Defence Estimates

HL Deb 12 July 1996 vol 574 cc533-95

11.5 a.m.

The Parliamentary Under-Secretary of State, Ministry of Defence (Earl Howe) rose to move, That this House take note of the Statement on the Defence Estimates 1996 (Cm 3223).

The noble Earl said: My Lords, it is a privilege for me, on behalf of Her Majesty's Government, to open this annual debate on the Statement on the Defence Estimates. I look forward to an informed and stimulating discussion and have no doubt that the debate will live up to its usual high standards.

When I spoke in your Lordships' House last year, I began by pointing out something which bears repeating. The world has changed dramatically in the past decade. The risk of global war is low. It is true, I think, to say we are safer now than we have been for several generations. But some things will always stay the same. The things that motivate people to violence will not change. The causes of conflict will continue to exist. Of course, they may take new forms. But access to natural resources, territorial disputes, nationalism, religion, ideology—all will retain their power to plunge us into conflict. In the increasingly inter-connected world in which we live, there is the increased potential for conflict to spread and for conflict and suffering to be shown nightly on our television screens. So we should not delude ourselves that we are moving to a brave new world of peace and harmony. While we have seen enormous progress in recent years, unrest and instability will always be with us.

Britain cannot isolate herself from these challenges, for we have interests and responsibilities across the globe. Our prosperity and well-being depend on stability. So even against a changing strategic setting, our interests are unlikely to change: the defence of our territory and that of our allies; promoting the spread of stabilising factors such as liberal democracy, in the belief that their spread will create the conditions in which we can best pursue our economic, trading and social interests; and averting or containing conflict that might challenge our interests.

We have set out in the White Paper our clear belief that these interests are best promoted by the use of a wide range of political, trade and cultural as well as military tools. The consequence of this, and of the changes in the strategic setting, is that our Armed Forces are deployed on a broader range of tasks to promote our interests than at any time in the past 50 years. This is the first of the three main themes of this year's White Paper.

I should like first to mention some current operations and other successful tasks accomplished in the past year; and to pay tribute to the achievements of our Armed Forces.

In recent days, there has been ample, if unwelcome, evidence of the fact that Northern Ireland is the Armed Forces' largest operational peacetime commitment. Approximately 17,500 service men and women are currently deployed in Northern Ireland; and we are currently in the process of reinforcing them with further units.

I was particularly pleased to have had the opportunity to see all three services in action in Northern Ireland earlier this year, and to appreciate at first hand the important work which they continue to do. In the uncertain and delicate circumstances which currently prevail in Northern Ireland, I was especially impressed by the professionalism and sensitivity with which members of all our Armed Forces continue to carry out their duties.

Events this week in Drumcree and the civil unrest which has broken out sporadically across Northern Ireland, together with the recent PIRA attacks in London, Manchester and Osnabrück, show that the future is far from certain. But let me make clear that the safety of the people of Northern Ireland is paramount. Our forces will remain at whatever level is required to support the RUC in the maintenance of law and order and countering terrorism.

In the former Yugoslavia, our Armed Forces continue to serve with distinction, as they have done since 1992. They are making a tremendous contribution to the success of IFOR in implementing the peace agreement. With some 10,500 forces involved in the IFOR operation, we are the second largest contingent after the United States.

Most British personnel are in Multi-National Division South West. This British-led division has successfully presided over the largest transfer of land under the peace agreement. The divisional headquarters has transferred to Banja Luka to reinforce IFOR' s even-handedness and further stabilise the situation on the ground.

Building on the successful approach of our UNPROFOR contingents before them, British forces are performing splendid work at the local level. Besides implementing the peace agreement, ensuring freedom of movement and providing security, they are building up civilian confidence on all sides. British forces are helping to solve local problems and are undertaking many local projects—often in close co-operation with the Overseas Development Agency—to help restore normal life.

The overall land operation is being most ably led by Headquarters Allied Command Europe Rapid Reaction Corps which is largely British-manned and is commanded by Lieutenant-General Sir Michael Walker. The headquarters' performance, in its first operation, is a source of great satisfaction to the UK and to NATO allies working alongside us.

Peacekeeping missions have become established as an invaluable instrument of the international community. We continue to make direct contributions to operations under United Nations auspices. Today, British personnel are contributing to UN missions in Cyprus, Georgia, Angola and on the Iraq/Kuwait border, and in support of Security Council resolutions over Iraq. For the UN itself, we provide military officers with specific expertise to several areas of the headquarters in New York to assist in the management of operations. During 1995 we undertook a particularly successful deployment in Angola, a battalion providing logistic support for the establishment phase of the UN Angola verification mission.

This has been only a brief résumé. But it shows that it has been another busy year for our Armed Forces. And it demonstrates their continuing achievements. Wherever they have served, our servicemen and women have demonstrated the virtues of initiative, determination and discipline that are the hallmark of the British Armed Forces and which have made them admired and respected around the world.

The achievements of our Armed Forces are built on, and draw from, the successful changes made to our policies, plans and force structures since the fall of the Berlin Wall. This is the second theme of the White Paper.

Our security and defence policies remain rooted in assessments of our national interests, and of how those interests can best be promoted, in conjunction with our allies and partners. We believe that NATO is, and will remain, the linchpin of European defence arrangements. The further adaptation of the NATO alliance has been an initiative strongly supported by the United Kingdom.

We were delighted with the successful outcome of the meeting of NATO Foreign Ministers at the end of May where our view prevailed. That meeting agreed that the so-called European security and defence identity should be built within rather than outside NATO as the alliance continues to adapt to meet the demands of the changed strategic setting, including preparing for peacekeeping and humanitarian operations and for eventual enlargement.

The decision was aided by the courageous decisions taken by President Chirac to adapt a number of areas of French defence policy. We are now taking forward work to put in place suitable arrangements to allow the Europeans, acting within the Western European Union, to draw on NATO assets and capabilities in mounting small-scale missions in future. Implementation of NATO's combined joint task force concept will be the key to this.

The Government firmly believe that the United Kingdom has adapted its policies and plans to the changed strategic setting better than most of our allies. We are now reaping the benefit. We have a smaller force structure than that which we maintained during the Cold War but one which is better able to respond to the demands of the changed security environment. We have capitalised on decisions to sustain flexible and highly capable forces. In particular, we have invested in mobility, deployability and rapid reaction.

It is these capabilities that have enabled the United Kingdom to become the framework nation of the Allied Command Europe Rapid Reaction Corps, now playing such a successful role in Bosnia. As such, we continue to be firmly positioned at the centre of NATO's European defence arrangements.

Two particular initiatives which come to fruition this year are the permanent joint headquarters in Northwood and the joint rapid deployment force (JRDF). Both will enable us to be more proactive in our approach to developing crises and problems around the world.

The PJHQ will enhance our ability to plan for, and to execute, joint operations. The fact that the PJHQ is permanent will also allow it to develop a wealth of experience that leaves it well placed to act as a centre of joint excellence. It will be a focus for the further development of aspects of our joint military capability such as joint tactics and procedures.

Over the past few months the PJHQ has undergone an intensive period of testing and validation. In May it successfully participated in the UK/US Exercise Purple Star, and over the last two weeks it has been taking part in another challenging exercise, Exercise Purple Viva. This exercise has been the final test of the PJHQ abilities before it takes over responsibilities for live operations. The exercise ended yesterday and I am delighted to announce that the PJHQ has successfully demonstrated that it is fully capable of assuming these weighty responsibilities. The PJHQ will become fully operational on 1st August. It will then begin progressively to take over responsibility for operations in the Middle East and Bosnia as well as any new operations.

The JRDF will also become operational on 1st August and will improve our ability to undertake a wide range of short notice missions in future. The permanent core of the JRDF will be based on 3 Commando Brigade and 5 Airborne Brigade with further elements being drawn from a range of assigned units from across all three services. This will allow the permanent joint headquarters to draw upon the JRDF to assemble a force carefully tailored to the needs of each particular operation.

The third theme of this year's White Paper is our continuing drive to achieve value-for-money in defence and to concentrate resources on the front line and on the support to the front line.

Strong defence does of course come at a cost. We, in turn, are determined to get the most out of every penny spent on defence. We have an excellent record of achievement to date. The Defence Costs Study was a huge success and enabled us to make large savings while maintaining—and in some cases increasing—our investment in the front line. The implementation of the many recommendations of the study is a major challenge for the department. But we are well on track to achieving both the projected implementation dates and savings. Indeed, by the end of the decade we shall be achieving annual savings in excess of £1 billion. These are in addition to annual savings of around £3 billion already generated by the department's efficiency programme, which has been running since 1988.

We will continue to build on the principle of the Defence Costs Study, which is that any activity which does not add value and cannot be shown to be necessary to the ultimate delivery of front-line capability should not be done. The substantial savings achieved have enabled us to plan to continue to devote an increasing proportion of the defence budget to equipment. Around 40 per cent. of this year's defence budget will be spent on equipment. That is a marked increase on the proportion spent four years ago, and we expect the proportion to continue to rise in future as the measures that we have put in place to achieve value for money in defence take effect.

Let me briefly remind your Lordships about the projects that we have in hand. For the Navy, recent orders have been placed for Tomahawk land attack missiles, and a further three Type-23 frigates. We have signed international agreements for the common new generation frigate. We are participating with the United States in a technology demonstrator programme to assess options for a possible successor to the Sea Harrier. We are in negotiation with industry on a number of other projects, including helicopters and missiles for the Army and for the Air Force. All that shows that this Government's commitment to maintaining well equipped Armed Forces is undiminished.

This year's Statement on the Defence Estimates underlines our clear view of Britain's commitments and responsibilities in the world, and the successful development of our defence policies. We are determined that our forces should be fully capable of undertaking the commitments that we ask of them, and are adequately resourced to do so.

We are committed to maintaining the capability of the front line and where possible enhancing it. Our very large investment in equipment over the past 15 years translates today into formidable power on the ground, at sea and in the air. Our forces have never been better equipped.

But I want to conclude as I started—with our people. The distinction and professionalism with which our servicemen and women have carried out the wide range of tasks that they undertake throughout the world are as much a source of pride as they have ever been. It is on their shoulders that our hopes and aspirations rest. We owe them a great debt. I beg to move.

Moved, That this House take note of the Statement on the Defence Estimates 1996 (Cm 3223).—(Earl Howe.)

11.22 a.m.

Lord Williams of Elvel

My Lords, the House will be grateful to the noble Earl for introducing this debate. I imagine that some of your Lordships may feel a certain irritation that the House's annual debate on the Defence Estimates, which is, by general consensus, as the noble Earl said, a debate on what I might call the state of the nation in defence terms, has now been reduced to a relatively short exchange on a Friday just before the Long Recess. Your Lordships will be aware that I put that point of view through the usual channels, but, I am afraid, without success. All I can say is that the Government have the final say in the matter, since it is their Motion and their document that we are debating, but I personally would have thought that the annual review of the defence of the United Kingdom and the state of our international defence relationships deserves somewhat greater attention from your Lordships than a mid-July Friday morning and early afternoon. At least, I hope that we shall be spared a repeat of yesterday's charade, which was described by The Times this morning as: An Iolanthe-style parade of hereditary Peers". They will not come out on a Friday, my Lords. But there it is, and we have to do our best in the time allotted to us. In order not to trespass too far on your Lordships' patience just before a summer weekend, if your Lordships will allow me I propose to deal with no more than three matters, each in their own way distinct but interrelated, and leave other subjects to my noble friend Lord Howell who will wind up from these Benches.

The first is a matter which may, I am afraid, be familiar to your Lordships but which cannot in my view be too frequently restated. I refer to what seems to me and others to be the failures over the years of Ministers, who appear—I use the word "appear" for lack of a better one—to be in some sort of charge of the Ministry of Defence. Quite how Ministers will wish to shuffle off the blame for a series of financial failures on to the backs of civil servants (who, of course, have no right of reply in either House) is for them to decide. But I should be surprised and rather critical if the noble Earl, when he comes to wind up the debate and answer these points, tries to evade the essential responsibility of Ministers. After all, it is they who are responsible to Parliament and to the country for the conduct and efficiency of their department and nothing—no fine phrases, or even, as I understand it, anonymous letters from consultants—can persuade me to the contrary.

The second matter is again the general question of how far what I would call "the balance of our defence"—the matching of resources to commitments—is in any kind of reasonable equilibrium; in other words, whether the problem of what is known in the jargon as "overstretch" is now behind us or still with us. In passing, it will not have escaped your Lordships' attention that there are well informed leaks that the Treasury is demanding a further £400 million of cuts in the defence budget in the next financial year. Like me, your Lordships will wish to measure those intentions against the published views of Ministers, including the Prime Minister. To quote what the Prime Minister said at the Conservative Party Conference in October 1994: the big upheavals in our armed forces are over". I shall be moving into that territory a little later.

The third matter deals with the question of what happens now. What happens now will depend, of course, on what happens when the political complexion of the Government changes, which will happen at any time within a year or so from now. I should be failing in my duty if I did not give your Lordships an idea of what an incoming Labour government intend and of the rather different approach that we propose to the defence needs of the country.

Let me look at the first matter that I mentioned, in other words, the record of what is popularly known as the "Ministry of Waste". To put the matter in its proper context, your Lordships may wish to know, for instance, that the National Audit Office reports that 23 of the MoD's 25 largest projects have seen collective cost overruns of some £650 million. It goes on to report that 90 per cent. of those projects failed to reach their planned in-service dates, with average slippage of 3.1 years. Five of the projects were delivered five years late. The Eurofighter 2000 is now well over £2 billion above budget. It is also running well behind schedule, as a result of which the operational life of the Tornado F3 and the Jaguar have had to be extended, at a cost of more than £100 million. There has been, in the words of the House of Commons Public Accounts Committee, "mismanagement on a grand scale" of the re-equipping and expansion of the Trident submarine base at Faslane. We are further told, on reasonable authority, that after the enormously expensive refits of ships, such as HMS "Renown", HMS "Andromeda", HMS "Battleaxe" and others, they have been sold off at a loss; and that, furthermore—a much more serious point—many ships of the Royal Navy are still not fit to go to sea, let alone engage in action against a potential enemy. So it goes on. It is not a happy story. To cap it all, the National Audit Office tells us that the Ministry of Defence has lost 205 works of art lent to it from the Government's art collection. It is not a happy story. Yet, despite all that bungling, at the Conservative Party Conference last year the Secretary of State felt able to claim—I use his own words— every day, every week, every month, we will convert waste into weapons". However much I wish to give the Secretary of State the benefit of the doubt, I am afraid that he was wrong, since the truth is that he and his predecessors have been busy converting not waste into weapons but weapons into waste.

Nevertheless, given the history of mismanagement of defence procurement, that might all be tolerated, or indeed condoned, if the taxpayers' money so squandered had led to the preservation of our defence industrial base. In fact, and again I have to tell your Lordships the truth of the matter, the opposite has happened. More than 345,000 jobs in the defence and defence-related industry have vanished since 1980. In the face of this there has been no form of assistance or encouragement from the Government to facilitate the diversification by the companies affected into other markets and other products, to use productively the advanced technological expertise which they, and particularly their employees, have developed in the defence equipment industry.

I take the view that defence contractors are one of our greatest industrial strengths. The industry, even after the cuts, still sustains nearly 400,000 jobs. With annual exports of some £5 billion our success is second only to the United States. And yet, in this high-tech and high-value added sector, the industry's share of manufacturing output has declined by one-third since 1980. No one can believe that that is sensible. I have to remind your Lordships yet again that we believe that it is Ministers at the MoD—they are the largest customers of the industry—who are responsible for this state of affairs.

My second concern is this; and I put it in the form of a question. What has been the result of all this dishing out of taxpayers' money in which Ministers have been engaged? Over the past six years this Government have introduced cuts in the strength of our Armed Forces of somewhere around one third. Between 1990 and now, in terms of personnel the Army is down 27 per cent., the RAF down 42 per cent. and the Navy down 30 per cent. Those cuts would no doubt be reasonable if our defence commitments had been similarly reduced. But this has not happened. British forces are on more operational commitments throughout the world than at any time since the Second World War; and it makes no sense whatsoever to cut the strength of the services without cutting the commitments to which they are engaged. In short, "overstretch" is still with us, despite the assurances that we were offered in Options for Change and Front Line First. Those assurances, in particular in view of the current situation in Northern Ireland to which the noble Earl referred, must now be considered something of a poor joke. Why have Ministers wasted all this taxpayers' money which could easily have been spent in preserving and indeed enhancing our defence capability?

There must be a better way of facing up to these problems. We cannot go on with a system in which the Treasury demands financial cuts and no one reckons the defence consequences. Another £400 million, we are told, is to be lopped off the defence budget for next year. Again we find ourselves in the bizarre situation in which domestic, and possibly party political, financial considerations dominate our whole defence posture. The result of the Russian election, with its sinister undercurrent of resurgent nationalism?—forget it, my Lords. The increasing requirement to put men and women on the ground, in the air and on the sea to support United Nations peacekeeping operations?—do not mention it, my Lords. The need to reduce our defence commitments so that our resources can match them?—we do not want to know.

I come now to what the incoming government will do. The first requirement will be to review our essential security interests and to consider how the roles, missions and configuration of our Armed Forces can be appropriately adjusted so that there is a match between commitments and resources. In this exercise, strategic long-term thinking will be put at the centre of policy-making and, once the exercise is completed, we will make good our promise to provide the resources necessary for the effective defence of Britain, Britain's dependent territories and British interests. Our country is, as the noble Earl said, fortunate in having highly efficient men and women in our Armed Forces, but too much is being asked of them.

It would be absurd for me to judge in advance the outcome of such a review. But there are two strands in our thinking which are clear. The first is our commitment to the United Nations. In the immediate aftermath of the end of the Cold War there was a great surge of optimism about the role that the United Nations could play in international peace and security. But the experience in Somalia, Rwanda and the former Yugoslavia has been, to say the least, rather sobering.

