HC Deb 18 July 1984 vol 64 cc321-30

4.2 pm

The Secretary of State for Defence (Mr. Michael Heseltine)

With permission, Mr. Speaker, I shall make a statement about the central organisation for defence.

In my statement on 12 March, I explained that I wished to see stronger central control over defence policy, operations and resource allocation questions, whilst decentralising day-to-day management. I also wished to improve efficiency by eliminating unnecessary overlap between staffs in the Ministry and between the Ministry and commands. A consultative document was issued on these lines, which has generated substantial, helpful discussion.

In the light of this, and following detailed work by those concerned within the Ministry of Defence, the Government have reached conclusions on future defence organisation which are set out in the White Paper, Cmnd. 9315, published today.

To provide a defence-wide perspective on strategy, service programmes and operational requirements, and for the central control of the conduct of military operations, a unified defence staff is to be created incorporating relevant parts of the present naval, general and air staffs, and bringing together military personnel and those in civilian secretariats.

The defence staff will be headed by a vice chief of the defence staff and will report jointly to the Chief of the Defence Staff and the permanent secretary. These changes will further consolidate the position of the Chief of the Defence Staff as the principal military adviser to the Government.

The Government also attach critical importance to the role of the service chiefs of staff in the maintenance of the fighting effectiveness and the morale of their services, on which our defence ultimately depends. To exercise these crucial responsibilities, the service chiefs of staff will have full access to the defence staff, as well as retaining substantial staffs under their direct control.

The service chiefs of staff will continue fully to contribute to policy-making through their membership of the Defence Council, the service boards and the Chiefs of Staff Committee, and will retain their right of direct access to the Prime Minister.

As part of the new arrangements under the Chief of the General Staff, a major general level post has been provided whose primary responsibility will be for the Territorial Army, reserves and cadets, reflecting the importance that the Government attach to these matters.

The Ministery of Defence is responsible for the work of more than half a million service and civilian personnel and for a budget this year of around £17 billion. We need to satisfy the public—who ultimately meet this bill—that we are pursuing in every possible way the objective of value for money.

To strengthen the central control and allocation of resources, and the scrutiny of spending proposals, we intend to establish, under the permanent secretary, an

Financial accountability for the management of resources will be improved by the introduction of executive responsibility budgets. And in the procurement field the Government believe that there is a need to improve value for money in purchasing through greater competition and through further enhancing the professional expertise of the staff involved.

Finally, Ministers need to be able to draw on independent scientific advice on long-term options and on the scrutiny of major equipment proposals, and the staffs concerned are to be brought more closely under the direction of the chief scientific adviser. We also intend to strengthen our capability for considering arms control issues by establishing a joint military-civilian unit separate from the defence staff and reporting directly to the permanent secretary.

This White Paper carries forward the approach that lay behind the creation of a unified Ministry of Defence in 1964. There was controversy then about that re-organisation, and there is controversy still over the proper balance between the addressing of problems in defence-wide terms and on a single-service basis. The Government's plans represent a significant further evolution in a process that has been under way for more than 20 years, and I commend them to the House.

Mr. Denzil Davies (Llanelli)

The Secretary of State has made an important statement and issued an important White Paper which could have far-reaching consequences, not only for the organisation of the Ministry of Defence, but, more important, for the morale and efficiency of the armed forces. We shall need time to study the White Paper in detail—it must be one of the most leaked White Papers for some time. We have not so far had a clear explanation of why the changes are necessary. The case put forward so far is not proven. It looks like another exercise in escapism by the right hon. Gentleman which will do nothing to square the circle or to solve the right hon. Gentleman's defence budget problems.

Not only are the chiefs of staff worried — I understand their opposition — but many others are concerned. We believe that the changes may owe as much, if not more, to the right hon. Gentleman's obsession with business management as to any need for change. Ultimately the Government may stifle debate and discussion within the armed forces and the Ministry of Defence to the detriment of the forces.

What is the real reason for the change? Is it that the present system has a substantial defect? The system came through the Falklands war — the ultimate test of any such system. Did the system show a substantial defect in the course of that war? If it did, will the Secretary of State tell us what it was and, if it did not, may we know the reason for the change? Is it to save money? If so, will the Secretary of State tell us — since he has plenty of minions to find out—the exact annual savings from the proposed change?

The Secretary of State said that the service chiefs will sit on the Defence Council. I understand that the Defence Council hardly ever sits. Will it still be an irrelevance, or will the Defence Council be upgraded within the Ministry?

