DEFENCE REVIEW

HC Deb 22 February 1966 vol 725 cc239-54

The Secretary of State for Defence (Mr. Denis Healey)

With permission, I will make a statement about the defence review.

The House will recall that, on taking office 16 months ago, Her Majesty's Government set themselves to halt the runaway growth in Britain's defence expenditure by planning to limit the size of the defence budget in 1969–70 to that of 1964–65—or £2,000 million at constant prices.

As we stated in last year's defence White Paper, we assumed responsibility for forces which were seriously over-stretched and in certain respects dangerously under-equipped. It has been an equally important objective of the defence review to bring our commitments into balance with the manpower and equipment we could afford to have. We have already done better than the financial target of £2,000 million in the estimates for 1966–67, since they represent only £1,972 million at 1964 prices.

Part I of the White Paper indicates how we plan not only to stay within the same financial ceiling in three years' time, but also to undertake a major programme of re-equipment, and to reduce the over-stretch from which our forces still suffer. In order to ensure the achievement of these objectives we have had to make a new assessment of the part which our Armed Forces should play in supporting our foreign policy in the 1970s, and of what rôle Britain should play in world affairs. It has been essentially an exercise in political and military realism.

The results may be summarised as follows. Broadly speaking, in cutting the previous Government's planned expenditure by 16 per cent., or £400 million, we have achieved three-quarters of our saving by getting better value for money and only one-quarter by reductions in our military capability. In order to reduce overstretch we plan to cut our tasks overseas and then to keep a larger proportion of our forces in a home station and fewer abroad, and to rely more on reinforcement by air in an emergency. This has meant certain changes in our current political commitments overseas.

We plan to reduce substantially the deployment of our forces in the Mediterranean; from 1968 we shall give up the Aden base and confine our presence in the Middle East to the Persian Gulf; in the Far East we shall cut the level of our forces once confrontation is over; and, within a few years, we shall maintain no forces permanently deployed in the Caribbean or Southern Africa. We shall be able to keep our forces in Germany at the present size only if the foreign exchange costs are met. We have made it clear that, in future, Britain will not accept commitments overseas which might require her to undertake major operations of war without the co-operation of allies; nor shall we attempt to maintain defence facilities in any independent country against its wishes.

Against this background we have taken certain major decisions on the equipment of our forces. The Canberra strike/reconnaissance aircraft must be replaced by 1970. The Anglo/French variable geometry aircraft, which is the core of our long-term operational and industrial aircraft programmes, will not be available until the mid-1970s. We have decided that the only way of bridging the gap is to buy the smallest possible number of F111As from the United States, and to supplement these aircraft with the V-bombers which will be released from their current strategic role when the Polaris submarine force is fully operational. The foreign exchange cost of the F111A purchase will be met by sales of British equipment to the United States and to third countries.

We shall keep our existing carrier force as long as possible into the 1970s, but we shall not order a new carrier. In the light of the military tasks we envisage, and of the operational return we can expect from its cost of £1,400 million over the next 10 years, we do not believe that we should be justified in keeping a carrier force indefinitely. A new carrier could not become operational until 1973, when the rest of our carriers would be in the last phase of their active life. But by the mid-1970s we should be able to re-provide the necessary elements of the carriers' capability more cheaply by other means.

I believe that the majority of the House recognises that it has become essential to stop the automatic rise in British defence expenditure. As a result of their defence review, Her Majesty's Government have found a way of doing so without defaulting on Britain's commitments to her allies and partners in the Commonwealth, and without abandoning her influence either inside or outside Europe. Those who believe we have failed to bring our commitments and resources into proper balance must have the courage to say whether, in their view, the Government should spend more on defence, and where they will get the money, or cut Britain's commitments further, and, if so, where.

Mr. Powell

Is the right hon. Gentleman, who, less than a week ago, was saying that he did not expect any resignations on the Navy side because of a defence White Paper, aware that it is neither practicable nor appropriate to reply point by point at this stage to his long and tendentious statement? Is he aware that not only this side of the House, but the whole of the country, will study carefully and anxiously the outcome and the implications of the Government's 15-month long review; but is it not already evident that the nature of some of the decisions and the timing of others has been forced upon the Government by their own absurd preoccupation with fudging a figure of £2,000 million in 1969–70 regardless of the consequences for the morale of the Services or the defence of the country?

