House of Commons Hansard Debates for 27 Oct 1992

Hansard

House of Commons

Tuesday 27 October 1992

The House met at half-past Two o'clock

PRAYERS

[Madam Speaker-- in the Chair ]

Fife Child Care Inquiry

Ordered,

That there be laid before the House a Return of the Report of the Inquiry by Sheriff Kearney (together with extracts from that Report), set up by the Secretary of State for Scotland under the Children Act 1975, into the child care policies in Fife.-- [Mr. Lang.]

Orkney Inquiry

Ordered,

That there be laid before the House a Return of the Report of the Inquiry by Lord Clyde (together with extracts from that Report), set up by the Secretary of State for Scotland under the Children Act 1975 and the Police (Scotland) Act 1967, into the removal of children from Orkney to a place of safety in February 1991.-- [Mr. Lang.]

Oral Answers to Questions

DEFENCE

European Fighter Aircraft

1. Mr. Page : To ask the Secretary of State for Defence what progress has been made over the evaluation of the European fighter aircraft.

14. Mr. Dykes : To ask the Secretary of State for Defence if he will make a statement on developments in the post-prototype additional studies for the revised EFA project.

15. Dr. Strang : To ask the Secretary of State for Defence if he will make a statement on the European fighter aircraft project.

The Secretary of State for Defence (Mr. Malcolm Rifkind) : In August the four Governments concerned commissioned studies into ways of reducing the costs of the EFA programme ; we also agreed to review the operational requirement in the light of recent changes in the international security situation. The first of these studies has now reported. I am pleased to say that it shows that the production costs can be reduced by up to 20 per cent. while still meeting the military requirement in full ; that further savings, up to 30 per cent., shows also possible ; and that the EFA offers better value for money than the seven alternative designs which were considered.

Mr. Page : I thank my right hon. and learned Friend for that encouraging reply. As important as the European fighter aircraft is, does he agree that it is even more important that the United Kingdom retains its design and build capacity for not only the EFA but EFAs of the

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future, unless this country wants to be reliant upon foreign supply--probably a monopoly--with all the price and cost implications that that would mean?

Mr. Rifkind : Yes, my hon. Friend is correct. If we were to purchase our fighter requirements from overseas rather than continue with the British design and British manufacture, that would make it difficult and complicate the possibility at any future date of fighter aircraft being designed and manufactured in this country.

Mr. Dykes : I thank my right hon. and learned Friend for that answer, which was extremely considered and careful. Will he confirm that what he said in his main and supplementary answers confirms conclusively that this vital and indispensable high-technology defence project must go ahead on the basis of the revised figures and that it will be possible to continue the project without our partners?

Mr. Rifkind : I very much hope that it will be possible to continue with all four countries participating in the programme. Both the Italian and Spanish Defence Ministers have indicated that they are impressed by the savings that have been identified by the report. I recall that Mr. Volker Ru"he, the German Defence Minister, said on 21 September that the new fighter aircraft should cost not more than DM90 million. I hope that he will be encouraged to know that the work that has now been done identifies that that target can be achieved. I hope that, on that basis, Germany also should feel able to agree to continue with the project.

Dr. Strang : Does the Secretary of State accept that almost all the developing technologies that will feature in tomorrow's aerospace business, both military and civil, are part and parcel of the EFA development programme? Although many of us would like to see the companies that are involved in the EFA programme diversify more into civil products, is he aware that the short-term reality is that the continuation of the EFA programme is crucial to the future of our aerospace industry, which is of world class and second only to the United States in turnover?

Mr. Rifkind : That is the case. The arguments for the EFA programme must depend primarily on the United Kingdom's defence requirements, but the industrial implications are also significant. At the height of production about 28,000 jobs in the United Kingdom would be related to the EFA project and about 60,000 throughout Europe.

Mr. Menzies Campbell : May I offer my support to the Secretary of State and congratulations on the way in which he has dealt with this issue, especially in the past two or three days when the provocations must have seemed nothing if not extreme? Can he confirm that in the event of the project's proceeding in such a way that individual countries could, as it were, choose their own form of EFA programme, he is satisfied that the United Kingdom would acquire an aircraft adequate to meet all exigencies and provide a proper basis for any operations in which the Royal Air Force might find itself engaged?

