Protecting Future UK Security and Defence Interests

Transcript Protecting Future UK Security and Defence Interests

Bob Ainsworth MP Defence Secretary

Dr Liam Fox MP Shadow Defence Secretary

Nick Harvey MP Liberal Democrat Shadow Defence Secretary

Moderators:

Dr Robin Niblett Director, Chatham House

Sarah Montague BBC

29 March 2010

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Transcript: Protecting Future UK Security and Defence Interests

Robin Niblett: Bob, I'm going to turn to you first – Secretary of State, currently for Defence. Where do we, how do we place the type of conflict that we think Britain should be preparing for in the future? Inevitably today Afghanistan is taking up the bulk of our political and military focus and attention; taking up a huge amount of resources. Obviously it's taken lives and effort. But is this the model of the future? Are we preparing effectively for the kinds of conflicts that might be out there? We have risks from Iran, a deeply changing geopolitical situation with the rise of China; we saw the sinking of the South Korean boat a few days ago.

How, as Secretary of Defence, do you prepare for the existence of these very intense insurgency-type conflicts, with simultaneously the potential risk of major conflict in the future? Where should Britain be putting its effort today?

Bob Ainsworth: We've got to put our effort today into Afghanistan. It's the main effort; it has to be the main effort; we've got 9,500 people deployed there. They're entitled to our complete focus with that regard. But, when we come to planning for the future and the potential threats that we will face, if we plan on the basis that some future conflict is going to be Afghanistan again, or even similar to Afghanistan, we will be in very serious error. If there is one thing that history teaches us, it's that we cannot predict threats.

We try to bring out some of these issues in the Green Paper that we did, so therefore planning for the various threats that we could face in the future, having to do that in what may be a resource constraint situation, means that we've got to try to build the maximum amount of capability, adaptability into our force structure that we can.

Robin Niblett: When you look at Asia, I know you mentioned in your Green Paper the balance of power in Asia potentially being one of the most fundamental and dynamic changes for the future of British defence. Does Britain have a perspective and even today the capabilities to respond to some type of change in the situation there, whether it be in terms of maritime, an effect on supply routes... if the United States were to find itself embroiled in some situation around Taiwan... do we have the capacities today, militarily, to think

www.chathamhouse.org.uk 2 Transcript: Protecting Future UK Security and Defence Interests about that type of crisis at the same time as we're so focussed on Afghanistan?

Bob Ainsworth: We have to be prepared to work with others. We are, of any nation on earth, one of the most exposed to the global environment. That brings great benefits to us but also great risks. We therefore... there are some things that we have to plan to be able to do on our own, and we always will have to, like things that affect our own nation and our overseas dependencies. But we have to be prepared and plan to be able to work with others to maintain the world security environment and free passage of goods on the high seas and other environments.

There are new threats that we have to look at. We're increasingly dependent on space. We've seen the kind of threat that can come from the cyber environment. We are dependent upon those domains for our own capability so we have to make sure that we've planned to defend that capability. Yes, in some circumstances be able to project force in those environments as well.

Robin Niblett: Liam, if I could turn to you now. A similar question, the same question. I'm interested in hearing your viewpoint on the future of conflict, how you see this balance between the likelihood of counter-insurgency being the pattern of the future. And also if you believe that people would want to be engaged in this type of conflict in the future given the experiences we've had over the last seven or eight years. What's your view of the biggest list of risks that we need to be thinking of from a defence standpoint for the future?

Liam Fox: Well I'm not sure the public ever want to be involved in any conflict. The point is that sometimes it's unavoidable. I think you have to begin with the wider environment. We live in a genuinely globalized economy. That means that our interests are more widely spread and more susceptible to actors in other places than in the past. I think the politicians have been slow to grasp the realities of globalization and the threats that they bring. They like to talk about prosperity and trade and so on, but they tend to shy away from the unavoidable strategic risk that globalization brings. I think that has to be a starting point. www.chathamhouse.org.uk 3 Transcript: Protecting Future UK Security and Defence Interests

The question is, what will wars of the future look like? The honest answer is, we don't know. Therefore we have to maintain generic capability that is adaptable to as many potential identifiable threats as possible. Therefore we do not make the mistake of saying future wars will be like the current war and therefore you invest in the type of capabilities we require for the current war.

The pattern is changing as we look at it. People say we'll never have state- on-state warfare again, involving the United Kingdom. Well perhaps not, in a primary sense, but that doesn't mean we wouldn't be dragged into someone else's state-on-state warfare.

People say that it's going to be asymmetrical, well, you look at Georgia and the state-on-state attack was preceded by an asymmetrical attack. I think that what you're looking at is the concept of hybridity in the threats that we face in the future. That will require us to have a very different mindset.

The other thing I would say is that we come from a history where our defence programmes tend to be about 'let's review the number of ships we have, let's look at our aircraft and our tanks' and the threats out there now are not just about the size of conventional capabilities lined up against us. They're also about the technologies that might deny us access to our own conventional capabilities. The necessity of investing in things that perhaps people cannot see but are otherwise indispensable to security is going to be one of the great political challenges in the years ahead.

Robin Niblett: Nick, turning to you on this same question in terms of prioritization, some of the major threats that you see emerging here... Both comments we've heard so far have stressed the need for agility, differentiation, the ability to stop and change. But I think this idea that in a globalized world we may find that we have to project force quite significantly in the future will be important.

Nick Harvey: Yes, I think one of the fundamental questions a Strategic Defence Review will have to wrestle with is where on this spectrum of activity between the war we're currently fighting and the contingency of possible state-on-state warfare in the future, we think we want to strike the balance. One thing that we can say with absolute confidence is whatever conclusion is arrived at, whatever assumptions are made, they will turn out to be wrong.

