UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 53-i

House of COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE

DEFENCE COMMITTEE

READINESS AND RECUPERATION OF THE ARMED FORCES & THE GREEN PAPER

Tuesday 24 November 2009

RT HON BOB AINSWORTH, REAR ADMIRAL ALAN RICHARDS and MR TERENCE JAGGER

Evidence heard in Public Questions 406 - 471

USE OF THE TRANSCRIPT

Oral Evidence

Taken before the Defence Committee

on Tuesday 24 November 2009

Members present

Mr James Arbuthnot, in the Chair

Mr David S Borrow

Linda Gilroy

Mr David Hamilton

Mr Dai Havard

Mr Bernard Jenkin

Mr Brian Jenkins

Robert Key

________________

Witnesses: Rt Hon Bob Ainsworth MP, Secretary of State for Defence; Rear Admiral Alan Richards, Assistant Chief of Defence Staff (Strategy and Plans); and Mr Terence Jagger, Director Financial Management, Ministry of Defence, gave evidence.

Q406 Mr Jenkin: Secretary of State, we were assured when we came out of Iraq that readiness would start to improve. What evidence is there that readiness is now improving?

Mr Ainsworth: It did improve. There was a particular quarter that was affected by particular platforms that set us back. That was the first quarter of last year. We can probably go into that more in private than we can in public, but readiness has improved as a result of the drawdown of Operation TELIC.

Q407 Mr Jenkin: But not very substantially. When do you expect readiness levels to improve substantially? After all, we are configured under the Defence Planning Assumptions to do one medium-scale operation long-term, are we not? So we should see substantial improvements in readiness.

Mr Ainsworth: With 9,000 in Afghanistan, and potentially 9,500 in Afghanistan, it is a bit more than medium-scale, is it not?

Rear Admiral Richards: It is. It is certainly more than the medium-scale enduring peacekeeping operation for which we plan. In fact, in broad terms, without going into the specifics, it is just about twice the size of the enduring operation for which we plan and for which the written ministerial statement on Defence Planning Assumptions makes clear that combination of medium, small and small. That is based on a medium at 5,000, not a medium at 9,500, as we have at the moment. In order to generate that Force of 9,500 we are having to take certain of the Forces that would otherwise have been ready for the other contingent capability at medium-scale to backfill that medium-scale enduring.

Q408 Mr Jenkin: The real problem is, in the Ministry of Defence's own words - and I quote from their assessment of their own performance under Objective 2 - "While funding from the Reserve covers the immediate bill for operations, it cannot immediately address the impact on the Armed Forces of sustained harmony breaches, [and] the impact on their ability to conduct the full range of training for contingent operations". This brings me back to the point I made earlier, which is, in order to sustain our main effort in Afghanistan - and I commend you for making that the main effort - we are in fact having to hollow out our other capabilities, hollow out our readiness for other operations. Is that an acceptable position to be in year after year after year, which is where we have been?

Mr Ainsworth: If I am going to be realistic about what else we can do by way of contingent operations, we have got all of our standing commitments covered, we are trying to regenerate as quickly as we can for small-scale, but nobody expects us - I do not think - to be able to conduct another medium-scale operation at the same time as we are in Afghanistan at the kind of rates we are at the moment.

Q409 Mr Jenkin: This is conducting warfare on a peacetime budget, is it not?

Mr Ainsworth: I do not see the honourable gentleman's own party queuing up. I know they sneak up to people in corners and say, "If we get elected, we'll have a bigger Army" but that is not what the Shadow Chancellor says, is it?

Q410 Mr Jenkin: How long is this sustainable? How long can we go on at this pace?

Mr Ainsworth: We will have a Strategic Defence Review in which we will have to decide the size, the shape and the commitment that we are prepared to make for defence, and hopefully we will have a good debate about that led by the Green Paper I am preparing that will be out in January.

Q411 Chairman: You mentioned the 500 troops that were announced recently as being, if various conditions are fulfilled, ready to deploy to Afghanistan. What effect will that deployment have on readiness and recuperation? Have you been able to measure that?

Mr Ainsworth: It is bound to make things more difficult. To what degree I do not know.

Rear Admiral Richards: It is, but it is not going to significantly change the plans that we have already shared with the Committee with respect to small-scale. While we are in Afghanistan at the levels we are at the moment, medium-scale plus, generating any further medium-scale contingent capability is more problematic, and obviously, for reasons we have discussed with the Committee before in open session, the detail of those problems is not something that you would feel it was appropriate to share. We are able to generate certain of the medium-scale capabilities for the second medium-scale operation but they are affected by the fact that we are in Afghanistan at medium-scale plus.

