HL Deb 17 July 1990 vol 521 cc769-844

3.55 p.m.

The Parliamentary Under-Secretary of State, Ministry of Defence (The Earl of Arran) rose to move, That this House takes note of the Statement on the Defence Estimates (Cmnd. 1022).

The noble Earl said: My Lords, with your Lordships' permission, I shall speak to the other Motion standing in my name on the Order Paper when winding up and then move it formally at the end of this debate.

We ought to remind ourselves that it was only in the summer of last year that the great and historic changes in Eastern Europe began. No one could foresee that those quite extraordinary events were to take place and few were prepared to guess that the trickle of reform that perestroika had prompted in Eastern Europe would turn into a flood to sweep away the "ancient regime". The outcome was dramatic and exhilarating as the peoples of old, totalitarian regimes reached out for a new and better way of life, with generations of former harshness and helplessness clamouring to be replaced with a new world of hope and help. It was both incredible and fascinating to watch—indeed, almost frightening—for fast upon the heels of rapid change there lurks inevitably the uncertainty of the future.

Still, today, that pace of dramatic and historic change in Europe does not abate. As a result of free speech, as a result of being allowed to choose whom they wish to govern them, as a result of democratic elections, most of the countries of Eastern Europe now have new governments in power. The Soviet Union itself has agreed to withdraw its troops from Hungary and Czechoslovakia—and it may not be too long before there is a similar agreement with Poland. There is now the declared aim to withdraw all forces from Eastern Europe by the mid-1990s. In short, the Warsaw Pact as we knew it is today no longer a credible military organisation.

The economies of both East and West Germany have been united, and political union is fast approaching. The Soviet Communist Party has just completed a painful re-examination of the direction in which it wishes to go, while perestroika continues to make slow progress. The break-up of the Soviet Union remains a potential outcome of the strains affecting that country; indeed, we have almost become accustomed to continuous radical change in the countries of the Warsaw Pact.

We very much welcome President Gorbachev's acceptance yesterday of a united Germany's sovereign right to choose which alliance it belongs to, and his acceptance that, in his words: Whether we like it or not, the time will come when a united Germany will be in NATO if that is what it chooses. That is a major and very welcome breakthrough. President Gorbachev indicated clearly that NATO's willingness to adapt, indicated in the London Declaration issued after the NATO summit, had been a helpful factor in bringing that about. We also welcome the agreement that Soviet forces will withdraw from the German Democratic Republic over three to four years.

The terms of the Kohl/Gorbachev accord are a clear vindication of NATO's patient and reasoned approach to the issue of continuing German membership of the alliance and the fact that NATO has all along emphasised that it wishes to take account of Soviet security concerns and not to extract unilateral advantage from the unification of Germany or the developments in Western Europe.

The North Atlantic alliance, by its steadfastness and cohesion, by its patience, by its determination, has done much to bring about those changes. With that same determination and cohesion we in the West are responding positively to the new and welcome political landscape in Europe. However, we need to retain strong defences: history has not come to an end, and no one can suppose that either the Soviet Union, whose forces continue to be modernised, or, in the wider world, instabilities and risks will not threaten our security. The NATO alliance is committed to building on its longstanding political activities while retaining its primary role of preserving our security. It recognises the need in the future to place greater emphasis on its longstanding political role as it moves towards enduring and constructive peacebuilding in Europe. It was towards that very objective that the NATO summit meeting last week made significant progress.

That summit declaration will be seen as a milestone in the creation of a stable peace in Europe. Newspaper billboards in London after the the summit carried the message, NATO declares peace on the Warsaw Pact".

I am sure most people in West and East will indeed see it as a document which matches the diverse but nevertheless difficult challenges that now face us. We hope that the member states of the Warsaw Pact will join the West in a joint and open declaration that no longer do we consider ourselves adversaries, no longer foes. To that effect we look forward to President Gorbachev accepting NATO's invitation and becoming the first Soviet leader to address the North Atlantic Council. In addition, we wish to establish closer links between West and East by encouraging Warsaw Pact countries to seek and build regular diplomatic liaison with NATO.

The alliance has undertaken to review its force structure and strategy in the light of the reducing risk of sudden attack on Europe. We welcome the endorsement of multinational units building on NATO's experience with formations like the Allied Command Europe Mobile Force and the Standing Naval Force Atlantic and reflecting our belief that our Armed Forces in Europe are part of a collective endeavour, dedicated to preserving the peace.

NATO's military strategy will continue to encompass a mix of nuclear and conventional weapons to underpin deterrence and the presence of British, United States and other forces in Germany, but it will alter to take account of the changes in train in Europe and the changes in armaments. The alliance has always sought the lowest and most stable level of weapons, both conventional and nuclear, needed to maintain its objective of preventing all war. This is not new. Nuclear weapons will continue to be required to fulfil the alliance strategy of preventing all war in Europe by ensuring that there are no circumstances in which nuclear retaliation was ruled out. But we have also made it clear that nuclear weapons are for the prevention of war, not for fighting wars, and that after change in Europe is consolidated we shall need fewer of them, especially those of shorter range.

It is worth remembering that this year has already seen Presidents Bush and Gorbachev sign an outline treaty to make substantial reductions in strategic nuclear weapons. It is intended that the full START treaty should be signed by the end of the year. They also agreed to cease production of chemical weapons and to destroy most of their existing stocks. That destruction is to begin in 1992. We continue our efforts at the United Nations Conference on Disarmament to negotiate an effective convention banning chemical weapons worldwide. The changed relationship between West and East will find its most meaningful expression in the successful conclusion of the negotiations on conventional forces in Europe.

The CFE talks in Vienna are making good progress. Before the end of the year we are hopeful of completing the negotiations allowing the treaty to be signed at the summit meeting of the Conference on Security and Co-operation in Europe. By implementing the CFE treaty the massive Soviet superiority in key categories of offensive arms in Europe will be removed—something that has given profound anxiety to the Western world for four decades.

President Gorbachev showed great understanding and vision in recognising the validity of Western security concerns and agreeing the principle of asymmetric cuts in the Soviet offensive arsenal, while in response to Soviet concerns the NATO summit agreed that a commitment will be given on the manpower of the forces of a united Germany when the CFE treaty is signed.

After the current talks we want to move on further to discuss additional measures to promote security in Europe, including limits on manpower. We fully support the proposal that negotiations should begin between the United States and the Soviet Union on the reduction of short-range nuclear forces. When those negotiations have begun NATO will offer the elimination of its nuclear artillery shells from Europe in return for reciprocal action by the Soviet Union.

The Conference on Security and Co-operation in Europe will grow in importance as an instrument for improving the security of that continent. CSCE can help develop structures for co-operation within an undivided Europe. It will continue to perform the role that it has successfully filled over recent years of bolstering confidence and promoting human rights. While the very establishment of the CSCE process will add to its strength, we must be careful at the same time to ensure that it does not thereby lose the flexibility and balance that have been its hallmarks.

An expanded role for the CSCE can make a valuable addition to the range of institutions that are the foundations on which security in Europe is based—those foundations of the European Community, the Western European Union, the Council of Europe and NATO. CSCE cannot take the place of any of those existing institutions and it certainly cannot take the place of NATO which will continue to be the ultimate guarantor of Western security in a continent whose future, I make no apology for saying again, remains uncertain despite the many hopeful signs.

As a result of this changed security situation, we now have the opportunity to re-assess our requirement for military forces in the light of the receding military threat. It is in this context and against this background that the Options for Change study is considering our defence commitments and future political developments. I have stressed many times in your Lordships' House that this is an important and complex study and decisions cannot and will not be rushed. They deserve careful and considered thought, for from them will evolve the future size and structure of our Armed Forces—service men and women who must not only have the ability and mobility, if required, to defend our interests abroad but whose numbers and professionalism must also serve as a deterrent to possible hostile action against the United Kingdom or its allies. At the same time let me equally stress that we are very well aware of the need to end this period of uncertainty as soon as we can responsibly and sensibly do so.

Turning now to foreign fields, while our defence efforts will rightly remain concentrated in the European area, we still have defence commitments worldwide. Those commitments reflect the wider considerations of our foreign policy and make a substantial contribution to stability and security in other parts of the world. Such stability is of extreme importance to the United Kingdom because of our involvement in overseas commerce. It is important to the West because many of our major trading partners and allies also rely on overseas markets and imports of fuel and many other raw materials. Not least, regional stability is vital if the many thousands of British citizens who live and go about their daily business abroad are not to be put at risk.

However much the threat of war in Europe recedes, the world remains a dangerous stage. We have to face the fact that, despite the efforts of the international community, a number of developing countries either possess or are developing ballistic missiles. The Gulf War graphically demonstrated the havoc that they can cause when equipped with only conventional, high explosive warheads. If chemical or nuclear warheads are fitted, the threat that they represent multiplies enormously. We are therefore committed to supporting and strengthening the missile technology control regime in its aim to stop proliferation of ballistic missile technology. The spread of these weapons to areas of tension can only be viewed as a serious development.

The continuing proliferation of CW remains a matter of fundamental concern. In common with 19 other Western nations in the Australia Group the Government have imposed export controls over key precursor chemicals used in the production of chemical weapons and have issued to industry a warning of other chemicals of concern. We are also making every effort to ensure that industry does not unwittingly supply equipment or even whole plants which could be misused for CW purposes by would-be proliferators.

Elsewhere the United Kingdom has a long tradition of providing a valuable contribution to international peacekeeping forces such as the United Nations force in Cyprus and the multinational force of observers in Sinai. The most recent of these was the British contingent to the United Nations Transition Assistance Group to Namibia, whose role came to an end in March of this year. UNTAG, as it is known, was successful in its objective of assisting with the organisation of free and fair elections in Namibia and allowing that country to move to full independence. The part played by the British servicemen was outstanding, and your Lordships will, I am sure, wish to join with me in congratulating them on a job well done.

We are also helping the Namibian Government to establish a defence ministry and to create a Namibian defence force to defend its long borders. This assistance, which involves integrating elements of the South West Africa defence force and a guerrilla army, is important in helping Namibia to establish itself successfully as an independent country and the newest member of the Commonwealth. Our experience and success in helping to form and train the Zimbabwean National Army, following the Lancaster House agreement, will be invaluable in ensuring that our objectives in Namibia are achieved.

These initiatives, together with the other military training which we provide to other countries in Southern Africa, serve as a strong symbol of the Government's continuing commitment to the security and stability of the region. More generally, they are a good illustration of how military assistance overseas can help improve the effectiveness and self-sufficiency of the armed forces of friendly nations beyond the NATO area.

The Royal Navy has also provided protection and assurance for shipping in the Gulf for more than nine years through the Armilla Patrol. It is an impressive statistic that at the height of the Iran/Iraq conflict the patrol accompanied over 1,000 vessels, more than all the other western navies put together. Now, with the welcome reduction in tension in the Gulf, we have been able to adopt greater flexibility in the operating patterns of our ships in the Armilla Patrol, thus improving availability for other tasks.

Looking further to the West, we maintain a garrison in Belize at the request of its Government to defend the independence of our former colony. We also have a permanent naval presence in the Caribbean area, which includes five of our remaining dependent territories, in the form of the West Indies guardship whose primary task is to support the Belize garrison. The guardship also undertakes joining anti-drug patrols with the United States Coastguard, providing surveillance and monitoring assistance. We believe these patrols make an important contribution to countering the threat posed by international drugs trafficking and we are looking at ways of increasing the Royal Navy's contribution to anti-drugs operations in the Caribbean.

The United Kingdom has obligations under the Five Power defence arrangements with Australia, New Zealand, Malaysia and Singapore. United Kingdom forces regularly participate in land, sea and air exercises with the other FPDA nations. This year that included the deployment in March of ground attack and air defence Tornados and HMS "Charybdis" to Malaysia to take part in an air defence exercise: and in the autumn, elements of 5 Airborne Brigade will deploy to Malaysia for exercise "Suman Warrior". In addition, HM ships from the Armilla Patrol and patrol craft from Hong Kong have taken part in FPDA naval exercises.

Of all our overseas commitments, Hong Kong has perhaps attracted the greatest attention following last June's events in China. The Government fully recognise their responsibility for Hong Kong's security until 1997. The garrison will continue to play a vital role in support of the Hong Kong police in countering smuggling and stemming the flow of illegal immigrants into the territory; and in demonstrating HMG's sovereignty over the territory. Plans for the eventual withdrawal of the garrison by 1997 will be carefully tailored to ensure that our ability to carry out these tasks satisfactorily is not impaired.

Our defence effort in all these areas is crucially dependent on our greatest asset of all—our men and women in the Armed Services. I have travelled far in the past year and wherever I have gone, whether it be here or abroad, I have seen at first hand the professionalism and the total commitment of our Armed Forces in whatever theatre they are serving. I cannot speak too highly of the skills and dedication of our servicemen and women and their civilian support. Above all, we praise the courage and dedication of our Armed Forces in countering the threat from terrorists. The Services' major national operational commitment remains support for the Royal Ulster Constabulary. This year has seen tragic events in Northern Ireland, on the mainland of Britain and abroad. Innocent men and women have been killed and maimed in cowardly and brutal attacks. In recent weeks two members of the RUC were murdered in cold blood in central Belfast. I am sure your Lordships would wish to join me in expressing our sympathy to the families of those policemen. Bombs also exploded at RAF Stanmore, without causing casualties, and at the Carlton Club. We all wish the noble Lord, Lord Kaberry, and the others injured in that attack a speedy and complete recovery.

Such acts demonstrate the continuing callous nature of the terrorists. No democratic society can tolerate these violent criminals and never, ever will we give in to their blackmail. Our efforts will continue, in close co-operation with other nations until they are brought to justice.

I close in the same vein as that in which I began—the dramatic and welcome changes in Eastern Europe. The map of Europe is being re-drawn; and when the process is complete we have a right to be optimistic that we will find ourselves in a continent from which the ghosts of the past have been exorcised. But such a happy result is not predestined: it requires a patient, careful and clear-headed approach from all of the Governments involved if the insecurity of the cold war is not to be replaced by the insecurity of a fragmented and unstable Europe. It is with this clear and unequivocable objective in view, that our country, the United Kingdom, is determined to play its role as a constructive and leading participant in the difficult days that unquestionably lie ahead. I beg to move.

Moved, That this House takes note of the Statement on the Defence Estimates (Cmnd. 1022).—(The Earl of Arran.)

4.17 p.m.

Lord Williams of Elvel

My Lords, the House will be grateful to the noble Earl, Lord Arran, for introducing his Motion. I much look forward to the maiden speeches of the noble Baroness, Lady Park, and the noble Lord, Lord Inglewood.

It is usual for noble Lords speaking from this Dispatch Box to say that debates are opportune. However, I have to say to your Lordships that this debate is somewhat inopportune in that the options for change studies are—as we understand from the press—tomorrow being studied by a Cabinet committee and an announcement will be made some time in the future, either before or just after the Summer Recess. In those circumstances, we do not really know what the Government are doing and where they will lead us. Therefore, all I can do is to follow the noble Earl in reviewing some of the matters that he reviewed and assessing the implications for our defence planning.

I wish also to extend the debate a little to assess the implications of what is happening in central Europe at the moment, to the United Kingdom economy, and the effects that it might have on our defence contractors. I shall then wish to put some questions to the noble Earl to which he will no doubt be able to reply when he winds up the debate.

The London declaration of the NATO summit was undoubtedly one of the historic documents of our time, as the noble Earl said; and we agree with him. It is worth recalling the main provisions of that declaration. NATO has asked the Soviet Union and its Warsaw Pact allies to sign a joint peace declaration committing all signatories to non-aggression. NATO has invited President Gorbachev and other East European leaders to address its top decision-making body and to set up offices in Brussels to liaise with NATO. Manfred Wöirner, secretary-general, visited Moscow on 14th July to brief President Gorbachev. Nuclear arms will be weapons of last resort, moving away from the doctrine of flexible response, and the US will withdraw all nuclear artillery shells from Europe if the Soviet Union does the same.

Once a treaty is signed on conventional forces in Europe NATO will commit itself on troop levels in a united Germany and seek talks on further cuts. It will move from a strategy of forward defence and develop smaller and more mobile multi-national units. NATO wants the Conference on Security and Co-operation in Europe (CSCE) to have a secretariat to service regular high-level consultations, a mechanism to monitor elections, a centre for the prevention of conflict and a parliamentary assembly of Europe. That certainly is a historic declaration.

We must now ask ourselves the question: what on earth is the point of NATO? It was set up to fight an enemy. If there is no enemy, what is the point of NATO? We should not be caught in a timewarp of strategic planning, saying simply that if there is no enemy we must invent one in order to keep our weapons systems up to date and to give employment to generals and our defence contractors. The point of NATO now is to become more political, to become more of an alliance of allies having certain defence requirements but more political requirements, but with the security of the alliance kept in force during a transitional period about which I shall talk in a moment.

The second fact to which I wish to draw your Lordships' attention is the declaration of independence by the Ukraine. The Ukraine Parliament passed a resolution declaring that Ukraine laws were superior in jurisdiction to Soviet laws; that it no longer accepted that the Soviet Union had right of sovereignty over the Ukraine; and that the Ukraine could create separate armed forces and a separate currency. Noble Lords who have studied history will be aware of the consequences of the break-up of the Ottoman Empire. As we go forward—and daily there are more declarations from various republics of the Soviet Union that they wish to be independent—we increasingly appear to be witnessing what is equivalent to the pre-1914 break-up of the Ottoman Empire. That involves ethnic and nationalist governments which create danger. They created danger at the turn of this century and they may well do so again.

The state of the Soviet Union politically is poor. However, the state of the Soviet Union economically is a disaster. That is why Chancellor Kohl was right in doing a deal with Mr. Gorbachev by offering him as yet unrevealed sums in return for a concession from the president that a united Germany could be part of NATO.

There is no conceivable way in which the Soviet Union, in any form in which it may emerge politically in the near future, could mount a serious military offensive against the West. To do so requires not only the military hardware but the economic back-up; you cannot fight a major war unless your economy is in good shape. It is all very well for the G7 summit to declare that the IMF and the European Community will look at the Soviet economy. They will find exactly what the Bundesbank found when it investigated the East German economy. There was nothing there; no statistics and no facts on which to base any conclusion. That is the state of the Soviet economy at the moment. We must put that in its proper defence context. The Soviet Union is flat on its back. There is no way in which any country which is flat on its back will constitute a military threat.

Given that position in central Europe, we must look at the implications for our defence posture and that of our NATO allies. However, the noble Earl was right to remind us that we must not ignore events outside central Europe. After all, there is Hong Kong and the whole China question. There is the unresolved problem in the Middle East. There is the resurgence of a militant Islam which will pose threats in the future. There is the Northern Ireland problem which remains unresolved. Therefore, we have a position in which central Europe looks hopeful but the rest of the world is rather more doubtful.

What are the implications for our defence planning? Let us accept the argument that there will be no massive attack from the East and that the 200 Russian divisions which were going to roll across the Elbe simply are not there. If they are there they will have no food and no petrol for their tanks because their supply lines are so inefficient. Let us assume that during the next few years the words of the London declaration will come about and that the CSCE—which, I remind your Lordships, does not have a telephone number let alone a secretariat—will develop into something more elaborate. Let us further assume, as we must, that the development of the CSCE will involve the Soviet Union in whatever form it finally emerges; whether it is a commonwealth of nations including the Ukraine, Georgia, the Baltic republics, the Russian Federation, Uzbekistan and others, or whether it is a more federal union such as we have learned to live with up to date. We must now assess what we do in this country about our defence planning.

The noble Earl rightly said that a CFE agreement is much more likely as a result of events during the last few months. The NATO summit was right in saying that we should go further. This is the time to look for further and deeper cuts in conventional armaments. However, those cuts must also be negotiated; we cannot cut unilaterally. Having assumed all that, there will still be a period of transition and instability before we can be certain that central Europe has overcome the problems that result from the break-up of an empire.

Turbulence exists in Poland, Czechoslovakia, Hungary, and now the Ukraine, the Baltic republics and elsewhere. It is leading to political and economic instability. If we have learnt from history we will know that those two forms of instability lead to military instability. Therefore, we must pass the period of transition, and keep up our guard while we are going through it, and should not take too much for granted.

The role for NATO will still be security even on a reduced basis. However, there will also be a role for NATO in negotiating, implementing and verifying disarmament agreements. If all turns out for the best—and we hope that it will—there will be every prospect of a reduction in the level of defence spending. Generally, our armed forces should be smaller and better equipped. No doubt that is a task to which the Government will address themselves. For instance, it could mean a British army which, instead of consisting of approximately 140,000 personnel, might be reduced to 75,000, with reduced procurement of tanks and other support material. This process has already started. After all, the Government have announced a few one-off cancellations of defence contracts: 33 Tornado aircraft and the "smart" bomb. Those are but a start.

When I said that I wished to discuss the impact on the United Kingdom economy I was very serious, because if the Government are going to take us in the direction in which I think we ought to go, of reduced defence expenditure because of the greater promise in central Europe, the defence industry and defence contractors need to start planning their diversification into civil manufacturing now. We cannot allow the free market to operate in this sector.

