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The Deputy Prime Minister and First Secretary of State: My hon. Friend makes a valuable point about getting all the stakeholders involved. It is not just a simple matter of encouraging local authorities to do more; we must include the private sector, including the builders. We must also consider the argument about whether the land is being held back, or whether it is being used for a better purpose that is to the advantage of the community.

On high density, I take the point that the previous Administration reduced the average to 20 houses per hectare. However, I said before that the housing situation has been declining for decades under all Administrations

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and we need to make that step change. I tried to address the issue of high density when I came to the House two years ago to announce some of these matters. The average for the south-east appears to be 24 per hectare, but in Islington, or elsewhere in London, there are areas of Georgian property where the density is 80 per hectare, yet prices are going through the roof. The millennium project community in Greenwich has a density of 90 per hectare. That is an example of what good design and an imaginative approach can do in bringing some of these issues together and that is what I must try to do.

Mr. Ian Taylor (Esher and Walton): The Deputy Prime Minister has touched on a difficult problem. In my constituency in Surrey, the average house price is more than £300,000 and there are social housing problems. However, I am concerned that if he is going to override the local authority, there must be a judgment as to how best to deal with it. We cannot just have new houses built at 30 per hectare in a constituency that does not have brown land. That will mean that in-filling is the only way. Is the Deputy Prime Minister proposing to call in all plans and then impose further density restrictions? I have to tell him that the infrastructure locally is under strain and that it would be better for him to boost the payments to Surrey county council so that we have a greater social services spend that we can use.

The Deputy Prime Minister and First Secretary of State: The hon. Gentleman makes an important point. I am not satisfied that all the brownfield sites have been identified. One of the curious things about housing is that all of the land that may be available for housing is not recorded in a form of land bank information. I have asked English Partnerships to see whether we can find more.

On the question of the density of housing per hectare, in the south-east, the average is 23 to 24 per hectare; that is the lowest of any developed economy. I do not believe that we cannot lift that higher than 23—say to 30, as I am suggesting, as a minimum—and, with good design, still get good quality housing. We can do that, but I suspect that it will be more profitable to build executive houses at 23 or 24 per hectare. I still think that a density of 30 per hectare can be profitable, and I am quite prepared to discuss that.

The hon. Gentleman asks what happens if the local authority does not agree. The answer is that it is the same whatever the number is. Let us say that the number was half what I announced for the south-east; there would still be some who said that they did not accept it. The responsibility is to find homes for people who live in areas with problems of supply and demand, where we are left with the kind of problems that we have at the moment.

Joan Ruddock (Lewisham, Deptford): I congratulate my right hon. Friend. How much money will come through the Housing Corporation in general, and how much through the Housing Corporation in London? Can he assure me that in multicultural areas such as mine, registered social landlords will still be able to build larger housing units because, in those communities, the larger family is still the norm and Londoners are six times as overcrowded in their housing as people in the rest of the country?

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The Deputy Prime Minister and First Secretary of State: I recognise the point made by my hon. Friend about overcrowding in London and the desperate need for housing. That must be a high priority. The mayor has made the position clear in his statement and we will be doing what we can to help. We have provided £1.5 billion extra for housing, which is a sustainable increase. Some of that will be going to the Housing Corporation, but I said earlier that I want to talk to the various institutions that have a role to play to see how the money will be used. We have made more money available and we must be sure that it is used effectively.

Mr. Simon Burns (West Chelmsford): Can the Deputy Prime Minister clarify the position with regard to Stansted and the Stansted corridor? Does he anticipate much of the housebuilding being concentrated on the immediate area of Stansted? How far into the hinterland of Essex, and particularly mid-Essex, might that corridor extend? What bearing will the right hon. Gentleman's statement have on the draft plan inquiry that is expected to be held next year in Chelmsford on its existing housebuilding proposals?

