Defence Estimates 1981

§ Mr. Speaker

I remind the House that over 40 right hon. and hon. Members, including seven Privy Councillors, wish to speak. I appeal to all to remember that other speakers can be called only if self-discipline is exercised.

§ The Under-Secretary of State for Defence for the Royal Air Force (Mr. Geoffrey Pattie)

I think that it would be useful, given recent press speculation, which might have led some to refer back to our electoral pledges on defence, to recall what we actually said on this matter in our 1979 manifesto. The manifesto stated: We shall only be able to decide on the proper level of defence spending after consultation in government with the Chiefs of Staff and our allies. But it is already obvious that significant increases will be necessary. Soon after taking office, this Government declared their support for the NATO aim of annual increases in defence spending in the region of 3 per cent. in real terms up to 1986.

The actual position is that in the first three years of this Government, taking the 1978–79 outturn as the baseline, the increase in expenditure on defence in real terms is expected to be 8 per cent. Among our major NATO Allies this performance, in real growth terms, is only surpassed by the United States. The two following years should further increases of 3 per cent. in each year.

The question then arises, however, that if the Government have been able to honour their pledges in terms of defence expenditure, why is it necessary for my right hon. Friend to institute a reassessment of the way in which our forces fulfil their roles? The answer lies in the fact that even the increased expenditure in real terms not sufficient to contain what I would describe as technological inflation, which is a way of indicating the upsurge in costs caused by the sheer complexity of modem defence systems. We have attempted to illustrate this inexorable form of escalation in a diagram on page 45 of volume 1 of the White Paper. I mention it now because it is acutely relevant to the problems that we face. In the context of these problems, for those who did not hear it, 293 I commend the fine and constructive speech made yesterday by my hon. Friend the Member for Hastings (Mr. Warren).

My right hon. Friend set out clearly in his introduction to the White Paper that We must re-establish in the long-term programme the right balance between the inevitable resource constraints and our necessary defence requirements. It is interesting to note that this introduction received scant attention when the White Paper came out on 15 April from the same press that has been speculating so wildly in the past few days.

I should like now to focus on an area which I believe is best encapsulated in the title of the first chapter of this year's White Paper, which is "Defence Policy in a Changing World". The critical word here is, of course, "changing." The change is not simply one of the central balance of military power in Europe, or in certain armaments, or, indeed, the altered circumstances created by actions occurring elsewhere in the world.

It is also a function of the changing pattern of relationships between nations, and particularly those between the developed and developing worlds, and the implications that these hold for our future security. The world is now an intricate and complex web of economic inter-dependence. Such a relationship brings with it both benefits and new points of vulnerability, especially for the West. The most well-known of these points of Western dependence and hence vulnerability is that of oil. In 1977, Saudi Arabia and Iran exported 40 per cent. of all the oil coming on to the market. The United States took over 20 per cent. of the world oil imports in that same year, while France, the Federal Republic of Germany, Italy and the United Kingdom took about 5 to 8 per cent. each. While oil is perhaps the best known of these pressure points, it is not the only one.

A recent report by the United States House of Representatives Armed Services Committee has revealed that even the United States, once seen as that self-sufficient and self-perpetuating generator of industrial growth and material affluence, resilient to external economic pressure, is no longer immune. The United States is now more than 50 per cent. dependent on foreign sources for over half of the minerals that have been described as most essential to its huge economy. Many of the world's reserves of these minerals—for example, cobalt, titanium, chrome, diamonds, asbestos and uranium—lie in areas of the developing world subject to volatile political change and instability.

By contrast, the Soviet Union, in most of these strategically important materials, is either self-sufficient or does not share the West's degree of dependence. This is likely to remain true for many years to come. In 1978, the total trade between the developed and developing world was some $200 billions each way, whereas the Soviet Union and other European centrally planned economies exported only $17 billion and imported $11 billion worth of goods from the developing countries.

In trade with OPEC countries, the contrast is even greater. The West imported $108 billion worth of goods and the Warsaw Pact only $3 billion. In metal ores from the developing world the West took $4.6 billion, the Warsaw Pact only $0.38 billion. Soviet involvement in the developing world therefore is not a function of economic 294 interdependence and mutual benefit. The main motive is political, and by that, I mean the expansion of its influence at the expense and to the detriment of the West, Japan and China.

The means by which the Soviet Union seeks to achieve that objective is primarily military. Large scale military aid, in terms of hardware, the provision of advisers and the intervention of forces—whether its own as in Afghanistan, or surrogates such as the Cubans in Latin America and Southern Africa, or the Vietnamese in Kampuchea—is provided. Development aid is, by contrast, meagre. That is hardly surprising. The Soviet Union's claim to super power status rests on its vast and burgeoning military might. Her ability to operate outside her traditional spheres of interest has grown enormously in recent years.

We must not be mesmerised by the ever-increasing cavalcade of Soviet might. Military action by the Soviet Union in those sensitive areas of the world is not the sole challenge that we in the West face. That challenge is multi-faceted and covers a whole range of options. The Soviet Union does not need to send in its troops to create a political situation favourable to itself, albeit it has demonstrated its willingness to intervene directly in Afghanistan, a previously non-aligned and independent country, in the teeth of world condemnation. Subversion, disinformation, aid to dissident elements, inspired coups and insertion of surrogate forces are all sub rosa means of achieving the same ultimate objective.

§ Mr. Stanley Newens (Harlow)

Does the Minister condemn subversive activities when they are carried out by the United States in many parts of the Third world, as they have been, which has been clearly documented in the past?

§ Mr. Pattie

Subversion of any State by another is to be deplored. I am addressing myself to the Soviet Union's activities in that area.

Nor does the Soviet Union necessarily need its satellites, so created, to deprive the West of those raw materials so vital to its continued economic health and stability. Continued supply, but at vastly inflated prices, could easily create the same destabilising havoc as denial. The oil price rises of the 1970s plunged the economies of the industrially advanced nations of the West into a state of turmoil from which, it could be argued, they have never fully recovered.

I am not suggesting that those price rises were the result of Soviet inspiration, nor am I claiming that all instability in the world originates from the Kremlin. Obviously deep-seated local differences and rivalries, such as the current war in Iran and Iraq, play their part. But such areas of instability provide opportunities for those ill intentioned enough to wish to embarrass the West when they are linked to sources of vital raw materials. The message that I wish to convey is not that the central threat in Europe has been replaced by newer ones, but rather I am attempting to say that those latter challenges are additional to those which we have previously had, and continue to face. We must not allow ourselves, and the Alliance, to adopt a static defensive mentality. We do not want to become smugly ensconced in the Maginot line of the Central European theatre, only to discover that our Ardennes lies somewhere outside the traditional NATO area. We welcome the growing recognition of our Alliance partners that changed conditions outside its traditional boundaries can inhibit its 295 freedom of action elsewhere and that its allies should work towards achieving stability outside the NATO area and coordinate their actions in this field.

§ Mr. Frank Allaun (Salford, East)

Is it not true that the American Senate recently carried a resolution approving the supply of arms to the rebels in Angola? There is an established Government in Angola. Surely—[Interruption.]

§ Mr. Russell Kerr (Feltham and Heston)

Listen and you will not go out as stupid as you came in.

§ Mr. Speaker

Order. Sedentary interruptions from either side of the House—especially the last one—are undesirable.

§ Mr. Allaun

You have my support, Mr. Speaker.

Surely the American action is as reprehensible as anything that the Soviet Union has done. It is unfair to blame all the troubles of the world on one super Power when two super Powers are involved.

§ Mr. Pattie

I thought I made it clear a moment ago that I was not attempting to blame all the ills of the world on the Soviet Union. It could be argued with some force that if the United States had acted with the requisite degree of resolution at the time of the original Angola difficulties the present supply of arms would not be necessary.

