses, to put the quarters in good order and a reserve fund set up to be available to purchase new houses if required in the future. If there were such a fund, the number of houses kept in reserve, vacant and void could be reduced.

Sadly, the life of this recently spawned housing executive is likely to be short; indeed, even shorter than the three years. Does the Minister honestly believe that the executive will enjoy the same remit that it now possesses when a private company, a merchant bank, steers the married quarters ship? I fear that we are in danger of putting financial interests before families.

It is recognised that there are 12,000 married quarters which are vacant or void at present. Of that number, 4,000 void quarters are reserved by the MoD for reasons such as: families posted abroad; unaccompanied tours where the wife and children may prefer, may select, to "live with mother" or a relation. It is clear that there are 5,000 to 6,000 properties that are available for sale; ready for grabs on the open market. That would leave a balance of about 2,000, some of which belong to the Royal Air Force, some of which are undergoing repair, restoration and redecoration; and, indeed, some of which are classified as "handover/takeover quarters" or related to short six-month tours.

Two to three years ago the MoD was encouraged by the Government to give this "married quarters streamlining scheme" a fair wind. The Chief Executive of the Cardiff Housing Trust was given the responsibility of showing how the streamlining could be done. He produced his report in 11 months. But it did

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not meet the Treasury criteria. That chief executive was given a £200,000 golden handshake for the efforts that he expended over that time. I wonder, would the Minister care to tell the House how much a warrant officer with 22 years' experience, some on operational duty, would be rewarded with after that length of service. Would it be £25,000?

The Bett Report was compiled under the direction of a personnel manager qualified in business--but not in war and not in the arena of counter terrorism, not a man experienced in the beneficial counselling and consolation delivered and witnessed in the married patch (the quarters) when a sailor, soldier or airman is wounded. The Bett Report is questionable. Mr. Bett's report is not one to be dismissed, but it certainly raised many an eyebrow in the married quarters when it suggested that outside professional counsellors, psychologists, might provide a better shoulder to lean on and to cry on--a logical replacement for the in-house friends next door in the married quarters.

The report raised the matter of stress. Many a serviceman's wife has dismissed the professional help from outside, content to depend on those who "know the form" and who have perhaps been in a situation where their husbands have been injured on duty. These servicemen's wives stick together and help the children in the affected families.

I think that I speak for many of the past as well as the present servicemen and their families when I say that they are "jarred off"--perhaps "fed up" is more politically correct--with politicians, psychologists and psychiatrists nannying them.

People in this Palace of Westminster need to respect the system, well tried over many decades, of family management, man management, in the Armed Forces--tried, tested and, above all, trusted. We need to listen to what the servicemen are saying. They say, "You can post us abroad, let us say to Bosnia, or post us at home, let us say to Northern Ireland, and we will do the job that you ask of us. You, the politicians, don't interfere with us when we execute our duties, suffer death, incur casualties. We are trained to handle these situations when in the front line or on the patch, in the married quarters." They say, "Sir, we don't interfere when you suffer political casualties or lose by-elections or general elections."

This short-notice attack by the Government on the essential self-help structure of the married quarters deserves to be sunk without a lifeboat, all hands lost.

5 p.m.

The Earl of Arran: My Lords, perhaps I may--

Lord Williams of Elvel: My Lords, I believe that the House wishes to hear the Minister fairly soon. I think that we have come to the end of a fairly long debate. I am sorry to cut out the noble Earl, Lord Arran, who, I am sure, has many things to say, but I think it is time, if the House will agree, that we move on and listen to what the Minister has to say.

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I, too, speak to the same group of amendments as the noble Baroness, Lady Park. Those of your Lordships who attended the Committee stage rather late at night may be aware that I did not put my name to the noble Baroness's amendment. I do so now with a certain amount of reluctance because my view is that the Government should scrap the scheme altogether. However, as I said, the poet Hesiod was right: and half a loaf is better than no loaf at all, so I have put my name to the noble Baroness's amendment.

