In her introductory speech, the Minister emphasised that the Bill was about deregulation and removing barriers, particularly in the planning system. The trouble is that most of the barriers to growth are actually financial, not regulatory. I hope that, as the Bill progresses through Committee, we will approve clauses and amendments to it on the basis of established facts and the primacy of localism over centralism.

8.36 pm

Lord Hunt of Chesterton: My Lords, in speaking about this centralising Bill, I suppose that my qualification is that when I was leader of the Labour Party on Cambridge City Council and I was in Moscow in 1972, I was described as a leader of the Cambridge soviet. I have an alternative qualification: I declare that I helped to set up an environmental consulting company in Cambridge. It was interesting to hear about Cambridge earlier from another speaker.

When considering legislation on social, environmental and economic issues, it is reasonable to consider whether it is bringing us closer to or further from countries that are evidently very successful in those fields. The UK has no peer in the fields of humour and creativity, as I saw in the Christmas pantomime “Norwichababa”, and as we saw in yesterday at No. 10; indeed, the UK is now exporting pantomime, so that is one area of economic growth. However, I think that most people will acknowledge that we have something to learn from other European countries. They have rigorous planning, preservation of the countryside through strong local control and sufficient high-quality housing—anyone who has been a city councillor visiting council accommodation in Germany is somewhat humiliated. I would say, though, that over the past 20 years housing standards in Britain and Germany have become closer. The other feature of those countries is that there are small industries all over the country, including in natural areas, and that is also developing in this country. Furthermore, I should add that all those countries with admirable economic and social policies are working within EU rules and regulations.

As many noble Lords have commented, the UK is facing the problems of a lack of housing and a lack of finance for housing. We have also seen that many of the regional projects that began in the previous decade were stopped, to the protests of many industries, when the present Government began to abandon the regional development authorities. The support of this by the Lib Dems, who had many of their own councillors and regional officials involved in those development agencies, was most surprising—I never could understand that.

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The other feature of those countries, particularly Germany, is worker representation on the boards. One of the most important features of the supervisory boards is that the workers have an interest in the preservation of the companies. Those companies have not been bought up and sold like chips on a gambling board, as we have experienced in the UK. We have a long way to go to get that kind of management.

The real problem for developing our economy—as has been made plain over and over again by the CBI and the Institute of Directors—is that there has been a complete lack of decisiveness about major infrastructure projects. We could now be having a third runway at Heathrow; we could be having toll roads. We need many more of these fundamental measures and every day that we do not have them we lose our competitiveness to other countries. When the Prime Minister talks about competitiveness, he just has to listen to what the CBI is saying.

However, the Government have pushed ahead on energy and the further energy developments in the Bill are to be welcomed. The fact that we now have permission to develop a big nuclear power station in Somerset is a very important development.

What else does this Bill propose? First, it proposes a reduction of local planning powers, which many noble Lords from all sides of the House have commented on. I hope the House of Lords will be able to vote on this, as in the other place, and that the decision will be different.

However, some of the most important developments in the UK, as pointed out by a Lib Dem colleague talking about Cambridge, were done through local planning. The development of Cambridge’s high-tech society was an extraordinary case of the local council changing its mind and working with local universities and industry.

Equally, there have been other developments that could not be done by local planning. We have had Acts of Parliament to develop, for example, Felixstowe docks or some of the processes in London. The noble Lord, Lord Rooker, was quite correct to say that there are certain things that local councils do not have a big enough power to do. It really requires a concept that combines localism with a national view. That is what we have been struggling with this afternoon.

One of the aspects that has not perhaps been covered is the localism developed in Denmark, which has pioneered the economic involvement of communities in controversial developments. It completely transformed the way they considered energy developments. There is an element of that in the UK with local participation in housing developments. We have been talking about that much this afternoon. In Denmark, for example, there is local participation in many other projects. In many other areas of the continent there is local investment, which means that there is tremendous commitment to develop local businesses. Again that is somewhat lacking here. We had that with our regional development authorities but, for reasons that I do not understand, they have gone—of course they are supported by the noble Lord, Lord Heseltine, but his views and the Prime Minister’s are not completely consistent.

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In the past, the UK has been a Mecca for planners and Governments from all over the world to see how we have combined industrial growth with the preservation of our natural environment. The way in which national parks manage to have the natural environment, local businesses and local housing is a global model. There are people who are worried about Clause 8 of the Bill. It is very important that we continue that tradition. Some of our major national parks are very close to the centres of great industry. One of the attractions for world-class engineers who go to work at Rolls-Royce is that Derby is very close to the Peak District, which is an untrammelled and marvellous national park. Other countries also have major manufacturing centres close to great parks. Manaus in Brazil, home to its main electronics centre, is close to the forest environment of Amazonia.

I have a nice example of the small industries in our national parks. I once sat next to a lady on a British Airways aeroplane. When we got to the stage of eating cupcakes, as we were flying over her village, she said, “We make them down there”. Those kinds of small-scale industries are very important. The Government and all parties believe that they should be expanded.

A strange feature of the Bill is that, although it has to do with economic growth, housing, infrastructure and the environment, there is no mention of or reference to the economic value of the environment. This is now a standard concept in government; the White Paper refers to it. The Prime Minister now refers to the fact that gross national product is not the primary definition of growth: it has to include the environment. The recent Secretary of State at Defra referred to this natural capital. Since, perhaps, not all noble Lords know about this, a document developed by the NGO Globe, of which I am a vice-president, has been put in the Library. I recommend that noble Lords do a little homework on that, particularly the people in DCLG devising the Bill, or perhaps read the speeches of Ministers in other departments.

The last part of the Bill, in Clause 27, is equally perverse in going against the spirit of many successfully run businesses. The Government seem to be amplifying occasional problems and producing a complex solution with implications that have not been foreseen. Can the Minister say what kinds of complications there are, and give examples of where the approach in Clause 27 has been tried as a pilot? I thought that the Government wanted to reduce red tape, and maybe reduce just slightly the income of lawyers dealing with complications in government. I was obviously wrong. This is a new jamboree for all of them. Furthermore, now it is even a jamboree for the tax lawyers. All I can say, as the director of a small company in Cambridge where the staff have regular maternal and paternal leave—it is an unusual software company, with 70% women—is that current human resources management is complicated enough. This is just another problem and will add costs to small companies where these issues are important. The Minister has been asked many things, but we have not heard what the costs of legal challenges are likely to be as a result of this new legislation.

In summary, the Government are quite right to emphasise the need to invest in infrastructure and housing, and to maintain their commitment to national

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parks and the natural environment. Both are needed to grow the economy and to develop communities. However, the Government’s determination to reduce local involvement through this clumsy legislation has to be resisted. There are so many successful business developments involving local business and local organisations—and, dare one say it, local political parties. However, there are exceptional situations that we all recognise, in which national projects have to be planned on a national basis. Special measures such as parliamentary Acts are possible, but the Bill needs great changes if it is to be supported in this House and in the country. Of course, lawyers and tax advisers will love the Bill as it is. It will give them a field day.

