Type 31 Frigate

Lord Touhig Excerpts

Monday 3rd April 2017 Lords Chamber

[Earl Howe]

My Lords, my noble friend makes some extremely important points about the steel industry in this country. It is worth reflecting that if one looks at the Queen Elizabeth carrier programme, 88% of the steel that went into that carrier programme was from British steel mills, which indicates that we are competitive in world terms.

[Lord Touhig (Lab)]

My Lords,

“Our national security and our economic security go hand-in-hand”.


I am not quoting from the Prime Minister’s letter to Donald Tusk—those were the opening words of the MoD’s single departmental plan in 2015. Promoting defence exports was the clear objective. Sir John Parker, whom the Minister has already quoted, and who wrote the national shipbuilding strategy, said that not enough went into the export market for ships, and that the Type 31E would have export potential. He added that they should be built “urgently”. Is it not therefore a no-brainer? Should we not follow Sir John’s advice, build the ships our Navy needs now, and gain the export opportunities for British shipbuilders?

[Earl Howe]

My Lords, Sir John made some very compelling recommendations, which we are seriously addressing. Broadly, they were to inject greater grip and pace into procurement and construction of ships, to make the Government a better customer, to make industry a stronger and more efficient supplier, and to create scope for exports in warship building, thus feeding into the prosperity agenda. Those were all very sensible recommendations.

Armed Forces Act (Continuation) Order 2017

Lord Touhig Excerpts

Tuesday 21st March 2017 Lords Chamber

[Lord Touhig (Lab)]

My Lords, the House will note that I am not my noble friend Lord Rosser. I apologise at the outset for my part in any confusion caused to the very excellent staff who drew up the speakers list. The House will not be denied my noble friend’s comments; he will speak at the end of the debate.

Seventy years ago last month, on 24 February 1947, the British ambassador to Washington was instructed by Labour Foreign Secretary Ernest Bevin to deliver a memorandum to George Marshall, the American Secretary of State. The memorandum made it clear that Britain’s economic position would no longer allow her to continue as the reservoir of financial military support to Greece and Turkey. The shockwaves it produced throughout the Truman Administration were just what Bevin wanted. He believed that, following the end of the Second World War, the United States was in Europe but not yet of it in defence terms. His memorandum forced the US Government to take a decision that they had been unwilling to make up to that time. It led to the creation of NATO, and it was a Labour Foreign Secretary who was the midwife at that birth.

Moreover, it was also Bevin who conspired with Prime Minister Clem Attlee to create Britain’s independent nuclear deterrent, against opposition from some hard-left members of the Labour Party—alas, so far as our nuclear deterrent is concerned, some things never change. The decision was taken in secret by a small Cabinet committee. Arguing that Britain should have the atomic bomb, Bevin told the committee:

“We’ve got to have this thing over here, whatever it costs. We’ve got to have the bloody Union Jack on top of it”.


Labour has always had a proud record on defence when in government. Indeed, the Defence Secretary, Michael Fallon, told The House magazine last year:

“It was the Labour Party that gave us the two most important pieces of our defence architecture today—NATO and our independent nuclear deterrent. It was the Labour Government who committed to the 2% and the Labour Government who was the founding member of NATO—every time Labour has been in Government they have taken a responsible view of defence”.


Labour in government has committed resources to the defence of Britain, which this Government have failed to do. In particular, we spent on average 2.3% of GDP when we were in office. The present Government have failed to match this, preferring instead to use creative accounting to massage the figures by including some £1 billion of pensions in the 2%. Will the Minister’s Government match my Government in this? As we urge other NATO states to spend 2%, we would have more credibility if we were genuinely spending that amount ourselves.

The SDSR 2010 was the most misnamed of government publications. In the foreword, David Cameron and Nick Clegg wrote about bringing the defence budget into balance. They meant cuts. They offered a sop by saying that defence and security would contribute to the deficit reduction on a lower scale than other departments. That document was not about our strategic defence and security; it was about cutting back on defence spending. It was a document promoted not by the Ministry of Defence but by the Treasury. It talked of reconfiguring our Armed Forces. Having worked for some time as Gordon Brown’s PPS, I know that is Treasury-speak for cuts.

