Commons Sitting of 28 November 1983

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
Oral Answers to Questions
  ENERGY

    Alternative Sources of Energy
    Mr. Chapmanasked the Secretary of State for Energy what major research projects into alternative sources of energy are presently being undertaken through financial resources made available by the Government both in the United Kingdom and as part of any United Kingdom contribution to the European Community.
    The Minister of State, Department of Energy (Mr. Alick Buchanan-Smith): The United Kingdom, both on its own behalf and as part of the Community programmes, supports a wide range of research projects into alternative sources of energy. Currently the largest expenditure is on the joint European Torus work at Culham, the geothermal experiments in Cornwall and the Orkney windmill.
    Mr. Chapman: I thank my right hon. Friend for that information and recognise the significant increases in grants that the Government have made for research into alternative forms of energy. Will my right hon. Friend assure the House that there is no duplication of research work undertaken by different members of the European Community? Does he agree that it is essential that the most effective use is made of the grants available, by ensuring close co-ordination between member Governments?
    Mr. Buchanan-Smith: I cannot guarantee that there is no duplication, but I agree with my hon. Friend that this is an appropriate matter for co-ordination throughout the Community. I hope my hon. Friend will be encouraged by the fact that the results of all research work supported by the Community are available to member countries. Therefore, we benefit from what happens in other countries.
    Mr. Orme: Will the Minister give the figure of proposed Government expenditure and break it down into solar, wind and other forms of alternative energy sources?
    Mr. Buchanan-Smith: Yes. The money that we are spending on alternative and renewable sources of energy amounts to £12 million a year and is increasing. It is now four times more than was spent by the Labour Government.

    National Coal Board (New Enterprises)
    Mr. Marlowasked the Secretary of State for Energy whether he will reorganise the National Coal
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    Board in such a way as to permit workers in different geographical areas to acquire shares in their respective newly formed enterprises.
    The Under-Secretary of State for Energy (Mr. Giles Shaw): I am always willing to consider any ideas that give miners a participation in the fortunes of the industry in which they work.
    Mr. Marlow: Would my hon. Friend be in favour eventually of a system of miners' co-operatives with access to private capital? If so, could he get the support of Mr. Arthur Scargill? If not, would that be helpful?
    Mr. Shaw: The National Union of Mineworkers has not so far expressed much interest. I am aware of the report of my hon. Friend's working party, which recommended that loss-making pits should be handed over free of charge. However, that has not resulted in much support.
    Mr. Mason: Will the Minister assure the coalmining industry that he has no intention of embarking on privatisation of the National Coal Board's operations, especially deep-mined coal output? Secondly, will he discourage the National Coal Board from devolving its regions into regional commercial economic entities?
    Mr. Shaw: I can give the right hon. Gentleman the first assurance for which he asks. The Government have no plans for the privatisation of deep-mined coal. My right hon. Friend the Prime Minister made it clear during Question Time recently that privatisation within The coal industry would primarily involve the disposal of ancillary industries.
    The second question is a matter for the NCB, but there are discussions within the board about structural reorganisation.
    Mr. Skeet: My hon. Friend will recollect that mines with fewer than 30 workers already exist in the private sector. Will he consider extending the number to 100 workers?
    Mr. Shaw: My hon. Friend is right to remind the House that there is a thriving small private sector, producing about 1 million tonnes of coal, but he will recall that the Monopolies and Mergers Commission's recommendations about that are being considered.

    Gas Bills (Payment)
    Mr. Fisherasked the Secretary of State for Energy how many consumers are paying their accounts to regional gas boards by means of pan-payment arrangements.
    Mr. Buchanan-Smith: I am advised by the British Gas Corporation that the number of customers who have special arrangements for payment through the corporation's budget and other schemes is just over 2 million.
    Mr. Fisher: Does the Minister not consider that a very large total? Does he accept that the reason is that people cannot afford gas at present prices? Therefore, will he reconsider the proposed January increase in price, which is bound to threaten those on low incomes, the sick and the elderly, and may in a hard winter put some people's lives at risk from hypothermia?
    Mr. Buchanan-Smith: Apparently the hon. Gentleman did not listen to my reply. The budget and other schemes, which cover a whole series of arrangements for

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    payment, are for the convenience of customers and are welcomed by them. As for any hardship, I hope that the hon. Gentleman will welcome the fact that the Government this year will pay out £350 million to help consumers with gas and electricity costs.
    Mr. Kenneth Carlisle: Does my right hon. Friend accept that the reform which really helps the small consumer, was initiated in the last Parliament, under which the standing charge will never be more than half the total bill? Does he agree that it will help the elderly especially?
    Mr. Buchanan-Smith: I am grateful to my hon. Friend. The decision of the British Gas Corporation and most of the area electricity boards was to make the standing charge no more than 50 per cent. of smaller bills. That was at the initiative of the Government, and it has generally been welcomed.
    Mr. Hannam: How many gas disconnections were there in 1982–83 compared with the preceding year?
    Mr. Buchanan-Smith: I am afraid that I cannot supply that information without notice.
    Mr. Rowlands: In view of the impending large increase in gas prices in January and the imposition of a £550 million gas levy every year, which is also passed on to the consumer, how many more people will need special assistance next year with their fuel bills?
    Mr. Buchanan-Smith: There is a later question about fuel prices. The amount of help that the Government are giving to the less well off—I mentioned the sum—means that more than 2·25 million consumers benefit, and it is greatly appreciated by them.

    China (Ministerial Visit)
    Mr. Adleyasked the Secretary of State for Energy if he will make a statement on his recent visit to China.
    The Secretary of State for Energy (Mr. Peter Walker): My visit to China was in response to an urgent invitation from the Chinese Minister of Petroleum during his visit to this country in September.
    I was able to assess at first hand the important opportunities for United Kingdom companies to compete for business in China, in the offshore supplies industry, the coal machinery industry, the electrical power industry, the gas industry, and industries involved in energy efficiency.
    Mr. Adley: I thank my right hon. Friend for that reply and congratulate him on what was obviously a most beneficial visit. Does he agree that, in addition to the advantages for Britain and China, the technology, transportation and financial services skills available in Hong Kong should also benefit that territory from the arrangements that he has announced today?
    Mr. Walker: There is no doubt that the magnitude of energy developments in China is substantial. It is likely that the offshore oilfield, which is in the discovery stage, will be as big as the total discoveries in the North sea. The plans of the Chinese for increasing the size of their coal industry mean that eventually it will be six times the size of the British coal industry. Likewise there are big investment programmes in gas and power stations. It is obvious that the commercial skills and the many connections of Hong Kong will play an active role in all these developments.
    Mr. Douglas: Will the right hon. Gentleman concede that, notwithstanding the important overtures that he has been making in China about offshore engineering activities, it would reflect much better on our export potential there if we could ensure the delivery and prospective construction of rigs such as the one in Scott Lithgow at present?
    Mr. Walker: The important feature of any developments in the offshore industry is that contracts are competitive in cost terms compared with other nations and that delivery should be on time. That is what the Chinese will be looking for with any orders that they place.
    Mr. Orme: This may have been a fruitful visit by the Secretary of State, but he was absent when the Cabinet decided to increase gas and electricity prices. How did the consultation take place? Did the right hon. Gentleman agree with the increases before he went? The House is entitled to be told.
    Mr. Walker: I look forward to answering a later question on gas and electricity prices. I am interested to hear the right hon. Gentleman's report of what happened in the Cabinet, which is rather different from the minutes of the meeting.

    Combined Heat and Power (Report)
    Mr. Rostasked the Secretary of State for Energy when he expects to respond to the third report of the Energy Committee, H.C. 314, 1982–83, on combined heat and power.
    Mr. Buchanan-Smith: Assessment of this report is almost complete, and my right hon. Friend hopes to respond as soon as possible.
    Mr. Rost: As my right hon. Friend will be aware, a number of the most promising urban areas, such as Sheffield, London and Tyneside, are anxious to proceed with full feasibility studies so that they can prove the cost effectiveness of providing cheap heat and overcome fuel poverty. Will my right hon. Friend not just speed up the assessment of the report, but give guidance to those local authorities and private enterprise industries which want to go into partnership with local authorities and the electricity supply industry on how the financing and the institutional structure can be organised?
    Mr. Buchanan-Smith: This is a very important matter, in which the Government are extremely interested. We have had a study carried out by W. S. Atkins, which looked into the use of these schemes in cities, and so on. We are studying the report of that consultancy as well. It is sensible to look at the two together. As soon as we have completed our study of them, we shall make the announcements.

    Energy Prices
    Mr. Strawasked the Secretary of State for Energy what representations he has received in respect of the increase in gas and electricity prices.
    Mr. Hal Millerasked the Secretary of State for Energy what representations he has received from the gas and electricity industries about the future level of prices.
    Mr. Maddenasked the Secretary of State for Energy what representations he has received in the past six months urging that the price of gas and electricity be increased.
    Mr. Dykesasked the Secretary of State for Energy if he has replied to the letter sent by the chairman of the National Gas Consumers Council to hon. Members of this House on 10 November concerning future gas price increases.
    Mr. Peter Walker: I regularly receive representations on gas and electricity prices. The gas and electricity industries will announce any increases in the normal way.
    I have arranged for my reply to the chairman of the National Gas Consumers Council to be placed in the Official Report.
    Mr. Straw: Since the Secretary of State is no amateur in self-publicity—[Interruption.] I say that as a compliment—may we take it as rather more than a coincidence that the right hon. Gentleman has remained as silent as a Trappist monk since the announcement of fuel price increases was made by the Chancellor of the Exchequer? Leaving aside what happened in the Cabinet, will the right hon. Gentleman take this opportunity to express what we are told by the Lobby is his private view, namely, that he wholly disagrees with the change; or is his silence explained by the fact that he cannot quite find the superlatives to reflect his respect and admiration for the Chancellor of the Exchequer?
    Mr. Walker: I thank the hon. Gentleman for that rather wandering supplementary question. Gas and electricity prices will be decided and announced by the industries. The Government have no powers to fix gas and electricity prices. I suggest that the hon. Gentleman waits to see what the gas and electricity industries finally decide. Perhaps it was different during the period in office of the last Labour Government, when gas prices for the industrial user went up by 288 per cent. and for the domestic user by 73 per cent.
    Mr. Miller: Does my right hon. Friend agree that it makes neither economic nor political sense for the Opposition to talk of electricity price increases when the economy demands that a state monopoly should become more efficient, which is what its managers are trying to do? It makes no political sense to try to put the wind up pensioners before Christmas about increases which are not being imposed.
    Mr. Walker: It is unlikely that any increases of any description will be imposed this year. That will mean that we will have had a 21-month freeze on electricity prices and a 15-month freeze on gas prices. That compares very favourably with what happened under Labour Governments.
    Mr. Madden: Will the Secretary of State confirm that neither the gas industry nor the electricity industry is pressing for increases? Does he understand that many people, especially pensioners, have to choose between heating and eating each day? Does he also appreciate that there is no reason why such people should be the victims of the Government's economic incompetence, which is compelling industries to introduce fuel taxes?
    Mr. Walker: The Government's alleged incompetence is as nothing compared with the incompetence of the hon.
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    Gentleman's supplementary question. In reality, the British Gas Corporation is pressing for price increases. It has suggested that they should be introduced, under no pressure from the Government. Before the hon. Gentleman makes allegations of that kind, he should try to discover the facts.
    Mr. Dykes: Does my right hon. Friend agree that we do not need sanctimonious lectures from the Opposition about gas prices policy, in view of their record? Bearing in mind all future priorities, including the long-term investment programme and the fact that the Treasury take from the gas levy last year was, I think, £523 million, what does he think would be a fair figure for the levy over the next few years?
    Mr. Walker: I shall not make a prediction without knowing the world conditions of prices and the finds from the North sea. We must consider the returns on capital of the two nationalised industries and their performance in keeping down prices recently. As I very much doubt that any increase in the foreseeable future will be as much as the increase in inflation in general, it can be said that industry and domestic users are benefiting to that extent at present.
    Mr. Wilson: Does the Secretary of State realise that the fuel tax increases proposed for next year will attack most heavily the sick, the unemployed, the elderly, and particularly people in those categories who live in areas such as Scotland, where it costs much more to heat houses? What proposals does the right hon. Gentleman have to ease the problems of those people?
    Mr. Walker: I thank the hon. Gentleman for giving me the opportunity to point out that, since the Government came to power, assistance to people in the categories that he mentions has increased three and a half fold. Moreover, the additions to help for those people has increased 40 per cent. more than inflation and energy prices.
    Mr. McCrindle: I accept what my right hon. Friend has just said, but does he agree that one of the main burdens of pensioners and people on low incomes and social benefits is the relationship between standing charges on gas and electricity accounts and the amount of gas and electricity actually consumed? Will my right hon. Friend take the opportunity of any proposal to increase the cost of fuels to talk to the undertakings to see whether a fairer relationship can be created so that people who economise actually save on their bills?
    Mr. Walker: I understand my hon. Friend's view. I believe I am correct in saying that the British Gas Corporation, in any price increase that it may be contemplating, is considering making the standing charge a lower proportion of the total cost.
    Mr. Orme: May we assume from the right hon. Gentleman's reply that if the chairmen of the corporation and the electricity supply authority refuse to put up prices the Government will do nothing, because it appears from his answer that the decision is now for them? Does he agree that if the levy were removed there would be no need for any increase in gas prices? Will the Secretary of State say what effect on employment these increases will have in some of the major industries that use up to 40 per cent. of their costs on energy?
    Mr. Walker: I categorically repeat that the statutory power on prices is totally with the nationalised industries

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    and that the Government have no such powers. In answer to what the right hon. Gentleman said about loss of jobs, may I point out that, under the Conservative Government, the industrial price of gas has gone up by 89 per cent., whereas the Labour Government put it up by 288 per cent. Did the Labour Government think about jobs then?
    Following is the information:
    Miss S. P. Black
    Chairman
    National Gas Consumers' Council
    5th Floor: Estate House
    130 Jermyn Street
    London SW1Y 4UJ 22 November 1983
    Miss Black
    You wrote to me on 10 November about press reports that gas prices might rise more than the British Gas Corporation considered necessary.
    These stories were misleading. Pricing decisions are a matter for the industry, in the light of its costs and financial constraints. The Government has no powers to impose price increases on the industry. I understand that the Corporation have not yet taken any final decisions about next year's price, and that they are presently in the process of consulting you about their proposals. I would expect any price rise which results to be within the rate of inflation.
    Prices to the domestic consumer have not risen since October 1982. After allowing for inflation the price of gas to the home is still about the same as it was in 1970. Gas is still the cheapest fuel for most consumers and United Kingdom prices are still amongst the lowest in Europe. The Corporation have made clear their view that a modest increase is necessary to reflect rising costs, particularly the cost of new gas supplies, which are rising much faster than inflation. We must avoid a return to the situation under the last Labour Government where artificial holding down of prices led to the Corporation making losses on sales of gas to the home. The Government supports the case for a steady and consistent approach to pricing in order to avoid the need for large catching up increases of the kind which no-one likes, but which have been necessary in recent years.
    You also mentioned the gas levy and the sale of the Corporation's oil assets. There has been much misunderstanding of the purpose of the levy. The position is simply that BGC will continue to purchase some gas from early North Sea discoveries, which are exempt from Petroleum Revenue Tax (PRT), at well below its current market value. If the Government had taken no action the Corporation would, as a result, have made large excess profits. The Government therefore decided to introduce a levy to transfer this windfall from British Gas to the nation as a whole, in much the same way as PRT does for oil and newer gas supplies. The levy has had, as the Government promised when introducing it, no effect on prices, since BGC's financial target was reduced specifically to take account of the effect of the levy on BGC's profits.
    Nor is there any reason to believe that the sale of the Corporation's oil assets will lead to an increase in gas prices. Gas prices would only be affected if BGC would otherwise have used profits from oil operations to finance its gas operations. Such cross-subsidisation would have been quite wrong both from an economic and commercial point of view. The extraordinary provision which BGC made in their 1982/83 Accounts to cover the disposal of the oil assets is merely an accounting device to write the assets out of the Corporation's books. It is not in any real sense a "cost" borne by gas consumers, and is marginal when set against the Corporation's retained profits of over £1·5 billion.
    Finally, may I say that I agree with everything you say about the importance of maintaining incentives for the industry to increase its efficiency. We are working closely with the Corporation to follow up the Deloitte's Report, and I hope soon to be able to announce that agreement has been reached with the industry on a new Performance Objective which will build on their previous successes in cutting costs.
    Peter Walker
    Mr. Skeetasked the Secretary of State for Energy what is the Government's policy on energy pricing.
    Mr. Greenwayasked the Secretary of State for Energy by what amount he expects gas and electricity prices to rise over the next two years; and if he will make a statement.
    Mr. Peter Walker: In those areas such as electricity and gas, where there is a monopoly supplier, the Government consider that prices should reflect the cost of producing the energy and the need to achieve an adequate return on capital. Gas and electricity prices are determined by the industries concerned. I believe that gas and electricity prices will rise by less than the rate of inflation over the next two years.
    Mr. Skeet: Will my right hon. Friend bear in mind that some industries, such as chemicals, steel, paper and the metallurgical industries, will suffer heavily from increases? Will he therefore exempt them from the increases? Will he further bear in mind that chlorine producers in the United Kingdom have to pay twice as much for electricity as is paid by producers in France and that that will ulitmately mean that many chemical interests will have to transfer to France?
    Mr. Walker: Many negotiations have taken place on this matter with the heavy users over the past six to nine months. Arrangements and new facilities have been made available, which I think have been of considerable benefit. I have had expressions of gratitude from some of the heavy users. France has, of course, an overall advantage in electricity prices, because it has a much larger nuclear contribution to its electricity supply, which is cheaper.
    Mr. Greenway: I welcome my right hon. Friend's assurance that energy prices are likely to rise by less than the rate of inflation over the next two years. Will he give the comparative figures for the rise in domestic electricity prices under both this Government and the last Labour Government?
    Mr. Walker: Under this Government domestic electricity prices have risen by 81 per cent. Under the previous Labour Government they went up by 170 per cent.
    Mr. Wrigglesworth: In view of the real fear and misery among lower paid people when there is speculation about an increase in energy prices, will the Secretary of State stop looking backwards over the record of the Labour Government and of the present Government and look to the future? Will he look, in particular, at the first three months of next year, when the cold weather will hit the energy bills of the old and the low-paid particularly hard? Will he say when energy prices will be increased, and whether they can be delayed until after the likely period of cold weather?
    Mr. Walker: I understand the hon. Gentleman's reluctance to look back to the period of Government that made him leave the Labour party. I do not share his reluctance. The Government recently announced that heating allowances would be increased by 8 per cent., and that is well above any of the suggested price increases of either utility.
    Mr. Beaumont-Dark: Does my right hon. Friend nevertheless agree that one of the great problems, particularly in foundaries and in industries which are big users of electricity and gas, is that our prices seem to be

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    rather higher than those of our competitors? Does my right hon. Friend agree that we must keep in line if we are to compete in this difficult world?
    Mr. Walker: I agree, but I should point out that recently our prices have not increased as fast as those of our competitors. In a number of European countries the increases have been much greater than in this country. We have had a freeze for about 21 months in one industry and 15 months in the other, with no prospect of increases other than below the rate of inflation.
    Mr. Norman Atkinson: The Secretary of State has reiterated for the second time that the Government have no jurisdiction over electricity and gas prices. Why has he said today for the second time that the British Gas Corporation is now pressing him for an increase? Who is it pressing, and why, if the Secretary of State has no jurisdiction?
    Mr. Walker: I did not mean that it was pressing. I knew that BGC was interested in obtaining an increase. It will announce it when it wishes to do so.
    Mr. Wallace: As the Secretary of State attributed cheaper energy prices in France to the use of nuclear power there, can he explain why energy costs in Scotland are higher than in France, although Scotland has a higher contribution of nuclear power? Is it not a contradiction of Government economic policy that, to make industry more efficient and in an effort to make industry more competitive, the Government have apparently made industry less competitive as a result of the increase in energy costs that has just been announced?
    Mr. Walker: There are a number of things wrong with the hon. Gentleman's supplementary question. First, no increase has been announced. That supposition is totally unfounded. In answer to what he said about Scottish electricity costs, I suggest that he looks at Scotland's capacity for electricity generation compared with its use, and also the use of coal. I should like to hear his observations on that.
    Mr. Winnick: The Secretary of State knows that there is no justification whatever for any increase in fuel prices. Is he aware that there will be much disappointment that he did not put up a stronger fight in the Cabinet against the proposals of the Chancellor of the Exchequer? What provision has the Chancellor of the Exchequer made in public expenditure next year for the increases that we all know are coming? Is the Secretary of State aware of the damage that these proposals will cause to many people on low incomes and to British industry?
    Mr. Walker: It is nothing like as damaging as the 170 per cent. increase in domestic electricity prices under the last Labour Government. I have been more successful in the battles in which I have been involved than the hon. Gentleman.
    Mr. Orme: Will the right hon. Gentleman now give the reasons for these increases, which will hit both industry and the consumer? Are these not merely public expenditure cuts which will affect the unemployed and the socially deprived?
    Mr. Walker: The right hon. Gentleman talks as if vast increases have taken place, but he knows full well that any increases in either industry will be below the rate of inflation. Those on low incomes have already been
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    protected. The gas industry and the Government consider that there is justification for an increase because gas from the cheaper fields is running out and more expensive gas must be purchased. That is a good, valid reason for some modest increase in gas prices.

    Belvoir Coalfield
    Mr. Jannerasked the Secretary of State for Energy when he last met the chairman of the National Coal Board to discuss new investment in the Vale of Belvoir.
    Mr. Giles Shaw: I have discussed the board's proposals for a new mine at Asfordby with the chairman on several occasions. As the hon. and learned Member will know, Mr. MacGregor has now stated publicly his support for this project and the Government are processing the board's application for investment approval.
    Mr. Janner: Is the Minister aware that last week the chairman gave me a firm assurance that the Asfordby pit work would begin in time to dovetail into the rundown, redundancies and closures of other pits in the Leicester area so that the miners, including many of my constituents, would not be out of work and the industry would benefit? Will he confirm that assurance? When will the sinking of the shaft at Asfordby begin?
    Mr. Shaw: I remind the hon. and learned Gentleman—I recall that I wrote to him on this subject—that the Government must give investment approval to the sinking of a new mine. I also remind him that we must carefully consider the scale of investment involved—about £360 million. The detailed decision has still to be taken and, thus, I cannot give him the direct answer that he seeks.
    Mr. Latham: Will my hon. Friend confirm that ultimately only the Government can approve the investment for this pit, which is in my constituency, not in Leicester, West? Will he ensure that the decision, one way or the other, is taken as soon as possible so that uncertainty can be removed?
    Mr. Shaw; I give my hon. Friend the assurance that he seesk on both counts. There will be no unnecessary delay in dealing with this matter.
    Mr. Ashby: Is the Minister aware that the miners in my constituency—I am not aware of any miners in Leicester, West—are anxious that this investment should go ahead and that the mine should be opened as soon as possible?
    Mr. Shaw: I have already given my hon. Friend the Member for Rutland and Melton (Mr. Latham) the assurance that this matter is being dealt with as speedily as possible. We recognise that the House welcomes the view taken by the chairman of the board.

    Energy Prices
    Mr. Hayesasked the Secretary of State for Energy what information he has as to the average price of electricity per kilowatt hour in 1982 to customers in the United Kingdom, the United States of America, West Germany and France.
    Mr. Giles Shaw: Information on overall average prices is not available. However, in 1982 a typical industrial customer paid prices in the following ranges in pence per

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    kilowatt hour: in the United Kingdom—3·49p to 3·97p; in Germany—3·66 to 4·76; in France—2·73; and in the United States—3·83 to 7·21.
    Mr. Hayes: I am grateful to my hon. Friend for that answer. Is he aware of the devastating effect that gas and electricity prices will have on heavy users, particularly on beleaguered industries such as the glass industry? In my own constituency of Harlow we have United Glass, and on a projected increase of 6 per cent.—I sincerely hope that it will not be that—it will have to pay an additional £120,000 a year. Does my hon. Friend accept that the heavy users have a raw deal, and will he do something about it?
    Mr. Shaw: I warmly welcome my hon. Friend's firm defence of United Glass, which has a substantial plant in his constituency, including the cullet processing plant, which is essential to the glass recycling schemes for London. My hon. Friend will be aware that special provision has been made for heavy users. Indeed, only those with a fuel usage of 80 per cent. have not enjoyed some of the benefits that have occurred. I also remind him that the CBI is examining the position closely and I have no doubt that it will make representations.
    Mr. Rowlands: In that case, may we have an assurance that the Electricity Council will not increase industrial electricity prices in the new year?
    Mr. Shaw: The hon. Gentleman will be aware that that matter has been adequately and splendidly dealt with by my right hon. Friend.
    Mr. Fatchettasked the Secretary of State for Energy what representations he has received from industry in relation to energy costs.
    Mr. Kirkwoodasked the Secretary of State for Energy whether he has received representations from industry on the current costs of electricity and gas.
    Mr. Peter Walker: I have received various representations.
    Mr. Fatchett: Have not Conservative Members this afternoon made the Secretary of State aware of the fact that energy prices for British industry are higher than in most European competitor countries and the United States? As a result, are not competitiveness and jobs lost? Will he therefore reassure the House than any increase in energy prices will not lead to further losses in competitiveness and increasing job losses in British industry?
    Mr. Walker: The hon. Gentleman cannot have heard the reply given by my hon. Friend the Under-Secretary to the last question, when he said that energy prices in Germany and the United States were higher than in this country. Only in France, with its substantial nuclear electricity power industry, are energy prices lower. We are well aware of the importance of energy prices if industry is to remain competitive, and in no way will we allow industrial energy costs to go up in the alarming way that they did under the last Labour Government.
    Mr. Kirkwood: If the right hon. Gentleman's friends in the CBI can persuade him that export-led industries will suffer from any price changes that may occur, will he seek to change the Government's policy?
    Mr. Walker: Industry has applauded the Government's policy, which has meant a freeze on the price of one major source of energy for 21 months and a freeze on the other for 15 months.
    Mr. Rost: Will my right hon. Friend remind the House that not all of industry is moaning about possible increases in energy prices as, thanks to the Energy Act, it now has the ability to go it alone? Does he also agree that there is enough room for improved efficiency within the electricity supply industry to make any price increases unnecessary and allow the industry to meet the Government's capital return requirements?
    Mr. Walker: There is also considerable scope for improving energy efficiency in industry. We estimate that energy use by industry and domestic users could, with proper methods, be reduced by about 20 per cent.
    Mr. Eastham: In view of the massive energy profits last year—£660 million for gas and £330 million for electricity—is the right hon. Gentleman aware that people now call them energy taxes rather than energy prices? Will he differentiate between a tax and a price?
    Mr. Walker: I suggest that the hon. Gentleman has a closer look at the figures. For example, gas profits were £188 million on a turnover of £6 billion and a capital of £12 billion. That is hardly excessive.

    Continental Shelf (Oil Licences)
    Mr. Lilleyasked the Secretary of State for Energy when he proposes to invite applications for the ninth round of licences on the United Kingdom continental shelf.
    Mr. Buchanan-Smith: I am currently considering arrangements for the next licensing round.
    Mr. Lilley: In view of the great success of the belated introduction of auctioning into the allocation of licences in recent rounds, will my right hon. Friend extend the use of auctioning in future licences? Will he recognise that the Labour Government's doctrinaire hostility to the market process persuaded them to give these valuable assets away to the oil companies as an uncovenanted benefit rather than selling them at their fair market prices, thereby gaining considerable revenues for the consumer?
    Mr. Buchanan-Smith: I shall obviously look at these various issues in considering the next licensing round. It must also be remembered that what my hon. Friend advocates is not welcomed, particularly by a number of the smaller companies. The discretionary part of the last two rounds has enabled a considerable number of smaller British companies to become involved in exploration, which I welcome.
    Mr. Douglas: Does the right hon. Gentleman accept that it is now desirable to have a continuity of the regime and that the Government's record on tax changes has not been conducive to developments in the North sea? Has that ended and are future developments likely to sustain self-sufficiency will into the 1990s?
    Mr. Buchanan-Smith: I certainly support the need for continuity. Indeed, it was for that very reason that the Government introduced the various fiscal changes which, this year, resulted in drilling activity in the North sea at the highest level we have ever had since North sea oil was

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    first discovered. I assure the hon. Gentleman and the House that the need to maintain continuity is an important aspect of our licensing arrangements.

    Coal Industry (Investment)
    Mr. Hannamasked the Secretary of State for Energy what is the total value of Government investment in the coal industry since May 1979; and how this compares with the corresponding amount of investment in the French and West German coal industry's.
    Mr. Giles Shaw: Since May 1979 the National Coal Board has invested £3,500 million in coal production. Estimates from the European Commission indicate that over the same period the coal industries of the Federal Republic of Germany and France achieved only one third and one twentieth respectively of the level of investment in Britain.
    Mr. Hannam: Does my hon. Friend accept that those figures show our level of investment in the coal industry to be higher in relation to output than in France and West Germany? Should not priority now be given to achieving greater productivity and lower prices, so that we can capture the available coal markets?
    Mr. Shaw: I agree with my hon. Friend that the task before the industry is to increase its competitiveness by every means possible.

    Coal (Demand)
    Mr. Barronasked the Secretary of State for Energy what are the future energy demand projections for British mined coal.
    Mr. Giles Shaw: The Department's projections for long-term United Kingdom coal demand were given in the Department's proof of evidence to the Sizewell inquiry, copies of which were placed in the Libraries of both Houses on 7 October 1982. The projections envisaged a range of 100 million to 140 million tonnes in the year 2000.
    Mr. Barron: Is the Minister aware that it was estimated in 1974, in "Plan for Coal" that about 120 million tonnes of deep-mined coal would be extracted in 1985, and that the industry is now producing about 105 million tonnes? Will the Minister come clean over the Government's attack on the National Union of Mineworkers for not being willing to run down the coal industry by 3 million to 4 million tonnes per annum, when they have fallen short of the targets set out in "Plan for Coal"? Surely the Government should be even-handed in their approach to the industry.
    Mr. Shaw: The hon. Gentleman will recognise that the 1974 targets were established against a given set of circumstances and that such circumstances can easily be overtaken by events. The hon. Gentleman would be the first to claim that that must be so. He must now accept that the main task is to increase the volume of sales by competitively pricing coal at the level that the market demands.

    North Sea Oil (Orders)
    Mr. Coombsasked the Secretary of State for Energy what percentage of orders for the North sea oil industry were placed with British companies in 1982–83.
    Mr. Buchanan-Smith: In 1982 British companies gained 73 per cent. of a total of £2·2 billion in orders placed for goods and services for the United Kingdom continental shelf.
    Mr. Coombs: What are the prospects in this area in the current and future financial years?
    Mr. Buchanan-Smith: There is a high level of activity on the United Kingdom continental shelf because of the fiscal changes introduced by the Government, and for other reasons. Prospects are extremely good because of the orders that have been placed and new developments, not only where North sea oil exploration takes place, but throughout the rest of the economy.

  HOUSE OF COMMONS

    Chancellor of the Duchy of Lancaster (Parliamentary Questions)
    Mr. Robert Atkinsasked the Lord Privy Seal if he will list in the Official Report the responsibilities of the Chancellor of the Duchy of Lancaster in respect of which he answers parliamentary questions.
    The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): I shall answer questions on behalf of my noble Friend the Chancellor of the Duchy of Lancaster that relate to his Duchy of Lancaster responsibilities.
    Mr. Atkins: I thank my right hon. Friend for his copious answer. May I pursue with him a question about the magistracy? Bearing in mind the unique way in which magistrates are appointed by the Duchy, is my right hon. Friend entirely satisfied that people living in the area are fully aware of the ways and means of becoming magistrates in the county palatine?
    Mr. Biffen: If they are not, I very much hope that this exchange between my hon. Friend and myself will enable them to be so aware. I can assert that the system of appointment is very similar to that operated by my noble Friend the Lord Chancellor throughout the rest of the United Kingdom.

    Office Accommodation
    Mr. Dormandasked the Lord Privy Seal if he will make a statement on the progress being made in providing new office accommodation for hon. Members.
    Mr. Biffen: I refer the hon. Gentleman to the debate on 22 November.
    Mr. Dormand: Will the right hon. Gentleman confirm that what he said in the debate last week about the new building means that in no circumstances will the money set aside for that project be withdrawn? What is he doing to try to expedite the completion of phase 1? Does he agree that the five years before hon. Members will be able to use those offices is a long time?
    Mr. Biffen: I should like to say at once that the figure of £23 million that was mentioned in the debate as being available for expenditure on this project is committed in principle, and although it is subject to the normal PESC disciplines, I very much hope that it will be available to ensure that the project is completed in the time scale that has been set out.
    Mr. Crouch: Has my right hon. Friend had second thoughts about the proposal for preserving the undistinguished nineteenth century facade on 31 to 47 Parliament street? Has he had further thoughts about my protest last week that this should not be done and that, instead, we should give our architects an opportunity to design something to represent us in the twentieth century?
    Mr. Biffen: I thought that my hon. Friend put his argument with all the elegance of a preservationist rather than as someone seeking some monstrous new development in the facade of this phased development. Of course I have given thought to it, but I have come down unshakably on the side of the prejudice that I expressed at the commencement of the debate last week. If I were to do anything else I would not have been able to give the answer that I have just given to the hon. Member for Easington (Mr. Dormand).
    Mr. Shore: May I urge the right hon. Gentleman to be equally unshakable in his determination to see that the money is spent?
    Mr. Biffen: I cannot add to the answer that I have just given.