Noble Lords with very long memories will remember demobilisation after the First World War, which was chaos. Those with memories such as mine will recall demobilisation after the Second World War, which was well planned. There will have to be a measure of demobilisation after the end of the cold war. That has to be planned too. We cannot to run the risk of obliterating major industries in our country without a properly planned partnership. After all, 90,000 jobs in the defence industries have been lost over the past decade. Many more will be lost if there is a reduction in defence spending of the kind that is being envisaged, unless it is planned properly.

Here we have something to learn from the French. The relationship between the French Government and French defence industries and trade unions is much closer than ours. They plan matters much better than we do. The nexus is much more tightly drawn. I should like to see the Government learning from the way in which the French operate in this regard, appreciating that there is a major problem here with which we have to deal.

Now I come to the questions that I should like to put to the noble Earl. First, can we be sure that once the Options for Change studies are published there will be a coherent government policy on security and defence procurement which all Ministers support? After all, various Ministers seem to have circulated documents about various possibilities. Can we be sure that the Government will have made up their mind and that all Ministers will support their view?

Secondly, will we then see an end to the one-off announcements about cancellation of this or that contract which seriously destabilise relationships between the Government and defence contractors—announcements apparently made randomly as political occasion demands?

Thirdly, what proposals have the Government to cushion the effect on contractors of reduced defence procurement? Are they going to rely on the free market or are they prepared to adopt a more rational attitude?

Only when we know the answers to those questions will we be able to form a judgment on whether the Government are leading us down the right track.

We must accept that there is a delicate balance to be struck between maintaining proper security for ourselves and our allies and taking full advantage—both in terms of a vision of prolonged peace, such as the noble Earl talked about, and in terms of economic benefit—of the opportunities that are now open to us.

Nobody would deny that the prospect is exciting, but we have to cross the period of transition with possible turbulence ahead. That turbulence will not be confined to central Europe. The noble Earl quite rightly mentioned the Middle East problem which is still unresolved, Islam; and even now looming on the horizon we can see the prospect of what will happen in China. Tiananmen Square was only a harbinger of what will come sooner or later. It is time to move forward with imagination, but not yet a time to lower our guard. That is the delicate task which lies before us.

4.36 p.m.

Lord Mayhew

My Lords, a great deal of what the noble Lord, Lord Williams, has said would be acceptable on these Benches, although I was surprised by a few of the matters that he raised. He said that we knew nothing about Options for Change. Has he not been reading the newspapers? Or does he think that the leaks are not to be believed? On the contrary, the leaks happened simultaneously; they were co-ordinated and detailed. We know all about Options for Change. We know what Mr. King stands for and we know what Mr. Clark has been fighting for. We learned from the papers this morning that Mr. King has the support of the Prime Minister and that Mr. Clark has been defeated. If the noble Lord, Lord Williams, does not believe that, how is he going to inform himself about British defence policy? Is he going to listen to statements of Ministers and read the White Papers? I recommend him to read the Independent and The Times of this morning.

Before I come to the points of agreement with the noble Lord, I should like to raise another matter. He spoke most eloquently and convincingly about the absence of a conventional threat, and what he said seemed to be very true; but when we are trying to assess threats we have to distinguish between possible future conventional threats and nuclear threats. I find it hard to believe that a time will not come when this country might be open to the threat of nuclear blackmail, either by a new regime in the Soviet Union or by another country.

Despite the vast improvement in international relations, we on these Benches hold to the view that this country should maintain its strategic nuclear deterrent. The Trident was never our choice of weapon system, but I will not go into that now. However, things being what they are, we think the Trident programme should be completed. We feel that for a fully viable fleet there should be four submarines instead of three.

That raises a point on which the Government can be challenged. The hitting power of the fleet depends on the number of missiles carried and the number of warheads on each missile in each submarine. In our view, the hitting power should, if necessary, be sufficient to inflict unacceptable damage on any challenger. We consider more than that to be superfluous. The Government's view is different. The White Paper says: Even after a START Treaty involving reductions in US and Soviet arsenals of the size now under discussion in Geneva had been implemented, our Trident force would still represent a smaller proportion of Soviet strategic nuclear warheads than did Polaris when it entered service. Reductions in US and Soviet strategic arsenals would have to go much further before we could even consider including the British deterrent in any future negotiations". In other words, whether we negotiate about Trident depends, in the view of the Government, on the proportion of our warheads to Soviet warheads. But since, even after the START Treaty, the Russians would have a vast overkill capacity, this would land us with more nuclear warheads than we need.

Ironically, this week the Commons Select Committee on Defence reported as follows: There is now a significant risk that some elements of the warhead programme may fail to meet their scheduled delivery date". It may be ironical that the failure to produce warheads will actually compel the Government to adopt a more reasonable attitude to the necessary hitting capacity of the Trident fleet.

If we cannot altogether rule out the possibility of future threat of nuclear blackmail, it is hard to imagine this country being threatened by conventional attack within the foreseeable future. The Soviet Union is withdrawing its forces from Eastern Europe and Eastern Germany. It is unilaterally disarming. As the noble Lord said, it is desperately divided. It is bankrupt. That means that for the foreseeable future a conventional Soviet attack through the new democracies into NATO territory is not merely difficult to imagine but so improbable that NATO can now safely make substantial reductions in its conventional forces.

Judging from the White Paper, the noble Earl's speech and the leaks in the newspapers, the Government are still hesitant about that. Despite what the noble Earl said at the start of his speech, the Government have for years underestimated and misjudged the significance of the changes in the Soviet Union. The Gorbachev revolution is now more than five years old. I am glad to say that the old Liberal Party is on record as recognising from the start its significance, including its significance for German reunification.

However, years passed before the Government began to recognise even tentatively that things were changing. The 1988 White Paper said: We are now at last beginning to see signs of change in the Soviet Union … but these are early days and we shall be looking for hard evidence, in the form of actions not words, that the 'new thinking' represents a genuine and lasting shift in Soviet policy". The 1990 White Paper was equally behind events. It said: We cannot rely for our security on the public pronouncements of the current Soviet leadership". It went on to announce with evident pride: The defence budget will rise by about £1 billion in each of the years 1991–1992 and on current inflation projections there will therefore be real growth in the budget over these years". That was last year. On 17th January this year we held a debate and the misjudgments were admitted rather bravely by the noble Lord, Lord Brabazon, winding up the debate. He said: We have witnessed dramatic changes in Eastern Europe. Even six months ago we had little inkling of what was in store. In October [last year] … German unification seemed a virtual impossibility or at least a prospect so remote that there was little point in devoting much time to it".—[Official Report, 17/1/90; col. 675.] However, many observers, including some on these Benches, are on record as saying at the beginning of the Gorbachev revolution that it made German unification inevitable.

That record of the Government is not a record of caution; it is a record of serious misjudgment. It is one reason why the Government have found themselves at odds with their allies on a number of vital subjects in recent months: for example, on the subject of German reunification; on deployment of nuclear weapons in Europe; on the need or otherwise for a tactical air-to-surface nuclear weapon. It is a reason why the Prime Minister acted in the role of a wet blanket at the NATO summit and it explains the decision reported in today's paper that they are not about to make substantial cuts in the defence budget.

As the noble Lord, Lord Williams, said, it is true that Mr. King last month cancelled 33 Tornadoes and called for a moratorium on defence procurement, but why so late? Why not months before? Why not give the defence industries more time to adapt? The Times this morning said that Mrs. Thatcher and Mr. King are waiting, until a clear picture emerges about political change, particularly in the Soviet Union". That suggests strongly that future cuts will also be too limited and too late.

The Government's slowness to react also means that they give us no guidance about the future organisation of defence in Europe. The London Declaration of the NATO summit was admirable in many respects. It proposed excellent initiatives in relations with the Soviet Union and Eastern Europe. It proposed excellent initiatives on conventional and nuclear disarmament and on conventional and nuclear deployment, but it did not address itself to the increasingly relevant question of its own future.

NATO has been such a brilliant success and has achieved its objective with such remarkable completeness that it is only natural that its members should see the future as sticking together and taking on new tasks. I believe—and I think that my noble friends will agree with me—that that is a mistaken view which emerged quite plainly from the noble Earl's speech this afternoon. In the new Europe, it is not only the size, balance and deployment of NATO forces which are wrong, but its membership, structure and purpose have already become anomalous. The presence of Soviet forces in Eastern Germany is already an anomaly. By the time they have left in three or four years, according to that admirable agreement recorded yesterday between the Germans and the Russians, the presence of United States forces in West Germany will also appear wholly anachronistic and anomalous and will appear so particularly to the German electorate.

NATO was suitably constituted for the task of resisting aggression from the Warsaw Pact, but for what other tasks is it suitably constituted? With the United States in and the Russians out, is it suitably constituted to handle threats to security in Eastern Europe? Obviously not. Is it suitably constituted to handle threats to security in the Middle East? Obviously not. Can it find some new role—perhaps take on an economic role linking the United States with Europe? Obviously not, because there are other organisations which could do that better.

Surely the main task of NATO must now be to work for its own replacement by a defence organisation more suited to the new Europe. The noble Lord, Lord Williams, and the noble Earl mentioned that admirable body, the CSCE. Plainly, it can and should expand its security role in the future. It can develop institutions for monitoring, for mediation and even for peace-keeping.

However, as a NATO replacement, we must look not for an organisation of common security, but for an organisation of pooled defence, which is a different matter and one surely beyond an organisation like the CSCE with its 35 members, all sovereign, all veto-wielding and including the Soviet Union and the United States.

A more realistic proposal is being put forward. I believe that one of the protagonists may be the noble and gallant Lord, Lord Carver. I am not sure, but we look forward to hearing him speak in the debate. A more realistic proposal would surely be to develop the existing Western European Union into a European defence community on the lines of the existing European Community. In due course, other European countries could join and eventually perhaps the two communities could merge. That line of approach is surely worth studying. I hope that, despite the fact that the discussions are secret, the Government are discussing those longer-term projects for a situation in Europe which is rapidly changing in the most fundamental way and which will produce problems that must be resolved before long.

Finally, by definition, long-term objectives are not immediately practicable, but that does not mean that they are useless. They can provide momentum and a sense of direction to the peace process, but in their European policy, in defence and in many other respects, the Government's policy has lacked all sense of direction. They have simply reacted belatedly to changes which, more often than not, they entirely failed to foresee.

4.50 p.m.

Baroness Park of Monmouth

My Lords, everything that I have to say has already been said much better from both sides of the House, but I hope noble Lords will bear with me. I have chosen to speak in this debate because of my deep concern lest, out of a mixture of natural euphoria and our national tendency to hope for the best, we should lower our guard too soon. Why am I playing Cassandra when all the world is rejoicing? It is because leopards do not change their spots overnight.

I have served in three countries ruled by communist regimes: the USSR, just after Stalin's death, North Vietnam during the Vietnam war between 1969 and 1970, and Mongolia. I admired, and still admire, the courage of their people as much as I hated the regimes themselves. I cannot but recognise in Mr. Gorbachev's repeated signals to the West, through such fluent spokesmen as Gennadi Gerasimov, that we must make concessions if he is to survive and carry out his policies—the tactics so successfully used by the North Vietnamese to win concessions from the Americans. The doves with the politburo would win, they said, if only they could demonstrate a victory—that they were capable of securing some advantage or other. The doves wanted to beat swords into ploughshares, but they needed help. But there were no doves and hawks—only a united politburo whose view of negotiation was not ours.

The North Vietnamese leaders, to quote a party directive of November 1970, regarded the diplomatic offensive—that is, negotiations—as designed to change the balance of forces between them and the enemy but not as a step towards a peaceful solution. For them, negotiation was not a bargaining process involving concessions from both sides and leading to an eventual compromise solution. When Mr. Gorbachev says in effect "If you do not do what I ask I shall be overthrown" he is using a very old tactic. Even Stalin is said to have told a Western visitor that he had to contend with a hard-line old guard who, he implied, restrained his more liberal tendencies.

Khrushchev and Brezhnev told much the same tale from time to time. Mr. Gorbachev must undoubtedly have some disgruntled generals on his hands. Resettling all those troops at home cannot be easy. But the front line units are being re-equipped with the most modern equipment. Take, for instance, land-based strategic missiles with nuclear warheads in place and on stream. Of the SS24 (rail-mobile and silo), each missile carries ten Merv warheads. Ten were in place in 1988, 30 in 1989 and 60 so far this year. Of the SS25, road-mobile only, carrying a single nuclear warhead, 100 were in place in 1988, 165 in 1989 and 225 so far today. I am indebted to the London-based International Institute for Strategic Studies for those statistics. Will the Soviet army really present Mr. Gorbachev with any problems?

Not least, military coups are not in the Russian tradition. They have recently acquiesced that the armed forces should continue to be politicised. Army, party and KGB stand together. The party was created to wield totalitarian power. It shows little sign of renouncing its right to control every aspect of Soviet life. Mr. Gorbachev has just reinforced its mandate and said that the Communist Party will live. We are therefore still dealing with a communist regime which thinks in the communist way, and Mr. Gorbachev draws his power from that base. He needs the KGB if he is to know sooner than the other leaders what is happening inside the Soviet Union. It is not too difficult to believe that he could have struck a bargain with both the army and the KGB before he ever launched glasnost and perestroika and his initiatives with the West. He is, after all, a man who came up through the system. In return for a leaner, meaner army and a measure of free speech he would charm NATO into laying down arms which it would be far harder for the West, under pressure from a euphoric public opinion, to take up again in the face of any future renewed Soviet threat or even pressure.

Like Khrushchev, he may have underrated the stubborn resistance of the nomenclatura to the economic reforms which I am sure he genuinely wishes to put through. Like Khrushchev in 1956 with the Poles and the Hungarians, he probably underestimated the passionate innate rejection of communism which has characterised the Eastern bloc outside the Soviet Union and made it most difficult to turn the clock back again.

The salient point is that whether he survives or falls we have still to reckon with a party power base whose members' interests do not necessarily make them good Europeans; who do not necessarily cease to constitute a threat—if only to their former satellites—which is best held in check. If that power base falls apart and disintegrates under the pressure of dissident nationalism from within Soviet central Asia where fundamentalism is a further threat—the Ukraine, the Baltic states—chaos will also be dangerous and the situation volatile. Either way, we do the world a service by retaining our shield and guaranteeing some stability.

At best, we are dealing with an experienced and battle hardened man who will exploit our weaknesses and contradictions, who appears to have put the genie back in the bottle—just—in Soviet central Asia and the Caucasus, and to have pushed the Baltic states into a nice quiet dark corner knowing that we prefer not to ask awkward questions. If and when he needs something more from the West he may uncork the bottle just a little. He may genuinely lose control. In that case a volatile and destabilised Soviet Union will be a loose cannon which will be dangerous indeed unless we have retained the means to contain it and to provide stability.

I fear that what I have had to say will be only too obvious to many whose experience is far greater than mine. To some it may seem an ungenerous and even destructive approach to the remarkable events of the past year. I rejoice over them, but I feel strongly that the young in our country and in Europe on both sides of what used to be the Iron Curtain, including the many who were so recently part of the Soviet empire, must not lose their chance to grow up free simply because we forgot the Prague spring and its outcome—the thousand flowers that bloomed and then had their heads cut off.

Anatoly Shcharansky was amazed when in Oxford in 1988 he was told that of course the Jews would no longer need to apply for visas to leave. Public opinion in the new world of glasnost would surely not tolerate any further restrictions on freedom of movement. He replied that in the Soviet Union the tap is turned on and off at the top. No sensible man would count on the KGB having heard of the power of public opinion.

In Khrushchev's day, I remember that he let many out of the camps and rehabilitated them after the famous secret speech on Stalin at the 20th Congress in 1956. The West believed then that the party would have to listen to the technocrats because, by our standards, Russia desperately needed to improve its economy, as it does today. There followed the Brezhnev years, Andropov, and Chernienko. It could happen again, despite the truly amazing manifestations that we see daily.

Finally, we have to remember that the people of the Soviet Union, unlike the Poles and the Czechs, have had little practice in making choices and are only now exercising their democratic muscles. Some former members of the Viet Cong, who had defected and to whom I was talking in 1970 about party doctrine, once complained to me bitterly that in the West no one told them what to think: not what to do—what to think. How could they know what to think when they had no directives?

I greatly respect and value the spirit of wisdom and broad tolerance which characterise the proceedings of this House, and I would not wish noble Lords to think that I approach life in a wholly negative way. I believe that the countries recently freed deserve both our practical help and protection. I know that there are many among those diverse peoples who make up the Soviet Union who, by their courage in what seemed hopeless circumstances for so many years, equally deserve our help. But I believe that those people too, like Sakharov, would warn us to be careful and not to believe in miracles too soon. We should be quite sure that we are communicating to Mr. Gorbachev and his government a message of qualified support which looks for deeds, not words.

During the war, at one time I had to instruct a number of Polish officers. After a day or two they came to me and said, "We are very far from home. Nobody ever speaks Polish in our hearing. Could you not say something in Polish to us every day?" I thought that rather touching, forgetting that they spoke in Polish to each other all the time. I said, "Of course", and they taught me how to say good morning in Polish. Every day I used to go in and say good morning to them in Polish, and that clearly gave them a lot of innocent pleasure. However, one day a Polish general came to the camp. I said good morning to him in Polish. I was taken aside: it was explained to me that I had not been saying good morning!

I told your Lordships that story because it shows how important it is to know what message you are communicating when you communicate it. That is why I want us to be very clear in what we say. The Secretary of State has described defence as our insurance policy. Let us keep up the payments.

5 p.m.

Lord Braman

My Lords, I begin by congratulating on behalf of the whole House the noble Baroness, Lady Park of Monmouth, for her excellent and, if I may say so, very wise speech. The noble Baroness brings great experience of the international scene, having served in the Soviet Union, Africa and Asia. We are fortunate to have the benefit of her wisdom at a time when there are apparently so many changes in the international scene. We look forward to hearing from her in the future.

To listen to some of the kite flying in the media on the subject of defence cuts one might think that it was highly desirable, if not essential, that many of the British Armed Forces should be done away with as quickly as possible whereas the position is to the contrary. The sensible, if rather bland, statement on defence makes clear that it is very much in the national interest to maintain efficient, respected armed forces which can be relied upon to act effectively and professionally if important national interests are ever threatened, as they were in the Falklands, and which can be trusted to act within the law if the civil power requires support as it has done for over 20 years in Northern Ireland and seems set to do for some time yet.

When Europe's borders are open after 1992 I can see some of our security problems increasing. I believe most noble Lords would agree (indeed, the Minister implied) that there are very few national institutions which have so well preserved their reputation and integrity in the eyes of the public as the Armed Forces of the Crown. Their contribution to our national life and to peace is recognised as one of the steadier and more consistent influences in our democratic society. Their future must therefore be of great concern to us all.

That contribution has not come about by accident. It has been nurtured over many decades. It will certainly not be helped if, by exaggerating sensible reductions for the future, we were to drive out of the Armed Forces so many who are worth keeping in, or if we were to cut the forces so dramatically that they were left with virtually no operational capability to speak of. The government statement gives no hint of that, but it is not clear what lies behind the words. One recalls what happened in the 1920s when, over-optimistic about the prospect of peace in our time, we effectively put paid to any modernisation of equipment or to any consideration of professional military thought in our forces and all but left them at the mercy of the German juggernaut when, only 15 years later, mortal threat stared us in the face. That is proof, if needed, that once you turn off the tap to any marked degree, the Treasury is most unlikely to allow you to turn it on again until it is virtually too late.

We hope that history will not repeat itself. We should have learnt some lessons about reading the warning signs. Attitudes to the use of force have certainly moderated, at least in Europe, where the fear of nuclear involvement is most marked and where economic domination can be so much more effective than armed aggression. For the moment a new spirit appears to be abroad. However, ideological uncertainties and ethnic problems and rivalries still exist in Eastern Europe and even in the Soviet Union, as they did when governments like the Weimar Republic were also struggling with unfamiliar democracy. Therefore, we cannot be that comfortable and confident about the longer term future. In fact, Europe as a whole, despite the rhetoric, is probably more unsettled than it has been for 40 years.

Therefore, I hope that there will not be excessive parliamentary and public pressure on Ministers to make disproportionate savings on defence and to take unnecessary risks in search of a quick peace dividend. Insatiable pressure from the Treasury, of course, goes without saying. However, having said that, no one in his right senses wants to pay a higher insurance premium—which is what defence expenditure often amounts to—than is really necessary. The chiefs of staff will be appreciating that as well as Ministers. I was therefore very glad that the Secretary of State for Defence confirmed in another place that rumours that the chiefs of staff were somehow seeking to obstruct or thwart Ministers on what they wanted to do—whatever that may be—were totally without foundation. It is not within their constitutional position to do so and, in my experience, it is not their style. I have no doubt that they would positively welcome some firm political assumptions and parameters about the size and shape of our forces so that more detailed military planning can take place and harmful uncertainty removed.

