THE DEFENCE ESTIMATES

HL Deb 09 March 1966 vol 273 cc1104-28

2.45 p.m.

Debate resumed (according to Order) on the Motion moved yesterday by Lord Shackleton on the Defence Estimates, 1966, and on the Amendments moved by Lord Carrington and Lord Gladwyn.

LORD SHACKLETON'S Motion was, That this House approves the Statement on the Defence Estimates 1966 [Cmnd. 2901 and 2902].

LORD CARRINGTON had moved, as an Amendment, to leave out all the words after "House" and to insert instead: "regrets that the Statement on the Defence Estimates 1966 shows that there has been no real attempt to match military resources to political commitments, and fears that the policy announced will lead to a growing gap between our commitments and our ability to meet them ".

LORD GLADWYN (on behalf of Lord Rea) had moved, as an Amendment to the Amendment, to leave out "military resources to political commitments "and insert" political commitments to military resources".

THE EARL OF SELKIRK

My Lords, we are examining in this debate a very grave issue, and I think that it is proper to recall some words which the noble Lord, Lord King-Hall, put forward late yesterday evening. He reminded the House of the big changes which have taken place over the last twenty years. It is only 21 years since Hiroshima, and since that time there have grown up all over the world a multitude of new nations which are finding it not very easy to get on to their feet. As things are going to-day, if we look into the future of the next twenty years we only see even bigger changes. Technology to-day is advancing faster than it has done in the past, and I think it is dangerous to be too dogmatic as to the direction in which we are likely to go.

The Government have told us that the Anglo-French V.G. aircraft is the core of their programme. I sincerely hope that their hopes will be justified, but I can remember a great many aircraft of which I had high hopes and which did not live up to them. I can remember looking forward to an aircraft called the Battle as being the great aircraft of the future, and to-day I think of it with horror. Nothing which has been said about the V.G. aircraft has not already been heard about the TSR 2. That was a wonderful aircraft technically, but it fell down on the last hurdle of expense. At the beginning of the war we had to build three four-engined bombers before we found one that was first class. I sincerely hope that the V.G. aircraft may have a longer run, but it will have a great many hurdles to get over, and I am afraid that the Government have based their programme much too tightly on this aircraft.

The Government have made an extensive review, as former Ministers of Defence have and as no doubt other Ministers of Defence will do again in two or three years' time. I wish the Government had given us a little more of their wisdom, which I think is very inadequately set out in Part I of a not very good document. But there are two points for which I am grateful. The Government are standing firm on the Anglo-American alliance. This, I am sure, is important. However, some of us have felt that interdependence is turning a little too much into dependence, and I hope that the Government will watch this, because we do not want to become a satellite. The second aspect which I welcome is that the Government have made a firm commitment to stand by Malaysia. It is stated that this will last until confrontation ends. But "con- frontation" is a pretty vague term. We do not know exactly what Mr. Healey said in Singapore, but we know from Mr. Lee Kuan Yew the impression he left in Singapore. Mr. Lee said that he got the impression that Britain was thinking in terms of staying in Singapore up to 1979 or 1980. There is nothing there about confrontation, and I think that it is important that our friends there should have reliance on what we are doing.

The question worrying me is this: just what is the reasoning in Part I of the White Paper? The Secretary of State, when he went to Washington a week before the White Paper was published, said that he did not think it would cause any resignations. He may or may not have known at the time what the position was. I do not mind his side-stepping the Press if he wants to do so. But I am quite certain that no Board of Admiralty could have agreed to paragraphs 3 to 6 of Chapter III of the First Part of the White Paper. It says: Land-based aircraft should take over air defence functions of the carrier. I find it difficult to believe that either the Air Staff or the Navy Staff could ever have agreed with those words. I am therefore in doubt as to what professional advice the Government are taking. It is worth remembering that in much more exacting circumstances Sir Winston Churchill never overruled his professional advisers. This Secretary of State has done so in the first eighteen months of holding this office. I wonder what we are letting ourselves in for.

We are said to be making cuts of £400 million in an imaginary budget five years ahead. A cut of £400 million on a £2,000 million expenditure looks to me more like a 20 per cent, than a 16 per cent. reduction. We have been told by the Secretary of State that this will arise almost entirely from changes in equipment programme, and not from cuts in manpower. That means that the 16 per cent. or 20 per cent, will fall on half the Defence budget, which looks like a cut in equipment of between 30 and 40 per cent. This is very severe indeed. Since we abolished conscription our policy has been high mobility and modern equipment for smaller numbers. I wonder how far we are going to be able to carry that on.

I was disturbed when the noble Lord, Lord Shackleton, said several times, yesterday and earlier, that the late Government had not built any carriers. I think we should get this position clear. They did not lay down the keel of a carrier; but they had hulls which were left over from the last war, and very properly and economically they built them up into first-class carriers. Between 1955 and 1964 there were five modern carriers, which were comparable in quality with those of the Americans, though not so big. And I think it is true to say that, in aircraft control and some electronic equipment, they were even superior. It is natural that this should be the case, because the Government have said that the carrier is the most important element in the Fleet. I find it hard to know on what professional advice the Government have reached the conclusion that carriers are not required. But I must in fairness say that the Secretary of State has modified what he said recently in the other place and has emphasised the importance of the rôle that carriers play in exercising sea power.

