HL Deb 21 July 2004 vol 664 cc227-45

3.30 p.m.

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

My Lords, with the leave of the House, I shall repeat a Statement made in another place earlier today by my right honourable friend the Secretary of State for Defence.

"With permission Mr. Speaker, I should like to make a Statement about the need to transform our Armed Forces to deal with the challenges of the 21st century. Before doing so, however, I know that the House would want to join me in paying tribute to the bravery, professionalism and dedication of the men and women who serve their country in the Armed Forces, as well as those who support them in the Ministry of Defence and British industry. Their reputation is second to none. The transformation that I am setting out today will help to ensure that our Armed Forces can continue to respond effectively to the global challenges that they are likely to face.

"This Government are absolutely committed to Britain's defence, and to our Armed Forces. That was made abundantly clear by my right honourable friend the Chancellor's announcement last week of the budget settlement for defence. The 2002 spending review provided the largest sustained growth in defence spending plans for 20 years. This year it has been possible to make even more resources available to defence, providing the longest period of sustained growth for over 20 years—a defence budget rising by £3.7 billion. It is this sustained investment that makes possible the transformation to which the Government and the Armed Forces are committed.

"In the 1998 Strategic Defence Review we set out plans to develop defence capability to match the needs of the post-Cold War world. We built on this with the SDR new chapter, published after the appalling events of 11 September 2001, and we confirmed this direction in the defence White Paper of December 2003.

"That White Paper makes it clear that the threats to Britain's interests in the 21st century are far more complex than was foreseen following the disintegration of the Soviet empire. That is why the defence White Paper signalled that we should continue to modernise the structure of our Armed Forces; to embrace new technology; and to focus on the means by which our Armed Forces can work together with other government agencies to meet the threat of international terrorism and the forces of instability in the modern world.

"Our Armed Forces have enthusiastically embraced this process of transformation. It will see a shift away from an emphasis on numbers of platforms and of people—the inputs which characterised defence planning in the past—to a new emphasis on effects and outcomes, and on the exploitation of the opportunities presented by new technologies and Network Enabled Capability. We measured numbers of people and platforms in the Cold War because we were preparing for an essentially attritional campaign, holding back Soviet forces. That kind of campaign has fortunately passed into history as technology has moved on.

"The capability of our Armed Forces is growing year by year as intelligence is combined with target acquisition, modern communications and precision weaponry to produce results which have changed the nature of modern warfare. These new capabilities involve the rapid communication of actionable intelligence to the commander in the field to deliver a range of combined effects, involving all three services and our allies acting efficiently and effectively together.

"We are also able to respond more rapidly to crises through the improved deployability of our forces. We saw this in 2003 when forces were moved to the Gulf in less than half the time that it took 12 years before. With better target acquisition and precision weaponry, our Air Force was able to hit its targets with less ordnance—and hence fewer aircraft—than in the first Gulf War. The same tasks can now be completed in much less time, with far greater accuracy and correspondingly lower risk to our forces.

"The defence White Paper makes it clear that this shift in investment towards greater deployability, better targeted action and swifter outcomes would involve a reduction in the numbers of tanks, aircraft and ships. Drawing on our experience of operations since the Strategic Defence Review, the Ministry of Defence and the Armed Forces have been identifying which parts of the Armed Forces are most in demand, and which are less well utilised. As a result, we have developed new plans to ensure that our Armed Forces can retain maximum effectiveness. I have set out these plans in detail in the Command Paper on future capabilities, published today.

"The majority of reductions will effect not the front line but support operations. We will exploit greater efficiencies in the delivery of logistic support and the modernisation of infrastructure. We plan to accelerate this process over the years ahead. Efficiency savings of £2.8 billion are included in our plans. All of this money will be recycled to enhanced our front-line capabilities and other modernisation initiatives.

"Of course, we are investing more new money in defence. This investment will, for the Army, enable us to fund its transformation into a force which is structured and equipped to meet the demands of multiple, concurrent operations across the full spectrum of tasks. This involves a shift from the current structure which is strong at the heavy and light ends of the spectrum but thinner in medium forces, to one which is better balanced, right across the capability spectrum.

"The balanced land force of the future will consist of two heavy armoured brigades, three medium weight brigades, based around the Future Rapid Effects System family of medium weight vehicles—FRES—and a light brigade, in addition to the Air Assault and Commando brigades. We launched the assessment phase of the FRES project in April this year and we expect to sign a contract for technology demonstration work to start later this year.

"The shift in emphasis to more agile, deployable forces means that we will establish an additional three light armoured squadrons, re-role a Challenger 2 regiment into an armoured reconnaissance regiment and re-role an AS90 regiment into a light gun regiment. Later, we will equip three artillery regiments with the new Light Mobile Artillery Weapon System. At the same time we will seek to improve our ability to engage land targets with precision and at range. The first Apache attack helicopter will go operational later this year, an important first step down this path.

"It will be followed by improvements in our missile inventory, through the progressive introduction of the Brimstone air-to-ground missile, a new infantry anti-tank guided weapon—Javelin—and improved artillery rounds to allow precision indirect fire over the second half of the decade. Collectively, these improvements will be balanced by a reduction of seven Challenger 2 armoured squadrons and six AS90 heavy artillery batteries by early 2007.