    Legislative Programme
    Mr. Adleyasked the Lord Privy Seal how many officials for whom he is responsible are involved in his function of planning and supervising the Government's legislative programme.
    Mr. Biffen: There are no departmental staff for whom I am responsible as Lord Privy Seal, but I am able to draw upon official advice as necessary.
    Mr. Adley: Is it not a fact that, in previous cases where British dependent territories have changed their status, legislation has been required? As, presumably, an amendent or annulment of the treaty of Nanjing will be proposed at some stage, may I ask whether my right hon. Friend's officials have yet turned their minds to this subject?
    Mr. Biffen: I am prudently advised to reply that while these talks are in progress it would not be appropriate to speculate about any future legislative requirement.
    Mr. Winnick: Whatever may be the number of officials involved in framing the legislative programme, is it not important that stupid Acts, such as the Act that has caused the present industrial dispute and brought the courts into industrial relations, should not be passed by the Government? Will the Leader of the House persuade his Cabinet colleagues to repeal the Act that has caused so much difficulty?
    Mr. Biffen: As I cannot recognise the hon. Gentleman's absurd premise, I cannot even offer an answer.
    Mr. Bottomley: Will my right hon. Friend consider setting down in advance the times that the House will rise for recesses and, if necessary, have some flexibility on the times that the House returns?
    Mr. Biffen: I appreciate my hon. Friend's point, but on the whole recess times are concluded without regard to the advice of officials.
    Mr. Dykes: As China and Hong Kong have suddenly been put on my right hon. Friend's agenda, notwithstanding his answer does he agree that in general terms it would be better to start making preparations for future decisions so as to get the best results for Hong Kong rather than wait too late, as 1997 approaches?
    Mr. Biffen: It is always flattering to be addressed as the Foreign Secretary, but I must tell my hon. Friend that I cannot go outside the terms of the reply that I gave to my hon. Friend the Member for Christchurch (Mr. Adley) on his original question.

    Disabled Visitors (Facilities)
    Mr. Hannamasked the Lord Privy Seal what plans he has for the improvement of facilities in the House of Commons for disabled visitors; and if he will make a statement.
    Mr. Biffen: The Accommodation and Administration Sub-Committee of the Services Committee is to review the matter in the near future.
    Mr. Hannam: Is my right hon. Friend aware that there is increasing frustration that the House fails to provide proper access for disabled people, especially to the Committee Rooms of Westminster Hall? Is he further aware that there is a piece of mobile equipment known as the Gimson Stairmate, which enables wheelchairs to go up and down stairs? If he is unable to find the funds to provide this piece of machinery, the cost of which would be less than half the cost of the stair rails that are being proposed, is he aware that we have an offer from the Royal Association for Disability and Rehabilitation to lend us free of charge a Gimson Stairmate for the use of diabled people?
    Mr. Biffen: I recognise the anxiety to which my hon. Friend refers. I am certain that the mobile equipment will be considered by the Accommodation and Administration Sub-Committee and that it will take account of the factors that have been mentioned.
    Mr. Meadowcroft: Will the right hon. Gentleman consider sympathetically the possibility of the Galleries that are currently reserved for special visitors being made available to disabled people, particularly where there is a need to translate into sign language for the deaf and when people need to keep their guide dogs close to them?
    Mr. Biffen: There should not be any difficulty about the provision of facilities for sign language transmission. As to the other point, which has been the cause of some difficulty in the past, I am certain that the Accommodation and Administration Sub-Committee will wish to consider that.
    Mr. Dormand: Does the Leader of the House agree that not only should the physical facilities for the disabled be improved, but that hon. Members' facilities for debating such problems should be improved? Will he give an assurance that there will no repetition of the scandalous unofficial three-line Whip that took place recently?
    Mr. Biffen: The hon. Gentleman will know that this matter has been raised several times in the House. I do not think that on this occasion I can go very much beyond what I have already said.
    Mr. Wrigglesworth: Have the Services Committee and the Leader of the House considered the possibility of

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    introducing some form of closed circuit television facility in another part of the Palace, not only for the disabled, but for the many others who cannot see our proceedings from the Chamber?
    Mr. Biffen: I am sure the hon. Gentleman will be the first to acknowledge that his question goes very much wider than facilities for the disabled and that, therefore, within the terms of this question, I cannot helpfully answer his point.

  CIVIL SERVICE

    Trade Union Representatives (Meetings)
    Mr. Canavanasked the Minister for the Civil Service what subjects he expects to discuss at his next meeting with trade union representatives of the Civil Service.
    The Minister of State, Treasury (Mr. Barney Hayhoe): Plans for my next meeting with the Civil Service unions have not yet been made.
    Mr. Canavan: Why are the Government hell-bent on destroying another 37,000 Civil Service jobs by 1988, which will mean a job loss in the Civil Service of 139,000 since 1980? How can the Government justify staff reductions in Departments such as the Department of Employment and the Department of Health and Social Security when over 3 million are unemployed, over 7 million are dependent on supplementary benefit and about 9 million retirement pensioners and many other deserving cases on low incomes depend on the services of those Departments?
    Mr. Hayhoe: The planned reduction of 6 per cent. between 1 April 1984 and 1988 is a net figure. There will be some staff increases in the prison department, for example. The objective is to obtain improved efficiency and better value for money.
    Mr. Eggar: What is the response of trade union representatives to the proposals in the financial management initiative, especially the important step of devolving decision-taking to more junior managers?
    Mr. Hayhoe: I have not had a meeting with the Civil Service unions about the financial management initiative.
    Mr. Kirkwood: Bearing in mind the concern that is being expressd within the confines of the trade union movement over the representations of forestry workers, will the Minister give an assurance that he will give early consideration to arranging a meeting with those involved?
    Mr. Hayhoe: I imagine that that will be a matter for my right hon. Friend the Secretary of State for Scotland or, perhaps, my right hon. Friend the Minister of Agriculture, Fisheries and Food. Responsibility will lie with one or other of my right hon. Friends in the first instance.
    Dr. McDonald: Is the Minister aware that cuts in DHSS staff have already meant that visits to pensioners to ensure that they have all the benefits to which they are entitled have been reduced to one call every three to four years and that the unemployed are not visited until nearly the end of their first year of unemployment? Does this not mean that pensioners and the unemployed are subsidising the cuts in the Civil Service and that they are in receipt of much poorer and much less efficient services as a result?
    Mr. Hayhoe: I do not accept that description, which is highly exaggerated and extremely partisan. The hon. Lady should address detailed questions on the DHSS or the Department of Employment to the responsible Ministers.

    Redundancy
    Mr. Chapmanasked the Minister for the Civil Service what is the redundancy policy in the Civil Service.
    Mr. Hayhoe: In reducing the size of the Civil Service, it is the Government's policy to rely on natural wastage to the greatest possible extent. By 1 April 1984 we shall have reduced Civil Service manpower by over 100,000, of which about 10 per cent. will be accounted for by redundancies.
    Mr. Chapman: I am grateful to my hon. Friend for that information. Will he confirm that the 14 per cent. reduction in the manpower of the Civil Service over the past four and a half years has been secured with few forced redundancies? Will he use his good offices to ensure that the further planned reduction of 37,000 which was referred to by the hon. Member for Falkirk, West (Mr. Canavan), is achieved, if possible, without any forced redundancies?
    Mr. Hayhoe: The reduction of 100,000 has been achieved with about 2,500 non-industrial civil servants being retired prematurely on the ground of redundancy along with about 8,000 industrial civil servants. Every effort will be made in future to avoid compulsory redundancy. The Civil Service is a large employer and resignations and retirements provide a great deal of elbow room for reducing the number of jobs within the service.
    Mr. Wilson: If the Minister is determined to pursue that policy in the terms that he has mentioned, will he take on board events in Dundee, where the local vehicle licensing office has been given a sentence of death and where there are no alternative Civil Service jobs because it is an area of high unemployment? Does he accept that the great volume of civil servants is to be found in plusher areas such as London, where there is no unemployment problem? When circumstances arise, such as those in Dundee, will he ensure that alternative work is brought into the area to secure jobs for those concerned? The civil servants at the vehicle licensing office at Dundee secured their jobs only four years ago.
    Mr. Hayhoe: The hon. Gentleman is wrong to suggest that the great majority of civil servants work in the London area. The details, which I have provided on many occasions, show that only about one in four or one in five civil servants work in the Greater London area. The hon. Gentleman should direct his specific remarks about redundancies in Dundee to the Minister concerned. Efforts will be made to provide jobs elsewhere for those in mobile grades within the Civil Service. Some redundancies have taken place among non-mobile grades.
    Mr. Leigh: Is my hon. Friend aware that one of the most popular policies of the Government in my constituency is that which has led to the prospect that we shall soon have the smallest Civil Service since the war? Does he understand that many of my constituents ask 'why the Civil Service should be the only section of the community that is immune from compulsory redundancies?
    Mr. Hayhoe: My hon. Friend does not have to wait for the news that we have the smallest Civil Service since the

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    war. That has already been achieved. As I have explained, the Civil Service is an extremely large employer and it is possible, by changes in recruitment policy and by using the processes of natural wastage, retirements and resignations, to achieve the elbow room that is necessary to obtain job reductions.
    Mr. Ioan Evans: Does the Minister realise that the public service is weakened by cuts in the Civil Service? In my constituency there is talk about closing the local tax office. If the closure takes place, many taxpayers will have to travel a great deal further to deal with their tax problems. Such a closure would be a false economy.
    Mr. Hayhoe: We must have a public service that is efficient and gives value for the taxpayer's pound. It is the Government's intention to continue to introduce measures to achieve that. If we have an inefficient service that fails to give value for money, there will be a burden on the economy which, at the end of the day, will cost jobs rather than maintain them.
    Mr. Wrigglesworth: How many of those involved in the planned reductions of manpower within the Civil Service have been transferred to other parts of the public sector?
    Mr. Hayhoe: With notice, I could try to provide that figure for the hon. Gentleman.

    Civil Servants (Performance Review Form)
    Mr. Eggarasked the Minister for the Civil Service if he will revise the annual performance review forms for civil servants.
    Mr. Hayhoe: Yes. We are currently discussing with Departments and the Civil Service unions major revisions to the procedures for staff reporting and appraisal.
    Mr. Eggar: As almost 90 per cent. of civil servants are judged to be above average in their performance, is the revision not long overdue? Will my hon. Friend confirm that any such revision will absorb the introduction of merit pay?
    Mr. Hayhoe: The reform is a useful one to be introducing. I fear that my hon. Friend may have misunderstood figures that I gave earlier this year, including the 90 per cent. rating. The 90 per cent. figure could represent those civil servants who are shown on the appraisal form to be working competently or better. Merit pay is under consideration.

Ophthalmic Services
3.30 pm
The Secretary of State for Social Services (Mr. Norman Fowler): With permission, Mr. Speaker, I shall make a statement on opticians and competition following the report of the Office of Fair Trading published earlier this year.
At the end of 1981 the Office of Fair Trading was asked to report on the effects of the Opticians Act 1958 upon competition in the supply of opticians' services. It found that the requirements imposed under that Act led to restricted competition and resulted in unnecessarily high prices. In particular, the Office of Fair Trading criticised the rules limiting opticians' advertising and the monopoly on the supply of glasses granted to opticians and doctors. The Government accept these conclusions and believe that the interests of consumers would be better served by acting upon the OFT report. Accordingly, the Government intend to bring forward legislation to deal with two main areas.
First, we propose to take action on advertising. At present, the rules made by the General Optical Council allow no general advertising of the prices of glasses or advertising on such matters as the speed of service. This handicaps the consumer who wishes to get the best value for money and also holds back the optician who can provide a better deal or wider choice. The General Optical Council reviewed its rules in the light of the report by the Office of Fair Trading, but the changes that it proposed came nowhere near to those needed. Legislation will therefore be introduced to enable the rules operated by the General Optical Council to be amended to allow freer advertising. These powers will be used carefully. In particular, we will draw a distinction between the professional function of sight testing and the commercial activity of selling glasses. The aim will be to ensure that the public are provided with more information about the prices of glasses.
Secondly we propose to take action on the monopoly to dispense and sell glasses. There is still a need for public protection in certain areas such as dispensing to children and fitting contact lenses. However, all laws which create a monopoly have to be examined to see whether, under the cloak of public protection, there is not simply too much protection for the seller. We have concluded that this is the case with opticians. The legislation which the Government will introduce will therefore allow non-opticians to sell glasses under carefully prescribed conditions. The conditions laid down will ensure that no risks are taken with people's sight. All sales will have to be made against a recent prescription, following a sight test by an appropriately qualified optician or doctor, and no one other than a qualified optician or doctor will be able to sell glasses for children or to fit contact lenses. It is our intention to maintain the present arrangement for the registration of qualified opticians and the public will therefore be able to make a choice between the services of a registered optician and those of other competitors.
The action that I have announced on advertising and the end of the dispensing monopoly will, I believe, bring down the price of glasses. This will have an effect on the general ophthalmic service. At present, it provides free sight tests by either an ophthalmic optician or a specially qualified doctor. We intend to continue this arrangement. It also provides a range of frames and lenses free to
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children and families on low incomes. This free provision will also continue. But other people who currently buy NHS glasses will in the future be able to obtain a wider selection of non-NHS glasses at reasonable prices. Although the NHS will continue to provide free sight tests and to supply glasses to the present exempt groups, there will no longer be any need for the general supply of NHS glasses. The legislation I shall shortly introduce will give effect to this.
My right hon. Friends the Secretaries of State for Scotland and for Northern Ireland will also bring forward proposals to give effect to these changes. We believe that the changes I have announced will enable greater competition to take place, provide greater choice and, above all, have the effect of bringing down the prices of glasses for the public.
Mr. Frank Dobson: I assure the House that the Opposition share the general concern about the high cost of non-National Health Service frames. However, we are worried about certain aspects of the right hon. Gentleman's statement, although we welcome the fact that the dispensing of glasses must still be preceded by a sight test carried out by a qualified practitioner. We are worried that the advertising changes and the relaxation of the rules so that non-qualified people may sell glasses will result in small business opticians, especially those in rural areas, losing out to the major multiples, who can afford the cost of advertising.
Will the staff of a shop selling glasses be properly trained to interpret prescriptions which are given them by the person who brings in the prescription? If not, mistakes could occur, and they could be serious. What procedures does the Secretary of State propose to provide a redress for customers against a shop that sells glasses that are different from those that were prescribed?
More importantly, does the Secretary of State's statement about the general supply of NHS glasses mean that there will no longer be a general supply of NHS glasses and that NHS frames and lenses will be provided only to those poor groups and under 16-year-olds who are described in the statement as exempt groups? If that is so, it is a severe curtailment of the area covered by NHS provisions and means the introduction of privatised marketing into a sphere where it does not now exist.
Does the Secretary of State agree that if that is the import of his statement it will mean that people who cannot afford to go outside the NHS because they are poor will demonstrate that they are poor, or are receiving supplementary benefit or family income supplement, by the nature of the glasses that they wear?
Mr. Fowler: The hon. Gentleman's last point is not a very good one. I am grateful for the limited support: that he has expressed for the measures that I have announced.
Virtually the only advertising at the moment is for frames, which appear in the windows of opticians' premises. Opticians cannot advertise in the press or on television on such matters as price and speed of service, or even on whether they are open. They cannot, for example, display an advertisement that says, "Never knowingly undersold". We believe that that area needs reform, and that is why we have brought forward these other proposals.
There will be checks and conditions on non-optician sellers. Clearly, they should be able to read the

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prescription, and we shall consult the profession on this matter. Remedies will be open to the public under the Sale of Goods Act, but we shall have further talks about any additional protection that is required. This will become part of a Bill that will be put before the House shortly, and therefore we shall have time to go into all these aspects.
On the hon. Gentleman's point about general ophthalmic services, free sight tests are now provided and that will continue. Free glasses are provided for exempt groups—children and low income families—and that, too, will continue. It is the provision of glasses for nonexempt groups that will be withdrawn from that market. We believe that the present non-exempt customer will be able to obtain a wider range of glasses at comparable prices as a result of the proposed deregulation of the market.
The fundamental change is that we believe that the most important person is the customer. Customers should have the right to make an informed choice and to have more information and lower prices.
Mr. Robert McCrindle: Is my right hon. Friend aware that he seems to have found a good compromise between maintaining the professional status of the optician and opening up the benefits of competition for the consumer? Will he confirm that there is no intention of moving towards the North American system in which spectacles can be purchased without prescription over the counter of a department store? Secondly, how recent will the prescription need to be for glasses to be obtained under the new arrangements outlined in his statement?
Mr. Fowler: I hope that what my hon. Friend has said will be noted, as it is absolutely correct. With regard to checks, sales will be made against recent prescriptions, by which we mean prescriptions made within the last two years.
Mr. Willie W. Hamilton: Is the Secretary of State aware that the Opposition welcome the possible reduction in the price of glasses so long as we have an absolute and unqualified assurance that the quality of service to the patient will not be jeopardised? On the point raised by the hon. Member for Brentwood and Ongar (Mr. McCrindle), will the Secretary of State make illegal the sale of glasses by retail outlets such as Woolworth's, as anyone who has seen that kind of treatment must be appalled by it? Will he also assure the House that there will be separate Scottish legislation and that Scotland will not be tacked on to a United Kingdom Bill?
Mr. Fowler: The legislation covers the whole of the United Kingdom, but my right hon. Friend the Secretary of State for Scotland will make a separate statement about the position in Scotland.
Mr. Hamilton: When?
Mr. Fowler: Very soon, I hope.
Mr. Hamilton: In the House?
Mr. Fowler: The hon. Gentleman also made an important point about checks. As I have said, any sale must be made against a recent prescription and it will be a condition on the non-optician seller that he must be able to read the prescription. We shall consult the profession on that aspect. It should be pointed out, however, that
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about two thirds of prescriptions are now made up by prescription houses where staff do not need to be qualified in the way that professional opticians are. The aim is to preserve the medical checks that both the Government and the Opposition want, while producing a better service and lower prices for the public by the introduction of competition.
Mr. Peter Viggers: Does my right hon. Friend agree that the present system has two grave shortcomings, neither of which has much to do with maintaining standards? First, the interlinking of sight testing with the sale of glasses and frames maintains high prices. Secondly, restrictions on advertising the services offered help to maintain high prices and prevent proper competition. Is my right hon. Friend aware that the measures announced today will undoubtedly reduce prices for the consumer?
Mr. Fowler: I am grateful to my hon. Friend for his comments. There is no doubt that the present restrictions on advertising prevent full competition and to some extent discourage new entrants. I believe that our proposals will lead to more competition, better services and lower prices.
Mr. Lewis Carter-Jones: Will the Secretary of State give a firm promise that routine examinations for possible glaucoma will in no way be reduced either for the rich or for the poor as a result of the Government's legislation?
Mr. Fowler: Eye tests will continue to be free, as at present. That will remain unchanged.
Mr. Tim Eggar: As there has been such a wide welcome for my right hon. Friend's statement, one wonders why previous Governments did not introduce similar reforms. Will my right hon. Friend consider other professions, with a view to similar reforms? In the present case, will he explain why there are to be any restrictions at all on advertising?
Mr. Fowler: I am grateful for my hon. Friend's comments, but I know that he would not wish to push me into areas for which the DHSS is not responsible. As for restrictions on advertising, the important distinction is between the selling activities of the optician and the sight testing function. That is the distinction that we seek to make.
Mr. Michael Meadowcroft: Does the Secretary of State accept that the present two-year definition of a recent prescription may not be justified if the rules are changed? Does he accept that the difficulties of having separate dispensers may be far more acute in the future, because, although two thirds of prescriptions now come from prescription houses, the position may be very different when an optician is no longer responsible for final delivery of the spectacles? Will he therefore consider registration of dispensers rather than more general proposals about bringing in certain rules to test them?
Finally, when the Secretary of State says that there may no longer be any need for the general supply of National Health Service glasses, does he agree that in some instances people may feel unable to enter general prescribing because of their lack of funds? Does he accept that there will be severe difficulties unless there is a better standard of NHS provision?
Lastly——
Mr. Speaker: Order. I think that three questions are plenty.
Mr. Meadowcroft: Perhaps I may just finish the point, Mr. Speaker. As the hon. Member for Holborn and St. Pancras (Mr. Dobson) said, there is a danger——
Mr. Speaker: Order. That is unfair.
Mr. Fowler: We shall certainly look at the hon. Gentleman's point about the two-year definition of a recent prescription. No doubt that will be dealt with in Committee when the legislation providing for the change is considered. In view of the hon. Gentleman's comments, I hope that he supports the general thrust of the changes.
Mr. Meadowcroft indicated assent.
Mr. Fowler: I am glad to see that the hon. Gentleman nods his assent to that.
Im making regulations for non-opticians, we shall wish to consider the matter very carefully before going along with the hon. Gentleman's suggestion. Clearly, there must be a checking process, but we do not wish to end up merely pursuing the monopoly in a different way.
Mr. Chris Smith: Is the Secretary of State aware that there is an increasing tendency for small independent ophthalmic practices to be taken over by large conglomerates, many of them with other than optical interests, and in one case a tobacco company? Is he aware that that trend is a matter of great concern to professional and academic circles in the ophthalmic world? Is he further aware that his proposals may lead to an increase in that trend and cause great anxiety about the quality of service provided for the public?
Mr. Fowler: I am sure that it would be out of order for me to make any comments about eyesight. It is a point, however, that we shall bear in mind. It is for the public to decide. They will have a free choice. Registered opticians will be able to put their case. Many people will continue to go to registered opticians—there is no doubt about that. We are saying that there should be greater choice than there is at the moment.
Mr. Ioan Evans: While we welcome this measure if it means a reduction in costs to the consumer, will the Secretary of State look more positively at the possibility of increasing the range of National Health Service spectacle frames, so that people need not go to the private sector?
Mr. Fowler: No, we want to go the other way. As I said in my statement, and as the hon. Gentleman recognises, we are keeping to the National Health Service supply of National Health Service frames for children and other exempt groups. We may ultimately be able to reach a position where people are reimbursed or are given a cash voucher so that they can go into the market if they choose. If that were to develop, it would be a better way of proceeding.
Mr. Charles Kennedy: I welcome the Secretary of State's concern for the consumer, which is plainly right, and the lower prices to which his proposals will lead, but at the end of his statement, he talked about there no longer being a need for
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any general supply of NHS glasses. If his proposal means introducing some form of means testing, that will be a retrograde step.
Mr. Fowler: I have made it clear that we intend to keep the present exemptions for children and low-income families.
Mr. Dobson: May I remind the Secretary of State that this matter arises because of anxiety about the high cost of frames produced privately and supplied outside the National Health Service? Therefore, why has the Secretary of State announced the abolition of NHS supplies of frames and lenses, which are already the cheapest on the market? What is the average cost of a pair of NHS glasses, and the average cost of a pair of privately supplied glasses, with privately produced frames and lenses? If the right hon. Gentleman is so confident of the private sector's price-cutting abilities, why will he not allow the NHS to continue to provide glasses so that it can compete? Is it that his friends in the industry are frightened of competition from the NHS?
Mr. Fowler: The hon. Gentleman's first question was rather more impressive than his summing-up question. He must be aware that the DHSS does not produce frames and lenses. They are produced, under contract, by the private sector. As we have announced a change in advertising and the end of the dispensing monopoly, that clearly has implications for the general ophthalmic service. I do not believe that it is reasonable to continue in the way that we have in the past and ignore the fact that these changes will take place.
There is no way in which I can give the hon. Gentleman the average cost figure, for the good reason that there are so many differences—[Interruption.] Labour Members may laugh, but there are many differences in prescriptions. The DHSS is involved in the design of National Health Service glasses. It may be the hon. Gentleman's vision of the brave new world, but I am bound to tell him that I am not sure that a Government Department is the best body to be involved in the cosmetic design of spectacles. I believe that competition will bring the prices down, and I think that the hon. Gentleman will see that.

Ophthalmic Services

  NORTHERN IRELAND COMMITTEE
  Ordered,
  That matters arising from the Energy Discussion Document issued by the Department of Economic Development in July 1983, being matters relating exclusively to Northern Ireland, be referred to the Northern Ireland Committee.—[Mr. Donald Thompson.]

  STATUTORY INSTRUMENTS &c.
  Mr. Speaker: With the leave of the House I shall put together the Questions on the three motions relating to statutory instruments.
  Ordered,
  That the draft Pneumoconiosis etc. (Workers' Compensation) (Payment of Claims) (Amendment) Regulations 1983 be referred to a Standing Committee on Statutory Instruments, &c.
  That the Education (Approval of Special Schools) Regulations 1983 (S.I., 1983, No. 1499) be referred to a Standing Committee on Statutory Instruments, &c.
  That the British Gas Corporation (Transfer of Shares of Subsidiaries) (No. 2) Order 1983 (S.I., 1983, No. 1667) be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Donald Thompson.]

The Royal Navy
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Neubert.]
3.55 pm
The Minister of State for the Armed Forces (Mr. John Stanley): It is a pleasure to open our debate on the Royal Navy.
I think that it would be fair to say that, of the three services, the one that has engendered the greatest controversy in recent years as to its role—and therefore as to its size and shape—is the Royal Navy.
If one accepts our NATO obligations on the central front, and our remaining defence commitments outside the NATO area, the roles and dispositions of the Army leave little room for debate.
Again, the requirements for the defence of the United Kingdom's air space and our combat aircraft obligations on the central front largely predetermine the role of the Royal Air Force.
However, the role of that remarkable and unique synthesis of tradition, skill, experience, and steely endeavour that are the Royal Navy and Royal Marines continues to be a matter of debate.
Almost until the first world war, the British Navy reckoned to be able to match the navies of any two of the leading naval powers of the day. By the beginning of the second world war those days had clearly gone for good.
By 1945, the Royal Navy was well outnumbered by that of the United States, and since the 1950s our Navy has for the first time for centuries been outstripped in size by that of a potential aggressor—the Soviet Union. Against that background, many have asked the question, "Whither the Royal Navy?" The answers at the two extremes are clearly non-starters.
The old policy of Dreadnoughts, or their modern equivalent of strike carrier battle groups, in every ocean of the globe is way beyond the country's economic grasp. Equally, the suggestion at the other extreme that Great Britain can now simply make do with a coastal Navy would represent a wanton waste of one of NATO's key defence assets—as the Royal Navy most certainly is—while manifestly failing to meet Great Britain's own maritime defence needs. That option, too, should be discarded.
The right course for the Navy clearly lies between those two extremes, and I should like to set out how the Government see that midway role for the Royal Navy—within the NATO Area and outside.
The starting point for any consideration of the Navy's role within the NATO area must be the simple inescapable fact that sea control remains critical to the defence of our islands and to the continent to which they belong.
A sufficient measure of sea control in the Atlantic, the Western approaches, the Channel, the North sea and in the Norwegian sea will be vital to NATO's ability to counter aggression by Warsaw pact conventional forces with conventional means.
Sea control is therefore one of the factors that bears on the issue of the nuclear threshold. In any conventional war, the Warsaw pact would enjoy a significant geographical advantage. The Soviet Union is in a position to reinforce its troops in central Europe swiftly and easily by land,
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whereas NATO suffers the significant handicap of being separated from its most powerful ally, and from the bulk of that ally's material and equipment, by a major ocean.
NATO's reinforcement planning rests on many millions of tons of equipment and war stocks having to be transferred across the Atlantic by sea.
In mid Atlantic the ship-borne reinforcements will be exposed to the very substantial numbers of Soviet submarines, most of which are nuclear powered. In the Channel and the North sea, the Soviet submarine threat remains, but, in addition, the threat from Soviet mining markedly increases as does the threat from the air.
The Royal Navy, as the largest navy of the European members of NATO, has a key contribution to make to NATO's vital sea-borne reinforcement. It has to be able to intercept Soviet submarines before they break into the Atlantic, and for this purpose the Royal Navy contributes two anti-submarine warfare groups to NATO—each including an Invincible class carrier. It contributes also to NATO's mine clearance requirements in the Channel and the North sea.
Within the NATO area, the demands on the Royal Navy are not only to help protect the sea routes along which American, and indeed British, reinforcements need to flow into continental Europe; it has other crucial roles as well. It has the vital task of safeguarding the exits from our home ports of key naval assets—especially our own strategic deterrent force, and also the United States' submarines based at Holy Loch.
The Royal Navy has to take the initial lead in protecting NATO's northern flank from seaborne attack. The Navy also provides the United Kingdom component of the United Kingdom-Netherlands amphibious force—NATO's only readily available amphibious capability—with its sea transport, its amphibious landing ships and its essential support and supplies.
The Royal Navy's NATO roles all add up to a very considerable catalogue of responsibilities.
Sir Patrick Wall: Is my hon. Friend aware that the hon. Member for Sheffield, Attercliffe (Mr. Duffy) and I recently toured the Atlantic bases, and on each occasion we were told that there were insufficient assets to carry out the tasks that he enumerated? Why does my hon. Friend's statement therefore talk about reducing our frigate force in future years?
Mr. Stanley: I shall deal with that matter in some detail later.
The Navy's clear ability to discharge those NATO responsibilities bears directly on our whole deterrent posture.
The Soviet Union will be as aware of NATO's dependence on seaborne reinforcement as we are. Any perception by the Soviet Union that NATO was unable to safeguard that reinforcement would only weaken deterrence and perhaps lower the nuclear threshold.
For NATO, the simple geographical fact of the Atlantic ocean makes deterrence on land and deterrence at sea indivisible. As a lynchpin of NATO's deterrence at sea, the Royal Navy must without question be shaped predominantly around its NATO role.
With the Royal Navy's NATO commitments being so extensive, it is, not surprisingly, asked whether the Navy should have an out of area role at all. The NATO area

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undoubtedly has to come first. But if it has to be predominant, it does not have to be exclusive. Nor should it be.
The offensive capabilities ranged against us are certainly far and away the greatest in Europe. But, mercifully for nearly 40 years now, peace in Europe has been preserved.
Mr. Dick Douglas: Before the Minister moves away from the issue of Europe and the north Atlantic, will he comment on the strains that the Falklands operation imposes on the Navy?
Mr. Stanley: I think that the hon. Gentleman is referring to the matter to which my hon. Friend the Member for Beverley (Sir P. Wall) referred. I shall refer to destroyer and frigate numbers later.
Outside the NATO area, the historical pattern is very different. The offensive capability ranged against us is certainly far less severe than in Europe but the likelihood of our having to use our Navy in earnest seems far greater.
Since 1945 the Royal Navy and Royal Marines have been involved in well over a dozen conflicts ranging from the Korean war to the Falklands. It has also taken part in seven service assisted evacutions from overseas countries. None of these operations was connected with our NATO responsibilities.
The events of the whole of the post-war period, reinforced by those of the last year or two, make it clear that Britain cannot sensibly or realistically plan on confining its maritime role solely to its NATO tasks.
Britain has formal defence responsibilities for a dozen dependent territories, all of which, with the exception of Gibraltar and Bermuda, are outside the NATO area. There are groups of British people all over the world who might on some future contingency require a service assisted evacuation.
There is no doubt at all that worldwide—and particularly perhaps in the Caribbean, Africa, the Gulf, and as we are seeing right now with our current task group deployment to the Indian ocean, south Pacific, and the far east—the visible presence of a Royal Navy ship serves Britain and British interests extremely well. For all these reasons, the Government believe that the Royal Navy, even though its out of area operations will have to be undertaken by ships whose primary role is a NATO one, should continue to perform a role outside the NATO area. That calls for a balanced Navy that can continue to perform a multiplicity of tasks—the strategic nuclear role; the anti-submarine role from the air, the surface and from under the surface; the anti-surface role again from the air, the surface and from under the surface; the mining and the mine clearance role; and the amphibious role.
I shall now set out how we see these tasks being met in terms of numbers and types of ships. My hon. Friend the Under-Secretary of State for Defence Procurement will deal with a number of shipborne weapon systems and procurement issues and the dockyards that are, I know, of interest to the House when he winds up.s
In considering the Navy's requirements, I want to start with submarines. In terms of the sea denial that can be exercised by a single vessel, submarines have no equal. Today's torpedoes and submarine-launched missiles give a degree of precision and certainty of destruction of another ship or submarine that are at least as good as—
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if not better than—the weapons carried on a surface ship; and submarines have a higher degree of invisibility and therefore of invulnerability than surface ships.
It is ominous, but not at all surprising, that the Soviet Union has been devoting prodigious resources to submarine construction. The Soviet Union now has the largest fleet of nuclear powered submarines in the world. Since 1970, the Soviet Union has acquired about 100 nuclear powered submarines and nearly 30 diesel powered submarines.
By way of contrast, though the United States has substantially improved the missiles on its SSBNs, it has brought only three additional SSBNs into service compared with about 50 by the Soviet Union. Again, since 1970, the United States has brought only 38 new SSNs into service compared with about 50 by the Soviet Union. The United States has built no new conventional submarines—indeed, it no longer has any operational—compared with nearly 30 new ones brought into service by the Soviet Union.
Given the scale of the Soviet submarine menace and the unique characteristics of submarines, I am in no doubt that the decision taken by Sir John Nott and by the Government in 1981 to increase the proportion of the Navy's resources going to submarines was entirely right. The potency and relative invulnerability of nuclear submarines, their sea denial capability—demonstrated so convincingly in the Falklands conflict—and the fact that we are only one of three countries in the West that are willing and able to build them puts a particular onus on the British Navy to establish and maintain a significant nuclear submarine force.
Mr. A. E. P. Duffy: Does the Minister agree that that also puts an onus on the Government to improve on the ordering of SSNs by the previous Labour Government? Why have the Conservative Government ordered only one, and that only a few weeks ago?
Mr. Stanley: The hon. Gentleman is mistaken. We now have 12 SSNs in service, with four more on order. We shall be ordering another within the next few weeks.
Mr. Duffy: It is important that the House is clear on this matter. The Minister will appreciate that the nub of the debate is the number of ships. We intend to join the Minister on this battle ground. The Conservative Government have ordered only No. 18.
Mr. Stanley: The hon. Gentleman is incorrect—he is referring to No. 17. We are ordering No. 18 within the next few weeks. My speech will make it clear to the House that the Government are doing far more than the previous Labour Government did for conventional expenditure on the Navy.
Important as nuclear submarines are, conventional powered submarines should not be regarded as their poor relation in any way. In the shallow waters and acoustic conditions of the continental shelf and the Mediterranean, our diesel submarines have a degree of invisibility that is equal to, and indeed sometimes greater than, a nuclear powered submarine.s
We attach much importance to making progress with the new class of 2400 conventional submarine to replace the Oberons, the newest of which has been in service for