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So we've got to do our best at thinking what the character of future conflict will be. We know in a sense that the nature of conflict is unchanging because in a sense it's endemic to human nature, but the wars that may be fought in the 21st century will be about increasingly desperate competition for natural resources, oil, water, fertile lands, perhaps we'll suddenly see forced mass migrations of people as a consequence of climate change. I think the reasonable assumption to make is that we want very versatile, very nimble troops who can get in and out of situations very easily and that this is going to require some rebalancing of our forces to those who we think will have the most relevance to that sort of activity in the future.

And we can make some reasonable assumptions about what we think they'll need. We know they'll need, all that sort of activity will require helicopters. We know there will be activity... versatile vehicles that are capable of manoeuvring in different sort of domains, but with adequate protection. I think even when we look at our naval requirements, again the watchwords should be versatility, adaptability and not getting ourselves too firmly rooted into old fashioned models of what a navy ought to look like.

If there is a possibility in the future that the threat you refer to, perhaps China might come to pose, if that does come to pass, there's nothing that the UK is going to be able to do on its own. We'll have to work closely with allies, NATO, other countries around the world, and that needs to be an absolutely central element of our thinking. How best we can project force in alliance with other countries, and what of that collective projection of force we are best equipped to do and retain some specialism. And what we're prepared to accept from others.

Liam Fox: I have a problem with the assumptions, because I do not think we can come to the assumption that it's scarcity of resources for whatever reason that is necessarily going to lead us to conflict, because there is also competition of ideologies. One of the problems we face today with transnational terrorism, particularly violent Islamist terrorism, is an ideological threat. And we've got to, in a society that values tolerance, remember that fanaticism can pose a threat to us. And there's information asymmetry, which also exists, is something we have to get back to.

We didn't just win the Cold War because we won the military threats. We also won the ideological battle. When people say the Cold War ended, it didn't end, it was won. It was won as much by our ideological and political www.chathamhouse.org.uk 5 Transcript: Protecting Future UK Security and Defence Interests commitment as it was by economic and military capabilities. I just think it's something we need to bear in mind; looking at physical causes will not always give us the answer, we also have ideological clashes that we need to bear in mind in terms of global security.

Robin Niblett: Turning to this issue of ideological clashes and the Cold War, I wanted to get to the heart of NATO and the future of Atlantic alliances. As you all know, we're in the midst of a review of NATO's strategic concept. The Atlantic alliance was powerful when it understood the ideological competition that it was involved in facing down from communism. It has now tried to adapt itself to new missions.

It strikes me that this new NATO strategic concept is pointing out a difference in perspective between a US that retains a global perspective on its security and a European set of members, many of whom have a regional, or closer to their shores kind of perspective. Less to do with ideology, therefore less to do with unification around an ideological aim, so perhaps more utilitarian approach. I'm wondering, Bob, again starting with you on this point, whether you see NATO being able to survive this period. Will it be with us in five to 10 years time, 20 years time? Should the UK be as reliant on this Atlantic alliance being as strong in the future, to be able to project British security needs?

Bob Ainsworth: There are those tensions in the NATO alliance in squaring off some of the views of those nations, particularly if you go further towards the east, you see Article 5 of self-protection being the overwhelming priority with those of us who see NATO's ability to deploy force and to respond to new threats as being essential to NATO's relevance in the future. Those are the issues that will have to be dealt with in the new strategic concept in the next year or so.

But I would just say, in response to one thing that Nick said about China, and Britain not being able to respond on its own. It's absolutely right at one level, but we are already responding to those kinds of situations in many ways. We're responding by being part of a global security structure that we have to be able to support, that we have to be able to try to enhance, and we can only do that if we're genuine players. It's no good being members of the United

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Nations unless we bring something to the table. It's no good being members of NATO unless we have influence.

We have to have those influences and I would say, and this is where Liam might disagree, that we have to have influence in Europe as well. Europe is not seen as being a major player by many people in terms of security. But marrying European influence and the capabilities that Europe can bring to bear in conflict situations with the capability of NATO and making them complementary to each other, I think is very important to our security.

Robin Niblett: Liam, turning to you about the future of NATO, you spoke at Chatham House about this a while ago, right down to the question of resources and how they're shared or not shared between member states. But this balance between where NATO will go, whether it can actually reflect interests and still be cohesive, alongside whether the UK should perhaps put more effort into the European Union in its defence space, which after all does have a regional perspective to its security needs...

Liam Fox: Well to go back to my initial point about globalization, we're a member of a P5, G8, G20, NATO, Commonwealth, European Union. We have a very wide range of international global interests; we have to recognize that each one of them provides a lever that can be used to enhance our national security and we're going to have to do that.

A very simple fact like 92 per cent of Britain's trade comes by sea comes as a surprise to many people and yet it tells us a great deal about what we have to do to protect our trade, our energy security, in the future. NATO has to be a cornerstone of that.

But there are a number of basic problems in Europe. One is that too many of our NATO allies simply will not fund their NATO obligations. Too many of them don't wish to deploy in support of their NATO obligations when required to do so. Too many of the European members, and this is particularly true in the EU aspect say 'well, we really see our future as being peacekeepers'. Which is all very well except that you can only keep the peace if there's a peace to keep. And sometimes you have to fight for peace and sometimes you have to die for it.

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We have to be willing to maintain, as the cornerstone of defence, an alliance that is willing to fight. I would say, what does NATO have to do, on a functional basis? It has to maintain an international maritime capability. It requires land-based expeditionary capability, the defence of continental Europe, and increasingly in what I would call the North, the Baltic, the Arctic.

NATO is essential not just for holding in the United States, but holding in Canada. I think Canada is too often forgotten as a major strategic partner. It's a major power in the Arctic, where we've got renewed tensions over oil and gas with Russia. It's going to be an international energy power in the years ahead, so I think we should think more about North America and not just the US in that broader global view.

I sometimes think that the undermining problem that European politicians have is that they all have maps of the world with the Greenwich meridian in the middle. And if you go to the United States, they have maps with the Pacific in the middle. In many ways that's more a contemporary geopolitical map than this Eurocentric view, which reinforces a view that you can be parochial rather than global in your outlook.

