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Commons Chamber

Volume 80: debated on Wednesday 12 June 1985

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House Of Commons

Wednesday 12 June 1985

The House met at half-past Two o'clock

Prayers

[MR. speaker in the Chair]

New Writ

For Brecon and Radnor, in the room of Tom Ellis Hooson, Esq., deceased.—[Mr. Wakeham.]

Private Business

NOTTINGHAMSHIRE COUNTY COUNCIL BILL [Lords]

Considered.

Amendments agreed to.

To be read the Third time.

BIRMINGHAM CITY COUNCIL BILL (By Order)

Order for consideration read.

To be considered tomorrow.

BRITISH RAILWAYS (TROWSE BRIDGE) BILL [LORDS] (By Order)

Order for Second Reading read.

To be read a Second time tomorrow.

Oral Answers To Questions

Environment

Sports Council

1.

asked the Secretary of State for the Environment when next he plans to meet the new chairman of the Sports Council to discuss the future development of the Sports Council.

The Parliamentary Under-Secretary of State for the Environment
(Mr. Neil Macfarlane)

I meet the chairman frequently and will be meeting him next week. A meeting to discuss the council's corporate plan has been arranged for 4 July.

Is the Minister aware that his appointment of John Smith as chairman of the Sports Council is popular in sporting circles, and that we wish him well? Does he recall the remarks of the new chairman on his appointment, when he said that he would take the appropriate initiatives to heal the wounds between the Central Council of Physical Recreation and the Sports Council and to bring about the unity necessary to rebuild sport in the United Kingdom? Will the Minister use his best endeavours to assist Mr. Smith to bring about that desirable aim?

I am grateful to the hon. Gentleman for his comments about the new chairman of the Sports Council, who will be an admirable successor to Mr. Jeeps. Obviously, the House is aware that the rapport between the Sports Council and the CCPR has been of major concern to the hon. Gentleman. He has rightly identified a most important issue. The governing bodies can take courage from what the new chairman said at the inaugural press conference as a most constructive way forward. I am happy to tell the House that the new chairman has already met the chairman of the CCPR to discuss effective measures for future co-operation. I am at their disposal to help in any way that I can.

Can the Minister tell us anything about the progress of the Government, with or without consultation with the Sports Council, in dealing with the football violence that besets the entire country? Is he aware that it is now 13 weeks since the Prime Minister took her initiative and that in that time none of my hon. Friends, nor anyone with responsibility in the Labour party, has been consulted, despite our offer of help and the plea of the Government in seeking help? When will we be consulted? When do the Government intend to introduce legislation? Bearing in mind that there are only 11 weeks before the season starts, how on earth can we pass legislation and get the money and the work done in time for next season?

I am at the disposal of the House. The question refers to the future development of the Sports Council. I am more than happy to discuss these important issues. A meeting is to take place later this afternoon with my right hon. Friends the Secretary of State for the Environment and the Prime Minister, other Ministers and the football authorities. Next week I am chairing the third meeting of a working party to assess the cost and effect of the work that will have to be done before August and the kick-off for the new season. I have concluded the first round of a meeting with Ministers of the eight countries in Europe to decide how we can improve and develop the importance of football within Europe. This series of measures is designed to ensure that recent tragic events are never repeated.

Oil (Onshore Drilling)

3.

asked the Secretary of State for the Environment whether he will make a statement on the environmental implications of current and planned onshore drilling for oil.

My Department's circular 2/85 provided guidance to mineral planning authorities in preparing development plan policies and deciding individual applications. On 3 June we published a booklet setting out the environmental safeguards at each stage of development. These seek to achieve the right balance between the nation's need for oil and its concern to protect the environment.

I welcome the booklet, but can the Minister give an assurance that the damage to the quality of local life in all future drillings will not be any greater than that splendidly achieved at Lockton in north Yorkshire during the past 10 years? Does the right hon. Gentleman agree that if he applies the Lockton standard firmly, there need not be any public alarm or significant damage to the quality of life?

I thank the hon. Gentleman for his most helpful comments. Many people are quite rightly concerned about the environmental implications. If we are to maximise this country's potential wealth and oil reserves there must be drilling, but it must be done in an environmentally acceptable way. The hon. Gentleman has drawn our attention to a way in which it can be done very well, and it is our objective to extend those standards.

Is my right hon. Friend aware that drilling for exploratory wells is about to commence in Poole harbour? We accept its necessity and appreciate the co-operation and planning on the part of BP in all its operations both in my constituency and that of my hon. Friend the Member for Dorset, South (Viscount Cranborne) at Wytch farm. If the Wytch farm standards are applied elsewhere, the public interest will be served both from the point of view of recovering oil and of protecting the environment.

Again I am grateful to my hon. Friend. I know only too well the pressures placed on Members of Parliament as a result of such developments, but it has been shown that such developments can be carried out in an environmentally acceptable way. I, too, commend the arrangements that BP has made, together with Dorset county council. Indeed, I am glad that this has not become a party political matter, because it is in the interests of the country as a whole.

When cases go to the Secretary of State on appeal for his consideration, will the Minister ensure that some degree of equivalence is applied to them? Will the right hon. Gentleman ensure that the Secretary of State gives the same consideration to the people of south-east England when they find a few nodding donkeys near their gardens as was given, for example, to applications for opencast coalmining in south Wales, with its consequent ravaging of the environment?

I appreciate the hon. Gentleman's point. There are three stages to the development of oil: exploration, appraisal and development. At each of the three stages there has to be a separate licence and a separate planning application. We also insist upon proper restoration and after-care. However, I have some sympathy with the hon. Gentleman's remarks. If we had imposed some concern for restoration and after-care on the industrial development that took place in the 19th century, we would not have so many of the industrial scars that we see today.

In the context of mineral extraction, if my right hon. Friend has a chance to speak to his right hon. and hon. Friends in the Department of Energy, will he put it to them that if it is their intention to proceed with turning Solihull into a coalmining community, it must be done with the maximum environmental sensitivity—

Order. I remind the hon. Gentleman that the question is about onshore drilling for oil, and his point seems rather wide of that.

Improvement And Repair Grants

4.

asked the Secretary of State for the Environment if he collects information on how many local authorities are currently giving discretionary improvement and repair grants.

6.

asked the Secretary of State for the Environment how many local authorities currently have a block on accepting or processing new improvement grant applications; how many of those are in urban areas; and if he will make a statement.

Responsibility for administering the home improvement grant system rests with local authorities. The Department does not collate information in the form requested on the grant approval practices of individual authorities.

The Minister's answer shows how little interest the Government have in repairs. May I inform the hon. Gentleman that only a handful of local authorities now deal with new applications for improvement and repair grants because of the cuts in housing investment programmes and the freezing of capital receipts? There was a pre-election boom in improvement grants, but there are now thousands of disillusioned people — many of whom are poor—who cannot have any repairs carried out because they cannot obtain help from the local authority. If Environment Ministers are to be more than just the Treasury's errand boys, when will there be a resumption of a reasonable level of repair grants? According to the Minister's own figures, there are 3·5 million unsatisfactory dwellings in this country.

The local authority is obliged by law to process and award mandatory grants. In Lambeth, discretionary grants are being considered by the local authority. I remind the hon. Gentleman that this year the likely spend on improvement grants will be well in excess of the £90 million spent when he and his Government were last in office.

Is not Waltham Forest, which incidentally is Tory-controlled with Liberal support, one of the increasing number of local authorities putting a block on improvement grants? Does that not mean that many people in Leyton are having the vital means to combat dilapidations cut off? What action will the Government take to restore grants, or will they openly confess that their policy is that good housing is expendable?

As I am sure the hon. Gentleman knows, the Government make an allocation available to Waltham Forest for housing, and it is up to the authority to decide how much to allocate to improvement grants and how much to other aspects of housing policy. We have made it clear that we hope that it will give priority in improvement grants to those on low incomes, the disabled, and those living in statutory improvement areas. The expenditure on improvement grants in Waltham Forest is likely to be substantially in excess of that six years ago.

Is my hon. Friend aware that there is a problem in the midlands as well as in London? In the light of the Green Paper, which talks about loans, will my hon. Friend have another look at the basic implementation of improvement grants, and in particular at what the late Anthony Crosland introduced in the late 1960s, because that system worked and people who applied for grants got them?

As my hon. Friend knows, we have recently issued a Green Paper outlining some new proposals for improvement grants and that will provide the opportunity, which my hon. Friend is seeking, to inject some helpful comments on how we might improve the system. Until the system is changed, people are entitled to apply under the legislation as it is; and, as I have shown, that is a fairly generous regime.

Does the hon. Gentleman believe that the deteriorating condition of our housing stock will be adequately tackled through the system proposed in the Green Paper of replacing grants by loans that must be repaid when the owner moves? Will that not simply be a tax on moving and make it even more difficult for the unemployed to get on their bikes?

An essential component of the Green Paper is the suggestion that the private sector should play a far greater part in restoring the housing stock, together with the owner-occupier. It is not right to expect the public sector to bear the burden of modernising the housing stock. At the end of the day, the responsibility should rest with the owner of the property.

Does my hon. Friend agree that the Green Paper on improvement grants contains much that is immensely worth while, particularly, for example, on the simplification of the designated areas and the definition of what is an unfit property? Therefore, is there any likelihood of early legislation on this important subject?

My hon. Friend will have to await the Queen's Speech to see our legislative proposals, but she is right to draw our attention to the suggestions in the Green Paper. The abolition of the rateable value, for example, will bring entitlement to many more people who are denied it at the moment, and there is a suggestion that there should be more generous compensation for those affected by clearance. There is much in the Green Paper that is worthy of support.

Is the Minister aware that in the Rotherham metropolitan borough more than 600 applicants for improvement grants have been disappointed in recent months, and that that is happening at a time when hundreds of building workers are unemployed? Does the hon. Gentleman accept that Green Papers are no answer to the urgent need for the improvement of Britain's housing stock and the creation of jobs?

It is up to the hon. Gentleman's local authority to decide how much of its resources to make available for improvement grants. I hope that it will take note of the hon. Gentleman's view that it should give greater priority to this than to other aspects of the programme. As to the Green Paper, if its proposals were followed up there would be better use of public money in that it would be targeted at the people and the buildings that need public sector help.

Asbestos And Toxic Substances

5.

asked the Secretary of State for the Environment what steps he will take to ensure that local communities, community councils and local councils are consulted prior to the dumping of asbestos or toxic substances in their areas.

The Parliamentary Under-Secretary of State for the Environment
(Mr. William Waldegrave)

Deposit of such wastes is already subject to licensing by county councils in England and by district councils in Scotland and Wales. All authorities can be expected to take account of local opinion in their decisions. In England, county councils are obliged by law to consult district councils.

Does the Minister consider it reasonable that his Department should have exploited a licence which was granted to deal with the dumping of domestic asbestos in Glenboig so that it will now have to cope with the whole of the Trident project and the vast quantities of asbestos arising from it? Is it fair that mining communities, which have already had more than their fair share of pneumoconiosis and other problems, should now have to put up with such dangers to their health and that of their families?

Whatever is done with asbestos waste, it must be done safely in regard to local communities and any other people in the area. I gather that the PSA's contractor, Shanks and McEwan, was asked on Monday by the sheriff court to have further consultations with the Monklands district council, and it will do so shortly.

Has my hon. Friend had time to consider the implications of and opportunities provided by the new technological process of vitrification of asbestos waste, following the Adjournment debate which I introduced two months ago? Does my hon. Friend appreciate that, if it can be done economically, it will remove the anxieties of hon. Members on each side of the House as well as those of local authorities and communities?

The process is indeed relevant to the problem raised by the hon. Member for Monklands, West (Mr. Clarke) and is under study.

Is the Minister aware that there is a great deal of disquiet in my constituency about the burial of asbestos waste? Is he aware that 100 tonnes of asbestos waste have been buried by the Central Electricity Generating Board on the site of Cliff Quay power station? Is he satisfied that the regulations governing the burial of such waste are adequate? Will he not hesitate to come before the House and seek to alter the regulations if he has any doubts in his mind arising from evidence from Ipswich or any other part of the country?

I am sure that any Minister must give that assurance. We have had the recent Doll inquiry into asbestos dangers, and the regulations seem to be satisfactory, but if any serious doubts were brought forward my Department would treat them as a matter or urgency.

Can the Minister tell the House whether there is any truth in the rumours that several hundred thousand tonnes of asbestos waste are to be dumped in Glenboig? Is it not curious that a contract which was let for the disposal of domestic waste is now apparently turning into one for the major disposal of asbestos from the nuclear submarine programme? Is that not a very unsatisfactory state of affairs?

Why does the Secretary of State not call in this proposal to dump large amounts of asbestos in the way proposed, especially bearing in mind what he said when publishing the report of the hazardous waste inspectorate? The Secretary of State then said that the report "shows a disturbing situation. It describes a level of performance in both public and pri/vate secto/rs /which too frequently falls below acceptable standards."—[Official Report, 5 June 1985; Vol. 80, c. 166.].

On a point of order, Mr. Speaker. Is it not out of order for an hon. Member to make a quotation during Question Time?

Order. The question was rather a long one. It is not in order for the hon. Member for Copeland (Dr. Cunningham) to read the passage, but he may paraphrase it.

Has not the Secretary of State's own inspectorate reported that the methods currently employed for the disposal of such wastes are very unsatisfactory? Will he now call in the proposal?

I am sure that the hon. Gentleman is familiar with the outcome of Monday's hearing. As was shown, the licence is adequate, but the sheriff has asked for further discussion between the contractor and the Monklands district council. My own Department is considering all the options. Understandably, this scale of operations was not envisaged originally, and we must see that the matter is dealt with properly.

System-Built Housing

7.

asked the Secretary of State for the Environment if he will institute an inquiry into the problems of system-built local authority housing and its implications for future housing investment.