Mr. Rifkind : Most of the work that has been done so far has involved the Rolls-Royce engines and the airframe. The technical study that has now been completed has identified that, even on the basis of current strategic requirements, savings of up to 20 per cent. could be

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achieved with the EFA programme. If we wish to go beyond that and reduce our requirement in terms of the components of the EFA programme--for example, in-flight refuelling or other specific qualities--savings of up to 30 per cent. could be made.

Mr. Bill Walker : When my right hon. and learned Friend examines the EFA programme, will he never lose sight of the fact that the RAF and its pilots of the future must never be committed to battlefield conditions without at least enjoying parity in terms of the aircraft that are likely to oppose them? With Soviet air force equipment finding its way around the world, there is every likelihood that RAF pilots may come up against some of the most sophisticated of former Soviet aircraft.

Mr. Rifkind : Yes, I am conscious of the fact that twice in the past 10 years, unlike some European countries, our pilots have been called upon to use their fighter aircraft in actual combat--in the Falklands and the Gulf. We must be certain therefore that the aircraft available to our pilots are at least as good as those of any potential aggressor. We must also be conscious of the fact that Russia not only possesses sophisticated aircraft but has made it clear that it is willing to export them--including to unstable regimes in the middle east and elsewhere.

Dr. David Clark : When does the Secretary of State expect to receive the review by the four national chiefs of staff of the EFA's military requirements? When will the four Governments concerned subsequently be able to announce that the EFA programme will go ahead--which we on these Benches believe is essential for Britain's military and industrial requirements?

Mr. Rifkind : We expect to receive the chiefs of staff report in three or four weeks. It is likely that a meeting of the four Defence Ministers will be held early in December, but it is not possible to say now whether they will reach a conclusion. I remind the House that the original timetable did not envisage production decisions until the spring of 1993. Matters were brought forward because of the German budgetary problems that were raised in the German Parliament earlier this year. There is still time available, without interfering with the fundamental programme.

Defence Research Establishments

2. Mr. Adley : To ask the Secretary of State for Defence if he will make a statement on the future of the defence research establishments.

The Minister of State for Defence Procurement (Mr. Jonathan Aitken) : As part of our continuing drive for improved value for money, the Defence Research Agency has made a series of proposals to rationalise its operations and reduce costs. They were set out in a consultative document published last month and we expect to reach decisions later this year.

Mr. Adley : I thank my hon. Friend for that answer and for his diligence and courtesy in taking so much trouble to listen to my constituents' point of view. Does he acknowledge that the DRA's bridge- building facility at Christchurch is unique? The breadth of assumptions in the document to which he referred raise grave doubts--which I share--that any savings will be made by moving the

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expensive and irreplaceable capital equipment at Christchurch elsewhere? Will my hon. Friend confirm that the consultation will be genuine, and that my constituents will be given a further opportunity to make their views known to him?

Mr. Aitken : I was glad to visit the Christchurch site with my hon. Friend earlier this year, and I pay tribute to the excellence of the professional skills that its staff have consistently shown. Unfortunately, the site is under-utilised and over-large, and considerable savings have been identified by the DRA's chief executive. I confirm that the consultation exercise is genuine and that I will be pleased to learn the views of my hon. Friend and of his constituents when they see me on 4 November.

Mr. Flynn : Is the Minister aware that the defence research establishment at Aberporth in Dyfed has been used to test fire the Chilean Government's Rayo multiple-launch rocket system? Chile has made it clear that it is willing to sell that weapon to any country in the world that can afford it. Does that not make a nonsense of non-proliferation and of our attempts to prevent deadly weapons falling into the hands of third world and unstable Governments?

Mr. Aitken : It is the British Defence Research Agency, not the Chilean Defence Research Agency, and I do not think that the hon. Gentleman's comments are correct.

Mr. Ian Bruce : I thank my hon. Friend the Minister for also seeing a delegation of my constituents about DRA jobs. Can my hon. Friend say what capital repayment terms or payback period he would expect from moving people around? He will know from his days in private industry that it looks for a two to three-year payback. The Treasury seems to look for something like a 20-year payback, and many of the agency's proposals envisage something like a 10-year payback.

Mr. Aitken : The payback arrangements are governed by the normal Treasury rules, which may provide for a period of up to 25 years. When my hon. Friend visits me with his delegation, I shall certainly listen to the points about repayment that I understand that he wishes to make.

Diversification

3. Mr. Tony Banks : To ask the Secretary of State for Defence what discussions he has had on the establishment of an arms diversification programme.

4. Mr. Bill Michie : To ask the Secretary of State for Defence what representations he has received regarding the establishment of a defence diversification agency.

