HL Deb 08 December 1994 vol 559 cc1017-9

3.28 p.m.

Lord Williams of Elvel asked Her Majesty's Government:

On what basis they justify defence cuts of £2.5 billion (in constant prices) between 1993–94 and 1997–98 as announced in a "note to editors" accompanying the Budget Statement of 29th November.

The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Henley)

My Lords, the 1994 settlement is sufficient to maintain in full the front-line force structures set out in the 1993 and 1994 Defence White Papers. The reductions in the defence budget over this period principally reflect implementation of the final stages of the Options for Change restructuring programme; expected savings from the implementation of Front Line First and the effects of efficiency improvements.

Lord Williams of Elvel

My Lords, I am grateful to the noble Lord, in so far as I can be, for that Answer. Can he confirm that comparing like with like there will be a cut of approximately one-tenth in the defence budget? In fact, in real terms it is slightly over one-tenth. It will go down by 3 per cent. next year, 6.5 per cent. the year after, 1.5 per cent. the year after that and so forth. Is that consistent with what the Secretary of State said to the Conservative Party Conference?

Lord Henley

Yes, my Lords, it is entirely consistent. As I made clear, those were not new announcements, as the noble Lord seems to be implying. They result from Options for Change, the Defence Costs Study and other such reviews. The new plans show a cost programme reducing in real terms by some 11 per cent. I can assure the noble Lord that last year's press release showed a very, very similar reduction. It is, in fact, nothing new.

Lord Ewing of Kirkford

My Lords, these figures contain the belief within the Government that the tender price offered by Devonport for the refitting of Trident submarines will be met. It now seems absolutely clear that there is no stability in the docking facilities at Devonport and that substantial sums of money, running into many millions of pounds, will have to be spent to stabilise the facilities. There are also other serious defects in the facilities at Devonport. Who will have to pay these additional sums of money? Would it not make more sense, even at this date, to transfer the refitting of the Trident submarine fleet from Devonport to where it should have been in the first place, Rosyth?

Lord Henley

My Lords, the noble Lord will understand if I do not allow myself to be drawn into quite such detail on the question of Rosyth. However, I can give him an assurance that my right honourable friend will be answering a question on that subject later today.

Lord Howell

My Lords, is it not the case that, when the Secretary of State for Defence and the Prime Minister made statements to the Conservative Party Conference that there would be no further cuts in defence, they must have known that these further cuts which had not been announced were in preparation for the Budget, one month later in November? Why did that take place? Does the Minister realise that the justification for the change on page 121 of the Red Book is that it is to meet military redundancies and to enhance our front line situation, both of which any normal person would think would require an increase in defence expenditure and not a reduction?

Lord Henley

My Lords, I can assure the noble Lord in no uncertain terms that I have not been misleading the House in saying that these were not new cuts. The reductions were announced in last year's Budget. In fact the 1994 settlement is worth around £220 million more in 1995–96 and £310 million more in 1996–97 than the previous plans allowed. The cash reductions for 1995–96 and 1996–97—some £300 million and £200 million—are more than compensated for by the fall in inflation, which no doubt the noble Lord welcomes. I can assure him that when my right honourable friend the Prime Minister and my right honourable friend the Secretary of State for Defence made their remarks about the need for a further period of stability they knew that we had sufficient resources in this settlement to sustain the range of front-line capabilities described in the recent statements on the Defence Estimates.

Lord Jenkins of Putney

My Lords, is the noble Lord aware that if the Government were to give up Trident they could save much more money than this? There need be no personnel discussions. They could even have more military bands.

Lord Henley

My Lords, we have no intention of giving up Trident. I do not know what the views of the party opposite are but I am very interested to hear the noble Lord's views.

Lord Williams of Elvel

My Lords, does the noble Lord recall that when we debated what was known as Front Line First your Lordships were assured that the savings coming from Front Line First through more efficient administration would go towards the procurement of weapons for the front line? We were assured by no less a person than the present Leader of the House. In the light of the figures which appear to have been slipped out in an appendix to an appendix to an appendix to the Budget Statement, can the noble Lord explain why they told us that the savings from Front Line First were to be used for front-line equipment?

Lord Henley

My Lords, I am sorry but I think that this is entirely unacceptable. The noble Lord is accusing us of what amounts to dishonesty by saying that we were announcing new cuts. We were not. We were repeating the same announcements that we had made in previous years. As my noble friend the Leader of the House said on the occasion of the announcement of the Defence Costs Study—Front Line First—the new plans will mark an end in the upheaval of defence, they will preserve all the front-line capabilities necessary and they will fund necessary enhancements in the equipment programme.