HC Deb 06 February 1986 vol 91 cc470-533

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Archie Hamilton.]

Mr. Speaker

As the House knows, we have a rather late start to the debate. A considerable number of right hon. and hon. Members have indicated their wish to take part. I hope that, in view of the time element, they will keep their contributions brief.

5.27 pm
The Minister of State for the Armed Forces (Mr. John Stanley)

This last year has been a busy and effective period for the Royal Navy. Within the NATO area, the Navy has taken part in a series of important national and NATO exercises in the eastern Atlantic, the Norwegian sea, the Baltic, the North sea, the Channel and the Mediterranean. Out of area, the Navy has maintained a constant presence in the south Atlantic, the Caribbean and in the vicinity of the Gulf.

Since our last debate on the Royal Navy, Royal Navy ships have visited a total of 83 countries, including the first visit to a Warsaw pact country, Romania, since 1979. The Navy has made a significant contribution to the surveillance of Warsaw pact shipping worldwide, and has ensured the round-the-clock viability of Britain's strategic deterrent.

Since the last Navy debate, the Navy has also taken delivery of 13 new ships and 22 aircraft, and orders for further ships and equipment for the Navy have been placed to a total value of more than £3 billion.

Mr. Martin J. O'Neill (Clackmannan)

How many ships has the Minister ordered?

Mr. Stanley

I shall come to that point later.

Other navies have been busy too—busy in operations and busy in construction. In July last year we saw the largest ever exercise by the Soviet northern fleet, designed apparently as a demonstration of how it might attempt to thwart NATO's reinforcement of Norway and establish Soviet sea control, not merely in the north Norwegian sea and the Barents, but in the south Norwegian sea and the north Atlantic. It was an impressive exercise, although the House will wish to know that the Royal Navy remains confident that, in conjunction with its NATO allies, it could establish sea control in areas of the north Atlantic and Norwegian sea, when so required.

The Russians currently have the largest submarine fleet in the world, with nearly 400 submarines now in service, including 63 nuclear ballistic missile submarines. At least six different classes of submarine are under construction, and a new submarine is continuing to be launched on average once every 35 to 40 days. The Soviet Union has an increasingly formidable fleet of surface warships that includes 320 ships of frigate size and above, and it has just launched the first of a new generation of aircraft carrier of a displacement approximately half as much again as the Kiev class.

The Russians are steadily improving their amphibious shipping. They have the largest stocks of mines in the world. They have one of the largest merchant fleets, the largest oceanographic fleet and the largest fishing fleet. Ships of all these fleets are regularly employed in naval and intelligence collection tasks in addition to their nonmilitary roles. They also have a strong, and still growing, naval aviation arm, with aircraft such as the Backfire with a significant conventional and nuclear stand-off capability against surface ships.

Admiral of the Fleet of the Soviet Union Sergey Gorshkov can put his feet up on the mantelpiece, well content with his service to his country. There is no reason to expect any slowing down in the pace of the Soviet naval programme under his successor Admiral of the Fleet Chernavin. Admiral Chernavin is a submariner. For the foreseeable future, the Soviet navy will constitute a major, and growing, challenge to the NATO countries.

I stress that the challenge is to the NATO countries as a whole, and it is NATO's collective response to the Warsaw pact's naval threat—not just Britain's—that is all-important. Fortunately, the NATO countries taken together are still way ahead of the Warsaw pact in the strength of their surface fleet, particularly in sea-borne tactical air power. We also continue to have significant advantages in other sectors such as the submarine detection technologies, replenishment at sea, and in the calibre of our seamen.

Many of these NATO maritime advantages are represented by the United States navy and that makes the commitment of the Labour party to send the main element of the USN in this country packing all the more reprehensible and irresponsible. We should be doing all that we can to strengthen the USN's presence in Europe, and not weakening it.

I move on to the Royal Navy's contribution to our defences both in the NATO area and outside. Later on, I shall come to the naval programme.

Of the European members of NATO, the Royal Navy provides the biggest single contribution to NATO's surface fleet. Of the naval assets committed to NATO, the Royal Navy provides the only European ballistic missile firing submarines, the only European nuclear powered hunter-killer submarines, and the only European aircraft carriers and amphibious ships. In defence, it is certainly always possible to argue that we should do more, but I do not think that anyone can reasonably suggest that we are not shouldering our fair share of NATO's maritime defence.

I shall mention two other operational commitments inside the NATO area with which the Royal Navy is continuously involved. The first is fishery protection, provided by the fishery protection squadron, based on Rosyth. Following a recent internal review of our fishery protection arrangements, the Government have concluded that the Royal Navy should continue its fishery protection responsibilities.

Over the years the squadron has developed a great deal of expertise in the surveillance of fishing vessels, in boarding them at sea, and in the abstruse but all-important subject of United Kingdom and EEC regulations governing the protection of a wide range of fish.

In addition to its primary fishery protection role, the squadron also provides valuable back-up to the civil authorities for search and rescue operations, for the protection of our offshore oil and gas platforms and for possible use in support of the Customs and Excise, for instance, against drugs traffickers. The work of the Royal Navy's fishery protection squadron is often, I am afraid, largely unsung, but it does a very important job in small ships, often in thoroughly unpleasant sea conditions, and it does it extremely well.

The Navy's second continuous operational task in home waters is in supporting the Royal Ulster Constabulary in Northern Ireland by patrolling the Province's 150-mile long coastline. During the last year we have replaced two of the ships in this role with more capable vessels. The Royal Navy ships and smaller craft engaged on this task, together with the Royal Marine detachment that serves with them, provides an important deterrent to the insertion of terrorists, arms and explosives into the Province by sea.

Although the commitments of the Royal Navy are largely in the NATO area, the history of the post-war period shows that actual operations are more likely to occur out of area. We have sufficient naval assets to take on some limited commitments outside the NATO area, and we consider it important that this capability is retained. We have no plans to withdraw our naval presence in the Caribbean or in the vicinity of the Gulf.

Royal naval vessels will continue to be maintained in the south Atlantic, but at the minimum force level that is commensurate with our defence commitment to the Falkland Islanders. We shall also continue to maintain our naval presence in Hong Kong in order to help counter illegal immigration there. As the House knows, I announced on 18 December that a Royal Navy task group would deploy to Asia and the Pacific this year. The deployment will be called Global 86. It will allow us to exercise with friendly navies in the Pacific. It will give some excellent opportunities for defence sales demonstrations, it will enable us to strengthen our naval contacts with both allied and non-aligned countries, and, as I said in the Army debate last week, it will enable us to give our Army and RAF exercise in Oman this year—Exercise Saif Sareea—a maritime dimension.

Global 86 should prove excellent value nationally and for those in the Royal Navy ships taking part. I understand that there has been no little enthusiasm to join the ships' companies involved.

I cannot leave the Navy's operational commitments without referring to its success in saving civilians from death and injury. We regularly see on television the way in which Royal Navy and Royal Air Force search and rescue helicopters perform the role of aerial lifeboats and save people from certain death in often appalling flying and sea conditions. In 1985, Royal Navy search and rescue helicopters in the United Kingdom lifted a total of 194 people out of danger from the sea. Overseas, the crew of a Greek merchant ship that was breaking up on a reef off the Seychelles was saved in difficult conditions by HMS Exeter's helicopter.

Most recently, we saw last month how the Royal Navy took part in one of the largest beach evacuations of civilians from a fighting situation since the second world years? Between them Britannia, Newcastle, Jupiter, Hydra, Brambleleaf and the merchant ship Diamond Princess evacuated about 1,400 people of some 50 different nationalities—plus, I understand, one dog of nationality unknown. This evacuation required some fine judgments on putting our ships inshore without undue risk to the civilians being brought to safety. It required the creation of communications links from scratch with those ashore. It required much patient and difficult negotiation, and skilled boatwork and helicopter flying. I know that the whole House will want to send our warm congratulations to Rear-Admiral Garnier and all those involved in that outstandingly successful operation. I now turn to the size and shape of the fleet and to the naval programme. I said at the beginning of my speech that since the last Navy debate orders for further ships and equipment for the Navy had been placed to the value of over £3 billion. The new ship orders represent two frigates, three mine countermeasures vessels, one nuclear hunter-killer submarine, and three conventional submarines, bringing the total number of ships on order to 28.

In considering the naval programme, I of course fully recognise the importance of the actual numbers of hulls. However, hull numbers are by no means the only key factor to be taken into account. Ships not merely need to be present in the area of sea required; they also have to be effective and survivable. There has therefore to be a continuous process of optimising the balance between ship numbers and ship capability.

Simply to ignore the huge sums that we have been, and are, spending to improve both the effectiveness and the survivability of our existing surface ships and submarines, as Opposition Members often do in these debates, is no doubt politically convenient but is in fact highly misleading. I am therefore going to start with the ship capability improvements that we have set in hand since our last Navy debate.

Mr. A. E. P. Duffy (Sheffield, Attercliffe)

Before the Minister leaves the question of numbers, which I suspect concerns more hon. Members than any other single matter, will he agree that to achieve the Government's programme of a surface destroyer and frigate fleet of 50 or 52 they will have to double their present ordering rate of destroyers and frigates during the next 10 years?

Mr. Stanley

I shall deal in a moment with the destroyer and frigate programme. The ship capability improvements that we have set in hand since our last Navy debate include joint procurement with the Army and the RAF of a further Skynet communications satellite; a major programme for the improvement of Sea Dart, including the production of further missiles; the main production order for more than 2,000 Sting Ray advanced lightweight torpedoes; a new electronic support measures programme for submarines, involving the retrofitting of both our Oberon conventional submarines and our Valiant and Churchill class nuclear powered submarines; an improved hull-mounted sonar for some of our Oberon submarines; and an improvement programme for the towed-array sonars for both our frigates and submarines. The total value of these measures and others taken since the last Navy debate to improve ship capability is some £1.7 billion.

I hope the House will bear in mind that these orders of equipment for existing ships and naval aircraft are operationally every bit as significant and valuable as the orders for new ships.

Turning to the different classes of ship and submarines, with HMS Ark Royal joining the fleet last year, we have settled into the operational pattern described in the last statement on the defence Estimates of maintaining two modern carriers operational and one in refit or reserve at any given time.

HMS Hermes is now on the disposal list and we hope to sell her abroad.

Mr. John Wilkinson (Ruislip-Northwood)

My right hon. Friend referred to the fact that he intends to keep two Invincible class carriers in commission. Will he clarify the position with regard to aircraft and air groups? Is it not the case that there will be only two operational air groups and that there could be a deficiency of aircraft and crews? How will the Royal Naval reserve air squadrons, which are working very well, help to keep the front line up to strength?

Mr. Stanley

I shall deal in a moment with the Fleet Air Arm. As my hon. Friend is aware, the assumption is that at any given moment we shall have two operational aircraft carriers. A fairly intensive refitting cycle has to take place. The third aircraft carrier will probably be undergoing a refit—possibly an extended refit.

Since the last Navy debate the final three type 42 destroyers have been accepted into the fleet. The last eight of the type 22s are on order, as is the first of the new class of type 23 frigate. The tenders for the next three of the type 23s have been received and are being evaluated, and we expect to be able to announce the first follow-on order for the type 23 later this year.

Mr. Nicholas Brown (Newcastle upon Tyne, East)

Will the right hon. Gentleman give way?

Mr. Stanley

Yes, I shall give way to the hon. Gentleman, but I am sure that both he and the House will be mindful of what Mr. Speaker said about the number of right hon. and hon. Members who wish to speak in this debate.

Mr. Brown

Does the Minister intend to place No. 2 of the type 23s as a separate order with Swan Hunter, as was previously pledged, or does he intend to treat Nos. 2,3 and 4 as a package and place all the orders at the same time?

Mr. Stanley

The hon. Gentleman will have to wait until we reach a final decision on the package for the follow-on orders.

Mr. Brown

A promise was made about No. 2.

Mr. Stanley

No. 2 was committed to Swan Hunter. I believe that that is still the position. As for the remainder of the package, I can go no further than what I have already said. I think that I have given to the hon. Gentleman the assurance that he wanted in relation to the second type 23 frigate. My understanding is that the undertaking that was given that it would go to Swan Hunter still holds good.

As far as our amphibious ships are concerned, HMS Intrepid has recently come out of refit and HMS Fearless's next refit is planned for next year. These refits will help to ensure the operational effectiveness of our LPDs into the mid-1990s. The largely rebuilt landing ship Sir Tristram has just rejoined the fleet, and on present plans the new Sir Galahad will do so next year. We have been progressing our studies both inside the Department and with industry on the options for continuing our amphibious capability and we should be in a position to decide the way ahead later this year.

Mr. Stephen Ross (Isle of Wight)

Can the Minister confirm that a hovership—I think from Bells—has been delivered to Portsmouth and is under assessment? Is there any future for the hovercraft industry if a hovership is being assessed? Will the Minister please promise that any work for hovercraft will go to the British Hovercraft Corporation?

Mr. Stanley

I cannot anticipate the outcome of the studies on the amphibious options. If my hon. Friend the Under-Secretary of State for Defence Procurement is able to elaborate on the hovercraft possibilities when he winds up the debate, I know that he will do so.

Mr. Keith Best (Ynys Môn)

I appreciate that my right hon. Friend wants to get on with his speech, but he will understand that considerable concern is being expressed about the future of the amphibious forces. I appreciate that a decision will be taken later this year. However, my right hon. Friend will have seen press reports which suggest that consideration is being given to extending the life of Fearless and Intrepid into the next century and to converting merchant ships to provide a facility for amphibious forces. My right hon. Friend must understand that that would be completely unacceptable to the House.

Mr. Stanley

My hon. Friend will understand that when my right hon. Friend the Secretary of State for Defence makes his decision he will want to be able to tell the House that he is suggesting a cost-effective way forward. The evaluation of the various options requires a detailed and expert study within the Department.

Incidentally, the House will be glad to know that my right hon. Friend the Secretary of State, notwithstanding the inevitably great pressures on his timetable, is going to northern Norway next month to see the Royal Navy and Royal Marines amphibious capability for himself. We are grateful for the sustained interest of Members of both Houses in seeing our Arctic warfare training in northern Norway. Ten Members of this House and of another place visited 3 Commando Brigade in Norway last year and another nine will be going next week. I should particularly like to congratulate my hon. Friend the Member for Plymouth, Drake (Miss Fookes) on her zeal in forsaking the comfort of a hotel bedroom for the delights of the arctic ration pack and a night in the snow with the Royal Marines.

The House is fully aware that the main operational commitment of the Royal Marines is to the United Kingdom-Netherlands amphibious force. The standard of Arctic warfare training that the marines have now achieved through training in Norway each winter is exceptionally impressive. Even the Norwegians now acknowledge that the Royal Marines are as good in the Arctic as they are themselves. Last year we sent a Rapier unit to train with 3 Commando Brigade for the first time, from which many valuable lessons were learnt, including confirmation that the operational performance of Rapier is not degraded by continuous exposure to very low temperatures.

Quite apart from their amphibious landing and Arctic warfare skills, the Royal Marines perform many other valuable operational roles. They have undertaken 26 Northern Ireland tours since 1969. 40 Commando is now making the first Royal Marine deployment to Belize, having carried out a United Nations peace-keeping tour in Cyprus last year.

The Royal Marines also provide units for protecting our offshore oil and gas installations, boarding detachments for the Falkland Islands patrol vessels, an air defence element for the Royal Navy ships in the vicinity of the Gulf, our maritime counter-terrorism capability and an important element of our special forces in the shape of the special boat squadron.

We are indeed most fortunate to have a highly trained and versatile Corps of Royal Marines, with its valuable reserve element, within our naval forces.

The modernisation of our mine countermeasures force continues. Since our last debate one more Hunt class ship has joined the fleet and another will do so shortly, and the last two of this class have been ordered. The first of the Sandown class of single-role mine hunters has also been ordered. Mine hunting with variable-depth sonar and the use of remotely controlled submersibles launched from the mine hunter is the most effective means of neutralising modern Soviet mines in the deeper waters of the continental shelf. We believe that the Sandown ships will be the most capable mine hunters in any western navy.

We are at the same time improving our minesweeping capability with the phasing out of the old Ton class ships and their replacement by the new River class. Nine of the 12 River class minesweepers are now with the fleet. Eleven of these will be operated by the Royal Naval Reserve, with one to be attached to each of the RNR sea training centres at Belfast, London, Bristol, Southampton, Dundee, Glasgow, Cardiff, Newcastle, Brighton, Edinburgh and Liverpool. In addition, the new class of patrol craft being built exclusively for the reserves and the Royal Naval Auxiliary Service should all be operational by this autumn.

These new orders have given a tremendous boost to the RNR which, for the first time since the second world war, now has a class of warships to operate itself. We are confident that the RNR and the Royal Naval Auxiliary Service, both of which are being expanded, will discharge their important responsibilities most effectively.

In relation to merchant shipping, we have said previously that the size of the British flagged merchant marine in the particular categories of ships that we require for defence purposes was such that we could discharge our NATO obligations, with the exception of stern trawlers for minesweeping. I am glad to say that we believe that we have found a satisfactory alternative way of meeting the minesweeping requirment by using North sea support ships. With the Department of Transport we are continuing to monitor very closely the potential availability of merchant ships for defence purposes into the early 1990s.

Mr. Richard Ottaway (Nottingham, North)

How will troops be transported to Europe in moments of heightened tension when the Channel tunnel is built and the number of ferries in service in the English channel diminishes?

Mr. Stanley

I refer my hon. Friend to paragraph 43 of the White Paper on the Channel fixed link which was published this week. It states: After carefully considering projections of the tonnage of total UK-flag cross-Channel fleet in relation to its existing level, the Government has concluded that there will still be sufficient ferry capactiy to fulfil our defence requirements".

Sir Edward du Cann (Taunton)

Is my right hon. Friend aware that in the serious and most carefully considered opinion of many people in the House and elsewhere, the Minister's statement that he believes that our merchant marine is adequate in time of war to reinforce the Navy is simply not justified by the facts? Many hon. Members are immensely concerned about that matter. Will my right hon. Friend please bear this view in mind?

Mr. Stanley

I stress to my right hon. Friend that I am talking about the requirements for merchant shipping for defence purposes which is a fairly restricted area of needs to be called on in wartime. That matter has been the subject of detailed study by the Select Committee on Defence which had full access to the classified information about our requirements and the availability of ships. If my right hon. Friend examines the Select Committee's response on that matter, he will find that its response does not reflect the view he expressed.

Dr. Alan Glyn (Windsor and Maidenhead)

I believe that the point raised by my right hon. Friend the Member for Taunton (Sir E. du Cann) is correct. There is general concern throughout the country that the merchant fleet is declining. There is anxiety that the fleet has declined to such an extent that it cannot fulfil the total commitments that are required for all our defence requirements, not just our NATO obligations.

Mr. Stanley

I appreciate and understand that concern but I return to the basic point that we have carried out a very careful analysis which was virtually a ship-by-ship requirement analysis of the defence requirements. Those requirements are quite separate from the wider requirements to maintain the economy in time of war, which is not a matter for the Ministry of Defence, but a matter for the Department of Transport. That raises a much wider issue. However, for specific, clear, defence requirements, we carried out a very careful analysis and I repeat what I said at the Dispatch Box—that, with the exception of the position on stern trawlers, for which we have an alternative, we are satisfied that we can meet our NATO obligations.

Since the last Navy debate, the Fleet Air Arm has taken delivery of nine more Sea Harriers and 16 new helicopters have been ordered. The helicopters comprise nine Sea King mark 4s, which will update the Fleet Air Arm's commando lift capability, and also seven Lynx mark 3s, which will be a valuable addition to the fleet's offensive capability. Work on the EH 101 with the Italians is progressing well.

Naval flying, both fixed wing and helicopters, is one of the most exacting tasks in the armed services. The standards that have to be maintained consistently by both ground and air crews are extraordinarily high. It is to the Fleet Air Arm's great credit that such standards are maintained.

Sir Antony Buck (Colchester, North)

As my right hon. Friend the Minister is dealing with helicopters, he must be aware that HMS Brazen is nigh unto Westminster at present. That is a splendid ship and has a helicopter on board. It does, however, have a capacity for two helicopters. I hope that my right hon. Friend will ensure that future type 22 ships and existing ships of this class will have the additional capability and are equipped with two helicopters.

Mr. Stanley

My hon. and learned Friend is quite correct. The type 22 does have the capability to carry two Lynx helicopters, and that is obviously an important potential operational enhancement. My hon. and learned Friend will understand that the situation in peacetime is not necessarily that which would apply in wartime. By having the additional physical capability on the type 22, we can increase the helicopter capabilty in wartime. It is not at the moment our intention in peacetime to put two Lynx helicopters on the type 22.

