DEFENCE PROCUREMENT AND RESEARCH

HC Deb 27 May 1971 vol 818 cc645-710

6.45 p.m.

The Minister of State for Defence Procurement (Mr. Ian Gilmour)

I beg to move, That this House takes note of the Second Report of the Select Committee on Science and Technology, Sesion 1968–69, on Defence Research (House of Commons Paper No. 213), and of the White Paper, Government organisation for Defence Procurement and Civil Aerospace (Command Paper No. 4641). The Report of the Select Committee is, of course, much the senior of the two documents. It was published more than two years ago, but although the previous Government published a White Paper replying to the Report, the Report was never debated in this House. The House will welcome the fact that it is at last being debated today.

The Report, as everybody who has read it will agree, was a very painstaking and valuable contribution to the study of an immensely complex subject. I have no doubt that it received the most careful consideration by the previous Administration, as it did by this one. Since the Report was published, much has happened, including in particular the publication of the Rayner Report and the decisions that the Government have taken on it. As the House will be aware, Mr. Rayner has acknowledged the help he received from the Select Committee's Report.

I do not propose to rehearse in detail the contents of the Rayner Report, but I hope it will be in accordance with the wishes of the House if I draw attention to some of the main features of the Rayner proposals, at the same time commenting on the relationship between these and the recommendations of the Select Committee, a relationship which, as the members of the Select Committee will know, is often very close. Then, at the end of the debate, if I have the leave of the House and am successful in catching your eye, Mr. Speaker, I would hope to comment as best I can on some of the points raised by hon. Members.

Before I embark on this task, however, I am sure the House would wish me to congratulate Mr. Rayner and his team on the production of such a lucid and thorough analysis of the problems of defence procurement. The Government have been happy to accept the recommendations of the Report and are extremely pleased that Mr. Rayner has agreed to serve as the chief executive in the organisation which will be set up as a consequence of his Report.

The main problem which successive Governments have had to face in procurement has been, as the Rayner Report puts it, the mismatch between Service requirements and the resources available to meet them—in other words, how to achieve the optimum allocation of resources to defence procurement. This is a problem which involves both the formulation of equipment policy and its execution. The Rayner Report is more concerned with the latter. It will still be for the policy staffs in the Ministry of Defence to lay down the qualitative and quantitative requirements for defence equipment; it will be for the Procurement Executive to carry them out. What the Rayner Report proposes is an organisation to bring the problems of procurement more into focus by drawing a sharper distinction between the formulation of policy and the management of programmes, and by introducing a more efficient management structure.

I shall have something to say later about the relationship of the Procurement Executive with the rest of the Ministry of Defence and about the Select Committee's observations on the formulation of research and development policy. For the moment, I want to concentrate on the organisational aspects of the Procurement Executive.

Since the end of the war, there have been a number of attempts to reconcile the Services' wish to handle their own procurement and the advantages of concentrating procurement activity. With the Ministry of Supply, the balance lay towards concentration in a separate organisation. More recently, the balance has shifted towards the Army, as well as the Navy, assuming responsibility for at least part of their procurement. But aircraft, guided weapons and most electronics have remained with a separate department and the Air Force has continued to obtain its equipment from such a source. This separation between user and procurement authority has inevitably led to some loss of contact between the two.

For this reason, and also because the defence equipment area is very sensitive to political considerations, the Rayner Report comes down firmly against the idea of setting up a special agency. It has been decided therefore to place the staff concerned within the Ministry of Defence. Within that Department the choice lies between splitting them between the Service Departments and concentrating them in one organisation. Because of the specialist nature of procurement—and the Rayner Report brings this out very clearly—we have chosen the latter course and we intend to create within the Ministry, and as an integral part of the Ministry, a Procurement Executive.

We shall be at pains to ensure that the closest links will be established between the Executive and the Armed Services as users. The exact form of relationship between them is still under consideration. There may have to be some changes in the machinery for coordination but we expect no difficulty in ensuring that the Executive's activities remain consistent with the overall policy of the Ministry. Two examples will be enough to show the sort of measure we have in mind. As Minister of State for Defence Procurement I shall, under the Secretary of State, be responsible for overseeing not only the staffs in the procurement area but the staffs responsible within the Ministry of Defence for the fomulation of operational requirements.

Secondly, the main systems controllers responsible for naval land and air weapons will have very close links with the Service Departments through being members of the appropriate Service Boards and the Controller of Guided Weapons and Electronics will be available also to attend Service Boards as necessary.

The Select Committee naturally devoted a considerable section of its Report to the fundamental importance of getting right long-term defence and R. and D. policy. There can be no quarrel with the objective, but its achievement is one that has always been most difficult to attain: much time and effort have been expended on trying to improve the Government's methods of tackling this issue. The Select Committee, recognising the difficulties, recommended the concept of an open and conscious process of R. and D. policy formation in which the various constraints would be set against alternative forms of weapons systems, force structures and strategy, and against alternative defence and foreign policy objectives. This postulated the formulation of a long-term defence model, the operation of which would enable comparison between the various alternatives and a choice to be made of the ideal policy.

The Government entirely agree that the defence R. & D. programme can achieve optimum allocation of resources only if it is based on a clearly understood and well-defined defence policy. The purpose of defence planning is to decide what we are up against, what threats we are seeking to meet, to establish correct priorities and to make the best use of the available resources in the light of competing claims. But the operation of a defence model on the lines proposed would create formidable problems. Here I lean towards the view expressed by the former administration in their White Paper on the Select Committee's Report, when they said in paragraph 7: Unfortunately the merits of such a project seem likely to be diminished by practical considerations. There is little prospect that the myriad possible options which would present themselves could be resolved within an acceptable period of time even if it were possible to recruit the additional staff which would be required to justify their cost. I think that this is another occasion where we shall have to abandon the pursuit of the ideal and reconcile ourselves to the attainable. And this means that it is necessary to approach these questions in a rather less precise and formal way, while achieving, in our view, an equally effective solution.

Different levels of policy require their own procedures. At Ministerial level, adequate machinery exists for co-ordinating and presenting the views of Departments on issues which cross Departmental boundaries. In the defence area, there is, of course, the closest co-ordination with the Foreign and Commonwealth Office and Treasury. Within the Ministry of Defence the Secretary of State is advised not only by the Chiefs of Staff on military matters, but by administrative, scientific and military staff dealing with politico-military operations, systems studies, programming and budget issues and manpower as well as with equipment procurement and logistics.

Mr. Tam Dalyell (West Lothian)

Could the hon. Gentleman clarify this point? I understand that under the new procedure the Treasury will not be represented, as it was, at the initial stages. If I am not correct in this, can the hon. Gentleman put my doubts at rest, because it is obviously important in the area of weapons development that the Treasury should be brought in at the earliest stage?

Mr. Gilmour

As I hinted or suggested earlier, the exact machinery for co-ordination has not yet been fully worked out. What committee structure would be needed has not yet been finalised. We are aware of the point that the hon. Gentleman made and have it very much in mind. It is wrong to say that the Treasury will definitely not be there. The odds are that it will be in at the very early stage.

The object of this comprehensive advice is to set the policy framework within which particular activities, procurement among them, can be pursued. At each succeeding level as policy evolves, options can be identified, examined and narrowed down.

So far as defence equipment options are concerned, I have no doubt that the new Procurement Executive, with its highly-skilled expertise and specialised approach, will enable more realistic choices to be made. However, in any review of the purposes and procedures of defence procurement, one must, as I have said, encounter the problem of how best to match the need for new and advanced equipment with the resources available to us which, understandably, are never quite adequate for the purpose. The Select Committee devoted a considerable part of its report to this very problem, and to the ways in which improved decision-making could help to end the wasteful business involved in cancelling projects to meet relatively short-term financial pressures.

It suggested the increased use of operational analysis to select the optimum deployment of research, development and production resources for the best equipment as well as for determining overall defence policies. The Government of the day, in their White Paper on the report, acknowledged the considerable importance of operational analysis in helping to solve these problems, but observed that it was a tool rather than an end in itself. That is a proposition which I entirely accept. We regard the contribution that operational analysis can make as extremely important. We are doing our best to strengthen the excellent team which has been assembled at the Operational Analysis Establishment at West Byfleet. I do not believe that we can make the operational analysis staff responsible for the ultimate decision-taking: they have their important rôle to play, but it is not plumb in the centre of the stage, to the virtual exclusion of all other actors in the play.

The Rayner team has pointed to a somewhat different method of keeping to a minimum the number of projects which are either still-born or cut off at an early age. It believes that there should be a much greater selectivity of objectives to make the most effective use of available resources, and that there should be a greater concentration of research effort and exploratory development. It recognises that costs cannot be forecast with reasonable accuracy until a relatively substantial part of the development has been undertaken, and therefore suggests that something of the order of 15 per cent. of forecast development expenditure on a particular project has to be spent before a confident decision can be taken to go to full development. It recommends that exceptions to this rule should be taken only "consciously and deliberately". I believe that on this subject the Rayner Report echoes the Select Committee's interest in and advocacy of the basic development of sub-systems and units for timely incorporation into major systems.

As the House knows, we are about to embark on a review of the organisation of the research and development establishments, and in the course of this review, we shall, of course, be taking fully into account the need to concentrate our research effort and exploratory development more selectively.

The Select Committee expressed considerable concern that collaboration with other countries in the development of a project had its disadvantages. It felt that it might lead to increased costs and certainly a release of national know-how and experience. The last Administration pointed out that with major projects the choice is not always just between collaboration and a single national project, but more often between collaboration and a number of competing projects, each sponsored by a different country. A joint project in the latter case is clearly more economical for all unless the extra costs of collaboration outweigh the benefits of sharing. The development of the Jaguar aircraft with the French may be quoted as an excellent example of economical cost-sharing. The M.R.C.A. offers equally favourable prospects.

The brutal fact is that the costs of developing advanced types of aircraft like these are now so heavy that we can rarely contemplate embarking on a development programme of our own. None the less, here again the Select Committee shares some common ground with the Rayner team. The latter has recognised that, for a variety of reasons, international collaborative projects can lead to long delays with resultant increases in costs, and with the loss overseas of industrial know-how to our ultimate disadvantage, particularly in export markets. We shall be more conscious than ever in considering collaborative projects in the future of the reservations shared by the Select Committee and the Rayner team.

Three years ago, when the Select Committee was collecting the evidence on which its report is based, the practice of appointing departmental project managers had only recently been adopted, and was already showing signs of success. The Committee commended it, but pointed to the necessity of giving one man the maximum permissible responsibility for each project even though this posed difficult problems of financial powers and relationships with the permanent hierarchy.

Mr. Rayner's team has accepted this view. The organisation of the Procurement Executive, with systems controllers responsible for their own Votes and thus autonomous in their particular procurement areas, will be based on project-orientated groups which in turn spring from a series of projects each with its own manager. The project manager will dispose of his own specialists—for example, those concerned with contracts, finance, quality assurance and so on—and the project team will retain its responsibility throughout the entire life of a piece of equipment.

Mr. Dalyell

It has been put to me that there is a potentially difficult relationship between the finance assistant deputy secretary and his colleagues. It is a matter of consequence to people in industry to know precisely what is the relationship.

Mr. Gilmour

I do not quite follow the hon. Gentleman's point.

Mr. Dalyell

The difficulty has been put to me by industry that they would like to be clear about the relationship between the finance secretary, who seems to be in a relatively junior post, and his colleagues. I am asking about the seniority of the financial control.

Mr. Gilmour

I take the hon. Gentleman's point. The Permanent Secretary will be the accounting officer for the non-systems controllers and the Deputy Secretary will come under him. So the Deputy Secretary (Finance) is not on a level with the other systems controllers. Finance will be an important matter, but it will be based on project management rather than on lateral control. This conception of organisation is an important one as the hon. Gentleman who is a member of the Committee will know.

The principles on which the future organisation is to be founded are set out in paragraph 37 of the Government's White Paper, and I would expect them to command the support of the authors of the Select Committee report. The emphasis on line management, the simplification of procedures, the reduction of committee work, are all objectives which the Select Committee either explicitly or implicitly has blessed, and I hope that the creation of the Executive would be regarded as wholly consistent with the Select Committee's views.

I am sure that we are all grateful to Mr. Rayner and his team for the work that they did and to the members of the Select Committee for the interesting and far-seeing report that they produced.

7.7 p.m.

Dr. David Owen (Plymouth, Sutton)

The Rayner Report contains a quotation which bears repetition. It comes from Petronius in the year A.D. 66: … we tend to meet any new situation by reorganising, and a wonderful method it can be for creating the illusion of progress while producing confusion. inefficiency and demoralisation. These words have a moral for all of us. The one thing on which we are all agreed on both sides of the House is that defence procurement and defence research and development have been subjected in the last decade to intensive reorganisation, intensive change, and there is a wish to see from now on a period of stability.

In framing our attitude to the subject under discussion, and in particular to the Rayner Report, we cannot commit ourselves to any specific form of organisation which, when we return to government, we shall implement, but it would be our intention to work with this framework. If there had not been major deficiencies thrown up by the existing organisation, it would be our intention to work within it and to try to give the whole important area of Government research and development a period of organisational stability.

