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Noble Lords: Oh!

Lord Burnham: My Lords, the noble Baroness has dutifully repeated on many occasions that she speaks for the Government as a whole, not for a single department, but so many of my questions relate to defence, which is no longer her business, that I honestly and genuinely do not expect to get an answer to them. The purpose in raising these matters is to set an agenda for a full-scale debate on defence, which I hope that the Government will allocate at the very latest before the end of the year.

It was noted on Tuesday of this week that the gracious Speech contained nothing about agriculture. Indeed, with the exception of one phrase on NATO, there was nothing about defence either. Similarly, until those inter-continental ballistic missiles were mentioned by my noble friend Lord Vivian and the noble and gallant Lord, Lord Bramall, we did not hear very much about defence this evening. However, defence is something that we really must consider most seriously.

Above all, the problems of defence centre on the men and women of the services. The Government will not be able to fulfil their commitments if they do not have the men required. Time and again, we have seen examples of where a battalion has had to borrow men from other units in order to be able to fulfil its commitments. At the present moment, the Army is well down on the 47 per cent who were on operations when the Bosnian crisis was at its height, together with the problems in Northern Ireland. But the omens are not good for the immediate future. We are told that 6,000 members of the Parachute Regiment, and other units, are on their way to Macedonia, and this at a moment when the marching season is about to start in Ulster--an annual event that is bound to require more reinforcements to be sent. This marching season is likely to be more serious than in previous years with the impending possible resignation of David Trimble.

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I hope that the Minister will be able to give your Lordships the up-to-date figures on recruiting. More importantly, can she update the House on the number of middle to senior ranks (both commissioned and non-commissioned) leaving the services? I was given the figures earlier in the year in the form of a Written Answer, and should like to see how they have changed. For this is the controlling figure on morale. Free telephone calls, newly painted quarters and home duties have some effect, but they are not what the soldier or sailor, and so on, wants: he wants interesting and productive duties, excitement, a secure future and steady promotion at the appropriate time. He also wants a secure second career when he does decide to leave the service.

We are told that the story, which was widely circulated before the election, that 10 battalions--it said "10 regiments", but I did not understand that bit--are to be disbanded is quite untrue. But it would not be surprising if it were true. The Army is so short of men that it can only fill the battalions that are required for active service by robbing other units. There is no chance of getting up to establishment by 2008. Indeed, my noble friend Lord Vivian says that it will take 10 years from now to do so.

If there is any chance that recruitment and retention will allow the 8,000 men that the Army is short of establishment to come in, will the Government pay for it? We are told that this will cost £1.3 billion more than the current budgetary provision. The Chief Secretary to the Treasury has attacked the Conservative pledge to fill these major gaps. Presumably, he is saying that we do not have the money. Is this so? Can the Minister say whether or not the Government want to get the services up to establishment? That brings me to another point mentioned by my noble friend Lord Vivian; namely, will the people who are recruited be fit to carry out their jobs?

When a man leaves the service he must have a secure future, but it can be a bit too secure. The Secretary of State confirmed in another place that the two aircraft carriers, of which we have heard so much, are definitely to be built at a cost of about £2 billion. Initially, the MoD is expected to award two £25 million risk assessment contracts. Can the Minister tell us from which budget this money is to come? Money apart, when we have the carriers, who is to man the aircraft that are the sole purpose of such vessels? That brings me back to my point about second careers. At present trained and experienced pilots are in such short supply that extreme measures are having to be taken to ensure that they do not leave for civil aviation. Are the Government confident that they will be able to man all their aircraft?

Men apart, where is the money to come from? The Secretary of State has given the assurance that the carriers will be built. But will the defence budget be trimmed elsewhere to make allowance for the carriers? It would be helpful if the noble Baroness could give an assurance on that point. We hear so much about the inability of the services to perform their duties because of a lack of cash, leading, it is alleged, to fuel and

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ammunition shortages. Is there any truth in those stories? Again, a categorical assurance would be helpful.

