§ 4.15 p.m.
§ The Minister of State for Defence Procurement (Viscount Trenchard)
My Lords, with the leave of the House, I will now repeat the Statement which is being made by my right honourable friend the Secretary of State for Defence in the other place. The Statement is as follows:With your permission, Mr. Speaker, I would like to make a Statement about the Government's decision to modernise the existing Polaris force by replacing it, in the mid 1990s, with a four-boat force based on the Trident II D5 missile system.On the 15th July 1980 my predecessor announced the Government's decision in favour of Trident as the replacement force for Polaris; but, as I told the Defence Committee of the House in March last year, final decisions were still needed on the type of submarine and the choice of missile.We have now decided that our four Trident submarines, to be built at Vickers, Barrow, will have a larger hull section than previously planned, and will incorporate an advanced propulsion system and the latest sonars. And after detailed consideration here, and with the United States, we have now decided also to purchase the Trident II D5, instead of the Trident I C4 missile system, from the United States.The number of warheads that the Trident II D5 missile will carry, and therefore Trident's striking power, remains wholly a matter of choice for the British Government; our intention is that the move to D5 will not involve any significant change in the planned total number of warheads than we originally envisaged for our Trident I C4 force.The reasons for our choice of Trident II D5 are briefly as follows.Just as the Polaris system will, by the mid 1990s, have been in service for approaching 30 years and will have reached the end of its operational life, so the Trident system must remain a credible deterrent for a similar period and thus remain operational until 2020—that is 40 years from now.Our experience with Polaris and the decision—endorsed by the last Labour Government—to modern-ise the Polaris missile with Chevaline at great cost, has shown us the financial and operational penalties of running and developing a United Kingdom unique system.Following President Reagan's decision to accelerate the Trident II D5 programme, if we were to choose the C4 missile, it would enter service with the Royal Navy only shortly before it left service with the United States. This would mean that the United Kingdom would be alone responsible for keeping open special Trident I C4 support facilities in the US; and the United Kingdom alone would be forced to fund, as we have with Chevaline, any research and development needed to counter improved Soviet anti-ballistic missile defences. For these reasons our judgment is that the through life costs of Trident I C4 would almost certainly be higher than Trident II D5.Accordingly we have entered into an agreement 321 with the United States to purchase Trident II D5 and an exchange of letters between the President of the United States and my right honourable friend the Prime Minister is set out in Cmnd. 8517 published today. together with an exchange of letters between the United States Defence Secretary and myself on the terms of the arrangements.The United States Government is selling Trident II D5 to us on more advantageous terms than Trident I C4. The missile will be purchased by us at the same price as the United States Navy's own requirements in accordance with the Polaris sales agreement. The additional overheads and levies will be lower than would have been the case under our 1980 agreement to purchase Trident I C4. In particular, the so-called R&D levy will, in fact, be a fixed sum in real terms, and there will be a complete waiver of the facilities charge which was part of the C4 deal. I would emphasise to the House that the terms protect us completely from development cost escalation. Finally, the United States will waive certain of the Buy American Act provisions and set up a liaison office in London in order to advise British industry on how they can compete—on equal terms with United States industry—for subcontracts for weapon system components for the D5 programme as a whole, including the American programme.When I appeared before the House of Commons Defence Committee I made it clear that the range of options which we still had to study for the Trident system, over and above the total cost of £5,000 million then given, could be confined within an additional £1,000 million at 1980 prices and exchange rates—and so it will.On this basis the initial capital costs of the Trident II D5 missile system will be an extra £390 million above the Trident I C4 missile system which represents an addition of about 7 per cent. to the total cost. And we have now decided also to fit the latest propulsion system, the British pressurised water reactor 2, already under development, and improved sonar systems which together with the larger hull will add about a further £500 million to the cost, which will mean additional work for British industry but within the £1,000 million total increase. These changes will greatly improve the efficiency and the quietness of the submarines: as a result we are planning to run our submarines for around 7 years between refits so that the availability of the submarines for patrol can be greatly increased. This will allow us to maintain three boats in the operating cycle for a high proportion of the time. The Trident II D5 missile should also have an in-tube life within the submarine of at least seven years, a much longer period than for Polaris, thus greatly reducing maintenance which will be largely carried out on board.At September 1980 prices, therefore, we will spend on Trident about £6,000 million. Updating the price basis to September 1981, which reflects a much lower exchange rate than in September 1980, adds a total of about £1,500 million. So the total cost over the procurement period will, at 1981 prices, be £7,500 million against an estimated total defence budget over the same period of approaching 322 £250,000 million; that is, just over 3 per cent. of the total defence budget. This means we will spend on Trident at current prices an average of somewhat under £500 million a year against total defence spending of £14,000 million a year.I am making available now in the Vote Office a document explaining the Government's decision, which also shows on page 8 how the cost of Trident compares with the anticipated capital expenditure on our conventional forces. This information has not been published before. From this it can be seen that Trident expenditure over the next 15 years is a far smaller amount than our planned expenditure on equipment for our major conventional capabilities, such as anti-submarine warfare or offensive air operations. With the 3 per cent. growth in the defence budget until 1985–86, several billions of pounds extra in real terms will still be available to spend on our conventional defences in future years.Mr. Speaker, for about 3 per cent. of the defence budget we will be modernising the British independent nuclear force that successive Governments have considered to be essential for our national security over the past 30 years. Nothing has happened to change that need—rather the reverse.The Government remain convinced that no other choice but Trident will provide a credible nuclear deterrent into the year 2000 and beyond; no other use of our resources could possibly contribute as much to our security and the deterrent strength of NATO as a whole. To choose a system lacking in credibility to an aggressor or, still more, to abandon unilaterally a capability we have now maintained for three decades, would be a futile gesture that would serve to increase rather than diminish the risk of war".My Lords, that ends the Statement. May I mention to the House that the two documents mentioned—the exchange of correspondence as a White Paper, and the second open document on the Trident programme; the first was in 1980—are now available.
§ 4.27 p.m.
§ Lord Peart
My Lords, the House is grateful to the Minister for the Statement, which is one of great importance and will need careful study. I have quickly looked at the White Paper, if I may call it that, and it is a document which also needs careful study. This Statement is the second of great importance this week, the other being the Budget itself. Indeed, this Statement can be seen as part of the Budget Statement, for the Budget was formulated with the Government's defence priorities very much in mind.
May I ask the Minister: does he not accept that if Britain, or, indeed, any other world power, uses or threatens to use a nuclear capability independently, other countries will seek the same right, with all the terrible consequences for the rest of mankind? Taken with a Statement made a few days ago about reserve forces, which the Government admitted had run rather low, does this not indicate that the Government are paying less attention to conventional forces and much more to the nuclear?—a situation which will alarm some of us, in that we may go nuclear right from the start of an emergency.
323 Before we get committed to this new stage, had there better not be much more effort to get the SALT talks going again and to press for mutually balanced force reductions on all sides, in order to avoid escalation? I should like to know the progress being made on that front and on the Geneva talks. I had a promise from Ministers that they would give further information about how these talks have progressed.
Is not this kind of independent defence potential rather contrary to the collective security that we have as members of the NATO alliance, where members should contribute to the whole according to their means, not seeking to emulate each other in what can be done alone, with all the risks involved? May I ask the Minister what consultations have taken place with our NATO allies? Will the Minister say more about the job situation in this country in the joint effort with the United States? Also, what cost escalation does he anticipate over the development and production period to the cost, also, of other priorities? I hope that I may have answers on those points.
§ 4.29 p.m.
§ Lord Mayhew
My Lords, is the noble Viscount aware that this project is absurdly unsuitable and extravagant for this country? Is he also aware that greater priority will be given to our conventional forces by an Alliance Government, which would have little hesitation in cancelling this project? Is he aware that three of the four political parties in this country strongly oppose the project, that not all the members of his own party are supporting it and that strong reservations are felt about it in the armed services, which have the closest understanding of the disastrous effect in the long-term that it will have on our conventional strength? Will the Minister tell the House, not what proportion of the cost of the total budget it is but what proportion of the total equipment budget it will be, in which year that proportion reaches its maximum, and what that maximum is? Finally, is the Minister aware that it cannot be right to launch a hush national defence project like this on the basis of such narrow political support?
§ Viscount Trenchard
My Lords, I thank the noble Lord the Leader of the Opposition and the noble Lord, Lord Mayhew, for keeping their comments brief on such a very important subject. I am sure that we shall discuss it in the future. The noble Lord, Lord Mayhew, asserted that if a future Government were made up of other parties they would not be in favour of this and would cancel it. Since my right honourable friend was in balk, so to speak, for quite some while before the Americans made their decision on their nuclear deterrent and we were thus able to have discussions with them and make our own decisions, I hope that Members opposite, and their parties, will not make up their mind until they have looked at the facts. I believe that some reactions are tantamount to saying, "I've made up my mind; don't confuse me with the facts".