Q412 Chairman: Afghanistan is really a standing task, is it not? Should it not be acknowledged as a standing task?

Mr Ainsworth: I do not know to what degree that would get us out of the situation that we are in. At what level should it be a standing task? In the spring we had 8,100 in Afghanistan. This is only in the spring. We then put a couple of hundred counter-IED capability in there. We then agreed to an election uplift of 700, which we have agreed to make enduring since. We are on the verge of, I hope, committing another 500. At what level would it be a standing task and to what degree would making it a standing task assist us? Of course, we would have to renegotiate our budget with the Treasury but that would not manufacture pound notes to pay for defence particularly, would it? So how we do the sums ought to be a secondary consideration. We ought to be making sure that we are properly supporting our operations in Afghanistan, and that has to be a combination, in my opinion, and that is why I have made it the main effort. The UOR situation must prevail, the Treasury must continue to pay for those additional costs, but we, after all this time in theatre, have a duty to bend our own core programme, in my view, in the direction of a very important operation. We need to look, even in the difficult financial circumstances that we are in, at what degree we can actually do that, and that is what we are doing.

Q413 Chairman: You say we are on the verge of deploying these 500 troops. Can we go into that? I think they were at readiness R1 and is it not right that they have now been reduced to readiness R3?

Mr Ainsworth: We have about a fortnight to move, whether that is R1 or R3.

Q414 Chairman: That would be R3. We have the three conditions which were originally announced about their being properly equipped, about the Afghans producing sufficient Afghan national army troops, and about the burden sharing. How is the burden sharing getting along?

Mr Ainsworth: We have been involved at every level in discussions with our allies, both the Americans and other allies. There are commitments that are being made. We are in the process of drawing them together.

Q415 Chairman: Do you have any suggestions for countries that might give more troops?

Mr Ainsworth: I think we can expect, maybe not immediately but over the initial period, the next few months, contributions from a wide range of countries.

Q416 Chairman: Really?

Mr Ainsworth: Yes, I think so. I am hopeful that, if the Americans make the announcement and give the commitment for a substantial uplift, the allies between them can probably get to in excess of 5,000 as an additional contribution, but the work is not finished and the discussions continue. I spoke to my Canadian opposite number, for instance, only yesterday. We know that they have an enduring commitment to 2011. Whether there is anything that they are prepared to do beyond that is a discussion that continues in Canada.

Q417 Chairman: Now we have a fourth condition which the Prime Minister announced about - I was not quite sure what this meant - the reduction of corruption in Afghanistan, which has been going on for a little time now.

Mr Ainsworth: There are three conditions that he wants to see met but he, quite rightly, put the Afghan Government under the maximum pressure, both privately and publicly, because every person in the military knows that there is no military solution in Afghanistan. We need a government to work with, we need good governance, we need pressure on corruption, we need progress on the insurgency from development, and we need initiatives - which is why General Lamb is out there as being asked to work with General McChrystal - for reintegration and reconciliation as appropriate with those elements who are prepared to come across.

Q418 Chairman: Of course we need all of that, but is it a condition for the deployment of these extra 500 troops and how do you measure whether this condition is satisfied?

Mr Ainsworth: We are going through a process of trying to satisfy ourselves that all of the conditions are met and if we feel they are we will make the deployment.

Q419 Chairman: Including the corruption one?

Mr Ainsworth: We have had considerable commitment from the Afghan Government that you know, Chairman, but words are cheap; deeds are what are needed and we need a level of confidence that those words will be acted upon.

Q420 Mr Havard: My understanding is that the American administration are now likely to speak after the Thanksgiving holiday rather than before, which is essentially next week. There is talk about the NATO Ministers meeting in December. The Prime Minister is talking about a conference in January. Can you help us a little more with when all of these decisions might come about so that we know when these deployments might actually take place?

Mr Ainsworth: I have the same hopes as you do that the American administration will make an announcement next week but I cannot say that for definite. It is for the President of the United States of America and he will make his announcement when he is ready, but we are talking to them. I am talking Defence Secretary to Defence Secretary, and I know the Prime Minister has been talking at that level. Just because there is a NATO meeting pending does not mean to say that there are not bilaterals and examinations going on all the time. As I said, I spoke to my Canadian opposite number yesterday and there are other people from the Ministry of Defence speaking to other people. I believe the Foreign Secretary is very active in trying to encourage people to step up to the plate.