The Building Research Establishment has carried out studies into problems associated with prefabricated reinforced concrete houses designed before 1960 and has published reports. It is now making a study of more recent large panel systems of construction. My Department has written to all local authorities asking them to let us know what work they believe is needed to renovate the houses and flats which they own, including system-built dwellings. When I have the results of this inquiry, I will consider the implications for future housing investment.

Is it not necessary for the Government to give a clear commitment that they are prepared to make financial resources available to deal with this massive problem? If the Government do not make those resources available, they will condemn many thousands of people to live in housing that is environmentally and socially unfit in many respects. People look to the Government for action. What action will the Minister take?

I have already explained to the House that the Building Research Establishment is inquiring into this matter. Sixteen full-time members of the staff at BRE are engaged in the study. I prefer to defer a decision on future investments that will be needed to deal with the problems to which the hon. Gentleman referred until after we have studied the reports from local authorities. I look forward to my meeting, which has been arranged for today week, with the hon. Gentleman and the chairman of Leeds city council housing committee.

Does my hon. Friend agree that the Government have already taken action with the implementation of the Housing Defects Act 1984? Does my hon. Friend welcome the agreement which appears to have been reached between the Building Societies Association and the National House Building Council? Building societies are to recommend to their vendors the fact that building societies will now be able to lend mortgages on PRC houses, thereby enabling people whose houses have been blighted to take advantage of the grants under the Housing Defects Act and once again restore a free market to this vital section of the community.

I am grateful to my hon. Friend for that question. He might have reminded the House, although he did not, that the Labour party voted against the Second Reading of the Housing Defects Bill. I welcome the progress that has been made by the NHBC and the building societies to arrive at an acceptable method of repairing defective houses. We do not yet have those acceptable methods of repair, but I hope that they will be in operation before the summer.

Housing Standards

8.

asked the Secretary of State for the Environment what is his most recent estimate of the number of homes in the United Kingdom regarded as being below tolerable standards.

The 1981 "English House Condition Survey" estimated that 1 · 1 million dwellings in England were unfit for human habitation. An updated estimate will be provided by the next survey to be held in 1986.

Does the hon. Gentleman accept the point made earlier by the hon. Member for Northampton, South (Mr. Morris), that only by providing proper improvement grants to private owners will we keep pace with the deterioration in housing stock? Is he aware that people in local government well remember what happened some years ago in the cities when the rate of grant was reduced from 75 to 50 per cent? Suddenly, private owners were unable to carry out the necessary renovations of their houses. Unless proper improvement grants are made available to those people, will we not be faced with having to demolish and rebuild some properties at far greater cost?

I must question the assumption at the beginning of the hon. Gentleman's supplementary question, that it is up to the taxpayer to maintain the condition of privately-owned houses. In the first instance, it must be the responsibility of the owner-occupier to maintain his house in good condition. Where that has failed, there is a case for public sector intervention in certain cases. It would be wrong to imply, as the hon. Gentleman did, that the emphasis on restoring the condition of private housing stock rests with the taxpayer.

Does my hon. Friend agree that the substantial reduction in the number of houses below a tolerable standard north of the border owes a great deal to the success of the Government's policy on housing improvement grants? Does he also agree that, judiciously used, housing improvement grants can do a great deal to improve housing stock and to create employment in the construction sector? Will my hon. Friend and his colleagues press the Treasury to make appropriate resources available for this important grant?

I hope that my hon. Friend agrees that the Department of the Environment has done well in relation to improvement grants. The figure increased from £90 million to £900 million over six years at a time of restraint on public expenditure generally. I hope my hon. Friend also agrees that, within public expenditure constraints, we have tried to make improvement grants a priority. I was encouraged to learn of the good results in Scotland. I am sure that the policy over the past five or six years has resulted in large numbers of houses in England being improved.

Does the Minister agree that the Government's only response to the problems of deteriorating and defective housing has been to cut local authority investment programmes by more than half in cash terms in the last five years and to prevent local authorities from using their own capital receipts to assist with the problem? Is he aware that that demonstrates yet again the Government's contempt for the badly housed, of whom there are hundreds of thousands?

I reject that analysis entirely. The policy of the Government has been to engage the resources of the private and public sectors to tackle the housing problems and to generate a large volume of receipts for local authorities from vigorous sales as a result of the right to buy, which was opposed at the time by Labour Members. I repeat that the answer to the problems caused by poor housing conditions does not rest solely on more public money being provided. We must also get the resources of the institutions and owner-occupiers.

Will my hon. Friend accept, however, that it is far cheaper to improve a house than to knock it down and build another? Is he aware that where clearance has taken place the social problems that have resulted have far outweighed any savings that my hon. Friend thinks there may have been in terms of improvement grants? Will he reconsider the importance of improvement grants, which I believe are good for the community, good for first time house-buyers, good for the country and ensure good value for money?

Order. I am sure that hon. Members on both sides want to hear the Minister's reply.

If my hon. Friend re-reads the Green Paper on improvement grants which we published a few weeks ago he will see that the Government share his desire to maintain the housing stock in good condition. However, we say that it is more important in the future to engage the resources of the private sector as well as those of the public sector so as to make even faster progress than we have so far made. I hope he will agree that the Government's commitment to getting the private institutions—building societies, pension funds and the building industry — to put more into it is wholly consistent with our philosophy and will enable us to make faster progress than we would were we to rely solely on publicly funded improvement grants.

The Minister should be deeply ashamed to stand at the Dispatch Box and announce to the House and, more importantly, to the country, that 1·1 million houses are not in a tolerable condition, especially at a time when he is cutting not only improvement grants but the financial wherewithal to solve the problem. Is it not patently obvious to him, even at this stage, that his policies have failed? Will he go back to the drawing board and re-think the whole issue, not just because of what Labour Members think about his policies, but on behalf of the people who are living in the houses in question? Is he aware that if he does not do that he will be condemning them to living in the sort of intolerable conditions in which he would not be prepared to live? Will he please have a re-think and produce a new solution, knowing that his policies have patently failed?

I remind the hon. Gentleman that the figure of unfit houses that was revealed in the 1981 survey was lower than the figure shown in the 1976 survey. [Interruption.] The 1976 figure showed fewer unfit houses than there were in 1971, and the 1981 figure showed fewer unfit houses than there were in 1976. It is not true to say, therefore, that there are more unfit houses. The answer to the rest of the hon. Gentleman's supplementary question is that we have recently outlined some fresh initiatives in relation to home improvements to enable faster progress to be made, and I look forward to seeing his response to our Green Paper.

Rent Acts

9.

asked the Secretary of State for the Environment when he expects to complete his review of the Rent Acts.

The Government hope to introduce legislation to encourage the supply of more homes for renting in the private sector, but probably not during the lifetime of this Parliament.

In view of newspaper rumours that the Cabinet has decided not to go ahead with the lifting of all rent restrictions, can the Secretary of State confirm that this is because the Prime Minister suddenly realised what the electoral consequences would be for her personally in Finchley if she lifted all rent controls in a constituency where no fewer than 23 per cent. of the households are living in privately rented accommodation, compared with 12 per cent. in the rest of the country?

I do not think that anyone other than the hon. Gentleman is talking about lifting all rent controls from privately rented property—[Interruption.] The fact of the matter is that the Labour party has done all that it can over the years to undermine the private rented sector and is determined to do nothing whatever to help it in the future. A heavy load of responsibility rests upon the Labour party.

Does my right hon. Friend agree that there are a substantial number of empty dwellings which were previously privately rented, particularly in London, which, if brought back into use, would go a long way towards solving the housing problem, and that the best way of achieving this aim would be to revive the private rented sector?

I agree with my hon. Friend, but the fact is that to restore the private rented sector so that it can play a proper role in housing the people of this country requires the confidence of landlords. Whatever proposals we introduced before the next general election would inevitably face the negative threat of repeal by the Labour party. That is why it is more sensible to consider introducing legislation early in the next Parliament.

Given that the Secretary of State long ago gave up the policy of building houses and that he has now gone back on the policy of improving houses and reforming the Rent Acts, what housing policy do this Government have left?

The hon. Gentleman is talking nonsense. There has been a huge recovery in the building of houses for sale. He will have seen the latest forecasts of the House Builders Federation. It expects substantially to increase the number of starts this year.

Is my right hon. Friend aware that by causing housing shortages the Rent Acts have been responsible for more misery and unhappiness than almost any other social question? Is it not shameful of the Government to have abandoned the cause of the repeal of the Rent Acts?

I can assure my hon. Friend that the Government have done no such thing. We share his view that there is a very important role to be played by the private rented sector, but if it is to play that role the Government have to enjoy the confidence of landlords and of those who would build and let. That is unlikely to happen as a result of any legislation passed before the next general election, and that is why I have decided to postpone it.

Is it not the case that the Minister for Housing and Construction has suffered a bitter political disappointment? His plan to abolish the Rent Acts and rent regulations have been vetoed by the Cabinet. One notices that he has not resigned. Is the Secretary of State aware that it will come as a considerable relief to many private tenants in London and elsewhere that there is to be no abolition of security of tenure and of the rent regulations, which, if it did come about, would cause the same misery as the Tory Rent Act of 1957?

The hon. Gentleman is quite wrong. There has never been any proposal to abolish rent control for sitting tenants. That was made absolutely clear. If the hon. Gentleman does not recognise that, in part at least, the problems of homelessness can be traced to the decline in the private rented sector, he is even more blind than I thought.

Is my right hon. Friend aware that there will be widespread disappointment at his announcement today? Many people feel that the problems of the homeless could very largely be met by liberalising the Rent Acts so as to bring into occupation the large quantities of empty housing that exist in this country?

My hon. Friend is right. If landlords are to be persuaded, after legislation, to let their empty property, they need to have confidence that they will be able to regain possession. Because of the threats of the Labour party that any such legislation would be repealed, there does not seem to be a great deal of sense in seeking to introduce legislation in this Parliament. My hon. Friend referred to empty properties. For some time we have been turning our attention to ways of trying to reduce the number of empty properties in the public sector, which has become a major scandal.

We are glad to have the confidence of the Secretary of State that Labour Members will be sitting on the Treasury Bench after the next election. One reason for that will be that we put the security of tenants above the profits of landlords. Although the Secretary of State and Conservative Back Bench Members bleed their hearts out for the homeless, do they not understand that the last time the Conservative party went down the road of Rachmanism and de-control—in 1957—the House was told that that would lead to an increase in private rented homes and a decrease in homelessness. However, it led to the fastest decline in the private rented sector since the war. Is the Minister aware that if the Government reintroduce the de-control of new or existing tenancies it will lead, not to an increase in rented accommodation, but to a decrease, hardship and Rachmanism?

The hon. Gentleman simply does not understand what he is talking about. Is a landlord more likely to bring pressure on a tenant to vacate his premises if that tenant is paying a low protected rent, or if he is paying a market rent? If there were de-control of new lettings, with tenants paying market rents, that would restore the balance. The hon. Gentleman has made the attitude of the Labour party crystal clear, and has fully justified our decision to wait until the next election.

Countryside Commission

10.

asked the Secretary of State for the Environment if he will state the level of funding for the Countryside Commission annually since 1979 at constant prices.

At constant prices and 1985 value, Countryside Commission expenditure has increased from £9 million in 1979 to £15·3 million this year. But the earlier figure excludes staff and accommodation costs, which were met directly by the Department until 1 April 1982. On a comparable basis, the increase in real terms is about 35 per cent.

I am grateful to my hon. Friend for that information, and I am sure that the House will support funding the Countryside Commission in a reasonable way, because it must discharge many difficult duties. Can he say what will happen when the GLC and the metropolitan councils are abolished? At present, they undertake duties and responsibilities that will fall upon the Countryside Commission after abolition.

Yesterday I met the chairman and senior officers of the Countryside Commission to discuss its corporate plan, and we discussed this matter in some detail. It will be a factor that we shall take into account when deciding the funds to be provided to the Countryside Commission next year.

Does the Minister appreciate that the Opposition believe that the voluntary amenity and conservation bodies are essential in the protection of the countryside? Will he confirm that, although the budget of the Countryside Commission has been increased, strings have been attached to it? One such string is that the amount provided to the voluntary societies is strictly limited. Will he increase that limit?

The Countryside Commission put that point to us yesterday, and we shall take it into account. It is not unfair to reflect the priorities of the Government and the House in the plans of the Countryside Commission, and the corporate plan is designed to be a reasonable consensus on the priorities.

Does my hon. Friend agree that one success of the Countryside Commission has been the establishment of demonstration farms, which have shown that productive agriculture and imaginative conservation can work hand in hand? Should we not follow up that success, and could not our aim of good stewardship for the countryside be furthered by giving great publicity to the demonstration farms?

My hon. Friend is right. The growth of farming and wildlife advisory groups, with the help of the Countryside Commission, has been an outstanding success in countryside policy in recent years. I hope that progress will be continued, and, if possible, accelerated.

Council House Sales (Bolton)

11.

asked the Secretary of State for the Environment if he will give the projected number of right-to-buy purchases in Bolton for 1985–86.

In its 1984 housing investment programme return, Bolton reported expecting 17 low-cost home ownership sales and 400 other dwelling sales in 1985–86. Authorities were not asked to separate right-to-buy sales.

Will my hon. Friend look into the case of my constituents, Mr. and Mrs. Bailey? They have a clear right to buy their council house, but are being obstructed by the joint efforts of Bolton council and the Greater Manchester council.

As, at long last, it is now Labour party policy to support the right-to-buy, I am sorry that this obstruction is continuing. I shall indeed see whether rights which Parliament intended to go to Mr. amd Mrs. Bailey are being unduly delayed or obstructed by two Labour-controlled authorities. I shall write to my hon. Friend as soon as I can.

