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I welcome the defence reform review launched by the Secretary of State. Thisis aimed at making the Ministry of Defence more effective. Government Ministers rightly wish to secure management that is delegated, but that is also responsible and accountable. Given some of the appalling procurement decisions over the lastyears, centralisation does not seem to have worked. This is the thrust of much of what the Government are doing: to delegate in return for full responsibility and complete accountability. Serving officers and civil servants will have to get used to a culture that is antipathetic to buck-passing and encourages initiative, originality and creativity. We are looking in this country for people who are prepared to take responsibility and to take the flak as and when it comes.

This leads me finally to the matter of senior promotions and appointments within the Armed Forces, and particularly the naval service. A number of distinguished former Secretaries of State for Defence have made the comment to me that exceptionally able Royal Marine officers' careers come to a grinding halt after they reach two-star level. There have been some very distinguished Royal Marine officers who have had three-star appointments, but no Royal Marine officers have been appointed to three or four-star Royal Navy-only appointments. This is extraordinary because, anecdotally, Royal Marine officers distinguish themselves at the highest levels on operations and are held in the highest regard not only by our own personnel, but also by those of our allies. They do extremely well on the Advanced Staff Course and the Higher Command and Staff Course and at the Royal College of Defence Studies. Without a route through the naval service, senior Royal Marine officers cannot be expected to compete for and achieve the very highest appointments, including that of Chief of the Defence Staff. I very much hope that the defence reform review will consider carefully the points I have made so that we have a fair system of promotion and appointment throughout the services, a system that does not exclude or discriminate against some of the most talented and able officers in all of the services.

On 19 October, in the other place, my honourable friend Mr Gary Streeter asked the Prime Minister:

"Does he agree that the Royal Marines will have a glorious future in serving our country and its defence as well as a glorious past?".

The naval service and, particularly, the Royal Marines were delighted with the Prime Minister's reply, which concluded with the words:

"The Royal Marines are here to stay. They do a fantastic job and will go on doing so-so much so that I have actually employed one as a private secretary"-[Official Report, Commons, 19/10/10; col. 819.]

The Secretary of State has also recently employed a Royal Marine officer as his private secretary, and previous Secretaries of State have done the same. Finally, my question boils down to this. Why is it that these officers are actively sought after by our allies at the highest levels of command, where they have often been called upon and recommended, as well as by our

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Prime Minister and numerous Secretaries of State for Defence, but the system continues to exclude them? Is it not time that this changed?

4.35 pm

Lord Bates: I welcome the review and congratulate my noble friend the Minister on the persuasive way in which he made the case for it in his opening speech. Some have questioned the five-month period given for the review and have said that it was too short. They are perhaps forgetting that the coalition Government are quick about making decisions and show decisive leadership. They managed to come up with a five-year programme for government in five days, so five months for a strategic defence review may be seen as rather generous in that setting. After all, it is not that people have not known what needed to be done; they have just lacked the courage and decisiveness to do it. We now have that leadership, the strategy is very clear and I welcome it.

Much has been made of where cost savings will be required; little has been made of where investment is being made. The noble Lord, Lord Boateng, referred to the area of conflict prevention and I shall focus my remarks on that. The SDSR set out that the direct funding of conflict prevention through the conflict pool will rise from £229 million to £300 million and that the overseas aid budget, which is critical to our defence and security, will rise by £3.1 billion by 2014. This is not only honouring our commitment to the poorest on the planet and the victims of wars and disease but is a crucial way of protecting our security. As the saying goes, if you do not visit your problem neighbourhoods then your problem neighbourhoods have a habit of visiting you.

Currently, approximately £1.9 billion of the official overseas aid budget supports fragile and conflict-affected states. The strategic defence review, at page 46, envisages that this may double by 2014-15. The investment will make us safer at home and abroad. This point was made by right honourable friend the Prime Minister, who said in another place that,

He goes on to give the example of the awkward framework agreement in the conflict between the Albanian National Liberation Army and the Macedonian security forces under the previous Government, when NATO deployed a short 30-day mission to help embed the peace by monitoring the disarmament of the ANLA and destroying its weapons. It has been estimated that the international community's early intervention cost £3,000 million but that it would have saved a potential £15 billion had the conflict escalated.

Of course, the savings of good conflict prevention work are even more significant when one considers the human consequences. The right reverend Prelate the Bishop of Birmingham, in his excellent maiden speech, referred to the work of Selly Oak Hospital and Headley Court in the rehabilitation of members of our Armed Forces who have been injured and wounded in action. This reminds us that in the Afghanistan campaign

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alone there have been 341 deaths, but for every one death five are wounded in action, sometimes horrifically. These courageous men and women deserve to be cared for. They are receiving that care at those institutions and we should recognise that.

On 14 June, my right honourable friend the Prime Minister said in relation to Afghanistan that insurgencies usually end with political settlements, not military victories: that we need a political process to bring the insurgency to an end. I cannot understand how efforts at peacemaking and conflict resolution are sometimes dismissed as the preserve of woolly-minded idealists. More often than not, it requires more courage, and is more odious, to make peace than to make war. We know that from the situation in Northern Ireland. I am delighted that this Government have rejected that outdated thinking and are reorientating our thinking on strategic defence towards conflict resolution.

When Sir Winston Churchill, as Prime Minister, said that jaw-jaw is better than war-war, it was significant because it was in the context of a revered wartime leader making those comments in 1954 at the age of 80. He was commenting on the Cold War and reflecting on the chaos and carnage that had already cost 100 million lives so far that century.