I am glad that the noble Lord, Lord Shackleton, said yesterday that there is no conflict between the Canberra replacement and the carriers. But I wonder whether 50 F 111s can really fulfil the rôle described for the Canberra in paragraph 58 of Part I of the Statement. We have been told that the Air Staff wanted 158 TSR 2s, and we have to suppose that 50 F 111s are able to take their place. The Canberra's rôle is described as follows. Their primary rôle in NATO is nuclear strike; they are also declared for CENTO and SEATO. I did not know that any equipment was declared for SEATO. Possibly we can be told if any other equipment has been so declared. I do not think that we ever used to declare for SEATO.

However, that is by the way. How can these 50 aircraft, perhaps three squadrons, cover NATO, CENTO and Singapore? I know there are said to be the V-Bombers, such as will remain at and after 1970, and they will play a tactical strike rôle. I greatly admire these aircraft, but I doubt whether this is a rôle which they are well equipped to fulfil. It seems to me, therefore, that we are going to have a gap, because they have suddenly been thrown, beside the Canberra rôle, a considerable rôle in sea protection. I should like to ask the Government whether they do not think they will have to ask for another 50 F 111s. I should be surprised if they do not.

Before answering this question, may I look for a moment at what we are trying to do outside Europe. I would not differ from what is said in the Labour Manifesto, that "Britain has a key rôle to play in promoting peaceful change", as a world Power. We are agreed on that. What does it mean? I think it means that we are trying to help the evolution of the young States in Asia and Africa to enable them to develop themselves, without using methods of force, but to make their evolution by reason, by understanding and by agreement. After all, all our efforts in aid and economic development will fall to the ground unless stability is maintained. And there will for a long time be people in this world who, when they have the opportunity of using this power, will use it. This does not by any means apply only to Communist countries: any country which has the opportunity will continue to do so.

So long as we believe in the expression of free opinion, these countries are, in my view, entitled—at least, it is in our interests—to see that they evolve without being overawed by China, or by any other country, until they have got properly on their feet. They have had little experience in defence, and little experience in foreign policy, and in many cases we can help them, provided always that we have the means to do so. It is not enough to say that they want us, or that they do not want us. In most countries there is a division of opinion, as there is here in politics; and because, in many countries, the division is so wide, they have gone over to the one-policy system. We may regret this, but that is what has happened. It is in just this kind of situation, in helping the evolution of young countries, that I think the carrier can play a very special rôle.

Noble Lords have talked a great deal about cost-effectiveness. I think there is another side to that, and it is peace-effectiveness. I should like to mention some of the rôles which, in my view, cannot be weighed and cannot be carried out by any other arm of defence. The first is secrecy. There is no unit which can be used with such force and secrecy as the carrier. The second is that it can be poised, awaiting development, often unknown to the enemy, and without necessarily being used at all. Thirdly, the carrier constitutes a much smaller infringement of sovereignty—much less than that of any land-based unit, whether it be of the Army or the R.A.F.; and it is easier for a Government wanting assistance without arousing opposition inside the country to ask for something which does not need to go on land.

Fourthly, the carrier is the most sophisticated instrument of defence that has yet been developed—that may be a criticism, but it is true—combining a wider range of scientific research and a fuller measure of built-in discipline which other countries will find it difficult, if not impossible, to copy. It is for that reason that we should have an advantage over any other country which has not got carriers. And not only that; there is also in the carrier the element of the unknown which cannot easily be understood except by those who have experience. It is indeed the key to sea power. It is not without interest that it was to sea power that President Kennedy turned when the supreme test came in Cuba. We have learned something about this recently from the fascinating books which have been written on the subject. He decided then that it was an exercise for sea power, which was the most delicate, decisive and effective way in which he could make his will known.

Finally, on this subject, may I say this? The carrier, to my mind, is essentially the complement to land-based aircraft. We are on the verge of V.T.O.L., and it may well be that the pilots of the R.A.F. or the Fleet Air Arm will be able to land with equal facility on ships or on land, and it would be a great pity to bring this to an end.

I think it is rather cynical to run down the air power of the Navy. The Board of Admiralty have often been criticised for not being sufficiently conscious of the power of the air. I have done it myself, and I was fairly familiar with the views of the late Lord Trenchard on this subject. The Admiralty Board, who are conscious of this, are now having their teeth, their eyes and their shield taken away by their political masters. Is it really possible that they did not make alternative suggestions of how this could be achieved? They are a pretty resourceful body, and I should be surprised if something was not suggested to the Government as to how the object which the Government had in view could be achieved, while still retaining the essential element of sea power.

I should like to ask one question, of a perhaps rather more minor nature, on Part II. Are we making enough use of the universities in research and development? I believe that the noble Lord, Lord Shackleton, is specially charged with this, and I am glad to see that all three Services are asking for recruits from the universities. The Navy, I know, is the slowest in this, but I am glad to see that it is doing so now. I notice that the universities are helping in instruction and in the medical field. But can we not use a wider source of charging universities with certain fields of research and development? It might well produce economies—I am sure that it would produce ideas. I am always a little worried that the great research organisations of this country may become too inward-looking, and may not have the fertilisation or cross-fertilisation from outer ideas. The noble Lord, Lord Plowden, refers to this point in his Report on the aircraft industry. It would, I am sure, be good for the universities, and it might provide a valuable flow of ideas.

