The Defence Estimates 1989

HL Deb 13 July 1989 vol 510 cc432-89

3.55 p.m.

Lord Trefgarne rose to move, That this House takes note of the Statement on the Defence Estimates (Cmnd. 675-I).

The noble Lord said: My Lords, I beg to move that this House takes note of the Statement on the Defence Estimates 1989. With your Lordships' permission, I shall speak to the two other Motions standing in my name on the Order Paper when winding up and then move them formally at the end of this debate.

Recent years have seen an extraordinary change in the climate of East-West relations. The developments in arms control, the attempt to reform political and economic structures in the Soviet Union and the increasing diversity and independence being shown by the other countries of the Warsaw Pact clearly have great significance for the security of the United Kingdom and our NATO allies.

As circumstances change and the prospects for a stable and lasting peace in Europe look brighter than for many years, the rationale underlying our defence policies may seem to be less obvious than in more difficult times. But in truth it is no less cogent.

One continuous thread has run through Britain's defence policy during the post-war years. Successive governments have recognised that the overwhelming military capability of the Soviet Union and its allies and the destructive power of modern weapons mean that we cannot defend ourselves in isolation.

This acknowledgement of the potentially appalling nature of warfare has moulded what are now the fundamental elements of our defence strategy: that the defence of the United Kingdom is possible only as part of the collective defence of the free world and that the only real safeguard against major aggression is the ability to respond in whatever way is appropriate—if needs must, with nuclear weapons.

These are not easy or comfortable justifications for the efforts of successive governments to ensure that our contribution to the defence of the West has been effective. In an ideal world we would not need armed forces. But the world is not ideal. It is still an unstable and unpredictable place as the events last month in China demonstrated so clearly.

The Statement on the Defence Estimates noted that this year is the 40th anniversary of the NATO alliance. NATO has twin and complementary aims. These are to deter aggression by maintaining adequate military strength and political cohesion and, no less important, to pursue the search for progress towards a more stable international environment in which solutions to underlying political issues can be sought. NATO can take much satisfaction in the progress which has been made in achieving both of these aims.

Despite instability and great changes in many other parts of the world, NATO has kept Europe at peace for 40 years. It has done this by deploying both conventional and nuclear forces and adopting a strategy—flexible response—which provides a clear linkage between them. The aim of deterrence is not simply to dissuade a potential aggressor from using nuclear weapons against the members of the alliance. It is more fudamental. NATO's aim is to remove the option of war permanently from the East-West scene. This is an ambitious goal but the greatly increased destructive power of conventional weapons, as well as the consequences of nuclear warfare, make it essential to pursue it.

The possession by NATO of nuclear weapons is an indispensable part of this plan. We know that conventional forces cannot themselves provide a sufficient deterrent. An aggressor might always calculate that a swift attack against a solely conventional defence could secure worthwhile gains. Only the awesome power of nuclear weapons, an evident capability to use them effectively and a clear resolve to do so if necessary, presents a would-be aggressor with the certain knowledge that the damage he would suffer would outweigh any gains he might make.

This is the background to the approach to negotiations on short range nuclear missile forces in Europe which alliance leaders adopted at the recent summit. What we have said is that there will be no third zero. Negotiations on the partial reduction of these forces, leading to equal and verifiable levels, will begin only after an agreement on conventional forces is completed and is being implemented. There will be no reductions in NATO's short-range nuclear missile forces until a CFE agreement has been implemented in full.

The allies have further agreed that to maintain the effectiveness of these conventional and nuclear forces they will continue to be kept up-to-date where necessary. Since there is to be no third zero, and since the Lance missile system will be obsolete by the mid-1990s, the allies have agreed that the question of the introduction and deployment of a follow-on system for Lance will be dealt with in 1992.

NATO's second goal has been to reduce tensions and promote stability by engaging in dialogue with the East. The climate of distrust between East and West has in the past circumscribed the extent to which we could pursue this. But the new leadership in the Soviet Union has been prepared to face economic and political realities, domestically and internationally. This has opened the door and there is now room for us to set about constructing a new relationship between East and West. The agenda for that process, in the fields of arms control and human rights, was set by us.

But this prospect should not blind us to two important realities: first, that much unfinished business remains from those parts of the agenda that we have so far been able to address—and I am thinking especially of the Soviet Union's unparalleled chemical warfare capability and the differences in approach between East and West to the role of nuclear weapons; and secondly, that even if we can attain a more normal relationship with the East, difficulties and mutual misunderstandings may still occur.

The Soviet state was founded on authoritarianism. We cannot therefore expect the Soviet Union to become overnight, perhaps even within a generation, one of the family of democratic nations. Glasnost and perestroika do not mean that all the objectionable features of the communist system have been done away with. They have not, and for the foreseeable future they will not be. It would be foolish and dangerous to pretend anything else. For instance, Soviet attitudes towards such issues as freedom of information and expression do not match Western standards. They are unlikely to do so for many years to come.

The alliance has a clear vision of the kind of progress the West wants to see. The summit declaration issued at the end of May set out how we think progress should be made. And there are encouraging signs. For instance, the Soviet Union has realised that the policies it has pursued have created insecurity and instability for itself and for others. It now appears to accept that aggression is not a legitimate instrument of foreign policy. It has withdrawn from Afghanistan and scaled down its destabilising activities in the third world. We look forward to the day when a similar realisation is established with regard to internal affairs and the toleration of dissent.

We shall also welcome the day when the Soviet Union finally comes clean on chemical weapons. The Soviet Union's chemical warfare capability is the world's largest and most sophisticated. And we strongly suspect that, contrary to Soviet claims, production of CW agents in the Soviet Union is still continuing and that testing of chemicial weapons has not ceased.

We estimate the size of the Soviet CW stockpile to be several times higher than the 50,000 tonnes claimed. We believe that the stockpile includes types of agent that were not disclosed to our experts during their visit to Shikhany, and that research and development into new agents continues. And, contrary to Soviet claims, we have good reason to believe that the Soviet Union has stationed chemical weapons in Eastern Europe and that such weapons have also been produced by other members of the Warsaw Pact.

There are thus considerable discrepancies between Soviet statements and what we believe on good evidence to be the case. We have welcomed the increased openness shown by the Soviet Union on conventional forces. But the Soviet Union must show the same openness on CW. Otherwise we will simply not have the confidence that is essential for our goal: the complete global abolition of chemical weapons.

The commitment of the United States to Western Europe is very strong. The Bush administration has, like its predecessors, reaffirmed that the security and continued independence of Western Europe is vital to the security of the United States itself.

But the transatlantic link faces important pressures. The Soviet Union's efforts to divide NATO have not slackened. And there are budgetary pressures throughout the alliance. NATO cannot work if the burdens of membership are not fairly shared and seen to be so. The creditable record of the United Kingdom in this respect and its contribution to the alliance is acknowledged by all.

But for some nations, fair sharing of the burdens may entail greater commitment.

Some may argue that this would sit ill with the new climate of the Gorbachev era. But it does not. The stronger and more unified the alliance, the stronger the guarantee we can provide not only of our own security but of peace for the whole of Europe. As the late Lord Attlee observed in 1936: You cannot divide peace in Europe. You must have one peace running right through".

But there is more to do, especially in the field of European co-operation. It remains neither desirable nor achievable to create a European security entity distinct from the alliance. European nations are already striving to strengthen their contribution through, for example, the Independent European Programme Group. We are six months into our two-year term in the chair of the IEPG; I shall mention its work a little later on.

The United Kingdom's defence budget, at more than £20 billion this year, is among the highest in NATO, both in absolute terms and in the share it represents of our national wealth. And these resources have allowed us to continue with our extensive programme of re-equipping the Armed Forces.

But however much we modernise equipment, our defence effort is crucially dependent on the quality of our servicemen and women. I am sure your Lordships would wish to join me in paying tribute to the professionalism and the dedication they display in carrying out their duties. Whether serving in their NATO roles, supporting the Royal Ulster Constabulary to combat terrorism in Northern Ireland or assisting with disaster relief—for example, at Lockerbie and Kegworth—we expect the best of them and we are not disappointed.

Recruiting and retaining sufficient trained manpower has become more difficult for the services, and the problem will be exacerbated as the effects of the demographic trough are increasingly felt and continued economic growth leads to greater competition for labour. We are seeking to overcome these problems. The recommendations of the Armed Forces Pay Review Body have been implemented in full by this Government and we are ensuring that terms and conditions of service are appropriate to modern conditions.

We also want to improve opportunities for women in the Services so that increased numbers, in a wider range of jobs, can relieve some of our difficulties. And we want to increase the number of recruits that we attract from ethnic minorities. The survey on which we reported in the Statement shows quite clearly that members of ethnic minorities are substantially under-represented in the Services. This is an unsatisfactory situation and we aim to improve it.

We also want to increase the numbers of volunteer reservists. They already play a vital NATO role defending the United Kingdom base, the central front and the waters around our coasts alongside their regular counterparts. We are working hard to inform the public of the contribution made by reservists and to persuade employers that time spent on reserve training is not only good for the country but is also a sound investment for the employer.

We also rely heavily on the commitment, loyalty and expertise of our civilian workforce. But here, too, we have difficulties in attracting and retaining sufficient staff. The demographic trough will also have an adverse effect on our ability to fill vacancies in the civilian workforce. These difficulties are referred to both in the Statement on the Defence Estimates and in the recent report on staffing in the procurement executive produced by the Defence Committee in another place.

The Government are tackling these problems by bringing greater flexibility and responsiveness to Civil Service pay. The new long-term pay agreements enable us to target extra money where it is needed; and we have introduced, or have in train, a range of other measures including special allowances, more flexible working patterns and relocation of large blocks of work away from London where the problems of recruitment and retention are worst.

We are determined to continue to provide the resources necessary for effective defence; but we are also determined to ensure that these resources are effectively used. We must get the best value for these substantial sums of money. Our approaches to doing so are outlined in the White Paper. The most significant change in prospect is the new management strategy which we are adopting for handling our business.

Another key element is the continued pursuit of a more commercial approach to equipment procurement. Competition has encouraged offers of keen price and tight delivery schedules. We have combined this with taut contract conditions to give companies the greatest possible incentive to meet the promises they have made. Where interim payments are made, they are firmly linked to demonstrable achievement rather than being based on costs incurred; and a significant proportion of the price is withheld until the contract has been satisfactorily completed.

We shall also continue to pursue collaboration where it represents the most sensible procurement course. With the rising costs inherent in new generations of technology, sharing the risks and costs with our allies is common sense; but we must do it efficiently. In this context, we place particular importance on the more open European armaments market now being established by the Independent European Programme Group. This open market will, however, not be designed as a "Fortress Europe"; it will be open to the defence industries of other friendly countries—in particular, those of our non-European NATO allies. The creation of an open defence market on these lines will help ease pressure on national budgets and provide enhanced opportunities for our defence industry.

As we made clear in the Statement on the Defence Estimates, NATO will be the bedrock of the defence of the United Kingdom and our Western allies in the future, as it has been in the past. We will keep up our large and highly-valued contribution to the alliance. NATO's success has been instrumental in changing the international environment. These changes are setting NATO new and demanding challenges. The Government will continue to play their part in ensuring that the alliance tackles them far-sightedly and continues to build on the unparalleled success of the last 40 years. I beg to move.

Moved, That this House takes note of the Statement on the Defence Estimates 1989 (Cmnd. 675-I).—(Lord Trefgarne.)

4.14 p.m.

Lord Irving of Dartford

My Lords, in the past our criticism of the Government's defence policy has been that it was overstretched and underfunded, mainly because of the preoccupation with nuclear weapons and Trident in particular. This made the need for a review essential. Its refusal has made it difficult to establish priorities and many decisions have had to be put off.

The Government have sought to escape from the situation by increasing funds for defence, and we welcome that. The Secretary of State said that what has been negotiated, ensures proper funding to sustain programmes and this disposes of talk of the need for a defence review". I wish that were true. These comments indicate the depth of embarrassment that the Secretary of State has had in recent years at being criticised by almost everyone interested in security and defence—academics, defence correspondents, politicians and, indeed, the Defence Committee of another place. However, he has already discovered that what he has done has not quelled that criticism.

Indeed, even the Government's friends—to quote from The Times of 3rd May—said: Those who not long ago were forecasting a drastic reassessment of priorities are now confident that Whitehall can muddle through". That is not good enough. What are the reasons for the difficulties? First, the increase in the defence budget is not as high as inflation. Secondly, real spending on equipment will be cut by perhaps 10 per cent. from £8.66 billion to £8.24 billion. However, prices for equipment usually rise faster than the overall retail prices index, which is now 7.9 per cent. higher than a year ago. We must also bear in mind that this is the year when the inevitable spending on Trident is near its all-time peak. Conventional equipment will therefore suffer badly.

The Navy faces a cash cut of £100 million, falling from 45.5 per cent. of budget to 42.9 per cent., and other services receive only a small increase. The Economist said that it will be impossible to avoid most services going without some things which they need. It added that permanent programmes will be stretched out longer than they should be, which in the long term will cost money.

Even more important, the estimated cost of 32 major defence projects has increased by more than £2.9 billion during the past year according to figures given by the White Paper. However, the White Paper confirms that the Army will get its seventh regiment of Challenger tanks, and this we welcome. However, the Government's spending plans will not, in our view, provide the necessary equipment for the Armed Forces to do their job.

Of the White Paper in general the Economist of 16th May states: As usual the White Paper contains a mass of verbiage on defence policy. Although the White Paper is designed to be the main account of the government's security stewardship, and although it contains increasing amounts of data each year, it still does not tell the voters what they need to know; low will the cuts be managed, and how much will individual items of equipment cost? We all want to know the answer to those questions.

This is a particularly generous way of putting it—the answer is that despite the complacent remarks of the Secretary of State, he does not know the answer to those questions. There are two areas of particular concern, one of which has been mentioned by the noble Lord and the other relates to the Navy. The Government are committed to sustain the surface fleet at about 50 ships. Finance for the Royal Navy has fallen for the fourth successive year. This is reflected in the continual decline in destroyer-frigate numbers from 55 in 1983—not including those in for refit—to 37 today. I indicated in the last debate that at one stage last year only two-thirds of the number to which we are committed would have been ready to sail if there had been an emergency.

The British Maritime League has also been complaining. Like most of the Government's critics, it starts with a valedictory remark. Its own paper states that the White Paper, is as bland and uninformative as usual, volunteering nothing and assuring us that all is generally satisfactory across the defence field". It was clear in the speech today that there was no criticism of any kind of the Government and that there is an extraordinary complacency with it.

As to the current strength of the Royal Navy in connection with the commitment to about 50 ships, the league states that, only provided that the ordering of new vessels (currently Type 23 frigates) is maintained at the proper level", will the right number be ordered to maintain the figure of 50. That means that 2.6 ships will need to be ordered each year—a rate of ordering that we have never achieved in the past. The league points out that, an interruption of seaborne trade would be disastrous and disruptive of national economies. All military logistic support by sea is additional to the on-going demands of national economies". To show the lack of ships for this purpose, the league points to the fact that, of the 44 product carriers registered in the United Kingdom and the 36 registered in Crown dependencies and dependent territories, only 46 are in the 20,000 to 60,000 dwt range. There is no hint of this failure and shortfall in the White Paper. The league held a seminar, which concluded: It is evident that the increasing lack of merchant shipping under the control of allied governments, places in doubt the credibility of NATO's current strategy of conventional deterrence. Even if the reinforcement of troops can be assured, the subsequent support of Europe with essential goods from overseas cannot". None of these problems comes over from reading the paragraphs of the White Paper.

The view of the league is that the measures proposed to remedy the situation are overstated and unlikely to be effective. This problem is duplicated in the supply of American forces in Europe in times of emergency. There are not the merchant ships to reinforce and supply the troops in Europe, whether British or American.

The second matter giving ground for concern is manpower. Attracting enough of the right recruits proved most difficult last year. That is an understatement. The number of men in the 16 to 19 age group from which the services normally draw 75 per cent. of their recruits has fallen by 10 per cent. since 1983 and will fall by 23 per cent. on current levels by 1994. The Army, and in particular the infantry, is already suffering undermanning as a result. Each non-Gurkha batallion is an average 40 men under strength, and the deficiency is likely to worsen. This serious position should have justified the making of a much more generous agreement about the Ghurkas than the Government have done.

