The Royal Navy

HC Deb 02 February 1987 vol 109 cc701-83

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

4.4 pm

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

The period since our last Navy debate almost exactly a year ago has been an exceptionally active one for the Royal Navy. In 1986, Royal Navy ships and submarines visited 86 different countries and sailed more than 3.5 million miles. They performed operational tasks in the Atlantic, the Caribbean, the Mediterranean, the Gulf, the Indian ocean and in the vicinity of Hong Kong. They carried out the first round-the-world deployment for 10 years and the first out-of-area amphibious exercise since the Falklands conflict.

The year also saw new ship orders to the huge value of nearly £2,000 million— including the first Trident submarine, the seventh Trafalgar class SSN, three type 23 frigates, three Upholder class conventional submarines and the first auxiliary oiler replenishment ship.

To the £2 billion-worth of new ship orders placed last year should be added a further £1 billion worth of other naval equipment orders placed last year, which represent a further substantial improvement to the Navy's operational capabilities.

If the Opposition try to criticise our level of expenditure on the Royal Navy, I think they will be most unwise. The reality is that in every one of the eight years that we have been in office we have spent more in real terms on the Royal Navy than was spent in any of the Labour and Lib-Lab pact years of 1974 to 1979.

In the current year we shall be spending over £1,000 million more on the Navy in real terms than was being spent in 1978–79. Over the last eight years we have spent, excluding Falklands expenditure, over £4,500 million more on the Navy in real terms than would have been spent if expenditure had been left at the level that we inherited in 1979, and at the end of the public expenditure White Paper period, 1989–90, we still expect to be spending significantly more on the Navy in real terms than was spent in 1978–79.

I suggest that instead of criticising the present Government, the Opposition should be reflecting on their own hugely inferior performance when they were in office.

A total of 55 major ships and submarines have been ordered by the present Government, representing orders worth more than £5,000 million. Those orders have included the start of no less than seven new classes of vessel— the Trident SSBN, the Upholder conventional submarine, the Type-23 frigate, the Sandown class single role minehunter, the River class minesweeper, the Castle class offshore patrol vessel and the new AOR royal fleet auxiliary.

Mr. Tam Dalyell (Linlithgow)

May I suggest that it would be helpful to the House if the hon. Gentleman's speech could include some reference to what allegedly happened in the Barents sea with the towed array sonar, so that we can discuss the matter on the basis of information rather than newspaper reports?

Mr. Stanley

We follow the practice of all previous Governments and there is no way that we could be drawn into commenting on submarine operations.

Mr. Martin J. O'Neill (Clackmannan)

I hope that the Minister will not prevent us from getting replies on matters involving submarine operations on which the Government have already commented and on whether newspaper reports stand up to close examination. We should like to explore those matters and I hope that the right hon. Gentleman will give us some answers.

Mr. Stanley

The hon. Gentleman is obviously free to pursue his inquiries in his own way.

Opposition Members will no doubt seek to dwell on ship numbers. Numbers are misleading because the acid test of the Royal Navy's well-being is not simply numbers, but its overall capability. Numbers are only one element, and not necessarily even the most important element, in capability. It is self-evident that we could have a Navy double its present size, but significantly less capable than the Navy that we have today. However, on the numbers issue, it is worth pointing out that there are more SSNs in the fleet than at any time previously and that that number will rise further.

It is also worth pointing out that, as a result of the significant improvements that we have made in ship utilisation, we have achieved a very marked increase in the proportion of the fleet— particularly destroyers and frigates—that are actually available for operations.

Defining availability as ships either at sea, or able to be at sea in under 48 hours, in 1979 the proportion of our destroyers and frigates that were available was on average about 72 per cent. of those in the running fleet. That figure has risen to about 84 per cent.

What is incontrovertible is that, although the Navy is now numerically somewhat smaller than it was in 1979, it is hugely more capable than it was eight years ago. One has only to compare the capabilities of the Navy's new ships and weapons with those that are going out of service.

The type 22 frigates are vastly more capable than the type 12 frigates and the gun Leanders that they are replacing. The Hunt class mine countermeasures ships are in a quite different league from the Ton class minesweepers, that they are succeeding.

Seawolf is a quantum jump on Seacat; so is the Lynx helicopter on the Wasp; and so is the Sea Skua anti-ship missile on the AS12 and SS11 that it replaces. The Trafalgar class submarines are much more advanced than our Valiant class SSNs, and our Upholder class conventional submarines are a leap ahead of the Porpoise and Oberon boats that they are replacing.

In the eight years the Navy's capability has made enormous strides—strides way beyond what would have been achieved if defence had continued to be given the relatively low priority that it had under our predecessors. If, in this debate, the Opposition want to compare our record with theirs, frankly they do not have a leg to stand on.

Mr. Keith Speed (Ashford)

My hon. Friend is right to draw attention to the increased capability of the ships of the Royal Navy. Will he tell the House, bearing in mind the number of ships that at any time have to be refitted, what he considers to be the minimum number of frigates and destroyers required to meet our force goals in NATO, to meet the Armilla patrol, to meet what is required in the Falklands—recently announced by my right hon. Friend the Secretary of State for Defence—the Belize guardship and the other duties that our frigates and destroyers have to do? There must be a minimum number that is required to discharge all those capabilities.

Mr. Stanley

As my hon. Friend well knows from his experience, we have carefully assessed our requirements in relation to our commitments. We have decided that a destroyer and frigate force of about 50 enables us to meet those commitments.

Even in peacetime the Royal Navy is first and foremost an operational force. Throughout 1986 a constant watch was kept on Warsaw pact naval ships and submarines and on their intelligence-gathering assets at sea. The Royal Navy continued to maintain the integrity of the 150-mile protection zone around the Falkland Islands—often in very severe weather conditions. In weather conditions sometimes no less severe, the Royal Navy's patrol ships maintained the important naval contribution to combating terrorist infiltration into Northern Ireland by sea. It also carried out essential fishery protection tasks in home waters. Our Armilla patrol ships have continued to maintain their presence in the vicinity of the Gulf and as the House will be aware, my right hon. Friend the Secretary of State recently announced in Oman greater Royal Navy support for British merchant shipping transiting the Gulf.

Throughout the past year the Royal Navy has also maintained our strategic deterrent at constant readiness as it has done every day of every year since 1969. Whatever the views of Opposition Members about the future of our strategic deterrent, 1 hope that on both sides of the House there will be an appreciation of those in the Royal Navy who discharge this key national defence responsibility. For those men while on patrol there are no port visits, no change of company, no change of scene, and no natural light or air. The officers and men of the deterrent patrols do a vital job in demanding conditions and for nearly 20 years they have done it outstandingly well.

Mr. Dick Douglas (Dunfermline, West)

Will the Minister give some indication of the rules of engagement in relation to the Armilla patrol? What instructions are offered to the commanders of the vessels in relation to escorting through the straits either way British registered and manned vessels and vessels on which there are British personnel?

Mr. Stanley

As the hon. Gentleman will be aware, we do not, for obvious reasons, particularly in an area where there is a potential threat, go into the details of our rules of engagement. However, those rules of engagement are appropriate and satisfactory for the defensive task that our Royal Navy ships have.

Mr. Ted Garrett (Wallsend)

I agree with the Minister's remarks about the devotion to service of the men serving in such a vital area of operation. However, in case it is not mentioned in the opening statement or in the reply to the debate, there are many people who are leaving and applying to leave from all ranks. Is that not an indication that there is something lacking in the quality of life? The quality of life is an important factor in the services and it is important if the high degree of loyalty is to be maintained. I warn the Minister, if nothing is done about that, he is heading for trouble with personnel.

Mr. Stanley

The rates for premature voluntary retirement, either for officers or men in the Royal Navy, are nowhere near those at the time of the previous Labour Government in 1978–79.

In addition to actual operations, Royal Navy ships have played a major role in the past year in a number of important exercises with our NATO allies, most notably Exercise Northern Wedding in which some 150 ships and submarines, 400 aircraft, and 35,000 men from 10 countries took part.

The Royal Marines, too, have continued to employ their specialist amphibious skills in major exercises in Norway, Denmark, northern Germany and out of area in Exercise Saif Sareea in Oman.

As the House knows, my right hon. Friend in his statement on 9 December 1986 made clear the Government's commitment to the maintenance of our amphibious capability and the modernisation of our amphibious shipping. As well as maintaining the high professional skills that would be required in war, those activities constitute an important element of deterrence by leaving no doubt about the determination and cohesion of the NATO Alliance.

Mr. Keith Best (Ynys Mon)

My right hon. Friend will know that I have tabled several parliamentary questions about this matter. I understand that the evaluation as to the extension of life of Fearless and Intrepid should be available some time this summer. However, an evaluation of whether there should be a replacement of Fearless and Intrepid will not be known for much longer thereafter. Does that mean that, inevitably, we shall see an extension of life for Fearless and Intrepid rather than the question of replacement?

Mr. Stanley

At present, those two alternatives are open. That is the object of the parallel feasibility studies that my right hon. Friend the Secretary of State has announced.

Mr. Denzil Davies (Llanelli)

While the Minister is dealing with Norway and the northern approaches, will he confirm— this is not just a Navy matter— that the Government are negotiating to end our commitment to Denmark in respect of the Baltic approaches, and say what effect that would have on the Navy?

Mr. Stanley

The right hon. Gentleman knows that that is certainly not the case. He will know from the answer that I gave on 20 January that we have made it clear that there is no question of any unilateral withdrawal of the United Kingdom mobile force.

As I said earlier, last year saw the first round-the-world deployment by the Royal Navy for 10 years. A carrier, three destroyers and frigates, an SSN and three RFAs took part in the GLOBAL 86 deployment which took Royal Navy ships to five continents and to over 20 different countries. Those included the first visit to Mozambique since independence, and the first visit to the People's Republic of China since 1980.

Those deployments are not simply exercises in "showing the flag" though the value of showing the flag should not be underestimated in areas such as the south Pacific, south-east Asia, and the Indian sub-continent.

GLOBAL 86 also enabled the Royal Navy to carry out valuable exercises with friendly navies in the Pacific with the United States, Australian, Canadian and Japanese navies, in the south China sea with our five-power defence arrangement partners, and with 5 Brigade and 3 Commando Brigade off Oman. The exercise benefits of GLOBAL 86 will be of lasting value. The defence sales element of the deployment will also certainly prove to be of real value.

The opportunity was taken to demonstrate to 17 different foreign navies and their Governments the capabilities of British warships and a wide range of their equipment. The companies concerned are in no doubt that the deployment was a great help to their sale efforts, improving several major sales prospects and attracting inquiries from previously untapped markets.

More than 100,000 people have jobs dependent to a greater or lesser extent on our defence exports. If the Labour party was to implement its policy of achieving a major reduction in Britain's defence sales, a significant proportion of those people would find their job security threatened.

Some 2,500 RN and RFA personnel took part in GLOBAL 86 at sea, whilst many others planned and supported the deployment at home. Over the entire nine months of that highly successful deployment, our sailors were acknowledged as superb ambassadors for our country and there was not a single untoward incident. Our congratulations go to all concerned with that deployment.

Our regular and volunteer reserves have an important part to play in our wartime capability. On 1 April last year we introduced a system of annual reporting for the Royal Fleet Reserve. It already shows encouraging signs of helping to improve contact with the regular reservists, thereby enabling the Navy to make better use of the skills and experience available within the Royal Fleet Reserve.

The expansion of the Royal Naval Reserve and the Royal Marine Reserve is continuing to go well. All 11 Royal Naval Reserve sea training centres are now equipped with the new River class of minesweeper—the first time that the RN R has been given responsibility for operating an entire class of ships in the fleet. We are most grateful to our RNR and RMR reservists for their commitment of time, enthusiasm and expertise to the Royal Navy.

A centrepiece of our future naval programme is Trident, which is making very good progress, as was reflected in the latest recosting announced by my right hon. Friend the Secretary of State last week, which, even after allowing for the effects of inflation and exchange rate variations, showed a real reduction in costs of £546 million over last year's estimate. I was sorry, but not surprised, to see that welcome announcement being greeted with unalloyed gloom from Opposition Benches. To add to their good cheer, I can tell the House that we expect to place the contract for our second Trident submarine later this year.

In the naval area, as for the other two services, the Opposition are committed to implementing a non-nuclear policy. I find their catch-phrase to justify their policy quite extraordinary. They say: The choice is effective defence; or reliance on a nuclear delusion. I fail to see what can possibly be illusory about the 40 years of peace with freedom that we have enjoyed, secured by combined nuclear and conventional defence. If the Opposition really want to claim that non-nuclear defences alone will guarantee our independence in the future, I suggest that they might start by asking the peoples of eastern Europe and Afghanistan.

Mr. Best

My right hon. Friend will know that when the Leader of the Opposition went to the United States, he found there no support whatsoever for a unilateral nuclear disarmament policy. He will also know that a large number of NATO countries have openly condemned it. Is he further aware that only recently we heard from Moscow that even the Soviet Union is not in favour of the Labour party's policy on disarmament?

Mr. Stanley

I am grateful to my hon. Friend. I have read the reports to which he refers.

The consequences of a non-nuclear policy in the naval area would be wide-ranging and immensely damaging. It would mean the end of Britain's strategic deterrent and the loss of the British people's ultimate insurance against nuclear blackmail. It would mean Britain unilaterally resiling from its NATO tactical nulcear roles at sea, thereby weakening deterrence at a time when the Soviet navy and the Soviet naval air force are steadily expanding their ability to use tactical nuclear weapons against NATO surface ships and submarines.

In Scotland, Labour's non-nuclear policy would mean the closure of Holy Loch, the loss of up to 2,500 jobs being created by the Trident construction programme at Faslane and Coulport, and the immediate loss of the entire SSBN refitting cycle on which over 2,000 jobs at Rosyth are currently dependent.

The Labour party's commitment is, of course, not merely to scrap Trident, but to do away with Polaris. That Polaris commitment is absolutely senseless. Polaris, thanks to its secret modernisation with Chevaline, ironically by the previous Labour Government, is still viable as our deterrent and in relative terms it costs very little indeed to run.

The commitment of the Labour party to scrap Trident is seriously mistaken and highly irresponsible. The commitment to scrap Polaris is pure political vandalism. In the maritime sphere, a British non-nuclear policy is opposed by NATO, has been condemned across the political spectrum in the United States, and is profoundly destructive of Britain's own defence interests. I am confident that such a policy will be roundly rejected by the British people.

We welcome the commitment of the Liberal and Social Democratic parties to the continuation of Britain's strategic nuclear deterrent notwithstanding the reluctance of the split Liberal party to give such a commitment. We are sorry not to see any of the Liberals in their place. What is disappointing, however, is that although the Liberal and Social Democratic parties have got their policy objective right, they have got their means of achieving it sadly wrong.

In opening the Liberal Supply day debate on defence on 3 December, the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel), when speaking of the options for replacing Trident, said: the precise weapon systems are the ones that should be made and chosen by the Government in office at the right time. It is not for Opposition parties to decide, clouded as they are with conflicting advice and denied information available to Government. I am glad to see the Secretary of State nod agreement".—[Official Report, 3 December 1986; Vol. 106, c. 990.] Of course we nod agreement to the sensible recognition by the right hon. Gentleman that only the Government of the day, with the information that they alone have are in a position to decide what is the most cost-effective means of maintaining a credible minimum deterrent for Britain. The right hon. Gentleman then went on to spell out no fewer than six separate Liberal options for the replacement of Polaris. We shall be interested to see whether the hon. Member for Woolwich (Mr. Cartwright) will be offering six options today, and whether they will be the same options as those of the right hon. Member for Tweeddale, Ettrick and Lauderdale. But none of the Liberal options included Trident; indeed, extraordinarily, the right hon. Gentleman made it clear that the one option that he ruled out was Trident.

The Liberal and Social Democratic parties are therefore in the totally contradictory situation of being completely uncertain as to which option for the replacement of Polaris they will support, yet totally certain that it will not be Trident. It is an absurd and unsustainable position. All it confirms is what we have known all along—that the Liberal-SDP position on the key national issue of the future of Britain's deterrent has been determined not by a rational, objective and dispassionate assessment of the facts, but by prejudice, horse-trading and fudge. The stated Liberal and SDP reasons for ruling out the Trident option vary, like most of their policies, week by week, month by month, constituency by constituency and leader by leader. But there are three strands of anti-Trident argument that they generally advance—that Trident is too big, that Trident is too expensive and that Trident is too American. I shall examine each in turn.

First, it is alleged that Trident is too big. In the open government document "Trident and the Alternatives" that we published last week, we made it clear that the number of Trident warheads will, contrary to some of the hugely inflated figures that have been bandied about, be at most—I stress, at most—only some two and a half times greater than Polaris when it first entered service. That has to be seen against the fivefold increase in Soviet strategic warheads since 1970 and steadily improving Soviet defences, which did not even exist at that time.

It is frankly ludicrous for the Liberal and Social Democratic parties simply to ignore the inconvenient fact of life that Soviet defences are improving significantly. Yet that is what they did in their relaunch for the nth time last week, when they committed themselves to freezing our strategic nuclear capability at a level no greater than that of the Polaris system. There is no justification for simply turning a blind eye to improvements in Soviet anti-ballistic defences. If Opposition Members want to back a cruise system, there is even less justification for turning a blind eye to improvements in Soviet anti-cruise defences when those improvements are totally unconstrained by the ABM treaty.

We have made it clear repeatedly, and I stress it again today, that Trident continues to represent only a minimum deterrent for the United Kingdom. I also respectfully suggest to the House that if there is one aspect of this sensitive area on which the Government of the day, and the Government of the day alone, are best able to make the correct judgment, it is as to what constitutes the minimum deterrent for Britain.

However, if right hon. and hon. Members of the Opposition wish to back their judgment of what constitutes a minimum deterrent for Britain against that of the Government, that is still no justification whatever for ruling out the Trident option. Trident is not a fixed capability. It is a flexible capability. The number of missiles and the number of warheads can be varied. If one wants to vary one's minimum deterrent assessment, one can do so, and that is why the Liberal-SDP argument for ruling out Trident on the grounds that it is too big holds absolutely no water.

The next argument is that Trident is too expensive. We do not hear too much these days from the Liberal-SDP Benches about their alternatives to Trident being a lot cheaper, and I understand why. For instance, I noted that the right hon. Member for Plymouth, Devonport (Dr. Owen) in his recent New York speech said of his French alternative: I have already frankly admitted that such a French purchase is unlikely to be cheaper than Trident". Nearly £3,000 million of Trident expenditure is now contractually committed, of which nearly £1,000 million has been spent. So to the costs of any alternative to Trident must now be added the money down the drain that the cancellation of Trident will necessarily involve. In the "Trident and the Alternatives" open government document, we thought it right to update the cost implications of switching to alternatives to Trident at this stage. As is shown in the paper, a switch to a French ballistic system has all the potential to cost the United Kingdom considerably more than the procurement of Trident D5 while a United Kingdom minimum deterrent based on either sea-launched or air-launched cruise missiles would be likely to be about double the cost of Trident. The Liberal-SDP alternatives to Trident, far from being cheaper, will be significantly more expensive. The alliance has no case therefore for ruling out Trident on cost grounds. Indeed, costs positively add to the case for maintaining the Trident programme.

Sir Geoffrey Johnson-Smith (Wealden)

Can my right hon. Friend confirm to the House whether there is any intention by the present French Government seriously to consider an Anglo-French nuclear deterrent?

Mr. Stanley

That is a matter to which the French Government would have to respond. As we have made clear in our open government document, there are extremely important issues of timetabling and we are wholly satisfied that, whatever the merits of a French system, that is simply not compatible with our requirement to replace the Polaris system in the mid-1990s.

Finally, as the arguments about Trident being too big and too costly have been shot through, the argument about Trident being too American has, in a certain desperation I feel, been played more stridently not least by the right hon. Member for Devonport, when he was in the United States the week before last.

I was disappointed and somewhat disturbed by the right hon. Gentleman's speech in which he likened the Atlantic relationship to "curdled mayonnaise". I must teal the right hon. Gentleman that, in our view, the Atlantic relationship is most certainly not curdled and that there is no benefit to Britain, certainly not in defence, in knocking our relationship with our most important ally.

Dr. David Owen (Plymouth, Devonport)

Does the right hon. Gentleman consider a normal relationship between two partners to be one in which the President of the United States can go to Reykjavik and commit himself to negotiate abolishing all ballistic missile systems without consultation with his principal allies, France and the United Kingdom, which are at present committed to a system of ballistic missiles?

Mr. Stanley

The most telling evidence that the Atlantic relationship between this country and the United States is not curdled is that my right hon. Friend the Prime Minister went to Camp David in November and secured an unequivocal assurance and commitment from the American President to honour the Trident commitment.

As far as Britain's Trident programme is concerned, I am disturbed by the doubts that the right hon. Member for Devonport now seems to be casting regularly on the extent to which we can rely on our United States allies to honour their obligations under the Trident arrangements. The argument that he seems to be advancing is that, while our French allies could be relied on to deliver a French contribution to the British nuclear deterrent in all circumstances, our United States allies could not be similarly relied upon. Quite apart from that being a poor reflection on the United States, it flies in the face of all the evidence.

Our strategic deterrent arrangements with the Americans have been well tried and well tested over more than 25 years. Successive United States Administrations have honoured, and honoured in full, the terms of the Nassau agreement between the then Mr. Macmillan and President Kennedy. The present Trident arrangements were made with President Carter and have been continued by President Reagan. As I said a moment ago, only last November at Camp David my right hon. Friend the Prime Minister received an unequivocal and unqualified assurance from President Reagan of his full support for the arrangements made to modernise Britain's independent nuclear deterrent with Trident.

There is therefore no valid basis for the Liberal-SDP parties to rule out Trident on the grounds that it is too American, any more than on the grounds it is too big or too costly. The fact is that, where the nuclear threat is concerned, the Liberal and SDP parties are offering inadequate defence while the official Opposition are offering no defence at all. Neither meets the defence needs of the British people.

The Royal Navy enters 1987 with expenditure at record levels in recent times, with seven new classes of ship and submarine ordered, and with abundant evidence of very high levels of skill being achieved under the sea, on the surface and in the air. We are grateful to all those men and women serving in the Royal Navy for contributing to the high esteem in which it is held around the world—and most deservedly so.

4.36 pm

Mr. Martin J. O'Neill (Clackmannan)

Any debate on a one-line Whip on a Monday is unlikely to secure a packed Chamber. Regular participants in service debates are members of a fairly small and exclusive club. The Minister of State and his advisers know their audience and over the years speeches have tended to follow the same format: there is a tour d'horizon of the Navy's role and praise for the undoubted professionalism of the men; a nod in the direction of the United States allies; a reiteration of the case for the independent deterrent; castigation of the SDP-Liberal allance for its current attitudes; an overblown assessment of the Soviet threat; usually a thinly veiled attack on the Labour party for its lack of patriotism; and finally, the MOD speech-writing word processor's version of "Land of Hope and Glory".

I wrote those words before the Minister of State spoke and I am relieved to see that my powers of prescience have not been diminshed in any sense. Cynics may say that the only real variants in these debates are the contributions from the Social Democrats and the Liberals, so the real specialists in these matters are those who can discern whether the right hon. Member for Plymouth, Devonport (Dr. Owen) is inching closer to the sea-launched cruise option, whether he will come out in favour of rejecting Trident regardless of the date of the election or whether he accepts the cancellation charge argument. I do not know whether we are to be spared a speech from the right hon. Member for Plymouth, Devonport, but I imagine that the predicament of the alliance spokesman today will be evident for all to see.

Recent events have highlighted certain questions that require clear answers from the Government. The House is entitled to know what HMS Splendid was doing in the Barents sea. It is entitled to know the terms of the Trident cancellation clauses and the significance of the worthwhile and welcomed announcement of the £500 million savings in the Trident programme. The House is also entitled to know in this, the last of the three service debates, the significance in defence procurement terms—I understand that the Under-Secretary of State for Defence Procurement will be replying to the debate—of the story that appeared in yesterday's Daily Mail about the fate of the Zircon project. We all know the limitations on questions about such topics, but as it is a sensitive issue and Ministers are always at pains not to blur issues by answering questions too succinctly, perhaps the Minister in his characteristically obfuscatory manner can give us some idea of what is happening with the Zircon project.

The Minister mentioned operations in the Gulf and the world trip that took place last year. We recognise the necessary evil of having men and ships in the Gulf to protect our merchant fleet, and we recognise the courage and commitment of our troops in that area and the help that they give to merchantmen in great difficulty.

Dr. Alan Glyn (Windsor and Maidenhead)

How can we get British ships flying foreign flags back into commission if there is a crisis?

Mr. O'Neill

I shall deal with that a good deal later in my speech. The hon. Gentleman may care to wait until then.

In 1983 SACLANT said that NATO forces were in danger of being outgunned in the Atlantic. The Government must give us a clearer justification for the exercises in the Indian ocean and the round-the-world trips. It is misleading for the Royal Navy to go into those waters and to suggest that we can support those people in times of difficulty when the supreme commander of the NATO Alliance says that we could not release craft from the eastern Atlantic to fulfil that role.

In The Independent on 21 November, Christopher Coker said: The exercise in the Gulf is not about out of area security at all. It is really a debate about the still uncertain future of the surface fleet. Sailing to foreign climes is a dramatic way not only of restoring service morale, but persuading the public that large surface ships arc still invaluable in the modern era. The honouring of such commitments to other countries would require a Navy far in excess of the 50 warships that were mentioned this afternoon. It would certainly require a Navy far larger than the one which the rate of ordering would provide. The rate would probably have to be doubled, which would imply a trebling of the rate of commissioning of naval escorts that has prevailed since 1979.

As important as the craft which the Navy has at its disposal is the problem, mentioned by my hon. Friend the Member for Wallsend (Mr. Garrett), of men leaving the services. In his book "British Warships and Auxiliaries", Michael Critchley said: More and more experienced men are leaving the Royal Navy because of too long separations from wives and families. Since warships are now refitted at Devonport or Rosyth, many men live considerable distances from the yards. The book states that many people live some distance away, but not far enough— 200 miles— to qualify for travel warrants. It is causing considerable difficulty for family stability. The book also states that between April and December 1985 leaving increased by about 20 per cent. over the figure for the previous year.