I accept all the apologies that the noble Earl in Committee and now the noble Lord, Lord Trefgarne, made about the MoD management of the married quarters estate. It has been a disaster. Ministers have to accept that it has been a disaster. It is not the responsibility of civil servants. The noble Baroness, Lady Blatch, shakes her head, but I am afraid that the noble Lord, Lord Trefgarne, admitted that he had been deficient in his responsibilities as a Minister in managing the married quarters estate. I cannot disagree with the noble Lord, Lord Trefgarne; who am I to do that?

I hope that your Lordships listened carefully to what the noble Baroness, Lady Park, had to say, although I understand that there have been certain diversions in another part of this House between four and five o'clock this afternoon. I hope also that your Lordships have listened very carefully--I know the noble Baroness, Lady Hogg, does not listen very carefully--to the noble and gallant Lord, Lord Bramall. I have listened to the noble and gallant Lord, Lord Bramall, for 40 years. Forty years ago I was a subaltern in "A" Company of the First Battalion, 60th Rifles, the Company Commander of which was Major Bramall. I have listened to the noble and gallant Lord expressing great wisdom ever since.

When I was, I accept, a rather unruly subaltern in that battalion, the noble and gallant Lord taught me two very important things. He said: "The first thing you have to remember, as a humble platoon commander, is that the important part of your command is the morale of your riflemen. The second thing is that your riflemen will never have good morale unless their families are happy." I had to go through many rather painful experiences with some of the riflemen under my command who were unhappy about their families for one reason or another, good or bad. Nevertheless, the noble and gallant Lord, Major Bramall, persuaded me that that was the right thing to do and I think he was right.

I agree with the noble Baroness, Lady Hamwee, that this was not at the outset a major party political issue. It did not start as a major party political issue; it started, as the noble Baroness, Lady Hogg, pointed out, as an important policy initiative, announced as a Written Answer in the House of Commons in November 1995. I imagine that when the Minister comes to reply he will explain why it was put in that form and not put in a proper Statement to both Houses of Parliament.

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There is no doubt that the measure is unpopular. It is unpopular with Army wives, Air Force wives and others. Indeed, I have a letter in front of me from one of the consortia who are bidding for this married quarters estate saying:

    "The reaction to this privatisation from within the Armed Forces has unfortunately generally been hostile."
Nobody could express a greater truth than that, and that comes from one of the bidders.

I have also had many letters, as I am sure your Lordships have, from those who have been connected with the Armed Forces in one way or another. Most touching to me was a letter from a former member of the staff of your Lordships' House who had been a quartermaster in the 2nd Battalion, Coldstream Guards, during a company tour in Northern Ireland. He expressed in very moving terms how it was most important to have the married quarters estate blended in with the serving people, not only in Northern Ireland but elsewhere. I am slightly fastidious on the matter and will not mention the name of the former member of your Lordships' staff, but I know that if I were to do so noble Lords would appreciate the service that he has rendered to this House.

I said that I agreed with the noble Baroness, Lady Hamwee, that at the outset this was not a party political issue. However, it has been elevated to a party political issue--witness the number of noble Lords opposite who have come to listen, attentively I hope, to this debate. Indeed, the Conservative Whip for the week of 4th July 1996, a distinguished document--apart from certain blotches on the heavy lines--from the noble Lord, Lord Strathclyde, says:

    "Amendments have been tabled. Your attendance is essential unless for reasons of ill health."
I am so glad to see that the noble Lords opposite are in the best of health for a Division which is of the utmost importance to Her Majesty's Government.

The noble Viscount, Lord Mountgarret, raised this point. Is this really of the utmost importance to Her Majesty's Government? I wish to make three comments. First, it is a modest amendment. The noble Baroness is not trying to shake the earth. All that the amendment demands is a period of consultation with the people who are really affected; that that consultation should be produced to your Lordships and another place; and an order produced which we can then debate. I cannot think that if the amendment is passed it will bring down the Government. It is not a matter of confidence in the Government as the Whip seems to claim.