Robin Niblett: Isn't there a risk that perhaps we have a US and a UK that have global outlooks, but very few European states that do? Surely the Atlantic alliance itself won't be able to survive that kind of differentiation?

Liam Fox: Well, that's a mission isn't it? It's a mission for us to spread that outlook rather than eternal retrenchment. Into what, Britain and France and the United States? That's not an acceptable global application of power.

We need to be pushing our case with those smaller European countries. As Bob says, however, giving them a guarantee that Article 5 is meaningful for them, and bringing them into a wider global view of our security.

Robin Niblett: Nick, obviously the Liberal Democrats are often painted as having a very pro- European stance, you do on many issues, but on defence in particular, I'm interested to hear your views on the balance between the value you can bring, given that there are such differences in priorities amongst the member www.chathamhouse.org.uk 8 Transcript: Protecting Future UK Security and Defence Interests states. And as Secretary Bob Gates said just the other day, very few of them, only four, are spending above two per cent of GDP right now on defence. How credible can the EU be, even in the civil-military space, with such a lack of interest?

Nick Harvey: You asked the question, would NATO still exist in five or ten years time. I'm absolutely certain that it will and that it will remain a most critical strategic partnership. I think those who envisaged this new strategic context taking a narrower view of what NATO should do are completely wrong. It's absolutely essential that this global perspective is sustained. In terms of the countries of Europe, we can't expect the NATO alliance and the Americans to do as much for us in the next 50 or 60 years as they have in the last 50 or 60 for the very reason that Liam put his finger on when he made the point that the Americans are now very much more oriented towards the Pacific than they are towards the Atlantic.

The people of Europe are greater in number, we are more populous than the USA, we've got a larger economy than the USA and we can't expect the Americans to do so much of the heavy lifting on our behalf. The countries of Europe have to step up to the plate and do more on their own behalf.

I don't think we get from where we are now to where we need to be solely through the apparatus of the EU, although I think it's useful. I think it will in the first instance be the British, the French and hopefully half a dozen other players who do have the same outward view that we do and I agree with Liam that we have to try to persuade the rest of them to follow that lead.

But if we wait for it to happen through the vehicle of ESDP, we're not going to get where we need to go quickly enough, and it will be down to a central core of European countries to set the pace on this, in a way that I think the Lisbon Treaty has provided for.

Robin Niblett: Liam, do you see the ESDP, the way it's evolving in a relatively positive way? I think Nick was trying to be pragmatic, at least, talking about a core of six or so countries providing a lead-in to others. Is there an infrastructure of decision-making there that will pull things together?

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Liam Fox: Do I see a role for the European Union in defence? I see the EU having a role where NATO cannot or will not do things, but I see it as being additional to NATO. My worry is that the countries that are unwilling to spend or deploy in support of their NATO commitments are unlikely to want to increase their spending or commitment to want to support the EU additionally. I worry that you get duplication rather than additionality.

Maybe I'll be wrong, maybe we'll get a rush on spending for defence from some Central European countries, but I fear we're going to be disappointed.

Bob Ainsworth: We're not going to be able to get the maximum leverage in Europe purely on a bilateral basis, and there are occasions where we can get European countries to step up. I think the most recent of those is Operation Atalanta where we managed to get through the EU deployable capability to a very real issue that we otherwise wouldn't have got, and some of it is additional to NATO. Some of them that were not there, and people would not have been prepared to deploy under another flag in the way that they were with the EU. You have to try to avoid duplication, it would be a disaster. It's difficult to get some European countries to spend at a necessary level. But the idea that we're going to be able to get all of the cooperation we need solely through bilateral relations I think is wrong.

Liam Fox: That's not what worries me. I said there are a number of different levers we need to use. We have bilateral; we have some in the EU, a bigger element in NATO. We have to use a range of tools to deal with the different scenarios that can exist in a globalized economy. We are trying to deal with the threats of the contemporary world, with political structures that are largely designed for the post-World War Two environment and military structures designed for the bipolarity of the Cold War.

We have got to break away from that mindset. In many ways we are in much more a sort of great game 19th century power shape in the world and we're going to have to relearn not only the use of military power, but soft power and the skills we lost in the second half of the 20th century in what now looks like the luxury of the Cold War. We're going to have to get them back if we're

www.chathamhouse.org.uk 10 Transcript: Protecting Future UK Security and Defence Interests going to actually be able to use the influences we should use as a country and in partnership with others.

Robin Niblett: Let me turn to a different issue right now, which is nuclear weapons. This is a period where we are basking in the positive aura of the START agreement between Russia and the United States; we have the NPT review conference coming up; a nuclear summit under Obama. But, as we look to the future, nuclear proliferation could become a reality, either as a result of Iran's steps, or other countries wanting to go in this direction.

I'd like to hear your views on the importance of Britain's nuclear deterrent, within the context of a world that may see nuclear proliferation, but also your views on missile defence. Is it ultimately something that is going to be vitally important to Britain's future security in a proliferating world? Where does one invest resources? Hugely expensive to move on with modernization, missile defence is a topic that has been widely discussed within the context of NATO's strategic concept. Your sense of nuclear weapons: what's most important from a British perspective?

Bob Ainsworth: I think we first of all ought to recognize that the efforts that have been made at countering proliferation have been more successful than most people thought that they would be a few years ago. If you went back 20 or 30 years, I don't think there were that many people that thought we were limited to the numbers of nuclear weapon states that we have now.

There are risks and tensions and the biggest single one I think is Iran, of course North Korea as well. But the consequences of Iran going nuclear will not be confined to Iran. Other Middle Eastern countries will feel that they have to respond and they will respond. We have to persuade Iran not to go down that path. It's a very big issue for us to deal with.

Of course in a proliferated world, nuclear defence may well become increasingly important but let's not give up on counter-proliferation. We in the P5 have to make our response as well. And we have to be credible in our response to non-proliferation. We've tried making unilateral reductions that haven't led to reciprocal reductions elsewhere. But we have to be prepared to engage with others and the P5 themselves have to pick up their own

www.chathamhouse.org.uk 11 Transcript: Protecting Future UK Security and Defence Interests responsibility to reduce and potentially eliminate nuclear weapons in the future.

