HC Deb 13 June 1985 vol 80 cc1035-66


Order read for resuming adjourned debate on amendment to Question [12 June]:

That this House approves the Statement on the Defence Estimates 1985, contained in Cmnd. 9430.—[Mr. Heseltine.]

Which amendment was 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

[Mr. Denzil Davies.J

Question again proposed, That the amendment be made.

Mr. Speaker

No fewer than 32 hon. and right hon. Members have intimated their wish to participate in this important debate. I propose to impose the 10-minute limit on speeches between 6 pm and 8 pm. I appreciate that this may mean that some Privy Councillors will speak during the period when the 10-minute limit is imposed. I hope that they and the whole House will feel that that is fair in the circumstances.

4.47 pm
The Minister of State for Defence Procurement(Mr. Adam Butler)

I shall reflect only briefly on yesterday's debate before discussing my main theme. I was struck by the contrast between the two sides of the House — between the confidence and clarity on the Government side, and the confusion on the Opposition side. Most of the confusion came from the Opposition Front Bench, although one has some sympathy for the right hon. Member for Llanelli (Mr. Davies) in having to play the almost impossible role of Labour's defence spokesman. The right hon. Gentleman must try next time to find a better argument to justify his apparent support for the use of tactical nuclear weapons at sea, against submarines, and total opposition to them on land.

There was also considerable confusion between the two partners of the SDP-Liberal alliance, especially in the mind of the right hon. Member for Plymouth, Devonport (Dr. Owen), who seemed at one stage to believe that deterrence could be maintained with an obsolescent system, but later in the debate, if he was not arguing for the continuing deployment of Polaris, appeared to prefer the sea-launched cruise to Trident, which would combine higher cost with lower effectiveness.

I shall be more charitable about the report of the Select Committee on Defence, whose message was expounded in a constructive speech by my right hon. Friend the Member for Spelthorne (Sir H. Atkins). The report presents a very definite challenge to the Government, but—and I seek for the politest of words—the Committee's interpretation of the facts is at variance wth mine. What the report does is to draw attention to the potential for savings throughout the defence budget, and it warmly commends my right hon. Friend the Secretary of State for his great energy in that regard. It makes special reference to the economies which can be, and are being, achieved through effective procurement. This, of course, is a prominent feature in the Statement on the Defence Estimates, and it is on this vital aspect of our defence strategy that I want to concentrate my remarks this afternoon. We can fulfil our defence commitments only if we have an efficient and effective procurement policy.

As the Statement on the Defence Estimates shows, and as my right hon. Friend reiterated yesterday, since this Government came into office in 1979 there has been a substantial real increase in the defence budget as a whole. Perhaps most significantly, the proportion of that budget spent on equipment has risen from 40 per cent. in 1978–79 to 46 per cent. in 1985–86. That is an increase of 40 per cent. or, if expressed in current money terms, of nearly £2.5 billion. Those facts provide the Government with the answer to most of their critics.

With this dramatic increase in the equipment budget the Government have gone a long way to meet the almost insatiable requirements of the armed services and to strengthen still further our contribution to NATO. However, as the sophistication of modern weaponry and systems increases, so does the cost—[Interruption.] I am sorry that the right hon. Member for Llanelli has only just joined us. I was not offensive towards him, and I would have preferred him to hear the remarks that I made about him. Nevertheless, we are delighted to see him.

Sophistication adds to cost, and while the accent in the last six years has been on making more resources available, our task now is to concentrate on maximising the return from those resources. Our procurement policy is dedicated to that end. We seek the maximum benefit for our armed services, the greatest satisfaction for the taxpayer, and the healthiest state of our defence industry.

Success should be measured not primarily by the expenditure committeed but by the output—by what is achieved for the money spent. To attain that target of best value for money we must operate our procurement policy in as commercial a manner as possible. With certain obvious exceptions, defence procurement is a commercial activity. The procurement executive within the Ministry of Defence must see itself essentially as a commercial organisation in its structures, practices and attitudes, and particularly, of course, in its relations with its suppliers.

The most obvious and important manifestation of this new commercialism is the exercise of competition. Properly used, competition will ensure the most efficient and effective use of our industrial resources. It embraces so much more than just getting the best price for any particular equipment, however important that is. Competition will stimulate innovation and the advance-ment of technology. It will improve quality and service. While better meeting the needs of the MOD as customer, it will strengthen the efficiency and competitiveness of British industry. Within some of the wider considerations of our procurement policy, our maxim now is, "Competition, unless … ".

Competition is, of course, not new to the MOD, but over the last two years there has been rather more than just a shift in emphasis in ministerial policy. There has been a change of gear, and increasing momentum. The results of this can be seen in the response of industry as it discovers that the MOD has become an increasingly demanding customer. The results can be seen in the way that our contracts are placed—and in the prices that we pay.

Over the past 18 months Ministers have carefully monitored the nature of contracts. The latest results show that the proportion by value of new contracts placed as a result of competition, or otherwise by reference to market forces, is running at more than 60 per cent., while the proportion of those placed on a cost-plus basis is only 7 per cent. of the total. Overall, the total value of work placed last year as a result of competition rose by four to five percentage points.

As for individual prices, the Select Committee chided us for including only one specific example of savings—that of the RAF trainer — in the Statement on the Defence Estimates. I shall now give some more examples of the success of competition policy, but I first enter one caveat. As it is rarely possible to know what we would have paid in the absence of competition, it is difficult, if not impossible, to quantify precisely what savings result from competition or, indeed, to forecast total future savings with accuracy. Nevertheless, we can produce some illustrative and guiding figures.

In many cases details of past savings are regarded as commercially confidential, but, as the Select Committee knows, I have made available to it classified information about a number of contracts where major savings have resulted from competition.

The case of the RAF trainer has been well and publicly aired. There can be no question but that we had a very keenly fought competition, and the estimated cost saving of about 35 per cent. was striking by any standards. That competition produced benefits for the Department other than just the price tag. The contract is on a firm price basis, fixed in cash terms, and with no risk to the MOD from cost escalation or foreign exchange rates. The right hon. Member for Llanelli may also wish to know that competitive pressures on the contenders produced more jobs for British industry, because the companies strove to maximise the United Kingdom content of their bids, while the final stages of the competition produced more offset work against the Garrett engine. We can expect that what happened in that case will happen in other competitions.

Indeed, the basic trainer competition was exceptional only in the interest that it generated, not in its principles. Competition is being applied with equal vigour in other areas—for example, in naval shipbuilding. The recent competition for two mine countermeasure vessels which was won by Vosper Thornycroft resulted in prices that were some 12 per cent., or nearly £10 million, below those included in our costing.

Although the first of class of the new type 2400 diesel-powered submarine — HMS Upholder — was ordered from Vickers, competitive tenders have already been invited for the next three submarines from Yarrows, Vickers, Scott Lithgow and Cammell Laird.

Let me clarify the position of the type 23 frigates. The first type 23 was ordered from Yarrows last year. My right hon. Friend announced on 28 January that Swan Hunter would be invited to tender for the second. Tenders for the third and fourth will be invited at the same time late this summer on a competitive basis from the frigate shipbuilding yards.

Mr. Churchill (Davyhulme)

Is my hon. Friend not concerned that, even though the type 23 is cheaper and simpler than the type 22, it is none the less three and a half times more expensive in real terms than the Leander frigate? Does that not hold great implications for containing defence expenditure within a zero growth limit?

Mr. Butler

I am well aware of the interest that my hon. Friend takes in these matters, and he is well aware of what we have said about the targets for the numbers of frigates and destroyers. It was because of the escalation of the cost of frigates and destroyers that we had to see whether it was possibleę to produce a vessel with an adequate capability at a significantly lower cost. Much will depend on the competition. The likely price of the type 23 will be 75 per cent.—perhaps less—of the type 22 which it will replace.

Sir Patrick Wall (Beverley)

Will my hon. Friend make quite certain that in future when there is a competition all sides know the rules? He will know that in respect of the competition for the RAF trainer there was a strong feeling that the rules were not known.

Mr. Butler

That competition was carried out totally fairly, but in reviewing the circumstances of it we may well find that procedures will be improved in one or two respects. It is essential to ensure not only that even-handedness is done, but, as so often in such cases, that it is seen to be done.

Mr. John Wilkinson(Ruislip-Northwood)

Would not the most publicly reassuring thing that the MOD could do be to publish the price tags of the final bids?

Mr. Butler

There are arguments for that, and I have raised the matter with individual industrialists. There are some obvious disadvantages, but also some advantages, and I gather that it is practised in some regards in America. We certainly need to consider it.

My hon. Friend the Member for Aberdeen, South (Mr. Malone) raised the subject of the OPV 3 in yesterday's debate. When firms were invited to submit their ideas for an enhanced OPV-type vessel within a cost bracket of £25 million to £35 million, it was made clear that this was without any commitment by the Ministry of Defence to proceed. We have looked at the proposals put forward, and those by two firms — Hall Russell and Vosper Thornycroft — are judged to have the potential for providing a vessel of the type specified which would offer good value for money. We think it right to tell the firms the results of the evaluation, and this is now being done. It remains the case, however, that the OPV 3 has not secured a place in the forward defence programme when set against competing priorities for the Royal Navy and for the other services.

My hon. Friend the Parliamentary Under-Secretary of State for Defence Procurement, who wound up yesterday's debate, has asked me to point out that with regard to the amphibious vessels as possible replacements for Fearless and Intrepid he inadvertently said that Ministers expected to make a decision "this year", when he should have said "next year". We need to be sure that these matters are properly understood.

Mr. Michael Marshall (Arundel)

As a member of the Select Committee, I appreciate the examples given by my right hon. Friend the Minister about the value of competition, but will he take this opportunity to reiterate the importance of buying British and maintaining a British industrial base in these matters? Will he comment on the overall figures, and also say something about procurement for space matters in relation to Skynet and for a future share in the NATO satellite?

Mr. Butler

I was concerned that my speech was getting too long, but I shall be coming to the proportion of our buy which is British. It is very high and I hope that it will remain so.

