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Noble Lords: Hear, hear.

3.51 p.m.

Baroness Park of Monmouth: My Lords, I said in 1992 that Russian strategy was clearly to end up with a lean, mean army; a defence industrial capacity drawing in Western technology and maintaining its nuclear capacity; and a political climate calculated to disperse NATO's defence capacity. Significant conversion would not take place. The defence complex would prove impossible to dismantle. We would end with a Russia possessing the most sophisticated weapons and a major arms exporter, with inevitable consequences for arms proliferation. I asked then whether we should be facing Russia with a seriously depleted defence capacity, industrial and military. I ask that question again today.

Meanwhile, the Russians succeeded in destroying COCOM and gaining wide access through partnerships to Western technology. They are only now signing the START II treaty. They signed the chemical warfare convention only in 1997 and have as yet destroyed nothing.

What is the Russian defence position today? Russia is increasing its budget for defence procurement by 50 per cent this year. Total expenditure on defence and security now accounts for one-quarter of the federal budget and spending on national defence is to go up by 27 billion dollars. The budget for the navy has doubled. Meanwhile, Russia has exported more than 3 billion dollars-worth of arms in the past year, usually

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as part of a package of military aircraft, helicopters, ships and so on. Russia now has 1,600 defence plants employing 2 million people.

India, to which Russia sold the cryogenic rocket motors that enabled India to become a military nuclear power--and whose navy, army and air force are largely equipped by Russia--is taking delivery of yet more armaments. Time does not allow me to go into detail. Russia continues to target and supply Malaysia, and even today Indonesia, and not least China, with military aircraft, helicopters, submarines and destroyers. Now that sanctions have been lifted, Russia is to sell MiG 31s and multiple launch rocket systems to Libya. Russia has renewed its military agreement with Cyprus and of course continues its close military links with Syria. Russia is about to build nuclear power stations in Iran, with two reactors, and India, and will help Libya to reactivate its nuclear power station.

At home, Russia has successfully tested yet again its Topol M intercontinental ballistic missile, and Russia's strategic missiles troops have 20 new Topol M missile launchers on combat duty.

What has that to do with the UK's defence strategy, since it does not yet include any indication of a specific military threat to NATO--though the new military doctrine allowing the use of tactical nuclear weapons in local and regional conflicts is disquieting? The drive to spend more on defence procurement not only brings in money but creates a whole network of valuable relationships and points of influence in the Middle and Far East and in Latin America--and is helping to create all the conditions for the asymmetric threat. That drive is also enabling Russia to build fully equipped modern strategic forces and a powerful nuclear capacity. They will not need to be used. They will simply be there--able to create pressure when required. Moreover, Russia will be able to act through its many surrogates and allies, from Libya to China.

What will our situation be? Countering a strategic attack on NATO is one of the defence missions and the most important--but it is being treated on the old 10-year rule principle that led to our woeful situation in 1939. Then, as now, the Treasury was in the driving seat. It is comfortably argued that we shall foresee any threat in time to prepare, but by 2005 at the latest Russia will enjoy a formidable power to threaten while we shall be unable credibly to deter.

Because of the Government's inability to recognise the need to match resources to ever-growing commitments and the failure to stick to their own SDR, the Armed Forces are seriously overstretched and disgracefully under-funded. We are even dependent on Russian Antonovs to meet our strategic airlift requirements if we wish to deploy anywhere--including Mozambique--and our procurement programme is seriously underspent and overdue. Why?

Mr Putin is not a Yeltsin. He is a man who will know how to threaten, infiltrate and manipulate. I find it less than reassuring that he has welcomed the news of the

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formation of that grand organisation, the European Defence and Security Identity. Nothing could suit Russia better than to see NATO assets committed to some open-ended EU venture just when they are needed to deter. That is when the Russians will probe NATO on, perhaps, the Baltic states. We are told that is not a European army but that,

    "the bulk of military capacities for planning and conducting any EU-1ed operation will be drawn from the resources available for NATO, but the EU would be making the decisions on military matters and would take political control of crisis management operations".

The main representation on that issue at the moment is political, not military.

Our 15,000 men are to come from our NATO troops. We are already pinned down in Kosovo for what could be 10 years and we have been in Bosnia for six years. We are still in the Gulf and in Northern Ireland. The theory is that the EDSI will force other European countries to spend seriously on defence and to commit troops. How? Of the 2 million troops theoretically under arms, 700,000 are conscripts. Europe, other than France, could only produce a miserable 2 per cent of the troops in Kosovo. We and the French will bear the burden, for I do not believe the others will ever produce much more than a handful of admirals and stretcher-bearers. They cannot even produce policemen, for God's sake! I do not think that exercise will go far to reassure the Americans.

There was and is nothing wrong with some defence diplomacy--it is an honourable thing--provided there are the resources to pay for it. But to make extensive political commitments, then prove unable to meet them for lack of money and men--as could well happen if the UN takes up our promises in the Memorandum of Understanding, already an impossible commitment--seems likely to prove counter-productive. Far more important, mounting political commitments are making it impossible to train the forces in the ability to wage high-intensity warfare, which is their prime military task and one that cannot be achieved at the last minute.

Our defence forces are not primarily a political weapon, and should not be. Neither the Treasury nor the Foreign and Commonwealth Office are the right people to make the strategy. Action must be taken now, before it is too late, to address the military tasks and needs of our defence forces.

3.58 p.m.

Lord Chalfont: My Lords, I am especially grateful to my noble and gallant friend Lord Bramall for introducing this debate with such force and eloquence. Even as we speak, the Public Accounts Committee in another place is examining a recent report on defence procurement by the National Audit Office. This debate gives me the opportunity to return to a subject on which I have spoken many times in your Lordships' House, for which I do not apologise. It does not have to do with some of the weightier matters of strategy and resources that have been dealt with by other speakers. I would like to have followed them in talking

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about the continuing mismatch between resources and commitments, but instead I will return to a subject that will be familiar to some of your Lordships.

The report of the National Audit Office, which was published last month, is entitled Accepting Equipment Off-Contract and Into Service; in other words, procurement. That is a comprehensive and valuable report which covers a very wide area of this aspect of policy. There is only one page of that report to which I should like to draw the attention of your Lordships. For those who may want to read the report, the reference is page 36. That gives a fascinating and alarming insight into the story of the Chinook Mk2 helicopter, especially the computer software called FADEC which regulates the flow of fuel to the aircraft's engines.