Robin Niblett: Stretching out Trident, part of the answer to send the right signal in the context of NPT reviews?

Liam Fox: Remember we are continuing with this project at a lower warhead level that we had, so we're both within the letter and the spirit of the NPT. And I think it's essential that when countries like Iran are trying to develop the threat that we do not leave the UK vulnerable to nuclear blackmail. If you wait long enough, everything comes around in a circle. I came back to politics because I was fundamentally opposed to CND and the unilateralists then and I'm equally opposed to them now. I believe in multilateral disarmament. I think the START process shows that's the only way forward.

People say of course it's much too expensive; it costs 20 billion, but we're willing to spend 12 billion on the Olympics for three weeks, as opposed to 30 years of protection against nuclear blackmail. I think you pay your money and you make your choices on your priorities.

I absolutely agree with Bob on this point, that Iran is the single biggest threat and yet it's so little on the political radar. I think it's a very binary question. You're either going to allow Iran to become a nuclear weapons state, or you're not. I would say to those who are watching this debate that there are three reasons why we shouldn't allow it.

Number one: The nature of the regime. Leaving aside the human rights record, the suppression of the democratic movement in Iran, you have an increasingly militarized state with a hard-line theocrat at the top. I can't think of anywhere else where that threat is replicated.

Number two: This is a state where par excellence they're willing to export terror and instability as part of their foreign policy. I would not like to see fissile material added to that particular mix.

Thirdly: If Iran becomes a nuclear weapons state, Saudi Arabia, Turkey and Egypt will follow. We were talking about the end of the Cold War. It's 20 years since the fall of the Berlin Wall and we congratulated ourselves on how we stopped nuclear proliferation at that point. Surely we want something better to www.chathamhouse.org.uk 12 Transcript: Protecting Future UK Security and Defence Interests leave the next generation than a nuclear arms race in the world's most unstable region, which will be the unavoidable consequence of Iran becoming a nuclear weapons state.

Robin Niblett: Given that the level of seriousness you described there and that list of three topics which almost make this an existential threat, the implication is therefore that Britain should join the US in taking military action to prevent them if we can't...

Liam Fox: No, we begin the process as we should begin it; politically we try to apply pressure to Iran. I think it's inevitable we'll have to move to stronger sanctions. I think we should prepare for that. I think we should be preparing public opinion in Britain and in the rest of the EU, which may be key in this particular role in getting sanctions.

Robin Niblett: Sanctions, in a way, are a debate that does not involve the public. People think that sanctions don't affect us. But ultimately if we're saying that Iran with nuclear weapons is that much of a threat and the sanctions don't work, the implication is that we have to do something about it.

Liam Fox: I think what the public need to understand is this. While politicians in Britain… if you sit in Tel Aviv or Jerusalem, it looks very much like an existential problem. When people talk about wiping Israel off the face of the map, there are people in Israel who remember the last time someone said that and they tried to do it. It's a very different mindset and we need to understand that and try to, at the same time, understand anyone who has been in Tehran will know that the mindset is that anything that happens militarily from Israel would be pre-sanctioned by the United States and the UK, whether it is or not.

So the idea of unilateral action by Israel not drawing in other countries, particularly the UK and US is a non-starter. This is a real tinderbox. We have to be extraordinarily careful diplomatically and economically.

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Robin Niblett: Nick, Liberal Democrats, the importance of Trident for the future in this very uncertain world, a world where, as Liam and Bob both pointed out there is a huge threat. Surely we should be investing as much as we can into providing a truly credible nuclear deterrent?

Nick Harvey: There are, as you said in your introduction, both encouraging and worrying things going on at the same time. Certainly the progress being made between President Obama and the Russians, I think is a real cause for encouragement but it's quite right, as we've heard, that the risk of Iran or North Korea arming themselves would spark regional consequences in both cases which would make the world a great deal more dangerous to live.

What I think we should avoid doing now is jumping either to an overly optimistic or an overly pessimistic view of what the future might hold. We have got a nuclear deterrent at the moment which will serve us for the best part of another 20 years. I believe it is premature to decide now that come what may, in those 20 years, we will want to continue to be a nuclear power for another 30 years beyond that. Equally I don't favour taking any decisions at the moment that would close off the ability of a British government at that time to sustain a nuclear deterrent if they wanted to.

If you believe that the only way that you can possibly have a nuclear deterrent is by replacing the existing deterrent on a like-for-like basis, then you will find yourself persuaded to the notion that decisions must be made now. If you can even entertain doubt or sustain beyond 2030 a nuclear deterrent that was in any way different, then you would be sitting down now and looking at ways of keeping that option open for the future.

But without committing ourselves now to £104.2 billion of expenditure in today's money, and taking a stance that irrespective of what happens in the world we are going to be a nuclear power until 2060...

Bob Ainsworth: What Nick's effectively saying is nuclear disarmament...

Nick Harvey: That's not what I've said. Everyone has heard what I've said that's not it. www.chathamhouse.org.uk 14 Transcript: Protecting Future UK Security and Defence Interests

Bob Ainsworth: The contracts do need to be signed pretty soon. We didn't bring forward the White Paper in 2006 for the good of our health. If we had not done that, then we would have no submarine platform and all of the alternatives were laid out in that paper for people to make credible suggestions if they could. I have to say to you that other than a basically CND argument, we got no alternatives put forward for a lot of effort made by the then Defence Secretary and a lot of other people to engage people in a conversation at that time.

Just one thing I would say, to give, to pick Liam a little bit, you tried to, Robin, but he didn't respond, when you said stretching out Trident might be a solution to counter-proliferation... I'm not against stretching out Trident in terms of the decision-making if it's practical. But frankly it isn't practical, and to suggest that we are able to extend the life of our current submarines in the way that has been suggested is not something that we're going to be doing.