Mr. Aitken : We exchange views with industry on a wide range of matters, and we participate in the Department of Trade and Industry's regional seminars to help companies to adapt to changing market conditions. However, we have no plans to establish a defence diversification agency.

Mr. Banks : It would have been rather more courteous of the Minister to advise his questioners of the linking of questions 3 and 4.

That was a stunningly complacent reply, even from this politically paralysed Government. Why should defence workers have to pay the price of the peace dividend with their jobs? Does not the Minister recognise that arms

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conversion schemes are vital to both eastern and western Europe? They are vital to eastern Europe if we are to stop it from sliding into political and economic chaos ; they are vital to the west --especially this country--if we are not to put defence workers on the dole. When will the Minister stop fighting the battles of yesterday, and start looking for the opportunities presented by tomorrow?

Mr. Aitken : It is the hon. Gentleman who is fighting the battles of yesterday, and they are battles that have always been lost. If he recollects the days of quangos such as the National Enterprise Board, he will realise that Government attempts to second-guess the elements to which industry should give priority--in connection with any sort of conversion or new policy--usually end with the Government helping to pick losers rather than winners.

Mr. Bill Michie : May I echo the point made by my hon. Friend the Member for Newham, North-West (Mr. Banks)? If the Government cannot at least have the competence and courtesy to inform us when two questions are linked, there is not much hope of their running the country properly.

If the Government can act so swiftly to destroy 30,000 mining jobs, why can they not act equally swiftly to ensure that jobs are created in the engineering and defence industries to prevent further unemployment?

Mr. Aitken : I am sorry that the hon. Gentleman and his hon. Friend the Member for Newham, North-West (Mr. Banks) did not receive prior notification of the linking of the two questions--although I hardly think that it is an error of quite the magnitude that they have suggested.

The Government are spending £9 billion a year on the equipment programme. By any standards, that figure makes the Ministry of Defence British industry's biggest customer. Ours is a strong and credible industrial strategy, and--despite hard times--many companies are still managing to make good products and good profits.

Mr. Batiste : Is my hon. Friend aware that the last thing that successful defence contractors want is to be told by the Government how to run their businesses? What they need is good information about the nature of the Government's long-term plans, and plenty of time in which to make any adjustments that may prove essential to the planning of their businesses. Will my hon. Friend commit himself and the Government to the maintaining of good communications with the defence contractors, to help them to make long-term plans?

Mr. Aitken : My hon. Friend has made a good point. We are renewing our efforts to establish a strong and open dialogue with industry. In recent weeks, conferences such as the chief of defence procurement's suppliers' conference and the Seafacts '92 conference have provided excellent information about advance intentions in regard to defence spending, and about the current trends. All the industrialists whom I have met have been very satisfied with the amount of information that is now being provided. It has enabled them to make new plans in connection with diversification and other subjects.

Mr. Burns : Is my hon. Friend aware that, in the past few months, there have been substantial job losses at the GEC--Marconi companies in Chelmsford, which rely heavily on defence contracts? May I have an assurance

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that, where it is feasible, the British Government will place their contracts with British companies to protect British jobs?

Mr. Aitken : I can already tell my hon. Friend that more than 90 per cent. of Britain's £9 billion equipment budget is spent with British companies. That is a good record. If we were to seek deliberately to exclude foreign companies from business, we should in turn be excluded from the foreign export markets in which we are so remarkably successful. A balance must be struck, but I share entirely the sentiment expressed by my hon. Friend.

Mr. Foulkes : All the Minister has done is to repeat what was said in June. Have the Government not learnt from the de ba cle over coal that market forces are not very good at determining an industrial strategy? If the peace dividend is to result in new jobs and new wealth for this country instead of more and more unemployment, the Government need to involve the unions and industry in devising an industrial strategy to replace defence jobs. The best way to do that is to set up a defence diversification agency.

Mr. Aitken : All that the hon. Gentleman is doing is to repeat the same old themes that his party produced at the time of the groundnut scheme and of the National Enterprise Board. If he thinks that politicians can do a good job by telling companies such as GEC how to diversify, he needs to think again.

Defence Equipment

5. Mr. David Martin : To ask the Secretary of State for Defence how many jobs in the United Kingdom are dependent on defence equipment expenditure.

Mr. Aitken : We estimate that about 350,000 jobs in the United Kingdom are dependent on defence equipment expenditure, including those dependent on defence sales overseas.

