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House of Lords

Friday, 12 November 2010.

10 am

Prayers-read by the Lord Bishop of Derby.

Lord Rogers of Riverside took the oath.

Arrangement of Business


10.06 am

Lord Shutt of Greetland: My Lords, it is a firm convention that the House rises by about 3 pm on a Friday, so noble Lords might bear that in mind when making their contributions. However, 49 speakers are signed up for today's debate. If Back-Bench contributions are kept to around seven minutes, the House should be able to rise at around 5 pm.

Strategic Defence and Security Review

Motion to Take Note

10.07 am

Moved by Lord Astor of Hever

The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever): My Lords, it gives me great pleasure to open this debate on the strategic defence and security review.

First, I am sure that the whole House will wish to join me in offering sincere condolences to the family and friends of Senior Aircraftman Scott Hughes of 1 Squadron, Royal Air Force Regiment, who died in Cyprus on his way back to the UK from Afghanistan. At this time of remembrance, when the nation keeps covenant with those who have made the ultimate sacrifice by giving their lives in action, I am sure that I speak for the whole House in recognising the exceptional job that our Armed Forces do, wherever they are in the world, on behalf of our nation.

This is an important debate, as the length and the quality of the speakers list recognises. My aim today is to explain the principles that underpinned the SDSR, and to outline our plans to take forward the huge amount of work that it has generated. That is because the SDSR is the start, not the end, of a process that will give us the Armed Forces that we need to face the challenges of the future while meeting the demands of today.

Much that has been said about the SDSR is reminiscent of previous reviews: that we should have taken more time; that finances should somehow be left out of the equation; that it was not strategic. The process began before the election with a Green Paper-a cross-party effort-that formulated some of the key questions and

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issues that would have to be addressed. The position that we found the country in did not allow us the luxury of conducting the SDSR at a leisurely pace. The Treasury would have had to decide our financial allocation for the comprehensive spending review period on a more or less arbitrary basis.

The SDSR faced some perennial issues-not least the difficulty of predicting the future-but some things are unique to this review, which is the first fundamental rethink in 12 years. We had to acknowledge: that our Armed Forces are fighting hard in Afghanistan; that we are in the midst of the biggest financial crisis in a generation; that we inherited a national debt that was growing at a rate that could fund three Type 45 destroyers per week; and that security and defence are indivisible these days. On top of this, we had to reach our conclusions without damaging essential capability, the military covenant or critical industrial capability.

We all wish that we could have started with a clean sheet of paper, without the shackles of existing contractual or operational commitments and without the financial pressures facing the Government and the nation as a whole. If we had, the results would undoubtedly have been different. Yet, if we learned anything from the Cold War, it is that our national security requires a strong economy, which in turn requires us to tackle the deficit and bring the defence budget back into balance.

The new national security strategy sets out the policy framework and for the first time prioritises security risks and tasks. Under an overarching "adaptable posture", the SDSR provides the right capabilities and structures to respond to the highest-priority risks over the next five years, and it begins the transformation of our Armed Forces and security services to meet the challenges of the future. We specifically rejected a "Fortress Britain" posture or one that assumed that the wars of tomorrow would inevitably be like the wars of today-although it would be equally foolish to ignore the lessons of history. The adaptable posture demands that our Armed Forces become a more flexible and agile force with global reach. Given the priority that we attach to national security, the defence budget is making a more modest contribution to deficit reduction relative to many other government departments. It has been very difficult, but the SDSR protects the mission in Afghanistan and sets a path to a coherent and affordable defence capability in 2020 and beyond-our twin priorities.

Let me take those issues in turn starting with Afghanistan. Afghanistan is the top foreign policy priority for the Government and remains the main effort for defence. There is still some way to go before the Afghans are ready to take responsibility for their own security, but we believe that we have the right strategy. Steady progress is being made. This House, and indeed the people of this country, can be proud of what our brave men and women are achieving. We have protected front-line units and the equipment that they need. Where proposed changes in the SDSR had implications for operations, we have ensured that the success of the mission took precedence.

Our other priority was to chart a course to future force 2020 and beyond, which is why I stress that the SDSR marks the start, not the end, of that process.

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We will focus our work on two five-year phases. The first period, from now until 2015, is necessarily a period of rebalancing the strategic direction. We must tackle the unfunded liability in the defence programme, live within our means as the deficit is addressed and focus our efforts on Afghanistan.

We must also recover those capabilities damaged or reduced as a result of years of operational overstretch. The second period, from 2015 to 2020, will be about regrowing capability and achieving our overall vision. It will include the reintroduction of a carrier strike capability, with the Joint Strike Fighter and an escort fleet including the Type 45 destroyer and, soon after 2020, the Type 26 global combat ship.

We will also reconfigure the RAF fast-jet fleet around Typhoon and JSF, and consolidate the multirole brigade structure of the Army. Throughout this decade, we will reduce the number of equipment types used to provide the same or similar capability, because doing so reduces costs overall when the complex training and support requirements that each individual piece of kit requires is taken into account. It is our strong belief, shared by the Prime Minister, that the structure that we have agreed for 2020 will require year-on-year real-terms growth in the defence budget beyond 2015.

We will also maintain an autonomous capability to sustain a considerable and capable military force on an enduring basis, if required, for both intervention and stabilisation operations. That means that we will be able to conduct enduring operations with a force of 6,500 with enablers and, for a limited time in a one-off intervention, a force of some 30,000 with maritime and air support. That represents a substantial level of effort not so very different from today and shows how our measures in the SDSR limit the impact on the kinds of force that we can deploy.

Let me illustrate how we put our principles into practice. First, the adaptable posture is consistent with our deterrent posture, as both allow flexibility, and it recognises that the threat environment could well change in the decades ahead. That is why the Government are committed to the maintenance of the UK's minimum effective nuclear deterrent. We will proceed with the renewal of Trident and the submarine replacement programme while incorporating the changes set out in the value-for-money study published in the SDSR. This programme does not in any way alter the continuous nature and credibility of the nuclear deterrent.

The adaptable posture also means that we will be investing in new technology and capabilities more suited to the likely character of future conflict while reducing our stockholdings and capabilities that have less utility in today's world, such as heavy armour and non-precision artillery. However, we will maintain the ability to regenerate capabilities that are not needed now if threats change. We have taken less risk against those capabilities that are more difficult to regenerate, such as submarines, and we have retained capability where it fills a capability gap with our allies, such as British mine-hunting capabilities.

Secondly, because of our commitment to Afghanistan, we have made no changes to combat units involved in operations there, and we have postponed changes in

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other key capabilities, such as the RAF's Sentinel ground surveillance aircraft, for as long as they are required there. That is in addition to the enhancements planned in capabilities such as counter-IED, protected vehicle surveillance and remotely piloted aircraft.

Thirdly, a key part of developing future force 2020 is taking difficult decisions now that will allow us to get there. Take the Harrier. Regrettably, we have decided to retire HMS "Ark Royal" three years early and retire the Harrier force-both next year. We are looking forward to taking delivery of the future aircraft carriers and the carrier-variant JSF towards the end of the decade. Until we do, we are confident that we can meet our commitments with the UK's expeditionary air capability delivered by other means.

That situation is not unprecedented. Noble Lords will recall that the UK's carrier strike capability was gapped during the late 1970s, as we transitioned from Buccaneer to Harrier. While Harrier was operating in Afghanistan between 2004 and 2009, our ability to generate carrier strike was severely curtailed. We have agreed that, over the next five years, life-saving combat air support to operations in Afghanistan has to be the overriding priority. However, the bottom line was that salami-slicing the Harrier and the Tornado fleets would not save the required money nor provide the required capability. A decision was therefore needed about which fleet to cut, and military advice was sought.

The military advice, which Ministers accepted, was to retain Tornado. We were advised that operations in Afghanistan have taken their toll on the Harrier force and that, because of the cuts made in the Harrier fleet last year, Harrier numbers have been reduced far below the minimum needed to maintain our fast-jet contribution in Afghanistan on an enduring basis and without breaching harmony guidelines. Therefore, we could not sustain our current fast-jet requirement in Afghanistan using Harriers alone. Crucially, we were advised that the Tornado was the more capable aircraft to retain, due to its wider capabilities and force size, not only for Afghanistan but other significant contingent capabilities. In contrast, short-range carrier-based Harriers would provide only a very limited coercive capability beyond 2015. Our judgment was that it was unlikely that this would be sufficiently useful in the second half of the decade. It is true that deleting the entire Tornado fleet would save more money, but that is because we have three times as many Tornado force elements at readiness as Harrier, and Tornado has a longer planned service life. That also surely proves that we have made this decision on the basis of military judgment, not just as a cost-saving exercise.

This was a difficult decision to take, but tough and unsentimental choices had to be made. The SDSR is not a cosmetic exercise; it contains many tough but fair choices that are essential if we are to have a coherent and affordable strategy. The campaign in Afghanistan has been protected, and the decisions that we have made will ensure that we maintain our strategic influence and also provide us with the capabilities that we require for the future. Above all, they guarantee that the United Kingdom continues to play a proud and active role in shaping a more stable world.

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10.23 am

Lord Rosser: My Lords, from this side of the House I add our tributes to Senior Aircraftman Scott Hughes and our condolences to his family and friends, to those expressed by the Minister. The bravery and courage of the men and women in our Armed Forces know no bounds, but we are all very conscious that when the ultimate sacrifice is made it brings grief and sorrow to the family concerned as well as deep pride in the loved one they will never see again. We hope that those feelings of pride will burn long and bright and his family and friends will be given the strength and fortitude to see them through the especially difficult coming months that they inevitably face.

From this side of the House I also wish to follow the Minister in paying tribute to our Armed Forces, which serve and protect our country and its interests and are prepared to put their lives on the line on behalf of us all. They have the unequivocal support from all sides of the House for the missions they are called upon to undertake, not least for those missions that they are currently undertaking, in particular in Afghanistan. It is crucial that those who wish this country ill and from whom our Armed Forces protect us appreciate and understand that there is no division of opinion between the political parties, but only unity of resolve and support for our Armed Forces in the exacting and dangerous operations in which they are involved.

As the Minister has said, we have a lengthy debate ahead of us, and I am sure that we are all looking forward to the many speeches from noble Lords with great knowledge and expertise in this field. We look forward in particular to the maiden speeches from the right reverend Prelate the Bishop of Birmingham and my noble friend Lord Hutton.

I thank the Minister for his explanation of the Government's thinking and objectives reflected in the review. In the course of his comments, he referred to the background against which the review had been undertaken, and in particular the financial situation. There was a strong inference in his comments that the outcome of the defence review rests at the door of the previous Government. I do not share the Minister's analysis; the financial crisis was a global one, which did not start in this country. We were hit hard because the global crisis started in the financial sector, and the financial sector is a big player in our economy. The problems have not been caused by the level of public expenditure in this country, a level of public expenditure with which the then Conservative Opposition agreed until the end of 2008. There was a clear determination by the last Government not to make significant cuts in public expenditure until the recession was over, since the way this country will restore its full financial health is through a growing economy, and not through public expenditure cuts that would have jeopardised growth. This country came out of recession in the second half of last year, and there was a significant increase in growth in the first quarter of the current financial year, and significant though lower growth in the second quarter.

This country was not on the brink of bankruptcy, as some have sought to suggest in seeking to justify the speed of the cuts that have been and are to be made.

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The average maturity of funding for government debt is 14 years. Neither are the difficulties that we face home-grown. If they were, and it was not a global financial crisis, then a number of other countries such as Greece, Spain and Ireland would not have to address even more serious financial issues than those that we and a number of other countries have to address.

I know that the Government are sensitive to statements that this review has been driven by financial considerations, but that view arises from the very strong impression that the need for reductions in expenditure played the biggest part in determining the outcome of the review, rather than any carefully considered strategic considerations. Nobody is arguing about the need for reductions in expenditure, but this Government seem to be proceeding with these reductions with a degree of rapidity that they have yet to justify. The more the Government pray in aid the financial situation, and in particular the dodgy assertions about the country being on the brink of bankruptcy like Greece, the more the Government are under a self-imposed pressure to make cuts at a speed that match those assertions rather than in line with a considered review of strategy. As the Defence Secretary said in his leaked letter to the Prime Minister:

"Frankly this process is looking less and less defensible as a proper SDSR and more like a 'super CSR'".

We then come to another matter, which the Secretary of State for Defence is fond of raising, namely the issue of the alleged £38 billion black hole in the Ministry of Defence budget. If the Government believe that that figure is a fair and accurate assessment of the situation, presumably the decisions on the cuts in expenditure and the speed of those cuts have been related in part to a belief in that figure of £38 billion. However, the only way that one can find the alleged £38 billion black hole is by assuming that there will be no increase in our defence budget until 2021-that is, a cash freeze-nor any rationalisation of commitments or programmes. That assumption, frankly, lacks credibility.

The defence review rightly stresses the significance of Afghanistan among a great many defence and security issues that we face. There has been real progress in Afghanistan in a range of key functions and activities, including law and order, civil administration and economic growth, which are vital to the functioning of a stable state and to achieving a lasting political settlement. The Government have our support in taking forward this work, which is also crucial in the light of the target of 2015 for the conclusion of our forces' combat role. There is, as the Government have said, obviously a need for Afghan forces to take on greater responsibility. It would be helpful if the Minister could say whether the Government have undertaken an assessment of the Afghan forces' capacity to take on those responsibilities in line with our 2015 target date. Can he say what the government position would be if it was clear, as we approached 2015, that our combat role was needed for longer?

We welcome the commitments to hold further reviews every five years; to continue to develop the previous Government's work on addressing and combating the increasing threat of cyberattacks while investing in cybersecurity; to reduce warheads; and to continue to increase funding for our Special Forces. However,

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there appears to be a strategic deficit in the Government's plans. The security strategy emphasises flexibility and adaptability for our Armed Forces, but the defence review appears to go in the opposite direction for the Royal Navy. The Government talk about taking tough long-term decisions, but taking decisions is precisely what has not happened in relation to Trident. The concern is that it has rather more to do with avoiding dissension within the coalition than with the outcome of any carefully considered strategic review.