8.48 pm

Lord McKenzie of Luton: My Lords, this has been an extensive and excellent debate, but one which has exposed the gap between the reality of the measures in the Bill and the needs of our country for growth and infrastructure. The Bill lacks coherence, vision and a plan for growth. In the terms of my noble friend Lord Rooker, who put it bluntly, “It won’t work”. My noble friend Lord Smith said that it was a missed opportunity. My noble friend Lord Whitty said that it ignored the need for serious thinking on infrastructure investment. The noble Lord, Lord Greaves, called it, “ad hoc, hotchpotch”, with no structure. The noble Lord, Lord Taylor, said that it was cobbled together to fill the vacuum left by the lack of Lords reform. My noble friend Lady Turner said that there was no comfort in it for the construction industry. The noble Lord, Lord Shipley, at least clung to the view that the title could be seen as a statement of intent.

Much of the Bill is focused on reform of the planning system before the ink is dry on the Localism Act and the NPPF. We had a mini-debate on the NPPF, with a difference of views between the noble Lord, Lord Teverson, and my noble friend Lord Hanworth. That bodes well for Committee. The Bill is predicated on the notion that the planning system, rather than the lack of finance, is holding back growth, a theme that was challenged by a number of noble Lords. That assertion is based at best on anecdote and it lacks a systematic and rigorous basis of assessment that takes account of both cost and benefit. The noble Lord, Lord Tope, asked where the evidence is. Yet again we see the imprint of a Secretary of State who espouses the cause of localism but everywhere removes power from local authorities and takes them to himself.

We welcome some measures, especially those which flow from the Penfold review, and which we expect to be able to support. However, they do not amount to a comprehensive plan for growth, and they will not catapult us into the premier league of competitiveness. We have grave misgivings about Clause 1, which are shared by many noble Lords, including the noble Lord, Lord Tope, the noble Baroness, Lady Eaton, my noble friend Lord Whitty, and the noble Lords, Lord Teverson, Lord Best, Lord Taylor and Lord True. The clause gives unprecedented powers to the Secretary of State to strip any local authority of its planning powers if deemed to be failing so that a developer can seek approval for major applications from the Secretary of

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State. On the basis of the initial criteria, and taking account of planning performance agreements, vanishingly few local authorities may be deemed to be failing, bearing in mind that planning approval rates are at a 10-year high. However, the risk is a tightening of the threshold in subsequent years, although the Government refuse to set out their response to their consultation on this matter until the Bill becomes law. Why is this?

In all of this there is no recognition of the intense financial pressures which government cuts are imposing on local authority planning departments, as on other services; or that designation will weaken local authorities’ ability to improve as they lose fees and struggle to retain more able staff to deal with major applications; that the policy will tilt the balance struck in the NPPF and encourage local authorities to eschew quality and develop their engagement for speed; or that engagement with local communities will be impaired. Frankly, this clause should be deleted.

In Clauses 2 and 3 we see yet further examples of the Secretary of State taking powers to himself. In Committee we will seek to ensure that these are exercised in a transparent manner and in line with proper consultation.

Clause 4 touches on permitted development rights. Our major concern in this regard is not what is in the Bill concerning the extension of rights. Decisions to extend these centrally will lead to unintended consequences in different localities. If the Government really believed in localism they would agree that these matters should be determined locally.

We desperately need more affordable housing and we should acknowledge the important role that Section 106 agreements have played in delivering this ambition. As ever, the noble Lord, Lord Best, spoke with passion on this matter. We consider that Clause 6, which enables developers to seek renegotiation of the affordable housing obligations with a right of appeal to the Planning Inspectorate, is particularly egregious. In the words of my noble friend Lady Whitaker, it is a step back to another world. It is another example of overriding the judgment of local authorities, which already have the power, which they use, to renegotiate such agreements.

We will challenge the linking of project viability just to affordable housing and will argue that any test to be applied should not just be one of economic viability. The development plan policies and different housing needs of an area, including rural areas, must feature in the assessment. However, if this clause is to remain, then it should be considered as a short-term measure with a sunset clause to bring it to an end. My noble friend Lord Adonis has asked the Minister to tell us precisely which stalled sites she considers unviable due to Section 106 affordable housing obligations. I hope that she will do that.

While we support steps to increase access to broadband, including for national parks, this must be done in the right way and not with the sledgehammer approach referred to by the noble Baroness, Lady Parminter. As the Bill stands, there are concerns that Clause 8 would permit a free-for-all in areas of outstanding natural beauty, which is why we will continue to pursue mechanisms which will narrow the focus of this provision. We understand the point made by the noble Baroness,

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Lady Hanham, in her introduction about EU requirements and will look to see how that bears on secondary legislation. We were reminded by the noble Baroness, Lady Brinton, about the importance of broadband, particularly in respect of rural areas, and by the noble Baroness, Lady Valentine, more generally.

Clauses 13, 14 and 15 seek to make it more difficult for a green space to be designated as a town or village green. The intent is to stop vexatious applications to register land which are submitted to thwart proposed development. We would have common cause in not wanting to see the opportunities to designate green space used in this manner but remain unconvinced that it is a major problem. The CPRE cites there being only 185 applications for this status in 2009, which can be compared to many tens of thousands of planning applications.

However, we do not oppose all change to the existing arrangements but will look for assurances on publicity around landlord statements and will seek changes to the heavy-handed approach to removing the right for local inhabitants to apply for registration of land as a green space once it has been marked down for development. This approach goes beyond what Penfold proposed.

A number of provisions in the Bill are focused on clarifying and streamlining the process for infrastructure planning but also on restricting the special parliamentary procedure in part to overcome anomalies. The intervention of my noble friend Lord Faulkner in relation to Clauses 22 and 23 is highly relevant. These clearly are matters that we will have to review in depth in Committee.

My noble friend Lord Berkeley spoke about the need to extend some of the provisions relating to easing the infrastructure process. That also will be something which we will need to examine in Committee, as well as his point about the resources for the Planning Inspectorate, given the multiplicity of different roles provided for it in the Bill.

Clause 24 seeks to bring business and commercial applications into the major infrastructure regime, which was established in the Planning Act 2008. We are not opposed to a broadening of the regime, although the way in which the clause does this would represent a considerable departure from the current system. “Business” and “commercial” need to be adequately defined as they are not so obviously in the public interest or nationally significant. Widening the regime opens up yet further possibilities for bypassing local decision-making and the lack of any national policy statements bypassing parliamentary scrutiny. We will pursue amendments on these matters.

The inclusion of a clause to defer the 2015 rating list revaluation by two years comes as a surprise, particularly as we have only just completed our scrutiny of the Local Government Finance Act where we had extensive discussions about the role and resourcing of the VOA. The deferral breaks a tradition of more than 20 years of regularly uprating business rates that has not been subject to political interference. As my noble friend Lord Smith pointed out, the Government have justified this decision on the grounds of providing certainty for business at a difficult time and that there

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would be many more losers than gainers from the 2015 revaluation. It is accepted that a revaluation would not overall increase or decrease aggregate revenue from business rates but a revaluation is supposed to maintain fairness by ensuring that rateable values reflect up-to-date rental values.

As we have heard, the VOA undertook its high-level, indicative estimates based on limited rental data. Others have called into question the projections made from this analysis and the CBI has declared that it considers the benefits of deferral to be overstated. Before proceeding with a deferral, there should be a full consultation process and the Government should publish comprehensive estimates of how businesses are to be affected. We also would want to take the opportunity to assess the current fitness for purpose of the VOA, its resourcing and how it is handling appeals from previous valuations. The Minister will recall our deliberations on the business rate retention scheme and calls then for rating revaluations to coincide with a general resetting of the system. Will putting back the revaluation affect the current 2020 timetable?