I do not know whether this is a fair comparison, but I notice that an interesting new anti-submarine weapon, called IKARA has been produced. It is, I presume, a weapon faster and of longer range than the torpedo and a weapon for which scientists have been looking for a long time. It comes from Australia. I do not know why it does. I have no doubt that our organisation has helped there, but I would suggest that it may be that in a different environment broader ideas can come out. Recently, in a discussion on the universities, the noble Lord, Lord Hughes, stressed the importance of using the universities research facilities, both by the Government and industry. This is a point which cannot be emphasised too much, and I hope noble Lords will consider trying to use them rather more.

I do not underestimate the problems which face the Minister of Defence. My impression is that the Armed Forces are going to be more over-stretched and less versatile than they were. What are the Government doing? I take it, first of all, that they are not modifying, or renouncing, any of our Treaties, withdrawing troops from British Guinea, Swaziland, Malta or Cyprus, and are not reducing our commitments. All they are doing is to change the position of our troops. So far as Aden is concerned, I imagine the best that the Adenis can say is that this is a tricky Government. What, may I ask, will the Government say if the Adenis now ask for a Treaty of protection? Do we refuse it, or what do we do? What do we do if anyone invades Adeni territory? I do not think the Government can claim to have saved overseas exchange. The figures given in answer by the Secretary of State were that there has been committed on the F 111, £240 million in dollars; on the Phantom, £310 million in dollars, and on the Hercules, £110 million in dollars. That is a total of £660 million in dollars. I suppose one would deduct from that, say, £200 million for Phantoms which had been ordered by the previous Government. That leaves a commitment during the year of £460 million in dollars.

The Minister of Aviation said that this will not be covered by orders from the United States placed in this country. What we can do, apparently, is to bid for something like £100 million of contracts, out of £460 million which was the sum incurred last year. The rest is to be obtained from third countries. In third countries, how do you reckon this? How do you know we should not have got the contracts in any case? What happens, may I ask, if we do not get the dollars? Do we cut off the aircraft? Last year we borrowed £900 million, and the Secretary of State appears to have committed half of it in aircraft already. The Government theme is domestic cost. We are therefore pruning an imaginary Budget in 1970 with, apparently, a ceiling of £2,000 million or 6 per cent. of the gross national product. Could we be told which it is? Is it one, or is it the other? Is it the higher or is it the lower according to which suits the Government?

LORD SHEPHERD

My Lords, my mind was wandering. Could the noble Earl repeat that?

THE EARL OF SELKIRK

I was saying this. We are told that we are pruning an imaginary Budget in 1970. We do not know what the Budget is, but an interesting exercise is going on to prune something we cannot see. I hope the Government are enjoying it. Is the ceiling £2,000 million, or is it 6 per cent. of the gross national product? Or is it the higher or the lower of those figures as convenience suits?

One of the Government supporters last night gave vent to a thought which I dare say is not wholly absent from some other supporters of the Government. It was the noble Lord, Lord Soper. He said this: When, for instance, it is said as an accusation against the Government that their intention is all butter and very few guns, what in the name of God is wrong with that? That would seem to me to be a thoroughly admirable intention for any Government which invites the people of any country to support it."—[OFFICIAL REPORT, Vol. 273 (No. 48), col. 1048; 8/3/66.] Some of us are, I think, rather anxious that this is really behind the minds, at least in a shadowy form, of some supporters of the Government.

To sum up, if I may, the Government have denied the Navy the use of air power. In views expressed both on this side and the other side of the Atlantic, the aircraft industry has been brought to its knees. They sought to abolish the Territorial Army. I was never a Territorial, but I was in the Auxiliary Air Force, and I think it is important for those who live in the ivory towers of Whitehall to remember that ours is a citizen army, and that in many ways the Territorial organisation provides the important link between the Services and the civilians. I am, therefore, very glad that the Government are reconsidering this point, and I sincerely hope that they will go on reconsidering it in the light of the speeches made last night, particularly that of the noble Lord, Lord Thurlow. I was also glad that the noble Lord, Lord Leatherland, had his doubts about the abolition of the Territorial Army. It may be that they will find consolation in what Mr. Ernest Bevin said: So long as I have any power at all, I will never be a party to treating the Army in the future as it has been treated in the past. They broke up in peace-time the very foundations of the Army structure, and expected to build it up during war time with the enemy at the gates. The Territorial Army is a deep foundation of great value.

If I may say so, I think we have been for many years rather a lucky nation. We may perhaps agree with what Sir William Watson has said: Time and the ocean and some favouring star In high cabal have made us what we are. I do not think that this is the time to take chances with our good fortune, but I am very much afraid that that is what the Government: are doing now. I believe that all they are doing it for is 0.5 per cent. of the gross national product. Is it worth it?

3.10 p.m.