The Deputy Prime Minister and First Secretary of State: I am very much involved in the planning responsibilities, so I cannot answer that question. However, I will see if I can give the hon. Gentleman a more informed answer about the inquiry. With regard to the study of the M11 corridor—Stansted-Cambridge—that is an important matter and I have announced today that it is one of areas on which we want to concentrate. I have only just received the report and I cannot answer him now, but it is an area that we have identified. One of the significant features of development in communities is that airports are a very important part of regeneration.

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Strategic Defence Review

2.35 pm

The Secretary of State for Defence (Mr. Geoffrey Hoon): Following the appalling events in New York and Washington on 11 September last year, I launched work on a new chapter to the 1998 strategic defence review, designed to ensure that our defence policies, capabilities and force structures matched the new challenges that were so vividly and tragically illustrated on that day.

The SDR recognised the potential threat from new forms of terrorism. It recognised such asymmetric attacks as one of a range of tactics that an adversary might use. But the attacks on the United States showed that such attacks could have strategic effect. We have consulted as openly and widely as possible on the new chapter. In February, we published a discussion paper outlining some of our emerging thinking. Last month, we published a further discussion document, setting out proposals for enhancing the role of our volunteer reserves in home defence. Rarely has a defence White Paper had contributions from so many individuals and organisations. I am grateful to all of those, especially in this House and the other place, who have contributed.

Today we are publishing that groundbreaking White Paper, setting out further and more detailed conclusions, particularly in the area of capabilities to counter terrorism abroad. The White Paper covers a wide range of defence issues, but central to them is the way we want to use our forces against a determined, mobile, often disparate and elusive enemy. We must be able to get the right forces quickly to where we need them, make better use of intelligence to identify the threat, decide how to deal with it and then strike, decisively. This is known as "network-centric capability", but it can be summarised more simply as "detect, decide and destroy". It means being able to strike hard and fast, cutting down the enemy's time to think, plan and act. I will explain later how we intend to achieve this.

First, I should like to deal with the budget planning on which our ideas are based. The Government have already made £359 million available to fund operations in and around Afghanistan, including the cost of the new equipment our forces needed for these specific operations.

Further significant resources will be made available during the current financial year to enable us to manage the pressure arising from the high levels of activity in which we are currently engaged. But the new chapter is about planning for the longer term. International terrorism and other asymmetric threats are long-term challenges. To plan effectively, we need a solid foundation of resources. I am delighted to say that the results of the spending review—set out by my right hon. Friend the Chancellor of the Exchequer earlier this week—provide an excellent basis from which to take forward our commitment to strong defence. It represents the biggest sustained real increase in defence spending plans for 20 years.

The defence Budget will rise by £3.5 billion by 2005–06 compared with this year. This means growth in real terms of 3.7 per cent. over three years; around 3 per cent. in 2003–04 alone. Within this settlement, the Government are making available over £1 billion of new capital and a £0.5 billion increase in the resource budget for the

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equipment and capabilities that the armed forces need to meet new challenges. It provides a mandate for accelerating the modernisation and evolution of the armed forces.

To ensure that we maximise the resources available to deal with new threats, we are taking further steps to improve the efficiency and effectiveness with which we deliver defence outputs. The defence change programme is focused on reforming the Department's business processes. It covers projects across defence, particularly logistical and supply systems and information systems. Recent operations have underlined the crucial contribution of our logistical organisations in supporting operations over long distances. Our aim is to continue to drive down overheads in order to maximise our front-line operational forces.

Since the events of 11 September, all areas of government have been involved in enhancing our arrangements for dealing with the threat from international terrorism. The Government have developed a broad-based strategy aimed at tackling international terrorist groups, ranging from cutting off their finances, through law enforcement, to military action. We recognise that a successful campaign will need to address the origins and causes, as well as the consequences, of international terrorism.