With regard to land systems, my right hon. Friend the Secretary of State referred yesterday to a saving of some £100 million from the competition for the MCV80. That is a healthy 12 per cent. or so, and in cash terms, which seems to be the standard most used in this debate, it is equivalent to one type 23 frigate.

I wish now to tell the House of another successful cost-cutting competition and to make an announcement. We intend to place a contract with Vickers Defence Systems for the development and initial production of a new armoured repair and recovery vehicle for Challenger tanks. The ARRV is an important force-multiplier and the new vehicle will have a vital role in keeping our tanks in the front line, where they should be. This contract has been won by Vickers after a competition which has resulted in a saving on the initial budgetary estimate for the project of almost 20 per cent. This contract will include production of the first batch of some 30 vehicles. Once development is complete, I intend to meet the bulk of the Army's requirements for ARRV by a further competition. I am sure that the Select Committee and the House will welcome these concrete examples of the success of our policy.

Mr. Kevin McNamara (Kingston upon Hull, North)

Can the right hon. Gentleman give the cash equivalent for that saving?

Mr. Butler

I cannot give that figure at the moment, but I hope that the hon. Gentleman will welcome a saving of some 20 per cent. as a considerable achievement, thus making resources available for other purposes. If the hon. Gentleman does not wish to do so now, he will have the opportunity to lavish praise on the procurement executive and Ministers at the MOD when he makes his own speech.

The defence research establishments have carried out some fine work over the years, but development generally, and especially short-term development, will come to fruition more quickly and at lower cost if it is commercially driven. One of the Government's aims, therefore, is to make the best use of industry's capacity for innovation, limiting what is done in-house to essential activities of which only the research establishments are capable and to longer-term research.

Viscount Cranborne (Dorset, South)

My right hon. Friend has been very generous in giving way. There is an important Admiralty research establishment at Portland in my constituency. My right hon. Friend will be aware of the worldwide reputation of that establishment in anti-submarine warfare, but is he aware of the effects of the low salaries paid to the teams working there? The Government depend upon the highly qualified staff there to assess the work of industry. Is my right hon. Friend aware that the loss of highly-qualified staff from that establishment to outside industry affects the MOD's ability to make the right assessments for outside contracts?

Mr. Butler

The Government are always worried about the loss of highly qualified staff. The position of ARE, Portland has not been drawn to my attention before, but I know of one or two other areas where a potentially serious situation is developing. I assure my hon. Friend that I will examine the situation at Portland to see whether there is anything that we should or can do about it, and I am grateful to him for drawing it to my attention.

I want to refer to the use of cardinal point specifications in relation to research establishments. Those who follow these matters will be aware of these, but I shall give a brief explanation of them now. Cardinal point specifications are given to industry for a proposed project and contain a brief statement of the essential features of performance and support necessary to meet the services' needs. This means that industry is free to innovate and to propose solutions which meet those needs, but which also best suit their own capabilities and may have better export potential.

This approach is being applied for the first time to a major ship and its weapons systems — the new "one-stop" support ship for the Royal Fleet Auxiliary, the auxiliary oiler replenishment. Industry has been asked to take part in a design-and-build competition to find a prime contractor for the first two vessels. We are looking to the prime contractor to take on total responsibility for the design, building and fitting out of the ship. Another example of this was Phoenix.

I have stressed the benefits of competition, and they are clear in many cases, but it is not a policy which is. applied blindly, and it is not a short-term policy. We have to look to our longer-term interests, and particularly to security of supply.

I shall now deal with one of the points raised by my hon. Friend the Member for Arundel (Mr. Marshall). Our record of placing business with British industry is one of which we can be proud. Allowing for necessary adjustments associated with collaborative projects, nearly 95 per cent. of our orders go to British companies. Nevertheless, we do not owe them a living. The best guarantee that those companies have of obtaining MOD business is to demonstrate that they can best meet our needs.

In a number of cases, of course, competition will not be practicable for prime contracts, and it is in such cases that we have a major problem to ensure best value for money. One answer lies in requiring the maximum possible level of competitive subcontracting. In the code of practice which we are currently discussing with industry it will be made clear that the proportion of competitive subcontracting in a bid will be a highly relevant factor. I do not doubt that in some cases production in-house may give, or appear to give, the prime contractor the most efficient option. I must, however, issue a warning. Any practice which frustrates competition and prejudices the development of small business will be judged critically by my Department.

I said at the beginning of my speech that there was a need for commercialism in the MOD. The operation of competition policy throughout our procurement demands a high level of commercial expertise among MOD staff. We are taking steps to ensure that this is so. That is why we appointed Mr. Peter Levene as chief of defence procurement. That decision is already showing that it was throughly justified. We are making arrangements to draw further upon the experience available in industry by the secondment of staff from the private sector, and relevant training is being provided.

I do not believe that achieving lower prices as a result of competition means that industry's profits were necessarily excessive before or that they will be inadequate in the future. That is not the argument. The pressures of competition ensure that industry becomes more efficient, offering a better service to the Ministry of Defence as a customer, and that it is capable of winning more business in a wider field, thereby providing more employment.

Mr. Eric S. Heffer (Liverpool, Walton)

That is not true.

Mr. Butler

I am sorry that the hon. Gentleman will not have another opportunity to speak. What he said yesterday was interesting, but I hope that he will not continue to make a speech from a sedentary position.

Mr. Heffer

For many years I worked in the shipbuilding and shiprepair industries when there was competition. The industry declined until the only way to save it was to take it into public ownership. The fact that it continued to decline is not the fault of the industry. The Government did not give it the assistance which they ought to have provided.

Mr. Butler

Nobody can claim that the nationalised shipbuilding industry has been competitive. It was heavily overmanned because it depended largely on a sole customer. Essential as competition is, it cannot by itself be a sufficient basis for achieving the better value for money that we are seeking.

My second major theme is collaboration. I shall deal with the not entirely unfounded criticisms of the Secretary-General of NATO, Lord Carrington. In applying competition policy, we are taking into account our longer-term interests. As members of NATO, it is not in our long-term interests for each member state to develop and produce its own competing equipment. It makes no sense from an operational point of view for the various armed forces to have different equipment, and it makes no sense from an economic point of view for several nations to invest in developing and producing different and expensive equipment to meet a common threat. Resources are wasted through duplication of research and development, and higher unit costs resulting from small production runs make the equipment too expensive for our forces to buy in sufficient quantities, and too expensive for our industries to sell overseas.

NATO members have long recognised the potential military, economic and political advantages of collabora-tion. Indeed, we have some 20 years' experience of successful collaboration, as the White Paper makes clear. The Tornado is perhaps the best current example of the extent to which we can succeed in a major collaborative programme at the forefront of technology, but to obtain the maximum benefit from collaboration we must progress from an ad hoc and patchy pattern of working together to a more systematic process for securing wider — and more permanent—collaboration.

We must ensure that Europe builds up a competitive and dynamic defence technology and industrial base capable of making its full contribution to the overall Alliance effort. Europe must become more self-sufficient in defence equipment and take a larger share of world trade. Collaboration is the key to that.

While pursuing ways of improving collaboration, we must ensure that competition procurement is also maintained. We must keep in mind our aim — a technically better, but lower-cost product for the Ministry of Defence and a more competitive one for our industries to sell in export markets. That is not an easy task. It would be naive to believe that the needs of different nations can readily be harmonised, that the chauvinism to which Lord Carrington referred will be overcome, or that the interests of national industries will be reconciled, but there should, from now on, be an assumption that some collaboration is called for in all major projects.

Some hon. Members may not be convinced that collaboration can really work, but it must if the Government are to continue to equip our own forces adequately. It must work if Europe is to stand any chance of redressing the imbalance with America, in cost and in technology. Some collaboration is already taking place, but a system of collaboration must be developed.

The European fighter aircraft is in the forefront of our minds, but I can add little to what my right hon. Friend the Secretary of State and my right hon. Friend the Parliamentary Under-Secretary of State said yesterday. It has come a long way. Many sceptics doubted whether the air forces of five countries could agree on a staff target, but they did. We are determined to bring about this major European venture, if we can. However, we shall not do so to the detriment of British industry. Rather, we would expect the greater export potential of the aeroplane to bring greater opportunities to our aerospace industry.

Mr. Robert Atkins (South Ribble)

Is my right hon. Friend aware that we have been saying this sort of thing for year after year, and that it is about time a decision was made?

Mr. Butler

I am sure that my hon. Friend, who must have discovered as much about the project as I have, will appreciate the progress that was made at Rome about the airframe and the engine. However, there is some way to go. If progress is not made, we must consider other alternatives.

A third vital area gives us scope for improving value for money for the Ministry of Defence. I refer to defence sales, which can assist in many ways. The longer production runs which result from sales can give cheaper unit costs for British forces. They assist in maintaining the United Kingdom's capacity in important areas where our forces' requirements are not sufficient to do so. Defence sales therefore make industry less dependent upon the Ministry of Defence and better able to stand on its own. Our success is increasing. One target is to reduce still further the imbalance in our trade with America, which must be one of our most demanding markets. The imbalance in trade between the rest of Europe and America is as bad as 1:6, but in our case it is 1:2. That is still not good enough and, with further work that is in hand, we shall improve it.

Mr. James Couchman (Gillingham)

Is my right hon. Friend aware of the superb efforts of our diplomatic staff and Army personnel in Washington, who are trying to sell the Americans the mobile subscriber equipment in conjunction with International Telephone and Telegraph Company Ltd., Plessey and Rockwell, which my right hon. Friend the Secretary of State mentioned yesterday?

Mr. Butler

I am aware that they are doing an excellent job. It is a multi-billion dollar project. I know that my hon. Friend the Member for Gillingham (Mr. Couchman) made his contribution during a recent visit to America. We must all pull together on that matter.

Central to the Government's defence strategy and the debate is our policy of independent nuclear deterrence. I do not need to rehearse all of the arguments and shall therefore concentrate on those which impinge on defence procurement. One of the grounds on which the decision to proceed with Trident is criticised is that we cannot afford it. We cannot afford not to have Trident.