This strategic deficit is hardly surprising. Speaking of the strategic defence and security review, the Conservative chairman of the Select Committee on Defence said in the other place at the beginning of this month that,

He went on to say that the Defence Committee,

In a defence review which results in reductions in expenditure, there will inevitably be criticism of some of the decisions made. It was reported in the media the other day that the head of the Royal Navy had said at a conference:

"I am very uncomfortable at losing Nimrod. I am happy to say that publicly".

Whether that is what he actually said I cannot be sure, and if the Minister says it was not what was said I will of course accept his word.

However, the Secretary of State for Defence had also raised similar concerns in his letter to the Prime Minister. The Defence Secretary appears to have accepted that the decision on the Nimrod reconnaissance aircraft which protect our nuclear armed submarines has required taking what he described as a calculated risk with our surveillance capabilities. Obviously, I would not expect the Minister to comment in any detail in a public arena on matters directly affecting national security, but does he consider that what has been claimed was said by the head of the Royal Navy is in reality simply expressing the Secretary of State's own stated view, albeit in rather more forthright language?

There has also been concern over the decision to retire the Harrier force in 2011 and to give up the ability to use short take-off and vertical landingaircraft. For a decade, we will have no carrier strike capability of our own. I hope the Government have got this one right. In the light of his other comments, can the Minister say quite clearly whether the Government regard this decision as another one that involves taking a calculated risk, or do they not regard it as in that category?

Like many other departments, the Ministry of Defence will be making significant cuts in staffing among civilian staff. The figure, I believe, is a 29 per cent reduction. Can the Minister say a bit more about where these cuts will fall? There is a tendency which this Government have done little to counteract-indeed, some would say that they are its instigators-to regard

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anyone not on the front line, whether in the Armed Forces, the police, education or health, as unnecessary bureaucrats who are a financial burden, contributing nothing of substance or value. In reality, the overwhelming majority are dedicated and committed; without them, those on the front line could not function as effectively as they do. In asking the Minister where he thinks substantial savings can be made among civilian Ministry of Defence staff, I seek an acknowledgement of the vital role such staff play and an assurance that a proposed reduction in staffing in this area will be the subject of the same kind of rigorous examination of the consequences as one would expect in relation to any reductions on the front line.

I have set out areas of concern about the strategic defence and security review and the basis on which some decisions appear to have been made, but I acknowledge that the Minister and his ministerial colleagues have had a far from easy task in making their decisions on where and how to achieve the reductions in expenditure that they-or, perhaps more relevantly, the Treasury-consider are necessary. I know that in carrying out the exercise, they will never have lost sight of what we all acknowledge as the overriding responsibility of any Government-to protect the nation, maintain our ability to defend ourselves and protect our national interests. To enable that onerous responsibility to be delivered, any Government depend on the commitment, dedication and bravery of the men and women in our Armed Forces, and we are all at one in our support and admiration for them.

Significant cuts are being made in defence expenditure, but it does not appear from the national security strategy that the threats we face and the commitments we have can necessarily be met by that reduced capability. Only time will tell, and we shall be doing our duty as Her Majesty's loyal Opposition in questioning and holding the Government to account for the decisions they have made.

10.37 am

Lord Lee of Trafford: My Lords, first, I declare shareholdings in a number of companies benefiting from defence spend. Yesterday, we observed two minutes' silence in memory of those who fell in two world wars. Today, we have an opportunity to pay tribute to those who have fallen more recently-I join in the tribute to Senior Aircraftman Scott Hughes-particularly in Afghanistan, and to our gallant forces who are currently in action there. We owe them and their families so much.

One would have hoped that the world had learnt from earlier conflicts of the futility of war, yet we all continue to spend huge sums on defence when so many suffer from famine, poverty and multiple deprivations. We have to live in the world as it is and thus maintain our very necessary defence capabilities. The SDSR, which we debate today, has been heavily criticised for being too rushed and too Treasury-dominated; I concur with that. In May's Queen's Speech debate, I wryly referred to a Financial Times headline:

"Treasury to have say in defence review"-

surely the understatement of the year. However, I am not convinced that more time would have produced markedly different conclusions. Most of us, I suspect,

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support the broad thrust of the review and its recognition of the tiers of threat that we face: a greater acknowledgement of terrorist and cyberwarfare threats and less likelihood of major state-on-state warfare. Yet we always have to be prepared for the unexpected.

My fundamental concern is that reducing defence spend to 2 per cent of GDP on top of the inherited multibillion pound black hole will leave us still in a state of severe overstretch. Can we really fulfil all our maritime responsibilities, from anti-piracy to carrier protection, with just 19 frigates and destroyers? Of course, the current review has unquestionably been skewed by the irresponsible decision to order the two new carriers before a current defence review and when the MoD was effectively bust. Speaking in the recent Rosyth Adjournment debate in the other place, Gordon Brown said of the carriers:

"These are military decisions, made on military advice for military reasons".-[Official Report, Commons, 1/11/10; col. 742.]

History, and the National Audit Office, may come up with rather different conclusions.

This leads me to probably the most bizarre decision-to ditch our Harrier fleet and all its crew expertise, built up over so many years, to save £100 million a year on a total defence budget of about £37 billion. I do not accept that the choice was either Harrier or Tornado; surely we could have reduced the Tornado fleet further and retained a reserve Harrier force or squadron to preserve carrier strike capability. I very much agree with the recent admirals' letters to the Times, although I acknowledge that in today's letter the current chiefs make the point, quite rightly, that the Falkland Islands are much more robustly defended. The loss of Nimrod-the First Sea Lord said earlier this week that it made him "very uncomfortable"-is deeply worrying. How do we intend to replace this capability?

I do not wish to be overnegative; there is much to commend in the SDSR and in recent decisions. We on these Benches are predominantly Trident-sceptic; thus we welcome the deferring of Trident main gate until 2016. We also strongly support the defence treaties with France. Greater Anglo-French co-operation is something I and many others have long campaigned for. In May's Queen's Speech debate, I was accused by the noble Lord, Lord Gilbert, whom I affectionately refer to as C17, of being quixotic on the subject. I am glad that there has been a coming together on defence, but real collaboration on procurement will not come, I suggest, until there is much greater corporate consolidation between our respective defence contractors.

I welcome the extra support for our special forces and the focus on UAVs. Few appreciate the scale of the latter's development. There are now five US airforce bases and 6,000 airmen involved in controlling flights in the Afghan-Pakistani theatre from 5,000 miles away. I strongly support the review of our Reserve Forces; we need fresh imaginative thinking here. Surely the way forward is to move to deployable formed units, more along the lines of America's National Guard and away from fill-in deployment.

I am somewhat concerned at the Vice-Chief of the Defence Staff chairing the review. I do not doubt his ability to contribute, but I would have preferred more of an outside independent chairman than an internal

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establishment figure who is likely to have more traditional attitudes. Have the review's terms of reference now been agreed?

The subject of MoD procurement probably warrants a debate in itself. Clearly, radical changes are needed. I congratulate the noble Lord, Lord Hutton, whose maiden speech we are looking forward to hearing shortly, on establishing the Bernard Gray review. We all wish our colleague, the noble Lord, Lord Levene, well with his defence reform unit, which is focused on restructuring the MoD and making it "fit for purpose".

Defence spend sustains approximately 300,000 jobs in the United Kingdom, but this is something of a two-edged sword. Too often, jobs and politics influence procurement decisions. I remember as a Defence Procurement Minister 25 years ago being told that all our then naval requirements could probably be built at Barrow alone-we did not need all those other yards. But closing plants, facilities and bases is notoriously difficult, particularly in human terms. Could we not establish a defence variant of the old enterprise zone concept, with taxation and rates incentives, to encourage new industry to develop and thus make employment in particular areas less dependent on MoD spend?

I draw my remarks to a close by asking my noble friend two questions. Can it really take four years to install carrier, catapult and arrestor gear, as indicated on page 23 of the review document? Secondly, page 31 talks of "substantial savings on food". What does that mean? Are we going to starve our service personnel, or give them food of a lower quality? Surely we currently buy at keenly competitive bulk prices as best we can.

10.44 am

Lord Bilimoria: My Lords, in June this year, General Patraeus spoke to us in Parliament at the invitation of the Henry Jackson Society. At the time, he was the US Central Army Commander. My father, the late Lieutenant-General Faridoon Bilimoria, was Commander-in-Chief of Central Army Command, with 350,000 troops under his command. When I asked General Petraeus about winning the hearts and minds of the people of Afghanistan, his explanation was that to do that, you have to be talking from a position of strength-in other words, hard power enables soft power. The two are not opposites but actually two sides of the same coin.

We know that Britain is no longer the biggest empire the world has ever known but, whichever way you look at it, we are a powerful force in this world. We may not be a superpower, but we are one of the six largest economies in the world. As my noble friend Lord Hannay said yesterday, Britain punches above its weight. When it comes to defence spending, we have the third highest military expenditure in the world, after the United States and China. How can we be termed a medium-ranking power? By any reckoning, we are a power to be reckoned with. Humility, self-effacement and understatement may be our hallmarks, but let us get real; with all our problems we are still very much a force of influence in this world.

The Government's strategic defence and security review is an impressive document that attempts comprehensively to address all the aspects of the defence of our realm. However, there is criticism, as

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we have heard from the noble Lords, Lord Rosser and Lord Lee, that it has been rushed through in five months when the previous review took a year. Would the Minister agree that this has been the case?

We understand the nation's scale of debt and deficit and the Government's desire to address it. I am really relieved that defence expenditure will not be cut but will actually go up in cash terms; however, as a percentage of GDP, it will go down. Over the past three decades, our defence expenditure as a percentage of GDP has halved. At the time of the Falklands war, it was 5 per cent of GDP; in 2009 it was 2.5 per cent of GDP; now we are talking about getting to the NATO threshold of 2 per cent. At the time of the Falklands War there was a cold war, and let us not forget that in those days, Russia was spending 16 per cent of its GDP on defence. We must not forget that in the past two decades we have had the first Gulf War, Bosnia, Kosovo, Sierra Leone, Afghanistan and Iraq. In all that time our Armed Forces have been shrinking and shrinking. There are now 250,000 personnel, including our reserve voluntary forces. Our Armed Forces are stretched to the limit.

When it comes to United Nations peacekeeping forces-a real force for good, with which my father served with his Gurkha battalion as part of the UN forces in the Congo in the 1960s-Britain is the third highest contributor financially, but what are we doing to contribute personnel on the ground? No amount of technology can replace men and women on the ground. My father commanded a mountain division on the Chinese border, where India had serious defences in place after the Chinese war in 1962, which took India completely by surprise. He said that you could defend positions in mountainous terrain with a ratio of one defender to 10 attackers. But in the engagements in which the British Armed Forces have been involved over the past two decades, we have invariably been attacking, not defending. There comes a stage when the size of your Armed Forces does not have the de minimis critical mass. The Army is shrinking to below 100,000 personnel. That will be smaller than the strength of the corps that my father commanded in the Punjab.

We know that we can never compete with the giants; China has 2.2 million, the United States has 1.5 million and India has 1.3 million. These armies will be the largest in the world for years to come, but the Government can cut the numbers of our troops with one stroke of a pen. It is harsh and it is swift, but rebuilding these numbers cannot be done overnight. It takes years to train our service personnel, who are considered the best of the best in their professionalism, capabilities and expertise. There is no short cut to achieving this excellence, and I dread to think of the awful possibility of being caught short in the future, desperately needing trained service professionals when realistically it would take years for us to rebuild that capability. Surely the Government are concerned about the numbers shrinking too low. However, I do not think that any of us would argue about cutting the size of the defence ministry when we know there have been huge inefficiencies. I found it quite shocking when I did my research that the ratio of active troops to civil servants in the Ministry of Defence is 2:1. All the

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other 27 western alliance countries employ proportionately fewer civil servants in their defence ministries: France has five troops per civil servant, while in Spain the ratio is 8:1.

Our brave troops are making the ultimate sacrifice. The whole nation is proud of and grateful to them, but do we show our gratitude enough? As my friend General Sir Richard Dannatt, whom I admire greatly and who had the guts to stick up for his troops, said two years ago, one of the most cited reasons given by the 20,000 personnel who left the forces in 2007 was poor salary. He pointed out that the lowest paid soldiers at that time were on a mere £12,500, less than a traffic warden on a basic salary of £17,000. On top of this, soldiers' accommodation has also been described as "appalling". Has the SDSR addressed these concerns enough?

I am relieved that the SDSR has rightly recognised the importance of our nuclear deterrent and will not compromise on this in the long run. On the other hand, the scrapping of the Harriers, as we have heard from the noble Lord, Lord Lee, and leaving our aircraft carriers without aircraft, seems completely illogical. Surely they could have been phased out once our new aircraft were operational. This leaves a big hole in our capability.

I am delighted that the Eurofighter Typhoon is going to play a major role in the future. I have witnessed at first hand the amazing capabilities of this aircraft, and I hope that the Indian air force will choose to procure the Typhoons to add to their existing range of British aircraft, including the Hawk Advanced Jet Trainer, which is considered one of the best training aircraft in the world.

The recently signed defence collaboration with France, which has been spoken about, was not covered in the review but shows how quickly things can move, and we must seize these opportunities. However, the review does not do enough justice to the significant bridges we have built through our staff college and the Royal College of Defence Studies, international officers coming here and officers going aboard to places such as the National Defence College and the Defence Services Staff College in Wellington, India, where my father was commandant. There is no better person to speak about this than our very own Yeoman Usher, Lieutenant Colonel Ted Lloyd-Jukes, who, as a major, attended the staff college in Wellington when my father was commandant. On this note, does the review place enough emphasis on the potential for closer collaboration with other countries and armed forces, including joint exercises with countries such as India?

The SDSR has correctly addressed the multitude of threats facing us today, well beyond conventional warfare, but are we doing enough to support military intelligence? As the noble Lord, Lord Lee, said, after phasing out Nimrod, what are our Government's plans for our AWAC capability? Could they clarify their plans here?

In conclusion, during the financial crisis, Her Majesty the Queen asked:

"Why did nobody notice it?".

Similarly, nobody predicted 9/11 and nobody predicted the Falklands War; they both happened. Sadly, no one knows what is going to happen next. We have to be prepared for the unexpected.

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Without doubt, the biggest factor for us is the economy at the moment, but the most important role of government is the defence of the realm, both internally through the police force and intelligence services, and externally through our Armed Forces and intelligence services. We are a tiny island, with just 1 per cent of the population of the world. Yet thanks to the hard power that having one of the most powerful defence forces in the world gives us, we have the soft power. This is so powerful because the world knows that this hard power and soft power emanate from a country that is respected for, and has fought for, freedom, fairness, justice and liberty for centuries.

