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Baroness Park of Monmouth: My Lords, I am grateful to the Minister for giving way. I hope that I have always made it clear in this House that I do not approach the subject from a party point of view. I have always acknowledged, for instance, as regards the defence costs study, that we were to blame. The point at issue is what the forces need. I do not make a party point.

Baroness Symons of Vernham Dean: My Lords, the noble Baroness is extremely kind to point that out. I recognise, as does the House, the great support that she gives our Armed Forces. In a debate of this kind I believe that I am justified in defending the fact that this Government have been far more generous to the Armed Forces than were our predecessors.

The White Paper describes some of the significant milestones that we have already achieved in delivering the SDR. I assure the noble and gallant Lords, Lord Bramall and Lord Inge, that we are making significant progress. The noble and gallant Lord, Lord Craig of Radley, asked for specific examples. We have already achieved an initial capability for the new Joint Rapid Reaction Forces. When complete, in 2002, the JRRF will enable us to deploy forces with a real capability anywhere in the world. It will draw forces from a pool of up to 50 warships and support vessels, four brigades and 260 aircraft of various types.

Last October, we set up the Joint Helicopter Command, which brings together almost all our battlefield helicopters and will command 16 Air Assault Brigade. It provides a real improvement in our operational effectiveness. The Joint Nuclear Biological and Chemical Defence Regiment has been created. The joint Rapier air defence training unit is now a reality. A new joint doctrine and concept centre is already up and running, and the Defence Procurement Agency opened for business last spring.

We said that we would do all those things and we have done them. The noble and gallant Lord raised the question about strategic lift. That is under consideration now and shortly I hope to be able to give a complete answer on that important point.

On 1st April Joint Force 2000--the joint Royal Navy/RAF Harrier Force--will be formed. It will combine both aircraft fleets in a single force under a single command able to operate either from land bases or from our aircraft carriers at sea. That is not about organisational neatness, but about real operational capability.

Aircraft carriers have been mentioned. Work was commissioned for them on 23rd November last year. What was not mentioned by any of your Lordships was the beginning of the procurement process on 12 destroyers. I assure the noble and gallant Lord, Lord Inge, that as the Minister primarily responsible

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for such issues I am not complacent. I am acutely aware of the importance of delivery of those important issues.

I turn now to the way in which the Government are tackling the acquisition of equipment and its logistic support programme--what we have called Smart Procurement. In addition to the DPA that was set up in April 1999, in April this year, the new Defence Logistics Organisation will go live. That brings together the individual service equipment support areas into a single tri-service organisation employing over 40,000 people. It will allow us to deliver the full benefits of our Smart Procurement initiative which is about providing fully effective through-life equipment, not just at the initial procurement stage.

Smart Procurement has already delivered significant improvements in defence procurement. Adoption of innovative support arrangements for Eurofighter and the attack helicopter are expected to save £1.8 billion and £700 million respectively over the life of those aircraft. The team working on the Challenger 2 project has already identified £200 million worth of savings. An estimated 30 per cent saving in time in arriving at a contract has been achieved in the Future Offensive Air System for the RAF, and the PFI Hawk Synthetic Trainer has been delivered to the RAF on time and to a budget 20 per cent cheaper than on a conventional procurement approach.

Such issues around Smart Procurement are not just tweaking the old MoD machine. They are a fundamentally new way of working. It is a way that calls for real commitment from Ministers, from officials, from the military and close co-operation with industry. I am happy to say that industry has been hugely helpful in the support given to us.

That is a very impressive programme of change, but as my noble friend Lord Hardy of Wath said, the House may be forgiven for thinking that that was hardly the case, given some of the sensationalised reporting that we have seen in recent weeks. I agree with the noble Baroness, Lady Strange, that there are some problems with equipment, but some of the reporting that we have seen on such points has frankly been enormously exaggerated. It is ridiculous to suggest that every piece of equipment that we have is the most modern money can buy. No army, now or ever, has been able to boast that. We know that the SA80 is a capable and accurate weapon, but we also know that it has some reliability problems in extreme weather conditions. Those problems did not start on 1st May 1997. That weapon was in use for 11 years before that date. The important point is that this Government have recognised the priority of ensuring that something is done about it.