Are not an increasing number of people who were encouraged to buy their homes now asking local authorities to repurchase them because of poverty and unemployment — [HoN. members: "In Bolton."] — in Bolton and the rest of the country? Does the Minister keep statistics on the number of people who wish to resell their houses to local authorities?

Repossessions of properties mortgaged to local authorities have fallen from 1,100 in 1981–82 to 800 in 1983–84.1 am sure that those figures are as relevant to Bolton as to anywhere else.

Home Improvement

12.

asked the Secretary of Ştate for the environment what representations he has received following the publication of the Green Paper on home improvements.

asked the Secretary of State for the Environment what responses he has received to the Green Paper on home improvement grants.

To date I have received four considered responses and a letter from an hon. Member on behalf of a constituent. There have also been a number of requests for a longer consultation period, and on 10 June my hon. Friend the Minister for Housing and Construction announced that the period is to be extended from 9 July to 30 September.

With 1·1 million unfit dwellings, including 500,000 with outside toilets, does the right hon. Gentleman not appreciate that this Green Paper, based on the means test principle, in no way matches the immensity of the problem? Should not the Secretary of State ensure that local authorities are given the wherewithal to tackle this vital work?

Overwhelmingly, the maintenance and improvement of private houses is, and always has been, carried out at the expense of their owners, with or without loans from building societies or banks. We expect that to continue. I had hoped that the hon. Gentleman would support a system whereby help from the taxpayer should be confined to those who really need it. It makes no sense to tax the public to pay for home improvements when owners can well afford such improvements themselves.

1

As early legislation on this Green Paper seems doubtful, will my right hon. Friend re-write the section dealing with rip-offs by cowboys? Is he aware that there is an extremely disappointing response in the Green Paper and that much stronger consumer protection measures are necessary?

I am sure that that is one of the matters to which we shall give great attention once we have received representations on the Green Paper. I hope that the extension of time for the submission of responses will be welcomed, not least by the building industry, which is looking forward to playing a fuller part in securing the maintenance, repair and improvement of the private sector.

Is the right hon. Gentleman aware that the Government's home improvements policy is bordering on the farcical? It is clear from the postbags of most Members of Parliament that at the first meeting of a local authority at the beginning of the financial year more applications are submitted than there is money available, and that for the next 11 months local authorities tell applicants that no home improvement money is left.

I am sure that the right hon. Gentleman recognises that the proposals in the Green Paper are a considerable simplification of the system, particularly of the different categories of grant. They draw a clear distinction between the mandatory improvement of houses, for which grants will continue to be available., and the discretionary repair and improvement of houses, for which a system of loans is suggested. In both cases this will be based on the means of the owner. This is a very much more rational system for securing public help for those owners who cannot afford to do the work themse/lves. I had hoped that the right hon. Gentleman would support that as a considerable improvement on the present system.

Does my right hon. Friend agree that expenditure arising from improvement grants is a very cost-effective way of maintaining the quality of our housing stock from the taxpayers' point of view and that it gives rise to a great deal of labour-intensive activity, adding demand to the British economy? In the light of that, does he agree that it is not the most appropriate area in which to seek savings?

I hope that my hon. Friend will have taken comfort from the most recent figures published by the Department, which suggests that in the first quarter of this year total expenditure on repairs, maintenance and improvement was 10 per cent. up on the previous quarter and 8 per cent. higher than for the comparable period of the previous year. [Interruption.] I hope that the Opposition will applaud that, because that is how to get houses repaired and improved. Even more significantly, that increase in total expenditure comes at a time when the peak of expenditure on improvement grants has already passed. I take much comfort from that.

Does the right hon. Gentleman agree that the statement on page 1 of the Green Paper that there are 3·5 million unsatisfactory houses is a damning indictment of Government policy in the last half dozen years? Why will the Government not come clean about the proposed changes? There are no figures in the Green Paper relating to compatibility with the social security review, and no figures are given in the social security review either. Does the right hon. Gentleman admit that the Government are trying to disguise the fact that they intend to make major savings in this area in which investment is desperately needed? Will he also publish figures, as the Secretary for Wales has recently done, giving an analysis of renovation grants? Is he aware that the analysis shows that the system is working quite well in Wales, in that the average household income for recipients of grant is just over £5,000 and 72 per cent. of those who received grants had savings of less than £1,000, so people on low incomes are clearly benefiting from the system?

We intend to publish the full results of the English distribution of grant inquiry in the autumn. Annex 1 to the Green Paper sets out the main findings in some detail, but I can give the hon. Gentleman an undertaking that the full figures will follow later.

The Green Paper rightly includes an annex about improvements and adaptations for the disabled. Does the Secretary of State intend that that should also cover improvements and adaptations for the elderly? Is he aware of the splendid "Staying Put" scheme sponsored by the Anchor housing association, and will he encourage the provision of loans for work of that kind?

I am well aware of the excellent work of the Anchor housing association through that scheme. I hope that the proposals in the Green Paper can be used to reinforce that work. I must, however, put it firmly to the House that it makes no sense for the taxpayer to have to put his hand in his pocket—we are always being told that people pay tax at far too low a level of income—to finance work on other people's houses when those other people could well afford to do the work themselves. We shall help those who need help, but not those who can afford to do the work themselves.

Water Supplies (Nitrate Content)

14.

asked the Secretary of State for the Environment if he has now come to a decision on the applications from water authorities for exemption from the regulations limiting the nitrate content of public water supplies.

The Council of European Communities' Ministers has laid down, with effect from the 15 July, a maximum concentration of 50 mg of nitrate per litre of water. Under article 9 the directive allows for derogations to be made and I have received 49 applications for derogation. I will announce my decision shortly.

Will the Minister accept my sincere congratulations on having so far resisted the enormous pressure on him and the Secretary of State to approve derogation,s which would be an environmental disaster and a potentially serious health hazard? Does he agree that it would be unthinkable for the Government to agree even to a temporary derogation, against the clear views of the World Health Organisation, without steps being taken to reduce the appalling use of nitrate fertilisers on farm land, which merely pollutes public water supplies?

My hon. Friend will know that the advice of the World Health Organisation does not accord with that which we have received in the report of the joint committee on medical aspects of water quality, which was published in April last year. Nevertheless, as my hon. Friend knows as well as any hon. Member, this is an extremely serious matter. I would want to give it more careful consideration. I shall meet our principal medical advisers before I come to a decision.

Why should we allow farmers to continue to use large quantities of nitrogen fertilisers which pollute our water supplies, endanger health and threaten wildlife, merely to produce large quantities of unwanted food, which must be stored at great expense to the taxpayer? We would not allow manufacturing industry to get away with that, would we? Would it not be more sensible for the hon. Gentleman to put pressure on the Minister for Agriculture, Fisheries and Food to stop farmers from using excessive quantities of nitrogen?

The House will know that, under the Control of Pollution Act 1974, a water authority can prosecute in appropriate cases when there has been pollution of a water supply. I remind the hon. Gentleman that, following discussions between my right hon. Friend the Minister of Agriculture, Fisheries and Food and me, a code of good agricultural practice, which deals with nitrates among other things, was issued in January. I hope that farmers will follow that advice. In conjunction with my right hon. Friend, I shall continue to monitor the situation.

My hon. Friend has told the House how important this matter is. Can he therefore explain why the Government are cutting the subsidy for research at the Freshwater Biological Association, which is in my constituency, when such an important part of its research is concerned with the effects of nitrates on water supply?

Although there might be/ some reductions in my noble Friend's constituency, there is an increase in other research, notably at the universities.

House Building (North-West Region)

15.

asked the Secretary of State for the Environment if he will make a statement on the house building programme in the north-west region.

About 20,050 dwellings were completed in the north-west region in 1984, compared with 18,250 in 1983 and 17,450 in 1982.

Is the Minister aware that those figures are pathetic when set against the need for housing in the north-west region? When the Secretary of State visits the north-west next week, and especially when he visits the city of Salford, will he please listen intently to the representations that will be made by that authority about the devastating effect on its housing programme of the severe cuts in housing investment programme money during the past six years?

My right hon. Friend is looking forward to his visit to the north-west in a few days' time. He will, of course, listen attentively to representations made by local councillors about the gravity of the housing situation there. I hope the hon. Gentleman agrees that the figures that I gave show a welcome increase in the number of completions in the north-west region.

Does my hon. Friend agree that, although it is important to consider the house building programme in the north-west, the building programme in the southeast is equally important? A planning application in the south-east region had a public inquiry two and a half years ago, and one single inspector has yet to make up his mind one way or the other.

Local Authorities (Services)

16.

asked the Secretary of State for the Environment whether he will carry out a survey of all local authorities to establish the changes in support for: home helps, nursery education, capitation, revenue support, mentally handicapped, the elderly, concessionary fares, adaptations under the Chronically Sick and Disabled Persons Act, community facilities, industrial promotion and repairs and maintenance to local authority property.

I have no plans to extend the surveys already undertaken by my Department to collect information on local authority expenditure on these services.

If a genuine survey were conducted, would it not reveal that support for home helps, nursery education, capitation, revenue support, mentally handicapped—[HoN. members: "Reading."] Yes, it is a long list—the elderly, concessionary fares, adaptations for the chronically sick and disabled, community facilities, industrial promotion budgets, repairs and maintenance to local authority properties — for every-thing affecting local authority programmes — has been cut to shreds? Why should Labour-controlled authorities, which were elected with a mandate to retain services, feel compelled to implement cuts imposed on them by the Government which offend the spirit of their manifestos?

The hon. Gentleman claims that there have been cuts in social provision in his area. By 1983·84, there were 10 per cent. more home helps than there were four years previously and 3 per cent. more nursery pupils, over the same period. Expenditure on concessionary fares increased by 90 per cent. over the same period. In the area covered by his district council, concessionary fares have increased by 89 per cent. Nursery school expenditure in Cumbria increased by 38 per cent. and home help expenditure increased by 69 per cent. I hope that he will personally thank the Prime Minister for the increase in social provision in his area.

Division (Member's Name)

3.30 pm

Last night, after the 10 o'clock Division, the hon. Member for Bow and Poplar (Mr. Mikardo) complained that, after having passed through the Aye Lobby, he found that the Tellers had already left. Mr. Deputy Speaker undertook to inquire into the matter. Inquiries have shown that the hon. Gentleman was in no way to blame. Accordingly, I direct that his name should be added to those recorded as voting in the Aye Lobby and that the total number should be corrected.

I/ a/m deeply grateful for what you have said, Mr.Speaker. I am sorry for any trouble that I may have caused to anyone.

Pensioners' Heating And Communications

3.32 pm

I beg to move,

That leave be given to bring in a Bill to guarantee supplies of gas and electricity to pensioners and to abolish standing charges for pensioners for gas and electricity and to abolish telephone rentals.

Last winter was an especially cold and unpleasant one and many people used extra heating during the winter to maintain some degree of comfort in their homes. I am sure that Members of this place did so, along with many pensioers throughout the country. Those hon. Members who did so will have no problem in paying last winter's gas and electricity bills, but many pensioners have been in some fear ever since the end of the winter, as they do not know how they will be able to pay their bills. The bills will be especially high because the winter was particularly severe.

It is important that we discuss the effects of the high costs of heating and cooking on pensioners and try to do something to alleviate them. Many statistics are available, but one that stands out a mile is that the deaths of the elderly are greater by 22 per cent. during the winter months than they are in the summer months. This is because the elderly cannot cope with the cold. Unfortunately, because of the high costs, many of them do not heat their homes to the level that they should. Many suffer from hypothermia and tragically many die as a result. The House should consider this matter seriously.

The number of pensioners whose gas or electricity supply is cut off as a result of inability to pay the bill is considerable. During December 1983 to December 1984, there were 92,825 electricity cut-offs. The most recent estimate suggests that about 4·5 per cent. of that number were pensioner households, which means that over 4,000 pensioners had their electricity supply cut off during that period.

The electricity and gas boards both claim that the number of cut-offs has reduced since the introduction of direct payment schemes, whereby pensioners and other poor people have their gas and electricity bills paid direct. That may be a satisfactory way for the boards to collect their money and to make the enormous profits that they now enjoy, but it results in a squeeze on the household budgets of pensioners and others who are the poorest in our society. This means that they lose out in other directions. For example, they may not eat properly and they may be unable to go out or do anything else to support their standard of living.

The aim of the Bill is, first, to guarantee supplies of gas and electricity for pensioners so that they cannot be cut off in any circumstances. That aim is based on society recognising that pensioners hold a special place in society and have special needs and that cutting off their gas or electricity is dangerous and could lead to their death.

I also suggest that we go some way towards alleviating pensioners' hardship by abolishing standing charges for them. The system of standing charges has been in operation for some years. It was supported by a report from the Price Commission on gas prices in 1979 and 1980 which claimed:

"The economic rationale for a separate standing charge for domestic credit customers is that it ensures that prices charged are more closely related to costs than would be the case if a single rate per therm were charged at all levels of usage. The supply of gas involves fixed costs per customer unrelated to the volume supplied."
I object to the fact that the report says that the introduction of standing charges would protect the largest consumers of gas and electricity, whereas I believe that we should be protecting the smallest consumers. The standing charge system means that the smallest consumers pay the most for gas and electricity. Because of that, a rebate system was introduced which meant that no consumer would pay more than half the bill in standing charges.

The problem with the rebate system is that it has not necessarily exclusively benefited pensioners. A report from the South of Scotland electricity board, and a number of others, shows that the main beneficiaries of the rebate scheme have not been pensioners but have been the owners of second homes which are the cause of great anxiety in Wales, Scotland and some parts of England.

Although the boards concede that the standing charge falls unfairly on the smallest consumers, they are now trying to withdraw it on the grounds that the only people who have benefited to any great extent are the owners of second homes. The boards are deliberately and callously ignoring the plight of pensioners and other small consumers who have to pay far more because of the standing charge system.