10.53 am

The Lord Bishop of Wakefield: My Lords, I join others in offering condolences from these Benches on the tragic death of Senior Aircraftman Scott Hughes. At remembrancetide, as has been said, we are sharply reminded of the cost of the protection of our interests internationally and the sacrificial contribution made by Her Majesty's Armed Forces.

Living in Lincoln, as we were in 1982, we saw the Vulcans take off from RAF Scampton and RAF Waddington for Ascension Island and Port Stanley. It was a bold and courageous move and a remarkable logistical achievement. Indeed it was the only ever use of the ageing V-bomber force in anger. Its strategic impact, however, was limited. The Stanley runways were pock-marked, but not put out of action. None of this was surprising, either then or in retrospect. The Vulcans were designed first for free-fall and, later, stand-off nuclear bombing in a European theatre of conflict. For fairly obvious reasons, rarely will forces designed for one strategic purpose with a clearly defined enemy be easily adapted to an utterly different target and theatre of war.

This tiny piece of historic narrative focuses sharply for us the key issues behind the present debate. The strategic defence review is clear that we no longer face one polarised ideological enemy. No longer is it a matter of mutually assured destruction or the mobilisation of the entire nation. Indeed, the fall of the Berlin Wall and the collapse of the Soviet empire in late 1989 onwards led to jubilant cries about the world now being a far less dangerous place. Twenty years on, however, following two Gulf wars, Serbia, Kosovo and Afghanistan, it all looks very different. That is, of course, the conclusion, too, of the recent report of the National Security Council.

Doubtless that has contributed to the discrepancy in figures between the overall 19 per cent cuts of the comprehensive spending review and the specific conclusions of the strategic defence and security review, resulting in a more modest 8 per cent reduction in spending. Despite this, the impact on our different forces will still be sharp, as reactions to the SDR suggest.

At root, we face two decisive questions. In an increasingly insecure and uncertain world, how can greater stability be secured? How can we plan to meet both our present and future responsibilities and afford to do so? The answer to these questions must lie primarily with those nations with a sophisticated defence

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capability working together for world peace and security. That must be the key to our own foreign and defence policy. There is, then, a responsibility placed on the powerful nations to protect those who are weaker. This may begin with enlightened self-interest, but the imperatives on us all direct us toward a wider concern for human flourishing and well-being.

What is Britain's part to be in this broader search for international peace and security? How can that be integrated into a broader vision and strategy-a strategy that ultimately presses us well beyond the principles of those worthy statesmen who fashioned the North Atlantic Treaty? How, then, does the present defence review measure up to those questions?

As we have heard from noble Lords who have spoken, the reviewers had the unenviable task of seeking a pathway that embraced one of three contrasting responses open to government at this time. Those responses are often labelled "committed", "adaptable" or "vigilant". A committed response would have required long-term overseas deployment, which is now unsustainable within our contemporary financial resources. Vigilance would simply imply a withdrawal from much of Britain's previous international engagement.

As we heard from the Minister when he opened this debate, the review has attempted to embrace adaptability. Such an approach would inevitably lay policy based on such a premise open to the criticism of muddle or lack of clarity. "Adaptability" can mean anything, especially when we remember the constraints that apply at present. The review bears the marks of such uncertainties, but it has the merit of feeling like an interim review, leaving options open for a return to these issues later. The Government could help to avoid confusion on this point by not using vocabulary that sounds as if it belongs to the "committed" stance when the chosen path is that of adaptability. To do otherwise risks repeating the mistakes of other Governments.

The principles that I have outlined, relating to the responsibilities of the powerful nations with sophisticated defence capabilities and our part in that, will, I hope, play a paramount role in continuing planning and debate. The initial reports of the Prime Minister's meeting with President Sarkozy and their discussions about shared defence facilities are encouraging as a sign of co-operation in international security. We hope that it will become a reality.

The publication of this review, initiated by the previous Government and enacted by the present coalition, is a beginning and not an end. There are still further issues to be brought into the discussion. For example, all this has crucial implications, too, for the military covenant and for our responsibility as a nation to those who serve in our Armed Forces. The tributes that we have heard this morning reinforce that fact.

Some weeks ago, as we awaited the review, I wrote to the Times, highlighting the significance of this whole process. My letter coincided with a flood of correspondence about Stephen Hawking's book on the origins of the universe and the implications for theism. I was castigated by a later correspondent for failing to be on task. Surely my job was religion, so why did I not stick to rebutting atheism and prescind from intervening in debates on defence and security?

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Had I replied, my response would have been to remind my correspondent of the French statesman Georges Clemenceau's eloquent maxim that war is too important to be left to generals. It is also, I suggest, too important to be left to politicians alone. International peace and security, and the human flourishing that they should nurture, are the responsibility of every one of us individually and all of us as a nation.

11 am

Lord Trefgarne: My Lords, I declare a small interest: I am chairman of a small company that manufactures defence-related equipment, although it has no business with the UK Ministry of Defence. Like other noble Lords, I share the expressions of sympathy for those who have died recently in Afghanistan and elsewhere. This was well underlined only yesterday evening when the gallery of the noble Lord, Lord Ashcroft, which records some 164 holders of the Victoria Cross, was opened at the Imperial War Museum by Her Royal Highness the Princess Royal.

We come to this matter in a serious financial situation, to which the noble Lord, Lord Rosser, referred. He explained how the serious international financial situation had led to all our difficulties, but he was not so clear in explaining why such problems were so acute at the Ministry of Defence. How was it that the Ministry of Defence was able to commit itself to huge expenditure-I will not argue with the noble Lord about the precise amount-for which there was absolutely no provision in the forward costings and was never likely to be? What were the accounting officers doing? It may be that the accounting officers were overridden by Ministers at the time. We shall never know; it is a matter for the previous Administration that is not revealed to the present one. Clearly something went wrong, in that the Ministry of Defence was able to commit itself to so much expenditure for which there was no money available.

My noble friend Lord Lee, whom I had the privilege of serving with in the Ministry of Defence all those years ago, complained that politics was playing too great a part in these matters. However, I seem to recall my noble friend trying himself to bring more politics to defence procurement when he and I were responsible for these matters. Of course, my noble friend has changed his views on other matters since then, so perhaps we should not complain too much.

One of the most disappointing aspects of defence policy over recent years has been a decline in the strength of the reserves-the Territorial Army, the Royal Air Force Volunteer Reserve and the Royal Naval Reserve. They represent enormously good value for money and it is a great pity that they have been allowed to decline so far. I hope that I may be allowed to reflect personally on how I came to the Dispatch Box to announce the increase of the Territorial Army to 83,000 souls. I am not sure how many there are today; I think that there are around 30,000. I came to that Dispatch Box to announce the formation, at the request of my late friend the Earl of Selkirk, of 607 City of York Squadron Royal Auxiliary Air Force, which was to be equipped with Wessex helicopters and assigned a role in support of 2 Infantry Division, then

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based in York. At that time, 2 Infantry Division was commanded by a young Major General, Mr Peter Inge, now the noble and gallant Lord, Field Marshal Lord Inge, who is in his place today-and quite right too. I came to the Dispatch Box and announced the acquisition of 11 river-class minesweepers for the Royal Naval Reserve. I do not know what has happened to them but I recall that my wife launched one of them. I seem to recall that the wife of my noble friend Lord Lee launched another.

I turn to the recent letter in the Times, signed first by the noble Lord, Lord West, who is sadly not in his place today but knows what I will say. He had a long and distinguished naval career, but he blew it by becoming a Minister in the Government who have just left office. He was a much loved and successful Minister but I take the view that Chiefs of Staff, particularly the service chiefs and the Chief of the Defence Staff, ought to serve all political parties with equal enthusiasm and loyalty, or maybe zero enthusiasm and loyalty if that is how they feel. They should not become as overtly political as the noble Lord, Lord West, did. I do not complain of his work as a Minister but it sat oddly that a distinguished admiral-a former Chief of the Naval Staff, no less-should take a job as a Parliamentary Under-Secretary in the Home Office, as he did.

I turn now to the substance of the letter to which the noble Lord, Lord West, other naval officers and one distinguished Royal Marine attached their names. They seemed to be complaining that, because of the withdrawal of the Harrier fleet and the aircraft carriers on which it would sail, we would no longer be able to recover the Falkland Islands as we did on 1982. A much better alternative is to deter somebody from attacking the Falkland Islands in the first place. Manifestly, we failed to do that in 1982. To my shame, I stood at the Dispatch Box and announced the withdrawal of HMS "Endurance"; the rest, as they say, is history. I say "to my shame" but it was a calculated and, in the context of the time, correct decision. We did not know what was then to happen. We clearly failed to deter the Argentinians in 1982 and we must not make that mistake again.

I put it to your Lordships that a squadron of Tornado aircraft, based in the Falkland Islands, together with the fleet-class submarines deployed to that region, are a much better means of deterring potential aggressors than a fleet of Harriers sitting on an aircraft carrier tied up in Portsmouth. Your Lordships must form your own view on that. Retiring the Harrier fleet was regrettable but, in the context of deterring an attack on the Falkland Islands and of needing a more effective air element operating in Afghanistan, it was the right decision. I make one further point about deterring an attack on the Falkland Islands. One of the turning points in the Falkland conflict in 1982 was the sinking of the "Belgrano", which was carried out by one of our nuclear-powered submarines. Those submarines will play an effective part in the deterrent in the times ahead.

My final regret is over the maritime reconnaissance aircraft, which are being withdrawn. They form an essential part of our nuclear deterrent, alongside the

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Trident submarines. It is therefore a matter of great regret that airborne maritime reconnaissance is being withdrawn, as it is.

The strategic review that we are considering today is born of necessity. No doubt it is a regrettable necessity, but let us be clear that the Government had no alternative.

11.09 am

Lord Robertson of Port Ellen: My Lords, I declare an interest as an adviser with the Cohen Group based in Washington DC which has a number of clients in the defence industry. I start by paying tribute to Senior Aircraftman Hughes, whose death has just been announced, and, indeed, to all those who have died and been injured in the conflict in Afghanistan. They died defending their country and its values. We should remember them not just this weekend but should pay tribute to them and remember them throughout time.

The mission in Afghanistan was described as crisply in the strategic defence review as I have seen for a long time. The review refers to,

That is why people are dying and that is why people are serving. We need to say that more and more often to ensure that the tributes we pay are meaningful and that the Taliban and others get the message that we are not going to give up until we succeed.

Noble Lords will know that I have reservations about the coherence and strategic nature of the review, but I wish to start by saying a few positive things about it and the process. I was asked by the Secretary of State for Defence to advise him on this matter and I was part of the previous Government's advisory board on the Green Paper. I am grateful to the Government for providing me with the opportunity to give advice.

I thank and congratulate the staff under Sir Peter Ricketts, the National Security Adviser, on the work that they have done in a ludicrously short period. They were not to blame for the timetable but the quality of the work is still good, and they deserve our thanks. I also congratulate the coalition Government on taking up the recommendations in the report that the noble Lord, Lord Ashdown, and I produced last year for the Institute for Public Policy Research, which advocated the strategic defence and security review, a national security strategy and the concept that defence reviews should take place on a regular four-yearly basis. The Government are to be commended for picking up good ideas when they see them. I also acknowledge that the Government are under severe constraints in the present circumstances. The Secretary of State for Defence sent me a copy of the review and wrote at the bottom:

"You will understand the constraints".

I do. I carried out a defence review and I, too, was faced with a predatory Treasury.

Noble Lords: Unfair.

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Lord Robertson of Port Ellen: I hear the ghosts of Christmas past behind me. However, I and my colleagues-some of whom are now in this House-saw off the Treasury.

I, too, faced a legacy of a 30 per cent cut in the defence budget over the previous six years. That was done without any major defence review and left us a very difficult legacy with which to deal, not least in the area of defence medical services and the defence accommodation estate.

Finally, I congratulate the Government on maintaining the deterrent and continuing with the modernisation of the Trident system. However, this review is not strategic. It could not be given the time-scale involved. It does not really follow even the national security strategy. It needs more time and it is a wasted opportunity in that context. As the right reverend Prelate the Bishop of Wakefield said, it looks, and indeed is, an interim report, driven mainly by the Treasury's desire to achieve cuts. I hope that it will be reviewed quickly. One of its serious weaknesses is that it is not inclusive as it has not involved everybody in the ministries concerned or those in the outside world who wanted to give a view. One of the strengths of the review that I conducted in the Ministry of Defence in 1997 and 1998 was that by the end we had built a consensus. That was the strength of the review which took it through so many years to come.

This review has led to a hollowing out of our forces and, indeed, to the same old salami slicing which weakens the case for defence. The Defence Secretary's letter to the Prime Minister was leaked. It is interesting that a lot of noise was made about the leaking of that letter, but my whole review was leaked to the Tory Party the day before it was officially announced. Given that we accept that these leaks are bad and immoral in principle, one would have expected that the Tory Party would have immediately returned the leaked review to the Ministry of Defence, but instead it gave it to the DailyTelegraph. However, as the Defence Secretary himself wrote:

"This process is looking less and less defensible as a proper strategic review and more like a super CSR".

He added:

"We do not have a narrative that we can communicate clearly".

Those are his words, not mine, and I am not sure that in the following days he changed his view massively.

I wish to make a couple of serious points. One concerns procurement. There is a serious crisis over procurement. A lot of the money that the country devotes to defence is simply being wasted. My noble friend Lord Hutton commissioned Bernard Gray, who had been one of my special advisers, to report on procurement. It was a very good and thorough report that concluded with very strong recommendations. He was so frustrated by the previous Government's response to that report that he offered his services to the current lot when they were in opposition. I hope that the Minister might be able to offer us guidance on why we have to have yet another review when there is one on the table which gives a proper diagnosis and the right prescription. Why has the noble Lord, Lord Levene, been asked to duplicate that? When can we expect him to produce his report?