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16 years and the oldest for 23 years. We were, therefore, very glad to announce the order for the first of class 2400 boat earlier this month.
I wish to refer to the Trident programme. It is a matter of regret, and indeed of some surprise, that Trident continues to be opposed by the Opposition parties. It is a matter of surprise because the NATO and British defence case for Trident, which the Opposition parties oppose, is essentially the same as the defence case for Polaris and for Chevaline, which they supported. The threat and the defence realities have not changed—it is simply that the Opposition parties have changed.
Since June I have, of course, been reflecting on the whole rationale of the possession of nuclear forces, and especially on the possession of strategic nuclear forces. The best exposition of that rationale that I have found is as follows:
"Strategic nuclear forces constitute the ultimate deterrent. Without them NATO's other forces would not present a credible deterrent to the Warsaw pact, with its strategic nuclear arsenal. Thus they help to deter attack at any level, and would also deter attempts to escalate a conflict should one begin.
But the possession of nuclear weapons is not in itself sufficient to ensure deterrence. It must be made evident to a potential enemy that we would be prepared to use them if we had to. Therefore, as an essential part of its defensive strategy, NATO has developed plans and procedures for the use of nuclear weapons.… At the strategic level, recent changes in American targeting policy give the President a more flexible range of retaliatory options against Warsaw pact military targets, thereby making the threat of NATO retaliation more credible than if the only option available were to strike cities. NATO can, therefore, use its nuclear weapons in a controlled and effective way. Deterrence becomes more credible, and as a consequence it is less likely that NATO would ever have to use nuclear weapons at all.
This strategy and these forces not only deter aggression against western Europe; they also protect members of the Alliance from attempts at coercion by the threat of attack, and from other forms of direct and indirect political pressure deriving from military power. In this way, the Alliance preserves for all of its members the right to pursue their own destiny."
I could not improve on that exposition. Those are the words of the 1976 defence White Paper, published by the Government of which the right hon. Member for Lewisham, Deptford (Mr. Silkin), who leads for the Opposition on defence matters, was a member. It was published by the Government of which the right hon. Member for Plymouth, Devonport (Dr. Owen), who now leads the Social Democratic party, was a member. It was published by the Government about whose policies the leader of the Liberal party was sufficiently enthusiastic to perpetuate in office.
The case for the NATO strategic deterrent and for Britain's contribution to that deterrent is as compelling today as it was in 1976, and, although others may find it necessary to put expediency before responsibility, that is not the case on the Conservative side of the House.
Mr. John Silkin: The Minister did me the courtesy of mentioning my name. I had not intended to intervene in his soliloquy, but now feel that I should. What percentage of new naval equipment does the Minister think the cost of Trident will average in its peak years? Does he agree that it is 50 per cent? The Secretary of State's predecessor agreed that figure.
If that is the figure, and if the choice is between a strong conventional Navy and a strategic nuclear weapon already in the possession of our allies—nothing in the defence
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White Paper that the hon. Gentleman quoted states that Britain should have it, simply that NATO should have it—why are we wasting our money on a status symbol that is not of the slightest use to the Alliance?
Mr. Stanley: I am grateful to the right hon. Gentleman for confirming his endorsement of NATO possessing nuclear weapons. Having endorsed that, it is not possible to pursue an argument of principle against Britain having nuclear weapons. The next part of my speech deals with the practical question of the relationship between the cost of our nuclear programme and the cost of our conventional programme.
I wish to touch on one aspect of the Trident programme. I hope that we shall not hear in this debate, as we have heard in the past—although I may be disappointed, having listened to the right hon. Gentleman's intervention—Opposition Members saying that Trident should be scrapped to increase Britain's spending on conventional defence. Coming from the Opposition, that line is particularly rich.
The fact is that the Opposition campaigned at the last election for a massive slashing of Britain's conventional defences. They committed themselves in their manifesto to bringing Britain's defence spending down to the average of the major European members of NATO. That would have meant that Britain's defence budget would have to be cut by at least one third, which would be a cut of about 10 times the cost of Trident over its procurement period.
What is quite clear is that the Opposition are firmly committed to a defence policy of both depriving Britain of her nuclear deterrent and of slashing Britain's conventional defences at the same time. Both would be equally irresponsible.
I come now to the issue of surface ships.
Mr. Silkin: Will the Minister answer my question? He said that in his speech he would deal with it.
Mr. Stanley: I have already answered an important aspect of the right hon. Gentleman's question. I have shown that the degree of cuts to which he and the Labour party committed themselves at the last election was about 10 times the cost of the procurement of the Trident programme.
The overall cost of the Trident programme, over the whole of the procurement programme, represents about 3 per cent. of the total defence budget and about 6 per cent. of the equipment budget. Those are the figures over the procurement period.
Mr. Silkin rose——
Mr. Stanley: I have already answered the right hon. Gentleman.
Mr. Silkin rose——
Mr. Speaker: Order. I am not sure whether the Minister is giving way.
Mr. Stanley: I shall give way.
Mr. Silkin: The Minister obviously did not hear what I said; otherwise he would not have claimed to have answered me. I asked him whether he would corroborate what Sir John Nott said, which was that new naval equipment during the peak years of Trident—that is five peak years, not spread over 100 years, 40 years, or 80 years—equalled 50 per cent. of new naval equipment. Is that correct? Was Sir John Nott speaking the truth?
Mr. Stanley: I should have to examine what Sir John Nott said. Nevertheless, I can point out to the right hon. Gentleman that it is completely misleading to try to articulate a point of policy that is based on the most extreme manifestation of the profile of cash flow. It must be judged over the entire procurement period in relation to total defence and equipment spending. As I have already said, the burden of the Trident programme is relatively small on those two counts and it is a fraction of the total reductions in conventional spending to which the right hon. Gentleman committed himself at the general election.
I shall now deal with surface ships and begin with what has been and remains the most problematical area—destroyer and frigate numbers. It might be concluded from what I have been saying about submarines that we could, with advantage, put still more of our Navy below the surface. However, I believe that that would not be right. Potent as submarines are, they have their own limitations. They can complement, but they cannot replace, surface ships.
The Royal Navy needs its surface ships to maintain its balanced capability. The question is how many and in particular, how many frigates and destroyers, which comprise 90 per cent. of the hulls of the major units in the surface fleet?
My right hon. Friend the Secretary of State and I have, of course, considered most carefully, following the Falklands conflict, what is the optimum long-term size of the destroyer and frigate fleet within the finite limits of the defence budget. We have concluded that the judgment made in 1981—that a fleet of about 50 should be the aim—was the right one. Significantly more destroyers and frigates could be accommodated only by making substantial cuts in either numbers or capabilities elsewhere in the naval programme and that would not be justified.
I ask those who think 50 is too few to consider these points. First, the numbers business ignores the impressive qualitative improvements that are being made. The new ships that are replacing those coming out of service and those which were lost in the Falklands war represent a major advance in capability.
Take the type 23, the approved design of which was announced in October, and compare it, say, with the Leander that it will replace. The type 23 frigate will have far greater offensive power and will be a much more efficient ASW platform than the Leander. It will have a markedly reduced radar "signature" due to its unique design features. It is planned to have an EH101 helicopter, of a vastly more advanced capability than the Leander's Wasp. It will have greater sustained speed, and longer endurance between refuelling. It will also have an electronic warfare, sonar, and communications fit greatly superior to those on today's Leanders.
I could go on, but I think that it is clear that a destroyer/ frigate force of 50 in the 1980s will have a hugely improved capability compared with the same force of even a decade ago.
Mr. Paddy Ashdown: I am grateful to the Minister for giving way, as he has already done so several times. Before he leaves the issue of numbers, and as he has drawn comparisons with the building programme under the Labour Government, does he accept that the Conservative Government have built only three major ships as compared with Labour's 15? Bearing in mind the
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average life expectancy of a modern ship—20 years—does he agree that, unless the building programme is significantly increased, a surface fleet of about 20 ships rather than 50 can be predicted? Furthermore, does he agree that if he now speeds up the programme to reach the levels of which he is talking he will have to do so during the peak period of Trident expenditure—towards the end of this decade? Does he agree that that is why the fact that Trident will represent 50 per cent. of expenditure at that point is so vital for future naval procurement?
Mr. Stanley: I assure the hon. Gentleman that his figures as to the direction of the destroyer and frigate fleet are without foundation. Our aim of 50 ships is fully capable of being accommodated within our programme. A substantial volume of orders is in progress.
The second point that the House should bear in mind is that we are looking at ways of supplementing our present destroyer/frigate fleet. There are certain peace time tasks that are traditionally carried out by destroyers and frigates but that do not necessarily have to be carried out by a ship of such sophistication. I am thinking of certain facets of sea training such as navigation. There is some scope for having those tasks carried out by non-RN vessels. Thus we are, for example, currently chartering MV Northella to carry out navigation training and trials in the Clyde area. We are also deploying three offshore patrol vessels to the Falkland Islands.
I have asked the Navy Department to investigate whether that use of less sophisticated ships to carry out certain destroyer and frigate tasks could sensibly and cost-effectively be extended.
Thirdly, we have the option of running on for short periods existing destroyers or frigates that are due to come out of service. I can announce today that we have decided to run on for one further year two Rothesay frigates that were due to pay off in 1984. That will give us a total of 55 destroyers and frigates in the running fleet next year.
Mr. Peter Viggers: I do not know whether my hon. Friend intends to deal with merchant shipping and the widely felt concern that that fleet should be considered part of our surface defences in times of emergency. Is he aware that we can offer patronage to civilian ships by offering them work in runs to the Falklands? Are all of those contracts being offered to British ships? If not, why not?
Mr. Stanley: We are offering the maximum possible number of charter opportunities to British ships. We always use British ships if our requirements can be met satisfactorily by a ship in the British merchant marine. I shall refer to the merchant marine's contribution to naval support later. My hon. Friend is right to say that it is important.
The constraints on the numbers of destroyers and frigates are not created simply by our submarine commitments. They are also created by the need for other specialist surface ships that are imperative for a balanced Navy.
More than 15 years ago, the then Secretary of State for Defence, the right hon. Member for Leeds, East (Mr. Healey) said—he will not like to be reminded of this:
"we would not be justified in prolonging the life of our carrier force after 1975 with a new ship in the light of our likely overseas commitments in the longer term."—[Official Report, 5 July 1967; Vol. 749, c. 1802.]

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Fortunately, the Navy, having lost the carrier battle with the right hon. Gentleman, eventually won the war. Without Invincible and an adapted Hermes, the recovery of the Falklands could not have been contemplated. The Government's policy is to have two carriers operational at any one time. That remains our position.
The Falklands campaign also demonstrated the immense value of HMS Fearless and HMS Intrepid in launching and supporting amphibious operations. We plan, therefore, to maintain HMS Fearless and HMS Intrepid in service for the foreseeable future. The great value of these ships is being demonstrated again right now. HMS Fearless has arrived off Beirut today. She will provide invaluable logistical support for our British contingent.
Another element of the Navy's amphibious forces, the logistic landing ships, also proved of the utmost worth in the Falklands. We are hoping that it will be possible to repair the Sir Tristram and we plan to order a replacement for the Sir Galahad.
Mr. Edward Leigh: Will my hon. friend comment on the lessons of operation "Corporate"—that there is an urgent need for a point defence system for Royal Navy ships? Will he also comment on the Ministry of Defence report, which was published earlier this year, showing that there will not be royal dockyard space for such refitting until 1986? Does he intend to implement the recommendations of the Speed report, which suggested that there should be a substantial and systematic expansion of work placed in the commercial sector?
Mr. Stanley: I entirely agree with my hon. Friend about the importance of point defence. He will be aware that we have significantly enhanced point defence on our major ships, especially on the Invincible class carriers, since the Falklands conflict. Another key aspect is airborne early-warning radar. I shall refer to that soon when I deal with the Fleet Air Arm.
The other key specialist ships in the surface fleet are our mine countermeasure vessels. The Soviet Union continues to devote much effort to bringing in new types of offensive mine, which may be laid by aircraft, submarines, or surface ships. The Soviet Union is thought to have some 26,000 mines, and has far and away the largest offensive mining capability of any country in the world.
The Royal Navy cannot deal with the Soviet mining threat in European waters on its own, but it has to make a significant contribution to NATO's mine countermeasures forces. Mine clearance is vital to the protection of our own high-value naval assets and to the protection of the high-value reinforcement ships.
I am glad to tell the House that six of the new Hunt class multirole mine countermeasures vessels have now entered service. A further five are under construction and more vessels of this class are planned. We hope also to place, in about 12 months' time, an order for the first of class of the single-role minehunter which will be capable of operating in deeper water than earlier classes of minehunter. In addition, the first four vessels of a new fleet minesweeper for the Royal Navy Reserve are under construction and orders have been placed for a further six.
Vital to the Navy's surface ships today are its integral aircraft provided by the Fleet Air Arm. The Sea Harrier
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proved in the Falklands that it is an aircraft of exceptional capability, and unique versatility. Since the Falklands conflict, we have placed orders for replacements for the seven that were lost, and have ordered seven more.
The Fleet Air Arm's Sea Kings are still the most capable ASW helicopters at sea in any navy. The House will be glad to know that the introduction of airborne early warning into the Fleet's capability is proceeding. Two Sea King helicopters have already been equipped with a modified searchwater radar and are available for the carriers. Each carrier will have a flight of AEW Sea Kings. That will do much to improve the fleet's defences against low-flying aircraft and missiles.
I wish particularly to mention the Fleet Air Arm's ground crews. They work all hours and, when at sea, sometimes in grim weather conditions. Without the skill, determination and dedication of those ground crews, the Fleet Air Ann would never achieve the remarkable performance that it does.
Finally, the ships of the Royal Navy could scarcely operate at all without the lifeline represented by the civilian-manned Royal Fleet Auxiliaries. Just how vital the RFAs are was made vividly clear by the events of 1982.
The role of the RFAs, supplemented by chartered merchant ships, is expanding rather than contracting. Next February, we shall be adding a helicopter support and supply ship, the Reliant, to the RFA fleet for the first time, using the Arapaho helicopter support system leased from the US Navy.
We now have a forward repair ship permanently in the Falklands, and we are currently using a total of 27 merchant ships taken up from trade, the so-called Stuft ships, to supplement the RFAs. The replacement for the one Stuft ship lost in the Falklands, the Atlantic Conveyor, is being built in such a way as to make her easily adaptable for use in support of the Royal Navy if required. I should like to express my appreciation of the continuing support that the Navy receives from the Merchant Marine and from our merchant seamen.
I have devoted much of my remarks to the Navy's ships. I want to conclude by referring to the Navy's other outstanding asset, which is its people—the men and women in the service. Writing to the First Sea Lord about 200 years ago, Nelson said:
"It will be found, and I know it is, that whenever a large convoy is assembled at Portsmouth and our Fleet is in port, no less than 1,000 men desert from the Navy; and I am sure one third of this number, from loss of clothes, drinking and other debaucheries, are lost by death to the Kingdom."
We have come some way since then, I hope, particularly in Portsmouth.
In the Navy of the age of missiles, ultra-sophisticated electronics and sonar, satellite communications, VSTOL aircraft and nuclear power plants, every ship and submarine at sea has to be a veritable floating college of advanced technology.
Never has the decision-making process on board ship and on naval aircraft been more intellectually demanding or, in the guided weapon age, more instant. But in responding so capably to the intellectual demands of the electronic age, the Navy has lost none of the shipboard spirit, the sense of service and the personal courage that have been its sinews and its hallmark for so long. Those enduring qualities could not have been demonstrated more vividly than in the south Atlantic last year. Those qualities

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are still necessary. The rigours of serving at sea are certainly less severe than they were, but no one should be under any illusion that life in the Navy of today is soft, even in peace time.
Those who serve in the small ships—the minehunters and the fishery protection vessels—may be tossed about by the elements with almost as much violence as ships have been down the ages. A particular mention is warranted of those who serve in submarines. They may be able to insulate themselves from the elements, but, even in today's submarines, living and working conditions are extremely confined and have to be coped with for months at a time. Our SSBN crews can never, for obvious reasons, have their patrols lightened by visits to foreign ports. Both in our SSN and in conventional submarines, the problems of confined space are tending to increase rather than to ease as more and more sophisticated additional equipment, along with the personnel to operate it, is having to be squeezed into them.
Service in the Royal Navy still very much has its rigours. There is no single group in the Royal Navy more closely associated with rigour than the Royal Marines. Having found a half-mile yomp without a pack across those killing Falklands tussocks quite a sufficient constitutional bit of exercise for myself, my admiration knows no bounds for those who went 60 miles with 100 lbs. or more on their backs.
The Royal Marine commandos are the key components of our amphibious forces; they are our specialists in Arctic warfare and they provide, through the Special Boat Squadron, a very important element of our special forces. We see a continuing and full role for the Royal Marines.
In the Army debate, I said that our reserves were vital. The same is equally true of our Royal Navy and Royal Marine Reserves, both the ex-regulars and the Volunteer Reserves. On being called up, they would provide approximately 11,500 additional naval and Royal Marine personnel.
Those reservists would have key roles to play in the naval control of shipping, in naval command and communications, in providing additional aircrew and groundcrew, and in providing valuable reinforcements for the marine commando component of the United Kingdom-Netherlands amphibious force. I can tell the House that we are planning to expand the Royal Marine Reserves by 400 men.
I am sure that the House will agree that we are exceptionally well served by those who have dedicated their careers, or in the case of reservists their spare time, to the Royal Navy. Whether they serve in the surface ships, the submarines, the Fleet Air Arm or the Royal Marines, they deserve our gratitude and our admiration.
I believe that the Government can fairly claim that they have done well by the Navy. Since May 1979, 34 warships have been ordered to a total value of about £2,000 million. War stocks have been improved, as have communications equipment and electronic warfare capability.
Those improvements and many others reflect the fundamental importance that the Government attach to Britain maintaining a balanced and highly effective Navy. Our Navy today is both proud and capable—rightly proud and deservedly capable. At the end of the last century a naval historian wrote:
"Throughout our long history there have been periods in which the gifts of the sea have been flouted, entailing in some cases a swift nemesis."
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The House can be assured that as far as this Government are concerned, the gifts of the sea, far from being flouted, are highly prized.
4.39 pm
Mr. A. E. P. Duffy: The Chancellor of the Exchequer's recently announced cut of £280 million in next year's planned defence spending came on top of the £250 million cut for this year. which he sprang unceremoniously on the Secretary of State for Defence in July. There is widespread expectation that the Chancellor will seek further savings. Britain will not continue its pledge to its NATO allies to increase its defence spending by 3 per cent. a year in real terms after the commitment ends in 1986, as the Minister confirmed earlier this month. There are also doubts about the adequacy of the funding currently projected, because present cash limits have been set on assumptions about the future rate of inflation and the future cost of military hardware, which remain controversial.
The escalation of equpment costs is horrifying From one generation to the next the cost of new equipment shoots up: for frigates by a factor of two and a half. The annual rate growth of defence technology costs exceeds the rate in growth of resources available. The first is rising by 10 per cent. a year and the second by 3 per cent. a year. There is no arithmetical way in which we can both contain real increases in costs of that order within our present defence policies and take on Trident. It is impossible and one day we shall see the effects of this on the Royal Navy.
With the defence budget still under pressure on two fronts—spending and costs—the Minister may face another major defence review. If he does, the piecemeal approach of the past will not suffice. Britain's forces committed to NATO are already too thinly spread to be truly effective, and a thorough reappraisel of British defence policy is required.
Since the formation of NATO in 1949, successive British Governments have striven to maintain a balance of defence capabilities within the framework of the Alliance. During that period there have been several major defence reviews and each time the Royal Navy has been the chief victim. Cost-cutting by the Government and interference by the Treasury in technical aspects of warship design have often led to ships being built without the armaments which they were designed to have. The performance of HMS Sheffield and HMS Coventry in the Falklands conflict are cases in point.
The 1981 review proposed that the Navy's budget should be cut by as much as 57 per cent. and, therefore. not for the first time, when difficult decisions had to be made about the nature of forces that could be sustained within a budget, it was Britain's maritime capability that was sacrificed.
I shall consider the way in which the constraints on defence costs and spending are impinging on naval procurement and increasingly calling into question the operational concepts that underlie the weapon systems involved, and thus shall point out the need for a reappraisel of priorities.
Because of Britian's geography and our demonstrated maritime capability, the United Kingdom is accepted as the maritime leader of NATO in the eastern Atlantic. No other navy could meet that requirement. The United States navy is fully committed. NATO is thus mainly dependent upon the Royal Navy providing as much as 70 per cent.

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of the immediate ready forces in that area. We provide it at a cost of 23 per cent. of the defence budget. That compares with our provision of 10 per cent. of the allied forces in the central region for 41 per cent. of the defence budget. The British forces committed to Germany are absorbing a growing percentage of our defence costs—it will be as much as 50 per cent. by the late 1980s. It will become increasingly difficult to defend that order of priorities, especially if the present shortfalls in naval force levels continue.
The hon. Member for Beverley (Sir P. Wall) was right to remind the Minister at the beginning of the debate that he, I, other NATO parliamentarians and hon. Members from both sides of the House undertook a tour around the Atlantic basin a few weeks ago. We are aware, as are his ministerial colleagues in the Ministry of Defence, of the shortfalls in many NATO countries of naval force levels, in addition to the one that the hon. Gentleman mentioned. It is not in the public interest for either of us to mention them, but the Minister must be aware of them. In the light of what we learnt, the section of his speech that followed the first intervention this afternoon was complacent in the extreme.
The Navy will be unable to maintain its contribution if the reductions in fleet strength proposed in the 1981 defence review are implemented in full. The then Secretary of State for Defence, Sir John Nott as he now is, defended his review on the ground that it merely proposed a switch of maritime resources from the surface fleet towards submarines and maritime patrol aircraft, as we heard again from the Minister today. Sir John Nott insisted—presumably it was the tenor of the Minister's argument—that Britain's maritime capabilities would improve as a result of the review.
To support that, Sir John Nott, and certainly by inference the Minister, said that the number of SSNs would increase by 1990. In my intervention I said that the previous Government had been responsible for the ordering policy down to No. 17 and that this Government only recently placed an additional order. I do not know whether the Minister is aware of that. He said that I was wrong, but other hon. Members know that I am right, and no doubt he will take an early opportunity to check that matter. Some of his hon. Friends know that, apart from SSNs, all that Sir John Nott could promise us in addition were three MPAs.
Does any Conservative Member believe that one more SSN and three MPAs are sufficient recompense for the cut in the fleet that was envisaged in 1981? We understand why the cut is not yet discernible, but it will be from 1986–87 onwards. In return for the loss of about one third of the Navy's operational surface fleet, a large part of its afloat support, and the closure or rundown of two major fleet bases, we shall receive an additional three MPAs and one further SSN.
The present Secretary of State said in The Times on 24 August this year that, if he had carried out the 1981 review, he would probably have taken similar decisions. Yet Sir John Nott's long-term plan, unaltered by the right hon. Gentleman, was to halve expenditure on new naval construction in real terms by 1985–86. That is equivalent to the loss of 16,000 jobs on warship and auxiliary vessel building, and more than twice that number in the supporting equipment industry. The Minister said nothing
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about jobs, but he must know that the loss of jobs on that scale will threaten the existence of famous warship building yards, with a loss of skills and facilities that can never be recovered once lost.
Analysis of the Soviet's recent military growth suggests that it has been systematically acquiring capabilities that are relevant to more than the continental European conflict. The right hon. Gentleman only touched on that subject. He could have gone further, and other speakers in the debate might do so. There is no time for me to do so, but I am well aware of the extent and changing nature of the threat. To counter the threat effectively, the military resources of the entire Western Alliance must be much more co-ordinated than they have been so far. I hope that the Under-Secretary of State for Defence Procurement will say something about progress on the long-term development programme when he replies to the debate.
Occupying as it does a crucial geographical position as the bridge between the North American and European components of NATO, Britain has a vital role to play in ensuring the effectiveness and cohesion of the Western Alliance in this new military era. Furthermore, as one of the two most densely populated industrialised islands in the world, Britain has many different and often interrelated maritime interests. Most have declined to seriously low levels in recent years, and continue to do so.
Over the past eight years the British merchant fleet has decreased by about 41 per cent. and has now dropped to eighth place in world tonnage, with about 19 million tonnes. We are losing seamen at the rate of 5,000 a year, and we are also losing facilities for training. In the same period during which Britain's mercantile fleet decreased by 41 per cent. the Soviet merchant fleet increased by 31 per cent., and that comes under the Soviet Ministry of Defence. The fleet reduction proposals of the 1981 review implemented in full would mean that the Navy would become incapable of fulfilling its tasks in NATO or beyond its boundaries in any protracted non-nuclear conflict.
One might be tempted to believe that the Falklands conflict had vindicated Sir John Nott's review, because it demonstrated the vulnerability of warships. Surface warships are undeniably so much more at risk from air or missile attacks than they were, but not unacceptably so when the right balance of defences is provided. Tanks, aircraft, and even submarines are also vulnerable if not properly protected.
In reality, the 1981 review, entitled "Way Forward", was but a continuation of the policy that the United Kingdom should view the support of a continental European strategy as a first priority, rather than continuing the maritime strategy that had served the country effectively over the past 200 years. It is worth noting that that was not the position in 1954, when the Brussels treaty was signed, for the commitment to 55,000 men in Europe was not at that time the primary test or commitment for British forces. It has only grown that way over the years because of the apparently mystically held view of that figure of 55,000. An original commitment of 12 per cent. of the United Kingdom's defence resources has grown to 43 per cent. today and it is still growing.
On the other hand, the Falklands campaign demonstrated once again the flexibility of maritime power by its presence and the wide range of options that it offers diplomacy. This, presumably, is also the view of the United States, for no longer does that country see the

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central front as the primary risk area, and no longer are its carrier battle fleets automatically available to the Pacific or Atlantic fleet commanders. These are all now deployed from the defence department and priority is now given in Washington to the establishment of a worldwide rapid deployment force and the building up of the United States navy. The role of the Royal Navy in these changed circumstances, when we can no longer depend on the United States navy being in the east Atlantic—if ever we should go on to reinforced alert the United States navy will be at sea, but it might be anywhere in the world rather in the east Atlantic—is even more critical to the credibility of the Alliance's maritime strategy.
This development serves to remind us that it is primarily the maritime forces that can support a flexible global strategy, but those maritime forces have been consistently run down. While the gradual degradation of naval and long-range air capability has continued, forces committed to Germany have absorbed a steadily increasing share of defence resources. The Times summed it up well over a year ago, on 5 November 1982, in an article that said:
"The hallmark of the 1981 Defence Review was inflexibility, born of an obsession with the Soviet threat in Central Europe. Britain and her NATO allies seem unaware or unconcerned about the threat to their wings and to their rear. It was strange for a country with such a well-tried maritime tradition, and maritime forces incomparably larger and more effective than the rest of Europe put together, to convert the watch on the Rhine into a case of tunnel vision."
Admittedly, the Government published a post-Falklands defence White Paper, Cmnd. 8758, but that did not amount to a major reversal of policy. Both Sir John Nott and his successor have consistently argued that the Government's defence policy remains based on the 1981 review, and we heard that again from the Minister this afternoon. The Treasury has released some extra money, but much of it will be used simply to replace war losses. However, we are still waiting, and there was no word this afternoon about the fourth frigate or about the further ordering of the type 22 to complete the replacement of four destroyers or frigates. Perhaps we shall hear something later tonight.
Apart from that, we have Invincible, for which we must be grateful. Despite the fine words that we have heard from the Minister about the role of carriers, that view was not popular at the top of his Department two or three years ago. I remember the right hon. Gentleman's predecessor saying that no one in his position would again order a carrier. He wanted to take steps to dispose of Invincible, but at least we still have her, and we must be grateful for that.
The amphibious assault ships, Fearless and Intrepid, have been retained, but that is no thanks to Ministers or their predecessors. All thanks are due to the hon. Member for Beverley, who did more than anyone else to argue the case for the retention of Intrepid and Fearless. No ministerial colleague of his supported him.
AEW Sea Kings are being converted, and there will be some improvements in some weapons systems on ships. All are welcome and necessary, but they do not amount to much. They do not materially affect the basis of United Kingdom strategy or the final planned rundown of the thinking on the support organisations. They do not amount to much because the plain facts are——
Mr. Stanley: I am listening to the hon. Gentleman's remarks with interest, and he clearly feels that there is
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insufficient expenditure on the Royal Navy. What is his estimate, if the Labour party had been returned to power last June—committed as it was to reducing defence expenditure by one third—of the extent of the reduction of the fleet necessitated by his policies?
Mr. Duffy: I can refer the Minister to a headline saying "A bigger Navy under Labour", which was about a speech that I made on the campaign trail as Opposition defence spokesman in June, in Plymouth, Devonport, as well as in Portsmouth and in Barrow. My right hon. Friend the Member for Lewisham, Deptford (Mr. Silkin) made similar speeches in other parts of the country.
Mr. Stanley: I am grateful for that clarification of the Labour party's defence policy. Would not reconciliation between his campaign speech and the Labour party's manifesto commitment to reduce defence spending by one third mean that a Labour Government would mean no Army and no RAF?
Mr. Duffy: We never said one third. That is the construction that the Conservative party puts on our defence posture. As I have said before from the Dispatch Box, for example during the debate on the defence estimates in July, the treatment by some Conservative Members, particularly Ministers, and the press, of Labour's defence policy was scandalous and at times scurrilous, and not in the public interest. The Minister's intervention this evening was not scurrilous, but it echoed the other comments.
Let me join the Minister in the numbers game, because he promised at the beginning of his speech that this would be at the heart of what he had to say. I am sure that he did not satisfy all of his hon. Friends, and he did not satisfy some of us. The plain fact is that the United Kingdom is already about 40 per cent. undersubscribed to our NATO naval force levels. It is easy to say, as Ministers do, that we contribute 70 per cent. to the maritime ready forces in the eastern Atlantic, but they never stop to say what those requirements are. It is 70 per cent. of what? We are never told what the "what" is.
We are contributing as little as 40 per cent. of what we should be contributing. This explains why the supreme allied commander, Atlantic said during a visit this spring that he needed another 65 escorts in the North Atlantic. I am sure that the right hon. Gentleman will not quarrel with Admiral Wesley MacDonald, who said that in late August. We have been aware of this shortfall for some time. Yet we find in paragraph 3.30 of the defence statement:
"Numbers are expected to decline to about 50 later in the decade."
Could any statement be more complacent?
According to Admiral of the Fleet Lord Hill-Norton, speaking in the other place on 25 October, numbers by that time will be about 40, and he went on to describe them as "mostly obsolete and unreliable". That is confirmed by Admiral Sir Anthony Griffin, former Controller of the Royal Navy. His analysis is critically dependent on the assumption that the Leander class frigates have an operational life of 20 years. He also assumes that at any time about one third of the escorts will be undergoing service in the dockyards—the dockyards that are left—or possibly deployed elsewhere. This could leave the numbers actually available in the Atlantic as low as 20.
The Minister did not reply very convincingly to a similar argument from the hon. Member for Yeovil (Mr.