The armed forces have two principal roles in countering terrorism: home defence and action overseas. Although assisting in the defence of the United Kingdom is a key element of the campaign, long experience indicates that a wholly defensive posture will not be enough. Terrorism thrives on the element of surprise, and one of the key ways to defeat it is to take the fight to the terrorist. We must be able to deal with threats at distance—to hit the enemy hard in his own backyard, not in ours, and at a time of our choosing, not his, acting always in accordance with international law.

As well as helping to deal with the long-term causes of terrorism, we have identified several ways in which our armed forces, in partnership with other areas of government, can contribute towards a long-term campaign: first, by helping to prevent terrorism emerging; secondly, by deterring terrorist groups and states that might harbour or support them, or to coerce states to stop harbouring them; and thirdly, by disrupting terrorist groups and, in the last resort, destroying them. Our ability to operate alongside the United States and other allies, especially in Europe, will be essential to our future success. In the United Kingdom we have certain capabilities which many of our allies do not possess. Others, equally, can bring their own skills and equipment to the table. That role specialisation is crucial if we are to provide the overall military capability that future operations require. For example, at Bagram airbase in Afghanistan, Spain provided an excellent hospital facility, while the Jordanians and the Danes provided crucial mine clearance specialists. Other nations provided other specific capabilities. The overall effect was quickly to create a base on a scale that no single nation could have matched.

To be able to make such contributions, armed forces need to be ready to undertake three types of military tasks. First, there are stabilisation operations, for example the kind of operation undertaken by the interim security assistance force—ISAF—in Kabul this year and in Macedonia in 2001.

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Secondly, there is deterrence and coercion. If an established state is harbouring or supporting a terrorist group, it may be necessary to threaten the use of force. Potential aggressors should know that we will use all our resources, military and non-military, to deal with their activities, reduce their chances of success, and ensure that the United Kingdom can act to defend itself and its interests. Aggression against us will not secure political or military advantage, but will invite a proportionately serious response.

Thirdly, there are find-and-strike operations such as those undertaken by the US-led coalition in Afghanistan. If terrorist groups continue to operate and to pose a threat, it will ultimately be necessary to disrupt and destroy them. Operations can range from interception at sea, which requires specialist boarding capabilities, to engagement by combat troops or with precision weapons.

We recognise that in future we may have only fleeting opportunities to strike at the enemy. That is where network-centric capabilities come in. Terrorist groups show themselves as little as possible. As Afghanistan has shown, it is vital to have the best available intelligence and communications to allow a rapid decision about when and where to attack. We need to be able to identify the enemy fast, then bring the necessary weaponry to bear in the shortest possible time. We need the sensor and the shooter to be better linked by a real-time network—we want to be able to detect, decide and destroy. That requires extra investment in airborne and other sensors, so we will upgrade the E3D AWACS aircraft. It also requires extra investment in networks to pass information quickly to allow strikes by sea-launched or air-launched missiles, by artillery, or by troops on the ground. That will give us more control of the battle space, hunting down the enemy, identifying targets, then hitting them hard.

Unmanned air vehicles will play an important part in the system. US forces in Afghanistan demonstrated how effective they can be in providing persistent surveillance of the battlefield or theatre of operations without putting the lives of aircrew at risk. Some of the American UAVs also provide an attack capability. I can announce today that we are accelerating our own UAV development programme—known as Watchkeeper—and will invest in state-of-the-art technology in that area in coming months. We have learned a great deal from the use of our Phoenix UAV in the Balkans, a system which was designed as an artillery spotter, but quickly took on a far wider intelligence-gathering role. Advances in datalink technology mean that modern UAVs offer greater potential for improving operational effectiveness. Certain issues of commercial sensitivity surround the Watchkeeper programme, but we expect shortly to select the two consortiums to work with us on the next phase of the project.

I can announce that we are setting up a new joint service trial to begin testing prototypes of the Watchkeeper system early next year. We will evaluate additional enhancements to our target acquisition and strike capabilities to enable them to operate 24 hours a day, in all weathers, and to enable rapid retargeting.