Liam Fox: I think certainly Bob and I would agree that we don't have a continuous at-sea credible nuclear deterrent for the UK. If you don't believe that, then you have to say 'if you don't believe in a nuclear deterrent, what sort of deterrent you want to have?'

Nick Harvey: There are other ways you could provide a nuclear deterrent. Obviously one of the ways you could do it would be to have a medium-range missile coming from a tactical submarine. I know there are those who are absolutely committed to replacing on a like-for-like basis are absolutely convinced that this is the only way to do it.

But it is not as Bob would have you believe, that it's only CND types who entertain these ideas. There is an intelligent body of opinion throughout the military world who agree that you do not have to do this in that one particular way, that there are other intelligent alternatives to look at. To conduct a Strategic Defence Review and omit from it the single most strategic decision that we're going to make and the single largest financial procurement that we're going to make in the next few years makes a complete mockery of the whole exercise.

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Bob Ainsworth: But the alternative that's just been talked about is, in order to be credible, the numbers will be very significant because of the vulnerability of the type of weapon that has been talked about. It is not a credible alternative.

Robin Niblett: Let's just stop here a moment because I think that at the heart of this is the issue of money. Which is the most important to spend on? I think I've now warmed it up for you, Sarah.

Sarah Montague: There are lots of questions thrown up there and we'll have plenty of time to go through those, because I'm going to go out for questions. We'll start with funding, and we'll get on to things like Afghanistan and nuclear, obviously those things will come up in funding. But let's try and talk about finances, because I don't know which one of you said, you pay your money, you make your choices, but all of you talked about adaptability, flexibility and whatever was required. We know from the Budget last week the day after the IFS came out saying, look, all of your parties are talking about ring-fencing health, education, overseas aid. Nobody is talking about ring-fencing defence. The IFS says 25 per cent cuts elsewhere. I am sure you are going to say that is not necessary but if it is 10, 15, whatever it is, something will have to go. Bob Ainsworth, what goes?

Bob Ainsworth: You can't start off by just accepting that scenario.

Sarah Montague: We all know there will have to be cuts.

Bob Ainsworth: We have to conduct a Strategic Defence Review, we, unlike Liam have said that the budget will be protected for next year and it will increase.

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Sarah Montague: What I want you both to say, is you talk about protecting... don't tell me what you want to protect, tell me what goes.

Bob Ainsworth: Well I can't do that until we get... Look, a Strategic Defence Review has got to be conducted in a proper manner. We've done the Green Paper; we've done as much as we can in order to throw these issues, to analyse them and throw them into the public domain. And capability comes at the end, not at the start. We've got to look at our security, what we're prepared to pay. Yes, in a difficult financial situation.

Sarah Montague: If Labour are re-elected, and the Chancellor comes to you and says 'what can you offer me?' what will you say to him?

Bob Ainsworth: I will say to him that we'll conduct a Strategic Defence Review, we will look at our defence needs, we will have that debate with you and set priorities. At the end of that process, the capabilities we will need will flow from that conversation. That is the decision-making process that we want to involve the country in and we've tried to do in the Green Paper process.

Sarah Montague: The emergency budget in a future Tory government, if there is one, when George Osborne comes to you and says 'what can you give me?' What will you tell him?

Liam Fox: Well, we've said today that in the budget, if we win next month, there will be no change in the defence budget at all for the first year.

Sarah Montague: So a freeze, effectively a cut in terms of inflation? www.chathamhouse.org.uk 17 Transcript: Protecting Future UK Security and Defence Interests

Liam Fox: Keeping the budget as set out in the Government's current spending plans for the next year.

Sarah Montague: What can he promise will happen in 2010?

Liam Fox: We've kind of gotten to the beginning of this debate. We do have to have a proper debate on the Defence Review, but here's how the Defence Review... The Defence Review needs to be set out, as Bob said, in a logical fashion. You begin with what are our national interests? What are the threats to our national interests? Then what military capabilities do we require? Then you look at the equipment programmes. Then you get an idea of what you need, and you can work out the financial envelope.

Sarah Montague: I might be being very rude here, but I am going to push it because we're limited on time.

Liam Fox: The bottom line is we've got a number of equipment programmes in the pipeline. The reports we have say they are unaffordable if we keep doing what we're doing just now, and try to do new things for the future. The whole point of the Defence Review is to look at the future threats. What do we need to do in the future? The point we're making about Cold War legacies. What do we not have to do anymore that we're currently doing? That's, I think, where the big decisions inside the SDR are going to come.

Sarah Montague: Is there any difference between Labour and Conservative on what you are prepared to say?

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Liam Fox: Well, we don't know what's going to come out of the Defence Review.

Sarah Montague: Well, if that's the answer, that's the answer. Nick Harvey?

Nick Harvey: There's no point conducting a Strategic Defence Review which is meant to last a year or so if we'll decide before beginning it what we're going to cut out.

Sarah Montague: I just thought that you three were in a place, with your input to the Defence Review, to kind of guide us as to what your contribution would be.

Nick Harvey: The Ministry of Defence has got the best part of a £10 billion black hole in its budget at the moment. It's going to be a devil's job to get that in balance before the Chancellor comes knocking at the door asking for help with the budget.

Sarah Montague: Let's take some questions, because I'm clearly having no luck.

Question 1: I'm intrigued by this question. Are all three minsters in waiting actually saying that they will not have an envelope from the Chancellor from which to do the SDR and that it's all going to be driven exclusively by policy tools and the Chancellor will pay whatever answer you come up with?

Bob Ainsworth: It's naïve to think that resources isn't going to be a big part of this but it is equally, it would be pretty damning if it's the only part of the process. Now, we did the Green Paper in order to start a debate, which we have done. That www.chathamhouse.org.uk 19 Transcript: Protecting Future UK Security and Defence Interests cannot be totally dominated by the financial resources; of course it's part of it. But our security needs, future security threats, all of this have got to be part of the thinking that goes into the Strategic Defence Review.

