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Lord Wallace of Saltaire: My Lords, can the noble Baroness tell me what evidence she has that the French and the Russians share the desire to ease the Americans out of NATO? That was not my reading of the French decision to rejoin the NATO integrated organisation or indeed of any of the recent speeches made by French Ministers on the subject.

Baroness Park of Monmouth: My Lords, I accept that entirely well-informed observation and perhaps even correction. I believe that I stand by my own view. However, the noble Lord is perfectly right to say that it is a view and not a fact.

As I was saying, it will come as no surprise that General Grachev, when he was still in charge, said that the representation of Russia in NATO's Supreme Command Europe and NATO main commands is a new and important step on the road for expanded partnership and broad co-operation between the Russian and NATO armed forces which will be seen as components of one containment force and an all-embracing security network.

Right on cue, the new Secretary-General of NATO, Xavier Solana (with a long history of friendship with the former Soviet Union), spoke in June about new forms of NATO co-operation with Russia after a joint meeting with NATO defence ministers and the Russian defence minister in line with the 16 + 1 formula. Incidentally, General Lebed recently remarked drily:

I should point out that that is his observation, not mine.

Russia and NATO have a single aim, said Solana, which means the preservation of stability and security in Europe and that they would join forces to achieve this. I have to ask: on what terms, and what has become of NATO's duty to deter? Every time I hear NATO officials, including recently the Supreme Military Commander, they talk as if NATO were a branch of the UN or the OSCE--a political organisation which never heard of a military function. All that is to reassure the Russians. I have to say that it does not reassure me. I can see a time when no NATO member will think it necessary to contribute any troops, except perhaps to play peace games with the partners.

Let us take a look at the summary of the NATO enlargement study in the Statement that we are discussing today. It actually claims that enlargement should,

    "be part of a broad European security architecture",

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like, I suppose, the Department of the Environment building in Marsham Street; and that it should occur through a gradual, deliberate and transparent process and should aim at denationalising defence. I wonder what Pug Ismay would have thought of that jargon--or that aim. NATO is valuable only so long as it has the power and the will to deter. It is being destabilised from within.

But I have reached the conclusion that we should not be worrying about Russia's strength or NATO's weaknesses. The termites are at work at home. We are told much about the effort going into Front Line First and yesterday about the Government's difficulty in believing that everyone in the services is not perfectly--well, fairly--happy.

Let us take a look at the report of the Defence Committee in the other place on Bosnia and our forces there. It concludes that either a prolonged peacekeeping operation like IFOR is too large a task, or the Army is too small. It is concerned about the strain that the Bosnian operation is placing on the Army. The IFOR mission is pre-empting military resources to a degree which would make another simultaneous operation impossible and training by other units very difficult. A thousand extra troops have just been sent to Northern Ireland.

Can my noble friend the Minister say whether we have any rapid reaction force left? Tour intervals of the Signals and Engineer units in Bosnia have fallen to less than half of the expected 24 months, and most of our communications units' net assets are in Bosnia. The Army is not big enough to meet its commitment, nor does it have the necessary range and quality of campaign stores. The logistic system is based on the concept of "just in time". Let me take one example, which is peculiarly relevant to yesterday's debate, since it affects morale.

    "For soldiers deployed on operational tours for periods of six months",
says the report,

    "the opportunity of regular contact with families is important. That includes access to telephones. Two thousand of the troops four months into the deployment did not have access to a welfare telephone or their access involved a 30-minutes bus ride once a week to a town with a single international line.".
To provide welfare telephones by June this year would have cost the taxpayer £6.5 million and it was decided to meet the requirement through a privately-funded initiative, PFI. Surprise, surprise, the private contractors had difficulties and there were delays. But by mid-May this year 90 per cent. of the troops did have access to some form of welfare telephone.

Your Lordships should not think this a frivolous item to raise in a defence debate. It is a serious indicator. It concerns morale--morale which even the Armed Forces Pay Review Body and the Bett Report have noticed as a major and growing problem. The review board speaks of an unprecedented degree of uncertainty for the Armed Forces. It says that since Options for Change, the image of the Armed Forces as a viable and secure career may have been undermined and urges the MoD and the

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services to take further steps to encourage retention. It refers in particular to postings and family stability and adds that,

    "on a domestic level, service personnel and their families are having to resign themselves to more periods of unaccompanied separation whereas in the past they could expect long accompanied tours overseas. Personnel to whom we spoke felt that many of the advantages of service life had deteriorated".

But, of course, the clue to all this is to be found in that masterly chapter in this business manual we are considering, Chapter 6--Maximising Investment in the Front Line. What this means is maximising other people's investments--the PFI. It says,

    "Only when PFI treatment has been shown to be inappropriate or uneconomic will the use of defence capital resources be considered".
So, of course, the troops in Bosnia, a country where most private telephones disappeared as war casualties, had to wait for a PFI.

