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The contributions that we have had have been serious and informed. I respect the views of those who have spoken, even if I cannot accept them all. I will endeavour to respond to much of what has been said, but it would be impossible to respond to every detail. Where people have asked me to write, I will. I hope to respond to some of the themes that have run through the speeches, because certain key areas concern many Members of the House.

I start by stating this Government’s gratitude—the debt of gratitude that we all have—to the members of the Armed Forces and those who support them around the world, in particular the service men and women who are based in Iraq and in Afghanistan and who are playing an indispensable role, despite very difficult and dangerous circumstances. They can be justifiably proud of what they have done to help the security and stability of those two countries and, along with many who have spoken this afternoon, I pay tribute to their professionalism and commitment.

I will say a few words about Iraq to start with. The noble Lords, Lord Chidgey and Lord Astor, talked about the extra contributions that we would like to make in different places. We are working in Iraq with a very significant commitment, which we hope will decline in the not-too-distant future. There have been problems, as the noble Lord, Lord Chidgey, mentioned. He asked me about paratroopers and the availability of Challengers for training. I am told that 318 are available for training, so that should not be the problem that was indicated to him. He is welcome to come back to me with any other aspect of that matter.

We have now handed over three of the provinces to Iraqi control. Iraqi forces have now taken on the primary role of providing security in Basra city. As the Prime Minister of Iraq confirmed on 29 October, the transfer of Basra province to Iraqi control will take place in December. That will be the last province within the British-led area to transition. This is a very significant achievement and we should be proud of what has happened there, even though our Armed Forces are still facing a difficult job in training and mentoring the Iraqi security force.

Adjustments to the number of UK forces in Iraq are based on conditions and not on arbitrary timetables, as other Ministers have said in the past. This approach has allowed us to reduce the number of our forces in Iraq and gives us hope that we can further reduce our force levels in southern Iraq to around 2,500 from spring 2008. But we still have an important job to do. We will honour the commitment that we have made and remain in Iraq until we, the Iraqi Government and our coalition partners are confident that the Iraqi security forces can operate without our support.

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Several noble Lords mentioned the situation in Afghanistan, where we are deployed in support of a UN-authorised, NATO-led mission: the International Security Assistance Force. ISAF is there to support the Government of Afghanistan as they seek to extend their authority across the entire country, which is necessary to improve security and facilitate development and reconstruction. Our Armed Forces have already contributed significantly to moving the country from a pariah state that harboured international terrorism to one that is making progress in development. The noble Earl, Lord Sandwich, asked about the relationship between anti-terrorism activity and rebuilding a country. From our point of view, it is clear that in order to combat terrorism developed in that country, you have to help in reconstruction. The two go hand in hand. We acknowledge that it is a long-term commitment but we are determined that Afghanistan should not be allowed to become a failed state again. The noble Lords, Lord Astor and Lord Chidgey, mentioned that it would be helpful—and, I think, only reasonable—if other countries undertook their fair share of that burden, because that has not necessarily been the case in the past.

A great deal of this debate has concentrated on spending and the defence budget. I was advised in a very friendly way not to mention the settlement, but I have to confirm that it was 1.5 per cent in real terms. I mention it because I need to point out that this is the longest period of sustained real-terms growth in planned defence expenditure since the 1980s. That is no mean achievement and something that we should not dismiss. Noble Lords may want us to spend more but they must recognise that there has been a very significant increase in the recent past. This new spending allows us to proceed with two new aircraft carriers. They will not be built in France, as the noble and gallant Lord, Lord Inge, suggested, although we will discuss the matter with the French because they have an interest in having a similar facility. We are also investing a great deal in issues that concern families, as many noble Lords mentioned in terms of the covenant. I will say a word about—

Lord Bramall: My Lords, I am sorry to interrupt the noble Baroness, but it would be most helpful, because it is very relevant to what she has just said, if she could provide—her department ought to be able to provide this—the exact rate of inflation of defence expenditure. Everything that she said about sustained growth is relevant only when you know what the actual defence expenditure is.

