first day's debate

HC Deb 12 June 1985 vol 80 cc896-984

3.42 pm

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

I beg to move,

That this House approves the Statement on the Defence Estimates 1985, contained in Cmnd. 9430.

Mr. Speaker

I announce to the House that I have selected the amendment in the name of the Leader of the Opposition.

In view of the number of right hon. and hon. Members who wish to take part in this important debate, I intend to impose the 10-minute limit on speeches between 7 o'clock and 9 o'clock. However, I hope that those who are called before 7 o'clock will also bear the limit in mind.

Mr. Heseltine

The White Paper provides both the background to Government policy and the essential facts which underlie it.

The House will be grateful to the defence Select Committee for its first and third reports, which have been published this week. The House will understand if I do not address today the issues raised in the first report on merchant shipping. It would be premature to do so, and the Committee itself has made it clear that it accepts this view.

On the third report, I welcome the Committee's comments on the presentation of the White Paper and I will ensure that they are passed on to those responsible within my Department.

I shall attempt today to address some of the issues raised by the Committee. In particular, I shall address two of its main themes: the absence of any major change in policy in the White Paper and whether in the long term we can sustain our present commitments within the sums of money likely to be available.

This year has seen a major reorganisation of the Ministry, which came into effect on 2 January. It is, I think, well established that we have concentrated on the output we get from the rising defence budget and on the enhanced value to be derived from a policy of increased competition. My right hon. Friend the Minister of State for Defence Procurement will be commenting in detail tomorrow on this aspect of our work.

In this year's White Paper, while continuing the emphasis on value for money questions, we have also sought to look in depth at defence policy. Chapter 2 of the White Paper addresses the United Kingdom's role within NATO, the Alliance's defence posture, including the application of new and emerging technology, and Britain's interest and responsibilities outside the NATO area. In chapter 3, we look at the European contribution to the Alliance and how the Europeans might strengthen their cooperation with one another. The White Paper includes an essay on NATO's strategy of flexible response and alternatives to it.

That is a formidable weight of material. It points to the considerable success of these policies. I would argue that that success is the best case for stability. If it is not necessary to change, why should we contemplate it? The Defence Committee acknowledges the consistency of policy but seems to be searching for a longer-term political and strategic prospect. It seems to be arguing for a review of policy priorities. I would not wish to appear complacent, but we should not indulge in a destabilising process of review unless the case for such a review is proved. To imply that change is needed, without suggesting the direction that it should take, carries with it the risk that confidence will be jeopardised because those in positions of responsibility lack belief in their own policies.

The starting point, therefore, for addressing the case for a new approach to strategy must be to address the adequacy or otherwise of NATO's present strategy of forward defence and flexible response. Has it served us well? Does it remain relevant to today's strategic circumstances? It is likely to be invalidated by developments we can already see, not just in technologies, but much more important, in political relationships?

It is the direct consequence of the strength and cohesion of the North Atlantic Alliance that Europe enjoys continuing peace and prosperity today and in such marked contrast to the circumstances of 40 years ago, which we are remembering this year. In those 40 years there have been enormous changes in the economic circumstances of Europe, but the underlying strategic realities, which developed in the immediate aftermath of the war, remain the same. In western Europe we must face the weight of Soviet military power, and the reality of a country which has been prepared to use that power in support of its political influence over the territory of others. We must deal with a country which combines the long-standing Russian obsession with secure borders with a much more modem mission to bring the world to communism, which is over-armed beyond the point of any rational assessment of its defence needs, and which has shown in the 1950s and 1960s in eastern Europe and in the 1970s and 1980s in Afghanistan a willingness to use those arms.

The clear lesson of the last 40 years is that the Soviet Union is prepared to extend its influence worldwide when low risk opportunities present themselves. It is not prepared to do so in every case. The Soviet leadership is cautious and careful. The risks will be carefully weighed. The essence of NATO strategy has been to ensure that there were no risk-free opportunities of aggression against a member of the Norm Atlantic Alliance. Its success then and now rests upon the Russians being in no doubt about both our ability and our will to defend ourselves and our allies.

I do not wish to exaggerate the Soviet military threat, but neither should we see it as less than it is. In this year's White Paper we have expanded the analysis of the balance and included the necessary caveats about the comparisons we make. The underlying military reality remains as daunting as ever: in conventional forces, in chemical weapons—about which the defence committee expresses its concern — and in the Soviet Union's huge and growing nuclear arsenal. There are chilling comparisons there for all to see. The White Paper sets out the facts very carefully. There has been no shift in Soviet policy except in its intensification.

The task then remains as it has done over the past three and a half decades: to maintain a credible deterrent within a coherent alliance. A wholly European alliance today could not provide an effective deterrent. What, then, are the prospects for sustaining the present uniquely successful alliance between the north American and the European peoples? There are, of course, those who suggest that the United States may turn its back on Europe as the balance of population and of interest in America increasingly turns to the Pacific. There is nothing new in this argument— it is not even just a post-war argument—but it ignores the huge American political and economic interest in Europe, as well as the closest historical and cultural ties.

Provided that we in Europe are prepared to sustain our commitment and contribution, we believe that a transatlantic partnership is the logical outcome of enlightened self-interest. The decisions taken by NATO defence Ministers in December about infrastructure and stock levels, and in May about the follow-up on conventional defence improvements are important, demonstrating the support for the Alliance not only of Britain but of the rest of the European allies. Our commitment to the Alliance is not simply a matter of money, or of conventional effort. Every member of the Alliance enjoys the benefits of the peace provided by the mix of forces underpinning NATO's present strategy. The nuclear element of that mix has to be sustained and modernised, no less than the conventional element. Only the most catastrophic consequences will follow if individual countries pick and choose between those elements of our strategy that they are prepared to sustain, those risks that they are prepared to share and those that they would prefer to leave to others. Of course, no one can prevent them from pursuing such a policy, because each of us is a sovereign nation, but the process of opting out and leaving others to take up the strain, and to carry a higher share of the responsibility, is a policy calculated to whet the appetite of a Soviet Union watching for the weak link and the risk-free opportunity.

Dr. Keith Hampson (Leeds, North-West)

Does my right hon. Friend agree that the Alliance and all its partners have been determined to modernise and to continue to improve their nuclear capability and that it is that which has brought the Soviet Union, at long last, to meaningful negotiations to try to achieve arms control?

Mr. Heseltine

To all except the most narrow-minded, that is self-evident and I shall return to that point later.

Mr. Tam Dalyell (Linlithgow)

Is Ascension Island being used as a target area for cruise and MX missiles?

Mr. Heseltine

When I referred to all except the most marrow-minded, I had not realised how quickly that would be demonstrated.

Mr. Dalyell

Will the Secretary of State answer the question?

Mr. Heseltine

That is—

Mr. Dalyell

rose—

Mr. Heseltine

I am not giving way to the hon. Gentleman. That is why the policies put forward by—

Mr. Dalyell

rose—

Mr. Speaker

Order. I think that the Secretary of State is not giving way.

Mr. Heseltine

That is why the policies put forward by Labour Members represent just such a recipe for undermining the cohesion of the North Atlantic Alliance. Labour's policy of removing all American nuclear bases and weapons and of abandoning Britain's independent deterrent, and its search for a continentwide European nuclear-free zone would leave this country and Europe defenceless against nuclear blackmail; defenceless, that is, unless we are to look to the United States to protect us from the huge Soviet nuclear threat while we sit smugly in some cosy haven of moral superiority. The truth is that the abandonment by Britain of the basis of our defence policies since the war would be such a dramatic shock to the Alliance as to call the whole enterprise into question — which is, of course, exactly what a significant number of Opposition Members would like to achieve.

Mr. Eric S. Heffer (Liverpool, Walton)

I am sure that the right hon. Gentleman knows full well that paragraph 105 of the Defence Estimates says of the Soviet Union:

The roots of Soviet policy are complex. The Soviet Union … is a country obsessed with its own security". If the Government accept that the Soviet Union is obsessed, as I believe it is, with its own security, is it not clear that its policies — I do not accept its internal system—towards the border countries and Afghanistan have resulted from its concern for its security? Will the right hon. Gentleman address himself not to some narrow issue but to the wider question of why the Soviet Union has arrived at its policy?

Mr. Heseltine

The House should listen carefully to the hon. Gentleman, because he is right. Every advance that the Soviet Union makes has been based upon an assertion of its own insecurity. However, the consequence for those into whose country the Soviets advance has been suppression by the Red Army. The logic of the hon. Gentleman's argument is that we should always withdraw, step by step, to leave a vacuum so that the Soviet Union can fill it. That is an intolerable assessment for any hon. Member.

Mr. John Powley (Norwich, South)

Does my right hon. Friend recall the strategy employed in the 1930s by the Hitler regime, and the domino effect of picking off one weak nation after another, which inevitably led to the 1939-45 conflict? Is that not similar in many ways to the strategy being employed by the Soviet Union, which is trying to pick off weak nations to advance its own ideology, both political and military, in the 1970s, the 1980s and, possibly, the 1990s?

Mr. Heseltine

My hon. Friend is right, and it is precisely because the Labour Government of the 1940s saw clearly the dangers of repeating what happened in the 1930s that they helped to invite the Americans to join the NATO Alliance. They were right to do so.

I have no apologies for offering no new policies, and for not seeking to change the strategy that had served us well. I advocate continuity because the policies have brought success. This is not an argument for complacency. Our security policy rests not only upon the military forces necessary for a deterrent, which must be kept up to date, but on achieving agreements with the Soviet Union that would enable both sides to enjoy security with lower levels of armaments. These are not two separate aims; they are inextricably linked. The Soviet Union will not negotiate seriously if it believes that its interests can be achieved by other means. We saw between 1979 and 1983 a sustained propaganda campaign over the potential deployment of intermediate range nuclear forces. Before that, the Soviet Union had already deployed its SS20 intermediate nuclear threat, but when it did that, there was little protest on the streets of this country.

When we gave notice that we had to maintain the NATO deterrent, we were told by the Labour party, and by the protest groups so closely associated with it, that the Government's determination, and that of its Allies, to introduce Pershing II and cruise missiles, had destroyed the prospect of arms control. We were told that, if we proceeded with the modernisation of our intermediate range weapon systems, the Russians would walk out, and that the peace of Europe would be threatened.

However, the truth is that today the Soviet Union is back at the conference table, not because the West indulged in any one-sided gestures but because the Soviets realised that we had the will to go through with the necessary modernisation of our forces in the absence of arms control agreement. That is particularly because the one-sided disarmers had lost the democratic debate in the West. Once again, our policies worked, and the forecasts of the Left were revealed for the simple media fodder they really were.

The White Paper sets out the British Government's efforts in support of arms control. We must prevent the erosion of existing arms control agreements on strategic nuclear missiles and on anti-ballistic missile systems. We shall in that context strive for new agreements in Geneva.

If nations were to adopt the view that arms treaties and agreements are short-term pauses between technological breakthroughs of different weapon generations, then the arms control process would simply come to a halt. America has proved, in the SALT II context, that she has a wider vision. I believe that the whole House will wish to commend the announcement by President Reagan that the United States will continue to observe the SALT II constraints. It is a vivid demonstration of the seriousness with which the United States approaches arms control. We look to the Soviet Union to show an equally scrupulous attitude to its obligations and to negotiate seriously at Geneva towards real reductions in nuclear arsenals.

Our approach to the strategic defence initiative was set out in the four points agreed between the Prime Minister and the President of the United States at Camp David, and which were reaffirmed in February this year. The British Government support the need for research under that initiative, which is only prudent in the light of longstanding Soviet research in similar fields. We are at present discussing with the United States Administration British participation in the research. Such participation must bring clear benefits for our own defence effort and certainly must not represent a one-way traffic in expertise and technology. I agree with the Defence Committee that those issues need urgent consideration, which they are receiving — and that we should work closely with our European allies on them. We intend shortly to define the way forward.

Mr. Dick Douglas (Dunfermline, West)

One of the arguments in favour of our participation is a transfer of technology. Why should the United States expect to share the fruits of research and development in this area when it was so reluctant, in other areas such as the gas pipeline, to share technology with West European nations?

Mr. Heseltine

As I think the gist of the Select Committee report — I fully accept it — is that no European country, and certainly not the United Kingdom, will negotiate with the United States on the basis of one-way traffic in technoloy in this context, the answer to the hon. Member's question is clear. That thought will be at the forefront of the consideration that we as Ministers bring to the issue. It is already very much on the table in the dialogue between the United Kingdom and the United States. I have no doubt whatever that exactly the same thoughts will occur to our European allies.

Returning to the strategic defence initiative, the more fundamental issue of whether such systems should be deployed, although they are now being widely debated, is a decison for the future. It raises the profoundest strategic as well as technical issues. The United States Administration have set out the criteria which would need to be met in judging the feasibility of new technologies which may emerge from SDI research. They recognise that the defensive systems would have to be survivable in order not themselves to become tempting targets for attack They recognise that they must be cost effective at the margin, so that they are not simply countered by the other side adding offensive capability necessary to overcome the defence. Those are in themselves demanding criteria.

Above all, as the Select Committee recognises, the question which has to be addressed is the circumstances in which the deployment of SDI defences would enhance deterrence. What measures would be needed in other areas, particularly to rectify the conventional imbalance, in order to achieve this, and would they be in fact and in practice negotiable? The British Government's interest in those issues relates to the wider strategic questions which are at the heart of the alliance strategy.

As a nuclear power we have, of course, a particular interest and expertise, but that is not the driving force of our concern. I particularly welcome the Defence Committee's recognition that a new era of strategic defences would be unlikely to arrive while Trident is in service. The case for Trident is set out in the White Paper and I do not intend to expand on it today. I repeat that which perhaps needs no repetition — that the Government's commitment could not be more certain. We intend to take the steps necessary to maintain Britain's independent deterrent.

Mr. Andrew F. Bennett (Denton and Reddish)

I have been looking through the White Paper and trying to find the costs which are allowed for in the Trident programme for the communications system between the sea-based submarines, which could be up to 6,000 miles away, and the politicians, to ensure that there is effective control. I realise that that is an extremely expensive system. It does not appear to be in the accounts in the White Paper.

Mr. Heseltine

I assure the hon. Gentleman that neither the Labour Government that presumably he would have supported in an earlier generation nor this Government would be so inept as to have inadequate communication systems on such a critical aspect of our defence capability. That Labour Members should laugh at such a statement merely reflects their naivety, because the Opposition have consistently supported the concept that Britain should have a Polaris independent nuclear deterrent.

Mr. Bennett

rose—

Mr. Heseltine

If there is some specific breakdown of costs about which I can help the hon. Gentleman, I shall try to do so, but I assure him that the communication systems between our submarines and the Government will be impeccable.

I have concentrated so far on the problems of East-West relations and on our contribution to NATO. The Alliance is the foundation of our security, and about 95 per cent. of our defence budget is devoted, directly or indirectly, to alliance tasks. But neither we nor our allies can shut our eyes to the world beyond the NATO area. We still have some residual direct security responsibilities for the remaining dependent territories. We therefore retain garrisons in such diverse locations as Hong Kong, Gibraltar and the Falkland Islands. Our determination to continue to fulfil those responsibilities could not be more clearly illustrated than by the new Mount Pleasant airport in the Falklands, recently opened by His Royal Highness Prince Andrew.

The construction of the airport—a truly astonishing civil engineering feat—will enable us to reinforce the islands rapidly in the event of a crisis, to achieve savings in the cost of the garrison, and play an important role in the economic and social development of the Falklands. But our interests outside NATO are not restricted to those direct responsibilities. We must be prepared to bear our share of responsibility for protecting trade routes and for promoting peace and stability in those areas where local conflicts could spread and risk wider East-West confrontation.

Mr. Gerald Malone (Aberdeen, South)

As my right hon. Friend is talking in the context of our naval forces, he may well be aware of recent press speculation about the future of two types of vessel, known as OPV2 and OPV3. Those vessels were perhaps of some interest to a shipyard in my constituency, Hall Russell, which was hoping to bid for them. As there is considerable uncertainty about them, can my right hon. Friend say whether there is provision for either vessel in his programme, and specifically whether it is the case that, if there is no such provision, they have been deleted at the instance of the Royal Navy or for some other reason?

Mr. Heseltine

No, that offshore patrol vessel is a subject that the Royal Navy is exploring. It has been having conversations with industry. It may or may not wish to make a bid for the cash to pay for it. At the moment, no such cash provision has been made available. In any case, the appraisal of such a project would have to go through the central evaluation processes of the Ministry of Defence. That has not happened, and there is no way in which I have approved that the programme shall proceed. But it is perfectly healthy and reasonable that individual parts of the Ministry of Defence should have dialogue with industry about what possibilities may exist.

Several/ Hon. Members

rose—

Mr. Heseltine

I think it is more a matter for my right hon. Friend the Minister of State for Defence Procurement. It is not a project in our main programme, and I do not think we want to be diverted into the minutiae of possibilities which are a considerable way from my decision-making process. If it is convenient to the House, we shall follow up that matter in the debate tomorrow.

We must be prepared to bear our share of responsibility for protecting trade routes and promoting peace and stability in those areas where local conflicts could spread and risk wider East-West confrontation.

The White Paper describes the various ways in which we contribute to these objectives — for example, our world wide network of defence facilities, our military assistance programmes and our contributions to peace-keeping forces. Ultimately, we maintain a capability to intervene militarily, either to protect our own interests or in response to a request for help from our friends. Drawing on the lessons of the Falklands conflict, we have made great strides in enhancing the mobility and flexibility of our forces to deploy rapidly at long range in a crisis. The use of such forces would be regarded very much as a last resort, but if they are to be effective in any crisis, they must be not only properly equipped but well trained.

We plan, therefore, to conduct a major strategic mobility exercise next year to demonstrate the ability of our forces to respond rapidly to a crisis outside the NATO area and to test the improvements we have made in our command and control arrangements.

Mr. Robert C. Brown (Newcastle upon Tyne, North)

The right hon. Gentleman has mentioned the savings that will be made by building the Mount Pleasant airport and the costs involved in maintaining the Falkland Islands. How many years will it take to recoup the enormous cost of building the airport?

Mr. Heseltine

I do not think that I can give that answer, because this is a military commitment which is essential to the original commitment to free the islands. Once the Labour party joined the Government in supporting the decision to send the task force, there was a defence commitment. Anyone with responsibility cannot now renege on that commitment. It is therefore part of our defence determination that we should have this defence facility. It will enable us to do the job much more rapidly and at a lower cost. The hon. Gentleman tries to have it both ways in suggesting that there is a practical alternative. The criticism, if there is one, is that Governments of both parties did not provide an effective airport in the Falklands many years ago.

Mr. Jerry Wiggin (Weston-super-Mare)

While on the subject of mobility and the lessons of the Falklands conflict, does my right hon. Friend accept that one of the lessons learned from the Falklands war was the great importance of the helicopter on the battlefield? Is it not amazing that the appropriate military departments within the Ministry are taking another nine months to assess air staff target 404, which can readily be filled by the W30 helicopters that are manufactured in and around my constituency?

Mr. Heseltine

My hon. Friend's concern for Britain's defence interests is well known. Perhaps he will forgive me if, in the present circumstances, I do not become too deeply drawn into those matters. [Interruption.] The hon. Gentleman understands the sensitivity of this issue. The Army is reviewing the requirements. It must be my responsibility as Secretary of State for Defence to be sure that the Army is satisfied before I take any decisions. I am not trying to impose a political judgment upon the military requirements in these circumstances. I turn now to the scale of the defence programme. In 1985–86, the defence budget will be about £18 billion— an increase of more than £1 billion in cash terms over 1984–85. By the end of this financial year, we shall have completed an unprecedented period of seven years of consecutive real growth in the defence budget. British defence expenditure is the highest in total and per capita of the major European members of the Alliance. The proportion of the budget spent on equipment is the highest of any NATO country. I cannot help wondering sometimes, as I read the critics of our defence policy, just how uneasy they might feel if they lived in one of our neighbouring Alliance countries, facing much the same threat but having so much smaller a defence budget with which to counter it.

But what are we getting for the money we spend on defence? Chapter 4 of the White Paper sets out in detail the equipment that is coming into service or being developed for the armed forces. Let me pick out some of the highlights.

For the Army, the re-equipping of armoured regiments with the Challenger tank continues. I am able to announce today that an order for further Challenger tanks is being placed with Royal Ordnance plc, to equip a sixth Challenger regiment. The infantry's mobility and protection will be improved by the introduction of the MCV80 and Saxon armoured personnel carriers, and it is already being issued with the new SA80 small arm.

The artillery supporting these troops will receive the multiple launch rocket system. In the same time frame, we will be replacing the ageing 105 mm Abbot with the collaborative 155 mm SP70 self-propelled gun. The artillery's target acquisition will be improved with the Phoenix remotely piloted aerial reconnaissance vehicle, and the battlefield artillery target engagement system will enable us to employ our artillery resources to the best possible effect. In air defence, Rapier is being improved and work is going well on the new short-range high-velocity missile to complement Javelin.

Finally, we will get the best possible value from all these weapons through the introduction from this year of Ptarmigan, a secure field trunk communications system unmatched anywhere in the world, and Wavell, our first major venture in computer-assisted command and control.

The majority of the RAF's front line assets are being replaced with new aircraft and new weapons. Nine Tornado GR1 squadrons have now formed and will eventually build up to 11 squadrons. The Tornado GRl's armoury will include the JP233 cratering and area denial weapon, deliveries of which will begin later this year, and the ALARM defence suppression weapon, planned to enter service in two years. Deliveries of Tornado F2, the air defence variant, have begun and the operational conversion unit was formed on 1 May this year. The number of air defence squadrons in the United Kingdom will be increased from seven to nine. In the ground support role, the Harrier GR5 will replace the Harrier GR3 and will be armed with an improved version of the BL755 anti-armour weapon, which will enter service with the GR3 this year.

Mr. John Wilkinson(Ruislip-Northwood)

My right hon. Friend did not mention a replacement for the Jaguar. The House will be very much aware of the ministerial meeting to be held on 18 June in this city on the European fighter aircraft. Will my hon. Friend assure the House that, in those important ministerial discussions, he will ensure that the RAF's key operational requirement and the industrial considerations which are so crucial to this country are met?

Mr. Heseltine

I am grateful to my hon. Friend. Perhaps he will allow me to come to that point a little later.

Since entering office in 1979, we have ordered 45 ships for the Royal Navy. In the last year and a half, we have ordered or set in hand procurement action for five completely new classes. The first class of the type 23 frigate and the type 2400 conventional submarine are on order. We have invited or received tenders for the single-role minehunter, the auxiliary oiler replenishment vessel and the Trident ballistic missile submarine.

The highlight of the next few years will be the entry into service of the type 23 frigate with Harpoon, vertically launched Sea Wolf, Sonar 2050 and the EH 101 helicopter — all advanced equipment of the highest quality and capability.

I note the concern expressed by the Defence Committee on the ordering rate of destroyers and frigates. Our commitment remains to a force level of about 50 in the longer term. We intend to sustain an ordering rate of broadly three new frigates a year from the first follow-on type 23s. Since 1979 we have spent over £2 billion more in real terms on the conventional Navy — excluding Falklands replacements — than if spending had been maintained at the 1978–79 level.

Important though our equipment plans are, the capability of our forces rests equally upon the quality and motivation of those in the armed forces and of the civilians who work alongside them. I will certainly ensure, as the Select Committee has requested, that more is said about this area in next year's White Paper.

It may be helpful if I say a word about recruitment and retention in the armed forces.

Sir John Biggs-Davison (Epping Forest)

What decision has my right hon. Friend reached about the replacement of the existing specialised ships for 3 Commando Brigade, Royal Marines? If we are to reinforce the northern flank in war, it is important to be able to get there.

Mr. Heseltine

I shall be coming to that subject later.

Several Hon. Members

rose—

Mr. Heseltine

I hope that hon. Members will agree that I have given way sufficiently. I have much more to say, and I wish to make progress.

I come now to recruitment and retention in the armed forces. Volume 2 of the White Paper shows that, between April 1979 and January 1985, the strengths of trained United Kingdom regular forces increased from about 284,000 to about 297,000. The figures do not support the more extreme reports of increasing overstretch that have appeared in the press. Recruitment is generally good, except in some technical areas where there is fierce competition from the civilian sector.

Outflow from the armed forces is certainly increasing as the economy picks up. [Interruption.]If opposition Members do not understand that in large parts of British industry there is now a significant scarcity of skilled and trained people, they have no idea of the rate of change in the industrialisation of the western world.

Although there has been an increase in the outflow as the pressure from industry increases, the figures must be seen in perspective. The outflow in the last financial year, at about 34,500, is up on the previous year, but it is also about 15,000, or 30 per cent., lower than the figure in 1978-79, before we came to office.

The Government are committed to maintaining the remuneration of the armed forces at a level sufficient to meet the requirements for trained manpower arising from our defence policy. The announcement by my right hon. Friend the Prime Minister last week of the Government's response to the 1985 armed forces pay review body report showed in the clearest and most tangible way the considerable commitment that we have made and have maintained.

We attach equal importance to the strength of our volunteer reserve forces, The Territorial Army currently stands at 73,500, compared with 59,000 six years ago, and the planned expansion to 86,000 by the end of the decade continues to progress. We are pressing ahead with the expansion of the home service force, initially to a strength of about 5,000.

Recruitment to 38 new home service force companies formed earlier this year is going well. We are proceeding with plans to increase the strengths of the Royal Naval Reserve, the Royal Marines Reserve and the Royal Naval Auxiliary Force. This expansion of our volunteer reserves represents a particularly cost-effective way of augmenting the front line capability of our regular forces.

I come now to the defence programme in the longer term, to which the Defence Committee devoted much of its report. I say straight away that there is much in the report with which I agree. It provides a useful historical perspective on the Government's commitment to the aim of increases, in the region of 3 per cent. a year, in defence expenditure in real terms.

Given the background which I have described, of the substantial increases in defence expenditure since 1978-79 and of our position relative to our allies, the Government have made it clear for a number of years that after 1985-86, we should seek a stable level of defence expenditure. This is a British decision in a British context. We continue to subscribe to the resource guidance of the Alliance as a whole, which includes the 3 per cent. aim as a general guide. Many members of the Alliance have a long way to go before the effort begins to approach that of the United Kingdom.

That said, I agree with the view expressed by the Defence Committee that more emphasis should be placed in the future on outputs rather than inputs as a public and political measurement of defence effort. Personally, I believe that the conduct of many other areas of public policy would benefit from such a change. As the Committee points out, a financial increase is not by itself a measure of increased efficiency, and greater efficiency may enhance military capability at no additional cost. It is to this prize of increased efficiency that our efforts in the years to come must be increasingly directed. ▪

In addressing the implications for the defence programme of the ending of the 3 per cent. aim, it is also important to recognise that this change has been assumed in our plans for a number of years. The Committee recognises that 3 per cent. growth has never been the basis for expenditure plans after 1985-86. The programme set out in the White Paper "The Way Forward" in 1981— which included provision for Trident—assumed such a growth rate only until that year.

I cannot say precisely how the defence budget will develop in volume terms in the next few years. This depends on a range of factors, some positive, some negative. I cannot engage in a detailed line-by-line, figure-by-figure analysis of the gloomy picture painted by the Defence Committee.

On the Defence Committee's assumptions, it foresees a potential squeeze on the defence budget in real terms, postulating a worst case in which the budget would be £970 million lower in real terms in 1987-88 than in 1985-86. Later in its report, the Committee points to possible offsetting efficiency savings amounting, again on its assumptions, to some £700 million. Although the pluses almost equal the minuses, the conclusion is drawn that they will not be enough to redress the balance; but on the Committee's own arithmetic, the figures are marginal in terms of a total defence budget of some £18 billion to £19 billion a year.

The Committee justifies its concern by reference to the policy to which I am wholly committed, of maintaining flexibility in the defence programme. It must be said that it is seen in a sinister light, as preparing the way for a defence review by stealth.

