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Armed Forces: Future Defence Policy

My Lords, I am grateful for the opportunity to open this debate, but, first, I am sure that noble Lords will join me in offering sincere condolences to the families, friends and colleagues of Warrant Officer Darren Chant, Sergeant Matthew Telford, and Guardsman James Major of the Grenadier Guards, and Corporal Steven Boote and Corporal Nicholas Webster-Smith of the Royal Military Police, who were tragically killed in action on Tuesday 3 November following an incident in the Nad-e-Ali district in Helmand province. I also pay my full respects to the soldier from the 3rd Battalion, The Rifles, who died yesterday near Sangin. With Remembrance Sunday approaching, the lives being lost in Afghanistan lend greater poignancy to our customary period of reflection. At this time, of course, we remember with great pride every individual who has given his or her life in service to this country, and we note with regret the final passing of the First World War generation. Afghanistan, however, is uppermost in our minds. The situation there is serious. Ninety-three lives have been lost this year, with more than 100 soldiers seriously wounded. But, as the Prime Minister has said today, with the right strategy, we can succeed. It will not be easy and more lives will be lost, but I am clear in my mind that the mission in Afghanistan is essential for our national security. It is a campaign of necessity and not one of choice. It is true that al-Qaeda has relocated to the borderlands of Pakistan, but it is there only because we are in Afghanistan. I have no doubt that, were we to walk away—as some argue that we should—and concentrate wholly on "fortress Britain", we would become less safe because, as General Richards has said, withdrawal would have an intoxicating effect on those who threaten us. That is why we and 40 other countries have troops on the ground today. We all face the same threat; we must meet it together. We need to strengthen the legitimate authorities in Afghanistan. Training the Afghan security forces and getting them to take a lead role is the right approach. But my overriding point today is this: we have to get the business of defence right. This is a hard business. We are dealing with challenges of unrivalled complexity. Every country is. It is essential that more of that complexity is revealed and discussed openly. If the public are to support the billions of pounds being spent on defence, and are to accept British lives being in put in harm’s way, they need to have confidence that the Ministry of Defence is using their money wisely and that our forces are being deployed for matters of essential national security. Public trust and confidence are vital to maintaining our military capability. So my main purpose today is not to dwell on Afghanistan, for we need a frank debate on the broader questions. What role do we want Britain to play in the world? What military capabilities do we need? How much will they cost, and can we afford them? The answers to these questions will form the basis for our future approach to defence. My starting point is the strategic context. Let me share with your Lordships the initial conclusions that we have reached about the security environment over the next 30 years. We have identified a number of trends as having the greatest effect on our defence policy: the rise of Asia; ongoing globalisation and interdependence; the impact of multiple stresses such as climate change and population growth; and the proliferation of advanced technologies. At the same time, there are several threats to which we shall have to respond: terrorism, failing states and international crime. The obvious conclusion is that our Armed Forces are likely to be called upon regularly to protect the national interest and promote international security. It will most likely be in distant places; it will most likely be against enemies using asymmetrical methods; it will most likely be in complex political and security environments requiring an integrated strategy with military and civil components, rather than the blunt use of force; it will most likely be as part of an international coalition. Afghanistan, therefore, is a signpost to the future, to further situations without a conventional adversary, where the battlefield is congested and cluttered with ambiguous targets, and where we will have to fight for access and freedom to manoeuvre. It is in such environments that we will seek to prevent conflict and promote security. This represents an uncertain future, but we face it with certain firm principles. First, territorial defence will always be the primary task. While it is true that Britain faces no direct territorial challenge, we have been involved in four wars over the past 30 years—to recover the Falklands, in Kosovo and the two Gulf wars—where the opposing Armed Forces were those of another state. Deterrence, both conventional and nuclear, will remain a valid strategy. Secondly, we cannot defend our wider national security interests alone. No country can. The principle of multilateralism has to underpin our defence policy. This new world will contain multiple, overlapping institutions through which we must work: NATO, the UN, the EU, and informal coalitions. All will play their part. UK defence must be flexible enough to operate with a wide range of partners. Thirdly, national security is also broader than just defence. As the national security strategy, updated last year, makes clear, this is about trade, aid, diplomacy and police work. Soft power is as important as hard power. As we have seen in Afghanistan, even in complex military operations, we need a comprehensive, cross-government approach. The last full defence review was in 1998. The Strategic Defence Review got many things right. It drew a line under Cold War