But there is no virtue in being plunged into deep pessimism, as some commentators have been. Lessons must be learned, but on the basis that the UN will continue to have an important role to play in dealing with future conflicts. In particular, we believe that the UN must have a much more effective early warning system, that the military advice available to the Security Council and the Secretary-General must be upgraded, that UN-led or UN-authorised missions must be given clear and achievable mandates which include an exit strategy, and that member states should clearly earmark troops and equipment that they are prepared to make available to the UN. We believe that that is the sensible way forward.

The second clear theme is our commitment to NATO. It was, after all, a Labour Government which were instrumental in the creation of NATO in 1949 and we have remained faithful to it ever since. My noble friend Lord Howell will have more to say about this when he winds up from these Benches. I would only say that we must be very cautious and sensitive in approaching the enlargement of NATO to the east, and that the process must proceed in parallel with measures to include Russia in a wider security framework. But it would be wrong to imagine that the process will be easy or quick. Leopards, I am afraid, tend not to change their spots.

There is no point in pretending that decisions about the defence of our country and our interests abroad are easy matters, and 1, for one, will never try to disguise the difficulties. We must all try to do our best. But we must recognise that no country in these days, not even the United States, can realise its security objectives in isolation. Our interests are bound up with stability and security in Europe and with a stable international environment. We are faced with challenges which were not on the agenda 20 or 30 years ago: the proliferation of weapons of mass destruction; the growth of ethnic nationalism and religious extremism; international terrorism, crime and drug trafficking, and conflicts over the exploitation of natural resources. There are, as I say, no easy solutions. But on one thing we are determined: that our Armed Forces should have a clear understanding of what they are there to defend, and, above all, that they should have the resources at their disposal to fulfil their appointed role. I believe that our country, and our Armed Forces no less, deserve that; and we will deliver.

11.37 a.m.

Lord Mayhew

My Lords, the noble Earl began and ended his speech with graceful and well deserved tributes to the work of our Armed Forces overseas, in particular in Yugoslavia and Ireland. The noble Lord, Lord Williams, spoke about our servicemen in Northern Ireland. From his speech we were all made aware that the shortage of Army manpower is the greatest problem facing the forces at this time. It is profoundly disturbing to see how suddenly and quickly more demands on our manpower are made as a result of the appalling mess in Northern Ireland. It is strange to remember that not long ago we were demanding compulsory redundancies in the Army. We were closing recruiting offices. It is an extraordinary situation; and the fact is that it is a self-inflicted wound on the Armed Forces.

From the beginning of Options for Change the Government disproportionately lessened Army manpower. Deeper cuts were made for the Army in Options for Change for some reason than for the Royal Navy and the RAF. I agree very much with what the noble Lord, Lord Williams, said. It is certainly a subject which worries us on these Benches, and we look to the Government to remedy the position.

I was delighted to hear the noble Lord, Lord Williams, say that he would tell us what we are to expect from the new government. Immediately, I expected him to echo the remarkable statement of the Leader of the Labour Party, made, I believe, a week or two ago—an unequivocal statement of support for the Trident fleet, the Labour leader adding that, if necessary, he would be prepared to press the nuclear button. There was no reference to that from the noble Lord, Lord Williams. And that is natural. Because what has the Labour Party leader been doing? He has been bringing himself and his party into alignment with the nuclear weapons policy held by the Labour Front Bench in this House for many years. Those like myself who, for 15 years, have been listening to statements from the Labour Party Front Bench—especially my old colleague with whom I fought unilateralism in the Labour Party, the noble Lord, Lord Howell—have known for years of the rift between the Front Bench in this House and the Labour Party. We congratulate noble Lords on the Opposition Front Bench on their sustained period of disloyalty to their party's policy on nuclear weapons.

I wish to speak with greater detachment from the actual Defence Estimates White Paper than previous speakers. I ask first about the negotiations for the comprehensive test ban treaty. I was not at all satisfied by the answers given from the Government Front Bench at Question Time the other day. No one doubts the importance of the treaty and the enormous effort that has gone into reaching agreement on it. I recall last month at Question Time the Government speaking, I believe, for all parts of the House in saying that the prospects were very promising for the signing of a treaty.

Now things have gone wrong in a very serious manner. It was obvious from the start that India and certain other countries were going to demand that if the non-nuclear countries renounced for all time and completely any nuclear capability, they would ask for at least a measure of disarmament from the nuclear powers in return. They did that consistently throughout the long negotiations, and many countries agreed with them. I do not understand why that was not negotiated and why there was no compromise suggested between the Indian point of view and that of the nuclear powers. We now have the situation where India has stuck to its position, supported by the Pakistanis, the Israelis and no doubt others. I understand that the Government are saying that if those three countries will not sign the treaty, the United Kingdom will not sign it; that is to say, this huge and promising initiative is going to founder. I ask the noble Earl to try to reassure us about the position when he winds up the debate. We all know that the treaty will not make nuclear war or even nuclear proliferation impossible, but it makes them far more difficult and improbable. We must do our utmost to see that the treaty succeeds.

The noble Earl and the noble Lord, Lord Williams, both mentioned the question of NATO extension. I believe that the re-election of Mr. Yeltsin has been a considerable relief to all of us. It suggests to me that the Russians have finally ditched Marxist-Leninism and that is a great blessing for the world. But I do not understand why it should be thought that peace and goodwill in Europe will be strengthened by extending NATO's frontiers eastward. I cannot understand that. I cannot see the acute need for this very radical departure. It is perfectly natural that the Russians, Ukrainians and the people of Belarus should resist the idea. Foreign Minister Primakov said in March, Russia will never accept NATO enlargement, not because it has any right of veto but because it will not tolerate the worsening geopolitical situation and will stand by its interests". Similar statements have been made on behalf of Ukraine and Belarus.

It seems to me perfectly understandable especially—and this is unthinkable—if nuclear weapons are moved up to the frontiers of those countries. In their position we would feel the same. The noble Earl referred in passing to NATO enlargement; perhaps he will expand on that when he replies. There are all kinds of practical difficulties as well. The accession of new members will make consensus very much more difficult to obtain, and that is a vital NATO question. The interests of the new members conflict. It is not obvious to me what great military value they have for NATO.

The key is Poland. The Poles wish to belong to NATO and they are lobbying the United States to join. No doubt they hope that in an election year they will gain support from Polish voters in Pennsylvania, Illinois and places like that. But I do not believe at this time we should proceed with it. By all means bring them into the European Union, which is quite a different matter. But I cannot see any advantage at present in expanding NATO.

As usual, the defence debate has centred on Europe almost exclusively. Being a European country, I suppose that that is natural. With vivid memories still of the last war, the Cold War and the war in Yugoslavia, it is natural that we should think first of Europe. However, I confess that I see the major threat to peace in the next decade arising not in Europe but in the Middle East. It is a little surprising to me that we do not debate that threat more often in this House. I do not believe that the noble Earl mentioned the subject at all. It is very grave and getting worse. He referred to the tendency of crises to spread. I insist that war in the Middle East would be of intimate importance to ourselves and our European partners.

Noble Lords may have seen the report of the Select Committee on Defence in the other place regarding NATO's southern flank. It is well worth reading and it is profoundly disturbing. It reports the proliferation of ballistic missiles and weapons of mass destruction in the Middle East. That was before the Israeli elections. Those elections have greatly sharpened tensions and reduced the possibility of peace in the Middle East. Weapons of mass destruction are held by unreliable governments with passionate grievances, some of them against each other, but all of them against the United States and United States-Israeli dominance in the Middle East. Until the Israeli election there were some signs of hope. Under the brave leadership of Mr. Peres and President Arafat, Arab-Israeli relations were improving and tension was dropping. Since then the Israelis have voted by a minimal majority to counter the Oslo agreements by increasing settlements in the West Bank; maintaining the occupation of south Lebanon and the Golan Heights; and refusing any discussion of the future of Jerusalem.

It is true to say that the decision of the Israeli electors was deplored by every civilised and peace-loving government in the world. It was a disaster. To make matters worse, the Israeli Prime Minister has now appointed General Sharon to his Cabinet. It was General Sharon who commanded the invasion of Lebanon and who is answerable for the brutal bombardment of civilians in Beirut and for the horrible massacre of Palestinians in the camps of Chatila and Sabra. He is the Israeli Karadzic, idolised by the religious and racial extremists in his country and rightly feared and hated by the Arabs. His appointment is a very grave move to the bad in the Middle East.

As the Select Committee reported, the weapons of mass destruction are multiplying in the Middle East all the time. I ask what is to be done, and I hope the noble Earl is able to reply. The Select Committee recommended serious consideration of an anti-ballistic missile defence for Europe. If one thinks of the geography of it, the technology and the finance of it, it seems a desperate remedy. Of course we must try to make stronger the conventions against weapons of mass destruction, and I have spoken about the disappointing situation as regards nuclear weapons. While Israel maintains a nuclear monopoly, not unreasonably the Arab countries decline to sign the conventions on chemical warfare, and so on.

Even more worrying in a way is the study being made by the Israelis and the Americans of the weapon of pre-emptive strike. Not long ago, the American Defense Secretary, William Perry, talked about the Tarkunah chemical plant in Libya. Asked whether he proposed to attack it by military means, he said: I wouldn't rule anything out and I wouldn't rule anything in". In the Israeli Prime Minister's statement to Congress this week, again, quite plainly, he indicated that pre-emptive strikes were on the agenda.

Of course, at any time, there may be another terrorist attack on some Israeli, American, British or western facility or people. No doubt Mossad and the CIA will see some connection with Libya, Syria or Iran, and the political situation for a pre-emptive attack on those countries will be very serious indeed.

I doubt whether there is a military solution. What should be done is surely obvious to everybody. By one means or another the peace process must be put back on train. That must be the solution. I have no doubt that President Clinton will try, and is trying, his best, but in an election year I doubt it is realistic to think he can exert enough pressure on Israel to restore the peace process.

The United Kingdom and its European partners must do their best to fill the gap. They share the same objectives; they have the same interest in peace in the Middle East; and they have some cards to play. They must go beyond simply stating their objectives and wringing their hands; they must now make it clear to Israel that the close diplomatic and economic relations between them are directly related to Israel's fulfilment of her obligations under the Oslo agreements.

That is the best we can do. It may not work, but it is something we must do. I know of no other proposal to meet a violently accelerating crisis in the Middle East. I hope that when the Minister replies he will show that the Government are aware of the dangers that I have spoken about and that they are working along such lines.

11.56 a.m.

Lord Craig of Radley

My Lords, in his introduction to this year's Defence White Paper Mr. Portillo draws our attention to three striking features of the statement. On cue, the noble Earl has reminded us of them today. These points need close scrutiny because they serve to highlight things which are good or getting better in our defence arrangements and also—perhaps unwittingly—where there is still much room for improvement or cause for concern.

The first is the wide range of activities which our forces are undertaking in many parts of the world. In all the years of confrontation with the Warsaw Pact, I doubt that the three services, now so much smaller than a decade ago, were proportionately so stretched as they are today. It was fashionable a decade ago to refer to the overstretch which our forces then faced and to the need to take steps to reduce these pressures on our personnel and to be given assurances by Ministers that remedial actions and measures were in hand to alleviate the problems that they faced.

Today, with overall uniformed numbers down by 30 to 40 per cent. of their strengths of a decade ago, our forces are spread far and wide, with little prospect of any significant reductions in their commitments, whether in Northern Ireland, in and around Bosnia or in the protection forces to the north and south of Iraq. With decisions about our ongoing Bosnia commitment due soon, I hope Ministers will bear these pressures in mind.

Mr. Portillo's second point is to draw attention to the efforts made to invest in mobility, deployability and rapid reaction. Of course, these steps are welcome, and I hope that these measures will be continued. Commendably, the Government have been making some progress in updating the front line by replacing obsolete equipments and weapons. Nevertheless, there is still much to be done in order to realise the correct balance between front line and support, which, in spite of the efforts of successive chiefs-of-staff, for so long through the years of the cold war had been allowed to fossilise.

We had too little war-fighting capability to match the size of the then front line. Whatever the detailed criticisms of Options for Change, I had always seen it as a once-in-a-generation opportunity to get a better and more coherent balance between the front line and the essential weapons, logistics and support structures to ensure that we could mount and sustain in the face of enemy opposition a cohesive and formidable joint force, maybe a long way from its normal peacetime operating bases. Paradoxically, the end of the cold war makes it more, rather than less, likely that our forces could become involved in hot wars, and these would call for a better mix of platforms, weapons and support than we have had for 30 or 40 years before.

But have the Government's policies of the past few years achieved that balance? While the jury may still be out before a firm judgment can be made, I have been much struck in the past year or so by a number of worrying features. These affect personnel strengths and their training and availability. We have debated those on a number of occasions in various ways over the past year in your Lordships' House, so I do not want to do more than touch on some of them this morning. First, there is a very worrying and severe shortage of soldiers—around 4,000 at the last count. Apart from the actual undermanning against requirements, such a severe shortage has all sorts of knock-on effects on the management and training of the units affected.

Retention levels are still a cause for concern. The major redundancy programmes have had their effect on morale, most damagingly in the Royal Air Force because of the large numbers who have recently been made redundant. It is therefore not surprising, but no less worrying, that the services still face the premature voluntary retirement or resignation of many highly trained and experienced individuals. Given time and money, they can be replaced, always assuming that increased recruiting targets will be met. However, the pressures to produce a training machine of adequate size from a depleted frontline spread widely on operational duties will not be easy to meet.

With regard to the doubts about the right mix of medical support, about the future for pensions, and similar issues, the concerned but outside observer is left with a very strong impression that the effort to communicate what Ministers have in mind, and what the benefits to the servicemen and their families will be, has not been well handled. The Government are taking an incredibly long time to respond to the Bett Report.

Ministers have made a great deal of the importance that they attach to the setting up of the tri-service staff college. They have stressed their view that it is important, not merely as a cost-saving exercise, but as an important contribution to the command effectiveness of modern armed forces. But we now learn that, far from ensuring that the plans so quickly produced at the time of the Defence Costs Study were practicable and achievable in the time allowed, the best that can be provided is a portacabin city at Bracknell with a life—but watch this space—of a couple of years. Indeed, there are now even doubts whether the trumpeted decision to site the tri-service college at Camberley is cost-effective.

Such lack of care at the time those decisions were being rushed through by Ministers only goes to remind us all that there are no good short cuts in such planning.

Servicemen and women will live to rue the day amidst frustration and wasted effort. I should not wish to be a student at Bracknell during this autumn session. The portacabin installers will be drowning all speech and thought with their noisy activities. Staff College training is too important a step in the development of our senior commanders and staff officers to be treated in such a cavalier fashion. Surely those people, as much as any equipment, add value to our front-line capability.

I worry too about some of the steps being taken to economise on flying training. Not so long ago it was deemed to be a resigning matter if the initial and formative training of our young officers was to be handed over to civilian outsiders. We must never lose sight of the fact that we are not seeking merely competent aviators, but individual officers and men who understand the ethos and motivation of their service, the need to put duty before self, the importance of firm discipline and all those other essential and demanding personal characteristics of an officer or man in the Armed Forces.

I doubt that we can afford the time and delay to get these aspects of service training properly established in our new arrivals exposed merely to a few short weeks of initial entry training. They need to be constantly reminded of them by example and encouragement from their immediate seniors in uniform throughout the many months that they spend on their way to operational appointments. Excessive savings on training and on the welfare of service personnel are not a basis for a sound policy.

No matter how good the weapons and the equipment, these are of little use without motivated and disciplined men and women to use and operate them. Of course, the Government are right to seek the greatest military output from the large sums of money devoted to defence. That is Mr. Portillo's third point. But the mix of people and equipment, training and support are as vital to achieving that balance of value as any number of new weapons and platforms for them.

Some of us are concerned that the balance is tilting too far away from the individuals and their training and motivation. If that is not corrected, it could have serious consequences in the years ahead. Of all the separate ingredients which go to make up a fighting force, nothing—not even the magic of modern technology—can hope to replace the man in the loop. If we do not have people, highly trained, highly motivated and imbued with the ethos and sense of duty, if required, to put their life on the line, we do not have a true fighting capability, let alone good fighting value for the taxpayers' pound. I urge the Government to be seen clearly to be giving those immutable truths the weight that they deserve.

12.6 p.m.

Lord Boyd-Carpenter

My Lords, I rise with some feeling of embarrassment both because I agree largely with what has just been said by the noble and gallant Lord, Lord Craig of Radley, and because of the knowledge that I am to be followed by the noble and gallant Lord, Lord Bramall, who knows more about defence than any other of your Lordships. It is always extremely embarrassing to speak before someone who knows more about a subject than you do, and so much easier to speak after him.

I should also like to say how much I agree with what was said by the noble Lord, Lord Williams of Elvel. I wholly agree that it is a pity that the Government (or whatever aspect of government deals with these matters) arranged for what is probably the most important debate of the year to be taken on a Friday morning. That indicates a certain disregard of the importance of the subject. I very much hope that next year my noble friend Lord Howe—I am sure that he will still be in charge of this subject—will arrange for the defence debate to be taken mid-week and in the early afternoon. As I have said, it seems a pity that it should be treated as if it were a comparatively minor matter when it is probably the most important subject which your Lordships discuss.

Defence is of vital importance. Twice in my lifetime this country has been very close to defeat—at the beginning of the earlier war and at the beginning of the later war. It is only as a result of great devotion to duty and great efficiency on the part of the Armed Forces of the Crown that we survived both those ordeals, admittedly after years of effort, and that we are still here and free to debate the matter in this House. I urge on my noble friend Lord Howe and the Government the necessity of treating this as a matter of very great importance.

I do not have a great contribution to make. I should like to make a strong comment on the manpower aspects of defence. There has been a steady decline in the manpower of the forces. I ask your Lordships to look at the figures in the White Paper. In 1992 the Army had 148,531 personnel. In 1996–97 that figure will reduce to 116,300. We have been given no explanation for this. That is paralleled by what is happening in the Royal Navy. In 1992–93 the Navy had 61,089 personnel. In 1996–97 the number will reduce to 47,200. The position is even worse for the Royal Air Force. There is a reduction from 83,219 in 1992–93 to 63,100 in 1996–97. What is the explanation for that reduction? Is it a deliberate reduction in the size of those forces or a failure to obtain adequate recruits?