The services are considering a number of ways of making good the shortfall. They include attracting a higher proportion of women, as the noble Lord said, and recruits from ethnic minorities. The RAF will increase the number of women in uniform from 5,000 to 7,000. We are today discussing the discipline orders for the three services. He should reconsider the decision not to issue a leaflet setting out the rights and responsibilities of individuals in the services. Such a leaflet would encourage those who want to be recruited to the services and those whom we want to keep. The noble Lord must strengthen measures to counter bullying in the services. We know that bullying has diminished but we should get rid of it entirely.

Above all, we should be making special arrangements for housing both for existing servicemen and for those who leave the services. All these matters have a bearing not only on those who want to join but also on the well trained people whom we cannot afford to lose. Much more attention should be paid to our reserve forces, upon whom we are so vitally dependent in times of emergency. The White Paper does not indicate the seriousness of either of these matters.

However, these failures of the Government are dwarfed by another and greater failure: the failure to recognise the significance of the events through which we are passing, events so truly remarkable that they should present us with an unrivalled opportunity to shape the future—the break-up of the Russian empire, which has for many decades cast a shadow over the peace of the world. Instead, the Government—it was clearly evident in the noble Lord's speech—have continued to be intimidated by the past. They are unable to detach themselves from the need to have an enemy to hate and cover their inadequacies of vision by highly charged assertions that the enemy remains and we need to keep up our guard. Wise though this may seem to some people, it is becoming almost a preoccupation with the noble Lord and the Secretary of State. It is an alternative to creative thought about how we could help to develop a more harmonious world security.

The Government seem bent on presenting us with false options—whether it is in nuclear weapons, national sovereignty or other matters—instead of joining those willing to make imaginative jumps towards testing the sincerity of those whom we once feared but who were nevertheless once our alllies, or assisting them to make a successful transformation from the authoritarianism of the past to a more tolerant and democratic society. I believe that history will condemn this Government for failing to measure up to the opportunities arising from the greatest movement of history that we have known, which has presented itself almost unexpectedly and which could release us from the fear we have known in the past.

In this connection I commend the examples of both President Reagan and President Bush, particularly President Bush, who seems to have a much clearer vision than the Prime Minister. Does this therefore mean that there is no potential threat from the USSR and the Warsaw Pact countries? The Soviet Union and its Warsaw Pact allies may have no intention of attacking Europe or NATO. I do not believe that they have. We have had assurances from both General Rogers and General Galvin that they do not expect a surprise attack and have not done for a long time. However, it is only prudent that Britain and its NATO allies should maintain adequate military forces capable of resisting such a potential threat. This means adequate spending on defence and also seeking disarmament through verified international agreements. In the past five years, thanks to the vision of Mr. Gorbachev and President Reagan, we have had the first INF treaty. We should be building on that vision.

While we are a long way from a nuclear free world, we share the goal of the United States and Soviet Governments, and indeed of the United Nations, sharply to reduce all nuclear weapons. As long as nuclear weapons exist we are all vulnerable. Britain should play its part in working for reductions and their ultimate verified elimination by the year 2000.

However, many people believe that Mrs. Thatcher does not want to give up nuclear weapons now or ever. Indeed, the development of Trident will considerably increase our nuclear capability. We discussed this only a week or so ago. The Prime Minister has isolated us from the rest of our NATO allies by insisting on the modernisation of Britain's and NATO's short-range nuclear weapons to keep them "up to date". But there is a genuine difference between modernisation and what the Government are doing. The Government suffer from a nuclear addiction, almost a "nuclearphilia", and the Prime Minister wants to keep her nuclear weapons for ever.

The Government have been the only NATO member pressing for early decisions on modernisation. What is clear again, however, in the case of this small nuclear weapon is that what the Government are proposing is not modernisation but enhancement. It is clear to everybody that the Government are out of touch with their allies. The Prime Minister went to Brussels with three main objectives; first, to obtain a specific commitment to replace existing missile launchers with a system with a range of 455 kilometres; secondly, specifically to exclude negotiations over short-range nuclear missile reduction; and thirdly, explicitly to rule out any question of a third nuclear zero.

Even with the Government's extraordinary capacity for presenting every defeat as a victory, the Prime Minister failed in each of these aims. We warned of the danger of destablising NATO by pressing for the modernisation of these weapons. On 31st May the Independent said: Mrs. Thatcher's brave words in Brussels yesterday—"I am very satisfied"—masked a considerable defeat for Britain. Not only was the argument lost over short-range missiles but London had to suffer a last minute defection by a US administration which it had faithfully supported". Unless the Prime Minister and the Government change their attitudes and respond to the changes in the way that the United States and Federal Germany have done and agree with President Bush that as freedom and democracy spread in Eastern Europe the role of NATO and the Warsaw Pact should shift from emphasis on deterrence to what is necessary for defence, they will be in danger by their intransigence of ensuring that it is the United States and Federal Germany that will be the real leaders in Europe.

Our aim is to encourage the reduction of the forces of the Warsaw Pact and NATO and ensure that they are designed as far as possible for defensive purposes. The Government's attitude both in Brussels and Madrid had the effect of limiting our influence on the changes proposed. We should aim to remove asymmetries on both sides and thereby secure conventional stability in Europe at the lowest possible level. This is the real modernisation that is required.

I believe that we shall never be forgiven if we fail to take advantage of the opportunity given to us to secure a real European peace which can enable us all to live together without fear and to direct the immense sums that we have spent over the past 40 years on armaments to constructive and peaceful purposes throughout the world.

4.30 p.m.

Lord Mayhew

My Lords, I shall begin with a word of congratulation to the noble Lord, Lord Irving, and to his colleagues on the Opposition Front Bench. The defence policy that they have been advocating for years in this House has now been adopted by their party. It is not a very good defence policy, but what an improvement it is on what went before! Now we must look to the Opposition Front Bench for guidance as regards Labour policy instead of to the noble Lord, Lord Jenkins of Putney.

A great deal of what the noble Lord, Lord Irving, has just said is common ground between his party and mine. But he did not mention one point that I should like to stress: it concerns a matter for which the noble Lord the Minister is personally responsible. I am profoundly worried concerning the reports we get of the efficiency of the Procurement Executive. This year one report after another has come out with disturbing conclusions.

For example, in February the National Audit Office declared that the unreliability of our defence equipment was costing MoD more than £1 billion a year and that the ministry "failed to take remedial action". The House of Commons Select Committee on Defence revealed that there is no monitoring by the Procurement Executive of the offset agreement which we made with Boeing over the AWACS deal for £1.5 billion. There has been no monitoring at all as to whether Boeing has been fulfilling its obligations.

The same committee criticised delays in the production of warheads at Aldermaston. The courts are now considering charges of fraud in connection with 20 Marconi contracts with the Ministry of Defence—20 contracts! This year the Public Accounts Committee has criticised "lax management" of the £6.5 billion estate which the noble Lord administers. The estate includes half a million acres of land.

Perhaps most disturbing of all is the report made in May by the House of Commons Select Committee on Defence which concluded that the Procurement Executive is so badly understaffed that it cannot police the defence industry adequately. It is 12 per cent. to 16 per cent. below establishment, which means higher costs, more and longer delays and higher risk levels.

Especially worrying is the departure of staff to defence contractors. I hope the noble Lord will reply particularly to this matter when he comes to wind up; namely, the flow too soon of too many people at too high a level from the ministry to the defence contractors. What is worrying here is not only the inefficiency that is created but also the obvious opportunities for impropriety. I hope the noble Lord can tell us exactly what regulations there are controlling this situation; how they are applied and whether they are successful. If they are not, I would like him to tell us what action he has taken.

The White Paper has nine closely-printed pages about the Procurement Executive. From beginning to end it is a story of unrelieved success. The White Paper states: Good management by the Procurement Executive contributes significantly to the ability of the British Armed Forces to meet our defence commitments … The task is now to build on the successes already achieved". This will not do. There is no mention at all of these high-level reports—not gossip or newspaper reports but high-level reports. Therefore I hope that when the noble Lord comes to reply he will give us a full statement. I, and I am sure the whole House, will want a full statement as to where matters have gone wrong; how the Minister proposes to overcome the difficulties and perhaps an apology for the inadequacy of the White Paper on this point.

I now turn to the White Paper as a whole. Like the previous three White Papers, it underrates the importance and the likely durability of the changes in the Soviet Union and Eastern Europe. As a result it is too negative and too conservative. Here I agree with the noble Lord, Lord Irving. The theme is that which was advanced by the Minister at Question Time this afternoon, in that negative, combative and confrontational manner, "We want actions and not words". The White Paper states: These are early days and we shall be looking for hard evidence, in the form of actions rather than words, that the 'new thinking' represents a genuine and lasting shift in Soviet policy". Certainly in my political life I have seldom met a politician whose words were followed so quickly and so faithfully by action as those of Mr. Gorbachev. Who else can we be thinking of—Mrs. Thatcher? Not at all. It is hard to think of a Prime Minister about whom so much can be said.

When Mr. Gorbachev promised to withdraw from Afghanistan I can recall the Government saying that they wanted action and not words. So Mr. Gorbachev withdraws from Afghanistan and takes a new and wholly positive attitude to Namibia, Kampuchea and the Middle East. The Soviet Union now actually pays its proper contributions to the United Nations—a change of extraordinary originality. The Government say that the Soviet Union does not fulfil its obligations concerning arms control. We have seen the pictures—and they are true pictures—of the SS-20s being destroyed stage by stage in obedience to the INF treaty. This afternoon even the Minister had to concede that at least a start had been made with the withdrawal of tanks from Eastern Germany.

Yesterday I saw a typical news item in The Times, and we get many of them now. It reported: The Supreme Soviet approved yesterday a proposal by Mr. Nikolai Ryzhkov, the Prime Minister, to discharge students before they had completed their two-year service … 175,000 students would be relieved of military service in the next two months". That is not a matter just of words but of actions which can be paralleled many times.

The White Paper says in this regard that we want progress on the home front. It states, Progress in arms control has not yet been matched by comparable steps over issues such as human rights, equally important for the creation of lasting confidence between East and West". But again Mr. Gorbachev's words have been followed by actions as regards human rights in the Soviet Union. Of course it is not a democracy yet and no one pretends that it is. But there has been a spectacular and important increase in the freedom of the media, the churches, for historians and for travel. The Soviet Union has had a very fair shot at a first free election and a first free parliament. Political prisoners have been released.

I find the attitude of the Government and some of their Back-Benchers quite extraordinary. They seem to hanker after the old black and white certainties of defence policy in the Stalin age. But we are now in a new age and the question is whether we should react to it and whether British defence policy in the White Paper and our budget should take account of it. Of course if one does what the Government constantly do and make a head count of the weapons of the Warsaw Pact countries that still shows a clear balance in their favour. That is so. However, it is also true that the unity, the motivation and the real war potential of the Warsaw Pact countries has profoundly diminished over the years.

How realistic is it now to include in the balance against NATO, as the White Paper does, the armed forces of Poland? The armed forces of Hungary and Romania are a threat not to the West but to each other. Further, what about the military value of Soviet troops raised in Armenia, the Ukraine, the Baltic States and Georgia? Moreover, how far is the Soviet economy capable of contemplating war at this time?

How long would such situations take to reverse? It would not take long, I suppose, to overthrow the Gorbachev regime. But, after that, how long would be needed to reindoctrinate the peoples of the Warsaw Pact; to reunify them; to persuade them again that the West must be confronted and not copied; and to put the Soviet economy on a war footing? It would take a very long time, if indeed it was ever possible to do so.

The question is: should our defence policy reflect this new situation? The Government say, "No, it should not". The White Paper says, "No, we should take no account of it, and we should continue building up our conventional and nuclear capacity". On conventional capacity, the White Paper says: The considerably increased sums allocated to the defence budget since 1979 have enabled us to set in hand substantial enhancements to our conventional forces the benefits of which are now beginning to be seen and will continue to be felt well into the 1990s … We have charted a clear and consistent course for the past nine years. The task is to move ahead steadily on that course". That is to say, there should be no change, or perhaps a small increase, in our conventional capacity in the years ahead.

As regards nuclear capacity, the White Paper calls for a huge increase in Britian's nuclear capacity. It calls for new, more powerful and accurate short-range nuclear weapons and for an increase, at least five-fold, in our strategic capacity. Thus the Government examine the changes in Eastern Europe and the Soviet Union and come to the conclusion that we should increase Britain's military capacity beyond what they thought appropriate in Brezhnev's day.

That could not be a greater condemnation of the conservatism, in the worst possible sense, and the conservative thinking of the Government and the Ministry. We are now spending 4.3 per cent. of our gross national product on defence. In the present circumstances, that is over-insurance. It is too much and should be cut.

The White Paper also takes too conservative and negative a position on disarmament and arms control. Not all Conservative governments have been failures in this field. For example, the Heath government and the Macmillan government had certain achievements to their credit. There was the Partial Test Ban Treaty; there was the Biological Weapons Convention; but nothing like that can be pointed to in the case of this Government, nothing at all.

The Government are in a good position if they wish to start negotiations on a comprehensive test ban treaty. The prospects are very good and it is now very much more practical than it was before. But, the Government do nothing. The Government are best known, as the noble Lord, Lord Irving of Dartford, said, for their lone rearguard fight in favour of more modern short-range nuclear weapons. Mrs. Thatcher has succeeded in going some way to ensuring a future for such weapons, at the cost of straining inter-allied relations. Sometimes I think that Britain's most destructive weapon system is the handbag.

Fortunately, however, Mr. Bush, Mr. Gorbachev and Chancellor Kohl take a positive view, both as regards the political changes and as regards the prospects of arms control and disarmament. As a result of their work, and nothing to do with the Government, there is at last a real prospect of substantial cuts in conventional weapons in the near future. It could be possible to agree on conventional parity by the end of 1992 and a further 25 per cent. cut five years later. That should be our aim.

In the meantime, it is the view of my noble friends and myself that negotiations should begin immediately to reduce short-range nuclear weapons to parity by the end of 1992; and, in five years' time, when the second stage of conventional disarmament is achieved, to eliminate such weapons altogether.

It is good to know that the Government and their allies are making contingency plans covering types of equipment to be scrapped if the disarmament proposals succeed. But, let us suppose, as is possible, that political changes in Europe take a new and even more radical turn. For example, would the Government and their allies be ready if the democratic tide in Poland and Hungary seeped into East Germany? That seems quite possible. Mr. Honecker, who keeps the regime together, is aged 76 and in poor health. Moreover, Mr. Gorbachev has given no sign that he will go to its rescue, if the regime comes under pressure; indeed, rather the opposite. Discussion of reunification and neutrality is increasing in Germany. I ask whether the Government are conscious of that fact and whether they are considering it and making contingency plans with their NATO allies. What should our attitude be? Should we encourage this and the disengagement of the Warsaw Pact forces and the NATO forces which would inevitably accompany it; or should we discourage it and risk the Russians guiding the whole process? Alternatively, should we—and I suspect that this is what the Government are doing—shut our eyes to all those possibilities and wait to be taken by surprise?

Last week Mr.Gorbachev said: It is likely we will come to the final stage, the break-up of the military blocs". What is the Government's view here? Is that also their long-term aim? That would be a good question for the noble Lord to answer when he replies.

NATO was never meant by its founders to be a permanent fixture. Indeed, if we had been faced by Gorbachev and Shevardnadze 40 years ago instead of Molotov and Stalin, it would not have been possible to bring the countries together in NATO and Germany would certainly never have been divided. The great success of NATO has been that it has now created conditions in Europe in which it is possible to foresee a common security system for East and West without confrontation and without military blocs.

The failure of this White Paper and the failure of the Government's defence policy is that, at this time of enormous opportunity, when new thinking is not merely legitimate but obligatory, all they offer is the mixture as before.

4.47 p.m.

Lord Pym

My Lords, whatever else can be said about the Gorbachev era in the Soviet Union, it heralds a period of great political change; that is, not only in the Soviet Union but also in Eastern Europe and further afield, as we have seen in southern Africa and the Middle East. No one knows how far the radical reforms of the present Soviet leadership will go or whether they will turn out to be a success or a failure. But, either way, the political scene is altered dramatically. No longer are the countries of Eastern Europe in the iron grip of the Soviet Union as they have been for nearly 50 years. Of course they still live much under the shadow of the Soviet Union, but it is difficult to imagine the reimposition of iron control, except at a political price so high as to be self-defeating.

The failure of the economies of all those Communist countries forces them to look for other methods as a basis upon which to run their affairs. The self-evident success of Western countries by comparison causes those Eastern countries to look at the West as an alternative political and economic model which would enable them to raise their own miserable standards.