The truth is less dramatic. The truth which guided my Department's response to the committee's requests for information on our future programme was not new. The Ministry of Defence pointed out to the Committee in 1981, for example, that it was not possible to provide details about the equipment provision in our long-term costing. The Ministry said then that over a 10-year period, the costing becomes increasingly speculative the further forward one tries to look, and that in many cases the assumptions used can be no more than conjecture by officials about how Ministers will settle issues which have still to be clarified and have not yet been put to Ministers.

The status of these planning documents has not changed in the intervening period. My ministerial colleagues and I have sought in the last year or so to institute management arrangements for the programme which fully reflect the increasingly speculative nature of the costing and properly differentiate between the extent of ministerial commitment to individual projects and to the stages within them.

We have also taken account of the politics of defence budgeting, which is like the politics of all other kinds of public expenditure planning. It will, I suspect, come as no surprise to the House to hear that my Department's forward programme is changing constantly for a variety of reasons — changes in military specification, technical difficulties, industrial slippage and so on. These adjustments attract little attention and only the major ones ever come across the desks of Ministers.

All these changes are described as adjustments, but there is one category of adjustment which is different. That is where a Minister changes a programme assumption to take account of whether there is actually the cash available to meet everyone's aspirations. That is called not an "adjustment" but a "cut". Such language is the time-honoured practice of every interest seeking to extend or maintain its programme.

Frankly, the only significant change in the Ministry of Defence is that I have joined that club on behalf of the taxpayer. We now plan our programmes to live within the cash available to meet them. Just because a Department is large and its budget huge, there is no excuse for ignoring the basic rules of prudence that characterise the private sector but not public expenditure planning.

There is, then, no hidden motive behind my reluctance to disclose all the assumptions being made in 1985 about the programme stretching 10 years ahead and beyond. We are continuing properly to plan on a long-term basis to sustain our commitments and the defence roles identified in the 1981 and 1982 White Papers. The resources which can realistically be postulated for defence in the longer term are sufficient to sustain these roles and to provide for the major re-equipment programmes of the services, currently foreseen. Whatever the pressures arising from cash planning, the fact remains that defence expenditure is now some £3 billion higher than when we came into office. We have a steep increase which we know only a Conservative Government would have provided.

Of course I know of the understandable and legitimate concern of my right hon. and hon. Friends on the Select Committee for the proper defence of this country, but as I read the Select Committee report I could not help wondering about the role of the Opposition Members on the Select Committee, when only two years ago the Labour party went into a general election seeking to reduce defence expenditure by one third. Now they tell me that £3 billion a year more is not enough. The protestations of the Opposition about the defence programme are, in truth, humbug.

Mr. Robert Banks (Harrogate)

One way in which savings can be made is through greater co-operation between our European partners in NATO. Can my right hon. Friend say a word about the work of the independent European programme group and how it can be worked into the programme to our advantage?

Mr. Heseltine

My hon. Friend is most kind in anticipating what remains of my speech. I shall not give details of numbers and in-service dates stretching 10 years ahead. They would, in any case, be overtaken, for a variety of reasons. Nor do I see any case for rushing decisions to replace capabilities until the military requirements and options for meeting them have been properly studied and set alongside other priorities. It is these considerations, rather than funding difficulties, that have governed our approach to future amphibious capability, upon which the Select Committee has commented. The right way forward is to release cash progressively on new equipment against tightly drawn contracts, to maintain a careful balance between commitment and cash and to keep options open in the longer term in order to take account of strategic circumstances, technological opportunities and cash availability nearer the time.

I must say a little more about the amphibious capability replacement, about which I have told the House the precise story. If the idea should once get about in the Ministry of Defence that that part of each individual armed service was likely to get preferment over all the rest of the priorities by leaking its concern either to the press or to hon. Members in order to embarrass Ministers in the Ministry of Defence, it would bring our legitimate planning process to a grinding halt. That is precisely what has happened in this case. I am not prepared to be sucked into that process.

Mr. Douglas

That is a terrible accusation.

Mr. Heseltine

If the hon. Member wants to call it a terrible accusation, so be it but if he should ever serve in a Government, which I doubt, he would find that life is not so rosy as it looks from the Opposition Benches.

Let me say a word, finally, about our programme to improve efficiency. My right hon. Friend the Minister for Defence Procurement will no doubt discuss tomorrow our efforts to increase competition in defence procurement. The problem of defence equipment inflation at a faster rate than elsewhere in the economy, to which the Select Committee on Defence rightly draw attention, is, I believe, a product of our practice in defence contracting in the past, with too many contracts being placed on some form of cost-plus arrangement.

If one wants to ensure that one's prices move up ahead of inflation, cost-plus contracting is the surest way to achieve it. I do not want to minimise the difficulties in moving towards more competition, particularly in areas of high technology. It is difficult to offer a global figure for savings when so few contracts placed in one year are comparable with contracts placed in the next year, but the results to date have been most encouraging.

I told the House recently that, as a result of competition, we were able to buy the Royal Air Force's trainer replacement at a saving of about £60 million, or 35 per cent, less than the estimates upon which the Department had previously worked. Today I am able to announce a decision to place an order for 1,048 mechanised combat vehicles with Guest, Keen and Nettlefold and Sankey. The total programme cost of about £725 million shows a saving of over £100 million against our internal estimates and is a direct result of our policy of increasing competition throughout our procurement policies.

The House may wonder just where, in practice, the concept of a defence price inflater came from. This is not a policy which will win universal acclaim from defence contractors, but their long-term viability depends upon their ability to remain competitive. It depends also upon their capacity to continue to match American defence technology.

I do not believe that, in the years ahead, this will be feasible on a national basis, with one European country competing with another. The search for increases in collaboration is not simply concerned with achieving economy. The hugely fragmented European defence industry will not be a match for the competition, particularly with the likely impact in America of the strategic defence initiative programme, unless urgent efforts are made to eliminate wasteful duplication and to enhance co-operation on research and development. The meeting in London, to which my hon. Friend the Member for Harrogate (Mr. Banks) referred, of the independent European programme group next week will be an important test of the willingness of European defence Ministers to take concrete measures in these areas rather than simply to articulate aspirations and aims.

Next week will also see a further meeting of defence Ministers, another matter about which my hon. Friend asked me, involved in the five-nation European fighter aircraft programme. It would be quite wrong of me to say that no differences remain between the collaborative partners. There are still very large differences of view, but I cannot emphasise too strongly the desire of the United Kingdom to bring about a successful collaborative fighter aircraft programme that meets the air staff's requirements, and with equitable industrial arrangements. We in this country seek a true partnership.

I would not expect my colleagues in Germany, France, Italy and Spain to attempt to explain away in their countries a deal that was against their national interests. I will certainly accept no such arrangement on behalf of this country. However, the longer that European resources are frittered away on overlapping research, development and production facilities at a national level, the longer we allow the major world powers to widen the technological gap that is already an awesome chasm.

Finally, I draw attention to a third plank in our effort to make the most efficient use of defence resources: our drive to prune overheads and, to the maximum extent possible, to direct resources to the front line. The army's exercise Lean Look moves 4,000 men to the front line from the administrative tail. The Royal Navy is to find by increased efficiency the men necessary to man those eight destroyers and frigates wh*ich, under previous plans, were to have been placed in the standby squadron.

Mr. Robert Atkins (South Ribble)

Will my right hon. Friend give way?

Mr. Heseltine

Perhaps my hon. Friend will forgive me if I do not; I am nearing the end of my speech. In the case of civilian staff, numbers at 1 April 1985 stood at about 174,000, some 74,000 lower than when this Government came to office, and some 7,000 lower than a year ago. The scale of this reduction and the willingness of our civilian staff to adapt to change in accordance with the Government's priorities are insufficiently appreciated. I am immensely grateful for the efforts that they make.

The measures I have described to improve efficiency and to improve the competitiveness of our defence industrial base are of major importance, but they are not, and they never could be, my key responsibilities. Those responsibilities are to sustain the professionalism and the fighting power of our armed forces and to work with our allies to maintain a uniquely successful and long-lasting alliance for peace. The policies set out in the 1985 statement on the Defence Estimates are designed to achieve those aims. I commend them to the House.

4.39 pm

Mr. Denzil Da vies (Llanelli)

I beg to move, To leave out from "House" to the end of the Question and to add instead thereof:

'believes that the plans outlined in the Statement on the Defence Estimates 1985, Cmnd. 9430, in particular the Government's policies of buying, at an ever-increasing cost, the Trident nuclear system, will inevitably lead to further damaging cuts in Britain's real defence and in our conventional contribution to the North Atlantic Treaty Organisation; believes also, that in view of the North Atlantic Treaty Organisation's present strategy of "first use" of nuclear weapons, a reduced conventional contribution will increase the risk of a nuclear war in Europe; calls upon the Government to cancel Trident, to remove all nuclear bases from the United Kingdom and work within the North Atlantic Treaty Organisation for a substantial reduction in, and eventually the elimination of, battlefield nuclear weapons; notes with alarm the decline of the Merchant Navy; and urges the Government to take positive and immediate steps to arrest and reverse that decline.'. The Secretary of State made the speech that I had expected him to make. Indeed, it was not greatly different from his speech last year. I do not complain about the fact that he took an hour to make it, because there were many interventions. However, he failed to answer two questions put to him by Opposition Members, and I hope that the answers will be forthcoming before the end of the debate. During that hour, the Secretary of State had a bash at the Russians, as he did last year. Then he started on the Labour party. Then we went to the Falkland Islands and to Hong Kong. We spent some time on the strategic defence initiative and arms control, and he spent about five minutes on the Select Committee's report about future programmes. The Secretary of State said that he would not attempt a line-by-line, figure-by-figure analysis of all the gloomy reviews. He has better things to do than that. He told us that, in the long term, everything would be all right. We do not know about the long term, but in the shorter term, which we can see easily, the Secretary of State will have serious problems with his defence budget.

I agreed with the right hon. Gentleman about one thing. He made the point clearly that it is for the sovereign nations of NATO to make their decisions about their defence policies within the Alliance. He instanced the ending of the commitment to increase spending by 3 per cent. Indeed, President Reagan made a sovereign, unilateral decision, which turned NATO's strategy upside down, in relation to the SDI. We do not agree with it, but we accept the right of a sovereign Government to determine their own strategy.

The White Paper, like last year's White Paper, does not deal with the real problems of defence policy and expenditure that will occur in the next few years. The only difference between last year's White Paper and this year's one is that another year has gone by and the time for difficult decisions is getting closer. It is no good the Secretary of State trying to hide behind MINIS, contracts and tenders. Difficult decisions will have to be taken by him or by his successor.

It will come as no surprise to the House or to the Secretary of State if I say that the White Paper did not receive rave notices. An editorial in the Daily Telegraph the day after the White Paper was published stated:

Heseltine's Fudge. If the statement on the Defence Estimates were the accounts of a public company they would have at best sent the share price sliding and at worst been qualified by the auditors. The picture which Mr. Michael Heseltine… is trying to present to the world has only a passing resemblance to reality. During the same week, The Economist said: This bland document has avoided all important decisions and contains no signposts to future defence policies … Mr. Michael Heseltine gives the impression that he does not grasp the problem. That is unfair to the Secretary of State. He grasps the problem in the sense that he understands it; he does not grasp it in the sense of having the courage to do something about it.

Those were the first-night reviews. They have become worse. Yesterday morning, an editorial in the Daily Mailstated: When two plus two makes three—are Britain's Defence Estimates a confidence trick? It comes to the conclusion that they are.

The worst condemnation comes from the Select Committee on Defence, over whose report the Secretary of State skated. The Committee, chaired by the right hon. Member for Spelthorne (Sir H. Atkins), bitterly criticised the Ministry of Defence for giving vague and evasive answers, and for not giving the Committee any information about future requirements. From my reading of the report, I have the clear suspicion that the right hon. Gentleman is up up to his old game of hiding behind national security when trying to avoid political embarrassment to himself, to the Department and to the Government. It is not the first time that he has tried to do so in respect of Select Committees and inquiries in the House.

The Secretary of State knows what the problem is. He may not be as brilliant at reading balance sheets as is the former chairman of the Conservative party and former Secretary of State for Trade and Industry, the right hon. Member for Hertsmere (Mr. Parkinson). We heard the other morning that he is extremely good at doing that. But the Secretary of State knows the score. He knows that he does not have enough money to pay for Trident and to maintain an adequate conventional capability in our defence. Although the right hon. Gentleman would not analyse the problem, I shall do so. It comes from two sources, the first being the public expenditure White Paper that was published in January. The phrases in his speech, including "value for money", "fighting for the taxpayer", and "making sure that the taxpayer gets a good deal", are a smokescreen for cuts. The problem also stems from the Government's decision to buy Trident.

Last year, the Secretary of State lost the battle with the Chancellor, and we wait with interest to see what happens this year. We hear on the grapevine around the Palace of Westminster that this year will be stand-and-fight year. I have heard phrases such as, "Doing a Pym". That is not a reference to the recent footballing activities of the right hon. Member for Cambridgeshire, South-East (Mr. Pym). It is a reference to his time at the Ministry of Defence, where the folk memory is that he resisted cuts in conventional defence, thereby sowing the seeds, some people say, of his eventual demise. I do not know whether it is wise to adopt similar procedures, and no doubt the Secretary of State will decide for himself.

However, once the Secretary of State conceded a zero growth budget for the years after this, it was inevitable that there would be cuts in defence expenditure. I shall try to show why.

Dr. Hampson

Where are the cuts, and what are the alternative policies proposed by the right hon. Gentleman?

Mr. Davies

That was not up to the usual standard of the hon. Gentleman's interventions. I shall try to explain the cuts in a moment.

After 1985–86, Britain will have a zero growth budget based on Treasury assumptions. The crucial assumption is the Treasury's figure for inflation, which is called the GDP deflator—I see the right hon. Member for Spelthorne nodding, so I must have got that right. The GDP deflator is not a forecast but half assumption, half forecast. This year, the figure is 5 per cent.; for next year, it will be 4.5 per cent.; and for the year after, it will be 3.5 per cent. I am talking about general inflation in the economy, not about defence inflation. If inflation exceeds those estimates, there will have to be cuts in defence expenditure, unless the Treasury changes the figures or it gives the Secretary of State more money, which is unlikely, since the figures relate not only to the Ministry of Defence but to all public expenditure by the Government.

Let us assume that the Treasury figure is not exactly right and that inflation will be 5 per cent. this year, 5 per cent. next year and 5 per cent. the year after. That is a fairly reasonable assumption. On the basis of those figures that will take away an extra £900 million, or 6 per cent., from the defence budget next year and the following year. That is where the cuts will come from, and the margin need only be 1 to 1.5 per cent, each year.

Those figures do not take account of what is called defence inflation. All we can say about that is that generally in the past the increase in the cost of equipment has tended to be greater than the rise in inflation in the economy. I do not know why, but I suspect that the right hon. Gentleman has a point when he says that it is partly due to inefficiency and other reasons. I do not dispute that.

Let us then assume that defence inflation for those two years is only 1 per cent, a year greater than the rate of inflation. That will put at least another £500 million on the defence budget in those two years—[Interruption.] The Secretary of State mutters, "No," but he should bear in mind that the Select Committee assumed a 2 per cent. defence inflation figure. Assuming that the general inflation targets in the economy are met, that 2 per cent. amounts to a reduction of £960 million. Again, that is around 6 per cent.

Indeed, the chief of the general staff, Sir Edwin Bramall, said that it would be between about 4 and 7 per cent., and Mr. David Greenwood, a distinguished defence analyst who has not yet been attacked by the chairman of the Conservative party for heresy—I can therefore quote him—said that there will be a funding loss in excess of £2,000 million by 1988-89. It may not be as high as that, but even on different Conservative assumptions it is clear that the Secretary of State or his successor will be faced with a funding deficit — quite apart from Trident—of between £1,000 million and £2,000 million purely because of inflationary assumptions.

That is a horrendous problem, but what about Trident —the Tory party's sacred cow, Trojan horse or cuckoo in the nest? Apparently we are to have a zero growth defence budget. In my view it will be a minus growth defence budget for the reasons that I have just given. But even a zero growth defence budget does not solve the problem of Trident. Over the next three years the costs of Trident will escalate, and by the end of the decade will rise by about £1,100 million a year.

Mr. Heseltine

indicated dissent.

Mr. Davies

The Secretary of State could have denied that had he wished, because it was in the Select Committee report.

Mr. Heseltine

I could stay on my feet a long time denying the rubbish to which we are listening, but when the right hon. Gentleman reads Hansard he will see that he said that the cost would go up by £1,100 million a year. In the peak year, the highest estimates for all the costs of Trident are about £1,000 million.

Mr. Davies

I said that the cost would go up to that figure—[hon. members: "No."] Well that is what I meant to say. But it does not invalidate my case. The costs of Trident are now increasing rapidly, and it is no good the Secretary of State smiling because he thinks he has made a debating point. The fact remains that over the next few years the costs of Trident will escalate rapidly within a zero growth increase in the defence budget.

If the defence budget increases by nothing and the costs of Trident increase rapidly, the money will have to come from elsewhere in the defence budget. I should have thought that was pretty obvious, even to the Secretary of State. That money will have to come from the rest of the defence budget, and it can come only from hardware, equipment, stores, and supplies relating to conventional forces or from military and civilian manpower. The money cannot come from anywhere else, and the Secretary of State knows it.

We have been told in the past that it was perfectly possible to accommodate Polaris and Chevaline—[AN hon. member: "It was the Labour Government who proposed Chevaline."] I do not deny it. I clearly mentioned it and I expected that sort of reaction. The Secretary of State said that in the past we managed to pay for Polaris out of the defence budget. The total cost of Polaris and Chevaline at 1984-85 prices came to £4.5 billion. If one compares exactly like with like, the total cost of Trident at 1984-85 prices on Government figures will be £9.2 billion. Therefore, Trident costs twice as much as Polaris, and it will account for a much greater proportion of the defence budget than Polaris and Chevaline ever did.

Sir Antony Buck (Colchester, North)

Does not the right hon. Gentleman agree that the reasons that caused the Labour Government secretly to go for Chevaline are exactly the same as those that have caused the present Government—many of us believe rightly—to mantain a new independent nuclear deterrent?

Mr. Davies

I am sorry that I raised this matter. That intervention was wholly irrelevant to the point I was trying to make. I thought that we would have a fairly serious debate on the Defence Estimates and the White Paper, and the point I am trying to make is that Trident costs vastly more than Polaris.

We have been told several times that although Tornado cost more than Trident the Government managed to pay for that. But Tornado was never paid for out of a zero growth defence budget. At the time when money was spent on the Tornado aircraft, we did not have a zero growth defence budget. Had that been attempted, there would have been the horrible problems which the Secretary of State will now have to face when the costs of Trident begin to escalate.

Mr. Heseltine

As Tornado was largely financed out of a budget that was much smaller than the present budget, and as that cost much more than Trident, why is it so impossible to pay for Trident out of a much larger budget?

Mr. Davies

The Secretary of State again misses the point. It is certainly possible to finance Trident out of the budget. All I am saying is that it cannot be financed without deep cuts in our conventional forces and our conventional contribution. In the case of Tornado, the budget was increasing every year. We shall now have a zero growth budget—effectively a minus growth budget —and it will not be possible to finance Trident out of it without substantial cuts in our conventional defence.

We are not comparing like with like when we compare expenditure on Tornado with expenditure on Trident. Trident is a last resort weapon. It is an extraordinary defence policy when apparently the Secretary of State will have to reduce expenditure on front-line weapons of first resort such as tanks, ships and submarines in order to finance a weapon of last resort. That is a topsy-turvy way of running a defence policy.

The money will have to come out of the conventional budget — from equipment, spares, stores, fuel or manpower. If it came entirely from equipment it would mean a 15 per cent. to 20 per cent. cut in the equipment budget. If it came entirely from manpower, it would mean a drop of about 30,000 in civilian manpower and 50,000 in military personnel, roughly equivalent to the British Army of the Rhine. I accept that it will not be done in that way, that there will be an attempt to spread the misery, but there will be manpower cuts and jobs losses. The Secretary of State talks about efficiency, but since the Government came to power, despite 2.5 to 3 per cent. growth in the defence budget, nearly 100,000 jobs have been lost in the military and civilian industries and areas of defence policy. If the cuts take place, that figure will almost certainly double in the next few years. There will be pay restraints, cuts in fuel and stocks, slowing down on acquisitions, and a running down of equipment beyond its economic and military life span.

Viscount Cranborne (Dorset, South)

Is the Labour party advocating an increase or a decrease in defence expenditure?

Mr. Davies

We are advocating the cancellation of Trident because we do not believe that it can be financed without cutting the conventional defence budget and our conventional contribution to NATO.

The greatest burden will still fall on the Navy. The Navy will suffer again as it has suffered in the past because in many ways it is easier to reduce expenditure on the Navy. It is not possible to withdraw the British Army of the Rhine and in any case there would be no public expenditure saving. If the Secretary of State gets his European fighter aircraft, or 25 per cent. of it, at a cost of £6 billion or whatever, he will not want to cut that, so the cuts will fall on the Navy— on frigates, landing ships, submarines and all the equipment used by the Royal Navy.

The Secretary of State said that he intends to maintain orders for three type 23 frigates per year. That will cost almost £500 million. The Government will have to do a great deal better than they have done in the past five years, because that is twice what the Government ordered between 1979 and 1984. In addition, there will be £850 million for amphibious ships required by the marines in Norway as well as the cost of replacing out-of-date equipment and conventional submarines which have become too noisy. We are being asked to believe that all this can be done with a zero growth defence budget, while the cost of Trident escalates rapidly at the same time. No one believes that and it is unworthy of the Secretary of State to pretend that he can do it by means of various devices or wheezes.

The Navy is easy to cut because, unlike the Army and the Air Force, it has never fitted easily into NATO's overall defence strategy.

Sir Patrick Wall (Beverley)

That is ridiculous.

Mr. Davies

Perhaps the hon. Gentleman will listen to my argument before saying that it is ridiculous. NATO's strategy has always been and still is that conventional war in Europe will be short. The massive superiority that the Soviet Union is supposed to have—

Mr. Stefan Terlezki (Cardiff, West)

It does have massive superiority.

Mr. Davies

Perhaps the hon. Gentleman will contain himself for a moment. He can challenge me later if he wishes.

The massive superiority that the Soviet Union is supposed to have means that conventional war in Europe is estimated to last no more than six or seven days, after which we use the battlefield nuclear weapons. If that is so, there is no point in having a navy because it takes 10 days for the transport ships to come over from the United States, by which time the war will be over at least in its conventional form. That has been NATO's thinking for a very long time and the Navy does not fit well into that kind of thinking.

The reality is quite different. Although there is superiority in certain areas, there is not any great overall superiority in the Warsaw pact. I believe that if war ever comes—we hope that it never will—it will be a war of attrition in central Europe and will last much longer than the five to 10 days currently envisaged by the NATO planners. In a war of that kind, a navy and especially a navy in the Atlantic is extremely important.

Sir Geoffrey Johnson Smith (Wealden)

The hon. Gentleman is basing his argument on completely wrong hypotheses. As a member of the NATO Assembly. I have spoken to a great many people and I know, as the hon. Member for Sheffield, Attercliffe (Mr. Duffy) will confirm, that no one in NATO is making such assumptions. If the hon. Gentleman will put forward a sensible argument, we are quite willing to have a sensible debate.

Mr. Davies

Of course such assumptions are made. The situation may be changing now, but that was the original reason for the battlefield nuclear weapon—to make up the difference between Stalin's hordes and Western conventional defences. If the hon. Gentleman thinks that I am wrong, he can make his own arguments in his own speech.

The Navy will therefore suffer again as it has suffered in the past.

Sir Patrick Wall

Is the hon. Gentleman aware that in the Eastlant, NATO is 80 per cent. dependent on the Royal Navy, particularly in the first three days? Has he never heard of the GIUK gap or the 190 nuclear submarines in the Soviet northern fleet? All those things are at the heart of NATO's strategy. The hon. Gentlenan clearly has no concept of NATO's maritime strategy.

Mr. Davies

I understand that very well, but I know from my conversations with the people concerned that they do not have enough ships. Because the Navy does not fit easily into that kind of strategy for a continental war, it is always easier to impose cuts on the Navy.

Mr. Heseltine

I do not want to get the signals to the Fleet wrong on this. When we are fighting this land war in Europe, how are we to get the stores across the Atlantic to support the armed battle without ships defended by the navies of the Western Alliance?

Mr. Davies

That is exactly my point. That is the case for the Navy. The Secretary of State is in no position to talk about stores because he will be cutting conventional defence so we shall not be able to make that kind of contribution by positioning stores in western Europe so that it is unnecessary to bring so much across the Atlantic.

The motion also refers to the decline of the Merchant Navy. My hon. Friend the Member for Clackmannan (Mr. O'Neill) will deal with that aspect tomorrow. I wish to deal with the subject of battlefield nuclear weapons because they are extremely dangerous and, as the Secretary of State admitted in evidence to the Select Committee, they are at the core of NATO's strategy. On this issue, this year's White Paper is as distressing as the White Papers last year and the year before. We believe that over a period NATO should get itself into a position to change its present strategy of first use of nuclear weapons. We agree with the article published by General Sir John Hackett in the International Defence Review last year. He said:

I am totally persuaded that the defence of Western Europe must be, however it is conceived, conventional. In the past few years, there have been signs of some movement within the NATO bureaucracy to try to move away from reliance on battlefield nuclear weapons. General Rogers has made a number of speeches emphasising the need to strengthen conventional defence and some -action has been taken. Some of us, perhaps naively, -saw this as a small step away from reliance on battlefield nuclear weapons. At Montebello in 1983 NATO ministers agreed to reduce these weapons by 1,400 to 4,600 and to remove completely all atomic demolition mines.

Mr. Edward Leigh (Gainsborough and Horncastle)

Does the hon. Gentleman accept that the concept of first use is made necessary by the conventional imbalance? Is he suggesting, therefore, that the NATO countries should spend the same proportion of their economy on defence as the Warsaw pact countries spend?

Mr. Davies

I am grateful for that intervention. We can argue about how it should be achieved, but if there were a conventional balance there would be no need for battlefield nuclear weapons. The Secretary of State would not agree with that, and nor would Lord Carrington or General Rogers. I detect a feeling—the Secretary of State said this to the Select Committee—that we must still have battlefield nuclear weapons, even if we had a conventional balance between the Warsaw pact and NATO.

Some of us thought that there would be some relaxation on the nuclear side as a result of speeches by General Rogers and of the Montebello agreement. I might be being unfair, but it looks as though that was a smokescreen for strengthening and increasing the lethality of battlefield nuclear weapons and was not a genuine attempt to move away from their use and closer to a better conventional balance.

Apparently, the new weapons are far more lethal and have a much greater range than the older ones. The atomic demolition mines, which are to be taken away, were a greater danger to the German population and our soldiers than to the enemy. I understand from newspaper reports —perhaps the Secretary of State will confirm this—that the Government are considering another mine which is to be called the advanced atomic mine, or ADAM for short. It is extremely sophisticated because it can be carried in a rucksack. I hope that the right hon. Member for Bosworth (Mr. Butler), the Minister of State for Defence Procurement, will resist bringing another ADAM to the Ministry of Defence.

I do not know whether the Government are thinking along these lines, but they should tell the House far more about their plans for battlefield nuclear weapons. The Secretary of State mentioned the new 155 mm atomic shell. Will the Government decide whether to accept it for the British Army of the Rhine? Perhaps the Secretary of State could tell us whether the matter is under active consideration. Perhaps he could tell us what decision will be taken. Many members of the United States Congress have said that we have agreed to the modernisation of those weapons.

Mr. Keith Speed (Ashford)

Does the right hon. Gentleman include nuclear depth charges in those strictures? If he does, how will he deal with modern Soviet submarines which are virtually unsinkable by conventional weapons?

Mr. Davies

I fully understand that, in terms of tactical nuclear weapons, what has been suggested is included. I was considering battlefield nuclear weapons in that central zone of Europe where they are especially dangerous. Both sides have them, and we argue that both sides should remove them as far away from the border as possible because of the danger of war breaking out and of those weapons being used.

Mr. Heseltine

If the right hon. Gentleman understands the tactical need for these weapons, will he ensure that the Americans are still allowed to base none of them in Britain for the protection of our submarines?