The report sketches the history of the helicopter. It points out that when the Chinook Mk1 was updated FADEC was installed, and in order for it to be given an airworthiness certificate it had to go to the Defence Evaluation and Research Establishment at Boscombe Down. That establishment carried out tests on the aircraft. In 1993 it advised the Ministry of Defence that it could not give it an airworthiness certificate because of,

    "the unquantifiable risk associated with the unverifiable nature of the FADEC software".

It concluded that it was necessary to rewrite the software. The software was rewritten and in 1998, five years later, the aircraft was given an airworthiness certificate.

All of that may sound like a fairly routine piece of military procurement, except for one matter. In the period between the refusal of Boscombe Down to give the aircraft an airworthiness certificate and 1998 when the certificate was issued something happened, and we all know what it was. A Chinook Mk2 crashed on the Mull of Kintyre in Scotland killing the aircrew and 25 members of the Northern Ireland intelligence community. No one knows why that aircraft crashed because there was no black box flight recorder and no survivor. Nobody can know what happened.

It has been said many times since by the Ministry of Defence and its officials that there was no evidence of technical or mechanical malfunction. That may be so, but it does not mean that there was no malfunction; only that there is no evidence of it. I do not claim that the FADEC computer system was responsible for the crash. As a former consultant to Boeing, I know a little about these matters. I am second to none in my admiration for the professionalism and integrity of that great corporation. I merely say that there is a possibility, however remote, that some kind of malfunction contributed to the crash.

A Royal Air Force board of inquiry was set up to look into the crash. Initially, the board said that there was no reason to attribute human failings to the crash. That was endorsed by the station commander concerned. It was further supported by the fatal accident inquiry in Scotland which said that there was no evidence of human failure. It was only when the verdict was reviewed by two senior officers in the

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Ministry of Defence that a verdict of gross negligence was entered against the two pilots, Flight Lieutenants Cook and Tapper.

I must remind noble Lords, as I have done many times in the past, that Queen's Regulations for the Royal Air Force, which are carefully drafted to protect people who are suspected of negligence, even when they are alive, provide strong protection for the rights of dead aircrew. The regulations provide that deceased aircrew should not be found guilty of negligence unless there is "no doubt whatsoever" about the causes of the accident. Yet these dead pilots were found guilty of gross negligence. It really will not do for the Ministry of Defence to keep on saying that it will not revisit the verdict unless further evidence comes to its notice. There is no further evidence, and there cannot be; it is all there, including the report of the National Audit Office.

I know that this is a familiar story to the noble Baroness who has acted in an honourable and sensitive way, as she does in all her dealings with these matters. I gave her notice that I intended to raise this matter today. I must now ask the noble Baroness a question that I have asked before without receiving a satisfactory answer. In the light of all the evidence, and the recent report by the National Audit Office, can the Minister now say that in the minds of Ministers in the Ministry of Defence there is no doubt whatsoever about the causes of this accident? If the Minister replies that there is no doubt whatsoever I should like to know on what evidence that is based, given the fact that the original Royal Air Force inquiry and fatal accident inquiry gave no indication of human failure. Is there any evidence which was not available to those two inquiries? If so, we have the right to know what it is. On the other hand, if the Minister cannot give us an unequivocal and unqualified "yes" in response to my question, we are entitled to conclude that there is some doubt, in which case the verdict of gross negligence should be set aside.

As matters now stand, the verdict has cast doubt upon the reputation of two bright, brave young officers with all the anguish and hurt that that has brought to their families and friends. More importantly, I believe that it has left a stain upon the honour of the great service to which they belonged. That stain will remain until the Government do something to remove it. I look forward to the Minister's reply at the end of this debate.

4.6 p.m.

Lord Hardy of Wath: My Lords, I cannot follow the noble Lord, Lord Chalfont, because of the time limitations. The House is indebted to the noble and gallant Lord, Lord Bramall, for his forceful speech, which touched on overstretch and deficiency. The overstretch is real; the deficiency is Europe's. I have been deeply disturbed by a good deal of the press coverage of defence matters in recent weeks. It reminds me of the time 15 or more years ago when, accompanied by a distinguished Conservative Member of the other place--not the noble Lord, Lord Monro of Langholm, to whom tribute has

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rightly been paid by the noble and gallant Lord, Lord Craig of Radley--I visited a major Royal Air Force station which accommodated squadrons then committed to act on behalf of NATO while the Cold War was at its height.

To my astonishment, I discovered that the then government had imposed enormously tight flying restrictions upon those squadrons, so much so that it seemed doubtful whether they could reach NATO's current requirements despite their frontline role. I recall saying to the station commander that the restrictions imposed by the then government meant that less flying time was available than had previously been available years before to the Royal Air Force Volunteer Reserve at weekends. I said to my parliamentary colleague that when I returned to Westminster I would table a Question, which I did. A journalist from one of the popular newspapers said that he believed it to be a red hot story. I agreed but said I doubted whether the particular newspaper would publish it. The Question was asked and the Answer was given but there was not a word about it in the press.

In recent weeks we have read some preposterous stories about the present Government. For example, reference has been made to Bowman. I believe that that story is worthy of consideration by the House. The Government inherited the communication equipment programme for the Armed Forces, but it was about six years late and the structure of the contract was in chaos. My noble friend may wish to comment on that. We have been told that the rifle issued to British forces is unsatisfactory, but that has been standard equipment for goodness knows how long, certainly as long ago as the Falklands War.

We also learn that the Royal Air Force has no capacity to bomb accurately. Perhaps my noble friend will also comment on that. This is related to the transformation of the GR1 Tornado strike aircraft into the GR4. With the rapid development of electronic warfare and communications equipment, when the GR4 is fully operational it should have the capacity to deliver a bomb smartly and accurately. The Air Force has not suddenly decided that it does not have that capacity. Jaguar aircraft and the Tornado GR1s which have not yet been converted are capable of performing with skill, accuracy and dedication, as they did in the Kosovo conflict.

Some astonishing stories in the press demean our forces. The noble and gallant Lord, Lord Bramall, rightly said that our forces have been bearing the honour of Europe upon their shoulders in former Yugoslavia and other parts of the world. That leads me to the European reference which I think is appropriate in this debate. Before coming to this House, I have spent more time in debates in the Western European Union on European security and defence than anyone since the Council of Europe and WEU were formed. I found them frustrating, irritating and annoying. From time to time one became enraged at the way in which many of our European partners were demanding commitments and interventions

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which they themselves were incapable of providing. They would provide stretcher-bearers, ambulances and traffic policemen but not combat capacity: that was for the United Kingdom. Since trade follows the flag--my noble friend Lord Williams of Elvel may not always agree in saying that honour must be properly served--and since our Armed Forces are of a high quality, we cannot stand back and watch horror and barbarity proliferate.