The failure to replace older ships means that ships such as Fearless, Intrepid and those in the Leander class, which require larger crews, are being kept in service. That will get worse. More than 30 per cent. of our frigates and destroyers will be more than 25 years old by 1990.

Mr. Speed

Knowing the Labour party's hostility to nuclear power plants and to the proposed pressurised water reactor at Sizewell, may I ask the hon. Gentleman whether, if the Labour party came to power, it would continue nuclear-powered submarines which have pressurised water reactors as their main propulsion power?

Mr. O'Neill

Yes, we would continue them.

Because of the time that it takes to refit older ships, sailors will be at sea for far longer periods. At present, they are at sea for about 19 to 24 months. The present outflow of men is far more serious than was the outflow in the 1970s, when there were problems with pay. At that time, there was a pay restraint problem for everyone in the public sector.

The Navy is losing its most valuable and experienced trained personnel. Some ships have only half their complement of seamen officers. On 10 frigates, there is only one principal warfare officer running the nerve centre of the operation. The Navy is short of 85 of those men, who control all the missiles, guns, torpedoes, radar, sonars and decoy systems. The Fleet Air Arm is 30 per cent. short of Sea Hunter Harrier pilots. Overall, the Navy is about 10 per cent. short of officers in all branches, especially pilots, observers and engineers. The position is very different from that in the 1970s. Unemployment was far lower than it is now and we are led to believe that there are now no difficulties with service pay. If there are, they will no doubt be corrected at the expense of other parts of the defence budget.

The problems of morale are created by the unsatisfactory working conditions to which the Minister referred and because the Government will not put adequate resources behind the men to give them the support to which they believe they are entitled. The impact of Trident more than anything else is restraining expenditure on new equipment. The Government must accept that the cost of Trident will vary over the next decade, that it will reach its peak in 1989–90, that spending on new equipment will fall by 30 per cent. in real terms between 1984–85 and 1989–90 and that by 1989–90 Trident will account for about 24 per cent. or 25 per cent. cif expenditure on new equipment. It is not enough to say that we should divide the cost of the programme over the entire development period and obtain an average. The continuing and consistent crisis of funding in the Royal Navy has been created in large measure by the Government's commitment to Trident.

We welcome any reduction in the cost of the Trident programme, but I hope that the Under-Secretary of State for Defence Procurement will be a little more specific about where those cost reductions will be made and how long he expects the figures to stand up. Although the contract is not open-ended, it has so many different parts and there could be difficulties. It would be misleading to seize on short-term savings when there might be longer-term costs about which we have not been told. We want to know which parts of the programme have benefited from the savings and where those savings will be transferred in the general budget.

If the Government continue to tell us about the impact of cancellation, we must have answers to those questions. We know that savings may well be brought about by concellation, but the Government have chosen to obscure the issue. We know that by March 1986 about £680 million had been spent and that between £1,400 million and £1,700 million will probably have been spent by June this year. This leaves about £8 billion which might be saved if there is a June general election with the return of a Government committed to ending Trident.

If that saving of £8 billion can be achieved we shall be able, if we wish, to purchase about 30 type 23 frigates arid pay their running costs for 20 years. That sum would cover manpower, spares, repairs, fuel, refitting, and so on. It would allow an increase of about 15 per cent. in the size of the United Kingdom fleet of destroyers and an increase of about 20 per cent. in the NATO maritime forces in the eastern Atlantic. I quote those figures merely as an example— the Labour party is not committing itself to using all the resources in that area. As this is a Navy debate, I have given an example of what could be achieved by savings in this area. It is considerably more than the figures that were thrown about by the Government when they have talked of limited areas of savings and limited uses of funds.

The amount of money that appears to be spent on reimbursing Vickers can take a variety of forms. Indeed, it is strange that, before Vickers was privatised, the local management were confident that they could switch quite easily to other work. Indeed. they were so confident that they stated in the company's prospectus that they were satisfied with the assurances given by the Labour party that a future Labour Government would sustain employment and went out of their way to mention it when they were trying to win support in the City at the time of privatisation.

When Conservative Members express concern about the fate of Barrow, one wonders whether they have heard of any of the other parts of the country that have suffered as a result of the Government's defence policy, whether it relates to the naval dockyards in Rosyth, Devonport, on the Tyne or on the Clyde. I know that Labour Members wish to raise these matters, not least the problems relating to the Swan Hunter dockyard whose staff have been given repeated promises that something will happen in the long run. As we all know, in the long run men are retired or are made unemployed, never to be able to get back to work again.

We hope that the Minister will tell us a little more about the command and control systems for the type 23s, and the problems that seem to confront the Ministry in deciding which system is the most satisfactory, the state of competitive tendering and whether it will delay bringing into service the first of class that we know is being built at Yarrow's. From the signs that we get from the Government, the more time that passes the more the towpath papers of last September begin to look like a Defence White Paper.

We recognise that if the Government are not prepared to order any more frigates there are opportunities available to sell frigates to the Australian Navy. We hope that the greatest effort will be made by the Government to realise prospects outlined in the 15 January edition of The Times, which stated clearly that there is a tremendous opportunity for a frigate based on the type 23 to be built in our shipyards for the Australian Navy. There will be tough competition, and we shall have to take account of it. Assistance and support of every kind must be provided so that British yards can respond to perhaps the biggest challenge of the second half of this decade in terms of foreign orders.

It is perfectly right and proper for the warship building and defence industries to go out into the world and sell their products. We make one qualification, which relates to the customers to whom the products are sold. The thrust of Labour party policy on defence sales is that we do not believe that the criterion to be applied to the sale of arms is whether the purchasers are enemies of those whom we regard as our enemies. The ability of the purchaser to pay for the arms and to use them to exacerbate local difficulties and repression must also be taken fully into account, but successive Governments have not done so.

The Labour party document, which the Minister frequently chooses to attack, is consistent and correct. We in no way seek to undermine the British defence industry. We should like it to be backed in every possible way in the area that I have mentioned so that if orders are open the project arises for the sale of frigates to Australia. That opportunity should be seized and backed not only by the Ministry of Defence but by the Department of Trade and Industry.

We cannot afford to ignore the significance of the maintenance of the fleet, its refitting and repair, which has been a source of national pride over the years. Everyone has recognised the tremendous contribution that the naval dockyards have made to the strength and capability of our fleet. It is depressing and sad that those yards are to be not only contractorised but cut back, with substantial redundancies.

Perhaps the greatest insult of all is the handing over of responsibility for the lead in the Devonport contractorisation to an American-led consortium. It seems that no organisation anywhere in British industry is capable of undertaking this type of work. The only firm prepared to assume responsibility for it is thus one that is prepared to find most of its resources working for the Libyan Government. Indeed, I am led to believe that when the Minister was asked last week about the significance of Libyan business he told trade unionists that he would be quite happy for Libyan work to be done in Devonport dockyard. Perhaps he will confirm that statement. I merely report a conversation that was referred to me.

The Parliamentary Under-Secretary of State for Defence Procurement (Mr. Archie Hamilton)

We are concerned about getting extra work into the dockyards. If work were to come from a Libyan irrigation plant, I should think that the people in Devonport dockyard would be delighted.

Mr. O'Neil

We know that one of the least attractive features of Devonport dockyard is its extensive nature. It might be possible to hide irrigation work in one part of the yard, but there would be security problems and local people would be outraged if people from Libya went into the yard and intruded on their work. That would be regarded as extremely offensive. Certainly, with all the other aspects of contractorisation, it would undermine the good relations that have been the hallmark of industrial relations in the yards. We shall return to this tomorrow. Doubtless, however, other matters relating to financial advantage will be raised. The only frank statement from the Government or their agents was made to the Select Committee by the hapless civil servant who said that, at best, the strategy was a high-risk one. Many hon. Members are not convinced about the economic and financial arguments that have been advanced to justify contractorisation.

Many of us are anxious and worried, and not only about the shipbuilding and repairs industry at present. Today. many hon. Members received communications from Westland. We have read reports in The Independent and other newspapers expressing grave doubts about the parlous state of Westland. The delay in ordering the EH I01 is most unfortunate. Of all three services, the Navy has used the helicopter to the greatest effect. The United Kingdom-Netherlands amphibious force consists of 7,600 British Marines and 2,900 Dutch marines. It is entitled to expect to be provided with something better than the 30-year-old Wessex and the Sea King.

As for our responsibilities in Norway, we must speed up the endless feasibility studies on the replacements for Fearless and Intrepid. Serious problems will arise if we adopt the refit option. The major problem is that amphibious craft take a long time to refit, and far larger crews are required than are needed in modern replacements. Furthermore, the refit option would result in putting off for a considerable period the real decision that has to be taken. Converted commercial ships are not the answer. We need two purpose-built amphibious vessels capable of offloading a heavy tonnage of equipment in as short a time as possible. They will be reinforcing an area that is only 80 miles from Murmansk in the Soviet Union. Amphibious vessels are vulnerable and speed is of the essence. It is quite wrong that our crack troops should have to depend on second best when, with a bit of guts and courage, the Government could find the money to produce something that really meets their needs.

Mr. Best

The hon. Gentleman will know of the view of Sir Steuart Pringle about the need to provide a 300-man initial lift by helicopter. Is he committing his party to aviation support ships?

Mr. O'Neill

We are anxious that the Royal Marines should be given the best possible support as early as possible, but the Government are delaying making the choices that we believe are necessary. The hon. Gentleman will appreciate that I cannot give assurances on an order amounting to about £1 billion, but the Labour party would accelerate the decision-making process and not hide behind feasibility studies. If we felt that we could not do it, we would not do it. I do not speak for the rest of my hon. Friends on the Front Bench, but I believe that it is a disgrace that the Royal Marines are not being given the kind of backing that they deserve and that their major strategic role requires. That is a widely held view in my party, but it is not a view to which I wish to commit the party. A decision should be taken urgently by whichever Government wins the next general election. If there is an early general election, I hope that the decision will be made by a Labour Minister by this time next year at the very latest.

The Minister ought to have referred to other types of equipment. It would have been helpful if the Minister could have been a little more forthcoming in his opening speech. It would have led to a more constructive debate. We should like to hear about the light gun replacements. The order for light guns has been reduced from 50 to 25, which will greatly inhibit the capability of British ships in harbour to protect themselves. They have to depend on guns such as the Bofors gun, which for older hon. Members will bring back memories of the second world war.

It is surprising that in a debate on the Navy the Minister did not refer to the controversial subject of torpedoes. There have been reports that Spearfish is now being handled in a manner that will lead to the best value for money in the shortest possible time, but responsibility for the control and development of Spearfish still seems to be in the hands of five different heads of department in the Ministry of Defence. The same difficulties as applied to Tigerfish seem to apply now to Spearfish. I hope that the Ministry of Defence has not forgotten the tragic experience with the Tigerfish torpedo and that the Minister's news about torpedoes will be better than many hon. Members expect.

I have concentrated on the men and ships in the Navy, but I wish to refer also to an essential but, sadly, often unsung sector of our fleet—the Merchant Navy. Again it is inconceivable that a Minister should make a speech about the Navy but say nothing about the Merchant Navy. It is not good enough to transfer responsibility for it to the Secretary of State for Transport. As our share of world trade, the number of ships flying the British flag and the number of British seafarers decline, this Government must be castigated for their complacency. The balance of trade may be miraculously saved by the City of London, but the bitter irony is that London's docklands are inhabited no longer by the dockers, the seamen and the plethora of traders who built up our commercial and industrial strength, but by the get-rich-quick brigade who have sold Britain short and seem not to understand how desperately we need the backing of a Merchant Navy. It is ridiculous that those great warehouses should have been turned into ritzy apartments for people who turned a blind eye to the requirements of Britain's trade and manufacturing industry.

Like the seafarers' unions—the National Union of Seamen and the National Union of Marine Aviation and Shipping Transport Officers— and the right hon. Member for Taunton (Sir E. du Cann), who expressed himself so fiercely in a recent Bow Group paper—we believe that far more must be done than the feeble gestures announced by the Secretary of State for Transport just before Christmas. We shall observe carefully the impact that the Merchant Navy Reserve, the training assistance and the repatriation have on the service. We do not believe that it will help very much.

I do not wish to be churlish and say that we do not want these things from the Government, because anything is better than what they have provided in the past six or seven years. It is not a party political controversy. The only people out of step are the Government. Sadly, on many other issues, too, the Government are out of step with the rest of the population. Nobody has a monopoly of concern, but in this twilight zone between the Ministry of Transport and the Ministry of Defence the Government seem completely indifferent to our national needs. There is no shortage of advice, prescriptions, or consensus, but the Government choose to ignore them, as the Minister showed in his failure to address the issue.

Another area in which there is a fair amount of consensus on both sides of the House is our concern for the services. We do not doubt the intention and desire of all parties to defend our country, but we question the methods that should be used to defend it. I realise that this evening there will be no satisfactory response to the recent reports about lost sonar equipment—it may or may not be significant, and it may or may not be in the Soviet Union's possession—but it is important that we hear today what HMS Splendid was doing in the Barents sea. All that we have to go on at present are statements in Defence Estimates and the information currently available to us.

In 1981, under the heading, Provision of Anti-Submarine Support for the NATO Strike Fleet", we were told: The United Kingdom makes a major contribution to the anti-submarine defence of the NATO Strike Fleet Atlantic, allowing the United States strike carriers to concentrate on their air defence and strike/attack roles, which are of key importance on NATO's Northern Flank. That appeared on page 25 in the chapter "Conventional Forces". Under the heading Protection of United Kingdom and NATO Merchant Shipping", it continued: In tension or in war most of our surface vessels and dl our submarines and maritime aircraft would be committed to the Alliance. Paragraph 332 states: Our maritime forces are primarily designed for antisubmarine warfare, as the most dangerous threat is from Soviet submarines. In 1984, in paragraph 429 under the heading, Maritime Tasks: The Eastern Atlantic and Channel", we were told: NATO maintains a substantial maritime presence in the Eastern Atlantic and Channel areas. Given our geographic position at the focus of the busiest sea-lanes in the world and close to the main route for Soviet naval forces deploying to the Atlantic, it is appropriate that we should make a major contribution to that presence. The United Kingdom provides 70 per cent. of the forces involved. In the time available, that was all that I could find out about the deployment of forces in the north Atlantic.

The proceedings of the United States naval college 1986, however, carries an article entitled Maritime Strategy from the Deckplates by Vice Admiral Henry C. Mustin of the United States Navy. He states: We restructured both the national and NATO fleet command organisations, to improve the inter-command relationships necessary to fight a NATO war in the Norwegian Sea. This has involved—among a number of other arrangements for improved co-ordination with NATO area commanders— the creation of a new Striking Fleet organisation, which elevates a Royal Navy Antisubmarine Warfare Commander in the Fleet to the status of a Principal Subordinate Commander in NATO, and which re-emphasises the roles of the United States Marines and the combined United Kingdom-Netherlands landing forces. The language is oblique, but it is clear that there has been a shift in the British contribution to NATO maritime strategy. Traditionally, the main function of the SSNs has been to protect the sea lanes and to watch over the Greenland-Iceland-Norway gap. It has never been clear that we should be locked into United States navy offensive strategies as part of our naval role.

We provide about 70 per cent. of naval forces in the eastern Atlantic under the control of SACLANT. We know that the Soviet navy regards its two main roles as being to protect the shores of what it chooses to call the motherland, and to maintain and protect the SSBNs—its principal means of second strike. If the United Kingdom—and, I presume, the United States—have a presence in the Barents sea, that will surely threaten the security of the Soviet Union's SSBNs, increase the threat of a Soviet first strike and thus threaten crisis stability. In terms of NATO-Soviet relations at such a sensitive time, when we are supposed to be close to reaching an accommodation with the Soviet Union— there has already been the prefacing of the Prime Minister's visit to Moscow—it is foolhardy to be blundering around in the Barents sea.

There seems to have been a major change. Until now we have not been aware of British boats being involved around the Kola peninsula. It is difficult to distinguish between SSNs and SSBNs. There are always problems with sensitive submarines. The Minister is far less forthcoming than his NATO allies on the other side of the Atlantic would be in similar circumstances. It is necessary for the Government to admit that there has been a change in British involvement in the NATO strategy. There would be problems if any of our SSBNs—the Polaris fleet—were in that area. There are problems with the command and control system. Plans are afoot for the trial of the extremely low frequency radio systems.

The Government must be more forthcoming about these issues. The Government's over-secrecy and paranoia on so many issues pollutes and distorts the very basis of discussion on defence matters. We have to look to the Americans not only for our next generation of nuclear weapons, our early warning system and the control of our dockyards, but for vital information about the deployment of our own troops and resources.

We recognise that there is a role for all partners in NATO. The Labour party is committed to what is known as our non-nuclear role. That will still enable us to contribute 70 per cent. of the eastern Atlantic fleet and to work in tandem with the United States and with other countries in continental Europe. The Government's commitment to the Trident missile system, with its drain on our resources, and their failure to appreciate the need to replace and restore the ships and the morale of our Navy, jeopardises that commitment. Instead of having a Navy of which we can be proud, we have to fight for that Navy against a Government whose interests do not seem to be in line with those of the Navy or of any of our armed services.

The Government take a narrow and distorted view of what a nuclear war might involve, and they are taking steps which, as in their activities in the Barents sea, rather than seeking to avoid nuclear war, actually exacerbate the possibility and bring it closer. The Government have not been clear and effective in terms of the Navy's future or in their support for the men and women who contribute to our defence.

5.20 pm

Sir Edward du Cann (Taunton)

I am sure that the House is grateful to the hon. Member for Clackmannan (Mr. O'Neill) for giving such prominence to the merchant fleet in his speech. As he so rightly said, anxiety about the fleet goes across party lines and is felt deeply in all quarters of the House. I am grateful to him for the kindly personal reference that he made to me.

It is traditional that we devote three days a year to debates on Britain's defence services, but I believe that it is time for us to come up to date with our proceedings. It would be more appropriate to provide five days for the debates, with three days for the armed services as at present, the Royal Navy, the Army and the Royal Air Force, and the fourth and fifth days devoted to other aspects of the nation's defences that are no less significant in the general scheme of things than the armed services of the Crown, such as the merchant marine and civil defence. Both these issues are shockingly neglected at present. We shall continue to neglect them at our peril. We_ discuss them too rarely and it is time for the House to sound the alarm bell in respect of both.

The merchant marine is the fourth arm of Britain's defence. My right hon. Friend the Minister of State, to whom we listened with such interest earlier this afternoon, spelt out the merchant marine's duties in wartime in the evidence that he gave to the Select Committee on Defence during the 1984–85 Session, a few months ago.

To put it shortly, he said that its duties would be to provide transport across the Channel, transatlantic reinforcement resupply to the continent of Europe and support for the Royal Navy. It follows that if the Merchant Navy is weak, our country's defence strategy cannot be credible, and weak it most certainly is. Let it not be forgotten that if there is a reduced Merchant Navy, a question mark must arise over the raison d'etre of the Royal Navy, one of its primary duties being to protect our merchant fleet.

Let us consider the number of ships on the British register. I think that the figures are well known to every hon. Member. The merchant fleet's tonnage has fallen by 78 per cent. since 1975 and by 70 per cent. since 1980. It fell by 12 per cent. in August 1986 alone. The size of the fleet has halved in only two and a half years. There are 66 per cent. fewer vessels now than in 1975. The number of ships has fallen by 52 per cent. since 1980 and the fleet has halved in size during the past five years. Similarly, there has been a huge decline in the number of seafarers. The number of men at sea in August 1986 was well below 30,000. I learned these figures from an answer to a question that I tabled a few days ago. The number of seafarers has fallen by 63 per cent. since 1975, by 52 per cent. since 1980 and by 10 per cent. in the first eight months of 1986.

It is suggested too often that we should attend to the defence of our national interests only during emergencies. I assert that defence should be as much an issue in peacetime as ever it is in wartime. Our struggle to defend Britain's interests must continue in peacetime and must be maintained with the same strength as that which applies in wartime.

We have seen a huge decline in the United Kingdom's share of seaborne trade carried in United Kingdom flag ships. The volume of United Kingdom seaborne trade has grown by 20 per cent. in the past decade, but the United Kingdom's flag share has fallen from more than 33 per cent. to less than 25 per cent. The risk is that Britain in peacetime could be held to ransom by its enemies if they set their minds to it. Another example: fewer than half the ships servicing our offshore oil installations fly the red ensign. The dangers are obvious. As I have said, it is no less important to defend Britain's interests in peacetime than in times of emergency.

To put the matter at its mildest, there must be doubts whether the British merchant fleet is adequate to fulfil the roles that Ministers foresee for it in time of conflict as they define them. I emphasise "as they define them" because it seems that my right hon. Friend's catalogue is incomplete. The ships for all the purposes for which the Navy would need them in an emergency do not exist, nor do we have the trained personnel to man them. In wartime, and even in an emergency less than a state of full conflict, many ships would be needed for vital tasks additional to those that my right hon. Friend quoted. For example, in addition to supplementing the Royal Fleet Auxiliary, we would need a huge number of ships to act as force multipliers, such as minesweepers, mine countermeasure vessels, harbour protection vessels and patrol vessels. There would be 100 other tasks in augmentation of the Royal Navy.

There are hon. Members present in the Chamber who served, as I did, in the Royal Navy—in the war. I spent only a short and undistinguished time in the service—and it amazes me that memories are so short. I remember the substantial numbers of vessels that were drafted into service in various roles—to act as aircraft carriers, for example. The port of Great Yarmouth alone had over 100 trawlers acting as minesweepers and that was duplicated along the coast at ports such as Aberdeen, Grimsby, Immingham, Lowestoft, Felixstowe and the Thames boundary. Thousands of ships were needed for the many purposes to which I have referred.

Mr. Garrett

What about South Shields?

Sir Edward du Cann

Of course. I apologise to the hon. Gentleman for omitting that important port from my list.

Any idea that we have enough ships to fulfil the ordinary purposes of augmentation of the Royal Navy in wartime is ludicrous, and besides supporting the Royal Navy and augmenting it, we would have to supply and resupply the civilian population. We need to have enough ships besides to cope with local conflicts. I have said in the House on previous occasions, and I shall say again now, that at the time of the Falklands conflict, a few short years ago, we requisitioned 54 ships. It was a marvellous tale of improvisation, hard work and determination. It was a splendid success, but any account of those days makes it clear how narrow was the margin between success and failure. There were only a few ships left that could have been requisitioned, and of the 54 ships that were used at that time, more than half have now been sold. If we wanted to mount another Falklands operation today, it would be impossible to do so.

I have recited some sombre statistics, but it is suggested by my right hon. and hon. Friends at the Ministry of Defence, whom I respect so much, that there is a hidden reserve. It is suggested that large reserves of ships are available to Her Majesty's Government in times of emergency that are currently sailing under flags of convenience but are United Kingdom-owned. Whether Her Majesty's Government have the necessary powers to requisition them promptly is uncertain. It is even uncertain whether Her Majesty's Government have the powers to requisition them at all. Even i f they were to prove available—I do not believe that they would be—we can be sure that the foreign nationals who are now acting as their crews would not be available. The reserve is nothing more than a mythical armada.

Fortunately, there is a more widespread recognition of the dangers than hitherto. The Select Committee on Defence is taking an increased interest in these matters, and it is valuable to reflect on the report that appeared in Session 1984–85. What it had to say was prescient. Paragraph 47 states: 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. We talk a great deal about a nuclear deterrence and conventional forces, but if we do not have an adequate merchant marine our posture will be such that our deterrence will not be credible.

The Committee continued: 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 The Select Committee was giving a clear warning. What has been done to acknowledge that? Nothing. The Soviets have overtaken the British and the Americans as merchant shipping powers. In the early 1970s we had about twice as much merchant shipping as the Soviet Union. By the 1990s the Soviet fleet will be twice that of the United Kingdom, at the very least, and, I suggest, every one will be an auxiliary to the Soviet navy.

The comments of the Select Committee on Defence in its report on the 1986 defence statement demand an answer during this debate, and I hope that my right hon. Friend the Minister of State will be good enough to give it. Paragraph 104 states: At this stage we observe that there appears still to be no check on the genuine availability of merchant ships far defence purposes". The Committee continued: the statistics in SDE 86 take no account of the UK requirement for economic shipping, carrying essential civil supplies in a time of tension or war. Paragraph 105 states: There appears to be little regard in the formation of Government policy as a whole for the implications, in terms of our national freedom of action, of dependence on other nations for merchant shipping. Happily, there appears to be growing recognition of the worries about those implications. I am glad that the Leader of the Opposition raised this matter during business questions a week ago. A number of us have tried in speeches, questions, letters and pamphlets to make certain that the House, and thereby the country, is made better aware of the dangers. A motion on this subject is on the Order Paper. It has been signed by 24 right hon. and hon. Members and, I dare say, will be signed by 10 times that number during this Parliament's lifetime.

The establishment of the all-party parliamentary maritime group is evidence of the serious concern in the House. It is good that the Select Committee on Transport accepted the maritime group's recommendations and is inquiring into the subject. So, over the years, growing anxiety has been clearly expressed in the House, yet the apparent complacency of my right hon. and hon. Friends is remarkable. Witness the assertion by my right hon. Friend the Prime Minister in reply to my question at the end of November 1986: There are sufficient vessels to meet Ministry of Defence requirements."—[Official Report, 25 November 1986; Vol. 106, c. 158.] But that is demonstrably untrue. Who on earth gives my right hon. Friend such misleading advice?

The 1986 "Statement on the Defence Estimates" said: Because the United Kingdom's merchant fleet is of great importance for defence needs, the scale of its recent decline has caused some concern. Elsewhere, great concern is the order of the day. My hon. Friend the Member for Eastleigh (Sir D. Price), in a letter a few days ago to my right hon. Friend the Prime Minister, quoted the minute written by the chief of naval staff after the conference at Greenwich. The right hon. Member for Cardiff, South and Penarth (Mr. Callaghan) chaired one of the sessions. The deep interest that he continues to take in these maritime matters is appreciated by the whole House. The chief of naval staff wrote: the Conference concluded that the United Kingdom could no longer take a sizeable Merchant Fleet for granted and that this has severe implications from a defence viewpoint". He continued: the mood of the Conference was sombre". An unclassified document issued by NATO, a communique following the 38th plenary meeting of the planning board for ocean shipping held at the end of September and beginning of October 1986 in Washington, stated: The Board was seriously concerned at the continuing decline in the number of ships registered under the flags of members of the Alliance … The Board concluded that for certain categories of ships the situation is already critical". That is surely sufficient evidence.

