Commons Sitting of 27 October 1987

Preamble
The House met at half past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRAYERS
  PRIVATE BUSINESS

    NATIONAL PROVIDENT INSTITUTION BILL [Lords]
    As amended, considered.
    Amendment made.
    To be read the Third time.

    BRITISH RAILWAYS (LONDON) BILL [Lords]
    Order for Second reading read.
    To be read a Second time upon Thursday.

Oral Answers to Questions
  SOCIAL SERVICES

    Hip Replacements
    Mr. Steenasked the Secretary of State for Social Services if he will make a statement on the progress of hip replacement operations under the National Health Service.
    The Secretary of State for Social Services (Mr. John Moore): In 1978 there were 28,000 such operations in England. By 1985 this had risen to 37,650, an increase of 34 per cent. While the number of operations has increased steadily, so, too, has the demand. We have made it clear to health authorities that hip replacement operations should he regarded as a priority for the development of services in the acute sector. The aim is for 48,000 such operations a year by the year 1990.
    Mr. Steen: Although, clearly, many thousands of elderly people have cause to be grateful to the Government for the number of hip replacement operations, is my right hon. Friend aware that there are special problems for elderly people in retirement areas? There is increasing demand there for hip operations, and the special needs of those people must be met if they are not to become prisoners in their own homes. Will my right hon. Friend say something particularly about the Plymouth and Torbay area health authorities, in which I have a special interest because of my constituents?
    Mr. Moore: I know that my hon. Friend would thank not the Government, but the excellent National Health Service for the success in this area. I cannot give details but I shall write to my hon. Friend about the specifics on the Torbay and Plymouth areas. In my hon. Friend's region, waiting times have been radically reduced from 32 weeks in 1979 to 22 weeks at present, which is only a fraction above the national average and is a major improvement.
    Miss Abbott: Will the Secretary of State issue an instruction to all regional health authorities not to close operating theatres over Christmas, as this would enable a further reduction to be made in the waiting lists?
    Mr. Moore: I am not sure how the hon. Lady's question connects precisely with the specific question on hip operations. Obviously, her remarks about the particular management of regions will be drawn to the attention of the region in question.
    Mr. Ralph Howell: Is my right hon. Friend aware that the Norwich district authority proposes to close the Wells cottage hospital to save £150,000? Is he further aware that—
    Mr. Speaker: Order. Does the hon. Member's question deal with hip operations?

    London Ambulance Service
    Mr. Spearingasked the Secretary of State for Social Services if he is satisfied with the response times of the London ambulance service during April, May and June of 1987; and what action he has taken to ensure that previous levels of performance are maintained.
    The Parliamentary Under-Secretary of State for Health and Social Security (Mrs. Edwina Currie): In general, yes. During the period January—June 1987 the London ambulance service responded to 89 per cent. of accident and emergency calls within 14 minutes and 95 per cent. within 17 minutes. That is an improvement on last year.
    Mr. Spearing: Does the Minister agree that the question was about April, May and June? In her letter to me dated 8 September the hon. Lady admitted not only that shifts were not covered but that more than 50 emergency ambulances were single manned during that period. Is it not a fact also that the London ambulance service will have to contribute from its resources and, therefore, from economies 1 per cent. of the pay offer now on the table? Does the hon. Lady agree that the effectiveness of ambulance services is not helped by spreading resources ever more thinly and that the emergency services must be demand-led and not budget-prescribed?
    Mrs. Currie: I am sorry if the hon. Gentleman is not satisfied with the figures that I give him. He never is. However, I point out that in the period that I mentioned—the first half of this year—the average response time for emergency calls in this city was just over 10 minutes. Given the traffic conditions in the capital that is absolutely marvellous, and it compares very well with the average response time in Derbyshire—which contains my constituency—where that time is well over 13 minutes.
    Mr. Harry Greenway: Is my hon. Friend aware that in my constituency and in many others car parking is so dense and tight that emergency services such as the ambulance service simply cannot get to the people whom they need to collect for serious and emergency operations? Will her Department take a serious interest in this issue to see what can be done to improve matters?
    Mrs. Currie: That is a most serious matter. Emergency services are allocated largely on the basis of medical need, and it is a matter of concern if ambulances cannot get through to the people who need them. If my hon. Friend will give me more details, I shall take the matter up with the appropriate authorities.
    Mr. Spearing: On a point of order, Mr. Speaker. Owing to the unsatisfactory nature of the Minister's reply, I beg to give notice that I shall seek to raise this matter on the Adjournment at the earliest and most appropriate opportunity.

    Maternity Beds
    Mrs. Fyfeasked the Secretary of State for Social Services what steps he takes to ensure that the number of available maternity beds is sufficient for comfort and safety during confinement.
    Mrs. Currie: It is regional health authorities in England who are responsible for maternity services, and this includes determining the number of maternity beds. I am satisfied that we have plenty of beds. The Health Service in Scotland, which covers the hon. Lady's constituency, is a matter for my right hon. and learned Friend the Secretary of State for Scotland.
    Mrs. Fyfe: Will the Minister agree to conduct a review of existing maternity services both in England and Wales and in Scotland? Many women thoughout Britain would dispute her complacent response to this matter. They know from direct experience that the service is not always satisfactory. Does the Minister agree that it is vital that women should feel confident that the service offered is safe and secure for them and for their babies? Therefore a review would be in order. The Government should consult not only the area health authorities but women's groups.
    Mrs. Currie: The hon. Lady asked me about beds. We have plenty of maternity beds throughout the country. Occupancy of maternity beds ranges from 59 per cent. in the Trent regional health authority area, which covers my area, to 70 per cent. in Glasgow. The average maternity bed produces only one baby per week. That does not suggest overcrowding or excessive pressure on resources.
    Mr. Redwood: Is my hon. Friend aware that in the West Berkshire district health authority area one of the problems in keeping beds open is the high cost of recruiting labour, which is extremely difficult given the national average rates agreed? Does she have any proposals for breaking the log-jam so that we may recruit the staff that we need to keep the beds open?
    Mrs. Currie: For some time it has been our policy to pay to our staff—including midwives—the rates of pay that the review boards recommend. That includes a 9 per cent. pay rise this year. As a simple matter of fact, there has been a large increase in the number of midwives whom we employ, from 20,000 when we took control in 1979 to nearly 23,000 in 1985.
    Mr. Beith: Will the Minister note that if the Northumberland health authority goes ahead with its plan to close down all the maternity beds in Alnwick many babies will be born, not in maternity units, but in ambulances on 40mile journeys to a distant hospital? Will she take careful note of that when the matter eventually comes before her?
    Mrs. Currie: If the community health council objects to any major proposal for such a change, the matter will come before Ministers in due course. We treat each proposal on its merits and we try ultimately to base our decision on the interests not only of mothers but of babies.
    Ms. Harman: Will the Minister take steps to improve maternity services so that pregnant women do not have to wait for hours in ante-natal clinics to see a different doctor or midwife on each visit? Will she ensure that extra resources are rapidly provided to regional health authorities when there is a sudden increase in the birth rate, to avoid women being left not knowing in which hospitals their babies will be born? Will she also increase the number of special care baby cots so that all low birth weight babies have a fighting chance of survival?
    Mrs. Currie: I could not agree more with the hon. Lady's first sentence. The way in which pregnant women are made to wait is sometimes a disgrace, but that is a matter not of resources, but, frequently, of the need for careful management and treating the individual as a human being rather than just as a patient.

    Mental Patients
    Mr. Bowisasked the Secretary of State for Social Services if he will give the figures for mental patients (a) living in National Health Service hospitals, (b) living in residential care accommodation and (c) living in the community; and if he will give these figures for those in England and Wales and for the Wandsworth health authority, respectively.
    The Minister for Health (Mr. Tony Newton): On 31 December 1986 there were 60,279 mentally ill in-patients in hospitals in England, including 807 under the care of the Wandsworth health authority. The number of places in residential care accommodation provided specifically for mentally ill people is 8,267 for England, including 133 provided by the London borough of Wandsworth. We have no comprehensive figures for people living in the community who could be described as in some degree mentally ill, many of whom are being treated by their general practitioners.
    Mr. Bowis: Does my hon. Friend agree that there is an imbalance in the mental health budget whereby 90 per cent. of the funds go to the hospital service and only 10 per cent. to care in the community? Does he agree that the satisfactory transfer of patients to the community requires adequate housing, personal income and aftercare as well as adequate co-operation and co-ordination between the Health Service and social services departments? Does he agree that the programme of mental hospital closures should proceed extremely slowly until those prerequisites are met and the mental health budget rebalanced?
    Mr. Newton: There are really three questions there. First, I think that the 90:10 statistic is oversimplified, hearing in mind how many mentally ill people are living in their ordinary homes.
    On the second part of the question, I very much agree with the general thrust of my hon. Friend's remarks. That is one reason why we have asked Sir Roy Griffiths to conduct a review of many of these important matters.
    On the third point, I entirely accept that closure proposals, where such exist, should be handled very carefully, because the aim is not to close hospitals but to ensure better care for the patients.
    Mr. Loyden: Is the Minister aware of the serious concern of parents of mentally handicapped and mentally ill people with respect to two different needs, in that people in that situation might be better off in hospital until the

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    Secretary of State provides the funding to ensure that the necessary care in the community is available? Does the Minister agree that there is no excuse for closing hospitals before that provision is made?
    Mr. Newton: I have already made my view clear. The aim of health authorities in this area is to improve the pattern of patient care. Hospital closures are incidental. If the hon. Gentleman studies the figures, he will see that there have been very substantial increases in resources for the care of mentally ill people in the community, including, for example a more than doubling of the number of community psychiatric nurses.
    Dame Jill Knight: Will my hon. Friend take on board the fact that there is widespread concern that people are being let out of hospital when there is not always adequate care available for the community as well as for the patient? Is he aware that a great deal of trouble may be caused when neighbours suddenly find these poor people living next door? I beg my hon. Friend to bear that in mind.
    Mr. Newton: I fully accept that there is concern, and in some cases I share it. That is one reason why at almost every meeting with district or regional health authorities I stress the point that I have emphasised to the House—that discharges need to be properly planned and based on proper provision of alternative facilities.
    Mr. Wigley: If that is so, when do the Government intend to implement one of the essential first steps towards ensuring proper care in the community—the Disabled Persons (Services, Consultation and Representation) Act 1986, which has still not been implemented?
    Mr. Newton: The hon. Gentleman knows full well that the primary focus of discussions between my hon. Friend the Minister and the local authority associations relate to sections 5 and 6 of that Act, which are concerned with disabled school leavers. We are very conscious of the importance of section 7, and one of my aims is to get that implemented as soon as possible.
    Mr. Michael Morris: Is my hon. Friend aware that included in the statistics are the children of the Princess Marina hospital? I extend a personal "thank you" to our hon. Friend the Parliamentary Under-Secretary of State for visiting that hospital. Is my hon. Friend aware that those children are in tragic circumstances? May I press him for an early decision that they should remain in hospital?
    Mr. Newton: I shall take careful note of what my hon. Friend said. As he mentioned, our hon. Friend the Parliamentary Under-Secretary of State recently visited that hospital. I wish to take this opportunity to make it clear to him and the House that in my judgment there are still many people who need hospital care. The policy of care in the community is not something to be pursued regardless of the needs of the individual concerned.
    Mr. Tom Clarke: Does the Minister accept that his response to the hon. Member for Caernarfon (Mr. Wigley), in which he explained the delay in implementing one section of the Disabled Persons Act, does not excuse the delay in implementing another section? Does he further accept that there is a need for proper funding of bridging arrangements? The transitional period between hospital discharge and patients going into the community is of profound importance, if only because those who suffer from mental illness almost certainly have the
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    additional adversity of poverty, unemployment, homelessness and family break-ups. If the Government continue with their inadequately funded community care policy, will it not simply be seen as a euphemism for community neglect?
    Mr. Newton: On the hon. Gentleman's first point, I did not in any way use my references to sections 5 and 6 as an excuse for not implementing section 7. I said that, quite rightly, a great deal of pressure in the House and elsewhere has been concerned with the provision for disabled school leavers. However, I also said that I attached high priority to implementing section 7. Regional health authorities have substantial resources available, and we look to them to use those resources sensibly to provide for the transitional period, as the hon. Gentleman rightly recommended.
    Mr. Nicholas Winterton: Will my hon. Friend give a firm assurance that he will slow down the closure of psychiatric hospitals until there are sufficient trained and qualified staff to look after the patients when they are in the community, and also that suitable accommodation is available? We do not want them to end up in prisons, as the Select Committee on Social Services found in its inquiry into the prison medical service.
    Will my hon. Friend also confirm—as I believe he has indicated already—that there will be a long-term need for hospital care for many of the mentally ill, especially the more acute and severe schizophrenics?
    Mr. Newton: Certainly the answer to the latter part of my hon. Friend's question is yes. I think that, by implication, I have already answered the first part. The slowing down of the programme is not the issue; rather, it is that we will not approve hospital closures until we are satisfied that proper alternative provision is available.

    Health Inequalities
    Mr. Tony Lloydasked the Secretary of State for Social Services if he will make a statement regarding health inequalities in and between regions in England and Wales.
    Mr. Moore: It has always been one of the principal aims of the National Health Service to ensure that services are equally available to all who are in equal need and considerable progress has been made since 1977–78 in ironing out long-standing inequalities in health provision between regions.
    Mr. Lloyd: The right hon. Gentleman may be interested to know that almost all experts disagree with his view that progress has been made. The reality is that my constituents and others in the northern region stand a much higher chance of ill health and of dying early than do those in the more fortunate regions. Given that background, and given that every Member of Parliament from the North-West has files bulging with cases of failures of social service provision, why did the north-west region recently say that it would accept service reductions from the district health authorities to balance the budget? If the right hon. Gentleman does not wish to comment on that matter now, will he accept my challenge to come to the north-west and debate the failure of the Health Service in that region so that the public can make up its mind on the matter?
    Mr. Moore: I shall correct the misimpression given by the hon. Gentleman about NHS progress in his region as

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    against the country generally. Since 1977–78, the RAWP reallocation, to the advantage of the northern region, has progressed from the point where its resources were 9 per cent. below target to being currently 2 per cent. below target. As opposed to the appalling collapse in the capital programme under the last Labour Government, the region now has the second largest capital receipt programme. Its citizens are benefiting from the RAWP reallocation undertaken by this Government.
    Mr. McCrindle: Has the time not arrived to reconsider the allocation of resources to the four Thames health regions? Whereas in 1977–78 it could be said that facilities in the four regions were ahead of those in the rest of the country, that is no longer the case, and unless there is an increase in resources for the four Thames health regions, patient care is ultimately bound to suffer?
    Mr. Moore: My hon. Friend will know that I have been a London Member for many years. I am somewhat conscious of what he said when I look at the relative data throughout the country. The RAWP programme ensures that service provision is equalised throughout the country. I recognise what my hon. Friend said to the extent that the RAWP formula is currently under review.
    Mrs. Clwyd: Does the Minister dispute all the evidence that we now have a two-nation divide in health as well as in wealth?
    Mr. Moore: I sometimes wonder whether the hon. Lady and other Opposition Members might consider what they say in regard to the relative comparators between our country and the rest. The hon. Lady may not be aware that health—[Interruption.]The answer will come in proper time. The hon. Lady may not be aware that health inequalities are less significant in the United Kingdom than in most other Western countries, including the United States, Japan and France. That is the reality of the relative lack of inequality. The question related to equality in the provision of services. RAWP is seeking to do precisely that.
    Sir Peter Emery: Will my right hon. Friend most seriously consider the inequalities that arise specifically in areas where there is a large retired and aged population and where doctors must spend much more time dealing with the elderly? Perhaps hip operations can be dealt with in the private and public sectors to relieve the specific problems that the elderly face in such areas.
    Mr. Moore: My hon. Friend made an important point. I have been particularly conscious of it when I have looked at the concept of the primary health care review. I hope that I shall be able to assist in that direction.

    Tameside and Glossop General Hospital
    Mr. Hawkinsasked the Secretary of State for Social Services if he will make a statement on the Tameside and Glossop general hospital development.
    Mr. Newton: I am pleased to report that, after a delay while additional post-contract work is carried out, the admission of the first patients to phase II of Tameside general hospital is scheduled for the autumn of 1988.
    Mr. Hawkins: My hon. Friend's statement will be well received in my constituency of High Peak and in the north-west as a whole. The large expansion of the hospital shows
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    the Government's commitment to the Health Service and to the north. None the less, I seek an assurance from my hon. Friend that adequate funds will be made available in future so that the magnificent new facilities can be fully staffed without detriment to other important facilities in the north-west.
    Mr. Newton: I am grateful for my hon. Friend's first remarks. I am glad to know that, even in this place, one can please some of the people some of the time. My hon. Friend will know that the region and the district are currently discussing funding issues. I think I am right in saying that the region has already offered £2·6 million as revenue consequences, but some issues remain to be settled.
    Mr. Favell rose—
    Mr. Speaker: Well—yes—Mr. Favell.
    Mr. Favell: I am entranced by the way in which you receive my question, Mr. Speaker.
    As another north-west hon. Member, I do not have a postbag bulging with letters about the services that are being delivered in Stockport. Is one of the problems not inequality—
    Mr. Speaker: Order. Does the hon. Member's question cover Tameside and Glossop general hospital?
    Mr. Favell: It covers the north-west region and the north-west regional health authority.
    Is one of the problems not inequality of resources but inequality of performance? Are not many districts just not performing?
    Mr. Newton: I am afraid that I could not hear part of my hon. Friend's question, so I can hardly expect that he will be as entranced by the answer as Mr. Speaker was by the question. However, I can at least confirm that Stockport and Tameside are in the north-west region.

    Handicapped Children
    Mr. Rookerasked the Secretary of State for Social Services if he is satisfied with the level of physiotherapy support available from the National Health Service to special schools for handicapped children in Birmingham.
    Mrs. Currie: Yes. The provision of physiotherapy services to special schools is the responsibility of the local health authorities in co-operation with the local education authorities. It is for them together to decide on the appropriate level of physiotherapy services.
    Mr. Rooker: I am surprised that the Minister is satisfied, given the amount of concern that has been expressed by parents at the Wilson Stuart special school in my constituency. That school caters for children from at least six constituencies. Is the Minister satisfied that the differences between health authorities in the city of Birmingham can lead to the position where the Wilson Stuart school in West Birmingham health authority has 140 handicapped pupils with two physiotherapists and two who are rotational, whereas at Bray's special school, which is covered by South Birmingham health authority, 110 pupils, who have almost the same type of disability, have the services of 4½ full-time physiotherapists? The Minister cannot be satisfied with such discrimination against the pupils from the six constituencies in north Birmingham.
    Mrs. Currie: The Wilson Stuart school, which the hon. Gentleman mentioned, was affected by a shortage of paediatric physiotherapists at the end of last year, but is currently up to establishment. The number of physiotherapists who are employed by the Birmingham health authorities has jumped from 268 in 1982 to 302 this year. The biggest increase has been in West Birmingham health authority, which covers the hon. Gentleman's constituency.
    Mr. Alfred Morris: Is the Minister aware that my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker), has exemplified, by reference to Birmingham, a problem which grievously affects handicapped children all over Britain? Is she further aware that giving the right help in the right place at the right time can make all the difference between enabling a handicapped child to live an independent life and living a life of dependence and preventible disability? Will she consider this problem more urgently and accept that we would like a fuller statement at an early date?
    Mrs. Currie: I accept much of what the right hon. Gentleman has rightly said. The number of physiotherapists who are employed in the Health Service has climbed rapidly from about 7,000 when he was a member of the Government to about 11,000 now. Perhaps that will help to answer his question.

    AIDS
    Mr. Yeoasked the Secretary of State for Social Services when he plans to respond to the third report of the Social Services Committee on problems associated with AIDS, HC 182, Session 1986–87.
    Mr. Moore: I expect to respond to the Committee's report before Christmas.
    Mr. Yeo: Does my right hon. Friend agree that a programme of anonymised screening represents by far the simplest way of obtaining accurate information about the spread of AIDS through the population? Does he further agree that without that information it is impossible to evaluate the efforts that the Government are making to combat the spread of this appalling disease? Does he agree that such a programme could be introduced at a low cost because blood samples are already routinely collected from large numbers of people?
    Mr. Moore: What I can agree with is that we need better information about the spread of the HIV infection. I know that my hon. Friend served honourably on the Select Committee in the previous Parliament and that the Committee did not share his view on anonymised screening. Having said that, I am, of course, anxious to ensure that we have the best scientific advice, and I am considering the issue. I hope that my hon. Friend will share my desire for better information, not necessarily gained from the route that he seeks to pursue.
    Mr. Frank Field: Following the Committee's report, have the Government been able to respond positively to the capital needs of London Lighthouse, and if so to what extent?
    Mr. Moore: I know of that particular issue, and my hon. Friend the Minister for Health is actively considering it at the moment. I hope that he will be able to make a statement, which I hope will be helpful, in the not too distant future.
    Sir David Price: May I confirm to my right hon. Friend that my hon. Friend the Member for Suffolk, South (Mr. Yeo) was in a minority of one in proposing anonymised screening? All other members of the Select Committee felt that it would be entirely irresponsible clinically. However, if a person is found to have a blood sample which is HIV positive, it must be right to do something about that patient.
    Mr. Moore: I appreciate my hon. Friend's comments. As he and hon. Members on both sides of the House will know, my predecessor welcomed unreservedly the advice of the Committee and the help that it gave in this difficult area.
    Mr. Robin Cook: Does the Secretary of State accept the estimate of the Select Committee that 1,200 haemophiliacs are antibody positive as a result of infection at the hands of the NHS? Does he recognise that the Government must bear part of the responsibility for that number because of the failure to make Britain self-sufficient in blood products, which has left us dependent on imports from commercial sources in the United States? Does he agree with the robust statement of the Under-Secretary of State, the hon. Member for Derbyshire, South (Mrs. Currie), that anyone who denies that AIDS can be transmitted by blood products needs his head examined? Therefore, does he accept that, whatever the legal liability, the Government have a moral obligation to help those haemophiliacs and to protect their dependants against mortgage defaults and homelessness?
    Mr. Moore: I can confirm the figures that the hon. Gentleman gave with regard to the 1,200 haemophiliacs. I have received letters from my hon. Friends on this issue. Some of their constituents have suffered from this, and I share their deep sympathy, but the House will be aware that there has never been a general state scheme to compensate those who suffer the unavoidable adverse effects that arise from medical procedures. The Government have tried to provide all NHS facilities to those who suffer illness as a result of the infection. So far we have provided £104,000 to each of the six haemophilia reference centres in England so that they can provide a counselling service. In addition, the DHSS is working closely with the Haemophilia Society. Beyond that, I can say that I will meet representatives of the Haemophilia Society next week.

    Elderly Households
    Mr. John Mark Taylorasked the Secretary of State for Social Services what recent evidence his Department has compiled on the expenditure of elderly households on domestic appliances and other durable goods.
    The Minister for Social Security and the Disabled (Mr. Nicholas Scott): The latest information is for 1985, when the average pensioner household spent more than £230 on durable household goods. This forms the fastest growing area of pensioners' spending and is two thirds higher in real terms than in 1979.
    Mr. Taylor: I thank my hon. Friend for his remarks about pensioners' spending. Will he comment on pensioners' incomes which underlie that spending? How do they compare with 1979?
    Mr. Scott: Again, the latest information available is for 1985. Between 1979 and 1985 pensioners' incomes

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    increased in real terms by about 18 per cent., which is roughly twice as fast as incomes in the community as a whole.
    Mr. McAllion: The Minister will be aware that one of the most important items of expenditure in any elderly household is the purchase or rental of a television set. Indeed, given the lack of safety on the streets, and the fact that many elderly people are afraid to go out after dark, it could be argued that acquiring a television set is an essential item of expenditure in elderly households. Therefore, to keep as many elderly people as possible living independently in the community, will the DHSS support the proposal for a system of concessionary television licences for pensioners, which would cost the Treasury only £330 million? It gives thousands of millions of pounds in tax cuts to the rich every year.
    Mr. Scott: No doubt many hon. Members will recall the time when pensioners were given vouchers with which to buy cigarettes and other tobacco products. We should concentrate on protecting the real value of the retirement pension rather than embarking on a series of specific grants for items which some pensioners may not want.
    Mrs. Beckett: Does the Minister not recognise that there is something a little more than ironic about Ministers congratulating themselves on the increase in pensioners' incomes, which stemmed directly from the changes made in state and occupational pensions by the Labour Government in 1975 and which were seriously weakened by the activities of this Government in the Social Security Act 1986? Does he admit that that Act will weaken the standard of living of pensioners?
    Mr. Scott: No. The steady maturing of the SERPS scheme, the reforms which we shall introduce for pensions in 1988, the increase in pensioners' savings and the Government's success in controlling inflation will all contribute to rising standards of living for our pensioners.

    Ambulance Service
    Ms. Ruddockasked the Secretary of State for Social Services what is the percentage change in non-emergency ambulance patient miles in Lewisham between 1983 and 1987.
    Mrs. Currie: The London ambulance service does not calculate patient mileage statistics by district health authority.
    Ms. Ruddock: Does the Minister not think that it should begin to collect such statistics, given that there is an increasing percentage of elderly, chronically sick and disabled people in the community, particularly as a result of Government policies on community care, the fact that the dial-a-ride schemes are vastly oversubscribed and given that a walking case is defined as someone who can walk with the help of one other person and who can sit in a vehicle and therefore may not use the ambulance service?
    Mrs. Currie: The London ambulance service runs some 1,000 vehicles. Last year it performed 2·3 million patient journeys and covered some 12 million miles. It answers emergencies at the rate of 1,300 every day of the year and the average ambulance journey costs £18. I can give the hon. Member no end of statistics, but I apologise for the fact that I cannot give her exactly the ones that she wants.

    Health Services and Public Health Act 1968
    Mr. Ian Bruceasked the Secretary of State for Social Services how much the Government are making available in the current year for grants under section 64 of the Health Services and Public Health Act 1968.
    The Parliamentary Under-Secretary of State for Health and Social Security (Mr. Michael Portillo): In the current financial year the Department is planning to provide funding of more than £37 million to the voluntary sector, an increase of 82·5 per cent. in real terms since 1978–79. Of that money about £26–3 million is provided under section 64.
    Mr. Bruce: I thank my hon. Friend for that excellent reply. Although I know he is aware that the new Chesil counselling centre in Weymouth is doing excellent work, can he confirm that, through section 64, the Government are giving funds to this type of project to support the work to overcome alcoholism and drug abuse?
    Mr. Portillo: Section 64 money is principally available for national schemes. I know about the Chesil counselling service, and I know that my hon. Friend is in touch with the county council about that service. We provide about £ ¾ million section 64 money to voluntary bodies concerned with alcohol abuse.

    Retirement Pensions
    Mr. Lathamasked the Secretary of State for Social Services if he will make a statement on the proposed increase in retirement pensions.
    Mr. Scott: This matter will be covered in the statement that my right hon. Friend will be making to the House shortly.

    Consultant Geriatricians
    Mr. Butterfillasked the Secretary of State for Social Services how many consultant geriatricians there are now compared with 1978.
    Mrs. Currie: The number of consultants in geriatric medicine in England has increased from 330 in 1978 to 479 in 1986. That is an increase of nearly 50 per cent. and it demonstrates our commitment to care for the elderly in this country.
    Mr. Butterfill: I offer my hon. Friend congratulations on such a satisfactory reply. Does she agree that the success of the NHS under this Government means that many people are living much longer than hitherto and that the demand for geriatric services is likely to increase still further in the future?
    Mrs. Currie: Yes, I agree. The increasing number of old people in our society and rising life expectancy are a tribute to success in the Health Service. There are more nurses in the geriatric service, more district nurses, more private residential care, more nursing homes, more home helps, more day centres and more people cared for in day hospitals. We expect those increases to continue.
    Mr. Janner: Is the Minister aware that far too many geriatric hospitals are outdated, ancient and inadequate and are totally unsuitable for the people who must live in them? Is the Minister aware that far too many pensioners

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    are in hospitals because there is inadequate care available for them in their homes and that the entire system of care for old people is cracking?
    Mrs. Currie: Perhaps the hon. and learned Gentleman is unaware that 1·6 million old people are currently cared for at home by home nurses and that that is a rapid increase on recent years. I take on board the point he makes about the tatty state of some old geriatric hospitals, and I hope that he will support the Government when we make moves to close and replace those hospitals.

    Elderly People
    Mr. Hinchliffeasked the Secretary of State for Social Services how many elderly persons were admitted to private residential homes with Department of Health and Social Security financial support during the year ended 31 March.
    Mr. Portillo: The information is not available in the exact form requested. Figures for February 1987 show that there were 65,000 people of pension age in private and voluntary residential care homes claiming supplementary benefit help with their fees.
    Mr. Hinchliffe: In view of the situation demonstrated by the recent Yorkshire Television programme, "First Tuesday", which looked at the care of the elderly, are the Government satisfied with the impact of their free market ideology on the care of the elderly? Furthermore, does the Minister accept that it is in the best interests of elderly physically or mentally handicapped people to be advertised as chattels in estate agents' descriptions of houses to be sold for the private care of handicapped people?
    Mr. Portillo: Recent concern has centred not only on private homes but on local authority homes. We shall look at the report of Lady Wagner's review of residential care, which is expected shortly. Meanwhile, the social services inspectorate is discussing with local authorities the ways in which it can improve its monitoring.

    Bridlington New Community Hospital
    Mr. Cranasked the Secretary of State for Social Services if he will make a statement on the Bridlington new community hospital.
    Mrs. Currie: I am delighted to say that Bridlington new community hospital was handed over by the contractors to East Yorkshire health authority on 23 October this year, three months ahead of schedule. The hospital cost £16 million and is expected to receive its first patients around Easter.
    Mr. Cran: I am sure my hon. Friend knows how delighted we are at having that hospital in east Yorkshire, but does she not agree that the mere fact that the consultant medical staff are being drawn from Scarborough should not be used as an excuse by those who would like to see East Yorkshire health authority die on the vine and be taken over—if I can be allowed to say it—by Hull health authority?
    Mrs. Currie: I shall convey to my colleagues in the regional health authority the views and remarks of my hon. Friend. I thank him for his kind words about that new development.

  PRIME MINISTER

    Select Committees
    Mr. Allenasked the Prime Minister if she has any plans to put before the House proposals for changes in the constitution or powers of Select Committees.
    The Prime Minister (Mrs. Margaret Thatcher): No, Sir.
    Mr. Allen: Does the Prime Minister agree that the continuing failure to set up departmental Select Committees is undermining the role of this House in holding the Government to account'? To ensure that the Select Committees have a life of their own, independent of Government—indeed, independent of shadow Government—will the right hon. Lady consider putting her personal weight behind the proposal that Members of this House should directly elect the members of the Select Committees?
    The Prime Minister: With regard to the hon. Gentleman's first point, as my right hon. Friend the Leader of the House said last Thursday at business questions, he is working through the usual channels to get the Select Committees going as soon as possible. I cannot add to that point. With regard to the hon. Gentleman's second point, the membership of Select Committees is ultimately for the House to determine. The membership is determined by the House on an amendable motion tabled on behalf of the Committee of Selection. I am not aware of any strong support for changing the present system.
    Mr. Michael Morris: With regard to the powers of Select Committees, does my right hon. Friend not think that the time is now appropriate for the Public Accounts Committee to monitor the nationalised industries, because now there are far fewer nationalised industries that w as the case when they were last considered?
    The Prime Minister: Ultimately, I think that this is a matter for the House itself. The Public Accounts Committee does an extremely good job.
    Mr. Wallace: I am sure the Prime Minister is aware that 40 per cent. of Scottish Conservative Back Benchers have stated publicly that they do not want to sit on the Select Committee on Scottish Affairs. Given that that will make it difficult for the Government to have a majority on the Committee, is it not time that the right hon. Lady hit the bullet and allowed a Select Committee on Scottish Affairs that reflected accurately the party situation in Scotland?
    The Prime Minister: As the hon. Gentleman is aware, the point was put to my right hon. Friend the Leader of the House last Thursday. The Committee is being considered along with the others, and my right hon. Friend is working through the usual channels to get the Committee going as soon as possible.
    Mr. Bill Walker: Is my right hon. Friend aware that the reason for the difficulties with the Select Committee on Scottish Affairs is the way in which that Committee has behaved in a partisan manner in the past? Those of us who worked hard to make the Committee effective were disappointed by the way in which it developed.
    The Prime Minister: I note what my hon. Friend says, and I am sure that there is no stauncher representative of Scotland than him.

    Engagements
    Mr. Allan Robertsasked the Prime Minister if she will list her official engagements for Tuesday 27 October.
    The Prime Minister: This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House I shall be having further meetings later today. This evening I hope to have an audience of Her Majesty the Queen.
    Mr. Roberts: In the light of the BP share issue fiasco, have the Government revised down the amount of money that they expect to raise from selling off our water industry? They estimated that they might raise £8 billion, even though the assets are worth £29 billion; so they were selling it off cheaply anyway. Are they going to raise about £3 billion-£4 billion now, bearing in mind that it will cost between £2 billion to £3 billion to install water meters on a compulsory basis in every home?
    The Prime Minister: With regard to water privatisation, there is a paving Bill before the House that will have to go through the House, and there will be other legislation before that process can be completed.
    With regard to BP, the underwriters have made representations to the Treasury that the BP issue should be withdrawn, and my right hon. Friend the Chancellor of the Exchequer is considering those representations, as he is contractually bound to do under the terms of the underwriting agreement. He will explain the procedures in the statement that he is to make shortly.
    Sir Peter Tapsell: May I put it to my right hon. Friend that the present crisis in stock markets around the world is primarily an international rather than a national problem, and that it needs an internationally co-operative response? In particular, it needs, first, an early announcement by the Federal Republic of Germany that it intends to reduce its interest rates. Secondly, it needs an early announcement from the President and the Congress of the United States that they intend to put up their taxes. Thirdly, it needs continuing international supervision and control of the new and ever-proliferating financial mechanisms, which, if necessary, will prohibit some of those speculative instruments so that we shall not all he faced by an international financial Frankenstein.
    The Prime Minister: With regard to the several points that my hon. Friend has made, I would agree with him that the matter of the United States' budget deficit needs dealing with. I believe that it is being dealt with by the President and Congress. I agree with my hon. Friend that that is a significant part of the matter. With regard to the co-operation of Germany and, of course, Japan, I point out that the Louvre agreement was reaffirmed by Mr. Baker, Mr. Stoltenberg and Mr. Poehl, and that has had a considerable effect on exchange rates. I also point out that interest rates have been falling, particularly at the long end of the market, as people have gone into gilts and bonds. We have reduced our interest rates recently, as my hon. Friend knows, so we have played our full part in sound financing, for which I have sometimes been criticised, but which has turned out to be the safest thing that we could possibly have done.
    Mr. Kinnock: It is clear, as the Prime Minister said, that the underwriters of the BP share issue do not consider the
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    sale to be a proper underwriting risk in terms of the prospectus. Does the right hon. Lady agree or disagree with them?
    The Prime Minister: I think, perhaps, that the right hon. Gentleman could not quite hear what I said earlier. He will know that I am restricted as to what I can say—
    Several Hon. Members: Why?
    The Prime Minister: For legal reasons. The right hon. Gentleman also knows that the Chancellor is to make a statement. Therefore, I repeat what I said: the underwriters have made representations to the Treasury that the BP issue should be withdrawn. The Chancellor is considering those representations, as he is contractually bound to do under the terms of the underwriting agreement and he will explain the procedures in the statement that he is to make shortly.
    Mr. Kinnock: The Prime Minister knows very well that there is no legal consideration that forbids her responding, especially when the underwriters have made their position so clear. Indeed, she has an absolute duty under the prospectus to respond. Is she not aware that the absence of a firm decision only prolongs and increases instability? Is not the Prime Minister's refusal to say what the position is a pathetic evasion of responsibility when the underwriters have made their position so clear?
    The Prime Minister: With all due respect, I do not think that the right hon. Gentleman has taken full account of what I said. The Chancellor is contractually bound to consider the representations. Under the terms of the underwriting agreement he must give due and proper consideration. That is what he is doing.
    Mr. Kinnock: The Prime Minister knows that the underwriters made their representations yesterday. Everybody knows that the Chancellor has an obligation to discuss the matter with them and, in the event of failure to agree, to consult the Bank of England. I ask again, why the delay? Why is the Prime Minister prolonging instability?
    The Prime Minister: The right hon. Gentleman knows that the Chancellor must genuinely go through the procedures. That is what he is doing. The right hon. Gentleman also knows that there is a private notice question from his Front Bench on precisely this matter.
    Mr. Beaumont-Dark: During my right hon. Friend's busy day, did she have a chance this morning to hear Sir Nicholas Goodison, the chairman of the stock exchange, whose motto is "My word is my bond"—[Interruption.]
    Mr. Speaker: Order.
    Mr. Beaumont-Dark: The chairman of the stock exchange, whose motto is "My word is my bond", said that the BP issue was fully underwritten and should go ahead. Underwriters have done well for some years, and now is the time for the motto "My word is my bond" to be taken up.
    The Prime Minister: As my hon. Friend is aware, my right hon. Friend the Chancellor must follow the procedures that he is contractually bound to follow. If he were not to follow those he would be the subject of criticism. He is following them and will make his decision and announcement, not today, but in due time.
    Mr. Allen McKayasked the Prime Minister if she will list her official engagements for Tuesday 27 October.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. McKay: When the Government come to make a decision on the BP flotation, which group will be the most important — the small shareholder or the fat cat underwriter?
    The Prime Minister: I cannot add to what I have already said. The Chancellor will be answering further after Question Time.
    Mr. Cormack: Will my right hon. Friend try to find time today to consider the desperate plight of the haemophiliac AIDS victims who are suffering through no fault of their own and who many hon. Members believe deserve very special consideration?
    The Prime Minister: I will, of course, discuss this matter with my hon. Friend the Minister for Health.
    Mr. Wareing: Will the Prime Minister say what advice I should give to people in my constituency who have taken her advice and invested in private occupational pension funds? Those constituents are now at risk because of the belief in market forces, to which she has been telling us we should respond. What advice should pension fund holders be given in relation to any BP issue?
    The Prime Minister: In general, the market is just about where it was just before the turn of the year, and very much higher than it has been on previous occasions.
    Mr. John Townendasked the Prime Minister if she will list her official engagements for Tuesday 27 October.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Townend: Is my right hon. Friend aware that many of my constituents are furious at the persistent attacks on the Government and herself by Commonwealth Prime Ministers, many of whom are leaders of one-party states condemned by Amnesty International? Is it not time that they were told that in future the ruder they get the smaller will be their allocation from our very large overseas aid budget?
    The Prime Minister: I appreciate my hon. Friend's concern, but I think that he will agree, after a moment's reflection, that we must give aid according to where people need it most. That has been, and will continue to be, our policy.
    Mr. Faulds: As the Prime Minister's—[HON. MEMBERS: "Reading".] Some of us choose our words carefully.
    As the Prime Minister's separation from reality increases and the corruption of power mars her judgment ever more, will she contemplate today that in the last three general elections she was returned on a minority of the votes of the British electorate? Will she understand that that basis does not justify her policies of destroying the welfare state, wrecking British industry and slavishly backing every misjudgment in international affairs that the American President makes?
    The Prime Minister: Nor does the Labour party's performance during the last election or since lead me to listen to it, from any front.
    Mr. Gerald Bowdenasked the Prime Minister if she will list her official engagements for Tuesday 27 October.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Bowden: Will my right hon. Friend spare some time today to reflect upon the success of the Government's right-to-buy policies, whereby some 1 million families, formerly tenants, now enjoy the security and independence of home ownership? Will she join me in deploring the delay and delaying tactics of some councils in dealing with right-to-buy applications? I have constituents who have waited. for 18 months to two years before their applications have been dealt with, and I believe that Southwark council has some 2,000 applications before it at the moment.
    The Prime Minister: I join my hon. Friend in deploring any delays in allowing tenants to take up their right to buy. My hon. Friend will know that in extreme cases the Department of the Environment can take over from the local authority the entire right-to-buy responsibility for council houses. Therefore, perhaps he would have a word with our right hon. Friend the Secretary of State for the Environment.

