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Patrick Mercer: Might not it be significant that the Royal Air Force and the Royal Navy have settled family policies? Largely, families in those services live in one set of quarters for a lengthy period. In contrast, Army families tend to follow the drum. Although we all welcome the increase in pay recommended by the Armed Forces Pay Review Body, does the hon. Gentleman agree that we are yet to hear about the increases in accommodation charges that are bound to follow?

Mr. Keetch: The hon. and gallant Member makes a crucial point. However, although I may not have explained it properly, my point was that more marriages break up in the Navy and the Royal Air Force than in the

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Army. Your point, which is absolutely right, makes that disparity even more surprising. As you rightly say, one would expect that marriage break-ups—

Mr. Deputy Speaker: Order. I said nothing.

Mr. Keetch: I apologise, Mr. Deputy Speaker.

It is not just the nature of war that has changed over the course of the 20th century, but the nature of our society. Our armed forces are primarily made up of young people. I was privileged to visit the London university royal naval unit the other night. Some 50 young men and women in their first, second or third year at the university are going through the URNU course. Although one or two of them might join another service, about 20 per cent. will join the Royal Navy. It was interesting to talk to them and find out why they wanted to join the Navy, and what they expected of the service.

Almost without exception, those young men and women wanted to enter the service for a relatively short period. They did not see themselves staying in the service for as long as many of us might have expected. Other people were interested in the Royal Navy and prepared to spend time with URNU but not to join any of the services because they did not like the effect that they expected service life to have on their family life. Those young men and women had spent time at sea with the regular Navy and had spoken to people in the service but they were voting with their feet.

Those people are not distinct from the rest of society. Their values are those of the modern world. The House must be cautious about disregarding their values. We must not believe that things were better in the old days and that policies that worked when some of us served in the armed forces will work at present. That is not always so. When President Bush announced his substantial increase in defence spending, I was interested in the fact that a large part of it was devoted to family issues—pay, quarters and retention. It was not all about smart weapons, but about making sure that US forces were treated properly.

The Ministry of Defence must reflect on—and reflect—the modern world in which we live. All too often, we fail in that task. We must look after our armed service personnel. Armed forces pensions are a source of serious concern. Will they be fully funded? My question relates not only to the recent problems with tax deductions— I sincerely hope that they will be funded by the Treasury and not by the MOD—but to what is often regarded as the MOD's penny-pinching attitude. That has to stop.

We need minimum welfare standards on every base and they must be adhered to. We must have a service families charter, requiring delivery of standardised welfare services with annual reporting mechanisms. There should be a family officer on every base. There should be a review of the support offered to the forces family welfare organisations.

Much has been said about the Territorial Army and its home-guard role. I have enormous sympathy with the comments of the Chairman of the Select Committee. Will people want to join the TA if it is merely to be some type of home guard? I suspect that they will not. The principle behind the suggestion is reasonable, but we must ensure that homeland security amounts to more than sentry duty. The TA could be trained to deal with terrorist attacks and

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other civil emergencies. However, we must also maintain its specialist capabilities such as intelligence gathering, medical services and signalling.

We need a more co-ordinated strategy for our TA whereby we know the number of reservists who can be called up, rather than finding that only half of those called up are ready to be deployed. We need a co-ordinated, countrywide strategy to investigate where the addition of armed personnel would augment current security planning. That may not require enormous extra resources and might indeed save resources in other Departments, such as the Home Office. The TA could fulfil that role.

The SDR stressed the importance of flexible mobile forces. The new chapter repeats that. Under the SDR, the armed forces are expeditionary—able to move quickly and efficiently. We need procurement that is smart enough to give them the right equipment at the right price and the right time. I am deeply concerned that that will not happen with one procurement issue: the A400M.

I am a great believer in the project. I hope that it will work, but will the Minister of State answer these questions when he replies to the debate? Has the ability of the RAF to lease the four C17s been extended by two years as we have been told? Have negotiations been held with Boeing on leasing more C17s or indeed on purchasing the ones that we lease already? On what date will our ageing Hercules fleet cease to be significantly useful? Is he confident that the A400M will be ready to fill the gap? If he is not confident of that—whatever the reason—he should ensure that there will be aircraft to replace the Hercules fleet.