In view of the importance of the change, will the Secretary of State give a clear assurance to the House that we shall have a chance to debate and discuss the proposals, and to pronounce upon them, before any changes are made? I hope that when he answers that question the Secretary of State will not hide behind the Leader of the House who is sitting next to him.

Mr. Heseltine

I am sure that the right hon. Gentleman realises that no single Minister can give an assurance about debates in the House. That is a matter for my right hon. Friend the Leader of the House. The Opposition will know that the Defence Select Committee is to examine these matters, so there will be the further scrutiny that the House has come to welcome. The Government intend to proceed with implementation of the proposals. As we approach the long recess it would be wrong if the uncertainty were allowed to continue further.

The right hon. Gentleman said that he needed time to study the White Paper and I was grateful for that. He will find that much in the White Paper was foreshadowed in the consultative document. There has been wide public discussion about the issues involved.

I do not apologise for an interest in business management. Anyone responsible for a budget of £17 billion owes it to the taxpayer to try to get value for money out of it.

As for why we need to move to a more central operation in view of the success of the Falklands war, the House will realise that we operated on precisely a central management arrangement in that war. It is to consolidate on our experiences then that my proposals are being produced.

Sir Antony Buck (Colchester, North)

Will my right hon. Friend assure the House that the structure that he has just announced will be appropriate to deal with the rapid expansion of the armed forces which may be necessary in times of crisis and has been in the past? Will he also say a word about the defence arms control unit mentioned in paragraph 22 of his White Paper and what the relationship of that unit will be with the Foreign and Commonwealth Office?

Mr. Heseltine

I am grateful to my hon. and learned Friend. He will be the first to realise that, if ever a crisis arose, the more preplanning that had taken place, the more effectively we could deal with it. It would be quite impossible for such a mobilisation to get under way without the most intense co-operation between the three armed services.

As for my hon. and learned Friend's other important question about the arms control unit, the House will realise that my right hon. and learned Friend the Foreign Secretary leads on matters of arms control. But it is part of the responsibility of the Secretary of State for Defence to have a role in central Government discussions on these matters. It seemed to me that, in briefing myself on these matters, it would be right for me to have advice that was not subordinate to the military advice in my Department so that there was a much more independent source of advice on these critical matters. The lead and responsibility within the Government will remain where it is.

Dr. David Owen (Plymouth, Devonport)

No doubt in the forthcoming defence review the Government will be helped by these changes to deal with the defence budget in 1986–87, which will show an absolute reduction in defence spending. Will the right hon. Gentleman assure the House about the strategic staff available to the individual single service chiefs? Will he say whether he thinks that Admiral Leach, on the day that the Falkland islands were invaded, would, under these proposals, have had sufficient back-up to be able to advise the Prime Minister that it was possible to retake the Falkland islands against the advice coming from the central defence staff, and against the advice of the Royal Air Force and the consensus view of the Ministry of Defence?

Mr. Heseltine

The right hon. Gentleman knows that I was not intimately involved with the details of that occasion, but I am aware that Admiral Lord Lewin was Chief of the Defence Staff at that time.

Dr. Owen

He was in New Zealand.

Mr. Heseltine

He was, nevertheless, Chief of the Defence Staff. That reinforces the point that when crisis action was required the central operation necessary was perfectly well co-ordinated and operated. No one has questioned that since I have been a Minister in the Department.

I realise that the right hon. Gentleman is trying to prove that the defence budget is going down. He fails to understand that it is nearly 20 per cent. higher than when he was Foreign Secretary. If only he understood the difference between Falklands inclusive and Falklands exclusive he would have no difficulty in understanding our figures.

Mr. Julian Amery (Brighton, Pavilion)

Is my right hon. Friend aware that, quite apart from the almost universal criticism that his proposals have met both from former chiefs of staff and, as I understand it, from the present chiefs of staff, there are the gravest political objections to the proposals? Will he recall that the question of parliamentary control over the armed forces and their strategy has been a major issue in the life of the House over three centuries or more? Does he appreciate that if he is to be advised by only one senior officer who is advised in turn by one single staff, he is depriving himself and the House of the different options which should be open to the Minister responsible for the armed forces? Will he bear in mind that the business of preventing war or, if necessary, winning it is very different from running a business cost-effectively?

Mr. Heseltine

Of course. I fully accept my right hon. Friend's last comment. But the capacity to wage war depends on the efficiency with which the budgets that are there to make the deterrent effective are discharged.

