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Lord King of Bridgwater: My Lords, I am grateful to the Minister, who will know that as important as recruitment is the issue of retention of service personnel. Perhaps he could say something about that matter. It is good to recruit new junior ranks, but the retention of key, experienced personnel is vital.

Lord Bach: My Lords, the noble Lord, with his vast experience, is absolutely right. The recruitment figures are excellent. We are delighted with them. As I understand it—of course, I shall write to him with the figures—the retention figures for the past year have also been encouraging. Before I commit myself in that respect, I promise to write to the noble Lord.

We are committed to a competitive defence industry in the United Kingdom. Since we launched our defence industrial policy last year, we have worked closely with the Defence Industries Council to deliver our shared goals. We are working to develop a better understanding of the capabilities of UK industry and to co-ordinate our research and technology programmes. Our industry continues to show its strength in export markets, about which we should be pleased.

UK companies have demonstrated their competitiveness by winning work on the Joint Strike Fighter programme on merit, and of course the Hawk aircraft has long had many customers and admirers around the world. Indeed, a significant order from the Indian Government followed hard on the heels of our own decision to select the aircraft for our military flying training system.

I have sought to cover much ground, perhaps too much, over the past 20 minutes, but this is a time of major change in foreign and security policy. We will need flexible Armed Forces, strategic partnerships and strong international institutions to achieve successful outcomes. What I have attempted to outline today is the structured and strategic approach that this Government will take to adapt, to respond and to be ready to act when and where it is necessary.

I mentioned earlier how the departments of state—the Foreign and Commonwealth Office, the Ministry of Defence and the Department for International Development—are working together as one in order to put into effect our policies. If I were to use shorthand, I would characterise our policies as striving to be a force for good. After all, that is surely what a country like ours, with its great history, its comparative wealth and its outstanding reputation should be striving for.

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3.41 p.m.

Lord Howell of Guildford: My Lords, it is good that the noble Lord, Lord Bach, has opened this debate by emphasising defence and security issues. Our security is of course the ultimate of the nation's interests, although, as we learn day by day, those are becoming ever harder to define precisely and to defend in this age of global interdependence and global terror. Like the noble Lord, I look forward very much to hearing the maiden speeches of the noble and gallant Lord, Lord Boyce—he is a former Chief of the Defence Staff, but he will not be the only former Chief of the Defence Staff to speak today—and the right reverend Prelate the Bishop of Liverpool. We shall listen closely to what they have to say.

Within all this complexity there is one simple and central aspect: it is that on however wide and distant a front, we have to defend our nation's security in this age of global terrorism and, however sophisticated the weaponry needed to do so, it is the personnel—the quality, courage and skills of the men and women in our Armed Forces—on which all else ultimately depends. I should add that today, with great sadness, we also find that our diplomats are being increasingly exposed to violence, danger and death. I join all those who have expressed deep sorrow at the death of Roger Short and members of his staff in Istanbul. We should say a prayer for and add our condolences to those for the Japanese personnel and diplomats, the Spanish personnel and the Korean personnel who have been murdered while doing their duty over the past few weeks. We should also spare a thought for senior British officials—not from the Ministry of Defence, but those from other departments—who have been grievously wounded in Iraq, as has been the son of one of the most respected Members of this House.

As the Minister outlined in his remarks, today we are placing almost unparalleled demands in an unparalleled spread of areas and diversity of operational commitments on our brave troops. I cite the Gulf, Afghanistan, Sierra Leone, Bosnia, Kosovo, Northern Ireland and other locations—and who knows where else tomorrow? That is why Members on these Benches and the British public are reasonably justified in our anxiety to know just what the Government now propose to do in order to relieve the enormous strain being put on our stretched armed services. We are all agreed that they are doing a brilliant job, but how is the strain to be eased?

I am advised that for many service personnel the interval between operational tours is now down to as little as eight or even six months, when the guideline is meant to be 24 months. Fighting troops have a mere six months to rest, recharge their batteries, join their families and, of course, address the crucial business of training and retraining on which the legendary efficiency of our Armed Forces ultimately depends. So my first question this afternoon is this: when and how is the respite period for our troops to be extended back to the required 24 months? Can one really count, as has been suggested in the newspapers, on a so-called "peace dividend" from units being freed from Northern Ireland, not least when the outlook there appears so shaky? If

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extra troops are to be released, will they be able to affect that miserably short period of turnover and respite and extend it to something more reasonable?