I will try to develop our general attitude to this subject. The House knows that the subject under discussion is of considerable importance, not just because of the decisions which have to be made and which have a crucial effect on the overall effectiveness of our fighting forces, but because it involves large sums of money. We are here discussing on defence R. and D. a budget of £264 million, which represents about one-tenth of the defence budget and over 25 per cent. of all the R. and D. undertaken in Britain at any one time. We are talking about 28,700 individuals who are employed in this organisation, 5,000 of whom are experimental and scientific officers. So this is an important section of the nation's scientific research effort. We are talking about 24 separate major establishments engaged on defence work, plus about four other establishments whose work is strongly allied to defence.

The Opposition in looking at these proposals welcome the fact that the Rayner Report is an extremely lucid document. Everybody will join in welcoming the presentation of this complex problem. We have already said in this House on the Order and in another place that we have reservations, particularly in regard to the subordination of the civilian side of aerospace to the defence side. Everybody realises that there are difficult choices and demarcations to be made in this area. On the edges of demarcation there are bound to be difficulties in collaboration. However, I believe that on balance these proposals are right.

When we were in Government we were moving towards the belief that this was the sort of development that would happen. In evidence to the Headquarters Organisation Committee I myself as Minister, and some of my hon. Friends, felt that this was the sort of way we would have to go. However, we are aware of the danger that a Procurement Executive could be an insulator between military and civil research development. We are also well aware, as I am sure is the Minister of State for Defence Procurement, of the grave danger of secrecy being used as a blanket to stop vital research effort and its results being extended into civil industry. This is one of the real dangers of the Ministry of Defence taking over these departments. There must be in the Ministry of Defence a much more relaxed attitude to security, not in the sense of the top security since we all realise that this is a matter of major importance, but in the sense that classification can be its own worst enemy. This certainly has been the case in the past.

We feel that the Rayner Committee was right to reject the agency proposal. The idea was put to the Committee by the Government, so the Committee was rejecting the guidance set out in its terms of reference. I agree that there is a strong political element in this sphere and that there are dangers of separating the user from the procurer. We accept that procurement is a highly specialised function and needs a strong central unitary organisation for the management of projects, control of research and negotiation of contracts. The Procurement Executive is a way of undertaking this difficult problem, and I wish it well.

As for the position of the Minister of State for Procurement, this is a little strange coming from hon. Gentlemen opposite, who rather poured scorn on the position of Ministers of Equipment. I regard this as the right decision. I believe it is necessary to have someone of the standing of the Minister of State to look after procurement. It is too much of a burden for the Secretary of State to be involved in all the day-to-day decisions. The emphasis in the new situation is that the hon. Gentleman is also given a wider brief in looking after operational requirements, and this is a good thing. This was a possible weakness in the previous structure in regard to the Minister of Equipment who did not have quite such a large brief in looking at the operational requirements of the system. These matters are part and parcel of the system and I welcome the change. It is also some recognition of the importance attached by the Select Committee on Science and Technology to the work of the D.O.A.E. There has been the tendency to exaggerate the rôle which the D.O.A.E. can play in the formation of policy, but I am sure that it has an important rôle. The criticism to be made is that it has not so far been used enough. The Minister has a real opportunity to use this important research tool in developing a coherent strategy.

It is worth looking at some of the principles involved and the question of how we should look at the R. & D. establishments. Much has been said about the mechanism of shrinkage, but I wish to get away from this term. Shrinkage seems to imply an overall reduction and there are grave dangers in overall reductions. Such a process is necessary during a period of defence change as occurred during the last three or four years, under the Labour Government, and was the only way at that time to deal with the situation. We managed through putting in fixed manpower targets and insisting on the reduced budgets to reduce a good deal of the "fat" in the research establishments. But we should be under no illusions that this is no way of getting away from the basic problem of making choices. There are choices to be made in terms of amalgamation of existing establishments and closures in terms of choosing which are the important areas of concern. The danger of shrinkage overalls that one has manpower ceilings and there is a tendency not to recruit. This tends to result in an ageing career structure and ageing staffing and there is also a morale problem. By reducing overall one does not give a stimulus to those areas of prime concern.

I hope we shall now choose areas of prime concern and give them the resources of backing and equipment and also the people they need. This will do a lot to offset any morale problems that may come in with amalgamation or other changes. We must also bear in mind that research in any area of government, that is to say research in its purest sense, cannot always be entirely motivated to the next piece of equipment one is to produce, or based on the most immediate problem one faces. There is a place in research to go out to the fringes of knowledge and to be able to pick up a piece of knowledge which is two leaps ahead of present-day thought.

One achieves that freedom if one is concentrating on areas of prime concern and is not stretching resources too thinly. The Rayner Report in paragraph 89 said: … at present research effort is spread too thinly over a wider range of possible future requirements than is sensible … This is true in terms of R. & D. resources which are likely to be available and also of production resources. In looking at establishments the principles I would like to see the Government trying to establish are whether there is any real fundamental difference between, for example, naval, army or air force radar establishments. Would it not be better to concentrate all the guided weapon work and all the radar work in one group. For instance, the Royal Radar Establishment and the Admiralty Research Weapons Establishment have both radar and guided weapons groups. This is the sort of rationalisation we must start to look at.

In looking at the communications establishment, we see that there are three establishments in the defence field and four outside defence, but they are largely Government-owned. Is there room for rationalisation in these communication establishments? We see weapons in terms of explosives, the atomic energy establishment, explosive R and D, and so on. Is there a case for rationalisation there? Any one-service research establishment needs to be justified. I am not saying that there are not cases where it cannot be justified. Any research establishments primarily operating in the same areas need to be justified. The argument has always been that they cannot be fitted in to one site and that there are no existing facilities available, but we must be prepared to make tough decisions about the actual research areas in which we are to operate while all the time bearing in mind the relationshop of intra-mural research to extra-mural research.

My right hon. Friend the Member for Bristol, South-East (Mr. Benn) has pointed to this fact and felt that there was a tendency for defence research establishments to have too large a proportion of intra-mural work and this has been criticised, to, by the Rayner Report. It is a difficult problem. I would not disguise the fact that it is easy for us to say that because the defence budget has come down so must the R. and D. be reduced to an equivalent amount. The relative elasticity of R. and D. to the defence budget varies and it does not necessarily bear a direct relationship. Indeed, as we take up a major European defence role, the need for increased research may be even greater.

Having made those general comments, I turn to more specific aspects of the Rayner Report, and I shall also discuss the Select Committee's Report. I was for all too short a time a member of the Select Committee. I had started on the defence research investigation and had previously been on the first project, on nuclear energy. I have a very warm affection for the Science and Technology Select Committee.

When we look at the Report of the Select Committee, we should be honest with ourselves. Its prime purpose and most important rôle is an educative one. First, it is educative for Parliament and gives us the ability to have debates here among members who are well informed on the subject. It is also a matter of public education. It provides a forum for discussion and one where people are able to make their comments freely on such a sensitive subject as defence research. It is a forum which has never been available before. When one reads the evidence, one sees many viewpoints, many of them conflicting, collected together in a document of immense value. Certainly the impact of a Select Committee Report inside a Ministry is a good one. It makes the Ministry assess its priorities and think about problems. Though we may differ on the recommendations, I go as far as saying that in some ways they are the least important part of this Report. That is not to say that I do not agree with some of them. However, the major rôle of the Select Committee is an educative, probing one, getting information that it is difficult for other bodies to obtain.

I was glad that the hon. Gentleman laid stress on what I regard as the Rayner Report's single most important recommendation. It is this fairly mandatory rule that will operate from now on that 15 per cent. of forecast development expenditure must be incurred before any decision is taken to go to full development. This is a very difficult decision to keep as a rule. The pressures on Ministers and the Department to go to full production early with a new weapons system and an individual Service clamouring for it are very strong. Paragraph 21 of the Rayner Report could not, however, be more vehement, and I am glad that the Government appear to have accepted it. It should only be in very special circumstances that a project goes to full production before it has incurred 15 per cent of forecast development expenditure.

The Select Committee had a good deal to say about collaborative research, as did Rayner. I am not so happy about this. The Rayner Report talks about … the passing abroad of industrial know-how to the ultimate disadvantage of the nation. It talks about the disadvantage to exports. I believe that it has under-emphasised the importance of international collaborative projects, and it has done it at a time when collaborative research is still in its infancy. We are still learning how to collaborate. In defence, we have more progress to report in international collaborative projects than in almost any other area. It has shown the way in important respects.

The vital need for an effective defence research and development collaboration is to get agreement on strategic philosophy, on the tactical doctrine and on operational requirements. I do not think that we obtain that agreement early enough, especially in N.A.T.O. My plea is that we should have intra-N.A.T.O. feasibility studies on future weapons systems, and that we should start the process of collaboration at a far earlier stage than hitherto. In short start right at the most early operational requirement stage.

If N.A.T.O.'s effectiveness is to be improved within existing financial resources, there is a great deal to be said for a far greater degree of rationalisation of equipment across national forces than exists at present. In the N.A.T.O. central front, for example, there may be as many as 15 different aircraft types in operation. We know that in the case of joint exercises at sea, it would be of considerable help to have frigates with very much the same equipment, even exactly the same frigates. For instance, A.S.W. helicopters which can operate from other ships would be a great advantage. I do not have to remind hon. Members that we are facing Warsaw Pact countries with a high degree of unification of equipment. We are often facing them with single national equipments which bear very little relationship to those of their allies.

As we collaborate in N.A.T.O., so the European technological capacity is increased and we become less dependent on United States equipment and technology. That is good. There is also a much greater chance that commercial firms in participating countries will be brought together not only into closed collaborative arrangements but also for the creation of European, multi-national firms which, I strongly believe, is the way that we should go. If defence procurement can stimulate the growth of integrated European firms, it is to be welcomed.

The transfer of areas of research and development to other countries was a subject that the Select Committee discussed. It was mentioned in the evidence of my right hon. Friend the Member for Leeds, East (Mr. Healey), who was then Secretary of State for Defence. He gave examples of a N.A.T.O. country perhaps renouncing all work in underwater detection, and another in some branch of aerospace. This is an ideal which will not come easily. However, there is a need in N.A.T.O. to concentrate research and development facilities and then to pool resources. Some of the smaller nations especially could make a real contribution if they concentrated their resources. A great deal has been done through the N.A.T.O. Industrial Advisory Group. But my plea is that at, the feasibility stage of any major project, N.A.T.O. countries which can work together should collaborate.

In my speech so far, I have been fairly welcoming of the Rayner Report. I now come to some detailed criticisms. Paragraphs 62, 63 and 88 say that … the procurement organisation should be largely autonomous, making its own appointments. They talk about "managerial accountability". Throughout the Report, there is a clear-cut feeling that this new organisation must have its own staff and its own freedom.

I can only report on my two years in Government, ending now nearly a year ago. I believe that progress on the Fulton Report and changing the Civil Service has been lamentable and that the Civil Service Department in many cases has adopted much of the old restrictive attitude of the Treasury. Unless the new chief executive is to fight for this freedom, I believe that the organisation is still-born before it starts. If managerial accountability is to mean anything, he must have the degree of managerial freedom that goes with it. I wonder how many of his struggles have been fought on this front.

We welcome the Government's statement about the introduction of legislation to allow the "golden bowler" system for civil servants. The urgency for this cannot be overstated. At the moment, it is impossible to phase out someone who cannot do his present job. As industry has recognised and as other professions have recognised, so too must we recognise that we have to be generous in our treatment of those being phased out of employment. The money spent is an investment, rather than retaining someone in the position that he cannot fulfil. This is probably the single most important and urgent requirement advocated by the Fulton Report. Lip service has been paid to it by successive Governments, but still we see no action. If ever a piece of legislation needed to be brought before this House quickly, it is that.

We are still only talking about the transferability of pension rights. One looks for a change in the abolition of office terms. Anyone faced with the situation of having to implement the abolition of office terms realises that they are totally inadequate.

In looking at the salary scales for civil servants, I notice that he is asking for the right to make his own appointments. Does this mean that he will bring in people from outside industry? If so, will he have freedom to pay them what he thinks right? My struggles in this area were dismal failures. There was a total inability to get people to realise that they must pay the rate for the job. It causes, of course, problems in the Civil Service structure, but this degree of managerial freedom must go hand in hand with managerial accountability. I see no evidence that anybody has grasped this, whether in Government or in this House.

I turn now to another point. Paragraph 76 states: our preference was and is to make the special position of the Sea, Land and Air Systems Controllers clear by making them 'additional' members of the Navy, Army and Air Force boards respectively". We know what has happened since. Behind that paragraph there has been a major struggle in the Ministry of Defence. It is the old traditional and familiar struggle that the single services are not prepared to give up their control and power. They wish their own men to be in charge of these systems and to be answerable to them. I know that Ministers are as well seized of this as, I am sure, is Mr. Rayner. But again he has lost a battle there. I hope that he will fight to retain the right to appoint the best people.