I state as a fact that the present attenuated size of the British merchant fleet and of NATO fleets now puts our country's defence strategy and that of the NATO Alliance at serious risk. Ministers who have allowed this to occur or who have connived at its continuance merit the censure of the House and the nation's complaint.

Let us be frank about the situation. There is a crisis. It is no good pretending that it does not exist. It will not go away. The shortage of ships in the merchant marine in Britain and in the NATO countries has grave implications from the defence viewpoint. I know that many right hon. and hon. Members are also very worried about the economic implications in Britain of this decline in the British Merchant Navy from the point of view of employment, shipbuilding and ship repairing, finance, insurance and markets generally, engineering, and so on. There is no argument about the causes—they are well understood and have been clearly defined—nor is there much doubt about what could be done by way of remedy, internationally, within the European community and domestically. It is to be hoped that my right hon. Friend the Chancellor will give attention to the early-day motion on the Order Paper.

Many other people apart from me have proposed remedies. This is perhaps not the occasion to discuss them in detail or to argue the merits of one against another. It is, however, right to say for the House as a whole and for the nation that it is urgent that the Government formulate a clear policy of support for the British Merchant Navy. If anything, that is overdue. It must be right that policies should be co-ordinated in Government. It must be recognised that differences of interest within Government—some 16 Departments of State have responsibility, in one way or another, for the Merchant Navy—inevitably lead to lack of leadership, as now. Without any doubt, the key is, first, to develop a profitable shipowning capacity and secondly, the co-ordination of international policies in the free world, especially the European Community.

The weakness of our Merchant Navy and of merchant fleets in Europe and in NATO is the Achilles heel of our defence. We can boast all we like about expenditure, about building new ships and about getting better weapons, but none of that matters if there is this particular weakness in the Merchant Navy, because the Royal Navy by itself is not credible.

Viscount Cranborne (Dorset, South)

I apologise for interrupting. As my right hon. Friend knows, I am strongly sympathetic to his viewpoint. Does he agree that it would be sensible to urge on our right hon. Friends in the Ministry of Defence that any support that they can give the Merchant Navy should come not from the defence budget but from tax incentives or other Votes? The Ministry of Defence will be under considerable pressure in the coming years.

Sir Edward du Cann

I entirely agree. There is no question but that this nation, if it cared to give the leadership that it should give both within Europe and internationally, could fundamentally alter the whole climate within which the world merchant fleets are trading. I do not argue for subsidy or that money should be poured in; I do not argue that the service spend should be mitigated in any way; I am simply begging my right hon. and hon. Friends—who are my friends, and whom I trust and admire— to recognise that this is a most serious problem about which something must be done. Indeed, action is overdue.

I look to my right hon Friends, with the competence that they have, to decide that, from this moment on, they will take action, and to ensure that such action is effective.

5.40 pm

Mr. James Callaghan (Cardiff, South and Penarth)

It is a very great honour to introduce the Navy Estimates. Although the form of the debate today is not what it was previously, anyone who has the privilege of introducing the Estimates is to be congratulated. Indeed, I congratulate the Minister of State for the Armed Forces on the post that he occupies. Any of us who has had any connection with the Royal Navy, either through serving in it or through the Board of Admirality, has a lifelong affection that is never lost. It might sometimes cloud our judgment, although it will not cloud mine this afternoon. Whatever future post may be offered to the right hon. Gentleman, I am sure that he will always look back on his present post as one that has given him very great enjoyment.

As I look at the empty Benches in the Chamber, I cannot help but contrast that with the year—36 years ago—when I first had the privilege of introducing the Navy Estimates. The First Lord of the Admiralty was then in another place, but the debate was graced not only with the presence of the Prime Minister, but with that of Sir Winston Churchill, who sat on the Opposition Benches. They came to listen to the Parliamentary Secretary, and the Benches, if not full, were at least much more fully occupied than they are today. It is, perhaps, a sign of the decay that we have allowed to overtake our concept of our national role and responsibility that, today, there is a group of hon. Members talking to each other rather than to the House as a whole. Nevertheless, we must continue to make these speeches.

I want to follow the remarkable speech of the right hon. Member for Taunton (Sir E. du Cann) and focus upon the unprecedented decline in the size, strength and manpower of Britain's Merchant Navy, and the serious consequences of that for our long-term security and national well-being.

Ministers sit on the Treasury Bench, and it appears to many of us that our arguments bounce off them. We can only hope that if that is the case—it is not a matter for humour, but a serious issue—we can at least alert public opinion to what is happening. Never in this century has our country had a smaller merchant fleet than it has today; never have we had fewer seafarers that we have today. Britain's shipping is suffering from a haemorrhage, with no signs of it being staunched. The actual disaster that is overtaking us is much worse than the forecasts that are made from time to time. Never has anyone been over-pessimistic about the problem.

Some 10 years ago—I make no apology for repeating the figures, which must be drummed in even though that means repeating speeches— Britain owned more than 1,600 ships of more than 500 gross tonnes. Twelve months ago, the figure had shrunk to 640; six months ago, it had shrunk to 552; and today, it is probably no more than 480. That is a loss of 25 per cent. of our shrunken fleet within the past 12 months.

Even so, we have not touched bottom. The director general of the General Council of British Shipping, Mr. Peter le Cheminant, has warned the Chancellor of the Exchequer that unless the current trend is reversed, the size of the mainland British fleet may be no larger than 100 ships within the next decade—shrunk from 1,600 to 480 in the past decade, and from 480 to 100 in the next.

Mr. le Cheminant is no wild lobbyist; he is a prudent and cautious man who formerly occupied a senior position in the Cabinet secretariat. His figures would send a shudder through any Government who were less complacent than this Government are showing themselves to be. The consequence is that British ships are today carrying only 23 per cent. of British trade by weight and 36 per cent. by value. That, as the right hon. Member for Taunton said, has resulted in the employment of British seafarers declining from 74,000 10 years ago to less than 30,000 today, while Britain's sea transport account has deteriorated from a positive surplus of £141 million in 1980 to an enormous deficit of £1,157 million in 1985—a decline of some £1,000 million.

Most of the figures are not new. Right hon. and hon. Members, on both sides of the House, frequently led by the right hon. Member for Taunton, have dinned the facts into the deaf ears of Ministers month after month. I especially pay my respects to the right hon. Gentleman and the parliamentary maritime group for the manner and determination with which they have stuck to their task.

The right hon. Gentleman said that the alarm bells should sound. What about Drake's drum? If we cannot get that to sound the alarm, perhaps the next best thing would be to have Rudyard Kipling living at this time, writing an up-to-date version of his poem "Big Steamers", with As repeated last lines about their cargoes: Brought to you daily by all us big steamers, And if anyone hinders our coming, you'll starve. Kipling's words were right then, and they are right today.

If nothing else touches Ministers, they should be touched by the dreadful deficit in sea transport of more than £1 billion. But no, the Chancellor has ignored it because of his uncovenanted benefit of being able to float on a huge barrel of oil and the revenue that it has provided. That will not last. When his successor turns again to British shipping to make good a balance of payments deficit—as has been done in the past—he will find that the fleet has disappeared, sunk through complacency and inaction.

It is not enough for Ministers to excuse themselves on the ground that it is a worldwide affliction. Certainly Britain is not alone, but I would have expected a British Government, with their particular responsibility— as more than 90 per cent. of our trade depends upon shipping in a way that is unequalled in any other continental country—and with our island dependence on the sea, to have been in the forefront in demanding international action and in proposing remedies, both national and worldwide.

As the right hon. Member for Taunton said, many proposals exist. Some have been put to the Government; others are lying around waiting to be picked up, if only the Government would do so. Yet all that is dismissed in one complacent paragraph in the Defence Estimates White Paper, which states that the scale of decline of merchant shipping "has caused some concern"—at least there is some feeling in the body corporate— and that in conjunction with the Department of Transport defence Ministers will continue to monitor the situation closely. That is a wonderful field of action into which the galvanised, dynamic Treasury Bench can leap. It is a disgrace if Ministers comment on that in only one out of 700 paragraphs in the defence statement.

Incidentally, where is the Secretary of State for Transport this afternoon? I know that Ministers are always trying to pass the buck, and the Ministry of Defence shows little desire to pick up this hot potato. The Secretary of State for Transport gave a rather lame statement to the House before Christmas. He should be here to listen to the debate.

I should like to repeat what the right hon. Member for Taunton (Sir E. du Cann) said. What is missing in our scale of national priorities today is any sense of understanding that in maritime policy as a whole the Merchant Navy and the Royal Navy exist to serve and support each other.

A long time ago I suggested—it was dismissed—that the Prime Minister should take the chair at a Cabinet committee to co-ordinate our total maritime interests. I very much regret that that proposal has not been taken up. When I was Prime Minister I did not chair such a committee myself but asked Lord Peart to assume the chair of a committee for the direct purpose of such coordination. I advise the Minister that because of the terrible decline in our Merchant Navy the situation today is far more serious than it was seven or eight years ago.

Although Ministers seem to have some intellectual comprehension of the consequences of the expansion of the Soviet fleet, they show no signs of translating their apprehension into action, especially in relation to submarine strength. There will probably be little argument in the House that the most significant strategic development that has occurred since the second world war of 1939 to 1945 was when the Soviet Union reached parity with the United States in its strategic nuclear missile capacity. However, that being so, in my judgment, and I believe in the judgment of all hon. Members who study these matters, second only in strategic importance has been the enormous expansion of modern Soviet maritime capacity in total, with its ability to threaten allied reinforcements by its submarine fleet and to conduct amphibious operations in support of its land forces. In face of that, I confess the greatest concern at the inertia of the Secretary of State for Defence and the Secretary of State for Transport as they watch the collapse of our merchant fleet.

I am sorry to have to utter such platitudes yet again, but I repeat that the Merchant Navy has always been an essential element in Britain's defences. It has historically supplied the ships for carrying the food and materials that we need in time of war. In addition, many of its ships have been converted to become part of the fighting navy when needed. We should note that almost every major Soviet cargo ship today has the facilities for swift and easy conversion built into it when it is built and launched.

The Merchant Navy has supplied trained and hardy men who know the ways of the sea and who are skilled navigators and seamen. Those men were ready to shed their Merchant Navy uniform and to don the insignia of the Royal Navy when they were needed.

On any one day in a conventional war, 300 merchant ships would load and unload in British ports. To keep up the supply of our reinforcements would require 1,500 shiploads a month from across the Atlantic. Where will the ships and the experienced men be found if they are needed in future? The right hon. Member for Taunton has already given the answer and I cannot dissent from it. The ships and the men will not be there. As the right hon. Gentleman asked, even if we got ships from abroad, would their foreign crews be willing to sail them? The number of qualified British seagoing officers serving in the Merchant Navy is one third of what it was 10 years ago. It is now 14,300 as against the previous figure of over 40,000. New recruits are not being taken in because of the absence of ships, nor are they being trained, so the future reservoir does not exist. The Estimates give the number of Merchant Navy cadets as 1,016, which is one fifth of what it was only four years ago. Then there were 5,000 young men, but now there are only 1,000. Nautical schools and training establishments have closed down. In my city of Cardiff, some excellent training facilities have been disbanded, the instructors have been dispersed, and the equipment is rusting.

Taking a ship to sea today is a highly skilled profession that requires technically trained deck, radio and engineer officers. The inherited skill and experience that enables Britain to produce some of the best seamen in the world is being lost. I warn the Government that once that skill is lost it cannot be recaptured in a period of months, because it must be passed on from generation to generation.

We have had some halfhearted talk from the Secretary of State for Transport about the possibility of establishing a Merchant Navy reserve to counter the severe shortage of qualified seafarers. However, there has been no word so far of whether the Government are prepared to establish the training facilities, to recompense the volunteers and to supply the administrative structure that would be needed. I have no wish to discourage the notion— I hope that it can be implemented— but the Government should be aware that those who study such matters warn that the rate of technological change in practice is such that officers soon get out of date when they leave the service and would need intensive and regular periods of training.

Of course, we would not face the task of supplying ourselves on our own. However, the Government should not draw too much comfort from the existence of a pool of NATO ships upon which they could call. I have already referred to the fact that the downward trend in shipping is worldwide, and the French, German, American, Dutch and Norwegian merchant navies all display declines in tonnage and men. However, there is a major difference. Our downward slide has been more precipitious and more disastrous than theirs—it is the biggest of the lot.

There is one gleam of light to which the right hon. Member for Taunton referred. The NATO planning board for ocean shipping has begun to take note of the matter. However, it has only begun to take note and I have not been able to see any action so far. At its meeting in September 1986, it expressed serious concern at the decline in the number of ships that would be available in time of war. As the right hon. Member for Taunton said, the board went further and, as a result of its study so far, it concluded—I repeat that it has done so slowly—that for certain types of ships the situation is already critical. Even worse, it went on to state that the situation is likely to deteriorate further unless steps are taken to reverse the decline. At its meeting, the NATO planning board called upon member states to formulate national shipping polices, and stressed the importance of the strategic value of national flag fleets.

How have the Government responded, or how do they intend to respond, to the alarm that has been sounded? So far, we have heard nothing. Hon. Members on both sides of the House will demand that the Minister who concludes the debate gives some indication of the Government's policy, and of any action that they may have in mind or that they may try to cough up between now and 9.30. We have insufficient ships, inadequate numbers of men, dismantled training facilities and deserted shipyards, but there is no national policy to safeguard our security on the high seas.

I conclude by commenting on the importance of security. I regret that the argument about Trident has come to represent the difference on this issue, because I regard what has happened to the merchant fleet as being even more important. Although Trident is important—I have my own views on that— I do not wish to divert attention from what I am saying now by discussing it, because its day will come. [Interruption.] That day may come and some Conservative Members may be less interested in my analysis of that position than in scoring some party advantage.

We have heard a great deal from the Government about the importance of national security in other areas. It has led them to ban the unions at GCHQ and to raid the BBC in Scotland. The Prime Minister in an act of folly even despatched the Cabinet Secretary to the Antipodes to waste a month sitting in an Australian court in an attempt to ban Mr. Wright's book of memoirs—all high profile actions, costing nothing in hard cash. Yet, at the same time, the British ships and men that are vital for the real protection and security of our people and commerce in peace and war are disappearing from the oceans of the world. The ships are rusting and the men rotting.

By the time the Zircon satellite gets into the stratosphere there will hardly be any British ships for it to watch. What sense of proportion is that? Whatever may he thought of the activities of Mr. Duncan Campbell, who is not my favourite journalist, history may well record that the inertia and indifference of Ministers to the decline of British Merchant Navy did much more serious permanent damage to the security and safety of the British people than a journalist's premature disclosure of the existence of a spy satellite.

6 pm

Sir Patrick Wall (Beverley)

It is a privilege to follow the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan), whom I have admired and respected for many years for his contributions, not only to the House and the country, but to the Navy and Merchant Navy. I agree with every word that he said about the Merchant Navy.

Two senior Privy Councillors from both sides of the House have made their view clear, as they have been doing for the past three years: the Government have apparently done absolutely nothing. I hope that what has been said today will enter the heads of my right hon. Friends and that we will insist that action is taken. We are an island nation, although we are trying to build a Channel tunnel. That will not come for a long time, and it may be better to spend the money that is to be spent on it on refitting our Merchant Navy.

I wish that we could return to the old type of debate. In the old days we had a White Paper, a two-day debate on defence, followed by a debate on the Navy, Army and Air Force and we knew where we were. In February we cannot debate a White Paper which will be published in the next month or two because we do not know what it will include, so presumably we are debating a White Paper which is a year old. That is nonsense.

The hon. Member for Sheffield, Attercliffe (Mr. Duffy) and I have just returned from discussing procurement with the Armed Services Committee of the Congress in Washington. The comparison between the way they discuss defence with the details that they go into and what we do reflects shamefully on us. At least we could get the sequence right, otherwise we are being asked to discuss matters in a vacuum.

I made my maiden speech on Navy Estimates 33 years ago, and as I shall be leaving the House at the general election this may be my last opportunity to speak on the Navy. As the House probably expects, I shall start with the Royal Marines. In my mind they are the best force in the world; factually, they are the most cost effective. They are part of the Royal Navy, and any idea of splitting from the Royal Navy would involve the abolition of the Royal Marines. I believe that they would far rather be abolished than turned into soldiers. In my time, two thirds of the corps were at sea, but now they are in commandos. The use to this nation of that maritime capability was proved only too clearly in the Falkland Islands.

I have just read a couple of books about the Falkland Islands campaign, and the morale boost of the commando forces' band was apparently enormous in RMS Canberra on the outward and return journeys. Moreover, the bandsmen served as stretcher bearers during the battles. I hope that the Royal Naval school of music will be kept separate from the other forces' schools, as I know they also wish it to be. I hope that this nonsensical business of putting three bands together in the same school has now been dropped.

Has action been taken on some of the minor but important lessons that we learnt from the Falkland Islands operation? I am thinking, first, of kits and boots. Both the Army and Royal Marines still march on their boots, but apparently 98 per cent. of the marines who returned from the Falkland Islands had damaged their feet. Most have recovered by now, but the boots were highly unsatisfactory as they let in water. The webbing equipment froze as the weather was so bad. Yet equipment borrowed from other nations, such as Norway, did not do so. There were no nightscopes for Milan, which proved itself in those operations. Has Milan, both in the Royal Marines and in the Army, now been fitted with proper nightscopes? Do the Royal Marines now have a Rapier battery attached, and has it been fitted with Blindfire, which it was not in the Falkland Islands? Those matters are raised time and again if one reads books on the operations in the Falklands. Have those lessons been learnt, and is action being taken?

The Royal Marines' primary role is amphibious warfare and they are dedicated more or less to the northern flank. The northern flank is of great importance, because the Russians would like elbow room from Murmansk, one of their bases on the Kola peninsula. If, in years to come, NATO appears to be weak, or the leadership in the United States, Great Britain, France and Germany was weaker than it is today, it is possible that the Soviet Union may attempt to take over northern Norway and then sit back and wait to see what happens. NATO commits each nation to the defence of the other. If, in those circumstances, the Norwegians were not helped, it would be the end of NATO.

That emphasises the importance of the northern flank and of Fearless and Intrepid. They are not only launch landing craft, and carry a couple of helicopters, but exercise command and control. We cannot build a merchant ship hull and expect it to exercise command and control off a hostile coast under air bombardment, as Fearless did in San Carlos water. They must be rebuilt or replaced by similar warships, rather than built from converted merchant ships.

I am glad that the losses from the Falklands have now been made up. However, I must emphasise, as I have already done through questions, that aircraft support ships are absolutely vital. Fearless and Intrepid can carry two or three Sea Kings, but an aircraft carrier is needed for an assault. We do not have any available. Recently I asked a question and was told that our three aircraft carriers were rarely used now for our marine forces. We need at least two aircraft support ships. They could be built from a merchant ship hull and, indeed, would probably have to be for cheapness. They would carry the helicopters from which an initial assault could be made.

Mr. Garrett

The hon. Gentleman has obviously not heard of Atlantic Conveyor, which was built on Tyneside, and which is primarily designed for the purpose that he is advocating. He should advocate that we build more of these ships.

Sir Patrick Wall

I have heard of the replacement for the old Atlantic Conveyor and I believe that it is far better than some of the existing Royal Fleet Auxiliary ships today. However, the ships that I am speaking about must be designed to carry several helicopters and their crews with briefing rooms, adequate maintenance facilities and so on. That cannot be duplicated with the logistics supply role, which is the main role of the Atlantic Conveyor.

I now turn to NATO and some of the naval problems facing NATO, that were discussed recently at the NATO Assembly. I have already mentioned the importance of the northern flank and the fact that a large number of the Soviet submarines that operate from Kola—numbering about 180—are nuclear propelled. These submarines are guided missile submarines—that is, anti-ship submarines— as well as ballistic missile and ordinary torpedo-carrying submarines. One should remember that the new commander-in-chief of the Soviet navy is a submariner, and we should recall what a change came over the German navy when Admiral Raeder, a submariner, took over. With the larger concentration of submarines, and with so few merchant ships, how will we defend the shipping lanes against real submarines rather than the German U-boats which have to resurface to recharge their batteries?

The Supreme Allied Commander Atlantic has told us, time and time again, that he is some 50 per cent. short of escorts. Escorts must be provided for the strike fleets, battle groups and the convoys, and SACLANT needs far more ships than we have at present. That is why some of us are so concerned about the type 23 destroyers. If my right hon. Friend the Minister is to keep his promise to give us 50 frigates and destroyers, three type 23s must be ordered each year. However, such orders will only replace the older ships. My hon. Friends and I are rather worried when we hear the word "about". Previously, the promise was 50, but now my right hon. Friend promises "about" 50. I appreciate that Ministers must have some leeway, but this is a serious matter. I am aware that SACLANT is pressing hard for these orders and I hope that my right hon. Friend will see that they are placed, presumably immediately after the publication of the White Paper.

We are also short of maritime patrol aircraft. Some 250 of such aircraft are available to NATO, but three to five of them are needed for any submarine that gets beyond the Greenland-Iceland-United Kingdom gap and into the Atlantic. NATO is short of some 100 of these aircraft.

In the past 18 months the Soviets have shown us that they can deploy 50 per cent. of their northern fleet in three days. They can put a submarine barrier across the GIUK gap in three days. That shows us how important the use of warning time must be to get our forces into position and reinforce those positions before the balloon goes up. Once the GIUK gap is breached the convoys will not get through. We need more escorts, helicopters and maritime aircraft if the Soviets are to be checked. If the gap is penetrated the war will be a short one because there will be no food or ammunition to supply the forces and the people of Europe.

In the annual discussions that the North Atlantic Assembly— NATO's Parliament— has with NATO's three main commanders-in-chief, we are told that the balance is swinging against NATO, especially at sea, but little is done. How long will the balance go on swinging, year after year, before it tips over? I have a shrewd suspicion that it will not be much longer.

Why is there such an imbalance? The combined gross national product of NATO is 2.5 per cent. greater than that of the Warsaw pact. The combined population of NATO is one and a half times that of the USSR. If we were spending anything like the Russians spend on defence, all our fears of being suddenly attacked and wiped out would disappear. Why is it? We spend too much on ourselves. We spend too much on social security and other matters that we cannot afford. If war took place—I do not think it will—all such spending would go for a burton anyway.

I had intended to refer to the Merchant Navy, but having heard the excellent speeches of my right hon. Friend the Member for Taunton (Sir E. du Cann) and the right hon. Member for Cardiff, South and Penarth I shall not do so. I, will, however quote two sets of figures. There would be 600 ships a day in the Atlantic on any one day in wartime. British figures of our presence in the Atlantic have been quoted, and instead I shall quote some NATO figures. Between 1980 and 1985, Norwegian shipping went down from 12 million to 7 million gross registered tonnes; Greek shipping went down from 11 million tonnes to 9 million tonnes; French shipping went down from 8 million tonnes to 4 million tonnes; Spanish shipping from 5 million tonnes to 3 million tonnes; Danish shipping from 3 million tonnes to 2 million tonnes; West German shipping from 3 million tonnes to 1.5 million tonnes; and Dutch shipping from 2.3 million tonnes to 1 million tonnes. American shipping remained more or less static, although much of its shipping went under flags of convenience. However, it is the only nation in NATO that maintains a large merchant navy reserve of both ships and men. It is suggested that we should follow that practice.

The hon. Member for Attercliffe and myself have recently had discussions with the Armed Services Committee in America. I assure the House that the Americans realise that co-operation and standardisation are as essential for them as they are for us. The United States Administration, as well as United States industry, will try to increase this co-operation and standardisation. The trouble lies with the American services. They do not want their weapons systems or ammunitions to be built anywhere except in America.

Torpedoes highlight the problem. The Select Committe on Defence and the North Atlantic Assembly have struggled for years to get a NATO torpedo. We have the best detection system in the world, at the front end, in our two new torpedoes, the heavyweight and the lightweight. The Americans have the best propulsion system—ours is too slow—and the obvious answer is to marry the two systems. That way we would have a NATO torpedo. However, the American navy said no. Now we have two new British torpedoes—Sting Ray and Spearfish two American torpedoes—one heavy weight and one light weight—a French one, a German one and an Italian one. One can appreciate the confusion that has been caused and the money that has been wasted.

Recently I visited Garretts in Phoenix, Arizona where experiments are being held regarding lithium-fuelled stored chemical energy propulsion—SCEPS. The experiments relate to the development of a closed thermal engine. Are we considering such experiments, which seem the answer for the future propulsion of torpedoes? We should surely consider those developments carefully.

With regard to air defence, I am glad that we have Goalkeeper in the carriers, but it will take three years to get it fitted. What about the type 42 and type 23s? Will they be armed with Goalkeeper, or will they rely on Phalanx, a 20mm short-range weapon? This weapon is being upgraded by the Americans as it is not much use against today's modern aircraft. The lesson of the Falklands is that point defence is vital, and point defence must be at a reasonable range with a heavier shell.

In the next decade I believe that if we keep up our guard there will be no war—nuclear or conventional. I believe that Mr. Gorbachev is much more interested in the economy of the Soviet Union and trying to improve it than in attacking Europe. There is always a danger that if the men in the Kremlin are faced with the choice of the disintegration of the Soviet empire or aggression, they will choose the latter. The other danger that we face all the time is subversion. Such subversion is carried on by Soviet agents or people unknowingly helping those agents. That can be extremely dangerous and it is spreading in Europe and in the United States.

Of great importance—I do not wish to end on a controversial note—is the Labour party's defence policy—unilateralism without gaining anything in return. It plans to throw the Yanks out. That appals my colleagues—including many on the Left—in the North Atlantic Assembly. They continually vote against—

Mr. Garrett

We would not throw the Yanks out.