I believe that to a considerable extent recruitment is part of the problem. Without wishing to go over the matter which your Lordships debated yesterday, surely it is important that no action is taken to discourage members of the public from joining the Armed Forces of the Crown. It is disturbing to see such a reduction in the forces without any apparent governmental intention. The question I put to my noble friend is whether this has been deliberate or whether it has happened despite the wishes and policies of the Government; or is it a bit of both?

The White Paper is full of most interesting material about the seven mission types for British forces. It brings out the enormous demands on our forces which the present situation has produced. It also brings out what is called the procurement programme, which is to be of modest dimensions. The material called for under the procurement programme provides for only £376 million in respect of surface ships.

Another disturbing matter referred to in the White Paper is that our Trident missiles, which are our ultimate weapon, have to be sent back to the United States for reprocessing. If I read the White Paper correctly, it is impossible for these missiles to be kept in proper condition by work done in this country. It is apparently necessary for them to be reprocessed in the United States. If that is true, it renders this country very sensitive to American influence and control. It only requires a change of policy by the United States to disallow the reprocessing of British Trident missiles to place this country in a second-grade defence position.

Lord Kennet

My Lords, I hope the noble Lord will permit me to intervene. Does he recall—this may serve as a reminder to the rest of the House—that the point he has just made was made with the greatest force that could be mustered during the discussions before the decision was made by his party to have Trident missiles as our supreme deterrent?

Lord Boyd-Carpenter

My Lords, I recall that the matter was raised. I do not really recall the outcome. I hope that the noble Lord will agree that I have stated the current position with complete accuracy. We cannot reprocess our Trident missiles in this country. If we are to ensure that they remain efficient—as I understand it, they must be reprocessed after a certain time—these missiles must be sent to the United States. I ask my noble friend whether that indicates a basic weakness in our defence arrangements and whether Her Majesty's Government intend to do something about it.

I admit to being rather unhappy about our defence position. As I have said, twice in my lifetime we have allowed our defences to become so weak that when we have drifted into war we have nearly been beaten. It is important that our defences are strong. It appears from the speeches that have so far been made, the information contained in the White Paper and one's own knowledge of the situation that this country is not as strong and as well equipped as it ought to be. We live in a world where a nation ill-equipped for its own defence can be in very real danger from time to time.

12.17 p.m.

Lord Bramall

My Lords, first I should like to thank the noble Lord, Lord Boyd-Carpenter, who has always been a great example to us all, for his charming and totally undeserved compliment.

When one reads the latest Statement on the Defence Estimates sometimes it is not easy to see the wood for the trees. Not surprisingly, much is made of those matters which bring credit on the handling of this country's defence. Indeed, there are some good stories to tell, particularly in the equipping of our forces and the tremendous variety of tasks undertaken with such distinction by our Armed Forces all over the world. Little if anything is made of those matters which still require urgent action. Two clear priorities arise out of the Government's handling of defence over the past five to six years at any rate. They have already been noted in earlier speeches. First, the Armed Forces must be manned at least to their full establishment strength if appalling overstretch is not to continue, and they are not to be inhibited in their future use. Secondly, they must be given a period of stability if morale and motivation are not to continue to be affected. If that is not done Ministers will be seen not to be men of their word. Ministers have made pledges on both those matters from time to time, and at a very high level. In neither case has the pledge been met.

However, to give full credit where it is due, in a third area of commitment—the equipping of our forces with good, up-to-date equipment—the Government have an excellent record, with the odd marked exception such as the absence of any anti-missile defence. Generally, the Armed Forces of today are very well equipped.

On the manpower side the Government's two major reviews: Options for Change and the Defence Cost Study (sometimes optimistically known as Front Line First) have—despite the rather complacent and self-congratulatory description of them by the noble Earl—revealed, as my noble and gallant friend has said, debilitating shortcomings, particularly in the medical services, Army manpower, states of readiness and sustainability. As the Chiefs of Staff are being quoted all over the place these days, I do not think it is wrong of me to suggest that the Chief of Defence Staff is incredibly worried about sustainability. Those matters will affect things for a long period of time to come.

In all these areas the manpower cuts over the past five years have been overdone. Indeed, the latest figure is 4,500—nearly 10 per cent. deficient in the infantry—which is virtually a whole company, or two platoons of a company, from an establishment which many of us feel is far too low anyway. That takes the Army's trained man figure down to about 100,000 and seems unlikely to be corrected until well into the next decade. It appears to be nothing short of a disgrace and largely—there are plenty of examples to mention—self-inflicted. It will undoubtedly have an inhibiting effect on the use of the Army if, for instance, the Bosnia commitment lasts longer than expected, or if we do have to do more to counteract the IRA or any other form of violence in Northern Ireland—which we appear already to be starting to do with the recent reinforcements—or indeed to counteract any other emergencies which, as we all know from history, can break out so unexpectedly.

In the area of stability, despite the fact that this acute undermanning has produced appalling overstretch and general uncertainty in so many military communities, the introverted studying of the military navel goes on incessantly, or—as the Defence Select Committee observed, perhaps in more formal and parliamentary language, in their 1993 report (but it is equally true today)— there has been no period of financial calm, just the opposite. No plan seems to survive the next Public Expenditure Round. Every activity is reviewed and revised again and again". Now, after all that, we are having all the private finance initiatives which are not necessarily appropriate for the Armed Forces in which morale and the spiritual, as distinct from the material side, are of overriding importance. We have other potentially erosive studies, all of which involve such time-consuming effort, when there are so many other things that need to be done and trained for. Moreover, recent studies and reorganisations in the fields of staff training, the Married Quarters Estate, as we debated yesterday, and personnel matters in general, could all have a considerable downside and affect not only the morale but also, as again my noble and gallant friend Lord Craig has said, the very ethos and identity of the Armed Forces who, because of their total commitment, must remain a more unique institution than Whitehall is ever prepared to admit.

I hope the Government will fulfil their promises in both these areas, applying themselves with all energy to the measures which must be taken if manning is to be put right. I realise—and Ministers must persuade the Treasury to realise—that this may require a small amount of extra resources to recover from what (egged on, indeed insisted upon, by the Treasury) should never have been done in the first place. In the interests of stability the Government must reduce to the absolute minimum any further studies and proceed with them only if they are going to be of real benefit to the morale, motivation and efficiency of the Armed Forces. Of course in all these areas it does show the tremendous importance, as indeed the Bett Report mentioned, of sensible, intelligent, sensitive personnel management.

A permanent board such as has been set up may help, and I am certainly not against that, but what is required under that board is a Deputy Chief of Defence Staff as its chief staff officer or executive who can deal exclusively with personnel matters and fight his corner on resources without other factors intruding. It is intolerable that there has to be an unholy alliance in the staff of the Ministry of Defence between personnel and programmes just because the Treasury in its ignorance refuses to allow an extra three-star officer at the centre. I should like the Minister to comment on that.

Finally, I read with great interest the section on defence in the Labour Party's manifesto, which I am sure most noble Lords would agree is highly relevant, and much of which I agree with, particularly as regards what was said about the important role which Britain has to play in promoting a wider international peace and security, on a strengthened role for the European pillar of NATO, on the strengthening and supporting of the United Nations, and particularly on the military staff and the readiness of forces which must be made available to the United Nations. I was however sorry to see that the proposed strategic review, which would always be helpful to establish foreign policy and commitments and what it is exactly that we want the Armed Forces to be able to do, is described in the manifesto as a strategic defence review, with the implication that much of this would be handled in the Ministry of Defence. Although I read on page 12 that this would not be a device by which to make cuts to defence spending, that of course—if it is handled by the Ministry of Defence—is exactly what it would become, with the review starting from the bottom upwards, and the Treasury, as soon as it gets a whiff of what is afoot, establishing cash limits or percentage reductions on every corner of the budget.

It would then become a mere repetition of everything that has happened over the past five years, with exactly the same uncertainty and upheaval in the Armed Forces, on which I and many other noble Lords have already commented.

If the Labour Party has in mind to have a truly strategic review, as the noble Lord, Lord Williams of Elvel, has indicated, let it be clearly stated at all times and set at defence and overseas policy committee level with full input from the Foreign Office, the Department of Trade and Industry, and involving other wider aspects of British policy. Then at least we may be able to have a sensible matching of military resources to commitments; something we have lacked over the past few years.

12.28 p.m.

Lord Vivian

My Lords, I am most grateful to my noble friend the Minister for introducing the debate to your Lordships' House today. We live in a changing world and change will always be needed if our Armed Forces are to be kept to their prime in weapon technology and tactical operations. But change must be balanced with stability. I have never been against change but I am opposed to change for the sake of change. Change brings uncertainty, from which stems disruption and disturbance.

In this context I am not referring to the six-month operational unaccompanied tours in such places as Northern Ireland, Bosnia and the Middle East, which are the sort of operations that servicemen enlist for, train for and enjoy implementing. Nor am I referring to the change from a general war role in central Europe when we were facing the Warsaw Pact forces not so many years ago. Nor am I referring to the change in the three clearly defined defence roles in the White Paper, with commitments to more diverse tasks than ever before, covering peacekeeping, humanitarian aid, prevention of conflict and the essential retention of our ability to fight high intensity operations. All that has been brought about most successfully by the loyalty, determination and leadership shown by the Chiefs of Staff, who have had a very difficult row to hoe.

No, I am referring to changes to regulations concerning conditions of service, which provide the military ethos so crucial to high morale. The recent misunderstandings about housing and the current debate on revising service pensions are just two of the types of worry which drive our servicemen and women and their families to leave for civilian life. Members of the Armed Forces are beginning to think that they are no longer special people whom this country has always admired and they are starting to feel that they are merely civilians dressed in uniform. Changes for operational necessity should not be delayed, but changes to service conditions surely can be phased in much more slowly over a number of years and not rushed through quite so quickly. To continue to do so and apply no balance to change and stability may well result in a failure to retain sailors, soldiers and airmen in our Armed Forces.

I should like to touch briefly on intelligence and the Joint Rapid Deployment Force. There are, of course, many areas of potential conflict in the world, the Middle East being of most concern, where in accordance with our three defence roles British troops may have to be committed. However, the severe cutback in our Armed Forces over recent years leads us to ensure that warning times will be delivered not in days, not in weeks, not in months, but in years if we are to have sufficient time for the expansion of our Armed Forces, training them and increasing our rate of weapons production.

This is not the time for any reduction in the defence intelligence staff, nor any other intelligence agencies, which are all highly efficient. Our close liaison and relationship with the United States of America must be retained and even enhanced, as America has the capability and resources, with its sophisticated satellite systems, to ensure that we can monitor our potential enemies' movements, allowing us to pre-empt them and react accordingly.

However, there is little point discovering through our intelligence organisations what challenges face us if we have no forces to deal with the eventuality. It is therefore a very welcome statement to see that the Joint Rapid Deployment Force will be operational from 1st August this year and will consist of three commando and five airborne brigades. But there is an urgent need for strategic lift by air and sea and also for the replacements of the assault ships HMS "Fearless" and HMS "Intrepid".

I turn now to Army recruiting and retention. I commend the Ministry of Defence and individual regiments and corps on the intense efforts they are making in both these fields. The Army needs around 15,000 recruits a year. More than 25 per cent. of the Army is deployed on operations—the highest figure since the end of the last war—with some 18,000 troops in Northern Ireland and around 10,500 in Bosnia. It is essential that the Army trained personnel strength is maintained; otherwise the over-stretch which is creeping back will lead to more early releases.

It is a welcome move to know that the Ministry of Defence has developed an Army vocational qualification strategy. That system should be extended as a matter of urgency to the Royal Armoured Corps, the Royal Artillery, the Infantry and any other arms where qualification gaps still exist. Another welcome step is to keep open the 36 Army careers information offices which were scheduled for closure and to open five new Army careers information offices where recruiting is buoyant.

One of the gravest mistakes made was to close the junior leaders regiments, which provided many recruits for the Army. I should be most surprised if there were a Regimental Sergeant Major from a unit in the teeth or supporting arms who had not been a junior leader. The closure of so many Army careers information offices and all the junior leaders regiments is another example of change in a hurry and closing down an up-and-running system before it can be seen that the new system to replace it will function well. I ask my noble friend to accept the case for the re-establishment of the junior entrant and establish an Army training college designed on the old lines of the junior leaders regiments.

I turn now to the area of physical ability. The Army has recently taken a sensible approach to allow the streaming of those recruits whose physical fitness is poor and has included in training regiments remedial platoons which allow the less physically robust to develop their fitness. There is no reduction in physical standards by the time they complete their training. The overriding policy within the Army is that recruits must complete their training to the minimum acceptable standards in order to meet the operational needs of the Army. Around 5,000 additional recruits could come into the Army: 2,000 from the new type of junior leaders regiment and 3,000 from changing the system for physical fitness on entry.

I have no time to cover in any detail various aspects of training, the reserve forces and the medical services, except to say that the continuation of battle-group training in Canada and the first brigade exercise at all arms level by 7 Brigade in Poland this autumn are very welcome news. The Reserve Forces Act should be welcomed by the Territorial Army and the reservists when it comes into being next year, but it will require careful monitoring to ensure that employer and employee are benefiting from it.

Turning to the medical services, urgent steps need to be taken to offset the shortfall of nine general surgeons, 10 orthopaedic surgeons and 12 anaesthetists.

I should like to touch on Bosnia, where we have some 10,500 troops committed as part of the Implementation Force. All three services are doing a magnificent job in former Yugoslavia and our troops in Bosnia are highly respected and known to be the very best of the 55,000 troops committed by 32 different nations. Sadly, 11 British troops have died as a result of hostile action and a further 12 operational casualties have taken place. The principal military objectives have been largely achieved and IFOR will continue to monitor the way soldiers are kept in the prescribed areas.

While IFOR remains in Bosnia, an immediate return to military action between the former warring factions is unlikely. However, the 24-month interval which Army units are meant to have between operational tours has been significantly reduced in the Royal Engineers, the Royal Logistic Corps and the Royal Corps of Signals. That once again demonstrates that the Army is not big enough for its current commitments and should be increased to around 130,000, which I have mentioned in previous debates in your Lordships' House.

There are some 7,500 vehicles in use by British forces in the theatre and it is excellent to hear that the Challenger tanks are providing high reliability, driving some 1,500 kilometres per month, and that the AS90, the tracked artillery gun, the Scimitar light reconnaissance tank and the DROPS supply vehicle are all working well and efficiently.

I come now to the sale of the married quarters estate. I am convinced beyond doubt that that is very much in the interests of the Armed Forces and, had I been able to speak yesterday, I should have made that quite plain. Perhaps at this stage I should declare an interest as I have a 22 year-old daughter living in a married quarter in Germany, separated from her husband who is in Northern Ireland; and I lived in married quarters for more than 25 years.

I do not wish to re-open that debate, but I should like to emphasise four points. First, there has been renewed consultation down to unit level. Secondly, I am confident that the safeguards to that sale, which have been guaranteed, are in the best interests of the Armed Forces. Thirdly, the Chiefs of Staff have agreed that the sale is the best way forward and is in the interests of the services, which was one of the fundamental preconditions. Lastly, the families will have their married quarters upgraded and run properly at minimum cost to the taxpayer.

However, that debate is now over, but I am concerned that there may be a meddling with actual conditions of service and any change really must enhance the serviceman's way of life. Her Majesty's Government must be seen to be looking after the Armed Forces and caring for them, ensuring that their quality of life remains high. Not to do so could decrease morale to such an extent that it could trigger a grand exodus of many from the Armed Forces.

Finally, I should like my noble friend to know how grateful the All-Party Defence Study Group is to the Ministry of Defence for the many interesting visits which have been undertaken to service establishments. From those visits, members of the group keep themselves well informed, and there is no doubt that our troops implement their tasks with the highest degree of skill and professionalism. To produce such highly skilled troops has required high standards of leadership and thorough testing and training. Hardships by our Armed Forces have never been shunned, but met as a challenge and by firm resolve. Devotion to duty and loyalty are present at all times and on occasions the ultimate sacrifice is made by those brave men and women in the service of their country.

The Chiefs of Staff have shown loyalty in all the difficult times resulting from Options for Change and the Defence Costs Study. I can pay no greater tribute to all our men and women in the Armed Forces than to say that they carry out their duties outstandingly and with the greatest professionalism in the service of our country. The nation should be more than grateful and proud that we have such very special people to undertake the defence and security of the realm.

12.43 p.m.

Lord Monkswell

My Lords, as usual, we are indebted to the noble Earl, Lord Howe, for introducing this debate so ably and for introducing this nice glossy document which the Minister of Defence produces for us every year. But I echo the words of other noble Lords who have pointed out that it is unfortunate that we are debating such an important subject on a Friday. I see that the noble Earl is nodding his head in agreement and I hope that he recognises that.

In my short contribution today I wish to mention a few matters which are not in the Statement on the Defence Estimates. To a certain extent, one can understand why there are those omissions from the Statement. I looked in the index for some reference to Admiralty Arch and there is no mention of it or of the original plans which the MoD had to sell it. The noble Earl shakes his head. Again, that is unfortunate. But that was stopped when people in senior positions realised what was going on and realised also that the British public would not wear it.

Although there are a few paragraphs on the disposal of married quarters, there is no mention of the fact that the chances are that the married quarters will be sold to a Japanese company. If one thinks of the previous examples of privatisation, how readily would the British people have acceded to the privatisation of water if they were told that the water industry in Great Britain would be sold off to the French? How easily would they have acceded to the privatisation of British Leyland, the British Motor Corporation, if they knew that its ultimate ownership would be in the hands of the Germans? One could go on and on. But I do not think that it is very good to go down that road.

We all suffer from difficulties of communication. I am sorry that the noble and gallant Lord, Lord Bramall, interpreted the Labour Party defence policy as envisaging what one might describe as another defence review rather than a wider strategic review, which is what I understand it to be. No doubt my noble friend Lord Howell will elaborate on that when he winds up the debate.

I welcome also the Labour Party's policy regarding the need for military advice, intelligence and earmarked forces to support the United Nations. That is something for which I have been arguing from the Back Benches for a number of years and I am very glad that the Labour Front Benches are catching up with the Back Benches in that respect.