As the Soviet threat is multi-faceted, so must be the response of the West. We recognise that defensive measures must be integrated with political and economic assistance to reduce sources of tension and conflict. But they must nevertheless be available to deter the use of force by the Soviet or its surrogates, and to demonstrate our resolve to defend our essential interests and those of our friends around the globe. We shall achieve that by assisting Third world countries in building up their capacity for self-defence and by continued peacetime deployments of our forces overseas. The third element is an enhancement of our capability to intervene at the request of the States concerned. The United States has already embarked on the formation of a rapid deployment force for that purpose, and Her Majesty's Government welcome and support that development. For our part, we have in mind modest improvements to the flexibility of our forces for operations outside the NATO area.

I have said that the new dimensions of the threat are additional to those traditional elements which still persist.

We therefore, cannot, and do not, propose any major diversion of resources to meet these added dangers, but rather to make best and flexible use of those capabilities which are already at our disposal. That point is referred to in paragraph 416 of volume 1 of the White Paper. The threat to the Alliance in Central Europe is still grave and growing, both qualitatively and quantitatively. At this point I wish to turn to one of the more significant elements of the Soviet military threat facing the Western Alliance, namely its nuclear forces.

I shall not delay the House with any detailed rehearsal of the changes in the nuclear balance in recent years, from one of Western superiority, to equivalence and, in some areas, to Western inferiority. Figure 2 of the White Paper, volume 1, does that in graphic terms for all to see. I propose to deal with the arguments of those, who, in the face of that balance, call for the unilateral relinquishment of nuclear weapons by this nation—that is now the policy of the official Opposition.

296 It is natural, given the number of issues in the defence nuclear area on which this Government have had to take decisions—I refer to those on Trident and cruise missiles—that there should be public interest, and indeed concern, about those matters. We readily appreciate the anxieties of those of our fellow citizens who, in the shadow of the bomb, fear for the future. We welcome informed discussion on that topic, as has been proven by the information provided at the time of those two decisions and in the subsequent debates in this House. It is our task to show that, while appreciating the genuine anxieties expressed, we have taken decisions in the face of the harsh realities and uncertainties of the world today, which we believe serve the common cause of peace and freedom.

First, let me assure the House that I and my colleagues have the same wish as that of any sane individual, namely, peace and a diminution in the level of armaments m the world. Where we differ from those who want us to disarm unilateraly is in our starting point for the analysis of how best that can be achieved.

We start by taking the world as it is, and not as we wish it to be. It is a dangerous and uncertain world, in which nuclear weapons exist, here and now, and cannot be disinvented. What must be achieved is the prevention of war—both conventional and nuclear. We believe that that is best attained through the dual process of deterrence and multilateral disarmament. I define deterrence as a defensive military posture that seeks, above all, the preservation of peace. Its central aim, at every level, is to influence the calculations of anyone who might consider aggression, to influence them decisively, and crucially to influence them before aggression is ever launched. There must be no possibility in an aggressor's mind that he can impose his will other than at a wholly unacceptable cost to himself. In that context, I noted the contribution in yesterday's proceedings of the hon. Member for Vauxhall (Mr. Holland), in which he argued that the new generations of nuclear weapons represented a significant change in strategy away from mutual assured destruction to a nuclear war-fighting posture. That is a fundamental misconception, which I want to put right now.

The basic aim of NATO's deterrent posture is unchanged—it is to prevent war, conventional or nuclear, not to fight it. We do not believe that nuclear weapons could be used to achieve a military victory in any meaningful sense, and that once nuclear exchanges began there would inevitably be grave risk of early escalation into all-out war. But the Russians may be tempted to think differently. To ensure that they do not, NATO must have options for responding to aggression at any level—the long-standing doctrine of flexible response.

That aims to convince an adversary that he could never use conventional or nuclear weapons against NATO, at whatever level, without incurring unacceptable risks of escalation. The aim is therefore to prevent aggression before it is launched. That is all the more necessary when we face an adversary which has built up, and is continuing to build up, a vast apparatus of military power at all levels and in all fields, and who has demonstrated his willingness to wield that power. We have to inhibit the possible use of this machine against ourselves by deterrence; and this is what our nuclear weapons crucially help us to do. I remind the House that the East-West peace has held now for 35 years. While no one can prove that deterrence centred on nuclear weapons has played a key part in 297 keeping the peace—and not just the nuclear peace—common sense suggests that it must have been a crucial contributory factor.

I recognise, however, that a growing minority of people, particularly young people, appear to believe otherwise: that the danger of war would be reduced through unilateral disarmament by Britain. I believe that they are being actively and irresponsibly encouraged in that belief by some Labour Members. It is for this reason that I want to consider the claim in more detail. It is based, I assume, on the supposition that the other nuclear weapon States, and the Russians in particular, would follow our example. But there is, of course, not a scrap of evidence to suggest that this would be so. Indeed, what evidence there is suggests quite the opposite.

First, there is an immediate danger that talk of unilateral moves will encourage the Russians to block any negotiations—as they did when NATO first proposed holding talks on limiting long-range theatre nuclear forces. The Russians would have good reason to believe that, if they waited long enough, the West would disarm on its own. Why should the Russians disarm if they have all the cards and we have none? It is inconceivable in such a situation that we in Britain would be any safer. By undermining deterrence, we would be putting all members of the Alliance at risk.

The truth is, of course, that the Russians would not abandon their nuclear weapons at the very least until all other nuclear weapon States did the same. They have already made it clear that they are opposed to unilateral disarmament. For example, two Soviet policy makers have recently written: The Soviet Union cannot undertake the unilateral destruction of its nuclear weapons—and indeed has no right to do so as it is responsible to the people of the whole world for peace and progress. That is the authoritative Soviet view on unilateral disarmament. And it displays the worst kind of naivety to imagine that public pressure in Britain or in any other country for unilateral Soviet disarmament, let alone in the Soviet Union itself, would have any effect whatsoever. Indeed, one could ask whether anything has changed since the world disarmament conference of 1934, where it was said: Disarmament by example simply does not work and those were the words of Mr. Ramsay MacDonald.

A variation on this first unilateralist argument is that unilateral disarmament by the United Kingdom would make Britain less of a nuclear target. This seems to me equally misguided. Of course we would still be a major Soviet target. Even if we had no nuclear weapons, the Russians could not ignore a country of such obvious political and strategic importance. As a member of NATO, neither Britain nor any other Alliance member could expect to be exempted from any armed conflict involving a nuclear exchange between East and West.

Some of the extreme unilateralists—indeed, I suspect, some Labour Members—would then argue that Britain should become neutral: that we should not only give up our nuclear weapons but leave the Western Alliance. That course, I believe, would be decisively rejected by the vast majority of the British people.

Quite apart from the political undesirability of neutrality, for Britain to withdraw from the Western Alliance wuld leave this country vulnerable to 298 conventional takeover and would undermine the stability which has allowed some European countries to remain neutral. Neutrality in the past has not always proved a sure shield against the territorial ambitions of acquisitive powers.

§ Mr. Frank Allaun

rose—

§ Mr. Pattie

I shall not give way to the hon. Gentleman. I gave way to him earlier. I am conscious of the fact that other hon. Members wish to speak in the debate.

Outside the Alliance, with its accepted policy of deterrence, I truly believe we would have no security worthy of the name.

Over the past year there has been some pressure to extend this concept of a nuclear-free Britain to Europe. There have been calls for the removal of all nuclear weapons, Western and Soviet, from Europe—from Poland to Portugal. The argument is that a nuclear-free Europe would be a more stable Europe; that Europe would then also ceast to be a target for attack. But this is to ignore the massive Soviet preponderance of conventional weapons in Europe. The West could, if it wished, match the East here, given our greater economic power overall. But the cost to our social and cultural life would be huge, to the point of political unacceptability—and this is not the only objection.

The Russians already have large numbers of missiles in Soviet territory capable of striking any target in Western Europe. A nuclear-free Europe would leave the West open to political blackmail, let alone the possibility of nuclear attack or threats from unconstrained Soviet systems while removing the threat to the Soviet Union from similar Western systems in Europe.

The truth is that Western nuclear weapons in Europe have imposed a real measure of restraint on the aggressive use of Soviet conventional military might. And, so long as the Russians have nuclear weapons aimed at our cities, NATO must either remain a nuclear alliance too—and an alliance with an adequate nuclear presence in Europe—or it will cease to be an effective alliance at all.