However, that situation has been going on for a long time. As Europe has developed its political appetite for the second pillar--to operate as a defence institution--it is time for Europe to recognise that it must start making an adequate contribution. That point has been valid, and some of us have been arguing it, for the past decade. The pity was that before 1997 the previous administration was quite prepared to see Europe pour scorn on, and put a lid on, any criticism offered about the European contribution. I have personal experience of that from studies of the capabilities of Western European air forces when the Council of Ministers prevented proper consideration of that important matter.

It is time we recognised that with the development of the second pillar we need to see retention of that part of the Western European Union's role which provides for an international parliamentary forum where attention could be drawn to inadequacies and inefficiencies--and poppycock. I became sick of listening to the Foreign Ministers and Defence Ministers of a number of Western European countries who were always eager to see British forces sent in. I remember saying to one Italian Minister that the only contribution I would prefer to see would be a translation into Italian of Alfred, Lord Tennyson's poem The Charge of the Light Brigade in order that it should accompany whatever contribution the Italians were making.

We have to recognise that there will be change in Europe: that it is right for Europe to act maturely in international affairs. But Europe must accept that it cannot rely on Britain to continue to bear for a long period an unfair share of the burdens which that provides. The point was illustrated by a question I asked in the House last Monday. In relation to Mozambique I referred to the need for heavy-lift aircraft, heavy-lift helicopters, and heavy-lift capacity. But we have to accept that the British taxpayer is entitled to demand that we seek to insist that in Europe there are fair shares within the second pillar, if that is to have any meaning.

4.13 p.m.

Lord Inge: My Lords, I add my thanks to the noble and gallant Lord, Lord Bramall, for instituting this debate. I am somewhat disappointed that we have only two and a half hours to discuss what seems to me an enormously important subject. I wonder what message that sends to our Armed Forces. I hope that the Minister will find time for a longer debate at some stage in the future on important issues such as the European security and defence initiative and other issues.

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I have time to concentrate on only one issue. I should like to add my strong support to those who referred to the critical importance of delivering the Strategic Defence Review. I, too, share some of the criticisms about the complacency which I felt came through in the White Paper. I know that that view was shared by some members of the Armed Forces.

It is worth reminding ourselves--some noble Lords have touched on it--what the Armed Forces have been through since the end of the Cold War. We had Options for Change which promised "smaller but better" and, frankly, was never delivered. We then had Front Line First, or the defence cost study which had some good things in it but also did great damage to our medical services. Throughout that time the Armed Forces were continually engaged. We had the Gulf War, Northern Ireland, Bosnia, Rwanda, Iraq, and now Kosovo.

As many have said, the Strategic Defence Review was well received. It was credible. It provided a blueprint for the future. There is no doubt that it raised high hopes among the Armed Forces. Although each service--the noble and gallant Lord, Lord Craig, touched on this--undoubtedly had to give up some significant elements of their fighting capability, the overall cohesion of the package was well received. If the basic Strategic Defence Review is not delivered--I do not say in its entirety; one always knows one has to trim things at the edges--and the capability of the Armed Forces outlined in it, I believe that the Armed Forces will become increasingly sceptical that yet again promises have not been met.

It is clear that we are having to delay the arrival of some new equipment into service. We are having to delay or defer other necessary improvements. We are having to cancel exercises; and we cannot fund the SDR at the present level of funding. I endorse strongly the comments of the noble and gallant Lord, Lord Bramall, about the 3 per cent efficiency savings which have to be found year on year for four years. Unless that 3 per cent savings initiative is removed, the problems of funding the SDR will become even more acute. That must have implications for morale, lead to increased scepticism, major problems for retention and reduce the fighting effectiveness of our Armed Forces. It is easy to talk about fighting effectiveness. We are saying that we are prepared to send men and women on operations not as well equipped and trained as they should be.

Finally, I wish to talk about training. One of the key assumptions of the Strategic Defence Review--it was an important assumption--was that we would retain the capability to take part in high intensity conflict; in other words, we would be prepared to go to war and to fight. Once one loses that capability, it takes years to get it back. Even on some of the peace enforcement/peace support operations, we need that capability. The Strategic Defence Review made it quite clear that our Armed Forces were to be equipped, manned and trained so that they could take part in a wide range of operational commitments: from defence diplomacy at the bottom end through traditional peacekeeping to the more complex, difficult and

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dangerous operations of peace enforcement and peace support; and, at the top end of the spectrum of conflict, taking part in high intensity conflict.

That places heavy training and leadership demands on the Armed Forces. There is no doubt that a number of our senior commanders are deeply concerned about the erosion in training standards, in particular at the top end of the spectrum of conflict. Some have said to me, "We are not as well trained as we were before the Gulf War". Again that must have implications on the Strategic Defence Review and morale, retention and fighting effectiveness. In short, if the Government are to deliver the Strategic Defence Review, the defence budget is too small and we shall not be able to meet the aspirations of the Armed Forces.

4.20 p.m.

Lord Vivian: My Lords, I, too, am grateful to the noble and gallant Lord, Lord Bramall, for introducing the debate today. Your Lordships have already heard that there is serious concern over the defence budget. Unless the matter can be addressed with some urgency the SDR promises may not be met and our Armed Forces will become less capable, less efficient, less well trained. They will be fewer in number and operating with less up-to-date equipment.

During your Lordships' Defence Group visit, a consistent theme was presented to us about the worries and effects that the 3 per cent efficiency savings are having on the Armed Forces. Without a more reasonable budget and more resources, our present Armed Forces will not remain capable, well trained and efficient.

Currently, the Army has just under 30 per cent of its staff either on operations, recovering from them or training for them. However, in the middle of last year that figure was 47 per cent. That is overcommitment nearly beyond the bounds of belief. It is essential that deployment levels are kept to within the laid down provisions of SDR.

The critically high deployment figure has created unprecedented turbulence. In the Army it has slowed down the formation of 12 Mechanised Brigade and has prevented the "formation readiness cycle" from starting. That, in turn, has led to near impossible overstretch, the well recognised enemy of retention.

Overcommitment causes undermanning and that, in turn, leads to overstretch, which is the main factor contributing to lack of retention in all three services. There are only two ways of dealing with overcommitment; either commitments are reduced or more money and resources are found to create more units.