Financial Situation
3.32 pm
Mr. John Smith(by private notice) asked the Chancellor of the Exchequer if he will make a statement on the implications of the financial situation for economic policies and the consequences for the sale of BP shares.
The Chancellor of the Exchequer (Mr. Nigel Lawson): I am glad to have the right hon. and learned Gentleman opposite me once again, as he was some years ago when I was Secretary of State for Energy.
Mr. Tony Banks: There is not much left now.
Mr. Lawson: You wait and see.
The sharp falls in share prices throughout the world over the past fortnight will tighten monetary conditions somewhat and are likely to have a dampening effect on world demand. It is far too soon to put any figures to this, but I have already responded by reducing interest rates by half a per cent. Interest rates have also come down in the United States.
I will, of course, continue to watch the situation closely, and take whatever steps are required. I am also in regular contact by telephone with my opposite numbers in the other major industrial countries.
Meanwhile, the robust economic health and sound public finances that we have in this country put us in the strongest possible position to weather this storm, just as we successfully coped with the year-long coal strike and the collapse in the world oil price.
As for the implications of the stock market slide for the BP sale, there is provision under clause 8 of the BP fixed price underwriting agreement for the underwriters to seek consultation with the Treasury if a majority of them form the opinion that there has been an adverse change of circumstances, as specified by the agreement, in the light of which they believe that they are no longer assuming a proper underwriting risk. I have been informed by N. M. Rothschild and Sons, on behalf of the United Kingdom underwriters, that a majority of them now take that view. They therefore sent a written representation to the Treasury yesterday afternoon seeking consultation with a view to terminating the offer for sale. I have to say that I was surprised by this. [Laughter.] I am now considering the points that they have made, as I am contractually bound to do.
The underwriting agreement sets out a series of steps, which must be followed if the consultation process is triggered. The Treasury considers the representations and consults BP. Rothschild's also seeks BP's views. Rothschild's and the Treasury then consult together. If they are unable to agree, they jointly approach the Bank of England for its assessment. I shall take full account of that assessment before I take a final decision.
I understand that a copy of the agreement has today been deposited in the Library.
It is my intention to proceed as quickly as possible, consistent with the proper observation of the procedures. The House will understand that, now that the underwriters have invoked this consultation process, I cannot say more until the process is concluded, but I will gladly listen to the views of right hon. and hon. Members.
Mr. Smith: Is the Chancellor not ashamed that he had to be dragged reluctantly to the House to answer a private notice question, when he should have volunteered a statement on his own initiative days ago? Does he not think that he should apologise to the House for treating it as being a good deal less important to him than the stock exchange?
Is it not clear that the fundamental reason for the collapse in international markets has been the irresponsibility of Governments, including the British Government, in facing up to the twin problems of the United States' deficit and the Japanese and German surpluses? Instead of taking action to reduce gradually the United States' trade deficit and simultaneously expand the other economies, Governments — who are staffed by people such as the Chancellor of the Exchequer, who are addicted to free market theories—have abandoned their responsibilities to markets that the Chancellor describes as having absurd activities and which, according to the Prime Minister, are involved in 5 per cent. trade and 95 per cent. speculation?
Does the Chancellor understand that the free-market chickens have come home to roost? The markets are desperately seeking responsibility from the Governments that have abandoned them. Is it not now urgent for Her Majesty's Government to co-operate in setting up a new economic summit of the G7 countries with an agenda to concert a plan to tackle the deficit-surplus problem in a way that will avoid recession, reopen opportunities for growth and engage in a fresh and constructive examination of the debt problems of the developing world?
Will the Government accept that, as a result of the events of the past few weeks, free market theories no longer work?
As to BP, will the Government explain why they must take so long to go through the procedures that the Chancellor has outlined? In what he said to the House, he has made it crystal clear that he intends to hold the underwriters to their obligations. Would it not be wiser, given that we are only hours from the closing of this offer, for a little more urgency to be shown in these consultations and for the Chancellor to be more prepared to give a definitive answer to the House today?
Whatever happens with the underwriters or about anything else, will the Chancellor confirm that the Government are obliged to purchase 450 million new shares at the price of 330p and that the difference between the price at which they committed themselves to buy new shares and the present value in the markets is over £300 million?
Will the Chancellor also confirm that whatever happens, £20 million will have been wasted on an extravagant advertising hype? Is it not extraordinary that this colossal waste of money occurs at the same time as the Government are cutting child benefit, apparently on the ground that decent levels of such benefit cannot be afforded in this country?
Is it not clear that, whatever happens to the underwriters, the decision to sell the whole of the Government's stake in BP has been profoundly foolish? The company will suffer, the Government have wasted money and the shares will not be purchased. Repeatedly the Chancellor has claimed that his sole purpose in the BP share sale is wider share ownership. Since the shares will not have been sold to willing purchasers, what will be left of his purpose?
Mr. Lawson: I shall try to deal with the questions in the order in which the right hon. and learned Gentleman asked them. I start with something on which I can agree with him. I agree that the size of the American budget deficit, which is way ahead of its own capacity to finance it, is a major problem in the world economy today. I think, however, that it is a bit of an impertinence for him to blame me or the British Government for that. I vividly recall the time, some three years ago, when I was saying just that and I was being attacked by him and other right hon. and hon. Members who said that we should follow the policies of expanding the budget deficit in this country.
The right hon. and learned Gentleman referred to international co-operation between the members of G7. I agree with him too that that is important. That is in better shape than it has been at any time in the period that I have been Chancellor of the Exchequer, and it has been very successful in the context of stabilising exchange rates, among other things. But I have to say that the sort of workmanlike co-operation that we do have and which I hope can be built upon and improved, is rather more serious than empty waffle about a non-existent plan and some summit.
The right hon. and learned Gentleman then went on to the question of taking so long on the BP front. He obviously failed to listen to what I said. I said that it was not until yesterday afternoon that the BP underwriters made their approach to the Treasury —4.20 yesterday afternoon, to be precise. I have now informed the House and I shall go through the procedures as quickly as can he done, while properly going through those procedures. I would hope to be able to reach a conclusion by Thursday.
The right hon. and learned Gentleman then asked me whether it was true that the Government were obliged to purchase a large number of BP shares at 330p a share. I can tell him, of course, that it is not true. He then said that this episode demonstrated that it was wrong to sell BP shares. But of course, he will recall that the first sale of BP shares was conducted by the Government in which he performed in 1977.
As to the question of wider share ownership, which the right hon. and learned Gentleman seems to be against, I have to tell him that he is in conflict with the views of the hon. Member for Dagenham (Mr. Gould) who is the rising star of the Labour party—or at least he used to be the rising star of the Labour party—when he said:
"Instead of opposing wider share ownership, for example, we should set about making it a reality … The idea of owning shares is catching on and as socialists we should support it."
The right hon. and learned Gentleman asks was not wider share ownership the sole purpose of the BP share offer? Obviously, the answer is no, because if that had been the sole purpose we would not have had the issue underwritten in the first place.
Mr. Terence Higgins: Does my right hon. Friend agree that it is important that the Treasury and Civil Service Select Committee, which has previously taken evidence on the underwriting of privatisation issues and on wider international matters, should be set up this week so that it has an opportunity of reporting to the House on these important issues?
I welcome the reduction in interest rates. Does my right hon. Friend agree that this must be combined with fiscal balance and that, therefore, it is important that the United States fiscal deficit should be reduced? I congratulate my
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right hon. Friend on the representations he has already made to the United States Government, but I urge him to redouble them. Does my right hon. Friend agree that many people think that it would he dangerous to put underwriters in a position when they can say, "Heads we win, tails you lose"?
Mr. Lawson: On the question of the BP underwriters, of course I have noted carefully what my right hon. Friend has said. On the question of the Select Committee, I am sure that my right hon. Friend the Leader of the House has heard my right hon. Friend's comments. I personally have always welcomed the constructive discussions that I have had during my period as Chancellor with the Select Committee, which my right hon. Friend heads with such distinction. The sooner it can be reconstituted the better.
As for the wider economic issues, as I said in my opening remarks, I think that it is very important that we continue to keep up the pressure on the United States. The President has made statements showing a lesser degreee of unwillingness to raise taxes than has ever been the case before. I was speaking to Secretary Baker on the telephone this morning.
Mr. A. J. Beith: Does not the Chancellor think that it is rather perverse for it to be suggested that he could either have caused in some way or prevented the recent upheavals, since they derive mainly from the decision of the President, whom the right hon. Gentleman and Prime Minister so much admire, to cut taxes and increase defence expenditure at the same time? Is it not time to tell the United States that the party is over and that we have to put the main industrial countries together to decide what to do to pay for it?
With regard to the BP share issue, what will the, Chancellor do about all those inexperienced small investors who were beguiled by the expensive publicity? What good will it do to the cause of wider share ownership to deliver those people a kick in the teeth?
Mr. Lawson: On the first half of the hon. Gentleman's question, I welcome, just as I did when it came from the right hon. and learned Member for Monklands, East (Mr. Smith), this late conversion to the cause of sound finance, which is something that the Government have been preaching for a very long time, when the only policies advocated by the Opposition were ever bigger budget deficits. I remember the speech I made to the IMF annual meeting in September 1984 when I said that if the United States' budget deficit was not vigorously tackled it would all end in tears. We inherited a huge budget deficit from the Labour party. Even though we were in favour of lower taxes, we initially put up taxes to deal with the deficit first before we could get on with the tax-reducing programme.
As for the question of the small shareholders who may have applied for BP shares, as the hon. Gentleman will understand, like the Treasury, applicants for shares are bound by the terms and conditions of the offer.
Sir William Clark: Will my right hon. Friend resist the blandishments of the right hon. and learned Member for Monklands, East (Mr. Smith) in favour of abandoning the free market? Does my right hon. Friend agree that the reason why our present economy is so strong compared with, say, the 1979 economy is that we have allowed the free market to operate within the Treasury's control? It would be folly if we were to change

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course now. Does my right hon. Friend agree that, to get international confidence back into the various money markets throughout the world, the most urgent need is for the American President to make up his mind as quickly as possible to increase American taxes and to reduce public expenditure?
Mr. Lawson: I think there is probably general agreement in the House with what my hon. Friend has said. Of course, to be fair, it is not only on the side of the Americans that action is called for. I believe that in current circumstances there is a danger that monetary policy in the Federal Republic of Germany is really rather too tight, and I hope that some action will be directed on that front as well.
Mr. Peter Shore: No one can accuse the Chancellor of hyperbole when he says that the events of the past fortnight will have a dampening effect on world demand. The real effects are far more likely to be a serious curtailment of investment, a curtailment of consumer spending and a resulting increase in unemployment. Therefore, will the Chancellor assure the House that he is ready to take counter-recession measures — a package of them, both national and international—to meet the scale of events?
Mr. Lawson: I can assure the right hon. Gentleman that, as I said in my opening remarks, I shall take whatever actions I believe to be necessary in the circumstances. It is too soon to say what actions will be necessary, although I have already reduced interest rates. That goes, I think, for all other members of the Group of Seven. The right hon. Gentleman will know, for example, that the President and Congressional leaders have been in active discussions on the subject of getting down the American deficit.
There is no need for the alarmist consequences that the right hon. Gentleman fears if, as I believe will be the case, economic policies in the major nations are conducted in a sensible way.
Sir Peter Hordern: Will my right hon. Friend accept that, if the BP share issue is withdrawn, it will be widely felt that the underwriters cannot meet their commitments? If that is the case, the damage caused will be much greater than will result if the issue proceeds.
Mr. Lawson: My hon. Friend is very knowledgeable in these matters, and I have carefully noted what he has said.
Mr. Robert Sheldon: Will the Chancellor dismiss the impertinence shown by the underwriters in coming to him to seek to forgo their liabilities and responsibilities? Is he aware that the Public Accounts Committee has condemned the very large fees paid to the underwriters and that, on each occasion, we have been informed that this was necessary because of the large risks involved? If we are to remove the risks and give the underwriters a copper-bottomed, gold-plated guarantee, what is the purpose of underwriting at this level?
Mr. Lawson: As Chairman of the Public Accounts Committee, the right hon. Gentleman occupies a very important position in this House, and I have very carefully noted the point that he has made.
Mr. Anthony Nelson: Before my right hon. Friend reaches any final decision on this matter, will he
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bear in mind that he has a responsibility that overrides that of acting as a guardian of underwriting institutions in the City, or even of share applicants? I refer to his responsibility as a trustee of the public purse. Will he bear in mind the fact that the interests of the taxpayer, who will forgo a substantial sum by way of proceeds if the sale is called off should weigh heavily on his mind. After all, does my right hon. Friend really believe that if the market had risen dramatically, rather than slumped, the City institutions would for one minute have considered calling the underwriting arrangements off?
Mr. Lawson: My hon. Friend's point deals with a number of the matters that I have to bear in mind.
Mr. Brian Sedgemore: Why has the Chancellor spent a week telling television viewers that it is possible to wipe 25 per cent. or more off the value of stocks and shares all round the world without serious consequences for liquidity, borrowing, trade, output and employment? In the face of impending recession, what does the Chancellor intend to do—other than to lecture foreign Governments?
Mr. Lawson: There is no need to share the apocalyptic visions of the hon. Gentleman provided that the Governments of the major countries pursue the appropriate economic policies. What turned the 1929 crash, which I think is in many people's minds, into the slump of the 1930s was not the crash itself but the wholly inappropriate economic and monetary policies that followed it.
Mr. Quentin Davies: Does my right hon. Friend agree that the present situation is a splendid vindication of the Government's judgment in underwriting this and other privatisation issues and that the Government deserve the wholehearted appreciation both of the House and of the general public in the exercise of that judgment? Does he agree that the main problem with the underwriters is that the foreign underwriters have not underwritten their commitment to BP with investing institutions, and that if they have to sell shares to meet that commitment they will not mainly be British shares that they have to sell?
Mr. Lawson: My hon. Friend—and I am grateful to him for his earlier remarks—is, of course, right to point to a fundamental difference between the underwriting system in this country and the underwriting system on the other side of the Atlantic. In this country it is a feature of our system that we go in for —the underwriters go in for — sub-underwriting on a very substantial scale and therefore the risk is spread very, very widely. In the United States and Canada that practice is not adopted and of course the risk falls entirely with the underwriters.
Mr. Tony Benn: Has the Chancellor read the speech made in the House in 1914 by Winston Churchill when he acquired a majority holding in the Anglo-Persian Oil Company for £2 million? Does the Chancellor agree that that investment, albeit by the First Lord of the Admiralty in a Liberal Government, was the wisest public investment ever made?
Does the Chancellor agree that the proper course now would be to cancel the privatisation of BP and retain the assets in the public domain?
Mr. Lawson: I have to confess to the right hon. Gentleman that I have not read that speech very recently,

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but I do recall a more recent event—that it was when the right hon. Gentleman was Secretary of State for Energy that the first sale of BP shares was made, at a price of well under 100p per share.
Sir Michael Shaw: Is it not important that the overreactions of the stock exchange should not confuse the public and lead them to believe that the state of British industry and commerce is less strong than it is? At the same time, would it not be very bad for the long-term future of this country if emergency measures were sought to be taken at this time? Does my right hon. Friend agree that we should carry on with the rules as they are and that the undertakers should not be relieved of their responsibilities.
Hon. Members: "Underwriters."
Mr. Lawson: As far as the undertakers, if I heard my hon. Friends right, are concerned, I have noted carefully what he has said. So far as his earlier points are concerned, yes, I think that if the House looks, for example, at the latest CBI trends survey, it will see an extremely strong and confident performance by British industry and I know that the leaders of British industry do feel that there is absolutely no cause for changing that confidence in the light of recent events on the stock market.
Mr. D. N. Campbell-Savours: As the flotation was underwritten by four major American institutions, when the Chancellor weighs these matters in the next few days will one of his considerations be the fact that they may be called upon again, to underwrite the flotations with regard to water and electricity?
Mr. Lawson: As I have said to other hon. Members, I shall certainly take very much into account the view expressed by the hon. Member.
Mr. Tim Boswell: Will my right hon. Friend confirm that the offer for sale in formal terms remains open, with all its full legal impact? Will he take steps to ensure that when the privatisation programme is resumed, measures are taken to ensure that the undertakers—the light off [Laughter] — underwriters — cannot again appeal against the last ball of the over?
Mr. Lawson: I have noted the suggestion which my hon. Friend has made.
Mr. David Blunkett: Does the Chancellor accept that in our democracy accountability for the economy and what happens to public assets rests with him, as accountable to this House, and that the so-called capital-owning, share-owning democracy is neither democratic nor effective? As a consequence, does he agree that he should give an assurance to the House that further sales of major public assets will cease and accept that the most widespread form of share ownership is social ownership?
Mr. Lawson: I entirely accept the fact that I do have a heavy responsibility in this job, but I do not accept anything else that the hon. Member said, particularly his belief that share ownership is something which is to be condemned. I welcome the growth of share ownership; it will continue. The privatisation programme will continue and I am delighted that we now have a convert to the cause of share ownership in the person, the important person, of the hon. Member for Dagenham (Mr. Gould).
Mr. John Redwood: Does the Chancellor agree that there are times when concerted foreign exchange intervention can be dangerous before the underlying problem of the deficit has been resolved? Is not that danger especially clear if the German and Japanese authorities put up their interest rates to deal with the monetary consequences of that intervention?
Mr. Lawson: I see no need for German or Japanese interest rates to rise in present circumstances, although that is obviously primarily a matter for those countries. As for intervention in the foreign exchange markets, what my hon. Friend has to recall is that we did not intervene in order to stabilise markets until we had first intervened in a massive way following the Plaza agreement to drive the dollar down, and we only intervened to stabilise it after the deutschmark and the yen had risen by as much as 50 per cent. against the dollar in order to give that massive change in exchange rates time to work through.
Mr. Harry Ewing: I represent a constituency where BP is the largest employer, employing more than 2,000 people. Does the Chancellor understand that it is distressing that throughout this fiasco no reference has been made to those who have spent their lives working for BP? Is he aware that I do not hold any strong feelings about what might happen to the directors of BP, and that I care even less about what might happen to the. underwriters? However, I care deeply about what will happen to the workers. Will he give an assurance that, whatever decision he reaches, the working people will not be made to pay for the fiasco for which he is now responsible?
Mr. Lawson: I am glad to be able to reassure the hon. Gentleman that there is no danger whatsoever either to BP or those who work for that company, which is indeed one of the finest companies in the world.
Mr. Patrick McNair-Wilson: May I congratulate my right hon. Friend both on his sensible answer and, more importantly, on the calmness that he has demonstrated during this most difficult time? Is it not in such stark contrast to the hysterical posturings of the Opposition, who have no credible economic policy?
Reference has been made to the problems in the United States, and there is no doubt about them. However, as there has not yet been any real problem with exchange rates, will my right hon. Friend be most careful to resist any pressures for managed, even fixed, rates, such as were suggested during the Louvre agreement before the crash took place?
Mr. Lawson: My hon. Friend, and I am grateful to him for the remarks he made in the early part of his intervention, is mistaken if he thinks that the Louvre agreement is an agreement to try to create fixed rates á la Bretton Woods. It is nothing of the sort and, indeed, I devoted a considerable part of my speech to the annual meeting of the IMF and World Bank in September of this year to explaining the system of what I called managed floating, which we have arrived at and which I think is beneficial, not least to industry, which finds the wild gyrations in the dollar in recent years extremely disruptive and, indeed, which has had an adverse effect on world trade.
Mr. Eric S. Heffer: As the casino economy, otherwise named by the Prime Minister as

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people's capitalism, is now coming apart at the seams, is it not clear that the time has come for a proper recognition by the people of this country, especially those in this House, that the capitalist system is falling apart? Is it not time that the Government learnt that lesson and stopped their nonsense with privatisation, which is hurting a great many ordinary working people who have been kidded by the Government?
Mr. Lawson: The hon. Gentleman is really one of the dinosaurs of this House, and as such I have a great affection for him. The workers of this country know a great deal better what is good for them than he does and they have shown this in their response to privatisation issues, in their response to worker share schemes and in their response, indeed, at the last general election.
Sir Peter Emery: To help stabilise the position, will my right hon. Friend point out to the public, the Opposition and the press that in today's stock market list in The Times hardly one share is not well above the low mark of this year? The concept that there is panic in overall share ownership should be hit hard. The Opposition do nothing to stabilise the position — indeed, they are creating the panic.
Mr. Lawson: I think there is much in what my hon. Friend says, although I do not credit the Opposition with such influence that they were able to start the Wall street slide which began the movement in share prices throughout the world. Nevertheless, if they could have done they would have done.
Mr. Peter Hardy: The right hon. Gentleman suggested that he had been made aware of the view of the majority of the United Kingdom underwriters. Would he care to tell the House whether he has received any communication from the American underwriters, American business or the American Administration? Was the matter a subject of his conversation this morning with Mr. Baker?
Mr. Lawson: I, of course, never reveal private conversations, as I am sure the hon. Gentleman never reveals private conversations, but the provisions in clause 8 of the underwriting agreement concern the fixed price underwriting agreement and they concern the United Kingdom underwriters. There may, of course, have been conversations between the United Kingdom underwriters and the overseas underwriters, but that would not be directly known to me.
Mr. Ian Gow: Will my right hon. Friend pay a more generous tribute to the right hon. Member for Chesterfield (Mr. Benn)? Was it not he who, under the benign influence of Dr. Johannes Witteveen, came before this House 10 years ago and commended the sale of BP shares? Faced with that precedent, will my right hon. Friend pay a glowing tribute to the right hon. Member for Chesterfield?
Mr. Lawson: I do not think that I could possibly improve on the tribute that my hon. Friend has already paid.
Several Hon. Members rose—
Mr. Speaker: Order. We have another important statement this afternoon. I shall take two more questions
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from either side and then we must move on. However, I say to those hon. Members who will not be called today that there will be another opportunity at Trade and Industry questions tomorrow and also at Treasury questions on Thursday, when I will bear their legitimate interests in mind.
Dr. Jeremy Bray: The Chancellor gave the impression at the IMF that there were intervention bands for the dollar in the Louvre accord, but it now appears that that is not the case. Is it his intention that the pound should not stay with the deutschmark but come somewhere between it and the dollar?
Mr. Lawson: So far as my speech at the IMF is concerned it was an accurate description of the Louvre agreement and anything that the hon. Gentleman may have subsequently read in any newspapers which may conflict with that is therefore incorrect. So far as sterling is concerned, I believe that the maintenance of stability of the sterling exchange rate is in the interests both of British economic policy, including anti-inflationary policy, and the interests of British industry.
Mr. Robert G. Hughes: In rejecting the Opposition's advice, will my right hon. Friend agree that the nation and the international financial community will conclude that the economy of this country is in far better hands with a Chancellor who sticks to his policies and strategy, rather than with one who follows the Opposition's advice? In the 1960s and 1970s Labour Chancellor after Labour Chancellor gave the impression of running around like a wet hen but did nothing to help the economy.
Mr. Lawson: My hon. Friend is correct.
Mr. Pat Wall: Last week, did the Chancellor read an edition of The Wall Street Journal, which pointed out that the eight occasions since the end of the second world war when shares fell sharply—this is the sharpest fall of all—were followed eight to nine months later by a recession or a severe slowing down of the world economy? That led to increases in poverty, unemployment and economic misery. Will he explain to the people of my constituency what is popular about a people's capitalism which offers them shares at 64p below the market price?
Mr. Lawson: It is indeed fortunate that this Government are in office in this country, as they are the one Government who can steer the country's economy successfully through the stormier period which we may be in. As for share price falls, as my right hon. Friend the Prime Minister pointed out, although there has been a sharp fall in share prices, they are now roughly where they stood at the beginning of this year. That is in sharp contrast to what happened in 1974, when the Labour party came to power, and shares fell during the course of that year by some 50 per cent.
Mr. Keith Mans: Will my right hon. Friend the Chancellor explain the position of the small shareholder who has applied for BP shares but does not pay the second instalment?
Mr. Lawson: The rules are very clear in the terms of the offer document. If the second subscription is not paid up the shares are forfeited.

Social Security Benefits
4.12 pm
The Secretary of State for Social Services (Mr. John Moore): With permission, I wish to make a statement about the next uprating of social security benefits and the introduction of a reformed system of income-related benefits. This will take place for most benefits in the week beginning 11 April 1988, the first full week in the tax year, and the same provisions will apply in Great Britain and Northern Ireland.
The retail price index published on 9 October showed an increase in prices over the 12 months to September 1987 of 4·2 per cent. Retirement pension for a married couple will accordingly rise from £63·25 a week to £65·90, and for a single person from £39·50 to £41.15. These increases of £2·65 and £1·65 a week respectively mean that the cash amount of basic retirement pension has risen by almost £35 a week for a couple since this Government came to office. The increase will add about £780 million to the social security budget next year. It must be seen in the context of significant improvements in pensioners' total incomes. Total state pension provision represents, on average, about half of pensioners' net incomes, and those net incomes have risen by 18 per cent. in real terms since 1979. The uprating increases will ensure that the value of this provision is maintained. They are fully in line with our pledges to pensioners and recipients of other linked long-term benefits.
I have decided to uprate all contributory benefits, benefits for the disabled, war pensions and similar benefits by 4·2 per cent. also. Public service pensions will likewise increase by 4·2 per cent. as will statutory sick pay and statutory maternity pay paid by employers. Because of the payment arrangements for SSP and SMP, the changes will take effect from the start of the tax year.
In April 1988, we shall be introducing our new system of income-related benefits. Supplementary benefit will be replaced by the simpler income support; housing benefit by a reshaped system aligned with income support; and family income supplement by the new family credit, which will provide help to more than twice as many low-paid working families. This new, more coherent and better-targeted structure will direct help more clearly where it is most needed and will foster incentives to work.
I shall shortly be laying before the House regulations for the new benefits. Since these are new schemes, the regulations will include the relevant rates. I shall also be laying revised regulations on claims and payments which will provide common basic provisions between benefits. Earlier this month, I consulted the local authority associations, as I am required to do under the Social Security Act 1986, on the proposed rates for housing benefit. Because of the close alignment of the benefit rates for all three income-related benefits, final decisions cannot be reached until I have considered their responses.
The income support rates proposed are £33·40 for single people aged 25 and over, and £51·45 for couples. These would also apply as the applicable amounts for housing benefit purposes and as the threshold in family credit. The family premium would be £6·15, the premium for a single pensioner £10·65, and for couples £16·25.
The personal allowances include the average amounts which we expect householders who are income support claimants will have to pay next April as their minimum
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contribution to domestic rates. These amounts are £1·30 for couples, lone parents and single claimants aged 25 and over, and £1 for other single claimants over 18.
Compared with the illustrative figures published at the time Parliament approved the reformed benefit schemes, the premium payments would be some 6·5 to 7 per cent. higher—essentially the movement in the relevant price index. The personal allowances, leaving aside the element for domestic rates, would be some 4·5 to 5 per cent. higher; including that element they would be 7 to 9 per cent. higher. So, overall, income support claimants would be receiving higher real levels of benefit than under the previous figures. The number of gainers from the structural reform would rise by a million — from 2·2 million to 3·2 million. [Interruption.] Hon. Members outside the House who are benefit recipients will be as interested as those hon. Members who have the patience to listen to this statement.
The number who gain or are unaffected would go up to 4·9 million, while the number who lose would drop to 3·7 million. In reality, of course, existing supplementary beneficiaries moving to income support would not lose any of their benefit at the point of change. We are spending £200 million to make sure of that.
We are proposing to introduce the capital limits and the family credit and rate rebate tapers at the same level as those illustrated in the 1985 White Paper. Under the new schemes, housing benefit claimants at all income levels will be fully reimbursed for any increases in their rent. In view of this, I now propose that the rent taper should be 65 per cent. calculated on the basis of net income. This is equivalent to 42 per cent. in the present system, based on gross income for someone paying standard rate tax and national insurance.
For the convenience of the House, I am today publishing tables which show the likely distributional effects of the new schemes. Copies are available in the Vote Office. I am particularly pleased to note that the figures show for sick and disabled people getting the disability premium an increase under the new scheme of nearly £5 a week in disposable income. This is in addition to substantial increases in estimated expenditure on the disability benefits themselves.
Complementing the new structure of income-related benefits, the social fund will be fully introduced next April. Its gross budget for community care grants and budgeting and crisis loans for the first year will be just over £200 million, of which some 70 per cent. will be in the form of loans recoverable over a period. Separate announcements will be made concerning social fund provisions in Northern Ireland.
I turn now to child benefit, which currently costs over £4 billion, nearly 10 per cent. of the whole social security budget. Every 10p increase has a net additional cost of over £40 million. Yet higher child benefit would he of greatest help to people who are already relatively well off, whose living standards are already rising. By contrast, it would give no extra help to over 3 million children in families on benefit, including low income working families: they gain the same from the uprating whatever is done to child benefit. Against this background, and the particular need to target help on those who most need it and to control the overall growth in social security expenditure, I have concluded that an increase in child benefit would not be the best use of resources at present. Therefore, I do not propose to increase the rate next April.

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One-parent benefit will, however, increase to £4·90, and the maternity payment from the social fund will be increased to £85.
Let me emphasise to the House that, even with no change in the rate of child benefit, we will be increasing, not reducing, the overall level of resources devoted to families with children. We shall be spending £220 million extra on the new family credit and £100 million extra on families on income support. By contrast, a full uprating of child benefit would have cost £120 million. Moreover, family credit will go directly to help low income working families with children and will reach twice as many people as the present family income supplement. Thus, more will be spent on families overall, but the greatest emphasis will be on those with the greatest needs.
The details of what this announcement will mean for individual benefits and the proposed housing benefit rates as issued for consultation are set out in a full schedule of rates which, as previously, is now available in the Vote Office and, with permission, will be published in the Official Report. The schedule also covers our proposals for board and lodging limits for the coming year.
Overall, the uprating increases will add some £1·3 billion to a social security budget which already stands at over £44 billion this year. This is a substantial increase in spending on a programme that is already the biggest in Government. We believe that our proposals strike a fair balance between protecting the interests of the poorest and of those, such as pensioners, who have substantial reliance on state benefits; and protecting the interests of those whose taxes and contributions pay for benefits.
Mr. Robin Cook: May I be the first to congratulate the Secretary of State on achieving a new record, even by the standards of his Government? Is he aware that the statement that he has made today will result in a cut in benefit for more claimants than any uprating statement by any of his predecessors during the past eight years? That may be the path to promotion in the modern Conservative party, but it is rough justice for the poorest families in Britain who must live on the benefits that he has just announced.
Is not the net effect of the figures that he has quoted for income support that almost 4 million claimants on supplementary benefit will not get a penny extra in increased benefit next April? Is he not concerned that those who will be the worst affected will be those disabled claimants who do not qualify for disability premium and who could lose entitlement of up to £50 a week? Does he appreciate that at current levels of inflation such claimants will wait 12 years under the new scheme before their next annual increase? How does he square that with his predecessor's claim that the new scheme would direct more help, more effectively, to those who need it most?
On housing benefit, will the Secretary of State confirm the estimate contained in the circular from his Department that one million claimants will lose all their entitlement to housing benefit — or, as the same thought was more delicately expressed in the circular:
"There will be a reduction in caseload of a million"?
Is the Secretary of State aware that the cut that he has just announced in the rent taper is the fourth cut that has been made by his Government since they invented housing benefit only four years ago? Does he not appreciate that,
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every time that he sharpens the rent taper, he sharpens the poverty trap also, and that a family of four who receive family credit and housing benefit could lose 98p in benefit for every extra pound of earnings? That is a higher rate of marginal taxation than is paid by any Cabinet Minister. How does the right hon. Gentleman square that with his own speech last month on the importance of reducing dependency on benefits?
Does the Secretary of State recognise that the exclusion of a fifth of rates from housing benefit will mean that a couple of million pensioners will now receive a rates demand for the first time in years? The Secretary of State assured the House that the figures that he announced for income support contained an extra £1·30 in compensation for such demands. The right hon. Gentleman misled the House. If the figures for income support that were published in the White Paper in 1985 are fully uprated in line with prices, it is plain that the allowance that he has announced today does not include £1·30 a week for rates demands, but a beggarly 30p a week. How does he square that with his party's pre-election pledge to protect claimants from the new liability in rates next year, and the poll tax in two years, to which his Government have exposed them?
Once again, the Secretary of State announced that pensions are to increase by no more than prices. Is he aware that, during the past year, earnings have increased twice as fast as prices? Will he confirm that, if the Government had preserved the link between pensions and earnings, the pension next April for a couple would be worth £14·60 more per week than he has just announced? If, as the Prime Minister keeps claiming, Britain has the fastest-growing economy in Europe, why has she given us the lowest pensions in Europe?
Finally, I turn to the biggest cut of all—the freezing of child benefit, which will affect 7 million mothers. At the last election, the Conservative party's manifesto stated:
"Child benefit will continue to be paid as now".
We were obviously intended to take that strictly literally. How can Conservative Members pose as the party of the family, when their Government have cut support for school meals, school transport and school clothes, and are now cutting the value of child benefit for the second time in three years? Will the Secretary of State deny press reports that he has set up yet another review of the future of child benefit? How can he square such a review with assurances, given a month before the election, by the then Minister for Social Security:
"child benefit will continue as a non-means-tested universal payment, paid to the mother tax free. There ought to be no question about that"?
What has changed during the past six months to bring that into question, other than the fact that the election is safely out of the way?
Today's statement is a package of broken promises and breadline benefits. As a result, next April millions of claimants who already have to survive on incomes that Conservative Members could not even begin to imagine will face still worse hardship. We shall therefore oppose every regulation that is designed to impose the cuts that have been announced today.
Mr. Moore: May I start by reminding the House of the facts, as opposed to the hyperbole that we have just heard? As opposed to a cut, the decisions on the new rates do not involve an overall cut. Quite the contrary — total spending on income-related benefits is now estimated to

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be half a billion pounds higher than in the last published plans. I should repeat that total income-related benefits will be half a billion pounds higher. That is my answer to the first point made by the hon. Member for Livingston (Mr. Cook).
On pensions, Opposition Members do not seem to understand the difference between their election promises and the reality of what occurred to the real income of pensioners under the previous Labour Government and what has occurred since we took office. That is one of the reasons why the Labour party has failed three times in three general elections. The reality is that, whatever that Labour Government sought to do — I recognise that they sought to give during their last period in office by uprating the pension by whichever was the better of earnings or prices—Opposition Members do not seem to understand what that produced as a consequence of their appalling failure to manage the economy or to understand that pensioners have an income beyond that which is given to them by the state.
We are concerned with the real well-being of pensioners and not simply, as are Opposition Members, with electoral promises. In terms of real well-being, the pensioner saw a real improvement between 1974 and 1979, a real increase —[Interruption.] I accept that the facts hurt Opposition Members—of only 3 per cent. That 3 per cent. over five years was an average of 0·6 per cent. per year, which was appalling for pensioners. During the past six years, the figure has increased by 2·7 per cent. a year.
Despite the uprating in earnings during most of the period between 1974 and 1979, I acknowledge that pensioners' average net total income fell slightly as a proportion of the incomes of people in work.
Mr. Graham Allen: Did the Secretary of State not like the question?
Mr. Moore: I am delighted with the question. Although during the Labour Government the position of pensioners' income relative to that of workers worsened, during the past six years it has increased to 60 per cent. The Opposition seem to forget that more than 70 per cent. of pensioners and 83 per cent. of those who have retired have other savings. Those savings were stolen during Labour's period of office. Their income from savings decreased by 3·4 per cent. a year, so the Government need no lectures about concern for the real well-being of pensioners, in contrast to simple Socialist pretence.
The hon. Gentleman asked me about the net effect. I thought that I had suggested an improvement on the technical annex illustrations in 1985, so that 4·9 million people in the overall reform package will either gain or not suffer losses. For another 3·7 million people, there will be transitional protection so that they do not suffer cash losses.
The hon. Gentleman asked me specifically about the disabled. Again, the Opposition should look more carefully at the overall package. There will be a net increase to the disabled of nearly £60 million. The hon. Gentleman referred especially to the severely disabled, 4,500 of whom receive the domestic assistance additional requirement, which averages £6·35 a week and which represents a total expenditure of £1·5 million. Under the proposed reforms, about 7,000 people will receive the special disability premium of £24·75 a week. That is a significant increase for that important section of the
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community. However, as the hon. Gentleman rightly said, only about 250 people get more than £20 a week and very few get as much as £50 a week. I am conscious of that group. It is hard to arrange a reform structure to target that group, and my hon. Friend the Minister for Social Security and the Disabled is trying hard to find a way of targeting that tiny group. But, overall, the disabled will benefit from the reform structure.
The hon. Gentleman also asked me about housing benefit reforms. He was right to say—this has already been announced in the House — that the number of people who will receive housing benefit will decrease by 1 million, but hon. Members should remember that, during the Conservative Government, housing benefit expenditure has increased from £1·25 billion to more than £5 billion. We should see it in that context.
The hon. Gentleman was right to draw our attention to the change in the taper, because matters have changed since we published the illustrated technical annex to the White Paper. As the hon. Gentleman knows, we are moving to 100 per cent. protection against rent rises as opposed to the previous figure of 60 per cent. But that fact was known during the discussions on the technical annex Since then, there has been an increase in the number of beneficiaries to about 600,000 and an increase of 100,000 in the potential recipients of housing benefit under the arrangements for income support. There is also the important addition to income support rates of the 20 per cent. compensation, which clearly affects the housing benefit calculation. Just to put the hon. Gentleman's point in context, I should say that the net impact of the movement from 60 per cent. to 65 per cent. of net income will mean an additional loss to 100,000 people out of the 6 million people who receive housing benefit.
The hon. Gentleman also mentioned the 20 per cent. contribution. He knows that I would not try to mislead the House, and I hope that at some stage he will rephrase the words that he used. The commitment that was made before the election in relation to the 20 per cent. has been maintained. The hon. Gentleman might argue that overall income support is not as high as he would have wished, but the commitment made specifically in regard to the 20 per cent. uprating has been matched in full.
Sir Ian Gilmour: Can my right hon. Friend not see, especially in view of what the Chancellor told us this afternoon about the sound state of public finances, that his thoroughly insensitive treatment of child benefit is discrimination pure and simple against families with young children? Since, even before this afternoon, the real benefit of child benefit has fallen since 1979 and the real value of the married man's allowance and the single person's allowance has increased, how can my right hon. Friend justify such discrimination?
Mr. Moore: I have great respect for my right hon. Friend. I hope that he listened to what I said and that he is not trapped, as many hon. Members on both sides of the House sometimes are, in a set of historical views. I said with great care that I was seeking to increase help to families with children. Three million children in the poorest families in the land — families on income support, low-income families and families on family credit —would not receive a penny piece from an increase in child benefit. I should have thought that my right hon. Friend, with his long-standing legitimate interest in trying

