---

Defence in the UK

I not only refute but resent the implication of that question. Conservative Members have never played politics with that particular issue in any way and would never seek to undermine either the security or the prosperity of this country. The hon. Gentleman might want to have a word with the leader writers of The Guardian. The final matter I want to deal with is energy as a security issue. There is now broad agreement about the environmental consequences of our addiction to oil and gas, but there are other immediate reasons to reduce our dependence on fossil fuels. Foremost is our national security. In the years ahead, national security, economic security and energy security will become increasingly synonymous. Our addiction to oil and gas means that we are increasingly dependent on the stability of producer nations to ensure continuity of supply. Additionally, we are increasingly exposed to the risk that these nations will use the supply of energy as a tool of foreign policy. Such ““resource nationalism? has already become a cause of alarm in certain vulnerable states. We need look only at the actions of Russia towards the Baltic States, Ukraine or Belarus to see the phenomenon in action. There are two reasons why energy security has become a more urgent problem for the UK. The first is our increasing dependency on energy imports. Last year we became a net importer of gas and we are set to become a net importer of oil by 2010. Secondly, globalisation has brought a downside as well as an upside. I refer to our sophisticated interdependence and our inability to insulate ourselves from sudden downturns or disasters elsewhere. We are all competing for the same natural resources to feed our economies and we are more vulnerable to interruption of supply—either due to problems with supply itself or with distribution. The House can debate the global economy on a wider basis, but I believe that we have not yet developed the structures necessary to deal with the downside risk exposure that it brings. I shall focus briefly on Iran and Russia in relation to the military aspects of that particular threat. The United States Central Command—CENTCOM—military command in the middle east watches Iran very carefully. A recent report stated:"““While generally thought to be for defense, Iran continues to build a credible military capable of regional power projection. It has the largest military capability in the region and a record of aggressive military action in and around the Arabian Gulf… Iran’s ground forces are arrayed across the country with the majority of combat power along the Iran-Iraq border?." We know that, potentially, Iran is capable of internationalising any dispute by blocking the straits of Hormuz, for example. All that is troubling and has been debated before, but what should be even more troubling to the House is the extent to which we have funded this defence capability. Iran’s oil revenue has risen from $23.7 billion in 2003 to $47 billion in 2005. That economic windfall enabled the Iranian regime to undertake a spending spree on defence. Its defence budget has gone up greatly and it has purchased missile technology and small vessels in particular. Following assistance from North Korea, China and Russia, many analysts now consider Iran to be increasingly self-sufficient in the production of ballistic missiles. Obviously, that capability has received increased attention as a result of the country’s nuclear ambition. Over the past five years, Europe alone has pumped $50 billion into the economy of Iran and an astonishing $232 billion into countries of the former Soviet Union—mainly Russia. Those are the figures for spending on crude oil alone; they do not even take into account financial transfers resulting from the sale of gas or petroleum products. For every $1 increase in the price of a barrel of oil, an extra $1 billion goes into the Kremlin coffers. That windfall has been used in both Russia and Iran to finance military build-up. In other words, we in the west are in a security Catch-22. Our dependence on oil means that we cannot avoid paying whatever price is demanded of us, which leads to huge financial flows out from our economy into the economies of oil producers, some of which might be hostile to us, and the money then finances a defence build-up. That situation is part of the threat that this country faces, so we need to understand and deal with it as a matter of urgency before it becomes even more detrimental to our national security. We believe that dealing with the situation should be the responsibility not of the EU, but of NATO, for the prime reason that that would bring Norway and Turkey into the process at a time when Turkey especially feels alienated. As I said earlier, this country has benefited from a largely bipartisan approach on defence. While there have been minor differences between the parties on the way in which we carry out the defence of our country, we seldom disagree about strategic issues. The Government will continue to get our support when we believe that they are doing the right thing, as they have done on Afghanistan, notably, and Iraq. However, if we are to defend our country successfully in the future, we must ensure that the welfare problems relating to our service personnel and their families are properly addressed and that procurement is dealt with sensibly and more efficiently. Operationally, we must understand that we cannot continue to overstretch our armed forces as we are doing now. We cannot continue to fight the battles in theatre that we are fighting without putting in place sufficient investment to ensure that we are able to carry out our mission successfully and guarantee the safety of the troops who put their lives and limbs on the line for the security of this country.