The Army has made a significant effort at recruiting but is still some 5,600 below strength. The cost of training and keeping a soldier over a period of three years amounts to some £60,000. It is therefore essential that every effort is made to retain junior ranks for longer than three years. That would save money overall and ensure that the country had a better trained

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and more experienced Army. It is incumbent on the Ministry of Defence to approach retention with a far more robust attitude.

I believe that the MoD has been mean with the proposed lump sum bonuses for accumulated separated service. The bonus should be £5,000 and not £1,000 as suggested. If such a payment were implemented, the rate of retention might well increase dramatically. Although the introduction of 20 minutes of free telephone time a week and the e-mail system are much appreciated, would it not be possible for servicemen and women to be issued with free mobile telephones when deployed on operations or peacekeeping missions which they would return when leaving those theatres?

Retention would also be helped by ensuring that there is no slippage in the dates set for accommodation improvements. The sum of £1.8 billion has been committed to modernisation of single accommodation and more is required. But the date for completion of the project has slipped to 2005. Why is it necessary to spend millions and millions of pounds on new barracks in the United Kingdom to house regiments from Germany when those troops could remain there at no extra cost to the current budget?

There is concern too about married quarters. Following a 100 per cent stocktake of the estate it became clear that an additional £112 million was required for modernisation and the completion date slipped from 2003 to 2005. In addition, a further £12 million has been cut from the Defence Housing Estate budget. That upsets families and is no help in encouraging people to remain in the services.

In the Army, more than 70 per cent of jobs are open to women, with 7,648 enlisted and the majority working well and efficiently. Many years ago, two women staff captains worked for me. They could not have been more efficient. However, I want to sound a word of warning. It would be utterly wrong if women were allowed to enlist into the combat units of the Royal Armoured Corps and the infantry. It would make units less efficient; it would also become much more difficult to retain the all-important will to win the battle at all costs. In any event, the close confines of a closed down armoured vehicle for days on end could not be more unsuitable for women. The evidence to support my opinion has been drawn from a study carried out in the US. It found that American women in combat units reduced combat readiness, effectiveness and unit cohesion.

I cannot emphasise too strongly that if our troops are not trained properly for war fighting, we cannot expect to win battles in the future. Some 39 exercises, including the Royal Marines' Arctic exercise, were cancelled last year. Most cancellations were due to Kosovo, but some were due to budgetary constraints. If overcommitment of operations affects training to such an alarming extent, it is surely an indication that we may not have our SDR force level deployment correct. The cancellation of overseas exercises, such

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as in Belize and Kenya, is a disappointment to servicemen and women and is another factor that does not help retention.

I want to reiterate that serious lack of resources will prevent the SDR promises being implemented and, if that happens, many servicemen and women will leave. That will result in poorly trained Armed Forces, under strength and badly equipped.

Furthermore, political correctness could undermine the military ethos which stems largely from traditions within the regimental system. The Armed Services must not be regarded as civilians in uniform and be subject to civilian management procedures. They need a separate and different way of life and clear military discipline. Any damage to that military ethos will prevent the right kind of person enlisting into the Armed Forces of the Crown to provide protection for our freedom. It is our duty to guard against, and be alert to, any indications that might damage that special ethos. We must ensure that it continues to thrive.

Finally, I pay tribute to members of our courageous and loyal Armed Forces who have shown that they are the very best. They are an example to, and the envy of, the rest of the world. We should be justly proud of our servicemen and women. The whole nation owes them a large debt of gratitude.

4.26 p.m.

Baroness Strange: My Lords, we are, of course, all grateful to my noble and gallant friend Lord Bramall for raising this interesting and vital issue of the Defence White Paper. I remember the noble and gallant Lord showing me his maiden speech before he made it. It was absolutely first-rate, as all noble Lords told him. As this is not his maiden speech, he may receive fewer letters of congratulation, but his speech today is every bit as relevant and forceful. I also want to thank my noble friend the Minister for rearranging her busy schedule to be with us today. She always bothers to listen to and answer our many complaints.

Those of us who belong to the Defence Study Group and take an interest in the defence of our realm are like a chorus of sad Cassandras. During the past 14 years, since I have been a member, governments have come and gone, walls have collapsed in Berlin, wars have been fought and the Soviet communist empire has disappeared. But we are all, alas, singing the same song.

Our Armed Forces are being reduced and reduced and reduced. To see the thin red line, you probably need a magnifying glass, if not a microscope. The noble Lord, Lord Williams of Elvel, must have very good eyesight. There is no longer enough time between front-line unaccompanied tours. The magical figure of 24 months is becoming more mythical than real. Added to that are the very real worries which are being imposed upon our forces by the European Union. If an officer is unable to give an order in case he may be sued because of the possible dangers involved, we shall not be able to have any Armed Forces at all. Ships, guns and planes are all dangerous things--so is peacekeeping and war--but we are not talking about computer games.

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The second point that I would make briefly is about weapons. In order to be an effective armed force you must have weapons which actually work. We have heard endlessly of the rifles which for some reason or another stick. It is perhaps almost better to have no weapon at all than to be issued with a weapon which does not work.

Thirdly, there is the question of families. Here there are three distinct issues. The first is the separation caused by unaccompanied front-line tours, about which I have already spoken. Anyone whose husband is in the services is prepared to make reasonable sacrifices, but less than 24 months between front-line unaccompanied tours is not reasonable.

The second issue is housing. It was the Conservative government sold off MoD property to an agency because it would all be so much better managed. All property, we were told, would now be brought up to standard because there would be money available to do so. Many of us objected strongly and, indeed, voted against the proposals, as did my noble friend Lady Park of Monmouth and myself. It gives me no pleasure to say that we have been proved right. Much of the Army's housing is in a shocking state. It has not been brought up to the standards that we were led to expect.

My third point is about pensions. Yes, your Lordships will have guessed that I refer once more to the attributable forces family pension, to which all servicemen now contribute. If you know that if anything happens to you, your widow will have a pension for life from the contributions that you have made, you will have some confidence. However, that is not now the case. If your widow wishes to remarry in order to provide a father and a firm family background for your children, she will lose the pension to which you have contributed. Your Lordships will have heard this argument before. I include it simply as one of my three points.

Recently, we have heard much about the importance of a European force, as well as NATO. Certainly, we hope that our European allies will send more troops, money and supplies to support NATO, for which the Americans and the British are still bearing the brunt. However, we do not envisage a future in which NATO, as a tried, practised and working organisation, could be in any way sidelined by an amorphous European force governed by committees.