Finally, the nonsense that is Clause 27 has been comprehensively taken apart by my noble friend Lord Adonis, and he was supported by many other noble Lords—my noble friends Lord Monks, Lord Morris, Lady Turner and Lady Donaghy, as well as by the noble Baroness, Lady Brinton, and the noble Lord, Lord Greaves. Seldom have we seen a government proposal that has such little support. The raft of amendments that the Government have already been forced to bring forward underlines the technical complexity of the scheme. If it is anything, it is a job creation programme for lawyers and accountants. In concept, perhaps the Government will explain why it is okay for senior executives to sit on their stock options yet still benefit from handsome payoffs when they leave, but it will be a spur to growth if employees are offered the arrangements to forgo their redundancy entitlement that are proposed in the clause.

The noble Baroness, Lady Wheatcroft, made reference to the range of existing employee shareholding schemes. If such arrangements are out there, why cannot they be used? What is so great about the proposals in the Bill? Concerns have been expressed about the scheme being used for tax avoidance. From debate in Committee in the Commons, it would seem that we will have to await the Budget to understand the extent to which the issue of shares, fully paid, will be free of income tax and capital gains on subsequent disposal. Can the Minister shed further light on this? What is the estimated cost in term of tax forgone as a result of these proposals?

There remains a raft of technical issues to pursue around valuation, TUPE, JSA claimants, compulsion, realisation, share rights and dilution—to name but a few. Our opposition to this clause is not principally about technicalities. Cutting the rights at work of employees is wrong in principle and, in the terms of my noble friend Lord Monks, unethical. It will not help jobs and growth, and that is why it has so little support among employers as well as employee groups. The proposition is divisive and the clause should be scrapped.

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The Bill displays the worst features of a struggling Government. It is contradictory on localism, lacking in evidence base on planning, misguided in undermining employee rights, divisive in reducing affordable housing, and devoid of a strategic context. It will keep us busy in Committee.

9.02 pm

Baroness Hanham: My Lords, perhaps I may start by welcoming the noble Lord, Lord Adonis, to his position on the Front Bench for the Bill. I am delighted to see him there and, having listened to the debate, he will realise that we are in for a lively time—as I do. I also congratulate all noble Lords for having survived. This is the first time in this House that I have sat in this Chamber and been so hot that I did not know what to do with myself. Noble Lords have all done extremely well to survive.

The noble Lords, Lord Adonis and Lord Whitty, and many other noble Lords have portrayed not only the Bill but the Government as being anti-localist. Perhaps I should say immediately in our defence that we have spent a lot of time in this House making sure that this Government are localist. Beyond the Localism Bill, we have been through the NPPF, and we have had great discussions on localism and giving priority to local authorities. I do not therefore think that this Bill undermines that in any way. The Government are committed to localism. They recognise that in some areas there are small problems that need to be dealt with, and that is what we are trying to do in the Bill.

Perhaps we can start with Clause 1, which has attracted a great deal of attention. The clause is to deal only with those very few situations where an effective planning service is not being delivered locally. We published an impact assessment, which, together with the consultation document on planning performance that supports this clause, is clear about the evidence base. I am sure that by the time we reach Committee, all noble Lords will have read those documents.

As I said in my opening remarks, although the great majority of applications—about 88%—are approved in good time, that is not the situation everywhere. The criteria that we have proposed in relation to local authorities that are failing in their duty would mean designating—I emphasise what my noble friend the planning Minister in the other place said—a very small number of authorities that fail to determine more than 30% of their major decisions on time. That is not a standard of performance that we should regard as acceptable. I will not name specific authorities for the simple reason that circumstances can change before any initial designations are made.

On that point I want to reassure the noble Lord, Lord Tope, and other noble Lords that we have been talking to the Local Government Association about the role that the sector can play in helping other authorities to improve and to stop them being designated. We do not particularly want them to be designated; we want to use this as a way of ensuring that standards are maintained. We want the Local Government Association to help authorities regain their powers if they have been designated.

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I was asked by various noble Lords how failing councils will initially be designated. They will be designated initially for 12 months, and that will be reviewed before the year is up. It will be done on criteria that I am sure we shall discuss in Committee. Although applicants can appeal against non-determination, once the statutory period is up, we believe that they should have the choice of accessing a better service from day one, where there is clear evidence that the planning service is not being delivered effectively.

I must underscore that these provisions are not mandatory on every local authority. They give the Secretary of State powers to designate, as I said, this small number of local authorities. This is not a case of swiping at localism; this is saying that there are small areas that we need to deal with. The provisions do not entirely take the powers away from local authorities because they enable the applicant to decide whether they want to leave their application with the designated local authority or whether they wish to go to the Planning Inspectorate. I do not think that the Planning Inspectorate, under these circumstances, will be overwhelmed with extra work.

I am conscious of not having a lot of time. Perhaps I can turn to Clause 5, which deals with information requirements. The noble Lords, Lord True, Lord Taylor of Goss Moor, Lord Teverson and Lord Shipley, all raised points on why that clause is needed as the policy is already set out in the National Planning Policy Framework. The clause is needed because there have been court cases and we need to ensure that applicants can get to appeal, if they need to, when there are disputes about information that cannot be resolved. It is also quite unnecessary for local government to have to seek, particularly with smaller applications, a whole raft of information that does not necessarily appear to be germane to the application. People can always ask for that information as the application proceeds, if they wish, but it is clearly not helpful if there is so much information that it never sees the light of day.

Section 106 renegotiations on affordable housing have received quite a lot of attention. As I made clear in my opening remarks, there are already 1,400 stalled sites with more than 75,000 houses that should be under construction. A number of those homes will be affordable, so it is not that there will be 75,000 affordable homes, but within that figure will be such homes. We know that there are many reasons as to why development is not coming forward, and those reasons will vary from site to site. We accept that there will be financial implications as well, so this is not the entirety of the problem.

At the moment there is no central assessment of the viability of every site. Noble Lords asked whether that would be a general requirement, and perhaps I may come back to the point in Committee. However, we know that Section 106 agreements are a significant cost to developers, and historically 50% of the cost is on affordable housing. Our measure provides for a quick and focused review of the Section 106 agreement without reopening the policy context or merits of the planning consent. It will deliver the development of affordable housing. That is because this particular clause relates to the affordable housing aspect of

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Section 106, and we know that a number of authorities are already carrying out those negotiations. I agree that the assessment of viability will be key to the consideration of appropriate affordable housing requirements. We are going to issue guidance to establish the key considerations for assessing that viability for the purposes of this clause. I do not agree that the Planning Inspectorate is not able to consider matters of viability. Inspectors regularly examine that aspect in planning appeals and local plan considerations.

My noble friend Lord Taylor of Goss Moor asked why we should single out affordable housing rather than use the Homes and Communities Agency to help deliver affordable housing obligations. I have said that we know historically that 50% of the value of obligations is on affordable housing, and councils are already free to renegotiate any aspect of that Section 106 obligation at any time on a voluntary basis. This measure only provides a backstop where local authorities may not be prepared voluntarily to undertake those negotiations. It gives the developer the right to make sure that they take place. Funding historic aspirations on individual sites for affordable housing is not going to be the best way of securing value for money from the Homes and Communities Agency investment, and our aim is to use guarantees to deliver 15,000 new affordable homes.