Mr. Andrew F. Bennett (Denton and Reddish)

As the Minister is referring to Trident and its cost, will he answer the question that I posed yesterday to the Secretary of State and the Parliamentary Under-Secretary of State for Defence Procurement? How will we keep control over Trident when it is in the ocean? Will not the control system be extremely expensive? Is not the control system excluded from the White Paper? If we continue to use the Polaris communication system, what is the point of having a newer system?

Mr. Butler

I should be very happy to write to the hon. Gentleman about that. The present communication system used in Polaris will be used in Trident, but we are working on a new system—the extremely low frequency system —which is very much at the development stage. It is not designed specifically for use with the nuclear deterrent, but it will be applied to the submarines, for which it is most suitable. We are at an early stage, but there is no problem with regard to the communication system, which will be transferred from the Polaris system. I think that the hon. Gentleman is chasing a hare which will not run.

Mr. Martin J. O'Neill (Clackmannan)

Will the right hon. Gentleman tell us whether the ELF development project has been costed, and whether it is within any of the budgets that have so far been presented for Trident?

Mr. Butler

My understanding is that the project is still very much at the research stage and that the first step will be a technology demonstrator programme. At this stage it is impossible to give the cost, and it is not our habit to give costs in regard to programmes of that sort.

I think that it would be better if I did not give way any more, because if I were to do so I would unduly try the patience of my hon. Friends even further than I have already.

We cannot afford not to buy Trident. It is the most cost-effective deterrent that we can buy, and it is perfectly manageable within our planned overall defence expen-diture. The cost of buying the equivalent level of deterrence through conventional armaments would be astronomical. Indeed, conventional strength alone, at whatever level, can never be relied upon to deter an enemy who is armed with nuclear weapons.

We have handled programmes of Trident's magnitude before. I do not remember an outcry against Tornado, which was seen as an essential update of the RAF's capability. That programme has taken a higher proportion of available resources than Trident will, and a greater proportion of the equipment spend, both on average and at peak. Those facts are there for Opposition spokesmen or for any other hon. Member to see.

The plain fact is that, thanks to the Government's policy, expenditure on equipment has increased by about £2.5 billion since 1979. As my right hon. Friend the Secretary of State said yesterday, defence expenditure as a whole has increased by about £3 billion in the same period in real terms. Given a level spend, on which the Select Committee's case is postulated, the cost of Trident on today's estimates can be seen to be about one fifth of the additional sums that will be made available over the procurement period.

The expenditure on Trident is large, and we have sought to contain it by commonality with the Americans in hardware and shared servicing facilities, but the critics destroy their case by over-exaggeration. They also point to other likely pressures on equipment spend, and nobody is denying that those pressures exist. While the critics are ringing their alarm bells, Defence Ministers are demonstrating how they will cope with the sorts of problems envisaged.

Procurement is not the only area in which savings can be made, but it is in procurement that the biggest scope lies. As I have shown, through the exercise of competition we are now consistently scoring savings on individual projects of 10 per cent., 20 per cent. or more. It would be unrealistic to suggest that we can achieve this across the board, but on a spend of some £8,000 million on equipment each percentage point saved represents a major piece of equipment or provides a healthy contingency against unplanned demand.

Thanks to the priority which the Government have given to defence expenditure and to our approach to spending, I have no doubt that our forces will be armed with the right balance between nuclear and conventional weapons, sufficient to make their proper contribution to NATO and to maintaining peace.

5.24 pm
Mr. Kevin McNamara (Kingston upon Hull, North)

That was a somewhat disappointing speech by the Minister of State after what we had been led to expect yesterday. Before I refer to what he said, I wonder whether, in his reply, the Minister of State for the Armed Forces will elaborate on one major statement by the Secretary of State yesterday which was not pursued to any great extent. It was about the out-of-area exercise that is likely to take place to test our capability. Apart from matters on which we might disagree, such as whether we should have such a force, the House is entitled to know where the exercise will take place, how much it will cost and which host nations will be involved. Today's issue of The Guardian suggested that it would in the middle east, that 10,000 men were likely to be involved and that it would be rather expensive. I suggest that the likely location would be Oman. If that is so, the House is entitled to know about the matter, particularly the cost.

Secondly, I should like to refer to the Secretary of State's rather strange tantrum yesterday over the amphibious capability of the Navy. He said:

I must say a little more about the amphibious capability replacement, about which I have told the House the precise story." Here is the tantrum 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." —[Official Report, 12 June 1985; Vol. 80, c. 914.] The Secretary of State was not prepared to be sucked in, yet there has been a correction of yesterday's statement, and we have been told that we might have a statement in a year's time on the future of those vessels and their replacement.

However, the important thing is that that problem arose directly from the Secretary of State's own proposals for reform within the Ministry of Defence. When he took away service chiefs' control over those matters, the forces and services felt that they were likely to be overlooked, and that their case was not properly being heard. Thus they were likely to react in precisely that way. Last Wednesday's Daily Telegraph said of the matter:

Underlying the basic concern that the Chiefs of Staff have lost the right to influence important decisions on new equipment —and thus the responsibility to fulfil their responsibility for combat efficiency — is the belief that it is not right that a central staff general should have the power to direct the choice of a new ship, or that an air marshal should have the last word on the army's next battle tank. That is what the problem is all about. The article also states:

Mrs. Thatcher will find that the division between authority and responsibility could lead to a situation in which she might be advised on a task force's fitness for war by a central staff committee free of responsibility for its performance in action. There was a more threatening, and, knowing the Government's attitude, more sinister paragraph that said: There is concern in the Services about the method of selecting and promoting officers for senior appointments in the all-powerful central staff. It is feared that future promotion could be based as much on an officer's ability to work agreeably with government staff as on his military prowess." We have already seen that in operation in the Civil Service. If somebody is appointed to the general staff on the basis of his agreement with policy, rather than on his ability as a military and serving officer, it would be to the detriment of the services. Under this system that is likely to happen.

Mr. Nicholas Baker (Dorset, North)

The hon. Gentleman should not believe everything that he reads in the papers.

Mr. McNamara

The hon. Gentleman should not say things like that, especially of the Department. The newspapers were correct and the Secretary of State has been in the courts about the matter. He should be careful with such statements. I am surprised he says that about the "Torygraph", which is the bible of the Tory party.

The debate yesterday was on the decisions of the Secretary of State on procurement now that we are nearing the end of the period of expansion—the 3 per cent. development—and are in a zero growth position. The general feeling of the Select Committee faced with this problem was that, after questioning the Minister and Ministry officials, it could not come to any concrete conclusions about whether with the funds available we could meet our commitments, either in terms of deployment, or in acquiring new weapon systems. The report states:

We had hoped that the Ministry of Defence would be able to demonstrate to us that the scale and phasing of major projects into the 1990s could be made consistent with the likely demands on the defence budget for pay, fuel, stocks and other items … We wanted to examine in-service dates, operational life, scale and phasing of expenditure. Our purpose was frustrated by vague and evasive answers and elegant but unhelpful hypotheses. It gave a list of examples, but it missed a little gem in answer to the hon. Member for Hampshire, East (Mr. Mates). The question was: Given that (a) I think Mr. Gainsborough was very frank when he said five and no more at the moment —the regiments of tanks—

and (b) you are going to be able, because of the cost penalty of running on Chieftain well into the next century, even to do that on the budget you have at the moment, I want some idea of what the penalty is in taking the decision that you cannot afford the capital cost to equip the rest of the British Army with Challenger? The question was perfectly clear, but it is only as clear as the answer. Major General New replied: When that moment comes, and it is not yet, and when the studies have been completed, and they have not been completed yet, and when the international work, which I am quite willing to describe because I am deep in it up to my neck, but not in this open session, has come to its next decision point, then is the moment we decide to go one way or the other. We have the capability of going one way or the other. To what extent we do not know yet, because we have not reached that point." That precisely sums up the attitude of the Secretary of State yesterday. He adopted the same policy, and said: 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… 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."—[Official Report, 12 June 1985; Vol. 80, c. 913-14.] But there is a reluctance. There is something hidden which the Secretary of State either does not know or does not want to tell the House, the Committee or the country. He does not want to tell us, because he wishes to leave those problems to be solved by his successor or, if he hangs on until the general election, by the Labour Government. Even Conservative Members recognise that that is the Secretary of State's position.

I thought that the Chairman of the Select Committee, the right hon. Member for Spelthorne, did a marvellous job yesterday. I have also been a chairman of a Select Committee, when the Labour Government were in power, which produced a report which the Government did not like. I said in the House how marvellous the Government were, and then tore to pieces their policies and strategies. That was done so beautifully yesterday by the right hon. Member for Spelthorne that I am sorry that he is not here today to hear me pay him the compliment. He did it delightfully, and in the best traditional way — by attacking the Opposition furiously, and then carving up the Government. The right hon. Gentleman understood the points being made and the effects of the policies. The fear is that we shall reach a position, by the postponement of orders, the arrangement of studies and the postponement of decisions, which will lead to the structural disarmament of our forces.

The right hon. Member for Spelthorne pointed out carefully something which the Under-Secretary of State for Defence Procurement did not pick up yesterday evening—the importance of exchange rates in working out our budgets. He asked when will the frigates come, and when shall we fulfil our duties in the north-east Atlantic? Shall we have the number of frigates that the Committee and the Ministry say are needed by 1991? If they are going out to tender, when will the keels be laid? Those are the key questions, and we have received no answers to them.

The hon. Member for Beverley (Sir P. Wall) mentioned Intrepid and Fearless. If an early decision is not made about them, we shall lose our ability to supply directly our entire northern flank and Norway. We have already heard from the right hon. Member for Taunton (Sir E. du Cann), my right hon. Friend the Member for Lewisham, Deptford (Mr. Silkin) and from the chairman of the 1922 Committee, the hon. Member for Woking (Mr. Onslow), about the enormous problems caused by the rundown in our merchant fleet. That rundown is as much about structural disarmament as anything else. It is no good saying that, on paper, we can meet our present commitment. We wish to know whether the Government are continuing and developing the exercise started by my hon. Friend the Member for Sheffield, Attercliffe (Mr. Duffy), when he was the Minister responsible for such matters, of going out occasionally to discover where the ships are, to whom they are chartered, whether they still exist, who owns them, and under which flags they fly. That must be a horrendous task due to the decline in our merchant fleet.

