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Lord Campbell-Savours: My Lords, the noble Lord has said repeatedly that we went to war for the wrong reason, that being weapons of mass destruction. If the reason had been human rights abuses in Iraq, would that still be his position? If so, does that mean that he would still be relying on the policy of sanctions, which was not working?

Lord Redesdale: My Lords, "if" came into that. We did not go to war over human rights, but over weapons of mass destruction. I agree that there have been benefits—I said that it had been beneficial to get rid of Saddam Hussein. However, I believe that we went to war directly over weapons of mass destruction.

I shall be extremely brief over the other issues that I wish to raise, the first of which is spending on the MoD. That issue is coming to a head. The Ministry of Defence has a number of projects lining up. Billions are being pledged on systems and weaponry. A bubble seems to be growing of a period in which those systems have to be paid for, and that will fall between 2008 and 2012. One issue that worries us in that period is that of overspend. Almost every project that we have looked at so far has been vastly overspent, which will be a real issue for those who have to meet the bill in those years.

An area that will come up under consideration of that is carriers. At the moment, we are looking at two carriers, but there are obviously indications that we could go to three and share the cost with the French. However, that might also lead to only two carriers being shared with the French if we cut down the carriers' size and increase their capability. I do not think that that is a bad thing. I take issue with the noble Lord, Lord Howell, who raised our relationship with the European Union over defence capability. We should share our expenses with the European Union. NATO is the cornerstone of UK territorial defence, but that was not stated in the White Paper yesterday; rather the US was described as the guarantor of UK security. That is an important distinction that will not be lost on our European allies.

The last issue that I wish to discuss is manning and overstretch, on which Iraq returns to the fore. We are extremely reliant on more than the good will of our forces, which will have decreasing periods between combat operations. We are also relying very much on our reserves, which are a finite resource. Have any studies been undertaken into how long we can keep going back to our Reserve Forces? A lot of them might disappear. They might go once and consider going twice, but going back a third time might not be practical for them, because that would then be a new career.

In a "File on Four" programme, a reservist said that he was quite happy to go to the Gulf, but his employer was not so happy. He found real difficulty with his employer in coming back, and that will be an issue. I ask the Government to look again at their policy of

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how they help those reservists who are called up and sent to Iraq to deal with their employers when they come back. Many employers might not share a benign attitude to their being away for an extended period.

We must also look at our territorial reserves. Retention, an issue raised earlier, relates to overstretch. As a territorial officer a few years ago, I know that retaining people with the skills and experience is increasingly difficult under the strict guidelines of how much can be spent on reservist man-training. It was difficult to get those individuals trained—it took a number of years. Losing those skilled people who would be so valuable in operations is a major concern, because the numbers game in the Territorial Army hides the reality that there are very few properly trained troops.

We support all our soldiers on secondment and undertaking operations. The Bill in the Queen's Speech about pensions will be a test of how we support them in future. There are real issues about the idea that that Bill can be cost-neutral.

4.17 p.m.

Lord Guthrie of Craigiebank: My Lords, like others, I want to pay tribute to the very considerable achievements of our servicemen and women over the past few months, particularly those who have been in Iraq, Afghanistan and Sierra Leone. As always, they have risen to the challenges and not been found wanting under the most difficult and often dangerous conditions.

I have two major concerns. First, we are hearing that the Ministry of Defence budget, which of late has been under severe pressure, is now faced with greater problems than ever before. Is that so and, if so, why? Is it because of miscalculation or increased and unexpected commitments, or because the new resource budgeting system imposed on Whitehall is less suited to a defence department than to other departments of state, industry and business?

The MoD, which of necessity holds large amounts of expensive equipment, is bound to be seen unfavourably under the new system when comparisons are made. A figure of savings of around 1 billion per year for four years is spoken of. That would be catastrophic for the services, which are already suffering from cuts and shortages. We now hear that, on top of many painful measures taken, even recruiting is being curtailed. I hope that we will be told by the Minister the size of the budgetary problem and why it has arisen.

The second concern is the White Paper. I hope that it will not be bland, but a document which will lead defence in the right direction. The Strategic Defence Review was widely and rightly welcomed. Of course, it is necessary consistently to review, revise and structure our defence forces for the times that they live in. But there are great dangers in concentrating our efforts to too great an extent on one emerging threat—a knee-jerk reaction—forgetting that there are other threats which have not gone away and for which we should still be prepared.

Are the Government seriously considering grasping a peace dividend from Northern Ireland? Even if there is peace and agreement—and let us pray that there is—

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surely the resources should be used elsewhere and could solve many of the services' problems—in particular, those of the Army. Alarm bells are ringing in the services and I am bound to say that the Secretary of State's speech at the Royal United Services Institute earlier this year did not reassure them. Phrases such as,

    "measuring the capability of our Armed Forces by the number of units or platforms in their possession will no longer be significant",


    "the need for new approaches to our Forces' structure",

do not reassure.

Our servicemen and women are highly intelligent but they have become sceptical and should not be flannelled. If, because of budgeting necessities, the Government's plans really mean that they will be less capable, under-resourced, even more over-committed and still taken for granted, they will see through those plans very quickly and our defence and security will be seriously damaged. Talking about lighter, more flexible, more mobile and network-centric forces and effects-led capability does not mean that they will necessarily be able to fight better when called upon to do so and to carry out the manpower-heavy tasks such as those being carried out in Iraq today and tomorrow, most often by the infantry.

I find the situation in relation to European defence difficult to understand at present. Like many, I feel that it is difficult to grasp what the Government have achieved and what they want to achieve, despite what the Minister said. Are we witnessing a diplomatic and political fudge with little military value? The Government's red lines seem to move. I believe passionately in European defence if it is about European capability. That is thoroughly sensible. But Europe's capability has not improved at all since St Malo.