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Other speakers have mentioned Nimrod, as did the Secretary of State for Defence in his letter. Two things worry me about this defence review. First, it is more focused on the year 2020 than on 2012 and 2014. There are serious questions about what will happen in these years if it goes forward on the present basis. Secondly, I do not think that it says nearly enough about European co-operation. Yes, we have the 50-year treaty with the French, which is commendable and extremely good, but other countries in Europe would like to be part of these consortiums and I hope that they will be taken account of. Perhaps this mothballed aircraft carrier that has been produced might yet be seen as a NATO shared capability. That idea has been put forward. It is a wasted opportunity but that does not mean to say that in the interests of our Armed Forces and our country we cannot think again and do better the next time.

11.17 am

The Lord Bishop of Birmingham: My Lords, I am most grateful to noble Lords and the support staff for the welcome and help that I have received from them since my recent introduction and I am glad to be able to participate in your Lordships' House so soon. I also pay tribute to the former right reverend Prelate the Bishop of Bradford, whose retirement caused me to receive the Writ summoning me to your Lordships' House. David James's leadership of a diverse community and his expertise in the interfaith practice of presence and engagement is a model for those who seek to practise the elusive art of cohesion.

Although the diocese of Birmingham has a very different composition from that of West Yorkshire, we have similar aspirations in seeking greater understanding across a myriad of international cultures, languages and faiths leading towards our agreed aim: a better quality of life for all. Before returning to that theme in the context of the debate on the strategic defence and security review, I set the scene in a diocese of some 1.5 million people contained in only 300 square miles, covering the whole City of Birmingham, parts of Sandwell, Warwickshire, Solihull, and even a small part of Worcestershire. This intercultural urban and suburban heartland is accompanied by a variety of former mining and present-day greenbelt commuter villages.

As a priest and bishop who has already served in the distinctive cities and regions of Hull, Coventry and Birkenhead, I, like so many new leaders coming to Birmingham and the region, struggle to describe it in a line or two. "Global city, local heart" will not quite do. It is the largest city outside London and the largest local authority in Europe, with an annual budget of £3.5 billion. The city budget is £7 billion. Birmingham flies below the radar of popular imagery, yet those who live, work, play and visit there find world-class achievement and facilities.

Given the constraints of your Lordships' debate today, I will not list all the wonderful things that happen there, but with the encouragement of the noble Lord opposite, I will mention that we have the largest shopping centre in the country, in the Bull Ring, and the most popular conference venue. Those

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who come to it know it as a conference venue and those who do not might like to try it. Birmingham has the greatest groups of lawyers and other professionals outside London, and three great universities. The largest, Birmingham University, has the extraordinary ambition of becoming the world's greatest university. We have culture in the Symphony Hall and the Birmingham Royal Ballet at the Hippodrome. The region has four football teams in the Premier League. If noble Lords do not know what that means, I am available afterwards. In this extraordinary period of change, we are going to have a new library in the middle of the city. That will be another world-class item.

Looking ahead, we face all the challenges detailed in the comprehensive spending review. Our manufacturing base is not big enough, or perhaps not of the right sort. Our employment levels are far too low. Our housing needs renewing, and so on. However, perhaps uniquely in the context of this debate, we have a faith leaders' group drawing together the six great religions of the city in a friendship that enables us to understand some of the tensions and great difficulties that are faced not just in our own communities but around the world. Our community is about 14 per cent Muslim, 3 per cent Sikh, 2 per cent Hindu and so on. We are the youngest city in Europe in terms of the age of our population, which is expected to grow by some 100,000 in the next 15 years, and there are some 70 first languages on the local authority's register of necessary communications.

As the Minister mentioned in his introduction, most of us have been aware of the need for remembrance at this time of year. Only yesterday, as I chaired the Be Birmingham Local Strategic Partnership in a room that overlooked the Hall of Memory, we were all able, in our great diversity, to pause at the 11th hour of the 11th day of the 11th month and look over that hall and remember that there is no family in the country that has not been touched by war over the past century-and, as we have heard today, even immediately in our present communities. My first act as a new bishop in that hall was to have inscribed the name of a soldier who died in Iraq and stand alongside his Muslim mother and sisters in an act of remembrance.

Recruits from Birmingham still step forward proudly today from a wide range of our diverse communities. In 2009-10, for example, 1,375 people joined the Regular Army from the West Midlands area: that was 11 per cent of the total, from 9 per cent of the population. There are currently 3,281 army cadets and 605 adult instructors in the area. Only last night, at Bartley Green high school on an outer estate, I learnt that two of its pupils have joined the first Royal Marines cadet force in the country. More immediately, Birmingham supplies the superb medical treatment at the Royal Centre for Defence Medicine in the brand-new Queen Elizabeth Hospital. Here, survivors of the most severe wounds are cared for in numbers that increased from 261 battle injuries in 2008 to 467 in 2009. Some of them move on for rehabilitation at Headley Court, and many need a lifetime of support and care.

Birmingham has been intimately involved in defence and security for centuries. We have experience of every aspect of today's debate-a vigorous, patriotic history,

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with jobs dependent on the defence industry, recruits to the Armed Forces, weekly evidence of the ambulance helicopter flying over my house with the latest stretchered amputee from Camp Bastion, and a population from all over the world with huge knowledge of, and opinions about, our international relations.

I detect two themes from our diverse communities that I will refer to in the context of this debate. They will provide signs of whether the fruits of the sound policy that we are trying to establish for the country and the world will flourish. The first is whether, on the lawns of Edgbaston or even in the back streets of Alum Rock, there will be an understanding of what it costs to be free, and whether that understanding will make us redouble our efforts to get on with each other locally, so that all may live in peace and fulfilment. This is no soft option. What is now labelled being neighbourly or faithfully interactive requires huge intentional effort. The Feast-a joint Christian-Muslim youth work run by Andrew Smith-or the children's centre built into Springfield Church and serving local Muslim families, are examples of that cross-cultural adventure that makes a city whole and gives hope in an ideologically flawed world.

For the second and more pressing theme, I return to those who are wounded, physically and mentally. I echo the recent articles from the British Medical Association and the honourable Member for Edgbaston, arguing strongly for full, continuing help for these servants of freedom. May we, whatever we do in this review, ensure that they be fully supported both by government and the local community throughout their lives.

Birmingham, like your Lordships' House from my early experience of it, is both generous and welcoming. With a shared and fully resourced commitment to the defeat of wrongdoing and the vigorous promotion of peace, we shall together attempt to build a society that is bigger and better than we can all imagine.

11.27 am

Lord Craig of Radley: My Lords, I am privileged to thank the right reverend Prelate for a most excellent maiden speech which the House listened to with great interest. The right reverend Prelate was translated from Birkenhead to Birmingham in 2006, so he has had some experience, as we have learnt from his speech, of the organisations and activities there. I was particularly pleased to note his comments about the hospital at Selly Oak. The right reverend Prelate was also a representative in China of the most reverend Primate the Archbishop of Canterbury, and went there with the most reverend Primate in 2006. It is clear that he will bring to your Lordships' House much wisdom and experience. We look forward to hearing more from him and thank him for today's speech.

I regret that the incoming Administration have spent too much time and effort castigating the Opposition over their handling of defence issues when in government. The Armed Forces serve the Government of the day on behalf of the nation. They would benefit from a non-party-political approach to their activities and requirements. We have this on the need for the nuclear deterrent. Could not the Government and Opposition

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try to reach greater agreement on other parts of the defence programme and requirements? The previous Administration began a review along these lines. Their Green Paper was drawn up with cross-party involvement and published in February, but clearly this has not survived the change of Government. If the present Administration had been prepared to find around 3 per cent of GDP, there would not be so deep a black hole in the defence budget. Their indignation is overdone: are not both sides at fault?

Regrettably, yet again, defence is viewed by a Chancellor as a soft option for belt tightening. That was understandable in the years of the Cold War, but unforgivable when we have had forces fighting hard in Afghanistan for eight years, with the prospect of being heavily committed there for a further four years. The Prime Minister and other senior Ministers say that they wish Britain to continue punching above its weight in the world and that they have no less ambition for this country in the decades to come. I do not cavil at this aspiration, but is it not totally wrong not to fund the forces that may be necessary to fulfil that ambition?

The withdrawal of HMS "Ark Royal" and the remaining Harriers squanders the Fleet Air Arm's future in the fixed-wing carrier role. Scrapping the Nimrods even before they had entered service and reducing frigates and destroyers to a mere 19 vessels, collectively blows an enormous hole in national maritime capability which we shall be living with, on present plans, for the next decade and beyond. This gap in capability could endanger national security more than any reduced commitment to land operations.

The chiefs of staff, I am told, accepted these savage savings and those in the Army, but have forcefully pointed out that the force structures for the 2020s will be achievable only if there is real-terms growth in the defence budget over the second half of the decade. In other words, the defence budget has to grow from the reputed 2 per cent of GDP to, say, 3 per cent or more. In his Statement in another place on the SDSR on 9 October, all the Prime Minister was prepared to say on this vital point was that in his personal view,

But we shall have lost capabilities and momentum.

Indeed, I foresee a hard pressed Chancellor once again pointing out that, as we have survived thus far-if we have-with these reduced capabilities, would it not be reasonable, as we free ourselves from Afghanistan, to extend the period into a rolling year-by-year programme of just 2 per cent expenditure on defence? We are close to aping the position adopted in the 1930s: that the country will not be facing a serious threat for a decade and that defence provision should be scaled back accordingly.

Finally, I give my take on the regrettable but financially driven decision to withdraw from service the remaining Harriers. All the air defence Sea Harriers were scrapped in 2006, a decision taken when the noble Lord, Lord West of Spithead, was the First Sea Lord, leaving a fleet of combat offensive aircraft with no radar, no long-range air defence weapon and of no significant use in an air defence role. In 2008, a cost-cutting

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decision halved the remaining number of offensive support Harriers. For five years, from 2004 to 2009, this small jointly manned Royal Air Force/Royal Navy force maintained a detachment of eight aircraft in Afghanistan, a remarkable achievement for such a small force, bearing in mind the distance from home-base support, the very hot climate and high terrain and serious undermanning of the Royal Navy element. This tremendous effort became unsustainable. The Harrier force had to be relieved and was replaced in mid-2009 by Tornados.

This year's greater operational tempo in Helmand required additional offensive air capability and the Tornado's contribution has been increased temporarily from eight to 10 aircraft deployed. Compared to the Harrier, the Tornado provides a greater variety of missile systems, an exceptionally accurate gun and advanced intelligence gathering capabilities, as well as better range, endurance and payload. It also provides our ground forces with real-time tactical intelligence of enemy movements, live direction of the battle, and critical support to troops in contact. The Tornado force has the capacity to sustain this operational commitment and an element, if needed, for other air operations with unique capabilities such as Storm Shadow.

In the round, the decision made back in 2008 to replace the overstretched Harriers in theatre with Tornados by mid-2009 was soundly based, if we were to maintain our combat air contribution in Afghanistan. It would also have allowed the joint Harrier force to re-train in its neglected role of delivering airpower from a carrier. But the remaining Harriers could provide no task force protection from enemy air attack. It would be foolhardy-maybe I should say bonkers-to send a carrier to Falklands waters without the air defence coverage of the Typhoons at Mount Pleasant.

Support savings are also significant when an aircraft type is withdrawn from service. The search for economies in 2008 and again this year have forced a premature end to the Harrier force. I should like to pay tribute to the iconic Harrier, to the brilliance of its concept; to the airframe and engine designers and manufacturers who brought it and its jump jet engine into service; and to all those who flew and maintained it. It is a unique and internationally renowned aircraft, very much a Cold War requirement, conceived, developed and operational for that commitment. But no one could now argue that that made it unusable or unsuitable for the non-Cold War operations in which it took part.

From the recovery of the Falklands nearly 30 years ago in the freezing weather of the distant South Atlantic, along with its maritime derivative, the Sea Harrier, to the conflict over Kosovo; and to the five hard, pounding years in the heat and dust of Afghanistan, it has demonstrated operational longevity, great global reach and role flexibility. But for the financial cuts, it had many more years of service to offer, not least embarked on the first of the new carriers.

Eurofighter Typhoon, now in service with the RAF, is too often criticised as a legacy of the Cold War and so too expensive and useless for today's or future conflicts. But Typhoon is another fine example of a

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multi-role operational design. It will follow the real life example of the Harrier's 40 years in the front line. It will prove to be every bit as flexible, long-lived and valuable. Criticising Typhoon as a useless Cold War relic is mischievously misinformed and monumentally mistaken. It is a very fine aircraft prized and praised by its operators, as I learnt when I had a flight in one from RAF Coningsby. We should be praising Typhoon, now deployed 8,000 miles away in the Falklands, not denigrating it.

11.37 am

Lord Sterling of Plaistow: My Lords, I am delighted that my noble friend the Minister has invited his military advisers to appear in uniform in our House. I have long advocated that the more the public see the Armed Forces in uniform the better. I think that Sir Neil Thorne's splendid Armed Forces parliamentary scheme over some 20 years has led to a greatly enhanced understanding of the role of our Armed Forces in both Houses of Parliament, particularly for those who have not experienced the joys of square bashing in the past.

I strongly support the Government's attack on costs and, in particular, the need to change attitudes created by the welfare state. But I am afraid that the ring-fencing of the National Heath Service and the massive increase in the budget of the international aid programmes has led to serious distortions affecting other areas of government. In my view, the Armed Forces and the police force should have been excluded from the cuts programme. Defence of the realm and protection of our national interest is the first priority of government. Protecting the population on the streets of this country is the right of every man, woman and child and is the key responsibility of our police force. They should both have had totally separate strategic reviews, addressing our longer-term needs. Haste has been such that it is impossible to consider that the defence review, in particular, has been truly strategic.

Having said that, it should be noted that the financial outcome, although barely acceptable, would have been considerably worse if it had not been for the single-minded efforts of our Secretary of State, Liam Fox, and our Chiefs of Staff. The Prime Minister is now fully aware of what we will not be able to do, particularly in the near future, and the outlook is still pretty precarious. It is vital that the defence budget is enhanced each year, or even the 2020 plan will not be met.

To give your Lordships but one example of what is key to our interests, the waters of the Middle East, including the Red Sea, the Gulf of Aden, the Gulf of Oman and the Arabian Gulf are of vital strategic importance to the United Kingdom. Do we, and will we, have the real capability to protect those vital interests? Others will say that we do not act alone, but for the United Kingdom to take the lead is often key, and in these increasingly dangerous times, with such diverse political stances, our leadership, both moral and from a position of authority and power, can be the determinant factor. Sadly, a very senior figure stated the other day that we are very rapidly becoming, from a strategic point of view, a significant irrelevance in American and other eyes, and this will not go unnoticed by those who are not our allies. What this

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country must decide before it is too late is that at least 3 per cent of our GDP, as was mentioned by the noble and gallant Lord, Lord Craig, must be allocated to our defence needs. That 3 per cent should exclude contingency fund provision in time of war.