My hon. Friend the Member for Yeovil (Mr. Laws) asked the Chairman of the Select Committee a question about finance. The Secretary of State seems already to have fired his opening shots in the comprehensive spending review and if my hon. Friend, who serves on the Select Committee on the Treasury, catches your eye, Mr. Deputy Speaker, he will come back to that point. The Chairman of the Select Committee believes that an increase of 0.5 per cent. of gross domestic product is necessary. That would add between £4 billion and £5 billion to our defence budget, significantly increasing it above the rate of growth in the economy. If the right hon. Gentleman expects the Government to award that amount and will not be satisfied unless they do, there will be a significant increase.

Will the Secretary of State obtain that amount? Some people have talked about £1 billion. If the right hon. Gentleman does not obtain a significant increase, will we see tanks rolling from the MOD to the Treasury demanding funds before they roll into action elsewhere? Will the Minister tell us what amount is needed in the defence budget to enable our forces to operate not at the limits of their capacity—as the Secretary of State says—but within it?

The Government will soon have to take some difficult decisions. The provision of adequate resources for the defence of our citizens is the major responsibility of any Government. There is evidence that the programme outlined in the SDR may be unsustainable without an upward adjustment in defence expenditure or a reduction in capability. The efficiency targets of about 3 per cent. a year, which have been an annual feature of defence planning for more than a decade, will have to go. They are becoming progressively more difficult to achieve without reducing capability.

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Schemes for a more rationalised approach to defence have offered economies. The outsourcing of defence activities has reduced costs. A series of initiatives have attempted to reduce the cost of equipment procurement. If the Government decide against real-terms rises in defence spending at the next CSR, they will have to initiate a future equipment programme, within an affordable cost profile, so as to meet the security challenges that we have heard about today.

We all agree that the MOD must adapt to a changing world. It must be prepared for substantial change; for example, there has been discussion in the media about the role of the main battle tank. Maintaining defence spending in real terms results in capability reductions each year unless clear savings are made through procurement. Will the Minister tell us whether—if he does not receive a boost in funding—he is considering reducing our main battle tank capability? Is he even considering not ordering as many Eurofighters?

A modern defence policy can involve modernising our defence capabilities. If the changes are for the benefit of our armed forces and of our nation, the Liberal Democrats will offer the Government our full support. If the changes do not offer those benefits, we shall oppose them. One thing is certain: our nation will face a threat at some time in the future—the problem is that we do not know where, when, how or why. It is the responsibility of the Government to ensure that, when that threat materialises, we are ready.

3.38 pm

Harry Cohen (Leyton and Wanstead): It is a pleasure to follow the hon. Member for Hereford (Mr. Keetch) who made several interesting points that were well worth listening to and studying. However, I want to caution him about one point as regards language. He equated war and killing with "sexy missions". That is an inappropriate attitude and it should not be encouraged.

The events of 11 September were a tragedy on an enormous—perhaps incomprehensible—scale. The culture of any country subjected to such an attack in peacetime would be jolted and shocked. Having suffered those appalling attacks, the United States Government took several significant decisions about their future defence policy. Those decisions will have major repercussions for Britain and the rest of the world.

The Americans feel vulnerable and they want to show signs of strength to make themselves feel more secure. However, it is a symptom of underlying weakness if the answer is to threaten all and sundry. One could also argue that many terrorists will feel a sense of victory that they have so rattled the American Government. I would not want to give such vicious thugs any sense of victory.

The increase in defence expenditure proposed by President Bush means that the United States will be spending more than the 15 next-largest defence expenditures combined. But that money is oddly spent. For example, the Americans can find funds to build a new dispenser for their cluster bombs, but not to design a new bomblet that will self-destruct or make itself safe if it does not explode on impact with the ground. The faulty bomblets become land mines in all but name so their use is morally reprehensible, yet the Americans do not find that a priority for funding.

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The increased defence expenditure is paralleled by a new sense of US unilateral action. At present, Britain is America's strongest ally, but we should be careful as regards the extent to which we are willing to support America. The press is full of reports that the US plans a large-scale attack on Iraq. That would be an awful mistake and make the region less stable. It would also create grievance to an extent that could foster future terrorism. The Americans are also pressing ahead with national missile defence, a scheme that will eventually require British bases. The British Government should resist the temptation to approve the use of those bases, as NMD is likely to make the world less safe, not more so.

