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Lord Jenkins of Putney: My Lords, before my noble friend sits down, perhaps I may put one point to him. He was inadvertently absent from the Chamber when I made my point about the decision to declare the nuclear weapon an illegal one. I rise now not to ask him to reply to a speech that he did not hear, but to make the point that I hope and believe that the noble Earl will not allow this debate to end without a reply to that important subject.

Lord Howell: I am obliged to my noble friend. I have made a note to make that point but he has done it himself now. I hope that the noble Earl, Lord Howe, will take on board that judgment and let us have a government view.

I mention very rapidly some other matters being dealt with by our scientific committee which are of great importance. One is landmines. Our colleague Mr. Frank Cook MP has drawn attention in the other place to the dastardly injuries and deaths from landmines. I am sorry that the Government now say that their policy is to have self-destructing landmines. I do not know quite what that means or the time period after which they would self-destruct. In my view we should agree internationally to ban the manufacture and production of all landmines. That is of great importance.

We also use lasers as weapons of war, which can blind and do great damage. They should be outlawed. I do not have time to go into greater detail but mention that in passing.

I undertake, with my noble friend Lord Williams, to make sure that the concerns of the noble and gallant Lord, Lord Bramall, about the effect of Labour's new policy, which he expressed so cogently and, I may say, very properly, are brought to the attention of our defence and Treasury spokesmen in another place. I simply comment that we continually and understandably attack the Treasury, but we should put the matter in political terms and talk about the Chancellor of the Exchequer. I hope that in a Labour government the Chancellor of the Exchequer is more in charge of Treasury policy than seems to be the case today.

We have had an excellent debate, though limited, being on a Friday, as was said by the noble Lord, Lord Boyd-Carpenter, and other noble Lords. From these Benches I express appreciation to all noble Lords who have taken part. We have tried to raise national awareness of the seriousness of these issues. I suppose that that is all that we can expect to achieve on a day such as this. At least we have made some contribution to public awareness of the great importance of adequate defence and of the morale of our forces. I believe that any defence policy has to rely upon that fundamentally important matter.

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3 p.m.

Earl Howe: My Lords, I am pleased but perhaps not unduly surprised that we have managed during this debate to cover a wide range of current defence issues. What causes me no surprise is the depth of experience and wisdom which your Lordships bring to these matters. I have some sympathy with other noble Lords, especially my noble friend Lord Boyd-Carpenter, who regard it as regrettable that we find ourselves debating the defence estimates on a Friday. The decision in that connection was not in fact mine. However, no doubt your Lordships' comments will be read with care by those in the usual channels who carry responsibility for these matters.

The noble Lord, Lord Williams, made, if I may say so, a lively but somewhat prickly speech. His criticisms of the Government flowed fast and copiously. Where he was not incorrect in what he said he was, I fear, guilty of over-egging the rather lumpen policy pudding which his party is now cooking up.

The noble Lord expressed his party's belief in the need for a defence review. Here I align myself with many of the remarks made by the noble and gallant Lord, Lord Bramall, towards the end of his speech. We see no need for a defence review. We live in an uncertain world and the speed with which the strategic situation has changed demonstrates how such a review could be out of date before it was ever published. A review would effectively amount to a period of suspended animation for our military planning, procurement decisions and the training of our Armed Forces. Defence planning is not a short-term matter. The lead times are enormous. What we need is a more flexible approach to cope with the fluid strategic setting that we face. In the restructuring programmes put in place following the end of the Cold War, we proceeded through a series of measured and carefully considered steps. The force structures that emerged were derived from a comprehensive assessment of the changing risks of war and the likely evolution of NATO in response to those changes.

Naturally we shall continue to keep our plans under scrutiny and wherever possible, as recent equipment orders have graphically demonstrated, we shall enhance our military capabilities. We aim to achieve within available resources a balanced defence programme which is appropriate to the demands placed on the Services by our commitments both at home and overseas. That, I suggest, is the responsible way forward. I have to say that it is noticeable that the party opposite is silent on the resources that it would devote to defence were it to achieve office.

I said in my opening speech that the Government regard NATO as the linchpin of European and Atlantic defence. This was a theme picked up by a number of noble Lords, in particular on NATO enlargement. The noble Lord, Lord Mayhew, questioned the rationale for a NATO enlargement. We seek to construct an improved security structure in the whole of the Euro-Atlantic area. This means enhancing the security and stability of all European nations, not just those who may in due course join NATO. We can do so by

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consolidating democratic reforms, discouraging ethnic and territorial disputes, encouraging countries to denationalise their defence industries and promoting democratic control of the military. It is those aims which, if achieved, will contribute to world stability, as we witness the delicate flowering of democracy in former Eastern bloc countries.