I come last, but by no means least, to the underwater navy. In 1986 we expect to order a total of five submarines, which will be the largest number of submarines ordered in a single year since 1963. Four were ordered last month—the first three follow-on orders of the new Upholder class of conventional submarines, together with the seventh Trafalgar class nuclear-powered hunter-killer submarine. The Navy now has 14 SSNs in the fleet, with a further four on order. We expect to place the order for the first Trident submarine in the next few months.

It is absolutely clear from the detailed and expert work carried out within the Government —and reflected in non-classified form in the open Government documents —that the only option that Britain has for maintaining an effective deterrent is Trident. The supposedly cut-price alternative deterrents that the right hon. Member for Plymouth, Devonport, (Dr. Owen) invariably comes forward with on these occasions—such as putting cruise missiles on to this and that and so on—would not give us an effective strategic deterrent.

Dr. David Owen (Plymouth, Devonport)

The right hon. Gentleman should look at the US navy.

Mr. Stanley

The right hon. Gentleman mentions the US navy. He knows perfectly well that that particular deployment is not the primary strategic capability of the US navy. If he had discussions with the US navy, he would know that, if they were in the same position as us—being able to choose only between a ballistic and a cruise system—the US navy and the US Defence Secretary would choose the ballistic route.

If there was a sensible, cheaper alternative, we would have bought it. There is not, and the right hon. Gentleman is simply kidding himself when he claims that there is. It is also absolutely clear that no equivalent expenditure on conventional equipment can produce a fraction of the contribution of deterrence that Trident represents.

No protection whatever is afforded against strategic nuclear blackmail, or worse, by any number of frigates, any number of tanks and any number of tactical aircraft. The idea that expenditure on conventional capability is any substitute in defence terms for expenditure on nuclear capability is pure illusion. Conventional expenditure may be an alternative; it is certainly not a satisfactory substitute. But it does seem from what was said last week that the Opposition are not even in the business of increasing conventional spending as an alternative to spending on the British nuclear deterrent.

When asked last week by my hon and learned Friend the Member for Colchester, North (Sir A. Buck) whether the Labour party would use the money from Trident to strengthen conventional forces, the right hon. Member for Llanelli (Mr. Davies) gave a very significant answer. He said: We have made it clear that we will abolish Trident. We have also made it clear that, without Trident, it will be possible to maintain conventional defence spending at present levels." —[Official Report, 30 January 1986; Vol. 90, c. 1126.] In other words, all that the Opposition are committing themselves to is the possibility—not even the certainty, just the possibility—that conventional defence spending will merely be maintained at its present level even after they have done away with Britain's deterrent. Clearly the Opposition have concluded that the present level of conventional spending is satisfactory. In the light of that, they have no justification to call in this debate, or any other, for more ship orders or more spending on the conventional Navy. Their policies clearly would not produce either.

The Royal Navy enters 1986 in good shape. The Government have spent about £3 billion more in real terms on the Navy than if expenditure had been kept at the level that applied when those who sit on the Opposition Benches were in office. The fleet is well balanced. It has good ships' programmes and much-improved ships' capabilities. The men and women of the senior service are of high calibre and strong commitment, as are the civilians who support them. They do both their service and our country proud.

6 pm

Mr. Martin O'Neill (Clackmannan)

We last debated the Royal Navy on 29 November 1984, and many of the phrases we have heard uttered by the Minister were used on that occasion as well. It is obvious that the MOD's word processor has a fairly large memory bank. The previous debate came within a period when there was still the prospect of 3 per cent. per annum increases in real expenditure. It came within the last year of that period, but there was still the belief on the Government's part that everything would turn out for the best in the best of all possible worlds.

Although Westland did not appear as one of the hazards in Voltaire's "Candide", certainly Doctor Pangloss's optimism was reflected in the calculations of the previous Secretary of State for Defence when it came to spending on defence, especially on the Navy. The objectives were quite clear to him. He believed that it would be possible to maintain fortress Falklands in the south Atlantic as well as other out-of-area commitments. It was to be possible to sustain the Nimrod programme, for example, and to finance the ever-increasing Trident programme. It was to be possible to keep at sea a 50-warship navy and to fund what might almost be described as diversions such as the torpedo programme in varying shapes and forms. All that was to be achieved within existing budgets, with the one caveat that if the Trident programme became very expensive something somewhere in the budget would have to be cut.

We were told that there would be no need for any defence reviews, that no additional funding would be available, and that that would not be possible in any event. We were told that if there were any problems, Mr. Levene would arrive with one of his gimmicks and produce the necessary savings. Many of us believe that if Mr. Levene is to justify his salary, he will have to be an alchemist rather than a business man. That will be necessary if he is to find anything like the resources that will be required. We have heard talk of 10 per cent. savings across the procurement budget but that is a remote possibility.

The half-baked proposals to privatise and contractorise the royal naval dockyards have not commended themselves to anyone except the zealots on the Government Front Bench. I realise that the proposed legislation is still in Committee. I have never been in a Committee room in which so few speeches have been made in support of the Government's proposed legislation. I remember the Second Reading debate when the Government Whips had difficulty in dragging Conservative Members into the Chamber to give the Bill unqualified support. That is to question the loyalty and the support of Conservative Back Benchers for the Government's policies.

Mr. Jonathan Sayeed (Bristol, East)

Has the hon. Gentleman asked the Royal Navy whether it is keen on the Government's proposals for the dockyards? If he consults engineering officers and those who serve in the Royal Navy in the dockyards, he will find that they are delighted by the proposals that are set out in the Bill that is now in Committee.

Mr. O'Neill

The answer to the hon. Gentleman's intervention is that much depends upon those to whom we speak. Those to whom I have spoken show no enthusiasm for the Bill. They are worried about their prospects and what they see as uncertainties. That worry is not confined to their self-interest in employment. It extends to the quality of the work that will be carried out when set against that which has been undertaken in the dockyards and the service that the Royal Navy has received over the years.

The primary purpose of privatising or contractorising the dockyards was to save money. No body of any standing in the House, either in the shape of the Public Accounts Committee or the Select Committee on Defence, has been impressed by the arguments advanced by the MOD. The PAC is normally a fairly restrained body when it comes to submitting its conclusions, but it regarded the evidence put forward by the MOD to support its case as being among the weakest, the most inadequate and insubstantial of that with which it had been presented. We cannot look for substantial savings in that area, even within the modest targets that the Ministry has set itself, before the end of the decade.

The newly appointed Secretary of State is not in his place and we are aware that he is still reading through the files. We might not be getting a full-blown defence review, but something is stirring in the undergrowth. We have heard already of the Cabinet's willingness to consider alternatives to Nimrod. The American journal entitled Aviation Week and Space Technology has been explicit. It has stated that Studies indicate that Britain could purchase about six E-3A aircraft"— that is with AWACS— or a greater number of E-2C's for the same amount it would require to get the 11 Nimrod AEW aircraft". There is quite specific talk about the options that are available and these issues will probably be raised in the forthcoming debate on the Royal Air Force. There is widespread discussion of the relative merits of the available options.

Within hours of being in the job, the newly appointed Secretary of State for Defence concluded that he could not continue with the level of commitment that the Government had set themselves within existing budgets. The latest public expenditure figures have suggested that there will be cuts of 5 per cent. in the budget over the next three years. If we were to assume that the Falklands expenditure was to be included, the figure would increase to about 7 to 8 per cent. If we were at the same time to take account of the fact that defence inflation is always about 1 to 2 per cent. in excess of the normal rates of inflation, we would be likely to see a 3 per cent. cut in real terms every year over the next three years in defence spending. The Minister has described—this is how he would put it—the number of hulls and the improvement in capability. I do not know whether he has been able to convince any of his right hon. and hon. Friends on that score. I know that some of my hon. Friends will be seeking the opportunity to put some searching questions to him and to obtain some rather more specific answers than those which he has given so far.

I am sure that we all welcome the fact that the Government have not reneged on their promise that the second type 23 would go to Swan Hunter. We are grateful for that. However, we are cynical, perhaps, in remembering that when the Defence Estimates were published in 1985, a significant gap was the omission of any announcement of tenders for type 23s. At the press conference at which the Estimates were introduced, the Secretary of State stated that three new type 23s would be ordered in the course of the year, according to Mr. Desmond Wettern, the naval correspondent of the Daily Telegraph. He is a man who should know, as the Minister has said. He certainly seems to have enough to write about and he seems to be the recipient of authorised or unauthorised leaks that are not investigated by the head of the Civil Service. In their own way, they are just as significant as some of those which are subject to his scrutiny. Having bounced the type 23s into this year's Defence Estimates we now find that they will be bounced into next year's Defence Estimates. If we live in hope, we shall doubtless have some prospect of a type 23 eventually.

My hon. Friends representing Tyneside constituencies will be trying to get in because they are anxious to give full vent to the bitterness and sense of betrayal felt by the shipyard workers on the Tyne. At the time of the Falklands war they were national heroes but they are now part of the forgotten army of the north.

About eight frigates are currently being built, four being replacements for ships lost during the Falklands war. By 1990 one third of the 51 warships in the Navy will be more than 25 years old. The Minister did not say, but perhaps the Under-Secretary of State could be a little more specific and tell us how many of the ships which will be more than 25 years old by 1990 will benefit from the improvements in capability to which the Minister referred in his opening remarks. Will he also confirm that if the ordering rate is not increased dramatically there will be no way in which we can maintain the standard of our fleet which we believe to be our rightful contribution to the Alliance? For the past five years an average of one ship each year has been ordered. That rate will have to be trebled if we are to maintain our commitment to the Alliance and provide our men with craft that are commensurate with their skills and loyalty to the service.

Mr. Sayeed

If the Labour party form the next Government will the hon. Gentleman say how many ships they will order, of what type and with what frequency?

Mr. O'Neill

The answer to that is simple. We cannot make any commitments until we know the ordering priorities of the Government. At present it is clear that the Government have no idea and a Government coming into power, as we will in 1987 or 1988, will have to wait to see the state of the Navy at that time.

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

That was a clever reply but it dodges the main issue. Has the hon. Gentleman anything to add or will he confirm the statement made by his right hon. Friend the Member for Llanelli (Mr. Davies) in the debate on the Army last week when he said: by cancelling Trident, we can maintain present levels of conventional defence spending." [Official Report, 30 January 1986; Vol. 90, c. 1127.]

Mr. O'Neill

I have nothing to add. My right hon. Friend said that following the cancellation of the independent nuclear deterrent and the decommissioning of Polaris we shall sustain our commitment to a conventional force.

I want to raise the matter of submarines. The Minister sought to claim some credit for the ordering of submarines. I can well imagine the satisfaction felt in Merseyside and Barrow-in-Furness over the orders that have been placed. The prospects for Scott Lithgow and the Clyde are worrying. Unless more submarines are ordered quickly the prospects are that that yard will have to close and it is unlikely that it wll be able to open again. It is a yard which has a tremendous expertise in that area and it would be a great loss, not only for the economy of that part of Scotland but to the engineering capabilities of the United Kingdom, if it were to be blighted simply because the previous Secretary of State had some emotional commitment to Merseyside from his days at the Department of the Environment.

I realise that there is now a new Secretary of State and it may be that he will look more favourably on that part of the United Kingdom. One can only hope for that. In Jane's Defence Weekly it was suggested today that there may be a possibility of a conversion order on the Atlantic Causeway and that it might go to Scott Lithgow. Perhaps the Minister could comment on that because Jane's Defence Weekly is a reasonably reliable source and is one which occasionally expresses the inner thinking of the Ministry of Defence. It would be useful if that rumour could be scotched or confirmed.

Mr. Cecil Franks (Barrow-in-Furness)

I understand the comments of the hon. Gentleman regarding the prospects for Scott Lithgow. Is he not aware that the official policy of the Labour party will mean the devastation of the shipyards in Barrow?

Mr. O'Neill

It is not the policy of the Labour party to achieve that and it is certainly not the view of Mr. Rodney Leach of Vickers. When I met him earlier this year he was happy with the assurances which I gave on behalf of the Labour party that on the basis of cancelling Trident there would still be sufficient work. If the hon. Gentleman read his local newspaper he would find that that was well covered at the time of my visit. It may be that he was out of the constituency on that day and did not read it but the management of Vickers has been assured by the statements of the Labour party.

Miss Janet Fookes (Plymouth, Drake)


Mr. O'Neill

I will not give way. There are many people who want to speak. If the Government are committed to giving the submarine orders to Cammell Laird and Vickers it may be to help and protect those areas but it could simply be to fatten them up before privatisation. The Labour party recognises the Government's need to get as much money as possible out of the privatising ventures which they are trying to carry out. Whether that money will be reflected in the Defence budget is another matter. I doubt it.

The subject of Westland will continue to come up in one shape or form and there was a reference to the hovercraft capabilities of that firm. It has been drawn to our attention that if the Minister or the Secretary of State had been as concerned about sustaining the orders for Westland as they were about sustaining one form or another of ownership, some of the problems that confront that firm may not have been as great. Will the Minister perhaps give us some idea on the question of additional helicopter orders? We welcome the statement about the orders that are currently in train, but I am led to believe that there is a possibility of about another 14 that could be ordered by way of commando and anti-submarine Sea King helicopters. Do the Government have any plans to increase their amphibious capability? Would they consider other uses for hovercraft and the like to help firms such as Westland which need assistance and which have products that the services could make use of?

The Minister made reference to the efforts of the men and women in the services and we echo his sentiments and congratulations on their sterling work in the Gulf and the evacuation role they played some weeks ago. However, some of us remember the great rebellion on the Conservative Benches last summer when the generals, admirals and vice-marshals received a rise of 17.6 per cent. more than the judges and the civil servants. The irony was that while those people had to be given the money to be kept in the job not many of them were actually leaving to go elsewhere. However, that is not the picture with the middle-ranking officers.

There seems to be a great deal of dissatisfaction in the Navy not only about rates of pay but conditions. In common with other parts of the public service, more and more is demanded of the armed services, and this is having a detrimental effect on morale. The Navy is short of officers by about 10 per cent., and the air crew for the Harrier jump jets is about 30 per cent. short of the full complement. There is a shortage of principal war officers to staff the ships' operations rooms and the like.

In the debate on the Army, my right hon. Friend the Member for Llanelli (Mr. Davies) raised the question of overseas allowances. He pointed out the Government's parsimony —on the one hand, they were increasing allowances but, on the other, they were increasing charges, which affected morale in the British Army on the Rhine. Some hon. Members may not be aware of one problem in the Navy. On the surface, the Bridport bus syndrome may seem to be a petty problem. Because the distance between Plymouth and Portsmouth via Bridport is less than 200 miles, expenses cannot be claimed for the trip. Serving officers are required to make a long journey at their own expense to take training courses. That is unreasonable. It may not be a major issue, but it is one of the gripes and grievances of men whose loyalty is beyond question. They should not have to be troubled by the Government's petty parsimony.

Mr. Peter Viggers (Gosport)

Will the hon. Gentleman give way?

Mr. O'Neill

I said that I would not give way.

Mr. Viggers

It is an important point.

Mr. O'Neill

I give way, on this point.

Mr. Viggers

I am grateful to the hon. Gentleman because this is a matter of great significance to my constituents. How dare the hon. Gentleman on behalf of the Labour party criticise this Government when the Labour Government in 1978 held down the pay of the armed forces by 32 per cent., which meant that the Conservative Government's first action was to increase pay by 32 per cent? Will the hon. Gentleman bear in mind that those people who suffered under the previous pay holdback are still suffering through their pensions? Is the hon. Gentleman not ashamed of that?

Mr. O'Neill

I recognise the validity of the hon. Gentleman's point. At that time, the Labour Government required sacrifices from many groups, not just the services. At the present time, many people not in the services are doing very well. One of the reasons so many people in the services are leaving and taking jobs elsewhere is that salaries outside the services are so attractive. Their training and skills would be of far greater assistance to Britain if they remained in the services. The Government must take account of the fact that the resignation rate in the services is approaching the level described earlier. We are coming full circle on this issue. We are now reaching the stage when the services regard the Government with the same distaste as they regarded the Labour Government.

We welcome the orders that have finally been placed for Sting Ray. We should have liked the Minister of State to be a little mare forthcoming on the issue of Spearfish, the cost of the programme and the possibility of obtaining co-operation with other countries with a view to defraying expenditure. My hon. Friend the Member for Sheffield, Attercliffe (Mr. Duffy) may raise this and related procurement matters.

I do not believe that the Minister satisfied any hon. Member with respect to the merchant fleet. He fudged the issue. To suggest that a study, which was carried out solely to meet the needs of the Ministry of Defence, was valid at a time when the Ministry of Transport will be chasing after the same craft to fulfil other related functions is almost to mislead the House. That is not good enough. I think that there is unanimity on this matter. In 1975, there were 1,600 British owned and registered ships; in 1986, we have 640. In 1975, there were 81,000 officers and ratings in the Merchant Navy; in 1986, we have 33,700. Such decreases are a national disgrace and should not be viewed with the complacency the Minister showed.

The Minister told us that there had been a working party report. I understand that many of its points will be rebutted. in the next few weeks by a publication produced by the Maritime League. Those of us who are members of the maritime group in the House will await the working party's detailed examination with interest. I do not think that the report will in any way support the Minister's complacency. If we are to have an adequate response in a time of crisis, we must look to the Merchant Navy for assistance. It is an essential part of our defence arrangements.

In my speech I have placed more emphasis on procurement than on any other strategy. At the heart of the Opposition's case is the fact that the Government's commitment to the grandiose, irrelevant and increasingly dangerous independent nuclear deterrent is forcing the rest of the Navy to carry out its duties with aging craft and out-of-date equipment, supplied by industries that are ready to provide some of the best craft in the world but are denied continuity of orders and the assurances that they will get the work for which they have tendered.

The Government have succeeded in pleasing no one with their naval policies. To fund orders for Trident, other orders have been half called for and then cancelled. Creative accounting techniques are being adopted to keep certain aspects of expenditure down. We have areas of high unemployment where people have the skills and capabilities to provide support for the Navy, as they have done in previous years, but those skills are being lost to the country because the Government do not have the guts to face up to reality. We are now a medium nation with limited economic capabilities. We have neither the right nor the means to carve for ourselves the role that the Minister sought to advance.

6.27 pm
Sir Edward du Cann (Taunton)

It is good to see my right hon. Friend the Secretary of State for Defence in his place. I hope that he will allow me as an old friend, because we served together in the Territorial Army during a period that we much enjoyed and look back on with nostalgia, to wish him every success in his new responsibilities. Providing he keeps a flow of money coming to the Royal Navy in ever-increasing amounts, he will certainly have no trouble from me.

It may be within the recollection of hon. Members that in the past few years I have raised the subject of hydrography in these Navy debates a dozen times. I regret the need to do so again. Paragraph 4.21 of the second report of the Select Committee on Science and Technology entitled "Marine Science and Technology", which was published in the 1985–86 Session, states: there was criticism of the failure to develop a coherent policy to survey, exploit and manage the UK's Exclusive Economic Zone". That is followed by a series of references to evidence taken by the Select Committee. The report continues: existing knowledge of the UK EEZ was by no means complete … the Hydrographer"— of the Navy— commented that only 15.7 per cent. of the UK Continental Shelf was considered by hydrographers to be properly surveyed, a figure which was increasing … at only 1-2 per cent. per annum". I do not know what the opinion of the House may be about that clear view. Mine is simple and simply put. I applaud what my right hon. Friend had to say in his excellent speech about increased expenditure on maritime matters, but it is surely a scandal that, seemingly through carelessness, we do not afford the comparatively trivial funds necessary to survey our home waters thoroughly. The potential for riches in and under the sea is unlimited, as the discovery of oil in our waters has evidenced.

By failing to co-ordinate research —that is the report's theme, and it is well worth careful study—and failing to research in our own backyard, so to speak, we betray the tradition of Cook, Beaufort and other great navigators of whom the contemporary Navy is so rightly proud.

Future generations will condemn our contemporary indifference. We are becoming a nation of non-decision and non-doers. In that respect, speaking of the hydrographic fleet, I hope that we shall soon hear something about the replacement for Endurance.

That is not the only failure. I come to the chief matter which I wish to raise—the fourth arm of our defence, referred to by my right hon. Friend and by the hon. Member for Clackmannan (Mr. O'Neill). I can put my point in one sentence. It is an urgent matter. The serious decline in Britain's merchant fleet now puts our defence and our economy in deadly peril. The answer to the point that my right hon. Friend made in his reply to the intervention that he was good enough to allow me to make is that this country's defence and commercial maritime interests are wholly indissoluble. Underlining almost all the United Kingdom's trading activities is an inescapable maritime link, the most important element of which is merchant shipping. The British merchant fleet, and many other important elements, are now in such sharp decline —that is the point that the hon. Member for Clackmannan was making —that they face possible extinction within the next few years. The process is not a self-correcting one. It can only worsen if present policies are allowed to continue. We have it in our power to arrest the decline, to safeguard and create employment in our society and to enhance our defence capability. That is what I wish to argue for.