Today our Army is smaller than the one we put in the field against Napoleon. The latest figures show an Army of just 75,840 personnel. The Royal Navy is reduced to 19 ships, of which six have propulsion problems and two are laid up in Portsmouth because they are short of crew as a result of spending cuts. On top of this, we have no aircraft carriers. I look forward to the Government’s response to the National Audit Office report published last week on the carriers. We have no marine patrol aircraft and there are currently only seven RAF fighter squadrons. Two of these exist only because the life of the Typhoon has been extended until 2040.

There is an overdependence on recruiting reservists. Despite millions of pounds spent on recruitment, targets for all three services have been missed. Morale is poor. Some 54% of service personnel are dissatisfied with service life. The most valuable asset that Britain’s Armed Forces have are the men and women who serve. They have had their pay frozen and their pensions reduced, and their accommodation is in need of major investment. According to the 2016 continuous attitude survey, almost half believe that the quality of their accommodation has fallen. The Armed Forces’ Pay Review Body has revealed that almost every group spoken to believed that their pay increases were unreasonable. The 2016 survey revealed that only one in three of our Armed Forces personnel believed they were valued and just one in three planned to stay as long as they possibly could.

The failings I have identified are not the responsibility of our Armed Forces, but the consequence of government policy of cuts, mismanagement and poor forecasting. Concern at the state of our Armed Forces is not the exclusive interest of this side of the House. In recent debates, Conservative, Liberal Democrat and Cross-Bench Peers have expressed their concerns.

While continuing my criticism of the Government, I want to say that the whole House values the work of the noble Earl who has constantly demonstrated his commitment to the well-being of our Armed Forces. He comes to the Dispatch Box time and again, often to defend the indefensible, which he does with such great style that he is almost convincing. Those of us who are the Government’s critics in this House have nothing but admiration for him personally and value the fact that he listens and responds. For this, we are all grateful.

The SDSR 2015 was a missed opportunity. It failed to give a vision of the future which could have given us confidence that the Government were tackling the problems that they had created in 2010. There is a strong case for revisiting SDSR 2015. A revised SDSR would afford the opportunity to look afresh at Britain’s position in the world. We, on this side, happen to believe that defence and foreign policy are two sides of the same coin. The SDSR 2015 should have been based on our key foreign policy objectives. It was not. These are bound to be revised now, as a result of Brexit, and this will impact on defence. If the Government shared that view, we would not have the Foreign Secretary going around the Middle East proclaiming:

“Britain is back East of Suez”,


and even announcing a military spend of £3 billion over the next 10 years—all before the Ministry of Defence has published its Gulf strategy.

We cannot have major foreign and defence policy decisions made on the wing. Of course we have a role to play in the Middle East, but we have interests in the Far East and around the globe. We are a maritime trading nation. Keeping open the world’s shipping lanes and being able to protect and defend our global interests are essential. We are—and remain—a world power, one with a nuclear capability available to deter and protect. If we have clear foreign policy objectives, linked to defence, we can answer the question: what do we want our Armed Forces to be capable of doing? It is not rocket science. It is about asking the basic, obvious questions about what we want from our Armed Forces.

My noble friend Lord Robertson of Port Ellen most skilfully set out how such tasks could be approached. In a speech in 2015 about the NATO objective of spending 2% on defence, he said that,

“the 2% only makes sense if it is spent on the right things—deployable troops, precision weapons, logistics and specialist people”.

This simple and basic approach sums up what needs to be done. The SDSR 2015 could have set out those objectives clearly, made provision for the resourcing and funding and included the defence-industrial strategy. Perhaps I may commend this booklet, A Benefit, Not a Burden, which clearly sets out the case for the strategic value of Britain having a defence-industrial strategy. I am grateful to the noble Lord, Lord Sterling, for drawing my attention to it. In this debate, I look forward to listening to and learning from the noble Lord, Lord Levene, whom I suspect might have a different view.