Liam Fox: But there are two ways in which we've carried out defence reviews since the war. Either beginning with a foreign policy baseline, the one we've sort of set out this evening, and then you end up with a real debate with the Treasury about how much of this can I afford. Or, you begin with the money and say 'what can I buy for this', in which case you will unavoidably have foreign policy implications you didn't set out to have. One is more honest than the other, but it's almost more painful.

Nick Harvey: If we start out with the envelope, it will be a salami slicing exercise, it will not be a strategic review. The financial part, as Liam quite rightly says, comes at the end.

Question 2: I like what you say about threat-based Strategic Defence Review, but we're all worried that you're going to let the political concerns of inter-service rivalry get in the way of true strategic threat-based thought when you come to your Strategic Defence Review. Can you address those fears?

Liam Fox: Yes. Because I think it's partly how you conduct the review. It's about the process to make sure it's properly politically driven. It includes that personnel that you set in the room, it also is the writing instructions the review has. If you set them out very clearly, with a very clear foreign policy baseline, I think you can control the process.

I don't think that these are necessarily the biggest problems we'll face. I think there is a bigger problem in terms of shaping how much we spend on future threats, on cyberspace, on space, for example, which do not involve that particular rivalry. In many ways, deciding how many JSFs you have is an easier decision than how much you invest in some of these new threats, and that will be difficult. www.chathamhouse.org.uk 20 Transcript: Protecting Future UK Security and Defence Interests

Bob Ainsworth: I think the biggest worry will not be what you've said in terms of inter-service rivalry dominating this process. The biggest worry will be, we have to avoid salami slicing. I don't think there are large parts of defence that will stand just salami slicing. We need a proper strategic look at what we continue to provide, what we cannot provide, what we need to provide for new threats, and if we're not prepared to do that, we will fail our country at this time.

Question 3: I have a concern that we are going to be constrained in our SDR by political worries about the industrial base, and about the public's perception of the future of our services and not the threat to our nation. I like what you're saying, I just hope you're right.

Question 4: My son is in the army and I know we have very proud services, but just speaking about inter-service rivalry, can you see that in five years we would just have combined the three forces into one? What do you think the advantages and disadvantages might be?

Nick Harvey: I know people suggest this from time to time and they say that three forces put together are smaller than the US marine core in numbers, but I think that an incredible amount of time, energy, resource and emotion would be wasted trying to drive them together and it would be devastating in its impact to ignore the cultural and operational differences. But there is an imperative getting the three forces working together as effectively as we possibly can, and I think quite a lot of progress has actually been made recently in that regard, and that we're working together...

Sarah Montague: But isn't that only because it got so bad, Bob Ainsworth?

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Bob Ainsworth: No no no. It's going to continue in some way or other, but the ethos that we get from the three services is something we'd throw away at our peril.

Sarah Montague: Do you think we lost something with the changes in the regiments?

Bob Ainsworth: I don't think so, and I think some of the new regiments will develop the same kind of history over time. Some of the heroism we're seeing in Afghanistan will lay the basis of great pride in some of the newly formed regiments.

But that isn't to say that the inter-service file will stay exactly where it is now because it hasn't over time and it won't be sensible to keep it there. We now do... the joint helicopter force is the best example of where we'd had to do things on a tri-service basis and we've gained greatly from doing that.

No, I don't think the answer can be yes. I think we have to have those three services; we have to continue to get the huge gains in terms of ethos and buying that we get from our young people from those three services but there are some aspects of what we do that it will be sensible to bring together as we have done in helicopters and we have to be open-minded about that.

Liam Fox: The answer must be unequivocally no. And I think that you interfere with the emotional links that people have and the things that motivate our armed forces at your peril. If you think it's a very good idea to amalgamate, go and ask a Canadian.

Question 5: All three of you seem to be in agreement that it is almost impossible to see and recognize the threats coming before they arrive. Given that statement, do we need to increase the amount of investment that we place in the collection and analysis of intelligence?

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Liam Fox: I remember when I was, I'm not sure I should say this, when I was a junior minister in the Foreign Office back in 1996 I remember writing a memo saying 'if we degrade our ability to gather and interpret human intelligence, at the current rate, we will be unable before very long to deal in a cultural and political context with information that comes in'. And now we can read every number plate on every car in Iran by satellite, but we don't really know who to talk to. I don't call that an advance.

I think we do need to recognize that in an asymmetrical threat environment where you've got increasing levels of hybridity in terms of how you might face threats, intelligence is key, whether that's in international or domestic security. Yes, we have to give that as much priority as we do other parts of our defence and security framework.

Sarah Montague: We're up against the funding problem again, though, aren't we?

Liam Fox: It's a choice within it. You have to see defence and security increasingly as part of the same continuum. It's not a choice between security and defence, they are increasingly one and the same and we need to make better use, bring our intelligence services closer together, to get better value for what we spend on intelligence. Anybody who thinks that you can have any amount of hardware and it will improve your security, without having sufficient intelligence is making a fatal flaw.

Bob Ainsworth: Ideally, yes, but more spent on a lot of areas, ideally yes. The key to getting maximum value for money is to join up your efforts across government and to do that as well as you can. We've done that through the national security strategy. We've got to make sure that our agencies, the GCHQ, intelligence, are all working together. And we must be mindful as well that we cannot do this on our own, that we have a close relationship with the US for one. That is very important to us, and that we gain greatly from it. I heard somebody say this 'special relationship is some kind of romantic notion that we ought to walk away from'. I've got no romantic notions about the special relationship, but in

www.chathamhouse.org.uk 23 Transcript: Protecting Future UK Security and Defence Interests the world in which we live, our relationship with America is very important to us.