In short, there can be no doubt whatsoever that a nuclear-free Europe would be a less stable Europe, one in which the Russians would have an increased advantage. They have therefore everything to gain from the proposal and nothing to lose. Many of us have recently read the words of a Czechoslovak dissident who said that, the movement for European nuclear disarmament is an unconscious analogy of the appeasement of the 1930s…a very influential force which works unconsciously in the interest of a totalitarian system whose aim is world domination based on the liquidation of human rights. It is why, I hope, all Members of this House will decisively reject the proposal.

So much for the main arguments. They may appeal to the heart but they cannot win the mind. In the real world, faced as we are with the massive conventional and nuclear forces of the Soviet Union, unilateral disarmament by the United Kingdom is neither a realistic nor a responsible proposition. Those who advocate it, on whatever grounds, are in effect serving Soviet interests. If they do not realise it, they have not thought through the full implications.

What they may not also realise is that such unilateral actions as have been taken from time to time have not produced satisfactory responses. For example, between 1968 and 1972 the United States carried out a planned and unilateral reduction in its defence budget. By contrast, the 299 Soviet Union accelerated its military spending and in 1971 overtook the United States as the world's largest military spender. In 1977, the Americans adopted a policy of voluntary restrain on arms exports, virtually cutting off the supply of United States weapons to the Third world. Once again, the Soviet Union moved in and quickly became the largest supplier of arms to the poorest countries.

The fact is that unilateralism is a discredited doctrine in every sense of the word. But it is not just a question of the choice between deterrence on the one hand and unilateralism on the other. That way, the choice lies between the risk of an unbridled arms race and, at the other extreme, abject capitulation. This is why, while maintaining deterrence, we pursue the complementary search for worthwhile arms control, in areas where the security interests of both sides overlap. By a process of negotiation we attempt to stabilise and, if possible, reduce the level of armaments of East and West.

This dual approach—deterrence and arms control—has been shown to work. Take the topical case of theatre nuclear forces. We did not hear a sound from the Russians about TNF arms control when the deployment of their SS20 missiles began. It was only when NATO began to consider the need for the modernisation of its own forces that they showed any interest at all; and, after much bluster and a barrage of propaganda, they came to the negotiating table only when it was clear that the Alliance was firmly embarked on the modernisation programme. We warmly welcome the recent American decision to hold negotiations with the Soviet Union before the end of 1981.

The lesson of all this is clear: we can expect the Russians to negotiate seriously about limiting their weapons only if we make it abundantly clear to them that, in the absence of a balanced and verifiable agreement, we will go ahead with our plans to preserve deterrence and to maintain an overall military balance: that we shall not tolerate a situation of inequality and inferiority. It also goes to show that we shall not get the results we want by negotiating from a position of significant weakness.

I would dearly like, as I believe we all would, to see the world kept in peace and freedom by a security system which had less need or, better still, no need to possess such awful instruments in reserve. But to desire a new system is one thing; to make it real or dependable is quite another. We are not yet in sight of that.

Meanwhile, I for one am not prepared to be part of a Government who wished to pull down the structure which protects us at a time of increased uncertainty. But that does not mean that we are complacent about nuclear weapons. If we wish to seek for a more stable world order, this is where arms control must come into the equation. I believe that multilateral conventional and nuclear arms control is vitally important—but only if it is mutual, verifiable and balanced on all sides. I also remind the House of this country's unique contribution to arms control and our continuing efforts in this field.

We initiated the biological weapons convention of 1972, the only genuine disarmament measure since the Second World War. We played a prominent part in the negotiation of the partial test ban treaty and the nonproliferation treaty, two important treaties in the nuclear field, now with over 100 parties. We have supported the efforts of the United States and the Soviet Union to reach agreements on the limitation of strategic arms. We want to see the SALT process continue. We are participating in the comprehensive test ban negotiations in Geneva, the 300 talks in Vienna on reducing conventional forces in Central Europe and the CSCE review conference in Madrid. We have signed an agreement with the Soviet Union on the prevention of accidental nuclear war.

We have given the non-nuclear States an assurance about nuclear weapons not being used against there. We introduced the draft convention on inhumane weapons, which was adopted by a United Nations conference in 1980. We were among the first countries to sign it last month. Our draft convention on chemical weapons in 1976 was a major contribution to the negotiations, which are continuing in the Committee on Disarmament in Geneva. We have also given strong support for the principle of negotiating limitations on the long-range theatre nuclear forces of both the United States and the Soviet Union.

§ Mr. Dick Douglas (Dunfermline)

What representations are Her Majesty's Government making to the United States Government in view of the considered judgment by Caspar Weinberger that SALT II is a dead duck?

§ Mr. Pattie

The representations which we are now making are centred on the matter to which I referred a moment ago, namely, the resumption of discussions between the United States and the Soviet Union about long-range theatre nuclear forces.

§ Dame Judith Hart (Lanark)

rose—

§ Mr. Pattie

I should like to continue.

§ Dame Judith Hart

My question relates to this point.

§ Mr. Pattie

I wish to continue.

§ Mr. Speaker

Order. It is clear that the Minister does not intend to give way.

§ Dame Judith Hart

I am seeking to ask a question on this point.

§ Mr. Speaker

Order. We must have an orderly debate.

§ Mr. Pattie

I have given way on several occasions. I said to the House that I wished to proceed. I hope that the right hon. Lady will be successful in catching your eye, Mr. Speaker.

All this adds up to considerable international activity, in which Britain is playing a full part. The results achieved have not been insignificant. Already the nexus of existing international and bilateral agreements circumscribes a number of military activities. But much more remains to be done. The best hopes lie in a measured approach by negotiation. It is inevitably a slow, laborious process. But where vital security interests are at stake no side can offer the sort of hostages to fortune of the kind that unilateral disarmament implies. No agreement will be reached if one side gives the other what it wants before negotiations start.

Unilateral disarmament is the enemy of multilateral disarmament. Unilateral action by country A reduces the incentive for country B to negotiate. A policy which encompasses both either reflects a lack of clear thinking or must be the result of a shabby political compromise.

I have left one point till last. It is perhaps the most difficult—the moral and ethical questions raised by nuclear weapons. There are no cut and dried answers. Each individual must make up his own mind. The Government's view is that any readiness by one nation to use nuclear weapons against another, even in self-defence, is, of course, terrible. But I do not accept that it is the possession of weapons which is immoral, it is rather the 301 circumstances of their employment. Clearly nuclear weapons are the dominant aspect of modern war potential, but we should also not forget, as my right hon. Friend reminded the House yesterday, that 50 million lives were lost in the Second World War before nuclear weapons were used and about 10 million people since then have been the victims of conventional war. The greater good must be served by preventing war—nuclear or conventional—in the first place.

Whatever moral stance one takes on that matter, I am sure that all would agree that there could be no integrity in an ethical position which demanded abandonment of our own weapons as fundamentally immoral, while remaining content to shelter under the nuclear umbrella of the United States through membership of NATO.

We live in unsettled times. The nature of the threat which we face is developing new facets which we must recognise and to which we must respond. But these cannot be at the expense of our response to the old challenges which still persist. The central pillar of our current security is the Alliance policy of deterrence based on the possession of adequate levels of conventional and nuclear armaments. In such a turbulent world it would be unwise unilaterally to divest ourselves of this protection without assurance of satisfactory reciprocation. That does not mean that we should neglect steps to achieve a curtailment, and ultimately the eradication—if that is possible—of such, indeed all, armaments, but I hope that I have shown that there is indeed a fundamental link between progress towards that goal and the maintenance of armed defence against aggression. This dual policy of deterrence and arms control has worked. Because our policy is working, the Government do not believe that nuclear war is imminent, despite understandable public concern.