My Bill therefore proposes to end the rebate system and abolish standing charges for pensioners only so that the owners of second homes, who can well afford to heat their first home and probably their second home, do not benefit on the backs of pensioners and the good campaigning that the pensioners' organisations have done over the years.

The cost of standing charges varies, but added to the standing charges for gas and electricity and the telephone rental, they can easily amount to between £20 and £40 per quarter for a pensioner household. That is a scandalous amount and a major attack on living standards.

It is important that if the Bill is passed into law, as I hope it will be, hon. Members realise that I am not proposing to abolish standing charges for pensioners merely to increase the unit costs of gas, electricity and telephones for every other consumer—that would also obviously affect pensioner households — but that the Government should use public funds to ensure that there is no further increase in those prices for anyone because of the abolition of standing charges for pensioners.

Any examination of the financial results of both fuel boards in the past year would show that they could well afford to do that. In the year 1983–84, the Electricity Council returned a profit of £623 million, the British Gas Corporation returned a profit of £668 million and, over the past six months alone, British Telecom returned a profit of £684 million.

According to the Government's figures the cost of abolishing standing charges for gas and electricity would be only £300 million in one year. The British Gas Corporation levy last year was £522 million. The Government could well afford to abolish standing charges, and it would be a major benefit to pensioners.

I do not believe that the Bill would end the horror and poverty that many pensioner households face day in, day out, and the fear that many of them have about heating their homes adequately or even cooking a hot meal on a cold evening because they cannot afford the bill. However, it would go some way towards alleviating that poverty.

It is amazing that, in a few moments, the Secretary of State for Defence will be telling us of the bottomless pit that defence expenditure has become. The cost of just one quarter of the Trident programme will be £2.5 billion. The cost of abolishing standing charges for pensioners could be paid for by not proceeding with the ludicrous proposal to build a major international airport at Port Stanley. There are hundreds of other examples in the defence Estimates that could be used to pay the cost of my Bill.

It is unlikely that any hon. Member will rise and oppose the Bill. In some ways, I should be glad if hon. Members opposed it, because at least we would hear their arguments for charging pensioners and poor people more than wealthy people for gas and electricity.

Many pensioners' groups throughout the country have written to me enclosing copies of letters received from their own Members of Parliament who say how much they support the abolition of standing charges for gas and electricity for pensioners and the abolition of telephone rentals. Some of those letters come from surprising quarters. I shall not detain the House by reading out the names of the hon. Members involved, but when I have completed my researches I shall publish all the names and I think that we shall find that they make up a majority of the House. The nearer we get to the general election, the larger the majority will be.

I am sure that you will be glad, Mr. Speaker, to give me the opportunity to read out those names and to prove that there is a majority — albeit many of the hon. Members in that majority are practicing self-imposed silence — for the abolition of standing charges for gas and electricity for pensioners.

I hope that the House will take the problem seriously and will support the Bill to end the fear that many old people face as they try to meet last winter's bill and their trepidation about their inability to keep themselves warm or adequately fed next winter.

Question put and agreed to.

Bill ordered to be brought in by Mr. Jeremy Corbyn, Mr. Tony Benn, Mr. Tony Banks, Mr. Bob Clay, Mr. Harry Cohen, Mr. Dennis Canavan, Miss Joan Maynard, Ms. Clare Short, Mr. Dennis Skinner, Mr. Chris Smith, Mr. Robert N. Wareing and Mr. David Winnick.

pensioners' heating and communications

Mr. Jeremy Corbyn accordingly presented a Bill to guarantee supplies of gas and electricity to pensioners and to abolish standing charges for pensioners for gas and electricity and to abolish telephone rentals: And the same was read the First time; and ordered to be read a Second time on Friday 5 July and to be printed. [Bill 157.]

Defence

First Day's Debate

3.42 pm

I beg to move,

That this House approves the Statement on the Defence Estimates 1985, contained in Cmnd. 9430.

I announce to the House that I have selected the amendment in the name of the Leader of the Opposition.

In view of the number of right hon. and hon. Members who wish to take part in this important debate, I intend to impose the 10-minute limit on speeches between 7 o'clock and 9 o'clock. However, I hope that those who are called before 7 o'clock will also bear the limit in mind.

The White Paper provides both the background to Government policy and the essential facts which underlie it.

The House will be grateful to the defence Select Committee for its first and third reports, which have been published this week. The House will understand if I do not address today the issues raised in the first report on merchant shipping. It would be premature to do so, and the Committee itself has made it clear that it accepts this view.

On the third report, I welcome the Committee's comments on the presentation of the White Paper and I will ensure that they are passed on to those responsible within my Department.

I shall attempt today to address some of the issues raised by the Committee. In particular, I shall address two of its main themes: the absence of any major change in policy in the White Paper and whether in the long term we can sustain our present commitments within the sums of money likely to be available.

This year has seen a major reorganisation of the Ministry, which came into effect on 2 January. It is, I think, well established that we have concentrated on the output we get from the rising defence budget and on the enhanced value to be derived from a policy of increased competition. My right hon. Friend the Minister of State for Defence Procurement will be commenting in detail tomorrow on this aspect of our work.

In this year's White Paper, while continuing the emphasis on value for money questions, we have also sought to look in depth at defence policy. Chapter 2 of the White Paper addresses the United Kingdom's role within NATO, the Alliance's defence posture, including the application of new and emerging technology, and Britain's interest and responsibilities outside the NATO area. In chapter 3, we look at the European contribution to the Alliance and how the Europeans might strengthen their cooperation with one another. The White Paper includes an essay on NATO's strategy of flexible response and alternatives to it.

That is a formidable weight of material. It points to the considerable success of these policies. I would argue that that success is the best case for stability. If it is not necessary to change, why should we contemplate it? The Defence Committee acknowledges the consistency of policy but seems to be searching for a longer-term political and strategic prospect. It seems to be arguing for a review of policy priorities. I would not wish to appear complacent, but we should not indulge in a destabilising process of review unless the case for such a review is proved. To imply that change is needed, without suggesting the direction that it should take, carries with it the risk that confidence will be jeopardised because those in positions of responsibility lack belief in their own policies.

The starting point, therefore, for addressing the case for a new approach to strategy must be to address the adequacy or otherwise of NATO's present strategy of forward defence and flexible response. Has it served us well? Does it remain relevant to today's strategic circumstances? It is likely to be invalidated by developments we can already see, not just in technologies, but much more important, in political relationships?

It is the direct consequence of the strength and cohesion of the North Atlantic Alliance that Europe enjoys continuing peace and prosperity today and in such marked contrast to the circumstances of 40 years ago, which we are remembering this year. In those 40 years there have been enormous changes in the economic circumstances of Europe, but the underlying strategic realities, which developed in the immediate aftermath of the war, remain the same. In western Europe we must face the weight of Soviet military power, and the reality of a country which has been prepared to use that power in support of its political influence over the territory of others. We must deal with a country which combines the long-standing Russian obsession with secure borders with a much more modem mission to bring the world to communism, which is over-armed beyond the point of any rational assessment of its defence needs, and which has shown in the 1950s and 1960s in eastern Europe and in the 1970s and 1980s in Afghanistan a willingness to use those arms.

The clear lesson of the last 40 years is that the Soviet Union is prepared to extend its influence worldwide when low risk opportunities present themselves. It is not prepared to do so in every case. The Soviet leadership is cautious and careful. The risks will be carefully weighed. The essence of NATO strategy has been to ensure that there were no risk-free opportunities of aggression against a member of the Norm Atlantic Alliance. Its success then and now rests upon the Russians being in no doubt about both our ability and our will to defend ourselves and our allies.

I do not wish to exaggerate the Soviet military threat, but neither should we see it as less than it is. In this year's White Paper we have expanded the analysis of the balance and included the necessary caveats about the comparisons we make. The underlying military reality remains as daunting as ever: in conventional forces, in chemical weapons—about which the defence committee expresses its concern — and in the Soviet Union's huge and growing nuclear arsenal. There are chilling comparisons there for all to see. The White Paper sets out the facts very carefully. There has been no shift in Soviet policy except in its intensification.

The task then remains as it has done over the past three and a half decades: to maintain a credible deterrent within a coherent alliance. A wholly European alliance today could not provide an effective deterrent. What, then, are the prospects for sustaining the present uniquely successful alliance between the north American and the European peoples? There are, of course, those who suggest that the United States may turn its back on Europe as the balance of population and of interest in America increasingly turns to the Pacific. There is nothing new in this argument— it is not even just a post-war argument—but it ignores the huge American political and economic interest in Europe, as well as the closest historical and cultural ties.

Provided that we in Europe are prepared to sustain our commitment and contribution, we believe that a transatlantic partnership is the logical outcome of enlightened self-interest. The decisions taken by NATO defence Ministers in December about infrastructure and stock levels, and in May about the follow-up on conventional defence improvements are important, demonstrating the support for the Alliance not only of Britain but of the rest of the European allies. Our commitment to the Alliance is not simply a matter of money, or of conventional effort. Every member of the Alliance enjoys the benefits of the peace provided by the mix of forces underpinning NATO's present strategy. The nuclear element of that mix has to be sustained and modernised, no less than the conventional element. Only the most catastrophic consequences will follow if individual countries pick and choose between those elements of our strategy that they are prepared to sustain, those risks that they are prepared to share and those that they would prefer to leave to others. Of course, no one can prevent them from pursuing such a policy, because each of us is a sovereign nation, but the process of opting out and leaving others to take up the strain, and to carry a higher share of the responsibility, is a policy calculated to whet the appetite of a Soviet Union watching for the weak link and the risk-free opportunity.

Does my right hon. Friend agree that the Alliance and all its partners have been determined to modernise and to continue to improve their nuclear capability and that it is that which has brought the Soviet Union, at long last, to meaningful negotiations to try to achieve arms control?

To all except the most narrow-minded, that is self-evident and I shall return to that point later.

Is Ascension Island being used as a target area for cruise and MX missiles?

When I referred to all except the most marrow-minded, I had not realised how quickly that would be demonstrated.

I am not giving way to the hon. Gentleman. That is why the policies put forward by—

That is why the policies put forward by Labour Members represent just such a recipe for undermining the cohesion of the North Atlantic Alliance. Labour's policy of removing all American nuclear bases and weapons and of abandoning Britain's independent deterrent, and its search for a continentwide European nuclear-free zone would leave this country and Europe defenceless against nuclear blackmail; defenceless, that is, unless we are to look to the United States to protect us from the huge Soviet nuclear threat while we sit smugly in some cosy haven of moral superiority. The truth is that the abandonment by Britain of the basis of our defence policies since the war would be such a dramatic shock to the Alliance as to call the whole enterprise into question — which is, of course, exactly what a significant number of Opposition Members would like to achieve.

I am sure that the right hon. Gentleman knows full well that paragraph 105 of the Defence Estimates says of the Soviet Union:

"The roots of Soviet policy are complex. The Soviet Union … is a country obsessed with its own security".
If the Government accept that the Soviet Union is obsessed, as I believe it is, with its own security, is it not clear that its policies — I do not accept its internal system—towards the border countries and Afghanistan have resulted from its concern for its security? Will the right hon. Gentleman address himself not to some narrow issue but to the wider question of why the Soviet Union has arrived at its policy?

The House should listen carefully to the hon. Gentleman, because he is right. Every advance that the Soviet Union makes has been based upon an assertion of its own insecurity. However, the consequence for those into whose country the Soviets advance has been suppression by the Red Army. The logic of the hon. Gentleman's argument is that we should always withdraw, step by step, to leave a vacuum so that the Soviet Union can fill it. That is an intolerable assessment for any hon. Member.

Does my right hon. Friend recall the strategy employed in the 1930s by the Hitler regime, and the domino effect of picking off one weak nation after another, which inevitably led to the 1939-45 conflict? Is that not similar in many ways to the strategy being employed by the Soviet Union, which is trying to pick off weak nations to advance its own ideology, both political and military, in the 1970s, the 1980s and, possibly, the 1990s?

My hon. Friend is right, and it is precisely because the Labour Government of the 1940s saw clearly the dangers of repeating what happened in the 1930s that they helped to invite the Americans to join the NATO Alliance. They were right to do so.

I have no apologies for offering no new policies, and for not seeking to change the strategy that had served us well. I advocate continuity because the policies have brought success. This is not an argument for complacency. Our security policy rests not only upon the military forces necessary for a deterrent, which must be kept up to date, but on achieving agreements with the Soviet Union that would enable both sides to enjoy security with lower levels of armaments. These are not two separate aims; they are inextricably linked. The Soviet Union will not negotiate seriously if it believes that its interests can be achieved by other means. We saw between 1979 and 1983 a sustained propaganda campaign over the potential deployment of intermediate range nuclear forces. Before that, the Soviet Union had already deployed its SS20 intermediate nuclear threat, but when it did that, there was little protest on the streets of this country.

When we gave notice that we had to maintain the NATO deterrent, we were told by the Labour party, and by the protest groups so closely associated with it, that the Government's determination, and that of its Allies, to introduce Pershing II and cruise missiles, had destroyed the prospect of arms control. We were told that, if we proceeded with the modernisation of our intermediate range weapon systems, the Russians would walk out, and that the peace of Europe would be threatened.

However, the truth is that today the Soviet Union is back at the conference table, not because the West indulged in any one-sided gestures but because the Soviets realised that we had the will to go through with the necessary modernisation of our forces in the absence of arms control agreement. That is particularly because the one-sided disarmers had lost the democratic debate in the West. Once again, our policies worked, and the forecasts of the Left were revealed for the simple media fodder they really were.

The White Paper sets out the British Government's efforts in support of arms control. We must prevent the erosion of existing arms control agreements on strategic nuclear missiles and on anti-ballistic missile systems. We shall in that context strive for new agreements in Geneva.