Mr. Healey

I am surprised that the right hon. Gentleman should have made the last point, since he himself resigned from the previous Government because they did not fix a limit for defence expenditure.

On the question of resignations, on which the right hon. Gentleman is, indeed, an expert, I would like to say this. Nobody could have fought harder than my hon. Friend the Member for Woolwich, East (Mr. Mayhew) to see that the Royal Navy got more equipment to use east of Suez, even though this meant that the defence budget should rise above the ceiling of £2,000 million; and I regret that my hon. Friend should have found it necessary to resign because the Chiefs of Staff, I myself, and the Government were unable to accept his advice.

I think that many of us in the House recognise integrity when we see it and that my hon. Friend has shown great courage in taking the step he has. Those who, like me, applaud his courage would like to know how the right hon. Member for Wolverhampton, South-West (Mr. Powell) can remain a member of the Front Bench of a party shortly to stand at an election when his disagrees with its defence policy, its foreign policy, its social policy, and its economic policy.

Mr. Maxwell-Hyslop

On a point of order. Is it in order for the Secretary of State to report to the House what the Chiefs of Staff were or were not prepared to agree to—in other words, technical advice—when hon. Members are not allowed to table Questions asking what advice is or is not given to a Minister by the Chiefs of Staff?

Mr. Speaker

I have heard nothing out of order yet.

Mr. Healey

Mr. Speaker, if I may make a comment on that. I am following a precedent set by the right hon. Member for Monmouth (Mr. Thorneycroft). It is a precedent which I have never regarded as a fortunate one and which I do not intend to follow on another occasion. But I felt it essential for the good of the future of the Navy to make it clear to the Navy that the Admiralty Board did not assent to the decision which the Government have taken on this issue; and if I were obliged, as I think I was, to make the Board's position clear, I think that I was similarly under an obligation to make clear the views of the other members of the Chiefs of Staff Committee.

Mr. Heath

Is the Secretary of State for Defence aware that he has made a statement which has the most momentous implications for the future for the defence of this country and for Britain's place in the world as a whole? It is regrettable that the right hon. Gentleman should have reduced such a statement in his answers to supplementary questions to the level of personal attacks, since he has made the statement not only against the background of the resignation of a Minister, but of the constitutional crisis of the resignation of the First Sea Lord.

Is the Secretary of State aware that the whole House, and, indeed, the country, will want to take part in the national debate which the Prime Minister referred to yesterday? Is he aware that when he speaks of the runaway nature of expenditure on defence there was, in fact, no increase in the proportion of the gross national product spent on defence in the last six years? Is he aware that what he is doing is reducing the amount of the gross national product spent on defence, which gives great pleasure to his right hon. and hon. Friends, but does not consider the defence of this country or its position in the world?

Is the right hon. Gentleman aware that, as a result of this, he has made the political and foreign affairs handling of the problem of Aden, the Arabian Federation and the Middle East almost impossible, and that, in fact, he was not accurate in saying in his statement that he is carrying out all his commitments, because, by what he is doing, he is breaking the agreement which was made for the South Arabian Federation on its independence?

Further, is he aware that we do not believe that this is the moment to make a final decision on the carrier force in the middle of the 1970s, which is what the right hon. Gentleman is now doing?

Is the right hon. Gentleman aware also that in his statement—[HON. MEMBERS: "Speech."] The Secretary of State for Defence made a long statement. The right hon. Gentleman said that the purchase of the F111s, would be paid for by British sales, but does not he realise that this is not what the White Paper says? It says that they will be bought on credit and that British manufacturers will be allowed to tender for sales, which is quite different and puts the responsibility for paying for the F111 on a future Government.

Finally, will the right hon. Gentleman take it that we shall judge the whole of this White Paper on the question whether it will ensure the future defence of this country and the Commonwealth and its position in the world?

Mr. Healey

I think that the country will be reassured by some of the elements in the right hon. Gentleman's questions, if that is what they were. No one will welcome more than we on this side a national debate on this issue. The Government have made clear their position both on the level of defence expenditure and Britain's rôle in the world. I hope that the Opposition will make their position equally clear and that those who disagree with the position that the Opposition then take will have the integrity to resign their positions as official spokesmen, as has been the case with one member of our Government.