Mr. Martin : I know that my hon. Friend does not need to be reminded yet again by me of the importance of defence expenditure to Portsmouth, so can he assure me that he will continue to remind the public as well as the defence industry that any alternative policy is one of swingeing cuts in defence expenditure, such as was proposed and passed yet again at the Labour party conference this year, that the Liberals are little better and that that policy is very much against the defence interests of this country?

Mr. Aitken : My hon. Friend is right, as he represents a Portsmouth constituency, to remind us of the extraordinary resolutions passed at this year's Labour party conference. If those resolutions, which call for devastating defence cuts, were ever to be translated into political reality, they would mean the disappearance of at least a quarter of our armed forces and the redundancy of at least 100,000 workers in defence industries. Only this Government have a strong and credible policy for Britain's defences.

Ms. Rachel Squire : Is the Minister aware that the largest industrial complex in Scotland is Rosyth royal dockyard? Is he in particular aware that 4,200 direct jobs and many hundreds more indirect jobs depend upon the assurances that the Government and their Ministers have

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given since 1985? In particular, will he remind the present Chancellor of the Exchequer of what he said in 1985 : that the Government's commitment to Rosyth was clear from the massive investment that they were making in the dockyard to carry out the Trident refit? Will the Minister therefore give Rosyth the assurance of a future and its work force the assurance of jobs for all of them?

Mr. Aitken : I am well aware of the concerns that the hon. Lady expresses. Both my right hon. and learned Friend the Secretary of State for Defence and I have visited Rosyth and Devonport in recent weeks. No decision has yet been taken. Any press speculation and reports that have appeared are wrong. We are considering the matter carefully and we shall reach and announce a decision in due course.

Sir Geoffrey Johnson Smith : My hon. Friend will be aware that the German Defence Minister came to this country not many weeks ago to discuss the future of the EFA programme. In the light of the startlingly good progress that has been made in reducing the cost of this worthwhile aircraft, can my hon. Friend tell us what the reaction of the German Defence Minister has been to that progress?

Mr. Aitken : I should be unwise to second guess the reactions of the German Defence Minister, but I have no doubt that he has carefully and thoughtfully noted the fact that the new cost estimates are exactly in line with the requests that he made for a 30 per cent. reduction in the cost of the aircraft. I take considerable encouragement from the results that have been produced.

Mr. Wigley : Does the Minister accept that the expenditure to which he referred, which will generate 350,000 jobs and £9,000 million worth of expenditure, will have a considerable economic effect? Is he aware that more than 50 per cent. of that expenditure will be made in south-east England, but less than 2 per cent. in Wales? Is not that a hidden regional policy working against areas outside the south-east?

Mr. Aitken : I do not accept the hon. Gentleman's breakdown of the figures. My impression, without being able to check the figures, is that a much more substantial percentage of British defence spending goes to key aircraft factories, particularly in the north-west of England. I do not think that the imbalance is anything like as bad as he suggests. There is no regional policy in defence spending. We place our contracts on the basis of value for money and obtaining the best products at the best prices.

Mr. Streeter : Will my hon. Friend confirm that the all-important contract for maintenance work on the Trident boat, to which he has referred, will be placed on the basis of what is best for national security, cost effectiveness and value for money, and that, accordingly, it will be awarded to Devonport Management Ltd., on whose future many thousands of jobs in Plymouth depend?

Mr. Aitken : My hon. Friend is a forceful advocate of Devonport, just as the hon. Member for Dunfermline, West (Ms. Squire) is a forceful advocate of Rosyth. My right hon. and learned Friend the Secretary of State and I are ensuring that we take a fair and even-handed approach to the problem, which I hope will result in a fair and just decision.

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Dr. David Clark : On jobs and defence, does the Minister appreciate that Labour believes that there are overwhelming strategic demands for the retention of the naval dockyards at both Rosyth and Devonport? Will he assure the House that no decision will be made to close either of the yards on narrow, short-term financial and ideological calculations?

Mr. Aitken : I can certainly give the hon. Gentleman the assurance that we shall take the broadest strategic view, although value for money is a strong and important consideration. I assure him that the decision will be a fair and carefully considered one.

National Employers Liaison Committee

6. Mr. Brazier : To ask the Secretary of State for Defence what progress has been made in the establishment of regional branches of the National Employers Liaison Committee ; and what roles he perceives these as playing in the enhancement of the reserve forces.

The Minister of State for the Armed Forces (Mr. Archie Hamilton) : Contact at local level between employers and the reserve forces is via the 14 regional, territorial, auxiliary and volunteer reserve associations, each of which has its own committee to deal with employer support.