LORD SHEPHERD

My Lords, the noble Earl has started the second day's debate in good form. Some parts of his speech were penetrating, others were sweeping, and there were a number of errors. I thought the first one that he made was when he called upon Sir Winston Churchill by name as being one of the great Ministers who always accepted the advice of his Staff. I am quite sure the noble Lord, Lord Boothby, will remember that it was Admiral, Lord Fisher who resigned in 1915.

THE EARL OF SELKIRK

And so did Sir Winston Churchill.

LORD SHEPHERD

But not at the same time.

THE EARL OF SELKIRK

Oh yes, he did.

LORD BOOTHBY

Yes, it was at the same time.

LORD SHEPHERD

The noble Earl also complained about the inadequacy of the Defence White Paper. I should have thought it was generally recognised—it certainly was yesterday—that the White Paper which the Government have issued is a revolutionary form of Defence White Paper in the amount of information that is made available.

THE EARL OF SELKIRK

May I make this quite clear?

LORD SHEPHERD

What I will undertake with the noble Earl is that next year, before we produce our White Paper, we will have a discussion to see how we can improve it for him.

THE EARL OF SELKIRK

If the noble Lord will just allow me to say one thing, I was referring to Part I and not to Part II. In regard to Part II I would agree with the noble Lord.

LORD SHEPHERD

But the noble Earl has to take the two Parts together.

A NOBLE LORD

Why?

THE EARL OF SELKIRK

Like the curate's egg!

LORD SHEPHERD

The noble Lord asks why: surely if you want to take an intelligent interest in the defence problems of the country you have to take the précis, which is in the first part, and the details, which are in the second part. If any noble Lords really want to be stupid in this matter—but I must contain myself, I have a long way to go.

My Lords, the Government originally did not want to provoke your Lordships into a Division. The noble Lords opposite have done reasonably well during the period of this Government. The Conservatives, however, have decided to put down an Amendment. I think most of us on this side of the House understand the reasons for that. No doubt the noble Lord and his colleagues on the Front Bench wish to send the troops into battle for the next three weeks. We are, in fact, going to take part in a great national debate in which defence will play a prominent part—and so it should. We on this side of the House will help it. When one sees the strength of the Conservative Party, and the scale and the size that will go through the Lobby this evening, perhaps someone outside will say that that vote will have as much validity as a vote at Crockford's on gambling. Because, my Lords, most of you have come to vote against the Government. Be that as it may, it is my job, and that of my noble friend Lord Longford, to put the case for the Government and this White Paper.

During this Parliament we have had a number of important debates upon the economic position. Yesterday the noble Lord, Lord Carrington, said that he and his Party would be quite content if the Defence Budget was contained within 7 per cent. of the gross national product. At least, that was my understanding of what he said. The Manifesto relates it to our economic resources. I want to relate that for a moment against our economic resources, not only in terms of monetary matters but also in terms of physical resources. We made some progress during 1965 in the balance-of-payments difficulties, but I do not believe there is any noble Lord opposite who has any connection with the City of London or with industry who will disagree with me when I say that we have a stern battle ahead, not only to get into surplus but to remain in surplus; and in order to do that we shall have to face the harshest possible competition from European trading competitors.

The Conservative Government had a Defence Budget running in the region of 7 per cent. of the gross national product. The proposals of the Government are that by 1969–70 it should be around 6 per cent. of the gross national product. I would ask noble Lords to consider what other countries provide by way of defence in terms of their own gross national product. In Germany the figure is 5 per cent., and I understand that next year it will be reduced to 4.5 per cent. For Holland, the figure is 4.4 per cent.; in France, 5.1 per cent.; in Sweden, 5.2 per cent.; in Canada. 3.7 per cent.; and in Italy, 3.3 per cent. Only the United States of America contributes a higher percentage to defence, in terms of its gross national product; but America has two and a half times the income per head. We must also take into account the effect of this high spending on defence. If we consider the E.E.C. countries, they provide 26 per cent. of their gross national product to fixed capital expenditure, whereas in the past we have contributed only 19 per cent. This is one of the reasons why, in Europe in particular, they have been able to move faster ahead in economic growth. I think we should not forget this.

Turning now to manpower, we have discussed the fact that we are going to face a grave shortage of skilled manpower in this country. We have a work force of 23 million. One and a quarter million workpeople are to-day involved in defence. One-fifth of our scientists and technologists are involved in defence. Think of that in relation to our effort to meet the competition in world trade. Then, my Lords, 40 per cent. of the money we in this country invest on research and development is also for defence. These are significant figures, and they should never be forgotten when we view the task that lies ahead.

We have from time to time discussed overseas investment and overseas expenditure. The House may like to know of the steady growth in recent years of Government defence expenditure overseas, excluding the cost of exports and imports of arms. In 1956 it was 96 million; in 1959, 136 million; in 1962. 227 million; and in 1964, 272 million. Thus, taking our balance-of-payments problems into account, surely the Government were right to say that we must find a means to bring this down, and the Government's proposal is that by the redeployment of our forces and our equipment this class of expenditure overseas will be reduced between now and 1969–70 by 25 per cent.