Will these appointments as sea, land and air systems controllers always be air marshals for the air, admirals for the sea and generals for the land, or will the posts be available, for instance, to scientists who have been working in these spheres? Will the appointments be made by the Chief Executive of the Procurement Organisation or by the head of the individual service? Will it be mandatory to the appointment of that officer that he should have served at some time in his career within the Procurement Organisation, or, as is often the case now, are we to have somebody drafted in to deal with this highly complicated area of procurement who may not have been previously involved in it?

Ministers must exert themselves more strongly about appointments in the centre. There has been an alarming tendency for Buggins' turn by service to dominate over appointments. We all believe that it should be the right man for the job, not necessarily by service, whether scientist. civil servant, or Service man. Many Service men have unique qualifications to serve as controllers. I have no doubt that in the majority of cases they will represent their own Services, but there should not be a pre-emptive right in this respect. I hope that this will also apply to the guided weapons controllers.

I am sure that Mr. Rayner has been assured that the concession about being a permanent member of boards does not matter, but it does. It is related back to the whole question of functional ministers, again an issue which this Government have ducked. Within a few days of taking office they overrode the recommendation of the very important Headquarters Organisation Committee. They introduced partisan politics into what was a pure organisational change. They know it, and they will regret the change. The sooner they tackle the system of the junior ministers being attached to the different services, which is and will be disruptive in this organisation, and the sooner they tackle the rôle of the Service Boards in the Ministry of Defence, the better.

Having said that, may I say that I believe that this Procurement Executive is the right way ahead. My hon. Friend the Member for Glasgow, Craigton (Mr. Millan) will draw attention to the problems of aerospace. We do not underestimate them. We know that the Government faced an extremely difficult choice in this area. We wish the Procurement Executive well. An executive which was to some extent given the same degree of managerial freedom and accountability was the Polaris Executive, with which I had a close association. It was an outstanding success. This was largely because there was a definite rôle for it. There were some exceptionally able officers in charge who pursued their difficult and complex task well, met dates, and kept within budgets. It can be done.

Defence is a difficult area of Government research and development. There is a need for choice. We wish the Procurement Executive well; we wish Mr. Rayner well. We realise that it is introducing many new aspects. It will be the first time that service officers are likely to serve as accounting officers and be answerable to this House.

We in this House must also accept a responsibility. There is a need for us to be more generous towards mistakes. If we want people to take risks and to manage effectively, mistakes will be made. I do not suggest that they will be major mistakes; I hope they will only be minor mistakes. I think that Mr. Rayner's comments on the Public Accounts Committee and other Committees of this House may be true. We are feared within the Ministry. People feel that parliamentary scrutiny can be too minute, detailed and unforgiving. As Parliament uses the Select Committee Procedure more and more to scrutinise and to inform, so we should become more tolerant of the situation and civil servants and Servicemen within the Ministry will see that we are their friends, not their enemies.

The new Expenditure Committee and the Defence and Foreign Affairs subgroup of that Committee gives to this House, almost for the first time, the Defence Committee which many of us have felt for some time was needed. This degree of scrutiny of defence is essential.

I am sure that the House welcomes the organisation and hopes that it will be successful and will solve the difficult problems of demarcation between the interests of the services and of civilian industry as a whole.

7.36 p.m.

Mr. Airey Neave (Abingdon)

I find myself very much in agreement with the hon. Member for Plymouth, Sutton (Dr. David Owen) especially about the rôle of Select Committees and their need to probe and to inform the House. I shall return to some of his remarks later. The House knows that he was an extremely valuable member of the Select Committee on Science and Technology until he became a Minister in the last Government.

I congratulate my hon. Friend the Minister of State on his appointment and on the way that he presented the Rayner Report and made references to the Select Committee.

This is a valuable debate because the Select Committee's Report was long and detailed. I am grateful to my right hon. Friend the Leader of the House, who listened to representations for many months, that the Report should be debated now. It is unfortunate that a matter involving £260 million of public money in research and development should not attract more hon. Members on this occasion. None the less, those who are present have some knowledge of the problems involved. I hope that when my hon. Friend winds up the debate he will reply to some of our comments.

I shall refer mainly to the organisation of research and development which is one of my main interests and is referred to in the Report. I shall refer especially to Appendix C of the Rayner Report where reference is made to the appointment of a Controller of Research and Development in defence matters.

The Chairman of the Select Committee at the time of the Report on defence research was the hon. Member for Bristol Central (Mr. Palmer). He was a very successful Chairman. Many tributes have been paid to him in the past and I pay tribute to him again today. He has told me how much he regrets that he cannot be present on this occasion, but he has an important engagement elsewhere. I have succeeded the hon. Gentleman as Chairman of the Committee during the past year.

It is a great pity that two years have elapsed since the Report was made. It is difficult for surviving members of the Select Committee to take part in the debate for that reason, though they have kept up with the subject.

The hon. Member for Sutton made clear that the prime purpose of a Select Committee is educative—this is right—and that it should be a forum for discussion. This is all the more reason, when an enormously important subject is reported upon in 218 paragraphs, that debates for the purpose of informing the House should take place fairly quickly after a report is made. Two years is a long time to wait. I was the Chairman of the Sub-Committee which visited N.A.T.O. with Dr. Ernest Davies, and I confirm what the hon. Gentleman said about the failure of N.A.T.O. to tackle the problem of standardisation, especially when faced with the Warsaw Pact forces. This disturbed me considerably.

The only other surviving members of the Select Committee in this Parliament are my hon. Friend the Member for the Isle of Ely (Sir H. Legge-Bourke), who. I hope, will catch your eye, Mr. Speaker, because he has various aspects to discuss, and the hon. Member for Dewsbury (Mr. Ginsburg), who also regrets that he cannot be here. The Report was widely discussed at the time and described as the best account so far of the workings of defence research. I think that was true in May, 1969.

A main theme of the Report is the need for closer links between defence research establishments and industry. This is a point which the answer of the Ministry of Defence at the end of 1969 did not deal with adequately. In the Report, there was a reasoned argument about this aspect. I found the Ministry's reply—and I am not making a party point, since my view was shared by all other members of the Select Committee—rather prim and brief. It did not deal with a number of the points raised. Little was done about the recommendations, although the last Government said that they had welcomed the inquiry.

The Report exposed grave weaknesses in the links with industry. It also criticised the financial control of budgets and project management. The ensuing White Paper denied most of the evidence taken by the Select Committee to the effect that the Treasury hindered an effective research and development programme. The evidence before the Committee from industry and from the cross-examination of many witnesses showed that the Treasury did hamper the activities of some of the committees. But it must be said that, in the subsequent White Paper—the "reply", as I call it—the limit of financial authority delegated to the Ministry was raised from £250,000 to £1 million, so the Government had taken note at any rate of some of the points we made. Obviously, they thought this a rather sensitive area for investigation, and I understand that that might well be so. Although at the time expenditure was £236 million and it is now, for 1970–71, £264 million, it was the attitude to industry which was most criticised by the Select Committee. The Select Committee concluded on the evidence that industry should have a much bigger say in defence research plans.

This point was taken up very well by Mr. Rayner, and I join in the congratulations to him on his Report. But so far we have only had the rather pious statement that any suggestion that industry should participate in defence research planning would not be appropriate because the Government have to take the decisions. That may be so, but the recommendation which brought this reprimand from the last Government—it is contained in paragraph 145 of the Select Committee's Report—asked for better defined channels of communication with industry. That does not seem to me to be a very revolutionary suggestion. I want to comment on that, because we have to make progress. The Government's reply said that industry was in a different position from the Government that, unlike a Government Department, it was not an entity. The evidence taken by the Select Committee showed that the Ministry was a maze of committees and we found it difficult to find our way through them. I hope that there has been some simplification since then. What I am saying covers both Governments and any comments I make are not from a party point of view.

The reference to industry, with the douche of cold water poured on the recommendation for further participation by industry, was made when extra-mural expenditure was growing. It was £160 million then out of the total research and defence expenditure of £260 million. I hope, two years having elapsed, that there is a less circumscribed view about those with whom the Ministry should collaborate and that, now that Mr. Rayner has looked into the matter, his recommendations will be followed.

Paragraph 79 and Appendix C of the White Paper, dealing with procurement, are Mr. Rayner's proposals for the reorganisation of the defence research establishments. This is extremely important and the comments so far have been interesting. The Select Committee suggested a joint direction with industry, with joint boards of management from industry and the defence research establishments. Apparently, the Ministry of Defence in the winter of 1969 thought this rather a joke. It did not think that we meant it seriously. It briefly looked at the suggested and said that it would not be appropriate.

All these questions relate to the need to bring industry in at an earlier stage and to allow it to participate in some of the early decisions on the research programme. That was the main theme of the Select Committee's Report. The defence research establishments are a vital part of any adequate programme, and I hope that they will long continue to be the key factor. There are 24 of them and it may well be—it is difficult to say without going into the matter more deeply than is done in the Rayner Report—that the proposal for a single, strong management is right. But it does not follow that the "rationalisation" which is rather vaguely talked about should necessarily mean the suppression of individual establishments and their reallocation physically under one organisation. Mr. Rayner obviously saw the point of view of industry here. In paragraph 82 of his Report he said: Unless users have a relationship with suppliers at the earliest possible stage, a major source of help and guidance is prevented from making its proper contribution.

In relation to the defence research establishments and to the work they do becoming more public and of more use to industry, that is exactly what the Select Committee said two years ago, and the point should have been taken up before now.

Talk about "rationalisation" tends to be vague on these occasions. We have often debated the organisation of research and development, and vague talk leads, as the hon. Gentleman pointed out, to uncertainty and poor morale among the people who work at these establishments. It must be the duty of the Government to avoid that as quickly as possible. I query whether the physically bringing together of the defence research establishments in one place is necessarily right. This often has a bad effect, even if there is a strong central management, on the quality of research. Bringing them under one location is objectionable for two reasons. It wastes the existing laboratories, though they can be used for civilian purposes. Generally speaking, they have substantial capital resources, and the capital equipment has to be developed and expanded somewhere else.

I am sure that I speak for many of my colleagues on the Select Committee when I say that I am very much for independence in research. Indeed, this should be the philosophy of all Governments in this matter. However strong and central the management of research may be, and I agree that it should be in this case, it is important that a considerable degree of independence continues in individual establishments.

Under the Rayner scheme, the Controller of Development and Research will be a Ministry man who will have considerable power over the details of the research programme, not only financial but actual policy decisions. If the scheme is to put these D.R.E.s physically into bigger organisations, then there is a danger that the quality and individuality of research will be affected.

This is not to say that it should not be directed from the centre. I have already explained that in my view it should be. I hope, therefore, that the Minister will bear these points in mind, for we are dealing here with human beings; these people have worked in this sphere for a long time, they are being moved, perhaps not necessarily, and they will find that their work is affected.

There are many important points which one could make about the staff—about pensions, transferability and so on—which are very much in the minds of hon. Members today. We have raised them on many occasions in the past and we will continue to go on raising these matters. This point was made strongly in the Report of the Select Committee.

It was the view of the Select Committee that more could be done in industry, though it is dangerous to say this in general terms. We had several debates in the last Parliament on this question, when some of my hon. Friends took the view that a lot of work done in Government research establishments could be done by industry. For the big projects, and certainly for many of the defence projects, industry does not have the finance to do that. One must, therefore, keep this matter in perspective, bearing in mind that the proportion of extramural work has grown considerably.

I refer to the proposal in the Rayner Report to transfer Aldermaston to the Secretary of State for Defence. While Harwell is in my constituency, Aldermaston is not. It is over the boundary in the Newbury division. However, there is a considerable interchange between the two and it is important to remember the civil work, as distinct from the defence work, done on nuclear research at Aldermaston.

There would be a considerable risk to the civil work if a drastic reorganisation were to take place and Aldermaston were placed under the Ministry of Defence. Was the D.T.I. consulted before this proposal was made? I see some reference in the introductory part of the White Paper to this and to the fact that talks are going on, but it would be a serious matter for scientific morale if there was not proper consultation with those concerned.

The work done by the D.R.E.s should be more widely known. I accept what has been said about the need for less secrecy, though there must be security at top level in certain defence matters. If the knowledge available in the D.R.E.s were more easily available to the public and industry, this would be of great advantage. It would certainly help industry to join in a successful and balanced research and development programme.

I regret in some ways that it is not possible to go for the long-term R. & D. defence model which was suggested by the Select Committee. I appreciate that there are formidable problems, nevertheless, it can be said that the Select Committee did a useful job in posing this difficulty. It made the Ministry think, and that is the function of the Select Committee. I am sure that it will continue to perform this duty by posing these problems and probing the Government's policy, thus performing the task of a Select Committee of this kind by making those inside the machinery of Government think again.

7.56 p.m.

Mr. Tarn Dalyell (West Lothian)

The hon. Member for Abingdon (Mr. Neave) and I were colleagues on the Select Committee for the first two and a half years of its life. I came to have the highest regard both for the crispness and for the relevance of his questioning. Indeed, had things worked out slightly differently I would have enjoyed the pleasure of working under him in his new position as Chairman of the whole of the Select Committee.