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to assist the poorest, would have complimented me on securing increased assets of more than £300 million to spend on those people as opposed to the better off. I should have thought that he would have wanted me to target those people intelligently.
Mr. Jack Ashley: The Secretary of State said that some Opposition Members do not understand the figures. Does he accept that the severe disability premium is a fine concept in theory but is in fact, according to what the Government intend to do, a grossly inadequate, generalised substitute for the individual help now given to severely disabled people who are trying to live at home and stay out of institutions? Those people will be worse off in future. Why is the Secretary of State discouraging severely disabled people from living at home and instead propelling them into institutions?
Mr. Moore: I always listen carefully to the right hon. Gentleman. Indeed, I do more than listen. The Government have an outstanding record, as do other Governments, on the disabled. I hope that the right hon. Gentleman will remember what I said. The reform structure will increase help to the disabled —[Interruption.] Some of us in this House care about the disabled, as I know the right hon. Gentleman does. The reform structure will add £60 million of benefits to the disabled. The right hon. Gentleman rightly emphasised the small group of severely disabled people whom we would wish to help to stay in their homes. The severe disability premium will help many more people than the 4,500 who receive £6odd a week at present. We intend that more than 7,000 people will receive about £24·75 a week. I accept that a few people do not fit into the classic structure. Sir Roy Griffiths is advising us on how to help in this area, and I have asked my hon. Friend the Minister for Social Security and the Disabled to focus on those few hundred people because I recognise that they do not fit naturally into the system.
Dame Jill Knight: Does not my right hon. Friend find it rather odd that the Opposition should have declared a fight on the question of reform of a system whereby wealthy people immediately draw—untaxed and unneeded — weekly benefits on the very same day that they may well be putting down their sons or daughters for Eton or Benenden? Is there any sense to be found in a system that pours public money on to people who have no need of it and denies extra benefit to those who have?
Mr. Moore: My hon. Friend is of course right. I find the debate very difficult. There are those who simply cannot get out of the past and understand that, in this announcement, we are focusing £320 million on families with children — 3 million-plus children. I fully understand people's attitude towards child benefit, but we are talking about a child benefit system that is still spending £4·5 billion on top of the amount that I am talking about, so I find it a very unusual set of priorities for the Opposition to focus on the degree to which we are trying to target—[Interruption.] I apologise; from a sedentary position I have been reminded that I did not properly answer one of the questions on child benefit put by the hon. Member for Livingston. He asked whether
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there was a review in progress. I repeat that I have no specific proposals at present to change the nature of child benefit, but—I believe that this has been said from the Dispatch Box by almost every Minister of every Government since the benefit was introduced—in view of its cost and its ill-targeted nature, there is clearly a need to keep it constantly under review. I am beholden to do that.
Mr. Ronnie Fearn: If child benefit is to be frozen, is it not a fact that a great administrative cost will be involved? Is it also true that the Secretary of State now has a team working in the belief that child benefit will be abolished some time next year?
Mr. Moore: No. I have made the position on child benefit quite clear. I read clearly the precise words that I obviously intended to use. I am beholden under section 63 of the Social Security Act 1986 to look at the uprating of child benefit each year, but there is no statutory requirement. I have explained precisely why I believe that this year I have been able to target better on those families with children who are poorer. I have also clearly said that there is no review in progress.
Sir Brandon Rhys Williams: May we warmly welcome the move to family credit, which is a big improvement on the old, defective family income supplement?
With regard to what my right hon. Friend has said on child benefit, does he not agree that what he is doing is incompatible with the policies for which the Prime Minister has won widespread approval — namely, her support for the family as an institution and her desire to reduce the tax burden on families and to encourage the British people to work and save for their independence? For the large majority of families who draw child benefit and pay more in income tax than they draw in benefit, a cut in the real value of child benefit constitutes an increase in their relative tax burden, targeted particularly against the mothers.
For the more than 2 million families who draw more in child benefit than they pay in income tax, is not my right hon. Friend simply forcing them down into dependency on means-tested benefits? That is also incompatible with the Prime Minister's injunction to people to work and save. Therefore, will my right hon. Friend undertake that, for a future year, he will keep an open mind on a completely fresh approach to taxation and benefit for families, so as to release the millions to work and save for their independence without breaking the rules?
Mr. Moore: I start by thanking my hon. Friend for, so far, being one of the few who have noticed the importance and significance of the family credit. I imagine that family credit will be welcomed by all sides of the House. Although I respect his views, may I ask my hon. Friend to try to see what I have sought to achieve today — to secure additional resources of £320 million as opposed to the £120 million which a simple, indiscriminate uprating of child benefit would have secured. I believe that that suggests that I have done precisely what my hon. Friend would have wanted, to concentrate rare resources on the area of greatest need.
Mr. Frank Field: Does the Secretary of State accept that the House is aware that the increased support of £320 million going to families is accompanied

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by a real cost? By means-testing that support, he has increased the disincentive to work. Since, as we learned from a well-leaked speech just before the Tory conference, the aim of the Secretary of State is to increase the incentive to work, why has he done a U-turn so early in his career?
Secondly, can he help us to clarify whether there have been real cuts in the amount of money spent bringing in income support? Can he tell the House what would have been the cost of uprating the old system had it not been reformed by today's statement? How does that figure compare with the total sum being spent on the new system, minus 20 per cent. for rate support? Lastly, as he was very precise about the real value of pensions for old people, will he confirm that, in money terms, 4 million people will not be worse off as a result of this scheme, but that in real terms 4 million people face cuts?
Mr. Moore: I will try to cover the points raised by the hon. Gentleman, because he always brings a good mind to these issues.
On his last point, there are obvious shifts when there is a structural reform as between—
Mr. Ernie Ross: Cuts.
Mr. Moore: No—shifts. There are obvious shifts when there is a structural reform as between the benefits that go to different parts of the community. This was debated well before the election, and the electorate seemed to make a clear judgment on 11 June as to their view of the nature of the shifts.
With regard to the transitional system, 3·7 million people will be disadvantaged, whereas 4·9 million people will be advantaged or their position will stay unchanged. I am aware of the extent to which the hon. Member for Birkenhead wishes to consider the technical annex and I am sure that that study will produce more detailed debates at a later stage. With regard to that technical annex, the hon. Gentleman was trying to get me to give a precise figure on the relative moneys involved in the whole of income support as opposed to the offsetting 20 per cent. compensation for income support recipients against benefits.
The hon. Gentleman will be aware that the technical annex rates were illustrative. To demonstrate some of the difficulties involved in making the comparisons that the hon. Gentleman understandably wants, those illustrations covered 4·3 million people on income support. The revised illustration covers nearly half a million more people. Obviously, when we came to set the rate, we had to take account of the increase in claimant numbers, the rising costs and the continuing need to keep public spending under control. That is the perfectly proper judgment that I am seeking to express to the House today.
I believe that the hon. Member for Birkenhead (Mr. Field) wanted me to express the net product for income support recipients. For singles over 25, the net product will be 80p higher in real terms compared to the technical annex; for singles between the age of 18 and 24 the net product will be 50p higher in real terms; for couples the net product will be 30p higher in real terms; and for 16–17-year-olds the net product will be broadly unchanged.
With regard to income support — [Interruption.] Some hon. Members are seeking to ask more questions from a sedentary position, but I am seeking to answer the hon. Member for Birkenhead, who had the courtesy to
188
rise. With regard to the overall gross figures, I thought that I had made it clear at the beginning of my statement that there was half a billion net addition to public expenditure as a consequence of the changes.
As for the first question put by the hon. Member for Birkenhead, I do not regard this statement as in any way a U-turn. Quite the reverse: it is an attempt by some of us, in a confused and, I recognise, difficult structure, to ensure that we use rare resources to help those in genuine need.
Several Hon. Members rose—
Mr. Speaker: Order. I appeal to the House not to repeat questions that have been asked before and not to ask a great many questions, because all these matters will be subject to later debate, and I am anxious to get as many Members in as possible.
Mr. Robert McCrindle: Although I agree with my right hon. Friend that we must try to target benefits much more accurately, does he not agree that his announcement on child benefits runs the severe risk of increasing the poverty trap? If an unemployed man, receiving frozen child benefit and, in addition, some assistance through family support, were to take a job and lose that support, there would be a particular disincentive to seek a job in the first place.
Mr. Moore: I do not deny for one moment my hon. Friend's recognition of one of the means-testing problems, but equally, looking at the overall context of the introduction of the reform package, he will be aware that, as a consequence of having net income throughout, we are reducing that overall marginal disincentive. Thus we are looking at an overall package that has improved, not decreased, the incentive to work.
Rev. Martin Smyth: The Secretary of State said that pensioners felt that, when the Opposition were in government, they robbed them of the money. Does he recognise that, under the new package, some pensioners will say that they have lost because they have been thrifty and have saved? Does the right hon. Gentleman recognise further that, in adjusting finances, while we welcome an increase, there is something wrong with a system that makes anybody worse off in April 1988 than he is now?
Mr. Moore: Let me repeat that those people will not be worse off, but with regard to the housing benefit taper —[Interruption.] We are back to the debate from a sedentary position that we had earlier about the relativity of the position of those people as opposed to the cash protection. The hon. Gentleman asked a specific question. about, I assume, the capital disregard. It has been doubled. but there is a taper between the £3,000 and £6,000 so that it affects those who, I accept, have been thrifty and have assets, but they are thus slightly better able to contend with the problems they face than those who have no such assets.
Mr. Michael Latham: While it is obviously proper that state basic pensions should be uprated by the rate of inflation, could not we have done better than that this year, when the PSBR may fall to zero?
Mr. Moore: But I thought that I tried to draw the attention of my hon. Friend and the House to the fact that, as a consequence of sticking to our election manifesto promises, and of our ability to run the economy effectively, pensioners' real income, as opposed to that

189
part of it that they receive from the state, has improved beyond anything comparable when the Labour party was in office. That is the reality of what we have been able to achieve because of our policies. Therefore, I am not sure why we should seek to hurt pensioners by changing those policies.
Mr. Andrew F. Bennett: Does not the Secretary of State agree that the decision of the Secretary of State for Education and Science to make it legal for schools to charge parents for things such as music lessons, field trips and so on will increase considerably the problems for families with children? Does not that make the right hon. Gentleman's decision not to increase child benefit particularly mean? Does he accept that the more he talks about targeting, the more he must come up with a solution to the problem of take-up among families on low incomes who do not apply for many of the means-tested benefits, so the attraction for the Government of such benefits is that many people do not apply for them? The big attraction of child benefit is that there is almost 100 per cent. take-up.
Mr. Moore: On the hon. Gentleman's final point, I recognise the problem of take-up, although we are expecting over 70 per cent., and I hope more, take-up of family credit. I hope that the hon. Gentleman will address the issue, which is how one seeks to help the poorest families with children. He does not seem to have accepted the reality, which is that by increasing child benefit, they receive not a penny piece more. Through the measures that I have announced today, those families will receive additional help of £320 million. Such help would have disappeared if we had used child benefit.
Sir William Clark: Does not my right hon. Friend agree that the welfare payments since 1979 have kept well in front of inflation, and the Government should be congratulated thereon? Does he agree that, with regard to the retirement pension, the best service that any Government could give to the retired person is to keep inflation under strict control, which the Government have done? Does my right hon. Friend further agree that the first duty of any Government of any party is to make certain that taxpayers' money is distributed to those in need, and it is incumbent upon the Government to ensure that? Consequently, is it not economic madness to continue paying child benefit to all and sundry, irrespective of need? For example, a person on a 60 per cent. tax rate is receiving child benefit at the gross amount of over £18 a week, which is nonsense. Surely it would be much better to channel that money to people in need, to increase their benefits.
Mr. Moore: My hon. Friend is right to remind the House —although I made the position clear on child benefit—that somebody on a 60 per cent. tax rate has an £18 gain as opposed to someone who does not pay tax and gets £7·25. My hon. Friend is also right to remind the House that benefit expenditure has increased massively during the Government's period of office—in fact, by 43 per cent. in real terms. For taxpayers and the public, especially the old who do not have the opportunity to earn any more, the fear of inflation is the most destructive disease imaginable. The last thing we must do is to allow
190
those pensioners to suffer that fear again. We have protected their real income successfully, far better than the Opposition did when in power. We shall do that by sticking to the economic policies that will destroy inflation.
Mrs. Audrey Wise: Will the Minister admit that he is not taking adequate steps to improve the incomes of the poorest children, but he is using their poverty as an excuse for attacking children in general, by freezing child benefit? Does he not understand that, instead of playing off one section of children against the other, he should be diverting large national resources towards children in general? Furthermore, if the right hon. Gentleman is so interested in the poorest, why is he instituting the cash-limited social fund, which will give 70 per cent. loans, thus plunging the poorest further into debt?
Mr. Moore: I have seldom heard such a bizarre description of the realities of trying to help those in need. Having said that, I do not think that I need make further comment on child benefit. The gross amount of £203 million that I announced today, which is planned for the social fund, looks reasonable alongside the reality of the expected level of expenditure on single payments this year, which is running at around £190 million. Hon. Members on both sides of the House should put into context that £200 million against the totality of income support of £8 billion. The social fund should be seen alongside the £8 billion of income support, when one sees the purpose for which it is intended—to help those in genuine difficulty and in crisis.
Mr. Robin Squire: Does my right hon. Friend accept that one of the major concerns of those of us who support child benefit, and have done for some time, is that a switch to the means-tested benefits which, on the Government's best estimates, will not be collected by 40 per cent. of those entitled to do so, means only that many poor families will not get such assistance? Will my right hon. Friend consider instead discussions with the Chancellor of the Exchequer with a view to taxing benefit at the higher rates of taxation — in other words, for those who pay tax at more than the standard rate—if he wishes to make the distinction between the well off and the less well off in our society?
Mr. Moore: I shall draw the attention of my right hon. Friend the Chancellor of the Exchequer to my hon. Friend's remarks, but, with regard to his first point, I imagine that he is seeking to encourage take-up. We do not want to deny the ability to target effectively towards those in real need, but we want to encourage far more to take up what they are entitled to.
Mr. Dafydd Wigley: The Secretary of State mentioned £203 million for the social fund. Will he clarify the position of local DHSS offices, which may be requested to make a crisis loan to someone in considerable difficulty, who may already have loans which the local DHSS office feels he does not have the means to repay? Does the £203 million include provision for writing off old loans in those circumstances or converting them to a grant, or are the offices expected to refuse to make a further loan?
Mr. Moore: Within the figures, there are arrangements for local offices to be able to do so. We must make a set of assumptions about the extent to which some loans will

191
have to be written off. I should prefer it if I or one of my colleagues could go into further details with the hon. Gentleman when we debate the specifics. There will be not only a contingency fund at the centre but the ability to recognise that some loans will not be repaid. Enshrined in the figures is the assumption that not all loans will be repaid. That must be an assumption.
Mr. John Hannam: Is my right hon. Friend aware that the majority of disabled people will benefit from the introduction of the new two-tier support system but, as he has acknowledged, is he not aware that a problem can develop with the severely disabled? Will he confirm that those who are at present severely disabled will continue to receive the income support that they receive at present? Will he look carefully at finding a method to help those who are severely disabled after April next year, since otherwise the process of bringing them out into the community will be reversed and they will go back into institutionalised care?
Mr. Moore: My hon. Friend is quite right to raise that point. I should make it clear that they will be protected in real terms. That is essential and I have tried to make it clear that we want to target the very few—they are very few—as opposed to the vast majority who will benefit from the changes. I shall consider the premiums regularly in the light of the surveys that are taking place. I am delighted to say in public to my hon. Friend and other hon. Members who have argued so vehemently for the disabled over the years that they should be proud that the share of national wealth for the disabled has increased by 50 per cent. since 1979. That is a very praiseworthy achievement.
Mrs. Alice Mahon: Does the right hon. Gentleman deny that hundreds of thousands of pensioners now receiving a works or occupational pension will be worse off in terms of housing benefit if they pay rent and rates?
Mr. Moore: There will be some richer people who will suffer because of the way in which the disregard works. There cannot be a reduction in the housing benefit caseload from 7 million to 6 million without some of the better-off, including pensioners, suffering as a consequence and losing some of their benefits.
Mr. Nicholas Winterton: Will my right hon. Friend accept that concern about the impact of freezing child benefit is not felt on this side of the House only by the so-called "wets"? Following the excellent question of my hon. Friend the Member for Exeter (Mr. Hannam), will he give a categoric assurance that there will be no loss of income for the severely handicapped, even those who register as severely handicapped, after 1 April 1988?
Mr. Moore: Obviously, I can repeat my reassurance about those who are already registered. Clearly, those who register after 1 April 1988 will come under the scope of the new system, but we must find a way of targeting more effectively those few people whom we have not been able to recognise within the system.
With regard to my hon. Friend's previous question, I recognise his dryness and his long history of support for child benefit. [Interruption.] He is a genuinely honourable friend and he considers these matters rationally and
192
objectively. He will be pleased that we have been able to set aside additional resources for families with children. I know that he welcomes that.
Mr. Alastair Darling: Will the Secretary of State accept that many of the increases that he has announced this afternoon will be funded by removing many people from the protection of benefit? Both the changes in tapers in the housing benefit. regulations and changing the method by which single payments are made will pay for the increases. Does he not accept that people will be paying for the increases and that, if he wants to help those on low incomes, one of the best routes would be to encourage the Chancellor of the Exchequer to change the income tax regime so that low income taxes are not provided for by the expedient of cutting the amount of money used on social expenditure, such as the benefits that we have discussed this afternoon?
Mr. Moore: First of all, I said earlier that we are in a process of structural reform and change. However, I also said—I wonder if the hon. Gentleman heard me—that the net product of these changes is £500 million additional public expenditure, so it is not a matter of the Chancellor of the Exchequer saving. He is funding £500 million additional net public expenditure. However, I will draw the hon. Gentleman's tax suggestions to the attention of the Chancellor of the Exchequer.
Mr. Tim Yeo: I welcome the concern of my right hon. Friend in targeting help among the poorest families. In the light of the very important contribution which child benefit has made to helping those families, will he undertake to monitor the consequences of the proposals which he has put forward today?
Mr. Moore: Of course, like any Secretary of State in my position, I shall be considering carefully a budgetary area that still spends £4·5 billion. I have a duty to review that constantly and I will continue to do so.
Mrs. Margaret Ewing: Given the Secretary of State's repeated emphasis on helping those most in need, how can he reconcile today's statement and the Government's overall strategy with the reality of the continuing rise, as shown by statistics, in the number of people living in poverty? Is he aware, for example, that one recent survey in Scotland showed that more than one third of Scots lived on or below the poverty line, as defined by his own Department? Will the right hon. Gentleman therefore tell the House how many people will be lifted out of that situation by today's statement? If he cannot give the figures now, will he record them in the Official Report as soon as possible?
Mr. Moore: First, just to correct the record, my Department does not have such a definition. There is a set of definitions that some people outside use with regard to the relativity of supplementary benefit. One of the absurdities about this debate in the national context is that by reducing supplementary benefits I could theoretically reduce poverty. That is complete nonsense. I ask the hon. Lady to recognise, as do most people who study our country, that while we recognise the value of targeting those in genuine need, there has been a relative improvement in the well-being of all our people.
Mr. Tim Janman: May I first inform my right hon. Friend that, at the last general election, I did not gain a seat from the Labour party by preaching messages

193
of increasing public expenditure, taxation, inflation or blanket benefits that go to the whole population, irrespective of need? I took the seat from Labour by standing on the Government's record of reducing taxation and inflation, and of pinpointing the expenditure on areas of real need. In that context, and given the statement made by my right hon. Friend the Secretary of State on child benefit, which I and many of my hon. Friends warmly welcome, will he give us an assurance that the Government will carry out a review with the specific objective of examining changing this appalling blanket benefit to one that can be effectively targeted on those really in need?
Mr. Moore: I am interested in my hon. Friend's support, especially his concern to target benefits on those in need. I made the position clear earlier: I said that, in view of its cost and its ill-targeted nature, we obviously have a responsibility to keep child benefit constantly under review, and we shall continue to do that.
Several Hon. Members rose—
Mr. Speaker: Order. I am bound to have regard to the large number of right hon. and hon. Members who wish to take part in the subsequent debate. I shall allow a further two questions from each side, and then we must move on.
Mr. John Fraser: Since, historically, the tax-free child benefit has taken the place of child tax allowances, is not the effect of the Secretary of State's announcement to tax some families with children in order to help other families with children; whereas, in the Budget next March, under the Rooker-Wise amendment, those whose tax allowances are not related to having children will automatically have their tax allowances increased? Would it not be right to spread the burden among all taxpayers instead of among only families with children?
Secondly, how on earth does the Secretary of State work out that a woman in poverty can have a child for £85?
Mr. Moore: The hon. Member seems to ignore the fact that the proposals are coincidental with a major restructuring of the whole social security system. Consequential upon that restructuring, an extra £220 million will go to families with children through family credit—as opposed to what happens under the present family income supplement system — and an extra £100 million will go to families with children in income support. It is the net product of the ability to put an extra £320 million into the system, as opposed to the £120 million that could have gone into child benefit uprating, that denies the thrust of the hon. Gentleman's remarks.
Mr. Tony Marlow: My right hon. Friend has answered one question about his decision on child benefit, but he has not answered the main question. Looked at overall, if child benefit is being frozen at the same time as—hopefully—my right hon. Friend the Chancellor reduces the rates of taxation, among the taxpaying public there will be a transfer of wealth from those with children to those without them. As a representative of the party of the family, my right hon. Friend will, I am sure, agree that that would be nonsense. What discussions has my right hon. Friend had with the Chancellor to reintroduce the child tax allowance?
Mr. Moore: I know of my hon. Friend's deep interest in this matter. He will be aware that, as far as this statement is concerned, I am adding half a billion pounds net to public expenditure. Clearly, I must have had discussions with the Chancellor of the Exchequer to be able to do that.
Equally, I know that my hon. Friend will be aware that, whatever the Chancellor does in his Budget and tax judgment, I can put £220 million more into helping families with children than I would have been able to do with an increase in child benefit, and those specific families would not have benefited by one penny from a child benefit increase.
Mr. Nigel Griffiths: Will the Secretary of State confirm to someone like me, who worked for an organisation for the disabled for eight years prior to coming to this House, that many organisations for the disabled may find his statement very misleading? In particular, they will find misleading his claim that millions of disabled people will not lose out from April as new claimants. Will he confirm that among the groups that will lose out are new claimants for kidney dialysis who can presently claim £10·85 a week; new claimants who are blind and presently get the non-householder addition of £7·70 which is to be abolished; and new claimants who are incontinent and elderly who at the moment can claim £11·05 and more a week and who will not be able to claim after April? Will he also confirm that people who because of incontinence or disability require additional clothing and who receive up to £10 a week now will not be eligible after April? Not only do those lost benefits total £45 a week or more, but existing claimants will lose as well because those benefits will not be uprated.
Mr. Moore: I compliment the hon. Gentleman on his ability to put many reasonable points. He will obviously expect me and my hon. Friend the Minister for Social Security and the Disabled to stay in close touch with the disabled lobby about these matters. [AN HON. MEMBER: "Is he right or wrong?"] He was wrong not to have heard what I said twice before, that new claimants would be covered under the new system. I referred to that particularly. I know that the disabled organisations will not have made that mistake and will have noticed that there is a substantial overall increase for the disabled from this restructuring. There is no question of that not being accepted by those organisations.
I assure the hon. Gentleman and the House that I shall keep closely in touch with the nature of the premium arrangements in this area. I shall keep closely in touch with my hon. Friend the Minister for Social Security and for the Disabled, because I am concerned to ensure that the reality of the additional money that we are putting into this area is received by the disabled.
Mr. Neil Hamilton: Does my right hon. Friend accept that probably as many as 75 per cent. of families in receipt of child benefit pay income tax as well? Child benefit is expensive to dish out and if we are to solve the continuing problems of the poverty trap and make substantial increases in tax thresholds and reduce income tax rates, we must not only target benefits more distinctly, but remove altogether the universality of benefits such as child benefit. If my right hon. Friend is not already contemplating a review of that position, he should be.
Mr. Moore: I have heard very different advice from different parts of the House on this issue, but I shall stand where I was before by saying that we are not in the midst of a review, but that I have a statutory duty to review this issue each year.
Mr. Speaker: I will bear in mind those hon. Members that I have not been able to call.
Mr. Dennis Skinner: So I have got two in the bank.
Mr. Speaker: Well, there will be plenty of other opportunities, and I shall do my best to ensure that everyone is fairly treated.

Following is the schedule of main proposed rates:

Weekly rates unless otherwise shown

Old rates 1987

New rates 1988

CONTRIBUTORY BENEFITS

Retirement Pension

On own insurance—Category A or B

39·50

41·15

On spouse's insurance—Category B (lower)

23·75

24·75

Non-contributory—

Category C or D

23·75

24·75

Category C (lower)

14·20

14·80

Additional pension, guaranteed minimum pension and graduated retirement benefit

Increased by 4·2 per cent.

Graduated retirement benefit (unit)

5·17p

5·39p

Increments to basic and additional pension, guaranteed minimum pension, and graduated retirement benefit

Increased by 4·2 per cent.

Prescribed maximum amount of additional pension (also paid with widows' and invalidity benefits) (from 6 April)

29·11

34·75

Addition at age 80

·25

·25

Invalidity Benefit

Invalidity pension

39·50

41·15

Invalidity allowance

higher rate

8·30

8·65

middle rate

5·30

5·50

lower rate

2·65

2·75

Widow's Benefit

Widow's allowance

55·35

57·65

Widow's payment (lump sum)

—

1,000·00

Widowed mother's allowance

39·50

41·15

Widow's pension

—standard rate

39·50

41·15

—age related

54 (49)

36·74

38·27

53 (48)

33·97

35·39

52 (47)

31·21

32·51

51 (46)

28·44

29·63

50 (45)

25·68

26·75

49 (44)

22·91

23·87

48 (43)

20·15

20·99

47 (42)

17·38

18·11

46 (41)

14·62

15·23

45 (40)

11·85

12·35

Note: For entitlements arising before 11 April 1988 refer to age points shown in brackets.
Unemployment Benefit

Over pension age

39·50

41·15

Under pension age

31·45

32·75

Occupational pension abatement

35·00

35·00

Weekly rates unless otherwise shown

Old rates 1987

New rates 1988

Sickness Benefit

Over pension age

37·85

39·45

Under pension age

30·05

31·30

Maternity Allowance

30·05

31·30

Statutory Sick Pay

Earnings threshold

39·00

41·00

Standard rate threshold

76·50

79·50

Lower rate

32·85

34·25

Standard rate

47·20

49·20

Statutory Maternity Pay

Earnings threshold

39·00

41·00

Lower rate

32·85

34·25

Industrial Death Benefit

Widow's Pension

first 26 weeks

55·35

57·65

higher permanent rate 1

40·05

41·15

lower permanent rate

11·85

12·35

1 Subject to Parliamentary approval of the Social Security Bill 1987

Industrial Disablement Pension

18 and over, or under 18 with dependants

100 per cent.

64·50

67·20

90 per cent.

58·05

60·48

80 per cent.

51·60

53·76

70 per cent.

45·15

47·04

60 per cent.

38·70

40·32

50 per cent.

32·25

33·60

40 per cent.

25·80

26·88

30 per cent.

19·35

20·16

20 per cent.

12·90

13·44

Under 18

100 per cent.

39·50

41·15

90 per cent.

35·55

37·04

80 per cent.

31·60

32·92

70 per cent.

27·65

28·81

60 per cent.

23·70

24·69

50 per cent.

19·75

20·58

40 per cent.

15·80

16·46

30 per cent.

11·85

12·35

20 per cent.

7·90

8·23

Maximum life gratuity (lump sum)

4,290·00

4,470·00

Unemployability Supplement

39·50

41·15

plus where appropriate an increase for early incapacity at

higher rate

8·30

8·65

middle rate

5·30

5·50

lower rate

2·65

2·75

Maximum reduced earnings allowance

25·80

26·88

Constant attendance allowance

part-time rate

12·90

13·45

normal maximum

25·80

26·90

intermediate rate

38·70

40·35

exceptional rate

51·60

53·80

Exceptionally severe disablement allowance

25·80

26·90

Guardian's Allowance—each child

8·05

8·40

Child's Special Allowance

8·05

8·40

NON-CONTRIBUTORY BENEFITS

Child Benefit—each child

7·25

7·25

One-parent Benefit

4·70

4·90

Invalid care allowance

23·75

24·75

Weekly rates unless otherwise shown

Old rates 1987

New rates 1988

Severe Disablement Allowance

23·75

24·75

Attendance Allowance

higher rate

31·60

32·95

lower rate

21·10

22·00

Mobility Allowance

22·10

23·05

War Pensions

Disablement pension (100% rates)

private or equivalent

64·50

67·20

officer (£ per annum)

3,363·00

3,504·00

Age allowances

40%–50%

4·50

4·70

over 50% but not over 70%

7·00

7·30

over 70% but not over 90%

10·05

10·45

over 90%

14·00

14·60

Disablement gratuity (£ per annum)

—base figures for

specified minor injury

4,290·00

4,470·00

unspecified minor injury

2,359·50

2,458·50

Unemployability allowance

personal allowance

41·95

43·70

adult dependency addition

23·75

24·75

addition for each child

8·05

8·40

Invalidity allowance

higher rate

8·30

8·65

middle rate

5·30

5·50

lower rate

2·65

2·75

Constant attendance allowance

part-time rate

12·90

13·45

normal maximum rate

25·80

26·90

intermediate rate

38·70

40·35

exceptional rate

51·60

53·80

Comforts allowance

higher rate

11·10

11·60

lower rate

5·55

5·80

Mobility supplement

24·55

25·60

Allowance for lowered standard of occupation (maximum)

25·80

26·88

Exceptionally severe disablement allowance

25·80

26·90

Severe disablement occupational allowance

12·90

13·45

Clothing allowance (per annum)

higher rate

88·00

92·00

lower rate

56·00

58·00

Education allowance (per annum)

120·00

120·00

War widows' pension (private)

widow

51·35

53·50

childless widow under age 40

11·85

12·35

age allowance

—age 65 to 69

5·50

5·75

—age 70 to 79

11·00

11·50

—age 80 and over

13·85

14·45

child addition

11·60

12·00

addition for motherless or fatherless child

12·70

13·15

Unmarried dependant living as wife

49·30

51·45

Rent allowance (maximum)

19·55

20·35

Adult orphan's pension

39·50

41·15

Widower's pension (maximum)

51·35

53·50

Pneumoconiosis, byssinosis, workman's compensation (supplementation) and other schemes

Total disablement allowance and major incapacity allowance (maximum)

64·50

67·20

Partial disablement allowance

23·75

24·75

Unemployability supplement

39·50

41·15

plus where appropriate an increase for early incapacity at

higher rate

8·30

8·65

middle rate

5·30

5·50

lower rate

2·65

2·75

Constant attendance allowance

Weekly rates unless otherwise shown

Old rates 1987

New rates 1988

part-time rate

12·90

13·45

normal maximum rate

25·80

26·90

intermediate rate

38·70

40·35

exceptional rate

51·60

53·80

Exceptionally severe disablement allowance

25·80

26·90

Lesser incapacity allowance

based on loss of earnings over

31·60

32·95

maximum rate of allowance

23·75

24·75

COMMON PROVISIONS

Dependency Additions—Adults

For spouse or person looking after children, with:—

Retirement pension on own insurance, invalidity pension, unemployability supplement and, if beneficiary over pension age, unemployment benefit

23·75

24·75

Non-contributory retirement pension, invalid care allowance and severe disablement allowance

14·20

14·80

Sickness benefit if beneficiary over pension age

22·70

23·65

Unemployment benefit

19·40

20·20

Sickness benefit, maternity allowance

18·60

19·40

Dependency Additions—Children

For each child with: Retirement pension, widows benefit, industrial death benefit, invalidity benefit, invalid care allowance, severe disablement allowance, unemployability supplement and, if beneficiary over pension age, with sickness or unemployment benefit

8·05

8·40

Earnings Rules

Retirement pension

75·00

75·00

Invalid care allowance

12·00

12·00

Unemployment benefit (daily rate)

2·00

2·00

Therapeutic earnings limit

26·00

27·00

Industrial injuries unemployability supplement permitted earnings level (annual amount)

1,352·00

1,404·00

War pensioners' unemployability supplement permitted earnings level (annual amount)

1,352·00

1,404·00

Adult dependency additions with:—

Sickness benefit if claimant is

under pension age

18·60

19·40

over pension age

22·70

23·65

Maternity allowance

18·60

19·40

Unemployment benefit if claimant is

under pension age

19·40

20·20

over pension age

23·75

24·75

Retirement pension, invalidity pension, severe disablement allowance and unemployability supplement where dependant:

is living with the claimant

31·45

32·75

still qualifies for the tapered earnings rule

45·09

45·09

Retirement pension, invalidity pension and unemployability supplement where dependant not living with claimant

23·75

24·75

Severe disablement allowance where dependant not living with claimant

14·20

14·80

Invalid care allowance

14·20

14·80

Child dependency additions—

Weekly rates unless otherwise shown

Old rates 1987

New rates 1988

Level at which child additions payable with long-term benefits are affected by earnings of claimant's spouse or partner

first child

85·00

90·00

each subsequent child

10·00

11·00

Hospital downrating

20% rate

7·90

8·25

40% rate

15·80

16·50

INCOME-RELATED BENEFITS

Provisions common to all three benefits

Capital

upper limit

—

6,000·00

amount disregarded

—

3,000·00

child's limit

—

3,000·00

Tariff Income

£1 for each complete £250 or part thereof between amount of capital disregarded and capital upper limit

Income Support and Housing Benefit—Common Provisions

Personal allowances

Single

—under age 18

—

19·40

—age 18–24

—

26·05

—age 25 or over

—

33·40

Lone parent

—under age 18

—

19·40

—age 18 or over

—

33·40

Couple

—both under age 18

—

38·80

—at least one age 18 or over

—

51·45

Dependent children

—under age 11

—

10·75

—age 11–15

—

16·10

—age 16–17

—

19·40

—age 18

—

26·05

Premiums

Family

—

6·15

Lone parent (income support)

—

3·70

Lone parent (housing benefit)

—

8·60

Pensioner

—single

—

10·65

—couple

—

16·25

Pensioner (higher)

—single

—

13·05

—couple

—

18·60

Disability

—single

—

13·05

—couple

—

18·60

Severe disability

—single

—

24·75

—couple (one disabled)

—

24·75

—couple (both disabled)

—

49·50

Disabled child

—

6·15

Income Support

Maximum amounts for accommodation and meals in

a. Ordinary board and lodging

between £45 and £70

between £45 and £70

b. Hostels

70·00

70·00

Maximum special increase (a and b)

17·50

17·50

c. Residential care homes

—old age

130·00

130·00

—very dependent elderly

145·00

155·00

—mental disorder (not handicap)

130·00

130·00

—drug/alcohol dependence

130·00

130·00

—mental handicap

150·00

160·00

—physical disablement

Weekly rates unless otherwise shown

Old rates 1987

New rates 1988

—(under pension age)

190·00

190·00

—(over pension age)

130·00

130·00

—others

130·00

130·00

—maximum Greater London increase

17·50

17·50

d. Nursing homes

—mental disorder (not handicap)

180·00

185·00

—drug/alcohol dependence

180·00

185·00

—mental handicap

200·00

200·00

—terminal illness

230·00

230·00

—physical disablement

—(under pension age)

230·00

230·00

—(over pension age)

175·00

185·00

—others (including elderly)

175·00

185·00

—maximum Greater London

increase 17·50

17·50

Allowances for personal expenses for claimants in Board and lodging accommodation and hostels

Lower

—single

10·00

10·30

—couple

20·00

20·60

Higher

—single

11·15

11·50

—couple

22·30

23·00

Dependent children

—under age 11

3·35

3·45

—age 11–15

5·15

5·30

—age 16–17

6·00

6·20

—age 18

10·00

10·30

Private and voluntary residential care and nursing homes

9·25

9·55

Dependent children allowances above apply except —age 18

9·25

9·55

Hospital and local authority (Part III) accommodation

7·90

8·25

The Polish home Ilford Park

11·15

11·50

Housing costs

Deduction for non-dependants aged 18 or over and in remunerative work

8·20

others, aged 18 or over or on income support and over 25

3·45

Low earnings threshold

49·20

Deductions for direct payment of fuel debt

5% rate

1·70

10% rate

3·35

Arrears of housing costs

1·70

Reduction in benefit for strikers

17·00

17·70

Disregards

Standard earnings

5·00

Higher earnings

15·00

War pensions

5·00

Voluntary and charitable payments

5·00

Students covenanted income

5·00

Income from boarders

35·00

Expenses for subtenants

Furnished or unfurnished

4·00

Where heating is included, additional

6·70

Housing Benefit

Amenity deductions for

heating

6·70

hot water

0·80

lighting

0·50

cooking

0·80

Weekly rates unless otherwise shown

Old rates 1987

New rates 1988

all fuel

8·80

Non-dependant deductions

Rent rebates and allowances aged 18 or over and in remunerative work

8·20

others, aged 18 or over or on income support and over 25

3·45

Rate rebates, aged 18 or over

3·00

Low earnings threshold

49·20

Expenses for subtenants

Furnished or unfurnished

4·00

Where heating is included, additional

6·70

Earnings disregards

where disability premium awarded

15·00

various specified employments

15·00

lone parent

15·00

one of a couple in employment

10·00

single claimant

5·00

Other income disregards charitable or voluntary payments

5·00

war pensions

5·00

students covenanted income

5·00

Family Credit

Adult Credit

32·10

Child Credit

under age 11

6·05

age 11–15

11·40

age 16–17

14·70

age 18

21·35

Capital

upper limit

6,000·00

amount disregarded

3,000·00

child's limit

3,000·00

Tariff Income

£1 for every complete £250 or part thereof between amount of capital disregarded and capital upper limit

Disregards

war pensions

5·00

voluntary and charitable payments

5·00

students covenanted income

5·00

Expenses for subtenants

furnished or unfurnished

4·00

where heating is included, additional

6·70

Applicable amount (ie taper threshold level)

51·45

Maternity Payment

80·00

85·00

Babcock Power Plant, Renfrew
Mr. Speaker: We now come to an application under Standing Order No. 20.
5.15 pm
Mr. Allen Adams: A moment ago I noticed the Secretary of State for Scotland skulking behind your Chair, Mr. Speaker. Tragically, as is so often the case when we discuss Scottish matters, he seems to have disappeared once again.
The company about which I wish to speak is now called FKI, but I would be more readily understood by hon. Members if I referred to it as the Babcock power plant of Renfrew. On Friday the company announced 500 redundancies following on 500 redundancies that were announced only two months ago. That is a total of 1,000 jobs lost within three months and the work force is now reduced to 800 from its capacity at one time of 8,000. As usual, we were met by a stultifying silence from St. Andrew's house. Not a word was spoken by a single Government Minister on this very serious matter. They stood like rabbits mesmerised by a stoat and uttered not a single sound or made a single vibration.
Obviously, this is an important matter for the people who are losing their jobs and for my constituency, but it is also important for the nation as a whole. At Renfrew we had gathered together some of the finest expertise in the world in the field of power station equipment manufacture. We also had some of the finest expertise in the world in X-ray equipment and lifting gear.
My great fear is that once that expertise is dispersed to the four corners of the world—and at the moment many people are being tempted away by Arab and American money—we shall never reassemble it in one place. If that happens a great British skill which brought a considerable amount of money to this country in terms of exports will never be put together again. That is why I bring the matter to the attention of the House. For many years I brought it to the attention of the Prime Minister and the Department of Energy but to no avail. If I am lucky enough to catch your eye on Thursday, Mr. Speaker, during business questions I shall put to the Leader of the House that we should have a debate on this matter within the next week.
Mr. Speaker: The hon. Member asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the announcement by FKI Electrics, Halifax, to render 500 people redundant at their Renfrew plant."
I listened with great care to what the hon. Gentleman said and, in particular, to his last comment about business questions on Thursday. I regret that I do not consider the matter that he has raised as appropriate for discussion under Standing Order No. 20 and I cannot therefore submit his application to the House.