Q421 Mr Havard: One is right to assume that the shape of their contribution is up for discussion as well? They might not all be frontline infantry troops; there may be other skills.

Mr Ainsworth: Yes.

Q422 Mr Havard: Certain people might contribute in a different way. Could you help me also with this January business?

Mr Ainsworth: Precisely, the shape and what they are prepared to do with their troops and the capability that they deploy is important. There are other issues as well. There are countries which may not be prepared to deploy troops or have troops to deploy directly, but they have the wherewithal potentially to fund others who have the preparedness to deploy but just do not have the money in order to do so. So those things are being looked at between countries to see who can help.

Q423 Mr Havard: Countervailing capability. January?

Mr Ainsworth: There is a conference, as the Prime Minister announced, planned for January in London.

Q424 Mr Havard: Any idea when?

Mr Ainsworth: I do not think we have got a definite date yet.

Q425 Mr Jenkins: This is not with regard to the 500 extra troops that are being deployed. I notice that we are somewhere approaching 17 per cent of our Armed Forces deployed. Could you send us a note, please, on what you mean by "deployed", and where they are, their numbers and locations? We would be very grateful for an overall picture of what they are actually doing at the present time.

Mr Ainsworth: We focus on Afghanistan - that is far and away the overwhelming task - but we still have people in Sierra Leone, we have people in the Falkland Islands, we have naval ships on station, and we have a counter-piracy operation. We have all these other things.

Q426 Mr Jenkins: We need the whole picture, not just the narrow one.

Mr Ainsworth: Yes.

Q427 Mr Hamilton: The Chairman indicated having the 500 subject to a fourth condition is meaningless. Surely, it is not meaningless because, at the end of the day, this Government has to try to win the hearts and minds of the British people, and a part of that is going to be reducing the amount of corruption in Afghanistan. Surely there should be a fourth condition and the Prime Minister is quite right to do that and the Chairman is wrong?

Mr Ainsworth: I think all of the conditions we have tried to apply are valuable and appropriate. I do not think that. There was some suggestion as to why the Prime Minister is making it conditional on recruitment. I do not think my constituents and yours are happy to see us continue to put additional troops in there unless he can fully and utterly satisfy himself that the supply chain, the systems within the MoD, can make sure there are appropriate levels of equipment. He is not prepared to do that and he is holding my feet to the fire to make sure that the equipment is there, as he is on the other conditions.

Mr Jenkin: Are we seriously being asked to believe that, if President Obama sends an extra 37,000 or 40,000 troops and finally accedes to General McChrystal's request, our Prime Minister will say, "No, we are not sending another 500 troops because there is still corruption in the Afghan Government"? This is absurd. The reality of our situation is that we are waiting for Obama to make a decision and, when he has made his decision, is it really conceivable that we would make a different decision? I think we should be realistic and we should explain to the British people that we are in a coalition operation which is very largely being met by the Americans, who have vastly larger forces than our own, and we are but a component in that coalition.

Q428 Mr Hamilton: That is not a question. That is an opinion.

Mr Ainsworth: I am not detracting from that, and we did not set the conditions without thought as to other people's opinions and without discussions with other people's opinions, including the Afghan Government, and, of course, the comments that he makes about money, we would all like more money, but I would just remind him that the defence budget has gone up consistently over time. It is now ten per cent higher than it was in 1997 and the contribution from the Reserve has risen for Afghanistan from £700 million to £3 billion, or over £3 billion in this current year - a considerable amount of money.

Q429 Chairman: I take all the blame for this, because we have got far away from the Green Paper and the issue of readiness and recuperation, but these questions do have to be asked and I am grateful to you for answering them. I kept saying during the course of the morning that we would get back to the Strategy for Defence. What exactly does the Strategy for Defence that you wrote to me about change?

Mr Ainsworth: It gives us focus on the main effort and---

Q430 Chairman: Which previously you did not have?

Mr Ainsworth: I am not suggesting that people did not have, but you have to try to drive this into every single part of the organisation and make sure that they appreciate where you are going and what is possible while that main effort is being maintained at the level it is now.