"Critical as these new weapons systems are, at least as important are the changes that we are making to enhance the Army's Network Enabled Capability. Digitised communications systems provide the network links. The entry into service of Bowman at the tactical level, and the Cormorant and Falcon systems at the operational and strategic levels, will represent a step change in our capability to pass data between commanders and the front line. We are continuing to invest in improved electronic warfare capabilities such as Soothsayer and in developing stand-off sensors, such as the Watchkeeper Unmanned Air Vehicle. I was able to announce yesterday that the preferred bidder for Watchkeeper is Thales Defence Limited. This will provide battlefield commanders with high quality, timely and accurate information. The new joint surveillance aircraft, Astor, recently made its first test flight successfully.

"Our battlefield and maritime helicopter forces, arguably the most capable in Europe, have demonstrated their versatility supporting the full spectrum of recent operations. Over the next 10 years, we plan to invest some £3 billion in helicopter platforms to replace and enhance our existing capability. This substantial investment within a relatively short timeframe will make it possible to produce a future helicopter fleet focused on the key capability areas of lift, reconnaissance and attack, central to future expeditionary operations.

"The dominance in the air by alliance and coalition air forces shown in recent conflicts, together with our judgment about the likely threat on deployed operations and our continued investment in Typhoon and its advanced air-to-air weapons means that we can plan to reduce our overall investment in ground-based air defence. We will meet our requirement in future from 24 Rapier fire units and 84 high velocity missile launchers. Rapier will be deployed by the Army with the RAF Regiment relinquishing that role. Ground-based air defence will be commanded by a new joint HQ within the RAF command structure.

"We are reviewing the implications of these force structure changes for our future equipment plans. In the mean time, I can announce the procurement of additional missiles worth around £180 million for the high velocity missile system.

"I now turn to the infantry. We currently provide operational and geographical variety for the infantry by moving battalions between locations and roles every few years. This is known as the infantry arms plot. This process inevitably takes battalions out of the order of battle while they are moving and training for new roles. It also adds to turbulence. We need to ensure greater capability from the infantry and improved continuity with better careers for infantrymen and more stability for their families. The infantry arms plot will therefore be phased out.

"In addition, as a result of the improving security situation in Northern Ireland, we announced last month a reduction in the number of battalions committed to the Province by two. The Chief Constable of the Police Service of Northern Ireland and the GOC have now conducted a further review of security requirements. As a result, I can today announce another reduction of two battalions, which will take place in the autumn. This in turn will reduce the overall requirement for infantry battalions from 40 to 36. This reduction will comprise one battalion recruited from Scotland and three recruited from England.

"These changes necessitate a new infantry structure. This must preserve the best aspects of the regimental system but must produce an organisation capable of adapting for the future. The new structure will be based on regiments of two or more battalions in largely fixed locations, allowing individuals to move easily between these battalions. Details of the new organisation will be worked out by the Army and announced by the end of the year.

"The Army Board wants to establish an infantry organisation that will last for the foreseeable future. The manpower released by the reduction of four battalions will be redistributed across the Army to strengthen existing infantry units, but will also be used elsewhere among the most heavily committed specialists, such as logisticians, engineers, signallers and intelligence. The overall size of the Army will be around 102,000.

"Our plans for the Royal Navy involve the further development of a versatile and expeditionary force that is capable of operating at distance from the United Kingdom and is focused on delivering effect on to land at a time and place of our choosing. Two new large aircraft carriers deploying the joint combat aircraft will provide the heart of our future ability to project military power from the sea. I announced on Monday the extension of the assessment phase to take forward further design work on the new carrier in the run-up to our main investment decision. I also announced that the principles of an alliancing approach have been agreed with our industrial partners. We are investing heavily in our amphibious capability. HMS "Albion" and HMS "Bulwark", which were delivered to the Royal Navy last week, will provide a step change improvement in our ability to launch the Commando Brigade and other forces ashore.

"By ensuring that our major warships are effectively networked and supported, we can deliver more capability from fewer platforms. Developments in network enabled capability—linking sensors and weapon systems—mean that we can meet future area air defence and command and control requirements from a force of eight Type 45 destroyers. With these hugely capable ships currently under construction, we plan to pay off our oldest Type 42 destroyers—HMS "Cardiff", HMS "Newcastle" and HMS "Glasgow"—by the end of 2005. We are still in the early stages of an ambitious procurement programme. We are working with industry to define a timetable that best matches our capability requirements and the need for steady work in both the shipbuilding and repair industries.

"The potential submarine threat to most future UK operations is likely to be very low. But where a threat does exist, we will still need the full range of advanced anti-submarine warfare capabilities to deal with it. We have therefore decided to reduce our overall number of platforms optimised for antisubmarine warfare, while continuing to maintain our technological edge over potential opponents, including through the introduction of the new low frequency active sonar 2087. We will pay off three Type 23 frigates—HMS "Norfolk", HMS "Marlborough" and HMS "Grafton"—by March 2006.

"This shift of emphasis also allows us to meet our maritime reconnaissance needs with 16 Nimrod MR2 aircraft. The requirement could in future be met by a fleet of around 12 more capable Nimrod MRA4 aircraft, subject to industry demonstrating satisfactory performance at acceptable prices.