One of the other areas that was the cause of considerable discussion is that of Clause 8 and broadband. The provisions of this clause will be instrumental in removing the planning red tape that is currently slowing down, and in some places blocking, the rollout of broadband. The question of state aid was raised by the noble Baroness, Lady Whitaker. I accept immediately that state aid has been a delaying factor, but it is not the only one. Planning issues have been the cause of delays as well. As I said originally, the Government’s ambition is for this country to have the best superfast broadband network in Europe by 2015 and it is vital that the rollout of this infrastructure is fast-tracked in order to kick-start economic growth, create jobs and support the country’s long-term economic future. However, it is also absolutely vital to ensure that rural areas have broadband and are thus able to take part in that growth and economic improvement. So we believe that the introduction of short-term planning relaxations is justified and we will ensure that the Government’s ambition for superfast broadband and universal broadband coverage is not prevented by planning objections where we believe that they are causing a blockage.

I understand the concerns regarding protected areas, but it is the communities in some of these areas that are in the most need of the upgraded infrastructure. Certain rural areas are in danger of being left behind and are the most expensive and difficult to reach, where underground cabling is often difficult to put in place. If these remote areas are excluded, a number of households and businesses will be left completely behind. In the words of the noble Baroness, Lady Valentine, broadband is an essential infrastructure. My noble friend Lady Brinton described eloquently the ways in which broadband is essential to the rural economy.

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9.15 pm

The noble Baroness, Lady Parminter, asked about the number of new poles. It is difficult to estimate as operators will first be expected to explore using the existing infrastructure of poles and ducts before putting up any more. We shall be asking how much use operators plan to make of the relaxation of restrictions on new overhead lines in the forthcoming consultation. Decisions on how that is delivered will depend on the outcome of the procurement process. However, I can reassure my noble friend Lord Shipley that the Bill’s provisions insist that communications providers will have to work closely in conjunction with local authorities and local people, and they will have to get their co-operation before undertaking any work.

Town and village greens are all areas that have generated the most enthusiasm. On the reforms to the system for registering land as town or village green, the noble Lord, Lord Adonis, has suggested that the moratorium on green applications when a planning proposal is first published is Kafkaesque—I think that is how he put it—and unfair. On the contrary, we believe that the trigger event marks the start of the consultation, not the end. It enables communities to have their say on whether land should be developed or kept open, for example, because of its recreational value, without that decision being pre-empted before the process can be concluded.

As my noble friend Lady Eaton said in her speech, this puts the decision in the democratically accountable planning system. Also within that planning system are local and neighbourhood plans, and we expect very much that all this aspect of green, open and designated space will be taken up in those plans. Therefore, they will be well and widely known about by the people concerned.

On the one-stop shop, under Clause 21, the noble Lord, Lord Berkeley, asked whether the Planning Inspectorate will provide pre-application advice. I can assure the noble Lord that the planning inspector already provides that advice. I am sure that the noble Lord will appreciate that I cannot comment on detailed individual cases. However, I hope that he will welcome Clause 21, which expands the one-stop shop for major infrastructure and note that we recently consulted on expanding and improving the one-stop shop approach. The noble Lord talked about our special parliamentary procedures. We propose to continue the special parliamentary procedure under the nationally significant project regime in respect of statutory undertakers’ land. We do not believe that this land warrants inclusion as statutory undertakers can make representations as part of the examination process. I am sorry, I think I should have said that we propose removing special parliamentary procedure in respect of statutory undertaker land.

Also on the subject of special parliamentary procedure, the noble Lord, Lord Faulkner, asked about petitions. In future, petitions will be able to be made only about the acquisition of special land. We have responded to the concerns of the Joint Chairman of Committees to address inconsistencies in legislation, and I made that point in my opening remarks as something that has come about as a result of people seeing the way in

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which the legislation operates. We are committed to reforming the special parliamentary procedure so it is triggered only in cases where there is a real need for Parliament to confirm a ministerial decision. There will remain four opportunities—I think the noble Lord asked about that—for the views of all interested parties to be taken.

On Clause 24, a number of noble Lords raised questions on how changes to the nationally significant infrastructure regime will operate. We have recently consulted on these proposals and our considered responses to that. We propose to set out the types of development in secondary legislation, but it will be for the Secretary of State to reach a view on national significance following the receipt of a request to use the regime. Applications accepted into the nationally significant projects regime will be decided within 12 months from the start of examination.

The noble Baronesses, Lady Parminter and Lady Young, raised the issue of hydraulic fracturing, or fracking. I remember the noble Lord, Lord Berkeley, raising fracking ages ago. The Government support industries and endeavours which pursue new energy sources, so long as tapping these proves to be technically and economically viable and can be carried out with full regard to the protection of the environment.

On business rates and Clause 25, the noble Lord, Lord Tope, asked how many ratepayers would have seen reductions in their bills at the 2015 revaluation. I have said that it is not possible at this stage to say precisely how many would have benefited, but the Valuation Office Agency’s high-level analysis suggests that only 300,000 premises would have seen reductions compared to 800,000 that would have seen increases. That would have had an impact.

Finally, I want to touch briefly on Clause 27. I apologise that I am not going to have time to deal fully with that last point. I want to remind the House that this is a new employment status, which employers may wish to use if it suits them. However, it is important that we do not confuse employee shareholders with the employee ownership agenda, which is now being taken forward following the Nuttall review. We have consistently stated that guidance would be provided as to how this new employment status will work and we will update the House as guidance is developed. I note noble Lords’ concerns about the type of shares that will be issued but we have been very clear that it will be up to individual contracts to determine the nature of the shares.

Lord Adonis: I thank the noble Baroness for giving way. These are crucial issues. She says she will update the House as guidance is developed. Will that be before Committee stage?

Baroness Hanham: My Lords, I do not know the answer to that. I will let the noble Lord and the House know as soon as I can get an indication of when that guidance is going to be available, but I would expect that we would be able to discuss it. We want to give employers and people more choice. Clause 27 does that and when we reach Committee stage, we will be able to deal with some of the more detailed points.

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In concluding, I again thank all noble Lords who have taken part in the debate. I believe the measures in this Bill will build on the steps that this Government have already taken to make the planning system simpler and make sure that we encourage economic growth. I hope that we can all agree that freeing up businesses from the swathe of red tape that has engulfed them is a suitable objective for this House in passing legislation. I hope the House will support the Bill. I am sure that it will in the end and I look forward to the discussions in the middle.

Bill read a second time and committed to a Committee of the Whole House.

Armed Forces: Future Size

Question for Short Debate

9.23 pm

Asked By Lord Empey

To ask Her Majesty’s Government, in the light of recent international developments particularly in the Middle East, whether they will review their plans for the future size, configuration and equipping of the Armed Forces.

Lord Empey: My Lords, I welcome the opportunity for the House to discuss defence issues, given the ongoing sacrifice that our soldiers, sailors and Air Force personnel are being asked to make on behalf of this country. Sadly, another example of that sacrifice has been drawn to our attention today.

Leaving aside the question of how or whether we should be fighting in recent theatres of operation, the reality is that we have had large numbers of troops deployed overseas for many years, enduring great hardship and significant losses. Before the Recess, I asked the Minister for details of those who had suffered life-changing injuries as a result of their deployment in Iraq and Afghanistan. For the record, I will repeat the Minister’s Answer:

“My Lords, for reporting purposes serious UK operational casualties are usually categorised as having either serious or very serious wounds and injuries. Between 2003 and 2009, 222 UK casualties in Iraq were included in these categories, while the number for Afghanistan between 2001 and November this year was 591”.—[Official Report, 19/12/12; col. 1543.]