Fifty projects with a capital value of £1.5 billion, says the report, are being tested for a PFI solution. You will be glad to hear that even such subjects as personnel security vetting and the Defence Intelligence and Security Centre, among 18 other candidates for agency status, are being tested for agency status. That means that they will henceforward spend more time presenting business plans, presumably, and putting out glossy charters promising to answer all telephone calls by the fourth ring rather than doing an actual task.

Coming back to the review board, we have the board expressing anxiety about medical and dental services. The board says bluntly that it does not find the MoD's evidence reassuring and has concerns about the morale of the professional staff:

    "We are very concerned that the manning problem has deteriorated to the point where it is having some impact on the ability of the Secondary Care Agency to fulfil its task in peacetime."
And well they may, since on the one hand the Statement on the Defence Estimates, paragraph 715, proudly announces that rationalisation within the defence estate continues to lead to major property disposals--expected to generate over £100 million in 1996-97--which include two hospitals, at Woolwich and in Plymouth. And on the other hand there is an acute shortage of doctors and surgeons in Bosnia and a lack of air-conditioned operating theatres. The number of deployable Army surgeons has dropped from 33 to 22 in the last two years. The Army needs nine medical officers and four surgeons in Bosnia and is having to rely on doctors from other services and other countries. It operates in tents, whereas most other countries have mobile, air-conditioned containers.

The MoD is examining the case for portable modular hospitals but that would cost £2.7 million so I expect they are still looking for a PFI. The Defence Committee thought, considering how long UK forces have been deployed in Bosnia, that this might have been addressed earlier, but I expect the MoD was too busy writing charters and looking for PFIs.

Your Lordships are very fortunate: you are going to be spared anything more from me except that I would like to read a last paragraph from Chapter 6--Maximising Investment in the Front Line.

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    "Managers at all levels are now required as part of their Management Plans to produce a three-year efficiency plan describing the way in which their areas seek to deliver operating cost targets. These will highlight those areas of activity that are to be reviewed, which efficiency techniques are to be applied and what level of savings might accrue".

This is all about savings, and saving money. It is not about looking after forces.

1.5 p.m.

Lord Chalfont: My Lords, I am grateful to the noble Earl for introducing this defence Statement to the House. I speak as one who has some experience of drafting defence White Papers, and I think this is an excellent document. It has important things to say about a wide range of subjects relevant to defence policy, including such important matters as defence equipment, personnel management and a comprehensive summary of the tasks which have to be undertaken by our Armed Forces. I regard it as a well produced and informative document.

But I am afraid that I am going to be a little perverse today in that I am not going to take up any of the points that are in the document, nor have I time to take up any of the points which I think have been made in a sometimes very provocative and controversial fashion about such things as a comprehensive test ban, ballistic missile defence, the enlargement of NATO and the threats of instability in the Middle East.

These are all important subjects but today I want, if I may, simply to take up a theme that was enunciated clearly and authoritatively by my noble and gallant friends Lord Bramall and Lord Craig and my noble friend Lord Vivian. I want indeed to concentrate on one word. It is a word which appears nowhere in the defence White Paper. The word is "morale". The noble Lord, Lord Williams of Elvel, mentioned in his speech on the married quarters' estates sale yesterday that in military matters the moral dimension was substantially more important than the material. And, indeed, the importance of morale has been emphasised by military historians and military commanders throughout the ages. In the 5th century BC, the great historian, Thucydides, who, as your Lordships will recall, wrote The History of the Peloponnesian War, was writing of the crucial importance accorded to morale by such great commanders as Pericles and Alcibiades. Napoleon, I think, much later summed it all up when he said that the two great instruments in warfare were the sword and the spirit and of these the spirit was the greater. More recently, Field Marshal Montgomery--for my money one of the greatest battlefield commanders of the Second World War--wrote in his memoirs,

    "the morale of the soldier is the greatest single factor in war".
And, of course, when Monty went on to be Chief of the Imperial General Staff, the first thing he did was to write a paper on the problems of the post-war Army. Somewhat naturally, in that paper he saw all the problems of the post-war Army but in doing so he covered a number of points which he presented at his first meeting with the Army Council. Two of those points were the importance of a contented Army and the factors necessary to this end. And he then called for a

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systematic study of the problem of morale and of the need to teach officers how to create a high morale in the Services.

So much for history, but there are lessons in that history which we are in danger of forgetting. I am not suggesting that the Armed Forces are in any way demoralised--far from it. As we have seen in the Gulf, in Bosnia, in Northern Ireland and elsewhere, when they are given a job to do they do it as bravely and effectively as they have always done. It would, however, be foolish in the extreme to pretend that their morale is not under severe strain. There are, I think, a number of reasons for this. The recent over-hasty reductions in the size of the Armed Forces mentioned by several of the noble Lords has resulted in the familiar phenomenon of overstretch. Officers and men are required to carry out operational tours of duty, separated from their families more often than is wise.