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Ashdown). He did nothing to reassure us when he went on to say that the Royal Navy would be running on two Rothesays for a further year. We all expect that all the Rothesays will be gone, anyway, by the end of the decade.
Mr. Robert Atkins: I cannot listen any longer to the hon. Gentleman wriggling in response to this question. I shall pose it again. How does he justify the cuts that his party talked about during the last election campaign, together with his assertion that he would curtail defence spending to that of an average of NATO, and yet argue, as he is now, that we should keep dockyards open and spend more on ships and equipment throughout, when the answer that he may give about Trident represents about 7 per cent. of the overall defence budget? It does not add up.
Mr. Duffy: I appreciate why the hon. Gentleman does not understand Labour's defence policy. It never got a proper airing. It never got fair treatment. It never got objective coverage. It did not get through to the hon. Gentleman up in Lancashire. I can only repeat that on the campaign trail I was in no doubt that, under Labour, we would have more ships and a bigger Navy. That was always the view of my right hon. Friend the Member for Deptford.
The Minister said nothing about a NATO frigate. I hope that his colleague will do so later. In the new edition of "Jane's Fighting Ships", Captain John Moore refers to the "wholesale emasculation" of the Royal Navy and says that it lacks
"the necessary balance for general maritime operations."
These are men of unquestioned integrity, objectivity and professional knowledge. I do not know of anyone outside the House acquainted with this subject who takes any other view and who would support what the Minister said today.
Mr. Richard Ottaway: The foreword in "Jane's Fighting Ships" takes no account of the financial implications. The author assumes that there is a bottomless pit. He is totally glib and does not accept reality.
Mr. Duffy: It so happens that the hon. Member for Nottingham, North (Mr. Ottaway) and I were queuing in the Reference Library last Thursday night to Xerox copies of that preface. We looked at it together. I must ask him to check what he has just said.
In face of such charges, the Secretary of State usually points to the current level of spending on warship construction. That is his alibi. He never qualifies his assurances by saying how much the present building programme is dependent on orders placed by the Labour Government or that it is critically dependent on the withdrawal of ships from active service and disposals. The previous Minister of State for the Armed Forces said in reply to the hon. Member for Ashford (Mr. Speed) a year ago that 10 destroyers and frigates then in the active fleet were to go by the end of this year, by which time only a destroyer and two frigates then building would have been added to the fleet. Coupled with the loss of four ships off the Falklands and four sold earlier last year, the Royal Navy's surface fleet by the end of this year will have been reduced by 18 destroyers and two frigates in two years, in which time only six comparable new ships will have been completed.
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These global assurances about the volume of spending, or, as we heard at the end of the Minister's speech, about the volume of ships under construction never take account of the movement of ships out of the fleet as well as in, out of it for reasons of disposal as well as dispersal. We are never given the picture that really matters. I can never recall the House being given that kind of picture by Conservative Ministers. I do not know whether they have it, but I invite them, in the interests of their own awareness as well as that of their colleagues, to look at the ships that we have now and at a possible complement by the end of the decade in all the categories mentioned by the Minister. He will see that, far from having an operational fleet of 55, as he claims, on any showing the most that we can hope for by the end of the decade is 40. Then, if we remember what Admiral Griffin warned us about—the possibility of some ships being held in dockyards longer than expected or being deployed elsewhere—the number available for assigned NATO roles may be, as both Lord Hill-Norton and Sir Anthony Griffin claimed, as low as 20.
It is no wonder that on these matters the Government were accused in The Times last year of sleight of hand.
Naval manpower, which was to have been reduced by 10,000 by 1986, is also declining. Why is no further mention made of the redundancy plans outlined in the 1981 White Paper? In the period 1 April to 31 December last year the Royal Navy was permitted to recruit only 1,665 officers and men compared with 3,001 during the same period in 1981. The number leaving the service in the same period was 3,404. What is manning policy today, and how is it affecting the manning of ships?
What effect is all this confusion having on the dockyards? The warships depend on support from the royal dockyards. Assuming that all dockyard work can be predicted accurately, and assuming an increase in productivity, the resultant load of the reduced fleet might just fall within the theoretical capacity of Devonport and Rosyth, supplemented by the restricted services available at Portsmouth.
Experience has shown that both those assumptions are unlikely to be realised. It is the belief of many who are in a position to know—again, people outside the House who know and whose judgment cannot seriously be challenged by any Minister—that the dockyards may have already been run down below a level that would enable us to deal with another Falklands emergency.
What effect is all this having on British shipbuilders? British shipbuilding stands at the crossroads. The merchant shipbuilding yards are unable to compete on equal terms with far eastern yards for the few orders available. The warship building yards are under the threat of privatisation, and the offshore, ship repair and engine building divisions have little prospect of survival in today's bleak economic climate. How are we to preserve the essential core of men and yards without urgent Government help? There was no mention of that by the Minister.
What of ships taken up from trade? The role of such ships for the support of future naval operations, as was demonstrated so magnificently during the Falklands war, is scarcely mentioned in the defence statement. Their availability is not discussed. The availability of reliable British crews to man them is not mentioned. That is understandable if the defence Estimates are to be considered in isolation, but it is, none the less, unrealistic

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to omit them from the equation. Have the Government considered subsidies for specific ships, as they did in the case of the QE2?
Who ensures that merchant ships of the type required for defence purposes are available and suitably equipped to meet all contingency plans? Who funds what is needed? Who is responsible for the availability of crews? The trend in the decline of the British merchant marine is alarming economically, and it is alarming politically and militarily.
If Britain clearly needs an adequate Royal Navy—the Minister did not once use the word "adequate" when he dealt with naval force levels—to protect our vital trading links, it also has other essential maritime needs. They comprise: first, a healthy deep sea Merchant Navy; secondly, a short sea and coastal trading fleet; thirdly, a fishing fleet to supplement maritime forces; fourthly, an efficient offshore capability to take the best advantage of those rich natural resources lying on the seabed, as well as under it; and, fifthly, an efficient shipbuilding and ship repair capability.
Labour would establish clear strategic priorities, with political and economic realities marching in step. That is our policy. It means taking a long and hard look at the spectrum of maritime activity. Warships, merchant ships, ports, dockyards, lead shipbuilding yards, the fishing fleet, offshore energy resources and pollution control are all interconnected. We would examine our maritime activities and their security, along with our basic defence priorities, against the background of NATO objectives and priorities. Not least, we would avoid any arbitrary reductions in our surface fleet which would threaten our credibility with our NATO allies and which would be saddening.
5.12 pm
Sir Patrick Wall: I am happy to speak after the hon. Member for Sheffield, Attercliffe (Mr. Duffy). He and I had a happy relationship when he spoke from the Government Bench and I was speaking from the Opposition Front Bench, and also in the North Atlantic Assembly, where I am the leader and he is the deputy leader. I agree with him to the extent that the 1981 cuts were a disgrace, and I hope that we shall never go back to them. I agree with him, too, that the Navy was saved by the Falklands campaign. I shall leave the matter there.
The hon. Gentleman wants a large Navy. So do land so, probably, do most hon. Members, if we could afford it. However, the majority of Labour Members do not want that. That was quite clear in the Labour manifesto. I know that the hon. Gentleman is sincere, but it is not the view of the majority of his party.
The hon. Gentleman implied that his party would save money on Trident by cancelling it and spending the money on the conventional Navy. It has already been said that, at the peak period, Trident would cost only 5 per cent. to 7 per cent. of our total defence expenditure. That is far less than the Tornado programme, which the Labour party backed. What guarantee is there that money saved by scrapping Trident would be spent on conventional defence? Certainly, if the Labour party were in power, it would be spent on social services, or something of that nature. In my opinion, Trident is essential for our strategic deterrent. If the hon. Gentleman does not believe that, he should ask the French. If he did so, he got an answer that he did not expect, but that I would.
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I want to say a word about the visit that the hon. Gentleman and I paid to the Atlantic bases. We learnt many lessons, and it is right that we should tell the House about them. Maritime strategy is of great importance to this country, and it is not always fully appreciated by Governments, of whatever party. In Washington, we talked to the Secretary of State for Defence, Mr. Casper Weinburger. He stressed the importance of NATO cooperation and the continuance of the 3 per cent., in real terms. I hope that the Minister takes that into account, because it is vital. Mr. Weinburger pointed out that latent American isolationism was growing, and that it would grow if Europe—and particularly this country—did not pull its full weight. He spoke of out-of-area NATO operations, already mentioned by my hon. Friend. We know that today we have ships in the middle east, the Indian ocean and on the way to south-east Asia.
In Norfolk, Virginia, we were received with military honours by SACLANT and his staff. He said that, in spite of the fact that the US navy was increasing its fleet by about 200 ships, he—SACLANT—could not carry out his requirements. He had to decide priorities. If he carried out one operation he might not be able to carry out another. For example, he would need three carrier air groups in the north Atlantic in time of war. Would they be available, or would they be in the Indian ocean or in the Pacific? There simply are not enough ships to go round to support the strike fleet and the convoys. The key area, as the hon. Gentleman said, is in escort vessels and, above all, their helicopters. Those helicopters are perhaps the main antisubmarine weapon today. One cannot have helicopters in the GIUK gap unless they are carried on ships. That is the argument for not scrapping any excort vessels until they are replaced by the type-23, which is taking an appallingly long time to complete. I know that the Government have done all that they can to hurry it up. I hope that they will have a good look at the Admiralty at Bath, which I visited on behalf of the Select Committee on Defence. It needs a good sorting out and reorganisation. The work there should be speeded up, because it is far too dilatory because there are too many committees.
In Keflavik, Iceland, we appreciate the importance of small island bases, which we have given away all over the world, like Gan and Masirah. We realised how important the GIUK gap had become. That gap can be defended only with a sufficient number of escort vessels, their helicopters, and, above all, maritime patrol aircraft, which SACLANT also said he was lacking.
My hon. Friend has already mentioned minelayers and minehunters. When we went to the Azores, another island air base vitally important in the battle of the Atlantic, we realised that there was not a single minesweeper in the whole of that island group. As my hon. Friend said, the Soviet Union is expert is minelaying and has the largest stock of mines in the world. Also, Oscar class guided missile submarines can fire their guided missiles from under the surface, at a range of more than 250 miles. How will they be tackled without adequate number of MPAs, SSNs and surface vessels?
In Portugal, Communism is only just below the surface. In my opinion, Portugal needs a boost from its allies, particularly its NATO allies. She needs new frigates. She cannot afford them. In any case they would take three, four of five years to build. The three Tribal frigates that are due

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for disposal could well be given to Portugal to augment her navy. That would be a great boost to the Portuguese, both to its navy and to its people, and to the NATO Alliance.
We saw what the Canadians and the French were doing in their efforts to co-operate with NATO. The tour ended with the other major NATO command, CINCHAN at Northwood. There again, it is the same story—too few ships, too few SSNs, too few MPAs, and a growing Soviet menace which could not be met except by a system of priorities.
I have been associated with the North Atlantic Assembly, the NATO Parliament, for about 12 years. Each year we go to NATO headquarters, either ashore or afloat, and we are told that the balance is tilting against NATO. I am beginning to wonder how far it can go on tilting, and how dangerous the situation would be if the third world war were to start.
I come now to what could happen. It is not beyond the bounds of possibility that the Soviet Union would try to pinch off northern Norway, and not attack central Europe. There could be a naval war without a major conflagration in central Europe. The Royal Marines, the Royal Netherlands Marines and the United States Marine Corps would bear the brunt of the fighting. But it could be a wholly naval war, and we in the EASTLANT would have to defend against 190 Soviet submarines based on Kola, of which 30 or 40 might be at sea. We might have to do so alone for at least the first few days until the American navy could get over to reinforce.
At the height of the anti-submarine campaign in the last world war, the Germans had a maximum of about 40 U-boats at any time at the peak of the battle of the Atlantic. They, of course, were not true submarines. Then, every ship was vital, and I beg my hon. Friend to remember how the purchase of the 100 obsolete American destroyers saved the situation in the last war. The Government should not scrap any surface ships until the new type 23 comes into operation. Old ships can be of use, just as they were in the last war. We need only think of the use that the Americans are making of their battleships, which are now about 40 years old. They are proving effective. Therefore, no escort vessel should be scrapped until it can be replaced.
The next few years are critical, and we must equip our ships with Sea Wolf. There are now many versions of Sea Wolf. Vulcan Phalanx is all very well, but it is a short-range weapon. Lightweight Sea Wolf should be positioned on each quarter of our aircraft carriers, otherwise they will be sunk either by Oscar class submarines or aircraft missiles in the first few days of any major war with Russia. Our ships must have defence against sea-skimming missiles.
Smaller ships must be equipped with surface-to-surface missiles such as Sea Eagle. I hope that permission will soon be given for a sea-based Sea Eagle. Our new frigates will have towed arrays, and our helicopters will be armed with Sting Ray torpedoes. That is probably the best way of dealing with the submarine menace.
Provision should now be made for our merchant ships, which are bound to be used, to be equipped with chaff dispensers. Helicopter platforms should be made available and these ships should be capable of being fitted with lightweight Sea Wolf. That system weighs only 6¼ tons, and I hope that preparations are going ahead to fit it to our
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merchant ships. The Minister has already referred to the Arapaho project and to the fact that container ships will make good auxiliary aircraft carriers.
All these matters should be discussed much more in the House. In the American Senate and Congress they are discussed for months on end, both in committee and on the Floors of both Houses. I commend Lord Hill-Norton's suggestion of a Cabinet Committee to co-ordinate maritime policy.
Like any hon. Member, I appreciate that our defence expenditure must be related to the development of our economy. The next three to four years will be the most dangerous. There is a power struggle in the USSR. Its economy is declining, it cannot feed its own people and there is unrest, not only in the satellites but in the component parts of the USSR. Mr. Andropov's successor may well have to choose between the disintegration of the Soviet empire and, indeed, of the Soviet Union itself, or aggression. If he thinks that he can get away with it, he may well choose aggression. It is up to us to ensure that he does not do so.
That is why there can be no cuts in BAOR. We cannot sacrifice BAOR as a means of increasing our maritime defence. If we do so, other NATO allies will follow and there will be disintegration of the central front. That would be utterly disastrous. Therefore, money must be found from elsewhere.
I firmly believe that money spent on defence in the next two or three years can avoid world war three. That is worth doing, because with world war three there will be no social services, education or pensions. Surely it is worth paying now to avoid that. We must therefore continue the 3 per cent. increase in real terms in defence expenditure. In fact, we should go further—General Rogers has asked for 4 per cent.—to increase our conventional capability and, thus, to make nuclear war less likely.
I know that the Prime Minister will be torn between the needs of the economy and the needs of defence, but, unlike the disasters of the 1930s, if defence gets priority world war three will be avoided. I am sure that that is the objective of every hon. Member.
One gap in our defences has already been closed by the deployment of cruise missiles and Pershing 2. We must now close the gap in the maritime sector. There is a great need for escort vessels, SSN and MPA as well as minehunters.
As a maritime race we neglect our sea defences at our peril. Last time we survived—just. Next time we may not.
5.26 pm
Mr. Paddy Ashdown: It is a particular pleasure to follow the hon. Member for Beverley (Sir P. Wall). The first time that I did so was in his career in the Royal Marines. I was not serving at the same time as the hon. Gentleman, but his name was still something of a legend when I was training as a young officer at Lympstone.
The hon. Gentleman and I are aware of the pleasure and privilege of participating in a debate devoted to the profession that one has followed before entering the House. The Royal Navy is at the heart of my constituency, which has long and valued traditions with that service. There is the Royal Naval air station at Yeovilton and we also produce Westland helicopters, the finest maritime helicopters in the world.

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Against that background, the policy of my party—
Mr. Douglas: Which party?——
Mr. Ashdown: Both the Liberals and, more lately, the SDP. There is a strong belief that we must make a contribution to NATO based on a strong, conventional Royal Navy. Both parties are agreed on the utter folly of the Trident decision. In our judgment, it is bad not only for what it will do to the defence procurement budget, particularly as it affects the Royal Navy, but for the spirit and political will that holds NATO together. All Governments must recognise that this essential mechanism of collective defence is held together not just by treaties, but by political will.
By taking the view that we cannot trust our NATO partners and, therefore, that we must have our own independent nuclear weapons system, Britain undermines that political will. It must be remembered that the beginnings of the French move away from NATO had their origins in precisely the establishment of an independent front. That is a great folly. Not only does it increase the arms race, but it undermines the political will that holds NATO together.
Sir Nicholas Bonsor: The hon. Gentleman could not be more mistaken. Does he not realise that the independent nuclear systems of Britain and France are essential to holding NATO together? That is in no way divisive. The Americans cannot be expected to carry the entire nuclear burden on their own.
Mr. Ashdown: We must argue that case separately. However, the French and Trident decisions operate outside NATO and are independent of NATO. If the Conservative party believes in the fantasy that Britain can independently defend herself outside the collective defence system, it is perfectly entitled to believe in the fantasy of the independent nuclear weapon system. But if it believes in a system of collective defence, it must accept that that depends on the will of the defence mechanism to hold itself together and to operate collectively.
Mr. Jonathan Sayeed: Will the hon. Gentleman give way?
Mr. Ashdown: I have already given way once, and there is much that I want to say. I hope that the hon. Gentleman will forgive me for not giving way on this occasion.
Trident is therefore a dangerous political fantasy, but I should like to deal now with its effect on the defence procurement budget.
Trident will take up only 2 to 3 per cent. of the budget over the period, but it has been calculated in a number of recent articles that it will take between 8 per cent. and as much as 12 per cent. of the procurement budget, particularly in the peak period towards the end of this decade. That is a key point.
The Government's plans to replace the surface Navy will also reach their peak at that time. It is not insignificant that at the seapower conference recently the Secretary of State for Defence made it clear that the Government were not intending to spend more than approximately 29 per cent., which is the current spending level, on procurement for the Navy. Out of that, 10 per cent. would be available for new building. I should like to parallel that figure with the 8 to 10 per cent. that is calculated for Trident at the peak period.
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The hon. Member for Sheffield, Attercliffe (Mr. Duffy), who is the Opposition spokesman on these matters, said that the figure was predicted to be about 50 per cent. of the procurement budget during the key years when we will be replacing our surface fleet. I believe that it may be considerably higher. I hope that the Minister will tell us how Trident is to be financed. Is it to be paid for out of the strategic reserve, or is it, as most people now recognise with considerable dismay, including senior officers of the Royal Navy, to be paid for out of the Royal Navy Vote? I hope that the Minister will make that crystal clear when he replies to the debate.
We have been talking about the current strength of the Royal Navy and about force levels. The naval staff recognise that, to fulfil our NATO and worldwide tasks, we would need 65 operational escorts. They have set an irreducible minimum of 50 escorts to fulfil those tasks. We have deployable at present perhaps 34 or 35 escorts—a little under 50 per cent. of what has been calculated is required to carry out that task, of which six are in long refit or maintenance at any given time and eight are in reserve. That falls significantly below what the naval staff believe is required to do the job and is a measure of the Government's inability to provide a Navy suitable for the task that they set for it.
The Controller of the Royal Navy said at the recent equipment exhibition that the Government had made some vague statements about their intention to build corvettes. I am not certain what he means by corvettes, but I recognise that the names that are given to some of these vessels have become somewhat meaningless. I hope that the Minister will make it clear whether it is the Government's intention to build extra ships. It is vital that we begin to recognise that the Royal Navy's surface fleet is being diminished, has been diminished and will continue to be diminished. Indeed, I have heard it said by a senior naval officer that the relative strength of the surface Navy today is weaker than it was in 1939. He went: further and said that he doubted whether the surface strength of the Navy had been weaker since Samuel Pepys first came to work at the Admiralty.
The story does not end there, because this factor has had a large impact on the merchant fleet. I remind the House that in the past year alone the United Kingdom merchant fleet fell from sixth to eighth position in the world. We lost 3·38 million gross registered tonnes, 256 ships and 5,000 men. That flies in the face of the Royal Navy's experience during the Falklands campaign, where it was proved time and again that merchant shipping had a capacity at a cost-effective level and base to be able adequately to reinforce and support the Royal Navy. In the face of that, the merchant fleet is now declining and will continue to decline. The right hon. Member for Leeds, East (Mr. Healey) said with some justification that the Government had managed to sink more ships in the past year than the Argentines managed to sink during the Falklands conflict. All this is of great concern to Britain, but it is also of special concern to the defence industry.
I should now like to refer briefly to various pieces of equipment about which I hope the Minister will be able to give further information. I refer first—I make no apology for it—to the vital and important new helicopter, the EH101, which is under development. All the indications are that the EH101 will be a remarkable

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aircraft, not only for its service uses, but for its enormous civilian and foreign sales potential, but, unhappily, the final go-ahead for the development has not been given.
I know that the Government have been active in trying to persuade our Italian partners to come to the starting gate and that it is our Italian partners who are holding things up. I recognise the Government's efforts in this area, but I must make it clear to them that, unless the go-ahead to continue this vital project is given within the early months of next year, it is likely that the project will not achieve its full sales potential in foreign markets. It needs to hit those markets at the right time, towards the end of this decade, but the programme is already slipping. Perhaps it will not be ready for equipping the new type 23 frigates. We hope that the Government will ensure that the decision to go ahead is given and that it is transmitted to Westland Helicopters by the early months of next year.
I hope, also, with reference to Westlands, that the Government will pay some attention to the use of hovercraft in a mine counter-measures role. It is bad that a number of foreign navies appear to have taken a greater interest than the Royal Navy in the unique capabilities of hovercraft in a mine counter-measures role. The Royal Navy is now taking more interest, but it is somewhat late in the field.
The Minister mentioned the vital nature of torpedo development. It is true that that is an important part of the defence procurement industry, but I must tell the Minister—I am sure that he knows, although he would not admit it in the House—that the torpedo development programme is a mess. We have spent about £15 million on updating the Tigerfish, about £1,200 million on updating the Spearfish and about another £1 billion on updating Sting Ray—a total of about £2·25 billion, which was the initial figure given for the Trident missile programme at the beginning of the decade. Yet there remain severe doubts whether Sting Ray has an explosive power sufficient to be able to crack the second hull of an Alpha class submarine.
Sting Ray and Spearfish are still suffering considerably from the lack of an adequate propulsion unit. Indeed, that is a matter of considerable concern to experts in this area, particularly those involved in the Spearfish programme, where the development with the Americans of the propulsion unit has come up against considerable blocks. I echo completely what the hon. Member for Beverley said about the need to be able to adopt the Sea Eagle rather than the Harpoon. I hope that the Minister will have some messages of hope on that score.
Finally, I should like to deal with the role of Fearless and Intrepid in assault landings. The Minister said that they proved to be of immense value in the Falklands, and indeed they did. As a Royal Marine officer commanding a special boat section on the northern flank of NATO in Norway, I sailed there to do a job, as the hon. Member for Beverley said, should the Russians come along and try to nip off northern Norway. When we had Fearless and Intrepid we were capable of carrying out that operation, and we remain capable of doing it thanks to the fact that those two ships have been reprieved.
In the interim period, when both ships were for scrapping, I had a sight of the operational plan to deploy special boat sections and commando units in northern Norway. In the absence of Fearless and Intrepid, the
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operational plan was to place those units in northern Norway using a Sealink ferry. It appears extraordinary that we would ask a Royal Marines' commando unit to go into battle against the Warsaw pact using that type of ship to carry them. The answer is that we would not. The nuclear option would be closer and by that process we would positively have lowered the nuclear threshold.
I hope that the Minister will come clean on what the Gvernment will do to replace Fearless and Intrepid. That decision will determine the future existence or nonexistence of the Royal Marines. It is impossible to conceive a Royal Marines' force unless it has the landing ships and the assault craft to do the job. It was Lord St. Vincent who said more than a century ago that the Royal Marines were a unit which, if ever the hour of real danger should come to Britian, would prove the country's sheet anchor, and so they have on a number of occasions. They will be capable of doing so in future if they have the right equipment, the most vital part of which is HMS Fearless and HMS Intrepid.
It is regrettable that in many instances our service personnel—this is something that I see in my constituency—are significantly discriminated against in two areas. First, they are discriminated against in the provision of council and community housing. It is possible for service personnel to have served their country and to have lived in Yeovilton, for example, for 13, 14 or 15 years, only to find when they leave the service that they become ineligible, as their civilian counterparts are eligible, for council housing in the area. They are transported back to the district council area from which they came, in which they may not have lived for 20 or 30 years. That is a significant area of discrimination which I hope the Government will take to heart and act upon.
Secondly, service families who have served abroad have found themselves discriminated against when seeking access to education grants within the county council system. I hope that the Minister will address himself to that area of discrimination.
I agree with Admiral Sir Henry Leach, the First Sea Lord, who a year ago described the Government's intention to run down the Royal Navy as
"irresponsible, involving prejudgment … driven by short-term expediency rather than long-term strategic sense."
I agree with the supreme allied commander of the north Atlantic who said—it was disgraceful that this had to be said by a senior naval officer—that we were incapable of fulfilling our duties and roles in the north Atlantic. What a disgrace for this Government especially to have to admit to that charge.
At the heart of this incapability lies the spectacular folly of the Trident decision. The purchase of Trident succeeds in creating two dangers from the same action. It will accelerate the arms race and make the world more unstable and dangerous. Secondly, it will diminish our capacity to defend ourselves within that world by weakening the Royal Navy and, therefore, weakening the strength of NATO. It is a decision which the Government will live to regret and which those on the Liberal and SDP benches will continue to oppose.
5.44 pm
Mr. Robert Rhodes James: It gives me great pleasure for many reasons to be called after the hon. Member for Yeovil (Mr. Ashdown). First, one of the few people in public life I admired unreservedly was the hon.

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Gentleman's predecessor, John Peyton, now Lord Peyton, who in war and in peace was one of the bravest, finest and, in this House at least, one of the most underestimated persons in public life. Secondly, shortly before the Falklands conflict broke out I was in the constituency of the hon. Gentleman before he represented it, flying Sea Harriers at Yeovilton with the young men who within weeks were engaged in battle in the south Atlantic, two of whom did not return. That worried some of my colleagues until I said that I was flying simulators rather than the real thing.
I am not entirely convinced of the case for the EH101 but I agree with the hon. Member for Yeovil that Westlands is a superb company and that a replacement for the Sea King is one of the most crucial decisions which Ministers will have to make over the next few months.
Politicians should always take heed, although few of them do, of the wise words of the fifth Earl of Rosebery—the hon. Member for Yeovil will know that he was a Liberal Prime Minister—who wrote:
"No one reads old speeches any more than old sermons. The industrious historian is compelled to explore them for the purpose of political history, but it is a dreary and reluctant pilgrimage. The more brilliant and telling they were at the time, the more dolorous the quest".
In the circumstances, it is with some trepidation that I draw
the attention of the House to a speech that I made in a debate on the Royal Navy on 19 June 1980. I draw attention especially to column 1894 of Hansard, in which I addressed myself to the alarming absence of a point defence system for the new Invincible class of ASW aircraft carriers. This concern stemmed from a visit that I paid with other colleagues to HMS Invincible during her pre-commissioning trials in the channel. I said:
"The absence of a point defence system on a ship which, when fully equipped, will cost about £300 million, represents an extraordinary and an alarming deficiency."
In the book entitled "Sea Change" the then Under-Secretary of State for Defence for the Royal Navy, my hon. Friend the Member for Ashford (Mr. Speed), wrote:

"I replied in terms of sympathetic agreement."
In fact he did not, for he did not reply to my speech. In his opening speech he said:
"In view of the threat, and the capability of this missile system, we shall be considering a much wider fit"—
of the Sea Wolf system—
"including the Invincible class."—[Official Report, 19 June 1980; Vol. 986, c. 1818 and 1894.]
That was over three years ago and the consideration still continues.
I found it astonishing and deeply alarming at that time that a warship of about 18,000 tonnes with a complement of 1,000 which, when equipped with Sea Harriers, Sea Kings, crews, armaments, fuel and spares represented an investment of over £1 billion, was, in effect, defenceless. It had one Sea Dart installation, its nine Sea Harriers, which are limited aircraft, and anti-missile chaff, and that was all. The argument used against me was that ships of that class were part of an interlinking force which would be formidably equipped with anti-submarine, surface-to-air and surface-to-surface sea weapons which would protect the central asset. I make the appeal that we forget about the appalling Americanism "asset"; we are talking about ships and their crews.
What, I inquired at the time, would happen if any key element in the protecting force were itself crippled or eliminated? To that question I received no response. As I explained to the House then and subsequently, my
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dominant concern was surface-to-surface missiles or air-launched missiles. The answer has been found in the GWS25 Sea Wolf system. It was my argument three years ago that it should be installed in the Invincible class. However, HMS Invincible went to war in April 1982 in a condition that was one of constant alarm to me throughout the Falklands conflict, and of even greater alarm to those who served in her and to other members of the task force.
In this month's edition of "Defence Communications and Security Review", Colonel Dodd referred to the dismal history of attacks from the air against our warships and experience in the Falklands. It was with remarkable moderation that he wrote:
"It is indeed suprising that after all these previous experiences of aircraft and missile attacks the Royal Navy, and the supporting merchant ships, were so ill-equipped to deal with them when many suitable weapons were, in fact, available."
He observed that the Sea Wolf missile system was commissioned in 1969, and went on:
"Development of the Sea Wolf commenced immediately and the system was ready for operations before the Falklands campaign but because of economic restrictions and…lack of decision in high places, only two of the ships in the Task Force were equipped with it. The system proved to be highly successful, five enemy aircraft were shot down and a Sea Wolf is also believed to have destroyed an Exocet missile."
It is significant that the then Secretary of State for Defence and the then Government proposed to dispose of HMS Invincible to the Royal Australian navy and accordingly saw little purpose in investing about £50 million in a point defence system for this ship. I was one of those Conservatives who vehemently opposed that proposal, which would certainly have taken effect had riot the Falklands conflict intervened. The narrowness with which the Navy achieved its great victory was frightening, and a far greater tribute to the officers and men, their skill, courage and discipline than to those who have held responsibility for decisions on equipment and armament issues in the past 15 years.
Since the Falklands conflict, which was the first fighting engagement experienced by the Royal Navy since 1945, substantial measures have been taken to provide the Invincible class—Invincible herself, Illustrious and the new Ark Royal—with a vastly improved defensive system, which last week I had the opportunity to see in operation on Illustrious. As our debates are heard and read by those who are hostile to our national interests, I shall not give any details, although I confess to experiencing a certain glum sense of vindication. I make the one point—because this is public knowledge—that one part of the defence system is the Vulcan Phalanx which is capable of firing 3,000 rounds per minute. Unfortunately, there are only 1,000 rounds in the magazine, and it takes between five and seven minutes to replace the magazine. None the less, the improvement has been remarkable.
The Invicible class still lacks the Sea Wolf system, the sophisticated GWS25 or the much smaller VM40. I know that either system must be integrated into the ship and cannot simply be bolted on and that, even in ships of the size of the Invincible class, there would be problems of space, although, in my judgment, they would not be insurmountable. I do not underestimate the technical and logistical problems any more than the cost, but I am convinced that the development could make this class one of the most powerful and effective surface vessels in any navy, and that it must be done.

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The Falklands conflict demonstrated the oldest of lessons of war—that it never occurs in the place or in the circumstances that the so-called experts predict. In 1914 and in 1939, we had a fine Navy prepared to fight a very different type of war from those that occurred. Even Winston Churchill publicly dismissed the threat from submarines and air attack on capital ships, which turned out to be the most deadly threats that we faced throughout the second world war. We suffered severe losses in the south Atlantic because several years ago the experts had written off the value of the aircraft carrier and its complement of supersonic strike and defence aircraft.
Between 1914 and 1918 and between 1939 and 1945 we learned at terrible cost some important and fundamental lessons, but between 1945 and 1982 we seemed to forget them again. Flexibility must be the keynote. The unexpected must always be expected. In this process, one element in a much larger picture must be to ensure that our capital ships have the best possible defensive, as well as offensive, equipment. Forbearing to say "I told you so" to Ministers and others, I emphasise to them that I am saying it again. This time, please listen.
5.55 pm
Mr. Dick Douglas: Everyone on both sides of the House will agree that the speech of the hon. Member for Cambridge (Mr. Rhodes James), coming from a historian—historians usually engage in hindsight—showed that he had foresight, which he has demonstrated on previous occasions. The hon. Gentleman made a powerful case.
I, too, was impressed by Colonel Dodd's article, which states:
"It is indeed surprising that after all these previous experiences of aircraft and missile attacks the Royal Navy, and the supporting merchant ships, were so ill equipped to deal with them when many suitable weapons were, in fact, available. Lack of funds and the pressure to provide good living quarters for volunteer officers and ratings may be two of the reasons but the principal one is probably that the Royal Navy, guided by Government directives, had expected to operate as a part of NATO task forces. These would be well protected by shore and carrier based aircraft and under cover of the NATO airborne and fixed radar screen."
The interrelationship between our NATO commitment and our out of NATO commitment is at the centre of the debate. The strain on the Navy of the continuing Falklands commitment was pointed out by the Select Committee on Defence arising from its extensive investigations of and visits to the Falklands. It is not sufficient at this juncture for the House to accept the rather curt reply from the Secretary of State for Defence to our overtures. I am not convinced that the suggestion in paragraph 3 of the White Paper in response to our overtures is acceptable to the House. Paragraph 3 states:
"Forces deployed to the south Atlantic particularly remain committed to NATO."
It further states:
"Inevitably, the distances involved mean that they are not as readily available in Europe or the eastern Atlantic as would otherwise be the case."
That is a superb statement of the obvious. The House would not expect me to go into the number of frigates that we have in the Falklands area—although, if pressed, I can do so—but there is a considerable commitment of naval forces in terms of ships, back-up facilities and personnel. It is no use the Government saying that we shall
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have about 50 destroyers and frigates without subtracting the numbers that will be held in reserve and committed to the Falklands and other operations.
I was impressed by the statements made by the British Maritime League. Paragraph 51 of a document issued by the league before the general election states:
"The present RN fleet of major surface war vessels could be maintained only if at least 2 new ships entered service every year, assuming a 20-year life. Since mid 1979 only 3 ships have been ordered instead of 9. Yet further shortages will occur since an annual order rate of 3 Type 23 frigates is unlikely to be achieved this decade. By 1990, therefore, it is estimated that the RN fleet of major surface war vessels will have been reduced to less than 40 per cent. of its 1970 strength, and a high proportion of it will not have been modernised."
Those strictures on the Government's understanding of naval requirements were made not by Left-wing Labour Members but by people with supreme knowledge. Of course, admirals never have enough ships and Members who represent dockyard constituencies—I take a great interest in Rosyth—never have enough dockyard personnel. Although I have never been a Minister, and am unlikely to become one, I realise that Ministers have to stand back and question the proposals made by the experts. Nevertheless, the Government have a responsibility to answer those points today.
I wish to consider the strain imposed on procurement by the Trident commitment. First, however, I shall deal briefly with the strategic and geopolitical elements in the Trident decision. The Government's concept is of a weapon which will come into service just before the 1990s with a life span of 20 to 30 years, so it will take us well into the next century. That being so, it is rather hypocritical to suggest that we might be able to link the START and INF talks in some other forum while suggesting that we have a weapon—the D5—far more powerful in range and delivery than Chevaline or Polaris. Those considerations must be kept in mind. Moreover, in relation to any commitment to build Trident, the Government failed to consider the amount of money and resources that would flow across the exchanges to the United States for equipment and for refurbishment of the missiles, and perhaps even of the submarines.
On the interrelationship between the Navy and shipbuilding, I declare a longstanding interest in shipbuilding. We are told that reasonable, if not rapid, progress is now being made with the type 23. As a Scottish Member, I know that Yarrow is the leading yard. It is not necessarily the yard's view or British Shipbuilders' view, but my view is that it is essential to have a production run for these vessels. When I visited Italy with the Select Committee on Defence, we did not visit shipyards, but I was impressed by the Italian defence industry's export capabilities, especially for frigates. Without going into costs, I see no reason to doubt at this stage that the type 23 will be a superb vessel. Is it likely to be "the" NATO frigate? Are we committed not to diversify because of political constraints? I appreciate the political pressure from other parts of the country and other yards, but to achieve export orders production of this frigate may have to be concentrated on a particular yard. I hope that the Minister will answer that point today.
In relation to mixed yards, we know that the Government plan to privatise parts of British Shipbuilders, but it is not enough for the Government to say that they are concerned merely with the capability of specific yards to produce naval orders. Other mixed yards have

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additional capability. I have considerable background in this. I note, too, that my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) is present. He knows far more about this now than I do as he is more intimately connected with it. I refer to the Scott division of Scott Lithgow, where it is essential to preserve the capability to build conventional submarines. I await the Minister's comments on the prospects for accelerating the order programme there.
Little has been said about the interrelationship between the Navy and the dockyards, although some comment was made in the debate in another place. The Secretary of State has a Ministry information system. A three-pronged attack is being launched on the dockyards. The first—having served on the Public Accounts Committee, I do not criticise this—is the need to get the optimum return to the public purse through maximum efficiency.
The second attack relates to cuts in the Civil Service and privatisation. May we have assurances that the remaining two and a half dockyards will continue in operation? In the past few weeks, highly speculative rumours at Rosyth went so far as the absurd suggestion that the yard was to close in a couple of weeks with more than 6,000 people being thrown out of work. I imagine that the Minister, through his office, directed the general manager of the yard to issue a statement giving reassurances. Nevertheless, the phraseology used suggested that there was pressure not just for efficiency and the ability of the yard to compete with outside tenders, but for the yard to be more efficient than outside competitors. If that is so, what will be the measure of dockyard efficiency?
The pressure to privatise and to put British yards capable of naval production into the private sector might tip the balance unjustly and unjustifiably in favour of putting work into those yards and thus subventing the balance sheet when those yards attract private capital or go entirely into the private sector. It goes without saying that the Opposition regard it as deplorable that the sector which is to lead the move into the private sector is the sector which the public purse subvents with naval and defence orders. The Government's posture on that is absurd.
The third prong of the attack is the navalisation of the dockyards. If the Government cannot win with the other two prongs, they will say that there is more flexibility in switching from the present civilian manpower to naval manpower. That is a serious attack on the stability of a yard such as Rosyth. We are rightly moving away from the old Rothesay type of frigate. The Government have promised the Leander refits and the type 42s, both of which—especially the type 42—are less labour intensive than the older class vessels and do not require the same mix of skills. If they are to embark on that, they must guarantee the labour mix and try to achieve increased flexibility of the labour force. I understand that perfectly, but if that is to be done, the labour force must be told in which direction the country is going and what the future programme will be. I have made those points because I am interested in having a viable Navy.
I shall make a small point about dockyard management. When we discussed the so-called Speed report, we had to consider the decentralisation of management and an end to what I called "peripatetic" management. Rosyth has had one general manager over the past four years. I shall not embarrass him by saying how highly or poorly I regard my discussions with him. He is leaving this week. I think that
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it is absolutely absurd that a Government Department—I shall be happy to be corrected—does not know who it is putting in his place. We are talking not about a small tuppenny-ha'penny organisation, but the employer of 8,000 people. The Government talk about planning resources. I do not believe that they are so incompetent as not to be able to find someone to take his place during the period in which they had notice of his retirement. There must be some reason for it. Perhaps the person that the Government designated did not want to take the job.
I concede that it is difficult for the Government, faced with the present economic problems—mainly of their own making—to build, refit and repair every ship that they want. However, we are an island, maritime nation, and if we cannot do well in maritime defence and shipbuilding, how can anyone believe that we can do well in other manufacturing industries? That is the key industry in which we must do well. I do not say that there have been no difficulties with labour relations and shipbuillding techniques in the past. I am well aware that the industry has been backward in those respects. However, if we cannot take a lead in producing naval and merchant ships efficiently, not many people will believe us capable of manufacturing other goods.
6.13 pm
Mr. R. Bonner Pink: I am happy to follow the hon. Member for Dunfermline, West (Mr. Douglas) on two points. The first is on the subject of type 23 frigates. I understand that Yarrow is to be the lead yard on this project and that tenders have been invited for a number of these new ships. I further understand that the hon. Gentleman is appealing to the Government to place a string of orders with Yarrow to ensure continuity. I appeal to the Government to place at least one order with Vosper Thornycroft in Southampton. I appreciate that we are, perhaps, dealing with local politics here.
Warship construction is highly specialised and it is important that we have a number of yards capable of building warships. If Vosper Thornycroft does not obtain an order, it will have no further major warships under construction and will be building only a few countermine fibreglass vessels. Over the years the company has built up vast experience and has a highly trained body of men at Woolston capable of building warships. If the company does not obtain one of these orders in the near future, that assembly line will be completely shattered. It would be virtually impossible to rebuild it should an emergency occur. I appeal to the Government not just to take the price tendered by various yards into consideration, but to ensure that at least one ship goes to Vosper Thornycroft so that the number of yards capable of building these sophisticated vessels is maintained.
The hon. Member for Dunfermline, West spoke about what he called the navalisation of dockyards. I believe that he has misread the position. We have a similar problem in Portsmouth, although it is probably more intensive than at Rosyth because, with the reduction in the dockyards, Portsmouth will be confined more and more to minor refits and repairs that are beyond the capacity of the ship's company. When ships come in for training, leave or any other purpose, on most occasions it will be necessary for civilian dockyard workers to work alongside the naval ratings in the ship so that repairs can be carried out satisfactorily.