What the chiefs of staff are paid to do as a body is to take part in robust dialogue to ensure that the so-called options for change are examined professionally—not only bureaucratically and financially—and that any attendant risks are properly spelt out. I hope, specifically, that they will be pleading with the Government not to compromise on a properly considered blueprint for the future, which must take a bit of time, by being forced into a virtual moratorium on accessible short term expenditure which can be so damaging for the morale, motivation and professionalism which we need more than ever to retain. I say that particularly as the shortage of cash to meet an agreed programme has not been brought about by incompetence on the part of the Ministry of Defence, which has actually kept its inflation below the national average, but only by a manifestly false estimate of inflation by the Treasury to which the Ministry of Defence found itself bound. If Ministers do not take a robust line over that, they could wrong-foot themselves for sensible and comprehensive savings later.

What are the relevant factors which genuinely indicate that we can make significant savings in our defence expenditure and which will govern what we want our Armed Forces for? Of course, there are still missing—or there were until yesterday when Mr. Gorbachev and Chancellor Kohl seemed to have wrapped the whole thing up, come what may—a number of important pieces of the European jigsaw. Who will come out on top in the Soviet Union? What progress will be made on mutually balanced force reductions? Is a united Germany really going to be part of a recognisable NATO, despite what has been said? If so, what, if any, foreign forces will Germany need to, want to, or be allowed to, keep on its soil? What other security arrangements will eventually emerge, transforming NATO or putting something else in its place, which will guarantee frontiers and territorial integrity of interested states and stand the test of time, in contrast to the toothless treaty of Locarno which was supposed to do just that in the late 1920s and the 1930s?

Without answers to those questions it would be all too easy to take a wrong decision. On the other hand—here I agree with the noble Lord, Lord Williams—there are at least two facts which can be recognised without much argument. First, the Warsaw Pact on which the Soviet Union has had to depend for its communications and support for any early, and certainly any surprise, military action is now meaningless. Secondly, although the Soviet armed forces—are still immensely powerful and up to date—I am sure that we have not heard the last of them as a force to be reckoned with—they do not for the moment, because of the preoccupation with economic and political problems at home, pose a credible immediate threat across the Elbe. That should allow us, without any risk in the shorter term, to make some savings in numbers, and therefore costs, in our instant readiness forces on the Continent.

We can particularly get ourselves off the hook of forward defence on the inner-German border, which has always imposed an intolerable strain on our mobilisation measures. Then, whatever our interpretation of flexible response, mentioned again in the statement, it need no longer extend to battlefield nuclear weapons which have become an increasing anachronism and an embarrassment to our allies. In fact, the Germans will not have them. We can therefore safely follow the example of the United States and save money on their modernisation and replacement. In a unified Germany, with its capital presumably Berlin, it is difficult to see what the forces of four allied powers would do in that city, and Chancellor Kohl seems to agree. Therefore, there must be savings to be made there.

Since NATO must be looked on increasingly as a political and general security organisation, there must be some scope for the culling of the many allied and national headquarters whose only real justification is command in battle and which to some extent duplicate each other and overlap. All these possibilities, which will fundamentally affect the size of our forces, will first have to be discussed in some detail by what one might call the four and two, but, watching what is going on in Germany, perhaps one should call them the two and four and, watching what is going on in Moscow, perhaps one should say the one and one. If we are sensible, these measures should take place in the context of balanced reductions on both sides. It will take Mr. Gorbachev a very long time to honour all his promises.

What ever finally emerges will have to bring France more into Europe's collective security, maintain the United States' interest and involvement in Europe, though not necessarily in a dominant role, and assuage the legitimate fears of the Soviet Union who suffered so appallingly last time when Germany was strong and unified. The last thing that anyone should want is a vacuum, uncertainty or a Germany unlinked to any wider political or security responsibilities. For the time being NATO may provide better assurances on all these points for both West and East than anything else that has yet been devised. I have a suspicion that Mr. Gorbachev realises that too.

Therefore, savings will be made in central Europe although, with alternative accommodation to be provided in the United Kingdom in the event of redeployment, and perhaps redundancy payments to be made if the early disbandment of units is to be preferred, the financial dividends may not be as immediate as some may hope. Moreover, even when central Europe was perceived as the largest and most urgent threat, it was always the uncertainties and instabilities on the flanks of NATO and further afield that were more likely to require the deployment of military forces in some form of prophylactic, pre-emptive or even reactive way. These requirements have certainly not diminished. The substantial Soviet maritime strength on the northern flank, with 118 submarines alone, requires no assistance from the Warsaw Pact to turn a latent into an actual threat at short notice if things went wrong.

NATO's southern flank marches on the highly volatile Middle East which may explode at any moment and where, with our experience in Oman, Sinai, the Lebanon, the Red Sea and the Gulf, it is not too difficult to envisage scenarios in which Western forces might again be needed in some capacity to counter or balance a pervading threat. We would expect to find other forces in the area equipped with very modern and sophisticated weapons. This is not just a question of meddling in affairs which do not concern us or trying, above our station, to act as the world's policeman. History has shown that we get involved only because we perceive that our interests are very much affected and because the option of not doing so is, in the long term, likely to be more serious still. You do not have to be a best-seller writer to envisage tense situations developing in the Far East as 1997 approaches, calling for our forces (perhaps reinforced) to be deployed and on the alert. So potential savings in central Europe must be mitigated to some extent by even deeper concerns about the peripheral areas.

The Government's statement makes a shot at assessing what kind of forces we really need in this changing but still dangerous world. I generally agree with what is said in general terms. First, in contrast to the 1920s and 1930s, our forces need to be modern and up-to-date in thought, weapons and equipment. Once you lose that, it takes too long to recover. Perhaps that is what some official propagandist meant by "leaner and meaner" though "meaner" is a particularly unfortunate and inappropriate word. Orders for equipment may have to be slipped or reduced in numbers: belts and braces, certainly in communications, will have to be dispensed with. But there must remain a sufficiency of modern weaponry, ships, aircraft and formations, to keep alive and develop up-to-date techniques as well to meet any existing commitments that require a finite number of units if the commitment is not to reoccur too often.

Secondly, our forces need to be flexible and all-purpose in attitude and equipment. They need to be capable of providing, as Europeans, some contribution to any long-term or future Continental balance to which, however much we have tried to avoid it in the past, we have always been forced back. Equally, with the same forces, there is need to react on a European or even an Atlantic basis to any of the quite sophisticated threats which, with so much weaponry now on the international market, could in future affect the West from quite unusual directions.

It would be nice to see some of our specialist units earmarked—in association with both our European partners and with the Soviet Union—for worldwide disaster relief for which they are so well equipped and suited. Apart from the humanitarian aspect, it would be very good for the forces' training and morale. It would also help symbolically the binding process which is so necessary between NATO and the USSR.

Finally, and perhaps above all, the forces need to be those of which the country can be proud. That means trying, as the statement says, to maintain morale that only comes with full manning, confidence and self-respect. Good employer measures, particularly as regards pay and housing—both very disappointing of late, particularly the latter—will be more important than ever. The Army will be even more dependent on what is loosely described as the regimental system which is the envy of the world and which so many other countries wish they had. It proved itself yet again in the Falklands. The fierce pride that exists in closely knit units was a mainspring of loyalty and motivation. It produced the determination not to accept failure and contributed so much to winning a difficult campaign so far from home.

This esprit de corps, so valuable in battle, is perhaps even more necessary in peace to motivate and inspire at a time when the threat is less obvious, when public support is perhaps less enthusiastic and when so many other factors such as financial restraints may actually be working in the reverse direction. The regimental system need not be totally inflexible, nor need the subject periodically degenerate into bitter public rows as to whether this or that regiment should retain its identity. The system has been adjusted and modified many times since the Cardwell reforms of 1881, and even before that, without disastrous results. Indeed, even some of the most recently formed regiments have provided the strongest motivation and loyalty as well as the maximum effectiveness.

So when the time comes, as I believe that it is bound to, when we have to reduce a number of our armoured and infantry units, let us by all means use any palliatives to ease the problem by giving regiments training roles and linking regimental names to units of the cost-effective and indepensable Territorial Army. Essentially, let us try to design a system that will meet any future vagaries whether it be further contraction or, if the unexpected turns up, renewed expansion. There should be a widening of the scope of the system, always providing that what is left is still definable and has a natural ethos of its own and in terms of historical pedigree, regional loyalties or professional specialisation.

As the Army Board realised back in the 1960s but never had the courage of its convictions to pursue, I believe that what is required are larger groupings that are big enough to be viable, but small enough to have a name that means something. If necessary, older, smaller regiments can submerge themselves in those larger groupings, bringing with them deeds, traditions and distinctions for the greater collective glory of the new whole. In that way you will not be so much losing regiments which will have passed the torch, but gaining new ones with their roots in the past but their sights on the future.

It will not be easy but it can be done. It will need courage. Once it has happened, everyone, particularly the young who are serving, will concentrate on the new identity and many of them will not even notice the change that has taken place. The future is bound to be a period of change and challenge in the Armed Forces. I hope that those inside them will face up to that period positively and constructively. I hope that they will realise that there are also opportunities for modernisation and greater flexibility as well as the inevitable disappointments and frustrations. I hope that those outside the services will show understanding, recognising the human problems involved and appreciating the part that the Armed Forces play in peace time in the employment and training of young people and in the economic life of the country. I hope that it will be realised that, with the mistakes of the 1920s in mind, there will be achieved a proper, secure and lasting structure for the future defence of the realm which, in the longer term, is more important than trying to reap a quick, perhaps politically convenient financial bonus, which in any case may be fairly illusory.

5.20 p.m.

Lord Inglewood

My Lords, I continue to be surprised that in the euphoria surrounding the developments in Eastern Europe since November last year sufficient recognition has sometimes not been given to the fact that it is we who have won the Cold War. For my entire life Europe has been divided by an Iron Curtain across which ideologies confronted each other, supported with arms. On our side in the West, our citizens supported the military; while on the other side, those armed forces doubled up to suppress the citizens of Eastern Europe.

Let us not forget that it was the military who preserved our liberties and will no doubt continue to do so in different ways in the future. But they did not win that war. For it was the way in which our economy and political institutions performed which rendered our opponents' military postures finally unsustainable. We now see our erstwhile European adversaries wishing to emulate our economic and political systems. In my view it is essential to the long-term peace and stability that they succeed in doing so.

The condition of the Eastern European economies is unfortunately measured in differing degrees of badness. It is of paramount importance that we do not let the pendulum swing back so that hunger and economic anarchy turn the people of those countries away From the democracy which they currently espouse. Both financial and technical aid, whether provided at a national level or at a collective level through the European Community, are in their own way just as important as direct military expenditure to our future security.

It seems to me that the history of post-war Europe shows the need to underpin these economic and political changes with forms of political guarantee. That is why it is so important for East Germany to become a member of NATO, which is itself evolving, and in due course for some of the other newly free Eastern European democracies to do so if they and us both want it. At present no other satisfactory institutional framework is available to provide this stability.

I also believe that this is well appreciated in the East. In the middle of March I was privileged to spend a couple of days campaigning for Chancellor Kohl's Alliance for Germany. On one occasion I recall speaking for Gunther Krause, one of the successful CDU candidates. Our meeting was held on the steps of the Rathaus at Pasewalk, which is about 30 miles west of Stettin. I remember looking out into the acrid, lignite-smoke filled night at an audience of 300 to 400 people—probably one of the first political meetings held there for about 50 years. The comment that received the most enthusiastic reception from the audience was my hope that East Germany would become part of NATO. They will have been aware more than most people of the overriding reality that freedom must be combined with the commitment to protect it even with force if that becomes necessary.

5.23 p.m.

Lord Pym

My Lords, it is a great honour for me to speak after the noble Lord, Lord Inglewood, and to congratulate him on his maiden speech. It was very authoritative, well informed and attractively made. I am sure that every noble Lord looks forward to hearing him again. He is a man of wide experience and will be able to contribute to our debates on a whole range of issues. We look forward to that very much.

I am glad to say that I find myself very much in sympathy with what he was saying. The revolutions in central and Eastern Europe make it possible at last to remake Europe once again. We have waited a long time for this opportunity, which historically is a very rare occurrence. Obviously, we want to make the very most of it. If we are to do that we must comprehend the nature and scale of the problems that must now be faced. They are political, economic and military, and they must all be thought about together because they inter-relate.

This debate on the Defence Estimates is of course concerned with the military aspect, but the military aspect has no meaning except in the context of the political and economic scene. The change we have seen in the past year is so dramatic that previous thinking on this subject is no longer relevant. What has been needed during the past year or so, and still is, is a new language for NATO, taking account of the revolutions and the end of the Warsaw Pact. The phrase "We must retain NATO" is confusing to people unless there is explanation of what it means. The Cold War is over, so the purpose of NATO, as understood by the electorates of all our countries, no longer exists. So what do we want it for? The answer is three-fold.

First, its role has always been and remains to deter war, and the need for that is not diminished in any way. The aim now is to build a permanent peace in Europe and to build a new system of collective security appropriate to the new circumstances. NATO is an obvious starting point and foundation for that. Secondly, the Soviet Union is still a very formidable military power with large conventional forces, sophisticated weapons and highly developed nuclear weapons. It would be extraordinarily foolish to turn a blind eye to that, even though the Soviet Union is bankrupt economically, while we are negotiating a whole range of disarmament agreements. However hopeful we may be about those agreements, they have not happened yet. Thirdly, it is a practical way—perhaps the only way—of keeping the Americans involved in Europe.

The language about NATO must describe and explain these new objectives which clearly call for caution in making changes in our defence capability. Indeed, we must see what progress is made year by year and respond accordingly. I find the phrase "peace dividend" a typical populist cliché which glosses over the deep uncertainties and complexities of the present situation and implies that the problems are over. The problems have become entirely different and much less horrendous than those we have been dealing with for 40 years, but they still have to be surmounted before a permanent peace can be declared.

The problems that have to be faced include the sheer difficulty of building a democratic system in countries that have little or no experience of it. Democracy is a simple concept, particularly to us, but it is complicated in practice until everyone is used to it. It takes a long time to get it firmly established. Then there is the poverty of the economies of central and Eastern Europe, which my noble friend Lord Inglewood mentioned, and the enormous debts with which they are burdened. It is impossible to transform those economies quickly, except in the case of East Germany where the West Germans will be of enormous assistance to them.

People in the other countries will expect things to get better quickly; but they will not get better quickly, which may lead to disappointment and even to some disillusionment. That carries security implications. I do not think that I would describe the unification of Germany as a problem although there are anxieties about it. It has always been inevitable and in my view it is actually desirable. The economic needs of central and Eastern Europe are so great that the rest of us must maximise our economies so that we are able to provide the help which they so desperately need.

What does matter is the European context into which a unified Germany fits. There it is crucially important for us to see that a proper balance is achieved between this one very powerful country and the rest. That means three things; first, a stronger degree of co-operation and unity between Britain and France as a deliberate act of strategy; secondly, a greater degree of cohesion in Western Europe, leading in time to such cohesion applying throughout the whole of Europe; and thirdly, retaining the strategic commitment of the United States in Europe for which NATO seems to be the ideal vehicle. We know that we are not capable of maintaining the balance of power in Europe without the United States. The Soviet Union will want guarantees of peace. However, they are not likely to accept such undertakings from the Germans—only the Americans can do that. I believe this to be true, even if the Germans provide the Soviet Union with a package of economic aid.

The final problem I should like to mention is the uncertainty of what will happen in the Soviet Union. No one knows what will happen. Will the reform programme continue reasonably peacefully or will there be disruption, or even disintegration or conflict? We shall have to wait and see. However, of one thing I am sure: it will remain a major military power for the foreseeable future, and that must be taken into account by all of us.

All those problems and others, for which there is no time available for me to mention, relate to the needs of security in Europe and our requirements. However, faced with that situation, and looking at it broadly, what should our response be? First, in principle, I think that we should understand and accept the urgency of the needs of the countries of central and Eastern Europe, especially their economic needs. We must then take whatever action is practical to help them in the short and in the long term. But I believe that we should also combine that with the understanding that, in the sweep of history, we are dealing with a huge strategic change which encompasses not only the balance of world power and of European power, but which also encompasses the daily lives of millions of people whose emotions are inextricably bound up with whatever happens and who are trying to create new forms of democracy and new institutions starting from scratch. Therefore, patience is also a vital necessity. There is an urgency for help and a need for patience which requires strong leadership and a sense of confidence. Fortunately, we in this country, and those in Western Europe as a whole, have those qualities to a strong degree.

On that basis we should respond in three ways. Politically—I shall not dwell long on this aspect of the matter—the ultimate objective is a Europe of free democratic and independent countries working together for the benefit of all. The first stage is to formulate the peace treaty which should have happened in 1945, but did not. As we know, that is already well underway leading to the CSCE meeting later this year. I regard that meeting as being of critical importance, both for the immediate and the long-term future. I hope that the 35 nations will set themselves a severe programme of work with regular meetings; that they will monitor together the progress of events on a continuing process; and that they will work towards a form of pan-European structure, even perhaps contemplating linking the Community in some way to NATO.

This group of nations is ideally suited to carry forward the astonishing political achievements of the past year. Our response on the economic side must be as comprehensive as possible to the countries of central and Eastern Europe. I think that the Soviet Union is a different case and I agree with the line taken at the Texas summit by our own Prime Minister and by the United States and Japan. However, what these other countries need—as does the Soviet Union—is technology, managerial skills, investment and trade. Everything the West can do in terms of entrepreneurial activity should have top priority. The private sector has a major contribution to make, but governments and international institutions must all be involved. Although all this was discussed at that summit, I must say that for my part I wish I could feel that more importance and more urgency was being given to the matter.

The third element of our response with our allies is the provision of a new security system for all European countries. Such a system will inevitably take time to establish and, in the meantime, uncertainty will remain. The threat of war, with which we have lived for so long, has disappeared for the moment; but we cannot tell how events will unfold in the future. Therefore, the present period is one of transition from the virtual certainties of the Cold War to an unknown future. In that situation, the right course is to reassess the changing and changed strategic scene, which the Government are doing, and ascertain what the new changes might be; to retain our collective strength at a somewhat lower level than before, reflecting the reduced threat; and to decide the precise level of our forces for the next three years or so, by which time the future may be clearer. I must say that in my view the noble and gallant Lord, Lord Bramall, gave a brilliant description of the requirements for our forces in this situation.

The decision about our forces must be taken on defence grounds and not be driven by the entirely different needs of the Treasury whose natural and proper obsession with money can sometimes force wrong defence decisions to be made. Indeed, the noble and gallant Lord, Lord Bramall, pointed out that that happened between the wars, and I believe that there have been some instances of it since that time.

There is an urgency for this decision because uncertainty in the forces creates a morale problem. Many regiments and units are wondering whether they will be needed—and nothing can be worse for morale than such a situation. Therefore, I hope that my noble friend on the Front Bench, his colleagues, the Ministers in the defence department, and the chiefs of staff are now approaching agreed decisions on the size of our forces which they can announce very soon.

After 40 years of NATO and the policy of containment, at last we have the prize of this hard-won opportunity to build a permanent peace in Europe. The prospects look favourable. However, it will take all our ingenuity, imagination and patience to achieve it. Nevertheless, we shall not let the future down.

5.36 p.m.

Lord Hatch of Lusby

My Lords, the debate has been a mixture of the depressing and the hopeful. It has been depressing as regards those noble Lords who spoke in voices of the past—of course we were brought up to believe in the essential element of the military arm of the country—and hopeful as regards those who have seen that on the horizon we are faced with possibly the greatest watershed in human history, if we take advantage of it. Whether we do so depends to a considerable extent upon our attitude towards what is commonly called defence but what I prefer to call the military.

As my noble friend Lord Williams vividly portrayed in his opening speech, there is here a tremendous glittering opportunity for a new kind of world. It will not happen automatically; it will happen only through effort and imagination. However, the opportunity is there. The first part of the opportunity is surely that we no longer have an enemy in the world.

So far as concerns this country, we cannot say that any other country today is our enemy. If that is so, perhaps I may use—I hope that this does not include an unparliamentary expression; but in any event it is not mine—a quotation from John Le Carré's most recent book entitled The Russia House in which the American interrogating has this to say: How do you peddle the arms race when the only asshole you have to race against is yourself?". That seems to be relevant to today.

However, there is another side to the situation. It is not just negatively that we have no enemy; there is now the opportunity for a positive peace. Peace is not merely the absence of war. Was the 40 years of peace that is frequently talked about on the other side of the House, and which was referred to by the noble Lord, Lord Pym, a peace? It may have seemed so from this country's comfortable armchairs; but it did not seem so in Suez, the Falklands, Korea, Vietnam, Afghanistan, Czechoslovakia, Nicaragua, Rhodesia, Namibia, Mozambique, Angola, the Middle East or South Africa. That was not a peace which was developed as a result of our experiences in the Second World War. It was not a peace created by that imaginative organisation which followed the Second World War, the United Nations.

Today there is at least an opportunity of a positive peace for those of us who are prepared to see the vision without fear. There are two obstacles to our achievement of that form of positive peace. The first was mentioned by my noble friend Lord Williams. I should like to emphasise the point, and I hope that the Minister will answer it when he replies. There are the arms manufacturing industries. They used to be called the merchants of death. Governments—not just ours—have supported them. There is an organisation known as the Defence Export Services Organisation which encourages the export of arms from this country. Those industries will inevitably resist the change from the climate of war to the climate of peace.