My second point is that the Armed Forces are not the property of the Government. The Armed Forces are the Armed Forces of the Crown. They are not the property of any government be it Conservative, Liberal, Labour or any other party. We are here to defend the Armed Forces of the Crown, and any government which seeks to lay claim to be proprietor of the Armed Forces of the Crown is, I believe, constitutionally at fault.

My third comment picks up a remark made by my noble friend Lord Callaghan of Cardiff. I confess to your Lordships that I was brought up to believe in my

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innocent youth that the Conservative Party had the reputation of being the patriotic party. I was told that by my uncle. My uncle, my mother's brother, was a battalion commander in the Coldstream Guards. He led the battalion in the retreat at Dunkirk. He was awarded the DSO for his gallantry and honour in doing so. He always brought me up to think that the Conservative Party was the party that would defend the Armed Forces. He was one of the last to get on the boats at Dunkirk. When he arrived at Dover he finally got to a telephone. As your Lordships will understand, in those days telephones were not easy to find. He rang my grandmother, his mother, and said, "Mother, it's all right, I'm back". My grandmother, I must admit, was not in full possession of all her faculties at the time and the reply came down the crackly line of the telephone of those days, "My dear boy, have you deserted?"

I put the question that my noble friend Lord Callaghan put to noble Lords opposite. Are they really no longer prepared to stand up for the Armed Forces of the Crown? Are they prepared, without proper consultation with those affected, to let this go through as is? Are they prepared to have families shuffled about without promises of alternative comparable education, and all the rest that the noble Earl will say? Despite the fact that the Japanese own the DTI building in Victoria Street, are noble Lords opposite prepared to have the Japanese owning the married quarters estate in the Armed Services? Are they prepared for all that just to gain £1.4 billion or £1.5 billion for the Treasury, even if that is achieved?

I have been on the Front Bench of my party in this House for 10 years. I find myself for the first time in total agreement with the noble Baroness, Lady Cox. I congratulate her; it is an unusual experience for me. Nevertheless, I believe that this is a cross-party issue. It is not an issue of one political party or another. I believe that your Lordships have a chance today to strike a modest blow for the Armed Forces who have suffered quite a lot over the past few years. They serve us well. They deserve our support. I believe that we should give it to them.

5.15 p.m.

The Parliamentary Under-Secretary of State, Ministry of Defence (Earl Howe): My Lords, I defer to no one in my respect and admiration for my noble friend Lady Park. She has advanced her case today, as is no surprise to me, in a persuasive manner. I shall demonstrate, I hope conclusively, that your Lordships should not be persuaded or even tempted by her arguments. Indeed, I believe them to be wholly misconceived.

But before I do so I should like to invite your Lordships to step back for a moment and look at what the Government are proposing. The Ministry of Defence has a married quarters estate consisting of tens of thousands of properties. There are two problems with this estate. One is that while many of the houses provide modern and comfortable living accommodation, too many of them do not. There are many hundreds of houses which might have been acceptable when they

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were built in the 1960s and 1970s but which, frankly, nowadays are sub-standard. We spend money every year upgrading a proportion of this accommodation but we need to bring all the properties up to a proper standard and to do it quickly.

The second problem is that too many of our properties are standing empty. A proportion of them need to be kept empty because service families tend to move house a lot and often at short notice. But far too many homes are genuinely surplus. Over the years the Ministry of Defence and the services have taken a rather haphazard and piecemeal approach to selling off such housing. It has not worked. A large part of the stock is difficult to sell by virtue either of its location or its condition; but perhaps more fundamentally the MoD tends to have other things on its mind than selling houses. There are many skills possessed by the Ministry to enable it to defend the realm: estate agency has not been one of them.

So the Government's idea is a simple one. It is to sell the married quarters estate and lease back the part of it that we want. We have a duty to house entitled service families in the right place and at the right time; but the houses themselves are an asset which the Ministry does not need to own. In all the debate on this question I have not heard a single argument to undermine that premise.

In passing, my noble friend asked about the role of David Hart in all this. Mr. Hart is one of a whole raft of independent advisers who have contributed at various times to our work on the future arrangements for the married quarters estate. He is unpaid and has no financial interest in the outcome of the sale.