We are not at the edge of the nuclear abyss. Those like the CND who reject this policy must show convincingly why their policies would further reduce the danger of war. They have so far singularly failed to do so. For the foreseeable future, there can be no alternative to the policy which we and our allies are pursuing—a policy, after all, which has been followed by successive Governments. The Opposition, when in Government, played an honourable part in this process, but now they seem totally unable to produce a recognisable policy calling, for example, at last year's Labour Party conference for the withdrawal of United States forces whilst remaining in NATO.

§ Mr. James Wellbeloved (Erith and Crayford)

Will the Minister take note that, despite the disastrous economic policies of his Government, millions of Labour voters in the next general election will completely repudiate the lunatic demand that Britain should abandon its allies, scrap its defences and adopt a policy of craven appeasement to the Soviet Union?

§ Mr. Pattie

I am sure that the hon. Member's remarks will be well noted in other quarters of the Labour Party. If it does not embarrass the hon. Member, who is my predecessor, too much, may I say that the cause of peace and freedom is well served by his comments.

We for our part are determined to ensure that this land and its people will continue to be blessed with the benefits of peace and freedom, benefits that are so easily taken for granted by those of us who have never lived under a totalitarian regime.

302 This year's defence White Paper has carried further the improved presentation and new information levels begun in the 1980 White Paper. It is a clear and candid assessment of the difficult task we face in defending our interests and our way of life in a dangerous world. I commend the White Paper to the House.

§ Dr. David Clark (South Shields)

As we are discussing the Government's Defence Estimates, I felt it strange that the Under-Secretary should refer to what can only be described as the small print of the Conservative Party election manifesto at the last election. It may have been in small print, but it is not what was said on television, or what was portrayed on platforms or over the media. The message which came over loud and clear at the last election was that a Conservative Government would increase expenditure on armament regardless of the economic position of the country. That was at issue then and it is at issue now.

Underlying our amendment is the basic philosophy that a defence policy depends upon the country's economic base. When I see what has happened in the past two years—manufacturing capacity is down 20 per cent.—I do not see how we can sustain an increasing defence budget such as the Government are presenting to us.

Much of our manufacturing capability is lost for ever. Jobs and capacity have gone. As the Prime Minister is so fond of telling us, we must cut our suit according to our cloth in defence as in other matters. The Prime Minister has certainly cut the cloth in housing, education and social services. She must do the same with defence. There is no other way.

The Under-Secretary of State was unfair when he accused the Labour Party of pursuing a policy of neutrality. He knows that that is not our policy. He knows that we are committed to working within NATO. I want that clearly on the record so that there can be no misunderstanding.

Yesterday's and today's debates will be overshadowed not only by the Estimates but by the cuts, or review, which we are expecting in July. It is not surprising that hon. Members with constituency interests raise matters with Ministers. When the Under-Secretary replied yesterday he did not answer all the questions. Some issues arise from the Estimates and the newspaper reports.

Over 1,200 men and women in the Royal ordnance factories have been made redundant at Birtley, Blackburn, Nottingham and Radway Green in the past 12 months. The Government have said that a committee of inquiry has investigated the Royal ordnance factories. When shall we receive the committee's report? This is vital because many people in the industry have given years of loyal service. They are understandably disturbed about the rumours emanating from Whitehall.

Is it true that the Conservative Government will do to the Royal ordnance factories what they did to the Forestry Commission? There is an analogy. The Forestry Commission was set up after the end of the First World War with all-party support. Successive Governments did nothing to privatise it. The same is true of the Royal ordnance factories. They have been accepted by Conservative and Labour Administrations as essential to the national defence. We understand that, for purely ideological reasons—to try to satisfy some of their 303 supporters—the Government are planning to sell them off to private industry. We reject that approach and ask the Minister to reconsider.

I turn to the question of defence industries and procurement. We appreciate that, as a small nation, we are operating a world-wide arms defence capability. We realise that we have to co-operate and co-ordinate with our allies. We fully accept that. We accept that, in collaboration with our allies we might decide to purchase equipment from abroad. In return we expect our allies to purchase British equipment.

The traffic seems to be one way. For example, what about the Marconi Sea Wolf missile system? What will happen? Will it go Dutch or will the capacity be kept in Britain? What about the heavy torpedo? Will it go to Marconi or across the Atlantic to the Amerians? If it is to go to the Americans what offset will there be? I understand that no offset arrangement can be guaranteed. The same applies to the Harrier. I understand why the McDonnell Douglas/British Aerospace AV8B should be built in collaboration—we accept that—but all the traffic must not be one way. Britain's defence industries must not end as subcontractors to America. That is an important aspect. I hope that the Minister will tell us the Government's approach.

Anxieties have been caused in the Royal Navy by recent press statements. I do not want to rehash yesterday's arguments but I want to press the Minister on the effect of the proposed review of British Shipbuilders which is operating in a difficult economic climate. Last year, it achieved an order book which was said to be unachievable. It was achieved almost entirely on merchant orders, with practically no help from the Government. Since the Government have been in power, only four ships have been ordered. Since then the whole basis of the company's strategic plan has been threatened. The new strategic plan will be threatened unless some naval shipbuilding orders are placed. Britain's shipbuilding industry may collapse.

I warn the Minister of that because the relationship between naval and merchant shipbuilding is close. Many yards could not survive if they were not underpinned. That was so when the industries were privately owned. Now that they are nationalised they still cannot survive without naval orders. I draw to the Minister's attention the large proportion of British Shipbuilders workers who are employed on naval work in spite of there being only four orders.

§ Mr. Antony Buck (Colchester)

Is the hon. Gentleman advocating officially from the Dispatch Box that there should be an increase in our maritime capacity and that we should have new orders for warships? I hope that he is, because I would agree with that.

§ Dr. Clark

The hon. and learned Member for Colchester (Mr. Buck) should address his remarks to the Secretary of State. We are debating the Defence Estimates. We are debating the Government's plans for the British shipbuilding industry. The consensus in the House is that we should be examining closely the make-up of our Navy. Perhaps we need a different form of Navy. Perhaps we need a surface as well as a submarine Navy. Perhaps the equipment is too expensive. We want the Government's view because they place the orders and the orders provide the jobs in British shipyards.

If the hon. and learned Gentleman is so keen to press me, I must ask whether he has changed his mind about the 304 five patrol boats which have been ordered for use in Hong Kong waters. I recollect that in the South China Post—or was it The Times?—when I was advocating that all five should be built in Britain, the hon. and learned Gentleman argued that four should be built in Hong Kong. The hon. and learned Gentleman should be consistent in his argument.

We cannot blame British Shipbuilders for the cost of naval vessels. The blame rests on the Royal Navy's high specifications. Most hon. Members will agree.

Will the Minister explain how we are to provide the hunter-killer submarines? From answers given to my hon. Friend the Member for Hamilton (Mr. Robertson) I understand that only the yards at Barrow can build them. The Secretary of State is nodding. How can we conceivably go ahead and build the four ships at the Vickers yards at Barrow and still maintain the programme for the hunter-killer submarines, which I think that hon. Members on both sides of the House agree that we need? It seems that the capacity is not there. Has the right hon. Gentleman got plans to open other yards and does he intend to build them elsewhere?

If the Government do go ahead with the draconian measures on surface ships that were rumoured in the press over the weekend a tremendous social cost will be involved. I know that the Minister will say that it is not his responsibility but it is our responsibility in the Tyne, Clyde, Mersey and other shipyard areas, where we already have massive unemployment. In my own constituency almost one in four of the men are without jobs and if the Minister goes ahead with his programme there will be a tremendous social responsibility on the Government to make sure that the situation does not get beyond control.

While we are on the Defence Estimates I want to refer to the British Army of the Rhine and the costs in foreign exchange. I fully understand what the agreement was and that it costs this country a lot of money in foreign exchange to have our troops in Germany and elsewhere. I find it very strange that nothing has been done or said about this matter. It costs overall about £1.2 billion in foreign exchange to have our troops overseas, which is almost equal to our overseas arms sales. I suggest that if NATO wants us to perform these four tasks—on the central front, as a strategic nuclear force, in the Channel and the East Atlantic and in the home base—which makes our role a very wide one indeed, and one which none of our European allies accepts, it must surely help us to pay the cost of doing so. I hope that the Secretary of State, when he winds up, will be able to elaborate on that point.