"We require a total of eight nuclear attack submarines. The introduction of the new Astute class boats will hugely enhance the SSN contribution across the spectrum of operations. There has been solid progress on the first of the class, following the restructuring of the project. Work continues on boats 2 and 3 as well as on long-lead items for boat 4 but there is still more to be done before finalising production orders. We are also investing in the latest generation of Tomahawk land attack missiles and improvements to submarine communications to give our current and future submarines an improved land attack capability. Our mine countermeasure vessels have made a valuable contribution to recent operations.

"Against the changing threat, we need to retain a balanced force of eight Hunt class and eight Sandown class vessels. We plan to pay off HMS "Inverness", HMS "Bridport" and HMS "Sandown" by April 2005. The improved security situation in Northern Ireland also makes it possible to pay off the Northern Ireland patrol vessels HMS "Brecon", HMS "Dulverton" and HMS "Cottesmore" by April 2007.

"As a consequence of these changes, the manpower of the naval service will reduce to 36,000 over the next four years.

"Air power is critical to the prosecution of modern warfare. Over the next 10 to 15 years, an accelerating transformation of our air power will enable quicker, more precise and decisive operations at range, delivered by multi-role Typhoon and joint combat aircraft equipped with highly capable weapons. The Typhoon programme is now moving forward towards initial operating capability, with indications that the aircraft is demonstrating excellent performance and good reliability. We expect to sign a contract for the second tranche of Typhoon aircraft as soon as we complete satisfactory negotiations over price and capability.

"The investment in our air forces is already producing substantial improvements in existing aircraft. The Tornado GR4 is now one of the most potent offensive aircraft systems in the world, fully capable of day and night operations in all weathers. The Harrier GR9 development programme is on course to deliver a significantly more capable platform with much wider versatility, including for carrier-borne operations. The tactical information exchange capability project will examine how the effectiveness of the GR4 and GR9 can be further enhanced by improving their networked capability. The Tornado F3 aircraft is now equipped with AMRAAM and the world-leading ASRAAM air-to-air missiles and is fully networked through the Joint Tactical Information Distribution System. The new Storm Shadow long-range air-to-surface missile proved itself as a world-beater during the recent Gulf War. New precision-guided Paveway IV bombs will further enhance our overall capability in the short term.

"With these significant advances in capability, we now judge that we need to reduce the types and overall numbers of the RAF fast jet force, providing a firm baseline for the transition to the multi-role era. We will reduce the number of our air defence Tornado F3 squadrons by one, and bring forward the withdrawal of two Jaguar squadrons to 2006, with the final Jaguar squadron to be disbanded in 2007. These changes in the force structure and the achievement of planned organisational efficiencies will lead to a reduced RAF manpower requirement of around 41,000 by 2008. This will allow us to close RAF Coltishall airfield by December 2006. We will also be undertaking an extensive review of our future requirement for airfields. Following an extended period of consultations we have decided to rationalise the basing requirements of a number of RAF logistic support and communication units. My right honourable friend the Minister for the Armed Forces is writing today to those honourable Members whose constituencies may be affected.

"The RAF also plays an essential enabling role in support of expeditionary operations through its strategic and tactical airlift capability. The core of this capability remains the fleet of C-130 aircraft and, from 2011, the A400M. To accommodate larger items we have already announced that we were considering the options for retention of C-17s after A400M enters service. I am pleased to announce that we intend to buy the current fleet of four at the conclusion of the current lease arrangement and to purchase one additional aircraft bringing our C-17 fleet up to five aircraft.

"Amidst these structural and major equipment changes, we must never neglect the more immediate needs of our Armed Forces in the field and in particular their personal equipment. We already have a major programme under way in the light of experience from Operation TELIC. I am now able to announce some further enhancements. This year we will be procuring additional light machine guns for the infantry, together with night vision and target acquisition systems for forces in land, sea and air environments, as well as further enhancements to our Special Forces capabilities. We will also make major enhancements to our asset tracking capability to ensure the right materiel is in the right place at the right time. We have learnt the lessons from recent operations in Iraq.

"Alongside the modernisation of our conventional forces, as set out in last year's White Paper, the Government remain committed to maintaining the effectiveness of the nuclear deterrent including making the necessary investment at AWE Aldermaston, and to keeping open the options for a successor to Trident until a decision is required, probably in the next Parliament.

"In addition to the reductions in numbers of Armed Forces manpower we envisage reductions of around 10,000 in the number of civilian jobs. These flow from efficiencies as a consequence of the department's change programme and other initiatives. The reductions in Armed Forces and civilian manpower will be achieved as far as practicable through natural turnover. We will also retrain and redeploy personnel wherever possible. We have a commitment to enabling our people to develop their skills and abilities so that those who leave are well equipped for life outside defence and those who stay are properly trained for their roles. But inevitably there will be redundancies. We will use the normal consultation processes to achieve them.

"The White Paper makes clear that our Reserve Forces have evolved to become an integral part of the UK's military capability. We learnt many lessons from operations in Iraq about how we mobilise our reserves and how we need to strengthen the relationship between the services, reservists, their families and their employers. My honourable friend the Under-Secretary of State for Defence will make an announcement tomorrow about our plans to consult on proposals to update financial assistance to reservists when they are called into service and to compensate employers who incur additional costs as a result of their staff being called up.