Secondly, there is what I spoke about in our debate of 16th May—the inevitable war defence psychosis with which we have all been brought up and by which we have all been affected, not just in this century but from the beginning of civilisation. It is difficult to get rid of that psychosis. There are signs today of more people ridding themselves of such a psychosis than ever before.

I challenge the noble Lord, Lord Pym. It is not NATO's victory which has produced the upheavals in Eastern Europe; it has been the people of Eastern Europe themselves who have overthrown the tyranny under which they lived, and who have overthrown it not to return to the assumption that life can be lived on our planet only on the basis of national confrontation and preparation for war. If anything has struck the minds of people of this generation it is that war today is suicide.

I was also disappointed by the reference of the noble Lord, Lord Pym, to the so-called peace dividend. That is the kernel of the opportunity that we have to build a positive peace. To give one example: if this country were to reduce its military expenditure to the average of that of other members of the European Community—say, from 5 per cent. of GDP to 3 per cent.—£8 billion would be released annually to be used for constructive purposes.

When considering the Defence Estimates and the future of this country's defence industry, we should be concentrating upon a defensive rather than an aggressive posture. We should forget the claims that we are still a global power. We are not. I agree with the Minister and fully endorse what he said in his opening speech about the valuable use to which British forces have been put in Namibia and other parts of southern Africa where they have been helping to train for the future. But that must be done through the United Nations. If we try to play a global part, and try to recreate the concept of imperial greatness, we shall not merely be destroying our opportunity but we shall be creating great dangers abroad.

Of course if we cut military forces and expenditure it will be necessary, as my noble friend Lord Williams correctly emphasised, to retrain and redeploy to avoid unemployment resulting from a reduction in arms manufacture and military personnel. That is essential. It should be planned now. We should know now what the Government are doing to transform trained military personnel so that they use their training for civilian purposes, and to transform the machines which are now machines for the production of destruction into machines which can help to provide for the needs of mankind.

Surely in today's world we cannot turn our backs upon the opportunity to use those resources constructively. Over the past two years we have debated for many hours in the House the needs of the environment and the threat that the destruction of the environment will lead to the destruction of the human race. Time after time we are told that the money is not available. Even the Americans say that they do not have the money, and that the burden is too large to help people in the developing countries to avoid destroying the environment in the way that the industrialised countries have done.

It is a positive contribution to peace to divert a large percentage of military expenditure to rectify the destruction of the environment that we have already begun. I wonder how many noble Lords have this week read the world development report of the World Bank. It is obscene that we in this country can talk complacently about where we shall find our new car, what new house we should look for, or say, as has so often been said, "Yes, I realise all that, but I have to look after my family. Charity begins at home".

The World Bank report this week tells us that over 1 billion people in the developing countries live on less than 60p. a day. Tens of millions of children die from treatable diseases including starvation. We know that the free health and medical facilities which many of the former colonial countries developed are now being destroyed simply through lack of resources. Unemployment is growing at a massive rate. Here are the crying needs for a positive peace for mankind, not just the privileged èlite of Europe.

The World Bank report states that 300 million people could be pulled out of poverty during this decade if policies were followed which would enable them to develop their own resources. But the interest on capital which comes to the West from the developing countries is greater than the totality of the loans and aid that we send to them.

What has happened to our profession when about 20 years ago we said that we would devote 0.7 per cent. of our GDP to help developing countries? There was supposed to be an economic boom in the second half of the 1980s. What happened to our help to people who are dying? Now we have the added competition of the needs of the people of Eastern Europe. Here is where the peace dividend can not only save lives through charity; it can also help to build a genuinely peaceful world. This is the opportunity which is open to us now if we will be positive. However it will not recur if it is rejected by the destructive and anachronistic mentality of those who think only in terms of national confrontation, military expenditure and arms manufacture.

5.52 p.m.

Lord Holderness

My Lords, I hope that I am not too late to add my congratulations to the two maiden speakers to whom we have had the pleasure of listening this afternoon. I was particularly glad to hear the speech of my noble friend Lord Inglewood. Although it makes me feel even more ancient than usual, it reminded me of the close working relationship which I used to enjoy with his father. I hope that we shall hear more from him and at greater length. I was just enjoying his speech when he sat down.

I made a speech at the beginning of this Session expressing the hope which has been echoed by a number of noble Lords this afternoon. It was that the then recent startling changes in Eastern Europe would before long make possible some lightening of the burden of expenditure on armaments. I suggested that such a relief and reward had been richly earned by the vigilance of the NATO nations over the past 40 years. In my mind such a hope today remains undiminished. The recent accord among those nations strongly reinforces it.

However, the simultaneous realism of the alliance is a necessary discouragement of hasty conclusions or an unseemly rush to dismantle Western defences. As my noble friend Lord Inglewood said, I have always claimed that those defences were largely responsible for the dramatically changed world of the 1990s. We have just heard a speech from the noble Lord, Lord Hatch. From time to time he and I have found our views diverging but today I was encouraged by his view of the positive peace. I suggest to him that in order to achieve the positive peace, a vigorous collective effort among all nations is still necessary in the future. Many will suggest that we should lower our guard, but I pray that those counsels will not prevail.

I was encouraged by the words not only of my noble friend Lord Arran but also of the noble Lord, Lord Williams, who said in different words that a grave threat has been lessened but vast uncertainties remain. I distrust the judgment of any who confidently predict the world's immediate conversion to lasting peace and unshakeable stability in the closing years of this century. However great the change in the position of NATO, this defensive alliance still provides the best guarantee of the world's peace and collective security. Whatever the changes, NATO must continue to possess military strength. Without it the alliance would add nothing to the desire and hope for a greater security.

I have rarely taken part in debates on defence particularly in your Lordships' House because of the manifestly superior knowledge and greater military wisdom of many noble Lords. Today, marching close behind one field marshal and directly in front of another, my courage is even more shaken. It is only relieved by the fact that the field marshal behind is used to marching rather more closely than the field marshal in front.

My only excuse is that for many years I have enjoyed a close connection with and developed a vast admiration for the voluntary forces, especially the Territorial Army. It was a particularly laid back volunteer who produced the little song that some of us have sung at annual camps: I'm only a weekend soldier, I'm always home in time for tea". Not only is it wildly inaccurate but it is a poor reflection of the desire of thousands of these volunteers to play an even more important part than they have in the past. I would like to be sure that the enthusiasm on their part is matched by the enthusiasm of Her Majesty's Government to make the fullest possible use of them.

The first volume of the White Paper states that the voluntary reserves provide a major part of the defence capability of the United Kingdom. It goes on to emphasise the immense contribution of the Territorial Army. However the opportunity of that army to reach its full potential must remain in doubt without continued and energetic efforts by the Government to lessen the familiar obstacles to its maintenance and growth, to say nothing of what I would call the social contribution made by volunteers in this way. As I am sure my noble friend agrees, it remains very much in the Government's interests to do so because of the superb value for money that the volunteers offer.

Her Majesty's Government can rightly claim credit for seizing the opportunity in the 1980s of increasing the size of the Territorial Army. Indeed, 41 infantry battalions are no mean contribution to the Army's strength; that is over one-third for a relatively tiny cost. Those who now think that the possible or probable reduction in the size of the Regular Army will lead naturally to an increase in the size of the Territorial Army seem likely to be disappointed.

Even now the Territorial Army is unable to recruit to its present establishment. If recruiting is not easy, retention remains as difficult as it ever was. The Territorial Army is subject to a constant drain of staff. We know that such a drain is experienced by all kinds of voluntary organisations. There seems therefore little point in commanding officers expending a vast amount of time and effort in search of a recruiting figure that is much higher than recent experience suggests is the level that the system will find. I should have thought it was realistic and reasonably optimistic to continue to aim for a percentage figure of between 70 to 80 per cent. of the present establishment.

My next point hardly needs to be said. I am sure that my noble friend Lord Ridley will emphasise it, if no one else does. Employers are of vast importance in this connection. Mr. Tommy Macpherson and his committee have done splendid work in everyone's opinion in persuading employers of the importance of releasing volunteers. I hope he will be allowed to continue his work when his liaison committee reaches the end of its present term in 1993. However necessary, sacrifices are significant, and in many cases grievous for employers, especially small employers. We have often talked of incentives. I hope that Her Majesty's Government, either tonight or one day, can give us hope of a tax bonus or other inducement which would be a real reward for public spirited employers.

In the meantime, I find that the volunteers remain cheerful. If they ever looked downhearted I should begin to be really worried. The camps abroad to which the volunteers go from time to time are important both for recruiting and for morale. I hope that my noble friend will be able to tell us that some attractive alternative can be found if some of those camps have to be dispensed with.

My noble and gallant friend Lord Bramall—I hope that I may dare to call him that—touched on the subject of a moratorium. Short-term savings on really insignificant repairs may be necessary, but they are terribly difficult for ordinary soldiers to understand, particularly when a minor breakdown puts a soldier's vehicle off the road at an important time. But the main issue, which I am afraid will remain for some time, is uncertainty. I suspect that there is speculation in every mess throughout the country, whether it is an officers' mess, a sergeants' mess or a corporals' mess. There will be speculation about numbers, and doubts will be expressed about the future of the regimental system. However, above all, there will be a clouding of that clear vision which first called those volunteers into the drill halls.

Ever since the Second World War volunteers have thought that they could discern an enemy by lifting up their eyes and looking beyond the Harz mountains. We are not asking Her Majesty's Government tonight to produce a new enemy, or even to reply to all these uncertainties. But if they have not already begun to do so, we ask them to think clearly about the definition of a new role for the volunteers. We ask the Government to give a reason for the future existence of the volunteers which will continue to bring them into the drill halls and will keep them in the drill halls when they arrive there.

6.4 p.m.

Lord Carver

My Lords, I, too, wish to add my congratulations to the maiden speakers. Throughout her career the noble Baroness has made enormous contributions to the security of this country. It is valuable to receive her advice here. I have personal reasons for wishing to congratulate the noble Lord, Lord Inglewood. His father was not only a relative of mine by marriage, but also a war-time comrade and a personal friend over many years. He was always a valuable source of information to me on the Territorial Army. He was also much respected in this House, particularly on anything to do with internal security and the police. In the noble Lord, Lord Inglewood, we have a Member of the European Parliament. I can think of nothing more valuable to the House than to have someone who travels from either Strasbourg or Brussels to contribute to our debates.

I endorse almost everything that my noble and gallant friend Lord Bramall has said. I do not propose to cover the same ground myself. I strongly endorse his remarks on the way in which it is perfectly possible, in forming larger groupings, to preserve all the spirit and the traditions of the past while making the organisation concerned more viable for the future and therefore better for the present. The regiment of the noble and gallant Lord, the Royal Green Jackets, and the Light Division of which it forms part, are a shining example of that. However, I do not propose to discuss any part of the defence White Paper other than the sections on pages 17 and 18 entitled Defence and Security in a Changing World. All the rest has been overtaken by events, and indeed is being overtaken by the study of the Ministry of Defence entitled Options for Change.

Incidentally, I was disappointed to learn from the noble Earl, in answer to a question of mine the other day, that that study was an entirely in-house study within the Ministry of Defence. When, as Chief of the Defence Staff, I was involved in the 1974 defence review under the guidance of the then Defence Secretary, the noble Lord, Lord Mason of Barnsley, the body which conducted that review, all the way up to the Defence and Overseas Policy Committee of the Cabinet, was an interdepartmental one. It involved the Cabinet Office, the Foreign Office and the Treasury as well as the Ministry of Defence. That had the great advantage that many of the arguments and differences were resolved before they reached ministerial level. That reduced the danger that, after all the work involved, the result would be a head on clash between Secretaries of State in the Cabinet. That procedure had in fact been established by the preceding Conservative Administration under Mr. Heath when his Defence Secretary, the noble Lord, Lord Carrington, had been at loggerheads over defence expenditure with the Chancellor of the Exchequer, who is now the noble Lord, Lord Barber.

The future structure of our Armed Forces must depend to a large degree on what may evolve as the future security structure for Europe. That will depend on its political structure and development. That must be very uncertain until we can see far more clearly than we can today how things are going to develop within the Soviet Union. The noble Lord, Lord Williams of Elvel, should be careful as regards believing that the economic situation of the Soviet Union means that it could not wage war. I remind the noble Lord that a gentleman called Norman Angell wrote a book before the First World War in which he asserted that the economic situation made a long war impossible.

It is right therefore in that uncertainty for NATO and the Government to be cautious at this stage and to rely on existing structures and institutions. As I see it, those existing structures and institutions are primarily the European Community in the political and economic field and NATO in the military field. It is through those bodies, under the light shade of the umbrella of the Conference on Security and Co-operation in Europe, that the immediate problems must be handled, especially those arising out of the unification of Germany. At this stage it would be imprudent to make major changes in the structure of our own Armed Forces. Risks can be taken and economies made by cancellation or deferment of major equipment production programmes, and by accepting a degree of undermanning if recruiting lags. In the near future a radical reorganisation should be avoided.

However, we must look further ahead and begin to develop plans on the assumption that events in Europe will develop in such a way that the threat which NATO was established to meet will disappear; that is, the threat of the Soviet Union attempting to establish domination over Germany, and Western Europe generally, by force.

On that assumption what sort of security organisation should we need? In my view, nothing like NATO; not an integrated military structure providing a command organisation from the north of Norway to the Caucasus, dominated by the Americans, developing operational plans involving the use of nuclear weapons to counter a massive Soviet attack on Western Europe and the North Atlantic. So long as that threat existed we needed such an organisation, and it was right that we should accept American domination. However, in the longer term and the more optimistic scenario that I have posited, I suggest that that is neither appropriate nor acceptable. The recent NATO summit communiqué itself stated: As Europe changes, we must profoundly alter the way we think about defence". It is ironic that the first paragraph of that communiqué stated: Europeans are determining their own destiny", Yet it was clear that the initiative came overwhelmingly from the United States, in some collusion, perhaps, with Germany. I suggest that in the longer term we must escape from a situation in which the security needs of Europe are determined bilaterally between the United States and the Soviet Union.

What will those needs be? Reassurance and security against three potential threats. First, deriving from its sheer size and geographical position, the potential threat to its neighbours from the Soviet Union—or, if that breaks up, from the Ukraine, Byelorussia and Russia; secondly, the fear of a resurgence of German ambitions that all German-speaking peoples in Europe should be under one sovereignty; thirdly, and perhaps the most difficult to deal with, revival of all the ancient historical animosities that have plagued Europe down the centuries, the signs of so many of which are already evident today.

What form should a security organisation to meet those threats take? Where will it stand in the scale between, at one extreme, NATO today—designed to fight a war on a huge scale, with or without nuclear weapons, against an enemy with vast military resources—and, at the other extreme, something like a United Nations peace-keeping force? The answer will possibly be somewhere in between; perhaps national forces, depending primarily on reserves, like the Swiss, the Swedes and the Finns, contributing also to a standing European peace-keeping fire brigade, acting under the umbrella of a strengthened CSCE. If that were the pattern, should the USA and the Soviet Union contribute to such a European security fire brigade force? I suggest not, but that they should have a treaty relationship with it which would govern the circumstances in which either could maintain facilities for the deployment of their forces into Europe, west of the Soviet Union, at the request of any member of the European security organisation.

If something like that is what we should aim for, how should we approach it? Should we approach it in one step, from NATO and the Warsaw Pact as some people suggest, or in stages? I am inclined to favour the latter. One of the first priorities, which nobody has mentioned, is to involve the French armed forces directly. The French will never join a military structure dominated by the Americans, as NATO is with its two American supreme commanders.

I suggest that the first step would be to try to arrange a marriage between that almost defunct old gentleman, the Western European Union, which after all preceded NATO, and the European Community which cannot sensibly in my opinion handle European political and economic affairs without taking into account security matters. As the European Economic Community develops its relations with the countries of Eastern and Central Europe it could also help to develop the future European security organisation under the umbrella of the CSCE. I know that I shall be told that there would be great political difficulties in that, but they would not be as great as those met and overcome in setting up the EC itself.

As that is done, if it is done, the standing forces of European NATO countries based in Western Europe could be transformed into truly European armed forces, national units being at a much lower level than any international corps at present being discussed. I hope that eventually those would form the European security fire brigade force of which I spoke, and that the North Atlantic alliance would by then have been transformed into the treaty relationship between the European security organisation and the United States and Canada, while the Warsaw Pact would have been transformed into a treaty relationship with the Soviet Union or its successors.

One of the principal political risks in that is that the United States might abandon its interest in supporting the security of Europe and that an organisation dominated by the United States would be replaced by one dominated by Germany. It follows from what I have said that I do not favour NATO being given a greater political role, because I believe that that would be a move in the wrong direction. The White Paper itself, on page 17, states that: Defence arrangements therefore cannot sensibly be made the leading agent of political change, the instrument through which Western nations express their best hopes and happiest aspirations". If, and it is a very big "if", political developments in the Soviet Union make it appropriate to move in the direction I have indicated, the effect on our own forces would be radical. In previous ages when we withdrew our Army from the Continent it returned to its traditional role of defending the Empire. Apart from the Falklands and, for a few years, Hong Kong, that role will no longer exist. A major reduction in the size of the Regular Army and a greater reliance on reserves seems to be inevitable. I fully endorse the point of the noble Lord, Lord Holderness, about the problem of creating and maintaining those reserves if they are to be on a voluntary basis.

The effect on the Navy would not perhaps be so radical, but we should treat with caution attempts to justify major expeditionary forces by the idea that we need to defend our interests all over the world by military action. We must also bear in mind that the pattern of our sea-borne trade has changed fundamentally since 1945. The great majority of both exports and imports cross the Channel or the North Sea and not the great oceans—I believe that the figure is about 75 per cent.

The effect on the Royal Air Force is less easy to judge. Much depends on what kind of security force is developed for Europe and what kind of air threat to this country is envisaged. For various reasons, partly technical, which I have explained previously, I have come round to the view that the Navy should reassume responsibility for all air operations in maritime warfare. If it was to do so, and if the regular forces of the Army and the rest of the Royal Air Force were to be significantly reduced in numbers, I doubt whether it would be either economic or efficient to retain them as two separate services with all the overheads and complications in command that that involves. I believe that a proper, objective study of that should be carried out.

I sympathise keenly with the Government in the dilemma with which they are faced. Men and women in the Armed Forces, as well as those who supply them with equipment, would like to know their future as certainly and as soon as possible. However, given the uncertainties that I have discussed, the Government would be wrong to commit themselves now to a radical future organisation based on the assumption that events would develop in the way we all hope. The danger is that, in the search for a peace dividend with which to buy themselves out of both their economic difficulties and the pit they have dug for themselves with the poll tax, they will make ad hoc reductions to the existing structure. That would result in the forces being inefficient, unsatisfactory to serve in and subject to constant uncertainty about further changes—in other words, they would suffer from planning blight. That could deal a fatal blow to the Armed Forces of which the nation is rightly so proud.

My advice is that the Government should plan for a radical, long-term structure on the basis of the type of suggestions that I have made, designing a series of intermediate steps at which progress towards that structure could be halted if events did not develop in the way we had hoped and if we found that we needed to preserve the capability to fight a classic type of major campaign.

Nuclear weapons, apart from their value as an existential threat to anyone attempting to engage in such a war, are, in my opinion, largely irrelevant to the issue. Negotiations to reduce their numbers and types to those required only to provide that threat should as far as possible be conducted separately. I wholeheartedly support the statement in the NATO summit communiqué: We seek the lowest and most stable level of nuclear forces needed to secure the prevention of war". I also endorse the final sentence of the section of the defence White Paper which I have been discussing. It states: Provided that we do not rush or slip, but prepare the road wisely, we may during the coming decade and beyond find ourselves able to move forward a very long way". If one is to move forward, one has to know which way to go. I have tried to suggest the direction in which that move might be made.

Viscount Ridley

My Lords, there is common agreement that we face the most fundamental upheaval in the structure of our forces probably since 1919. I am sure that all those involved, many of whose careers must now look rather bleak, are ready to be told what the future holds for them. But the greatest need must be to get the answers right; to take decisive decisions and make them work as well as possible.

Everyone realises the immense problems facing the Government, but I hope that we shall soon see some indication of what they require so that everyone can work constructively to that end. Prolonged uncertainty is very damaging and as much consultation as possible will be helpful.

In this context I wish to speak tonight, not for the first time, about the reserve forces. Their future place in the order of battle is bound to be very important, particularly in view of their relatively cheap cost; for example, out of the 1988–89 defence budget of £19 billion, the Territorial Army costs some £400 million, which is just under 3 per cent. of the total; yet it forms 40 per cent. of the Army at this time. To put it another way, a Territorial Army soldier costs about one-ninth of his Regular Army equivalent.