There are so many other problems to which we shall return in due course. The hosts of Midian seem to be prowling round the Bowman contract. When will that finally be placed and can the Government now give a categorical assurance that Bowman will be in service by 2004 as has been stated?

How is the DERA contract going? What are the financial benefits first to the Government and, secondly, to the Ministry of Defence budget? We have been given a series of figures, none of which is the same. It would be helpful to be given some rather more accurate figures. Are the boundaries between private DERA and retained DERA clear and are the Americans and our other allies happy about it?

I have a number of other rude words for the Government, among them A400M, Meteor and Type 45. At Le Bourget the defence Ministers signed only a Memorandum of Understanding on A400M rather than a production contract. The Ministry of Defence erroneously claimed that various countries were committed to buy 212 aircraft in a single launch order. The current commitment of these countries is 193 and the economic minimum below which it would not be a viable project is 180. The figure of 193 is awfully close to 180. I ask noble Lords to note that the economic minimum is 180. We are getting close to that figure, and the Germans in particular are likely to buy many fewer than the number to which they are committed. Have the Government a firm date for the conclusion of negotiations? What is the current figure for the A400M?

On Meteor, we again have only a Memorandum of Understanding. Even so, 43 per cent of the programme is unfunded. Can we have a firm deadline for the conclusion of negotiations and what will be the penalty for failure?

I refer to Type 45s. When can we expect the Rand Corporation report to be published or at least completed? It is designed to help to inform decisions with regard to overall value for money in the warship building programme as a whole. Are the Government committed to competitive tendering for the second batch of Type 45s?

Even with all those questions I have not touched on the European rapid reaction force or nuclear missile defence. With the ERRF the Government have embarked on a divisive process that will undoubtedly undermine NATO. All it does, when compared with NATO, is to throw out the United States and Turkey. What is the Government's current thinking on information and headquarters-sharing between the ERRF and NATO?

The noble Lord, Lord Bach, repeated the remark of the noble Lord, Lord Robertson, that there has to be an alternative to NATO or nothing. Why is that? I do not see why we need a third alternative. The noble Lord, Lord Powell, stated that NATO is changing. It will indeed be very different. That is undoubtedly the

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case. All that has been said makes the case for the ERRF rather more doubtful if we look well into the future. Apart from anything else, we are short enough of friends without disobliging those we have. One of the most cheering events of recent weeks has been the statement of a number of French generals in support of NATO and implicitly against the RRF. We should be pragmatic. We do not need the RRF and we do not have enough men to man it. Let us forget it.

Nuclear missile defence is the big thing world-wide. Many noble Lords have touched on the issue in the course of the debate. We have heard much of the dangers of abandoning the ABM Treaty. But the ABM Treaty was 29 years ago and the world has moved on. Nuclear missile defence will be immensely expensive but it is supremely important. The attitude of Russia to the rather indefinite proposals of the United States seems at present equivocal. I hope that Her Majesty's Government will make their attitude clear and cease to sit on the fence. The Prime Minister will have to make up his mind and the sooner he decides whether to support President Bush's plans the better.

My written note contained 18 question marks. I do not know whether my speech contained more questions or fewer. In reply to my honourable friend Iain Duncan Smith, the Secretary of State complained on Friday that he was entirely negative and had no positive views. I think that that was grossly unfair. I hope that I have not committed that alleged sin. I simply want answers to a great many questions. I say seriously that I do not expect to receive them today. However, I hope that the Minister will pass to her noble friend those questions that she fails to answer for a reply in due course, preferably in a full-scale debate. Your Lordships require and deserve answers to all the questions.

11.22 p.m.

The Minister for Trade (Baroness Symons of Vernham Dean): My Lords, I warmly welcome the opportunity to wind up not only our debate today on the gracious Speech but also those over the past five days. As the noble Lord, Lord Redesdale, rightly said, our debate has been exceptionally wide ranging. That is a reflection not only of the breadth of the Government's engagement in foreign, defence and development policy but also of the breadth of expertise and experience on these matters in your Lordships' House.