BP (Share Flotation)
5.17 pm
Mr. John Smith: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 20, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the uncertainty surrounding the sale of BP shares."
The House a short time ago listened to a statement by the Chancellor of the Exchequer in which he said that he could not give his decision on whether he could release the underwriters from their obligations until Thursday of this week. That means that uncertainties will continue to surround the sale of the shares until then.
This is clearly the biggest privatisation exercise to date, very likely will be the biggest flop of all, and is therefore a specific and important matter. It is urgent, because unless a debate is granted the House will be unable to respond to the invitation which the Chancellor extended that we should give him our views before he reaches a decision. Since the Chancellor deliberately extended this invitation, there ought to be an opportunity whereby the House can respond.
Some very important issues are at stake. It is likely that Britain's greatest company will have over 30 per cent. of its shares held by very unwilling underwriters. There may well be very difficult problems for many private individuals who have applied for shares as a result of the Government's extravagant advertising campaign, and who were perhaps under a misapprehension about the price of the shares for which they were applying. In view of these important factors and, above all, because the Chancellor invited our views and because it is impossible for us to express our views other than in a debate, I move this motion.
Mr. Speaker: The right hon. and learned Gentleman seeks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
"the uncertainty surrounding the sale of BP shares."
I have listened with great care to what the right and hon. learned Gentleman has said, but I regret that I do not
204
consider that the matter that he has raised meets the criteria under which I can grant a debate under Standing Order No. 20 and I cannot, therefore, submit his application to the House.
Mr. Neil Kinnock: On a point of order, Mr. Speaker. Could the House have your guidance and direction as to how matters should proceed over the next few days? No one needs to tell you of the crucial importance of the issue of the BP sale, both in terms of general conduct in the markets and the implications of the sale, given the present instability of the markets. No one needs to tell you, Mr. Speaker, of the importance of this matter to several score of thousands of private individuals and the importance of the sale of a major British asset.
In those circumstances, it would appear to be appropriate for the Government, given the general instability, to come before the House voluntarily to make statements or even to initiate a debate, especially since, as my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) said, the Chancellor made it apparent that he wanted the view—to quote him—"of right hon. and hon. Members." The Chancellor said that by Thursday the Government will make a decision. That could mean that by Friday trading will commence in these new undervalued shares. In all those circumstances, the House has had scant opportunity to make its views known. I understand that you form your judgment on applications to adjourn the House under Standing Order No. 20, and we respect it, but all I would do is ask you to give us your guidance on the kind of circumstances in which a further submission could be made, given the general urgency of the situation, and the fact that we have, at the earliest, a deadline of Thursday, and, at the latest, a deadline of Friday to record the view of this House.
Mr. Speaker: I appreciate what the right hon. Gentleman has said. He and the House know that I am bound by criteria laid down in Standing Orders. I shall, of course, watch the continuing situation carefully. The House should bear in mind that there will be opportunities during Question Time tomorrow and again on Thursday, but I will certainly bear this matter in mind.

Defence
[Relevant reports from the Select Committee on Defence:
First Report: Expenditure on Major Defence Projects: Accountability to the House of Commons, House of Commons Paper 340; Third Report: The Progress of the Trident Programme, House of Commons Paper 356; Fourth Report: Implementing the Lessons of the Falklands Campaign, House of Commons Paper 345–I, and the Government Response thereto, Cm 228; and Fifth Report: Defence Commitments in the South Atlantic, House of Commons Paper 408.]
Mr. Speaker: Before I call the Secretary of State for Defence, I must announce that I have selected the amendment in the name of the Leader of the Opposition and his right hon. and hon. Friends.
5.21 pm
The Secretary of State for Defence (Mr. George Younger): I beg to move,
That this House approves the Statement on the Defence Estimates 1987 contained in Cm. 101.
We are debating the statement on the Defence Estimates today, unusually more than five months after its publication in May. As all hon. Members are aware, the delay has been caused unavoidably by the general election and the pressure of other business in the early weeks of this Session.
Equally unavoidably, the House has not had the benefit of the usual report on the statement by the Select Committee on Defence which has still to be reconstituted.
I very much regret this—as I am sure does the House as a whole. The Defence White Paper covers a good deal of detailed ground much more than can be covered even in a long debate.
I have greatly valued the time and care that the Committee has devoted both to the statement on the Defence Estimates and to other issues.
This summer, for example, saw the publication of the previous Committee's report on "implementing the lessons of the Falklands campaign". The House will appreciate the care and effort put into this wide-ranging and detailed survey by the then Sir Humphrey Atkins, formerly my right hon. Friend the Member for Spelthorne, my hon. Friend the Member for Hampshire, East (Mr. Mates) and his colleagues on both sides of the House. The report fully maintains the tradition of thoughtful and constructive analysis of major defence issues which the House has come to associate with the Committee. The Government's observations, published last week, record the substantial progress that we have made in profiting from the experience of the Falklands to strengthen the capability of the armed forces.
Despite the absence of this year's report on the statement on the Defence Estimates, I commend the statement to the House as having passed two equally rigorous tests—the test of time and the test of the electorate.
The theme of this year's statement is not new. It is a reaffirmation of our long-standing policy of securing our defence through our membership of NATO; and, within NATO, pursuing the dual approach of deterrence and detente. That requires us to maintain sufficient strength to deter aggression, while simultaneously seeking, through
206
arms control negotiations, to achieve an inherently less dangerous world in which security can be assured, and, if possible, enhanced, at lower levels of armaments.
The electorate has massively endorsed the policy of deterrence based on a mix of nuclear and conventional weapons. There will be no substitute for the nuclear component in this mixture so long as the risk of war in Europe remains, or until we are confident that we have a better way to keep the peace. Only nuclear weapons can present a potential aggressor with a sufficiently clear risk that the costs of aggression will amply outweigh any conceivable gain.
The debate on the British contribution to NATO's strategic deterrent has now been settled. The Trident programme is on course to provide the necessary updating of that capability from the mid-1990s; and earlier this month I placed the order for the second Vanguard class Trident missile submarine, HMS Victorious.
I must say a word about the operation of Trident, in view of some very strange reports that have been circulating recently. There is no truth whatever in the idea that we shall not own our own missiles for the Trident system. We shall be buying them all, and they will cost us over £1 billion. Trident will be truly independent, and the Labour party is clutching at straws by trying to claim otherwise.
As the House well knows, we have had since 1982 an agreement for servicing them at the United States facility at King's Bay, Georgia. That has been very advantageous to the United Kingdom, producing savings of some £767 million over the original estimate for Trident. Under the agreement, our missiles will go to King's Bay for refurbishment after every seven or eight years of deployment and replacements will be taken into service. That perfectly sensible arrangement will in no way affect the independence of our deterrent, which with its United Kingdom warheads and United Kingdom owned missiles will remain at all times under the control of the British Government.
Mr. Tony Benn: On the matter of independence, nobody doubts that the warhead would be owned by Britain. However, will the Secretary of State say categorically that it could be fired and targeted without the consent of the Americans who own the satellite system? In the Zircon film, which the Government banned, a clear statement was made by the former permanent secretary at the Ministry of Defence that we do not have independent use of it. However, as I have said, nobody is questioning the fact that we shall own the hardware when we buy it from the United States.
Mr. Younger: The right hon. Gentleman should not believe everything that he sees in films of that sort. That was not a fair representation of what the former permanent secretary said. I can confirm that our independent nuclear deterrent is just that and, in the appalling circumstances of having to use it, it can be used entirely on our own should we wish to do so, which, of course, I hope we never will.
Mr. James Wallace: The Secretary of State has just said that the warheads made in Britain would be British. I think that we have all long understood that. However, can he explain the paragraph

207
in the July report of the National Audit Office on the control and management of the Trident programme which says:
"Most of the expenditure on development and production is incurred in the United States"?
Mr. Younger: The warhead is entirely made in this country. It is stored in this country and it is under no one else's control at any point. That is an important factor and I confirm that that is so.
The talk about independence is extremely important but I am surprised to find that right hon. and hon. Members are concerned about independence. Until recently they professed to reject the need for any such deterrent. I can well understand their desire now to divert attention from their own lamentable record on defence, but they should not try to divert the public's attention from the facts.
That brings me to the truly remarkable trio of amendments that have been tabled. They are the most compelling reading I have seen on the Order Paper for a long time. For light relief we have the amendment tabled by the hon. Member for Meirionnydd Nant Conwy (Mr. Thomas) and his colleagues — I think that they are colleagues or half colleagues — which draws our attention to their complete departure from the real world. That amendment spells out a non-nuclear world in which independent Wales and independent Scotland would happily sit. They would cancel the Trident programme destroying literally thousands of Scottish jobs and probably some Welsh ones, too, in the process. It says that they would leave NATO, which, as I understood the press reports, is in direct conflict to the decisions taken by the Scottish National party congress in Dundee some weeks ago. I notice that the hon. Member for Moray (Mrs. Ewing), who I think is the defence spokesman of the SNP, is not present, but no doubt she will let us have the benefit of her views in due course.
We then have not one but two amendments kindly tabled by the main Opposition party. I hope that the right hon. Member for Llanelli (Mr. Davies) will be able to tell us to which one of them he is speaking today because, as the Front Bench spokesman for the Labour party, he is presumably supposed to represent all the hon. Members who sit behind him.
The amendment tabled by the right hon. Member for Chesterfield (Mr. Benn) and his colleagues reveals the real Labour party policy; there is no doubt about that. It clearly spells out that it is against the retention of any nuclear weapons; it wrongly says that our weapons cannot be used without the consent of the United States and outlines a future that will be free of all military blocs.
The amendment tabled in the name of the.Leader of the Opposition is the most remarkable of all three. [Interruption.] It would be convenient if I did not have to mention this but the House would complain if I did not. It would not be too much to expect the main Opposition amendment to be accurate. It is extraordinary that the right hon. Gentleman and his senior colleagues should have tabled this amendment, because in the third line it says,
"the Government's plans … are leading to damaging cuts in the United Kingdom's conventional defences".
That amendment was tabled against a background, as the right hon. Gentleman must know, that since 1979 we have spent £16 billion more on conventional weapons, not nuclear weapons, than would have been spent on the
208
previous Government's record. That is an average of £2 billion extra per year. The amendment says that there would be a running down of our non-nuclear defences. Again, that is against a background when our contribution to NATO is better in quantity and quality than it was in 1979. It further says that the defence industrial base is being run down. That is against the background of the largest ever turnover in defence industries and the record defence sales that we are now recording.
An amendment in the name of the Leader of the Opposition should at least be accurate, and it is deplorable that that is not the case.
Mr. Rob Hayward: Is not the comment in the third line of the Opposition's amendment on cuts a continuation of the scare stories that the Labour party put around in each of the major cities where defence industries are based in an effort to win electoral support? Did it not receive its answer at the general election in Bristol, where four of the five constituencies returned Tory Members of Parliament with increased majorities?
Mr. Younger: My hon. Friend is right on that point. lit is a sobering thought that if the election result had gone the other way all the people concerned would now be out of work.
Mr. Denzil Davies: I know that it is a long time since the White Paper was published, but the Secretary of State should try to read it. Paragraph 603 clearly says:
"the defence budget is expected to decline by some 5 per cent. in real terms over the 1986 Public Expenditure Survey period."
Our amendmant exactly reflects that statement.
Mr. Younger: Unfortunately, it does not; it talks about a reduction in conventional spending, but there is no such reduction. As I have said, there has been a vast increase in spending in that sector.
These days it is more than usually difficult to take seriously what the Labour party has to say on defence. It is the last party that should be offering advice; it should be seeking it. Indeed, if we are to believe the Leader of the Opposition, he has scrapped his policy and is looking for a new one. History has already proven it wrong. It said that the deployment of cruise missiles would wreck the prospects for arms control, but the reverse has happened. NATO's decision to stand firm has brought within our grasp the first-ever deal to reduce nuclear weapons. There might have been a deal earlier but for the actions of the Labour party and CND, which encouraged the Soviet Union to believe that it might achieve all that it wanted without negotiating seriously.
Moreover, the Labour party's defence policy is in tatters. In June, it seems to be generally agreed, even by the Labour party, it had a bad defence policy. But now it has no defence policy at all; no one knows where it stands on any issue. The right hon. Member for Llanelli is forced to stand facing both ways at the same time. He was quoted in The Times on 2 October as saying of the disarmament process
"we've got to look at both unilateral and multilateral methods in the new climate".
Talk of using Trident politically will not get the Labour party off the hook either; the result is unilateralism by another name. A deterrent of which one says in advance, "I will never be prepared to use it", is no deterrent at all.

209
Why should the Soviet Union negotiate seriously if it knows that a Labour Government will give up our deterrent regardless? Moreover, even if one could get the Soviet Union to agree missile-for-missile reductions with us, it would not enhance our security one jot. In effect, one would be saying, "We will give up all our nuclear weapons if you give up just 3 per cent. of yours".
Ms. Joan Ruddock: I should be interested to know in what circumstances the Secretary of State would use this so-called independent deterrent.
Mr. Younger: The circumstances are clearly spelt out in the White Paper, and they lie behind the defence policy not only of this Government but of every previous Government, including all past Labour Governments. I am sure that the hon. Lady is aware of the circumstances. As for the Liberal—SDP alliance, or what remains of it, I must confess that as regards its defence policy I am even more baffled than it is, and that is very baffled.
The right hon. Member for Plymouth, Devonport (Dr. Owen), who sadly is not present, seems to be a country member of the SDP. He may have principles, but he has no party. The Liberals and SDP may one day have a new party, but it has no principled policies. On that point the hon. Member for Orkney and Shetland (Mr. Wallace), whom we are glad to see representing the weight of the alliance, let the cat out of the bag by saying in Liberal News, which I read avidly, on 18 September:
"There will be some who insist that a new merged party must have a clear line on Trident in particular, and Britain's own nuclear weaponry in general. We will do our party no service by heeding such calls."
That statement says it all.
Common to all of the Opposition parties is a belief that the world has changed so fundamentally that they are relieved of the responsibility for facing up to the difficult defence issues. But events have not altered the fundamental need for the alliance to negotiate from a position of strength.
We welcome the recognition in Mr. Gorbachev's new political thinking of the interdependence of the countries of the world. We welcome the Soviet Union's new-found willingness to negotiate effective arms control arrangements. We would welcome these matters all the more if Soviet leaders did not quite so often, in the course of negotiations, seek to drive wedges between Europe and North America and between Western Governments and their electorates. We would welcome them all the more if it did not raise so many irrelevant arguments or place so many spurious obstacles in the way of progress on arms control. The events last week in Moscow amply demonstrate its commitment to brinkmanship, if necessary jeopardising the progress which has so far been made. We have even seen Soviet spokesmen attempt to liken the dual key Pershing 1A, with its United States warhead, to the United Kingdom's Trident programme; such analysis is patently false. Trident will be a fully owned, fully independent United Kingdom deterrent, carrying United Kingdom designed and manufactured warheads. Soviet attempts at wedge driving and misinformation have failed and will continue to fail.
The NATO Alliance's solidarity remains intact, and because of this we have brought the Soviet Union not only to the conference table but to the brink of an historic
210
agreement on intermediate nuclear forces. Despite Mr. Gorbachev's refusal to name the date for a summit meeting, steadfast negotiating by the United States managed to make substantial progress on the remaining issues. It is a matter for regret that a treaty as important as this may not now be signed by the leaders of the world's great powers as a demonstration of the improving relationship between them. But nevertheless we are intent on reaching agreement, the right agreement, by maintaining the West's united pressure.
We believe that signature by the United States and the Soviet Union of a treaty eliminating land-based INF missiles above the range of 500 km will be achieved. The result will be that the threat posed by Soviet SS20 missiles to Western Europe will be removed. For the first time an arms control agreement will produce an actual reduction in nuclear armouries, and this without diminishing the security of either East or West.
Mr. Allan Rogers: My hon. Friend the Member for Lewisham, Deptford (Ms. Ruddock) asked a legitimate question which the Secretary of State passed over in a facile manner. She asked when the Secretary of State or the Prime Minister would press our button. Would they press it if Russian troops moved into Germany, Holland or Belgium? Would they press it if they landed on our coast? Would they have the complicity and support of the West Germans and the French to nuke their populations as well? When would they press the button?
Mr. Younger: It would be extremely foolish and irresponsible of me to announce publicly in the House of Commons answers to such questions. Of course it is absolutely clear that we have nuclear weapons in case we are put in a position that they are necessary for the survival of our country or the NATO Alliance. It is not only important that we should be prepared to use them. but it is vital that the other side knows that we are prepared to use them. That is the whole purpose. It has been the whole purpose of every Government, Labour as well as Conservative. It is still the purpose of every Western Government, Socialist as well as non-Socialist. On that, some of the hon. Gentleman's colleagues are right out on a limb.
Ms. Ruddock: Will the right hon. Gentleman give way?
Mr. Younger: I should love to give way, but I must press on. Time is against us.
This agreement, if we can get it signed, will be a major success for the Alliance, marking the achievement of a goal that we set ourselves eight years ago. It could not have been achieved unless the Alliance had remained firm in its determination' to counter the SS20 threat by deploying long-range INF systems of its own. Those in this House, and outside, who sought to deflect us from this goal have been proved wrong. The proponents of unilateral disarmament have been clearly, and I hope finally, proved wrong.
We should all beware of the trap of viewing arms control as an end in its own right. The statement on the Defence Estimates rightly cautions against negotiating ourselves into a less secure world. In this respect it is right and proper that those concerned for our security should want to look very closely at the details of the arrangements that are being, and will be, negotiated to make sure that our ability to deter war is not impaired.

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The proposed agreement on INF missiles has naturally been examined closely on this point. The House will, I am sure, welcome the clear statement by the Supreme Allied Commander Europe, General Galvin, that the strategy of flexible response will remain viable after the elimination of land-based INF missiles.
Clearly the agreement will have implications both for the overall balance and for the structure of our forces. But both NATO and the Warsaw pact will retain sizeable theatre nuclear forces after this agreement, including dual-capable aircraft and sea-based systems.
There may need to be adjustments within NATO's remaining forces to ensure that deterrence remains effective. We are looking at this now in NATO. No conclusions have been reached, nor would I expect final decisions before an INF agreement has been secured. There will also continue to be a requirement, articulated in the 1983 Montebello decisions and SACEUR's subsequent study of theatre nuclear requirements, for the modernisation and improvement measures necessary to allow us to maintain deterrence with the minimum number of warheads. I am, however, totally confident that we shall be able to maintain effective deterrence following such an agreement.
Chemical weapons are another serious cause for concern in the West. We in this country abandoned our chemical warfare capability in the 1950s; the United States has not produced any such weapons since 1969. The Soviet Union, on the other hand, has accumulated a massive capability — although it was only six months ago that Mr. Gorbachev brought himself to admit publicly that the Soviet Union possessed chemical weapons. This admission is helpful, but more glasnost is needed. In this context we welcomed the opportunity to send a team to visit the Soviet chemical weapons facility at Shikhany earlier this month. But the fact that the team was shown only weapons and agents dating from the 1950s inevitably begged a few questions. Are we really asked to believe that this is all? Have there been no new developments over the past 30 years? The Soviet Union will have to be far more open if we are to have confidence in its commitment to a chemical weapons ban.
The statement on the Defence Estimates reaffirms the Government's commitment to maintain the conventional leg of deterrence by providing forces capable of meeting the threat on the modern battlefield. This means committing the resources necessary for that purpose.
The House will need no reminding that the years since this Government came to office have seen an unprecedented increase in the funds devoted to defence. The defence budget has increased by a fifth in real terms over that period. Our conventional forces have taken the lion's share of that increase. If we exclude the cost of our strategic forces. we have spent, in real terms since 1978–79, some £16,000 million more on conventional defence than if spending had continued at 1978–79 levels. In cash terms, 95 per cent. of the increase in the budget between 1978–79 and 1986–87 has gone to improving conventional defence.
Most of the benefits of this huge investment are yet to come. At the time that the statement was published we had announced orders, since 1979, for 55 vessels and 75 combat aircraft for the Royal Navy.
Mr. Dick Douglas: Earlier, the Secretary of State dealt with some of the lessons of the Falklands and the Government's response to the Select
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Committee's report. In that report is a distinct reference to the need not now to order three type 23 frigates every year. The decision in relation to that goes back to 1982.
Every Select Committee report since 1982 has made it clear that we need to order three type 23 frigates each year to keep the frigate fleet up to date. What effect will his announcement have on job prospects at Yarrow's and other shipyards in the United Kingdom?
Mr. Younger: There are two answers to that legitimate question. The first is that the size of the Royal Navy frigate fleet remains much the same—about 50 frigates. That has not altered, but what has altered since 1982 is the cycle. The type of frigates that we are building will require less maintenance and will have a longer life. That means that the frigates will be able to perform effectively for longer. That is why the workload in the dockyards has declined. The matter is clear and well documented. It is, in a way, a success if we can manage to run our fleet with lower maintenance costs for the same number of ships.
Mr. Jonathan Sayeed: My right hon. Friend will be aware that the design of the type 23 frigate is based largely round the computer assisted command system. As CACS has proved a very expensive failure, costing nearly £500 million, on what basis can my right hon. Friend justify his confidence in the building schedule for type 23 frigates?
Mr. Younger: The computer assisted command system is an important part of the frigate, but it does not affect the building programme, except that the first of the line might have to come into service before the full CACS system is available. It is much more important that we should have an effective system than that we should go ahead too quickly with a system that is not satisfactory. My hon. Friend will be able to speak later about that subject.
I was saying that since 1979 we have placed orders for 55 vessels and 75 combat aircraft for the Royal Navy. Many of the vessels have yet to be delivered. This includes 10 of the 12 frigates ordered, three out of five nuclear-powered fleet submarines and all four Upholder class diesel-electric submarines.
The statement records also the Government's decision a year ago to retain an amphibious capability in the longer term. Additionally, since the statement was published, the Ministry of Defence has ordered a further four Sandown class single role minehunters. We remain committed to a modern, well-balanced and capable surface escort force of about 50 frigates and destroyers, and to this end we have recently invited competitive tenders for up to a further four type 23 Duke class frigates.
Mr. Frank Field: Can the Secretary of State give a categorical assurance that he will make a decision on those four tenders judging on price only?
Mr. Younger: We will assess the bids, which I hope will come from a number of different suppliers, with regard to price and the capability of the yards to produce the goods in good time. That is the normal way in which we assess all such bids. The Royal Navy's capabilities are continuing to be enhanced by major programmes to update missile air defence systems, underwater weapons systems and sonars.
Substantial enhancements of the Army's capabilities are also in progress. Equipments ordered since 1979 that remain to be delivered include two out of seven Challenger

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tank regiments, 17 out of 23 APC battalions to be equipped with the new Warrior and Saxon vehicles, 14 out of 26 air defence batteries and all three MLRS regiments. Since the statement went to press, I have been able to announce our intention to order a further 16 battlefield helicopters for the Army, bringing the total ordered to 41, of which 24 have been delivered. These new equipments represent a major advance in 1 British Corps' ability to conduct armoured operations. They will increase the mobility and firepower of the infantry, provide effective protection against a wide range of air threats and substantially improve the range and hitting power of the artillery. 1 BR Corps' capabilities will be further enhanced with the formation next year of a 12th in-theatre armoured regiment, equipped with Challenger, and the re-mechanisation of 6 (Airmobile) Brigade beginning next year. In addition, I am pleased to announce that, following the successful trial of 6 Brigade in its current role, we shall be retaining this important capability by conversion of 24 Infantry Brigade, based at Catterick, to the air-mobile role, starting next year.
Mr. A. E. P. Duffy: Has the right hon. Gentleman felt it necessary to review the TRIGAT programme, which is mentioned in the Defence Statement, in the light of the introduction by the Soviets of reactive armour for their tanks?
Mr. Younger: That is a very relevant consideration in our progress on the TRIGAT programme. We are discussing this matter with our partners and hope to get them together for decisions fairly soon.
The RAF is in the midst of a major modernisation programme. The Tornado programme alone is costing nearly £10 billion—more than the Trident submarines and their weapon systems. It is now two-thirds completed, with some 120 aircraft remaining to be delivered. I was recently able to experience for myself what an outstanding aircraft this is. Other aircraft ordered, which have yet to come into service, include 62 Harrier GR5 ground attack aircraft and 130 Tucano basic trainers.
Manning our modern equipment requires well-trained, well-motivated and highly skilled people. We must provide the pay and conditions of service necessary to recruit and train them. Since 1979 the Government have increased service pay in line with the recommendations of the independent Armed Forces Pay Review Body. As a result, more of our service men are staying on for their full period of engagement than in 1979.
At the same time we are building up the reserves. The total of regular reservists in all three services has increased by 31,000 since 1979, and the volunteers and auxiliary forces have increased by 23,000 over the same period. That is the Army which the Opposition say is suffering from cuts in conventional provision.
I have never pretended to the House that a defence programme on this scale is easy to maintain with resources that are necessarily limited. It never is. We must press on with our efforts to get better value for the money we spend. In this respect, the White Paper highlights progress in three areas. First, there has been progress in continuing to transfer resources from the tail to the teeth. For example, the proportion of service manpower devoted to teeth functions has increased from 60 per cent. in 1981–82 to 68 per cent. now. Civilian staff numbers have been cut by one
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third since 1979. Secondly, there has been progress through a broad range of initiatives designed to reduce costs and increase the efficiency of our equipment procurement. Like others recently, this year's statement shows the dynamism of the changes we have made in this important aspect. Increased competition and a more commercially minded approach to our dealings with our contractors have produced not just financial savings but improved contract performance. Thirdly, there has been progress through international collaboration. The statement records our commitment to collaboration with allies whenever it is the best way of meeting our requirement and getting value for money.
The ending of our commitment to real growth in the defence budget, which I announced in last year's statement, inevitably means that difficult choices have to be made between relative priorities in our forward plans. What will happen — this year, as every year — is the normal process of taking some items out of the programme and putting in others that are considered to be a higher priority. I shall give the House the same assurance as I have given it before. With good management, prudent planning and, not least, the benefit of substantially increased resources over the past eight years, we can maintain our main defence roles. The very large and continuing programme of improvements which these measures have made possible—some of which I have outlined — gives the lie to those who claim that this country can maintain an effective nuclear deterrent only at the cost of weakening our conventional forces. That simply is not the case.
It is because this Conservative Government have looked carefully at the fundamentals of our security that we have realised that nothing has happened in the world to diminish the need for this country to maintain the central pillars of our defence—pillars which have helped to keep the peace for over 40 years. As the statement makes clear, we will not falter in our search for peace with freedom at a lower level of armaments. But in doing so we will never take risks with this country's security. Now is not the time to abandon a policy which experience has shown to work.
There can be no doubt about this Government's determination to take the measures necessary for our national defence. We have charted a clear and consistent course over the past eight years. Our record has twice been put to the test of the polls and twice been endorsed by the electorate. The Conservative party is now the only party in this country that has a defence policy at all. We shall keep steadily to the course we have charted. The task for our third term will be to build on the considerable achievements of the past eight years.
5.57 pm
Mr. Denzil Davies: I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
"believes that the plans outlined in the Statement on the Defence Estimates 1987, Cm. 101, and in particular the Government's plans for Trident, are leading to damaging cuts in the United Kingdom's conventional defences, in our contribution to the North Atlantic Treaty Organisation, and in our defence industrial base; calls upon Her Majesty's Government to cancel Trident, which clearly will neither be British nor independent, thereby avoiding a run-down in our non-nuclear defences; welcomes the progress made by the governments of the United States and Soviet Union towards concluding an agreement eliminating all longer range and

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shorter range intermediate nuclear missiles, including Cruise missiles, from Europe; further believes that the obstacles created by the Strategic Defence Initiative can be resolved and that a further agreement between the United States and the Soviet Union for a 50 per cent. reduction in strategic ballistic missiles can he successfully pursued; and calls upon Her Majesty's Government to press, within the North Atlantic Treaty Organisation, for the speedy commencement of further negotiations to reduce and eliminate all battlefield nuclear weapons in Europe, such negotiations to take place simultaneously with the proposed negotiations between the North Atlantic Treaty Organisation and the Warsaw Pact on the reduction of conventional forces."
The Secretary of State had some fun at the beginning of his speech. It was almost like a knock-about winding-up speech with the right hon. Gentleman stating the various defence policies of the various Opposition parties. Only towards the end of his speech did he address his mind to the real problem and give the game away. Of course, there will be cuts and priorities must be considered. The defence budget is in decline, as I shall show.
The Secretary of State mentioned the INF agreement at some length. We all hope that that agreement will be reached, despite what happened in Moscow recently. The right hon. Gentleman then said that there might have to be adjustments in NATO's nuclear forces in Europe. During the election the right hon. Gentleman talked about compensations, but last Thursday we discovered in the debate on arms control — which, in the main, was a foreign affairs debate — that the Foreign and Commonwealth Office draftsman had got at the drafting and obviously decided that "compensations" was a bit to hard sounding and that "adjustments" sounded much better. Shall we call them "compensatory adjustments"? What will they be? Will they he cruise missiles on submarines? Will they be cruise missiles on frigates? Will they be F111 bombers with hydrogen bombs at Greenham common and Upper Heyford, as has been suggested? Will they be B1 bombers? Perhaps we can be told what these "compensatory adjustments" will be.
As the Russians apparently are giving up three times as much "power", if I may use that word, in terms of the INF agreement, presumably the Warsaw pact countries are entitled to have three times as many "compensatory adjustments". That will make a mockery of any INF agreement, cause NATO considerable political problems and do damage, especially in the Federal Republic of Germany.
I was slightly surprised that the Secretary of State made no mention of the one area outside the United Kingdom where British troops are engaged in—or at least having to operate in — a war zone. We may have had such assurances from the Foreign Office, but we seek a similar assurance from the Minister of State that there will at least be no change of policy and that the Royal Navy will not accompany shipping further than Bahrain and the southern end of the Gulf. As I understand it, that has been the position for the past seven years.
The situation in the Gulf is much more dangerous now than it was seven years ago when the Royal Navy Armilla patrol started to accompany British merchant ships. I am sure that the Secretary of State is more aware than anyone of the real danger arising from Iranian Silkworm missiles based at Bandar Abbas at the mouth of the Gulf. Royal Navy frigates have to pass within range of those missiles, and although it has been fashionable to view them with contempt on the ground that they are old, or inaccurate, or Chinese, over the past few weeks we have seen what
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damage they can do. The danger to the Royal Navy is far greater than it was when the original decision to send it to the Gulf was made seven years ago. There is a real danger that we could be dragged in behind American involvement in the Gulf, especially as the Government foolishly agreed to reflag Kuwaiti tankers with the British flag.
That was an unfortunate and serious decision—[HON. MEMBERS: "Why?"] — first, because it increases the responsibility placed on the Royal Navy. The Navy has very limited resources, and the more ships that it has to accompany, the more difficult the task becomes. Secondly, the decision places us, with the Americans, on the side of one of the belligerents in the Gulf. Although Kuwait is not a belligerent, it is certainly not a neutral state. Kuwait is funding, or helping to fund, the so-called reflagged Kuwaiti tankers carrying oil, the sale of which goes to finance the Iraqi war. There is a real danger that we may be viewed as being in the Gulf, not to protect international shipping, but to help the Americans to ensure that Iraq does not lose the war. As we know, the American navy has plenty of power in the Gulf. It has more ships there than the Royal Navy. It has three aircraft carriers and the kind of air cover that the Royal Navy does not have. I am sure the Secretary of State realises that we are in a very dangerous position. The danger is that we may get dragged further in behind the rather grandiose designs and aims of the United States of America.
Mr. Tony Banks: My right hon. Friend gave an account of the military implications of reflagging. Was he not astounded when, in response to questions on this matter, the Government said that these were commercial matters alone?
Mr. Davies: I think that the word used to describe the arrangements was "administrative". I should have thought that these were serious political matters.
The best that can be said about the White Paper—it is clear from the tenor of his speech that the Secretary of State knows this—is that much of it is out of date and irrelevant. It is based on figures for expenditure agreed almost a year ago in last year's public expenditure review. The Secretary of State did not tell us anything about this year's public expenditure review, although I suppose that he has been on his annual trek to the Star Chamber and knows very well what will happen to him. We shall probably have to wait until next week or the week after before the Chancellor of the Exchequer tells us what effect this year's review will have on the defence budget.
As the Secretary of State conceded, the White Paper was written about six months ago when the Government no doubt had both eyes firmly fixed on an early general election. The White Paper was written with the aim of perpetuating the myth—the Secretary of State tried it again today — that the Tory Government could somehow meet all their defence commitments within the resources allocated to them under the White Paper and under public expenditure reviews. Most hon. Members honestly know — just as most members of the armed forces and most of the outside commentators who take these matters seriously know — that the Government have no hope of meeting their defence commitments within their expenditure target. Over the next few years we shall see a substantial rundown in the amount and quality of non-nuclear equipment available to our armed forces.
I thought that one fact was quite clear and could not be concealed, but the Secretary of State sought to deny it.