posture. It anticipated the need to tackle threats at source through expeditionary forces, and it foresaw that joint and coalition-based operations would be the norm. Initially, the thrust of the SDR was largely vindicated by a series of limited interventions, in Sierra Leone, Macedonia and Kosovo. But we did not foresee the strategic shock brought on by 9/11. We did not foresee the enduring and concurrent operations of the past decade. We have learnt the hard way that some of the planning assumptions underpinning the SDR were wrong. "Go first, go fast, go home" had a very limited shelf-life. Not only that. The costs associated with counter-insurgency in Iraq and now in Afghanistan, especially in terms of force protection, were not budgeted for, and they are very expensive. With our adversaries able to get their hands on advanced technologies, the adaptability of our forces is a must, if we are to manage risk and preserve lives. In such circumstances, the military can easily price itself out of the market. To address these problems, a full defence review is required. The defence Green Paper will be out early next year, and that full review will follow. I am in no doubt that defence is going to have to change, not only to succeed in current operations, but also to ensure that we meet future challenges. Tough decisions will have to be made, and any decision in the MoD has consequences elsewhere. Clearly, the impact, since 2001, of priority operations has been significant. For example, we have been unable to conduct a medium-scale, war-fighting exercise since 2001. This kind of training is clearly important for our long-term capabilities. Our air transport fleet is operating at 10 per cent over its planned level of effort, meaning that our reliance on charters has increased year on year since 2001. That has to be paid for. Furthermore, operations of the intensity that we have experienced since 2001 have meant that we are using our personnel to maximum capacity. Specialist areas, such as ammunition technical officers, are in high demand for operations, with resultant adverse effects on their tour intervals. Nor can we escape the fact that defence is expensive. Costs are accelerating, and every country is experiencing this. For us, the two biggest costs are service personnel and equipment. Combined, they take up almost two-thirds of the defence budget. Over the past 30 years, service pay has risen by around 1.2 per cent every year ahead of the defence budget, consuming an ever greater proportion. A similar trend exists with equipment, where inflation estimates range as high as 10 per cent. Moving forward, therefore, we have three basic options—to spend more, have less, or do better with what we have got. In the current fiscal climate, option one is unlikely. For all that I have said so far, option two is undesirable. That means that we have to do everything in our power to manage defence more efficiently and more effectively within current parameters. In terms of personnel, here are some of the key questions we are examining. First, while Armed Forces numbers have gone down by almost 40 per cent overall since the end of the Cold War, some senior ranks have gone down by only 10 per cent. Those at the top are more expensive. Are we top-heavy? Is some rebalancing necessary? Secondly, Armed Forces personnel receive an overall package that includes pay, pension, accommodation and overseas allowances. Is there a case for altering the balance of remuneration and for reconsidering career lengths and retirement age? Thirdly, over the past decade, we have been investing more in more capital-intensive equipment platforms—Astute submarines, Type 45 destroyers, and Typhoon—all of which require lower manning levels than their predecessors. Do we have the right mix between personnel and equipment? My primary responsibility at the MoD is acquisition reform. Bernard Gray, in his report, has of course raised the key questions here. How do we achieve a sustainable and realistic equipment programme, given the cost pressures I have highlighted? How do we match what we procure over the long term to what we require in the short term, without over-reliance on the urgent operational requirement systems which have proven so effective during the past five years? How do we improve our track record in delivering these complex programmes on time and on cost? As I told the House last month, we have accepted the bulk of Bernard Gray’s recommendations. The challenge now is implementation. I am currently developing a strategy for acquisition reform, which I will present in the new year. It bears repeating that defence is a highly complex business, one where the security of our nation is at stake. But there is also a significant moral dimension to our decisions, not least because the lives and livelihoods of our forces personnel are on the line whenever we deploy. As a nation, we want to be a force for good in the world, and our Armed Forces are a key part of that. Today, I have set out the challenges we face in supporting their activities. I know that there is a tremendous amount of experience and expertise on defence in this House, so in the coming debate I will listen very closely to the contributions from all sides. I have no doubt that I will hear strong opinions, but I welcome that—in part because the public need to understand the difficult decisions ahead and to recognise the complexity involved. If we are to sustain public support for operations in this new security environment, people will also need to understand that lines on the map and the body count are not definitive measures of success—and that in coalition warfare, as in Afghanistan, Britain cannot dictate every course of events. Support for our Armed Forces in general is not enough. The British people need to support what they are doing as well. I hope that this debate will make that clear.