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Lord Mayhew: My Lords, I wonder whether the noble Lord read The Times yesterday on this subject of financing the married quarters proposals. It showed, very persuasively, that the Government have greatly underestimated the rents they will pay at successive rent reviews. In fact a reasonable estimate is that at the end of the 25 year period the Government will have spent £10 billion in rents in return for their £1.6 billion of capital gain. Has the noble Lord seen this, and has he asked his noble friend for an explanation?

Lord Ironside: My Lords, the mechanics of the deal are difficult for anybody to work out, and we are here treading on territory which involves the confidentiality of the negotiations. I believe that the leaseback rental which the Government will have to pay will be discounted in such a way that it favours this particular type of sale and leaseback deal. I cannot say any more at the moment, but the deal is right and is a way of achieving the ends. The question is to make sure that it works. I hope that my noble friend can give the right assurances which will alleviate the fears of the families without having to breach the confidentiality of the negotiations, which of course are important.

The families are also concerned about the expected rent rises which, in their view, may be as much as 25 per cent. As yet no one knows the figures, but they fear that the rises will not be weighted in their favour to reflect the differences between properties on the commercial market and married quarters lettings. Although the Pay Review Body assesses charges on a rolling basis, there is suspicion that the wrong comparators will be used this time and assurances are being sought.

The fact that the MoD no longer links provision of married quarters with ownership does have implications for recruitment, retention and morale. If the MoD is clear that the family plays such a vital role in service life, then it must make sure that its plans are fully

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disseminated and understood and that the safeguards are clearly spelt out. My impression at Colchester is that the messages have not yet got through.

There are many other aspects of the estimates which need debate and which other noble Lords have touched on. I believe that the balance between our defence roles must be maintained. However much the sovereign and collective threats change, it is our wider interests in the world that must be preserved.

2.7 p.m.

Lord Lyell: My Lords, I congratulate my noble friend the Minister on his excellent exposition of what we have before us in this traditional weighty document. I thank him also for his efforts to inform those regular members of your Lordships' all party defence study group who went not only to Northern Ireland but elsewhere. Indeed, one of the high spots of this parliamentary year--shared by, among others, the noble Lord, Lord Vivian, and my noble friend Lord Ironside--was a visit last autumn to Paderborn ranges to observe the light infantry and the Royal Highland Fusiliers give a marvellous display of competence and very high morale, referred to in the debate. We were interested on that visit in value for money; and the motorised transport that accompanied us was a good example.

We also observed a work-up for the Allied Command Europe Rapid Reaction Corps. Details are given at paragraph 5 on page 36 of the Statement. Many of us were impressed by what was happening under the excellent leadership of Lieutenant-General Sir Michael Walker. He is now putting into practice in Bosnia everything that had been sorted out there in Monchengladbach.

The main problem that always concerns me with regard to military affairs can be summed up in the one word, "overstretch". We owe thanks to the noble and gallant Lord, Lord Bramall, whose speech put into context and raised as a priority not only the continuing problem of overstretch but also the problems with regard to recruitment and training. Overstretch affects young soldiers, middle-aged soldiers and all ranks in our defence forces. It reminds all of us of the demands that we place on each and every member of the defence forces.

Perhaps I may draw your Lordships' attention to paragraph 505 at the bottom of page 73 of the Statement. The very interesting last sentence mentions,

    "the mistaken perception that the Army no longer needs new recruits".
Surely, it is indeed a "mistaken perception" from everything that we have heard today. I wonder whether it is one of the spin-off effects of the excellent document we discussed some five or six years ago, Options for Change. We do need new recruits.

I believe that my noble friend the Minister referred to the Rowallan Company, which has the specific task of bringing young men--and, for all I know, young women as well--up to the physical standards required so that those young people can enter the defence forces and do the job for which they are required and which we demand of them. Indeed, their duties in various branches of the defence forces will require those standards of them.

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I recall visiting with the all-party group the Royal Marines Training Centre at Lympstone some two years ago. Among the unsung heroes, of whom there are thousands, as can be gathered from the Estimates which we are considering, I pick out the staff at Lympstone as well as those of the Rowallan Company who do us an enormous service in building morale and in encouraging young people to meet the fitness standards that are so desperately needed. I believe that both those institutions strive to show the commitment and drive of their young recruits.

