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Select Committee on Defence Sixth Report

2 Core Tasks and Inquiries

3. This part of our report describes how we sought to cover each of the core tasks recommended by the Liaison Committee.[1] A table summarising this can be found at Annex 1.

Examination of Government and European Commission policy proposals

4. The Liaison Committee's Core Task 1 encourages us to scrutinise policy proposals from the UK Government and the European Commission in Green Papers, White Papers, draft Guidance etc, and to inquire further where we consider appropriate.

THE FUTURE OF THE UK'S STRATEGIC NUCLEAR DETERRENT: THE WHITE PAPER

5. In December 2006, the Government published a White Paper setting out its proposals for the future of the UK's nuclear deterrent.[2] It announced that there would be a three-month consultation on the proposals contained in the White Paper and that these proposals would be debated on the floor of the House of Commons in March 2007.[3] Following the publication of the White Paper, we announced that we would conduct an inquiry examining the arguments put forward by the Government for the retention and renewal of Trident, the timing of decisions, the role of nuclear deterrence, the international legal and treaty aspects of the decision, and alternative deterrent options and costs.

6. Our inquiry into the deterrent White Paper was the focus of our work in the early part of 2007. We took evidence from campaigning organisations, academics and commentators, think tanks, legal experts, and the MoD. Our report was published in early March 2007, a week before the House debated the White Paper.[4] In our report, we did not express a view on the merits of retaining or renewing the UK's nuclear deterrent. Rather we sought to inform the public and Parliamentary debate by exploring the key issues and questions which needed to be addressed in that debate. We commended the Government for exposing its proposals for renewing Trident to public and Parliamentary debate, which previous Governments had not done, but we also highlighted a number of areas in the White Paper where we believed further information was required before MPs considered the issue in the House of Commons. In particular, we called upon the Government to explain: why decisions were required at that time on the future of the Trident D5 missile; the operational significance of the reduction in warhead numbers proposed in the White Paper; how it determined what constituted a 'minimum' deterrent; how it would ensure that the renewal of the deterrent would not come at the expense of the conventional capabilities required by the UK's Armed Forces; the anticipated procurement and through-life costs of a Trident successor; the costs of any life-extension of the current Vanguard submarines, as well as the costs of decommissioning the existing nuclear submarine fleet. We said it was important that the Government responded to these issues before the debate in the House of Commons. The MoD provided an interim response to our report by means of a Written Ministerial Statement two days after the publication of our report and before the debate[5]; its full response was provided in the usual fashion.[6]

7. Our report on the deterrent White Paper was the culmination of our series of inquiries into the future of the UK's strategic nuclear deterrent, which we had launched following the establishment of the Committee in July 2005. Our first report, dealing with the strategic context within which decisions on the future of the deterrent would be taken was published in June 2006.[7] Our second report, exploring the UK manufacturing and skills base issues relevant to the decision on whether to retain, renew or abandon the deterrent, was published in December 2006.[8] We intend to monitor closely the implementation of the proposals contained in the White Paper over the coming years.

THE DEFENCE INDUSTRIAL STRATEGY: UPDATE

8. In our report on The Work of the Committee in 2005 and 2006, we stated that we had conducted an inquiry into the Government's Defence Industrial Strategy (DIS) White Paper, which had been published in December 2005 and had set out the Government's vision for the future of the UK's defence industry.[9] The then Minister for Defence Procurement, Lord Drayson, stated that 2006 would be the year the Strategy was implemented. In our report, we said we would conduct a short, follow-up report to assess the MoD's performance and progress in implementing the Defence Industrial Strategy. We took oral evidence from the MoD in December 2006 and published our update report in February 2007.[10] We concluded that, overall, good progress had been made in the implementation of the DIS, but we also highlighted certain areas of concern, and commented on slow progress in reshaping the maritime sector, and we argued that the MoD's new long-term partnering arrangements—intended as an alternative to competitive procurement—needed to be incentivised.

9. The MoD had been expected to publish a revised version of the Defence Industrial Strategy in December 2007 and we had planned to take evidence on this at that time. We now expect the revised Strategy to be published by Spring 2008. We intend to monitor the revised Strategy closely.