I have such respect for my right hon. Friend that I regret to have to make these points, but I am glad to make them in the presence of my right hon. Friend the Secretary of State. The complacency of the Government and Ministers in this most serious situation is astounding. The hon. Member for Clackmannan referred to the great Dr. Pangloss of whom Francois-Marie Arouet—Monsieur de Voltaire, the phoney philosopher—wrote, and who said that everything was for the best in the best of possible worlds.

As my right hon. Friend said, we have had a report —no doubt most carefully worked on in his Department —but if ever a report was Panglossian, that was it. I give him an immediate answer to the point that he was making, after my intervention and that of my hon. Friends, if he believes that our merchant shipping capability is adequate for our defence needs. I shall give him one example of the way that it plainly is not. The whole House knows it is not. We could not mount another Falklands operation today. We do not have the ships.

What are the facts? As the House is aware, and as the hon. Member for Clackmannan said, 10 years ago there were 1,600 ships of 500 gross registered tonnes and upwards on the British register. Today, the number is not the 640 that he mentioned; it is less. It is probably only 600, and the number continues to fall. The latest evidence was shown by BP flagging out the other day. What a blow that was for British maritime pride.

The order book for new ships for the British fleet is now at rock bottom—a mere 250,000 tonnes. I have long felt, and often said, that we could have many more ships in the Royal Navy if only we went for simpler and cheaper ships. We often complicate matters of design.

Mr. Best

Hear, hear. The S90.

Sir Edward du Cann

I am much obliged to my hon. Friend.

As a young man in the Navy, in the closing stages of the war I served in what was called a "Woolworth aircraft carrier". How effective were those cheaper ships. They did an extremely good job. We badly need more naval ships. My right hon. and hon. Friends face great difficulty in ordering them because of the expense. We all understand that. If there were a change of Government, the successor Government would face the same difficulty. That was one aspect of the teasing that went on earlier in the debate. If the designs were simpler and we had cheaper ships, we could undoubtedly have more.

There are no ships in the distant water trawling fleet. I do not know how my right hon. Friend can, with a straight face, quote that report and say that we have an adequate defence capability while we have no ships in the distant water trawling fleet.

If we have fewer ships, other industries suffer. We heard an impassioned comment from the hon. Member for Jarrow (Mr. Dixon) about shipbuilding in a question to the Prime Minister earlier today. We see on the tape today that three north-eastern yards are going to amalgamate. We all know of what that is the first stage. One of them will close shortly. That is what that means.

If there are fewer ships, other industries suffer —shipbuilding, ship repairing and those businesses which produce many kinds of marine technology and marine engines. The list of industries is long.

The net contribution to the balance of payments made by United Kingdom-owned ships has fallen by £2 billion over the past 10 years.

Qualified seafarers—a point mentioned by the hon. Member for Clackmannan —have decreased over the same period from about 90,000 to 30,000. Five colleges of nautical education have closed. We are rapidly losing not just our material and financial assets, but our professional people who could do something to restore them.

The defence implications are disturbing for the United Kingdom as well as for NATO. The capacity of our country, if not of Europe, to supply itself in time of war is now in doubt. There is a shortage of ships of all classes — minesweepers, troopers, tankers, general cargo carriers and ships for harbour duties. The list is long.

The manpower reservoir for the Royal Navy is hopelessly inadequate. At the outbreak of war in 1939, there were 140,000 people at sea. The number today is a mere quarter of that figure.

On the economic side, the percentage weight of United Kingdom exports carried by British registered ships has fallen to about one quarter of the total. If we take the tonne-mile figure, it is now below 20 per cent. —less than one fifth of the whole. That means that the bulk of the United Kingdom trade —and the overwhelmingly greatest proportion of it by weight, 98 per cent. or so, goes by sea—is in the hands of our competitors. I do not know the view of right hon. and hon. Gentlemen, but I regard that as an intolerable and dangerous position. One might ask, what is the point of having a Royal Navy if we have no merchant marine to defend?

There are many reasons for the decline of the British merchant fleet —the worldwide economic recession, changing trade patterns, the misjudgments that have been made, especially about tankers, depressed freight sales, protectionism and a lack of profitability. Right hon. and hon. Gentlemen could no doubt add to that list. I do not think that we would quarrel about any of the matters that we would put into the list.

The main underlying cause for the decline of the British merchant fleet is the impracticability of trading fairly in a market which is no longer governed by economics alone. Competitors will do anything to survive when far too many ships are chasing too little cargo.

This debate is primarily concerned with the military threat to the United Kingdom and our NATO allies. The commercial threat is equally important. It was Nye Bevan in a much quoted phrase who said, "Why look in the crystal when you can read the book?" That is the declared intention of those who threaten us commercially to force us beyond the point of recovery. Read the proceedings of the International Marine Conference in Peking in 1984 or the reports from the shipbuilding industry in South Korea in 1983. Our competitors in the free world seek to destroy our civilian maritime capacity, and that is a fact.

In the admirable speech of my right hon. Friend at the beginning of the debate we heard of the immense increase in the activities of the Communists in maritime affairs. My right hon. Friend was saying: look at the expansion in their merchant fleet, look at the expansion in their fishing fleets, and so on. We are under attack, therefore, from both sides —from those who should be our friends as well as those who are opposed to us politically and ideologically — and what do we do? Every right hon. and hon. Member knows what the answer to that question is: we do nothing.

The time has come for action. We face an emergency. It is time that we had and announced a national maritime policy; it is time that we had a declaration of interest at the highest political level. What should we say? We should say that Britain recognises how vital is her maritime trading system. We should say that we intend to safeguard what we have, not let it slide away still further, and to develop it. That involves co-ordination, of course.

I thought it was very interesting that in my right hon. Friend's speech at one moment, on the subject of the merchant marine, he said, "Oh, well, you see, all that would be a matter for the Department of Transport". That is just the trouble—divided responsibility. There are 14 different Departments concerned with maritime affairs and a multiplicity of organisations outside the business of government.

I suggest to the House in all seriousness that we need a single Minister who will be responsible for evolving policy. He might set himself these priorities: to make a thorough assessment of our defence needs in terms of ocean-going and coastal merchant shipping, and then to harness support within the European Community. There is not much sign of that at the moment. I thought that one of the great advantages of going into Europe was that we could all act together and come together. Here is Europe, this great trading block, vastly bigger than the United States, much bigger than Japan, for instance, and we seem to be fighting one another. We have plenty of muscle and no common practices.

Why do we not make a start with coastal shipping and cabotage instead of having a whole series of different organisations and permitting, as we do, ships from other countries in Europe to do virtually what they like in United Kingdom waters while we are precluded from trading successfully in theirs?

I would mobilise the European countries and international support in order to see that excess tonnage is scrapped and that we return, so far as we can, to normal economic criteria in the market place. I would seek to harness all the talent and research resources that we have in the United Kingdom so that this single co-ordinating Minister could be helped in his task.

I would take as a firm objective the profitable operation of merchant shipping in private hands. The industry has put up some excellent suggestions to the Chancellor for fiscal measures which would be of great help in his forthcoming Budget. I hope that they will have the support of my right hon. and hon. Friends in the Department of Defence, additional ship allowances, rollover relief, and so on. There is a window of opportunity at the moment through which it would be easily possible for British ship owners to purchase second-hand ships. The market is very much in their favour for doing that. It would be a pity to let the opportunity slip.

One could continue with a list of items which it is possible to do. The fact is that the present situation is intolerable and the reality is that there is no earthly need for us to tolerate it. I believe that it would easily be possible to mount a series of constructive proposals which could transform the present situation from being a hopeless one into one which contained a new degree of hope.

If I may, I will quote from the humble address of the Commons to the Sovereign, Queen Anne, in 1708: Other nations which were formerly great and powerful at sea, have, by negligence and mismanagement, lost their trade and seen their maritime strength entirely ruined. Therefore we do, in the most earnest manner, beseech your Majesty that the Sea Affair may be always your first and most peculiar care". Plus ça change—those words are as relevant today as they were 277 years ago.

I beseech my right hon. Friend to realise the peril that we are in—"peril" is a word I use advisedly—from the defence and from the economic point of view, confident in him, as I am in his new, proud office, urgently to take those measures that are necessary and possible to improve and to restore the situation to what it should be.

6.46 pm
Dr. David Owen (Plymouth, Devonport)

I agree with every word that the right hon. Member for Taunton (Sir E. du Cann) has stated about the dire peril facing our merchant marine. I hope that the new Secretary of State, whom I wish well, will reflect on the views that the right hon. Gentleman has expressed because I think that they are widely held, not just on both sides of the House, but throughout the country.

The Secretary of State deserves our congratulations, but he also deserves our sympathies. I do not think that anybody has ever taken over the job of the Secretary of State with such a number of postponed decisions and facing such a very difficult financial squeeze. There are many reasons, of course, why the right hon. Member for Henley (Mr. Heseltine) is no longer in the Government, but certainly he was going to face some politically very difficult questions.

I am not sure how clearly right hon. and hon. Conservative Members have realised what is happening to the defence budget. After all, until November last year, we were still hearing pledges about the defence budget being held to "level funding", yet we now discover in January 1986 that the Secretary of State for Defence will have to make do in the coming year with a defence budget that will be further cut. Between now and 1998–99 we are to see the equivalent in real terms of a 7 per cent. cut in the defence budget. That is on some very optimistic inflationary assumptions. If one looks at the problems in the Secretary of State's in tray, one sees, just to name a few, the Nimrod airborne early warning system—a very difficult decision which now faces the Secretary of State, postponed by his predecessor. Next is the question of the amphibious forces. Many of us are simply not prepared for us not to have an amphibious lift capability, for which there is a continuing argument. Yet the Minister of State confirmed that there will be no early decision. Then there is the question of fortress Falklands which is costing us £52 million in 1985–86 and is estimated to cost £192 million in 1988–89. On top of that, as the right hon. Member for Taunton said, there is the question of the replacement of HMS Endurance. Then there is the question of agency management in the dockyard, to which I shall return, which will cost the Navy more money over the next few years—these very difficult years in which we are adding to the budget. The Minister of State hopes that in the longer term it will produce economies. I have great doubts about this. However, it is an additional cost. On top of that, we have Trident—the cuckoo in the nest.

I shall now deal with the inflationary assumptions that may face the Secretary of State. The Government are assuming that in 1986–87 the Armed Services Pay Review Board will suggest an average pay increase of 4 per cent. If it suggests a 5 per cent. pay rise, it will add about £200 million to the defence budget, which is 1 per cent. above the assumption. It must be remembered that people will make many comments about the problem of morale, especially in the middle ranks. A 10 per cent. sterling depreciation against the dollar in 1986–87, which nobody can rule out, will add £300 million to the real terms cost of Trident.

The Secretary of State will have to make some unpalatable decisions, especially as the new fighter aircraft, which is the result of a welcome European procurement decision, is not even included in the longterm costings and must now be absorbed. I hope that the Secretary of State will examine Trident, and that his decision not to announce the Trident order today, which many people expected to be made in January, means that he is reconsidering Trident. Given the Conservative party's commitments, that is an extremely difficult decision for a new Secretary of State to make.

Many people throughout the country and a growing number in the armed services who want Britain to retain nuclear weapons, as I do, and believe that we should contribute to the European nuclear deterrent honestly believe that Trident is not affordable. I have never denied that it is a brilliant system, and I am glad that the United States has it, but I call in aid the recent change of position of the editor of Jane's Fighting Ships. He now calls into question the cursory look given to submarine-launched cruise missiles. He says that submarines would be brought too close inshore, and would not have the obvious advantage of being 3,000 miles out to sea. He says of the outer Hebrides, the waters of the south Norwegian sea and the North sea: Anybody who has carried out operations either in, or in pursuit of a submarine in the confused waters which can be found in all those places might suggest that detection and destruction are by no means easy. If, as the essay says, the cruise missile is vulnerable to Soviet defensive systems, this, presumably, is true of the land-based version and calls into question the efficacy of those now being emplaced in Europe. These, indeed, are not classified as 'strategic' missiles but today too many are inclined to dismiss 'mere kilo-tonnage' . It is essential that we hold a minimum deterrent, and it is right that we should consider submarine-launched cruise missiles, which are extensively deployed in both the United States and Soviet navies.

Mr. Stanley

Does the right hon. Gentleman accept that one cannot operationally combine in the same SSN an attack role and a deterrent role? If he accepts that, will he tell the House how many dedicated SSNs for the carriage of a British submarine-launched cruise missile system our country would need to provide a credible deterrent to the Soviet Union, and what it would cost?

Dr. Owen

The right hon. Gentleman is making the great mistake of trying to mirror the Trident system. It is not necessary to have a completely dedicated submarine system, and neither the United States navy nor the Soviet navy has one. They have a mix, which is right. The dedicated submarine increases the costs substantially.

The British deterrent is a contribution to NATO, and is in place, first, for political reasons with the operation of the French, and, secondly, for use, if NATO frayed at the edges, the United States pulled back and there were major questions about the nuclear guarantee. In that case it would be possible to change the deterrent, give it a more dedicated commitment, and to pull out some conventional armament. We would have warning of the break-up of NATO, but we would have insufficient warning to start laying down new submarines and systems. A minimum deterrent means that one is not getting the best, but is saving money.

Mr. Gorbachev's proposals have produced a dramatic change in the Soviet arms control position. Instead of being deeply hostile to the French and the British nuclear deterrents, the Soviets have accepted that missiles with a range over 1,000 kms will be held by the French and the British into the second stage of the disarmament proposals, which they have advocated. They regard it as a quid pro quo for them rejecting the part of the zero option that required them to take SS20s targeted on China and Japan out of Asia, Therefore, at least there is now a degree of symmetry in the Soviet position. The Soviets have accepted the need for a European-based nuclear deterrent, although they want America to remove all its land-based missiles in return for them removing all SS20s from a line beyond the Urals which has already been agreed in the arms control negotiations. That is a significant and major change, and Britain should now be talking to the Soviet Union about the issue, as well as to our American allies and, particularly, the French. We have a new opportunity to reach a broad agreement to replace Polaris with an equivalent level of megatonnage and of deterrence; and not to opt for the staggering increase in megatonnage and warheads that is so critical. That must be faced, and is an important part of arms control and disarmament.

Resources will be necessary if we are to maintain the nuclear submarine build rate, for which the Minister, rightly, claims some credit. I am pleased at the conventionally powered submarine build rate, and at the emphasis on submarines, which are the most crucial part of a modern navy. Moreover, the Royal Navy can make a unique contribution to NATO with its submarines. We need role specialisation within NATO, and it is natural for the United Kingdom to emphasise its maritime wing. If we could share roles, it may be possible slowly to reduce our contribution to BAOR with the agreement of our allies so that we can devote more resources to our naval and maritime role.

Unfortunately, I shall not be present when the Minister replies, so I shall not take up too much time. The Secretary of State is present, has legislation in Committee, and knows the position of the SDP which has been ably put by my hon. Friend the Member for Portsmouth, South (Mr. Hancock) in Committee, and of the Labour party. It is clear from reading the Committee records that the Government will not give way on two fundamental points. First, they will take the dockyards out of the Civil Service. I bitterly regret that decision and think that it is a poor way of repaying dockyard workers for their years of dedicated service. Secondly, it is also perfectly clear that the Government will create a commercial company. I beg the Secretary of State to review the agency management proposal of his predecessor. I know of no one who believes that an enterprise the size of Devonport dockyard, let alone Rosyth dockyard, can be run, if it is split in two, with the Ministry of Defence owning the capital assets and a private management agency employing the men on a contract of only seven years. The Government have never in any of their privatisation measures put in jeopardy the contracts of employment of the workers, and limited it to seven years. Workers at British Telecom, British Gas and the rest have the normal expectation that if they work reasonably well, they will have a job until retirement. The seven year contract of employment for dockyard workers is a ludicrous and savage way of repaying them for their years of loyalty. It does not make industrial sense. Many private industrialists have criticised this agency management scheme. I know of none who thinks it a sensible idea. Independent consultants who have advised Plymouth city council have come out against the idea of the separation of capital from management and employees.

If the Secretary of State for Defence cannot change and has to go ahead with the commercial plc, then at least let it be an integrated corporation, with the majority shareholding owned by the Ministry of Defence. The shares could be quoted and the management and the work force could buy shares. There should be one unified enterprise and the agency management scheme should be ditched.

If the Secretary of State for Defence did this or expressed a readiness to do this, perhaps after the Committee stages, he would be surprised at the cooperation he would get from the trade union movement. He would be surprised at the extent to which it would be prepared to look at the practices and to contribute. It does not like any of the proposals—which is understandable — but it deeply fears this proposal of separating out management and employment from capital. The trade unions know how often the dockyards have scrimped and saved in the past. They fear for its efficiency and its capacity to compete. The Devonport dockyard is prepared to compete on even and equal terms but it needs to be given the unity of an integrated enterprise.

The Secretary of State for Defence earned quite a reputation for himself as Secretary of State for Scotland for his open-mindedness. I therefore hope he will reassess the whole position. If he does so the Royal Navy will be grateful because it will not have its best interests served by the agency management proposal. There are a good many of us who fear the consequences of the present reorganisation at Devonport dockyard. If the Secretary of State was to rethink, he would earn a great deal of respect from many people who have worked in the dockyard a lifetime and who wish to continue to contribute to the maintenance of the fleet and in service to the Royal Navy. They are prepared to make changes in work practice and become more efficient but they want to see some give and understanding from the Government on an issue of fundamental importance for themselves. It is of fundamental importance for my constituency and the city of Plymouth.

7.1 pm

Mr. Cecil Franks (Barrow and Furness)

It is good, sound and accepted parliamentary practice for a Member to declare an interest, if he has one, in the subject matter of a debate. I declare such an interest without any sense of shame—the interest of 12,500 constituents whose livelihoods and those of their families depend upon Navy defence contracts and expenditure. I wish to concentrate my remarks on the relationship of Government defence contracts to employment and employment prospects.

It is pertinent to remind Opposition Members, in particular, in this centenary year of submarine building in Barrow, of the long, close relationship between south-west Cumbria and the Royal Navy—a relationship going back to 1877 when HMS Foxland, the first frigate, was commissioned by the Royal Navy, followed by the first submarine, built for a foreign country, in 1886, the Nordenfelt, and then by the first submarine built for the Royal Navy in 1901, HMS Holland. Since 1901, 297 submarines have been built in Barrow for the Royal Navy.

It is fair to say that the whole economy of south-west Cumbria depends upon naval contracts and especially on submarine building. Yet throughout the whole of the 30-minute speech from the Labour Opposition spokesman, the hon. Member for Clackmannan (Mr. O'Neill), there was not a single grain of comfort nor a single word to reassure the 12,500 people working in Barrow of their continuity of employment should Labour party policy prevail. In response to an intervention to point out this omission, the hon. Gentlenan said: I have nothing more to add. Does he not feel that the largest heavy engineering complex in the United Kingdom deserves better than I have nothing more to add."?

Mr. O'Neill

I am grateful to the hon. Gentleman for giving way. I thought I had made it perfectly clear that we can provide documentary evidence to show, if he is not satisfied that at least the management of Vickers is satisfied, that, in the event of a Labour Government cancelling Trident, work will continue at Barrow and there will be a sufficiency of work to maintain the labour force at its present level.

Mr. Franks

I shall come back to that point. It is a point that I shall certainly not forget because the senior management of Vickers is listening to this debate. What it wants from the Labour Front Bench is not platitudes —it wants specifics.

The Opposition have been hooked for a long time on their commitment to scrap Trident. I do not wish to deal with the strategic implications of that policy, but I remind the Opposition, especially the Labour Front Bench, that Trident is the cornerstone of British and NATO naval defence policy.

The Trident programme is also vital to those constituents in Merseyside and south-west Cumbria whose livelihoods depend on it. Notwithstanding the words of the right hon. Member for Plymouth, Devonport (Dr. Owen), I am grateful to my right hon. Friend the Minister of State for the Armed Forces, who opened the debate, for his reassurance, recommitment and reaffirmation of the Trident contract. The Trident programme has already started. The design and the long lead orders are being fulfilled. Currently there are 2,300 of my constituents employed on that programme, and at its peak there will be over 10,000 constituents employed on Trident. What does the Labour party propose as substitute employment for those 10,000 constituents? It is a question that the Labour party has consistently avoided. Labour Front Bench spokesmen continue to come out with platitudes—but platitudes are worthless when jobs are on the line.