If nations were to adopt the view that arms treaties and agreements are short-term pauses between technological breakthroughs of different weapon generations, then the arms control process would simply come to a halt. America has proved, in the SALT II context, that she has a wider vision. I believe that the whole House will wish to commend the announcement by President Reagan that the United States will continue to observe the SALT II constraints. It is a vivid demonstration of the seriousness with which the United States approaches arms control. We look to the Soviet Union to show an equally scrupulous attitude to its obligations and to negotiate seriously at Geneva towards real reductions in nuclear arsenals.

Our approach to the strategic defence initiative was set out in the four points agreed between the Prime Minister and the President of the United States at Camp David, and which were reaffirmed in February this year. The British Government support the need for research under that initiative, which is only prudent in the light of longstanding Soviet research in similar fields. We are at present discussing with the United States Administration British participation in the research. Such participation must bring clear benefits for our own defence effort and certainly must not represent a one-way traffic in expertise and technology. I agree with the Defence Committee that those issues need urgent consideration, which they are receiving — and that we should work closely with our European allies on them. We intend shortly to define the way forward.

One of the arguments in favour of our participation is a transfer of technology. Why should the United States expect to share the fruits of research and development in this area when it was so reluctant, in other areas such as the gas pipeline, to share technology with West European nations?

As I think the gist of the Select Committee report — I fully accept it — is that no European country, and certainly not the United Kingdom, will negotiate with the United States on the basis of one-way traffic in technoloy in this context, the answer to the hon. Member's question is clear. That thought will be at the forefront of the consideration that we as Ministers bring to the issue. It is already very much on the table in the dialogue between the United Kingdom and the United States. I have no doubt whatever that exactly the same thoughts will occur to our European allies.

Returning to the strategic defence initiative, the more fundamental issue of whether such systems should be deployed, although they are now being widely debated, is a decison for the future. It raises the profoundest strategic as well as technical issues. The United States Administration have set out the criteria which would need to be met in judging the feasibility of new technologies which may emerge from SDI research. They recognise that the defensive systems would have to be survivable in order not themselves to become tempting targets for attack They recognise that they must be cost effective at the margin, so that they are not simply countered by the other side adding offensive capability necessary to overcome the defence. Those are in themselves demanding criteria.

Above all, as the Select Committee recognises, the question which has to be addressed is the circumstances in which the deployment of SDI defences would enhance deterrence. What measures would be needed in other areas, particularly to rectify the conventional imbalance, in order to achieve this, and would they be in fact and in practice negotiable? The British Government's interest in those issues relates to the wider strategic questions which are at the heart of the alliance strategy.

As a nuclear power we have, of course, a particular interest and expertise, but that is not the driving force of our concern. I particularly welcome the Defence Committee's recognition that a new era of strategic defences would be unlikely to arrive while Trident is in service. The case for Trident is set out in the White Paper and I do not intend to expand on it today. I repeat that which perhaps needs no repetition — that the Government's commitment could not be more certain. We intend to take the steps necessary to maintain Britain's independent deterrent.

I have been looking through the White Paper and trying to find the costs which are allowed for in the Trident programme for the communications system between the sea-based submarines, which could be up to 6,000 miles away, and the politicians, to ensure that there is effective control. I realise that that is an extremely expensive system. It does not appear to be in the accounts in the White Paper.

I assure the hon. Gentleman that neither the Labour Government that presumably he would have supported in an earlier generation nor this Government would be so inept as to have inadequate communication systems on such a critical aspect of our defence capability. That Labour Members should laugh at such a statement merely reflects their naivety, because the Opposition have consistently supported the concept that Britain should have a Polaris independent nuclear deterrent.

If there is some specific breakdown of costs about which I can help the hon. Gentleman, I shall try to do so, but I assure him that the communication systems between our submarines and the Government will be impeccable.

I have concentrated so far on the problems of East-West relations and on our contribution to NATO. The Alliance is the foundation of our security, and about 95 per cent. of our defence budget is devoted, directly or indirectly, to alliance tasks. But neither we nor our allies can shut our eyes to the world beyond the NATO area. We still have some residual direct security responsibilities for the remaining dependent territories. We therefore retain garrisons in such diverse locations as Hong Kong, Gibraltar and the Falkland Islands. Our determination to continue to fulfil those responsibilities could not be more clearly illustrated than by the new Mount Pleasant airport in the Falklands, recently opened by His Royal Highness Prince Andrew.

The construction of the airport—a truly astonishing civil engineering feat—will enable us to reinforce the islands rapidly in the event of a crisis, to achieve savings in the cost of the garrison, and play an important role in the economic and social development of the Falklands. But our interests outside NATO are not restricted to those direct responsibilities. We must be prepared to bear our share of responsibility for protecting trade routes and for promoting peace and stability in those areas where local conflicts could spread and risk wider East-West confrontation.

As my right hon. Friend is talking in the context of our naval forces, he may well be aware of recent press speculation about the future of two types of vessel, known as OPV2 and OPV3. Those vessels were perhaps of some interest to a shipyard in my constituency, Hall Russell, which was hoping to bid for them. As there is considerable uncertainty about them, can my right hon. Friend say whether there is provision for either vessel in his programme, and specifically whether it is the case that, if there is no such provision, they have been deleted at the instance of the Royal Navy or for some other reason?

No, that offshore patrol vessel is a subject that the Royal Navy is exploring. It has been having conversations with industry. It may or may not wish to make a bid for the cash to pay for it. At the moment, no such cash provision has been made available. In any case, the appraisal of such a project would have to go through the central evaluation processes of the Ministry of Defence. That has not happened, and there is no way in which I have approved that the programme shall proceed. But it is perfectly healthy and reasonable that individual parts of the Ministry of Defence should have dialogue with industry about what possibilities may exist.

I think it is more a matter for my right hon. Friend the Minister of State for Defence Procurement. It is not a project in our main programme, and I do not think we want to be diverted into the minutiae of possibilities which are a considerable way from my decision-making process. If it is convenient to the House, we shall follow up that matter in the debate tomorrow.

We must be prepared to bear our share of responsibility for protecting trade routes and promoting peace and stability in those areas where local conflicts could spread and risk wider East-West confrontation.

The White Paper describes the various ways in which we contribute to these objectives — for example, our world wide network of defence facilities, our military assistance programmes and our contributions to peace-keeping forces. Ultimately, we maintain a capability to intervene militarily, either to protect our own interests or in response to a request for help from our friends. Drawing on the lessons of the Falklands conflict, we have made great strides in enhancing the mobility and flexibility of our forces to deploy rapidly at long range in a crisis. The use of such forces would be regarded very much as a last resort, but if they are to be effective in any crisis, they must be not only properly equipped but well trained.

We plan, therefore, to conduct a major strategic mobility exercise next year to demonstrate the ability of our forces to respond rapidly to a crisis outside the NATO area and to test the improvements we have made in our command and control arrangements.

The right hon. Gentleman has mentioned the savings that will be made by building the Mount Pleasant airport and the costs involved in maintaining the Falkland Islands. How many years will it take to recoup the enormous cost of building the airport?

I do not think that I can give that answer, because this is a military commitment which is essential to the original commitment to free the islands. Once the Labour party joined the Government in supporting the decision to send the task force, there was a defence commitment. Anyone with responsibility cannot now renege on that commitment. It is therefore part of our defence determination that we should have this defence facility. It will enable us to do the job much more rapidly and at a lower cost. The hon. Gentleman tries to have it both ways in suggesting that there is a practical alternative. The criticism, if there is one, is that Governments of both parties did not provide an effective airport in the Falklands many years ago.

While on the subject of mobility and the lessons of the Falklands conflict, does my right hon. Friend accept that one of the lessons learned from the Falklands war was the great importance of the helicopter on the battlefield? Is it not amazing that the appropriate military departments within the Ministry are taking another nine months to assess air staff target 404, which can readily be filled by the W30 helicopters that are manufactured in and around my constituency?

My hon. Friend's concern for Britain's defence interests is well known. Perhaps he will forgive me if, in the present circumstances, I do not become too deeply drawn into those matters. [Interruption.] The hon. Gentleman understands the sensitivity of this issue. The Army is reviewing the requirements. It must be my responsibility as Secretary of State for Defence to be sure that the Army is satisfied before I take any decisions. I am not trying to impose a political judgment upon the military requirements in these circumstances. I turn now to the scale of the defence programme. In 1985–86, the defence budget will be about £18 billion— an increase of more than £1 billion in cash terms over 1984–85. By the end of this financial year, we shall have completed an unprecedented period of seven years of consecutive real growth in the defence budget. British defence expenditure is the highest in total and per capita of the major European members of the Alliance. The proportion of the budget spent on equipment is the highest of any NATO country. I cannot help wondering sometimes, as I read the critics of our defence policy, just how uneasy they might feel if they lived in one of our neighbouring Alliance countries, facing much the same threat but having so much smaller a defence budget with which to counter it.

But what are we getting for the money we spend on defence? Chapter 4 of the White Paper sets out in detail the equipment that is coming into service or being developed for the armed forces. Let me pick out some of the highlights.

For the Army, the re-equipping of armoured regiments with the Challenger tank continues. I am able to announce today that an order for further Challenger tanks is being placed with Royal Ordnance plc, to equip a sixth Challenger regiment. The infantry's mobility and protection will be improved by the introduction of the MCV80 and Saxon armoured personnel carriers, and it is already being issued with the new SA80 small arm.

The artillery supporting these troops will receive the multiple launch rocket system. In the same time frame, we will be replacing the ageing 105 mm Abbot with the collaborative 155 mm SP70 self-propelled gun. The artillery's target acquisition will be improved with the Phoenix remotely piloted aerial reconnaissance vehicle, and the battlefield artillery target engagement system will enable us to employ our artillery resources to the best possible effect. In air defence, Rapier is being improved and work is going well on the new short-range high-velocity missile to complement Javelin.

Finally, we will get the best possible value from all these weapons through the introduction from this year of Ptarmigan, a secure field trunk communications system unmatched anywhere in the world, and Wavell, our first major venture in computer-assisted command and control.

The majority of the RAF's front line assets are being replaced with new aircraft and new weapons. Nine Tornado GR1 squadrons have now formed and will eventually build up to 11 squadrons. The Tornado GRl's armoury will include the JP233 cratering and area denial weapon, deliveries of which will begin later this year, and the ALARM defence suppression weapon, planned to enter service in two years. Deliveries of Tornado F2, the air defence variant, have begun and the operational conversion unit was formed on 1 May this year. The number of air defence squadrons in the United Kingdom will be increased from seven to nine. In the ground support role, the Harrier GR5 will replace the Harrier GR3 and will be armed with an improved version of the BL755 anti-armour weapon, which will enter service with the GR3 this year.

My right hon. Friend did not mention a replacement for the Jaguar. The House will be very much aware of the ministerial meeting to be held on 18 June in this city on the European fighter aircraft. Will my hon. Friend assure the House that, in those important ministerial discussions, he will ensure that the RAF's key operational requirement and the industrial considerations which are so crucial to this country are met?

I am grateful to my hon. Friend. Perhaps he will allow me to come to that point a little later.

Since entering office in 1979, we have ordered 45 ships for the Royal Navy. In the last year and a half, we have ordered or set in hand procurement action for five completely new classes. The first class of the type 23 frigate and the type 2400 conventional submarine are on order. We have invited or received tenders for the single-role minehunter, the auxiliary oiler replenishment vessel and the Trident ballistic missile submarine.

The highlight of the next few years will be the entry into service of the type 23 frigate with Harpoon, vertically launched Sea Wolf, Sonar 2050 and the EH 101 helicopter — all advanced equipment of the highest quality and capability.

I note the concern expressed by the Defence Committee on the ordering rate of destroyers and frigates. Our commitment remains to a force level of about 50 in the longer term. We intend to sustain an ordering rate of broadly three new frigates a year from the first follow-on type 23s. Since 1979 we have spent over £2 billion more in real terms on the conventional Navy — excluding Falklands replacements — than if spending had been maintained at the 1978–79 level.

Important though our equipment plans are, the capability of our forces rests equally upon the quality and motivation of those in the armed forces and of the civilians who work alongside them. I will certainly ensure, as the Select Committee has requested, that more is said about this area in next year's White Paper.

It may be helpful if I say a word about recruitment and retention in the armed forces.

What decision has my right hon. Friend reached about the replacement of the existing specialised ships for 3 Commando Brigade, Royal Marines? If we are to reinforce the northern flank in war, it is important to be able to get there.

I hope that hon. Members will agree that I have given way sufficiently. I have much more to say, and I wish to make progress.

I come now to recruitment and retention in the armed forces. Volume 2 of the White Paper shows that, between April 1979 and January 1985, the strengths of trained United Kingdom regular forces increased from about 284,000 to about 297,000. The figures do not support the more extreme reports of increasing overstretch that have appeared in the press. Recruitment is generally good, except in some technical areas where there is fierce competition from the civilian sector.

Outflow from the armed forces is certainly increasing as the economy picks up. [Interruption.]If opposition Members do not understand that in large parts of British industry there is now a significant scarcity of skilled and trained people, they have no idea of the rate of change in the industrialisation of the western world.

Although there has been an increase in the outflow as the pressure from industry increases, the figures must be seen in perspective. The outflow in the last financial year, at about 34,500, is up on the previous year, but it is also about 15,000, or 30 per cent., lower than the figure in 1978-79, before we came to office.

The Government are committed to maintaining the remuneration of the armed forces at a level sufficient to meet the requirements for trained manpower arising from our defence policy. The announcement by my right hon. Friend the Prime Minister last week of the Government's response to the 1985 armed forces pay review body report showed in the clearest and most tangible way the considerable commitment that we have made and have maintained.

We attach equal importance to the strength of our volunteer reserve forces, The Territorial Army currently stands at 73,500, compared with 59,000 six years ago, and the planned expansion to 86,000 by the end of the decade continues to progress. We are pressing ahead with the expansion of the home service force, initially to a strength of about 5,000.