At a lower level but one just as important to morale, such routine matters as guard duty and what are known in the Army as "fatigues" come round far too often--more often than they did in the past. To add to that, there is uncertainty about accommodation and pay, conditions of service and pensions, although I hope that we shall see some of the problems addressed when the Government publish their long-awaited response to the Bett report.

Any government of any complexion must address its mind to all those matters if we are to have what Montgomery called a "contented Army". There is, however, one over-arching development which, in my view, is bound to affect the spirit and morale of the Armed Forces. It is that we seem now to have ceased to regard them as having any special and unique role in our society. They see the Defence Budget being treated by the Treasury like the budget of any other government department. Servicemen and women have a feeling that they are being treated like any civilian organisation that happens to wear uniform. Their conditions of service and their accommodation are being made subject to naked market forces. Many of their military activities are being privatised or "market tested", and even their frontline weapons, in some cases, are being maintained by civilian organisations. There is a widespread perception that "cost-effectiveness", "value for money" and the "bottom line" and other slogans--important as they may be in other contexts--are beginning to play too great a role in defence planning.

Perhaps I may say in passing that these perceptions are unlikely to be dispelled by the timing of today's debate. It has resulted in these matters of primordial importance being discussed over lunchtime in a House which has never been more than 50 strong and sometimes fewer than 20. I do not believe that will do much to encourage people in the Armed Forces to believe that their problems are being taken with great seriousness.

To return to my theme, it seems to me that the diminution in our perception of the Armed Forces as a very special and unique element in our society springs from two factors. The first and most obvious is that we do not have a real war going on at the moment,

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although, as the noble Earl said, we have many military commitments. Although I do not wish to evoke too many memories of Rudyard Kipling--not one of my favourite poets--I am bound to say that it is at times like this when there is no real war going on that people tend to forget the vital importance of effective, well equipped and contented Armed Forces.

The other factor is connected with a change, perhaps inevitable and irresistible, in our general culture. The younger generations no longer think of war as a glorious adventure. And they are right. War is an evil, cruel and ugly thing, as anyone who has fought in one will readily testify. There is nothing glorious or glamorous about war. However, as Clausewitz once memorably said, it is and will remain,

    "a continuation of policy by other means".
As long as the world is organised into nation states--and it will be for many years to come--as the noble Earl said, there will be clashes of interest between the nation states and those clashes will sometimes result in war. It is, therefore, obvious and of vital importance that we do not take our safety and security for granted. We are going to need our Armed Forces, as the Minister said, as far ahead as anyone here can see.

We have in this country Armed Forces which are among the best in the world. They are brave, disciplined, well equipped and well led. Nor is there much wrong with our higher command. I know many of our service chiefs very well. Indeed, I was fascinated to see when I was looking at Who's Who the other day that one of the chiefs of staff joined the army the year before I left it. They are dedicated professionals and they serve our country well.

One final point: we should never forget what has been described as the "unlimited liability". It is a liability which applies to no other walk of life. The unlimited liability is the symbol that when people join the Armed Forces and take up active service, they offer not only their skills, intelligence and loyalty: they also offer their lives. That is the unlimited liability which no one else in our society has to face.

It would be a tragedy if we ever betray the trust of those people by allowing their spirit and morale to be undermined. I very much fear that in our haste to cash in on the largely illusory peace dividend, we are moving in that direction. I hope that the Government can assure us that, although the word "morale" does not appear in the Statement on the Defence Estimates, it will nevertheless be uppermost in their minds when it comes to providing the necessary resources in coming years for the defence of the realm.

1.15 p.m.

Lord Forbes: My Lords, I wish to add my few remarks concerning morale and recruiting. Recruiting is the lifeblood of the Army and the two--morale and recruiting--go together. Unfortunately, there is cause for concern as the Estimates show that the Army has a shortfall of some 4,000 trained men. The reasons given in paragraph 505 of the Statement are: shortage of people in the right age group; increased opportunities for further education; and the mistaken perception that

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the Army no longer needs new recruits. Quite frankly, when I joined my regiment 58 years ago, those reasons would have been called "idle excuses".

There are much more fundamental reasons for the shortage of soldiers. First, there were the very drastic cuts brought about by Options for Change. Those cuts hit the infantry and gave morale a severe blow. They led to many units being at full stretch. Full stretch can be accepted for short periods, but it cannot go on for long without affecting morale. Full stretch today is affecting morale.

Morale plays a vital role in the Armed Forces. I believe that the Ministry of Defence has failed fully to recognise that fact. Possibly those who have never served in the Armed Forces find it difficult to appreciate the vital importance of morale. During the last war, when morale was high, soldiers achieved the near impossible. Equally, in peacetime morale acts as a magnet in attracting recruits. It is contagious.