Mr. Davies

We have said clearly that we will not accept American nuclear weapons on British soil. Such a decision must be taken by a sovereign British Government. I agreed with the Secretary of State when he said that it is ultimately the prerogative of sovereign Governments to take that decision.

Mr. Heseltine

If the right hon. Gentleman agrees that there is no legitimate deterrence against this form of Soviet weapon and that our submarines cannot be protected except by this nuclear capability, what sort of protection will he offer our submarines?

Mr. Davies

I did not say that. I said, in regard to battlefield nuclear weapons in central Europe, that there is a serious problem because Warsaw pact and NATO troops are so close together. If war broke out in that part of Europe, it could easily become a nuclear war, which would raise the problems of political control.

Mr. Speed

Does the right hon. Gentleman accept the need for nuclear depth charges?

Mr. Davies

We have said clearly that we will not accept American nuclear bases on British soil.

Mr. Robert Atkins

So what protection will the right hon. Gentleman give?

Mr. Davies

We understand NATO strategy, which is based on flexible response. The weapons that the hon. Gentleman talks about are part of NATO strategy. My party has made it clear that it wants to work in NATO to change that strategy because we believe that it is out of date.

Mr. Peter Viggers (Gosport)

Will the right hon. Gentleman give way?

Mr. Davies

No. My speech will be as long as the Secretary of State's if I continue to give way. I should like finally to consider the strategic defence initiative. I believe that it will be extremely difficult to prevent the star wars initiative from becoming an arms race in space. We agree with the Government's analysis and with the analysis in the lecture that the Foreign Secretary gave about the dangers and the philosophical inconsistencies in star wars. I do not believe that it will be easy to stop star wars. I do not accept the rather simplistic distinction that the Government try to draw between research and develop-ment. If anybody believes that American industry will stop at research and not go on to development, they have not read about or understood what has happened in the arms race during the past 30 years.

Star wars fits perfectly into the American psyche because it tries to wrestle with difficult moral problems. I respect that side of it. It is an enormous moral problem to base defence policy on mutually assured destruction. Stars wars rejects that, the Government's policy, and therefore NATO strategy. Star wars is part of the American dream and the belief that technology can solve moral and political problems. Moreover, a lot of money will be made out of it. I find it extremely difficult to believe that, when those three factors come together, the star wars project will be stopped at research.

Many people who have created star wars regard it as an attempt on the part of the United States to return to the golden age of the 1950s when that country had superiority in nuclear weapons. Caspar Weinberger said it clearly. He is reported to have said:

If we can get a system which is effective, we will be back in the situation we were in when we were the only nation with a nuclear weapon". That is quite clearly an attempt to gain nuclear superiority. It cannot be gained on earth any more because Russia will try to catch up. I should like the Government to show a little more resolution and to come out with other European Governments in NATO and say, "We do not favour star wars and are not prepared to participate in the research and we believe that it will lead to another nuclear arms race."

Perhaps I might conclude by quoting a distinguished American scientist, Professor William E. Burrows, who wrote in the Spectator of 30 March:

But where is this race likely to end? American fighting mirrors, laser battle stations, space planes and manned attack platforms will sooner or later co-inhabit the heavens with their Soviet counterparts. Orbiting lasers made in California will be closely followed by space mines made in Yaroslavl, and although the lasers may be technically superior to the mines, that will count for little or nothing if the mines do their job at the crucial moment. It will therefore be deemed imperative to develop weapons that can attack the mines before they attack the lasers that are supposed to attack the ICBMs that are launched to attack the cities and silos. The prospect—now nearly at hand—of extending the vast and intricate network of super-sensitive warning systems and hairtrigger explosives hundreds and thousands of miles straight up is stupefying. The earth itself will have been turned into a gigantic orbiting bomb. That is an extremely realistic assessment of what will happen, and I hope that the British Government will say that they will have no part in it.

The choice presented by the White Paper is clear and simple. We can have strong conventional forces and no Trident or weak conventional defences and Trident. The Government have chosen to have Trident. We believe that that choice diminishes the defence and security of Britain and increases the risk of nuclear war in Europe.:

5.20 pm

Sir Humphrey Atkins (Spelthorne)

When my right hon. Friend the Secretary of State opened the debate he referred to the fact that the Select Committee on Defence, of which I am Chairman, had commented that he did not devote very much space in the White Paper to broad policy issues. However, he spent quite a bit of the first part of his speech doing that, for which I was grateful. I hoped we might hear something of the same from the right hon. Member for Llanelli (Mr. Davies) but we heard nothing of the kind. I do not have the faintest idea what he thinks about policy except that he does not understand NATO policy at sea. The right hon. Gentleman did a good deal of reading from newspapers — whether they form the basis of Labour party policy or not, I do not know There was some questioning of my right hon. Friend, perfectly properly, but the right hon. Gentleman quoted many figures and got most of them wrong. He would do much better to stick to the figures in the Select Committee report, which are correct. It is unfortunate that his are not. He should follow our figures rather than invent some of his own, which are demonstrably wrong.

Mr. Denzil Davies

Demonstrate that they are wrong then.

Sir Humphrey Atkins

The right hon. Gentleman said that three type 23 frigates would cost £500 million. They do not, and this is stated in the White Paper. They cost £110 million each. If he cannot multiply 110 by three he should not be sitting on the Opposition Front Bench. According to the Opposition's amendment, the Labour Party's policy is to cancel Trident, to remove all nuclear bases from the United Kingdom and not to allow nuclear depth charges anywhere near the country, to do away with battlefield nuclear weapons and do something about the Merchant Navy.

I did not hear the right hon. Gentleman say one word about our conventional forces. Does he think they are the right size, too big or too small? He should have spoken about that. No doubt when the debate is wound up by one of his hon. Friends we shall be let into the secret. That is all we know, at the moment, about Labour party policy —cancel Trident, get rid of nuclear bases, and hope for the best. At least the amendment which has been tabled by the leader of the SDP, the right hon. Member for Plymouth, Devonport (Dr. Owen) does not go quite as far as that. He also wants to cancel Trident but he wants to strengthen Britain's conventional defence. I am sure that he will tell us, if he is called, by how much he thinks it is necessary to strengthen Britain's conventional defence to provide the same level of deterrence that is provided by Trident. How many divisions, how many ships and how many aircraft will that involve, and what will be the cost? If that is his proposition, he owes it to the House to elaborate it, and I hope and believe that he will.

My right hon. Friend spoke about the comments made in the report by the Select Committee, but before I refer to those comments I want to speak about something that was not in our report. Nowhere in our report do we quarrel with the Government's assessment of the level of defence that it is necessary for us in the West to maintain

Annex A of the defence White Paper, which I do not think the right hon. Member for Llanelli has read, sets out starkly the balance of forces between the Warsaw pact and NATO. In every area except one, the Warsaw pact countries have a superiority over NATO. In nuclear terms, they have more strategic systems, more intermediate systems and more short-range systems. In conventional terms they have more soldiers, twice as many tanks, twice as many aircraft and more than twice as much artillery. At sea, they have twice as many submarines. In surface warships in the north and in maritime aircraft, NATO enjoys, for the time being, a marginal superiority. The Warsaw pact has total superiority in chemical weapons. It has hundreds of thousands of tonnes and we have none.

If ever there was an example of the futility of unilateral disarmament gestures, this is it. Nearly 30 years ago—I think it was in 1957 — Britain decided not to use chemical weapons and disposed of all that it had. We threw them into the Atlantic. The only response was the continuation of the Russian research, development and production of these fearful weapons, so that we are now at a total disadvantage. If anyone seriously believes that gestures of unilateral disarmament work, I can only say that he needs his head examined. History shows that such gestures do not work.

Mr. Willie W. Hamilton (Fife, Central)

Is the right hon. Gentleman in favour of manufacturing the same gases and chemical warfare weapons that the Russians possess?

Sir Humphrey Atkins

No, Sir. I am in favour of preventing them from being used. The West has prevented those or any other weapons being used against it for 40 years by employing the nuclear deterrent. The idea that, with a grand gesture, one can throw away a weapon and expect a potential enemy to do the same has no basis in history. We all wish that this state of affairs did not exist, but it does. It is the height of irresponsibility to seek to diminish the level of defences that is set out in the White Paper.

The second point I want to make, which is not spelt out in our report, is that we recognise and applaud the efforts that the Secretary of State is making to improve efficiency and to obtain better value for money. He mentioned a number of them and they are noted in our report.

The transfer of manpower from tail to teeth is still proceeding. The contracting out of functions has produced some savings and will produce more. The increasing number of purchases of equipment by competitive tendering, which my right hon. Friend spoke of, is increasing, although I must confess to a doubt as to what level that has reached. The White Paper speaks of something like 60 per cent. but the only figures I can find suggest a level of about 38 per cent. No doubt that is something with which my hon. Friend the Under-Secretary of State for Defence Procurement can deal later. There are prospects of savings by international collaboration and no doubt the reorganisation of the Ministry of Defence will produce some savings too. I accept that it is too early to judge the extent of the savings that will flow from these efforts but they could and should produce useful ones, thereby enabling us to have more defence for the same money, which is what we all want.

The Government told us in the 1984 public expenditure White Paper that after the current year, no extra money will be available for defence. That was the starting point of the Select Committee's inquiry. The Committee took the Government's statement to mean that there would be no growth in real terms or, to put it another way, that there would be level funding in real terms. That leaves aside Falklands-related expenditure, which has always been additional and which will be declining. The Select Committee took evidence to try to determine what the Government's policy would mean in terms of trying to defend ourselves. As my right hon. Friend the Secretary of State observed, pounds do not defend us; we are defended by the weapons and the manpower that the pounds buy.

The Committee discovered, as it has reported and as everyone knows, that level funding in real terms does not mean what many take it to mean. We were given three reasons for this, and they were not those elaborated by the right hon. Member for Llanelli. First, the cash which is available each year is adjusted from year to year by means of the GDP deflator. That involves a guess or an estimate of or an allowance for increases in the retail price index.

I am sure that in theory that mechanism can produce the same level of funding.

However, what the right hon. Member for Llanelli may have missed, but what my right hon. Friend knows only too well and has spoken about, is that the prices of tanks and guns increase more quickly than those of motor cars and cookers. I do not know why that is so, but my right hon. Friend has given some reasons why this happens. Over the past 10 years, the increase in price over the RPI, which is called the relative price effect, has been nearly2 per cent. That involves a great deal of money and the difference that it makes in any year is over £500 million. My right hon. Friend spoke about the Committee's figures. They are not the Committee's figures. They are his. Every figure that the Committee quoted was given to it in evidence by him or his officials. The Committee has merely written them down and added them up.

The second reason, of course, is the fact that the defence budget is sensitive to the exchange rate. The document before us today assumes a rate of $1.38 to the pound. We are all aware that the rate today is about $1.26. That makes a difference of £180 million.

The third reason is the cash allowance for pay. That is at a figure of 3 per cent. per annum. The Committee was told in evidence that every 1 per cent. above that costs £31 million at 1983-84 prices. Last week's events precisely illustrate our anxieties. My right hon. Friend the Prime Minister announced last Thursday that as from 1 April this year service pay would be increased—as recommended by the Armed Forces Pay Review Body — and would add 7.3 per cent. to the pay bill. No one grudges the services a penny of that increase, but where will the money come from? The Prime Minister gave the answer. She said:

The additional costs … will be offset by economies or reductions elsewhere in the defence programme. — [Official Report, 6 June 1985; Vol. 80, c. 194.]

At 1983–84 prices, the additional costs over the 3 per cent. allowed come to £133 million.

Perhaps I might remind the House—

Mr. Douglas

One type 23 frigate.

Sir Humphrey Atkins

I was going to remind the House that it is rather more than the cost of a type 23, which is given as £110 million, or, if the House prefers, it is slightly more than the cost of the 130 Tucano trainers that the Royal Air Force is buying from Short Bros Ltd.

Dr. Hampson

My right hon. Friend raised an interesting point yesterday in his questioning of Mr. Levene. It is a pity that the point was not pursued. At the end of five years, Mr. Levene was hoping to have a 10 per cent. reduction in his budget which, on a cumulative basis, means savings of billions of pounds on procurement at a time when he is running a budget of £8 billion to £9 billion.

Sir Humphrey Atkins

My hon. Friend may have been looking over my shoulder when I was making my notes. I wonder whether he will allow me to come to that point in a moment.

Mr. Denzil Davies

Was the figure of £960 million, which the Select Committee used as a deficit figure, arrived at on the basis of the Treasury's GDP deflator assumptions on inflation or on higher figures? Did the Committee assume that there will be no slippage in terms of general inflation?

Sir Humphrey Atkins: I hope that the right hon. Gentleman will do me the courtesy of reading the document. The figure is not £960 million; it is £970 million. He will find on page 32 how we arrived at that calculation. It is not difficult.

The Committee used the figures that it obtained from the Treasury with the assumptions that the Committee made about the GDP deflator. It would be much quicker if the right hon. Gentleman would do me that courtesy. I mentioned the frigate. The Committee expressed anxiety about the rate of frigate ordering. My right hon. Friend mentioned it. It gave us enormous satisfaction last year when he announced that he was reversing the policy of his predecessor, Sir John Nott, and was going to keep 50 frigates in the active fleet. The trouble is that many of them are becoming old.

I understand that frigates last 25 years. By 1991, 18 of our fleet of destroyers and frigates will be that old. There are 11 on order at the moment. To keep up our numbers, a further seven must be ordered, not before 1991 but in time to be in service by 1991. I think that I am right in saying — I am open to correction—that they take the best part of five years from ordering to joining the fleet. That means that they must be ordered by the end of next year if my right hon. Friend is to live up to his undertaking. He may say that he only needs to order five because we have 52 and he undertook to keep 50. That is a point that I should like my hon. Friend the Minister to elaborate a little further when he replies, because that was my right hon. Friend's undertaking and we are anxious that it is apparently not being met at the moment. We should like to hear that it is.

I should like to return to the subject of level funding, which we are asked to accept and which turns out to be a diminution in the money available, as best we can calculate, of £970 million—6.1 percent. of the total.

There seem to be three ways in which that gap can be covered. The first is a further reduction in the number of civilians employed. My right hon. Friend has announced his target of reducing the number of civilians employed by a further 8,000 by 1988. That will save him something under £100 million. The second is a further contracting out. I do not know how much of that can be done. It may be a little but I question whether those two together come to more than £200 million. We therefore fall back on competition.

My right hon. Friend recently appointed Mr. Peter Levene as the chief of defence procurement. He gave evidence to the Committee yesterday afternoon in public —anyone could have come to listen and some people did — and he was asked how much he could save by introducing policies of futher competition. Naturally, he could not give a figure as he had not been in position long enough to make such a projection.

If about another £800 million in savings are needed, that is almost 10 per cent, of the procurement budget. My right hon. Friend will agree that not all the procurement budget is susceptible to competition, although he is an enthusiastic supporter of competition. This is an enormous saving, and my right hon. Friend believes he can make it. I hope that he can, but I hope he realises the considerable task that he has set Mr. Levene.

Theoretically, it would be possible to save money on manpower. However, the Committee took evidence from many people, including the principal military adviser to the Government, the chief of the defence staff, Field-Marshal Sir Edwin Bramall, who told us several times that he could see no room for further reductions in manpower. If the Government accept the field-marshal's advice, all the saving must come from equipment. As I have said, my right hon. Friend appeared confident that he could make this saving, and I only hope he can.

Finally, little has been said in the debate or in the White Paper about service men and women. There are not many of them, but they carry a tremendous burden. This country is different from others. The Committee members were recently in Norway and we visited neutral Sweden. Both those countries have what they call the concept of total defence. That means that the defence of the country is everyone's business. They have compulsory national service, but everyone, whether in the services or not, regards it as their business to lend a hand with defence in the military sector or, when they grow older, in the civil defence sector.

That has never been the case in this country. Defence in this country has always been the business of the few people we hire to carry it out for us—the services. We have fine services and we must make sure that they get the best equipment and training, proper pay and all the support that we can give them. Our services are small, but I often recall the story, which may be apocryphal, of two naval ships passing in mid-Atlantic. The American ship signalled to the British ship, "Greetings from the largest navy in the world." The reply came back, almost at once, "Greetings from the best."

We have the best Navy and the best forces, and it would be wrong not to pay tribute to them.

5.40 pm

Dr. David Owen (Plymouth, Devonport)

I have no difficulty joining the right hon. Member for Spelthorne (Sir H. Atkins) in paying tribute to all three of our armed services. The quality of our service men and women is exceptional.

We can all be pleased that since 1977 we have fulfilled our obligations to improve the conventional forces of NATO better than any other country in western Europe. However, the debate focuses on the main issue facing this country, which is what is to happen to our defence spending after 1986.

The Select Committee will have done a great service if it has awoken the House and the country to the reality that stares us in the face. As the right hon. Member for Spelthorne said, decisions have been announced in public expenditure White Papers for the past two years and some of us have been trying to draw attention to the problems that will face this country in a year's time.

The House now has the opportunity to face the reality. The Select Committee's report is devastating. Let us be under no illusions and let us have no more talk about level or stable funding. It is clear that from 1986 onwards the defence budget will be falling inexorably and remorselessly.

If we pursue the Trident nuclear option, the cuts in our conventional defence spending will be even greater. The Secretary of State inherited the Trident decision, but he must realise that if the Government or the country wish to pursue that decision—I believe that it was a mistake and I have opposed it since 1977—they must find the extra resources to maintain our conventional defence forces. We cannot duck that choice.

The Select Committee concludes that planned defence commitments cannot be met within planned levels of spending. It says that beyond 1985-86, the defence budget will fall in real terms by 0.5 per cent. in 1986-87 and 0.7 per cent. in 1987-88, on a Falklands-exclusive basis. The Committee believes that the ending of the 3 per cent. real increase in spending will lead to

cancellations, slowing-down of acquisitions and the running on of equipment beyond its economic life span. The report concludes that better management and savings through efficiency reforms will not be sufficient to avoid a decline in "overall capability" and the possible elimination of a major commitment.

The report comes before the House with all-party support and, by any standards, it is a devastating criticism. The Secretary of State should have devoted much more of his speech to grappling with the issues. The report highlights a major gap between what is planned for defence spending and what the Government are making available. It estimates that the real reduction in defence spending by 1987-88 will be £970 million, compared with the 1985-86 budget — a cut of 6.1 per cent. on a Falklands-exclusive basis. That is made up of a sterling-dollar depreciation of 2 per cent., pay awards exceeding the Government's target by 1 per cent. and a higher rate of inflation in defence equipment costs — the relative price effect—of 3.1 per cent.

The right hon. Member for Spelthorne was right to remind us that the report is, if anything, unduly optimistic, despite presenting the figures that I have given as a worst-case scenario. We heard last week of the armed forces pay award of 7.3 per cent., costing £200 million per annum and exceeding by 4 per cent. the Government's target; the Select Committee report assumes only a 2 per cent. overshoot.

The Select Committee report also assumes a sterling-dollar exchange rate of $1.26 and the rate last week fluctuated between $1.24 and $1.26. I agree that it is almost impossible to predict exchange rates, but the figure in the Select Committee's report was a fairly generous assumption.

The report assumes increases in defence equipment costs of 3.1 per cent. above inflation, but many senior and serious figures who have examined the escalation of defence expenditure pitch the figure much higher. One does not have to go all the way with David Greenwood —whose unit in Aberdeen has done some good work— who claims that the figure should be 6 per cent., but I am sure that 3.1 per cent. is an underestimate.

The Secretary of State is right to claim some credit for his drive for cost-efficiency savings. We all recognise that a long overdue extra effort has been put in into that area. I have been violently critical of the way in which Mr. Levene was appointed. It was a disgrace to the Civil Service and to the House, but he is there and we had better accept him. We must hope that he can produce savings to justify his salary and the manner in which he was appointed.

Let us examine where our existing spending on conventional defence has brought us, even with the extra money that has been put in over the past 10 years. I do not agree with all the strictures in a recent article in The Economist, but it is worth considering how a fairly objective source views our defence effort. It said:

The … Army is already the most poorly equipped of all the main armies on NATO's Central Front. It has less heavy artillery than the Dutch; fewer tanks than the French, the West Germans or the Americans (in Europe); and a lop-sided anti-aircraft system based entirely on missiles—no guns at all. It needs more equipment than is now in its long-term plans—not less. Many people will be arguing for a replacement for our fighter aircraft, but it is not even in the long term costings. That is the undisclosed problem. All the senior service men know that they cannot have, on current plans, the fighter aircraft. The Secretary of State and his officials are right to negotiate for a European replacement, but the aircraft is not in the long-term costings. If that is to go in, what will come out?

The Secretary of State has refused to answer questions about the replacement for Fearless and Intrepid. He seemed to think that the Royal Marines were putting undue pressures on him, but many of us saw in 1980 and 1981 that the Royal Marines were nearly taken out during the Nott review and we are not prepared to sit back and say nothing about our fear that a squeeze will be put on an element of our armed forces which often does not have strong support in the Ministry of Defence.

We have the right to say that we believe that the amphibious wing is an essential element of our defence forces. We want reassurance that there will be a replacement for Fearless and Intrepid. Perhaps it will have to be a cheaper ship, because it is hard to see how we can replace those ships with another of the same type.

The Herald Tribune, which is usually reliable, carried a report of the recent meeting of NATO's Defence Ministers. It said:

The ministers also reaffirmed, as expected, their long-standing goal of increasing each member country's military spending by at least 3 per cent. a year after inflation. I could not believe that, so I got hold of a copy of the communiqué of the meeting of Ministers. The Spanish Minister put in a reservation and I was sure that our Secretary of State must have done so. Not a bit of it. Indeed, the right hon. Gentleman has the brass neck to come to the House and tell us that he still reaffirms that commitment.

The resource guidance in the communique says:

Notwithstanding the above efforts to improve the output from existing expenditures it will be necessary to increase the allocation of resources to defence in real terms with most nations achieving rates of real increase higher than those in the past…The 3 per cent. formula is confirmed as a general guide. It is not fair, reasonable or honest for the Secretary of State to be a signatory to that communiqué without making the facts clear to his allies and friends.

Last Monday, when I visited Congress, I asked some of the senior people there whether they knew what was happening to the British defence budget. They had not a clue. They had not absorbed what would happen between 1986 and 1988. [Interruption.] I talked to senior people there. They all paid tribute to the fact that during the past 10 years Britain had been the best contributor to NATO's defence budget. Now there will be absolute reductions.

Mr. Michael Mates (Hampshire, East)

rose—

Dr. Owen

The hon. Gentleman can make his speech in his own way, if he has different information on that.

Mr. Mates

I do not know who the right hon. Gentleman saw in Washington, but two months ago our Committee was there and we met the Armed Services Committee of the Senate and the House, which were fully aware of what we were about to do. Indeed, we discussed the fact that the Americans were about to have to do the same.

Dr. Owen

If the Americans make defence cuts as deep as those we are making in Europe, we in Europe shall have to face serious effects. I repeat my remark that the senior people of Congress to whom I have spoken have not faced up to the reality of how deep the cuts will be. When they do, there will be a serious backlash. Indeed, it is only recently that this House has begun to face up to that.

This is the last year in which we can make a decision not to go ahead with Trident without effectively pouring money down the drain. The Government must reassess the Trident decision. The Economist stated about the cancellation of Trident:

If the government fails to do it, it will be condemning the conventional forces to damaging cuts in both numbers and effectiveness. There is no sensible alternative to solid conventional forces, whereas there are sensible-if-second-best alternatives to the Trident nuclear deterrent. I have never denied that if one compares Trident with other systems in terms of sophistication, capacity to penetrate anti-ballistic missile defences, and having sea room for submarines, Trident is the best system available. There is no question about that. I am extremely glad that the United States has the Trident submarine missile system, as we all should be.

The United Kingdom however, will pay a heavy price if we pursue the Trident system. We must face up to that for many reasons.

Dr. Hampson

What about the The Sunday Times?

Dr. Owen

The Sunday Times can have its views. All quotes are selective, and the hon. Gentleman must know that. We can produce many different newspapers and, indeed, we could start quoting from the Morning Star, if we really wanted to.

The House must assess the best balance of defence spending for a country which faces serious economic difficulties, and which is no longer a super-power. Many of us see a value in retaining a nuclear deterrent, if we can possibly afford it, have supported and will continue to support Polaris, but are prepared to admit that Trident is not a natural follow-on from Polaris. It represents a substantial increase in cost, megatonnage and warhead numbers.

There are other options, which must be studied. There is the straight option of replacing Polaris. Although that is difficult, British Aerospace believes that it could do that. [Interruption.] The hon. Member for Woking (Mr. Onslow) can make his own speech. I would not choose that Polaris option. We must discuss the matter with the French. It is outrageous that we in western Europe can pursue western European defence in the Western European Union in complete isolation. The present dialogue between Germany and France is more intimate, with far greater exchange of information and even strategic thinking, than that between Britain and France. We should certainly study the M5 missile, which the French will order to replace their M4 missile. I doubt whether there will be much difference in cost. The United States navy is already using another option, which is to have cruise missiles and to put them on to submarines. Further options are land-based or air-launched cruise missiles. They are all serious options.

Mr. Cranley Onslow (Woking)

No.

Dr. Owen

The hon. Gentleman can shake his head and disagree, but he was party to the original decisions. Many hon. Members and people in the armed services, such as admirals, generals and air marshals, believe that it is time that the issue was reassessed because the price is so formidable.

I fear that if we cling to the belief that it is Trident or no other nuclear deterrent in the United Kingdom, we may end up with nothing. If we want to be reminded of that, we need only read the motion in the name of the leader of the Labour party. I do not find it difficult to understand why he signed the motion, but I have difficulty in understanding why the right hon. Member for Birmingham Sparkbrook (Mr. Hattersley) signed it. After the election he seemed to be aware that there were reasons for the Labour party's defeat. In an article in The Times in July 1983 he wrote

: the notion that we might give up our nuclear protection if others did not do the same was overwhelmingly rejected.

Opposition to our policy was intensified by the confusion that surrounded our proposals. We said that NATO remained our protection. But we refused to accept our NATO obligations. In July 1984 an article in The Times stated that when the right hon. Gentleman commented on the new Labour Party defence paper he said:

for Britain to play a non-nuclear role and remain a proper member of NATO, as provided for in Labour's defence policy, contained 'a certain ambiguity which we have got to resolve'. It appears that he has resolved that ambiguity by giving up. He has put his name to a resolution that we should remove all nuclear bases from the United Kingdom.

The devastating consequences of that need to be faced. It is reasonable and understandable to argue, as many people will argue, that we cannot afford to remain a nuclear weapon state. But to argue that NATO should not retain nuclear weapons and, as a principal ally of the United States, to argue that we should not facilitate the United States remaining a nuclear weapon state, and that we should back away from the nuclear deterrence of NATO is an outrage.

When the right hon. Member for Llanelli (Mr. Davies) who tried to weave his way through an impossible task, was asked about nuclear depth charges, he was completely floored. I am talking not only about United States nuclear depth charges, but British ones. Are we not to allow the Navy to use British nuclear depth charges, which is about the only weapon system capable of dealing with deep-diving Soviet nuclear submarines? They are one of the most serious threats to merchant shipping in a war. The right hon. Gentleman argues that a war in Europe will continue for a longer time than was thought. If that is so, we must ensure tht we have stores and conventional back-up to sustain Europe. He was right to point out that, if that happens, our Navy will need not only ships, but the weapon systems to deal with the Soviet Union and its ever-increasing weaponry sophistication. Does the right hon. Gentleman genuinely believe that the Navy should not be allowed to use nuclear depth charges?

There is the extraordinary question about battlefield nuclear weapons. I have long argued against them, and that we should withdraw them from within 150 km of the East-West frontier. That should be done as a British and NATO decision. Britain should argue for it, but it should be a collective decision within NATO. One can afford to take battlefield nuclear weapons out if one has intermediate missiles in Europe. We must face that. We cannot possibly withdraw battlefield nuclear weapons from a 150 km zone and have no United States based nuclear deterrents in Europe.