We all recognise the need for ever greater flexibility in our Armed Forces; that is the "new strategic environment" referred to in the gracious Speech. But what are we to make of reports that the Government are planning to respond to that need in the forthcoming White Paper—my noble friend Lord Vivian will have plenty to say on that in due course—by axeing or merging some of our proudest regiments—I hope that that is not true—and by squeezing still further the already woefully under-equipped Reserves and Territorials?

I shall leave it to other noble and noble and gallant Lords with vastly greater experience than mine to talk on the aspects of resources for the military, as well as the new and bizarre accounting method that the Treasury seems to have dumped on the Ministry of Defence, but I for one should like to see these reports flatly denied. I say that not just for sentimental reasons, but because the regimental system is not yesterday's pattern, it is the framework on which the peculiar excellence of our Army and our frontline forces depends. In tomorrow's world, I believe that that will be even more the case. As for the Reserves and the Territorials, not only are they providing, I am told, up to 25 per cent of our troops in Iraq, but we will depend on them more than ever for homeland defence. Any sensible policy ought to be building them up, not slicing them down. Can we be told what are the Government's intentions?

If all this uncertainty was not enough, we have a wider question to ask about the place of our Armed Forces and our military capacities within NATO, about which the Minister has spoken. All Ministers, not only the noble Lord on the Front Bench opposite, but the Prime Minister, the Foreign Secretary and others, have all vociferously asserted that the latest defence agreements with France and with the European Union in no way undermine Atlantic co-operation through NATO. Yet that is bound to be difficult for some of us because the French leadership is totally opposed to the very Atlanticist beliefs to which the Prime Minister and the Foreign Secretary keep loudly committing themselves. We are being asked to believe that, amazingly, the circle can be squared.

Of course none of us wants to be America's poodle, as the Prime Minister is often quite unfairly unaccused of being, but Members on this side of the House believe—along with, I think, the Prime Minister—that the trans-Atlantic linkage remains central to our security and to the safety of these islands. So we need to be clear, much clearer than Ministers have been, about just what is now being proposed.

There are two kinds of military planning structure: the first is "force planning" which deals with what forces and equipment are to be provided; while the second is "operational planning", which covers decisions on how those forces and equipment are to be deployed and used. I see no great harm in existing EU military staff doing force planning, but there are huge and divisive dangers in

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having a separate EU operational planning staff outside NATO. Over recent days we have been given the "housemaid's baby" argument—that it is only a very small item. But of course it will grow. If the so-called "structured co-operation" now being proposed in the EU leads to a large, separate entity, or to some semi-permanent core of EU states quite separate from NATO, then in our view Britain should oppose it root and branch so as to protect our own national interest and before we give a dangerous and misinterpreted signal to the Americans that their time in Europe is up and they should go home.

In Iraq, as the Minister confirmed and we all agree, our troops have continued to distinguish themselves and to demonstrate the value of meticulous training and preparation and generations of experience in dealing with low-intensity and guerrilla warfare. We on this side fully supported the invasion of Iraq and the toppling of the sadistic tyrant, Saddam. We saluted the Prime Minister's courage in going ahead, even though we repeatedly warned at the time, and not afterwards, that he was proving dismally injudicious in his handling of certain intelligence material on so-called weapons of mass destruction, and on the nature and imminence of the threat to us.

The Hutton inquiry will deal with aspects of that issue. However, I strongly agree with the argument of my noble friend Lord Alexander of Weedon, and many others, that the advice of the Attorney-General on these matters should be published in some form. There are ample precedents for that; it has been done before and could be done again. While it is presumably the first war dossier that interests the noble and learned Lord, Lord Hutton, like many others I remain astounded by the saga of the second "dodgy" dossier and the unparalleled sloppiness and incompetence that it demonstrated.