These are sobering figures and do not even include those who may suffer mental health issues in later years as a result of their experiences.

I labour this point because, due to the vast improvements in battlefield medicine, wounded soldiers are surviving injuries that they would not have done in earlier conflicts. It follows that upon returning to the UK with severe injuries, they will require perhaps 60 years of care, and I wonder if the NHS, which will have to bear this burden, is fully prepared and resourced for the challenge.

One keeps hearing examples of the problems returning soldiers and their families have in adapting to civilian life, especially if injuries have occurred while in service. The number of former soldiers who end up in the justice system should alert us to the difficulties they

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face. The long-term welfare of our Armed Forces must remain a top priority and I hope the Minister can give the House an assurance that there will be no skimping when it comes to assisting with both welfare issues and professional services aimed at helping and equipping former soldiers for the world of work.

Upon taking office in May 2010, the coalition Government undertook a review of the Armed Forces, with the emphasis on ensuring, among other matters, that the sums for procurement add up and that, in future, programmes and equipment would be affordable and delivered on time. For a new Government, with an apparent multibillion pound overage in its spending commitments, this was an obvious thing to do. Furthermore, the threats faced by the United Kingdom are always changing and any responsible Government are required to test our military configuration and equipment against the threat levels we face.

Considerable controversy followed the 2010 strategic defence and security review. This is not surprising, but perhaps the most hurtful and humiliating development was the realisation that we currently—and for some years to come—have no seaborne fixed-wing air capability. For an island nation to have such a limited option to project its power from aircraft carriers leaves us effectively out of business in many possible conflict scenarios. It is hard to see how we could defend ourselves without significant help from others.

Only months after the review was published we were plunged into the Libyan conflict. I believe that the Government did the right thing by intervening with our allies to protect the people of that country from almost certain mass murder by the Gaddafi regime, but our inability to fly missions from aircraft carriers added to the cost and the risk to our Armed Forces. Air crews, who did a magnificent job, had to fly long distances to land bases in Italy, which even a few years ago may not have been available to us.

We know that the previous Government commissioned two large aircraft carriers, which are under construction, but more embarrassment was to follow when we learned that there were no aircraft to fly from them. Our choice of a replacement for the Harrier went from one design to another and then back again. It reminds me of sending a football team on to the pitch without the benefit of a goalkeeper.

Given that the UK still has a large military spend compared to many of our competitors it is hard to fathom why we find ourselves in this powerless position. We did not get here simply from 2010 but were clearly going to founder because of decisions taken, or not taken, long before then. As protection of the nation is a top priority for any Government, ending up in this mess represents a fundamental failure of the state to provide adequate protection for its citizens.

Our present political model leaves us open, as a nation, to short-term and bad decision-making. We all recall that the decision to save a paltry sum in the South Atlantic in 1982 cost this country dearly, in both personnel and treasure, by signalling to the Argentine military junta that we were not serious about protecting

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the Falklands. What message are we sending out now when we are incapable of providing adequate seaborne airpower?

Earlier I referred to the situation we found ourselves in during the Arab spring in Libya. This “spring” will soon be two years old, and a major civil war is raging in Syria, with all the usual suspects in the region involved by proxy. Iran will defend Assad to the last, even if the Russians and Chinese see that he is finished. Iran will stop at nothing if it sees its main ally in the region about to fail. The Strait of Hormuz is still under threat. None of us here can tell how things in the Middle East will play out.

Last week, Danish, German and American troops were deployed to Turkey to set up Patriot batteries to protect the Turks against Scuds and other missiles that we know Assad possesses. Lebanon and Jordan are once again being destabilised by the mass movement of refugees, and internal disputes have reignited in both these countries. Will the Minister assure the House that the Government continue to keep the Middle East situation under constant review and will adjust and reconfigure our forces as required to meet the emerging threat posed by the instability in this region?

One of the principal reasons given for the second war in Iraq was the alleged presence of large volumes of weapons of mass destruction, hidden by Saddam Hussein for future use. Despite many searches, little evidence was produced that such weapons existed in Iraq. Since then, however, weapons of mass destruction have been used by terrorists in Iraq. Nerve gas booby-trap bombs have been deployed on a number of occasions and other chemicals have been combined with explosives to maximise casualties, including in al-Qaeda attacks in east Africa. Can the Minister confirm that coalition forces in Iraq and Afghanistan have encountered nerve agents and other chemical weapons which were in the possession of terrorists? Can he assure the House that our own Armed Forces are adequately equipped and trained to deal with attacks involving such agents and chemicals in this country, as well as in other theatres of operation?

One of the biggest defence-related debates, even within the coalition Government, is the future of our independent nuclear deterrent. The current delivery system is moving towards the end of its operational life; in view of our current financial position, people will be asking if there is a less expensive alternative, given that the threats the UK faces are more likely to come from unconventional enemies. Can the Minister set out government policy in this matter and the extent to which decisions have been taken for a replacement for the Trident system?

As a result of the 2010 review, the three services were all subject to personnel reductions. I accept that numbers are not the whole story; nevertheless, there appears to be a pattern developing of more tasks having to be performed against a background of falling numbers. We had two long-term overseas deployments taking place at the same time as Operation Banner was happening here in the UK. Is the Minister satisfied that the Armed Forces are not being overstretched and, as a result, seeing their flexibility severely depleted? Furthermore, given recent and unjustified violence

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from both loyalist and IRA sources in Northern Ireland, will the Minister assure the House that, should it be required by the chief constable of Northern Ireland, military support will be available to him? Sadly, over the weekend, a threat was made by IRA elements to any Irish citizen serving in the British Army. I ask the Minister, therefore, to bear that in mind in his response.

When we debated the Armed Forces Bill in 2011, a number of amendments arose from our deliberations. A commitment was given then that the Secretary of State for Defence would report annually to Parliament on the progress being made throughout the UK in implementing the covenant under certain headings. Can the Minister say when such a Statement is likely to be made so that we will have the opportunity to question him on developments? Following on from that, can the Minister confirm whether Armed Forces advocates have been appointed from all parts of the United Kingdom?

I said at the outset that we owe a massive debt of gratitude to our Armed Forces for the work that we ask them to do. They do not unilaterally go to wage war or defend our interests around the world: we send them. It is therefore our responsibility to ensure that when things go wrong and service personnel are killed or injured, those left behind or needing long-term care are adequately provided for. We continue to hear cases of hardship. During the debate on the Bill in 2011 it was suggested that we should have something like the US Veterans Administration in this country. In response, the Government said that they preferred the current model.

I care little about which model we follow; what matters is that the help is provided. It annoys a lot of people to hear tales of ex-service personnel being refused this or that help from a country that can find endless supplies of money to cater for the needs of Abu Qatada and his ilk. I trust therefore that even in these times of economic difficulty we will continue to pay close attention to the defence needs of this country. If we fail to do so, history teaches us that we always end up paying a high price as a nation.

9.34 pm

Lord Palmer of Childs Hill: My Lords, first, from these Benches I offer condolences to the family of the British soldier shot dead by a rogue member of the Afghan national army. I also thank the noble Lord, Lord Empey, for putting this debate down—it was a pleasant surprise when I read about it in Bangkok.

