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Future Defence Programme

My Lords, on the last point I have to agree with the noble and gallant Lord that some of these problems, if not tackled, could create unduly difficult problems in the future. Indeed, I would suggest that that is one of the reasons why we have had to spend so much on the defence estate in the recent past. The backlog of underinvestment in that area was dramatic, but I am pleased to say that we are now in a situation where 90 per cent of service family accommodation is at grade 1 or grade 2, which is a significant improvement. However, I am told that when the service chiefs have asked about this, the priority that they have identified is the project called service personnel first, which gives an accommodation uplift for those who are returning from operations. It is quite understandable that that should be the priority. As to the Strategic Defence Review, the nature of the accommodation that we provide is one of the issues that I think will have to be discussed. An appropriate model in the past might not be an appropriate model for what we want to provide in the future or for the lifestyles of those in the Armed Forces. The noble and gallant Lord says that £1 billion is being cut in year 1, but I have to say that I do not recognise that figure. The Pre-Budget Report said that not a single penny will be cut from the defence budget in 2010-11, which is as far as the Comprehensive Spending Review goes. He asked where we can make cuts, when we talk about priorities, in headquarters costs. Since 1997, we have reduced the number of civil servants in this area by 45,000. That has shown significant scope for reductions. We want to see that developed further, which is why we have the review under Gerry Grimstone. We will look forward to seeing what he comes up with. In our discussions on operations in Afghanistan, we have looked to slow down some projects. I hope that the whole House agrees that those projects that are important for operations should always have priority.