Similarly, as the noble and gallant Lord, Lord Bramall, said, the Clansman radio has had problems. It was excellent when it came into service, but it is now showing its age. Its replacement, Bowman, was a procurement programme in deep trouble. When we came into office it was already 75 months late and still slipping. This Government have now put Bowman on a sound footing to ensure that the Armed Forces can

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have the new radio system that they deserve as soon as possible. We have even managed to bring forward the in-service date of the personal radio element of Bowman, reversing some of the delay that we inherited.

My noble friend also addressed some of the points around the Tornado mid-life update, something that attracted a good deal of press comment recently. Let me make it clear that the important point about that update is that it will be delivered on time and within budget and it will deliver the RAF an increased operational effectiveness. That update programme has not, particularly in Kosovo, diminished our operational capability, but it will ensure that our capability is enhanced.

There has also been much said about levels of activity, particularly for the Navy. We discussed this matter before Christmas in response to a Question raised by the noble Lord, Lord Burnham. Of course, the Navy has had to adjust its programme to keep within budget. It was ever thus. But this has been done without reducing the overall capability.

The Navy is not only going about its business as usual, but is entering a period of major deployment overseas. At the end of last month "HMS Illustrious" left for the Gulf at the head of a task group including a nuclear submarine, nine warships and 2,000 personnel. I had the privilege of visiting the ship last Sunday in Abu Dhabi. And in the spring HMS "Cornwall" will lead a global deployment--Navy Task Group 2000--which will be one of the most extensive in 15 years involving 10 warships, five auxiliaries and two submarines. That does not sound like a Navy confined to port.

There have also been suggestions that the RAF is being grounded in part. That too is grossly exaggerated. The RAF has had to be on deployment in the Balkans, Italy, the Gulf and the Falklands. That huge programme of activity is being maintained with no constraints due to finance, aircraft unavailability or pilot shortage. Again, it is business as usual.

I turn to the points raised by the noble Lord, Lord Bramall, the noble Baroness, Lady Park of Monmouth, and the noble Lord, Lord Glenarthur, in relation to the Defence Medical Services. There is indeed reason to have concern on those points. The cuts introduced in 1994 by the party opposite in the defence cost study shattered the morale of medical staff. That is why we--this Government--are spending £140 million making good the under-investment that we inherited. We are making good on the personnel side and on the equipment side over the four years from 1998 to 2002 with further funding continuing thereafter.

Despite serious manpower shortages, the Defence Medical Services is meeting all its operational commitments. I take this opportunity to pay tribute to the dedication and professionalism of all those working in the medical services. Their support is vital to our operational capability and we owe it to them to get this right. Ministers are acutely aware of the problems that have accumulated and we are doing our best to address them.

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The noble Lord, Lord Burnham, was quite right when he said that our most important assets are the men and women who serve in our Armed Forces. We made our Policy for People a central component of the Strategic Defence Review because we know how vital it is to recruit and retain the best people. We said that we would introduce measures to improve recruitment and retention, and I assure the noble Lord, Lord Watson of Richmond, that we have.

It is a tough challenge. Let us not forget what has happened to the numbers of men and women in our Armed Forces. In May 1997 the Army was undermanned by 5,000 people. On top of that, during the Strategic Defence Review, we identified a requirement for over 3,000 new posts. Nevertheless, we are making progress. Recruitment is buoyant. Last year recruitment figures for all three services were the best in a decade. This Government have worked hard to get the numbers up. But as the noble Lord, Lord Watson of Richmond, said, this is only half the equation. The key to tackling overstretch is to stem the flow of skilled people leaving the forces.

We owe the men and women in our Armed Forces a more stable and predictable pattern of life than they have been able to achieve in the recent past. It is because the level of duties has been so high that so many people have been leaving. We are determined to do something about that. I assure my noble friend Lord Williams of Elvel on that point.