We have heard a great deal, and quite rightly so, about the extent of public expenditure. This Government, I think rightly, have laid a discipline on all the spending Departments, of 4¼ per cent. The Government, when they took office, found that public expenditure would absorb all the revenue for the next few years, and we had to take into account particular payments that are necessary for our industrial development. The previous Administration (I would refer to the White Paper on Public Expenditure of 1963) estimated that by 1969–70 our Defence Budget would reach £2,400 million in 1964 terms. The Government took the view that this was far too high a rate of growth for our economy to sustain. We therefore laid a discipline on the Ministry of Defence, in the same way as we had laid disciplines upon all the other spending Departments, to the effect that we would contain defence expenditure at £2,000 million, in 1964 terms, or (and I hope the noble Earl, Lord Selkirk will remember this) what should be 6 per cent. of the gross national product at the time. So we have really an argument whether it should be 6 per cent. or 7 per cent., as was the case with the Conservative Government.

Let us consider what we have in mind for public expenditure. I have heard many debates on the great need for money for roads and many other services. We expect, and it is within our National Plan, that by 1969–70 we shall be increasing the amount spent on roads to £575 million, an increase of 35 per cent.; on public housing investment to £691 million, an increase of 21 per cent.; on housing subsidy to £257 million, an increase of 57 per cent. I could go on dealing with health and benefits and education. There may be some noble Lords who will say that those figures are not high enough; but those figures can be attained only if we contain defence expenditure to the figure I have just given. If the noble Lords opposite say that we should spend more on defence—and this I believe is what they are saying in their Election manifesto—the country is entitled, and so are the noble Lords behind the Front Bench, to know which of these essential services are going to be cut; and I hope that the noble Lord, Lord Harlech, when he replies this evening on behalf of the Opposition Front Bench, will give us that information. The country is entitled to know.

I cannot stress too highly the need in the years that lie ahead to put our economic situation in order, because that is how we are going to be judged in world affairs. The Conservative Amendment at least recognises that there was a gap between our commitments and our ability to meet them, and I should like to deal with some of the steps that we have taken to bridge that gap. We state in the White Paper that we found our forces over-stretched and under-equipped, in spite of the fact that we had been spending such vast sums of money. For the Army—and I think it was the noble Lord, Lord Sinclair of Cleeve, who mentioned it yesterday—we have a ceiling of 181,130 men. On January 1 the strength stood at 177,860. During 1965 we recruited 20,000 men out of 36,000 applicants, a net increase of 1,550. 1965 was a difficult year for all the Forces for recruiting. This is clearly understandable when we look at the great shortage of labour, particularly skilled labour, in this country, and I think we must be honest and admit that this state of affairs is going to be with us. We shall have to make a sustained effort to get the num- bers of troops that we require. But we hope that the new pay scales will close the gap during 1966. Whether or not we get the target figure, we must face the fact that the Army will still be out of balance. We shall still be short of skilled tradesmen, particularly in Signals and R.E.M.E.

We must also not forget the problems of servicemen's families. We have sent men abroad at very short notice, leaving their wives and their families behind. Perhaps the noble and gallant Field Marshal, Lord Montgomery of Alamein would be interested in the progress of one of the regiments from "the tribal areas", the First Battalion the King's Own Scottish Borderers. In February, 1962, it moved from the Scottish Command to Aden, and only a very small proportion of the families were able to join the battalion. In January, 1964, it moved from Aden to the United Kingdom. In April, 1964, three months later, it went back to Aden, this time unaccompanied. In July, 1964, it returned to the United Kingdom. In April, 1965, it was sent to Hong Kong, and it is now serving in Borneo. We must bear this problem very much in mind when considering the conditions in which many of our soldiers and other Servicemen are serving to-day. We must see, not only in their interest but also in the interest of recruiting, that they have greater opportunities to remain at a station abroad where there is family accommodation, or in this country.

The House will know that the Government have proposed to redeploy many of our military forces in the next two to three years. We shall be reducing by about 30 per cent. the strength of our Army overseas. We are doing this for two reasons. First, the Government do not believe that it is right for the Army to be widely spread in small pockets. We believe it is of vital urgency and necessity that we re-create the strategic reserve. The noble Lord, Lord Caning-ton, knows that last year and the year before there were times when we had little or no strategic reserve available in this country. We must build up this strategic reserve so that, if we are called upon to meet emergencies, we can meet them more effectively.

I think I should now come to the question of our Reserves. I could not help thinking, yesterday afternoon, that many noble Lords were thinking in rather out-of-date terms. The Government do not believe that the Army will be faced with sustained or traditional warfare in Europe; we believe that the peace of Europe depends on the nuclear umbrella of NATO and the Western Alliance. But we must face the fact that we shall be needing Reserves to assist the Regular forces outside Europe. For economic reasons, it is not possible to have a properly balanced Regular force, we must have a major part of that Regular force as "teeth" units. Therefore we must see that the Reserves are in fact the logistic forces to bring the Army up to strength in times of difficulty. The Regular Reserve now stands at 27,000 and in 1970 we believe it will be in the region of 45,000. These, as I say, will be mainly "teeth" forces who are all well trained. It is to the Territorial Army that we look for a major contribution for this Reserve Force.