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Expenditure on defence is to decline by about 5 per cent. in real terms as a consequence of a definite decision by the Government to cut Britain's defences. I should have thought it obvious that if expenditure declines we will have fewer defences. The White Paper mentions a 5 per cent. cut in real terms — that is 5 per cent. after taking into account the Government's prediction of a rise of about 3½ per cent. in the general rate of inflation. If that forecast is wrong—it seems to be on the low side—the defence budget will be affected.
We must also remember something that is loosely called internal defence inflation. I do not know whether the process can be described as inflation as such. It is a shorthand description of the position. Over the years, internal defence inflation has invariably been higher than inflation as measured by the retail price index, the general deflator, or whatever the Treasury cares to call it. If we take into account that fact and the Government's rather optimistic forecast for general inflation, we realise that there is a real danger that defence expenditure will decline by more than 5 per cent. over the next few years.
It should not be forgotten—although the Secretary of State seems to have forgotten it—that on 27 May this year, while the Secretary of State was engaged on other matters in Scotland, his representatives attended a NATO meeting and agreed with all the other NATO countries that the Alliance should revert to the requirement of a 3 per cent. growth in real spending. I do not know what happened to that agreement. Perhaps the Minister or the Secretary of State will tell us whether that commitment remains. Perhaps it has been ditched. Perhaps it was not a commitment at all, but something to try to fool the British electorate. We should be told. There was a meeting and there was an agreement. Does that agreement still stand? With a 5 per cent. decline in spending in real terms, how on earth do the Government propose to meet that NATO commitment?
As the House well knows, the two main items in defence expenditure are the pay and pensions of service personnel and the expenditure on defence equipment. Unless the Government cut service pay—I doubt whether they would want to do that—the decline in defence expenditure will fall almost entirely on the equipment budget, even given that a few savings may be made elsewhere. Between 1981–82 and 1984–85 there was a fall in the amount of expenditure on personnel and manpower and the Ministry of Defence was able to use the sums saved on those items to buy extra equipment. As the Secretary of State knows, that course is no longer available to him. I understand that expenditure on personnel and manpower is beginning to increase again, so the whole burden of the cuts will fall on defence equipment.
Not all areas of equipment expenditure will suffer. Some are sacrosanct. The budget for Trident will not be touched because, as we heard again today, Trident is the Ark of the Covenant for the Government. In the next five years, at a time when the total budget is in decline, expenditure on Trident will increase sharply. I was interested to hear the Secretary of State's version of the great "Rent-a-Trident" war last week. Perhaps he was out of the country at the time, but he was scathing about what took place. I remind him, however, that the revelations came, not from the terrible Labour party or the Russians, but from his own officials at Faslane, where they know
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about these things. They came from experienced officials at the heart of the system. Those officials knew exactly what the position was, although it may have come as a surprise to the Secretary of State as he was not around at the Ministry of Defence when the famous agreement to save £750 million was negotiated, probably by the then Secretary of State, Sir John Nott.
The present Secretary of State may not have known the details. He may not have read the small print. I shall therefore read out the statement. On Friday 23 October, in an article headed
"Trident will depend on US base staying open",
The Times defence correspondent, Mr. Michael Evans, gave a verbatim quotation which he had clearly taken down in his notebook of what was said by Ministry of Defence officials at Faslane. It read as follows:
"The rocket bodies are being shared in a common pool with the United States where they are built. The missiles are American. There will be a mingled stock. We've got to treat them the same way that the Americans will treat them.
We're not having to buy the missiles from the Americans. We're sharing them and"—
this is very important—
"we're not going to have spare missiles in the UK."
Mr. Michael Mates: Perhaps I can help the hon. Gentleman. The remarks that appeared in that newspaper were wrong. [HON. MEMBERS: "Was the hon. Gentleman there?"] Yes, I was there. The reporters were told authoritatively that the story was wrong before it went to press, but they still chose to print it. We have a free press, so I make no criticism of that, but the right hon. Gentleman should know from experience that the press does not always get these matters right, and he does the defence effort no service whatever by latching on to false press reports.
Mr. Davies: I admire the hon. Gentleman. I have watched him operate over the years. Whenever there is a sticky problem at the Ministry of Defence—I remember one or two during that famous weekend of the Ponting trial—it is always the hon. Gentleman who is put up to clear the confusion and set the record straight. He is a very good soldier, and one of these days he should be rewarded by becoming an official spokesman for the Ministry of Defence rather than an unofficial one. He did a good job on the "Today" programme when he said that the missiles were like calor gas cylinders—we take one in and get another one out. Basically, that is exactly what the officials at Faslane were saying.
Mr. Mates: The programme was "The World at One" — I do not know whether the right hon. Gentleman listened to it. I was trying to explain the situation in terms that would be understood by those not conversant with the defence world.
Mr. Rogers: Such as the Secretary of State.
Mr. Mates: No, it was not my right hon. Friend's analogy and I do not know that he would have used it. That is a matter for him. I said that the position was like the calor gas system. One buys a cylinder when one buys the stove. It is one's own property and one can use it as and when one wishes. [HON. MEMBERS: "No".] No one else owns it. When it is empty, one takes it back. One might wait to have it refilled, but that is not very intelligent when one can pick up another one instead. Nothing in my

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analogy in any way derogates from our possession of the missile. If we get another one back it is still ours to use independently, as the right hon. Gentleman well knows.
Mr. Davies: That is an excellent analogy. The hon. Gentleman is absolutely right. The quotation from Faslane continues:
"With Polaris we own the missiles and process them in the UK. We're renting the Trident missiles."
I accept that "renting" was perhaps not a good word to describe this unusual arrangement. The quotation continues:
"We're paying for them but we're renting them, not buying them."
Another official—the hon. Gentleman may claim that that official too was inaccurately reported—said that Britain would be paying towards "the totality" of the Trident B5 missiles to be built by the Americans.
Mr. Patrick Cormack: Will the right hon. Gentleman give way?
Mr. Davies: The hon. Gentleman was not in Faslane and I must get on. I have given way two or three times already.
Nothing could be clearer. What we are buying is access to a common pool of missiles all owned by the United States.
Mr. Mates: No.
Mr. Davies: The hon. Gentleman can make his own speech rather than shouting inanely from a sedentary position. He has already had two opportunities, plus "The World at One". One missile will he handed in and another taken out. A missile that has been in an American submarine will be put into a British submarine, and vice versa. We are buying access to a common pool.
The Foreign Secretary tried to retrieve the position in last Thursday's debate, but he only made it worse. The Foreign Office draftsman clearly found it difficult to describe the arrangement without giving the game away. The Foreign Secretary said:
"We shall continue throughout to own the same number of missiles at all times."
I do not know how one can own a number. I thought that one could only own things. Clearly the draftsman had problems. When the junior Minister, the hon. Member for Putney (Mr. Mellor), wound up that debate, he characteristically made things even worse when he said:
"The Americans have discovered that if a rocket has to be fully overhauled it might be just as convenient to replace it with another missile."—[Official Report, 22 October 1987; Vol. 120, c. 949–1012.]
There we have it. A missile which at one time has been in a British submarine will he put into an American submarine, and vice versa.
This is not a pedantic exercise. The nature of the arrangement is extremely important. The Secretary of State was trying to pretend that the terrible Russians were spreading propaganda to the effect that the missiles were not really British and therefore would be treated like the Pershing 1A in relation to the INF talks. The Secretary of State claims that the Pershing 1A is completely different. In that situation, the West Germans own the missile and the Americans own the warheads. In our case the situation is reversed, but the principle is the same. How on earth can the British missile system, if one may so describe it, be described as a third country system, as was attempted with the Pershing 1A? It is not a third country system. There
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will be a pool of D5 missiles. They will all end up in the arms negotiations and they may well be treated in the same way as the Pershing 1A in the INF talks.
There is another important question. When asked in what circumstances Trident would be used, the Secretary of State would not be drawn. His predecessor, the right hon. Member for Henley (Mr. Heseltine), however, was fond of describing Trident and Polaris with the chilling phrase, "a weapon of last resort." It is a weapon of last resort, presumably to be used when the Russians are at the Channel ports and Britain will have to use its missiles. In the circumstances, the Americans will not even be engaged in a war in Europe. They will have decided not to commit their vast nuclear arsenal to the defence of Europe. It will be Britain's weapon of last resort. In fact, Trident and Polaris are the very negation of the American nuclear guarantee. They exist—and this is the unsaid fact—because we do not trust the Americans. Whatever we might like to think, Trident will be there because we do not believe in the Americans.
There was a great deal of dust during the election about whether we believed in the American nuclear umbrella and their guarantee. The Secretary of State does not believe in the American nuclear guarantee, and the Prime Minister certainly does not subscribe to the mythical concept of an American nuclear umbrella. Trident is to be introduced because they do not believe in the American guarantee. We do not trust the Americans and we do not believe that they will come to the defence of Europe, so we need a weapon of last resort. That weapon is part of a common pool of American missiles, and one from which the Americans are not prepared to draw in the defence of Europe. If the Government are not concerned about political honesty, at least as a matter of linguistic integrity they should drop the words "British" and "independent" when describing Trident.
I must now return to the more mundane subject of equipment. The Secretary of State is smiling — the subject is obviously on his mind all the time. As he knows, other equipment in the defence budget cannot be touched, such as that subject to contract. Unless the Ministry of Defence breaks a contract, nothing much can be done about that. Some equipment is the subject of joint agreement—such as the Tornado agreement— with other countries, and one reason why people want them is that they are beyond the reach of the Treasury because, politically, it is too much of a problem to touch them.
The pool of equipment is becoming more and more limited and, therefore, the right hon. Gentleman has three options. The first is not to buy any equipment, and he will obviously take that option from time to time. Secondly, he can run beyond its normal life the old equipment that should be replaced. As the report from the Select Committee points out, he is already doing that with the Navy. In that way he can avoid the capital cost of replacement, but he will only increase the revenue cost on his defence budget by trying to maintain clapped out equipment. Thirdly, when he has no other option and has to buy, he will buy from America, either off the shelf or through a few licensing agreements. The Americans, with their vast industry, can afford to produce at lower cash prices. The MOD will save cash from its budget by buying American rather than British. However, because we

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cannot afford to build our own equipment, other losses and damage will be high-for example, to the balance of payments, industry and employment.
The Secretary of State said that there would be no cuts, but recently a leading firm of City stockbrokers specialising in this area said in a circular to its clients that as many as 100,000 jobs could be lost in the defence industries during the next three years because of cuts in the equipment budget.
Mr. Julian Brazier (Canterbury): Was that one of the firms of stockbrokers which, three weeks ago, predicted that the bull market would continue?
Mr. Davies: I believe the market implicitly. I think that it always gets it right. On this occasion it is getting it right again.
The Secretary of State has tried to give the impression—as he would—that there have been fantastic, dramatic increases in defence expenditure since 1979; that there have been a few cuts here and there, but as we have a pool of equipment that does not really matter. I concede, because I cannot do other, that until 1984–85 there was an increase in defence expenditure, but since then there has been a continual decline, and that will continue until the period covered by the last expenditure White Paper of 1989–90.
That decline has been about 5 per cent., but if we exclude expenditure on Trident the decline is 12 per cent. If we simply examine the equipment budget, excluding Trident, the fall is 25 per cent., and for the new equipment budget it is about 35 per cent. Therefore, there is a deliberate policy to cut defence expenditure. We must conclude that, despite all the rhetoric of the election, the Government really are not that interested in defence expenditure. They are concerned, not with non-nuclear defence expenditure, but with nuclear illusions. They are not concerned with providing our armed forces with the reality of modern conventional weapons.
Who will suffer? First, there is always the Navy. I am sure that the House will remember Captain Barker, who, when captain of HMS Endurance, warned against withdrawing that ship from the Falklands patrol. That was during the period of the Sir John Nott cuts. His warnings were ignored, no one listened, and General Galtieri invaded. Captain Barker is now the commanding officer designate of HMS Sheffield. I hope that after this debate he still will be. Recently he said:
"The Navy has its nose to the grindstone the whole time because we haven't got the tools for the job."
That will get worse. Apparently Ministers are committed to about 50 destroyers and frigates. By next summer the figure could be down to 46.
At one time the Government said that they would order three new type 23 frigates a year, but now they will not do that and have told us why. In paragraph 11 of the Government's response to the fourth report from the Defence Select Committee, "Implementing the Lessons of the Falklands Campaign", they state in splendid MOD language:
"The benchmark of about three frigate orders a year was devised in 1982 and was based on a judgement made at the time concerning factors such as hull life, maintenance support and maintenance cycles. Some of these considerations have since changed, leading to decisions to extend ships lives"—
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that is, ships will become older and older and will not be replaced; that is what it means in MOD language—
"and modify upkeep cycles with the result that it is not now necessary to order three frigates a year in order to maintain a surface fleet of about 50 destroyers and frigates."
It will be a very old surface flee— —
Mr. Brazier rose
Mr. Deputy Speaker (Mr. Harold Walker): Order. I remind the House that a very large number of hon. Members are waiting to speak. The Chair will have to take interventions into account. Hon. Members cannot make interventions and speeches.
Mr. Brazier: I am most grateful to the right hon. Member for Llanelli (Mr. Davies) for giving way again. Is he aware that in terms of hull age we have almost the youngest Navy of all the major navies in the world? Is he further aware that when we inherited the Navy in 1979 we had young hulls with very few weapons systems?
Mr. Davies: From what the Navy tells me, I know as everyone else knows that the surface fleet faces a future of fewer and fewer and older and older frigates and destroyers
Perhaps the Minister will tell us something about our commitment in the Baltic and to Norway, and especially about the negotiations within NATO on our commitment to the Baltic approaches. I hate to mention Schleswig-Holstein in time of tension and war. We know that the Government are trying to get out of that commitment. Will we still defend Schleswig-Holstein during the next few years?
Then, of course, there is the more expensive, real commitment to Norway. Some people say that it will cost about £1 billion to replace Fearless and Intrepid and to have proper aviation support platforms. I do not know whether the Government have the money for that. There are grave doubts about whether they have. If that commitment goes, not only will we destroy a NATO commitment, but we will say goodbye to the Royal Marines also. I hope that we will be told something about what is happening in respect of landing and support vessels.
There are real questions about European fighter aircraft. We are now told that the RAF budget will not be able to sustain the 260 fighters required to replace the Phantom Interceptor and the Jaguar ground attack aircraft. To do so would cost £6.5 billion. Apparently, the idea now is to have about 120 of them. The West Germans are also having problems. They may scale down the number of aircraft. Obviously the time will come when project development costs are not worth while in terms of the number of aircraft that will be ordered. I hope that the Minister will deny the rumours. One can envisage the Secretary of State going off to the Americans to buy the F 18. In cash terms that would be cheaper than going ahead with the project. May we be told that there is no intention to do that? If that occurs, 25,000 British aircraft jobs will immediately be lost.
On procurement, there is the matter of tanks for the Army. I read in Jane's Defence Weekly that perhaps we have finished building the British tank. In the 1990s we will need 500 tanks to replace the old Chieftain tanks. Perhaps we will buy the Leopard 2 tank from the Federal Republic or the American MIA tank from the United States. If that

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is the case, it will be the end of the old Leeds RAF tank factory, which is now in the ownership of Vickers Armstrong. May we be told something about tanks?
A reduction in defence expenditure will not only have a damaging effect on the armed forces but will mean that Britain and NATO will rely more on nuclear weapons and less on conventional forces. In the awful jargon of this business, we will lower the nuclear threshold and bring forward the moment when, if war breaks out in Europe, a decision to use nuclear weapons will have to be taken. The point was put clearly by the Foreign Secretary, who is good on such matters. We remember his speech on SDI. He did it again in a speech in Brussels on 16 March, which was reported in the Foreign Office's house magazine "Arms Control and Disarmament Quarterly Review". The right hon. and learned Gentleman said:
"Of course we do not want to be faced with a nuclear 'yes or no' choice at the outset of any conflict. So we must continue to work for improvement in our conventional defences in order to raise the nuclear threshold."
Mr. Younger indicated assent.
Mr. Davies: It is no good the Secretary of State nodding. He is reducing our conventional defences and nuclear threshold and putting more and more money into nuclear weapons and less and less money into conventional equipment.
Our flexible response is more and more dependent upon nuclear weapons, which means that within seven or eight days NATO would have to decide whether to use nuclear weapons. The weapons that NATO would perhaps want to use first are battlefield weapons—the Secretary of State briefly mentioned Montebello—which are located in the Federal Republic. The unfortunate thing is that their range is so short and their power so great that they will destroy 55,000 British troops. They will be killed, not by the Russians, but by our own forces and our own weapons. That is the enormity of such a ridiculous strategy of flexible response, which states that we must fire off nuclear shells, some with a range of 25 km, in that very part of Germany that we are trying to defend.
In the amendment, we ask—this was mentioned in the debate on the arms control legislation last week—that priority in Europe should be given to multilateral negotiations on battlefield nuclear weapons. Such negotiations should be carried out simultaneously with the talks on conventional weapons, which will start between NATO and the Warsaw pact countries in the spring. The Federal Republic desperately wants simultaneous talks because its territory could be destroyed, but apparently the stumbling block is the British Government, and mainly No. 10. There is some fear about what is described as the denuclearisation of Europe. In fact, such weapons would destroy our own forces. The Russians have much more powerful, longer range weapons.
Mr. Cormack: We have heard that the right hon. Gentleman believes the press rather than the Secretary of State for Defence. We have heard a ragbag of accusations, but we have not heard a policy. From what he has said, do we take it that the Labour party believes in multilateralism, not unilateralism, or does it believe in both, or neither?
Mr. Davies: My party's policy is clearly set out in the official amendments. We make no secret of it.
Mr. Nicholas Bennett: Which amendment?
Mr. Davies: The hon. Gentleman was not listening. I referred to the Opposition's official amendment, which has been selected for debate and to which I am speaking. The policy is quite clear. Trident should be cancelled — it does not make any sense—so that we can maintain our conventional defences and raise the nuclear threshold, not lower it. As the amendment states, we wish to see talks to get rid of cruise missiles. We want to see a 50 per cent. reduction in strategic weapons. We do not think that the SDI stumbling block—
Mr. Nicholas Bennett rose —
Mr. Davies: No, I shall not give way again. Many hon. Members wish to speak.
The policy is clearly stated in the amendment. Perhaps the hon. Gentleman should leave the Chamber for five minutes and read it.
Mr. Nicholas Bennett rose
Mr. Davies: No, I shall not give way.
There must be simultaneous negotiations on battlefield weapons. I hope that we can get a better response from the defence team than we received from the Minister of State, the hon. and learned Member for Putney (Mr. Mellor), when he tried to deal with the subject last Thursday. The policies are set out in the White Paper. The resources that the Government have devoted to defence expenditure will mean a weakening of Britain's conventional forces and an increased reliance on nuclear weapons. Such a policy makes no military sense and is morally wrong. That is why we call upon the House to support the amendment and to oppose the White Paper.
6.37 pm
Sir Geoffrey Pattie: I shall make some remarks about an aspect of the defence budget which is not often debated on the Floor of the House —research and development. It is referred to on one page —page 48—of the White Paper. It is not an inexpensive item; it costs the Ministry of Defence over £2 billion. Indeed, from about February 1987, the subject of research and development has become one of national media interest. There have been leading articles in the heavy newspapers, television programmes and rows in the European Community; Sir George Porter, backed by his serried ranks of scientists, has made complaints, and there is now disagreement about space research. Of course, Mr. Deputy Speaker, you would rightly say that that is another subject for debate on another day, but I ask the House to note that there is a distinct and obvious correlation between a civil capability and an ability to supply the military when necessary. That should be obvious to anyone who is not defending a departmental budget.
The moral for the Ministry of Defence is that, if a Ministry wishes to put itself in a position in which it must rely completely on a foreign supplier, the way to go about it is to stand back while a civil capability is allowed to decline and atrophy. That means that a foreign supplier gives the Ministry of Defence the parts when it thinks that it is suitable to supply them, that it transfers the technology when that country thinks it suitable for the recipient to have it, and that exports are made with the leave of the other supplying country and not this country. If that consideration is important —it is up to the Ministry of Defence to say whether it is—it cannot sit or stand idly by while another departmental matter is

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apparently being decided — the question of capability, which is apparently in a departmental box, which is not military, but something else. It would be short-sighted to take that attitude.
I should like to pay tribute to my right hon. Friend the Member for Henley (Mr. Heseltine), who is the only Secretary of State for Defence during the past eight years with whom I have had any dealings, who, when the chips were down on this question of supporting civil capabilities in research, chose to act on his own sense of commitment and vision, as opposed to taking a narrow departmental brief, which, of course, all Ministers get, and to say that it was not in the interests of the Ministry of Defence to support the European Space Agency because it was a civil matter. I hope that in future the Ministry of Defence will continue to follow its instincts, which should be to support the national capability where one should exist.
From the military research point of view, why on earth do we have military research and development? I think that there is consensus in the House that we all wish to see the proper defence of the United Kingdom. There are no differences in the House on that. Therefore, we need the systems and equipment to make that defence possible. If we are to have the systems and the equipment, we must have the research to achieve them. However, the cost of those systems has been rising in real terms. The Ministry of Defence budget allocation does not appear to be rising in similar real terms. That would appear to call into question before long the actual value of the procurement spend. That means that the research and development budget is likely to get out of phase with the amount of equipment that is being procured. Although collaboration on equipment is becoming more common, collaboration on research between various nations is not yet well established. I should like to see the focus put increasingly on collaboration at the research end, as well as at the procurement equipment end.
The White Paper draws our attention to the fact that the research spend—that is the R—is £401 million, and that the D is probably about £1,800 million, although it is not mentioned specifically. It is important to bear that in mind because the R and D spend of the Ministry of Defence is £2.2 billion and the amount spent on pure research is a relatively small part of that large amount.
The claim is often made in various quarters that the Ministry of Defence research budget acts as what one might call, in aerodynamic terms, a drag factor on the whole of the national economic effort as it pre-empts people and money. It is said that too many high-priced people and expert talents are occupied in defence and it is questioned whether that is right. One must say, prima facie, that there is a considerable drag factor and that a lot of people work in, for example, defence electronics. That is not necessarily wrong. However, the way in which it has been approached in the past, in trying to get a spin-off between the military and civil sectors, which is referred to in, for example, paragraph 518, has been to allow companies such as Defence Technology Enterprises Limited to enter certain establishments, to look around and to find a database, which they now have, of items which can be spun off into the civil sector.
However, I have always taken the view that the real spin-off is at the other end of the process, to go upstream rather than downstream, and to co-operate in the early
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stages of research programmes, such as the Alvey programme with which the Ministry of Defence has been involved, and in various forms of co-operation such as the pattern recognition programme at Malvern, and the Gallia-Mercia programmes, some of which are referred to in paragraph 519.
I still do not believe that the process has gone anything like far enough. When one considers it for a moment, the fundamental future technologies that involve communications, materials, sensors, lasers and many other areas of activity have civil, as well as military, applications. Therefore, the basic research into those topics should be carried out by the Ministry of Defence, the Department of Trade and Industry and the private sector, all of which should be involved at the earliest stages. They should not wait until they see some spin-off from the missile programme or from another military programme. That is useful but not fundamental. It is not the best use that we could make of our resources.
Mr. Tam Dalyell: I thank the right hon. Gentleman for his interesting speech. With his experience at the Ministry of Defence and the Department of Trade and Industry, will he reflect on why it has been so difficult to have joint research projects? Is it anything to do with the United Kingdom's patent law?
Sir Geoffrey Pattie: It could be something to do with our patent law. However, it is more often to do with rather basic human considerations, such as Government Departments or different departments of large companies being disinclined to co-operate with each other. It comes down to something as straightforward as that.
I know that many hon. Members wish to contribute to the debate, and in conclusion I urge the House to be aware, on the subject of research and development, of the important agency which exists in the United States and from which we could draw some useful parallels and examples. The Defence Advance Research Projects Agency — DARPA as it is known in the land where acronyms seem absolutely essential — acts as an important centre of seedcorn activity in research on both the civil and military sides. If the Ministry of Defence wishes to avoid some of the pressure that is being put on it at the moment to have the R and D budget reduced, I hope that it will consider putting forward a proposal to the effect that it could act and go beyond paragraph 519 in saying that it will allow some firms from the private sector to go into Malvern and "Isn't that good?". Well, it is good but it could counter-attack by taking the initiative into the private sector by saying that there could be a British research procurement agency to seed all the advanced technologies to which I have referred in both military and civil spheres. We must face the fact that, even though our economy has improved enormously, we cannot afford to duplicate activities in the civil and military areas.
Finally, there must be a strong case for the advanced research that is being carried out in military bases in France, Germany, Italy and Britain being combined. It is ridiculous to have four of the leading European NATO allies reinventing the military wheel in their own countries when we know that the Americans have the great advantage of a unified system, with all the plusses that they can gain from that.
6.48 pm
Mr. Michael Foot: The right hon. Member for Chertsey and Walton (Sir G. Pattie) is a great expert on many of today's subjects. Indeed, he is so much an expert that some of us cannot understand why he delivered his speech from the Back Benches, rather than from the Front Bench. I hope that he will excuse me if I do not follow him in discussing such detailed matters. I shall return to the larger themes of the White Paper because it is one of the most squalidly inadequate documents that has ever been presented to the House of Commons.
When one considers the scale of world events, the perils of nuclear armaments — whatever the estimate that is made of them—the intensification of the dangers of war in so many parts of the planet, surely the White Paper should have been applied to most, or at any rate, to some of those issues. I suppose the fact that the White Paper was produced five months ago is some excuse. I do not know whether the Ministry of Defence knew about the timing of the election and produced a White Paper which it believed would be good for the election instead of for our defences. I shall give some illustrations of that.
Of course, the Opposition are glad about the prospective agreement on intermediate nuclear weapons. We want that agreement to be carried through. It is one of the best developments for a long time, and the Opposition welcome it eagerly. The White Paper talks as though that was not the case. My right hon. Friend the Member for Llanelli (Mr. Davies) will recall that he accompanied me and my right hon. Friend the Member for Leeds. East (Mr. Healey) on a vist to Moscow, where we had lengthy discussions on intermediate weapons. At that time, many countries were becoming extremely anxious about the dangerous build-up of SS20s. We asked the Russians whether they would reduce the number of SS20s, saying, "They are not essential to your security, so would it not be the best solution to abolish them?" The Russians did not say that they would do that, but they said that they would consider substantial reductions in SS20s.
That was the first time that anyone had talked about the zero-zero option in regard to those weapons, but when we returned to London we were attacked viciously by a Foreign Office spokesman. I do not remember who it was, but it was an up-and-coming eager Minister at the Foreign Office who wanted to prove that he could defend any policy at any time with the utmost assurance — the David Mellor of his day, I suppose. The House can see how easily I can keep up with these matters. It may even have been the present Home Secretary. The Minister said that it was absurd to return from Moscow talking about a zero-zero option. He said that it was an idealistic and hopeless proposition, and we were denounced in the usual fashion of the Foreign Office.
Two or three weeks later, President Reagan went on television in the United States saying that he favoured the zero-zero option. Immediately, I went on to "The World at One"—the only programme I could go on—and said that we had welcomed it in Moscow, we welcomed it from Washington and we wanted to see it in operation. Lo and behold, 24 hours after President Reagan had said that it was all right, the Foreign Office said that it was all right. That is an illustration of how we can make progress by the most extraordinary routes.
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The White Paper is a shameful and shocking document. I cannot cover all of it in the time available, but I believe that no such document should have been presented to the House of Commons. One part of it, entitled "70 Years On: A Country or A Cause", is printed on special pink paper, no doubt to tell us that it should not be taken too seriously. It purports to be a history of the Soviet Union and our relations with it during the past 70 years. It is a hangover from the time when the previous Secretary of State for Defence set up a department of Conservative Central Office in the Ministry —paid for by the taxpayer—to conduct a campaign against the Campaign for Nuclear Disarmament. I suppose that the people who drew up those documents were responsible for this potted history of our relations with the Soviet Union since the Russian revolution. The document states:
"Russia has always been a difficult country for the West to understand. 'Secrecy presides over everything'."
Perhaps the former Secretary of State for Defence wrote that paragraph.
There are many more columns, and I looked through them carefully for any reference to the time when we were allies of the Soviet Union. After all, it was an important period in the history of the Soviet Union. First, I thought that it had been omitted, but that would not have been fair.At the fag end of a paragraph, it states:
"In more recent times, Western intervention during the Russian civil war and, later, the Nazi invasion of the Soviet Union, with its appalling toll of 20 million Soviet dead, reinforced the Soviet obsession."
This is supposed to be a serious document presented to the nation. What is this Soviet obsession? Invasion was a bit more than an obsession; it happened several times in Soviet history. Suppose that Soviet historians wrote about the British obsesssion with the Channel. Suppose that they asked why we had this obsesion that the Channel should be defended. They would be derided. This section is supposed to be the background to the defence White Paper, but no one except the Secretary of State for Defence could have written it, because no civil servant would dare to put his name to such a document.
Let us go on to some of the so-called constructive parts of the document. The Secretary of State mentioned his idea of flexible response. When he was asked about it soon after his appointment, his flexible response was always to say that the central feature of the Government's nuclear strategy was the reliance on a flexible response. The White Paper states:
"So NATO evolved in the 1960s a new strategy of 'flexible response'; and this remains its strategy today."
Is that true? Does our nuclear defence strategy remain one of flexible response even on the eve of attaining the abolition of intermediate nuclear weapons? Do the Government still rely on flexible response? Flexible response means the readiness to use nuclear weapons first. It is a scandal that we should be presented with a document saying that we still rely on the idea of using nuclear weapons first when we are on the eve of a major agreement which will abolish that class of weapons altogether.
The document fails to deal with many other immediate problems. It does not mention the non-proliferation treaty agreements. Apparently neither the Ministry of Defence nor the Foreign Office cares much about them. The document, which sets out the thinking behind the Government's defence strategy, ends with a paeon of support for nuclear weapons, as though they were the only

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ones on which we could rely. But under the non-proliferation treaty, which Britain signed, we are committed to abolishing nuclear weapons. We are not committed to doing it within months or years, but to doing it as soon as possible. The treaty talks about
"declaring their intention to achieve at the earliest possible date the cessation of the nuclear arms race and to undertake effective measures in the direction of nuclear disarmament."
Most of the declarations in this defence White Paper and most of the conclusions at the end of each section are in direct conflict with the obligations of Her Majesty's Government under the non-proliferation treaty agreement which binds the British Government to do everything in their power to get rid of nuclear weapons. The Government are in breach of that obligation. How do they believe that they will be able to persuade other nations to join in the non-proliferation treaty agreement?
The other day I read in the papers that President Reagan had had talks with the Indian Prime Minister. He had had the nerve to say that he hoped that India would carry out its allegiance to the non-proliferation treaty on the Indian sub-continent. That matter must have been raised because the Indian Prime Minister asked the President what he was doing about his relations with Pakistan. Of course there is a great danger that great areas of Asia will be thrust into nuclear competition. Indeed, under the principles of this White Paper there is no reason why they should not. The Government's proposition is that the safest thing that one can do is to have nuclear weapons if one can get them. If that applies to us, it applies to other countries too.
I say to the Government and the country that one of the major propositions for ensuring the future safety of this country is that the non-proliferation treaty should be made a reality. However, instead of any mention of that treaty in the defence White Paper it has been utterly excluded. We had a debate on such matters last week and I am sorry that I could not be present to hear the Foreign Secretary. However, I followed that debate carefully. At the beginning of my speech I said that the world may be in the most delicate and dangerous position of its post-1945 history. That also means it is the most dangerous moment in the history of the world because these nuclear weapons have a destructive character beyond anything that the world has conceived before.
The Foreign Secretary and the Government, as shown by this White Paper, are apparently content to base their case, almost entirely, on what was said by Winston Churchill when he went to the United States Congress in 1952. His speech has been quoted by the Secretary of State for Foreign and Commonwealth Affairs and it also appears at the beginning of the White Paper. Indeed, it is almost a test of the Government's whole policy. In 1952 Winston Churchill told the United States Congress:
"Be careful above all things not to let go of the atomic weapon until you are sure, and more than sure, that other means of preserving peace are in your hands".
That sounds reasonable. It sounded more than reasonable in 1952 when the world was only equipping itself with atomic weapons—though they were horrific enough. In my opinion, it would have been better in 1951 and 1952 if Mr. Churchill — a man whose word was greatly respected throughout the world — had used all his influence to try to prevent the arms race — atomic or hydrogen—from ever getting under way
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At that time I believe that there should have been a much greater effort to try to secure such agreement. However, I believe that the attempts made at such an agreement were largely a fake. I believe that anyone who looks at the facts and figures of the Baruch plan will come to that conclusion.
Winston Churchill did not only say what the Government were prepared to do—he was a much wiser old man than that. Very often he was inconsistent as people may be when facing new situations. He did not always say, "I must say exactly what I said before". He changed party allegiance on quite a number of occasions. I happened to be in the House, as were some of my hon. Friends including my right hon. Friend the Member for Chesterfield (Mr. Benn), when Winston Churchill made pretty well the last speech he was to make to the House on the hydrogen bomb. Perhaps he did not draw a sharp distinction, but he made a major decision in his thought between atomic development and the hydrogen bomb. He talked as if the development of the hydrogen bomb was something beyond any previous reckoning and that statesmen of the world should try new methods to deal with it.
Therefore, when Mr. Churchill had the opportunity his last words to this House were not to repeat the statement which the Foreign Secretary repeated, and which is also the text of the defence White Paper. He made an intervention in the famous H bomb debate in which he tried to tell the House and the world that they were facing a new situation. He tried to do that especially because he said that great and hopeful changes were taking place in the Soviet Union. Nobody could accuse Winston Churchill of being a Communist spy or something of that sort, but he did not under-estimate the changes. After the death of Stalin and the arrival of Malenkov and others in power he said that it was one of the great moments in history when we should be seeking to get a real détente—a detente which did not merely lessen the tension, but which dealt with the fundamental question of the nature of the weapons.
Winston Churchill came to the House and had to acknowledge how he had been thwarted in going ahead with his plans for discussions with the Soviet leaders. I hesitate to use the language that Winston Churchill used—he used it not in the House of Commons, but elsewhere. He put the blame primarily on the United States, but also on the Foreign Office, for preventing the discussions that he had wanted with the Soviet Union at that critical moment.
He was eager for a meeting in Moscow, but he said that his plans had been "bitched up"—those were the words he used—by the Foreign Office and the United States President of the time. Perhaps the present Foreign Secretary knows of some other occasions that have been bitched up by the intervention of the Prime Minister and the United States President, but that is another question.
After the debate, having heard what sane and sensible people from all sides of the House had been saying about the menace of the nuclear arms race, he went back and told his doctor, who recorded the conversation, that he was furious at being prevented from carrying through the negotiations for detente which he had prescribed and which he thought were the right way to proceed. He went on to say — it is not exactly the document that is presented to us in the White Paper, and if the Government want to have Churchill up to date they had better put this

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quote on the head of their next White Paper:
that is Russia if he had been allowed to go and if his plans had not been hitched up by the Foreign Office and the American President.
"It might have meant a real UNO, with Russia working with the rest for the good of Europe. We would have promised them that no more atomic bombs would be made, no more research into their manufacture. Those already made would be locked away. They would have had at their disposal much of the money now spent on armaments to provide better conditions for the Russian people. I trust the opportunity may not slip away."
That is what Churchill said about the beginnings of the hydrogen bomb age and, of course, that is what any sensible man or woman should be saying about the present situation.
Tragically the opportunities of 1951–53 after the death of Stalin were cast aside. I am not saying that responsibility rested only with Western statesmen. I have no doubt that it also rested with Soviet statesmen. There were other opportunities such as when Mr. Khrushchev came into power. I am not saying that the entire responsibility for the destruction of that opportunity rested with Western statesmen, but in my judgment most of it did. I believe that that belief is shared by any who apply their minds to that opportunity.
In some respects we have been given a greater opportunity than ever before. So, are we to destroy the possibility of real detente with the new Soviet leadership just as we cast away the chance after Stalin's death and when Khrushchev was the General Secretary in charge of Soviet operations? Will we cast it away again now? I trust not. I trust that the Foreign Secretary will not come to us and say, "Well, again it is the Russians who are causing all the trouble." I want to see not merely the INF agreement agreed, as we all do, but a great big cut in strategic weapons. We want the conditions that can make that possible and we want to carry through our signed obligations under the non-proliferation treaty agreement.
I want all those things to be carried through, and I believe that we in this country could play a major part in securing that, just as Winston Churchill tried to in 1953, although on that occasion he was blocked. What is the blockage today? It is star wars. The Prime Minister can do anything—she does not take any account of these matters—but the Foreign Secretary can hardly come to the House and say, "These wicked Russians are imposing a condition about star wars", because the Foreign Secretary himself said that the star war speech by Reagan was nonsense. He tore it to tatters before the Prime Minister got at him. However, it is still on the record and makes good reading. I have no doubt that it has been translated into Russian. I dare say that when Mr. Gorbachev has the chance to spell out his views, he will spell them out in terms not so different from those which the British Foreign Secretary, in his flash of independence, used when he was outlining a way in which we could proceed.
I believe that we could achieve the most momentous changes in the prospect for our world. We could set behind us the whole of the nuclear arms race. We have a better chance of agreement than ever before. But if we are to secure it we must tear to tatters this wretched little defence White Paper that has been presented to us today because it does not deal with any of those problems. It is a shame and a scandal that it should ever have been presented to
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the House of Commons.
7.13 pm
Mr. David Martin: You must excuse me, Mr. Deputy Speaker, for not being able to follow the right hon. Member for Blaenau Gwent (Mr. Foot) in such a vintage and distinguished parliamentary style. The content of my speech will he a little different, but it is a special honour to succeed the right hon. Gentleman. Thank you, Mr. Deputy Speaker, for giving me an opportunity to speak in the debate, the subject matter of which has closely affected so many generations in. Portsmouth and which continues to be no less relevant today.
My first duty is to refer to my predecessor, Mr. Michael Hancock, who held the seat for three years as a result of a by-election brought about by the death of Mr. Bonner Pink, whom Members of the House will remember with respect. My predecessor, Mr. Hancock, represented the interests of his constituents to the best of his ability and to the limits of what it was possible for one man to do. He continues to serve as a Portsmouth city councillor and as a Hampshire county councillor. I relieved him of only one of his jobs. He can rest assured that I have no designs on the other two. This year Portsmouth was host to the Social Democratic party conference, bang in the middle of my constituency. Particularly if the SDP can guarantee another like the previous one, it is welcome to come every year.
I shall not stretch the patience of the House by giving a detailed description of such a well-known and historic constituency as mine, because Portsmouth, as the home of the Royal Navy, has for so many centuries played such a conspicuous part in peace and war—since at least the reign of Henry VII. I represent the southern half of the city, including the whole of Southsea. It stretches between Eastney with its fine Royal Marines barracks to old Portsmouth, past the Hard, which will be well known to many hon. Members, to the naval dockyard and the harbour. The heritage area grows more interesting as the years go by, with the latest addition of HMS Warrior, a brilliantly restored symbol of the Victorian Royal Navy. Let no one sneer at the jobs created by tourism in the wake of the increasing attractions in my constituency.
Nobody could live in Portsmouth, as I do, or represent the people of Portsmouth for very long, without being immensely and genuinely impressed by the sheer dedication to duty and quality of those serving in the Royal Navy, including the Royal Marines. They enrich beyond measure the life of the city and any threats to their future send shock waves through the population.
I should like to raise three specific matters—first, the relatively new arrangements in the dockyard, which is home base for more than 30 ships. Few people realise how many are still employed there. Apart from the 600 who look after the stores, and the 600 for the Royal Maritime Auxiliary Service, the repair and maintenance organisation employing nearly 3,000 people has found new confidence. The flexible arrangements negotiated with the trade unions mean, as I saw for myself on a recent visit, that the naval base people in green overalls work alongside the service men in blue overalls who work alongside private contractors in white overalls. If one speaks to the captain of any ship that docks there—already I have spoken with many—one hears praise for the service that they receive from the naval base and for the quality of the work.