A short while ago we received helpful briefing from one or two Ministers, including my right honourable friend the Secretary of State. One of the points mentioned was the qualities that we require of those "missing" recruits mentioned at paragraph 505 on page 73. The first thing we require of those recruits, who are required for all branches of the Armed Forces and particularly for the infantry as well as the Royal Artillery and, I understand, the Royal Armoured Corps, is that they match up to the physical standards I have just mentioned. Secondly, we are increasingly demanding more brains of them--or perhaps I should say, if I may use this word in your Lordships' House, "nous".

I recall a briefing of last year from the commander of the land forces for the Army. He mentioned that the two qualities of brains (or nous) and initiative were particularly evident in the Army of today. He said that there was no question but that the enormous success of our Armed Forces in Bosnia was due to 25 years' experience in Northern Ireland. That scenario has demanded that young men of 21, 22 and 23 take initiative and, above all, that they get it right. They do so thanks to the training they have received, both their basic training and what I would call their "graduate" training together with the support and the on-the-job training they have gained within their units and in Northern Ireland. I believe that the views of that commander have been well proved.

Those qualities do not exist only in the regular forces; they spill over into the reserve forces. It is very good to have support today from the noble Earl, Lord Attlee. Your Lordships will know that the noble Earl is a member of the reserve forces. I am sure that he is a very much cherished and valued member of his unit.

At home in Scotland I have knowledge of the activities of some young soldiers who are paramedics. I am astonished at their commitment and drive. They spend every other weekend training. Your Lordships will appreciate that quite often in winter the glens of Angus are not the kind of place in which young soldiers want to spend their weekends training. Weekend in and weekend out one sees young reservists. They are perhaps somewhat comparable with your Lordships. We are the amateurs of politics, although I hope we work in a professional way. The same is true of the young paramedics of whom I speak.

The other unsung heroes are those mentioned in paragraph 608 on page 89 of the Defence Estimates. Thanks to the all-party defence study group, a visit was made to a former Royal Air Force station at

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Wethersfield in rural Essex. We spent a fascinating day observing the training of the Ministry of Defence police and guard force. I hope that my noble friend will be able to insist on the continuation of the high standards of training that we saw on that occasion. I hope that he will convey to the Ministry of Defence police and the guard force how much we appreciate their efforts. When we go to such places as Porton Down and the submarine bases on the Clyde, we very much appreciate what they do. It is encouraging to see that those bases are quietly, discreetly and very professionally watched over.

I conclude by returning to the subject of overstretch. I am reminded of the following happy poem:

    "O it's Tommy this, an' Tommy that, an' 'Tommy, go away'; But it's 'Thank you, Mister Atkins,' when the band begins to play--" Those bands, be they in Northern Ireland, Bosnia or elsewhere--who knows--are playing with increasing frequency today. It was my noble friend Lord Vivian who considered that the Army, even with its present duties, required a substantial boost in the number of personnel. When one thinks of Bosnia, what next? Your Lordships may remember the events of 1982. When we were told that the Falkland Islands had been invaded it was thought to be an April Fool's joke. One never knows. Whatever is required, it is the men and women of our defence forces who are asked to plug the gap and deal with any problems that may arise. Today, to each and every one of them we send our thanks. I am sure that those in your Lordships' House are grateful for all that my noble friend the Minister is doing. I look forward to hearing what else he has to say.

2.17 p.m.

Lord Kennet: My Lords, I apologise for not having put down my name to speak in time. I shall confine myself to my four minutes.

I should like to urge one matter on the Government and ask one question. Both concern the same subject. I refer to the enormous arms purchases which amount to several billions of pounds that will occur in the fairly near future. I shall not bore the House by being specific. Like all major arms purchases, they have to be procured in part internationally. They have to be manufactured partly in this country and partly in friendly countries. Of course, the Government will look for the best military value for the buy. One can trust them to do that. I hope that they will also look at the interests of British industry. I am not so confident that they can be trusted to do that, but I hope so.

Will the Government also consider the general foreign policy and international security policy of this country in making their choice? They can turn either to the United States or to the countries of continental Europe to set up the relevant consortia, deals and arrangements for shared manufacture. Will they choose the United States, over whose foreign policy and international security policy they have no influence, or will they choose continental Europe, whose foreign policy and international security policy this country is making all the time, jointly with others in the European Union and the Western European Union? Whatever we buy will tie us in some measure to the foreign and

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security policy of the country from which we buy it. Lest we think that we have some influence over the United States in this field, I ask the Government to consider the case of Sir Patrick Sheehy and Mr. Pennant-Rea, who have just been excluded from US territory as if they were common criminals.