"There will be those who will claim that the defence budget is under such pressure that it is impossible to sustain the department's forward equipment programme. In fact, the spend with industry will continue at the level of recent years. It is of the utmost importance that industry takes the maximum advantage of this substantial investment to produce what the Armed Forces need at a price that we can afford. We will take forward our defence industrial policy, implementing these changes, in conjunction with industry, to ensure a healthy and competitive defence industry that continues to play the leading role in our economy that it enjoys today. I am confident that it will respond to this challenge.

"For the third successive spending review, this Government have been able to announce real growth in the defence budget. This is without precedent since the mid-1980s. Even with these additional funds it is necessary to secure maximum benefit from efficiencies and make choices to ensure that our force structure matches the requirements of today's security environment. The plans that I have announced today show this Government's determination to make the choices necessary to ensure that the real growth in defence expenditure is targeted at what the Armed Forces require in the 21st century rather than what they have inherited from the 20th. They will ensure that the Armed Forces are equipped and trained to continue to perform with success in the future those tasks which they have so admirably undertaken in recent years".

My Lords, that concludes the Statement.

3.55 p.m.

Lord Astor of Hever

My Lords, I am very grateful to the Minister for repeating the Statement. We on these Benches join the Minister in paying tribute to the dedicated members of our Armed Forces. We remember the 61 servicemen killed in Iraq and are thinking of their families.

This Statement is an important one, as are all Statements on the defence of the realm. But like so many Statements that this Government have made, it is as important for what it fails to tell the House as for what it tells us.

We welcome the announcement on Watchkeeper and the C-17s. We welcome some of the steps to be taken to rebalance our Armed Forces for the threats of today and tomorrow. However, the announcement is about cuts. Members of the House and the Armed Forces should prepare themselves for continuing cuts in the months to come. The Government must not think that, by announcing cuts the day before the long recess, they will be able to draw a line under this. No, this is an issue that deserves respect and consideration. Accordingly, I ask the Minister to convey our request that there should be a full defence debate at the earliest opportunity.

We were told last week by the Chancellor of the Exchequer of the resources to be allocated to defence over the next few years. We are now looking to the Minister and his colleagues to explain how that money will be rationed out, for it will have to be spread pretty thinly. We are short of hard figures, numbers and dates. We need to know the truth, without spin, about numbers being recruited into the Armed Forces; how the trained strength is developing; and how retention figures compare with those for premature voluntary retirement.

We need to know how the Army is to be reorganised. It is the regimental system that gives the British Army its character and makes it much more formidable and efficient, man for man, than even the high-tech American army. We need to know about numbers of warships and aircraft. We need to know about new equipment, planned and coming into service. We look for assurances that the equipment programme is fully funded on the basis of realistic through-life costs.

We need to be assured that current equipment will not be taken out of service until the new equipment is in place, up and running. We admire the Minister's confidence that the new carriers will be deploying the JCA. We hope that there is no gap between the commissioning of the first carrier and the JCA entering service. May I ask the Minister about the position regarding the Defence Communication Services Agency, which has such a critical role in network-enabling our defence capabilities across the board? Can the Minister indicate a specific timetable for the thorough reorganisation of the Defence Logistics Organisation as a whole? Can he also confirm that there will be adequate and specific provision for the costs of large-scale joint exercises—activities of the greatest importance?

It seems to us that, in pursuance of their policies, the Government are prepared to make the fullest use of the Armed Forces, including the under-equipped reserves. However, they continue to begrudge providing them the resources that they need to do their job. The result is, as an Army officer told me yesterday, that they are working at a pace that is not sustainable.

We cannot predict where our Armed Forces will be fighting in 10 years' time, but we can predict that they will be fighting for us somewhere and that we will be counting on them to win. We must ensure that they are not only properly and fully equipped, but well trained and available in the numbers required to fight the wars that we cannot predict today. We shall, of course, be told that the service chiefs will say that we have the best for which we could hope in the circumstances; they are bound to say that. It is the grudging attitude of the Government towards the necessities of strong defence that makes the circumstances wrong.

In conclusion, I commend to the Minister and to the House the express views of my right honourable friends Michael Howard and Oliver Letwin, who have said: We guarantee to maintain the fighting capability of our forces. We shall ensure that they are provided with the necessary funds and equipment to carry out the tasks and commitments required of them. If that requires increases in defence spending, we will spend it".

4.1 p.m.

Lord Redesdale

My Lords, I also thank the Minister for that 3,500-word Statement. It is certainly the longest Statement that I have heard read out in this House; the Minister did well to do it without even a glass of water. I shall start by taking a sideswipe at my Opposition Front-Bench colleague. He almost asked for it with his last comment, saying that the Leader of the Opposition would spend more on defence without further taxation. That will be an interesting trick, and I would very much like to look at those figures.

It is welcome that the Government have committed to more spending on defence. However, their commitments to defence recently mean that the excess spending will be swallowed up quite easily. On wading through the Statement, I finally found the figure of 102,000, which is the number of men in the Army. That is the important figure that we have been trying to winkle out of the Minister with a number of questions in the past few weeks. It has been our suspicion that the Government were to reduce the number in the Armed Forces to 102,000, and that has finally been confirmed.