We should recognise that, having taken the NATO modernisation decision, it allows us to withdraw battlefield nuclear weapons. The criticism of NATO strategy is that although it almost accepts the worry that many of us have about the early use of nuclear weapons and the problem of "use or lose" by having nuclear weapons close to what could be an accidental border incident, we have the capacity with cruise missiles to remove battlefield weapons. As the House knows, it should be possible to take out Pershing II as part of negotiations on our intermediate range nuclear forces. It was always part of the modernisation decision that it was neccessary not merely because of the SS20, but for a United States presence in Europe with nuclear weapons.

Thus it was always slightly false to say that, if the Soviets withdrew all their SS20s, we would withdraw all our cruise and Pershings. In the arms control negotiations it would be much better to return to the "walk in the woods" formula.

The Secretary of State was right to praise President Reagan's recent decision to continue SALT II. If President Reagan is going for a serious arms control agreement, he will have to take several decisions that Mr. Weinberger and his hitherto Right-wing Republican friends will not like. It was important that, in keeping to the numerical limits of SALT, President Reagan not only made that decision, but said the he was prepared to dismantle the Poseidon submarine. The negotiations in Geneva will be very difficult, and every pressure will be put on the western members of Nato in order to split them apart. But as long as the United States is negotiating seriously, and is not breaking the SALT II treaty limits, and as long as the President—who never supported that treaty anyway —is within those limits, we are in the serious ball park of proper negotiations. Of course, the Soviet Union will use propaganda. In many senses, the United States does the same — [Interruption.] Of course it does, and everybody knows it. There is a propaganda battle going on for public opinion on both sides.

But the serious negotiations will be those that we do not hear about. They will be back-channel negotiations, and they will not come until the middle of next year. We probably will not hear much serious output until the end of next year. But it is vital that we should keep to the strategy of negotiating for deep cuts, and that the SDI should be seen as something that is done for research and development way into the future. The United States and the Soviet Union have been carrying out such research for more than 15 years, but because it was hyped up by the so-called star wars speech, everything has got out of proportion.

It is perfectly clear to most people that the deep cuts negotiating strategy is still viable and credible, and an essential step in creating confidence in the United States that there could never be any Soviet first strike potential. It is very much in NATO's interest that we should hold the United States to that negotiating strategy. Moreover, it is very much in the interests of western Europe that we should not be seduced into supporting the Reagan concept of the SDI—the impervious defence—by being sucked into the research and development. We shall not get any of the serious research and development anyway, as most of it will be highly classified and kept in the United States.

It was a good decision to support the EUREKA programme, which is a predominantly civilian programme. It was also a good decision to invest in science and technology that is co-ordinated throughout western Europe. Indeed, the Secretary of State rightly attaches great importance to that. Hon. Members would be most unwise to feel that we were strengthening the Alliance by pursuing and supporting too enthusiastically a mistaken policy initiative in terms of the SDI. Let us have research and development by all means — [Interruption.] I believe that one should not, under any circumstances, deploy. Hopefully, we could give some confidence to the Soviet Union by amending the ABM treaty so that there can be no deployment unless there has been at least a four to five year warning. Under the present ABM treaty, one is perfectly entitled to carry out research and development, but one is not allowed to deploy. However, the problem is that only six months' notice has to be given. If we could suggest an amendent to that treaty, it would be the best way of ensuring that the effective research and development carried out by the United States and the Soviet Union could go ahead with no risk of deployment for at least four to five years. That would be a sensible strategy. As a nuclear weapons state, we have the right to challenge, on occasion, the United States— our friend and ally.

Britain should also be pursuing more vigorously a comprehensive test ban. That is the one negotiation in which Britain is a party to as a direct partner with the United States and the Soviet Union. It was wrong to decide to withdraw and to postpone those negotiations, and the sooner that we get back on track, the sooner we are likely to see some discipline in the non-proliferation treaty. After all, we face the real risk of Pakistan making a nuclear explosion within the next year or so. Thus, a comprehensive test ban should be another of our priorities.

We have much more chance of our voice being heard in the United States if we pay our proper share of the conventional defence of western Europe. On present plans, the United States will be extremely worried about our defence policy and about the cutback in our conventional forces.

6.5 pm

Sir Patrick Wall (Beverley)

I hope that the right hon. Member for Plymouth, Devonport (Dr. Owen) will forgive me for not pursuing his argument about the financing of our defence policy. However, I agree with him that it is good that that matter has now been thoroughly ventilated in the House. The argument will obviously continue when we come down to brass tacks in the next few years. I also of course agree with what he said about amphibious warfare ships.

My right hon. Friend the Secretary of State made an excellent speech, in which he dealt with the strategic position in the world today. With the advent of Mr. Gorbachev, a new situation now exists between East and West. Mr. Gorbachev is young and intelligent, but he is still a product of the old regime and was put into power by it. We must remember that the attitude displayed by Mr. Gorbachev, the Politburo and the marshals is becoming more and more bellicose. The situation will worsen unless Mr. Gorbachev is allowed to direct money away from arms and towards improving agriculture and the Soviet Union's economy.

We should appreciate that the leadership of the USSR is becoming more aggresive. One need only consider Russia's 25,000-tonne Typhoon submarines, its continual deployment of SS20s, the armoured helicopter regiments or the 30,0000 men in the Spetanaz force who are ready to be dropped from Aeroflot aeroplanes in order to assasinate military and political figures in NATO countries. Furthermore, the Soviet Union's military exercises always end in nuclear war or chemical warfare. As has been said, we cannot reply to the latter. What will happen if the USSR's economy deteriorates even further and if the unrest in the satelite countries and in the component parts of the USSR becomes more violent? I suggest that Mr. Gorbachev may well then have to choose between aggression or disintegration.

The European Community is being undermined in every way by the Soviet Union—by spies and agents provocateurs, through the use of organisations such as CND and even by the use of some trade unions. I believe that there will soon be an effort to woo the Federal Republic of Germany away from NATO. Even more importantly, there will be continued efforts to split NATO America from NATO Europe by means of the arms control talks at Geneva. I suggest that that will be done by the Soviets making minor concessions on IMF, which Europe would obviously like, provided that the United States agrees not to deploy its ABM system when its research is completed.

Even Opposition Members must realise that the United States is the key to European defence. The anti-American remarks of some Opposition Members only provoke those who believe in fortress America. I shall tell the House of some remarks made at a recent Pacific caucus in Hawaii. We were told that 60 per cent. of American people do not care what happens outside the United States and that because of continual criticism from abroad, they are turning more and more inwards. We were also told that the United States does 25 per cent. more trade with the Pacific basin than with Europe. Furthermore, it was said that with a major Soviet build-up in the Pacific, the NATO area could no longer have priority. It was also said that the United States had created 14 million more jobs in the same time as Europe had lost 4 million jobs. We were told that the EEC was frozen into rigidity and was squabbling over minor matters. Finally, we were told once again that Europe must do more for its own defence. We were reminded that the Nunn-Roth amendment was lost by only eight votes.

We must remember that we depend on the United States. If the Opposition policy set out in the amendment were adhered to, I fear that we would have little support from the United States, and we should be out of NATO. We depend on the United States because today the United States ICBMs are obsolete compared with those of the Soviet Union. Therefore, we have MX, Midgetman and the Trident D5. As the right hon. Member for Devonport has said, the latter is probably the best weapon in the world. Tactically, we rely on the United States for Pershing II, ground-launched cruise missiles and cruise missiles in submarines and surface ships. Conventionally, we shall rely on new detection, ranging and weapons systems which will, probably in the next decade, render tactical nuclear weapons obsolete and unnecessary.

There is a weakness. We all know that USSR now has sufficient ICBMs and submarine-launched ballistic missiles for a first strike. What is not realised is that they have been spending the equivalent of $2 billion a year on civil defence. That is apart from anything that they have spent on anti-ballistic missile equipment or research. They have had an ABM system for over 10 years, and Marshal Sokolov has said publicly that the USSR has been conducting space research for quite a long time, which is why it will eventually give way on SDI research, but will do everything that it can to prevent deployment of any successful anti-ballistic missile system produced by the Americans.

This means that, in certain circumstances, the Soviets might risk a first strike, believing that they can absorb the American second strike because of their civil defence expenditure and the excellent provisions that they have for civil defence. As most of their launchers are re-usable, they could then make a third strike. This is why they are opposed to the SDI and an anti-ballistic missile system. No one would launch a nuclear attack in the knowledge that only a small percentage of their missiles would get through. That is only common sense.

If the Americans can put men on the moon, they will eventually find the answer to the ballistic missile. After all, this will protect Europe as well as America. If an ICBM is fired from central Russia, no one knows whether it will be directed at Washington, London or Paris, so if it is brought down at the boost stage, which is the easiest stage to attack it, both Europe and the United States will be protected from that missile.

The term "star wars" has been bandied about the House already, but this should refer to ASATS—anti-satellite satellites. SDI is quite a different matter. In ASATS, the Soviets are well ahead of the West, but SDI is a non-nuclear defence, which I should have thought would logically be supported by the Opposition and the CND if it were not for their anti-Americanism. It is neither destabilising nor decoupling. I agree with the right hon. Member for Devonport that whatever happens we must join in at the research and development stage.

A vast new technology will be provided from this research, continuing for the next few years. If Europe is not in it, it will become second class in all these important phases of advanced technology. We now have a real chance for co-operation because we can offer something. Europe is ahead in electro-optics and in some aspects of radar and particle beams. We can offer something in technological exchange with the United States. We must seize this opportunity.

I turn to economic strategy and I shall repeat to the House some of the words that I used in my presidential speech to the North Atlantic Assembly: We believe that it is increasingly evident that Alliance security is composed of three independent parts — political, military and economic. We have managed a broad consensus on the first two, but we have not even begun to approach consensus on economic strategy. NATO must have an effective resources strategy in spite of individual nationalism. For 10 years, a sub-committee of the North Atlantic Assembly, under the chairmanship of the hon. Member for Sheffield, Attercliffe (Mr. Duffy), has been meeting the armed services committee of the House and the Senate in Washington. We have made some progress, but once the military industrial pressures are exerted on the American Government, progress becomes slower and slower.

I will give some examples of lack of Alliance economic strategy. First, we sell the Hawk to the United States for naval training but we buy Brazilian aircraft for RAF training and so lose major European orders for weapons systems. Secondly, we insist on building Nimrod AEW instead of participating in the NATO AW ACS project, thereby losing millions of pounds. Thirdly, we go on talking about the European fighter aircraft, knowing that the French will sabotage the programme unless they get a major part in it. This has already happened with the Franco-German helicopters which the Germans will now get only in the mid-1990s, when they expected to get them in about three years.

NATO now has four main battle tanks—Challenger, Abrams, the MX and the Leopard 2. Any commander of NATO will say that he would take any one of the tanks, but only one and not four, with different weapon systems and different ammunition and all the supply difficulties that that will necessitate in time of war.

I will give two more examples. We have the best lightweight torpedo in the world in Sting Ray, which the United States navy will not touch. America is inventing its own advanced lightweight torpedo, which will not be ready until the mid-1990s. Meanwhile, they have obsolete lightweight, air-launched torpedoes for the rest of this decade.

Furthermore, I am told that our latest aircraft, the Tornado, cannot re-arm on German airfields, and that the German Tornados cannot re-arm on British airfields. I hope that this is not true, and I hope that this point will be dealt with in the winding-up speech.

No one can deny that an Alliance economic strategy is essential. Industry is prepared to co-operate, but European Governments—I am not talking about our Government —put nationalism first and may well lose world war 3 should it ever come about. At present, they are losing billions of pounds in duplicating research and develop-ment. As the Select Committee on Defence has pointed out, "structural disarmament" will play havoc with our forces in the next few years. All this is in spite of the fact that the NATO nations have a gross domestic product two and a half times that of the Warsaw pact. My right hon. Friend the Secretary of State has already taken a number of steps in the right direction in trying to get an Alliance economic strategy, but I think that he will agree that the Alliance has still a long way to go.

On the maritime strategy, I am glad that the Government are maintaining their promise to continue a force of 50 frigates and destroyers, but that means that, with no reserves, only about 42 to 45 will be operational at any one time. As has been said, to keep a total of 50, three type 23s must be ordered each year. My right hon. Friend the Secretary of State has confirmed that this will be done, but when will it start? That is the key to the problem. We have not yet ordered the first of the type 23s. When will that be? Some say that it will be two years hence, and if that happens we cannot maintain the promised frigate force.

I have another question that would probably be better asked tomorrow. Why are we not ordering more Goalkeepers instead of the Vulcan Phalanx, particularly for the batch III type 42 destroyers? They have a greater range and are more effective than two Vulcan Phalanxes. I should like to see them in our aircraft carriers. As the Secretary of State will know, I have been pressing for years for Seawolf. I am very pleased that they will be in the type 23s, but I believe that our aircraft carriers still lack proper protection, and I should like to see Seawolf mounted on sponsons in our aircraft carriers.

Amphibious warfare ships had almost been phased out, and then came the Falklands campaign. Without Fearless and Intrepid, the Falklands campaign could not have been mounted. Those who are interested in amphibious warfare and know something about it have a right to be heard in this House. A decision on their replacement should be made this year. If a decision on replacing Fearless and Intrepid is not made this year, my fear is that there will be further procrastination. If the fears of hon. Members on each side of the House that there is to be retrenchment in defence expenditure are well-founded, we shall never get those replacement vessels, and that will be disastrous for maritime nations such as Britain. It will also be disastrous for NATO policy on the northern flank.

Some years ago, in answer to a question in this House, I was told that there are only three hards in northern Norway where roll-on, roll-off ferries can land, so we have to have amphibious ships to land Royal Marines or soldiers on the northern flank. I hope that my right hon. Friend will once again study the lessons of the 1940 conflict in that part of the world.

I suggest that the next five years will be dangerous years. Defence should not be cut but expanded; otherwise we and our children will suffer the consequences. Should we ever have the misfortune to have a Socialist Government again, it is clear from their amendment today that we would be out of NATO and well on the way to becoming a Soviet satellite.

6.21 pm

Mr. John Silkin (Lewisham, Deptford)

In one respect the House owes a debt to the hon. Member for Beverley (Sir P. Wall). Despite my disagreement with his analysis, his speech, like the admirable speech of my right hon. Friend the Member for Llanelli (Mr. Davies), attempted to give us an overall strategic view, and the first day of the White Paper debate should in particular concentrate much more on that aspect.

I remember the Secretary of State, when I had the pleasure of shadowing him a little while ago, promising that he would give us this year an overall philosophical commentary; he was not prepared to do it last year. I found it notably lacking in his speech today.

I shall start not with the future but with the past. Five weeks ago today we were celebrating the 40th anniversary of VE day, and inevitably those of us who took part in the second world war felt the stir of old memories. I remember that on VE day, when the Japanese launched a particularly violent kamikaze attack upon our ships in the Pacific war, my leading telegraphist, who had been listening to the BBC, turned to me and said, "Do you know, sir, it's a public holiday in England."

It is all very well to boast, as the defence White Paper does, that we have had over 40 years of peace in Europe. That, in a sense, is Europe's public holiday, but in a very real sense our public holiday has been paid for by turmoil in other continents.

In the White Paper, the first section, headed "Forty Years of Peace", says about the second world war: "it had begun in Europe but engulfed the world." Let us get our history right. The second world war effectively started in Asia, when the Japanese invaded Manchuria in 1932, and it spread to Africa when Ethiopia was invaded by Mussolini in 1935. The European engagement was the sequel to those acts of warfare in other parts of the world. If we look at things from that perspective, the boast of 40 years' peace becomes startlingly irrelevant.

Since the second world war there have been 140 armed conflicts in other continents, all of them continents in which the Third world dominates, and it does nobody any good to boast of our public holiday while the poor and the weak of other nations are paying the price for our complacency. Taken at any level, surrogate wars fought by the clients of the super-powers in the poorer parts of the world may yet escalate into life and death struggles by Europeans, just as the invasion of Manchuria by the Japanese empire led inexorably to the domination and destruction of Europe itself.

The peace of Europe has to rest on something much more than the reltive strength of NATO or the Warsaw pact. Over 50 years ago, Winston Churchill warned: A United States of Europe might revive on a scale more terrible the rivalries from which we have suffered so cruelly in our own age. A day of fate and doom for men will dawn if ever the old quarrels of countries are superseded by the strife of continents. Churchill's day of fate and doom has already arrived. It is so much part of our lives that the military strategists see it as a safe and stable system. It is not a healthy system; it is Orwell's 1984 in embryo. But the trend continues, assisted as it is by high technology. As the rivalries between the super-powers and their super-blocs become more intense, so too does the spread of the weapons of high technology to the Third world. It is not the technology of peace, of peaceful industrialisation, but the technology of warfare. In that, the clients of the super-powers can boast a scientific expertise unknown in history.

The tragedy is that the vast regional military alliances have not made the world more secure; they have contributed to the increasing danger in which all of us find ourselves. If we are to protect ourselves, every nation— particularly every small nation—in the world has to be protected, too. Therefore, there remains a role for the United Kingdom well outside NATO, not as an imperial power but as the friend and safeguard of smaller nations. But such a task is too great for one country alone. It is here that the United Nations should be playing a much fuller part. If it is not doing so, some of the responsibility must rest with us.

We have a tolerably good record, under successive Administrations, of response to United Nations' resolutions and requests. We have not so good a reputation in creative thinking or in assisting the United Nations to make the kind of change that Dag Hammerskjold, for example, would have wished.

Yet high technology today could be playing its pan in giving the security that smaller nations require. The French, for example, are very keen on pressing forward the idea of UN surveillance satellite systems. They would have the beneficial effect of ending the monopoly powers of the United States and the Soviet Union. They would give even the smallest member of the United Nations the same access to satellite intelligence as is now available to the super-powers.

The tragic absurdity of the present position was well illustrated during the Falklands war. It is said that the United Kingdom was dependent for much of its intelligence upon the United States satellite intelligence, while at the same time the Soviet Union, with its own satellite military intelligence, was supplying the Fascist junta in Argentina. The same generous assistance is available for the clients of the super-powers in the Middle East, in Africa and in Asia—but only, of course, when the super-powers deem it wise to do so. This can have tragic consequences, most notably in the 1973 Middle East war.

Would the 1973 war have even started had not the Americans denied intelligence on Arab troop movements to the Israelis? Once started, it could certainly have been stopped sooner had President Sadat known the true position of Israeli forces in the Sinai. It was that ignorance that led him to turn down a peace proposal from Dr. Kissinger. The war continued and more men died.

It is time that, as part of our own defence policy, we were encouraging the United Nations to develop along the lines that the French have suggested. If such items of intelligence were available to all UN nations equally, the world could be spared many of its tragic conflicts, and the power of the super-powers cut down accordingly. But we should go further. We should be encouraging the provision of permanent United Nations peace-keeping forces to prevent all dangerous military developments and to take action when necessary.

As everybody knows, a peace-keeping force is envisaged in the charter itself. Of course, the apologists for the super-powers will tell us that it is not practical; that the Soviet Union and United States would be so fearful that UN forces would be used against them in their acts; of aggression that they would veto any such proposal. The super-pessimists would add that the cost of keeping millions of men under arms is so high that none of the possible paymasters would be willing to foot the bill. In fact, the cost is much less than was originally envisaged, since we are talking about a relatively small force capable of rapid deployment for use in damping down the fires of small armed conflicts before they burn up a whole continent.

In this way, the Security Council veto becomes an important safeguard, since it enables the super-powers to feel that their existence is not threatened. Small forces of this kind could easily operate from strategic areas all over the world, including the Falklands, Belize, Gibraltar and many other colonial and former colonial territories to which importance was first attached because of their strategic position but whose economic future is in doubt. Of course, this will not bring perpetual peace. As Thomas Jefferson said: An association of men who will not quarrel with one another is a thing which never yet existed, from the greatest onfederacy of nations down to a town meeting or a vestry." Quarrels do not have to lead to war, and it is with the elimination of war that defence is directly concerned.

Until the world is prepared to trust its own global institutions to preserve peace, nations will have to look at their own defences, either in concert with others or, where necessary, alone. Whether as a member of NATO or, in its global role, as part of the greatest association of nations — the Commonwealth — or in defence of its own territory, Britain must look to her maritime capability. It is here also that the defence White Paper is so worrying. In paragraphs 458, 459 and 460, the defence statement implies that our Merchant Navy is sufficient to meet all our defence needs. By studying the wording carefully, one sees that it is even doubtful that the Merchant Navy meets our NATO obligations. We have been told that an internal study began in 1984, although we have not been promised that the study will be published.

Could the magnificent part played by the Merchant Navy during the Falklands war be repeated 8,000 miles from our shores? Many of us doubt it. Could the Merchant Navy ever feed and supply this island in a prolonged war? Many of us doubt that too. We must remember that the highest rate of casualties of all the belligerent forces in world war 2 was suffered by the Merchant Navy—one in three did not come back alive. We ignore our Merchant Navy at our peril.

What applies to the Merchant Navy applies in equal measure to the fishermen; yet, of the five trawlers that took part in the Falklands war, only two now remain in British ownership. The statement says: with the exception of large deep-sea trawlers for MCM operations, there are sufficient ships in each category to meet our defence needs. Even ignoring the conclusions of the Defence Committee's report, that is a pretty large exception.

I hope that Britain will play its part in leading the world to a saner and more peaceful future, but, whatever our future role may be — as a supporter of the United Nations, as a member of NATO, in defence of the Commonwealth or alone—it remains true today, as it always was, that our safety chiefly depends upon the men and ships of our country. That is what the Secretary of State for Defence has neglected, and therein lies the major weakness of the defence White Paper.

6.33 pm

Sir Edward du Cann (Taunton)

The background to this debate are the Defence Estimates, in the massive, well-argued and well-written White Paper, and the third report of the Select Committee on Defence, chaired by my right hon. Friend the Member for Spelthorne (Sir H. Atkins). My right hon. Friend and his colleagues have done the House a great service in their admirable analysis. I hope that I do not offend the right hon. Member for Plymouth, Devonport (Dr. Owen) by saying that he got the matter exactly right in pointing out that the financial questions raised by the third report must be answered. If there is one Secretary of State who is capable of handling this difficult matter and the escalation of costs, it is my right hon. Friend the Secretary of State for Defence. We wish him success.

Select Committees are very much at their best when they concentrate on the financial aspects of the Government's actions. If we who are privileged to be the representatives of the people wish to exercise some control over the Executive, we can do that best by concentrating on the financial results of the Executive's proposals. The fact that my right hon. Friend the Member for Spelthorne and his colleagues have been concerned with this point is a healthy and admirable sign.

The speech of the right hon. Member for Llanelli (Mr. Davies) was muddled in the extreme. It must be difficult to be an Opposition spokesman on defence. Apart from that, the only part of the debate so far which I have not understood was what followed from the speech of the right hon. Member for Devonport. Again, I hope that I do not offend him by agreeing with him. I thought that much of what he said was cogent and important, but I fail to understand how he squares it with his alliance with the Liberal party. The SDP and the Liberal party seem to be not merely poles apart but worlds apart in their approach to defence. It was engaging to watch the right hon. Member for Devonport being cheered on by the assembled cohorts of the SDP—there are at least four of them here — while the Liberals behind him sat in embarrassed silence. While the alliance is divided on this important matter, I fail to understand how they can present themselves as an alternative Government or even, as they modestly beg to do, as possible partners in a political compromise at some time in the future.

Mr. Paddy Ashdown (Yeovil)

Will the right hon. Gentleman give way?

Sir Edward du Cann

The hon. Gentleman will have an opportunity to speak in a moment. We shall look forward to hearing him.

Mr. Ashdown

Give way.

Sir Edward du Cann

I give way to the hon. Gentleman.

Mr. Ashdown

I am grateful to the right hon. Gentleman for giving way. Will he cast the mote from his own eye? Does he not recognise that there are substantial differences within his party on defence—for example, the Conservative party is by no means united on the Trident issue. Does that not reveal significant problems within the Conservative party, from which he wishes to turn our attention? Will he recognise that the differences between the SDP and the Liberal party on defence are significantly fewer than the differences in either of the other two parties?

Sir Edward du Cann

I hoped, by refusing to give way immediately, to save the hon. Gentleman from making an ass of himself. There are no differences in the Conservative party with regard to defence. We agree with the right hon. Member for Devonport that it is appropriate to examine alternatives. Of course all the options must be considered all the time. It is the business of government to be pragmatic, to be ready to examine alternatives if necesary. The Liberal party wants unilateral disarmament—

Mr. Ashdown

Nonsense.

Sir Edward du Cann

—and the SDP properly professes that Britain should be sensibly defended. The conflicts between the two parties are vast. It is no good pretending otherwise.

Like the right hon. Member for Lewisham, Deptford (Mr. Silkin), I wish to make two points. One is a local point, to which the first report of the Select Committee on Defence referred — by a curious irony that report was published after the Select Committee's third report—and the other is an international matter. The first point relates to the Merchant Navy. The substantial and continuing decline in the British merchant fleet puts the British economy, in peace as well as in wartime, in deadly peril. I believe that action to remedy the position is overdue and urgently needed.

In paragraphs 458, 459 and 460, the defence White Paper made three important statements on the Merchant Navy. It said that a continued reduction in the fleet's size "could" endanger our ability to fulfil our NATO obligations. As the right hon. Member for Deptford said, that commitment is in jeopardy today. The White Paper stated: with the exception of large deep-sea trawlers for MCM operations, there are sufficient ships in each category to meet our defence needs. I believe that statement to be, at best, highly questionable and, at worst, untrue. The United Kingdom fleet consisted of 686 ships at the end of last February. Ten years ago, at the end of 1975, there were 1,600 ships. The deadweight tonnage last February was 18 million. Ten years ago it was 50 million. The latest bulletin of the General Council for British Shipping states: no major change is seen in the rate of decline in the United Kingdom fleet, which, since 1978, has been about 100 ships per annum. In wartime, the merchant fleet has special tasks. Apart from bringing to the UK essential cargoes — energy, food and raw materials—it has other duties, such as the reinforcement and resupply of our forces, the need to provide ships for special military tasks in support of the Royal Navy and as, as they say, "forces' multipliers" to add to the Navy's strength. There are also auxiliary tasks. If there were a conflict, heavy losses would have to be made good. They have been estimated at between 40 and 50 per cent. initially.

In terms of numbers of ships, tonnages and classes of vessels, what is required can easily be quantified. Thus, we are speaking of facts; we are not dealing in abstruse calculations. We can calculate easily and quickly what we need and what we have, and the conclusion is inescapable. In wartime, Britain would have too few ships to support a war economy and supply and reinforce our forces.

I have not commented on the shortage of seafarers, of personnel. The present total of those at sea is about 40,000. In 1939, the year war broke out, the number was four times that, about 159,000. The number of trained officers and men going ashore has now reached 5,000 a year. Again, this is fact, and it is much to be regretted. So, even if the required number of ships could be found— say, by requisition, charter or purchase — there is the gravest doubt whether sufficient numbers of trained men would be available to man them, and shortly we shall have no reserves of manpower.

An immediate matter was referred to by the right hon. Member for Lewisham, Deptford. If there were, next week, another Falklands conflict—which we pray there will not be—it is unlikely, as the right hon. Gentleman said, that Britain could find the merchant ships necessary. This morning's Lloyd's List contains news of another old Falklands ship being sold. That is a measure of the recent decline in our country's maritime strength, and it is continuing.

Inadequacy in time of conflict is serious enough. In peacetime the implications are equally horrendous. Employment in the industry, as I have illustrated, continues to fall. There is a smaller contribution to the balance of payments than there should be—currently £1 billion a year, with import savings in addition, although that is not a small sum by any means.

Employment in associated industries is increasingly at risk. Insurance, charter through the Baltic, engineering, ship design, ship repair, shipbuilding and electronics are all involved. Worst of all, British exporters and importers are now increasingly dependent on their competitors' fleets.

The White Paper's third important statement affecting the Merchant Navy was that factual studies into the situation would be completed this summer. It repeated, in effect, what the Minister of State said in a debate on the Royal Navy on 29 November last year, as many hon. Members now present will recall. How is that study progressing and when will it be completed?