During the time that I have been lucky enough to be associated with the Defence Study Group, there have been from time to time government reviews, starting with the ill-omened Options for Change. They are all bright, glossy, and full of interesting figures, and they all cut down our forces and their finances. However, the last one--the Strategic Defence Review--seemed to have some chance of succeeding. It looked at our defences from the other way round. Of course, it was not perfect; nothing in this world is. Our forces had to budget for an annual 3 per cent reduction. If all things had been equal, that might have proved possible. But all things are not equal. The MoD has now had to fork

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out for Bosnia, Kosovo and Iraq, with no help from the Treasury. What was already a very tight budget is rapidly becoming an impossible one. We know that we have the best Armed Forces in the world; we know that they are all totally splendid and we admire them from our hearts. We certainly pay enough taxes. Could not a higher proportion of them be squeezed from the Treasury for defence and for our Armed Forces?

4.32 p.m.

Lord Glenarthur: My Lords, the noble and gallant Lord, Lord Bramall, has certainly done your Lordships a service by introducing this debate. However, I suspect that he will have been as disappointed as we are on this side to see the paucity of supporters on the government side of the House. Perhaps that has become a feature of debates on this subject.

First, I wish to address the matter of recruiting, in particular, to the reserve forces. I am cautiously encouraged that regular recruiting is buoyant or, at least, is becoming more buoyant. That is certainly good news for us all in the light of the stretched circumstances in which the Armed Forces have to operate. However, as other noble Lords mentioned this afternoon, it is very bad news that retention is still so poor in the regular forces. I very much hope that, when she comes to reply to the debate, the noble Baroness will be able to touch on that and explain more about what is being done to try to deal with that matter.

As to the reserve forces, it is perhaps a little difficult to judge how the TA's restructuring has affected recruiting at this comparatively early stage. However, I understand that figures are holding up quite well and, again, I hope that the noble Baroness can explain how they stand.

I declare a non-financial interest as a member of the National Employers' Liaison Committee for the reserve forces. In that committee we very much welcome the recognition which Ministers have given to the valuable role of the reserve forces, and particularly to their employers. We recognise and admire the commitment of volunteers who deploy on full-time service. Equally, however, many of them might not be prepared to volunteer without the support of their employers and their families. One of the roles of the local employer liaison committees and the National Employers' Liaison Committee is to communicate more effectively with employers. I believe that that is now being achieved.

A number of initiatives have been launched in the past year by the National Employers' Liaison Committee in conjunction with other departments and with the Reserves Training Mobilisation Centre, which is proving most successful. There are other activities, such as the "Employers Abroad" scheme, whereby employers have been able to see for themselves the crucial role played by our Armed Forces, including the integrated reserves, in sustaining peace in the Balkans.

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Employers who have released reservists to take part in those activities have got back individuals who are much more able to communicate effectively, think on their feet, take decisions if required to do so and, yet, maintain their full focus on the corporate goal. The authority and presence needed in a hostile military environment are not tied to rank and position alone. Civilian employers have not necessarily known as much about that as they should or they have not appreciated it in the way that we would wish. Therefore, the recent initiatives are important steps in the right direction.

As the noble and gallant Lord, Lord Bramall, said, there is still considerable weakness in the medical reserves. I have been involved in this subject for some time, both as chairman of an NHS trust until two years ago and, now, as a member of the National Employers' Liaison Committee. In a couple of months I shall visit the Balkans with senior members of the NHS, as other medical employers have already done, to see the valuable work carried out by medical reservists there. To that extent, and being acutely aware of the pressures which exist within the National Health Service, I, too, very much hope that the Minister will do all that she can to ensure that her department and the Department of Health work together as closely and pragmatically as possible in order to achieve the desired results. That surely would be a good example of joined-up government.

Qualifications matter, and the world-class training that the reserves receive goes a long way to achieving qualifications. Within the National Employers' Liaison Committee we point out that reservist activities provide a return to the employer--what we call the "profitable partnership". Over 6,000 employers, including most of our best known firms, have recognised that. I fear that it is not so widely recognised or understood among the small and medium-sized businesses. Of course, very many reservists are employed by them. It is important that the partnership to which I have referred is a true partnership. With the new importance being attached to the reserves as a capability, there must be real benefits from reservist activities to the employer, as well as to the Ministry of Defence. It is essential that the employer is not left feeling that he or she is a minority shareholder rather than a full partner.

I address briefly a different theme--one in which I cease to be quite so complimentary about the Government. There seems to be virtually no mention in the White Paper about finance. When there are presently so many operational commitments and wider demands on the Treasury, it is particularly important that the Ministry of Defence is run in the most cost-effective way possible. The noble Baroness, Lady Symons, has the major responsibility for looking after defence procurement.

I have heard some pretty horrific examples which remind me of a speech that I made in your Lordships' House 20 years ago addressing the same kind of theme. I have heard that in the United Kingdom within the last couple of years the invoiced cost of installing a

8 Mar 2000 : Column 1072

90-foot computer cable between a hub and a socket one floor above amounted to an astonishing £999. I have also heard that in the Falklands the cost of moving a 13-amp socket three feet was over £800. The cost of fixing grilles to portacabins amounted to a four-figure sum. Those are pretty simple domestic tasks. If the noble Baroness had to fit an "Xpelair" into her kitchen, would she expect to spend nearly £900? I doubt it. But I am told that that has been the actual approved cost of fitting one into an office somewhere at Arborfield within the past couple of years. Unbelievably, those examples are in line with the contracts which were set.

Things have gone seriously wrong if procedures, outsourcing and contractorisation have led to such extravagant waste which should be as intolerable in the public sector as it most certainly is in the private sector. It seems that it is something of a scandal and I very much hope that the noble Baroness will be able to do something about it.

I return to my main theme. I certainly support the Government in their intention to have useable reserve forces. They have an essential role to play. Certainly, in the National Employers' Liaison Committee, we do all that we can to explain the benefits of that policy and develop the sound start made. But it is up to the Government to do rather more to persuade all concerned that they have not embarked on "defence on the cheap".

4.40 p.m.

Lord Carver: My Lords, as the question of overstretch and the balance between resources and commitments has been fairly well discussed already, although I feel strongly on that subject, I shall pass over it. I shall also not mention the Defence Medical Services about which I feel strongly because we debated that on an Unstarred Question raised by the noble Baroness, Lady Cox, not long ago.