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Ship repair and maintenance for both naval and civilian purposes remains a difficult matter for guarantees in particular, but I should like the work force to be publicly assured that, for the foreseeable future, the Government's express commitment to a modern, capable escort force of about 50 frigates and destroyers, the mix of new orders and the extension of ships' lives that that entails, includes a leading future for the present arrangements at the Portsmouth naval base. I should like an assurance that the work force will be treated with frankness and kept well informed at regular intervals of what is expected of it, so that rumours that sap morale can never gain ground.
The second specific matter that I should like to raise is about Royal Navy numbers and sea-going commitments. It is well known—the Government make no secret of it—that reductions in uniformed strength of the Royal Navy since 1981 have led to some pressure on manpower. Is it not time for Wrens to have an opportunity to serve at sea? It should at least be part of the training. Let that be a goal for the 1990s. It would help with numbers and please a great many people.
The third and final matter that I should like to raise is the Royal Marines barracks at Eastney. Debates on the Defence Estimates are principally about money, or resources as they are delicately called. It is common knowledge that there is money to be raised from the redundant service property at Eastney. I am sure that I do not need to remind my right hon. Friend the Secretary of State or my hon. Friend the Minister of State for the Armed Forces, who recently visited there, of the special affection that the people of Portsmouth have for the Royal Marines presence and in particular the Royal Marines band based at Eastney barracks. This year it is celebrating its 125th birthday. At 9 o'clock on Radio 4, Angela Rippon is introducing a programme that is helping to publicise that fact. Quite simply, it must remain. Also, there should be as wide a Royal Marines presence as possible, including facilities for cadets. It might be inconvenient, but the cadets are important. People have special affection for them, and there are opportunities at present for them in those barracks.
It is intended to preserve the finest buildings, including the magnificent Royal Marines museum, which I recommend anyone to visit. In addition, it would be sad for any part of the frontage to the sea, including the parade ground, to be developed. It should remain open space, and, what is more, a covenant should be included in any sale so that it can be preserved as such.
If one continues on a trip along the sea front—hon. Members are certainly coming on a trip with me now—one sees the naval playing fields, which are adjacent to the barracks. Although the playing fields are a separate issue, when they are sold there should be sensible provision for open space and recreation, particularly against the sea front. Future development at Eastney must take account of the strength of feeling among the people of Portsmouth about the tradition of the service's presence and the importance of open space in an area that is not too well provided with it. The Ministry of Defence has a tremendous opportunity at all times to contribute to the qualities I have mentioned.
While I am in this House I hope that I shall always be ready to take advice as well as to give it. I have taken the advice of the Duke of Wellington to a maiden speaker,
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which was to say what one has to say, not to quote Latin and to sit down. That is precisely what I have done, what I have refrained from doing and shall now do.
7.21 pm
Mr. James Wallace: I congratulate the hon. Member for Portsmouth, South (Mr. Martin) on an eloquent maiden speech, and I am sure that all hon. Members wish to say how much we enjoyed it, and the way in which the hon. Gentleman displayed his knowledge of the defence issues that affect his constituency. I also thank him for the kind tribute he paid to his predecessor, Mike Hancock. Mike Hancock's work at two council levels shows that he has great commitment to that area. I am sure that the hon. Member for Portsmouth, South would be the first to accept that, while he walked away with the victor's laurels, Mike Hancock gave him a good run for his money.
The Secretary of State for Defence showed in his speech that he was a reader of Liberal News, but it would appear that he is a selective reader. So that these matters do not remain on the record and get used by Conservative Central office, it is necessary to correct the record. I am sure that the right hon. Gentleman is a democrat and as such will appreciate that, when a party is being set up on the basis of party membership democracy, it is not right to foist policies on it before the party has ever met. What I said in the report—the Minister did not accept this—was that we should agree on principles; we shall not be a new party without principles—far from it. As an avid reader of Liberal News, the Secretary of State can see those principles well set out in the speech made by my right hon. Friend the Leader of the Liberal party, which was duly reported in the edition of the week following the one from which the Secretary of State quoted.
Before I return to two key issues that have already been raised in the debate—the question of Trident and the costs of the defence budget—I wish to raise two matters that I know have been giving concern to hon. Members on both sides of the House. First, there is the issue of low flying aircraft. The fact that there have been a number of incidents—indeed, tragically, fatal accidents—during the summer months has led to grave concern being expressed, not least by those in areas in which there is a concentration of aircraft flying at very low altitudes.
Mr. Richard Livsey: Does my hon. Friend agree that the Minister should take on board the necessity to review low-flying procedures in this country at the present time? In particular, he should ban aircraft from flying at 100 ft or below in this country and have it done in Canada and the Falklands, where the facilities are available.
Mr. Wallace: Although the Parliamentary Under-Secretary of State for the Armed Forces is not present, I know that he has given that matter some thought—he has had many representations on it—and I am sure he will have noted my hon. Friend's point, with which I entirely concur.
The second matter concerns the incidents—reported in the press—of new recruits to the services being brutally treated in many ways. I do not expect the Minister to refer to cases that have come to court and been dealt with by courts martial, but as one who was born and brought up in the recruitment area of the King's Own

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Scottish Borderers, I may say that it was a matter of dismay to me that that fine regiment with its fine traditions should have had its reputation tarnished in such a way. I am sure that it is not the only regiment in which such incidents happen, and I hope we shall hear, tonight or tomorrow, what steps have been taken by the Ministry of Defence to root out such activities from our armed forces.
An issue that was dealt with in last Thursday's debate is that of the extent to which our so-called independent deterrent is independent. In that debate, my hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) set out the reasons that might conceivably he given for supporting an independent deterrent. The Liberal party has always rejected the deterrent as a purely national status symbol, and to adopt one on those grounds can lead to proliferation on a massive scale.
As the right hon. Member for Llanelli (Mr. Davies) has already said, the underlying reason for an independent deterrent is that we cannot depend on the United States' guarantee. Although Ministers will never publicly admit it, one often finds even people that one could categorise as pro-Atlantists who will privately admit that it is that niggling fear at the back of their minds that causes them to want an independent deterrent. In recent years, that fear has been strengthened by the United States, which has adopted an outlook that is more Pacific than Atlantic. As we saw last year, President Reagan went to Reykjavik and almost reached agreement wth the Soviet Union on strategic nuclear weapons without, apparently, consulting his European and NATO allies beforehand. If that is the case, we are entitled to ask how independent the deterrent is.
The issue of the missile maintenance is clearly addressed in the Defence Estimates. Page 38 refers to
"the decision to process missiles at King's Bay, Georgia."
What came as a surprise to many last week was the fact that there was not going to be any corporeal missile that one could call the British deterrent. There was to be a pooling arrangement that raised questions about the extent to which we were to be technically independent if we were still to be politically independent.
In an earlier intervention during the Secretary of State's speech, I raised the matter of the report earlier this year by the Comptroller and Auditor General as touching the issue of whether or not the warheads will be entirely British-made and independent. The Secretary of State replied, clearly and unequivocally, that they would be British. That does not square with what the Auditor has said. Page 18 of the report states that there are
"four major areas: development, production, special (ie fissile) materials and capital items, although the last item accounts for only five per cent of the nuclear programme expenditure. Most of the development and production expenditure is incurred in the United States under the arrangements described in paragraphs 4·1 to 4·10". One assumes that there was close liaison when compiling that report with the Ministry of Defence; if so, it is a matter of concern to the House that a report from such a respected authority should make references that have been wholly denied by the Secretary of State. If we cannot have an explanation from the Minister in this debate as to why such a misunderstanding has taken place, I am sure that the Public Accounts Select Committee will devote its attention to the matter when it considers the report. Nevertheless, it all adds to uncertainty about how independent or dependent the deterrent is. If the essential ingredient of deterrence is to sow seeds of confusion and uncertainty in the minds of a possible aggressor. it seems to undermine the concept of defence if
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there is uncertainty and doubt in our own minds. So the more the status of the missiles and warheads can he clarified and cleared up the better."
The subject of costs and the defence budget was explored at some length by the right hon. Member for Llanelli, but I make no apology for returning to the subject. It is at the heart of these Defence Estimates, and what they contain is important to the long-term defence planning of our country. The Secretary of State said that he regretted that there was no Select Committee this year to give useful guidance to our debate. I share his regret, although perhaps if the right hon. Gentleman had been frank he would have used the word "relief too, because in recent years the Select Committee on Defence has not minced its words about the decline of the defence budget in real terms. One assumes that it might well have done so again on this occasion.
Let us, however, give credit where it is due; a 3 per cent. per annum real increase in expenditure between 1979 and 1984 was an achievement by the Government, and perhaps one for which they have not received sufficient credit from their NATO allies. Now, however, we are in a period in which spending has been in decline, and that decline will apparently continue. The trend is downwards and there are no indications that it will be reversed. There are two main components, running costs and equipment. Service pay is a running cost. The Government say that they want to maintain competitive levels of pay and to their credit they have traditionally implemented in full the independent review body awards. Those awards will almost certainly continue at a level above the rate of inflation. Therefore, there may well be a real increase in costs that is not taken into account in the decrease in the budget as a whole.
One cannot get away from pensions and, because of the increases in pay over the last seven or eight years, pensions are bound to increase. The cost of the Meteorological Office is another running cost. It is the responsibility of the Ministry of Defence and, in the light of recent events, we are unlikely to see many economies being made there. Fuel is an important factor. Obviously, savings have been made as a result of the reduction in the price of oil and. while it is difficult to predict, a further fall in the price of oil seems unlikely. If anything, the price is edging up again. What one sometimes suspects, when one sees the amount in the budget allocated to fuel decreasing, is that training and exercises are being curtailed. That can only lead to a fall in morale.
The Defence Estimates say that there is concern about officers voluntarily leaving the service. The Estimates say that in general it is not critical. When a Government report says that in general it is not critical, one suspects that in certain particulars it is getting quite near to being critical. That is an aspect of the rundown in the budget beginning to affect morale, and it shows that certain training and exercise opportunities are being cut.
If we cannot make any savings on running costs, that inevitably means that the burden of the decrease in real terms will inevitably fall on the equipment budget. Regrettably, the Select Committee on Defence has not been in operation. I pay tribute to the work done by Mr. Malcolm Chalmers of the university of Bradford. He carried out a useful piece of work on a detailed breakdown of the analysis of the budget. He estimates that total spending on new equipment will fall by 25 per cent. in real terms between 1984–85 and 1989–90. If one excludes from

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that the amount being spent on Trident, that decrease in real terms is nearer 35 per cent. That must have serious consequences for our air, land and sea defence systems.
What is the Government's response to that? Of course one can tinker at the edges and, as the Secretary of State for Defence says, one can try some prudent planning. The danger there is that, if one takes ad hoc decisions, one can take the wrong decisions, and decisions made out of necessity rather than as a result of some strategic forethought are not always necessarily the right decisions. There are other ways of trying to make savings. Common procurement, especially along with our European allies in NATO, has long been advocated by the Liberal party and savings could be made there. It has been suggested in some places that we should shop around. One suggestion is that rather than buy the European fighter aircraft we could buy American options.
These are important decisions that must be made and it is better that they are made with some idea of principle behind them, because if we find that we are buying increasingly from abroad it raises important questions about the kind of military industrial base that we want at home. That should be determined after some thought and not by the consequence at some later date of a series of ad hoc decisions.
The right hon. Member for Chertsey and Walton (Sir G. Pattie) made an important contribution to the debate when he spoke about research and development. Significantly, he said that research and development is getting out of phase with production. If one extrapolates current trends, one sees that it is not impossible that we could reach the stage at which more is spent on research and development than on producing the equipment that results from R and D. What company will maintain a high research and development budget if it does not get follow-on orders?
Some possible options have been canvassed. What is the future for our surface fleet? Will it be about 50 or will it go down to 40? Will the profile of the fleet have to change as ships are kept in service longer in order to put off the evil day when we will have to order more? Will there be a reduction in the number of orders for the European fighter aircraft? What should be the balance between the surface fleet and the submarine fleet? What should be our commitment out of area in places such as Belize, and what is our future in places such as the Falklands? What will happen if we have to meet difficulties that raise themselves in the Gulf?
The time has come to take a step back and work out exactly our commitment to NATO. Will we spread the jam thinly over a large number of options or focus resources in areas of expertise? If we do not work that out soon, the Secretary of State may get boxed in. We all know about his calm and nonchalant manner. It is the manner that he used time and time again when he told Scottish Members that it was totally impossible to have an independent pay review for teachers. However, two months after demitting office at the Scottish Office he saw his successor managing to do precisely that. If he looks for a pretext, he will find one.
We hope that, in the coming months, an INF agreement will be concluded. If we eliminate intermediate nuclear weapons from Europe, that will provide an opportunity for reassessment. One expects that that will be
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a reassessment of strategy and will take into account not least the balance between conventional forces. Therefore, the Secretary of State has a pretext that will lose him little politically. The newspaper columns would chide him for a reassessment that was too late, but would say that he had done the right thing. If he announced it in the House, Opposition Members would have something of a field day and would crow and say that we told him so. I have never found the expression, "I told you so," a satisfying or telling political line. It is time the Secretary of State grasped the nettle, and he should do it sooner rather than later.
7.36 pm
Mr. Michael Mates: It is a particular pleasure for me to be the first on the Conservative Benches to congratulate my hon. Friend and political neighbour the Member for Portsmouth, South (Mr. Martin) on a quite excellent maiden speech. Not only has he done the world a service by returning that seat to its proper control, where it will long remain, I trust, but the House will have noted from what he said that he had already done his homework. He spoke with knowledge and authority about the major concern in his constituency, the Royal Navy and the Royal Marines. I am sure we look forward to hearing him contribute to many of our future defence debates.
As my hon. Friend said, it is a tradition of the House that one is relatively non-controversial in a maiden speech. Before we acquit him entirely of any charge that he might have breached that tradition, we had better take the blood pressure of the Admiralty Board tomorrow when it reads that he wants to put Wrens on board Her Majesty's ships. That does not quite come into the category of a non-controversial remark, but we will let that pass.
The motion relates to four reports of the former Select Committee of Defence as relevant subjects for debate. As I had the honour of chairing that Committee during the last months of the last Parliament, I hope that it will be helpful to the House if I relate one or two remarks to those reports. First, I shall deal with the Trident report, which is very short and to the point. The reply from the Government was even shorter and to the point because having looked, as we do every year, we found—not going into the merits of the decision that was discussed in a very full report some years ago—that the programme is on course, on time and on schedule and that all is well.
I had an exchange with the right hon. Member for Llanelli (Mr. Davies). I am sorry that he is not in his place because I would rather address my remarks to his face. I am grateful to him for his remarks about me. It is impossible not to regard him with a certain affection when, with his Welsh flair and fluency, he reconciles the irreconcilable among the various defence policies of his party. He balances the imbalanceable in trying to walk this tightrope, as any official defence spokesman for the Labour party has to do, because it is not those on the Benches opposite him who will be getting at him but his hon. Friends behind him. They are by far the greater danger to his position.
The only problem is that the right hon. Gentleman gets carried away with his fluency and is sometimes in danger of believing what he says. There is one tremendous flaw in his argument. He is completely obsessed with Trident and its effect on conventional defence. He is so obsessed that it clouds his judgment about what we are doing in terms of conventional defence. I shall quote one short remark from our Trident report because it might have

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been written for him. I am sure that he did us the honour of reading it hut, unfortunately, he has not paid attention to it. I think that the Minister has accepted what we said. The report reads:
"The pressure on the defence budget has continued to grow, and the proportion devoted to equipment has been further squeezed as we anticipated in 1985. This might have been expected to increase the particular burdens imposed by Trident."
We put the next section in heavy black ink especially for the right hon. Member for Llanelli:
"However, the decline in Trident costs means that the changes more or less cancel each other out and the expected impact on the defence budget is very similar to the position in 1985."
Therefore, the right hon. Member for Llanelli is wrong when he says that the increasing Trident costs are having an ever greater effect on the conventional budget. That is not the case. In fact, the cost is slightly cheaper in relative terms because of exchange rates, arrangements made about servicing the missiles and other factors. If the right hon. Gentleman did his homework, he would find us listening to his arguments with more care and attention.
As my right hon. Friend the Secretary of State said, the dissolution of Parliament less than a fortnight after the publication of the statement in May meant that the Defence Committee could not carry out its usual survey of this year's White Paper. Those annual examinations have steadily increased in scope and detail over the years and I am grateful for what the Secretary of State said about the efforts of the Committee. The Committee has noticed over the years that the Ministry of Defence has cooperated admirably and increasingly in supplying it with a great deal of detailed evidence in a short time. However, we were able to put before the House just before the Dissolution a substantial report on the implementation of the lessons of the Falklands campaign. It covers almost every aspect of British conventional capability. The Government's reply to the report is also before the House. That report is one of four published by the Committee.
When the election was called the Committee found itself considerably over-stretched, and I would like to pay tribute to the members of the Committee for the immense amount of work done to get the reports agreed and published. That was not an easy matter. I should like to thank the Clerks and advisers who worked all hours to produce what I hope the House will think is a considerable volume of useful work.
We have no report on this year's statement, but we can look back to the report we produced a year ago. We said then, with the sense of warning that was contained first in our report on the consequences of giving up the 3 per cent. real increase, that
"management of the budget and improved efficiency alone will not avoid consequent cuts or delays, particularly on equipment."
We said that
"there is a risk of an adverse effect on operational capability, but not in itself amounting to the ending of a major role or commitment."
We also said that
"any further economies will have a direct effect on capability."
Had we been reporting again, we would not have found cause to change our warnings.
However, we have always tried to approach financial problems, not simply by seeking increased resources—although that would ease a number of the difficult choices that the Secretary of State is constantly telling us he faces
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—but by seeking a matching of commitments to resources. We carried out an inquiry into expenditure and policy in each Session of the last Parliament. In each inquiry we formed the view that there was a mismatch between commitments and resources. The Ministry of Defence's traditional ways of dealing with that—salami slicing arid "managing" the budget—are, I regret, still much in evidence. That way of managing the budget can lead to a gradual degradation of capability, to the point where we may still be doing everything, but not very well. The Falklands report, which is relevant to the debate, identified some danger areas which we observed in our inquiry earlier this year.
Mr. Martin J. O'Neill: I am following the hon. Gentleman's argument closely, but I am having a wee bit of difficulty in finding exactly where he parts company with my right hon. Friend the Member for Llanelli (Mr. Davies) because this is similar to the line of argument he was using. He said that because of the cuts and the impact of other items on the budget the items now being dwelt on by the hon. Member for Hampshire, East (Mr. Mates) would be in danger. I do not see how far the hon. Gentleman is away from my right hon. Friend in the conclusions he is drawing.
Mr. Mates: I am a mile away from the right hon. Gentleman when we are talking about all of this being the fault of Trident. The right hon. Gentleman identified certain problems, and I am certain that my right hon. Friend the Secretary of State would not deny that the problems and challenges are there. However, unlike the right hon. Member for Llanelli, I may have something to say about one or two solutions. We heard nothing about that from the right hon. Gentleman.
The management of the defence budget by overcoming temporary difficulties, moving expenditure to the right and sacrificing long-term planning certainly for short-term financial expediency is always more expensive in the long run. A warship builder is one of many who will confirm that, whether in the context of frigate ordering or past choices such as shortening and then lengthening the type 42 destroyers, "management" always makes small savings at the margins but in the end the overall cost goes up. The small savings one can make year by year in allowances, track mileage and live firing practice, which are needed for fine tuning, have an impact on training and readiness and we need to watch that closely so that there is no overall degradation.
I shall now deal with expenditure on major defence projects and accountability to the House. We have always had difficulty in scrutinising defence expenditure and reconciling accountability and security. For some years, the Defence Committee has received the major projects statement, which is issued to the Public Accounts Committee. That lists projects costing more than £250 million. The Committee found that the threshold was far too high for its purposes and other characteristics of the statement meant that it was inadequate for the sort of scrutiny that the Defence Committee wanted to exercise.
In our first report of the previous Session we proposed a much more detailed system with much lower thresholds and a great deal more information. We were delighted that the Secretary of State accepted our proposals almost in their entirety. The first defence equipment project report will be submitted to the new Defence Committee between

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April and June next year. I hope that the House will think that that is another step in the growing willingness in the Ministry of Defence to submit its plans and accountability to the Defence Committee.
Having said that, I shall make one or two brief remarks on my own account. The Committee does not exist, but there are some things I should say as someone who keeps an eye on defence matters. I have mentioned the increasing difficulty, admitted by the Ministry of Defence, in matching commitments with resources. In various debates in the past we have heard about the difficulty of trying to reduce commitments which, on occasions, tend to grow. When we made the initial plan five years ago the Falklands had not happened. That is a commitment we took up and keep, quite rightly, but it is an additional strain. Only a year ago the Armilla patrol consisted of two destroyers or frigates and one support ship. It is now considerably larger, one hopes temporarily. However, the strain increases.
Against that background is the Government's decision to allow real defence expenditure to fall slightly. That is tenable for the moment because of the tremendous efforts, which go unacknowledged by the Labour party, during those six years of real increase to bring the equipment up to date and increase it and to improve morale, pay and other things. That was a magnificent achievement by the Government and, therefore, we can take a short breathing space. However, now may be the moment to warn, as the Committee did last year, that the breathing space can only be short, otherwise the mismatch between commitment and resources is bound to grow. One can manage some of that by greater efficiency and better procurement. That is happening now but only at the margins.
What concerns me is that there is no sign that the Government, not the Ministry, have taken a strategic view on what must be put into our defence resources in the next four or five years. It is time that the Government did that, otherwise my right hon. Friend the Secretary of State will have to tell us, honest as he always is, that there are some commitments that we will carry out so badly that they will be scarcely worth doing. I do not want to sound doom laden, but I am certain that we must reassess the direction of our strategic requirements for the next three or four years, and how we will find the resources to provide our services with the tools to do the job that they have done so outstandingly for the past seven or eight years and for many years before that.
One example is our totem of 50 frigates, to which the Secretary of State referred today. An article in "Jane's Defence Weekly" two or three weeks ago analysed the refit and repair programme and the new build programme. It alleged that in 1989 there would be 45 frigates. Is that not about 50? Is that not the most intelligent way of trying to share the problem? No one denies that there is a problem, but unless at some stage we are able to increase the resources that we can spare for defence, having taken this short breather, those totems will have to be reviewed. It would be better, not only from a military and planning point of view but from a political one, if the sooner we as a Government faced up to these problems the quicker we would be able to clear the air and see where we were going.
I have no doubt about the Government's determination to keep us properly defended, but I ask whether, having taken their eye off the ball for a moment, due to many
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other pressing commitments, they are not allowing our ability to do the job that we have done so well for so many years to go by default. If that were to happen, it would be a great tragedy.
7.51 pm
Mr. Tony Benn: The hon. Member for Hampshire, East (Mr. Mates) ended his speech with an open appeal for more resources for defence. My purpose is to put another question: on what basis is Britain spending over £18 billion per year on weapons of war and its armed forces?
The average family of four, before they have paid rent, bought food or had holidays, pay between £25 and £30 per week for weapons of war, which is three times greater than the amount that is spent on the fire, police and ambulance services combined. In 1986, the world spent £634 billion on defence. The cost of defence in real terms is two and a half times as large as it was in 1960. Does anybody in the House believe that the threat of war is two and a half times greater than it was in 1960? It has been estimated—these figures come from various sources—that everyone in this country will devote three or four years of their working lives to paying for defence, and £1 million spent a minute is the global figure.
I do not want to go behind these facts on technical grounds. I have listened to the speeches that have been made by experts and I recognise their knowledge. But I should like to ask, on what basis is this huge demand made on our people for the present defence programme? I know the answer very well, because the same answer has been given by every Government since the war—Labour as well as Conservative—and the argument broadly rests on three assumptions that are very rarely examined.
The first argument is that, were it not for this enormous defence expenditure, the Soviet Union would attack western Europe, take over France, Germany the Low Countries, Spain and Portugal, and would come here and in some way occupy Britain. In a letter to one of his constituents, the Secretary of State for the Environment said that if we did not have the bomb, the Russians would be here now.
The second argument is that America speaks for freedom, democracy and human rights all over the world and is our natural ally. The third argument is that the bomb makes one safer.
I should like to use this debate to invite the House to consider whether those assumptions are correct, because I do not believe that any of them are. I do not believe for one moment that the Soviet Union has ever planned a military attack on western Europe.
Mr. Mates: What about Berlin?
Mr. Benn: There has never been any evidence whatsoever that the Soviet Union was planning to attack western Europe after the war.
Mr. Mates rose—
Mr. Nicholas Bennett rose—
Mr. Benn: I remind the House that during the war the Soviet Union was our ally. During the election campaign I met a lady of my own age, who said to me, "Mr. Benn, we must have the bomb because we fought the Russians in the last war and we may have to fight them again." I thought that that was a brilliant example of the cold war propaganda that the Conservative party and the BBC have

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been feeding us. But the fact is that at no stage since the war has any evidence been submitted of Soviet intentions to attack western Europe.
Mr. Mates: What about Berlin and the airlift blockade?
Mr. Benn: The hon. Gentleman is well aware that the tripartite status of Berlin led to an argument about the rights or wrongs of the currency reform that allegedly triggered the Berlin airlift. But there was no question whatsoever that the tripartite status of Berlin and its blockade was an act of preparation for war against the west and at the time it was never presented as such.
Mr. Bennett rose—
Mr. Benn: I will not give way immediately.
Some 50 years ago, Lord Halifax went to see Hitler. The captured German Foreign Office documents revealed the view of the pre-war Conservative Government. On 19 November 1937, Lord Halifax said:
"The great services the Fuhrer had rendered in the rebuilding of Germany were fully and completely recognised, and if British public opinion was sometimes taking a critical attitude towards certain German problems, the reason might be in part that people in England were not fully informed."
The Soviet Union must have known perfectly well what we knew. My right hon. Friend the Member for Blaenau Gwent (Mr. Foot) wrote a book entitled "Guilty Men" under the assumed name of Cato. He drew attention to the fact that in 1939, up until the last minute, the British Conservative and National Government, as one must call it, were building up Hitler, and the Russians have not forgotten that. Of course, the Russians also lost some 20 million people in the war. I am putting a point of view which I know will not be accepted by Tory Members, but I hope that the House of Commons is still a place where a point of view can be put. I do not believe that the Soviet Union has ever intended or prepared to attack western Europe.
As a member of the Cabinet I remember some fake figures being produced by the Ministry of Defence. I do not know whether that still occurs, but it did when my right hon. Friend the Member for Blaenau Gwent was in the Cabinet. I think that it was he who spotted them; I certainly did not. The figures showed an enormous preponderance of Soviet forces, but it turned out that the French forces were not included in them. Somebody said, "Where are the French?" I think that it was my old friend, Fred Mulley, who was then the Minister, who said, "The French are not part of the military part of NATO." It was as if we did not know what side the French would fight on in the event of a war. I accuse successive Ministry of Defence officials of misleading us on the military balance.
The reality of the matter is that Russian troops in Russia are included in the figures but American troops in the United States are not. Mothballing is not allowed for and the estimates of the costs of the Soviet armed forces are based on estimates of what it would cost to build them in the United States, where wages are a lot higher.
Sir Antony Buck rose—
Mr. Benn: May I finish this point before I give way to another former Defence Minister who is straining at the leash to demonstrate his knowledge, which I would not dispute for a moment?
We have been misled on the main reason for this enormous expenditure.
Sir Antony Buck: Can the right hon. Gentleman explain why his argument did not prevail with the last Labour Administration, who thought it right to update our nuclear deterrent without telling the House? That Administration brought in Chevaline to update the very deterrent which the right hon. Gentleman now decries.
Mr. Benn: I shall deal with that question soon, but for a full account the hon. and learned Gentleman will have to wait for the appropriate volume, which will be coining out some years from now.
The impact that Mr. Gorbachev has on British opinion is underestimated. I never follow disarmament negotiations in detail because I have always thought them to be a propaganda exercise, but I can tell hon. Members why Gorbachev has registered with British opinion. It is because he wants cuts in defence to divert money to raise living standards for the Soviet people. That is what most people in Britain want. It is astonishing that more people today approve of Gorbachev's Russia and its role in the world than of Reagan's America. That is without a single political leader from any Front Bench saying any such thing.
With respect to some of my right hon. and hon. Friends, I must say that one of the reasons why we found it difficult to put our defence policy across during the election campaign was that we never dealt with the question of the Soviet threat. We said that we would keep the Russians out with more conventional weapons. That made it much harder to put across the peace argument in which many people, in their hearts, believe.
The second question concerns America speaking for freedom and democracy all over the world. I confess that I was born in 1925 into an empire when 600 million people were governed from this Chamber. The first time that I came here in 1937 I saw Winston Churchill sitting where the hon. Member for Wirral, South (Mr. Porter) is now sitting. He was the old imperialist. For him there was no question of human rights in the British empire. We ran it from London. There was no question of votes in India or any of that stuff because everything was run from London. As a little boy of five, I met Mr. Gandhi when he came to London and my father had been Secretary of State for India. A British journalist asked Mr. Gandhi what he thought about civilisation in Britain and Gandhi said, "I think it would be a very good idea." That is how the empire was run. Having been horn in an empire, I would have to be very naive not to recognise another empire when it looms up out of the fog. America is an empire.
I accept that it now operates through treaties, but America has 850,000 troops abroad—more than we ever had. America has 3,000 bases around the world and 135 of them are here, housing 30,000 troops. I do not wish to be misunderstood. Empires behave like that, but an empire that fought in Vietnam, attacked Cuba, toppled the Chilean Government, invaded Grenada, supported the colonels in Greece and Franco in Spain and still supports the Turkish regime, is plainly not committed to human rights. It is committed, as all empires are, to the defence of its political and economic interests worldwide.
Iran is most interesting. The Americans toppled Mossadek, probably the first incorruptible leader in Iran. They got the Shah back and when he died they pushed Khomeini in. There is no doubt that the Americans. thought that a fundamentalist Muslim leader would be the best safeguard against Communism. Then Teheran was

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attacked; the Americans supplied arms to both sides. That is what Irangate was about. Now the Americans support Iraq and they are about to impose an arms embargo. At every stage, American policy has been motivated by the protection of America's interests.
The other day, I met a former Egyptian Minister in Algiers. He said that, during the crusades, European arms manufacturers supplied arms to Richard the Lionheart and Saladin. That has been going on for centuries. People pursue their own interests. I object to the pretence that empires are somehow vested with a sacred responsibility for safeguarding liberty.
I am concerned about American troops here, because there is no agreement as to their use. I doubt whether there is a written agreement at all. One of the worst things that was done after the war was to allow American bases here. That was allowed by a Labour Government. Parliament was told that they were training bases, but they were not. They were permanent. There is no effective control over the American bases.
Next year, I believe, the Government will ask us to celebrate the 300th anniversary of the Glorious Revolution, a celebration with which I am not in sympathy. But Parliament said then that we would never have a standing army. Today we do have a standing army—which we do not control—on our territory. One must not assume that the friendship, blood, sympathy and common language that bring us close to America will remain for ever. Far from accelerating the process of freedom of democracy, I believe that that could be a threat to British interests.
Mr. Bill Walker: The right hon. Gentleman will remember clearly that the United States air force went back to the United States when the war ended and returned here only because of the blockade of Berlin.
Mr. Benn: I said that the US air force was brought back by a Labour Government but that at the time the bases were not presented as being permanent. I shall say more about the post-war Government later.
The third argument is that nuclear weapons make one safer. In 1945, there were three nuclear weapons; today there are 60,000.
Mr. Martin Flannery: I have sought in vain for the American troops in this country. I know that they are in various places, but we almost never see an American soldier in uniform. There is a reason—because, basically, our people do not want them here. If Conservatives have seen American troops, let them tell me where, because I can never find any.
Mr. Benn: It is true that American troops are given instructions to wear civilian clothes outside the bases, so that people are not aware of their massive presence.
There were three nuclear weapons in 1945 and now there are 60,000–enough to inflict 1 million Hiroshimas on the world. Those hon. Members who have been to Hiroshima, as I have, will have seen the museum and its exhibits and will know that the overkill in the armouries of the world in nuclear weapons cannot conceivably be justified by any military arguments.
Britain has never had an independent nuclear deterrent that could be fired without the consent of the United
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States President. That was first brought out by Harold Wilson in an early speech as Prime Minister in 1964. We could not communicate with the Americans at the time without the American underwater telecommunications system. If our weapons were fired and the Americans chose to jam the signals, they could not land anywhere except where they came from. We have fought nine or ten general elections around the argument whether we should or should not have a nuclear deterrent, when we do not have one. That came out, and that was probably why the Zircon film was not allowed to be shown.
In return for being allowed to borrow these weapons on the "Calor gas" principle, the United States controls the entire intelligence system. I know that from my experience as a Minister. I had to go to Washington to seek the consent of the United States Administration on certain key questions that were central to our nuclear policy.
The reason why the trade unions were taken out of GCHQ was that the Americans, having supported us in the Falklands, did not want it to be known what GCHQ was doing.
The next argument is about Chernobyl, which proved beyond any doubt that, if we dropped one of our bombs on the Russians, it would kill us and that if the Russians dropped a bomb on us it would kill them. Radioactivity has not yet learnt the validity of international frontiers. To go on piling up these weapons when we know that if they were used anywhere they would kill people over such a large area is an act of insanity. The next one to go off will almost certainly be an accident. We should also now know why we have pressurised water reactors. The Americans cannot build civil nuclear power stations. We are required to build PWRs to produce plutonium for their use.
The very possession of nuclear weapons has significantly destroyed parliamentary democracy in Britain. Clement Attlee, whom I deeply admired, misled Parliament. He did not tell Parliament or, as far as I know, his Cabinet that the atomic bomb was being built. I was a Government Back Bencher at the end of the 1945 Government and I remember Churchill coming to power and announcing that an atomic bomb had been built secretly. The same was true of Chevaline. From out of the lies which are held, on security grounds, to surround nuclear matters, we have the Cathy Massiters, the Pontings and the Peter Wrights who tell us more than we are allowed to know as Members of Parliament.
If we continue with the public deception which is implicit in the possession of nuclear weapons, we shall destroy what nuclear weapons are there to defend. These arguments—whether or not people agree with them—should be discussed publicly and considered seriously.
Mr. Nicholas Bennett: The right hon. Gentleman talks about the last Labour Government, of whom he and the right hon. Member for Blaenau Gwent (Mr. Foot) were members. The right hon. Member for Chesterfield was also a member of the 1964–70 Government. Why did he not ever resign during those 11 years when the Labour Government were committed to nuclear weapons?
Mr. Benn: If the hon. Gentleman has ever followed any of the points I have ever made, he will realise not only that Attlee did not tell the Cabinet about the atomic bomb but that the Chevaline project was authorised by two or three Cabinet members without the rest of Cabinet knowing. I hope that the House will give me credit, because I have not

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tried to use these arguments to belittle or mock any member of any party. I have tried to address my mind to the underlying assumptions on which we are asked to take £18 billion from the British people next year. If we cannot look back and say, "We made mistakes"—I suppose that I must have made an enormous number myself—what is Parliament about? Are we to go through life saying, "I never learnt anything. I was always right, always right"? It is from one's mistakes that one learns what to do next. If this debate is not about that, we may as well pack up the House of Commons.
We are living in a time when there is a better hope of peace than at any time since 1945, during which I served for a short period on an aircraft carrier in the constituency of the hon. Member for Portsmouth, South (Mr. Martin). I believe that Gorbachev is authentic because he wants for his people what we should want for ours. That point has registered with our people. The bloc system freezes initiatives. If we want to speak to the Hungarians, we have to have a word with Reagan to have a word with Gorbachev to have a word with the Hungarians and the Poles have to do the same to talk to the Portuguese. This bloc system in Europe has prevented us from developing unity through direct links which are necessary. Now, to be launching into a huge programme of nuclear weapons in space—star wars—is an act of sabotage, and Mr. Gorbachev is right to bring that point into the INF discussion.
I have come to believe—this is an old belief which was argued, in one shape or form, by Aneurin Bevan at the end of the war in respect of the third force—that it would benefit this country and its people if we pursued a policy of non-alignment. It would be better if we did not have any American troops in Britain, not merely have no nuclear weapons. It would be better if some countries—Britain is a middle-sized country—devoted their not inconsiderable diplomatic efforts to bridging the gap between Moscow and Washington. We should not just be a pawn of American policies. Resources should be diverted to solving practical problems.
Two nights ago, I heard on the BBC about a crane to lift Trident out of the water—the biggest civil engineering problem in Britain. I think that £700 million is being spent on a crane. There are hospitals with long waiting lists and numerous problems face people in the inner cities, yet we are pouring money into nuclear weapons. The Government cannot justify that any more. Twenty million people die every year in the Third world for lack of a dirt road, a simple clinic, a pump or a pipe, yet we sit in this House and accept that the "Reds" would he here if the Secretary of State for Defence did not have a hire purchase agreement on a Trident system, which he cannot use without Reagan switching on the communications network. President Reagan probably would not dare let the right hon. Gentleman use it. If the Americans do not want to use the system themselves, they would not let us do so and embroil them in war.
There are more emperors with fewer clothes on the Conservative Benches then there can have been for a very long time. It is time someone pointed that out plainly and clearly. This Government's defence policies and the assumptions on which the policies of previous Governments—including those of which I have been a member—have rested need to be re-examined. If a person is wrong, he must not be ashamed to admit it or, at any rate, to examine whether the original idea may have
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been right. There is a time of hope. History would never forgive us if we did not seize this moment, as my right hon. Friend the Member for Blaenau Gwent said in a powerful speech and as Churchill said we should in 1953, when Stalin died. Churchill said that we must explore a new prospect at the summit. We must do that now. To vote for this expenditure would run counter to everything that is necessary. I hope that the House supports the Labour amendment and also votes against the Estimates as a whole.
8.16 pm
Dr. Alan Glyn: I am sure that the right hon. Member for Chesterfield (Mr. Benn) will forgive me if I do not follow his argument, although, curiously, there are some points on which I share his opinion.
As my right hon. Friend the Secretary of State said, this debate is about deterrence and diplomacy. The Government have displayed both in all their actions. Page 20 of the Defence Estimates shows this country's international obligations and all the posts which we have to defend. The defence White Paper is a comprehensive study of our defences and those of our Soviet adversaries. If we look at the details carefully, we can reach no other conclusion than that, without the nuclear deterrent, we could not possibly hold the line. It is the last resort and—here I differ from the right hon. Member for Chesterfield—until we arrive at a satisfactory, comprehensive agreement, our only method of defence.
The Territorial Army is our second line of defence. Although the strength of the Territorial Army and all the reserves has increased, there is a great difficulty with employers. It might be in the Government's interests in preserving the reserve forces to induce or compel employers to release men to fulfil what is a necessary reinforcement in a modern war. We know that our Territorial Army can be moved fairly rapidly, but it takes a long time for the Americans to bring over their reserves. We should give more thought to the Territorial Army, especially to the relationship of reservists with their employers. Small firms face difficulties because it may be difficult to replace only one man, but large employers, such as ICI, should be induced, encouraged or compelled to allow men to do their service.
My second point concerns the Merchant Navy, which is dealt with on page 29. I note that we can obtain people for it in times of war, but with a declining Merchant Navy, what powers have we to requisition ships in time of war? For example, can we requisition British ships serving under a flag of convenience? If we cannot, we shall find ourselves extremely short of transport. We all know that the Merchant Navy is declining and our next line of approach would have to be to requisition ships. What are the restrictions and limitations on requisitioning British ships which do not carry our flag?
We must retain Trident until we have a satisfactory disarmament agreement. Whatever the right hon. Member for Chesterfield says, we have an independent nuclear deterrent which has kept the peace for a very long time. The United States' interests and our own may not be the same which makes it even more important that we should have an independent Trident. It would be perfectly understandable if Mr. Gorbachev wanted to drive a wedge between Great Britain and the United States. He would