I hope that my right hon. Friend will agree what Ministers so far have not been willing to agree, that when it is available it should be published. The subject is of such importance that we need the widest possible debate on it so that we may propose remedies. If my right hon. Friend the Member for Spelthorne and his colleagues could produce this admirable document in a matter of weeks, I do not see why we should have to wait any time for the Government's report to be ready. The situation is so grave that, as I have suggested to her, the Prime Minister should appoint a single Minister to oversee the present situation and to propose remedies.

What is so worrying about my right hon. Friend's Select Committee report is that it discloses a complete lack of clarity and purpose on the part of Ministers. It appears that this subject has been relegated not just to the second or third division but to the fifth or sixth division. It should be brought up to the first division.

The report finally refers to the risk to national security inherent in loss of independence in the carriage of seaborne commerce. It suggests that it would be dangerous should this country become vulnerable, because that would be a temptation to a would-be aggressor. It states: The striking contrast between British, and indeed Allied, maritime resources and those of the Warsaw Pact countries, in inverse proportion to the relative dependence of each alliance on sea communication, is extremely disturbing". I am surprised that my right hon. Friend used such moderate language because, as the White Paper points out, the Soviets have moved from being a coastal to a blue water force. The Soviets have now overtaken Britain and the United States as a merchant shipping power. In the early 1970s, the United Kingdom had about twice the merchant shipping of the Soviet Union. By the 1990s, the Soviet fleet will be twice the size of the merchant fleet of the United Kingdom, and all those serving in it will be auxiliaries for the Soviet navy. The situation is extremely serious and we must deal with it. To paraphrase what Churchill said in another context, we need and shall demand action this year.

There is a parallel with the state of the merchant fleet in the deplorable state of the British air cargo industry, in which I have an interest, which I have previously declared to the House. I have raised the subject on a previous occasion. I never understand why it takes us so long to see what is going wrong with our merchant fleet and appreciate our lack of carriers in the air. On a parallel point, I hope that my right hon. Friend will ensure that an early decision is made about the Army's need for helicopters. Westlands is badly in need of work. In addition, it has the ideal solution in the W30 helicopter. I hope that my right hon. Friend will see that an early decision is made about that, too.

The other main point that I wish to raise also parallels what the right hon. Member for Lewisham, Deptford said. It concerns the nuclear threat to peace. The right hon. Gentleman was right to say that large conflicts often begin from smaller incidents in faraway places which we in this country may not take too seriously. He was also right to point out the great dangers that derive when surrogate wars are being fought. The Soviets do that all the time, particularly in Africa. Angola is a notable example. One could give others.

Much popular anxiety relates to the apparently implacable positions of East and West—indeed, that is the theme of the White Paper — with the tyrants confronting those who live in freedom and who are prepared to defend it. My right hon. Friend spent much of his speech on that point. Most attention, therefore, is focused on negotiations between the Soviets and the West for limitations or reductions in the nuclear strength of both, and it is right that that should be the case.

At the extreme end of the argument there are those who propose that our country should unilaterally abandon its nuclear defences altogether. The Liberal party does that, apparently. There is a precedent in contemporary experience, for this argument. We had it during the time of Hitler's rise to power in the years before 1939, with frightful consequences. There was, among other factors, the expressed longing of the British people for peace, of which one could give many examples — the notorious Oxford debate, the Fulham by-election in 1933. That longing for peace, though honourable, undoubtedly led the Nazis to believe that they would be safe in pursuing aggression in the Ruhr, Austria and Czechoslovakia and that there would be no opposition in Europe. Our inaction, as we now know, was a fearful error. The White Paper is right to remind us of a lesson that too many people are ready to forget. I hope with all my heart that we have learned that lesson.

I believe that, just as the use of the nuclear weapon in 1945 shortened the war against Japan, to which the right hon. Member for Lewisham, Deptford referred, and saved many tens of thousands, if not hundreds of thousands, of British, American, Australian, allied and Japanese lives, so the possession of nuclear weapons by East and West has kept the world safe, in most of my adult lifetime, from serious conflict. That point was made by my right hon. Friend the Secretary of State for Defence, and I agree with it. I do not believe that their possession by East and West —even though their stockpiling is worrying—has made conflict more likely. The chief threat, in my view, lies elsewhere and it is high time that we gave it more attention. It lies, in a word, in proliferation.

What are the facts? The spread of nuclear technology since 1945 has been extensive and it is continuing unchecked. Five countries are known to possess nuclear weapons: Russia, the United States, the United Kingdom, France and China. However, there are commercial nuclear power reactors—about 350 of them—in 26 countries. More than 50 nations have nuclear research facilities. Perhaps a dozen countries can physically reprocess nuclear fuels; that is, they have the capacity to produce the materials needed to make nuclear devices. The areas involved are often potentially, in conflict terms, the most volatile: Pakistan and India, to which the right hon. Member for Llanelli referred, Iraq and Israel, and Libya, for example. Inevitably, too, there is the lurking spectre of the nuclear terrorist. It is to this developing and fearsome scene that I believe that we should now give our careful attention in the nuclear debate.

The United Nations sponsored nuclear non-proliferation treaty of 1968, mentioned in the White Paper, expires in 1995. It will be discussed in Geneva in the autumn of this year by almost 100 countries. It must be renewed. The inspection apparatus of the International Atomic Energy Authority needs urgent reinforcement. That strengthening must be made available and confidence in its competence, which at present seems to be much lacking, restored.

The whole purpose of the expenditure which these Estimates represent is the maintenance of peace. The influence and experience that, as the right hon. Member for Lewisham, Deptford suggested, we possess in our country and which this House, broadly speaking, endorses, should not only be used for the physical defence of these shores—that is the conventional understanding of defence — but must be used more widely and constructively to curtail proliferation of the nuclear capability and to control it.

I hope that the work that my right hon. Friend the Secretary of State for Defence is doing will provide the foundation upon which the Government can build and take the initiative in what I believe to be as important a matter as any that has to be discussed, decided and acted upon by this House.

6.54 pm

Mr. Robert C. Brown (Newcastle upon Tyne, North)

The right hon. Member for Taunton (Sir E. du Cann) will forgive me if I do not deal with his speech in detail, but I was extremely interested in the amount of time that he devoted to the Merchant Navy. He was right to do so. If I understood the right hon. Gentleman correctly, he suggested to the Treasury Bench that it was high time that we as a maritime nation had a maritime policy and a maritime Minister. If he did, he has my full support as he prods his Government from time to time. I wish more power to his already powerful elbow.

I begin my contribution to the debate by quoting from the personal message I gave my constituents in Newcastle upon Tyne, North during the last general election campaign: The awful prospect of a nuclear holocaust appals every thinking person. We must, in concert with our allies, work towards multilateral disarmament, nuclear and non nuclear. We simply cannot afford to embark on the Trident missile programme costed at 1981 prices at ten thousand million pounds, which, with the enormous escalation of sophisticated weapons systems, I know from my experience, will cost no less than 50 per cent. more, long before the system is ready for use. The only way in which we could afford such a programme would be to deny the British Army of the Rhine the weapons they would need should the unthinkable war in Europe happen. Equally, the Royal Navy, on which we rely to keep the Western approaches and the Northern Atlantic open to our merchantmen, would have to be run down as indeed the Tories intended prior to the Falklands War. Had Argentina stayed her hand for a few brief months, the planned naval rundown would have already gone so far as to make the action we rightly took, impossible to carry out. I do not retract one word of my message two years ago to my constituents on Trident. It was prophetic, because the escalation in cost to which I then referred was achieved in 24 months. Nobody can say that as a prophet I was exaggerating. My prediction of an increase in cost of over 50 per cent. before Trident comes into use has already been proved to be very much of an underestimate. The final increase in cost will be much nearer 100 per cent., or £20 billion. I stand firmly by everything that I said in 1983. The third report of the Select Committee on Defence heavily underlines all the points that I made to my constituents in 1983. I am more than delighted that my 1983 statement on defence issues has been supported by such an august body as the Select Committee on Defence. The whole House is indebted to it for the excellence of its report.

In its reports, the Select Committee states that there is the gravest possible threat that our conventional defence forces will be weakened if this Government continue down the lunatic road towards the deployment of a nuclear weapons system that we cannot hope to sustain within the constraints of our defence budget. And constraints there are. I am sure that, like each of his predecessors, the Secretary of State for Defence is only too painfully aware of these constraints. Apart from the perils of inflation for the defence budget there is, as he knows, the added burden of defence inflation which applies in full measure not only to the Trident programme but to all of the sophisticated equipment that is needed by our troops in the field.

That problem worries me most of all because, as I have said many times in defence debates, the sharp end for the British forces will be the central German plain. Our prime duty is to provide our forces there with the quality and quantity of hardware and software that they will need to ensure, by their own defence, the holding of that part of the front, which is so vital for the defence of Western Europe. That is where any conflict will take place, and that is where our commitment should be emphasised.

Therefore, why should we risk our forces by committing an ever-increasing amount of our limited defence budget to pursuing the Trident system, whose major purpose is to send American defence contractors laughing all the way to the bank? British contractors will get precious little from the thousands of millions of pounds that will be spent on the programme.

Naval orders will have a great influence on the well-being of many of my constituents employed by British Shipbuilders. I am anxious to know how, when and where those orders will be placed, and how the orders will be used. I must ask bluntly—I hope that the Minister who will reply to the debate will take this point on board— whether orders will be used to make some yards attractive to private investors for what I would call the Prime Minister's obsession—privatisation. Conversely, will the denial of orders be used to decide which yards will be set up for closure? The Secretary of State has the power of life or death over shipbuilding communities, as Mr. MacGregor does over coal-mining communities. The Secretary of State frightens me, because he is essentially southern-based and does not see much further than Potters Bar or, to be fair to him, British Aerospace at Hatfield and Welwyn Garden City.

I have said in the House previously that shipyards such as those on the Tyne, not least Swan Hunter, cannot survive without significant naval orders. I hope that the Secretary of State will, in reaching decisions in the future, remember that the north-east of England has largely been bled to death by the Government's policies. Those decisions will determine the future of or continuance of shipbuilding on the Tyne.

I should say something about President Reagan's star wars—the strategic defence initiative. To his credit, the Foreign Secretary quickly saw the dangers in undermining arms talks between East and West but, sadly, since "Her Parliamentary Majesty" has now spoken, Britain will back the President in research into star wars. Nothing could be more calculated to signal a move into another major arms race, which is not the way to world peace. With all the horror of the Third world, which we have seen on our television screens with monotonous regularity in recent months—the starvation of many thousands of children in Africa—there is a greater need than ever for nation to speak unto nation with a determination to find a way to break the lunacy of ever-increasing expenditure on arms. We must progressively, in tandem, reduce the burdens of armaments on East and West so that we may make progress on the road to a world where the constant fear of war no longer prevails.

7.4 pm

Mr. Cranley Onslow (Woking)

I am glad that the right hon. Member for Plymouth, Devonport (Dr. Owen) is still in the Chamber, because I owe him an apology. We all know him as the inventor of the wheel and the holder of the original patent on sliced bread, but of course we should not laugh at him, and I am sorry that I was moved to do so during his speech. When he mentioned being in a serious ball park, I asked one of my hon. Friends sitting beside me, "What does one talk about in a serious ball park?" His answer was so apposite and humorous that I had to laugh out loud. The right hon. Gentleman will probably work out what my hon. Friend's reply was, and I am sure that my hon. Friends will get there presently.

My right hon. Friend the Member for Taunton (Sir E. du Cann) told us of his doubts about the adequacy of the British merchant fleet to meet the strains that might be put on it in time of war, as well as the obligations and opportunities to which it must respond in time of peace. I understand and accept that my right hon. Friend the Secretary of State could not reply today to the report of the Select Committee on Defence. I also know some of the reasons for the decline to which my right hon. Friend the Member for Taunton drew attention. They include the deliberate policy adopted for many years by the Eastern bloc of trying to steal our trade; the activities of previous Governments in lending money to Eastern bloc and Third world countries so that they could buy ships to undercut our merchant fleet; and all the other pressures, including the 40-40-20 policy. I am not sure that the decline is reversible. It would be interesting to know what it might cost to reverse it.

Against that background, we must consider maritime re-supply in time of war. The alternative of pre-positioning food and fuel for the civil population as well as of warlike stores for our forces must be examined, and we should also consider the priority of airlifting many of the stores that we need. I hope that when the Department has received its consultants' report and when Ministers report to the House on it, they will take those points into account, because they may open the way for the redeployment of scarce naval surface resources that we have available in the north Atlantic.

Whatever happens with re-supply, it is essential that our home base should remain inviolate. Home defence is enormously important. I was glad to see in the White Paper that exercise Brave Defender will be held this September, in which our home defence forces will be tested. I hope that as many Members of Parliament as possible will be invited to witness that exercise. I am far from certain that our home defence resources are adequate. I do not know how many vital installations we have, but I suspect that there are enough to tax the 100,000 regulars and reservists whom we are told we have available, let alone the 65,000 of them who will take part in the exercise.

I hope that the Government are serious when they say that they are considering the possible expansion of the Home Service Force, which at present has only 5,000 members. That really is not enough. If the Select Committee were to examine the matter, I suspect that it would discover that, in the words of my right hon. Friend the member for Spelthorne (Sir H. Atkins), plenty of people in Britain regard defence as "everyone's business", and would be prepared to give up some of their time voluntarily to release our invaluable regular service men and women for other tasks and to strengthen our ability to keep the home base secure.

The reasons why we must do that are admirably set out in paragraph 410 of the White Paper, which states: The importance of defending the United Kingdom goes beyond even the fundamental need to protect our own country and its people… it is therefore in the interests of the whole Alliance that we should be capable of deterring such an offensive or, if it were launched, of defending ourselves and our territorial waters against attack. We must have adequate home defence.

The Labour party's policy would destroy the Alliance and thus make home defence irrelevant. The policy is well expressed in the following terms: we have an Opposition who are committed to outright unilateral disarmament. The United States is to be kicked out of our aircraft bases and ports in the UK which they have been using as part of our NATO commitment to the nuclear deterrent. I am paying the right hon. Member for Devonport the compliment of quoting from a document which seems to have been circulated by the SDP to most of the 14-year-olds in my constituency. It is rather like some of the circulars householders get on solar heating—superfici-ally convincing, but not at all strong on costs. But that is the SDP's policy in a nutshell.

Two things emerge from what the right hon. Gentleman said. First, it is impossible to envisage the SDP combining with the Labour party in a hung Parliament. It is also wholly impossible for the right hon. Gentleman or his hon. Friend the Member for Yeovil (Mr. Ashdown) to pretend that there is not an enormous divide within the so-called alliance on the question of defence. Indeed, the right hon. Gentleman is not too clear about what he himself wants. He simply throws a whole lot of options in the air— some serious balls, if I can put it that way — even though he knows that they are all dismissible. For example, there is the question of continuing with Polaris or converting our submarines to cruise. The right hon. Gentleman never quantifies or costs these things. He just tosses them in the air. In so doing he displays the same kind of naivety that runs through so much of the SDP's approach to often serious matters.

For instance, on the Falklands, the document from which I have already quoted states: the SDP believes that the Government should bring an end to the spending of hundreds of millions of pounds on Fortress Falklands and should open a dialogue with the new democratic government of Argentina. And if they did, it would be from a position of utter weakness. Just about the same strength is inherent in that position as there would be if we went to the French and said, "May we please you join you in your M5 missile?" That is an incredibly naive and unsustainable approach to such serious matters. When people consider what the SDP has to offer, I hope they will realise that solar heating might actually be a better bargain.

There is one final matter that I hope the Government have understood. It is the RAF that is responsible for the air defence of the United Kingdom—not the French air force. If we are to purchase a replacement aircraft for our air force, it must match our needs. Such a purchase should not be dictated by the siren claims of European collaboration or the ambitions of the French aircraft industry in the field of international sales. We need an aircraft that suits the RAF, and a British design must be best.

Several Hon. Members

rose—

Mr. Speaker

Order. I should have reminded the House that the 10-minute rule is operating until 8.50 pm.

7.11 pm

Mr. Eric S. Heffer (Liverpool, Walton)

The White Paper was right to refer to the fact that it is 40 years since the end of the second world war. I mention that because it seems that the strategic attitude of the Government, the United States and the western Alliance is automatically to assume that the only enemy in the world is the Soviet Union.

Since my youth I have never agreed with the internal regime in the Soviet Union. I have protested probably more than most hon. Members about the internal suppression of those in the Soviet Union who want to create free and independent trade unions and institutions and wish to see democracy in that country. I was probably the first Labour Member to protest about what happened when the Soviet Union moved into Afghanistan. I protested about Hungary and Czechoslovakia. I shall continue to make it absolutely clear that the internal regime in the Soviet Union has nothing whatever in common with democratic Socialism. Indeed, it is the very antithesis of what we believe in.

The commemoration of 40 years of peace has stirred old memories. I was very young when I joined the RAF. During my four years in that service I spent 18 months with the United States 8th Army Air Corps. I wish to make it clear that today we are able honestly to debate and argue our points of view because of the deaths that unfortunately occurred during the war. As well as our own people, 20 million Russians died. We must never forget that, nor should we forget the devastation that took place in that country.

We must never forget that their cities were razed to the ground, that whole areas were overrun by the Nazis and that the Russian people were subjected to untold horrors. We must never forget that millions of Russian people were sent to the various prisons and concentration camps. We therefore owe a debt to those people in the Soviet Union who fought so hard to enable us to be free.

At the end of the war the Soviet Union became obsessed with security. It created buffer states, suppressed the democracy that was beginning to develop in many of those countries, and has expanded in other directions since— all because of its obsession with security and the belief that never again will 20 million Russian people be destroyed.

There is now a new leader in the Soviet Union. Some say that he is a hard-liner, while others say that he is a soft-liner. I do not know. Indeed, it is difficult for any of us to know. When Khrushchev took over as leader—and he was not a democrat—he began to open the doors of the prison camps. He also made it clear that the Stalinist regime was not acceptable for the future. There are those who would like to return to Stalinism, but my point is that we cannot continue in the way that has been suggested by some hon. Members who say that the Soviet Union is the enemy and should be more or less destroyed. [HON. members: "No."]

In the event of a nuclear war there will be no winners. We shall all be losers. Arthur Koestler said that when the atomic bombs were dropped on Hiroshima and Nagasaki, the character of war changed totally and that from then on we were talking of the possibility of war which would destroy the world. That is the prospect with which we are now faced, and that is what we must understand. That must be borne in mind when we discuss our defence policy.

I agree with those hon. Members who have said that we must have genuine defence. I am not a pacifist. I believe in genuine defence. Those who believe that nuclear weapons are the only means of maintaining peace are honest in that belief, but they should accept that others who believe that we should get rid of nuclear weapons are equally honest. We are not Soviet agents or subversives. We simply believe that so long as nuclear weapons exist and we do nothing to get rid of them, we shall build them up until one day some idiot will push the button, and that will be the end of society for ever. All our ideological discussion about capitalism and Socialism or whether we are Christians or Moslems or anything else will mean nothing. That is why we argue our policy as we do.

The document setting out the policy carried at last year's Labour party conference states: We are also committed to the unconditional removal of all US nuclear weapons and nuclear bases from British soil and British waters … Labour will therefore take appropriate action to ensure that the US Government removes its nuclear weapons and nuclear delivery systems from British territory and British territorial waters. We are then accused of wanting to sell out to the Soviet Union and become a satellite of Russia, but that is not so. We are saying that we must begin somewhere to get rid of nuclear weapons. It would be marvellous if, at the international level, the great powers could sit down and agree that from tomorrow all nuclear weapons will be abolished, but as the right hon. Member for Taunton (Sir E. du Cann) has said, that is not likely to happen— what is happening is proliferation.

Somebody somewhere must begin the process of removing nuclear weapons. That is why my right hon. Friend the Member for Chesterfield (Mr. Benn) and I raised the issue of NATO.[Interruption.] It is difficult to argue a case properly when one is limited to 10 minutes. How many minutes do I have left? [HON. members: "One."] There is a contradiction about our policy and if we carry it through we shall undoubtedly run into difficulties with the United States and our allies in NATO, but we must face that fact because we must try to change NATO policy. If NATO policy cannot be changed, in the end we shall have to come out of NATO. In the process we must try to start to get rid of nuclear weapons so that our world, our grandchildren and their grandchildren will have a future. If we do not do that, there will be no future.

7.22 pm

Mr. Peter Viggers (Gosport)

I am glad to follow the hon. Member for Liverpool, Walton (Mr. Heffer) as my own comments will follow exactly the line that he followed. I am fully conscious of the difficulty of comparing forces as between the Warsaw pact and NATO. It is not easy to compare weapon with weapon. Nevertheless, by any standards the Warsaw pact forces are superior to those of NATO. We can make all possible allowances for Russia's traditional sensitivity about being encircled by potential enemies. We can make allowances for the fact that a staggering 20 million Soviet citizens were killed in the last war and for that country's determination that that should never befall it again. We can also make allowances for the technical superiority which still exists in many sectors of the NATO forces. After allowing for all those factors, however, the preponderance of military might in the Warsaw pact cannot realistically be attributed to self-defence. The threat is there and it is real. It is generally assumed that an attacker needs three times the forces of the defender to be successful in an attack and the Warsaw pact is within that range in a number of key areas such as tactical aircraft, tanks and artillery. NATO does not need parity. We have said time and again that none of our forces will ever by used except in response to attack. Nevertheless, we need to be near enough to the one-to-three relationship to be certain that we shall not be attacked and that there is no risk of our forces being underestimated. We cannot safely let the balance swing too far away from us. I therefore support the Government's action in increasing our spending by 3 per cent. per year in line with NATO targets, which we have achieved through to this year. I also strongly support the commitment to NATO by the United States in the deployment of cruise and Pershing II missiles in Europe and I support the continuation of the independent nuclear deterrent through the purchase of Trident.

A great deal of the sometimes rather fruitless dialogue about peace and how to achieve it stems from the fact that many people misunderstand the nature of peace and talk as though peace were something for which we should strive. I give a short but telling quotation from Henry Kissinger. He said: Many people seem to regard peace as a kind of terminal state in which nations live in harmony and the need for further effort disappears. Unfortunately this conception doesn't correspond to the reality. In our time peace is a process not a condition. There are no final happy endings. That is important, because so often people who campaign for peace seem to project peace as though it were some kind of secret, enchanted garden to which they alone have the key. The reality is quite different. Peace is what we have now. It may be a rather unhappy peace, but peace it is and we must work to maintain that measure of stability.

Maintaining peace is a time-consuming, expensive and frustrating activity requiring patience, skill and the avoidance of provocative acts. The true peace campaig-ners who keep the peace for us are the men and women of our armed forces. We are at peace, but various factors could destabilise the situation. I shall identify three of them.

The first is Russian militarism. I have already referred to the weight of the Warsaw pact forces, but the disturbing fact is that recently they have been growing much more rapidly. The deployment of SS20 missiles in Europe left NATO no alternative but to proceed with its dual track decision in 1979 and to deploy cruise and Pershing missiles. Cruise missiles are a symbol of American determination to support NATO rather than a matching of missile for missile. Russia must surely also realise, and the hon. Member for Walton must realise, that launching a new submarine every five weeks when Russia has no maritime routes to protect cannot be regarded otherwise than as an offensive act and something from which the Soviet Union should desist.

As the hon. Member for Walton said, we are all heartened by the appearance of Mr. Gorbachev as the Russian leader. His interest in industrial and civilian matters in this country was encourging, but there have been no signs of any change in ideology and it may be asking too much to expect that. What we can perhaps hope and negotiate for is a reduction in the military manifestations of that idealogy, and I believe that that is entirely appropriate.

Recently I had the honour to attend a conference on disarmament convened in Mexico City by the United Nations and the Inter-Parliamentary Union at which most of the leading nations of the world were represented. I was surprised to see how few friends Russia had among the non-aligned countries. It is bereft of friends, apart from those countries which are politically subservient to it. That should be encouraging to us as a democracy and it should give Russia cause for thought.

The second destabilising factor is identified in the public mind as the strategic defence initiative, star wars. The United States and Russia are both working on new technology, but the media concentrate on the American efforts. Russia has the world's only operational anti-ballistic missile system, which defends the Soviet civil and military command authorities around Moscow. Russia has also been proceeding with a much larger high-energy laser programme than the United States, with about 10,000 scientists and engineers working at six research establishments, and Russia has developed prototype laser weapons. Moreover, 80 per cent. of Russian space launches are purely military. The United States and the United Kingdom cannot stand aside from this new technology.

I support completely the considered and thoughtful line taken by my right hon. and learned Friend the Foreign Secretary in his major speech on this subject. I should like to add only that the strategic defence initiative is defensive as regards ballistic missiles and it may have many other applications which do not relate to nuclear and ballistic weapons. I anticipate that the strategic defence initiative will throw up a great deal of technology which will be extremely useful with conventional military weapons.

The third destabilising factor is those who work from within the country to weaken our defences. Some people who are concerned with pacifist issues and anti-nuclear campaigning are non-political, though any person of independent mind would be disturbed to find so many Communists and Trotskyists working within the Campaign for Nuclear Disarmament and allied activities. CND is active in trade unions, churches, schools and local government.

There are many examples of local government activity, such as the development of nuclear-free zones, which are hostile to the basic thrust of our defence strategy. I could quote many examples, some of which are trivial and others which are frivolous. For example, South Yorkshire county council has erected 21 nuclear-free zone boundary signs at a cost of £100 per sign, and Sheffield city council sent a councillor and two officers by air to an international conference on nuclear-free zones in Cordoba, Spain. Such activity goes on throughout Europe and I therefore welcome the fact that the North Atlantic Assembly is considering means of stepping up our information services in NATO so that people in NATO can see the importance of the defence effort put in on their behalf.

I was impressed by my right hon. Friend the Member for Spelthorne (Sir H. Atkins) who spoke about the total defence concept in Norway and Sweden, where everyone is responsible for defence. We do not have such a policy but we cannot afford to relax when so many of our citizens undermine the main thrust of our defence effort. I believe that we are winning the battle, but we cannot afford to be complacent.

7.32 pm

Mr. Robert Atkins (South Ribble)

I am extremely grateful for being called. I do not intend to delay the House for long and I apologise for raising an industrial procurement matter. I am lucky to have a chance to speak at all.

I want to talk about the European fighter aircraft, which decision is due next week, or ought to be. There are several constraints on its development. First, there is an in-service date requirement of 1995 for the Royal Air Force and other European air forces. Unless the go-ahead is given very soon, we shall not meet that in-service date. The letter sent to my right hon. Friend the Secretary of State by companies in various industries suggesting that the European staff target would be met does not meet the agreement of many in the British aerospace industry. I hope that he will consider that carefully and take advice from the British aerospace industry, as he has done till now.

Secondly, there will be a threat to jobs if the fighter aircraft project does not go ahead. There will also be a threat to the continuity of the British aerospace industry if we do not get something working swiftly. I refer not simply to my area and the rest of Lancashire but to the whole of the United Kingdom.

The third constraint concerns sub-contractors who must look to their future interests. They are already faced with the prospect of having to take bilateral decisions to involve themselves in contracts to ensure their future. That would damage the strength of the consortium which hopes to gain the European fighter aircraft project go-ahead.

The fourth constraint is French intransigence. I have raised this matter many times in the House and do not apologise for doing so again. Their lack of interest is clear from the evidence that is available to those who take an interest in these matters. I recently went to Munich and was at the Paris air fair last week, where I was able to talk to people in the industry and the armed services, all of whom believe that the French are being deliberately intransigent and are not interested in getting involved in the project. The French have recently suggested to the armaments directors that there should be an evaluation of a navy version, which would delay discussion for yet another six months or so and enable them to demand more than their fair share of the jobs.

I have a copy of a document, circulated at the Paris air show, from the French trade unions which states: This is why the Federation of Metal Workers, CGT and all of the Unions in the French Aeronautical and Avionic Industries demand that the future defence aircraft be manufactured entirely from products currently under construction by various French Companies. The document continues with a diatribe against the British aerospace industry and European industry as a whole. That confirms my information that French industry does not want to be involved in the project.