Nick Harvey: Intelligence is something the British are traditionally very good at. Diplomacy is something we're good at. And I think that both are areas that we ought to beef up. Yes, it costs money; there's an opportunity cost to everything. But actually both intelligence work and additional diplomatic effort are both quite cheap by comparison to heavy chunks of metal. I think if we are deciding where priorities should be, they are both things that deserve a considerable boost and I abhor cuts in the direction of the Foreign Office.

Question 6: Speaking here the other week, Mr Miliband stressed the need for security as one of the first and most important parts of future British foreign policy. In 1982, we spent 5.19 per cent of our GDP on defence, now I believe it's between 2.3 and 2.6 per cent. Why are we seeing caps on the defence budget? Why do we not make a political decision and state that cuts, if they must be made, must be made elsewhere and that the national defence must be paramount?

Bob Ainsworth: First of all, let's say that we spend more than most other countries in terms of the proportion of our GDP and as well in real terms. We have one of the most capable armed forces in the world, so let's not walk away from those two facts. And we have to live in the world as it exists, and compete with other people and so we can't allow a total disproportionality to grow out of that. I would say to you that we have to win those arguments in the wider public debate.

As Defence Secretary, I would like the freedom to be able to spend a lot more, but I know the issues that I get from my constituents and others get and the pressures that there are on the public finances and I'm not naïve about that.

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Sarah Montague: What do you think about the fact that it was 5.19 per cent, and now it's 2.3 per cent? Yes, there are other areas that are competing. But the pie has been getting bigger, why has defence got smaller relatively?

Bob Ainsworth: There has been real terms increases in defence spending over the life of this government, and that's not counting the additional money that we've had for operations in Afghanistan. Real terms increases of almost a billion pounds; of over 10 per cent.

Liam Fox: First of all, on the figure of 5.1 per cent, we were in the middle of the Cold War. I don't think you can just pluck a figure out of the air, you also have to be careful with GDP figures, because GDP spend on defence will probably go up this year because GDP is going down because of the recession, so that's a dangerous game.

Tony Blair said, at the end of his premiership, in one of his many farewell performances, that Labour had kept defence spending constant at around 2.5 per cent of GDP, if you included what we spent on Iraq and Afghanistan, which said to me we were fighting two wars on a peacetime budget.

I think it's dangerous to simply stick to that figure. Inevitably, there is a clash. Inevitably things get tight for those of us who believe that defence is the number one priority to fight our corner. It will have to be a fight when we get to the end of the Defence Review. None of us are naïve enough to think we can avoid that.

There is also how we use that money. McKinsey, a few weeks ago, produced very interesting figures. Compared to other countries like us, we were spending more money on administration than benchmark countries, more money on maintenance, and less on new equipment. There are big debates we've gone down to into how we use the money as well as the very relevant argument about how much money we actually spend.

I didn't buy into all of what McKinsey said, but I thought there was at least the basis for a very interesting debate about how we spend our money in this country compared to others.

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Bob Ainsworth: I'd look very carefully at the McKinsey report, if I were you, Liam. They use the benchmark on maintenance of deployable forces as Greece. I don't know how you do that and come up with anything worthwhile. Science spending is included in administration. This is not a very credible piece of work.

I think we ought to bear down on administration, but I think the notion that you can walk into the Ministry of Defence and get rid of a load of civilians without having to replace some of them with uniformed people which will actually cost you more is something we have to be careful about. We tried to relieve our armed forces of those unnecessary burdens by civilianiZing some of the tasks. There are some nice easy shots to be had that won't add up when it comes to actually putting them into force.

Nick Harvey: This isn't the first time that Liam and I have shadowed each other. When we were running into the 2001 General Election we were both covering Health. At that time, the NHS spent about £40 billion a year. Today it's about 110, something like that. The fact is that during the explosion of spending that took place from 2001 onwards, defence did not get its share despite the fact that we went into Afghanistan and Iraq. But we can't rerun history. Those boom years are gone and what we're facing now is a series of very lean years.

The question is why are we countenancing defence cuts, I don't think any of the three of us have said that. But what we are all recognizing is that at the end of this Strategic Defence Review when these hard debates have been had, we'll have to fight to get the resources we need. I do not accept that we will have to countenance defence cuts.

Liam Fox: We'll have to fight them very hard. We're living in a period where the debt... people need to understand the economic context of the election. It took us 2006 years to run up the first 450 billion of public debt; it's taken us four years to run up the second 450 billion. This is not a happy economic environment.

Question 7: President Obama has said that troops in Afghanistan are set to draw down in the middle of next year. Are any of you three gentlemen willing to say when www.chathamhouse.org.uk 26 Transcript: Protecting Future UK Security and Defence Interests

British forces will start to draw down? Particularly given the strain on other parts of the military that this focus on the Afghanistan effort is having on morale, training, etc?

Liam Fox: Yes, we should start to withdraw our troops when they have completed their mission. President Obama has made his decision. We should withdraw British troops when we have reached the position that we set out to achieve, of degrading the threats to Afghanistan and Pakistan to a level that they could be managed by their own security forces. I don't think it will five or 10 years; I think General McChrystal talking about four to five years is a far more realistic timescale to see British troops leaving in a combat role. I think they'll be there in a supporting role.

Bob Ainsworth: When he said that, it was in the context of a decision he was taking at the time to massively increase the troop numbers in Afghanistan. So he was putting an additional 30,000 troops into Afghanistan and that he'd like to see some of those beginning to draw down in 2011. That's the beginning of a process. The process has got to be conditions-based, and to try to set some artificial timetable on it will not do our troops any good nor the Afghan government.

Sarah Montague: The Liberal Democrats have always been much more lukewarm about Afghanistan, perhaps a little...

Nick Harvey: We have supported the Afghanistan mission from the beginning but we were hostile to Iraq.

Sarah Montague: Even with Afghanistan, one sensed from Nick Clegg that he was not entirely comfortable with this.

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Nick Harvey: Last summer we became very anxious that the government was not giving practical effect to what they had been talking about earlier in the year, and that was embracing a political agenda alongside the military one. I'm very pleased to note progress on both sides of the Atlantic on that. We are very much more comfortable with what is now happening.