Sir Patrick Wall

Labour Members do not intend to throw the Yanks out, but will tell them to take their nuclear weapons out, to take the F111s away and shut up Holy Loch. Does the Labour party think that the Americans would then stay here? Of course not, they would go home to America. The Leader of the Opposition was told that when he went to the United States. I believe that he is going there again. I hope that he will, because the Americans are getting quite violent on this subject. Many say that if the Labour party comes to power and implements its policy the Americans will withdraw from Europe, and we shall then come under the Kremlin, without Mr. Gorbachev having to move a soldier or a frigate.

6.20 pm

Mr. John Cartwright (Woolwich)

It is a pleasure to follow the hon. Member for Beverley (Sir P. Wall). He and I have been colleagues in the North Atlantic Assembly since 1976 and he was an extremely effective and energetic president of the assembly for a couple of years.

The hon. Gentleman always brings to these debates expertise and a sense of commitment to British maritime power. I do not always agree with everything that he says, but I recognise and respect the strength of his views and I endorse the action that he has been taking over a long period to generate joint procurement and greater standardisation within NATO.

I understand that an inquiry is being undertaken by the Ministry of Defence to discover how HMS Splendid lost its towed array sonar equipment. We are told that the incident happened between 1 and 15 January this year. There are obvious difficulties about the Government providing details of submarine patrols, but some statement is essential. If we do not get clarification, rumours will continue to abound. I cannot be the only hon. Member who has had suggestions put to him by sources not far distant from members of the crew of that vessel.

It is highly unlikely that the reports in some newspapers are correct. The idea that a Soviet Typhoon submarine would have deliberately severed the towed array sonar equipment is extremely implausible. Even if the equipment could have been recovered—which is a very big "if"—it would have been of limited benefit to the Soviet Union.

It seems much more likely that another suggestion put to me contains the basis of the truth. HMS Splendid may have been operating under the cover of a merchant vessel whose anchor severed the cable of the towed array sonar. Whatever the facts of the matter, it is important that we examine the operations of our attack submarines.

I have had only limited experience of travelling in British and American SSBNs, but I recognise that submariners are very special people indeed, and I endorse the tribute that the Minister paid to those who operate our ballistic missile submarines.

Those in our attack submarines, who have the vital task of tracking Soviet ballistic missile submarines, also carry out an important task on our behalf. It is vital to be sure that we are not asking our submariners to undertake unreasonable risks. It has been suggested to me that the HMS Splendid incident is not an isolated occurrence and that there have been similar incidents involving HMS Spartan and HMS Sceptre. If the inquiry shows a need for a review of procedures and methods of operation, the Minister should not hesitate to say so and to carry out the review.

Mr. Garrett

The hon. Gentleman knows much more about the submarine service than I do, and perhaps he can tell me whether the HMS Splendid incident put at risk the lives of the men in the submarine. If it did, that should surely be a major factor in establishing the need for an inquiry.

Mr. Cartwright

That is what I was trying to say. Perhaps I was not as clear as I should have been. I was saying that submariners in attack submarines, who are tracking Soviet ballistic missile submarines, have a difficult but essential job. I hope that the Minister will give us an undertaking that if those men are put at risk as a result of what they are being required to do, their procedures and methods of operation will be reviewed. We want that job carried out, but we do not want our submariners taking unreasonable risks on our behalf.

The alliance parties have consistently opposed the Government's obsession with taking the royal dockyards out of Civil Service administration and creating an agency management company to run those vital services. We still believe that if the Government are convinced of the need for change, a trading fund within the Civil Service offers a far better solution. We fear that the interests of the Royal Navy and of our national security may be put at risk if the Government give up control over the repair and refitting of warships.

We hope that even at this late stage it is possible for the trading fund option to be pursued at Devonport, even if it is too late to do that at Rosyth. I understand from my right hon. Friend the Member for Plymouth, Devonport (Dr. Owen) that with goodwill among the unions and the management they could get around a table to discuss the possiblities.

We hope that such a solution could retain Devonport as a unified industrial enterprise instead of its being divided up, as will happen under the Government's proposals, with the Government owning the assets and private owners being responsible for the management. The Government's proposal will certainly involve problems when new capital investment is needed in the 1990s. There is no guarantee that the Government will provide that capital, and as the private operators have only a seven-year contract, they have little incentive to go in for major capital restructuring.

We believe that Government control of the dockyards should be restored at the earliest opportunity, in the interests of the Navy and the nation. That does not mean that we are committed to renationalisation. We believe that a trading fund option offers the best way of protecting the interests of the work force and the national interests.

An open government document on the alternatives to Trident appeared last week. The timing of its publication is slightly odd. We had an open government document in 1980, setting out the Government's proposals to buy the original Trident system, and in 1982 we had an updating document which committed the Government to purchasing Trident D5. Suddenly and magically, five years later, we get a document on the alternatives to Trident. It is not even a decently printed document. It has all the hallmarks of an extremely rushed job and was perhaps not entirely unconnected with a function that took place at the Barbican on Saturday. It seems to some of us to be a major misuse of public funds. Conservative Members constantly complain, often with great justification, of misuse of ratepayers' money by some Labour councils, but the Government are doing the same thing in introducing this document at this time.

Mr. Archie Hamilton

Has the alliance not always said that it has been unable to make a decision on the alternative to Trident because of the lack of information? We have now provided that information and the hon. Gentleman complains about it.

Mr. Cartwright

If the Minister had provided the sort of serious information on which a firm decision could be taken, nobody would have been happier than alliance Members, but for him to try to suggest that this paltry, tatty, unconvincing, rushed-out document owes anything to open government is nonsense.

The alliance believes that Trident is not an appropriate replacement for Polaris. We have always said that Trident is not a minumum deterrent. It offers a massive potential increase in firepower. If the full potential is used, 896 warheads could be deployed, compared with the 192 of Polaris.

We know that Trident has vastly greater accuracy and therefore greater potential against hardened military targets. We do not need that from a minimum nuclear deterrent. We know that Trident is a fully MIRVed system, as opposed to the Polaris system, whose warheads are not independently targetable. It is therefore an extremely powerful and sophisticated weapon system which in no way could be described as a minimum deterrent. To be fair, the Government have always said that the full potential of Trident would not be used. That raises the question as to why one wants to buy a weapons system as powerful and sophisticated as Trident if one does not want to use it to the full extent. It is rather like buying a Rolls-Royce to go down to the pub once a week on a Saturday night.

The Secretary of State told us on 3 December that the increase in warhead numbers at most would be about two and a half times".—[Official Report, 3 December 1986; Vol. 106, c. 998.] The Minister made the same point earlier today. The so-called open Government document tells us that the number of warheads is classified, so we do not know the actual number, but we know of the suggestion in the open Government document that there will be a maximum of 128 per boat. That gives a maximum of 512 on the four-boat force, compared with the 192 warheads provided for in Polaris. There is no information in the document about the kilotonnage of the warheads and not a shred of evidence about their power and destructive capability. We know that the United States has rated its Trident warheads at 465 kilotonnes—twice the original kilotonnage of Polaris warheads, which was 200 kilotonnes. We know that the Chevaline modernisation has substantially reduced the kilotonnage of the Polaris warheads. There is thus a substantial increase in the number of warheads and each warhead has substantially increased destructive power.

The Government argue that they need that extra capacity because of improved Soviet defences. We are often told by the Government that the Soviets possess the only deployed ABM system in the world, which is true, but that system is deployed around Moscow. One has to ask why we constantly allow ourselves to be obsessed by what has come to be called the "Moscow criterion." If one wanted to do so, it would be perfectly possible to inflict unacceptable damage on the Soviet Union without trying, in the awful jargon, to "take out" Moscow.

There is independent evidence to suggest that the Government are going somewhat over the top in terms of the current modernisation of what they like to call the minimum deterrent. The reputable and widely read American journal Scientific American produced in August 1986 a detailed assessment of British and French nuclear systems. It accepts that even on the "Moscow criterion" the Government are going far further than they need in terms of the fire power that Trident will provide. The experts looked at a computer model to estimate the levels of damage that British and French nuclear strategic forces could inflict on the Soviet Union. First, they looked at the existing Polaris system with its Chevaline update. They estimated that potential casualties from a British nuclear attack would range anywhere from six to 21 million dead; concomitant losses in the production base would range from 5 to 15 per cent. In anybody's terms, that is unacceptable damage to the Soviet Union.

The experts then looked at the problem that seems to worry the Government—the improvements in Soviet ABM systems between now and 1990. They accepted that it would certainly reduce the impact of the existing Polaris Chevaline system. Their assessment was that there would be between 3 million and 8 million fatalities and that about 5 per cent. of the production base would be destroyed. When they examined the potential of Trident 2, however, based on the Government's maximum of 512 warheads, they discovered the potential of Britain's strategic nuclear deterrent: Britain would be able to inflict between 24 and 68 million Soviet fatalities and to incapacitate up to half of the Soviet production base. Given the overwhelming number of warheads in the planned British Trident force, the effectiveness of the Moscow ABM system would have little impact on overall damage levels. That shows that the Government's Trident proposals have far more fire power than is necessary for an effective independent deterrent.

Mr. Stanley

I am listening to the hon. Gentleman develop his case against Trident. Does he recall the interview given in "This Week, Next Week" by his right hon. Friend the Member for Plymouth, Devonport (Dr. Owen) on 16 November, in which his right hon. Friend said that one of the options that he was considering was a very much reduced Trident missile with reduced deployment? Is that still one of the Social Democratic party options?

Mr. Cartwright

I shall come to the options later. I notice that the Minister did not quote the words but just gave his general recollection. My general recollection is that my right hon. Friend was talking about options that might be available to the Government if they genuinely wanted a minimum deterrent. The possibility of Trident deployment is not one of the options considered by the alliance.

I shall now deal with the details in the open Government document and the alternatives that the Government have examined. The problem is that all the alternatives have been examined on the basis of the fallacy that we need this massive capacity—a capacity to destroy half the Soviet Union's industry and to kill up to 68 million Soviet citizens. We simply do not accept that. We take the view that all the alternatives have been examined from the wrong starting point and from the basis of a false yardstick.

For example, the open government document suggests that to produce the fire power of Trident we would need some 400 sea-launched cruise missiles on 11 dedicated submarines. Since we do not need the fire power of Trident, that argument collapses immediately. I have argued with some strength that we do not need the ability to destroy half the Soviet Union's industry, nor to kill 68 million Soviet people. That is not a minimum deterrent in anybody's language. If we need 400 sea-launched cruise missiles, where does that leave NATO, which needs only 464 ground-launched missiles for the purposes of flexible response? If our aim is a genuine minimum deterrent, we can manage with far fewer sea-launched cruise missiles, if that is the option which finally meets our needs.

The Government argue that cruise is somehow vulnerable in the face of improving Soviet defences. The Government document mentions the look-down, shoot-down fighters, the surface-to-air missiles and the rest of the Soviet defensive capability, which is certainly improving. But if cruise is as vulnerable as the Government suggest, why are they so keen to rest NATO's flexible response on ground-launched cruise missiles which are still being deployed? The deployment is not yet complete. Why is the Prime Minister so nervous about the removal of cruise from Europe if it is such an ineffective weapon against improving Soviet defences?

Why is the United States investing so massively in cruise missile systems? By January 1986, 21 Los Angeles submarines had cruise Tomahawks fitted, as did some surface ships. By the mid-1990s, all 101 American attack submarines will have Tomahawks fitted, as will 82 surface ships. The United States air force will be deploying air-launched cruise missiles on B52s. By 1990 about 180 B52s will be equipped. The United States is investing massively in cruise missiles for the future but the Government tell us that if we were to do the same we would have a weapon system uniquely vulnerable to Soviet defences.

The Government apparently know little or nothing, and care even less, about the American advanced cruise missile project. They refer in passing to the application of stealth technology. The advanced cruise missile project involves not only the incorporation of stealth technology but an extended range for the cruise missile—between 3,200 km and 6,000 km compared with the 2,400 km at present. It involves the possibility of adding electronic counter-measures and an improved guidance system to increase the accuracy of cruise. It must be an effective weapon system or the United States would hardly be investing in it so heavily.

The Government's problem is that they have all their eggs in the Trident basket. The Minister took my right hon. Friend the Member for Plymouth, Devonport (Dr. Owen) to task earlier in the debate for suggesting that the present friendly relationship between the Prime Minister and the United States President may not guarantee that any future United States Administration would deliver the Trident missile. It is worth bearing in mind that Trident has only just had its first trials and is not due to be in service in the United States until 1989.

There are others who have doubts about whether it is sensible to depend on the total commitment of future Administrations in the United States to provide Trident. For instance, on 24 January doubts were raised by the defence correspondent of the Daily Telegraph, which is not known for its unswerving support of the alliance parties. He raised the spectre of what he called "enforced nuclear disarmament". He went on to talk of cruise as a sensible option to explore. In his conclusion, he came out more strongly in favour of Anglo-French co-operation, saying: To work towards the creation of what would be a genuinely independent Anglo-French deterrent would be the best of our available choices. The choice is basically between a cruise missile system and Anglo-French co-operation. That decision will have to be taken swiftly after an election, but it has to be taken in the light of the important and available facts. Those facts include the progress of arms control, the development of ballistic missile defences, the advice of the chiefs of staff, and detailed assessments of those parts of the Trident programme that can be modified for use with a different system. When we have all that essential information, we shall make our final choice, but the choice of system is not so important as the objective. Our objective is clear—that the alliance will maintain an effective minimum deterrent until it can be negotiated away in return for worthwhile concessions from the Soviet Union. Those worthwhile concessions would have to enhance British security, and, indeed, the security of our European partners. That, in my view, and in the view of the alliance, is the effective dual track approach that the British people want—sound defence and sensible disarmament.

Several hon. Members

rose—

Mr. Speaker

Order. The House knows that I have no authority to limit the length of speeches between 7 and 9 o'clock, but if hon. Members were to limit their speeches to 12 minutes between now and the winding-up speeches, everyone who has been present during the debate would be able to speak.

6.42 pm

Mr. Neville Trotter (Tynemouth)

For the life of me, I cannot understand how an Anglo-French missile would be truly independent. It seems to me that it would be wholly reliant on the French. I should have thought that that was an unwise move. The Americans are investing in cruise missiles for the present generation. We are investing in a system that must remain viable in 20 years time. That is an important factor in the decision that we have to make.

I shall not follow the hon. Member for Woolwich (Mr. Cartwright) down that road, because I should like to reinforce the excellent speeches by my right hon. Friend the Member for Taunton (Sir E. du Cann) and the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan) about the serious decline in the Western merchant navies. It is a problem not just for our own Merchant Navy, as has been said by my right hon. Friend and the right hon. Gentleman; all the NATO merchant navies are facing the same disastrous decline. At the Sealink conference in the United States last year it was noticeable that ever-increasing concern was expressed from both sides of the Atlantic about the reduction in this vital part of our defence strength.

It is all very well to talk about a pool of NATO ships. The pool is rapidly disappearing. There may have been enough ships even quite recently, but the decline is continuing at a rapid rate. It is high time that all the NATO countries paid more attention to this serious weakness. The problem is the fact that our shipowners are running commercial firms in very difficult industrial circumstances. The general freight rates are no higher now than they were nine or 10 years ago. It is not surprising that, against such a background, the low-cost Third world crews are enabling their owners to obtain cargoes which Western shipowners cannot afford to carry.

The shippers and freight forwarders of the Western world will go for what is cheapest in deciding who will carry their cargoes. They have no regard to a crisis in NATO or to the need for war reserves of merchant ships. The House must press on the Government the need for action to be taken to help to prevent the further decline of our Merchant Navy. The specialist vessels are disappearing, such as the ships that would be needed for minesweeping, the tankers that would be required in a crisis for replenishing Navy vessels, and so are the cargo ships that would bring the war reinforcements across the Atlantic and provide the vital supplies for our civilian population. Economic forces are rapidly achieving what the U-boats failed to achieve in two wars.

I welcome the plans proposed by the Secretary of State for Transport for a Merchant Navy reserve of trained manpower and his suggestion of contributions to the extra costs of United Kingdom manning compared with ships manned with Third-world crews. However, I impress most strongly on the House the need for the Chancellor to give financial help to the British shipowners. There is no suggestion of funds being found by the Ministry of Defence to help to save our Merchant Navy, but the Chancellor can play his part. He must give the modest help, for which the General Council of British Shipping is looking in investment assistance to our Merchant Navy owners, to help to halt the decline, which is now reaching such serious proportions.

I should now like to concentrate on the ship ordering programe. The House is well aware of my long-standing interest and involvement in the shipbuilding and marine equipment industries. I pay tribute to the Ministry of Defence at Bath and the Royal Corps of Naval Constructors. That body, about which little is heard in the Chamber, is a world leader in many directions. It has led the world in GRP—glass reinforced plastic—mine countermeasure vessels. It has distinguished itself with new propulsion systems, and above all in the creation of our nuclear hunter-killer submarines. Even now, a new engine is being developed for the new class of SSN which we shall see in a few years' time. One cannot stress too strongly the importance to the Navy of the 18 hunter-killer nuclear-powered submarines that we shall possess when the present programme is completed. Only the two superpowers have ships of equal ability—indeed, they are magnificent vessels of great capability.

On the frigate programme, previous speakers have referred to their worry about lack of orders. I should like to re-emphasise that concern. How many frigates the Navy needs each year must depend on the lifespan of the frigates in service, and that depends on the extent to which they are given a major refit during their lives. I understand that it is becoming easier to reprogramme the weapon systems on modern frigates compared with old ones, so to some extent refits are more practical than they were some years ago, but at the end of the day the Navy must not be saddled with too many older ships. The age profile for the future will not be right unless we order a programme of frigates in the near future.

I am sure that we need to order at least two and half frigates a year—preferably three, but at least two and half. Regard should be paid to the full life cost, because capital costs now on warship building will result in operating savings in the future. The new ships are more economical than the old ones, especially in that they have a substantially smaller crew. In the long run that will lead to a saving over the cost of the life of the ship.

I should like to refer to the need to replace the Royal Fleet Auxiliary ships. The House knows of the battle last year over the order for the auxiliary oiler replenishment vessel. She is to be a massive vessel—one and a half times the size of the carrier Ark Royal. It has long been understood that there is a need for six of these vessels for the Navy. So far, one has been ordered, and I believe that Swan Hunter will obtain the order for the second in the not too distant future. However, we must go beyond those two. The Government should commit themselves now to a programme of six AORs, which are essential for the upkeep of the Navy in the years ahead.

I welcome the decision that has been taken to retain our amphibious cabability and to renew our amphibious ships. Swan Hunter is engaged on the design contract for a possible major refit of the two landing platform docks, Fearless and Intrepid. I hope that the Minister can assure us that shortly there will also be a study into the possible replacement of those ships as an alternative to their longterm refit. Those ships need to be modernised or replaced by the mid-1990s. We must make steady progress with our plans if this time scale is to be met.

I now turn to consider our landing ships logistics. The Sir Galahad was recently launched at Swan to replace the vessel that was tragically lost in the Falklands. What of the other landing ships? Will the existing ships be given a mid-life refit, or will they be replaced by new build? If they are to he refitted, I suggest that this should be done in series. It would he more sensible and economical for all four ships to be refitted at the same yard one after the other. However, I believe that it would be better to replace them with new ships which would be better and more capable. The new Sir Galahad has much more capability than the old vessel that it replaced. There is thus a possible need for a future programme for four new landing ships logistics.

The main need for new construction at the moment is for the ASS or aviation support ships. These acronyms do not convey adequately the nature of the ship that we are discussing. With regard to the ASS, we are considering a carrier, a very large major capital ship for the Navy. I am sure that this is the most important naval requirement at the moment. Only a carrier of this nature operating helicopters can offer the necessary capability to the Royal Marines for either an assault landing or, as would be more likely, for a landing in the north of Norway, in most inhospitable territory in the Arctic, where no port facilities are available.

The Government have wisely recognised the need to retain an amphibious capability. If that is the case, that need can be properly provided for only by ordering an ASS helicopter carrier. She would be a specialist ship of great importance to the Navy and could be provided either by building new or by converting a second-hand container ship. I believe that better value would be obtained from building a new ship. Such a ship would be a major and very necessary addition to the strength of the Royal Navy, and I cannot stress too strongly to Ministers the need to build such a vessel.

I referred earlier to the need to consider the through-life cost of a ship, the initial capital cost against the lower running costs of modern vessels. I want also to stress the need to prevent overstretching the manpower strength of the Royal Navy. It is not sensible to provide an artificial limit on the number of people serving. Discretion should be given to those running the Navy to allow them to exceed that figure if that is necessary.

In the long run, the problem will solve itself as new ships with smaller crews come into service. In the meantime, however, there is a danger of the Navy being overstretched. We must not be unfair to those who serve so magnificently in the crews of our vessels. They are ambassadors to the world. In his opening remarks my right hon. Friend the Minister referred to the GLOBAL deployment. That was a wonderful goodwill cruise to 33 ports in 26 countries. I also pay tribute to the way the cruise served as a shop window for the United Kingdom defence equipment industry. I am pleased to say that I have heard many tributes paid by the industry to the excellent efforts made by the admiral and his squadron during their round-the-world voyage.

If through artificial manpower limits we ask too much of our seamen we will be in danger of having an increasing problem with the retention rate. The position is far better now than it was under the previous Labour Government, as my right hon. Friend the Minister explained. However, the problem will exist if we are not careful, and we must ensure that there are enough men in the service to man our ships.

The mixed port crewing of ships has in itself led to considerable pressure on crews. When a ship arrives at its home port, many of the crew are far from their homes. In the old days, each ship was manned entirely from Devonport, Portsmouth or Chatham. That is no longer the case. A ship which has its home port at Rosyth for example, may have a crew most of whom live on the south coast. Even if a ship is home-ported in Portsmouth, many of the crew would live in or near Devonport. This separation and consequent travel puts extra strain on crews and is a further factor which should be borne in mind when deciding the manpower strength.

6.54 pm

Mr. Dick Douglas (Dunfermline, West)

It is not my policy this evening to follow the comments of the hon. Member for Tynemouth (Mr. Trotter). We have had a very interesting and stimulating debate. The Minister of State in his introductory remarks, painted a glowing picture of ordering performance. However, I want to follow the general theme raised by the right hon. Member for Taunton (Sir E. du Cann) and my right hon. Friend the Member for Cardiff, South and Penarth (Mr. Callaghan) about the need for a maritime strategy.

This evening we are examining the various roles of t he Royal Navy and the equipment and manpower that it needs to perform its task. As I do not believe that we can examine the Royal Navy on its own, I intend to extend the area of the debate to consider the merchant service and the back-up facilities in the royal dockyards which supply a vital service in keeping the Navy operational.

We are well through the decade of the 1980s and we should therefore be examining what our maritime resources will look like in the 1990s and into the year 2000. Reference has already been made to the decline of the merchant marine. The second report of the Select Committee on Defence 1985–86 referred to the fact that the availability of merchant shipping for defence purposes remains a matter for concern. The Select Committee's concern is given further support by an examination of the views of the General Council of British Shipping and we have already heard allusions to that in the remarks made by the right hon. Member for Taunton and others and from the trade unions involved in shipping.

The president of the General Council of British Shipping is on record as forecasting: on the best case assumptions, the UK fleet would in all probability be reduced to around 500 ships of 10 million tons deadweight by 1990 and to 400 ships of around 8 million tons deadweight by 1995. On a worst case assumption, there would be 400 ships of 11 million tons deadweight in 1990 and 200 ships of around 5 million tons deadweight in 1995. My right hon. Friend the Member for Cardiff, South and Penarth has said that there is an even more severe drop in tonnage in prospect. The view has clearly been put by the president of the General Council of British Shipping that the worst case assumption was "the more plausible".

The decline, real and anticipated, is made the more startling if we consider—albeit a peak year—1975 as a base. That showed the British maritime tonnage at 1,614 ships and about 50 million tonnes deadweight. The prospect is therefore that over a period of 20 years we should have lost 90 per cent. of our merchant fleet in tonnage terms. As an island nation dependent on the sea for essential imports, our merchant marine is ceasing to be of any significance.

The startling effect of that has already been referred to in terms of the balance of payments for sea trades which was in slight surplus in 1975, but has now a massive deficit of well over £1 billion. With regard to employment, we have seen a decline. Today those on the General Council of British Shipping register—the main source of manpower to the over-500 tonnes fleet—shows a fall from 74,000 in 1976 to 33,000 by the end of 1985. The right hon. Member for Taunton said that the current figure is 30,000.

The Government's response has been related to calling for reports, suggestions of measures to consider the costs incurred in joining vessels overseas and a proposal to create a Merchant Naval Reserve. These are interesting proposals, but they are in no way adequate to meet the challenge of decline. In my view, they are rather like taking an egg cup to clear the bilges of the QE2.

Before considering the Royal Navy of the future, I want to consider the position of British ships and personnel who are placed in danger by international conflicts such as the Iran-Iraq war. Members of the Select Committee on Defence recently paid a visit to the Gulf of Hormuz and witnessed some of the operations of the Armilla patrol. Great credit is due to the support given to Gulf shipping by the Royal Navy, but I hope that the Minister, when he replies, can say some more about the nature of these operations, even in advance of the investigation by the Select Committee.

I doubt whether the nature of the escort is adequate. Further, surely there should be a great reluctance in accepting that the Omanis, the United States, the French and ourselves should bear the costs of ensuring free, innocent passage of tankers when the major beneficiaries are the Japanese, who make no contribution.

Much reference has been made in the debate to the strategic deterrent. I do not have enough time to go into the details of why the nation chose to embark on the production of nuclear weapons. Many of the reasons relate to how Ministers in Governments of both political colours saw the United Kingdom's international political role and have little to do with strategic defence considerations. I concede that, like drugs, once acquired nuclear weapons are difficult to give up. But we have reached a stage in our international diplomatic and economic relations, which coincides with the growing obsolescence of our Polaris boats, where a decision to continue being a nuclear power would be against our economic interest and our strategic role in the NATO Alliance.