As I walked in this morning to take part in this debate, I walked through line upon line of poppies and small wooden crosses in Westminster Abbey Gardens, each with the names of brave men and women who gave the ultimate sacrifice in the service of their country. War is a scourge on all sides. There are no victors and no vanquished; we all lose because each life lost diminishes us as a human civilisation and poses a threat to our survival. We should remember, though, that when the guns start, it is because the politicians have failed. Our Armed Forces serve a political leadership. We are responsible for them, and it behoves us to do everything in our power to minimise the risks of their sacrifice being required of them in future.

4.41 pm

Lord Gilbert: My Lords, I ought to start by declaring a couple of modest interests. First, I am a trustee of the All-Party Armed Forces Group, to which the noble Lord, Lord Sterling, made generous reference earlier in the debate. Secondly, I am chairman of a small IT company that has a contractual relationship with a major MoD contractor in the field of information security.

I wholeheartedly welcome the two noble Lords who made their maiden speeches today: the right reverend Prelate the Bishop of Birmingham who, as I was Member for Dudley for 27 years, will no doubt have taken care of the interests of some of my constituents in the past, and above all, if I may say so, my noble friend Lord Hutton, who I am delighted to welcome to your Lordships' House. I know that I am going to make some enemies of some of my noble friends but I consider him not only one of the most intelligent but certainly the most courageous Defence Minister I have had the pleasure of knowing, and I hope to hear his contributions many times in the future. I was delighted to hear what he had to say today.

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I should disclose some of my prejudices for the benefit of those of your Lordships who have not heard them before. First, I believe that we can and should spend a lot more money on defence. The stories that are being put about at the moment are absolute nonsense. I should like to see us spending at least 2.5 per cent of our gross domestic product on defence. Secondly, in contradiction to some of the things that have been said recently-I shall refer to this later-I do not believe that our closest neighbours to the east or to the south are our best friends. I make that clear. The best friends of this country are to be found in the English-speaking world, wherever it may be and however many thousands of kilometres away. I do not resile from that and I never have done.

I shall touch briefly on one or two things that have been mentioned, which was not part of my original intention. I welcome the Government's emphasis on cyberwarfare. It is long overdue that the House has started to pay attention to these matters. I welcome the commitment to Trident, which I think will be for four boats-it had better be, or I shall withdraw my support. I am rather unhappy about this business of delaying Trident. That is probably a false economy. In fact, I think it will end up with us spending a lot more money than we started off having to spend. I welcome the decisions on the Chinooks and on the tanks as well as the theoretical decision on the Special Forces, although I have to say that some of the Government's decisions seem to run contrary to their professed support for Special Forces.

I have one note of criticism before I get down to the subject of procurement. I was moved to hear my noble friend Lady Dean telling us how this Government were apparently going to treat widows. I could hardly believe my ears. I confess that I had not read the relevant passage, but I give notice to the Minister that he is going to suffer a strong campaign from all parts of the House unless the Government change the way that they intend to treat war widows.

I come to one or two more controversial matters. Of course, the Ministry of Defence has wasted an awful lot of money; it is still wasting it today in a lot of the things that it is buying. I am afraid that I do not share the universal welcome that is given to Eurofighter. You will never have seen a letter signed by me saying what a wonderful plane the Eurofighter is. It is only a fourth-generation plane, for God's sake. It is a very agile fourth-generation plane, but that is all it is. Its radar cross-section is similar to that of a London double-decker bus. I am not giving away any state secrets; everybody knows that. Who would want to fly in a London double-decker bus against a Russian S-600 surface-to-air missile system? I certainly would not want to fly in a conflict where I knew that that sort of surface-to-air system was available.

The fifth-generation plane is another matter. It is probably the best fast jet that the Royal Air Force has ever had. It will not be nearly as good as the joint strike fighter, but it has marvellous agility. I do not know whether the figure is classified, but its ability to pull G-forces has measurements for agility somewhere in the middle teens. That would be marvellous, except that we have yet to invent a human being who can

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sustain G-forces above about eight and a half to nine. So what would the pilot be doing? He would be singing Hail Mary while the plane was pulling 14. It is absolutely ridiculous. With every single plane that we buy, we are wasting a hell of a lot of money. Everybody knows it and they are laughing at it. I do not find it funny at all; I have a sense of humour failure. I do not find it funny that we are spending this sort of money on a plane which has a totally otiose capability that nobody can use. Right, I have got that off my chest.

We are going to sell them. The trouble is, we are going to be selling Tranche 3, not Tranche 1. We are keeping Tranche 1, the clapped-out ones, while we flog off the really good, modern new ones to somebody who has got the sense to buy them. India says that it will no longer buy clapped-out planes from us. My view is that we should give away the Tranche 1 and keep the Tranche 3. Right, I have got that off my chest.

Now we are really getting down to the nitty-gritty: I want to talk about the A400M. It will come as no surprise to your Lordships that I regard the decision on the A400M as the most bone-stupid in the 40 years that I have been at one end or other of this building. It is an absolutely idiotic decision. We have a military airlift fleet of C-17s and C-130s. We have total interoperability with the United States, which flies the same combination of airlift planes, apart from a few clapped-out Galaxies. It is also getting something called the C-27, which is replacing the C-23 or C-25-I get mixed up with figures these days. Basically, we have total interoperability with the United States. We have total interoperability with the Canadians. We have total interoperability with the Australians, with the Indians, with the UAE and with the Qataris. This week, I put down the following Question for the Minister:

"To ask Her Majesty's Government with which countries the Royal Air Force will lose its interoperability as a result of the forthcoming replacement of the C130 by the A400M.[HL3190].

I received this absolutely unbelievable Answer:

"The Royal Air Force will not lose interoperability with any countries as a result of the drawdown of the C-130J Hercules and entry into service of the A400M".-[Official Report, 9/11/10; col. WA46.]