Those regional and local contacts provide valuable opportunities for employers to learn more about the reserve forces by attending briefings and by visiting reserve forces training and for their executives to take part in special weekend exercises known as executive stretch.

Mr. Brazier : Will my right hon. Friend join me in congratulating the NELC on the remarkable job that it has done, on a relatively small budget, in attracting employers' support for the reserve forces? Does he agree that there is considerable scope for the NELC to keep alive the interest of the business community in defence issues in these difficult and dangerous times?

Mr. Hamilton : I acknowledge my hon. Friend's comments. We value our links with the NELC highly, and it is currently involved in discussions on the mix of the regular-reserve forces. I certainly support that, and agree that, as we may become more dependent on reserves, links with the NELC are very valuable indeed.

Army Manning and Record Offices

7. Mr. Bayley : To ask the Secretary of State for Defence what proposals he has to conduct a comparison of the efficiency and cost effectiveness of the services provided by the Army's manning and record offices and regimental pay offices in York, and of other Army manning and record offices and regimental pay offices, before he decides about the siting of any integrated Army personnel centre outside London.

Mr. Archie Hamilton : A study is currently examining the efficiency and cost-effectiveness of establishing an integrated Army personnel centre outside London. That would involve the collocation of the adjutant general and military secretary's headquarters and their staff, with all the manning and record offices and regimental pay offices. The study is looking at the operation as a whole and does not entail a comparison of the relative efficiency of existing offices.

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Mr. Bayley : When the Minister takes his decision, will he give due weight to the fact that already this year it has been announced that 1,200 Ministry of Defence civilian jobs in Harrogate will go, while 250 civilian jobs at the Royal Electrical and Mechanical Engineers' workshop at Strensall have also gone? The losses come on top of a reduction from 9,500 to 5,500 in the number of Ministry of Defence civilian jobs in Yorkshire in the past decade.

Does the Minister accept that a decision to lose further civilian jobs at York will be met by anger and disbelief in a city with a proud military tradition and in a county that has contributed so much to the military over the centuries?

Mr. Hamilton : I can tell the hon. Gentleman that we are studying proposals to collocate all the offices in one place. We are thinking in terms of about 1,500 employees in 200,000 sq. ft. of office space. We are considering a number of locations, including York. We have the advantage that if we locate the new office in a place where we already have an office, we shall have a core of workers who will help to establish the new, much bigger collocated offices. No decisions have yet been taken and we shall consider all locations around the country.

Mr. John Greenway : The closures of the Harrogate and Strensall Ministry of Defence facilities have been greeted with dismay. Many people who have served the Ministry of Defence and the armed forces well over many years are pinning their hopes on the relocation of the integrated personnel centre to the York area. If York is good enough as a centre for the Department for Education, for the Ministry of Agriculture, Fisheries and Food and for many other commercial firms, it should be good enough for the Ministry of Defence.

Mr. Hamilton : I hope that I have already made it clear to my hon. Friend that there is no prejudice against York. We are considering a number of other locations as well, as is only fair.

Mr. Loyden : What criteria does the Minister use when he makes such decisions? Does he take into account the level of unemployment in the area and does he give the necessary information to enable the trade unions to make an objective judgment about whether the Ministry is right or wrong?

Mr. Hamilton : The basic criterion we adopt is that of value for money. Of course, we taken into account the local conditions of unemployment, because that improves our chances of recruiting people locally to man the offices. There are many different considerations in the process. Once we come to a proposal, we put it to the trade unions. There is always a consultation period during which the trade unions can put forward their ideas about how they see us going forward.

Cambodia

8. Mr. Matthew Banks : To ask the Secretary of State for Defence if he will report on progress made by United Kingdom forces in the United Nations peacekeeping operation in Cambodia.

Mr. Rifkind : As part of the United Nations transitional authority in Cambodia, the United Kingdom has provided 38 military observers, 13 mine clearance training experts and 70 Royal Navy and Royal Marines personnel to act as

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naval monitors. They are making a significant and high-quality contribution, in difficult and demanding circumstances, towards the success of the United Nations operation in Cambodia.

Mr. Banks : Does my right hon. and learned Friend agree that this is a further and very welcome example of the commitment of the United Nations throughout the world to achieving a major peacekeeping role?