I do not argue that the West as a whole should give up the nuclear deterrent. I am arguing that a so-called United Kingdom independent nuclear deterrent adds little to the West's deterrent posture. On that point, I plead in aid the recent speech of the Foreign Secretary to the International Institute of Strategic Studies. Dealing with the defence that we need, he said: The West is faced by the Soviet Union's vast nuclear arsenal. The West must, therefore, have a nuclear capability of its own … the West's nuclear weapons have another function too. They impress on the Soviet Union that the West might respond to an unprovoked attack not merely with conventional weapons but also with nuclear weapons. All the stress of this section of an interesting speech is on the West as a whole and does not argue the case for a United Kingdom nuclear deterrent. When he comes to that point, the argument is not convincing.

I have a question for the hon. Member for Woolwich (Mr. Cartwright), who is very learned in these affairs. In what circumstances can he imagine the United Kingdom using a strategic deterrent, on which the Americans have so much influence, without the agreement of the United States? I leave that question for hon. Members to ponder.

Everyone is familiar with the view that if we abandon a nuclear deterrent and desire to play a full part in NATO by being wholehearted believers in collective security, there will be consequences in relation to our relations in the Alliance. Everyone is familiar with the view that it is in American interests to have troops in Europe. Indeed, only the other day in Denver, Casper Weinberger supported that opinion. But it is not a zero sum game. It is in the interests of the Alliance as a whole to keep a physical American presence in Europe. That is why broad suggestions that the United States is not welcome here are counter-productive.

Advances in weaponry give the United States the option of giving up some bases in the United Kingdom, but it should be a matter for discussion and agreement not just between the United Kingdom and the United States but among the Alliance members. As politicians, we must recognise the burden that is placed on democratically elected politicians in the United States. We cannot accept an American presence in Europe and simultaneously be reluctant to provide the necessary back-up facilities to support that presence, albeit with proper control.

The Government have put their case on the relative cheapness of Trident, but they have not taken on board the criticism of this burden on our conventional Navy and the effect on our NATO commitments. Recently, Vice Admiral Sir Derek Reffell. the Controller of the Navy said: To meet the Government's intention of maintaining a Naval Escort Force of around 50 capable frigates and destroyers means that we need a building rate of nearly three per year, if obsolete ships are not to remain in service. We are nowhere near that rate of ordering. Between 1979 and 1985, only nine such ships were ordered. Hence the stricture of the Select Committee on Defence that the arrears in the pattern of ordering are bound to mean that the average age of the destroyer/frigate fleet will rise, with implications not only for capability but for manpower demands and maintenance costs. I believe that to be true, despite the announcement in July 1986 of orders for type 23 frigates.

What was more remarkable about Sir Derek's speech was that, although it dealt with prospects for maritime operations in the 1990s, it contained little to comfort those of us who wish to see definite forward planning by and for the Navy. There were many references to studies, but few real decisions. For example, he said: In the mid 1990s, the UK will need a General Purpose Ship to replace…the type 42 destroyers. We are told that the naval frigate for the 1990s is one of the contenders. The feasibility study report is apparently almost complete and a decision will have to be made soon on United Kingdom participation. But, he continued, if for any reason the NFR 90 project should founder, we shall have to produce a national design. Perhaps the Minister will tell us at least what our back-up position is.

The concentration by the Ministry of Defence on the strategic deterrent is detrimental to the longer-term interest of the surface fleet especially and to our maritime capability, subsea and surface, as a whole.

I have taken up much of the House's time discussing the royal dockyards. I have no doubt that I and my hon. Friend the Member for Dunfermline, East (Mr. Brown) will take up even more time discussing the subject in later debates. I make no apology for that. My view has been clear from the outset and on the main thrust I have been supported by all those who have taken time to study the options.

The Secretary of State has almost concluded arrangements for Rosyth and Babcock Thorn and is in the process of handing Devonport to a group dominated by Brown and Root. I was extremely interested by the remarks of the hon. Member for Woolwich in this regard. As usual, the alliance seems to want to have it both ways. He said that he would not take the dockyard back into the public sector, but that he would want a trading fund. I hope that I am not misquoting him. How in God's name can he have a trading fund in the private sector? The right hon. Member for Plymouth, Devonport (Dr. Owen), interviewed from New York—this is the man who accuses the BBC of bias against the SDP and the alliance—said that he would be willing to have discussions with Brown and Root. I understand that he told the trade unions that he is in favour of a Government-owned public limited company, but the alliance is not in favour of bringing the dockyards back into the public sector. It is not just a question of their voting in different Lobbies at the same time. They have a kaleidoscope of views held simultaneously.

Dr. Owen

I am sorry that I was not here for the earlier part of the hon. Gentleman's speech. As soon as I saw his name on the board, I came in to listen to him. I am not in favour of a Government-owned public limited company, but if I must compromise with the Government and if I could obtain an agreement to set up a Government-owned plc, I would much prefer it to the agency management proposal. Anyone who has the interests of the dockyard at heart would go for a Government-owned plc rather than an agency management.

Mr. Douglas

The right hon. Gentleman is an adept compromiser. The House will have noted his words, as will his constituents in Devonport and mine in Rosyth.

I condemn the moves to bring in outside contractors. The improvements which the Ministry of Defence sought could have been obtained without the disruption and consequent loss of morale and impairment of production which will ensue from the haste of implementation and the lack of foresight in the Government's proposals.

Looking towards the final decade of this century, the House and the nation are witnessing our island, maritime nation rapidly ceasing to be a maritime power in terms of its merchant and naval marines. We are likely to end with no surface fleet to speak of, no merchant capacity for normal exports and imports, no back-up facilities in terms of dockyards and no shipyards outside the north-west of England. Of course, we might have a strategic deterrent that may give us a seat at some top international table, but our voice will be stifled by our international economic impotence.

7.10 pm

Miss Janet Fookes (Plymouth, Drake)

Even though your predecessor, Mr. Deputy Speaker, has issued his guidance about the length of speeches, it was my intention to deal with only one subject tonight, and that is the topic with which the hon. Member for Dunfermline, West (Mr. Douglas) dealt, the future of the royal dockyards, particularly Devonport. It is fair to say that the past three years have been a cruel burden for the dockyards to bear. There is nothing worse than uncertainty about the future. Many people will be glad when a final decision is taken, even if it is not necessarily the one that they want.

Last Friday, I met representatives of the non-industrial trade unions in the dockyard. They are agreed—I thought that this was probably true of the industrial unions also—that, above all else, they would prefer a trading fund. I carefully thought about this matter, as they asked me to, over the weekend. I must say openly and fairly that it is not a solution that I favour, and I never have done so. I have not changed my mind. The representatives treated me most courteously and raised several issues that I promised to raise in the debate if I were called. As a precaution, I have already sent a letter to my right hon. Friend the Secretary of State for Defence outlining these points in case it is not possible for me to mention them all in the debate.

The union representatives, as I have said, prefer a trading fund above all else, and they will go on, they say, fighting for it to the last possible moment. They are anxious also to know the results of the COMPEX exercise—that is, the experiment to see which is better, a refit in the private sector or one in the dockyard itself. They have asked why figures have not been released during the consultation period. I am particularly curious about them as well. I hope that it will be possible, before the consultation period is concluded, for them to be given that information.

The union representatives also expressed grave concern about what will happen in practice under the operational defects procedure when a ship suddenly requires repairs and the extent of the defects are not precisely known. They want to know whether there will be delays while costings are worked out on a commercial basis and, if work goes ahead without being properly costed, what will happen it there is a disagreement between the contractors and the Royal Navy about the precise figure to be charged for the work involved. They also strongly made the point that various deadlines have been put off to meet various requirements. They would like a longer period for consultation than the present vesting date of 6 April. They ask why that date should be sacrosanct when there has been slippage in the arrangements over the past two or three years. They dealt with other matters, but these are some of the ones about which they were most concerned. As I have said, I have put the other matters in a letter to my right hon. Friend the Secretary of State.

Although I may not agree in many respects with the hon. Member for Dunfermline, West, I agree wholeheartedly with his comments about the lack of clarity in the policy now being advanced by the official spokesman for the SDP. I fail to see how one can favour the trading fund arrangement and yet say that one is not committed to re-nationalisation. I hope that I have interpreted the words correctly. I am sure that that is what I heard, and it seems to me to be a contradiction in terms. A trading fund necessitates operating within the Civil Service, and if that is not renationalisation I should like to know what is. The issue reminds me of the character in "Alice in Wonderland" who, when asked what something meant, said, "It means what I want it to mean." That seems to me to be a good summary of the SDP's position.

As I have said, I have not favoured a trading fund. It was good that the present managing director of the dockyard and his senior management put forward their own team and firm to bid for the contract. I supported that move from the outset, although I think I am probably the only public figure in the Plymouth area to have done so. I must say to my hon. Friends on the Government Front Bench that I am disappointed that that bid was not successful, especially when we were told that the various bids were much of a muchness and that no one was absolutely out in front.

I hope—this will be part of my wish for any proceedings that continue after the debate—that there will be an assimilation of the senior management bid and an opportunity for the managing director and his senior colleagues to be involved in the running of the dockyard. That will give welcome continuity. The employees prefer the devil they know to the devil they don't, putting it at its lowest.

I have had contact not only with David Johnston, who is local, but with Brown and Root. The chairman asked to see me when the preferred bid was announced. I detailed various matters that were of concern to me and, indeed, to all those affected by the decision. The amount of commercial work that can be attracted into the dockyard to even out the troughs in Royal Navy work is one of the key issues. If that work can be attracted, it will be good from the point of view of the numbers employed in the dockyard and the economy of the city.

I can understand that possible contractors wish to be wary about precisely how much they commit themselves to, but I hope that my hon. Friends, in this last period before the decision is made, will be keen to pin them down as much as possible on exactly what they might hope to bring in in the next few years. I hope also that my hon. Friends will encourage them to make space available within the yard perhaps for other enterprises to be brought in, particularly people who were dockyard employees and who may now be independent of the dockyard.

I hope also that particular attention will be paid to the position of what I call the ex-Chatham employees. No doubt the House will recall that, when the naval dockyard at Chatham was closed, some displaced employees were sent down to Plymouth. That was a major upheaval for them. They are now faced with the further upheaval in the future arrangements of the dockyard. Obviously, I am concerned for the native people of Plymouth and what may happen to them. We owe them a special concern.

Dame Peggy Fenner (Medway)

Hear, hear.

Miss Fookes

I note that my hon. Friend said "Hear, hear," and rightly so. The position of the people of Plymouth should be assessed carefully. I hope that they will not suffer any further loss of employment as a result of any changes.

I hope, too, that my hon. Friends will press the winning contractor to make use of local purchasing power as far as possible. Under the old system, many purchases for the dockyard were made under a centralised system that did not benefit one iota local traders or the west country generally. They could buy locally and thus boost the local economy. I get the impression from the Brown and Root consortium that it is willing to do that. Again, the company needs to be pinned down firmly.

Arrangements for apprentices at the training centre have always been close to my heart, and there is considerable concern about the training arrangements under the new setup. At the weekend I was delighted to see that the number of apprentices who are to be taken on in the coming year is very much greater than had been thought. I hope that this is a good omen for the future and that the new contractor and my right hon. Friends will look closely at the possibility of placing any new technical college within the dockyard. It contains an enormous pool of expertise. The new technical college and the dockyard would go very well together.

The uncertainty at the dockyard should be ended, but not at any price. The changeover must be conducted as smoothly as possible, with very real care and concern being shown for those who are employed there. It is very much a family undertaking. Generation after generation have worked in the dockyard. I hope that, as far as possible, enforced redundancies will be avoided. If there have to be redundancies, they ought to be by natural wastage, retirement and voluntary schemes.

7.21 pm

Mr. Ted Garrett (Wallsend)

Hon. Members must have been impressed by the speeches of the two Privy Councillors, who made an impassioned plea for the future of the Merchant Navy. I think that my right hon. Friend the Member for Cardiff, South and Penarth (Mr. Callaghan) referred to speeches bouncing off Ministers. The right hon. Member for Taunton (Sir E. du Cann) takes some beating when it comes to persistence. I have heard him speak on three occasions on this subject with the same degree of skill, enthusiasm and knowledge. On this occasion he was ably backed by my right hon. Friend. If their speeches bounce off Ministers this time, they must be impervious to anything.

The Ministers and their advisers should take note of the position in which we find ourselves. Last week, in a moment of idleness, I was reading about the evacuation of Dunkirk. One of the myths is that the small ships did most of the work. However, it was the large ships—ships of the Merchant Navy, cross-Channel ferries, coasters and the like—that did most of the work 50 years ago. God forbid that that should happen again, but we live in a volatile world. The ships of Her Majesty's Merchant Navy may be called upon at any time to take preventive action or to take action to defend our interests. There are still many interests for this nation to defend. Therefore, I ask the Ministers to say to the Secretary of State for Transport that this question should be dealt with urgently. The Government must stop running down the maritime training colleges. If more ships enter the Merchant Navy, they will be useless unless they are manned by properly qualified crews.

We have already heard in the debate of the need to order type 23 frigates and other ships of that calibre. I was disturbed to hear that the control room on these vessels is being redesigned. That is the key part of such vessels, and if it is to be redesigned, does it mean that the ordering programme will have to be deferred? If it is deferred, will the Minister assure us that there will not be a row similar to that which broke out over Nimrod and AWACS concerning the best design and instrumentation? If the control room is to be redesigned, let it be dealt with quickly, smartly and with the minimum of delay.

The Minister wasted his half hour when he opened the debate by making political points against the Opposition parties. It was a disappointing performance. I should have liked to hear about the lessons that had been learnt from co-operating with other navies. I should also have liked to hear whether the exercises have been successful, whether the public are getting good value for money, whether any faults have been highlighted and which nations are cooperating well. Enormous sums of money are being spent upon increasing co-operation with other navies, but the Minister told us nothing about that.

The Minister was slightly off target when he laid emphasis on the professionalism of the men in the Royal Navy—and, I might say, in the Royal Marines—and also upon the amount of time that they spend at sea. He said that during the last year there had been no record of any member of the Royal Navy having run into any problems on visits abroad. It stands to reason tha the men will not have run into any problems; they are never off their ships; they are never in port long enough. These young men, full of vigour, never get a chance to see the world. That is another reason why so many of them do not enter into long-service contracts. The quality of life is not there. That applies to all the services. Unless service men are given something other than their commitment to a particular service, they will not remain on a long-term basis.

Swan Hunter, one of the prime contractors, is in my constituency. I do not want to build this up too much, but there is a feeling of alarm among the work force. Five of the ships that are being constructed are nearly completed. Of those, HMS Sheffield is due for delivery in 1988; HMS Coventry is due for delivery in April 1988; HMS Chatham is due for delivery in 1989; and the landing ship, Sir Galahad, which was launched in December 1986, is due for delivery in September 1987.

Within the next two years the Royal Navy will have five ships delivered to it on time. The ships will have been built with great skill and efficiency by a loyal and dedicated work force. However, despite the fact that there have already been 860 redundancies, there will possibly be further redundancies. The steel work on existing contracts is already running out. No steel workers are idle. but if redundancies are to be avoided, a flow of work will have to commence shortly. Therefore, I should like an announcement to be made soon about whether the next type 23 order will come to Tyneside.

I emphasise that there is no immediate threat of redundancy, but serious consideration must be given now to placing the order for the next type 23. The Ministry of Defence is governed by cash budgets, and unless the Treasury provides resources this year for the Ministry of Defence there will be a considerable trough in the steel-working capability of Swan Hunter in 1988.

All is not gloom. The outfit workers are fully loaded, but specific worries will develop in the late summer. The outfitting trade is used to peaks and troughs, but it is essential to keep programmes up to date.

The hon. Member for Tynemouth (Mr. Trotter) argued the case for the replacement of vessels rather than feasibility studies on Fearless and Intrepid. The Sir Gallahad is without doubt a fine ship. In the long run it will be value for money. Placing orders for ships to replace Fearless and Intrepid is better than redesigning them and putting them out to jobbing just to keep them going another few years.

The air support ship has been mentioned. The Secretary of State referred to it in his recent statement, but nothing has yet seen the light of day. I hope that the Minister will tell us whether any progress has been made in the placement of that contract.

Tyneside has experienced massive redundancies, but somehow the essential skills have been retained. If the Government pursue a policy of replacing old ships with new, if they honour their commitment to three frigates a year and to consider the redesign of the S90, for example, there should be steady progress. For the unenlightened, the S90 argument involves the choice between the long destroyers and frigates and the small, squat frigates.

If we get a decision on that, among other things, we should be nearer to attaining a well-equipped Navy with a high morale, and above all, a Navy which is able to defend this democracy of ours against any attackers, from wherever they come.

7.32 pm

Mr. Peter Griffiths (Portsmouth, North)

In such a debate as this, the Government receive little praise and much criticism. I shall say some kind words before criticising them.

I was pleased to hear the Minister of State reaffirm the Government's commitment to maintaining an escort fleet of about 50 vessels. I was interested in his comment about that proportion of the fleet which is available at sea within 48 hours. It is significant that, over about a decade, the proportion of availability has risen from 72 per cent. to 84 per cent. However, 84 per cent. of fewer than 50 is still considerably less than 72 per cent. of what must have been almost 70 when the previous figure was decided upon. The number of ships available in an emergency has been reduced.

It is important that we should have a clear picture of how the fleet is to be maintained. The present ordering rate will not guarantee an escort fleet of about 50 vessels. It cannot. Since we are now moving away from the concept of large-scale, mid-life refits, the danger is that we shall have fewer vessels and that on average they will be older.

I trust that a clear announcement will be made about the Government's commitment, not just on the number of ships in service, but on the ordering programme to make that commitment practical.

The possible expansion of the ordering rate, either to maintain the Government's commitment or because there might be an increase in world tension, will depend on shipyards being capable of meeting the demand for warships. They must he able and willing to build them within existing yards and with existing work forces. That is why I make no apology. for reminding the Minister that the Vosper Thornycroft yard on the south coast is capable of building type 23 frigates at the price, to the quality and in the time required. That yard is necessary to maintain the Government's commitment to an escort fleet.

The same yard is the national leader in building glass reinforced plastic vessels. It is important to retain the continuity of that yard for the single role minehunters programme. Those vessels can be built at Vosper Thornycroft on the south coast more cheaply than anywhere else. Its capacity could quickly be lost without continuity of ordering. The sheer cost of putting back together the capacity would result in the programme becoming grossly inflated in price.

The Navy relates closely to the civilian population in a city such as Portsmouth. The Navy has for long been welcomed in Portsmouth. It is liked and wanted. It would be a great boost to the relationship between Portsmouth and the Navy if the same vigour, efficiency and expertise which the Navy shows when it is solving a problem on a social occasion in the city were shown when the Ministry of Defence is undertaking a study.

In Portsmouth the Eastney barracks are wasted. This magnificent building is the perfect place to house the Royal Marines school of music. For years we have waited to learn exactly what is to happen. We have heard all the arguments. A year ago we heard that the argument which favoured Deal was not to be given as much weight as originally suggested. We now need a firm and final decision on service schools of music. In my constituency we need a decision on the Royal Marine school of music, which I think should be housed at Eastney barracks.

A similar decision should be taken on the use of land in a city such as Portsmouth, which is densely populated. Portsmouth has a fine rugby club which is 100 years old this year. It uses rented naval land. Long before I became a Member of Parliament people asked whether the Navy might want to take back the land for some unknown purpose. Since 1979 I have asked successive Ministers whether the Ministry might give up the land and allow the Portsmouth rugby club to take out a longer lease or even purchase the freehold. Only a few weeks ago I received the same answer as that which I received last year and the year before that. I accept that the signature was different but the message remained the same. I was told yet again that the study is continuing. Surely it is not difficult to decide whether the Navy will ever require a piece of open land that is currently laid down for rugby pitches. It does not use the land and what conceivable use will it have for it in the foreseeable future? I ask for a firm and final decision to be made.

The relationship between the Royal Navy and the civilian population is highlighted by the relationship between those who serve in the Navy and their families. One of the ways in which the highly commendable improvement in the availability of ships for service at sea has been achieved is by causing sailors to spend more of their time away from port, or at least away from their home port. This has placed an enormous stress on the marriages of young men in the Navy. I am aware of the problem because of the number of broken marriages that come to my notice during my surgeries. We must understand that, in terms of expanding the Navy in response to an emergency, there is a problem in retaining young men after they have been recruited into the service and have developed the expertise that gives them the greatest value as middle-ranking personnel. Young men will be encouraged to make the Navy a lifetime career if we can ensure that the personal services that are available to Navy families when husbands are away at sea are as efficient and sympathetic as possible.

I am sure that the role of the Royal Navy will continue to be a source of great pride to us all, but it would be of great help if the Ministry of Defence would make decisions as quickly as our sailors are called upon to make them at times of national emergency.

7.42 pm

Mr. Nicholas Brown (Newcastle upon Tyne, East)

It is a pleasure to be called to contribute to the debate immediately after the conclusion of the remarks of the hon. Member for Portsmouth, North (Mr. Griffiths). I am happy to reinforce his criticisms of the Government, especially those directed to their ordering programme. As my hon. Friend the Member for Clackmannan (Mr. O'Neill) has said, these debates are taking on an increasingly familiar pattern. Members on both sides of the House express their support for the Royal Navy and the merchant marine and express fears about future procurement. Labour Members express these fears in the context of the Trident programme. The Government respond by denying that the Trident programme is affecting the availability of resources for conventional procurement, but they do not announce any warship orders. We have a Minister who is responsible for defence procurement but he has not procured any warships, and he will not announce any warship orders during this debate.

When we last debated these matters we were told that the Government's commitment to a 50-ship surface fleet had become a commitment to a fleet of "about" 50 ships. A more realistic assessment suggests that there will be an aging surface fleet of 41 to 45 ships. Before Christmas I asked the Secretary of State for Defence about the type 23 ordering programme. I asked specifically whether it was true that the programme had been rescheduled so that the type 23–01 would go to Yarrows—that is the lead of class—the 02 to Swan Hunter and the 04 and 05 to Yarrows, and that the 03, 06 and 07 had been effectively dropped from the programme. The Secretary of State did not deny this. Indeed, he did not even confirm that the 06 and 07 are still in the long-term costings. Many of us believe that the Government have no intention of ordering these three frigates or an AOR this year.

I turn to the issue of amphibiosity, which is the word of the Secretary of State for Defence. It is a useful way of describing an issue in a word. The House was promised last year a full statement, and in December the Secretary of State announced the design study of the possibility of refurbishing HMS Fearless and HMS Intrepid. The hon. Member for Tynemouth (Mr. Trotter) and my hon. Friend the Member for Wallsend (Mr. Garrett) have mentioned the alternative, which is a design study for a replacement vessel. There is the even more welcome possibility of building a replacement vessel.

The landing platform dock, with its floodable dock at the rear for landing craft, has been responded to, at least in part, quite properly by the Government, but that does not bring the debate on amphibiosity to an end. There is a need to renew the defence role formerly carried out by HMS Hermes, which is the provision of seaborne air support for troop landing craft. The concept is described as aviation support ships. The Minister has said nothing so far about this when dealing with amphibiosity.

A separate issue is the future of landing ship logistic vessels. The launch of the Sir Galahad was a great Tyneside shipbuilding occasion; the entire community united and there was a tremendous festival atmosphere. Unfortunately, such occasions are too rare on Tyneside nowadays. The new Sir Galahad is not an exact replica of its predecessor or its sister ships, and the role that it and its sister ships have been designed to undertake is the landing of tanks and other vehicles on beaches. The refurbishment of the sister ships should be on the agenda when it comes to a debate on amphibiosity. Unfortunately, there has been no commitment from the Minister.

The Minister would not expect me to let a debate of this sort pass without mentioning the AOR. Tyneside's grievances are fourfold. There is an almost unanimous view on Tyneside that Harland and Wolff took what is known as a flyer in making its bid. In other words, it priced it and did not cost it. Swan Hunter, being privatised, did not dare do that. Secondly, it is our view on Tyneside that public money is being used to underpin the Harland and Wolff bid. Thirdly, it is our view that the promises of rigorous scrutiny of the cross-subsidisation issue do not stand up to close examination. Fourthly, it is our view that the eventual decision on AOR1 was political and that Tyneside lost, just as it did with the type 24 No. 14 frigate.

Mr. Archie Hamilton

rose—

Mr. Brown

I shall develop these issues, but, first, I shall give way to the Minister.

Mr. Hamilton

Will the hon. Gentleman accept that the view which he has expressed is not shared by Touche Ross, the consultants who were brought in to consider these matters?

Mr. Brown

I shall deal with the "independent consultants" and the relationship between them and the Northern Ireland Office, to which they have to report.

First, there is the question of Harland and Wolft's flyer on its bid. The delay in supplying the drawings to Swan Hunter so that it could bid for the second vessel has led to considerable suspicions in just about everyone's mind. The Government's explanations for the delay have been unconvincing. Their different explanations suggest that they have not succeeded in getting their story straight. let alone providing a real and candid answer. It is my understanding—I am willing to be corrected if I am wrong—that the Harland and Wolff design for the AOR was not model tested. The tender was based on unapproved drawings, which means that they were not Lloyd's classified and did not have Department of Trade and Industry approval, or did not when the bid was submitted.

I accept that it is not necessarily improper to take that approach as a private sector company that chooses to take a commercial risk, which means the high-risk route rather than the more secure route. A private company will have to bear the financial consequences of so doing, but Harland and Wolff is not in that position and is not subject to that commercial discipline. Swan Hunter decided that it would have to take the more secure route, and that led to one of the edges enjoyed by Harland and Wolff.

The cross-funding issue is an important one, and an illuminating article appeared in the Belfast Telegraph of 26 November 1986. It revealed that the Department of Trade and Industry would give £68 million in aid to Harland and Wolff for 1986–87. A number of hon. Members have spoken about their shipbuilding communities' traditional relationships with the Royal Navy, and their communities' employment bases are underpinned by the royal dockyards. None of those communities had £68 million for one financial year invested by the Department of Trade and Industry.