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find it difficult but nevertheless, if I were him, that is exactly what I would try to do because it would cripple our defences.
In one respect I agree with the right hon. Member for Chesterfield. Gorbachev is rather like Lenin: he wants to convert the Soviet Union into a country with strong agricultural and industrial economies. He understands the dangers of a nuclear war, which would completely destroy his own country, and he wants to concentrate on spending money not on armaments but on developing his country. That is a laudable view. However, we should remember that that is what Lenin tried to do at the beginning but that his efforts were stamped upon when Stalin took power from Trotsky. As I said earlier, at the beginning Lenin imported American tractors and technicians to develop his country, but the process was stopped when Stalin came along.
Mr. Tony Banks: With great respect, the hon. Gentleman is almost old enough to remember this. While Lenin was trying to develop the Russian economy, this country was maintaining an economic strangulation of Russia. In many ways, we are responsible for what happened after Lenin. The hon. Gentleman must remember that. It is history.
Dr. Glyn: I cannot accept the hon. Gentleman's philosophy that we are responsible for what happens in Russia. I am sure that he would agree that there were other economic factors that stopped the Americans assisting Russia. They did so for a short time during Trotsky's era. Stalin stamped on the arrangements and the whole of the new economic policy was abandoned.
Mr. Banks: Lenin wanted Trotsky.
Dr. Glyn: Whether he wanted Trotsky or not, Stalin did not. That is what happened. It is historical fact.
Gorbachev obviously wants to get his country on its feet and his only way of doing that is to cut down on arms. However, I still admire the stand taken by the United States in its refusal to be pushed into a hasty agreement. Any agreement must be mutual and verifiable and the United States is right to hold back.
An agreement that did not include chemical and biological weapons would be of no value whatever because such weapons are now so sophisticated that they are capable of overcoming completely any conventional force. Without a nuclear deterrent—and all of us want to get rid of nuclear weapons—chemical and biological weapons are as great a danger. They can be hidden. Verification would be difficult as it is extremely difficult to trace such weapons with satellites. It can only be done by on-the-spot verification. They have to be physically inspected. Any arms agreement that we reach with the Soviet Union must be accompanied by verification.
Chernobyl represents a great lesson. It taught Russia the dangers of atomic warfare and gave the world a sharp shock. If Chernobyl, an industrial accident, had such effects, what on earth would happen if there was a military nuclear incident? Chernobyl has accelerated the desire of all countries to arrive at a reasonable solution to the nuclear threat.
We must maintain our defences—both nuclear and conventional—so that if we are challenged at any time
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we shall be capable of defending ourselves alone if necessary. At the same time, we must seek a real and verifiable agreement on all arms.
8.26 pm
Mr. John McAllion: I was surprised to hear the Secretary of State refer to the electorate having massively endorsed the Government's nuclear-centred defence policy. That is not a credible position for an intelligent person to take. As the right hon. Gentleman knows, only 42 per cent. of those who voted at the election voted for the Government's defence policies. Moreover, the remark is most surprising, coming as it does from a right hon. Member who represents a Scottish constituency. He knows that in Scotland more than 50 per cent. of those who voted, voted for parties who put forward clear non-nuclear defence policies. Indeed, the Secretary of State for Defence will remember that in his constituency he turned a seat where there was a massive Tory majority into a close marginal. He is not in a position to speak about massive electoral endorsements of anything.
To most people on this planet the control of the nuclear arms race would seem to be a very desirable objective, especially when we remember that we already have 60,000 nuclear weapons deployed by both sides of the East-West divide and that more weapons are being added to the massive stockpiles with every passing year.
It may be true that we have witnessed better relations between East and West in recent years. However, on the ground, the reality has been that each side has been making wide-ranging increases in its nuclear forces. That is very disquieting. Indeed, the leaders of the two super-powers have repeatedly acknowledged the dangers and the inherent political instability created by the growing stockpiles of nuclear weapons. For example, in the communiqúe issued at the beginning of the Geneva summit in 1985, the objectives were spelt out clearly by both the United States and the Soviet Union. The first was the prevention of an arms race in space. The second was the termination of the arms race on earth and the third was the strengthening of the strategic stability between the two super-powers by limiting and eventually eliminating existing stocks of nuclear weapons. Those were the goals which the super-powers set themselves at the beginning of 1985 and which they have pursued through the famous meeting in Reykjavik and beyond: to prevent the spread of nuclear weapons and to limit, and ultimately eliminate, them. Those are the aims which sensible world leaders have pursued and continue to pursue. Over the past few years the world leaders have continued to link the need to maintain security to the improvement of strategic stability between the super-powers and to link the improvement of strategic stability to the reduction and elimination of nuclear arms and the nuclear arms race.
It is therefore infinitely depressing to find the British Government's defence policy set out in terms which, far from decreasing dependence on nuclear weapons, would increase that dependence. Indeed, if carried to its logical conclusion, the Government's policy would lead to an ever-increasing proliferation of nuclear weapons around the world. While both the Soviet Union and the United States search for agreement on deep cuts in both missiles and warheads and look towards the ultimate goal of comprehensive nuclear disarmament, the British

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Government refuse to join them and continue to insist that nuclear weapons are essential for the achievement and maintenance of national security.
There are many ways in which the Government are failing the British people through their rigidly nuclear-centred approach to defence policy, but I shall concentrate on just a few.
First, the Government seek to distort an immensely complex debate for their own narrow political ends. The nuclear stand-off in today's world is essentially a bilateral one between East and West, the Warsaw pact and the North Atlantic Treaty Organisation. Equally, if nuclear disarmament is to be achieved it will be achieved on the basis of bilateral moves by both sides. No one really expects anything else. The question is where to place Britain's allegedly independent nuclear deterrent in that bilateral process.
The Government seem to want to have it both ways. At one moment our weapons are supposed to be fully integrated into NATO's nuclear weaponry as out contribution to its nuclear strategy and a component in NATO's deterrent stance against the Warsaw pact. The next moment, however, it is apparently something completely different because we are told that Britain's nuclear weapons are not to be counted in the bilateral process. The Prime Minister regards them as completely separate from NATO's nuclear strategy and says that it is vital to keep our independent nuclear deterrent no matter what is agreed between the super-powers. That is a strange position for any Government to adopt. Either our defence policy is based on membership of NATO or it is not. Either our weapons are our contribution to NATO's overall nuclear strategy or they are not. The Government seem to have two separate and distinct defence policies, one looking to membership of NATO as the best means of maintaining the security of our people, the other placing little or no faith in NATO and arguing for our own independent deterrent as an insurance against the day when that Alliance fails.
The Government's second policy is clearly nonsense. If and when the collective security of the West fails, there is no fall-back position for any individual nation within the Alliance. In this nuclear age, if collective security fails every nation will suffer. The Government are well aware of that, but they continue to use the independent nuclear deterrent argument because it suits their political purposes. For instance, it allows them entirely to mislead the British people about the option of a non-nuclear defence role for Britain within NATO. Such a role would not be equivalent to one-sided disarmament. That is effectively to argue for the abandonment of NATO as our basic defence posture. Many members of NATO, including Canada, already fulfil a non-nuclear role within the Alliance. Britain could do the same without in any way weakening NATO's general stance. If Britain joined Canada and the other non-nuclear states in NATO, the world would he that much safer, political stability between East and West that much steadier and the nuclear stand-off between East and West significantly less dangerous.
Ultimately, the Government's betrayal of the real security interests of the British people lies in their pursuit of policies which undermine our security despite the Government's boast that their policies are preserving the peace. Their claim that nuclear weapons have preserved the peace in Europe for the past 40 years is at least
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debatable. What is not debatable, but patently absurd, is their claim that nuclear weapons can continue to preserve peace in perpetuity, world without end.
Equally unviable is the Government's claim that as we cannot disinvent nuclear weapons we must learn to live with and, indeed, to love them. Taken seriously, that means that it is only a matter of time before nuclear war breaks out, whether it be by accident or design or due to the overwhelming pressures on political leaders in an infinitely complex world. If a sovereign state such as Britain can defend itself only by independently possessing and threatening to use nuclear weapons, every sovereign state must follow that course. That will mean an infinitely dangerous situation with nuclear proliferation throughout the world, including danger spots such as the Gulf, the Middle East and Afghanistan. What price world security if other nations follow the Government's line?
Conservative Members are fond of citing the appeasement of the 1930s to prove that we must ann now to prevent war later. As my right hon. Friend the Member for Chesterfield (Mr. Benn) pointed out, it was a Tory Government who were guilty of that appeasement in relation to Fascism. In any case, those who use that argument miss the real point. The analogy today is not with the period before the second world war but with the period before the first world war. Then, as now, Europe was divided into two armed and mutually hostile camps engaged in an escalating and, ultimately, dangerous arms race. Unlike then, however, we now have a nuclear arms race which threatens the very existence of our planet. We cannot allow that arms race to run its natural course towards the outbreak of another war because that war must be a nuclear war. Our priority must therefore be to wind down and eventually halt the nuclear arms race. That is only common sense and it is well understood by the vast majority of national leaders around the world. It is an enduring tragedy for this country that the British Government are one of the few exceptions. The nuclear objective that transfixes the Government makes us all less safe, more vulnerable and, ultimately, more poorly defended.
As a number of Opposition Members have said, the opportunity exists for a real wind-down of the nuclear arms race and a real reduction in the number of nuclear arms held by various states around the world. If the Government were truly serving the interests of the British people, they would do all in their power to ensure that that opportunity is not missed, but their conduct of defence policy suggests that they are doing their best to ensure that that opportunity will, indeed, be missed.
8.38 pm
Mr. Bill Walker: First, I welcome my hon. Friend the Member for Hove (Mr. Sainsbury)) to his new job at the Ministry of Defence. We are delighted to see him on the Treasury Bench.
I was interested by much of what the hon. Member for Dundee, East (Mr. McAllion) said. He suggested that my right hon. Friend the Secretary of State had no right to make the comments that he did. I remind the hon. Gentleman that the Labour party's defence policy was one reason why Labour lost the general election. That election was for membership of this House. The Labour party lost it and we won it. That is why the hon. Gentleman sits on the Opposition side and I on the Government side.

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The hon. Gentleman's analogy of the current position with that prior to the first world war is interesting. Many of us would not disagree that the forces opposing each other were of such a nature that, perhaps, war had to break out. However, perhaps he would now reflect on why only one continent on this planet has remained free from war since 1945, even though the forces have been ideologically opposed to each other, hated each other and often did not speak to each other. There is only one continent that has remained free from war for 40 years despite those factors, and that is western Europe. The reason for that is clear—it is that each side has deterred the other. Although we may argue about the detail, surely no one doubts that. Had that been the case in other parts of the world, it is possible that wars could have been avoided there also. [Interruption.] Hon. Members may find it amusing, but some of us fought in the wars and wished that a deterrent had been in place so that there could have been peace rather than war. We all want peace. The question is whether the Opposition's recipe—and I do not doubt their integrity and belief—could produce the same answers that have existed in western Europe for the past 40 years. That is the major doubt, and that is why the Opposition lost the election.
I remind the hon. Member for Dundee, East that the independent deterrent gives a second area of decision making. While the Soviets retain a nuclear capability, it is—and I want the House to note this—at least prudent for the United Kingdom also to do so. The lessons of history tell us that.
Mr. McAllion: The hon. Gentleman said that while the Soviet Union retained nuclear weapons it would be prudent for Britain to do so. Does he then suggest that all other independent Governments should retain nuclear weapons while the Soviet Union retains them?
Mr. Walker: That is not what I said. I remind the hon. Gentleman that we helped to invent the nuclear bomb and that, post-1945, a Labour Government decried that we should have that capability, and we have had it ever since. That is why it is prudent.
I am sorry that right hon. Member for Chesterfield (Mr. Benn) is not in his place. He said that more people in the world believed in Mr. Gorbachev than in President Reagan. I do not find that surprising. More than four fifths of the member states of the United Nations are not democracies. Therefore, it would be incredible if we claimed that the leaders of the mass of the world—and I phrase this carefully—were supportive of the United States. We must not expect them to be because their regimes are quite different from democracies. It is not in their interests for democracy to spread through their areas because that would threaten their regimes and their leaders. Therefore, although I do not disagree with the hon. Gentleman, I disagree on how he extrapolates the information. It is astonishing that Opposition Members should think that Conservative Members are not in favour of a reduction in nuclear weapons. We are. However, reductions must be properly balanced, and we support the way that that is being achieved by the United States in its negotiations.
I come now to an area in which I have a particular interest, and I declare that interest as I am an officer of the Royal Air Force Volunteer Reserve. I wish to speak
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mainly about the Royal Air Force and how it is affected by the defence White Paper and other matters. First, I shall deal with the issue of low-flying aircraft. Every hon. Member has, at some time or another, dealt with complaints about noisy, low-flying aircraft. The question often asked is why it is necessary. I want to place on record why I believe that it should continue. Flying low and fast is an essential part of RAF training. If pilots are to be effective in a hostile environment against an enemy equipped with modern, electronic and radar equipment and with surface-to-air missile and gun capability, the only way to survive is to avoid detection and evade the anti-aircraft missiles and shells. That calls for flying skills of a very high order. It will be too late to attempt to achieve those skills once hostilities have begun.
We must recognise that we have a limited capability, a limited number of expensive aircraft and a limited number of very expensively trained pilots. If we lose many of them in the first days of hostilities that will be bad for them and for the country as a whole. Of course, there is the additional deterrent value of making it clear to any potential enemy that RAF pilots are highly skilled, professionally trained and capable of surviving and carrying out their assigned tasks in a war.
Everyone in the country wants effective defence forces. Everyone recognises the need for regular and continuous low and fast flying training exercises. Therefore, I believe that the community view can be summed up as, "Yes, but not in my backyard, thank you very much". A great deal of nonsense is talked about the accident rate. It is important to put on record that last year was the best accident year for the RAF for a long time—although we would not think so from some of the publicity—and that this year appears to be equally as good. Those who remember the RAF's accident record when jet aircraft were first introduced must realise that the current accident record is tiny in comparison.
Mr. Jimmy Hood: Can the hon. Gentleman tell us the number of pilots killed in the low-flying exercises that he was praising earlier?
Mr. Walker: The hon. Gentleman has not been in the House long enough to know that when I arrived here I was strapped to a metal cage because I had hit the ground rather hard in one of Her Majesty's flying machines. Anyone who does that sort of work recognises the risk it involves. Indeed, there is risk when driving on our roads. Unfortunately, there will be accidents and people will be killed, but that does not deter people from driving on the roads. More importantly, it should not deter us from doing what is absolutely essential for our defence capability. The RAF pilots accept that. They are courageous, brave and skilled people and we should be proud of them. I certainly am.
Mr. Rogers: The figures for the deaths of RAF personnel can be found on page 46 of the Estimates. I am sure that the hon. Gentleman will accept that Opposition Members have paid great tribute to the skill and bravery of our young pilots. However, we feel that some of the exercises carried out at 100 ft and 500 mph do not allow for any skill element. Indeed, they are all one-off flights, and a bird strike, mechanical failure or temporary aberration of the pilot could mean that a very expensive piece of equipment is lost, that highly skilled pilots, who cost more than £3 million to train, are killed and that

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families are bereaved. All that the Opposition question is not whether the pilots should undergo low-flying training, but whether they should undergo it at such desperately low levels and high speeds. When I reply to the debate tomorrow I hope to develop that point further.
Mr. Walker: Obviously, the hon. Gentleman has made an attempt to study the matter. He will realise that the difference between survival and non-survival in a hostile operational environment is a capability to fly at heights of less than 100 ft. In a hostile environment, the capability of pilots and aircraft are at risk. Aircraft and pilots must be capable of operating effectively. There are limited areas in which aircraft can fly at 100 ft. The hon. Gentleman will know that the areas for low flying are clearly defined; that is to say, levels below 200 ft. It is essential that pilots are trained to fly at such levels, otherwise they will not survive in a hostile environment. The hon. Gentleman should realise that, for that reason, Argentine pilots were able to fly low and fast. That is the best example of why we must avoid the surface-to-air capability of a modern land force.
Much has been written and said about the Tornado. Recently, I saw a programme about it. Will my hon. Friend the Minister confirm that the radar problems of the ADV version of the Tornado have been overcome and that the aircraft will be able to execute its tasks? I believe that they are capable of doing so, but I should like to have it confirmed.
Recently, I read about proposals to change the RAF's role in helicopter support for the Army. There have been suggestions that there may be advantages in transferring such capability to the Army. On paper, that may look to be so, but I remind the House that the RAF pilots who fly helicopters do so after having been selected for pilot training. During their training, many were found to be more suitable to flying helicopters than fast jets. Consequently, if the Royal Air Force loses the ability to transfer its pilots, it could mean a large loss of skilled, competent pilots. If we find that we can train only for fast jet operations, I suggest that pilot training would substantially increase. In other words, we shall have to train many more pilots. There would be a higher rate of wastage and the nation would lose. There is no substantive case for taking the helicopter support role from the Royal Air Force. Any savings would be more than offset by the costs associated with the loss of pilots.
We have come to respect the high professional standards and courage of the crews of search and rescue helicopters. Many people in the Scottish Highlands, whom I represent, and many others around our coasts are thankful for being rescued, often in conditions which are right at the edge of helicopter operational capability. Any attempt to privatise such capability will put at risk the ability of the RAF to respond to its operational needs throughout the world. The real value to the Royal Air Force of search and rescue helicopters lies with trained crews who, by the very nature of their constant duties, are kept at a high standard of professional ability. In addition, I doubt whether any savings will be made. The RAF would still be required to provide the best facilities, and most certainly would be required to give back-up facilities to any privatised search and rescue helicopter capability. Such a transfer of capability would be a mistake. The people of Scotland would certainly not support it. Any
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consequent savings may be cosmetic, but the loss of aircrew in a constant state of operational readiness would be catastrophic during an international crisis.
I now refer to Tucano flying training. How far has the programme slipped? Does my hon. Friend know what effect it is having? What extra costs are involved in keeping Jet Provosts in service? I compliment the manufacturer of the Tucano. I have been critical of the Tucano, but during the recess I had an opportunity to visit the manufacturer. I was able to see the modifications that have been carried out—the new engine, the re-designed wing and the alterations to the front end of the aircraft, the undercarriage and the exhausts. All such modifications must have been expensive. Of course, as the Royal Air Force bought the aircraft at a fixed price, I imagine that the manufacturer is bearing the costs. The aircraft now looks like an effective trainer.
The men and women in our services are its greatest asset. They are supported by their spouses and families. Unless families are content with service life—in other words, unless their quarters and so on are maintained at a reasonable level—they can become unhappy, and that can affect morale. I should like an assurance that the modernisation and maintenance of married quarters are being given a high priority.
Reference has been made to territorials, auxiliaries and reserves. I agree that we must make greater attempts to ensure that employers grant time off for all those who serve their country. The role of reserves, territorials and auxiliary units—particularly the reserves and auxiliaries in the Royal Air Force—have been substantially increased by the Government. I should like to see that policy continue and more use made of reserves and auxiliaries. I should also like serious studies undertaken into finding a proper flying role for our auxiliaries. The Royal Air Force is about flying. If we wish to encourage young people to our territorial reserve commitment, we must have a greater commitment to flying. That is what brings people to the Royal Air Force; otherwise they would join the Army or the Navy.
The realistic way in future to live within defence budget constraints—I shall not talk about this at length; other hon. Members have spent some time on it—must be to make more effective use of reserves and auxiliaries. I should like to see comprehensive studies into ways to make more effective use of volunteers. There would be no shortage of them provided we properly present our package. If we put together a package that will encourage young men and women to serve in our reserves and auxiliaries, the Royal Air Force and the nation will benefit.
8.57 pm
Mr. D. E. Thomas: I do not agree with all the points raised by the hon. Member for Tayside, North (Mr. Walker), but I agree with him on the exceedingly important role of search and rescue services. I represent most of Snowdonia national park and have spent a lot of time in the hills and I know that we are always grateful for the contribution made by the rescue services.
I want to take up the challenge issued by the Secretary of State when he accused those of us who produced "unofficial amendments," as he described them, of not living in the real world. He almost found himself back in the real world. He was returned to the House by only a small majority. However, I am glad to see him in his place.

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I can assure him that the election campaign in Scotland and Wales revealed a firm rejection of his Government's defence policy. I suspect that the result in his constituency had much to do with his commitment to fill Holy Loch with sea-launched cruise missiles to fill the gap that he perceives will exist once a successful INF deal is concluded.
I do not seek to speak for my hon. Friend the Member for Moray (Mrs. Ewing) because she is quite capable of defending herself. However, as the joint defence spokesman for our group, I must say that what is set out in our amendment—regrettably there will not be an opportunity to vote on it—reflects the strongly held views of the Scottish National party and Plaid Cymru about a realistic defence policy. It strikes me that the people who are not living in the real world are the Government.
There are between 50,000 and 60,000 nuclear weapons in the world. The task must surely be to stabilise and reduce their number, to diminish the risks of their use and to move away from a nuclear-centred defence stance. However, the White Paper reveals a strengthening of that stance. It is a more nuclear-centred statement than we have seen in previous years even from the Government. Obviously it was designed as part of the Government's defence propaganda before the election. It shows a clear shift in the Government's attitude. Instead of nuclear weapons being advocated as a way of making up for the alleged imbalance of conventional forces, as has been said in previous years, between the Warsaw pact and the Soviet Union and NATO, the Government now propose them as if they were to be a permanent part of defence policy, as if they were the only guarantee of security.
As the right hon. Member for Blaenau Gwent (Mr. Foot) has pointed out, the paragraph of the White Paper which deals with that is full of literary marvels. Paragraph 114 argues from the position that the policy of so-called deterrence has kept the peace for 40 years. It goes on to argue as if what has happened during the past 40 years is likely to continue in the next 40 years. However, if we know anything of European history, we know that the cycle of change and disasters that have overtaken us in European history have led us into precisely those conflicts of war and conflagration that defence policy is supposed to avoid.
What is also unjustified in chapter 1 of the White Paper is what is described as Britain's major role in the NATO Alliance, stressing that Britain is the only European member to contribute to all three elements of NATO's triad of forces. Of course, that is not justified anywhere. As has been said, it is an historical accident in the development of nuclear weapons that Britain became a European power which had and which developed those weapons. No logical argument has been put forward in the White Paper or indeed in any of the Government's other propaganda documents for the continued nuclear role of Britain's forces.
In fact, in defending their policy the Government are unable to assess the real arguments that are deployed against those weapons. We have already heard, and I do not need to repeat, the argument about whether Trident is independent. The right hon. Member for Chesterfield (Mr. Benn) argued strongly that there has never been such a thing as an independent British nuclear deterrent.
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However, from the arguments put forward by those who defend the notion of deterrence, it is obvious that that notion is inherently unstable. As we have heard from the Secretary of State this afternoon, if there is an INF deal, the credibility of the deterrence must be enhanced. There is no such thing as a stability of deterrence, which is why the argument about keeping the peace for 40 years is flawed. For 40 years we have seen an escalation of an arms race on both sides—a concept of deterrence which is unstable because it costantly needs to be made more credible. At some stage in the process of arms escalation, there will come a time when, through accident or design, or the irrationality of political or military decisions, nuclear weapons will be used with results similar to those of the appalling accident at Chernobyl.
We are seeing not only a proliferation in countries, but one downwards to battlefield and tactical weapons, and a proliferation of smaller nuclear systems, with all the complications of the command and control of those weapons. As we see the concept of limited wars and the acceptance of strategies such as the United States air-land battle by NATO in a broader way, the opportunity for the use of nuclear weapons within Europe will be enhanced.
The White Paper is illogical in its attempts to deal with deterrence and the arguments in favour of maintaining nuclear weapons. It is equally implausible in its analysis of arms control negotiations. Part of the rhetoric of such documents is that they must describe non-stable systems—the nuclear weapons systems of East and West—as though they were stable, but they must also describe the arms control negotiations as though they were serious. Since 1979, there have been about 9,000 to 10,000 additional strategic warheads in the United States and Soviet arsenals. When one considers the deployments which are already planned, one sees that by the end of the decade the number of warheads will be almost double the number in 1980. We must consider the limited intermediate nuclear force negotiations in that context.
If the double zero option in the INF deal is agreed, NATO will still have about 4,000 nuclear warheads in or assigned to Europe, in addition to the several hundred weapons possessed by Britain and France. Some American and NATO military leaders have put about the notion that the INF talks are bound to lead Europe into the "valley of denuclearisation", but that falls far short of reality. Not only do we already have the strategic weapons, we have the commitment—which has not been clarified in detail—to fill the gap. The Ministry of Defence is obliged to tell us exactly how it plans to fill the gap, because it will have serious implications for the proliferation of nuclear weapons and the number of weapons in the United Kingdom. Will air-launched cruise missiles be based on B52s? Will sea-launched cruise missiles be allocated to Holy Loch and perhaps to the south of England at Plymouth? Will there be a further increase in the number of F111s based in the United Kingdom? The latter can be armed with cruise or other missiles or they can carry conventional bombs. Those aircraft are also involved in the low-flying training missions which destroy the lives of many people in large parts of Wales, Scotland and the mountainous areas of England. If the gap is filled by the B52s, the double zero option could lead to a doubling in the number of cruise missiles deployed in Britain.
We have already had an analysis of the section on the history of the Soviet Union. I would not give it a pass in a CSE examination in the core curriculum proposed by the

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Government. But what is even more distressing is what the White Paper does with the statistics on the so-called conventional balance in Europe. The Ministry of Defence must tell us why the International Institute for Strategic Studies data and the Ministry of Defence data come to such different conclusions about the balance of conventional forces in Europe. The technical data show clearly that the numbers counted by the Ministry and by the IISS are wholly different. The only conclusion that I can draw is that the Ministry wishes to maintain the myth of the Soviet threat, although it says in section 106 of the document:
"There is nothing to suggest that Soviet leaders have any desire for war in Europe."
But the statistics, especially in annexe A, figure 13, imply through miscalculations and through using a different basis from the IISS that the Soviet Union has a massive conventional superiority. It is part of the myth and exaggeration of escalation that perpetuates the cold war mentality and the justification for further deployments. I suspect that such sentiments are responsible for what we see in this document.
Our amendment, which regrettably will not be voted on, points to a different kind of future for Europe, a future that is not based upon escalation as a result of the Trident programme. It points to a Europe that is not structured upon differing cold war camps, but a Europe in which areas such as nuclear-free Wales and nuclear-free Scotland make a contribution to de-escalation throughout Europe, a Europe that extends from the West through central Europe to eastern Europe, including the Soviet Union. We are the people who understand the realities of European history. We are not encumbered with the ideological rhetoric of the Government. Our understanding of European history is that we live in a continent that has been racked by war because of the failure of European Governments to work towards true security.
We look to things such as the Stockholm agreement as a demonstration that it is possible for European peoples to agree as nation states about troop manoeuvres and conventional weapons and that that has led to security building. We believe that similar security building is possible in nuclear operations. However, that security will not emerge because of the lack of Government initiatives.
9.11 pm
Mr. Michael Jack: I recently moved into the constituency of Fylde. As I walk out of my front door I am struck by the considerable importance of defence aviation to my constituency. My house lies on the approach run to the British Aerospace military aircraft division at Warton. Daily, during the recess, I saw Tornados and other aeroplanes coming back from their test flights across the Irish sea.
During the recess I visited the plant at Warton not only to acquaint myself in some detail with what went on there, but to share with the management, the staff and the trade unions—I hope that that will please the Opposition—their concerns about the future of the European fighter aircraft project.
At the outset of my remarks I should like to pay tribute to my colleague in Lancashire, my hon. Friend the Member for South Ribble (Mr. Atkins). Sadly, because of his ministerial duties, he is unable to participate in this debate. However, for some time he has shouldered a considerable responsibility for arguing the case for those
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in the Preston area who make their living from aviation. I thank my hon. Friend for shouldering that burden and it is now a responsibility that I gladly accept.
May I also welcome to the Treasury Front Bench my right hon. Friend the Secretary of State for Defence. During the election campaign my right hon. Friend visited Lancashire and I was grateful to him for the positive commitment that he gave on the European fighter aircraft. He endorsed those remarks in interviews given during the Conservative party conference at Blackpool. I was delighted to hear that he also endorsed British Aerospace's excellent product work as a result of his recent acquaintance with the Tornado fighter.
I believe that the European fighter aircraft represents a key part in the development of our aviation strategy. In a few moments I will justify my belief in that project. I was delighted to see in the statement on the Defence Estimates, under the heading "Collaborative Projects" on page 47, table 8, that the European fighter aircraft was listed. I wish to deal with the element of collaboration because some doubt has been expressed regarding the future of the project because of difficulties with one of the principal partners—Germany.
I believe that paragraph 510 on page 46, detailing the question of collaboration and its benefits, must have been written as much from our belief in collaboration as that of our European partners. Paragraph 510 states:
"The impetus towards greater collaboration within Europe in particular comes from the conviction, shared by our partners, that a more cohesive European effort will strengthen the Alliance in a number of important ways: politically, by demonstrating our ability to work closely together; militarily, by reducing the inefficiency that comes from having different and incompatible versions of the same equipment on the battlefield; and industrially, by helping to produce a more competitive European industrial base."
If we and our European partners share that view, it is an incontrovertible case to justify the continuing development of the European fighter aircraft.
It is notable that the joint air chiefs of the four participating countries have already agreed the operational requirements of the aeroplane. At such an early stage in the project, that is a notable achievement. It commends the project to the partner Governments, which should have the courage to go ahead and build the aeroplane.
Recent developments in defence more than ever give strength to the argument that the European fighter aircraft should be built. The INF agreement shows that a much greater emphasis will now be put on the role of conventional weapons. If we are looking at developments in aviation — the development of high technology fighters and bombers that may present a threat to this country in future—we shall need aeroplanes such as the European fighter aircraft to combat such threats.
The European fighter aircraft is at the margins of technology. It contains developments in composite materials and avionics, and other engineering developments that are vital to the future of our own aviation industry. From my constituents' point of view it is also vital that the project goes ahead—6,500 jobs at the military aircraft division in Warton alone depend on it. Within the Preston area, some 16,500 jobs are dependent on the future of that project. As the orders for Tornado are completed, a gap of work will open out in the flow of materials through the factory at Warton. The European fighter aircraft must be built to fill that gap. With regard

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to its impact on the north-west economy, some £69 million of orders derive from British Aerospace. The loss of that would be incalculable. I referred to technical excellence and the maintenance of it by those who build the plane. Such work is vital if our aviation industry is to prosper.
I refer finally to export potential. It is clear to me that the European fighter aircraft must be built, if for no other reason than the £3,500 billion of business with Saudi Arabia, with the Tornado. A successful customer there will be looking for a replacement for that project in the years to come. Warton has demonstrated its ability to build quality aeroplanes and I believe that it can match the requirements of the European fighter aircraft project.
I should like Ministers to commit themselves to tackle some of the problems that are outstanding. There are difficulties in Germany. Although there were initially strong rumours that cuts in Germany's defence budget would overwhelm its ability to contribute to major defence projects, the fact that the budget was reduced by 142 million deutchmarks meant that it was possible for the Germans to continue their commitment to major projects. But there is concern in Germany about the development costs of the fighter. Going back to my quotation from the statement on the Defence Estimates on the subject of collaboration, I believe that it justifies the philosophical and practical reasons for the project and lends weight to reconsideration by the Germans.
I do not want to see brought before the House an argument or debate about the reasons why we should consider the F18. We in Europe can build an adequate fighter for the needs of the latter part of the 20th century and the early part of the 21st century. I should like the Secretary of State for Defence to give an assurance that he will raise the matters of concern with his German counterparts and try again to convince them of the need to continue with the European fighter aircraft project.
Finally, I remind the Government of some comments that were made in the defence debate this time last year. My hon. Friend the Member for Tayside, North (Mr. Walker) reminded the Government at that time that the F16 fighter, which was built in the same way as the experimental aircraft project, became one of the world's most successful fighters. If there is doubt among any of the partners, that comment alone should commend the project to them. My hon. Friend the Member for Hove (Mr. Sainsbury), speaking about the commitment to the European fighter aircraft project, said on 14 July:
"I can assure my hon. Friend that the Government are planning on the basis of the United Kingdom playing a full part in the EFA programme."—[Official Report, 14 July 1987; Vol. 101, c. 955.]
That reassuring remark will, I hope, be echoed in the concluding remarks from the Front Bench this evening.
I hope that the Government will confirm that there are sufficient resources in the Defence Estimates to finance further development work that is currently being funded by the companies which are building the European fighter aircraft. I hope that the Government will do all in their power to persuade the partners to go ahead with this exciting project, and that we make certain that we understand the commercial importance of the project. The EFA must be built.
9.21 pm
Mr. Sean Hughes: I wish to pay tribute to the hon. Member for Portsmouth, South (Mr. Martin), who made his maiden speech this evening. His is a constituency that I know well, having spent several of my schoolboy years there. I am sure the House will listen with interest to the speeches that he makes in the coming Session.
I shall begin by making a crushingly obvious statement: the Conservative party won the election in June, and the parties of opposition lost it. In view of that, perhaps we might be allowed, tonight and throughout the coming Parliament, to debate the policies of the Government, and not be sidetracked into the interesting hypotheses of what my right hon. Friend the Member for Llanelli (Mr. Davies) might have presented in our Defence Estimates this evening. Unfortunately, Conservative Members give the impression that they cannot conceive of being in error. My right hon. Friend the Member for Chesterfield (Mr. Benn), in a characteristic speech, said that we should all be prepared to admit to our own fallibility. I refer him to a comment in the foreword to the 1987–88 edition of "Jane's Fighting Ships". It states that the Under-Secretary of State for Defence Procurement apparently said in a television programme, "My Department never makes mistakes"—that from a Department that gave us Nimrod.
I listened with special interest to the Foreign Secretary's speech last week, in which he quoted Churchill from page 2 of the Defence Estimates. Churchill said:
"Be careful above all things not to let go of the atomic weapon until you are sure, and more than sure, that other means of preserving peace are in your hands."
My right hon. Friend the Member for Blaenau Gwent (Mr. Foot) and the hon. Member for Meirionnydd Nant Conwy (Mr. Thomas) referred to that. Apart from the fact that I am always suspicious of people who quote Churchill in defence White Papers as if they were quoting from the Sermon on the Mount, the quotation has been taken not so much out of context as out of time. Often, the fact that Ministers rely so heavily on this quotation, made in the intensity of the cold war 35 years ago, is a sign of their thought processess.
Nothing demonstrates that more than the potted history that is given in the White Paper, which my right hon. Friend the Member for Blaenau Gwent so rightly savaged. It is entitled, "70 Years On: A Country or a Cause?" For sheer banality, hollowness and insufficient bases, this potted history takes some beating. I am astonished that the Secretary of State can pen his name to what would be considered insufficiently researched material for inclusion in the Ladybird series of history books for younger readers.
I imagine that the 18 paragraphs in the first chapter of the Defence Estimates are supposed to give us the historical background to present-day defence policy. Presumably they provide the premise for the Government's thinking on defence. If this is the premise, it does not exactly inspire us about the Government's conclusions. The section reads more like gossip than history. It is full of platitudes and slogans and quite clearly the facts, such as they are, are used to fit the preconceptions.
I shall give the House a couple of examples. Paragraph 4 on page 4 discusses the Russian view of the world
"that security can only be achieved from a position of military strength."