We are looking at a number of debates and questions in future about the disappearance of regiments. It is obviously very sad that a number will be lost. However, it is becoming increasingly obvious that there has to be a change to the infantry system. We would welcome something that led to a more rational and modern system to address some of the problems faced by infantry personnel. They have to move every three years on rotation, which has caused so many problems of overstretch, as has been raised in many debates in this House.

An area of the Statement that will have to be looked at again is where the Government talk about making savings away from the front line. That goes back to a policy introduced by the Conservatives called Front Line First. It could be quite a dangerous policy. Under Front Line First, money was pumped into front-line services, at the expense of support services. We very much hope that the Minister will take on board the lessons learnt through the almost annihilation of the Royal Army Medical Corps, which caused so many problems, especially as logistics was one area particularly highlighted in the NAO report on the last Gulf War.

The reduction in naval capability seems extremely stringent. It is not possible to look at those cuts without a careful eye. However, it is good that the Government are looking at not cancelling the carriers as yet. At this point, after the reviews, has the Minister worked out how large the carriers will be? That seems an issue of some concern, especially in the area of timing and cost. Has any progress been made with the Americans about technology transfer over the main armament of the carriers, which will be the Joint Combat Aircraft? On that basis, we welcome very much the introduction of Watchkeeper, and the fact that we will go with Thales. It seems ridiculous that we would go with an American company as, under the present legislation, some of the technology involved in those aircraft systems would not be revealed to us even though we were buying the system.

We support the A400M and the target date set out in the White Paper of 2011. I very much hope that the Minister can confirm that that time scale will not shift too much in future, although that may be difficult for him. We also support his words about the reservists and looking at financial issues that have arisen through their serving in the Gulf. On these Benches, we recognise the service given not only by regular servicemen in the Gulf, but by reservists. In that review, will the Ministry of Defence also look at the training of reservists? Although it is possible to talk about remuneration—that is an issue at the moment—it seems ridiculous and extremely unfortunate that the man-training days and the period in which reservists have been trained have been continually under threat for the past few years.

I welcome the Statement but, considering its size and detail—we have had only a brief time to scan it—I hope that the Minister will look as an urgent priority at introducing a debate on the White Paper.

4.7 p.m.

Lord Bach

My Lords, I thank both noble Lords for what they have had to say. Their mild and good manners, and the way in which they put forward their cases, are very much in the tradition of this House. However, their approach in thinking about the Statement covered one or two gaps as to what their respective parties—both ambitious for power, we are led to believe—would do if they found themselves in that position.

We will take away the point made by the noble Lord, Lord Redesdale, on reserve training and come back on it. So far as a debate is concerned, both noble Lords know exactly what I am going to say—that it is a matter for the usual channels. We will see where that goes. The noble Lord, Lord Astor, asked about defence logistics and the transformation programme. We believe that it will revolutionise the delivery of support to all three services, improving the operational effectiveness and flexibility of such support and saving about £1 billion per year by 2008. I hope that that is some sort of answer for him.

I was asked about the size of the aircraft carriers, which will be the largest warships that this country has ever built. The noble Lord, Lord Redesdale, said that they had not been cancelled as yet. Perhaps that was a slip of the tongue; we have no intention whatever of cancelling them. I would like very much to hear what his party and that of the noble Lord, Lord Astor, have to say about that. No doubt in due course we will hear whether they will commit themselves, as we are committing ourselves, to those amazing ships.

The noble Lord, Lord Astor, quoted his leader and the shadow Chancellor of the Exchequer making a pronouncement that is very different—certainly in the shadow Chancellor's case—from what was said a few months ago. At that point, he made it clear that the only two departments to have their expenditure ring-fenced would be health and education. Indeed, I believe he said that there would be zero per cent growth for the first two years for other departments which, as the noble Lord heard me say before the announcement of the spending review, implied a cut of £1.5 billion. Now that figure is £2.6 billion. It is all very well for the noble Lord, Lord Astor, to quote what his leader and the shadow Chancellor may have said. But what does that actually mean?

We were delighted to hear the noble Lord say this afternoon that aid expenditure would be ring-fenced. This morning the shadow Secretary of State for Defence said that defence spending would be ring-fenced and we are also delighted to hear that. It is beginning to look as if everything will be ring-fenced. Perhaps I may give the noble Lord a word of warning. The experience of this side of the House was that we used to go into elections saying that everything would be ring-fenced, we would not cut anything and we would spend more on everything; but look where that got us. My warning is that we will be asking him and his colleagues over many months—

Noble Lords

Oh!

Lord Bach

My Lords, that was up until 10 years ago to the day when the Prime Minister became leader of the Labour Party. Then we began to tell the public what we would do realistically. That is why we are on this side of the Chamber and the noble Lord and his colleagues are, for the moment, on the other side. Please, let us have some realism from the party opposite. What does it intend to do regarding defence? We have absolutely no idea what its policy is. It is about time that we were told.

Regarding the Liberal Democrats, I am afraid that I have absolutely no idea what their defence policies are and what they stand for because we hear completely different versions of their policy depending on whether they sit in this House or whether they are engaged in by-elections. There was not much Liberal Democrat support for the Armed Forces at the time of the recent by-elections.