Rear Admiral Richards: We have talked to the Committee before about Defence Strategic Guidance, which includes Defence Planning Assumptions that we touched on earlier, and those are a very wide range of assumptions based on 18 or so military tasks against a range of contingent things that might happen, things that we could be doing. The challenge that we faced, I think, in defence - and it is touching on the Chairman's point about should this be a standing task or not - was when you are so fixed in one area of the contingent task scale, as we are in Afghanistan, the Department then needs to try and understand what next it should focus on in order to make best use of the remaining resources. What we have tried to do with the Strategy for Defence is to give the Department that focus. It is an additional layer on top of Defence Strategic Guidance, and it is much more directive than other documents that we have had in the past. Principally, though, it answers to the requirements of the Capability Review that was done on the Department more widely, beyond Defence Strategic Guidance, which the Chairman understands is a very highly classified document, which is not available to everyone in the Department. We needed to put something both at a classified technical level, which we had, and then at an unclassified level. The Strategy for Defence meets both of those needs as well. Clearly, in the current context, it is a document aimed at the relatively short term. We would expect this document to be refreshed as a result of a Strategic Defence Review, and we have plans to do so. So the document in the short-term is designed to get us up to and through a Strategic Defence Review until we will generate a larger document than the one we currently have.

Q431 Chairman: Does it pre-empt the Green Paper?

Rear Admiral Richards: No, it does not.

Q432 Chairman: Why not?

Rear Admiral Richards: Because the Strategy for Defence was started towards the beginning of the year. The Green Paper is something that is ongoing and will contribute, as will the Strategy for Defence, to any future Strategic Defence Review.

Mr Ainsworth: This is aimed at the period to 2014 to get us to the Strategic Defence Review. The Green Paper will be aimed at informing the Strategic Defence Review for the future period thereafter.

Q433 Robert Key: Secretary of State, you said that the Ministry of Defence would be examining the aspirations of our Armed Forces personnel as part of this process. Who will you be consulting as part of this Green Paper process? For example, will you be consulting the families, those who follow the flag? Will you be talking to the Army Families Federation and the other Forces representative federations?

Mr Ainsworth: As part of the Green Paper process? Absolutely. I tend to think that we over-focus on equipment issues and going forward we had better be mindful of the people issues. Therefore, it is absolutely essential, if we are going to retain in very difficult financial circumstances, at times where the technological gap that we have between ourselves and other countries will maybe be eroded, the edge that we have will be largely invested in the quality of people that we are able to maintain, so there are a lot of societal changes that will put pressure on that and keeping those people will be enormously important. Getting enough of the focus of the Green Paper and subsequently the Defence Review on how that is sustainable is important. We cannot do that without Service charities and family federations and the enormous input that they can have to that, and the Chain of Command as well.

Q434 Robert Key: You have announced a distinguished group of people to form the membership of the Defence Advisory Forum in the Green Paper, including some party politicians. What other form of party political input would you anticipate seeking or receiving as part of the Green Paper process from other political parties, from overseas interests, perhaps from pressure groups? How will you handle that?

Mr Ainsworth: We have consulted our allies and they know that this process is going on so, as we were able to feed into the Livre Blanc when the French were doing it, we want them to be aware of what we are doing, particularly our American allies where interoperability is an important issue. Other political input: I have not really focused on how I increase that. I am enormously grateful, at a time of heightened party politics that we are inevitably in now; I did not know that we were going to be able to get the Conservative Party and the Liberal Democratic Party to agree to be part of this process. I am very pleased that Nicholas Soames is part of the Defence Advisory Group and Menzies Campbell for the Liberal Democrats. They are making an input and having an impact, and I think that gives everybody across the political spectrum some assurance that this is not a party political game that is being played; it is a serious piece of work that will help the Department prepare for a very important Strategic Defence Review.

Q435 Robert Key: How will you include the academic world?

Mr Ainsworth: We have got some of them on the Defence Advisory Board and we are trying to encourage all of the various brains and organisations that there are to run their own thinking on this and to feed into the process. With organisations like RUSI, for example, we are providing speakers and encouraging them to participate and make representations so that we can pick their brains as well.

Q436 Robert Key: What about the defence industry, the defence manufacturing industry in particular?

Mr Ainsworth: We have a representative on the Defence Advisory Board. We have the Defence Industry Council, which we will be reporting to. They will be enormously concerned to have their say and to make sure that the industrial issues are properly considered, and we do not want to cut them out in any way.

Q437 Robert Key: Will you be using online consultation with the general public too?

Mr Ainsworth: To the degree that we can, but we are preparing for a Green Paper. The Green Paper is the consultation document. Hopefully the Green Paper will then become the driver for more general consultation that will give us a quality debate on defence leading up to the Strategic Defence Review.

Rear Admiral Richards: We do actually have an online blog on the King's College London King's of War website for any members of the public who want to offer their views.