No Government have done more for my part of the country than the present Government. We have the commitment to Trident and the work has started. In addition, the Barrow shipyards are currently building four submarines recently ordered by the present Government. The shipyards at Cammell Laird, a subsidiary of Vickers, are building a further three submarines. Those orders represent jobs. Those jobs will take my part of the country into the next century in terms of security and prosperity. The value of the orders is in excess of £1,000 million. Continuity of employment is assured for approximately 15,000 people.

Those orders have been won not by special pleading, but by hard, commercial tendering in competition. I hope the new Secretary of State for Defence will follow his predecessor who, when appointed to the office, paid a visit to the shipyards in Barrow. We are grateful for the frequent visits made by the Under-Secretary of State for Defence Procurement to our part of the country; he has always been and always will be welcome.

The Government's commitment is in sharp contrast to the Official Opposition who make regular pilgrimages to Barrow. Tomorrow the hon. Member for Sedgefield (Mr. Blair) will visit the area; a few months ago we had a visit from the hon. Member for Clackmannan. They come and they go, yet they still lack any firm commitment to what will take the place of Trident.

It is not yet official policy, but the Labour party has suggested that it intends to replace Trident by building more SSN hunter-killers. I hope that this is not what we shall hear from the right hon. Member for Llanelli (Mr. Davies). Has the Labour party ever thought through what it is saying? Does the Royal Navy need or want that many more hunter-killers?

Mr. Duffy


Mr. Franks

Does the Royal Navy have the personnel to man them? That is the weakness of the Labour party's thinking. It is no good fudging the issue, as it does over and again. Four years and more have passed since the Labour party made its commitment to scrap Trident. It has had long enough to come up with specific proposals as to what will take its place. The nation wants an answer, my constituents want that answer.

The Labour party is not just anti-Trident; it is emotionally anti-nuclear. I invite Labour Members to explain their inconsistency; they oppose nuclear energy but want to increase the number of nuclear-powered submarines. That inconsistency rings hollow.

On 31 March, Vickers, which incorporates Cammell Laird, will pass into private ownership. We do not know at this stage who the bidders will be and it would not be proper for me to express a firm commitment to any of them, but I should like to express my firm commitment to the philosophy of a management-employee consortium buyout. The whole House should welcome wider share ownership. I trust that, when the decision is made, we shall have a strong and truly independent naval defence contractor.

I remind the House that the Royal Navy embraces far more than ships, submarines and the men who man them. Within its family are whole communities whose prosperity depends on it, just as it in turn depends on the skills and enthusiasm of the men who build the ships.

7.12 pm
Mr. Ted Garrett (Wallsend)

I believe that I am the first Labour Member to congratulate the Secretary of State on his appointment. I endorse what the right hon. Member for Plymouth, Devonport (Dr. Owen) said about his having a more pragmatic approach. He faces enormous problems and I hope that he can overcome them for the general good of the nation.

I should like to endorse what the right hon. Member for Taunton (Sir E. du Cann) said. I thought that he was reading excerpts from some of my speeches about the Royal Navy and the shipbuilding industry. He made some strong and pungent criticisms and it would be foolish of the Government to ignore what he said.

I speak on behalf of my consitituents in Wallsend in the north-east and the Swan Hunter group, which is the biggest employer in the area and has been privatised. We are facing up to the reality of vigorous competition in defence and other activities. The public should rid themselves of the idea that the shipbuilding industry delivers late and has massive industrial relations problems.

I have looked at the record of delivery dates of some of the vessels built on the Tyne in the past two years. I found that, with the exception of the Atlantic Conveyor, all had been delivered on time. Indeed, much to the embarrassment of the Royal Navy, the Ark Royal was four months early. The Navy did not know what to do with it so it had a play about, after which it was delivered on time.

The original Atlantic Conveyor was sunk in the Falklands. The replacement could be a lesson to some of us. It is geared to perform a dual role. Part of the bridge is designed for Merchant Navy use and another is designed for action in the event of hostilities. It was late principally because it is owned by Cunard, which was trying to get a Rolls-Royce for a Morris Minor price. However, that saga has now ended.

The tragedy of shipbuilding is that when a ship is delivered, work ends. Men become unemployed. When the Ark Royal sailed down the River Tyne on completion, more than 50 per cent. of the personnel were put on the unemployment list when they were flown off the ship. That is a fact of life in shipbuilding and ship repair.

The work force is now down to 4,490—a reduction of 30 per cent. since 1984. There is a grim, but not completely pessimistic, outlook for the future in the area. The region has a long tradition of shipbuilding and ship repair. There is immense loyalty to the Royal Navy there —those who were on the ships and those who serve on them. That loyalty extends to the Merchant Navy. If hon. Members ever go to South Shields and see the war memorial for those who died in the 1914–18 and 1939–45 wars while serving in the Merchant Navy, they will get some idea of the scale of the sacrifice.

I am pleased that the Minister mentioned the size of the order book. We have three type 22 frigates under construction—HMS Sheffield, which is due for delivery in 1987, HMS Coventry, which is due for delivery in 1988, and HMS Chatham, which is due for delivery in 1989. All the pieces have been brought together with the help of new technology, and I am confident that they will all be delivered on time.

In addition, we have the replacement for the Sir Galahad, the original having been sunk in the Falklands. It is due for delivery in 1987. I am pleased that the Minister mentioned the Sir Tristram. I do not know whether he was on board when it was in the pool of London before being fully commissioned, but it is a tribute to the ingenuity of the designers and those who built it, as it is an exceedingly difficult ship to design and build. I hope that it will perform its role fully in the Royal Navy.

It is important to remember that work has to continue. It is important for the company to get off to a good start in the private sector. I beg the Minister urgently to consider the order for the auxiliary oil replenishment ship, for which I understand tenders have been placed. I do not want to appear to be too greedy, but I like to think that a second one might be ordered in the near future. On a more sour note, I know that Harland and Wolff has placed a tender for this ship.

The management of Swan Hunter are worried that the politics of Northern Ireland may come into the placing of the order. The Government are committed to free competition in defence contracts, so I hope that they will not be gulled into accepting a lower tender, which has probably been bolstered by the many forms of aid available to Northern Ireland. I should like a frank, open, fair and competitive tender. I hope that the influence of the Northern Ireland Ministers will not be brought to bear.

The Minister mentioned that he is honouring the commitment made last January to the ordering of a type 23. That was promised to Swan Hunter, but again, for political reasons, it has been given to Cammell Laird at a cost in excess of £7 million more than it would have cost if it had been built at the Swan Hunter yard.

The Swan Hunter management has built up an efficient team with technical expertise and qualifications. Massive amounts of money have been spent to bring new technology into the yard. It would be remiss of the Government not to consider giving the yard all the T23s that are supposed to be coming up for tender. I should like contracts for T23 Nos. 2, 3 and 4 to be placed at that establishment.

In the long run, the placing of that contract would be to the benefit of Swan Hunter and to the benefit of the Ministry of Defence, because the ships would be designed to the required qualifications much more cheaply than if they were spaced around the country in other shipyards.

In my judgment, the men who serve the ships are doing a good job. I am a little concerned about the wastage and the loss that was noted in a Daily Telegraph article recently. I understand why the Royal Navy's personnel lack the commitment to sail in peacetime for long periods.. They probably do not feel the same urgency. They are sometimes bored with the routine, but they are still men and women of a high calibre.

I recommend increasing the personnel of the Royal Navy. Those who serve in the Royal Navy develop special characteristics. When they return to civvy life, they perform a useful role in society. They are committed, dedicated and reliable and when they return, they are an asset to any prospective employer. The present need is to increase recruitment. At a time of 3.25 million unemployed, the calibre of the people that could be recruited would be of the highest.

7.24 pm
Mr. Peter Viggers (Gosport)

The House always listens with great interest to the hon. Member for Wallsend (Mr. Garrett) and I have listened to his remarks this evening with much interest. I shall not follow them except to say that I hope that Ministers will pay regard to the capacity of yards when placing shipbuilding orders and that they will not overlook Vosper Thornycroft on the south coast.

I wish to discuss the match between demands on royal naval and defence budgets and the cash available to meet those demands. First, I wish to raise a constituency matter of great importance that I shall seek also to raise in another debate. My remarks relate to the search-and-rescue helicopter based at HMS Daedalus at Lee-on-the-Solent. I understand that the Ministry of Defence is reviewing helicopter search and rescue availability on the south coast. The search and rescue helicopter based at HMS Daedalus comes within that review. The Spithead, Solent, Portsmouth harbour and Chichester harbour area is one of the busiest waterways in the world, with thousands of tankers, liners, yachts, ferries, surfboards, swimmers and fishermen. It is not surprising that the search and rescue helicopter at HMS Daedalus is the busiest of the search and rescue helicopter services operated by the Royal Navy.

If that helicopter should be withdrawn, the nearest helicopters would be at Portland and at Royal Air Force Manston in Kent, each of which would require about 20 minutes' extra flying time. When it is remembered that the Daedalus helicopter in the past 14 years has carried out 2,000 sorties and has rescued 850 people, the House will recognise that it would be unacceptable to the people of that area if that helicopter were withdrawn. It is a matter of great local concern.

My hon. Friend the Minister will be thrilled to discover that the local newspaper is proposing to run a campaign entitled "Save Our Helicopter". I am sure that he will hear much more about this matter and I hope that he will give an assurance soon that that helicopter will not be withdrawn.

My main point relates to defence commitments and matching them with resources. There is growing concern about their increasing imbalance. We have four main defence commitments. The first is the nuclear deterrent —Polaris, which is to be replaced by Trident. That is our most important defence commitment. The second is our commitment to the defence of the United Kingdom homeland. Our third commitment is to the European mainland, involving 55,000 troops in BAOR and a tactical air force in Germany. Our fourth commitment is in the eastern Atlantic and in the Channel.

To meet those commitments, we currently have resources at the level of £18,060 million in 1985. For the seventh year, the Government have honoured their commitment to NATO to increase defence spending by 3 per cent. a year. We spend about 20 per cent. more in real terms than when we inherited the Government in 1979, excluding Falklands expenditure.

I perceive symptoms of strain in the defence budget. There is a delay in procurement of ships. We are committed to about 50 frigates and destroyers, which relates to an ordering programme of three frigates or destroyers a year, but none has been ordered this financial year. There has been a delay in the replacement of the assault ships Fearless and Intrepid. There has been an increasing use of existing ships, and ships are now spending 50 per cent. of their time at sea, which is 10 per cent. more than they spent in wartime. A heavy burden is placed by the five-month rotation of ships that are serving in the Falklands.

It is clear that the Royal Navy needs more men. The 1981 Defence Review proposed that the Navy's strength should be reduced to 62,800 in 1985 and would be 60,400 in 1986. According to a press report dated 1 February 1986, Captain Michael Gretton, director of naval officer recruiting, said that instead of running down the naval strength to 56,000 by the early 1990s, the Government now propose that the number of men in the Royal Navy in 1993 will be about 63,000. I would be grateful if the Minister could confirm the truth of those figures.

There is an urgent need for the replacement of the Shackleton aircraft and for an adequate early warning system. This point is outside the immediate area of the Royal Navy, but it is relevant. We shall soon be faced with the massive cost of the fly-by-wire, inherently unstable, air superiority European fighter aircraft. We must also take into account the fact that our commitment to increase defence expenditure by 3 per cent. a year has ended. Therefore, it is increasingly urgent that we should match our commitments with our resources. I fear that my right hon. Friend the Secretary of State, who I welcome to his present post, may be unwittingly cast as John Nott mark 2.

How do we resolve this conundrum? Dedicated though I am to defence and to the armed forces, I do not believe that a further increase in the defence budget is realistic. We have increased our budget by 3 per cent. for seven years, and we are now spending 20 per cent. more than we did in 1979. We spend more per head on defence than any of our NATO allies except the United States.

The Government sought to reassure us in the defence White Paper by showing how we shall meet our commitments and match them with our resources. Paragraph 503 of volume 1 of the 1985 White Paper states: The forward programme should not be seen as a rigid plan stretching ten years ahead, establishing commitments in detail to exact equipment numbers with specified in-service dates. It is in practice continually being adjusted for a range of reasons, including technological and industrial constraints and opportunities, as well as budgetary limitations. It goes on to describe this policy as "programme adjustment".

Apart from programme adjustment—whether it be a change of mind, delay or uncertainty—becoming almost an art form, I must tell my hon. Friends that programme adjustment has built into it two inexorable rules. The first is that costs increase and do not decrease; the second is that programmes move to the right, not to the left. In other words, programmes are delayed, not brought forward.

We could do two things to contain the growing demand within a static budget, and the first relates to procurement. We pay little more than lip service to co-operation. Only 15 per cent. of our defence ventures are collaborative. It is extremely important that we have more collaborative projects so that we can pool our productive skills with those of other nations, but, perhaps more importantly, so that we can pool our market demands. In civil aircraft manufacturing, a run of 500 of one model is regarded as the break-even point, yet that rule is consistently broken in defence procurement.

Our national pride and the need to create jobs make us insist on our own ships, early warning radar, tanks and submarines, but the additional cost is enormous. For example, the British Army has the Ptarmigan battlefield communications system, which Plessey failed to sell to the United States. It became apparent then that Ptarmigan cost 60 per cent. more than the French alternative, yet the British Army bought it. We need much more co-operation and interoperability. Our pride and our nationalism often stop us operating with common sense in this area.

There is a common torpedo size among NATO allies, but there is no common fire control system. Therefore, if British submarines have no more torpedos, they cannot use torpedos produced by our NATO allies because the fire control system is different. We are incurring great costs in all those areas. NATO spends more on defence than the Warsaw pact countries, yet we are outnumbered by two or three to one in some aircraft, guns and tanks in Europe. But that is a result of the ruthless specialisation and mass production of the Warsaw pact countries and NATO's failure to do the same.

The United Kingdom spends half of its Government-funded research and development resources on defence, but it is still not nearly enough for us to keep up in the major league. Therefore, we need much more co-operation in ventures and the pooling of production runs is essential.

My second proposal is that we should also save money on the British Army of the Rhine. Although this debate is about the Royal Navy, I should point out that Britain spends 60 per cent. more on defence than Germany, yet we maintain in Germany an Army of 55,000 people and a tactical Air Force at a cost in 1985 of £1,899 million. Of that, local defence expenditure, representing drawings of foreign exchange necessary to support our forces overseas, amounted to £920 million. How can we justify that expenditure when we already spend so much more than the Germans? I recognise the crucial role of the United Kingdom as the linchpin of NATO, but we must try to make economies in that area.

Many defence Ministers stand at the Dispatch Box and promise us cuts in the tail, not in the teeth, of expenditure. My constituents hear those claims with scepticism because they know that the rhetoric is better than the reality. I know from my visits and other contacts over many years that the naval yards and depots play a vital role in the maintenance of the fleet, and it is time that their dedicated service was recognised. Recently, many of the local civilian functions have been under review, which causes great uncertainty and worry. If the workers were not so dedicated and loyal, I am sure that there would have been industrial action before now. But they are loyal and dedicated, and I ask my right hon. Friend the Minister to join in paying tribute to the workers at royal naval aircraft yard Fleetlands and other establishments.

For those hon. Members who may not realise the extent to which my constituency is bound up with the Royal Navy, may I mention the names of other establishments in my constituency, every one of which employs more than 1,000 people and some of which employ several thousand people. They include the royal naval armaments depot at Gosport, the Royal Clarence victualling yard, HMS Centurion, HMS Sultan, HMS Dolphin, HMS Daedalus, HMS Collingwood and the royal naval hospital Haslar. It is time that the back-up boys and girls had a word of recognition and I ask the Minister to accept that any savings in that area are likely to be modest and could even be counter-productive.

7.36 pm
Mr. Donald Stewart (Western Isles)

I was pleased to hear the Minister pay tribute to the present-day personnel of the Royal Navy. As someone who, like the right hon. Member for Taunton (Sir E. du Cann), spent his wartime service in the Navy, I am glad to hear that the high standards of the service with which we were connected have not slipped in any way. The Minister mentioned the Navy in the Falklands when he listed our present commitments. It occurred to me that if the Government had not stupidly withdrawn HMS Endurance from the south Atlantic, there might have been no need for the Navy to be in the Falklands now.

I welcome the Minister's assurance of the continuation of the Navy's role in fishery protection. That is more essential than ever with the accession of Spain and Portugal to the Common Market. Those of my age group will recall the vital service performed by the Navy in the early part of the second world war before the other services made their contributions. The patrol service was manned by fishermen and merchant seamen. Of course, others served, but initially the trained seamen came from the fishing and merchant fleets. Now the deep sea trawling fleets have gone altogether. Liners from the merchant service were requisitioned as armed merchant cruisers for the protection of convoys.

I refer briefly to the need for a helicopter on the west coast of Scotland. Recently, there was a tragic accident when the crew of a fishing boat was lost because of the delay in getting a helicopter to the scene. I do not criticise the helicopter crew or the service, but it had to come from the other side of Scotland and valuable time was lost. I hope that the Secretary of State will listen sympathetically to the recent campaign for a helicopter base on the west coast.

I confess that I know little of today's Royal Navy, other than the information available in the press. Therefore, I shall not waste time commenting on the current naval establishment or its building programme. However—the Falklands conflict confirmed this, and it underlines the point made so cogently by the right hon. Member for Taunton—the Navy cannot function without auxiliaries from the Merchant Navy. Without the pool of trained seamen from the merchant and fishing fleets during wartime, the Navy would be in dire trouble.

The Minister referred to the number of ships—but the issue is manning those ships with trained people when the time comes. The protection of our maritime nation cannot be guaranteed by vessels flying the white ensign. The Government have allowed the Merchant Navy to disappear to an extent that is dangerous to defence. In past speeches I have referred to the effect of that shrinkage on trade and employment. This Government, so dedicated to defence and apparently putting no limit on the money that they are prepared to spend on it, show an indifference to the disappearance of the merchant fleet that is hardly credible. The proposed Channel tunnel will add to the loss of jobs for seamen. There is also the decision of BP Shipping to sack 1,700 United Kingdom seafarers and to transfer 30 of its ships. Two BP-owned tankers, flagged out of the Bahamas in 1985, are manned with an all-Filipino crew, with the exception of a British master and engineer. No doubt, in time, those two posts will also go. The Government must intervene to safeguard the loss of those 1,700 jobs.

If the Soviet fleet is of the scale suggested by the Minister—and I have no reason to doubt his figures—and if the Soviet Union is the potential enemy, we shall start with grave disadvantages should there be an outbreak of war. It is vital to reverse the trend of allowing the Merchant Navy to bleed to death. The operational requirements of the Royal Navy and its strategic role are impossible without its link with the Merchant Navy.

I hope that that message, at least, will be taken on board by the Minister.

7.42 pm
Mr. Keith Best (Ynys Môn)

The House listened to the right hon. Member for Western Isles (Mr. Stewart) with great care. I share much of his sentiment about the Merchant Navy. I listened with interest to what he said about Scotland because, as a naval gunfire officer, I frequently fire NATO ships' guns on to Cape Wrath—not in the right hon. Gentleman's constituency, as he will be relieved to hear.

If anyone thought that there was a vestige of credibility remaining in the Labour party, that myth was dispelled tonight by the extraordinary statement of the hon. Member for Clackmannan (Mr. O'Neill), who tried to persuade my hon. Friend the Member for Barrow and Furness (Mr. Franks) — who made an effective speech — that the shipyard workers at Barrow were content with the prospect of the cancellation of the Trident programme. That was an extraordinary statement, and I do not think that anyone in the House believed it. The shipyard workers in Barrow will take careful note of what the hon. Gentleman said, especially as he provided no specific alternative for work for those who so desperately need it.

The Labour party is clearly intent not only on not spending more on defence, but on cutting defence expenditure dramatically.

Mr. Denzil Davies (Llanelli)

We shall spend more.

Mr. Best

I shall listen with interest to what the right hon. Gentleman says when he replies to the debate. I shall put my specific allegation to him, and he can deal with it later.

The Labour party will cancel Trident, but it will not spend the money that is saved on defence. If the right hon. Gentleman wishes to gainsay that, I shall certainly give him the opportunity.

Mr. Denzil Davies

I have merely said that, without Trident, we can meet all the present conventional commitments. With Trident, this Government cannot meet all their conventional commitments — such as a 50-warship Navy, Nimrod, amphibious vessels, the Europoean fighter aircraft and the maintainance of the British Army of the Rhine. With Trident that cannot be done. Without it those commitments can and will be met.

Mr. Best

I am grateful to the right hon. Gentleman, who has now clarified the matter. The Labour party is saying that it would spend the money that it saved on Trident on conventional forces. That is a welcome admission, if that is what the right hon. Gentleman really means. He will have another opportunity to clarify that later.