We are making strides in reducing our commitments. The latest reductions in the Balkans, when fully implemented in the spring, will bring down the percentage of the Army preparing for, deployed to or recovering from operations to 28 per cent compared to the 47 per cent that we experienced at the height of the Kosovo campaign. That means that we will have reduced commitments below the level that we inherited. During that period our force levels in Bosnia will have fallen by over 2,500 personnel and those in Kosovo by 6,500. I hope that answers the point raised by the noble Baroness, Lady Park of Monmouth.

But reducing commitments is not always possible. We have responsibilities around the world and must discharge them. It is important therefore that the men and women who work so hard to make the world a safer place are well looked after. We have been trying to do that by improving deployment allowances; by increasing operational leave allowances; and by improving telephone allowances and access to medical services. Importantly also, the Government have implemented in full the pay rise to our service personnel every year.

We have also made real improvements to opportunities for personal development in the services through our Learning Forces Initiative, improving access to modern learning facilities like interactive learning centres and of course the Internet. Those measures provide skills for life, not just during an individual's career in the Armed Forces.

The noble and gallant Lords, Lord Bramall and Lord Inge, and the noble Lord, Lord Vivian, raised the important issue of training. Of course we recognise the

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importance of training at all levels--individual, unit and at formation level. We are committed to ensuring that our forces are properly trained. We have just embarked on a major review of training which will ensure that we maintain the highest quality in our training and that it is better integrated and more responsive to our needs. So we need no persuading on that point. We are absolutely persuaded that it is crucial to the delivery of our front-line capability.

The Strategic Defence Review is also modernising our reserve forces. Restructuring of the reserves will be complete by the beginning of April. The Government are committed to a strong reserve force for all three services. We are grateful to the noble Lord, Lord Glenarthur, for his recognition of the benefit of those forces to their employers and potential employers in the future--an important point made by the noble Lord. The reserve forces make a real difference to our ability to be a force for good in the world. They have proved their worth time and again; for example, in the Balkans where over 10 per cent of our resources were drawn from the reserves.

Following the SDR we have taken two key steps to make our reserves more useable. First, we set up the Reserves Training and Mobilisation Centre at Chilwell, which is a dedicated facility to handle the needs of the Army and individual reservists during mobilisation and demobilisation. Secondly, we completed the Reserve Mobilisation Study. That has shown clearly that compulsory mobilisation of reserves for peace support operations such as the Balkans can be done. It is legal; it is feasible. The reserves are there to be used and, if necessary, we shall be using them.

I should like to say something about European defence support, a point which mainly exercised my noble friends Lord Williams of Elvel, Lord Hardy of Wath, and the noble and gallant Lord, Lord Carver. Our starting point is that it is clearly wrong that Europe collectively should only be able to contribute a small proportion of the total forces required to solve a problem on its own doorstep. During operations over Kosovo last year we Europeans flew only one third of the total number of aircraft sorties during the campaign. We must not obscure the fact that it was American military power that gave credibility to the diplomatic campaign.

Of course, the majority of forces now operating under NATO command are from European nations. But deploying a force of a few tens of thousands--a fraction of the total military personnel available to us--on precisely the type of peace support operation which will be increasingly common in the future, has undoubtedly stretched Europe's collective resources. It raised some difficult questions. We believe that those questions must be confronted. That is why we have been doing the work we have with our European allies and partners. At the Helsinki European Summit in December, EU heads of state and government committed themselves to be able, by 2003, to deploy rapidly and sustain for at least one year forces of up to 60,000 strong for crisis management tasks as a

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contribution to a NATO-led operation. I assure the noble Baroness, Lady Park, that that is not something we envisage happening outside NATO.

Unfortunately, this relatively clear goal, this straightforward determination to improve European nations' individual and collective military capacity, has been muddled by arguments from commentators around it. But let me say categorically, as my noble friend Lord Williams reminded us, that we believe that our security in Europe rests fundamentally with NATO. NATO is our cornerstone. The alliance has been the guarantor of our safety for over 50 years and we have no intention of changing that. So I assure the noble Baroness, Lady Strange, that we have no intention of giving Eurocrats a role in our military command; we have no intention of moving to some sort of mini-NATO for Europe. We believe that it would be damaging to NATO and consequently extremely dangerous, not least to our own national interest. We have no intention of ruining an organisation that has reliably provided Europe with its security for the past half century. I can say categorically to the noble Lord, Lord Burnham, as I have done on many occasions in the past, that we have no intention of setting up a European army.