But there can be no question of diluting the military effectiveness of NATO as it is currently configured.

Lord Kennet: My Lords, perhaps I may ask the noble Earl a question on that point. If I understand him aright, it is the British Government's policy that NATO should include all European countries. That includes Russia. Is it government policy that the Russian defence industry should be denationalised; and, if so, have the Government purchasers in mind?

Earl Howe: My Lords, let me explain to the noble Lord how our thinking has evolved on these important questions. Enlargement is an issue which has occupied much thinking over recent months and will continue to do so over the months ahead. This work is making steady progress. The NATO enlargement study is a significant and useful achievement, and its conclusions have been generally welcomed, although not, I may say, by Russia. Work this year is concentrating on deepening the military and political dialogue with interested partners so that both sides can gain a better understanding of the detailed implications. We are also concentrating within NATO on the changes that the alliance will need to make in order to remain effective when it enlarges. No decisions have been made yet either nationally or by NATO on who will join.

Detailed work is likely to begin after the December ministerial meetings. We shall not be in a position to name names until next year. The handling of Russia is an important part of the process. Russia strongly opposes enlargement in principle, and that will not change. It is important to stress that Russia has no ministerial veto. We are seeking to develop a substantial, co-operative NATO-Russia relationship in parallel to the work on enlargement.

NATO's performance in Bosnia is a matter of great credit to it. It is working side by side, and successfully, with a number of Partnership for Peace nations. The spotlight for peacekeeping will continue to point to that region of the world for some months to come.

I agree with the noble Lord, Lord Mayhew, that we should never overlook the potential for the Middle East to present us with new instability and regional conflict. This may be compounded by the proliferation of nuclear, chemical and biological weapons and their means of delivery. We continue to make considerable efforts in the field of arms control and non-proliferation.

The noble Lord, Lord Mayhew, also referred to the recent negotiations to effect a comprehensive test ban treaty. Like him, Her Majesty's Government were extremely disappointed that we were unable to negotiate an effective, verifiable and comprehensive test ban treaty commanding universal adherence. We consider the treaty of great importance and we shall continue to negotiate actively to conclude it.

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The noble Lord, Lord Howell, referred to proliferation. The Government welcome the unconditional and indefinite extension of the nuclear non-proliferation treaty. That will send a clear signal to potential proliferators that any such activities will not be tolerated by the international community. The United Kingdom has already made significant reductions in nuclear weapons compared to the 1970s. We have said that when the Russian-US arsenal is measured in hundreds rather than thousands we shall respond to the challenge of multilateral negotiations.

The noble Lord, Lord Jenkins of Putney, referred in a very interesting speech to the recent decision by the International Court of Justice on nuclear weapons. We shall study this very complex decision carefully. The court did not rule that nuclear weapons were illegal. It concluded that in international law there is no comprehensive prohibition on the threat to use, or the use of, nuclear weapons. On the key point of whether the use of, or the threat to use, nuclear weapons would be unlawful in all circumstances, the court was unable to offer a definitive opinion.

However, I may make these points. The opinion of the court has no implications at all for our defence policy. We see no reason to change the fundamental elements of UK and NATO defence policy. Like the court, we believe that the use of nuclear weapons would be considered only in self-defence in extreme circumstances. For the UK, self-defence must include collective defence. I believe that it is right for me to emphasise to the noble Lord, Lord Monkswell, that nuclear forces continue to have an essential role within our defence posture and that of NATO and that we shall retain them as long as they are necessary for our security.

My noble friend Lord Ironside referred to our presidency of the Western European Union, which we held until 30th June. We made good progress on our agenda for the presidency, which focused on giving the WEU operational capabilities. That is not a short-term goal to be finalised within the space of a six-months' presidency. But we want now to make concrete progress with the operational development of the WEU. The establishment of a situation centre in the WEU headquarters is a key requirement to enable the WEU to monitor and control operations. We have provided UK staff and expertise to assist the WEU in planning this facility, which should be operational in June.

For us, the main presidency initiatives were to establish a coherent exercise policy, to offer the UK's Centre for Operational Sea Training and Joint Maritime Courses as a facility available to the WEU, and to accelerate work on strategic mobility for the WEU to help ensure that members will be able to deploy the forces required for any operation.