The SDR initiated a number of fairly radical reorganisations which included the establishment of some joint service ones, but the MoD underestimated the cost both of executing the reorganisations themselves and the cost of providing the equipment, where new items were needed, and the actual running costs, especially that of training to an adequate level. In addition, the Government imposed the iniquitous 3 per cent annual efficiency saving to which reference has been made by more than one speaker, which in reality, as has been said, has served as an annual 3 per cent cut.

As has so often been the case in the past, savings assumed to arise from a reorganisation have not been realised to the extent forecast. The result is that in many different fields of defence, the new organisations cannot be adequately equipped, trained and manned. That must be remedied by increasing the MoD's financial allocation.

The next subject on which I wish to touch, which has been mentioned already by one or two noble Lords, is the relationship between ESDI and NATO, including the expansion of the latter. The Government have got

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themselves into a thorough muddle on that issue. The noble Lord, Lord Hurd, gave a very perceptive lecture on that subject at the annual War Studies Lecture at King's College about a month ago. Unfortunately, there were very few present who were not members of the war studies department, partly because it clashed with the Division in this House on Clause 28.

I hope that I am not misrepresenting the noble Lord's views when I summarise them. He said that to make sense of that problem, one must ask: what is a realistic scenario affecting European security in which first, the Americans would not want to be involved; and secondly, we should not want them to be. The answer is simple: something of no great urgency or which seriously affected international relations. If that were not the case, the Americans would want to have a hand in it and we, and almost certainly the Germans, would want them to, certainly if it in any way affected relations with Russia. I believe that that was the burden of his argument, with which I strongly agree.

My own view--and it is not the view of the noble Lord, Lord Hurd, but is my own view--is that if that is the case, it is absurd to suggest, as paragraph 19 of the Defence White Paper does, that an ESDI should be able,

    "to tackle the most demanding crisis management tasks, in operations up to corps level (up to 50,000 to 60,000 personnel, together with appropriate air and naval elements)".

I suggest that the most that would be needed would be that one of the members of the European Union should be able to provide a 2-star land/air headquarters and associated communications to command a land force of up to 20,000 men; and that one member, another member, should be able to provide a similar naval headquarters, if one were needed, in the Baltic, and another in the Mediterranean. With that sort of scenario, I cannot envisage the need for naval operations in those circumstances in the North Sea, the Channel or the Atlantic.

A far better answer, which I have long advocated in this House and elsewhere, would be a more integrated European element within NATO, of which we, Germany and France must be members but which other members of the alliance need not be if they do not wish to be. If necessary, it could exercise command of the forces of members of the EU who are not members of NATO, just as there are today forces of non-members serving under NATO command in the Balkans.

Another point I make is the application of science and technology to defence. There is disappointingly little in the Defence White Paper about that, although paragraphs 7 to 9 of Chapter 1 pay some attention to it. Only four-and-a-half lines are devoted to the DERA on page 47, and that concentrates on the hope that it,

    "can attract investment and develop new business".

I am concerned with the danger that, if it is turned into a public/private partnership, the close contact between its scientific and engineering staff and the combat user, which is so important, could be weakened.

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That constant interchange is essential not only so that the researcher and developer may appreciate the combat user's needs and the conditions under which he will operate, but also for the flow in the opposite direction: so that current and future scientific and technological developments may be made known to the user and that he may be persuaded not just to improve his equipment and methods but may also consider radically new ways of nullifying the effect of hostile armed forces. I am far from satisfied that enough effort is being put into that field.

4.46 p.m.

Baroness Williams of Crosby: My Lords, I, too, add my thanks to the noble and gallant Lord, Lord Bramall, for introducing this debate. It is always a great pleasure in this House to listen to the voices of those in the defence field who are expert, who have very long experience of what they speak about and who bring to our debates an authority which makes us all stop and think again about the policy we are discussing.

In Mitrovica in the last couple of weeks we have had yet another example of the patience, common sense and humour that the British forces bring to what are often extremely difficult situations. We have much reason to admire them.

As somebody who is not an expert on defence, it would be inappropriate for me to add a great deal to what has been said by noble Lords far wiser and more experienced in this field than I am on the issue of overstretch. I only want to say that I believe that the case made by the noble and gallant Lords, Lord Bramall, Lord Craig of Radley and Lord Carver, is extremely powerful. The noble Baroness, Lady Strange, pointed out that the retention figures are extremely disturbing and that in the modern world families ask to be considered alongside the head of the family. Therefore, it is increasingly difficult to expect those families to put up with conditions of life which are so inferior to those enjoyed by others in other professions.

We must address that. The noble Baroness, Lady Strange, was eloquent on the subject of the quality of Armed Forces' accommodation, some of which I have seen for myself. I strongly agree with her about the very poor conditions in which some of our servicemen are expected to live.

The noble Lord, Lord Glenarthur, pointed to the encouraging recruitment figures. I hope that the Minister will be able to say something about those recruitment figures and about the Ministry of Defence's admirable campaign to try to attract more people from the ethnic minorities. But it is of course the case, as my noble friend Lord Watson of Richmond pointed out, that recruitment figures must always be set against retention figures and it is no good taking one without the other. It is the combination which gives one the net gain to the Armed Forces and it is that figure which is disturbing.

I should like to echo what the noble and gallant Lord, Lord Craig of Radley, had to say about procurement. It seems to me--the noble Lord, Lord

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Williams of Elvel, also pointed to it--that there is something deeply troubling about the efficiency of our procurement process. The noble Lord, Lord Glenarthur, referred to the cost of laying a cable. I am reminded of what he said about the recent United States Congress study and what was called the famous 2,000 dollar toilet seat. It seems to be broadly the case that procurement in the defence field is simply not subject to as acute competition as it is in the civilian area. I wonder whether in that context broader European competition might give all European countries a better deal than they appear to be getting at the present time.

I turn briefly to an area of the White Paper which has been less discussed; namely, peace support operations. The noble Baroness, Lady Park of Monmouth, said very powerfully that it was important that the military were directed towards their overall duty, which is to defend the country and its interests. Having said that, however, it is also worth saying that peace support operations are of crucial importance. This is where joined up government comes to the centre of things. The relationship between the Ministry of Defence, the Foreign and Commonwealth Office and the Department for International Development is crucial to whether the achievements of our Armed Forces are carried forward into the development of civilian peace operations.

