My Lords, in the situation that I have described to your Lordships, it is not wise for me, from this Dispatch Box, to give guarantees in relation to any of the operational issues that may need to be reviewed in the coming days. I believe that it is highly unlikely that the situation suggested by the noble Lord will occur. But to give a guarantee, at a time when we know that there is a potentially dangerous and fluid situation, is a step further than any Minister in my position ought sensibly to take. We shall carefully watch the situation. Fortuitously, the Chief of Defence Staff has a visit planned that will enable him to look at the situation on the ground. As matters progress, I am sure that we shall be able to be more helpful about our intentions. I hope that the House will bear with me for the moment.
I shall return to what I was saying. When the Government came into office, we were acutely aware of the need to modernise our Armed Forces in order to adapt to the changing circumstances of the defence and security environment. As noble Lords will be aware, a great deal has changed over the past decade and a half. The world has become increasingly multipolar, with new and shifting centres of power and alliances. Old certainties have collapsed while new conflicts have emerged and, sadly, conflicts that previously had been repressed have been re-ignited. We felt that not enough had been done to ensure that our defence structures had changed sufficiently to meet that changing environment.
The analysis conducted during the Strategic Defence Review has fully confirmed this belief and events experienced since 1997 in Kosovo and now in Sierra Leone have reinforced those lessons. Perhaps some of this strife will prove to be transitional; the death throes of an old order. Perhaps the longer term will result in the emergence of stable, liberal democracies. I am sure we all hope that that will be the case.
But we cannot stand by in the hope of a better world appearing: there remain too many fundamental causes of conflict. Political or economic exclusion has been the root cause of many recent internal conflicts. Ineffective or corrupt governments increase the risk of instability. Taken together with various combinations of ethnic tensions and demographic pressure, all too evident in many regions of the world today, it is reasonable to expect a degree of increasing instability. Almost by definition, this is likely to be in the regions that are least able to help themselves.
Here we come to what I believe is the heart of the matter. Such crises may not place our immediate national interests at risk. There may be no immediate imperatives to intervene to protect the United Kingdom and its citizens. However, international relationships are more complex and often a great deal more subtle than that. We recognised this in the Strategic Defence Review. We recognised that in the wider interests of the United Kingdom and in order that those wider interests be protected our military capability would often be deployed in conflict prevention and peacekeeping as well as for direct national security. That is part of the changing picture of international relations--call it globalisation, call it the "world economy" or call it the international community. It is the reality of the position.
Moreover, we are a permanent member of the United Nations Security Council, a leading member of NATO, the EU and the Commonwealth. We are a relatively wealthy nation that depends on free trade which is permitted by peace and stability. We have these relationships and responsibilities. We need to exercise them with care in the wider interests of the United Kingdom. These interests will be better served in a peaceful and stable world.
We believe that we have a great deal to be proud of in Britain: a stable democracy; respect for the rule of law; civilian control of the military; and an inherent respect for basic human rights. We have a responsibility to those struggling to enjoy precisely those rights that we take for granted; a responsibility to help to secure peace, stability and the furtherance of human rights wherever we can.
But, of course, the discharge of such responsibilities is not a straightforward matter. Ideally, it is achieved through the channels of diplomacy, discussion and debate, as well as economic and developmental aid. But sometimes, as we know all too sadly, these methods fail and then we must be prepared to adopt the methods of last resort--military force.
To be able to employ military force in the modern world, either directly or in a role that seeks to defuse tension or deter conflict, requires forces that are flexible, genuinely deployable, capable and sustainable--in some circumstances over extended periods of time. The SDR recognised that this kind of function lies at the heart of the role of the British Armed Forces of the future.
The White Paper set out how far we have already come in implementing the review's recommendations. I wish to stress to noble Lords that I believe that it is by results delivered that our policies will be judged, and rightly so. Since the White Paper was published, we have made further progress in making real improvements. Indeed, a large proportion of the review's key decisions have now been implemented. Since April last year, we have established a pool of Joint Rapid Reaction Forces to provide more capable, deployable and better supported joint forces. We have established the Joint Helicopter Command, bringing together all battlefield helicopters. We have formed 16 Air Assault Brigade, the most powerful formation of its size in Europe and equipped with the Apache attack helicopter. The first of these helicopters for the Army was recently rolled out at the Westland factory in Yeovil.
We have the Joint Force Harrier, which brings together RAF and Royal Navy Harrier aircraft into a more flexible command as part of a new Maritime Air Group. As presaged in the review, we have taken the first steps to procure two new aircraft carriers and we are in the process of fitting all our attack submarines with the Tomahawk land attack missile, which was employed so successfully during the Kosovo crisis last year.