I shall try to answer as many as possible of the questions which have been put to me. However, I hope your Lordships will be kind enough to accept letters where that is not possible.

First, perhaps I may pay tribute to my noble friend Lady Scotland, who has left the Foreign Office for the Lord Chancellor's Department. Her intellect, commitment and sheer talent have been widely admired not only in the Foreign Office but also in your Lordships' House. She is succeeded by my noble friend Lady Amos, whose persuasive talents and considerable flair at the Dispatch Box are well known

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to your Lordships. She is already making an impressive impact as a Minister in the Foreign Office. I wish both my noble friends well.

I also take the opportunity to say that my noble friend Lord Bach will be an excellent Minister in his new role. He demonstrated in his opening speech how well he has got on top of his brief. He has been able to underline the fundamental importance of the human factor in our defence capabilities. Like the noble Lord, Lord Campbell of Alloway, I echo those sentiments very sincerely.

We owe a tremendous debt to the men and women in our Armed Forces and their families who daily promote Britain's interests around the world. They frequently put their lives on the line and, sadly, sometimes those lives are lost. They are in an exceptional and special position in British public life. I believe that all Ministers would agree with what the noble and gallant Lord, Lord Vivian, said. What matters above everything in combat is operational effectiveness. They take unique risks. Their lives depend on their work as a team. During my time in the MoD I came to recognise clearly what a real force for good our servicemen and women are around the world and how much they are valued in the countries in which they serve.

However, there are many people who deliver practical benefits for us all over the world in different circumstances, not only our ambassadors and diplomats working on high-profile issues, but also the UK and locally based staff in our missions around the world who provide vital services to Britain, be they entry clearance staff, consular officials, development staff, those acting as commercial officers or those staffing the British Council or the BBC World Service. We have a fine diplomatic service that is the envy of most of the world. Its work is key not only in foreign relations, but in trade, defence and international development, as well as in ensuring that Britain's interests are upheld.

The noble Lord, Lord Howell of Guildford, urged the Government to take a wider view on foreign development and defence affairs. We take a wide view. My right honourable friend the Secretary of State spoke in another place last Friday not only about south-east Europe, but about the Middle East and east Africa. We engage in a full and constructive role in the international community. Our global interests require and confer global influence. The people of Britain will benefit from the United Kingdom's pivotal role as a member of the United Nations, the Security Council, NATO, the Commonwealth, the G8 and the EU. However, as we have shown on a number of occasions, overseas engagements require us to ensure that when our vital interests and values are at stake, we can act with force and determination when diplomacy fails.

The noble Lord, Lord Howell, and my noble friend Lord Shore of Stepney urged us to think about the Commonwealth. The high-level group set up at the initiative of the Prime Minister and of which the United Kingdom is a member has made progress on a number of issues concerning reform of the

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Commonwealth. We are looking forward to presenting the results at CHOGM later this year. The noble Lord, Lord Howell, asked about our priorities. They are better protection and promotion of the Commonwealth's fundamental political values; finding ways to use the Commonwealth network better on issues of global concern such as the environment, education, ICTs, trade and action against money laundering and corruption; a tighter focus on the Commonwealth's range of small-scale development programmes; and better co-operation between official and civil society in Commonwealth countries. That is a formidable list.

The noble Lord, Lord Redesdale, asked about the British Overseas Territories Bill. It confirms the commitment made in the 1999 Overseas Territories White Paper to grant British citizenship to British Dependent Territory citizens in qualifying territories. It also changes the nomenclature of the overseas territories. I know that my noble friend Lady Amos welcomes it as strongly as I do.

The noble and gallant Lord, Lord Craig of Radley, asked about the Commonwealth Partnership for Technology Management. I am aware of the work of the CPTM and of the noble and gallant Lord's active involvement in its dialogue. I am pleased to say that the United Kingdom Government are a contributor to the CPTM and that officials are actively involved in it and are well placed to contribute to its work on best practice.