We face challenges not known by previous generations. Challenges posed by cyber have the capacity to change warfare into something we have never known or imagined. The Government are right to invest in cyber, but we must be willing to use it in an offensive, as well as defensive, mode if we are determined to deter. The other threat is from terrorist groups such as ISIL, which would turn high streets anywhere into a war zone. Some of the most evil and barbaric acts witnessed by humanity have been carried out by religious extremists who are in fact betraying the beauty of their faith.

We face a resurgent Russia, which has spent billions modernising its forces. We face an economically ambitious China, making dubious territorial claims in the South China Sea and increasing defence spending, and we face the evil regime in North Korea, which enslaves its people and threatens the peace of the region. We face the crisis of failed states such as Libya and Syria and the awful consequences of civil war, which has forced millions to flee and try to get to Europe.

NATO remains the bedrock of our defence, and I hope that at the May summit, Britain will make it clear to President Trump that, while we agree with him that all states should spend 2% of GDP on defence, NATO is not obsolete, irrelevant or out of date, as he said during his election campaign.

The first duty of the British Government is the care and welfare of our people, and at the heart of that is our defence. For that reason, we have no hesitation today in supporting the Armed Forces Act (Continuation) Order, to which the noble Earl referred in opening the debate.

Coming full circle, I return to Ernest Bevin. His shock tactics led to the creation of NATO, but it also led directly to the Truman doctrine of 12 March 1947. For me, the most powerful part of the President’s statement remains true today. He said that,

“totalitarian regimes imposed on free peoples, by direct or indirect aggression, undermine the foundation of international peace”.

The world is no safer today than it was in 1947, and we must therefore be ever vigilant.

HMS “Queen Elizabeth”

Lord Touhig Excerpts

Thursday 2nd March 2017 Lords Chamber

Asked by

[Lord Touhig]

To ask Her Majesty’s Government on what date the aircraft carrier HMS “Queen Elizabeth” will begin sea trials.

[The Minister of State, Ministry of Defence (Earl Howe) (Con)]

My Lords, HMS “Queen Elizabeth” is currently undertaking harbour trials as part of her test and integration phase. Sea trials will begin on successful completion of this phase.

[Lord Touhig (Lab)]

My Lords, we were told in the review of the SDSR that the carrier HMS “Queen Elizabeth” would begin sea trials in the spring. Alas, in the words of Ella Fitzgerald, “spring will be a little late this year”, because Ministers now say that that will happen in the summer. But lo and behold, just two weeks ago, when my noble friend Lord West of Spithead asked whether summer was,

“defined as … from the summer solstice to the September equinox, or … June to August”,

he was told by the Minister that summer “was not defined” and that rather, it was a,

“broad indication of the likely timetable”.

This milestone in Britain’s maritime history is turning into a farce. I invite the Minister to come clean, tell us what has caused the delay and give us a firm date for the sea trials.

[Earl Howe]

My Lords, perhaps I can clarify the timetable a little bit. “The summer” means “a little later than shortly”. To address the substance of his question, this is about the need to test systems. The Queen Elizabeth class carriers are the largest and most complex warships ever built in this country. It is essential that we thoroughly test the ship’s many complex systems before she begins sea trials. None of the issues now being tested will affect acceptance of contract of HMS “Queen Elizabeth” later this year. The work is within the tolerance that we had anticipated in the contract schedule.

Defence: Industrial Strategy

Lord Touhig Excerpts

Monday 27th February 2017 Lords Chamber

[Earl Howe]

My Lords, I agree with my noble friend that part of the work we have to do, and are doing, is looking at how we can optimise the strategic interaction between the Ministry of Defence and industry, including how we make defence a more attractive customer for people who do not traditionally supply to the MoD, such as small and medium-sized enterprises. It is about creating simpler processes and a more competitive UK supply chain. Of course, we would like to source from companies and organisations in this country, but we have to make it as easy as possible for them to deal with us.

[Lord Touhig (Lab)]

My Lords, last Tuesday, Labour’s shadow defence team, together with my noble friend Lord West of Spithead, held a workshop with representatives of some 20 defence companies. The clear message from that event was that a defence strategy was the best way to streamline procurement and give a clear vision for the future to the defence sector. Have the Government had similar discussions with industry experts on the need for such a strategy? If not, may I suggest that they do? They may learn something.