The title of the debate mentions the potential problems in the Middle East. Of course, that is only one potential area of conflict and there are others. Did we expect a war in the Falklands or in the Balkans? Did we expect conflict in Iraq or Afghanistan? Can we keep out of conflict in Syria, where horrendous killings are taking place, or Israel/Palestine, whose almost intractable problems seem to be getting worse, or Egypt, Lebanon or Tunisia? The list of potential trouble spots is endless, as the noble Lord, Lord Empey, indicated. Where will the next conflict or conflicts be?

With an Army of a mere 82,000 personnel, what will be feasible when any conflict takes place? Could my noble friend the Minister, who does such a great

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job in the Ministry of Defence, indicate how many generals will be left in this Army of 82,000? How does the number of generals in the Army now and when it is so reduced compare to the number of generals in other armies in France or the United States, relative to the number of personnel in those armed forces?

The title of the debate includes the word “configuration”. An important point from my perspective has always been the configuration of procurement in the Ministry of Defence. The questions really are: what equipment do we have, what equipment do we need and do we know what we need? The question that perhaps no one wants to ask is: what do we not know that we need? What Navy and RAF do we have and do we need? I am pleased to see the noble Lord, Lord West, in his place. I will leave all naval and aviation problems to him. The noble Lord, Lord Empey, mentioned two aircraft carriers being built. What planes will be able to fly from those carriers? The noble Lord made the analogy to a football team and said it was like sending a team on without a goalkeeper. I disagree: it is like sending a team on without a team. All you would have is the football stadium or the aircraft carriers and nothing to fly from them at the moment.

Then the questions are: what vehicles do we have and how do we use them in the conflicts that take place? We have armoured vehicles and we send them to an area that is sandy so we paint them a sandy colour. Then, if we have a conflict in an Arctic region we take the same vehicles and paint them white. But they are not necessarily—in fact they certainly are not—the proper equipment for our forces. The armed personnel will lose lives because of the inadequacy of that equipment. Would my noble friend accept that defence reviews and procurement move far more slowly than the fast-changing events around the world, particularly in the Middle East and north Africa? How can the Government ensure that the United Kingdom is able to react in a timely way to these defence and security challenges? Then of course there is the financial aspect and the unexpected need for finance. When conflicts take place, will finance be available from some pot somewhere to pay for it? Will the equipment needed be available at short notice?

Could the Minister say what assessment has been made of new types of warfare such as the Iron Dome defence infrastructure protecting civilians in Israel, which has meant that the rockets sent against Israel do not land in any areas of population? They are in fact developing a system that is Iron Dome-plus and Iron Dome-plus-plus to deal with medium and long-range missiles. That is something that I hope would be in our national security strategy.

The Government’s second annual report on the national security strategy and defence review last November highlighted increased instability in the Middle East as one of the major developments since the national security strategy in 2010. How will the Government update the national security strategy to reflect this change? Is the idea of just having a review and then, after a given period, another review and another review the way to go about it? Surely we should be thinking of the review as ongoing and seamless; one should be reviewing it all the time and not just at given times.

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Does the Minister accept that the developments in the Middle East and north Africa since the publication of the national security strategy have seen major changes in our defence and security picture that were not anticipated when the strategy was first presented. What action will the Government take as a result?

The Times today talks about extensive Army redundancies and the effect of the ability to control the future shape of the Army. The great worry is that the redundancies will include people with needed trades and that they will leave gaps in the performance of certain functions. I wonder how that will be coped with.

Perhaps the Minister will relate that to the use of the Reserve Forces. A lot is mentioned in the reviews as to the building up of the Reserve Forces, but I have my doubts as to whether people with the relevant skills will always be available, and whether they will be able to take the time off from their main employment to go and serve their country. There is a quote in the Timesthat perhaps doing defence on the cheap is leaving key roles empty. It really is a problem of whether the Army with 82,000 people is going to be fit for purpose.

As the noble Lord, Lord Empey, said, we owe a considerable and continued debt to our Armed Forces. We are lucky to have the Minister here who I know does an incredible job in the Ministry of Defence. Nothing that I am saying is meant to be critical of that. A lot of these problems are inherent in what has been happening not just during the present Administration but during previous Administrations. There is great scope for looking in a fresh light at what conflicts are likely to happen, what stocks of equipment we have, what we will need, what we could need and whether there are new items of defence and attack available in the world that we should be looking at to bring our forces completely up to date.

9.43 pm

Lord West of Spithead: My Lords, I thank the noble Lord, Lord Empey, for raising this debate. It is very pertinent. I apologise for not having put my name on the list of speakers. I was more focused on my Christmas festivities than on knowing what the business of the House was, but I felt it was very important to speak.

I will speak very briefly on the aircraft carriers—otherwise people might think that I am a one-trick pony on that. The Government have begun to get their mind around that and understand the importance of them. They are something that we should be really proud of, rather in the sense that we were proud of the Olympic work, employing some 20,000 people across the UK, building these amazing ships. The Government have made it quite clear—certainly the Secretary of State did in a conference I was at—that they intend running both of them. Yes, there have been a lot of problems. Yes, there have been issues about what aircraft they will have; we now know what aircraft they will have. I am glad that the Government are getting to grips with that.

However, I believe that our nation is standing into danger. Since I joined the Royal Navy 48 years ago, our military has suffered a steady attrition in size and resources. That has happened year on year in all my

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48 years in the Navy. The 2010 strategic defence and security review is, I believe, the straw that has almost broken the camel’s back, but a further £1.3 billion has been taken from the defence budget.

Our military is not now capable of what the people of our nation expect of it. If Ministers think that it is, I fear that they are deluded. The international developments in the Middle East—the Arab spring was referred to as the basis of this debate—are just one example of what a chaotic, unpredictable and dangerous world we are in. At the time of the 2010 SDSR, a number of us—some of whom are in the Chamber tonight—pointed out that the cost-driven exercise took no account of strategic shock. The events in Libya and Syria have proved the point. The noble Lord, Lord Palmer, asked: where will the next one be? We have no idea what the next crisis might be. That is why we need capable Armed Forces. As an aside, Libya was a minor operation, but we could not have done it without the United States. I would strongly advise that we do not get involved militarily in Syria.

I come back to defence spending, because that is what I want to focus on. It is complacent and, I believe, shows a lack of understanding, to parrot the fact that our defence spending is the fourth highest in the world, as if that answers criticism that it is too small. First, figures can be very misleading, as many nations, as I know from my time as chief of defence intelligence, hide what we see as defence spending in lots of other areas, so it is sometimes difficult to know what they are actually spending.

Even if we are in the top six, so we should be. We are the fifth or sixth richest country in the world; we are a permanent member of the Security Council. Unlike many nations, we have a responsibility for 14 dependencies world wide. The Government recently reiterated our responsibility for defence of those dependencies. We run global shipping from London, the sinews that hold the global trading village together and are a huge earner for this nation. We are the largest European investor in South Asia, South-East Asia, Australasia and key parts of the Pacific Rim. Global stability is crucial to our investments and our nation’s wealth and security.