We are not being intransigent or chauvinistic. Although we have the fallback of the P-120, which will be a British version, with our European colleagues—West Germany, Italy, Spain and perhaps the Netherlands and Belgium— we are offering to build an aeroplane which we would like the French to be involved in. We want the French to be involved, provided that they recognise that they must come in on equal terms and share the work fairly. If they are not prepared to do that—they have shown that they are not—we must be prepared, with our partners, to tell the French at next week's meeting in London that the French can join us or stop mucking us about. We need a decision, and swiftly.

We must bring pressure to bear at a political level on West Germany. It is clear from my information that the West German industry is extremely keen to continue its involvement along the lines of Panavia and MTU, which have been responsible for manufacturing the Tornado and the engine for it. The industry has already said that, unless a decision is taken in July, it will have to make further decisions and involve itself in further discussions with American industry. There are already discussions with Northrop and Rockwell about the possibility of fulfilling their requirement. That must not happen, so we must persuade the West German Government to commit themselves to us, as they have until now, and to persuade the French to participate. If they do not, they must be told next week that time has run out.

We must have a commitment next week and the project must get off the ground as soon as possible. I am grateful for this chance to emphasise the strength of the anxieties.

7.37 pm

Mr. Gavin Strang (Edinburgh, East)

I should like to concentrate on disarmament issues. The first page of the Defence Estimates says: Given the present scale of NATO's defences, we have no reason to believe that Soviet leaders have any immediate intention of attacking NATO countries; but we cannot ignore the fact that those same leaders continue to improve the Soviet capability for such an attack. There will be broad agreement that the Soviet Union does not intend to attack Western Europe. In the main, I agree with the analysis of my hon. Friend the Member for Liverpool, Walton (Mr. Heffer), who described how the Soviet Union extended its hegemony over Eastern Europe through military force.

It will also be common ground that we cannot base our defence policy on our view of Soviet intentions. We must base it on Soviet capability. However, that also applies to the United States. We must consider how the Soviet Union perceives the United States — as the most powerful military power in the world, especially in terms of nuclear technology. It is ringed with nuclear weapons in Europe and nuclear weapons are being developed in China.

We must understand the Soviet leadership's attitude in terms of that country's history, which my hon. Friend the Member for Walton described, and in terms of the huge military arsenal with which it is confronted. The Reagan Administration was elected on a ticket of massively expanding the United States's military budget. The nuclear arms race has been tremendously exaggerated by the United States. In November 1983, the CIA said that it had exaggerated the increase in the Soviet Union's military capability. More recently, in 1985, it acknowledged that it had overestimated the increase in the Soviet Union's military capability.

We have seen the destabilising development of nuclear weapons systems. In reply to a question from the hon. Member for Davyhulme (Mr. Churchill) — this is referred to in the evidence of the Select Committee on Defence which was published yesterday—the Secretary of State said that the policy of mutually assured destruction had been of incalculable value. However, that policy was not planned. It was one at which the two super-powers arrived. That policy has long since been undermined by technology—for example, the development of accurate counter-force weapons, which by definition are first-strike weapons. As counter-force weapons such as the Trident D5 system have undermined the deterrence element in mutually assured destruction, so is the strategic defence initiative enormously destabilising.

I assert categorically that there is a consensus of leading scientists and physicists in the United States who do not believe that it will be possible to achieve the SDI's ultimate objective of complete protection for the United States population from the Soviet Union's ICBMs. What is more likely to be attained in a decade or two is an imperfect system of protection basically for United States missiles. This involves a further element of destabilisation, at least in the transition phase. That is why we must recognise that the strategic defence initiative, as perceived by the Soviet Union, represents a dangerous escalation of the nuclear arms race.

Many prominent members of the Reagan Administration are on record as opposed to arms control. In the main, the record of that Administration has been one of opposition to arms control. What has been the record of the British Government? It gives me no pleasure to say that anyone looking objectively at what the Government have done in this area over the past five years cannot describe their actions as anything but deeply depressing.

First, Britain has been at the forefront in Europe in supporting Reagan's escalation of the nuclear arms race. The White Paper refers to the partial test ban treaty that was negotiated by Lord Stockton. The stance of Lord Stockton must be contrasted with that of the Prime Minister. In December, she described herself as President Reagan's greatest fan. She went to the United States and gave strong support to the star wars policy.

What is our record in the United Nations? I have a document which sets out the voting records of the various member countries last December on nuclear disarmament issues. In the limited time at my disposal I shall take only a couple of examples. Resolution 39/52 is headed: Cessation of all test explosions of nuclear weapons".

The resolution begins: Convinced that there are adequate existing verification measures to ensure compliance with a nuclear-test ban and that the alleged absence of verification means is nothing but an excuse for nuclear proliferation". That was carried by 112 votes to three with 23 abstentions. It is no surprise to learn that the United Kingdom was one of the three member countries who opposed the resolution. The document from which I am quoting shows that that was frequently the case.

I shall give one more example. Resolution 39/61 is headed: Implementation of the Declaration of the denuclearisation of Africa. The resolution includes the words:

Appeals to all States that have the means to do so to monitor South Africa's research on, and development and production of nuclear weapons, and to publicise any information in that regard. The resolution was carried by 147 votes with five abstentions. Again, the United Kingdom was one of the member countries which abstained. At the same time, the Government call themselves multilateralists.

The current disarmament talks are referred to and listed in the White Paper. Included in the list are the MBFR talks in Vienna. The parties to the talks are NATO and the Warsaw pact. I had the privilege last week, with some of my hon. Friends, of discussing these issues with Lord Carrington and other NATO personnel. It seems that there is a feeling in NATO that we should reconsider our position and accept that there is a discrepancy between our estimate of the Warsaw pact's forces and the strength which the Warsaw pact is prepared to acknowledge in central Europe. We should accept the disparity. Rather than pursue a reduction in force numbers — a goal in which no progress has been made over the years—we should go for fixing a ceiling on the number of forces in central Europe and try to make some progress in arriving at an agreement on conventional forces.

The British Government's contribution to the crucial bilateral disarmament talks in Geneva between the United States and the Soviet Union cannot be described as helpful. It is certainly not helpful to come out strongly in support of the strategic defence initiative. It is not helpful to insist that in no circumstances will Britain's nuclear weapons be included within the ambit of these important talks.

I raised in the House last Friday the non-proliferation treaty review conference that will take place in September and progress towards a comprehensive test ban treaty. A debate was initiated on Thursday evening by the hon. Member for Bristol, East (Mr. Sayeed) and the Minister of State for Foreign and Commonwealth Affairs, the right hon. Member for Shoreham (Mr. Luce) replied. He sought to argue that progress on the NPT review conference had nothing to do with progress towards a comprehensive test ban treaty. That was absolute nonsense, as anyone who knows anything about the subject must acknowledge.

When I initiated an Adjournment debate on the comprehensive test ban treaty, the Government came up with the stale response of verification problems. Everyone knows that that is not the problem. The United States pulled out of the comprehensive test ban treaty talks because it did not want an agreement. It is a subterfuge to argue that we do not have the technological means to police underground nuclear tests and to monitor them down to a few kilotonnes. United States scientists have acknowledged that we have the technical means to do so. We have the means to achieve an effective test ban treaty involving the Soviet Union, the United States and Britain, and with the 120-odd non-nuclear power, signatories, we can improve the non-proliferation treaty. Let the British Government take an initiative for progress in this area at least.

7.48 pm

Sir Geoffrey Johnson Smith (Wealden)

I hope that the hon. Member for Edinburgh, East (Mr. Strang) will forgive me if I do not take up his final argument in detail. I shall concentrate on Trident, the British nuclear deterrent, European collaboration and the strategic defence initiative and their impact on Europe.

I acknowledge that any defence expenditure imposes strains on all services when they are subjected to the financial constraints that are set out in the White Paper. However, I object to the assumption that one item of defence expenditure must go to pay the penalty of such financial constraint. That one item, as seen by the Opposition, is Trident.

Trident is cheap. It is the most economic and cost-effective piece of defence equipment that Britain could possibly have. The cost will be spread over 15 years. It is argued that if we did not have it we would have to strengthen our conventional weapons. What could be bought with about £10 billion? Over 15 years it would buy us about three armoured divisions, and it is a darned sight more expensive to run armoured divisions than to have nuclear equipment. I do not accept that the cost argument has been made out.

I suspect that for political reasons it does not suit the Labour party in its present mood to have a British nuclear deterrent. For reasons that I do not wish to go into because of the limited time that is available, the Liberal party is choosing to face both ways. The Liberal party and the alliance know that if they were to come down heavily on one side or the other they would find themselves in one hell of a row. Of course, it is easy to fudge the issues. However, I ask them to bear in mind the suggestion that has been made by some of their spokesmen that cruise missiles or an extension of Polaris offer a way out. I have never met a serious military expert who takes the view that they provide an effective deterrent. The economies that would be involved in such a policy would be minimal. If we are to address ourselves to economies, the argument is reduced to shreds. We must grasp the nettle. We either want to remain a serious nuclear power or we do not. I believe that we should. There are strong reasons why there should be a deterrent in European hands. If the Opposition want to surrender that, they have the choice of leaving the supreme decisions in these matters to the United States —always assuming that the United States will see our quarrel as its quarrel and will always wish to put its cities at risk to defend us—or they must recognise that the only European deterrent would be in French hands. I do not find that acceptable.

One way of overcoming the difficulty as we begin to look to the future is to see how we can extend European collaboration and have a European deterrent, while such a thing is regarded as necessary. In that context, European collaboration takes on a wider dimension. It is ludicrous to have one deterrent which is solely British and one which is solely French. There can be significant savings if we pool our resources. That is for the longer term. In the meantime, the Government are correct to stick to Trident.

The strategic defence initiative is another sphere of collaboration. My reaction to it, with that of other people, was somewhat unfavourable. I thought that star wars was just an extension of nuclear war into space. How wrong I was. It was argued that the concept jeopardised the arms contact talks. That could not be further from the truth. I believe that it was the SDI concept which bought the Soviet Union to the negotiating table.

What I find interesting about the initiative is that in the long term it offers the hope of making nuclear ballistic missiles obsolete. In the short term it will mean a shift of emphasis away from deterrence based upon nuclear retaliation to a greater reliance on non-nuclear defence systems. Surely we can all unite on that.

The hon. Member for Edinburgh, East (Mr. Strang) said that we could not rely on SDI because some weapons would get through, and that the idea of having a type of balloon over the United States which would make it impervious to nuclear attack is crazy. I agree with him. I cannot see that happening, but who knows? There are plenty of experts in the United States who believe that it is possible to develop a defensive system which would make impossible a pre-emptive first strike which would destroy the United States military capability. Although some weapons would get through, not all would. That would seriously question the Soviet Union's ability effectively to destroy the United States.

An effective strategic defence system which would enhance the survival capability of our present nuclear deterrent forces should be supported because it would ensure that a growing proportion of Soviet missiles would no longer reach their targets. For that reason, I believe that a strategic defence system is important.

There is another reason for supporting the initiative. Why should we let the Soviet Union monopolise the system? Why should Western Europe not have some idea of the technology involved in the strategic defence initiative, because it will have tremendous implications for civilian industry? It will give European technology an insight into the new technologies and will provide advantages for industry.

The alternative is to be left out—that surely is not good for us—and increasingly to become a second-class partner in the NATO Alliance.

We should look to see how far we can evolve new defensive techniques which would benefit our industry through co-operation with our Western European partners. The French EUREKA concept seems somewhat vague. It has yet to be spelt out. It does not concentrate, as the United States initiative does, upon strategic defence, but it is a concept that we should welcome.

I see no conflict in this country embracing the invitation of the President of United States to involve ourselves with SDI and the French offer to all Western European nations to co-operate in providing a wider basis for European technological co-operation.

On the narrow point made by my hon. Friend the Member for South Ribble (Mr. Atkins), it seems to me that the significance of the EFA project is that if we in Europe cannot get together on something that we know to be vital to conventional defence and for employment in our respective countries, and which has important civil applications for our industry, what hope have we of being able to co-operate in the wider spheres to make it possible for us to have realistic and cost-effective defence budgets? That is the challenge thrown down by the White Paper and the report of the Select Committee on Defence.

7.57 pm

Mr. Paddy Ashdown (Yeovil)

The hon. Member for Wealden (Sir G. Johnson-Smith) said that the Liberal party and the SDP were somehow undecided about Trident. He is confusing his party with ours. Both parties have clearly stated their opposition to Trident. It is the Conservative party that is divided on the issue.

I should like to deal with a small procurement issue and some more general points. This will come as no surprise to the Minister. I appeal to him to give us a decision soon on the air staff target 404. He is aware of the value of that contract and the input of Westland plc to the services. He is aware that the Secretary of State for Trade and Industry has invested in the project and that we could obtain significant orders from abroad. It has been one and a half years since the proposals were put to the Minister. It is time that we heard what was to happen. Any decision would be better than none. We naturally hope that he will go for Westland plc and the AST 404. If he does not, I hope that he will at least give us the imprimatur of saying that the Ministry of Defence believes that Westland plc can provide the appropriate aircraft. Even if he cannot do that, will he tell us when he will make the decision?

On the broader issue, a sensible defence policy comes out of a rational assessment of the facts. In a free democracy it is vital that the public have access to the facts so as to provide a rational defence policy with public support. It is especially important that the House of Commons is presented with a true picture and is not misled.

A key element of our present defence policy is NATO's declared readiness to use nuclear weapons first in the case of a conventional attack by the Soviet Union. Many regard that as militarily dangerous and normally reprehensible. However, the Government case is that the superiority— a point made by the hon. Member for Gosport (Mr. Viggers)—of the Warsaw pact is so great that such a policy is necessary. The key question is: are they right?

The central element of the Government's argument is that the gap in the NATO and Warsaw pact conventional forces is so large that we cannot bridge it and that therefore it is necessary to use nuclear weapons to offset the disadvantage. The consequence is that instead of the deterrents at two levels that I should like to see—one to deter at the conventional level and one at the nuclear— we have left ourselves with only one response to any Soviet action—the nuclear one.

With low and inadequate conventional forces, and a sole response — the use of nuclear weapons — to any Soviet aggression we have a policy the consequences of which are nuclear weapons constantly held on the hair trigger and a threshold to nuclear war which is dangerously low.

Whether such a policy is necessary depends on the real balance of conventional forces between the Warsaw pact and NATO. One would imagine that the Government would give us the true facts on that. However, it appears not. They seem to prefer to misrepresent the facts to the House and to a wider public—some people might even say, distort and mislead. That appears to be the case in serious documents such as the Defence Estimates and annex A to the Estimates.

I shall first deal with the issue of money spent on defence. The Estimates tell us that some 14 to 16 per cent. of the Soviet Union's income as a nation goes on arms, and that is about three times the NATO average. That is true, but it is misleading. NATO spends more on arms than the Warsaw pact. According to the Stockholm International Peace Research Institute's figures the Warsaw pact spends about £151 billion as against NATO's £307 billion. We may not accept the SIPRI figures, but what about those of the International Institute for Strategic Studies in its document on the military balance 1984-85? It gives the Warsaw pact as spending £278 billion and NATO £308 billion. NATO spent more on defence than the Warsaw pact.

As a percentage of GDP, the Warsaw pact's spending may well be higher than NATO's, but we do not win wars on a high percentage of GDP spent on defence. Strong defence systems are based upon the total amount of money that is spent on defence. Even on the IISS figures, NATO spends about 1.6 times the amount spent by the Warsaw pact. NATO is stronger in other areas as well; it has 1.6 times the manpower and 2.5 times the gross national product of the Warsaw pact.

The disparities are not confined to national statistics. More glaring examples of misleading statistics appear in annex A of the Defence Estimates. The figure on page 54 shows the nuclear weapons held by each side and the Warsaw pact column is substantially higher. No overall figure is given, but the implication is that the Warsaw pact has massive superiority. However, the chart uses missiles and not warheads. Now that we have multiple independent re-entry vehicles—independently targetable warheads— would it not be better to use those instead of missiles? The document "British Defence Policy" is even more exaggerated in giving superiority to the Warsaw pact.

If we look elsewhere we can obtain more honest representations of the balance. For example, the United States congressional budget office study "Modernising US Strategic Offensive Forces" uses individual warheads in its calculations because, it claims — more honestly than ourselves—that that indicates the potential targets which can be struck. That approach is fairer, but it seems that it does not create the impression of Warsaw pact superiority which the British Government want to create.

The United States figures show that NATO is superior. The Warsaw pact has 9,000 warheads compared with the 11,000 of the United States. In addition, our Estimates exclude the capability of Trident. The congressional study includes "hard target capability" — the capacity to deliver a nuclear weapon with a 50 per cent. chance of a hit at a point close enough to exert 4,000 tonnes per sq in overpressure at a certain point—presumably, the missile silo. The report says that there will be no sea-based capacity for such hard target capability for the Americans until Trident D5 is delivered. Indeed, the report goes further:

The sea-based forces will have to await the introduction of the Trident II(D5) missile in the 1990s to achieve a hard-target capablity. That is a vital report, because it shows that Trident will give Britain a first-strike capacity. I accept that the Government have no intention of striking first, but they will have that capacity and we cannot blame the Soviet Union if it takes that into account in its calculations.

The United States Under-Secretary for Defence told a Mitre conference in 1981: Equipped with D5 Missiles, the Trident submarines will have a 'counterforce capability' — even a pre-emptive capability. That is frightening, but it is at least honest. How different it is from what we are told in our Defence Estimates. Paragraph 10 of the Trident essay says: The United Kingdom's deterrent force, when equipped with Trident, will remain the minimum size compatible with cost effectiveness and credibility". In fact, according to the American statements, Trident gives us a pre-emptive, first-strike capability.

The clever manipulations and deceptive under-statements extend to the conventional balance. Indeed, some of the most glaring examples appear in the conventional balance tables in the Estimates. Figure 10 of annex A shows that the USSR has more divisions than NATO. It fails to say that a United States division has 40 per cent, more manpower than a Soviet division.

Figure 9 shows the numbers of Warsaw pact and NATO forces. The Warsaw pact is shown as having a superiority of about 150,000, but the figure does not make it clear that all the Warsaw pact forces in Eastern Europe are included, but only the forces assigned to NATO on the mainland are included. Some British and French troops are left out.

The United States is more honest. A congressional researcher, Anthony Cordesman, who has done much work in this area, reckons that about 256,000 men in France and 70,000 soldiers in Britain are excluded from the figures. Anthony Cordesman's figures, backed up by Mearsheimer, show that NATO has a majority of forces on the ground—1,113 million against the 933,000 of the Warsaw pact.

Figure 9 gives a ratio of fighting units of 1.2:1 in the Warsaw pact's favour, but a different picture emerges in the figures for tanks. Annex A suggests that the Warsaw pact has a majority of 2:1. Here is revealed an especial sleight of hand. NATO chooses to have tanks in balanced units with other forces. The Warsaw pact's theory of victory is to have heavy tank concentrations. We choose our balance of forces according to our theory of victory, but when we represent the balance of forces, we choose the Soviet theory of victory to assess the impact. That is dishonest and it causes the West always to look bad. We simply move the goalposts.

I could develop some technical points about tanks, but time will not allow that. The United States Department of Defence is more honest and straightforward. Using a sophisticated armoured division equivalent, in which it took all divisions on the central front and weighed them against three charateristics—mobility, surviveability and firepower—it decided that the ratio was not 2.1:1, as suggested in our Defence Estimates, but 1.1:1—an insufficient superiority to mount a successful attack.

Annex A puts the Warsaw pact's superiority in aircraft at 2.1:1. I begin to wonder whether the Ministry's figures are just sloppy or are deliberately intended to mislead.

Calculations suggest that in bombs and weapons delivered at 100-mile and 200-mile ranges, NATO has a superiority. All this adds up to the fact that the gap between the strength of our conventional forces and those of the Warsaw pact is not so great that it could not be bridged in a way that would give NATO effective conventional deterrents as well as nuclear deterrents.

If that is so, we are much closer than the Secretary of State would like us to believe to the point where we could abandon a defence posture that relies on the fact that we would be the first to use nuclear weapons in a time of conflict. Abandoning that posture would make the world a safer place.

Finally—

Mr. Deputy Speaker (Mr. Ernest Armstrong)

Order. The hon. Gentleman has exceeded the time limit.

8.7 pm

Sir Hector Monro (Dumfries)

The hon. Member for Yeovil (Mr. Ashdown) made an incredible and irresponsible speech about the nuclear deterrent and his wish for unilateral nuclear disarmament, which would leave us in a weak position.

I welcome and support the Government's policies set out in the Estimates, their strong attitude on the nuclear deterrent and the overall strategies, which are designed to maintain peace.

I have recently returned from a defence visit to Belize where I was reminded of how essential it is for us to have effective helicopters in support of our services. I was impressed by the commander of the British forces, his staff, the Army and RAF units and the resident battalion, the Duke of Wellington's Regiment.

We must come to a conclusion on our medium and long-term strategy towards Belize. We are there to help to defend it against Guatemala and we use the country as a first-class training area for our forces. I hope that we shall be there for a considerable period and, if we are, I hope that the Ministry of Defence will investigate the accommodation for soldiers and airmen in the airport camp. It is too cramped for a tropical climate and way below the standard that we require on a regular base.

The Estimates cover much sophisticated weaponry that involves high technology. We must never forget that the morale of the men and women who form our forces is most important, and that we want it to remain as high as possible — that is, extremely high. We must never become impersonal or remote from their aspirations. Issues such as pay, promotion, postings, and overseas allowances, matter greatly to them. Issues such as local overseas allowances must be presented better than they were this year. It was not only tough on the commanding officers who had to explain the matter to their units, but on the men. Whatever the practical reasons, which were brought out in the Select Committee's report, to find that the allowance in Germany had been substantially cut was tough. Allowances have been increased elsewhere, but when one has had an allowance for a long time, it comes as a surprise when it is removed at short notice.

Ministers must do all that they can to cultivate a personal touch with our forces. Too many skilled men and women are leaving the forces, a point which my right hon. Friend the Secretary of State for Defence touched on. I take his point that as the economy may be picking up and as men in the forces are extremely skilled, it is understandable that they are attracted away. To prevent that we must provide good conditions of service, good pay and a promotion structure which enables them to see a long way ahead. After giving them an expensive training, we do not wish to lose them and, more important, their experience, because industry can offer them better conditions. To look after our men and women is a first priority, which has been highlighted in articles in The Daily Telegraph. They reinforced what I have been thinking for many months.

I compliment the Royal Air Force on the remarkably high standard of airmanship that it maintains year by year, supported by a host of ground services and control units. Airmanship of the Hercules, which have been going to the Falklands, and of the Red Arrows, of which I have seen two excellent displays during the past few weeks, is of the highest quality. We have made one decision and must make another, and both are crucially important. The first decision related to training aircraft. I hope that the Ministry of Defence will never again embark on a cheapest tender policy. It may have reduced the eventual price well below what was anticipated, but the Ministry's attitude must be to go for the best buy. It is necessary to take into account the quality, specification, performance and handling of an aircraft and balance that against costs. To go for the cheapest aircraft, even if its performance is acceptable, is not to buy the best aircraft for the Royal Air Force.

I wholly support my hon. Friends the Members for Wealden(Sir G. Johnson Smith) and for South Ribble (Mr. Atkins) about the European fighter aircraft. It is essential in the medium and long term that we in the United Kingdom get the best aircraft that we can and the one that we want. I know that it is a complicated issue and that my right hon. Friend is doing his level best in discussions with our European partners. As my hon. Friend the Member for Wealden said, if we cannot reach an agreement in Europe about this type of issue, the future does not look too bright. The House will wholly support my right hon. Friend if the British aircraft industry is substantially involved in the EFA.

My right hon. Friend touched on the reserves. I am involved in the Royal Auxiliary Air Force. The seven regiment squadrons, the maritime headquarters unit and the handling squadrons have turned out to be a great success in terms of value for money for the Royal Air Force. The fact that the regiment squadrons are now in the line of battle shows that they are trained to the highest standard. They are part of the first-line defence of RAF aerodromes. To maintain the enthusiasm in the Auxiliary Air Force, Territorial Army and home defence force we must ensure that they have plenty of the best possible equipment. Reserve forces undoubtedly like to have good equipment with which to train at the weekend, and take great pleasure in using the highest quality equipment.

Bearing in mind all our operational and financial difficulties, we must continue as best we can to give the squadrons and Territorial Army the opportunity of going abroad every few years for their summer training. That is a great incentive and most important.

Overall, having listened to the debate and the discussion of the Select Committee's report, I am confident that the Government are firmly committed to the best possible defence forces. I welcome the fact that during the past seven years we have been able to increase expenditure in real terms year by year. That is a fine commitment, and one of which Conservative Members are proud. I hope that we shall be able to continue with that in future. Today the Secretary of State gave us a good report, which I warmly support. I look forward to another year of complete support for our forces.

8.17 pm

Mr. Gordon Brown (Dunfermline, East)

The underlying theme of the debate, acknowledged if under-played by most Conservative Members, including the hon. Member for Dumfries (Sir H. Monro), has been the Government's growing revenue crisis. The immediate shortfall in Government funds has not spared the Ministry of Defence and now threatens to engulf it. The shortfall in the defence budget is obvious not only from the report of the Defence Select Committee, but from the Defence Estimates. It is caused by Trident, which Mr. David Greenwood of Aberdeen university says will involve a £4 billion gap in the defence budget by 1988.

The implications of the gap are most obvious in the effectiveness and readiness of the Navy. According to a defence document that I have been given, the Navy will have less money in real terms in the years to come. It will be undermanned and overstretched, with perhaps 11,000 fewer men in the 1990s, possibly 17 fewer escort vessels, and with a wholly inadequate merchant fleet available for logistic support.

If that were not difficult enough, we have a shortfall in new naval building, increasing demands on aging frigates and submarines at sea and, therefore, an increasing requirement for dependable and speedy refits on land. We therefore need more investment in, and more commitment to, the royal dockyards. Yet the Government have chosen to risk everything by proposing to end the centuries-old public stake in the royal dockyards and to throw them to the hazards of a franchise market.

According to the Secretary of State, the defence gap, which we know exists in the funding available to the Ministry, is to be bridged not by a realistic reappraisal of our defence commitments, as promised by the Secretary of State last year but, as the Defence Select Committee says, not yet delivered. It is not to be bridged by cutting the expensive commitment to Trident, which will remain a wholly unusable weapon of indeterminant cost, nor by any enhanced contribution from the Treasury, as the Chancellor of the Exchequer is already hovering on the edge of bankruptcy in other areas.

Under this Government, the gap between our requirements and our resources, between our growing burdens and falling budget, is to be bridged by ideology. There is to be more competition, more contracting out, more privatisation and more franchising. Somehow the gap in our defence budget is to be bridged by what has been called the voodoo economics of privatisation. From what they call open competition, the Government, as the Select Committee reports, hope for savings of £566 million, but admit that it may be only just over £100 million, or nothing. From contracting out services, another of the Government's favourite themes, the Government hope—according to the Select Committee—for savings of £400 million but concede that they may be only £100 million. Indeed, they might be nothing. From these experiments, the Government hope for savings of more than £1 billion. The Defence Committee says that the savings may be less than £500 million or, indeed, they may amount to nothing. The Government hope to cut costs by 40 per cent., but have to concede that the figure may be less than 10 per cent., and it may even be nothing.

The Government are gambling on the outside chance that when it comes to all the support services and the management of the dockyards, the private sector is cheaper simply because it is the private sector. That is not defence economics or even the economics of the grocer's shop, to which we have become accustomed under this Government, but more like the economics of the betting shop.

Nowhere is the Secretary of State's gamble more irresponsible than in the case of the royal dockyards. They are to be subjected to the disruptions of privatisation on the basis, as I have said before, of a sketchy and contemptible document written by the highest paid civil servant in the land, but which would not rate even a bare O-level pass in business studies.

The proposals, which threaten a private take-over of the dockyards, the dispersal of naval refitting work round the country, and a disruption of the integrity of the naval bases at Plymouth and Rosyth, ignore the experience of every country that possesses a nuclear deterrent and discard every respectable report that has been done on the dockyards, including one by the hon. Member for Ashford (Mr. Speed) under this Government.