My noble friend Lady Park of Monmouth illuminated our debate, as she customarily does, with her deep knowledge of Russia. Russia has undergone a remarkable transformation; we very much hope that the reforms seen in that country will continue. Military reform has lagged behind other spheres of Russian life;

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we would welcome progress in this area. As my noble friend intimated, the Russian Armed Forces do have their problems but there is no doubt that they still represent a considerable force.

I do not wish to underplay Russia's importance to European security; Russia is a key to it. The future course of reform in Russia will inevitably influence our own defence planning. We believe that it will be in Russia's interest that President Yeltsin should push ahead with reform and co-operation with the West. There is a small UK bilateral programme which concentrates on a number of ventures, such as exchanges between middle-ranking young officers, re-training of retiring Russian officers in German-built centres in Russia, and attendance at respective staff and training courses.

The noble Lord, Lord Howell, asked about the withdrawal of IFOR from the former Yugoslavia. The UK intention remains to withdraw our IFOR contingent at the same time as our NATO allies at the end of the IFOR commission. The guiding principle has to be "in together, stick together, out together". It is too early to speculate on what, if anything, might follow IFOR. The priority now is to concentrate on the tasks before the elections. Any suggestion of an extension of a military presence would be counterproductive and lead to a loss of momentum in these very important weeks and months.

A subject which was raised by many noble Lords--including the noble Lord, Lord Williams of Elvel, my noble friends Lord Lyell and Lord Boyd-Carpenter, and the noble and gallant Lord, Lord Bramall--was that of undermanning. The Army is currently some 4,000 soldiers under strength. This state of affairs is unacceptable and we are not complacent about it. Various factors have contributed to the current position, some beyond our control--for example, the demographic trough of 17 and 18 year-olds and more youngsters going into higher education, which can only be welcomed in another context.

I do not agree with my noble friend Lord Forbes that any weakness of morale is a cause of undermanning. I believe that morale is strong. A part of the problem stems from incorrect public perception of the Armed Forces as an industry in decline following the reductions in manpower numbers over the past few years. That is unfortunate, but is not disastrous, and we have launched a range of initiatives to correct it.

For recruitment these initiatives include a large increase in the advertising budget, a delay in the closure of some Army careers offices until the full benefits of recruiting from job centres are realised, and the payment of a bounty to soldiers who enlist a friend into those arms affected by the most significant manpower shortfalls. The implementation of these measures is at an early stage but the initial indications are encouraging. I have no difficulty in stating that recruitment is now the Army's highest priority.

To reverse undermanning, we must also improve our retention rates, particularly of young soldiers. We have therefore introduced a retention bonus for soldiers in undermanned arms who choose to serve beyond the

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minimum three years, and a bounty for suitable former soldiers from those arms who agree to return for further service. We are also examining ways of improving soldiers' opportunities to obtain skills and qualifications that will benefit them in later civilian life. Undermanning is a real problem. We are confident of beating it, but I stress that, despite all that has been said today on the subject, including the comments about operational tour intervals made by my noble friend Lord Vivian, undermanning does not impede the ability of our Armed Forces to fulfil the operational tasks that we set for them.

My noble friend Lord Vivian also expressed his regret at the demise of the Junior Leaders Regiment. The Army is examining the possibility of some form of junior entry aimed at 16 year-olds. I agree with my noble friend that that is an understandable aspiration, but we have to balance the potential benefits against the costs of extra facilities and the longer training period. No decision on that issue is likely before next spring.

Perhaps I may express my support for the theme which the noble Lord, Lord Chalfont, and my noble friend Lord Forbes chose to take for their speeches. I refer to morale. Morale has been defined as that quality which, in the final analysis, causes a serviceman to lay his life on the line in battle. It is morale which makes a difference between winning a war and losing it. I do not believe that any defence Minister can fail to be mindful of the vital part which morale plays in the effectiveness of our Armed Forces. Morale today is good, but we should never be complacent and we should always remember that it is a plant which need nurturing.

The attractiveness of the services as a career will hinge critically in the years to come on pay and conditions. In that context the noble and gallant Lord, Lord Craig, referred to the Bett Review. Sir Michael made over 150 recommendations. We have worked briskly to evaluate them, with the fullest participation of the services. The noble and gallant Lord will know better than most that we cannot make snap decisions on matters which will influence recruitment and retention priorities that are too important to get wrong and on which your Lordships have rightly placed much emphasis today. We aim to achieve a balanced package so that we can attract and keep the best people. We hope to announce our progress shortly.