In that context, reading the most recent reports from Kosovo, one is left with a great sense of concern. In a recent leader the Guardian said that we had won the war and we may be losing the peace. Certainly, those of us who have read the OSCE reports have to be concerned about the speed of the run down of, among others, British troops in Kosovo--a figure of no less than 6,500 over a very short period of time--presumably largely because of the overstretch of our Armed Forces at a time when, bluntly, the civilian operation was in no position to take over full responsibility.

We have to address that issue in order to be able to sustain the achievement of our Armed Forces and not to rely on them too much for what ought to be the responsibility of civilian operations to take over where they leave off. That is simply not happening at the present time, partly because we do not have an adequately mobilised civilian force to take that responsibility at the appropriate time.

That is not true only of peacekeeping operations; it is also eminently true of humanitarian and environmental disaster operations, the most recent example being Mozambique. In a supplementary question earlier today I asked the Minister for the Department of International Development whether we were giving adequate attention to the requirements of bridge building and road repair in Mozambique at a time when the continuation of air travel is the most expensive way to meet the needs of the population of Mozambique and when the floods are beginning to recede. That appears to me to be an eminently suitable

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task for our brilliant engineering corps within the Armed Forces, but one which would have to be part of an essentially civilian operation.

I shall turn to three areas of the White Paper within the field of defence and foreign policy co-operation and mention each briefly. The first is the European Security and Defence Initiative to which the noble Lord, Lord Hardy of Wath, and my noble friend Lord Watson referred. The noble and gallant Lord, Lord Carver, said that he could not imagine any situation in which there would be a serious crisis and the United States would not be ready to take a leading role. I wish that I agreed with him, but I cannot do so absolutely.

There is one pending crisis in which the United States might not be willing to become involved. I refer to the increasingly fragile situation in Montenegro. Many of us have been saying for some months now that that country might well be the next place in line for what has been the consistent strategy of Mr Milosevic--picking on each part of the former republic of Yugoslavia to drive it into submission to himself or else out of the republic altogether.

Noble Lords will know that in the past few days Montenegro has broken away from the dinar currency area of the former republic of Yugoslavia, and has declared the deutschmark as its currency. As such it is running very considerable risks of some form of military action against it. If Montenegro falls, the West will be regarded as having betrayed that one part of the former Yugoslav republic which consistently supported what we did in Kosovo. I believe that the repercussions could be extremely serious. I wish that I could be quite certain that the United States would be willing to intervene in that situation, but I am not. I believe that the throes of an election which last for almost a whole year in the United States and the rising voices of isolationism in Congress at least allow one to raise a question as to whether this is the kind of area where European initiatives come to the fore and where we might be expected to take some responsibility ourselves without always looking across the Atlantic.

I make two final points. The first concerns an area of overstretch which has not yet been discussed in this debate. I refer to the continuous flying operations over Iraq. Frankly, I suspect that the sanctions policy there is running rapidly into the ground, if it has not already done so. I wonder whether the Minister can tell us the cost of those operations and what consideration is being given to a form of sanctions more directly focused at the ruling group in Iraq, which manages to escape virtually all the effects of sanctions against the civilian population and not to suffer in any way from them.

Finally, I refer to the section "New threats and challenges" in paragraph 8 of the White Paper which refers to the concept of a national missile defence. Last week I was in Taiwan, which is busily attempting to get within what it sees to be the probability of an American national missile defence, if the next set of tests is successful. The implications of that for NATO, for western European solidarity, for Taiwan, China

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and Russia, are very great indeed. The White Paper passes over it by saying that the time is not yet right. Yet in the United States it has become a fundamental subject for discussion in the area of strategic defence. Perhaps there is not time to go into that tonight, but I hope that there will be an opportunity for this House to consider in much greater detail the implications of national missile defence for the United States, and for that matter its allies, before we find ourselves caught up in a new strategy which we have not even had the opportunity to consider or discuss.

4.57 p.m.

Lord Burnham: My Lords, the entire House--possibly with the sole exception of the noble Lord, Lord Palmer, who wanted more time for his debate which is to follow--must be deeply grateful to the noble and gallant Lord for introducing this debate. However, it is not good enough. We have had nothing like enough time in which to discuss the problems arising out of the White Paper and service affairs in general. Almost every noble Lord has spoken powerfully to this subject. I particularly pay tribute to the noble and gallant Lords and to my noble friend Lady Park of Monmouth who is, as usual, fulfilling our function as the Fat Boy in Pickwick Papers and making our flesh creep. But we really must have more time to debate this subject.

In another place there was a two-day debate broken by the Government's half-term folly and your Lordships must have something comparable to that. I do not mean a debate on a Friday, even if the Government have avoided the Grand Military at Sandown. In the other place the Government tabled a Motion to approve the White Paper. Do we wonder whether they did not do that here because they might lose it? But in the debate in another place the Government spent a great deal of their time complaining about newspaper and television reports which seem to show that the MoD was in financial trouble and in terms of procurement. I do not intend to talk about procurement today, possibly because there is not time and also possibly because the noble Baroness knows too much about it.

Your Lordships have spoken on those subjects, but there has been little opportunity to explain the case for and against the sea of troubles. When she winds up, I hope that the Minister will come to explain the disagreement between the Ministry of Defence and Clare Short regarding payment for the men and materials sent to Mozambique. That matter was touched on earlier in the Question from my noble friend Lord Attlee, but we have not received an answer. It was clear that it was vitally important or more important than anything else that whatever action was taken was taken quickly, but the Ministry of Defence is so short of money--it is not even able to pay its outstanding bills--that it can scarcely be blamed for refusing to take responsibility for those additional costs.

Many aspects of the problems set out in the SDR, the White Paper and the report of the Select Committee have been covered during the course of the

8 Mar 2000 : Column 1078

debate. The central question must be for the Government to confirm or deny the statement of the Chief of Defence Staff, General Guthrie, that the "European Army is a fantasy".

Is that an expression of the policy of Her Majesty's Government? In recent debates in your Lordships' House, it has appeared that the CDS has followed the party line closely. Therefore, I hope that that is the case. If it is not a fantasy--the cross head in the RUSI Journal called it a "myth"--we should be planning a very different navy, army and air force from those we have at present. If the Minister will make a categorical ex cathedra statement on that matter, her remarks will be greeted with much relief.