Of the £68 million, £2 million will create, according to the article, Harland and Wolff Enterprises—that will be the day—to help the redundant men at Harland and Wolff obtain different employment. That is a worthy objective and I have no quarrel with that expenditure I calculate that a further £8 million will be spent on redundancy payments. That: seems to be a reasonable supposition. But it is legitimate to ask what will happen to the other £58 million and to expect an answer. Will it increase Harland and Wolff's working capital? If so, what restrictions will it place on the company's borrowing powers? Will Harland and Wolff be able to use this money, for example, to bring forward Ministry of Defence work prior to payment? All the other shipbuilding communities will ask: why should the state underwrite Harland and Wolff's recent operating losses and at the same time push every other shipbuilding community out into the cold?

I thought that the position of the Government, and of the Prime Minister, was that the House of Commons could remain assured that the Harland and Wolff bid was "unsubsidised and comprehensively costed". That was the position at least until last December when I had my tiff with the Under-Secretary of State for Defence Procurement. I now understand that is not quite an accurate portrayal of the Government's position. A more accurate portrayal would be as follows: the independent consultants, to which the Minister of State referred, have assured the Northern Ireland Office, which is a not disinterested party, that the bid is unsubsidised and comprehensively costed, hence the phrase. That assurance was relied upon by the Secretary of State for Defence and the Prime Minister when they gave their assurances using the same phrase—the Secretary of State for Defence in the House and the Prime Minister in a letter to me.

The Northern Ireland Office—this is the crux—is not independent in this matter. I am not arguing that it should be, but I believe that someone who is really independent and beyond influence or pressure should have scrutinised the Harland and Wolff bid and should be monitoring the cross-subsidy issue and progress on the work. No one on Tyneside has confidence in the current monitoring procedure. It allows the Northern Ireland Office and the consultants which it employs to be judge and jury in their own cause.

The Government's excuses and reassurances do not stand scrutiny. The reason—it underpins everything that has happened—is that the AOR1 placement was a political decision. It would have been legitimate for the Government to admit, "Yes, this is a political decision." Had they done so, they would have had an obligation, having cheated Tyneside of its work, to make good that hurt and to bring forward more shipbuilding orders. Shipbuilding is the sole employer in a part of the area that my hon. Friends the Members for Wallsend (Mr. Garrett) and for Jarrow (Mr. Dixon) represent. The Government have broken the employment base of that community with cynical disregard for the people whom they are putting out of work.

Swan Hunter does not just build warships. It is a mixed yard with a long tradition. Only recent Government policy has forced Swan Hunter to look solely towards shipbuilding. I strongly support the points made by my right hon. Friend the Member for Cardiff, South and Penarth (Mr. Callaghan) and the right hon. Member for Taunton (Sir E. du Cann). As I have said, I hope that I do not do any harm to the cause of the right hon. Member for Taunton by endorsing it. I wanted to make some points of my own on the merchant marine but they would be superfluous after those two excellent speeches. I should like, first, to underscore the importance of the issue about which my right hon. Friend and the right hon. Member for Taunton spoke and, secondly, to add my endorsement to the demands for a full response by the Government.

7.54 pm

Sir Paul Bryan (Boothferry)

I declare my interest as a deputy chairman of Furness Withy and Company, so hon. Members will perhaps not be surprised if I turn for a few minutes to the speeches of my right hon. Friend the Member for Taunton (Sir E. du Cann) and the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan). They have dealt so effectively, so thoroughly, and so often with this subject that there is nothing further that I can usefully add; except to press my hon. Friend the Under-Secretary of State for Defence Procurement to answer some of their points.

I say that, not sarcastically, but because last year my right hon. Friend the Member for Taunton made a similar speech, just as effectively, and it was not mentioned by the then Under-Secretary of State. The only comment by my right hon. Friend the Minister of State followed an intervention, when he put the responsibility on my right hon. Friend the then Secretary of State for Transport. In one telling phrase he underlined one of our main complaints—that the responsibility for this important subject is spread over too many Departments.

Over the past 10 years we have followed the decline in our merchant fleet. The House will be relieved to hear that I shall not produce a lot of figures, because they have been vividly produced already. The truth is worse than the figures; for the figures do not convey the drain on our reserves of personnel and on management and the lack of new blood in the industry. Against that declining background, management in the industry has retained its skill and judgment remarkably. It has not suffered from spectacular bankruptcies on United States lines. Because management is able, naturally it has had to diversify into more profitable businesses; so famous shipping names no longer necessarily denote the ownership of many ships.

We should note also that many of the ships now afloat were built pre-1984 and under a far more favourable fiscal regime. It follows—this is the bad news—that there is no reason to expect such ships to be replaced by new investment, whether in new or in secondhand ships, as long as management's capital costs net of fiscal relief and other aids are higher than those of its competitors. No doubt we can discuss those matters in budget debates. I should like to make one point, however, because it is the most immediately serious one, about the adequacy of Merchant Navy support for the Royal Navy. Each year since the Falklands campaign we have been assured that the support is adequate. Each year this sounds less likely.

I return to the quotation used by my right hon. Friend the Member for Taunton from the PBOS—the planning board for ocean shipping—communiqué on the future of NATO shipping, which I think has been sent to all hon. Members. It stated: The Board concluded that for certain categories of ships the situation is already criticial". Whatever the situation, it must be clear that, left to the free market, sooner rather than later, the Navy will be short of the support that it needs. Surely, in the end, the Government will have to intervene to ensure that some categories of ships are available and manned. However one disguises this operation, considerable subsidisation must be involved in one form or another. A scheme to this effect should be set up now, because, the longer we delay the less likely will our shipping companies be in a position to co-operate efficiently.

One respect in which I perhaps part ways from my right hon. Friend the Member for Taunton is his belief that Government determination and wisdom can achieve our aims without great expenditure. I very much doubt that. In some form or another—it might be called a subsidy or a fiscal stimulation—a great deal of money will have to be spent wisely to achieve the required results.

If we do subsidise some categories of ships, the Government should insist that they are built in British yards. That is against past practice, but as our yards now build only 1 per cent. of world output, and our shipping orders constitute only 1.4 per cent. of world orders, a change in Government policy will not shake the world as it would have done 10 years ago. Indeed, I doubt whether it would provoke any retaliation.

I want to surprise my hon. Friends on the Front Bench by complimenting one of their colleagues. I pay tribute to the speech of my right hon. Friend the Secretary of State for Transport to the General Council of British Shipping on 10 December. He clearly takes his new job very seriously. He gave a detailed study of the merchant fleet, the like of which I have not heard from a Minister for a long time. He announced three initiatives, and I shall not brush them aside quite as brusquely as did the right hon. Member for Cardiff, South and Penarth.

My right hon. Friend, on the question of establishing a Merchant Navy reserve, said: The objective is to provide a pool of experienced seafarers in time of need … I intend immediately to invite the General Council of British Shipping and the seafaring unions to give me their views on what the form and duties of such a Reserve might be. My preliminary views, and I emphasise they are preliminary, is that the provisions could he very simple: a declaration of willingness to serve, an address, and an annual bounty".

That was only two months ago, so I do not expect very much to have happened. However, as we have not yet heard anything about that, I hope that the Minister will tell us how far my right hon. Friend has progressed in his discussions with the GCBS and the unions, and what results we can expect.

On my right hon. Friend's second initiative, he said that while he had ruled out incentives to shipping investment and general subventions to operating costs, the Government had decided to discuss with the industry the possibility of assisting with the extra cost of employing UK crews on deep sea vessels. I want to know exactly what that means. Is it something very big, something that will cost a great deal of money, and something that will mean a great deal to our fleet? Perhaps the Minister could elaborate on that when he replies.

8.2 pm

Mr. Gordon Brown (Dunfermline, East)

The one certainty in every Navy debate in this Parliament is the ever-increasing concern on both sides of the House about the neglect of the Merchant Navy. That was most eloquently described by my right hon. Friend the Member for Cardiff, South and Penarth (Mr. Callaghan), the right hon. Member for Taunton (Sir E. du Cann) and the hon. Member for Boothferry (Sir P. Bryan). Indeed, there is ever-increasing concern about the under-funding of the Navy itself. The gap between its resources and its commitments has led the Minister, implicitly if not explicitly, to admit that the surplus fleet will be reduced to below 50 within a short time. That has led to speculation, not least in the press comment on the so-called towpath papers, about less research and development on behalf of the Navy, a cut in the auxiliary forces available to it, and even a cut in the number of hunter-killer submarines.

With that gap between the Navy's commitments and its resources, it is incomprehensible that the Government, in their attempt to bridge the gap, have put so much faith in the economics of privatisation. It is an untried and untested option for many parts of the naval services. For the royal dockyards, even the Ministry of Defence concedes that it will cost more rather than less in the next few years. To place all our faith in economy by privatisation, when all the evidence shows that, on the contrary, no real savings will result, is not defence economics. It is not even the economics of the grocer's shop about which we have become accustomed to hearing. Nor is it the economics of good housekeeping. It is more the economics of a betting shop—a huge gamble with our national defences, the recklessness of which is nowhere more apparent than with the royal dockyards.

Let us remember what the Government have done to the royal dockyards in the past few years. We had. a defence Minister who could not leave well alone. Just a few months after the dockyards had excelled themselves during the Falklands conflict, he decided that ideology required that something had to be done. We then had a Secretary of State who spurned all the subsequent reports which rejected the option of privatisation and chose an arms salesman with no experience of the dockyards or even of the Navy to advise him on future options for the dockyards.

A few months later, the Government rejected all advice. They rejected the advice of the Select Committee on Defence, at which a Ministry official had described privatisation as a high-risk option for our fleet and for our naval defences. They then rejected the advice of the Public Accounts Committee, which at least showed some concern for the problem of finances, being more concerned with financial reality than with the economic theory that so obsesses the Government. Legislation was then introduced, and the Government had to accept the clear legal obligations to consult the work force about social and economic consequences, especially the consequences for jobs and conditions of service. Yet the Government now refuse to enter into the detailed consultations that are so necessary to the welfare of the work force.

If it is too late to persuade the Government to rescind the Dockyard Services Act 1986, it is not too late to make them face the problems that they are creating. We warned them that the costs of this exercise would far outweigh the benefits and that an exercise which began as one with no risks and the expectation of substantial savings would—and now does—involve substantial risks and no real savings, at least for the next three years. We also warned that hundreds—indeed, thousands—of jobs were being put at risk without any financial benefit to the Navy, the defence budget or the Exchequer. In the past few years, a succession of Ministers have given assurances about who will control the dockyards, about the jobs that will remain and about the money to be saved, but the assurances so freely given in the early stages of the discussion have become the betrayals of 1987.

I wish briefly to mention foreign ownership. When the whole business began in December 1985, the Minister told us that tenders would be sought from British companies, and that if any company won a contract and then became controlled by a foreign shareholding, that company would lose the contract. Now, however, an American company is not only a shareholder but the principal shareholder in the consortium that is to take over Devonport. It is ironic that no American private company, let alone a British one, can control an American dockyard, but an American company can walk in arid take control of a British dockyard.

From what we heard earlier from the Under-Secretary of State, who is no longer present, that control will be exercised without any real veto written into the contract as to what additional work can be done and for which foreign powers. In the case of Rosyth that is not an academic question, because it is easy to envisage a situation in which control of Rosyth dockyard, which is apparently to be in the hands of the Babcock International plc consortium, could also move overseas as a result of City takeovers and transfers of control. We already know that Babcock Power has become Babcock Energy for the purpose of the consortium running the dockyard. Babcock Energy is subject to interest by GEC and may be subject to the interests of another international company. However, there is nothing in the legislation or in the regulations that we shall discuss later this week, and nothing in the contract as we understand it, to prevent control of Rosyth dockyard from moving abroad under the present proposals.

If there are no proper safeguards against foreign control, there will be no proper safeguards for the jobs of the work force. The dockyard shares several similarities with the Navy. It requires a strategic capability, a minimum reserve, and a mix of skills and expertise if it is to be able to respond to the sort of emergencies that arose during the Falklands war, when dockyard workers were required and prepared to work night and day to get the ships and submarines of our Royal Navy out to sea.

There is nothing in the legislation, the regulations or the contract to protect the strategic minimum number of workers that is required if we are to maintain a fleet, especially in the event of an emergency. At earlier stages, we were assured that something would be written into the contract. However, as I understand it, the Minister now regards it as a virtue of the contract that the only mention of the work force is in terms of the numbers that the Ministry is prepared to fund for redundancy. How ironic that the Ministry is now prepared to fund 1,000 redundancies in the dockyard, without saving a penny in the defence budget or in the running of the royal dockyards.

When we began in 1983, I was told that the numbers employed in Rosyth dockyard would increase. However, by 1985 I was told that they would remain stable. Later we were told that 4,000 jobs would have to go. Now we are told that 1,300 jobs will have to go, but the Government will not save a penny as a result of the loss of those jobs, and we cannot imagine that the Navy will be better serviced as a result.

Time is short, but I should like to make another point. When the exercise got off the ground we were told that some measures would be taken to ensure that any losses in manpower in the dockyards would lead to the Government taking additional measures in the regional aid budget, or elsewhere. In one document, we were told that the Minister of Defence wished to discuss with all concerned how the effects of any unemployment might be alleviated through the Government's regonal aid programme and other appropriate measures. Again, the Ministry of Defence has not discussed with my district council, the regional council or, as I understand it, the Scottish Office, how to alleviate the effects of any redundancies that might take place. That becomes ever more vital when one realises that redundancies in Fife have risen at three times the rate in Scotland during the past year. About 3,000 more people are now unemployed in Fife than a year ago, and it is expected that the redundancies in the coalmines and the electronics industry, as well as in the dockyard, are likely to increase over the next month. In replying to the debate, I hope that the Minister will give an assurance that the Ministry of Defence will take the necessary measures to alleviate any effects of the action that it is about to take.

Finally, no other country in the world with a Navy of comparable size would contemplate the measure that the Government are imposing upon the dockyards. No other Government but this ideologically driven and committed Government would contemplate transferring the dockyards to the private sector in the way in which the Government are doing, and subordinating the national security interest to commercial gain. Even under this Government, Conservative Members serving on the Select Committee on Defence have warned about the consequences of what the Government are doing. If this Government will not reverse this dangerous policy, which is unpatriotic and idiotic, the next Labour Government certainly will.

8.15 pm

Mr. James Couchman (Gillingham)

I am delighted to be called to speak briefly this evening, and I shall be brief because I wish to raise a matter that is properly a constituency matter and which might have been thought to have been a suitable subject for an Adjournment debate. However, tonight's opportunity was too good to miss so I make no apologies for raising this subject.

My predecessor, Sir Frederic Burden, spent the whole of his long career in the House defending the Royal Navy base and dockyard at Chatham against the depredations of those who would close it. He was ably aided and abetted by my hon. Friend the Member for Medway (Dame Peggy Fenner) who I am pleased to see supporting me this evening. Ultimately, the doughty advocacy of that great establishment was defeated by the defence review of 1981, in which Sir John Nott proposed the closure of Chatham.

It fell to me in my maiden speech of 20 July 1983, Hansard column reference 432, to make the final appeal during the debate on the Defence Estimates for the retention of at least the nuclear refuelling and refitting facility. My plea failed and later in that session, during the Royal Navy debate, I made a well-received valedictory speech that marked the end of 450 years of the Royal Navy's presence in my constituency, or perhaps I should say almost the end of the Royal Navy's presence, as I shall explain in a few moments.

Had my plea for the SSNs to continue to be refuelled and refitted at Chatham succeeded, there would be no need for me to speak this evening. When the dockyard finally closed on 31 March 1984, the Ministry of Defence retained a tiny foothold in the dockyard and renamed it MOD Gillingham. That small foothold is the waste management facility for radioactive contaminated components from the refuelling and refitting of the SSNs and the burial site for low-level waste alongside.

As I said, if the SSNs were still being worked on at Chatham, clearly the waste management facility would be in regular and continuous use. However, that is not so. The waste management facility was put on a care and maintenance basis when the dockyard closed, and I believe that I am right in saying that there have been no additions to the redundant but radioactive components that are stored in the storage shed. There have been additions of radioactive waste to the burial ground, as the refuelling and refitting facility has been cleared and decontaminated. The decontamination of that nuclear facility's building is now complete and the burial pits have been filled and capped off.

I had hoped, after the traumas of the closures of the Chatham dockyard, that I should be able to confine my interest in those 500 acres to the redevelopment and future commercial and industrial prosperity of the site. Indeed, that was the case until last Monday, when it was brought to my attention that an article in New Scientist magazine of 22 January 1987, written by Mr. Roger Milne, suggested that the Ministry of Defence was considering the transfer of redundant radioactive items such as bulkheads, pumps and boilers from Devonport dockyard, where storage is said to be limited, back to MOD Gillingham, for storage on an interim basis. The source for that article was the report of Her Majesty's radiochemical inspectorate for 1985–86.

On being alerted to the article, my reaction was to put down immediately a question for answer last Tuesday, 27 January, and to ask my right hon. Friend the Secretary of State whether he had any plans for transferring nuclear waste from Devonport to Gillingham. Almost a week later, I still await an answer to my question. On Tuesday afternoon, Mr. Speaker generously allowed me to ask supplementary questions during Defence Questions and the statement on the management of the Royal Dockyard. To those two oral questions, I received courteous but less than illuminating responses.

The article from the New Scientist received much exposure on Tuesday in the Medway towns from press, radio and television. That reaction has been predictable. There has been outrage that, having dealt a hammer blow to employment in the Medway towns by closing the dockyard, the MOD should now seek to bring its unwanted nuclear dross back from Devonport to Gillingham. I will not indulge in the ludicrous, scaremongering hyperbole of the prospective Liberal and Labour parliamentary candidates in Gillingham and Medway respectively. Perhaps Opposition Members would like an example. One of the gentlemen spoke of the "catastrophic proposal" which would end the chance of commercial or residential development near the dockyard, and warned that dumping could turn the north of Gillingham into a "ghost town". The other gentleman is quoted as having said: Why the hell should anyone at this time think of dumping dangerous waste in an urban conurbation of a quarter of a million people? There is already a tremendous fuss about dumping low level waste by Nirex in rural areas. But now they are talking about intermediate waste here—it's just incredible.

I shall not indulge in that sort of language. Those outbursts suggest that Gillingham is about to be transmogrified into a second Chernobyl by a wilful decision of some unnamed Minister of Defence official. However, I must make it absolutely crystal clear to my right hon. Friend the Minister that I am upset that Ministry officials should have made their thinking public through its publication in an obscure annual report of the radiochemical inspectorate rather than through proper formal consultations with the local borough council and me. That demonstrates a woeful insensitivity to the relationship between the Ministry of Defence and the Medway towns. I must also make it abundantly clear that in the absence of such consultations I am completely opposed to the transfer of nuclear waste and contaminated items from Devonport to MOD Gillingham.

I spent Saturday morning at MOD Gillingham to appraise myself at first hand of the circumstances in which contaminated waste is presently stored and has been buried. I am satisfied that that facility is properly managed, that those who work there carry out their duties conscientiously and efficiently and that there is no danger from the items at present stored there. But the items at present stored there are mostly cobalt 60 contaminated and have a fairly short half life. They have already been stored there for some years and the idea of having more intensively contaminated material there does not appeal to anyone.

It is a shame that the local liaison committee which operated before the dockyard closed no longer exists, because it would have been an appropriate vehicle for the local consultation which the Ministry thought it might conveniently forgo. Any transfer of unwanted contaminated items should be from Gillingham to Devonport and not the reverse. The great Royal Navy base and dockyard at Chatham is being redeveloped to one of the most exciting development plans in the United Kingdom, if not in Europe. In order not to prejudice the success of that development I must ask my right hon. Friend to set aside any further thoughts of transferring nuclear waste into MOD Gillingham. The people of Gillingham and the Medway towns retain their great affection for the Royal Navy, but they have no desire whatever to embrace the nuclear waste of the Royal Navy at Devonport.

Dame Peggy Fenner

Although nine tenths of the acreage of the former dockyard is within my hon. Friend's constituency, he and my colleagues know that for many years Chatham dockyard had a nuclear refitting capability. We were proud and happy to support that work and through the liaison committee we maintained a most wonderful relationship with the people in the towns and the local authority. I hope that my right hon. Friends in Government will find it unthinkable to transfer work from our dockyard, with the best dockyard mateys in the business, to Devonport and to suggest that in return we receive Devonport's waste. That would be indefensible.

Mr. Couchman

I am grateful to my hon. Friend for her support in this matter and I hope that my right hon. Friends will see us as a double act who command double the attention.

8.23 pm

Dr. David Owen (Plymouth, Devonport)

I know that two further hon. Members wish to speak, and as I shall speak about a constituency matter I shall not develop other aspects of the Navy debate which I might otherwise wish to do.

The right hon. Members for Taunton (Sir E. du Cann) and for Cardiff, South and Penarth (Mr. Callaghan) spoke about the Merchant Navy, and I can well understand that we do not wish to go further into the problems that it faces. However, as a member of the all-party group which is trying to draw attention to those problems, I wish to stress my deep anxiety about what is happening, particularly in terms of strategic importance.

A consequence of the Channel tunnel may be a reduction in the ferry fleet which is an important part of our reinforcement to the central front in times of tension. It is hard to project what will happen to the Channel and ferry traffic on the east coast. It may be more robust than some forecasts have led us to believe, and I tend to believe that may well be the case, but, I am worried that people will not invest in new vessels because of uncertainty. If ever there was a case for Government help, it is to give specific capital help for building new ferries to provide confidence to carry the operators over this difficult period when no one is certain what will happen with the Channel tunnel.

I recommend that to the Minister as a practical suggestion for maintaining the strategic option of that reinforcement capability from the merchant marine in that section.

It is immensely important to maintain the facility for servicing North sea oil rigs. That aspect of our maritime function is of fundamental importance.

I hope that the House will excuse me if I make a speech as a Back Bencher about my constituency. Devonport has faced horrendous problems during the past three years, wholly unnecessarily. I remind the House that under the agency management option, the most recent survey which was conducted independently shows that 6,000 jobs will be lost, plus 2,000 jobs in knock-on effects through the city, totalling 8,000 jobs over the seven-year period of the contract. By any standards that is extremely worrying for a far south-west region which is already facing serious unemployment and has natural difficulties in attracting sufficient industries.

That also raises serious doubts about Devonport management's estimates of how many job losses will take place. Obviously, one has every reason to be reasonably optimistic, but I certainly do not share the belief of those who think that a large volume of work will come to the dockyards from outside contractors, bringing employment. It is a highly competitive market. I see that the hon. Member for Plymouth, Drake (Miss Fookes) has entered the Chamber. Throughout this exercise she has been hopelessly optimistic about the possibility of outside work. It is helpful to seize any work, wherever possible, but we cannot reasonably expect a great deal of such work in future.

If a private company becomes involved, it is as well that it is well founded and soundly based. I do not understand why there is any criticism of my suggestion that people should talk to Brown and Root. I have no quarrel with Brown and Root per se as a company, and, if it must come to Devonport, we and the city council must live with it and the work force must work with it. The idea that we should wreak vengeance on the company because it happens to be chosen by the Government is a most absurd, short-sighted policy. Our dispute is with the Government and their decision to make an agency management proposal.

I still retain a fundamental objection to the division of an industrial enterprise into two. This is not like franchising some servicing arrangement; this is a fundamentally heavy industry. One need look only at the investment in the nuclear side and in refitting submarines to realise how crucial capital investment is to its success.

I have never forgotten first becoming Minister responsible for the Navy in 1968 and visiting both the Rosyth, and Devonport dockyards. In fairness, at that stage modernisation was already taking place at Rosyth, with the Polaris submarines coming along. Then we faced a legacy of neglect in capital investment that was over a century old. Certainly successive Governments for 40 years had refused to provide the necessary investment.

I fear that the agency management option would take away any structure for modernisation, capital investment and efficiency on which the work force will have to survive in a purely privatised company. The agency does not have adequate funds or the inclination to make the continuous capital investment that is necessary. If the Government do not have overall responsibility for the work, they will not want to invest all their capital, or short capital, in the dockyards. That is the fundamental flaw in the argument.

In real terms, defence spending will decline by £1 billion in the next three years—a 5.9 per cent. cut. Defence spending will be £18.1 billion in 1986–87 and £17.1 billion in 1989–90. What happened to the financial analysis? The forward defence budget estimates that spending on the nuclear strategic forces will have more than doubled, while there will be a decline in the money available for conventional forces. There will also be a decline in the capital account. It is the capital investment that is of great concern to me.

The decision has already been reached on Rosyth dockyard and vesting day has taken place. I regret that decision, and I believe that the Navy will also regret it. We are told that, technically speaking, the options for Devonport are open. The debate on the dockyards may not take place tomorrow. If it does, it will be debated in the middle of the night, and no doubt that is the Government's intention if they keep it on tomorrow's business.

I urge the Government, even at this stage, to look at the question of unifying the dockyard and refusing to go down the path of proposed separation. Industrialists cannot see the slightest sense in that proposal. Everybody has criticised it. The Select Committee on Defence—an all-party Committee—criticised it. The Select Committee on Public Accounts also criticised it. Everybody, apart from Mr. Levene, has criticised that proposal. I do not know of anyone who, having considered the question, believes it to be sensible. The city council and others are trying to fight the proposals.

Mr. Archie Hamilton

Perhaps the right hon. Gentleman can tell us what he did to make the dockyards efficient.

Dr. Owen

We took the dockyards away from the Admiral Superintendents. I believe that the Minister has opened up a can of worms by asking that question. I brought someone in from ICI, Mr. Leslie Norfolk, as chief executive of the dockyards to bring in more expertise from the private sector, and he did a great deal. The Mallabar committee, established at that time, considered the longterm structure and supported the trading fund. Ever since that committee report, I and others have supported the importance of the trading fund. The hon. Member for Ashford (Mr. Speed), the last Minister with responsibility for the Navy, also supported the idea of the trading fund.