One important question which the hon. Gentleman asked was how two years could have elapsed since this Report was presented without the House having debated it. Well, I can explain it. I should congratulate the colleague who will almost certainly speak following me, the hon. Member for the Isle of Ely (Sir H. Legge-Bourke), who is Chairman of the 1922 Committee. It is he who is responsible. He spent a great deal of time asking for a debate to take place. Repeatedly at Business Question Time he asked my right hon. Friend the Member for Workington (Mr. Peart), the then Leader of the House, when the Report would be debated only to be told, "Not next week". Finally, he has been putting the same question to his right hon. Friend the present Leader of the House.

I imagine that, considering the important part that the hon. Member for the Isle of Ely will have to play in the Common Market negotiations through the summer, his right hon. Friend, the Government Business manager, would do almost anything to oblige him. If I were the Leader of the House on the benches opposite I would certainly be anxious to oblige the one colleague who could prove vital in delivering my party's votes when a decision on the matter of the Market, which we shall be debating throughout the summer, comes to be taken.

Be that as it may, had we not had the Chairman of the 1922 Committee personally interested in this subject, this Report would probably have accumulated dust and gone undebated, with the Government contenting themselves with a short debate on the Transfer of Functions Order, on Rayner, in which some of us took part. I am glad that the hon. Member for the Isle of Ely is likely to speak after me, for I am an open man and I propose to be extremely candid about a number of matters in relation to the Select Committee. In other words, I intend to say what I think.

I wish, first, to refer to some of those who would have been speaking in this debate had they not been defeated at the 1970 General Election. In the work of Select Committees there is no political kudos, just a lot of hard work done for remarkably little dividend—at least, remarkably little political dividend.

The House will understand if I grieve for some of my former colleagues, among them Dr. Ernest Davies, who played a particularly active part and was my copartner in many views on the Select Committee, Ray Dobson, Eric Moonman, Bob Howarth, Arnold Gregory, Brian Parkyn, who made a particularly valuable contribution, and Eric Lubbock who, though not of my party, made a massive contribution to the work of the Select Committee.

It is sad that there was such a massacre of those who, regardless of party, did a great deal of Select Committee work. I would like to see the televising if not of the House of Commons, then at least of some of the confrontations in the Select Committee, which would make extremely intimate and fascinating television, and allow people to see Parliament at work.

I should like to go on from this to be a bit harsher. I had wished that my hon. Friend the Member for Bristol, Central (Mr. Palmer) were here, because I would have wished to say this in his presence. In my view, he was an exceptionally good Chairman, on the long Report which we did on nuclear power policy. It can always be said of my hon. Friend the Member for Bristol, Central that he played a crucial and massive part as Chairman in getting the Select Committee on Science and Technology off to a good start and in all the work he did in creating an atmosphere in which it was taken seriously in the scientific world. All that is totally to his credit. But in my view, together with leading Conservative members of the Committee, he simply should not have allowed this inquiry on the defence research establishments to drag on and on, and on. We were talking about it in 1966, but, to be fair, it was conceived in June, 1967. The first meeting was in December, 1967. The evidence was taken until June, 1968. The draft report was not completed until March, 1969—a large time gap. Now we are debating it at the end of May, 1971—four long years.

If they are to be effective, Select Committees must be crisp. If I were to make a serious criticism it would be that some of the members of the Select Committee—I do not exclude one or two hon. Members present today—thought that they were a Royal Commission. I am glad that the hon. Member for Isle of Ely will have a chance to comment, because this is a very mistaken view of the job of a Select Committee. Members of Parliament have all sorts of things to do, and we must not beguile ourselves into thinking that we can serve as a Royal Commission. Partly because it drooled on so long, a number of Members, some of whom have left the House, lost interest. That is my impression. The result is that this Report—unlike the previous Report and unlike some of the Sub-Committee reports, which were very good—if we were to be candid, is verbose, badly written, sloppily constructed, ponderous and unintelligible in parts. In future, what we should learn is that if any subject looks like taking more than a parliamentary year, it should be taken by an organisation other than a Select Committee of the House of Commons.

As for my position, to which I shall refer later, I was not the only one who was fretting and impatient by the summer of 1968. I think I speak on behalf of Ernest Davies in saying that he felt the same way. In brief, a great deal of the report has become dated. It has been overtaken by Rayner.

However, I make one or two specific references. Paragraph 56 states: The Ministry of Defence have estimated the increase in the total cost of a project shared equally between two nations to be 10–20 per cent., making the share of one country about 60 per cent. of the cost of going it alone". I listened with care to what the Minister said this afternoon about competing international contracts. The situation is rather different from what it was even three or four years ago. I ask whether the calculation that the Select Committee gathered from its evidence about the additional cost of cross-frontier contracts still holds, because this is of a good deal of significance in military procurement thinking for the future.

I was also interested in the Minister's reference to what Rayner had to say about delay and the worries about the loss of know-how in the context of international military contracts. This is an important subject and perhaps the Minister would comment—either when he winds up the debate or by letter afterwards if the relevant civil servants are not available and he cannot comment from his own knowledge; I do not decry his knowledge in any way.

Another matter of consequence arises out of paragraph 78. This is the whole question of the delay on holding contracts. As we cannot insert things in the OFFICIAL REPORT, I shall read out quickly the relevant points. We were told by Plessey's that there could be years of delay betwen their being told that they had been selected for a contract on the basis of competitive project studies and the beginning of actual development. They bore much of this delay on their own account and usually only secured a holding contract as a result of putting pressure on the Department concerned. The Company later submitted an example of a case where holding contracts had covered a period of over twelve months. The Electronic Engineering Association were similarly critical of the extensive delays caused by holding contracts but agreed that the fault was as much their own as that of the Ministry. I remember clearly what this argument was about. The question I ask is whether, in the Department's opinion, the whole problem that surrounds holding contracts has in any way been solved. To make sense of it, I had better read paragraph 79: The Treasury assured us that they were 'deeply conscious' of the possible effects of holding contracts. They pointed out, however, that these were likely to be necessitated while political decisions were being taken about the precise requirements of defence policy. The waste of money involved in going ahead with development of a weapon that was not going to be needed would be greater than the cost of holding contracts covering the decisionmaking period. Therefore, it is still a very current subject and I should like a view from the Defence Department as to whether progress has been made in this direction.

I should like to mention also paragraph 160 and Byfleet, which was mentioned by the Minister. I do not quite understand—I hope I took down the phrase correctly—the Minister's slightly sharp remark that we really ought to understand that Byfleet was not the plum in the centre of the stage. Would I be wrong in thinking that the whole idea of a defence operation or analysis establishment has been sidetracked and down-graded some-what? The recommendatiaon in paragraph 160 is of relevance. We recommend that the future planning of defence research and development should be carried out by using a very wide range of the techniques known as strategic studies, force structure and weapon system studies and operational analysis. We further recommend that the Defence Operational Analysis Establishment should be expanded and provided with the necessary facilities to pursue these studies. The Department may not be wrong. I am not offering a dogmatic opinion. But is the Department deciding to go in a different direction? This is what I have understood to be happening.

Again from the Select Committee report, paragraph 183 states: We recommend that the Weapon Development Committee should be given authority to sanction prescribed variations in the financial programme of major projects, and that the supervision of their exercise of this authority should be a function of a House of Commons Committee having the general oversight of of all defence matters submitted to Parliament. The establishment of such a Committee has, of course, been canvassed on broader grounds elsewhere than by us. Do the Government consider that, by setting up a defence Sub-Committee of the Public Expenditure Committee, they have covered this point? Related to that, and as indicated by my interjection earlier, do the Government consider that now that the Weapons Development Committee has been abolished by Rayner, they will have the Treasury brought in at an initial stage? It may be right to get rid of the Weapons Development Committee. All I am saying is that if they do this they will have to have the Treasury in at an initial stage.

Paragraph 184 states: A subsidiary, but extremely urgent, question about which we have received evidence from various quarters is that of the extent of the financial responsibility which should be entrusted to project managers. I should like to record the fact that I welcome very much what Rayner had to say on the whole question of project management. The only mystery is why this was not done before in the Ministry of Defence.

I now come to the Rayner Report itself. If I can be brutal about it, one reason for the difference between the effect of Rayner and the effect of the Select Committee is that the former Report is far better written than the latter. It is much more intelligible. It is crisper. It is no wonder that it has had a greater public impact. People are able to understand what is produced.

There are various things in the Rayner Report about which I am not very clear, but they are comparatively minor in relation to the whole Report. It is said that there ought to be R. and D. outside projects. If I understand Rayner rightly, the controllers are not responsible for these outside projects. The question is who is to identify the work that is not directly connected with establishments. In particular, the crucial question is who initiates it? Who is to initiate the extra-mural work?

Little mention is made in Rayner of buying overseas. How is the question of overseas purchasing to be dealt with, and how is the sales effort to be integrated with United Kingdom procurement? I am not clear on that issue.

Another source of worry is R. and D. costs. The general feeling of Rayner—I do not think that I do it an injustice—is that there is no need for the controllers to worry over this. I am not at all clear on what basis R. and D. costs will be included in the final export product, or in the internal accounting in Whitehall. Is a levy to be included in the price to recover R. and D. costs? I am not clear how price is to be calculated, but that may be my fault.

The Minister referred to the closest links with industry in the formulation of operational requirements. The hon. Member for Abingdon has, to my certain knowledge, been concerned with this issue for more than ten years, but every time, in answer to him and to other hon. Members, we get the same reply from the Government, "We are about to get the closest relations with industry". It is no use pretending that these relations are close, particularly with the motor industry, because they are not. I do not want to go into detail, but I am prepared to talk in private to the Defence Minister, as I have done, about the dissatisfactions of the motor industry.

There is an inclination in Rayner—and I am glad of this—to put R. and D. out to industry which is market-oriented. If that is done, the financial vote of the establishment is put down, unless one increases the total burden. Here I agree with my hon. Friend the Member for Plymouth, Sutton (Dr. David Owen) that there are terrible human problems in anything that is called shrinkage or, as he prefers it, surgery. Having listened to my hon. Friend on this and other occasions, I am coming to his view that shrinkage may be a bad word to use, and that surgery, cutting things out, is more relevant. There are great problems of schooling, housing and pension rights, and I therefore ask the Minister to explain what he meant when he talked about exploratory development and more selectivity. Did he mean surgery, or did he mean shrinkage, or did he mean anything in particular at all?

I think that there is a considerable problem of the morale of the career scientific service, and a dichotomy and real dilemma. I raised this issue of the mechanism for shrinkage in the Transfer of Functions debate, and in reply the hon. Member for Guildford (Mr. David Howell), the Parliamentary Secretary to the Civil Service Department, said that he would be keeping a beady eye on the question of staff economies …"—[OFFICIAL REPORT, 26th April, 1971; Vol. 816, c. 193] Keeping a beady eye on something may mean anything that one wants it to mean, and the time has come for a clear indication of what the Government are going to do about it.

I hesitate to approve my hon. Friend's request that Ministers should exert themselves in the choice of civil servants. Here I should be more cautious than my hon. Friend was, and perhaps for once less reckless than I usually am. This is a frightful difficulty. We might have in miniature other situations like that between my former colleague, now Lord George-Brown, and Sir Con O'Neill. I am not sure that that is the right relationship for politicians to have with civil servants. Who will do the appointing? I would go along with my hon. Friend if the appointing were done by the Minister, in consultation with a number of other people, but I think that it results in an extremely delicate situation to have politicians interfering, or being thought to be interfering, in a sector which the Civil Service understandably regards as peculiarly its own.

My hon. Friend raised a matter on paragraph 28 of the Rayner Report. It is probably true that the Civil Service has taken considerable notice of the Senior Committee of this House. As one who served on it for three years, I confess that one of the things of which I am least proud in my political life is the way in which I nagged and nagged the Chairman of the Public Accounts Committee to have before us Sebastian de Ferranti to deal with the question of Bloodhound. The whole of the Bloodhound issue, and the Bristol Siddeley matter that followed, were not as clear-cut as I thought at the time, but I was then a more brash Member than I am now, when I see that there are considerable problems.

Where I did agree with my hon. Friend the Member for Plymouth, Sutton, was when he raised the whole question of the number of laboratories that we have. I should like to be specific, just to help my hon. Friend The Services Electronics Research Laboratory at Baldock is working on gallium phosphide. That is also being done at the R.R.E., Malvern. Some of us have seen the work on gallium phosphide. Why does it have to be done in two places? This question has been asked time and again, although their displays at the recent Physics Exhibition were good. There is the Services Electronics Research Laboratory at Baldock, under the Admiralty. There is the Ministry of Defence Underwater Weapons Establishment at Portland. There is the Admiralty Materials Laboratory at Holton Heath in Dorset. There is the Admiralty Compass Observatory at Ditton Park. And so they go on. It seems that there is a massive number of establishments.