There can be no doubt that the Armed Forces are at this time in a difficult position. Apart from procurement, they have the right to expect that those who lead the services may do so with efficiency and expedition. From these Benches we have argued against the Armed Forces Discipline Bill. There is no doubt that the Human Rights Act is making life difficult. Therefore, it is essential that the services have the right man, or men, at the top. The CDS, General Guthrie, is shortly to retire and there are rumours that he is to be succeeded by General Sir Mike Jackson, even though he himself has only recently taken on a new post. I should not dream of asking the Minister to comment on that matter, but I must point out the real danger to acceptable and harmonious jointery if the top job is to go to a soldier for the third time in succession. Furthermore, General Jackson has shown himself to be a critic of NATO planning by setting out his views in the RUSI Journal. Many of us believe he is right, but is he in step with the Government?

The confidence we need the forces to have in their senior officers, such as the CDS, is not helped by officers such as the CDS and the C-in-C Home Fleet writing to the press. That is the job of Ministers, not of the military. We know that not all the Chiefs of Staff are as much in agreement with the progress being made as the CDS seems to be. What happens if a senior officer at some time in the future is required to write a letter with which he does not agree? All senior officers are totally loyal to their political masters, but it is not their business to write such letters and they should not be required to do so.

I trust that the decision about the new CDS will be made by the Prime Minister and not by the Secretary of State. Wales and London show the clear dangers of "inserting" candidates into the top position and we must hope that it does not happen again. I must at this point make a plea to the Prime Minister, when he announces his additions to those who will come to join us in your Lordships' House, to put in a naval officer. Since the sad deaths of Lord Lewin and Lord Fieldhouse the views of the Royal Navy--pace the noble and gallant Lord, Lord Craig, who had some views on the matter--have scarcely been heard in the House.

Much has been said about material, so I suggest that the House should concentrate on the most important material of all: the men--homines not vires--of the

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Armed Forces. In another place, the Minister proudly announced that last year was the best recruiting year for a decade. To be fair, he showed also that he was interested in retention, even if his chief method of doing so seemed to be through improved telephone allowances and e-mail. Is that the "policy for people" about which the Government have been talking?

In another place, my honourable friend, Nicholas Soames, really caught the point when he said that British soldiers had proved, from Waterloo to Kosovo, that they could face tremendous odds with confidence and triumph. He said,

    "if one asks a soldier what is the key to that confidence, he will immediately answer 'training and discipline'".

We are seeing today too many decisions, DCIs and Acts of Parliament which are undermining that confidence and discipline. The Government must realise that service life and civilian life are different and must be judged differently. A serviceman must have total confidence in those set over him and in his mates. If he does not have that confidence and they do not have the authority which will enable them to instil that confidence, the Armed Forces will be lost.

Last week I saw in a newspaper a picture of a Scots Guards Drill Sergeant shouting at a recruit with the suggestion that in future he would have to whisper. I am sure that General Kiszely, now ADCS, would have been happy with that, with all that it would do to discipline on the slopes of Tumbledown. Human Rights Acts are all very fine, but they must not be applied to the Armed Forces in a manner which will produce pale imitations of what is required. I again quote Mr Soames,

    "Ministers must realise that however disagreeable it may be to contemplate, the essence of military training is to prepare soldiers to fight in a bloody, frightening and exhausting war".

The SDR was generally, although not universally, welcomed. The White Paper, as your Lordships have shown today, less so. Too much remains undone; there has been too much saying and not enough doing. For instance, Birmingham University has been selected as the preferred host for the centre for defence medicine about which the Government are talking. According to the Government, they are making "rapid progress". Actually, all they have done is to select the site.

Not unreasonably, the Government are asking for time. Within reason they have it. But time, like an everflowing stream, bears all its sons away. I am sure that the Government will allocate time for a full debate soon, in which we may be able to discuss at reasonable length all the problems facing the Armed Forces. When we have another debate next year, let us hope that there are better things to report than there are now.

5.7 p.m.

The Minister of State, Ministry of Defence (Baroness Symons of Vernham Dean): My Lords, I too thank the noble and gallant Lord, Lord Bramall, for introducing the debate and, indeed, all of your Lordships who have participated in our discussions.

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The central theme of the White Paper is modernisation. It sets out the progress that we have made in many areas, not least in delivering the Strategic Defence Review and in taking forward European defence. The process we have begun is about delivering improvements to the capability of our Armed Forces. I join all noble Lords who have expressed their appreciation of our skilled and professional men and women committed to defend and promote the interests of this country.

None of us should underestimate the significance or ambition of the undertaking to modernise our Armed Forces and the means to support them in which we are now involved. It is a hugely complex and challenging process, but it is a necessary one. A modern Britain needs modern defence forces and the Strategic Defence Review lays out the path to achieve them. When the outcome of the review was announced in July 1998, it was widely acclaimed and admired for its logic, good sense and forward looking vision, as the noble and gallant Lord, Lord Bramall, has been kind enough to acknowledge. But we always knew--the noble and gallant Lord also made this point--that we would really be judged on our delivery of the improvements which the SDR proposed.

We made it clear then that the changes we are making would take time to achieve. The heavy operational commitments which our forces undertook around the world last year--in Bosnia, the Gulf, East Timor and Kosovo--have made this more challenging still. As a result, in some areas we have had to adjust timescales for implementing some new initiatives. I assure the noble and gallant Lord, Lord Bramall, that fundamentally the SDR is on track and will be delivered. Far from undermining the review, our operational experiences over the past year, not least in Kosovo, have reinforced its conclusions.

My right honourable friends the Chancellor of the Exchequer and the Secretary of State for Defence are to be congratulated for allocating an additional £500 million to the defence budget to take account of the additional cost of operations in the Balkans and elsewhere. That will help take the SDR to the next stage. I hope that the noble Baroness, Lady Strange, is reassured on that point. The announcement was made on 22nd February.

This afternoon much has been said about the 3 per cent efficiency target. It was mentioned by the noble and gallant Lords, Lord Bramall and Lord Carver. I take this opportunity to clarify the position on the efficiency saving. The MoD set itself a target of achieving a 3 per cent efficiency saving in operating costs for this and the next two years. Of course, it is a challenging target but one that can be met by genuine efficiencies, not by the sort of arbitrary cuts that the Strategic Defence Review was at pains to redress. The important point is that savings are not passed to the Treasury; they are available to the MoD to fund real improvements in defence capability.

Much has also been said about the current level of funding. I say as gently as I can to the noble Baroness, Lady Park, who made such trenchant criticisms of

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government funding, that although the defence budget will indeed fall over 3 per cent over the next three years, she must compare that to the 17 per cent fall in the previous seven years which was the legacy of the party that she supports in your Lordships' House.

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