Baroness Park of Monmouth

My Lords, with the utmost respect, will the Minister recognise that we have a very short time to ask questions on an important issue and we do not, as a House, wish to hear a series of party statements? We are concerned about defence. I should be grateful if the Minister would refrain from discussing various party issues and let us get on with defence.

Lord Bach

My Lords, I am grateful for the noble Baroness's intervention. I always listen carefully to her comments. But the time that I take in responding to what I believe were party points from both the other Front Benches—

Noble Lords

No!

Lord Bach

My Lords, they were. That time will not influence at all the time that the Back-Benches in this House will have to ask questions in a few minutes' time. The time that I take will not eat into the valuable Back-Bench time.

I wished to make the point that on the streets of the cities where the by-elections were held we heard nothing at all about praise for the British Armed Forces either in this country or in Iraq. We heard crude anti-Americanism and, "Get the British troops out of Iraq as soon as possible" At least the political party Respect does not speak with two tongues.

Lord Redesdale

My Lords, the Minister said that our policy was to get the British troops out of Iraq as quickly as possible. After the handover of power, I thought that that was the Government's policy, too.

Lord Bach

My Lords, if the noble Lord had been on the streets to which I referred, he would have heard his people say that we should get out of Iraq now rather than at some time in the future. It would be helpful if the Liberal Democrats could speak with one voice rather than many, depending upon where they happen to be. We would listen to what they have to say on this important matter if they were slightly more consistent with what they said elsewhere.

In summary, I detect from the attitudes of the two noble Lords to my comments that they require a longer time to examine the contents of the Statement and then to come to their judgments. They are entitled to that. But I do not think that they disagree that we need to modernise our Armed Forces, that we need to spend within the resources allowed for them and that sometimes that means that hard choices have to be made. That was the case when the party of the noble Lord, Lord Astor of Hever, was in government; it is the case now that we are in government; and, I am afraid, it will be the case for evermore. This document goes a long way towards modernising our Armed Forces. It follows what we have said before and I am grateful to both noble Lords for their comments.

4.15 p.m.

Lord Craig of Radley

My Lords, I thank the Minister for repeating the Statement. These are major changes. A Statement with brief questions does not give the House any opportunity to consider them in depth. So, I, too, strongly support the request for an early debate on defence and security.

The Statement reveals some welcome new capabilities that lie in the future. Meanwhile, are we not taking a major strategic risk by cutting back and withdrawing capabilities long before the new systems are operational? Is there not a basic contradiction in the Government's position? If we are to operate alongside the US, they will rightly expect from us not only technical synergy but also a reasonable contribution to the joint effort. Have these proposed cuts been explained to the United States?

Has any allowance been factored in for losses? We have been fortunate in recent conflicts, but the lessons of the Falklands with the loss of eight highly capable naval platforms and all but one large helicopter inflicted by a far from world-class air force must not be forgotten. So I deplore the major reductions proposed in naval and air platforms before new capabilities are available.

Finally, what chance is there that these changes will see an end to year-by-year snap savings in recruitment, training and exercising, which are hurriedly adopted to stay within cash limits but enormously inefficient and wasteful of defence effort?

Lord Bach

My Lords, I respect the noble and gallant Lord's concerns in this field. I can say only that we are confident, as are the Chiefs of Staff, that the balance of today's proposals will not have the adverse effect that the noble and gallant Lord fears. We cannot wait until all-new equipment is on stream before beginning to reduce some of the assets that need to be reduced. That has to happen at the same time. We do not believe that his fears will be realised and I want him to believe that careful judgment has been taken over a long period to establish exactly where the balance lies. I should emphasise to the House that these Government proposals have the absolute backing of the Chiefs of Staff.

Lord Renton

My Lords, perhaps before asking my question I should mention that I lived through the World War 1 and served in the territorials throughout World War 2. I am conscious that however good our regular Army is—and it is splendid—we always have to have big enough reserves and a big enough Territorial Army. What steps are the Government taking to ensure that the Territorial Army is not only big enough, but also well enough trained and equipped?

Lord Bach

My Lords, regarding reserves, the lengthy Statement talked about the vital role that reservists are playing within the Army. It is arguable that they have never had to play such an important operational role as they are playing now. The noble Lord, Lord Redesdale, asked about training for reserves and I promised him that I would take that back and ensure that the position is reviewed.

I made it clear that my colleague Ivor Caplin will make a Statement on future reserves tomorrow and that the role they play now is enormously important in the fighting force that the UK Armed Forces provide. We are determined that they will not have a more difficult time in their capacity as reservists—in other words, we are determined that their employers will be satisfied by the terms that they are offered when their people are taken away. We shall continue to ensure that reservists, who are often of great importance in the enabling roles where there are sometimes shortages in the Regular Army, are employed in a proper and full way. The future for the reserves is extremely promising.

Lord Truscott

My Lords—

Lord Guthrie of Craigiebank

My Lords—

Lord Inge

My Lords—

The Minister of State, Foreign and Commonwealth Office (Baroness Symons of Vernham Dean)

My Lords, we have heard a point from the Cross Benches. It is now the turn of this side to ask a question. We shall then no doubt hear from the Liberal Democrats and I am sure that there will then be an opportunity for a question from the Cross Benches.