The development of events on the other side of the Iron Curtain during the past two or three years ensures, in my view, a totally new political scenario. There are all kinds of forms that that may take; but in whatever form it comes, it will be new. Therefore political change is a fact.

In contrast, the military scene has hardly changed at all, at least not yet. We all hope that it is going to change, and there have been some undertakings on their side that it will change. Of course we all hope that it will change for the better, and there are some cogent reasons to think that it will. But the reality today—the facts on the ground—are that the military imbalance still continues to move against us; to favour the East and disadvantage the West. It is very difficult to get that across to people because they are led to believe that "peace in our time" has arrived. It has not; not yet, at any rate. We shall all go on working for it, as we have for decades, until it does arrive; but in the meantime we have to deal with the reality as it is, and not as we would wish it to be, or pretend that it is.

In the context of this debate, the present dynamic and uncertain situation presents an unusual mixture of difficulties and opportunities. The military strength of the Warsaw Pact is still overbearing, ever present and must continue to be deterred by whatever mixture of forces is required. That necessity is in conflict with the general mood of optimism prevalent today.

That optimism, however refreshing it is—and it certainly is refreshing—contains two dangers. The first is the temptation to cut the defence budget ahead of a negotiated arms agreement, especially in the conventional field. Our recent experience with INF has proved the fundamental truth that one must have something with which to negotiate if a successful agreement is to be reached. It would be sheer folly to indulge in any arms reductions unless and until the imbalance of the Warsaw Pact is corrected.

The second danger of too much optimism lies in the possible effect on the morale of our forces. That morale is high, and I support strongly what my noble friend on the Front Bench said about them in opening the debate. I am confident that your Lordships will want to support the Government in whatever steps are necessary to maintain their morale.

In that task, the defence budget as a whole is just as important as the level of forces' pay. I trust that the Government will take a clear and decisive view of their expenditure priorities. Of course the pressure for savings must be maintained; of course we must get inflation down; of course some programmes will have to be trimmed or reduced; but it is the priorities that matter. The Government have always, and rightly, given high priority to all the forces of law and order. It is vital that they continue to do that now.

Looking beyond the immediate future, it is clear that the political changes to which I referred earlier will open up a whole new range of factors to be assessed and taken account of by our defence planners. The exceptional simplicity of the cold war of the past 40 years has gone. New habits of thought must be created. In military terms, the cold war is still with us. It still exists, as the statement in the White Paper makes clear; but a lot else now exists besides which did not exist before.

The task facing NATO today is to discover a new flexibility in thought and action; to discover a new ability—on a scale not previously needed—to assess and respond collectively to the completely new political situation that is developing.

The new factors that have to be taken into account and prepared for range from, at one end of the scale, the possible failure of the present Soviet leadership and the much more aggressive line that their successors might take to, the other end of the scale, the achievement of a series of arms control agreements leading to less tension and lower levels of arms all round. However events unfold in the next few years, there are far-reaching implications for the defence forces of all the allies.

That uncertainty about the future is itself another new factor, and the alliance must adjust to it while remaining united. It is much easier for an alliance of 16 independent and highly individualistic nations just to carry on as before; but that may very soon not be an option. For example, 10 years ago I remember sharing with General Rogers, when he was SACEUR, my belief that, if the alliance had been able to start again with a clean sheet at that time, it would have been possible to deploy our joint forces more efficiently. That was because circumstances had changed substantially in the intervening 30 years. But of course the political complications of even contemplating such a change made any idea of it impractical and of course unwise and not be to be considered. Today I do not think that such arguments serve us any longer.

We are in a situation that is rich in opportunities for creating a lasting peace. If we play our cards right, if we succeed in negotiating an arms deal on conventional weapons and after that a series of other arms deals with verification and the rest, if the imbalance in forces is corrected and if the Gorbachev reforms develop over the next few years, as looks quite probable—if all that happens, the world will look very different.

A great deal of thought needs to be given now to how the alliance will handle that situation. It will raise all sorts of new issues for the alliance as a whole and each member of it. For example, in our case the implications are probably greater for the British Army of the Rhine than for the other services, and we need to be thinking about that now. So we have the task of preparing for what may well be a completely new era while never lowering our guard or allowing our deterrence to become ineffective. That calls for a very careful and thorough presentation of the scene as it unfolds to all our electorates; and that will call for a continuous and continuing presentation as the situation changes, with Ministers very much to the fore but others coming in too.

I should like to say here how very valuable I believe that General Galvin's contributions are. However the media decide to play it—we heard criticism of them at Question Time here today, as we have heard it on other occasions—the challenge for us is to retain the overwhelming support among our electorates for the maintenance of our defences at whatever level is necessary at the time. I have every confidence that under this Government that will be achieved.

4.58 p.m.

Lord Hill-Norton

My Lords, I found this year's White Paper and its predecessor well written, well presented and clearly laid out. I thought that the photographs were rather dull and hackneyed. They are never very good. It is a pity, I always think—I have said so in your Lordships' House before—that other great departments of state are not put through the discipline of accounting for their stewardship once a year. If they were, I do not believe that any of them would do it better.

I welcome and agree with the thrust of the first chapter, with its analysis of the past, present and future state of the alliance and the current threat. Some noble Lords who have spoken today seem to have the extraordinary notion that the threat has disappeared. I do not share that notion.

I found the essays on the philosophy of all those matters to be helpful, especially that on deterrence at the end of Chapter 2. I recommend that both the noble Lords, Lord Irving and Lord Mayhew, read it again. The importance there described of the regular modernisation of all our arms, both conventional and nuclear, could clearly repay further study.

We must be clear what deterrence is about. It is about ensuring that our posture carries credence in the only place where it matters, which is in the minds of our only major potential enemy.

I thought—a triviality perhaps—that the description of the size and scope of the exercise programme for all three services was very valuable. More could be made of this, rather on the lines that the noble Lord, Lord Pym, has just suggested, in convincing the public and the electorate that our people really are on the job.

However, it will not surprise your Lordships, I am sure, to know that I found some of the content a good deal less than satisfactory. I noticed that in paragraph 302 it is once again claimed that there are 100,000 regular soldiers, sailors and airmen available for the ground defence of this country in war. I have said more than once before, and I say it again, Ministers must by now know that that is not true. There is indeed no useful manoeuvre force and literally hundreds of vital key points will be undefended. The people who will confirm what I have just said are the commanders concerned, who never tire of saying so.

Small numbers of the highly trained and versatile Spetznaz forces could create havoc among our essential communications, public utilities and our whole transition to a higher state of readiness, should that unfortunately ever be necessary. We need a small, lightly armed, cheap to maintain home defence force in support of the very small number of regular and reserve forces which will be available.

It is disappointing to read in paragraph 356 that no decision has yet been reached about the assault ships. It is over two years since the noble Lord, Lord Trefgarne, assured me in writing that the Government had decided to maintain an amphibious capability. Yet we read that feasibility studies are still being considered. Time is running out, if it has not already done so. I have no idea what the naval staff would prefer as a solution. But I know that the two ships "Fearless" and "Intrepid", which have done yeoman service, are now old, very old, and have always been extremely expensive in manpower. Perhaps when the noble Lord replies he will tell us when we may expect a decision in this matter.

I spoke several times and at some length in this debate last year about the numerical size of the destroyer and frigate force, to which the noble Lord, Lord Irving, gave a good deal of attention. I have contrasted the repeated claims by Ministers that they intend to maintain "about 50" with the realities. I must say again that in current expectations of hull life we must order two-and-a-half or three such ships a year if we are to maintain that number.

We see from the White Paper that only 15 have been brought into service in the 10 years since 1979. We also see that today, 13th July, there are only 47 or 48 available in various states of readiness, of which no fewer than 20 are fast becoming obsolete. Perhaps I may repeat that successive NATO supreme commanders and commanders-in-chief of our fleet have publicly stated that even if 50 were available, that is nothing like enough. I know, because I have done it, that on any objective analysis of the operational tasks to be carried out for NATO—never mind our national out-of-area capabilities—it would demand no fewer than 60, and modern ships ready for operations at that.

I am concerned too about manpower for all three services. There are some alarming words about this in Chapter 5 of the Statement, to which the noble Lord, Lord Irving, has just drawn attention, and I warmly agree with what he said. I am particularly alarmed over the demographic trough to which the noble Lord, Lord Trefgarne, made reference in his opening speech. There has been a reduction of 10 per cent. in the last five years in the pool of young men available and there will be a further reduction of nearly a quarter—23 per cent.—in the next five years. Those are very big slices in the number of people available. I very much doubt whether the remedies proposed in the statement will match that challenge. It certainly seems bizarre in these circumstances for the Government to have decided to cut the strength of the quite splendid Brigade of Gurkhas to 4,000.

These are inescapable facts, it seems to me, and with the added likelihood of reductions in conventional forces being required by negotiation, I support the notion put forward elsewhere recently that by providing very much increased fire power, numbers in the Army could be significantly reduced. If that were done, the diversion of manpower and the financial savings made could be used to increase the holdings in both the Royal Navy and the Royal Air Force which by general consent are now under strength.

As concerns my own service, the Royal Navy, these problems are exacerbated by severe manpower overstretch which has already had to be met by leaving complement billets in operational ships unfilled or filled by less qualified people. This is a truly vicious circle. Overstretch makes conditions of service so unpleasant that men are persuaded not to re-engage or, in extreme cases, to seek premature voluntary release. That creates a bigger shortfall, particularly of trained men.

Your Lordships may not all be aware that since 1969 each of the services has been reduced by about 25,000 men. This has borne hardest on the Royal Navy, whose establishment has been cut by 30 per cent. since 1969 and 10 per cent. in the last 10 years.

Perhaps the most alarming deficiencies in the whole statement are not at all disclosed in the four very short paragraphs about our merchant fleet in Chapter 3. I must tell your Lordships that these are both actively misleading and foolishly optimistic. Indeed, far from finding the signs encouraging, as suggested in paragraph 332, all the signs are quite the reverse. This point was emphasised by the noble Lord, Lord Irving. The facts, which I obtained in a Written Answer in March are deeply disquieting. They deserve wide promulgation.

Since 1975 the number of United Kingdom-owned merchant ships registered in our islands has gone down from 1,600 to 400. Put another way, our share of world tonnage has declined from 4.6 per cent. to 1.2 per cent. What is almost worse is that in the same period the number of officers in the merchant service has declined from 35,000 to 10,000 and the number of ratings from 51,000 to 18,000. In other words, the ships have gone down by a factor of four and the officers and men by a factor of three. If Ministers find this "encouraging" it is time that they came back into the real world.

What these frightening figures mean for defence—never mind the effect on our formerly great worldwide maritime commercial presence—is that, as I said last year, we could probably no longer mount even such a limited operation as that which recaptured the Falklands seven years ago. In the context of a war involving NATO, all suitable British-owned deep water general cargo vessels would be required to direct support of the Royal Navy and for Transatlantic reinforcement and resupply. All the cross-Channel ferries and coastal ferries would be required for reinforcement of Europe. There would then be no vessels of those types available for our economic or civilian re-supply. Even if ships from other countries could be bought or leased—a solution often offered by Ministers—there would be no British officers or ratings to man them.

Moreover, our recruitment and training base has been allowed to shrink to the point where it is difficult to sustain the numbers we now have, much less increase them. Quite apart from the effect which this all has on defence, which is the matter before us today, I wonder when, or perhaps if, the Government are ever going to overcome what another former Chief of the Defence Staff recently called their sea-blindness.

Perhaps I may leave the statement and make one or two remarks which I think are appropriate on the general military situation of NATO today and in the medium-term future. Following the 40th anniversary celebrations of the alliance and the dramatic proposals by President Bush at the recent meeting of the heads of state and government, I think there is something to be said. Although much has been done to improve NATO's stance in recent years, it is only too clear that much more remains to be done if our military preparedness is to meet the political requirements. They are not military requirements.

Perhaps I may read what SACEUR wrote two months ago: it is of great concern that in 1988 all but three of the 13 nations that take part in the Force Goals process failed to achieve even three-quarters of their Conventional Defence Improvements highlighted objectives". That must be bad news for all of us, and we must ask why. Is it the smiling face of Mr. Gorbachev and his brilliant public relations offensive? We have heard this afternoon that it has sucked in at least two noble Lords. Is it a failure to understand that only the robust readiness of NATO has kept the peace for 40 years? Is it the quarrels about the modernisation of some nuclear weapons? Is it that the numbers of those of us who actually experienced global conventional war and all its horrors are now much diminished? I believe that it is a compound of all those, most of which were mentioned in the excellent debate initiated by the noble Lord, Lord Home, in April.

I am quite certain that we should not be seduced into any slackening of our defence efforts, which could not fail at once to lead to a diminution in our security. It has frequently been said—it has been said this afternoon by the noble Lord, Lord Trefgarne, and I repeat it now—that not a single reduction has yet been made in Soviet military power, for all the declarations of benign intentions that we have heard from the Soviet President in the five years that he has been in charge. It would be the height of folly to base one's assessment of any threat upon intentions which may change overnight. I should have thought that recent events in China would have made that starkly clear.

I said last year that reductions in United States manpower in Europe were inevitable. They are part of the proposals made by President Bush. I do not think we should be too concerned over that. The American commitment to Europe is firmly ensured, not only by the large number of their troops and their families in Europe, which will remain, but by the identity of their interests and ours in what we believe is worth defending. Nevertheless, I should be happier if there were less talk about strengthening the European pillar of the alliance and more about actually creating one.

I do not want to go very far into the nuclear minefield which is so popular a topic for amateurs, but perhaps I may make three points. First, we must agree that any attempts to discuss nuclear and conventional reductions together are doomed to failure, almost certainly because one can never agree about precisely what equals what. Secondly, should sea-based tactical nuclear weapons ever come to be included in disarmament negotiations, as seems highly probable, I would not shrink from agreeing to their total elimination. There are several good reasons for believing that they may actually be an embarrassment to local commanders. They could certainly be removed by multilateral agreement without any diminution in our security.

Finally, I have no doubt that the line taken by the Government over the modernisation of Lance is absolutely right. Equally, I have no doubt that everything that the noble Lord, Lord Irving, said on the subject is absolutely wrong. I also hope that some of those who seek a nuclear-free Europe will soon understand that that has been the long-term aim of the Soviet Government for 20 years—and not for benign reasons. Double zero, or even more so the triple zero to which it might lead, contains the seeds of disaster for everybody. War, which today is almost impossible, would instantly become possible once again. Moreover, if there were another conventional war in Europe, with the balance of forces which exist today, we should almost certainly lose it.

5.15 p.m.

Lord Kennet

My Lords, I shall take up later one or two points made by the noble Lord, Lord Hill-Norton. I wish to address myself more to the context than to the contents of this year's Statement on the Defence Estimates. The main element of that context at present is NATO's new comprehensive concept. That is a good and encouragingly German name. May it serve as a permanent gravestone for Anglo-American reductionist pragmatism in the field which above all others in the world today requires the broadest overview, that of arms control.

The context of that document, and the context of everything we do these days, is President Gorbachev, as every speaker so far has pointed out. The press is still dominated—though Western governments decreasingly so—by the notion that there is a propaganda war between him and us, and that he is winning it because he unscrupulously exploits the naivety of our peoples, which he can do because he can lie without being caught out, and we cannot. That is not the case. He wins, when he does, because he is an educated man speaking to increasingly educated peoples in Western Europe. I suspect it is a great relief to most Western Europeans to read, for instance, the words in his recent speech to the assembly of the Council of Europe: To do everything possible … in order that man may continue the role destined for him on the earth and perhaps in the universe". He also said: In the present interconnected world, geopolitical concepts born of another epoch turn out to be just as helpless in real politics as the laws of classical mechanics are in quantum theory. Unless a leader thinks like that, he can do nothing. I do not know if any of the leaders in this country think like that. They certainly do not talk like that, and I wish they would. Mr. Gorbachev knows some history. So do we. Not all our leaders in the West do. Our own Prime Minister has just suggested that the ancient Greeks invented human rights, that modern human rights began with that society. As many people know, that society was economically based on slavery and socially based on the complete subjection of all women except prostitutes. She also implied that our own Magna Carta was more of a landmark than the French Revolution. She might have remembered the splendid simplicity of the authors of 1066 and All That: "except the common people". Magna Carta regulated relations between the king and the barons.