The noble Lord, Lord Mayhew, mentioned the readiness of my right honourable friend Tony Blair, the Leader of Her Majesty's Opposition, should he become Prime Minister, to do the business with Trident, if I may so express it. I believe that it has been readily understood for the past 10 years or more that a Labour leader, on becoming Prime Minister, would operate the defence forces in this country in the manner in which they are required to be operated.

But it is worth pointing out—and one of the reasons that I can so readily support Labour Party policy on defence—that we have an ultimate aim; that is, to see a nuclear-free world, not on a unilateral basis but on a multilateral basis. I believe that that aspiration would he shared by the vast majority of people in this country and around the world. One important thing that we need to try to do is to ensure that that aspiration is shared by everyone so that we can sit down to find out how we can achieve that aspiration. The Government seem to suggest that that is not an aspiration and therefore they see no need to even try to find ways of achieving it.

There are significant differences between the Conservative Party and the Labour Party in terms of defence. I am very pleased to suggest that the British people would do well to elect a Labour Government to see a better future for this country regarding defence and our Armed Forces.

12.49 p.m.

Baroness Park of Monmouth

My Lords, the Russian elections are over and General Lebed describes himself as a semi-democrat. One of his first declared intentions is to introduce tighter visa regulations with a mechanism for qualifying the status of states according to their friendliness towards Russia. He is to be one of the most powerful men in President Yelstin's government, in charge of the power-making ministries. Predictably, he is against the enlargement of NATO and for the strengthening of the CIS. He hopes to be the vice-president and to move on up. He has refreshing qualities of bluntness, if not honesty, and says roundly of Zyuganov and his merry men: It's the same old elite, [you know] nothing changes in this country. These are all yesterday's communists turned into democrats". So, politically, nothing has changed. We have his authority for that. Nor has the political fragility and volatility of the country; nor the broad and successful lines of Russian foreign and defence policy. Lebed, who of course wants a strong army, has his own candidate to replace the inevitable Grachev, but essentially the old crew rules, OK.

Meanwhile, another thing that has not changed is the investment being put into giving the Russian armed services (the Treasury has not taken over there) new weapons. By way of another ticking time bomb, incidentally, they have just started moving radioactive waste from the Pacific fleet, beginning with 700 fuel elements of nuclear reactors in submarines from Vladivostok to Chelyabinsk, by train for processing. The Russian Commission has ordered the finance and defence ministries to draw up schedules for reprocessing, as the decommissioned nuclear submarines "pose a danger", though General Gromov says that the move by train will be absolutely safe. I suspect that we owe that move to the information bravely given to the Norwegians by a Russian environmentalist now in prison in St. Petersburg for trying to be transparent. All this is years late, yet last month EURATOM praised the Russian nuclear stock-taking and monitoring fulsomely.

Although the Russians are concentrating on a leaner, more mobile army, they are maintaining and strengthening the strategic nuclear forces and forming new armies in the North Caucasus military district and in the Kaliningrad special region bordering on the Baltic states. They have secured bases in Georgia and Armenia. They recently won a revision of the flank restrictions imposed on them by the CFE treaty which has given them an extension until 1999 initially before they need destroy certain heavy armaments. Participants in the CFE conference on the treaty reported in June that, to begin negotiations on substantially modernising the treaty and adapting it to a Europe without blocs in the new military/political conditions", was their aim. This is code for letting Russia off the hook without gaining anything in return.

The Russian long-term armament programme, said Minister Kokoshin, looking at the period up to 2005, envisages more money for the defence, scientific and technical base. Yeltsin recently said that military conversion must not affect defence capability. That, presumably, includes the biological weapons programme.

Perhaps the most significant development in Russian defence, however, lies in the emphasis on naval/nuclear power. As Admiral Patrushev said on 26th June, now that the main nuclear potential has been transferred from land to sea after the START I and START II treaties, a Russian nuclear fleet had become a priority and, the new submarines will be quieter, better concealed and equipped with the newest rocket strike capabilities now under development". The Russian navy will begin receiving its fourth generation of new nuclear submarines in 2002 and after 2002 it will receive one new submarine each year. There is an atomic cruiser now doing its trials which is due to join the Pacific fleet in 1997, and, apart from a heavy nuclear propelled missile cruiser and a large anti-submarine vessel, there will also be several destroyers, multi-purpose nuclear submarines and escort ships. Over the past few years state-of-the-art technology has been designed for the ships of the future. Admiral Gromov has said that the fleet has about 30 per cent. fewer Class I and Class II ships than the US fleet, yet its potential is greater than that of France, Britain and Germany put together.

Speaking of France, it is worth noting that the French and the Russians have been developing and modernising the GRAD missile system, developing a new engine, increasing the range from 20 kilometres to 36 kilometres and improving its precision. Kokoshin announced that since 1992 the Russian navy has received four nuclear submarine cruisers, seven multi-purpose nuclear and two diesel submarines, two destroyers and 12 other combat ships. The programme for 1996 to 2005 focuses chiefly on the development of the nuclear submarine fleet, the composition of the surface fleet and naval bases in particular. Can my noble friend the Minister tell me what our navy feels about that?

So much for the hardware, or some of it. What about NATO and enlargement and Russian foreign policy as it affects defence? Primakov, the Russian Foreign Minister, and ex-KGB officer with long-standing and close links with Iran, Iraq and Libya, Chernomyrdin, the Prime Minister, and General Lebed have all had the same things to say. They add up to a very simple message. First, Russia will not tolerate any enlargement of NATO. Secondly, we must accept the growing strength of the CIS, which in defence terms is a meaner Soviet Union in all but name. The Russian strategy continues to be to dilute and weaken NATO from within. Primakov was very satisfied with the Berlin meeting. He said: Though NATO is still a military organisation and retains its former functions, the European part of it has started to stand out. The North Atlantic Cooperation Council has discussed interaction with the Partnership for Peace programme and a scenario is possible where NATO's political functions are strengthened and on this basis a real Euro-Atlantic partnership is developed. The accent is being shifted to peacemaking and preventive measures. The latest NATO resolutions see the alliance as part of, not the sole, body of the overall European security system". The Russians and the French—and no doubt all the little partners of the CIS—share the objective of easing the US out of NATO and Europe. Primakov has recently attacked the US for working, since the Cold War ended, to dominate the world. Russia, he said, was abandoning its pro-Western foreign policy because it did not suit its interests and could result in a loss of independence in foreign policy. Russia could have good relations with a not expanding but evolutionarily developing NATO.

It will come as no surprise that General Grachev when he was still in charge—

Lord Wallace of Saltaire

My Lords, can the noble Baroness tell me what evidence she has that the French and the Russians share the desire to ease the Americans out of NATO? That was not my reading of the French decision to rejoin the NATO integrated organisation or indeed of any of the recent speeches made by French Ministers on the subject.

Baroness Park of Monmouth

My Lords, I accept that entirely well-informed observation and perhaps even correction. I believe that I stand by my own view. However, the noble Lord is perfectly right to say that it is a view and not a fact.

As I was saying, it will come as no surprise that General Grachev, when he was still in charge, said that the representation of Russia in NATO's Supreme Command Europe and NATO main commands is a new and important step on the road for expanded partnership and broad co-operation between the Russian and NATO armed forces which will be seen as components of one containment force and an all-embracing security network.

Right on cue, the new Secretary-General of NATO, Xavier Solana (with a long history of friendship with the former Soviet Union), spoke in June about new forms of NATO co-operation with Russia after a joint meeting with NATO defence ministers and the Russian defence minister in line with the 16 + 1 formula. Incidentally, General Lebed recently remarked drily: Grachev could work with NATO. I feel sorry for NATO". I should point out that that is his observation, not mine.

Russia and NATO have a single aim, said Solana, which means the preservation of stability and security in Europe and that they would join forces to achieve this. I have to ask: on what terms, and what has become of NATO's duty to deter? Every time I hear NATO officials, including recently the Supreme Military Commander, they talk as if NATO were a branch of the UN or the OSCE—a political organisation which never heard of a military function. All that is to reassure the Russians. I have to say that it does not reassure me. I can see a time when no NATO member will think it necessary to contribute any troops, except perhaps to play peace games with the partners.

Let us take a look at the summary of the NATO enlargement study in the Statement that we are discussing today. It actually claims that enlargement should, be part of a broad European security architecture", like, I suppose, the Department of the Environment building in Marsham Street; and that it should occur through a gradual, deliberate and transparent process and should aim at denationalising defence. I wonder what Pug Ismay would have thought of that jargon—or that aim. NATO is valuable only so long as it has the power and the will to deter. It is being destabilised from within.

But I have reached the conclusion that we should not be worrying about Russia's strength or NATO's weaknesses. The termites are at work at home. We are told much about the effort going into Front Line First and yesterday about the Government's difficulty in believing that everyone in the services is not perfectly—well, fairly—happy.

Let us take a look at the report of the Defence Committee in the other place on Bosnia and our forces there. It concludes that either a prolonged peacekeeping operation like IFOR is too large a task, or the Army is too small. It is concerned about the strain that the Bosnian operation is placing on the Army. The IFOR mission is pre-empting military resources to a degree which would make another simultaneous operation impossible and training by other units very difficult. A thousand extra troops have just been sent to Northern Ireland.

Can my noble friend the Minister say whether we have any rapid reaction force left? Tour intervals of the Signals and Engineer units in Bosnia have fallen to less than half of the expected 24 months, and most of our communications units' net assets are in Bosnia. The Army is not big enough to meet its commitment, nor does it have the necessary range and quality of campaign stores. The logistic system is based on the concept of "just in time". Let me take one example, which is peculiarly relevant to yesterday's debate, since it affects morale.

For soldiers deployed on operational tours for periods of six months", says the report, the opportunity of regular contact with families is important. That includes access to telephones. Two thousand of the troops four months into the deployment did not have access to a welfare telephone or their access involved a 30-minutes bus ride once a week to a town with a single international line.". To provide welfare telephones by June this year would have cost the taxpayer £6.5 million and it was decided to meet the requirement through a privately-funded initiative, PFI. Surprise, surprise, the private contractors had difficulties and there were delays. But by mid-May this year 90 per cent. of the troops did have access to some form of welfare telephone.

Your Lordships should not think this a frivolous item to raise in a defence debate. It is a serious indicator. It concerns morale—morale which even the Armed Forces Pay Review Body and the Bett Report have noticed as a major and growing problem. The review board speaks of an unprecedented degree of uncertainty for the Armed Forces. It says that since Options for Change, the image of the Armed Forces as a viable and secure career may have been undermined and urges the MoD and the services to take further steps to encourage retention. It refers in particular to postings and family stability and adds that, on a domestic level, service personnel and their families are having to resign themselves to more periods of unaccompanied separation whereas in the past they could expect long accompanied tours overseas. Personnel to whom we spoke felt that many of the advantages of service life had deteriorated". But, of course, the clue to all this is to be found in that masterly chapter in this business manual we are considering, Chapter 6—Maximising Investment in the Front Line. What this means is maximising other people's investments—the PFI. It says, Only when PFI treatment has been shown to be inappropriate or uneconomic will the use of defence capital resources be considered". So, of course, the troops in Bosnia, a country where most private telephones disappeared as war casualties, had to wait for a PFI.

Fifty projects with a capital value of £1.5 billion, says the report, are being tested for a PFI solution. You will be glad to hear that even such subjects as personnel security vetting and the Defence Intelligence and Security Centre, among 18 other candidates for agency status, are being tested for agency status. That means that they will henceforward spend more time presenting business plans, presumably, and putting out glossy charters promising to answer all telephone calls by the fourth ring rather than doing an actual task.

Coming back to the review board, we have the board expressing anxiety about medical and dental services. The board says bluntly that it does not find the MoD's evidence reassuring and has concerns about the morale of the professional staff: We are very concerned that the manning problem has deteriorated to the point where it is having some impact on the ability of the Secondary Care Agency to fulfil its task in peacetime. And well they may, since on the one hand the Statement on the Defence Estimates, paragraph 715, proudly announces that rationalisation within the defence estate continues to lead to major property disposals—expected to generate over £100 million in 1996–97—which include two hospitals, at Woolwich and in Plymouth. And on the other hand there is an acute shortage of doctors and surgeons in Bosnia and a lack of air-conditioned operating theatres. The number of deployable Army surgeons has dropped from 33 to 22 in the last two years. The Army needs nine medical officers and four surgeons in Bosnia and is having to rely on doctors from other services and other countries. It operates in tents, whereas most other countries have mobile, air-conditioned containers.

The MoD is examining the case for portable modular hospitals but that would cost £2.7 million so I expect they are still looking for a PFI. The Defence Committee thought, considering how long UK forces have been deployed in Bosnia, that this might have been addressed earlier, but I expect the MoD was too busy writing charters and looking for PFIs.

Your Lordships are very fortunate: you are going to be spared anything more from me except that I would like to read a last paragraph from Chapter 6—Maximising Investment in the Front Line. Managers at all levels are now required as part of their Management Plans to produce a three-year efficiency plan describing the way in which their areas seek to deliver operating cost targets. These will highlight those areas of activity that are to be reviewed, which efficiency techniques are to be applied and what level of savings might accrue". This is all about savings, and saving money. It is not about looking after forces.

1.5 p.m.

Lord Chalfont

My Lords, I am grateful to the noble Earl for introducing this defence Statement to the House. I speak as one who has some experience of drafting defence White Papers, and I think this is an excellent document. It has important things to say about a wide range of subjects relevant to defence policy, including such important matters as defence equipment, personnel management and a comprehensive summary of the tasks which have to be undertaken by our Armed Forces. I regard it as a well produced and informative document.

But I am afraid that I am going to be a little perverse today in that I am not going to take up any of the points that are in the document, nor have I time to take up any of the points which I think have been made in a sometimes very provocative and controversial fashion about such things as a comprehensive test ban, ballistic missile defence, the enlargement of NATO and the threats of instability in the Middle East.

These are all important subjects but today I want, if I may, simply to take up a theme that was enunciated clearly and authoritatively by my noble and gallant friends Lord Bramall and Lord Craig and my noble friend Lord Vivian. I want indeed to concentrate on one word. It is a word which appears nowhere in the defence White Paper. The word is "morale". The noble Lord, Lord Williams of Elvel, mentioned in his speech on the married quarters' estates sale yesterday that in military matters the moral dimension was substantially more important than the material. And, indeed, the importance of morale has been emphasised by military historians and military commanders throughout the ages. In the 5th century BC, the great historian, Thucydides, who, as your Lordships will recall, wrote The History of the Peloponnesian War, was writing of the crucial importance accorded to morale by such great commanders as Pericles and Alcibiades. Napoleon, I think, much later summed it all up when he said that the two great instruments in warfare were the sword and the spirit and of these the spirit was the greater. More recently, Field Marshal Montgomery—for my money one of the greatest battlefield commanders of the Second World War—wrote in his memoirs, the morale of the soldier is the greatest single factor in war". And, of course, when Monty went on to be Chief of the Imperial General Staff, the first thing he did was to write a paper on the problems of the post-war Army. Somewhat naturally, in that paper he saw all the problems of the post-war Army but in doing so he covered a number of points which he presented at his first meeting with the Army Council. Two of those points were the importance of a contented Army and the factors necessary to this end. And he then called for a systematic study of the problem of morale and of the need to teach officers how to create a high morale in the Services.

So much for history, but there are lessons in that history which we are in danger of forgetting. I am not suggesting that the Armed Forces are in any way demoralised—far from it. As we have seen in the Gulf, in Bosnia, in Northern Ireland and elsewhere, when they are given a job to do they do it as bravely and effectively as they have always done. It would, however, be foolish in the extreme to pretend that their morale is not under severe strain. There are, I think, a number of reasons for this. The recent over-hasty reductions in the size of the Armed Forces mentioned by several of the noble Lords has resulted in the familiar phenomenon of overstretch. Officers and men are required to carry out operational tours of duty, separated from their families more often than is wise.

At a lower level but one just as important to morale, such routine matters as guard duty and what are known in the Army as "fatigues" come round far too often—more often than they did in the past. To add to that, there is uncertainty about accommodation and pay, conditions of service and pensions, although I hope that we shall see some of the problems addressed when the Government publish their long-awaited response to the Bett report.

Any government of any complexion must address its mind to all those matters if we are to have what Montgomery called a "contented Army". There is, however, one over-arching development which, in my view, is bound to affect the spirit and morale of the Armed Forces. It is that we seem now to have ceased to regard them as having any special and unique role in our society. They see the Defence Budget being treated by the Treasury like the budget of any other government department. Servicemen and women have a feeling that they are being treated like any civilian organisation that happens to wear uniform. Their conditions of service and their accommodation are being made subject to naked market forces. Many of their military activities are being privatised or "market tested", and even their frontline weapons, in some cases, are being maintained by civilian organisations. There is a widespread perception that "cost-effectiveness", "value for money" and the "bottom line" and other slogans—important as they may be in other contexts—are beginning to play too great a role in defence planning.

Perhaps I may say in passing that these perceptions are unlikely to be dispelled by the timing of today's debate. It has resulted in these matters of primordial importance being discussed over lunchtime in a House which has never been more than 50 strong and sometimes fewer than 20. I do not believe that will do much to encourage people in the Armed Forces to believe that their problems are being taken with great seriousness.

To return to my theme, it seems to me that the diminution in our perception of the Armed Forces as a very special and unique element in our society springs from two factors. The first and most obvious is that we do not have a real war going on at the moment, although, as the noble Earl said, we have many military commitments. Although I do not wish to evoke too many memories of Rudyard Kipling—not one of my favourite poets—I am bound to say that it is at times like this when there is no real war going on that people tend to forget the vital importance of effective, well equipped and contented Armed Forces.