Chairman: Secretary of State, you said that you had consulted our allies. The French in their production of the White Book I think conducted an exemplary exercise in how to keep this country informed of what they were doing and involved, and I hope you might consider some of their processes because I thought they were extremely good.

Q438 Mr Jenkin: The appointment of your inclusive cross-party board is a very good initiative and I think this Committee would welcome it, but your predecessor was talking earlier this year in quite a lot of detail about the need to address the future size and structure of the Army in particular. What has happened to that work? Is that work now ongoing or is it part of what will be in the Green Paper?

Mr Ainsworth: These are decisions for a Strategic Defence Review and obviously we will want to point up as many of those issues as we can as part of the Green Paper process. What I am concerned about at the moment is I am trying to balance the books to deal with the financial difficulties that the Department has to shift resources to the degree that is appropriate to the main effort, which is Afghanistan, and yet not - and it is not easy to do - pre-empt strategic decisions that, quite rightly, should be left to a Strategic Defence Review. Avoiding that is difficult. There is pressure, but that is what I would like to do. I would not want us, as part of an interim desire to move money towards Afghanistan and some of the financial pressures that I have, to undermine the big decisions that need to be taken.

Q439 Mr Jenkin: Is it still your intention to produce revised Defence Strategic Guidance by the end of this year?

Mr Ainsworth: I do not know exactly how they flow out of the Strategic Defence Review but they will flow from a Strategic Defence Review.

Q440 Mr Jenkin: We were going to have them this autumn but are we now not going to have them?

Rear Admiral Richards: I think the Strategy for Defence, in the way that I have described, has overtaken the Defence Strategic Guidance. We will stay with the Defence Planning Assumptions that were published in the written ministerial statement earlier in the year and the Strategy for Defence focuses on specific areas of those Defence Planning Assumptions that the Department is going to focus on, in the way that we have shared previously with the Committee in closed session in respect of the particular types of operation for which we are going to be ready in a contingent sense.

Q441 Mr Jenkin: In your letter, Secretary of State, to my honourable friend the Chairman, you said, the Strategy for Defence was to provide a better match between available resources and the Defence programme. The document says: "We cannot wait until a Defence Review to look to the future." Does that mean the Green Paper itself is actually going to be addressing the funding gap between what we are actually doing and what we are able to fund? That is why we have failing targets and are unable to produce capabilities for other contingent operations and so on, it is because we are doing more than we bargained for, and I appreciate the dilemmas this creates for the Department.

Mr Ainsworth: That is not the job of the Green Paper. I do not think that should flow into the Green Paper. We have got to try, as I have just said - and the reason I have said what I have said is the tension that there is between shifting resources towards Afghanistan, balancing the books in the planning round, and taking the decisions that will be necessary as a result of that - to avoid taking out capability or taking strategic decisions that are quite rightly left for a Strategic Defence Review. I think all of the single Service Chiefs agree with me that we have to try to enhance our contribution towards Afghanistan. That of course makes our planning round more difficult because we are trying to shift resources within it but that is the process, to take these interim decisions in line with the Strategy for Defence, not the Green Paper. The Green Paper has to look at the long-term and tee up the issues for the debate that we need to have and the Strategic Defence Review that needs to be had in the near future.

Q442 Mr Havard: Can I just press you a little bit on that? You just described what you described earlier as "bending the core programme" in order to do some of these things in the immediate future. The Defence Strategy, as I understand it, is a five-year look forward to 2014. However, you do not want to compromise your strategic decisions. I asked the Permanent Secretary this the last time we had him here for an evidence session: the Trident concept phase was supposed to have been decided in September gone. We were told that it is now going to be decided next month and that something will be published, presumably before the recess. How do decisions about now, if you like, actually interact with that and what are you actually doing about big concept programmes, like Trident in particular, in terms of what you described as "bending" the expenditure?

Mr Ainsworth: We took a decision on Trident in the White Paper in 2006.

Q443 Mr Havard: Yes, but that had milestones and various stages in it, did it not?

Mr Ainsworth: Yes, of course I want the full benefit of the UOR process to support Afghanistan, but I want, and all of the Service Chiefs want as well, to look at what more we should be doing within our core budget to support Afghanistan. I do not want to take long-term strategic decisions, that is for the Strategic Defence Review.

Q444 Mr Havard: So when you are considering what you describe as the core budget, are certain issues like, for example, decisions about money that has already been earmarked for programmes like Trident or whatever, exempt from this? What is in this consideration of the core budget that you say you are going to re-allocate and what is not in it?