On the question of the South Arabian Federation, the agreements which were made with the South Arabian States some years ago are not appropriate to an independent State of South Arabia, which, we hope, will come into existence as a result of constitutional decisions to be taken in the next two or three years, and those agreements will all lapse when the new independent State comes into being. There is no question here of "ratting" on our commitments. A country which wishes to become independent cannot assert the conditions for its independence as being exactly the same in the defence field as the conditions which it enjoyed when it was a dependent territory.

As regards the future of the carrier force, I am well aware that the party opposite never wished to take a decision on this matter ever. This is the reason why no new carrier has been laid down in the last 20 years and why it is impossible for the Royal Navy to have a carrier—as would have made sense—in 1968 or 1969. I should welcome an opportunity to debate this in detail in the House with right hon. and hon. Members opposite and to justify the decision which the Government have taken not to build CVA01 and thereby to save £650 million on the plans of the previous Administration.

As regards sales of equipment to the United States and collaborative sales to third countries, we have set ceiling totals for sales which together will cover the total cost of the F111A. British manufacturers alone in the world will be able to tender for sales of British equipment to the United States, equipment which has been jointly identified by the two Governments, free from the 50 per cent. differential which now applies under the temporary balance of payments regulations of the United States and free, also, from the 12 per cent. and 6 per cent. differentials imposed by the Buy American Act.

If he has any interest in the interests of British exporters, the right hon. Gentleman should have had the grace to welcome these concessions which I have obtained from the American Government as presenting a great challenge and a great opportunity to British industry.

Mr. Grimond

Is the right hon. Gentleman aware that the crux of the matter is whether or not our rôle in the world has been altered and reduced, and that paragraph 19 of the White Paper, which deals with our rôle in the Far East, does not make at all clear that it has been reduced? The provisos appear to be mere common sense and, presumably, are in operation now.

Further, in his statement the right hon. Gentleman spoke of reducing our forces in the Far East once the confrontation is over. What confrontation is this? What change in policy does the Secretary of State envisage, and when does he think that this will come about?

Mr. Healey

I do not quite know what the right hon. Gentleman's view is about "ratting" on commitments to one's allies when they are under attack, but the view on this side is that we have an obligation to Malaysia and Singapore which we intend to fulfil so long as Indonesia persists in its policy of confrontation. But we hope to negotiate an end to this confrontation at the earliest possible moment. I believe that recent events in Indonesia may have advanced the time when such a negotiated end to the confrontation will become possible.

I hope that the same view is taken by the right hon. Gentleman the Leader of the Opposition, who expressed himself in very robust terms on this issue when he was recently in Singapore. I know that this view is not shared by the defence spokesman of the Opposition, since he said that one could only explain the deployment—[HON. MEMBERS: "Oh."] Yes, listen to this—he said that one could explain the deployment of British troops in Malaysia at the present time only by ascribing it to a state of national hallucination.

Mr. Shinwell

Is my right hon. Friend aware that, in 12 years of Tory rule, this country spent more than £20,000 million on defence and that, in spite of the country being saddled with eight successive Tory Ministers of Defence, we have never had a fundamental review of our defence position until now? Will my right hon. Friend say whether, in spite of having spent £20,000 million on defence during 12 years of Tory rule, any carrier programme was ever formulated or carried out? Will he tell me at the same time—[Interruption.] Many questions have been asked from the other side. I am entitled to ask one or two.

Will my right hon. Friend, at the same time, tell the House, with reference to the proposed retention of our forces in Europe on the understanding that our foreign exchange costs are met, whether a time limit is to be imposed for the payment of those foreign exchange costs, or, otherwise, is it intended that we should withdraw some of our forces from Europe?

Finally—[HON. MEMBERS: "Too long."]—is my right hon. Friend aware that we on this side will welcome what the Prime Minister has described as a national debate on defence, on all aspects of defence? Will he consult the Leader of the House to ensure that, when such a defence debate takes place in the House, we shall have ample time—not merely one day or two days, but at least three days—in order to expose the deficiencies of the other side?

Mr. Speaker

Order. I have been asked to preserve the cut and thrust of debate. The cuts should be short cuts. The thrusts should be short thrusts.