I am almost tempted to read it again because I am sure that your Lordships could hardly credit it. We are acquiring a plane for which only the manufacturing consortium has placed orders. The South Africans cancelled an order, and only one other country outside the manufacturing consortium has an order on the books at the moment. That means that six or seven countries altogether will be flying the A400M. Flying the C130, which it is intended to replace, are 60 countries, with 2,600 or so C130Js currently being used. That is the interoperability that we are losing. Noble Lords will be glad to know that there is another question on the Order Paper for the Minister. How do Her Majesty's Government define interoperability? It probably has not reached his desk yet, but I shall be interested to see the Answer.

Why on earth are we doing this? I once described this rather vulgarly as a Euro-wanking make-work project and I do not resile from that. I hope that this time Hansard will leave that in and not take it out. It

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was in the next day's version but Hansard funked it and took it out of the Bound Volume. I hope that this is all on the record.

I can tell your Lordships why we are buying the A400M because I want to pay special tribute this afternoon to the defence Minister of France, who is our new best ally in Europe. The New York Herald Tribune on 6 November states:

"The A400 M is an emblematic program which Europe could not abandon",

Monsieur Morin said at a news conference on Friday.

"Giving it up would have meant Europe saying it wanted to be dependent on the United States in military transport".

How pathetic. We are spending hundreds of millions of pounds on a plane just to make sure that nobody thinks we are dependent on the United States for military transport.

We are told that the new arrangement we will have with our friends across the Channel will in no way dilute our relations with our best friends the Americans. Yet the defence Minister involved in our new great alliance with the French has this attitude. Another question is coming to the Minister asking whether Monsieur Morin has many other emblematic symbols in the field of defence procurement that we will have to acquire just to prove that we are not dependent on the United States for transport.

Your Lordships will be familiar with the phrase "barking mad". A few years ago, some wit invented the phrase "Dagenham mad". When asked what it meant he said it was three stops beyond Barking. This is not "Barking mad" nor "Dagenham mad": it is "Upminster mad". It is at the end of the line. You cannot go any further: it is sheer madness. The Minister responsible is sitting here. He is carefully not identifying himself and I am not going to be so cruel as to identify him either.

This is not a party point. Both parties have been involved. When I was a Minister, I was told, "You don't have to cancel the A400M because the Germans will do it for us. The Germans have a very tight defence budget and cannot possibly buy everything that they say they will buy, so don't worry they'll do the dirty work for you". It was a great reassurance to my boss at the time because he was unhappy. We had just cancelled MRAV and a NATO frigate and it was more than his sensitive soul could bear to be accused by our European friends-I hope he does not mind me letting this cat out of the bag-of being anti-European. That is why we are stuck with the A400M. I asked more than one Conservative defence procurement Minister and they told me that they were told exactly the same by their officials. It is a disastrous decision. It is actually a criminal waste of public money. We will have to buy stocks and train crews and so forth, and will lose the worldwide interoperability that we currently enjoy with the C130.

When one criticises, one has a responsibility to suggest a solution. We should get together with our Commonwealth friends, particularly Australia, Canada and India, to set up a Commonwealth heavy lift force that could be available to deal with natural disasters because the C17 has a capability that nobody else has.

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I have said what I think we should do about the Eurofighter. I would advise the Minister to think very carefully about the advice-

Lord Davies of Stamford: I apologise for intervening, but the noble Lord will be aware that the C17 is going out of production and that the C130 does not carry our new generation of armoured vehicles-for example, a Mastiff or a Warrior. In those circumstances, how does the noble Lord expect to replace the strategic airlift which we currently have with the C130J fleet?

Lord Gilbert: The C17 is not yet going out of production and, with any luck, the order from the Indians will help to keep it going. I hope that there will be more orders of C17 around the world. The noble Lord is quite right about the Hercules not carrying the latest army kit, but the C17 has an enormously good capability on short-field runways and can be used for that task, as the noble Lord well knows.

I am glad to say that the noble Lord has reminded me of something else which we will lose when we get rid of the C17, which is support for the Special Forces. I hope that the Minister will tell us exactly what discussions he has been having with Hereford on this subject, because it is a very serious matter and the Americans place great weight on our co-operation in the field of Special Forces. We are particularly interoperable with their C130 Talon aircraft, as the Government know.

I hope that the Minister will carefully consider the recommendation that he has received that we should have five-yearly defence reviews. That would be too frequent; once a decade is often enough. We can pull things up and look at the roots far too often, and I think that the Americans suffer from having quadrennial defence reviews.

4.56 pm

Lord Guthrie of Craigiebank: My Lords, I shall make three declarations of interest. First, I am a non-executive director of an American defence company. Secondly, I am president of the Army Benevolent Fund, a soldiers' charity, and three regimental charities that have been formed to look after their casualties from Afghanistan. Also, I am a colonel of the Life Guards.

Perhaps the most difficult and controversial decision taken by the SDSR has been to do with the two carriers. The case for them has been made, but their construction, bringing them into service, operating them and keeping them going over the years are likely to cause huge difficulties to the defence budget. Budgets are likely to be even more under pressure in future than they are today, in what we have estimated. It will be not just the Royal Navy that is affected by this but defence as a whole. I am sure that the carrier group, when it forms, will be much more expensive than it is today.