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Several hon. Members, including the hon. Members for Dunfermline, West and for Yeovil (Mr. Ashdown) and the right hon. Member for Lewisham, Deptford (Mr. Silkin), seem obsessed by Trident. My hon. Friend the Member for Upminster (Sir N. Bonsor) satisfactorily answered the hon. Member for Yeovil. The right hon. Member for Deptford confirmed the Labour party's policy on Trident. He appealed to the Government to cancel Trident in the hope that the money saved would be spent on conventional warships. The weakness in his argument is that Trident is essential to this country's security and it does not follow that if Trident were cancelled the same amount of money would be spent on conventional warships.
The essential point about expenditure on Trident is that it should be spread over the whole of the defence Estimates. It should be borne by the whole defence budget and should not fall entirely and separately on the naval Estimates. If that were done, the naval Estimates could afford more ships and more and better equipment. That is the nub of the whole matter. We need Trident, but the Navy cannot be expected to pay for it on its own.
The Minister put forward a persuasive case, but I regret that he did not reassure me on a number of points. He emphasised the need and importance of Atlantic convoys, the NATO role in a major war, and our still great responsibilities towards our dependencies. All those commitments demand a much bigger Navy than we have at present or than is envisaged.
Several hon. Members have emphasised the fact that we have too few ships. My hon. Friend the Member for Beverley (Sir P. Wall) said that that is the position not only in Britain, but also in America. The fact that the United States is short of ships emphasises our problem.
The House has been told that the new type 23 ships would be much cheaper to build than those already serving with the Fleet and cheaper than long refits. If that is so, more ships could be added to the Fleet without increasing the total cost. Will the Minister tell us the present position when he replies? I understand, however, that the cost of a type 23 frigate has increased much more than the Government ever envisaged. Thus, it seems unlikely that such developments will take place.
I am glad to learn that some of the ships due to come out of service will be retained. The Minister did not make it clear how this will affect the proposed rundown of naval personnel. If ships are to be retained, how will they be manned? Are we to assume that the Government have decided that the rundown of naval personnel will be eased? That would be an incentive and boost to naval morale.
The Minister did not tell us how such decisions would affect the dockyards. It is clear to many hon. Members and to myself that Plymouth and Rosyth, with some help from Portsmouth, will have the greatest difficulty in coping with the task of properly maintaining the fleet as well as coping with the highly sophisticated equipment in the training establishments. Will the rundown of Portsmouth be eased? Will more men be employed in Portsmouth dockyard because the Navy will be retaining ships which were otherwise to have been scrapped or taken out of service? I hope that the Minister will answer those questions.
The effectiveness of our ships has frequently been referred to. One wonders whether all the lessons learnt in the Falklands have been digested. Much criticism has been made about the ships that went to the Falklands and their
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lack of effective equipment. It appears that many of our ships are stuffed full of highly complicated and extremely expensive electronic equipment designed to guide their ineffective armament. I am told that the new 4.5 mm gun is extremely accurate and has a high rate of fire but suffers from unexpected stoppages. Criticisms and suggestions have been made that our ships should be shorter and beamier. I do not subscribe to that idea. Perhaps the Minister will state his conclusions on what would amount to a major redesign of our existing ships.
The hon. Member for Sheffield, Attercliffe (Mr. Duffy) referred to the jobs in industry that rely on the Navy. I support what the hon. Gentleman says. I hope that the Minister can initiate a more effective system to ensure that more offset orders are placed in this country. I understand that many orders have been placed in America and elsewhere. Subcontract and offset work should be placed in this country and those overseas who receive our contracts should not just pay lip service to such a principle, but ensure that our engineering companies get the work.
We need Trident, but the Navy cannot pay for it by itself. The cost must come from the entire defence budget. We need more ships and better weapons. I hope that these matters will receive the close attention by the Government that they merit.
6.26 pm
Miss Janet Fookes: I wish to start on a happy note by greatly welcoming the commitment of my hon. Friend the Minister to the future of the Royal Marines. A few years ago their future as a whole seemed in doubt. I shall certainly keep that pledge and assurance close by me for future reference. I am not making a parochial point, but probably more Marines are stationed in and around my constituency than anywhere else in the country. The Minister's decision stems from an appreciation of their invaluable role. Their Arctic warfare role, which does not always receive sufficient attention, causes them to train in northern Norway. It is important for us to remember the inhospitable northern flank where, in the event of a Soviet attack, the Royal Marines might be the only force able to conduct warfare in that region. My understanding—I hope that the Minister will correct me if I am wrong—is that not even the Americans have such a capability. I understand that they undergo little cold weather training of this type. Our reliance on the Royal Marines in that sphere would be total and we could not expect help from elsewhere.
I accept the assessment of my hon. Friend on the important role of submarines, especially in the light of the frightening and formidable build-up of the Soviet capability. I, like my hon. Friend the Member for Portsmouth, South (Mr. Pink), support fully the Trident programme as being the logical extension of our capability through Polaris. I understand those who consider Trident to be too expensive, but I disagree with their argument. I fail to understand the argument put forward by the hon. Member for Yeovil (Mr. Ashdown) in what seemed otherwise a good speech. He seemed to suggest that by having an independent nuclear deterrent of this type we were somehow contributing to a weakening or break-up of NATO. I regard that opinion as standing the argument on its head. We are contributing to NATO's strength.
We must fear, above anything else, an over-reliance on the Americans and the effect that such a reliance has upon them. They consider that, as they are contributing to

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Western defence, the Western nations should make a fair contribution. If they do not, why should the Americans bother? That argument may sound simplistic, but it is fair and important. We must play our part in the defence of the western allies and the western world generally.
Mr. Ashdown: I am at a loss to understand why the hon. Lady believes that an independent deterrent operating outside NATO—and operated as an expression of our independent capacity—somehow contributes to NATO. The previous Secretary of State, Sir John Nott, said about Trident:
"If we are to remain in this business there is only one credible deterrent at this time."
He meant that the deterrent on which we should rely in future was not the NATO deterrent, but a British independent deterrent. Surely that must undermine the will of the collective deterrent operated by NATO, on which we rely so heavily.
Miss Fookes: I was under the impression that there was a collective effort, and that we were all allies in the same cause. I simply do not understand the distinctions made by the hon. Gentleman.
I am less than convinced by the argument of the Minister in favour of a reduction of the main part of our surface fleet to 50 vessels. I found his suggestion for overcoming the difficulty a palliative rather than a panacea. We certainly welcome any qualitative improvement—as my hon. Friend said—and the use of ships other than Royal Navy ships for training and less essential roles. But I do not believe that we can shrug aside the question of numbers. If there was more than one crisis at the same time, we could not deal with them. We are, therefore, taking a major risk in hoping and assuming that we will not be asked to tackle more than one crisis at a time.
My hon. Friend used the words "qualitative improvement". It was made manifesty clear in the Falklands campaign that the surface fleet was especially vulnerable to air attack. Indeed, paragraph 310 of the defence Estimates states:
"The Falklands operation underlined the need for improving the short-range air defence of ships. The software of the Sea Wolf anti-missile system was successfully adapted during the campaign to enhance its capability against low-level attacking aircraft flying in close formation. The Vulcan Phalanx rapid-firing gun system has been fitted to the carriers HMS Invincible and HMS Illustrious."
Are we to assume that those two are interchangeable and of the same value?
As my hon. Friend the Member for Cambridge (Mr. Rhodes James) said so eloquently, we do not believe that the defence of aircraft carriers such as the Illustrious is nearly strong enough. Like my hon. Friend the Member for Cambridge, I also visited the Illustrious last week. It is an impressive ship, and also a most expensive ship. It is penny wise and pound foolish to cut short the defence of such a ship, and others like it, when we have so much at stake, both in equipment and, above all, men. Some 1,000 men serve on the Illustrious. They are valuable in their own right, and are highly trained professionals. We cannot risk their lives and risk ships by cutting short our defence of them. I look to my hon. Friend the Minister to make more firm statements about improving defence capability.
I must confess that I have nagged previous incumbents of defence posts, and will now nag the present incumbent,
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about the protection of ships from fire damage. I hope that that will be part of the qualitative improvements mentioned by my hon. Friend. We are all concerned to learn of the terrible burns caused by unsuitable clothing and bedding—especially foam mattresses that give off noxious, highly poisonous fumes. That was a menace during the Falklands campaign. I shall never forget the anger expressed by petty officers on board the Broadsword when I was fortunate enough to board her when she came into Plymouth Sound. Some of the petty officers had been directly involved in picking up burned survivors during the Falklands campaign. They made it abundantly clear how strongly they felt about needless damage and injury—and burns are the worst sort of injury—caused by unsuitable clothing and equipment and because of difficulties with the protective covering on the wiring on ships.
I understand that we are replacing that equipment, but I want to know how far that process has progressed. I know that some progress has been made on the Illustrious, but I understand that it still has foam bedding. That is wholly unacceptable in a new ship. I warn my hon. Friend that I shall nag him continuously until the problem is resolved. While that problem remains it will present danger to the men and to ships. I hope that the use of such equipment will be phased out in the short, rather than the long, term.
6.36 pm
Dr. Norman A. Goclman: I apologise to the Minister and hon. Members for my late arrival. This morning I had a meeting in my constituency with shop stewards representing the marine engineering and shipbuilding industries. I wish to make a few observations against the background of that and other meetings that I have had in Greenock and Port Glasgow. I know that some Conservative Members have been in the Chamber longer than I have, so I promise to be brief.
I come from an old fishing family, and have always recognised the need for a strong maritime defence force. Some hon. Members spoke about the fortitude, stoicism and courage displayed by Royal Navy personnel during the Falklands war. Those same qualities were admirably displayed during the nastier moments of the United Kingdom-Icelandic fisheries dispute, popularly known as the cod war.
It is because I believe in a strong maritime defence that I wish to put a few questions to the Minister. I am keenly interested in the building programme of the SKK 2400 conventional patrol submarine. I understand that 11 or 12 of those vessels will be built over a number of years, and that Vickers is building the first of them. Is there any possibility of an acceleration of that building programme?
The Scott Lithgow group was mentioned by my hon. Friend the Member for Dunfermline, West (Mr. Douglas). It is a conventional submarine refitter and builder par excellence. I have seen numerous letters from MOD personnel confirming that claim. The Scott Lithgow group has a first-class record in that area. It would appear that Scott Lithgow and its record on refitting submarines have been put to one side. Why?
Why is there such a lengthy lead-in time between the building of the first and subsequent vessels? We have been told that the delay is due to technical factors and the need to test a lead-in vessel operationally. I understand that United States maritime vessel construction programmes do not involve such lengthy lead-in times.

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It is essential that the submarine building and refitting capability at Scott Lithgow be maintained. Too lengthy a lead-in time will harm it. I have also been informed that subsequent vessel building will be put out to competitive tender. If there is a lead-in time of several years, Scott Lithgow might no longer have the capability to build submarines.
Is there any possibility of an acceleration of the building programme? If so, will subsequent vessels be put out to competitive tender?
6.41 pm
Sir Nicholas Bonsor: Defending our country must be the most important task of any Government. It is therefore extremely sad to note the state of the Opposition Benches throughout the debate. When my hon. Friend the Minister opened the debate, four Labour Members and one Liberal Member were present.
I listened with great interest to the speech of the hon. Member for Sheffield, Attercliffe (Mr. Duffy). In all respects, his was an excellent exposition of some of the shortcomings of the Royal Navy. It was sad that he should make such a speech in the absence of his colleagues—especially those of his colleagues who disagree with him profoundly. His speech had no relevance to Labour party policy. It is sad that the hon. Gentleman should still be sitting on the Labour Benches. It is sad for us that he has not joined us, as at least one of his illustrious forebears has done. I refer, of course, to my right hon. Friend the Member for Daventry (Mr. Prentice).
Dr. Godman: Where is he?
Sir Nicholas Bonsor: No doubt he, too, has important business elsewhere, but I cannot believe that the entire Labour party has the same excuse.
Appreciation and recognition of the need for the Government's restraint is not lost on Conservative Members. We applaud their efforts to provide an adequate service on the the surface and beneath it—my hon. Friend the Minister will know that my next word is "but"—but there are many lessons that we should learn from our naval past. Those of us who have an interest in the shipping world—perhaps I should declare my interest as a director of a container shipping company—must view with the gravest anxiety the rundown of our mercantile fleet combined with the weakness, in international terms, of our Royal Navy. My hon. Friend the Member for Cambridge (Mr. Rhodes James) mentioned the importance of learning the lessons of history. I mention history with some diffidence, and bow to his greater knowledge.
My hon. Friend the Minister mentioned Admiral Nelson and what he said regarding morale in the Navy at that time. Perhaps I might speak on his behalf as I am his great, great, great, great nephew. I believe that he would find other aspects of the Royal Navy, especially the number of ships and the extent to which they are sometimes equipped or otherwise, rather less satisfactory in contrast to his Navy.
Our country's survival has always depended on our naval strength. That has been especially so during modern history. It was true during the Napoleonic wars. They motivated us to obtain a fleet which was adequate to control and command the seas. That control lasted until the first world war. In 1914, we had 177 major ships of the
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line to the Germans' 77. Two lessons should be learnt from that. First, the great strength of the British Navy then must be contrasted with its sad state now. Secondly, the Germans, despite being heavily outnumbered, managed to contain us so that there was no major sea battle other than Jutland. Despite the fact that we provided adequate cover for our commercial vessels to get through, the supremacy of the Royal Navy numerically was not as significant as the Sea Lord of the day thought it would be.
Another lesson should be learnt from the Navy of 1914. Admiral Fisher believed that the answer lay in having heavily armed, lightly armoured and extremely fast battle cruisers. He forgot that a battle cruiser is good only as long as it can be defended. A ship needs to be sunk only once to be put out of action, no matter how great its fire power might be. It might appear that I am stating the obvious, but sometimes obvious lessons are not learnt.
However strongly we arm our frigates, we must have enough of them to carry out the jobs to which they are assigned and to ensure that they are not sunk in a preemptive strike by the vastly superior Soviet fleet with which we are likely to find ourselves involved alongside our allies.
There have been three principal reasons for our great sea power. First, we needed it to protect our trade routes. Secondly, we needed it for the past 80 years to keep open the strategic Atlantic link between our American allies and Europe. Thirdly, we needed it to protect our own shores.
With due respect to the Government's policy, those factors are as relevant today as they have been for the past 200 years. The question that must therefore be asked is, "Does the Royal Navy, in its present form, fulfil the need of the times and will it be up to the tasks that might be allotted to it?" No right hon. or hon. Member—not even a Minister—can truthfully answer with confidence that the Royal Navy is big enough or adequately equipped to carry out such a task.
I know the difficulties that face my right hon. Friend the Secretary of State for Defence. He is the one who must have eyeball to eyeball confrontations with the Chancellor of the Exchequer. Mercifully, I do not. I can therefore express rather freer criticism as to the amount of money that we vote for naval defence than can my right hon. Friend the Secretary of State and his colleagues when talking to the Chancellor.
Nevertheless, if I am right in saying that the Royal Navy cannot meet present needs, we have to look for a way out. Three options are usually suggested. The first is that we should increase the number of warships. That immediately brings us up against the problem of increased costs. I ask my hon. Friend the Under-Secretary of State for Defence Procurement, who is to reply to the debate, to explain more fully why the alternative type of cheaper and shorter warship, which has been mooted recently, has been dismissed by the Government. I understand that those vessels would have had much the same weapon-carrying capacity as the present frigates and would have been at least as fast and seaworthy, as well as being much cheaper. I am sure that my understanding must be wrong. Otherwise I cannot for the life of me see why we are not to have those vessels. However, no one has yet explained to me in what way I am in error.
The second suggestion is that we should rely on our NATO allies to provide our necessary defences. No doubt that suggestion appeals to the hon. Member for Yeovil (Mr. Ashdown), who certainly takes that view about

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nuclear defences. However, we cannot rely on our allies increasing their commitment unless we are fully committed. Even if we were fully committed, it is sadly demonstrable, from the efforts that the Government have been making to get our European allies to spend more of their GNP on defence and to bring their spending more in line with ours, that we would get nowhere if we tried to follow that suggestion.
I hope that the Government will continue those efforts, because it is not right that we should have to bear so much of the burden for the defence of Europe. However, it is no answer for us to cut back and render an already extremely dangerous situation even worse.
The third suggestion, which appears to be Government policy, is that we should accept the present position and recognise that the fleet is, if not good, at least adequate, that the attack that may or may not come may or may not overwhelm it, but we hope that no such thing will happen, and that there will not be a war. Such an approach is unacceptable.
The Royal Navy, in its present state, with 50 frigates by the end of the decade, will not be able to carry out the enormous task that will be placed upon it, particularly in the eastern Atlantic. That view has already been expressed by a number of my hon. Friends, including my hon. Friend the Member for Cambridge. I do not doubt that if we were faced with a Soviet attack on Norway and in the Baltic waters the present European strength would be proved inadequate. I hope that the position will be reviewed urgently.
There is another way, and it was touched on by hon. Friend the Minister of State. That is to look with much greater enthusiasm towards a contribution from the mercantile fleet in preparing for war and, in particular, in preparing to play an armed and active part in any conflict. I do not need to remind the House of the important part played in the Falklands conflict by the 54 merchant marine vessels that were taken into Government service. Without them, I doubt whether our victory would have been secured.
The present state of the mercantile fleet is abysmal. We are rapidly losing our percentage of world business. That has been caused partly by domestic reasons. Our shipyards are not handling goods adequately and our docks are not facilitating their use by international or domestic ships, with the result that much international business is going to continental docks. Problems of inflation and other domestic difficulties have contributed in the past five or six years to the substantial rundown in the percentage of tonnage carried by British ships.
However, the merchant marine is still of great strategic importance, even at its present strength. In 1982, we imported 157 million tonnes of goods and exported 108 million tonnes. It has nothing to do with a defence debate, but I wish that those figures could be reversed. About 98 per cent. of that trade has to be carried by sea, so our dependence on that form of transport is as great as ever.
The Comecon countries use their merchant fleets to build up their strategic strength throughout the world. They use their ships to take over the running of the trade routes and, therefore, to put themselves in a position from which they can blackmail the West and use their ships to avert military action. It is vital that the Government look closely at the possibility of encouraging a build-up of our mercantile fleet and using it, whenever necessary, for armed naval purposes.
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I do not believe that it would be difficult to put on our large container vessels platforms that could carry ship-to-ship or ship-to-shore missiles. After all, one of our Harriers managed to land successfully on a small Spanish ship. Therefore, it should be possible to carry such aircraft on large container vessels. We could increase the width and depth of our strategic strength at sea by making more use of the Merchant Navy.
If the Ministry of Defence, the Department of Trade and Industry and other Departments got together to subsidise and support a small percentage of the cost of building such vessels and maintaining them in this country, through giving RNVR attachment to their crews, a number of important needs would be fulfilled. We would vastly increase the number of platforms and make it much more difficult for anyone to knock out our naval forces. By encouraging the mercantile marine to expand, we would ensure that an adequate number of support vessels were available in the event of another unexpected localised war. We would enhance the standing and capability of our merchant fleet. Even in commercial terms, there is a vast strategic danger in having an inadequate merchant fleet to carry our goods. Last, but by no means least, we would provide jobs in our dockyards and ensure success in the rundown areas that used to be great shipping centres.
That is the direction in which the Government should be looking. All the other alternatives are unacceptable.
6.58 pm
Mr. Richard Ottaway: It is a pleasure for me to follow my hon. Friend the Member for Upminister (Sir N. Bonsor), especially as I agree with so much of what he said about the need to increase the effectiveness of the Royal Navy while recognising the cost limitations.
A number of comments have been made about the effectiveness of the Navy, with some of which one can agree, while disagreeing with others. I have come to two conclusions:; we have the smallest Royal Navy for many years, but the task facing it is the greatest for many years.
I share the view of hon. Members who doubt the ability of the Royal Navy to meet future commitments to NATO. We have pledged to NATO that we shall defend the shipping lanes in the Atlantic and we have pledged to our own nation that we shall protect our overseas interests and our home base. We are at a crossroads and we have to decide which way to go and which priorities to emphasise.
As the hon. Member for Sheffield, Attercliffe (Mr. Duffy) said, the editor of "Jane's Fighting Ships" has criticised the Navy's ability to meet its commitments. He said in his foreword that the Navy should expand and become a multi-role force. Earlier this afternoon the Minister made the same comment, but the editor of "Jane's Fighting Ships" spoke of a more expanded multi-rote force than was discussed today, and complained of a lack of balance. I do not accept that. The editor's remark was glib. Much as I respect him, he is out of touch with reality. Everyone will recognise that the Falklands conflict was a one-off affair and, although our Navy may be capable of embarking on such an exercise, we should not design it with that in mind.
As my hon. Friend the Member for Upminster said, the Treasury is not a bottomless purse. We must marry our limited resources to the limited role that we are trying to carry out. The size of the cake has been determined and we must decide how we shall divide it. The Royal Navy's

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fundamental duty is its commitment to NATO. We need only look at the developments in the Soviet fleet over the past few years to realise that the threat facing Britain is formidable.
Mr. Ashdown: The hon. Gentleman rightly said that our fundamental commitment was to NATO. Will he, then, explain why this primary commitment to Trident has been made outside NATO?
Mr. Ottaway: Trident is a deterrent. As my hon. Friend the Member for Plymouth, Drake (Miss Fookes) said, Trident is part of our role in NATO.
Mr. Ashdown: It is outside NATO.
Mr. Ottaway: We are concerned with the defence of Britain and of Europe. By maintaining an independent nuclear deterrent such as Trident, we are fulfilling that role. Whatever the hon. Gentleman's party's policy is on nuclear weapons, it seems to support Polaris. I am not a technical expert, but I am told that Polaris will not work. I cannot think of a more ridiculous policy than to support Polaris when it will not achieve the desired result.

In the past few years we have seen the development of a new missile on the Typhoon submarine, which is faster, larger and deeper than anything we have in NATO. Three Kiev class aircraft carriers with vertical and short take-off capacity have been launched, and another is in the pipeline. Development continues on a new type of aircraft carrier for the Soviet fleet, and 84 amphibious craft, supported by five naval infantry regiments, have been launched. There are five yards building submarines for the Soviet Union, and the new 0-class is currently undergoing trials. The new titanium-hulled Alpha class is about to enter service. That submarine can do 40 knots submerged. The Soviet fleet has introduced four new classes of surface warships, and the Soviet merchant fleet is the largest in the world, with a key role in Soviet naval strategy.
It cannot be denied that the Soviet fleet has more than a defensive role. Many hon. Members and many people may ask why, but I do not know why. Although the fleet can destroy the world many times over, it continues to grow. It is our humble duty to counteract that force.
I agree with the hon. Member for Yeovil that by increasing our conventional forces we shall increase the nuclear threshold, and thereby minimise the chances of nuclear war. It is an ironic dilemma for the Soviet planners that the weaker our conventional forces, the lower our nuclear threshold. Therefore, the Soviets may look for targets away from central Europe. A report by the Adam Smith Institute on defence policy suggests that the Soviets might aim for economic targets such as our lifelines from Africa, the middle east and the far east, and they might also aim for the north-western flank of Europe and the eastern Atlantic.
Many hon. Members will recognise that we may have the greatest difficulty in protecting the north-western flank of Europe. The idea that those may be future targets was reinforced by the fact that Russia has increased the number of its ocean-going amphibious vessels, which would be suitable for operations on the north-western flank. It has also increased the strike groups that may attack our vital supplies from overseas. The north-western flank is our responsibility, and although the Royal Navy is the largest
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fleet in Europe, it may have difficulty in meeting its commitments to Europe, as my hon. Friend the Member for Beverley (Sir P. Wall) said. We must have more destroyers and frigates, but we must also recognise that we have a duty to contain costs.
The report to which I referred contained an interesting and unusual suggestion, which I recommend to my hon. Friend the Minister and his advisers as being worth considering. It suggests that now that British people have more leisure time as a result of new technology and job-sharing schemes, there could be a slight reduction in the Regular services, but a dramatic and corresponding increase in the Reserves, especially in the Royal Naval Reserve. Many civilians have experience and skills that could be used in defending the nation, including airline and helicopter pilots, Merchant Navy officers, fishermen, lifeboat men, coastguards, medical personnel, and members of specialist sports clubs such as sub-aqua divers and yachtsmen. We need a new manpower policy for the Royal Navy.
Many years ago, when the American fleet was exercising in the north Atlantic, it came across the British Fleet. The American commander sent a signal to the admiral in charge of the British fleet saying, "How is the second largest navy in the world?" The British admiral, who clearly came from the British school of wit and repartee, replied, "Fine, how is the second best?" The British Navy may only be the third largest in the world now, but it is still the best, and by expanding the Royal Naval Reserve we can have more quantity without a corresponding reduction in quality.
At present 80 per cent of our reserve force is tied up in the Territorial Army. The Air Force Volunteers and the Royal Naval Reserve have a much smaller role. With a reduction in Regular forces, and a significant expansion in Reserves, we could make a major contribution to the Navy. The current minimum of two weeks' annual training for Reserves could be increased to four weeks; and as a result of the savings that the report suggests, the Naval Reserve could man all our offshore vessels and be engaged especially in fishery protection and the patrolling of our economic zones. The Reserves could take over the search and rescue capability around the shores.
We should introduce a more substantial minesweeping role for the Naval Reserve. It has possibly the greatest expertise in this, as it does it consistently while the Royal Naval Reserve is constantly turning over personnel. We could introduce as many as 20 trawlers as minesweepers to achieve a more positive contribution towards the minesweeping role that is needed. The Russians have significantly improved their capability.
Dr. Godman: Where would the hon. Gentleman find the 20 trawlers to conduct the minesweeping operations, in the light of the dramatic decline in the number of stern trawlers still sailing out of British ports? Does the hon. Gentleman envisage a building programme for such vessels?
Mr. Ottaway: I suggest that the hon. Gentleman reads the Adam Smith Institute report, which shows where savings can be made, particularly in procurement and a slight drop in the Regular forces. Whether or not we can adapt existing trawlers for the minesweeping role, or whether it is necessary to build new ones, is a matter for

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debate. I understand that the second of a new line has just been launched, and I see no reason why that line should not be continued.
That just about concludes my concept of an expanding Naval Reserve to meet the requirement for a greater number of ships protecting the north-west flank. However, when I last spoke on defence, in the defence Estimates debate in July, I gave my support for the introduction of the searchwater radar system which, as the Minister said earlier, is being introduced. He announced that two Sea King helicopters were carrying the system. Those of us who have served in the old aircraft carriers such as HMS Eagle or HMS Ark Royal will know that to have airborne early-warning radar is the most fundamental requirement for any group of ships beyond the range of the RAF. I endorse the introduction of the searchwater radar system and I hope that every encouragement and positive contribution that can be made to introduce the system as early as possible will be used.
The Minister will be making a decision soon about the primary defence weapons that will be introduced for the Royal Navy as its primary weapon for the next generation of ships. It seems that the decision is down to two weapons systems—the Harpoon system, made in America, and the Sea Eagle, made by British Aerospace. Although the technical analysis must lie with the Ministry, if there is a similar specification for each missile and it is simply a matter of deciding between the two, it is obvious that the British Aerospace missile, which will be made here and provide many jobs, must have priority.
7.12 pm
Mr. Keith Best (Ynys Môn): I am aware that some hon. Members have been in the Chamber for longer than I have, and I hope that they will indulge me. I have a particular difficulty, and I shall try to keep my remarks as brief as possible.
Last weekend I completed my battle fitness test at the Royal Marine depot at Poole, and I am still here to make my speech this evening. I welcome what my hon. Friend the Member for Beverley (Sir P. Wall) said about his commitment to the Royal Marines. Having served on HMS Bulwark in a fairly hospitable part of the world, the Caribbean, I can attest to the great effectiveness of the Royal Marines, particularly in their shore-landing role.
I declare a vested interest in seeing British warships capable of dealing with many different roles. As a Territorial Army major in the naval gunfire liaison section, I see at close quarters what may at first sight be regarded as a minor role—naval shore bombardment. I suspect that after the Falklands conflict that role will never be regarded as minor again, and it should not be. Naval gunfire support is just one of the many roles that the ship of the future must be able to fill.
It is important, when debating the Royal Navy, to investigate the roles that it might have to carry out. I am guided by the Command Paper published in June 1981, "The Way Forward". It set out the basic role of Britain's defence forces, going through the strategic and nuclear forces to
"a major land and air contribution on the European mainland; and a major maritime effort in the Eastern Atlantic and the Channel. We also commit home-based forces to the Alliance for specialist reinforcement contingencies".
It went on to mention a very important category:
"Finally, we exploit the flexibility of our forces beyond the NATO area so far as our resources permit, to meet both specific
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British responsibility and the growing importance to the West of supporting our friends and contributing to world stability more widely."
That was a major statement of intent by the Government that, although Britain could not alone be expected to be the policeman of the world, nevertheless we have a moral responsibility to try to ensure that there is no international anarchy and that acts of aggression are redressed, whether they are directed against us or any other nation.
I was interested to read in this year's defence Estimates about the Royal Navy and the maritime forces:
"We remain committed to the maintenance of strong and flexible naval forces equipped with modern weapons, sensors and aircraft capable of playing a major part in NATO's maritime defence effort in the Eastern Atlantic and Channel and of deploying worldwide in support of our interests and those of our allies outside the Alliance area."
However, life is not always a bed of roses and to fulfil such a role we shall need a financial commitment. The rub comes later in the same section, which deals with the Royal Navy, where it says in paragraph 333:
"The need to keep costs down has been given close attention throughout the design stage."
This is in reference to the type 23 frigate.
I welcome my hon. Friend the new Under-Secretary of State for Defence Procurement, who is to reply to the debate. He is a welcome addition to the Front Bench from the class of 1979. My joy at seeing him on the Front Bench is mitigated only by the loss of his presence in the dining club that we have, made up of a group of 1979 Members. I hope that he will be able to reply tonight to the questions asked in the press and elsewhere about the type 23 and say whether it is the optimum vessel in which we should be investing so much money. I welcome the decision to order some eight to 12 new frigates, but is the type 23 the correct choice, or should it be the S90?
In The Sunday Times on 23 October, in an article entitled, somewhat worryingly, "Sinking of a dream warship", there was the following statement:
"But the decision could have serious consequences for the defence of Britain, not only now but well into the next century. The conventional design chosen is expensive and fared poorly in the Falklands conflict—one ship, HMS Coventry, was designed to defend the fleet against air attack but was sunk by just two ageing Argentine jets. The scuttled alternative"—
that is, the S90—
"says its backers, carries double the weapons and could be built for half the cost."
I retain an open mind, but I hope that the debate is not concluded. I believe that it has only just begun and that we need to look care Fully at the contentions, notwithstanding the Government's decision to go ahead on the type 23.
I am interested in the reports of tests on models doing a comparison between the type 23 and the S90 which showed that in calm waters the S90 was I knot slower than the type 23, matched it in rough weather, but in high seas with waves up to 50 ft in height maintained a steady 25 knots, whereas the type 23 model pitched and rolled so violently that it had to be restricted to 15 knots for its own safety. It is to that kind of test that I hope there will be an answer from the Government tonight. If there is an answer, it will assuage many people's fears and much criticism which still exists of the decision to adopt the type 23.
As the section of the White Paper which I quoted pointed out, the cost is critical in this matter. The type 23 is already likely to cost more than £100 million and may be £200 million by the end of the rolling programme and