Sir K. Pickthorn

On a point of order, Mr. Speaker. Am I wrong—[HON. MEMBERS: "Yes."]—in remembering that this is not a debate, that these are supplementary questions and answers, and that it is extremely difficult to see how those who ask and answer them in the manner we have listened to over the past half hour can be remembering that very important fact?

Mr. Speaker

I am grateful for the support which the right hon. Gentleman has given me in what I attempted to convey to the House a little more delicately.

Mr. Healey

In answer to my right hon. Friend the Member for Easington (Mr. Shinwell), I can tell the House that the party opposite laid down no new carrier in its 13 years of office and that our existing carrier force was first laid down in the early years of the last world war.

It is my wish that we shall have the greatest possible opportunity for a prolonged debate on these issues. I am only sorry that right hon. and hon. Members opposite have not found it possible to ask any relevant questions so far this afternoon.

Sir Alec Douglas-Home

I think that I heard the right hon. Gentleman say that the strategic bombers would be released for other tasks when the nuclear submarines were completed. Must not this mean that the A.N.F. is, therefore, dead? Must not this mean that the Government have no longer the intention of revising the Nassau Agreement, but are to keep the nuclear submarines for our strategic purposes? If so, may I profoundly congratulate the Government on coming to a conclusion that we put forward at the last General Election?

Mr. Healey

I am sorry to disappoint the right hon. Gentleman, but he has got it wrong again. What we propose to do, as we made clear a year ago, is to build four Polaris submarines. We have offered, and maintain our offer, to assign them to an Atlantic nuclear force irrevocably for the duration of the alliance? [An HON. MEMBER: "What for?"] The hon. Gentleman has asked that question many times and has had it answered as often. Whether or not our allies wish to pursue the idea of a collective nuclear force still remains to be seen.

Mr. Sheldon

While congratulating my right hon. Friend on his ability to keep defence expenditure within the limits in which he was constrained, may I ask whether he does not realise that there is considerable disappointment at our continuing rôle east of Suez well into the 1970s? He mentioned that British arms manufacturers will be allowed to tender for sales to the United States. What assurance has he obtained that sales will actually be made?

Mr. Healey

I know that some of my hon. Friends and many hon. Members opposite, including some on the Front Bench, are disappointed that Britain intends to maintain some military capability outside Europe. I shall welcome a debate on this matter and expect it to range widely inside both parties as well as between them.

In reply to my hon. Friend's second question, I point out that, as a start towards meeting this target, the American Government will this week be inviting tenders for the supply of naval auxiliaries for the United States Navy to the value of 50 million dollars and that those dollars will all be paid, if the tenders are successful, before we start paying dollars for the F.111A.

There are also a number of other items of equipment which have been identified and for which tenders will shortly be invited and bid for by British industry without discrimination.

Sir Richard Glyn

Is it not true that the reduction in the number of our overseas bases is by no means the same thing as a reduction in our present political commitments overseas? On pages 2 and 3 of the White Paper, the right hon. Gentleman says that political commitments overseas must be reduced. Will he say which commitments the Government are to give up?

Secondly, what tactical nuclear weapons will be available to B.O.A.R. in the next few years? Will these be able to be used without express permission from the Americans?

Mr. Healey

The British forces in Germany have never had any tactical nuclear weapons which have not been subject to the control of the United States Government. That was the situation throughout the period of office of the last Government.

Sir Richard Glyn indicated dissent.

Mr. Healey

The hon. Gentleman can shake his head, but I notice that several right hon. Gentlemen who were previously Ministers of Defence nodded agreement with me.

The hon. Gentleman will find a statement on the reduction of commitments in the second part of Part I of the White Paper.

Sir Richard Glyn

On a point of order, Mr. Speaker. I beg to give notice that I shall seek to raise this matter on the Adjournment.

Mr. Speaker

That notice has nothing to do with these questions.

Mr. Bellenger

Paragraph 24 says that it is in the Far East and Southern Asia that the greatest danger to peace may lie in the next decade. Can my right hon. Friend say something more about the Singapore base? Does he envisage in the foreseeable future the closing down of the base and in the meantime altering the rôle and the equipment of the base, which was mainly built for warships?