The Royal Navy's surface fleet is now smaller than at any time since the reign of Charles II. Our small surface fleet of 19 frigates and destroyers will not be enough to meet the many worldwide tasks and to act as escorts for carriers. As an aside, when I was Chief of the Defence Staff and needed a frigate off the coast of

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Sierra Leone, the same ship had two commitments at the same time. Unbelievably, it was guarding the Falkland Islands and chasing drug dealers in the West Indies. At that time, we had a surface fleet of more than 30 ships; we are now going to have 19. In reality, having 19 ships means that we will probably have about 13 or 14 available at any time. We certainly need a larger Navy and we need more frigates and smaller ships. We cannot skimp on escorts for the carriers, particularly as every year improved supersonic anti-ship missiles and more sophisticated torpedoes are becoming available.

Secondly, we should welcome the recent agreement with France. It seems sensible; we probably have more in common with the French military than with anyone else in Europe. Sometimes I do not think that we have so much in common with the Quai d'Orsay and the French Government, but as far as their military is concerned we work very well with them. In the Balkans, when necessary, we were perfectly happy to put British soldiers under French command and the French were perfectly happy to put their soldiers under our command. We have also operated in different parts of the world alongside them and that has been perfectly all right. Although savings will be possible from the French agreement, they will not be anything like as much as people think, because it is important that we are able to operate independently from the French, if the need arises, and there will be occasions when we have different goals and aims in international relations.

It is certainly right to increase the effectiveness of our Special Forces, the SAS and SBS. Their successes in Iraq and Afghanistan have been remarked on. Having been to Baghdad when I was colonel commandant of the SAS and seen them working alongside the United States special forces and what benefit there was to both the United States and to our soldiers, I am completely convinced that we need to give more modern technology-particularly, intelligence technology-to our Special Forces. I am a bit nervous of increasing the size of the Special Forces. I know that people suggest that we need more, but to produce an SAS or SBS soldier needs careful selection and arduous training. If we do not maintain those standards, there is a real danger that the two units will be dumbed down in some way. I hope that the Minister can assure me-I know that he wants to assure the noble Lord, Lord Gilbert-that the introduction of the A400M will not affect SAS and SBS operations. The C130 is excellent and the right size, while the A400M is a bigger aircraft and I am not sure that it can do all the things that the SAS will want it to do.

Lastly, I am delighted that there is to be a full and fundamental review of the Ministry of Defence. Nobody could be more suited to lead that review than the noble Lord, Lord Levene, who knows the Ministry of Defence well. The noble Lord, Lord Reid, said, when he was Home Secretary, that he felt that his department was not fit for purpose. I am afraid that many of us feel the same way about the Ministry of Defence. It lacks agility and is too big. Do we really need to have a Permanent Joint Headquarters as well as the Ministry of Defence? There is a certain amount of duplication. As people second-guess, PJHQ has constantly to refer back to the Ministry of Defence when it makes decisions. Why do we need so many people? We have 86,000

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civilian staff who are there for only 175,000 service men and women. We then have a Defence Equipment and Support organisation of 26,000, to which others have referred today, and we do not seem to be able to produce all the equipment that we want in time for when we need it. The review will need to take some radical and tough decisions, some of which will be very unpopular. It is always difficult to reduce numbers; it has happened before and I know that there is a plan to do it now, but I do not underestimate the difficulties of that.

We must follow through the review. Since I have been in the Ministry of Defence-and I have spent many years there-there have been any number of reviews, yet I cannot think of one that was really followed through. The noble Lord, Lord Robertson, referred in a previous debate to Mr Bernard Gray, who knows a great deal about procurement and understands the Ministry of Defence as well as anybody. I would like to know why what seemed to most of us to be an excellent report, which may have been critical of the Ministry of Defence, seems to have been shelved. Why has it not gone forward? What is happening? What is going on to put this right?

5.06 pm

Lord Sheikh: My Lords, this debate is of crucial importance to our country. The first duty of any Government is to protect their territory and defend their citizens. We have been waiting a long time for a strategic defence review and the Government are to be congratulated on having completed this review within just five months. Undoubtedly, not every decision that the Government have had to make will achieve a positive resonance with everybody.

In yesterday's debate on the importance of diplomacy, I made reference to the heightened co-operation needed among the Department for International Development, the Ministry of Defence and the Foreign and Commonwealth Office. This cross-departmental approach will strengthen security and provide the structure for an effective programme of international relations that takes our defence requirements into account.

We have a proud tradition of playing a major part on the international stage and our service personnel have demonstrated a courage and strength that have regularly achieved international acclaim. With this debate taking place the day after Remembrance Day, it is appropriate to record our collective gratitude for the risks that they bear, and have borne, and the price that has been paid over generations by brave service men and women. We owe it to them to ensure that they are properly resourced when deployed and adequately looked after once they have ceased to serve.

The context for the strategic defence and security review has been the need, through the comprehensive spending review, to achieve improved balance in our public finances. I know that my noble friend and his ministerial colleagues have presented a cogent and credible case for defence in its widest context. That has been recognised in the settlement that has been achieved. Defence is sufficiently important to ensure that, while every government department must make its contribution to restoring fiscal balance, the defence budget has been relatively protected. As a businessman who is

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chairman of several companies, I feel that the present economic problems have arisen partly due to the greed of the bankers but, importantly, also because of a lack of control and overspending by the previous Government. We therefore need to take remedial action.

The record in recent times has been frustrating for those serving in our Armed Forces. Despite the changes that have occurred in the world since the last review was conducted in 1998, our service personnel have been overcommitted and underequipped in two major conflict theatres. They have performed admirably, but we should never allow the situation to arise where they have to overcome these hurdles again. I welcome the Government's commitment to a regular programme of strategic defence and security reviews.