My right hon. Friend makes the point which historically has been expressed. It was made by those who were against the creation of a single Ministry of Defence in the 1950s and at that time won. The same point was again expressed in the 1960s. Al that time Lord Stockton prevailed and saw that a single Ministry of Defence came into existence. But the debate has gone on. In my view, in the dispatch of a military operation today, the more central planning, the more strategic appraisal and the more central control brought to bear, the more likely it is that one will be in a position to deal effectively with contingencies as they arise.

I have, to support the views that I have expressed, the fact that the late Lord Mountbatten was the architect of much of the present Ministry of Defence, and he happened to have been one of the last commanders of a great British force in the field.

Mr. Merlyn Rees (Morley and Leeds, South)

The Minister said in his statement that significant policy-making staffs would be left in the individual services. Does that mean that since 12 March the concern of the individual services about the down-grading of the role of the chiefs of staff—it was described in another place as "denigration"—has been met? Has there been a change since 12 March?

Mr. Heseltine

The right hon. Gentleman asks me a very important question, and I shall try to deal with it. In my open government document I anticipated the possibility of a need for staff to help the single service chiefs in their relationship with the new central staff, but I did not quantify that arrangement. When I was discussing these matters with the single service chiefs I asked them in the end to propose what staff they would require to have an effective relationship with the new central staff. Broadly I accepted the proposals of the working party, which included representatives of the single service chiefs. I could not pretend to the House that if the single service chiefs were left to their own devices they would propose the centralisation of the Department along the lines that I have in mind, any more than they would have done at any time in the last 20 or 30 years. Politically, I still believe that this is the right judgment.

Sir Peter Emery (Honiton)

Will my right hon. Friend accept that obviously right hon. and hon. Members on both sides of the House wish to see the greatest efficiency possible of our defence organisation? If streamlining brings greater efficiency, that is what everyone will want.

Will my right hon. Friend answer two questions? Does this mean that we shall see the release of more senior people to the sharp end of the forces rather than their remaining on the planning side? Secondly, on a purely constituency matter, does this mean that the Royal Marines will continue to play the same part in the defence structure and that their senior officers will play the same role as they have in the past?

Mr. Heseltine

I can help my hon. Friend about the Royal Marines. There is no way in which their position is diminished by the proposals. I cannot believe that any Secretary of State would contemplate such a prospect.

The release of more resources from the tail to the teeth is one of the objectives that we seek. We shall see the release of certain numbers of people currently serving in the Ministry of Defence and they will be available for deployment in a more front-line and active position. That is the switch that we are trying to bring about.

Mr. Tom Clarke (Monklands, West)

How often does the Defence Council meet? When did it last meet?

Mr. Heseltine

The hon. Gentleman raises an important question. It must be said that the Defence Council does not meet as frequently as most of the organisations that preside over the Ministry of Defence. The reason is that the inter-relationship of those who work in the Ministry is sufficiently close—we see sufficient of each other in the normal interplay of committees and ministerial briefings—that we do not need the more formal position of the Defence Council. But I would not change the need for the existence of such a council. It is central to the preservation of the powers of the individual chiefs of staff. If they should ever feel that the conduct of the Ministry's business or of the nation's defence was not being properly dispatched, it is the Defence Council to which they would go to ensure that there was a proper dialogue. It is essential that that right of membership should remain although, as the Minister in charge of so large a Department, I would not go for that formal way of arranging the Department's business unless it was necessary.

Sir Geoffrey Johnson Smith (Wealden)

I congratulate my right hon. Friend on his White Paper. So that we do not truncate the debate, and in view of the criticisms from the Opposition, would it not be helpful if my right hon. Friend confirmed that the proposals are not being carried in the teeth of deep-rooted opposition from chiefs of staff? Will he confirm that the other proposals on medical services are being supported by medical personnel?

Mr. Heseltine

The decision to centralise medical services on a tri-service basis has resulted from a study conducted by Sir Henry Yellowlees on whether we could administer the medical services of the three services on that basis. We have accepted his recommendation to proceed in that way.

The Chief of Defence Staff will join me later this afternoon in a press conference dealing with these matters. He will say that the chiefs of staff are determined to make the system work and that they believe that it can work. However, I do not want to give the House the impression that, left to their own devices, the chiefs of staff would follow this course. However, nor would they have done so at any time during the past 30 years.

Mr. David Alton (Liverpool, Mossley Hill)

Will the right hon. Gentleman tell the House rather more about the remit of the joint civilian and military arms control unit? To whom will it be accountable? If it is a committee, will it comprise only of those who slavishly adhere to the Government's line on arms control?