In evidence to the Defence Select Committee, published in a report on 10 July 1985, I said: The advantage of a Trading Fund approach is that it retains a unified Dockyard—assets, management and workforce all being part of an integrated enterprise under overall Government control. If the Government will not take the employees out of the Civil Service numbers count while still retaining their terms and conditions of service, then it would be better to retain the Trading Fund concept with the workforce employed by the Trading Fund direct, in effect the MoD, but no longer part of the Civil Service. It is clear that that is one option. The other option, to retain a unified dockyard, would be a Government-owned plc. Given the Government's philosophy and the Dockyard Services Act 1986, there is no doubt that the only option that the Government can consider—without losing face—is a Government-owned plc. Even at this late stage I plead with the Government to reconsider this matter.

If the Government adopt the agency management proposal, there will be considerable resentment among trade union leaders and the vast majority of the people who work in the dockyard. They are not militants; they are decent, honourable men. The trade union leaders have fought the proposals with great skill. I admire what they have done. They have been objective and have put forward sound arguments. I believe that the trade union leaders have been treated shabbily. To put it bluntly, the consultation exercise appears to be a sham.

Nothing could do more to rebuild some respect in our democratic process within the House than for the Secretary of State, who has no past history of involvement in the affair, to come to it with a fresh mind and sit round the table with the trade union leaders. He should say that he is prepared to consider the Government-owned plc proposal. At one stroke that would go some way to relieving the work force's anxiety about pension and redundancy payments. The Government would be the controlling interest. Perhaps they would not control everything, but they would be pooling assets with the management. There may be some proposals for selling shareholdings to other commercial companies or the employees. If so, I would not be terribly upset about that. However, I am upset at the proposal to give up Government control. That is not in the Navy's interest.

If we consider the practical arguments we have got the experience of putting the refits out to private companies. Comparisons have been made in the past. Indeed, the Labour Government had such a comparison. The Conservative Government are supposed to be making such a comparison at the present time, but we have had no figures for it. The Navy has been dissatisfied about private refits. Why? The reason is quite simple. It is like taking a car into a garage. People may not know exactly what is wrong until the car is opened up. The same principle applies to ships.

When a ship comes in for a refit, estimates have already been made about what is likely to be needed. However, once it is opened up, rust or some major mechanical problem may be discovered that could not have been anticipated. Under the dockyard system, which operates under Government control, all the work would be carried out regardless of the time, so that the ship was properly repaired. If the ship was placed with a private commercial contractor, it is likely that it would close down the hatches, pretend that the rust did not exist and ignore the unforeseen problems. That is understandable.

If HMS Invincible has a propellor shaft that is bent or some other major problem, it is in the interests of the Navy that a capital ship of that size can go straight into the dockyard, disrupt the refitting cycle and be turned around as soon as possible. The Navy can do this under the present system. Under private control, the agency management would say that it has not got this or that, the cost will be tremendous and it will have the Government across a barrel. The Navy cannot go anywhere else; big ships can only go to Devonport. There is no doubt that if the dockyards were in private hands the Ministry would be absolutely screwed. The agency could charge any price. There is nothing that the Government could do about it.

That is the problem. The Navy has suddenly realised that it has been taken for a ride. The Admiralty Board originally endorsed this type of proposal—look at the towpath papers—but it has discovered the problem. It is clear that the Navy thought there would be savings, but that is not so because it will have to finance the pension fund. Money will be taken from the Navy. The Government are taking £1 billion from the defence budget in the next three years and the Navy will be squeezed and there will he less available money but it will have to pay out more for dockyard refits.

It has been argued that on the basis of the comparison of costs the agency management option would represent a £5 million saving on top of those anticipated by the Government-owned plc option. Thus, there would be £5 million saving on the Devonport dockyard turnover of £300 million per annum. Such a saving over seven years represents 0.2 per cent. per annum. That is well within the margin of forecasting error, especially when one considers that that estimate is in the Ministry of Defence's document, and that it favours the agency management proposal rather than a Government-owned plc.

I have said enough. All sense demands a re-think. OK, we shall not get a trading fund, with people still in the Civil Service. OK, the Government may not give us the next best option, which is a trading fund outside the Civil Service. But pressing ahead with the agency management under the present proposals is folly. The Government will regret it, the Navy will regret it and the city of Plymouth will he dealt a devastating blow. Even at this late hour, I beg the Government to think again.

Perhaps I can say more openly that the Government would get a good response from the trade union leaders. They would be ready to discuss a compromise. They do not like it, but they are practical, realistic men. Their whole life is made up of cutting out deals. If they can go away with only half a loaf, they will do so. The Secretary of State would get the co-operation and commitment of the work force at Devonport which served the country mighty well during the Falklands crisis.

I urge the Government not to turn down a possible compromise, which would give them many of their objectives and get most of what is needed—in the longer term it will probably provide all that is needed—in terms of efficiency and effectiveness at Devonport dockyard.

8.41 pm

Mr. Jonathan Sayeed (Bristol, East)

I hope that I he right hon. Member for Plymouth, Devonport (Dr. Owen) will excuse me if I do not follow him into Devonport dockyard, though I noted that he was the only hon. Member who has spoken about the dockyards who recognised that the Royal Navy favoured major changes in dockyard management.

I propose to talk about frigates and to add my voice to those of hon. Members who are deeply disturbed about the decline of our merchant fleet.

A frigate is fought from its operations room. The action information organisation controls all weapons and information systems for sub-surface, surface and air threats, as well as communicating with friendly forces. It collects, collates and evaluates the threat, indicates some possible responses and presents information to the command with the assistance of the principal warfare officer.

When operating under hostile conditions, the Royal Navy continues to demonstrate its superb professionalism and the coolness under fire for which it is renowned. However, to do its job properly it requires the right equipment. As the sophistication of the threat has increased, so the time available for a response has shrunk, to a point where even an error of one second may mean destruction.

Therefore, it has been necessary to automate much of the collection of information and its evaluation to supply the command swiftly with a constantly updated picture and an assessment of the possible responses. As each generation of weapons has been deployed, the action information system has had to become faster and more automated. We have moved from tote boards, plotting tables and PPIs with markers to a system known as ADAWS, which is fitted widely in the Royal Navy. Although that system works, and has worked well, a swifter, more comprehensive system is becoming necessary and HMS Brave has been undergoing extensive trials with a computer-assisted command system known as CACS1. My right hon. Friend the Minister will know that the system has been designed by Ferranti, which is part of GEC, to go into all batch 2 and 3 type 22 frigates and type 23s.

I am told that there is a fundamental flaw in the design, possibly associated with inadequate computer power. The problem has a number of manifestations, but I shall mention only two. The first is its inability to discriminate between urgent and less urgent information. Ministers will know that it was intended that the system should be able to present the principal warfare officer and the captain with a series of problems that require solution, in order of declining priority. The system fails to do that, and instead deluges the captain with indiscriminate information, thus defeating the object of assisting the command in decision making.

The second fault may sound minor, but it is important, as anyone who has worked in an operations room will know. It is associated with the light pens. By "pricking off" a contact on the display screen, a read-out of its position, course and speed—and sometimes other information—can be computed and presented to the action information organisation. However, I understand that the CACS1 can take up to six times as long to present that information as did the old ADAWS system.

Batch 3 type 22 and all the type 23 frigates are being designed to incorporate the new CACS. Though the production of the system has been thrown open to competitive tender, I understand that the potential suppliers are by no means satisfied that they can cure the system's defects.

There are, therefore, important questions that I believe my hon. Friend the Minister who is to reply will wish to answer. First, can the CACS be made to work? Secondly, will it be fully effective in time to ensure that there is no delay in building and bringing into service batch 3 type 22 and type 23 frigates? Thirdly, is the contract with Ferranti a fixed-price contract with penalties, or is there to be another subsidy to GEC?

My next point echoes what has been said by many right hon. and hon. Members. It is referred to in EDM 515, which I believe will garner considerable support. It is, of course, the decline of the British merchant fleet, which is an integral part of the maritime defence of this nation.

Without a British merchant fleet in time of war, our fighting services will be unable to carry out their duties and the country will starve. However, some of the suggestions that have been made for rebuilding the British merchant fleet have been defective, because they have ignored the causes of decline.

In 1970 a total of 21 per cent. of United Kingdom dry cargo trade was with the Community; by 1985 that figure had doubled. Handling times have been reduced by the introduction of containerisation to one tenth of their break bulk figure. Despite the increase by 20 per cent. in United Kingdom oil trade due to exports, the fall in our oil imports has meant that United Kingdom tonne miles are down by 70 per cent. That reduction alone has contributed to the loss of the United Kingdom tanker tonnage, which, in turn, accounts for 60 per cent. of the United Kingdom tonnage loss between 1975 and 1985.

In the 1970s banks thought that they could not lose on lending to shipowners, and in the United Kingdom alone the registered tonnage increased from 27 million deadweight tonnes in 1965 to 52 million deadweight tonnes in 1975. Last year it was down to 15 million deadweight tonnes.

On the world scene, there is still a glut of ships. Last year there was estimated to be an over-supply of tankers of about 67 million deadweight tonnes, or 34 per cent., an over-supply of dry cargo carriers of about 40 million deadweight tonnes, or 20 per cent., an over-supply by about 30 per cent. of liner shipping, predominantly container trade, and a small surplus in general cargo.

In addition, the current charter rates are nigh on ruinous. The average tanker voyage charter weight fell from world scale 130 to world scale 50 between 1980 and 1985 and the average tramp time charter rate index fell from 250 in mid-1980 to 105 in 1985. When one adds to that the difficulties that British flag shipping has had to face in competing with flags of convenience, which employ Third world crews, which can cost 40 to 50 per cent. less than crews of the United Kingdom flag, one can start to assess the magnitude of the problem that needs to be faced.

The Government were not elected to be a laissez-faire Government shrinking from their responsibilities. While all the wiseacres protested that trade union reform was impossible, the Government went ahead and proved them wrong. On denationalisation, the abolition of domestic rates, the reform of social security, the sale of council houses and the introduction of limited list prescribing, the Government have proved the pundits wrong. In American parlance it is a "can do" Government, but on merchant shipping it is a "do nothing" Government.

For some years I have been asking the Government to get the Community to take concerted action against shipping lines which dump uneconomic freight rates on the market. I was told by Ministers that that was impossible. However, I am delighted to say that on 16 December the Council of Ministers made a decision that will permit the Community retrospectively to penalise those who destroy the profitability of our shipping with unfair trade practices and pricing. At the same time, it has taken action on liner trades by permitting co-operation between competitors on common standards and co-ordinated timetables, and at long last it is prepared to countenance reprisals against third parties which restrict access to their water by Community ships. However, the Council failed to agree about cabotage and greater transparency of subsidies.

I say to my hon. Friend the Under-Secretary of State that as Greece, Spain, Italy and France are unlikely to respond to any suggestions from Britain on bilateral treaties on cabotage, he should mention to the Minister of State, Department of Transport that it is time Her Majesty's Government demanded that the European Court forced those countries to permit our ships to have the same access to their waters as they have to ours. We should use our membership of the largest trading block in the world to force far eastern and east European shipbuilders to compete fairly by prohibiting access to Community ports of cut-price ships dumped on the market. We should use the EEC to force out of business the ships whose quality, equipment, crew competence or crew numbers do not match our exacting standards.

As I believe my synopsis of the problems has shown, all those actions will take time to translate themselves into a reversal of the decline of British merchant shipping. However, there is one action which the Government could take unilaterally which would have an immediate effect. The Treasury could permit a 50 per cent. ship allowance in the first year, with the first 25 per cent. tranche of the writing down allowance in that same year. Indeed, if it were permitted under the rules—I do not know whether it is—that 50 per cent. free depreciation allowance could be increased to 75 per cent. for British-built ships. By doing that the Government would encourage ships to be re-registered under the British flag, ships to be built in British yards and British seamen to be trained to sail under the red ensign again.

Some in the Treasury would protest that it would cost too much. They forget that, although there is an immediate cost to the Government in tax revenue forgone, it is only a deferring of a tax on profits. If they wish to consider the problem in solely accountancy terms—I hope that, as the Chancellor of the Exchequer is an ex-Royal Navy man, he would not—they should remember that they get no tax at all from foreign companies operating foreign ships carrying our goods, nor do they receive any income tax from British seamen who move their families abroad while they work for overseas companies.

The Treasury should recognise that there is a parallel between these suggestions and the effect of high personal taxation. As we have seen in Britain and, more startlingly in the United States, when the upper bands of personal tax are reduced, the net tax taken from the same percentage of the population goes up. I see every reason to believe that a more generous tax regime for British shipping would, in time, result in an increase in tax to the Exchequer, an increase in the invisible balance of payments surplus and an increase in the number of British seamen and ships essential for the security of our nation.

8.55 pm

Mr. Keith Best (Ynys Môn)

I hope that my hon. Friend the Member for Bristol, East (Mr. Sayeed) will forgive me if I do not deal immediately with the theme that he advanced so ably, that of the merchant marine. I shall deal with that shortly. I see my right hon. Friend the Member for Taunton (Sir E. du Cann) in his place. He is the noblest and most articulate advocate of that cause that the House has the privilege of hearing.

There is only one element of our defence forces that is, individually and severally, fully flexible, omni-purpose, worldwide, self-supporting, capable of offensive action and with a deterrent value disproportionate to its cost in its ability to tie down large numbers of adversary forces with comparatively small numbers of our own. I refer, of course, to our amphibious forces. I must declare an interest as I currently serve as a naval gunfire support liaison officer.

In shipping terms, amphibious forces need command-assault ships with helicopters and landing craft and commando carriers with at least a company group helicopter lift capability.

The "Statement on the Defence Estimates" for the past few years tells a sorry tale. In the annexe entitled the "Strength of the Fleet" in the 1980 Defence Estimates one sees under the heading "Assault ships" that we have two, Intrepid and Fearless. Under the heading "Commando Carriers" are the ships Bulwark and Hermes. In the 1982 Defence Estimates there is the same categorisation. There are still two assault ships, Fearless and Intrepid, but commando carriers are down to one, Hermes. In the 1986 Defence Estimates in the category "Assault ships" there are still Intrepid and Fearless, but the category for commando carriers has disappeared from the face of the Defence Estimates. It is nowhere to be found, for the good reason that we have no commando carriers. That must be remedied.

Page 34 of the Defence Estimates 1986 states, under the heading, "Amphibious reinforcement of Norway"; Once the United Kingdom/Netherlands force has been committed to operations it may land directly from its own shipping across and over beaches, without any need for ports and airfields. The force has sufficient helicopters and landing craft to enable it to establish and consolidate an initial lodgement ashore. The mobility afforded by these helicopters and landing craft makes the force particularly suitable for operations in North Norway, where land movement is severely limited by fjords, poor roads, steep-sided valleys, bridges, defiles and tunnels, and where airfields are few and far between. That is a succinct and proper assessment of the ability of and need for an amphibious capability. However, that statement postulates that there are sufficient helicopters and landing craft. I should like to devote a little time to that subject.

There is a need for the helicopter lift. I intervened in the speech of the hon. Member for Clackmannan (Mr. O'Neill) on that subject. It is important that we get that right. I understand why, in answer to my parliamentary questions, my hon. Friend the Under-Secretary of State for Defence Procurement is not prepared to divulge the number of helicopters that is the criteria for an aviation support ship evaluation. I have asked about certain other matters that are regarded as confidential. I entirely accept that. I hope that I am not reading too much into this, but it is interesting that in a parliamentary answer on 2 July last year, my hon. Friend told me that an aviation support ship is now under consideration. I question whether one will be enough, or whether we should have two. Much depends on the nature of the craft—its sophistication and the amount of protection that it may give to the embarked force as well as the crew. However, I am encouraged—I hope that I am not encouraged falsely—by a reply that I received to a question that I asked on 17 December last year, which stated: We shall be addressing the means of providing helicopter lift in support of amphibious operations over the next few months. The number of ships will be addressed within our consideration of the overall shape of the amphibious package."—[Official Report, 13 January 1987; Vol. 108, c. 157.] I hope that that means that there is more than one ship in contemplation, in the role of aviation support ship. When he replies, will my hon. Friend the Minister say when the results are likely to be reported to the House?

Swan Hunter will complete the study into extending the lives of Fearless and Intrepid, the two assault ships, this summer. As for feasibility studies into the option of building new ships, letters have been sent to some 80 firms asking whether they wish to participate in the work. It is not planned to complete the replacement studies until summer 1988, with an evaluation taking about a further year. That is a lengthy evaluation. Does that not mean that, because decisions will have to be taken fairly soon for the replacement of those ships, but bearing it in mind that by the summer the evaluation of the extension of the ships' lives will have taken place, the inevitable conclusion must be that the decision has already been taken? The ships will not be replaced, but their lives will be extended. Perhaps I have a suspicious mind. I hope that my hon. Friend the Minister can gainsay me in my deduction and in my assessment of the statements in the parliamentary answers that I have received.

Notwithstanding the questions that I have for my hon. Friend, I am fully confident that they will be fully answered. I congratulate the Government on having given a clear commitment to amphibious forces. However, in due course it must be matched by action. I hope that when the right hon. Member for Llanelli (Mr. Davies) speaks, he will be able to do slightly better than his hon. Friend the Member for Clackmannan. I hope that, rather than say that he cannot give a commitment, he will give a commitment from his party to one, or at least one, aviation support ship. He is able to give commitments about expenditure that he says he will save from the Trident submarine programme, so surely he can give us a similar commitment in respect of our amphibious forces which, as I said, are one of the most important elements of our defence forces, not least because it is the only out-of-NATO area offensive capability that we have, which is disproportionate in its capability as a deterrent to tie down a large number of opposing forces.

I now refer to our surface fleet numbers. I wonder what the judgment will be on the United Kingdom by the study of the major NATO commanders into maritime force requirements. That study is continuing. I ask my hon. Friend the Minister to let us know when it will be completed. The United Kingdom makes by far the largest contribution to the NATO surface naval presence in the eastern Atlantic and the Channel of any European NATO member. That contention must not in any way be used as an excuse for any reduction in the size of our surface fleet.

Of any nation, we have the most to lose by having an inadequate fleet. We are an island people whose livelihood and salvation has been based on the sea. Other European NATO members are continental land powers. We are a maritime nation and we must not lose sight of that. I hope that any comparison of the size of fleets between ourselves and other European NATO members will not be used as a persiflage or covering to show that we should have a fleet of a parity with other European NATO members which have traditionally been land-based continental powers rather than sea-based powers. We must continue to conduct our defences as a sea-based power, for the reasons which hon. Members have advanced so ably this evening and which I do not wish to reiterate now.

The size of our surface fleet within the coast constraints which must necessarily follow—we are beginning to see the constraints for the first time this year after the continuing NATO commitment of a 3 per cent. real increase and we are now having to face some hard facts—may depend on our new frigate. Will it be a specialist frigate such as the type 23 with its towed array sonar, or a more general purpose frigate? I hope that we are considering the latter.

If we are considering a more general-purpose frigate, I trust that, notwithstanding the fact that we may have lost the first battle in the campaign, the whole campaign has not been lost for the S90 short fat hull, which was referred to earlier. That hull may not have been appropriate for the type 23 frigate. I accept that now, although I argued strongly that it should have been a contender for the type 23. The type 23, with its specialist role, its quietened hull, high engine to diminish noise levels, and its very specialist role, was not especially appropriate for the S90. That hull is far more appropriate for a general-purpose frigate.

However, the House should know that no evidence was presented to the Marine Technology Board that the performance of the S90 frigate when operating with the towed array sonar had been addressed. In effect, that consideration was not made, although most of us accept that the S90 was probably inappropriate for the type 23. The fact that it may have been inappropriate for the type 23 with its specialist role, does not in my judgment invalidate the S90 for consideration for a future frigate programme.

The Lloyd's Register of Shipping under the chairmanship of Mr. Macleod has agreed to conduct an inquiry into hull forms for frigates and destroyers. That report should be ready in six months or nine months time—at least that was the judgment of my hon. Friend the Minister of State in December. Perhaps he can update us and give a more precise date of when that study will be completed.

Together with seven other NATO nations, the United Kingdom participated in a 15-month joint feasibility study completed towards the end of 1985 called "The NATO Frigate Replacement Programme (NFR90)". The results of that study have been evaluated and we are moving towards the next phase called "project definition". A decision is expected by the middle of this year.

Will the United Kingdom put forward the concept of a short fat hull in view of its equal seaworthiness, larger weapons platform, larger radar horizon and cheaper cost? I appreciate that we must await the result of the inquiry into hull forms. If that inquiry comes forward with a good bill of health for the S90, I hope that that will be carried forward by the Government into "The NATO Frigate Replacement Programme (NFR90)" in the project definition stage. I believe that the S90 would be a cost-effective way of providing a future frigate for this country and for the rest of NATO.

Like my hon. Friend the Member for Tynemouth (Mr. Trotter), who mentioned the speech made by my right hon. Friend the Secretary of State for Transport to the General Council of British Shipping, I welcome my right hon. Friend's new-found enthusiasm for finding answers to the problems of our merchant marine. But that new-found enthusiasm is due almost exclusively to the consistent pressure from speeches, and now publications, of my right hon. Friend the Member for Taunton. As a classical scholar, he will recall that, 2,000 years ago, Senator Cato consistently said the same thing: "Delenda est Carthago"—Carthage must be destroyed. That is the only thing for which he will be remembered. Carthage was indeed destroyed, so the message got home. There is much to be said for one constant message. My right hon. Friend has been responsible for one constant message; and it looks as though it is getting home.

I shall not deal with the statistics or the analysis of decline of our merchant fleet but merely offer two solutions. The first must be fiscal. In the Adjournment debate of 25 November 1982, initiated by my right hon. Friend the Member for Taunton, entitled "Merchant Fleet", Mr. lain Sproat, whom the whole House will welcome back after the general election, used this as his first and most important argument in relation to what the Government were doing to support our merchant fleet and to secure its future: We have a corporation tax regime that encourages investment in shipping."—[Official Report, 25 November 1982; Vol. 32, c. 1106.]

That was said in 1982; the encouragement was removed in 1984. The central argument that was deployed in that debate in 1982 was removed by subsequent fiscal legislation.

In 1985, the British Shipping Review said this: To those in the industry one of the most frightening features of the last decade has been the degree of apparent indifference to and lack of understanding of the future of the shipping industry shown by the nation, public and politicians alike. In a world in which most major shipping countries—including those most wedded to free enterprise—afford considerable support to their shipping industries by way of tax concessions, subsidies and cargo reservation, successive British Governments have done little but express sympathy. Indeed, the Budget of 1984 actually cut heavily into the special capital allowances which were the only significant support the shipping industry had previously enjoyed. Happily there have been signs in the past year of a reawakening of public and Government concern…Nevertheless, time is running out and early and decisive action is needed to put British shipping on a par with its competitors and so generate the flow of future investment required to enable the British merchant fleet to equip itself with the ships that will be needed in future years. The essential point here is that with capital costs sometimes representing half the cost of running a modern ship, fiscal regimes matter enormously in the competitive equation, especially when, as in the UK, other forms of aid and protection are lacking.

The ninth report of the House of Lords Select Committee on the European Communities, which has already been mentioned in the debate, advocated assistance to encourage the provision of special features during the building of ships which would make them more readily adaptable or suitable for military purposes. What is being done about that? What Government input is there at the design stage as well as at the building stage of merchant ships to ensure that they are more readily adaptable or more suitable to undertake a military role in the event of their being called upon so to do?

My hon. Friend the Member for Bristol, East summarised some of the reasons for the decline in our merchant fleet. He mentioned the problem of oil tankers. I can speak from personal experience because in Anglesey, in my constituency, there is a single buoy mooring half a mile off the port of Amlwch. That single buoy mooring was positioned to accommodate super-tankers that could not get into port to discharge their oil. Unfortunately, at the time it was introduced, it was almost immediately redundant, and hung by a slender thread for years thereafter. Shell has now decided to close it down altogether. That is particularly sad for my constituency, because the quid pro quo basis for that single buoy mooring was an annual payment to the Ynys MÔn borough council of some 0.5 million. With that money, the Ynys MÔn borough council built leisure centres on the island and many other assets that presently are enjoyed by residents and visitors alike in my constituency. It is a major loss, but it was inevitable because the day of the supertanker was doomed, for the reasons that were advanced by my hon. Friend.

A tremendous number of old hulks are rusting, lying up, and unable to be sold. Again, I can speak from personal experience because the port of Holyhead is owned by Sealink. Mr. Jim Sherwood himself is suffering a grave disadvantage at present because of the number of rusting hulks that are laid up.

All the problems of the decline of the merchant marine fleet cannot be laid at the Government's door, but the stimulus for recovery can and must come from the Government. I hope that my hon. Friend the Under-Secretary of State will say something about that matter when he replies. As I said to my right hon. Friend the Member for Taunton, Carthage finally was destroyed—the prophecy came true—because its continuance was regarded as inimical to the very survival of Rome. In a positive way the continuance of our merchant fleet is just as critical to the survival of the British people. We must act now or face the inevitable consequences.

9.17 pm

Mr. Denzil Davies (Llanelli)

This debate has had four themes: the rapid decline of our Merchant Navy, the sterile debate between the Government and the alliance about Trident, the concern about the royal dockyards and their future and, finally, the funding of the Royal Navy in particular in relation to the type 23 frigate and, of course, the amphibious northern flank commitment to Norway. Many hon. Members have spoken about the decline of the Merchant Navy. The right hon. Member for Taunton (Sir E. du Cann), my right hon. Friend the Member for Cardiff, South and Penarth (Mr. Callaghan) and other hon. Members made strong and important speeches. This is the third or fourth Navy debate in which speeches of that kind have been made, as well as during debates on the Defence Estimates. Nothing has been done by the Government. It is not a party matter, as was pointed out. The decline goes on, as my right hon. Friend the Member for Cardiff, South and Penarth pointed out with the figures that he put before the House.

I am told that the Channel tunnel also could accelerate the decline of the merchant fleet if it replaces shipping in the Channel.

In an interesting speech, the hon. Member for Bristol, East (Mr. Sayeed) set forth various measures that need to be taken. I do not think any hon. Member is under the illusion that it will be easy to arrest the decline. It requires a combination of defence, industrial, commercial, and financial policies. The hon. Member also mentioned capital allowances. As he knows, it was his right hon. Friend the then Chancellor who did away with capital allowances and exacerbated the problem. The problem is that there is no co-ordination and no lead Department.