I also welcome the Government's commitment to ensuring that current operations in Afghanistan will not be adversely affected by the approach adopted in this review. Our troops continue to provide sterling service under very difficult conditions in that country, but it is important that our Armed Forces are adequately shaped in the future and we should not forget the needs of those on the front line. Too often in recent times, the Government's ambitions have not been reflected in the support provided to our troops. This review gives a clear and categorical undertaking to correct that imbalance.

One of the major causes of the imbalance that has affected our defence policy in recent years has been the failings in procurement. Inevitably, defence procurement projects are expensive and have long lead times. The management of public money needs to be a priority for the Government, not least as we face a considerable period of fiscal restraint, and we must make sure that we get maximum value for every penny that we spend. I hope that the Minister, in responding to this debate, will provide further detail on how he will ensure that future projects are delivered on time and within budget.

I understand that it is the Government's ambition that future forces, although smaller in size, should retain their geographical reach. The strategic defence and security review recognises the importance of developing and maintaining strong defence relationships internationally. We saw further evidence of the Government's commitment to this in the announcements last week on deepening our defence relationship with France and I welcome the Government's proactive approach to developing strong bilateral relationships with our key defence partners.

I wish to develop the theme of international co-operation further. It is likely that, as in recent times, our defence objectives will be most effectively met through international partnerships and alliances. It is proper that our defence posture should be informed by our foreign policy stance. Bringing foreign policy objectives, defence engagements and international development assistance under the co-ordinated umbrella of one cohesive and consistent approach will be crucial in mitigating future threats. The review recognises that and commits the Government to ensuring that our international development programme has a focus on making sure that future conflicts can be dealt with by targeted help and support.

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However, there is scope for wider engagement in defence matters, as implied by the review. I wish to enlarge briefly on the scope to do so in respect of Qatar, Kuwait, Saudi Arabia, the UAE, Oman, Bahrain and the Gulf region. This is an area in which I have extensive experience-I have travelled widely in it and have business interests there. I also know the ambassadors of these countries. I commend the Government for undertaking their Gulf initiative as a high priority. We should be proactive in expanding our defence relationships across this region. The recent state visit from His Highness the Emir of Qatar within the last couple of weeks has provided a good opportunity to advance and deepen these important friendships.

The 2004 Istanbul Co-operation Initiative offers countries that are part of the Gulf Co-operation Council bilateral security co-operation with the North Atlantic Treaty Organisation. Britain has the potential to create a similar relationship with the Gulf states that involves mutual assistance through sharing intelligence and assistance with border security in connection with the fight against terrorism and the proliferation of weapons of mass destruction. Such co-operation would also include activities whereby Armed Forces from each country participate in selected military education and training exercises. I would be grateful if the Minister could inform your Lordships' House as to whether the Government have any plans to adopt the concept of the Istanbul Co-operation Initiative by strengthening our relationship with the Gulf states to the benefit of our national and international security strategy.

In conclusion, we need a coherent policy framework that provides us with an opportunity to head off future conflicts while tackling, in partnership, existing threats. The tests that we face come in a variety of guises and forms, including cyberwarfare and counterinsurgency, as well as more conventional forms of military engagement. The decisions that the Government must take are difficult but they are about striking the right balance. I look forward to the Minister's response.

5.16 pm

Lord Tunnicliffe: My Lords, I thank the Minister for introducing this debate. I congratulate the right reverend Prelate the Bishop of Birmingham and my noble friend Lord Hutton of Furness on their maiden speeches. I now know more about Birmingham. I have a colleague from Birmingham; we know that it is the greatest place on earth. I thank my noble friend Lord Hutton for his thoughtful remarks and look forward to his contributions, particularly on defence, in the months to come.

I also pay tribute to the front-line troops. Tonight I will dine with a friend whose son died in a bomb clearance operation in Bosnia. Last weekend I met his colleagues. I am in awe of those young men, who do tasks that I could not imagine myself doing. I am sure the sympathy of the whole House goes to my friend, those like him and the friends and relatives of those who have made the ultimate sacrifice.

Her Majesty's loyal Opposition will work with the Government as closely as possible in matters of security and defence. They are too important for us not to

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co-operate wherever we can to secure the best possible security and defence capability for this country. However, quite properly, just as the Government did in opposition, we will be holding them to account. There has not been much comment on Afghanistan in this debate. That is probably because of the clear assurances given in both the White Paper and by the Minister at the beginning of this debate. Nevertheless, we will watch carefully to make sure that every part of those assurances is delivered. Our troops in Afghanistan need all our support to finish the brave operation in which they are involved.

Turning to the rest of the review, we have had a long and interesting debate. Realistically, I recognise that noble Lords are not waiting for my comments about their speeches but for the Minister's response. Nevertheless, a preponderant number of noble Lords expressed concerns about the review. The phrase that struck me most came from the noble and gallant Lord, Lord Inge, who said that he had "deep, deep concerns". Indeed, according to the Royal United Services Institute survey, 68 per cent of those in the defence community have concerns that this was a lost opportunity for a more radical reassessment of the UK's role in the world.

It was very easy to pick up comments from around the defence community and elsewhere in Parliament about the review but I thought it sensible to read the source documents-the two volumes. You can, I hope, only do so by reading the national security strategy before going on to read the strategic defence and security review. I got as far as page nine of the first volume and read what, at first sight, was an extraordinarily reassuring statement. The document stated at the bottom of page nine:

"The National Security Council has reached a clear conclusion"-

there is no ambiguity in that statement-

I hope that the noble Lord will explain to me how he can stand by that statement given the 14 per cent reduction in the Navy, the 7 per cent reduction in the Army, the 13 per cent reduction in the RAF, the 29 per cent reduction in civilian staff, the ability to undertake an enduring operation reduced from 9,500 to 6,500, our surge capability reduced by a third to 30,000, the abandonment of carrier strike for a decade and the permanent abandonment of our maritime reconnaissance capability.

