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We will continue to reduce the number of civilians working in the Ministry of Defence. We recognise the importance of the civilian workforce and the critical outputs it delivers. That is why at the Pre-Budget Report we announced an independent study into the shape and size of the civilian workforce, including the distribution of tasks between civilian and military personnel. This study will be undertaken by Gerry Grimstone and will inform the defence review. Without prejudicing its outcome, we would expect that we will be able to continue reducing the overall size of the civilian workforce, above the 45,000 reduction already made since 1997. This is not just about doing more

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with less. We will also need to make hard decisions about what we can stop doing, and how we can bear down on other costs.

The other key adjustments we are making to the current programme are as follows. In line with our current aspirations to reduce to two fast-jet types-the Typhoon and Joint Strike Fighter-we will pursue without delay the Typhoon future capability programme phase 2. This is fundamental to development of its multi-role capability and integration with the latest weapons. We will reduce now the size of our Harrier fast-jet force by one squadron, close RAF Cottesmore and consolidate the Harrier force at RAF Wittering. This will maintain our joint carrier-based combat air capability. We plan to reduce our Tornado and Harrier force by a further one or two squadrons. Decisions on the make-up of our future force will be taken in the defence review.

We intend to withdraw the Nimrod MR2 force 12 months early and slow the introduction of the MRA4 force. This will have an impact on our use of RAF Kinloss, but there is no change to our assumptions on the future basing of the MRA4 force at this stage. The decision to withdraw MR2 has been taken for financial reasons and is unconnected to the report by Mr Haddon-Cave into the circumstances that led to the tragic loss of Nimrod XV230 in Afghanistan. Mr Haddon-Cave was very clear in his report that the aircraft remains safe to fly. I will be making a further Statement to the House in respect of Mr Haddon-Cave's report tomorrow.

We intend temporarily to reduce some aspects of Army training which are not required for current operations. We will also take one survey ship and one minehunter out of service early; cancel the current competition for unprotected utility vehicles and defer the programme for two years; and bring forward the planned reduction of some of the older maritime Lynx and Merlin Mark 1 aircraft, prior to the transition to the more capable Wildcat and Merlin Mark 2. We will spend less next year than previously planned on the wider defence estate but will continue to prioritise investment in both service family accommodation and single-living accommodation.

The measures I have set out will also have implications for service personnel numbers. The details have not yet been finalised, but the emphasis will be on prioritising our manpower for operations in Afghanistan. Changes will be targeted to avoid affecting personnel involved in current operations. Reductions in service personnel numbers will be managed mainly by slowing recruitment and releasing some personnel in accordance with their contracts. I appreciate that these changes will be difficult for many service and civilian personnel, their families and the communities in which they are based. I am fully aware of the consequences and will support those affected.

In making these choices, I have had to consider that the Government and the Opposition parties are committed to carrying out a defence review after the next election. The Green Paper, to be published early in the new year, will explain the Government's vision of what that review should encompass. The measures reflect our

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stated priority of support for the Afghanistan campaign and continued investment in new capabilities with enduring military benefit.

This is a difficult balance to strike, but I am confident that we have got it right and that that will be demonstrated where it matters most-on the front line, where our brave service men and women, supported by MoD civilians, are fighting for the future of Afghanistan and the security of our country".

My Lords, that concludes the Statement.

4.42 pm

Lord Astor of Hever: We, too, on these Benches send our condolences to the family and friends of Lance Corporal Drane of the 1st Battalion The Royal Anglian Regiment and Serjeant Amer of the 1st Battalion The Coldstream Guards.

I start by thanking the noble Baroness for repeating the Statement, although many noble Lords will have read much of it in today's media. This morning Quentin Davies said on the BBC news that,

I want to make it absolutely clear that no member of the Opposition Front-Bench defence team has ever said that we will cancel the carriers or the A400M. I would be grateful if the Minister could confirm that the Government clearly understand the Opposition's position. I know that we are close to a general election, but it is unacceptable that a defence Minister of the Crown should be peddling untruths like this for political gain. It is very damaging to the morale of our Armed Forces.