I do not want to make a wholly destructive speech. I therefore remind the House of the need to get as many as possible of these establishments either into industry or, where appropriate, into universities. I refer in particular to an answer that was given by Sir Denning Pearson in June, 1968, when I asked him: '"… what policy conclusions do you draw from your allegation that establishments should avoid being sidetracked into development work which is the proper function of industry. His answer was the statement of a very real problem. He said: This is a very major question and strikes deeply into the roots of the development of our industrial technological companies in this country. We are entirely convinced, and are prepared to give evidence from industry, that the development of a technologically based industry cannot be divorced from the research, design and development which originally create the industry and which maintain its momentum. In other words, in any technologically based industry inevitably the momentum of industry derives from those who have been concerned with research, design and development. It might be invidious to give comparisons, but one can take perhaps extreme comparisons which have been so well-known that the industries concerned would not feel offended by anything I said. At one extreme we have the shipbuilding industry where a majority of the naval architectural talent in Great Britain is concentrated in the Corps of Naval Construction, and has been for many years. This, undoubtedly, has led to a dearth of technological talent among a majority of the shipbuilding companies in this country. This is one of the main contrasts between our shipbuilding industry and other industries. The majority of technological naval architectural talent, in addition to ship design talent in this country, has been in the Corps of Naval Construction.

This can be repeated several times over. Here are talented people who go to these establishments and, I believe, very often get into a rut in a nine-to-five job. Just as the Robbins Committee argued that in order to be a good teacher in a university one had to do current research, it may also be true that in order to do good research one must either have a position in industry or do some teaching. There is a great deal to be learned from that.

Finally, I would like to speak personally for three minutes. There is no malice, and I hope no special pleading here. I was deeply involved as a member of a Select Committee in a privilege case. I speak like this now simply because I would not like any other hon. Member to go through the same experience because it is a very formidable and appalling experience to be confronted by this House and to face the Privileges Committee and then a full debate on one's personal conduct. However thick-skinned any of us may pretend to be in politics, I simply would not believe anybody who said this kind of thing did not have a very considerable effect, and for some time, on him; because we are all sensitive to a point and we would be less than human if it did not.

I would like gently, and in subdued voice, to make these points. Nothing has been done about privilege either by this Government or by the last and I certainly understood it to be the very general feeling on both sides of the House that all the issues that arose out of that privilege case ought to be faced up to and gone into and certainly the Report of the Privileges Committee should be seriously considered and debated. Both Governments have had their opportunity and the time will come in one form or another, sooner or later, when someone else will find himself not in an exactly similar position but perhaps in a related position and we shall all wonder why we did not tackle it before.

My second comment is that privilege is very precipitate. I am not asking for things to be "fixed" in any case, least of all mine; but we as a House have to consider a cooling-off period before we set in train the whole mechanics of the Committee on Privilege, and to do away with the idea of having to raise it at the earliest possible opportunity before any thought has been given to the matter.

Thirdly—and I know that the hon. Member for the Isle of Ely is a very generous man and will take this in the spirit in which I say it—there has to be a certain clarity in Select Committees whether we are sitting in public or private. I have no axe to grind now, but I stick to the point I made at the time of the discussion at Porton; I thought we had decided it should be a public discussion. There were no clear minutes of this, at any rate, so that it was every man to his own interpretation. It was a subject on which at least there were grounds for doubt. I would ask the House to recall that this was a Committee which was sitting in public in the House of Commons, with the Press present.

It was also said at the time that a note was circulated to members of the Committee with certain instructions about confidentiality. The Clerk is not a liar, he is a very truthful man; and I have no doubt he circulated it. But at least I did not put it on my file and was not conscious of it. This is true. This does not mean that I did not get it but it means that as a member of a Select Committee like other busy Members, one is overwhelmed with paper, and as long as there are the lockers and facilities that exist in this House it is ridiculous to circulate supposedly secret documents to Members of Parliament. I feel, as a former member of the Public Accounts Committee, that if secret documents are to be circulated they must be treated in the same way as the Exchange Equalisation Account, locked up in a Committee Room of the Public Accounts Committee and available to Members as and when they want to see it; so we must be clear about this. Ironically—and no names, no pack drill,—I did pick out of the wastepaper basket in the Library a copy of the very Select Committee minutes of which I was reprimanded—and I am making no complaint—for giving to the Observer.

It was done in a hurry, as I told the Privileges Committee, in order to put a case straight. But the fact that this supposedly secret document could find its way into a wastepaper basket in the Library of the House reveals that we have to make up our minds one way or the other whether these documents are or are not secret.

One point which I would make on the Committee on Privilege as a whole is that if any hon. Member finds himself—I hope he will not—in my position, he must be allowed to take a lawyer or and colleague in with him. As it happened, I was determined to be wholly truthful and as soon as this document and article was mentioned, I said I had given it to the Observer. But I was made out to be confused, partly from questions to which there was no answer, which were meaningless questions, as for instance from my very good friend the former right hon. Clackmannan and East Stirlingshire, who has left the House; and when a man is faced, without a lawyer, with a string of questions in what is naturally a tense situation, it can easily be that he gives rather misleading answers.

It so happened that the then Leader of the Opposition, the present Prime Minister, picked me up and said, "Mr. Dalyell, you cannot really mean that". I am making no complaint about the present Prime Minister, for his questions were very fair. This kind of an interrogation raises questions for this House as to how we ought to deal with these matters. If a Member of Parliament is to appear before the Attorney-General and his colleagues he must be allowed either a lawyer or political friends, fellow M.Ps., with whom he can consult. The Committee on Privilege is a court.

There is little more to be said on this, Mr. Speaker. I would hope to catch your eye during a debate when privilege is brought up, as I hope it will be. But finally, on Porton, it is my view, as it always was, that until there is multilateral disarmament we must have the Chemical Defence Establishment and Micro-Biological Defence Establishment but that it should be handed over from the Ministry of Defence to the Department of Health and Social Security. I hope that the Government, in consultation with the new Director of Porton, will seriously consider whether M.R.E. & C.D.E. can be handed over to where they belong, the Department of Health and Social Security.

8.30 p.m.

Sir Harry Legge-Bourke (Isle of Ely)

It was distressing to us all, both now and on the earlier occasion, that the hon. Member for West Lothian (Mr. Dalyell) should ever have got involved in a case of privilege. Having been on the visit which led to the incident—and I believe I am the only Member from this side of the House, although at the time I was sitting on the other side—naturally, I am particularly conscious of the regrettable nature of the whole exercise. I can only say to the hon. Gentleman that I should not like to follow him in what he said about the Committee on Privilege. I hope that none of us will ever have to appear before it. Not having been present to watch his embarrassment, I should not like now to say anything which might add to it, but I have always thought, right the way through, that what the hon. Member did, he did unintentionally, and that he was not aware at the time of the full implications. I have always accepted that. The House has dealt with the matter, and I should like to leave it there tonight. I want to say something about Porton later on.

I am sorry that the hon. Member for Plymouth, Sutton (Dr. David Owen) has just left us. I was particularly glad that he reminded us that there is a human aspect in the whole matter. When we are talking about research into new weapons and their development, it is very easy to forget that individual human beings are involved. Probably the most human piece of evidence ever given to a Select Committee occurs in the evidence given to us at West Byfleet. When we were talking about the staff the witness said in answer to question 2018: We recruit most of these people locally by local advertising and they stay with us, on average, a little over two years. They are generally attractive young girls in the period between school and marriage and our turnover is high. That is one of the most delightful human pieces of evidence ever given to a Select Committee.

It is very important that we recognise throughout that the finest machine in the world will not achieve the results that it should if it has the wrong man in it. One man who in the machinery of government during World War II set an exemplary example of how a soldier can work with politicians was the late Lord Ismay, who was a very great friend of my family. As a boy, I remember him. and in the years leading up to his death it was one of my delights to talk with him about the various things the Governments of that day were up to. In particular, I recall the occasion, which might be said to be during the diarchy of the Mountbatten-Zuckerman combine, when we were debating in 1963 the Defence (Transfer of Functions) Bill. He warned me then of the terrible danger of over-rigidity in anything to do with defence. In particular, he feared that we were going to imitate the German OKW, if we were not very careful. He stressed the need for flexibility and having the Cabinet in a sufficiently dominant position, with adequate military liaison with its Defence and Overseas Policy Committee.

In his memoirs he wrote something particularly relevant to what was said by the hon. Member for Sutton. He wrote: There is a type of senior official, both civil and military, who get more and more set in their ways as they ascend the ladder of promotion. These able, upright, worthy men do not like the even tenor of their lives disturbed, and resent dynamic ministerial action. I hope that my hon. Friend the Minister of State for Defence Procurement will be in dynamic Ministerial control on this front. There are already danger signs going up very fast. They occur in particular in what the White Paper, Cmnd. 4641, says about the Treasury. It is very important that my hon. Friend recognises where he must watch it. The latter half of paragraph 73 says: The procurement organisation must, in our view, be a single entity and research, development and production resources must likewise be treated as a unity within the Ministry of Defence and in relation to the Treasury and the Civil Service Department. Paragraphs 100 and 101 are perhaps more important. The hon. Member for West Lothian has already touched on the position of the Weapons Development Committee and the Treasury. That Committee is being abolished, and I do not weep to see it go, because I think that that was where more money and time were wasted, and more grief was caused, than probably in any other part of the whole of the old system. Paragraph 101 says: The Weapons Development Committee will cease to exist if our proposals are accepted. It will therefore be essential in our view to make alternative arrangements to keep the Treasury as fully informed on equipment matters as they are at present. The Treasury would also continue to attend meetings of the Defence Research Council. Despite what the hon. Member for West Lothian said about the English of our Report, I hope that he will at least pay careful attention to what the Treasury said to us. Of all the lamentable performances before a Select Committee, that morning with the Treasury was ghastly. It was harrowing to feel that any Government Department in as influential a position as the Treasury had its effrontery. It was apparently obliged to tell us that it does not give any priority as between defence and other things, that it works under no such instructions. To me, that was one of the most dreadful days, because it confirmed all that I had always thought as a soldier and a great deal that I had learnt as a politician. If we have not yet learnt that the Treasury, of all Departments, should be under clear orders as to its priorities, and that defence must be the first, we have only ourselves to blame if history repeats itself and we go naked into war again. I have said in the House before, and say again tonight, that no Government Department has more of its fellow countrymen's blood dripping from its hands than the Treasury has.

It looks to me as though very few lessons have yet been learned on this front. If my hon. Friend the Minister wants to make his policy work, he must ensure that the Treasury is made aware of the importance of giving defence research priority over a great deal of other research. If he is to make the new set-up work properly, those from the Treasury must be men who are fit to be there. As the hon. Member for Sutton said—and I fully endorse all that he said, the business of Buggins's turn must be got out of this part of the system. I hope that my hon. Friend will be resolute. I strongly suspect, reading between the lines of the Rayner White Paper, that there is a battle yet to be won there. I am sure that Mr. Rayner and his team will want all the support from my hon. Friend that they can have to stand up against the Treasury.

I suspect that the new Committee system will be pretty elaborate, with subcommittees and so on. We should recognise, as we were also told in the Select Committee, that ultimately it is the men in those committees who will make or mar their work. If there is the old boy net operating well enough, and the man who is the old boy is a good enough chap and qualified enough, it will work. One can have the finest committee system in the world, but if the wrong men are on the committees, one will not get the results one needs. This point was well brought out by one of the air marshals before us, and I feel that it is the essence of the matter.

My hon. Friend the Member for Abingdon (Mr. Neave) said many wise words about management and the relationship between industry and Government. The evidence I enjoyed most in the Select Committee came from Commander Pasley-Tyler, who had a big responsibility behind the scenes, if not actively, for the success of Nimrod. I was in Canberra the other day with a Select Committee and Nimrod was taking part in the air show there. The conditions surrounding the progress of Nimrod were propitious compared with some other projects, because a certain amount of things were already on the shelf and were brought together. The Americans use freely the terms "building bricks" and "building blocks" with which to describe the various parts of other projects which can be used in a different one. A project which is deliberately developed with a view to use later on is denned quite well. The best part of the last Government's White Paper on the Select Committee's Report, published in December, 1969, was that which said, in dealing with the merits of the "building bricks" approach to project execution: It can, for example, cover:

1. (a) components which are developed in anticipation of the formal initiation of a project and are incorporated in it but have no other application.
2. (b) components which are designed with a number of different applications in mind for the purpose, among other things, of standardisation.
3. (c) components which are developed on a speculative basis in sufficient variety to provide a range of choice within a particular field."

Project components which were virtually all there in avionics were able to be taken off the shelf for the Nimrod project. The job shines out as a glowing example of how to do a project on time within the budget and one which works at the end of the day. That is what we must aim for I am sure that, eventually, projects will be improved but there will be failures, and I believe that the Rayner Report recommends sensible improvements in the machine which should lead to better results than we have had up to now.

I turn now to the subject of Porton. I want to quote evidence given by the right hon. Member for Leeds, East (Mr. Healey) who was Defence Secretary at the time. In answer to Question No. 1291. he said: One has to accept there is a potential threat to this country from both chemical and biological weapons. The view we have taken is that we must maintain, as you were told at Porton. an adequate defence capability in both fields. In the field of chemical weapons we have a very good defence capability indeed so far as our services are concerned. It is not so easy to conceive of the use of chemical weapons against a civil population in these islands. Their use against soldiers in Europe is something which one must almost expect if there were a war in Europe. We have not felt it necessary, nor indeed did the previous Government, to develop retaliatory capability here, because we have nuclear weapons …". That is a frightening philosophy. We now know that the Soviet troops in Europe are armed with chemical warfare capacity of some sort; they are not merely equipped with protective clothing in case someone uses chemical warfare against them. In other words, in Europe there is a high potential of chemical weapons being used in the event of war breaking out.