In the past, when unemployment was high, recruiting was comparatively easy. So why is it difficult today? I have already mentioned morale. But there are other reasons. We can turn off the recruiting tap and stop the flow of recruits almost at once, but, turning the tap on again, we find only a trickle comes. The flow of recruits starts again only when the confidence of the general public is restored and they see that a good career is to be had in the Army.

Secondly, today, on leaving school, boys cannot go straight into the Army. No longer is there a junior entry. Those leaving school either get a job or fall back on social security. Having gone down either of those routes, they are reluctant to change their lifestyle to that of a disciplined environment in the Army.

There is also the question of money for recruiting. It is difficult to step up recruiting when financial assistance to the Army is being cut to the bone the whole time. The result is that despite the high priority accorded to recruiting, the resources that are allocated are totally inadequate. Furthermore, money for recruiting should not be standardised, as some regiments recruit in a small area while others cover the whole country, concentrating on various pockets of population here and there. Their expenditure must be different.

I find it rather ironical that while the Treasury knife continues to pare down Army expenditure the Ministry of Defence tries to add a sweetener by talking of large expenditure about to be made on equipment. It is no use having equipment without the men to use it. That just does not make sense.

Defence must never be looked on as an activity in decline. We must maintain our Armed Forces up to strength so as not only to defend ourselves but also to enable us to carry out our worldwide commitments. Money spent on keeping our Armed Forces up to strength is one of the best investments for our country, not only in ensuring our defence but also, most importantly, for maintaining standards in civilian life. Standards adopted by men in regiments live on in civilian life, be it a straight back or a straight answer. Those leaving the Army to enter civilian life take with them many qualities such as leadership, loyalty,

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discipline, charity, integrity and, above all, moral courage. Surely those qualities are of the greatest value to our nation, especially now, when all around us standards are falling. What our country desperately needs today is citizens having discipline who uphold moral standards. I suggest that it is our Armed Forces who can supply that most valuable and needed asset.

First of all, it is the duty of the Ministry of Defence to ensure that the Army is kept up to strength. The present inability to recruit to establishment leads to overstretch and dissatisfaction. That is the worst scenario for recruiting. The best recruiting asset a regiment can have is high morale, a positive image and satisfied soldiers. All I can do is say to Her Majesty's Government in the strongest possible terms that they must get to grips with the problems of the Army. Our servicemen deserve our fullest praise. They are fully stretched, if not over-stretched. They deserve, and must receive, more support from Her Majesty's Government.

1.23 p.m.

Lord Jenkins of Putney: My Lords, my thanks to the noble Earl for introducing this debate are not merely customary and traditional. It is my pleasure also to thank him for enabling his department to fill one of the many gaps in my background knowledge; it was most valuable to me.

Since the statement we are discussing was presented to Parliament, and as recently as this week, a decision of world significance was taken. It was greeted in the British media with less notice than it deserved and the press reception was very mixed. Elsewhere in the world it was given a great welcome. I refer to the decision of the International Court of Justice to confirm legally the opinion already reached by the General Assembly of the United Nations that, as the Financial Times put it,

    "The use of threat of nuclear arms is unlawful".
The Times, on the other hand, announced:

    "Hague court declines to give ruling".
That report must have been a day behind. The Scotsman said:

    "Threat or use of nuclear weapons rejected by international court",
which sounds a trifle Delphic, though the text makes it clear that the correspondent agreed with the writer for the Financial Times, who said that the court had declared that the threat or use of nuclear weapons was against international law. The Independent had no doubt that, as it said:

    "World takes first steps to ban the bomb".
I think that is about right.

The Daily Telegraph, which is widely regarded as enjoying a high reputation for factual accuracy, even if its opinions occasionally depart from Central Office conformity was simple and straightforward. It stated:

    "Nuclear arms are illegal court rules".
That is undoubtedly the case.

So what happens next? I decided to examine the matter and have been helped by a factual release from the small but efficient British World Court Project, a single-issue enterprise which has been unashamedly

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pursuing this cause recently and whose man in The Hague, Commander Robert Green R.N. (ret.), has no doubt as to the importance of the decision. He said:

    "With this remarkable decision I could never have used a nuclear weapon legally. It places a duty on the military to review their whole attitude towards nuclear weapons, which are now effectively in the same category as chemical and biological weapons"--
in the same category, yes, but not in the same position. I am aware that the Government did not wish the international court to consider the matter and that they were among the minority who opposed the decision. However, now that it is law, I am sure they will want to proceed along the same course as they pursued in the case of biological and chemical weapons; that is to say, they will want to proceed to a convention. Such a convention is essential to put the court's decision into effect, because the court itself has no enforcement powers and there are important matters of how, whether and when to be decided.