There is then an obvious danger; namely, that we shall rely too much on part-time forces. But a look at page 28, Volume 2, of the Estimates will show that the figure of about 90,000 volunteers for all the services which we have at the moment seems to be the ceiling beyond which we are unable to go. Even that figure may be too ambitious and we may well fall back in numbers quite quickly with the disappearance of the perceived threat from the Warsaw Pact. I believe that just as damaging is the recent cut of £5 million in the recruiting budget. It is already being reflected in the figures and will, I think, be counter-productive. I hope that the Government, at least until they know the future, will try to restore the cut and keep the momentum.

Another great change, I am sure, will be that the wartime role of a large part of the Territorial Army will be drastically changed and its part in the British Army of the Rhine will disappear. It is not something that everyone will regret. There was always a faint unreality in the assumption that they could get there in time in modern warfare, even if they did it so very well indeed in 1914 and 1939. Things have changed. The abandonment of this policy must in itself save a lot of money and effort, but we have to decide what to put in its place.

The volunteers of all the four services—in which I include the Marines—may well be able to reassume their original historic role of the militia which has gone on for hundreds of years in this country; that is to say, to be mobilised in times of national emergency, to provide a military presence when the Regular Army cannot do so, but not be expected to be fully trained for immediate warfare. They need to defend our shores against anything, provide guards of honour for visiting dignitaries and—dare I hope?—entertain the Lord Lieutenant to dinner from time to time. If that is to be done, perhaps we may be able to remake the historic links between our cities, counties and regiments which have been such a feature of our history. As the noble and gallant Lord, Lord Bramall, spoke at length and eloquently on the subject, I shall say no more than that I thoroughly endorse his remarks. There is a further possibility that some regimental names may face the chop. A battalion in the future may consist of one company of regular soldiers, one of reservists and one of the Territorial Army, perhaps not even wearing the same cap badge. Let us hope that where possible local sentiment will be consulted before any decision is taken.

A further possibility which I believe should be explored vigorously is the greater use of volunteers in our planning for emergencies in the future. Lockerbie springs to mind. Volunteers will be far more widespread throughout the country than the Army is now or ever will be; they know their home ground very well and can provide much skilled and disciplined manpower quickly. They have facilities for such things as catering, bedding, clothing, medical, transport and good wireless communication. They are quickly and relatively cheaply available. They could save lives and help the local services considerably. An example of that was the magnificent work done by the Third Battalion volunteers of the Royal Welch Fusiliers who did so well at the floods in Towyn earlier this year, in a situation in which, I understand, apart from one general and his staff there was no Regular Army at all in the whole of the Principality. This would give them a sense of purpose and mission which could help justify their sacrifice of weekends and evenings now that the terrorist and greenhouse effects can be seen to be a greater threat than the Red Army. Of course there will be problems of releasing men in employment for emergency work, and we must be careful not to invoke any more Peterloo situations.

There will also be a cost, and legislation may well be needed. Volunteers need to be built into the emergency planning process. I hope that the Government will seriously consider these suggestions when they come to look at the review. I remind noble Lords that in the United States, when Hurricane Hugo hit the Carolinas, no fewer than 4,000 national guardsmen were mobilised that night and played a very big part in saving lives the next day. It is a classic case of not beating a sword into a ploughshare but using a sword as a ploughshare. I hope that the national employers' liaison committee—about which the noble Lord, Lord Holderness, spoke so eloquently—can continue. It is bearing fruit and it would be a tragedy if it were to stop. It helps to save turnover and so may be very cost effective. As the noble Lord spoke so well on this subject, I shall say no more about it.

I should like to say a little about the cadet forces. I do not think that they have ever been mentioned in a debate on defence. Certainly they are seldom mentioned at all in the Defence Estimates. In a sense, they could regard themselves as at the bottom of the heap. Nonetheless they are the seed corn of our nation. They are run now by the Navy, the Marines, the Army and the Air Force. At the moment about 140,000 young people in the 14 to 18-year age bracket belong voluntarily to them. Their aim is by no means purely military, though many boys and some girls later join the forces. It seeks to provide some kind of a challenge and to promote good citizenship, often in the least attractive inner cities. The cadets have a fine record. Those dedicated people who look after them, very often in draughty and chilly wooden huts, make a significant contribution to combating juvenile problems. I hope that they can be fully supported. Any cuts in the very small cost of those cadet forces would destroy a fragile animal. Perhaps I may urge that they be exempt, if at all possible, in what may come.

We all fear that in making the necessary economies it will be argued by the Treasury that every single part of the defence empire must take its share of the cuts. That is the extension of the "one Army" concept. But it is not one Army when costs are considered. To enforce an equality of sacrifice policy on the volunteers will simply destroy all our carefully built structures since they were rebuilt after 1970—efforts to which this Government have given such genuine and massive support for the past 10 years or more.

There is no organisation that cannot tighten its belt a little, but to ask volunteers to do it too often merely succeeds in annoying them and saves derisory sums of money. To some extent, as the noble and gallant Lord, Lord Bramall, said, the current moratorium on things like ammunition and petrol is already having its effect. When this happens, volunteers simply walk out and do not return. Furthermore, one never even gets back the army boots with which they were issued when they joined. As regards volunteer reserves, we must decide what size of force is necessary, for what tasks, and then se., that it is properly equipped, paid properly and helped to do its job.

In conclusion, perhaps I may ask the Government, when they decide and make some Statement on the future of our forces, that the future of volunteers and cadets can, if at all possible, be included in that Statement.

6.30 p.m.

Lord Glenarthur

My Lords, I should like to deal with one fairly narrow subject which I hope will form part of the consideration now being given to the future shape Of the Armed Forces. It has been argued by some—and I tend to share the view—that difficult though it might be to predict the final outcome of events unfolding now in Europe, one factor seems pretty clear: we shall require efficient, well equipped and, above all, flexible forces for the future. They will be forces which can react to any threat in Europe or worldwide. Therefore instead of placing reliance so heavily on armour, tracked artillery and so on, much more suited to the European theatre, we should in future place more emphasis on airborne, airmobile and amphibious forces. It is to the airborne and airmobile elements that I should like to address my remarks this afternoon.

While the United States, the Germans, the French and the Soviets have excellent airmobile capability, we have sadly lacked it. Where we have it, unlike others, we split the responsibility between the Army and the Royal Air Force, which is not nearly as efficient as it might be. Yet we have an airmobile brigade—24 Brigade—which is not as airmobile as many claim it should be. At present its supporting helicopter squadron consists of 12 mixed Gazelle light helicopters and the rather larger Lynx helicopter. A further 22 Lynxes have been promised—I think by 1992—but even that only gives a lift capability of about one company at a time. That is for an entire airmobile brigade.

I understand that in theory the Royal Air Force Puma and Chinook helicopters—about 60 in all—would be available to fill the gap. But what of the myriad of other tasks which they might be called upon to perform? Would they in fact be available when it became necessary to deploy 24 Brigade under any circumstances in any part of the world?

I do not consider it an exaggeration to say that 24 Brigade's air mobility is at present nothing more than wishful thinking. What can be done about it? I suggest that there are three elements to a solution. The first would be confirmation of the orders for 25 Utility EH 101 helicopters. That is the much larger helicopter which is under development by Westland at the moment both for the Navy and indeed one hopes for a Utility version also. They were foreshadowed, not promised, by the then Secretary of State for Defence in 1987. That would be a solution only in part. Perhaps my noble friend can say what the status of the MoD's consideration of that order is when he winds up.

The second element is to allow the Army Air Corps Lynx helicopters to revert to the role for which they were originally designed many years ago; that is, utility work and transporting soldiers and their equipment to and around the battlefield. However, in order to achieve that we need to find an answer to the third element: how to provide helicopter-borne anti-armour weapons—the so-called attack helicopter, which has grown in importance over the years as technology has allowed and which stands to complement the traditional role of the tank.

I know that the Ministry of Defence is still considering the size and capability of a helicopter to meet that role. Should we buy the European A-129 anti-tank helicopter or the United States Apache? How should we arm either of them? Those are very difficult and expensive questions. However, it seems that at least one consideration raised by the Select Committee in another place fairly recently may have been met. It is that the need for a capability to defeat armour in direct combat in Northern Europe is much reduced.

I should like to suggest to my noble friend that if we can pursue that theme, the manning of those extra helicopters in that role could be made possible by a transition—phased over a number of years no doubt—by some of the existing cavalry regiments, perhaps even some of the Territorial Army's cavalry regiments referred to by the noble Viscount, Lord Ridley. Those regiments are already the anti-armour experts. It may be history but on the whole they made the transition from horses to armour pretty well before the last war, if not always in some cases very willingly. They even took to the air with considerable enthusiasm and skill when light helicopters were introduced to them in the 1960s. They could and they would do the same again in an enhanced role. Such a change might reduce the need for more or further amalgamation and disbandment. As my noble friend Lord Pym hinted, that is a continuing and indeed debilitating worry which understandably is having a direct impact on morale at present.

I hope that my noble friend will give some thought to this suggestion and will indicate so far as he can—I appreciate that he may not be able to go far when he winds up—where the MoD stands in its consideration of the future shape of the Armed Forces.

6.35 p.m.

Lord Jenkins of Putney

My Lords, in a previous contribution to this annual ceremony I used the text of a remarkable article in The Times by the noble Lord, Lord Chalfont for my sermon. The article was headed "Force de Frappe or French farce". It is understandable that the noble Lord, with his present responsibilities, may not be able to be here this evening. However, I informed him of my intention to make a further reference to this seminal piece that he wrote some time ago.

Arguing that the French decision to develop a nuclear striking force was triggered off by the British Government's earlier decision to manufacture a hydrogen bomb, the noble Lord, Lord Chalfont, in 1973 went on to perceive that the outcome was that in both countries, the dreadful logic of the nuclear arms race begins to take the place of rational thinking". It is that dreadful logic which has caused the present Government to embark on Trident, for example. It may be that dreadful logic which has caused the Labour Party leadership to abandon the total and immediate nuclear disarmament to which it was previously committed in favour of hanging on to "nuclear nurse". The trouble with that policy is that now there is nothing worse. A nuclear war—"nuclear nurse"—could easily destroy all her children. It therefore seems to me that in the plan so interestingly outlined by the noble and gallant Lord, Lord Carver, there is no place for nuclear weapons. He suggested that they were irrelevant and should be put on one side for separate negotiation. I shall say another word about that before I sit down.

This year's Statement on the Defence Estimates makes it clear that in spite of the disappearance of a convincing and threatening enemy, the dreadful logic continues to hold sway over the Government. I quote, as did the noble Lord, Lord Mayhew, earlier, from the Statement: Reductions in US and Soviet strategic arsenals would have to go much further before we could even consider including the British deterrent in any future negotiations on strategic nuclear weapons". There is the dreadful logic perceived by the noble Lord, Lord Chalfont, all those years ago in all its mad and blind consistency. It should be said that the Foreign Office seems to be rather less taken over by the dreadful logic than the Ministry of Defence and Downing Street. Both of those seats of influence and power seem entirely lost to rational thought on nuclear matters. Therefore, our hopes for survival should not be raised too much by the relative sanity of the FCO.

Nevertheless, attention should be drawn, for example, to the Foreign Office background brief on the Nuclear Proliferation Treaty which I have in my hand. It was issued in a revised form last month in preparation for the fourth review conference of the treaty due to take place in Geneva during August and September. The FCO briefing reminds us that the United States, the Soviet Union and this country share the special responsibility of having brought into being this most widely adhered to arms control treaty. Furthermore, in view of the recent ravings of Mr. Ridley, it is worth pointing out that both Germanies are parties to the treaty. However, France rejects the rationality which used to be its hallmark by refusing to join 58 other states and, together with China, remaining free to develop and spread the power of nuclear destruction to its inevitable end.

Incidentally, I believe that instead of holding loony meetings at Chequers, exchanging outdated saloon bar clichés about national character, the Prime Minister would do well to be more introspective and ask other experts to what extent her own thinking has been replaced by the dreadful logic foreseen by the noble Lord, Lord Chalfont, as the inevitable accompaniment of nuclear weaponry.

The Foreign Office briefing confirms that the main aims of the Nuclear Proliferation Treaty are: the prevention of proliferation of nuclear weapons and other nuclear explosive devices", and, the cessation of the nuclear arms race, nuclear disarmament and a treaty on general and complete disarmament". That may be a long-term aim but it exists. I repeat, "nuclear disarmament". That is our aim and the Foreign Office confirms it. However, the Ministry of Defence and Downing Street do not even pay lip service to nuclear disarmament. Neither did the noble Earl, Lord Arran, but I hope that in reply he will have better news. As was pointed out by the noble and gallant Lord, Lord Carver, it may be that the statement is out of date and that further government consideration may have taken place. Perhaps in the light of developments since the publication of the statement they will have better news.

We are approaching the fourth review of the treaty which, as the FCO briefing points out, will be the last conference before the question of the extinction of the treaty is addressed in 1995. It may be too much to say that the fate of mankind will be decided in these coming months but certainly it will be influenced for good or ill as a result of the review conference. Therefore, it is tragic that our Government and the United States have hitherto seemed determined to veto a total ban on nuclear testing. That is the essential preliminary to nuclear disarmament.

I hope that we shall hear from the noble Earl that if, as is likely, the Soviet Union has stated that it is prepared and ready to have a total ban on nuclear testing the answer will be more accommodating than it has been in the past. If the noble Earl could go that far it would be most helpful. I shall leave that point and not rub it in as I had intended. That really is the dreadful logic of the noble Lord, Lord Chalfont, taken to its mad conclusion. The International Medical Campaign Against Nuclear Weapons pleads for us not to veto a comprehensive test ban treaty. All the indications are that it will renew the plea and I hope that it will be heard.

There are still some people who believe that a nuclear holocaust cannot be avoided and that we are too far into the nuclear scene to get out. Among them is the Colombian Nobel prize-winner, Gabriel Garcia Marquez. He wrote his gloomy article some time ago. Just as I hope that the Government are moving in the direction of ensuring that the so-called continual extension and improvement of nuclear weapons is unnecessary, so it will be that those of us who in the past saw no way out of a nuclear holocaust will see more hope in the present situation. Perhaps there already exists some movement in both areas of consideration.

Some of us still believe that nuclear disarmament remains the first priority. Above all else it is what matters most. We are seeking the removal of what Marquez sees as a Damoclean sword suspended above mankind and still threatening a horrible end to all our hopes. I believe that the situation is more hopeful and I hope that the Government also see it as such. Just as those of us who saw a sticky end to mankind may begin to feel that we are now wrong, I hope that the Government too will say, "Perhaps we were wrong and perhaps we do not need Trident and the great development of nuclear weapons at this time. We are prepared to think again about that".

6.48 p.m.

Baroness Strange

My Lords, I apologise to your Lordships for being unable to attend the whole of the debate. I am deeply sorry. I am also sorry that I missed two excellent maiden speeches made by my noble friends Lady Park and Lord Inglewood. I look forward to reading them tomorrow in Hansard. I hesitated to speak at all, especially in such company, surrounded by Prime Ministers, Foreign Secretaries, admirals and field-marshals—at least I was surrounded by field-marshals. However, having been granted the extraordinary privilege of visiting Her Majesty's forces in Cyprus, Ulster, Belize and the Falklands during the past year I felt it only right that I should say something on the matter.

I wise to make only three points and I shall be brief. First, we were impressed by the fact that in four different areas with differing problems high morale existed among all our forces. In Cyprus and Ulster we visited mainly Army and Royal Air Force units. In Belize we were lucky enough to land on the West Indian guardship. When I first read in our schedule that we were to land on WIGS and go to a cocktail party in WIGS I thought that I had not brought the right clothes. We found HMS "Alacrity" between assisting the United States in catching a haul of drug runners and helping after Hurricane Hugo the week before. In the Falklands we were able to land on HMS "Leeds Castle" in the Falkland Sound; so we met a selection of all three forces. Not only was high morale evident everywhere but so also was the high calibre and professionalism of the officers and men and women. On HMS "Norfolk", a new Type 23 frigate in the channel, we met two of the first sea-going WRNS. In Cyprus the control tower at Akrotiri was run by a woman, and on all our visits we were entertained by women Army officers. Some of the men in our party did not always recognise them later when they appeared in evening dress.

My second point is that many of the recommendations for improving conditions which we made on our return were promptly taken up and implemented by Her Majesty's Government.

My third point concerns NATO. When I go out I usually take an umbrella, not because I want it to rain, not because I expect it to rain, and if I am all tidy I certainly do not. Weather forecasts can be dicey things, like opinion polls, and if it does rain I do not want to get wet.

The amazing revolution, voltes-faces, in the past year in Europe have been marvellous, challenging and exciting. We all want them to work. We want a Europe composed of friendly, co-operating democracies. We all want to be friends with the Soviet Union. Indeed, we are fairly certain that we are friends with her while Gorbachev is in charge. However, in the last year we have seen how apparently immutable things can change. We have had some very nice surprises, but there is the opposite kind too, so to carry an umbrella while wearing a summer dress is not so silly as it might seem.

Of course I am not directly comparing NATO to an umbrella, although the noble and gallant Lord, Lord Carver, did mention the word. They have similar functions, however, in that while they both protect us from sudden squalls, on a good day an umbrella can double as a sunshade. It is important that it is there—in case. For 40 years NATO has kept peace and security in Europe. Not a scattered shower has penetrated our umbrella. Now the sun has come out and NATO can convert to becoming a sunshade. Its functions are different and the chances of rain are receding. Mistral, the Provençal poet, wrote: "Gai lézard, rejouie du soleil, Demain it pleura peutêtre". We must not forget that Russian arms continue to be manufactured at the same rate as before and that, though older pieces are being taken out of circulation, new and better ones are replacing them. Supposing that there should be a change to some less friendly leader; supposing that the new leaders wished to distract attention from the economic situation inside the Soviet Union, where would they look? North leads to Siberia and the North Pole; east leads to China with its 1,000 million inhabitants; south involves the Muslims, and there are already sad memories of Afghanistan. The only direction left is west.

So we are enjoying the sunshine but if we have our umbrella, still with us, still in place, we need have no fears of submersion in future rainstorms. It is very important for us all, for Europe and the world, that NATO should continue.

6.53 p.m.

Lord Hill-Norton

My Lords, I agree with other noble Lords who have said that the pace of change recently has been such that the statement on the estimates which we are debating today is no longer very relevant, even though it was published but a few months ago. I do not intend to spend much time on the text, although there are three matters in it to which I wish to refer.

After the London Declaration, clearly the management of defence involves other much more important matters, to which I shall turn in a moment. I have frequently been critical about the Government's treatment of, feelings and general attitude to, the merchant fleet. The few words devoted to it in the statement have removed none of my anxieties. I am not alone in disagreeing with the claim on page 30 that the merchant fleet was adequate for our defence requirements. On the contrary, it is in dreadful trouble. The Parliamentary Maritime Group has published figures showing that at the time the statement was written we were actually 350 hulls short out of a requirement of 1,300. That is quite apart from the appalling decline from 36 million to 15 million deadweight tonnes and from 80,000 to 21,000 officers and ratings over the last decade. Nobody could congratulate the Government on that. The General Council of British Shipping has estimated that this has cost the Government and the country not less than £140 million in every year.

There are two other matters, referred to in paragraph 312, which are apparently still undecided. The first concerns the future of the assault ships. It is said that this has been under study for five years. I have spoken about it in your Lordships' House in every one of those five years. When the Minister replies I hope that he will be able to tell us what the future will be. The second critical matter concerns the production of the new Merlin EH101 helicopter, referred to by the noble Lord, Lord Glenarthur. Both are clearly required, and in the changed circumstances, with greater reliance to be placed on reinforcement, both will have even higher importance than they had before.

I turn to the present and to the future, although I shall focus on a nearer term than my noble and gallant friend Lord Carver, who looked further ahead than I wish to do today. I might add that I agree with just about everything he said. We all know that there is a fundamental defence review in progress, and it would be criminally negligent if there were not. It is absurd to use any other word to describe the process, whether it be resource-led or policy-led. I am at a loss to understand why the Government and Ministers are so afraid of using the proper word, creating a totally artificial distinction such as the one I have just mentioned. I hope that it is being conducted in the certainty that—to use the words in the statement of the Secretary for Defence— Our approach to defence must be based on being able to respond to a range of possible outcomes, not just the one we hope to see". That is the acid test by which the results of the review must and will be judged.

The point of departure for any formulation of defence policy worthy of the name must be a careful evaluation of all the potential threats, and following that the creation of a military structure that will deter them or, if that fails, defeat them. Too often in our history politicians and academics especially have started at the wrong end, by choosing some entirely arbitrary financial ceiling and then inviting the professionals to suggest how much Navy, Army and Air Force they can buy with it. I pray that that mistake, which has cost us dear in the last few hundred years, will not be repeated now.

I should like to refer to some background considerations to a realistic assessment of the threat, and mention a few of them. The first is that capability must always weigh more heavily than intention. That can change overnight. We can all accept without difficulty today that there is no longer any real possibility of a surprise attack on NATO in Europe; but from the point of view of a UK defence policy, as was said in the other place recently, today NATO is the only game in town. It has never been a purely military alliance, as the noble Lord, Lord Williams, seemed to suppose, it has always had an equal political dimension. Its most crucial role in the months to come is to manage the changes that are happening in Europe now that it is being formally declared that the Cold War is over.