UK/US DEFENCE TRADE COOPERATION TREATY

10. As a Committee, we have a longstanding interest in defence co-operation with our allies. In June 2007, the UK Prime Minister and the US President signed the UK/US Defence Trade Cooperation Treaty. Published in September 2007, the Treaty established a framework for defence trade cooperation between the United Kingdom and the United States of America.[11] Although treaties are ratified by the Government under the Royal Prerogative, rather than by Parliament, by Government undertaking (the 'Ponsonby rule') treaties are laid before Parliament for 21 sitting days before ratification to enable Parliament to consider and comment on them. At our request, the Government extended the period of time available to Parliament to scrutinise the UK/US Defence Trade Co-operation Treaty. This allowed us to conduct an inquiry into the Treaty. In November 2007 we took evidence from defence companies as well as the MoD and the Cabinet Office and published our report in December 2007 which recommended early ratification of the Treaty.[12]

STRATEGIC EXPORT CONTROLS

11. In 2007, we continued our contribution to the 'Quadripartite' Committee on Strategic Export Controls, together with the Members of the Foreign Affairs, Trade and Industry (now Business, Enterprise and Regulatory Reform), and International Development Committees. The Quadripartite Committee carries out detailed scrutiny of the Government's controls on exports of equipment and technology with a military application. In August 2007 it produced a report on the operation of the Export Control Act 2002.[13]

12. The Quadripartite Committee's 2007 report provided a comprehensive assessment of the Government's review of export controls. It assessed the Export Control Act 2002, its enforcement, the economic impact of the legislation and its effects on the business community, and identified gaps in the legislation. It also considered the Government's Annual and Quarterly Reports on Strategic Export Controls. It concluded that the Government's review had been a largely constructive process but it also called upon the Government to use the review to plug holes in the controls on arms exported from the UK to prevent them falling into the wrong hands.[14]

EUROPEAN PROPOSALS

13. We have maintained a watching brief on defence-related developments in Europe, by way of a European Bulletin circulated to the Members of the Committee. This has focused, in particular, on issues surrounding the European Defence Agency (EDA) and the European Security and Defence Policy (ESDP), which are also being considered in our inquiry into The Future of NATO and European Defence. We wrote to the MoD requesting advance briefing and subsequent de-briefing on ministerial meetings with other European governments; we understand that there can be time constraints in advance of such meetings, but we welcome the efforts of the MoD to keep us informed of their outcome and look forward to developing this arrangement constructively.

Examination of emerging and deficient policy

14. Core Task 2 encourages us to scrutinise Government policy and to identify where a Committee inquiry would be worthwhile.

THE FUTURE OF NATO AND EUROPEAN DEFENCE

15. In 2002, our predecessor Committee conducted an inquiry into the future of NATO.[15] In light of subsequent developments—the NATO deployment to Afghanistan, the developing agenda of NATO transformation, the further geographic expansion of the Alliance to include additional former Warsaw Pact countries, and the changes in the strategic context within which the Alliance operates—we believed it was important to revisit the issue and to reconsider NATO's future in light of these developments. We decided it was also important to do this in the context of the changing role of the European Union in defence matters. In December 2006, we began our inquiry, The Future of NATO and European Defence. Our inquiry, which was launched following the NATO Summit at Riga, has sought to provide a comprehensive analysis of the Atlantic Alliance, its role, purpose and prospects. It has been considering what role NATO should play in the future of UK and European defence, whether NATO has a viable, long-term future, and what the relationship should be between NATO and the European Security and Defence Policy. In 2007, we conducted an extensive programme of oral evidence, taking evidence from academics and expert commentators, journalists, retired UK military commanders, and, in January 2008, from the Secretary of State for Defence. We also undertook a series of visits to European NATO capitals, to the United States and Canada, and to Georgia, an aspiring member of the Alliance. We have now completed our visits and our programme of oral evidence and intend to publish our report in early March 2008 ahead of the NATO Summit at Bucharest.

UK DEFENCE: COMMITMENTS AND RESOURCES

16. In February 2007, we began an inquiry into the future mission and make-up of Britain's Armed Forces and the resources needed to sustain those Forces. Our inquiry, UK Defence: commitments and resources, has been looking at whether the assumptions made in the Government's Strategic Defence Review in 1998 and the Future Capabilities White Paper in 2005 still hold good when looking at Britain's place in the world in ten or twenty years time. It has been examining how the demands on, and the structures of, the Armed Forces have changed over the past ten years, and whether they are best configured to meet these new demands. It has also considered whether current commitments are sustainable without an increase in resources. As part of this inquiry, we held an evidence session with the Chief of the Defence Staff (CDS) in early March 2007, and with expert commentators, defence economists and retired military officers later that month. This inquiry is ongoing and will take into consideration the implications of the Government's Comprehensive Spending Review, published in October 2007.