I say to the hon. Member for West Lothian that this is not a matter for the Department of Health to cope with. I believe that the establishment at Porton has been on a shoestring for far too long. The work the men do there is a very high form of dedicated work. This country might be in a far more dangerous position today if they had not been doing it. I have waited for the opportunity to say this in the House ever since the incident in which the hon. Gentleman was involved in the unfortunate matter of privilege.

I believe that we are expecting of these people a responsibility which, if it were not for the fact that they are the most patriotic and dedicated people in the country, we would not get from them. I hope that my hon. Friend will pass this on to them. Whether they work on chemical warfare or micro-biological warfare, it is essential that they should safeguard our interests so that we are aware of how these ghastly things can be inflicted upon people.

Mr. Dalyell

I agree.

Sir H. Legge-Bourke

This is not a matter for the Medical Research Council. Obviously it has to be consulted from time to time, but I would say that this is essentially a military threat. It must remain under the aegis of the Defence Department in some way or other. I hope to see what is absolutely fundamental to this—a complete re-think in Cabinet as to how we are to interpret the Geneva Agreement and the other agreements covering this matter.

I strongly suspect that what may have been all right for the Government before last was not necessarily right for the last Government and it is highly doubtful whether it is right for this Government. I am prepared to believe that what has been happening east of the Iron Curtain in Europe demands a complete reappraisal of Cabinet policy on this matter, because there are two ways of interpreting the Geneva Agreement. The Russians are interpreting it one way to mean that they are legitimately entitled to arm themselves with retaliatory means should they be attacked.

We have always taken the view, as I understand it, that we should only be ready to cope with anything that might be inflicted upon us by protecting our own people so far as we can, but we are not armed with any chemical weapons—there are none. If what is happening east of the Iron Curtain is what I believe it to be, if Russian troops in Europe are now armed with chemical warfare weapons of various sorts, it is the duty of the Cabinet to reconsider this.

The conclusions it should arrive at must depend on the highest expert advice available, which I am obviously not in a position to give. If it comes to the conclusion, on the best advice, that it ought to revise the governing position which decides what should happen at Porton then, given the assurance that it is the best advice, I would back that decision. It is the duty of anyone in such a matter to back the Government of the day, after they have taken every possible care to ensure that they have the best advice.

Mr. Dalyell

Would the hon. Gentleman accept from me that I would never presume on this issue to make out myself, or anyone who thinks like me, to be more moral than he? This is not a question of one M.P. being more moral than another. I have to ask him a question. Do I understand him to say that, after all the serious reflection he has given to this subject, he thinks that we ought to have some kind of offensive capability, either in chemical or biological weapons? I ask that as a straight question. I am not in any way sneering.

Sir H. Legge-Bourke

What I am saying is that I think that what Porton has been allowed by way of devising methods of using these ghastly things has been dangerously small, because we cannot fully comprehend in many of these matters how to cope with what will arise unless we know the way these things are sent to us. I hope that it is not too great an over-simplification.

I am not suggesting that we should at once arm the whole of B.A.O.R.—with chemical weapons on every armoured car. What I am saying is that I hope that Porton can be assured of sufficient funds to do what ought to be done to keep the Cabinet and everyone else as fully informed as possible on how this ghastly business could begin. This is what I fear is not adequate at the moment. The need to make it more adequate than I believe it to be is the result of the increasing evidence east of the Iron Curtain that chemical warfare weapons could be used all too easily.

I hope that I have said enough on this subject, which is a pretty beastly one. I remember going on an anti-gas course to Winterbourne Gunner when I was a young officer. A splendid officer came from India to join the course and he did not do very well in the passing-in examination. He was sent for by the chief instructor who said, "Don't you know anything about this subject?" The officer replied, "No. I have just come back from India, and out there we think the whole thing is rather unsporting." We all think it is unsporting, but it is a subject which we must treat seriously in the modern world unless we are to endanger our nation.

My hon. Friend the Member for Salisbury (Mr. Michael Hamilton) and I have kept in close touch since my original visit to Porton. I know the immense amount of trouble he takes to look after the best interests of his constituents. If he wants any support for his constituents in the work they do, he knows that he has a friend in me. I shall do my best to ensure that that side is not forgotten and is not under-nourished through lack of the funds necessary for day-to-day work.

The east of Suez policy decision was taken before the exercise that should have been carried out had been completed at the Defence Operational Analysis Establishment at West Byfleet. The evidence is in the Second Report from the Select Committee on Science and Technology. I asked representatives of the Establishment, in Question 1987: Had you completed this study. on strategic movement … before the decision about east of Suez was made? The answer was: We had completed the study up to 1975. It was very much an examination of our capability with current requirements. We were then going on to consider the post-1975 situation in which a completely new set of equipments was possible, both in terms of aircraft and ships. Before the decision was made the pre-1975 study was available in the Ministry of Defence and had been sent to the Secretary of State before the decision was made. I then asked: In the light of the studies you made of this particular problem, do you feel that had the result of all your studies been known at the time possibly the decision might have been different? Very rightly, the D.O.A.E. witnesses said that 'they could not answer that. I wonder whether the right hon. Member for Leeds, East can answer it. For him to take a decision as big as the decision about troops east of Suez without having completed that study was almost criminal. I am surprised that he is not here.

Whilst I agree that operational analysis must not become the total dictator of policy, it should be used as a means of ensuring that policy decisions are taken on the best scientific evidence available after the most careful consideration has been given to the alternatives. This is what the right hon. Gentleman did not enable the Establishment to complete before he took such an enormously important decision as that of pulling out east of Suez.

We must realise that two factors are involved. The first is that the operation analysis should be completed before big decisions are taken. Secondly, it is important that the operational analysts are made aware that it is no good their thinking that they have indeterminate time in which to work, and that no decisions will be taken unless they are finished. Perhaps that was one of the factors that influenced the right hon. Member for Leeds, East when he was Secretary of State for Defence.

The previous Chief Scientist at the Ministry of Defence took the view that operation analysis has an important part in the whole sphere of defence research and development. But at the same time it should not become the total time dictator or the dictator of total policy. It should be used sensibly and effectively by those responsible and by those who can benefit most. Although we invented this process of analysis, the Americans are must farther ahead than we are; but we are now trying to catch up again.

I was interested in the evidence given by the D.O.A.E. at West Byfleet, because I was able to compare that evidence with what I saw at "think tanks" in the United States. I served on a Subcommittee of the Select Committee with the hon. Member for Bristol, Central (Mr. Palmer) and Brian Parkyn, who was then the hon. Member for Bedford and we had an interesting visit to a number of "think tanks", one of which was run by the Rank Corporation. I agree that one can have too many "think tanks", but they can be of enormous value. I hope that it will ensure that my hon. Friend in his new office will be able to guide defence procurement a great deal better than has been the case in the past

8.57 p.m.

Mr. Michael Hamilton (Salisbury)

I should like to congratulate the members of the Select Committee on Science and Technology. If anyone wonders what M.P.s do with their time, he has only to point to this 575-page Report which we are debating this evening.

I believe that the less technical Members like myself owe a great deal to those on that Committee who devote long hours to these extremely important subjects. I am particularly grateful to my hon. Friend the Member for Isle of Ely (Sir H. Legge-Bourke) who has taken care of the interests of Porton Down. I know of no Member in this House who cares more deeply for the issues of national security than he.

Porton has been in existence for just over half a century. That establishment came into being in the middle of the First War as the result of German gas attacks on the Western Front. The initials C.D.D.E.—and I wish sometimes that we could get away from initials—stand for the Chemical Defence Experimental Establishment, and hard alongside it is its younger sister the M.R.E., the micro-biological research establishment. That establishment saw the light of day in the 1939–45 war. It was a small unit set up by Sir Paul Fildes. He was a talented son of a talented father, Sir Luke Fildes, who painted the portrait of Edward VII that hangs in the corridor and whose able son lives in my constituency and is himself a Royal portrait painter of no less distinction.

Reading the Report, I was impressed by the extremely frank and open way in which the directors of the two Porton establishments answered the questions of the Select Committee. At Porton, it has been possible to hold meetings of international scientists, including representatives from Czechoslovakia and Russia. We have not been able to show them all our files, of course. The world is not yet ready for that. But it has been possible to have meaningful exchanges of views here. Equally, some of our people at Porton have been to reciprocal conferences in Czechoslovakia.

When I first came to represent Salisbury in this House, I confess that I was opposed to the idea of having open days at Porton. I felt that to admit the public and the Press to the place would merely stimulate the controversy which surrounds it, much of it ill-informed. How wrong I was. Open days have been held since then. They have proved to be an unqualified success, and they have served to dispel a host of misconceptions. By the same token, the fact that members of the Select Committee took the trouble to travel to Porton and the fact that we are able to debate their Report equally helps to dispel the mystery and misunderstandings which for far too long have enveloped the establishments at Porton.

Thanks to our colleagues who served on the Select Committee, the House has been able to learn of the dedicated work of the scientific staff thtere, to which my hon. Friend the Member for Isle of Ely paid tribute. I feel that through the pages of this Report, we have been admitted to our own open day at Porton, and I am grateful for that.

No Member of this House who has studied the evidence in the Report can any longer question the vital importance to us of what goes on in the establishments there. So long as world Powers arm themselves with chemicals and bacteriological weapons, so long must Her Majesty's Government give supreme attention to the counter-measures and to protecting our people.

The Select Committee has helped to show that our scientists in their white coats and their air-conditioned laboratoties fulfil every bit as vital a part in our defensive system as the uniformed Services. They also serve, and it is my purpose in intervening briefly in this debate to thank the Select Committee for giving them this recognition.

9.3 p.m.

Mr. James Scott-Hopkins (Derbyshire, West)

My hon. Friend the Member for Isle of Ely (Sir H. Legge-Bourke), my hon. Friend the Member for Salisbury (Mr. Michael Hamilton) and the hon. Member for West Lothian (Mr. Dalyell) all concentrated parts of their speeches on chemical warfare and the research establishments at Porton and elsewhere.

I was a little confused by what my hon. Friend the Member for the Isle of Ely meant exactly in that part of his speech. He raised an interesting point with which I hope that my hon. Friend the Minister of State will deal when he asked under which part of the procurement organisation chemical warfare is to come. My hon. Friend said, quite rightly, that we in this country should concentrate more than we have in the past on means of defending ourselves against attack by chemical warfare. The countries in the Eastern bloc are armed with these weapons, and they could use them against us. We have to know what they are, and we have to be prepared to take counter-measures to protect our civilian population and our military forces. That is the job of the research establishments at Porton and elsewhere.

I understood my hon. Friend to go on to say that not only should we be doing that, and not only should the Cabinet be giving greater attention to it, but that we should also have a capability of second strike with the very weapons with which we are attacked.

If we need a second strike capability in chemical warfare as in nuclear warfare, the question which arises is how it should proceed. Which of the controllers will be responsible for the project? Who will be responsible for its production? At the moment Porton is purely carrying out research and development into the methods of chemical warfare and defence against it. I hope that my hon. Friend will indicate whether it will stay under the Chief Executive who is in charge of all research and development and, should the Cabinet decide to have a second strike capability, as I believe we should, who will be responsible and where will the responsibility for production lie?

This is one of the finest and most logical White Papers I have read for a long time. It needs reading more than once to understand it fully, but, having done so, the work which Mr. Rayner has done and which has been put forward by the Government in the White Paper is worthwhile and of tremendously high value.

The chain of command and the logical definition of responsibility and the line management concept in this procurement organisation is an absolute necessity. Speaking as a soldier in past years, I know only too well the frustrations one had when told that it took seven to 10 years to develop new types of systems and weapons. Then, by the time it took to get into the hands of the services, particularly the Army, it was out of date and often too expensive to manufacture quickly in sufficient quantity. This is in peace-time.

I am sure that this new type of organisation, if it functions efficiently and manages to overcome some of the inherent built-in difficulties, will overcome those problems.

The point about Treasury and political control is valid and important. The Report is a little hazy on how the political control of this organisation will operate. There is a tremendous network of Committees dealing with these very problems. The Report mentions these Committees in paragraphs 97 and 98. I wonder at what stage and where we shall find that the political control is exerted.

The Report suggests that this organisation has to be self-generating; it has to generate its own expertise and keep its own staff within it, although some of them will be going outside and working in the services and the civil industries. It has to be self-generating in its management expertise, apart from scientific expertise. It could become the kind of organisation which takes control of the machine rather than controlled by the political machine which, in our democracy, is the final word.

It is essential to avoid a proliferation of Committees. One welcomes the suggestion in paragraph 98 of the abolition of the Weapons Development Committee, and so on. However, we should avoid a proliferation of either Ministerial or expert committees. Yet at the same time it is essential that political control should be finally and utterly kept, and seen to be kept, in the hands of the Cabinet and those responsible for the policy of the Government of the day.