Perhaps surprisingly, that is also the Soviets' view. They have declared their interest in preserving the Alliance, including its nuclear weapons, and have recognised that Western solidarity—and probably only Western solidarity—could help to prevent unmanageable chaos developing in Europe.

I hope that Western reconsideration of the future of NATO will demand that France and Spain rejoin and join respectively the integrated military structure so long as that may be required. Europe and the Atlantic cannot possibly or properly be defended without those two countries. The expectations of the United States Government that Europe will gets its defence act together at long last must be at the front of all our minds during the exercise.

The political effects of any reductions—and there will be reductions—that we make in our European presence will have to weigh heavily in the military scales if our already slender political influence in Europe is not to decline further. There are awesome domestic, economic and social consequences to the quite large reductions in our military posture which seem certain. I shall say more about them in a moment.

Finally, there is the need to carry public opinion with all the proposals to be made. I have heard no other noble Lord refer to that point today. If public support is to be forthcoming—and without it no policy will run—we need above all a clear articulation of our interests and a convincing presentation of our defence policy to safeguard those interests. Governments have not been notably successful at that ever since the last war.

The reality of the present circumstances in Europe, in spite of a great deal of media hype, is that the ending of the Cold War has released political forces which have been frozen for 40 years. Nationalism, ethnic strife and border disputes will come to the surface, as my noble and gallant friend Lord Carver said. All those dire possibilities must be seen against the background of large, heavily armed forces, including nuclear arms, with the control of them weakened and suspect, still in place East of the former Iron Curtain. I quote again from page 17 of the statement: the Soviet Union remains an enormous military power, with a massive nuclear armoury … with a long indoctrination of hostility to Western interests and values, a recent history of much international trouble-making", Of this the noble Baroness, Lady Park, reminded us. It continues: defence planners must … approach cautiously … political shifts can happen … much faster than defence provision can be changed, run down or re-built". I hope that the same defence planners will also bear in mind that hardly any significant reductions have yet been made in the Soviet order of battle, nor in the rates of production of the most advanced weapons systems for all three branches of the Red Army, despite the promises publicly made. Nor has there been any perceived reduction in Soviet support for their surrogates in Afghanistan, Angola and Eritrea. If the promised reductions are put in hand, as we must all hope, they cannot be completed in under five years and they will be attended by the most intractable problems of employment and housing, some of which, on a lesser scale, we shall share. Nor would it be at all prudent to base any of our plans on the certainty that the old guard, and particularly the Red Army, will accept the pace of change proposed by Mr. Gorbachev.

The threats—dangers perhaps—to British interests outside the NATO area cannot be forgotten. The Minister reminded us of that. We have been involved, almost invariably unexpectedly, in countless armed conflicts outside the NATO area since 1945. It is more than likely that that will happen in the future. Moreover, given the proliferation of advanced weapons systems—nuclear, biological and chemical—among third world countries with highly unstable governments, it may well be that the chance of major conflicts with which the West—effectively the NATO nations—may have to deal together has much increased.

As I said earlier, having evaluated the potential threats that face us in the future, defence planners must decide on the appropriate force structure to meet them. It is often forgotten, especially by amateurs, that that exercise is sharply constrained by history. The planners have not just arrived from Mars with a clean sheet of paper. They inherit the forces that we have today and the weapons in the development pipeline. It would be foolish for me to suggest here what our order of battle might be like in five years' time, but it is certainly possible to make some educated guesses about shape and size. Perhaps I may repeat here the Defence Secretary's wise words that forces can neither be run down quickly nor built up quickly. It is quite certain that modern weapons are now so complex that they cannot be improvised, nor can the old-fashioned notion of a levée en masse to man them any longer be considered a viable option.

Perhaps I may deal first with nuclear weapons in order to get rid of them quickly. I have no personal doubt that, for as far ahead as can be foreseen, the UK should maintain an independent, strategic nuclear deterrent. I am glad to hear that the party of the noble Lord, Lord Mayhew, agrees with that principle. All the expert advice, with which I agree, is that to maintain one Polaris or Trident boat on station, you must have a force of four. I hope that press reports that the Government are considering only a force of three will prove to be quite untrue. I agree with those who advocate giving up battlefield and short-range nuclear weapons. However, a distinction must be drawn between them and nuclear depth bombs for the Royal Air Force and the Royal Navy, which will be required for some time yet.

In considering the reductions that can safely be put in hand now—although, if they are to be managed without catastrophic damage to our domestic, social, industrial and economic interests, they will take several years—it is of the highest importance to keep in mind the viability of each of the services and of the defence industries. There is for each service and for each arm or branch in that service a size below which it ceases to be viable. Overheads, such as the provision of training, weapons and equipment, become quite out of scale to the sharp end if a force is too small. That applies with equal force to infantry and armour, signals and engineers for the Army; for fighter, ground attack, reconnaissance, ECM, maritime, strike and transport aircraft for the RAF; for destroyers/frigates and carriers, for submarines and mine counter-measures, for amphibious ships and the RFA for the Royal Navy. None of those could be quickly rebuilt in the face of a new danger, as we found to our cost in 1938. It would be infinitely more difficult and take much longer today.

Those considerations make it likely that the shape of our Armed Forces will stay very much as it is today, certainly for about the next 10 years. Size will undoubtedly be much reduced and it seems probable that the major part of the reductions will be borne by the Army. In that connection, I hope that Ministers will not be carried away by the politically attractive idea of multinational formations. Certainly, below corps level, that would be a military nightmare. It will not surprise noble Lords to hear me say that I do not believe it would be wise to reduce the fleet by anything like the same proportion. I was delighted to hear my noble and gallant friend Lord Carver say much the same thing. I would guess that the minimum viable number for the destroyer/frigate fleet is 40, and that would be cutting it fine. It is not difficult to support a much bigger number by totting up the jobs to be done, the roulement and training needs.

I should like to take the bait dangled before me regarding the Royal Navy taking over maritime air operations. However, I am just old enough to remember the uproar that occurred before the Inskip award was finally made, so I will not do so today.

The process of making big reductions will require careful management, as the noble Lord, Lord Williams, said most clearly. The problems of demobilisation, both in the services and defence related industries, will be very awkward and expensive. If the proposal in the London Declaration to put greater reliance on reinforcing smaller front-line forces is adopted, men—especially those brought home from Germany with families—will want barracks and houses, training areas, schools, hospitals and jobs; all in this country. There are around 2 million people employed in the defence related industries. Both the industries and those people will require conversion and re-training. It will be very difficult and in some circumstances impossible.

Those considerations alone make it certain that the process will be a long one, measured in years rather than months. For those reasons it is idle to suppose that there will be some instant peace dividend. My personal guess is that nothing very useful financially will come to hand for at least five years. When it does it will not suddenly pay for more hospitals, schools or better railways, badly as all those are required. As usual, it will be quietly pocketed by the Treasury.

All those difficulties can and certainly must be overcome. A golden opportunity has been presented by the current defence review. I am sure that other noble Lords share my hope that it really will be policy-led and not resource-led; we shall not get another chance in our lifetimes.

7.12 p.m.

Earl Fortescue

My Lords, I shall be brief, particularly as most of what I have to say has already been said. This debate certainly comes at a time following great change in Europe. I was surprised that some noble Lords, particularly earlier in the debate, reproached the Government for not foreseeing these changes and for not having made savings in our defence expenditure already. Other noble Lords, including myself, believe that it would be a great mistake to take any major steps even now in the way of disarming unilaterally.

One is given to understand that the production of Russian tanks, Russian aircraft and Russian submarines continues at the same rate as it has for the past several years. I do not understand why it does not follow that if Russian equipment is not being increased it must at least be being improved and modernised.

One can only guess as to what Soviet policy will be over the next five or 10 years. One can only guess as to whether Mr. Gorbachev will still be running the country or whether he will be replaced by someone whose policies are very different. For those reasons I suggest that we keep up a high level of defence and urge our allies to do likewise as a sound form of insurance. I hope it will not be considered facetious if I say that one does not reduce the insurance on one's house or its contents simply because police statistics indicate a temporary drop in the number of burglaries and thefts.

Apart from our commitment to NATO, we have interests all over the world which we must be prepared to protect. A careful review of our overall defence is badly needed. I ask that those who conduct this review consider the following points among the many others made. First, as many of our interests are located a long way from home, are our navy and merchant fleets adequate for the task of protecting them? I suggest that both fleets need to be increased. I understand from the speech of the noble and gallant Lord, Lord Hill-Norton, that he agrees. I am glad that he reinforces what I, as a layman on naval matters, believe.

Secondly, I ask whether we need a new British battle tank. Apart from the German plain, where can one contemplate their use, even if we had the necessary shipping capacity to carry them many hundreds of miles? If we are to have a new battle tank I suggest that we buy one from our allies or make their tanks under licence. As a nation we may have invented the first tank, but frankly we are not good at designing or building them. Over the years our tanks have almost always had inferior armour and an inferior gun compared with those belonging to our enemies, either actual or potential. Also, the mechanical reliability of our tanks leave a lot to be desired, even today.

Thirdly, are not modern aircraft such as the Tornado and its crew far too valuable to be used to drop free-fall bombs? I suggest that a stand-off bomb be developed as a matter of urgency. I hope that my terminology is correct. I am speaking of a bomb which is released when the aircraft is at a considerable and, I hope, safe distance from the target, something like a mini air-launched cruise missile.

On most of the other occasions when I spoke in defence debates in your Lordships' House, I made chemical warfare my main theme. Ten or 12 years ago chemical weapons were rarely discussed and few people appreciated their significance. I have nothing new to add to what I have already said about those horrible weapons, but I am glad that their production and use are now frequently discussed at international disarmament talks.

Finally, I intended to make a point which I now rather regret. It is that if the Government decide to take the easy way of saving money by reducing the size of the army I hope that they will not repeat the past error of disbanding some regiments and amalgamating others. Other noble Lords, including two noble and gallant Lords and my noble friend Lord Ridley—who know more than I about the extent of the savings that we must make—would not agree with me on that point. However, I believe that the regimental spirit is of the greatest importance and very valuable. It should be affected as little as possible by such amalgamations or disbandments.

7.20 p m.

Lord Lyell

My Lords, I first add my congratulations to the two outstanding maiden speakers we have heard. Indeed, I follow one or two of the witty remarks of the noble Lord, Lord Inglewood. I believe he said that he was in a town not far from Stettin. Who could have imagined that my noble friend would be making a speech and carrying out political work in what we used to regard as East Germany; or, as the Germans said themselves d'ruben—over there.

A year ago, perhaps less, when my right honourable friend the Secretary of State was fresh in his appointment as Secretary of State for Defence, I recall that he used some wire cutters to cut away a piece of barbed wire from the border fence between Austria and Hungary. It was symbolic at the time—the possibility of a crack or a chink in what, for all my life, had been regarded as the Iron Curtain. What do we have today? We have virtual freedom of movement. Fifteen days ago the deutschmark became the legal currency—indeed, the only currency—in East Germany. Could that have been foreseen by any of us when we last discussed the defence estimates in this House? I very much doubt it. Indeed, there is always that great motto, "You never know what to expect". We carry on that motto from year to year as we discuss what we might need to do to defend ourselves, this nation and our freedom.

This evening I intend to touch on three aspects, all of which are contained in Chapter 2 of Volume I of the estimates. My first point concerns what is classified as the defence of the United Kingdom. In no way does this arise from my proximity to the Royal Air Force at Leuchars which gives me an excellent display of low flying at all hours of the day and night. Indeed, I have come to admire the pilots and I am extremely curious to see how much lower the planes can fly. Sadly, my noble friends Lord Glenarthur and Lord Trefgarne are not in the Chamber. It was only 10 years ago that the RAF staged a mock low-level attack on my house from a height of just over the maximum of 250 feet. I shall not regale your Lordships with the fate of one of my noble friends. Certainly, I have come to admire the professionalism of the Royal Air Force at Leuchars.

During the past 12 months, together with several other noble Lords, I have been fortunate to have attended one or two defence displays. I have come to admire and learn a great deal about the working of Type 42 destroyers and two separate Type 22 frigates. There is no question in my mind but that the Royal Navy has exceptional and modern equipment in its first class ships. The Royal Navy also has first class and outstanding personnel from captains right down to the lowest ratings, all of whom display considerable professionalism and ability.

I was fortunate enough to attend an exercise in the NATO area less than one month ago. There are references to some realistic exercises on page 19, paragraph 202, of the estimates. Some exercises are realistic in the extreme. It would be an experience for your Lordships to feel one of the more powerful mines exploding in the water one kilometre away. Unlike my noble friend Lord Mottistone I have not been under fire, but I suggest to your Lordships that the shock wave striking the hull of a Type 42 at that distance is not dissimilar to the reception that my noble friend on the Front Bench receives on occasions during Questions. There was also a singularly realistic air attack on the Type 42. Together with several noble Lords I was able to see the excellent response by every member of the crew and, indeed, every member of the course.

I make one plea to my noble friend, and if he cannot reply tonight perhaps he will take the point on board. I refer to the Royal Naval Reserves, referred to on page 28 of Volume II of the estimates. The figures show that the total strength of the RNR is between 31,000 and 32,000. I understand that the RNR's main duties in the current scenario are in such areas as mine hunting and clearing and mine laying. Perhaps those duties could be widened to provide slightly greater integration into such areas as fishery protection or the happy acronym of STANA VFORCHAN. That stands for Standing Naval Forces in the Channel.

It has been suggested to me that if one or two units of the RNR could be integrated into fishery protection or the forces in the Channel there would be an enormous advantage not just for the Royal Navy but also to the RNR by preparing it for its putative action role in time of emergency. I come back to the watchword of this debate and every other debate on defence estimates—you never know. Your Lordships will remember that it was just over eight years ago on a Saturday morning that we had the debate in this House after the Falkland Islands had been invaded. We can never know.

There is one further point that I should like to have considered. I refer to paragraph 203 of Volume I. After 20 years Northern Ireland still looms large in any defence discussion. Your Lordships may remember that 1968 saw the student uprisings in Paris and the incredible demonstrations in Grosvenor Square against the Vietnam war. Who could have imagined that minor student marches in Northern Ireland would have given rise to an emergency which, 20 years later, is still with us?

There are 19 major units in Northern Ireland. Those are the cold terms in which it is classified in the defence estimates. There are six resident battalions, four roulement battalions, and nine battalions of the Ulster Defence Regiment. It is to the nine battalions of the UDR that I devote two minutes of your Lordships' time. I hope noble Lords will agree that adequate equipment and training, and above all training areas and opportunities, should be available and continue to be available to those battalions.

Every time we hear on the radio, read in the newspaper, or perhaps see something on television, of an incident in Northern Ireland I remember the friends and families of 6,200 men and women who are resident in the Province who have yet another worry. I also think of the families of all the members of the Royal Ulster Constabulary, let alone all the families of the Army, Royal Navy and Royal Air Force who are serving in and around Northern Ireland. However, it is to the UDR and its members that I direct my remarks this evening. Members of the UDR carry out their duties day and night, week after week, month after month and, as has been proved, year after year amid horrifying risks. They are at risk for the whole of their lives. There has been a rise in indiscriminate terrorism. When it strikes them or their families it is regarded as just another incident. Paragraph 205 of the estimates gives the cold fact that, the security forces … pay a price in the fight against terrorism". They do. In the past year 11 regular soldiers have lost their lives in Northern Ireland and two members of the Ulster Defence Regiment. Let us not forget that on this side of the water, 80 miles from where we stand, 11 Royal Marine bandsmen were murdered last summer. One staff sergeant was particularly seriously injured. Let us never forget that the personnel and families of the defence forces are targets but so also are any of us. Any member of the public is a target of this manifestation of 20th century terrorism. We do not forget Guildford, Woolwich, Birmingham, the La Mon restaurant in Northern Ireland or the Drop In Well in Ballykelly. We certainly do not forget Roermond in Holland where two Australian gentlemen were done to death just because they had a British car with British number plates. That is the horrific example of what I stressed at the outset: you never know what emergency will arise and what might be needed. I believe that your Lordships will agree that the men and women of the Ulster Defence Regiment bear a heavier burden of risk in their duties and daily lives. I salute them tonight.

There is one further point that I wish to raise briefly in connection with paragraph 215. Will my noble friend be able to take on board the points that are raised concerning housing? They are of particular interest to members of the Armed Forces who have spoken to me and, I believe, other Members of your Lordships' House when when we have paid visits overseas. Last autumn various members of the infantry regiments in Germany complained to me about the efficacy of the SA80 rifle. Various points were made and we were told that the problems had been overcome. It may not surprise your Lordships or my noble friend that last Friday I was on the ranges at Bisley. One of the sharpshooters, a most distinguished marksman in the Royal Marines, was halted during the competition for the Methuen Cup because—guess what?—the return spring on the trigger of his SA80 had broken. According to the rules of the competition all repairs had to take place on the range.

There was a particularly competent Royal Marines' armourer on the range who managed to effect a repair. In Scottish terms, I "hae me doots". I hope that return springs are available and that the SA80 will have 100 per cent. availability at all times especially in view of the immense risks that are taken by members of the Armed Forces and, above all, the Royal Marines, throughout the world.

We have had an opportunity today to examine, discuss and consider the fascinating facts, figures and details of the Defence Estimates. We have been able to study details of all the equipment and the hardware that is spelt out in Volumes 1 and 2. But let us never forget that none of this equipment or hardware will work without the effort, skills and talents of the men and women of the Army, the Royal Navy and the Royal Air Force. I also remember the Royal Marines. To them, their families and their relatives, we give our best wishes and our thanks tonight and every night.

7.34 p.m.

Lord Gladwyn

My Lords, what we are eventually to spend on defence surely depends on the agreements with the Soviet Union on arms limitation which we hope to arrive at during the next year or so. Success in these negotiations has obviously now been practically assured by the spectacular accord arrived at in the Caucasus yesterday by President Kohl and Mr. Gorbachev. However, there are a few resultant conclusions which we shall probably have to accept in the fairly near future and they are as follows.

In the first place, the flexible response as a strategic conception is dead and its death should now be officially confirmed. It never did make much sense. But the idea that we could ever check a now almost inconceivable Soviet advance into Western Europe by employing short-range nuclear weapons which would inevitably kill large numbers of Germans, Czechs or Poles, is an obvious absurdity.

It follows that all such weapons should shortly be withdrawn from Germany in agreement with the Russians. Such agreement should not be made dependent on anything else. It should take place as soon as possible. It looks as though, from Herr Kohl's agreement with President Gorbachev, that this will be the wish of the German people after the coming European elections. It is ultimately for the Germans to decide.

Neither do the Germans want to have on their territory the new stand-off bomb known as TASM—the tactical air-to-surface missile—which should now be preferably completely abandoned. For, once used, this weapon would certainly involve the elimination of Berlin or Cologne. If it is not to be based on Germany, it could be based on the United Kingdom. But then it would be virtually indistinguishable from the British nuclear deterrent which, along with the French Force de Frappe, we must clearly retain as long as the Russians have a strategic nuclear capability. That is the case even if (and more especially if) the Americans ever withdraw their own nuclear cover from Europe.

But what can such deterrents actually deter? They can only deter the use, or the threatened use, of nuclear weapons by Russia or any other power, against our two countries. That is all they can do. I suggest that it follows that no first use of nuclear weapons, and not their possible use as a last resort, should indeed now be the declared policy of all the nuclear powers provided that they are assured—as the Americans, the Russians, the French and ourselves are assured—that their own nuclear forces are immune from a first strike by another nuclear power. In that case, all can be reduced without any loss of security.

But would that mean, as is so often alleged, that Europe would be at the mercy of a Russian conventional attack? It would not. It must be obvious that Western Europe, including a united Germany still a member of NATO, with some 350 million people, must be capable of organising a credible conventional defence—perhaps, as the noble and gallant Lord, Lord Carver, suggested, based essentially on the WEU—even against a Soviet Union of about 250 million people run by rebellious generals. That is all the more so if, as can be assumed, the Americans stay in such circumstances. Schemes for a forward defence are in any case quite unnecessary.

Finally, the possible invasion of Western Europe by Russian hordes is now only a Cold War nightmare. It should no longer figure prominently in Western plans for European defence. The Soviet Union may collapse giving rise to grave problems, but not to an invasion of Western Europe. Happily, and more probably, some more or less democratic Russian confederation may emerge which, perhaps protected from any conceivable attack by the West by a cordon of so-called neutral states, extending from Riga to Constanza with no foreign troops on their territory, could well find itself co-operating with the West in containing some Pan-Islamic bloc that might even comprise the present Soviet Central Asian republics.

With such developments on the horizon, should the American army remain in Europe? For so long as the Russians have troops in Eastern Germany, they should of course remain, though no doubt in greatly reduced numbers. But if as the result of a German settlement the Russians, as now seems almost certain, all go back in a few years' time to Russia, there is no longer any logical reason for the Americans to stay. A token force is all that would be required giving expression to a continuing North Atlantic alliance, the flanks of which—the Finnmark and Turkey—still being protected, we should hope, by American naval power.