Mr. Michael Colvin (Romsey and Waterside)

The hon. Gentleman raises an important matter. If the Government argue that there are sufficient ships on the register, that others are flagged out, which can be requisitioned in time of hostilities, and that the laws are adequate for that purpose, the argument can be made the other way round. Plenty of the ships which fly the "red duster" and which are registered in Britain belong to other members of NATO. Will those countries use their laws to requisition ships that are at present flying the "red duster", and will that not deplete further the fleet that we believe, on paper, will be available to our forces in time of war?

Mr. McNamara

I am grateful to the hon. Gentleman, whose intervention cuts out another two paragraphs of my speech. He makes exactly the point that I was about to make. It is important to know how the register works and to which countries those ships are committed. The Opposition and the National Union of Seamen believe that those problems are not being faced.

Exactly the same position applies to the European fighter aircraft and our need to replace our old Phantoms and Jaguars. We could all echo the point made by the hon. Member for South Ribble (Mr. Atkins) and some of his colleagues about the need to make that decision. Other matters, apart from the defence commitment, are at stake as a result of decisions on merchant shipping, weapons procurement and aircraft build-jobs, and the sustaining of design teams and our capability. The longer such decisions are pushed aside, the more at risk such people become.

There has already been a call at Warton for 500 voluntary redundancies. The trade unions there feel that that is just the tip of the iceberg. There has been a slowing down of the Tornado project and a failure to decide on the EFA. If we do not have a European agreement but want collaboration, what will the Government do? Will they go for the national option? Some of us would regard that with grave suspicion and would not wish to see it happen.

I echo the words of the hon. Member for Woking. We want an aircraft which meets the RAF specification for defending our skies and not one which depends upon the French.

Yesterday many hon. Members accepted what the Select Committee said. The Government's replies have been evasive. They have not accepted the arguments or faced up to the problems that will result from a zero-growth policy.

Without the full disclosure that exists in the United States, the Government can pull the wool over the eyes of the Committee, the House and the country. Debate in a democratic society must be informed debate. People must be able to make a judgment with knowledge of the resources available and the schemes being implemented. It is not a matter of wanting to know the new secret technology or to tell the Russians about it. That does not happen in the United States, unless someone is a seaman by the name of Walker.

We need to know whether the commitments and decisions being made are equal to or surpass the funds that will be available. That is important. That is why the Secretary of State let down the Committee and the House yesterday when he said:

I cannot engage in a detailed line-by-line figure-by-figure analysis of the gloomy picture painted by the Defence Committee."—[Official Report, 12 June 1985; Vol. 80, c. 913.] It is the Secretary of State's duty to tell the House and the Committee what is going on.

The Government are trying to find an excuse to bamboozle the House on the effectiveness of their policy on competition. I welcome anything that saves money or obtains value for money in the defence budget. However, I draw the attention of the House to an important statement by the hon. Member for Dumfries (Sir H. Monro):

we have made one decision and must make another, and both are crucially important. The first decision related to training aircraft. 1 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."—[Official Report, 12 June 1985; Vol. 80, c. 966.] The principle should apply to all contracts entered into by the Ministry of Defence. It is not sufficient merely to go for what appears to be the cheapest.

Now that a decision on the Tucano has been reached, will the Minister tell us whether any of it will be manufactured in west Belfast? Will he also tell us about the battle that is going on with British Aerospace about the debriefing, because as I understand it, while the Ministry would like to regard the subject of the procedures which were followed as closed, the company is still not satisfied about it or about the naming of one of its employees as being the person to whom the information was given. He steadfastly denies that he was given any information about the final date. The procedures should be tidied up. We do not want one of our major companies to feel not that it had been outbid but that it had been cheated by the Ministry. That is not good for the Government's relations with industry. We do not want to see matters continue in that way.

Mr. Adam Butler

I do not believe that the term "cheated" is one that the company would use. It is not one that the hon. Gentleman should use. He asked whether the company considered the matter closed, and it has assured us to that effect.

Mr. McNamara

On what date did the company say that? Did it not ask the Minister further questions after the question had been tabled in the House and the reply given? Is not the company still in correspondence with the Minister?

Mr. Butler

I made the categoric statement that the company has assured us that it considers the matter closed.

Mr. McNamara

The Minister has not answered the questions that I asked, because he cannot. He knows that that is not the case.

We obviously all welcome savings wherever they occur. We welcome them in the new Vickers order. However, we do not know the criteria used and how much money is involved. If the Government are not prepared to tell us that, we must look at the matter suspiciously. Even the savings that have been announced do not reach the overspends on some of the contracts. For example, there was a £600 million overspend on Nimrod. That project has advanced no further and all the problems remain. There have been overspends on the torpedoes, but the problems remain. No savings are likely to be achieved on that project. Will the Minister tell us when he replies whether Mr. Levene's target of 10 per cent. savings across the board on contracts will be achieved?

Employment in the United Kingdom is of interest to us. The Minister claims that he has increased employment by some of his policies, but we have lost nearly 100,000 jobs in the defence manufacturing industries since the Secretary of State has been in office. Those are serious job losses. They are in no way compensated for by Trident, as the hon. Member for Tayside, North (Mr. Walker) tried to suggest yesterday. The cost of the jobs created by some of these major equipment contracts is horrific. In Scotland, the cost per job on Trident is £309,000, and on Tornado is £271,000. If one argues for such projects on a job-creating basis, even some Conservative Members would argue that more jobs could be created more cheaply than by pursuing the Trident project.

I should like to consider the subject of Trident in a way different from that mentioned by the Under-Secretary of State for Defence Procurement, who made a strange statement yesterday. He said:

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."—[Official Report, 12 June 1985; Vol. 80, c. 988.] Judging from that, the hon. Gentleman should be in the Treasury with the Chancellor of the Exchequer. It would be marvellous if we could all run our budgets in that way. As the right hon. Member for Spelthorne pointed out, the mere change from $1.38 to $1.26 in the exchange rate was £180 million. If one has a fixed number of pounds which, because of exchange rates, buy fewer dollars and one is buying goods in dollars, there is a real increase in cost. I do not know who wrote the hon. Gentleman's speech, but I would make him pay for that. I am told that the hon. Gentleman is a chartered accountant. I can understand why he came into the House—this Government have always operated a system of creative accounting.

An important question relating to Trident is the Government's attitude to arms control. They believe that we need not bother about our Trident, that Britain need not play an important part in arms control and that we can leave the matter to the Americans and Russians because they have more bombs, warheads and missiles. The problem with that is that the Russians take our attitude and missiles into account. In their negotiations they take into account the commitment from France and the United Kingdom. If there were an argument for proliferation and for other countries to have their own atomic and nuclear weapons, it is contained in that callous disregard and in the attitude that we need only worry about the big fellows having them.

Paragraph 14 of the defence Estimates states: the vast majority of the world's nuclear weapons are in the hands of the Superpowers: clearly, therefore, these arsenals must be the first priority for reductions. It is not our arsenals, but those of the superpowers that must be reduced. If one is not prepared to include those arsenals in negotiations, it is an open invitation to other countries to create their own atomic arsenals. That is a major reason why we are against this country owning any form of nuclear bases and weaponry. If we do, we cannot prevent other countries from forming arsenals or speak to them about it. It is an inducement for the proliferation of nuclear weapons.

Mr. Churchill

It ill becomes the hon. Gentleman to make himself the advocate of the Soviet view in this case. Since he is well aware that today we have the capacity of guaranteeing on station one single ballistic missile submarine, and that that will remain the case even when we have Trident, what does he suggest for a country committed to a nuclear deterrent, as we are? Does he suggest that we should have half a submarine?

Mr. McNamara

The Conservative party may be committed to a nuclear deterrent, but we are not, and we will not have a nuclear deterrent.

Mr. Roland Boyes (Houghton and Washington)

I am pleased to hear my hon. Friend wholly renouncing nuclear weapons. Will he make it absolutely clear that we renounce nuclear depth charges? Will he educate Conservative Members about what the use of nuclear depth charges might mean for our own, ships and submarines?

Mr. McNamara

We do not intend to maintain any nuclear capability, whether it is Polaris, nuclear depth charges, bombs or Tornado. The Labour party policy is not to have any of them, and that is made clear in our amendment.

Mr. Derek Conway (Shrewsbury and Atcham)


Mr. McNamara

Will the hon. Gentleman sit down? He will get his chance in a minute.

A major reason why we will not have nuclear depth charges is that they are no good as weapons. An American admiral said:

the most concrete objection is that any initiative use of nuclear weapons at sea would be very much to the disadvantage of the Allies, because we are the outfit with the big ships and we are the outfit largely dependent on service ships to keep the seas open. The differential advantage we might get from going after a submarine with a nuclear depth bomb is just not worth it. In addition it has the interesting characteristic that if you blow one beneath the surface of the sea, you will ring the ocean acoustically for several hours and lose the capability to track anybody. As a tactic that is soft-headed, deeply obnoxious— and militarily futile. Moreover, if Boris comes along in the first of a group of submarines and is blown to pieces, behind him will come Igor, Ivan and the rest of them in their submarines, and pass through the disturbed acoustic and sonar screen to reach their objective. Nuclear depth charges are self-defeating. I would not expect the hon. Member for Ashford (Mr. Speed) to accept this because it was the reason why he resigned from the Government, but the defence Estimates of 1981 at figure 8 on anti-submarine warfare show that there is no need for nuclear depth charges. It shows the submarines being attacked by hunter-killer submarines, of which we shall have fewer because we are to have Trident—that is a further reason for not having Trident. Those estimates show nuclear depth charges being used by destroyers and helicopters, and how effective our anti-submarine warfare capability is.