The other factor is connected with a change, perhaps inevitable and irresistible, in our general culture. The younger generations no longer think of war as a glorious adventure. And they are right. War is an evil, cruel and ugly thing, as anyone who has fought in one will readily testify. There is nothing glorious or glamorous about war. However, as Clausewitz once memorably said, it is and will remain, a continuation of policy by other means". As long as the world is organised into nation states—and it will be for many years to come—as the noble Earl said, there will be clashes of interest between the nation states and those clashes will sometimes result in war. It is, therefore, obvious and of vital importance that we do not take our safety and security for granted. We are going to need our Armed Forces, as the Minister said, as far ahead as anyone here can see.

We have in this country Armed Forces which are among the best in the world. They are brave, disciplined, well equipped and well led. Nor is there much wrong with our higher command. I know many of our service chiefs very well. Indeed, I was fascinated to see when I was looking at Who's Who the other day that one of the chiefs of staff joined the army the year before I left it. They are dedicated professionals and they serve our country well.

One final point: we should never forget what has been described as the "unlimited liability". It is a liability which applies to no other walk of life. The unlimited liability is the symbol that when people join the Armed Forces and take up active service, they offer not only their skills, intelligence and loyalty: they also offer their lives. That is the unlimited liability which no one else in our society has to face.

It would be a tragedy if we ever betray the trust of those people by allowing their spirit and morale to be undermined. I very much fear that in our haste to cash in on the largely illusory peace dividend, we are moving in that direction. I hope that the Government can assure us that, although the word "morale" does not appear in the Statement on the Defence Estimates, it will nevertheless be uppermost in their minds when it comes to providing the necessary resources in coming years for the defence of the realm.

1.15 p.m.

Lord Forbes

My Lords, I wish to add my few remarks concerning morale and recruiting. Recruiting is the lifeblood of the Army and the two—morale and recruiting—go together. Unfortunately, there is cause for concern as the Estimates show that the Army has a shortfall of some 4,000 trained men. The reasons given in paragraph 505 of the Statement are: shortage of people in the right age group; increased opportunities for further education; and the mistaken perception that the Army no longer needs new recruits. Quite frankly, when I joined my regiment 58 years ago, those reasons would have been called "idle excuses".

There are much more fundamental reasons for the shortage of soldiers. First, there were the very drastic cuts brought about by Options for Change. Those cuts hit the infantry and gave morale a severe blow. They led to many units being at full stretch. Full stretch can be accepted for short periods, but it cannot go on for long without affecting morale. Full stretch today is affecting morale.

Morale plays a vital role in the Armed Forces. I believe that the Ministry of Defence has failed fully to recognise that fact. Possibly those who have never served in the Armed Forces find it difficult to appreciate the vital importance of morale. During the last war, when morale was high, soldiers achieved the near impossible. Equally, in peacetime morale acts as a magnet in attracting recruits. It is contagious.

In the past, when unemployment was high, recruiting was comparatively easy. So why is it difficult today? I have already mentioned morale. But there are other reasons. We can turn off the recruiting tap and stop the flow of recruits almost at once, but, turning the tap on again, we find only a trickle comes. The flow of recruits starts again only when the confidence of the general public is restored and they see that a good career is to be had in the Army.

Secondly, today, on leaving school, boys cannot go straight into the Army. No longer is there a junior entry. Those leaving school either get a job or fall back on social security. Having gone down either of those routes, they are reluctant to change their lifestyle to that of a disciplined environment in the Army.

There is also the question of money for recruiting. It is difficult to step up recruiting when financial assistance to the Army is being cut to the bone the whole time. The result is that despite the high priority accorded to recruiting, the resources that are allocated are totally inadequate. Furthermore, money for recruiting should not be standardised, as some regiments recruit in a small area while others cover the whole country, concentrating on various pockets of population here and there. Their expenditure must be different.

I find it rather ironical that while the Treasury knife continues to pare down Army expenditure the Ministry of Defence tries to add a sweetener by talking of large expenditure about to be made on equipment. It is no use having equipment without the men to use it. That just does not make sense.

Defence must never be looked on as an activity in decline. We must maintain our Armed Forces up to strength so as not only to defend ourselves but also to enable us to carry out our worldwide commitments. Money spent on keeping our Armed Forces up to strength is one of the best investments for our country, not only in ensuring our defence but also, most importantly, for maintaining standards in civilian life. Standards adopted by men in regiments live on in civilian life, be it a straight back or a straight answer. Those leaving the Army to enter civilian life take with them many qualities such as leadership, loyalty, discipline, charity, integrity and, above all, moral courage. Surely those qualities are of the greatest value to our nation, especially now, when all around us standards are falling. What our country desperately needs today is citizens having discipline who uphold moral standards. I suggest that it is our Armed Forces who can supply that most valuable and needed asset.

First of all, it is the duty of the Ministry of Defence to ensure that the Army is kept up to strength. The present inability to recruit to establishment leads to overstretch and dissatisfaction. That is the worst scenario for recruiting. The best recruiting asset a regiment can have is high morale, a positive image and satisfied soldiers. All I can do is say to Her Majesty's Government in the strongest possible terms that they must get to grips with the problems of the Army. Our servicemen deserve our fullest praise. They are fully stretched, if not over-stretched. They deserve, and must receive, more support from Her Majesty's Government.

1.23 p.m.

Lord Jenkins of Putney

My Lords, my thanks to the noble Earl for introducing this debate are not merely customary and traditional. It is my pleasure also to thank him for enabling his department to fill one of the many gaps in my background knowledge; it was most valuable to me.

Since the statement we are discussing was presented to Parliament, and as recently as this week, a decision of world significance was taken. It was greeted in the British media with less notice than it deserved and the press reception was very mixed. Elsewhere in the world it was given a great welcome. I refer to the decision of the International Court of Justice to confirm legally the opinion already reached by the General Assembly of the United Nations that, as the Financial Times put it, The use of threat of nuclear arms is unlawful". The Times, on the other hand, announced: Hague court declines to give ruling". That report must have been a day behind. The Scotsman said: Threat or use of nuclear weapons rejected by international court", which sounds a trifle Delphic, though the text makes it clear that the correspondent agreed with the writer for the Financial Times, who said that the court had declared that the threat or use of nuclear weapons was against international law. The Independent had no doubt that, as it said: World takes first steps to ban the bomb". I think that is about right.

The Daily Telegraph, which is widely regarded as enjoying a high reputation for factual accuracy, even if its opinions occasionally depart from Central Office conformity was simple and straightforward. It stated: Nuclear arms are illegal court rules". That is undoubtedly the case.

So what happens next? I decided to examine the matter and have been helped by a factual release from the small but efficient British World Court Project, a single-issue enterprise which has been unashamedly pursuing this cause recently and whose man in The Hague, Commander Robert Green R.N. (ret.), has no doubt as to the importance of the decision. He said: With this remarkable decision I could never have used a nuclear weapon legally. It places a duty on the military to review their whole attitude towards nuclear weapons, which are now effectively in the same category as chemical and biological weapons"— in the same category, yes, but not in the same position. I am aware that the Government did not wish the international court to consider the matter and that they were among the minority who opposed the decision. However, now that it is law, I am sure they will want to proceed along the same course as they pursued in the case of biological and chemical weapons; that is to say, they will want to proceed to a convention. Such a convention is essential to put the court's decision into effect, because the court itself has no enforcement powers and there are important matters of how, whether and when to be decided.

Nevertheless, a decision in principle has been made and the process of gradually removing the shadow of nuclear extinction from the horizon of humanity can now begin. When he comes to wind up, I hope the noble Earl will be able to tell us something of the Government's reactions to that vital and very recent decision.

In the light of that, I think it best that I say no more. I shall leave it to the Government to respond, if they can, to a matter which, as most noble Lords may well agree, has not received the attention that it thoroughly deserves.

1.30 p.m.

Lord Marlesford

My Lords, it is with diffidence that I intervene for the first time in a debate on the Defence White Paper. My first point will indicate why I want to do so. It is obvious that no one in the Chamber today is in any doubt about the importance of the subject we are debating. The quality of debate is very high. From all the excellent speakers today I single out the noble and gallant Lords, Lord Craig and Lord Bramall. I hope that membership of this House continues to be refreshed with the arrival of former Chiefs of Defence Staff. If I have one regret, it is only that more of them do not take part in debates.

However, the level of interest shown by your Lordships' House in this subject is, I fear, very different from that in the country as a whole. One of the main reasons is that there are now remarkably few people who have any first-hand experience of military life in any form. I believe that only two members of the present Cabinet have served in the Armed Forces. I doubt too whether there is a single official in Her Majesty's Treasury who has ever served. I shall welcome being corrected if I am wrong.

For the public, the Armed Forces in many parts of the country are largely invisible. Ever since they have been unable to walk-out in uniform, it is, as one retired senior service officer said to me, "almost as though British serving men and women are working in the vaults of the Bank of England".

A high public profile for Her Majesty's Forces is of crucial importance for four reasons. Three of those reasons are very obvious. First, they are one of our greatest national assets of which, as a nation, we should be extremely proud. Secondly, it will not be easy in the highly successful economic conditions of this country at the present time to attract a sufficient number of good people unless they are aware of the role and performance of the Armed Forces.

Thirdly, echoing the words of the noble Lord, Lord Chalfont, the morale of our Armed Forces depends at least in part on the public perception of their functions. I do not believe that the media always contribute positively to that. Although I myself did not see it, I am told that last night there was a television programme about Goose Green which supports my aspersion on the media.

The fourth point is in some ways the most important, certainly in the context of the Statement on the Defence Estimates. The fight for financial resources is always to some extent a reflection of public perception and thus publicity. That can hugely distort the allocation of resources. I take an example which is far away from anything to do with defence; namely, the allocation of research funds for AIDS, which, as a result of powerful and emotional lobbying, was—it is now regarded fairly generally—quite disproportionate to expenditure on research into other diseases from which many more people suffer.

The Treasury has a long history of mistaken defence spending decisions. Indeed, one might almost say that the banners of Great George Street are emblazoned with defeats for Her Majesty's Forces. Sometimes, there is a Prime Minister to overrule such mistakes. Let me give an example. In the middle 1980s, the Treasury had been resisting expenditure on research into new technology required to keep our forces ahead of the IRA. In August 1988 the Sinn Fein/IRA bomb at Omagh barracks killed eight British soldiers and Mrs. Thatcher sent for the then Chief of General Staff, Sir Nigel Bagnall, and demanded to know what he was doing about it. He explained the battle with the Treasury and offered to send her a summary of the position papers. "No," she said, "I want the papers; all of them—today." The next day he was sent for again. It was clear that she had read the lot. "You are right," she declared. "You will get the funds. I shall tell the Treasury." They did. And that is why much of our equipment is so good today. That is what Prime Ministers are for.

Recently, there have been other mistakes. There was the now notorious attempt to contract out the maintenance of RAF aircraft. There was also the closing of recruiting offices, using job shops instead. I have occasionally tried to get people from job shops. Often I have been told by the manager, "Frankly, the people I have on my list are not the sort of people you would want." There has been the reduction of army bands, a small matter but related to the low profile forced on the Armed Forces in other ways.

There has been disbandment of the Junior Leaders' Regiment. There have been other things—small matters but nevertheless significant, such as having the right level of officer to perform the right functions, to which the noble and gallant Lord, Lord Bramall, referred. Yesterday we voted on the sale of Army quarters. I supported the Government, but with some doubt. A deal which nets the Treasury some £1.5 billion and returns to the military only £100 million to £200 million is not necessarily very attractive. Apart from that, I believe that the decision may be fundamentally flawed in purely commercial, not military, terms.

We should warn the Treasury that the defence budget of this country cannot be the main way of bringing the public sector borrowing requirement into the balance the Government want. There is simply not the scope for it to be done in that way. Frankly, I believe that most noble Lords will recognise that the main way to achieve that objective can only be through a fundamental reshaping of our welfare services so that sufficient is given to those in need rather than a surplus going to those who do not need it. That is a view which is beginning to be held across the political spectrum. I hope very much that we can get the Treasury to recognise this.

It is because of what I see as the lack of appreciation of the role and performance of our Armed Forces that, in a very amateur way, I have started to take a renewed interest in what is happening. I found most useful the briefings offered through the All-party Defence Study Group. I take this opportunity to thank my noble friend Lord Vivian for the energetic way in which he organises the programme and my noble friend Lord Howe for the facilities which his department provides.

I should like to refer to a recent visit that we made to Northern Ireland where I learned three lessons. The first was that the training, discipline and equipment of our forces is of the highest order; secondly, that they are in a position to check anything that Sinn Fein/IRA try on. By definition it is axiomatic that it is never possible to checkmate a criminal terrorist organisation. But all that Sinn Fein/IRA and their loyalist analogues can do is to erode the quality and standard of life of the people of Northern Ireland. They cannot overthrow the rule of law.

Thirdly, there is no doubt that one positive spin-off from the dark quarter century in that unhappy Province is that it has enabled our Armed Forces, in particular the Army, to become probably the finest peacekeeping force in the world.

I wish to make one wider point. As we have heard, the burden on our forces in their present roles is huge and unsustainable. I do not wish to reduce the burden; I wish to increase the Armed Forces. I believe that this country has an unrivalled opportunity of contributing to world peace in this way in the post-Cold War period. We have the advantage as a veto member of the Security Council of being sure that we are never involved in any UN military operation of which we disapprove. I hope that all parties and all governments will always fight to retain that beneficial veto position for Britain. If we are to fulfil a greater role, the funding cannot all come from the British taxpayer. It must also come from those other nations who would wish to see us performing that function paying their fair share of the cost.

1.41 p.m.

Earl Attlee

My Lords, given the number of defence debates that we have had this year and the number of times that I have spoken on defence, there is little need to remind your Lordships of my interest; but I still do so.

With regard to yesterday's debate, I am pleased for the Minister that he had a successful outcome. I accept that the Government may have had to pull out all the stops. I used to be fairly relaxed about the backwoodsmen as I saw them as part of the constitutional backstop. I am not so sure now. My complaint to them is that few of them listened to the debate and were, therefore, unable to note that there were only two Back-Bench spokesmen supporting the Government. One can understand their reason for supporting the Government. Noble Lords who are regular attenders frequently vote without listening to the debate. But there is a difference. Regular attenders maintain dialogue with Peers outside the Chamber and can be advised on both sides of the argument.

Many noble Lords have addressed the issue of morale and operations. I support and echo those views, but I intend to address other matters. During yesterday's debate I mentioned the possibility of leasing the vast range of vehicles and equipment needed by our armed services. Most of the equipment is currently bought outright. However, progress is being made with what is termed the "white fleet"—that is, staff cars and minibuses. There is also leasing of some non-operational heavy logistic vehicles.

There are problems with the current system of buying outright and performing non-operational or exercise maintenance in-house by MoD employed civilians. The equipment is bought at the minimum cost while still, we hope, able to do the task. The good news is that more attention is being paid to in-service and full-life costs of equipment, but the first cost is still an overly important consideration in procurement decisions.

I urge the Minister to consider more use of some forms of lease hire contract for the "green fleet". The green fleet involves the operational vehicles. The contractor would supply the equipment that would meet the staff requirement. He would then be paid on a time and mileage/use basis as long as the equipment was serviceable. First-line repairs would continue to be done by the holding unit. If second-line repairs became necessary—and this would be outside of exercises and operations—the equipment would come off hire within a few days. This would provide a tremendous incentive for the contractor to have the equipment repaired quickly. Frankly, at present the equipment takes weeks to be repaired.

I see the advantages as follows. The manufacturer would design the equipment for the lowest whole life costs rather than the lowest initial purchase cost. Equipment would not be kept in service beyond its economic life. No civilian haulage firm operates trucks for 20 years and then goes for a lifetime extension—but the Army does.

The contractor would also have a large input into the training of personnel involved in the operation and maintenance of the equipment. I am afraid to say that sometimes new equipment is issued to units without training all the personnel and sometimes without literature in place. It would not be in the contractor's interest to allow that to happen.

The final advantage is that the MoD would no longer need to find the capital costs of the equipment. It would purely be paying on an as-it-uses it basis, similar to the situation with defence housing.

I am not suggesting that the leasing arrangements would apply in full during an operation. Clearly that is completely impractical. But there is experience of how these arrangements might work. The Army in Germany has leased Mercedes Benz plant transporters which are now operating in Bosnia, and the arrangements work well. If in peacetime the contractor will incur a severe and automatic financial penalty, it is likely that the equipment that he will design will work well in operations.

A few years ago the MoD ordered a fleet of 1-tonne four-wheel drive trucks from a small scale vehicle manufacturer. Unfortunately, the vehicle has a serious braking problem that is almost incurable. I am fairly sure that, regrettably, the manufacturer will have been paid for the vehicles, although no doubt he will still be discussing the warranty claims with the MoD. Meanwhile, the MoD has a fleet of 1-tonne trucks that it cannot use. If the vehicles had been leased to the MoD, it would simply have not paid for them.

The good news—the Brownie-point for the MoD—is that the same manufacturer was vigorously complaining that he did not obtain an order for the Demountable Rack Offloading and Pickup System (DROPS), to which the noble Lord, Lord Williams, referred. Thank God for that! That would have been an order for about 1,000 vehicles at £100,000 each. The order was placed with Leyland Daf, and it is an extremely good vehicle. But a similar technical problem on the DROPS vehicle would have been a disaster.

I listened to the speech of the noble Lord, Lord Marlesford, with great interest. I agree with much of what he said. However, he referred to the problems that he had with the maintenance of the Tornado aircraft. Yes, the contractor did seriously damage the aircraft. Even worse, the contractor acted disgracefully. But civil airline operators have expensive aircraft and they frequently contract out their maintenance.

Another factor that we should not forget is this. Internally, the MoD will have similar serious maintenance failure where equipment will have been damaged, but the matter will have been hushed up and suppressed. We would never know about it. Because a commercial contractor was used, the matter came out into the open and we found out about the problem.

I wish briefly to touch on information technology (IT). The pace of change of IT is incredible. The power of the desktop PC doubles every 18 months. But at unit level, the IT systems of the Army are Stone Age—but UNICOM is coming. I do not know whether it will be any good, but what concerns me is that it has been several years in the development and implementation. Will it be effective and up to date when it comes on stream? The Minister needs to be aware that many officers and senior NCOs buy their own desk-top computers in order to be able to do their tasks effectively. I have to admit that there is a substantial purchase of PCs, but not enough.