As my hon. Friend the Member for Gosport (Mr. Viggers) said in a most effective speech, ships currently spend 50 per cent. of their time at sea—10 per cent. more than during the war years and three times more than the level of the 1930s. That is a tremendous strain on those serving in the Royal Navy—as I realised when I have had the privilege of serving with them. That leads me to the conclusion that we are in grave danger of having far too few ships.

When my right hon. Friend the Minister said that Hermes is now on the disposal list, I wondered whether he had thought seriously about the American way of dealing with these matters. That is to update the technology, but keep the hulls. Carriers such as the Coral Sea and the Midway had their hulls laid down more than 40 years ago, but are destined to serve well into the next century. Modern technology has uprated those ships. The Americans do not have our attitude, which is to scrap our so-called redundant ships. Will my right hon. Friend seriously consider the American option, especially for Hermes, which is a very fine ship?

Self-corroboration is the lowest form of parliamentary debate. However, I hope that the House will forgive me if I refer to the fact that on 28 November 1983, in a debate on the Royal Navy, I drew the Government's attention to the great benefits of the S90 over the type 23. I mentioned that tests on models doing a comparison between the type 23 and the S90 showed that in calm waters the S90 was one knot slower than the type 23, that it matched it in rough weather, but in high seas, with waves of up to 50 ft in height, maintained a steady 25 knots, whereas the type 23 pitched and rolled so violently that it had to be restricted to 15 knots for its own safety.

The question of cost is especially relevant. In figures of that time, the type 23 was likely to cost £100 million or more, and perhaps £200 million by the completion of the final ship at the end of the rolling programme. The costs appeared to be increasing by about 10 per cent. in real terms over the rate of inflation. Therefore, by the end of the century the Royal Navy could afford to buy only one ship a year, leaving only 30 frigates by the year 2000. I believe that it is generally accepted that there should be a minimum of 50

The S90 can be produced for £60 million to £70 million. To take the hull away from the combat suite—the hull itself is £33 million — is far cheaper than the Government's decision to buy the replacement frigates.

I shall not fight old battles. However, only recently the press reported that a secret report, which will be presented to my right hon. Friend the Prime Minister, demands a judicial inquiry into the choice of recent warship designs, claiming that the Royal Navy has been buying expensive frigates when a cheaper and more powerful alternative has been available. That report follows an investigation by Lord Hill-Norton and an official committee of experts, set up with the knowledge of Downing street. It suggests that the Royal Navy and the Government were misled by their advisers and may have been buying expensive frigates and destroyers when a cheaper and more powerful alternative was available.

The investigating team was unable to discover how that advice came to be given, and was so concerned by its findings that it recommended that a judge should head a further inquiry by experts outside the Government. It wants the merits of long, thin traditional design and the radical short fat alternative re-examined. We know that that report exists, because I put down a question to my hon. Friend the Minister and he replied most helpfully: I cannot comment on Lord Hill-Norton's report until it is received and I have had the opportunity to study it. Publication will, of course, be a matter for the author."—[Official Report, 31 January 1986; Vol 90, c. 640.] That question was answered to my satisfaction because my hon. Friend acknowledged the existence of the report. I hope that the House will be informed as to what the report says, and whether there is to be a judicial inquiry into whether we are buying one warship when we could be affording three for the same cost and overcoming the problem to which I have referred.

I move on now to our amphibious forces. Lieutenant General Steuart Pringle, the Commandant General of the Royal Marines, in a lecture to the Royal United Services Institute on 5 June 1984, said: A nation which lives on an island cannot turn its back on the sea … It follows that if that nation sees the possibility of a need to influence events by use of military power, it needs either an amphibious force or an airborne force, or, preferably, both. I think that none would dissent from that view. It is obvious in this debate that we should concentrate on the amphibious forces and that they should be credible.

Mr. Garrett

I agree with what the hon. Gentleman is saying, but I feel that he should go a little further and attack the present level of amphibious forces. If we are to mount campaigns and exercises in Norway, we must again draw upon the Merchant Navy for our vehicles.

Mr. Best

I am grateful to the hon. Gentleman. I listened to him with care. He always speaks with great authority, as the House has come to expect. I agree with much of what he had to say about the Merchant Navy. I shall develop the theme of our amphibious forces.

I had the privilege to serve on HMS Intrepid in September last year on exercise Rolling Deep in my military capacity. That was a well planned and successfully executed exercise. However, I was able to see the strains placed on our amphibious forces by the nature of the shipping. Fearless and Intrepid are in need of replacement. When I served on Intrepid we had a brigade staff, and the ship was full to bursting, with no extra space. Without going into further details, which might be of an tendentious nature and which I might not be allowed to mention in any event, that demonstrates the fact that we need to concentrate far more on the replacement and renovation of our existing amphibious capability.

We are no longer a great military power, and we cannot pretend otherwise. That point was made by the hon. Member for Clackmannan. We are no longer a prime military power in the world, but recent history has demonstrated fully that we must be prepared to undertake operations outside the NATO area. Indeed, all active operations in recent memory have been conducted outside that area. Our amphibious forces are the one aspect of our defence that gives us full flexibility in time of national and NATO need.

Within the NATO context, amphibious warfare is the only scope that we have for offensive diversion. That was recognised in an essay on amphibious warfare written by Sir Basil Liddell Hart in 1960, in which he examined the way in which large German forces during the last war had been diverted disproportionately to the threat of amphibious operations posed by the allies.

One of the most important aspects of deterrence is the uncertainty of intention, and that can be achieved more effectively by amphibious operations than in any other way. He wrote: the basic lesson is that offensive distraction is most effective when it carries a wide strategic threat, and where there is ample room for its development by attack to be expanded easily and quickly into a widening practical threat. That is a sentence with which I wholeheartedly concur, as I do with his opinion that amphibious forces have become more necessary as a deterrent and as a counter to local limited aggression—a counter that can be used without being suicidal and a deterrent that is therefore credible. Had the capability of our amphibious forces been appreciated, I very much doubt that Argentina would have invaded the Falkland Islands.

This theme is developed in an article in the August 1985 edition of the RUSI journal by Captain H. A. Corbett. He used an example from a planning process in the 1950s that could be used to set the scene. To obtain planning agreement for eventual construction of the Fearless class of assault ship, provision was required for an armoured squadron with its specific establishment of tanks and vehicles to be embarked. The outcome was that initially the size of the flat upper deck space required was elevated to the number of three-ton lorry equivalents that could be stowed between decks with tanks embarked.

By the time that HMS Fearless, the first of class, came to be built, arrangements were already being improvised to make alternative use of this deck to operate helicopters and, happily, it was both large and strong enough. In reality we now have triphibious operations rather than just amphibious operations.

It is imperative that we leave the rest of the world, particularly Argentina, in no doubt that our amphibious capability will not only continue but will be enhanced in the future, so that there can be no speculation as to whether the Falklands conflict would have ended differently if the Argentine fleet had come out of port. The idea of amphibious operations being used as an offensive diversion—in effect, the only one that we have—falls into line with the United States concept of operations.

There are two reasons for the relevance of this to Britain. The first is the significance of the northern flank, especially Norway, which was understood by Hitler only too well, and has not been lost on the Soviets with their large marine infantry group based in Murmansk and the Kola inlet which is home for their northern fleet and its 190 submarines. If an advance were made to Tromso, that would bring Soviet aircraft 500 miles closer to the United Kingdom, and if their advance were to move further to Bergen, the result is obviously a great threat to our nation.

In the event of aggression, it is essential that we protect the northern flank, and with the coastline and limited communications possible in Norway this can be done only by amphibious forces. In the event of aggression, to lose Norway would seriously imperil the United Kingdom by bringing Soviet forces within closer range of our home base.

Secondly, denying the northern flank to any Soviet aggression reduces the capacity of Soviet forces to endanger the vital supply line across the Atlantic. In addition, offensive operations on the northern flank could strike close to the heartland of the Soviet Union—the only point at which this can be done with any feasibility—and thus check any aggression within central Europe, where NATO would be forced to fight a defensive battle in any event. It would also have the effect of bottling up the powerful northern Soviet fleet.

Therefore, it was with great concern that I read in the newspaper that consideration is being given not to the replacement of Fearless and Intrepid or their upgrading, with a great deal of new technology, but to extending their life into the next century, and using merchant ships to give us some sort of second-class amphibious role. That would be unacceptable to the House. Our amphibious forces are the finest in the world, and we owe a duty to them. More importantly, we owe a duty to our nation to preserve and enhance the credibility of the only offensive forces that we still have — forces that have served the nation well throughout their history and will, I believe, do so in the future.

8 pm

Mr. Nicholas Brown (Newcastle upon Tyne, East)

Thank you, Mr. Deputy Speaker, for calling me to make a brief contribution to this debate. I shall confine my remarks to three broad headings: the strategic implications of the subject of this debate, the merchant marine and the important constituency interests which, representing a shipbuilding community, it is my duty to place on record.

The Minister of State for the Armed Forces referred, rightly, to the growth in the Soviet Union's conventional naval capacity. He was also right to refer to the fact that it poses a challenge not just to the United Kingdom but to NATO. I see no immediate prospect of the United Kingdom having a defensive strategy outside NATO. The logical consequence is that there are two key strategic issues for this country: first, the cost of Trident and the effect of that cost on the defence budget, and, secondly, the rationale for an independent United Kingdom nuclear deterrent.

Important decisions have to be taken. The decisions that are taken in the next two years will set the course of British defence policy until the turn of the century. My view is that this country's defence interests will be better served by supplementing NATO's conventional forces with our 50 fleet Navy rather than by duplicating the massive nuclear arsenal of the United States with a smaller nuclear arsenal of our own. I cannot conceive of circumstances in which this country would independently use its nuclear deterrent against the Soviet Union without the involvement of the United States and, having done so, survive. Other nation states with economies the size of our own, or indeed larger, do not think that it is necessary for their defence to have an enhanced nuclear capacity. That is a strategic argument. The logical consequence is that our contribution to NATO should be expressed in conventional terms. Part of that conventional contribution should be made through the Royal Navy.

The right hon. Member for Taunton (Sir E. du Cann) made some important points about the merchant fleet. He said that it was an integral part of our ability to defend ourselves at sea, and he set out effectively the frightening situation that faces the British merchant fleet. By endorsing his remarks, I hope that I do not do him too much harm among his hon. Friends.

A report of the Select Committee on Defence, headed "The Use of Merchant Shipping for Defence Purposes", summed up the position in 1984–85. That was a year ago. It said: Although the consequences of the present decline in British maritime resources may appear to be largely economic, we believe the Government should show greater awareness of the risk to national security inherent in loss of independence in the carriage of seaborne commerce. Effective deterrence requires that no would-be aggressor is tempted by vulnerability. Present trends seem to be setting in this dangerous direction. The striking contrast between British, and indeed Allied, maritime resources and those of the Warsaw Pact countries, in inverse proportion to the relative dependence of each alliance on sea communication, is extremely disturbing. We have received a reassurance from the Minister, but for how much longer will Ministers be able to come to the Dispatch Box and give such reassurances? The right hon. Member for Taunton pointed out that the trend of events is going in one direction, that it will not plateau out and that it will not turn around unless the state intervenes. It is not just a question of ships; it is also a question of people.

I, like many other right hon. and hon. Members, have received a letter from John Newman, the deputy general secretary of NUMAST. This is a consortium of groups that incorporates the Merchant Navy and Airline Officers Association, the Mercantile Marine Service Association and the Radio and Electronic Officers Union. In his letter Mr. Newman refers, as did the right hon. Member for Taunton, to British Petroleum. He says: We do not believe that BP has any intention of ensuring continued British manning on its ships. If its flag-out moves are allowed to follow the pattern of others in recent years we can confidently predict that within the very near future, firstly, the UK ratings will be replaced; then the junior officers' jobs will be handed to Filipinos or others; very shortly thereafter most of the UK senior officers will go; after a further period the UK Master and Chief Engineer will be replaced, and the ships will then be totally manned with foreign crews and 1,700 jobs for British seafarers will be lost for ever together with the professional maritime expertise we need in both peace and war. That is our hard experience of other flagged-out tonnage in recent years, and our predictions for the future in BP are further reinforced by the fact that two BP owned tankers flagged out to the Bahamas during 1985 are currently manned throughout with an all Filipino crew plus a British Master and Chief Engineer. The Government have a duty to do something about that now. It cannot be allowed to continue; otherwise there will be nothing left about which to intervene. We cannot afford to lose either the ships or the ownership and, most crucial of all, we cannot afford to lose skilled people.

A few of my hon. Friends and I had the privilege recently to meet representatives of the General Council of British Shipping to discuss these problems. We were told that the corporate future for a substantial part of its operations lies outside shipping and that it certainly lies outside shipowning. It was pointed out that it is still possible to make a profit from managing ships, if there is corporate expertise, but that it is not possible to make a profit from owning ships. The significance of that for our defence interests should be obvious to every hon. Member. The right hon. Member for Taunton rightly said that we are not discussing just the trends in the industry. We are discussing economic warfare. The possession of a merchant fleet and of heavy industry is evidence of economic strength. They make a nation powerful. We are under attack from two sources: first from the Eastern bloc, not just for economic reasons but for strategic and military reasons, and, secondly, from the trading communities in the far east. If we allow our merchant marine to decline and disappear, the trading organisations of the far east will then show us the true price of shipping and shipbuilding and of possessing a merchant fleet. Our nation will be unable to do anything about it. The right hon. Member for Taunton also called for the creation of a Minister for the marine fleet. A Minister of Cabinet status is needed to take an overall view of this deplorable situation.

I come now to the points that I wish to make on behalf of my constituents. I welcome the new Secretary of State for Defence to his appointment. For the people of Tyneside anybody is better than the last Secretary of State for Defence. We feel that he had an affection for other parts of the country—not an affection for the north-east of England. I do not intend to repeat the points made by my hon. Friend the Member for Wallsend (Mr. Garrett). We share a shipyard. The Neptune yard and the old Walker naval yard are in my constituency and the Wallsend yard is in my hon. Friend's constituency.

Until recently Swan Hunter was not solely a warship yard. It has been forced by the Government to become a warship yard. Until recently it had a proud tradition of building fine merchant and specialist vessels as well as general vessels. It is not by choice that it is now confined solely to building warships. It is not by choice, either, that well over half the work force have lost their jobs during the last 10 years. The hon. Member for Barrow and Furness (Mr. Franks) rightly stood up for the 12,000 jobs at the shipyard in Barrow-in-Furness. Union leaders tell me that they can remember the time when thousands of men employed by Swan Hunter could march up the bank and when there would be mass meetings of 20,000 men. Swan Hunter now employs 3,100 manual workers. The effect upon the riverside community that is represented by my hon. Friend the Member for Wallsend and me has been traumatic.

We realise that, since Swan Hunter has been forced to become a warship yard, it has but one customer, the Ministry of Defence. All that our community asks of the Ministry of Defence is that it should be treated fairly. That has not happened in the past. The Secretary of State and other Ministers have always hesitated to state clearly whether orders were to be placed solely on the basis of competitive tendering or whether the Secretary of State was running some social policy of his own, independent of the rest of the Government and certainly independent of the structural needs of the shipbuilding industry.

We feel that we were badly treated when the type 22 order, which could have come to Swan Hunter, was placed with Cammell Laird instead. My hon. Friend the Member for Wallsend quoted the on-cost of splitting that order as being about £7 million. An article in today's Daily Telegraph suggests that the on-cost to the Ministry of Defence under the social policy of the previous Secretary of State for Defence was £9 million. Although I am happy to see employment continue at Cammell Laird, I have to say that, in compensation for that, it was made clear that Swan Hunter would receive the No. 2 type 23 warship in good time subject to price. That promise has not been kept. We are still waiting for the type 23 to be committed. We have had an assurance tonight that it will be committed and I am grateful for that. I do not want to be churlish but we have not had an assurance as to whether the type 23 will be committed on its own or alongside the No. 3 and No. 4 type 23.

These vessels are equally crucial to the short-to-medium-term existence of Swan Hunter. Through no choice of the Tyneside community, Swan Hunter has now been forced into a restrictive order programme. We either get the type 23 and two auxiliary vessels or there will be major redundancies in a community which cannot tolerate any more major redundancy rounds. The last redundancy round at Swan Hunter saw 2,200 jobs disappear in one swoop. That is a hell of a job loss for a community like ours to sustain.

The other aspect which affects my constituents is the matter of the two auxiliary vessels for which Swan Hunter is in competition with Harland and Wolff. I understand the difficulties in Northern Ireland and I make no criticism of the Government for trying to preserve employment there. I have to say that the unemployment levels in the communities around Harland and Wolff are lower than those around Swan Hunter. That is a horrific fact and one that is overlooked by Parliament and the Government.

The careers centre in Newcastle upon Tyne, to which all school leavers are encouraged to go to seek what employment is available in the city, has a whole range of leaflets. The leaflets offer information about careers for plumbers, electricians and all the things that young people would like to do if the jobs were available. On the desk at the front of the centre where the senior careers officer sits is a tiny card index. That index contains the jobs available. Last week there were only 40 jobs available for school leavers and they consisted mainly of filling up shelves in supermarkets and working in the retail industry. That is a horrendous prospect for the young people of our community. If the Government stretch defence orders because of the difficulties they face in financing the defence programme—involving either the type 23 or the two auxiliary vessels — they will cause substantial damage to the communities which I and my hon. Friend the Member for Wallsend represent.

There would be no need to stretch that programme if the Government had not invested and committed an enormous sum of money to the Trident programme. We are asking for a fair hearing for our communities, for both the type 23 and the fleet auxiliaries which go alongside the type 23s and without which the type 23 programme does not make much sense.

All that I have said is a call for help from a community that used to be legendary in its association with the shipbuilding industry. We realise that the industry has been substantially run down not least by the policy that the Government are taking towards the Royal Navy. My fear is that when these difficult decisions are approved by the Secretary of State, he will find it easier to elongate the Government's commitments to a 50 fleet Navy than to make any of the other difficult decisions that face him. I would urge him very strongly not to do that. The Royal Navy has been treated for far too long as the easiest cut for the Secretary of State to make. That must stop—not just for the sake of the community that I represent but for the sake of the defence interests of the country.

8.16 pm
Mr. Peter Griffiths (Portsmouth, North)

I listened to what my right hon. Friend the Minister said earlier this afternoon about the programme for ordering new frigates. I find it difficult to reconcile the firm commitment that he appeared to be giving with the assurance, which we have accepted to be absolute, that we will maintain a surface fleet of 50 major vessels.

The number of vessels which were firmly promised today would not guarantee that position. My arithmetic may be wrong, but I would ask my hon. Friend the Under-Secretary of State to give a resounding and clear commitment to a 50 ship Navy for the foreseeable future. That would have a great influence on improving morale not only in the Navy but in all the cities and towns which support the Navy and which are so closely associated with it.

The Minister also referred to the torpedo programme. In considering the ordering of frigates and the consideration given to the torpedo programme, one of the ways in which the rapidly escalating costs of naval defence can be positively influenced is by ensuring that the maximum possible overseas sales are obtained for the type of equipment which is selected for use by the Royal Navy. It is many years since this country sold a new frigate overseas. We have not been successful in doing that, and I wonder whether the suggestion which was floated earlier this afternoon—that we look for closer links with our NATO allies—might not perhaps be a misleading way of approaching this task.

The specific duties of our European NATO allies are not the same as the duties we place on the Royal Navy both through our membership of NATO and through other roles. While we have heard from hon. Members from the north-east, the north-west and from Scotland about the need for placing orders for new vessels with yards in those areas which have unemployment problems, I suggest that there is also a need to ensure that we reinforce success where that is possible.

Vosper Thornycroft, in Southampton, both in its earlier private form and in it nationalised form, has consistently been able to maintain an export market. That company needs to have the opportunity of a major warship order to ensure that it keeps its workforce together. That workforce has proved itself in the past to be capable of building warships for export. At present that yard is exporting warships to the Middle East.

I realise that there is a limit to the number of type 23 frigates which can be allocated. No one will receive all that they would like, but I would suggest that the Minister ought to be discussing with the successful exporting ship building yards such as Vospers the prospects of building ships for the Royal Navy which could also be sold overseas.

I am not thinking necessarily of vessels such as the type 23, which began as relatively simple platforms and gradually developed to become ships as complex as any that the Royal Navy has ever had. I have in mind the type of rugged vessel that might be needed in a situation that precedes war, or which might prevent the outbreak of hostilities. I can well remember the disproportionate damage which was inflicted on some of our sophisticated vessels by the relatively simple Icelandic gunboats during the cod wars not so many years ago. There is a need for the Royal Navy to have rugged vessels that are capable of operating within a limited distance of our shores. Such vessels would have a prospect of sales overseas, which is something that the Ministry of Defence and the successful exporters should be exploring at all times.