What evidence can the Secretary of State or the Minister give us for their gamble that as they privatise, they will economise, when the whole assumption of their case is that defence work should be carried out in the public sector only when there are "significant" financial advantages? In other words, if the dockyards are cheaper in open competition, they may nevertheless lose the work because of the Government's dogmatic commitment to privatisation. With no evidence beyond simple prejudice, the Secretary of State and the Minister are gambling on the supremacy of the private sector in the management of our naval refitting, against the contention of all previous reports that the dockyards have a far better and proven track record as being more efficient, cheaper and better in time and quality than the commercial shipyards.

In January, the Secretary of State for Defence announced a comparison exercise between the private and public sectors in the refitting of submarines and frigates precisely because, as he admitted, he could not yet expect the private yards to submit "realistic tenders". The comparison exercise was to take at least two years. Now that we are only a few months into that exercise, which was to test the Minister's theories, we are told in a document entitled "The Rosyth Challenge" the con-clusions. They are: That the indications are that the dockyards are more expensive than the private shipyards and that consequently there must be a 15 per cent. reduction in dockyard costs and a 5 per cent. reduction in dockyard staff. It is said that if the dockyards do not respond quickly by the end of the year, they could start losing large elements of their programmes, including the Leanders and the type 42s.

Hon. Members may find it deeply suspicious that, a few weeks after the Minister announced a two-year long competition, he should be able to announce its results, and that in doing so he should ignore the uncomfortable but clear fact that the private shipyards doing the refit work in that exercise have become wholly dependent on the expertise, equipment and even the personnel of the much despised dockyards. The refitting work has been proved to be beyond their own skills and sophistication.

If the private sector is over-stretched and manifestly inadequate to the task of refitting one submarine and one frigate, how could they cope — if the dockyards were run down—with 46 escort vessels, 24 submarines and even with four Polaris deterrents? The Government have forced the royal dockyards to enter a competition in which the winner and the loser have already been declared, and in which the Ministry of Defence has chosen to add insult to injury by demanding that the public sector should subsidise its competitor in the private sector. Even then, the Ministry's whole philosophy is to say that even if the public sector is cheaper and proves that it can do the job at a lower cost, it will not necessarily get the work.

Surely Admiral Leach should be taken seriously when he said last month that he was very "proud and deeply grateful" for the "professional alacrity of the dockyards in a crisis". He added: It is a little premature now to kick them in the teeth". The Defence Estimates, and particularly the dockyards experiment—where dogma matters more than evidence —represent the triumph of ideology over experience. In defence, in particular, the national interest is not the sum of the private interests in the economy. The House should reject proposals for privatisation that are doctrinaire, dangerous, unproven and unpatriotic and that have been discarded in the freest of free economies in America, and which, like Trident, have nothing to contribute to the real defence of this country.

8.26 pm

Dr. Alan Glyn (Windsor and Maidenhead)

I support the hon. Member for Dunfermline, East (Mr. Brown) in one respect, and that is in accepting the importance of the role of the Merchant Navy in war. Indeed, my right hon. Friend the Member for Taunton (Sir E. du Cann) also made that point. I was interested in the remarks of the hon. Member for Liverpool, Walton (Mr. Heffer). However, we cannot possibly estimate whether Russian policy, under the titular headship of Mr. Gorbachev, will change. Consequently, our efforts for peace must continue along the same lines until we see some sign of change on his part.

I shall concentrate on the defence of our homeland and installations, as the Government have described in paragraph 448. As I hope to show, there will simply not be enough men, after mobilisation, to man those vital installations.

1 think that it is agreed on all sides that the conventional forces of the Warsaw pact are in all cases superior to our own. During exercise Lionheart, it was shown that the time taken for reinforcements was good, but that it would take the United States a considerable time to provide reinforcements. Consequently, we would be entirely reliant on nuclear weapons for our defence.

The third paragraph on page 6 of the Estimates makes it clear that the possession of Trident and of our nuclear capability is likely to inflict unacceptable damage on the Soviet Union. Surely that in itself makes the case for possession of such weapons, helping the peace initiative and strengthening our hand in any negotiations. The Defence Estimates also point out that Trident may result in sacrifices. However, I believe that Trident is so essential that we must keep it. Indeed, it is even more essential given the enormous stocks of chemical weapons held by the Soviet Union. I hope that we shall hear more about what we are doing to protect our soldiers and civilians from any such attack.

Star wars may have helped peace negotiations with the Soviets, but I believe that there are many technological defects which could put that project, as a practical proposition, far into the future. Nevertheless, it may help in our negotiations, as the Soviets are obviously worried about it. We cannot possibly be sure that some of the technicalities such as thermal measurements are perfected, and therefore it may be some time before it is put to practical use.

We have to concentrate on what we have at the moment. We know, and I have tried to show, that the superiority of the Warsaw pact powers means that we are dependent upon our nuclear capabilities. However, we have to remember that when mobilisation occurs, the Defence Estimates show that 100,000 service men will go out of the country. That leaves us bare, in spite of what the Government are doing to create the new home service force. I do not believe that this will be sufficient to guard our installations. It would require only a small number of dedicated people to cripple our strategic installations and we have to face the fact that these people will be disguised. The people who have to detect them should be from the locality.

The Government's policy is to attach members of the new force to TA or regular units. They are all over the country but we should have a force, as has been suggested by Lord Hill-Norton, consisting of local people, perhaps armed with weapons that are inexpensive and not up to date, that can act as an organised and disciplined force to help to catch and, if necessary, to tackle these intruders. They would act as a sort of auxiliary army. With 100,000 troops leaving the country we would be left very thin on the ground.

We do not want a private army, but home defence, as outlined by Lord Hill-Norton, could be an invaluable asset to our army defences and to the Territorial Army and the reserves. The Government should give careful considera-tion to this and, during exercise Brave Defender perhaps, some experiments could take place. Any force must be responsible and under military authority. The cost would be small, but what it would give to defence would be great. I commend Lord Hill-Norton's proposition and I hope that he will be able to enlarge on it in the other place. I do not ask for an answer today, but we should have this point in mind, and give it serious thought. Perhaps during exercise Brave Defender, we could see how it would work with what we already have.

On a purely domestic level, I thank the Government for helping to expedite the rebuilding of Victoria barracks in Windsor.

8.33 pm

Mr. Andrew F. Bennett (Denton and Reddish)

1 shall not follow up the arguments put by the hon. Member for Windsor and Maidenhead (Dr. Glyn) about reviving Dad's Army, but I shall follow up the point that he made about Trident being so vital. In doing so, I pursue the question that I put to the Secretary of State about whether Trident is credible if the Secretary of State cannot tell us how political control of the possibility of launching the Trident base missile will be achieved.

The Secretary of State appeared to want to brush that point aside, but it is extremely important. He suggested that there is no difference between Trident and Polaris, and that whatever system is used for communication with Polaris would be suitable for communication with Trident. But that is not true. Part of the point about Trident submarines is that they will have a far greater range and will also operate at a far greater depth. Therefore, it is extremely important to know how we shall maintain political control from this country to wherever the submarines are.

The lessons of the Falklands war show that one of the major problems in war is communication. Commander Lewin in many of his remarks has suggested that. Ministers, in justifying their instructions to the Conqueror and the timing of the sinking of the Belgrano, have always used the argument that they had to worry about communications and had to use a fairly broad-brush approach. I think that everyone wll accept that such a broad-brush approach would be unthinkable for Trident missiles. Therefore, it is important that the Government should convince us that they have an effective system of control.

As I understand it, the Government did not have a system of communication with the Polaris submarine down in the South Atlantic during the Falklands war, or with much of the task force, that was not dependent on the United States satellites. We did not have our own independent communications system but were dependent on the United States. Therefore, it is not a question of having an effective system for Polaris that can be upgraded for Trident—we probably do not have a system that will operate over such a range. If Trident is to be credible, we have to have instant political control over it, and it has to be independent of the United States.

I understand that the system for control being considered is based on an extremely low-wave radio system that would involved having aerials strung out over large parts of the countryside. The site would be obvious to everyone because of its size and scale, and to a certain extent it would be vulnerable to enemy attack. Therefore, we must ask some strategic questions.

I also understand that an installation of that size and complexity of technology, with the problems of ensuring that it could not be interfered with by radio waves, would be extremely expensive. What costs have been allowed for that? The alternative is that it would be possible to do this via planes, but we should have to have special planes for the purpose. The difficulty there is that such planes would have to follow a regular pattern, and from that it would be possible to work out the patterns of the submarines and in the end they would be vulnerable to attack. That would be equally, if not more, expensive.

It is possible that we could use the same system being considered by the United States for the control of its Trident, which is to use the Nav Star satellites. However, although the United States is planning to put up 18 of these, it is questioning whether they might not be vulnerable to attack and whether they form the system that it wants. Could we claim that we have a credible independent system if we have to rely on the United States satellites? I should have thought that that was not the case. We could consider putting up our own satellite, but that would have such a disastrous economic impact on the programme that it would not be credible.

Where in the White Paper are the specific sums of money to ensure political control over the possibility of launching missiles? Has the Minister looked at the technical problems involved? Would they not involve reducing the distances that the Trident submarines could travel from Britain, and their effectiveness? How much money will be involved? Unless the Minister can answer these and other questions that have been asked about Trident, we must come to the conclusion that Trident is not credible. The British people do not want it and we cannot afford such a system, which will be disastrous for the country, for our economy and for our moral standing in the world.

8.39 pm

Mr. Henry Bellingham (Norfolk, North-West)

I am grateful to you, Mr. Deputy Speaker, for calling me after the hon. Member for Denton and Reddish (Mr. Bennett). I was interested to hear what he said about Trident and communications. Obviously, he has done a good deal of work on the subject. I understand that much of what he said is erroneous but I look forward to hearing what the Minister has to say about it.

The hon. Member for Dunfermline, East (Mr. Brown) talked about Trident being unusable. If deterrence works, of course it is unusable—that is the whole concept of credible deterrence. Before dealing in more detail with Trident, I should like first to mention the local overseas allowance.

As the Member for Norfolk, North-West, I naturally have an interest in LOA because there are many service men in my constituency. There are many RAP bases nearby. There is a strong service tradition in west Norfolk. The Minister will be aware of the grave concern in Germany. I read his speech in the Adjournment debate about four weeks ago. We all know the figures of loss of pay of certain types of officers and soldiers. I believe that the matter was handled very badly and insensitively. The Government's high standing with the services in Germany took a serious knock.

In the Adjournment debate, the Minister said that many of the troops were away from their units when the decision was announced, and heard about it through the media. That is not good enough. It would have been far better if unit commanders had been given a week's embargo on the announcement and had had a chance to tell the people in their units what was to happen.

The Minister knows my interest in the small firms sector. I welcome the document, "Selling to the MOD". I also like paragraph 513 of the defence statement, which mentions that much more attention is being paid to smaller firms, and that the Ministry is looking for greater opportunities for the small firms sector. It mentions that 40,000 copies of the document have been distributed to small firms. Are there any data on how successful the document has been? Are there any figures available? What does the MOD categorise as a small firm? Is it a firm employing under 200 people, under 100, under 50 or under 20? I should like to see figures for the different categories. I should like to be able to say to the many small firm lobby groups that we have been successful in the policy of trying to help the small firm sector through MOD procurement, but we need more information about it.

The decision on Trident is without doubt the most momentous that any Government have had to make since the last war. The crucial starting point is to ask ourselves whether the United Kingdom needs an independent nuclear deterrent. As the White Paper says, deterrence is a matter of perception, and nuclear weapons in the possession of the United Kingdom greatly complicate the calculations of a foreign aggressor. As the Secretary of State said, we might at some stage in the future—I hope not, and he said that he hoped not — see an Administration in power in Washington that is more isolationist and more Pacific-oriented. If that were to happen, we would be left alone.

I am convinced of the need for an independent nuclear capability, but that capability has to be credible. If it is not credible, it is a complete waste of time and money. I was initially opposed to Trident, which is undoubtedly a Rolls-Royce system. Just as I do not want to see the Secretary of State driving around in a Government Rolls-Royce when a Rover or a Montego will do, likewise, if there could have been a Rover or Montego as a credible alternative to Trident, I should have liked to see that option adopted.

It is incumbent upon anyone who argues against Trident to ask himself about the other options. We have heard tonight what they are. The first is to retain Polaris. I do not believe that that is a sensible option. The submarines will be worn out by the mid-1990s and it will be very expensive to refit them completely.

Although the Chevaline warhead is British, the missile is American, and there would be serious problems in maintaining the production lines in America.

We have heard about cruise from the leader of the SDP, the right hon. Member for Plymouth, Devonport (Dr. Owen). It is accurate and is a much-favoured alternative in some quarters, but its range is very short, and that would lead to problems with the detection of submarines. But the main problem with cruise is its overall lack of credibility as a strategic deterrent, because it would not have the necessary assured penetrability.

I have looked very carefully at all the arguments, and initially I favoured the cruise option, but now I am 100 per cent. against it as a strategic nuclear deterrent for the United Kingdom.

There was some talk of building a new British deterrent, but that would be a much more expensive option than the others. There was mention of co-operating with France. I should like to see that at some stage in the future, but in the short term it is completely unrealistic. Therefore, I am led, albeit reluctantly, but remorselessly and irresistibly, to Trident. Of course its power is unimaginable. We all know that the explosive power of one full submarine complement of 16 missiles is 640 times the power of the Hiroshima bomb. Naturally, that leads to disquiet.

We have heard from the Labour party about escalation in the cost of Trident. We do not need many lessons from Labour Members about the escalation of cost. Recently I looked at Barbara Castle's diaries; under the date 11 November 1974 she described a Cabinet meeting when the decision was taken to go ahead with Chevaline. The figure then mentioned by the Prime Minister was £24 million. By March 1976 it had risen to £584 million. We all know that the final cost is getting on for £1 billion. The Government have been very open about Trident, but the Labour Government were utterly secretive about Chevaline, and also about the initial negotiations that might even have led a Labour Government, had they stayed in power, to adopt the Trident option in 1981. Despite the escalation in cost, I still believe that Trident is extremely good value for money.

Our contribution to Trident research and development is very small — about $116 million. The argument about the exchange rate has often been greatly exaggerated. The Henley forecasting centre said that, even with an exchange rate of 63 cents to the pound, the extra cost would be only about $1.5 billion. We know that that will not happen because the pound looks like remaining a good deal stronger than some people might have expected it to be.

Trident will, of course, have a major impact on the defence budget, and I accept the implications of the Select Committee report, but we have to cater for Trident; we have to go ahead with it. The first duty of any British Government is defence. The first social duty of any British Government is defence. The overwhelming majority of people in Britain want an independent nuclear capability. That is why I firmly believe that, if an overwhelming argument is made for an independent nuclear deterrent, it has got to be credible and it has got to be Trident. If it is not Trident, then that appalling, horrific scenario of a nuclear holocaust, far from being less likely, will become more likely.

8.47 pm

Sir Antony Buck (Colchester, North)

It is a pleasure to follow my hon. Friend the Member for Norfolk, North-West (Mr. Bellingham). I apologise in that I was not here earlier. I have been out of the Chamber for a while, because I was tempted away to a NATO reception, organised by the NATO defence college. When the Minister replies to the debate, he may wish to say something about that very interesting organisation, which was responsible for my being absent for part of the debate. [Interruption.] I am sure that the hon. Member for Kingston upon Hull, North (Mr. McNamara), who is on the Opposition Front Bench, was invited to the reception. At any rate, he will be glad to learn that his hon. Friends were represented there.

The NATO defence college should be the think tank of NATO, which it is not at the moment. It has a course to which we send people of moderately high calibre. There is room for a considerable expansion of that NATO facility.

I should like to make some general remarks on the defence White Paper. With good Tory logic, it has a blue cover, which is now a continuation of tradition. For the first time, the defence White Paper contains what might be regarded as a child's guide to defence control. The major arms control and disarmament agreements and talks are set out on page 4. I always think that it is important to discuss simultaneously our defence capacity and capability and the arms control initiatives that Britain and the Alliance are taking.

I do not think that we have a monopoly on concern for defence matters, but I do not see many of the unilateralists here. To a large extent, the hon. Member for Sheffield, Attercliffe (Mr. Duffy) shares with me a mutual and balanced force reduction approach rather than a unilateralist approach. We have had the common privilege of being Ministers with responsibility for the Navy, and I think that we agree that the unilateralists are the enemies of the multilateralists. If the tough men of the Politburo are to be persuaded to have meaningful negotiations around the table on START, SALT, MBFR and so on, it is important to keep up our defensive position. If they see that we are unilaterally tearing down our armaments system, they will never negotiate.

It is useful to consider what has already been achieved in arms control and disarmament agreements and talks as set out in the White Paper. The 1985 Antarctic treaty prohibited military activities in that region. That is significant in relation to the Falklands. I should like an assurance that the treaty's provisions is not being abrogated and will not be under any circumstances by those who are potentially hostile to us. The 1963 partial test ban treaty banned nuclear explosions in the atmosphere, outer space and underwater. That vitally important agreement has been observed by all sides. I do not believe that there are any signs that it will be abrogated.

The 1967 outer space treaty, the 1967 treaty which established a nuclear weapon-free zone in Latin America and the 1968 non-proliferation treaty which inhibited the spread of nuclear weapons to further countries are also significant. I hope that the Government will state the extent to which those treaties have been obeyed. I should like a frank appraisal of the position, because there has been speculation in the newspapers about the possible nuclear capability of several countries. This knowledge is highly relevant to a consideration of our defence policy. I am concerned about the rumours that certain countries have breached the 1968 non-proliferation treaty. We must ensure that the provisions of the treaties are monitored properly and are enforceable. If they are not enforced fully, public opinion must be brought to bear on the Governments concerned.

The sea-bed treaty prohibits the placing of nuclear weapons on the sea bed. The SALT I agreement limits strategic nuclear missiles. The 1972 anti-ballistic missile treaty limits deployment of anti-ballistic missile systems. The 1972 biological weapons convention, the 1977 environmental modification convention, which banned the use of techniques to change the environment for hostile purposes, and SALT II are also mentioned in the White Paper. Some agreements have been of considerable value.

It would be useful at some stage of the debate to have a situation report—in Ministry of Defence terms a "sit-rep"—on the integrity of the agreements and the current position with regard to MBFR talks and the talks in Geneva and Stockholm, which are rightly set out in page 4 of the White Paper. I welcome the White Paper's change in format. I welcome its appraisal, although I should like it to be fuller, of our progress towards what we all want -—a reduction in arms on both sides of the iron curtain.

Recently, I returned from a visit to the mid-west of America, which is one of the areas most remote from Europe. It was a personal visit, not one focusing on defence. I know that the hon. Member for Attercliffe shares with me an admiration for many of the facets of the defence efforts of our American allies. I was asked to go to the mid-west under the auspices of the English-Speaking Union, because that area is visited less than certain others. If we ordinary Brits, as we are known, go to New York or other places that are frequently visited, that means virtually nothing. However, in the mid-west —an area that can claim to be the heartland of America — Englishmen and Members of Parliament have a certain rarity value. We should pay high tribute to the people of the mid-west because they are interested in hearing people talk about defence matters. It is remarkable that the people of the heartland of America are not more isolationist than they are because even New York is a long way away.

I pay tribute to our American allies for being prepared to retain more than 100,000 troops in Europe. This is tied up within the points adumbrated in the White Paper.

I have probably one more minute in which to speak.

Mr. Deputy Speaker

Order. The hon. and learned Member has had 10 minutes. He must bring his remarks to a close.

Sir Antony Buck

I welcome the White Paper. It is sensible in its consideration of disarmament as well as armaments. I pay tribute to our armed forces. They are the finest in the world. I have seen them in many theatres, and in Northern Ireland they perform their task with greater restraint than could any other forces. I am glad to have had this opportunity to make those comments.

8.59 pm

Mr. Bill Walker (Tayside, North)

I welcome this opportunity to speak in what is clearly a defence debate. I say that because any expenditure that we make is designed not for offensive purposes. We are therefore discussing defence in all its aspects, and the White Paper is concerned with defence.

Throughout the debate, differing views have been expressed about how best we can defend our interests, and I do not doubt the integrity of those whose views differ from mine. Indeed, some of my hon. Friends hold differing opinions about how best we are to achieve value for the money that we spend. Hon. Members are bound also to hold conflicting views according to constituency interests. I have a constituency interest, but I will not home in on that tonight.

I wish, first, to deal with deterrence. It is reasonable in a debate such as this to ask whether the nuclear deterrent has worked. We propose to spend money over a long period pursuing what has been the policy of successive Governments since the nuclear deterrent was first introduced by a Labour Government. Thankfully, successive Labour Governments have pursued that policy. Those who believe in the nuclear deterrent take that view.

To judge whether the deterrent has worked, we must examine the situation in the world. We live in a troubled and dangerous world in which war tends to be the norm. There have been close on 150 wars since 1945. That being the pattern throughout the world, why has there been peace in western Europe? After all, we have forces facing each other and there is a huge political and ideological divide.

Western Europe has been following free world policies and the countries of eastern Europe have been following the policies in which they believe. Those who have visited the Berlin wall, let alone the other side of the iron curtain, will not deny that the divisions are real, not imagined.

Why, then, in a world that has suffered so many wars, have we in western Europe enjoyed peace? It is up to those who wish to abandon the nuclear deterrent policy that successive Governments have pursued to persuade us who believe that the deterrent works that their policies, whatever they are, will not jeopardise peace.

I have homed in on western Europe because it would be unrealistic to suggest that eastern Europe has been at peace since 1945. We cannot ignore the events in Hungary and Czechoslovakia. The tanks rolled and changes were brought about by force of arms. There were opposing forces. Change was being brought through the use of armed might.

What divides people? It is interesting to note that a substantial number of the wars that have occurred since 1945 have their origins in differences in religious beliefs. Listening to some of the bishops, we might believe that if we practise our Christian principles and tell others that we are practising them, those unbelievers or non-Christians will emulate us.

The evidence throughout the world proves the opposite to be the case. People of different religions who cannot agree on how to live in peace normally end up at war. In other words, many wars occur because people hold different religious beliefs. Some occur because people hold different ideological beliefs; the different ideologies come face to face, the people cannot live in peace, and a war results.

What, therefore, convinces those who do not believe in the deterrent that we should abandon policies which successive Governments have pursued and on which they have been prepared to spend sums of money?

Nuclear weapons are the least expensive of all weapons. When one examines the effect of modern warfare and the cost of inflicting damage to the extent that it would deter a would-be aggressor and inflict an unacceptable degree of damage, one has to consider how it could be achieved at a price that we are prepared to pay.

If we decided tomorrow, as some people suggest, to abandon our nuclear capability, how could such an unacceptable degree of damage be inflicted with conventional weapons for the price of our expenditure upon four Polaris submarines? If we believe that deterrence has worked and if we are prepared to continue to invest the amount of money that is necessary to maintain four submarines for the next 30 or 40 years, the obvious choice is Trident.

Some would argue that Trident is too expensive. I have always taken the view that if my children, and my children's children, never see a war in western Europe, Trident will be seen to have been a bargain, because deterrence has worked. It is up to those Opposition Members who wish to abandon the policy that many of them supported when they were in government to convince me, and others, that the risk ratio will not be altered by its abandonment and, more importantly, to convince me that they can put in its place conventional weapons that will deter a would-be aggressor. It will be no use to appeal to my Christian beliefs. I learned as a very young man in Government service that the fact that I was a Christian had no influence upon the Jews in Palestine or upon the Arabs. My Christian beliefs were put to the test at a very early age. I realised that my Christian beliefs were hardly the kind of shield that would prevent me from becoming the victim of an aggressor.

We in Scotland have a particular interest in the Trident programme. First, it will provide much-needed jobs n Scotland. Anybody who recommends the abolition of the Trident programme has to convince me, and other Scots, that after its abolition the base at Rosyth would continue to employ the same number of people and to do the same kind of job as it has done so successfully for so long. The arguments I have heard largely from the Opposition, have not convinced me, nor have they convinced many of my fellow Scots. We believe that the continuation of the Trident programme will mean that jobs are guaranteed. It may come as something of a surprise to Opposition Members that Governments and Opposition parties make promises about which the public are a little sceptical. It is only when the orders are placed that people believe that jobs will be guaranteed. That is why we in Scotland have an interest in Trident.

As an ex-airman, I am interested in what the White Paper says about the Royal Air Force. I, like many other hon. Members, recognise that Europe needs an air superiority aircraft, or call it what you will; all sorts of grand names will be given to it. We are referring to an aircraft that will be capable of surviving the air battles that could develop in western Europe.

Anyone who has studied battle aircraft will know that an aeroplane that cannot survive at below 15.000 or 20,000 ft in difficult conditions and terrain will not do its job effectively. The most recent glaring evidence of that was the destruction of the Syrian air force by the Israeli air force. It was one of the most outstanding air battles of all time. I cannot think of another battle where one air force destroyed so many opposition aircraft without suffering any losses. It was achieved because the Israelis had the right equipment for the job that they wished to do. No matter how good and how well-trained pilots are— RAF pilots are without doubt the finest in the world and the training system produces pilots of outstanding calibre —

if, as we learnt to our bitter cost in the 1939 to 1945 war, we ask pilots to fly aircraft that are not equipped to do the job, losses will be substantial and the task will not be carried out.

I approve of our attempts to collaborate on a European fighter aircraft. If Europe is to mean anything, we must learn to live and work together and to make products that do the job. We must bury our nationalist attitudes—we all possess them, not least the Scots. However, we must listen to what the RAF says about its needs for an aeroplane that will fight air battles in western Europe. We ignore its advice at the peril of future pilots, and that is a price that I will not pay. I am sure that we shall find a solution, but I warn Ministers that the French are good at organising things to suit themselves. I wonder whether they are concerned with air battles in western Europe or whether they have other targets.

One aspect of the RAF that has interested me all my adult life is its reserve forces, which for many years have been run down. Recently, we started to reactivate the auxiliary units. I welcome that good move. The evidence from the operation of those auxiliary units and the calibre of the volunteers who have been attracted must convince even the most sceptical that the programme is worth while and is extremely good value for money. More importantly, we have attracted the volunteer services of some of the best people in the country. There must be considerable scope for enlarging the air force reserves at a price that we can afford, so that they can do the job that is necessary if they are ever asked to do it.

However, I make the strong plea to the Government to think about reactivating a flying branch. After all, the RAF is about flying; everything else is secondary. Its purpose is to fly to defend the country. If we want people to drive lorries and carry out other tasks, other services and units could do it much better. But no one flies better than the RAF. If, as I hope, we enlarge the RAF reserves and auxiliaries, I would further recommend that they should be under one command. It is a mistake to have different commands, or to have no clear structure of one air officer commanding those responsible for auxiliaries and reserves. I include in that the volunteers who serve the air cadet branch of the RAF, from which a substantial number of RAF recruits come.

The officers who serve those cadet forces, particularly the Air Training Corps and the combined cadet force, have civilian backgrounds that encompass many different professions, disciplines and experiences. I have always been amazed that we have on tap so many willing people who give of their time for nothing, yet we do not list their full-time jobs—

Mr. Andrew F. Bennett

On a point of order, Mr. Speaker. I was wondering whether the hon. Gentleman was aware that at least one other Labour Back Bencher wishes to catch your eye.

Mr. Speaker

That is not a matter for me, but I hope that I shall be able to call other hon. Members.

Mr. Walker

I hear you loud and clear, Mr. Speaker.

These debates largely concentrate on the major issues. I believe that I am the only hon. Member who is a serving RAF volunteer reserve officer, and it would therefore be wrong if I did not raise this subject. I hope that the House will bear with me in those circumstances.

I felt that I had to speak about the nuclear submarines in Scotland because of the Scottish dimension, and I am sure that the RAF would expect me to put some of those thoughts on record.

The many disciplines and experiences of the volunteer reserve officers who serve with our air force cadets could be used in emergencies if they were used on the same basis as the Territorial Army. There is much scope for using those people. I speak as their shop steward, and I know they hoped that I would get that message across loud and clear. They are willing and prepared, and we get them for nothing. There cannnot be a better bargain than that. In fact, the only time that these men draw pay is when they are on full-time service. Their volunteer service is given free.