This is not merely an objection about a fellow citizen. It is a matter of immediate politics. There is in the comprehensive concept a dangerous threat of insistence on human rights and individual liberty. I choose the word "dangerous" with care. In several places it subjects the willingness of the West to engage in far-reaching disarmament to: the individual's basic rights and freedoms … including the right of political choice". Those are most desirable aims, as no one here would doubt. But they have never been achieved in Russia. In saying that we will not disarm until they are, we are asking the Soviet Union not merely to dismantle the Stalinist systems, as they are doing, but to stop being Russian. Are we really to say no disarmament until Russia becomes a multi-party democracy, or a collection of multi-party democracies? Are we to say: "No, such and such a weapon system will not be eliminated until the persons named on the attached list have formally deposed that they are satisfied with their freedom of political choice"?

That "linkage" was never proposed by the United States before President Carter, and has never been carried this far until now. We should be prepared for those provisions in the comprehensive concept to be unwisely exploited by the US military-industrial complex. An aside: Article 13 of the concept requires the: basic human rights … to be anchored in law and practice". Does that mean that the Government, the Prime Minister, by signing that, has promised to anchor our basic human rights in our law and practice? Does it mean that the Government will now do that?

The comprehensive concept has one other great defect. By confining all its fine objectives within the present framework of CSCE (the Stockholm series) and the large number of conferences which have now derived from it, useful and hopeful though they are, it in effect precludes naval disarmament. Navies have again and again been explicitly excluded from that system of conferences. The United States Administration has explicitly declared that sea-launch cruise missiles (SLICMS) are not "strategic", though of course they are to Europeans on both sides. That means that they are not considered anywhere. But if they continue uncontrolled, Europe continues at risk of total destruction by either superpower. The US Navy is still arguing publicly for its general exemption from the process of disarmament, and requiring our navy to parrot this increasingly silly theme. That is what "paramount loyalty" seems to mean.

Meaningful disarmament will not be obtained this way. President Bush announced a great advance in the US position in Brussels when he accepted that disarmament will not be achieved by considering a tenth of the field here and a tenth of the field there, but only all together. However, there is a real danger that this new understanding may be aborted by continuing United States unwillingness to discuss navies, that is, to discuss arms control comprehensively.

The Soviet Navy appears to be decreasing in quantity if not necessarily in quality. It has recently stopped all submarine patrolling off this country and off West Africa. Since 1986 only one Soviet submarine has been spotted in the Western Atlantic where they used to operate so intensively. That is estimated to constitute a 10 to 15 per cent. decline in "operating tempo" by the Soviet Navy. If any of that is wrong, perhaps the noble Lord, Lord Trefgarne, will inform the House when he winds up the debate.

To say this is not to suggest that Western navies should be reduced overall, or reduced to equality with the naval forces of the Warsaw Pact. The continuing and terrifying reduction i n British flag shipping, which the noble Lord, Lord Hill-Norton, put to the House with such trenchancy just now, has been ably but not convincingly glossed over in the estimates statement. I shall go no further because I could not put the case as trenchantly as the noble Lord, Lord Hill-Norton. I back him entirely on that point.

The more we hope to rely on conventional deterrence and the less on nuclear, the more we must ensure that we have credible capacity to protect transatlantic and cross-Channel shipping for reinforcement, for military supply and for civilian supply. The noble Lord, Lord Hill-Norton said that there was nil for that at present levels. We must insist that navies be brought into the framework of qualitative change and operational restraint which largely constitutes the CSCE system.

That special US aberration, the Forward Strategy at Sea, which involves tailing Soviet bombers through the northern seas in a fire-first mode—about which I have often spoken before—still goes on under the name of Forward Defence. It is condoned by the Defence Estimates Statement. Forward Defence is a name which smells sweet enough on land when it refers to the defence of the German people, but that is a borrowed sweetness when it comes to be used at sea. Admiral Larson, Deputy Chief of Staff of the US Navy, has said: Stability to the Soviet Union is having absolute predictability. To the USA stability is having the flexibility to deploy our naval forces in a way to cause our adversaries to be concerned about what we might do". That is directly at odds with the comprehensive concept and with the Heads of State and Government declaration from Brussels the same day. Both documents repeatedly emphasise predictability, and that statement ought not to have been made. All NATO's bona fides are at risk from senior officers thinking and speaking in this way, contradicting their own President.

A related problem is the hitherto secret NATO rules that, if there is an apparent air threat, the United States Air Force reacts first. That is a problem because the US Air Force, with what its own Vice-Commander in Chief in Europe, General Rees, has called its "imperative" need for a contuining "capability" for "offensive action", and with its deep interdiction raids, possibly nuclear, is not at the moment a stabilising force. The comprehensive concept requires that it should be a force for stability, predictability and transparency.

I come now to the Prime Minister's beloved Lance replacement. How that sticks out in this document. The paragraph concerned would be understood even by a Martian as typical examples of King Charles's Head drafting. One can hear in the very wording the exhausted sighs of the all-night negotiators: "Oh, all right, let her have it". There is no military need to replace Lance by something with higher yield and longer range, or possibly to replace it at all. The world is full of a number of weapons systems—why the fuss? What is needed is the elimination of imbalances; in Mr. Gorbachev's words: and I mean all imbalances". That is best done by reductions, not by increases.

As usual, the manner of the Prime Minister did as much damage as the matter, if not more. What is the point of those gruesome attacks on the Continentals for the sins of their fathers? Do they have to remain frozen in attitudes of passionate thanks to us for having restored their liberty, when they so cravenly cast it away, for another 40 years? Is it still West Germany's duty to remain divided and obediently to act as advanced munitions depot and decoy for the Atlantic democracies, of which we are the least democratic?

Still, the comprehensive concept itself is a worthy document and goes a long way towards being adequate to the times. The very phrases, just and lasting peaceful order in Europe", and, unnatural division of Europe and particularly Germany", may sound bland, but they are an achievement. They override any particular insistencies, and they will not be forgotten.

Like many noble Lords, I see much hope in President Gorbachev. I was non-plussed by the flag-waving, the arm-waving, of the noble Lord, Lord Trefgarne, at Question Time today when he pointed out the well-known facts that Mr. Gobachev had not done various things which he had not undertaken to do whereas, on the other hand, he had done certain other things which he had undertaken to do. One cannot blacken a man by pointing out that he has not done a thing that he has not said he would do. What is the point of that? It cannot be that the noble Lord, Lord Trefgarne, wishes the House and people to believe that Mr. Gorbachev has undertaken to reduce tank production. If it is not that, what can it be except a wish to queer the pitch on behalf of this country for the future disarmament process in general?

I repeat; I see much hope in Mr. Gorbachev. We must never forget his vulnerability. He is partly in our hands. I see more hope in President Bush than in President Reagan. Although he does not have Mr. Gorbachev's imagination and although he, like Reagan, tolerates boors and numbskulls in his Government and embassies, yet he showed at Brussels a stubborn constructiveness which, even if belated, could serve the world well. I hope that he is not tempted today to stir up trouble in Eastern Europe. It took a long time and considerable difficulty for us to dismantle the British Empire when we had to. If the process is moving in the right direction in the Soviet Union, let us encourage but not frighten the horses.

I wholeheartedly welcome the recent activism of Mr. Genscher in Germany. Europe needed that, and it was skilfully and determinedly done. In France and Italy the Governments are unspectacularly but well prepared for the new civilian Europe as it seeps into existence through the manifold channels of diplomacy and international organisation. Let us, here in our island, not lag.

5.34 p.m.

Lord Colnbrook

My Lords, I shall be brief, first, because so many who have spoken and will speak in the debate know so much more than I do about defence matters as a whole; and, secondly, because I have an inescapable engagement this evening which may mean that, if the debate is prolonged, I shall not be in my place to hear my noble friend the Minister reply. If that happens, I hope that he and the House will accept my apologies and forgive me.

I shall confine myself to one subject. I find that I am the third speaker in a row to talk about it. The noble Lord, Lord Irving of Dartford, referred to it briefly, the noble Lord, Lord Kennet, at some length and the noble and gallant Lord, Lord Hill-Norton, at considerable length and with great force. However, I make no apology for returning to the subject which causes me and so many other people so much anxiety; namely, the continuing decline in the size of our merchant fleet and the number of officers and men to man it. I hope that the fact that so many speakers are talking about it this afternoon will bring home to my noble friend and his colleagues how much it exercises our minds and how keen we are to see more being done than is the situation at the moment.

This subject is raised year after year; and I regret to say that year after year we are met with what I can only call government bromides. Last year in this debate my noble friend Lord Glenarthur, replying for the Government, brushed aside our anxiety with such phrases as, "We are introducing a number of measures to help" and, "We shall continue to do whatever is necessary". This year, the defence White Paper states that: the Merchant Fleet is at a level that is still generally above that needed to meet the wartime needs of the armed forces". If my noble friend the Minister believes that, he is the only man whom I have met who does. Last month, I attended a NATO conference in the United States called SEALINK—a very appropriate name. It was organised by the Supreme Allied Commander Atlantic, Admiral Frank Kelso. We were addressed by a number of the most senior figures in NATO—the Secretary-General, Doctor Manfred Woerner; the Chairman of the Military Committee, General Wolfgang Altenberg; the Supreme Allied Commander Atlantic himself; the United States Deputy Secretary of Defence, Mr. Richard Atwood; and Admiral Isaac Kidd, a previous Supreme Allied Commander.

Every one of those speakers referred to the absolute necessity, in the event of conflict in Europe, of having enough ships to bring vast quantities of men, munitions, armaments and supplies of all kinds across the Atlantic, and expressed severe doubts about whether we could do it even today with the ships available.

The Secretary General of NATO said that our ability to resist aggression was totally dependent on our ability to reinforce by sea. General Altenberg quoted the Supreme Allied Commander Europe as saying that he could fight for only 10 days without massive resupply across the Atlantic. Admiral Kidd pointed out that we could not rely on levitation to get supplies forward. Mr. Atwood, the United States Deputy Secretary of Defence said that if the numbers of American troops stationed in Europe is reduced—as seems quite probable—that will serve only to increase the need for even more ships.

The Government simply cannot disregard what men such as these are saying. After all, they are the people who will do the work if the worst came to the worst. And yet what is happening? One has only to look at the table on page 7 of Part II of the defence White Paper in order to see the answer. Steadily, year after year, the number of merchant ships available for defence purposes has been going down in every category. No—I am wrong. This year the number of tankers has gone up, but only, I see, by including in the total chemical tankers which could, it says, be used for carrying not oil but oil products.

As for the category called "break bulk cargo ships—the familiar cargo ships carrying anything one wants in the hold—I see that most, which must mean more than half, are "short sea vessels". What is a "short sea vessel"? Basically, it is a coaster, or one that plies backwards and forwards from here to France or Holland—not the sort of ship in which I would wish to cross the Atlantic very often; and, even if I did, it would not carry very much.

Our lack of ships is illustrated, perhaps inadvertently, in the White Paper itself. On page 27 of Part I appears a pretty picture of two ships being refuelled from a tanker during exercise TEAMWORK '88 last year. One is a warship, the other a chartered merchantman. The warship is HMS "Intrepid", a Royal Navy assault ship; the merchantman is Norwegian! Good heavens!—do we not have enough ships for exercises? What on earth will happen if we find ourselves in conditions of war?

The other table on page 7 of Part II, relating to the manpower available for the merchant fleet, makes even more depressing reading. The noble and gallant Lord, Lord Hill-Norton, referred to the number of officers and men having decreased every year for all the years given in the White Paper. I find the most alarming figure of all one that he did not mention; namely, the number of cadets. Seven years ago, there were 4,000 cadets. In 1988, there were 400. Who on earth will man our ships in the future?

All in all, I have to say that the position is far from reassuring. There is grave doubt as to whether we have under our control enough ships, officers and men even for military purposes. Indeed, the White Paper itself on page 27 of Part I reports the view of the NATO Planning Board for Ocean Shipping as being that we have not. What is quite certain is that even if we could scrape together enough capacity to sustain military operations, there would be nothing left to supply the unfortunate civilian population of this country or even to keep going our essential industries.

We all hope that the threat of nuclear war is receding, and I believe that it is. It must therefore follow that any threat that remains must increasingly be of conventional conflict. At the conference to which I referred I noted down the words of the Secretary General of NATO. He said: Governments should know that maintaining effective maritime superiority is the best investment for securing peace". I wholly agree with that statement, and I hope that the Government do too.

I know that my noble friend the Minister by himself cannot remedy the situation, but I beg him to impress upon his colleagues the increasing seriousness of what is happening to our defence capability and, together with the other departments concerned, seek ways of reversing a trend which is approaching the disastrous.

5.41 p.m.

Lord Bramall

My Lords, this is a highly interesting and also a difficult time for defence planning. It is interesting because, as has been said, much is happening which may affect the general threats and balances in the international scene. It is difficult because, although we can see things unfolding which ought to, and indeed may, require different solutions to our military problems, natural and sensible prudence and bitter experience in the past cautions us not to abandon the stability and unique advantages that we have acquired over the past 40 years by membership of the North Atlantic Treaty Organisation, with its panoply of manifestly alert forward defence and burden sharing, and in the background the ultimate deterrent, as the Minister said, to man ever being stupid enough to resort again to a military option in Europe.

Moreover, although much that is happening is good, such as the undoubted easing of the East-West confrontation, not all of it can be described as comforting. Events in China have shown how quickly trends can change and there is some genuine concern as to whether Mr. Gorbachev can carry through his apparently very enlightened policies without incurring some reactions which would effectively put back the clock. In the longer term, depending I think to some extent on the success or failure of a more united Europe, it may not be possible to take for granted West Germany's key role in the NATO structure; and we might find our country's forward defence not so far forward as we had come to expect.

Moreover, outside NATO there is a great number of more indirect and subtle threats—emanating from the carnage in Lebanon, the impasse in Palestine, rivalry in the Gulf, support for international terrorism from both North Africa and the Middle East and general instability ranging from Latin America to China—which are capable of causing our Western civilisation plenty of problems, anguish and concern in a variety of ways. The kind of situation that could arise up to and around 1997 in the South China Sea is perhaps among the most predictable of a number of yet indefinable scenarios, all of which could call for some kind of military deployment over the next two decades, whether it be prophylactic, pre-emptive or even in extremis reactive.

So however high our hopes, all this calls for the continuation of balanced and all-purpose forces, capable not only of operating on the Continent and its surrounding seas, to maintain a prudent albeit perhaps changing balance of power, but also of reacting outside NATO to the unexpected emergencies affecting British and European interests with which our history has invariably been punctuated.

It may also call for a somewhat different method of funding defence. With the threat becoming more nebulous and diverse and without the discipline imposed on the Treasury by, for instance, NATO's 3 per cent. real growth figure, adopted by our governments from 1978 to 1985, the funds available to defence are bound to go down in real terms, despite the fact that the increasing sophistication of equipment and higher costs of manpower have demanded at least a zero growth in real terms from a higher start point long since abandoned.

Noble Lords have only to remember—not from personal experience of course—what happened to the British Army between Waterloo and the Crimea and again to the Armed Forces in the 1920s and 1930s, to realise that once the tap is turned off it never gets turned on again until it is too late. The only sensible way to look upon defence is as an insurance policy not only against the more obvious and urgent threats but also against the less expected but still possible ones, just as we have to do in our homes and businesses. We often find the money for the premiums difficult to raise and compromises have to be made. But the premiums are invariably related to the value of the assets that we want protected and the scale of the loss that we would incur if things were to go wrong. So, I think, should it be in defence, with a finite percentage of our gross domestic product—possibly around 5 per cent. to 5.5 per cent.—allocated for this vital insurance. When the country's GDP rises there would be both the availability and the need for somewhat higher premiums, and vice versa.

In the past our defence expenditure has been well over 5 per cent. of GDP, at one time rising to about 6 per cent.—in comparison of course with the Soviet Union's figure of 11 per cent. to 12 per cent. But recently we have dropped significantly below the 5 per cent. figure, which is likely to do down even further, as with all other public expenditure. Yet with that declining figure and however much we seek cost-effectiveness, it will be extremely difficult to maintain high quality, well trained and mobile Armed Forces capable of dealing with both sophisticated threats and unexpected emergencies, as we had to do, and indeed did do, by a very narrow margin in the Falklands.

But even with more stable and predictable funding we must consider carefully how much of our resources we need to maintain in the nuclear field. As I said two years ago, by assessing carefully what we really need these weapons to do, there is scope for reducing further the overkill situation that has existed until recently, rather than going on working from a start point of, "We are here, because we are here, because we are here".