Nick Butler, a former senior strategist at No 10, and I issued a joint paper on the key link of the needs of the Ministry of Defence with our national industrial capability. Of course, the Ministry of Defence must run more efficiently and its management structure be changed in order to operate effectively for the needs of tomorrow, not yesterday, but Britain's future capability cannot be made victim of past mistakes, and it is wrong to treat this department the same as other departments; it is not.

The analysis behind the 2005 defence industrial review was extended and updated by work undertaken by the Ministry of Defence, the Business Department and the Home Office before the general election. That work, commissioned and led for No 10 by Nick Butler, identified the crucial link between defence policy and industrial capability. That report also identified the extent and quality of the supply chains which underpin the strengths which exist today. Regrettably, that report remains unpublished; it should be on the table for the Prime Minister, the National Security Council, the Chancellor and both Houses of Parliament.

The dust is settling, but will my noble friend consider that there is still time for a truly measured review of our national needs which, in my view, should extend to at least 2040? After all, the life of a ship, submarine or aircraft and much other military hardware is planned for at least 30 years; 10 years is much too short a horizon. I personally also strongly advocate the case for two carriers, and hope that we do not rue the day that we dropped our Harrier capability. I also suggest that the present review of the role of the reserves is not only crucial but must be truly radical, that it must be based on thinking, not just nibbling at the edges and paying lip service to their existence.

This debate on the security of our country is above party politics. I am sure that, in the main, all here are totally bipartisan. Judging by the important debate in the other place last week, this view is shared, and the increasingly powerful Defence Select Committee chaired by James Arbuthnot is and will be addressing many of the concerns that are aired here today.

For all that, I am sure that we are in total agreement that by far the most important factor of it all is our people. The key difference between a good and a great military is not its equipment but the quality, dedication and loyalty of our men and women serving our nation all over the globe, often putting their lives at risk. They are prepared to pay the ultimate sacrifice and, sadly, in many cases, face mutilation for the rest of their lives.

It is most appropriate that we are having this debate between Remembrance Day and Remembrance Sunday. On television this morning, I watched our Marines, one a triple amputee, complete their charity run of more than 5,000 miles across the United States. Last week, at the Trafalgar Night dinner at HMS "President", I was talking to a Surgeon Commander in the naval reserve who had just returned from a field hospital in Helmand province in Afghanistan. He told me that on

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average he did 70 amputations a week on Brits, Americans and civilians. That load of students who the other day were screaming for their rights should strongly note how our splendid men and women handle their responsibilities. Do we really take all that fully into account when creating the financial package that they receive?

Indeed, following the review, many items are likely to be reduced, and I consider some savings downright petty. It is impossible to put a price on our Armed Forces, so do we account for them as a cost centre? History has shown time and time again that, in time of need, their value is priceless, and has been the saving of our global interest and, indeed, our very existence. Having read the letter in the Times this morning signed by the Chief of the Defence Staff and the other chiefs of staff, I have no doubt that, as dedicated professionals, they will do their utmost to deliver what this country demands of them, but is it too late to ensure that they have what they truly need?

Finally, there was a letter in last week's Economist, which read:

"America's secretary of state, Dean Rusk, raged incredulously in 1968 when he heard of the British withdrawal 'east of Suez'. Rusk could not believe that 'free aspirins and false teeth were more important than Britain's role in the world'. Philip Larkin, in his 1969 poem, 'Homage to a Government', wrote ruefully:

'Next year we shall be living in a country

That brought its soldiers home for lack of money ...

Our children will not know it's a different country.

All we can hope to leave them now is money'.

11.47 am

Lord Hutton of Furness: My Lords, it is an enormous privilege to make my maiden speech in this debate today. Defence has always been an issue of very great interest to me. That began with listening to stories from my grandfathers, who served in the First World War, my great uncle, who served in the American Army in the First World War and my late father, who served in the Royal Marines in World War II.

That interest in defence matters developed very significantly when I became the Member of Parliament for Barrow-in-Furness nearly 20 years ago. As has been alluded to today, my former constituency has a unique association with the Royal Navy going back more than 150 years. The shipyard in Barrow built the first of the Royal Navy submarines; today, it is completing the latest generation of nuclear attack submarines-the Astute class, which is a formidable addition to the Royal Navy.

The links with the armed services in my former constituency extend much wider than the Royal Navy. I am glad to say that there is a very strong Army tradition in my constituency, too. Initially, the local infantry regiment was the King's Own (Royal Lancaster Regiment), which saw service in the First World War and other, earlier conflicts along with the Border Regiment. Both those great regiments of the British Army are now unified in the Duke of Lancaster's Regiment.

Those who wear the uniform of our country render public service of the very highest kind. We have all noticed a rising tide of sympathy and support for our country's Armed Forces. That is palpable and tangible.

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I personally believe that it owes a very great deal to the heroism, service and sacrifice of these young men and women in recent conflicts in Iraq and Afghanistan. I think that this rising tide of support for the men and women who serve our country in this way is a profoundly good thing. It has helped our Government to focus on ensuring that we stand by them and fully discharge the debt that we owe them all. However, I suspect that there is always more to be done in this area. The primary responsibility rests with government, but the role of the service charities is hugely important, too, because they give all of us as individual citizens a practical means to show our own appreciation for the service and sacrifice of Armed Forces personnel. During my time in this House, I want to focus on that in particular.

In this context, I am concerned, as I am sure are many other noble Lords, about the front-page news story in the Times this morning. I believe that this must be an unintended consequence of the Government's decision to change the rules about how pensions and benefits are indexed. For noble Lords who have not seen the story today, I should say that it looks likely that serving men and women who are injured on active service will see a very substantial reduction in the amount paid to them as a result of any injury that they have sustained. I simply believe that to be wrong.

Today your Lordships' concern is with the strategic defence and security review. Like my noble friend Lord Robertson, I want to start on the positive side. There are many things in the strategic defence review that we should be positive about. I strongly welcome the attention now being paid to cyberwarfare, which is a real and sinister threat to national resilience and security. I also welcome the renewed emphasis on conflict prevention and stabilisation and on improving the capabilities of our special forces. I welcome the increased size of the Chinook fleet, which will be a great help to our forces in future. These are all sensible and welcome measures and are in the mainstream of defence thinking today, following some of the changes that have been made in the United States. Our forces are becoming more flexible and deployable, and that is absolutely right. I also welcome, as other noble Lords have done, the emphasis on ensuring success in Afghanistan. That mission is vital to our national security, and I believe very strongly that all of us in public life, in this House and elsewhere, should always remember why we are in Afghanistan and why we ask our young men and women to fight in our name there.

However, significant concerns have been expressed today about the strategic defence and security review, and I believe that those concerns are fully justified. The last time that defence spending was cut significantly in this country was about 20 years ago in justifiable response to an improving strategic and security environment. That cannot be said of this situation. This time, we are reducing defence spending in response to a worsening fiscal environment. One thing that we should all be clear about, here and elsewhere, is that spending less on defence does not make the threats that we face-which are all clearly set out in the national security strategy-any less serious. Unfortunately, it simply makes us less able to deal with them properly.

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There are a number of reasons to be concerned about the strategic defence and security review. The idea of aircraft carriers being without aircraft for a decade is not an example of sensible strategy and undermines the very concept of carrier strike. The early decommissioning of the Harriers is a profound mistake. It is disappointing that Ministers have not stuck to their guns on this. For a small amount of money, the Harriers would have given much more strategic credibility to this vital part of our future force projection. If we are to have aircraft carriers, we need to be able to defend those vital assets should they deploy in an active theatre of operations. We cannot rely on others to do that for us. In this context, I believe on the basis of advice I was given when I was Secretary of State for Defence that the loss of Nimrod poses an unacceptable risk to those vital capital warships. I notice, as have many others today, that the First Sea Lord has expressed his unease about the loss of this very important anti-submarine capability.

I am also concerned about the overall reduction in our capability to deploy ground forces. It is clear from the SDSR that we will not be in a position to mount another operation on the scale of the Iraq invasion of 2003. Why we are making such a reduction from a strategic point of view is not entirely clear to me. There is a danger that the SDSR will look to some like salami slicing-the one thing that Ministers should, above all else, have tried to prevent.

If the real context for this review was the fiscal situation, it would have been helpful, as many others have noticed in this debate, to have had more clarity about the future resources required to fund even this diminished level of capabilities. My understanding is that there will need to be significant real-terms increases in spending on defence to make the books balance over the next decade, which is a perfectly laudable ambition of the Government. We could benefit from greater clarity here about the Government's future spending intentions.

At the heart of the financial assumptions is the need for the MoD to reduce its costs, and I believe that there is ample scope for doing that. As Bernard Gray's excellent report made abundantly clear, the defence procurement process needs fundamental reform. I wish the noble Lord, Lord Levene, well in his endeavours in this regard, but if the projected savings do not materialise it is far from clear that, without additional resources, the MoD may not have to look at even further reductions in front-line capabilities.

My final point, which has not been raised so far, is on the future of our defence-industrial base. I believe it to be of vital national significance that we retain sovereign capability in key areas. The SDSR does not say a great deal about the defence-industrial strategy, but we certainly need one, so I look forward to the White Paper that the Government are proposing.

I accept that the Government, through the SDSR process, have tried very hard, and I praise the efforts of Ministers and officials, to maintain a balance of effective military capabilities on land, sea and air. Sadly, I have to say that very few people think that the Government have fully achieved that objective. Along with many

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others, I hope that there will be time in future for Ministers to reconsider aspects of their strategy as we go forward.

11.56 pm

Lord Soley: It is an absolute delight and privilege to follow my noble friend Lord Hutton-my old friend-in this debate. I have known him for many years and, like the House of Commons, I have always respected his calm and rational assessment of difficult judgments that had to be made in a number of the positions that he held there. I also knew him as a constituent; he has the great advantage of being one of my constituents who did not come to see me to complain about everything, for which I am always grateful. The other thing that ought to be remembered is that he speaks with considerable experience of the military, not only from his own background but, as many noble Lords will know, from the book that he wrote on the history of the Royal Lancaster Regiment in the First World War, Kitchener's Men, which gave a gritty account of the life of soldiers in the 1915-18 period.It indicates his knowledge and commitment to the area that he served so well and I look forward to hearing from him again. I also look forward to hearing more from the right reverend Prelate the Bishop of Birmingham, who also made a helpful contribution today.

I do not want to spend too much time on some of the issues that I know will be covered by people better equipped than I am to deal with them, but I want to make a couple of broad points before going on to my main point. The first point is that we are witnessing a profound shift in the balance of power in the world. My noble friend Lord Rosser is right to point out that the economic crisis was a western-world crisis. There is a shift of power from the West to emerging superpowers. We need to be aware of that. It is one reason for the agreement with France on the use of the carriers, for which I commend the Government. That treaty ought to be extended. As my noble friend Lord Robertson said, there are other countries in Europe. Contrary to the popular opinion of some Members on the Conservative Back Benches in the other place, Europe is vital to our interests and co-operation on these areas is crucial. France also recognises that it cannot continue at the same strategic level without co-operating with the United Kingdom. I think-and I speak as a member of the International Institute for Strategic Studies-that this review reduces our capabilities. We cannot escape from that. The only way in which we are going to be able to build them up in future is by co-operation with our allies, particularly our allies in Europe. I hope that the Government will have the courage to make more treaties on that, whether in the context of a wider European basis-NATO, the EU or whatever-or on an individual basis. We need to recognise the shift in power.

The other thing that I want to mention, on which my noble friend Lord Hutton touched, is the industrial basis. The position of Britain for manufacturing is far better than many people give us credit for. We are still the sixth largest manufacturing country in the world. We have, in the aerospace industry, the largest manufacturing capacity in the European area. It was, the last time I checked, still the second largest and

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second most advanced aerospace industry in the world. I get worried that we will not retain that position unless the Government take it into account when they make decisions on both the civil aviation side and the military aviation side.

That enables me to say also that I agree with those people who are expressing deep concern about the decision on the Harriers, Tornados and Nimrod. I recognise that the Government have a difficult problem with the expenditure balance, but they need to remember that, as my noble friend Lord Rosser said, this is about the assessment of how you handle it. If we had not proceeded with the two carriers, we would have had to look at the opportunity costs and at the economic impact on certain areas and, above all, on the industries that are required to service those aircraft carriers, which are some of the most advanced technological industries in the country. To give a final plug for another local issue-not local to me, but one that I happen to know something about-Lossiemouth is very important to the economy and the morale of the people in that area. Lossiemouth is important in all this.

A positive comment that I can make about the strategic defence review is that the Government are getting it right about the threat from cyberwarfare. I know that the Minister would be the first to accept that he is building on the excellent work done by my noble friend Lord West when he was the Minister. The idea of the new operations group to deal with this problem is excellent. Someone said recently that this is a "horse and tank moment". I do not know whether it is or not, but it is certainly true that we are moving into a situation where not just nation states but well armed, well organised groups of one type or another can do immense damage to the economy of an advanced nation without a shot being fired or a bomb being dropped. It is a particularly big and serious threat.

I shall spend my remaining minute on something that is not in the review but to which we should give more attention-the morale of the Armed Forces. Let me say clearly that I think that morale is extremely good. Whenever I have been to Afghanistan, Iraq or other areas, I have seen that morale is high and good. I am not talking just of morale as regards pay, pensions, housing and things of that type. I am also talking about the way in which we address the problem for the Armed Forces when we are dealing with these new types of conflict, whether Afghanistan or some of the terror threats around the world.

In some of the media coverage, there is an expectation that somehow or other the Armed Forces in a state of war have to be dealt with on the same legal basis as if we were dealing with a civilian operation. For example, some of the discussions in the courts when they are dealing with coroners' reports-I can give only one example, simply through the shortage of time-concern whether it is wise to send soldiers in a soft-skinned vehicle or a heavily armoured vehicle to a village or another area where we are trying to win hearts and minds. Let us be clear: those troops might consciously be putting their lives and safety at greater risk simply because they have made an assessment of the need to use a soft-skinned vehicle rather than a heavily armoured vehicle. In many of those cases, I do not know how

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you can argue in a coroner's court that conventionally this is in some way similar to the requirements of a civilian employer.