There is an interesting question on anti-submarine warfare, from which the House has shied away for some time. The Minister should tell us how damaging the unearthing of the Walker spy ring in the United States has been to Britain's naval defence. Much of what comes from the United States seems to indicate the undercutting of our whole basic defences and the control of the Iceland-Greenland-England area, which was popularly known as the Denmark strait. The role of the hunter-killer submarine and the weapons that we already have make the idea of nuclear depth charges obnoxious and foolish in military terms. Our view about whether we should have them is clear in our amendment.

Mr. Conway

Regarding the Labour party's amend-ment, the Labour party pay lip service to our conventional forces, but if it were successful in removing any form of nuclear deterrent, what precise protection could be afforded to British troops in the event of chemical or biological warfare? We would have no deterrent.

Mr. McNamara

First, if the hon. Gentleman listened to what his right hon. Friend said about the capability and effectiveness of our chemical defences, he would see that that matter does not arise in the Mickey Mouse suits that the troops have. Secondly, it is not the Government's policy to introduce chemical warfare, and we support them in that. The hon. Gentleman also raised the general question whether new technological and other devices can be as effective to the defence of our troops as risking the possibility of a nuclear war. We are not prepared to risk that.

The military concept of star wars is extremely dangerous. More importantly, people have not yet taken on board the genuine and considerable threat that it poses to British industry, British research capability and our ability to sustain modern technological advance. Originally President Reagan suggested that there should be a grand partnership, and that we might even share our knowledge with the Russians to show our bona fides. That statement has long since gone out of the window.

American action in relation to industry has been in direct contradiction to the fine words of the President because industrial developments have taken a different tack. In recent years in COCOM America has urged that the lists of goods and products which may not be exported to the Eastern bloc should be considerably expanded. Indeed, the Americans have even suggested that there should be a body of military advisers in Paris deciding, or at any rate recommending, what should be done

The United States Government claim direct control over re-exports in the form of re-export licences, with direct sanctions against foreign offenders. Hon. Members will recall the row that broke out over that, in particular with the pipeline system. We also had enormous problems over the NATO frigate because of the views of the United States. Instead of limiting lists in this connection, the American Government are seeking to expand them, not only in terms of weapons and weapon technology but about everything that might have a dual use, be it new materials, robotics, biotechnology, aviation or space travel. All such matters are coming under United States restrictions.

The same can be said of the way in which the Americans treat the free flow of information in the academic sphere. There is now increasing evidence that the United States is screening participants going to American symposia. The United States armed forces are beginning to limit the amount of public tendering for some of their contracts.

The same can be said of classified material. Perhaps the trend of which I have spoken applied to the Trident contract in the United Kingdom; mainly an American subsidiary got the bulk of the small amount of work on the project that came to this country. The Americans are using those methods to prevent a transfer of technology, and they are using their Federal Acquisition Regulations to that end.

President Reagan has signed a Distribution Licence Order which limits what can be done. Clauses in American university research contracts limit the amount of information that can be passed on. This increasing militarisation of science and research means that if we were to flirt with the Americans and enter the star wars business, we should find our basic research encompassed by American contracts, directions and regulations in such a way that any possible spin-off that might be of benefit in the development of the weapons—that is, if we were to join them in that, and I am not in favour of doing that —would be tied up.

The history of this issue shows that while the two-way street of exchange may be improving in some ways— for example, in relation to purchases of weapons—the transfer of technologicial information from the United States to the United Kingdom is very limited indeed.

When President Reagan said that he wanted to get rid of mutually assured destruction and wanted a policy based on mutual security and understanding, everybody applauded him. Monsignor Bruce Kent and E. P. Thompson did not lead any demonstrations down the streets of Whitehall against that suggestion. Unfortunately, as we look at the development of that concept in the last two years, we see how right people were to be suspicious about what the President said.

It is clear that the US President is doing a number of things. First, unilaterally he is upsetting the stability of the Western Alliance as it now exists. Secondly, he is disturbing the whole nuclear basis of the defence of Western Europe in terms of the graduated response. Thirdly, he is putting at risk the ABM treaty. Fourthly, he is bringing into focus the fact that if we were to become associated with his latest ideas, we should be seen to be endorsing the creation of instability and insecurity in the world. Those are some of the problems with which hon. Members must wrestle in debating these issues.

Mr. Wilkinson

Does the hon. Gentleman have no sense of balance? Is it somehow all right for the Soviet Union to build up a massive arsenal of offensive nuclear systems, of both strategic and intermediate range, but it is not all right for the President of the US to launch a technical research initiative to see if it is feasible to construct a space base for ballistic missile defence? How is that in any way destabilising? Surely it is offensive systems which destabilise.

Mr. McNamara

I have not gone into the argument in great detail because many other hon. Members wish to take part in the debate. Since the decision was first made, the US Administration have said that there will be not the abandonment of ABMs but an integration of the star wars concept with existing missile systems. They are saying, therefore, "We shall knock out the Russian ABMs but maintain our own," and that creates instability as well as an arms race, and it is bound to increase if the Americans go ahead with their plans.

I appreciate, I assure the hon. Member for Ruislip-Northwood (Mr. Wilkinson), that the Russians are involved in these things. The Americans are involved, as I have explained, and even we have technology which could be adapted to those concepts. Nevertheless, specifically and directly to take up the major defence resources of the West by adopting the American type of scheme would create a more horrendous arms race than we have had up till now.

Indeed, the Secretary of State agrees with that to a degree because he said in evidence to the Select Committee:

I think that the arms race has a momentum, and I think that the development into space is a logical step of the evolution of the technologies of war. I do not think there is a new issue which has been raised, other than the scale and resources which would be involved. We passionately disagree with the right hon. Gentleman about that. In our view, a great qualitative jump in the arms race would take place. It is a frightening prospect for mankind and we should not go ahead with it.

For those reasons, we are not prepared to support the Government Estimates. In our view, they are bad for the defence of the country, will increase instability in the world, will ruin British industry and will prevent the nation establishing a proper, sensible, cohesive and coherent role within the NATO Alliance.

Several Hon. Members


Mr. Deputy Speaker (Mr. Ernest Armstrong)

Order. I remind the House that the ten minutes rule is now in operation.

6.8 pm

Sir Frederic Bennett (Torbay)

Irrespective of the ten minutes rule, it is up to hon. Members to be brief, so enabling others to speak, some of whom will have been precluded from speaking by the great length of the speech of the hon. Member for Kingston upon Hull, North (Mr. McNamara), who did not observe any restraint. Accordingly, I shall limit my remarks, as I say, irrespective of the rule that now applies.

In the first part of his speech the hon. Member for Kingston upon Hull, North spoke almost entirely of forecasting. He spoke in a gloomy way of the problems that would face a future Conservative Government in the 1990s. Part way through he showed a little of his old spark by admitting that his previous remarks had been largely wasted because, in his view, there would not be another Conservative Government, anyway, so that whether sufficient funds existed in the 1990s would not be a matter to worry either us or him.

I was glad to hear the hon. Gentleman mention two issues later in his speech and, because of the time factor, I shall limit my remarks to those. Although the anti-Trident campaign continues, I hope that it will not be repeated year after year in the way that it has gone on in the past. A few years ago it was recommended by a Select Committee that, if we were to have a sovereign nuclear deterrent, we should adopt Trident.

Mr. Dick Douglas (Dunfermline, West)

When was that agreed?

Sir Frederic Bennett

Perhaps the hon. Gentleman was not here at the time. I assure him that that course was adopted, and that policy has been implemented ever since. With a weapon such as Trident, it is not possible to adopt an on-off policy. The Trident issue has been decided and, so long as the Conservatives are in office it will be maintained. That being so, let us not, year after year, battle about whether we should have gone for a different concept. I was a member of the Select Committee which thought that, of all the options before us, Trident was undoubtedly the best.

Some defence strategists genuinely believe that there is either a less expensive way to maintain our sovereign nuclear deterrent or that we can leave the interests of our country to be protected by the United States nuclear umbrella and spend more on our conventional forces. I regard that as an outdated argument which would not get general support in the House.

I understand that the Labour party will fight the next general election campaign on a policy of no nuclear sovereign deterrent and, as I understand it—I stand to be corrected—getting rid of all American nuclear bases and facilities. If that is the Labour party's policy, is it sure that it knows what the impact will be on the coherence of NATO? Other free democratic countries — Italy, Germany, Belgium and France—have decided that they will maintain their own, or support American nuclear deterrents on their soil. Are we to be the only significant NATO power that does not do so?

Is the hon. Member for Kingston upon Hull, North prepared to make a specific pledge that if the Labour party cancels Trident it will devote all the money that it saves to other military purposes? Is he prepared to say what he hinted at in the earlier part of his speech, that the money would be used to increase the scope of conventional forces? The hon. Gentleman knows that he could not give such a pledge. We all know that the Labour party will fight the next general election campaign not just on nuclear abandonment, but on transferring resources from armaments to other sectors. Let us be in no doubt that the Labour party is being both hypothetical and hypocritical when it suggests that it is interested in saving money for conventional defence by giving up Trident. It may have other reasons for doing so, but that is not one of them, because every penny that it would save would go on other sectors, and other manifesto promises.

I have not yet heard a declaration from the hon. Member for Kingston upon Hull, North as to whether the Labour party supports the next stage in the CND's programme, which many Labour Members support. The CND has gone on record as saying that giving up our nuclear weapons and reliance on American nuclear weapons leads logically to giving up our membership of NATO. It says also that in the meanwhile, to set an example, we should not try to persuade the Russians unilaterally, or even reciprocally, to give up any of their nuclear arms. We should know whether the Labour party supports that proposal as well.

I plead with my right hon. Friend the Secretary of State for Defence and the Leader of the House for a full day's debate on SDI. The other place has had two such debates, and in the Western European Assembly, to which I belong, we have had at least two and will have some more in the autumn. There are constant debates in the United States, and the House should be given the opportunity for the true picture to be properly painted. This cannot be done properly by a Minister in a few minutes or even half an hour.