The noble Lord, Lord Wallace of Saltaire, referred to equal opportunities in the Armed Forces. I know that he will welcome the fact that very few roles now remain closed to women. The policy of the Armed Forces is that in future women will be excluded only from those posts where their presence could impair combat effectiveness. Perhaps the most significant development in the expansion of career opportunities for servicewomen has been the opening to women of combat roles at sea and in the air. The Army is currently considering the possibility of further widening career opportunities for female personnel. That includes a review of the areas currently closed to women.

It has been made quite clear throughout the services that racial abuse or discrimination of any sort will not be tolerated. The three services are committed to a range of measures to increase ethnic minority recruitment.

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A number of noble Lords referred to the sale of the married quarters estate. Following our debate yesterday and in view of the time, I hope that the House will forgive me if I do not reply now to points raised by noble Lords, particularly my noble friend Lord Ironside. Let me say simply that an awful lot of nonsense has circulated about the sale, particularly with regard to the financial aspects which were referred to in yesterday's Times. However, I can reassure my noble friend that the ring-fenced sum of £100 million which the MoD will receive from the sale, added to the budget that we already have, will be sufficient to carry out the upgrade programme that we are planning.

The noble Lord, Lord Kennet, asked about the effect on the defence budget if the sale did not proceed. He will know that the proceeds of the sale will go direct to the Exchequer. In that sense, the defence budget will bear no risk. We have not considered in any way what might be the effect on the public spending round as a whole if those Exchequer receipts were not to materialise. However, it would be idle to pretend that such a sum as we expect to raise would not be significant to my right honourable friend the Chancellor as he shapes his Budget plans.

The noble Earl, Lord Attlee, and the noble Lord, Lord Kennet, referred to equipment procurement policy. I shall reflect carefully on what both noble Lords said. The statement reflects the key conclusions of last year's major review of defence procurement policy, which was published on 7th February 1996. Value for money remains the central objective and competition is still the linchpin of our procurement policy. I say to the noble Lord, Lord Kennet, that we fully recognise the need to take more systematic account of defence industrial factors if we are to continue to secure value for money in the longer term. Cost effective collaboration, usually within Europe, will be vital, but we will not overlook our trading and collaborative relationship with the United States. We want to continue our consultation with industry as to how the UK can make the most of its investment in defence R&D to underpin future technology needs, taking into account the Technology Foresight Programme, and how we can help UK companies in appropriate ways to participate to best advantage in European and US defence industry restructuring.

The White Paper brings out several points in this area. We make clear that restructuring is primarily a matter for industry. There may be ways in which the Government can assist the process in the national interest without departing from that general principle. We need to look carefully at our arrangements for collaboration. When it is well structured, defence collaboration offers several benefits: improved value for money and potential new markets for British firms. The liberalisation of the defence market is in the industrial interests of the UK. Our export success demonstrates the competitiveness of UK industry. We continue to press for this in international fora. I say to the noble Lord, Lord Wallace, that UK entry into the Franco-German armaments agency is a logical extension of existing collaborative links with other partners. It offers an opportunity for the UK to push for open procurement practices among the biggest arms procurers in Western Europe.

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I repeat to my noble friend Lord Forbes that our Armed Forces have never been better equipped. For example, the age of ships in the Royal Navy is younger now than at any time since 1918. It is not a failing of policy but rather a strength that an increasing proportion of our budget is being devoted to equipment. The fire power of our forces has never been greater. As my noble friend Lord Ironside has said, that benefits military capability and morale.

Before I leave the question of equipment I should like to deal with the question of the chartering of merchant ships raised by the noble Lord, Lord Howell. We have a duty to obtain the best value for money for the British taxpayer. Therefore, we charter merchant ships on the world market to meet our shipping needs. This provides a greater potential range of ships at a competitive price. Our sealift needs during the Gulf conflict and the subsequent operations have been successfully met through this open market approach. British shipowners are given the opportunity to put forward ships, but we find that in general British ships tend not to be offered as they are already fully committed to regular commercial trade. In appropriate circumstances all British-flagged ships, and foreign-flagged but British-owned ships, could be requisitioned. We regularly monitor the ability of the British fleet and its seafarers to support military operations based on the available data.

I close by re-emphasising one of the key themes of the 1996 Defence White Paper. Our Armed Forces are undertaking a wider range of activities around the world than ever before. They are properly configured and equipped for the tasks that we ask them to perform. This Government have remained true to their pledge to maintain strong defence--and the right defence--for the security of this country and the protection of our worldwide interests. Continued adherence to that pledge is our overriding care and duty.

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