Baroness Taylor of Bolton: My Lords, I have heard people talk about defence inflation, which is what the noble and gallant Lord is referring to, and I have asked about it, because clearly every aircraft, ship and piece of equipment is technologically more advanced than its predecessor and therefore very often costs more. However, the capabilities of the new equipment that is being bought often mean that you require fewer of the relevant item than was the case in the past. So it is not simply a question of putting a

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percentage on defence inflation in the way that is sometimes suggested, nor is it simply one of looking at defence spending as a proportion of GDP. The situation is more complex than that because in the past 10 years we have had a very healthy economy and we are now able to spend more than we previously did on otherwise neglected areas such as health and education. Therefore, we have been able to maintain a great deal of defence spending while bringing up budgets in other areas. I remind the House that the UK is the second highest spending country on defence in the world, behind only the United States. Defence spending includes not only the defence budget but the additional costs of operations and urgent operational requirements, about which I will say something later.

The Treasury has provided some £6.6 billion from the reserve to support the additional cost of operations, which includes £2.3 billion specifically for urgent operational requirements. That is an indication of the degree of government commitment. We have seen from the comments expressed by many serving officers—the noble and gallant Lord, Lord Guthrie, acknowledged this—that the equipment now in theatre is better than has ever been the case. That is right and proper, and we should place that on record.

As many speakers have said, we need to balance the short-term and long-term defence needs. That is why we are looking hard at our longer-term needs, with things that we are going to buy such as the Astute class submarines and the Type 45 destroyers. There are problems and pressures in certain areas that we wish we could avoid and that we have taken action to do what we can about. The noble Baroness, Lady Park, mentioned helicopters in Afghanistan. We have acknowledged that we would like more helicopters there, but we have enough for essential work. We have recently purchased six additional Merlin helicopters and we are converting the eight Chinook mark 3s so that they are available to operations more quickly. Other measures, such as the recent deployment of Sea King helicopters to Afghanistan, will help to relieve the pressures on the forces that are already deployed there. We have made some progress there.

Several noble Lords have referred to urgent operational requirements, and I shall clarify that situation. We realise that when deployed on operations the Armed Forces will face challenges that could not have been anticipated in the initial planning. In those situations, it is necessary to procure new equipment quickly to counter those challenges. Through the urgent operational requirements process, we have been able to provide significant additional equipment, including enhanced body armour and Bulldog, Mastiff and Viking vehicles, all of which are making a significant difference. Colonel Westley has said:

I was not sure why the noble and gallant Lord, Lord Boyce, was so critical of the UORs, because most people who have had experience of them understand that they have vastly improved the situation for those who are in theatre.

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Lord Boyce: My Lords, I hope that the noble Baroness will not mind my interrupting her to clarify one point. A number of the UORs that are purchased are to put equipment into place that has previously been removed because of a lack of budgetary endowment in the defence budget. It is not new equipment; it is often equipment that was taken out in a budgetary spending round and is then reinserted to meet the urgent operational requirements. While the noble Baroness is on her equipment paragraph, as it were, perhaps I may point out that many noble Lords have agreed that equipment in the theatre is satisfactory. The important point is that the second line, about to become the first line, is impoverished in terms of equipment. That is dangerous. People are putting their lives at risk because they cannot train on the equipment that they will meet when they get to the theatre. That is the problem that the Government are not addressing.

Baroness Taylor of Bolton: My Lords, much of the new equipment that we have developed because of problems in the theatre will be incorporated into mainstream planning. That is only normal and right. Perhaps I could tell the House of the new arrangement entered into with the Treasury for funding UORs and clarify the point that seems to have been misleading some people about the clawback that it was suggested might occur. The new approach with the Treasury means that, in the three years of the Comprehensive Spending Review, the reserve will continue to pay all additional costs of operations up front and will pay outright for UORs up to a mutually agreed total. Beyond that, the MoD and the Treasury will split the cost 50:50, with the MoD having to repay its share two years later, by which time there could have been adjustments in the programme. The Treasury will give an extra £200 million in 2010-11 to ensure that the new arrangements are cost-neutral to defence.

Earl Attlee: My Lords, will the Minister answer my point about whether there is any budget provision for the maintenance of UORs?