The hon. Member for Kingston upon Hull, North gave a false impression of what SDI is about. Any citizen would be delighted with a Government who said that instead of a continued arms race they would provide a system which ensured that those now living under the threat of nuclear war would, for the foreseeable future, have that threat removed once and for all. Any Minister who put forward such a programme and was believed would get support across the board, because that is what we have all been looking for.

The argument that negotiations are the only way to achieve peace and that SDI stands in the way of such negotiations is wrong. On the contrary, it has already been shown that it is the only bargaining factor that interests the Russians. I have too much respect for the hon. Member for Kingston upon Hull, North to believe that he really thinks that half—or even a whole—British submarine will affect the outcome of the negotiations. The Russians want to get the Americans to give up research into the system which they have already put into effect around Moscow, and which they are intending to put into effect elsewhere.

Nowhere in history has there been any case of a country voluntarily giving up a weapon as a result of round-the-table negotiations. Weapons have been given up over the centuries when they have become obsolescent. Bows and arrows were given up because of suits of armour, not because of field of the cloth of gold negotiations. Rifles and machine guns were made obsolescent by the invention of the tank. Capital ships became obsolescent and disappeared from the seas because of the creation of aircraft, not because of talks around any negotiating table. We should learn that lesson, and we should be immensely grateful for the fact that the Americans have concentrated on a genuine system of protective defence and have not yielded to the temptation of engaging in yet a further bout of what has rightly been called MAD—mutually assured destruction. That should commend itself to all of us, even the egregious Mr. Kent.

6.16 pm
Mr. Tam Dalyell (Linlithgow)

One of the many-strange and incomprehensible features of this White Paper is that it fails to address the key questions of communications, operational control, political control and intelligence. In short, it ignores the whole question of military and political crisis management.

Last Monday night, a well-researched "World in Action" programme raised vital questions, not only about these issues, but about the behaviour and actions of political and military leaders under pressure. One of the reasons for nagging on about the Falklands war is to get at the truth. Another reason is to ensure that, given the truth, we can learn from errors the problems and flaws inherent in our systems of political and military control.

If the information provided by "World in Action" is correct, and Sir Sandy Woodward, through Northwood, actually did issue the initial order to sink the Argentine cruiser, without political authority, this is tantamount to the military initiating a fighting war, without political assent. If "World in Action" is incorrect, and Admiral Woodward never issued such an initial order, and Admiral Herbert never countermanded it, then the House should be told.

It is not sufficient to say that these are past minutiae. Important questions about control must be answered. Could such a situation conceivably recur? What steps have been taken to prevent such a recurrence? The 10 million "World in Action" viewers must also have an interest in knowing whether "World in Action" was correct, and, if not, in what specific ways the programme was misleading or incorrect. It appeared to me that Mr. Stuart Prebble and his colleagues had produced a remarkably well-informed programme.

Argument about the alleged leak to the "World in Action" of the draft reports of the Select Committee on Foreign Affairs must not be allowed to overshadow what purports to be a startling disclosure. It appears that the crucial joint chiefs of staff meeting on 2 May was not even informed that the Belgrano had been under observation for at least 15 hours by the Conqueror, having been picked up on passive sonar before 1600 hours on Friday 30 April.

The explanation is simple. The 44-year-old cruiser was not considered enough of a threat to be worth worrying about. I must tell my parliamentary colleagues that I have learnt that there was strong opposition not only from the right hon. Member for Cambridgeshire, South-East (Mr. Pym) but from senior naval staff at Northwood over a period of days to attacking either the carrier or the Belgrano. This was for an understandable reason. They knew that the most dangerous retaliation would come, not from the 6 in guns, range 13 miles, of the old USS Phoenix, or even from carrier-based aircraft, but from land-based aircraft.

A judicial inquiry ought also to set out all the known facts about the supposedly missing log books of the Conqueror. I do not believe that any log books went missing. It is inconceivable that when HMS Conqueror arrived at Faslane someone, or members of the crew, just filched a log book as a memento for his sideboard. It is an insult to the Royal Navy to suppose that it operates like that. I veer to the opinion that the missing log book was a cock-and-bull story devised by Ministers or their aides as a smokescreen for the morning that the Secretary of State for Defence was to give evidence to the Select Committee.

Mr. Wilkinson

On a point of order, Mr. Deputy Speaker. The purpose of this debate is to discuss the motion, that the "Statement on the Defence Estimates 1985" be approved. The defence Estimates contain references to future provision for the defence of the Falkland Islands but no reference to the 1982 operation that the hon. Member for Linlithgow (Mr. Dalyell) is describing.

Mr. Deputy Speaker

We are discussing the motion and the amendment. As the hon. Member for Ruislip-Northwood (Mr. Wilkinson) knows, defence debates range very wide. All defence matters are related.

Mr. Dalyell

A judicial inquiry ought also to ascertain what unofficial as well as official messages had been received from Lima and Washington about the Peruvian peace plan. I remind the House of the following exchange on 28 March 1985. The Prime Minister's reply was:

The authoritative report was the telegram from Her Majesty's ambassador in Lima."—[Official Report, 28 March 1985; Vol. 76, c. 293.] What unofficial contacts took place? A judicial inquiry should consider whether Chequers received all the intercepted Argentine signals, particularly those of major significance, and, if not, why not? Was Chequers supplied with all decoded signals? These are questions concerning crisis management. We had better learn. I quote the following passage from the "World in Action" programme:

Four hours later another Argentine signal was sent. This time, it was unmistakable. It confirmed the previous order to the attack groups to return to home waters. If this signal was intercepted, Britain could scarcely justify sinking Argentine ships as self-defence … There have been many unofficial reports from GCHQ that the second recall signal was decoded and passed on. As yet, no proof has been produced that it was. But of course this signal, sent at 1.19 am, was, like all other signals, decoded and passed on, as The Observer of 6 January 1985 put it, unchallenged:

The intercepted Argentine signals were decoded and telexed at the time directly to GCHQ at Northwood and to Mrs. Thatcher's office. A report by Sir Brian Tovey admits that the cryptanalysts at GCHQ did, indeed, decipher this vital message. Neither their skill nor their computers failed them. In effect, the Tovey report states that there was complete evidence available to the Government, before the order to sink, that the Belgrano and the rest of the fleet were safely on a course for home. Tovey's statement went to Sir Robert Armstrong. I am not even sure that the Secretary of State for Defence has seen it. Ponting certainly has not, and since he compiled the "crown jewels", how can the Secretary of State for Defence be certain, to use his own words, unflattering to his Prime Minister, that there was no "Watergate round here"?

Ministers might care to study Mr. Duncan Campbell's significant article in the New Statesman of 3 May 1985. I do not know his sources, but I suspect that they are different from mine.

We now need a clear account from the Prime Minister of how the signal at 1.19 am was handled, who had it, who decrypted it and to whom it was sent.

I believe that knowledge of what happened to this particular signal may well have been suppressed from the present Secretary of State. Maybe it was considered better that he should not know. During the time that the Tovey report was being compiled, was I under surveillance? I am just curious.

Last Sunday the Prime Minister responded to Mr. Frost. She said:

There were no particular peace proposals. It is alleged that there were some from Peru at that time. There were not. They had not reached us. This is at variance with the statement of the right hon. Member for Hertsmere (Mr. Parkinson) and the right hon. Member for Cambridgeshire, South-East on the subject.

Why was the decision to sink the Belgrano taken not by the War Cabinet but by an impromptu group of persons called together by the Prime Minister without any minutes being taken? That is a matter for control. The 44-year-old cruiser posed no kind of immediate threat at the time. What a way to run a war.

How is it that a Prime Minister can authorise a shooting war, according to Lord Lewin, without apparently being given, or asking for, an assessment of the potential retribution? The implications for the control of nuclear weapons are spine chilling. This is the Prime Minister who claims to have a veto on cruise missiles. How, if the admirals do not tell the Prime Minister what is going on, can she claim to have "full political control"? One cannot allow admirals to give orders in an undeclared war, before a British life has been lost in action, to start shooting, without the politicians knowing.

The Prime Minister claims that the Belgrano was a threat, but the Conqueror had orders to sink it when it approached the exclusion zone. Why were these orders changed to sink it when it was heading away?

Last Sunday the Prime Minister said:

You run a war through your admirals … Do you really think they say to a Prime Minister, do you really think that in the middle of a war they come up and say: 'That ship has changed direction'? Incidentally, it was an undeclared war. This is the Prime Minister with her finger on the nuclear button. Does she know nothing of NATO's strategy of flexible nuclear response, a strategy based upon political leaders being fully and frequently informed on the progress of a conflict? Or will the Prime Minister leave it all to the admirals? On the one hand, is she prepared to run a war though the admirals, while on the other she claims to have full political control? It is like trying to be an Iron Chancellor and an Iron Lady committed to £18.9 billion of defence Estimates at the same time.

Finally, there is one other matter that the House, for all our traditional cosiness, ought to face up to. On our television screens last Sunday morning we saw the British Prime Minister saying to Mr. David Frost:

If you think I know in detail the passage of every blessed ship, you cannot think what you think the Prime Minister's job is …in charge of a war again, I would take the same decision again. If I were David Frost, I should have said: "But Prime Minister, this was not every blessed ship. This was one ship—the ship, and a thousand men or more—that you had ordered destroyed, a very special ship. Is it bonkers to ask if you made no attempt to find a rational cause to reverse your orders? Is it bonkers to be amazed that you did not instruct your military to keep you fully and frequently advised? Is it stark staring bonkers to wonder whether, for humanitarian reasons, you hoped that it might go away and give you the opportunity not to start the killing?"

I make no apology for saying that the whole question of the political control of a war is a matter of overriding importance.

6.26 pm
Miss Janet Fookes (Plymouth, Drake)

I shall make only one comment about the speech of the hon. Member for Linlithgow (Mr. Dalyell). I am sick to death of his obsession with the Belgrano. I am more concerned about the British lives that were lost in the Falklands. The Belgrano was a risk and we were justified in sinking it. That is the end of it. The points that I wish to raise in this debate are more relevant to the discussion than the speech of the hon. Member for Linlithgow.