The noble Lord, Lord Peart, suggested that proliferation could result from this decision. The Statement makes it very clear that we are but maintaining and modernising (as we have had to do before) what 324 successive Governments have done. We do not believe that the maintenance of our existing position—a position, in terms of strategic missiles, of some 3 to 4 per cent. of the Russian quantity of strategic missiles—will be a cause of proliferation. The position would be different if we were to go out, and it would have dangers which are recognised by the whole of NATO and by the United States.
Turning to the noble Lord's point about consultation with the allies, we have consulted them about Trident, as I have made clear in this House on previous occasions—and so has my right honourable friend. Our allies were aware that we were discussing with the United States the form of the Trident missile which we would take.
So far as the very important and strongest member of the NATO alliance is concerned, noble Lords will have an opportunity to read in the White Paper the views of President Reagan and of Secretary for Defense Weinberger, who both regard this move by us as of great importance and as strengthening the defensive NATO alliance for the free world. Both noble Lords mentioned the effect on our conventional forces. The Statement makes it clear that as a result of the policy of this Government our spend on conventional forces in the future will still go up by several billion pounds. That is against a 3 to 4 per cent. increase.
So far as the question asked by the noble Lord, Lord Mayhew, which related to the percentage of the equipment budget is concerned, the 3 per cent. becomes approximately 6 per cent. when expressed as the equipment budget. Regarding his question concerning the peaking of expenditure, the noble Lord will find in the open Government document a very helpful graph which shows this. However, let me say at this stage that the peaking is seen to be a little over 10 per cent. of the equipment budget, which compares with the peaking of Tornado at round about 17 per cent. of the equipment budget.
So far as the arms control talks are concerned, I have to say to the noble Lord the Leader of the Opposition that we shall report from time to time on the progress of the arms control talks. We have said before that the fact that the arms control talks have got started at all is in part due to the firmness of the NATO alliance which has at last brought the USSR to the conference table. Finally, the possession and modernisation of this weapon which we have held for years is necessary in order to maintain a deterrent against any thoughts of aggression. I believe that this has been a powerful contribution to peace over the past 35 years.
§ Lord Kennet
My Lords, the Government are being both careful and clever in this negotiation and in their presentation of it. It seems to me that good negotiation has led to an advantageous deal, particularly as there is the prospect of much more work for this country than there was in the Polaris programme, and a much higher proportion of the work will be for both American and British forces. For this the Government would be congratulated if we wanted the product. However advantageous, though, the Government cannot be congratulated on a deal which obtains a product which we do not need. And 10 per cent. of the equipment budget at the peak is pretty high. I 325 do not emphasise that as the gravest disadvantage. The Trident system itself is too big. Each boat is too big. Would not the Government agree that each boat, looked at in a certain light, is too big? There is a quantum in these matters and that quantum is too big. It is bad for disarmament. We need only a minimum deterrent. There is nothing minimum about Trident.
§ Baroness Young
My Lords, I am sorry to interrupt the noble Lord, but could he put his points in the form of a question and not make a speech? It is a Statement which we have just had.
§ Lord Kennet
My Lords, I apologise if I have got the custom of the House wrong. I thought it was in order for those speaking for parties to put their questions in the form of a statement, but as it is not I will proceed by putting them in the form of questions. Is not this vertical proliferation with a vengeance? Is it not time for Governments to cease acting unilaterally in the political sense in these vast defence purchases and to take, I do not say other parties but the House of Commons into their confidence at an earlier stage (which was not done on this occasion) thereby decreasing the risk of inflicting cancellations at a later stage, which can only be unwelcome to the armed forces?
§ Viscount Trenchard
My Lords, the noble Lord, Lord Kennet, suggests that this is a product which we do not need. I do not think a single suggestion has been made by his party, which includes in its leadership a number of those who have taken part in the independent deterrent decisions of the past, that we do not need a deterrent which is capable, in the opinion of all the experts, of producing the same degree of deterrent power as we have had in the past. In suggesting that all we need is a minimum deterrent, the noble Lord and many others outside the House are, I believe, guilty of wishful thinking.
Her Majesty's Government have examined and re-examined, as the open document makes clear, whether we could have an adequate degree of deterrence which would be credible as an independent deterrent at the end of the century, or in the next century, in any other, cheaper way. I hope that the noble Lord will read our reasoning in that document. Again I say that I hope we shall not have a situation in 1982 (which we have not previously had in this country regarding matters of defence, which are highly delicate—this touches on the point of consultation) where all the responsible parties do not look very closely at the alternatives which are offered. We have now put out two "open Government" documents on this subject, which is more than many other Governments have done in the past.