I do not believe that we should be part of a force which is a rival to, as opposed to a partner of, the United States of America. The Prime Minister and, today, the Minister have assured us that the Europeans will not be rivals. But other Europeans, particularly the French, do not take the same view. It seems that we are being moved off our solid ground, which we should still be holding.

We are now talking of a planning staff for European defence of some 30 to 40 in Belgium. Do we need such an organisation when hundreds of staff officers already in Belgium are quite capable of carrying out European planning? One thing of which we can be sure is that the 30 or 40 in the European planning cell will grow in number. It will have to do so if the European planning cell by itself is to plan properly. We shall also have to supply high-quality staff officers, who, in my opinion, would be better and more usefully employed elsewhere, probably with their regiments.

The defence budget is tight. Are we not about to fund unnecessary duplication, which will complicate military life and make us no safer? The type of operations which the Europeans have carried out successfully and are able to undertake can be launched now. The Balkans and Africa are witnesses to that. They did not need a planning cell to do it.

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Lastly, I know that the services welcome the new shadow defence Minister. He is well known to servicemen and service women. He understands defence and has been a staunch supporter over the years. He has a strong team around him. But I know that the fact that he is not in the shadow Cabinet has been disappointing for those serving and that it sends the wrong message. Will they be spoken up for properly at such a critical and, for many of them, dangerous time?

4.25 p.m.

Lord Grenfell: My Lords, I, too, very much look forward to the maiden speech of the noble and gallant Lord, Lord Boyce, and also to that of the right reverend Prelate the Bishop of Liverpool.

Thus far, the debate has been largely on the subject of defence, but now I invite your Lordships to change the focus a little. We have before us a substantial report entitled The Future of Europe—the Convention's Draft Constitutional Treaty—a matter that has much exercised the noble Lord, Lord Howell of Guildford. With the leave of the House, I shall avail myself of the dispensation offered by the noble Lord the Captain of the Gentlemen-at-Arms and possibly stray beyond the six minutes that most speakers will have available. However, I assure your Lordships that I shall make every effort not to trespass upon eternity in my remarks.

First, the report before your Lordships' House reflects the collective effort of the European Select Committee, which I had the honour to chair, and its six sub-committees and their respective Clerks, our Legal Adviser and his Assistant and our excellent European research staff. It benefited from a number of our earlier reports, which analysed in detail the succession of articles as they emanated from the convention. In all, some 80 Members of your Lordships' House and staff participated in that effort. I thank all of them warmly and pay special tribute to the Clerk of the Select Committee, Simon Burton, whose work was extraordinary in pulling together the extensive body of work into an excellent draft text, and to the members of the small working group of the Select Committee, which reviewed the draft before it was sent to the Select Committee for approval.

I also thank the Government very warmly for their comprehensive and thoughtful response to our report. Except in a few cases, the response shows a broad measure of agreement with our conclusions and recommendations. There are 108 conclusions and recommendations, but I assure the House that that does not signify that we found 108 reasons to disagree with the text of the treaty—far from it. Of course, we make recommendations for changes in the treaty text in a number of areas, but a greater proportion of the 108 recommendations and conclusions was addressed to our own Government, asking for further explanation or elucidation.

The report is, I believe, readable, and I commend it to your Lordships as a fair guide to what is of particular interest and importance in the draft treaty.

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It was published not quite three weeks after the intergovernmental conference opened in Rome on 4th October, and, of course, much water has passed under the bridges of the Tiber since then. I thus feel that I can usefully use my speaking time in this debate to review briefly the overarching findings of our report and then, equally briefly, to refer to some of the most important issues as yet unresolved in the IGC and relate them to the conclusions that we reached in our own report.

We started from the position that, with 10 new countries set to join the EU next May, it was necessary to agree a new treaty now as it was generally considered that the present institutional structure was not satisfactory for a Union of 25 states. Accordingly, the draft treaty which emerged from the Convention on the Future of Europe reforms the EU's institutions, changes the way that the EU works, including granting the Union some new competences, and, most importantly, enhances the role of national parliaments.

The treaty is, however, largely composed of the text of the current treaties—that is, those stretching from the founding Rome Treaty through the Single European Act and on through the treaties of Maastricht, Amsterdam and Nice. Thus, much of what the new draft treaty provides for is not new. A considerable range of matters in those earlier treaties have already become subject to EU law, and we concluded, although dividing by six to two in a vote in the committee, that the extension of European Union law in the treaty seems relatively limited in comparison with earlier treaties.

Our report sought to establish whether the draft treaty was good for the European Union and at the same time good for the United Kingdom. We, therefore, put it to four tests. The first was whether it confirmed the European Union as a union of member states rather than a state in its own right. The committee's answer to that question was yes, but it was not unanimous. The committee members present divided eight to one in favour.

The second and third tests were linked. Would the treaty deliver significant improvements in democracy, accountability and transparency, would it make any difference to the citizens and would it bring the European Union institutions closer to them? We concluded that overall it would make some contribution to democracy and accountability in the Union; for example, the treaty sets out very clearly for the first time what the European Union is. At the same time we recognise that as a union of member states, rather than a state in its own right, it cannot provide some of the direct mechanisms of democracy such as the power to remove a government that would exist in a state. Therefore, a key theme of our report is that national parliaments should do more, both individually and collectively, to hold their governments, who take so many of the decisions, to full account.

That is all the more important because, as we concluded in May in one of our earlier reports on the convention's ongoing work, the balance of power in

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the Union would shift from the Commission to the member states if certain of the tabled proposals for institutional reform were adopted.

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