Turning to the Statement, the Government tell us that they have sought not to cut capabilities in advance of the SDR, but many people will see today's Statement as a mini SDR in its own right. What will be the effect of the Pre-Budget Report on the MoD core budget, given that the Institute of Fiscal Studies has said that non-protected government departments, including defence, must bear cuts of 16 per cent over the three-year period of the PBR? We welcome the announcement of new Chinook helicopters but it would not have been necessary had the Prime Minister not, against all advice, cut £1.4 billion from the helicopter programme from 2004. Those Chinooks could have been on the front line today. Instead they will not be available until at least 2013 when, according to the Prime Minister, we will, I hope, have transferred overall responsibility to the Afghanistan national army.

Can I be absolutely clear that we are procuring a further 24 new Chinooks-that is 22, plus a further two to replace those destroyed in Afghanistan? What version will these new Chinooks be? Will they be the same as our mark 3s or will they be built to US army specifications? Can the noble Baroness confirm that they will be fully supported with the correct number of adequately trained pilots and maintenance staff?

In light of the NAO report and numerous other projects that have been delayed, what assurances can the Minister give the House that these Chinooks will not also be cut or delayed in arriving?How will our submarines be protected following the withdrawal of

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the Nimrod MR2 next spring? How will the requirement for long-range rescue and maritime reconnaissance be provided once the Nimrods are gone? Can the Minister confirm that the production timetable for the Astute submarines will not be slowed down? Do the Government intend to subscribe to the €5 billion cash call by EADS to fund the cost of the five-year delayed A400M?

We welcome the additional £80 million for communications facilities for the Special Forces, ISTAR and the doubling of Reaper capability, as well as a new C-17 to strengthen the air bridge, which is absolutely vital for the morale of our Armed Forces. To succeed in Afghanistan we must win the counter-IED fight, and I declare an interest as the honorary colonel of a TA regiment with a speciality in this field.

I therefore welcome the pledge of new money to cover the cost of 400 high-tech hand-held devices, which will help soldiers to find IEDs and allow the Army to set up a new analysis centre to scrutinise intelligence from the combat zone. Can the noble Baroness confirm that there will be no cut back in the training of soldiers to counter IEDs? Training of this sort is expensive and is therefore constantly a target for savings measures, but it is vital as our enemy is constantly adapting and has the ability to do so as fast, if not faster, than ourselves.

To enable these changes to happen there will have to be huge cuts across the board. Today the Prime Minister has blithely promised £1.5 billion to sign up to the Copenhagen climate change deal. However, despite the fact that we are fighting a very nasty war in Afghanistan, there is no new money for defence.

4.47 pm

Lord Lee of Trafford: My Lords, first, I enjoin these Benches in the earlier tribute. I also thank the noble Baroness for her Christmas card which I received this morning.

Today's Future Defence Programme Statement, heavily leaked, as the noble Lord, Lord Astor, mentioned, and produced just before we rise, is yet another example of the spin and shambles which characterise this Government's defence policy. The macro story is of a Government who have steadily reduced the spending on defence as a proportion of gross domestic product, have failed to carry out a defence review for over 10 years, and yet have involved our nation in two major and controversial conflicts.

We have had a Chancellor of the Exchequer and now Prime Minister with little interest in defence, who remained semi-detached from the war in Afghanistan until very recently. He now tells us that he has drawn "great confidence" from his recent Afghan visit. No doubt we should be reassured by that. However, I note more seriously the observation by David Richards, the Chief of the General Staff, in the Sunday Times on 6 December:

"I'd characterise what has happened over the last eight years as strategic failure".

The Gray report on procurement, confirmed by the National Audit Office, discloses a massive underfunding of our current procurement programme. The MoD is effectively bankrupt. Knowing the state of its finances,

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how could the Government go ahead with our major new carriers, whatever their merits, without providing additional resources? It is rather like a family threatened by the bailiffs, the bank and numerous credit card companies, deciding that the right course of action is to order a new Rolls Royce.