I congratulate the noble Lord, Lord Barnard, on his maiden speech yesterday afternoon. I was glad to hear him speak, with his experience as a commanding officer, of the high morale of the soldier in the Territorial Army. I had the privilege last September of visiting the Territorial Army, and I was amazed—no, that is not the right word; I was gratified—to see that the old standards of humour and of loyalty that one knew in the Territorial Army days before the war still remained. The Government will look to the Territorial Army for a major contribution to the Reserve; but I will deal with that in a few moments.

The Army Emergency Reserve is mainly concerned with logistics and consists of highly skilled tradesmen. In category A, which is the category which can be called up without a Proclamation, we have a strength of 9,000 against the ceiling of 11,000. I should like to draw the attention of the House to a number of advantages which will result from the new Army Volunteer Reserve. It will be tailored to meet the requirements of Regular reinforcements within a limited Defence budget. We shall be able to give it far better training and equipment than in the past. Apart from some major items, it will be provided with current vehicles and equipment to the standard of those in Regular units. Initially, it will take over the equipment now held by the Territorial Army. Because the number of "teeth" Army units in the Army Reserve will be fewer than in the Territorial Army, they will immediately receive more modern equipment than counterparts in the present Territorial Army. The money available will enable nearly twice as much per man to be spent on equipment. I think this will give satisfaction to the Territorial soldier who, as the noble Lord, Lord Thurlow, knows, has complained consistently over the years, not only in regard to equipment, but also in regard to uniforms, particularly the battle uniform.

Turning to the Home Defence Force, I readily accept the criticism—or should I say the gratification?—of noble Lords opposite because the Government have taken note of what they have put to us and have advised us; and, as the House knows, we have now agreed to the creation of a Home Defence Force. The details are still under investigation, but the House will be glad to know that already most, if not all, of the existing major units of the Royal Armoured Corps, the Royal Artillery and the infantry, which could not be fitted into the Army Volunteer Reserve will in some way or the other be represented in the new force. But I must stress the necessity to keep this force within the figure set of 22,000. We believe that this well-trained force will provide a useful supplement to the police and the Civil Defence authorities in the event of a nuclear attack. Equipment will be mainly rifles, some wireless sets, radio instruments and a few vehicles; and the training will consist basically of infantry training, with wireless sets.

Some noble Lords asked whether these two forces could not be integrated. Their rôles are quite different, and we do not believe they could be brought within one command. But we fully accept the advice that has been given to us, both yesterday and on other occasions, that there should be as close a link as is possible between these two organisations. As the noble Lord, Lord Thurlow, knows, discussions are now taking place between the Council of the Territorial and Auxiliary Forces Associations and the Government. I hope the noble Lord will understand that I cannot go any further than that.

There was some concern expressed yesterday as to whether the volunteer soldier would respond to this new force. Having seen the soldier in the ranks, I must say I have no doubt at all; but I think it is now up to the officers, the Council and the Government to carry out a publicity campaign, not only in public but also among the soldiers, to interest them in this new force. I have no doubt that we shall get the men we need, men of the highest possible quality. The noble Lord, Lord Thurlow, asked about the WRACS. He will be pleased to know that we hope to be able to find a place for the WRACS within the Army Volunteer Reserve, perhaps in the Signals. In regard to the Home Defence Force, this is a new force and I think it is too early to say whether we shall be able to find a position for them, but there is a definite desire to see whether we can do so.

One last question I should deal with before I move from the Territorial Army. I see in the Conservative Party Manifesto that, if they were returned to power, the Conservative Party would retain the Territorial Army. I should like to know from the noble Lord, when he winds up for noble Lords opposite, what he has in mind or what his Party has in mind in regard to the Territorial Army. Does this mean that we should go back to the "pre-force" of last year, or do they now accept the need for these new Reserves of the Army which the Territorial Army obviously can provide?

I now come to the question of the carrier. I think this was the main plank of the complaint of the noble Lord, Lord Carrington. He was reminded that in 1962 the Government took into account the problems of the requirements for this class of ship ten or fifteen years' ahead. They then went on to make a condition, that there would have to be one range of aircraft common to the Royal Navy and the Royal Air Force. As your Lordships know, this was not obtained during the period of office of the noble Earl, Lord Jellicoe, as First Lord of the Admiralty, in that the last Government decided to buy Phantoms from the United States at a cost in dollars of £200 million. As I understand it, the need for the carrier is that it is a defence against shipping and it is vitally necessary for opposed landing where you are facing sophisticated forces. I think the noble Lord, Lord Carrington, claimed that since 1945 there have been a number of occasions upon which carriers were required. I think in regard to this argument that I should make it clear that there has not been any occasion since 1945 when carriers were used when Royal Air Force cover was not available. It is true that carriers have been used, because they were available. But it is wrong to assume that carriers have been used because Royal Air Force cover was not available to meet the demand.

The noble Lord, Lord Carrington, raised the question of prediction. I think this point was also made by the noble Earl, Lord Selkirk. It is difficult to make a firm prediction of what we shall need by 1969 or 1970. When dealing with a military force you have to make certain assumptions. You may have to lay down guide lines as to how you would operate, because this country is quite unable to provide all the equipment needed for the foreseeable assumptions and predictions that military strategists may think up. We have to cut our cloth according to our coat.

NOBLE LORDS

It is the other way round.