[Earl Howe]

My Lords, I do not think we need to get too hung up on the word “strategy” as opposed to “policy”. The key questions, it seems to me, are how we can make UK industry more competitive, how we can drive innovation, how we can drive skills and, as I have said, how best to ensure that industry can engage productively with government and that government itself is a more intelligent customer. These are the questions we should address and I am sure they are the ones industry wants us to address.

NATO: Member State Spending

Lord Touhig Excerpts

Wednesday 1st February 2017 Lords Chamber

Asked by

[Lord Touhig]

To ask Her Majesty’s Government what progress they have made in discussions with other NATO countries about ensuring that all member states commit to spending two per cent of GDP on defence.

[Lord Touhig (Lab)]

My Lords, in the two weeks since he was sworn in as the 45th President of the United States, Donald Trump has been in the news every day. An anxious world has sometimes been stunned by his words, whether spoken or tweeted in the middle of the night. But I recall the words of another United States President, who said:

“To be prepared for war is one of the most effectual means of preserving peace”.


Those words were spoken by America’s first President, George Washington, in the very first State of the Union Address in 1790. I am not suggesting that a conflict is looming, but I echo Washington in saying that to keep the peace, we must be always be prepared for conflict. Do I believe that Britain is prepared for a sudden and unexpected conflict? Sadly, my answer is that I have serious doubts, and I am not alone in that, as I will show in my remarks.

As I stand at the Dispatch Box this evening, one word comes to mind about the Government’s commitment to the NATO 2% spend: disappointed. I am disappointed that our Government are playing fast and loose with defence spending. The Government continue to say that we have the fifth largest defence budget in the world and that we are one of five nations out of 28 NATO members committed to the 2% target. However, in the SDSR 2015, a new creative accounting was orchestrated by the Government so that they could reach that 2%. Professor Malcolm Chalmers, the deputy director at RUSI, told the Defence Select Committee that the Government had included £820 million on war pensions, £400 million on UN peacekeeping and £200 million on pensions paid to retired civil servants. The committee concluded that this “redefinition”, as it described it, of defence expenditure undermined the credibility of the Government’s assertion that the 2% represents a significant increase in defence spending. The Government responded by saying that all they were doing was capturing all spending contributing to our defence in the 2%. I am certainly interested to see whether the Minister will explain how paying pensions to civil servants contributes to Britain’s defence.

On these Benches we welcomed the Government’s commitment to spending 2% of GDP on defence. However, how can we persuade other member states to reach that 2% target if we are using creative accounting to reach that goal ourselves? Let us not forget that 2% is the minimum spend, not the maximum. It must concern all of us that the other 23 members of NATO are in no rush to increase their defence budgets when we see Russia spending $90 billion and China spending $150 billion on modernising their forces. Russia has placed a number of nuclear-capable missiles in Kaliningrad, on the border of Lithuania and Poland. That is but one measure of the challenge that we and NATO face.

I have been encouraged by the comments attributed to US Defence Secretary James Mattis, who has reassured our Defence Secretary of the United States’s “unshakable commitment to NATO”. I was more encouraged when, following her meeting with President Trump, our Prime Minister spoke of his unshakable commitment to NATO, although I would like to have heard the man himself say it. I remember candidate Trump’s comments about NATO in the election campaign. He said then:

“We have many NATO members that aren’t paying their bills … Many NATO nations are not making payments, are not making what they’re supposed to make”.


The new President has been busy signing executive orders almost every day since he walked into the White House. I hope we will not wake up one morning to see that he has tweeted in the middle of the night his intention to sign an executive order reducing American support for NATO.