I am happy to say that Smart procurement is proceeding well. Attention is often drawn to successes in the big equipment projects and it is quite right that we should do so. But Smart procurement is about much more than that. It represents a truly radical shake-up in our whole procurement philosophy and culture. It touches on the way we pull in the expertise and strengths of the private sector, the way we maintain and support equipment through its entire lifespan and also the way we train and educate our Armed Forces. It is often the people working on the smaller projects and the less glamorous systems who are the most creative in this. When I visited the Defence Logistics Organisation in Andover last Friday, I was impressed by the innovative ideas such as lean support techniques that could deliver savings of as much as £3 billion over the next 10 years and by the introduction of a Defence Electronic Commerce Service to cut down on red tape. I have also been much encouraged by the genuine interest shown by our defence partners from abroad in what we are doing. It is rarely the case, when I go abroad, that an item on the agenda put forward by my counterparts in governments overseas is not one of Smart procurement in which they are all extremely interested.
So when I read some of the comments the press regularly churn out about our defence equipment, I wish that reporters would at least occasionally check their facts and provide a balanced view. Modernising the Armed Forces means equipping them to perform the most demanding tasks. That represents a huge programme of investment in our forces. It is some £10 billion per year on equipment. Yet we are still accused of trying to get our defence on the cheap. That is nonsense. Yes, we want to be efficient; we want to make every pound count for defence. It would be unreasonable to expect us to take any other course. But if you asked a man or woman in the street about spending priorities, they would most likely put defence pretty low on the list. It is not that they consider defence to be of little importance, but rather that they expect any government to provide the resources necessary as a matter of course. Nonetheless, additional defence spending is not going to be a top priority with the public and we need to accept the realities of that.
The priorities of this Government lie with getting the maximum value from available resources that will always remain less than we might wish for. But we do not and will not compromise on the quality of equipment that we provide to our forces.
In past debates, many noble Lords expressed concern about our budget. It is a fact that in the period from when this Government came into office up to 2001-02, defence spending is due to fall by just 3 per cent in real terms. The defence budget does not decline by 3 per cent per year, as some noble Lords have suggested. Instead, the settlement agreed after the Strategic Defence Review included an assumption that 3 per cent efficiency savings would be found each year and that the bulk of those savings would be used to fund our SDR enhancements. That is an enormously important point. In addition, in 1998 we set an agreed level for the defence budget out to 2002. This financial stability replaces the old uncertainty of the old system of annual spending rounds and allows us to plan defence more sensibly.
I have already mentioned the TLAM programme. We will be further enhancing our stand-off precision-strike capability with Storm Shadow, an air-launched cruise missile. The roll-out of the first Apache attack helicopter for the Army was only a few weeks ago. In the longer term we have an ambitious range of new programmes including Eurofighter, the future carrier borne aircraft, the Astute Class submarine, the Type 45 destroyer, the future strategic transport aircraft and two new aircraft carriers. Those will significantly enhance our capabilities. The plans for their procurement are under way and the project teams are working on them.
But looking ahead must not distract us from the capability of our forces today. We are enhancing the capabilities of equipment already in service. Both the air defence and ground attack versions of the Tornado are being improved. The Army recently deployed Challenger 2 to Kosovo; that represents a significant leap in performance and reliability. The personal clothing of our deployed soldiers is better than it has ever been before. And despite what your Lordships might see reported in the media, 92 per cent of that clothing was made in the UK during the last six months for which we have records. That represents nearly £45 million of business placed with UK industry during this period.
Of course, there are problems. We acknowledge that. And where we can we are taking decisive early action to solve them. For example, the difficulties of the SA80 rifle have been well documented. We are taking action to address those difficulties. It is necessary to make two points here. First, these problems have not arisen on or since 1st May 1997. Secondly, they need to be kept in perspective. For example, stories appeared in the media recently about the Lynx rotor-head. Yes, this is a problem. Yes, it affected the availability of the aircraft. But it has not stopped our meeting key operational tasks in the Gulf, the south Atlantic, the Caribbean, Ulster and the Balkans. This Government would never settle for anything less.
Of course, equipment is one thing, but all of those programmes would be worthless if we did not have the right numbers of the right sort of personnel. I am sure that this House does not need reminding of the value of the work they do, 24 hours a day, 365 days a year--often in trying or dangerous circumstances. In the Balkans, the Gulf, in Ulster, people are risking their lives on our behalf. I am sure that the House will join me in expressing admiration for the tireless professional conduct of our Armed Forces and other personnel. The past year has seen numerous examples of their dedication and professional quality. I am sometimes appalled at the glibness with which armchair commentators deliver their verdicts on these issues while ignoring the very real dangers confronting our servicemen and women. The arrogance of those who downplayed the dangers facing pilots over Kosovo last year was quite breathtaking. We must never forget the risks faced every day by our Armed Forces during the Kosovo operations and those who are on operational service today.