Will the right hon. Gentleman say something about the arms procurement policy announced in his statement? Will the Government take this opportunity for a more integrated Europe-wide procurement policy?

Will the right hon. Gentleman comment on the value for money that we might expect from arms purchasing policies, given the effects of the exchange rate on, for example, Trident?

Mr. Heseltine

We are securing substantial reductions in prices as a result of the more competitive policies that we are introducing. That will show in the additional resources available for the Ministry. We deal with Trident on a regular annual basis, and I shall stick with the precedent on how I report to the House. The arms control unit will be staffed by military and civil servants within the Ministry. They are not committed to any line of policy; they are there to advise Ministers across the breadth of policy options. It is for Ministers to decide what policies they seek to pursue.

Several Hon. Members

rose——

Mr. Speaker

Order. There will be two more statements and a ten-minute Bill before we move on to the main business of the day, which is of great interest to hon. Members. I shall seek to call hon. Members who have been rising, but I ask them to be brief.

Mr. Jerry Wiggin (Weston-super-Mare)

Does my right hon. Friend accept that, from the disaster of Gallipoli to the organisational triumph of Normandy and the recent successes in the Falklands, it has become increasingly apparent that no military operation can be carried out by one arm exclusive of the others?

Does he further accept that, from the moment of resolution in the Falklands, the three services co-operated magnificently? One of the more inspiring aspects of the performance was that all differences were absolved from the moment of resolution. I hope that the myth of the right hon. Member for Plymouth, Devonport(Dr. Owen) does not gain credence.

Will my right hon. Friend take note of three points——

Mr. Speaker

Order. It is a little unfair of the hon. Gentleman to ask three questions, especially in view of what I have said.

Mr. Wiggin

Will my right hon. Friend give some thought to how the appointment of Chief of Defence Staff should be made in the new organisation? Will he make it clear that it should not necessarily be Buggins' turn, nor that the panel should necessarily represent those who recently have been chiefs of staff in any of the three services?

Mr. Heseltine

I am grateful to my hon. Friend, who has great knowledge and experience of these matters. The Government intend to remain with the policy announced by Sir John Nott when he was doing my job. He made it clear that the appointment would be made from the choice of people available and that no seniority considerations would overplay the judgment on who should get the job.

Mr. Cyril D. Townsend (Bexleyheath)

Is my right hon. Friend aware that the general feeling in defence circles is that headquarters is very good at advising others on how to make cuts, but not so good at doing it itself? That has been especially true of the MOD in recent years. Does my right hon. Friend appreciate that, by and large, the forces will welcome this extension of Mountbatten's original proposals?

There will be great interest in defence circles worldwide in this experiment because my right hon. Friend is sensibly tackling a problem that faces all defence forces.

Mr. Heseltine

I am most grateful to my hon. Friend. I can confirm that the further away I get from the MOD the more popular my proposals appear to become.

Mr. Andrew Faulds (Warley, East)

Is not the right hon. Gentleman's embarkation on this adventure less to do with national security than with the extravagance of the unrealistic Trident programme and his own political survival?

Mr. Heseltine

No, Sir.

Mr. Churchill (Davyhulme)

Will my right hon. Friend quantify in cash and manpower terms any savings that may be derived from his proposals?

Mr. Heseltine

I have some figures, but they are at an early stage because we have yet to work through the lower levels of management and staffing that will be required.

At the very senior levels, the proportions are substantial but the absolute numbers are relatively small. For example, in the medical services and the other centralised services that I have announced today, at the three-star level we shall save 35 per cent. of the posts. However, that is a reduction of only from 17 to 11. I would not want to make a great deal of the figures because they relate to a small number of people.

Mr. Toby Jessel (Twickenham)

On the proposal to set up a joint services school of music at Deal, is my right hon. Friend aware of the high standard of excellence of British Army bands—which are the envy of the world—which are most closely bound up with the famous name of the Royal Military school of music at Kneller hall, Twickenham? Is my right hon. Friend aware that some of us are concerned that standards might drop? My constituents will expect me not to take what he has said lying down, but to look most critically at his proposals.

Mr. Heseltine

I say to my hon. Friend and his constituents that no one has been more zealous in arguing the case of Kneller hall than has my hon. Friend. The House will realise that nothing that I am saying today has any relevance to the number of bands that serve the British armed services. After considerable examination, we have reached the conclusion that for a lower price we can centralise the military tuition processes of the three services. Therefore, we have taken the decision to move the three services' music school to Deal.