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the completion of the final one. The costs seem to be increasing by about 10 per cent. in real terms over the rate of inflation. At that rate, by the end of the century the Royal Navy could afford to buy only one ship a year, leaving only some 30 frigates by the year 2000, when I believe it is generally accepted there should be a minimum of 50.
The S90 can be produced for some £60 million to £70 million, or to take the hull away from the combat suite, the hull itself is some £33 million—that is for everything except the combat suite. It is much cheaper. I am not a marine engineer, so I can only go on what I read and am told. I understand from reliable sources that it is much cheaper to build wider than longer.
I hope also that my hon. Friend can put to rest one contention that I have heard. It is one of logistics. It says that the type 23 will have to remain fully fuelled at all stages, otherwise it will just roll over. That may be a melodramatic way of putting it. I am sure that it is not true. But perhaps the idea behind the comment has some grain of truth in it. One wonders again whether if, with the type 23, we are not creating more logistical problems than we might do with a shorter, fatter hulled ship.
The S90's seakeeping is excellent, even up to 35 knots. The hull form is one which has been adopted by Trinity House in its pilot boats and by the Arran class lifeboats. I am told that even fishing boats are going in for this design. There are other benefits, of course. The S90 was designed around the widest possible defence horizon. With two surveillance radar some 45 metres above sea level, its kill capability is doubled. That is not my judgment, but that of British Aerospace. That means there would not have to be such a heavy reliance on the airborne early warning system—a matter to which my hon. Friend the Member for Nottingham, North (Mr. Ottaway) properly drew attention in his fine speech just before mine. Shall we see the S90 in use in other navies and not in ours? Perhaps the judgment of the rest of the world will be a real test.
The costs will have an effect on other programmes such as the building of corvettes. I wish to leave my hon. Friend with a rhetorical question. Even if the S90 is not as quiet, not as good and not as effective as the type 23 will be, is it so much worse as not to be worth having, effectively, two ships and possibly more for the price of one? That question is fundamental to this debate and really needs to be asked. There is no doubt that the type 23 is a superb vessel and will be much envied by other navies throughout the world. But do we really need to go for a ship which is so superlative that it will effectively reduce the number of ships that we can have in our Navy?
My hon. Friend knows me well enough to know that no speech from me would be complete without some criticism of the Government's views. He also knows that no speech from me would be complete without commending much of what the Government have done. To leave the House with that aspect ringing in its ears, I say that I welcome the decision to give the type 23 proper armaments for a variety of tasks largely incorporating the lessons of the Falklands conflict. With 32 Seawolf vertically-launched missiles, eight surface-to-surface missiles as well as a larger helicopter, it will be a superbly armed frigate and
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one which will be the envy of navies in the rest of the world, not least because so much, to the layman, is a matter of prestige.
Whenever I go abroad and visit other dockyards where I see ships from foreign navies, I am immediately impressed not with the seaworthiness of the ships that I see, because I cannot test that, but with the style, the armament and the prestige value of them. The type 23 will fulfil that role very well.
I return briefly to my naval gunfire role. I also welcome the Mark VIII 4.5 in. gun being placed on the type 23. That was omitted in earlier designs, and I am glad to see that there is acknowledgement of a role still for the 4.5 in. gun. I can tell my hon. Friend all about those roles up in Cape Wrath where I shall be going early in the new year if he wishes me to talk to him about it afterwards.
Whatever criticism is made of Government decisions to go for the type 23, or whatever complaints may be levelled in a friendly way from the Government Benches, it is clear that the hon. Member for Sheffield, Attercliffe (Mr. Duffy) sits alone, not only physically alone, effectively—although I welcome the hon. Member for Carmarthen (Dr. Thomas) on to the Opposition Front Bench—but devoid of policies which are either persuasive to the people or realistic in the need to meet our continuing defence commitment. Even if his party is incapable of putting forward proposals on how the need might be met, I hope that he will accept what was set out in "The Way Forward" as a role for the country in taking a wider view of the world and ensuring that the Royal Navy is on station to deal with matters when they arise.
Mr. Duffy: The hon. Gentleman may be interested to know that, far from being alone in my major criticism of his Front Bench about the adequacy of the destroyer and frigate programmes for the 1980s arising out of the 1981 review, I have been supported by all his colleagues who have spoken so far—the hon. Members for Beverley (Sir P. Wall), for Portsmouth, South (Mr. Pink), for Plymouth, Drake (Miss Fookes), for Upminster (Sir N. Bonsor), for Nottingham, North (Mr. Ottoway) and himself. All have joined me in criticising the Minister.
Mr. Best: I am grateful to the hon. Gentleman for saying that. Unfortunately, he misunderstands me. I am sure that it is my fault for not having said it clearly. My point was that the hon. Gentleman may well have that criticism to make, but his party is devoid of policies with which to mount a constructive criticism. He may well have destructive criticism of what the Government have done, but his party would never be in a position—he knows this only too well, bearing in mind the economic foreign policies which his party would follow if it ever came to power—to do anything about it. That is the tragedy. I hope that the hon. Gentleman will accept——
Mr. Duffy rose——
Mr. Best: Perhaps the hon. Gentleman will allow me to finish. I hope his party accepts that Britain has a proper role to play in extending its concern, in the way set out in "The Way Forward", the document to which I referred at the beginning of my speech, and that that is endorsed by the Opposition.
Mr. Duffy: The hon. Gentleman prefaced his remarks by saying that he had been unable to be here for the whole debate. I wonder, therefore, if he arrived in time to hear my speech.
Mr. Best: I hope that the hon. Gentleman's reticence in answering my question does not mean that his party will not support what the Government see as a fundamental duty of this country, and that is to extend its interests into the wider world.
Until the time is reached when the world can settle its disputes by international arbitrament, rather than by recourse to arms, we must be ready to meet aggression wherever it may be found. I have no doubt that that is what the Government intend, and we must all ensure that they do so. The road to peace is strewn with difficulties. We may be able to deter nuclear attack, but we cannot prevent all aggression. It must therefore follow that if aggression cannot be prevented—there will always be aggression, because of human nature—the more it can be dealt with by conventional weapons, the less likely it is that the nuclear holocaust will ever take place.
The Government are only too well aware of that. Our Navy is an important part of that role. However, it also has an emotional role. We are an island people. I represent an island within the British Isles, and I know how island people feel the sea is our security. Indeed, one of our most popular songs—I hope that Opposition Members sing it loudly, because they like the tune, if for no other reason—is
"Rule Britannia, Britannia rules the waves".
We do not want to rule the waves, but we want to ensure that the waves are safe for all to sail on.
7.32 pm
Mr. James Couchman: I am pleased to catch your eye, Mr. Deputy Speaker, because this year's debate on the Royal Navy is almost certain to be the last in which mention of Her Majesty's dockyard and the Royal Navy dockyard, Chatham, is relevant. I realise that what I am about to say is unashamedly looking to the past rather than to the future. I also realise that I risk repeating some of the comments I made during my maiden speech to the House in July. None the less, I feel that this occasion must not pass without a tribute to the thousands of sailors who have sailed from that great base at Chatham, and to the many men and women of the Medway who have built, supported and refitted the ships of the Royal Navy.
I shall try to resist the temptation to become mawkishly sentimental, but the attachment of the people of the Medway to Chatham is far more than purely economic; it is a highly emotional tie. On 30 September this year, at sunset, the two flags of Rear-Admiral William Higgins were hauled down for the last time. It was the first such occasion for 231 years when those flags were not replaced by those of another admiral. It was the final ceremonial occasion for the Royal Navy base at Chatham. The hauldown was a highly evocative moment. Many strong men had tears in their eyes and lumps in their throats, and none of the 4,000 people present could fail to be moved by that moment.
Chatham is the oldest of the four Royal Navy dockyards. Rear-Admiral Higgins' appointment traced directly back to 1630, when Phineas Pett was appointed Resident Commissioner. As Flag Officer, Medway, Admiral Higgins was the successor to the commanders-in-chief of The Nore, the earliest recorded of whom was Admiral of the Blue, Isaac Townsend, in 1752. Now this most important and historic command is no more, and responsibility for the old Medway command area has been transferred to Flag Officer, Portsmouth. However, if the
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antecedents of the admiral's two titles are steeped in history, the history of the Chatham dockyard is even longer.
The dockyard was first established in 1547, and even before that the Tudor warship Grace Dieu was built there in 1488. In the last year of Henry VIII's reign, Chatham became an anchorage for the King's ships. Sir Francis Drake learnt his skills as a sailor and navigator among the shoals and mudflats of the Medway and Thames estuaries. For the first 20 years of its life, the dockyard was known as Gillingham dockyard, and I may add that my constituents still have not forgiven the people of Chatham for taking the name.
The first ship to be built at Chatham was a 5-gun pinnace, the Sunne, which was the forerunner of more than 500 ships to be built at Chatham during the next 400 years, culminating in the submarine HMS Ocelot in 1966. The Chatham dockyard was visited twice by Queen Elizabeth I, and has been regularly visited by members of the royal family since.
Management of the dockyard was not always as honest and efficient as it has been latterly. The Pett family was notably corrupt, and the Crown, always short of money, neglected in Stuart times to pay its work force, sometimes for as long as two years. Perhaps that was the foreunner of later industrial relations trouble in the royal dockyards. In 1667, the Dutch sailed into the Medway, landed at Sheerness, looted the stores, and then, breaking the chain in the Medway, sacked and burned the assembled ships. That humiliation spurred the authorities to strengthen the defences of the dockyard.
The major redevelopments started during the reign of Queen Anne, and the new yard became the so-called "historic dockyard" of today. It included the admiral's house, the ropery, which is still in use today, the sail loft, the great store, and the main gate. As befitted such an important defence establishment, the historic Georgian dockyard was designed by the best architects of the day including Vanbrugh and Holl. I shall come back to the historic dockyard later.
During the 18th century some of the most notable ships were launched from Chatham. They included the most famous of all, HMS Victory, Nelson's flagship, which was built and launched at Chatham in 1765. The oldest British-built warship still afloat, the Unicorn, was built at Chatham in 1824. However, in the second half of Queen Victoria's reign, more than 20 battleships as well as numerous cruisers and smaller craft were built, with the last battleship being HMS Africa, launched in 1905. After that, Chatham became pre-eminent in building submarines. The first was the C17 in 1908, and the last, as I said earlier, was HMS Ocelot. During that period of 40 years, some 56 submarines were built at Chatham.
At the same time as shipbuilding was taking place, many thousands of refits, both major and minor, were undertaken. Since 1966 Chatham has been exclusively on refit work and has built up a formidable skill in the refuelling and refitting of our vital nuclear hunter-killer submarines, the SSNs.
The greatest qualm of the now redundant workers of Chatham is that the ability of the alternative facility at Devonport has yet to be proved. Devonport's record does not inspire confidence. The recently completed refit on HMS Swiftsure took five years instead of two, and the first sea trials after refitting ended in ignominious towing back to port. Another SSN due for refit at Devonport had to be

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towed back to Chatham and was eventually scrapped after many years sitting at Devonport. We are told that HMS Sovereign would have been refitted at Chatham in two years but for the closure announcement in 1981. Will HMS Sovereign's refit take five years at Devonport?
There is a belief in Chatham that the Royal Navy will have to authorise the refitting of ships in civilian yards because Portsmouth and Devonport are so stretched. Those refits would probably have come to Chatham. I would be grateful for the comments of my hon. Friend the Under-Secretary of State for Defence Procurement, the more so in view of the warning given by senior officials in 1982 to Sir John Nott that the Navy's dockyards would be unable to cope with the refit programme by 1984 if the closures went ahead.
The general view, I believe, is that, although tankers and stores ships of the Royal Fleet Auxiliary may reasonably be refitted in civilian yards, the overhaul of complex warships in these yards is barely feasible and likely to be much more expensive. The people of Chatham are sceptical as to whether in the long run the closure of their great facility will prove time or cost effective.
At its war-time height, Chatham dockyard employed about 13,000 people, but by the time of the closure announcement that had dwindled to 7,000. Today, only a few hundred are left working in the Chatham dockyard.
I have said that the relationship between the Royal Navy base and dockyard is far from purely economic. However, it would be foolish of me to ignore the economic consequences of the closure. Many of the professional and technical officers on mobile contracts have been transferred to other establishments. Some have reached retirement age, and others have been granted voluntary premature retirement. I thank my hon. Friend the Under-Secretary of State and his predecessor, my hon. Friend the Member for Hertfordshire, North (Mr. Stewart), for the close and compassionate interest that they have shown in dealing with the problems of those displaced by the closure.
The predicament of the industrial workers has been even more dire, for very few of them have been able to transfer to other establishments. By the time of the final closure on 31 March 1984, nearly 4,000 redundancies will have been caused by the closure. It is for these people, many of them my constituents, that we must look to the future. But because of the Government's actions since the closure was announced, the future is perhaps slightly less bleak than it might have been.
By early in the new year, the Medway Ports Authority will have begun a commercial port operation. We are hopeful that we may even be granted one of the new experimental free ports. Thames Ship Repairers has made a successful start to ship repairing in Chatham and is employing 150 people, many of them former dockyard workers. The Rainbow Boats Trust plans to build and repair narrow boats in the dockyard. It will also employ about 150 people, many of them youngsters on youth training schemes.
The historic ropery and flag loft are being operated by commercial firms. The modern dockyard is to be redeveloped by the English Industrial Estates Corporation for industrial, residential and leisure uses. We still hope against hope that the South-East Thames regional health authority will be prevailed upon to come to the Medway.
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The historic Georgian dockyard offers a priceless opportunity for the conservation of unique industrial facility. We are hopeful that the Ministry of Defence, when it passes the dockyard to the Department of the Environment, will bequeath the historic dockyard to a trust which will develop this magnificant part of our naval history as a living museum and tourist attraction.
I am sure that my hon. Friend the Member for Medway (Mrs. Fenner), in whose constituency the historic dockyard lies, would have expressed those aspirations for the future more eloquently than I were it not for her departmental responsibilities. She and I, together with our hon. Friend the Member for Mid-Kent (Mr. Rowe), recently had a useful briefing from the Under-Secretary of State. We urge him to continue his efforts on behalf of the future of our constituents.
I have said much about the Royal Navy dockyard but rather less about the Royal Navy base. In 1903, the fine barracks of HMS Pembroke were built. During two world wars, 18,000 brave sailors went to serve their country and to make the ultimate sacrifice from Pembroke. As recently as last year, men from the Medway served on active duty in the Falklands campaign. Sadly, some did not return. HMS Pembroke now accommodates fewer than 100 officers and men where once there were 2,000. The last captain has left, and, indeed, retired. As some wag has said, "On 31 March 1984 they will merely cancel the milk."
I have spoken at length about one of Britain's most historic and important defence establishments, and I thank you, Mr. Deputy Speaker, for your indulgence. By the time we debate the Royal Navy next year, the Royal Navy base and dockyard at Chatham will be just a chapter in the Royal Navy's glorious past. It will, however, be a long time before the people of the Medway forget the Royal Navy. I trust that it will be just as long before the Royal Navy forgets Chatham. They will continue to salute and respect each other. I ask the House to join me in paying a similar tribute to the work force, now almost dispersed, of Chatham dockyard and to the sailors with whose welfare it has been concerned for so long.
7.47 pm
Mr. Michael Marshall: It is a pleasure and privilege to follow my hon. Friend the Member for Gillingham (Mr. Couchman), whose speech the House listened to with great care and considerable interest. I am particularly glad to follow my hon. Friend because I did not have the pleasure of hearing his maiden speech. Having heard him today, it is clear that his constituency has a doughty champion. He put his points in a balanced and fair manner. The way in which my hon. Friend and his constituents are responding to the Chatham closure encourages me to feel that there is hope for the future and that he has a major part to play in achieving that objective.
My hon. Friend also touched on the central theme of value for money for the Royal Navy and defence expenditure. In a sense he was saying that where we had a naval tradition and continuing expenditure over the centuries, we had also built up a liability to ensure that the underpinning of our defence and Navy can be carried on through the transfer of workers to other opportunities or the Government machine can respond to the situation that he described.
I am especially glad to see my hon. Friend the Under-Secretary of State for Defence Procurement on the Front

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Bench. This is the first opportunity that I have had to welcome him to his new appointment. Given his valuable industrial experience, I am sure that he will have a considerable part to play. He joins my hon. Friend the Minister of State for Defence Procurement, and both are part of a good team. I know that much good work has been done on that area of defence, and it will be interesting to hear how it relates specifically to the Navy.
One of the slight disappointments of this place is that from time to time we table parliamentary questions that are not reached in time to ask a supplementary question. My hon. Friend will recall that one of the first questions that he had to answer was from me, in which I asked him to outline the cardinal points system and to say how many contracts had been placed under it. I had hoped to engage my hon. Friend in a dialogue on the merits of the new system, but the reply, as I recall, was that four contracts had been placed so far and that it was early days to judge the value of the system.
From my understanding of the cardinal points system and its relevance to Navy expenditure, it is clear that the Government are rightly looking for the value-for-money argument. I pay tribute to the hon. Member for Sheffield, Attercliffe (Mr. Duffy). He touched on the problem, to which many Conservative Members have turned, that with rising costs and with the rising sophistication of defence equipment, particularly in the Royal Navy, we are concerned with what can be achieved with finite resources. While I join those who wish to press the case for particular items of defence expenditure, we must always return to what we can do within a reasonable budget, and therefore I trust that the cardinal points system is being used to achieve better value in defence expenditure.
The system allows manufacturers the opportunity to put forward alternative designs, to go beyond the bounds of specifications and to put forward counter-proposals where they feel that they can suggest something that may do a better job than that which is immediately in the minds of navy designers. For those who have been worried over the years about the criticisms that British shipbuilding designs have become over-engineered and therefore uncompetitive in world markets, I hope that this will be a facet of the cardinal points appraisal. I shall be particularly interested to hear what my hon. Friend has to say on that aspect.
My hon. Friend the Member for Upminster (Sir N. Bonsor) referred to inter-operability between merchant and naval shipping—he related it to the Harrier and an emergency landing. Certainly the degree to which the merchant marine and the Royal Navy can seek to come together in terms of future design interests me greatly. I hope that my hon. Friend will have something to say about that.
Along with hon. Members from both sides of the House on the Select Committee for Defence, I had the opportunity to see at first hand some of the lessons of the Falklands. One of the lessons that immediately struck me was the degree to which inter-operability must reflect not only shipbuilding but the wider aspects of equipment design. The Sea King helicopter has been used in the Falklands in a remarkable way which must surely be beyond the expectation of those who designed the helicopter. It stood up to the task remarkably well.
My hon. Friend the Minister of State for the Armed Forces paid tribute in opening the debate to many of the Fleet Air Arm operatives who did such a superb job
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keeping the aircraft in the air. I am sure that he and my hon. Friend the Under-Secretary of State for Defence Procurement would wish to add to that list those who had to maintain helicopters such as the Sea King in the tremendously difficult circumstances of appalling weather conditions and, in the early days particularly, the limited accommodation for personnel and equipment. The success of the Sea King helicopter is one in which we should take great pride. Perhaps in looking to further generations of helicopters my hon. Friend will consider not only the way in which Sea King has been sold to the Indian navy, but will realise that the arduous use to which it was put in the Falklands may help to sell that equipment in other parts of the world.
Satellite communications do not receive enough attention in the House. I declare immediately my interest as a parliamentary adviser to the space and communications division of British Aerospace. I say that it does not receive enough attention because in the Falklands we had to overcome major problems of communications. The programme under development for communications satellites for our own defence needs is of great importance. I welcome very much the fact that the Ministry of Defence, in bringing together British industry to create the maximum all-British defence satellite, has made a great step forward in this area. I am aware that the use of such satellite communications rests very much on the way the Navy sees these matters. It is fair to say that it has the principal needs—I shall not underline this, for obvious reasons—which emerged clearly in the Falklands operations. To that extent I hope we shall see not only the development of such communications but some inter-operability between the three services. That, too should be part of our objective.
In further satellite development we must consider the NATO satellite and the role British industry might play in such a development. This brings me smack into one of the areas which I hope is high on the list of cardinal points—the issue of offset, which has been mentioned by several of my hon. Friends. The NATO satellite has been very much an American domestic concern. American manufacturers have always taken such contracts. I hope that now that we have a United Kingdom capability that is recognised across the world—to the extent that we are now obtaining a substantial slice of the world communications satellite business—that part of that offset argument will have its impact in NATO.
Reference has already been made to the future of sea-launched Sea Eagle. I am sure that this is not the occasion for me, with my specialised interest in British Aerospace in this context, to make that argument to the Minister. I am sure he will wish to cover it when he replies. However, we are seeing here another aspect of the United States versus the domestic procurement argument. Personally, I should find it hard to accept that, having, for perfectly understandable reasons of technical appraisal, chosen Exocet as equipment for the Royal Navy, it would be in keeping with the history of the Falklands campaign to see a replacement from an American source if a United Kingdom source of comparable quality was available.
I welcome the fact that we have a clear decision on the type 23, which, in a sense, reinforces the view that many have urged on the Government regarding the maintenance of a surface fleet. There was a time not so long ago during the Falklands campaign when voices were raised wondering whether the surface fleet was any longer a

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viable concept. I have never been one of those and I think that much of the argument about the vulnerability of the surface fleet to modern generations of missiles ignores the fact that one can employ the same argument about virtually every item of defence equipment, whether it be tanks or any other type of military installation. To that extent I believe the decision to be helpful, because we can begin to see the pattern of the Royal Navy's future activity.
I listened with interest to my hon. Friend the Member for Ynys Môn (Mr. Best) talking about the S90 and the type 23. I have also read the report about the experience with models. I had the opportunity to see the models during the Royal Navy equipment exhibition at Portsmouth. I recognise that I am not a naval expert, but, having spoken to naval experts, I found it difficult on the basis of seeing the models to reach a clear view. Surely the argument about the performance that has been registered with models should be considered with caution. There are wider implications here than such a comparison would suggest.
I should like to deal now with naval exports, which I trust is high in the list of cardinal points. I hope that we shall be able to see opportunities within the design for Royal Navy equipment to underpin exports, which for so many years used to be a traditional part of Britain's industrial success. I hope also that with the type 23 we have the opportunity to sustain much of our design capability, which can be used for a wide variety of design work for exports. I declare a constituency interest, because a number of my constituents work for Vosper Thornycroft.
My hon. Friend the Member for Portsmouth, South (Mr. Pink) advanced the constituency case fairly, but I suggest that in one sense he did not go far enough. In arguing that the type 23 order load should be shared around the British yards to maintain their general capability, he did not take up an export feature which concerns me. Vosper Thornycroft has had enormous skill and great success over many years in exporting throughout the world, but it is beginning to find it difficult to sustain its export potential and design skills unless it has a base load order from the United Kingdom and the opportunity of offsetting the high overhead of maintaining such a design team when it comes to tendering on the United Kingdom domestic scene.
I have raised a number of specific equipment issues because I feel sure that when my hon. Friend replies he will want to give chapter and verse to demonstrate that some of the principles which I have tried to enunciate have been borne in mind and have shaped the Government's decision-making.
Having visited the Falklands for the first time, I could not fail to be deeply impressed by the approach, enthusiasm, vigour and drive of all our services. I had the opportunity of going to sea with a Royal Navy frigate. I suppose that I am entering the policemen-are-looking-younger stage of life, but I saw what appeared to be extraordinarily young men in command of our ships at sea. They led their crews, who were clearly doing a superb job, with great drive and enthusiasm.
The Royal Navy is still having to carry out picket duties in the Falklands. All those who understand the exclusion zone will readily appreciate that those responsible for maintaining the outer ring of defence must of necessity be on continuous alert. It is a task which is a great challenge
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and one which is placing onerous demands on all those who are at sea with the Royal Navy. However, those responsible are rising to the challenge splendidly. Much of what we say in this debate should be related to that spirit. We all have a responsibility to make those in the Royal Navy feel that in our debates, and on these procurement issues, we are trying hard to take fully into account their wider interests and those of the nation.
8.4 pm
Mr. Tom Sackville: During the closing days of July my right hon. Friend the Secretary of State for Defence made a statement on the selection of the defence-suppression weapon. His announcement that ALARM was to be chosen was welcomed by hon. Members on both sides of the House. I congratulate my right hon. Friend again on making a decision that brought great benefits to my constituents, to the work forces of about 150 companies throughout Britain and to British industry as a whole.
We are in a similar position in selecting the procurement of a naval weapon system, the surface guided weapon. There are two main contenders. One contender is the ship-launched Sea Eagle, which is made by British Aerospace, Marconi and a consortium of companies, and the other contender is Harpoon, which is made by a consortium led by McDonnell Douglas. I take this opportunity to support the remarks of the hon. Member for Yeovil (Mr. Ashdown) and my hon. Friends the Members for Arundel (Mr. Marshall), and for Beverley (Sir P. Wall) in urging the selection of Sea Eagle for the Royal Navy.
I mentioned ALARM not to attract the attention of the Government Front Bench by flattery but to take the opportunity to observe that the selection of a naval weapon system may be more important than the selection of ALARM despite all the interest that was aroused at the time. We are talking about the primary surface offensive weapon of the Royal Navy and not a specialised Air Force weapon. It is vital that we retain control of the technology that is involved in primary high technology weapons. As has been seen from recent events, we cannot be sure of either the nature or the direction of the military threat to these islands in future. We can be certain of having the maximum number of options open to us only by retaining control of modifications, further development and supply.
The export sales potential of the naval weapons system is possibly even greater than that of ALARM. It has been calculated that there will be about £500 million involved but if the entire family of Sea Eagle weapons is taken into account the figure might increase to £1,000 million. If the Royal Navy does not order the system, we can hardly blame potential overseas buyers for wondering why. A decision not to order could threaten sales of ship-launched Sea Eagle as well as sales that are in the pipeline, or which have already been concluded, of the other variants of Sea Eagle.
I cannot speak from first-hand experience of naval matters but I can speak with some confidence of the effect on my constituency of a decision not to buy the system, for it is an area in which up to a quarter in value terms of the work on the project would be undertaken. British Aerospace Dynamics Group at Lostock is the lynchpin of the engineering scene in central Lancashire. The loss of work on the project would have a disastrous effect on

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employment in my constituency and in surrounding areas, as it would on all the other companies involved in the project.
The issue of export sales is not confined to the missile itself. On 26 October British Shipbuilders wrote to the Minister of State, Department of Trade and Industry to suggest to him that deployment of the weapon by the Royal Navy would greatly enhance sales of type 23 frigates. That is a factor of which we should take full account.
What other country, given that it had the technology to produce a primary offensive surface weapon for its own navy, would seriously consider going overseas to buy? I understand that there must be competition if we are to get value for money in defence procurement, but I submit that in this instance British Aerospace has satisfied amply all the conditions and requirements of the Ministry of Defence, including the condition of price. I ask the Minister to take careful note of the fact that the purchase of the ship-launched Sea Eagle for the Royal Navy would be strongly in the interest of British industry and in the national interest.
8.9 pm
Mr. Jonathan Sayeed: Any free nation faces difficulty in finding the resources necessary to defend its freedom while recognising the ever-increasing social demands and expectations. That is particularly true of an island nation such as ours with such a magnificent maritime history. Yet those resources must be found, for reasons that all who believe in democracy understand.
Today we have heard many pleas for money for the Navy. I do not dissociate myself from those pleas, but there is an equal, if not greater, priority to rethink our requirements and the methods by which we satisfy them. If some of my remarks smack of naval heresy, I hope that it will be understood that I make them not principally to shock, but because I am certain that, unless we face the conflicting calls on the nation's wealth, the shield and defender of our proud island—the Navy—will wither into insignificance.
I would like to preface a few of these ideas by putting them into their historical perspective by quoting from "Jane's Fighting Ships" 1983–84 edition. Although I accept that Captain Moore, the editor, has a vested interest, what has happened to the service cannot be gainsaid. It states:
"In 1957 a Defence Review emphasised the primary place of missiles in modern warfare—in 1962 the Nassau Agreement between President Kennedy and Mr. Macmillan was the start of the British Polaris programme. In 1966 the Labour government produced its Defence Review, the main general theme being withdrawal from foreign commitments with the main emphasis being placed on the European theatre. From the naval point of view this meant the north-east Atlantic and the Royal Air Force was to provide cover for the fleet, using shore-based aircraft as the navy's carriers were successively deleted. With their departure the fleet was deprived of its own airborne early warning and fighter protection: the north Atlantic scenario had left the navy dangerously unbalanced should it be called on to operate far from the United Kingdom. The then Minister of Defence stated that he regarded this 'as a small sacrifice since we could not afford it anyway and it is difficult to imagine circumstances in which it would be politically wise to use it'."
I notice that there are no Labour Members present who were members of that Cabinet to respond. The article continues:
"The addiction in this particular scenario was the background to the future shape of the Royal Navy with its emphasis on antisubmarine warfare. The 'Invincible' class of light carriers was
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resurrected after ten years in the filing cabinet and the first was ordered in 1973. Two years later the first Sea Harriers were ordered and once again the navy was in sight of some measure of self-protection although no attempt was made to provide airborne early warning.
Attention to the air threat was evident in the design of the Type 42 destroyers which were fitted with medium-range Sea Dart missiles. The weapons payload of these ships was constrained by their hull form and the treasury limit on the unit cost of the class. In 1974 the first of the Type 22 frigates was ordered, a design in which there was no major gun annament, reliance being placed on surface-to-surface missiles and short-range surface-to-air missiles. In recognition of the frigate's role being primarily anti-submarine, provision was made for two helicopters. Matters moved comparatively slowly as the new Conservative government began its inspection of the country's finances. Few orders for new ships were forthcoming and in 1980 came a moratorium on defence spending. It was clear that more was to come and in the Defence Debate of May 1981 a further Review was foreshadowed. As this took only three months to complete the unsatisfactory nature of the result was not unexpected. In June Defence, the Way Forward was published and over the next few months other decisions came to light. The force of three 'Invincible' class vessels, the minimum needed to ensure continuous availability of one ship, was to be cut to two. Invincible herself to be sold to Australia at half the cost of new construction. Both assault ships were to be disposed of, leaving the Royal Marines without any naval transport other than the carriers. The destroyer/frigate numbers were to be cut over four years from 65 to 50 of which eight were to be in reserve. This meant that fewer than 30 would be available at any one time. The original target figure of 20 nuclear fleet submarines had already been cut to 17, to be reinforced by a new class of diesel submarine. The Hovercraft Trials Unit was disbanded and the Royal Fleet Auxiliary reduced. Naval personnel were to be cut by 10,000 in five years, the dockyards at Chatham and Gibraltar to be closed with Portsmouth reduced to a maintenance base. These dockyard closures were designed to reflect not only the reduction in the fleet but also a quite astonishing decision to do away with mid-life modernisation of surface ships."
Despite Captain Moore's obvious interest in the Royal Navy, I believe that we would all agree that his is a good synopsis of what has happened to the Royal Navy since 1957.
There has been a continuous decline to a single-scenario fleet, incapable of continuous action outside the European theatre, except in brush-fire warfare, and unable to protect our interests or counter our potential enemies on a world-wide front. That cannot be the way forward. I do not believe that we have changed so much that we cannot express the breadth of originality of vision that would permit us to find other ways of funding the essential vessels. I believe that we can do this in a way that will not demand dramatically increased resources. We cannot afford to have fewer, more expensive or under-armed ships.
Habitability of those ships is a subject that is rarely covered. I have served in a number of vessels as a rating and as an officer of much juniority. All vessels have become increasingly more comfortable to live in at the expense of their primary role—to fight. We must stop and, indeed, reverse this trend.