The Statement on the Defence Estimates deals, under the heading "Rationalisation of support", with an issue that is very close to home: the future organisation of the royal dockyards. Paragraph 518 says:

We have been considering the arrangements under which the Royal Dockyards at Devonport and Rosyth should be managed in the future to enable them to meet the Royal Navy's needs in the most cost-effective manner. No decisions involving major change will be taken until a period of consultation has been completed. It is on that point that I would take issue with my hon. Friends.

I do not believe that the consultation period is sufficiently long to be really meaningful. The Government are asking for the results of consultations to be in by July, a very short time. It has been argued that, owing to the leak of a report by Mr. Levene, people have had longer to consider the issues, but I consider that this is a specious argument. It is not one that I accept. The consultation period should start when the Government place the proposals before the public. I shall accept nothing less. I beg my right hon. Friend the Secretary of State for Defence and his colleagues to allow a further period to elapse during which proper consultations can take place. The issues are very important. We cannot afford to make mistakes about the future organisation of the dockyards. Therefore, it is very important that full consultation should take place.

The city council has set up a steering group, as a result of which a report has been commissioned from Peat Marwick and Mitchell. An interim report was produced which has been sent to me in the last few days. While that report appears to accept much of the analysis of the Government in their open document, it queries whether an agency agreement is the right solution. By that, of course, it means the bringing in of a private firm to manage the dockyard for a period of years. Clearly, if it were to be for a period of only five, six or seven years, and another firm were then to be brought in, that would be unacceptably destabilising. May I have confirmation from the Minister of what I believe the Government intend—that the firm, if satisfactory, could expect to continue for a considerable number of years, and that the period of five or six years would simply be a let-out clause if the particular firm proved, unfortunately, not to live up to the expectations of it?

I feel that we should get rid of the dead hand of the Civil Service in running what is essentially an industrial organisation, although I remain open as to what other form it might take at present. We shall never get away from all the rules and regulations unless we detach ourselves from the Civil Service set. Therefore, I hope that the Government will look very seriously at that point.

I am, of course, concerned about the issue of redundancies in the meantime, prior to reorganisation, since there will be about 2,000 job losses at Devonport, and no local Member of Parliament can view that with equanimity, bearing in mind the level of unemployment. The trouble is that nobody knows for certain whether his or indeed her job is going, and that makes for a loss of morale and real anxiety. If only my hon. Friends could be persuaded to say that there would be no compulsory redundancies, that would take much of the sting out of the matter, and I ask that that be considered. I know that the majority of the redundancies will come through voluntary means, early retirement and the like, but no individual in the dockyard knows how it will affect him or her. It would be a valuable contribution to increasing morale in the dockyards if my hon. Friends could make the commitment for which I have asked.

We are concerned about alternative job opportunities, and I am glad that there has been set up a development agency for Devonport, located in the civic centre. It would be interesting to have some idea of how that agency is working. If my hon. Friends are not able to reply to me tonight, perhaps they will do so in the near future.

It is also important to spell out what possibilities there are for non-naval work in any new set-up. It has always been a minus factor for those working in the dockyards that the work provided by the Navy inevitably goes up and down, and that when there is less work there are redundancies. Good non-naval work which could keep them going in the leaner times would do a great deal to assist, and would make the life of a dockyard city much more acceptable than it is now.

I make a particular plea on behalf of those men who moved with their families from Chatham when that dockyard was closed—in itself a traumatic experience for them—and who now face further difficulties and uncertainties about their future. They have a particular claim on our sympathy and our understanding, and I hope that the Ministers will bear that in mind.

I have a further concern, and that relates to the training of apprentices in the dockyard. It was mentioned in the open document, but there was no full explanation of what was to happen there. It is my understanding from some of the instructors at the apprentice training centre in Devonport that they are still totally unclear about what their future may be. That is not good enough. Apprentice training is in any case vital if the dockyard is to be run efficiently in the future. Those who instruct at the centre need to know what their opportunities are to be in the future. Some information about that would be very helpful.

All in all, I have severe reservations about the way things are going, although I accept the need for change. I hope that every opportunity will be taken to ensure that the dockyard remains as a more efficient, viable unit, and one which plays a very important part in the economy of the city of Plymouth and will, I hope, do so for many years.

I do not wish to conclude my speech without a reference to the Royal Marines. No doubt Ministers will heave a sigh if once again I refer to the issue of the amphibious capability of the Royal Navy, but I do so because I was not at all happy about the words used in my hon. Friend's speech in opening the debate today—not this year; next year. I was reminded of the game children play with plum stones and other stones—"This year, next year, some time, never". We want to be absolutely certain that the role of the Royal Marines is backed up by such an amphibious capability. It is a jargon phrase. What it means, in effect, is that, where there is not a proper port for ordinary landing, there is the means of landing the Royal Marines through the amphibious ships. Without that capacity, much of their role and future is thrown into jeopardy. That is how important it is. Certainly it is extremely important for the role in Norway.

6.36 pm
Mr. Russell Johnston (Inverness, Nairn and Lochaber)

I apologise to you, Mr. Deputy Speaker, and to the House for the fact that, for domestic reasons, I was unable to be present yesterday, but I have read the report of the debate and hope that hon. Members will allow me to make my contribution on that basis.

The rules say that I have 10 minutes. I do not like the rules. Frankly, I resent them, as I speak for the Liberal party and the Labour spokesman took 41 minutes. But I must abide by them. Against all my inclinations, therefore, I shall not give way, and I shall also gallop.

My right hon. Friend the Member for Plymouth, Devonport (Dr. Owen) dealt yesterday with the Select Committee report, which he rightly described as "a devastating criticism" of Government policy. I shall repeat only one thing that he said, because it must, from the alliance position, be underlined repeatedly. He said:

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." —[Official Report, 12 June 1985; Vol. 80, c. 933.] The justification for Britain retaining an independent deterrent, if it is a fully integrated member of NATO, with all the logic that that has, has always escaped me. Given the Western Alliance, given our interdependence, in what circumstances is it envisaged that an independent deterrent would be required? Why do we need it rather than West Germany or Italy? Surely we have outlived those mirages of greatness that we long pursued during the twilight of empire. I fear that both the Prime Minister and the Secretary of State for Defence are susceptible to such mirages and do not count their cost.

The defence debate is now very much overshadowed by the discussion of the strategic defence initiative. That is also true of the Geneva talks. The Secretary of State for Defence was cautious yesterday in his references to SDI, and his caution was reinforced by his welcome references to EUREKA, concerning which the Secretary of State for Foreign and Commonwealth Affairs had made an earlier statement. I attended the Assembly of Western European Union last month, when Baroness Young was questioned on EUREKA and found herself unable to say anything, yet in another part of Paris the Foreign Secretary was giving the go-ahead to it. It says little for the seriousness with which the Government treat that Assembly if, in the context of the so-called reactivation of WEU, it cannot be told things before the New York Herald Tribune.

I do not think that the Secretary of State for Defence should be cautious about star wars. He should be saying loudly and clearly that we do not want any further escalation. If the proposition is seen in the context of saying to the Soviet Union that that is what will happen if there is no agreement in Geneva, that is a different matter. But to pretend that this is some great step towards eternally safeguarded peace is yet another mirage.

President Reagan has said that when it is completed it will be deployed only after negotiation with the USSR. I doubt whether that gives Mr. Gorbachev nights filled with Elysian dreams of waving fields of corn in collective farms. I spoke the other day to an American defence expert who said, "I am not married yet, but this will not really be ready until my sons are at college". If we reach that stage, the United States of America can attack the USSR without fear of retaliation. That may sound absurd, but that is what they will say. Mr. Gorbachev will have his own programme and more millions will be poured into systems to defeat undefeatable systems. Man — and, indeed, woman—is endlessly ingenious.

I do not see where that leads us, other than to yet more escalation. The concentration must now surely be on Geneva, which, in a parched, underprivileged and population-burgeoning world, must surely be the last hope for some kind of sane deal between the two systems that now dominate the world. I say "now", because last week I had the opportunity of talking to the Foreign Minister of the People's Republic of China, who asked me about SDI. China has a nuclear capacity; it has an enormous and diligent population; it feeds its people. It has shown a wise, long view and restraint over Hong Kong. If we in the West cannot sort things out, we will end up being told what to do.

In our country — flawed democracy as it is — we should be able to reach some sort of sensible consensus about our views on how our society should be best defended against any threats. But we are becoming more and more cleaved, and for that I believe the Government have great responsibility. I am not a unilateralist—far from it—but I do not treat those in my party who are unilateralists with contempt or simplistically label them as fellow travellers. Under a Communist system, most of them would be in the labour camps. They are concerned, worried and frightened people watching impotently as their rulers not just fail to find accords, which would give them and all of us security, but are very much seen as not making the necessary efforts to do so.

One may say that the Greenham Common women are nuts, and go down in a flak-jacket and laugh at them. I do not agree with them and I have found it difficult to have any dialogue with them. But they represent a powerful plea for real action on disarmament. I understand and agree with the argument about one-sided defence often put forward by Conservative Members, but I also recognise the view that if the rockets go up there can be no one-sided survival.

No Liberal can defend a Communist system. No Liberal can be other than appalled at the treatment of the Sakharovs and the Shcharanskys and numberless, nameless others. But no Liberal who has made the effort, as I and my right hon. Friend the leader of the Liberal party have, to talk regularly to the Soviets and to visit the Soviet Union can take the facile "Empire-of-evil" view, nor accept that managed agreement is impossible and that all that is left to us is to build the munitions dumps higher and higher.