The noble Lords, Lord Howell and Lord Desai, the right reverend Prelate the Bishop of Oxford and the noble Earl, Lord Sandwich, all raised considerable concerns about the WTO. They were right to do so, because trade has a vital role to play in helping developing countries to boost their economic growth and generate the resources necessary for reducing poverty. Greater trade openness and the promotion of exports are associated with faster economic growth, but if more open trade is to work for the world's poor, we need effective multilateral trade rules made by an institution in which developing countries are properly represented, as the noble Earl said, and one that is capable of enforcing those rules for poor countries and rich countries alike. Liberalisation is what will matter in the forthcoming trade round. That is why we attach such a high priority to the success of the round to be negotiated in Doha in November. We need to be ready to put our political muscle behind our overriding goals, presenting our priorities and, as the noble Earl rightly said, listening to the concerns of fellow WTO members, particularly those of developing countries.

The noble Lords, Lord Shore of Stepney and Lord Howell of Guildford, were concerned about what they saw as a government preoccupation with Europe, although they both spent the larger part of their remarks on Europe. I shall try to reply to some of their points.

The Government's engagement with Europe has already done much to bring real benefits to the everyday lives of people in this country. Our engagement with Europe has made Britain richer and

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it has made us safer. As the noble Lord, Lord Alderdice, remarked in what I considered to be a remarkable contribution, it has brought his and my generation to a point at which there has been no war in Europe in our lifetime. We shall bring forward legislation to implement new arrangements for the future financing of the European Union, to ratify the Nice Treaty and to pave the way for successful enlargement of the Union.

I turn to the Nice Treaty. My noble friend Lord Grenfell gave us a pungent analysis, but perhaps I may put to him some of the gains that we hope to make. We have opened the door for enlargement with a bigger single market; we have won more relative power for Britain in the EU through the increase in our weighting of votes; we have also delivered a better and more efficient Commission; we have secured more qualified majority voting where it has been in the UK's interest; and, at the same time, we have preserved our veto where we said we would do so--on tax, social security, defence, our own resources, border controls and treaty change; and we believe that we have secured a more flexible EU.

But of course the noble Earl, Lord Sandwich, the noble Lord, Lord Inglewood, and my noble friend Lord Dubs are right: we must do something about the common agricultural policy, which is unsustainable in its present form. Therefore, the United Kingdom continues to press for further reform, including movement away from production support towards rural development. Others, including France and Germany, are also talking about reform. Therefore, the time is ripe for debate in Europe and we are pressing for change.

My noble friend Lord Shore is always very interesting on matters European and, of course, on the euro in particular. However, perhaps I may say that to describe his opponents' views as "pretence" or as "contemptible" or "not honest" does not help our debate. Ours is an honest argument; it is an honest disagreement. I am happy to debate with anyone--with my noble friend, with the noble Lord, Lord Campbell of Alloway, and with my noble friend Lord Bruce of Donington--but I believe that that debate must be held in sensible and well moderated terms.

In principle, as everyone knows, the UK is in favour of UK membership of the EMU. In practice, of course, the economic conditions must be right. The determining factor underpinning any government decision on membership of the single currency is the national economic interest and whether the economic case for joining is clear and unambiguous. If it is, there is no constitutional bar to joining. However, once the Treasury has completed the five tests which the Chancellor spelt out in October 1997, a recommendation will be made to the Cabinet. The Government will then make a decision on UK membership of EMU. If the Government recommend UK entry, it will be put, as has been stated time without number, to a vote in Parliament and then to a

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referendum of the British people. Therefore, the Government, Parliament and the people must all agree.

I turn to the questions raised by my noble friend Lord Sewel and the noble Lord, Lord Inglewood, and others on the matter of enlargement. My noble friend Lord Dubs also raised them. The pace and intensity of the EU's negotiations with the candidates have increased in the year 2001. Negotiations have also been brought forward on justice and home affairs co-operation and food safety, highlighted under the Belgian presidency. Our own Prime Minister's call in Warsaw last October for what he described as a,


    "breakthrough on enlargement under the Swedish Presidency",

has been achieved.