The US has also taken unilateral action on arms control—action that has undermined multilateral efforts. Controls on small arms and biological weapons have been weakened by American policies. Although arms control is not the whole solution to many of the problems, it is one of the most flexible tools available for promoting international security. It also sets international standards of behaviour. Without those standards, how do we assess what is right and wrong?

I do not say any of this out of a sense of anti-Americanism. Aside from the problems with certain weapons and tactics, the Americans have performed a valuable role in Kosovo and in Afghanistan, although I wish that they would do more for the humanitarian reconstruction there now. However, I have always regarded the fight against terrorism as having only a small military component. The major work has to be political and legal, including work to secure a peaceful, just outcome to the Israeli-Palestinian dispute and an international crackdown on money laundering and corruption. On the latter, Britain, with its connections with overseas territories and its wide range of trading partners, can play a key role.

More important, the Ministry of Defence can play an important part. There is an official British report that is reputed to include details of corrupt handling of funds in the biggest arms deal in which Britain has ever been involved. That report has been kept secret, one excuse being that the Ministry of Defence would want to keep it so. Perhaps it is time for the MOD to declare that it is happy for the report to be published.

That report was written by officials in the National Audit Office in 1992 and has remained secret ever since. It is said to be critical of the way in which commissions and kickbacks were paid as part of the Al Yamamah arms deal with Saudi Arabia. Coincidentally, John Bourn became head of the Audit Office at about the same time—having just moved from the MOD, where his responsibilities included the Al Yamamah deal. I understand that it was Mr. Bourn's decision to keep that report secret. I do not allege any wrongdoing on his part as an individual, but I fear that that does reveal a conflict of interest.

Al Yamamah is said to have made many unnamed individuals in Saudi Arabia very rich. It is also said that many unnamed individuals in Saudi Arabia have given substantial funds to support bin Laden. I cannot prove that there is any overlap between these two groups of unnamed individuals, but that is due in part to the excessive secrecy surrounding that arms deal. Some people have asked why, given that the report has been secret for so long, it should

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be released now. I would reply, "Because the truth deserves it, and because a Labour Government should not be covering up the Tories' dirty work."

I cheered at the news that the United States had declared Taliban captives in Afghanistan prisoners of war. Then it was soured for me by the insistence that that would not apply to the al-Qaeda captives. If it is deemed that they are a criminal gang, proper law should apply, with accepted legal rights afforded, and with transparent, fair trials. But the military action was proclaimed loudly as a war on terrorism, so I consider that the captives should be deemed prisoners of war and treated accordingly, with transparent custody arrangements in line with internationally accepted norms—in this case, the Geneva convention. In both cases, there should be proper prison arrangements without humiliating and degrading treatment or torture, and international inspection should be allowed.

In recent conflicts, the United States and the United Kingdom have not declared their military actions to be wars; indeed, they have specifically claimed that they are not wars. That claim, combined with the refusal of the United States to treat al-Qaeda captives as prisoners of war, has dangerous implications. UK and US troops in current or future undeclared wars, if captured, may not be afforded prisoner of war status and treated decently, and the current US precedent in Cuba could be cited.

I wish to make some points on defence costs. First, the fact that the United States is dramatically increasing defence spending does not mean that we should automatically follow suit. The last time that the US combined tax cuts with defence rises, under President Reagan, it went from being the biggest creditor nation in the world to being the biggest debtor nation in double-quick time. We should not follow that "going broke" route. Secondly, we should not indirectly subsidise the United States' NMD programme and its break with important arms control treaties by allowing it to shift some of its military objectives, which may not be our priorities, on to us.

Thirdly, the defence gap between the United Kingdom and the United States is now so huge that it can never be filled. Our defence spending comparator should be with other countries, not with the United States. Fourthly, with the ending of the cold war, and friendship with a far less military Russia, the "threat" is simply not there to justify spending on such a vast scale. Fifthly, we should not take part in a defence increases competition that triggers a new arms race.

I do favour defence increases in some specific areas, such as all-weather planes and equipment, better refuelling facilities, and more precision-guided weaponry as part of a process for ending the use of cluster bombs, but those increases must be justified, not generalised; otherwise—the public would say this too—the money is better spent on the national health service.

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