§ Dr. Alan Glyn (Windsor)

I agree with the hon. Gentleman. We are being called upon to defend Europe in an unequal way by sheltering it under our nuclear umbrella. When NATO was established it was a very small group, but now we are expected to defend a very much larger area, whether it is called the EEC sea lanes of communication or anything else. I believe that a further contribution from European countries is necessary if we are to maintain our defence budget at a safe level.

§ Dr. Clark

I fully accept the point made by the hon. Gentleman and I am very grateful for it. This further illustrates the danger of increasing our activities in the rapid deployment force outside our own area.

I turn now to that part of the Estimates that refers to arms control and disarmament, a subject which the 305 Secretary of State yesterday saw fit to dismiss almost as an afterthought in four brief paragraphs in a speech of over 50 minutes. He referred to this only in connection with a clause in our amendment drawing attention to this point—a fact which in a sense indicates and supports our criticism and condemnation of the Government.

I listened to the Secretary of State today and I thought that he was trying to redress the balance, but he was not very successful in doing so, We of the Opposition, and I hope the Government as well, believe that arms control and disarmament are an integral part of our defence policy—part and parcel of the same approach. I think we all accept that the world is caught up in a vicious, ever-increasing nonsensical arms race, with the cost escalating in geometric proportion and with accompanying risks. I am sure that that belief is common to hon. Members on both sides of the House.

We oppose Trident not only because the costs damage the defence budget but because it represents a new generation of weapons which it is not necessary for this country to have at the present time. I believe that efforts must be made to resolve speedily some of the problems of disarmament with which we are faced. I accept that, as the Secretary of State has said, it is a long furrow to plough but, although it is not an easy task, it is a worthwhile one, and a worthy ideal which we must try to achieve.

As I see the situation, the British Government and the American Adminisration at present seem to be dragging their feet in this sphere. Admittedly they have said that they are prepared to negotiate with the Russians on the medium-range theatre nuclear weapons at the end of this year, but they have been dragged kicking and squealing into the conference chamber. I will try to show why I believe this. I stress that it is as much in the interests of the West as of the Soviet Union and the third world that we take some positive steps in the next few years, because the odds are increasing all the time.

My own view, and I think that it is shared by many people in this country, is that the result of the presidential election in the United States did not help many of these matters. Once the election rhetoric begins to fade—and we hope that the air of reality will become dominant in Washington—I hope that we shall find a much more responsible attitude in America. I feel that we, supposedly having a special relationship with the Americans, are able as friends to impress on the Americans the importance of arms control.

We on the Labour Benches certainly send our good wishes to Chancellor Schmidt on his trip to the United States today. He has an uphill struggle ahead of him and I hope that Her Majesty's Government will publicly and privately back him in his efforts to persuade the Reagan Administration to press ahead with great speed with disarmament talks, because it is absolutely vital that this is done. I hope that the Secretary of State will throw the full weight of the Government behind Chancellor Schmidt in this respect.

While talking about our friends across the Atlantic, I must say that the Secretary of State for Defence's statement on "Panorama" was not particularly helpful to United States interests in this country. Especially damaging was his apparently hard-line approach to arms control and disarmament. That is something that we are not used to in this country and that, by and large, we do 306 not expect. I thought that he did his country and himself a great disservice by those remarks. There is not only great concern in this country but great concern throughout Europe about the stance of the Americans. I have here a report from the Herald Tribune on Willy Brandt—no slouch when it comes to standing up for himself and the interests of the Western world.

§ Mr. Robert Atkins (Preston, North)

A Socialist.

§ Dr. Clark

He may be a Socialist but he is a man who defends freedom as strongly as anyone in this House. He is a man who fought against the Nazis. If the hon. Member for Preston, North (Mr. Atkins) had as honourable a record in fighting fascism as Willy Brandt I should be willing to accept his point of view.

I will just quote what Willy Brandt said. He said that the United States was making absurd demands on Bonn, and went on: I, who know the value of German-American co-operation, find it disappointing how many absurd things have been demanded of us from Washington in recent times. So we are not alone in being worried about the Americans and I believe that, as friends, we have the right to tell the Americans where they are going wrong and why they must be prepared to make moves towards disarmament and arms control.

We are also concerned when we learn of certain attitudes emanating from Washington. Such attitudes are epitomised by the desire that I have heard expressed for spending the Soviets into the ground. Nothing could be more suicidal, more dangerous. The Soviet economy is hugely overstretched by its military demands at the moment. It spends a proportion of its gross domestic product that no free country could afford to spend. I believe that if we forced it to spend more that would lead to instability and increase the risk of a war. I cannot think of any other single factor that would increase the risk of war more than instability in the Eastern bloc.

I find support for that kind of approach in a clear speech by the hon. Member for Aldershot (Mr. Critchley) on 7 May. He said that he had just returned from Washington and that one of the first clear impressions he received in Washington had been the hostility to arms control which is held strongly in certain sectors of the Administration, in the State Department and in the Pentagon. That is the position in Washington now. It is right that the House should have knowledge of the attitude there and that the Government and right hon. and hon. Members should try to influence American opinion and show the Americans the error of their ways.

§ Mr. Cranky Onslow (Woking)

Having had the advantage of being in Washington relatively recently, I put it to the hon. Gentleman that it would be more accurate if he said that there was considerable criticism in Washington of the approach to arms control by the previous Administration, who appeared to believe that it was possible to negotiate from weakness. But there is no evidence that Washington has lost interest in negotiating on arms control from a position of equality, if not of strength.

§ Dr. Clark

The real point is not whether one negotiates from strength or weakness, but whether one negotiates a treaty which both sides can accept and which will be lasting and workable. I cannot accept the same interpretation of events as the hon. Gentleman. 307 The NATO decision in 1979 for the modernisation of theatre nuclear weapons was a two-part decision which we fully appreciate—at least, I hope we do. The decision to deploy was dependent on a serious and meaningful attempt to negotiate with the Soviets on arms. Reluctantly, and as I said, kicking and squealing, the Americans have agreed to enter negotiations, but not until the end of the year. Why have we had to wait for the past 12 months? Why have we to wait virtually another five months? I am reassured that Secretary of State Haig met Ambassador Dobrynin only last Friday evening. I hope that the newspaper leaks are true and that at that meeting arms control was discussed, because it is vital that we press ahead.

I want to move now to some of the other arms forums. There are so many that it is difficult to monitor the effect and progress of each one, but we are entitled to put to the Secretary of State certain points. We heard the American Secretary of State for Defence recently on "Panorama" say that SALT II was dead. Most of us—certainly on the Opposition Benches-would regret that. I hope that our view is shared by Conservative Members. However, I regret even further the Government's attitude on this matter. On 7 May, when this matter was raised, the Lord Privy Seal said: There was then no question of the American Senate ratifying the treaty. The right hon. Gentleman then said: At this stage, at least, we can play no useful part."—[Official Report, 7 May 1981; Vol. 4, c. 278.] That is not good enough. We should be making representations and putting pressure on the Americans, if not to ratify SALT II, at least to proceed with other SALT programmes and possibly to accept all the conditions laid down by SALT II and not to deviate from them. I hope that the Government will make such representations to the Americans.

I turn now to conventional arms control. What progress has been made on mutual balanced force reductions?

Finally, on disarmament, I come to the conference on security and co-operation in Europe which took place in Madrid. At the Madrid conference, the French took considerable initiatives on disarmament and made some interesting and far-reaching proposals. We welcome their lead in that respect. The Government have said that they broadly endorse the French approach. What is meant by "broadly endorse"? I presume that they endorse the French proposals for the confidence-building measures. I hope that is what they mean.

But where do the Government stand on the other French proposals about an international satellite agency, open to all States, responsible for the gathering, processing and dissemination of information relating to disarmament? It seems to us that the key to successful arms control negotiations is successful verification and monitoring. Where do the Government stand on those matters?