A frigate's armaments are up to two thirds defensive and one third offensive. I urge my hon. Friend the Under-Secretary of State, when extra weapons platform space becomes available—as it will, because of the altered beam to length ratios—to increase the frigate's offensive capability.
Manning levels are far too high. We have the technology to enable us to reduce them. If certain parts of particular ships are hit, they are useless and no overmanning will counteract that fact. Thus, we could

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afford to cut manning levels and—this is the primary heresy—we must accept that a warship is a weapons platform and ultimately expendable.
The next need is for different and cheaper ships, whether we call them SS90s or short fat frigates. As missile systems increasingly become vertically launched, the beam to length ratios will change considerably. For example, just before the Kidd and Spruance classes, the beam to length ratio was 1:10·2. In the DDG51 class, it will probably be about 1:7·8. That gives an extra missile load capability of some 30 per cent. with the same displacement and horsepower. I accept that extreme weather capability will be affected, but that will be relatively unimportant. There is not much time for fighting in very heavy weather. One is simply concerned with staying alive.
We need cheaper ships with more fire power and fewer men—a policy of more for less. If the Navy has a fault—it has very few—it lies not with the personnel, who are the finest in the world, or even with its current ships, which are superb but very costly, but with the fact that the type runs are too short, so each vessel is unique and thus too expensive and non-exportable. We need classes of vessels with high sophistication, but we must have many more frigates, destroyers and submarines. They must be mass produced with modulised weapons systems. These systems must be interchangeable and up-dateable and the ships must have lower manning levels and higher export potential.
Finally, we must use the merchant marine far more effectively. I am pleased that we are pressing ahead with the Arapaho/Scads Reliant project, but we have been very slow. I urge my hon. Friend the Minister to enlarge the Government's vision as to how the merchant marine can be used.
At the risk of falling foul of the comments of my hon. Friend the Member for Cambridge (Mr. Rhodes James) who said that one should never repeat oneself, I end with a quotation from my speech on 1 November on the British Shipbuilders (Borrowing Powers) Bill in which I said:
"Therefore, is it not possible to give subsidies or tax incentives, possibly from the Navy Vote or elsewhere, for merchant vessels to be built in British yards, to be manned by British crews and to carry the British flag? Those vessels should be constructed so that they can be simply adapted into auxiliary naval vessels in a way that does not detract from their civil use.
Such vessels could be container ships with helicopter platforms, containerised command and control modules and sea-to-air defence modules. They could be crude oil carriers supplying fuel to the Fleet and operating jump jets. They could be bulk carriers or general purpose merchantmen acting in time of war as dry good Royal Fleet Auxiliaries, and operating one or two Harriers or Sea King or Wessex helicopters to give close support. Those ships should have British crews, who should be encouraged to be members of the Royal Naval Reserve. The terms of the building subsidy should be couched in such a way that British owners, by accepting that subsidy, have to make those vessels available in time of conflict and, on infrequent occasions, for short-term manoeuvres."—[Official Report, 1 November 1983; Vol. 46, c. 795–96.]
On that occasion, I forgot to mention the roll-on/roll-off ferries. Despite the comments of the hon. Member for Yeovil (Mr. Ashdown), it is essential to consider the use of those ferries for troop landing in time of conflict.
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We have the finest men and a Government determined to defend the nation, but there are many demands on our finite resources. And so we must have original thinking so that a little more will go a lot further.
8.24 pm
Mr. Andrew MacKay: I believe that I am the thirteenth Conservative Member to contribute to the debate and I know that a number of my hon. Friends are waiting to contribute. On such an important day when we are debating the future of the Royal Navy I am saddened to see so few Opposition Members present and so few contributing to the debate. Perhaps we should not be surprised. Last week when the official Opposition were allotted a day on which they could choose the subject for debate they not unreasonably chose the position of pensioners—a subject close to all our hearts and on which we are continually and rightly pressed in our constituencies. Hon. Members who were present will recall that at this time of the evening there were only three or four Opposition Members present and when the hon. Member for Birmingham, Perry Barr (Mr. Rooker) so ably summed up the Opposition case few of his Friends were present to support him at the end of that debate.
I returned early from a constituency engagement to take part in today's debate, and I was impressed by the Opposition contributions. I merely wish that there had been more of them. I was privileged to enter the House when the hon. Member for Sheffield, Attercliffe (Mr. Duffy) was Under-Secretary of State for Defence for the Royal Navy, in the days when we still had such a Minister. Many of us felt great admiration for him in the extremely difficult job of a Labour Defence Minister with very little support and constant sniping behind him.
I was also greatly taken with the speech of the new hon. Member for Greenock and Port Glasgow (Dr. Godman), who most ably pressed the case of his constituents and the need to build more vessels for our Navy.
The House may wonder why I am contributing to a defence debate for the first time. It is because I feel very strongly that the Government should choose Sea Eagle as the next ship-to-ship guided weapon for the Navy. This weapon is part of the highly successful Sea Eagle family of weapons. It has already been purchased by the Royal Air Force and the Fleet Air Arm. It is the only entirely British-manufactured missile on offer as a ship-to-ship guided weapon for the Government to purchase. That means that no offsets are involved.
I give two good reasons why Sea Eagle should be chosen. I deploy these reasons as a layman but a layman who likes to think that he has commercial nous and experience in the outside world, and as a constituency Member for Berkshire, East, which includes Bracknell, where British Aerospace's dynamics division employs about 2,800 of my constituents. I deploy these reasons also because I like to think that I, like other hon. Members, have a certain amount of political nous when it comes to deciding where the Government should place their orders.
My first argument relates to exports. We hear all the time in the House about the need to export and the fact that our recovery from the economic recession can be led only by exports. Sea Eagle, and the rest of its family, is aimed primarily at export markets. It has great export potential and we are proud that it has already been sold to India, which is a major achievement as the Government have not yet had the courage to back it to the full.

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If the Government decide to buy an American-built guided weapon system instead of Sea Eagle, what chance does British Aerospace have of selling to second and third world countries? At the moment it is negotiating sales in Egypt, Chile and Brazil. If one were buying in those countries, what faith would one have in it if the manufacturer's Government had turned it down in favour of an American alternative?
I do not believe that I am being fanciful or fearmongering when I say that if the Government do not choose Sea Eagle it will be effectively doomed, as will a terrific amount of export earning potential and many jobs.
My second reason for believing that we should support Sea Eagle is the country's need for a technological base. That was acknowledged by the Government. It was referred to by my hon. Friend the Member for Bolton, West (Mr. Sackville), who has done so much to promote the equipment and weapons of British Aerospace in this place. It was acknowledged also by the Secretary of State during the great debate inside and outside the House on whether to choose HARM or ALARM. It is backed by our experiences, as mentioned by my hon. Friends the Members for Cambridge (Mr. Rhodes James) and for Plymouth, Drake (Miss Fookes) in the south Atlantic campaign. When one is in the middle of a major naval operation many thousands of miles away from the British Isles one needs to modify one's weapons quickly and efficiently. This can be done only if the Government have full control and influence over the manufacturers of such weapons, and that can happen only if we purchase a British guided weapon system.
More serious and sinister is what happens—this fact was touched upon during the Falklands campaign—if we purchase the missiles, weapons and equipment of another country which today might well be an ally but tomorrow might have reservations about our foreign policy and defence commitments. It would be all too easy for the Government of the foreign manufacturer and supplier to restrict the assistance that we could obtain and need to modify and further supply those weapons at a time of dire need. Is that a risk that the House is prepared to take which would have dire consequences, might well leave us with blood on our hands and lead to major naval disasters in the future?
I make no bones about the parochial nature of my intervention. I am proud to represent the town of Bracknell, which is within my constituency. We in Bracknell are proud that British Aerospace has a major section of its dynamics division which employs 2,800 people in the town. I was not elected to the House to waste taxpayers' money. If I considered that the Sea Eagle alarm system was not the equal at the very least to the foreign weapons on offer, I would not be attempting to persuade my hon. Friend the Under-Secretary of State for Defence Procurement to choose Sea Eagle. The House and the Government have a moral responsibility, wherever possible, when procuring defence weaponry to buy British.
The case for Sea Eagle, on merit alone, holds up extremely well. If we add to that equation the benefits for employment in the country, to exports and to our balance of payments and the security and certainty of supply in times of danger or war, we have an absolutely watertight case.
I add, on a slightly bitter note, that I do not believe that any other country in the world would, in a debate on the
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Navy, discuss whether it was going to procure a first class weapon system made in that country. The Governments in all the other Western countries would have gone ahead and procured their own weapon system. I hope that when the decision is made, which I am sure we all hope will be sooner rather than later, it is realised that delay is damaging to the export drive within British Aerospace and it makes more costly the operations of British Shipbuilders which has to modify the vessels to accommodate the weapon system eventually chosen. Perhaps my hon. Friend will give some sign that the decision will be one of common sense that will lead to exports, employment and security.
8.40 pm
Mr. Don Dixon: I had not intended to intervene in this debate until I listened to the comments of the hon. Member for Berkshire, East (Mr. MacKay)—especially those about the lack of Opposition Members in the Chamber for the Opposition Supply day debate last week on pensioners' incomes. I must tell him that, had there been a vote at any time during the debate other than at 10 o'clock, the Opposition would have won it.
The Minister said that he was proud of the men in the Royal Navy, and we all echo that. But he forgot to mention the hundreds, if not thousands, of lads who went to the Falklands, not so many months ago, with redundancy notices in their pockets. He also forgot to mention the shipbuilding workers who had been thrown on the streets and then brought back to the yards to work on the task force. They worked 12-hour shifts, seven days a week, but are now back on the dole. He also forgot to mention 'that the men who sailed the merchant ships in the task force are now unemployed because the Fortress Falklands operation is being supplied by foreign ships. The Minister forgot to mention all those points—unlike my hon. Friend the Member for Sheffield, Attercriffe (Mr. Duffy), who spoke passionately and with great knowledge about both the Royal Navy and the shipbuilding industry.
Anyone with any knowledge of the shipbuilding industry will know that merchant shipbuilding, naval shipbuilding, ship repairing and engine building are all part of the whole, and the condition of any one affects the others. The Government's policy on the shipbuilding industry is sabotaging our naval and merchant building capacity.
The hiving off of the warship yards will effectively kill Britain's shipbuilding capacity. The British Shipbuilders Act 1983 enables the Minister to direct British Shipbuilders to hive off any part of that industry. That means that three warship yards will be hived off or, as the Government put it, private capital will be introduced. The merchant shipbuilding capacity and the mixed shipbuilding capacity will go to the wall.
Conservative Members can talk until they are blue in the face about the Royal Navy, but Government policy will mean that there will be nobody available to build or maintain the ships. The Government will kill the shipbuilding industry, which is going through a crisis now. If the Minister does not realise that, it is time that he did. If he is sincere in one or two of his comments today, he will place Government orders with the industry to help it through the crisis.
The Minister mentioned the Royal Fleet Auxiliary. Why does not he place orders for it with the shipbuilding industry? Why does he not place naval orders with the

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industry? It is important that he does that now because British Shipbuilders is facing world competition from subsidised companies. It is being driven out of the market through no fault of its own.
When will the Minister bring forward a maritime policy? It is no good having a merchant fleet if there are no Royal Navy vessels to protect it. We are discussing maritime policy. We are an island nation and import more than 90 per cent. by weight of our trade by sea. We live on a planet the surface of which is seven eighths water. It is imperative that we have a merchant fleet and a Royal Navy to defend it. It is also imperative that we have men in the shipbuilding and engine building industries to build and maintain those ships. We should be debating that rather than whether we should have this weapon or that.
My hon. Friend the Member for Attercliffe mentioned the fact that the Government could finance weapons being installed on merchant ships such as the QE2. The finance argument arose when it was announced that the replacement for the Atlantic Conveyor was to be built in Korea. The Government intervened and the Ministry of Defence gave Cunard money so that that ship could be built in Britain. I am sorry that I was not present when my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) spoke. I am sure that he argued effectively on behalf of his part of the country.
It is essential that we have a surface fleet capable of protecting our merchant fleet and that we have shipbuilding, ship repairing and engine building yards that are staffed with capable men.
8.46 pm
Mr. William Powell: It is a pleasure to follow the hon. Member for Jarrow (Mr. Dixon), as I am the first Conservative Member to speak after a Labour Member for some hours. His robust support for the Royal Navy aroused gladness in the hearts of all of my right hon. and hon. Friends. If I understood him rightly and he was arguing about our need to build more ships, I am sure that that argument will be widely supported.
For many hon. Members the debate has been an unbalanced disappointment. We all welcome and admire the contribution made to defence debates by the hon. Members for Sheffield, Attercliffe (Mr. Duffy) and for Kingston upon Hull, North (Mr. McNamara). However, they are not supported by their colleagues.
Since the Royal Navy began its modern period in the time of Samuel Pepys, debates on it have been the centre piece of Sessions of Parliament. Time and again they have been the major item for discussion in Parliament. That is no longer so, except at times of high tension during wartime when the fate of the fleet becomes a matter of national attention. Only 18 months ago the Royal Navy's fate demanded attention inside the House and elsewhere, yet we now find that virtually all speeches on the subject have been made by Conservative Members.
There have been distinguished exceptions. Everybody listened with care to the hon. Members for Dunfermline, West (Mr. Douglas) and for Greenock and Port Glasgow (Dr. Godman). They concentrated on shipbuilding, but I want to speak about other issues that have been raised in the debate.
It has been argued that proceeding with Trident will unbalance the defence equipment budget in the next
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decade and result in few resources being available for other much-needed equipment. I am unable to follow that line of reasoning. The issue is whether Polaris is aging and likely to become redundant in a few years' time. The answer to that question is obvious. I have not heard anyone dispute the fact that Polaris is coming to the end of its natural life.
The question is what should be done about that. Only two courses are open to us. One is to abandon our nuclear deterrent and the other is to replace Polaris—not with something invented and first deployed decades ago, but with something contemporary and capable of a useful life for the next two or three decades. It is obvious that it would be much more satisfactory to have a new weapon, and the Government were right to conclude that Trident should be proceeded with. I warmly support that decision.
I cannot agree with the suggestion that we should abandon our nuclear capacity. The Atlantic Alliance is already unbalanced, because we expect the Americans to play a greater role than they sometimes wish to play and a greater role than it is desirable that they should play. I am glad that the nations of western Europe have been prepared to expand their defence commitment over the past three or four years and to assume a greater role in their own defence.
Over the years, the great argument about the Royal Navy has been whether we should put most of our defence eggs in a basket of a broad water, blue water defence policy. That was the argument of the great Chatham and it has governed most defence policy over the years.
In former days, the Royal Navy existed to defend our empire. That empire is no longer with us, and the role of the Navy is not to defend a far-flung empire across the seas of the world but to ensure our own independence and survival. I do not foresee the Royal Navy playing a part in all the oceans of the world. We should try to concentrate as many resources as possible within the western approaches and the northern part of the NATO flank. If we were able to make a contribution in the Mediterranean, I would not criticise that. However, to envisage that we shall be required to use the Navy to defend all the seas in the world would be a completely misguided set of priorities.
I do not wish to discuss the merits of arguments about equipment which have been put forward by hon. Members on both sides of the House. They can argue their cases without my support. A principal weakness in western Europe today is that we rely too heavily on the United States for equipment, which means that our industries cannot grow as they might do if we could pool our industrial resources with our partners in western Europe. That argument applies across the board, and especially to defence investment, not least because the development of defence equipment is so expensive. Given that we hope not to have to use in anger our equipment and that it would be a sufficient deterrent in itself, it is obviously undesirable to spend more than is necessary on it.
I support the argument put forward by my hon. Friend the Member for Cambridge (Mr. Rhodes James) in his powerful speech this afternoon. It is vitally important that, if we send vessels into battle, they and those who serve in them should go to war with the maximum possible protection. During the Falkland Islands campaign HMS Sheffield, HMS Coventry and other vessels were sunk too easily. New vessels, developed at a cost of £100 million and more, should not be vulnerable to instant sinking, if

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we were to engage in a conflict with the Soviet Union. To leave expensive ships and equipment undefended and vulnerable to early loss would be the greatest betrayal.
I hope that increased emphasis will be placed on securing the proper defence of those vessels and that increased support will be given to my right hon. and hon. Friends, who saw how events developed in the Falkland Islands and are anxious to ensure that our equipment is capable of the maximum possible defence. I hope that the men who are sent into action will go knowing that they have not only the best equipment for offence but for its defence and their defence.
It is the third time that I have been called during my short time in the House to speak in a defence debate. I urge upon my right hon. and hon. Friends the policy which they are most anxious to pursue—to secure the best possible defence for Britain, the maximum value for money from the equipment and the best possible training for our service men at sea.
8.59 pm
Mr. Stephen Ross: I apologise to the Minister and to the hon. Member for Sheffield, Attercliffe (Mr. Duffy) for not being present to hear their opening speeches. I had not intended to speak in the debate, although I am interested in the Navy since I served in it, and carried round my hammock—the hon. Member for Bristol, East (Mr. Sayeed) wants us to go back to hammocks—in 1943. However, I represent a constituency that has strong naval connections. I agreed with much of what the hon. Member for Corby (Mr. Powell) said, but I disagree with him about Trident. The Liberal party has always opposed the concept of Trident as an independent nuclear deterrent. When it was first ordered we were told that it would cost £4 billion, but the latest price that I have heard for it is £9 billion, and I suspect that it will cost more. We could spend that money more effectively in other directions.
As the Minister will know, we must try to get value for money, but the idea of building cheaper ships has not succeeded. I agree with the final words of the hon. Member for Corby, who pleaded that we should not send any of our ships into action unless they are properly defended and armed, but we cannot do that on the cheap. The type 23 frigate was supposed to cost £25 million to £30 million, but the latest cost is £100 million, which will probably increase. We learnt the lesson of sending in ships ill-prepared in the Falklands.
Not enough tribute has been paid to the great success of the ships in the Falklands in shooting down planes. It was a terrible day when the Japanese sunk HMS Prince of Wales and HMS Repulse, but the fact was that they had no answer to air attack. I do not speak with first-hand knowledge, but I suspect that our ships in the Falklands did rather well against air attack until they were faced with the Exocet missile. We went there without the right answer to the Exocet, which must never happen again.
I agree with the remarks of the hon. Member for Jarrow (Mr. Dixon) about the Merchant Navy. I was honoured recently to be invited to join the Maritime League, the purpose behind which is to try to preserve the Merchant Navy. It is the backbone to the Royal Navy, and if we allow it to diminish further the support that the Royal Navy needs in time of crisis will not be there the next time round. The Merchant Navy came to our rescue extremely well and quickly during the Falklands campaign, but if we have a
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similar incident in a few years' time, and if Merchant Navy ships continue to disappear at the rate that they have in recent years, it will not be able to support the Royal Navy. We must give whatever help we can to the Merchant Navy. I do not like the idea of the QE2 going to Bremerhaven for a refit that could have been done in Southampton. The workers in our shipyards worked extremely well during the Falklands crisis and launched HMS Illustrious well ahead of time. Other ships were equipped in double quick time, and decks were fitted on the Canberra and the QE2 to enable them to take aircraft. It was an amazing feat, but it can never be repeated if our yards are run down and the Merchant Navy disappears.
I am grateful to my hon. Friend the Member for Yeovil (Mr. Ashdown) for mentioning the role of hovercraft in his speech, because 1,500 of my constituents are employed by the British Hovercraft Corporation. I have a recurring dream that one day Britain will wake up to hear on the news that Mrs. Thatcher has had a telephone call from the Kremlin telling her not to move any ships out of harbour because the Russians have laid mines all the way round the coast, and will press button A if those ships go out, and blow them all up. That scenario is not as stupid as it might sound, because we know that magnetic mines can be placed on the seabed for about 10 years before they are activated. If we had no means of discovering those mines, we would be in serious trouble. The hovercraft has proved itself time and again to be an ideal vessel to deal with such a situation. I went out on the trials at Portland last year, and the Minister went as well. If he was not convinced by that, I am surprised. I think he was, but once again we are dallying.
I know that the trials unit that was closed has carried on in a lesser form at east Cowes, and the door is still open. However, I am not sure how much longer Westland, as the parent company, can go on funding something that has been on trial for between 12 and 15 years. The hovercraft provides an answer to the problem of mine counter measures, and it is time that orders were placed.
I shall not bore the House with special pleas on other things. Together with the hon. Member for Grantham (Mr. Hogg), I saw the Minister the other day about the Sea mark system, the gun system being considered by the Royal Navy and jointly by Plessey and Bmark of Grantham. As everybody else seems to be putting in plugs, on everything else under the sun, I put one in by saying that that would be helpful to Plessey in the Isle of Wight, where unemployment was 16·3 per cent. However, I am grateful for the orders that the Ministry has placed with Plessey, which have done a great deal to improve its financial position.
A naval architect, Mr. Peter Thornycroft, is also one of my constituents, so I had better mention him. His project the S90 started life as the Osprey and if there is a future for the short squat boat, I hope that the Navy and the Minister will consider it perhaps in a rather different role from what was envisaged in the type 23. It might prove the answer for a suitable platform, to give a wider area for some of the missile systems and guns that we need.
I make a plea for Vosper Thornycroft. I know that the hon. Member for Attercliffe will remember me lobbying him years ago for a type 42 destroyer for Vospers. He was honest, and he told me to be patient and that was the message that I took back to the shop stewards. They had a fist under my chin and told me that I would never win

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another seat again in my life if they did not get the order. However, the hon. Gentleman did give the order but I know that Vospers today are in desperate straits and need orders. If something could be done to help it, I should be grateful, as about 60 of my constituents work there.
I can never understand when I see orders for diesel submarines going to Germany. Recently, Norway ordered four ordinary diesel submarines from the Germans. We used to build marvellous submarines in Cammell Laird and Scott Lithgow, but now the only place that can build them is Vickers. I saw a film on Scott Lithgow the other day and I realised that, like other yards, it now specialises in certain kinds of ships, as does Harland and Wolff. Is it not possible to get back those skills so that we can go round the world and pick up orders for such ships? We used to build good submarines in the days gone by. It is sickening to see that we are not capable of selling overseas. For example, most of Australia's ships are built in the United States.
The hon. Member for Corby asked why we were buying so much in the United States. Our defence industry has been rather more successful selling to the United States in recent years, and Fairey Marine had a big order from the United States army for army patrol boats. We have sold a number of defence systems to the United States, and if we became too protective for our industry there would be repercussions, and they would not look to us so kindly. This is a difficult problem, but we have not done too badly up till now.
I see the hon. Member for Portsmouth, South (Mr. Pink) here. I am pleased about the partial reprieve for the dockyard at Portsmouth. I hope that that reprieve will be rather more than was announced, as I understand that the dockyard is full of work and having to put some out. Why can we not maintain Portsmouth in its full role as a dockyard and home for the Navy, which it always has been by tradition and always should be? It is a marvellous harbour, and I am honoured to go through it several times a week. Portsmouth is totally committed to the Royal Navy and all that goes with it. It would be a sad day if we allowed Portsmouth to be run down to the extent envisaged originally.
9.10 pm
Mr. Duffy rose——
Mr. Deputy Speaker (Mr. Harold Walker): Order. Does the hon. Member for Sheffield, Attercliffe (Mr. Duffy) seek the leave of the House to speak again?
Mr. Duffy: With the leave of the House, Mr. Deputy Speaker, perhaps I might wind up the debate on behalf of the Opposition.
I am sorry that I missed the speech of the hon. Member for Corby (Mr. Powell). It is the only one that I did not hear. I remember the hon. Gentleman's maiden speech during our defence debate in July. I considered it to be a fine and eloquent contribution.
I have been most interested in all the other speeches, all worthy of a Navy debate, however sparse our numbers. I have never worried unduly about a low attendance level. That has never changed no matter which party has been in power. We never attract great numbers to our service debates. That seems to put a greater onus on those right hon. and hon. Members who are here to raise the standard
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of debate. We manage to achieve a higher standard than average for our service debates, and the proof of that is on the record.
We have had a most interesting and meaningful debate. There seems to have been greater unanimity between right hon. and hon. Members on both sides of the House than there has been between Government supporters and their Minister. I hope to furnish my grounds for making that statement.
We have all agreed—more than the Minister seemed to agree—that the right job for the country, with its expertise and tradition, is a maritime role. One shortcoming of the Government is that they are not sufficiently positive in that maritime role. They are not sufficiently Navy-inclined. There are people outside the House who think that perhaps the Government are anti-Navy. That may be going too far, but those who are in touch with people who watch the matters that we have been discussing must have heard murmurs to that effect.
The hon. Member for Beverley (Sir P. Wall) reminded us that the United Kingdom was ideally placed to perform that role, given its position adjacent to the GreenlandIceland-United Kingdom gap. Why did we not get that kind of commitment from the Minister? It follows that he would have had to dwell on the implications, including the need to provide defence in depth. I do not mean 50 destroyers and frigates by the end of the decade. I mean defence in depth against a maritime threat about which we heard a great deal from the hon. Member for Nottingham, North (Mr. Ottaway), as well as preserving lines of communication, reinforcement and supply.
The hon. Member for Beverley also spelt out the Navy's primary role—that of ASW in support of the strike fleet. He also agreed with my earlier submission that we could not rely on the United States navy, as we have generally done until now. Even though the strike fleet would be provided by the United States navy, it would be looking to us perhaps for total ASW support. I could say a good deal more about that, as, I dare say, could the hon. Member for Beverley. But time forbids that now, as does the public interest.
I content myself with putting on record the fact that our commitments in the Atlantic as we go further and further north become more and more difficult and doubtful. There must be safe entry to and exit from Britain's major ports, so mine counter-measures would have to be strengthened. Then we heard what the hon. Member for Beverley said about the lack of mine counter-measures around the Atlantic basin. The Minister must know the numbers that are coming on stream. The Hunt and Brecon classes, fine system though they are, are not enough. With enhanced air defences and the retention of a major amphibious capability, we could provide a significant contribution to the reinforcement of either NATO flank if the occasion required.
My charge against the Secretary of State's Department arises from its halfhearted approach to naval matters in support of the naval role of the United Kingdom, its discharge of the responsibilities that turn on such a commitment, and the numbers that were spelt out in this debate, of which I shall say more later.
The flexibility of defence policy was stressed by more than one hon. Member, as was the need to meet the unexpected. It is no good saying that the Falklands was a one-off affair. Of course it was. All wars are a one-off occurrence. The chief of defence at the time of the

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Falklands conflict, Admiral of the Fleet Lord Lewin, said at the end of his maiden speech in the defence debate in the House of Lords, just a month ago:
"All history shows that it will he the unexpected that will test us again and again."—[Official Report, House of Lords, 25 October 1983, Vol. 444, c. 157.]
That does not mean that we cannot draw conclusions, as the hon. Member for Arundel (Mr. Marshall) did—and we must go on doing so—from the Falklands conflict. That war showed us that sea power is extremely flexible. I hope that the Secretary of State is listening to this. It is a reminder to him and his colleagues to upgrade the Navy's place, for example, in spending. I wonder how many hon. Members know that for some years the Navy has had less money spent on it—it has received a smaller share of the defence purse—than the other two services. That tells it all. A fleet that was designed to fight an ASW—an anti-submarine war—in the north Atlantic was able to fight a creditable anti-aircraft war in the south Atlantic.
We know that aircraft carriers were at the centre of that flexibility, and we also know how halfhearted—to put it mildly—this Administration's attitude has been to aircraft carriers. They thought that two aircraft carriers might be enough for the Royal Navy's ASW role in the north Atlantic. For that role, and possible out-of-area roles, they may have to think again about that number. Two is an irreducible number in the north Atlantic, although the Government talk more and more about out-of-area activities. Because carriers have a versatility and a value unmatched by any other ship, we may find, as the United States navy found, carriers turning up in unexpected parts of the world and staying there for longer than intended. In spite of all the numbers of carriers—by our standards—that the United States navy possesses, it knows that it needs more. Amphibious ships, such as Fearless and Intrepid, without which the Falklands war could not have been fought, were stood down for a while. They serve to remind the Government of another instance of pretty cheap flexibility.
The House agreed on all those matters, but there was not much agreement on the Government Front Bench. No doubt their Back-Bench supporters will have noted, and those who were not present for the debate will be intrigued to know, for example, that more than one of their Back-Bench colleagues found it necessary, in spite of sitting through reminders about Sea Eagle from their colleagues, to press home equally fervently the case for Sea Eagle.
I realise that some hon. Gentlemen were making constituency points, because the hon. Member for Berkshire, East (Mr. MacKay) admitted it, but they did not all do that. Some of them did it because they cannot be sure that their Ministers see the prior claims for Sea Eagle. The hon. Member for Yeovil (Mr. Ashdown) thinks that the Government are much too dilatory about this fine weapon system, the EH101. The Minister's Back-Bench colleagues who are versed in these matters have been hearing not only about the claims of EH101 but about the need for it. After I arrived in the Navy department I heard about the need to replace the Sea King, yet we are still trying to replace it.
The hon. Member for Gillingham (Mr. Couchman) paid a fine and moving tribute to Chatham dockyard and base. Those of us who have been there, served there and know something of its history will for a long time remember his speech. I shall be among the first tomorrow
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morning to claim it and keep it as a memento. Everything that he said on behalf of those who have served their country through the port of Chatham, and about the workers and trade unionists, was so very true.
Nevertheless, even the hon. Gentleman, in such a fine speech, could not but insert a sting in the tail or raise doubts about the adequacy of the follow-on arrangements. He was rightly proud of the high standards of the SSN refitting capacity at Chatham and asked whether those standards would be maintained at Devonport. It is no good the Government saying, "Of course they will," because the hon. Gentleman reminded us of Swiftsure. What a sorry saga. That is not the only such case.
The hon. Members for Beverley, for Portsmouth, South (Mr. Pink), for Plymouth, Drake (Miss Fookes), for Upminster (Sir N. Bonsor), for Nottingham, North, for Ynys Môn (Mr. Best) and for Bristol, East (Mr. Sayeed) were united in their criticism of the Government's longterm plans for major warships.
Mr. Ottaway: As one of the named hon. Members, may I say that it was slightly unfair to accuse us of criticising the Government? There was absolutely no criticism from the Labour Benches, because no Labour Member has been present. It therefore fell to us to offer some constructive criticism of Government policy.
Mr. Duffy: It was nice criticism. Nevertheless, there was deep scepticism about the Minister's reassurances on numbers at the beginning of the debate.
Sir Antony Buck: I caution the hon. Gentleman not to talk too much about numbers, in view of the paucity of them on the Labour Benches.
Mr. Douglas: We have quality here.
Mr. Duffy: My hon. Friend the Member for Dunfermline, West (Mr. Douglas) reminds us of quality as well as quantity. The real point of divergence was Trident. The hon. Member for Yeovil (Mr. Ashdown) asked whether it imposed an unnecessary strain on the Alliance. At the end of the day this was a decision taken outside the Alliance, and there is no question but that it is an independent nuclear deterrent.
Other objections could be raised about it in that context. Given the growing constraints of costs and expenditure, the Secretary of State will have to look yet again at the shopping list for the three services. Where any weapons system is in jeopardy, in any such reassessment our European and American allies may well object if preference is given to an independent arm such as Trident.
We know that already procurement and training in the services are being affected by financial restraints which are bound to continue into the period where the cost of Trident begins to be felt. My right hon. Friend the Member for Lewisham, Deptford (Mr. Silkin) made that point earlier in the debate. Because of the shortage of submarine-building resources in the hunter-killer programme there is bound to be a conflict there when work begins on Trident. I suspect that the order for the 18SSN was placed to get it in before the capacity was no longer available.
Dr. Alan Glyn: Am I correct in saying that the hon. Gentleman stands by the Labour party election manifesto, which called for the cancellation of the Trident programme and a refusal to deploy cruise missiles?
Mr. Duffy: I was going to deal with that later, but I shall make the point now. Given my concern about overstretch in the Department and the way in which the Navy is singled out again and again, and given the prior claims, as I and some Conservative Members see them, of other systems, especially escort vessels, it is obvious that something will have to go. One thing that will have to go is a system which duplicates another system. That is Trident.
Unlike Opposition Members, Conservative Members have failed to recognise the radical new thinking on nuclear and conventional non-nuclear strategy that is emerging within the NATO establishment itself.
Mr. BestlWill the hon. Gentleman commit his party to stating that if it cancelled Trident it would ensure that the expenditure thereby saved would continue to be spent on the armed forces?
Mr. Duffy: I hope that the hon. Gentleman will understand and accept that the Labour party is as concerned as the Conservative party for the proper defence of this country. We differ from the Conservative party, and especially Ministers, on defence priorities. Trident is a case in point. I shall spell out how far we differ. Earlier this year senior NATO officials—some Conservative Members are aware of this—warned the countries of the Western Alliance that they were alarmingly dependent on nuclear weapons for their defence. They had us in mind. The only way out of this dangerous situation, according to General Bernard Rogers, SACEUR, is for NATO to improve its conventional forces and to spend more on new high technology weapons.
Mr. Best: Would the hon. Gentleman do that?
Mr. Duffy: We would certainly do that. The Labour party has been dedicated to an improvement of our conventional posture. We are well aware that a special onus falls on us in the conventional area.
The Select Committee on Defence said that
"it is very difficult to see how it will be possible to give top priority to the Trident programme throughout the decade without something else being squeezed out"—
that was being said by some Conservative Members—
"unless economic conditions improve dramatically. Other equipment programmes are likely to be displaced in terms of time, quantity, or quality or lost altogether."
Those comments were made by the House, not by the Labour party.
Mr. Best: There is nobody on the Labour Benches.
Mr. Duffy: So many Conservative Members have been anxious throughout the debate to put on record the attendance, as they invariably do during defence debates, that it is only fair to put on the record that at no time during the debate have more than 20 or 30 Conservative Members been present. That is the attendance of a party that is supposed to be defence orientated. For most of the debate we have not seen more than 20 Conservative Members in the Chamber. There were only four Conservative Members present an hour ago and there are now more than four Opposition Members present.
There is a growing consensus within the Alliance that we need to strengthen our conventional capabilities if we are not to raise the nuclear threshold. This is due in part to military considerations and in part to political considerations. Changes in the military balance over the past decade have rendered the Alliance's doctrine of
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collective response rather incredible. The achievement of strategic nuclear parity between the United States and the Soviet Union, coupled with Soviet dominance in theatre nuclear weapons, has made NATO's threat of nuclear escalation in the face of imminent conventional defeat rather unbelievable. There is a strong need militarily as well as politically to modernise and strengthen our conventional forces to implement flexible response as a credible deterrent strategy.
New technologies in the areas of guidance, target acquisition and miniaturisation are now expanding the number of military missions that can be accomplished by conventional weapons. New technology and high technology are making possible a much more effective conventional response. There is little if any evidence of such awareness on the part of Conservative Members, and none at all in the Government's defence policy. That explains why there is a lack of commitment by the Government towards the Navy. When the squeeze is on, historically the Navy suffers. The Navy is suffering again as it has suffered before and there are some Conservative Members who know that.
When the Labour Government were in office they were wholehearted in support of the work that was being done in the ship department on the new diesel-electric submarine, the offshore patrol vessel and in furthering the concept of a smaller and cheaper frigate.
We welcome the order that has now been placed for the first type 2400. We have noted with gratification the success of the two ships of the Leeds Castle class offshore patrol vessel, which were built by that fine shipyard of Hall Russell of Aberdeen, which acquitted itself so well in the south Atlantic. The light, small, and cheaper frigate has turned out to be rather larger than would have been expected when the Labour Government left office in 1979. It is known as the type 23. These developments, which we welcome, need the help of the Government and of the Ministry of Defence. They need the help of the Secretary of State as well as that of the industry. Without that help there will not be good prospects of employment in building variants of these classes for overseas sales.
Our overseas sales performance has become lamentable and now we have opportunities to improve it. We all wish to see British industry performing better, but we know that in marketing its products overseas it needs help from us. It needs help from the Minister's Department. It knows only too well that overseas nations with which it is competing help their industries. It is essential, therefore, that there should be a stronger commitment to the Navy on behalf of the Government that is extended to the ships that are on stream and to the providers of those ships, the industries and the fine yards that are building them. Also involved are the sales organisations and the ships' visits which may take place, which will help further our prospects overseas.
The hon. Member for Yeovil mentioned the northern flank, which is becoming increasingly important in the eyes of Germany, which has now assumed more naval roles north of 61 degrees latitude. The hon. Gentleman asked about the United Kingdom's role on the northern flank and about the future of Fearless and Intrepid, and he was not convinced by the Minister's argument despite what was said about an improvement in the numbers of the Royal Marines.