17. Our inquiry has been held up by the substantial delay encountered in receiving written evidence from the MoD. In February 2007, we wrote to the MoD with a series of questions, for which we requested a response by 20 March 2007. Following our evidence session with CDS in early March, we wrote to the MoD with a further set of questions and asked for responses to these by 26 March. The MoD submitted responses to our questions on 14 May 2007, substantially after the deadline. But after analysing the responses, we felt that some of the answers were inadequate and asked for further clarification of these on 23 May 2007 and requested responses by 7 June. The MoD submitted its answers to these questions on 3 January 2008, some seven months after the deadline. The MoD was extremely slow in responding to our request for written evidence on our inquiry into UK Defence: commitments and resources and this significantly delayed our inquiry.

DEFENCE EQUIPMENT AND MILITARY CAPABILITIES

18. We also examined Government policy in a range of specific areas dealing with military capability. In 2007, we held an inquiry into the Future Rapid Effects System (FRES), the MoD's programme to meet the Army's requirement for a new generation of armoured vehicles—a requirement identified in the 1998 Strategic Defence Review. We concluded that the programme was a sorry story of indecision, changing requirements and delay and that, after nine years in development, the FRES programme remained nothing more tangible than a concept. We called on the MoD to decide where its priorities lay. We raised concerns that interim purchases of Mastiff and Vector armoured vehicles were welcome but warned that if the in-Service date for FRES slipped any further, additional interim purchases might be required at significant cost, with knock-on effects on the rest of the MoD's procurement programme. Our report was published in February 2007.[16]

19. We also held an inquiry into the Government's progress in developing the UK's strategic lift capability—the capability to transport personnel, equipment and stores from the UK to operational theatres across the globe which, in turn, underpins the UK's expeditionary policy. Our inquiry assessed the Government's performance in meeting the requirements for strategic lift which it outlined in the 1998 Strategic Defence Review. We concluded that that MoD had made good progress in improving its strategic sea-lift but that progress in improving strategic air-lift had been less good. Our report was published in July 2007.[17]

WELFARE OF THE ARMED FORCES

20. In 2007, we held two inquiries into the welfare provisions for the UK's Armed Forces. Our first inquiry, into The work of Defence Estates, considered the performance of Defence Estates, until April 2007 an agency of the MoD, and highlighted a number of concerns. We concluded that some of the living accommodation for Service personnel was "in extremely poor condition" and that while Defence Estates had made considerable progress in recent years, the scale of the challenge of improving accommodation facilities remained enormous. We said the MoD had to do more if Service personnel were not to be left in sub-standard accommodation for many years to come. We argued that a substantial increase in investment in the defence estate was required and that the MoD should resist the temptation to take back from the estates budget when the defence budget is stretched. Our report was published in September 2007.[18] This report began as part of our ongoing scrutiny of Defence Agencies, further details of which are provided in paragraphs 37 to 39.

21. Our second welfare inquiry has examined the provision of medical care for the UK's Armed Forces. The purpose of our inquiry has been to examine the medical care provided to the Armed Forces, focusing on three main issues: healthcare for Service personnel, both at home and overseas, and the arrangements for those returning from overseas postings; medical support for operations, including the treatment of injured personnel—from immediate treatment in the theatre of operations to after-care in the UK—and the facilities provided for them; and how medical services for the Armed Forces are delivered, in particular how the MoD engages with the NHS to provide healthcare. We intend to publish our report in February 2008.

CURRENT OPERATIONS

22. Our inquiries into military operations may also be said to fall into this category. We published a report on UK operations in Afghanistan in July 2007 and on UK land operations in Iraq 2007 in December 2007.

23. On Afghanistan, we concluded that despite the outstanding commitment of UK Armed Forces in Helmand Province, NATO as a whole had not provided the required numbers of troops agreed under the Combined Joint Statement of Requirements and we expressed our deep concern at the apparent reluctance of some NATO allies to provide troops to NATO's International Security Assistance Force (ISAF) which we believed was undermining both NATO's credibility and ISAF's operations. We also called upon the Government to press the United Nations to appoint a high-profile individual responsible for coordinating the international effort. In addition, we highlighted our concerns with the development of the Afghan police force, with the slow pace of reconstruction and development, and with the communication of the counter-narcotics policy in Afghanistan.[19]