To my mind there are still good and sound arguments for retaining some nuclear weapons for one purpose and one purpose alone—that of ensuring comprehensively that a military option would never be resorted to in Europe and that no one else would ever threaten or use first a nuclear weapon against us. For that reason some effective and largely invulnerable submarine-launched weapon such as Trident remains, in the language of Which? magazine, "the best buy". So long as an adversary has a suspicion that under certain circumstances highly disastrous to you, you might just use those weapons, that would almost certainly suffice. Whether one needs any further nuclear weapons to manifest the link between any conventional resistance and the threat of a possible strategic response, so that no opponent could imagine the feasibility of a conventional military option without incurring nuclear and therefore quite unacceptable penalties, is a more difficult question.

Flexible response in nuclear terms has been described as a ladder, but one which nobody knows where you will get on or where you will get off. It certainly has never meant that you must necessarily get on at the lowest rung. For most military men the concept of a coherent tactical nuclear battle is fairly incomprehensible (either for attacker or defender) and since such weapons even with modernisation, would inevitably fall on some German territory, their authorisation would be even more difficult than most.

Personally therefore I was somewhat surprised at all the fuss about the modernisation of so-called tactical or battlefield nuclear weapons. I am relieved that the subject has now been diplomatically kicked where it belongs—into the long grass of the status quo, merging into the mutual force reductions, where it will almost certainly resolve itself. If you must have a bridge weapon which puts the link between conventional resistance and nuclear resolution beyond all doubt—and a case can be made for it—there are other weapons which to my mind would fit the bill better and would not have the same connotation to West Germany, such as an improved air-delivered weapon for the Royal Air Force. Together with a dual capability, they would give us all the flexibility that we needed, not only in the interdiction and sub-strategic fields, but also against lesser nuclear powers whose threat one day just might need resisting.

We must assess how much we can afford to lock up in the nuclear field rather than in areas that both enhance the flexibility and mobility, and multiply the fire effectiveness of our conventional forces. My noble and gallant friend Lord Hill-Norton has mentioned some of the areas where these resources are badly needed.

Much the most serious question facing the Armed Forces—and which the White Paper skirts around with a bare two paragraphs devoted to it (paragraph 508 and 509) which are both misleading and totally incompatible with one another—is the manpower problem. The noble Lord, Lord Irving, and the noble and gallant Lord, Lord Hill-Norton, have mentioned it. The problem arises partly from the demograph trough, which is relevant, but also from the inability of the Armed Forces to hold the manpower that they have recruited and trained with the result that they would now have to recruit more than they would otherwise have to do from a shrinking pool.

There are a number of reasons why young men are inclined to leave the service prematurely. The urgency of defence is perceived by the public to be less than it was, and the variety and interest of a military career—although still very much there in my opinion—is thought by some to be not as great as it was. It certainly requires greater effort and imagination in training, both collective and individual, to bring it about. There are now greater opportunities in civil life for skilled and reliable manpower for which the services are renowned.

It is therefore more important than ever that the Government are seen by the Services to be a good employer who is prepared to make service to Queen and country—often under difficult, arduous and hazardous conditions, with necessarily long periods of separation, or at other times with wives not being able to work—positively rewarding in financial and family terms and in comparison with what servicemen can expect outside. It is in this area that over the past three or four years there has been a steady and significant erosion of both pay and allowances.

When the Government came to power in 1979, they made great play of getting Forces' pay right, a process already started by the noble Lord, Lord Mulley. When they did do so in comparison with responsibilities outside, the manning situation was transformed, both in terms of recruiting and retention. The Services became fully up to strength over the Falklands crisis and beyond. However, since those days, and in particular in the past three years, there has been a steady erosion of comparability in terms of the national average. The X factor, which was meant to compensate for the exigencies of the Service and to bring the Servicemen comparability-plus, now means relatively nothing. Allowances have been whittled away in a number of areas. It has greatly decreased the incentive to serve and face the tempo and rigours of military life, such as living for up to three months under water in a nuclear submarine, or perhaps spending 12 years on consecutive service in Germany with frequent periods of family separation. We now hear rumours that the Treasury is proposing that the troops in Northern Ireland should be charged for their accommodation. That is quite unheard of on active service.

Perhaps the most serious weakness in the Ministry of Defence's employer's measure, and the one I still submit has the greatest influence on the premature voluntary release figures, is in the field of housing, and the disadvantage at which servicemen and women and families find themselves in relation to the housing market. As I suggested in a Starred Question in May, what is so badly needed now—and indeed it has been for the past 10 years—is a proper house purchase scheme which would allow for Servicemen and women to save for a house towards the end of their service in a tax effective way without having to buy one prematurely when, because of service abroad, it is not possible properly to look after it, and while they are rightly being encouraged to live in Government accommodation near their place of work.

In answering my Question, the Minister made much play of the steps that the Government were taking to sell surplus married quarters to service people. However, after considerable research I find that at best it is only a peripheral measure and that it is not really working. Certainly it is not working to the extent of housing the considerable number of Service people who find themselves homeless at the end of their service and yet cannot be accommodated by local authorities. Such homelessness at the end of faithful service is hardly an incentive to stay in the service in the first place. There are many other examples where the erosion of allowances and lack of proper employer measures are encouraging good men to leave the Services. It is sad that excellent Back-Bench efforts in another place as yet have got precisely nowhere.

It is indeed so sad that this Government, having done so much for defence—and for whom incidentally the Services themselves have done so much—seem to have lost interest in taking on the Treasury to achieve the comparatively small amount of resources that are needed to establish their position as good employers. I hope that they will do better in future because if they do not, even with the maximum of help from the Brigade of Gurkhas, and certainly not the minimum of 4,000, and from the Women's Royal Army Corps, they will soon be unable to man all the volunteer forces required by our current commitments, let alone any emergencies.

In the infantry alone, we are the equivalent of two battalions short on current requirements, to say nothing of the acute shortages of every kind of specialist. The battalions have a totally inadequate establishment of three companies and only 650 men. Military historians in your Lordships' House will recall that one of the main reasons that Ludendorf advised the Kaiser to sue for peace in 1918 was that the establishment of the German infantry battalions had sunk to 650 men.

Without the men, any discussion on strategy becomes academic, for the only alternative to volunteer service is some form of compulsory national service and I think that most of your Lordships will agree that that is hardly a political option.

5.57 p.m.

Lord Jenkins of Putney

My Lords, there sometimes seems to be an element of consensus in these debates. There is an element of thought that in any event we need to be armed to the teeth, the only difference being whether those teeth be nuclear or conventional teeth. I bring to the debate—and I think that it accounts for the departure of a number of noble Lords—a rather different view; namely, that we do not need to be armed to the teeth in any event, nuclear or conventional.

However, I am bound to admit that the current statement that we are debating differs and moves a little in the direction that I regard as right. It does not concentrate exclusively on the minutiae, the details, as to whether this, that, or the other is the right way. It recognises for the first time the profound change in the world situation exemplified by the arrival of Mr. Gorbachev on the scene. The statement recognises the fact more fully than did the noble Lord, Lord Trefgarne, in his opening statement, although he referred to it in passing.

Even in the statement the recognition is only of a token nature. There is no responsive movement in the British attitude or policy in NATO. Before I illustrate that point I should like to emphasise that I said "exemplified" by Mr. Gorbachev quite deliberately. He is in fact not only an individual phenomenon but the exemplar of a profound change which is taking place throughout the Soviet Union, in different ways, and at different speeds throughout the European quasi-Communist states.

China is quite a separate case. It always has been and always will be. The chiefs of staff would do well to recognise that important fact. The brutal suppression of the Chinese student movement—and, alas, student movements customarily fail—is no excuse for continuing to treat the Soviet Union as the enemy. There is no justification for sustaining and extending nuclear weaponry—as indeed the noble and gallant Lord, Lord Bramall, suggested—on the assumption that we must arm up to the eyes to keep the Russian hordes at bay. I see that I have gone beyond the teeth to the eyes.

I heard an American NATO general recently on television—I forget his name—but there was an alarmingly paranoic element in his attitude. I hope that President Bush will convey to this general that this kind of carry-on is incompatible with the realities of 1989 and with what he himself is saying.

In its quieter way the defence statement is equally obsessed with yesterday's military strategy. For examply, it assumes a European war. That is the basis of the defence statement. That assumption has been implicit in much of what has been said here this afternoon. It spells out in paragraph 113 and elsewhere the various channels which swallow up the vast burden of expenditure we sustain all the time, in the light of that incredible assumption.

Thousand of people spend their lives all over this country, in Europe and in other parts of the world in the belief that a war, rather like the last one, is likely to take place. That assumption is implicit in much of what has been said this afternoon. But if they do not believe it, they have to act as if they did believe it. That is dangerous as well as ludicrously expensive. It is also a diversion of good brain power to unproductive ends to say the least.

As the American academic Colonel Summers has pointed out in the Atlantic Monthly and also in the Guardian, the nuclear threat is a bluff which, if it is called, would be revealed as a threat to commit suicide. As an even more distinguished military man, Lord Mountbatten, argued a long time ago, the nuclear weapon is not a credible weapon of warfare. It will only be used either as a result of an accident or by a lunatic, so it would be much safer to be rid of it. But the statement says at paragraph 119: NATO will be the keystone of the defence of the United Kingdom and our Western allies in the future as it has been in the past". That means nuclear NATO, as Mrs. Thatcher makes clear every time she brings her powerfully simplistic mental processes to bear on the subject.

I have here a different document. It is called Meet the Challenge—Make the Change: A New Agenda for Britain. Its highlighted conclusion on the same subject as we have been discussing is that we must maintain our vital contribution to NATO through the Royal Air Force, the Royal Navy and the British Army of the Rhine. My noble friend Lord Irving spelt out some support for that view. But that is not the real conclusion of the document. The real conclusions seem to me to be bedded down in the smaller print. For example, on page 55 it says: we look forward to a time when suspicion and tension between East and West will be sufficiently dispelled for both NATO and the Warsaw Pact to be simultaneously dissolved.

That gets down to issues in a way in which the statement does not. Although in its preamble that is what the statement apparently seeks to do, it does not really deal with that fundamental kind of issue. I think it is appropriate that it should do so. The rest of that page in this document along with pages 86, 87 and 88 are devoted to disarmament proposals both unilateral and multilateral culminating in the sentence which I believe ought to have been highlighted because I believe it is the important sentence: We shall work to achieve a nuclear free Britain as part of a nuclear free world". That seems to me to be the real message of the Labour Party document.

The highlighted statement about contributing to NATO is one which has been made hundreds of times by every platitudinous conformist in the Western world. It sounds just like the Prime Minister. So where is the challenge? Where is the change?

It is in the analysis in this document, in the sentences I have quoted and in the unhighlighted sentence at the end which I shall repeat: We shall work to achieve a nuclear free Britain as part of a nuclear free world". There is the real challenge; there is the real change.

The Labour Party document's analysis is quite devastating. It leads unerringly to the same conclusion as was reached by Lord Mountbatten and now by Colonel Summers. It recognises that Eastern Europe post-Chernobyl and backed by Gorbachev's Soviet Union is no longer a threat, if it ever was. Even that bemedalled warrior Brigadier Enoch Powell now says that he never believed in that threat and certainly does not now. When the light is seen, it is seen, no matter who sees it.

Because the building of the three Trident submarines will be well advanced by the time Labour comes into office, the report recommends that they should be commissioned because: more public money would be wasted by stopping their construction than by completing it". This minor key decision negates the searching analysis of the Labour document and mutes the defence challenge of a report which is more comprehensive in its argument than anything the Government have put forward with the whole of the state machinery at their command. The impression has been given that the change proposed by Labour from government policy in this area is a change of intent rather than a change of course which ought to follow from an examination which destroys the case for the existence of nuclear weapons in or around these islands and makes it clear that in the longer run civilisation and nuclear weaponry cannot co-exist.

As distinct from the Government's document, the Labour Party one is not a statement of policy, although it has been widely heralded as such. It is a series of recommendations to the annual conference of the party. As Mr. Attlee pointed out when he was Prime Minister, and even more emphatically in his book, The Labour Party in Perspective, the annual conference is the sole source of Labour policy. I hope that next October on this point the party will accept the review, but that it will do so subject to certain modifications, undertakings and understandings, among them those that follow logically from the analysis contained in the review itself as well as from existing party policy.

I return before I close to the Government's statement. What is the source of the pressure which makes it so difficult for both the United States and Britain to meet Mr. Gorbachev half way? It seems to be more difficult for Britain, incidentally, than for the United States because the United States and its recent manifestations under Mr. Bush seems to be able to go further in that direction than we do under Mrs. Thatcher. The cause of the difficulty was identified many years ago by no less than President Eisenhower. It is the American military-industrial complex which, pushed into a corner, prefers the likes of Colonel North and Admiral Poindexter to the entire democratic process.

We are certainly in danger but the danger is not that identified in the statement before us. It is the danger of military government; overt or covert. The best military men know that in today's complex world military government must end in disaster. But when civil government fails to deliver the best military men are stymied. It is therefore in our interest that Mr. Gorbachev shall be as successful in his own country as he is outside. If he is not, then the Soviet Union is no more free from the danger of military insurrection by its own armed forces than is any other country.

It is in the interest of us all that the Soviet Union shall be united and prosperous, and the foreign and defence policies of the West should be modified with that object in view. As I have said previously, I believe that the President of the United States is moving a little in that direction. Such modifications would be in conformity with that enlightened self-interest about which we used to hear so much. There are signs that it is coming back into fashion. We need it most urgently and with the accent on the enlightenment.

It now appears that President Bush has also seen the light. But in this country it is useless to hope for a change from the lady who is not for turning. For the great change from preparing for war—nuclear or non-nuclear—to turning towards preparations for a real peace we need a Labour Government.

6.12 p.m.

Viscount Mersey

My Lords, I rise to thank Herr Genscher for his refusal to accept Mr. Gorbachev's latest offer; that is to rid Europe of short-range nuclear systems. I congratulate Herr Genscher on his insistence that there can be no negotiation on short-range missiles until there is progress on conventional arms reduction. In so saying he is agreeing with President Bush's statement of 29th May that the two superpowers should reduce their respective forces to 275,000 men.

At the same time I am worried by the tide of "Gorbymania" now flooding West Germany. There is the belief that Gorbachev is a better ally than Bush or even than our own Prime Minister. Also that the Warsaw Pact is now so flawed that there is no real need for NATO and no need, for sure, to modernise our short-range nuclear systems. But, more than that, there is the belief that there is no need for American troops in Germany and no need for low flying aircraft.

Twenty years ago the Germans welcomed the thunderous roar of a low-flying fighter as evidence of NATO's security. Today that same fighter is hated. It is the deafening pollutant for which few perceive the need. The Germans point to Poland and Hungary as evidence of the fact that the Warsaw Pact is breaking up and the threat is receding. As for East Germany, it admits that the regime there is rigid and that it is unimpressed by glasnost and perestroika. But, as that country and the noble Lord, Lord Mayhew, have said, regimes can change. It looks forward to the time when the wall comes down. Then Germany might return to a federation of small states as it was before Bismarck, or it might even re-unite.

The noble Lord, Lord Mayhew, may disagree but in my book that is wishful thinking. The Russians would never accept a re-united Germany. Not even Gorbachev would allow the re-creation of a country that twice this century has inflicted wounds on Russia even more grevious than would be caused by a major nuclear exchange. Indeed, if Mr. Gorbachev did agree to re-unite Germany I forecast as a certainty that he would be sent packing to Siberia.

German optimism may appear to us to be ill-founded. Nevertheless, it is understandable because its position in NATO is so different from our own. We are bystanders and out of range of short-range systems. Germany is at the sharp end; it is the front line. Its hatred of a missile launched from one part of Germany to destroy another part would surely be echoed in this country if we had nuclear missiles based in Wiltshire and targeted on Kent. That is why Herr Genscher is being so courageous in insisting on keeping the systems.

Yet Genscher is not more representative of German feeling than is Gorbachev of Russian and Politburo feeling. Suppose that other counsels prevailed in Germany? Suppose that Germany left NATO? That would be the end of NATO. Conversely, suppose that Poland and Hungary left the Warsaw Pact? That would be the end of the pact. Indeed, Gorbachev has forecast the break-up of both alliances. Should that happen it would be bad news for us because our enemy would be knocking at our front door with his 51,500 main battle tanks, while our main ally would be the wrong side of 3,500 miles of Atlantic Ocean.

I have now read nine defence White Papers. The constant factor which runs through all is the mammoth imbalance between NATO and Warsaw Pact forces, as my noble friend Lord Pym has reminded us. But whereas the 1980 White Paper shocked and alarmed me, the 1989 paper seems relatively harmless—with the important exception of Russian chemical concealment.