Mr Ainsworth: I think that we can, without impacting on strategic decisions, on major capabilities, move a proportion of our budget towards Afghanistan. I cannot say, because we have not completed our consideration, whether that is half a per cent, one per cent, three-quarters of a per cent or one and a half per cent or whatever, but I think out of a budget of £35 billion we can move some money towards Afghanistan and improve, therefore, the support that we are giving to our troops without undermining, I am hoping, any of those big, strategic decisions that it would be inappropriate to take outside of the proper intellectual rigour that there needs to be for an SDR.

Q445 Mr Havard: Will we have the concept phase for Trident before we recess in December?

Mr Ainsworth: I do not know. I think so but I am not sure.

Rear Admiral Richards: I do not have the detail of that.

Q446 Mr Havard: Perhaps you can write to us.

Rear Admiral Richards: In respect of the delay on the concept phase, that is not a function of the work that we are doing to refocus the defence budget. There are other factors that are not about the finance.

Q447 Mr Havard: You will understand we need to know what the relationship between those different things is.

Rear Admiral Richards: Indeed.

Q448 Mr Jenkins: If I can return to the question that Bernard Jenkin asked, to which we did not get an answer, which was how far have you got with your work looking at the shape and the size of the Army you said it was all in the Defence Review, but surely we know there is work ongoing. I did ask the Permanent Secretary at our last session, when he said that we have more officers in the Army than we probably needed. When I look at the shape of the Army, not the size, we are 500 infantrymen short, and yet we have 1,790 lieutenant colonels, probably enough traditionally to run an Army of over half a million, and we have 100,000. When are we going to get the work completed with regard to the shape of the Army, or the possible shape of the Army, to put into the Defence Review and who will be finally responsible for deciding the shape of the Army?

Mr Ainsworth: We will flag up the big decisions in the Green Paper so that they can properly be taken in the Strategic Defence Review. That is not to say there are not other strands of work going on in the Department. There is a value for money study going on that looks at whether or not all of these posts and other things are needed. We should not be looking to change the shape of our Armed Forces. I think we would wind up with a great kickback if we tried to change the shape of the Armed Forces without the serious work that is needed through the Green Paper process and through the Strategic Defence Review. So we will try and tee up these issues in big handfuls and make sure that they are dealt with within the Green Paper. The threat is going to change. The agility that is going to be needed to deal with the threat is going to change. We are going to have to start thinking as a nation about whether we are properly configured to deal with those threats, whether the Department is properly structured to deal with those threats. I do not think we can take decisions on all of those issue and I do not want the Green Paper to try to take decisions, but what I do want the Green Paper to do is to ask all of the questions and to pose the dilemmas so that we can have the debate and the SDR will then take the decisions and the government of the day will have to take the decisions.

Q449 Chairman: Secretary of State, can I move on to a couple of brief questions about the Bernard Gray review of acquisition? In your response to that document you said you would be publishing a wider acquisition reform strategy in the New Year. What form will that take? Will it be as part of the Green paper or will it be a different document? How will it feed into the Green Paper?

Mr Ainsworth: First of all, can I just say, I know there was a lot of talk about us suppressing the Gray Report and everything else, but the main thing was to get the report published.

Q450 Chairman: I entirely agree with that.

Mr Ainsworth: I was John Hutton's deputy when he commissioned it. I think it was the right thing to do. Everybody knows that there are problems in the acquisition area and Bernard Gray has really helped us to shine a light on them and to give the necessary momentum for change that we all want to see.

Q451 Chairman: I do not want a general commentary on the Bernard Gray Report because we will come to that in due course. I am just trying to work out exactly what you meant by "an acquisition strategy published in the New Year".

Mr Ainsworth: I think we will need to talk about acquisition in the Green Paper but we plan a separate document that will go into more detail about our response to Bernard Gray and the measures that are now necessary.

Q452 Chairman: Will that separate document come out before or after the Green Paper?

Mr Ainsworth: I am not sure, Chairman. The work on the separate document is being led by Lord Drayson for the New Year. Probably before.

Q453 Chairman: Will the Green Paper involve a consideration of defence acquisition?

Mr Ainsworth: Yes, I do not see how it does not but it will feed off the work. It obviously will not go into the detail of the other document but it will feed off the work and try to inform the Strategic Defence Review. You have all of the maintenance of national assets and the sovereignty issues that we need to think about as part of our ongoing security for defence capability.

Chairman: I do not think anyone thought that the Ministry of Defence wanted to suppress the Bernard Gray review.