I have little time left, and I wish to put on the record the amendment tabled by the alliance which was not selected:

Line 1, leave out from 'House' to end and add 'fully supports the United Kingdom's continued membership of the North Atlantic Treaty Organisation; regrets the forthcoming reduction in Britain's conventional defence which will lower the nuclear threshold and create an unacceptable reliance on "first use" of nuclear weapons; calls for the cancellation of Trident in order to avoid a new and provocative proliferation of the arms race and to release resources needed to strengthen Britain's conventional defence; considers that the high level of Soviet and United States nuclear arsenals threatens world peace and could be reduced without jeopardising mutual deterrence; regrets the preoccupation with the Strategic Defence Initiative which is technically questionable and obstructs progress towards peace and disarmament; and urges the Government to use all its influence, in conjunction with our European partners, to persuade the United States to take a constructive position in the Geneva discussions with the Soviet Union in which British nuclear forces could be included.'. I believe that that makes a good case. We argue that it is possible to find the will effectively both to defend our country as necessary and the will to find a managed solution to the endless escalation of arms development and expenditure in the West and the East.

6.45 pm
Mr. Julian Amery (Brighton, Pavilion)

I wish to congratulate my right hon. Friend the Secretary of State on his White Paper—both its style and its content. I also congratulate my hon. Friend the Minister of State on his opening speech — a mastery of constructive ambiguity that would have gladdened his father's heart.

The right hon. Member for Llanelli (Mr. Davies) and the hon. Member for Kingston upon Hull, North (Mr. McNamara), who opened for the Opposition today, repudiated the general strategic concept of the White Paper. I find that a tragedy. I have been in the House for some years. When I first came here Mr. Attlee had just launched the British independent deterrent. Then Hugh Gaitskell was going to fight again and again to prevent unilateralism. Nye Bevan was not going to be a streaker in the conference room. Harold Wilson was persuaded by the right hon. Member for Leeds, East (Mr. Healey) to keep Polaris, in spite of his election pledge the other way; and the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan), the Father of the House, adopted the Chevaline improvement in Polaris. Now, suddenly, we are faced with the official Opposition departing from the basis of a bipartisan Alliance policy. I find that a tragedy.

I find it difficult to explain, especially as anti-Americanism has grown among Opposition Members. After all, the further we are from the Americans the more important it is that we should have the means of defending ourselves. To abandon all nuclear weapons—our own and those in the United States— and suggest that we should confront a nuclear superpower with only conventional forces is to return to a position where we would be dervishes with bows and arrows fighting against machine guns.

The escapism of the Opposition was well illustrated in two interesting speeches — one by the right hon. Member for Lewisham, Deptford (Mr. Silkin) and the other by the hon. Member for Liverpool, Walton (Mr. Heffer). The right hon. Member for Deptford suggested that peace should be kept by United Nations blue helmet troops. The hon. Member for Walton said that we must make a gesture; we must begin to disarm nuclear weapons unilaterally. That is the sort of speech that would be all right in a university union debate. It might just wash in a maiden speech. But both the right hon. Gentleman and the hon. Gentleman lost their political virginity a long time ago. Listening to them reminded me of two old madames preaching the virtues of no sex before marriage.

The right hon. Member for Plymouth, Devonport (Dr. Owen) said that he was in favour of a British nuclear deterrent but against the Trident. Political reasons might incline him to be so. He said that there must be alternatives. He knows perfectly well that the most parsimonious Government that Britain has ever had is this Government. They would have taken any alternative if it had been worth taking. The Government analysed the figures and knew that there was no alternative. What would be a criminial waste of money would be to invest in a second-rate deterrent that did not have the credibility to deter.

I have reservations, too, about the right hon. Member's idea of withdrawing battlefield weapons 150 miles. If one looks at a map of Germany, one finds that withdrawing 150 miles would place the weapons along the Rhine. If I were a German I would not feel sympathetic towards that manoeuvre.

The critics of my right hon. Friend the Secretary of State have agreed on one point. The Select Committee on Defence and the right hon. Members for Llanelli and for Devonport have said that they do not believe that my right hon. Friend's defence programme can be financed within the existing Estimates. They may be right; I do not know. However, I have confidence in my right hon. Friend. He will do his best, and his best can be pretty good. In any case, he should not have any sleepless nights about it.

The Estimates for the Home Department are decided in Cabinet. That is not the case with the defence Estimates. They are decided in Moscow and, to a lesser extent, in Washington. It is the threat that determines the programme, and the threat is growing. Let us have no illusions about that.

No doubt, the stately minuet at Geneva over arms control is continuing with due dignity, but the issue will be decided on the periphery.

The arms race has run for a long time. The issue will be settled in Afghanistan, Angola, the Horn of Africa, Cambodia and Central America. For a long time, the Soviets have openly declared their support for what they call "freedom fighters" and have supported them by proxy. At long last, the United States has decided to fight back. The United States could no longer look the other way. When the United States Congress votes publicly to support resistance in Afghanistan and Nicaragua, something is happening. The omens are clear. I hope that we will support the United States because we know more about this type of warfare than almost any other country. We must draw this conclusion: if the Estimates to which we are working are not sufficient, they will have to be stretched and the necessary financial resources will have to be found.

6.52 pm
Mr. Dick Douglas (Dunfermline, West)

I do not propose to follow the remarks of the right hon. Member for Brighton, Pavilion (Mr. Amery), but I may refer to some of his points tangentially.

I congratulate the hon. Member for Plymouth, Drake (Miss Fookes) on her speech on the dockyards. I shall not say much about the dockyard at Rosyth, which affects my constituency, because the Select Committee on Defence will consider the Government's proposals and take a considerable amount of evidence. I would not want to prejudge its report. I shall adopt the same view that the Government seem to adopt—all the options are open. The Government's preferred option still needs critical examination.

Referring to putting the contracts to refit the Otter and Euryalus to tender, paragraph 511 of the statement says that the comparison

will enable us to compare the performance of commercial yards on this type of work with that of the dockyards. I hope that the Government will give a detailed assessment of the comparisons. I echo the words of the hon. Member for Drake: the period of consultation has been too short. Unless the Government can produce before 5 July the necessary figures for the Select Committee clearly showing the basis of comparison, their case will be in considerable doubt. We are entitled to a detailed consideration of cost.

I share the concern of the House at the demise of the Merchant Navy and urge all hon. Members not to be complacent about its numbers. They are "unduly" inflated because of North sea activity. I hope that that activity will continue for a considerable period, but it might not. I believe that the type of vessels that now operate will not necessarily fit our future defence requirements. I shall say nothing about Trident because the Select Committee will report on that aspect.

The right hon. Member for Pavilion referred to the threat that we face. This aspect is given considerable emphasis in annex A of the statement. It is, however, a guarded analysis. I part company with the right hon. Gentleman in certain respects. The statement gives us the impression that the Warsaw pact is monolithic. It is not. One cannot have a situation in which Poland or Rumania does not want to renew the agreement for five years or one in which Albania wishes to withdraw from the pact and still argue that the pact is monolithic.

Recently David Holloway said:

The non-Soviet members nominally contribute 55 divisions to the Pact's order of battle, compared with the 31 Soviet divisions in Eastern Europe. How much do the non-Soviet forces really add to Soviet military power? Would the Poles fight? They are the best-armed and the best-equipped members of the pact. How would the East Germans or Rumanians perform? I am not complacent about this matter. I have paid many visits to the area with other Select Committee members. I am not a defence expert and I do not have a military background. I make no apologies for my Merchant Navy background. I thought, because of my background, that it would be useful to become a member of the Select Committee to analyse the difficulties and complexities of this subject. It is difficult to become an expert on it. I feel for Ministers who must make the decisions. I have tried in all humility to gain some knowledge of this subject. The Soviet Union has not been looking since 1917 for buffer states to defend themselves. This has been happening for about 250 years.

I turn to the strategic defence initiative. We have heard a great deal about President Reagan's speech in March 1983 but little about the sums involved. This is part of the dilemma. As I understand it, we are talking of sums not far short of $30 billion to be spent before 1989. That is more than twice Britain's total annual defence expenditure. We must recognise the pull that that expenditure will exert in the military industrial context. The Nitze criteria—that we will not embark upon this programme unless it is "reliable, survivable and cost effective"—are impossible to fulfil.

We have had a meeting with Dr. Keyworth, the President's scientific adviser. According to the United States Information Service, he said:

I'll reiterate a prediction. Before the president leaves office, we're going to be able to demonstrate technology that convinces the Soviets that we can—if we choose—develop a weapon to shoot down their entire ICBM fleet as it tries to enter space. I understand that the President has about another three years in office. Therefore, if we are to accept Keyworth's view, such a prospect is not as distant as we might imagine. Keyworth is highly intelligent and is nobody's fool, but he frightens me to death. That is the view which we must answer in the context of our research and development prospects.

Yesterday I crossed swords with the right hon. Member for Plymouth, Devonport (Dr. Owen). Today I warn the House that we must be extremely careful about nomenclature. What the Americans mean by research and development may not be what we mean. In any case, the 1972 ABM treaty clearly circumscribes development. Article V of that treaty states:

Each Party undertakes not to develop, test, or deploy ABM systems or components which are sea-based, air-based, space-based, or mobile land-based. Therefore, research can be carried out only if the systems are fixed, and that places severe constraints on them.

That is not the type of system which Dr. Keyworth seems to describe. He is describing systems that can take out Soviet ICBMs at the boost stage. These are extremely dangerous and difficult developments, and it would be wrong of us—I support the suggestion of a full-scale debate on this issue — to stand back and say, "Everything is fine. All we will do is participate in research." I again stress that what we mean by research and development may not be what the United States means. In any case, I doubt whether we shall frighten the Russians to death on the basis of carrying out research.

I am concerned not so much about the cheapness of the nuclear deterrent as about the cheapness of chemical warfare. The West is ill-prepared to counteract what the Soviets or the United States are doing. If we are to do anything through the United Nations or the world community, we must reinvigorate national opinion on chemical warfare, because if our only answer to chemical warfare is the nuclear deterrent we are in severe trouble.

Labour members of the Select Committee, with other hon. Members, spent a lot of time preparing this report. I hope and trust that that report and the Government's White Paper will be widely discussed in the nation. In particular, I hope that the Select Committee's report will be read by all my constituents.

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