I share in the congratulations to the Minister, because he has been very good about briefing us in this House on defence issues, but he will, because he must as a Minister, no doubt talk about balancing the defence budget. Yes, the MoD equipment programme was overheated—there is no doubt about that—but talking about a balanced budget is sophistry. Future Force 2020, the headmark for the SDSR—

Baroness Garden of Frognal: I apologise for interrupting, but the noble Lord will be aware that speakers in the gap have a limit of four minutes.

Lord West of Spithead: I am aware of that.

Future Force 2020, the headmark for the SDSR, required a 1% increase in defence spending year on year from 2015-16. The Treasury has allowed only a 1% increase in the procurement budget. Therefore, the programme is underfunded; and therefore it is not balanced. The cuts so far have led to an underspend of

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£1.3 million, and they are being taken from money that has been voted by Parliament for defence. If, as David Cameron has argued, defence is the highest priority, we must increase defence spending, even if it means cutting other departments’ budgets. Certainly, involvement in any more foreign adventures without that commitment could be catastrophic. I repeat: our nation is standing into danger unless we increase defence spending as a matter of urgency.

9.48 pm

Lord Rosser: My Lords, it is late. Perhaps because of that, the interest shown in this debate in terms of the number of speakers is limited. Nevertheless, the issue raised is one of real interest and importance. I thank the noble Lord, Lord Empey, for giving us the opportunity to have this debate.

Relationships between countries and continents, strengths of countries and continents and their levels of influence change over time. For example, it will not be long before the size of the Chinese economy will exceed that of the United States. China’s military capability is also expanding fast and, with it, the confidence in wielding influence and greater political dominance that that brings. The United States, for its part, has made clear that it will be devoting more of its attention and resources, not least military ones, to the Far East and China, which will become its new strategic priority, and fewer to Europe. The United States ambassador to NATO has recently been quoted as saying that the NATO allies need to find the money to spend on military equipment to maintain the organisation’s strength. The US itself accounts for 75% of NATO’s budget and spends 4% of its GDP on defence. The ambassador asserted that the campaign in Libya had exposed what he described as “worrisome trends” in Europe’s ability to act without US help, that some European stockpiles had run out and had to be replenished by the United States, and that there were a,

“number of other critical capabilities that the US provided in spades”.

The future direction for the Middle East, in which we have considerable interests, is far from clear. Significant change, which was not predicted, has taken place in Egypt, Tunisia and Libya. We have seen the rise of the Muslim Brotherhood as an international phenomenon and the Gulf States, including Qatar and Saudi Arabia, becoming more active players in events. The Sunni/Shia sectarian animosity in the Middle East continues to be a telling factor. Syria is in a state of turmoil and that is having repercussions in the Lebanon and Jordan. It remains to be seen in which direction Syria goes once President Assad has left the scene, and in particular the impact that this has on the Iranian Government and stability in the region, since the Iranians back the current Syrian regime.

Presidential elections are due in Iran in June and the current president will have to step down after two consecutive terms in office. Iran continues to face pressure over its nuclear intentions and its economy is in trouble. Israel also has elections later this month, though a significant change in government direction does not appear to be likely. The peace process between Israel and Palestine appears at present to be going

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nowhere, and there continues to be speculation on whether the Israeli military will strike against Iranian nuclear facilities.

On top of this the growing strength of al-Qaeda in parts of Africa, the rise of new powers in Asia Pacific, weak states outnumbering stable states by two to one, and new threats in cyberspace, which have been the reality in the Middle East in recent months, are all matters to be taken into account in assessing future developments and priorities. Even though we may not have predicted at least some significant events that have taken place, forecasting what is going to happen in the future is likely to become more, not less, difficult. Today, energy security, climate change, demographic shifts, and the spread of chemical, biological, radiological and nuclear materials are threats, alongside state-on-state warfare, or contorted religiously inspired terrorism.

The global economic downturn that we face means that we and the majority of our allies are making spending cuts, with unavoidable consequences for capability and global reach. In the UK the situation has not been helped by the fact that decisions taken by the Government have not yet stimulated domestic growth and austerity is set to be extended. Budgetary restraint is unavoidable, however undesirable. If we are to realise our intentions and ambitions for our forces they will have to be affordable, and the profile of the defence budget will be an expression of our priorities.

Carrier strike and improved ISTAR are vital. Strategic warning capabilities and intelligence will be crucial in providing early indicators of threats and potential crises. Two state-of-the-art fighter fleets, advanced unmanned vehicles supporting all three services and strategic air lift are also key components. That our Armed Forces personnel will continue to be our most important asset and skills must also be a strategic capability. We need highly trained service personnel able to use higher technology platforms and exploiting to the full the opportunities new technology presents, reservists using niche civilian skills in military contexts, not least in the field of cyberspace and cyber security, and a high-skilled, broad-based defence industry. Remote surveillance, manoeuvrability in cyberspace, better communications and acting at distance with accuracy are all necessary features for our future forces.

Alongside this must also be a greater focus on international alliance-building. Shared threats and financial challenges demand that we pool resources and expertise. The UK/France accord may lay the ground for multiple discrete bilateral or regional arrangements between nations. NATO, though, is the primary military grouping through which action will be taken, and Europe’s focus should be on greater deployability and burden-sharing within the alliance.

It is vital that European nations work together towards meeting military objectives. European NATO nations are making deep cuts to defence budgets in isolation of each other and the consequence could be cross-alliance shortfalls or duplication, which would certainly not be the best use of available resources overall.

We also need to consider the opinion of the British people when considering our defence posture in protecting and furthering British interests and ideas. The public are wary of interventionism, following recent conflicts

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and the financial crisis. We have to make the case for strong, proactive defence postures, with our goal being prevention before intervention, and early intervention before conflict.

Diplomacy can be more effective than the painful cure of military action, albeit that a key function of our Armed Forces is to deter and be a credible threat to those who wish us and our allies harm. Whether in tackling climate change, investing in civil society and governance or diplomatic engagement, the spectrum of soft-power capabilities at the UK’s disposal to defend our interests and promote our ideas in the world should be capitalised on.

Defence is becoming more intricate and complex while the world is becoming more interdependent, and we need a policy response as broad as the threats that we face. We must aim to have flexible forces with whole-spectrum capabilities, able to respond rapidly whether through preventive measures, reactive disaster relief or multilateral interventions, and we must ensure that our intentions and ambitions for our forces are affordable and can be financed, with the needs of the front line being matched to those of the bottom line.

9.56 pm

The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever): My Lords, I, too, am grateful to the noble Lord, Lord Empey, for introducing this timely debate. It is clear that on all sides of the House we share respect for the determination, professionalism and bravery of our Armed Forces.

The noble Lord is correct that the welfare needs of our service personnel are, and will remain, a key priority—a duty that we extend to our veterans as well. The Armed Forces have long-standing structures in place to support service families, including welfare officers, trained social workers and other specialists. Under the Armed Forces covenant, the Government have made good progress on improving the care that we provide—for example, by doubling council tax relief to £600 per six-month deployment and ensuring that Armed Forces compensation scheme payments are excluded from means-tested social benefits.

There is much that we are doing with regard to veterans. The Armed Forces mental health strategy enables the co-ordination of policy, and focuses efforts and resources where they are most needed. We have also ensured that veterans will be given priority treatment on the NHS for all service-related conditions.

We work hard to ensure that our service personnel transition smoothly back to civilian employment. All personnel are entitled to assistance through this process. The single services, in partnership with Right Management, work with service leaders to deliver a range of practical assistance, including training and assistance with recruitment. My noble friend Lord Ashcroft, the Prime Minister’s special representative for veterans’ transition, will be reviewing current processes, and we look forward to his recommendations.