Our NATO partners have to wake up to the fact that the Americans may well do things differently under this President and must take seriously his challenge about their GDP spend on defence. NATO is the bulwark of our defence and the United States plays the leading role. At the start of January, NATO began deploying 4,000 troops to the Baltic states. Britain, rightly, in support, committed 800 personnel to Estonia, four Typhoon aircraft in Romania and 150 personnel to Poland. A resurgent Russia is testing our resolve to deter and defend. Only last week, the Royal Navy was tasked with escorting the Russian aircraft carrier and its support group through the channel. We are also having to monitor increasing numbers of Russian submarines in the waters around the UK, and we do so without any marine patrol aircraft. In addition, we are seeing more and more Russian military aircraft flying dangerously close to our airspace. There is much more we have to do and my concern is that the Government, driven by a passion for an austerity policy which has failed miserably, are not sufficiently engaged to meet these challenges, and nor will they ever do so without increased defence spending, at least to a genuine minimum spend of 2% of GDP.

No one put it better than my noble friend Lord Robertson of Port Ellen, who said in a speech in 2015 that,

“the 2% only makes sense if it is spent on the right things—deployable troops, precision weapons, logistics and specialist people”.

He was quite right on that. When he opened the defence debate in this House on 12 January, he warned that we were sleepwalking into a potential calamity. Like my noble friend, I worry about our ability to meet the unforeseen.

I think that all the more having read the report from the Centre for Historical Analysis and Conflict Research. Based at Sandhurst, the centre examines past and current operations, carries out analyses and research, and acts as the Army’s think tank. The participants, some of the Army’s brightest minds and all serving officers and soldiers, are encouraged to speak out of turn to help inform our approach to requirement setting and procurement and to influence the perception of the Army. The report said that we may not be facing an immediate military threat but that there are several scenarios in which our allies may face a threat and we may need to engage. It asked the question: is the British Army ready if we become engaged in a war that we did not foresee? The soldier-scholars concluded:

“If one merely sees preparedness through net manpower and kinetic force capacity, the answer might be a simple ‘no’: the British Army is at its smallest and has faced years of budget cuts”.


I make no criticism of the Army, but I am critical of the way the Government have starved our Armed Forces of investment. We can have the latest equipment at our disposal but, if we do not have the manpower, how do the Government expect our Armed Forces to defend the liberties that we uphold?

I am proud of the fact that during the 13 years of the Labour Government, we spent an average of 2.5% of GDP on defence. This excluded the cost of conflicts in Iraq and Afghanistan, where expenditure was met from the Treasury reserve and not the defence budget.

In a recent Written Question, my noble friend Lord West of Spithead asked the Government whether there had been any consideration of reviewing the decision made by the previous Chancellor on funding for the new Dreadnought nuclear submarines. He and I agree that the funds should come from the contingency controlled by the Treasury and not from an overstretched defence budget. The Minister responded by saying that the funding of the new submarines—around £31 billion—would remain part of the defence budget. This is disappointing, and yet another example of the way in which this Government are stretching a limited defence budget and, at the same time, shamelessly massaging the figures to give the impression of meeting the 2% spend of GDP on defence.

Britain and the United States must be at one, doing everything possible to persuade our NATO partners to meet the 2% pledge they made in 2014. If Britain is to join the US in taking a moral lead, we can do so only if we spend a genuine 2% of GDP on defence.

NATO: Eastern Flank

Lord Touhig Excerpts

Monday 30th January 2017 Lords Chamber

[Earl Howe]

The noble Lord is quite right. Article 5 is one of the key components of the NATO treaty and all allies are cognisant of what that means should any member of the alliance be subject to an armed incursion or attack.

[Lord Touhig (Lab)]

My Lords, I endorse entirely the point made by my noble friend Lord West that we should keep a dialogue with the Russian Government open, and the NATO-Russia Council is perhaps a vehicle for doing that. The deployment of British forces in Estonia and Poland is purely defensive, but can the Minister assure us that this will be kept under review, and should it be the case, we would have the capacity to increase the number of troops we have placed there? Does he further agree that no one at all in this country or abroad should be in any doubt that if NATO invoked Article 5, we will respond if any of our allies in the Baltic are threatened?