Nevertheless, despite that setback to my enthusiasm for the document, I pressed on. Indeed, to read the two documents as a whole is an interesting experience. You would think that the first document would finish with the last page; in fact, it finishes on page 12 of the next document. It is an interesting narrative. I am not sufficiently professional to be able to criticise it in any detail; that needs to be done over time. However, at least I accept that it is an attempt to work from the risks towards a series of strategic tasks. Those strategic tasks are listed on page two of the Strategic Defence and Security Review. That document then goes into the consequences. I was hoping to see an analysis of those tasks with military content, what scenarios related to those tasks, how the newly shaped Armed Forces

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would fit with those scenarios and how they would work together. However, you do not see that. You move on to page 15, which really says nothing about defence, except that there is a £38 billion hole. I was not going to cover this point in any depth but the noble Lord, Lord King of Bridgwater, did, so I must return to it. Will the Minister tell me where the £38 billion figure came from? I have searched what is available in the public domain and the nearest figure that I can find is £36 billion in the Major Projects Report 2009, published on 15 December 2009. The £36 billion figure is contained in one of the most irresponsible sentences I have ever seen in an NAO document. It states:

"The Department estimate, however, that the Defence budget remains over committed by £6 billion over the next ten years; this assumes an annual increase of 2.7 per cent in their budget after the end of the current Comprehensive Spending Review settlement in 2010-11".

It then goes on to speculate:

"If the Defence budget remains flat in cash terms after this time"-

that is, for the next 10 years-

If there is no better source than that, I put it to noble Lords that the source is false. Even this Government in what they are putting forward are not suggesting 10 years with a flat cash budget.

When one goes back to the review, the document moves rapidly to principles. The principles on page 17 say things which are a little bit like motherhood in the sense that you could just as easily have said it last year as this year. I think that all but two paragraphs would be more or less identical to what one would have said last year. The two paragraphs in question say that we are to have smaller Armed Forces and that they are to be more selectively used. That is the only bridging interpretation between the tasks set out on page 12 and the cuts that start on page 19.

Is this a good package of cuts? Once again, I do not know. To know this, I would have to see the logic that led from the assumptions on page 12 of the first volume to the forces that we can now deploy. Certainly, the Treasury must feel that it is a satisfactory set of cuts. One assumes-because none of them has resigned-that the defence chiefs think that it is a satisfactory set of cuts. However, I say that it is as yet unproven. Certainly there are surprising elements, such as the carriers that will be delayed for four years from 2016 to "around 2020" to fit a catapult and some arrester gear. That is a lot of years to fit a catapult and arrester gear. There is also the decision on Harriers. I have heard the argument for scrapping the whole fleet, but we in this House have asked what would be the cost of a modest core fleet to maintain the capability on our current carriers in the mean time. We are looking at retaining "Illustrious" or "Ocean". Why can we not retain "Illustrious" and a modest fleet to maintain a deployable capability to put what history teaches us can be very small numbers of fast jets over a battlefield? We need to know the figures to know whether or not to consider that was a good decision.

Many speakers have treated the civilian staff of the Ministry of Defence as if they are fat, lazy, ineffective and inefficient, and can be slashed at will. I declare an interest: I was employed as a non-executive director

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on the procurement side of the Ministry of Defence before I joined the Front Bench. Noble Lords should understand what an enormous range of tasks civilians perform in the Ministry of Defence. The ministry must be congratulated on the way in which, over the past decades, it has got people out of uniform. It has had the courage to persuade service personnel that, once they are no longer needed for fighting, many can sensibly become civilians and still be employed by the ministry. These people are frequently the repositories of, for instance, safety knowledge. They man the specialist teams that keep our equipment safe. They go head to head with defence contractors, who employ extremely able people to make sure that the last penny is screwed out of every contract. These are the people that we are talking about cutting by 29 per cent, when the overall size of the services is going down by only 10 per cent. What mechanisms will we put in place to make sure that this cut is made in a way that does not seriously weaken our capability, that does not put safety at risk, that does not put our procurement capability at risk, but does allow people who in the past have served on the front line to continue to provide a service to our soldiers, sailors and airmen?

On the face of it, this is not a strategic defence and security review. Perhaps, when we have probed it, it will emerge that the theme started in the first volume and developed through it sensibly translates to the force that is described in the second volume. We the Opposition will probe this over the months ahead. We hope that we will be part of a wider debate that will be much more inclusive than it has been so far of the defence community. For our country's sake, I hope that we will find that it all fits together, and that, if it is proved that in some places it does not, the Government will have the courage to change their mind.

5.29 pm

Lord Astor of Hever: My Lords, this has been an exceptional debate. That is no surprise with so many former Secretaries of State, Defence Ministers, Chiefs of the Defence Staff and noble Lords who are genuinely well informed and passionate about defence and national security.

I am aware that I am standing between many noble Lords and their trains and planes home. Clearly, there is no way that I can address every point and question that has been raised today but I promise all noble Lords that I will follow up this debate by responding to all the questions that have been asked of me.

I associate myself with the compliments paid to the exceptional maiden speeches of the right reverend Prelate the Bishop of Birmingham and the noble Lord, Lord Hutton. I was pleased that the debate was not exclusively restricted to defence and that the noble Lord, Lord Condon, was able to speak on policing.