I do not want in any way to imply that the British Armed Forces should act outside the law or that we should not support, as we do, extending the rule of law-including on war crimes-as far as possible into these situations. However, we could be in danger of assuming that everything in civil law can be applied in the military sphere, when it cannot be. I have used this example before, but I make no excuse for using it again: in the 19th century, when Britain used its Armed Forces to stop the transatlantic slave trade, the captains of ships were brought to the court here in the House of Lords and fined for interfering with trade on the high seas. The discussion in the press at the time was, "We must stop what we are doing. Bring our troops home. Bring our boys home. We are making matters worse". The arguments were very similar to those that we hear about Afghanistan now. At some stage, we need to look at the way in which we deal with this difficult area of the legal situation relating to our forces in conflict, as opposed to civil situations.

12.05 pm

Lord Boyce: My Lords, I declare an interest as a non-executive director of WS Atkins plc and other interests as in the register, including pro bono appointments in various service charities and organisations. I intend to concentrate on the defence part of the SDSR but, in passing, I welcome the attempt, under the umbrella of the national security strategy, to get some sort of order among the plethora of departments and committees dealing with various aspects of our security. It will certainly be good to see some tidying up of the shambolic and Byzantine network and, some might say, the spaghetti-like structure for security and defence that has been in place for the past few years.

So far as defence is concerned, I remain absolutely unable to reconcile the word "strategic" with what has emerged in the review, notwithstanding the country's economic difficulties. This has been a cost-cutting exercise, although I congratulate the Secretary of State for Defence on his damage limitation efforts with respect to the sort of savings that some parts of the Government, notably the Treasury, were after. The Treasury's empathy and understanding of defence are probably best captured by the Chancellor referring to aircraft carriers as "those things" in a TV interview.

With an effective cut in the defence budget of 17.5 per cent-not the headline figure of 7.5 per cent that is bandied around by those trying to cloak the true nature of the cuts-the Prime Minister's words that the security of our country is the first priority of the Government ring very hollow, as does his expectation that we should retain a prominent position in terms of global influence. In particular, I challenge the complacency of the statement that a defence budget-it now includes the cost of the Trident replacement, thereby, by the way, unravelling the promise of both main parties in the 2007 White Paper-of 2 per cent of GDP meets NATO targets. Only a few months ago, the then Opposition rightly railed against the then Government

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about the inadequacy of a defence budget of only 2.3 per cent to meet our strategic security needs. The world has certainly not become less dangerous since then and there is no security justification for certain of the proposed cuts in our defence capabilities.

Turning to some of the detail of the defence review's conclusions, I am sure that noble Lords would like to bear a thought for the 17,000 or so uniformed people who are to be axed-that is, service men and service women who have put their country first and their lives second. The fine-sounding words about the military covenant in the review sound cynical to me. By the way, lest anyone should think that only our outstanding soldiers have been in Iraq and Afghanistan in the past 9 years, I should say that there have been, and are, plenty of sailors, marines and airmen on the ground. The Royal Navy is the only remaining UK force in Iraq, for example. Next year, once again, the Royal Navy with its Royal Marines will constitute more than one-third of our commitment on the ground in Afghanistan.

I am sure that great resentment will have been felt by all our uniformed personnel about the comment in the review that manpower savings will be taken from non-front-line service personnel. Certainly in the Royal Navy everyone is required to serve on the front line. I ask the Minister for reassurance that, in the looming redundancy programme, our sailors, marines, soldiers and airmen are not going to be got rid of with the bare minimum pay-off that I am absolutely certain the Treasury would like to inflict. Incidentally, I suspect that, like me, our uniformed personnel must find it curious that the MoD Civil Service will have no compulsory redundancy programme.

Turning to capabilities, I would like to focus on maritime. I start by applauding the Defence Secretary for supporting so strongly the need to retain a balanced Navy on which we can build in better times. However, despite his best efforts, I believe that the Navy will be too depleted to be able to deliver all that history has shown might be expected of it and which can be expected again. It will be too depleted to be able to meet the aspirations of global influence that the national security strategy would have us deliver and too depleted to be able to contribute sensibly to every one of the seven military tasks laid out in the review. Incidentally, the Navy is the only service that is so obligated.

In particular, a destroyer frigate force level of 19, which I understand will be reached in just five months' time with the paying off of our four very capable Type 22 frigates by next April, is just too small. I suspect that we will dip below that number before 2020, as Type 23s have to start paying off. Meanwhile, fewer ships should mean fewer tasks, not least because the fleet is already overstretched to meet its current operational commitments. Will the Minister say which commitments are going to be given up or, at the very least, if such details are not yet thought through, will he assure the House that the fleet load will be reduced? I should add that that reduced role will do nothing for our international standing and influence.

Let me touch on the carrier decision; your Lordships would be surprised if I did not. The disposal of Harriers, which other speakers have mentioned, will,

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notwithstanding my earlier comment, cause the Royal Navy to be unbalanced in the medium term. First, the underlying rationale in the review for disposing of this aircraft, which gives the carrier its strike capability until the introduction of the Joint Strike Fighter, is this:

"The Government believes it is right for the UK to retain, in the long term, the capability that only aircraft carriers can provide-the ability to deploy airpower from anywhere in the world, without the need for friendly air bases on land. In the short term, there are few circumstances we can envisage where the ability to deploy airpower from the sea will be essential".

What a desperate expression of hope over bitter experience. The people serving on the National Security Council must have been asleep for the past dozen years or so.

We have no problem today because we have no emerging crisis. That can change in days, as it did for Sierra Leone, as it did in 2001 and as it did in 2003, to take the most recent significant examples where some so-called friends and allies, let alone neutrals, prevaricated endlessly over or even denied our overflying rights and host-nation support. We cannot even fly direct from Cyprus to Kandahar today. The review goes on to say,

but that absolutely does not stand up to any serious analysis or judgment of history. The reason, pure and simple, is to save money. The Government should have the moral courage to say so and admit to the enormous gamble that they are taking.

Secondly, the Harrier GR9 is a relatively modern aircraft, not 40 years old as deviously implied in the review. It is significantly more modern than the Tornado-for all its virtues mentioned by my noble and gallant friend Lord Craig-against which it is compared and which will cost around £2.5 billion to modernise. So far as the close air support role in Afghanistan is concerned, if you speak to those on the ground at the very sharp end, especially the forward air controllers, as I have done recently, there is no question but that the Harrier is their aircraft of choice, not least because of its speed of response and reliability. Perhaps the noble Lord, Lord Lee, was right to say that we need both the Harrier and the Tornado in the interim before 2020.

Thirdly, will the Minister explain how, without "Ark Royal" and the Harrier force, we are to retain enough of the Navy's current carrier operators and pilots to keep alive the critical and essential expertise that will allow us safely to re-establish a UK carrier strike capability in 2020? In particular, will he provide an unequivocal reassurance that the future Joint Strike Fighter force will be manned by both Royal Navy and Royal Air Force pilots?

Shifting to the deterrent, I generally welcome the decisions in the paper, especially the commitment to continuous at-sea deterrence and ballistic launched missiles. Any other course of action simply will not provide a truly invulnerable and totally assured strategic deterrent. However, as someone scarred by the trials and tribulations of managing ageing nuclear submarines, I have serious misgivings about extending further the lives of the Trident class. Of course, Ministers will not have to go to sea in them when they are ancient-the

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submarines, that is, not the Ministers. I predict difficult times ahead when those submarines are past their proper sell-by date.

I conclude by saying that many aspects of this review have resonance with the ill fated Thatcher-Nott review of 1981, the Options for Change review of 1991 and the defence costs studies of the early 1990s. We can but hope that we are not once again assailed by events shortly after these reviews, as has happened before, showing how ill advised they were. We can but hope that we are spared the time for the Prime Minister to realise his "own strong view", articulated in his Statement on the SDSR in the other place, that we,

That is, as I say, assuming that we are spared until then.

12.16 pm

Baroness Ritchie of Brompton: My Lords, I welcome the opportunity to take part in this important debate on the strategic defence and security review. Although I do not have the military and service career experience of many noble Lords present, I speak not only as a service child myself but also as someone who has spent much of her political life looking at the role of the state in regard to families and children. So I would like to make a couple of observations about the effects of the review on service families.

I welcome the policies that the Government have announced to help service families, such as the educational grants for higher education for children with a parent who has died on active service, and the prospect of more stability for families with the reorganisation of brigades and bases. However, there is still a degree of uncertainty about where the bases are going to be, and about what allowances-such as the continuity of education allowance-will be continued. I am aware that Professor Hew Strachan is looking into this, but I urge the Government to make any decisions speedily so that families can plan for the future.

Making decisions on education, moving and changing jobs can be the cause of great friction within families. Many spouses of Armed Forces personnel work outside the bases and they will want to sort out their future employment. This is particularly relevant in the long-established bases such as RAF Kinloss and Cottesmore where families have been based for long periods of time. I have heard that some families in the Scottish bases are worried about finding another job for their spouse, and about moving from the Scottish educational system to the English one. Extra support for these families will be paramount.

Roughly 48 per cent of our service families have children, and the impact of service life can be very challenging for them. I would like to draw noble Lords' attention to the excellent report funded by the Royal Navy and Royal Marines Children's Fund entitled The Overlooked Casualties of Conflict, written in November 2009. It clearly outlines the concerns and issues surrounding the children of Armed Forces personnel, such as bereavement and the bureaucratic restrictions on service children with special educational needs who have to move schools frequently.

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More than 20,000 service families move each year, and I would welcome any plans to reduce this number significantly. However, if that is not possible, provision should be put into place for continuity of education in schools, and with reasonable allowances, because often these moves are made at short notice. No one would want a child in the middle of the second year of their GCSE course to have to move school. Service children have the added pressure of having a parent or, increasingly, both parents serving in a danger zone, with all the added anxieties that that involves. They may also have to deal with bereavement or disablement, either physical or mental.

I welcome the announcement of extra funds for dedicated mental health nurses to be available for service personnel. Divorce rates are higher in the Armed Services than in civilian life because of some of the pressures and strains that I have already mentioned. We need to make sure that there is support and counselling for these families. The pressures of Armed Services life can be tough, but our service personnel and their families cope admirably. However, it is more difficult to cope with uncertainty, and I ask the Minister to announce soon what provisions will be put in place for allowances and where the brigades will be located, so that our brave Armed Forces and their families can plan for their futures accordingly.

12.20 pm

Lord Reid of Cardowan: My Lords, I declare an interest in various security matters, as registered and declared previously, including a partnership in the Chertoff Group. I join with other noble Lords in the tributes they have paid to the fallen who have served this country, including this week's tributes to Senior Aircraftman Scott Hughes.

The Minister began his introduction by referring to the strategic and financial framework. Everyone recognises the financial constraints under which the Government have been operating and the question is not whether there is a cost element in the review-there always is-but whether the primary guidance of the review is strategically or cost based. One comparator is the review carried out by my noble friend Lord Robertson some years ago, in which I declare an interest as having played some part in it. During that review in 1997-98, we spent as long considering the foreign policy objectives and strategic framework which our military power was meant to pursue and accomplish as we spent on the whole of this strategic defence review.

This is singularly unfortunate for two reasons. First, it will leave the review more open to Treasury raids-which will come-because if it is not a strategically based review, starting from foreign policy objectives and working through to the military-operational means to accomplish them, it will be easier to get rid of the military-operational means because, after careful study and consensus building, the foreign policy objectives have not been clearly identified. Secondly, the strategic starting point is more important than ever because we are in the midst of huge changes and increasing danger, as was pointed out by my noble friend Lord Hutton in his maiden speech. The shift of power among sovereign states from west to east; the shift of distribution from

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corporate organisations and sovereign states to individual groups of non-state actors; the exponential growth of asymmetric warfare and ideologically driven conflict; and the proliferation of the means of mass destruction-radiological, chemical and biological weaponry-which are now attainable by the few rather than by states, all demand a strategic review. It is therefore a pity that the Government fell short and did not spend a little longer on this fundamental starting point.

On financial implications, we all understand the need for debt reductions and, in some ways, we should congratulate the Secretary of State for Defence on his courage in putting his principles above his career prospects by standing up to the Treasury. However, it did not seem to impede either my noble friend Lord Robertson or me afterwards, so that is perhaps happy guidance for him. But a number of ambiguities remain-I shall mention only one. While it is said that the cut in defence expenditure is much less than in other departments, this will apply only if the independent nuclear deterrent remains centrally funded. If it is added to the defence budget, the figures will change quite dramatically over the next few years. Can the Minister give an assurance on that?

I ask for that assurance because we all have a common cause here. The Treasury will come back. The pattern of defence reviews over the past few decades has been quite similar: analyse and identify the needs; agree on the operational and military needs; start to implement them; and then the Treasury refuses to fund them fully. That is the nature of the Minister's implication that, "This is just the beginning". It certainly is in respect of relationships with the Treasury.

On finance more generally, I make one simple point. The Government should resist the temptation to place all responsibility for the cuts and our financial plight on the previous Government. It may win the minutes but it will lose the hours. I say this not because of my personal interest in the previous Government but because there is a serious strategic danger in maintaining the illusion that it was caused by the choices of the previous Government: it would completely divert attention from the role of the banking and financial sectors in our economic catastrophe and, in turn, dangerously overlook the crucial interrelationship and interdependence between economic strength and security-or, to put it another way, economic weakness and insecurity and the lack of capacity to build military power. We would be better to honestly admit that element of the conundrum that we face. This has been identified by people such as Paul Kennedy in his book about the relationship between economic strength and the potency and capability of producing political and military power. If we do not admit it, then, rather than starting afresh, we will start again the same cycle of the illusion that we have the financial means on paper, write in the military means and then face the reality of never being able to deliver but rather push it to the right.

On procurement, again the party-political blame game hides the real problem-the procurement process. This is particularly exacerbated by the fast life cycle of technological innovation. If it is the case that the life cycle of a technology is now 18 months and yet we, like the Pentagon, take 84 months to apply even a

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technological specification to a product because we keep respecifying, at the end of the day, even if we get the product, it will be four generations too late because of the technological life cycle. The reality is that we probably will not get the product because continual respecification means never-ending redesign, which means the product never being delivered at the end of the process. That is not a party political matter; it is intrinsic to the present system. I urge the Minister to look carefully at the recommendations of Bernard Gray, whatever else comes out of the review.