I do not expect the Minister to respond now, or even later, because he is obliged to say that everything in the garden is rosy. But perhaps he may be aware of the problem and that it is incredibly difficult to solve because of the relative speeds of the IT world and the MoD, which are so different.

My final point concerns the MPGS. Despite effective lobbying by the Defence Police Federation, I can accept the view that the MoD police is an expensive option and that a trial scheme would be appropriate. But there is a specific concern that MPGS patrols, possibly armed, could be used to patrol outside the wire to look for mortar baseplates. They are a very serious threat. I am sure that we can understand the dangers of having armed MPGS patrols outside the wire. Can the noble Earl give me a categoric assurance that this will not happen, except in response to an apprehended or immediately imminent attack?

There is to be an MPGS trial at Chilwell. But is it the best place to trial the concept? ATSA is to move into Chilwell with large numbers of civilians. There is also much attractive stock at Chilwell. Perhaps the policing role of the MoD police would be more important there. But 18 miles away there is the Defence Animal Centre at Melton Mowbray, which may be a better option. There may even be others. The MoD police provide the armed guard during the day, while servicemen provide the armed guard at night. MPGS at this site would relieve regular servicemen of the onerous night and weekend guard duties. If by any chance the trial is not as successful as the Minister hopes, it would be easy to reverse a small-scale programme at Melton Mowbray, whereas it would be quite expensive to reverse it at Chilwell.

The Minister had no idea that I planned to raise this alternative, so I do not expect an immediate response. But I look forward to his reassurance about patrols outside the wire, because he knows of my concerns.

1.53 p.m.

Lord Ironside

My Lords, I believe that this year's estimates show clearly that the radical policies which have been adopted throughout the defence field over the past 15 years or so—in fact, since the Falklands War—have brought us to the point where powerful high-tech weapons and platforms are now virtually taken for granted. But, as the Estimates say, security does not come cheaply and our Armed Forces, as well as our defence industrial base, have had to endure painful changes. The noble Lord, Lord Williams of Elvel, speaking earlier, was critical of the defence industrial scene and its management. But I am glad that there is now an excellent customer-contractor dialogue in place; demonstrator programmes proceed successfully and there is more spin into defence from industry now than ever before. The need for a diversification agency is questionable and I believe that the European Union KONVER (conversion programme) which is now in place, has a good input into the UK, and that surely is sufficient from the point of view of diversification.

However, I believe that the steps forward that have been taken in bringing the front line up to the highly tuned state of effectiveness and versatility that we now see, and which we have come to count on, are bringing with them some of the measures of stability that we want. Unfortunately, the front line is still overstretched and that does not help to achieve the steady state we want.

Looking at the scenario more broadly, the procurement system is producing powerful weapons and platforms that can be relied on to perform and that surely is a measure of stability. As the noble and gallant Lord, Lord Bramall, said, this brings benefits to morale and efficiency, which is what we are looking for. Rapid reaction forces, particularly the Joint Rapid Deployment Force, due to become operational on 1st August, have grown out of an orderly process and are no longer the product of panic measures. That is surely another sign of stability emerging which brings benefits that we want. Combined and collective operations are now effective instruments of defence policy. UNPROFOR, IFOR and Exercise Purple Star demonstrate yet another element of stability, which is becoming a feature of defence and bringing benefits with it

From the collective defence point of view, I believe that it is right to continue building our defence posture around NATO. I congratulate the Government on the initiatives that they have taken during our presidency of the Western European Union, in giving it some operational teeth. The WEU needs machinery for planning and political control of European operations in tandem and not in conflict with NATO, so that it can draw on that organisation's assets for the Petersberg missions. An excellent start has surely been made in establishing a situation centre which is now operational; launching an exercise programme; commissioning a strategic mobility study and bringing together chiefs of staffs to look at the operational issues.

As observer nations have been drawn into the operational scene, I ask my noble friend Lord Howe what assurances he can give the House that Ireland, as an observer, is likely to carry forward the UK initiatives on the WEU front during its current presidency of the Council to improve practical co-operation between the European Union and the Western European Union over military-assisted operations, or are we going to have to wait until the new year, for the next presidency, for further progress to be made?

Overall, the stability that we are looking for in defence is being achieved, I believe, through the investments that we are making in such things as new management strategy, competition policy, quality assurance, prime contracting, market testing and many other initiatives, which are bringing added professionalism to the Armed Forces. What we encounter along the way are, however, the pressures on servicemen and women and all individuals in the MoD connected with them, which cannot be ignored. Platforms and weapons do not work unless they are properly manned; they cannot be used without trained manpower and they cannot be deployed without the support services needed to back up the fighting units in the field.

There are many pressure points, most of which are the result of now having 80 per cent., perhaps slightly more, of our Armed Forces in the UK, which in turn means that the home bases and the defence estates have to bear the strain. Probably the worst affected service is the Army because of the draw-down from Germany, which, I understand, is pretty well complete. But the pressure point now in the public eye is, of course, the married quarters estate. The relief valve is steaming and ready to blow unless it is held down somehow.

My noble friend Lord Howe sanctioned a visit for me at short notice last week to the married quarters estate at Colchester where I was able to meet those responsible for managing what is now known as Defence Housing Executive Group 17, covering some 2,400 quarters at Colchester, Winbish, Wattisham and Woodbridge. I also met some 75 members of service families from the patches. I toured the Colchester patch as well. It has been eaten away by a high density commercial enclave and by housing association blocks. Valueless, sub-standard housing, which will not attract mortgages, exists. But it is desirable real estate. As Savills will no doubt say in their survey, as they know every inch of Essex and Suffolk, the Colchester patch is in a sought after area with all the amenities of a major town on hand and with frequent rail services to London and the Continent. It is within easy reach of the M.25 and adjacent to the Stour Valley and Constable country. Fears arise over the dilution of military population on the patch and security problems. The wounding of Sergeant Mudd is still fresh in local memory on that particular patch at Colchester.

There was an air of uncertainty, bewilderment, apprehension and, not least, suspicion about the sale and leaseback arrangements. Going with this there is some misunderstanding, too, but that is not surprising in view of the way the consultation process has apparently been conducted.

My noble friend's department has been working on the married quarters problem for years, so I wonder why so much rumour, uncertainty and even disinformation are floating around when the MoD is able to take servicemen and servicewomen into its confidence about its plans.

There is a 50 per cent. turnover in married quarters each year at Colchester, averaging 10 families a day, so if there is a communication problem then perhaps the Defence Housing Executive and the Army welfare services and the chain of command should do more to help get the message across.

Many of the issues were aired in this Chamber yesterday, so there is no need for me to go over the ground again. I supported the Government in rejecting the amendment at the Report stage of the Housing Bill because the sale and leaseback deal will work. The MoD has all the bargaining levers it needs to realise a successful outcome and to safeguard the future for the country and the service families. The most important thing is that the Government should be able to wave the golden share of veto into the faces of the new owners at every twist of the cards.

The £100 million plucked out of the Treasury coffers for upgrade is regarded by the families at Colchester and elsewhere as totally inadequate and has been linked with other suspicions about rentals and well-being for the future. If the MoD has decided to wash its hands once and for all of ownership in the provision of married quarters, then surely it must wash the slate clean and endow the Defence Housing Executive with sufficient funds to ensure that the outcome of the upgrading process is a success.

If, as I understand, £300 million is already in the long-term costings for refurbishing of housing on the 700 sites, and if we have been assured that £100 million is more than enough for the upgrade, how can my noble friend be so sure that these sums will be sufficient to meet the Defence Housing Executive's needs during the five to seven year period? Or will there have to be a lot of juggling between accounts to phase in upgrade with refurbishment, sell-offs and exchanges?

Lord Mayhew

My Lords, I wonder whether the noble Lord read The Times yesterday on this subject of financing the married quarters proposals. It showed, very persuasively, that the Government have greatly underestimated the rents they will pay at successive rent reviews. In fact a reasonable estimate is that at the end of the 25 year period the Government will have spent £10 billion in rents in return for their £1.6 billion of capital gain. Has the noble Lord seen this, and has he asked his noble friend for an explanation?

Lord Ironside

My Lords, the mechanics of the deal are difficult for anybody to work out, and we are here treading on territory which involves the confidentiality of the negotiations. I believe that the leaseback rental which the Government will have to pay will be discounted in such a way that it favours this particular type of sale and leaseback deal. I cannot say any more at the moment, but the deal is right and is a way of achieving the ends. The question is to make sure that it works. I hope that my noble friend can give the right assurances which will alleviate the fears of the families without having to breach the confidentiality of the negotiations, which of course are important.

The families are also concerned about the expected rent rises which, in their view, may be as much as 25 per cent. As yet no one knows the figures, but they fear that the rises will not be weighted in their favour to reflect the differences between properties on the commercial market and married quarters lettings. Although the Pay Review Body assesses charges on a rolling basis, there is suspicion that the wrong comparators will be used this time and assurances are being sought.

The fact that the MoD no longer links provision of married quarters with ownership does have implications for recruitment, retention and morale. If the MoD is clear that the family plays such a vital role in service life, then it must make sure that its plans are fully disseminated and understood and that the safeguards are clearly spelt out. My impression at Colchester is that the messages have not yet got through.

There are many other aspects of the estimates which need debate and which other noble Lords have touched on. I believe that the balance between our defence roles must be maintained. However much the sovereign and collective threats change, it is our wider interests in the world that must be preserved.

2.7 p.m.

Lord Lyell

My Lords, I congratulate my noble friend the Minister on his excellent exposition of what we have before us in this traditional weighty document. I thank him also for his efforts to inform those regular members of your Lordships' all party defence study group who went not only to Northern Ireland but elsewhere. Indeed, one of the high spots of this parliamentary year—shared by, among others, the noble Lord, Lord Vivian, and my noble friend Lord Ironside—was a visit last autumn to Paderborn ranges to observe the light infantry and the Royal Highland Fusiliers give a marvellous display of competence and very high morale, referred to in the debate. We were interested on that visit in value for money; and the motorised transport that accompanied us was a good example.

We also observed a work-up for the Allied Command Europe Rapid Reaction Corps. Details are given at paragraph 5 on page 36 of the Statement. Many of us were impressed by what was happening under the excellent leadership of Lieutenant-General Sir Michael Walker. He is now putting into practice in Bosnia everything that had been sorted out there in Mönchengladbach.

The main problem that always concerns me with regard to military affairs can be summed up in the one word, "overstretch". We owe thanks to the noble and gallant Lord, Lord Bramall, whose speech put into context and raised as a priority not only the continuing problem of overstretch but also the problems with regard to recruitment and training. Overstretch affects young soldiers, middle-aged soldiers and all ranks in our defence forces. It reminds all of us of the demands that we place on each and every member of the defence forces.

Perhaps I may draw your Lordships' attention to paragraph 505 at the bottom of page 73 of the Statement. The very interesting last sentence mentions, the mistaken perception that the Army no longer needs new recruits". Surely, it is indeed a "mistaken perception" from everything that we have heard today. I wonder whether it is one of the spin-off effects of the excellent document we discussed some five or six years ago, Options for Change. We do need new recruits.

I believe that my noble friend the Minister referred to the Rowallan Company, which has the specific task of bringing young men—and, for all I know, young women as well—up to the physical standards required so that those young people can enter the defence forces and do the job for which they are required and which we demand of them. Indeed, their duties in various branches of the defence forces will require those standards of them.

I recall visiting with the all-party group the Royal Marines Training Centre at Lympstone some two years ago. Among the unsung heroes, of whom there are thousands, as can be gathered from the Estimates which we are considering, I pick out the staff at Lympstone as well as those of the Rowallan Company who do us an enormous service in building morale and in encouraging young people to meet the fitness standards that are so desperately needed. I believe that both those institutions strive to show the commitment and drive of their young recruits.

A short while ago we received helpful briefing from one or two Ministers, including my right honourable friend the Secretary of State. One of the points mentioned was the qualities that we require of those "missing" recruits mentioned at paragraph 505 on page 73. The first thing we require of those recruits, who are required for all branches of the Armed Forces and particularly for the infantry as well as the Royal Artillery and, I understand, the Royal Armoured Corps, is that they match up to the physical standards I have just mentioned. Secondly, we are increasingly demanding more brains of them—or perhaps I should say, if I may use this word in your Lordships' House, "nous".

I recall a briefing of last year from the commander of the land forces for the Army. He mentioned that the two qualities of brains (or nous) and initiative were particularly evident in the Army of today. He said that there was no question but that the enormous success of our Armed Forces in Bosnia was due to 25 years' experience in Northern Ireland. That scenario has demanded that young men of 21, 22 and 23 take initiative and, above all, that they get it right. They do so thanks to the training they have received, both their basic training and what I would call their "graduate" training together with the support and the on-the-job training they have gained within their units and in Northern Ireland. I believe that the views of that commander have been well proved.

Those qualities do not exist only in the regular forces; they spill over into the reserve forces. It is very good to have support today from the noble Earl, Lord Attlee. Your Lordships will know that the noble Earl is a member of the reserve forces. I am sure that he is a very much cherished and valued member of his unit.

At home in Scotland I have knowledge of the activities of some young soldiers who are paramedics. I am astonished at their commitment and drive. They spend every other weekend training. Your Lordships will appreciate that quite often in winter the glens of Angus are not the kind of place in which young soldiers want to spend their weekends training. Weekend in and weekend out one sees young reservists. They are perhaps somewhat comparable with your Lordships. We are the amateurs of politics, although I hope we work in a professional way. The same is true of the young paramedics of whom I speak.

The other unsung heroes are those mentioned in paragraph 608 on page 89 of the Defence Estimates. Thanks to the all-party defence study group, a visit was made to a former Royal Air Force station at Wethersfield in rural Essex. We spent a fascinating day observing the training of the Ministry of Defence police and guard force. I hope that my noble friend will be able to insist on the continuation of the high standards of training that we saw on that occasion. I hope that he will convey to the Ministry of Defence police and the guard force how much we appreciate their efforts. When we go to such places as Porton Down and the submarine bases on the Clyde, we very much appreciate what they do. It is encouraging to see that those bases are quietly, discreetly and very professionally watched over.

I conclude by returning to the subject of overstretch. I am reminded of the following happy poem: O it's Tommy this, an' Tommy that, an' 'Tommy, go away'; But it's 'Thank you, Mister Atkins,' when the band begins to play— Those bands, be they in Northern Ireland, Bosnia or elsewhere—who knows—are playing with increasing frequency today. It was my noble friend Lord Vivian who considered that the Army, even with its present duties, required a substantial boost in the number of personnel. When one thinks of Bosnia, what next? Your Lordships may remember the events of 1982. When we were told that the Falkland Islands had been invaded it was thought to be an April Fool's joke. One never knows. Whatever is required, it is the men and women of our defence forces who are asked to plug the gap and deal with any problems that may arise. Today, to each and every one of them we send our thanks. I am sure that those in your Lordships' House are grateful for all that my noble friend the Minister is doing. I look forward to hearing what else he has to say.

2.17 p.m.

Lord Kennet

My Lords, I apologise for not having put down my name to speak in time. I shall confine myself to my four minutes.

I should like to urge one matter on the Government and ask one question. Both concern the same subject. I refer to the enormous arms purchases which amount to several billions of pounds that will occur in the fairly near future. I shall not bore the House by being specific. Like all major arms purchases, they have to be procured in part internationally. They have to be manufactured partly in this country and partly in friendly countries. Of course, the Government will look for the best military value for the buy. One can trust them to do that. I hope that they will also look at the interests of British industry. I am not so confident that they can be trusted to do that, but I hope so.

Will the Government also consider the general foreign policy and international security policy of this country in making their choice? They can turn either to the United States or to the countries of continental Europe to set up the relevant consortia, deals and arrangements for shared manufacture. Will they choose the United States, over whose foreign policy and international security policy they have no influence, or will they choose continental Europe, whose foreign policy and international security policy this country is making all the time, jointly with others in the European Union and the Western European Union? Whatever we buy will tie us in some measure to the foreign and security policy of the country from which we buy it. Lest we think that we have some influence over the United States in this field, I ask the Government to consider the case of Sir Patrick Sheehy and Mr. Pennant-Rea, who have just been excluded from US territory as if they were common criminals.

I come to my question. In the famous debate yesterday afternoon the point was made most clearly by my noble friend Lord Callaghan that it was unlikely the Chiefs of Staff would have given their consent—they were asked twice and said yes: for good measure, evidently, the Government asked again and they still said yes—to the sale of service housing unless they had been told that their failure to do so would mean that the money would have to be found at the expense of something else that they wanted. My question is this. Was that something else these large arms purchases or a part of these large arms purchases? One can so easily imagine the Chief of Staff saying, "Oh, my God, if we cannot have the housing we must at least have the weapons". Was that the case? I feel sure the House will listen carefully to whatever answer the noble Earl may give us.

2.20 p.m.

Lord Wallace of Saltaire

My Lords, this has been a good debate. We have some chance of not being here for two days over the weekend so I shall try not to detain your Lordships too long.

I would like to start by talking about the budgetary issue. I was struck, in listening to the opening speech of the noble Lord, Lord Williams, by the fact that on occasions he implied that the Labour Party would, indeed, spend more on defence than the present Government. If I heard him correctly, he said something like this: "We will make good our promise to provide the resources". I found this a very honest defence White Paper. I would imagine that, whoever wins the next election, no party in government would spend more on defence. I also imagine that, whoever wins the election, whether my party is part of whatever emerges from the election or not, the then government will not cut very much from the defence budget. We operate within very narrow bounds. There are those on the right of the Conservative Party who are in favour of cutting taxes, cutting spending and cutting everything else, but not spending on defence and, above all, on the Royal Yacht; but that I think is only a minority view.