When we have a winner that can be a world beater, the message should go out loud and clear from Her Majesty's Government. They should make it known that we are proud of what we have and that we have absolute faith in it. Our torpedo programme had a chequered history before it was placed in the hands of the Marconi company. The lightweight Sting Ray programme is well within cost and time in production terms. In Sting Ray we have a weapon which is proven to be capable of meeting the Navy's requirements. Such a weapon is a prime instrument for exporting. Exports will reduce unit costs and the result will be a saving for the Navy in future.

The Public Accounts Committee reviewed the history of the torpedo programme, and it was unfortunate that it failed to recognise the remarkable changes that have taken place over the past few years. I hope that my hon. Friend the Under-Secretary of State for Defence Procurement will forgive me if I appear to be preparing his reply for him, but I ask him to sound a clarion call that we in Britain have a world beater in the Sting Ray. The Navy is satisfied with it; it believes that it is the sort of weapon that is necessary for anti-submarine work in future. All the signs are that the heavyweight torpedo, which is known as Spearfish, will in its turn be as successful as Sting Ray. If we are to sell overseas, it is important that the MOD bangs the drum for products that come within sectors in which we are already successful.

We have fewer ships and fewer men in the Royal Navy than in the past and there has been a disproportionate running down of the naval presence in the great and premier naval port of Portsmouth. Against that background, it is vital that the Navy should be seen, and one way in which that is possible is through its military bands. I shall not attempt to raise the issue of whether we should have separate bands for individual services or a defence school of music. However, having had the chance to read the PAC's report on the proposed defence school of music, which was published today, there is no doubt in my mind that the arguments which were advanced by my late colleague, Mr. Ralph Bonner Pink, and which I have continued to advance since 1979 on behalf of the Eastney option for the Royal Marines school of music, have been proved to be correct.

Whether we should have a defence school of music at Eastney is another matter, but there is a clear need for us to retain the Royal Marines school of music at the Eastney barracks. The school is combined with and is supplementary to the magnificent Royal Marines museum. It would be unthinkable for that building to be left like a sore thumb, as it were, among a housing estate, for example. The museum and the school are complementary.

My hon. Friend the Minister will know that I wrote to him only a short while ago about the need to maintain the Royal Marines voluntary cadet corps, which is an extremely important recruiting service for the Royal Navy. It has a membership of 200 boys, who meet regularly in the Eastney barracks. Portsmouth believes in the cadet corps fundamentally and it believes also that the museum-school-barracks complex should be maintained.

Mr. Garrett

I am 100 per cent. on the side of the hon. Gentleman. Those who have not read the PAC report will realise when they do so that meagre savings are involved when they are set against the pleasure that the 80 bands of Her Majesty's forces give to the public. They provide training in musicianship and the necessary complementary disciplines for the spending of a comparatively meagre sum. In an Adjournment debate, the hon. Member for Twickenham (Mr. Jessel) made an impassioned plea for Kneller hall. I recognise all the economies that are needed, but it would be an act of vandalism to abolish Kneller hall.

Mr. Griffiths

I thank the hon. Gentleman for making that intervention. I criticised the PAC a few minutes ago, but it must be recognised that we are all selective in our praise and criticism. In this instance, the PAC has done an invaluable job in setting out objectively cases which were difficult to judge for the Ministry of Defence when they were made by individual Members. I accept that that has been a difficult task, but it is clear now that the place for the Royal Marines school of music is at Eastney, and it is for that that we should be pressing.

I have asked my hon. Friend the Minister to sound two clarion calls and a roll on the drums. If he can give me the three assurances that I seek, I can assure him that he will receive a generous and warm welcome when he next visits Portsmouth.

Several Hon. Members


Mr. Deputy Speaker (Mr. Ernest Armstrong)

Order. I should like every hon. Member who has been present throughout the afternoon and evening and who wishes to participate in the debate to have the opportunity of doing so. If hon. Members who catch my eye confine themselves to 10 minutes, all those who wish to contribute to the debate will be able to do so.

8.28 pm
Mr. Tam Dalyell (Linlithgow)

I shall use my time to focus on one illuminating episode involving discredit on politicians and not on the Royal Navy. I shall focus on the loss, or alleged loss, of the control room logbook from HMS Conqueror.

Before I start to set out the story in narrative form, I wish to make it clear that I have no criticism whatever to make or imply about two police officers, Detective Chief Superintendent Ron Hardy and Detective Sergeant Mike Ashdown, to whom I must necessarily refer. To the best of my belief, they are competent and sensible police officers and a credit to the Scotland Yard serious crimes squad. I should say this as I am sending a copy of my speech to the Director of Public Prosecutions, Sir Thomas Hetherington.

Out of the blue, the BBC and Independent Radio morning news on 7 November 1984 told their listeners that it had been discovered that a logbook from the Conqueror, the submarine that sank the Belgrano, had gone missing. I was surprised for two separate reasons. First, how could the Navy, with its reputation for efficiency, have allowed apparently crucial documents and data simply to disappear, even in ordinary circumstances? To allow documents pertaining to the sinking of the Belgrano to disappear — the only time that a nuclear-powered submarine has ever been involved in actual military action —was doubly incredible.

My second cause for surprise was that the announcement was made on the very morning on which the right hon. Member for Henley (Mr. Heseltine), the then Secretary of State for Defence, was to appear before the Select Committee on Foreign Affairs. at a hearing which had aroused so much interest that it was to be broadcast live on Radio 4.

Was the loss of a logbook a political smokescreen to divert attention from other matters? The private notice question that was heard on 7 November 1985 on the missing logbook and the setting up of a board of inquiry did not answer that question.

For the sake of coherence, I had better say that I subsequently made discreet inquiries of the members of the crew of HMS Conqueror. They told me that there was no way in which, given their debriefing, any of them could have taken vital documents before the submarine went for her refit. To the idea espoused by some hon. Members that a member of the crew had suddenly taken the notion that the logbook would be a nice memento to have on a sideboard of his dining room in years to come, I was given the caustic answer, "Do you think that any of us would have risked a court martial for stealing such a document simply for a memento? Don 't be daft?" Submariners tell me that it simply beggars belief that any crew member would have taken a logbook and rendered himself subject to a court martial offence.

I ask the new Secretary of State, first, if he will find out from his Department and from the Navy whether any logbook ever did go missing. Secondly, if a logbook did go missing, is anyone in the Navy under suspicion for having taken it for his own reasons? Thirdly, I must ask the right hon. Gentleman, in the aftermath of Westland. if anyone in the Navy removed a logbook, did he do it under "ministerial instructions"? Could he put the answers to those questions in the "public domain"? If there were any "differences of understanding" about the logbook, can the House of Commons be told? If a logbook was lost, who took it away, why and for what motive? Who would have the opportunity of taking it away? Who, apart from Ministers, in October and November 1982 had any interest in taking it away?

I should like to put on record two questions which I asked the Attorney-General. I asked him: if the conclusion of the Director of Public Prosecutions that further police investigations were unlikely to produce any evidence of a criminal offence, regarding the disappearance of the control room log book of HMS Conqueror based on information about the whereabouts at the time, or the current whereabouts, of the relevant portions of the log; and if he will make a statement. The Solicitor-General replied: The police investigations were unable to identify at what point of time or in what circumstances the control room logs in question were improperly handled with the result that they are now missing. Their present whereabouts are not known. The conclusion that further investigations are unlikely to provide evidence of the commission of a criminal offence is based on the inconclusiveness of the information so far obtained about the circumstances in which the logs disappeared and the absence of any leads to further avenues of inquiry which might throw light on those circumstances. Sir Humphrey Appleby could not have put it more clearly. I asked the Attorney-General— pursuant to the answer of 21 October, Official Report, column 12, regarding the disappearance of the control room log of HMS Conqueror, whether the police inquiry revealed that a criminal offence had been committed; and if he will make a statement The Solicitor-General replied: I refer the hon. Member to my reply of 21 October. The conclusion of the Director of Public Prosecutions, in the light of the report of the police investigations, was that the evidence available did not establish that a criminal offence had been committed in connection with the disappearance of the logs. I concurred in that conclusion."—[Official Report, 24 October 1985; Vol. 84, c. 194.] Sir Robert Armstrong, in his great form yesterday, could not have put that more eloquently.

I fear that the comparisons with Westland do not end there. Just as Her Majesty's Government set up a leak inquiry on the Solicitor-General's letter, when a Secretary of State—a former Home Secretary no less—knew well that he had authorised the leak, so other Ministers went through the motions of an inquiry into the loss of the logbook. They sent busy detectives on a wild goose chase to the West Indies when they knew perfectly well that the supposed suspect, the former supplies officer of HMS Conqueror, had left the Navy at least two months before the Government say that a logbook went missing. The right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) called it a "waste of police time". What would happen to the rest of us or our constituents if we wilfully squandered police time?

If I set out the facts as I see them, Ministers will be only too delighted to correct me if I am wrong. Ministers and/ or the Director of Public Prosecutions required Detective Chief Superintendent Ron Hardy and Detective Sergeant Mike Ashdown to go to St. Lucia in the West Indies at a cost which eventually turned out to be £6,940.82. The figures come from the Solicitor-General's reply to me of 24 October 1985. [Vol. 84, c. 194.]

On Friday 8 February 1985 the two senior police detectives turned up in the St. Lucia harbour office of Lieutenant Mahendra Sethia, the former supplies officer of HMS Conquerer. His remarkable and well written diary features in Arthur Gayshon's unchallenged book "The Sinking of the Belgrano". Lieutenant Sethia had already been interviewed, not only by Mr. Hardy but by Rear-Admiral William Lang, Director of Naval Security, on Thursday 29 November 1984 in his office at the Ministry of Defence. Admiral Lang had a photocopy of the Sethia diary which had been given surreptitiously to the Ministry of Defence by the Sunday Times. I believe that it was unknown to the journalist of the Sunday Times to whom it had been entrusted as background material. Admiral Lang asked Sethia if he had stolen the control room log of the HMS Conqueror. Sethia forcefully denied that he had done any such thing.

Sethia was interviewed at New Scotland Yard by Mr. Hardy and Mr. Ashdown of the serious crimes squad on the same day, 29 November 1984, for over two hours. If they believed, which they probably did not, that Sethia had taken the control room logbook of the HMS Conqueror, why did Scotland Yard not take action there and then? Why did Ministers and the Director of Public Prosecutions send detectives to the West Indies, who may have been fed up with the whole inquiry? Was it because they thought that Sethia had the control room logbook? No. The former Secretary of State, the right hon. Member for Henley (Mr. Heseltine), revealed in a reply to the hon. Member for Vale of Glamorgan (Sir R. Gower): It is clear that the logs were compiled and probably remained on board the submarine until October or November 1982."—[Official Report, 30 November 1984; Vol. 68, c. 593.] Sethia left the Navy in July 1982, and in September and October 1982 it was known by the Ministry of Defence that he was cruising around the coast of Europe on a 31 ft sailing boat. As the logs of the critical months, April and May 1982, had been bound together with the logs up to the end of 1982, how could Ministers and the DPP suspect him of stealing the logbooks? My hon. Friend the Member for Newcastle upon Tyne, East (Mr. Brown), who knows about such matters, is nodding in agreement. Do they suppose that Sethia furtively went back to HMS Conqueror when it returned to Devonport on 5 November 1982 to prepare for the refit which began on 17 January 1983?

I would like a comment from Sir Thomas Hetherington, a distinguished public servant, to whom I am sending a copy of this speech, because it appears that he inadvertently allowed himself to be used by politicians for their own nefarious purposes. Knowing what the Ministry of Defence did, the DPP authorised the scandalous waste of £6,940.82 of public funds. For clarity I shall outline the chronology of events.

On 7 November 1984, the headline in the Daily Mirror was "Belgrano Sensation: Killer sub's logbook missing". That was a front page exclusive by Paul Foot. At mid morning on 7 November 1984 the former Secretary of State for Defence, the right hon. Member for Henley, gave evidence to the Foreign Affairs Committee on the Belgrano inquiry. At 2.35 pm on that day the former Secretary of State for Defence answered the PNQ on the missing logbook, and the board of inquiry was set up.

On 8 November 1984, an opening date of the Ponting trial of 28 January 1985 was set.

On 29 November 1984 Lieutenant Sethia was first interviewed by Detective Chief Superintendent Hardy. He was questioned about the diary and the logbook.

On 30 November 1984, the former Defence Secretary disclosed in a written answer to the hon. Member for Vale of Glamorgan (Sir R. Gower) that he had now referred the matter of the missing logbook to the Director of Public Prosecutions. In a separate written answer to my hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes), the former Defence Secretary disclosed that the matter of a diary kept by a member of the crew of Conqueror had also been referred to the Director of Public Prosecutions.

On 7 January 1985, the Director of Public Prosecutions instructed Hardy and a colleague to travel to St. Lucia to interview Sethia again. On 28 January 1985, the Ponting trial opened. On 8 February 1985, Lieutenant Sethia was questioned in St. Lucia by Hardy and a colleague about the logbook and diary. On 10 February 1985, several Sunday newspapers reported the detectives' visit to the West Indies and The Mail on Sunday claimed that the logbook was "probably" recovered. The newspaper's blazing headline said "Conqueror logbook seized. Exclusive Belgrano breakthrough".

An article by crime correspondent Chester Stearn went on to claim that the logbook was "almost certainly back" in the hands of the police. It stated that "certain navigational books" from the Conqueror were said to have been recovered from "a former officer" on the submarine. Lieutenant Sethia was not mentioned by name. On 11 February 1985, Mr. Justice Sir Anthony McCowan concluded his summing up and Clive Ponting was acquitted.

I turn to the real reason why I believe two busy police officers were sent to the West Indies. The jury in the trial of Clive Ponting under the Official Secrets Act 1911 was about to be sent out to consider its verdict. The headlines would be full of another "traitor to the Government" being brought to book. The cumulative effect of both stories on the public mind was not to be underestimated. At the Old Bailey, a "disloyal" civil servant was to be taught a lesson and, on the other side of the world, a "disloyal" naval officer was also to be taught a lesson.

As we now know, the British public, as represented by the men and women of the Ponting jury, were not so easily fooled. Thank goodness, British people as a cross-section can still recognise and reject outright Government lies when they see them.

When the decision was made to send those detectives to St. Lucia, it was known that all the events had been set in motion. It is in Hansard. The logbook was still there at the time. In a sense, Westland is an action replay of much of what we went through on the Belgrano.

I hope that my speech is read by the former Secretary of State for Trade and Industry. It may be for him a matter of delicious irony that the victim of the leak of the Solicitor-General's letter was himself one of the ministerial instruments, if not the perpetrator—I believe that the perpetrator was in Downing street — of the bogus and expensive inquiry which was a waste of police and Civil Service time, no less than the Westland leak inquiry.

Using inquiries not to ascertain the truth but for political ends is demeaning to British public life. This morning, I listened, as did many others, to the former Secretary of State for Defence refer to the time when I was defending the Government's position on the Belgrano". Much of it was impressive evidence. That is a long way from the debate on 18 February 1985.

The trouble is that the truth has to be chiselled out of the Government. In all that I have said I seek the views, first, of the Director of Public Prosecutions and, secondly, of the former Secretary of State for Scotland—the right hon. Member for Ayr (Mr. Younger)—who I believe is an honourable man and who, as incoming Secretary of State for Defence, should take a fresh look at these events.

8.43 pm
Mr. James Couchman (Gillingham)

Just over two years ago, I spoke during our annual Royal Navy debate and made something of a valedictory speech over the rapidly cooling corpse of the Royal Naval base and dockyard at Chatham. It was a well-received speech, and I certainly do not intend to use my few minutes going over old ground. That would, in any case, be graceless and churlish to my hon. Friend the Under-Secretary of State who was so helpful at the time of the rundown at Chatham, and to my hon. Friend the Minister of State for Defence Procurement, who, in his previous incarnation in the Department of Trade and Industry, took decisions that are now bringing forth fruit. Phoenix is rising from the ashes. There will be life at Chatham and Gillingham after the departure of the Royal Navy.

The commercial dock, which opened shortly before the Navy left Chatham for the last time, turned over 500,000 tonnes of cargo in its first year, and 1 million tonnes of cargo in its second year and it expects in its third year to turn over 1.5 million tonnes. English Estates, which was appointed to redevelop Chatham, has begun to achieve in preparation for its redevelopment what world war two failed to do. It has flattened the site and it is now a green field, or at least a grey concrete, site. English Estates has signed up its first major tenant—a most worthy tenant for the former fine naval barracks of HMS Pembroke. The recently declared enterprise zone will be a fine catalyst to firms to locate at Chatham. The work of the Historic Dockyard Trust is at an early stage, but we have great hopes for the future.

The affection of the Medway towns for the Royal Navy is undiminished. The recent brief visit of a squadron of three minehunters was hailed as the return of a long lost and very dear friend. It is because of that great kinship that I feel moved to speak briefly this evening.

Last week, during the equivalent debate on the Army, I made what I hoped was a reasonably positive and helpful contribution. I fear that this evening I may be somewhat more critical of recent decisions concerning the Navy. I am worried by a series of newspaper articles in responsible papers which ask questions about the Navy's preparedness to face a conflict as limited even as the 1982 operation in the south Atlantic. I am the first to concede the inclination of defence correspondents to scaremonger and seek to dismay those of us who take an interest—albeit a lay interest—in defence matters.

I propose to say nothing about strategic deterrents—we have heard enough about Polaris and Trident—but instead I should like to articulate some misgivings about current naval procurement and recruitment. Much of my concern centres on the major ships of the surface fleet—the destroyers and frigates. I, too, am concerned at the slowness in ordering the eight type 23s. I understand that only one has been ordered but that three are to be ordered shortly. There is speculation that the original number of eight type 23s may be halved with the substitution of much smaller and cheaper patrol vessels. A very convincing case would have to be made if apprehension about the Navy's ability to fulfil its role is to be stilled.

The concern about delay and escalating costs of major defence contracts was highlighted in last summer's report by the Committee of Public Accounts. In connection with the tardiness in ordering the type 23 ships, I should like to associate myself with the comments of my hon. Friend the Member for Ynys Môn (Mr. Best) who so ably advocated the case for the S90 design for frigates. I shall be interested in the comments of my hon. Friend the Under-Secretary of State on the arguments for and against the S90.

From looking forward to the ships of the near future, I should like to touch on the provision of better defences for existing major warships. If we learned anything from the Falklands conflict, it was that existing defences, especially on the type 42 ships, were woefully inadequate to deal with sea-skimming missiles, such as Exocet. It is more than three years since the Government pledged new equipment for 17 ships. Only two, as I understand it, have been so equipped, and as yet no decision has been taken on the type of defence to be provided for the assault ships, which it seems may be needed into the 21st century, and for the 12 sister ships to the Sheffield, the sinking of which was such a salutary lesson to us all.

Are we to buy more Vulcan-Phalanx guns? Are we to buy Goalkeeper? Are we able to defend these important ships against missiles with a British system? It is time that my right hon. and hon. Friends made up their minds.

A final thought in connection with our frigates and destroyers is prompted by today's report in the Daily Telegraph on the combined tanker, stores and workshop vessels for which Harland and Wolff and Swan Hunter have tendered. I hope that my hon. Friend the Under-Secretary of State will award this important contract soon, for these ships are vital to the viability of the type 23 ships under construction.

We are delighted by the orders announced on 3 January for Sting Ray, the three Upholder class submarines and the vital SSN. We hope that that may be an omen for this year and that we can expect that the logjam of naval procurement will be broken during the year.

I hope that, during our Royal Navy debate next year, we shall be able to applaud the wisdom of the procurement decisions that have been taken.

Another of my worries, which is just as pertinent to the fleet's competence and efficiency as procurement, is the recruitment, in particular, of officers. I understand that considerable pressure is arising because too few junior officers have been recruited since the 1981 defence review. Because an average of only 350 officers have been recruited in the past four years, we shall have to seek 800 per year for the forseeable future. Those are the words not of a mischievous defence correspondent but of the Director of Naval Recruiting in the Ministry of Defence.

That warning confirms my recent contacts with the Royal Navy, during which officers have confided their worry that a significant problem, especially in the older and smaller frigates, is now apparent. My right hon. and hon. Friends will appreciate, far better than I, the pressures of life at sea. Ships are now spending an unprecedented 50 per cent. of their time at sea. They will understand the changing social patterns which make prolonged and recurring periods at sea less attractive and acceptable than hitherto to wives and families. They will have had an opportunity to study increased attrition rates.

I should be grateful for my hon. Friend's assurance, when he replies, that he and his fellow Ministers have taken on board the dangerous position which will arise if the Navy continues to under-recruit officers. A shortage of junior officers now will manifest itself as a shortage of middle-ranking officers in 10 years time, and who knows, in a quarter of a century we may even be short of admirals.

My constituents' interest in the Royal Navy is not one of mawkish sentimentality born of the long naval tradition of the area. They see the Royal Navy as vital to this island nation's defence and completely symbolic of the Government's commitment to that defence.