[Earl Howe]

The noble Lord is absolutely right. The enhanced forward presence is undoubtedly a major step forward in NATO’s deterrence posture. These are forces that will reassure our allies. They will defend Estonia, Latvia, Lithuania and Poland, another NATO territory, and we believe that they will deter Russian belligerence on an enduring basis. The forces are designed to be defensive but combat-capable in order to show the Russians that should they be rash enough to contemplate any incursion into the Baltic states, that will be met with an appropriate response from NATO.

Trident Missile Test

Lord Touhig Excerpts

Monday 23rd January 2017 Lords Chamber

[The Minister of State, Ministry of Defence (Earl Howe) (Con)]

My Lords, I shall now repeat in the form of a Statement, the Answer to an Urgent Question given in another place by my right honourable friend the Secretary of State for Defence on the test firing of a Trident missile.

“On 20 June, the Royal Navy conducted a demonstration and shakedown operation, designed to certify HMS “Vengeance” and her crew prior to their return to operations. This included a routine unarmed Trident missile test launch. Contrary to reports in the weekend press, HMS “Vengeance” and her crew were successfully tested and certified as ready to rejoin the operational cycle. We do not comment on the details of submarine operations, but I can assure the House that, during any test firing, the safety of the crew and public is paramount and is never compromised.

Prior to conducting a Trident test fire, the UK strictly adheres to all relevant treaty obligations, notifying relevant nations and interested parties. On this occasion, the chairman of the Defence Select Committee, the opposition defence spokesperson, and the chair of the Public Accounts Committee were informed in advance.

I can assure the House that the capability and effectiveness of the UK’s independent nuclear deterrent is not in doubt. The Government have absolute confidence in our deterrent and the Royal Navy crews that protect us and our NATO allies every hour of every day”.

That concludes the Statement.

[Lord Touhig (Lab)]

My Lords, immediately on crossing the threshold of No. 10 on 13 July, the Prime Minister wrote four identical letters to the commanders of our Vanguard fleet, instructing them what to do in the event of the Government ceasing to function and this country being subject to a nuclear attack. That is the measure of how important we think our nuclear deterrent is.

With reports that a test missile launched in June failed, the Prime Minister was asked four times on live television yesterday when she knew about this and she would not answer. This morning, No. 10 confirmed that she was told about the test when she took office. Frankly, if the Prime Minister cannot face up and answer an honest question about the very basis of our nuclear deterrent, we must ask whether she is up to holding that high office in the first place. At the end of the day, it all comes down to character.

Today’s Statement says:

“We do not comment on the details of submarine operations”.


That is strange because I have an MoD press release, dated June 2013, in which we are told that HMS “Vigilant” was awarded a trophy for successfully completing a similar test to the one we are talking about today. More than that, the press release also tells us that the crew prepared for the test for six months. It gives the date of the test and tells us where it took place. It tells us that it was the 10th test in a row and how long our nuclear deterrent is at sea. Also, in the last hour or so, a spokesman for the White House has confirmed that the missile was successfully diverted and destroyed off the coast of Florida.

The Government’s policy of no comment on these matters because of national security is in chaos—it is a shambles—and deserves to be thought through all over again. It is nonsense. Previous tests have been filmed and broadcast. Why was this one kept secret? I do not wish to compromise our national security—none of us wants to do that at all—but can the Minister confirm that the cause of this failed missile launch has now been identified and resolved, and that Britain’s nuclear deterrent is fully operational?

[Earl Howe]

My Lords, I am sorry that the noble Lord saw fit to criticise my right honourable friend the Prime Minister. As I am sure he would expect, the Prime Minister is routinely updated on matters of national security. This DASO happened before she assumed office but she will have been briefed on a range of nuclear issues while Prime Minister.

I turn to his point about tests made in the past. There is no set approach to communicating the outcome of demonstration and shakedown operations; that is decided on a case-by-case basis, informed by the circumstances of the time. Nothing should be read into the fact that the outcome of this particular test was not publicised.

The noble Lord asked about the test itself. If the premise of his question was to accept the validity of the weekend press reports then I cannot accept that premise. As I have said, this was a successful operation, following which HMS “Vengeance” and her crew returned to operational service for deployment on nuclear deterrent patrols, which was the purpose of the exercise.