Many constructive developments are emerging in arms control. There is the World Disarmament Council and the United Nations conference next year. We have seen a bold initiative taken by the French and the Germans. Chancellor Schmidt and Giscard d'Estaing have given a lead to the world. But where has Britain been? We may have been in the negotiations and the discussions, but we have been the laggards rather than the leaders. It is lamentable that we have not played a part in the van of the movement towards peace and disarmament.

308 When I started my speech I said that we believe that defence depends upon the ability to pay; it depends on a sound economic base. In addition to the ability to pay, there needs to be a willingness to pay. In a sense, that is what differentiates the West from the Eastern bloc. Defence expenditure ultimately depends on a willingness to forgo personal and other social projects.

The Government have reduced the willingness of the British people to pay for defence. As people look round and see their manufacturing industry crumble, their jobs go and the social fabric of the nation being destroyed—

§ Mr. Onslow

Rubbish.

§ Dr. Clark

The hon. Gentleman may say "Rubbish". I have already quoted the unemployment rate in my constituency. The council house waiting list has doubled in the past two years. Further, whereas two years ago we were building 700 houses a year, next year we shall be building only five council houses in an area of great deprivation.

The Government have destroyed the morale of huge sections of people. That has affected the willingness of people to pay for defence. In a sense, the Government have done a great disservice to the defence of this country. Young people, in particular, are worried about this matter. The Government have the responsibility not only for providing better social services, but for providing a moral lead towards arms control and disarmament. In my view, the Government have failed to take up that challenge.

§ Mr. Julian Amery (Brighton, Pavilion)

The hon. Member for South Shields (Dr. Clark), in the second part of his speech, expressed the anxiety of himself and his right hon. and hon. Friends about United States policy. He asked why it had waited so long before resuming disarmament talks. On reflection, I think that he may feel that his speech would have been better balanced if he had expressed some anxiety about Soviet policy. Perhaps the answer to the question why it has waited so long, is summed up in the words "Afghanistan and Poland". However, I shall not pursue that matter. The main problems mentioned by the hon. Gentleman are for my right hon. Friend the Secretary of State for Defence to answer.

I congratulate my right hon. Friend on the clear reaffirmation of our commitment to the Trident programme. I spoke about this matter some months ago, and I shall not repeat my argument. I should like to ask only one question about it. In the White Paper my right hon. Friend states that the decision on the fifth boat does not have to be taken for some time. Perhaps he will indicate in his winding-up speech approximately when that decision will have to be taken. We would not want it to go by default.

My right hon. Friend the Prime Minister, in her exchange of letters with President Carter, assured the President that the agreement under which we were to take the Trident—on remarkably favourable terms—would not entail any diminution of our contribution to the general Western defence effort. Yesterday, at Question Time, my right hon. Friend said that there was no question of any cut in defence expenditure, and my right hon. Friend the Secretary of State for Defence reaffirmed that in his speech, which I read again this morning for greater accuracy

. 309 Of course, we understand that there is no question of cutting defence expenditure. The problem is a different one and one which my hon. Friend the Under-Secretary of State for Defence for the Royal Air Force perhaps brought out more clearly than did my right hon. Friend the Secretary of State yesterday, although both have been frank about it. Although there is no question of cutting defence expenditure, equally, no increase is contemplated in the cash limits under which my right hon. Friend took over his present office from my right hon. Friend who is now the Leader of the House.

If there is a sacred cow in the debate, it would seem to be the cash limits. If they are the sacred cow, there will be cuts in our defences—not cuts in defence expenditure but cuts in the military power that we deploy. This is because of the inevitable and immense escalation in the cost of manpower and weapons to which my hon. Friend referred. A 3 per cent. annual increase in defence expenditure is not enough to meet that escalation.

My right hon. Friend took office with instructions to keep within the cash limits, so naturally he asked the Ministry of Defence to work out different ways to get the best possible results for the money that he was entitled to spend. I have known the Ministry for years. Those in it have no doubt been working in the way that they do. They have produced various models and schemes, and, as a result, there has been a great deal of speculation about the future of the British Army of the Rhine, the surface fleet and certain weapons systems.

It is all very well for my right hon. Friend to laugh off what the The Daily Telegraph correspondent wrote, but there is a bit more to it than that. A solid citizen like my hon. Friend the Member for Ashford (Mr. Speed) does not put his neck on the block and prejudice his whole political career unless he believes that something pretty serious is amiss. From what I know of the Ministry of Defence, his professional advisers would not have allowed him to do so unless they, too, believed that something was pretty much amiss and that there was rather more fire behind the smoke than has been admitted.

I reflected on all this, and share the idea with the right hon. Member for Cardiff, South-East (Mr. Callaghan) that it would have been rather fun if, instead of making his speech at Tenterden, my hon. Friend had held his fire and made it from the Dispatch Box last night. I wonder what the Front Bench reaction would have been to that.

None of us with friends or contacts in the defence community is in any doubt that there have been great goings on in that world. Some of them have been ably described in articles by my hon. Friend the Member for Aldershot (Mr. Critchley), and they give cause for anxiety.

The central theme of the White Paper is the relationship between the threat that we have to face and the money that we can afford to spend to meet it. What is the origin of the cash limits against which my right hon. Friend is operating? If I am not mistaken, they are based on expenditure in 1977, to be increased by the NATO decision that year by 3 per cent. per annum over a longish period. However, 1977 is four years ago and a lot has happened since then. The Ministers who concluded the 1977 agreement still believed, however misguidedly, that detente was a reality. They were deliberating and deciding before the SS20s had been deployed on their present scale, 310 before the Shah had fallen, and before Afghanistan had been invaded and we had seen the startling growth in Soviet strength. The situation today is very different.

The Soviets have achieved strategic nuclear parity. It is fair to say that they have superiority over NATO in quantity and quality. My old friend Captain Liddell Hart laid down that the defence was stronger than the offence in the ratio of 3:1. The Soviets have achieved that in almost every category in Europe today.

A new factor has come into being. Not long ago we saw remarkable exercises by the Soviets in Aden and Ethiopia, where they landed an airborne force of 20,000 men, with tanks and associated equipment. They have a capability to land about 50,000 men. What forces do we have available in Britain to outflank the central flank of NATO if such an attack took place?

Then at last there is a belated recognition, which my hon. Friend the Under-Secretary of State for Defence for the Royal Air Force made in unequivocal terms, of the threat that faces us out of the area. I very much welcome what he said. I have been banging on about the subject for a long time, but this is the first time that it has had such explicit recognition.

A window of opportunity has opened for the Soviet Union. From now on it has the lead, and will keep it for some years. Such is the lead time of modern weapons systems that we cannot, even with the greatest effort, hope to close that window with any certainty for between five and 10 years. We are therefore, in a period of unprecedented peril, and that period has started now, as we sit here.

Clearly, the situation calls for a defence review. Europe's principal ally, the United States, has no illusions about the danger. The Americans have undertaken a defence review which has concluded that over the next two years they should increase defence expenditure by 17 per cent. Equally, the Government have no illusions about the peril. My right hon. Friend the Prime Minister has made speech after speech about Soviet imperialism. When he was Secretary of State, my right hon. Friend the Leader of the House also made several speeches to that effect. The White Paper sets out the facts as clearly as I have.

Therefore, the Government are not in the same position as Mr. Neville Chamberlain, who believed that he could achieve detente with Hitler. In retrospect, that gave him some excuse for having neglected our defences—although it should be remembered that even he increased defence expenditure by 6 per cent. in 1938, before the Munich agreement, and by 12 per cent. after, even though he still affected to believe in detente.

If the threat is what my right hon. Friend the Prime Minister and the United States Administration say it is, we must find the money to meet it. If the fate of the nation is at stake, there are no sacrifices that either side of the House would not agree to, including rationing and cuts in much of our civilian life, if necessary. However, the increases in the present cash limits that I believe are necessary would not be so dramatic. We need to put flesh on defences that have been cut to the bone and are already inadequate to meet the present threat.