Q454 Mr Havard: A short question: when do you think it would be sensible for us to perhaps have a discussion with Lord Drayson about his work and the development of his work? Would that be the end of January or February?

Mr Ainsworth: I do not know.

Q455 Mr Havard: Could you perhaps give us a clue? It might be sensible that we speak to him directly about what he is doing at a time when he can give us some answers.

Mr Ainsworth: Have you asked?

Q456 Mr Havard: Not yet, no. Now we know it is him and now we know when, we will.

Mr Ainsworth: Ask, and, as ever, we will try to respond constructively.

Q457 Linda Gilroy: Will the comprehensive approach feature in the Green Paper in the sense of stressing its importance so that we can also look to see that as part of the Strategic Defence Review?

Mr Ainsworth: It is not completed yet and final decisions have not been taken, but I hope that there will be a chapter in there on lessons learned from recent operations and, of course, the importance of a comprehensive approach. The progress and difficulties that we have had with progressing that is an important part of that.

Q458 Chairman: Can I move on, please, Secretary of State, to recuperation and progress on it. Our memory is that the previous Secretary of State was quite clear that the Ministry of Defence was aiming to recuperate to pre-2003 levels. Does that remain your intention?

Rear Admiral Richards: The target for us is to recuperate forces that are relevant for today. In terms of establishing a funding baseline with the Treasury, we have to work in funding terms to what it would cost to recuperate vehicles and other pieces of equipment to the level that they were at pre-TELIC in 2003. It will then be for a negotiation and decision between the Ministry of Defence in respect of what we think we will need for the future and the Treasury as to how that money is spent. I do not think the Treasury or the Ministry of Defence are keen to put the money into capabilities that have either been overtaken by events or are at standards of protection and other areas that we would be prepared to put our people in as a result of our experiences on TELIC and in Herrick. So we will be looking to establish the funding baseline on the basis of pre-TELIC and then the actual expenditure and the recuperation of equipment will be based on the lessons that we have learned since then, and indeed, focused on, in priority order, those contingent tasks that we have set out in the Strategy for Defence that we most want to do first and moving on with respect to other contingent tasks when the occasion allows.

Q459 Chairman: Clearly, you have not reached any agreement with the Treasury about these resources?

Rear Admiral Richards: We have an understanding of the broad total sum. The challenge for us now is to understand how we want to spend that money in the most effective way. Where we are at the moment is recuperating equipment from TELIC that we want to deploy into Herrick and that has been our priority until now.

Q460 Chairman: In April your predecessor, Secretary of State, said, "I think the plan is on target. We hope by the end of May" - in other words, the following month - "to produce a recuperation directive and that will of course require agreement to have been reached on all of the resources". Here we are in November and we just have this broad outline.

Rear Admiral Richards: We have produced a directive and it has been issued with respect to the first of the contingent tasks and recuperating equipment from TELIC for Herrick and that is the position that we are currently at.

Q461 Mr Havard: I remember distinctly asking the previous Secretary of State for Defence whether he really meant 2003. You are saying that is a funding baseline. Is that up-rated? That cannot be 2003 prices. If it is up-rated, is there any account for defence inflation in that, which is greater than normal inflation? How is that done? What is that number?

Rear Admiral Richards: It would be absolutely up-rated to what it would cost us to do that work today. The challenge is we do not want to do the work on equipment that we do not intend to use in the future, for a variety of reasons, nor bring equipment to a standard that is not deemed suitable for current operations.

Q462 Chairman: Admiral Richards, you said that the directive had been produced. Could we see a copy of that, please?

Rear Admiral Richards: Yes. It is a classified document but absolutely.

Q463 Chairman: That is very helpful. Thank you. A question that was touched on briefly by Bernard Jenkin earlier was that the Strategy for Defence puts the focus on the next five years on small-scale contingency operations. What happens if we are faced with a medium-scale operation? Do we just send someone else?

Mr Ainsworth: Just because we are not structured or planning to run another medium-scale while we are involved in Afghanistan to the degree that we are does not mean to say that if an emergency arose we would not try to rise to it. We would have to rise to it, as we do, but that would obviously involve a stretch on our people. They have never been lacking in the past in terms of rising to the challenge but, yes, it would be difficult to conduct another contingency operation. It would not be something we are able to do while we are fixed in Afghanistan to the degree that we are.

Q464 Mr Havard: This is the difference between activities of choice and activities of necessity in terms of what you have described as emergency, but it would colour our political decision-making process about what other coalition or other activities we undertook either independently or in conjunction with anyone else that were, as you could describe it, operations of choice.