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Is not that the thinking that is at the core of the Government's policy and has that not been true of all the powers, especially the Western powers, in the 19th and 20th centuries?
The Statement on the Defence Estimates talks about the extension of territory from the 16th to the 19th century. I suppose that Britain, France and Germany were all standing aside contemplating the heinous nature of imperialism. The implication is that only Russia was up to these dastardly tricks with a sevenfold expansion in three centuries. It is worth remembering that in 1870 one tenth of Africa was under European control and that by 1900 it was nine tenths. That was achieved in three decades, not three centuries.
Through the ages great powers have defined for themselves spheres of influence, epitomised not least by the Munroe doctrine. The penultimate sentence in paragraph 9, page 5, says:
"most people would profoundly disagree that national insecurity is a fair excuse for the curtailment of others' national and individual freedoms."
That comes a bit rich from the party of GCHQ. There are carefully selected quotations from what Lenin said in 1916, but no mention of how he developed his thinking in the 1920s. There is not even a mention of Stalin, the advocate of Socialism in one country who dominated the USSR for over a quarter of a century.
One particularly entertaining sentence speaks about
"the liberal democratic idea of harmony between states".
Who are the Government trying to kid? I would expect this sort of thing to come from the Kremlin. I thought that the Russians were the people who rewrote history and touched up paintings to make sure that certain people and certain things did not happen. This is the Government who have emphasised the importance of objective history teaching in our schools.
We have heard several times the assertion that the possession of nuclear arms in Europe has kept the peace over the last 40-odd years. The Secretary of State reaffirmed that in his speech. It is interesting to recall that exactly the same claim was made for the existence of the Common Market during the referendum on Britain's membership. I have never been impressed by this sort of argument. Even the defence White Paper concedes that it cannot be proved.
It reminds me of a chap in my constituency—who is no longer with us—who was convinced that all our economic problems in the late 1970s were the direct result of decimalisation. Forget about the Arab-Israeli war and the subsequent explosion in oil prices: I could never convince him that just because one event precedes a trend there is not necessarily a causal link. The case might just as well be made that it is no mere coincidence that peace in Europe at the end of world war 2 coincided with the introduction of the biro. I cannot prove it and there may be other factors, but in terms of proof it is as valid a statement as the other one.
One of the problems about these debates is the difficulty that we have in arriving at an accurate assessment of the military balance between NATO and the Warsaw pact countries. As my hon. Friend the Member for Sheffield, Attercliffe (Mr. Duffy) said last year in the debate on the Defence Estimates:
"Comparing quantitative factors, such as manpower and equipment, is relatively straightforward, but even that exercise can be unexpectedly difficult—a fact which may
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explain why no new NATO-Warsaw pact force comparisons have been published by NATO since 1984." — [Official Report, 30 June 1986; Vol. 100, c.785.]
Annex A of the defence White Paper confidently tells us that by any objective measure the superiority of Warsaw pact land and air forces is substantial.
Fundamental to NATO's strategy of flexible response is the assumption that the Soviet Union has massive conventional superiority. In most NATO scenarios, Warsaw pact forces would crash through the inner German border and overwhelm the numerically inferior NATO forces. Nothing changes. It is the same Russian steamroller theory of the 19th and early 20th century. So NATO would have to resort to the first use of battlefield nuclear weapons.
Some defence analysts have challenged the notion of Soviet superiority and the way in which NATO compiles its statistics. Many assessments of NATO and Warsaw pact forces rely on distorted figures, as has been pointed out. The last time NATO published an assessment of the conventional balance was, as I have said, in 1984. However, each year the International Institute for Strategic Studies has stated:
"our conclusion remains that the conventional military balance is still such as to make general military aggression a highly risky undertaking for either side."
Ultimately, that is a self-defeating process, because if our assessments are hyped up too much, negotiators must be tempted to take us at our word.
Time and again in the White Paper the Government assert that the United Kingdom is the only European member of NATO which contributes to all three NATO commands—Europe, the Atlantic and the Channel—through the provision of nuclear forces, the defence of the United Kingdom itself, land and air forces based in Europe and our maritime forces. It is the Opposition's contention that we cannot sustain such a grand sweep of commitments as are presently resourced. The simple fact is that, with finite resources, something will have to give.
Of course, the Minister will reply with the same words as we have heard in previous debates and in the way that has been hinted at this evening, by saying that we should not look just at the amounts of money voted by the House but at the qualitative aspect of the money. I suggest that the Minister and Conservative Members should tell that to the Royal Marines. They urgently need new amphibious vessels and aviation support ships for the reinforcement of Norway. In the event of hostilities, the Norwegians would depend, during the most critical period, on the arrival of the United Kingdom-Netherlands amphibious force. To get such a large force ashore requires purpose-built amphibious vessels and adequate aviation support vessels. Yet the Royal Marines have no aviation support ship now that Bulwark and Hermes have been withdrawn and they have only Fearless and Intrepid for the amphibious role. Fearless and Intrepid are old and expensive both in maintenance and manpower and they require crews of about 600 from a Navy that has already been drained of personnel.
Our Air Force is in an appalling state. Northern air space is watched over by five antique Shackleton aircraft with 1941 vintage radar. Most of our fighter aircraft are old and the new ones will probably not even be able to find their targets because their radar only half works. On the central front, the Royal Air Force flies what has been referred to unkindly as the oldest helicopter fleet in the world.

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The strength of the Royal Navy is less than the level planned by Sir John Nott when he was Secretary of State for Defence in 1981. The Navy now has fewer personnel than Boots the Chemists. The Navy's task has been increased with expensive out-of-area commitments to the Falklands and the Gulf, to which no reference was made by the Secretary of State today. Not only do we lack frigates, destroyers and conventional submarines for our vital NATO task in the eastern Atlantic but many of those we have are obsolete, expensive in maintenance and manpower and lacking in effective armament.
The Army has been crippled by shortages of spares and ammunition and restrictions on fuel. As yet the Army has no purpose-built anti-tank helicopters. In Germany it is short of modern tanks; the Chieftain tank gives off so much smoke that it can be seen for miles. Attempts to procure new self-propelled artillery for the Army ended in disaster, with a bill for the taxpayer of £88 million.
Morale in all three services has been seriously damaged. In the Army, the cut in local overseas allowance for servicemen who are based in Germany, to save £17 million, together with training restrictions on fuel and ammunition, have had a seriously detrimental effect on morale. In a letter to The Times on 5 March, Viscount Morpeth said:
"'Salami Slicing' cuts are making it increasingly difficult for Commanders at all levels to train their formations and units to the highest standard required to maintain a credible deterrence."
He continued:
"Cuts in overseas allowances are demoralising and bear heavily on junior NCOs and their families who are least able to bear them."
The outflow of skilled personnel will increase by about 25 per cent. this year, which reflects the widespread dissatisfaction with the current state of affairs. The RAF is short of skilled engineers and mechanics and is losing pilots faster than it can train them. As has already been said, it costs £3 million to train a fast jet pilot and £1million to train navigators. Yet it seems that many pilots are leaving the RAF to go abroad, or are joining civil airline companies. That is largely due to the penny-pinching cuts in fuel and training restrictions, because 70 per cent. of RAF married quarters are substandard and because they are fed up with making do with obsolete equipment.
Of necessity, we have had to cut short our summing-up speeches. But when the Foreign Secretary and others have quoted Churchill's words about having other means of preserving the peace before giving up the atomic weapon, some of us have gained the impression that the present Government do not believe that there are, or ever will be, means of preserving the peace other than by the nuclear weapon. That point was emphasised in a thoughtful speech by my hon. Friend the Member for Dundee, East (Mr. McAllion). The Government do not seem to understand the inherent dangers of a policy that Secretary of State for War, Henry Stimson, once described as
"wearing this weapon rather ostentatiously on our hip."
The saddest aspect of the defence debate in recent years—perhaps it has always been the case—is that it has degenerated on the margin to accusations of battle lust or defeatism. The reality of the matter is that we are talking about the most effective means of defending our country, while at the same time seeking to foster an atmosphere that
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avoids the recourse to arms. It is in that spirit that I commend to the House the amendment in the name of my right hon. Friend the Leader of the Opposition.
9.37 pm
The Parliamentary Under-Secretary of State for Defence Procurement (Mr. Tim Sainsbury): It is about four and a half years since I spoke in a debate, other duties having kept me silent except for contributing occasionally those valuable and usually widely welcomed suggestions that the House might adjourn or that a Question be put. I am glad to end that period of silence by winding up on the first day of this important debate. I am glad to follow the hon. Member for Knowsley, South (Mr. Hughes) who, like me, has recently escaped from the silent service, or perhaps in the case of Opposition Whips the not-so-silent service. I congratulate the hon. Gentleman on his entertaining history lesson. It was a great deal more entertaining, and I hope rather more accurate, than his subsequent remarks about the defence budget.
I am particularly glad to be able to congratulate my hon. Friend the Member for Portsmouth, South (Mr. Martin) on an excellent maiden speech. He demonstrated, as I would have expected after spending a most rewarding day in his constituency in early June, a knowledge and concern for his constituents and for their interests and environment.
We have had a most interesting first day on this important debate, although on occasions it seemed that it was more like a history discussion or seminar than a defence debate. A number of important points have been raised by right hon. and hon. Members to which I should like to respond. However, in view of the limitation on time, I intend in general to leave those points which are the particular responsibility of my hon. Friends the Minister of State for the Armed Forces and the Parliamentary Under-Secretary of State for the Armed Forces to them for tomorrow when they hope, indeed expect, to catch your eye, Mr. Speaker. Examples are the arguments expressed by the right hon. Member for Llanelli (Mr. Davies) about the Armilla patrol and by my hon. Friend the Member for Tayside, North (Mr. Walker) and others about low flying.
Before dealing with specific points, I should like to say something about our general approach to defence procurement, which is my particular responsibility. Our objective is clear. It is to obtain the best value for money for every pound of taxpayers' money which we spend.
Value for money is a concept which we have consistently highlighted. It was important in 1983, when we outlined our approach to it in an open Government document issued by my right hon. Friend the Member for Chertsey and Walton (Sir G. Pattie), and it remains so today. It sounds simple—and, I hope, sensible—to the House but I need to emphasise that the quest for value for money requires us to take account of more than just price. It is therefore more complex than a simple matter of comparing the prices of indentical branded products in, for example, supermarkets.
First—and most important and obvious—equipment must be suitable for the required task, but there are other factors that must be considered. They include a judgment on the risk of failure in technical development. Much, indeed most, of what we procure is not ready-made, so we have to balance the value of using the most up-to-date,

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state of the art, technology with avoiding over-ambitious, or unattainable targets which experience shows can lead to major difficulties.
We need to make an assessment of the in-service date that we require and have regard to the date that we can reasonably expect to achieve.
Usually we need to take account of the capacity of the equipment to be improved during its life to meet changing threats or new technologies. In today's world that is particularly important as enhancement and improvement programmes can be the most cost effective way of meeting new threats. We always need to take account of reliability, maintainability, spares and manpower requirements, which all contribute to the cost-in-use of the equipment.
In a sense all these factors make up the quality of a product, and the drive for value for money is concerned with both quality and price. The House will be aware that it is nearly always easier to identify the objective than it is to set out the methods of attaining that objective. In my national service days one always first stated clearly the objective and then, usually less clearly, how one would succeed. One always had to say, "We will take that hill", not, "We will try to take that hill."
There are a number of steps which we have taken but the importance of one in particular will be recognised by right hon. and hon. Members from the experience of some of our less successful purchases in the past. We no longer enter into cost-plus contracts except in the very small number of cases where we cannot define the necessary work tightly enough in advance to use other pricing methods. Instead, as hon. Members will know, we have introduced a substantial degree of competition into areas which previously suffered from the inefficiencies that flow from negotiating with only one supplier. It is one of the chief ways in which we have improved our methods of procurement. I need not dwell upon the financial benefits of competition, but we have achieved considerable savings in that way. The White Paper lists convincing examples.
Mr. Harry Cohen: I am interested in the points which the hon. Gentleman takes into account in considering value for money. Will he comment on Marconi, which has been accused of making excessive profits on Ministry of Defence contracts and of not paying royalties to Her Majesty's Government?
Mr. Sainsbury: It would be wrong if I commented at length. Ministry of Defence police, on the instructions of the Director of Public Prosecutions, made what has been called a raid on the Marconi factory. That is now a matter for the Law Officers rather than for me.
Mr. O'Neill: The Secretary of State for Defence is responsible for the actions of Ministry of Defence police and they are responsible to him. The hon. Gentleman cannot get out of this problem as simply as he is trying to do. The House is entitled to know why between 30 and 50 of these men, using crowbars, raided the premises in Portsmouth at the weekend.
Mr. Sainsbury: I know that the Labour party has expressed a desire to put the police under the political control of local authorities.
Mr. O'Neill: That is not true. It is unfair.
Mr. Sainsbury: The Ministry of Defence police, like a county police force, are not under the operational control
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of the Secretary of State, any more than the county police force is under the operational control of the police committee of a county.
Mr. Rogers: Will the hon. Gentleman give way further on that point?
Mr. Sainsbury: I hope that the hon. Gentleman will let me explain this point. It is clear that, in carrying out their operations, the Ministry of Defence police are not under the direction of the Secretary of State. As I explained to the hon. Member for Leyton (Mr. Cohen), in this case, the Ministry of Defence police were under the direction of the Director of Public Prosecutions. The action is now a matter for the Law Officers. I believe that I am right in saying that a question on that matter has been tabled for written answer to morrow by my right hon. and learned Friend the Attorney-General.
Mr. O'Neill: I want to get the record straight. During the passage of the Ministry of Defence Police Bill—an extremely amicable process; some might say too amicable—we dealt thoroughly with the business. There was no party rancour and it was a constructive process. We did not need the type of flippant, inaccurate remarks which the hon. Gentleman has made—[Interruption.] In this case, it was not fully justified. We know the relationship between the Secretary of State and the police committee. But in this case there was a major exercise. Had it not been for a newspaper disclosure no one would have known about it. We would not have been aware that inquiries had been going on for some 18 months. They were not the responsibility of the Director of Public Prosecutions at the outset. I imagine that they emanated from the Secretary of State for Defence or his predecessor.
Mr. Sainsbury: I am afraid that the hon. Gentleman has not listened to what I said about the operational control of police forces, whether it is the Ministry of Defence police force or a county police force. The latter is answerable for some matters, but not its operational control, to a local authority police committee. As I said, some Labour party members sought to get that operational control into the hands of local authority committees. But we should not spend too much time on this point because many other matters have been raised.
To increase our access to competition, we have broadened the supplier base and thus opened up new sources of supply. We have brought new companies into Ministry of Defence business through, among other things, a successful small firms initiative and through the emphasis we have put on competitive sub-contracting by our prime contractors. In April, we achieved our aim of bringing Royal Ordnance fully into the private sector, when it was bought by British Aerospace. It has now taken its place in the competitive defence market.
The wider the spread of information, the better a market works. We have, therefore, taken a number of steps to improve the flow of information about defence work. We now have a fortnightly "MOD Contracts Bulletin" and we arrange the circulation of staff targets and requirements in draft. The three systems controllerates annually make presentations to industry to help to keep industry better informed, so that it can take full advantage of the business which the MOD has to offer.
However, competition is only part of a broadly-based strategy aimed at achieving better value for money. Other

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initiatives include a revision of our practices on the interim financing of contracts. In this our objective is to give companies a greater incentive for timely and satisfactory performance by linking interim payments more closely to achievements.
We seek to allow industry more scope to produce ideas and innovations that will let our Armed Forces exploit new technology fully. The cardinal points specification, which allows suppliers to suggest their own way of meeting the requirement, is one means of giving companies the opportunity to use their knowledge and skills. As long as the Ministry of Defence retains the technical capability to be an intelligent customer and enters into an open exchange of ideas, we should benefit from this approach.
The procurement of modern defence equipment can be a highly complex business. We are making important improvements in the efficiency with which we carry it out. Against the background of our more effective and businesslike approach let me—in the short time left to me—deal with some points which hon. Members have raised in this debate.
The right hon. Member for Llanelli returned to his familiar theme when he said that the cost of Trident would preclude other expenditure on new equipment. As my right hon. Friend the Secretary of State has said on many occasions—he said it again today—that is simply not so.
My hon. Friend the Member for Hampshire, East (Mr. Mates) reminded us of the findings of the Select Committee on Defence on years of increased spending in real terms. Of course, had we not increased spending above the inadequate level that we inherited in 1979 we would have problems now. However, we now spend a quarter as much again on equipment for every single trained service man in real terms as we spent in the late 1970s.
The right hon. Member for Llanelli and his hon. Friend the Member for Knowsley, South asked about amphibious shipping. The right hon. Gentleman seems to have forgotten that my right hon. Friend the Secretary of State made it clear in December last year that the Government had decided to retain an amphibious capability in the longer term. We have let contracts for design studies both into extending the lives of the existing ships Fearless and Intrepid and into replacing them with new-build vessels. The timescale for the reports will give us ample time to decide which option to choose for the replacement of these important ships.
My right hon. Friend the Member for Chertsey and Walton made some important comments on research and development. He apologised to me for the fact that he cannot be in his place now. I assure him that I have carefully noted his remarks, especially those on the value of collaboration with our European allies. We, like them, attach considerable importance to the matter and much is being done under the auspices of the independent European programme group. Indeed, collaborative research was a key theme in the revitalisation of that group three years ago and the need was reiterated when IEPG defence Ministers met last June. To date, some 20 collaborative technology programmes have been initiated including two on gallium arsenide which my right hon. Friend the Member for Chertsey and Walton mentioned. Attention is now focused on putting this important work
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on to a systematic basis by identifying the key areas of advanced technology on which the European nations should work together.
I was glad to hear the comments of my hon. Friend the Member for Tayside, North on the Tucano. There is a few months' slippage on deliveries, but Short Bros. expect to recover the slippage later in the programme. My hon. Friend also commented on the Foxhunter radar for Tornado aircraft. The equipment does not yet meet the full requirements of the RAF and the Ministry is at present negotiating with the supplier, GEC, towards securing a firm price contract for the satisfactory completion of the programme. Meanwhile, radars to an agreed interim standard have already been delivered and are in service.
My hon. Friend the Member for Fylde (Mr. Jack) spoke eloquently on behalf of his constituents about the European fighter aircraft. He referred to his interest in the matter and the support that he receives on it from our hon. Friend the Member for South Ribble (Mr. Atkins). Like all major equipment projects, the EFA programme is being conducted on a stage by stage basis, as is only sensible. The project definition has been successfully completed and we are now in a definition refinement and risk reduction phase, with activities aimed at stabilising the design of the aircraft and identifying high-risk activities.
Parallel negotiations on commercial issues are progressing between the prime contractors and NEFMA—the NATO European Fighter Management Agency, which is the international management agency. Action is in hand to secure agreement from the individual national authorities to launch development. The United Kingdom aims to have completed that process by the end of the year and, subject to a satisfactory conclusion, we expect to begin development work early in 1988.
The right hon. Member for Blaenau Gwent (Mr. Foot) spoke with his usual eloquence, but it was not clear to me—I do not know whether it was clear to anyone else—whether he supported the official Opposition amendment or the unofficial one. I think that his speech leant slightly towards the unofficial one. The right hon. Member for Chesterfield (Mr. Benn) astonished many hon. Members—on both sides, I suspect—with his comments on that amendment and explained why he would like to see what I believe is described as a non-aligned defence and foreign policy, although at times it sounded more like a Warsaw pact-aligned foreign policy. As I believe that the economic policies of the right hon. Gentleman's wing of the Opposition would rapidly reduce the United Kingdom to Third world status, a non-aligned foreign policy might go well with that.
Mr. Nicholas Bennett: Does my hon. Friend agree that the amendment of the right hon. Member for Chesterfield (Mr. Benn) is probably a more authentic expression of the voice of the present Labour party than the official viewpoint? Would it not be nice if the official spokesman would tell us whether the official view is still unilateralist or whether it is moving away from that position?
Mr. Sainsbury: There is some difficulty in determining the defence policy of the official Opposition as I believe that officially they do not have a policy and it is open to review. No doubt we shall shortly find out whether the view of the right hon. Member for Chesterfield or some alternative is to prevail. We await with interest the outcome of that review.

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My hon. Friend the Member for Windsor and Maidenhead (Dr. Glyn) referred to merchant shipping. Under prerogative powers, the Government can requisition ships on dependent territory as well as United Kingdom registers. Emergency legislation would enable the Government to requisition ships on foreign registers if beneficially owned by British operators. We continue to monitor closely the availablility of merchant shipping to support Her Majesty's forces in time of war. Despite the decline of the British merchant fleet, we are confident that defence needs can still be met.
A number of other points were raised, and I apologise if time does not allow me to answer all of them. My hon. Friend the Member for Bristol, East (Mr. Sayeed), in an intervention, expressed concern about the CACS4 project. Command and control systems for modern warships are very complex. They are made more difficult to develop by the fact that the weapons systems which the command system has to integrate are often still in development. Thus, for example, in a number of cases, we do not have a complete interface specification for the type 23, nor have we been able to model some aspects of the system fully. Nevertheless, there is no doubt that we have defined the requirement much better than in any previous case and this underpins the procurement stategy that we have adopted. In seeking to control time, cost and performance to meet the Navy's needs we decided to exploit new technologies such as distributed processing, the ADA language and advanced displays. It was for this reason that we needed a new start, although we had already spent some £30 million—not the much larger figure that my hon. Friend mentioned — on the previously unsatisfactory CACS4.
When I spoke earlier about the initiatives that we have taken to achieve more efficient procurement, I stressed the
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advantages to the Ministry of lower costs and more timely completion, but it is important to point out the benefits which our policies are having in fostering efficiency in industry, stimulating new ideas and promoting the full utilisation of resources. We all want to see British industry successful in world markets and competition is important not just because it contributes to keenness in pricing but because it stimulates innovation and enterprise, and the encouragement of new ideas for the solution of defence problems. Furthermore, the more efficient our defence industries are, the greater the opportunity they have to increase their exports and generate more jobs in the United Kingdom. With this in mind we now give proper prominence to export potential when we take decisions on procurement. We consider ways of adjusting our requirement to suit the needs of foreign customers as well as those of our armed forces so as to improve the marketability of our industries' products. Moreover, our policy of specifying equipment by the performance that we require of it—the cardinal points specification—rather than by attempting to design it ourselves gives companies greater scope to propose to us equipment with foreign sales potential.
I believe that the changes we have made, and further ones that are still in the pipeline, are a real contribution to the health of the British defence industry and to effective procurement. We know that handling the procurement budget is a great responsibility, not merely because it involves some £8·5 billion of taxpayers' money a year, but because the effectiveness of the nation's fighting forces depends upon it. In view of that, I believe that our achievements will be seen as valuable — —
It being Ten o'clock, the debate stood adjourned.
Debate to be resumed tomorrow.

PETITION

  Kidney Treatment (Birmingham)
  10 pm
  Mr. Denis Howell: I wish to present to the House a humble petition from the kidney and cancer patients of the west midlands and others, who wish to draw our attention to the parlous state of kidney treatment in Birmingham, especially at the Queen Elizabeth hospital, because the appropriate authorities ordered that 100 patients on the free dialysis list should not be treated before April 1988. Consequently, considerable danger to their lives may follow. It also calls attention to the inequalities of funding between regions, which has helped to bring that about.
  The petition deplores, as I do, the fact that the brilliant consultants who are treating those patients have been instructed not to do so before April 1988. They have been told that they will face disciplinary action if they continue to save lives in that way. It also draws attention to the fact that, contrary to statute and regulation in the National Health Service, the Central Birmingham community health council was not consulted, as is required, before the closures took place. Consequently the public and the patients, especially the kidney and cancer patients, did not have their views represented in the discussions.
  The petitioners, the kidney and cancer patients of the west midlands and others, pray
  that your honourable House: — Appoint a Select Committee or ask the Social Services committee to report urgently:—

  i)On the inequalities of provision for cancer and kidney patients in different parts of the United Kingdom and how this can be improved.

  ii)On why there was a 39 per cent. cut in cancer treatments at the Queen Elizabeth hospital when 10 per cent. of those on the waiting list were already dying from cancer "which could have been checked if treated earlier".

  iii)On why the Queen Elizabeth's Kidney Unit was underfunded below the DHSS's minimum target or patients' needs.

  iv)On why the Community Health Council was not properly consulted on these cuts and the need to improve the CHC Regulations to prevent lack of consultation.

  And your Petitioners, as in duty bound, will ever pray.
  To lie upon the Table.

General Practice (Training)
Motion made, and Question proposed, That this House do now adjourn. — [Mr. Lennox-Boyd.]
10.3 pm
Mr. Michael Colvin: I wish to raise the problems of the funding of general practice training for medical students. We all accept that primary health care is the foundation of the National Health Service, yet it is the one aspect that we need to take more seriously when medical students enter their clinical courses. It is an issue with which I came face to face when visiting the Aldermoor health centre on the edge of my constituency last summer. I wish to thank the head of that facility, Professor John Bain, for having sparked off the inquiry that led me to ask parliamentary questions on this subject and also to introduce this debate.
Everyone knows that there have been remarkable technical advances in medical care during the past three decades, and more can be expected. At the same time, there has been a matching growth in awareness of the importance of the social and psychological implications of being ill. General practice in this country must respond to both developments. Teaching medical undergraduates about medicine in the setting of the family and community and about how patients should be most sympathetically and effectively cared for outside the hospital is a special responsibility of all departments of general practice which have been created in the 31 medical schools in this country.
Such new departments face important problems. Most are understaffed and all are under-resourced. They practise, teach and research a discipline which attracts high public demand but which does not enjoy the drama of acute hospital services to catch the public eye or perhaps the public purse. Their teaching is necessarily based on small groups and clinical experience on one-doctor to one-student attachments. We accept that such methods are expensive of the time which would otherwise be given to patient care.
The shortage of university funding also puts pressure on medical school budgets. Although NHS funding may be well ahead of the rate of inflation, it is not ahead of public wants and expectations, and the ability of the NHS to supplement the shortfall in medical school budgets has been exhausted. One good way to guard against the misuse of high cost specialist services in the NHS is to promote their more sensitive use through more teaching of medicine in the setting of general practice, but this comes at a time when the NHS and medical schools are finding it difficult to fund this new and major academic discipline.
I shall say a little about the background to the debate. Just over a year ago, the Mackenzie report, which is entitled "General Practice in Medical Schools of the United Kingdom", described the achievements of the departments of general practice in the years since the first chair was established in the United Kingdom. Indeed, the first chair anywhere in the world was established in Edinburgh in 1963. The report also described the problems that are faced by the discipline in the immediate period ahead, and referred to the need for simple and relatively inexpensive measures to be taken to allow proper growth to take place.
I take this opportunity to pay tribute to the work of Professor John Howie, head of the department of general practice at Edinburgh university. As one of the main

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architects of the Mackenzie report, he is a leading campaigner for the implementation of its recommendations.
The interdependence of the links between the DHSS and the DES in the funding of medical education is well known. The DHSS contribution to undergraduate education, which is required under section 51 of the National Health Service Act 1977 for England and Wales and section 47 of the parallel 1978 Scottish Act, is recognised, or perhaps rationalised, in what is known as SIFT, the service increment for teaching element in the teaching hospital funding, and ACT, the additional for clinical teaching in Scotland.
It is difficult to quantify how much money this involves and what proportions represent the tertiary health care service, and the teaching and research functions of teaching hospitals, but the total sum involved is now between £20,000 and £30,000 per clinical student year, which, for 4,000 students in each of three clinical years, represents between £240 million and £360 million annually.
Alas, by a series of mischances—mainly historical—departments of general practice do not benefit from the notional budget, although their present and potential contribution to medical practice, medical thinking and medical education is considerable. Their need for service increment is as great as that of any of the hospital components of medical education. Their request for new investment to correct that anomaly is modest — £4 million a year. That is only a little more than 1 per cent. of the NHS contribution to teaching research in hospital specialties.
That raises three questions: first, is the cause a good one and does it attract widespread support; secondly, is it affordable and will it create benefit; thirdly, is there a mechanism for meeting the request or, if not, can one be found, and found quickly? On the first question, there seems no doubt that the cause of providing proper resources to allow properly supported departments of general practice to make a proper contribution to medical school and medical education is a good one. In the Green Paper on the future development of primary health care, Cmnd. 9771, the Government stated:
"However, the undergraduate course content varies widely between medical schools, and in some general practice still forms only a relatively small part of the curriculum. There is scope for greater emphasis on the role of primary care and its interface with the hospital and specialist services. This would benefit not only those who then decide to seek entry to a general practice vocational training scheme, but also those students wishing to pursue a career in a hospital speciality since they would carry with them a greater understanding of the central role primary health care plays in the health of the nation."
No one argued with that during the consultation period on the Green Paper. When the Social Services Select Committee discussed it during the 1986–87 Session and published its report entitled "Primary Health Care", it specifically requested investment in that area. Paragraph 25 states:
"The case for introducing all undergraduates to primary health care is surely overwhelming and we suggest that University Departments of General Practice should be expanded to become Departments of Primary Health Care, not only to allow future general practitioners to be introduced at an early stage to medicine in the community but, perhaps more importantly, to introduce doctors who will spend their careers in hospital to an area of health care responsible for the
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majority of episodes of illness and which, to be successful, must integrate closely with the secondary care provided in hospital."
Furthermore, the education sub-committee of the General Medical Council has now joined in calling for proper investment, which it sees as an essential prerequisite to the basic medical education of the nation's future doctors. The responses to the Green Paper from the GMSC and the Royal College of General Practitioners, which are sometimes seen as representing the "political" and "educational" wings of general practice, are also agreed that the case presented in the Mackenzie report needs to be met urgently. The medical sub-committees of the Committee of Vice-Chancellors and Principals of the Universities of the United Kingdom and the University Grants Committee have been equally wholehearted in their support.
Only today I received a letter from the British Medical Association, which sent me a copy of the resolution that was passed by the Conference of Medical Academic Representatives in 1987, which states:
"That this Conference supports the Mackenzie report and is disturbed by the low level of government funding which is available to academic departments of general practice."
Hearts and minds seem to have been won across a remarkable and probably unique width of political, medical and educational opinion.
What about the cost? Of course, the £4 million for which the departments of general practice are asking is either a lot of money or not much money, depending on how it is viewed. Compared with the £1·5 billion that was the cost of the general practice prescriptions issued in England in 1985–86, or with the sum of about £10 billion that was spent on the acute hospital services that are used when patients are referred to hospital for investigation and treatment, the sum is negligible. However, for hospital doctors and future general practitioners, attitudes to the prescribing of drugs, the investigation of patients and the use of hospital services are learnt early in medical training. A more broadly based early undergraduate teaching with greater emphasis on the role of good general practice will produce a more balanced use of services, which will be better for the patient and less expensive for the nation. The investment of £4 million, representing 1 p in £50 of NHS resourcing, will be recouped many times over. It is good value for money.
On the mechanism, I am aware that active discussions are in hand involving, among others, representatives of the heads of departments of general practice and senior officials at the DHSS. Those discussions are mentioned in the recent GMC report. But similar discussions have fallen in the past because of legal advice to the DHSS that no mechanism existed to allow a payment giving the same benefits as SIFT to be paid by the NHS to ensure adequate base line funding of departments of general practice.
The purposes of the debate are, first, to hear confirmed the Government's acceptance of the merit of the case being argued by departments of general practice; secondly, to hear from the Government that they accept the need to allocate an annual figure equivalent to £4 million at current prices to be paid through DHSS channels; and, thirdly, to ask whether a mechanism has been found to allow such funds to be administered, or whether such legislation is needed and, if so, when it can be expected. To work equitably and efficiently, the mechanism will need to reflect medical student numbers and to be available through the regional health authority budgets, or their

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equivalents in Scotland, where our 31 medical schools are sited. The distribution will need to reflect the different legal arrangements which apply and will thus need to be apportioned on the advice of the head of the department of general practice in each medical school.
My hon. Friend the Minister has a reputation for getting things done, so I should be grateful if she would reassure the House of effective progress on all three fronts. May we be told how soon the discussions, which in one form or another have occupied the time of three Administrations, can be satisfactorily completed? In short, will the DHSS and the Department of Education and Science acknowledge that they have a joint responsibility for funding medical education and get their act together rather than continuing to pass the buck to and fro?
10.17 pm
The Parliamentary Under-Secretary of State for Health and Social Security (Mrs. Edwina Currie): I congratulate my hon. Friend the Member for Romsey and Waterside (Mr. Colvin) on his success in the ballot and on the lucid and thoughtful way in which he introduced this important subject.
Undergraduate medical education is primarily the responsibility of the universities, which means the University Grants Committee and the Department of Education and Science. However, the health departments have a close interest, first, as providers of clinical facilities through which clinical training takes place and, secondly, as customers, for most medical graduates will be employed by, or be general medical services contractors in, the National Health Service. It is also important that training, especially in primary health care, relates to NHS policies and objectives.
Section 51 of the National Health Service Act 1977 lays a duty on the Secretary of State to make available such clinical facilities in connection with medical teaching and research
"as he considers are reasonably required"
by the universities. That provision goes back to the early days of the NHS and is the basis for the service increment for teaching — or SIFT — in the allocations of health authorities under the RAWP formula. Although the Act may require health Ministers to provide general medical services within which undergraduates can be introduced to general practice, that type of training is comparatively recent and no specific financial arrangements have been made to cover service costs. For its part, the General Medical Council has stressed the need for this part of the syllabus.
Earlier this year, the Croham report on the review of the UGC called for closer liaison between the Department of Education and Science, the UGC and the health Departments and between education and health at local level. As a result, co-operation between the DHSS and the Department of Education and Science has increased. One result was the issue in March of a note of guidance by the two Departments to health authorities and to universities about the planning and funding of undergraduate medical education.
That joint note did not refer to the general medical services and did not cover clinical training and general practice. However, for many years the health Departments
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have accepted the role that university departments of general practice can play in the improvement of standards of primary care.
The Mackenzie report, to which my hon. Friend for Romsey and Waterside referred, provides a new and important survey of the development of what we might call academic general practice. General practice is relatively new as an academic discipline. It is only 30 years ago that the first university department of general practice was created, sadly not in England, but in Edinburgh. It was only in 1986 that every medical school in the United Kingdom had at least one GP appointed to a university post with responsibility for teaching the discipline. The development of general practice as an academic discipline has therefore been somewhat uneven. Many of the arrangements that had been made have been reflected in local university and clinical opportunities and needs, as the Mackenzie report pointed out in chapter 1.
My hon. Friend may not be aware that last Friday I had dinner with one of the other authors of the Mackenzie report, Professor Hannay in Rotherham. In between the pate, the cream soup and the roast potatoes we discussed these issues and many others. I was grateful to him for his wise advice.
There is, however, agreement that general practice is an essential part of every undergraduate medical student's medical training. It is now required by the General Medical Council. As my hon. Friend rightly pointed out, the Government document "Primary Health Care: An Agenda for Discussion" published last year, noted:
"Undergraduate course content varied widely between medical schools."
It suggested that there was scope for greater emphasis on the role of primary care in undergraduate teaching. My hon. Friend is right that those proposals have had widespread support since they were published.
Only a minority of the staff of departments of general practice are full-time salaried academics. Similar to other academics, these people are clinicians who see patients as well as teach in the medical school. In fact, many are National Health Service GPs with a part-time commitment to the medical school and may be compared with hospital clinical staff who have honorary academic appointments.
The hospital-based academics appear to have substantial advantages over their GP counterparts. The professor or consultant has junior medical staff who can assist him in the provision of services to patients and often in the clinical teaching of undergraduates and research. The university GP has no subordinate medical staff and he retains a personal responsibility, as does any GP, to provide continuing cover to his patients. That is in the nature of general practice.
It is a concern of teachers of general practice that their general practice service work may take a large part of their time, leaving them little time for their research and teaching which are crucial to their intellectual development and the academic recognition that they deserve. In a recent letter to "GP" magazine Professor Metcalfe—I read that magazine every week — claims that the university GP's average list is 79 per cent. of the average GP and therefore that is bound to effect his income.
For some years Professor Howie has argued, including in the Mackenzie report, that there should be more NHS support for teaching in general practice and that specifically there should be an equivalent in the GMS to

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the service increment for teaching that exists in the hospital and community health service. In our view it is not as simple as that. The differences in the ways the GMS and the hospital services are funded makes the proposal of a service increment for teaching analogue difficult. In the allocations to health authorities under the RAWP formula the SIFT is identified in recognition of the fact that teaching hospitals have higher costs than other hospitals, and of the duty of the Secretary of State to provide clinical facilities in support of teaching.
In the GMS there is no comparable allocation. General practitioners are independent contractors. The target level of remuneration is determined in relation to the service workload and individual GPs are paid on the basis of the services they provide.
The Mackenzie report argues that GPs who have a student attached to their practice take longer over their consultations and over their GMS work generally. The authors estimate that this might amount to an extra two hours a day or an extra 40 hours for a typical four-week attachment. There is considerable variation between medical schools in the lengths of attachments. The health Departments do not have conclusive data on the extra hours involved, but our inquiry suggests that a GP — whether in a university practice or any other practice — who is providing suitable clinical training for a student will take significantly longer over his GMS work.
GPs who teach postgraduate trainees, known as vocational trainees, receive a training allowance. However, the NHS pays no such allowance to GPs who take undergraduates on attachment. Some GPs outside the university practices are recognised as tutors and are paid small sums by the university as part-time lecturers, but the majority of GPs who take undergraduates receive only an honorarium, if anything. They do it, therefore, out of the goodness of their hearts and because of their belief in the importance of the training for the future of their profession and for the quality of care.
As my hon. Friend said, the Mackenzie report calls for support of up to £4 million a year from the Health Service. However, the specific proposal that it makes is for a payment of GPs on the basis of the extra hours' work involved in having a student attached. At, say, £400 for an average four-week attachment for 4,000 students, which is the typical medical school intake per year at the moment, the cost would be not £4 million but £1·6 million. That only emphasises that there are administrative and financial details that would need to be worked out with great care if a scheme were to be introduced, hut, as my hon. Friend realises, at present it would he illegal to make such
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payments and it would require primary legislation. However, with the appropriate primary legislation, it would be tolerably easy to devise methods of payment, possibly through the existing payments system — the family practitioner committees in order to have convenience and keep administrative costs under control.
I hope that what I have said demonstrates that the value that the Government place on general practice is evidenced by the discussion document on primary care. We also have a White Paper that will be forthcoming shortly. Most patients' episodes of illness requiring medical treatment are handled by GPs. The primary care services are both the front line and the public face of the NHS. Indeed, I have seen suggestions that for a typical person in this country, the total period of in-patient service that he will require is about 10 days every 10 years, yet half a million people consult their GP every working day. That gives our view of how important general practice is.
General practice and primary care are an essential part of the training that we give to doctors and are likely to become increasingly prominent. My colleagues in the other health Departments and I are keen to improve standards in general practice. The university practices have an important role in raising standards, especially in the inner cities and in other difficult areas.
Mr. Colvin: My hon. Friend said that there would be a White Paper, which I welcome. A White Paper normally follows a Green Paper—in this case it was a blue paper. Often White Papers are intended to outline the Government's intentions. My hon. Friend has also hinted at primary legislation being required to overcome the legal difficulties of making those payments. Do I take it, therefore, that the White Paper will contain the seeds of a Bill that might come before Parliament before long?
Mrs. Currie: The Government may propose, but the House disposes. Ultimately, it will be for this and the other place to decide. A number of the changes that are suggested in the White Paper will require primary legislation. We hope that we might be able to make progress before long, with the will of the House.
I am very glad that we have had this short and most useful debate. In recommending that my hon. Friend reads the forthcoming White Paper with the greatest of care, I hope that he realises that the Government are not at all unsympathetic to the views that he has expressed tonight.
Question put and agreed to.
Adjourned accordingly at twenty-eight minutes past Ten o'clock.