Lord Truscott

My Lords, does my noble friend recall that in the Kosovo conflict the European members of NATO struggled to provide 40,000 combat-ready troops for peacekeeping duties, even though that was one-fiftieth of their total Armed Forces? Does he agree that what this country needs is a modernised and readily deployable 21st century military based on precision weapons and network capabilities able to fight the battles of the future rather than the past? Does he concur that the Government's seven years of real-terms increases in defence spending contrast starkly with the Tories' planned real-terms cuts, despite the U-turn announced today? Does he agree that those cuts would decimate the armed services and threaten the country's security?

Lord Bach

My Lords, my noble friend will not be surprised to hear that I basically agree with what he says. I do not understand why there are groans around the Chamber. In our turn, when in opposition, we were attacked all the time by parties opposite for not having a credible defence policy. From this side, we are simply saying mildly that neither of the parties opposite has a credible defence policy, and this White Paper makes it clear that we do. I agree very much with what my noble friend said.

Lord Steel of Aikwood

My Lords, does the Minister accept that many of us in this House who do not have military experience were none the less very impressed a few weeks ago by the words of someone who does have much military experience; namely, the noble and gallant Lord, Lord Bramall? He said that the one thing we should not cut at a time of modernisation and uncertainty regarding future threat is the number of people. That seems to run counter to the Government's Statement. Does the Minister also accept—I speak as someone who represented the Scottish Borders for many years—that on the ground the importance of family pride in a particular regiment is a significant factor in recruitment and that, in cutting numbers, the Government should be careful that they do not throw away important parts of our heritage?

Lord Guthrie of Craigiebank

My Lords, notwithstanding—

Lord Bach

My Lords, if the noble and gallant Lord will forgive me, I believe that his question may be somewhat similar. I do not know why I say that but I think that it may be. Of course, I listened carefully to what the noble and gallant Lord, Lord Bramall, said some weeks ago and he certainly made an important point. I want to try to explain why we believe that the numbers that we have decided on are appropriate—in particular, so far as concerns the Army.

With regard to the organisational changes in the Army, we believe that we can move from a manpower requirement of 108,000 to one of 102,000. At present, I should tell the noble Lord that the figure is 103,500. We believe that we can make that move because organisational change, the introduction of the new capabilities and equipment and the revised timing assumptions, which are made on the basis of the strategic environment as we now see it, have allowed us to reduce the Army's manpower requirements to that limited extent.

However, the strength of the Army will remain broadly as it is today until full normalisation is achieved in Northern Ireland. The noble Lord will have heard me say that four battalions are being taken from Northern Ireland, and the reduction referred to in the Statement is predicated on full normalisation there. For those reasons, in the balance that we have to make here—the noble Lord will accept that all these decisions are ones of balance—we feel that what we are suggesting is a very minor decrease.

Lord Guthrie of Craigiebank

My Lords, first, notwithstanding the Minister's remarks about real growth, defence is facing cuts and those cannot be disguised as anything else, however hard Ministers try. But growth is not sufficient. What is the reason for the cuts? Is it purely financial? If it is, I think that that is surprising, considering that the Government continue to express great confidence in the economy.

Secondly, in view of the very many commitments that the Armed Forces have today and are likely to have over the coming years, no government of late that I can think of have used the Armed Forces more often and in more different places. I am delighted that the Chiefs of Staff, like the noble and gallant Lords who were also once Chiefs of Staff, are loyal to the Government. But I have talked to a large number of people who are not Chiefs of Staff and I get a very different picture. They believe that, if the forces are to be used, they should be funded properly.

Lord Bach

My Lords, anything that the noble and gallant Lord says is well worth listening to. But I reject his suggestion that defence spending is not rising. It is rising each year. As he knows, the Chancellor has allocated an extra £3.7 billion to defence up to the year 2007–08, and that represents average annual real growth. Of course, every department would like more money than it receives. But we are content that this is a generous settlement and we realise that we have to work within its confines.

The noble and gallant Lord described the attitude of the present Chiefs of Staff as "loyal". I think that it is a matter of rather more than loyalty. With regard to some fields—for example, the future Army as it is envisaged—that attitude is very much in line with the view taken by the Army Board in terms of the infantry. I hope that the noble and gallant Lord will accept that these decisions are not only politically led; they are taken, as they were in his time, jointly by the politicians, the military and the Ministry of Defence.

I accept that for many of our people the changes may be unsettling. These are difficult times. But I hope that the noble and gallant Lord will accept that, within the resources allowed to us—as I said, there is real improvement in that respect—we have done our very best to get the balance right between what we need to do to ensure that our Armed Forces can meet the needs of the 21st century and, at the same time, ensure that taxpayers' money is properly spent.

Lord Burnham

My Lords, the noble Lord, Lord Redesdale, asked the Minister the size of the two aircraft carriers. He did not receive a reply. In the original Statement, we were told that it was 65,000 tonnes. Since then, rumours and statements have been circulating widely that it is 55,000 tonnes. The difference in capacity and capability between those two sizes is fundamental. Can the noble Lord say which it is?