Baroness Taylor of Bolton: My Lords, once the UORs are adapted into mainstream equipment, they are dealt with in exactly the same way as anything else in terms of maintenance. That of course is covered by operational costs when the equipment is in operation.

I wanted to say a word about the suggestion that the Treasury is clawing back more than the £2 billion spent already on UORs. That is not correct. The only difference is the new arrangements for the future; I have already outlined what they will be.

Perhaps I may say a few words about such matters as harmony and morale. I was glad to hear Members of this House echoing Nicholas Soames MP, who said:

Noble Lords have explained why we should expect that to be the case in an operational situation and it is right that that is put on record, because there have been suggestions that morale is not always so high. It

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is important not only that morale is high, but that we acknowledge it and work to maintain it. We do not want to downplay the difficulties that some individuals and their families have been placed in and we realise that the scale of the operations has meant that harmony guidelines on intervals between operational tours have been breached for some personnel, as mentioned by the noble Baroness, Lady Park, and the noble and learned Lord, Lord Mayhew. The figures that I have suggest that the breach of harmony is less than 1 per cent for the Royal Navy and is running at 10.3 per cent for the Army and 6.2 per cent for the RAF. There are of course pinch points with particular specialisms that make this worse in certain areas, but those are the figures that we have. I have to say that we expect our drawdown of forces in Iraq, the Balkans and Northern Ireland to help us to reduce those pressures and we are hopeful that we will get the Armed Forces nearer to the normal operational cycle. However, we recognise the difficulties that exist for many people.

Perhaps I may say a word about the covenant, which is important to many people in this House and many more outside it. A great deal has been said about the military covenant, so I must start by assuring the House that the Government are fully committed to meeting their responsibility for serving personnel, veterans and their families. We have overseen a very long-standing programme of improvements in service pay, accommodation, health and welfare provision and force protection. Although we recognise that more can be done, we are making real progress on some of these problems, which have existed for a very long time indeed, far longer than this Government have been in power. Unfortunately, I therefore have to reject what the noble Viscount, Lord Slim, said about the covenant being broken. I hear what he says and I understand his concerns and the concerns of many. However, the obligations are there and accepted. Our proposed changes in compensation, improvements to health facilities and—perhaps particularly—recently in accommodation are significant.

I was asked about fast-tracking within the health service and whether it would apply to everyone. I say as an aside that there was a pilot project in Hull where all veterans were accepted in that way, and the Department of Health is assessing it with a view to rolling out improvements. I think that the House will welcome that.

I should like to say a word about accommodation, another subject that featured significantly in the debate. It is another historical problem and people have been working very hard in recent years to improve the situation. For example, in the United Kingdom, 12,242 service family houses have been built or significantly upgraded in the past six years; the target had been only 7,100. The Comprehensive Spending Review settlement has guaranteed a ring-fenced £550 million, which, for noble Lords who mentioned it, I can confirm is from the sale of the Chelsea Barracks. It is ring-fenced money for investment in new accommodation and refurbishment. In addition, my right honourable friend the Secretary of State recently announced that a further £8 million will be made available over the next three years for the second phase of the single living accommodation modernisation

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project, which is 20 per cent higher than previous levels. It will allow 1,350 new en suite bed spaces to be built. As my noble friend Lady Dean said, expectations change and what was acceptable just a few years ago is not acceptable today. That is only part of our £5 billion commitment on accommodation over the next few years.

I should say a word on inquests, an issue which has clearly caused concern to a number of people. I know from meetings with ministerial colleagues that the issue causes them great concern as well. The Ministry of Justice has recently increased funding to coroners’ courts with a view to helping alleviate the backlog. We recognise the distress that delays can cause to the families of people killed in action. We are conscious of the problem and are keen to move forward and help with it.

Mention was made of the new Command Paper that the Government will be introducing on personnel issues and related matters. We recognise a duty to serving personnel, their families and veterans. Earlier this month, my ministerial colleagues therefore announced that we will have a cross-government strategy for supporting members of the defence community. It will cover all areas of support, including accommodation, medical care, welfare and education. The work will be led my right honourable friend the Minister of State for the Armed Forces and will involve the military chain of command. It will outline future initiatives and measures, what we have done to date and how we can continue to make improvements. It will be the first time that any Government have developed a cross-Whitehall strategy for the Armed Forces.