Recruitment to 38 new home service force companies formed earlier this year is going well. We are proceeding with plans to increase the strengths of the Royal Naval Reserve, the Royal Marines Reserve and the Royal Naval Auxiliary Force. This expansion of our volunteer reserves represents a particularly cost-effective way of augmenting the front line capability of our regular forces.

I come now to the defence programme in the longer term, to which the Defence Committee devoted much of its report. I say straight away that there is much in the report with which I agree. It provides a useful historical perspective on the Government's commitment to the aim of increases, in the region of 3 per cent. a year, in defence expenditure in real terms.

Given the background which I have described, of the substantial increases in defence expenditure since 1978-79 and of our position relative to our allies, the Government have made it clear for a number of years that after 1985-86, we should seek a stable level of defence expenditure. This is a British decision in a British context. We continue to subscribe to the resource guidance of the Alliance as a whole, which includes the 3 per cent. aim as a general guide. Many members of the Alliance have a long way to go before the effort begins to approach that of the United Kingdom.

That said, I agree with the view expressed by the Defence Committee that more emphasis should be placed in the future on outputs rather than inputs as a public and political measurement of defence effort. Personally, I believe that the conduct of many other areas of public policy would benefit from such a change. As the Committee points out, a financial increase is not by itself a measure of increased efficiency, and greater efficiency may enhance military capability at no additional cost. It is to this prize of increased efficiency that our efforts in the years to come must be increasingly directed. ▪

In addressing the implications for the defence programme of the ending of the 3 per cent. aim, it is also important to recognise that this change has been assumed in our plans for a number of years. The Committee recognises that 3 per cent. growth has never been the basis for expenditure plans after 1985-86. The programme set out in the White Paper "The Way Forward" in 1981— which included provision for Trident—assumed such a growth rate only until that year.

I cannot say precisely how the defence budget will develop in volume terms in the next few years. This depends on a range of factors, some positive, some negative. I cannot engage in a detailed line-by-line, figure-by-figure analysis of the gloomy picture painted by the Defence Committee.

On the Defence Committee's assumptions, it foresees a potential squeeze on the defence budget in real terms, postulating a worst case in which the budget would be £970 million lower in real terms in 1987-88 than in 1985-86. Later in its report, the Committee points to possible offsetting efficiency savings amounting, again on its assumptions, to some £700 million. Although the pluses almost equal the minuses, the conclusion is drawn that they will not be enough to redress the balance; but on the Committee's own arithmetic, the figures are marginal in terms of a total defence budget of some £18 billion to £19 billion a year.

The Committee justifies its concern by reference to the policy to which I am wholly committed, of maintaining flexibility in the defence programme. It must be said that it is seen in a sinister light, as preparing the way for a defence review by stealth.

The truth is less dramatic. The truth which guided my Department's response to the committee's requests for information on our future programme was not new. The Ministry of Defence pointed out to the Committee in 1981, for example, that it was not possible to provide details about the equipment provision in our long-term costing. The Ministry said then that over a 10-year period, the costing becomes increasingly speculative the further forward one tries to look, and that in many cases the assumptions used can be no more than conjecture by officials about how Ministers will settle issues which have still to be clarified and have not yet been put to Ministers.

The status of these planning documents has not changed in the intervening period. My ministerial colleagues and I have sought in the last year or so to institute management arrangements for the programme which fully reflect the increasingly speculative nature of the costing and properly differentiate between the extent of ministerial commitment to individual projects and to the stages within them.

We have also taken account of the politics of defence budgeting, which is like the politics of all other kinds of public expenditure planning. It will, I suspect, come as no surprise to the House to hear that my Department's forward programme is changing constantly for a variety of reasons — changes in military specification, technical difficulties, industrial slippage and so on. These adjustments attract little attention and only the major ones ever come across the desks of Ministers.

All these changes are described as adjustments, but there is one category of adjustment which is different. That is where a Minister changes a programme assumption to take account of whether there is actually the cash available to meet everyone's aspirations. That is called not an "adjustment" but a "cut". Such language is the time-honoured practice of every interest seeking to extend or maintain its programme.

Frankly, the only significant change in the Ministry of Defence is that I have joined that club on behalf of the taxpayer. We now plan our programmes to live within the cash available to meet them. Just because a Department is large and its budget huge, there is no excuse for ignoring the basic rules of prudence that characterise the private sector but not public expenditure planning.

There is, then, no hidden motive behind my reluctance to disclose all the assumptions being made in 1985 about the programme stretching 10 years ahead and beyond. We are continuing properly to plan on a long-term basis to sustain our commitments and the defence roles identified in the 1981 and 1982 White Papers. The resources which can realistically be postulated for defence in the longer term are sufficient to sustain these roles and to provide for the major re-equipment programmes of the services, currently foreseen. Whatever the pressures arising from cash planning, the fact remains that defence expenditure is now some £3 billion higher than when we came into office. We have a steep increase which we know only a Conservative Government would have provided.

Of course I know of the understandable and legitimate concern of my right hon. and hon. Friends on the Select Committee for the proper defence of this country, but as I read the Select Committee report I could not help wondering about the role of the Opposition Members on the Select Committee, when only two years ago the Labour party went into a general election seeking to reduce defence expenditure by one third. Now they tell me that £3 billion a year more is not enough. The protestations of the Opposition about the defence programme are, in truth, humbug.

One way in which savings can be made is through greater co-operation between our European partners in NATO. Can my right hon. Friend say a word about the work of the independent European programme group and how it can be worked into the programme to our advantage?

My hon. Friend is most kind in anticipating what remains of my speech. I shall not give details of numbers and in-service dates stretching 10 years ahead. They would, in any case, be overtaken, for a variety of reasons. Nor do I see any case for rushing decisions to replace capabilities until the military requirements and options for meeting them have been properly studied and set alongside other priorities. It is these considerations, rather than funding difficulties, that have governed our approach to future amphibious capability, upon which the Select Committee has commented. The right way forward is to release cash progressively on new equipment against tightly drawn contracts, to maintain a careful balance between commitment and cash and to keep options open in the longer term in order to take account of strategic circumstances, technological opportunities and cash availability nearer the time.

I must say a little more about the amphibious capability replacement, about which I have told the House the precise story. If the idea should once get about in the Ministry of Defence that that part of each individual armed service was likely to get preferment over all the rest of the priorities by leaking its concern either to the press or to hon. Members in order to embarrass Ministers in the Ministry of Defence, it would bring our legitimate planning process to a grinding halt. That is precisely what has happened in this case. I am not prepared to be sucked into that process.

If the hon. Member wants to call it a terrible accusation, so be it but if he should ever serve in a Government, which I doubt, he would find that life is not so rosy as it looks from the Opposition Benches.

Let me say a word, finally, about our programme to improve efficiency. My right hon. Friend the Minister for Defence Procurement will no doubt discuss tomorrow our efforts to increase competition in defence procurement. The problem of defence equipment inflation at a faster rate than elsewhere in the economy, to which the Select Committee on Defence rightly draw attention, is, I believe, a product of our practice in defence contracting in the past, with too many contracts being placed on some form of cost-plus arrangement.

If one wants to ensure that one's prices move up ahead of inflation, cost-plus contracting is the surest way to achieve it. I do not want to minimise the difficulties in moving towards more competition, particularly in areas of high technology. It is difficult to offer a global figure for savings when so few contracts placed in one year are comparable with contracts placed in the next year, but the results to date have been most encouraging.

I told the House recently that, as a result of competition, we were able to buy the Royal Air Force's trainer replacement at a saving of about £60 million, or 35 per cent, less than the estimates upon which the Department had previously worked. Today I am able to announce a decision to place an order for 1,048 mechanised combat vehicles with Guest, Keen and Nettlefold and Sankey. The total programme cost of about £725 million shows a saving of over £100 million against our internal estimates and is a direct result of our policy of increasing competition throughout our procurement policies.

The House may wonder just where, in practice, the concept of a defence price inflater came from. This is not a policy which will win universal acclaim from defence contractors, but their long-term viability depends upon their ability to remain competitive. It depends also upon their capacity to continue to match American defence technology.

I do not believe that, in the years ahead, this will be feasible on a national basis, with one European country competing with another. The search for increases in collaboration is not simply concerned with achieving economy. The hugely fragmented European defence industry will not be a match for the competition, particularly with the likely impact in America of the strategic defence initiative programme, unless urgent efforts are made to eliminate wasteful duplication and to enhance co-operation on research and development. The meeting in London, to which my hon. Friend the Member for Harrogate (Mr. Banks) referred, of the independent European programme group next week will be an important test of the willingness of European defence Ministers to take concrete measures in these areas rather than simply to articulate aspirations and aims.

Next week will also see a further meeting of defence Ministers, another matter about which my hon. Friend asked me, involved in the five-nation European fighter aircraft programme. It would be quite wrong of me to say that no differences remain between the collaborative partners. There are still very large differences of view, but I cannot emphasise too strongly the desire of the United Kingdom to bring about a successful collaborative fighter aircraft programme that meets the air staff's requirements, and with equitable industrial arrangements. We in this country seek a true partnership.

I would not expect my colleagues in Germany, France, Italy and Spain to attempt to explain away in their countries a deal that was against their national interests. I will certainly accept no such arrangement on behalf of this country. However, the longer that European resources are frittered away on overlapping research, development and production facilities at a national level, the longer we allow the major world powers to widen the technological gap that is already an awesome chasm.

Finally, I draw attention to a third plank in our effort to make the most efficient use of defence resources: our drive to prune overheads and, to the maximum extent possible, to direct resources to the front line. The army's exercise Lean Look moves 4,000 men to the front line from the administrative tail. The Royal Navy is to find by increased efficiency the men necessary to man those eight destroyers and frigates wh*ich, under previous plans, were to have been placed in the standby squadron.

Perhaps my hon. Friend will forgive me if I do not; I am nearing the end of my speech. In the case of civilian staff, numbers at 1 April 1985 stood at about 174,000, some 74,000 lower than when this Government came to office, and some 7,000 lower than a year ago. The scale of this reduction and the willingness of our civilian staff to adapt to change in accordance with the Government's priorities are insufficiently appreciated. I am immensely grateful for the efforts that they make.

The measures I have described to improve efficiency and to improve the competitiveness of our defence industrial base are of major importance, but they are not, and they never could be, my key responsibilities. Those responsibilities are to sustain the professionalism and the fighting power of our armed forces and to work with our allies to maintain a uniquely successful and long-lasting alliance for peace. The policies set out in the 1985 statement on the Defence Estimates are designed to achieve those aims. I commend them to the House.

4.39 pm

I beg to move, To leave out from "House" to the end of the Question and to add instead thereof:

'believes that the plans outlined in the Statement on the Defence Estimates 1985, Cmnd. 9430, in particular the Government's policies of buying, at an ever-increasing cost, the Trident nuclear system, will inevitably lead to further damaging cuts in Britain's real defence and in our conventional contribution to the North Atlantic Treaty Organisation; believes also, that in view of the North Atlantic Treaty Organisation's present strategy of "first use" of nuclear weapons, a reduced conventional contribution will increase the risk of a nuclear war in Europe; calls upon the Government to cancel Trident, to remove all nuclear bases from the United Kingdom and work within the North Atlantic Treaty Organisation for a substantial reduction in, and eventually the elimination of, battlefield nuclear weapons; notes with alarm the decline of the Merchant Navy; and urges the Government to take positive and immediate steps to arrest and reverse that decline.'.
The Secretary of State made the speech that I had expected him to make. Indeed, it was not greatly different from his speech last year. I do not complain about the fact that he took an hour to make it, because there were many interventions. However, he failed to answer two questions put to him by Opposition Members, and I hope that the answers will be forthcoming before the end of the debate. During that hour, the Secretary of State had a bash at the Russians, as he did last year. Then he started on the Labour party. Then we went to the Falkland Islands and to Hong Kong. We spent some time on the strategic defence initiative and arms control, and he spent about five minutes on the Select Committee's report about future programmes. The Secretary of State said that he would not attempt a line-by-line, figure-by-figure analysis of all the gloomy reviews. He has better things to do than that. He told us that, in the long term, everything would be all right. We do not know about the long term, but in the shorter term, which we can see easily, the Secretary of State will have serious problems with his defence budget.

I agreed with the right hon. Gentleman about one thing. He made the point clearly that it is for the sovereign nations of NATO to make their decisions about their defence policies within the Alliance. He instanced the ending of the commitment to increase spending by 3 per cent. Indeed, President Reagan made a sovereign, unilateral decision, which turned NATO's strategy upside down, in relation to the SDI. We do not agree with it, but we accept the right of a sovereign Government to determine their own strategy.

The White Paper, like last year's White Paper, does not deal with the real problems of defence policy and expenditure that will occur in the next few years. The only difference between last year's White Paper and this year's one is that another year has gone by and the time for difficult decisions is getting closer. It is no good the Secretary of State trying to hide behind MINIS, contracts and tenders. Difficult decisions will have to be taken by him or by his successor.

It will come as no surprise to the House or to the Secretary of State if I say that the White Paper did not receive rave notices. An editorial in the Daily Telegraph the day after the White Paper was published stated:

"Heseltine's Fudge. If the statement on the Defence Estimates were the accounts of a public company they would have at best sent the share price sliding and at worst been qualified by the auditors. The picture which Mr. Michael Heseltine… is trying to present to the world has only a passing resemblance to reality."
During the same week, The Economist said:
"This bland document has avoided all important decisions and contains no signposts to future defence policies … Mr. Michael Heseltine gives the impression that he does not grasp the problem."
That is unfair to the Secretary of State. He grasps the problem in the sense that he understands it; he does not grasp it in the sense of having the courage to do something about it.