As the same conventional imbalance recurs year in year out it appears to have less power to shock. It becomes old hat and I am tempted towards complacency as perhaps are many others. I notice that today there are only 15 speakers in the debate whereas four years ago there would have been 40 or 45. But the only genuine ground for complacency would be a Russian troop reduction to 275,000 men. That would be a cut of close on 3 million men. It would be so massive that Russia would have an unemployment problem the like of which we have never seen in the West. It is a colossal cut that could happen only slowly.

Gorbachev has not yet made any cuts although he has promised them. It is true that he has removed some tanks. I take the point that during a Starred Question this afternoon there was a discussion about the nature of the tanks. I am inclined to agree with my noble friend Lord Trefgarne that they were aged machines whose main contribution to a war would have been to clutter up the battlefield.

So we in this country stay ever vigilant. We wish Gorbachev well but we fear that he is all words and not deeds. We also fear that he could be deposed by a hardliner, particularly if there was an uprising in Russia itself. Gorbachev, who is so popular in the West, is less popular in his own country.

We appear to be content to sit back and watch how things develop but not so the Germans. They wish to re-unite their country. They say, "Gorbachev is in power—for how long we know not—but while he is there we must use him". The 64,000 dollar question is: are the Germans using Gorbachev or is Gorbachev using the Germans?

There is one German idea that attracts me—the idea of offering free scholarships in the West to Russian students. A large number of young Russians would then become aware of the benefits of democracy. They would return to mother Russia and spread the word. That has already happened in the case of China. There were tens of thousands of Chinese students in the free world. They returned to their homeland, preached the benefits of democracy and went on hunger strike in Tiananman Square. As we all know, that ended in a bloody massacre of the innocents.

So the relevant question is this. If in the future westernised Russian students demonstrated in Red Square would the Politburo shoot them or welcome them? Would the Politburo say that those young people were the result of their own policies of glasnost and that they would wish to take on board their ideas? I earnestly hope that the Politburo would support the students. Admittedly, it would be a tough decision for it. Poland and Hungary are already fairly democratic and reasonably hostile and there is unrest in Armenia, Georgia, Estonia, Lithuania, Latvia and even in the Ukraine. It is to be hoped that the Politburo would see in the students the best way to defuse those tensions.

Therefore, I believe that we should offer free scholarships to young Russians. I would hope that Gorbachev is a man great enough to take up our offer and to grant immigration visas, thereby capitalising on the students' ideas. I also hope that the Politburo would be wise enough to keep Gorbachev in power.

Thus the students could be a catalyst to a sea change in Soviet policy. Thence could follow massive conventional disarmament and the destruction of the entire Russian chemical arsenal. Then and only then could there be the de-nuclearisation of Europe. That would lead to a Europe truly united.

6.20 p.m.

Viscount Allenby of Megiddo

My Lords, like many other noble Lords who have already spoken, I also welcome this full debate on the Defence Estimates—and early on in the day's business, unlike previous years.

The quality, skill and dedication of our servicemen today is of the very highest order. When visiting troops patrolling the streets and countryside of Northern Ireland or watching seamen operating their ships in heavy weather, one sees what a wonderful job they do. One hears of many instances of valiant and courageous rescues carried out by the RAF rescue service. I must remind noble Lords that all that is done with a volunteer force of both full-time and part-time servicemen.

Today retention is one of the crucial tasks facing the Armed Forces. We are paying the penalty for recruiting brighter people to manage highly technical equipment. We have a generation of young servicemen who have been encouraged to stand on their own two feet and to think for themselves. Unlike other sections of society, there are no "go slows" or intimidation in the Armed Forces. Orders are accepted and carried out without question. However, the young man today looks for improvements in promotion, pay and prospects. He is no longer content just to sit and wait to see what happens. If his ambitions are not realised and he feels that he is not getting job satisfaction, he will, sadly, leave the forces and a replacement will be needed.

Overstretch is a major concern to all three services, particularly so at the middle level. Most servicemen enjoy a hard day's work and being pushed hard. We are fortunate in our Armed Forces in having one of the finest management systems in the world. As we have heard from the Minister, new systems are on the horizon which will be most welcome and, from what I have heard of them, cost-effective.

However, there is a limit to overstretch. Not only does it need respite, but there is need for recognition. Sadly, we lose high calibre individuals if they are constantly overstretched. The greater employment of women in all three services is a very welcome move. Commitments have been growing, and I honestly believe that there is a danger of losing job satisfaction and enjoyment of service life today unless action is taken to reduce them in the future.

Outside the Armed Forces allowances are designed as a package to attract and retain the right people. Those responsible for putting the package together take account of current circumstances and react accordingly. At present in southern England, among many initiatives, companies offer rent-free accommodation, free removal expenses and loans as part of their recruiting package. It would be totally unrealistic to suggest that such initiatives would be appropriate to the services. However, there is a need to make attractive allowances for the services and for them to act as an inducement to retention.

While senior officers of all three services generally see the rationale in the service allowance, changes introduced last year at the lower level have not been accepted so favourably. Many servicemen quite simply see the new rules as a marked reduction in their terms and conditions of service.

Concern remains about home ownership, as has already been extensively explained by the noble and gallant Lord, Lord Bramall. It would be inappropriate for me to say very much more. However, the problem is particularly appropriate to the Army, where over half of its members can be said to be serving abroad, if one includes Germany and unaccompanied tours in Northern Ireland. On the one hand, there is the need to support the policy of accompanied service; but, on the other hand, we must recognise the need for servicemen to get into the housing market. The situation is further complicated by more and more working wives seeking a more stable home in this country—which is understandable.

I sincerely hope that the Minister may be able to indicate whether the Government would be willing to have another look at the allowance package. Following visits to all the services, feel that that is causing a certain amount of irritation and uncertainty. I should also like to know whether there has been any progress made in the house purchase schemes put forward by the Member for Canterbury in another place and, as we have already discussed, by the noble Lord, Lord Bramall.

As one who has responsibility for recruiting, I greatly welcome the Government's initiative to provide more money for publicity and the intention to improve the effectiveness, as indicated in paragraph 515, of the estimates. I hope that that additional money will be well spent and will result in more recruits being provided for all three services.

Recruiting today is a very expensive and highly competitive business. One hears daily of new initiatives by industry in its attempts to attract the young, and now we hear of older people being recruited for the large firms in the South of England. That that is the way that things are going. As the demographic trough deepens and unemployment continues to fall, recruiting for the services is becoming very much more difficul1 and there may possibly be a case for easing the rules which prevent minor offenders from enlisting in order to give them a second chance of a service career.

I have put forward the suggestion of service youth training teams in the past and I make no apology for raising that matter again. There is already a pilot scheme in the North-East of England which is working well. I believe that, if properly established, it could be of immense mutual benefit to both the services and youth alike, particularly in the inner cities, by teaching skills such as rock climbing, canoeing and other outdoor activities. It would provide the much needed interface between the servicemen and the young, who it is so important to attract to service life.

In the difficult says of recruiting, the cadets play an extremely useful part in fostering the interest which young boys and girls often have in a military career and which is so often eroded by the age of 18. As we have heard from the noble Lord, Lord Colnbrook, the strength of the cadet forces has fallen away dramatically in recent months, and that is a disturbing trend.

One of the most important incentives in the Army Cadet Force is that skill can be gained in weapon handling. There has been an excellent advance in modern rifles, and they are being issued to cadet forces. However, for training evening by evening in their huts, the cadets must have a rifle which cannot be a danger if it falls into the wrong hands. I understand that manufacturers are advertising such a weapon and that the Ministry of Defence could procure the £10,000 needed, using funds underspent on other projects. To do so would be an excellent investment both in terms of regular recruiting and drawing young people in the formative 13 to 18 year-old age groups into the organisation, which does so much to turn men into responsible citizens. Can the Minister say why the Ministry of Defence is not procuring these excellent training aids? He may not be able to tell me now, but I should welcome an answer in due course.

The effects of retention are serious. Service recruiting is facing difficult times ahead. We are most fortunate in this country in having all-volunteer Armed Forces. Whatever changes in the future may bring about, our forces deserve our unswerving support, wherever they serve.

6.30 p.m.

Baroness Strange

My Lords, nearly all noble Lords who have spoken have said that our forces are undermanned. I agree that our defence is only as strong and as determined as the people who defend us. People are what defence is all about. First, we are defending people. We are defending the people of Britain or, in the case of NATO, the peoples of the North Atlantic shores, against aggression. Despite glasnost and perestroika—as my noble friends the Minister, Lord Pym, and Lord Mersey have said—the threat to the West has not diminished.

Let us suppose a robber comes into my house to attack me. The first thing I do is to look around for a weapon with which to defend myself. I will snatch up a poker or a jelly pan or a handbag. All those items are suitable for defensive weapons. However, in themselves they are not weapons. A poker sits inoffensively in the fireplace waiting for someone to poke the fire with it. A jelly pan waits in the kitchen, its copper sides gleaming, waiting for someone to make jam in it. A handbag lies unwittingly in a drawer waiting to be stuffed to bursting with all the items that a handbag contains. They are all inanimate objects. Without a person to motivate them they are no defence.

Therefore, we must consider the people who make up the engines of war work. The men who drive the tanks, who sail the ships, who fly the aeroplanes, who fire the guns are our best defence assets. They are our treasure; but they are a declining asset. Fewer people are coming into the services. We need more. To achieve that, we must have better conditions, better pay and less sniping and whittling away of life's allowances in a petty way. I agree entirely with all that was said by the noble and gallant Lord, Lord Bramall, and the noble Viscount, Lord Allenby.

It is important, therefore—indeed, vital—if we wish to defend ourselves that we ensure that the interests of our forces are paramount so that they can make our weapons work. By all means let us have the newest, most efficient weapons; but let us bear in mind that without people to work them even the best weapons are just a heap of old iron.

6.34 p.m.

Lord Carver

My Lords, I apologise to the Minister, and to other speakers, for the fact that I was not in my place when he opened the debate. In fact, I was chairing an important meeting of a sub-committee of your Lordships' Select Committee on Science and Technology.

Before turning to more general matters, there are two questions that I hope the noble Lord will answer when he winds up the debate. On 17th October of last year I asked a Question in the House about whether or not the Government had yet devised an equitable method by which regular serving members of the Armed Forces would pay the community charge. I did not receive a very satisfactory reply. Since then, of course, the charge has been introduced in Scotland, where members of the Armed Forces who are not permanently domiciled there serve and are therefore liable to pay the charge. Can the noble Lord please say what progress has been made in deciding on this matter and whether or not the arrangements that have been made are regarded by members of the Armed Forces as equitable?

My second question relates to defence research. Will the noble Lord, in replying, say what measures the Ministry of Defence has taken, apart from the decision to set up a defence research agency (described in the pink insert on page 33 of the White Paper) to meet the recommendations of the report by the Advisory Council on Science and Technology on Defence Research and Development? In particular, can he confirm that the Ministry will publish its R&D data according to the R&D definitions of the Accounting Standards Committee?

I turn to more general matters. I share the view expressed by some noble Lords that the defence White Paper—which I note has now after some years in blue reverted to white: is there some significance in that reversion to a more dove-ish and less political colour?—although it is generous in words and figures, actually says very little and hardly anything new. In compiling an historical monograph I had recently to read through all the defence White Papers since 1945—rather more than those read by the noble Viscount, Lord Mersey. The contrast in size and real content between recent and earlier White Papers is stark. I suspect the influence of public relations experts.

My principal criticism of the paper is that it gives the impression that the eyes of the Ministry of Defence are firmly fixed on the past and that it is reluctant to face the difficult problems that lie in the future. Those problems arise from change: first, change in the political background against which defence policy and the organisation and equipment of the Armed Forces have to be planned. The paper is extremely cautious in its approach to the remarkable change that has come about in the relations between East and West in Europe. The second major cause of change is the electronic revolution. The third is the forecast demographic change in Europe in the number of men available for military service, whether volunteer or conscript, over the next few decades.

I take these changes in turn. There is now no doubt that the Soviet Union has abandoned its attitude of miltary threat to Western Europe and wishes to reduce the size and cost of its armed forces to a lower level; and that there is a genuine desire on the part of both the Soviet Union and the United States of America to reach agreement that both should maintain lower force levels in Europe, both conventional and nuclear. However, there is justified concern about how successful Mr. Gorbachev and his government will be in achieving their aims, about the timescale over which that may come about, and about whether it can be done without causing serious political instability within the Soviet Union and in Eastern Europe. The future of East Germany is, of course, a potential source of severe tension.

It is therefore right to be cautious about reducing NATO's armed forces until we can see more clearly what the political effects of glasnost and perestroika are going to be. We have seen some of them already in West Germany. But what is absolutely clear is that the sort of threat we face from this potential political instability is not one which can be dealt with by a strategy based on the use of nuclear weapons. Statements like that in paragraph 108.c that, All nuclear weapons must be kept up to date if they are to provide effective deterrence". and, in the green insert on pages 11 and 12, headed "Deterrence after the INF Treaty", that, NATO has to maintain an effective nuclear armoury at several levels", are even more irrelevant to that sort of threat than they were when the threat was assumed to be that of either a massive or a surprise military thrust of Warsaw Pact forces into NATO territory.

In principle, I believe that NATO's policy of concentrating on conventional stability talks before it attempts to negotiate reductions in short-range nuclear weapons is correct, for, if an agreement is reached about conventional forces, land and air, which both sides accept as providing a stable military relationship between East and West, the argument for having short-range nuclear weapons of any kind and for relying on a strategy based on the threat of their first use, falls to the ground. Both sides in those circumstances should then be able with confidence to abandon first-use systems and reduce their nuclear arsenals to much smaller numbers of retaliatory systems, the function of which would be to retain the overall deterrent to war which the existence of nuclear weapons provides.

In the context, the Government's decision to replace the RAF's WE177 freefall nuclear bombs appears to me to be absurd. Perhaps the noble Lord, when he winds up the debate, will explain the strategic theory behind the statement is paragraph 9 on page 12 that, The United Kingdom … maintain the independent non-strategic contribution without which the value of our strategic force, which provides a second centre for decision-making in support of Alliance strategy, would be seriously incomplete", because I have never been able to understand the argument.

NATO's nuclear weapon policy has got itself into a terrible muddle. All logic pointed—the noble Lord, Lord Carrington, is not here today, but in a speech not long ago he said much the same thing—to getting rid of shorter-range systems first, continuing the process begun by unilaterally abandoning infantry and anti-aircraft weapons and nuclear landmines, which the defence White Paper falsely claims as a past arms control measure. It was not anything of the sort. It was a unilateral abandonment of useless weapons.

There was a reasonable argument for retaining longer-range systems under the direct control of the Supreme Allied Commander, Europe, as a sign that American systems were linked to Europe to discourage the Soviet Union from thinking that it could use its nuclear weapons in Europe without risking retaliation by American systems. But the INF talks knocked a hole in that, as long as it was believed that land-based systems were essential to meet that need. The West Germans used to demand that; but now have changed their tune. The difficulty is that longer-range systems, if they must be land-based, have to be stationed in countries which do not want them.

The answer of course is to rely on sea-based ones. That is what our submarine ballistic missile systems are primarily for—the condition on which Polaris and Trident were supplied by the United States insisted on that—and not as an independent system.

The changed political climate in Europe demands a new look at the future of both our nuclear and our conventional forces. That political climate is bound to demand reductions in defence expenditure both by American and by European members of NATO. If we are to keep up our guard in a time of political instability, how are we going to cope with that?

This is where I believe that the revolutionary changes in technology come into play. As I have suggested before in this House, I believe that a long, hard look needs to be taken at the viability of the manned combat aircraft in its three roles of strike, reconnaissance and air defence, particularly in the air space over land. Modern electronic devices or electronically-controlled devices, whether on the ground, in the air or in space, already provide more accurate and effective means of carrying out those tasks while the cost of reducing the vulnerability of manned aircraft is constantly increasing.

I am convinced that a serious study of this subject is called for and, if its conclusions are what I believe they will be if it is truly objective, consideration should then be given to the highly controversial question as to whether we should continue to maintain a separate air force, with all its overheads and the complications in command which it involves.

But it is not only in terms of money that the pressures will rise, but in the supply of manpower. Technology can help in this field, as would a reduction to two services from three, but we shall have to go further than that. If it were not for the actual and potential commitment in Northern Ireland, the Army's organisation would be over-heavy in infantry, bearing in mind the great reduction in our ex-imperial commitments. New ways of making better use of human power must be examined yet again. A greater use of womanpower is certainly one of them. I believe that a more imaginative use of reserves is another.