What we are talking about is creating a balance; looking for savings which will free resources within the current budget for other tasks. In this context, what the defence White Paper sets out in terms of moving towards military integration across the three services in the permanent joint headquarters, the Joint Rapid Deployment Force etc. is exactly the right way to go. Reading the opening chapter of this document, my view that we need to move from a defence budget to a coherent external budget which covers all our spending on external relations was reinforced. I quote paragraph 102: Increasingly, the employment of our armed forces has to be considered alongside, and interwoven with, the use of other instruments…Our defence strategy has…to be interleaved to a greater degree with our foreign and other policies in the pursuit of our national interests". What we have seen in the past two to three years has been piecemeal cuts—at one point in the British Council, at another point in the Foreign Office budget itself—without consideration of the overall impact of our external spending as a whole. I have seen something in central and eastern Europe over the past two or three years of the military assistance programme. I regret that the defence White Paper did not make more of, for example, the excellent work that senior British military officers attached to the Czech and Latvian ministries of defence have achieved in the past two to three years or the work we have been doing in training in those countries. I am conscious that the Foreign Office know-how fund has also been running courses for defence officials and military officers in those countries which are very much part of the same sort of exercise.

There is also a case for greater international integration as a means of making limited funds go further, including, to pick up what the noble Lord, Lord Marlesford, said, internationally integrated budgets which compare costs and contributions across different countries. We have nothing to fear from this. But let us compare the budget in Britain, in which the current 3 per cent. of GNP is intended to go down to some 2.7 per cent. by the end of the century, with Italy, which spends 1.9 per cent., with Spain, 1.7 per cent., and with Germany, 1.7 per cent. If we then ask ourselves where the likely threats to the alliance come from, all of the likely threats are rather closer to Italy, Spain or Germany than to Britain. We therefore have nothing to fear from raising the budgetary issue overall in terms of common defence and security with our European as well as our transatlantic allies. There is more room for joint training and there is much more room for being proud of what the British achieve in this respect.

For years I have been struck with astonishment about the fact that we make so little of the extent to which German troops train in Britain. The Dutch/British amphibious force is in many ways the most integrated in Europe. However, the French and Germans, who talk about the Euro-corps, hardly know that it exists. In Portland we train naval units from other European countries but we do not make much of that either.

The room for symbolising what the noble Earl called the "European defence identity" exists. The French and the Germans know very well how to make symbolic gestures with their armed services. Indeed, on Sunday for the first time since 1938, British troops will take part in the quatorze juillet. The Scots Guards marched down the Champs-Elysées in 1938, German forces did so last year and British planes will fly down this year. I recommend to the Minister that the Ministry of Defence should consider how best to symbolise our own involvement in the increasingly integrated Armed Forces to explain to our public that that is the game in which we are now employed. After all, the defence White Paper notes that more than half the personnel of the Army are committed to the ARRC. Yet we are no longer talking about national defence; we are talking about a British contribution to a common effort.

I was pleased to hear the noble Earl in his opening speech talk so much about the European defence identity. I was rather surprised that the noble Lord, Lord Williams of Elvel, did not mention the importance of the European context—

Lord Williams of Elvel

I did!

Lord Wallace of Saltaire

My Lords, I must have missed it. As regards NATO enlargement, I follow my noble friend Lord Mayhew in expressing considerable doubt about the twists and turns of British policy. We have followed much too loyally the changes in American policy, being thoroughly in favour of rapid enlargement when the State Department and the Pentagon were in favour of that two years ago, and now being in favour of eventual enlargement because the Americans have gone cool on that.

It has been a saga of incoherence, muddle and confusion and now of German/American disagreement. If I understand the current German position correctly, it pushes for early NATO enlargement as a means of delaying the additional costs of European Union enlargement. If I understand the American position correctly, it is that they want to push for the two together because they know that we in Western Europe will pay more.

The British Government need to grip the NATO enlargement debate more openly, to engage more actively with our colleagues and to raise the awkward questions about having in the Czech Republic without Slovakia, of having in Hungary without Romania and undertaking some of the valuable work which the Hungarians and Romanians at the military level have been undertaking in the past three or four years, getting over their old potential rivalry. It is too late to stop the process of NATO enlargement. The slower it is engaged in the better and the more closely it is linked with enlargement of the European Union, which is fundamentally about the long-term security of Europe, the better.

Usefully, the defence White Paper says a great deal about partnership for peace; the value of those joint exercises, the re-education process and the socialisation process for the armed services of Eastern Europe, as was achieved with the Spanish armed forces after 1975. That helped to show those armed services that there is more to defence than holding down the population of their own country, that civilian control is not something which they should fear and that international co-operation is something in which they should engage. Perhaps I may say to the noble Baroness, Lady Park, that when I spoke last week to the Royal College of Defence Studies on the future of European security I was delighted to be contested in my analysis of Russia's relations with NATO by the Russian colonel who was taking part in the course. That seems to be a natural part of the way in which we try to bring the Russians into a dialogue with the NATO countries in which, I am happy to say, the British Government are already actively engaged.

The Minister mentioned our commitment in Georgia which at the moment consists of 10 British officers in Adzharskaya. If we are concerned about the future of the CIS and about dissuading the Russians from continuing to regard the rest of the CIS as an extended part of Russia, more active engagement than just a few officers here and there, perhaps even joint exercises, is the sort of thing which serves long-term British and West European security aims in the Ukraine, Georgia and beyond.

I turn now to the defence budget itself. If we are, and if we accept that we are, within a situation in which none of us will spend more on defence, we must ask very awkward questions about balance. A number of participants in the debate have raised the question of the overstretch within the Army. None has said where we might find the extra resources for the Army. I suspect that part of the answer is that the Navy still reflects its cold war role more than it should; that we are still building a Navy to do convoy duty in the North Atlantic in order to provide American reinforcements in case of Russian invasion; and we are thinking about an oceanic navy when the requirements are much more likely to be for land operations within and around the European region.

It is very clear that reserves will be extremely important. The White Paper notes that there are more than 600 reserve troops in Bosnia at present. Therefore, again, any future government will have to spend more effort and money on ensuring that there are adequate reserves.

I have heard a number of people connected with the Armed Forces question whether or not we can sustain a long-term commitment in Bosnia where 10 per cent. of the Army is stationed currently simply because of the degree of overstretch which we have. Of course, Northern Ireland makes it worse.

In that respect, I ask the Minister whether there is any give in what is oddly called arms plots at page 76 of the White Paper. I always thought that that was to do with blowing up people but it is apparently to do with the circulation of whole regiments in the armoured corps and the infantry. There are those whom I know with the logistics corps and others who believe that a great deal of money and time and, therefore, men's time, could be saved by moving towards a corps basis for the infantry, away from the old regimental system. I believe that that is another area in which we need to look for further potential savings.

Perhaps I may say a few words about the very sensitive issue of equal opportunities which the White Paper raises at various points. It is remarkable how radically the service attitude to women has changed in the past five or six years and is still changing. Its attitude to ethnic minorities is changing more slowly and there is still a long way to go although clearly, moves are being made.

Its attitude towards homosexuals has not yet changed at all. Page 79 states: The Government believes that the special nature of Service life precludes the acceptance of homosexuals into the armed forces". That could have been said about women 20 years ago in most respects. There are many who would have liked to have said it about ethnic minorities until very very recently. I regret that the resistance to change on the question of homosexuals where there is no question of military discipline is as strong as it is.

The noble Lord, Lord Chalfont, mentioned as the greatest commander of this century Field Marshal Montgomery. As a young boy and as a chorister, I met Field Marshal Montgomery. He was indeed much happier with small boys around him than he was with his family. This is of course true of many of our great soldiers of the past. Happily, he was never pursued by the military police to inquire into the inner secrets of his heart. I regret that the military police have wished to pursue such questions so actively over the past 10 to 15 years.

I should like now to raise one or two questions on procurement and the defence industry where, again, I was a little puzzled by the vigour with which the noble Lord, Lord Williams of Elvel, defended the industry and, indeed, its commitment to arms exports and future arms sales. It is clear that our industry, as well as those in western Europe and across the Atlantic, is faced with continuing retrenchment—

The Earl of Longford

My Lords, I apologise to the House for interrupting the noble Lord but I must clarify what he said. Did the noble Lord say that the famous Viscount Montgomery was something of a homosexual, or did I get that all wrong?

Lord Wallace of Saltaire

My Lords, I—

The Earl of Longford

My Lords, if that is so; it was a most disgraceful allegation.

Noble Lords

Hear, hear!

Lord Wallace of Saltaire

My Lords, I was merely saying, as many have about many of our most distinguished military commanders, that they had deep secrets within their souls. Indeed, many have also said that about Field Marshal Lord Kitchener, and others. Such matters are best left to one side and in no way affected their qualities as commanders. I raised that simply because, nowadays, when all these things are so much more out in the open, it is one of the questions that I regard the military as not taking sufficient account of.

I return to the question of procurement. I am most concerned that arms markets into which we hope to sell are, as my noble friend Lord Mayhew suggested, precisely those which represent the most insecure in the world; namely, those in the Middle East. Indeed, 10 or 15 years ago we were selling actively to Iran; now we are selling very actively to Saudi Arabia, not one of the world's most stable regimes.

I regret that, over the past 15 years, Government support for industry has been so biased in favour of the arms industry against civilian industries. It is quite clear to me now that we must both move towards membership of the European armaments agency and also recognise that we must actively shift from our over-dependence on arms exports in British production.

In conclusion, perhaps I may compliment the Minister again on what seems to be the honesty of this defence White Paper—the extent to which it does set out a series of very hard choices. I share the Minister's hope that the Secretary of State for Defence will be as honest and as open in referring to the realities of military integration and European defence identity when he addresses the Conservative Party Conference in October.

2.37 p.m.

Lord Howell

My Lords, I had intended to welcome the noble Lord, Lord Wallace, to our debates. I shall still do so, although I have to say, with regret, that I have a reservation in view of his quite unjustified remarks about Lord Montgomery. I prefer to leave the reputation of that great field marshal where the noble Lord, Lord Chalfont, placed it earlier in the debate. I hope that the noble Lord will think again about the views he expressed for which, so far as I can see, there is no evidence whatever.

It is now becoming crystal clear that the defence of the realm which for 50 years since the days of the great Ernest Bevin and the creation of NATO has been conducted in this country on a bipartisan basis—or perhaps I should say tri-partisan basis—in which I passionately believe. So it is a matter of regret to know that the Treasury-driven exercise against our defence forces is now so strained that it is essentially becoming part of party political warfare, as we saw in yesterday's debate.

I especially regret the remarks made yesterday by the Minister. He made what I thought a very sad personal comment about my noble friend Lord Williams. I give way to the Minister.

Earl Howe

My Lords, I am grateful to the noble Lord for allowing me to respond. I made no personal comment about the noble Lord, Lord Williams; nor indeed would I ever dream of doing so in your Lordships' House as I have the highest regard for him. I believe that the noble Lord is well aware that, in debates of this kind, there is room for a certain amount of, shall we say, lighter comment. I am sure that the noble Lord himself will have taken anything that I said in good heart. I certainly did not mean to cast any aspersions upon him.

Lord Howell

My Lords, I am grateful to hear what the noble Lord said and I will not weary the House by reading out yesterday's remarks. But if noble Lords will look in Hansard they will find that if it was supposed to be a piece of humour it did not quite reach the standards of debate that we expect in this House. I shall leave it there and move on.

One of the things that I have come to enjoy about these debates is the contribution, very wise and sage, each year from noble Lords who have occupied such distinguished positions at the head of our Armed Forces. Today's debate has been no exception.

The noble and gallant Lord, Lord Craig of Radley, properly emphasised the importance of ethos and motivation in our Armed Services and gave us illustrations to support that. None of us can have heard him without being extremely concerned about the damaging effects of the cuts being inflicted on the Armed Forces and, of course, in his case, especially on the Royal Air Force. The noble and gallant Lord, Lord Bramall, described what has happened as nothing short of a disgrace and said that even the Chief of the Defence Staff was incredibly worried. I therefore think it right to say that the nation as a whole can accept that advice as a great cause of concern.

As everyone knows, the military and the financial equations, which we have had before us in this debate time and again, are out of kilter. In recent years, that is what this annual defence debate has been all about. It is a cause of the greatest concern and has to be approached in a rational and, one hopes, in a non-party manner.

Of course the Government want to take advantage of the peace dividend. I understand that. We all do, or should do, if it is possible—but not at the risk of allowing our commitment to be endangered by our economics which is what I think most of us believe to be happening today. The Daily Telegraph spelt it out on 15th February of this year: More than half the Army is currently on active service", a level which it says is, unprecedented since 1945". Jane's Defence Weekly told us in May that the Defence Estimates show that army strength has fallen to 117,000 from 231,500 uniformed personnel—a fall of 112,000. Forcing the retention of the Gurkha regiment to make up for the shortfall of the parachute and other regiments is a point I want to make. The only consolation I take from that melancholy situation is that it again shows the value of that wonderful regiment, the Gurkhas, and how lucky we are that they are still there to fill the vacuum.

And the national concern grows. Flight International said in March: The RAF is being reduced to a level where it can no longer cope with demands made upon it". Is it true, as the Sunday Times told us last month: Britain has only one Brigade ready for instant deployment in a crisis whereas in the Gulf War the Government was able to send two Brigades at short notice"? The Minister must address and answer those questions today. We in Parliament must weigh the responsibilities and undertakings, as spelt out by my noble friend Lord Williams in his opening speech. We must be more concerned by the hour rather than the day or the month.

It is not only our Armed Forces that give cause for concern. The strength of our merchant shipping fleet was raised in the House recently. The Minister told us that in an emergency we could charter ships, as we did in the Gulf War. Can he be more precise today? What contingency plans exist and what is the realistic possibility of chartering such shipping? What would be the timescale? In order to make a judgment on such matters, as we are called upon to do, we must weigh up the national interests. For that we need detailed information. I hope that the Minister can provide it.

A matter of the greatest concern in our NATO and worldwide commitments is the situation we face in Northern Ireland and Bosnia. We should remind ourselves that activity in those theatres must be undertaken as well as meeting our contingency liabilities for possible developments in places as far away as Iraq, Africa, the Caribbean, the Falklands, Gibraltar, Hong Kong, Cyprus, the Gulf, Russia and eastern Europe as well as Israel and the Middle East. They are all areas of potential activity with which British forces may be called upon to deal in an emergency. We have more operational commitments today than at any time since World War II. Sir Andrew Ridgeway told us two weeks ago in the Sunday Times: Less than a quarter of the Army is ready to go to war without a long warning period". That is a sober thought.

As regards Northern Ireland, I am aware that we must all weigh our words carefully. But if ever a situation spells out the need for an intelligent, all-party approach today, it is Northern Ireland. That is why I am concerned about inflammatory political statements such as those to which I have drawn attention. We must remind ourselves that 10,000 so-called loyalists arrived last night at Drumcree Parish Church, so far as I can see without any attempt by unionist leaders to stop them gathering in such numbers in an inflammatory manner. That required the emergency movement of soldiers from the 1st Battalion of the Parachute Regiment. It is expected that another battalion, the Prince of Wales Royal Regiment, will arrive shortly. I would like to ask the Minister where the troops will come from. It is an interesting question following the rundown of our troops.

The noble Lord, Lord Mayhew, said in his opening speech, and I agree, that all the gains of peace that we have had in the past two years in Northern Ireland can be easily undermined and seem to be undermined by the minute at present. Those gains must not be sacrificed. A military contingency plan must be provided and we need an assurance from the Minister that it is being covered.

Bosnia is another area of concern. We must face the possible situation that next December we may not be in Bosnia, although many of us think it unlikely. My colleague Dr. David Clark said, after a recent visit there: If we are to walk away in December, there is every chance that war will break out again. All our hard won gains will be lost…IFOR II is necessary". Another reason for raising these matters in the debate today and asking that they be kept outside party political argument is that we all face the shortcomings of what is called "the democratic process", otherwise known as "elections". That hazard is being faced in the United States and it will soon be faced in this country. It no doubt makes it very difficult for governments to make sensible commitments in relation to Bosnia and what will happen after December. I sympathise with them. However, Parliament must face up to these questions. Somebody has to address them if governments cannot do so. I am glad that they were raised in the debate today. I hope that despite the problem of elections the Government, beset with difficulties as we know they are, will be able to tell us more about how they propose to deal with a developing situation.

Also in relation to Bosnia, will the Government tell the House what is Britain's intention as regards the war criminals for whom arrest warrants have now been issued? What is to be the role of the British forces? These evil men must be brought to trial. It seems that there is no other way of doing it except by asking the forces of IFOR to execute the warrants.

Inevitably, the expansion of NATO will become a more acute subject. It has been raised time and again in our debate today. As I said, Labour played an honourable part in creating NATO. We stand four square behind its aims. We support the Western European Union working in association with NATO. However, we do not support the concept of a European army. I agree with the noble Lord, Lord Vivian, who drew our attention to the fact that we must have independence of action, even though we do so through our collective agreements in NATO and in the European Community.

If we are to consider the expansion of NATO—which I believe to be inevitable—it must be based on wide criteria. What contribution can any such countries make to the alliance in military terms? That is the overriding criterion that has to be applied. One other factor has to be taken on board; namely, the Partnership for Peace policy, which inevitably we have to ensure in conjunction with our American allies.

Finally, I turn my attention to matters not so far raised in the debate which have concerned the noble Lord, Lord Lye11, and myself in the work we have been doing as members of the Scientific and Technical Committee of the NATO Parliamentary Assembly. The first relates to nuclear proliferation. NATO experts believe that, by the year 2000, 20 nations might be armed with ballistic missiles; nine could have nuclear weapons; 10 could have biological weapons; and 30 could have chemical weapons.

We have to strengthen by every means at our disposal international arms control. We need to freeze the numbers of our nuclear warheads. However, on nuclear policy we are with the Government: we cannot have unilateral nuclear disarmament. I thank the noble Lord, Lord Mayhew, for the very kind comments he made about my noble friend Lord Williams and myself. He wondered why we were not being more forthright and whether the Labour Party was totally behind the Front Bench in this House. I assure him that it is. I accept the plaudits. However, if the noble Lord asks me why it has taken so long for the Labour Party to agree to include Trident in Mr. Blair's statements or discuss the pressing of the nuclear button, I say to him that realism does not grow on trees. It has to be carefully nurtured. That is what we have been doing.