The Ministry of Transport cannot be the lead Department. The only way to arrest the serious decline of our merchant fleet is by co-ordination.

The Minister of State for the Armed Forces spent a considerable amount of time on the latest open document on Trident, and the hon. Member for Woolwich (Mr. Cartwright) tried to answer the Government's arguments about Trident, but what was said about Trident related more to votes than to defence. The Government attempted to justify their purchase of Trident, although everybody knows that they have no option but to buy the latest submarine ballistic missile from the United States. At one time it was to be the C4, which, it was said, would be splendid for our purposes. Then the production line for the C4 ran out and we had to buy the D5. Again reasons were found for purchasing the D5. If the Americans were to decide tomorrow not to have the D5 but something called the E6, the Government would buy the E6 and there would be another open document to justify the E6 as the best alternative for Britain.

It would be much more honest if the alliance were to say that they too favour Trident. The alliance is trying to save the face of the right hon. Member for Plymouth, Devonport (Dr. Owen), who came out strongly against Trident. Perhaps he regrets doing so now; I do not know. The alliance's attempt to find an alternative—either an Anglo-French missile or a version of cruise—is dishonest. The honest course for the alliance would be to say that it favours Trident.

Does it make any sense for Britain to go for a third generation of British nuclear weaponry? I do not believe that it does, for many reasons, including the fact that whatever alternative is chosen would not cost much less than Trident and the money would still have to be found from a declining defence budget. The choice has to be made between a weapon of so-called last resort and a conventional capability within NATO. That choice cannot be fudged, nor should it be fudged.

My hon. Friends the Members for Dunfermline, East (Mr. Brown) and for Dunfermline, West (Mr. Douglas), the right hon. Member for Devonport and the hon. Member for Woolwich referred to the dockyards. I am unable to understand why it is not possible to run the dockyards within the public sector as a commercial organisation by means of a trading fund. A trading fund worked well for the royal ordnance factories. The Royal Mint probably operates by means of a trading fund. Small amendments may be needed to the Act relating to trading funds so that it can be applied to the dockyards. That would allow for the commercial discipline that a trading fund could provide within the Civil Service. It would not be necessary to go as far as having a public limited company. In that case it would not be a trading fund; it would be simple commercial accounting. There is no magic about a trading fund. It would provide commercial funding and a profit and loss account for the operation of the dockyards. I hope that the Government will think again. Not to do so would not make any sense.

The right hon. Member for Devonport said that there was no sense in splitting the ownership of assets away from, the use of those assets. That is a fundamental argument against the Government's case. We are not dealing with the franchise of a fast food chain. These enormous assets will not be owned by the users of those assets. There will be no incentive, therefore, for the users, whose contract will come to an end within seven years, to prevent the depletion of those assets. They should work the assets for all they are worth and create an income profit, knowing that it is not necessary to replace the capital assets, especially if the contract is not renewed. The Government should think. They should not go ahead, but decide that it is possible to run the dockyards through a trading fund.

The consultation which the Act demands has not taken place. There has been no discussion with the trade unions on the economic and social consequences of what is to happen. In an earlier debate the Under-Secretary of State said that there could be no such consultations because the issues were confidential between the Government and the company that would take over the dockyards. Under the Act the Government have an obligation to consult the trade unions and employees on the social and economic consequences. The Government are shielding themselves behind confidentiality, but they have a legal duty to consult.

Mr. Douglas

Is my hon. Friend aware that my hon. Friend the Member for Dunfermline, East (Mr. Brown) and myself met the Prime Minister last Thursday when we received an assurance that she was concerned about not disclosing to the trade unions, particularly at Rosyth, the impact of possible redundancies?

Mr. Davies

I was not aware of that meeting, but I am aware that the obligation under the Act is clear. The Government cannot transfer, hide behind or shift their legal obligation by saying that the matter is confidential between themselves and the contractors. I hope that the Under-Secretary will deal with the matter, if not tonight when we debate the orders, because it is causing anxiety to employees.

The figures for savings are dubious. For the same reasons as the right hon. Member for Plymouth, Devonport gave, I do not believe that there will be any savings. I believe that the cost will be more because the contractor will be in a monopoly position and be able to demand from the Government a higher price for emergent work—for work which no one thought would be needed. At the end of seven years I think that the dockyards operation will have cost more.

My next agrument is about the funding, or under-funding, of the Royal Navy. The hon. Member for Beverley (Sir P. Wall) was interesting until he came to the political knockabout. I tend to agree with him when he bemoans having the service debates towards the end of the financial year, a long way from the publication of the Defence Estimates which we debate close to the beginning of the financial year. I am sure that the hon. Gentleman is aware of the public expenditure White Paper. It does not set out the different funding requirements of the services, but that White Paper, which was published about a month ago, makes one fact crystal clear—there will be cuts of £1 billion over the next three years in the defence budget. They will not be cash cuts but real cuts, after taking the inflation rate into account. Perhaps the figures are optimistic, since it is always different to work out which inflation rates should be applied to defence expenditure.

It appears that spending will be reduced by £1 billion over the next three years. If a Tory Government admit in an election year, perhaps, that they will impose cuts amounting to £1 billion in the defence budget, what will they do if they are re-elected and they are faced with the enormous problem of trying to fund the Trident project with a declining budget?

How much of the cut of £1billion will come from the Navy's budget? Perhaps we shall find the answer to the question when we read the new defence White Paper. Leaving aside Trident, the Navy must face the prospect of declining expenditure and cuts in various areas of its budget.

My hon. Friends the Members for Wallsend (Mr. Garrett) and for Newcastle upon Tyne, East (Mr. Brown) and others have talked about the type 23 frigate. I shall quote paragraph 98 of the report of the Select Committee on Defence of 1986, which states: In view of the decline in resources it will be remarkable if this average"— that is the average of ordering three new type 23 frigates a year, and we are already way behind it— is achieved for a force of 50 vessels in five years' time. No one really believes what the Government are saying about this ordering programme. I do not think that even Ministers believe that the Government will be able to maintain in the 1990s a 50 escort, frigate and destroyer modern Navy that is based on the ordering pattern for type 23s that the Government have talked about.

Several economists have come to the conclusion that by 1990 or 1991 we are likely to see defence expenditure fall back to about 4.5 per cent. of gross domestic product. They have come to this view having studied the Government's figures. Defence expenditure currently is 5.2 per cent. of GDP. If the economists are right, how will the Government be able to fund Trident and maintain the expenditure that will be needed for a 50-warship navy? I do not think that anyone believes that it will be possible to do that.

The House will remember that one of the consequences of Sir John Nott's defence review was that Chatham dockyard was closed. I have considerable sympathy for the hon. Member for Gillingham (Mr. Couchman), who has said that the Government closed the dockyard in his constituency and are now considering dumping nuclear waste in that area. The various options that are before us were with us in 1980 or 1981, and I should like to know the cost now of a type 23 frigate. It is probably about £125 million, and there are many who say that it is even higher. In June 1981, Sir John Nott said: 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 £70 million"-— I do not think that that was the correct figure— to modernise an old 'Leander' frigate, which is actually more than our target cost for the new type 23 frigate."—/Offical Report, 25 June 1981; Vol. 7, c. 389.] That is a quotation that 1 used in my speech on 19 July 1982.

What is the cost of a type 23 now? Is it £125 million, £130 million or £140 million? It was designed as a throwaway frigate, a frigate that would not need mid-life modernisation, but that was because the dockyards would not be available to carry out that sort of modernisation. Who will throw away a frigate that cost £125 million? We shall hang on to the frigates, even the ones we have now, and they will become older and older and less effective because of the Government's policies. I shall not give the type of commitment that the hon. Member for Ynys MÔn (Mr. Best) wants. It certainly appears that Fearless and Intrepid need to be replaced and that there needs to be some type of air support. I do not know how much that would cost. Indeed, I do not think that the Government know. The Government will not be able to pay the full price of those orders and have 50 frigates and have Trident. A choice will have to be made.

I fear that we shall resile from the Norwegian commitment, just as we are resiling from the Danish commitment. Our commitment to Denmark may not be major or considered very important—I raised this point during the speech of the Minister of State for the Armed Forces—but it is a commitment to the Baltic approaches. The Government are negotiating about reducing that commitment. We are told that nothing has been done unilaterally—of course not.

Mr. Best

I appreciate that the right hon. Gentleman cannot give me a commitment about Fearless and Intrepid and an aviation support ship. However, can he give a commitment that the Labour party will not resile from the Norwegian commitment?

Mr. Davies

I can give that commitment, because I believe that it is possible to fund that commitment with a budget if Trident has been cancelled. I do not believe that it is possible fully to fund that commitment and have Trident. That is our position.

I do not think that any Government have faced up to the question of what role the Royal Navy, especially the surface fleet, should have. The Navy cannot possibly have the type of blue water role, with power all over the world, that some people romantically want. Clearly, the Navy would occasionally have a role in the Gulf, a Belize guardship role and obviously a role in the Falklands, but it must have a role in the European theatre. So long as the Government and NATO subscribe to a defence policy—we considered this in the Army debate—that foresees a six-day or seven-day conventional war in Europe, which then becomes nuclear, there will be question marks over the role of the surface fleet. If that war is to be so short, one of the Navy's traditional roles—to protect supplies crossing the Atlantic—will not be needed. We must face up to that. If our defence strategy is flexible response and forward defence and nothing else, people will ask, as Sir John Nott in effect did in his defence review, "Why on earth do we need a surface fleet?" Of course the submarine navy performs a different role. We need to think in terms of moving from the idea of battlefield nuclear war in Europe to the idea of—God forbid—a longer conventional war. In that case, of course there is a need for the Navy to protect the sea routes and do the type of work that it is has provisionally done for Britain. That fact will not be faced this side of the election, but it will have to be faced after the election. If the Conservative party wins, the Navy will be decimated in terms of its surface fleet. We are buying Trident and the logic is that, by subscribing to the battlefield role in Europe, we do not need a surface navy of the type that I believe we should have. For all these reasons, the Navy's future under the Conservative Government is not happy or rosy.

9.38 pm

The Parliamentary Under-Secretary of State for Defence Procurement (Mr. Archie Hamilton)

It gives me great pleasure to close my first Navy debate. The hon. Members for Clackmannan (Mr. O'Neill), for Woolwich (Mr. Cartwright) and for Dunfermline, East (Mr. Brown), the right hon. Member for Plymouth, Devonport (Dr. Owen) and my hon. Friend the Member for Plymouth, Drake (Miss Fookes) have referred to the royal dockyards and it would be remiss of me not to respond. As we have said on so many occasions, there have been several studies over the past two decades, under successive Administrations, of the organisation of the dockyards. The right hon. Member for Devonport made a point about the Mallabar report, which suggested that we should have a trading fund. It is significant that we do not have a trading fund. One point that has not been disputed in all that time is that we need fairly fundamental changes in the way in which the dockyards are run.

We have seen Administrations come and go; we have seen the studies come and go; and we have seen the years come and go. There has, however, been comparatively little real change in the dockyard organisation. Still, there is general agreement—even from the trades unions—that there is a need for change.

We can either go on debating change for the next two decades, or we can take the view that, if change is to be made, it should be made now. That is the view the Government have taken, and it remains our view. As the House knows, we have now signed a contract with Babcock Thorn Ltd. for the operation of Rosyth dockyard over a seven-year period from April this year. So far as Devonport is concerned, we have announced Devonport Management Ltd. as our preferred contractor for the future operation of Devonport dockyard. We have, however, taken no final decision on Devonport, and will not do so until after we have carefully considered any views the trades unions wish to put to us and until we have had a meeting with them on 13 February.

To hear opponents of the scheme talk, one might be forgiven for thinking that they, and they alone, had an interest in the needs of the fleet and in the nation's security. The Government's record on defence is second to none, and we need no lessons from the Opposition. As for the needs of the Navy, Opposition Members may have heard from the trades unions that at their meeting with the Navy Board recently, they were told that the board saw commercial management as the best way forward, not only for the Royal Navy but for the dockyards and their work forces.

Mr. Gordon Brown

Will the Minister confirm that no report, other than the Levene report, has recommended the option that he is now proposing? Will he further confirm that in his paper on the Government-owned plc, the Ministry of Defence envisages a reduction in the standards of refits, and lengthier gaps between refits, for some of our major naval vessels? Will he now tell us how many jobs he has signed away in the contract between the Government and Babcock Thorn?

Mr. Hamilton

As we have made quite clear, the Government-owned plc would have led to the loss of jobs because of the fall in work load. In fact, Babcock Thorn has said that it can improve on the Government's forecasts.

What is the response of the Opposition to such a clear commitment to commercial management from the most senior officers in the Royal Navy? Quite simply, they ignore it, as they have ignored much of the supporting argument we have presented over the many months. Instead, they claim that the dockyards are being sacrificed on the alter of dogma.

By careful negotiations, we have secured arrangements which we believe will produce over £320 million in savings to the taxpayer over the next 10 years, with more thereafter. We have taken steps to ensure that our strategic interests are protected, and that includes safeguards on foreign control. We are providing for a realistic separation of customer from supplier, and for maximum competition between the two dockyards and with the private sector generally. We are allowing local managers the freedom to manage, without public sector constraints. We are providing for the dockyards to become more efficient so that they can compete for, and I hope win, commercial and naval work. In that way, they will secure jobs which—let there be no doubt—will not be secured by the declining naval refit and repair programme.

If it is dogma to want to make the dockyards more efficient; if it is dogma to want to save taxpayers' money; if it is dogma to want to see new work introduced to the dockyards and to minimise job losses—I for one plead guilty to dogma.

Finally, I refer to the Dockyard Services Act. My right hon. Friend the Secretary of State is perfectly well aware of his obligations under the Act to inform and consult the unions. He made it quite clear, when, on 27 January, he announced the contract with Babcock Thorn, that he was satisfied that it complied with such duties as the Act imposed upon him. It is notable that the noble Lord Denning, in another place, who pressed for the inclusion in the Bill of the provisions relating to informing and consulting the unions, has commented that there had been intensive consultation on the options, that we had done all that was reasonably necessary and that, on the choice of contractor, we had gone through all the proper information and consultation procedures.

Mr. Douglas

The Minister will have heard my intervention in the speech of my right hon. Friend the Member for Llanelli (Mr. Davies). Can he say when the unions at Rosyth can expect to be given accurate figures for redundancies under the Babcock Thorn contract?

Mr. Hamilton

That is the responsibility of Babcock Thorn and I should have thought that the company would open negotiations with the trade unions quite soon. All that I can reassure the hon. Gentleman about is that those redundancies will be fewer in number that we forecast under the Government-owned plc.

Mr. Gordon Brown

I apologise, Mr. Speaker, for intervening again. However, will the Minister tell us whether, as part of the contract between the Government and Babcock Thorn, the Government have agreed to fund a number of redundancies, and if so how many?

Mr. Hamilton

We do not reveal the precise number, although we have agreed that there will be a certain number of redundancies.

It is time to stop arguing and to look to the future. We must work to make commercial management a success in the interests of all concerned, the nation, the Navy, the dockyard, the work force, and the regions. My hon. Friend the Member for Drake raised the issue of COMPEX. The COMPEX comparison exercise that was announced in the Government White Paper was to open up the market to help the Government to gauge the likely size and capability of the market and compare the performance of the commercial yards during the refits with similar refits being undertaken in the dockyards. It will' be at least another year before the final results are analysed, but some comparison of the frigate refits should be available shortly.

I should be doing very badly, Mr. Speaker, if I did not refer to the Merchant Navy, because I know that that has raised considerable interest in the debate, especially from the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan) and also from my right hon. Friend the Member for Taunton (Sir E. du Cann), who, I know, has a great interest in the future of the Merchant Navy. Many other hon. Members have also referred to the Merchant Navy and its importance to our defence. Hon. Members have asked about the defence implications of the falling tonnage on the United Kingdom register. Therefore, I shall deal first with the defence requirements.

The Government monitor closely the availability of merchant shipping to meet defence needs and, for the present, there are still sufficient ships to meet that demand in time of war. Our main concern has been the number of trawlers suitable for mine countermeasure purposes. Our studies into the alternative ways of meeting the requirements have shown that perhaps the task could be undertaken by suitably modified offshore support vessels.

However, right hon. and hon. Members have taken the discussion much wider than the issue of the needs of the armed forces, into questions of civil supply and war and economic shipping. Of course, those are matters for my right hon. Friend the Secretary of State for Transport, and my officials work closely with his Department. I am glad to see that I have the support on the Front Bench of my hon. Friend the Under-Secretary of State for Transport. The House will have to forgive me if I add nothing new but merely remind hon. Members of what the Government are doing.

During the past decade there has been a substantial reduction in the number of ships on the United Kingdom register, basically as a result of transfer and sale and not of low investment. United Kingdom shipowners are continuing to sell vessels or transfer them to other registers. However, a growing number are going to dependent territory registers. Such transfers do not mean that ships are lost to the nation's needs. The Government already have the power to requisition, in time of tension or war, ships of dependent territory registers, as well as United Kingdom registers. The Government are giving considerable attention to the question of foreign registered vessels. The Department of Transport is having discussions on that issue with three major open registry states.

Mr. O'Neill

Can the hon. Gentleman advise the House how willing the crews, who in the main will not be British, will be to participate in such an exercise as the defence of the United Kingdom, no matter how desirable we consider that to be? Where shall we get the men to look after and support those ships?

Mr. Hamilton

On the issue of manpower and redundancy, I am sorry that the right hon. Member for Cardiff, South and Penarth found the announcements of my right hon. Friend the Secretary of State for Transport on 10 December 1986 to be limp. My right hon. Friend is consulting shipowners and the seafaring unions about the ways in which the Government could help with training and with the cost of transporting crews to and from vessels that operate away from this country. He also announced the Government's intentions to create a Merchant Navy reserve. That means financial support and, where necessary, legislation at the earliest opportunity. I hope that that answers the hon. Gentleman's question.

My hon Friend the Member for Beverley (Sir P. Wall) and the hon. Member for Wallsend (Mr. Garrett) raised the question of ship orders—

Sir Edward du Cann

Although I appreciate that this is the first Navy debate that my hon. Friend has had the opportunity to reply to, in the context of what he has said—which, I regret to tell him, I do not think that the House will find satisfactory—will he be good enough to ensure that the debate is reported to my right hon. Friend the Secretary of State for Transport, who has not been able to be present during the debate, with a view to considering everything that has been said on the subject of the merchant service? In spite of what my hon. Friend has said, it remains the view of the House that the position is extremely serious and that urgent Government action is needed to rectify it.

Mr. Hamilton

I take the point. The House has expressed considerable anxiety and I know that my hon. Friend the Under-Secretary of State for Transport, who is present, will report back to the Secretary of State for Transport. I am sure that the debate will be read carefully' to pick up all the points that have been made. Today we can consider seriously only the defence interests of merchant shipping and that is what I have tried to do.

On ship orders, there have been many inquiries about the type 23. Orders were placed in the summer for three type 23 frigates and it would be premature to take decisions on the size and timing of orders for further follow-on ships. My hon. Friend the Member for Portsmouth, North (Mr. Griffiths) mentioned Vosper Thornycroft and minehunter orders. Tenders for four follow-on single role minehunters were invited last month and no decisions have yet been taken on the timing of the orders for fleet minesweepers. Orders placed in 1986 were worth almost £2 billion. Twenty-six ships and submarines are currently on order, including the first of a class of five new vessels, that is the type 23 frigate, the single-role minehunter, the AOR, Trident and Upholder.

My hon. Friend the Member for Beverley suggested that the Government had moved from a commitment of 50 destroyers to "about" 50. This is a misunderstanding. "The Way Forward", Cmnd. 8288, in 1981 stated: We have at present 59 destroyers and frigates declared to NATO. We shall now seek to sustain a figure of about 50.

The hon. Member for Newcastle-upon-Tyne, East (Mr. Brown) returned yet again to the AOR order. Harland and Wolff's bid was scrutinised originally by two independent consultants- PA on costing and Three Quays on ship design. The building cost is to be monitored by a third. Touche Ross. I apologise if this profusion of independent advice led me to refer to the latter in the wrong context earlier. The plain fact is that Swan Hunter, an admirable yard in other ways, lost the order on technical merit as well as on costs. However, it has been given a special chance for the second ship and I hope that it will take it.

Mr. Nicholas Brown

If that is the case, why do the Government insist that scrutiny will be through the Northern Ireland Office, which is clearly partial in its judgment on this matter? Why does the hon. Gentleman not allow all the issues involved in the debate to be scrutinised by somebody who is completely independent, not the Northern Ireland Office or a direct agent of the Government?

Mr. Hamilton

Those independent consultants will be most insulted to hear that they are for some reason not independent. They are set up to give independent advice.

Mr. Garrett

Would it not be possible for the reports of the independent consultants to be published? Could we not have a publication of the comparative technicalities to allow citizens such as ourselves to use our common sense and our judgment?

Mr. Hamilton

I do not think that it is our business to publish all independent consultants' reports, but I assure the hon. Gentleman that progress on building the AOR will be monitored by Touche Ross.

The hon. Members for Clackmannan and for Wallsend and my hon. Friend the Member for Bristol, East (Mr. Sayeed) raised the question of CACS. The programme to develop the complex computer-based automated command system for surface ships has suffered problems with delay and cost overrun, especially in software development. Vigorous steps have been taken to address those problems and to determine a sensible way forward. In the case of CACS4, it has recently been decided that work to develop and produce the command system for the new type 23 frigate will be put out to competitive tender. That is in line with our policy of introducing competitive tendering where possible and will afford the opportunity of considering the application of the latest computer technology in the type 23 programme. Invitations to tender have been sent to four consortia and bids are due in mid-April.

Mr. Sayeed

Is my hon. Friend sure that there will be no delay in the building of type 22 and type 23 frigates and is he certain that CACS will be ready in time?

Mr. Hamilton

I am quite sure that there will be no delay to the type 23 building programme, but I cannot guarantee that the CACS will be ready to go into those frigates.

My hon. Friend the Member for Beverley talked about the cost-effectiveness of the Royal Marines. My hon. Friend the Member for Ynys MÔn (Mr. Best) and the hon. Member for Newcastle upon Tyne, East also referred to the great value of the Royal Marines and the need for amphibious shipping. On 9 December my right hon. Friend the Secretary of State said that the Government had decided to retain an amphibious capability in the longer term.

As a first procurement step, we have now placed a contract to the value of under £250,000 to Swan Hunter for feasibility studies into the option of extending the lives of assault ships Fearless and Intrepid. We have also sent letters to firms that might be interested in participating in studies into the option of building replacement ships. HMS Fearless and HMS Intrepid are currently planned to remain in service until the mid-1990s. There is ample time for us to pursue whatever option proves to be the most cost-effective.

Mr. Best

My hon. Friend will recall that I pointed out that with regard to the replacement of HMS Fearless and Intrepid there would be a study that would conclude in the summer of 1988 and it would be a further year before there was an evaluation of the proposals. Does that mean that the Government cannot come to a decision as to whether to replace or extend until the summer of 1989? When will the decision have to be made to ensure that there will be a continuance of an amphibious capability, bearing in mind what the Minister has said about the lives of HMS Fearless and Intrepid coming to an end in the mid-1990s?

Mr. Hamilton

We will certainly have the continuity that my hon. Friend is seeking and we shall certainly have the life-extended ships or new ships by the mid 1990s. That is all I can say.

The hon. Member for Wallsend and my hon. Friend the Member for Ynys Mon mentioned the saga of the short, fat ships. As announced in another place, we are fortunate to have secured the services of Lloyd's Register of Shipping to conduct the inquiry that will be considering the report by Lord Hill-Norton on hull forms. Lord Hill-Norton has said that he regards Lloyd's Register as being fully qualified to conduct an independent enquiry. We welcome the opportunity to resolve this long-running controversy. The inquiry will consider the conclusions of Lord Hill-Norton's report and we will not miss the opportunity of improving the Royal Navy's capabilities or the possibility of reducing costs.

It is up to the chairman to decide how he will conduct the inquiry, but it is the intention that he should produce an unclassified summary of his report for publication. Whatever the outcome of the inquiry, the type 23 is the only frigate design that has progressed sufficiently to be considered for series ordering by the Ministry of Defence in the next few years.

Mr. James Callaghan

rose—

Mr. Hamilton

I am sorry; I must get on.

My hon. Friend the Member for Gillingham (Mr. Couchman) raised the difficult point about the dumping of medium-level nuclear waste at the Royal Naval dockyard in Gillingham. I apologise to my hon. Friend but I have answered his query and that answer is probably sitting on the board at the moment.

The residual nuclear storage facility—known as MOD Gillingham—consists of a storage facility for radioactive materials, contaminated equipment and a disposal site for low-level radioactive waste. The latter was used for the disposal of waste up till the end of last year, but there are no plans for its further use. The storage facility was used for contaminated equipment when Chatham dockyard was in operation. Now it contains intermediate-level waste awaiting disposal. Its use for the storage of containers of radioactive material and contaminated equipment from other dockyards is being considered. Items may be transferred, temporarily, from Devonport and/or Rosyth pending an extension of their own storage facilities. There will be no hazard to members of the public from the storage of such items since the radiation levels just outside the buildings will be such that no special restrictions on movement will be required. I must stress to my hon. Friend the Member for Gillingham and to my hon. Friend the Member for Medway (Dame Peggy Fenner) that the storage will be only temporary.

Mr. Couchman

Would my hon. Friend care to say what "temporary" means?

Mr. Hamilton

That will be the time that it takes to construct the facilities at the other dockyards.

There seems to be some confusion about how the Trident savings are made up. The net real cost reductions on Trident are £546 million and the change in the exchange rate produced savings of £598 million, making a total of £1,144 million. The effects of inflation added on £540 million, making net savings of £604 million.

I should like to go on about Trident—

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

1. STATUTORY INSTRUMENTS, &c.
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1. NORTHERN IRELAND 46 words
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2. WEIGHTS AND MEASURES 72 words
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3. DEFENCE 26 words
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4. ENERGY 26 words
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5. TREASURY AND CIVIL SERVICE 23 words