I am pleased to say that recruitment is up for all three services over the past year. The Army has had its best intake since the beginning of the 1990s. But the real problem, as noble Lords know only too well, is retention. This is where our Policy for People is so important. We have to recognise that service personnel have families--wives, husbands, partners and children--all of whom deserve consideration too. As a result, we introduced a package of measures to improve the operational welfare of our deployed personnel. We increased their telephone allowance from three to 20 minutes per week so that service personnel can better keep in touch with those at home. We have trialled an "electronic bluey", an electronic version of the traditional forces aerogramme, with forces deployed to the Balkans and the Falkland Islands. We provide Internet facilities at units and family centres around the country and on naval vessels so that as many people as possible can have access to it. And we have introduced guaranteed periods of post-operational tour leave so that personnel can be assured that they will be able to spend time with their families when they return from operations.
It is, though, often the families of deployed personnel who are affected most by service life. We recognised this as a specific problem in the SDR and the resulting service families task force has been a particular success. It is continuing to address--and hopefully overcome--the problems faced by service families that fall outside the scope of the MoD alone. This is truly an example of joined-up government in action across Whitehall to resolve difficulties that have been significant disincentives to service life. In the 18 months of the task force's existence, it has achieved impressive results--from ensuring that the Code of Practice on Schools Admissions now specifically recognises, for the first time, service children to working with the DfEE and DSS to produce guidance that deals with the problems of service spouses, who are often moved around the country at short notice, seeking to claim jobseeker's allowance.
These measures, from new weapons systems to guidance on jobseeker's allowance, are all intended to produce one thing--world class armed forces capable of facing the tasks of today and tomorrow. A year ago, of course, our thoughts were dominated by events in the Balkans. The Kosovo campaign and the subsequent efforts to create a long-term peace in the region have validated the conclusions of the SDR on the need for rapidly deployable, highly flexible forces that we can sustain at a distance and for an extended period of time. That was borne out again in East Timor a few months later. And now, in Sierra Leone, we are seeing exactly the same requirement.
The Kosovo campaign was a remarkable success. It underlined the role that we, as a leading democracy, should be playing in the world along with our partners in NATO and elsewhere. Indeed, I am sure that the strength of collective international will was instrumental in the outcome of the crisis.
Of course there is a great deal to be done in the Balkans. There are no grounds for complacency, as we all know. But we should not understate what has been achieved thus far. We have returned hundreds of thousands of refugees to their homes and are involved in rebuilding an entire society. We never pretended that dealing with such deep-seated tensions was going to be easy, but those who predicted failure for our efforts from the start would do well to reflect on the continuing success of the international community in Bosnia.
Though the lessons of the Kosovo campaign still have to be learned, they do vindicate the SDR. The campaign has also served, I hope, in one important lesson: as a wake-up call to many nations by throwing into stark relief the failings of collective European military capability. Although European nations now contribute over 70 per cent of the forces in KFOR, proportionately their contribution to the air campaign this time last year was a great deal less impressive.
The place that Europe occupies on the world stage should reflect the continent's political and economic weight. However, such an elevated position brings with it obligations and responsibilities. In terms of its military ability to meet those obligations in some crucial areas, Europe simply does not measure up.
Kosovo thus gave an added impetus to the debate on European defence initiated by the Prime Minister. European defence is about improving our collective military capability. It is not about institutions and it is definitely not about creating a "European Army". This has been made clear by the adoption of a challenging, practical target for collective capability--the "Headline Goal", which requires EU member states to be able by the year 2003 to deploy rapidly and to sustain up to 60,000 personnel capable of undertaking the most demanding tasks. Our discussions on this are already well under way. We hope to make further progress at the up-coming EU meetings in June at Brussels and at Feira in Portugal. But I must emphasis to the House again that NATO is, and will remain, the cornerstone and fundamental building block of our defence policy. Our current discussions take place within that framework.
Proper attention to enhancing our defence capabilities should not blind us to the role played by our British defence assets in peacetime to dispel hostility, to build and maintain trust and to assist in the development of democratically accountable armed forces. As part of the SDR, we made "defence diplomacy" a high priority in its own right. That is a wise investment. By supporting arms control, training, education and advice, we hope to spread an appreciation of our standards of democratic control. Like conventional diplomacy, its success is often only measurable in terms of the bad things that do not happen. But we are confident of a real difference being made.
I said at the beginning of my remarks that I did not want to be too retrospective and that I wanted to look forward. I hope that I have been able to achieve that aim. But it would be foolish to pretend that anyone can predict the future. I strongly believe that the Strategic Defence Review provided us with sound guidance for the future shape of defence. It was based on the first principles of a rigorous foreign policy analysis and was very much a policy-led undertaking. From Kosovo and the current debate on European defence to the success of Smart procurement and the crisis in Sierra Leone, experience is vindicating the validity of the SDR's conclusions.
Moved, That this House takes note of the Defence White Paper, published in December 1999 (Cm 4446).--(Baroness Symons of Vernham Dean.)