On the ground in Iraq, we are probably still not getting the full picture, since the violent incidents tend to be reported by the media, and the successes hardly at all. We forget that large areas of that large country are at peace, schools and hospitals are open and fully functioning, and business is picking up. As the Minister says, however, the security situation is the key, especially in the Sunni triangle above Baghdad.

What was needed from the start, as we could have explained to our American friends—and I wonder whether we did—is a coherent counter-insurgency strategy based on deep intelligence, which destroys the terrorists, the jihadists and all the others, while breaking their remaining links with the civil population. Over the weekend, our US friends, who may now be learning, had an excellent victory in their attacks on the guerrillas. Typically, it was portrayed by the BBC as a defeat, but never mind that. I am told that they came within one hour of catching Saddam, so the net may be closing in on him.

Above all, the coalition authorities now have to show that they are not an occupying power but merely a transitional force. They have to promise to stay until stability is assured, but they have to promise to go as soon as possible. That is a desperately difficult balancing

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act, and the Americans really need strong friends and allies as well as robust UN involvement—not whining critics—to help them to complete it.

There is no time for me to consider the broader Middle East picture. However, as the Minister says, the Iranians are now sounding more positive and co-operative. The blackspot obviously remains the miserable Palestine/Israel conflict, where one can only pray that a new road map of some kind, like the Geneva plan, can be established, and sanity on both sides begins to prevail.

I mentioned the defence ambiguities in our relations with our EU neighbours. What are we to make of all the other cracks and fissures being created in the structure of European unity and stability? The smaller member states, both the existing ones and the newcomers, are increasingly and understandably sour about the way in which things are going, and especially about the tactless dominance of the bigger members. Meanwhile, the euro has lost its legal framework, and the stability and growth pact is in tatters. Indeed, Commissioner Monti says that it has been killed. That is a clear demonstration of one rule for the smaller brethren and another for the big boys. Is it not ironic that we are being asked to approve, in the gracious Speech, a draft Bill for a referendum on joining the euro at the very moment when the whole system is tottering?

Above all, there is the dismal EU constitution project, which the Foreign Secretary now tells us is desirable but not necessary. If that is so, we have to ask why it is being pursued at such divisive cost. Of course, we shall have a chance to debate that in more detail this time next week in your Lordships' House.

A constitution for a nation or for nations is not just any old piece of paper, but a document in which every word has legal significance. I know that the Foreign Secretary is calling it no more than a "label" and that Mr Peter Hain says that it is just a tidying-up operation. Those statements are being rightly and almost universally ridiculed. Presumably, they are made only to defend the Government's crumbling case against a referendum on the issue. That is a referendum that we want, unlike the one on the euro. We in the Conservative Party and more than 80 per cent of the country want it. I understand that those in the Liberal Democrat Party want it as well—or that is what they say at the moment.

Everyone in Europe recognises that the new constitution is much more than a treaty; that however many "red lines" there are—and some of those are looking very crumbly—it shifts power to the European institutions and significantly away from member states. It creates for the first time in our history a new and superior legal framework for our national affairs, which will affect every single one of us. So says the Belgian Prime Minister, Mr Verhofstadt, who states:

    "The Convention's draft is quite rightly accorded the title of a Constitution: it is more than a treaty—it is the capstone of a federal state".

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So, too, says our friend Romano Prodi, in stating:

    "The Constitution is a big change from the basic concept of nation states. It's a change of centuries".

So, too, says our own Chancellor, Gordon Brown, when he points to the constitution's fundamental importance and the threat it poses to our autonomy in tax and fiscal matters. That is confirmed by the excellent House of Lords report, which is tabled for debate today, from our committee dealing with the constitution. It raises 15 issues of principle in the draft constitution that affect our own constitution. That seems further confirmation of the point that I am making.

As great constitutions go, this EU effort is a very poor one. It is wordy, complex and lengthy, and fails to secure individual rights. We shall return to it again and again. However, for the moment I simply summarise by saying that it is a constitution by bureaucrats, of bureaucrats, for bureaucrats. It is intolerable that the party-controlled majority in the other place should seek to force it through without proper reference to the British people.

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