Mr. Healey

I have made it clear to all the allied Governments concerned that we would wish our forces to stay on in Malaysia and Singapore so long as the independent Governments of those countries wish them to do so on conditions which meet our military requirements.

In case the time develops in the future, perhaps when confrontation is ended, when the Governments of those countries no longer wish our forces to stay, or wish to fix conditions which we consider unacceptable, I have already begun discussions with the Australian Government about the possible provision of alternative facilities in Australia. But I make it clear that, in such a case, the size and nature of the forces we maintained would be considerably different from those we plan to maintain even after confrontation in Malaysia and Singapore.

Sir Ian Orr-Ewing

Apart from a few hundred miles around air bases, does not the right hon. Gentleman's decision on aircraft carriers mean that our surface forces in the mid-1970s will be left without any surface-to-surface weapons except those with horizon range? Is not he taking a considerable risk in the uncertain world of the Far East and the uncertain pressures which are developing?

Is it not honourable for the hon. Member for Woolwich, East (Mr. Mayhew) and for the First Sea Lord, in view of these facts, to resign—and much more honourable that they should do this than when the Prime Minister resigned over the question of National Health Service charges?

Mr. Healey

We plan to phase the carriers out by the mid-1970s and to provide the Navy with surface-to-surface weapons which are not now in the programme. After a careful study of the theatres in which our forces may be required to operate under threat, we are satisfied that it will be possible to provide protection for our Fleet and shipping in the 1970s from land bases with aircraft that we shall then have. I shall be glad to develop that in detail in the debate.

Mr. S. O. Davies

As the purchase of foreign aircraft will have a damaging effect on employment in the aircraft industry, what immediate steps are the Government taking to provide employment for those displaced?

Mr. Healey

I have made it clear in the White Paper that the military aircraft programme which we plan for the next 10 years will provide adequate production of military aircraft for our aircraft industry on which to build a viable civil aircraft production programme as well.

Mr. Sandys

The Secretary of State said that the existing agreement for the protection of the South Arabian peninsula would no longer be applicable on the independence of the South Arabian Federation. In 1964, when representatives of the Government of the Federation asked for independence not later than 1968, they coupled this with a request that Britain should conclude a new defence agreement for the protection of the Federation after independence.

Is the right hon. Gentleman aware that, as Colonial Secretary, I, on behalf of Britain, agreed to that request? Can he now give an assurance that this promise that we would conclude a defence agreement for the protection of the South Arabian Federation after independence will be honoured?

Mr. Healey

A large number of promises were made by the right hon. Gentleman when he was Commonwealth and Colonial Secretary with a Government of South Arabia which has now disappeared. There is a completely different Government there now. Of course, it is open to those with whom we negotiate to state the terms on which they would like to reach an agreement, but it is also the duty of the British Government to decide what the British interests are in the agreement that is finally reached.

Mr. Maxwell

Is my right hon. Friend aware that not only did the former Administration fail to build carriers, but had no hesitation during the whole period of its office about cooking the defence books of the nation, not just in respect of carriers? Can he say whether his discussions with the Australian Government about the base in Western Australia have reached the stage of planning, having regard to the fact that confrontation against Malaysia could end at short notice and that Singapore could invite us to leave the base? As it would take such a long time to build a base, has he started negotiating about it already?

Mr. Healey

Negotiations in the strict sense of the word have not yet begun, but, for the first time, when I was present in Canberra a fortnight ago the Australian Government agreed to discuss with technical experts on the British side the possibilities of providing facilities for British forces in the 1970s. I made it clear in public, as well as in private, that if we were unfortunately required to leave Singapore and Malaysia earlier than many people now expect, if there was nowhere else for us to go, we should have to go home.

Rear-Admiral Morgan Giles

Would the right hon. Gentleman answer a question about the aircraft carrier? In Part II of the White Paper the aircraft carrier is defined as the most important item in the Fleet for offensive and defensive action. In Part I it is said that the changes to achieve a major cut in expenditure have been made without any loss of military efficiency. How can those two statements possibly be reconciled?