Mr. Rifkind : Yes, my hon. Friend is correct. In 1991, there were only 11,500 United Nations troops deployed in peacekeeping operations. Today, there are more than 51,000. The United Kingdom and many other countries are performing a far more enhanced role in contributing towards helping to deal with countries with significant problems of instability or internal strife.

Ex-Service Men (Housing)

9. Mr. Paice : To ask the Secretary of State for Defence what representations he has received regarding housing needs for redundant service men.

Mr. Archie Hamilton : My right hon. and learned Friend has received a number of representations regarding the housing needs of redundant service personnel.

Mr. Paice : Is my right hon. Friend aware that many local authorities, including South Cambridgeshire district council, do not believe that having been resident in married quarters in a district is sufficient contact with the area for the people concerned to be accepted on to the housing waiting list? As a result, when service men are being made redundant from bases in my constituency, they find themselves with nowhere to go. Will my right hon. Friend look again at the housing position, especially bearing in mind the fact that many of the bases have many vacant quarters on them, and find a way forward so we can ensure that service men who are being made redundant, many of whom have served in the Gulf, are not left homeless without anywhere to go?

Mr. Hamilton : Yes, although I hope that the situation is not as bad as my hon. Friend suggests. We are doing all that we can to make available such married quarters as we have to service men who are due to be made redundant, bearing in mind the fact that we always try to organise matters so that service men who are to be made redundant spend their last six months in the United Kingdom. We are using our married quarters for that purpose.

Mr. Eric Clarke : Is the Minister aware that, compared with the figure for the United Kingdom as a whole, a very large proportion of the Scottish population is involved in the armed forces, and that the problem of demobbed service men is therefore a serious one? My hon. Friend the Member for Motherwell, North (Dr. Reid) and I had a meeting with representatives of the CO Scottish Command at Glencorse barracks in my constituency, who proposed the formation of an organisation that could be funded by the Government to buy houses and take over Ministry of defence properties to provide rented accommodation for service men which they could eventually purchase. That could be a way forward. As those representatives said to us, the present demand for houses is only the tip of the iceberg.

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Mr. Hamilton : We already make married quarters available for service men to buy at discounted prices. We are also making it possible for service men to part-purchase private properties and pay rent on the remainder. We are also reaching deals with housing associations, and are negotiating the transfer to housing associations of some 1,100 married quarters. We would keep a number of the allocations of those premises for ex-service men or service men who were about to leave. We have addressed the problem, and a lot of effort is being put into it.

Mr. Cormack : Does my right hon. Friend realise that he could solve the problem at a stroke if he would do the decent thing as regards the Staffordshire regiment, and have regard to the needs of the infantry? If he would think again about reprieving the Staffordshires and the Cheshires, we would not have so many redundant service men.

Mr. Hamilton : I do not quite follow my hon. Friend's logic when he says that if we did not amalgamate the Staffordshire and Cheshire regiments, we would have no redundancy problems. The fact is that we have made decisions about the amalgamations and there is no reason to believe that they will not go ahead.

Mr. Martlew : On 28 April the Minister gave the House an assurance that ex-personnel returning from Germany would be given accommodation for themselves and their families. Does that promise still stand, and is the Minister aware that many ex-service men will be unable to buy their own homes because they will come straight out of the armed forces on to the dole queue? What is needed is low-cost rental housing. What does the Minister propose to do to tackle that problem?

Mr. Hamilton : I congratulate the hon. Gentleman on the occasion of his first contribution on defence matters from the Opposition Front Bench. I am sure that we shall be hearing from him in the future. Let me go back over what I have said. It is not true that service men cannot purchase their own houses. Many can do so, because the serious amounts of redundancy money that they receive can go some way towards enabling them to purchase their own homes. In addition, the deals that we are doing with housing associations will make it possible for people to rent premises through those associations when they leave the services. We will keep a number of the allocations available.

Mr. Butcher : Does my right hon. Friend agree that the best way of solving the problem of housing redundant soldiers is to make fewer soldiers redundant, and that, given that the forces of reaction are gathering pace in Russia and that southern and south-eastern Europe are reverting to tribalism, this is not the time to pursue "Options for Change" with the vigour with which it has been pursued so far?

Mr. Hamilton : I hope that my hon. Friend will agree with me that one reason for our having large forces was that we were opposed by the massed forces of the Soviet Union and the Warsaw pact, both of which have now disintegrated. Given that the main strength opposing us had to some degree disappeared and had certainly been ameliorated, it was only right that we should look again at the level of defence expenditure that we were incurring.

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