I thank the Government from the bottom of my heart, because in 1962 I wrote a paper on replacing the gliders in which the cadets were trained. I waited a long time before the money was forthcoming, but I thank the Government Front Bench as well as my noble Friend, Lord Trefgarne. All Defence Ministers contributed to the positive action that resulted in the brand new glider fleet for our cadets. I promise that it will be another 20 years before I ask for more replacements.

9.18 pm

Mr. Bob Clay (Sunderland, North)

I wish to raise some questions about the proposed American nuclear-tipped artillery shell and its deployment in Europe. I have corresponded with the Secretary of State about this and have received an interesting reply today.

At defence Question Time on 26 February, Labour Members asked why Dr. Wagner, a senior official in the United States Administration, told congressional hearings that NATO Ministers had agreed to the deployment of the new 155 mm shells in Europe, although Ministers had told the House of Commons that no such agreement had been made.

There were further denials in the House of Commons, but on 1 May Dr. Wagner told Congress that this had been agreed. He said that NATO Ministers endorsed a number of improvements, and listed the new artillery shells as one of them.

Since that denial in the House of Commons, Congressman Fazio has put the record to Dr. Wagner at further congressional hearings. He read the record of what was said in the House of Commons and asked, in effect, who was telling the truth. On that occasion, Dr. Wagner said that the statements of British Ministers must have been made for political reasons and for domestic consumption.

The explanation that I received from the Secretary of State today concludes: I am of course not responsible for decisions taken by the United States Government, or evidence given by their officials to the United States Congress. I agree that Dr. Wagner appears to have taken a different view to mine in his testimony. But the facts as understood by the British Government are as I have described them. It is now clear that a senior American Government official at congressional hearings in the United States is saying something totally contrary to what British Ministers have been telling the House of Commons. There is a direct conflict of evidence. To put it bluntly, the Secretary of State in his letter to me seems to be saying in a polite way that Dr. Wagner is misleading Congress because if that is not so British Ministers must have been misleading the House of Commons. Both sets of statements and evidence cannot be true.

As the Secretary of State now accepts that different evidence has been given in the United States he should explain to the House what steps he has taken to ask the United States Administration to sort the matter out because things are being put on the congressional record which imply that British Ministers have lied to the House of Commons. In those circumstances, one would expect representations to be made to the United States Administration—I should like to see evidence of this— to stop this going on and to clear the matter up once and for all.

This matter is extremely important not just because of the question of veracity and the discrepancy between the records of Congress and of this House but even more fundamentally because this all stems from the claim at the nuclear planning group meeting at Montebello in 1983 that stockpiles in Europe were being reduced, when in fact older weapons were being taken out and replaced by far more dangerous weapons in terms of escalation of the arms race.

Mr. Robert Atkins

Boring.

Mr. Clay

Conservative Members may find it boring, but to me a decision that effectively escalates the nuclear arms race and lowers the nuclear threshold in terms of battlefield weapons in Europe is one which, even more than previous decisions by the British Government, the United States Administration and NATO, endangers the whole future of the world.

Mr. Robert Atkins

Boring.

Mr. Clay

The hon. Gentleman may find it boring but to me it is a serious and terrible matter. It is essential that we should have a clear understanding about whether Ministers have been misleading this House or whether Dr. Wagner has been misleading Congress.

9.22 pm

Mr. A. E. P. Duffy

When the Secretary of State presented his annual defence White Paper I was reminded of a conjuror. The right hon. Gentleman flourished facts and figures like Paul Daniels plucking aces out of the air, but from the right hon. Gentleman's hat came no mere rabbit but the most sophisticated weapons systems, and one wondered how long he could go on getting away with it. The Navy is to get the latest type 23 frigates and the type 2400 diesel-electric submarine. The Army has the Challenger battle tank and will get new personal arms for the infantry. The RAF has the Tornado interceptor and the prospect of a successor programme. A division-sized unit — 5 Airborne Brigade backed by 3 Commando Brigade Royal Marines — based in the United Kingdom is earmarked for out-of-area capability and deployment.

If all goes as the Government plan, the result will be numerically smaller but better equipped and thus more effective forces. Naturally, Conservative Members seemed excited by what the right hon. Gentleman said and early contributors to the debate described his speech as excellent. Growing scepticism set in later however. According to the Secretary of State, there is to be a host of new and expensive weaponry, enhanced fighting capability, and no change in the plans to go ahead with the Trident strategic deterrent programme. Yet we gathered from the Chairman of the Defence Select Committee, the right hon. Member for Spelthorne (Sir H. Atkins), that there will be a cut in real terms in the resources devoted to defence from 1986-87.

As yet, unlike two years ago, there are no screams of anguish from the Treasury, so we must ask whether the Secretary of State's scenario is realistic. If Conservative Members say yes, we are bound to ask where the money will come from. We can already spot signs of how the trick is being done. Cuts in service manpower levels are being maintained and the services are being made responsible for finding any extra men that they need by economising elsewhere—in the tail, for example.

Mr. Heseltine

Quite right.

Mr. Duffy

I understand that argument, but I wish that the hon. Member for Leeds, North-West (Dr. Hampson), who challenged my right hon. Friend the Member for Llanelli (Mr. Davies) to say where the cuts were coming from, were here to hear the Secretary of State say that.

In the Navy, shore training is being trimmed, flying time for Royal Air Force pilots has been reduced and the Army faces a reduction in the manpower pool that it uses to keep units up to strength when men are sick, away on leave or on courses.

The first concession made by the Secretary of State was his admission to an outflow. In other words, there is a problem of retention. It was revealed that outflow is on the increase — 34,000 last year. Incredibly enough, he blamed competition from industry, yet there is massive unemployment and no sign of employment picking up.

Mr. Robert Atkins

Would Labour give them the pay rise?

Mr. Duffy

Again, it was the right hon. Member for Spelthorne who wrung from the Secretary of State the admission that the pay rise might yet cost the fleet a new frigate. The hon. Member for South Ribble (Mr. Atkins) would not jibe like that if it were to cost him the successor to the Tornado.

There is a growing reliance on Territorials and reservists, not to reinforce the regulars but to bring them up to their war strength. In an attempt to combat rising equipment costs, the Government are making a great effort to increase competition in the defence procurement process. The defence bill will keep increasing while the Treasury demands—and gets—cuts. Nevertheless, the Secretary of State had the effrontery to charge the right hon. Member for Spelthorne and, through him, the Select Committee with a gross distortion of their presentation to the House. They were charged with unnecessary concern for a new policy at the risk of destabilisation.

The right hon. Member for Spelthorne was quite properly concerned about how the defence budget would be managed in the future, especially in the early 1990s. The report says that, although defence spending in 1986-87 and 1987-88 will grow in cash terms by 2.8 per cent. or 1.8 per cent. respectively, the outlook in real terms is gloomy", there being a fall in both years. On the basis of Ministry of Defence data, we find that, within two years, the defence budget, excluding the Falklands, will be £970 million lower in real terms. The outlook in the short term is not too bad, but is this the thin end of the wedge? Alarm bells are not necessarily ringing yet, but are these portents as Trident begins to bite? Shall we see programmes slipping to the right?

Now that the Ministry of Defence no longer needs to spend its annual budget or lose it, there is greater scope than ever for letting expensive new re-equipment programmes drop behind schedule. It is plain from the defence White Paper that the Secretary of State is studiously avoiding firm schedules and timetables. There is a choice example of this in paragraph 206. The issue was taken up in the debate on last year's White Paper. T'here was anxiety among Conservative Members as well as Labour Members about how we were responding to the pleas of SACEUR — General Rogers — and others to achieve better sustainability, notably in bread and butter items such as ammunition stocks. The Secretary of State sets out specifically in paragraph 306 what the Germans are doing to increase spending. He tells us by how much they plan to increase expenditure and by how much they intend to continue doing so. What about the United Kingdom? It seems that funds have been earmarked over the next few years. No figures are given for the United Kingdom.

The management of the defence budget in the 1990s will present major problems. No one who heard the Front Bench opening speeches could possibly doubt that. As the extraordinary report of the Select Committee on Defence states: "These will lead to cancellations, slowing down of acquisitions and the running on of equipment beyond its economic lifespan." Given the present equipment programme, there will be enormous scope for the Secretary of State to glaze over the details of procurement.

The Royal Air Force is in the throes of its greatest re-equipment programme for 30 years. The aerospace industry's greatest worry is that it should have a follow-on aircraft. The right hon. Member for Plymouth, Devonport (Dr. Owen) has observed that the successor programme is not even in the long-term costings. The Army's modernisation programme centres on the new Challenger battle tank. We had a further statement on procurement of it this afternoon from the Secretary of State. The Army also has on order new combat vehicles for the infantry. We heard from the right hon. Gentleman that GKN Sankey, quite properly, is to be given orders beyond the initial one of 250 vehicles, for which tenders have been announced. Members on both sides of the House will have been glad to hear that announcement.

It is clear that the Navy will have to fight to maintain its surface fleet of frigates and destroyers at its present long-term strength of 50. The right hon. Member for Spelthorne argued that five vessels will have to be ordered by the end of next year to preserve the present age structure, which is perhaps more important than numbers. When the hon. Member for Beverley (Sir P. Wall) challenged the Secretary of State to say when he would follow on the first order of a type 23, he did not respond. Anxiety was expressed over replacements for the two amphibious landing vehicles, HMS Fearless and HMS Intrepid. We heard about the Government's commitment to the northern flank but we did not hear about the need for a national capability in the event of ruined ports.

There is the sorry story of the delayed entry into service of the Nimrod airborne early warning aircraft, to which reference is made in paragraph 413 of the White Paper. That has not been mentioned so far during the debate, together with the enormous escalation in cost. That reminds us that programmes can slip without the encouragement of the Secretary of State.

What of the other two problem areas that have not been mentioned so far but which I hope will be taken up by the Under-Secretary of State for Defence Procurement? I hope that he will address himself to the delays in the development of the Tornado F2 radar. Has agreement yet been reached on a common new IFF system?

The details of equipment collaboration on an Alliance basis are set out on page 17 of the White Paper. Programmes are in development or in early study phases, such as the multiple-launch rocket system and terminally guided warheads for that system, TRIGAT, ASRAAM, the long-range stand-off missile, the NATO frigate, the naval ASW helicopter and the Harrier GR5 as well as the European fighter aircraft. I recall again the fears of the Select Committee on Defence on cancellations, slowing down of acquisitions and the running on of equipment beyond its economic lifespan. Is there a Member present who is prepared to wager on the survival of the collaborative programme? If there is, I wonder what odds he would lay against the emergence of it in its entirety in the 1990s. The evidence the Select Committee has received from the MOD has not allayed its or our fears.

The Secretary of State was extremely fortunate this afternoon in his right hon. Friend the Member for Spelthorne. The House knows that the right hon. Member is a kind, gentle and courteous man. If his damning report, couched in such blistering language, had been in the hands of some other hon. Members whom we all know, the Secretary of State would have had a much more difficult time. This is not a reflection on but a compliment to the right hon. Member for Spelthorne. If the report had been in the hands of some hon. Members it would have been a much more potent and destructive instrument. I shall give a further quote from the document:

Our purpose was frustrated by vague and evasive answers and elegant but unhelpful hypotheses especially regarding the planning assumptions, the in-service dates and the phasing of expenditure. I cannot recall a report like that from a Select Committee. Does it, then, make sense to allot to Trident a large slice of a fixed defence budget with all that means in terms of the dilution of the national contribution to NATO's non-nuclear order of battle? That is the key question before the House tonight, yet the Government say in paragraph 113: it is our firm belief that no alternative use of British resources would provide anywhere near such a strengthening of collective Alliance deterrrence to aggression. Let me repeat that, because it is basic to the Government's position on Trident: it is our firm belief that no alternative use of British resources would provide anywhere near such a strengthening of collective Alliance deterrence to aggression. That claim confuses British policy and commitment with the Alliance's capacity and need. Consequently, Trident threatens to become a wasteful duplicative system within the Alliance, not just within the United Kingdom. Ultimately, as the Select Committee warned in paragraph 102 of its report, it puts the conventional equipment budget at risk.

That is where the Opposition come in, because that is how we see the way forward — through a renewed emphasis on conventional arms and increased cooperation, not just within Europe but within the Alliance, and a renewed strengthening of arms control.

The past year has seen a growing public debate, as the defence statement acknowledges, about NATO's strategy of flexible response and forward defence in the light of changes in the military balance and about the roles of conventional and nuclear weapons. It is to the credit of the Secretary of State that that point has been covered. The Select Committee, correctly, claims some credit for that. Those of us who have taken part in defence debates in recent years will recall that some hon. Members present can claim credit for the new format.

The Opposition believe that if the NATO strategy contained on page 12, and especially its underlying argument of flexible response, is to remain credible and acceptable, there must be an enhancement of conventional forces. We recognise that the two factors of overriding importance to defence planning are the time factor and the force levels. The NATO concept of an integrated forward defence requires, without a doubt, a crisis management decision-making process which could function rapidly, well and cohesively. NATO's response to the threat requires an improvement of conventional force levels.

Two basic needs cry out for attention. First, there is the need to eliminate existing shortcomings and realise agreed goals, especially in sustainability and infrastructure. Secondly, there is the need to modernise and increase active and reserve forces in quantity and quality.

The Opposition are not asking for much. We are not asking for the most sophisticated and advanced systems. We are, like a growing body of opinion within the Alliance on the professional side, asking for improvement at the other end of the spectrum. Lord Carrington made such a plea at the conference to which the hon. Member for Wealden (Sir G. Johnson-Smith) referred earlier. The hon. Member for Beverley, re-elected as president of that assembly, stated as much in his opening address.

Another matter that we believe that the United Kingdom should pursue more vigorously — there were urgent calls for this from both sides of the House—is co-operation, on both a European and an Alliance basis. Over the years, European co-operation on defence equipment has become increasingly important and there are three main reasons why closer European arms co-operation has become imperative. The first is the sharp rise in the real cost of weapons systems from one generation to another, which results in most countries buying ever fewer aircraft, ship missiles and other major weapons systems.

Research and development activities in the various European nations overlap, leading to duplication of effort and considerable waste. Moreover, the benefits that could be derived from the economies of scale cannot be exploited. We simply must seek military value for the taxpayers' money spent on defence, particularly as it is unrealistic to expect Governments to spend much more on defence equipment at a time of low economic growth and mass unemloyment. The only course is to get better defence from the resources available, as David Greenwood argues.

Secondly, we need to maintain a healthy scientific, technological and industrial base in Europe. We have heard arguments about the importance of strengthening the independent European programme group.

The most important reason for co-operation is the urgent need for greater military efficiency within the Alliance. There are many examples illustrating a lack of standardisation. For years I have heard pleas in the House for improvements in standardisation, rationalisation and operability. I looked up recently some of the facts that the hon. Member for Beverley gave us about duplication in the Alliance. If hon. Gentlemen check those facts, they will be appalled at the overlapping in the Alliance and the consequent wastage.

The view of the Government, as stated in para. 127 of the Estimates, is that the prospects for arms control in the coming year are, as ever, difficult to predict. I wonder whether the Government are being a little too gloomy. Of course, none of us can deny the difficulties to which they refer, but that does not mean that the Opposition will not be looking for progress in the next 12 months, first, because we passionately desire dialogue and a peaceful, soundly based settlement of disputes, as my right hon. Friend the Member for Lewisham, Deptford (Mr. Silkin) stressed, and, secondly, because, with the arms build-up / and the economic crisis affecting not only the Alliance, but the Third world, as my hon. Friend the Member for Edinburgh, East (Mr. Strang) reminded the House, it is vital that if the mad arms race is to be stopped, the balance of forces must be reduced by negotiation. That is not only our wish, but, we firmly believe, the desire of the countries of Eastern Europe.

However, if there are to be genuine discussions, one must stop doubting the other's sincerity, as my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) argued. Nothing is more sterile than the almost systematic rejection of any approach.

The leaders of nations have to give each other more trust, because their peoples want that; they want to overcome fears and insecurity in international relation-ships. History abounds with examples. We heard an encouraging argument on those lines from my right hon. Friend the Member for Lewisham, Deptford. If the confidence to live and let live is built up on both sides it should not prove impossible to reflect a new-found security by means of progressive disarmament proposals.

Here is a job for all of us, but especially for our political parties and our leaders. The present situation is grave. Those with political power must have the will to discover a better way to achieve peace than through amassing nuclear weapons. The future of humanity depends on it.

9.43 pm

The Parliamentary Under-Secretary of State for Defence Procurement (Mr. John Lee)

Before answering the detailed points made in the debate, I shall spend a little time talking about the jobs that are dependent on our expenditure in both the public and private sectors of our economy.

We calculate that the jobs of about 1.2 million British people—about 5 per cent. of the employed labour force —are dependent in some way on defence expenditure. That 1.2 million breaks down as 325,000 in the armed forces, 174,000 employed by the Ministry of Defence, and 700,000 jobs throughout the United Kingdom industry. Of those 700,000 jobs, almost 400,000 stem directly and indirectly from our equipment programme. A further 130,000 jobs are sustained by defence equipment sales overseas, from forecast receipts of some £2,500 billion in 1985–86.

The real increases in equipment expenditure since 1979–80 have not been matched by increases in employment, mainly because of a significant improvement in United Kingdom productivity, but also because of an increasing emphasis on less labour-intensive project areas, such as software.

However, looking to the future, it is not easy to project the jobs trend. On the one hand, the ending of the 3 per cent. real increases, the drive for greater efficiency, and the increasing emphasis on software point to job reductions, but on the other, the savings that we are now seeing from competition provide the resources for additional or enhanced procurement programmes, and increasing international collaboration should theoretically provide an opportunity for greater export sales.

My right hon. Friend the Minister of State for Defence Procurement, when he opens tomorrow's debate, will talk at length about procurement and the increasing success of competition policy and defence sales.

I should like briefly to pay tribute to those civil servants whom we employ, whether they be in the Procurement Executive, in our research establishments — I have visited nearly all our main ones since I have held this office —the dockyards or elsewhere.

Throughout the Ministry of Defence there is a continuing drive to increase productivity and efficiency, and to involve the private sector wherever possible. I make no apology for that. However, that does not mean that we are not deeply appreciative of those who work for us— their loyalty, integrity and skills.

The opening speech of the right hon. Member for Llanelli (Mr. Davies), of whom we are fond, was rather disjointed. He did not seem to have his heart in the subject in the way that the right hon. Member for Lewisham, Deptford (Mr. Silkin) did in his more heavyweight philosophical speech. We had extensive use of the Walworth road cutting service, and selected quotes from the Select Committee report, but two questions from Conservative Members scuppered him.

Early on, my hon. Friend the Member for Dorset, South (Viscount Cranborne) asked specifically whether it was Labour policy to increase or decrease defence expenditure. We received no answer to that. Perhaps the hon. Member for Sheffield, Attercliffe (Mr. Duffy) would care to reply to it. Clearly, he wishes to remain silent. Therefore, we have had no answer to that question.

My hon. Friend the Member for Ashford (Mr. Speed) asked about nuclear depth charges. The right hon. Gentleman gave an extremely muddled answer, which exposed the ludicrous unilateral posture of the Labour party. That was exposed, emphasised and commented on by the right hon. Member for Plymouth, Devonport (Dr. Owen).

My right hon. Friend the Member for Spelthorne (Sir H. Atkins) and the right hon. Members for Llanelli and Devonport talked about the pressure on our budget. By April 1986 we shall have completed seven consecutive years of real growth. The United Kingdom budget is the second highest in NATO in absolute terms and per capita, our gross domestic product percentage is the highest of our major European allies, and the proportion of the budget that we spend on equipment is the highest of any NATO country. On NATO force goals the Select Committee commented:

high force goals have been set by the United Kingdom and a high proportion of these have been met. Regarding the future, we never planned to have 3 per cent. real growth after 1985–86. The Select Committee sees "worst case" projection of the defence budget in 1987–88 as £970 million less in real terms than that in 1985–86, but that is based on rather speculative hypotheses. At the same time, the Committee sees potential for £700 million savings by efficiency measures. Even on its own terms, the gap is extremely small in proportion to the £18 billion to £19 billion overall figures for defence. But the benefits of competition could well be greater than envisaged by the Committee. Earlier this afternoon, my right hon. Friend the Secretary of State drew attention to the £100 million or so saving on the MCV80 competition, with the contract going to Guest, Keen and Nettlefold. Of course, we also had the competition for the RAF trainer which produced savings of about £60 million.

But the fact remains that defence expenditure is now at a level that is £3 billion higher per year in real terms than when we came to office. That is an extremely good record, of which Conservative Members can justifiably be proud. Several hon. Members raised the subject of Trident. Arguments against Trident, which we have all heard before, have been repeated. However, I shall comment briefly on the Government's position. Incidentally, I was particularly grateful for the support of several of my right hon. and hon. Friends, including my hon. Friends the Members for Gosport (Mr. Viggers), for Wealden (Sir G. Johnson Smith), for Norfolk, North-West (Mr. Bellingham) and for Tayside, North (Mr. Walker). We are committed to the maintenance of an effective British strategic nuclear deterrent. It is a policy that has been followed by successive Governments since the 1950s. It convinced them and it convinces us. The reasons for the selection of Trident to meet that commitment have been fully spelt out in our open government documents and our defence White Papers. I commend to the House the discussion of the case for Trident that is set out on pages 6 and 7 of the 1985 statement on the Defence Estimates that we have been debating.

I turn now to the points raised today and to the question of cost and affordability. The latest estimate is just under £93 billion at 1984–85 prices. Trident costs are often referred to in the press and by the Labour party as "spiralling" or "out of control" or, if they are feeling charitable, as just "escalating". Such phrases are repeated ad nauseam, but they are simply not true. Let me say in the clearest possible terms that there has been no real increase in the estimate for Trident D5 since it was first announced — no real increase at all. The difference between the current and original estimates is due entirely to inflation and exchange rate movements. Over the same period, however, the defence budget overall has increased in real terms. Thus, there is room both for Trident and for improvements in our conventional capability.

We listen carefully to the right hon. Member for Devonport when he talks about conventional expenditure. However, his arguments about their being a realistic nuclear alternative to Trident in the 1990s are not very convincing. With respect, it is not satisfactory at this stage to talk about possibly running on Polaris with increasingly expensive refits, or perhaps encouraging British Aerospace to produce a new weapon. [Interruption.] I believe that on previous occasions the right hon. Gentleman has mentioned the running on of the Polaris fleet. He also mentioned the possibility of cruise missiles on submarines. In our view, those are not serious or realistic options.

Dr. Owen

The Pentagon has spent money on putting cruise missiles on submarines. That has not been done for no purpose. As far as the Pentagon is concerned, they are not the ultimate deterrent, but they are an adequate deterrent.

Mr. Lee

That would be right as part of a mixed force, but there is no realistic alternative to Trident when it comes to our major strategic deterrent and our weapon of last resort.

Mr. Andrew F. Bennett

Will the hon. Gentleman give way?

Mr. Lee

I am sorry, but I shall not give way.

My right hon. Friend the Member for Spelthorne, my hon. Friend the Member for Beverley (Sir P. Wall) and the hon. Members for Newcastle upon Tyne, North (Mr. Brown) and for Attercliffe mentioned escort numbers. We are committed to maintaining 50 escort vessels. We are talking broadly of ordering three type 23 frigates a year. The order for the first of class, HMS Norfolk, was placed last year with Yarrows, and tenders for the following three —O2, O3 and O4—will be invited in the late summer.

Several hon. Members mentioned amphibious capabil-ity. I can say that Fearless and Intrepid will certainly continue in service well into the mid-1990s. Studies are in hand for a capability beyond the 1990s, and decisions will be taken by Ministers in that whole area later in the year.

A number of hon. Members have spoken about merchant shipping, particularly my right hon. Friend the Member for Taunton (Sir E. du Cann), who always speaks about merchant shipping. The hon. Member for Newcastle upon Tyne, North and my hon. Friend the Member for Windsor and Maidenhead (Dr. Glyn) also spoke on the subject. As the House knows, our merchant fleet plays a significant role in our defence planning. Consequently, as the defence White Paper makes clear, the recent decline in the merchant fleet has caused us concern. I repeat that, at present, the overall size of the merchant fleet is adequate to meet our foreseeable defence needs, with the exception of deep-sea trawlers for the minesweeping role. I believe that I am right in saying that the Select Committee acknowledged that. In the case of deep-sea trawlers, we have studies urgently in hand to find alternative ways to meet the requirement.

Because of our concern at the possible prospects for the future, the Department of Transport commissioned its study of future availability of merchant vessels to meet our requirements. That study will very shortly be completed, and as soon as its results are available, they will be carefully examined. I cannot predict in advance what the results of the study will be, but I note the comments on publication made by my right hon. Friend the Member for Taunton, and we shall consider that.

The strategic defence initiative is a research programme intended to investigate the technical feasibility of defences against ballistic missiles. Such research is permitted under existing treaties, and it is entirely prudent that the United States should conduct this work. I am grateful for the contribution made by my hon. and learned Friend the Member for Colchester, North (Sir A. Buck) in supporting our Alliance and our American allies.

As for the broader implications of SDI, the Government's position rests firmly on the points of agreement reached by my right hon. Friend the Prime Minister with President Reagan in December of last year. First, the United States, and Western, aim was not to achieve superiority but to maintain balance, taking into account Soviet developments. Secondly, SDI-related deployment would, in view of treaty obligations, have to be a matter for negotiation. Thirdly, the overall aim is to enhance, not undercut, deterrence. Finally, East-West negotiation should aim to achieve security with reduced levels of offensive systems on both sides. This is. the purpose of the resumed United States-Soviet negotiations on arms control, which we of course warmly welcome.

As my right hon. Friend the Prime Minister has made clear, we hope that our scientists will be able to share in this research. We are actively discussing with the United States and with our European allies the details of this complex matter.

The hon. Member for Yeovil (Mr. Ashdown), my right hon. Friend the Member for Taunton and my hon. Friend the Member for Weston-super-Mare (Mr. Wiggin) referred to the problems of Westlands. Obviously, it is of considerable strategic concern to the United Kingdom, and we want the company to continue. The Ministry of Defence has about £150 million-worth of orders with it, for a mix of 29 Sea Kings and 13 Lynx helicopters, which should be completed by around spring 1987. We are discussing further possible orders of Sea King and Lynx.

The W30 has been mentioned, but it would be wrong to buy costly items of equipment from Westlands until the services have established a firm requirement for it. The delay is due to a genuine review of the Army's needs. Its decision on the requirement will not be made until late autumn. Nevertheless, because of the strategic importance of Westlands, we are watching over the situation and the takeover extremely closely.

A number of hon. Members have spoken about EFA —my hon. Friend the Member for South Ribble (Mr. Atkins), as usual, and my hon. Friends the Members for Woking (Mr. Onslow), for Dumfries (Sir H. Monro) and for Tayside, North.

As we are approaching a crucial period of negotiations the House will understand that I cannot say a great deal about the EFA project tonight. There have been differences between the partners over a number of issues. None the less, progress was made by Ministers in Rome towards an agreed position on the size of the aircraft.

The next round of discussions will help to show whether our further requirements — on, for instance, design leadership and work share—can be met. I can assure the house that we would not be prepared to enter into the programme if it undermined the future well-being of British industry.

I take the point made by my hon. Friend the Member for South Ribble about an early decision. As a Lancashire MP myself, I understand the present concern in British Aerospace at Warton and Salmesbury.

Several hon. Members have mentioned problems relating to recruitment and retention. In 1978–79, the total premature voluntary retirement by male members of the Armed forces was just over 12,000—a rate of 4.4 per cent. It fell to 1.7 per cent. in 1981–82, and the latest figures for 1984–85 show a level of 2.5 per cent. I acknowledge that there is a rising trend of applications to leave the forces prematurely, and the House can be assured that we are keeping the question under very close scrutiny.

It being Ten o'clock, the debate stood/ adjourned.

Debate to be resumed tomorrow.