We must have an international comprehensive test ban treaty. We have to strengthen our assurances to non-nuclear states. We have to assist the countries of the former Soviet Union with practical help to dismantle their nuclear weapons and improve the safety, security and standards of their former nuclear bases and their power stations. I know that that may be an expensive commitment. I am well aware of the dangers of advocating anything that appears to cost money because of the charge that will come back from the Treasury Ministers.

Lord Jenkins of Putney

My Lords, before my noble friend sits down, perhaps I may put one point to him. He was inadvertently absent from the Chamber when I made my point about the decision to declare the nuclear weapon an illegal one. I rise now not to ask him to reply to a speech that he did not hear, but to make the point that I hope and believe that the noble Earl will not allow this debate to end without a reply to that important subject.

Lord Howell

I am obliged to my noble friend. I have made a note to make that point but he has done it himself now. I hope that the noble Earl, Lord Howe, will take on board that judgment and let us have a government view.

I mention very rapidly some other matters being dealt with by our scientific committee which are of great importance. One is landmines. Our colleague Mr. Frank Cook MP has drawn attention in the other place to the dastardly injuries and deaths from landmines. I am sorry that the Government now say that their policy is to have self-destructing landmines. I do not know quite what that means or the time period after which they would self-destruct. In my view we should agree internationally to ban the manufacture and production of all landmines. That is of great importance.

We also use lasers as weapons of war, which can blind and do great damage. They should be outlawed. I do not have time to go into greater detail but mention that in passing.

I undertake, with my noble friend Lord Williams, to make sure that the concerns of the noble and gallant Lord, Lord Bramall, about the effect of Labour's new policy, which he expressed so cogently and, I may say, very properly, are brought to the attention of our defence and Treasury spokesmen in another place. I simply comment that we continually and understandably attack the Treasury, but we should put the matter in political terms and talk about the Chancellor of the Exchequer. I hope that in a Labour government the Chancellor of the Exchequer is more in charge of Treasury policy than seems to be the case today.

We have had an excellent debate, though limited, being on a Friday, as was said by the noble Lord, Lord Boyd-Carpenter, and other noble Lords. From these Benches I express appreciation to all noble Lords who have taken part. We have tried to raise national awareness of the seriousness of these issues. I suppose that that is all that we can expect to achieve on a day such as this. At least we have made some contribution to public awareness of the great importance of adequate defence and of the morale of our forces. I believe that any defence policy has to rely upon that fundamentally important matter.

3 p.m.

Earl Howe

My Lords, I am pleased but perhaps not unduly surprised that we have managed during this debate to cover a wide range of current defence issues. What causes me no surprise is the depth of experience and wisdom which your Lordships bring to these matters. I have some sympathy with other noble Lords, especially my noble friend Lord Boyd-Carpenter, who regard it as regrettable that we find ourselves debating the defence estimates on a Friday. The decision in that connection was not in fact mine. However, no doubt your Lordships' comments will be read with care by those in the usual channels who carry responsibility for these matters.

The noble Lord, Lord Williams, made, if I may say so, a lively but somewhat prickly speech. His criticisms of the Government flowed fast and copiously. Where he was not incorrect in what he said he was, I fear, guilty of over-egging the rather lumpen policy pudding which his party is now cooking up.

The noble Lord expressed his party's belief in the need for a defence review. Here I align myself with many of the remarks made by the noble and gallant Lord, Lord Bramall, towards the end of his speech. We see no need for a defence review. We live in an uncertain world and the speed with which the strategic situation has changed demonstrates how such a review could be out of date before it was ever published. A review would effectively amount to a period of suspended animation for our military planning, procurement decisions and the training of our Armed Forces. Defence planning is not a short-term matter. The lead times are enormous. What we need is a more flexible approach to cope with the fluid strategic setting that we face. In the restructuring programmes put in place following the end of the Cold War, we proceeded through a series of measured and carefully considered steps. The force structures that emerged were derived from a comprehensive assessment of the changing risks of war and the likely evolution of NATO in response to those changes.

Naturally we shall continue to keep our plans under scrutiny and wherever possible, as recent equipment orders have graphically demonstrated, we shall enhance our military capabilities. We aim to achieve within available resources a balanced defence programme which is appropriate to the demands placed on the Services by our commitments both at home and overseas. That, I suggest, is the responsible way forward. I have to say that it is noticeable that the party opposite is silent on the resources that it would devote to defence were it to achieve office.

I said in my opening speech that the Government regard NATO as the linchpin of European and Atlantic defence. This was a theme picked up by a number of noble Lords, in particular on NATO enlargement. The noble Lord, Lord Mayhew, questioned the rationale for a NATO enlargement. We seek to construct an improved security structure in the whole of the Euro-Atlantic area. This means enhancing the security and stability of all European nations, not just those who may in due course join NATO. We can do so by consolidating democratic reforms, discouraging ethnic and territorial disputes, encouraging countries to denationalise their defence industries and promoting democratic control of the military. It is those aims which, if achieved, will contribute to world stability, as we witness the delicate flowering of democracy in former Eastern bloc countries.

But there can be no question of diluting the military effectiveness of NATO as it is currently configured.

Lord Kennet

My Lords, perhaps I may ask the noble Earl a question on that point. If I understand him aright, it is the British Government's policy that NATO should include all European countries. That includes Russia. Is it government policy that the Russian defence industry should be denationalised; and, if so, have the Government purchasers in mind?

Earl Howe

My Lords, let me explain to the noble Lord how our thinking has evolved on these important questions. Enlargement is an issue which has occupied much thinking over recent months and will continue to do so over the months ahead. This work is making steady progress. The NATO enlargement study is a significant and useful achievement, and its conclusions have been generally welcomed, although not, I may say, by Russia. Work this year is concentrating on deepening the military and political dialogue with interested partners so that both sides can gain a better understanding of the detailed implications. We are also concentrating within NATO on the changes that the alliance will need to make in order to remain effective when it enlarges. No decisions have been made yet either nationally or by NATO on who will join.

Detailed work is likely to begin after the December ministerial meetings. We shall not be in a position to name names until next year. The handling of Russia is an important part of the process. Russia strongly opposes enlargement in principle, and that will not change. It is important to stress that Russia has no ministerial veto. We are seeking to develop a substantial, co-operative NATO-Russia relationship in parallel to the work on enlargement.

NATO's performance in Bosnia is a matter of great credit to it. It is working side by side, and successfully, with a number of Partnership for Peace nations. The spotlight for peacekeeping will continue to point to that region of the world for some months to come.

I agree with the noble Lord, Lord Mayhew, that we should never overlook the potential for the Middle East to present us with new instability and regional conflict. This may be compounded by the proliferation of nuclear, chemical and biological weapons and their means of delivery. We continue to make considerable efforts in the field of arms control and non-proliferation.

The noble Lord, Lord Mayhew, also referred to the recent negotiations to effect a comprehensive test ban treaty. Like him, Her Majesty's Government were extremely disappointed that we were unable to negotiate an effective, verifiable and comprehensive test ban treaty commanding universal adherence. We consider the treaty of great importance and we shall continue to negotiate actively to conclude it.

The noble Lord, Lord Howell, referred to proliferation. The Government welcome the unconditional and indefinite extension of the nuclear non-proliferation treaty. That will send a clear signal to potential proliferators that any such activities will not be tolerated by the international community. The United Kingdom has already made significant reductions in nuclear weapons compared to the 1970s. We have said that when the Russian-US arsenal is measured in hundreds rather than thousands we shall respond to the challenge of multilateral negotiations.

The noble Lord, Lord Jenkins of Putney, referred in a very interesting speech to the recent decision by the International Court of Justice on nuclear weapons. We shall study this very complex decision carefully. The court did not rule that nuclear weapons were illegal. It concluded that in international law there is no comprehensive prohibition on the threat to use, or the use of, nuclear weapons. On the key point of whether the use of, or the threat to use, nuclear weapons would be unlawful in all circumstances, the court was unable to offer a definitive opinion.

However, I may make these points. The opinion of the court has no implications at all for our defence policy. We see no reason to change the fundamental elements of UK and NATO defence policy. Like the court, we believe that the use of nuclear weapons would be considered only in self-defence in extreme circumstances. For the UK, self-defence must include collective defence. I believe that it is right for me to emphasise to the noble Lord, Lord Monkswell, that nuclear forces continue to have an essential role within our defence posture and that of NATO and that we shall retain them as long as they are necessary for our security.

My noble friend Lord Ironside referred to our presidency of the Western European Union, which we held until 30th June. We made good progress on our agenda for the presidency, which focused on giving the WEU operational capabilities. That is not a short-term goal to be finalised within the space of a six-months' presidency. But we want now to make concrete progress with the operational development of the WEU. The establishment of a situation centre in the WEU headquarters is a key requirement to enable the WEU to monitor and control operations. We have provided UK staff and expertise to assist the WEU in planning this facility, which should be operational in June.

For us, the main presidency initiatives were to establish a coherent exercise policy, to offer the UK's Centre for Operational Sea Training and Joint Maritime Courses as a facility available to the WEU, and to accelerate work on strategic mobility for the WEU to help ensure that members will be able to deploy the forces required for any operation.

My noble friend Lady Park of Monmouth illuminated our debate, as she customarily does, with her deep knowledge of Russia. Russia has undergone a remarkable transformation; we very much hope that the reforms seen in that country will continue. Military reform has lagged behind other spheres of Russian life; we would welcome progress in this area. As my noble friend intimated, the Russian Armed Forces do have their problems but there is no doubt that they still represent a considerable force.

I do not wish to underplay Russia's importance to European security; Russia is a key to it. The future course of reform in Russia will inevitably influence our own defence planning. We believe that it will be in Russia's interest that President Yeltsin should push ahead with reform and co-operation with the West. There is a small UK bilateral programme which concentrates on a number of ventures, such as exchanges between middle-ranking young officers, re-training of retiring Russian officers in German-built centres in Russia, and attendance at respective staff and training courses.

The noble Lord, Lord Howell, asked about the withdrawal of IFOR from the former Yugoslavia. The UK intention remains to withdraw our IFOR contingent at the same time as our NATO allies at the end of the IFOR commission. The guiding principle has to be "in together, stick together, out together". It is too early to speculate on what, if anything, might follow IFOR. The priority now is to concentrate on the tasks before the elections. Any suggestion of an extension of a military presence would be counterproductive and lead to a loss of momentum in these very important weeks and months.

A subject which was raised by many noble Lords—including the noble Lord, Lord Williams of Elvel, my noble friends Lord Lyell and Lord Boyd-Carpenter, and the noble and gallant Lord, Lord Bramall—was that of undermanning. The Army is currently some 4,000 soldiers under strength. This state of affairs is unacceptable and we are not complacent about it. Various factors have contributed to the current position, some beyond our control—for example, the demographic trough of 17 and 18 year-olds and more youngsters going into higher education, which can only be welcomed in another context.

I do not agree with my noble friend Lord Forbes that any weakness of morale is a cause of undermanning. I believe that morale is strong. A part of the problem stems from incorrect public perception of the Armed Forces as an industry in decline following the reductions in manpower numbers over the past few years. That is unfortunate, but is not disastrous, and we have launched a range of initiatives to correct it.

For recruitment these initiatives include a large increase in the advertising budget, a delay in the closure of some Army careers offices until the full benefits of recruiting from job centres are realised, and the payment of a bounty to soldiers who enlist a friend into those arms affected by the most significant manpower shortfalls. The implementation of these measures is at an early stage but the initial indications are encouraging. I have no difficulty in stating that recruitment is now the Army's highest priority.

To reverse undermanning, we must also improve our retention rates, particularly of young soldiers. We have therefore introduced a retention bonus for soldiers in undermanned arms who choose to serve beyond the minimum three years, and a bounty for suitable former soldiers from those arms who agree to return for further service. We are also examining ways of improving soldiers' opportunities to obtain skills and qualifications that will benefit them in later civilian life. Undermanning is a real problem. We are confident of beating it, but I stress that, despite all that has been said today on the subject, including the comments about operational tour intervals made by my noble friend Lord Vivian, undermanning does not impede the ability of our Armed Forces to fulfil the operational tasks that we set for them.

My noble friend Lord Vivian also expressed his regret at the demise of the Junior Leaders Regiment. The Army is examining the possibility of some form of junior entry aimed at 16 year-olds. I agree with my noble friend that that is an understandable aspiration, but we have to balance the potential benefits against the costs of extra facilities and the longer training period. No decision on that issue is likely before next spring.

Perhaps I may express my support for the theme which the noble Lord, Lord Chalfont, and my noble friend Lord Forbes chose to take for their speeches. I refer to morale. Morale has been defined as that quality which, in the final analysis, causes a serviceman to lay his life on the line in battle. It is morale which makes a difference between winning a war and losing it. I do not believe that any defence Minister can fail to be mindful of the vital part which morale plays in the effectiveness of our Armed Forces. Morale today is good, but we should never be complacent and we should always remember that it is a plant which need nurturing.

The attractiveness of the services as a career will hinge critically in the years to come on pay and conditions. In that context the noble and gallant Lord, Lord Craig, referred to the Bett Review. Sir Michael made over 150 recommendations. We have worked briskly to evaluate them, with the fullest participation of the services. The noble and gallant Lord will know better than most that we cannot make snap decisions on matters which will influence recruitment and retention priorities that are too important to get wrong and on which your Lordships have rightly placed much emphasis today. We aim to achieve a balanced package so that we can attract and keep the best people. We hope to announce our progress shortly.

The noble Lord, Lord Wallace of Saltaire, referred to equal opportunities in the Armed Forces. I know that he will welcome the fact that very few roles now remain closed to women. The policy of the Armed Forces is that in future women will be excluded only from those posts where their presence could impair combat effectiveness. Perhaps the most significant development in the expansion of career opportunities for servicewomen has been the opening to women of combat roles at sea and in the air. The Army is currently considering the possibility of further widening career opportunities for female personnel. That includes a review of the areas currently closed to women.

It has been made quite clear throughout the services that racial abuse or discrimination of any sort will not be tolerated. The three services are committed to a range of measures to increase ethnic minority recruitment.

A number of noble Lords referred to the sale of the married quarters estate. Following our debate yesterday and in view of the time, I hope that the House will forgive me if I do not reply now to points raised by noble Lords, particularly my noble friend Lord Ironside. Let me say simply that an awful lot of nonsense has circulated about the sale, particularly with regard to the financial aspects which were referred to in yesterday's Times. However, I can reassure my noble friend that the ring-fenced sum of £100 million which the MoD will receive from the sale, added to the budget that we already have, will be sufficient to carry out the upgrade programme that we are planning.

The noble Lord, Lord Kennet, asked about the effect on the defence budget if the sale did not proceed. He will know that the proceeds of the sale will go direct to the Exchequer. In that sense, the defence budget will bear no risk. We have not considered in any way what might be the effect on the public spending round as a whole if those Exchequer receipts were not to materialise. However, it would be idle to pretend that such a sum as we expect to raise would not be significant to my right honourable friend the Chancellor as he shapes his Budget plans.

The noble Earl, Lord Attlee, and the noble Lord, Lord Kennet, referred to equipment procurement policy. I shall reflect carefully on what both noble Lords said. The statement reflects the key conclusions of last year's major review of defence procurement policy, which was published on 7th February 1996. Value for money remains the central objective and competition is still the linchpin of our procurement policy. I say to the noble Lord, Lord Kennet, that we fully recognise the need to take more systematic account of defence industrial factors if we are to continue to secure value for money in the longer term. Cost effective collaboration, usually within Europe, will be vital, but we will not overlook our trading and collaborative relationship with the United States. We want to continue our consultation with industry as to how the UK can make the most of its investment in defence R&D to underpin future technology needs, taking into account the Technology Foresight Programme, and how we can help UK companies in appropriate ways to participate to best advantage in European and US defence industry restructuring.

The White Paper brings out several points in this area. We make clear that restructuring is primarily a matter for industry. There may be ways in which the Government can assist the process in the national interest without departing from that general principle. We need to look carefully at our arrangements for collaboration. When it is well structured, defence collaboration offers several benefits: improved value for money and potential new markets for British firms. The liberalisation of the defence market is in the industrial interests of the UK. Our export success demonstrates the competitiveness of UK industry. We continue to press for this in international fora. I say to the noble Lord, Lord Wallace, that UK entry into the Franco-German armaments agency is a logical extension of existing collaborative links with other partners. It offers an opportunity for the UK to push for open procurement practices among the biggest arms procurers in Western Europe.

I repeat to my noble friend Lord Forbes that our Armed Forces have never been better equipped. For example, the age of ships in the Royal Navy is younger now than at any time since 1918. It is not a failing of policy but rather a strength that an increasing proportion of our budget is being devoted to equipment. The fire power of our forces has never been greater. As my noble friend Lord Ironside has said, that benefits military capability and morale.

Before I leave the question of equipment I should like to deal with the question of the chartering of merchant ships raised by the noble Lord, Lord Howell. We have a duty to obtain the best value for money for the British taxpayer. Therefore, we charter merchant ships on the world market to meet our shipping needs. This provides a greater potential range of ships at a competitive price. Our sealift needs during the Gulf conflict and the subsequent operations have been successfully met through this open market approach. British shipowners are given the opportunity to put forward ships, but we find that in general British ships tend not to be offered as they are already fully committed to regular commercial trade. In appropriate circumstances all British-flagged ships, and foreign-flagged but British-owned ships, could be requisitioned. We regularly monitor the ability of the British fleet and its seafarers to support military operations based on the available data.

I close by re-emphasising one of the key themes of the 1996 Defence White Paper. Our Armed Forces are undertaking a wider range of activities around the world than ever before. They are properly configured and equipped for the tasks that we ask them to perform. This Government have remained true to their pledge to maintain strong defence—and the right defence—for the security of this country and the protection of our worldwide interests. Continued adherence to that pledge is our overriding care and duty.

Lord Wallace of Saltaire

My Lords, I take this opportunity to thank the noble Earl for his remarks on the delicate question of equal opportunities. I spoke perhaps mistakenly and over-hurriedly on such an extremely delicate matter. I should not have mentioned Field Marshal Montgomery. I should like to apologise to the House.

On Question, Motion agreed to.