Nevertheless, a decision in principle has been made and the process of gradually removing the shadow of nuclear extinction from the horizon of humanity can now begin. When he comes to wind up, I hope the noble Earl will be able to tell us something of the Government's reactions to that vital and very recent decision.

In the light of that, I think it best that I say no more. I shall leave it to the Government to respond, if they can, to a matter which, as most noble Lords may well agree, has not received the attention that it thoroughly deserves.

1.30 p.m.

Lord Marlesford: My Lords, it is with diffidence that I intervene for the first time in a debate on the Defence White Paper. My first point will indicate why I want to do so. It is obvious that no one in the Chamber today is in any doubt about the importance of the subject we are debating. The quality of debate is very high. From all the excellent speakers today I single out the noble and gallant Lords, Lord Craig and Lord Bramall. I hope that membership of this House continues to be refreshed with the arrival of former Chiefs of Defence Staff. If I have one regret, it is only that more of them do not take part in debates.

However, the level of interest shown by your Lordships' House in this subject is, I fear, very different from that in the country as a whole. One of the main reasons is that there are now remarkably few people who have any first-hand experience of military life in any form. I believe that only two members of the present Cabinet have served in the Armed Forces. I doubt too whether there is a single official in Her Majesty's Treasury who has ever served. I shall welcome being corrected if I am wrong.

For the public, the Armed Forces in many parts of the country are largely invisible. Ever since they have been unable to walk-out in uniform, it is, as one retired senior service officer said to me, "almost as though British serving men and women are working in the vaults of the Bank of England".

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A high public profile for Her Majesty's Forces is of crucial importance for four reasons. Three of those reasons are very obvious. First, they are one of our greatest national assets of which, as a nation, we should be extremely proud. Secondly, it will not be easy in the highly successful economic conditions of this country at the present time to attract a sufficient number of good people unless they are aware of the role and performance of the Armed Forces.

Thirdly, echoing the words of the noble Lord, Lord Chalfont, the morale of our Armed Forces depends at least in part on the public perception of their functions. I do not believe that the media always contribute positively to that. Although I myself did not see it, I am told that last night there was a television programme about Goose Green which supports my aspersion on the media.

The fourth point is in some ways the most important, certainly in the context of the Statement on the Defence Estimates. The fight for financial resources is always to some extent a reflection of public perception and thus publicity. That can hugely distort the allocation of resources. I take an example which is far away from anything to do with defence; namely, the allocation of research funds for AIDS, which, as a result of powerful and emotional lobbying, was--it is now regarded fairly generally--quite disproportionate to expenditure on research into other diseases from which many more people suffer.

The Treasury has a long history of mistaken defence spending decisions. Indeed, one might almost say that the banners of Great George Street are emblazoned with defeats for Her Majesty's Forces. Sometimes, there is a Prime Minister to overrule such mistakes. Let me give an example. In the middle 1980s, the Treasury had been resisting expenditure on research into new technology required to keep our forces ahead of the IRA. In August 1988 the Sinn Fein/IRA bomb at Omagh barracks killed eight British soldiers and Mrs. Thatcher sent for the then Chief of General Staff, Sir Nigel Bagnall, and demanded to know what he was doing about it. He explained the battle with the Treasury and offered to send her a summary of the position papers. "No," she said, "I want the papers; all of them--today." The next day he was sent for again. It was clear that she had read the lot. "You are right," she declared. "You will get the funds. I shall tell the Treasury." They did. And that is why much of our equipment is so good today. That is what Prime Ministers are for.

Recently, there have been other mistakes. There was the now notorious attempt to contract out the maintenance of RAF aircraft. There was also the closing of recruiting offices, using job shops instead. I have occasionally tried to get people from job shops. Often I have been told by the manager, "Frankly, the people I have on my list are not the sort of people you would want." There has been the reduction of army bands, a small matter but related to the low profile forced on the Armed Forces in other ways.

There has been disbandment of the Junior Leaders' Regiment. There have been other things--small matters but nevertheless significant, such as having the right level

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of officer to perform the right functions, to which the noble and gallant Lord, Lord Bramall, referred. Yesterday we voted on the sale of Army quarters. I supported the Government, but with some doubt. A deal which nets the Treasury some £1.5 billion and returns to the military only £100 million to £200 million is not necessarily very attractive. Apart from that, I believe that the decision may be fundamentally flawed in purely commercial, not military, terms.

We should warn the Treasury that the defence budget of this country cannot be the main way of bringing the public sector borrowing requirement into the balance the Government want. There is simply not the scope for it to be done in that way. Frankly, I believe that most noble Lords will recognise that the main way to achieve that objective can only be through a fundamental reshaping of our welfare services so that sufficient is given to those in need rather than a surplus going to those who do not need it. That is a view which is beginning to be held across the political spectrum. I hope very much that we can get the Treasury to recognise this.