I have in mind a greater use both of individual and of sub-units of volunteer reserves to train with and reinforce regular units in an emergency, rather than laying all the emphasis on trying to make territorial army units viable in themselves. The old army emergency reserve, which was swallowed up into the TA & VR in the reorganisation of the 1960s—totally forgotten when it was renamed the TA—was a valuable and highly economic source of manpower which exploited a man's civilian trade.

I hope that next year's defence White Paper will look more imaginatively into the future, which poses problems for the organisation and equipment of the forces which I feel are not at present being adequately faced.

6.46 p.m.

Lord Hatch of Lusby

My Lords, it is a pleasure to follow the noble and gallant Lord, Lord Carver. I agree entirely with him when he said at the beginning of his speech that these Defence Estimates are based on the past; and on past thinking and a lack of imagination. I also agree with a great deal, but not all, of what he said about the new situation relating to nuclear weapons.

I wish to add one further thought to his speech. He spoke of the political changes and changes in military strategy. I believe that he might well agree with me that the changes in military strategy and weaponry are some of the factors which may strongly influence political change. It is on those matters that I wish to base most of what I have to say.

This document on the Defence Estimates has been described in a variety of ways this afternoon. "Banal", "trite" and "puerile" are the words that occur to me on reading it. The language that is used concludes with an apologia that is based on special pleading which is almost totally irrelevant to the situation that we face today.

Some of the pearls of wisdom that I have selected out of so many in the language used here are these. On page 1 we read, But we should be under no illusion about this new sense of realism; it is designed to serve Soviet interests, not those of the West". Who on earth ever conceived that a national defence policy was designed to serve anyone except the nation concerned? On page 4 there is the following statement: The Soviet Union … Its proposals for arms cuts are not altruistic; they aim to improve Soviet security". Of course they do. What greater truism can one invent than such a statement?

Again I quote this pearl of wisdom from page 49: All modern tanks are more powerful than older ones". That is hardly a revelation of wisdom.

I believe it has been universally accepted this afternoon that we are living in a new international climate on our globe. It has been fundamentally changed. No longer are there invasions of Afghanistan or of Vietnam. We hope that there will be no repeat of what happened in Hungary, Czechoslovakia and Suez. We hope that there will be no more bombing of Libya, although one wonders to what extent the Pentagon and the White House see their new role in this changed world in places like Nicaragua and other parts of central America or in terms of military support for Savimbi in Namibia. It is a changed world. Nobody can forecast how these changes will develop but we cannot stand on the sidelines and wait until they develop. We are part of them. The Defence Estimates and the defence policy of this country, especially in their relation to foreign policy, have an effect and will have an effect on the way in which those changes develop.

I suggest that two options are open to us in this changed situation. First, we can continue to be suspicious, as we have been for the past 40 years. We can continue to build our policy on rigid and unchanging minds; or, secondly, we can make a positive contribution to international trust and co-operation which for the first time for many years we in Europe now have the opportunity to do.

In opening this debate the noble Lord, Lord Trefgarne, seemed to ignore a great deal of the new reality regarding nuclear weapons and the so-called deterrent. However, his own White Paper throws grave doubts on the whole argument about the use of nuclear weapons as deterrents. On page 4, the White Paper says: But while the West retains strategic nuclear weapons we must expect the Soviet Union to keep similar weapons in its arsenal". Some of us have been trying to tell the Government that for the past 10 years or so. Is it not the height or depth of sterility that the whole of the White Paper is based on the supposition that we must keep and update all our nuclear weapons? Surely the answer in this White Paper is that, if we do that, the Soviet Union will do the same. That is hardly measuring up to the challenge of the new international situation.

The argument about the modernising of nuclear weapons, which has gone at least since the INF treaty, has divided those who are supposed to be our allies in NATO. The proposal is also highly unpopular in this country. Last September a Gallup poll showed that only 21 per cent. of those polled believe that our nuclear weapons should be modernised, and 71 per cent. consider that they should not be and that we should be negotiating further to get rid of them. That is the voice of the people. There are also voices from within NATO. Hans-Dietrich Genscher of West Germany said: Let us take Gorbachev seriously. Let us take him at his word". He went on to propound what has come to be known as the "third zero"—the abolition of all short-range nuclear weapons in Europe. We know that in all the discussions over the past 18 months the British Government have stood alone in their demand that our nuclear weapons should be "modernised" and have not taken the opportunity of the INF treaty to pursue the cause of disarmament. That is the first option. Everything in this White Paper shows that the Government's mind has remained rigid and bound to the cold war of the past 40 years.

The other alternative—the positive alternative —puts disarmament as the first objective of foreign and defence policy. The object is to remove all nuclear weapons from Europe, at least by the end of this century, and to negotiate drastic reductions in conventional weapons. As the noble Lord, Lord Carver, has pointed out, there is a necessity on our part as much as on the part of the Soviet Union and the Eastern Bloc to reduce armament expenditure and to use those resources for constructive and productive ends.

The argument whether we should do this unilaterally or multilaterally has become completely sterile. It is irrelevant to the present situation and to what lies ahead in the next 10 years. Either or both of those methods are needed as the opportunities develop and as we take our part in increasing and creating through our foreign policy those opportunities for disarming on both sides. However, I say quite clearly—and in this respect I no doubt part company with the noble Lord, Lord Carver—that the removal as soon as possible of all nuclear weapons and nuclear bases is crucial to allow for international co-operation in ecological, economic and social efforts. That is what the people of Europe are crying out for. Below that is the healing process between East and West on which it all depends.

That is what the people of this country are looking for from any British government. They can only judge and take their part as citizens if the information on which that judgment is made is freely and openly available. In this respect I should like to take up an issue which to the best of my knowledge has not been raised this afternoon. If our citizens are to discuss and to reach opinions on British armaments and British foreign policy they must have full information. As my noble friend Lord Irving pointed out in his opening speech, nothing in the document itemises how much will be spent on particular projects. There is no way in which Parliament can determine whether money is being spent correctly on these projects. But that is not so in every country.

I have looked through this document and I find that no provision has been made for the decommissioning of nuclear submarines. I understand that over the next 10 years at least 10 nuclear submarines will have to be decommissioned. I specifically ask the Minister: what will that cost? What will be done with them? Further, what will happen to the nuclear components of those submarines? What plans do the Government have for dealing with those nuclear submarines as they become obsolete so as to protect the people, and the environment, of our planet? That was the question which was asked by the House of Commons Defence Committee only this week; but, there is nothing about it in this document. That is also something which is kept from the public.

One of the ways in which the Government inform the public, or claim to inform the public, is by what are known as the "open Government documents on defence". The Government continually boast that they provide more information than ever before. In 1981, 57 of those open Government documents on defence were published; but, in 1987 there were but two of them. That is the measure of the way in which information is being increasingly withheld from the public.

As I said a moment ago, this does not happen in every country. Let us take the case of the Montebello Conference. What happened in that respect? In this country we are continually told, and the British Parliament is continually being told, that no decisions were made. However, in the United States Congress was given a full and detailed account of all the weapons systems included in modernisation. The Dutch have had continual open discussions, interviews and debates on the same subject. Indeed, one could go on in that regard.

If the Minister would like to have further information on this matter, I suggest that he consults the excellent work carried out by the Oxford Research Group, in particular its recent publication which is entitled In the Dark. I shall take an extract from that document. It refers to the last time that the House of Commons debated the Defence Estimates and says: … on the 19th and 20th October 1988, the British Secretary of State for Defence said: 'European nations have a special role to play in the basing of theatre nuclear forces … As with other forces, they must be kept properly structured and up to date'. Then we have the crucial sentence, which reads: Decisions on these matters will be taken as and when required, and will be reported to the House at the appropriate time'. In other words, the decisions will be taken and then related to Parliament. However, many of them will only be related to Parliament if there are sufficient Members of Parliament to keep on questioning and requestioning Ministers in order to get the truth; that is, in order to get the truth from a government who do not believe in giving the public information.

I believe that the British people make two demands of their Government. The first is that they have a right—and indeed, they have a duty as citizens—to have available to them, and to be able to study, open and free information. That must be freely and constantly available; it must not have to be dug out from the dusty shelves of the Ministry of Defence or any other ministry.

Secondly, the people believe that the Government should be working towards peace (and the cold war was not peace) based on friendship and free from the menace of nuclear weapons—that is, nuclear weapons which every schoolchild knows about and of which many schoolchildren are still terrified.

It is only by ridding this country, Europe and ultimately the world of nuclear weapons that we can feel safe and be safe in this country. The British people, and the whole of humanity, depend upon our efforts to bring to an end the nuclear era.

7.5 p.m.

Lord Ironside

My Lords, this debate comes at a critical time, with the whiff of disarmament in the air. But I wonder whether it will become stronger or whether it is only something designed merely to deflect our senses away from other more fundamental issues. I believe that the truth lies somewhere in between.

In defence of course prevention is much cheaper than conflict. But prevention itself is becoming staggeringly expensive to practise and we are feeling the pressures that it brings. To the Soviets at present I think that disarmament still means a way of changing the odds of the game to bring them more favourably into line with their long-term aims; that is, if they can play it on a gun-for-gun-basis, with no weightings applied on balanced reductions. To us it means reducing the threat, and that is something which is worth going for.

The White Paper quite properly points out that, if there is a new sense of realism in Russia, it is designed to serve Soviet interests and not those of the West. Therefore we must not be tempted to lower our guard without first seeing the balanced reductions. I agree. The noble Lord, Lord Hatch, said that that was a silly statement to make in the White Paper. But, as we heard on Tuesday in Question Time, nothing much has changed.

However many nuclear submarines have been scrapped, the Russians are still building them as fast as they can. That is what we must worry about. We must not forget that. Whatever is said in the White Paper about disarmament, what matters is the way that we arm ourselves to meet the threat.

I should like to refer to some of the issues which are now affecting us. But, first, perhaps let me say that I have had the good fortune of being present at the recent Army Oracle briefing in Germany, which is designed to show how equipment is used in the field and to find better ways of making it more reliable. It was a very successful exercise. I should like to congratulate the Master General of Ordnance, General Sir John Stibbon, on taking the initiative and on the way he put his message over that equipment reliability and maintainability now take priority. That was a point to which the noble Lord, Lord Mayhew, referred. He considered that the Government were doing nothing about this. But perhaps I may give him some assurance in that respect: equipment failures are now being studied and the results fed back into industry.

Of course there is a reporting danger which we must try to avoid. When I was in Germany I was standing next to an important weapon with the Director General of Weapons by my side. I talked to the operator of the system. He said, "I like the equipment but this lever fails every time it is repaired. Every two or three months I have to send it back to the Royal Ordnance depot for repair". The Director General of Weapons said, "Well, here lies the difficulty. When this is reported back to the Army Board, it is reported back in such a way that it becomes meaningless". He said that the comments one hears at high level are that the equipment works very well indeed but is subject to "seasonal changes".

What we must avoid is reporting back in the wrong way, which means that industry does not get the message about how the equipment performs.

Reliability and maintainability point also to the risks involved in taking competition policy too far. If price is the last word, the customer will suffer ultimately. What matters now are the through-life costings of equipment, which are difficult to quantify. I hope that the controllerate influence will prevail in cases where the Procurement Executive does not see eye to eye on the bottom line.

My experience is that reliability and maintainability are built into a company's design pedigree and cannot easily be quantified. If the procurement procedures are to be formalised so that reliability and maintainability to become a quality assurance requirement, the customer will end up paying more for what he wants. He wants to rely on the fact that equipment will work whenever needed and in any circumstances. The Defence Select Committee in the other place is now studying the whole question of reliability and maintainability.

As the House is already aware, I have an interest to declare. I am heavily involved in the Trident programme and other major defence developments. We talk a great deal in the Chamber about Trident but it is more than just a missile. We make the mistake of looking at it in isolation from the real business of building up our long-term underwater warfare capability, and the Vanguard class of boat is contributing strongly towards achieving that aim.

Trident bashing, which we have heard in the past from the Benches opposite, brings no comfort to the Royal Navy, which, in line with other navies, is building up its underwater capability to meet the perceived threat. It is doing it well, but it is a long-term process.

The main issue that we now face is how we manage the defence of the realm and procure all the material needed to justify expenditure now running, as we have heard, at £20 billion a year. Because equipment plays such an important part, industry's position is just as important now as manpower and firepower. We must ensure value for money.

Competition policy has had the right effect. A great deal of slack has been picked up in the procurement chain and companies are leaner and fitter as a result. They are better able to compete, but in every competition there is only one winner. The rest are losers; and because bidding can be so costly, the losers may not be so ready to bid in future rounds. The net effect of that is that in future rounds winners will not just be better placed. There is likely to be less competition; that is to say, if bidding remains UK only. However it will not do so. It will be widened into the independent European programme group countries so that the United Kingdom customer is likely to continue to benefit from competition policy on a grander scale within the post-1992 single market framework.

Foreign firms have already been invited to attend industrial briefings for the new generations of Army equipment, but I am concerned about the present lack of even-handed treatment. If the Government decide to let foreign firms bid here for defence equipment, it is necessary to ensure that British firms can bid on equal terms in other countries. I hope that my noble friend Lord Trefgarne can give the House assurances on that point.

The Anglo-French reciprocal procurement agreement is, I understand, working three to one in favour of the French. I fear that the French do not open up their defence market to the same extent as we do. I am not sure what accounts for that imbalance. I know that the operational requirements are not always the same, but there must be other reasons. One of the reasons may well be that France's gross national product depends heavily upon defence exports and they therefore wish to see French firms taking the benefits of defence business.

The other issue to which I shall turn is the management restructuring of the MOD to be in place by April 1991. My understanding of how it will work is limited, but if there is to be more accountability, that can only add to the strength of the system. It will give industry more opportunity to provide services under contract, especially if the new budget holders are required to save 2.5 per cent. per year and are to be allowed flexibility in managing their affairs.

Industry can offer many engineering services. I am glad to see that contractorisation is to be extended beyond matters such as catering, cleaning and the other basic chores. If budget holders are to be untied from the PSA by April 1990 and to be free to choose the best contractor for work services instead of having to rely upon the monopoly supplier, I am sure that they will be better served. Creating the defence work services to assist them is obviously necessary as each service has lost the expertise that it had; for example, quartering in the Navy, quartermastering in the Army and I forget the term that the Air Force uses.

The Government have again shown that the defence budget is well balanced and that fighting efficiency has been maintained at a high level. The equipment ordering programme is strong, although I hope that my noble friend will not delay ordering the next batch of Type 23 frigates, and for that matter, the third Vanguard class submarine, or the 50-frigate Navy image will have disappeared completely from sight, if it has not already done so.

7.17 p.m.

Lord Trefgarne

My Lords, before I bring together the strings of the debate I should speak to the two orders in my name on the Order Paper.

The first of those is the Army, Air Force and Naval Discipline Act (Continuation) Order 1989, which was laid before your Lordships on 12th June. The purpose of the order is to continue in force for a further year the Army Act 1955, the Air Force Act, also of 1955, and the Naval Discipline Act 1957. Those Acts together provide the statutory basis for discipline in the three Services.

The second order is the Visiting Forces and International Headquarters (Application of Law) (Amendment) Order 1989, which was laid before your Lordships on 19th June. The purpose of the order is to add Spain to the list of countries to which the Visiting Forces and International Headquarters (Application of Law) Order applies. That will allow us to meet our obligations to Spain under the 1951 NATO Status of Forces Agreement. The original order was made under Section 8 of the Visiting Forces Act 1952.

Your Lordships may also be aware that it is our intention that an order under Section 1(2) of the Visiting Forces Act 1952 designating Spain as a country to which the Act as a whole applies should come into force at the same time. That order does not require parliamentary approval.

These orders will enable us to recognise the valuable contribution made by the 1986 referendum on Spanish membership of NATO by treating Spain in the same way as we do all our other NATO allies. I commend them to the House.

We have had an interesting and stimulating debate. It has been copiously endowed with the wealth of experience in these matters that your Lordships confer on such occasions. I and my ministerial colleagues will give careful consideration to what has been said today.

Perhaps I may turn now to specific points that were made during the debate. I start with the noble Lord, Lord Irving of Dartford, who made a number of points. They were prefaced by the declaration that he thought that the Government were spending too little on defence generally. That sits a little oddly, if I may say so, with the policy—if that is what it is, although I recognise that it has to come before the Labour Party—

Lord Irving of Dartford

My Lords, the point is that the Government are spending too little on the commitments that they have undertaken. That is why a proper review would bring those two things into balance.