I believe that there would be general agreement among those who have studied the matter that our Armed Forces are seriously undermanned. The White Paper admits it. By contrast with the Soviet forces in East Germany, the British Army of the Rhine is seriously undermanned. Its state of readiness is not what it should be. Instead of 311 reducing or compressing the Royal Marines, we should have another Marine commando and build up the Parachute Regiment to where it was before.

My hon. Friend spoke about the need for an ability to intervene overseas. That must be undertaken seriously, not, as my right hon. Friend the Secretary of State suggested in a television interview some time ago, with perhaps a company or even a battalion. Anything less than a brigade group with supporting air and naval support would be derisory.

We need more manpower for the Navy. If my hon. Friend the Member for Ashford is right, as I have no doubt that he is, we are short of crew to man the ships that we have, when we should perhaps be hoping to bring some ships out of mothballs. The Royal Air Force is still desparately short of pilots.

On home defence, if there is a threat of an airborne landing, the least that we could do would be to do what Neville Chamberlain did in the days of appeasement and double the strength of the Territorial Army. We should take the advice of my right hon. Friend the Member for Stafford and Stone (Sir H. Fraser) and at least have a compulsory register of everybody in the country. If a crisis comes, thousands of people will be queuing up asking how they can help. That happened in both World Wars, but there was no machinery to tell them what to do or where to go. It would not be too expensive to set up an organisation to decide how people's services could be allocated.

I suggest that we should take advantage of the recession and the unhappiness of unemployment to try to boost recruitment well above existing manpower ceilings. It is not only pay that counts here, but convincing potential recruits that the Government want them and care about defence. The impression created, no doubt by mistake, over the past few weeks has been quite different.

Training is also extremely important. Men are no use unless they are trained. The present level of training is deplorable. If men are not trained, they become rusty, as does the kit.

If the Government are right in their analysis of the gravity and urgency of the threat, we should have a crash programme to get as much equipment as possible into service in the short run because the threat is here and now.

§ Mr. Alan Clark (Plymouth, Sutton)

I hope that my right hon. Friend will appreciate that I intervene in a spirit of great humility to ask him, from his long and deep knowledge of foreign affairs, to enlighten me. If the ideal military programme that he postulates, which would necessarily be at a colossal expense, is really so urgently necessary, what positive evidence can he give of the Russians' aggressive intent, other than the attempted takeover of Afghanistan, which is within their own sphere of influence? Is there not, on the contrary, almost unbroken evidence of Russian restraint in foreign affairs at a number of crisis pressure points during the past two or three years, such as Iran, the Iran-Iraq war, the Israel-Palestine disputes, and, indeed—

§ Mr. Speaker

Order. Is that the speech that the hon. Member intended to make? I know that he will try to catch my eye.

§ Mr. Amery

My hon. Friend indicated to me yesterday that he did not intend to speak in the debate, but he has at least made a contribution. If I tried to reply to him, 312 however, it would be with a foreign affairs speech, which would not be in keeping with the debate and would unduly prolong my contribution. I should simply remind the House of Czechoslovakia, Hungary, Poland, SS20, Afghanistan, Angola, Ethiopia and a good many more examples which come to mind.

If the threat is as serious as the Government and the American Administration believe, whatever my hon. Friend may think about it, we should have a crash programme of rearmament. We should use the current recession to do that. My right hon. Friend will never get this so cheaply or so quickly as now, when there is surplus capacity in industry. The sooner we close the window of opportunity on the Russians, the closer we shall be to safety. Nobody wants an arms race, but if there has to be one, we had better win it.

What are the implications of what my hon. Friend the Member for Plymouth, Sutton (Mr. Clark) ventured to call an ideal programme, although I regard it as far less than that? It would mean a small setback to the counter-inflation policy and a small increase in the borrowing requirement or in taxation. It would not be much more than that. I leave it to my right hon. Friend the Secretary of State to try to cost it.

Of course, these things are unwelcome, but are we really so poor after two years of Conservative Government—[HON. MEMBERS: "Yes."]—that— we cannot afford this small addition to the defence budget? The living standards of those in employment are still higher than they were. The balance of payments is safeguarded by oil. Sterling is reasonably strong. My right hon. Friend the Secretary of State for Industry continues to stuff subsidies down the necks of lame ducks like an Alsatian farmer producing foie gras.

My right hon. Friend the Prime Minister says that we have reached the limit of cuts. My right hon. Friend the Secretary of State quoted Adam Smith yesterday. I remind him that Adam Smith also wrote that defence is more important than opulence. Our credit abroad is not so bad. Have we thought of obtaining an interest-free defence loan from Japan as a form of burden sharing? That might not be so unproductive. In the wars against the French under Marlborough and Wellington, we subsidised our allies. Cannot we at least subsidise ourselves in order to defend ourselves?

I wish to say a word about the international implications of the cuts. If we cut our defences—and it is not our defence expenditure, but our defences—the impact on the neutralist currents in France, Holland, Belgium and Scandinavia could be serious. If we cut our defences, we shall lose the respect of many neutral and non-aligned countries. My right hon. Friend the Foreign Secretary is always warning against the danger of subversion. The ability to show the flag is important in discouraging subversion. If our defences fall much below their present level they will become irrelevant in the eyes of the world.

What matters above all is the impact on our American allies. At the moment, they are taking a very robust view, which the hon. Member for South Shields denounced, but it would not be impossible for them to relapse into isolationism or turn to the Pacific. There is certainly a school of thought in the Pentagon to that effect. Alternatively, they might be tempted to try to do a deal with the Soviet Union—a kind of super-Yalta—at the expense of Europe. A leading article and an article by the 313 commentator Joseph Kraft in this morning's Herald Tribune rather bear out what I have said. A much more alarming editorial in the current "Strategic Review" discussed whether the Mansfield amendment calling for the withdrawal of American forces from Europe should not be dusted off.

I know all the arguments against extending the cash limits. They are the same arguments that one finds in the memoirs of those who served in the Baldwin and Neville Chamberlain Governments, namely, that it is unsound financially, that it is unpopular and that it could lose votes. We might even be told that it might lose us the election, so that the Labour Party would get in, with all the implications of that. Those were the party political considerations which brought us to the brink of defeat in 1940 and brought the Conservative Party to disaster in 1945.

Unemployment and weak defences make a bad combination for the Conservative Party. If we had announced a review on the lines now being discussed, although not yet presented, at the time of the general election, we should have lost a great many votes.

I realise that no decisions have been taken. I assume, of course, that there will be consultation with our Allies. I also assume, although there was some uncertainty about what my right hon. Friend said, that there will be a full debate when he makes his statement.

This debate has been extremely valuable. Its value has been greatly increased by the speech of my hon. Friend the Member for Ashford, which catalysed the situation.

I close by saying to my right hon. Friend that if something has to give, let it be the cash limits. For a Conservative Government to cut defence in the face of an immediate and growing threat would be to put the credibility and honour of that Government and of our whole party at issue.

§ Mr. James Callaghan (Cardiff, South-East)

I hope that the right hon. Member for Brighton, Pavilion (Mr. Amery) will allow me to pick up on my way some of the interesting points that he made, instead of replying to him directly. There are some issues on which I should like to make amendments to his point of view.

My understanding of the Government's attitude is that they do not share the right hon. Gentleman's view of the seriousness of the situation. They do not believe that it resembles 1938; nor do I. If any evidence is required, it is to be found in paragraphs 105 and 106 of Cmnd. 8212-I: Experience suggests, however, that we cannot be confident the Soviet Union will be content with peaceful competition. We still have no reason to believe that Soviet leaders are specifically planning to attack NATO. That is the Government's appreciation of the position, and, as I understood it, it was what the hon. Member for Plymouth, Sutton (Mr. Clark) was saying in his intervention. No doubt if the Government shared the apprehensions of the right hon. Member for Pavilion, they might wish to embark on some of the projects that he mentioned. But I believe that they would be wrong to do so.