The noble Lord, Lord Empey, made reference to the annual report on the Armed Forces covenant, which was notified to Parliament last month by means of a Written Ministerial Statement. I warmly welcome

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the interest in this House in the Armed Forces covenant, and would welcome the chance to debate it should the opportunity arise.

The noble Lord also asked whether Armed Forces advocates had been appointed from all parts of the United Kingdom. I can confirm that there are now Armed Forces advocates in the devolved authorities of Wales and Scotland. Both Wales and Scotland have produced their own commitment papers on how they will implement the covenant, as well as contributing to the Secretary of State’s statutory report. An Armed Forces advocate has not been appointed by the Northern Ireland Executive, as their strict equalities legislation means that implementation of the covenant is more complicated.

Additionally, many local authorities in England, Wales and Scotland have appointed local Armed Forces advocates or champions as part of their commitment to the community covenant, working with local communities to improve access to services and support for serving and ex-service men and women and their families. Relevant UK government departments also have Armed Forces advocates, all of whom are represented on the Covenant Reference Group and are responsible for making sure that their departmental policies uphold the principles of the covenant.

As the noble Lord explained, we live in an uncertain world. As such, we need to ensure we have the capabilities to adapt and address a very broad range of challenges. The NSS and the SDSR made a number of strategic choices: to support the deficit reduction programme; to seek to maintain the UK’s international profile; and to honour our operational commitments in Afghanistan. They remain at the heart of this Government’s approach to foreign, defence and national resilience policies. The NSS also acknowledged the uncertainty of the future strategic environment, and the SDSR responded by prioritising those capabilities across government that will allow us to adapt to changes as they happen.

The noble Lords, Lord Empey and Lord West, and my noble friend Lord Palmer all mentioned carrier strike. We will have planes. We will have the B variant of the Joint Strike Fighter—the STOVL variant—which, as the noble Lord, Lord West, knows flew very successfully off the USS “Wasp” in November 2011.

In the SDSR the Government confirmed our belief that it is correct for the United Kingdom to retain, in the long-term, a carrier-strike capability. In the short term, however, there are few circumstances we can envisage where the ability to deploy air power from the sea will be essential. That is why we reluctantly took the decision to retire the Harriers and Invincible-class carriers before the new carriers become operational. We did not take this decision lightly, but did so mindful of the current strategic context in which we live. The decision on the second carrier will be one for the next SDSR after the general election.

The Middle East remains a significant source of instability. One immediate risk, as noble Lords said—

Lord West of Spithead: Just on a point of clarity, the Secretary of State said that it was an aspiration of this Government that they would run two carriers although the final decision had not been made. Is that the correct decision?

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Lord Astor of Hever: My Lords, I am not sure what the Secretary of State said but I can confirm that this is definitely a decision for the SDSR. It is my personal aspiration that we have a second carrier operating.

As the noble Lord said, an immediate risk is the collapse of the Syrian regime. We will continue to support our allies in the region and would like to see a diplomatic solution but we cannot afford to remove options from the table at this stage. Our current posture in the region supports UK interest in international efforts by securing globally important economical arteries, including the Strait of Hormuz, ensuring the well-being of regional partners and contributing to regional security.

The UK currently has one frigate, one destroyer, four mine hunters and two Royal Fleet Auxiliary support vessels deployed to the Gulf conducting maritime security operations. I can assure the House that the Government continue to keep the Middle East under constant review. We will adapt as required to meet any emerging threats wherever they may arise.

While responding—and being prepared to respond—in the Middle East, we have continued to make significant progress in Afghanistan. We have built the capability of the Afghan national security forces so that they can prevent Afghan territory from ever again being used as a safe haven by international terrorist groups such as al-Qaeda. We have helped to underpin a more stable Government and have overseen elections. We have demonstrated the Armed Forces’ ability to act elsewhere, such as in the seas off Somalia, where we are working alongside navies from around the world to control the spread of piracy.

The noble Lord, Lord Empey, asked about nerve agents and chemical weapons. Happily, I can confirm that insurgents in Afghanistan have not used nerve agents or other chemical weapons against coalition forces. There have been a few cases in Iraq where improvised devices containing industrial chemicals and small quantities of chemical agent were detonated, but these did not result in any coalition fatalities. I can also assure the House that our Armed Forces are adequately equipped and trained to operate in an environment where these threats exist, both overseas and in the UK.

The noble Lord asked me to outline the Government’s policy on the replacement of the Trident system. It remains as set out in the SDSR. We will maintain a continuous submarine-based deterrent and will begin the work of replacing the existing submarines. Work on the assessment phase of the replacement submarine programme has been under way since May 2011. The final decision as to whether to proceed with the Main Gate investment decision for the replacement programme will take place in 2016, after the next election.

I can reassure my noble friend that the Armed Forces are not subject to overstretch. As we recover and recuperate from Afghanistan, our flexibility will be greatly enhanced. The SDSR set out plans to transform defence so that we emerge with a more coherent capability in the future, under what is known as Future Force 2020. This required tough decisions to scale back the overall size of the Armed Forces and

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reduce some capabilities less critical to today’s requirements. The SDSR gave us the full structure of Future Force 2020 which, by the next decade, will enable us to deliver our adaptable strategic posture. It is based on our assessment of the forces required to meet our standing commitments, while conducting three overlapping operations: a simple, non-enduring intervention; a complex non-enduring intervention; and an enduring stabilisation operation.

The top defence priority remains success in Afghanistan. As we move towards Future Force 2020, the ability of our Armed Forces to respond to additional contingent tasking is kept under constant review by the Ministry of Defence. It is from this realistic capacity that additional commitments are delivered.

In response to the question of the noble Lord, Lord Empey, relating to the violence in Northern Ireland, first, I am sure that the House will join me in condemning the violent demonstrations that we have witnessed recently. We should recognise the outstanding efforts of the PSNI and the bravery demonstrated by police officers in maintaining law and order. I call on all political parties in Northern Ireland to engage in dialogue to resolve disputes peacefully. The violence witnessed does not represent the true face of Northern Ireland’s business and community sectors and wider society. Although military operations in Northern Ireland ceased in 2007, our Armed Forces continue to play an important role supporting the Police Service of Northern Ireland. I assure the noble Lord that this will continue.

My noble friend Lord Palmer asked how many generals we will have in an Army of 82,000 and in France. I cannot today give my noble friend a specific answer on the number of generals, but I assure him that, proportionally, there will be a greater decrease in major generals and above compared to brigadier and below.

My noble friend also asked about Iron Dome. The UK currently has no plans to develop or acquire national ballistic missile defence capability. However, each SDSR provides an opportunity to review this position against projected threats. Iron Dome is not a ballistic missile defence system, but is designed to provide relatively short-range protection against rockets and artillery shells. Its role is comparable to the maritime close-in weapons systems deployed by the UK in Operation Telic to protect UK forces in Basra.

I will respond to my noble friend on the issue of generals and the other questions that he asked.

Trusts (Capital and Income) Bill [HL]

Returned from the Commons

The Bill was returned from the Commons agreed to.

Statute Law (Repeals) Bill [HL]

Returned from the Commons

The Bill was returned from the Commons agreed to.

House adjourned at 10.09 pm.