I shall say little about the carriers-the most controversial aspect-as others have done but better than I can. All I do is ask the Minister if he will at least consider some means of retaining the skill of pilots to land on aircraft carriers-which is much different from other skills-either by retaining a small number of planes, or by assuring the House that our pilots will be seconded to the United States carrier fleet in order to do that.

On operations, the main thing in Afghanistan is to send out a clear message that we will stay the course and to introduce a campaign plan which integrates DfID, our public messaging and political and military surges. If we miss out any of those elements, we will not achieve what we should.

On contingency capacity, we should recognise that, however we plan, there will be a desperate need for a surge capacity at some stage which will mean that the reserves and the Territorial Army will become even more important than previously.

Let me say few words on wider security. On terrorism, the Home Secretary has said that al-Qaeda is weaker than ever. That is half true. However, it is also true that we now face four levels of terrorism: the al-Qaeda core; its affiliates in many national states, including in the Maghreb in North Africa; its associates, who now fight under the umbrella of al-Qaeda; and self-starters, including in our own country. Although the latter are less professional, less prepared and less centrally controlled, they are thereby all the more dangerous because they are often clean skins and there is no way to trace back their connections and so on. I would have liked to have seen more on the Office of Security and Counter-terrorism and a little less complacency over the fact that we have undoubtedly been successful there.

I welcome the Government's extra money on cyber issues but, so far as I can see, one thing is missing from the review: the cyber infrastructure is still a growing part of the critical national infrastructure but it is not in government hands. So, where is the interface that will bring together the academic, private and public sectors in order to ensure that this most serious and growing of threats is countered?

This review is good in parts. Some of it is sensible, some of it is inevitable, some of it is missing and some of it is incomprehensible. Our task is therefore surely to accept the inevitable, welcome the sensible, augment its weaknesses and revisit the incomprehensible, and to do it together. We owe that to the Armed Forces and the nation.

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12.30 pm

Lord Addington: My Lords, when I put my name down to speak in this debate, I felt that I would probably be entering into a debate where there was a great deal more knowledge among the speakers than I have. I am afraid that has been confirmed to me on several occasions.

Having considered what should be the focal point of my contribution, I decided to talk about the problems of procurement. The noble Lord, Lord Reid, has just jumped all over what I was going to say with far bigger and heavier shoes than I have brought with me today, so all I will say is that everything that I have learnt about this subject boils down to the fact that the procurement process is definitely not fit for purpose, as he describes. The noble Lord, Lord Drayson, was the person who talked me through that.

When are we going to develop the courage to say, "Scrap this process, dump it and buy off the shelf?". At the moment we do not do that, and things taper on. We say, "Oh, let the project bubble on and see if it catches up", but that does not happen. That is the black hole in the procurement process. All Governments and anyone who has been involved in them share some of the blame here for saying, "We can't have the most wonderful bit of kit going. Let's see if we can get the bit of kit that is good enough to do the job and gives our troops in the field a decent chance of achieving that with minimal casualties". Until we have enough courage to stop thinking like this, we are going to have problems.

The ability to buy off the shelf will mean that we have to have a balancing act between our own strategic industrial capacity and the problems in the field. If we have to structure that and admit to it, we may take some steps towards dealing with it. We cannot have a situation where we are running around and chasing our tails, keeping projects running and then saying, "This isn't going to be ready-we need to buy something else", thus incurring maintenance costs that are far in excess of what they would be if we said, "We're going to do it ourselves or we will buy off the shelf". When are we going to have something in place that says that we will do one or the other? Until we do, the great background costs-they are the great problem, rather than the upfront costs-will mean that we will never really address the black hole.

One of my noble friends asked before when we are going to develop a coherent attitude towards wars of choice-when do we fight and why? The previous Government got themselves drawn into situations where we sent the troops in. That is understandable. This is not a party political point; it is about the illusions of power-"Let's just send something in to deal with this situation". On several occasions the previous Government got away with it. On certain occasions before Iraq and Afghanistan, the consequences were not too bad for us and our troops, but then they suddenly got real. Unless the Government, the whole of Government, learn to say, "We cannot do things", "We cannot intervene here", "We cannot do it by ourselves" or "We will not go in just simply because an ally is going in"-once again, I am referring to Iraq; I forget how many undeployed American divisions there were-and

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build this into the structure of our decision-making process, we are going to continue to push ourselves into places where our structure for supply, troop numbers and planning will not be fit for purpose.

I will leave my comments there. Unless we are prepared to limit our posturing, given our limited defence capacity, we are going to get into serious trouble again and again.

12.35 pm

Lord Ramsbotham: My Lords, like other noble Lords, I am not surprised that the concentration on the financial situation and its driving position in the production of this review should be at the heart of what so many people are saying in this debate. Like other noble Lords, I am instinctively concerned about what appears to be a reduction in the size of the budget below what is required to do the job. Having been in the services myself, I know that their response, as always, will be to do as much as they can with what they have been given, despite those regrets. Like me, I am sure that those who have had the privilege of visiting those on operations in Iraq and Afghanistan are always humbled by what they see and come back full of admiration, as well as a certain shame that those troops have not been given what they require to do the job.

Like other noble Lords who are in the services, I spent most of my career grappling with what are described in the defence review as the brutal certainties of the Cold War, as opposed to the different and more complex range of threats and myriad sources with which we are now faced. I do not happen to recognise that; the only certainty that we knew was the size of the armed force that had to be in Germany under the Brussels treaty and the length of the inner German border that we were meant to protect. Uncertainty surrounded us at all times. In particular, we knew that today's campaign is going to be fought with yesterday's weapons and tomorrow's campaign is going to be fought with today's. That reality is always with us because of the length of time that it takes to develop military equipment and the length of time that it has to be in service as against the speed of advancing technology.

One always operated in the knowledge that there were two definitions of the word "affordability"-one was, "Can you afford it?", and the other was, "Can you afford to give up what you must in order to afford it?". That is the question that we always felt was unanswered. I feel that very much today; while I welcome, for instance, the addition of cyberwarfare to the threats, I am concerned about the reduction in the numbers of destroyers or frigates, about aircraft carriers without aircrafts and the lack of maritime reconnaissance and about the lack of capability between the Tornado and the Apache in ground support in asymmetrical operations.

I am glad, though, that the Army is to rectify a problem that has been with it since the first Gulf War-namely, the size of operational units, which have proved to be so small that you have to go with masses of attachments from other units when you deployed on operations, meaning that those units in turn have to look around for people when they themselves have to go on operations, which causes intense disruption.

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There are other aspects of the defence review on which I share the concerns of other noble Lords, but I shall concentrate particularly on one aspect. It is hinted at in paragraph 2.D.19, which talks about a sustainability review which the chiefs are meant to be completing by March next year. Like my noble and gallant friend Lord Boyce, I am extremely concerned about the thought of numbers. This takes me back to the Options for Change exercise when the one word that was on our lips all the time was "sustainability"-you must have enough to sustain operations, otherwise we will not be viable. I hope that numbers will be included in that. I say that because in paragraph 2.B.1 there is the statement that,

We must concentrate on them.

That leads me to the Armed Forces covenant, which has been mentioned already. It is a new concept. I do not recognise it from my service, nor, until recently, did my friends in the Navy and Air Force. The phrase "military covenant" had appeared in an Army document. I do not think that everybody appreciates what it means. The defence and security review states that it is,

I say, "Hear, hear", to that, but what does it mean? I welcome the fact that Professor Hew Strachan has been invited to report on this to the Government. I understand that his report is to be published at the end of the month. Will the Government allow time for a proper debate on the military covenant when it is published? Such a debate will allow us to air all these personnel issues, which are so important.

Service men and women come from society and go back to society. The covenant amounts to the extra which society gives them in return for the service and sacrifice that they give. It stems from an ultimate loyalty upwards from people who know that there is going to be loyalty downwards, a loyalty that I regret to say has been stretched recently by the traducing of two senior officers, General Sir Sam Cowan and Air Chief Marshal Sir Malcolm Pledger, on the grounds that were responsible for defence cuts that contributed to the Nimrod crash. That sort of thing must stop, because once the chain of loyalty is broken you undermine the general feeling that the covenant is something that everyone supports.

At the heart of the covenant there is support for servicemen and veterans, and there are various players in it. The key player is government. I have asked on the Floor of this House in the past that there should be a Minister for Veterans not in the Ministry of Defence but at the heart of government in the Cabinet Office. The more I think of the support that veterans and families need, the more it is clear to me that it is absolutely in line with the big society. Therefore, I suggest to the Minister that the Minister for Veterans should be the Minister for Civil Society, so that added responsibility is given to someone who already has a responsibility for dealing with all the ministries that

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have a hand in veteran affairs-the Department of Health, the Department for Work and Pensions and so on.

Concern over pensions has been highlighted in letters today. While I do not propose to touch on that, I think that the allegation that Ministers have left letters unanswered runs counter to another aspect of the military covenant and does nothing for confidence in the system. I beg Ministers to look into this assiduously so that people can trust that their questions will be answered.

Your Lordships would expect me to say this, but I am also extremely concerned about the number of veterans who end up in the criminal justice system. There are many in probation; there are many in prison. That could and should be prevented if all the forces of law and order were ready to look after them and provide the support that they need. I commend Kent Police, which has piloted a scheme for identifying and doing something with them. I commend the Cheshire Probation Service, which has done the same in respect of probation. However, none of this can happen in isolation. It is terribly important that, in addition to government, the Armed Forces charities come together more. At this time, when we are all wearing poppies and the Royal British Legion is on everyone's mind, I ask that organisation in particular to co-operate more with other charities. I am interested to hear that Help for Heroes is about to set up Army recovery centres and support a naval scheme in Plymouth. They are virtually one-stop shops to which veterans can come for mental health treatment, help with jobs and linking with society. That is an example of the sort of structure that society could support in the name of the Armed Forces covenant.

In a previous debate in this Chamber on the probation service, I wished that the clocks around this Chamber did not say, "0:10", which is longer than I should have been speaking, but instead said, "PANT", which stands for "people are not things". If there is anything at the heart of any of this review that I would like to see on the desks of Ministers it is those four letters.

12.45 pm

Viscount Trenchard: My Lords, I am grateful to my noble friend the Minister for securing this debate and privileged to be able to make a contribution to it, given that my own experience and knowledge of military matters are so limited compared with those of the many noble Lords and noble and gallant Lords who are contributing today.

I firmly believe that the maintenance of excellent Armed Forces is one of the reasons why Britain punches above its weight in the world. This is of inestimable value to our international trade and business and a prime reason, together with our strong and respected diplomatic presence around the world, for the continued prosperity of the City of London.

I spent 11 years representing a British firm in Japan. I always felt comfortable in the support that I derived from our embassy and from the perception of Britain and the kind of country it was as informed in part by my Japanese counterparts' understanding of our diplomatic and military capabilities. I am certain

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that this support provides some relative business advantage to British nationals and representatives of British organisations overseas.

More directly, our defence industry comprises a significant part of our diminished manufacturing base. It will be very difficult for us to retain our technological supremacy and market share if our Armed Forces are reduced to the level of those of countries whose overseas interests are on a much more modest scale than ours. It is doubtful that defence exports can entirely make up for cancelled or reduced orders from the MoD. This will undoubtedly threaten our leading defence manufacturers' position in the market, particularly as their American competitors are now aggressively stepping up their overseas sales efforts.

Surely, if the Government really believe, as they claim in the national security strategy, that,

and given that defence expenditure has already been cut by some 60 per cent as a proportion of GDP since the Falklands War, are there not now compelling reasons to freeze defence spending in proportionate terms?

The national security strategy also tells us that we are a country whose political, economic and cultural authority far exceeds our size. Surely it is therefore necessary to maintain Armed Forces commensurate with that authority in order to avoid depletion. Actually, to argue that we meet NATO's target of 2 per cent, which applies to all NATO members, most of which have many fewer international interests, is misleading. If you strip out the costs of the nuclear deterrent and the operational costs of being in Afghanistan, the future spending on core defence capabilities falls to significantly less than 2 per cent.

Worse than that, I ask my noble friend to tell the House whether he has considered the cost of the destruction of the value of military equipment already owned or purchased. The SDSR shows us that unfortunately defence is less important than deficit reduction. Furthermore, the SDSR also considers expenditure in cash flow terms. If you consider Defence plc to be a company whose shareholders are the taxpayers, the management would have looked at the balance sheet as well and taken much more account of the need to protect shareholder value. Management would surely never contemplate scrapping or selling at a discount valuable assets, quite apart from the loss of capability that results.

The SDSR admits that the resources allocated to defence over the next four years will result in the reduction of some capabilities that are less critical to today's requirements. I ask my noble friend by which criteria he judges that the retention of our ISTAR capabilities are in any way less than critical. Indeed, with changing emphasis in homeland defence and overseas commitments, the Nimrod MRA4 was destined to make a significant contribution to the fight against terrorism. The decision to scrap the Nimrod project is completely incomprehensible and wasteful, as £3.8 billion have been spent on the project to date and the fourth aeroplane out of nine is now being painted. The cost of maintaining the force amount to some £200 million a year and even if we could not afford that, will my

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noble friend explain why the Government did not decide to put it into a state of extended readiness similar to the second aircraft carrier where the same logic applies?

The destruction of shareholder value of Defence plc resulting from scrapping the project is serious. The serious impairment of our marine surveillance and reconnaissance capabilities that will result from it significantly increase the operational risks faced by our Trident nuclear submarines, our surface fleet, our new aircraft carrier when it eventually enters service, and indeed our merchant fleet.

As for search and rescue, the Government have claimed that the C-130 Hercules can replace the lost capability. That, unfortunately, is not true. The Hercules may be capable of throwing out a 12-man dinghy, but that is all. Does the Minister agree that it is accepted in the MoD that if we lose Nimrod's capabilities now we will definitely need to recover them in the future and at much higher cost? Does he not agree that it is illogical to ring-fence spending on the nuclear deterrent but to scrap the capability necessary to protect it?