Lord Bach

My Lords, I cannot say which it is because no final decision has yet been taken. The noble Lord will know that in the very important assessment phase of a project such as this the key design parameters are established. Those include the size as well other aspects of the aircraft carriers. But the noble Lord and others can rest assured that these will be the largest warships that this country has ever built. They will be extremely large. I cannot give the noble Lord the tonnage or the size at present, but it would be surprising if I could. We are still working out the requirement and how we can best meet that important requirement. However, I can say that the two new aircraft carriers will form the basis of our future naval defence policy.

Lord Gilbert

My Lords, I congratulate my noble friend on at least one thing; that is, his recognition of the fact that investment in what I believe is now called C4I is an absolute and total priority, and it is that which is forcing us to make some of these very unwelcome cuts in the numbers of platforms.

My noble friend said that in some cases more capability could be delivered from fewer platforms. That is certainly not the case with strategic air transport. I therefore welcome what he said about the C17, although he did not go nearly as far as I would have liked. Can he confirm, as it was not quite clear from what he said, first, when or if this mythical A400M will appear—I am prepared to take a substantial wager with my noble friend that that will not be when the Liberals think it will be—that there will be no question of getting rid of our C17 fleet at that time? Secondly—I do not expect my noble friend to have this answer at his fingertips, but I should be grateful if he could inform the House—how many Typhoons will we have to give up in order to get another five C17s?

Lord Bach

My Lords, as far as concerns the first question, I hope that I made clear when reading the Statement—if I did not, I am sure that it was my fault—that the aim is to have those C17s working alongside a fleet of C130s and A400Ms. I hope that that gives some satisfaction. As to my noble friend's second, rather hypothetical question, he is quite right: I am unable to answer.

Lord Inge

My Lords, first, I thank the Minister for repeating the Statement. However, I hope that he will have recognised from the debate we have had so far and from some of the detail we have gone into, the need for debate in this Chamber on defence issues, which are so important, not only to the Armed Forces but to the nation as a whole. Such debate is to be greatly encouraged.

I hope the Minister also agrees that although some restructuring has taken place, it will not be welcomed by all elements of the Armed Forces. The question of morale in those areas will need careful handling, as it will have a knock-on effect.

I welcome much of what was said by the Minister about the importance of network-centric warfare and the need to improve our operational, expeditionary warfare capability. The problem is that much of what is promised is "jam tomorrow" in terms of the Future Rapid Effect System for the Army. That vehicle has not even been designed, let alone being ready to come into service. So, much that has been promised is a long way down the track.

I recognise also the rebalancing that is needed for command and control and operational logistics. Equally, I believe that cutting Army manpower is part of the real problem. Taking it down from 103,500 to 101,000 creates part of the problem. What I really do not understand—I am not talking about the reorganisation of the infantry—is the need to cut four infantry battalions out of the order of battle, given that they are the workhorse of the Army. They may not be needed for network-centric warfare, but they will be needed to help keep the peace in places such as Africa, the Balkans and elsewhere. I stress that I am not talking about the reorganisation of the infantry—my own regiment is very vulnerable—but about a skill that the British Army has that no one else has. We are in danger of taking four very important major units out of the order of battle. I should like to hear the Minister's reaction.

Lord Bach

My Lords, I am grateful to the noble and gallant Lord, who always talks with huge experience on these matters. I understand that the feeling that there is a need for debate is high all round the House. I shall pass that on, but it will be a matter for the usual channels.

We are all aware in the Ministry of Defence and the Armed Forces that morale is very important when a Statement such as this is made. The noble and gallant Lord will understand that the Chief of the General Staff is very aware of that fact and is no doubt acting on it as we speak.

Many of the plans that we have will emerge only in some years' time. The noble and gallant Lord knows better than most how long it takes for equipment to come into force, particularly sophisticated, modern, complex defence equipment. However, we have to start and to continue with the projects that we have in mind. I can only repeat that the proposed reductions in the Army are very small. They are predicated on full normalisation in Northern Ireland. The balanced view is taken that, as things are in the Province at present, it is sensible to remove four battalions, and as things are elsewhere, it is also a sensible thing to do for the total Army.

Lord Garden

My Lords, does the Minister recognise that this is the fourth major rebalancing of the Armed Forces in the past 13 years, all of which have affected and reduced platforms and personnel? Can he explain what is special about his proposals that overcome the defence inflationary effect; that is, the fact that costs of defence rise faster than normal inflation? Can we expect yet another rebalancing exercise in the next four years?

Lord Bach

My Lords, I am grateful to the noble Lord. I did not know that this was the fourth such exercise in that time. He, no doubt, took part in a different role in the first three. I cannot promise for a moment that this is the last, but it is one of the most important. We have reached a point where, as has been said in the Chamber today, quite rightly, our Armed Forces have been asked to do a great deal in the past few years, and we have learnt a number of lessons which perhaps took a long time to learn after the Cold War; that is, what sort of warfare or peacekeeping we would need in the years ahead. That is the basis for the changes that we suggest today.

We accept that when full structure changes are made, as the noble and gallant Lord, Lord Inge, said, these issues are of great concern to those who serve us so well in the Armed Forces. However, it is important that the Armed Forces in this country evolve. They have evolved from time immemorial. That is the only way they have retained their skill and high reputation. I do not apologise if this is the fourth such exercise in 13 years. We have to ensure that we have the right structure for the difficult years ahead.

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