§ 4.40 p.m.
§ Lord Orr-Ewing
My Lords, is my noble friend aware that there is a noticeable difference between the sensible, careful and considered position taken in this House by the official Opposition who, like all of us, would like an opportunity to study these two very detailed documents before coming to a final decision, and the Labour spokesman in the other place, who made instant and emotional threats to cancel the whole thing before there is time to make a study? The same view has been 326 taken from the Liberal Benches in this House, surprisingly. Most of us would like time to consider this. Could my noble friend tell us how the 3 per cent. estimate for our deterrent compares with the similaestimate for the cost of the French independent deterrent? Does he have any figures to suggest how many jobs would result from this programme, not just at Vickers Barrow but also in the engineering industry, among contractors and sub-contractors, as a result of this ambitious project?
§ Viscount Trenchard
My Lords, I agree with the first part of my noble friend's remarks, as I have already made clear. With regard to expenditure by the French on their independent nuclear deterrent, the estimate we have is that they spend on their independent nuclear deterrent some 20 per cent. out of their total budget. With regard to jobs, we do not have a precise estimate. The Vickers Barrow line will continue into Trident submarine production following SSN production. There will be new capital equipment required and therefore an increase in jobs at the Vickers yard.
As far as jobs are concerned in relation to the particular opportunity for British firms to offer their goods in sub-contracts for the whole American D5 missile system, this entirely depends on industry. We shall take every step, and the American Administration has agreed to take every step, to try and make it possible, although in this highly specialised world it will not be easy, to compete on fair terms with our American counterparts.
§ Lord Noel-Baker
My Lords, can the noble Viscount explain, in order that we may comprehend what this new system means, how many warheads we shall have, and what will be the yield of each warhead in kilotons or megatons? May I ask the noble Viscount if his Statement means that the Government are now reconciled to the prospect that the present escalating arms race will continue for 40 years? Does he seriously believe that we should live through those 40 years without the catastrophe of a nuclear war?
§ Viscount Trenchard
My Lords, the noble Lord, Lord Noel-Baker, asks about the number of nuclear warheads. The Statement makes it clear that we plan, on current intentions, to have the same number of warheads as we would have had on the C4 system. We do not disclose the details of the size of the warhead, although I believe there is no major difference. As regards the "escalating arms race" as the noble Lord mentioned it, the United Kingdom has maintained its deterrent in a world in which modernisation requires change, and is not escalating. The Soviet Union has in all areas escalated very fast in recent years and that country's total defence spending has increased very greatly.
With regard to the noble Lord's question about whether we can see what he perhaps rightly called an armed truce situation continuing indefinitely, our answer is, no. Economics and the determination now being shown by the NATO defensive alliance are two things which provide a better opportunity for progress on arms control and reduction than there has ever been before. But the noble Lord must remember the figure I gave and keep the matter in perspective; this 327 deterrent is equal to some 3 or 4 per cent. of the strategic weapons possessed by the Soviet Union.
§ Lord Gladwyn
My Lords, Are the Government aware that, in the opinion of many noble Lords on this side of the House, the one redeeming feature of their proposal to produce an expensive weapon which would be superfluous in the event of a war in which the Americans were on our side and useless if they were not is that, having opted for the more expensive version of Trident, they will have then to spend less during the initial stages, which will make it easier from the financial point of view for an incoming Government to cancel the project when they come to power in two years' time, as will doubtless be the case?
§ Viscount Trenchard
My Lords, the noble Lord suggests, as he has done many times before, that the possession of this kind of independent deterrent by us is useless. Yet, many noble Lords have pointed to what they regard as the excess levels of nuclear weapons in the world's armoury as a whole. One cannot have it both ways. The deterrent we have had in the past and the deterrent we mean to maintain is sufficient on its own to cause quite unacceptable damage to any aggressor. It is the key characteristic of an independent deterrent that it should have that power on its own, and it does have that power on its own. Provided that it does, it will never be used, because, in fact, this country will never be attacked in the way that will require that response.
The noble Lord described the D5 system as the "more expensive" system, as indeed I heard the BBC do last night—and the BBC had increased their estimate by £500 million by the 7 o'clock news this morning. The Statement makes it clear that the route we are following on a "through-life" basis is almost certainly less expensive than the C4 route would have been. I believe that for the percentage of budget which it represents, it will continue to provide the best deterrent value in the whole of our budget.