Mr Ainsworth: Making Afghanistan the main effort means that comes first, all other considerations taken aside, so that is where the money, the resource, the expertise, has to be applied. What I do not want is somebody in some part of the organisation to be spending time and capability trying to reconfigure for another medium-scale when other parts of defence cannot possibly do that. We need to do this in a coherent way. That is the whole reason for the Strategy for Defence. Afghanistan is the main issue. What are we capable of regenerating to while we are still there in the amount that we are? We are certainly capable of doing a medium-scale contingent, so let us make sure everybody is focused on that. That is the second priority.

Q465 Mr Havard: Your strategic management approach and the performance management system within it help to do that, do they?

Mr Ainsworth: Should do.

Q466 Mr Havard: I look forward to seeing it.

Rear Admiral Richards: The challenge here is to establish the difference between a contingent task for which we have at the right readiness, namely with the right manpower, the right equipment, the right training and the right support, that stuff all ready to go on the shelf, as it were, the difference between that position and the position that we might be in if an issue of national significance came up and we would then want to take risk against harmony, we might change the way that we are doing the operation in Afghanistan, in order to free up resources to do that issue of national significance. That is a different thing. So there is a difference between planning for, as we would term it, a war, which is a contingent capability, rather than the war, which is events that are actually happening on the ground at the moment. It is not true to say that we could not generate a medium-scale capability if an event occurred of national significance. We could. We simply do not have that capability as a contingency, ie on the shelf at the moment with the right levels of harmony and all of the other factors.

Q467 Chairman: Has the Treasury agreed a definite sum for recuperation?

Rear Admiral Richards: We have in broad terms agreed a sum for recuperation, yes. It is around £300 million, setting aside the ammunition and other complex weapons.

Q468 Linda Gilroy: On the data security question, Secretary of State, the MoD has reported good progress in implementing the recommendations of the Cabinet Office data handling review. As of 31 March it has implemented 31 out of the 51 recommendations of Sir Edmund Burton's report. However, there were eight data-related incidents reported to the Information Commissioner. The details are in the Departmental Resource Accounts. Why are you still reporting so many data loss incidents one year on? Have the procedures really improved? Which Minister is the champion for this very sensitive issue? They should be treated as strategic assets.

Mr Ainsworth: We have changed the systems and we used the Burton Report in order to assist us to do so. I hope that we have to the degree that is necessary changed the culture in the Department to make sure that people are a lot more focused on data loss as well. We have certainly seen a significant decrease but there are still problems arising. It is not something that we can afford to lose focus on and we are not planning to do so. It is still an important issue that we are trying to drive yet further into the culture of the Department as we implement the Burton review.

Q469 Linda Gilroy: Do you expect next year to see an improvement, a reduction in the number of incidents reported? Which Minister is the champion for this?

Mr Ainsworth: I hope so. We have already seen a reduction but I cannot guarantee that someone will not lose something somewhere in what is a very large and very complex organisation. I cannot tell you who the champion is.

Q470 Linda Gilroy: Do you think there should be a champion?

Mr Ainsworth: At ministerial level? The Second PUS is the person who drives this on the official level, trying to make certain it has the focus that it needs. Whether it needs a ministerial champion I am not sure.

Q471 Mr Jenkins: if I can go back to recuperation, your plans are very well organised and focused on the equipment but any organisation knows that the manpower is far more important than the equipment. Can I ask you to focus and refocus, because some of this manpower has been stretched over the last few years. They have had to forego their training, their personal career development, there are a lot of things they have had to forego, and the cost of bringing those extra training facilities on line, getting them trained, etc, should be borne by the Treasury as well, because it is a cost that really is one that should be borne by the core, because it is exceptional to the core. Would you come back, please, and show us that you have plans for the personnel as well?

Rear Admiral Richards: Yes. Certainly I can reassure you that absolutely we have plans for the appropriate training to support that. One of the reasons why the readiness has not improved as rapidly as you might have expected after the Iraq drawdown is because we have both sought to re-establish harmony or reduce the levels of separation for our people and restart the training, but you will understand that in order to train them sometimes they have to go away from home, so we do not want to deploy them again rapidly so that they can do the training before we have re-established their harmony. All of these factors are being taken into account, which explains why this is an extremely complex mixture to get recuperation back on track. We will certainly write to you on that.

Mr Jenkins: Thank you very much.

Chairman: I think we are done. Thank you very much indeed. Thank you to all three of you for coming to give evidence. It has been a long session and we have covered a lot of different ground. It has been most helpful and informative. Thank you.