I have asked questions tonight—not to be unhelpful, because that is not my way—which have been prompted by apparently responsible press reports reinforced by recent contacts with the Navy. I look forward to my hon. Friend reassuring me and proving that my fears are groundless.

8.52 pm
Dr. Norman A. Godman (Greenock and Port Glasgow)

As someone associated with the fishing industry, I naturally have a great deal of respect and admiration for the Royal Navy. I shall always remember the equanimity and resilience displayed by the sailors and officers of the frigates involved in the United Kingdom-Icelandic fisheries disputes. Ships and men were placed in an almost impossible position by the stupidly short-sighted policies of Tory and Labour Governments. The crews of those frigates earned the deep gratitude of British fishermen and their families for the protection that they gave to our trawlers during those foolishly futile fishery disputes with the Icelanders.

The Royal Navy appears to be bedevilled by a defence procurement policy that Walpole might have called a heap of contradictions and incoherence. Before discussing the pantomine of a defence procurement policy, I shall bring to the Minister's attention and that of the House a matter that deeply worries some of my constituents. I have already mentioned it to the Minister informally. I am deeply grateful for the courteous reaction that he has always shown to delegations of shop stewards from my constituency and myself. I only wish that he could match that marvellous courtesy with generous orders for my shipyards.

The anxiety centres upon fears of radiation-induced illness amongst employees at the Royal Navy armaments depot at Coulport. Is the Minister satisfied with safety standards at Faslane and Coulport? Has exposure to radiation at Coulport remained below internationally recognised safety limits? Are the small teams of men that fasten the warheads to the missiles at Coulport subject to, or protected by, the most stringent safety regulations? Is an examination of the safety regulations and radiation levels at Coulport being conducted by the Health and Safety Executive? If so, will the Ministry of Defence publish the report produced by that group of investigators? I hope that the Minister will give me some assurances on those matters.

I called the Government's defence procurement policy a heap of contradictions. One general point about it is that it favours the "deep south" of England. Last week's New Society stated: Defence expenditure has become the main regionally selective government assistance to industry. Between 1978–79 and 1983–84, defence spending increased by over a quarter in real terms. By contrast, total public expenditure grew by only 7 per cent. It is significant that one of Michael Heseltine's last acts before he resigned as Defence Secretary over the Westland row was to direct a contract for three diesel electric submarines to Liverpool … All the same, most domestic defence procurement takes place in lowland England". Perhaps the Government have written off Scotland. What is plain is that Scotland has written off the Tory party. Recent opinion polls in Scotland show the Tories trailing in fourth place behind the Scottish National party. The Tories are a minority party today in Scotland.

The submarine orders for Vickers-Cammell Laird clearly reveal the contradictory nature of the Government's defence and industrial policies. On 26 November 1985, the Minister of State for Defence Procurement told the House: It is the Government's intention that there should be a number of submarine builders in this country, just as there are at present. Vickers has a monopoly not of conventional but of nuclear submarines. We envisage that there will be plenty of competition for conventional submarines".—[Official Report, 26 November 1985; Vol. 87, c. 735.] The decision of the then Secretary of State to award a contract for three conventional submarines to Vickers-Cammell Laird gave the company a monopoly of conventional and nuclear submarine construction. In a letter I sent to the Minister I said that in my view he had misled the House on 26 November 1985. However, I accept the Minister's word—he is an honourable man—that he did not mislead the House on that occasion. In a reply dated 13 January 1986, he said: I cannot accept your assertion that I have in some way misled the House. The order for the three Upholder class conventional submarines…was placed as a result of a competition, with the order going to the yard which offered the best terms and conditions. It would have been more expensive to split the order. His letter again shows the heap of contradictions in procurement policy. Clearly the decision to place the contract with Vickers-Cammell Laird is a plain and simple attempt to lengthen the order book immediately prior to privatisation. It certainly places Cammell Laird at Birkenhead in a much more appealing light.

The Minister said in his letter that the orders went to the company that offered the best terms and conditions. It would have been more expensive to split the order. In a letter to me, he said: Bids from the three companies who tendered were close, but Cammell Laird offered significantly the best value for money to the Ministry of Defence overall.

However, this benchmark, these criteria, were not applied to a recent contract for two frigates. If value for money were the sole criterion, both vessels would have been ordered from Vosper Thornycroft. In fact, the then Secretary of State for Defence decided to save jobs at Cammell Laird and awarded one of the frigates to that yard.

In a statement to the House of Commons in January 1985 the then Secretary of State said: The cheapest solution from the point of defence procurement would be to place the order for both ships with one yard, but, in the light of the wider and relevant factors involved, I have decided that an order for one type 22 frigate will be placed with Cammell Laird and for the second with Swan Hunter, and I am prepared to authorise the necessary expenditure. This is important because he went on to say: This offers the prospect of the survival of Cammell Laird as a major warship builder; without such a contract the yard would have closed. I hope that the yard will succeed in obtaining other business in the short as well as the long term." —[Official Report, 28 January 1985; Vol. 72, c. 21.] In an editorial entitled "Sentimental Heseltine", the Daily Telegraph said: The decision of Mr. Michael Heseltine to divide the order for two Type 22 frigates between Swan Hunter of Tyneside and Cammell Laird of Birkenhead is easy to understand. Although it would make financial sense to build both ships at Swan Hunter because of economies of scale and because it is a more efficient yard than its Merseyside counterpart, the Secretary of State for Defence was influenced by the 'wider and relevant factors' … Mr. Heseltine may well have had additional sentimental reasons for granting Cammell Laird a reprieve.

With regard to the three submarine orders, it is to his shame that the right hon. Member for Henley (Mr. Heseltine) felt no sentimental concern for Scotland and Scottish shipyard workers. His sentimentality took him no further north than Birkenhead. I have to say with respect that it is a great pity that the right hon. Gentleman did not resign three or four months earlier. Had he done so, his successor the right hon. Member for Ayr (Mr. Younger) might well have followed his earlier decision, with these "wider factors," and awarded a contract to Scott Lithgow for one of the submarines. This confused, biased and confusing procurement policy has inflicted severe damage upon my constituency which has at present a male unemployment rate in excess of 26.5 per cent. It is a scandalous state of affairs. I sincerely hope that the new Secretary of State for Defence shows some concern, sentimental or otherwise, for the work force and management of Scott Lithgow. In the short run he can best demonstrate that concern by advancing the orders promised to this yard for a range mooring vessel and two powered mooring barges. He could also in the medium term award a contract to Scott Lithgow for an aviation support ship.

Finally, it is very plain to me that the operative factors are not identical in all instances of warship contracts. When considered desirable or necessary, Ministers at the Ministry of Defence simply re-write the rules. Given the habitual reluctance of Departments to disclose fully and openly the factors determining decision-making, it is impossible for a Back-Bencher, and perhaps even a Select Committee, to determine how decisions are reached. That is a great shame.

One factor that encouraged real change was the Falklands campaign. With regard to shipyards today, it would appear that the overriding factor is the privatisation drive.

9.4 pm

Mr. Jonathan Sayeed (Bristol, East)

It is good that we continue to retain single service debates. It allows us to deal in detail with items which are not necessarily appropriate when we discuss the defence Estimates, and it is a morale booster for the services that want their individual service debated properly and fully.

I shall deal with three matters which have been covered only partially by hon. Members earlier — damage control, spares provision aboard warships, and encouragement for co-operation between the Ministry of Defence and the happily denationalised warship yards in attracting warship orders from overseas.

Since 1983 I have had the good fortune to visit four warships—HMS Illustrious, a type 42, a type 21, and a type 22—and in a few weeks time I hope to go aboard an OPV. Each time I have noted an increasing emphasis on damage control. The lessons that had been dangerously forgotten since the second world war and which have been relearned since the Falklands campaign are now being put increasingly into practice. My right hon. Friend the Minister will be aware that during the second world war more ships were lost because of inadequate damage control procedures than directly due to enemy action. During the Falklands campaign we had frightening instances of ships burning, of men dressed in plastic or terylene overalls being extremely badly burnt, and of plastic burning and producing noxious gases aad thick smoke. When I visited HMS Brazen yesterday I was particularly pleased to see a ship that was better designed and equipped for carrying out damage control than the type 21 or type 42, and that gave considerable emphasis to damage control training aboard ship.

Will my right hon. Friend ensure that all men on warships have clothing made of pure cotton, and that there are no terylene overalls, number eights or action working dress? Will he or his Department consult the captain of HMS Brazen? When the men were practising damage control they were using modified steel pit props. That seemed to be a better idea than using wooden shoring. All hon. Members will have experienced a heavy London smog. It is quite frightening and disorientating. I have done two damage control training courses, one in Australia and the other in the United Kingdom. One must go inside a metal cabin which is on fire, one's breathing apparatus is removed, and one cannot see anything. One must first control oneself and fight down the panic. It is desperately important that we provide every man with a personal breathing apparatus so that if he is caught inside a ship in thick, acrid smoke, he can cover his head, breathe and control his panic. That will permit him to operate as an effective fighting unit.

Regarding the provision of spares, I know that warships are getting Oasis, although HMS Brazen did not have it, and other comparable automated systems for ordering spares. Meanwhile, however, some items are in short supply, as many naval officers and senior ratings have told me all too often. These are often minor items, but as a consequence the system does not work or it works considerably below optimum because of a failure to deliver spare parts or because items fail faster than expected. Until Oasis or a similar system is working properly, I suggest to my right hon. Friend the Minister that he should send a simple questionnaire to all warships in service. There are no more than 100 warships in operation at any one time.

Mr. Denzil Davies

What navy is that?

Mr. Sayeed

There are no more than 100 RN warships in operation at any one time. The questionnaire should ask each head of department — executive, supply and secretariat, marine engineering and weapons electrical—two questions. First, they should list the main five items where shortages have caused or are causing operational problems. The second question would be to list the three items with which they believe the ship is over-supplied. They should state how many of the over-supplied items they have and how long it would take to use up that number at the current rate of consumption.

If the Ministry of Defence says that it does not have the personnel to handle this simple exercise, then I make my right hon. Friend an offer that he cannot refuse. If my right hon. Friend will reconfirm my security clearance and invest me with the authority to act, I will write to the warships and when I get the answers I shall collate them for him. I believe that these answers will show one thing clearly — that important operational inefficiencies are occurring because of a lack of a number of minor spares. Steps could be taken to correct that and thus increase the operating efficiency of the fleet. The questionnaire would also show that warships are holding spares that they do not need or want and which are taking up valuable space.

I believe that the Ministry of Defence should co-operate with the newly denationalised warship yards in promoting the sale of warships overseas. The Ministry of Defence should suggest to these yards that they design a warship — a frigate or a destroyer or even an OPV. The shipyards should design it—not Bath—in a form which they believe will be attractive to overseas buyers. The dockyards could build this new warship and then the Navy could borrow it and operate it as a shop window. The Navy could go around the world showing friendly powers how well we can build ships, and cheaply at that.

The warship yards may or may not like the idea but it is worth exploring the concept. We have the expertise in the warship yards and the Navy is a superb ambassador. It would be little skin off the Ministry of Defence's nose to provide the sailors. The Royal Navy could evaluate a much simpler form of warship and we may thus avoid the argument about the merits of S90s or type 23s. If the dockyards believe they can sell an S90 overseas, let them build one and allow the Navy to operate it as a floating shop window.

I will not deal with the defence policy of the Labour party. It does not know what it wants and its policy makes no sense at all. The Social Democratic party has perpetuated an insidious con trick by suggesting that cruise-carrying submarines can provide a viable alternative to Trident.

To provide even minimal deterrence, we would have to have many times the present number of cruise-carrying submarines. The Social Democratic party would reduce defence expenditure, but it is unable to say where the money for all these extra submarines would come from. To illustrate why it is necessary to have more cruise-carrying submarines one just has to note that the range of cruise is 1,500 nautical miles whereas Trident has a range of 4,500 nautical miles, which gives submarines much more room to hide in. The SDP forgets that cruise is a single missile and that Trident is a multiple re-entry vehicle. It forgets that cruise is subsonic and can be taken out by aircraft whereas there is no technology yet which can intercept Trident re-entry vehicles.

I should have liked to develop my argument, but I am aware of the constraints of time. I hope that I shall get some answers from my hon. Friend the Minister.

9.15 pm
Mr. Michael Hancock (Portsmouth, South)

I shall not waste the valuable minutes at my disposal by answering the hon. Member for Bristol, East (Mr. Sayeed). I propose to pick up some of the issues that have already been raised and to develop some of them which concern the city of Portsmouth and the Royal Navy's involvement with it.

As for air-sea rescue and Lee-on-the-Solent, it would be stupid even to consider removing that facility from HMS Daedalus. It serves a population of several million people—residents and visitors—during a year. The local newspaper and other hon. Members who supported its retention should be congratulated.

My colleague, the hon. Member for Portsmouth, North (Mr. Griffiths) talked about the school of music. What he said would enjoy universal support in Portsmouth, which was badly savaged by the Nott cuts of 1981. The cost of moving to Deal has doubled. I have written to the new Secretary of State and I hope that the matter can be reconsidered, especially with regard to Eastney. It is logical for naval bands to stay there, even if that is not true for all defence bands.

Will the Minister give us an answer about the future of Fleetlands — the largest helicopter repair facility in Europe? The work force there is nervous about the future, about whether it has one and whether any future lies in Government ownership or private ownership, and whether it will be sold off to Sikorsky.

I recently had a short voyage on one of Her Majesty's ships and I should like to describe the feeling of men serving on it, and of people in Portsmouth. Morale is not high in the Navy. The figures speak for themselves. There has been a 37 per cent. increase in the number of ratings and officers wanting to come out of the Navy between 1983 and 1985. There has been a fall, despite a figure of 3.5 million unemployed, in the number of people wanting to enter the service, whether as officers or as ratings. We must ask what is wrong in the Navy.

In one section of a type 42 destroyer, all 14 men had put in their notice to leave the Navy within 18 months. Many of them spoke of their problems—too long at sea, undermanning, the difficulties of sea training and problems at home. None of them was happy, but all were incredibly proud to be in the Navy. Other hon. Members have talked about the pride of serving members of the Navy and those who have left and their ability to serve the community. Although they are immensely proud, many are sick at how the Navy is operating.

It is ironic that, while we can spend £2.8 million refurbishing the officers' mess at HMS Nelson, in my city there are 37 able seamen to a mess on a type 42 destroyer. Such conditions are a disgrace in 1986. We must question the suitability of some of the things that are happening on those ships. The Fleet Air Arm has insufficient facilities for flying time, because of restrictions on fuel and the economies that it is forced to make. The exercises of one of Her Majesty's ships are not carried out with the Fleet Air Arm or the Royal Air Force, but with private commercial pilots brought in to fly sorties over our ships to provide the required expertise and training. Live rounds of ammunition cannot be fired at seaborne targets because of the cost involved. That adds up to a restrictive use of facilities.

Radar is shifted from ship to ship, because of the lack of sophisticated new equipment to go round. That all undermines the morale of the Navy at rating and officer level.

Many hon. Members have quoted figures about the merchant service. Is it permissible for this House to allow that service to diminish? In details passed to me recently it was interesting to note that the British Fern and the British Ivy were requisitioned during the Falklands war to take cargoes to Ascension Island, only to be recalled to Gibraltar because the Indian Government objected to Indian nationals serving on ships involved in the conflict. The cargoes had to be offloaded at Gibraltar and transported to Ascension Island by other ships.

Is it right to undermine the merchant service support that is undoubtedly required by the Royal Navy? Many hon. Members have spoken about a reduction on the Channel services when the Channel tunnel is built. Have we really considered the effects of that?

In Portsmouth and the greater Portsmouth area there are 650 empty naval houses. That is a small point, but it is important to service personnel when there are 5,000 people waiting for houses. Something must be done about those empty properties because it is a disgrace and a stigma on the service establishment in that area. If naval lands are not to be used, let us have some of them. The Navy owns 1,200 hectares of land in the greater Portsmouth area. Much of that land has only anchors and chains on it. If naval lands are not to be used, decisions should be made quickly so that they can be released. I make a special plea for the Fraser gun range at Eastney. Please make a decision so that Portsmouth can plan for some of its needs.

I am sorry that I had such a short time to discuss such a big subject for my area. I regret that bitterly. I should have especially liked to develop the arguments about Navy morale and the need for us to support it. There are serious problems and I do not believe that the Government have the policies to put the fibre and fabric of the Navy back together to give Britain the type of Navy we have come to expect and to want.

9.22 pm
Mr. Denzil Davies (Llanelli)

This is the second of the three annual services debates in the House. Last week we debated the Army, and tonight we are debating the Navy. In last week's debate and tonight, an underlying concern has been expressed about whether it will be possible to fund even the defence expenditure that the Government have set out in their various documents and in the public expenditure White Paper.

As was said last week, the defence budget is gradually getting out of control. Difficult problems must be faced. We should remember the defence review of 1981 under a previous Secretary of State, Sir John Nott. If that review had been carried through, the Royal Navy would have been reduced to a coastal defence force. That review was against the background of the Government's decision to buy Trident mark 1 from the Americans. In those days, the estimated cost of Trident mark 1 was about £5,000 million.

Since then, the Government have decided to purchase Trident mark 2, because the Americans will stop producing the mark 1. On present estimates, mark 2 will cost £9.5 billion. I do not say that the mark 2 is twice as expensive as the mark 1, because inflation must be taken into account, but on 1981 figures, Trident mark 2 would probably have cost about £7.5 billion, which was way in excess of the estimated cost of the mark 1.

The Nott defence review was conducted against the background of purchasing Trident mark 1. It was stopped largely as a result of the Falklands war, although Chatham dockyard was closed and Portsmouth was substantially run down and is no longer a dockyard. Apart from those economies, if they can be called that, most of the proposed cuts under the Nott review were restored as a result of the Falklands war and the lessons learnt from it.

The present position mirrors the position before the Nott review in 1981, with the addition of a more expensive Trident and the fact that, during the next few years. the cost of Trident will escalate rapidly within a defence budget which will not increase and which, on the figures, looks as though it will decrease during the next three years. There is a real danger that the brunt of the cuts will fall upon the Royal Navy, as they were intended to fall upon the Navy in Sir John Nott's analysis of the position in 1981.

The 50-warship, destroyer and frigate Navy to which the Government are committed is extremely important not only to the armed services but to the future of our warship yards and to employment in many parts of Britain. During the next 10 years, frigates will have to be ordered at least at twice the rate that they have been ordered since 1979. If that is not done, the Navy faces the prospect of operating an increasingly aged fleet of destroyers and frigates, with increasing maintenance costs and diminished effectiveness. The maximum useful life of a warship is about 22 years. To secure in 10 years' time a force of destroyers and frigates within the 22-year life span, the Government would have to order another 17, and orders would have to be placed within the next six years. During the six years since they came to power, the Government have placed nine orders for new frigates, but four of those were replacements for ships lost in the Falklands; the resources for them came not from the normal defence budget but from the special fund that the Treasury allowed to the Ministry of Defence to make good war losses in the Falklands.

Against that background, and the effect of the failure to order frigates from companies such as Swan Hunter, we are anxious not only about the Navy but, as my hon. Friends the Members for Wallsend (Mr. Garrett) and Newcastle upon Tyne, East (Mr. Brown) said, that jobs and skills should not be lost in our warship yards.

When the type 23 frigate was first thought of in 1981 or 1982, against the background of the closure of Chatham, it was considered to be a throwaway frigate that would not be refitted. This may be history now, but it is worth examining a quotation from the Secretary of State in a debate on 25 June 1981, which was repeated in the Navy debate on 19 July 1982: Secondly, we can maintain our surface fleet at its present full strength only through a continuous programme of refits and major mid-life modernisations, requiring a huge and costly dockyard infrastructure. Typically it can now cost up to £70 million to modernise an old Leander frigate, which is actually more than our target cost for the new type 23 frigate." — [Official Report, 19 July 1982; Vol. 28, c. 58.] There was some doubt about the figure of £70 million. It is questionable whether that is a correct figure for the refit of a Leander frigate.

At that time, the cost of a type 23 frigate was £60 million. That frigate was to be thrown away—it would not be refitted or modernised. It was against that background that Chatham was closed, Gibraltar was scheduled to close and Portsmouth ceased to be a dockyard.

I do not know the current target estimate for a type 23 frigate, although I understand it to be between £110 million and £120 million, depending on what is put on it. It surely cannot be a throwaway frigate any longer; I cannot believe that is will be disposed of. There may be questions about future dockyard capacity and we may face problems because of the background to that new frigate.