I come to my question. In the famous debate yesterday afternoon the point was made most clearly by my noble friend Lord Callaghan that it was unlikely the Chiefs of Staff would have given their consent--they were asked twice and said yes: for good measure, evidently, the Government asked again and they still said yes--to the sale of service housing unless they had been told that their failure to do so would mean that the money would have to be found at the expense of something else that they wanted. My question is this. Was that something else these large arms purchases or a part of these large arms purchases? One can so easily imagine the Chief of Staff saying, "Oh, my God, if we cannot have the housing we must at least have the weapons". Was that the case? I feel sure the House will listen carefully to whatever answer the noble Earl may give us.

2.20 p.m.

Lord Wallace of Saltaire: My Lords, this has been a good debate. We have some chance of not being here for two days over the weekend so I shall try not to detain your Lordships too long.

I would like to start by talking about the budgetary issue. I was struck, in listening to the opening speech of the noble Lord, Lord Williams, by the fact that on occasions he implied that the Labour Party would, indeed, spend more on defence than the present Government. If I heard him correctly, he said something like this: "We will make good our promise to provide the resources". I found this a very honest defence White Paper. I would imagine that, whoever wins the next election, no party in government would spend more on defence. I also imagine that, whoever wins the election, whether my party is part of whatever emerges from the election or not, the then government will not cut very much from the defence budget. We operate within very narrow bounds. There are those on the right of the Conservative Party who are in favour of cutting taxes, cutting spending and cutting everything else, but not spending on defence and, above all, on the Royal Yacht; but that I think is only a minority view.

What we are talking about is creating a balance; looking for savings which will free resources within the current budget for other tasks. In this context, what the defence White Paper sets out in terms of moving towards military integration across the three services in the permanent joint headquarters, the Joint Rapid Deployment Force etc. is exactly the right way to go. Reading the opening chapter of this document, my view that we need to move from a defence budget to a coherent external budget which covers all our spending on external relations was reinforced. I quote paragraph 102:

    "Increasingly, the employment of our armed forces has to be considered alongside, and interwoven with, the use of other instruments ... Our defence strategy has ... to be interleaved to a greater degree with our foreign and other policies in the pursuit of our national interests".

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What we have seen in the past two to three years has been piecemeal cuts--at one point in the British Council, at another point in the Foreign Office budget itself--without consideration of the overall impact of our external spending as a whole. I have seen something in central and eastern Europe over the past two or three years of the military assistance programme. I regret that the defence White Paper did not make more of, for example, the excellent work that senior British military officers attached to the Czech and Latvian ministries of defence have achieved in the past two to three years or the work we have been doing in training in those countries. I am conscious that the Foreign Office know-how fund has also been running courses for defence officials and military officers in those countries which are very much part of the same sort of exercise.

There is also a case for greater international integration as a means of making limited funds go further, including, to pick up what the noble Lord, Lord Marlesford, said, internationally integrated budgets which compare costs and contributions across different countries. We have nothing to fear from this. But let us compare the budget in Britain, in which the current 3 per cent. of GNP is intended to go down to some 2.7 per cent. by the end of the century, with Italy, which spends 1.9 per cent., with Spain, 1.7 per cent., and with Germany, 1.7 per cent. If we then ask ourselves where the likely threats to the alliance come from, all of the likely threats are rather closer to Italy, Spain or Germany than to Britain. We therefore have nothing to fear from raising the budgetary issue overall in terms of common defence and security with our European as well as our transatlantic allies. There is more room for joint training and there is much more room for being proud of what the British achieve in this respect.

For years I have been struck with astonishment about the fact that we make so little of the extent to which German troops train in Britain. The Dutch/British amphibious force is in many ways the most integrated in Europe. However, the French and Germans, who talk about the Euro-corps, hardly know that it exists. In Portland we train naval units from other European countries but we do not make much of that either.

The room for symbolising what the noble Earl called the "European defence identity" exists. The French and the Germans know very well how to make symbolic gestures with their armed services. Indeed, on Sunday for the first time since 1938, British troops will take part in the quatorze juillet. The Scots Guards marched down the Champs-Elysees in 1938, German forces did so last year and British planes will fly down this year. I recommend to the Minister that the Ministry of Defence should consider how best to symbolise our own involvement in the increasingly integrated Armed Forces to explain to our public that that is the game in which we are now employed. After all, the defence White Paper notes that more than half the personnel of the Army are committed to the ARRC. Yet we are no longer talking about national defence; we are talking about a British contribution to a common effort.

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I was pleased to hear the noble Earl in his opening speech talk so much about the European defence identity. I was rather surprised that the noble Lord, Lord Williams of Elvel, did not mention the importance of the European context--

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