Those were the first-night reviews. They have become worse. Yesterday morning, an editorial in the Daily Mailstated:
"When two plus two makes three—are Britain's Defence Estimates a confidence trick?"
It comes to the conclusion that they are.

The worst condemnation comes from the Select Committee on Defence, over whose report the Secretary of State skated. The Committee, chaired by the right hon. Member for Spelthorne (Sir H. Atkins), bitterly criticised the Ministry of Defence for giving vague and evasive answers, and for not giving the Committee any information about future requirements. From my reading of the report, I have the clear suspicion that the right hon. Gentleman is up up to his old game of hiding behind national security when trying to avoid political embarrassment to himself, to the Department and to the Government. It is not the first time that he has tried to do so in respect of Select Committees and inquiries in the House.

The Secretary of State knows what the problem is. He may not be as brilliant at reading balance sheets as is the former chairman of the Conservative party and former Secretary of State for Trade and Industry, the right hon. Member for Hertsmere (Mr. Parkinson). We heard the other morning that he is extremely good at doing that. But the Secretary of State knows the score. He knows that he does not have enough money to pay for Trident and to maintain an adequate conventional capability in our defence. Although the right hon. Gentleman would not analyse the problem, I shall do so. It comes from two sources, the first being the public expenditure White Paper that was published in January. The phrases in his speech, including "value for money", "fighting for the taxpayer", and "making sure that the taxpayer gets a good deal", are a smokescreen for cuts. The problem also stems from the Government's decision to buy Trident.

Last year, the Secretary of State lost the battle with the Chancellor, and we wait with interest to see what happens this year. We hear on the grapevine around the Palace of Westminster that this year will be stand-and-fight year. I have heard phrases such as, "Doing a Pym". That is not a reference to the recent footballing activities of the right hon. Member for Cambridgeshire, South-East (Mr. Pym). It is a reference to his time at the Ministry of Defence, where the folk memory is that he resisted cuts in conventional defence, thereby sowing the seeds, some people say, of his eventual demise. I do not know whether it is wise to adopt similar procedures, and no doubt the Secretary of State will decide for himself.

However, once the Secretary of State conceded a zero growth budget for the years after this, it was inevitable that there would be cuts in defence expenditure. I shall try to show why.

Where are the cuts, and what are the alternative policies proposed by the right hon. Gentleman?

That was not up to the usual standard of the hon. Gentleman's interventions. I shall try to explain the cuts in a moment.

After 1985–86, Britain will have a zero growth budget based on Treasury assumptions. The crucial assumption is the Treasury's figure for inflation, which is called the GDP deflator—I see the right hon. Member for Spelthorne nodding, so I must have got that right. The GDP deflator is not a forecast but half assumption, half forecast. This year, the figure is 5 per cent.; for next year, it will be 4·5 per cent.; and for the year after, it will be 3·5 per cent. I am talking about general inflation in the economy, not about defence inflation. If inflation exceeds those estimates, there will have to be cuts in defence expenditure, unless the Treasury changes the figures or it gives the Secretary of State more money, which is unlikely, since the figures relate not only to the Ministry of Defence but to all public expenditure by the Government.

Let us assume that the Treasury figure is not exactly right and that inflation will be 5 per cent. this year, 5 per cent. next year and 5 per cent. the year after. That is a fairly reasonable assumption. On the basis of those figures that will take away an extra £900 million, or 6 per cent., from the defence budget next year and the following year. That is where the cuts will come from, and the margin need only be 1 to 1.5 per cent, each year.

Those figures do not take account of what is called defence inflation. All we can say about that is that generally in the past the increase in the cost of equipment has tended to be greater than the rise in inflation in the economy. I do not know why, but I suspect that the right hon. Gentleman has a point when he says that it is partly due to inefficiency and other reasons. I do not dispute that.

Let us then assume that defence inflation for those two years is only 1 per cent, a year greater than the rate of inflation. That will put at least another £500 million on the defence budget in those two years—[Interruption.] The Secretary of State mutters, "No," but he should bear in mind that the Select Committee assumed a 2 per cent. defence inflation figure. Assuming that the general inflation targets in the economy are met, that 2 per cent. amounts to a reduction of £960 million. Again, that is around 6 per cent.

Indeed, the chief of the general staff, Sir Edwin Bramall, said that it would be between about 4 and 7 per cent., and Mr. David Greenwood, a distinguished defence analyst who has not yet been attacked by the chairman of the Conservative party for heresy—I can therefore quote him—said that there will be a funding loss in excess of £2,000 million by 1988-89. It may not be as high as that, but even on different Conservative assumptions it is clear that the Secretary of State or his successor will be faced with a funding deficit — quite apart from Trident—of between £1,000 million and £2,000 million purely because of inflationary assumptions.

That is a horrendous problem, but what about Trident —the Tory party's sacred cow, Trojan horse or cuckoo in the nest? Apparently we are to have a zero growth defence budget. In my view it will be a minus growth defence budget for the reasons that I have just given. But even a zero growth defence budget does not solve the problem of Trident. Over the next three years the costs of Trident will escalate, and by the end of the decade will rise by about £1,100 million a year.

The Secretary of State could have denied that had he wished, because it was in the Select Committee report.

I could stay on my feet a long time denying the rubbish to which we are listening, but when the right hon. Gentleman reads Hansard he will see that he said that the cost would go up by £1,100 million a year. In the peak year, the highest estimates for all the costs of Trident are about £1,000 million.

I said that the cost would go up to that figure—[hon. members: "No."] Well that is what I meant to say. But it does not invalidate my case. The costs of Trident are now increasing rapidly, and it is no good the Secretary of State smiling because he thinks he has made a debating point. The fact remains that over the next few years the costs of Trident will escalate rapidly within a zero growth increase in the defence budget.

If the defence budget increases by nothing and the costs of Trident increase rapidly, the money will have to come from elsewhere in the defence budget. I should have thought that was pretty obvious, even to the Secretary of State. That money will have to come from the rest of the defence budget, and it can come only from hardware, equipment, stores, and supplies relating to conventional forces or from military and civilian manpower. The money cannot come from anywhere else, and the Secretary of State knows it.

We have been told in the past that it was perfectly possible to accommodate Polaris and Chevaline—[AN hon. member: "It was the Labour Government who proposed Chevaline."] I do not deny it. I clearly mentioned it and I expected that sort of reaction. The Secretary of State said that in the past we managed to pay for Polaris out of the defence budget. The total cost of Polaris and Chevaline at 1984-85 prices came to £4.5 billion. If one compares exactly like with like, the total cost of Trident at 1984-85 prices on Government figures will be £9.2 billion. Therefore, Trident costs twice as much as Polaris, and it will account for a much greater proportion of the defence budget than Polaris and Chevaline ever did.

Does not the right hon. Gentleman agree that the reasons that caused the Labour Government secretly to go for Chevaline are exactly the same as those that have caused the present Government—many of us believe rightly—to mantain a new independent nuclear deterrent?

I am sorry that I raised this matter. That intervention was wholly irrelevant to the point I was trying to make. I thought that we would have a fairly serious debate on the Defence Estimates and the White Paper, and the point I am trying to make is that Trident costs vastly more than Polaris.

We have been told several times that although Tornado cost more than Trident the Government managed to pay for that. But Tornado was never paid for out of a zero growth defence budget. At the time when money was spent on the Tornado aircraft, we did not have a zero growth defence budget. Had that been attempted, there would have been the horrible problems which the Secretary of State will now have to face when the costs of Trident begin to escalate.

As Tornado was largely financed out of a budget that was much smaller than the present budget, and as that cost much more than Trident, why is it so impossible to pay for Trident out of a much larger budget?

The Secretary of State again misses the point. It is certainly possible to finance Trident out of the budget. All I am saying is that it cannot be financed without deep cuts in our conventional forces and our conventional contribution. In the case of Tornado, the budget was increasing every year. We shall now have a zero growth budget—effectively a minus growth budget —and it will not be possible to finance Trident out of it without substantial cuts in our conventional defence.

We are not comparing like with like when we compare expenditure on Tornado with expenditure on Trident. Trident is a last resort weapon. It is an extraordinary defence policy when apparently the Secretary of State will have to reduce expenditure on front-line weapons of first resort such as tanks, ships and submarines in order to finance a weapon of last resort. That is a topsy-turvy way of running a defence policy.

The money will have to come out of the conventional budget — from equipment, spares, stores, fuel or manpower. If it came entirely from equipment it would mean a 15 per cent. to 20 per cent. cut in the equipment budget. If it came entirely from manpower, it would mean a drop of about 30,000 in civilian manpower and 50,000 in military personnel, roughly equivalent to the British Army of the Rhine. I accept that it will not be done in that way, that there will be an attempt to spread the misery, but there will be manpower cuts and jobs losses. The Secretary of State talks about efficiency, but since the Government came to power, despite 2.5 to 3 per cent. growth in the defence budget, nearly 100,000 jobs have been lost in the military and civilian industries and areas of defence policy. If the cuts take place, that figure will almost certainly double in the next few years. There will be pay restraints, cuts in fuel and stocks, slowing down on acquisitions, and a running down of equipment beyond its economic and military life span.

Is the Labour party advocating an increase or a decrease in defence expenditure?

We are advocating the cancellation of Trident because we do not believe that it can be financed without cutting the conventional defence budget and our conventional contribution to NATO.

The greatest burden will still fall on the Navy. The Navy will suffer again as it has suffered in the past because in many ways it is easier to reduce expenditure on the Navy. It is not possible to withdraw the British Army of the Rhine and in any case there would be no public expenditure saving. If the Secretary of State gets his European fighter aircraft, or 25 per cent. of it, at a cost of £6 billion or whatever, he will not want to cut that, so the cuts will fall on the Navy— on frigates, landing ships, submarines and all the equipment used by the Royal Navy.

The Secretary of State said that he intends to maintain orders for three type 23 frigates per year. That will cost almost £500 million. The Government will have to do a great deal better than they have done in the past five years, because that is twice what the Government ordered between 1979 and 1984. In addition, there will be £850 million for amphibious ships required by the marines in Norway as well as the cost of replacing out-of-date equipment and conventional submarines which have become too noisy. We are being asked to believe that all this can be done with a zero growth defence budget, while the cost of Trident escalates rapidly at the same time. No one believes that and it is unworthy of the Secretary of State to pretend that he can do it by means of various devices or wheezes.

The Navy is easy to cut because, unlike the Army and the Air Force, it has never fitted easily into NATO's overall defence strategy.

Perhaps the hon. Gentleman will listen to my argument before saying that it is ridiculous. NATO's strategy has always been and still is that conventional war in Europe will be short. The massive superiority that the Soviet Union is supposed to have—

Perhaps the hon. Gentleman will contain himself for a moment. He can challenge me later if he wishes.

The massive superiority that the Soviet Union is supposed to have means that conventional war in Europe is estimated to last no more than six or seven days, after which we use the battlefield nuclear weapons. If that is so, there is no point in having a navy because it takes 10 days for the transport ships to come over from the United States, by which time the war will be over at least in its conventional form. That has been NATO's thinking for a very long time and the Navy does not fit well into that kind of thinking.

The reality is quite different. Although there is superiority in certain areas, there is not any great overall superiority in the Warsaw pact. I believe that if war ever comes—we hope that it never will—it will be a war of attrition in central Europe and will last much longer than the five to 10 days currently envisaged by the NATO planners. In a war of that kind, a navy and especially a navy in the Atlantic is extremely important.

The hon. Gentleman is basing his argument on completely wrong hypotheses. As a member of the NATO Assembly. I have spoken to a great many people and I know, as the hon. Member for Sheffield, Attercliffe (Mr. Duffy) will confirm, that no one in NATO is making such assumptions. If the hon. Gentleman will put forward a sensible argument, we are quite willing to have a sensible debate.

Of course such assumptions are made. The situation may be changing now, but that was the original reason for the battlefield nuclear weapon—to make up the difference between Stalin's hordes and Western conventional defences. If the hon. Gentleman thinks that I am wrong, he can make his own arguments in his own speech.

The Navy will therefore suffer again as it has suffered in the past.

Is the hon. Gentleman aware that in the Eastlant, NATO is 80 per cent. dependent on the Royal Navy, particularly in the first three days? Has he never heard of the GIUK gap or the 190 nuclear submarines in the Soviet northern fleet? All those things are at the heart of NATO's strategy. The hon. Gentlenan clearly has no concept of NATO's maritime strategy.

I understand that very well, but I know from my conversations with the people concerned that they do not have enough ships. Because the Navy does not fit easily into that kind of strategy for a continental war, it is always easier to impose cuts on the Navy.

I do not want to get the signals to the Fleet wrong on this. When we are fighting this land war in Europe, how are we to get the stores across the Atlantic to support the armed battle without ships defended by the navies of the Western Alliance?

That is exactly my point. That is the case for the Navy. The Secretary of State is in no position to talk about stores because he will be cutting conventional defence so we shall not be able to make that kind of contribution by positioning stores in western Europe so that it is unnecessary to bring so much across the Atlantic.

The motion also refers to the decline of the Merchant Navy. My hon. Friend the Member for Clackmannan (Mr. O'Neill) will deal with that aspect tomorrow. I wish to deal with the subject of battlefield nuclear weapons because they are extremely dangerous and, as the Secretary of State admitted in evidence to the Select Committee, they are at the core of NATO's strategy. On this issue, this year's White Paper is as distressing as the White Papers last year and the year before. We believe that over a period NATO should get itself into a position to change its present strategy of first use of nuclear weapons. We agree with the article published by General Sir John Hackett in the International Defence Review last year. He said:

"I am totally persuaded that the defence of Western Europe must be, however it is conceived, conventional."
In the past few years, there have been signs of some movement within the NATO bureaucracy to try to move away from reliance on battlefield nuclear weapons. General Rogers has made a number of speeches emphasising the need to strengthen conventional defence and some -action has been taken. Some of us, perhaps naively, -saw this as a small step away from reliance on battlefield nuclear weapons. At Montebello in 1983 NATO ministers agreed to reduce these weapons by 1,400 to 4,600 and to remove completely all atomic demolition mines.