From the sale proceeds we shall have an extra £100,000,000 (ring-fenced) to enable us to get on with the upgrading exercise as we would wish to do. We are not talking here of luxury; but rather the installation of central heating and double glazing, modern kitchens and bathrooms to ordinary modest houses. Our servicemen will then get the accommodation they deserve.

The sale will also provide both the incentive and the means to solve the problem of empty homes--the incentive, because we will in future pay rent for the properties we keep; and the means, because we will be able to dispose of houses by simply terminating the relevant lease of six months' notice. That will save the MoD from wasting money maintaining and securing properties we do not need and allow us to concentrate on those we do need. And the private sector will undoubtedly be more efficient at returning surplus quarters to productive use, with potential benefits to both the private and social housing sectors.

Meanwhile the newly created Defence Housing Executive will continue the task of day-to-day management. Already the DHE is bringing about better more efficient management and maintenance of the estate and that represents significant progress.

The suggestion by the noble and gallant Lord, Lord Bramall, that we could achieve those aims simply by selling off our surplus stock misses the point. It is precisely because we have found extreme difficulty in selling our surplus stock that a sale of the whole estate, with the surplus wrapped up in it, recommends itself.

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But if we were to wave a magic wand the 2,500 surplus quarters in the sale package are not worth £40,000 each even if a buyer could be found for them all. The proceeds of routine disposals for surplus properties have never been sufficient to fund the upgrade programme we want, nor would they be in the future.

But in a plan such as this Ministers must ensure that while ownership of the estate may pass to another, control of it does not. Let me make a number of points quite clear. Nothing in these proposals will affect the level of rents paid by service families. Rents will continue to be set independently by the Armed Forces Pay Review Body. There will be no change to a serviceman's entitlement to housing in the right place and at the right time. Much has been made of the need to protect the married quarters patch, a view with which Ministers strongly agree. That is why it will be ourselves, not the new owner, who will decide which houses are given up and which are kept for service occupation. That is a management function, which the DHE would need to exercise whether or not there were a sale of the estate. Service families will continue to deal with the DHE on a day-to-day basis. They will have no relationship at all with the new owner. The purchaser will have no right or power to break up or cherry pick or in-fill sites we occupy. My noble friend Lord Swinfen suggested that the safeguards might be lost when bits of the estate are sold. He is quite wrong. Safeguards will be incorporated in our leases. It is the MoD that is the tenant, and the leases last 200 years. I touched on the principal concerns of service families. They are perfectly understandable concerns. They are not, however, well-founded ones.

But the recurrent theme in our debate today has been consultation--the suggestion that we have failed to consult and inform. I can understand why this charge has been levelled against us; but I genuinely believe it to be misplaced. We have really done a very great deal to keep everyone in the picture. My right honourable friend the Secretary of State wrote to all married quarters occupants in England and Wales when the sale was announced last autumn, as fully as he was then able; and he has recently written again. My right honourable friend, his other ministerial colleagues and I have all devoted enormous efforts to seek to get our message across, and deal with the concerns that have been raised. There has been a huge quantity of correspondence and meetings, with Members of this House and of another place; with representatives of interested organisations including service families; with the media and with members of the public. We have also disseminated very full information through the chain of command at regular intervals.

And, most important of all, the service staffs have been fully involved as the proposals have developed. Their contribution has of course been indispensable, to ensure that our proposals fully satisfy the interests of the services. Without that, the Chiefs of Staff would obviously not have been able to express their support for our proposals which they reaffirmed only recently. The service chiefs are not in the habit of taking up such positions lightly. Their judgment deserves the fullest weight.

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One or two noble Lords asked why the Government cannot be more open about the financial details. We have, of course, been operating under the constraints of a commercial negotiation. In order to get the best possible result for the services and the taxpayer, it is vital that we maintain control of the sale process, and preserve the confidentiality of information which is commercially sensitive at this stage. So we have not been able to lay out every last detail of what is proposed, or publish the full commercial information (which is by any standard voluminous). But I believe that we have been able to give a clear picture of all the essential elements.