A159 Wildcat Helicopter

Lord Touhig Excerpts

Monday 9th January 2017 Lords Chamber

[Earl Howe]

My noble friend is right. The drive to ensure that Wildcat secures export orders is central to the work that the company and my ministerial colleagues in BEIS are doing. We are working closely with the company to that end.

[Lord Touhig (Lab)]

My Lords, in an uncertain world, Britain needs our Armed Forces to be well equipped, and they need the support of the men and women employed in our defence industries. If the noble Earl agrees with that, will he say what the Government are doing to ensure the highly skilled workforce at GKN is not lost to Britain’s defence? He and I both know we will need them in the years ahead.

[Earl Howe]

The noble Lord is right about the need to maintain high-end skills in this country if we are to maintain our position as a leading player in the aerospace market. The Defence Growth Partnership is one element of this. We have a substantial programme of work already under way to encourage the growth and competitiveness of UK industry. Defence is playing an active part in the cross-government work on the national industrial strategy, which we aim to publish during the next few weeks. It makes sense to allow those programmes to deliver before taking a view on whether any further defence-specific work is needed.

Royal Navy: Frigates

Lord Touhig Excerpts

Thursday 8th December 2016 Lords Chamber

[Earl Howe]

My Lords, we will be replying to Sir John’s report in due course. However, he has identified a renaissance in shipbuilding that is emerging in a range of regional companies where he has found an entrepreneurial attitude and an enthusiasm to embrace change. We should be encouraged by that. We need to bottom out those assumptions but we certainly respect the conclusions that Sir John has drawn.

[Lord Touhig (Lab)]

My Lords, we welcome Sir John Parker’s report on the national shipbuilding strategy, but does the Minister accept his concern about the existing government policy? He said that fewer, more expensive ships are ordered too late and old ships are retained in service well beyond their sell-by date at a high cost, and that this “vicious cycle”—his words—is depleting the Royal Navy at a great cost to the taxpayer. Sir John urged the speedy construction of new ships, saying that the Navy is being depleted at a rapid pace. In response to my noble friend Lord West of Spithead, the Minister said that the Government would respond next spring. However, in view of the comment that spring could be a little late next year, can he assure us that it will not be that late?

[Earl Howe]

I assure the noble Lord that it will not be that late. It is true that the procurement performance of the Ministry of Defence, which lagged for many years, has improved in recent years, as we know from the NAO reports and elsewhere. However, we also knew that surface ship procurement was problematic. That is precisely why we asked Sir John to undertake his work in the first instance, and he has given us some very encouraging pointers.

Brexit: Armed Forces and Diplomatic Service

Lord Touhig Excerpts

Thursday 8th December 2016 Lords Chamber

[Lord Touhig (Lab)]

My Lords, the House is indebted to the noble Lord, Lord Sterling, for securing this debate and giving us the opportunity to discuss these important issues. I join in the congratulations to the noble Earl, Lord Cork and Orrery, on an excellent maiden speech which was well informed and contained some good ideas. I have always worked on the basis of never rejecting a good idea simply because I did not think of it first.

As we approach the turn of the year, it is always good to look back—the most perfect view of all is the one looking back. I can say with certainty that this time last year few of us would have predicted the challenging turn of events of the past 12 months, from the EU referendum result in June to the US presidential elections in November to the most surprising but welcome outcome of all—Wales finishing ahead of England in Euro 2016.

Like most people in this House, I was surprised by the outcome of the referendum on 23 June, and it was certainly a wake-up call if ever there was one. While we continue to be told that “Brexit means Brexit”, we should not forget that for seven decades the defence of this country has been underpinned by NATO in particular and Europe in general. While that close co-operation has been welcome, some responsible for promoting the EU’s common security and defence policy have favoured more integrated European defence with the possibility of a European Union army. I am opposed to this, and so is the Secretary of State for Defence. In his conference speech in October, he said that,

“we will go on blocking an EU Army, which would simply undermine NATO”,

but the Foreign Secretary disagreed. He said:

“There is a conversation going on now about the EU’s desire to build a strong common security policy … If they want to do that, fine ... We are not there to block or to impede further steps towards EU integration”.