It is because of what I see as the lack of appreciation of the role and performance of our Armed Forces that, in a very amateur way, I have started to take a renewed interest in what is happening. I found most useful the briefings offered through the All-party Defence Study Group. I take this opportunity to thank my noble friend Lord Vivian for the energetic way in which he organises the programme and my noble friend Lord Howe for the facilities which his department provides.

I should like to refer to a recent visit that we made to Northern Ireland where I learned three lessons. The first was that the training, discipline and equipment of our forces is of the highest order; secondly, that they are in a position to check anything that Sinn Fein/IRA try on. By definition it is axiomatic that it is never possible to checkmate a criminal terrorist organisation. But all that Sinn Fein/IRA and their loyalist analogues can do is to erode the quality and standard of life of the people of Northern Ireland. They cannot overthrow the rule of law.

Thirdly, there is no doubt that one positive spin-off from the dark quarter century in that unhappy Province is that it has enabled our Armed Forces, in particular the Army, to become probably the finest peacekeeping force in the world.

I wish to make one wider point. As we have heard, the burden on our forces in their present roles is huge and unsustainable. I do not wish to reduce the burden; I wish to increase the Armed Forces. I believe that this country has an unrivalled opportunity of contributing to world peace in this way in the post-Cold War period. We have the advantage as a veto member of the Security Council of being sure that we are never involved in any UN military operation of which we disapprove. I hope that all parties and all governments will always fight to retain that beneficial veto position for Britain. If we are to fulfil a greater role, the funding cannot all come from the British taxpayer. It must also come from those other nations who would wish to see us performing that function paying their fair share of the cost.

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1.41 p.m.

Earl Attlee: My Lords, given the number of defence debates that we have had this year and the number of times that I have spoken on defence, there is little need to remind your Lordships of my interest; but I still do so.

With regard to yesterday's debate, I am pleased for the Minister that he had a successful outcome. I accept that the Government may have had to pull out all the stops. I used to be fairly relaxed about the backwoodsmen as I saw them as part of the constitutional backstop. I am not so sure now. My complaint to them is that few of them listened to the debate and were, therefore, unable to note that there were only two Back-Bench spokesmen supporting the Government. One can understand their reason for supporting the Government. Noble Lords who are regular attenders frequently vote without listening to the debate. But there is a difference. Regular attenders maintain dialogue with Peers outside the Chamber and can be advised on both sides of the argument.

Many noble Lords have addressed the issue of morale and operations. I support and echo those views, but I intend to address other matters. During yesterday's debate I mentioned the possibility of leasing the vast range of vehicles and equipment needed by our armed services. Most of the equipment is currently bought outright. However, progress is being made with what is termed the "white fleet"--that is, staff cars and minibuses. There is also leasing of some non-operational heavy logistic vehicles.

There are problems with the current system of buying outright and performing non-operational or exercise maintenance in-house by MoD employed civilians. The equipment is bought at the minimum cost while still, we hope, able to do the task. The good news is that more attention is being paid to in-service and full-life costs of equipment, but the first cost is still an overly important consideration in procurement decisions.

I urge the Minister to consider more use of some forms of lease hire contract for the "green fleet". The green fleet involves the operational vehicles. The contractor would supply the equipment that would meet the staff requirement. He would then be paid on a time and mileage/use basis as long as the equipment was serviceable. First-line repairs would continue to be done by the holding unit. If second-line repairs became necessary--and this would be outside of exercises and operations--the equipment would come off hire within a few days. This would provide a tremendous incentive for the contractor to have the equipment repaired quickly. Frankly, at present the equipment takes weeks to be repaired.

I see the advantages as follows. The manufacturer would design the equipment for the lowest whole life costs rather than the lowest initial purchase cost. Equipment would not be kept in service beyond its economic life. No civilian haulage firm operates trucks for 20 years and then goes for a lifetime extension--but the Army does.

The contractor would also have a large input into the training of personnel involved in the operation and maintenance of the equipment. I am afraid to say that

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sometimes new equipment is issued to units without training all the personnel and sometimes without literature in place. It would not be in the contractor's interest to allow that to happen.

The final advantage is that the MoD would no longer need to find the capital costs of the equipment. It would purely be paying on an as-it-uses it basis, similar to the situation with defence housing.

I am not suggesting that the leasing arrangements would apply in full during an operation. Clearly that is completely impractical. But there is experience of how these arrangements might work. The Army in Germany has leased Mercedes Benz plant transporters which are now operating in Bosnia, and the arrangements work well. If in peacetime the contractor will incur a severe and automatic financial penalty, it is likely that the equipment that he will design will work well in operations.