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What about inshore defences? Has the Minister considered whether coastal forces, such as those that we had during world war two, will man any gaps, along with minesweepers—both manned by the reserves?
The Minister said that this year there would be an exercise on the Arapaho project which would be made possible by leasing equipment from the United States. Does that mean that we do not have the equipment for an Arapaho project of our own? Some of us have been talking about this project for years. When the Labour Government left office, we thought that there was to be an Arapaho programme. It seems that after five years we cannot exercise that programme without the Americans' help. This would be unbelievable even to some of the Minister's Back-Bench colleagues. I have been arguing all afternoon that a limited budget and rising defence costs mean that Britain must make a choice. We can no longer afford to maintain our commitments to NATO, our obligations to our outer area responsibilities and our requirement to protect United Kingdom bases. The Minister must choose and look again at his priorities.
The Labour party believes that a fundamental reappraisal of strategy is called for. There should be task specialisation and burden sharing within NATO. We should like two basic classes of escort and a cheaper utility escort which could be deployed much closer to land in the south-west approaches and in the Channel.
Design criteria and concepts should be more radical so that ships are constructed more quickly and cheaply—perhaps on the Mekon basis which some of us have seen in Hamburg. Construction methods and costs should be radically reviewed. Resources should be provided to recondition merchant and fishing vessels for naval purposes.
We believe that the potential of the sea is a matter for all of us. The overall situation is extremely complex. It includes a huge variety of interests, some of which are commercial, public, private or military. Most are interconnected nationally and internationally. All of them are vital for Britain's well-being. However, taken as a whole, these interests can too easily slip into decline. There can be no sign of a recovery under the Government until there is a firmer commitment from the Government to the Royal Navy.
9.38 pm
The Under-Secretary of State for Defence Procurement (Mr. John Lee): I am pleased and honoured to have the opportunity tonight to close this Navy debate. There is a certain relevance in having the former Member for Nelson and Colne—myself—to reply. I am trying to trace Admiral Colne.
Perhaps there has been a little more controversy during this debate than in the recent Army debate, yet I am sure that no one is too surprised about that. Controversy is nothing new to the Navy. Some hon. Members may recognise the words of Samuel Pepys who in 1692 stated:
"The life of a virtuous administrator in the Navy is a continual defensive war against Ministers of State and in particular against the Lords Treasurer and all other prejudiced inquisitors and malcontents."
How topical that sounds.
In opening the debate, my hon. Friend the Minister of State talked about the size of the Royal Navy and its strategic deployments and capabilities. I shall set out the current position regarding the naval programme in three
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specific areas—the dockyards, naval equipment and weaponry, and the current shipbuilding programme. In so doing, I hope to answer as many as possible of the points raised in the debate.
Before moving on, however, I should like to spend a few moments on an issue which is both practical and emotional and concerns the traditions and the spirit of the Royal Navy and the affection in which it is held by the British people. I refer to the naming of ships. As hon. Members are aware, among the most sophisticatd surface ships we are currently building are the type 22 frigates—the Broadsword class. At present, five of these ships are in service: Broadsword herself, Battleaxe, Brilliant, Brazen and Boxer. We have already announced that the next two are to be called Beaver and Brave. Following these, the Admiralty Board has now decided to discontinue the line of names beginning with "B".
I am honoured tonight, therefore, to announce to hon. Members that we have approved today that the name of HMS type 22–08 will be London and that type 22–09 and type 22–10 will be called HMS Sheffield and HMS Coventry respectively. I hope that the House will join me in acknowledging the justice of restoring the last two names—so tragically lost last year in the south Atlantic—to the running fleet at the earliest opportunity. I am sure that there will be much pleasure in those cities at having their names once more linked with ships of the line and I pay tribute to those hon. Members, including my hon. Friend the Member for Sheffield, Hallam (Sir J. Osborn) and especially the hon. Member for Sheffield, Attercliffe (Mr. Duffy), who pressed that cause on a number of occasions.
Mr. Duffy: I think that I can safely speak on behalf of the city of Sheffield, as I know how widespread was the concern at the loss of the Sheffield and how close the attachment of the city to that ship was. People very much wanted the name to be revived. The Minister has been most responsive, and I thank him on behalf of that city.
Mr. Lee: That is most kind. I thank the hon. Gentleman.
While I am on the subject of the type 22s, the House may be interested to know that on Thursday 24 November, on the Royal Aircraft Establishment Aberporth trials firing range off the west coast of Wales, the ship's company of HMS Brilliant, using the ship's Sea Wolf system, launched a Seawolf missile against an incoming Exocet missile. The trial was successful and the Sea Wolf intercepted the Exocet at maximum range, successfully "killing" it and causing it to ditch in the sea. This was the first time that this difficult trial had been undertaken and I am sure that the House will be pleased at the confirmation that it gives of the Sea Wolf system's effectiveness. I believe that a film on it will be shown on television in the near future. A number of hon. Members, and especially my hon. Friend the Member for Beverley (Sir P. Wail), also referred to Sea Wolf in today's debate.
The main Opposition spokesman, the hon. Member for Attercliffe, strove manfully and almost single-handedly to keep the Opposition end up. He was almost the sole ship of the line, with the possible exception of an aging destroyer and a new corvette and with very limited refuelling. Labour Members in general behaved very much like the Argentine fleet and remained firmly in port. In consequence, as my hon. Friend the Member for

733
Nottingham, North (Mr. Ottaway) said, Conservative Members had to provide both the attacking squadron and the defending squadron in this exercise.
Mr. Douglas: They nearly sunk you a few times.
Mr. Lee: The hon. Member for Attercliffe informed us that during the election campaign he toured the country giving a set speech on Labour's defence policy in Plymouth, Portsmouth and Barrow. The election results suggest that the people of those three constituencies were as sceptical as we are about Labour's defence policy and its ability to square the circle.
In its manifesto the Labour party said clearly that if returned to power it intended to reduce defence expenditure. Page 37 stated:
"Labour will reduce the proportion of the nation's resources devoted to defence so that the burden we bear will be brought into line with that of the other major European NATO countries, without increasing the reliance on nuclear weapons."
The nonsense of that has been pointed out by my hon. Friend the Member for Upminster (Sir N. Bonsor) and others.
If we reduce our defence expenditure from the £15 billion in 1982–83, which then represented 5·3 per cent. of GDP, to the 3·5 per cent. figure which would be the NATO equivalent—taking into account major European countries' contributions—that would amount to a total reduction in defence expenditure of about £5 billion per annum.
The basis of Labour's case tonight has been that the cancellation of the Trident project, at a possible saving of about £7 billion in total, would provide the resources to fund new vessels and new orders for all the shipyards. The fact is, as many Conservative Members have pointed out, Labour cannot square the circle, and I am afraid that its defence policy lacked credibility.
Mr. William Powell: Can my hon. Friend confirm that a reduction in the defence budget along the lines that he has just mentioned would be equivalent to more than the annual cost of running the Royal Navy?
Mr. Lee: I think that the answer is, "Yes, just."
Several hon. Members have spoken about Trident, specifically the right hon. Member for Lewisham, Deptford (Mr. Silkin). He referred to the allegations he made in July 1982 that Trident would absorb 20 per cent. of the budget for new equipment. My former right hon. Friend the Member for St. Ives, Sir John Nott, did not agree that Trident would absorb 50 per cent. of the cost of orders for the Royal Navy. He pointed out that the Tornado programme had been taking a far larger proportion of the equipment budget. As we have made clear repeatedly, Trident will cost on average 3 per cent. of the defence budget over the period during which it will be introduced into service, rising to a peak of 6 per cent. The peak in terms of the defence equipment budget is about 11 per cent.
Mr. Ashdown: As the Minister is talking about Trident, I hope that he will not dodge my question but will tell us whether Trident will come out of the naval Vote. If it will, what percentage of the naval procurement budget will it occupy?
Mr. Lee: There is no such thing as a naval Vote. I shall endeavour to write to the hon. Gentleman to deal with his point.[Interruption.] I shall not give a glib answer.
The hon. Member for Dunfermline, West (Mr. Douglas) referred to the United States dollar expenditure on Trident. We have always recognised that Trident involves a significant dollar cost. We took account of that when the original decision was reached. We still expect the dollar spend to be about 45 per cent. of the total. Those figures have been stated before.
I am glad that a number of my hon. Friends, including the Members for Beverley, for Portsmouth, South (Mr. Pink), for Plymouth, Drake (Miss Fookes), and for Corby (Mr. Powell), have spoken strongly in defence of the Trident programme.
The hon. Member for Attercliffe and a number of other hon. Members talked about the Merchant Navy. The hon. Member for Attercliffe mentioned the Merchant Navy's adequacy to support defence operations. That is a matter which my right hon. Friends the Secretary of State for Defence and the Secretary of State for Transport keep under regular review. There are sufficient ships available of the right type to support current defence plans. The question of subsidies to the Merchant Navy is a matter for my right hon. Friend the Secretary of State for Transport.
I wish to pay tribute to the men of the merchant marine, especially for their Falklands contribution. My hon. Friends the Members for Bristol, East (Mr. Sayeed) and for Corby and the hon. Members for the Isle of Wight (Mr. Ross) and for Jarrow (Mr. Dixon) have referred to the sterling work of the merchant marine.
Perhaps second only to the question of ship numbers as a subject for debate in naval circles and in the naval enclaves of this House is the issue of the role and future of Her Majesty's dockyards. I should like to say a few words about that now.
The reduction in size of the royal dockyards organisation announced in Cmnd. 8288 was not a self-contained decision. It was of course a consequence of the decision to discontinue the practice of major mid-life modernisation of surface ships. It also reflected the decision on the future size of the fleet. It was not an easy decision; but it was a necessary one. Of course it is very sad when a chapter of history comes to an end as at Chatham and Gibraltar, but I can assure the House that this Government are committed to do everything possible to minimise the disruption and hardship to those most directly involved.
I wish briefly to summarise the position in our respective dockyards—first at Chatham. As the House will know, Chatham naval base, including the dockyard, is to close in March next year. Ship refitting came to an end in June following completion of the refits of the nuclear submarine HMS Churchill and the frigate HMS Hermione. Both these major projects were completed in a timely fashion and to a high standard. That achievement expresses the character of the Chatham work force.
My hon. Friend the Member for Gillingham (Mr. Couchman) made a moving speech and those hon. Members who heard it must have been enormously impressed. I am sure that all those who work or worked at Chatham will appreciate his words.
This House has heard much about the financial imperatives that have dictated the closure of Chatham naval base, and we all know their force. Let me now refer to the pride and loyalty of the men and women of Chatham

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dockyard. It was these qualities that enabled them, with the knowledge of closure in their minds, to work unstintingly through the Falklands crisis of last year and right up to the present time, to finish their task with such distinction. We owe them a great deal.
In recognition of this, we have been involved since the closure decision with the efforts of other central and local government departments and agencies to put the site to productive use in such a way as best to serve local interests. The more modern part of the dockyard is being taken over for redevelopment by English Industrial Estates. The Medway ports authority has taken over one of the basins, and various other concerns are already in occupation, in advance of final dockyard closure. In the original part of the dockyard are a number of architecturally important buildings and facilities that will be preserved, and we have already released several factory buildings in this area to firms which are carrying on traditional activities, including rope-making and the production of flags and banners. It is our hope that measures such as those I have briefly described will do much, as they mature, to offset the consequences of naval base closure.
I recently saw a delegation of those hon. Members most concerned with the Chatham rundown. If I may say so, my hon. Friends the Members for Medway (Mrs. Fenner), Gillingham and Mid-Kent (Mr. Rowe) are working assiduously for their constituents.
At Portsmouth, I am pleased to say we have now reached agreements with the work force over working practices that allow us to go ahead and establish a fleet operating maintenance base with effect from October next year. This will mean that, instead of reducing numbers in the present dockyard element of the naval base to some 1,500 as originally planned, we will retain instead about 2,800 civilian employees, in addition to the people employed on stores and other duties. It also means that refitting work will continue at Portsmouth to supplement the capacity of Devonport and Rosyth.
I regret that time is rather short. I had intended to say more about the Gibraltar dockyard. I am sorry to say that there are still those in the House and outside who do not seem to believe that the Government mean what they say in saying that the naval dockyard at Gibraltar will close by the end of 1984. Those people are mistaken. There is no going back on our decision.
I wish to mention the Government's plans for the other dockyards at Devonport and Rosyth. Since taking office I have visited both dockyards, which I hope demonstrates my concern for the wellbeing of dockyard skills, which have been built up through generations and are a major national asset. Who could fail to be impressed by the massive covered frigate refitting complex at Devonport, which takes three frigates at a time, or its nuclear submarine refitting complex with its enormous refuelling crane—a facility unparalleled anywhere in the West, even in the United States. Rosyth has a fascinating synchrolift and also houses the Polaris refitting operation. The cost of the work carried out in the royal dockyards during 1982–83 was about £608 million.
The hon. Member for Dunfermline, West referred to the worries and concerns at Rosyth. The Government have every faith in Rosyth—it has a future, as has Devonport.
On the question of new equipment——
Mr. Douglas rose——
Mr. Lee: I shall not give way.
Mr. Douglas: Will the Minister give way on the point about Rosyth?
Mr. Lee: No.
Mr. Douglas rose——
Mr. Deputy Speaker (Mr. Harold Walker): Order. The Minister clearly is not giving way. The hon. Member for Dunfermline, West (Mr. Douglas) must resume his place.
Mr. Lee: Only a few minutes remain and I must deal briefly with some of the points raised by hon. Members.
My hon. Friend the Member for Arundel (Mr. Marshall) raised the question of cardinal point specifications, which are a derivative of performance specifications. We have been moving towards that system and it is being used in the surface-to-surface guided weapon tenders.
A number of hon. Members referred to the Sea Eagle, including my hon. Friends the Members for Arundel, for Portsmouth, South, for Upminster, for Ynys Môn (Mr. Best), for Bolton, West (Mr. Sackville)—who could be described as the original Sea Eaglet—and for Berkshire, East (Mr. MacKay). They all lobbied hard for the Sea Eagle. A number of hon. Members have written to me in support of it. There are four contenders for the surface-to-surface guided weapon, and all the relevant facts will be taken into account before we reach a decision.
Another major competition is taking place for the close-in weapon system to be fitted to a variety of ships, including the type 23, and the Invincible class carriers. My hon. Friends the Members for Cambridge (Mr. Rhodes James), for Drake and for Grantham (Mr. Hogg) and the hon. Member for Isle of Wight recently lobbied on behalf of the Swiss-United Kingdom tender. There are four contestants for that system also.
We are increasingly trying to introduce competition into new ship construction. We shall be placing orders for two type 22 frigates relatively soon. Three yards are competing for the orders—Vosper Thornycroft, Cammell Laird and Swan Hunter. I have received two delegations of hon. Members, one in support of Cammell Laird and the other in support of Vosper Thornycroft. Both delegations lobbied their cases and causes.
As my hon. Friend the Minister said when he opened the debate, the Royal Navy is now enjoying a considerably greater financial allocation than when we took office—£750 million more this year, giving a total of £4·5 billion., of which £2 billion will be spent on equipment. Even when expenditure on Trident is at its peak, we still plan to spend more on the conventional Navy than we spent in 1978–79.
It is with pride that I wind up this debate on the Royal Navy. Today's Royal Navy is more professional than it has ever been. It is the most potent naval force in the world after the two super powers.
Our Navy honours its Alliance responsibilities and yet maintains an independent capability around the world. The Government have given sustained backing to our Navy in terms of pay, new ships and new, improved weapon systems.
We salute those who sail under the White Ensign. They continue our great maritime traditions. They have never

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let us down in peace or in war and this House has a duty to give them the backing and support that they so richly deserve.
As Charles II said:
"It is upon the Navy, under the Providence of God,——
It being Ten o'clock, the motion for the Adjournment of the House lapsed without Question put.

Statutory Instruments, &c.
Mr. Deputy Speaker (Mr. Harold Walker): With the leave of the House I shall put together the Questions on motions 2 to 10.
Motion made, and Question put forthwith pursuant to Standing Order No. 79(5) (Standing Committees on Statutory Instruments, &c).

Statutory Instruments, &c.

  INCOME TAX
  That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (Trinidad and Tobago) Order 1983 be made in the form of the draft laid before this House on 27th July.
  That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (Tunisia) Order 1983 be made in the form of the draft laid before this House on 27th July.
  That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (Netherlands) Order 1983 be made in the form of the draft laid before this House on 3rd November.—[Mr. Douglas Hogg.]
  Question agreed to.
  Address to be presented to Her Majesty by such Members of this House as are of Her Majesty's most Honourable Privy Council or of Her Majesty's Household.
  Motion made, and Question put forthwith pursuant to Standing Order No. 79(5) (Standing Committees on Statutory Instruments &c.).

  LEGAL AID AND ADVICE
  That the Legal Aid (Financial Conditions) (No. 2) Regulations 1983, dated 8th November 1983, a copy of which was laid before this House on 8th November, be approved.
  That the Legal Advice and Assistance (Financial Conditions) (No. 2) Regulations 1983, dated 8th November 1983, a copy of which was laid before this House on 8th November, be approved.
  That the Legal Advice and Assistance (Prospective Cost) (No. 2) Regulations 1983, dated 8th November 1983, a copy of which was laid before this House on 8th November, be approved.
  That the Legal Aid (Scotland) (Financial Conditions) (No. 2) Regulations 1983, dated 10th November 1983, a copy of which was laid before this House on 14th November, be approved.
  That the Legal Advice and Assistance (Scotland) (Financial Conditions) (No. 3) Regulations 1983, dated 10th November 1983, a copy of which was laid before this House on 14th November, be approved.
  That the Legal Advice and Assistance (Scotland) (Prospective Cost) Regulations 1983, dated 10th November 1983, a copy of which was laid before this House on 14th November, be approved.—[Mr. Douglas Hogg.]
  Question agreed to.

Property Services Agency
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Douglas Hogg.]
10 pm
Mr. Tim Smith: I am grateful for this opportunity to raise the subject of the Wardale inquiry into recent cases of fraud and corruption in the Property Services Agency.
The PSA was set up in 1972. It is responsible to the Secretary of State for the Environment and for the provision to other Government Departments of property management services, building construction and management and appropriate supplies. My hon. Friend the Under-Secretary of State for the Environment was kind enough to send me a copy of the PSA's annual report for 1982–83 recently. It shows the substantial scale of the PSA's operations.
In 1982–83, expenditure on major works totalled £455 million, on smaller new works it totalled £144 million and on maintenance it totalled £684 million. That represents a grand total of £1·277 billion. That total is estimated to rise to £1·493 billion this year and £1·625 billion next year. At 31 March this year the PSA employed 28,631 people. That represents a 26 per cent. drop as compared with 31 March 1979.
In the foreword to the annual report, my right hon. Friend the Secretary of State for the Environment comments:
"Of course in a major organisation of this size there are problems, not least when the Government asks that the rising volume of work should be handled by reduced numbers of staff."
It is worth quoting the PSA advisory board's review of the year. That advisory board is an independent review body.
It says:
"The Advisory board believes that the PSA generally fulfils its many tasks in a satisfactory manner and that it is staffed by competent people who take pride in their work. The Board has seen much to be encouraged about in the Agency. However, there is scope for improvement in some areas such as financial control, management methods and career planning."
That is the context into which we must put the Wardale inquiry report. On 29 April 1982, my right hon. Friend the Secretary of State for Defence, who was then the Secretary of State for the Environment, announced that he had commissioned Sir Geoffrey Wardale and Mr. Anthony Herron, a senior partner of Touche Ross, chartered accountants, to carry out a review with the following terms of reference:
"To investigate the circumstances of recent cases of fraud and corruption in PSA and to recommend what changes in procedures or organisation are desirable in the light of your findings."
The Secretary of State emphasised that, in his opinion, the vast majority of PSA staff carried out their duties honestly and conscientiously and that there were no questions about their integrity. I am sure that is correct.
As well as being a former second permanent secretary at the Department of the Environment, Sir Geoffrey is a member of the PSA advisory board. Therefore, I do not think that it can be said that he could have it in for the Civil Service in general or for the PSA in particular. That is why I think that his report makes alarming reading.
Tha alarming aspect is not so much the fraud as the attitude of management towards it. The report, in paragraph 4.2.1 says:
"PSA has as its object the construction, maintenance and furnishing of buildings required by Government departments who are its clients. It is understandable that satisfying the

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demands of those clients is treated as a high priority and we are informed that political pressures may reinforce this. On the extent of the success of PSA in satisfying its clients we were not, in our enquiries, directly concerned. It appeared, however, that other management problems, such as effective staffing and financial control as we understand it, took a lower priority, and did not seem to command the attention they deserved. We were concerned to discover that there was sometimes a reluctance to acknowledge that problems existed in these areas and a lack of vigour in pursuing them when they were identified. Further, and as a facet of this, management's approach towards dishonesty and fraud does not always seem satisfactory. These are attitudes which collectively we can only call complacent. We have also noted a lack of understanding of both individual responsibility and the delegation of authority."
The House will understand why I felt that I should raise the matter. Not only have problems not always been recognised, but paragraph 4.2.2 of the report says:
"Where problems have been recognised and remedial action taken, there often seems to be a lack of vigour in following it through. A good illustration of this is the introduction of the 5 per cent. check of all works orders by the District Works Officer which is represented by senior management to be a major measure against irregularities. The implementation of this check has been slow and moreover it has a number of fundamental conceptual defects."
The 5 per cent. check has also been concerning the Comptroller and Auditor General for some time. In a memorandum to the Public Accounts Committee in May 1982, he reported that the PSA internal audit department had noted in October 1980 that it had been commenting for three years prior to that on the degree of failure by district works organisations to carry out their 5 per cent. checks.
More generally in that memorandum, the Comptroller and Auditor General said that he was becoming concerned about the time that it was taking to determine revised systems of controls and to secure general compliance with them. Following that memorandum, the Public Accounts Committee, in its 25th report, during the parliamentary Session 1981–82, expressed concern that the PSA had been taking so long both to act on audit evidence that prescribed checks were not operating properly and to implement revised controls.
The Comptroller and Auditor General returned to the subject in his report on the Appropriation Accounts for 1982–83. He concluded that while the PSA was making good progress in increasing the extent of DWO spot checks and improving its control over stores, serious deficiencies in control remained. I understand that the Public Accounts Committee is likely to take oral evidence on that subject early in the new year. I am glad that it is continuing to pursue the matter.
As well as calling for changes in management attitudes, Wardale made six principal recommendations. First, a budgetary control system should be introduced for all expenditure. Secondly, new management information systems should provide the information necessary for proper financial and budgetary control. Thirdly, regional management inspection teams should be formed to give regional management an annual assurance of the proper operation of its area and district. Fourthly, in the management of contracts the respective responsibilities of all staff should be recognised. Fifthly, management should take a more commercial approach to its activities where existing controls may not be cost effective. Sixthly, a more dynamic approach to saving, training and disciplinary matters is required.
According to the Comptroller and Auditor General, the PSA was finalising actions planned to deal with those
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recommendations. The Minister will recall that I asked him about that in a parliamentary question. On 31 October, he told me that decisions resulting from the programme of action would be implemented as quickly as possible. He also told me:
"To ensure that the lessons learnt from the report are fully understood throughout the agency, a series of meetings for staff at all levels of management, attended by senior officers of the agency has been arranged."—[Official Report, 31 October 1983; Vol. 47, c. 265.]
In addition, both the PSA's annual report and the section on the PSA which appears in the White Paper on the financial management initiative, contain several positive proposals for structural changes in the PSA. I hope that they will be changes for the better. The British Civil Service is mercifully free from corruption. However, in response to observations made by the PSA, the Public Accounts Committee said:
"Having regard to the nature of some of the offences, we believe PSA are on weak ground in playing down the significance of the detected cases in their regional organisations. We do not consider that comparison of these cases with the broad statistics for convictions in the country as a whole can be meaningful; nor do we think it realistic to compare frauds involving long-term collusion or conspiracy among civil servants, where the losses are uncertain, with measurable 'shrinkage' in department stores."
That was the comparison that the PSA tried to draw.
People expect the highest standards from civil servants. Generally speaking, the Civil Service is free from corruption, but the Wardale report highlighted an exception to that general rule. Therefore, it is essential that its conclusions and recommendations are taken seriously and implemented as soon as possible. I should be grateful if, in his reply, the Minister will give me as much detailed information as he can about the response of the PSA to the principal recommendations of the Wardale inquiry.
10.13 pm
The Under-Secretary of State for the Environment (Sir George Young): I am grateful to my hon. Friend the Member for Beaconsfield (Mr. Smith) for providing this opportunity to debate the Wardale report. My hon. Friend made a cogent and persuasive case, as one would expect of him.
We are rightly proud of our Civil Service and its traditions, and it must be a matter of great concern to any Government when performance falls below the standard expected, especially in regard to honesty of conduct. We were therefore determined that, however uncomfortable the report's findings might be, they should be brought to public notice, and my right hon. Friend the Secretary of State for the Environment took an early opportunity to publish the report, to expose it to press comment, and to outline his proposals for change.
The Property Services Agency has been in existence in its present form since 1972. It brought together the works and other activities of the three defence services and the former Ministry of Public Buildings and Works as a self-contained agency within the Department of the Environment. Since 1976 the supplies area of the PSA has operated as a Government trading fund. The agency has at present about 28,500 staff worldwide, of whom about 13,000 are industrial grades. It handled in 1982–83 about £1·6 billion of expenditure on new construction, maintenance, rents and supplies.
In the United Kingdom the basic unit of organisation is the district works office. There are 153 district works

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offices. The district works officer is directly responsible for most of the maintenance and much of the minor new works associated with all the Government's buildings and installations in his district and, usually, a number of buildings of clients, such as British Telecom, for which the agency does work on repayment terms. He carries a heavy responsibility for management and the execution and control, including financial control, of those works services. The district works officer reports to an area officer, of whom there are 34, and they in turn report to the eight regional directors in England, the director of the central office for Wales in Wales, or the director, Scottish services, in Scotland. This organisation as a whole we refer to as the United Kingdom territorial organisation, which is in turn answerable to Ministers.
My hon. Friend mentioned the report of the Comptroller and Auditor General, who commented on the position within the PSA before the final Wardale report was submitted. His comments do not take into account the steps that we have taken, or are planning to take, following Wardale, which I shall outline.
The 61 cases, or alleged cases of fraud or irregularity, which were the occasion of the Wardale inquiry, arose mainly at the district level in various parts of the United Kingdom territorial organisation during the period 1976 to 1982. They were mainly in maintenance, including stores, and minor new works. The aggregate value of the cases is estimated at £600,000. Several of them involved only people outside the PSA. Many of the cases did not involve fraud, but, where they did, people were dismissed. I should like to add that all Wardale-related convictions have resulted in dismissal, save where the officer has resigned or retired before the court hearing.
About 170 PSA staff have been involved directly or indirectly in cases of theft, fraud or irregularity in the past five years, and 61 have been dismissed. Although the press has linked all 61 dismissals with the serious cases of fraud and corruption, about half of those dismissed were guilty of the theft of miscellaneous items of no great financial value. To put this in a context—in the light of what my hon. Friend said, I do not wish to make too much of this—the expenditure in UKTO on maintenance and minor new works in 1982–83 alone was about £660 million and the number of staff at district level in UKTO was more than 17,000.
By any standards this is a low incidence of misdemeanour, but cases occurring in the agency are always treated rigorously. Approximately 100 staff have been involved in irregularities but have not been dismissed, because of the minor nature of the irregularities, such as the theft of property valued at £3·40 or the payment of two night's subsistence where only one is applicable. In those cases the staff concerned received formal reprimands.
In view of the public interest shown in the cases of fraud and irregularity that occurred my right hon. Friend the former Secretary of State—now Secretary of State for Defence—decided that there was need for an independent investigation into the circumstances of the cases. We were fortunate in obtaining the services for Sir Geoffrey Wardale, formerly second permanent secretary at the Department of the Environment, and Mr. Anthony Herron, a partner in Touche Ross, chartered accountants, to undertake this. They were commissioned in April 1982
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and submitted an interim report in February 1983 based upon their investigations in four regions. The Secretary of State decided that the investigations should be pursued in the remaining six regions, and the final report was submitted on 3 August 1983. In all, Sir Geoffrey and Mr. Herron reviewed 49 of the 61 cases. Several of those involved anonymous allegations, and in eight cases they were not substantiated.
The burden of the Wardale recommendations was plain from the interim report. As my hon. Friend said, they revealed within the PSA an attitude of mind and operating systems which allowed fraud to exist and led to a wider study than one would expect fraud to require. When we knew the main thrust of the study team's proposals from the interim report, we set up a working group to develop a provisional plan for management action on the recommendations pending the receipt of the final report.
The report makes many recommendations ranging from the financial and management control procedures for works stores expenditure to the agency's policies for staffing and training for district work officer appointments, taking in on the way management information systems, audit controls, certain contractual matters and disciplinary procedures. Those are all important subjects, but underlying them was a more general criticism that management was not sufficiently alive to the existence of problems, and that this was exemplified by a concept of financial control which lacked an adequate budgetary element, the existence of management control techniques which were deficient in some respects, and insufficiently rigorous policies for disciplinary action against staff and third parties. My hon. Friend rightly drew attention to the problem of attitudes, which are often more difficult to change than are procedures. My hon. Friend rightly asks what is now happening to put things right.
When he announced the publication of the report on 5 October, my right hon. Friend stressed the seriousness with which he took it and his determination that any necessary changes in management systems and management attitudes should be carried through.
Our first job has been to impress on staff the seriousness with which Ministers take the report. We have taken urgent steps to ensure that staff at all levels of management have received and read the report and understand the action that is required on the report's recommendations. To secure the change in attitudes that is required, a series of meetings has been held for all regions, involving the regional senior staff and area officers with top management from PSA headquarters. To take the message down to district level, a further series of meetings is taking place in the regions now.
The regional meetings have shown that the management staff of the agency are anxious to respond to the Wardale report criticism. From my two years in my present post, I can say that I am impressed by the high calibre and dedication of the PSA staff that I have met. It is in their interest to accept that the management of the agency can and should be improved. Their and my concern is that the vital work that they do in maintaining the essential services of government should be carried on to the same high standard that exists, while improving management attitudes as well. This will not be easy, given the pressures on us, but we are determined to make progress. In addition to changing attitudes, a number of special changes have been introduced and I can give my hon. Friend some examples.

743
First, on contract notation limits, staff have been reminded that the notation limits for contractors must be properly observed and monitored. In particular, no firm should be invited for a contract the value of which is more than 15 per cent. above the firm's notation without agreement. Care is being taken to ensure that contractors are not overloaded with PSA work. Checks are being carried out on existing contracts, where notations may have been seriously exceeded, and corrective action taken wherever possible.
Secondly, there is the 5 per cent. check of work and stores orders, which my hon. Friend mentioned. Revised arrangements for the 5 per cent. check were issued on 1 July 1983, stressing DWOs' overall responsibility and the need to keep under review small works orders generally, in addition to the 5 per cent. check.
Thirdly, on floor laying contracts, PSA supplies ordering officers have been reminded to issue orders with adequate details of the work required and to give guidance on the checks to be made before certifying invoices. Certification for all such orders must be by an officer superior to the ordering officer. Departmental accommodation officers have been reminded of their responsibility for certifying that the work has been carried out properly.
Some recommendations, for example, those relating to stores procedures and to issuing guidance clarifying the respective roles of professional and technical officers and quantity surveyors in relation to measured term contracts, can be implemented fairly easily. Other recommendations that make continuing resource demands—for example, separating the duties of ordering work on jobbing contractors and certifying for payment—are more difficult. But we can and will make progress.
The report recommends the introduction of improved budgetary control arrangements for maintenance expenditure, including the budgeting of such expenditure by individual buildings or by small groups of buildings. The PSA already has a job by job system of control for all work which individually exceeds £2,500—in all, 75 per cent. of PSA's total works expenditure. As I have said, the main problem lies with the bulk maintenance below that threshold. Much—although not all of this—typically comprises a mass of small orders down to a few pounds in value, and is devoted to the repair of defects which arise through the normal wear and tear in buildings and cannot
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be identified in advance of their occurence, although we can predict the scale of expenditure that is likely to arise in adequately large aggregations of the estate. While we accept the need for all maintenance expenditure to be effectively budgeted, there is a real practical question, which we are urgently examining, about the degree of disaggregation which it is useful and cost-effective to seek in devising improvements to our existing systems.
The report also makes recommendations on audit arrangements.
We are concerned that the recommendation for the creation of a regional management inspection body might involve some confusion between the functions proper to line management and the necessarily independent role of internal audit. There is a danger of blurring the responsibility of line management to ensure that adequate control systems exist and operate effectively, and to initiate suitable inspection and checking arrangements. However, in the general spirit of the report's recommendations, the PSA will be considering how, without compromising the independence of internal audit, its work might be developed to provide line management with a stronger feedback on the effectiveness of its operations and also whether the present arrangements for management inspection checks at various levels can be strengthened and more effectively co-ordinated.
If my hon. Friend would like further details of the follow-up to the report, I shall be happy to supply them in correspondence. I have, of course, taken note of the additional points that he made. I regard the Wardale report as a constructive, helpful and salutary report. My colleagues and I and the senior officers of the agency are determined that it shall be acted upon with all the speed we can muster.
The report has been treated with the seriousness that it deserves from other levels of management in the agency, and I am convinced that all our staff will do their best to implement its recommendations in the best traditions of public service as and when decisions are taken on them by management and generally to act in a manner calculated to obviate any future criticisms of the kind Sir Geoffrey Wardale and Mr. Herron felt constrained to make.
Question put and agreed to.
Adjourned accordingly at twenty-five minutes past Ten o'clock.