The key point in Obama's announcement was the word 'beginning' to, and I think... I don't think we'll see a significant drawdown of British troops in the course of the next Parliament.

Sarah Montague: This suggestion that General McChrystal may ask the British to move out of Helmand and perhaps stay within Kandahar. How, if that request was made, how would the British respond?

Bob Ainsworth: There is a lot of thinking and talking going on in military circles on how best we cover the ground in Afghanistan. And there have been some changes as a result of that. Further adjustments to the line between our forces and American forces in order to try to make sure that there's balance in force density are a very real possibility.

If we were to contemplate, though, moving from Helmand to another part of the country, I don't think we should say categorically no, but it would take some persuading. We've been there since 2006 and developed a deep understanding of the territory and the people who live there. Why would we want to throw that away, after all the investment in facilities that we've made over time?

Question 8: There is a very interesting story in India which occurred during when British were ruling. World War II was going on, there was a old lady, didn't know what the war was and who is fighting whom. She only knew that she had a son who was very foolhardy and arrogant and tough, who was recruited by British and he was sent to Europe to fight against Germany. She only knew that it was only her son who was wrestling with Hitler who is equally foolhardy

www.chathamhouse.org.uk 28 Transcript: Protecting Future UK Security and Defence Interests and arrogant, and she said 'I am worried what will happen to this war, this wrestling match between my son and Hitler'.

There are equally proud, arrogant, and foolhardy people like the Anglo-Saxon people are. I worry what will happen to this. You said we will leave when our mission is completed. People are confused as to what the mission was in the first place. How can you kill those people who are prepared to fight to death? How can you leave without facing humiliation?

Sarah Montague: Perhaps the question can best be worded, what is the way that we best get out? I hope I'm paraphrasing correctly.

Bob Ainsworth: Getting Afghanistan to a position where they're able to defend their people. We're not about killing all of the Taliban. We're about winning the people over, protecting the people, and that is how we'll succeed in Afghanistan.

Liam Fox: We have to be very clear about why we're there. We're there for reasons of our national security. I think it's correct that we do not allow Afghanistan again to be used as a base in which terrorism can be launched. Nor can we even contemplate the potential collapse of Pakistan, which is the geopolitical threat that is actually there. It is about degrading the threat so that the Afghan and the Pakistan authorities can deal with it themselves, without reference. That is a strategy of containment, about degradation of the threat. It's not about building some Jeffersonian democracy in Afghanistan in a decade. We have to be realistic about our timescales and objectives. Then we'll have an idea of when we'll be successful.

Nick Harvey: We're not there to create a Western democracy. It took centuries to create ours, imperfect though it is. We're there to help the Afghans build something strong enough that it won't fall over when we leave. I don't believe we'll leave in humiliation but it's not the purpose to inflict humiliation either.

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Question 9: Liam Fox talked about the Cold War being a battle over ideology and the West, he said, won that because of their ideological commitment. But of course we know that the Cold War also spawned a welter of proxy wars and much of the developing world is still recovering. What do the panel think are the ideologies at present that represent such a threat that it might be worth tearing the world asunder again? And how do they avoid sending out the signals that the new enemy is those who take the Islamic faith seriously?

Nick Harvey: We have to be careful with how we approach this and the language we use and the way we put things. I don't sense that I'm locked in ideological warfare with Islam. There are certain people in parts of the world who entirely corrupt the Islamic principles to pursue their own political agenda. We've got to be extremely careful about talking up the rhetoric of ideological conflict, because if we don't watch it, we will drive millions of good middle-of-the-road Islamic people into a camp to which we're opposed. We embrace this sort of analysis, I think, at our peril.

Liam Fox: I think some of the danger is in some of the loose language that our questioner used. Maybe it was just to promote debate. But, we are not dealing with the threat of people who take their Islamic religion seriously. The threat is of a violent, anti-Western, heretical version of Islam which bears very little resemblance to the religion itself. Let's not confuse one with the other. Our quarrel is not with any faith, our quarrel is with people who use it as an excuse to carry out violence.

Bob Ainsworth: I spent two hours yesterday afternoon in a very large gathering of Muslims in my constituency celebrating the birth of the Prophet Muhammed. There is as much worry in the Muslim community about the way that their religion is misused and that is, we have a growing concern and a growing insistence that they will tackle it. It's not a clash between Islam and the rest... but Islamist-based extremism is the biggest threat we face at the moment. If we deny that, we're denying reality.

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I am talking about the Muslim community and the way that they increasingly recognize the way that some of the young people have been misused and the way that their religion has been used to distort the minds of some of their young people.

Liam Fox: And there is a growing awareness in the Islamic world about the threat that groups like Al Qaeda pose to the stability of other Islamic countries. I've just come back from Saudi Arabia and they are now understanding the threat posed to their own stability and security.

Question 10: I'd like to ask whether you support the idea of Generals and Admirals going second class on the railways and would they, out of solidarity, go second class themselves?

Bob Ainsworth: I have no problem travelling second class, I have done regularly. I don't see any reason why Generals shouldn't do the same. I don't travel second class at the moment because I'm subject to a security regime. But I have travelled second class, I did in my last job... I did when I was minister of the armed forces and most of my ministerial team travel second class. I've got no objection to it, and unlike Nick Winterton, I actually think you meet a better class of people at the back of the train than you do in the front.

Liam Fox: I think it's a sad day if you think that the way you save money in your defence budget is to force people who've sacrificed their entire careers to get to the top of the armed forces to travel second class. I think it's just a very misplaced, politically correct thing to do and I think most people think it's cheap and unnecessary.

Nick Harvey: I think it depends what they're doing and where they're going. If they've got a long journey and they're on business, and they need to do some work then www.chathamhouse.org.uk 31 Transcript: Protecting Future UK Security and Defence Interests they should be travelling first class. If they need to make a short journey from A to B, then there's no reason not to travel second class. Same as anybody dealing with public money.

Ends.