§ Baroness Young
My Lords, we have now spent more than half an hour on this matter. I should like to suggest that the noble Lord, Lord Hill-Norton, who has been trying to speak since the very start of these proceedings, might now put his question and that we should then return to the Local Government (Miscellaneous Provisions) Bill.
§ Baroness Young
My Lords, the noble Lord, Lord Hill-Norton, has been trying to ask a question from the very moment that the Statement was concluded.
§ 4.49 p.m.
§ Lord Hill-Norton
My Lords, I am very grateful to the noble Baroness. I should like to ask the noble Viscount whether he and his colleagues—not only at the Ministry of Defence—will take exceptional steps to make quite certain that the arguments produced in the Statement by the Defence Secretary are widely disseminated throughout the country, because they are 328 simply not understood—as almost all the questions asked in your Lordships' House this afternoon have made quite clear. May I further ask the noble Viscount that when doing so, he should make quite sure that the percentages occupied by other large programmes such as Tornado are drawn in comparison with the costs of this vital component of our defence policy?
Finally, may I ask the noble Viscount whether he may tell the House the extent to which the possession of an independent British nuclear deterrent is welcomed by our European Allies in the North Atlantic Treaty Organisation? And perhaps I may say, as a critic of some aspects of the Government's defence policy, that I think this is the best news I have heard this year.
§ Viscount Trenchard
My Lords, I am grateful to the noble and gallant Lord for those questions and his final comment. I agree with the noble and gallant Lord that the position is not understood in the country. I have found, travelling up and down myself, that there is just no comprehension of the fact that the Trident cost has little or nothing to do at the present time with the problems of paying for modern weapons in the conventional area. The critics are chasing the wrong fox, and they are a fairly motley pack. I can assure the noble and gallant Lord—
§ Lord Peart
My Lords, may I intervene to say this to the Minister. We all have a great respect for the noble Viscount, but I think that type of language is the wrong language to use.
§ Viscount Trenchard
My Lords, I am corrected by the noble Lord, and my old friend, if I may say so. I was referring to the critics up and down the country and not to noble Lords opposite. I think if the noble Lord looks at Hansard he will find that that is correct. The Tornado comparisons and the comparisons with the expenditure on other roles are clearly set out in the open Government document. A welcome from NATO was given by all countries at the time the basic Trident decision was taken. I think I have no more to say.
§ Baroness Young
My Lords, I, of course, will be guided by the House in this matter. We could, of course, go on taking a great many more questions, and I recognise that this is a most important Statement, but we do have a great deal of other business to do this afternoon. I would have thought that now that we have been very nearly 40 minutes on this Statement it is time to move on to the next business. I would hope that that would be the view of the House.
§ Lord Beswick
My Lords, would not the noble Baroness the Leader of the House agree that the answer to the last supplementary question did open a whole new series of subjects and that it ought to be possible to challenge some of the statements made in that answer.
§ Baroness Young
My Lords, of course it is a very big subject. There are a great many facets that cannot possibly be covered in the course of a Statement, or in questions following upon a Statement. I recognise 329 that many noble Lords feel very strongly about this issue; we have had a lot of Questions in the House on it. I feel there will be other opportunities to discuss this matter, and I do think we should now move to the next business.
§ Lord Shinwell
My Lords, is the noble Viscount the Minister aware that, subject to certain conditions, I welcome this Statement. The conditions are, first of all, that the Government, having taken the best advice and after mature consideration, have reached a decision, and I hope it will be the end of the controversy so far as the Government are concerned, although undoubtedly there will be certain implications. The other condition is this.
§ Baroness Young
My Lords, the noble Lord is not asking a question; he is now on a second statement. I think we had concluded that the House now wished to return to other business. I think we should do that.
§ Lord Shinwell
My Lords, I have ventured in the past to express opinions on this subject, and I have also been chairman of the House of Lords Study Group. I think I am entitled to express an opinion, but I am merely asking a question. My second question is this—
§ Baroness Llewelyn-Davies of Hastoe
My Lords, while there are very many noble Lords on this side of the House, and I think on this side in general, who profoundly disagree with a great deal that the Government have said in this Statement, the House accepted the collection of views, taken by the noble Baroness the Leader of the House on three separate occasions, that the discussion on the Statement should conclude. Although I must say again that we disagree with a great deal of what the Government have said, I think we must abide by the conventions of the House.