We have debated the dockyards fully—although not more than fully because it is an important subject, as the Minister understands. I listened with interest to the right hon. Member for Plymouth, Devonport (Dr. Owen), who said that he had read all the speeches. Without any disrespect to the hon. Member for Portsmouth, South (Mr. Hancock), perhaps we should have had the benefit of the presence of the right hon. Member for Devonport on the Committee—he would not then have had to read the speeches, he could have spoken on an important matter concerning his constituency. However, he did not avail himself of that opportunity.

Several hon. Members have spoken about merchant shipping — notably my hon. Friend the Member for Wallsend and the right hon. Members for Taunton (Sir E. du Cann) and for Western Isles (Mr. Stewart). I make no apology for returning to that subject. This year we have heard nothing from the Government to allay our fears about the dangerous decline of the merchant fleet, and the consequences upon the availability of seamen and ships for the Royal Navy.

The Government's figures are extremely optimistic. As the Select Committee on Defence said in its first report of 1984–85, the figures are dependent upon a theoretical view of the availability of ships. I understand that, in theory, there are three categories of requisition or availability—United Kingdom owned and registered ships; United Kingdom registered ships—apparently owned in British dependent territories, of which there are still a few left — and flagged out ships that are United Kingdom beneficially owned.

Perhaps there is no problem with requisitioning United Kingdom owned and registered ships. In theory, there should also be no problem with United Kingdom registered ships. However, the Committee points out quite reasonably in paragraph 19: Nevertheless, if the vessels remain on the registers of the United Kingdom or dependent territories the application of the prerogative power is clear. In the case of the dependent territories, the ability to requisition may be subject to political constraints. That may cause a problem with the number of ships that we can obtain.

In the third category of flagged out ships, the Committee states in paragraph 20: We cannot be confident that, say, a Panama flag ship owned by a Panamanian registered company could be relied upon for requisition. The figures are, therefore, extremely optimistic. The Government have not really taken on board the seriousness of the decline of the merchant fleet.

I have some sympathy with the MOD, because it is not the lead Department in this matter. It used to be the Department of Trade and Industry, but that responsibility has now been passed to the Secretary of State for Transport. Whatever one may say about that right hon. Gentleman, he has not shown great enthusiasm for Government intervention in the market place.

The answer in the case of the Merchant Navy does not lie with the Department of Defence but, as the right hon. Member for Taunton said, with a national maritime policy. Under the Government, we have no national policy on anything, and until somebody agrees that the Government must intervene in the market place, nothing will happen, because decisions on merchant shipping will be based on commercial, financial and taxation decisions. The Government will have to decide on these matters and intervene if we are to stop the decline and ensure that we have a merchant fleet that can support the Royal Navy.

We have not had any satisfactory answers about assault ships from the Government. As we know, assault ships were to have gone. Before General Galtieri invaded the Falklands, such ships were to go to the Nott's knackers yard, but they were reprieved as a result of the Falklands. However, a decision on them must be taken, and I hope that the Government will end the uncertainty before long and tell us that they are to be replaced. They have an important role to play in Norway especially, because of our commitment through the Royal Marines and the Royal Navy in that part of NATO's defence. I hope that we can be told something more by the Under-Secretary.

We have three carriers but only two crews and only two lots of aeroplanes, fixed and rotor wing. It is no good saying that we can swap the crews over so that when one carrier is being refitted, the crew is taken from one carrier and put on another. There are problems in such a system, such as keeping sailors at sea for a long time and their morale. This is not a satisfactory way to go about such things.

There is the question of torpedoes, which are—

Mr. Franks

There is the question of Trident.

Mr. Davies

I shall be coming to the hon. Gentleman's rather excitable speech—he should not be excited any more. The visits of my hon. Friend the Member for Clackmannan (Mr. O'Neill) are having an effect up there in Barrow and we shall continue to go up there and preach the message that the Royal Navy needs hunter-killer submarines and under a Labour Government we shall be able to afford to put crews on them. The hon. Gentleman should take that message back to Barrow, and if he does not, we shall. He knows that he will have great difficulties in the next election.

Neither the Government nor the NATO strategies have resolved the problem of what to do with the Navy. The issue came to the fore in John Nott's review, and it is still there. If the intention is that war in central Europe, should it come, is to last for seven to eight days and then we shall go nuclear, there are questions about the role of the Royal Navy. If, on the other hand, the war is not to go nuclear, and remains conventional, the role of the Navy is different, especially in the eastern Atlantic.

These issues must be resolved, but the Government have not resolved them, nor the issues of the budget and how to pay for a proper Navy as well as paying for Trident, which they cannot do. These issues will come back in the Defence Estimates and will have to be faced by the Government sooner or later.

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

It gives me great pleasure to close this year's Navy debate. Before dealing with the specific topics that have occupied the attention of right hon. and hon. Members, I should like to address the main thrust of today's debate, defence expenditure, and within that naval expenditure. The Navy budget, in common with the defence budget as a whole, has benefited from an unprecedented period of sustained real growth. This is reflected in the size of the shipbuilding programme over the past seven years.

My right hon. Friend the Minister of State for the Armed Forces said earlier that since May 1979 this Government have ordered 50 warships, whose total value is equivalent to about £3,600 million at 1985–86 price levels. This figure included nine nuclear and conventionally powered submarines, nine frigates and 21 mine counter vessels of three different classes. There are 28 vessels currently at various stages of construction, with a value approaching £3 billion. The Government can be justifiably proud of their record of support for the Royal Navy. It is now much better equipped all round than it would have been if expenditure had been maintained in real terms at 1978–79 levels.

In 1984–85 our sea systems expenditure in the United Kingdom industry was approximately £1,870 million. This directly employed about 70,000 people; indirectly it employed a further 50,000 people. These figures exclude any Ministry of Defence personnel.

The remarks made in the Army debate last week by the right hon. Member for Llanelli (Mr. Davies) are beginning to haunt him. I repeat the quotation: by cancelling Trident, we can maintain present levels of conventional defence spending."—[Official Report, 30 January 1986; Vol. 90, c. 1127] The Opposition have made no secret of their eagerness to cancel Trident. However, until now, as I understood their position, their intention had been to switch over resources to make some enhancements to the conventional capability. Now it appears that, not content with throwing away the ultimate guarantee of this nation's security, the right hon. Gentleman does not intend even to compensate for this by increasing the orders for conventional forces.

When the right hon. Member for Llanelli and the hon. Member for Clackmannan (Mr. O'Neill) visited Vickers Shipbuilding and Engineering at Barrow they endeavoured to reassure the work force, whose livelihood in the latter part of this decade depends upon Trident and who are naturally apprehensive about Labour party policy, that although the Labour party would cancel Trident the yard's future would be safeguarded by additional semi-submersible nuclear orders. My hon. Friend the Member for Barrow and Furness (Mr. Franks) asked where the right hon. Gentleman would produce the money from for this if, as he has said in the House, he intends to cancel Trident and to maintain only existing levels of conventional defence spending.

Without wishing to be too cruel to the right hon. Gentleman, he must suffer enough from the cross that he has to bear of his party's defence policy. I remind him again of the point made by my hon. Friend the Minister of State for Defence Procurement when he wound up last week's debate. My hon. Friend highlighted the yawning gap between the right hon. Gentleman's statement that conventional defence spending is inadequate and the statement of his Front Bench colleague the hon. Member for Oldham, West (Mr. Meacher) who confirmed that Labour would not have increased defence spending by 3 per cent. a year between 1979 and 1985, as this Government did. How does the right hon. Gentleman explain that? Where will the money for defence come from under a Labour Administration—that question has to be asked—on top of the increased spending on education, pensions, the National Health Service, roads, the youth training scheme, overseas aid and industry? Name it and the nation's cheque book will be available. Cash appears to be no object at all.

It is a bit much for the Opposition to go on about the supposed inadequacy of this Government's spending. When we came to power we inherited the lowest level of defence spending in real terms since just after the Korean war. We have increased it substantially. We have concentrated the increase on the conventional forces that were left in such a sorry and demoralised state by the last Labour Government. The truth is that the Labour party's defence policy is bogus, intellectually dishonest and just does not add up, in either military or financial terms.

I say to those Opposition Members who represent ship-building constituencies — the hon. Members for Wallsend (Mr. Garrett), for Newcastle upon Tyne, East (Mr. Brown) and for Greenock and Port Glasgow (Dr. Godman)—that we understand their concern over their constituents' interests. Sadly, there is a substantial over-capacity in our warship building yards. I hear what Opposition Members say in this House but I do not often hear similiar speeches from Opposition Members in favour of increased defence expenditure at Labour party conferences.

Opposition Members, including the right hon. Member for Plymouth, Devonport (Dr. Owen), made much of the impact of Trident upon the rest of the defence programme and the dire consequences for the conventional navy of Trident. This is, of course, nonsense. It is a well-managed programme. There has been no real increase in the estimate for Trident D5 since it was first announced. The differences are entirely due to inflation and exchange rate movement.

In that context I remind the House of the words of the hon. Member for Dunfermline, West (Mr. Douglas), who sadly is not with us this evening, but who knows a great deal more about the Royal Navy than many Opposition Members. On the Second Reading of the Dockyards Services Bill the hon. Gentleman said: What kind of Navy are we likely to have in the late 1980s and 1990s? Clearly it will be a mixed Navy of surface and sub-surface vessels. Though I may hold different views from others about the degree of mix that should exist, it is clear that, despite the difficulties of financing Trident, we shall have a Navy with a substantial surface component along with a sub-surface component." [Official Report, 2 December 1985; Vol. 88,c. 58.]

Mr. Dalyell

My hon. Friend the Member for Dunfermline, West (Mr. Douglas) is a member of the Select Committee on Defence and that is why he is absent.

Mr. Lee

I appreciate that information from the hon. Gentleman.

The hon. Member for Dunfermline, West is correct. Alongside Trident, there will indeed be a Navy with substantial surface and sub-surface components. Opposition Members would do well to heed those words from one of their colleagues.

Mr. Nicholas Brown

I have heeded the Under-Secretary of State's words and it all sounds very reassuring. Can the Under-Secretary now give us a firm commitment to the placement of the No. 2, No. 3 and No. 4 type 23 warships and also a sound decision on the two auxiliary vessels which are in contention between Swan Hunter and Harland and Wolff?

Mr. Lee

I shall discuss specific procurement matters shortly.

I would like to put the costs of Trident into context. Trident will cost, over its 20-year life, approximately one half of the total defence budget in one year. For.that expenditure we shall get our ultimate strategic deterrent for well into the next century.

As for competition in naval procurement, it is Ministry of Defence policy to place warship contracts, wherever practicable, by competitive tendering. That policy has achieved keen prices ranging from the major order for Upholder class submarines, placed on 3 January, to orders for smaller craft. As for the Upholder class diesel-electric submarine, the order for a batch of type 24-00 submarines placed as a result of competition gave a saving of about £20 million. Almost one half of that figure was due to competition and the rest to batch ordering.

Recent examples of orders for smaller craft where competition has been especially fierce and where MOD obtained savings compared with original estimates included four ramped craft logistics for the Army and 71 of the 5.5 motorboats for the Royal Navy.

Competition, often in conjunction with other factors such as technological advances, has also provided some significant savings in the area of naval weapons. As an example, we are obtaining savings on unit production costs of new sonars which are typically between 10 and 30 per cent. less in real terms than the cost of the equipment that they replace. At the same time, advances in technology ensure that they are considerably more capable than the equipment they replace.

A number of right hon. and hon. Members raised the question of escort numbers. We are continuing our programme of construction of the highly effective type 22 and type 23s to replace the older type 21 and Leander class frigates. The order for the last two type 22s was placed in January last year. Construction of the first class 23, HMS Norfolk, is proceeding satisfactorily. We are currently evaluating tenders for the first follow-on vessels of this class. Subject to agreement on price, we intend, as the House is aware, to order type 23-02 from Swan Hunter.

It will be some time before we will be able to make an announcement on the outcome of the competition for type 23-03 and 23-04. Broadly, it remains the Government's intention to order approximately three type 23 frigates a year. Nevertheless our future plans, as always, are subject to the availability of resources and the House will appreciate that these are exceedingly tight.

Dr. Godman

Will the hon. Gentleman give way?

Mr. Lee

I shall give way in a moment.

I can assure the House, and particularly my hon. Friend the Member for Portsmouth, North (Mr. Griffiths), that there has been no change in the Government's intention to maintain a force of about 50 escort vessels.

Dr. Godman

What is the likelihood of Yarrow winning one of the orders for this type of surface vehicle?

Mr. Lee

With the greatest respect to the hon. Gentleman, it would be wholly inappropriate for me to answer that question. Competition has to be won on the basis of merit and I certainly cannot make comments on particular yards like Yarrow.

Mr. O'Neill

I am almost reassured by what the Minister is saying, but I ask him to be more specific about the rate of ordering, which we shall have to treble if we are to sustain a 50-warship Navy beyond 1990. Has the hon. Gentleman given thought to that? What is the Government's view on that?

Mr. Lee

I can only repeat that we shall be ordering at the rate of broadly three vessels a year. I stand by what I have said. However, that will be subject to the budget.

Mr. Garrett

The Minister's announcement will be accepted with quiet satisfaction on Tyneside. However, I ask the hon. Gentleman to make a statement on the prospect of the order for the auxiliary oil replenishment vessel.

Mr. Lee

I was about to turn to that matter. The AOR was mentioned by the hon. Member for Wallsend and by my hon. Friend the Member for Gillingham (Mr. Couchman). Tenders have been received for the design and build of the first two "one-stop" auxiliary oil replenishment vessels and they are currently being evaluated. Two shipyards have tendered for the design-and-build package, and these are Swan Hunter and Harland and Wolff. It is intended that the AOR will provide simultaneous replenishment at sea of liquids and solids. It will replace the ageing Royal Fleet Auxiliary. No decisions have been taken on the size and timing of orders.

It will be of interest to those who represent shipbuilding constituencies that there is the certainty now of a refit for Britannia. My right hon. Friend the Minister of State for the Armed Forces paid tribute in his opening remarks to the recent exploits of Her Majesty's yacht Britannia and its crew in the Red sea, and I wish to associate myself with his remarks.

The House will be aware that Britannia is over 30 years old. If the yacht is to continue in service for the next 10 to 15 years, we intend to have it refitted during 1987. We are considering inviting commercial tenders for this work later this year, which will ensure that we obtain the best value for money.

Mr. Garrett

Will the Minister give an assurance that when commercial tendering takes place for the refitting of the royal yacht it will be on the basis that the work will be done in the United Kingdom and not in a foreign yard?

Mr. Lee

I can give the categoric assurance that Britannia will be refitted in the United Kingdom.

A number of hon. Members mentioned amphibious shipping, especially my hon. Friend the Member for Ynys Môn (Mr. Best). We have referred on several occasions to the wide-ranging studies that we have been undertaking with industry with the aim of properly examining our future fitness capability when the current ships begin to be phased out in the mid-1990s. The studies were initiated well in advance of the need to commence detailed design work, thus providing the opportunity to examine exhaustively all aspects of our future requirements and all militarily viable options. We expect to make a decision on the best way forward later this year.

Mr. Best

Is it right that the joint Chiefs of Staff have recommended total replacement of HMS Fearless and Intrepid with a view to enhancing our amphibious warfare capability?

Mr. Lee

With great respect, it would be entirely improper for me to comment on service advice that has been rendered.

In his opening remarks, my right hon. Friend the Minister of State for the Armed Forces referred to the Sea Harrier. Hon. Members will know that we are planning a mid-life update for the aircraft to maintain its ability to counter the threat for which it was originally designed until about the end of the century. The project definition contract with British Aerospace for the mid-life update was referred to in paragraph 439 of last year's statement on the Defence Estimates, albeit somewhat opaquely, and it has now been completed. As part of the mid-life update work, we are proceeding with the development of a new radar system for the aircraft. We hope to take a decision to proceed to full development of the mid-life update programme later this year.

No naval debate would be complete without the contribution—I say this in the nicest way—of my right hon. Friend the Member for Taunton (Sir E. du Cann) on hydrography and the merchant fleet. My right hon. Friend is not quite as persistent as my hon. Friend the Member for Twickenham (Mr. Jessel) is on the defence school of music, but he is a regular contributor to these debates. As he knows, I visited Taunton last year and witnessed the fine work that is done by the Hydrographer for the Royal Navy. The hydrographic department continues to provide invaluable service to seafarers generally.

The survey flotilla once again demonstrated its versatility with HMS Hydra's involvement in the evacuation from Aden. The new coastal survey vessel, HMS Roebuck, should be in service later this year. We clearly have a continuing requirement to carry out ocean survey work around the globe. This work can be done by royal naval survey vessels or by civilian experts working under the control of the MOD. The balance between those three resources must depend upon their relative cost-effectiveness. When we have more experience of contract and charter survey work we plan to undertake a review of the future size and shape of the survey flotilla.

The subject of merchant shipping was mentioned by a whole host of hon. Members, not only my right hon. Friend the Member for Taunton but the hon. Member for Clackmannan and the right hon. Member for Western Isles (Mr. Stewart). We have always recognised that merchant shipping is a vital defence resource and, as stated in last year's statement on the Defence Estimates, it plays an important role in our planning when considering our national requirements and NATO obligations. Those commitments require the use of merchant ships of a wide variety of types. The recent decline in the overall size of the United Kingdom merchant fleet has been monitored closely by the Ministry of Defence and the Department of Transport because we are aware that if the decline continues for several more years at the present rate, it would become increasingly difficult to discharge some of our NATO obligations. However, currently there are sufficient United Kingdom merchant ships available to meet our foreseen defence needs. The exception to that, as has been said, is certain types of trawlers for minesweeping duties. Studies are in hand to find alternative ways of meeting that requirement. Those studies will be completed in the spring.

I fully appreciate and understand the concern of my right hon. Friend the Member for Taunton but I implore him not to exaggerate the situation. He specifically talked about the Falklands operation. He is entitled to his view but I have to say that the Ministry of Defence believes that, in the unlikely event of another Falklands-type scenario, we could man a similar exercise. That is our considered view.

The hon. Member for Isle of Wight (Mr. Ross) referred to the subject of hoverships. The Ministry of Defence has been taking a close interest in new ship technologies but, as the hon. Gentleman knows, we do not currently see an operational role for such craft.

My right hon. Friend the Member for Taunton expresses concern over the future of HMS Endurance. That ship will undergo a major refit later this year and the work will give her an economic life extending into the mid-1990s. As that will allow her to continue her pattern of deployment in the Atlantic during this period, it would be premature to talk about a replacement.

I heard what the hon. Member for Linlithgow said on the matter of HMS Conqueror's logbook. Obviously, my Department and the new Secretary of State will read in Hansard what the hon. Gentleman said.

Mr. Dalyell

Will the Ministry of Defence reply to me as soon as possible if there are any mistakes of fact?

Mr. Lee

I shall certainly bring the matter to the attention of my right hon. Friend the Secretary of State. I cannot go any further than that tonight. I am sure that the hon. Gentleman will appreciate that.

I shall look into the matter raised by the hon. Member for Greenock and Port Glasgow about the allegation, or suggestion, of radiation illness at Coulport and Faslane. Obviously that is a serious matter and we shall look into it very soon.

I am more than happy to join with my hon. Friend the Member for Gosport (Mr. Viggers), as I am sure are all hon. Members, in paying a tribute to the backroom boys and girls who support our Navy in all the establishments, so many of which I know are in his constituency.

My hon. Friend the Member for Bristol, East (Mr. Sayeed) talked about his visit to HMS Brazen and the lessons learned from the Falklands. We have certainly learned many lessons from the Falklands campaign, particularly on fire resistant clothing, damage control and smoke control. I shall take his suggestion of a questionnaire on board.

I shall write to my hon. Friend the Member for Gosport and the hon. Member for Portsmouth, South (Mr. Hancock) on the matter of search and rescue from Lee-on-Solent.

The hon. Member for Clackmannan inquired about our plans for the possible conversion of the Atlantic Causeway into an aviation support ship. The aviation support ship remains a concept which is of interest to us but we are not yet in a position to decide whether it is sufficiently important to warrant a place in the full defence programme. If the project were to proceed, it would be our intention to seek competitive tenders from all interested firms. We would, of course, consider each tender on its merits and award a contract on grounds of best price and delivery terms. I am afraid that I cannot be more positive than that at present.

My hon. Friend the Member for Ynys Môn referred once again to the S90—the short fat ship—as did my hon. Friend the Member for Gillingham. We understand that Admiral Hill-Norton is to present his report on cheaper warships to the Prime Minister's Office some time this month. I cannot comment on the report until I have had the opportunity to study it. All the options were exhaustively examined in 1983, and I have nothing to add to the statement I made to the House on 1 November 1983. The way for the Ministry of Defence to ensure that it gets value for money is to proceed with the design it has. We shall accordingly start with follow-up type 23s this year, as I have intimated.

It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.

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