Mr. Healey

If the hon. and gallant Gentleman will read the note which prefaces Part I, he will see that Part II refers to the situation next year, while Part I refers to the situation 10 years hence. It is true that at the moment the carrier is the element round which the whole of the Fleet is built and to reshape the Fleet so that it can play its necessary rôle in the security of the nation without carriers is a long-term job. This is why I am most anxious that the existing carrier force should continue to operate for as long as possible into the 1970s so that we can assure ourselves that we have made adequate reprovision for those elements of the carrier capability which will still be required within the reduced tasks which we then envisage.

Mr. Frank Allaun

Is my right hon. Friend aware that, unlike hon. and right hon. Gentlemen opposite, most of us on this side of the House would like to see far more drastic cuts than are proposed in the White Paper? Is he aware that the £52 million increase on last year is an increase on the highest total ever spent? Would it not be better to carry out his own wishes, which were to cut commitments—for he said that he could not otherwise cut the £400 million—and spend the money on better housing and social progress instead?

Mr. Healey

I hope that my hon. Friend will recognise that the increase to which he refers is more than accounted for by the increase in the pay of the Armed Services, and I believe that our soldiers, sailors and airmen fully deserve the rate for the job.

Sir A. V. Harvey

How does the right hon. Gentleman expect the carriers in the immediate years ahead to be manned with air crew? Why should naval officers volunteer for a branch of the Service which they know is to die in a few years?

Secondly, will he bear in mind that what he said about the United States ordering British equipment is not reassuring? Why does he not get the Americans to place orders at the same time as he orders the F111? From past experience, there should be direct trading and not just tendering.

Mr. Healey

I do not want to minimise the problems which will arise in maintaining the morale and efficiency of the Fleet Air Arm for another 10 years. This is one of the most important questions which we have to consider. One of the reasons why the First Sea Lord thought it wise to retire now rather than in August was so that his successor should start from scratch now—[HON. MEMBERS: "Oh."]—to help the Navy to face the new situation which it would have had to face at some time or other.

Let me point out that many countries are now running down carriers and have no intention of building others. This is true, for example, of Australia, Holland and Canada. This is a problem which has been solved in many countries and which can be solved here. What I would say to members of the Fleet Air Arm is that the strongest case for them to maintain their current rôle as long as possible is if they believe, with the Admiralty Board, that it is necessary to spend some years in reproviding for the carriers' capability before the carriers are finally phased out.

In reply to the hon. Gentleman's second question, I wish that we had some items of British equipment which were as attractive to the United States and other foreign Governments as the F111A has been to us. It is a question of taking time to discover items of equipment which can be in terms of performance and price. All too often in the past British weapons have been designed with no attention whatever to the requirements of a possible market abroad.

Mr. Steele

On a point of order. Can you advise me, Mr. Speaker, whether it is a new departure that we should have a long statement and so many questions and answers about a White Paper which is to be debated the following week?

Mr. Speaker

I am grateful to the hon. Gentleman. This is a difficult decision. I regarded the statement as important and the reaction of the House and the number of hon. and right hon. Gentlemen who sought to put supplementary questions were evidence of the importance with which the House regarded it. However, I ought to call the attention of both sides of the House to the length of the questions and the answers which has precluded me from calling many hon. Members who have felt that they had a right to question the right hon. Gentleman on the White Paper.

Captain Litchfield

On a point of order. Can I have your advice, Mr. Speaker? Is it proper for the right hon. Gentleman to seek to put words into the mouth of the First Sea Lord which he himself has not uttered?

Mr. Speaker

That is a criticism which the hon. and gallant Gentleman makes of the right hon. Gentleman. The Chair cannot enter into it.

Sir G. Nicholson

On a point of order. With great respect, Mr. Speaker, may I suggest that the House is very anxious to hear the hon. Member for Woolwich, East (Mr. Mayhew)? Can we not get on with that?

Mr. Speaker

I think that the House will not be unaware that I, too, have that in mind.

Sir G. de Freitas

May I ask my right hon. Friend to say something more about the Anglo-French variable geometry aircraft? In view of the enormous potential importance of this aircraft, will he try to press on with this programme, even if General de Gaulle dismantles N.A.T.O., as he threatens?

Mr. Healey

I can certainly reassure my hon. Friend. I have already arranged to meet M. Messmer, the French Minister of Defence, to further the programme of this and the Jaguar aircraft and certain other collaborative projects. We plan to meet, on a date still to be fixed between the middle of March and the middle of April, to discuss these matters.