However, the US Administration on both sides of its political divide supports us on this. We have seen what has been said, not only by Strobe Talbot but also by Robert Zoellick, a key adviser to George W. Bush. So I hope that the position on what the Government are doing on this issue is clear to noble Lords. It does not simply mean spending more money. In any case, as was shown in Kosovo, Europe's problem is not so much the quantity of its defence spending, but its quality. We must generate more real and usable military capability. That is what we are seeking to achieve.

The noble Lord, Lord Renton, reminded us of his worries about service discipline and human rights. I recognise his concern. However, I can assure the noble Lord that the changes we are making are supported by the Chief of the Defence Staff and by all the Chiefs of Staff. I know that the noble Lord remains worried. For that reason, I should like to make an offer to him. Would he like to discuss this matter with me more fully outside your Lordships' Chamber where, perhaps, I shall be in a better position to demonstrate my points to him?

My noble friend Lord Williams of Elvel asked questions about the use of our Armed Forces in relation to trade. Yes, on occasion we do use our Armed Forces in this way. For example, they have provided a number of mine counter-measure vessels in the Gulf to ensure that trade lanes are kept free of mines. I believe that that is an entirely proper utilisation of our armed services. Of course they are also used in defence of our overseas territories, not only in the Falklands but, as I am sure my noble friend will recall, they assisted in aiding the difficult situation that was experienced not so long ago in Montserrat.

The noble Lord, Lord Chalfont, raised again issues over the Chinook incident. I do not believe that there has been any new evidence, despite reports to the

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contrary. FADEC was not a factor in the accident. Nothing in the NAO report would lead us to reopen the board of inquiry. However, I do know that this is causing much distress. I hope that the noble Lord will accept that I, too, have a great interest in this matter. We are shortly to have a meeting and I hope that those discussions will allow us to cover this matter more frankly.

The noble Baroness, Lady Strange, made a number of points about defence housing. It is true that we have concentrated on the worst housing. Perhaps it will be a comfort to the noble Baroness if I tell her that we plan to spend twice as much this year as we did last year on improving defence housing. We believe that 500 to 600 new houses will be added to the estate in the course of the coming year.

The noble and gallant Lord, Lord Carver, raised his worries about DERA. I am aware of the anxieties expressed by the noble and gallant Lord. The future of DERA has indeed been a very difficult issue. We are concentrating a great deal of time--perhaps I may say ministerial time--on this important issue. I hope to be in a position to speak publicly about it in the near future.

The questions raised by the noble Baroness, Lady Park, about Russia are ones that are in the forefront of our minds. The SDR recognised that an attack by a resurgent Russia had to be the greatest threat that might happen. No matter how remote that threat might be, we concluded that we needed to retain the capacity to respond to such a threat. I can assure the noble Baroness on that point. But of course it is not confrontation that we seek with Russia, but friendship and co-operation. I am sure that the noble Baroness would be the first to acknowledge that.

The noble Baroness, Lady Williams of Crosby, raised a number of different issues. Perhaps I may write to her about the specialist military we have deployed at the moment in Mozambique. I should also like to write to her on the interesting point she raised about Montenegro. That is also a matter of concern.

The British Armed Forces are, man for man and woman for woman, up with the very best. Their excellence is quite rightly recognised throughout this country, as it is also recognised around the world. I am told this constantly when I travel abroad on the part of the Government. They are a force for good around the world. We do not hesitate to use them when it is right to do so and when we believe that they can really make a difference. That is an important point. The reforms that we are introducing following the Strategic Defence Review are delivering results, as I hope I have been able to demonstrate today. They are putting in place the defence capability which Britain needs and which our Armed Forces both need and deserve.

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