I suggest that the explicit and willing acceptance by the West of these possible results of the Kohl-Gorbachev agreement would do more than most things to bring about those arms limitations agreements which we all want. It is no doubt only when this happens that we can establish a long term post-Cold War settlement that is likely to endure. Frankly, I doubt whether any such settlement can be based uniquely on the Conference on Security and Co-operation of 35 sovereign states, which, though it will certainly assist, in co-operation with the Council of Europe, in dealing with the various matters listed in the recent NATO communiqué, is, by its nature, not qualified to deal with defence.

As I see it, the end of the Cold War should result in major reductions in the armaments, both nuclear and conventional, of the major powers, relations between whom will be such as to make war between themselves unthinkable. These powers, or rather power centres, may well be, by the end of the century, North America, Western Europe, some Russian confederation (separated from the latter by a band of neutral states), China, and presumably Japan. They will all have at least one major common interest, other than maintaining peace in Eastern Europe; namely, to contain some Middle East explosion, perhaps involving the Indian sub-continent. They will also need some centre for settling any differences as between themselves.

Where could this be but New York? The charter is a completely workable document given only that agreement between the permanent members of the Security Council is possible. Under our thesis, it will not only be possible but likely. So let the United Nations, wrecked by Stalin, now come into its own! Admittedly, it is unlikely to be restructured. For instance, it will be some time before Western Europe is represented by one person in the Security Council, if it ever is. But there is no reason why a common policy should not be pursued there in agreement with the Germans. I therefore urge the Government, besides being prepared for the likelihood of future developments in the field of defence, not to neglect the United Nations in their long-term plans for the preservation of peace.

7.45 p.m.

Lord Ironside

My Lords, anybody who has read this year's Statement might on first thoughts feel very bullish about the state of affairs, with cash plans firmly in place for the next three years, but the bearishness of the Secretary of State's introduction casts a shadow over the whole Statement, or most of it anyway. But it is still opportune to have this debate because the Government will be able to listen to what we have to say at this moment in this Chamber.

The collapse of the Soviet empire and what that will lead to in terms of defining the threat and our new defence posture has created uncertainties in all our minds which will take time to resolve. I have read the debates in the other place on the Army, Navy and Air Force and the annual two-day debate on the Statement. I think that they reflect the wide support there is for our Armed Forces—and that is good. But what I find disturbing is that in some quarters not enough value is placed on ensuring that they are properly armed so that they can continue deterring. The ability to deter, above all else, is what prevents war. I welcome the retention by NATO of the nuclear deterrent in the last resort.

The potential enemy, or what is left of him, may no longer have the same smile on his face but he still has the same muscle in his arm and his factories are still churning out as many sophisticated platforms and weaponry which are a match for any of ours used directly, or by others in support of alien causes—in other words, through Soviet sales and cast-offs to other countries. So while the case for force level reductions can be anticipated and pre-emptive action taken, I very much support the Secretary of State's resolve to sustain modern and well equipped forces which are adequate for meeting our security needs for the future within and without NATO.

Speaking from the point of view of someone with an active interest to declare, I hope that the House will bear with me if I draw attention to some of the factors which I think are relevant to getting our new defence posture right. The White Paper covers the threat and the forces' make-up. The rest of it—about one-third or some 20 pages—is devoted to procurement and management of what some would say amounts to the enemy within. I shall talk about this because of the rapid swing from quantity to quality made more noticeable by the wholesale scrapping of out-of-date defence equipment by the Soviets. If it was said that we were once in an arms race, we are definitely not any longer; we are now in a quality race. In fact quality has become an obsession.

For some years now users have been making severe criticisms of equipment reliability, the cost of support services and project overruns. The Estimates only touch on these matters under the cover of saying that a director of reliability is now in place and that the final steps of the new management strategy will be introduced by April 1991, to be followed by the next steps initiatives to deliver services more efficiently. Perhaps those are to some extent last year's arguments, but quite frankly I do not think enough emphasis is being put on them to show that the Ministry of Defence really means to get its house in order. Value for money is not any longer just a policy goal; it has become a vital necessity.

Underlying the Estimates are the recent reports, a variety of them from the Comptroller and Auditor General and the Select Committee on Defence of another place. Some of them are not very complimentary. They are about beefing up reliability and sharpening up support costs and about the shortcomings of what looks like a new winning class of warship—the Type 23 frigate. If I read correctly, HMS "Norfolk" goes into her sea trials without the EH 101 Merlin helicopter, without the planned command and control system and with a vertical launch Sea Wolf system which has suffered phase skipping and reduced effectiveness.

Moreover, this is not the only system which has suffered in that way. As the most recent report goes on to say, it would be the last straw if the new Type 23 Duke class frigates cannot adequately be supported at sea by the new Fort Victoria Class AOR or one-shot supply ships which are an integral part of the new anti-submarine warfare support system. In other words, can my noble friend assure the House that AOR ordering is keeping in step with frigate ordering and the start fabrication times to ensure that the 22s and the 23s have what was described at the AOR launching as their floating supermarket support? Can he remove all doubts by saying when AOR 3 and 4 will be ordered?

There are many lessons to be learnt from these reports and they appear to be rather expensive ones. Nevertheless, I hope that they are lessons which will be quickly learnt.

In the march towards quality the ongoing relationships between the controllerates and industry are, I think, very good; but it would be naive to think that equipment expenditure will remain at the present high levels. Therefore, I wonder whether industry will be so ready to come forward and share development risks if it foresees that projects will not go on to completion. The MoD may still remain the biggest customer but in lesser volume terms. I also wonder whether industry will be so ready to compete without greater incentives from the customer and much larger up-front spending by him. In the case of the EH 101 Merlin helicopter, Westland sees a major civil market spin-off. But what about air-independent propulsion systems for submarines, where the Royal Navy may have a future need but where there is at present no civil outlet beckoning? I believe that if developments go forward in this field the MoD will have to bear many of the risks and spend much money getting such developments under way.

The growth in foreign sourcing may help to contain costs, but the argument that it is healthier for British firms to be exposed to more open competition needs qualifying. Contracts bulletins from IEPG countries provide more opportunity for competitive bidding for UK companies. But what is true for UK companies is equally true for foreign companies. As I understand it, the new management strategy intends to bring defence support services into the competition ring. I recognise that there is a great deal further to go on developing better support services where as much as £1 billion per annum is to be saved; but in opening up the market across the frontiers we must remember that in the IEPG framework there are no offset constraints in play as is the case with the USA.

The Anglo-French agreement has some constraints but the playing field is still far from level. In my view, there is a need for constraint on the part of the top level budget holders and perhaps also on the part of high level budget holders working with the fledgling defence works services in the support services field. For example, will the C-in-C Naval Home Command be allowed to invite bids from French Companies to maintain cranes in the Portsmouth naval base? Further, after 1992, will there be anything to prevent the new Commander British Forces in Gibraltar inviting tenders from Spanish firms? Incidentally, the Bulletin des Marchés says that Spain is the odd man out who does not yet publish a contracts bulletin.

As a member of the all-party defence study group, I visited Gibraltar at the end of June and was able to see defence installations there at first hand. I was also able to hear directly about the effects of force level reductions. When the 3rd Royal Green Jackets are pulled out next year, the Gibraltar Regiment, born out of the Gibraltar Defence Force set up in 1939, will step into their shoes. If we are to be faced with a regimental squeeze in the British Army, and this looks highly likely—indeed, the noble and gallant Lord, Lord Bramall, said that he was convinced that this would happen and suggested ways in which it could happen—I am happy to see that the Gibraltar Regiment will be the only regiment in the British Army expanding its size and role and looking forward to a bright future with a regular company. Incidentally, the event will be marked by a fantasia of fireworks at the military tattoo in Gibraltar from 27th to 29th September. That is what people will see if they visit Gibraltar at that time. I wish its members well when it becomes the resident battalion on the Rock, which remains a vitally important point in our security net.

While I was in Gibraltar I visited HMS "Chatham", which is the latest and the last of the Type 22 frigates—a stretch 22, with 280 crew. If the Type 23 can be crewed with 140 men, I think that that is a good sign that the Royal Navy is beating the demographic trough. I hope that this class will turn out to be a winner and that the future frigate now being planned will also follow on successfully as the progeny of the Dukes—perhaps it may even be named as the "Fitz" class.

Whatever the uncertainties and whatever the outcome of Options far Change, I hope that the new management strategy will take effect rapidly.

7.55 p.m.

Lord Rea

My Lords, noble Lords will be pleased to know that as I have listened to the debate I have gradually scratched out more and more of my speech as my points have been progressively and better made by other speakers. It has been most interesting but not unexpected to hear so many noble Lords and some noble Baronesses tell us not to be lulled into a sense of false security, as does the review, by events in the USSR and in Eastern Europe.

It is very difficult to readjust to the loss of one's enemy. Indeed, a real certainty in life has gone. At least two of the very high ranking noble and gallant Lords who spoke in the debate have realised that the situation is no longer the same. In fact, the noble and gallant Lord, Lord Carver, said that the threat for which NATO was created has disappeared. As the noble Lord, Lord Gladwyn, said, the USSR has just agreed with Germany to withdraw its forces in three or four years. Even now, as the knowledgeable military men among us have pointed out, it would be very difficult for the Soviet Union to fight a war with its supply runs as precarious as they are at present, running as they do across Poland and Czechoslovakia.

Of course there are other reasons why the Government may be reluctant to move as fast as many of us feel they should in cutting military expenditure. These have been very well described by the noble Lord, Lord Williams, and also by the noble and gallant Lords who have spoken. It is clear that a proportion of savings from a reduced defence budget must go to re-equipping and helping the defence related industries to diversify and towards retraining and resettling members of the armed forces. I very much hope that the Government will not adopt the measure of encouraging an increase in arms exports as a means of cushioning the effect of reduced government expenditure on defence. In this connection I think that we should take an example from Czechoslovakia, which, despite a sizeable arms export trade up until now and with a great need to gain hard currency, has declared its aim to phase out arms exports.

An important reason for getting on with this job quickly is that we have for too long overspent on arms in relation to our gross national product. Until this year at least, we have spent more on arms than any country in NATO except the United States, but we rank only fifth in GNP. Let us hope that the long drawn out anomaly in which we have shouldered more than our share will end. That heavy expenditure must be recognised as a major contribution to our post-war economic ills. In yesterday's Guardian Will Hutton, its economic editor said: In the British case there is little doubt that had defence expenditure been lower as a proportion of gross domestic product the economic story of the last 30 years would have been different". There is no doubt that sooner or later defence expenditure must drop drastically and the so-called peace dividend will be with us (although, as the noble and gallant Lord, Lord Hill-Norton, said, we must be careful that it is not immediately swallowed up by the Treasury and used for purposes that cannot be traced). As I implied earlier, the first step must be to use some of the former defence budget to reintegrate the industrial and human resources which at present are being tied up unproductively in defence.

At the same time, there will be claims for the released resources from every side. Everyone has his or her favourite list of worthy recipients. I believe, like my noble friend Lord Hatch, that the developing world of the South should take first place. Those resources should be used on measures to phase out external debt as quickly as possible so that those countries can re-enter the world market on fair terms, to the lasting benefit of their populations. Well-chosen aid programmes should be expanded. We might reach the magic UN target of 0.7 per cent. of our GNP. At present it runs at about 0.3 per cent.

As a member of the Parliamentary Population and Development Group, I suggest that that aid should be devoted to health and family planning projects. It has been suggested that if every woman who wished to control her fertility could be supplied with modern contraceptives fertility would be reduced by 28 per cent. at a cost of £5 billion. That might result in the world population being 1 billion or 2 billion lower by the time it stabilises at the end of the next century. That is a sum which this country alone could achieve through a 30 per cent. cut in defence expenditure. The United States could provide that sum by a 3 per cent. cut. The target is easily achievable and would help towards preventing the environmental disaster which will occur if we do not ensure that our population levels off at as low a level as possible.

Finally, I should like to turn to nuclear weapons. Compared to their destructive power they are of course relatively cost-efficient. I am sorry that the Government intend to continue relying upon that weapon of mass destruction. As my friend Lord Jenkins pointed out, there is a real need for the nuclear weapon states to move much faster towards a reduction of nuclear weapons so as to make the nuclear non-proliferation treaty a reality. Too many states, as the defence review points out, now have intermediate range missile capacity.

It is in all our interests that those countries should be discouraged from developing nuclear weapons. That will be easier if the nuclear non-proliferation treaty is seen to be a going concern at the next review which takes place later this year. The nuclear non-proliferation treaty will be much more credible if the nuclear weapon states are seen, as one of the articles in the original protocol states, to be making strenuous efforts towards reducing their arms. The first step could well be, as my noble friend Lord Jenkins said, the drawing up and signing of a comprehensive nuclear test ban treaty. The Soviet Union has offered that, and has already demonstrated its serious intent by its unilateral ban which lasted 15 months two years ago.

Verification problems have now been overcome. Verification will become easier now that there is a freeing up of and easier access to the former Iron Curtain countries. We should get on with that treaty so that, if we cannot eliminate it, we can work towards eliminating Gabriel Garcia Marquez's "Sword of Damocles" which has hung over us for 45 years.

8.5 p.m.

Lord Mottistone

My Lords, the noble Lord, Lord Rea, said that some of us might find it difficult to adjust to the loss of an enemy. I believe that the problem is that some of us are adjusting too quickly to the loss of an obvious enemy. I thank my noble friend the Minister for a clear exposition of the Government's current thinking on defence with which I broadly agree. I hope that they will stick to it.

Times like this are special. As on other occasions in the past, some noble Lords such as the noble Lords, Lord Hatch and Lord Rea, will be tempted to say increasingly in the coming months and years that there is no longer a need for a strong defence capability. "Let us economise. Let the forces gradually waste away to a minimum". Something similar happened after the Napoleonic wars, and 40 or so years later we were threatened by Napoleon III. Happily, we then had Palmerston. I cannot see Palmerston appearing from the Benches opposite. He counteracted strongly afloat and ashore, and built a successful deterrent. Things are different now. Ships, weapons and fortresses could then be built quickly and the country was the most prosperous in the world. Today it takes 10 or more years to develop a new weapons system, as several noble Lords have said. In the past 40 years we have also learnt of the incalculable value of the credible deterrent to prevent war or the threat of war. That vital truth must be the cornerstone of our present thinking.

The noble Lord, Lord Hatch, said that we have no enemies now; but without a deterrent, we could easily acquire some enemies, as we have in the past. We are not as relatively prosperous as before, but we cannot afford—if we are to maintain the present peace for the foreseeable future—to let our armed forces waste away. That was said by the three noble and gallant Lords from the Cross-Benches who spoke with great expertise. They gave good reasons for their belief. I shall touch on that point briefly.

Our forces must be kept at peak efficiency, updated as necessary, in order to continue to provide a credible deterrent. Of course we hope that NATO will continue, modified as necessary over the years, for the foreseeable future. We have heard a great deal this evening about how NATO sees its future which on the whole is encouraging. However, NATO must continue in its present form, modified but little, until we are certain that the Soviet forces have diminished to a defensive size only. We must be certain that all parts of the Soviet empire have settled down to a stable, democratic, free trading state. My noble friend Lord Ironside said something similar.

Although other noble Lords believe it may be sooner, I guess that it may well take 10 years before we can be assured of stability and a decrease in the enormous strength of the Soviets. We must also be assured that at some time the Soviet armed forces—like many other armed forces in the world—will not say, "Stop! We can't bear this any more, we must take over". They would then present the threat which everyone hopes will never again arise. We must be sure of that.

However, what is to happen thereafter? Who can tell? History has taught us that all guesses as to the fate of nations are wrong. Let us look at the facts. It seems certain that we shall continue to need a strategic nuclear deterrent for the foreseeable future. If we no longer need it to provide a diversion deterrent against the Soviets in NATO in the next century, we shall almost certainly need it to deter new nuclear armed countries in the Middle East and elsewhere. I was delighted to hear the Minister give an indication that he too thought that that was a possibility.

My noble friend considered, as I do, that another certainty is the need always to have forces of all arms to deter others from threatening these islands. In addition, we shall always need naval forces to deter threats to British shipping. I entirely agreed with what the noble and gallant Lord, Lord Hill-Norton, said about the disaster to British shipping over the past years. Much though I support the Government, they have been singularly blind to what has happened to the merchant navy recently. Now that we have it, it must be able to do its job. The Armilla patrol in the Persian Gulf has been mentioned as an example.

We shall also need naval forces, including an amphibious capability, and soldiers, to deter threats to overseas possessions and communities as well as to countries outside the NATO area with which we have treaty obligations. By the year 2000, most of these will be in the North and South Atlantic although they will be outside easy range of this country. We must not forget, for example, Pitcairn Island at the far end of the Pacific, even if the Navy has never seemed keen on defending it and its people for historical reasons.

There is a clear need for a defence capability of roughly the present shape and size until the end of the century. Thereafter, there will be an obligation as well as a need to maintain a deterrent which must always be credible in the pattern of the time. Our grandchildren will suffer if we do not hand on to them the ability and strategic understanding to deter threats of conflict.

I am fully confident that the present Government understand all this. However, I am concerned that the ever-glowing demands for social welfare—and I am one who contributes currently to some of those demands—will serve to distort the vision of future governments and their advisers. It may persuade them that the deterrent is an old hat idea no longer needed. From some of the speeches I have heard from the opposite Benches, I hope that those noble Lords will not provide a future government for a long time to come, at least until they have learnt these essential truths.

The solution to this conundrum about how to share out the cash can only be provided by our industry and services being increasingly competitive in the world market. Every effort to help them do so must be made by the government of the day, as is being made by this Government.

In conclusion, at the forefront of our vision must be that a firm, even if relatively expensive, shield can nearly always deter the sword. That must be the ultimate priority. To maintain that shield, we not only require resolution and vision by governments, clearly understood by the public, but also an appreciation by the officers, the men and the women of our defence forces that they are truly needed for now and always. On those people ultimately depends the peace of the world.

8.15 p.m.

Lord Graham of Edmonton

My Lords, as we have come to expect, our defence debates provide a constant reminder that in your Lordships' House are gathered noble Lords representing a quite unique repository of talent and experience in every field and never more so than in the field of defence. Those like myself who have attended debates in recent years know that we have our regular performers. Their contributions enliven and illuminate our debates, as they have done today. Noble Lords always speak wisely and I do not undervalue any of them.

Today we welcome two newcomers to our defence debates, the noble Baroness, Lady Park, and the noble Lord, Lord Inglewood. I say to the former, "Good morning", and hope that I shall not be misunderstood as apparently she was when she was taught that phrase in Polish some years ago. I am glad to have had the opportunity from this Front Bench to say how delighted we have been not only with her performance today but with our perception from her regular attendance that she will be an active participant in our debates. She told the House of her experiences in Russia, North Vietnam and Mongolia, which has whetted my appetite to know more about her. She demonstrated to me a grasp not only of defence but also of the political realities which must be understood if one is to make a good defence spokesman.

I was also pleased to hear the noble Lord, Lord Inglewood. As he told us, he brings much experience to us through having campaigned for the Chancellor from the "Kohl" face. We thoroughly enjoyed what he had to say and look forward from our Benches to hearing both newcomers soon and often.

Much of my speech will be about our responsibilities for the future. That future will be less preoccupied with defence expenditure than with peacetime expenditure. First, however, I wish to take up some points on speeches by other noble Lords. I remind the House that about four hours ago my noble friend Lord Williams drew a parallel between the break-up of the Ottoman Empire, the reasons for its break-up and what happened subsequently with what is happening before our eyes: the trauma and turmoil inside and on the edge of Russia. He was quite right to point out that this is not merely a break-up of a business; it is interwoven with ethnic, nationalist and traditional undertones.

We shall do ourselves a service today if, besides debating the defence of the realm, we recognise that defence has almost moved into a new dimension. Defence is not merely a matter of guns, aeroplanes or tanks, and never was. It has always been a military science. In the past five years we have learnt to appreciate that events are changing the face of our defence capability rather than that being changed by a mere reassessment of our needs. My noble friend Lord Williams of Elvel did us a service in reminding us of areas of the world which are troublesome. He drew attention to the militancy of Islam and to Northern Ireland. He touched, in almost a throw-away line, on the enormous consequences of neglecting what may happen in China. He reminded the House that we must work on a number of assumptions, and that those assumptions must be taken seriously.

First of all, we must try to imagine the final shape of the Russian empire. We must then decide what we have to do as a result of that. My noble friend reminded us of the political, economic and military instabilities that exist. He set the scene very well and his speech was thought provoking. My noble friend Lord Williams followed the Minister, who served us well and sensibly today. His speech contained no bombast or bravado. It represented a straightforward and sober assessment of the political realities that we are facing. He said that the map of Europe has been redrawn. I suggest that it has been redrawn persistently over the past five years. We cannot be certain that that redrawing has finished even yet. We must take that fact into account. The Minister said that the Warsaw Pact is no longer a credible force today.