Despite all this, my noble friend's amendment invites us to suspend the process and conduct a consultation of all those currently occupying the quarters. I suggest there really has to be a limit to the amount of consulting that we do. We must be able to say, now that the Chiefs of Staff have expressed their support in clear terms, that this is indeed a good plan which ought to proceed.

But there is another reason why I am opposed to further consultation, and that is that occupants will be fundamentally unaffected by the sale. We have said this time and again: the sale involves no change to their entitlement to a quarter, no change to the charges they pay, and no change to the maintenance and management service they receive from the MoD. I say to the noble Lord, Lord Chalfont, that it involves no change to the military culture.

There is another point that I must stress. Although I am perfectly satisfied that this is in no way my noble friend's intention, we must be clear about the effect of her amendment on the sale process. To delay three or four months, as the amendment would entail, would not simply mean that everyone had further time to reflect. It would mean that the sale process would come off the rails. The reason is this. The shortlisted bidders have committed considerable resources, financial and managerial, to meeting the timescale that we have set. Their best and final offers are due at the end of the month. Delaying the transaction until the autumn or beyond would destroy something that is fragile but critically important--the momentum of the sale process. In a deal as unusual as this one, there is real competitive tension between bidders, tension which we have painstakingly built up and which must not on any account be undermined. To give time for reflection would be to invite the renegotiation of key aspects of our proposals, including the many important safeguards we have incorporated. We cannot now take an indefinite "time out" and then expect to be able to secure the best outcome for the services and the taxpayer on resumption of bargaining. That, more than any other reason, is why this amendment, beguiling as it may seem, would be fatal to our plans.

My noble friend Lord Mountgarret made a constitutional point. He said that we should give a chance to another place to debate the issue. It is very interesting that the Opposition in another place had two chances in the past fortnight to raise this issue for debate. Both times they chose to debate other issues such as water metering and family-friendly employment.

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I understand that they have also decided to focus elsewhere on an Opposition day next week. One must ask why they have chosen to do so.

We heard a very interesting speech from the noble Lord, Lord Williams. I did not think it was possible for him to rise any further in my estimation. But this afternoon has proved me wrong. The noble Lord gave us a masterly performance, for which I am sure many of us are truly thankful. But a performance is precisely what it was. It really is extraordinary to hear the noble Lord, whose party all week has been parading its heart on its sleeve in the cause of homeless people, trying now to entice your Lordships down a path which would prevent thousands of empty homes being brought back, efficiently and speedily, into productive use. The truth of the matter is that the Labour Party has been wholly opportunistic in the stance it has taken on this issue. All of a sudden to profess to champion the cause of the service family makes the noble Lord, Lord Williams, about as credible as a man who has murdered both his parents and who then pleads for clemency on the grounds that he is an orphan. It does not convince me for a moment.

I acknowledge that there are residual worries. Once the sale has been completed, I believe that the doubts and fears that have been expressed will be removed as service families realise that the sale has really made very little difference to them--very little, that is, apart from an improved standard of housing. The sale of the estate represents a prime opportunity to rectify past under-investment and finally get our housing provision right. We have a manifesto commitment to improve the quality and management of service housing. It really would be a tragedy if we were to let this opportunity slip through our fingers at this late stage which, I emphasise, is what my noble friend's amendment would mean.

It would also be a tragedy to miss this chance to resolve our long-standing empty homes problem. That, too, is the subject of a manifesto commitment. Having 20 per cent. or more of the stock standing empty hurts us all. It hurts the services, and it hurts the taxpayer because it costs money which could be better spent on something more productive.

To sum up, may I say again that I know my noble friend's amendment proceeds from the best of motives. But it is wholly wrong. It is based on a misunderstanding of our proposals and their implications; and it would destroy any chance of getting the best outcome for both the services and the taxpayer. The best way to demonstrate our support for our service personnel and their families is now to allow the Government the chance to give them the housing they need and deserve. That is why I urge the House to support the Government.

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