I take more or less the Government's view, that there is a potential threat from the Soviet Union. I do not trust the Soviet Union, but I do not see real evidence yet, 314 despite the window of opportunity that has been opened up, that the strategic stalemate has been broken. That strategic stalemate has preserved us, in my judgment—although not in the judgment of some of my hon. Friends—for the last 30 years.

I believe that the Soviet Union has a tactical advantage at the present time, but that it is not sufficient to warrant it embarking on a war that would destroy it as well as the West. I cannot see that that is the scenario, and I understand that that is the Government's assessment. If I may say so, they are in their assessment broadly following the assessment that the Labour Government made. There is a difference of degree but not of perception in this matter, and I do not intend to say anything different today about our defences from what I said when we were in office.

We are grateful to the hon. Member for Ashford (Mr. Speed) for opening up—however inadvertently—the review to all our eyes. I dare say that this debate would have taken a very different course if the hon. Member had not made his speech last week, although I do not suppose that he particularly wanted it to result in the course that has been taken. But we owe him a debt of gratitude His serious contribution to the debate yesterday enabled us to put some of these matters into focus.

Yes, there is a need for a review of defence expenditure. There is nothing new about that. All Governments, half way through their term of office, discover, as the Under-Secretary of State for Defence for the Royal Air Force said this afternoon, that the increasing technological development of weapons has rendered impossible the programme on which they thought they were embarked. This Government are likely to be a little more kindly treated by the Opposition, in making that discovery, than we were treated by them when we were in office. However, I do not particularly wish to make a party speech this afternoon.

The value of the debate is that it gives us all a chance to influence the Government before they reach their conclusions on some of the worrying ideas which have been put forward—on what authority I do not know. This may be the only opportunity that we shall have of making an appeal to the Government and of expressing the view of the House to them. I thought that I detected yesterday some degree of retreat by the Secretary of State for Defence from at least some of the things that were put before us in the speech of the hon. Member for Ashford. Indeed, the Government may already be backtracking on some of them. If so, his resignation will have been worth while. I am sure that there will be many opportunities for him to serve in the years that lie ahead.

I have heard it said that I speak as a Navy man. It is true that 30 years ago I occupied the office from which the hon. Member for Ashford has just resigned. But 30 years is rather a long time, and I do not now have any particular connection with the Navy, and I want to approach the question as objectively as I can. I agree with the Secretary of State that sentiments should not be decisive in these matters, whether one has served in the Navy, the Admiralty or anywhere else. But the cost effectiveness, or opportunity cost, is equally not the only factor that should be considered. It is taking almost a merchant banker's view of the position to talk about cost effectiveness as the sole factor.

The morale of the Services is important. The esprit de corps that has been developed, and the traditions of this 315 country, make up something that is very important. The right hon. Member for Pavilion quoted Liddell Hart and his factor of three to one. My recollection is that it was Napoleon who said that the morale to the material was as three is to one. The cost effectiveness approach that the Secretary of State commended to us is not, therefore, the only factor that should be considered.

I have no apology to make for appealing to our history in this matter. The Secretary of State recognised that our history has an important part to play when he said in the White Paper that our least obvious natural role is the deployment of our forces on the Continent.

It is clear from what the hon. Member for Ashford said that the Soviet Union has built a huge surface fleet. Thirty years ago, when I was at the Admiralty, it would have seemed unimaginable that the Soviet Union could ever have a fleet of that kind. I say to the Secretary of State and to the Government that the United Kingdom is the nation that is best fitted to guard the shores of this country, to guard the shores of Europe, and to keep open the sea routes.

We have been told that the Soviet Union is self-sufficient in raw materials and minerals. Why, then, does it need such a powerful navy? If it were of such a mind, it could easily interfere with the passage of our cargo ships, which are vital to our life blood. What do we reply with—Trident? Of course not. We need a fleet in being, with ships that are capable of standing off and protecting our own cargo vessels—the very life blood of this country. That is vital to us, and I repeat that we are the nation best fitted to make that provision, not only for ourselves but for Europe as a whole.

I want to refer particularly to the question of the troops in Europe. I recall that we debated this issue in 1954, and the right hon. Member for Pavilion took part in that debate. Why did we go to Europe? I remember the speech that Sir Anthony Eden made. He said that the Government had two reasons. First, we went to Europe as a deterrent. We had about four divisions there, and the feeling was that if we kept those four divisions there after the peace treaty was signed, together with the Second Tactical Air Force, that would help to defend Europe against any attacker.

But that was not the main reason. The main reason, as Sir Anthony Eden made absolutely clear at the time, was French and German mistrust of each other, and it was felt that our presence on the Continent would be a psychological aid in assisting them to come together. As Sir Anthony Eden said at the time, the real problem was how to handle the Germans. That was why we had 55,000 troops and the Second Tactical Air Force in Europe. Are not the French and the Germans getting on pretty well without us? I think they are.

Thank God, I am not one of those who are jealous of the Franco-German alliance. Anyone of my generation is deeply appreciative of the fact that that long enmity has now disappeared. But we do not have to keep 55,000 troops there in order to prevent the Germans and the French from getting at each other's throats. However, I accept that troops are still needed as a deterrent.

I wish to make a strong point to the Secretary of State. I strongly believe that it is necessary that this country should have a maritime air capability—I am not talking merely about surface ships—that is capable of guarding our shores, of looking after not only our trade routes, but those of Europe, and of ensuring the reinforcement of this country as well as of Europe from the United States of 316 America—if, unfortunately, that should become necessary. I have long felt that the time has come—indeed, it is long overdue—to take up seriously with our allies in Europe the reason why 55,000 British troops are on the Continent.

§ Sir Frederick Burden (Gillingham)

Do we not also employ 30,000 Germans and pay them accordingly?

§ Mr. Callaghan

The hon. Gentleman has added to my point and is absolutely correct. With the exception of four individuals, we all agreed when Anthony Eden wanted us to put our troops in Europe. At that time we were not talking about employing 30,000 German civilians. I do not wish to be chauvinistic, but I would far sooner that those 30,000 people were employed in Britain, if 30,000 jobs must be paid for.

Unfortunately, the Labour Government finally had to bring the question of offset costs to an end. We did so to my great regret, although I did not think that it was a good thing to haggle about it every year with the German Government. Hon. Members will appreciate that when we stationed four divisions in Germany we were told that the cost in foreign exchange terms would be £15 million to £20 million a year. Last year, the cost, in foreign exchange terms was about £800 million. It was certainly not less than that.

For all those reasons many of us want a proposition to be put to our allies to the effect that we should at least halve the number of troops now stationed in Germany. If Mr. Henry Stanhope was correct in his piece in The Times, that would do far less damage to NATO than if we were to make the cuts proposed in the Navy and in the maritime air force. If I were to discuss this issue with our allies, it would not come as a shock to them. They know about it and they know that discussions go on. They also know that our 55,000 troops are not of the same total value—I am not decrying them—as they were in 1954.

We might find that our allies had a surprising degree of understanding if we were to tell them that we wanted to bring home at least 25,000 troops and that in doing that, we would maintain our naval and air strength. I must tell my hon. Friends that that might involve retaining Trident. I might take a different view from some. However, if such a proposition involved retaining Trident, it would be a bargain that would be well worth making. However, we should not give the Admiralty its head, or indeed the air marshals.

I was taken by some of the criticisms that have been made about the nature and size of the platforms from which the missiles are to be launched. There is a good case for a serious review. However, I do not disagree much with what the Secretary of State said about the nature of the maritime or air forces. I would sum up my sentiments by saying "Keep your platforms, weapons and aircraft rugged and simple. Let them get in as much time at sea and as much time in the air as possible."

The right hon. Member for Pavilion holds only one point of view. He believes that if the threat is there, we must find the resources. That is not the only task of statesmanship. If the threat is there we must find a way of circumventing it by other means. One of those means was put forward in an excellent speech by my hon. Friend the Member for South Shields (Dr. Clark). At present, there is a vacuum in disarmament. I hope that the right hon. 317 Gentleman will not disagree that both we and the Soviet Union have a common interest in wishing to stop this mad arms race.

Given the difficulties that confront the Soviet Union—there is no need for any hon. Member