Of course, like the noble Lord who spoke earlier, we welcome much in today's Statement, particularly the 22 new Chinooks and the additional C17 to strengthen our overstretched transport fleet, and additional equipment to combat the IED threat. It is no good the Prime Minister now masquerading as Father Christmas in a flak jacket. The Government have been in power for 12 years. We have all been pleading for more helicopters for years. Why place the order for more Chinooks only now?

I ask the noble Baroness specifically what aspects of Army training will be temporarily reduced. Which areas of the defence estate will have less spent on them compared with what was previously planned? Will we not, once again, end up paying more in the long term? Approximately what number of RAF personnel will no longer be required following the base closure, the focus on just two fast jets, the Nimrod force changes and helicopter rationalisation?

Virtually all the announcements in today's Statement should sensibly have been made after a defence review, not before it, aligning the review's conclusions with appropriate funding. As with the recent volte face on Territorial Army training, this Government's defence policy is all over the place, and the sooner we have a general election, the better.

4.50 pm

Baroness Taylor of Bolton: My Lords, I start by welcoming the areas where there was some agreement. It is clear that the decision to have an extra 22 Chinook helicopters, together with the decisions on the C-17 and the extra investment in work against IEDs, which are of course very dangerous for our people in Afghanistan, have all been welcomed. It is important to remember the changing nature of the situation that we are facing on operations. Indeed, the noble Lord, Lord Astor, acknowledged that the enemy is adapting very quickly. That is one reason why we have to be responsive, why we have urgent operational requirements and why it is right that we step back from time to time and look at our equipment priorities. We are now trying to make sure that we concentrate our attention on areas where operations lessons have been learnt but where there are longer-term implications. None of us can say exactly what the future threats will be, but we know that we will have to be adaptable and flexible in all that we do. It is right that we learn those lessons and think ahead as we do so.

Perhaps I may pick up on what the noble Lord, Lord Astor, said about my colleague, the Minister with responsibility for defence equipment and support. I did not hear that particular radio interview but I am certainly aware that no single party has said that it will increase defence expenditure, although there have been rumours about what will and will not be cancelled by others. I should like this House, and indeed the other place, to have a very mature debate on what the

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priorities for defence should be and what equipment decisions should follow from that, as from many other decisions. That is one reason why it is very appropriate that we have a Green Paper in advance of the Strategic Defence Review, and I hope that we will be able to debate that in this House with those who have a genuine interest in exploring the future. The one thing that we do know is that the next threat will not be the same as the previous one: we are in a very fast-changing situation with globalisation and new challenges. The noble Lord, Lord Astor, mentioned money being spent on climate change, but there are of course security implications in climate change. Given the nature of the possible contributors, I hope that this House will look forward to having a non-political, mature and wise debate on that Green Paper in advance of any decisions made in the Strategic Defence Review.

I repeated in the Statement the spending that the Secretary of State announced when he made his Statement in another place. Defence expenditure is not being cut. So far as concerns defence expenditure, the Comprehensive Spending Review settlement stands-that is, £35.4 billion, which, as I said, is 10 per cent more in real terms than in 1997. The extra £14 billion that the Treasury has put in for operations since 2002 is an exceptional amount of money. It has been very important and shows a degree of commitment that perhaps belies the noble Lord's description of the Chancellor, now the Prime Minister. He suggested that the Prime Minister was semi-detached. A Chancellor who allows that amount of spending from the reserve, and a Prime Minister who has overseen an increase in spending from the reserve, is hardly semi-detached. His weekend visit to the front line, which I understand is the first such visit by a Prime Minister for a very long time, shows a very high level of commitment.

The noble Lord, Lord Lee, asked how we could allow the carriers to go ahead. We allowed the carriers to go ahead because they allowed for a level of deployability that could perhaps not be matched in any other way, which was important.

The helicopter issue has been raised by both of the noble Lords. They do not think that the Ministers at the time plucked a cut in anticipated spending on helicopters out of the air. That was part of a review that was going on at that time about what was appropriate. Since that time we have had very significant changes and improvements in our helicopter capability; indeed, the number of platforms and the percentage increase in flying hours in Afghanistan have increased very dramatically in recent years. It is true to say that we are now spending more on helicopters than was anticipated in 2004 to 2005. We are consolidating four types of helicopters, which should improve our position in terms of support, maintenance and the training of pilots and all those required.