The noble Lord, Lord Pym, made an astounding speech. He said that the military threat had not diminished in any way. We on this side of the House acknowledge that we should not make dramatic changes. The noble Lord, Lord Mottistone, talked about a 10-year period. We recognise that we should not drop our guard or be caught unprepared. We shall not move swiftly as regards any changes. However, the noble Lord, Lord Pym, and some other speakers suggested that in effect nothing has changed; in other words, the threat that has forced us to spend billions of pounds on defence has not diminished in any way.

I believe that was a careless phrase. We acknowledge that there is a threat, but we believe that it has changed and that it has diminished considerably in comparison with former times. The noble Lord, Lord Pym, did us a service by reminding us of our interdependence in defence with the United States. He made great play of the value of our alliance. I shall develop that point further in a few moments.

The noble and gallant Lord, Lord Hill-Norton, made an impressive speech. I hope the Minister will be able to say something positive about one of the points that the noble and gallant Lord made concerning the unprepared state of our merchant fleet. The noble and gallant Lord will reflect with pride and relief on the fact that six or seven years ago our merchant fleet saved us from considerable embarrassment, if not from a worse fate. I hope the Minister will tell us why the Government have not seen fit to ensure an adequate future for the merchant fleet. That may involve the hated intervention or subsidy processes. However, our merchant fleet is in a sad state, and it must be maintained by any means necessary. The Minister will not do us a service if he says that that matter is not the Government's responsibility.

In my view the speech of my noble friend Lord Hatch was well worth listening to. He said that when we look back on the years 1988 to 1990 we shall regard them as a watershed as regards the reshaping of the fortunes of this country, Europe and the world. We must recognise that the world has changed and that the global environmental responsibilities which we have taken on—the Government to their credit have taken on those responsibilities—must be paid for in one way or another. We should acknowledge that they have created a peace dividend which can be respent in other ways.

The noble and gallant Lord, Lord Carver, put forward some interesting thoughts on new structures that we need to look at in the light of changed circumstances. I intend to read the speech of the noble and gallant Lord with care as I believe it merits that.

Tonight speakers have understandably concentrated upon the dramatic changes that have taken place in the political as well as the security aspects of world events. We on the Labour Benches do not apologise for being as much concerned with the future as with the past. My noble friend Lord Williams reminded us how the economy at the time of the First World War was allowed to drift into a state of chaos as the world was unprepared for that war. After the Second World War, the transition from wartime to peacetime conditions was managed very well, not least due to the trojan work of Ernest Bevin. We want to hear the Minister tell us that the Government have a strategy for changing the shape and the product of the defence industry. We do not expect him to give us precise details.

Over the past two years I have asked the Minister half a dozen times what the Government are doing as regards the defence industry. The Minister has said that the Government do not wish to interfere in any way and that the matter is best left to the market. We on this side of the House do not think that that state of affairs is good enough. I believe my noble friend Lord Williams talked about 90,000 people being involved in the defence industry. Those people have served the nation well. They are not asking for handouts. They merely want to know in what form the defence industry is to continue. What about the people who are involved in that industry? The phrase "changing swords into ploughshares" has been used half a dozen times. The Government have a responsibility to tell us in what form the defence industry is to continue.

We on this side of the House think that this matter should not be left to market forces or even to suggestions from the Ministry. If we get into government, we shall ensure that we are involved in a positive way in the future of the defence industry. We should like to see the establishment of a defence diversification agency. That body would have the responsibility of assisting workers, communities and companies that were affected by changes in British defence policy. The agency would offer expert technical and marketing advice, channel recommendations on grants and financial aid, help in civil research and development and assist companies to tender for public contracts. Such an agency would be part of the Ministry of Defence. We do not wish to lower our guard in any way and we do not wish to leave this nation bereft of a proper and adequate defensive system. We are merely saying that it would be senseless to engage in producing weapons of war on a grand scale when the threat to this country has diminished and will continue to diminish.

No one political party in Britain can claim, or has the right to assert, that it is more patriotic or a better defender of the realm than any other. We do not make that claim and we would reject any such claim made by others. We in the Labour Party are intent on so managing the affairs of our nation that its security from attack is not in doubt. To do that we accept that in a swiftly changing world we have to be prepared to forge alliances and cement them with all nations and in every way. We shall protect our people from the horrors of modern warfare, but we pledge that we shall spend as much money and energy in preparing for the peace as have been spent on a readiness for war.

We have great respect for the Minister and his colleagues regarding the enormous burden that they carry in their day-to-day supervision of the defence of the nation. We do not envy them that burden. However, we say that if the steady progress towards disarmament is maintained it will be to the credit of all governments, including the present one, and to the next one, which we happen to believe will be a Labour Government.

8.30 p m.

The Earl of Arran

My Lords, perhaps at this stage I may speak to the other Motion standing in my name on the Order Paper? The Army, Air Force and Naval Discipline Acts (Continuation) Order, which was laid before this House on 5th June, will continue the three Service discipline Acts in force for a further year. As your Lordships will be aware, it is a long-established practice for the Services' disciplinary arrangements to be fully reviewed every five years through consideration of an Armed Forces Bill and for the statutory framework to be renewed annually in the intervening years. The last such Bill was in 1986, so your Lordships can expect to have a relatively early opportunity to consider Service disciplinary procedures in depth.

This has been an extremely good debate, consisting of strong and deeply held views, some controversial, others more conciliatory and measured. It has been a debate noted for two very fine maiden speeches by my noble friends Lord Inglewood and Lady Park of Monmouth.

Lord Graham of Edmonton

My Lords, will the noble Earl allow me to intervene? I am slightly confused about procedure? When will it be in order for noble Lords on this side of the House to comment on the discipline order? Is a separate Motion to be put?

The Earl of Arran

Yes, my Lords.

I believe it to be a mark of the particular significance of defence at this time that my noble friends decided to speak in this debate for the first time in your Lordships' House. We hope and trust that their views will he made known with increasing frequency in the future.

It is no surprise that so many of the thoughtful contributions to today's debate should have focused on the changes in Eastern Europe and the Soviet Union and the response to those changes by us in the West. All noble Lords have lived for the greater part of their lives with the Cold War. Many have played important roles as military men or as politicians in guiding the policies of our country and the alliance as we sought to provide a defence capability adequate to meet Warsaw Pact aggression should it manifest itself. The task we face now is the more difficult for being unfamiliar—to usher out the vestiges of the Cold War while maintaining the collective security that has guaranteed our freedom; to bring the countries of the East back into the international community as full members; and to reduce military forces while not putting our security at risk. That was a point which was brought out frequently and strongly on all sides of the House.

I should now like to turn to some of the specific points raised during the debate. Your Lordships will be aware of my inability, due to lack of time, to answer all of the questions that have been raised. I shall answer as many as I can as quickly as I can and on those questions which I have not answered I shall write to noble Lords.

First, I shall take the points raised by the noble Lord, Lord Williams of Elvel. He asked whether there would be coherence of policy following the options announcement. I can assure him that there will be a completely coherent defence policy. That is why an announcement cannot and must not be rushed. The options for change study is complex and important and, as I have already said, deserves careful consideration since the future size and structure of our Armed Forces will evolve from the study. The cuts recently announced are not directly related to work on the options for change study, although the picture emerging from the study has been taken into account wherever possible. The difficult decisions have to be made in determining how to deal with a large overspend for this year of some £600 million.

Lord Williams of Elvel

My Lords, before the noble Earl continues perhaps I may ask him whether he accepts the point made by the noble and gallant Lord, Lord Hill-Norton, that this is in fact a defence review. If it is a defence review why do the Government not say so?

The Earl of Arran

My Lords, I dispute the point made by the noble and gallant Lord, Lord Hill-Norton, that it is a defence review. As I have frequently said in your Lordships' House, it is a study of options for changes in policy in the light of the warming of the situation in Eastern Europe; that is what is driving us in that direction and not a need to find more money.

The third point raised by the noble Lord, Lord Williams of Elvel, which was also mentioned by the noble Lord, Lord Graham, concerned defence contractors. This is where the Government part company with the Opposition. The Government believe in allowing management in industry the freedom to use its commercial judgment in deciding what market to operate in. The Government do not intend to direct industry into any particular market. That is a matter for the commercial judgment of the companies involved. When the options for change study has been completed we shall inform industry and welcome its views. At the moment, however, it is too early to say what the implications for industry will be.

The noble Lord, Lord Mayhew, asked whether there was a future for NATO and whether there was a need for the alliance. The noble Lord correctly recognised that the Conference on Security and Co-operation in Europe is no substitute for NATO. However, he also proposed the development of the Western European Union into a defence community parallel to the EC. The WEU is certainly an admirable organisation, and that was a point made by the noble and gallant Lord, Lord Carver. It is a useful forum for debate at a time of great change and has scored some notable successes in the field of practical defence co-operation—minesweeping in the Gulf, for example. NATO's success has been founded in large measure on the North Atlantic connection. We are certain that continued security and stability can be guaranteed in Europe only by the maintenance of that connection. We therefore see a role for NATO not only into a transitional period but for the foreseeable future.

My noble friend Lady Park of Monmouth, who, as I said, made an extremely interesting and thoughtful maiden speech, is quite right in saying that the Soviet Union, even after the reductions in conventional forces envisaged in CFE, will remain a formidable military power. We are also aware that many in the Soviet armed forces are less than content with President Gorbachev's reform programme. Those are persuasive arguments in favour of a continued role for NATO as a guarantor of peace and stability in Europe. No one would deny, however, that there are more grounds for optimism now than there have been for many years. NATO will play its role in seeking to fulfil that optimism.

The noble and gallant Lord, Lord Bramall, made a typically robust speech. There were some points with which I tended to agree and others with which I did not agree. I can say to the noble and gallant Lord that it is too early to say anything about the future number and size of regiments. I am sure that he will understand that point. I can, however, give him an assurance that the regimental system will be retained since it preserves that fine and valuable regimental esprit de corps.

The noble and gallant Lord raised two points concerning housing and pay. I do not agree that our recent record on pay and housing has not been good. Perhaps I may dwell for a short time on both of those points. Since 1979 pay has been increased in line with the recommendations of the Armed Forces Pay Review Body, albeit with occasional staging as in the current year. We believe that the independence of the review body and our record in implementing its recommendations provide service personnel with the best possible assurance that their pay will continue to be determined fairly and will remain competitive.

With regard to service housing issues, I say very firmly that we continue to look always positively and imaginatively at a range of potential solutions to the problems of home ownership and housing for service personnel. A number of recent initiatives have been taken designed to assist both the existing home owner and the prospective house purchaser currently living in service accommodation. For instance, advances of pay for Navy personnel to assist with house purchase have been more than doubled this year. Allowances to help home owners who are required to move house on posting have been extended to all personnel aged 25 and over. Other regulations have been changed to make it easier for longer serving married personnel in the Army and the RAF to maintain a stable family home while living unaccompanied in the mess.

A joint MOD-Housing Corporation group has been established to examine a range of options involving housing associations in the provision of housing for service personnel, including those leaving the services. These initiatives will augment longer established schemes.

However, we are not complacent. We recognise that considerable concern is felt by service personnel and their families and the damage that this can do to our efforts to improve the retention of experienced and expensively trained personnel. Therefore we are continuing to look for ways in which to help them reconcile their aspirations towards home ownership with the high degree of mobility that the services require.

If I may say so, on this first occasion my noble friend Lord Inglewood made a most reflective and positive speech, demonstrating considerable knowledge of defence with strong but nevertheless non-controversial views. The noble Lord's experience in Germany is heartening. The historic agreement on German membership of NATO reached by Chancellor Kohl and President Gorbachev will no doubt be welcomed by him as it is welcomed by us all. For the transitional period during which Soviet forces will be present in the territory of the GDR we agree that forces assigned to NATO should not be based in the East.

However, in order to avoid drawing a distinction between parts of Germany in terms of guarantees offered, Articles 5 and 6 of the North Atlantic Treaty should apply to the whole of a United Germany.

I turn to my noble friend Lord Pym. I can assure him, as I said recently—I was questioned on this matter by the noble Lord, Lord Williams—that the Options for Change study is being driven by policy considerations and not by funding requirements. My noble friend also spoke at some length on the CSCE, which will have an important role to play in future European security structures. I remind my noble friend that my right honourable friend the Prime Minister has outlined United Kingdom objectives for the CSCE summit.

I shall mention four of those objectives: agreement to a set of principles governing the rule of law and human rights specifically enshrining the UK-US proposal on free elections; meetings of the 35 at Foreign Minister level to take place twice a year with agreement to a procedure for convening extraordinary meetings in times of tension or crisis; encouragement of the development of a conciliation role for the CSCE in the settlement of disputes; the reaffirmation by the summit of the Helsinki Final Act's commitments on the inviolability of European borders.

Any future European architecture must provide for multilateral consultation, preserve links with North America and avoid isolating the Soviet Union. As I have said several times before, CSCE cannot substitute for NATO, which will therefore continue to play an essential role in security underpinning stability.

The noble Lord, Lord Hatch of Lusby, was worried about the conversion of the defence industry from arms production to other products. As I said, this is a matter for the companies themselves. The Government believe that the managements of companies are best placed to make such judgments for their employees and shareholders.

My noble friend Lord Holderness spoke with deep feeling and passion about the TA. He will understand that it is too early to say what our plans are for the future of the TA. However, we are confident that TA volunteers will be able to rise to the challenge posed by new battlefield conditions. The TA, along with the reserves of the other services, will continue to make a central contribution towards our defence capability but it is too early to say in what capacity until Options for Change has been announced. I shall consider seriously what my noble friend said this evening.

We consider that the TA is securing a respectable share of the available manpower. A wide variety of measures are being employed to secure improvements in recruitment and, above all, in retention. In addition to improving the quality of training, we have introduced a number of initiatives aimed at improving terms and conditions of service.

The noble and gallant Lord, Lord Carver, talked about NATO. Certainly we welcome his firm support for NATO as the cornerstone of our security in these current times of uncertainty. But we see the continuing need far significant US forces in Europe for the foreseeable future. We see an expanding role for CSCE but, as my right honourable friend the Prime Minister made clear, it will be supplementary to NATO and not a replacement for it. NATO has successfully preserved our security for 40 years. It would be precipitate folly to abandon it now.

The noble Viscount, Lord Ridley, spoke of the cadet force. I welcome his valuable comments and the suggestions that he made about the volunteers. We shall consider seriously the various points that he made. As the noble Viscount forcefully stressed, the cadets are a valuable element both in providing future Armed Services manpower and in instilling the values of duty and concern for others in those who join the cadet forces.

My noble friend Lord Glenarthur asked about the 24 Airmobile Brigade and the confirmation orders for 25 utility EH1O1s. We have already announced our intention to order an initial batch of 25 aircraft, subject to the resolution of contractual and other issues. In accordance with normal procurement practice we are considering all appropriate helicopter types and combinations of types to determine whether the utility version of the EH1O1 continues to represent the most cost effective solution. We are now analysing the results of project definition work done so far. It is taking longer than expected because we need to take into account the implications of change in Europe.

As regards a light attack helicopter, it is too early to say which helicopter we shall select. With our partners we have conducted feasibility and cost definition studies into the possible development of the Agnota A129. We are also conducting a full evaluation of other options before making any commitment. As regards manning, our present plans are that the helicopter should be flown by the Army Air Corps.

The noble Lord, Lord Jenkins, whose views on nuclear matters are well known, talked about the nuclear non-proliferation treaty and asked whether the Government were changing their stance towards the NPT. We are not. Since the US and the Soviet Union possess between them the vast majority of the world's nuclear weapons, prime negotiating responsibility falls to them. We fully support their efforts to achieve cuts in strategic nuclear arsenals.

Then we look forward to the successful completion of the withdrawal of an entire class of nuclear weapons—intermediate nuclear forces—by June next year. NATO has expressed its willingness to start negotiations on short range nuclear forces after a treaty on conventional forces in Europe is signed.

There are solid practical steps on which we must build rather than rushing to the Utopian vision of general and complete disarmament. Progress must be on a step-by-step basis, taking account of the world as we find it, not as we would wish it to be.

Lord Jenkins of Putney

My Lords, would the noble Earl be so good as to say a word about the comprehensive test ban treaty? As he knows, we already support a partial test ban treaty but one hopes that we are now ready to move forward to a comprehensive test ban treaty if one is proposed by the Soviet Union with suitable verification on both sides.

The Earl of Arran

My Lords, perhaps I could come to that in a moment. I am dealing with that issue under a point raised by another noble Lord.

My noble friend Lady Strange—who told me that she had to leave early—asked several questions. I wish to reply to one point concerning women in the Armed Forces. The women's services make an invaluable contribution to the Armed Forces. Women are employed in a very wide range of duties. The RAF has widened the role of women to include employment as air crew in non-combat roles and major studies by the Royal Navy and the Army will result in a further broadening of employment opportunities for women in these Services.

I am grateful to the noble and gallant Lord, Lord Hill-Norton, for pointing out that NATO has always had a political dimension. As I said earlier, we see the alliance building on that in the future while continuing to preserve our security.

The noble and gallant Lord also asked about the position on the EH 101 Merlin. Several companies have expressed interest in tendering for the Merlin contract. Bids for the prime contract are being invited this month. We expect the main contract to be placed in mid-1991.

My noble friend Lord Fortescue asked about the quality of armour, gun and mechanical reliability. I can assure him that we are fully aware of the need to ensure a proper combination of protection, fire power and mobility so that we can deal with the best in a potential adversary's infantry.

My noble friend Lord Lyell asked about the Royal Naval Reserve. I can confirm that the number is about 31,000. The role of the reserve forces is governed by the Reserve Forces Act 1980 and their peacetime training must be related to their wartime role. The Royal Naval Reserve plays an important role in reinforcing our regular forces as well as providing maritime home defences by carrying out mine counter-measure tasks and defending key ports and anchorages against attack.

My noble friend also expressed his continuing and enduring gratitude to the UDR. We totally and completely agree with that. Perhaps I may point out that the honours awarded to Service personnel in Northern Ireland during 1989 reflect that bravery. Of 184 awards for gallantry or meritorious conduct, 29 were for the UDR.

The noble Lord, Lord Gladwyn, was concerned over the question of flexible response. As the London Declaration issued after the NATO summit made clear, the fundamental alliance strategy and the Harmel policies of dialogue and defence remain valid, although they are now being adjusted to meet the new circumstances. For example, we shall move away from forward defence where appropriate to a reduced forward presence, with greater emphasis on smaller and more mobile and flexible active forces and on multi-nationality.

My noble friend Lord Ironside was concerned about AOR. I can tell him that we originally expected the first of the new auxiliary oiler replenishment AOR vessels to be delivered this year. Following delays by the shipbuilders we currently expect delivery in 1991. Further AOR orders are planned but no decisions have yet been made with regard to their size or timing.

My noble friend also mentioned new management strategy. The Government place extreme importance on that. It is all about accountability at a lower level.

The noble Lord, Lord Rea, had the same concerns as the noble Lord, Lord Jenkins. We welcome the recent signature by the US and the Soviet Union of verification protocols for the threshold test ban treaty and peaceful nuclear explosions treaty. That is the point that I wished to make to the noble Lord, Lord Jenkins. So long as our security depends in part on the possession of nuclear weapons, there remains a continuing need to test them to make sure that they are effective and safe. A comprehensive test ban treaty must therefore remain a long-term goal.

My noble friend Lord Mottistone had the same worries as the noble Lord, Lord Mayhew. He also expressed his desire for the continuity of NATO, with which we completely agree.

The noble Lord, Lord Graham of Edmonton, mentioned the state of the merchant fleet. That raises a number of difficult issues. If your Lordships are agreeable, I shall write to him on that point. The noble Lord continued for some time about an arms conversion agency. I have to say to him again that we are not in agreement with those on his Benches on that point.

The division of Europe is ending. The dictatorships of the past have crumbled or been overthrown. There is a brighter future in prospect where democracy and freedom extend from the Atlantic into the Soviet Union. A great deal of the credit for this situation can be ascribed to President Gorbachev. Credit is also due to the people of Eastern Europe who had the courage and determination to stand up to the hard-line regime and tell it its time had come; and credit is due to the Western allies, who were prepared to stand together and stand firm against attempts, both internal and external, to deflect us from a course of maintaining strong defences while extending the hand of friendship to the East—an approach which promises to bear so much fruit not only for our people but for those of Eastern Europe and the Soviet Union as well.

Much painstaking work remains to be done to turn our current opportunities into reality. Unbridled optimism alone will not create a safer and freer Europe. Peace can be a fragile thing so we need to provide it with structural strength to enable it to withstand the strains to which it will inevitably be subject. Our optimism must be tempered with realism and the good sense to build on our strengths rather than discard those institutions that have served us so well. By doing so we can tread a careful path, avoiding any cul-de-sacs. A very promising start has been made on the road towards one free and secure Europe and we look forward to significant early progress towards our objectives. I commend the Motion to your Lordships.

Lord Hatch of Lusby

My Lords, before the noble Earl sits down, will he clarify the answer that he gave me? He said that the Government will not interfere in the commercial interests. Does that indicate that they will continue to support the export of armaments from firms in this country?

The Earl of Arran

My Lords, that is a matter that is coming under Options for Change. All aspects that the noble Lord mentions are being currently investigated and will be duly made known.

On Question, Motion agreed to.