Does the hon. Gentleman accept that the concept of first use is made necessary by the conventional imbalance? Is he suggesting, therefore, that the NATO countries should spend the same proportion of their economy on defence as the Warsaw pact countries spend?

I am grateful for that intervention. We can argue about how it should be achieved, but if there were a conventional balance there would be no need for battlefield nuclear weapons. The Secretary of State would not agree with that, and nor would Lord Carrington or General Rogers. I detect a feeling—the Secretary of State said this to the Select Committee—that we must still have battlefield nuclear weapons, even if we had a conventional balance between the Warsaw pact and NATO.

Some of us thought that there would be some relaxation on the nuclear side as a result of speeches by General Rogers and of the Montebello agreement. I might be being unfair, but it looks as though that was a smokescreen for strengthening and increasing the lethality of battlefield nuclear weapons and was not a genuine attempt to move away from their use and closer to a better conventional balance.

Apparently, the new weapons are far more lethal and have a much greater range than the older ones. The atomic demolition mines, which are to be taken away, were a greater danger to the German population and our soldiers than to the enemy. I understand from newspaper reports —perhaps the Secretary of State will confirm this—that the Government are considering another mine which is to be called the advanced atomic mine, or ADAM for short. It is extremely sophisticated because it can be carried in a rucksack. I hope that the right hon. Member for Bosworth (Mr. Butler), the Minister of State for Defence Procurement, will resist bringing another ADAM to the Ministry of Defence.

I do not know whether the Government are thinking along these lines, but they should tell the House far more about their plans for battlefield nuclear weapons. The Secretary of State mentioned the new 155 mm atomic shell. Will the Government decide whether to accept it for the British Army of the Rhine? Perhaps the Secretary of State could tell us whether the matter is under active consideration. Perhaps he could tell us what decision will be taken. Many members of the United States Congress have said that we have agreed to the modernisation of those weapons.

Does the right hon. Gentleman include nuclear depth charges in those strictures? If he does, how will he deal with modern Soviet submarines which are virtually unsinkable by conventional weapons?

I fully understand that, in terms of tactical nuclear weapons, what has been suggested is included. I was considering battlefield nuclear weapons in that central zone of Europe where they are especially dangerous. Both sides have them, and we argue that both sides should remove them as far away from the border as possible because of the danger of war breaking out and of those weapons being used.

If the right hon. Gentleman understands the tactical need for these weapons, will he ensure that the Americans are still allowed to base none of them in Britain for the protection of our submarines?

We have said clearly that we will not accept American nuclear weapons on British soil. Such a decision must be taken by a sovereign British Government. I agreed with the Secretary of State when he said that it is ultimately the prerogative of sovereign Governments to take that decision.

If the right hon. Gentleman agrees that there is no legitimate deterrence against this form of Soviet weapon and that our submarines cannot be protected except by this nuclear capability, what sort of protection will he offer our submarines?

I did not say that. I said, in regard to battlefield nuclear weapons in central Europe, that there is a serious problem because Warsaw pact and NATO troops are so close together. If war broke out in that part of Europe, it could easily become a nuclear war, which would raise the problems of political control.

We have said clearly that we will not accept American nuclear bases on British soil.

We understand NATO strategy, which is based on flexible response. The weapons that the hon. Gentleman talks about are part of NATO strategy. My party has made it clear that it wants to work in NATO to change that strategy because we believe that it is out of date.

No. My speech will be as long as the Secretary of State's if I continue to give way. I should like finally to consider the strategic defence initiative. I believe that it will be extremely difficult to prevent the star wars initiative from becoming an arms race in space. We agree with the Government's analysis and with the analysis in the lecture that the Foreign Secretary gave about the dangers and the philosophical inconsistencies in star wars. I do not believe that it will be easy to stop star wars. I do not accept the rather simplistic distinction that the Government try to draw between research and develop-ment. If anybody believes that American industry will stop at research and not go on to development, they have not read about or understood what has happened in the arms race during the past 30 years.

Star wars fits perfectly into the American psyche because it tries to wrestle with difficult moral problems. I respect that side of it. It is an enormous moral problem to base defence policy on mutually assured destruction. Stars wars rejects that, the Government's policy, and therefore NATO strategy. Star wars is part of the American dream and the belief that technology can solve moral and political problems. Moreover, a lot of money will be made out of it. I find it extremely difficult to believe that, when those three factors come together, the star wars project will be stopped at research.

Many people who have created star wars regard it as an attempt on the part of the United States to return to the golden age of the 1950s when that country had superiority in nuclear weapons. Caspar Weinberger said it clearly. He is reported to have said:

"If we can get a system which is effective, we will be back in the situation we were in when we were the only nation with a nuclear weapon".
That is quite clearly an attempt to gain nuclear superiority. It cannot be gained on earth any more because Russia will try to catch up. I should like the Government to show a little more resolution and to come out with other European Governments in NATO and say, "We do not favour star wars and are not prepared to participate in the research and we believe that it will lead to another nuclear arms race."

Perhaps I might conclude by quoting a distinguished American scientist, Professor William E. Burrows, who wrote in the Spectator of 30 March:

"But where is this race likely to end? American fighting mirrors, laser battle stations, space planes and manned attack platforms will sooner or later co-inhabit the heavens with their Soviet counterparts. Orbiting lasers made in California will be closely followed by space mines made in Yaroslavl, and although the lasers may be technically superior to the mines, that will count for little or nothing if the mines do their job at the crucial moment. It will therefore be deemed imperative to develop weapons that can attack the mines before they attack the lasers that are supposed to attack the ICBMs that are launched to attack the cities and silos. The prospect—now nearly at hand—of extending the vast and intricate network of super-sensitive warning systems and hairtrigger explosives hundreds and thousands of miles straight up is stupefying. The earth itself will have been turned into a gigantic orbiting bomb."
That is an extremely realistic assessment of what will happen, and I hope that the British Government will say that they will have no part in it.

The choice presented by the White Paper is clear and simple. We can have strong conventional forces and no Trident or weak conventional defences and Trident. The Government have chosen to have Trident. We believe that that choice diminishes the defence and security of Britain and increases the risk of nuclear war in Europe.

5.20 pm

When my right hon. Friend the Secretary of State opened the debate he referred to the fact that the Select Committee on Defence, of which I am Chairman, had commented that he did not devote very much space in the White Paper to broad policy issues. However, he spent quite a bit of the first part of his speech doing that, for which I was grateful. I hoped we might hear something of the same from the right hon. Member for Llanelli (Mr. Davies) but we heard nothing of the kind. I do not have the faintest idea what he thinks about policy except that he does not understand NATO policy at sea. The right hon. Gentleman did a good deal of reading from newspapers — whether they form the basis of Labour party policy or not, I do not know There was some questioning of my right hon. Friend, perfectly properly, but the right hon. Gentleman quoted many figures and got most of them wrong. He would do much better to stick to the figures in the Select Committee report, which are correct. It is unfortunate that his are not. He should follow our figures rather than invent some of his own, which are demonstrably wrong.

The right hon. Gentleman said that three type 23 frigates would cost £500 million. They do not, and this is stated in the White Paper. They cost £110 million each. If he cannot multiply 110 by three he should not be sitting on the Opposition Front Bench. According to the Opposition's amendment, the Labour Party's policy is to cancel Trident, to remove all nuclear bases from the United Kingdom and not to allow nuclear depth charges anywhere near the country, to do away with battlefield nuclear weapons and do something about the Merchant Navy.

I did not hear the right hon. Gentleman say one word about our conventional forces. Does he think they are the right size, too big or too small? He should have spoken about that. No doubt when the debate is wound up by one of his hon. Friends we shall be let into the secret. That is all we know, at the moment, about Labour party policy —cancel Trident, get rid of nuclear bases, and hope for the best. At least the amendment which has been tabled by the leader of the SDP, the right hon. Member for Plymouth, Devonport (Dr. Owen) does not go quite as far as that. He also wants to cancel Trident but he wants to strengthen Britain's conventional defence. I am sure that he will tell us, if he is called, by how much he thinks it is necessary to strengthen Britain's conventional defence to provide the same level of deterrence that is provided by Trident. How many divisions, how many ships and how many aircraft will that involve, and what will be the cost? If that is his proposition, he owes it to the House to elaborate it, and I hope and believe that he will.

My right hon. Friend spoke about the comments made in the report by the Select Committee, but before I refer to those comments I want to speak about something that was not in our report. Nowhere in our report do we quarrel with the Government's assessment of the level of defence that it is necessary for us in the West to maintain

Annex A of the defence White Paper, which I do not think the right hon. Member for Llanelli has read, sets out starkly the balance of forces between the Warsaw pact and NATO. In every area except one, the Warsaw pact countries have a superiority over NATO. In nuclear terms, they have more strategic systems, more intermediate systems and more short-range systems. In conventional terms they have more soldiers, twice as many tanks, twice as many aircraft and more than twice as much artillery. At sea, they have twice as many submarines. In surface warships in the north and in maritime aircraft, NATO enjoys, for the time being, a marginal superiority. The Warsaw pact has total superiority in chemical weapons. It has hundreds of thousands of tonnes and we have none.

If ever there was an example of the futility of unilateral disarmament gestures, this is it. Nearly 30 years ago—I think it was in 1957 — Britain decided not to use chemical weapons and disposed of all that it had. We threw them into the Atlantic. The only response was the continuation of the Russian research, development and production of these fearful weapons, so that we are now at a total disadvantage. If anyone seriously believes that gestures of unilateral disarmament work, I can only say that he needs his head examined. History shows that such gestures do not work.

Is the right hon. Gentleman in favour of manufacturing the same gases and chemical warfare weapons that the Russians possess?

No, Sir. I am in favour of preventing them from being used. The West has prevented those or any other weapons being used against it for 40 years by employing the nuclear deterrent. The idea that, with a grand gesture, one can throw away a weapon and expect a potential enemy to do the same has no basis in history. We all wish that this state of affairs did not exist, but it does. It is the height of irresponsibility to seek to diminish the level of defences that is set out in the White Paper.

The second point I want to make, which is not spelt out in our report, is that we recognise and applaud the efforts that the Secretary of State is making to improve efficiency and to obtain better value for money. He mentioned a number of them and they are noted in our report.

The transfer of manpower from tail to teeth is still proceeding. The contracting out of functions has produced some savings and will produce more. The increasing number of purchases of equipment by competitive tendering, which my right hon. Friend spoke of, is increasing, although I must confess to a doubt as to what level that has reached. The White Paper speaks of something like 60 per cent. but the only figures I can find suggest a level of about 38 per cent. No doubt that is something with which my hon. Friend the Under-Secretary of State for Defence Procurement can deal later. There are prospects of savings by international collaboration and no doubt the reorganisation of the Ministry of Defence will produce some savings too. I accept that it is too early to judge the extent of the savings that will flow from these efforts but they could and should produce useful ones, thereby enabling us to have more defence for the same money, which is what we all want.

The Government told us in the 1984 public expenditure White Paper that after the current year, no extra money will be available for defence. That was the starting point of the Select Committee's inquiry. The Committee took the Government's statement to mean that there would be no growth in real terms or, to put it another way, that there would be level funding in real terms. That leaves aside Falklands-related expenditure, which has always been additional and which will be declining. The Select Committee took evidence to try to determine what the Government's policy would mean in terms of trying to defend ourselves. As my right hon. Friend the Secretary of State observed, pounds do not defend us; we are defended by the weapons and the manpower that the pounds buy.

The Committee discovered, as it has reported and as everyone knows, that level funding in real terms does not mean what many take it to mean. We were given three reasons for this, and they were not those elaborated by the right hon. Member for Llanelli. First, the cash which is available each year is adjusted from year to year by means of the GDP deflator. That involves a guess or an estimate of or an allowance for increases in the retail price index.

I am sure that in theory that mechanism can produce the same level of funding.

However, what the right hon. Member for Llanelli may have missed, but what my right hon. Friend knows only too well and has spoken about, is that the prices of tanks and guns increase more quickly than those of motor cars and cookers. I do not know why that is so, but my right hon. Friend has given some reasons why this happens. Over the past 10 years, the increase in price over the RPI, which is called the relative price effect, has been nearly2 per cent. That involves a great deal of money and the difference that it makes in any year is over £500 million. My right hon. Friend spoke about the Committee's figures. They are not the Committee's figures. They are his. Every figure that the Committee quoted was given to it in evidence by him or his officials. The Committee has merely written them down and added them up.

The second reason, of course, is the fact that the defence budget is sensitive to the exchange rate. The document before us today assumes a rate of $1.38 to the pound. We are all aware that the rate today is about $1.26. That makes a difference of £180 million.

The third reason is the cash allowance for pay. That is at a figure of 3 per cent. per annum. The Committee was told in evidence that every 1 per cent. above that costs £31 million at 1983-84 prices. Last week's events precisely illustrate our anxieties. My right hon. Friend the Prime Minister announced last Thursday that as from 1 April this year service pay would be increased—as recommended by the Armed Forces Pay Review Body — and would add 7.3 per cent. to the pay bill. No one grudges the services a penny of that increase, but where will the money come from? The Prime Minister gave the answer. She said:

"The additional costs … will be offset by economies or reductions elsewhere in the defence programme."
[Official Report, 6 June 1985; Vol. 80, c. 194.]

At 1983–84 prices, the additional costs over the 3 per cent. allowed come to £133 million.

Perhaps I might remind the House—

I was going to remind the House that it is rather more than the cost of a type 23, which is given as £110 million, or, if the House prefers, it is slightly more than the cost of the 130 Tucano trainers that the Royal Air Force is buying from Short Bros Ltd.