A few years ago the MoD ordered a fleet of 1-tonne four-wheel drive trucks from a small scale vehicle manufacturer. Unfortunately, the vehicle has a serious braking problem that is almost incurable. I am fairly sure that, regrettably, the manufacturer will have been paid for the vehicles, although no doubt he will still be discussing the warranty claims with the MoD. Meanwhile, the MoD has a fleet of 1-tonne trucks that it cannot use. If the vehicles had been leased to the MoD, it would simply have not paid for them.

The good news--the Brownie-point for the MoD--is that the same manufacturer was vigorously complaining that he did not obtain an order for the Demountable Rack Offloading and Pickup System (DROPS), to which the noble Lord, Lord Williams, referred. Thank God for that! That would have been an order for about 1,000 vehicles at £100,000 each. The order was placed with Leyland Daf, and it is an extremely good vehicle. But a similar technical problem on the DROPS vehicle would have been a disaster.

I listened to the speech of the noble Lord, Lord Marlesford, with great interest. I agree with much of what he said. However, he referred to the problems that he had with the maintenance of the Tornado aircraft. Yes, the contractor did seriously damage the aircraft. Even worse, the contractor acted disgracefully. But civil airline operators have expensive aircraft and they frequently contract out their maintenance.

Another factor that we should not forget is this. Internally, the MoD will have similar serious maintenance failure where equipment will have been damaged, but the matter will have been hushed up and suppressed. We would never know about it. Because a commercial contractor was used, the matter came out into the open and we found out about the problem.

I wish briefly to touch on information technology (IT). The pace of change of IT is incredible. The power of the desktop PC doubles every 18 months. But at unit level, the IT systems of the Army are Stone Age--but UNICOM is coming. I do not know whether it will be any good, but what concerns me is that it has been several years in the development and implementation. Will it be effective and up to date when it comes on

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stream? The Minister needs to be aware that many officers and senior NCOs buy their own desk-top computers in order to be able to do their tasks effectively. I have to admit that there is a substantial purchase of PCs, but not enough.

I do not expect the Minister to respond now, or even later, because he is obliged to say that everything in the garden is rosy. But perhaps he may be aware of the problem and that it is incredibly difficult to solve because of the relative speeds of the IT world and the MoD, which are so different.

My final point concerns the MPGS. Despite effective lobbying by the Defence Police Federation, I can accept the view that the MoD police is an expensive option and that a trial scheme would be appropriate. But there is a specific concern that MPGS patrols, possibly armed, could be used to patrol outside the wire to look for mortar baseplates. They are a very serious threat. I am sure that we can understand the dangers of having armed MPGS patrols outside the wire. Can the noble Earl give me a categoric assurance that this will not happen, except in response to an apprehended or immediately imminent attack?

There is to be an MPGS trial at Chilwell. But is it the best place to trial the concept? ATSA is to move into Chilwell with large numbers of civilians. There is also much attractive stock at Chilwell. Perhaps the policing role of the MoD police would be more important there. But 18 miles away there is the Defence Animal Centre at Melton Mowbray, which may be a better option. There may even be others. The MoD police provide the armed guard during the day, while servicemen provide the armed guard at night. MPGS at this site would relieve regular servicemen of the onerous night and weekend guard duties. If by any chance the trial is not as successful as the Minister hopes, it would be easy to reverse a small-scale programme at Melton Mowbray, whereas it would be quite expensive to reverse it at Chilwell.

The Minister had no idea that I planned to raise this alternative, so I do not expect an immediate response. But I look forward to his reassurance about patrols outside the wire, because he knows of my concerns.

1.53 p.m.

Lord Ironside: My Lords, I believe that this year's estimates show clearly that the radical policies which have been adopted throughout the defence field over the past 15 years or so--in fact, since the Falklands War--have brought us to the point where powerful high-tech weapons and platforms are now virtually taken for granted. But, as the Estimates say, security does not come cheaply and our Armed Forces, as well as our defence industrial base, have had to endure painful changes. The noble Lord, Lord Williams of Elvel, speaking earlier, was critical of the defence industrial scene and its management. But I am glad that there is now an excellent customer-contractor dialogue in place; demonstrator programmes proceed successfully and there is more spin into defence from industry now than ever before. The need for a diversification agency is questionable and I believe that the European Union

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KONVER (conversion programme) which is now in place, has a good input into the UK, and that surely is sufficient from the point of view of diversification.

However, I believe that the steps forward that have been taken in bringing the front line up to the highly tuned state of effectiveness and versatility that we now see, and which we have come to count on, are bringing with them some of the measures of stability that we want. Unfortunately, the front line is still overstretched and that does not help to achieve the steady state we want.