The work on the new chapter has also confirmed the increasing utility of special forces. It is not our policy to comment in detail on those forces, and I do not intend to do so today. However, I can say that we will be enhancing the capabilities of our special forces, particularly their key enablers, maximising their utility and flexibility.

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The strategic defence review said that the size and shape of our armed forces should be determined principally by the requirements of operations in Europe, the Gulf and the Mediterranean. But terrorist groups such as al-Qaeda can operate worldwide and tend to hide in remote, ungoverned areas. Some small-scale operations may need to be conducted both further away and in areas with little or no local infrastructure. I can tell the House that we are looking at the use of more rapidly deployable and sustainable light forces and ways of improving their mobility and firepower. Operations in Afghanistan have again shown the importance of support helicopters, and we are examining possible enhancements in that area. We are also pursuing the concept of a family of air transportable medium-weight armoured vehicles—the future rapid effect system. In addition, we will accelerate the introduction of additional temporary deployed accommodation for our troops and further improve its hot weather capability.

We will also need to deal with a greater risk that terrorists will acquire chemical, biological, radiological—and potentially even nuclear—devices. We need specific capabilities to deal with such devices safely and to ensure the protection of our own deployed forces—and, indeed, of wider United Kingdom interests. Detailed techniques will have to remain secret, but I can say that we will acquire appropriate technology to meet the threats from CBRN weapons that we may face in the future.

There has already been some speculation about what the new chapter work might mean for the structure of the armed forces. I emphasise that it is focused on ensuring that we have the capabilities that we require. That will probably need some adjustments in order slightly to rebalance the force structure, but there have certainly been no decisions about any specific changes.

In the United Kingdom and in our overseas territories, domestic security is the responsibility of the civil authorities, particularly the police. When the armed forces are used, it is at the specific request of the civil authorities. We are therefore strengthening arrangements for liaison with the civil authorities at national and regional levels of government by creating joint regional liaison officers to act as a single point of liaison on emergency planning matters. In addition, we will establish reaction forces of around 500 reservists from volunteer reserve units of all three services in each of 11 areas of the country—some 5,000 to 6,000 reservists in all. They will aid the civil authorities in handling major incidents, with individuals committing themselves to turn out at short notice for a range of duties, including site search and clearance, transport and communications, control and co-ordination.

We have already taken steps to improve the ability of the United kingdom's air defences to respond to threats from rogue aircraft. Further enhancements to our radar systems are in hand. We are investing in airfields across the UK—RAF Marham in Norfolk, RAF St. Mawgan in Cornwall and RNAS Yeovilton in Somerset—so that they can support quick reaction alert aircraft when needed. Those are in addition to the bases that are already able to operate such aircraft, and will give us greater flexibility in our air defence arrangements. We are also considering

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seaborne threats—the armed forces supported the civil authorities in intercepting a suspect vessel in the channel approaches in December last year.

In the new chapter work, we wanted to avoid placing unmanageable demands on our people. We recognise that for a considerable time many of our service men and women have been working at or near—in some cases beyond—the boundaries of what was planned in the SDR. They have borne those challenges with their customary professionalism and determination. So have their families. I take this opportunity to pay tribute to them for the way in which they have shouldered those burdens. The needs of our people are a top priority for us. We will continue to work hard to deliver the real and sustainable improvements that they and their families deserve. Simultaneous operations place a particularly heavy burden on our enabling forces—crew for strategic aircraft and ships, logisticians, signallers, engineers and so on. We will work to ensure that we do not ask more of them than is reasonable.

The new chapter to the strategic defence review provides a firm foundation for responding to the threats demonstrated on 11 September. Together with this week's comprehensive spending review, which provided the largest sustained real-terms increase in the defence budget for 20 years, the Government are ensuring that the United Kingdom's armed forces have the investment that they need—investment to deliver new equipment and enhanced capabilities and to be a force for good in the changing strategic environment. I commend the new chapter and the defence spending settlement to the House.

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