I was asked whether we would make sure that the Chinooks that we are buying off the shelf from the United States and then making adjustments to-the quickest way of obtaining them and making them deployable-would have adequately trained pilots and maintenance staff. Of course we need all of that back up. The improvements that we have been able to make in flying hours in Afghanistan have been precisely

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because we have invested in maintenance crews and the training of pilots. That is important and something that we can do.

In terms of Astute, we are looking at the production drumbeat. We are having a review of that with industry, which will be reporting in spring of next year, not least because of the practical difficulties that industry has been encountering. It is extremely important that we have a sustainable drumbeat that meets everybody's needs.

In terms of A400M, we all know that this has been a very difficult and ambitious project. It should be a very good plane. We are very keen to have it, but we are not keen to have it at any price. We have to make sure that we can afford it and that it will deliver, in a timely way, some of the capacity that we believe we need.

I was asked whether we should be looking at training for the Army and where there might be cuts. The Statement itself says that the priority will be given to all training that is relevant to the operations in Afghanistan. Cuts will come on more routine exercises that are not pertinent to Afghanistan. In terms of the estate, I was asked where there we will be spending. We are giving priority to service family accommodation to Project SLAM. Office accommodation and things of that kind will be affected.

I am not in a position to say what the situation is in terms of RAF personnel. It is very early days. We will be happy to keep people posted. At the moment it is not possible to make proper estimates. I was asked whether it would be better if we were doing this after the defence review. The decisions that we have made, which have the support of the Chief of the Defence Staff and all the service chiefs, make sure that we do not take out any vital capability and that we do not in that way pre-empt the Strategic Defence Review. That has been one of the priorities in looking at this whole process. Therefore, we have made very balanced decisions.

4.59 pm

Lord King of Bridgwater: My Lords, the noble Baroness asked for a mature debate. Does she recognise that the first mature point to make in the defence field is that if you are fighting a war, you do not take the cost of it out of the peacetime defence budget? She says that defence expenditure has not been cut, but if the war is not being funded fully out of the reserve then the defence budget is being cut, and that is precisely what is happening.

Although some of the items of equipment are welcome, and some are long overdue, we are in the eighth year of a war and the Government have just announced an order for new helicopters which, if we are lucky, we will receive in the 11th year of the war. So we face a very grave situation. The courage and bravery of our troops deserves a united and consistent approach to the challenges we face and a recognition that a war of this kind must be funded. I address merely the first Gulf War: not only was it funded out of the reserve, a number of the allies whose interests were supported by our activities helped to fund it as well. It certainly did not come out of a peacetime defence budget.

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This is a most muddled Statement. It says that a number of decisions have been taken but also states,

Is that not pre-empting a defence review? It is quite clear that such a review is now urgent, as are the earliest publication of the Green Paper and the earliest possible addressing of these issues. While the Government jump backwards and forwards between what may be our future capabilities and what are our urgent priorities, it does no service to the courage and bravery of our forces, who are facing a very difficult time.

Baroness Taylor of Bolton: My Lords, I recognise the expertise that the noble Lord brings to this debate, but I would remind him that the C17 and indeed the new helicopters that we have announced today are not just for Afghanistan; they will be used in any potential conflict. They will be part of the core defence equipment for a very long time. Therefore it is appropriate that some of this funding should, as has always been the case, come from the core budget. I also remind him that the Statement says that today the Treasury is giving another £280 million from the reserve for some of the extra items that he and others have welcomed. I return to a point that I made earlier: £14 billion from the Treasury in the past eight years is no mean amount of money by anybody's standards. It shows the very high level of commitment that everyone in government has in this regard.

The noble Lord asked for the earliest possible publication of the Green Paper. The work on that is very well advanced and a great deal of thought-including some outside consultation-has been given to what should go into it. It will deal with the broad issues of the nature of the threat and what we might have to face in the future. While I am not a business manager in this House, I would hope that we can find time for a debate so that all who want to contribute can have their voices heard.

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