I turn next to the Treasury. My hon. Friend the Member for the Isle of Ely voiced his misgivings about Treasury control and the frustrating effect that Treasury officials can have in research and development. His misgivings are understandable and I share his distrust. But it is essential that the Treasury be in on the decision-making at every level. After all, the Treasury provides the funds which will be allocated through the chain of command. We do not want to see the Treasury frustrating the aims and objectives of any of the four controllerates—and here my hon. Friend the Minister of State is in a key position—but it is essential for it to be brought along by him not in the day-to-day functioning but in the broad outline of the policy and operation of the new organisation. Otherwise, there may be conflicts with the Treasury. We have seen over the years that, where there is such conflict, it is the Chancellor that wins.

On the whole, I welcome the line of command proposed and the paragraphs devoted in the White Paper to the setting up of the four separate controllerates—land, sea, air, and guided weapons and electronic systems.

I welcome the co-operation—an essential part of any reorganisation—that is to take place between the new procurement organisation and the suppliers once a project has got out of the development stage to production. There must be close liaison between the controllerates and directors of the projects and the suppliers.

I could not agree more with that part of the White Paper which says that future policy must be for the Government to get cash discount from suppliers because they pay their bills promptly, rather than having to work out methods of offset payments, with the lapses of time which have occurred in the past and which have been one of the monstrous aspects to arise in these matters over the years.

Doubt has been expressed about how the new set-up will work. I welcome the suggestion in the White Paper that the personnel of the controllerates should spend a certain amount of time with suppliers. What are the criteria to be on which the director of a project, who will be virtually autonomous once the project has been decided and will be responsible throughout its life, will decide which supplier shall produce the weapon.

I welcome also in principle the proposal that more research and development should be done by the supplying industries rather than by the organisation itself. It should be farmed out more than it is. But this raises the question of security and security screening. How far does my hon. Friend intend this to go? What is his view of farming out? Does he agree in principle with the research and development aspect of weaponry being farmed out rather than being wholly confined to the environs of the organisation itself? Presumably, the suppliers undertaking such research and development will include the cost in the end price. A careful check of costings must be made to see that they do not get out of line.

How will the division be made between the private civilian and the purely military application of these research and development costs? Presumably this R and D will be confined to a few of the major companies, particularly in the electronics industry, for one cannot imagine many of the smaller firms being involved.

I welcome the White Paper and I am glad to hear that Mr. Rayner has been appointed Chief Executive. One is bound to have some reservations about the autonomous controllerates with their own managements and finance down to the project director. They must not become isolated. Great care must be taken to see that there is cross-fertilisation, and the control by the Chief Executive must be overall and continuing to ensure that the new system does not become the master rather than the servant.

I am sure that, on the whole, the Government have taken the right approach. I am pleased that they are going ahead so quickly, so that, from the users' point of view, the Services will benefit. By cutting delay between demand for new weaponry systems and actual delivery for use in the field, the Services are bound to benefit. This delay has been a great drawback in the past. If, by introducing this new system, we can make a cut in this delay, a great improvement in the defence of the nation will result.

9.17 p.m.

Mr. John Wilkinson (Bradford, West)

I am becoming accustomed to finding myself the tail-end Charlie in these debates. It is a station that calls for perhaps greatest precision and accuracy, and I gladly accept the challenge.

I welcome the White Paper and I congratulate my hon. Friend the Minister of State for Defence Procurement on his appearance on the Front Bench. I consider it particularly important that, in his Ministerial functions, he is responsible for overseeing operational requirements, which, in the policy sense, is valuable in taking the workload off my right hon. Friend the Secretary of State. It will also help us at Question Time, when hon. Members who are interested in industrial and military matters will hope to establish a personal rapport with him.

I have certain criticisms to make of the contribution of the hon. Member for Plymouth, Sutton (Dr. David Owen) who, as usual, took the opportunity to swipe at the single Service boards. He said that the White Paper represented a battle lost to the traditionalists and that it was a blow to functionalism in the administration of defence. I disagree with him totally. Paragraph 73 of the White Paper makes the position clear when it says: The procurement organisation must, in our view, be a single entity and research, development and production resources must likewise be treated as a unity within the Ministry of Defence and in relation to the Treasury and the Civil Service Department. In these circumstances, individual Controllers must not, in our view, be liable to such direction from individual Service Boards as to conflict with their task in the procurement organisation or override their responsibilities to the Chief Executive. In fact, their supreme responsibility is made clear. Mr. Rayner was right to stress also that they should liaise fully with the Service boards in helping them to meet their requirements.

I am, however, somewhat apprehensive about the future of the guided weapons and electronic systems controllerate and the responsibility for nuclear weapons. Mr. Rayner expresses the hope that this controllerate might logically pass to the Navy systems controllerate. His argument is that nuclear propulsion and nuclear weapons should go hand in hand. I do not think that, necessarily, it should be assumed at this stage that nuclear weapons should be the sole prerogative of the Navy and that strategic nuclear delivery should be entirely in the Navy's hands. As far as can be foreseen, this is very much an inter-Service responsibility, and I am not sure that that recommendation is entirely a happy one.

As for personnel, everyone welcomes the greater specialisation which Mr. Rayner recommends for those in the procurement career structure. This is admirable, but there are degrees of anomaly also. There will be the difficulty, which is alluded to particularly in paragraph 14, of reconciling the needs of specialisation, and the encouragement of broader managerial qualities at the same time, with the wider considerations of Service careers. I am not entirely certain that the high fliers in the Services will want to be in the procurement business too long, because inevitably they will be out of the main stream of command responsibilities which fit them for the very highest positions in the Services.

That said, I welcome the recommendation that more exchange postings between the procurement organisation and industry should be encouraged, and, above all, that experience in the operational requirements branches in particular should be regarded as a good preparation for management functions in the procurment executive.

I turn to one or two points of detail. It is absolutely right that Rayner should lay such emphasis on reliability and maintainability as being an important assessment of the total cost of a project. Increasingly, with modern aerospace weapon systems in particular, the manufacturers have been making great advances. In my experience, the Jaguar is a classic project of this kind, in which, in terms of reliability and maintainability, immense advances have been made. But while mentioning Jaguar I cannot overlook the question of collaborative projects altogether. Nor does Mr. Rayner, who has a few almost caustic things to say about them. He regards them as one of the aspects which are almost insoluble, because they are not readily responsive to normal commercial criteria. One can understand that. If one studies the Elstub Report one finds his fears and anxieties reinforced. In Elstub there are a number of criticisms of collaborative projects which we should bear in mind. I recall them to the House. The first was on the question of export sales: Export sales are, however, no less important for such projects than if they were undertaken nationally. In other words, there is the temptation to assume that just because we have a large ready-made captive market in a collaborative project, we can overlook export potential. In this regard I emphasise that this new Procurement Executive must look first of all, when it gets going, to the task of selling Jaguar, and later M.R.C.A. to a wider market than, in the first case, the R.A.F. and the French Air Force and Navy—and, in the case of M.R.C.A., to the German, British and Italian Air Forces. In collaborative projects one must look to wider sales than the captive market.

Broadly, I welcome the recommendations of the Rayner Report and the Government's decision to implement them. One last big anxiety is the whole question of interface between the Department of Trade and Industry and the Defence Department and the procurement executive. The fact that the Controller of Air Systems, for example, will have a responsibility also to the Department of Trade and Industry, and that this might ultimately have to be resolved at Ministerial level on the aerospace board, exemplifies that Rayner himself realised that this anxiety could well be real.

I hope that my Ministerial Friend will give me a little more encouragement on this particular aspect. I warmly commend the White Paper.

9.25 p.m.

Mr. Bruce Millan (Glasgow, Craigton)

It is always very useful for the House to have opportunities of discussing matters of Ministerial structure. They do not come very often and it is useful that we have had this opportunity today, although it is a pity that it should be on this day when we know that, for various reasons, the number of hon. Members likely to attend is very small; and that has been our experience. Most of the contributions to the debate today have been directly related to the recommendations of the Select Committee's Report or to the White Paper based on the Rayner Report.

In speaking from this side of the House in winding-up the debate, I will stick closely to these two Reports. I was rather disappointed, therefore, that the hon. Member for the Isle of Ely (Sir H. Legge-Bourke) introduced a number of quite contentious defence matters into the debate. I am not disputing that these are not contentious and very important matters to be debated, but I wonder whether today's debate is the right forum. I was sorry that he criticised my right hon. Friend the Member for Leeds, East (Mr. Healey) for not being present today. This has not been a conspicuously well-attended debate but my right hon. Friend the Member for Dundee, East (Mr. George Thomson), who has taken over defence responsibilities on this side of the House, at some considerable personal inconvenience to himself, attended a major part of the debate. I felt that I should say that in fairness to my right hon. Friend.

We are extremely grateful to the Select Committee for the Report that we had from them. Unfortunately, to some extent it is outdated because it has not been debated in the two years since it was presented to the House. But those hon. Gentlemen who have particularly drawn attention to the educative functions of the Select Committee have put their finger on the value which the Select Committee brings to the House. The recommendations in any particular instance can often be matters of controversy, though not in every report; and sometimes different hon. Members can have different ideas about the worth-whileness of recommendations of any Select Committee. But what a Select Committee does very well for the Members who sit on it and the wider audience it obtains on publication of its Report is to provide a vast mass of information in a form which is not available elsewhere.

This Select Committee is a very good example of that kind of service which a Select Committee gives to the House. I am very sorry that my hon. Friend the Member for Bristol, Central (Mr. Palmer), who was Chairman of the Select Committee, has not been able to attend; as he explained to me, he had a pressing engagement elsewhere. I am sure that we would have looked forward very much to his comments on the Report.

As far as the Procurement Executive is concerned, I do not propose to add a great deal to what was said by my hon. Friend the Member for Plymouth, Sutton (Dr. David Owen). He spoke with very recent experience of the Ministry of Defence. I spent rather less than 18 months there, but that was between 1964 and 1966, and I imagine that if the change of pace that was going on then has continued at anything like the same rate until the present time, my own experience of that Ministry must be very much out of date.

I feel—I hope without sounding patronising—that the Rayner Committee Report, in most of its ideas about reorganisation, was very sensible; and there were some particular aspects of reorganisation of the system, such as the greater emphasis on project management, which I would very enthusiastically support. But, of course, there are still awkwardnesses and there are still difficulties in the organisation. I agree very much with what my hon. Friend the Member for Sutton said about the relationship of the Service Board, because what has happened here is quite contrary to the central thinking of the Rayner Committee Report; and there is no doubt that this represents a weakness in the new organisation which the general principles of the organisation were meant to avoid. There is a number of other difficulties of organisation, particularly the relationship with the Department of Trade and Industry, about which I hope to say more a little later.

The important point I want to make about the reorganisation is that it will have to be judged in the last analysis by the results that it produces. None of us can be absolutely sure that any organisation in such a complicated field will inevitably give us the results that we set out to achieve. We must remind ourselves of what those objectives are, because we are dealing with a sphere of activity that costs a considerable sum of money. The Procurement Executive is not concerned only with defence research and development but with the whole field of procurement beyond that, so that the total annual expenditure is about £1,000 million. The number of qualified scientists and engineers engaged is very substantial and represents a significant proportion of the total stock of qualified scientists and engineers available in the United Kingdom. Therefore, value for money in the widest context must be one of the objectives of the new Procurement Executive.

That raises a whole number of different issues that were dealt with today in varying degrees of detail, such as the whole selection process, the way in which projects are chosen, the point at which a definite decision is taken to go ahead with a project, and the point at which refinements or improvements to a project are frozen so that there is no additional expenditure on them, in some cases wasteful. All these matters will be very much the concern of the new Procurement Executive.

I thought that some of the criticisms in the Select Committee Report about the then Ministry of Defence system, of D.R.C., O.R.C. and W.T.C., were, in my limited experience rather exaggerated, because what I thought was an extremely complicated organisation in practice worked a good deal better than one would have expected. Nevertheless, I would not try to defend that system against all others. I believe that the new arrangements outlined in the Rayner Report and the White Paper give opportunities for improving the system of Committees in the Ministry of Defence very considerably. Many of these matters can be more effectively handled, but matters have improved considerably in the Ministry of Defence over the last five or six years.

The Report also raises the question of the rationalisation of the research establishments. It is always as well to remind ourselves of what the Secretary of State said in giving evidence to the Select Committee, that unless there was a positive defence objective for any particular research establishment it was not worth keeping. It was not a question of keeping a defence establishment because there might be industrial spin-off. That is a very important incidental advantage for the nation, but from the defence point of view the important point was to produce a definite and worth-while defence objective, and I agree absolutely with that. It has certain implications for the civil aerospace industry to which I shall come later. We shall have to see what the new Procurement Executive does in the rationalisation of defence establishments.

Similarly, the whole question of relations with industry is dealt with in the White Paper in a way with which hon. Gentlemen would agree. Nothing there is very original. I am not being critical, but similar criticisms of the present system have been made many times before. They were made in evidence to the Select Committee and by the Select Committee. The important thing now is to see whether the new organisation will manage to eliminate rather more successfully than anything we have had so far the various deficiencies which all of us, even those with a most limited experience, know to exist. My view is that the ideas on which the new Defence Procurement Executive is based seem genuinely and generally very sensible. One wishes it well in the important duties it is to take on.