LORD SHEPHERD

I have spoken to a number of noble Lords opposite who are interested in Navy matters. They have taken the view that two carriers in concert are a viable force. One carrier by itself becomes vulnerable, particularly if it is to undertake the operation which has been envisaged for an aircraft carrier. As my noble friend Lord Shackleton explained yesterday, we are likely to have only three aircraft carriers available from 1970. It means that we shall have one aircraft carrier in the Far East, one refitting, and one able to be on station in operation within fifteen days. My noble friend referred to H.M.S. "Hermes". If there were to be one aircraft carrier in the Far East, it would have 12 fighters and 7 strike aircraft. If it were one of the larger aircraft carriers, such as the "Ark Royal" or the "Eagle", it would have 12 strike aircraft and 24 fighters. The cost of such a force would be in the region of £1,450 million in the next ten years. It is interesting to realise, when making a comparison of strike capacity that two F 111As are equal to seven Buccaneers. Therefore, in terms of strike power, the F 111A, if it is able to operate, is infinitely greater than the aircraft which can be flown off an aircraft carrier.

Noble Lords who ask for a new aircraft carrier must recognise that, if we were to decide to order one, it could come into operation only by 1973 at the earliest, by which time our two available aircraft carriers will not have so many years of active service afloat in front of them; and if we were committed to the one aircraft carrier, we should be committed thereafter to CVA 02 and 03.

LORD CARRINGTON

My Lords, would the noble Lord not agree that, if they had ordered the new aircraft carrier, they would have had a force of four aircraft carriers until 1980?

LORD SHEPHERD

No, my Lords. The information I have is that if we had ordered this aircraft carrier it would have come into operation in 1973, and we should then have available only H.M.S. "Eagle", and H.M.S. "Ark Royal"—

LORD CARRINGTON

And "Hermes".

LORD SHEPHERD

And "Hermes".

LORD CARRINGTON

That is four.

LORD SHEPHERD

That is true, but we should have to buy the new aircraft carrier at £70 million-odd, and should be faced with a major refit of "Ark Royal" at £30 million.

LORD CARRINGTON

But you are doing that anyway.

LORD SHEPHERD

Yes, but we are not buying a new aircraft carrier. The noble Lord wants it all ways. This is the Party which is fighting the next General Election by promising to cut income tax. The noble Lord shakes his head. The noble Lord, Lord Carrington, asked me why we should not now scrap the aircraft carriers we now have. We believe—and I feel that this is generally recognised—that they have an important part to play. They have valuable existing equipment; we must keep them until the new equipment of the Royal Air Force—the F 111A, the Maritime Comet, and the Phantoms—come into service. If I may correct the noble Earl, Lord Selkirk, he referred to the number of aircraft carriers which were laid down during the time of the Conservative Administration. I understand that all the present aircraft carriers were laid down prior to the Conservative Administration of 1951. All, except H.M.S. "Hermes", were launched before the 1951 Government, and three were completed and operational during the period of the Conservative Government. So the case made by my noble friend still stands.

LORD CARRINGTON

No.

THE EARL OF SELKIRK

My Lords, I must interrupt the noble Lord for one moment. Lord Shackleton said that the previous Government had not built any aircraft carriers. I said that they had not laid down the keel of any aircraft carrier, but that they had either built, completely reconstructed, or modernised five aircraft carriers which could take the most modern aircraft.

LORD SHEPHERD

I apologise to the noble Earl. I thought he was claiming that the Conservative Administration had ordered and laid down an aircraft carrier. Therefore, I readily admit that I am wrong.

The noble Lord, Lord Carrington, also spoke about the need for an expanding Navy, instead of what he thought of as a smaller and disappearing force. But, on the contrary, during the period of this Labour Government—and since the noble Lord takes claim for aircraft carriers I ought to say this—we have seen being laid the keels of two guided-missile destroyers, two Polaris submarines, a conventional submarine, and a frigate. We have ourselves placed orders for four new frigates, one hunter-killer submarine, and we are now asking for tenders for the first destroyer of the Type 82. Therefore, I hope that noble Lords who say that this Government are opposed to the Navy will withdraw, perhaps by correspondence. The noble Lord, Lord Carrington, also asked about servicing.

LORD TEYNHAM

My Lords, before the noble Lord leaves the question of carriers, perhaps I might be allowed to correct my speech of yesterday. The noble Lord, Lord Shackleton, queried the telegram which I mentioned was sent to the Prime Minister by the Chairman of the Air League. I find that I was misinformed about this telegram which referred only to the performance and cost of Spey-Mirage projects. On the other hand, I can confirm that the other telegram I mentioned was sent by Mr. Maurice Edelman, a distinguished member of the Party opposite and also a member of the Council of the Air League, to Mr. Mulley, the Minister of State for Air. I will read the text of the telegram: Senior colleagues of the Air League and myself urge most strongly reconsideration of Spey-Mirage project in view of new factors publicly stated affecting F 111 performance and consequently increased cost and ancillary logistic equipment. Further urge formation of Spey-Mirage plan plus aircraft carriers as most desirable in British interest.