Looking at the scenario more broadly, the procurement system is producing powerful weapons and platforms that can be relied on to perform and that surely is a measure of stability. As the noble and gallant Lord, Lord Bramall, said, this brings benefits to morale and efficiency, which is what we are looking for. Rapid reaction forces, particularly the Joint Rapid Deployment Force, due to become operational on 1st August, have grown out of an orderly process and are no longer the product of panic measures. That is surely another sign of stability emerging which brings benefits that we want. Combined and collective operations are now effective instruments of defence policy. UNPROFOR, IFOR and Exercise Purple Star demonstrate yet another element of stability, which is becoming a feature of defence and bringing benefits with it

From the collective defence point of view, I believe that it is right to continue building our defence posture around NATO. I congratulate the Government on the initiatives that they have taken during our presidency of the Western European Union, in giving it some operational teeth. The WEU needs machinery for planning and political control of European operations in tandem and not in conflict with NATO, so that it can draw on that organisation's assets for the Petersberg missions. An excellent start has surely been made in establishing a situation centre which is now operational; launching an exercise programme; commissioning a strategic mobility study and bringing together chiefs of staffs to look at the operational issues.

As observer nations have been drawn into the operational scene, I ask my noble friend Lord Howe what assurances he can give the House that Ireland, as an observer, is likely to carry forward the UK initiatives on the WEU front during its current presidency of the Council to improve practical co-operation between the European Union and the Western European Union over military-assisted operations, or are we going to have to wait until the new year, for the next presidency, for further progress to be made?

Overall, the stability that we are looking for in defence is being achieved, I believe, through the investments that we are making in such things as new management strategy, competition policy, quality assurance, prime contracting, market testing and many other initiatives, which are bringing added professionalism to the Armed Forces. What we encounter along the way are, however, the pressures on servicemen and women and all individuals in the MoD connected with them, which cannot be ignored. Platforms and weapons do not work unless they are

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properly manned; they cannot be used without trained manpower and they cannot be deployed without the support services needed to back up the fighting units in the field.

There are many pressure points, most of which are the result of now having 80 per cent., perhaps slightly more, of our Armed Forces in the UK, which in turn means that the home bases and the defence estates have to bear the strain. Probably the worst affected service is the Army because of the draw-down from Germany, which, I understand, is pretty well complete. But the pressure point now in the public eye is, of course, the married quarters estate. The relief valve is steaming and ready to blow unless it is held down somehow.

My noble friend Lord Howe sanctioned a visit for me at short notice last week to the married quarters estate at Colchester where I was able to meet those responsible for managing what is now known as Defence Housing Executive Group 17, covering some 2,400 quarters at Colchester, Winbish, Wattisham and Woodbridge. I also met some 75 members of service families from the patches. I toured the Colchester patch as well. It has been eaten away by a high density commercial enclave and by housing association blocks. Valueless, sub-standard housing, which will not attract mortgages, exists. But it is desirable real estate. As Savills will no doubt say in their survey, as they know every inch of Essex and Suffolk, the Colchester patch is in a sought after area with all the amenities of a major town on hand and with frequent rail services to London and the Continent. It is within easy reach of the M.25 and adjacent to the Stour Valley and Constable country. Fears arise over the dilution of military population on the patch and security problems. The wounding of Sergeant Mudd is still fresh in local memory on that particular patch at Colchester.

There was an air of uncertainty, bewilderment, apprehension and, not least, suspicion about the sale and leaseback arrangements. Going with this there is some misunderstanding, too, but that is not surprising in view of the way the consultation process has apparently been conducted.

My noble friend's department has been working on the married quarters problem for years, so I wonder why so much rumour, uncertainty and even disinformation are floating around when the MoD is able to take servicemen and servicewomen into its confidence about its plans.

There is a 50 per cent. turnover in married quarters each year at Colchester, averaging 10 families a day, so if there is a communication problem then perhaps the Defence Housing Executive and the Army welfare services and the chain of command should do more to help get the message across.

Many of the issues were aired in this Chamber yesterday, so there is no need for me to go over the ground again. I supported the Government in rejecting the amendment at the Report stage of the Housing Bill because the sale and leaseback deal will work. The MoD has all the bargaining levers it needs to realise a successful outcome and to safeguard the future for the country and the service families. The most important

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thing is that the Government should be able to wave the golden share of veto into the faces of the new owners at every twist of the cards.

The £100 million plucked out of the Treasury coffers for upgrade is regarded by the families at Colchester and elsewhere as totally inadequate and has been linked with other suspicions about rentals and well-being for the future. If the MoD has decided to wash its hands once and for all of ownership in the provision of married quarters, then surely it must wash the slate clean and endow the Defence Housing Executive with sufficient funds to ensure that the outcome of the upgrading process is a success.

If, as I understand, £300 million is already in the long-term costings for refurbishing of housing on the 700 sites, and if we have been assured that £100 million is more than enough for the upgrade, how can my noble friend be so sure that these sums will be sufficient to meet the Defence Housing Executive's needs during the five to seven year period? Or will there have to be a lot of juggling between accounts to phase in upgrade with refurbishment, sell-offs and exchanges?

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