These two statements contradict one another. Will the Minister tell us what government policy is on this matter?

Creating a European army should not be a strategic goal; rather, we should be strengthening NATO. A non-NATO European defence force would be a gift to President Putin and anyone else who some time in the future may take an aggressive stance against us or one of our NATO partners.

I was glad that in SDSR 2015 the Government confirmed their commitment to spend 2% of GDP on defence. However, we must do more to encourage other NATO member states to do the same. This is more important following comments made by President-elect Trump, who said:

“We have many NATO members that aren’t paying their bills ... Many NATO nations are not making payments, are not making what they’re supposed to make”.

I note in the excellent paper prepared by the Library a quote from Jed Babbin, Deputy Undersecretary of Defense in George W Bush’s Administration. He warned that President-elect Trump,

“may not get the chance”,

to abandon NATO,

“because the EU may beat him to it”.

I do not want to see President Trump, when in office, pull back from the United States commitment to NATO and I am sure I am not alone in that.

Following the 23 June referendum, a RUSI investigation found that Britain could face a £700 million black hole in its defence budget due to the falling value of the pound against the dollar. It came to this conclusion by analysing several factors. Britain’s defence imports rose from $7.2 billion in 2002 to $11.8 billion in 2012, and RUSI concluded, using the exchange rate of £1 to $1.30, and with defence spending of £35 billion in 2015-16, that there would be an annual £700 million shortfall in Britain’s defence budget. The pound to the dollar today is now £1 for $1.27. Speaking in the other place on 11 July, the Defence Secretary said that,

“it is a little too early to be sure exactly where the sterling-dollar exchange rate will end up. Like any large … organisation, we take precautions against fluctuations in the currency, but it is too early to say whether that current level is likely to be sustained”.—[Official Report, Commons, 11/7/16; col. 52.]

Can the Minister outline what these precautions are and how the Government are planning to use them?

The fluctuating exchange rate may also be a problem for the cost of importing the raw materials needed to build our naval vessels. My noble friend Lord Hoyle, who is not in his place, recently asked the Minister about defence contracts and the use of British steel. In reply, the Minister stated that the Government were committed to supporting British steel but that there was,

“the need to source specific grades of steel, not all of which are available in the UK”.—[Official Report, 21/11/16; col. 1728.]

If we depend on importing this specialised steel, then we need to be concerned that the Ministry of Defence budget can cope with the possibility of having to pay more. A weak pound would cause significant problems for our imports of raw materials. What has the Ministry of Defence been doing to consider the impact of that?

In an uncertain world, the European continent faces twin evils: intolerance and poverty. Both have been at the forefront of many arguments surrounding the Brexit debate. The intolerance I speak of is fed by the perceived threat of migration: intolerance of people we see as different from us and intolerance of people from different backgrounds, cultures and traditions, whom some would have us believe pose a threat to our way of life. A dear friend of mind, the later Leo Abse, MP for Pontypool and then Torfaen for 30 years, said on the day he announced his retirement, “I only have one piece of advice for my successor”—he did not know then it was to be my noble friend Lord Murphy of Torfaen—“tolerate everyone, tolerate everything, but never, ever, tolerate the intolerant”. That was good advice and we should bear it in mind post-Brexit.

The poverty I have in mind has been, in the main, worsened if not entirely brought about by wars in Iraq, Syria, Libya and parts of Africa. These wars and poverty are driving tens of thousands of desperate people to Europe’s shores. The impoverished and dispossessed arriving here are seeking a better life, believing that Europe will give it to them. When it comes to poverty I am with James Maxton, who said:

“Poverty is man made therefore open to change”.

But if we are to gain the true measure of these twin threats—intolerance and poverty—and to find ways to combat them, and if Britain is to continue to play a major role on the world stage both in defence and as a trading nation with the fifth-largest economy on the planet, then a British trinity of an integrated foreign, defence and aid policy should be the bedrock for our future. In truth, I do not believe that yet exists. But my God, post-Brexit, we will certainly need it.