To answer the specific questions of the noble Lords, Lord Wallace of Saltaire and Lord Alderdice, Turkey is indeed a candidate for EU membership. However, unlike other applicants, it does not meet the Copenhagen political criteria. As I am sure both noble Lords know, that is a prerequisite for opening negotiations. The EU agreed on accession partnership for Turkey on 4th December 2000, and that sets out priorities for action on meeting the membership criteria. Therefore, the EU and Turkey have begun preparations for screening, and the EU is doubling pre-accession funding to Turkey to approximately 180 million euros a year. I can tell the noble Lord, Lord Alderdice, that Cyprus has completed negotiations thus far on 22 of the 31 chapters.

I turn to defence. We all know that there were serious lessons to be learnt from the Kosovo campaign. We should not lose sight of the fact that Europeans have subsequently played a leading role in KFOR and currently contribute some 80 per cent of the total redeployment. At the same time, we have to face up to the fact that Europeans flew only one-third of the total number of aircraft sorties during the campaign. That was bound to bring us to the point at which we consider what more has to be done about the European defence capability. That matter was raised by the noble Lord, Lord Howell, the noble Baroness, Lady Park, and, in a rather different way, by the noble Lord, Lord Renton of Mount Harry, and my noble friend Lord Ponsonby of Shulbrede.

European security and defence policy is helping to ensure that European nations can make a stronger contribution to crisis management operations both within NATO and when NATO is not engaged. The Government are absolutely clear about the fact that NATO remains the basis of our collective and territorial defence and the cornerstone of our security policy. The commitment of UK forces for an EU-led operation will always--I stress this--be a decision for the UK Government alone. All EU partners agree that there will be no "Euro army". That has always been the view of Her Majesty's Government, as my noble friend Lady Ramsay of Cartvale made clear. That was explicit from the beginning.

We also enjoy the support of the United States, as President Bush said in his joint statement with Tony Blair at Camp David. They said:

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    "The United States welcomes the EU's European Security and Defence Policy intended to make Europe a stronger, more capable partner in deterring and managing crises affecting the security of the Transatlantic community".

To answer the point raised by the noble Lord, Lord Vivian, who was worried about duplicate mechanisms, I say that there is a military staff of 135, of whom 13 are expected to be British. They will advise, but they will do so only in relation to strategic options for a political decision. They will not advise on operational capability. Once the political decision has been taken, the operational planning will be done through SHAPE, which has a core staff of some 950, or, for less demanding operations, through national facilities such as our own PJHQ.

To answer the points made by my noble friend Lord Ponsonby of Shulbrede about the WEU--I recognise that it is to some extent the other side of the coin--I say that there are no plans to replace the WEU Assembly, which will continue to act under Article IX of the modified Brussels Treaty as a forum for strategic reflection in Europe. Perhaps I may write to him further about the very interesting questions that he raised. I also thank him for the hard work that he has undertaken in the WEU.

I turn to Macedonia, which was discussed by many noble Lords, including the noble Earl, Lord Dundee, and the noble Baroness, Lady Rawlings. The only way forward is a political settlement in which the two communities agree to live and work together; the way forward is not to impose a military solution. Britain completely supports the work of NATO and the EU and the efforts of Mr Solana and my noble friend Lord Robertson--they will continue to be of huge importance. We will consider contributing to a NATO peacekeeping force in support of a peace settlement but it has to be a political settlement that is being supported.

To answer the point made by the noble Earl, authorities in the Federal Republic of Yugoslavia, the World Bank and the EC are jointly hosting a major donor conference on 29th June in Brussels.

I turn to what is happening at the moment to Mr Milosevic. The noble Lord, Lord Redesdale, suggested that Mr Milosevic had been transferred to the ICTY and out of the Federal Republic of Yugoslavia. That is indeed right. At the request of the Government of Yugoslavia and the International Criminal Court, the United Kingdom Government have this evening provided an aircraft to fly Mr Milosevic to the Netherlands. I understand that the plane has already left Serbia.


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