On the question of civil aerospace, I must take a much more critical view of the Rayner Report. The Report is extremely well drafted, but when it deals with this question there is a rather significant deficiency in the order in which it deals with the relative questions of policy and technical and managerial responsibilities in Government. In paragraphs 115 to 118, the technical and managerial responsibilities are taken first and policy second. In my view, that is a significant deficiency which is not just a question of drafting. I agree almost absolutely with the analysis of the problem in paragraphs 117 and 118—the question of where policy responsibility should lie.

The point is made that, for the aerospace industries, … the prime responsibility of the Defence Secretary is to provide the most effective defen;e capability possible within the defence budget. Wider considerations naturally interest him incidentally and the comment is made that … Government policy towards the aerospace industries should be, and be seen to be, an integral part of Government policy towards industry generally. The point is also made … that where the defence interest requires that a particular degree or kind of capability should be maintained … this should be clearly identifiable. This will only happen naturally, and the costs be borne on the defence budget where they belong, if the responsibility for sponsoring the aerospace industries lies outside the Ministry of Defence. I agree with that analysis, and the conclusion is that the responsibility for the aerospace industries should pass to the Department of Trade and Industry. It is a sensible conclusion for another important reason—that the Ministry of Defence does not want to have responsibility for the aerospace industries as a whole. That is the last thing it wants.

I agree with the analysis of technical and managerial responsibility in paragraph 115, which shows that it is not possible to divide aerospace technology between civil and military applications from the management point of view. One need not elaborate that view, since it is well set out in paragraph 115.

But the conclusions of the Rayner Report, following its good analysis, were not the conclusions of the Rayner Committee at all. The Committee was told in its terms of reference, as it makes clear, that the organisation for managing aerospace industries in civil and military applications should go to the Ministry of Defence. This was not the conclusion which it argued; it was given within these terms of reference. Maybe there are good arguments for it, but it was not argued out in the Rayner Report because the Government made the decision before the Committee was established and incorporated the decision in the Committee's terms of reference.

We have to ask whether the decision is right. I know, if only from my limited experience at the Ministry of Defence, the considerable dissatisfacton within that Ministry at the arrangement whereby the old Ministry of Technology and the Ministry of Aviation, as it was in my day, dealt with the management of the aerospace programme, where both policy and management were within an outside Ministry.

It is important to identify why we had that dissatisfaction. First of all, it was mainly on policy matters rather than on management. The Ministry of Defence used to feel, and I think still feels, that it was bearing some of the financial and other burdens of the sponsorship of the aerospace industry which was the responsibility of a Ministry other than the Ministry of Defence. The policy under the White Paper still remains with an outside Ministry, the Department of Trade and Industry. So far I do not see, if the policy considerations remain the same, that the Ministry of Defence is any better from the policy point of view under this arrangement than under the old arrangement.

I believe that the policy will change and that there will be a greater defence orientation in the policy. That will be inevitable because the hand of the Ministry of Defence in this organisation is very much strengthened as against the hand of the Department of Trade and Industry. I do not think that, taking the aerospace industry as a whole, this is a change which I would welcome.

The second cause of dissatisfaction within the Ministry of Defence was to do with the management of the programme. The solution in the Rayner Report, with respect, simply transfers the problem elsewhere. The problem at the moment is with the Ministry of Defence and under this arrangement, on the civil aerospace side, it simply becomes the problem of the Department of Trade and Industry. The Rayner Report and the Government see the danger of that because the Report recommends, from paragraph 122 onwards, certain safeguards which it feels will allow the Department of Trade and Industry adequately to discharge the duties which it has for policy towards that industry.

It might seem, therefore, that if we were simply transferring a problem from one Ministry to another it would balance out and from the point of view of Government organisation there would be neither a great deal gained nor a great deal lost. That is not true, and what we lose under this organisation is a separation of policy and management. This is put in the Rayner Report, and I gather the Government take the same view, as being a positive advantage.

It may be that in business sometimes it is a positive advantage to have this kind of separation. It is certainly not within my experience within government that if one separates at governmental, ministerial level, responsibility for policy and management, one gets a satisfactory solution. What will inevitably happen is that there will be a weakening of the Department's responsibility for policy and a strengthening of the Department's responsibility for management. I see nothing in the arrangements recommended in the Rayner Report, nothing in the staffing arrangements, nothing in the Ministerial Aerospace Board—to which, incidentally, I attach a good deal less importance than many outside commentators have done—that will overcome the problem of the Department of Trade and Industry being weakened in this organisation and the Ministry of Defence being very much strengthened.

It was symptomatic of this that the Minister in his opening speech did not even mention these problems. He dealt exclusively with defence considerations and said nothing about this from the point of view of the Department of Trade and Industry. I hope that these consequences will not happen, because they would be very bad for the aerospace industry.

Obviously we will look at the Procurement Executive and see how it works in practice. Personally I feel quite strongly that there are considerable dangers in the solution which the Government have adopted following the Rayner Report. This solution, if it means the strengthening of the Secretary of State for Defence as against his Ministerial colleague in the Department of Trade and Industry, will be damaging in a number of other ways, for example, relationships with industry and the balance between intra-mural and extra-mural expenditure, on which there is a good deal of common ground between hon. Members on both sides of the House as there was among the members of the Select Committee on Science and Technology.

To sum up, there are many parts of the Rayner Report which I unreservedly welcome. There are many other parts where the arguments are strong for the organisation which is being adopted and where one hopes the organisation will work well in practice. But there are other parts—and the relationship to the civil aerospace industry is predominantly one of these—where one must have certain apprehension about what is likely to happen under these new arrangements. One hopes that these apprehensions will not be borne out in the event, but one rather feels that they will.

9.45 p.m.

Mr. Ian Gilmour

As the hon. Member for Glasgow, Craigton (Mr. Millan) has said, this has been a useful debate although, as my hon. Friend the Member for Isle of Ely (Sir H. Legge-Bourke) said, we have had a fairly select gathering and this is disappointing. A number of contentious matters have been raised, and I do not want to enter the dispute between the hon. Member for West Lothian (Mr. Dalyell) and the other members of the Select Committee about the quality of the Report. I disagree with what was said about the writing of the Report. It is not like a novel but, as an official document, it is abnormally well written. If my hon. Friend the Member for Isle of Ely will forgive me, I will not enter into his vehement controversy with the Treasury. He has expressed his views strongly, and no doubt these will be noted.

As the hon. Member for Craigton complained that I had not mentioned the Department of Trade and Industry in my opening remarks, perhaps I should turn straight away to the points he made. I understood him to say that the case for putting the management of the aerospace industry under the Ministry of Defence was not argued in the Rayner Report but merely stated. If he will look at paragraph 115, he will see that is not so. The Report says that the civil and military side are very closely connected, and goes on

"… there is a substantial body of staff engaged on work that is simultaneously of significance to civil and military interests, and a further substantial section which moves from defence to civil work and back again in accordance with the fluctuating demands of the total Government programme. It would therefore be impracticable to segregate Government staff into two distinct elements, and uneconomic and otherwise undesirable to provide two independent and self-sufficient staffs."

Mr. Millan

I agree absolutely with all that, but that could be an argument for putting it, as it is, in the Department of Trade and Industry. The last sentence of the paragraph reads: Under our terms of reference this organisation can only be under the Secretary of State for Defence. That is what I was complaining about.

Mr. Gilmour

If the hon. Gentleman agrees with the rest of the Rayner Report, as I think he does, it follows that civil aviation must be where it is, otherwise we should go back to two Ministries, and the Rayner Report shows that two Ministries are impracticable. It therefore follows inexorably that the civil aerospace industry has to be where we have placed it. However, I appreciate that fears exist about this matter, as my hon. Friend the Member for Bradford, West (Mr. Wilkinson) explained.

My right hon. and noble Friend the Secretary of State for Defence alluded to this point in the other place when he made it clear that when the interests of defence and policy for the aerospace industry do not coincide, the issue would go to the Aerospace Board. I assure the hon. Gentleman that there is no idea in the Ministry of Defence of in any way trying to "do down", belittle or cripple the work of the civil aviation side of aerospace.

Many of the speeches in this debate, particularly those by my hon. Friends the Members for Abingdon (Mr. Neave) and Plymouth, Sutton (Dr. Owen) mentioned research and development reorganisation. The hon. Member for Sutton said that he did not like the word "shrinkage". I agree with him, and I think that it is a word that should not be used. We will now have the great advantage that for the first time all these research establishments will be brought together under a single management, which will be of enormous benefit in seeing that they are adequately organised and equipped to do all the tasks that are required of them. One of the priority tasks of that management will be to prepare a plan of rationalisation.

My hon. Friend the Member for Abingdon and my hon. Friend the Member for Derbyshire, West (Mr. Scott-Hopkins), and also the hon. Gentleman the Member for Sutton, talked about the right balance between extra-mural and intramural work. This is an extremely complicated problem. The R. and D. establishments are an enormous national asset and contain a concentration of expertise and facilities which are the envy of a great many other countries; they have pioneered the development of hardware and techniques which probably could not have been developed by any single industrial group. These advantages would not have been gained if the establishments had not existed as strong, independent institutions.

The Select Committee, Mr. Rayner, and the right hon. Member for Bristol, South-East (Mr. Benn), have commented that some of the establishments have played too great a part and industry too little. There undoubtedly is a danger that industry will not do the work if the Government do it for them, and firms that lean too heavily on Government will have an inadequate research and design base. We will have to take all these factors into consideration in order to get the best rationalisation that we can. The end result is likely to be a saving in manpower; but, as the Rayner Report makes clear, the primary object of any changes will be to get the organisation right. Economies will be the consequence rather than the aim and object of the exercise.

My hon. Friend the Member for Abingdon spoke of the relations with industry, and he is absolutely right when he says that there should be close consultation. We are not complacent about this matter. I agree that improvements can be made. There are frequent contacts with industry at all levels and the establishment of the National Defence Industries Council has given a formal channel at the higher level for these consultations.

My hon. Friend also asked me about A.W.R.E. The position is not quite as he stated it. It is said in paragraph 11 of the White Paper The recommendation that responsibility for the Atomic Weapons Research Establishment should be transferred from the United Kingdom Atomic Energy Authority to the Secretary of State for Defence will be examined further in consultation with the Authority, with a view to seeing how best its functions can be rationalised with those of the other Defence Research and Development establishments. I can certainly assure my hon. Friend that anything suggested will take place in full consultation with the Department of Trade and Industry.

My hon. Friend the Member for Isle of Ely gave the staff at Porton very high praise, which we all know that it deserves. My hon. Friends the Members for Salisbury (Mr. Michael Hamilton) and Derbyshire, West also paid their tributes to the staff. I agree with my hon. Friend the Member for Isle of Ely that for the present, at least, it is better that this establishment should be under the Ministry of Defence and not under the Department of Health and Social Security. The defence interest is very great. Nevertheless, this matter is looked at regularly and will be kept under review.

In answer to my hon. Friend the Member for Derbyshire, West, the establishment comes under the Ministry of Defence as a whole in the general policy that it pursues, but, of course, it will be managed by the Procurement Executive.

As my hon. Friend the Member for Isle of Ely said, it has been the policy not only of the last Government but also of previous Governments not to have an offensive potential in chemical warfare. We review that policy periodically, but we have not considered it necessary to make a change. We do not see deterrence being based on the need to match every single potential enemy weapon by a similar weapon. But I assure my hon. Friend that the establishment at Porton is of the necessary strength to give the Cabinet the information which he thought that they ought to have. The establishment will continue to be kept at that strength.

The hon. Member for West Lothian asked whether we had abandoned operational analysis. My hon. Friend also stressed the importance of it. The answer is that we have not abandoned it. The review mentioned in the last Government's White Paper (Cmnd. 4236) is a continuous one. I assure the hon. Gentleman that it is still taking place.

I was pleased to hear that the general proposals in the Rayner Report had the support of both Front Bench spokesmen opposite. I agree with the hon. Member for Sutton that we want a period of stability now. I hope that this will come. The hon. Gentleman asked about appointments. I can tell him that the emphasis of the organisation will be on professionalism and expertise. He asked whether the Service controllers were always to be Service men. I can give no undertaking about that, but, in the nature of things, for some time to come they are almost bound to be Service men.

I think that the hon. Gentleman misunderstood the relationship between the Service controllers and the Service Boards. The whole point of the Procurement Executive is that it is user-orientated. It is not giving the Services what the Procurement Executive thinks that they should have. We believe that it is the best way of giving the Services what they want.

The hon. Gentleman then got on his usual hobby horse about it being wrong to have single Service Ministers and Service Boards. However, it is greatly to the convenience of the Services to have single Ministers so that this House, the public and the Services know who is responsible for them, under the Secretary of State. If single Service Ministers led to disruption in the hon. Gentleman's day, I can assure him that they do not under this Government.

Question put and agreed to.

Resolved, That this House takes note of the Second Report of the Select Committee on Science and Technology, Session 1968–69, on Defence Research (House of Commons Paper No 213), and of the White Paper, Government organisation for Defence Procurement and Civil Aerospace (Command Paper No. 4641).