Lord Trefgarne

My Lords, I recognise that that is the view of the noble Lord. He certainly said that he thought that we were spending too little to meet the commitments, at least those that we had accepted. I do not accept that for a moment, but I think I am entitled to say that the noble Lord's policy—yet to be approved by the Labour Party Conference, I recognise—calls for a freeze on defence spending, as I understand it. Perhaps that will change when a policy emerges from the conference later this year.

The noble Lord, Lord Irving of Dartford, and the noble and gallant Lord, Lord Hill-Norton, also referred to this. The former asked me about the numbers of destroyers and frigates, the size of the force that we have and our plans for maintaining it. The Government remain committed to maintaining a force of about 50 destroyers and frigates and intend to order sufficient new Type 23 frigates to ensure that the target is achieved. Tenders have been sought for up to four ships and are due to be returned to the Ministry very shortly—within the next few days. Decisions on the size and timing of the order will be taken as soon as possible after the tenders have been returned and evaluated. The future ordering pattern will be consistent with our commitment to a force of about 50 destroyers and frigates.

The noble Lord, Lord Irving of Dartford, asked me in particular about the size of the merchant fleet. This was a concern that was on the mind of more than one noble Lord, including that of the noble and gallant Lord, Lord Hill-Norton. NATO is concerned at the shortage of vessels suitable for transatlantic reinforcement. The matter is being discussed within the Alliance to try to find ways to ameliorate the position. The United Kingdom is playing its full part in these discussions. I believe that the position has become worse in the last year or so and it is right that NATO should now address the matter again because a problem is emerging which clearly needs to be dealt with. The noble Lord, Lord Irving of Dartford, also asked me about the civil resupply of NATO nations. This too is currently the subject of a NATO study into the requirement and the study will bring forward recommendations in due course.

The noble Lord, Lord Mayhew, in contrast to the noble Lord, Lord Irving of Dartford, seemed to think that the Government were spending too much on defence. Indeed, those were his precise words and I do not think he would consider that I was misrepresenting him.

Lord Mayhew

My Lords, in order to avoid any possible misunderstanding, I said that the proportion of 4.3 per cent. of GNP was excessive at this time.

Lord Trefgarne

My Lords, I noticed the noble Lord's words specifically and I think that he said that we were spending too much. However, I recognise that he wishes to qualify that in the way in which he described. The fact is that, however one defines it, the noble Lord apparently takes the view that too much money is being spent on defence purposes, anyway in relation to our national wealth. I do not think that that view is very widely shared in your Lordships' House, but I hear what the noble Lord has to say on it.

He asked me a number of detailed points and I shall try to deal with as many of them as possible. First, he asked me about the efficiency of the Procurement Executive, a matter which has recently been the subject of a considerable scrutiny by the House of Commons Defence Committee and other bodies. The fact is that the proportion of the defence budget that we spend on equipment matters has slightly declined in the last year or so. I make no apology for that, it is largely the result of a much more commercial and competitive procurement policy which has generated a considerable increase in value for the money that we spend on these purposes.

I was asked, I think by the noble Lord, about defence inflation. It was thought that because inflation, as related to defence equipment, was believed to be slightly higher than inflation generally, this would indicate a further cut in spending on the equipment. In fact, as a result of our competitive policies and perhaps for other reasons, so-called defence inflation has declined quite measurably in recent years, certainly in the last year or so. Indeed, figures for last year suggest—and I put it no higher than that—that defence inflation, so far as the United Kingdom is concerned, is now a point or two below high street inflation—if I may call it that—which has further contributed to the increased value for money and the increased volume we can get from the sums of money we spend on equipment purposes. I hope that the noble Lord will to some extent be reassured by that.

It is of course necessary to continue our pressures on the procurement process, not least by imposing upon our contractors much tauter contractual arrangements in relation to the procurement of the equipments which we obtain from them. That is generating some of the benefits to which I have referred.

The noble Lord also asked me about the AWACS offset programme. I do not know whether he has seen the reports, but my right honourable friend the Secretary of State for Defence was in Seattle at the beginning of this week, attending the roll-out of the first AWACS aircraft for the Royal Air Force. He made some remarks about the offset programme at that time. The fact of the matter is that the AWACS offset programme is going very well. I am speaking from memory so I hope that your Lordships will forgive me if I do not get the figures precisely right. We have now achieved $630 million-worth of approved offset credits in connection with that programme, which is getting on for half the value of the programme overall. We are only about two years into the programme so I think that, far from being the failure which some people have suggested it is, that programme is a considerable success in offset terms. Nearly half the Boeing offset commitment, which itself is 130 per cent. of the value of the programme, has been achieved in less than two years of what will be an eight-year programme, or thereabouts. I am very pleased and satisfied with those figures, as I hope that your Lordships will be.

The noble Lord, Lord Mayhew, also asked me about staff leaving the Procurement Executive for jobs in industry. The procedures relating to the acceptance of appointments by former Crown servants are based on two principles: first, freedom of movement; and secondly, of course, avoidance of any suspicion of impropriety.

The first principle is based on the positive benefit of interchange between the public and the private sectors, but also on the more fundamental principle of personal liberty. However, the Government are conscious of the need to avoid corruption or impropriety or the appearance of either in relation to Crown service. In the Government's view, the independent scrutiny of the operation of these procedures exercised by the Prime Minister's Advisory Committee—now chaired by my noble friend Lord Carlisle, as noble Lords will be aware, and formerly chaired by the noble Lord, Lord Diamond—maintains the correct balance between the two principles and effectively safeguards the national interest.

The noble Lord referred also to the reliability of equipment. My noble friend Lord Ironside touched on that matter as well. As my noble friend pointed out, I can confirm that reliability is now a very important consideration indeed in the evaluation of new equipments for the armed forces. The House of Commons Defence Committee report on the matter has not yet been published, although the noble Lord was right to mention some references to the matter by the Public Accounts Committee. We shall be responding to those in due course.

The House of Commons Defence Committee has asked for a further memorandum on the subject and has indicated that it will be addressing the matter in more detail later this year. We look very carefully nowadays at the reliability of equipments when considering the purchase of new items. It is a major feature now in the trials of equipments that we undertake prior to acquisition for service use.

My noble friend Lord Pym, speaking from the width and depth of his experience on these matters, made a speech with which, if I may say so, I very much agreed. It is necessary to have considerable care with the proposals coming from the Soviet Union. That was essentially the message which my noble friend expressed.

Turning now to the speech of the noble and gallant Lord, Lord Hill-Norton, I have already referred to some of the points that he raised. Perhaps I may add some words about our amphibious capability about which the noble and gallant Lord asked me specifically. Again I am speaking from memory, and I hope that the noble and gallant Lord will forgive me if I am not quite right.

We have announced that the amphibious capability will be maintained and that "Intrepid" and "Fearless" will either be replaced or modernised in the context of a maintained amphibious capability. We have invited industry to bring forward proposals along both those lines. We shall be evaluating them all during the course of the rest of this year and early next year, and we shall announce decisions very shortly after that. At the same time we have invited proposals for up to two aviation support ships to go with the "Intrepid" and "Fearless", or their replacements, and we shall be receiving proposals in connection with those very shortly.

I can confirm again that the Government are quite determined to maintain our amphibious capability. Speaking not from my own experience but certainly from my own beliefs in the matter, our amphibious capability is the one aspect of our naval power which we may actually have to use in the time that we have it. The fact of the matter is that out-of-area operations, in which amphibious capability is likely to play such an important part, are going to take place somewhere or other within the next few years. They always have done in the past, and I can see no reason to think that they will not in the future, although of course I cannot predict where that will be. That is why amphibious capability is very important, not only for that role but for its primary role in northern Norway as well. It is why we are so determined to ensure that we maintain the capability of our amphibious forces in the way that I have described.

Turning to the speech of the noble Lord, Lord Kennet, who made a number of points, he was particularly concerned about the intention to modernise the Lance system in due course. I must tell the noble Lord that the Lance system will not be sustainable beyond 1995. Therefore, if the Alliance rejects the third zero, as we do, clearly we must replace it in time to prevent it becoming unsustainable, as it will in the middle of the next decade. So I reject the proposition that there is no argument in favour of providing a follow-on to Lance. But if the noble Lord espouses the third zero, which of course we do not, that is the fundamental difference between us, not the question of whether or not we should produce a follow-on to the Lance system.

Lord Kennet

My Lords, what is wrong with an airborne system?

Lord Trefgarne

My Lords, we are talking of the shorter range system, not the airborne systems. The current Lance system is the existing short-range system, as the noble Lord is aware. It is that capability in which we reject the third zero. That is why we have to ensure that Lance itself is modernised or replaced towards the middle of the next decade.

I now turn to the speech of the noble and gallant Lord, Lord Bramall. He raised a number of important and interesting points, and I shall deal with as many as I can.

First, there is service pay, which clearly has important implications for recruiting and for retention. Since 1979 pay has been increased in line with the recommendations of the Independent Armed Forces Pay Review Body although, as the noble and gallant Lord will recall, it was necessary for wider economic reasons to defer or stage the increases on two occasions. We believe that the independence of the review body and our record in implementing its recommendations provides service personnel with the best possible assurance that their pay will continue to be determined fairly, and will remain competitive. As the noble and gallant Lord knows, the role of that review body is to ensure that the pay of service personnel remains comparable with that of their friends and colleagues in outside society, added to which they get something called the X factor to pay for the extra exigencies of service life. We are determined to maintain that system, we hope to the benefit of our servicemen and servicewomen.

To turn to conditions of service and allowances—a matter which was also on the mind of the noble Viscount, Lord Allenby—last year we introduced a new package of Armed Forces' allowances. Its aim was to make them more relevant to modern service life. It was not a cost-cutting exercise although as part of the total package allowances that are considered no longer appropriate are being phased out. I am aware that some service personnel feel that they have been disadvantaged by the changes. We are not complacent on the matter. We are keeping the new allowances under review and will propose adjustments if they prove necessary.

Concerning housing—another matter raised both by the noble and gallant Lord, Lord Braman, and by the noble Viscount, Lord Allenby—your Lordships may recall that the question of a house purchase savings scheme for members of the Armed Forces was raised by the noble and gallant Lord a few months ago. We discussed the subject fairly fully on that occasion. Since then, during the debate in the other place on the Finance Bill my right honourable friend the Financial Secretary, while expressing doubts as to whether fiscal remedies were appropriate, acknowledged the need for a dialogue with Ministry of Defence Ministers on this important subject. My honourable friend the Under-Secretary of State for the Armed Forces is pursuing the matter with him.

I was much encouraged by the wise words of caution from my noble friend Lord Mersey. He made an interesting suggestion about studentships. Perhaps I may look into that a little more carefully and write to him about it.

Reverting to the speech of the noble Viscount, Lord Allenby, he asked me about rifles, I think he was referring to the so-called drill purpose rifles which are much used in cadet forces. I remember that matter being raised with me a few weeks ago. I cannot quite remember what was the outcome; but if the noble Lord will allow me, I shall look into the matter and write to him on it.

Turning to the speech of the noble and gallant Lord, Lord Carver, he asked me particularly about the position of the Armed Forces regarding the community charge. In general, service personnel will be liable for and pay the personal community charge in respect of their sole or main residence in the same way as the rest of the population. A limited number of service personnel in short-stay accommodation or whose registration would not be in the interests of national security will be subject to special arrangements. The Ministry of Defence will make payments to the local charging authorities on their behalf and recover the contributions from them at the local personal community charge rate.

The noble and gallant Lord also asked me certain points about the Ministry of Defence research and development activity. That is a matter in which I am particularly interested. There has recently been a number of discussions on the very points which the noble and gallant Lord raised. Again, if the noble and gallant Lord will allow me, I shall write to him on that subject.

The noble and gallant Lord asked me about our decision to replace the WE177 free-fall nuclear bomb currently in the Royal Air Force inventory. This bomb, which provides the United Kingdom's sub-strategic capability, is likely to reach the end of its service life towards the end of the century. We are studying options for a replacement and in this process are taking full account of the SACEUR's requirement for a tactical air-to-surface missile. We expect to make a decision on a successor system around the end of this year or perhaps early next year. I hope the noble and gallant Lord will not mind my saying that, in our view at least, this forms an essential part of our flexible response posture. That is a posture which the noble and gallant Lord has himself been a part of in a very distinguished way in years past.

Turning finally to the speech of the noble Lord, Lord Hatch, who made a number of points but in particular raised the question of the disposal of nuclear-powered submarines when they come to the end of their life, the Royal Navy has only one decommissioned nuclear submarine at the present time. That is HMS "Dreadnought", or "Dreadnought" as she now is because she is no longer a commissioned ship. Further vessels are to be decommissioned between now and the end of the century. "Dreadnought" is securely berthed at Rosyth at present, where it presents no hazard to the workforce or to the public. No further nuclear submarines will come out of service immediately, but there will be some more by the end of the century.

These vessels cannot be scrapped in the usual way because after the spent uranium has been removed the reactor plant and its associated machinery retains radioactivity which has been induced in the steelwork by the operation of the reactor. We are considering options for the disposal of decommissioned reactors from "Dreadnought" and other submarines. These include sea disposal of the intact submarine, land burial of the intact reactor compartment and cutting the reactor plant into small pieces for storage and eventual disposal in the deep level repository to be developed by NIREX. When a decision has been taken, Parliament will be informed in the normal way. I can assure the noble Lord that we shall take full account of the environmental considerations to which he referred.

Lord Hatch of Lusby

My Lords, I am grateful to the noble Lord. Is it not the case that the House of Commons Defence Committee has told the Government that it is time that they made up their mind between the various options? Rather than telling Parliament, is it not a subject for Parliament, if not to decide, at least to advise the Ministry of Defence on rather than to be told that a decision has been taken?

Lord Trefgarne

My Lords, I do not think that the House of Commons Defence Committee will be slow in coming forward with its views on this matter, as it already has, as the noble Lord said. It is a highly technical matter. It is one to which I have given a great deal of consideration during the past year or so. We are taking all the advice that we can. We shall reach a decision as soon as we reasonably can and announce it in the normal way.

I must emphasise that this is not a matter of immediate urgency. HMS "Dreadnought", as she was, has been stored successfully for a number of years. There is no difficulty there. However, that cannot go on indefinitely and as further submarines will be decommissioned before too long we shall have to take a decision in time to ensure that it does not become an unmanageable problem. That we shall certainly do.

I turn now to the speech of my noble friend Lord Ironside, who was particularly concerned that British defence contractors should operate on what I think he would describe as a level playing field—very much a buzz expression in the industry at the moment. The Government are very anxious to ensure that that happens. The reciprocal purchasing arrangement with our French friends, to which my noble friend also referred, is an example of that. We go to great lengths with our French friends to ensure that our respective companies are able to bid on the level playing field. That is achieved through regular meetings and the publication of contract bulletins by both Governments. All such matters are being addressed and I hope that that contributes to the desirable objective to which my noble friend referred.

Lord Ironside

My Lords, perhaps I may interrupt my noble friend for one moment. Can he say what the ordering plan for the third Vanguard class submarine is to be?

Lord Trefgarne

My Lords, that is under discussion within the ministry at present. We have not yet agreed terms with Vickers Shipbuilding and Engineering Limited, which is building the submarine. We expect to do so within the next few weeks or months. When that happens we shall make our announcement in the usual way. I hope and expect that, all being well, we shall reach agreement on that matter well before the end of the year.

Times of change demand even greater attention to our defences, for change, however welcome, means some uncertainty, even instability. No one can predict what the communist world will be like in five or 10 years' time. Although we are hopeful, we must remain prepared for as wide a range of outcomes as possible. To be prepared for the worst indicates neither pessimism nor an unwillingness to do what we can to prevent the worst coming about. But it is the responsibility of government not to be carried away on transient tides of euphoria. Decades of ingrained habit in the Soviet Union cannot be broken quickly. The Soviet Union's habit of probing for points of dissension in the West will not swiftly change, nor will the temptation to exploit every propaganda opportunity.

I have been criticised during the course of the debate for being too hawkish and not sufficiently recognising the changes now emerging in the Soviet Union. Maintaining the security of this country is the Government's prime responsibility. Strong defences have been necessary for that and will continue to be. As this year's Statement on the Defence Estimates shows, the Government are committed to making adequate provision for the Armed Forces within an overall security policy of realism tempered with hope for the future. We shall continue to carry out that policy, which has now borne so much fruit.

On Question, Motion agreed to.