24. On Iraq, we welcomed the apparent improvement in the security situation following the surge of US Forces and we noted the dramatic reduction of violence in the UK area of operations in South Eastern Iraq. But we warned that there had been no corresponding reduction in the number of attacks on the civilian population and that, though improved, the security situation continued to cause concern. We said that the development of the Iraqi Security Forces was fundamental to the long-term security of Iraq and to the drawdown and eventual withdrawal of UK Forces. While there had been progress in improving the performance of the Iraqi Army, the police remained a source of deep and continuing concern. We noted the Prime Minister's announcement that the Government planned, from the Spring of 2008, to reduce UK Forces in Iraq to 2,500. But we said important questions remained about the sustainability of a force of this size. And we said that unless UK Forces in Iraq were capable of doing more than simply protecting themselves at Basra Air Station, the entire UK presence in South Eastern Iraq would be open to question.[20]

THE IRAN HOSTAGES INCIDENT: THE LESSONS LEARNED

25. In March 2007, 15 Royal Navy personnel from HMS Cornwall—a Royal Navy Frigate, deployed with the Coalition Task Force in the Northern Gulf—were captured by the Iranian Revolutionary Guard while conducting a boarding operation on a merchant vessel in shallow waters near the mouth of the Shatt al-Arab waterway, between Iraq and Iran. They were taken to Iran and detained until early April 2007. In mid-April the Secretary of State for Defence announced that he had appointed Lieutenant General Sir Rob Fulton RM (retired) to inquire into the operational circumstances and factors leading to the capture of the Royal Navy personnel. He said that, because the inquiry would consider operationally sensitive material, it would not be possible to publish all the conclusions, but that they would be presented to the Defence Committee in full.

26. We undertook an inquiry into the incident, The Iran hostages incident: the lessons learned. Unusually, because of the classified nature of the material presented to us, we had to conduct our evidence sessions for our inquiry into The Iran hostages incident in private. We had some reservations about conducting scrutiny on terms of the Government's choosing.

27. Our inquiry sought to: scrutinise the Fulton Report on behalf of the House of Commons and to establish whether it was comprehensive and its recommendations sufficient; ensure that the MoD's related action plan was adequate and properly implemented and resourced; scrutinise the Hall report into the sale of the stories of the Royal Navy personnel to the press upon their release; and ensure that the lessons of the HMS Cornwall incident had been fully learned and disseminated. Our report was published in December 2007.[21]

28. We found the MoD's initial response to our inquiry to be inadequate, and sensed that the Department had not anticipated that we would pursue an inquiry in depth. Noting our persistence, the MoD responded positively to our continuing inquiries and was helpful in providing full answers to our questions in writing and in offering high level briefing. We concluded that the Fulton Report, and the evidence provided to us in support of it, contained a depth of operational detail which it would have been damaging to have made public. This made it difficult for us to demonstrate openly the grounds on which we reached our conclusions. In our report, we assured the House of Commons that we had scrutinised the report thoroughly and we wrote to the Secretary of State for Defence with a number of classified conclusions and recommendations.

Examination of legislation and of specific output from the Department

29. Core Task 3 calls for Committees to conduct scrutiny on any published draft bill within our responsibilities. The Liaison Committee's Core Task 4 calls for us to develop a framework for being informed of secondary legislation, circulars and guidance, treaties and previously identified casework decisions, so that they can be drawn to our attention where necessary. The MoD has presented no draft legislation to Parliament since July 2005. The MoD has provided us with copies of all secondary legislation laid. We have developed a system of scrutiny, by which occasional bulletins are put before the Committee summarizing the secondary legislation laid and alerting us to matters of significance. We have taken a particular interest in secondary legislation implementing the provisions of the Armed Forces Act 2006.

Examination of Departmental expenditure

30. Core Task 5 calls for Committees to develop a systematic framework for committee scrutiny of the Department's Main and Supplementary Estimates, its expenditure plans and its annual accounts.

31. Following the practice we established last year, we reported on the Spring Supplementary Estimate 2006-07, the Main Estimates 2007-08, and the Winter Supplementary Estimate 2007-08, in each case before the House of Commons was asked to agree the Estimates.[22] In this task, we have been assisted by the Committee Office Scrutiny Unit. As we noted last year, the MoD's Supplementary Estimates are of particular interest since they reveal the cost of military operations, which have traditionally not been covered in the Main Estimates.

32. In addition to our scrutiny of the Estimates, we have held an annual inquiry into the MoD's Resource Accounts, as set out in the Departmental Report and Accounts. In this task we were assisted by the National Audit Office (NAO), which produced an analysis of the MoD's Annual Report and Accounts for our inquiry.[23] In November 2007 we took evidence from the Permanent Under Secretary of State and the Finance Director at the MoD and we published our report on the MoD's Annual Report and Accounts in January 2008.