Sir Kenneth Lewis (Stamford and Spalding)

What is my right hon. Friend's answer to the argument that, if centralisation is taken too far in the services, it could stifle creative argument on weapon deployment, strategic matters and so on? Is he satisfied that the chiefs of staff will still have a right to make their views known before decisions are finally made?

Mr. Heseltine

Not only do chiefs of staff have that right, but they have the staff and, as members of the appropriate committees, the duty to ensure that their voices are heard.

The central staff is in itself constructed of building blocks of single staff members. Therefore, it is impossible for there not to be a full debate and dialogue about all these matters before decisions are taken.

Mr. John Stokes (Halesowen and Stourbridge)

I welcome the new proposals. Will my right hon. Friend give an assurance that all ranks, down to the lowest ranks in each service, will still feel that there is someone at the top looking after their interests?

Mr. Heseltine

I give that assurance to my hon. Friend without hesitation. I hope that the ranks will realise that we are trying, with all the resolve possible, to ensure that the contingencies with which they might have to deal are properly anticipated and the necessary resources provided, and that we are also doing all we can to keep down the costs of central administration so that we can better provide them with resources in the front line.

Mr. Tim Yeo (Suffolk, South)

Will my right hon. Friend's entirely justified efforts to bring better management into defence matters bring about a reduction in the number of people who can in theory report directly to him as Secretary of State? I believe that the number was well over 150 last year.

Mr. Heseltine

I hasten to assure my hon. Friend that one of the early things I did on going to the Ministry was to ensure that no such possibility existed. Only a relatively small number of people report directly to the Secretary of State. I and my Cabinet colleagues believe that that is one of the first things to ensure.

Mr. Edward Leigh (Gainsborough and Horncastle)

Is my right hon. Friend aware that, in contrast to those who have already enjoyed the glittering prizes of a Whitehall service career, there is widespread enthusiasm — especially among younger officers—for any reorganisation that results in more efficient resource management so that we can get the additional eight frigates on the water and the additional 4,000 men in Germany, despite the ending of the 3 per cent. commitment?

Mr. Heseltine

I am most grateful to my hon. Friend. That certainly is my experience from travelling round visiting members of the armed services. By and large, there is a considerable welcome and understanding for what I am trying to do.

Mr. Kevin McNamara (Kingston upon Hull, North)

The Secretary of State is not normally so coy about any savings that he might like to make as a result of his reform. Is it not true that these reforms will not release any major resources to the Ministry of Defence's budget for use in other spheres? If that is not so, will he not give the House more precise details than merely the number of brass hats who may or may not be lost?

Secondly, what will happen to the specialised schools of naval and air medicine which have been involved in the separate services? What will happen to them in the new centralisation of medical services?

How will he get conflicting opinions and advice upon which to base his judgment? Is this not the main concern of people when they are fearful of the service chiefs losing their own policy-making units? How will he get conflicting ideas, and how will he be able to test the ideas that are coming from his central defence staff?

Finally, on the arms control unit, may we hope that the Ministry of Defence's unit will have a far higher profile than that of the unit which exists in the Foreign and Commonwealth Office? May we hope that we shall have a more vigorous conduct of armament discussions and prospects for disarmament by a well-informed vigorous Ministry of Defence seeking to ensure that, in the international fora, not only is Britain properly represented, but there is real defence discussion on these matters?

Mr. Heseltine

The hon. Gentleman has raised a number of important questions. It would be a matter for the new centralised medical staff to make judgments about the medical schools and to make recommendations.

As to the question of conflicting ideas, when the Opposition have had a chance to consider carefully the White Paper, they will find that built into the structure are a number of areas in which the conflict will ensure that competing and conflicting ideas are put forward. That is not just the conflict between the Office of Management and Budget and the defence staff. The operation analysis unit under the scientific adviser will play a similar role. We have similarly separated off the arms control unit to do that. I think that within the Ministry there will be an enhancement in the debate. The idea that the purpose of the proposals is to give the Ministry a higher profile within the Government is certainly not the case. The Government intend to pursue their arms control policies, and my right hon. and learned Friend the Foreign Secretary will remain firmly in charge of that.

When I am asked for figures, I do not want to produce figures to give an impression that we have concluded the work that is under way. I think that the House is aware only that the Ministry of Defence is embarked on a major reduction in the number of people who work for it. For example, it has reduced by 47,700, which is 20 per cent., since 1979, and we are targeted to go from the present figure down to 170,000 by 1988. Thus it is important to have the ability to appraise the priorities to carry through such a major diminution in the numbers of people employed, particularly, of course, as that will yield substantial economies that can be transferred to the front line.