Like every defence review, the SDSR has been very difficult. I pay tribute to the noble Lords, Lord Robertson and Lord Reid, who led the last and greatly respected defence review in 1998. This difficulty reflects the complexity of defence: the variety of enduring and emerging threats that we face; the changing nature of conflict itself; and the financial situation in which we

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have found ourselves. Every department has had to make a contribution to the deficit reduction and the Ministry of Defence has been no exception. We have been acutely aware of the human impact of the decisions that we are making in the SDSR-not only on jobs and livelihoods but on the emotional attachment that people who care deeply about our country's interests have to certain aspects of defence. Our decisions have had to be objective and unsentimental, based on the military advice that we have received. We have had to make a fact-led, risk-informed judgment about the likely threats that this country will face in the future, although no one should claim to be able to predict the future with absolute certainty.

Now, our work begins in earnest. There are difficult decisions to be taken, including basing decisions, the rationalisation of the defence estate and alliances. I assure noble Lords that we will take those decisions as quickly as possible to minimise uncertainty but in a way that is sensitive to economic and social pressures and to the needs of our people and their families. Three further reviews are being undertaken to bring other areas of defence into line with the new force structure: the future role and structure of the Reserve Forces, force generation and sustainability, and the remodelling of the MoD itself, overseen by the Defence Reform Unit, which will report in July next year.

I was asked about Bernard Gray's recommendations. Most of them have already been implemented through our acquisition reform programme.

I thank the noble Lords, Lord Rosser and Lord Tunnicliffe, for their strong support for our Armed Forces and their families, and for the fact that they will work constructively with the Government on the SDSR. The noble Lord, Lord Rosser, asked me how we intend to bridge the capability gap with regard to Nimrod. I am happy to make the noble Lord, Lord Tunnicliffe, the opposition defence spokesman, fully aware, as far as classification allows, of any decisions and the military advice on which we made the decisions about Nimrod.

I am well aware of the concern from all corners of the House about the Nimrod MRA4. Nimrod has cost the taxpayer more than £3 billion and is eight years behind schedule, despite the number of aircraft commissioned falling by half. As the noble and gallant Lord, Lord Bramall, said, this was a disgrace. We are determined to learn the lessons of Nimrod and other unaffordable programmes.

Ministers and service chiefs have acknowledged that the decision not to bring the Nimrod MRA4 into service was very difficult. However, the severe financial pressures and the urgent need to bring the defence programme into balance meant that we could not retain all our existing programmes, and we had to prioritise those capabilities that we could maintain.

We will continue to undertake joint maritime patrol activities with our allies, and we will utilise a range of other military assets to ensure the integrity of the United Kingdom waters. The noble Lord, Lord Rosser, asked about civilians in the Ministry of Defence. Like the noble Lord, Lord Tunnicliffe, I pay tribute to the excellent and critical role that MoD civil servants continue to play, but the size of the MoD workforce, both military and civilian, needs to reduce in line with

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the overall reductions in the size of the force structure. We recognise the uncertainty that that will generate, and will keep people informed about the details of where the reductions will fall and the timeframes. Wherever possible, reductions will be achieved without recourse to redundancies.

My noble friend made an important speech about Permanent Secretaries. I can say that Ursula Brennan was appointed following a lengthy selection process run by the Cabinet Secretary. He, the Secretary of State and the Prime Minister all agreed that she was the right person, together with the new Chief of the Defence Staff, to lead the department. As the noble Lord, Lord Tunnicliffe, said, Afghanistan has not been very much mentioned. It remains our number one defence priority. We are committed 100 per cent to ensuring operational success and to our forces having the tools to get on with the job. It should be remembered that our timetable is linked with the aspirations of the Afghans themselves, who want control of their security by 2015.

The noble Lord, Lord Davies, and my noble friend Lord Sterling commented on the service advisers in the Box in uniform. This country is rightly exceptionally proud of its Armed Forces, and we encourage them to wear uniform where appropriate, as did the noble Lord, Lord Davies. As long as I am a Defence Minister in this House, those servicemen and women, who give me outstanding military advice, will be encouraged to wear their uniform. I also share my noble friend Lord Sterling's admiration for the Armed Forces parliamentary scheme, and I pay tribute to the noble Baroness, Lady Dean, and my noble friend Lord Lyell for the excellent work that they do with the Lords' defence group. I am happy to help in any way that I can. Like the noble Baroness, I very much miss Lady Park from our defence debates.

Many noble Lords, including my noble friend Lord Burnett, the noble and gallant Lord, Lord Craig, the noble Lord, Lord MacKenzie, and my noble friend Lord Rotherwick, have mentioned Harriers. Harriers, regrettably, will be retired. Like many iconic and beautiful aircraft produced by Britain in the past-the Spitfire, the Lancaster and the Vulcan-the Harrier force has made an impressive contribution to our nation's security over the decades.

Retiring the Harrier is not something that any of us wanted to do-I am sure that that is true of all noble Lords-but tough but fair decisions had to be made in the SDSR. Retaining Tornado allows us to sustain operations in Afghanistan and maintain contingent airpower capabilities, in addition to the role of UK air defence. The Tornado fleet will gradually draw down over the course of a decade, phased to ensure that there is no impact on operations in Afghanistan and linked to the build-up of the Typhoon. It is simply not the case that decommissioning the Harrier and HMS "Ark Royal" will impact on our ability to defend territories in the south Atlantic. We are not complacent about this. We maintain a wide range of assets to ensure the defence of the Falkland Islands and are able to respond to any and all threats. The noble Lord, Lord Davies, knows very well that I cannot comment on whether we have a submarine there. The Government

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are unequivocally committed to the defence of our overseas territories and dependencies, but the situation is now far removed from that of the early 1980s. The Argentine is no longer ruled by a military junta that is repressive at home and aggressive abroad. Indeed, it is now a vibrant multiparty democracy, constructive on the world stage and pledged to peaceful resolution of the issues that undoubtedly remain between us.