Other decisions that make little sense are the decision to scrap the existing carrier and Harrier early rather than keeping them until the new carriers and the Joint Strike Fighter are ready, and the decision to scrap the Sentinel ground surveillance aircraft after the end of the Afghanistan campaign, although there is at least time to reverse that decision. If it is not essential for us to have these capabilities now, why is it essential for us to replace them?

I congratulate my noble friend on his commitment to reduce waste and improve efficiency and procurement at the MoD. That is very necessary. Finally, I welcome the recognition given in SDSR to the Reserve Forces, which are increasingly integrated with our regular forces and are extremely cost-effective. In particular, the Royal Auxiliary Air Force is already configured around a range of specialist skills, which enables regular squadrons at home and in theatre to fill gaps with experienced reservists possessing the relevant training and skills. I am confident that this model will be endorsed by the forthcoming review of the Reserve Forces.

Time does not allow me to comment on many other points more ably covered by many other noble Lords. While I congratulate my noble friend on having reduced the cuts from the levels initially sought, as the noble and gallant Lord, Lord Boyce, and other noble Lords have said, it has been disingenuously put about that expenditure is being cut by only 7.5 per cent. Real cuts to core capabilities will be much more than this. In short, I join other noble Lords in regretting deeply that the SDSR pays insufficient attention to Britain's strategic interests and that, if implemented as proposed, it will weaken our ability to continue to punch above our weight in the world, which will damage both the security and prosperity of future generations.

12.54 pm

Baroness Dean of Thornton-le-Fylde: My Lords, perhaps I should start by declaring an interest as a former chairman of the Armed Forces Pay Review Body and a current vice-president of the War Widows

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Association. I shall concentrate my remarks on personnel issues in the Armed Forces. I regretted very much that the review, although referring to personnel, did not refer in as much detail as did the 1998 review to the issue of personnel, their careers and training and family matters.

This is the first major debate on defence that I can recall when we are missing Baroness Park of Monmouth, who was a substantial and ongoing supporter of personnel in the Armed Forces. Although we were on different sides of the political divide, we had no differences at all in the commitment and understanding, which she had, of the Armed Forces. I welcome very much the important contribution from the noble Baroness, Lady Ritchie of Brompton.

We reflect today on the report of the loss of another one of our service personnel in Scott Hughes. That family this weekend must be trying to come to terms with the heartbreak of the loss of one of their family as a result of service to the nation. But we should bear in mind that it is not what we say about personnel that matters, but what we do and what the record shows that we have done as politicians, as government and ex-government, in support of personnel. I was considering that when I read the report in June of the Prime Minister's commitment to have a military covenant made a legal document. I welcome that, but I would not welcome it too much until I see what is going to be in it, as it is not what you say but what you do.

The previous Government have taken quite a lot of criticism. It has become almost a mantra to blame them for all our ills today, and only history will put that record straight. As for the military covenant, as we are now calling it, the previous Government did a lot on school admissions and introduced for spouses credits and national insurance so they did not lose out when they went abroad with serving personnel. We also had major changes on pensions. For the first time, we treated widows as members in their own right of the Armed Forces pension scheme. Those kinds of improvements and changes make it clear that you mean what you say.

I welcome the Government's decision to double the operational allowance for service personnel in Afghanistan, but there is much that I do not welcome. The strategic defence review of 1998 substantially covered personnel and carried through. I recall it being introduced at that time by a new Government who were looking at defence strategy and the previous Government having the record for the previous three years of giving Armed Forces personnel a split reward. That did not meet the recommendation of the Armed Forces Pay Review Body, but cut it in two, which had an impact on their pay that year and an ongoing impact on their pensions from the state when they retired. That is not meeting the military covenant.

In this review, paragraph 2.B.3 states:

"We cannot shield the armed forces from the consequences of the economic circumstances".

Why not? They are in a very special position. They are prepared to give up their lives-the ultimate price that any individual or a family can pay. Why does a group of people who are by no measure regarded as highly paid have to face those consequences? For me, the

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question is: do the Government intend or have it in mind, first, to change the remit of the Armed Forces Pay Review Body-a very independent body-and, secondly, possibly to stage the pay award which may be agreed and recommended by that body in a few months' time?

Paragraph 2.B.7 says that there will be,

I welcome the Hew Strachan review and hope that we will be able to have a debate on it, but we know that accommodation and its quality-or lack of it, in many areas-was a thorn in the side of the previous Government, as it certainly is in the side of this Government. What does that imply regarding a change in accommodation? Certainly, that is, again, a poor area for service families. Servicemen and women go off to war, on operations or training, and their families are left living in some pretty awful conditions, much of which has been improved but with much still to be done. The previous Government invested an awful lot of money in improving accommodation.

I shall mention two other areas. Last year, we spent a lot of time in this House discussing the Coroners and Justice Bill. Within that, a number of us across the House-including the Minister on the Front Bench today-supported the changes that we sought regarding the inquests for Armed Forces personnel. The Bill was amended to provide for a chief coroner. It addressed the inquest issues that we had, about inquests taking as long as two years in some cases, and made them much friendlier to users and their families. The Government have now announced that they are abolishing the chief coroner's role under the Public Bodies Bill which they have now brought forward. The British Legion said-I will leave it at this-that it thought that was a betrayal of what was agreed across parties by the previous Government. I want to thank the noble Lords on the Conservative Benches opposite who helped us to get those changes through, so I do not understand why the Government have now gone back on that.

My final point is in regard to the war widows. On the cusp at the end of the previous Government, it was agreed-but we never had time to implement it-that the pre-1975 war widows would not lose their meagre pension when they remarried. In fact, if their second husband died they had to go through a means test to get that pension back. It was agreed that that would finish and that they would not lose their pension. The cost was speculative, but we would be dealing with a very old age group. We were possibly dealing with £80 million over three or four decades-as low as £1 million a year, possibly, or as high as £4 million. Now the Government have said that they are not going to do that. I link that with the point which my noble friend Lord Hutton made in his admirable maiden speech about the change in pensions.

The military covenant has to be one which is enduring, which goes through the good times and the bad without impacting unfairly on our Armed Forces personnel. I close by asking the Minister whether, when we have the Hew Strachan review during the latter part of this month, we can have a debate on that. Can we also have a debate specifically on personnel in the Armed Forces, rather than the situation which we have today? I

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understand and welcome it, but this is about the whole review and with the concentration on the hardware and on a lot of issues which, while touching on the Armed Forces personnel, is not about their overall well-being or how we treat them. I would very much welcome indeed the opportunity to have an in-depth debate on those issues.

1.04 pm

Lord Inge: My Lords, may I, a bit belatedly, welcome the Minister to his job and say how grateful we are for the way in which he keeps us in touch with some of the issues being discussed? However, he will recognise from the tone of this debate all around the Chamber that there are deep concerns about the capabilities of our Armed Forces and about re-equipping them. I hope that he will take back the message that this House, certainly, is not too pleased.

I should like to concentrate on a few key issues. First, I believe that the speed with which the review was conducted meant that it was not really a strategic defence review at all. It was more about agreeing a financial settlement and trying in particular to tie down which capabilities should be kept. The noble and gallant Lord, Lord Boyce, has brought up issues that clearly affect not only the Royal Navy but others as well.

I recognise that our campaign in Afghanistan must have priority. But there are no quick fixes for that campaign, and it makes me very edgy when I hear people predicting dates when drawdown might begin. Progress is being made in Afghanistan, but we have to recognise that we are in for the long haul, and I sense that we may have to reinforce rather than withdraw or cut down our commitment. At the same time, it would clearly be a strategic mistake to suggest timelines for when this withdrawal should take place.

I also appreciate that it is very difficult to carry out a fundamental and strategic defence review against the backdrop of Afghanistan. It is right that the Government are going to protect our main effort in Afghanistan, but doing that while attempting to build a military capability and force structure for the future is not easy. In fact, it is a very real challenge. Predicting likely challenges without retaining a spectrum of capabilities across the spectrum of conflict means that we will not be able to participate in some of the more complex campaigns in the future.

It has never been easy, particularly when you are heavily committed to a testing campaign in Afghanistan, to concentrate on the future. Predicting the strategic challenges 10 to 15 years ahead means that we must look at those capabilities we think we might require in the future, not just concentrating on Afghanistan. We have not been good about predicting the future, so we have to have that range of capabilities. We did not predict the Argentinian invasion of the Falkland Islands; we did not predict the speed of the collapse of the Soviet Union and the reunification of Germany; we did not predict the Iraq invasion of Kuwait, nor did we expect Mr Bush to invade the other way round. I am trying to reinforce the importance of maintaining Armed Forces that have capabilities across the spectrum of conflict. I am talking about all three Armed Forces.

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We have already heard some examples today, such as questions about keeping the Nimrod aircraft. I think it is an extraordinarily bad decision to get rid of Nimrod.

I am asking for the Government to look at those capabilities we require to allow us to take part in operations across the spectrum of conflict, from low intensity at one end right through to high intensity at the other, and then say what capabilities they believe are necessary to meet the operational challenges.

I recognise the urgent need to bring some order to the fundamentally and financially overheated future defence budget which the Government inherited and on which some tough decisions will have to be made. But there will be a high cost in cancelling some of the contracts because of the way in which they have been drawn up. I find it extraordinary that if the carrier is so critical to the future of our defence and our maritime capability, why are Her Majesty's Government prepared to get rid of our present capability and wait 10 years for its air and carrier replacement? Ten years is a long time in this unstable world.

Let me change track and welcome the importance given to NATO. It is fundamentally important to maintain the United States link to Europe. A lot of people talk about this link but do not give it the attention it deserves. We should not be complacent about United States support for Europe. I sense in my visits to the United States a growing feeling that America is getting frustrated with Europe and, in that frustration, is becoming frustrated with NATO. It would be a strategic mistake if we lost American commitment to NATO.

Finally, I conclude with two quite small but important points. I hope that the Prime Minister will reinstitute what I believe was the longstanding tradition of an annual visit, with his staff, to the Ministry of Defence, and spend at least a morning there, ideally a day, so that he hears at first hand what challenges are facing the military. I also hope that we are going to reinstitute the command post exercise, which used to be held every other year, based on the difficult decisions around using the independent nuclear deterrent. That exercise was not only educational but also gave some key politicians and officials instruction on the realities of military power, particularly with respect to the independent deterrent. It was certainly a wonderful way of educating not only No. 10 but FCO officials and others. I believe it was started-but I may be wrong-by the noble Lord, Lord King.

Finally, the subject of people has been touched on by a number of noble Lords today. Our sailors, soldiers and airmen-and, I stress, their families-are our most priceless asset and a wonderful advertisement for the United Kingdom and the nation. The challenges they face, and the demands we place on them and their families, are at the moment very considerable. I advise the Government to handle any changes to things such as allowances and conditions of service with extreme care. Having served in the 1970s when servicemen, particularly in the Army, were leaving in droves, I say that we face a serious manning and morale problem, not least among the brightest corporals and young officers who are the future of any worthwhile Armed

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Forces. The operational pressure on them now is greater than it was then. The danger of people leaving early as the economy picks up needs particular attention. People are our most important asset.

1.12 pm

Lord Marlesford: My Lords, first of all, I apologise in advance to the House if I have to leave before the end of the debate. I have to be in Suffolk to chair a meeting of the Marlesford Parish Council at 7 pm which was fixed many months ago. As parish councils are the grass roots of democracy, I hope noble Lords will understand my priorities and excuse me.

I want to focus on only one point: the role of the Civil Service, particularly the Permanent Secretary in the Ministry of Defence. As we have heard from so many noble Lords, our national defence, and thus the MoD, is facing a crisis of matching resources and commitments.

There are three components to the great department of the MoD. Obviously there is the political leadership under the Secretary of State and his team of Ministers. Perhaps I may say that we are very lucky to have my noble friend Lord Astor, who was not only a regular serving officer but is of course the grandson of the great Field Marshal Haig. More importantly, however, he has devoted himself untiringly to defence matters in your Lordships' House for many years. In these days when so few Members of another place have served in Her Majesty's forces, it is good that one of the other Ministers is my honourable friend Andrew Robathan, a regular officer in the Coldstream Guards, in which I did my national service some decades ago, and of course he was in the SAS.

Then, there is the military component of the MoD, under the service chiefs and the Chief of the Defence Staff himself. However, it is the leadership of the Civil Service at the MoD that I want to discuss. Historically, the MoD has produced some of our most distinguished public servants and has indeed provided part of the elite for the summits of Whitehall. Even I can remember great names like Eddie Playfair and Ned Dunnett.

The Permanent Secretary at the MoD has to guide, manage and inspire a vast department, with its military, scientific and technical, and intelligence components. There is also the procurement function, on which, as we have already heard, the prosperity and success of an important sector of British industry-and, therefore, much of our economy-depends. One function that the Permanent Secretary does not have is that of shop steward for the civil servants in the MoD. Perhaps the most crucial function of the Permanent Secretary is to have at all times a clear strategic vision of Britain's defence capability, especially when Governments change.

What are the necessary qualifications for this demanding role? An obvious prerequisite is an outstanding intellect, of the sort that the Civil Service has, at least historically, succeeded in attracting. I believe that there are five other interdependent attributes for success: respect, trust, authority, integrity and experience. In the list of Permanent Secretaries over the past 30 years, three names stand out: Sir Frank Cooper, Sir Clive Whitmore and Sir Michael Quinlan. I was lucky enough to count two of them as personal friends. When I did

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my stint as a special adviser in the Heath Government, Frank Cooper was my immediate Civil Service boss. He had a distinguished war record as an RAF pilot. When he retired from the MoD in 1983, he was made a privy counsellor. Michael Quinlan, a fellow of All Souls and perhaps the cleverest man of his generation in Whitehall, was responsible for designing Britain's nuclear strategy, which has served us so well. I got to know Michael Quinlan when he was director of the Ditchley Foundation.

More recent years have not been happy ones. We all remember that when the noble Lord, Lord Reid of Cardowan, became Home Secretary in 2006, he famously and rightly denounced the Home Office as "not fit for purpose". As I have previously pointed out in debate, that part of the Home Office that attracted his ire was the Immigration and Nationality Directorate, the director-general of which, until 2005, was Bill Jeffrey, who was then promoted to be Permanent Secretary at the MoD. He retired last month, leaving behind him, it appears, a pretty good mess. His succession was of vital national importance.

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