Defence Budgets: Future (Hansard, 25 June 1990)

§ The Earl of Arran
My Lords, while we anticipate opportunities for reductions in some areas, it is too early to say what financial savings might be consistent with the outcome of the first stage of CFE and changes in Eastern Europe. We remain resolved to sustain modern and well equipped forces adequate for our security needs and we shall provide the necessary resources for that purpose.

§ Lord Graham of Edmonton
My Lords, I am grateful to the Minister for that Answer. Is he aware that the Bush Administration have announced that they intend to seek a 25 per cent. reduction in their defence expenditure over the next five years? When does he anticipate the Defence Review Options for Change being completed? To what extent does our expenditure on defence compare with expenditure by our European allies, particularly France and Germany?

§ The Earl of Arran
My Lords, I shall take the third part of the noble Lord's question first. Our expenditure as a proportion of GDP is 4 per cent. Concerning the first part of the noble Lord's question, I am aware of what President Bush has recently said. On the second question about when the conclusions of Options for Change will be delivered, the noble Lord knows full well that that is an exacting task which has many problems attached to it. More than 300,000 members of our armed forces are involved. It concerns a budget of some £21 billion. Such a background necessitates very careful consideration.

§ Lord Thorneycroft
My Lords, in the light of the unstable world in which we live, does the Minister agree that any government would require a crystal ball to answer the Question on the Order Paper?

§ The Earl of Arran
Yes, my Lords, I entirely agree with my noble friend. I am trying to see through that crystal ball.

§ Lord Mellish
My Lords, the Minister will be aware that with the change in the European situation in particular there appears to be an opportunity for financial savings on defence. However, does he recognise it is because this country had the sense to hold on to its armaments under both Labour and Conservative Governments that we have been able to contribute to the peace of the world over the past 50 years? Can he give me an assurance that savings will not be at the expense of making Britain a third rate power?

§ The Earl of Arran
My Lords, I most hastily give the noble Lord that assurance. Our aim is to sustain modern and well-equipped forces at all times.

§ Lord Cledwyn of Penrhos
My Lords, can the noble Earl confirm that our defence expenditure—whether it is to be increased or decreased—is not decided upon in isolation? To what extent are discussions taking place with our NATO allies—specifically with the United States—on this point? Will the amount by which they decide to decrease their defence expenditure influence our decisions?

§ The Earl of Arran
My Lords, the extent of our defence expenditure will be determined in the light of the current CFE talks. In considering precisely what reductions in arms and armaments will be necessary in this country, of course our NATO allies are consulted and their views taken into consideration.

§ Lord Molloy
My Lords, in so far as we have with our NATO allies entered into many agreements with the Soviet Union on arms reduction, does the noble Earl agree with this point? We should in no way bring about a reduction unless, first, it is done in collaboration with our NATO allies; and, secondly, what the Soviet Union says it is doing in reducing arms is subject to complete verification by Britain and her NATO allies.

§ The Earl of Arran
Yes, my Lords, that is certainly true, and it is part of the whole process of verification.

§ Lord Mayhew
My Lords, does the noble Earl agree on reflection that despite the views of some noble Lords opposite, it is not helpful or realistic to describe the Soviet threat to this country as alarming?

§ The Earl of Arran
My Lords, I thought that I had made it clear to the noble Lord what I meant by that: the Soviet Union continues to produce arms at a significantly high rate.

§ Lord Beloff
My Lords, does my noble friend agree that, although there may well be a prospect of serious arms reductions on the part of the United States, the form that those reductions might take could mean greater calls rather than lesser calls on the armaments of Britain and her European allies?

§ The Earl of Arran
My Lords, my noble friend makes a very good point.

§ Lord Richard
My Lords, may I press the Minister a little more on a point that I put to him on an earlier Question on the Order Paper? Of course defence reviews are exacting. Of course they have to be undertaken—

Noble Lords
Question!

§ Lord Richard
My Lords, is the Minister aware that we accept that defence reviews are exacting? Is he further aware that we accept that matters have to be gone into in great detail? But can he not be just a little more forthcoming on this point? A good many people are dependent on decisions which the Government are to make. Can he say whether the defence review will be completed in a matter of weeks or months; or will we have to wait for years for it?

§ The Earl of Arran
No, my Lords, I cannot say whether it will be a matter of weeks or months. As soon as we are able sensibly to determine what the future size and structure will be, so much the better. In the meantime, from the armed forces point of view, it is regrettably true that we live somewhat in a state of uncertainty. But the armed forces fully understand the circumstances and would much prefer that we made a good and sensible decision than responded with knee jerk reactions.

§ Lord Carver
My Lords, can the noble Earl say whether the Options for Change study is being 1273 conducted solely within the Ministry of Defence or is it an inter-departmental study which includes the Treasury and the Foreign Office:

§ The Earl of Arran
My Lords, it is being conducted with those who are thought to be appropriate to determine future circumstances—that is, mostly with the Ministry of Defence.