LORD SHEPHERD

My Lords, all I can say to the noble Lord is "Thank you", for having given me a breathing space. We will look at what he has just said. I believe—and the words of my noble friend Lord Blyton yesterday should be read on this matter—that there is a very great future for the Navy, and any Member of this House who in any way strives to give a different impression is not doing that Service any good. There is a great future for the Navy. One has only to look at the White Paper to see the number of vessels on the strength and the number of vessels coming forward.

I now want to turn to Lord Carrington's Amendment—I know he is getting rather worried about the length of my speech. I now want to deal with the gap that we inherited in terms of military aircraft. We heard a great deal from the noble Lord, Lord Carrington, yesterday about honour, as though honour were a property peculiar to the noble Lord. We on this side would regard it as a reflection on our honour if we were to send our airmen into operations with weapons which obviously did not match up to the standards of their possible opponents. That was the position which we found when we took office in October, 1964.

I will deal, first of all, with the Hastings and the Beverley. The Hastings came into service in 1948; the Beverley came into service in 1953, and it should go out of service in 1968. The Conservative Government decided to go ahead with the HS 681. It is perfectly true that it is a revolutionary aircraft, and I want your Lordships to remember this. It should have been coming into service in 1968, but the development contract was not placed till October, 1963. As it did not appear that that particular aircraft could come into service before 1971–72—and even that delivery date was slipping—the Government reluctantly had to buy an American aircraft, the C 130. I think we were right to do that, particularly in view of the speeches that have been made over many years about the great necessity for having mobility for our Army. We had to bridge the gap left by the previous Administration.

Let us consider the Hunter. This came into service in 1952 and it should go out of service in 1968. The Conservative Government placed initial holding contracts in April, 1964, for a revolutionary aircraft to come into service in 1968. The R.A.F. were acutely short of that type of aircraft, and that is the reason why the Government had to buy the Phantom. We are buying 200 and delivery will start in 1968, to meet the date when the Hunter should go out of service.

Take the Canberra. This is a very fine aircraft which was originated in 1945–46. It came into service in 1953 and, originally, it should have gone out of service in 1965, but it was reassessed to last until 1968–69. We had to find another aircraft to replace that. Because of the massive expense of the TSR 2—my noble friend Lord Shackleton gave the figures yesterday—the Government were forced to buy the F 111A. We did not wish to buy American equipment, and perhaps we could have had British equipment if the orders had been placed earlier and if the aircraft industry had been given the sort of assistance for which noble Lords continually ask.

I want to deal with a point that was made by the noble Earl, Lord Selkirk. Under the Conservative Government the cost of the Phantom, Polaris and other items was £410 million over ten years. The Labour Government's plan will cost in excess another £165 million, but we shall get many more Phantoms than were originally ordered. We shall also get the C 130 and the F 111A. The noble Earl wanted to know how we were going to pay for them. In the case of the F 111A, these hardheaded Labour Ministers were able to get a better deal than the so-called hard-headed Conservative Ministers ever got. We were able to get the United States to remove the 50 per cent. rule regarding the purchase of military equipment by American forces. It is perfectly true that there is no guarantee that America will spend the £100 million or so necessary to pay for the F 111A, but at least we now have the opportunity to go and get the orders if we can. The bar that was there during the time of the Conservative Administration has been removed, and it is now up to industry itself.

THE EARL OF SELKIRK

My Lords, may I ask the noble Lord whether he would look again at his figures about the cost in dollars, in the light of the reply which Mr. Healey gave on this subject? The figure which he gave was a total of 660 million dollars. What I do not know is how much of that was incurred before the Socialist Government came into power. So far as I can see, only 200 million dollars, at the most, was incurred on Phantom aircraft, leaving 460 million dollars incurred last year by the present Government.

LORD SHEPHERD

My Lords, I will not dodge the issue. This is an involved matter. I will ask my noble friend Lord Longford to give your Lordships the details. I am advised by my noble friend Lord Shackleton that £410 million was committed by the Conservative Government.

I have tried to show—and I think any fair-minded Peer not committed to his Whip would agree—that there was a gap between our defences and our commitments, and that this Government have set about filling that gap. I think that is right. On a number of occasions in this debate I have heard complaints that we are relying too much upon the Americans for equipment. I wish we could use more British material, but I do not see why we should now sneer at the Americans. We have lived with the Americans in the NATO alliance, and I have never heard any sneers in that regard. I can see no particular interest in the Far East where the Americans would not be involved in their rôle in SEATO. Some day or other there will be a conference to deal with the problems of peace, at which all the nations will have to sit down. I do not see why, in order to get the collective security which my Party has always supported, we should not have these alliances and on occasions, according to circumstances, perhaps rely on a stronger and larger nation. But we do not intend to give up our own individual points of view, and we shall continue to put them clearly to our allies.

I think I should say this, because a number of noble Lords kept on talking yesterday in terms of unilateral action; of an occasion when this country might be involved alone against aggressive and sophisticated forces. We on this side do not contemplate a Suez. We do not contemplate such a form of action, but we will play our part within the alliance. I come back to what I said at the beginning. Our main task in the years that lie ahead is to build up our economic strength. The defence forces should in no way dissipate that effort, because only by economic strength can we be a true partner of our allies in the furtherance of peace.