A good number of noble Lords, including my noble friend Lord King, the noble Lords, Lord Ramsbotham and Lord Judd, and the noble and gallant Lord, Lord Walker, mentioned carriers. The Queen Elizabeth class carriers will simply be two of the best ships this country has ever built and a reminder of Britain's global reach, its continuing global role, and our successful defence industry. They will enjoy an extended service life of 50 years. Their upgrade to include cats and traps will allow us to deploy the carrier variant of the JSF and promote greater interoperability with our allies. The JSF will be the world's most advanced multi-role combat jet and, together with the modernised Typhoon fleet, it will provide us with the most capable fighter jets anywhere in the world.

The noble and gallant Lord, Lord Boyce, and the noble Lord, Lord Reid, asked for confirmation that we will retain skills to land on carriers. Plans are being developed with our allies to retain key skills in carrier aviation and to ensure joint Royal Navy and Royal Air Force manning of fixed-wing and rotary-wing fleets. At least one major aviation platform will be maintained up to the entry into service of the new carriers, and a study into the relative merits of keeping HMS "Illustrious" or HMS "Ocean" is currently under way.

On the A400M, I can say to the noble Lord-

Lord Judd: Before the Minister leaves that point, I really am mystified. He is proposing immense expenditure in future on two very sophisticated ships, which must impress us all, particularly those of us who have had responsibility in that sphere. He tells us that in the interregnum it is all right because we can meet all eventualities and cover all our needs. I do not see the logic. What may happen in these next 10 years, in the interregnum? What is it that will fill the gap? If we have something that makes it perfectly all right, how can we contemplate this expenditure in future?

Lord Astor of Hever: My Lords, I make no apology for these carriers, and we are in an alliance with our NATO allies.

As far as the A400M is concerned, the Royal Air Force had a number of concerns about it, but it now tells me that it is delighted that it is coming into service. The noble Lord raised some very important points about the A400M today. I cannot comment on the Special Forces issue, but I have offered the noble Lord a meeting to discuss the A400M. We are where we are with it. It is coming in, and I very much hope that the noble Lord will take up my offer, as I would very much welcome that.

The Trident replacement was mentioned by a number of noble and noble and gallant Lords. The Government are committed to the maintenance of the United Kingdom's essential continuous-at-sea nuclear deterrent.

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The decision to extend the life of the current Vanguard class submarines, and changes in the profile of the replacement programme, mean that initial gate will be approved in the next few weeks.

The next phase of the project will commence and the main gate decision will be taken in 2016.

On finance, the additional costs over the spending review period of the programme to replace the Vanguard class, some £700 million, are accommodated in the MoD's SR settlement, taking account of the other needs of defence. This is the usual practice. The spending review settlement provides for successive deterrent funding until 2014-15. I assure all noble Lords that my department will then enter into robust discussions with the Treasury on this issue as part of the next spending review.

The noble and gallant Lord, Lord Inge, said that we should exercise the use of the deterrent. I can confirm that we conduct regular command-post exercises with No. 10 and other government departments. The noble Lord, Lord MacKenzie, and my noble friend Lord Hodgson mentioned helicopters. With additional Chinooks, upgraded Pumas and Merlins, and the introduction of Wildcats, we should finally have the right amount of helicopter capability. However, this will be kept under review.

My noble friend Lord Sheikh and the noble Lord, Lord Bilimoria, pointed out the importance of international defence agreements. My noble friend referred, in particular, to the Gulf region. We are engaging widely with the Gulf countries; I was in Oman and Qatar last week. On my noble friend's question, all NATO allies, including the UK, agreed the ICI partnership framework in Istanbul in 2004. The UK plays its part in working with the four Gulf states-Bahrain, Kuwait, Qatar and the UAE.

Several noble Lords, including my noble friends Lord Lee and Lord Trefgarne, welcomed the Anglo-French agreement. This is not new. It must make sense to promote greater co-operation with our largest military

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ally in Europe, especially as we will be maintaining defence sovereignty and autonomous capability. I can assure the noble Lord, Lord Davies, of my and the other Defence Ministers' commitment to making this agreement work. The noble Lords, Lord Soley and Lord Robertson, asked whether we could widen our discussions with other European NATO members. I share the aspirations of the noble Lords and I can confirm to them and to the noble Lord, Lord Liddle, that Defence Ministers are constantly engaging with their European counterparts.

Several noble Lords, including my noble friends Lord Sterling, Lord Chidgey, Lady Tonge and Lord Bates, mentioned conflict prevention and overseas aid. By 2015, one-third of the aid budget will be spent on conflict prevention. We will provide support for fragile states whose instability has consequences for the safety of the United Kingdom. If we do not tackle the root causes of pandemics, climate change and conflict, we will spend far more in the future trying to deal with the consequences. Delivered effectively, aid is good value for money. Each £1 spent on conflict prevention generates more than £4 in savings on conflict response.

I am running out of time and there are lot of issues that I have not been able to cover, but I will write to noble Lords on these. In my first speech to the House as a Defence Minister in May, I said that I would always do my utmost to support our Armed Forces. I also said that I am always ready to listen to advice from defence experts, whom this House has in abundance. Those pledges remain. I have held several briefing sessions with a mix of noble Lords and noble and gallant Lords, and I am very keen that they should continue. There is a difficult road ahead, but at the end of the process Britain will have the capability that it needs to keep our people safe and to live up to our responsibilities to our allies and friends, and our national interests will be more secure.

Motion agreed.

House adjourned at 5.50 pm.

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