The noble and gallant Lord, Lord Bramall, mentioned the treatment of returning soldiers. That fits in well with our comprehensive approach, as we are going to have a parallel study into encouraging greater engagement, understanding and pride in the UK Armed Forces by the nation as a whole. I am sure from his comments that the noble Lord, Lord Lyell, would welcome that as well. I would like to make many points—

Lord Chidgey: My Lords, I am most grateful to the noble Baroness for allowing me to clarify one point about the Command Paper that she is promising us. Will she assure the House that the shortage of personnel in the military medical services, which I mentioned in my contribution, will be addressed as soon as possible and that we will not have to wait as long as it takes for government policies to come to the House in various papers?

Baroness Taylor of Bolton: My Lords, many other things are happening as well. My honourable friend the Parliamentary Under-Secretary in the department has looked at many issues, such as mental health, and has made significant progress. This is not the only avenue for development and it will not stop other things happening or delay the progress that is being made. I hope that that is encouraging.

I conclude by reassuring my noble friend that I absolutely believe that there is no such thing as a stupid question and that one should not be afraid to

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ask. I have not been short of advice either within the House or outside it. Perhaps I may reassure him on the C17s. The order for the sixth one was signed in July this year. I am sure that he will find that reassuring.

As a newcomer to this area—

Lord King of Bridgwater: My Lords, the Minister said that she was concluding, but one further subject received considerable attention from noble Lords who spoke in the debate: the position of the Secretary of State. I entirely realise why she is not able to reply to that herself in this debate, but she may recall that I made a single request and I ask her, please, to give me an answer. Will she ensure that a copy of Hansard of this debate is delivered personally to the Prime Minister and that he is encouraged to read it? Within the House there are voices—I do not include mine, as it is some time since I was involved in defence matters—to which the Prime Minister would be well advised to listen. I believe that it is very important that he hears those views.

Baroness Taylor of Bolton: My Lords, I can assure the House that the Prime Minister takes defence matters very seriously. He has spent a great deal of time on defence and security issues since he became Prime Minister and indeed before that. When I was chair of the Intelligence and Security Committee, I knew that he took an interest. On the specific request, I will send a copy of Hansard and point out the suggestion made by the noble Lord because I am sure that the Prime Minister will take a great deal of interest in all debates on matters of this kind.

I thank the House for the advice that it has given me. I hope to write to noble Lords who have asked me to reply on specific points in that way. This is a very serious subject indeed. We know that we must be conscious of present demands and future needs, but we are certainly sure of our obligations to all in the Armed Forces and to the families and veterans. That will remain one of the priorities of the department.

4.13 pm

Baroness Park of Monmouth: My Lords, before my very brief peroration, I point out to the Minister that both the NAO and the families unit—the organisation of the noble Baroness, Lady Dean—have come out with the greatest detail on the problems of harmony. It really exists and cannot be put off with more and more discussions by all sorts of committees that are set up to discuss the matter again. It is a fact that has to be faced.

I thank all noble Lords for a splendidly vigorous, passionate and well informed debate. I congratulate the Minister on her baptism of fire, which she seems to have come through very well. I cannot help noticing, however, that the Benches behind the Minister have been singularly empty. That has been more than made up for by two remarkable members of her party—the noble Baroness, Lady Dean, and the noble Lord, Lord Gilbert—who have, I suppose had the strength of 10. It would have been nice, however, if we had seen a little more consideration of

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and interest in a subject that is a national issue, not a party one. It is sad that those Benches are so empty.

I hope that both the armed services and the public will hear all that we have said today. The man who I want to listen, as we all do, is the Prime Minister. He admires courage, has spoken for veterans and seems happy to use the Armed Forces as the powerful policy arm that they are. Let him give us one Secretary of State, not two halves; that would make an immense difference and send a signal that he is actually listening. Lastly, I would settle for the return of the noble Lord, Lord Drayson, in some capacity, as a down payment. I beg leave to withdraw the Motion for Papers.

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