33. Approximately one fifth (£6 billion) of the MoD's budget is spent on the procurement of defence equipment. We are committed to holding an annual defence procurement inquiry, but—in line with the MoD's new focus on through-life equipment costs and the merger of the Defence Procurement Agency and the Defence Logistics Organistation into the Defence Equipment and Support organisation—we are focusing on defence equipment through-life rather than on acquisition alone. In addition, we have inquired into a number of individual procurement programmes: the Future Rapid Effects System and, as part of our inquiry into strategic lift, the Airbus A400M.

34. As part of our examination of expenditure, we have monitored the Departmental Minutes which the MoD has laid before the House of Commons in line with the requirement on Departments to inform the House when they propose to make a gift of a value exceeding £250,000.

Examination of Public Service Agreements and targets

35. Core Task 6 calls on Committees to scrutinise Departments' Public Service Agreements and associated targets.

36. We have held annual inquiries on the MoD's Annual Report and Accounts—the Department's report to Parliament on its performance in each financial year. These inquiries have examined the MoD's performance against its Public Service Agreement (PSA) targets. This has involved taking oral evidence from the Permanent Under Secretary of State (PUS) and the Finance Director at the MoD. We had hoped to publish our report into the Ministry of Defence Annual Report and Accounts 2006-07 before Christmas 2007. However, the MoD revised its assessment of its performance against its PSA targets on the eve of our evidence session with the PUS on 13 November 2007, meaning we had to postpone our evidence session until 28 November 2007. We found the MoD's late submission of such a significant piece of evidence, which went to the heart of our inquiry, frustrating. We published our report into the Ministry of Defence Annual Report and Accounts 2006-07 in January 2008.

Scrutiny of Agencies and other associated public bodies

37. Core Task 7 encourages Committees to monitor the work of the Department's Executive Agencies, Non-Departmental Public Bodies (NDPBs) and other associated public bodies.

38. Over the past year, the MoD has substantially reduced the number of Defence Agencies and taken many of the tasks of those Agencies back into the Department as a whole. Until April 2007, the MoD had seventeen Defence Agencies and five Trading Funds. This has been reduced to eight Defence Agencies and five Trading Funds. We have expressed concern that the reduction in the number of Defence Agencies may lead to a loss of transparency and Parliamentary accountability.

39. At the beginning of the current Parliament, we agreed to adopt a rolling programme of short inquiries scrutinizing the work of individual Defence Agencies. In 2005 and 2006 we held inquiries into the work of the Defence Procurement Agency, the Met Office, Service Children's Education, and the Defence Aviation and Repair Agency. In 2007, we completed our inquiry into The work of the Defence Science and Technology Laboratory and the funding of defence research[24] and held an inquiry into The work of Defence Estates.[25] As agency status is withdrawn, our scrutiny may need to focus on elements within the MoD and the Defence Equipment and Support organistaion. We will continue our practice of scrutinizing the work of the remaining Defence Agencies and Trading Funds. The MoD also has a number of other associated bodies. We have not scrutinized the work of the MoD's Non-Departmental Public Bodies so far this Parliament: this is a matter which we will consider in future.

Scrutiny of major appointments

40. Core Task 8 calls for scrutiny of all major appointments by the Department, envisaging that Departments would notify committees in advance of these appointments.

41. In our previous report on The work of the Committee in 2005 and 2006, we noted that the MoD did not inform us of major appointments and recommended that it should do so in future. In his response to our report, the Secretary of State for Defence accepted our recommendation and undertook to inform us of key civilian and Service appointments once they had been made. In 2007, the MoD provided us with notification of senior appointments. We monitored all significant appointments to the MoD, its associated agencies and public bodies, as well as to the Armed Forces. To date, we have seen no reason to act upon them. However, we endeavour to hold evidence sessions with new Ministers, senior officials and Service personnel at an early opportunity.

42. Following the departure of Lord Drayson, the Minister for Defence Equipment and Support, in November 2007, we held an evidence session with his successor, the Rt Hon Baroness Taylor of Bolton, on 21 November 2007 as part of our inquiry into the UK/US Defence Trade Cooperation Treaty.

43. In January 2008, as part of our annual inquiry into Defence Equipment we will take evidence from General Sir Kevin O'Donoghue, the first Chief of Defence Materiel who took up his post as head of the new Defence Equipment and Support organisation (DE&S) on 1 April 2007. DE&S was formed from the merger of the Defence Procurement Agency and the Defence Logistics Organisation. We have monitored the merger closely in 2007 and intend to question Sir Kevin about the progress made when he appears before us.